[Congressional Record Volume 141, Number 88 (Thursday, May 25, 1995)]
[Extensions of Remarks]
[Pages E1122-E1123]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                 SUBTLE TRADE BARRIERS BLOCK U.S. FIRMS

                                 ______


                        HON. GERALD B.H. SOLOMON

                              of new york

                    in the house of representatives

                        Wednesday, May 24, 1995
  Mr. SOLOMON. Mr. Speaker, I submit for the Record the following 
excerpt taken from the article ``Protectionism Plays a Subtler Hand'' 
in the Washington Post on Sunday, May 14. This article addresses the 
problems which American firms are having in overseas trade. Despite the 
dismantling of many of the [[Page E1123]] old tariffs and quotas, many 
``nontariff trade barriers'' still exist. By eliminating these 
barriers, the United States can greatly reduce its $108 billion trade 
deficit.
  One industry which is affected by these barriers is energy. American 
corporations, such as Westinghouse and General Electric, control about 
30 percent of the world's powerplants and equipment. However, in the 
lucrative German market, these corporations have been blocked. U.S. 
officials claim that this is blatent trade discrimination, although it 
is not done through traditional practices of tariffs and quotas. 
Germany has repeatedly denied contracts to American firms and then 
given them to European firms.
  Another industry which has been affected is automobile and truck tire 
manufacturing. Cooper Tire, despite the promises made under NAFTA, has 
been shut out of the valuable market in Mexico. New restrictions placed 
on the industry by the Mexican Government have blocked imports from the 
United States, while exports to the United States have increased.
  The Clinton administration has made some steps by putting pressure on 
the German Government. This pressure must be continued to help American 
corporations prosper in overseas markets. This will help to alleviate 
the trade imbalance which the United States now suffers.
  The article referred to follows:
                [From the Washington Post, May 14, 1995]

                   Protectionism Plays a Subtler Hand

                        (By Martha M. Hamilton)

       GE had a recent experience in Germany that was similar to 
     the Westinghouse problem in Cottbus, according to U.S. trade 
     officials.
       GE spent more than a year and $750,000 bidding for the 
     right to supply turbine generators for a power plant in 
     Lippendorf in the former East Germany, only to find itself 
     excluded from the final round of negotiations for the $250 
     million contract. Asea Brown Boveri's German subsidiary was 
     awarded the contract.
       GE and U.S. trade officials have been joined by the 
     European Union in protesting the actions of the Veag, the 
     privatized eastern German electric utility. The EU agreed 
     that Germany doesn't allow foreign companies a fair crack at 
     its public sector contracts--a market valued at about $160 
     billion.
       So far, administrative reviews and challenges in German 
     courts have failed to provide GE with the remedy it seeks, 
     and Germany has maintained there was no unfair discrimination 
     against GE.
       Last month, U.S. Trade Representative Mickey Kantor and 
     Commerce Secretary Ronald H. Brown wrote Germany's minister 
     of economics, Guenther Rexrodt, that they consider the GE 
     case ``a test'' of Germany's willingness to abide by the 
     rules of the memo of understanding and willingness to allow 
     U.S. companies fair access to public sector contracts. Brown 
     is expected to meet with Rexrodt later this month.
       One argument that U.S. trade officials hope will persuade 
     Germany to open up public sector contracts is that the German 
     public is paying a higher price than needed for services 
     because its markets are protected from competition.
       GE still hopes it may win the Lippendorf contract, 
     according to Gadbaw. He said challenging the German 
     government has been hard for GE, which doesn't like to find 
     itself suing a potential customer. ``We had to weigh the fact 
     that we are very successful in the German market in a whole 
     range of product lines with the fact that one of our 
     principal product lines was being shut out of that market,'' 
     he said.
     

                          ____________________