Statement of William Weiller, Chairman of the Board
and Chief Executive Officer, Purafil, Inc., Atlanta, Georgia

Testimony Before the Subcommittee on Trade
of the House Committee on Ways and Means

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

March 29, 2001

Good morning, Mr. Chairman. My name is Bill Weiller. I am the Chairman of the Board and CEO of Purafil, a leading manufacturer of air purification systems based in Atlanta, Georgia. I would like to thank you for the opportunity to testify before the House Ways and Means Trade Subcommittee on whether U.S. business is disadvantaged by the increasing number of trade agreements to which the United States is not a party. I am testifying on behalf of Purafil. I also serve on the International Economic Policy Steering Committee of the National Association of Manufacturers (NAM).

I'd like to tell you a little bit about my company and how important foreign markets are. Purafil manufactures air quality systems that remove odorous, corrosive and toxic gases. In short, we sell clean air. Our customers include paper mills in Argentina, Oklahoma and North Carolina. We protect valuable artifacts in the Netherlands, the Sistine Chapel, and in Washington, DC. We service petrochemical refineries in Texas, Brazil, and Saudi Arabia. Despite our small size, Purafil is an industry leader in this niche market.

The problems that Purafil can solve are the same worldwide. A refinery in Baton Rouge experiences the same hazardous emissions from manufacturing processes as does a refinery in Saudi Arabia. The Sistine Chapel protects its artwork from environmental degradation, as does the U.S. National Archives in Washington. Our intellectual property, considering our size, is significant. We have worked hard to take a technology that was developed in the United States about 30 years ago and have constantly refined and improved it.

If Purafil were not present to solve these problems, the increased demand for a solution would result in foreign competitors gaining the business. Right now, Purafil is the best in the world at solving air purification problems. We have a technology that cannot be matched. Purafil has worked hard to stay on top of our industry, and I fear that without exporting, someone else will take the lead. That "someone else" could likely be a company from outside the United States.

Sixty percent of our sales are made outside of the United States. Exporting is vitally important to Purafil: it is the cornerstone of our corporate strategy. We are not a company that got into international sales by accident or solely as a reaction to market demand. We have recognized that in order to survive, to continue to provide jobs to our employees, and to continue to fund the R & D efforts necessary to our success, we have to export and become experts in doing international business.

Many might be surprised that Purafil, a small American business with about 70 employees, is even remotely interested in the 130 free trade accords currently in force to which the United States is not a party. Just last year I testified before the full Committee that, in fact, we often have enough on our hands countering the notion that global free trade is good for big companies and bad for "the little guy." Small and medium-size businesses do not attract the headlines the multinationals do, and neither do the trade agreements to which the United States is not a party. After all, when Canada signed a free trade agreement (FTA) with Chile, or when the European Union concluded an agreement with South Africa, it certainly did not make the headlines in Atlanta, or even Washington, D.C., for that matter. I am here to let you know that the effect of these agreements is very real for Purafil and small business in general.

In Chile, our products are subject to a duty of 9 percent. Purafil's Canadian-based competitor faces a zero duty since Chile and Canada have an FTA. I can assure you that for any business, small or large, a 9 percent price margin is enough to swing a sale. To level the playing field for my company in Chile, a U.S.-Chile FTA is essential. That is why the United States needs to move quickly on the FTA with Chile, and on the hemispheric Free Trade Area of the Americas (FTAA).

Why the FTAA? For Purafil, it's quite simple. In Brazil, our products face a duty of 14 percent. My Brazil-based competitor faces no such duty in the Brazilian market, or in Argentina, Paraguay and Uruguay, the other members of the South American MERCOSUR agreement. How is Purafil to overcome this 14 percent cost disadvantage? Move quickly on the FTAA by giving the President Trade Promotion Authority (TPA) that would put the United States back in a leadership role. For businesses with a payroll to meet, one year is an eternity, and I will not be able to compete in these international markets unless the playing field is leveled, and leveled quickly.

It's not just trade agreements in the hemisphere, or lack thereof, that disadvantage my company. Another example is the trade agreement between the EU and South Africa. We are beginning to see competition from a South Africa based firm. As a result of the EU-South Africa agreement, we face twice the duty in the European market as our South African competitor. That is a disadvantage for Purafil that the United States needs to address through the launch of a new round of negotiations at the World Trade Organization (WTO). We are facing similar high tariff situations in India, China and elsewhere. One solution is to form licensing agreements in these countries, but in doing so, we dilute our profit margins and make it easy for partners to eventually become competitors. The real solution is for the WTO to move forward in continuing to reduce tariffs and other barriers, particularly in the developing countries, where the barriers are still high. If our trading partners do not come to the table with serious market access commitments in the FTAA and the WTO, then the United States needs to move swiftly with as many countries willing to do so on a bilateral basis.

Purafil will continue to do everything in its power to remain competitive. I am here today to ask you to do your part - level the playing field so our people, our technology and our products can compete in the global market. Level the playing field by providing the President with Trade Promotion Authority to put the United States in a leadership role and allow it to move quickly on the FTAA and the WTO. Don't force us to compete with the trade barriers and tariffs currently in place.

I don't need statistics, studies or business experts to tell me that exporting creates jobs and is good for the economy. As a small business owner, I see it every day I go to the plant. I'm constantly reminded when I look at the shipments on our dock and see their final destinations.

There is no substitute for U.S. leadership on trade. The right policies on trade, taxes and regulation are particularly vital at a time of slowing economic growth. For Purafil and other small-business exporters, we will continue to be successful only if we maintain our international customer base. In order to do that, we will depend on the reduction of tariffs and other trade barriers. Thank you.