[Senate Hearing 107-]
[From the U.S. Government Publishing Office]



                                                       S. Hrg. 107- 951


                  THE ANNUAL NATIONAL EXPORT STRATEGY
                     REPORT OF THE TRADE PROMOTION
                         COORDINATING COMMITTEE

=======================================================================

                                HEARING

                               before the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED SEVENTH CONGRESS

                             SECOND SESSION

                                   ON

REVIEWING THE ANNUAL REPORT OF THE TPCC ON ITS NATIONAL EXPORT STRATEGY 
                   AND ITS PLANS FOR THE COMING YEAR

                               __________

                              MAY 14, 2002

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs



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                            WASHINGTON : 2003
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            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                  PAUL S. SARBANES, Maryland, Chairman

CHRISTOPHER J. DODD, Connecticut     PHIL GRAMM, Texas
TIM JOHNSON, South Dakota            RICHARD C. SHELBY, Alabama
JACK REED, Rhode Island              ROBERT F. BENNETT, Utah
CHARLES E. SCHUMER, New York         WAYNE ALLARD, Colorado
EVAN BAYH, Indiana                   MICHAEL B. ENZI, Wyoming
ZELL MILLER, Georgia                 CHUCK HAGEL, Nebraska
THOMAS R. CARPER, Delaware           RICK SANTORUM, Pennsylvania
DEBBIE STABENOW, Michigan            JIM BUNNING, Kentucky
JON S. CORZINE, New Jersey           MIKE CRAPO, Idaho
DANIEL K. AKAKA, Hawaii              JOHN ENSIGN, Nevada

           Steven B. Harris, Staff Director and Chief Counsel

             Wayne A. Abernathy, Republican Staff Director

                  Martin J. Gruenberg, Senior Counsel

         Amy F. Dunathan, Republican Senior Professional Staff

          Michael James Barton, Republican Professional Staff

   Joseph R. Kolinski, Chief Clerk and Computer Systems Administrator

                       George E. Whittle, Editor

                                  (ii)
?

                            C O N T E N T S

                              ----------                              

                         TUESDAY, MAY 14, 2002

                                                                   Page

Opening statement of Chairman Sarbanes...........................     1

Opening statements, comments, or prepared statements of:
    Senator Carper...............................................     2
    Senator Akaka................................................     3
    Senator Hagel................................................     6

                               WITNESSES

Donald L. Evans, Secretary, U.S. Department of Commerce..........     4
    Prepared statement...........................................    23
Eduardo Aguirre, Vice Chairman and First Vice President, Export-
  Import
  Bank of the United States......................................     7
    Prepared statement...........................................    26
Hector V. Barreto, Administrator, Small Business Administration..     9
    Prepared statement...........................................    29
Thelma J. Askey, Director, U.S. Trade and Development Agency.....    10
    Prepared statement...........................................    31
Ross Connelly, Executive Vice President, Overseas Private 
  Investment
  Corporation....................................................    12
    Prepared statement...........................................    33

              Additional Material Supplied for the Record

The 2002 National Export Strategy Report submitted by the Trade 
  Promotion Coordinating Committee...............................    36

                                 (iii)

 
                  THE ANNUAL NATIONAL EXPORT STRATEGY
                     REPORT OF THE TRADE PROMOTION
                         COORDINATING COMMITTEE

                              ----------                              


                         TUESDAY, MAY 14, 2002

                                       U.S. Senate,
          Committee on Banking, Housing, and Urban Affairs,
                                                    Washington, DC.

    The Committee met at 10:35 a.m. in room SD-538 of the 
Dirksen Senate Office Building, Senator Paul S. Sarbanes 
(Chairman of the Committee) presiding.

         OPENING STATEMENT OF CHAIRMAN PAUL S. SARBANES

    Chairman Sarbanes. The hearing will come to order.
    We may be interrupted by a vote shortly. But you are never 
absolutely sure when those votes are going to take place, so we 
might as well get started, and if the vote comes, we will have 
to suspend and resume afterwards.
    I am very pleased to welcome before the Committee this 
morning this panel of distinguished representatives of the 
Trade Promotion Coordinating Committee: Secretary of Commerce 
Donald Evans, who serves as the Chairman of the Trade Promotion 
Coordinating Committee; Eduardo Aguirre, Vice Chairman and 
First Vice President of the Export-Import Bank, in which 
capacity he serves as Vice Chairman of the TPCC; Hector 
Barreto, Administrator of the Small Business Administration; 
Thelma Askey, Director of the Trade and Development Agency; and 
Ross Connelly, Executive Vice President of the Overseas Private 
Investment Corporation.
    Peter Watson, the President, is in Africa, as I understand.
    Mr. Connelly. Correct.
    Chairman Sarbanes. Before we address today's subject, I 
want to take just a moment to acknowledge someone who was on 
this panel when the Banking Committee held its last hearing, 
but is not, regrettably, with us today, and that is John 
Robson.
    I had the highest regard and respect for John. I thought he 
was a very effective Chairman of the Export-Import Bank. He 
brought great stature, depth of public sector experience, and 
just plain good judgment to the position. As Chairman of the 
Export-Import Bank, he also served as Vice Chairman of the 
TPCC, in which I know he took a very strong interest. Not only 
the Export-Import Bank and the TPCC, but also, indeed, the 
Nation, will greatly miss his leadership and his dedicated 
service.
    I very much wanted to put that on the record this morning.
    The purpose of today's hearing is to review the Annual 
Report of the TPCC on its National Export Strategy and its 
plans for the coming year.
    The Trade Promotion Coordinating Committee was established 
in statute by the Export Enhancement Act of 1992. I should note 
that before that, actually, we had a trade promotion 
coordinating committee as an initiative of the first Bush 
Administration. In fact, the legislation was passed during the 
Bush Administration.
    I make that point only to emphasize that this has been a 
bipartisan effort from its inception. It has commanded strong 
support on both sides of the aisle and it was also, I think, a 
reflection of close Executive-Congressional cooperation at the 
time, and I think that has continued to be reflected as we have 
worked on this over the last decade.
    The purpose of the TPCC, as stated in the statute, is to 
provide a unifying framework to coordinate the export promotion 
and export financing activities of the U.S. Government, and to 
develop a Government-wide strategic plan for carrying out 
Federal export promotion and export financing programs. The 
statute designates the Secretary of Commerce as the Chairman 
and designated as members all the Federal agencies involved in 
export promotion.
    The effectiveness of the TPCC depends greatly on the 
leadership it receives from the Chairman and other key members, 
and let me say that it has been my perception that Secretary 
Evans and Under Secretary Grant Aldonas have recognized the 
TPCC from the time they took office as an opportunity to bring 
a greater sense of strategy and focus to U.S. export promotion 
efforts, and we very much appreciate that perception on their 
part and their efforts to energize the TPCC as a priority.
    And they appear, at least, to have gotten active 
cooperation and leadership from the other agencies represented 
on the panel--well, certainly, the ones represented on the 
panel and, hopefully, others not here represented.
    As I mentioned, last October, the Banking Committee held a 
hearing on the preliminary report of the TPCC, in expectation 
of the Annual Report submitted today. At that time, Secretary 
Evans indicated that the Committee planned to undertake a 
benchmarking exercise to learn more about what customers of the 
agencies want from U.S. export promotion programs, and to 
examine the best practices of the governments of our major 
competitor countries to determine how they promote exports. I 
understood that then they would review U.S. export promotion 
programs in light of this exercise and develop recommendations 
for making improvements.
    As I understand it, that exercise has been completed, or at 
least a good part of it has, and Secretary Evans and the other 
members of the Trade Promotion Coordinating Committee are here 
this morning to present their findings and recommendations.
    So, we very much look forward to your testimony. With that, 
I yield to Senator Carper.

             STATEMENT OF SENATOR THOMAS R. CARPER

    Senator Carper. Thank you, Mr. Chairman. And to each of our 
witnesses, good morning, and welcome.
    There are three old Governors, who sit right here, side by 
side--former Governor Evan Bayh, former Governor Zell Miller, 
and former Governor Tom Carper. And even though we serve in the 
Senate----
    Chairman Sarbanes. It is a powerful bloc.
    [Laughter.]
    Secretary Evans. Indeed.
    [Laughter.]
    Senator Carper. A lot of frustration over here on this part 
of the panel.
    [Laughter.]
    Not really. One of the things that each of us used to do as 
Governors is lead trade delegations to countries all over the 
world. And during the time that I was privileged to be Governor 
of Delaware, I remember going to places like Japan, Vietnam, 
Taiwan, Canada, Mexico, Chile, and some other places.
    I was a shut-in compared to some of the Governors. They 
really got around the globe to promote their States and trade 
with other countries.
    One of the things we focused on within the National 
Governors Association was the belief that if governors led 
trade delegations to other parts of the world, if we went over 
a little better briefed, and our staffs went over a little 
better briefed, we might not only do maybe some good for our 
States, but also we might do some more good for the country.
    I think your predecessor, Mr. Secretary, was good to work 
with us, and I think the State Department was good to work with 
the National Governors Association and with the governors.
    I think that in your testimony here today, Secretary Evans, 
you indicate that the Department of Commerce plans to dedicate 
some more resources to training State partners in trade 
promotion coordinating activities.
    I applaud that. I know if Senator Bayh and Senator Miller 
were here today, they would as well. But we help our States and 
we help our country to the extent that we can continue to work 
as partners in training and in export promotion.
    I simply wanted to make that point to remind you that it is 
important, and to let you know that these old Governors, and I 
think I speak for my two colleagues as well, appreciate and 
applaud what you are doing here.
    Thank you, Mr. Chairman.
    Chairman Sarbanes. Thank you, Senator Carper.
    Senator Akaka.

              COMMENTS OF SENATOR DANIEL K. AKAKA

    Senator Akaka. Thank you very much, Mr. Chairman.
    I want to join you in welcoming the witnesses. I also thank 
them for appearing here today. I look forward to your 
discussion of the Annual National Export Strategy Report of the 
Trade Promotion Coordinating Committee.
    The work of the TPCC in coordinating and developing Federal 
activities to increase exports is extremely important to our 
Nation, and really, the world as well. Increased exports have a 
positive impact on the economy through the potential creation 
of jobs, increasing wages, and acceleration of economic growth.
    Representing a State where small businesses are such a 
vital part of the economy, I am particularly interested in the 
efforts being made to provide assistance to small businesses 
that export their products or have the potential to do so.
    Mr. Chairman, I look forward to today's discussion on a 
strategy for U.S. export promotion and export financing 
programs.
    Thank you very much, Mr. Chairman.
    Chairman Sarbanes. Thank you, Senator Akaka.
    The light has gone off. The vote has begun. Mr. Secretary, 
I think probably that we should suspend and go and vote and we 
will come back, and then we will take your testimony.
    Secretary Evans. Very well.
    Chairman Sarbanes. So the Committee will stand in recess 
for a few minutes.
    [Recess.]
    Chairman Sarbanes. The Committee is prepared to resume.
    Mr. Secretary, I have no colleagues here who want to make 
opening statements, so why don't we go right to you.

