[Congressional Record Volume 143, Number 74 (Tuesday, June 3, 1997)]
[Extensions of Remarks]
[Pages E1090-E1091]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


       FOSTERING A BETTER UNDERSTANDING OF THE CHEMICAL INDUSTRY

                                 ______
                                 

                             HON. TOM DeLAY

                                of texas

                    in the house of representatives

                         Tuesday, June 3, 1997

  Mr. DeLAY. Mr. Speaker, my colleague, John Tanner and I serve as the 
chair and vice chair of the Advisory Committee to the Chemistry and 
Technology Forum. The Chemistry and Technology Forum was recently 
established to foster a better understanding of the chemical industry 
among the general public and public officials. The Forum sponsors 
events and produces studies intended to improve the quality and 
quantity of information on industry issues available to the public and 
the Government. In doing so, the Forum believes that it will encourage 
the development of sound public policy and debate on the issues 
affecting the industry and the public it serves.
  Recently the Forum heard a presentation from Mr. J. Lawrence Wilson, 
the chairman and CEO of Rhom and Haas Co. and the chairman of the 
Chemical Manufacturers Association on international trade and the 
chemical industry. Mr. Wilson points out that since 1993 chemicals have 
been the largest U.S. export sector and that exports have doubled in 
the past 5 years to more than $60 billion. Today, 1 out of every 10 
U.S. export dollars earned comes from chemical sales. Every billion 
dollars in export sales creates or preserves 4,000 jobs. Access to the 
markets of Asia and Latin America are key to this industry's future and 
renewal of ``fast track'' authority is a competitive necessity.
  I am entering Larry's speech in today's Congressional Record and 
encourage Members of Congress, particularly those with substantial 
chemical employment in their districts', to read the speech.

      International Trade--Working Hard To Stay Ahead of the Game

       I'm pleased to be here this afternoon because it gives me 
     another opportunity to talk about my favorite subject--the 
     U.S. chemical industry.
       Those here today already know about the contribution this 
     industry makes to the U.S. economy--and to the world economy, 
     for that matter:
       The chemical industry: Provides essential building-block 
     products used by every sector of the manufacturing economy, 
     and by most of the service economy; is high-tech and 
     internationally competitive; provides high-paying, stable 
     jobs; is a multi-billion dollar sponsor of research and 
     development; and is a leader in health, safety and 
     environmental protection.
       And this business is so dynamic that the chemical industry 
     of today did not even exist 20 years ago.
       All of this is no surprise to you--but these facts are 
     surprising to many of your colleagues who are not here today. 
     In my experience, I've found some congressional 
     representatives regard the chemical industry as ``ancient.'' 
     Perhaps even ``outdated.'' Some even regard us as a 
     bargaining chip to be used in the international trade wars.
       That's why I'm so pleased that Congressman Tom DeLay of 
     Texas and Congressman John Tanner of Tennessee have taken 
     leadership roles in this Forum--and that you all have 
     demonstrated your interest and support of the chemical 
     industry by taking the time to come today. On a personal 
     note, I would like to acknowledge that both men represent 
     states where some of Rohm and Hass Company's largest 
     facilities are located.
       Congressman DeLay has the added distinction of having both 
     personal and business experience in the chemical industry.


                          International Trade

       The chemical industry is the nation's most powerful, most 
     successful international competitor. Ten years ago, exports 
     accounted for 10 percent of our total shipments. Today, that 
     number stands at a little over 16 percent. Exports are 
     beginning to drive our growth.
       Many people believe the global economy is entering a new 
     Golden Age. Jeffery Sachs, the noted Harvard economist, 
     recently said we have reached an important historical moment 
     in time. He says global economic growth ``will raise the 
     living standards of more people, in more parts of the world 
     than in any prior time in history.''
       Some economists are predicting world growth rates will 
     average an astounding 4 percent a year for the next 20 years.
       I'm proud to say that American companies are leading the 
     way. Bill Lewis, CEO of the

[[Page E1091]]

     respected McKinsey Company, says, ``U.S. firms have developed 
     the best practices over the greatest range of industries.'' 
     This is certainly true of the U.S. chemical industry!
       The U.S. is the world's largest producer of chemicals, 
     accounting for almost one-fourth of total world chemical 
     production.
       Chemical exports have doubled in the past five years to 
     more than $60 billion.
       One out of every ten U.S. export dollars earned comes from 
     chemical sales.
       And, since 1993, chemicals have been the largest U.S. 
     export sector, running ahead of agriculture and far ahead of 
     the aircraft industry.
       Exports create American jobs. In 1986, the chemical 
     industry employed 1.02 million people. In 1996, the number 
     stood at 1.04 million--in jobs that wages that are one-third 
     higher than the average wages for all of manufacturing. In a 
     time of downsizing and restructuring, and of maturing markets 
     in the developed world, the U.S. chemical industry has 
     preserved and strengthened high-paying, high-tech jobs for 
     more than a million people.
       The ability to compete internationally has been critical to 
     our success. It's likely you've heard this statistic before, 
     but it remains true: Every billion dollars in export sales 
     creates or preserves 4,000 jobs.
       And the U.S. chemical industry has not sealed itself off 
     from international competition or opportunity. Quite the 
     contrary--we are active players in every part of the globe. 
     Three years ago, 201 U.S. chemical companies operated a total 
     of 3,050 foreign affiliates. These foreign investments create 
     demand--and pipeline--for U.S. technology and products. And 
     the sales made by these affiliates help underwrite the 
     research and development necessary to continually renew and 
     strengthen U.S. competitiveness.


