STANDARDS CODE OF THE TRADE AGREEMENTS ACT OF 1979 THURSDAY, JUNE 28, 1979 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON TRANSPORTATION AND COMMERCE, Washington, D.C. The subcommittee met, at 9:30 a.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. James J. Florio (chairman) presiding. Mr. FLORIO. Ladies and gentlemen, I would like to call the meeting of the Subcommittee on Transportation and Commerce to order and express my apologies, particularly to Ambassador Strauss, for being late. I was meeting with the Department of Energy officials with regard to New Jersey's gasoline problems and gasoline station difficulties, although for the benefit of the meeting, I might as well have come over and been with Ambassador Strauss. Perhaps we can roll something into the Trade Agreement to insure that we have a greater supply of gasoline in New Jersey. unfortunately, we did not reach any understanding of that kind with DOE officials this morning. The committee is here this morning for the purpose of hearing from the Ambassador and number of other witnesss on a very important topic. There is no doubt that the expertise of American technology should stand on its own merit in the international market. We should be in the forefront of worldwide trade. However, as we review U.S. trade history we find that this is simply not the case. For whatever number of reasons, and I am sure standards activities have played a major role, we have slipped from that position. The United States has, for the most part, played by the rules. The Federal Government and the private standards setting organizations have developed criteria to insure the health and safety of our citizenry-whereas foreign standards have oftentimes proved to merely be the easiest to live with. I have heard, as I am sure other members of the subcommittee have, the many stories of obvious and deliberate setting of standards by other countries aimed at barring American products from their markets. To go one step further, the behind-the-scene activities and under the table operations that take place also serve to keep us out of a great deal of trade business to which we should be entitled. I am concerned with how we handle these problems. The standards section of the Trade Agreements Act is intended to put an end to these questionable manipulations of trade activi (1) ties. This legislation does not propose to set standards. It does, however, outline those areas where international standards and standards making procedures are applicable, as well as where they are inappropriate. As I understand the concerns of American manufacturers, standards setting organizations, and labor, an appeals process is mandatory. We must take the necessary action to establish and maintain a sounder, more equitable approach to the international trade. We therefore feel honored that Ambassador Strauss would see fit to come before the committee and provide us with his thoughts. Ambassador, we welcome you. STATEMENT OF AMBASSADOR ROBERT S. STRAUSS, SPECIAL REPRESENTATIVE FOR TRADE NEGOTIATONS, EXECUTIVE OFFICE OF THE PRESIDENT, ACCOMPANIED BY WILLIAM B. KELLY, ASSISTANT SPECIAL REPRESENTATIVE, TRADE POLICY STAFF COMMITTEE Ambassador STRAUSS. Thank you, Mr. Chairman. I am delighted to be here, and with your permission, I will make a brief opening statement and then be pleased to have your questions and those of others. I have testified over 50 times, I guess, in the House and appeared before 50 different groups with respect to our general overall legislative package that is being submitted up here, and today it is my understanding that we want to devote more of our time and special emphasis on the questions of the standards code. By way of getting into it, let me say to you that most people don't realize that while we have been out in Geneva that we really haven't been spending our time trying to raise or lower tariffs a half percent here, there and yonder, but that we have been engaged in a meaningful tariff leveling off process that will inure to the benefit of this country. We have also far more importantly, been involved in and engaged in trying to develop a series of codes that cover a wide variety of activities and practices that we think have been the key factors in preventing our American products, agricultural and industrial, from penetrating foreign markets as well as they should. There are a great many of those codes, and they cover Government procurement and customs evaluations and licensing and subsidies and what have you. But today I want to turn my attention, as I said, to the question of standards, and I am very pleased to have with me today, on my right, Mr. Bill Kelly of our staff. Mr. Kelly is a fellow who has been engaged in this process around the clock for a period of many years of trying to, among others, write the standards code. It is also particularly fitting because it shows the process to the Congress and in the American political process that system is working as it should work. In this room I am very pleased that we particularly have some people representing the American National Standards Institute and the National Electrical Manufacturers Association and the Underwriters Laboratory, and others who represent the private sector, who realize better than anyone the sensitivity of this item. and the necessity that something be done about it, and the 1974 Trade Act had many wise features in it, and one of the features was to set up a system for this process that permitted us to have the best possible private sector input into our work, and then it enabled us and caused us to report not just to the President and executive branch but also the Congress. So we have been very fortunate in that we have had private sector advisers such as those I have mentioned from these groups this morning. We have had our own people and we have had the executive branch generally, and both Republicans and Democrats alike in the Congress, all working together, the best of the process, as I have said, and that is the reason we have come up with a meaningful work product, in my judgment, and just as we all should take blame for the 25 years of neglect that put us in the shape we are all in, we can also all take a bit of pride and credit in the fact that we produced something meaningful, not a perfect document, not a perfect set of agreements, not the answer to all our problems, but a meaningful step forward that helps every single section of this country. And standards is as meaningful a part, as substantial a part of these negotiations as anything. I would put it in perspective and say to you that the standards laws in our country are put there for protection, they are to protect the American public, to be sure that appropriate standards are met. Standards in foreign countries, most of them, also are put there for protection, but in a great many of them it is not to protect their public, but those standards are put there to protect their market from being penetrated by our producers, and it is that particular vice that we have attempted to get at here. In my judgment, we have made some gains in the standards code that with all the economic studies say that you are going to gain 35,000 jobs or 100,000 jobs or be a half percent better on inflation. I certify to you that in my judgment this standards code is a meaningful step forward in our ability to penetrate foreign markets and no one is able to certify to you just how much it is going to mean because we do know that the kind of standards we have had around the world have worked in the most restrictive possible way. So it is that we come here now and say to you that we present with pride the entire package and with particular pride the standards code, because I think that and the Government procurement codes are probably going to be most meaningful things and our standards too are going to insure, if we implement it right, and if we stay on top of it, it will insure that standards and certification systems promote legitimate goals and not just create unnecessary obstacles to trade. That has been our goal, we think we achieved it, we think we have opened access to the national and regional certification systems through this code. We think this code will require countries to use open procedures in developing standards and their certification systems so that all countries, foreign and domestic, will have a chance to express their views in the same way that procedures and consumers and exporters and others have the opportunity in our country, and we have in this code also provisions for international enforcement through a system for consultation and other review procedures, and when they are all unable to resolve their problems we think this is a meaningful step forward in our effort to see that |