                  STATEMENT OF DONALD L. EVANS

                           SECRETARY

                  U.S. DEPARTMENT OF COMMERCE

    Secretary Evans. Thank you, Mr. Chairman. I am delighted to 
be back in front of your Committee. This is one of the subjects 
we talked about in our very first meetings. I know how 
important it is to you. I appreciate your focus on it.
    I also want to associate myself with the remarks you made 
with respect to John Robson. He was truly an extraordinary 
public servant. He served this country with great dignity and 
integrity and he will be missed. His presence was very much 
felt on this Committee for the period of time that he was on 
it. And so, again, thank you for those kind words that you 
offered.
    Mr. Chairman, and other Members who are not here, as 
Chairman of the Trade Promotion Coordinating Committee, I am 
extremely pleased to be here today with my colleagues to 
preview the President's first National Export Strategy.
    I ask that you include my written testimony in the record.
    Chairman Sarbanes. It will be included in the record.
    Secretary Evans. Thank you, Mr. Chairman.
    I intend to focus my oral remarks on three basic points. 
One, the tool the President needs to pry open markets for 
American goods, services, investments, and ideas. Two, the 
means by which we can ensure that the President's export 
promotion objectives are met. And three, the continuing role I 
expect the TPCC to play in implementing the President's 
strategy. President Bush and I both start from the proposition 
that American farmers, workers, and business already compete in 
a global economy. The only real question is whether we will 
give the President the tools that he needs to shape that global 
economy to our advantage or leave others to write the rules of 
the road.
    The President and, by extension, the United States, has 
been shunted aside in the battle to open new markets because 
the President lacks the tools he needs to defend our interests 
at the negotiating table --Trade Promotion Authority. With TPA, 
the President could conclude trade agreements that might 
contribute as much as $1.9 trillion to worldwide economic 
growth. Without TPA, those new markets will go to our trading 
partners, along with the investments in jobs that those markets 
will create.
    The question before the Senate is whether U.S. farmers, 
workers, and entrepreneurs will get a chance to compete for a 
slice of the expanding global economic pie or find their goods 
and services increasingly locked out of markets around the 
world.
    The President needs TPA, or Trade Promotion Authority, now.
    While Trade Promotion Authority is a necessary condition 
for defending America's trade interests, it is not sufficient. 
That is where our export promotion strategy and the TPCC comes 
in. I can summarize our approach in three words that lie at the 
very heart of the President's management agenda--follow-
through, results, and accountability.
    First, I say follow-through. I mean ensuring that the 
benefits of our trade agreements accrue to American exporters, 
rather than our trading partners. Too often, the United States 
has left its trade gains on the bargaining table.
    We aim to reverse that trend. We have already begun to 
implement that strategy. The most significant market opening 
initiative in recent years has been China's accession to the 
World Trade Organization. That is why I recently led a trade 
mission to Bejing and Shanghai. It is also why I will send a 
high-level Commerce official to China each month to ensure that 
China implements its WTO obligations, so that our small- and 
medium-sized companies can reap the gains from China's 
compliance. We have adopted the same approach with our free 
trade agreement partners. I will lead a trade mission for 
small- and medium-sized U.S. businesses to one of our NAFTA 
trading partners, Mexico, this summer. I will be joined on that 
trip by many of my TPCC colleagues here with me today because, 
as I have told my colleagues, we would be better prepared to do 
business.
    Second, when I focus on results, it is because that is what 
the President and I both expect. When we met with you last 
October, Mr. Chairman, we described our intention to ensure our 
export promotion programs were best in class, when compared 
against our Government counterparts abroad and within private 
industry.
    Today, after 7 months of research and a true team effort, 
my colleagues and I are confident that we have laid the 
groundwork for achieving just that goal.
    That said, after 30 years of experience in the private 
sector, I can tell you that if you cannot measure your 
progress, you won't make any progress. That is why I will 
insist that our first step in implementing the recommendations 
set out in the TPCC's Report will be to define the results we 
want to achieve and develop the means to measure our progress 
toward those goals.
    The guideposts I intend to use to measure our progress 
include the growth of U.S. exporters, particularly small- and 
medium-sized exporters, and the level of exports that take 
place as a result of our efforts. And three, whether we have 
met our customers' expectations. That will ensure that our 
export promotion programs remain grounded in what our customers 
want, which is the surest way to guarantee results.
    Third, and finally, I intend to emphasize accountability. 
My colleagues and I have assumed personal responsibility for 
making this work. We expect to be held to that standard. The 
President expects nothing less, nor should you.
    The role that the TPCC will play in implementing our export 
strategy is straightforward. I intend to adopt what my friends 
in business would call a total quality approach to export 
promotion, with the TPCC serving as the auditor of our progress 
toward that goal. The TPCC agencies will meet at least once a 
month at the cabinet level or subcabinet level to take stock. 
The TPCC will produce quarterly reports so that we can check 
our progress throughout the year, rather than waiting for the 
Annual Report.
    In the process, I expect the TPCC process to ensure that 
the agencies involved are coordinating our efforts, to name 
only a few of the recommendations contained in this Report.
    Working together to discover projects sooner and bringing 
the prospect of U.S. financing early on in order to help U.S. 
companies take full advantage of these opportunities. Also 
presenting a single face to the exporter, tailing agency 
programs to meet the exporters' needs by functioning as one-
stop shops.
    We want our people in the field to function like account 
managers, helping firms navigate the full array of Government 
export promotion programs. Also combining the marketing efforts 
of SBA, Ex-Im Bank, and the Commercial Service to make sure 
lenders know how these programs can help their small business 
clients.
    In addition, enhancing our use of the Internet as a 
communication tool, particularly our primary portal--
export.gov--so that exporters can find the Government's best 
information on trade leads in one place in real time. And 
reaching out to our State and local partners, elected 
officials, and private sector representatives, as a means for 
reaching small- and medium-sized companies as multipliers of 
our services.
    In closing, let me reiterate my appreciation to you, 
Senator, and all the Members of this Committee for your 
interest in and oversight of the export promotion process. What 
the TPCC really offers us is an avenue through which we can 
apply many of the principles of private sector management to 
Government programs, yielding what I promise will be both 
effective and results-oriented.
    I welcome your thoughts and those of your colleagues on the 
recommendations we are presenting today, and would be pleased 
to answer any questions you may have.
    Chairman Sarbanes. Thank you very much, Mr. Secretary.
    We have been joined by Senator Hagel. Chuck, did you have 
any opening statement?

                 COMMENT OF SENATOR CHUCK HAGEL

    Senator Hagel. No. Thank you, Mr. Chairman.
    Chairman Sarbanes. Well, we will move right along, then, 
and we will now hear from the Vice Chairman of the Export-
Import Bank, Mr. Aguirre.

                  STATEMENT OF EDUARDO AGUIRRE

             VICE CHAIRMAN AND FIRST VICE PRESIDENT

            EXPORT-IMPORT BANK OF THE UNITED STATES

    Mr. Aguirre. Thank you, Mr. Chairman.
    Before I begin my remarks, I would like to once again thank 
you for your comments and for the comments of so many others 
regarding the passing of our late Chairman Robson. Clearly, Ex-
Im Bank is still in mourning and will be for some time. We miss 
him. But our extended family, and certainly the Robson family, 
very much appreciate all the sympathy that we have been 
receiving over the past month and a half.
    Chairman Sarbanes. I note that there is a very nice tribute 
to John Robson in the opening of the TPCC Report. I commend you 
for that.
    Mr. Aguirre. Thank you, Mr. Chairman. And thank you for the 
opportunity to appear before you today, particularly in my role 
as Vice Chairman of the TPCC, and to present the National 
Export Strategy. We are very pleased to share our collective 
strategy on how to increase U.S. exporter competitiveness 
through collaborative Government support. And with your 
indulgence, and in the interest of brevity, a more extensive 
testimony is being provided for the record.
    Chairman Sarbanes. It will be included in the record.
    Mr. Aguirre. Thank you, Mr. Chairman.
    My testimony focuses on Ex-Im Bank and the export finance 
arena. The Export-Import Bank of the United States is in step 
with the Administration's commitment to free and fair trade. 
Ex-Im Bank supports American jobs by assisting U.S. exporters 
to compete fairly and successfully in the world marketplace. 
U.S. businesses rely on Ex-Im Bank to facilitate the financing 
of exports that would otherwise not take place. We attempt to 
level the playing field for U.S. businesses by offsetting 
market imperfections and trade-distorting subsidies that 
disadvantage U.S. exporters.
    Last year alone, Ex-Im Bank supported $12.5 billion worth 
of U.S. exports. Of all Bank transactions, 90 percent were in 
direct support of small businesses, representing $1.7 billion 
or 18 percent of the exports supported. In fact, 383 new small 
businesses utilized the Bank for the first time last year to 
support their exports. As all of you know, Ex-Im Bank does not 
compete with the private sector financing.
    The Bank works closely with other U.S. Government agencies 
to capture possible efficiencies and to protect the interest of 
the taxpayer. Let me briefly review some of the prior TPCC 
initiatives 
involving Ex-Im Bank and what Ex-Im Bank is currently doing to 
address them.
    The Bank maintains eight regional offices across the 
country. For the past 2 years, the Bank has delivered direct 
marketing material jointly with the Department of Commerce and 
some of their divisions. We are doing more educational seminars 
outside of Washington and have reformatted them into efficient 
one-day mini-courses.
    We actively participate in trade association shows, where 
thousands of exporters and buyers are gathered in a very cost-
effective outreach tactic. Just 2 weeks ago, the Bank hosted 
1,500 participants, who came to learn about the Bank and to 
network, at our annual conference. Participants included 
exporters, bankers, brokers, foreign buyers, and the United 
States and foreign government officials. Now onto the current 
TPCC recommendations.
    The recommendations of the National Export Strategy were 
developed in close coordination amongst the TPCC agencies and 
with significant input from the U.S. export community. From 
this dialogue, the TPCC developed the recommendations.
    Highlights of the recommendations that pertain to the Ex-Im 
Bank include five key areas:
    Number one, technology. Employ technology to maximize 
customer service, creating processing efficiencies, and 
leveraging scarce human resources through automation. We also 
have several upgrading programs in place, and we aim to provide 
faster turn-around time and more up-to-date management 
information.
    Number two, tied aid. Develop a multipronged approach to 
address the trade-distorting effect of commercially driven tied 
aid.
    Number three, Ex-Im Bank and SBA coordination. We aim to 
better integrate Ex-Im Bank's and SBA's Working Capital 
Guarantee Programs. In fact, last week, Administrator Hector 
Barreto of the SBA and I signed an agreement to coordinate 
marketing 
efforts and to work together to identify additional 
opportunities to 
integrate these programs.
    Number four, market windows. Commission a study to assess 
the impact of market window activity on U.S. exporter 
competitiveness.
    And last, number five, the service sector. Examine the 
unique 
financing needs of the services sector and develop programs and 
procedures that address those needs.
    In conclusion, since last October, when the TPCC agencies 
collectively last testified before this Committee, we have been 
working very hard to identify innovative ways to serve Ex-Im 
Bank's customers--the Nation's exporters. I look forward to 
working with you and the other TPCC agencies in implementing 
these critical steps to improve U.S. exporter competitiveness.
    Mr. Chairman, Senator Hagel, and Senator Akaka during my 
34-year banking career, I have always tried to make decisions 
on what is right for the customer. In the private sector, it 
was a matter of survival, aligning your organization around 
your customers' needs and expanding your services through 
strategic alliances. Those were, and still are, one of the best 
ways for companies to expand market share.
    In the public sector, the principles of the TPCC are 
fundamentally issues of efficiency and providing our exporters 
with a unified and simplified Government response. Our 
exporters need the best their Government can offer. The best 
will only come through our collective and coordinated actions.
    While the TPCC has made progress in the past few years, we 
recognize that we have more to do in several areas. The TPCC is 
committed to this effort. We appreciate your leadership on 
these issues and I look forward to addressing your questions.
    Thank you.
    Chairman Sarbanes. Thank you very much.
    Next, we will hear from Hector Barreto the Administrator of 
the Small Business Administration.

                 STATEMENT OF HECTOR V. BARRETO

                         ADMINISTRATOR

                 SMALL BUSINESS ADMINISTRATION

    Mr. Barreto. Thank you, Chairman Sarbanes, and 
distinguished Members. Thank you for inviting me to testify on 
the Trade Promotion Coordinating Committee's National Export 
Strategy, and the role that the U.S. Small Business 
Administration plays in the Federal Government's export 
promotion strategy.
    I would first like to recognize the outstanding leadership 
of Secretary Evans, Under Secretary Aldonas, and the TPCC staff 
for their dedication to this effort. The SBA has been working 
closely with the Department of Commerce, Ex-Im Bank, OPIC, and 
other TPCC agencies in developing recommendations for the 
National Export Strategy that incorporate small business issues 
in order to grow them to be the most competitive in the world.
    Small businesses create two-thirds of new U.S. jobs, are 
responsible for much of our economy's innovation and generate 
over half of our private gross domestic product. But while 97 
percent of U.S. exporters are small businesses, fewer than 1 
percent of our small businesses export.
    The TPCC conducted a formal survey of 3,000 U.S. small- and 
medium-sized businesses to determine what was needed for them 
to be more competitive in the global marketplace. The survey 
found that small companies face more hurdles exporting than 
large companies. Specifically, small businesses need good 
information and expertise in a way that does not require large 
resources of time. Small businesses also need capital. And the 
SBA is a resource for these needs.
    The National Export Strategy presented today by the TPCC 
recommends: ``A Government that provides better customer 
service through joint promotion, training, trade finance, and 
information delivery.'' In order to meet the need to create a 
one-stop-shop approach, we have enhanced our working 
relationships with our partners in the following ways:
    SBA and the Ex-Im Bank have entered into a Memorandum of 
Cooperation. The first phase of this initiative will be to 
leverage marketing resources across SBA and Ex-Im Bank to raise 
awareness among lenders and exporters.
    SBA and the Department of Commerce are working more closely 
to coordinate marketing and outreach efforts to the U.S. small 
business community in the delivery of both technical and 
financial assistance programs. The SBA's and Commerce's 
national network of service providers will collaborate and will 
work in partnership to provide significantly improved 
counseling, training, and financial assistance, while also 
forming a more efficient and transparent delivery system for 
these services. We are already making great strides in cross-
training. For example, in recent months, SBA has participated 
in Commerce's annual regional meetings of Senior Commercial 
Officers and have begun the process of training them on SBA's 
International Trade Loan Programs.
    Another example of our efforts in leveraging our 
partnership to further promote export opportunities for U.S. 
small businesses will be the Small Business Initiative between 
SBA and OPIC that will focus on cross-training and outreach to 
provide the necessary tools and products needed to invest 
internationally. We look forward to formalizing this 
opportunity in the very near future.
    After reviewing our existing International Trade loan 
programs and the recommendations from the National Export 
Strategy, SBA increased the Export Express loan guaranty to a 
new maximum of $250,000. The SBA Export Express loan guaranty 
program can be used to finance small businesses' export 
development costs such as participation in a foreign trade show 
or translation of product catalogues, as well as finance actual 
export orders.
    SBA is also a partner in many of the President's E-
government initiatives to make information available on-line 24 
hours a day, 7 days a week. We are currently working together 
with Commerce to strengthen our links with export.gov and 
looking at enhancing SBA's International Trade website to allow 
the customer to access information at the time and the place of 
his or her convenience.
    SBA currently provides information to small businesses 
through the Export Trade Assistance Partnership, or E-TAP. E-
TAP is a training program offered at each of the 19 U.S. Export 
Assistance Centers and some Small Business Development Centers, 
which combined with individual business counseling, offers 
effective and customized assistance to new-to-export companies 
looking to enter the global marketplace. We are looking at ways 
of increasing the number of E-TAP programs being offered by 
encouraging our resource partners to implement the program.
    SBA is fully committed to the National Export Strategy. We 
believe that the recommendations in this Report will help to 
streamline and improve Federal export assistance programs and 
benefit U.S. small businesses so that they will continue to be 
the most competitive companies in the world.
    I look forward to SBA's ongoing contribution to the TPCC 
and our commitment to evaluate and harmonize our programs. I 
would be happy to answer any questions you may have, and thank 
you very much for the opportunity.
    Chairman Sarbanes. Thank you very much. And in introducing 
you, I wanted also to thank you for the SBA's quick response to 
the tornado that struck Southern Maryland. Your people were on 
the scene and we very much appreciate that.
    Mr. Barreto. Thank you, Mr. Chairman.
    Chairman Sarbanes. It has been very helpful.
    Next, we will hear from Thelma Askey, Director of the U.S. 
Trade and Development Agency.

