and on-site support. We offer these services at such major aerospace shows as the Paris Air Show, Farnsborough (U.K.) and Hanover (Germany). Our American Aerospace Industries Joint Exhibit at this year's Paris Air Show includes Grumman, Ford Aerospace, IBM Aerospace, GTE Sylvania, Edo International, Federal Express, IBM's Federal Systems Division, ITT Gilfillan, and Thunder Engines. In total, we have 23 participants in our joint exhibit at Paris this year. Mr. Barry's company, TWI, provides logistics support services for U.S. exporters with emphasis on aerospace, high-technology communications and computer systems. Our two companies are but a small part of a $7 billion U.S.based trade show marketing and exhibition industry which is available to service the needs of U.S. companies both here and abroad. In addressing the scope of ITA's overseas exhibitor activities, I begin with the proposition that "[I]n a democratic free enterprise economic system, the Government should not compete with its citizens. The private enterprise system, characterized by individual freedom and initiative, is the primary source of national economic strength." Mr. Chairman, I am sure you will recognize this quote taken from OMB Circular A76, which every Administration since 1955 has endorsed and adopted as a fundamental limitation on Executive Department activities. In short, BEFORE THE COMMERCE, JUSTICE, AND STATE, STATEMENT OF MR. HANS G. HOLLANDER, Mr. Chairman and members of the Committee. I am most pleased to appear before you today to testify on the International Trade Administration's 1984 "Operations and Administration" budget request which I understand to be for some $144,900,000 and 2,382 positions. I am joined here today by Mr. Stephen J. Barry, Jr., of TWI International Exhibitor Services, Sunnyvale, California. I will confine my remarks to ITA's export development and trade promotion activities; in particular, problems arising from ITA's competition with private sector firms, such as ours, in the solicitation of participants for overseas trade shows and the provision of marketing and exhibitor services at such shows. Before I get further into my statement, let me explain a little about my background and the private sector trade show marketing and exhibition business. I personally have been involved in foreign trade promotion and marketing for over 20 years. My company, PHP Corporation, provides a wide range of services to U.S. firms seeking to exhibit their products or services individually or collectively at overseas aerospace shows. For example, our services include arranging for exhibit space, design and construction; developing marketing plans; and facilitating all logistical 4 Worldwide Information and Trade System (WITS). After substantial opposition by the private sector trade information industry, the Senate-House Appropriations Conferees imposed a limitation on ITA's operations and administration budget for FY 1980 directing ITA to "ensure that private sector efforts are enhanced and that ITA does not duplicate or compete with the private sector." We are here to ask that this Subcommittee invoke a similar limitation on ITA's use of funds which result in competition against private sector export development and trade promotion services. We hold no brief against ITA's basic mission of export development and trade promotion. On the contrary, we think that the Department and ITA have a very important role to play in promoting overall U.S. commercial interests and in helping companies which under normal circumstances cannot afford to exhibit overseas. But ITA's current marketing and exhibitor activities extend well beyond these objectives. They involve the expenditure of public funds for government services which are demonstrably unnecessary and, indeed, tend to discourage the fullest development of U.S. private sector trade promotion services. The Subcommittee should also be aware that ITA purchases virtually no contracted services from the U.S. private sector trade promotion industry. On the contrary, ITA again quoting the Circular, "[T]he Government's business is not to be in business." Unfortunately, ITA seems to have lost sight of this admonition. Rather than confining its role to the promotion of overall U.S. commercial interests at overseas trade fairs, or to facilitating export activity by businesses financially unable to take advantage of such opportunities, ITA actively solicits and provides marketing and exhibition services to U.S. manufacturers and suppliers which are quite capable of exhibiting overseas without direct ITA involvement. In so doing, ITA competes with and duplicates the private sector. What is worse, since ITA recovers only its direct costs from participating private companies, the U.S. taxpayer winds up subsidizing unfair government competition against private businesses. At the same time, well-heeled U.S. companies are receiving a form of direct subsidy for their foreign marketing efforts which motivates them to go with the government because they are being subsidized. In a time of limited government resources, this amounts to an intolerable squandering of public funds. Mr. Chairman, ITA's competitive infringement on private sector trade development activities is not a new subject for this Subcommittee. You will recall that similar policy concerns were raised several years ago by ITA's proposed Worldwide Information and Trade System (WITS). After substantial opposition by the private sector trade information industry, the Senate-House Appropriations Conferees imposed a limitation on ITA's operations and administration budget for FY 1980 directing ITA to "ensure that private sector efforts are enhanced and that ITA does not duplicate or compete with the private sector." We are here to ask that this Subcommittee invoke a similar limitation on ITA's use of funds which result in competition against private sector export development and trade promotion services. We hold no brief against ITA's basic mission of export development and trade promotion. On the contrary, we think that the Department and ITA have a very important role to play in promoting overall U.S. commercial interests and in helping companies which under normal circumstances cannot afford to exhibit overseas. But ITA's current marketing and exhibitor activities extend well beyond these objectives. They involve the expenditure of public funds for government services which are demonstrably unnecessary and, indeed, tend to discourage the fullest development of U.S. private sector trade promotion services. The Subcommittee should also be aware that ITA purchases virtually no contracted services from the U.S. private sector trade promotion industry. On the contrary, ITA |