[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
      EXPORT PROMOTION REFORM ACT AND STATE TRADE COORDINATION ACT

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                                 MARKUP

                               BEFORE THE

         SUBCOMMITTEE ON TERRORISM, NONPROLIFERATION, AND TRADE

                                 OF THE

                      COMMITTEE ON FOREIGN AFFAIRS

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                                   ON

                        H.R. 1409 and H.R. 1926

                               __________

                             JUNE 26, 2013

                               __________

                           Serial No. 113-29

                               __________

        Printed for the use of the Committee on Foreign Affairs


Available via the World Wide Web: http://www.foreignaffairs.house.gov/ 
                                  or 
                       http://www.gpo.gov/fdsys/

                                 ______




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                      COMMITTEE ON FOREIGN AFFAIRS

                 EDWARD R. ROYCE, California, Chairman
CHRISTOPHER H. SMITH, New Jersey     ELIOT L. ENGEL, New York
ILEANA ROS-LEHTINEN, Florida         ENI F.H. FALEOMAVAEGA, American 
DANA ROHRABACHER, California             Samoa
STEVE CHABOT, Ohio                   BRAD SHERMAN, California
JOE WILSON, South Carolina           GREGORY W. MEEKS, New York
MICHAEL T. McCAUL, Texas             ALBIO SIRES, New Jersey
TED POE, Texas                       GERALD E. CONNOLLY, Virginia
MATT SALMON, Arizona                 THEODORE E. DEUTCH, Florida
TOM MARINO, Pennsylvania             BRIAN HIGGINS, New York
JEFF DUNCAN, South Carolina          KAREN BASS, California
ADAM KINZINGER, Illinois             WILLIAM KEATING, Massachusetts
MO BROOKS, Alabama                   DAVID CICILLINE, Rhode Island
TOM COTTON, Arkansas                 ALAN GRAYSON, Florida
PAUL COOK, California                JUAN VARGAS, California
GEORGE HOLDING, North Carolina       BRADLEY S. SCHNEIDER, Illinois
RANDY K. WEBER SR., Texas            JOSEPH P. KENNEDY III, 
SCOTT PERRY, Pennsylvania                Massachusetts
STEVE STOCKMAN, Texas                AMI BERA, California
RON DeSANTIS, Florida                ALAN S. LOWENTHAL, California
TREY RADEL, Florida                  GRACE MENG, New York
DOUG COLLINS, Georgia                LOIS FRANKEL, Florida
MARK MEADOWS, North Carolina         TULSI GABBARD, Hawaii
TED S. YOHO, Florida                 JOAQUIN CASTRO, Texas
LUKE MESSER, Indiana

     Amy Porter, Chief of Staff      Thomas Sheehy, Staff Director

               Jason Steinbaum, Democratic Staff Director
                                 ------                                

         Subcommittee on Terrorism, Nonproliferation, and Trade

                        TED POE, Texas, Chairman
JOE WILSON, South Carolina           BRAD SHERMAN, California
ADAM KINZINGER, Illinois             ALAN S. LOWENTHAL, California
MO BROOKS, Alabama                   JOAQUIN CASTRO, Texas
TOM COTTON, Arkansas                 JUAN VARGAS, California
PAUL COOK, California                BRADLEY S. SCHNEIDER, Illinois
SCOTT PERRY, Pennsylvania            JOSEPH P. KENNEDY III, 
TED S. YOHO, Florida                     Massachusetts
                            C O N T E N T S

                              ----------                              
                                                                   Page

                               MARKUP OF

H.R. 1409, To amend the Export Enhancement Act of 1988 to further 
  enhance the promotion of exports of United States goods and 
  services, and for other purposes...............................     2
  Amendment in the nature of a substitute to H.R. 1409 offered by 
    the Honorable Ted Poe, a Representative in Congress from the 
    State of Texas, and chairman, Subcommittee on Terrorism, 
    Nonproliferation, and Trade..................................     8
  Amendment to the amendment in the nature of a substitute 
    offered by the Honorable Alan S. Lowenthal, a Representative 
    in Congress from the State of California.....................    15
H.R. 1926, To further enhance the promotion of exports of United 
  States goods and services, and for other purposes..............    16

