30 July 1998
Source: http://www.usia.gov/current/news/latest/98072903.clt.html?/products/washfile/newsitem.shtml

USIS Washington File

29 July 1998


(U.S. targets a world-wide web without barriers)  (1520)

Washington -- Commerce Secretary William Daley has laid out a
three-pronged approach he says his department is taking to prepare
U.S. companies to plunge into global business via the Internet.

In testimony July 29 before the Commerce Committee of the House of
Representatives, Daley said he expects more than 1,000 million people
to be connected to the Internet in the first decade of the 21st

"I view this as 1,000 million customers for American-made products,"
Daley said.

The first prong is to educate U.S. business people about the new
opportunities for international trade created by the Internet. Daley
said the Commerce Department provides information about 250 trade
agreements and trade conditions in 100 countries at its website.

In addition, Commerce officials are preparing to hold seminars around
the country to educate business people about how to tap into foreign
markets from their computer terminals.

The second prong of the U.S. electronic trade policy, Daley said, is
to press for global trade agreements that keep barriers from
interfering with trade conducted via the Internet. The Clinton
administration has taken the issue to the World Trade Organization,
the Organization for Economic Cooperation and Development, the
Asia-Pacific Economic Cooperation and other groups, he said.

Forty-three countries representing 95 per cent of world trade in
information technology have already agreed to eliminate tariffs by
2000 on a number of computer components, such as semiconductors,
printed circuit boards and networking equipment, Daley said.

The third prong involves hiring executives from the private sector and
computerizing the Commerce Department to make it more accessible to
business people. He said the department is accepting trademark
applications and will soon begin to process export licenses over the

Following is the text of Daley's testimony as prepared for delivery:

(Note: In the text "billion" equals 1,000 million.)

(begin text)

Oral Testimony of Secretary of Commerce William M. Daley
House Committee on Commerce
July 29, 1998
Washington, D.C.

                         (As prepared for delivery)

Mr. Chairman, let me start by complimenting you and the Members of the
Committee on the emphasis you have given to this new information age
and the role of the Internet.

Earlier this month, when I was in China with President Clinton, I
visited students using the Internet in a cafe. And I saw doctors using
it to answer medical questions. They told me 1 million Chinese are now
on-line. In America, 100 million people are on-line. Some time in the
first decade of the next century, a billion people worldwide will be

I view this as a billion customers for American-made products.

I think what is most significant about this technology is that a small
store can now sell its products around the world -- just as a Fortune
100 company, with a massive distribution system, does today. That is a
tremendously different world than when I went into business.

So today I will discuss, first, how we at Commerce are working to make
every company in America with a dot-com address export ready; second,
how we are working to ensure our trading partners do not erect
barriers that would block Internet trade; and third, my commitment to
make our Department a model of electronic commerce, the E-Commerce
Department of the 21st century.

First what small- and mid-sized companies need most of all is market
access information. I can report they are seeking -- and we are
providing -- the information at explosive speed.

In the first six months of this year, our web site providing such
information was visited by nearly one million people -- per week. They
can search 250 trade agreements. They can access information on 100

Beginning in the fall, we will hold seminars around the country to
inform potential exporters about marketing products on the Internet.
Soon we will send trade leads and international procurement
opportunities electronically to small firms interested in increasing
exports. We will begin an experiment with 100 rural companies,
providing them with leads, as they immediately become available from
our overseas posts.

And we are developing a virtual trade show, where American products
for sale will be electronically listed 24 hours a day.

When I lead a trade mission our products are in the spotlight over a
few days -- but with this, the stores never close.

As an example, we have a pavilion on CyberExpo in China. The product
catalogs and services of our companies are showcased, every hour of
every day. Ten thousand Chinese visit it each day. So clearly there is
interest from American companies wanting to sell their goods, and from
people overseas who want to shop.

Second, much of our time is devoted to ensuring our trading partners
do not erect barriers that would block Internet trade. In this
century, we have not always had complete and fair access to markets.
But with the Internet, we have a chance to start fresh. In the next
century, I hope people will be able to exchange goods over the
Internet as freely as they can exchange ideas.

Under the leadership of President Clinton and Vice President Gore, the
United States was the first country to develop a comprehensive policy
on electronic commerce. More than a dozen countries have followed.
Many international trade organizations have also made electronic
commerce a central focus.

I can report today some positive results.

All 132 members of the World Trade Organization agreed to impose no
duties on electronic transmissions for now.

The OECD is conducting analyses to help build a consensus on the role
of electronic commerce.

Committees to foster electronic commerce have been set up by both the
Asia-Pacific Economic Cooperation forum and our neighbors in this
hemisphere, as we negotiate the creation of a Free Trade Area of the

Last year, 43 countries, representing 95 percent of world trade in
information technology, agreed to cut tariffs to zero by the year 2000
on a number of products. This includes semiconductors, printed circuit
boards, and networking equipment. We are now negotiating a follow-up
agreement, the so-called ITA-II, trying to cover additional products.

Under the World Intellectual Property Organization, we negotiated two
treaties for protecting copyrighted works, musical performances, and
sound recordings. I very much appreciated the prompt consideration
this Committee gave to the implementing legislation. I am hopeful the
full House will enact the legislation during this session.

We also have several other activities going on.

On the issue of standards, we are now the only government to my
knowledge that is committed, by law, to having the private sector
develop technical standards for the Internet. Many governments mandate
standards themselves, which I think is wrong and will lead to outdated
technology. And I am very aware other countries can use standards as
de facto trade barriers, to lock our companies out. So, we are working
to prevent this.

And on the issue of privacy, as we work to enhance privacy protection
within the United States, we are trying to head off potential problems
with the European Union. They have a very different approach than us.
Their privacy directive goes into effect in October, and it could bar
millions of transactions between us and them, if they feel we do not
provide adequate privacy protection. Obviously, we are actively
engaged in discussions to avoid such problems.

The third and final area is my commitment to make our Department a
model of electronic commerce.

I believe as the representative of business, we should do as business
does. That means aggressively using the Internet, making Commerce a
friendlier Department to Americans.

We recently hired a chief information officer from the private sector,
to drive our electronic commerce initiatives. Roger Baker comes to us
from VISA, where he created a large on-line banking system. What he
did there, we want him to replicate at Commerce.

Let me provide a few examples of what we are doing for consumers. We
have begun accepting trademark applications over the Internet, and
soon will be accepting export license applications.

By next month, Americans can identify and pay for more than 370,000
technical publications that have been produced in the last 10 years.
By the end of this year, the full text of all patents, going back to
1976, will be on-line, and searchable.

We are beginning to electronically send market opportunity information
to minority-owned businesses. Our Census web site receives an average
of a half million hits per day.

And I am proud to announce that you can now find all our Department's
testimony before Congress on our Commerce home page. Obviously, we
hope this will assist in our communications with you, your staff, and
C-Span watchers.

So, thank you, Mr. Chairman, for providing this opportunity to appear
before the Committee. I ask that my long testimony be submitted for
the record. And I look forward to answering your questions.

(end text)