tween the United States and its trading partners.
(B) In pursuing the negotiating objective described in
subparagraph (A), the United States negotiators shall take
into account United States Government policies in licensing
or otherwise making available to foreign persons tech-
nology and other information developed by United States
laboratories.
(16) Border taxes. — The principal negotiating objective of the
United States regarding border taxes is to obtain a revision of
the GATT with respect to the treatment of border adjustments
for internal taxes to redress the disadvantage to countries
relying primarily for revenue on direct taxes rather than in-
direct taxes.
Research and
development.
Patents and
trademarks.
42
Chairman Gibbons. Thank you, Mr. Freeman.
Mr. Cohen.
STATEMENT OF CALMAN J. COHEN, VICE PRESIDENT,
EMERGENCY COMMITTEE FOR AMERICAN TRADE
Mr. Cohen. Thank you, Mr. Chairman.
I am pleased to be here to testify on behalf of the Emergency
Committee for American Trade in support of President Clinton's re-
quest for an extension of the fast-track procedure that will enable
him to complete the round.
ECAT companies are among the largest U.S. exporters, and they
account for the bulk of U.S. foreign direct investment. Without
their exports and other overseas business operations, ECAT compa-
nies would be much smaller firms with hundreds of thousands
fewer workers. The economic welfare of ECAT firms and their em-
ployees depends heavily on open international markets.
Going back to the 1988 Omnibus Act that authorized U.S. par-
ticipation in the round, ECAT has been supportive of the GATT ne-
gotiations, for we firmly believe that they would advance the U.S.
economic interest and the more narrow economic interest of ECAT
member companies themselves.
Despite years of frustration at the inability to bring the round to
a conclusion, we are still strongly supportive, Mr. Chairman, and
would hate to see the negotiating process aborted because of a lack
of negotiating authority tor the President.
We urge you to provide him with negotiating authority
unencumbered with restrictions; in other words, a clean grant of
negotiating authority. Unnecessary and extraneous conditions on
the negotiating authority could very well frustrate attainment of a
successful outcome by directing the President into areas incapable
of resolution in the time remaining in the round.
And as Mr. Freeman has just pointed out, the Congress has al-
ready specified the objectives for the round, and I think those are
most comprehensive directions that are adequate for the ongoing
talks.
American business stands to lose a lot if the round is not success-
fully concluded. At stake are important new rules and procedures
for international trade in services and for the protection of intellec-
tual property rights and foreign investments. Also at stake are
prospects for considerably improved market access for U.S. goods
and services which will further U.S. economic well-being and secu-
rity.
While the members of ECAT are not pleased with all of the par-
ticulars of the so-called Dunkel text, we believe that our concerns
can be accommodated before the round process is completed. We
testified to our specific concerns at the January 23, 1992, hearings
of the subcommittee, particularly noting our concerns with defi-
ciencies in the services and intellectual property areas.
What we in ECAT also see at issue in respect of the request for
an extension of fast track, in addition to the future of the Uruguay
round, is the future of the current international economic system.
It has been U.S. leadership that in large part has been responsible
for the system put in place after World War II.
43
Were the Uruguay round to fail because of the absence of the
United States at the negotiating table, there likely would follow a
period of relative international anarchy that could cause serious
harm to the U.S. economy. While the GATT would continue, its
rules and dispute settlement procedures would atrophy and govern-
ments would act more independently, thereby openmg the prospect
of retaliation and international trade conflict
There is, of course, a risk that the Uruguay round may fail even
with a continuing United States presence. We hope that this will
not be the case because there is just so much to be gained for the
U.S. economy.
The international trade agenda will not be complete, I hasten to
add, if the Uruguay round is successfully concluded.
In many ways, what the round and the so-called Tokyo round
that preceded it nave accomplished is the laying down of building
blocks for a more comprehensive trade edifice, a world that em-
braces not only international exchanges of goods and capital and
services, but also considerations of the environment and the work-
place, as well as the need to develop more harmonious and coordi-
nated national economic and social policies.
To do this will require future negotiating authorities for the
President so that he may take the lead in such areas as improving
the GATT system and negotiating economic agreements with the
countries of Latin America and the Pacific Rim, thereby helping
him to achieve his goal of improving the U.S. economy and the eco-
nomic welfare of its citizens.