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE RECORD
                                APPENDIX

Markup notice....................................................    28
Markup minutes...................................................    29
Markup summary...................................................    30


      EXPORT PROMOTION REFORM ACT AND STATE TRADE COORDINATION ACT

                              ----------                              


                        WEDNESDAY, JUNE 26, 2013

                     House of Representatives,    

        Subcommittee on Terrorism, Nonproliferation, and Trade,

                     Committee on Foreign Affairs,

                            Washington, DC.

    The committee met, pursuant to notice, at 2 o'clock p.m., 
in room 2200 Rayburn House Office Building, Hon. Ted Poe 
(chairman of the subcommittee) presiding.
    Mr. Poe. The committee will come to order. We meet today 
pursuant to notice to mark up two bipartisan export promotion 
measures. As all offices were previously notified, it is the 
intent of the Chair to consider the following items en bloc: 
H.R. 1409, the Export Promotion Reform Act, introduced by Mr. 
Engel, a bipartisan amendment in the nature of a substitute to 
H.R. 1409 offered by the Chair, an amendment to my amendment in 
the nature of a substitute offered by Mr. Lowenthal; and H.R. 
1926, the State Trade Coordination Act, introduced by Mr. 
Chabot.
    Without objection, these items are considered as read and 
will be offered and considered en bloc.
    [The information referred to follows:]H.R. 
1409 deg.












ANS to H.R. 1409 deg.













Amendment to ANS deg.

H.R. 1926 deg.












