With the advent of the truly global marketplace, exports are a major determinant of national economic success. The nation that successfully markets its wares to the world while maintaining or raising the living standards of its citizens has by definition produced healthy, competitive companies that are the prerequisite for a healthy, growing economy. In contrast, the nation that fails to do so relegates its citizens to declining economic opportunities and a stagnant or falling standard of living. And if growing exports can lift a nation's economic prospects, then expanding high-technology exports are the strongest levers in a nation's goods and services basket.
The manufacture and sale of high-technology products produces disproportionate benefits in boosting national productivity, raising worker skill levels, advancing technology development, and creating high-wage, stable jobs. Consequently, the Clinton Administration is committed to developing and implementing trade policies and programs that foster strong growth in high-technology exports consistent with the Nation's national security interests. The Administration's policies and programs support this goal through two main approaches:
On September 29, the President released the first annual report to Congress of the Trade Promotion Coordinating Committee (TPCC), representing a substantial step toward producing results in the first of these approaches.
Chaired by Commerce Secretary Ronald H. Brown, the Committee includes 19 different Federal agencies with export promotion roles. Preparation of Toward a National Export Strategy involved an extensive 6-month collaboration by those 19 agencies, plus input from the National Security Council, the National Economic Council, and more than 2,000 representatives from small, medium, and large businesses, trade associations, academia, private-sector export service providers, labor unions, and State and local governments.
The report calls for more than 60 specific actions many targeted at high-technology products designed to strengthen U.S. export promotion efforts. According to the report, "as a direct consequence of the innovations, efficiencies, and other actions of the National Export Strategy, U.S. exports of goods and services can reach $1 trillion by the beginning of the next decade and can produce over 6 million new jobs. These achievements could mean that, in the year 2000, more than 13 million Americans will be earning their living as a direct consequence of exports. What is more, they will be paid better wages because, on average, export-related jobs pay almost one-fifth more than other American jobs."
Substantial progress on the second major trade front opening up foreign markets and strengthening international trading rules is also at hand. On the multilateral level, the Office of the U.S. Trade Representative (USTR) is leading an Administration-wide effort to conclude the Uruguay Round of Multilateral Trade Negotiations by December 15. The goal of these negotiations is a major updating and strengthening of the General Agreement on Tariffs and Trade (GATT), which governs more than four-fifths of world trade.
At the regional level, the Administration has concluded negotiation of the North American Free Trade Agreement, designed to increase U.S. exports by eliminating barriers to trade between the United States, Canada, and Mexico and to improve the competitiveness of U.S. companies by creating the largest market in the world, with more than 370 million consumers and over $6.5 trillion in production. The Administration is making a major effort to win congressional approval for the agreement.
Other efforts include developing a trade strategy for the Asia-Pacific region and launching the U.S.-Japan Framework negotiations. In these and other initiatives, the Administration is working to reduce barriers to exports of U.S. technology-related goods and services and to restructure trade rules to ensure a level playing field for American companies.
For example, the USTR and the Commerce Department's Office of Air and Space Commercialization and other agencies completed negotiations for the Commercial Space Launch Trade Agreement with Russia signed by Vice President Gore and Deputy Prime Minister Chernomyrdin this summer. The agreement allows Russian entry into the international commercial launch market, while encouraging market-oriented reforms in the Russian space launch sector, and preventing disruptions of the international commercial launch market. Similar negotiations are currently under way to renegotiate the U.S. commercial launch agreement with China.
Commerce is also working closely with industry to develop a commercial remote sensing policy that balances legitimate national security concerns with the desires of U.S. companies to extend America's lead in this important area. One issue is restrictions on U.S. operators facing foreign competition.
Another example is the recently concluded Memorandum of Understanding between the United States and Russia to develop expedited procedures whereby pharmaceuticals approved by the Food and Drug Administration can be marketed in Russia without having to undergo extensive recertification by the Russian government.
Specific Administration actions related to technology and trade include:
Following recommendations made by the TPCC, the Administration has raised the threshold for licensing authorization of computer exports to many destinations from 12.5 MTOPS (millions of theoretical operations per second) to 194 MTOPS. It has proposed to the Coordinating Council for Multilateral Export Controls (COCOM) that this threshold be further raised to 500 MTOPS.
The Administration has also proposed a dramatic change in the definition of a supercomputer, moving from 195 to 2,000 MTOPS, and the removal of prior export licensing requirements for most telecommunications exports.
Worldwide Economic Growth: Successful completion of the negotiations by December 15 and subsequent Congressional approval of the Uruguay Round agreement will substantially strengthen the international trading system, reducing barriers to trade worldwide, providing greater certainty for business operations, and stimulating worldwide economic growth that expands the markets for U.S. high-technology products.
Trade Rules for Services: Successful conclusion of the Uruguay Round of negotiations will produce the first set of internationally agreed upon rules for services, reducing barriers, and stimulating demand for U.S. engineering, research, banking, accounting, tourism, and many other kinds of services.
Protection of Intellectual Property: The proposed Uruguay Round agreement provides for unprecedented international agreement on patents, copyrights, trade names, and other intellectual property issues. This directly affects the competitiveness of U.S. high-technology companies, which each year lose billions in royalties and product sales to international piracy.
Dispute Settlement: The United States is negotiating, for the first time, a speedy and effective set of mechanisms for the international settlement of intellectual property and other types of disputes.
Computers and Software: NAFTA immediately eliminates Mexican tariffs (currently 10 to 20 percent) on 70 percent of U.S. exports in the computer equipment and software sector. Mexican duties on the remaining 30 percent, which includes central processing units, impact printers, and certain other peripheral devices, are eliminated in equal annual stages over a 5-year period. Canadian tariffs on these products already have been eliminated in the Canadian Free Trade Agreement (CFTA).