For Immediate Release
WASHINGTON, DC, JANUARY 27, 1999. — Mr. Gary G. Benanav, Chairman and Chief Executive Officer of New York Life International, testified today before the Senate Finance Committee that, "it is time to formulate a new American trade agenda and trade policy." Mr. Benanav testified on behalf of New York Life International and the Coalition of Service Industries (CSI), for which he serves on the Board of Directors, during Part II of the Committee's three-day review of the US trade agenda.
Calling for new U.S. leadership in enhancing the open and fair rules-based global trading system through the World Trade Organization and other trade initiatives, Mr. Benanav rejected suggestions that "globalization" caused the economic crisis started in Asia last year. "The challenge is not to retreat from globalization," argued Benanav, "but rather to pursue trade, investment, and economic policies that encourage dynamic domestic and international growth."
Benanav highlighted the need for services trade negotiations, citing the contributions the U.S. services sector has made to the domestic economy. He argued for continuing the U.S. commitment to liberalizing services trade worldwide, saying that "services industries have fueled U.S. economic growth and now represent our greatest competitive advantage." He cited recent statistics showing that services exports reached $258 billion in 1997 and that the total services trade surplus is projected to surpass $105 billion in 2001.
"We believe it is critical for the United States to pursue aggressively new negotiations to liberalize services trade, in particular financial services," said Benanav. The 1997 WTO Financial Services Agreement provides market access for U.S. firms abroad. But, it does not yet assure fair competition as foreign companies continue to face operating obstacles - such as lack of transparency in regulation - that impede competition on an equal basis as domestic firms. Benanav advocated "pro-competitive regulatory reform" in financial markets stating that, "effective regulations that open markets to fair competition will focus on solvency of the financial institutions, not on limiting the number of firms in the market, restricting the types of products that can be sold, controlling the pricing of products, or requiring burdensome approval procedures."
Benanav said the WTO is the appropriate forum for pursuing services trade liberalization, and that U.S. leadership in the WTO is essential. He added that other trade initiatives in the Free Trade Area of the Americas, the Transatlantic Economic Partnership, the Asia Pacific Economic Cooperation, and bilateral negotiations with important trading partners can complement the process in the WTO.
Benanav stressed the importance of U.S.-China trade and China's participation in the WTO. He offered continued support for the Administration's efforts to reach a commercially acceptable WTO accession agreement, but urged the U.S. Trade Representative to insist that China open its service sectors and recognize services sector liberalization as equally important as reducing tariffs on merchandise. "Without meaningful commitments on services, there simply can be no deal with China," said Benanav. And, should China agree to WTO rules, "the United States should be prepared to provide permanent extension of normal trade relations status to China," he said.
In order to implement such a broad and ambitious trade agenda and policy, Mr. Benanav urged Congress to "extend broad, multi-year traditional trade negotiating authority to the President. This negotiating authority is the essential foundation or infrastructure needed to conclude with credibility liberalization agreements with our trading partners." Benanav also stressed the importance of adopting domestic policies that encourage competition and reduce the costs of competing overseas. He cited an example of the revision and extension of tax deferral rules for U.S.–based financial services companies and commended the Finance Committee for its leadership in helping to conform U.S. tax rules to U.S. trade policies.
Bob Vastine, CSI President, explained that the Coalition of Service Industries was established in 1982 to create greater public awareness of the major role services play in our national economy and promote the expansion of business opportunities abroad for U.S. service companies. "We work closely with the Administration, Congress, and international bodies such as the WTO to increase the focus on liberalization of trade in services in international trade negotiations. Our mandate in 1982 was to get services included in the Uruguay Round in 1982, which we did successfully, and we continue to work toward an increasingly open and competitive global marketplace through the WTO and other trade initiatives."
Contact: Bob Vastine (202) 289-7460
The Coalition of Service Industries represents the interests of the U.S. services sector. CSI is committed to increasing public awareness of the major role services play in our national economy. The broad range and diversity of the service sector is reflected in CSI's membership which in-cludes major international companies from the banking, insurance, telecommunications, securi-ties, computer and data processing, maritime transport, travel and tourism, accountancy and diversified management services sectors.