    Mr. Poe. I will now recognize myself and the ranking member 
to speak on these measures. I recognize myself for 5 minutes.
    Our economy is still in bad shape. Fewer people are 
participating in the labor force this year than at any point 
since 1979. Twenty-two million Americans are unemployed or 
underemployed. I have the Port of Houston in my district. It is 
responsible for 50 percent of the City of Houston's economy. 
The Port of Houston exports more cargo than any other port in 
the United States. Ninety-five percent of the world's consumers 
live outside the United States, and the fastest-growing region 
of the world is Africa, with a growth rate of 4.2 or 4.7 
percent in 2012.
    The Port of Houston and other facilities just like it are 
hungry for more business and trade. If we want to grow the 
American economy, exporting more goods and services has to be 
part of the solution. Instead of tying up small businesses with 
red tape, we need to free them up to reach growing markets. We 
need to come along and help them identify export opportunities 
abroad. No one can match the quality and innovation that we can 
provide in this country.
    H.R. 1409, the Export Promotion Reform Act, would give the 
Secretary of Commerce 6 months to submit to Congress the 
results of a global assessment of overseas markets. The report 
would tell us which ones provide us with the best export 
potential for Americans. After that, the Secretary will send 
commercial service personnel to work with our diplomatic 
personnel to reduce obstacles to U.S. exports and seal the 
deal.
    Last year, this very bill made it through the House with 
unanimous support, only to get held up in the do-nothing 
Senate. My amendment in the nature of a substitute, 
incorporates language from Representative Sam Graves' H.R. 
1909. The amendment says the Federal Government should let 
businesses know when there are Federal- and State-led trade 
missions so businesses can take advantage of those trade 
missions. It also requires the seven different Federal agencies 
in charge of export policy to tell us why all seven are needed, 
and how they measure results. We need a more efficient and 
streamlined approach when it comes to export policy.
    In all, this bill will help grow the economy, create jobs, 
and put money back in the pockets of Americans.
    H.R. 1926 requires the Federal Government to work better 
with the States on trade. It requires the Secretary of Commerce 
to produce a State-by-State export strategy every year. That 
strategy has to have reporting metrics so we can measure how 
well we are doing. Mr. Chabot has worked on this bill to 
produce a straightforward result.
    To do trade well, you can't just have some grand national 
policy. You have to get local. You have to talk to the 
manufacturers, service providers, small business owners. By 
getting the Federal Government to work closely with States, it 
will increase efficiency and reduce duplication. Local 
businesses will better understand export opportunities, have a 
more targeted approach to potential markets, and create more 
jobs as they grow.
    This is why it matters. In 2011, over 40,000 companies 
exported goods and services from just the State of Texas. 
Ninety-three percent of those companies were small- and medium-
sized businesses, and they accounted for 30 percent of Texas' 
total exports. In 2012, Texas' export shipments of merchandise 
totalled $250 billion. Houston accounted for half of that. 
While it is hard for any State to try to stack up, I think, to 
the State of Texas, this goes to show how important exports are 
to the economy.
    If we can get the Federal Government to work closely with 
the States, then all States win. Together, these bills will 
help grow the economy, create jobs, put money back in the 
pockets of Americans.
    I now recognize the ranking member for 5 minutes.
    Mr. Sherman. Thank you, Mr. Chairman. I want to thank you 
for calling this markup and urge my colleagues to support your 
motion that we pass all the items on the agenda en bloc by 
unanimous consent. I strongly support efforts to increase 
exports, and believe that both bills under consideration, 
including the Lowenthal amendment, will make important 
contributions to our efforts to promote exports.
    In a world with a perfectly free economy, the United States 
would not be in the export promotion business, and no other 
government would be in the export promotion business. But the 
reality is far different. With our competitors doing far more 
than we are to promote their exports, we need an effective 
commercial diplomacy and other export promotion programs.
    In my nearly 17 years on the committee, I have seen a 
shocking difference between the attitude of our Diplomatic 
Corps toward pushing American exports, where it seems to be 
below getting more people to show up at the 4th of July party, 
and the focus of foreign diplomatic corps, which seem to put 
export promotion at the very top of their list.
    The measures we have under consideration are long-
recommended changes to the operation and planning of the 
multiagency Trade Promotion Coordination Committee, commonly 
known as TPCC, and they provide for State promotion agencies, 
State trade promotion agency representation on the TPCC, and 
greater State participation in the TPCC's activities more 
generally.
    The GAO has recommended that our export promotion efforts 
across disparate agencies involved be better coordinated, 
better planned, and these measures will help implement those 
recommendations, as well as ensure that State government 
efforts to promote exports are part of the planning and 
coordination process. I strongly support the measures being 
adopted today and look forward to perfecting them at the full 
committee.
    I have agreed, of course, to co-sponsor them both. I know 
that our colleague, Brad Schneider, the gentleman from 
Illinois, has amendments that he will, in due time, put forward 
as the process moves on, and these will also deserve all of our 
support. At least, they will have my support.
    I do want to take a brief opportunity to note that to 
address our long-term chronic trade deficit we have to do more 