                  STATEMENT OF THELMA J. ASKEY

                            DIRECTOR

               U.S. TRADE AND DEVELOPMENT AGENCY

    Ms. Askey. Thank you, Chairman Sarbanes, Senator Hagel, and 
Senator Akaka, for providing this opportunity for TDA and the 
other members of the TPCC to come before you today.
    As has already been said, the last time we were before you 
was October 2 of last year, shortly after the attacks of 
September 11. Now, 6 months later, I think it is even more 
clear that trade promotion efforts such as those we are 
discussing here today, are vital to the United States--and 
global--economic and political security. In particular, our 
ability to foster development in and trade with the Front Line 
States, with countries in South and South-East Asia, and with 
struggling markets in Africa, will go a very long way toward 
promoting international stability.
    To begin with, let me first express my appreciation to 
Secretary Evans, Under Secretary Aldonas, and their staffs for 
the tremendous amount of work that they have put into the TPCC 
process in the past 7 months. They are to be commended for 
their proactive efforts to discern the needs of the exporting 
community and to develop specific strategies to respond to 
those needs.
    The Report contains a number of specific proposals 
pertaining to TDA, and I will outline them in a moment, but 
since TDA does not regularly appear before this Committee, I 
would like to quickly take a moment to reiterate TDA's mission 
and activities.
    As directed by statute, TDA promotes American private 
sector participation in developing and middle-income countries, 
with special emphasis on economic sectors that represent 
significant U.S. export potential. TDA is a small, nimble 
agency that partners with U.S. companies and assists them in 
building mutually beneficial relationships with overseas 
project sponsors and Government officials. The result is 
increased U.S. exports and jobs, as well as the completion of 
high-quality, successful projects and other solutions that 
address priority developmental needs in host countries.
    TDA's operations put it at the forefront of U.S. foreign 
and trade policy, where it works in concert with a wide array 
of other U.S. Government agencies, such as the Departments of 
State, Commerce, Treasury, Agriculture, Energy, and 
Transportation, the U.S. Trade Representative, Export-Import 
Bank, of course, and the Overseas Private Investment 
Corporation.
    Turning to the TPCC Report, there are a number of 
recommendations that involve U.S. TDA. Since my colleagues have 
already identified many of them, I will simply highlight a few 
key recommendations.
    First of all, we will continue to focus on developing 
coordinated strategies in crisis regions. For example, TDA has 
been working closely with OPIC in developing potential projects 
in Afghanistan, particularly in the telecom sector. In fact, 
TDA is already providing funding for an advisor to the 
communications ministry, to assist them with evaluating 
proposals for the telecommunications sector. We also have been 
working closely with Commerce and the FAA in developing a 
technical assistance program for the aviation sector in 
Afghanistan that will support U.S. commercial interests.
    In addition, as proposed by Treasury and other TPCC 
agencies, TDA will explore opportunities to fund front-end 
engineering and design studies, which are commonly referred to 
as FEED studies. Other countries sometimes fund such studies as 
part of aggressive efforts to win large development projects, 
and TDA will initiate a pilot program to support U.S. companies 
who are confronted with this type of competition.
    TDA also looks forward to continuing its efforts in the 
area of biotechnology. We continue to work with USDA, USTR, and 
the Department of State to support public-private partnerships 
that help promote sound regulatory environments overseas for 
American biotech products. These efforts are crucial for 
ensuring that our trading partners continue to allow the import 
of American pharmaceutical and agricultural products.
    Additionally, TDA will continue to develop strategies for 
supporting efforts in the service sector, such as in insurance, 
banking/finance, tourism and e-commerce. For example, TDA has 
been supporting feasibility studies and technical assistance 
for projects around the world involving e-commerce. Most 
recently, 2 weeks ago, TDA signed a grant with Sinopec, China's 
leading petroleum and petrochemical company, for a feasibility 
study to help develop an e-trade platform, putting all of the 
company's procurement activities online. And of course, that is 
particularly beneficial to U.S. exporters.
    In sum, TDA will continue to work closely with the TPCC and 
its member agencies in making sure that U.S. policy objectives 
are supported by concrete results, and that U.S. companies have 
the support they need to operate around the world. This 
obviously is of benefit to the U.S. economy, as it supports 
exports and creates U.S. jobs. But equally important, the 
dissemination of U.S. goods, technology, services, and business 
practices around the world represents a cost-effective, market-
based means of effectuating the President's strategy of 
supporting economic growth and development in developing 
countries.
    Again, I appreciate the opportunity to appear before you 
today and look forward to answering any questions you may have.
    Chairman Sarbanes. Thank you very much.
    Our concluding panelist is Ross Connelly, the Executive 
Vice President of the Overseas Private Investment Corporation.

