20 



done to enhance U.S. trade exports? And maybe you can share 

 those with the committee. 



Mr. Goldthwait. We are looking at a variety of different things. 

 One thing, for example, is whether there is a whole segment of the 

 trade finance system which is not being addressed by our current 

 GSM- 102 program. I referred a little earlier to the need perhaps 

 to find ways that we can augment the liquidity available to the ex- 

 porter or importer without use of the standard letter of credit fi- 

 nancing mechanism, which for smaller transactions in particular is 

 sometimes expensive. 



So we are looking at ways in which we can perhaps leverage sup- 

 pliers' credit or apply credit directly to importers. We may still 

 want to work through financial institutions to do that, because 

 they can help us identify which of those exporters and importers 

 are creditworthy. 



But still, this would be a really different approach to trying to 

 put extra liquidity into that trading system than what was tradi- 

 tionally used. 



Again, getting back to your earlier question, the ideas for ad- 

 dressing this particular need came out of a number of trips that 

 several of us took, including Ms. Hale, who is with me today, to dif- 

 ferent foreign markets, where what we heard from the importers 

 was, they have a need for more finance than their suppliers in the 

 United States are providing to them, but they didn't really want to 

 use the traditional letter of credit system, either because for the pe- 

 riod of credit they were interested in that was very expensive, has 

 fees attached to it, or because it was overly complicated for the size 

 of transaction that they were dealing with. 



So that is just kind of an example of what we are looking at. 



Mr. Allard. From an outside observer, and many people in the 

 export-import business in agriculture, indicated it is a very rapidly 

 changing market, what with the North American Free-Trade 

 Agreement, GATT discussions, and whatnot. As a Department, do 

 you think you can respond to the rapid changes that are occurring 

 in exports and imports in agriculture? 



Mr. Goldthwait. I think we have to. I don't think we have any 

 choice about it. I think we can. What it may mean is developing 

 tools or changing our existing tools in ways to make them a little 

 more flexible than they have been in the past. I don't think we 

 have any choice about that. 



Mr. Allard. I would like to address the next question to Mr. 

 Mendelowitz, along the same line, a question that I did have. I 

 would assume that you would agree with both of us that long-term 

 strategy needs to incorporate more than just the U.S. Department 

 of Agriculture. We need to look at the total picture. 



Do you think it is reasonable to expect private organizations to 

 participate in long-term planning, particularly if it could affect 

 their own personal competitive edge? 



Mr. Mendelowitz. That is an interesting question. I think that 

 in the most fundamental sense the answer to your question re- 

 quires the Government to think very carefully about what is it that 

 is appropriate for the Government to do versus what is it that is 

 appropriate for the private sector to do. 