                  Maintaining Our Number One Position

       Every developing nation wants to build its own chemical 
     industry--to support their growing manufacturing industries, 
     to add value to their raw materials and to create a 
     technology base that will improve the quality of life for 
     citizens today and in the future.
       These nations will move to meet these needs--with or 
     without the U.S. chemical industry. Today's chemical industry 
     is global, and there are plenty of competitors from Europe 
     and Japan who will compete with us to establish footholds in 
     these developing countries.
       The U.S. chemical industry today is vibrant and strong--but 
     success is not a given. Our ability to succeed must be 
     nurtured and encouraged. The competitive environment gets 
     tougher, while the margin for error gets smaller. In the 
     past, companies might have been free to raise prices to cover 
     miscalculations, or could have relied on their reputation to 
     become the sole source supplier--but no longer.
       The old markets--the developed world of Europe and Japan--
     are where we cut our trading teeth and built trade surpluses. 
     But they are not the growth markets of the future.
       Asia and Latin America are our future. Why? Because within 
     these regions, 11 countries hold more than two-thirds of the 
     world's population. And these economies are growing at 
     astounding rates--double or triple the economic rates of the 
     U.S.--and they will continue at these rates for the 
     foreseeable future! Yet today, just 13 percent of the total 
     chemical industry investment abroad is located in these 
     countries.


                          An Agenda For Action

       These growth markets also are the very same markets that 
     have the highest degree of protectionism in the form of 
     tariff and non-tariff barriers. The U.S. has done a great job 
     of tearing down trade barriers and unlocking closed 
     economies--but we still have more to do if we are to level 
     the international playing field. We need your help.
       For starters, we need Congress to renew ``Fast Track'' 
     authority to allow the President to negotiate future trade 
     agreements. Expansion of free trade agreements in which the 
     U.S. is a partner is a competitive necessity!
       This is especially true in Latin America. Having seen the 
     benefits of free trade sparked by NAFTA, Latin American 
     countries are moving quickly and aggressively to form strong 
     regional pacts. These include MERCOSUR, which includes the 
     Southern Cone countries led by Brazil, and the Andean Pact, 
     which includes the East, Central and Northern Tier of South 
     America.
       Yet we also see another trend developing--one that is 
     somewhat alarming. The Latin American regional pacts I just 
     mentioned are forming agreements and having discussions with 
     Europe and Japan. All of this can and will lead to 
     preferential trading status for these countries--more 
     preferential than U.S. status.
       Here's just one example of what this can mean to the bottom 
     line from my own company, Rohm and Haas. If MERCOSUR enters 
     into a free trade with the European Community, monomer 
     exports from our plant in Houston, Texas will be taxed at a 
     14 percent rate of duty. Product coming to Latin American 
     from European-based companies will be taxed at duty rates of 
     between 0 and 2 percent. At that point, the options for Rohm 
     and Haas will be limited--either lose customers or be forced 
     to build a brand-new plant within the Latin American free 
     trade zones. Can you imagine what impact that might have on 
     the economic health of our existing world-scale production 
     facilities in the United States?
       The U.S. cannot afford to sit on the sidelines! We must 
     have Fast Track trade negotiating authority.


              Thank You for Your Support and Encouragement

       Many chemical companies have restructured in order to 
     compete. In fact, it's fair to say that this industry has 
     been through a decade-long makeover. We have taken the steps 
     needed to become a force a global markets.
       The legislative and regulatory process, along with our 
     conduct of foreign affairs, must keep pace in order to help 
     U.S. businesses maintain their number one, leading position. 
     That means that government must be knowledgeable, nimble and 
     involved in the international arena.
       There will be some companies--and some nations--who will be 
     forced to drop out of this race because they cannot compete. 
     I can tell you that we in the chemical industry are working 
     hard to stay at the top. We won't let up. You can help by 
     shaping our country's international and trade agenda. We are 
     ready to work with you toward that end.
       You can tell by my accent, that I was raised in the South. 
     I also was raised to be polite and to say thank you when you 
     have asked someone to join with you in completing a task.
       So today I say ``thank you'' on behalf of the U.S. chemical 
     industry--for what many of you have already done--and for the 
     actions you will take to help us remain a vibrant, growing, 
     dynamic part of this economy and this country.

     

                          ____________________