                   STATEMENT OF ROSS CONNELLY

                    EXECUTIVE VICE PRESIDENT

            OVERSEAS PRIVATE INVESTMENT CORPORATION

    Mr. Connelly. Thank you, Mr. Chairman, and Members of the 
Committee. I am pleased and honored to be here today on behalf 
of Dr. Peter Watson, OPIC's President and CEO. Dr. Watson 
regrets that he could not be here today in person due to 
previously scheduled travel to Africa.
    Mr. Chairman, I have some brief verbal remarks I would like 
to make and ask that my written statement be submitted for the 
record.
    Chairman Sarbanes. Mr. Connelly, your full statement will 
be included in the record.
    Mr. Connelly. Thank you.
    At the onset, Mr. Chairman, I want you and the Committee to 
know that OPIC is committed to working with our sister agencies 
to meet the objectives of the TPCC Report.
    I am very pleased to be sitting here with my colleagues 
from the Trade Promotion Agencies, many with whom we have 
developed good and productive working relationships.
    I want to briefly speak to the most encouraging fact of 
this entire TPCC exercise, that not only have the agencies 
reached consensus on these recommendations, but also many of us 
are already implementing them.
    As you know, Mr. Chairman, I spent 25 years in the private 
sector. Policy-setting and goals are very important. But at the 
end of the day, as Secretary Evans said, success in the private 
sector is measured by tangible results. In that regard, I am 
pleased to report on specific actions that we have taken in 
support of the TPCC objectives.
    The TPCC Report calls for greater cooperation among the 
agencies in early project development, as well as better 
coordination in crisis regions. This has been a major objective 
of mine in the last 10 months at OPIC, and I am pleased to 
report that with our colleagues at the Ex-Im Bank and TDA, we 
are making this a reality.
    In the company of my friend, Eduardo Aguirre, our three 
agencies conducted an investment assessment mission to Pakistan 
this past February that has helped us develop a significant 
volume of U.S. investment opportunities in that country.
    More recently, as you have heard, OPIC and TDA have been 
working closely to develop opportunities in Afghanistan that we 
believe should lead to fruition shortly.
    There are other areas where we have played a more pro 
active role--sub-Saharan Africa being an example. But I would 
like to state for the record that, based on my own experience, 
early identification and development of market opportunities is 
a role OPIC can perform quite effectively for the benefit of 
U.S. businesses and taxpayers in the context of OPIC's overall 
development mission.
    The TPCC call for better customer service for U.S. 
businesses, mirrors our own effort to date. Through an internal 
reorganization, OPIC is working to empower its individual line 
departments who work directly with U.S. businesses to take 
ownership of a project as it works its way through the agency 
approval process, to utilize new internal structures to resolve 
disputes quickly, and to streamline the application process so 
that we can provide a more efficient, less costly service.
    As a small agency, OPIC is looking for ways to leverage its 
resources with other agencies. And in this regard, as 
Administrator Barreto has indicated, OPIC soon hopes to 
conclude an agreement with the Small Business Administration 
that will provide a vehicle to seamlessly connect interested 
U.S. companies currently doing business with the SBA with the 
tools and the products that OPIC provides, in order to help 
U.S. firms expand internationally.
    Through these efforts and through the implementation of the 
recommendations of the TPCC Report, we will have better 
coordination, improved customer service, and more aggressive 
outreach and advocacy for U.S. business, particularly U.S. 
small business.
    We at OPIC are confident that the TPCC recommendations have 
placed us on the right path.
    Thank you very much, Mr. Chairman. I would be pleased to 
answer any questions.
    Chairman Sarbanes. Thank you very much.
    First of all, I want to commend you and the Committee. I 
think both the survey you did of exporters and the review you 
did of what other countries do provide us a very important data 
base.
    I am particularly interested in the Committee following up 
on the resources that our competitors devote to export 
promotion. And if you can get the material, what their budget 
breakdown is, what goes into it, a summary of the activities 
that they are doing.
    I think it is very important that we fully understand and 
appreciate what we are up against, what our exporters are up 
against and, in effect, what you all are up against. It may 
influence people here to make somewhat different judgments 
about the kind of commitment that we should make to the export 
strategy.
    So, I think that is a very important initiative and I hope 
you will build on it in future reports.
    I want to focus for a moment on the two charts at the end 
of the Report, which show where the money goes for export 
promotion.
    Now, I guess the first question that I am interested in, 
and I know that budget issues are difficult and sensitive for 
interagency committees to deal with. But did the TPCC play a 
role in formulating the export promotion budget recommendations 
that are contained in the President's budget, or did each 
agency simply come forward with their proposal and got it 
included one way or another, so that there was no coordination 
on the budget proposal?
    Secretary Evans. Mr. Chairman, I think as far as these 
charts are concerned, which refers to the 2003 budget, it was 
clear that each agency and department acted on their own, 
independent of one another.
    We are making the effort to talk about this issue as we go 
into the 2004 budget cycle, particularly as it relates to an 
important area like training. That is one of our focused 
initiatives, to train individuals across Government as to all 
the various programs that are available to our exporters in 
this country, making sure that the right hand knows what the 
left hand is doing, what each agency is doing. And so, we are 
having discussions about that. I cannot tell you that it is 
formal yet. But I do recognize the importance of talking about 
a coordinated effort.
    So, Mr. Chairman, as was mentioned in my comments, I think 
that we have come a long way since the October meeting. We have 
a long way to go, though. We are going to meet every month and 
talk about priority issues that this Coordinating Committee 
must deal with.
    I think one of those priority issues are the resources that 
we have available to us, like our budgets, and make sure that 
there is not duplication, make sure there is not overlap, make 
sure that there is discussion as to the kind of dollars that 
each agency is using as it relates to the Coordinating 
Committee and are there some savings there some place?
    I do not know the answer to the question, but we are 
having, and will have, those discussions as it relates to the 
2004 budget.
    Chairman Sarbanes. Well, we changed the date for the Report 
from September to March in 1999, in an effort to try to get the 
TPCC into the budget cycle, so that there was a coordinated 
Administration strategy on export promotion, which kind of 
reflected the judgment of the interagency committee.
    I am encouraged to hear that, to some extent, you are 
thinking in those terms for the 2004 budget. I think as you 
look at what other countries are doing, it would be helpful if 
we got some sense of how they allocate their assistance, to. I 
notice 50 percent of the promotion is done by the Department of 
Agriculture.
    Secretary Evans. Right.
    Chairman Sarbanes. Now, without more analysis, I do not 
know whether that is the right figure, too much, too little. It 
is hard to judge. But it would be interesting to know what 
other countries do and how this relates.
    I am struck by the fact that in the Report, because I have 
a feeling that probably the overall amount we are providing is 
not adequate. Actually, I know you all are bound by the OMB, 
but I might try to find some indirect way to put that question 
because you indicate that Canada last year spent 13 times more 
on export promotion than the United States did per dollar of 
GDP. And that France and the United Kingdom outspent and 
outstaffed the United States in absolute terms. In other words, 
they had a bigger budget than we have. Is that correct?
    Secretary Evans. They have a larger budget than we have, 
yes. I do not know the exact numbers, but, yes.
    Chairman Sarbanes. Those are pretty challenging figures 
when you look at them. What kind of issues besides the budget 
issue do you anticipate focusing on as you move toward the 
future?
    Secretary Evans. Well, I guess there are two or three, Mr. 
Chairman. One is education. I think one of the real challenges 
we face in this country is educating small- and medium-size 
companies, really educating America, as to the importance of 
trade in our growing and changing economy.
    I think that it is clear that our global economy is 
becoming integrated at a much faster pace than certainly any of 
us would have thought 5 years ago, and certainly much faster 
than any of us would have thought some 10 years ago when you 
passed the Export Enhancement Act.
    We are rapidly moving into a very integrated, global 
economy. And it is important that we provide the tools to not 
only educate our companies as to how that economy will 
function, but also have the tools and the support and the 
resources to facilitate our small- and medium-size enterprises 
participating in that.
    So, I think I would say, education is a large focus of 
ours. I mentioned training in my earlier comments, training 
across agencies. And in that, Mr. Chairman, I would say a 
serious, coordinated effort. Not an effort where we talk to 
each other once every 4 or 5 months and then send you a report 
once a year, but let's get results. Let's talk. Let's make sure 
we are meeting monthly and make sure that we are receiving 
results on a monthly basis. This is not something that I want 
to hear about a year from now. I want to hear about it on an 
ongoing kind of basis.
    I would say a focus is to just--and we have great 
cooperation. We absolutely are talking to each other. I have 
heard nothing but a spirit of cooperation throughout all 
agencies and all departments. I want to make sure that we 
sustain that, make sure that we are focused on not only 
continuing that, but also achieving results. What are the 
action items that we need to be dealing with month to month to 
month, and let's check them off.
    Another area that came up in the meeting last October was 
this coordination--and came up again by the good Senator this 
morning--coordination between Federal and State and how 
important it is to coordinate our efforts. We have made good 
progress on that. We have some 12 States right now where we 
share office space, so people are right next to each other 
talking to each other. We have programs underway where we are 
providing support to promote trade State by State.
    That is an education tool. We are going to focus on working 
very closely with the States because they are the ones that are 
the closest to the small- and medium-size businesses.
    I think those are probably several of the highlights. I 
think one last one we would mention, Mr. Chairman, is the 
importance of, after the training, you really do have people in 
the Government that can take people through a project from 
start to finish and can stay with them, and not only help them 
identify the market, identify the opportunity, but also once it 
is identified, work with them on helping them find and source 
financing.
    Once financing is found and sourced, then making sure that 
they understand the rules and regs and standards of the country 
that they are moving into, and how to deal with customs in this 
country that they are going into. And then stay with them for 
any kind of regulatory or any kind of related issue that they 
may deal with in another country. That is the challenge. These 
are new countries and different rules and different regs.
    You want to have kind of a start to finish. Somebody that 
can stay with them. So those are four or five, I think, of the 
very important issues that we are focused on.
    Chairman Sarbanes. Very good.
    Senator Akaka.
    Senator Akaka. Thank you very much, Mr. Chairman.
    Mr. Secretary, I am here because I want to talk about 
tourism.
    Secretary Evans. Good.
    Senator Akaka. I would like to go back and quote Mr. 
Doggett, the former Deputy Assistant Secretary for Tourism 
Industries, who said, ``International travel to the United 
States is an export just like the sale of agricultural 
products, automobiles, or consumer goods, and that strength 
plays over into our GDP.'' So it is very much a part of the 
export of services that you promote. One of the recommendations 
in the Report is that the Department of Commerce's Office of 
Travel and Tourism in Trade Development should develop public-
private partnerships. You mentioned in your statement that you 
are even doing that at the office here.
    My question to you is, how will these partnerships be 
developed and how will the Department coordinate promotion 
efforts with State agencies?
    Secretary Evans. Well, Senator, a couple thoughts on that.
    One is we certainly put a lot of emphasis on tourism and 
travel in the last 15 months, but even more so since September 
11, because if there was any industry that was seriously 
impacted by September 11, it was the travel and tourism 
industry. And we recognized that early.
    I met with the private sector probably no longer than a 
couple of weeks after September 11. I cannot remember the exact 
date. But I asked them to come to Washington and sit down and 
visit with us and talk about ways we can work together in 
partnership to promote tourism.
    Out of that came an ad campaign that we encouraged and I 
think has been helpful to the industry. Out of that meeting 
came the idea of revitalizing the Tourism Policy Council, which 
gives us a regular opportunity to sit down with the private 
sector to talk about joint efforts, joint ideas, joint 
promotional kind of campaigns.
    I cannot point to anything specific right now, other than 
the ad campaign that took place this last--I think the ad 
campaign probably was right after the first of the year, if my 
memory serves me right. There were some TV spots that were not 
only run here in America, but also in Europe and in Japan.
    It is certainly something that I talk about everywhere I 
go, and I will continue to do that.
    But the focus for us to look for opportunities of public-
private partnerships will be through our Tourism Development 
Desk, as well as our Tourism Policy Council, which keeps us, 
and myself, frankly, in regular communication with the private 
sector.
    Senator Akaka. Do we have any efforts that place agency 
representatives in particular countries to work with that 
country on tourism at this time?
    Secretary Evans. We have, of course, Commercial Service 
offices all over the world and we will, through those offices 
and through our embassies, quite frankly, but through those 
offices, through our foreign commercial service offices around 
the world, we encourage those to promote tourism and travel any 
way that they can.
    Again, I think it is a part of the overall training 
initiative, we should make sure that the people that are around 
the world have the tools that they should have to promote 
American products and goods and services. One of those is 
export of tourism and travel.
    Senator Akaka. I just want to say, Mr. Secretary, that we 
appreciate what you are doing for the Commerce Department. 
Thank you very much.
    I want to move to----
    Ms. Askey. Senator Akaka.
    Senator Akaka. Director Askey, I appreciate the way you 
describe your agency as being small and nimble. You are also 
working on partnerships, especially with other countries and 
our U.S. companies to promote exports.
    You mentioned in your statement that the Trade and 
Development Agency will continue to develop strategies for 
supporting efforts in the service sector, including tourism. 
What strategies are being developed by the TDA to support 
tourism?
    Ms. Askey. Thank you. I had wanted to add to the 
Secretary's comments on that because we happen to have a 
concrete example. This month, we are hosting a conference for 
exporters of tourism packages, et cetera, opportunities in 
Istanbul. And we worked very closely with the Department of 
Commerce's Foreign Commercial Service officers in the region.
    We particularly reinvigorated our effort in the post-
September 11 period, both because it is important for those 
front-line States and some of the other countries in the 
region, to look to tourism as kind of the first steps or early 
steps in development.
    Of course, it is very important for U.S. exporters to be 
active participants in that. And the conferences that we set up 
are very project-specific type conferences. Along with the 
Foreign Commercial Service and with Ex-Im Bank and OPIC, we 
have worked hard to try to develop specific opportunities that 
we can highlight for U.S. participants and foreign country 
participants that will be coming together for this tourism 
conference.
    And it is one of the ways that we both let our trading 
partners around the world know about U.S. service exports in 
this particular sector, but also U.S. providers in this sector, 
what opportunities there are, what development opportunities 
there are in this region, and throughout the world.
    We very much look at tourism as an important service sector 
and as one where U.S. providers are very competitive.
    Chairman Sarbanes. Thank you.
    Mr. Aguirre.
    Mr. Aguirre. Senator, if I could just add a couple of 
comments about tourism. As you know, Ex-Im Bank is very 
involved in aircraft financing, export aircraft financing. 
Obviously, a lot of that is going to the Pacific Basin.
    I would suspect that many of the 560 or so aircraft that 
are currently in our portfolio are landing in Hawaii, just as 
we speak. So, in a round-about way, I think we are financing 
some exports which are clearly bringing tourism to our shores.
    Senator Akaka. Thank you.
    Mr. Secretary.
    Secretary Evans. I would add one other quick thought, 
Senator. I was in Tokyo about 3 weeks ago and signed a tourism 
promotion agreement with the Minister of Land and 
Transportation Ogi. We were very pleased to be able to sign 
that as another indication of our cooperation with Japan to 
promote tourism.
    She further said that she would be happy to save me the 
journey all the way to Tokyo next time and would meet me in 
Hawaii. So maybe that is another way to promote tourism to 
Hawaii.
    Senator Akaka. Thank you very much, yes.
    Secretary Evans. Thank you.
    Mr. Barreto. Senator Akaka, I also wanted to contribute 
that the SBA has been very involved since September 11 with our 
disaster loans. Obviously, whenever there is a disaster, we are 
always at the forefront. We were recently in LaPlata, Maryland.
    Right after September 11, we received a lot of calls into 
the SBA, and some of those were from Hawaii, especially from 
the travel and tourism industry.
    One of the things that the SBA has done, as well as 
continuing to coordinate with the Secretary's roundtable on 
travel and tourism, is that we have also reached out across the 
country, outside of the disaster area, to do economic injury 
disaster loans. Those are the loans that the SBA does directly. 
They are 4 percent loans over as much as a 30-year time 
horizon. We took the unprecedented move of changing our 
regulations to be able to allow us to do those types of loans 
all across the country.
    It has been very successful. We have done a lot of 
outreach. And I know that one of the areas that has been the 
most effective is the travel and tourism industry, and we will 
continue to reach out to that very important segment of our 
economy.
    Senator Akaka. Thank you, Mr. Barreto.
    Mr. Chairman, thank you. My time has expired.
    Chairman Sarbanes. Thank you.
    I think Senator Akaka is on to a very important point here. 
There are a number of Members in the Congress who are very 
interested in promoting travel and tourism. Senator Reid in 
Nevada actually heads up a Congressional Caucus in that regard. 
Obviously, it is very important to Hawaii.
    I know other countries have these major tourism promotion 
outlets here, like France and the United Kingdom. Up in New 
York, they have that. Does the United States have anything that 
is comparable overseas, trying to promote the residents of 
those countries to come here?
    Secretary Evans. I do not know what it would be, Mr. 
Chairman. Something may be escaping me, but I do not know that 
we have anything on that level.
    Chairman Sarbanes. I think we have left it primarily to the 
private sector to do, I guess.
    Secretary Evans. Right.
    Chairman Sarbanes. But it might be worth looking at.
    I have a few more questions, then we will let the panel go.
    We had a hearing about a week ago on the Treasury 
Department's Report on the International Economic and Exchange 
Rate Policy, which you probably read about. I know the 
Secretary of the Treasury pronounces or not, as the case may 
be, on dollar policy and its exchange rates.
    I do not want to get anyone in trouble here, but let me ask 
you this question, since you survey our exporters. How much are 
you hearing from them that the exchange rate of the dollar, 
what many of them would argue is the over-valued exchange rate 
of the dollar, is impacting their ability to compete 
internationally with respect to exports? When you did your 
surveys and everything, or in the course of doing your normal 
business, how much of this do you run into?
    Secretary Evans. Mr. Chairman, we did have a question on 
that. Actually, I think our survey says it was not ranked very 
highly. We hear comments about it, of course, but I haven't 
seen the ranking specifically. So if you would like to see that 
study, I am sure we could provide you with that.
    Chairman Sarbanes. Was that the one you just did with the 
small and medium people who are not very much into the export 
business, or did that cover all of the export community?
    Secretary Evans. I am sure it was just the one we did with 
the small- and medium-size companies.
    Chairman Sarbanes. Because the NAM came before us.
    Secretary Evans. Right.
    Chairman Sarbanes. The president of the NAM stated, and I 
am now quoting him: ``Exports of U.S.-manufactured goods have 
plunged $140 billion in the last 18 months at an annual rate, 
the largest such fall in U.S. history. The export losses, 
principally due to the over-valued dollar, are a key factor 
explaining why the manufacturing sector has fared so much more 
poorly than the rest of the economy in this recession.''
    And the American Farm Bureau was also at the table 
asserting that their ability to export had been significantly 
hampered by what they asserted was the over-valuation of the 
dollar. So have any of the others run into that assertion?
    Mr. Aguirre. Mr. Chairman, I cross the threshold with 
trepidation here because I certainly believe Secretary O'Neill 
is responsible for foreign monetary policy and for U.S. export 
financing. We are not going to cross into each other's 
territory. But I think there are so many factors involved in an 
export. The dollar and the strength of the dollar is a very 
important factor.
    What we heard most about, quite frankly, in the TPCC Report 
had to do with being user-friendly and having the right 
technology that gives the right management information systems 
to the exporters so that we could work with them and provide 
better accessibility to financing.
    Quite clearly, the dollar was brought up, but I do not 
think it ranked that high. And it might have been just the 
timing of the survey why that factor did not bubble up that 
high.
    Chairman Sarbanes. Anyone else want to comment?
    Mr. Connelly. Mr. Chairman, I would just point out that in 
our experience, the issue is not so much the level of the 
exchange rate, but the volatility of the exchange rate. And I 
think that is the concern that our clients express more than 
anything else.
    Chairman Sarbanes. I have one closing question. I would 
like to ask each of you what is the single impediment that you 
encounter, that if it could be cleared away, would be most 
helpful to you in doing your work? And if you wish, you may 
take on the OMB.
    [Laughter.]
    After all, you are here and we have you here. You are 
supposed to give us very straightforward responses. Why don't I 
just go right down the list.
    Secretary Evans. I am not sure. I think that I would put a 
more positive spin on it. I have been really encouraged by what 
has been a committee that has not been particularly active 
coming together with a very strong focus on wanting to make a 
difference in providing the kind of information to our small- 
and medium-sized businesses that they need to export their 
products and services. And until I see what are our results, 
what are we accomplishing, I am not sure I am ready to talk 
about what our real impediments are yet. I think we might be in 
a better position to do that in 6 months or so. I would be glad 
to come back up and talk about it. But I think we are still 
building what will be a very effective, forceful effort in 
promoting trade. I do not see any real impediments yet. It is 
certainly not dollars, as far as I am concerned, at this stage 
of the game.
    Chairman Sarbanes. Mr. Aguirre.
    Mr. Aguirre. Senator, as you know, I am fresh to the 
Government from the private sector, so my comments are tainted 
by the perception that I had until recently.
    Chairman Sarbanes. Well, they might be enhanced, rather 
than tainted.
    [Laughter.]
    Mr. Aguirre. It could be.
    [Laughter.]
    I think that the issue is actually being addressed right 
here at TPCC. The exporting community does not appreciate the 
many resources that our Government puts in front of them. And I 
think they perceive dealing with the various agencies as a task 
and not an opportunity.
    In TPCC, what we are trying to do is do better 
coordination, better communication, and in some cases, 
eliminate duplication, as I think we are trying to do with the 
various agencies.
    So the obstacle, if there is one, is a perception obstacle. 
Clearly, there are a lot of things that we need to do to make 
ourselves more user-friendly. But if we can persuade the 
exporters that, in fact, there are so many resources here that 
we can provide for them, I think we will help the country.
    Chairman Sarbanes. I thought you might say for Congress to 
give me an Export-Import Bank authorization.
    [Laughter.]
    Mr. Aguirre. That would be more an extra focus.
    [Laughter.]
    Chairman Sarbanes. We are working on that. We are going to 
conference on it, as you know, so let's see what we can 
produce.
    Mr. Aguirre. Thank you, Mr. Chairman.
    Chairman Sarbanes. Mr. Barreto.
    Mr. Barreto. Mr. Chairman, I would also concur with my 
colleague. I am also, as many of the members here, coming from 
the private sector. When you are in the private sector and you 
are thinking about taking advantage of Government programs, and 
we talk to small businesses every day and they tell us, no, it 
is going to take too long.
    I can take a yes, I can take a no, but the maybes kill me 
and I would rather not even try.
    So, we have a major challenge to kind of go out and 
reintroduce ourselves to our clients. I oftentimes say, they do 
not really know what they do not know. There are a lot of great 
programs and services. And me, coming from the private sector 
as well, I did not even realize how much was out there until I 
got back here.
    We have to change the perception so that the people that we 
are supposed to be benefiting really think of us as their 
partner. They really think of us as an advocate, somebody that 
they can count on to respond to them.
    I think that we have some very good tools available to us. 
And I also agree with Vice Chairman Aguirre that the 
collaboration that we are going to have is going to help us 
leverage the existing resources that we have.
    One of the benefits that the SBA has is a pretty large 
network. We have offices and resource partners in every State 
in the union and many of the major cities, multiple offices. 
So, we need to leverage what we have. And working together, I 
think we will get that word out and start helping more small 
businesses.
    Thank you.
    Chairman Sarbanes. Director Askey.
    Ms. Askey. Thank you, Mr. Chairman. Since we are in the 
business of partnering with U.S. firms abroad, and we have two 
parts to our activity. One is direct support of projects and 
the other is more of a technical assistance training activity.
    With respect to U.S. businesses and firms that we are 
working with overseas, I think the impediment is two-fold. One 
is subsidized competition by our trading partners. That is 
generally why we are there, to give some additionality to the 
process. So subsidized competition by our foreign trading 
partners is key.
    Also the staying power of small- and medium-sized business 
in difficult markets. Exporting is not an easy task over time. 
And so, getting companies to focus on their sustainability in 
the export market is a task.
    On the technical assistance side and the more policy-
oriented things we do, it is generally trying to persuade the 
governments to have a stake in the outcome of the technical 
assistance. For example, on our biotechnology initiative with 
China, the important thing is getting the Chinese government to 
participate in the process of developing the technical 
assistance and understanding the United States technical 
expertise to be brought to bear. We are not just giving them 
money and saying, work on your biotechnology regime.
    So on the technical assistance side, it is basically 
getting a mesh between the foreign government policy goals and 
U.S. policy goals. But when it comes to U.S. exporters, I think 
it is subsidized competition that they face and sustainability 
in export markets.
    Chairman Sarbanes. Good.
    Mr. Connelly.
    Mr. Connelly. Well, I need to preface my remarks by saying 
we have an excellent relationship with the OMB.
    [Laughter.]
    I think I would summarize the challenge from my standpoint 
in that it is not a budgetary challenge.
    Chairman Sarbanes. I am sure everyone else would echo that 
comment.
    Mr. Connelly. Yes.
    [Laughter.]
    But we do have the need to innovate, to modernize our 
products and services, and to meet the challenges of a world 
that is becoming more complex and highly globalized.
    We have in the agency, what I have learned--I have just 
been out of the private sector for 9 or 10 months. We have 
excellent people, tremendously dedicated professionals, and 
they can do the job.
    We have to find a way to recognize how the world has 
changed, to organize to meet those challenges and to introduce 
products and services that deliver the best service to our 
clients in a way that passes muster, as it must, within the 
entire interagency process.
    Chairman Sarbanes. Thank you all very much. It has been a 
very helpful panel, and we look forward to the implementation 
of the recommendations in the Report, and also, to the various 
new initiatives that you talked about for the next report.
    The hearing stands adjourned.
    Secretary Evans. Thank you, Mr. Chairman.
    Mr. Barreto. Thank you.
    Mr. Aguirre. Thank you, Mr. Chairman.
    [Whereupon, at 12:15 p.m., the hearing was adjourned.]
    [Prepared statements and additional material supplied for 
the record follow:]