One last but I think very crucial point: The grant of further ne-
gotiating authority for the President to conclude the round in no
way commits the Congress or others to prior approval of the result-
ant trade agreement. In short, any such agreement would stand, as
it should, or fall, as it should, on its merits.
I thank you for the opportunity of being here with you today.
[The prepared statement follows:]
44
STATEMENT OF CALMAN J. COHEN, VICE PRESIDENT, EMERGENCY
COMMITTEE FOR AMERICAN TRADE, BEFORE THE SUBCOMMITTEE ON
TRADE OF THE HOUSE WAYS AND MEANS COMMITTEE HEARING ON
THE PRESIDENTS REQUEST FOR EXTENSION OF "FAST TRACK"
PROCEDURES FOR URUGUAY ROUND IMPLEMENTATION.
APRIL 27, 1993
I am pleased to be here today to testify on behalf of the Emergency
Committee for American Trade in support of President Clinton's request for an
extension of the "fast track" procedure that will enable him to complete the
Uruguay Round negotiations.
As is well known to many members of the Ways and Means Trade
Subcommittee, the members of ECAT have a huge interest in a successful outcome
of the Uruguay Round. Our approximately 60 members have very extensive
international business operations. Their worldwide sales last year totaled over SI
trillion, and they employed nearly S million workers.
ECAT companies are among the largest U.S. exporters and they account for
the bulk of U.S. foreign direct investment. Without their U.S. exports and other
overseas business operations, ECAT companies would be much smaller firms with
hundreds of thousands fewer U.S. workers. The economic welfare of ECAT firms
and their employees depends heavily on open international markets.
Going back to the 1988 Omnibus Trade and Competitiveness Act that
authorized U.S. participation in the Uruguay Round, ECAT has been supportive of
the GATT negotiations for we firmly believe that they would advance the U.S.
economic interest and the more narrow economic interests of ECAT member
companies themselves. Despite years of frustration at the inability to bring the
Uruguay Round to a conclusion, we are still strongly supportive and would hate to
see the negotiating process aborted because of a lack of negotiating authority for the
President.
We urge you to grant the President a clean grant of negotiating authority
unencumbered with restrictions. Unnecessary and extraneous conditions on the
President's negotiating authority could very well frustrate attainment of a successful
outcome by directing the President into areas incapable of resolution in the time
remaining in the Uruguay Round.
American business stands to lose a lot if the Uruguay Round is not
successfully concluded. At stake are important new rules and procedures for
international trade in services and for the protection of intellectual property rights
and foreign investments. Also at stake are prospects for considerably improved
market access for U.S. goods and services which will further U.S. economic well-
being and security.
While the members or ECAT are not pleased with all of the particulars of the
Dunkel text, we believe that our concerns can be accommodated before the Uruguay
Round process is completed. We testified to these concerns at the January 23, 1992,
hearings of the Trade Subcommittee on the draft Dunkel text, particularly noting
our concerns with deficiencies in the services and intellectual property areas.
What we in ECAT also see at issue in respect of the President's request for an
extension of the "fast track", in addition to the future of the Uruguay Round, is the
future of the current international economic system. It has been U.S. leadership
45
that in large part has been responsible Cor the international economic system put in
place after World War II. The IMF, World Bank, and the GATT are the
institutional core of the system, which has provided the means for cooperative
action in facilitating world economic growth.
Were the Uruguay Round to fail because of the absence of the United States
at the negotiating table, there likely would follow a period of relative international
anarchy that could cause serious harm to the U.S. economy. While the GATT
would continue, its rules and dispute settlement procedures would atrophy and
governments would act more independently of the rights and concerns of their
trading partners, thereby opening the prospect of retaliation and international trade
wars.
There is, of course, a risk that the Uruguay Round may fail even with a
continuing United States presence . We hope that this will not be the case because
the,re is so much to be gained for the U.S. economy, particularly in the areas that I
have just noted above.
