Washington gives SIA support on trade aims

Electronic News, March 17, 1997 by Gale Bradley

Washington, D.C.--The semiconductor industry's top executives had a relatively quiet but strong presence here last week as they made their annual trip to the nation's capital, orchestrated by the Semiconductor Industry Association (SIA).

At the meetings on Capitol Hill and elsewhere, it was clear that not only are U.S. economic policy hopes pinned on the first World Semiconductor Council meeting in Hawaii on April 11 and the needs of the industry are a "priority," but also that the SIA is "wiring down the details" on a monetary commitment from the federal government for the industry to establish university-based semiconductor technology "focus centers." U.S. Secretary of Commerce William Daley told a crowd of about 200--including Advanced Micro Devices chairman and CEO W. J. Sanders III, Lucent Microelectronics president Curtis Crawford and Intel executive VP and COO Craig Barrett--this: "Your industry is on the front lines of our efforts to open" foreign markets to U.S. goods. And he pledged that the Commerce Department will be working to ensure that foreign trade partners follow through on the "groundbreaking" semiconductor and information technology (IT) agreements of the last year.

Shortly after Secretary Daley's remarks, Charlene Barshefsky, the United States Trade Representative (USTR), spoke even more conclusively about the relationship between the semiconductor industry and the Clinton Administration, particularly between it and the Administration's overall trade policy.

"Let me say that your industry is one of this Administration's priorities. It is because of your competitiveness. Because of the kinds of jobs you create. Because of the kind of corporate citizens that you are.

"You operate in the most challenging market in the world. In a market that's most difficult to penetrate, you know how to use government resources well. You work as hard as we do and you're with us every step of the way. And we appreciate that.

"So, on behalf of the President, and on behalf of Bill Daley, we look forward to continuing this kind of competitive push into the next century," Ambassador Barshefsky told the industry leaders gathered at the Smithsonian Institution's National Air and Space Museum last Tuesday night.

Industry's Impact

From comments and discussions last week, it can be said that the community of economists in Washington is aware of the industry's impact.

Last Wednesday morning, U.S. Senators representing Massachusetts, California, Washington State, North Carolina and Utah, from both sides of the aisle, held a kind of Capitol Hill summit on five industry segments that--by virtue of their ability to create good jobs and "bring prosperity" in general--the states are working together to foster. Semiconductors and computers were among the segments and in a 90-minute break-out session, industry lobbyists and other interested parties were able to sit down with the federal policy directors affecting them.

Tom Kalil, a director concentrating on high-tech issues within the White House's National Economic Council (NEC) and a former SIA employee, began his presentation to a group, that included representatives for Xilinx, Sun Microsystems, Netscape Communications and Raytheon, by noting that the making and selling of semiconductors and computers has "a very significant economic and social impact." Mr. Kalil went on to enumerate actions that the Clinton Administration has taken to respond to the needs of the broader IT sector, which closely match the stated needs of the SIA. The NEC is to the president's economic policy as the National Security Council is to the President's foreign and defense policies.

"U.S. trade policy scored a bit of 'hat trick' over the last year, between the U.S.-Japan Semiconductor Agreement, the Telecommunications Act fitting with the WTO (World Trade Organization) guidelines and then the ITA (Information Technology Act). We're going to put a lot of emphasis on following up those agreements," Mr. Kalil said.

"We know, as we look at the amount of time it has taken just for the trade barriers in our own long-distance market to come down, that it will take a while to implement," he said. "To enforce the ITA, we're up against not just a monopoly, and not just a government monopoly, but a foreign government monopoly."

SIA's Stated Goal

Through the ITA, the U.S. can negotiate the elimination of semiconductor duties around the world, a stated goal of the SIA and a point of great pride to Ambassador Barshefsky and her office. ITA signatory South Korea, it was said last week, may put their elimination of semiconductor tariffs on a fast enough track to be allowed a seat in Hawaii next month. Fellow signatory the European Union just did so and was allowed a seat, though some speculated the EU could cause some contention in Hawaii.

No discussion EN heard last week ended without a stress of the importance of China's entry into the WTO, which would require the People's Republic to adopt a much more open market policy.

From the semiconductor point of view that policy would be eliminating both the country's semiconductor duties, which range from 6-12 percent, and the "de facto technology transfer requirements imposed on foreign investors," which raises ire across the high tech sector.