be vacancies eventually, and I assume that the Congress will have the opportunity when vacancies occur to make sure that to the extent possible we do stay independent. It has just been a watchword for me. It has been easy for me, in a sense, being a Democrat to make sure that it is independent. No one has been leaning on me as Chairwoman of the agency from the executive branch, because I think they appreciate the value of the independence of the Commission-when it comes to the integrity of our decisions as seen by the outside world, both domestic industries and foreign producers, and I would hope that in the future people who sit as Chairwoman or Chairman will be able to stand up for that independence as well. Senator LONG. Commissioner, do you feel the same way about that? Commissioner ECKES. Yes; I feel very strongly about the same principle, Senator Long. As you know, I was Chairman of the agency before Chairwoman Stern, and during that period of time certainly no one called me from any of the executive agencies to try to influence my own vote. And I believe the same is true today. Senator LONG. Some years ago, I was urging that a Commissioner be reappointed because I felt that the Commissioner was doing a good job. And one person down at the White House was trying to help with the matter, and he said, "Well, you know, the problem is that that Commissioner doesn't vote with us, he doesn't vote with us nearly enough; and he had to vote with us more." Apparently the person that told me that didn't understand. I thought the prime qualification was that the Commissioner not vote for somebody, but that he vote his own conscience. I would hope that that is how every Commissioner would perform down there. I think everyone now expects that of Commissioners. If anybody has reason to think Commissioners are not voting that way, I wish they would inform some of us up here because we are supposed to have oversight on that. If that Commission is to do its job, it ought to honestly look at these cases and give us an intellectually honest judgment on it. Otherwise, I think the citizens of this country are not getting what they are paying for because they are supposed to get an impartial, honest finding of fact out of the Commission. It is not supposed to be a political decision. It is not supposed to be something that helps one party or another. It is not supposed to be something that helps the White House, the State Department, or someone else. If we ever allow the State Department to call the turns, then you are going to have the State Department trying to dictate those decisions for political reasons; to get somebody to vote with us in the United Nations or whatever. There are a thousand different reasons that those decisions could go contrary to the law once you let the State Department decide it for you rather than deciding it based on what you find before you. Chairwoman STERN. Senator Long, I think that you should be very assured that this is not happening, and that the safeguards that you have put in have been very helpful in keeping such a situation from occurring. I think the question about the proxies is another issue. I mean I think it is a separable issue, and that goes to the question of how the statute is being administered. Senator LONG. Yes. Chairwoman STERN. I believe that there is no question that there is a sense of insulation from pressures from outside. Senator LONG. Well, I am against life tenure just because I think everybody ought to have to answer for their conduct once in a while, including me. So I think it is good now and then to see how these things are going. I have no complaint about the Commission. I just think that it is good for us to communicate. I think you are doing a good job, Madam Chairman, all members of the Commission, as far as I am concerned. I have no complaints. Thank you. Senator DANFORTH. Senator Bentsen. Senator BENTSEN. Chairwoman Stern and members of the Commission, I want to thank you for the extensive hearings you held along the United States-Mexican border. Chairwoman STERN. They were very helpful for us. Senator BENTSEN. Had an incredible response to them, and it was requested by this committee. And there was no way they could take care of the number of witnesses that wanted to testify. And they could have held a hearing in every town along that border, I think. And, hopefully, from that will come a study that will be helpful. But one of the things that concerns me—and the statement made by the chairman-is whether or not it is a question-whether or not this administration makes trade its No. 1 issue. Well, certainly, I am one who doesn't think it does, and doesn't devote enough time to it. And I can't help but think with the chairman of this subcommittee, as we have, and Senator Danforth, and Russell Long and Lloyd Bentsen and other members of this committee, we are going to be pushing harder and harder on these trade issues. And you are going to have more and more responsibility in your Commission. And I didn't get to ask this of Ambassador Woods. I was interrupted for a moment here. But I understand on the new round of trade negotiations with Canada that they have 80 members on staff and we have two. That is what I am told thus far. And I know then that they are going to be calling on you. I assume they are. Have they called on you yet, the ITC? Chairwoman STERN. Well, under the statute, we are already in the middle of the largest study we have ever done. Senator BENTSEN. On Canada? Chairwoman STERN. On what the impact would be. Senator BENTSEN. And Mexico? Chairwoman STERN. No; this was in the original statute on the authorization to the President of the authority to negotiate that it would trigger a study on the United States-Canada situation. The Mexico study is not part of that measure. Senator BENTSEN. Well, you have got a problem with Mexico, and they want to belong to GATT. And we have a chance to survey that, and work out some of our differences in the meantime. It seems to me that there is another area of major responsibility for you that should be of great concern to us. How can you do that with the same size staff? Chairwoman STERN. I personally don't think we can. But I am here to deliver to you what the majority of the Commission's view was and also answer your questions, if you have them, about my personal viewpoint. The decision of the majority of the Commission was that we would come up to you with an operating budget, which would be approximately $29 million. And I felt that we could squeeze out of that the service of 10 additional men or women power