The U.S. international trade agenda will not be complete even if the Uruguay
Round is successfully concluded. While a legal structure of rights and obligations
will have been agreed to in the so-called "new" GATT areas of services, investment,
and intellectual property rights, the structure will have to be built on not only
through practical experience with the new rules but also through the development of
additional rules through negotiations.
In many ways, what the Uruguay Round and the so-called Tokyo Round that
preceded it have accomplished is the laying down of building blocks for a more
comprehensive trade edifice designed to deal with the intricacies of the modern
trading world — a world that embraces not only international exchanges of goods,
capital, and services, but also considerations of the environment and the workplace
as well as the need to develop more harmonious and coordinated national economic
and social policies.
U.S. leadership will be crucial to the future of the emerging global economic
system. Absent that leadership, it is difficult to see where such leadership would
come from. As a leader, the United States will be enabled to continue its historic
role of shaping the international economic agenda in the furtherance of U.S.
national economic objectives.
To do this will require future negotiating authorities for the President so
that he may take the lead in such areas as improving the GATT system and
negotiating economic agreements with the countries of Latin America and the
Pacific Rim, thereby helping him to achieve his goal of improving the U.S. economy
and the economic welfare of its citizens.
The grant of further negotiating authority for the President to conclude the
Uruguay Round in no way commits the Congress or others to prior approval of the
resultant trade agreement. Any such agreement would stand or fall on its merits.
I thank you for the opportunity of being here with you today.
46
Chairman Gibbons. Thank you very much, Mr. Cohen.
And now Mr. Regan.
STATEMENT OF TIMOTHY REGAN, VICE PRESIDENT AND DI-
RECTOR, PUBLIC POLICY, CORNING, INC., CORNING, N.Y., ON
BEHALF OF THE U.S. CHAMBER OF COMMERCE
Mr. Regan. Thank you, Mr. Chairman.
On behalf of the chamber of commerce, I want to thank you for
the opportunity to present the chamber's views on the President's
request to extend fast-track authority for the Uruguay round. The
chamber represents the largest group of American business and, as
such, has been really forced to look very closely at the Uruguay
round negotiations and the results so far from the perspective of,
importers, exporters, manufacturers, service providers, and small
business.
Mr. Chairman, we believe that completing the Uruguay round
agreement would help give the much-needed boost in the world
economy. I don't know if you saw today, but the IMF estimated
today tnat the world economy is actually going to grow much slow-
er than originally anticipated this year. We need a boost. We need
an opportunity to grow.
Therefore, we support the fast-track procedures that would per-
mit the rapid and successful — and I emphasize successful — conclu-
sion of these important multilateral negotiations.
However, this support for fast track does not mean or imply that
the draft final act, or the so-called Dunkel text, is an acceptable
basis for a successful agreement. It is not. A speedy conclusion
should not be achieved at the expense of substance.
Let me be clear. The chamber cannot accept the Dunkel draft
text. The President must negotiate a good agreement. This will re-
quire substantial and material improvements over the text to de-
clare the Uruguay round a success. Anything less is inconsistent
with the negotiating objectives set by Congress in the 1988 Act,
which has been previously mentioned here today, and would be un-
acceptable.
We prefer no agreement, or a smaller agreement, than the
Dunkel text.
Mr. Chairman, we have reviewed for you in the past our specific
concerns about this agreement. Extending negotiating authority
now is different than it was back in 1988. It is different because
now we have the outline of an agreement. We have a 500-page doc-
ument which lays out in grand detail very specific commitments
the United States would have to make in order to get a successful
negotiation.
There is much in this agreement that is unsatisfactory. In fact,
if you take a close look at the draft text, you will find that it does
not — I underline "not" — meet the negotiating objectives set by this
committee back in 1988.
The specific areas where there are deficiencies lie in the area of
the antidumping provisions, dealing with unfair trade practices; lie
in the area of subsidies, allowing foreign governments to engage in
subsidy practices that they couldn't currently engage in under U.S.
law; lie in inadequate protection of intellectual property; lie in in-
adequate market access for services; and lie in the dispute settle-
47
ment procedure that may, indeed, make it more difficult for us to
administer our own trade laws.
These are some of the areas where some changes, rather signifi-
cant changes, have to be made in this agreement in order to make
it successful from the view of the chamber of commerce.
