this century. Its 1973 U.S. exports amounted to over $1.1 billionalmost 2.5 percent of total U.S. exported manufactures for 1973. For the 5 years ended December 31, 1973, General Electric's favorable merchandise trade balance-that is, excess of exports over imports amounted to about $2.5 billion.

Since 1968, General Electric's export volume has doubled from roughly $2 billion to over $1 billion and its favorable merchandise trade balance has also doubled from over $400 million to over $800 million. When other current account items, such as dividends, interest, royalties, and payments for services, are included, General Electric's 5-year total contribution to the U.S. balance of payments is over $2.8 billion.

About a year and a half ago we made studies of the effect of the company's international activities-exports, imports, overseas investment and licensing-on domestic employment. These studies showed that the net favorable effect was in excess of 20,000 full-time jobs; about 65 percent of this number were hourly paid employees.

We think that the current number would be closer to 25,000 General Electric domestic jobs, to which should be added perhaps another 25,000 in other organizations-suppliers of materials and services, financial institutions, shipping and transportation companies and government agencies. In addition to these 50,000 domestic positions, U.S. employment in General Electric businesses such as locomotives, gas turbines, aircraft jet engines and marine propulsion, is indirectly attributable to export volume. These businesses serve and are dependent upon world markets and export sales are critical to their success because of high investment and high development costs.

Finally, I should note that General Electric's export business has been highly diversified. No one product line has consistently accounted for over 10 percent of the volume and neither has any one country.

Against this background, I would like to turn to General Electric's position on the pending trade bill.

First, we believe H.R. 10710 as reported by the Ways and Means Committee and passed by the House of Representatives is a thoughtful and balanced piece of legislation designed to promote U.S. exports and increase U.S. employment and at the same time provide more effective protection against unfair import competition. The administration submitted a good bill and the House in our opinion strengthened many provisions of the bill.

Second, the suggestions that the bill has somehow become untimely because of the economic dislocations caused by the oil price increases are, in our judgment, wide of the mark. To the contrary, these dislocations increase the risk that some hard-pressed countries will resort to trade restrictive measures; we need ongoing international trade negotiations to counteract this tendency and to preserve channels of open multilateral trade.

Moreover, these trade negotiations are the logical forum in which to deal with the issues of equitable access to supplies and an international code on export controls-issues brought into sharp focus by the recent oil embargo and addressed in the amendment offered by

Senator Mondale and Senator Ribicoff. I might note that General Electric supports the basic purposes of this amendment.

Third, the authority granted in H.R. 10710 offers the first opportunity for a systematic assault on the montariff barriers and distortions which in some sectors have become the main obstacles to growth of U.S. exports and to the free flow of international trade. The development and adoption of international codes on government procurement, export subsidies and product standards are essential if the United States is to avail itself of its comparative advantage in high technology manufactures.

Fourth, the bill as passed by the House contains provisions for consultation of committees of the Congress and for consultation of industry, agriculture, labor and others in the private sector which offer assurance that U.S. negotiating positions will reflect the views of those most affected. These provisions should go a long way to eliminating the lack of effective communication and the resulting frustration which apparently characterized the critical last stages of the Kennedy Round.

Fifth, the bill defines as a principal U.S. negotiating objective the attainment by product sector of competitive opportunities for U.S. exports equivalent to those afforded in this country to imports in that sector. This objective of competitive equivalence applies, of course, only to other developed countries.

The initial point to be made about this provision is that contrary to fears expressed in some quarters, it does not put unreasonable constraints on the executive branch's negotiating flexibility. The bill does not mandate a particular negotiating result-a mandate which would be unrealistic in any event in the context of complex multiparty negotiations. The sanction in the bill, and the only sanction, is the obligation of the President to give the Congress an accounting by product sector of the extent to which he has attained the objective of competitive equivalence.

In this connection, I believe section 162 (a) of the bill should be clarified by requiring that the President's statement of reasons in support of an agreement on nontariff barriers and distortions be given to the Congress before the agreement enters into force and specifically at the beginning of the first 90 day period contemplated in section 102(f) (1) of the bill.

Next, I should note that section 102 (c) of the House bill is entirely consistent with the proposed administration approach, which General Electric endorses, of attempting to develop generic codes dealing with nontariff barriers and distortions across sectoral lines. By definition international codes would harmonize these barriers and distortions, and thereby advance the objective of competitive equivalence by product sector.

Section 102(c) (2) does call for negotiations by product sector to the extent appropriate to achieve the objective of competitive equivalence and to the extent feasible. These provisions give the Special Trade Representative flexibility as to the timing of sectoral negotiations and as to the manner in which sector bargaining is to be integrated into the overall negotiations.

The only legal constraints on this discretion of the STR are the dual obligations in the statute to consult the interested congressional committees and to consult product sector advisory bodies. In a word, the House in section 102 (c) did not put unreasonable restraints on the executive branch authority, but instead set up guidelines for the exercise of discretion and asked for an accounting as to how that discretion is exercised. In this connection, I cannot help noting that it is to the Congress that the Constitution entrusts the power to regulate commerce with foreign nations.

It is important not to obscure the main thrust of the provisions for product sector equivalence. These provisions have several key premises, which are familiar to this committee, but which it may be useful to emphasize:

The comparative advantage of the United States in world trade. lies principally in two areas, agriculture and high technology manufactures;

The United States comparative advantage in high technology manufactures has been nullified in many cases and for many years by a range of nontariff barriers and distortions;

Congress in the exercise of its constitutional responsibility should set for the executive branch negotiating targets for the forthcoming trade discussions;

These negotiating targets should certainly include competitive opportunities for U.S. exports equivalent to those afforded foreign suppliers selling in U.S. markets;

And finally, the executive branch should be required to give the Congress a plain-spoken accounting of the extent to which the targets established by law have been met.