years, but the majority of the Commission used the same amount of money and decided to allocate that same amount of money amongst the existing manpower, 482, from the existing 1986 level. Senator BENTSEN. Well, there is no question in my mind but what this-the level of interest is going to be very high profile and intense during this year and next year. And with starting a new round of trade and negotiations with Canada and what we will have with Mexico, the level of work is going to be substantially increased in your office and for the Trade Commissioner. Senator DANFORTH. Thank you very much. Senator DANFORTH. The next panel is: Kenneth Kumm, 3M CO.; STATEMENT OF KENNETH A. KUMM, CHAIRMAN, JOINT INDUSTRY GROUP; AND MANAGER, CUSTOMS AND TRADE AFFAIRS, THE 3M CO., ST. PAUL, MN Mr. KUMM. Thank you, Mr. Chairman. The Joint Industry Group is a coalition of 75 trade associations, businesses and law and professional firms intimately involved with the U.S. imports and exports. We are concerned with the actions by the U.S. Customs Service in administering the customs law and a myriad of trade statutes and regulations which impact upon our manufacturing and marketing operation. The Joint Industry Group urges the committee to reexamine Customs resources in terms of the functions that Customs performs, who benefits, and, thus, who should pay. Drug interdiction and border control should not be funded by a fee for following Customs procedures and requirements for legal importation of merchandise. Customs also should be compensated by the 40-some agencies on whose behalf Customs enforces some 400 statutes. We feel it is much more appropriate that $15 billion in duties collected on merchandise by Customs pay for the cost of collecting them. We are concerned over the increasing tendency of the Customs headquarters to make policy decisions affecting commercial transactions without prior consultation with the public. The cumulative effect of a number of these changes is tending toward the type of nontariff barrier that U.S. exporters are faced with and which needlessly hinder the free movement of goods. The January 1986 Customs directive regarding formal live entries on all textile products, Customs' T.D. 86-56, regarding discrepancies in values stated on invoices and entry documents and the drastic changes in country rules of origin are all recent cases where prior consultation could have resulted in less disruption and uncertainty in business transactions and just as effective enforcement of questionable import practices. We also have encountered problems arising out of the issuance of headquarter rulings on import transactions, both in the terms of delay and the issuing of these rulings and in the term of the manner in which they are available to industry. The Joint Industry Group recommends that Customs be required to make greater effort to publish its rulings in a timely fashion for effective dissemination of policy positions prior to changes in policy, affording adequate time and opportunity for comment. In this respect, the Office of Regulation and Ruling should be strengthened. The Joint Industry Group is appreciative of the need and firmly supports strict and effective enforcement of U.S. Customs laws and regulations which evidently is the laudible intent of the Customs Service. However, it is just as evident to the Joint Industry Group that there must be concern in carrying out that intent for the legitimate interest and needs of the business community. I would request, Mr. Chairman, that the Joint Industry Group's paper on country rules of origin prepared at the request of Deputy Treasury Secretary Darman be made part of the hearing record and be filed with the committee for its information and further consideration on the issue of rules of origin requirements. Senator DANFORTH. Without objection. Mr. KUMM. Thank you. Senator DANFORTH. Thank you, Mr. Kumm. [The prepared written statement and additional information from Mr. Kumm follow:] STATEMENT OF KENNETH A. KUMM FOR THE JOINT INDUSTRY GROUP May 12, 1986 Mr. Chairman, Members of the Committee, my name is Kenneth A. Kumm, Chairman of the Joint Industry Group. The Joint Industry Group is a coalition of seventy five trade associations, businesses, and law firms and other professional firms actively involved in international trade with a operational interest in the the Customs Service. A description of the Joint Industry Group is attached, as is a list of our members. We welcome this opportunity to comment on customs and trade issues which are relevant to the Finance Committee's consideration of the authorization of funds for the U.S. Customs Service, as well as to the Committee's oversight responsibility for customs matters. While the Joint Industry Group is not taking a position with respect to the funding of specific Customs operations in FY 1987, we have been and we are concerned with the adequacy of funding and resources for the day to day customs functions of clearing merchandise. As representatives of business firms and members of trade associations intimately involved with the $380 billion in U.S. imports and with over $200 billion in U.S. exports, we are concerned with actions by the U.S. Customs Service in administering the customs law and the myriad of trade statutes and regulations. Such actions impact upon our manufacturing and marketing operations in the United States and abroad. Therefore, we would like to address two broad issues pertinent to the purposes of this hearing. The first issue relates to how the constitutent uses of Customs services are viewed in the authorization and budgetary process and in the context of today's budgetary pressures. The second set of issues covers the area of Customs rulemaking, or as stated in the Committee's Press Release, the "procedural propriety of Customs rulemaking". Customs Costs and Beneficiaries The Joint Industry Group strongly supports sufficient resources for Customs' performance of its essential functions. However, we have consistently opposed the imposition of so-called "users' fees" for Customs activities. We feel that Customs work is not "services" for which there are identifiable "users," but rather formalities to which travellers and commerce are subjected. When the beneficiary is the general public, then general tax revenues should fund the activity. For this reason and a number of other reasons outlined in our testimony before this Subcommittee last year, we continue to feel users' fees are ill-advised. Gatt Article VIII prohibits the imposition of such fees for fiscal purposes. So long as the fees do not relate |