Senator RIBICOFF. The committee will be in order.

Six years ago the Tokyo round of multilateral trade negotiations began. Today the Subcommittee on International Trade is considering legislation to implement the results of those negotiations for the United States.

The MTN has produced tangible results. It did not end in a whimper. This alone is a remarkable achievement.

The negotiations began during a worldwide boom. Since then we have had the OPEC price increases, a global recession and changes in administration in every major trading country.

The productive conclusion of the MTN is due largely to the leadership of the United States. Several Presidents and many Government officials have contributed to this effort. However, there is no doubt that without Robert S. Strauss there could have been no conclusion to the MTN and no Trade Agreements Act of 1979. The legislation before us today marks the end of the negotiations. It may mark the beginning of a new era both in international and in U.S. trade policy.

Internationally, the MTN agreements on subsidies, government procurement, product standards, antidumping, customs valuation and import licensing may permit governments to resolve conflicts before they become confrontations. This should promote increased trade and higher standards of living throughout the world.

I say may and should because the MTN agreements are merely rules. Rules mean nothing unless they are enforced.

Domestically, the MTN should provide some immediate benefits. In the long run, the MTN agreements could benefit the United States significantly by opening up new markets and discouraging unfair competition. Again, I say "should" and "could." This is because the benefits of the MTN to the United States depend entirely upon our ability to take advantage of those agreements. If history is any indication, international enforcement of the new trade rules will depend on the United States. Our ability to enforce the MTN agreements and to promote the short- and long-term economic interests of the United States require some fundamental changes.

First, Congress and the President must continue to work closely together on international economic issues. The era of the trade agreements program, as we have known it, is over. U.S. negotiators will never again make trade agreements for the United States without close congressional review.

The MTN was a successful constitutional experiment in coordination between the two branches of Government. We must apply the lessons we have learned during MTN to future negotiations.

Second, the executive branch trade policy agencies must be reorganized. We can no longer afford the luxury of dispersing political responsibility for international economic policymaking among many agencies. We can no longer afford limp enforcement of our unfair trade laws and uncoordinated attempts at export promotion. We must establish a strong trade policy agency. Without such an agency, the benefits of the MTN for the United States will be minimal.

Parenthetically, it was my impression that the administration was to send to us its recommendations for the reorganization of our

trade agencies by the 10th of July. Today is July 10. If anybody has seen a copy of it, I have not.

Maybe the administration could enlighten us before the day is over. It is very unfortunate, because in looking ahead, in cooperation with the MTN, it was the overwhelming sentiment of the Finance Committee that we would do something to reorganize our trade bureaucracies, organization, whatever you may have. And I do believe that that is the overwhelming sentiment of the Governmental Affairs Committee who has the responsibility.

Senator Roth and myself serve on both committees.

Finally, we must all realize that the world marketplace is rough. We must fight to keep the markets we have and gain new markets. We must win these fights because our economic welfare absolutely depends on international trade, both imports and exports. Furthermore, economics dictate international relations today, not geopolitics. If anyone doubts this, all they have to do is try and buy some gasoline.

If we do these three things, then the Trade Agreements Act of 1979 will mark the beginning of a new era for U.S. international trade. We have many witnesses today and I hope they will provide some guidance to the committee on these questions.

Before we call our first witness, Senator Roth, do you have any comments?

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Senator ROTH. At the outset, I would like to take a moment to recognize the incomparable contribution that Senator Ribicoff, chairman of the International Trade Subcommittee, has made to the MTN process. The pluses we have gleaned from the negotiations in no small way are directly attributable to Abe Ribicoff's knowledgeable and experienced guidance.

In the same vein, I congratulate my other colleagues of the Senate Finance Committee for monitoring the negotiations as they progressed and taking an effective role in shaping and molding the implementing legislation to best suit our domestic needs, while at the same time abiding by the provisions of the various agreements.

A word of praise must also be said for the Special Trade Representative, Bob Strauss, and his staff. Many voices have congratulated them for what they have accomplished in the current world trade environment. Let me simply add my voice to others.

Mr. Chairman, I also want to thank the many people in this audience who will be testifying and the hundreds of other people in the private sector who contributed their time and energies to shaping this MTN package. Their contribution has been invaluable, at least to my understanding of the issue.

I am sure it had a significant effect on the package.

Mr. Chairman, within the next few days, if all goes according to schedule, and the House approves the bill, we in the Senate will take a vote, which will chart the course of world trade for decades to come.

If approved, the bill will significantly alter domestic loss. In fact, the entire international trade infrastructure will feel a shift.

The testimony that we heard today will help us make the final decision. Perhaps one issue, however, stands out above all othersthe United States be prepared structurally to take advantage of these new trade agreements.

I have studied, and discussed the idea of trade reorganization for years now. I am convinced, as are many others more knowledgeable than I am on the subject, that the MTN will fulfill the predictions of having a minimal positive impact unless we undertake a substantial reorganization of our trade promotion and enforcement of unfair trade statutes.

The MTN practice may serve as a roadmap for future international trade, but without meaningful reorganization I am afraid that the United States will never be able to fully explore its possibilities. Our vehicle will simply be too old and inefficient to carry us on the journey.

Today, as you mentioned, is July 10. Today the administration was supposed to submit a reorganization proposal. I will understand if the President has had some other issues on his mind, and his proposal is not yet ready at this time. I believe that the granting of another week's grace is not outrageous, but I believe that this committee should not report the MTN implementing bill until the reorganization proposal is submitted.

In making this decision, I hope that the President will keep in mind the principal congressional objective: To provide a real lead agency for trade policy capable of changing the orientation of this country toward trade.

Neither the proposal I heard about, the so-called OMB Strauss option and the so-called State-Treasury option meet this objective. Thank you, Mr. Chairman.

