93-1 HEARINGS BEFORE THE SUBCOMMITTEE ON GENERAL OVERSIGHT AN MINORITY ENTERPRISE OF THE COMMITTEE ON SMALL BUSINESS NINETY-SIXTH CONGRESS FIRST SESSION 48-804 O WASHINGTON, D.C., MARCH 20 AND APRIL 4, 1979 Printed for the use of the Committee on Small Business 1-6 COMMITTEE ON SMALL BUSINESS TOM STEED, Oklahoma NEAL SMITH, Iowa, Chairman JOHN D. DINGELL, Michigan FERNAND J. ST GERMAIN, Rhode Island FREDERICK W. RICHMOND, New York MARTY RUSSO, Illinois JOSEPH M. MCDADE, Pennsylvania DAN QUAYLE, Indiana DOUGLAS K. BEREUTER, Nebraska ARLEN ERDAHL, Minnesota THOMAS G. POWERS, General Counsel SUBCOMMITTEE ON GENERAL OVERSIGHT AND MINORITY ENTERPRISE JOHN J. LAFALCE, New York, Chairman JAMES C. CORMAN, California JOSEPH P. ADDABBO, New York PARREN J. MITCHELL, Maryland HENRY B. GONZALEZ, Texas TIM LEE CARTER, Kentucky LYLE WILLIAMS, Ohio DOUGLAS K. BEREUTER, Nebraska FREDERICK W. RICHMOND, New York GEORGE NEIDICH, Subcommittee Counsel DOUGLAS L. FRANCISCO, Minority Subcommittee Professional Staff Member CONTENTS Addabbo, Hon. Joseph P., a Representative in Congress from the Carter, Hon. Tim Lee, a Representative in Congress from the State La Falce, Hon. John J., chairman, Subcommittee on General Over- sight and Minority Enterprise_- Mitchell, Hon. Parren J., a Representative in Congress from the Skelton, Hon. İke, a Representative in Congress from the State of Smith, Hon. Neal, a Representative in Congress from the State of Aceves, José J., executive director, Latin American Manufacturers Baker, Eugene, president, National Association of Black Manufac- Burrell, Dr. Berkeley G., president, National Business League_ Corrada, Hon. Baltasar, Resident Commissioner in Congress from the Commonwealth of Puerto Rico_-_- Corrin, Malcolm, president and chief executive officer, Interracial Council of Business Opportunities _ _ Dennis, William R., director of research, National Federation of Inde- Dickerman, Lola, director, Small Business Association of New Eng- land, accompanied by Al Daniels, cochairman, procurement com- mittee and president, Black Corporate Presidents of New England. Edgar, Hon. Robert W., a Representative in Congress from the State of Pennsylvania and chairman of the Northeast-Midwest Congressional Coalition, accompanied by Larry Zabar, Executive Director; and Robert Niehaus, staff economist, Northeast-Midwest Fettig, Lester, Administrator, Office of Federal Procurement Policy, Lewis, John, president, National Small Business Association, accom- panied by Herbert Liebenson, vice president, Government affairs; and Herman Director, chief staff economist Strauss, Robert, Special Representative for Trade Negotiations, accompanied by Robert T. Griffin, Special Assistant to Mr. Strauss; W. Douglas Newkirk, Director, Trade Negotiations and Agree- ments Division, Department of Commerce; and Morton Pomeranz, Senior Industrial Adviser to Mr. Strauss_. Additional material supplied for the hearing record— Aceves, José J., executive director, Latin American Manufacturers Edgar, Hon. Robert W., a Representative in Congress from the State of Pennsylvania and chairman, Northeast-Midwest Congressional 120 SU 11 List of social and economic programs subject to preference Opinion from Attorney General Bell re extent of authority of Prepared statement. Statement on socioeconomic programs implemented through Statements re problems with and effects of implementation of La Falce, Hon. John J., chairman, Subcommittee on General Oversight and Minority Enterprise: Letter from Congressman Joseph M. McDade re impact of President's trade agreements on laborsurplus areas- Lewis, John, president, National Small Business Association: Letter to President Carter re proposed MTA__ Prepared statement... McKevitt, James D. "Mike," Washington counsel, National Federation of Independent Business: Prepared statement. Strauss, Robert, Special Representative for Trade Negotiations: Legislative authority for negotiation of procurement code. Young, Kenneth, director, Department of Legislation, AFL-CIO: Prepared statement__. Zayas, Edison R., economist, National Federation of Independent Business: Prepared statement with attachments__ MULTINATIONAL TRADE NEGOTIATIONS TUESDAY, MARCH 20, 1979 HOUSE OF REPRESENTATIVES, AND MINORITY ENTERPRISE OF THE The subcommittee met, pursuant to notice, at 9:05 a.m., in room 2359, Rayburn House Office Building, Hon. John J. LaFalce (chairman of the subcommittee) presiding. OPENING STATEMENT OF CHAIRMAN LaFALCE Mr. LaFALCE. The Small Business Subcommittee on General Oversight and Minority Enterprise will come to order. Over 4 years ago, the Trade Act of 1974 was enacted into law. This provided the President and his Ambassador, now Robert Strauss, with authority to proceed with the the multilateral trade negotiations that have been taking place since that time. These negotiations were thought desirable since Congress felt "that barriers to international trade are reducing the growth of foreign markets for the U.S. products, with an adverse effect on the U.S. economy." After 4 years of negotiations, President Carter advised Congress. and the public this January that he intends to enter into a number of trade agreements relative to certain matters including subsidies and counterduties; technical barriers to trade; licensing; customs valuation; commercial counterfeiting; aircraft; and, the agreement which will be the focus of this morning's hearing-Government procurement. During the past week, there have been statements in the national media, by small business and minority business groups, and by many of my colleagues, that this so-called procurement code will have a highly disastrous effect on the set-aside programs presently in effect for small businesses, for minority businesses, and for firms located in labor surplus areas; under the code, certain procurements will no longer be eligible for set-aside. Equally as important, statements have been made that, apart from the set-aside programs, the procurement code will have a most deleterious impact on the number and dollar amount of contracts awarded in open competition to such firms. Since they are under the procurement code, they will now be competing for such contracts with foreign firms which will have cheaper sources of labor, which are not subject to stringent Government regulatory programs such as OSHA, and environmental controls—and which receive from their governments special treatment and/or subsidies. (1) |