In addition, we would like to note that the Dunkel draft also fails
to deal with Government procurement. We believe disciplines in
this area are also necessary. The importance of strengthened dis-
ciplines here was most recently highlighted by the United States-
European Community conflict over the Community's procurement
directive.
Finally, the chamber believes that renewal of Super 301 and en-
actment of the Trade Agreements Compliance Act, both of which
are rooted in Section 301, would contribute greatly to the advance-
ment of the legitimate interests of U.S. companies and their work-
ers in the global marketplace. These provisions are meritorious in
their own right and should be enacted whether or not fast-track ne-
gotiating authority is extended.
As you can see, Mr. Chairman, we have some very serious prob-
lems with the terms of the likely agreement based on the Dunkel
text. If the subcommittee shares these concerns, which we expect
you do, we respectfully suggest that you make your concerns
known now. Better for Congress to be demanding now than to re-
ject the agreement our negotiators bring back later. Such a rejec-
tion would truly be disastrous for the trading system.
Thank you very much.
[The prepared statement follows:]
48
STATEMENT
OB
THE PRESIDENTS REQUEST FOR EXTENSION OF
FAST TRACK PROCEDURES FOR URUGUAY ROUND IMPLEMENTATION
before the
SUBCOMMITTEE ON TRADE
of the
COMMITTEE ON WAYS AND MEANS
of the
UNITED STATES HOUSE OF REPRESENTATIVES
for the
VS. CHAMBER OF COMMERCE
by
Timothy J. Regu
April 27, W3
Mr. Chairman, on behalf of the U.S. Chamber of Commerce, I would bice to thank you for
the opportunity to testify today on President Clinton's request for approval of legislation renewing
fast track procedures to conclude the Uruguay Round of multilateral trade negotiations. I'm
Timothy Regan, Vice President and Director of Public Policy for Corning, Incorporated I'm a
member of the Chamber's International Policy Committee, and Chairman of that Committee's
Foreign Commercial Relations Subcommittee.
The U.S. Chamber has consistently supported U.S. efforts during the Uruguay Round to
improve the General Agreement on Tariffs and Trade by strengthening dispute settlement,
expanding GATTs scope, and improving existing G ATT disciplines against unfair trade practices.
We believe completing a good Uruguay Round Agreement would give a needed boost to the world
economy and provide increased market opportunities for U.S. business. Therefore, we support
approval of fast track procedures that would permit a rapid and successful conclusion to these
important multilateral talks.
But this does not mean or imply that we accept the Dunkel text of December 1991 as
representative of a good agreement Let me state clearly that the Dunkel text is totally inadequate
as it stands. Substantial and material improvements over the Dunkel text will be essential to
declare the Uruguay Round a success. Anything less is inconsistent with the negotiating objective
set by Congress in the 1988 Trade Act and thus is unacceptable.
President Clinton has expressed his strong desire to conclude the negotiations this year.
While the U.S. Chamber agrees there is an urgent need to reach closure, we would like to repeat
our concern that a speedy conclusion not be achieved at the expense of substance. During
testimony I presented to this Subcommittee on January 23, 1992, I presented U.S. Chamber views
on the major shortcomings in the Draft Final Act or so-called "Dunkel Draft" This assessment is
based upon canvasing our members' views. I believe it is timely to reiterate those views as we look
to a possible conclusion of the talks.
PRINCIPAL DEFICIENCIES IN THE DUNKEL DRAFT
The following analysis covers the principal problems our members have identified:
Anti-Dumping. The Dunkel Draft departs in several important respects from the recommendations
for reforming the Anti-Dumping Code adopted by the U.S. Chamber Board in February and June
of 1990. On balance, the draft significantly benefits the interest of respondents in anti-dumping
investigations and significantly prejudices domestic petitioners. To correct this deficiency, we
recommend the following Anti-Dumping provisions of the Dunkel Draft be deleted:
• Standing f Article 5.4V The proposed provision would make it administratively more difficult
for U.S. companies to file petitions for relief under the dumping law. The Chamber believes
no changes to either the GATT Code or U.S. law are necessary and that needed
improvements to achieve greater openness and transparency in standing questions can be
achieved administratively.
