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Subject: Commerce Could Be In for Retooling Under Clinton<By Daniel Southerland and
Date: Thu, 12 Nov 92 04:42:06 EST
Message-ID: <29.1992Nov12.044207@AmeriCast.com>

Commerce Could Be In for Retooling Under Clinton<By Daniel South-
erland and Peter Behr=Washington Post Staff Writers=

 When Peter G. Peterson marched into the Commerce Department as
the new secretary 20 years ago, he was brimming with big thoughts
about dealing with the first signs of the nation's economic slip-
page.

 Instead, he says, his schedule filled up with issues like the
clubbing of baby seals and the approval of fire-retardant
sleepwear.  Far from leading the charge to revive U.S. competi-
tiveness, he wound up at a Commerce Department press conference
petting Flipper, the trained dolphin, and similar events.

 Peterson sounds the customary rap against Commerce, which is
frequently described as a bureaucratic backwater with a sprawling
agglomeration of agencies with alphabet soup titles and an agenda
so broad its mission turns to mush.

 Now, under President-elect Clinton, Commerce may well be headed
for prime time.

 A number of Clinton advisers say that Commerce's role should be
strengthened to give it some of the same influence over U.S.
economic goals that Japan's Ministry of International Trade and
Industry has wielded over many years in formulating economic
strategies there.  Commerce already has the expertise to scrutin-
ize how American industries are performing, to assess whether
business is capitalizing on leading-edge technology, and to com-
bine policies on foreign trade with domestic competitiveness,
Clinton advisers say.

 This knowledge would shape federal actions toward specific trou-
bled industries, like autos, or help exploit technologies where
U.S. firms lead, as in designing microscopic electrical circuits
on computer chips.



"Commerce needs to become a leadership group rather than a
second-tier agency that presents unconnected services to busi-
ness," said Doug Ross, a former director of Michigan's Commerce
Department who has contributed to "Mandate for Change," a set of
position papers being submitted to the Clinton transition team.

 Yesterday, two of Washington's most prominent think tanks of-
fered joint recommendations on reorganizing government to meet
the growing economic challenges the nation faces, and they cast
Commerce in a central role.

 The secretary of commerce would take the lead in coordinating
competitiveness strategies within a new Cabinet-level White House
body called the Economic Council, under the proposal by a commis-
sion from the Institute for International Economics and the Car-
negie Endowment for International Peace. The joint commission was
made up of Peterson and other former officials who have served
President Bush and six previous presidents.

 "The Department of Commerce would act as the primary liaison and
coordinator between the public and private sectors to encourage
commercially relevant research and development, promote technolo-
gy transfer, and coordinate science and technology policy when it
affects the nation's commercial interests," the report said. It
would spearhead export promotion and direct investment.

 The Commerce agencies that don't deal with economic and competi-
tive matters would be shifted elsewhere. The National Oceanic and
Atmospheric Administration, which includes the Weather Bureau and
accounts for half of Commerce's nearly $3 billion annual budget,
could be joined with the Environmental Protection Agency in a new
Department of the Environment, if Congress agreed.

 Some Clinton advisers who favor this approach say it advances
ideas that had already taken root in the Bush administration,
such as a growing technology-sharing program involving federal
laboratories and private companies. The administration has pro-
posed to almost triple the funding for this effort, to $141 mil-
lion.

 Clinton himself has proposed a strong new White House-based pol-
icy group, the Economic Security Council.  The whole idea of a
strong, concerted effort by the federal government to promote
U.S. trade, technology and competitiveness makes many economists
cringe. They fear that the program would be captured by special
interests and powerful business lobbies that would demand the use
of taxpayer money to prop up industries that can't compete.

 Other critics see this industrial policy movement as the first
step to much more nationalistic, protectionist trade policies
that will penalize American"Commerce needs to become a leadership
group rather than a second-tier agency that presents unconnected
services to business."< -  Doug Ross, a former director> of
Michigan's Commerce Department consumers by keeping out lower-
priced, foreign-made goods.

 C. Fred Bergsten, director of the Institute for International
Economics, responded that the governmental changes proposed yes-
terday are necessary to head off protectionist trade actions.

 The rule in Republican and Democratic administrations, Bergsten
said, is that if a politically powerful industry gets in deep
enough trouble because of foreign competition, the government is
going to help it out, regardless of a president's ideology on
trade. "If they've got the clout, they're probably going to get
government help," said Bergsten.

 "Let's deal with the problems in key industries earlier, in more
thoughtful, pro-competitive ways," he said. If it's clear a par-
ticular industry is on the way out, and it's too expensive to
save it, then help the workers adjust in a humane way."

 "Let's find a way of heading off problems before you have to
close 40 plants all at once," he said.

 According to Alan W. Wolff, former U.S. deputy representative
for trade negotiations, a case in point is the government's ac-
tion to defend American manufacturers of "flat panel" screens for
laptop computers, where penalty duties were imposed on Japanese
manufacturers over the objections of the U.S. computer industry.
By increasing the price of the screens, the government effective-
ly raised the price of American-built computers that include the
screens, hurting the computer makers competitively. But because
the government acted at the last minute, it had no choice of
remedies, said Wolff.

 "Had the United States government been monitoring the competi-
tiveness of the American display industry, it might have been
able to develop measures that would have strengthened both the
manufacturers and consumers of (the) displays," Wolff said in a
recent speech at the Economic Strategy Institute here.

 Commerce could play that monitoring role, according to a number
of Clinton advisers.  Clinton's plans for Commerce aren't yet
known. "The consensus is that trade, industrial policy and tech-
nology policy all need to be brought together," said one Clinton
adviser, who asked not to be named. "But there is no consensus as
to whether it should be done through a revised and revamped
Department of Commerce or through other means."

How Clinton proceeds could provide an important sign of how he
intends to make good on his campaign promise to harness govern-
ment to support American business, promote U.S. technology and
strengthen the U.S. economy in its competitive struggles with
other industrial powers.

02:25 11-12C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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