[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

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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

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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.

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