than the very limited amount that we are talking about doing 
here today. Since the 1970s, we have run larger and larger 
trade deficits. We have eroded and decimated our manufacturing 
base, shifted 1 million jobs overseas, and seen a depression of 
domestic wages.
    Export promotion is not the solution, or at best is a tiny 
part of the solution. We need a completely different trade 
policy. That will become apparent when the whole thing crashes, 
because you can't run these trade deficits year after year 
without eventually a crash similar to the one we faced in 2008.
    Finally, I want to argue against a change being put forward 
by some American corporations. They are lobbying to reduce the 
domestic content requirement of Export-Import Bank financing. 
While the Export-Import Bank is not under the jurisdiction of 
this subcommittee or our full committee, it is the sister 
agency of OPIC, which is an important part of our jurisdiction.
    Currently, for most of its programs, Ex-Im Bank will 
finance the lesser of 100 percent of the value of the American 
content of an export, or 85 percent of the total export. There 
are exceptions to this rule. There are those who want to weaken 
the rule, and basically use U.S. taxpayer money to finance 
goods that are not, for the most part, made in the United 
States.
    We can understand why individual companies would be 
concerned chiefly at generating profitable business rather than 
generating jobs in the United States, but the Ex-Im Bank is not 
in the business of generating profits. It is in the business of 
creating U.S. jobs. And I hope they keep that in mind.
    Thank you, Mr. Chairman, and I yield back my time. But I am 
sure I have exhausted it.
    Mr. Poe. Thank you, Ranking Member. Does any other member 
seek recognition?
    The gentleman from California, Mr. Lowenthal, is recognized 
for 5 minutes.
    Mr. Lowenthal. Thank you, Mr. Chair, for including this 
amendment today, and the ranking member for your support.
    I would like to say, in 1992, the Congress enacted the 
Trade Promotion Coordinating Committee, the TPCC, to oversee 
the 20 Federal export promotion programs which were spread 
across the entire Federal Government. The TPCC membership is 
currently drawn from Federal agencies with jurisdiction over 
our interest in our trading relationships. My amendment would 
add critical representation on the TPCC from State government 
trade development agencies.
    This is in furtherance of the goals of H.R. 1409, which are 
to strengthen the coordination of programs, which will 
hopefully increase U.S. exports and create jobs for American 
workers.
    Including State government representatives would have three 
benefits: Improved efficiency, added State expertise, and 
ultimately result in a better use of Federal funds.
    On the efficiency front, virtually all States have agencies 
to help companies increase exports. In this era of budgetary 
constraints, maximizing coordination between the Federal and 
State levels would increase the efficient use of all interested 
parties in promoting exports.
    With regard to the expertise of State export promotion 
agencies, many States, such as my home State of California, 
have extensive and sophisticated export development programs. 
Under the California Economic Development Agency, there are 14 
trade coordination offices that work closely with industry and 
labor to sell more California products overseas. These agencies 
have a lot to contribute to the Federal effort.
    Finally, working with a constrained fiscal environment, we 
must always look for ways to better use our Federal funds. 
Every year, State export agencies receive some $30 million in 
Federal funds, primarily from the Small Business 
Administration, yet the programs supported by these funds are 
not fully leveraged and coordinated with Federal export 
programs.
    This amendment would help solve the problem. The underlying 
bill, H.R. 1409, together with these provisions added by 
Chairman Poe and from Chairman Graves' bill, H.R. 1909, and 
from Representative Chabot's bill, H.R. 1926, all fit together 
and constitute a robust package of provisions to help our 
exporters.
    It is an important issue for me, as I represent the Port of 
Long Beach. And the Port of Long Beach, along with the adjacent 
Port of Los Angeles, is the busiest port complex in the United 
States. I encourage my colleagues to support this amendment, 
and I again want to thank Chairman Poe and the Ranking Member 
Sherman for including the amendment in H.R. 1409, because I 
believe it makes the bill better.
    And I will yield back.
    Mr. Sherman. So you are saying that the Long Beach and San 
Pedro ports together are busier and handle more traffic than 
the Houston port?
    I yield back.
    Mr. Poe. Did I say that? I don't recall. It must have been 
something that just slipped from my lips.
    I agree that the Houston port, I think, is the largest port 
in the Gulf.
    Mr. Lowenthal. As Long Beach would be the largest port in 
California. [Laughter.]
    Mr. Poe. Thank you. Does anybody else wish to speak?
    [No response.]
    Mr. Poe. Hearing no further requests for recognition, the 
question occurs on adopting the items under consideration en 
bloc. Those in favor, say aye.
    [Chorus of ayes.]
    Mr. Poe. Those opposed, no.
    [No response.]
    Mr. Poe. In the opinion of the Chair, the ayes have it, and 
the en bloc items are approved.
    Without objection, the items in the bloc will be reported 
favorably to the full committee. H.R. 1409 will be reported in 
the form of a single amendment in the nature of a substitute, 
incorporating the adopted amendments, and the staff is directed 
to make any technical and conforming changes.
    I want to thank all of our members and the staff for the 
assistance and cooperation that went into today's markup. The 
subcommittee stands adjourned. Thank you very much.
    [Whereupon, at 2:34 p.m. the subcommittee was adjourned.]
                                     

                                     

                            A P P E N D I X

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         Material Submitted for the RecordNotice deg.



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