• Weight Averaging/Domestic and Export Goods {Article 2.4.21: The Dunkel text would, in
most cases, prevent the Commerce Department from using its current dumping-margin
methodology that guards against spot dumping. No change in the Code is acceptable that
would prohibit the Commerce Department's weight-averaging practices.
• Constructed Value /Profits ( ArtH * f 2, 7V The Dunkel text would require Commerce to use
"actual" profit data of foreign exporters that have been demonstrated to have no relevant
foreign sales on which to base profits, or whose foreign sales have been rejected by
Commerce as being at prices below the cost of production. The Chamber believes that the
8% base currently in U.S. law is transparent and reasonable and should not be changed.
• De Minimis Dumping Margin (Article 5.81: The provision would prohibit Commerce from
imposing dumping duties in any case where the amount of dumping calculated is below a
49
/U minimi* level of 2%. Many Chamber member*, particularly tboie producing price-
sensitive goods, would be severely damaged by thii change. The Chamber opposes indnsion
of a dc minima level in the Code.
• IW MI.I-U Import Vnh.ny. /r..m,.1.H«. fArtirU < «)• Th> n..nW.| t^« «n..M p^Afhh
Commerce and the ITC from investigating allegation s of foreign dumping when import*
from the country in questSonare 'negligible,* at defined by the Code, even if those imports
might have a discernible adverse impact on the domestic industry. The Chamber opposes
any provisions in the Code that would limit the Government's discretion to consider import*
from any source in anti-dumping investigations.
• Snn««>t O racle llJi: Many Chamber members vehemently oppose a sunset provision in
the Code which would automatically terminate anti-dumping orders after five years. This
provision would unfairry place the burden on victims of dumping to prove that they are still
being injured by unfairry priced imports. The Chamber opposes it
Intellectual Pio p aty (TRIPi). The major deficiencies in these provisions of the Dunkel Draft are:
• Transitional arrangement*- Part VI provides unacceptabry long time periods before the
commitments become effective in developing countries. The additional period of four years
granted to them is unwarranted, since most developing countries already have a «"**£■*-''
institutional infrastructure to implement the changes for most "»— «f fan* n^vf I p Tf fly
protection and enforcement Furthermore, the additional five-year transition period granted
to developing countries for technologies not previously protected (moat notably
pharmaceuticals aod agricultural chemical*) it unwarranted. Owners of intellectual property
affected by the additional five-year extension would see no. benefits until eleven years after
the Final Act comes into force.
• Pip^lww The Dunkel Draft fails to provide any pipeline protection for those products
subject to lengthy pre-market approval requirements. Efforts to mitigate tins shortcoming
under Articles 708 and 70.9 are not adequate.
• ExbajisJion_af_rjghli: Article 6 could be used to justify countries asserting that in certain
circumstances the rights of intellectual property holders no longer are in effect The phrase
"interests of third parties shall be taken into account" (Ankles 30 and 46) gives wide
latitude for political and social justifications to mitigate or defeat patent enforceability.
• Co pyright - Works M ««*» fnr Hiw The absence of adequate protection for holders of
copyright in relation to authors/artists is a critical deficifty.
• Copyright - Movie* and .Smimhrenrrfinp- The absence of a royalties/remuneration
provision with respect to "phonograms" and "cinematographic works" is a critical deficiency.
• Rintf^hnnloyv The language of Article 27.2 is unclear as to whether or not human, animal,
plant life, or health care inventions are deluded from patentability.
• Section 337: There is continuing strong concern about the future status of Section 337 of
the Tariff and Trade Act of 1930 in light of the border- enfo rc em ent provisions of the
Dunkel text
• Bilateral Action: The Administration should make a dear commitment to utilize bilateral
action under U.S. trade law in cases where countries adopt substandard protection and
enforcement practices which are outside the scope of the Dunkel text or are inadequately
covered due to the ambiguities of the Dunkel text
Services. The linkage between the services provisions of the Dunkel Draft and the market-access
talks is of crucial importance. Unless significant progress on market access is achieved, benefits
accruing to U.S. service providers from the framework agreement would be minimal. There has