As exports and global competitiveness play an increasing role in todays environmental industry, trade related issues that impact the ability of U.S. companies to compete overseas are of greater concern than ever before. What can be done to address these issues has become the focus of a group of industry leaders charged with the responsibility of guiding the Federal Government on environmental trade development and export promotion activities.
In 1994, Congress created the Environmental Technologies Trade Advisory Committee (ETTAC) which is comprised of 35 representatives from the U.S. environmental industry who advise the Federal Government on policies and programs to expand U.S. exports of environmental goods and services. Pursuant to this mission, the Committee has issued a report titled "Environmental Technologies Impediments to Trade" which identifies in a concise and persuasive fashion the domestic obstacles and foreign barriers to expansion of these exports.
Efforts are underway to solicit the endorsement of this report by all of the national, regional and state organizations that serve the environmental industry. The objective is to derive consensus among the industry on the trade impediments that confront U.S. environmental technology exporters and the reforms that are needed to successfully compete in the global market.
Highlights of the recommendations contained in this report include:
Foreign Assistance
Foreign Assistance - the U.S. federal budget should be reallocated to provide increased support for the development of projects in overseas markets with the greatest potential for the export of the U.S. environmental technologies.
Export Finance
Export Finance - increased funding for the financing of environmental exports should be made available to the export credit agencies of the U.S. Government.
Tied Aid
Tied Aid - government-subsidized foreign competition should be combated through the use of matching offers by the Export-Import Bank and the U.S. Treasury.
Technical Assistance
Technical Assistance - increased funding for feasibility studies, reverse trade missions and other forms of technical assistance is needed to counter the technical support provided by other major industrialized nations.
Trade Promotion
Trade Promotion - the Federal Governments export promotion budget should be adjusted to provide funding for the promotion of U.S. environmental technology exports in closer proportion to the industrys contribution to total exports.
Sherman Anti-Trust Act
Sherman Anti-Trust Act - cooperation between companies engaged in the marketing of environmental technologies for projects outside the U.S. should be encouraged through the use of the Federal Governments Export Trade Certificate of Review program.
Foreign Corrupt Practices Act
Foreign Corrupt Practices Act - the members nations of the Organization for Economic Cooperation and Development (OECD) should ratify the Antibribery Convention which seeks to promote multilateral adoption of the prohibitions set forth in the U.S. Foreign Corrupt Practices Act, and the U.S. Department of Commerce should participate in monitoring the enforcement of the Convention following its enactment.
U.S. Tax Code
U.S. Tax Code - the U.S. Tax Code should be amended to eliminate disincentives for U.S. environmental technology companies engaged in business overseas.
Trade Sanctions
Trade Sanctions - Congress and the U.S. Government should take into consideration the economic impact of trade sanctions on U.S. exporters before they are imposed.
Access to Foreign Markets
Access to Foreign Markets - fast-track authority to facilitate the negotiation of trade agreements should be renewed, and efforts by the U.S. Trade Representative to negotiate reductions in tariffs and the liberalization of non-tariff barriers to trade in the environmental sector should continue to be promoted.
Access to Foreign Markets
The final - and possibly most daunting - recommendation contained in this report pertains to educating the public on the importance of foreign trade. According to a December 1998 Wall Street Journal / NBC News poll, only 32 percent of adult Americans believe that foreign trade is good for the U.S. economy. Also, a majority of Americans think that 20 percent of their tax dollars are spent on foreign aid, even though it actually represents only 1 percent of the total Federal budget.
Access to Foreign Markets
These misconceptions must be corrected and our industry needs to do its part to inform the public about the contribution of our industry to the U.S. economy. They should know that the environmental industry employs more than 1.3 million Americans and that exports of environmental goods and services in 1997 exceeded imports by a margin of $18.3 billion to $9 billion, thereby contributing a positive surplus of approximately $9.3 billion to the U.S. balance of trade.
Access to Foreign Markets
U.S. exporters of environmental technologies are at a competitive disadvantage, however, against suppliers from other industrialized nations who receive substantially greater assistance from their governments to maintain a dominant position in the global environmental market. Copies of the report are available by contacting [email protected].
About the Author:
Kent Troup is Vice Chairman of ETTAC and a member of the WWEMA Board of Directors.