Industry hasn't asked the Congress for more than that and we don't see how anything less would be in the national interest. Thank you, Mr. Chairman.

Senator MONDALE. Thank you.

Mr. Kennedy, is it correct that the administration poses a sector equivalency rule, and you have heard the witnesses preceding you this morning who felt the same way about it.

Mr. KENNEDY. Yes.

Senator MONDALE. I had understood that the sector approach is designed principally to deal with the question of government purchase policy where, for example, the Germans could bid on a generator contract in the United States, but a U.S. firm could not bid under similar circumstances on a government purchase in Germany, and so

on.

Am I correct in that?

Mr. KENNEDY. I think principally government procurement is too strong a word. Certainly government procurement is one of the main areas where there has been a concern which is reflected in the views of those of us in industry who have advocated an approach like this. But broadly, there are a series of industry sectors where tariffs are no longer, if you will, a serious competitive factor in transnational trade. On the other hand, in some of these sectors, and certainly some. of the sectors in which General Electric Co. is engaged, we find that

access to foreign markets is restricted, by government procurement restrictions, by export subsidies of other countries, by rules on standards compliance, by import license requirements, by quotas and the like. So we very much welcome on our part the emphasis in the bill on nontariff barriers and distortions.

On the other hand, it seemed to us that although it is proper and we support the administration in this, to think that these issues can be approached generically by attempts to develop international codes, we think in the end you have to measure results and impact sector by sector. It seemed, therefore, desirable to many of us in industry that the President be asked to identify competitive equivalence as a negotiating objective, a principal one, not the only one, but a principal one. And second, those of us who supported those amendments do not believe there should be constraints on the President's flexibility. That would be totally unrealistic.

It is a multiparty negotiation and Congress cannot tell the President, you have to come back with this particular result. But it is reasonable for Congress, which has the constitutional role here, to say to the President, please give us an accounting as to how you made out. And that is the first part of that amendment. The second part of the amendment is that where it is appropriate to attain this objective of equivalence and where it is feasible, sector bargaining should be a preferred negotiating technique.

This again seems to me a very modest or moderate proposition, in spite of the concerns which have been expressed earlier. Government procurement, to your point, is one of the main concerns and perhaps the single biggest one, but not by any means the only one, Senator.

Senator MONDALE. Could you submit for the record perhaps a letter in which you describe specifically the kinds of problems you have in mind when you argue for this sector by sector approach, so we know specifically what companies in the United States are up against? Mr. KENNEDY. I would be happy to.

Senator MONDALE. Senator Fannin?

Seantor FANNIN. Thank you, Mr. Chairman.

Mr. Adduci, I strongly support your recommendation relating to the antidumping and countervailing duties statutes. One of the problems in the antidumping area is determining the cost figures of foreign manufacturers. I have introduced a bill to bring dumping under our antitrust laws and provide for discovery procedures in the Federal district court. Thus, if figures are not forthcoming, imports would be denied access to this market.

Would you support this?

Mr. ADDUCI. We support judicial review, yes, sir.

Senator FANNIN. We have several problems along our borders as far as the plants are concerned. I notice, Mr. Adduci, in your statement you give the reasons for retaining the items 806.30 and 807.00 for the American manufacturers if they are going to be able to compete with the other countries of the world.

I think that we have had figures-I do not know whether it has been from General Electric or from what source on the amount of employment along the border, and also the number of jobs retained in the United States with the result of the border program.

Would that not be very much involved in this particular amend ment?

Mr. MOORE. Yes, indeed.

Senator FANNIN. Do you have any idea what we are talking about just in our border programs, the number of jobs?

Mr. ADDUCI. Do we have any figures on that?

Mr. MOORE. Senator, I do not have such figures with me. I know of places where they could be obtained, and we will be glad to get some figures along that line and submit them for the record.

Senator FANNIN. I think it is important to not only have the num ber of jobs involved in the cross-border, but it is also important to have the supporting jobs that are involved on the American side, I know that we have had people, we have had members of the Congress argue that this was costing us jobs, whereas in reality we probably are able to hold plants that had been within the U.S. borders that would have been forced to close.

Is that true?

Mr. MOORE. We agree completely and would be glad to supply additional data for the record in support of the point that you are making, which is a very important point and one not often understood. [The following letter was subsequently supplied for the record:]

ELECTRONIC INDUSTRIES ASSOCIATION,
Washington, D.C., June 10, 1974.

SENATE FINANCE COMMITTEE,
Dirksen Senate Office Building,
Washington, D.C.

GENTLEMEN: When EIA President, V. J. Adduci, and I testified before the Committee on April 3, 1974, I promised to provide for the record information as to the number of jobs in Item 807.00 operations outside the United States, and also the number of jobs in the United States dependent upon such 807.00 operations. Assembling this information has proved to be time-consuming: because we understand these data will soon be needed for the printer, I am supplying all we have received, as follows:

In providing data, two member companies offered relevant comments:

COMPANY A

"This ignores our purchases from other companies which are using 806.30 and 807.00 operations. Their employees as well as ours are better off because of those operations, but we have no way of quantifying the numbers of their employees or ours who are involved. In the case of companies buying from us, however, we estimate that the jobs of an additional 500 U.S. employees of other companies are dependent on our off-shore operations; because those companies are able to secure economies from our off-shore operations."