January 6, 1993 EXTENSIONS OF REMARKS 335 EXTENSIONS OF REMARKS AMBASSADOR WOLFF JOINS THE ity. But significant efforts were made in Re­ services. The composition of the American BOARD OF TRUSTEES OF THE publican Administrations as well, with the economy matters. MONTEREY INSTITUTE OF Tokyo Round and the Urug·uay Round both Most of you will say, "don't we already do this?" The answer is "no." For one thing, we INTERNATIONAL STUDIES initiated in Republican Administrations. THE RF.AL ISSUE IN 1992 are not at all confident that we are suffi­ ciently aware of what enhances competitive­ The real issue in 1992 is how to revitalize ness of any given industry. Failing· famili­ HON. LEONE. PANETIA the American economy, create jobs, and en­ OF CALIFORNIA arity with the trade flows we are affecting·, sure a hig·her standard of living· for our chil­ we settle for being for open markets, not an IN THE HOUSE OF REPRESENTATIVES dren. Clearly, America's recent economic entirely bad fall-back when we do not know Wednesday, January 6, 1993 performance has been disappointing. In the much about what is taking· place in the last four years, we've had the slowest rate of world. Mr. PANETTA. Mr. Speaker, Ambassador economic gTowth since Herbert Hoover, and But since we fail to test our neg·otiations Alan William Wolff, who served as the U.S. America has lost 1.3 million manufacturing by whether our producers are better off at Deputy Representative for Trade Negotiations jobs since January 1989. Our long·-term per­ the end of them, we run into distinct prob­ from 1977 to 1979, presented some very formance has also been disappointing·. If the lems. To give you only the most recent ex­ thoughtful remarks entitled "Constructing a United States enjoyed the same rate of pro­ ample, the United States just gave KLM New U.S. Trade Policy" to the Economic ductivity gTowth in the 1970's and 1980's that Royal Dutch airlines the right to land any­ we did in the 1950's and 1960's, median family Strategy Institute of Washington, DC, on Octo­ where in the United States. Our negotiators income would be $47,000 instead of $35,000. ber 5, 1992. I have attached a copy of his re­ received in return the right for our airlines Most of the answer to the problems affect­ to land at any airport throug·hout all of Hol­ marks for the benefit of my colleagues. ing America's competitiveness rests upon land. Just think of it! The newspapers I am very pleased to note that Ambassador the vitality of the private sector. To meet quoted a KLM executive as saying that this Wolff, currently serving as the managing part­ the challenges of global economic competi­ was a "dream" agreement. And from his per­ ner of the Washington, DC, office of Dewey tion, U.S. firms must expand employee in­ spective it certainly is. Ballantine and the coauthor of "Conflict volvement, continually improve the quality Robert Crandall, Chairman of American Among Nations-Trade Policies in the of their products, and forge better relation­ Airlines, said of this deal "Holland is a very 1990's," has agreed to join the board of trust­ ships with their customers and suppliers. small country. We can't justify service to But government can play a constructive role Amsterdam [alone]. We get nothing." ees of the Monterey Institute of International by creating an environment in which Amer­ Our negotiators said that this agreement Studies. ican workers and American firms can com­ would give our consumers greater choice. Ambassador Wolff's unique trade knowledge pete and win. Our government's economic This is simply muddled thinking. It would be and experience will be of great help to the strategy must include: no more than a curiosity if the adverse im­ Monterey Institute as it enhances its academic 1. The creation of a national apprentice­ pact on America's commercial interests were programs designed to prepare individuals to ship program to offer non-college bound stu­ not real. We can no longer afford this kind of dents training in a marketable skill; quirky, idiosyncratic trade policy, which is help our Nation meet the fierce economic and contrary to the nation's commercial inter­ trade challenges confronting us in the years 2. Investment in our Nation's infrastruc­ ture- not only in roads and bridges but in ests. ahead. high-speed rail and information super­ Similar problems have occurred in the The remarks of Ambassador Wolff follow: highways; Uruguay Round. For example, we have en­ CONSTRUCTING A NEW U.S. TRADE POLICY 3. Tax incentives to spur private sector in­ dorsed lofty principles without considering (Remarks of Alan William Wolff) vestment in R&D and new plant and equip­ in