[Congressional Record Volume 141, Number 165 (Tuesday, October 24, 1995)]
[Extensions of Remarks]
[Pages E2023-E2024]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           THE 11TH ANNUAL GREAT LAKES CONFERENCE ON EXPORTS

                                 ______


                             HON. TOBY ROTH

                              of wisconsin

                    in the house of representatives

                        Tuesday, October 24, 1995

  Mr. ROTH. Mr. Speaker, on September 15, I held my 11th Annual Great 
Lakes Conference on Exports. We had 1,043 attendees, making this the 
largest exports conference in the Midwest.
  Our opening speaker this year was C. Michael Armstrong, chairman and 
CEO of Hughes Electronics, and the Chairman of President Clinton's 
Exports Council.
  As the chairman of the Trade Subcommittee of the House International 
Relations Committee, I have worked very closely with Mike. His insights 
have been invaluable to the committee as we have tried to increase U.S. 
exports.
  I'd like to share some of those insights with you today. Following is 
the text of the address Mike Armstrong gave at the Exports Conference.
  If we are to remain competitive, improve our balance of trade, and 
move strongly ahead into the 21st century, we need to listen to CEO's 
like Mike Armstrong. I urge you all to take heed of his advice.

The Export Imperative: Public Policy and Private Enterprise for the New 
                                Century

     (By C. Michael Armstrong, Chairman & CEO, Hughes Electronics)

       Thank you for that very warm Wisconsin welcome. This 
     conference, drawing so many high-powered participants not 
     simply from Wisconsin but from across the Great Lakes region, 
     is testament to the energies and insight of Congressman Toby 
     Roth. The knowledge and pro-active approach he brings to the 
     public debate about the market system and exports is critical 
     to the future of this country.
       Gatherings like this are instructive for another reason as 
     well--as an indicator of the kind of collective, 
     collaborative, effort we must have to turn economic 
     opportunity to advantage. In the context of the local 
     economy, some of you may be seated down the row this morning 
     from a competitor. But in the context of the global economy, 
     even competitors share a common interest in a system that 
     permits and promotes economic opportunity and puts American 
     firms on an equal footing with companies from other 
     countries.
       The theme of this year's conference captures the challenge 
     we face: ``Going global'' is, quite simply, where the growth 
     is. Companies, and ultimately countries, that refuse to 
     recognize this reality, no matter how powerful, no matter how 
     well-positioned, are destined to decline. By the same token, 
     even small companies that grasp this reality will reap world-
     class rewards, I'll say here what I say to every businessman 
     and Congressman I speak with: America's economic destiny is 
     as an Export Superpower.
       For my company, the export imperative is already the 
     dominant fact of our economic life: Today, our competition, 
     our customers, our standard of quality, are all global. I've 
     tried to translate my experiences, at IBM, at Hughes and as 
     Chairman of the President's Export Council into an advocacy 
     of pro-export policies that will not only define the growth 
     of our country, but will define the opportunities and 
     standard of living for our children and our children's 
     children.
       That's the mission that shapes my message this morning: The 
     change in mind-set--in public policy, and in the private 
     sector--we need to see for this country to fulfill its 
     economic destiny. For this to happen, we must act on three 
     critical issues: Where government policy is hurting us, it 
     has to stop; where government can help, it has to start; and 
     where the private sector lacks reach or competitiveness, it 
     has to change.
       If I may, let me start with a snapshot of the importance of 
     exports to the American economy. Take the current projections 
     of 2\1/2\ percent growth for the U.S. economy--a steady, but 
     unspectacular rate. Now, compare that 2\1/2\ percent to the 
     growth rate for American exports which is 10 percent plus. 
     Even during the 1990-91 recession, exports continued to grow 
     putting a floor under a downturn I know all of us thought 
     was deep enough. Each year export growth adds about $30 
     billion dollars to our GDP.
       Now numbers like that can be distant from the day-to-day we 
     deal with, they're almost unreal: So let me bring it a bit 
     closer to home--at the average manufacturing wage nationwide, 
     export growth, each year, is good for 1 million new jobs. 
     Last year, right here in Wisconsin, 2,300 companies exported 
     $7 billion dollars worth of goods, supporting 192,000 
     American jobs. And statewide, export earnings are up 19 
     percent from the year before.
       And it's the same story in the other states represented 
     here today. Last year in Minnesota, exports accounted for $10 
     billion dollars and 158,000 jobs; in Illinois, $24 billion 
     dollars and 440,000 jobs; in Michigan, $36 billion and more 
     than half-a-million jobs. And in every one of your states 95 
     percent of the businesses active in export are small to mid-
     size companies of 500 employees or less. That's the reality 
     and the strength, of America's export economy.
       However, for just a moment, imagine our economy without 
     export growth. Our country would red-line almost instantly, 
     plunging into recession. With export growth gone, we'd see 
     unemployment head for double-digits, and a downward economic 
     spiral historic in proportion and its affect on all of us. 
     It's a nightmare scenario none of us want to look at much 
     less live through.
       The bottom line is, exports are the economic engine of our 
     country and their importance is growing. Lets look ahead from 
     where things are today to the world as we'll know it twenty 
     years from now. A combination of demographics and development 
     will join to spark an economic boom in the nations we once 
     termed the Third World: 12 developing countries with a total 
     population of 2.7 billion people--more than 10 times the 

