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Letters, statements, etc.-Continued

McIntyre, James T., Jr., Director, Office of Management and Budget:
Prepared statement..

Request for number of personnel and amount of money to oper-
ate STR...

Submissions to Congressman Horton's questions___
Regelbrugge, Roger R., president, Korf Industries, Inc.: Prepared
statement

18-38

43

46-69

227-236

Shelp, Ronald K., chairman, International Service Industry Committee, U.S. Chamber of Commerce:

Letter to President Carter supporting the reorganizational plan. 211-212
List of committee members..

203-209

Prepared statement__

215-220

Vanik, Hon. Charles A., a Representative in Congress from the State of Ohio: Prepared statement..

181-190

APPENDIX

Additional statements submitted for the record___

237

1

REORGANIZATION PLAN NO. 3 OF 1979

(Consolidate Trade Functions of the U.S. Government)

TUESDAY, OCTOBER 16, 1979

HOUSE OF REPRESENTATIVES,

LEGISLATION AND NATIONAL SECURITY SUBCOMMITTEE

OF THE COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D.C. The subcommittee met, pursuant to notice, at 9:38 a.m., in room 2154, Rayburn House Office Building, Hon. Jack Brooks (chairman of the subcommittee) presiding.

Present: Representatives Jack Brooks, Dante B. Fascell, Elliott H. Levitas, Frank Horton, and Arlan Stangeland.

Also present: Representative Paul N. McCloskey, Jr.

Staff present: Eugene F. Peters, staff director; Cynthia Meadow, professional staff member; Wilson Abney, professional staff member; Don Stephens, professional staff member; Elmer W. Henderson, senior counsel; Linda Shelton, clerical supervisor; E. Jean Grace, clerk; John M. Duncan, minority staff director; and James L. George, minority professional staff, Committee on Government Operations.

OPENING STATEMENT OF CHAIRMAN BROOKS

Mr. BROOKS. The subcommittee will come to order.

This morning the subcommittee will consider Reorganization Plan No. 3 of 1979 and House Resolution 428, a resolution of disapproval which I introduced in accordance with requirements of the Reorganization Act of 1977. This does not indicate my personal disapproval of the reorganization plan; rather, it is an action required to insure that the Congress will have a full opportunity to vote on any reorganization plan affecting the executive branch.

Without objection, the reorganization plan and House resolution will be included in the record at this point.

[The material follows:]

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A REORGANIZATION PLAN TO CONSOLIDATE TRADE FUNC-
TIONS OF THE UNITED STATES GOVERNMENT, PURSUANT TO
5 U.S.C. 903

SEPTEMBER 25, 1979.-Message and accompanying papers referred to the
Committee on Government Operations and ordered to be printed

39-011 O

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON: 1979

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 3 of 1979, to consolidate trade functions of the United States Government. I am acting under the authority vested in me by the Reorganization Act of 1977, chapter 9 of title 5 of the United States Code, and pursuant to section 1109 of the Trade Agreements Act of 1979, which directs that I transmit to the Congress a proposal to restructure the international trade functions of the Executive branch.

The goal of this reorganization is to improve the capacity of the Government to strengthen the export performance of United States industry and to assure fair international trade practices, taking into account the interests of all elements of our economy.

Recent developments, which have raised concern about the vitality of our international trade performance, have focused much attention on the way our trade machinery is organized. These developments include our negative trade balance, increasing dependence upon foreign oil, and international pressures on the dollar. New challenges, such as implementation of the Multilateral Trade Negotiation (MTN) agreements and trade with non-market economies, will further test our Government trade organization.

We must be prepared to apply domestically the MTN codes on procurement, subsidies, standards, and customs valuation. We also must monitor major implementation measures abroad, reporting back to American business on important developments and, where necessary, raising questions internationally about foreign implementation. MTN will work will open new markets for U.S. labor, farmers, and business-only if we have adequate procedures for aggressively monitoring and enforcing it. We intend to meet our obligations, and we expect others to do the same.

The trade machinery we now have cannot do this job effectively. Although the Special Trade Representative (STR) takes the lead role in administering the trade agreements program, many issues are handled elsewhere and no agency has across-the-board leadership in trade. Aside from the Trade Representative and the Export-Import Bank, trade is not the primary concern of any Executive branch agency where trade functions are located. The current arrangements lack a central authority capable of planning a coherent trade strategy and assuring its vigorous implementation.

This reorganization is designed to correct such deficiencies and to prepare us for strong enforcement of the MTN codes. It aims to improve our export promotion activities so that United States exporters can take full advantage of trade opportunities in foreign markets. It provides for the timely and efficient administration of our unfair trade laws. It also establishes an efficient mechanism for shaping an effective, comprehensive United States trade policy.

To achieve these objectives, I propose to place policy coordination and negotiation-those international trade functions that most require

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comprehensiveness, influence, and Government-wide perspective-in the Executive Office of the President. I propose to place operational and implementation responsibilities, which are staff-intensive, in line departments that have the requisite resources and knowledge of the major sectors of our economy to handle them. I have concluded that building our trade structure on STR and Commerce, respectively, best satisfies these considerations.

I propose to enhance STR, to be renamed the Office of the United States Trade Representative, by centralizing in it international trade policy development, coordination and negotiation functions. The Commerce Department will become the focus of non-agricultural operational trade responsibilities by adding to its existing duties those for commercial representation abroad, antidumping and countervailing duty cases, the non-agricultural aspects of MTN implementation, national security investigations, and embargoes.

THE UNITED STATES TRADE REPRESENTATIVE

The Trade Representative, with the advice of the Trade Policy Committee, will be responsible for developing and coordinating our international trade and direct investment policy, including the following areas:

Import remedies.-The Trade Representative will exercise policy oversight of the application of import remedies, analyze long-term trends in import remedy cases and recommend any necessary legislative changes. For antidumping and countervailing duty matters, such coordination, to the extent legally permissible, will be directed toward the establishment of new precedents, negotiation of assurances, and coordination with other trade matters, rather than case-by-case fact finding and determinations.

East-West trade policy.-The Trade Representative will have lead responsibility for East-West trade negotiations and will coordinate East-West trade policy. The Trade Policy Committee will assume the responsibilities of the East-West Foreign Trade Board.

International investment policy.-The Trade Representative will have the policy lead regarding issues of direct foreign investment in the United States, direct investment by Americans abroad, operations of multinational enterprises, and multilateral agreements on international investment, insofar as such issues relate to international trade. International commodity policy.-The Trade Representative will assume responsibility for commodity negotiations and also will coordinate commodity policy.

Energy trade.-While the Departments of Energy and State will continue to share responsibility for international energy issues, the Trade Representative will coordinate energy trade matters. The Department of Energy will become a member of the TPC.

Export-expansion policy.-To ensure a vigorous and coordinated Government-wide export expansion effort, policy oversight of our export expansion activities will be the responsibility of the Trade Representative.

The Trade Representative will have the lead role in bilateral and multilateral trade, commodity, and direct investment negotiations. The Trade Representative will represent the United States in General

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