Opening Statement of the Hon. Philip M. Crane, M.C., Illinois,
and Chairman, Subcommittee on Trade

Hearing on Free Trade Deals:  Is the United States Losing Ground
as its Trading Partners Move Ahead?

March 29, 2001

Since America's founding, "new eras" have usually been synonymous with new generations of Americans innovators. Whether it was Frederick Douglas, Alexander Graham Bell, Susan B. Anthony or Sally Ride, America has not sat in the bleacher seats of history; we have stood up, set the mark, and run the race. Likewise in trade policy, the United States worked at the forefront of the creation of the GATT, which re-opened and expanded the routes of international trade after World War II. More recently, America led in the creation of the World Trade Organization and guided efforts to negotiate the North American Free Trade Agreement (NAFTA). Trade agreements such as these contributed to the longest period of economic growth in U.S. history. Thanks to the NAFTA, Mexico is now one of the fastest growing export markets for the United States, and Canada and Mexico are the first and second most important U.S. trading partners.

Yet, here at the onset of the new Millennium and a new Administration, we mark the beginning of the seventh year without congressionally-approved trade promotion authority. We are not the leaders we once were. In our stead, our trading partners have actively opened and expanded markets for their exporters and, as a result, there has been a proliferation of free trade arrangements in recent years. There are now 130 free trade agreements in force. The United States is party to only two- the U.S.-Israel Free Trade Agreement and the NAFTA. Europe, on the other hand, has in force FTAs with 27 countries.

While our trading partners stand ready to negotiate trade agreements with the United States, we stand back and continue to debate among ourselves. During the seven years since the President's trade authority expired, America's exporters and workers have faced higher tariff differentials, and more and more discriminatory rules, unfamiliar product standards, and unnecessary threats to their investments.

For example, Automated Food Systems, Inc. is a small eleven-person outfit based in Duncanville, Texas. Automated is a successful distributor of food-processing equipment and exports to Egypt, the Middle East, and Europe. In recent years, Automated tried to export its equipment to Brazil, where there is demand for the company's products. However, because the United States does not have a trade agreement with Brazil, Automated's wares are subject to import duties of over 14 percent while regional competitors may import their products duty-free. This differential treatment creates an insurmountable margin that prohibits small businesses like Automated from penetrating the market and expanding their operations. This is exactly the type of barrier that could be eliminated in trade negotiations if the President had trade promotion authority.

My friends, opportunities for renewed U.S. growth are being squandered. High-wage, export-related U.S. jobs are being lost, and compared to others, U.S. manufacturers and consumers are paying extra for the same goods and services. In pairs and groups, the nations of the world are passing us by, writing the rules for international commerce, and promoting their exports and their business practices.

The costs to our country for failing to get back in the race are unacceptably high. Let us agree to work quickly to find common ground to pass trade promotion authority, and regain our position as the true leader and innovator in this new era of trade.

I'll now yield to the Ranking Minority Member of the Subcommittee, Mr. Levin, for any remarks he would like to make.