[[Page E 2024]]
     population of the United States--will account for 40 percent of the 
     world's export opportunities. Some may see this developing 
     world emergence as a shift away from American economic 
     dominance to a zero-sum future in which their sunrise is our 
     sunset. I see it a different way. I see it as a whole new 
     world hungry for the goods and services American companies 
     can provide. I see it as long-term sustainable prosperity for 
     the U.S., if more of us get off our domestic duff and into 
     global markets.
       But to crack those markets, to translate that opportunity 
     into American exports and American jobs, will take more than 
     American ingenuity and enterprise. It's going to take a shift 
     in government policy as profound as the technological 
     revolution taking place around us.
       So let's start with public policy. Just what government 
     support and policy is necessary for the United States to be 
     globally competitive?
       Here, I'm going to depart from the prevailing wisdom that 
     puts a pox on both Houses as well as 1600 Pennsylvania 
     Avenue--by asserting there is a constructive role government 
     must play when it comes to exports.
       First, we need to keep and extend export financing. There 
     are opportunities for export that entail unique risks, deals 
     where commercial banks with their balance sheets rightly fear 
     to tread alone. We need adequate government-backed export 
     financing. We need the Ex-Im Bank and OPIC--the U.S. Overseas 
     Private Investment Corporation--to step in where political 
     risk, or competitive country government involvement inhibits 
     our opportunity. Government financing in international 
     markets is not a form of foreign aid, it is a competitive 
     imperative.
       Second, we've got to improve export advocacy. I know some 
     of the folks in Washington have declared war on the Commerce 
     Department. I want to propose something short of a scorched-
     earth solution. All of us want to see non-essential 
     government functions eliminated--and yes, we want to see the 
     fat trimmed on federal spending--but we need to preserve a 
     cabinet-level Commerce or Trade Secretary to give voice and 
     substance to global export advocacy and policy. We need to 
     retain an International Trade Agency that helps U.S. 
     companies the way other governments back our foreign 
     competitors. And fortunately today we have a very effective 
     Secretary of Commerce who provides real help in growing this 
     country's exports.
       Third, and this is key for many of the companies 
     represented at this conference, we need more national export 
     support for small business. Support that helps the company in 
     the industrial park down the street find and sell to new 
     customers around the world. What makes the American economy 
     thrive is the little guy with the big idea--the seed from 
     which great things grow. For most of our history, small 
     business has been a home-grown affair. But that's changing: 
     It's becoming possible in America to be an export 
     entrepreneur.
       For example, the U.S. Commercial Service with its regional 
     offices across the U.S., and links to every U.S. Embassy, is 
     helping small American firms make the foreign contacts that 
     lead to foreign contracts; that turns entrepreneurship into 
     global business.
       If you are not using these resources today, you should be. 
     I do.
       If these are 3 ways government can help us--our government 
     is also hurting us. We ought to demand that government apply 
     to its actions the physicians' Hippocratic Oath: ``First, do 
     no harm.''
       I'll limit myself this morning to one example, I think the 
     most egregious example, of the way government policy is 
     crippling our competitiveness, costing us jobs and limiting 
     our growth: I'm talking about the impact of the old, Cold 
     War-era export controls.
       This is a case where bureaucracy simply can't keep pace 
     with technology. It is a fact of life in the Information Age: 
