independent regulatory agency administer enforcement of antidumping, countervailing duty and unfair import practice laws as an important counterbalance to the institutionalization of trade policy matters. I regret it was not possible to appear before the Committee personally to express the views of the NAM, and my own personal views and those of a very large part of the American business community, with regard to the Administration's proposed reorganization of the Executive Branch of the Government for the conduct and execution of foreign economic policy. Accordingly, I would be pleased if the views of NAM, of which I am Chairman of the International Economic Affairs Committee, would be made part of the record of the hearings on this important subject. Our views are stated in the attached statement, which has been developed over the period of the past year and a half as a result of close cooperation with the American business community. As you know, we do not favor the Administration's plan to establish two separate units in the Executive Branch to carry out U.S. foreign economic policy; rather, we favor the creation of a unified new Cabinet Department of International Trade and Investment. The reasons for our position are seen further in the attached statement. Many businessmen are of the opinion that the Administration's proposal is a step in the direction of creation of a separate Department of Trade and Investment, and they support the Administration's reorganization proposal for this reason. I hope this view is correct, but only time will tell. As of this time, NAM is of the opinion that the creation of a new Department of International Trade and Investment is a more appropriate course to follow. Hopefully, the Administration's proposed reorganization, if enacted, will produce some favorable results. I hope your Committee will monitor the progress. If the results are not commensurate with the expectations, I trust that your Committee will give consideration to alternate organizational proposals, including the creation of a new Cabinet department. I am enclosing a copy of my letter of August 17, 1979, addressed to Senator Ribicoff. I think the material provided in that letter is of interest to your Committee, and I request that the letter also be made part of the record. C NAM INTERNATIONAL ECONOMIC AFFAIRS COMMITTEE NATIONAL ASSOCIATION OF MANUFACTURERS INTERNATIONAL TRADE AND INVESTMENT REORGANIZATION 1776 F Street, N.W. Washington, D.C. 20006 (202) 331-3700 Executive Summary of NAM Testimony on Trade Reorganization 1. Growing U.S. interdependence with the world economy requires that the formulation and implementation of U.S. foreign economic policy be accorded a higher priority in the governmental system. Record annual trade deficits and the dollar's weakness abroad perhaps are the most dramatic examples of the competitive economic challenge facing this country. The currently unfocused U.S. government approach to international economic policy-making and execution is inadequate to these tasks. 2. Basic advantages to be derived from reorganized governmental authority over foreign economic policy lie in: (1) more consistent policy with greater attention to international economic considerations, (2) enhanced international negotiating leverage, (3) increased follow-up on international agreement obligations and opportunities, (4) better analytic economic research, (5) improved business promotion services, and (6) elimination of unnecessary duplication between government departments. 3. Consolidation of currently scattered international trade and investment functions of the government into a new department, coupled with an inter-agency coordinating mechanism, offers the most substantial benefits for recognizing the increased importance of international economics in both governmental policy formulation and implementation. 4. A number of different proposals involving consolidation of the government's trade and investment functions have been introduced by the White House, Senate and the House. However, S. 377 and the companion bill, H.R. 3859, address many of the problems which currently plague the conduct of U.S. economic policy-making and execution. This approach is an innovative and positive response to reorganization needs which contains the necessary basic consolidation proposals to establish an effective international trade and investment department. Several constructive modifications could be made in the bill, including provisions for a specific interagency coordination mechanism, the further incorporation of ITC functions, and the clarification of authority over trade adjustment assistance policy and commercial aspects of foreign aid programs. S. The Administration's recent reorganization proposal falls short of necessary consolidation objectives. Trade authorities and functions still would be split unnecessarily. There would not be a strong trade policy leader, with unified cabinet department resources, whose primary mission is the improvement of U.S. competitivenss in world markets. 6. NAM supports the creation of a separate Cabinet Department of International Trade and Investment, and urges positive and timely Congressional action on this proposal. Chairman, NAM International Economic Affairs Committee Chairman and Chief Executive Officer of Ingersoll-Rand Company International Trade and Investment Reorganization I am submitting a statement on behalf of the National Association of Manufacturers. NAM is a voluntary, non-profit association of some 13,000 business firms, large and small, located in every state of the nation. The Association's member companies account for about 75 percent of American industrial output and provide about the same percentage of the nation's industrial jobs. My own firm is primarily a producer of heavy capital equipment, along with some consumer products. We have manufacturing plants in 24 states and serve or do business in 119 foreign countries. Our sales amount to over $2.3 billion, of which about $450 million consists of machinery and equipment exported from this country. More than 6,400 of our employees in this country, or nearly 20 percent of our domestic work force, are engaged in export-related jobs, plus nearly an equal number for our suppliers. NEW INTERNATIONAL CHALLENGE The stake of my firm in world commerce, as well as that of many NAM member companies, has grown enormously over the last decades. The internationalization of the world economy truly has reached the United States. Administration figures show that one of every nine manufacturing jobs in this country depends on export sales; one out of every three dollars of corporate profits comes from international activities, either exports or foreign investment; and imports supply over one-fourth of U.S. consumption in twelve of fifteen key industrial raw materials. The share of |