Letters dated April 26, 1985, responding to questions of Chairman LaFalce. 157, 165 Feketekuty, Geza, Senior Assistant U.S. Trade Representative for Trade 37 Prepared statement Fox, Lawrence A., vice president, international economic affairs, National Prepared statement Article from Trade & Industry of January 18, 1985, entitled "U.S. Com- Calder, Kent E., the Woodrow Wilson School, Princeton University, Prince- McDonnell, John J., Jr., group vice president, Information and Telecommuni- cations Technologies Group, Electronic Industries Association. Page Pardee, Scott E., executive vice president, Discount Corporation of New York and formerly with the Federal Reserve Bank of New York. 376 Prepared statement 380 Reuss, Hon. Henry S., former chairman, House Committee on Banking, Finance and Urban Affairs, and the Joint Economic Committee, U.S. Congress. 288 Prepared statement Smith, Paul L., senior vice president and director of finance and administra- JUNE 26, 1985 THE GROWING CLAMOR FOR PROTECTIONISM American Iron and Steel Institute (AISI), statement of David C. Hawley, Cline, William R., senior fellow, Institute for International Economics. 293 319 322 560 449 454 Footwear Industries of America, Inc., statement of George Langstaff, president, with attached document, "U.S. Nonrubber Footwear Industry FiveYear Plan of Action". 501 Morsani, Frank L., chairman of the board, Chamber of Commerce of the 421 Prepared statement 424 Shumway, Hon. Norman D., a Representative in Congress from the State of 403 Stern, Hon. Paula, Chairperson, U.S. International Trade Commission Blaker, James R., Deputy Assistant Secretary for Policy Analysis, Department of Defense, accompanied by Col. William Weida, Director, International Economics and Energy Affairs... Prepared statement Johnson, Joel L., vice president, economic affairs, American League for Ex- Olson, Walter J., Deputy Assistant Secretary for Export Administration, De- 592 596 613 618 580 Prepared statement 585 Response to information requested by Chairman LaFalce in memorandum dated August 14, 1985.. 632 Report entitled "Countertrade: Developing Country Practices" by Organisation for Economic Cooperation and Development (OECD). 651 United Technologies Corp. (UTC), statement entitled "Impact of Offset on 644 JULY 31, 1985 HIGH-TECHNOLOGY TRADE Aerospace Industries Association of America, Inc., statement. 762 Heimlich, Richard W., vice president for Japanese relations, Motorola Inc., on behalf of the Semiconductor Industry Association. 708 Prepared statement 713 Letter in response to Chairman LaFalce........ 728 Mack, James H., public affairs director, National Machine Tool Builders' 731 Prepared statement 734 McDonnell, John J., Jr., group vice president, the Information and Telecommunications Technologies Group of the Electronic Industries Association. Prepared statement Response to information requested by Chairman LaFalce Shumway, Hon. Norman D., a Representative in Congress from the State of Page 691 694 704 745 Smart, Bruce, Under Secretary of Commerce for International Trade, statement... 747 THE TRADE DEFICIT TUESDAY, APRIL 16, 1985 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ECONOMIC STABILIZATION, COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS, Washington, DC. The subcommittee met at 10:45 a.m., in room 2128, Rayburn House Office Building, Hon. John J. LaFalce (chairman of the subcommittee) presiding. Present: Chairman LaFalce, Representatives Vento, Cooper, Kaptur, and Carper. Chairman LAFALCE. The Subcommittee on Economic Stabilization will come to order. Last year, this country's trade deficit set an extraordinary record, soaring to $123.3 billion-almost twice the previous record set in 1983 and three times the 1982 trade deficit. We face yet another recordbreaking year—some analysts project this year's trade deficit will rise as high as $150 billion. In contrast to the past, our merchandise trade deficit is no longer offset by either capital or service flows. Instead, these areas are also deteriorating. The surplus in American sales of services-insurance, banking, engineering, advertising, and the like-declined last year for the third year in a row. The 1984 current account deficit-which includes trade in merchandise and services, as well as financial flows between Americans and residents of other countries, reached over $100 billion last year, up from $41 billion in 1983. The magnitude of these figures is truly alarming. Trade deficits on this scale are unprecedented in our economic history, and no one can really forecast what the full effect will be. We only know they can't last for long. The trade deficit is already destroying industries that rely heavily on exports such as agriculture and those such as steel, autos, machine tools, and textiles that face severe competition from imports, while devastating the regions of this country in which these industries are based. The erosion of industries that produce capital goods, the driving force of our past economic expansion, is particularly ominous. Last year the capital goods sector provided the biggest increase in U.S. imports, up a substantial 46 percent or $19 billion, depriving American machinery makers of the fruits of the Nation's capital goods boom. Exports of construction equipment dropped 63 percent between 1981 and 1983, and shipments of machine tools were down 60 percent. |