     Technology travels. The space between generations of 
     technology is contracting, and the speed with which 
     technology penetrates the marketplace is accelerating, making 
     a mockery of borders and bureaucratic barriers of all kinds. 
     In too many cases, export controls that limit U.S. firms, 
     that keep us on the sideline, simply invite other countries 
     to capture the market. It's a sad fact for those of us in the 
     satellite and communications business that U.S. Government 
     export controls constitute the single most significant 
     competitive advantage our European competitors possess.
       Ladies and gentlemen, that's wrong and it's got to change.
       We've got to pass an Export Administration Act that clears 
     away out-moded, antiquated export licensing that penalizes 
     American companies.
       Now, if we had a Congress filled with Toby Roths, this 
     issue would be resolved tomorrow. But given the reality, 
     we've got to keep educating, agitating, and pressing for 
     change before the world passes us by. In just the 90s, these 
     outdated export policies have cost my company several billion 
     dollars and thousands of jobs. You and I must demand a new, 
     realistic and competitive Export Administration Act.
       So far I've focused on what government can and cannot do to 
     promote export growth. But that brings me to my final issues 
     this morning: The point where public policy ends and private 
     sector responsibility begins.
       Because the fact is, we can clear away counter-productive 
     restraints and regulations and we can sustain and strengthen 
     public sector assistance but there is a limit to what 
     government can do, a line that separates what business must 
     do for itself.
       No policy, no program, no political fix can overcome a lack 
     of American competitiveness. That's the responsibility of you 
     and I, American management, and no one else.
       And while there are some encouraging signs that American 
     management is adapting and restructuring for global 
     competitiveness, there is one significant indicator. I would 
     submit, that says our house is not yet in order. Our problem 
     is relatively weak investment in R&D, an important indicator 
     that an enterprise is pursuing leading-edge and looking long-
     range. In 1994, the U.S. economy invested just 1.9 percent of 
     GDP in civilian R&D. Our 1.9 percent compares to 3 percent 
     for Japan and 2.7 percent for Germany: And remember in 1984, 
     both of those countries were in recession.
       While private investment would be aided by a permanent flat 
     R&D tax credit, it is management's ultimate responsibility to 
     invest, to train and to re-engineer our capabilities. Our 
     shareholders, our customers and our employees will not, and 
     should not, let us point the finger or pass the blame 
     somewhere else. We simply must have the courage to challenge 
     ourselves to change, and the conviction to invest to stay 
     ahead of our global competitors.
       And if this conference proves anything, it demonstrates 
     there is plenty of courage and conviction right here in this 
     room.
       I know from talking to Toby Roth that there are companies 
     in this room exploiting global economic opportunities to 
     their advantage. No matter how many employees they may have, 
     that's no small accomplishment. I cite and compliment all 
     today that are on this path--in the spirit of challenge to 
     all of us; A challenge to be aggressive and enterprising in 
     making the global market your customers.
       And that, ladies and gentlemen, is my message:
       First, we must all recognize the growing importance of 
     exports in our increasingly global economy--and that 
     America's economic destiny is as an Export Superpower.
       Second, we must translate that export imperative into 
     modern export public policies out of Washington.
       And third, businesses in America should be assuring their 
     competitiveness, investing in their conviction and pursuing 
     global markets.

                          ____________________