                 PREPARED STATEMENT OF DONALD L. EVANS

                 Secretary, U.S. Department of Commerce
                              May 14, 2002

    Thank you, Mr. Chairman. My colleagues and I are extremely pleased 
to have the opportunity to present to you this Administration's first 
National Export Strategy. The Report is the culmination of the best 
efforts of all of the agencies here with me today, as well as the 
Departments of State and the Treasury, USAID, and USTR. It has truly 
been a team undertaking, and we are confident that the steps we have 
laid out are grounded in what our customers want, need, and expect from 
their Government export promotion programs. We think these steps will 
make a difference in the way we serve our clients-- especially small 
businesses.
    This is very much the approach the President wants all of us in the 
Administration to take. The President, through his Government-wide 
Management Agenda, has made clear that he believes that Americans 
deserve a Government that is ``best in class'' in service and 
effectiveness and that is results-oriented.
    In the broader context of our trade agenda, this commitment to 
results translates into two things. First, it means aggressively 
opening new markets for our exporters. Second, it means having the best 
tools available to our exporters to realize sales in those markets once 
they are open.
    The first prong of the trade agenda--opening new markets--is, quite 
frankly, on hold, waiting for the Senate to give the President Trade 
Promotion Authority. The President believes this bill is overdue. 
Simply put, we are losing real trade opportunities without it. We know 
the trade agreements that TPA will let us conclude over the next 5 
years could contribute as much as $1.9 trillion to world economic 
growth. The question for the Senate is, what slice of this growing pie 
of opportunities will belong to U.S. companies? We believe the longer 
the delay on Trade Promotion Authority, the more it costs American 
farmers, business owners, and workers. We are pleased that the 
legislation appears to be moving to a vote as a carefully crafted, 
bipartisan balance. Amendments that would upset that careful balance 
would be strongly opposed by the Administration.
    Senator Sarbanes, we appreciate the opportunity to articulate here 
the second aspect of the President's strategy--expanding the base of 
exporters and providing the promotional support they need to ``fill 
in'' behind the agreements we negotiate. From the perspective of a 
small U.S. company wanting to export, new trade agreements are only 
half the battle. Agreements are meaningless to a company if it does not 
have the information, expertise, and financing it needs to get started 
exporting and to do the deals.
    All of you are aware that trade has never been more important to 
the United States and world economy. It now accounts for about a 
quarter of both the United States and world GDP and is growing at over 
twice the rate of any other sector. The goal of the 60 recommendations 
in this Report is to make sure all export-ready U.S. companies can 
participate in this growth. Small companies now account for just under 
30 percent of the value of U.S. exports; yet our survey found that 30 
percent of U.S. small companies that do not currently export would like 
to. Moreover, of those that export, two-thirds only export to one 
market. By improving customer service and providing new export 
opportunities, we want to tap the unrealized export potential of both 
large and small U.S. companies.
    These recommendations give our exporters a new strategic partner, 
and provide them with the tools they need to be globally competitive. 
We want to help those companies exporting to only one market broaden 
their horizons and make sure that capable small businesses can take 
full advantage of new market openings.
    The recommendations in this Report were the result of 7 months of 
research and interagency deliberations. As we explained last October, 
we took a management approach, starting first with our customers. The 
driving force behind all of these recommendations was to respond to 
customer needs. We talked to about 100 exporters in focus groups and 
one-on-one meetings, about half of which were smaller companies. We 
undertook a survey of more than 3,000 small and mid-sized U.S. firms. 
We asked them what works and what doesn't work. We asked them to tell 
us how to improve Government services and to tell us about other 
Government, State, and local agencies that do a great job of meeting 
their needs. We talked to both exporters and nonexporters to get at the 
question of why many small businesses choose not to export.
    From our survey and interviews with clients, we came away with a 
number of observations:

 Our clients are pleased with our products and services, but 
    want them to be even more streamlined and timely. Time is critical 
    to companies of any size. Even the smallest customers have very 
    high expectations about how quickly they get what they need.

 Our clients think Government agencies have an important role 
    to play in both trade and investment promotion. This is 
    particularly true because other governments are more strategic in 
    helping their companies get the best shot at possible opportunities 
    and providing high-level focus and coordination of small business 
    programs.

 U.S. companies want more than export assistance. They want an 
    account manager to take them from their first transaction, to their 
    first investment, through the life of a project. They want 
    Government personnel trained and skilled enough to take them 
    through the maze of Government programs, and they want the 
    Government to help generate new opportunities.

 U.S. companies want more coordinated Government service. They 
    want us to operate as if we were one company--not a collection of 
    individual agencies. They expect seamless programs with a common 
    set of standards and requirements and want coordinated client 
    management among the agencies.

 U.S. companies look to the Government first for information on 
    market opportunities and financing. The companies that do not 
    export would export if they had more information about foreign 
    market trends and trade leads.

    In addition, we took an in-depth look at the programs offered by 
our major competitors:

 We were particularly impressed by the high level of support 
    our trading partners give to small- and middle-sized firms. Here in 
    the United States, we know that these firms are a tremendous engine 
    of job growth. And when these firms are successful in international 
    markets, they can achieve even higher growth rates and pay better 
    wages here at home. Our competitors also understand the dynamism 
    and power of small business. We found that a number of our trading 
    partners have coordinated, Cabinet-level task forces dedicated to 
    getting small companies into overseas markets. Korea, for example, 
    is moving away from support for large conglomerates or chaebols, 
    and has a Presidential Commission that integrates programs and 
    budgets that help small business exporters. France, Canada, Spain, 
    and the UK also have coordinated, high-level programs to help small 
    business 
    exporters.

 Our competitors take a more active approach in generating 
    opportunities for their exporters. Many governments cultivate 
    relationships with procurement officials in emerging markets and 
    ``cherry pick'' the best projects for their exporters--presenting 
    them with shopping lists of the most lucrative projects.

 Other governments take a more holistic view toward export 
    promotion, combining their export and investment promotion 
    programs. Rather than focus strictly on 
    export sales, they focus on their firms' international 
    competitiveness.

 And we found especially in Europe, the Swedes, the French, and 
    the British have elaborate e-business strategies that have become 
    the organizing principle for their trade promotion programs. By 
    next year, the British will have all of their export promotion 
    services online. All of the trade promotion agencies will be linked 
    with each other and with all of their known exporters.

The National Export Strategy
    Our strategy, simply put, is to make sure our exporters have the 
best tools to take advantage of the commercial opportunities we 
negotiate. It boils down to three important points:

 A more active U.S. Government partner with U.S. exporters when 
    it comes to major project competitions.
 Better customer service through joint promotion, training, 
    trade finance, and information delivery.
 A Government that is working harder, through State and local 
    partnerships and trade education to make sure that potential 
    exporters know about the services 
    we provide.

Strategic Approach to Project Development
    One of the themes that came up repeatedly in our discussions was 
that companies want Government to take a more coordinated and more 
strategic approach to helping them compete internationally. This 
applies to a wide range of issues including major project development, 
a coordinated commercial response in crisis regions and advocacy 
support throughout the life of the project. Our competitors often have 
the upper hand in major project competitions well before the project is 
publically tendered. Other governments indicate that they can finance a 
particular project early on and then coordinate their response between 
the agencies responsible for on-the-ground market intelligence, 
technical assistance and financing. Ex-Im Bank, Commerce and a number 
of TPCC agencies are going to meet this challenge by working together 
to discover projects sooner, show an early likelihood of U.S. financing 
and help U.S. exporters take advantage of these opportunities. In key 
pilot countries, we will now have a coordinated, team approach to 
bringing buyers and sellers together.
    Exporters also told us they want to see the U.S. Government take a 
more active role in countering and discouraging market distorting uses 
of tied and untied aid. As a result, we have expanded the tools 
available to exporters to address tied aid, including a more aggressive 
response to Japan's use of tied and untied aid (Japan is the largest 
provider of both), a pilot program that would enable the Trade 
Development Agency to fund engineering studies that often set the 
standards and specifications for future projects, exploring the design 
of a pilot project that would provide mixed credits for specific 
developmentally sound projects, and use of the war chest to address 
instances where non-Japanese trading partners use tied aid to capture 
market share in emerging markets.

Better Customer Service
    In the area of client service, we found that U.S. firms that export 
have an increasingly sophisticated understanding of what they need to 
be successful overseas. They are aware of competing Government programs 
and have very high expectations about the quality of service that they 
get. Not surprisingly, the more experienced exporters want better 
coordination among the Government agencies; in short, they want the 
agencies to operate as if they were part of the same U.S. Government 
``company.''
    To respond to this concern, we are going to do a better job of 
promoting each 
others' programs. We are planning on training our Commercial Service 
officers so they can act as ``account managers'' that can help our 
companies with an overseas strategy, and not just an export sale. That 
means a much greater emphasis on training across agencies than ever 
before, with the goal of creating agency staff that can function as 
``one-stop-shops,'' or account managers, that can help a firm navigate 
the full array of Government export promotion programs.