Senator RIBICOFF. Senator Roth, I do want to thank you for your complimentary remarks as ranking Republican member for the International Trade Subcommittee. Your help and cooperation has been invaluable.

We have worked better, in complete harmony, and time and time again we have worked out knotty problems.

You are an exceptionally valuable member of the Governmental Affairs Committee in whose hearing room we are conducting these hearings. I agree with you completely. You have taken the lead in the reorganization of the trade functions and I will support your position that until the administration sends up its own concept of a trade reorganization we are not going to vote this out of the Finance Committee.

So the time has come. I know the President has a lot of problems but I think that there should be before us, before we vote on MTN, their concept of what a trade reorganization really is.

That does not mean that we will take it. I think that we have definite ideas of our own, where we should go in trade. I think that the overall business community of this country supports our concept, and this is no time to cave in to the bureaucratic in-fighting throughout this administration.

And you can rest assured, Senator Roth, that we will work closely together to make sure that if we are going to have an MTN bill it really works and it cannot work unless you have got a real trade organization in place, because organization is policy.

You can have the best concepts, but if you do not have the organization to put those concepts into being, they just are not going to work.

We feel if MTN is going to work and the benefits will be derived for the American economy, we are going to have to have an organization that knows how to put it together.

I would also like to pay special tribute to the chief of our staff of the committee, Bob Cassidy, and all of the members of the committee staff who have done such outstanding work.

Ambassador Strauss, you were not here for the compliments and they are no reflection on my comments on you, because I have discussed the concept many, many times over the past number of years of where we should go in reorganizing our whole in-place trade organization throughout the bureaucracy.

I do believe that you feel-not in detail, but, as Senator Roth, as I do, that there should be a different trade reorganization in place in this country.

Mr. Strauss, you may proceed as you will, sir.

STATEMENT OF HON. ROBERT S. STRAUSS, SPECIAL
REPRESENTATIVE FOR TRADE NEGOTIATIONS

Mr. STRAUSS. Thank you.

Senator Ribicoff, Senator Roth, members of the staff, let me begin, if I may, on a very personal note by expressing to the two of you, and through you to the other members of the Finance Committee and to the staff, not just my official or institutional appreciation, but my personal appreciation for the way that you have worked with me and with my colleagues for the past 22 years. I have said around this town, around this country, and around the world, that we constantly see deficiencies in the performance of the democratic process as we know it, but that, in my judgment, we have developed an almost classic example of how the system can, and should, work in this trade legislation.

First, we had the 1974 Trade Act which, while not perfect, set out some splendid guidelines for us to follow. It provided a course that enabled us to get not only the right kind of working relationship between the legislative and the executive but also through its far-sightedness, it provided the kind of private sector input that we needed. Through our ability to work together with the tools that we have, and through the cooperation of the staffs particularly, I really think this has been a classic example of the very best of the bipartisan political process. And I take great personal pride in my part in that.

Before I get into my basic remarks let me also say, to those of you that have been so helpful, that I am as committed to reorganization as either of you. I am committed generally to the same type of reorganization that I think the two of you would be entirely satisfied with.

From what I have seen, and what I know of the options before the President, you will have before you in less than 2 weeks' time-a good deal less, I hope-a trade reorganization position of this administration that, while it will not entirely satisfy either of you, as I suspect your own bill does not satisfy totally the two of you, will be a very substantial piece of legislation.

I know the options and I say to you, while it may not be an A product, it will be at least a B product for you to look at. And I urge you not to hold this trade legislation until you get it.

I told you that by July 10 you would have our reorganization proposal, so you have every right to hold me personally responsible for not delivering it. I think that this committee is sensitive to the problems the President faces that have caused him to delay in addressing these questions. I would be derelict in my duties, unfair to myself, and would lack courage if I did not say, let us get on with the dispatch of this bill and get it behind us. Delay is not going to help anything. You have the commitment of the President. You have my commitment, professionally and personally, that documents representing legislation that substantially goes in the direction you want will be presented to you at the earliest possible time.

I just came in from Camp David and I can turn around and go back up there, but I think it would be wrong to take the President's focus and attention off, our immediate energy problems, for a 24 hour period, while he examines this work product.

I went to him 6 weeks ago, following the hearings in which we got into this question of a date certain and got the President's total cooperation on that. I am more disappointed than either of you, I can assure you, and you have my commitment that I will personally follow through and deliver our proposal.

But just to hold this bill here, in my judgment, would be a negative way of proceeding to accomplish positive results.

Senator RIBICOFF. Bob, there is no man that I respect more than you. I do not think there has been a man in this Senate who has been more supportive of the President than I have on issue after issue. I have gone down the line.

If you want to know what one of the problems of this administration is, the President and yourself, it is the inability to grab hold of this Government and to shake that bureaucracy throughout the length and breadth of this town and this country.

The problem with this trade reorganization has been the inability to tell off the various bureaucracies who keep fighting for their own piece of turf, and that continuous fighting in the bureaucracy for their own piece of turf prevents this Government from moving on issue after issue.

I have seen this with every President, not only with this President, as a Congressman, as a Governor, as a member of the Cabinet of the United States, Senator, and until the President of the United States takes the position that he is the boss, not the bureaucracies throughout Washington, this country is not going to move, whether it is energy, whether it is inflation, or any major issue that we have facing us. I think we have a symbolic problem here that is more important whether MTN gets voted on by the middle of July or by September.

We are ready to move and I back Senator Roth and, as far as I am concerned, I personally will ask the Finance Committee not to move in reporting this out until we have a piece of paper indicating where the administration wants to go on reorganizing trade. We made this very clear, not only during the last 6 months, but the last few months. This administration knew the feeling of the Finance Committee and we had a commitment and we had a right to have the President deliver on that commitment.