Commissioner VON RAAB. Well, I will tell you of an interesting offbeat idea that someone relayed to me. Your staff might want to look into it. Since Congress does have the right to issue letters of mark, you could issue them and outfit privateers who then could seize drug smugglers.

Senator LONG. Yes, but some of them might sell out rather than exercise the letter. [Laughter.]

How about just requiring the Navy to do it? We are here to make laws anyway. Why can't we amend that posse comitatus law? The Reconstruction days are all over. At least I think they are. I like to think they are over.

Commissioner VON RAAB. Maybe we won't let them go in certain

places.

I don't know. You know, it has been changed considerably. I guess it is just a matter of time and the degree to which the Congress is comfortable with allowing the Armed Forces to be involved. That is really the major issue. It is a big change, and I guess it comes slowly.

But I agree with you. They can play a very valuable role.
Senator LONG. Thank you.

Senator DANFORTH. Senator Bentsen.

Senator BENTSEN. Mr. Von Raab, educate me on the difference between the apprehension or the interdiction of heroin and cocaine. Is it the matter 5 to 10 percent on heroin and 35 percent on cocaine-is it sources and means of transport?

Commissioner VON RAAB. It is almost the way in which it is trafficked. The heroin business is very closely held by a number of small organizations who have been in business for a long time. They are very effective. They are the typical picture of organized crime as you and I think of them from television.

The distribution network is closely held and the amounts are much smaller. Therefore, it is much more difficult to identify. Whereas, in the cocaine area, there are newer organizations, the volume is greater and it is only coming primarily through the southeast. It starts in Columbia and then moves up through the Caribbean or across Mexico.

It is just easier, really, to interdict cocaine. It is a lot more difficult to interdict heroin because of the way the business is managed.

Senator DANFORTH. Thank you very much, Commissioner.
Mir. Ambassador, please proceed.

STATEMENT OF HON. ALAN WOODS, DEPUTY U.S. TRADE
REPRESENTATIVE

Ambassador WOODS. Thank you, Mr. Chairman, members of the International Trade Subcommittee. I am Alan Woods, Deputy U.S. Trade Representative. I am pleased to appear before you today to present the fiscal year 1987 budget authorization request for the office of the U.S. Trade Representative.

Our authorization request reflects our commitment to the deficit reduction measures intended by the Gramm-Rudman-Hollings legislation. During 1986, we are reducing our expenditures 4.3 percent below our authorized budget level. For fiscal year 1987, the Presi

dent's budget and our authorization request is for $12,216,000. It reflects further deficit reduction steps.

The savings this request reflects has been achieved through efforts we have made to increase the efficiency of our operations, and we intend to continue cost-saving measures during the next fiscal year. The work of the Office of the U.S. Trade Representative has become more complex over the years as U.S. involvement in international trade has expanded.

Since 1962 when the Congress first called for a special trade representative, total U.S. trade has risen from $37 billion to nearly $575 billion. The basic operations in which we will be involved during 1987 will be at least as demanding as the work we carried out in fiscal year 1986. As a result of economies we have realized this year, we believe we will be able to carry out our basic work in fiscal year 1987 within the budget authorization level we have requested.

In addition to our basic work, we expect to be involved in a special effort in 1987-the initiation of a new round of GATT negotiations. The President's fiscal 1987 budget indicated that the resource needs for a new GATT round would be reviewed as the schedule and content of the negotiation became more apparent.

While our information on the scope of the new round is not complete, we are beginning to estimate its financial implications and the degree to which it will strain our resources. We will be firming up our assessment of the new round's requirements during the summer. Ambassador Yeutter and our staff are firmly committed to reducing our national budget deficit. We, perhaps more than others, realize that this deficit must be reduced if we are to improve our international trade position. We will do our share.

Mr. Chairman, I will stop and take whatever questions you have. [The prepared written statement of Ambassador Woods follows:]

TESTIMONY OF

AMBASSADOR ALAN WOODS

DEPUTY UNITED STATES TRADE REPRESENTATIVE

BEFORE THE

SUBCOMMITTEE ON INTERNATIONAL TRADE

SENATE COMMITTEE ON FINANCE

MAY 12, 1986

Mr. Chairman, I am Alan Woods, Deputy United States Trade Representative. I am pleased to appear before you to present the fiscal year 1987 budget authorization request of the Office of the United States Trade Representative.

The Office of the U.S. Trade Representative is firmly committed to the implementation of the deficit reduction measures intended by the Gramm-Rudman-Hollings legislation. For the current year, FY86, we have imposed a 4.3% reduction from our authorized budget level of $13,158,000. Our budget for this year is thus $12,592,000. For FY87, the President's Budget and the authorization request we have submitted to you for $12,216,000 reflects further deficit reduction steps.

We are achieving these savings through measures we have taken to increase the efficiency of our operations. Last September, we took a first step toward a realignment of our internal organization to enhance both our efficiency and our effectiveness. This first step has allowed us to realize significant economies in FY86, without having to undertake a reduction in force or institute furloughs of personnel to date.

Cost reduction measures are also helping us to achieve our spending targets. As we approach the new fiscal year we will be taking a careful look at opportunities for further enhancing the efficiency of our basic operations.

The programmatic responsibilities of the Office of the U.S. Trade Representative are, by nature, complex. We are involved, on an almost daily basis, in trade policy development, consultations and negotiations that affect this country and the over 175 nations with which we trade.

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In the years since 1962, when Congress passed legislation calling for a Special Trade Representative, total U.S. trade has risen from a level of $37 billion to nearly $575 billion. This phenomenal fifteen fold expansion of our involvement in world trade has geometrically increased the number and the kinds of trade matters we must examine and address.

FY86 has been an extremely busy year for the Office of the U.S. Trade Representative and it has been a very productive year, thus far. FY87 will be at least as busy a year for us and we hope that it will be even more productive.

On September 23, 1985, President Reagan, in a comprehensive trade policy address, reaffirmed this nation's commitment to free and fair trade, and called for an adjustment of the value of the U.S. dollar in relation to the currencies of our major trading partners.

FY86.

This Presidential address set the direction for our work in We fully expect that the pace and quality of our work during FY87 will mirror our FY86 performance for the challenge of fully implementing the President's action-oriented trade program remains before us.

Improving the Macroeconomic Climate for Trade

While currency adjustments are not a direct responsibility of the Office of the U.S. Trade Representative, they are a critical element of the Administration's response to our trade deficit. Market-opening results achieved by the office of the U.S. Trade Representative cannot realistically be separated from the results of Administration efforts to bring the dollar into a better balance with the currencies of our major trading partners.