Trade Finance
    Our survey told us that trade finance is still a major obstacle to 
getting small businesses into world markets. It also indicated that too 
many U.S. companies turned down sales because they had problems getting 
financial support, or limited their exports to those opportunities they 
could fund on their own. Too few small exporters are taking advantage 
of SBA and Ex-Im Bank working capital programs. While many companies 
know about these programs, they are unaware of how they work and are 
confused by the fact that there are two, apparently competing programs. 
We are going to address this by combining the marketing efforts of SBA, 

Ex-Im Bank, and the Commercial Service to make sure lenders know how 
these programs can help their clients. We also want to integrate the 
programs to the extent we can--while still preserving the benefits of 
each. In the future, we will promote one Government trade finance 
service to our customers, that can then be customized with SBA and Ex-
Im Bank features, as appropriate, depending upon the resources of the 
Bank and the needs of the client.

Information
    This came up again and again in our discussions with customers and 
was ranked in our survey as the most important service Government 
provides and businesses need. We learned that more than half of the 
exporters we surveyed use a Government source to gather information on 
potential trade opportunities, and that they want a single site where 
they can get trade leads and information about specific markets. At the 
same time, they are unaware of the full range of Government assistance 
that is currently available. In response, we are enhancing export.gov--
our one-stop web portal--so that exporters can find all of the 
Government's best information on trade leads and markets in one place, 
in real time. We will use our BuyUSA product--which links buyers and 
sellers directly--to link foreign affiliates of U.S. multinationals 
abroad with U.S. suppliers, who are often small- and 
medium-sized exporters looking for project opportunities.

Outreach, Education, and Partnering
    We can develop the best programs in the world, but if no one knows 
about them, we will not get very far. We need to do a better job of 
letting companies know what is available and make it easier for them to 
participate. Although our study found that awareness is better today 
than it was 5 years ago, we can certainly do a better job of connecting 
with business people who want to take advantage of new trade 
opportunities. We propose working more closely with State and local 
trade groups, as well as elected officials, to expand awareness and 
increase outreach. We will also be leveraging technology to offer 
simpler Internet solutions for companies looking for help.
    We will distribute packages of our export promotion services to the 
States to prevent duplication and leverage State resources. We will 
encourage joint strategy sessions on outreach and trade events. We will 
dedicate more resources to training our State partners in TPCC 
programs. We will develop joint TPCC agency marketing materials for our 
State and local partners. We will do a better job of leveraging the 
information provided by elected officials, who are often the first 
point of contact for companies seeking Government assistance. And we 
plan to expand education for new-to-export firms and develop a strategy 
to use trading companies as multipliers of our services.
    To sum up, we are placing a much greater focus on what our 
customers need; we are taking a comprehensive approach to making our 
companies competitive in the world market; we are actively developing 
opportunities for our companies; we are building programmatic bridges 
across the agencies; and we are using training and joint promotional 
efforts to improve coordination and our effectiveness across the 
agencies.
    Senator, while in many ways I believe we have gone farther than 
ever before with the TPCC, this is really just the starting point of 
our work. Some of these recommendations can be implemented immediately; 
but some will take more time and require a formal benchmarking effort--
such as training, information, and the speed with which we deliver our 
services. We also expect to use this Report as a tool to fit our 
resources and programs to key markets where we are negotiating 
bilateral and regional agreements.
    In the meantime, I want to make sure we are held accountable for 
what we have said we are going to do. Whether it is the number of new 
project opportunities we generate from these recommendations, or the 
number of small business working capital loans we undertake, I think it 
is important Congress knows that we expect to measure our progress. We 
will report how far we have come next year.
    Again, Senator, I appreciate your great interest in the importance 
of strengthening our trade promotion programs. I intend to continue to 
use the TPCC not only to coordinate our future efforts, but also to 
generate new initiatives that will help keep America the most 
competitive exporting Nation in the world.

                               ----------
                 PREPARED STATEMENT OF EDUARDO AGUIRRE

                 Vice Chairman and First Vice President
                Export-Import Bank of the United States

                              May 14, 2002

    Thank you for the opportunity to appear before you today. As Vice 
Chairman of the Export-Import Bank, I also serve as Vice Chairman of 
the Trade Promotion 
Coordinating Committee (TPCC), the body designated by Congress to 
coordinate 
interagency efforts on trade promotion.
    Working in partnership with business and labor, we support exports 
in order to create and sustain jobs here in the United States. That 
means the Bank must be in tune with the Administration's trade and 
foreign policy objectives, as well as the needs of U.S. companies to 
compete abroad.
    I appreciate the efforts of all the agencies represented here 
today, in addition to others both inside and outside the Government, 
who contributed time and energy in pursuit of our common goal--to make 
U.S. trade promotion efforts second to none by being effective, 
coordinated, and user-friendly.
    In keeping with the Administraton's firm commitment to free and 
fair trade, the Export-Import Bank (Ex-Im Bank) of the United States 
assists U.S. exporters in competing fairly and successfully in the 
world marketplace. Participation in foreign trade is a critical 
component of the Nation's economy. In 2001, exports represented about 
10 percent of the Nation's GDP and supported approximately 12 million 
jobs (Department of Commerce, U.S. Trade Facts), including one-in-five 
manufacturing jobs. Moreover, medium- and small-sized companies 
represented 97 percent of U.S. exporters. These companies are an 
important source of U.S. employment. Moreover, as jobs in the export 
sector on average pay wages that are 13 to 18 percent higher than the 
national average of nonexport jobs (Department of Commerce, U.S. Trade 
Facts).
    Market imperfections and trade distorting subsidies frustrate U.S. 
exporters' ability to compete and win business in new markets. The Ex-
Im mission is to meet both of these challenges head-on. When foreign 
governments subsidize the financing of products and services sold by 
their companies, we step in to level the playing field. These unfair 
practices distort free trade, and we are committed to providing the 
U.S. exporters a competitive environment where the market drives the 
process; in other words, the best product at the best price wins the 
sale, and not Government-subsidized financing. Eventually, the hope and 
the efforts are to eliminate any Government trade distorting subsidies.
    Capital always moves to its best risk-adjusted rate of return. 
Especially in dynamic emerging markets, capital tends to be jittery 
even during the best of times. When these markets begin to slow or 
experience difficulty, capital flight is swift and can be crippling. 
Sometimes, especially in the short-term, this phenomenon is counter to 
the Bank's broader, long-term financing strategy. These sharp market 
movements most affect small companies. South Korea's economic turmoil 
during the Asian Financial Crisis was a good example of this 
phenomenon. When the private market collapsed in 1997-1998, Ex-Im Bank 
stepped up to the plate and supported almost $2 billion dollars in 
exports during that critical period. The Bank did not lose taxpayer 
dollars, and, in fact, Ex-Im Bank played a role in keeping trade 
relations and businesses open for U.S. exports. Now that the economy 
has stabilized in South Korea, the private sector has reentered the 
market, and the Bank has appropriately scaled back its support. What 
was Ex-Im Bank's role? The Bank stepped into the breach and covered 
appropriate short-term risk. We to some degree insulated against 
potential financial contagion from that crisis.
    In carrying out its mission in 2001, Ex-Im Bank supported 
approximately 4 percent of all U.S. exports to emerging markets and 6 
percent of all U.S. capital goods exports to emerging markets. One of 
Ex-Im Bank's missions in this changed world is to take the lead in the 
U.S. commercial effort to penetrate the risky emerging 
markets.
    The Bank also steps up in times of crisis--as Ex-Im Bank did during 
the 1997-1998 Asian financial crisis, and as the Bank did this past 
fall through supporting the airline industry in the wake of the 
September 11 attacks. In this case, Ex-Im Bank has decided not to 
exercise its requirement that airlines have third-party war risk 
insurance coverage, in coordination with the U.S. Government and other 
nations, to keep the airlines of the world flying, until such time as 
the airline industry is able to secure a solution that will reinstate 
liability insurance. The process was successful, and international 
commerce continued without any hitches, as aircraft were not grounded. 
In so doing, not only did the Bank increase U.S. exports, but also 
fostered stability and economic growth at home and abroad.
    Last year alone, Ex-Im Bank supported $12.5 billion worth of U.S. 
exports. Of all Bank transactions, 90 percent were in direct support of 
small businesses, representing $1.65 billion or 18 percent of the U.S. 
exports by dollar volume supported. In fact, 383 new small businesses 
utilized the Bank for the first time last year to support their 
exports. Ex-Im Bank is proud of its record and intends to continue 
these efforts.
    At the same time, the Export-Import Bank has several other 
mandates, as stated in our charter:

Ex-Im Bank Acts
    Ex-Im Bank promotes private sector financing. Where there is not a 
private sector alternative and there is a creditworthy transaction, the 
Ex-Im Bank steps up and ensures that U.S. exporters can compete and are 
not at a disadvantage. In short, Ex-Im Bank's role is to provide 
official financing support that levels the playing field for U.S. 
exporters until agreements can be reached to eliminate market-
distorting practices.
    Ex-Im Bank does not perform this vital job in a vacuum. The Bank 
works closely with other U.S. Government agencies to capture possible 
efficiencies and to protect the interests of the taxpayer. The TPCC 
plays a critical role, as illustrated by the recommendations in the 
National Export Strategy Report.
    Allow me to briefly review some of the prior TPCC initiatives 
involving Ex-Im Bank and our sister trade agencies and what the Ex-Im 
Bank is already doing to address some of these key needs.

 The Bank maintains eight regional offices across the country. 
    Six of these offices are located with the U.S. Export Assistance 
    Centers (USEAC's) with the Department of Commerce (DOC) and the 
    Small Business Administration (SBA). Co-location allows our 
    respective staffs to co-market, pursue, and share trade leads and 
    market information. The Bank has placed offices in strategic 
    locations (Miami, FL, Washington, DC, New York, NY, Chicago, IL, 
    Houston, TX, and three in California). The States in which these 
    offices are located are home to approximately 65 percent of the 
    exporters in the United States. Where we are not co-located, Ex-Im 
    Bank employees cross-train with DOC and SBA employees in the 
    remaining USEAC's to ensure that DOC and SBA professionals are kept 
    up-to-date on new initiatives at the Bank.

 For the past 2 years, the Ex-Im Bank has delivered joint 
    direct mail with the Department of Commerce's Foreign Commercial 
    Service and the Census Bureau's Foreign Trade Statistics Division. 
    This year Ex-Im Bank will deliver close to 50,000 pieces of direct 
    mail. Not only is this partnered approach cost-effective, (it 
    reduces the Bank's costs by two-thirds) it gives the recipient a 
    comprehensive view of the menu of services offered by our 
    respective institutions. Ex-Im Bank's direct mail initiative has 
    been a huge success.

 Educational seminars have long been a primary approach of many 
    of the trade agencies. So what is new? First, the Ex-Im Bank is 
    doing more seminars. Second, the Bank has taken them outside of 
    Washington and delivers one-day mini-courses. Third, Ex-Im Bank 
    almost always either partners with the Department of Commerce, a 
    City/State Partner, or one of Ex-Im Bank's sister trade agencies. 
    For example, this spring OPIC participated in a well-received 
    exporter seminar in Indianapolis, and 3 weeks ago Ex-Im Bank's 
    business development team co-presented with the Department of 
    Commerce in Lubbock, Texas. This year Ex-Im Bank executed over 50 
    of these type seminars, all with some form of sister agency 
    involvement.

 Trade Associations: Attending trade association shows where 
    hundreds, sometimes thousands, of exporters and buyers are amassed 
    is a very cost-effective outreach tactic for Ex-Im Bank. Partnering 
    with DOC and the Census Bureau makes Ex-Im Bank's approach even 
    more effective. The Bank will continue this successful enterprise 
    with DOC and the Census Bureau and expand upon it.

 Ex-Im's Annual Conference: Just 2 weeks ago, the Bank had 
    1,500 participants in Washington, DC, to learn about the Bank and 
    network. Participants included exporters, bankers, brokers, foreign 
    buyers, U.S. Government officials, and foreign government 
    officials.

National Export Report
    Turning to the National Export Report, these recommendations were 
developed in close coordination among TPCC agencies and with 
significant input from the U.S. export community. The TPCC listened to 
the concerns of our customers--the U.S. exporters. The TPCC listened to 
those that distribute and market our services, trade finance lenders. 
From this dialogue, the TPCC developed the recommendations continued in 
the Report.
    The highlights of the recommendations that pertain to the trade 
finance arena 
include:

    (1) Maximize customer service orientation by employing technology 
to create processing efficiencies and to leverage scarce human 
resources through automation.

 Many of you on this Committee are aware of Ex-Im Bank's 
    automation plans. The TPCC recognized we could never substantially 
    expand our support, especially for small business exporters unless 
    and until we developed automated tools that made our processes 
    faster. We have several upgraded programs currently in place that 
    will assist us with providing faster turn around time and more up 
    to date information and statistics.

 Earlier I mentioned the Ex-Im Bank's direct mail initiatives. 
    The Bank's direct mail, which also includes periodic email contact, 
    is all initiated and managed from customer management tools. 
    Inquiries from direct mail are sent electronically to the Bank's 
    eight field offices for prompt follow-up. When Ex-Im Bank started 
    direct mail 2 years ago, the Bank used existing database software 
    and low-cost customer management software. Ex-Im Bank is a victim 
    of its own success. The Bank has now outgrown its own database and 
    software system. The database the Bank uses was designed for 50,000 
    records; Ex-Im now has over 300,000 records. We knew we were doing 
    right when private sector financial institutions started showing up 
    at Ex-Im's doorstep asking us how the Bank markets its financing 
    products; for example, in November 2001 GMAC sent representatives 
    from their organization to identify how we conduct our direct mail 
    and how we target trade shows. It is not often that the private 
    sector asks the Government how to market.