advance their practical effects. In the ne­ gotiations on trade in services, we sought a FREE TRADE VERSUS PROTECTIONISM ment; 4. Initiatives to accelerate the commer­ most-favored-nation rule as part of a frame­ All trade policy practitioners, those who cialization of new products; and work agreement. It only later become appar­ make policy and those who seek to affect de­ 5. A sensible fiscal policy that attacks the ent that the requirement that we give the cisions, know that "free trade" and "protec­ federal budget deficit. same treatment to all countries-before oth­ tionism" is a false dichotomy. Likewise, de­ ers gave commitments to open their mar­ spite the efforts of the Bush Campaign, the A TRADE POLICY FOR THE 1990 ' S kets-wedged our market open while depriv­ 1992 election is not a choice between "free Since today's discussion is not about work­ ing us of the means to apply unilateral lever­ trade" and "protectionism." In a speech at er training or infrastructure or technology age to get those markets open at a later Georgetown University, Bill Clinton stated: policy, I would like to discuss ways in which stage. We had gotten swept up in a desire to "The American people aren't protection­ the conduct of U.S. trade policy can and improve the appearances of the international ists. Protectionism is just a fancy word for should be improved. '!'his exercise is not in­ trading system without examining the prac­ giving up; we want to compete and win. " tended to be a polemic against the Reagan­ tical effects on our industry's competitive Thus, both candidates have called for a Bush record. In fairness, much of my criti­ position. successful conclusion of the Uruguay Round cism would apply equally to previous Admin­ Just as American foreign policy must serve of multilateral trade negotiations. Those istrations, including the four in which I the national security and economic inter­ who address trade issues in either campaign served. But there is a difference. Times have ests, America's trade policies must serve the assert that their candidate believes that the changed. The Cold War is over. The hier­ national commercial interests. Uruguay Round has the potential to help archy between the " high politics" of foreign Second, U.S. trade policy must be U.S. companies by lowering tariff and non­ policy and diplomatic concerns, and the " low proactive. tariff barriers, strengthening the global pro­ politics" of U.S. economic commercial inter­ If foreign governments are intervening in tection of intellectual property, and main­ ests, is no longer appropriate. But somehow markets to promote their industries, either taining effective disciplines against unfair our frame of reference has become frozen, through closing their home market or pro­ trade practices. our policies ossified. viding subsidies, the United States must act Nor is trade policy an issue that has di­ Republicans and Democrats alike must re­ decisively and act early. We must either con­ vided the two political parties in the post­ examine our trade policy, and assess whether vince foreign governments to change their war period. There is a long Democratic tradi­ it is adequate for the fierce international behavior, or we must take action that will tion of support for open trade. It was Frank­ competition of the 1990's. It is vital that offset the effects of the foreign industrial lin Roosevelt who put an end to the era of America's trade policy be improved. Let me targeting. This is not a prescription for eco­ Smoot-Hawley tariffs; President Truman suggest six ways. nomic conflict. It may be that the U.S. who helped rebuild Europe and the inter­ First, we must end the confusion over the measures required will have more to do with national trading system; and Presidents purpose of America's trade policy. Its central assuring that American industry is not dis­ Kennedy, Johnson, and Carter who made purpose must be to serve to enhance the advantaged-for example by tax policy-than multilateral trade negotiations a top prior- competitiveness of American industry and through any form of trade measures. e This "bullet" symbol identifies statemencs or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. 336 EXTENSIONS OF REMARKS January 6, 1993 The United States cannot afford another Because U.S. policy focuses too much on may not work in theory, but they have been Airbus-the European g·overnment-backed form and procedure, rather than substance, known to work in practice. I don't believe we civilian aircraft consortium that has re­ we have often negotiated ag-reements which should necessarily emulate these policies, ceived $23 billion in subsidies.