PRESIDENT'S EXPORT COUNCIL

Room 4830

Department of Commerce

14th & Constitution Avenue, N.W.

Washington, DC

Wednesday,

July 19, 2006

The meeting was convened, pursuant to notice,

at 3:52 p.m., MR. J.W. MARRIOTT, JR., Chairman,

presiding.

APPEARANCES:

EXECUTIVE BRANCH

THE HONORABLE CARLOS M. GUTIERREZ

Secretary of Commerce

THE HONORABLE STEVEN PRESTON

Small Business Administrator

THE HONORABLE AL MARTINEZ-FONTS

Assistant Secretary of Homeland Security

for the Private Sector

THE HONORABLE JAMES LAMBRIGHT

Chairman and President

Export-Import Bank of the United States

LISA DENNIS COURT REPORTING

(410) 729-0401

THE HONORABLE FRANKLIN L. LAVIN

Under Secretary of Commerce for

International Trade

MR. FLOYD GAIBLER

Deputy Under Secretary of Agriculture

for Farm and Foreign Agriculture

THE HONORABLE ALBERT A. FRINK

Assistant Secretary of Commerce for

Manufacturing and Services

PRIVATE SECTOR

MR. J.W. MARRIOTT, JR.

Chairman and CEO

Marriott International, Inc.

Chairman, President's Export Council

MS. BETTY MANETTA

President and CEO

Argent Associates, Inc.

MR. WARREN R. STALEY

Chairman and CEO

Cargill, Inc.

MS. CECILIA OCHOA LEVINE

President

MFI International Manufacturing, LLC

MR. HAROLD B. SMITH

Chairman of the Executive Committee

Illinois Tool Works, Inc.

MR. CHRISTOPHER JENNY

Senior Partner

The Parthenon Group

MS. SHARON ALLEN

Chairman

Deloitte & Touche

MR. JOHN S. CHEN

Chairman and CEO

Sybase, Inc.

MR. JAMES F. DICKE, II

Chairman and CEO

Crown Equipment Corporation

MR. MICHAEL L. ESKEW

Chairman and CEO

UPS

MR. TONY JAMES

President

The Blackstone Group

MR. PRAKASH PURAM

President and CEO

iXMatch Inc.

MR. LEE R. RAYMOND

Chairman and CEO

ExxonMobil

MR. TIMOTHY P. SMUCKER

Chairman and CEO

The J.M. Smucker Company

MR. SEAN HEALEY

President and CEO

Affiliated Managers Group, Inc.

MR. JOHN F. SMITH, JR.

Retired Chairman and CEO

General Motors Corporation

MR. LEE STYSLINGER, III

President and CEO

Altec, Inc.

MR. SIDNEY TAUREL

Chairman and CEO

Eli Lilly and Company

SPECIAL GUESTS

THE HONORABLE EDWARD P. LAZEAR

Chairman

Council of Economic Advisors

THE HONORABLE FRAN TOWNSEND

Assistant to the President for

Homeland Security and Counterterrorism

Accompanied by Dr. Rajeev Venkayya

I N D E X

PAGE

AGENDA ITEM

MEETING CALLED TO ORDER

Mr. J.W. Marriott, Jr., Chairman. ....... 6

THE U.S. AVIAN FLU STRATEGY

Ms. Frances Townsend

Assistant to the President

for Homeland Security. ....... 9

REMARKS

The Honorable Carlos M. Gutierrez,

Secretary of Commerce. ...... 23

SUBCOMMITTEE REPORTS:

SERVICES

Mr. Mike Eskew, Subcommittee Chairman

Ms. Sharon Allen, Subcommittee Member

* Presentation of Proposed Letter on

Avian Flu Preparedness...... ...... 33

TECHNOLOGY AND COMPETITIVENESS

Ms. Betty Manetta, Subcommittee Chairman

* Presentation of Proposed Letter on

Immigration....... ...... 38

TRADE PROMOTION AND NEGOTIATION

Mr. Lee Raymond, Subcommittee Chairman

* Presentation of Proposed Letter on

the U.S.-Korea Free Trade Agreement ...... 48

ECONOMIC OUTLOOK

The Honorable Edward P. Lazear, Chairman,

Council of Economic Advisors. ...... 50

REMARKS

The Honorable Franklin L. Lavin, Under Secretary

for International Trade and

Executive Director,

President's Export Council.. ...... 66

GENERAL DISCUSSION........ ...... 74

ADJOURNMENT....... ...... 82

P R O C E D I N G S

MEETING CALLED TO ORDER

By Chairman J.W. Marriott, Jr.

CHAIRMAN MARRIOTT: Good afternoon, everyone, and welcome to our summer meeting of the President's Export Council. It's warm enough for you, I hope, in Washington. I will call the meeting to order.

I would like to welcome our two newest members of the PEC: Lee Styslinger of Altec and Sean Healey of Affiliated Managers. Thanks. Good to have you all here. On behalf of the entire Council, we look forward to working with you and appropriating your insight and knowledge.

The Council has remained very active in generating advice for the President and for Secretary Gutierrez. We are welcoming him back from Iraq. We are thrilled to have him and Secretary Lavin back.

At our last meeting in December, we approved seven letters of recommendation, and we continued our conversations on visa acquisition issues with Secretary Gutierrez and Secretary Chertoff.

I am pleased that, since that meeting, the State and Homeland Security have announced Secure Borders and the Rice-Chertoff Amendment, which has the objective of strengthening border security, while at the same time facilitating travel into our country.

In this initiative are measures to expedite business and temporary worker visa processing and to expand the length of time foreign students have to enter, and remain, in this country.

We look forward to seeing results as the initiative is implemented. The Council also met last month by conference call and approved a letter on Foreign Direct Investment, the SIFIUS form.

That letter underscored what our message has consistently been, that the United States does not benefit if we close the doors to investment, people, technology, and competition.

The letters we are going to discuss today will continue to support our message of economic and cultural openness. Up for consideration today are letters on Avian Flu Preparedness, Immigration, and the U.S.-Korea Free Trade Agreement, all o