    (2) Develop a multipronged approach to address the trade-distorting 
effect of commercially-driven tied aid, the means by which other 
countries provide partial grants and/or concessional loans either alone 
or combined with export credits and linked to procurement from the 
donor country, and to add tools to the U.S. cache by combining the 
resources and the expertise of one or more TPCC agencies to address the 
problem.

 Work with Treasury negotiators to use the Tied Aid Credit Fund 
    (TACF) resources to advance the U.S. position in the Organization 
    for Economic Cooperation and Development (OECD) to establish 
    disciplines on the use of untied aid. The goal here is to ensure 
    that untied aid financing is truly untied, and not defacto tied to 
    procurement from donor country suppliers. Thus, the Bank would 
    utilize the TACF to provide a negative incentive that would bring 
    other untied aid donor ECA's to negotiate greater discipline in 
    their use of those funds. For example, as cited in the new TPCC 
    Report, the OECD recently notified Japan that a power project they 
    wanted to support in China was not eligible for Tied Aid because it 
    was deemed commercially viable. Within 10 days, Japan converted its 
    support from Tied to Untied Aid, thereby raising the question: Did 
    the Japanese really change the financing arrangement, or just 
    change what policy they state it falls under?

 Begin a pilot program where the Trade Development Agency would 
    selectively finance FEED (front-end engineering and design) studies 
    until there are multilateral rules that prevent governments from 
    using these studies to promote exports.

 Ex-Im Bank, Treasury, USAID, TDA, and the Commerce Department 
    will work collaboratively to design creative financing arrangements 
    for developmentally sound projects for which commercial financing 
    is not available, achieving Administration trade and aid goals.

 Use the Tied Aid Credit Fund to defend U.S. exporters from 
    patterns of use of tied aid that effectively (whether intentionally 
    or not) represent a threat to long-run U.S. market share or access 
    to emerging markets.

    (3) In response to concerns raised by the small business community, 
better integrate Ex-Im Bank's and SBA's Working Capital Guarantee 
Programs, where appropriate. Toward this end, last week Administrator 
Barreto of the SBA and I signed an agreement where the two agencies 
would begin to coordinate marketing efforts. We have also directed our 
respective staff to work together to identify additional opportunities 
to integrate these programs.

    (4) Commission a study to assess the impact of market window 
activity on U.S. exporter competitiveness, which is also a topic of 
interest in the Bank's reauthorization bill.

    (5) Examine the unique financing needs of the services sector and 
develop programs and procedures that address those needs.

    Since October, when the TPCC agencies collectively last testified 
before this Committee, we have been working hard to identify innovative 
ways to serve Ex-Im Bank's customers--the Nation's exporters. And now, 
I look forward to working with you and the other TPCC agencies in 
implementing these critical steps to improve U.S. exporter 
competitiveness.
    Mr. Chairman, throughout my 34 years in banking, I have always 
tried to make decisions on what is right for the customer. In the 
private sector, it was a matter of survival--aligning your organization 
around your customers needs, expanding your services through strategic 
alliances--these were and still are one of the best ways for companies 
to expand market share. In the public sector, the principles of the 
TPCC are fundamentally issues of efficiency and providing our exporters 
the best unified and simplified Government support possible. Especially 
in these tough times, our exporters need the best their Government can 
offer. The best will only be realized collective and coordinated 
actions. While the TPCC has made progress in the past few years, we 
recognize we have more to do in several areas. The TPCC is committed to 
this effort. Thank you for your leadership on these issues, and I am 
now prepared to answer any questions you may have.
    Thank you.

                               ----------

                PREPARED STATEMENT OF HECTOR V. BARRETO

              Administrator, Small Business Administration
                              May 14, 2002

    Mr. Chairman, Ranking Member, and distinguished Members, thank you 
for inviting me to testify on the Trade Promotion Coordinating 
Committee's (TPCC) National Export Strategy and the role that the U.S. 
Small Business Administration (SBA) plays in the Federal Government's 
export promotion strategy.
    I would first like to recognize the outstanding leadership of 
Secretary Evans. The SBA has been working closely with the Department 
of Commerce, Export-Import Bank of the United States (Ex-Im Bank), the 
Overseas Private Investment Corporation (OPIC), and other TPCC agencies 
in developing recommendations for the National Export Strategy that 
incorporate small business issues in order to grow them to be the most 
competitive in the world.
    Small businesses create two-thirds of new U.S. jobs, are 
responsible for much of our economy's innovation and generate over half 
of our private gross domestic product. But while most--66 percent--of 
U.S. exporters have fewer than 20 employees, fewer than 1 percent of 
our small businesses export. Proportionately far more small businesses 
export in other countries, where governments dedicate far more 
resources to export promotion, but more importantly take a more 
strategic and holistic approach. Most of our trading partners offer 
more comprehensive support for small companies--providing assistance 
from beginning to end of the export process, and combining their trade 
and investment services.
    The TPCC conducted a formal survey of 3,000 U.S. small- and medium-
sized businesses to determine what was needed for them to be more 
competitive in the global marketplace. The survey found that small 
companies face more hurdles exporting than large companies. 
Specifically, small businesses need good information and expertise in a 
way that does not require large resources of time. Small businesses 
also need capital. SBA is a resource for these needs.
    The National Export Strategy presented by the TPCC recommends ``a 
Government that provides better customer service through joint 
promotion, training, trade finance, and information delivery.'' In 
order to meet the need to create a ``one-stop-shop'' approach, we have 
enhanced our working relationships with our partners in the following 
ways:
    SBA and the Ex-Im Bank have entered into a ``Small Business 
Initiative'' Memorandum of Cooperation. The first phase of this 
initiative will be to leverage marketing resources across SBA and Ex-Im 
Bank to raise awareness among lenders and exporters. Another part of 
the initiative is to make our financing products more compatible, 
flexible and streamlined, so that one application form can be used for 
either agency's loans.
    SBA and Commerce are working more closely to coordinate marketing 
and outreach efforts to the U.S. small business community in the 
delivery of both technical and financial assistance programs. The SBA's 
and Commerce's national network of service providers will collaborate 
and work in partnership to provide significantly improved counseling, 
training and financial assistance activities while also forming a more 
efficient and transparent delivery system for these services. We are 
already making great strides in cross-training. For example, in recent 
months, the SBA has participated in Commerce's annual regional meetings 
of Senior Commercial Officers and have begun the process of training 
them on SBA's International Trade Loan 
Programs.
    Another example of our efforts in leveraging our partnerships to 
further promote export opportunities for U.S. small business will be 
the Small Business Initiative between SBA and OPIC that will focus on 
cross-training and outreach to provide the necessary tools and products 
needed to invest internationally. We look forward to formalizing this 
opportunity in the very near future.
    After reviewing our existing International Trade loan programs and 
the recommendations from the National Export Strategy, SBA increased 
the Export Express loan guaranty to a new maximum of $250,000. The SBA 
Export Express loan guaranty program can be used to finance small 
businesses' export development costs such as participation in a foreign 
trade show or translation of product catalogs, as well as finance 
actual export orders.
    The Export Working Capital Program (EWCP) is another of SBA's 
International Trade loan programs. It allows SBA to guaranty up to $1 
million of a lender's working capital loan to eligible small businesses 
for export purposes. A small business that has prospered with SBA's 
EWCP assistance is M.A.S. Exports Ltd. of Savannah, Georgia. M.A.S. 
Exports is a supplier of auto parts and lubricants. Clifford King, 
President and Owner, decided 3 years ago to use an SBA export loan to 
help finance additional business to his offshore customers primarily in 
the Caribbean and Latin America. King's company, through a $250,000 
revolving line of credit for export shipments under the SBA's EWCP, 
reached annual sales of $970,000 in 2001.
    SBA is also a partner in many of the President's E-Gov initiatives 
to make information available online 24/7. We are currently working 
together with Commerce to strengthen our links with export.gov and also 
looking at enhancing SBA's International Trade website to allow the 
customer to access information at the time and place of his/her 
convenience.
    SBA currently provides information to small businesses through our 
Export Trade Assistance Partnership (E-TAP). E-TAP is a training 
program offered at each of the 19 U.S. Export Assistance Centers 
(USEAC's) and some Small Business Development Centers (SBDC's), which 
combined with ongoing individual business counseling, offers effective 
and customized assistance to new-to-export companies looking to enter 
the global marketplace. We are looking at ways of increasing the number 
of E-TAP programs being offered by encouraging our resource partners to 
implement the program.
    SBA is fully committed to this National Export Strategy. We believe 
that the recommendations in this Report will help to streamline and 
improve Federal export assistance programs and benefit U.S. small 
businesses so that they will continue to be the most competitive 
companies in the world.
    I look forward to SBA's ongoing contribution to the TPCC and our 
commitment to evaluate and better coordinate our programs. I would be 
happy to answer any questions you may have. Thank you.

                               ----------

                 PREPARED STATEMENT OF THELMA J. ASKEY

              Director, U.S. Trade and Development Agency
                              May 14, 2002

    Thank you, Chairman Sarbanes, Senator Gramm, and Members of the 
Committee for providing this opportunity for TDA and the other members 
of the TPCC to come before you today.
    The last time we were before you was on October 2 of last year, 
shortly after the attacks of September 11. Now, 6 months later, I think 
it is even more clear that trade promotion efforts, such as those we 
are discussing here today, are vital to United States--and global--
economic and political security. In particular, our ability to foster 
development in and trade with the Front Line States, with countries in 
South and South-East Asia, and with struggling markets in Africa, will 
go a long way toward promoting international stability.
    To begin, let me first express my appreciation to Secretary Evans, 
Under Secretary Aldonas, and their staffs for the tremendous amount of 
work that they have put into the TPCC process in the past 7 months. 
They are to be commended for their proactive efforts to discern the 
needs of the exporting community and to develop specific strategies to 
respond to those needs. TDA has been an active participant in those 
efforts and we look forward to continuing this role as we face the 
future challenges and implement the many ideas contained in the Report.
    The Report contains a number of specific proposals pertaining to 
TDA, and I will outline them in a moment, but since TDA does not 
regularly appear before this Committee, I would like to quickly take a 
moment to reiterate TDA's mission and activities.
    As directed by statute, TDA promotes American private sector 
participation in developing and middle-income countries, with special 
emphasis on economic sectors that represent significant U.S. export 
potential. TDA is a small, nimble agency that partners with U.S. 
companies and assists them in building mutually beneficial 
relationships with overseas projects sponsors and Government officials. 
The result is 
increased U.S. exports and jobs, as well as the completion of high-
quality, successful projects, and other solutions that address priority 
developmental needs in host 
countries.
    Thus, the TDA's goals are two-fold: Helping American businesses 
export their products, and thereby creating jobs, while simultaneously 
promoting commercially viable economic growth in developing and middle-
income countries. TDA's dual trade and development mission allows it to 
serve as an essential catalyst for priority development around the 
globe through support of key infrastructure projects and 
capacity building initiatives.
    TDA's operations put it at the forefront of U.S. foreign and trade 
policy, where it works in concert with a wide array of other U.S. 
Government agencies, such as the Departments of State, Commerce, 
Treasury, Agriculture, Energy, and Transportation, the U.S. Trade 
Representative, the Export-Import Bank of the United States, and the 
Overseas Private Investment Corporation. Thus, the TDA works together 
closely with the other TPCC agencies on a regular basis, in the normal 
course of its business.
    TDA's role is to ensure that there are early successful 
demonstrations that U.S. policies result in viable and in mutually 
beneficial economic growth. This demonstration of U.S. support has the 
direct effect of increasing exports of U.S. goods, services, 
technology, and expertise. TDA accomplishes its mission using a number 
of early project planning tools, including the funding of various forms 
of technical assistance, feasibility studies, detailed design and 
engineering, orientation visits, specialized training grants, and 
conferences. TDA utilizes its tools creatively, tailoring its flexible 
resources to fit the particular needs of specific opportunities. The 
agency thereby achieves two results--assisting U.S. businesses as they 
compete for infrastructure and other development projects in highly 
competitive, emerging markets, and offering tailored solutions to 
foreign governments in need of effective 
commercial-sector development assistance.
    Turning to the TPCC Report, there are a number of recommendations 
that involve TDA. Since my colleagues have already identified many of 
them, I will simply highlight a few key recommendations.
    First of all, we will continue to focus on developing coordinated 
strategies in crisis regions. For example, the TDA has been working 
closely with OPIC in developing potential projects in Afghanistan, 
particularly in the telecom sector. In fact, the TDA is already 
providing funding for an advisor to the communications ministry, to 
assist them with evaluating proposals for the sector. This work is also 
being coordinated with the State Department's Office of International 
Communications and Information Policy and with USAID. We also have been 
working closely with Commerce and the FAA in developing a technical 
assistance program for the aviation sector in Afghanistan that will 
support U.S. commercial interests. Similarly, we have worked with Ex-Im 
Bank in identifying projects in Uzbekistan that can be supported by TDA 
at the feasibility study stage and later by Ex-Im Bank guarantees. We 
will continue to work with other TPCC agencies to develop coordinated 
strategies in Afghanistan and other crisis areas.
    In addition, as recommended by the exporting community, TDA will 
explore opportunities to fund front-end engineering and design studies, 
which are commonly referred to as FEED studies. Other countries 
sometimes fund such studies as part of their aggressive efforts to win 
large development projects, and TDA will initiate a pilot program to 
support U.S. companies who are confronted with this type of 
competition.
    TDA will continue working with other TPCC agencies on designing a 
pilot project to support capital projects in traditionally commercially 
nonviable sectors, such as the environment, renewable energy, health 
care, and water. TDA is active in all of these sectors, and will 
coordinate with the other TPCC agencies to further expand opportunities 
for U.S. businesses.
    TDA also looks forward to continuing its efforts in the area of 
biotechnology. We continue to work with USDA, USTR and the Department 
of State to support public-private partnerships that help promote sound 
regulatory environments overseas for American biotech products. These 
efforts are crucial for ensuring that our trading partners continue to 
allow the import of American pharmaceutical and agricultural products.
    Additionally, TDA will continue to develop strategies for 
supporting efforts in the service sector, such as in insurance, 
banking/finance, tourism and e-commerce. For example, TDA has been 
supporting feasibility studies and technical assistance for projects 
around the world involving e-commerce. Two weeks ago, the TDA signed a 
grant with Sinopec, China's leading petroleum and petrochemical 
company, for a feasibility study to help develop an e-trade platform, 
putting all of the company's procurement activities online. The study 
would show Sinopec how to manage and finance its e-procurement 
investments, as well as how to prepare its management for the 
organizational requirements demanded by the new system's 
implementation. Not only will this lead to a potential of $23 million 
in direct U.S. exports associated with setting up the system, but will 
also make their procurement process more efficient and transparent, 
further increasing the likelihood that U.S. companies will be 
successful in doing business with Sinopec in the future.
    The TPCC Report identifies exporters' desire that the trade 
agencies provide better access to information and to streamline data 
collection, such as with the application process. TDA is currently 
revamping its computer system, moving to a web-based system that will 
both allow our staff to work with data more efficiently and provide 
better access for U.S. companies to TDA information and activities. We 
are scheduled to have this system operational later this year.
    In sum, the TDA will continue to work closely with the TPCC and its 
member agencies in making sure that U.S. policy objectives are 
supported by concrete results, and that U.S. companies have the support 
they need as they operate around the world. This obviously is of 
benefit to the U.S. economy, as it supports exports and creates U.S. 
jobs. But equally importantly, the dissemination of U.S. goods, 
technology, services and business practices around the world represents 
a cost-effective, market-based means of effectuating the President's 
strategy of supporting economic growth and development in developing 
countries.
    Again, I appreciate the opportunity to again appear before you and 
look forward to answering any questions you may have.

                               ----------
                  PREPARED STATEMENT OF ROSS CONNELLY

                        Executive Vice President
                Overseas Private Investment Corporation
                              May 14, 2002

    Mr. Chairman and Members of the Committee, I am pleased and honored 
to be here today on behalf of Dr. Peter Watson, OPIC's President and 
CEO. Dr. Watson regrets he could not be here in person due to 
previously scheduled travel to Africa as part of OPIC's special 
initiative to spur development and promote investment in sub-Saharan 
Africa.
    I want to thank you, Mr. Chairman and Members of the Committee, for 
the consistent leadership and support you have provided OPIC and its 
sister agencies in the Trade Promotion Coordinating Committee (TPCC). 
Given our commitment to the development of a unified and successful 
U.S. trade program, I have every confidence that the TPCC Report, and 
our ongoing efforts to execute its recommendations, will have the 
desired effect: To enable U.S. companies to better compete for access 
to existing and emerging markets, to the benefit of American investors 
and exporters.
    Toward that end, I want to reinforce the Report's recognition of 
the invaluable contributions of late Export-Import Bank Chairman John 
E. Robson to our cooperative endeavor. John's dedication to excellence 
should serve as both a foundation and a beacon to the efforts of the 
TPCC agencies.
    I also wish to express OPIC's appreciation for the leadership of 
Secretary of Commerce Don Evans, whose efforts and vision have been key 
in marshaling the collective resources of our agencies for TPCC's 
worthy mandate.
    Mr. Chairman, in his introductory letter to the TPCC Report, 
President Bush makes clear the central goal of his unified U.S. trade 
policy: Providing American companies the information, expertise, and 
financing they need to take full advantage of the opportunities which 
exist in international markets. The President 
expects that the TPCC agencies and departments will achieve this goal 
by providing customer service that is responsive, streamlined, and 
results-oriented. While the 
Report contains many specific recommendations, they are all in service 
of a single 
objective: Providing the investors and exporters ``with the tools they 
need to compete.'' OPIC is committed to working with our sister 
agencies to meet this worthy objective.
    Over the agency's 31-year history, OPIC has promoted sustainable 
development and supported $138 billion worth of investment in 3,000 
projects from Algeria to Zimbabwe. These same projects have generated 
$64 billion in U.S. exports and 
created nearly 250,000 U.S. jobs. The activities of these projects are 
as diverse as the countries that host them. Over its history, OPIC has 
built up reserves of over $4 billion, and as you know, accomplishes its 
mission at no net cost to American taxpayers.
    In reiterating OPIC's commitment to the goals contained in the TPCC 
Report, I want to share with you today specific steps OPIC has taken to 
implement the recommendations of the Report, and to outline OPIC's 
future course of action to that end. Taken as a whole, these actions 
represent demonstrable progress toward better coordination between OPIC 
and its sister agencies; improved customer service; and more aggressive 
outreach to the American business community. In all these efforts, OPIC 
has striven in particular to improve small- and medium-sized 
businesses' access to international markets.
    Improved coordination among TPCC agencies is a priority of the 
Report, with the expectation that this would enable the agencies to 
identify investment opportunities more quickly. As the Report points 
out, OPIC has already been working in tandem with our colleagues from 
the Export-Import Bank (Ex-Im) and the Trade and Development Agency 
(TDA) on joint initiatives. These include efforts in Indonesia, and 
more recently in Pakistan and Afghanistan.
New OPIC Small Business Emphasis
    As another example of improved coordination and cooperation, I am 
also pleased to report that one of OPIC's key priorities under the 
Presidency of Peter Watson is to establish an innovative framework 
agreement between OPIC and the Small Business Administration (SBA). 
This important cooperative relationship will provide a new dimension 
for American small businesses currently working with the SBA by 
providing a vehicle to seamlessly connect interested companies with the 
tools and products needed to invest internationally.
    The effect of the OPIC/SBA Small Business Initiative will be to 
leverage, through cross-training and outreach, the relative strengths 
of the two TPCC agencies, in order to provide U.S. small businesses 
with the expertise and financial wherewithal necessary to make 
investments in international markets. We hope to formalize this 
arrangement in the near future.
    In the same spirit as our SBA cooperation, OPIC will also seek a 
new relationship with the U.S. Commercial Service that will establish a 
training program by which Commercial Service officers will be able to 
explain OPIC products and services to investors already familiar with 
international operations through existing relationships with the 
Commercial Service.
    Establishing improved customer service is another goal of the TPCC 
Report and an OPIC priority. OPIC's management and staff are committed 
to increasing responsiveness to and streamlining business processes.
    Minimizing the red tape and providing responsive service to those 
who have an interest in the agency's products is one of the critical 
links in meeting OPIC's development. Towards this end, OPIC will:

 Be Responsive to the Needs of Clients. Through customer 
    surveys and hosting annual client conferences, OPIC will explore 
    new ways to improve communications with its clients and 
    stakeholders, both in formal and informal contexts.

 Streamline Application Processes. One of the most effective 
    ways that OPIC can improve its ability to leverage investment is by 
    eliminating bureaucratic procedures. By streamlining its paperwork 
    requirements and adopting electronic processes, OPIC will be better 
    able to serve American businesses--both large and small--that 
    cannot afford a long and expensive application process that is not 
    geared to the faster pace of decisionmaking that is required today.

 Measure Results. OPIC will develop and implement measurements 
    that assess results and outputs, as opposed to inputs, thereby 
    offering a more effective way to gauge our progress in serving the 
    taxpayer.

    OPIC is committed to servicing our customers as effectively and 
efficiently as possible. Indeed, the work of the TPCC will complement 
the ongoing efforts that OPIC itself has embarked upon in assessing its 
programs, refocusing our efforts toward mobilizing capital where but 
for OPIC there would be no private investment, and in streamlining our 
operations.

Refocus on Developmental Mission
    Our objective since coming to OPIC has been to align our products 
and services in a manner that supports OPIC's statutorily-mandated 
mission, while also recognizing a robust and growing private market 
that has developed since OPIC's founding. As such, we have concentrated 
on, among other areas: Refocusing OPIC on its core, developmental 
mission; rededicating our commitment to small business; and ensuring 
that OPIC's products are complementary, not competitive, with the 
private sector. Each of these reforms will also contribute importantly 
to meeting the goals of the TPCC Report.
    We are working actively to strengthen OPIC's consciousness of its 
historical developmental mission. We look to assess the investments 
that OPIC ultimately supports by more than simple dollar flows; that 
is, to critically examine and benchmark the added value of a particular 
investment to the host country, or as we say, to assess the 
additionality the project represents.
    Our goal is to ensure that OPIC's participation ``adds value'' by 
measuring the extent to which there is a market failure, the degree to 
which OPIC can leverage its resources for a broader economic impact, 
and the extent to which the project in question contributes to the 
overall economic development of the host country.
    Our ability to refocus on the developmental nature of our projects 
is made possible in part by the growth and success of private market 
financing and insurance mechanisms. This growth allows OPIC, with its 
unique strengths as a Government agency, to complement the private 
markets by working in countries in which the private sector would 
otherwise not participate. Indeed, OPIC's role is to do things that the 
private market will not, such as offering more tolerance for higher 
risk countries or projects, longer tenure, or larger per project 
capacity, which will help fulfill our development mandate, but to do so 
by accepting only prudent financial risk, as OPIC has consistently 
practiced over its history.
    The TPCC Report also calls for member agencies to formalize 
cooperation in pilot investment countries, such as Mexico, South 
Africa, Brazil, and Turkey. I am pleased to report that OPIC has been 
active in each of those countries, and looks forward to working with 
our sister agencies as part of a unified trade program.
    The TPCC Report notes that U.S. exporters wanted a coordinated 
response to the crisis regions that would enable them to take advantage 
of emerging commercial opportunities. Among TPCC agencies, OPIC is uniquely positioned to provide such coordination.

Special Foreign Policy Initiatives
    Since the events of September 11, OPIC has announced a series of 
initiatives in support of the frontline states in the international war 
against terrorism, the cumulative effect of which is to demonstrate to 
potential U.S. investors the opportunities that exist in countries 
rebuilding from strife.
    Last October, OPIC announced an initiative for Pakistan, which 
included the extension of a $300 million special line of credit for 
U.S. companies interested in investing in Pakistan.
    As part of the Bush Administration's commitment to the economic 
reconstruction of post-Taliban Afghanistan, OPIC announced in January 
that it would establish an initial $50 million line of credit to 
support U.S. investment in that country. OPIC has also encouraged U.S. 
investment in the neighboring states of Uzbekistan and Kazakhstan.
    We have made significant progress in each of these areas, and 
expect that within a reasonable period of time, we can fulfill the 
commitments we have made.
    Before closing, I want to note that the TPCC Report pays special 
attention to the needs of U.S. small- and medium-sized enterprises 
(SME's). Despite its small staff, OPIC has done remarkably well in 
reaching out to small- and medium-sized businesses that constitute a 
growing percentage of project participants. Of the 37 new insurance and 
finance projects that OPIC supported in fiscal year 2001, approximately 
57 percent (21 projects) involved American small businesses. In 
addition, thousands of SME's participate as suppliers to OPIC-supported 
projects. By comparison, 40 percent of all projects that OPIC supported 
in fiscal year 2000 involved U.S. small businesses.
    Data on the specific U.S. companies that will provide goods and 
services to OPIC-assisted projects for the 7 fiscal years 1994 through 
2000 show the specific U.S. suppliers for $11.4 billion in expected 
procurement for OPIC-assisted projects. These U.S. companies are 
located in 46 States. It is estimated that approximately 62 percent of 
these identified suppliers to OPIC-backed projects are U.S. small 
businesses.
    OPIC's focus is increasingly on those countries where the needs are 
greatest and on the U.S. small and medium businesses that otherwise 
would hesitate to expand overseas without OPIC financing or insurance. 
Fortuitously, these are the same markets where our Nation's trade 
assistance programs as implemented by fellow members of the TPCC can 
also have significant impact. It is the developing country markets that 
will continue to grow the fastest and it is those same markets where 
our exports are in demand.
    Small businesses often do not meet the profile that private sector 
financial institutions and insurers are looking for in their overseas 
clients. This is where the development goals of the U.S. Government, 
the needs of small business, and OPIC's programs intersect. With OPIC's 
assistance, the proven dynamism of U.S. small businesses can be 
mobilized to produce viable projects in the developing world.

Conclusion
    In conclusion, the measures outlined above speak to OPIC's strong 
commitment to a leadership role in providing American companies the 
kind of unified trade program President Bush expects of the TPCC 
agencies. They represent significant progress toward better 
coordination between OPIC and its sister agencies; improved customer 
service; and more aggressive outreach to the American business 
community, all with a specific eye toward assisting small- and medium-
sized businesses' efforts to access international markets.
    I would be remiss in closing without noting that recommendations in 
the Report were based on a survey of U.S. exporters, which identified 
their expectations and needs. It is vital for we the member agencies 
always to keep in mind the investor's understanding of the global 
marketplace, its vagaries and opportunities, in formulating our unified 
trade program. In that context, we at OPIC have much more to accomplish 
before we have made our full contribution to this process, but we are 
confident that our attention to investors' needs has placed us on the 
right path.
    Thank you, Mr. Chairman.
    I will be pleased to respond to your questions.

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
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