Business The parents, in turn, might pass it to their own governments, thus compromising confidential U.S. trade negotiating strategies. For some ISACs, the new rule has created controversy, problems, or both. Northern Telecom, the second largest manufacturer of telecommunications equipment in the U.S., was denied membership on ISAC 5 because it is a subsidiary of a Canadian company. Northern Telecom doesn't like it. The ISAC for nonferrous metals has been decimated by the rule because many of the mining companies in the U.S. are foreign-owned. Ironically, the Canadian government recently formed its own equivalents of the U.S. ISACs to prepare for the U.S.-Canadian trade talks as well as the multilateral trade negotiations. In Canada, they are called SAGITs, or Sectoral Advisory Groups on International Trade. U.S.-controlled Canadian companies are on some SAGITs, including the one for chemicals. But all members of ISAC 3 agree that, for the chemical ISAC, the new rule is a "nonproblem." Salsbury's Galloway is the only ISAC-3 member affected by the foreign ownership rule. A long-time member of chemical ISACs, he concedes that, although he is disappointed that he will not be on the committee any longer, he understands the rationale behind the new rule. Julius Goldman, meanwhile, just avoided the thrust of the new membership rule. Goldman, another veteran trade expert in the chemical industry, had been on several ISACs as a representative of American Color & Chemical. When Ciba-Geigy bought parts of American Color in 1982, Goldman remained on ISAC 3 as that company's representative. Under the new rules, Goldman would have had to resign. However, he recently formed his own company, J & M Chemicals, in Charlotte, N.C., and is listed on the new ISAC 3 membership roster as a representative of that company. There have been few other instances of foreign representation on ISAC 3 in the past. During the Tokyo round of negotiations during the late 1970s, Richard L. Alsager represented the Dry Color Manu14
July 21, 1986 C&EN
facturers Association, even though he worked for BASF-Wyandotte. Alsager was working for Chemetron when BASF-Wyandotte bought out Chemetron's pigments division in 1979. Alsager recalls that the subject of foreign ties came up when he became a BASF-Wyandotte employee. But there never was any controversy and the other ISAC 3 members agreed that he should serve at least until the Tokyo round of trade negotiations ended. He left ISAC 3 voluntarily in 1981. The new ISAC membership rule
won't prevent foreign-controlled U.S. companies from participating in the trade advisory process. They still will be able to present their opinions at the many open hearings held by Congress, the International Trade Commission, USTR, and other government trade-related agencies. The ISACs were created by the Trade Act of 1974 to provide a way for industry to funnel its opinions into government trade channels. There now are 17 ISACs, representing various sectors of U.S. industry. Earl Anderson, New York
Fluoridation chemicals supply problem aired The shortage of water fluoridation chemicals that began early this year eased in March (C&EN, Feb. 17, page 20). Now officials are seeking ways to avoid future shortages of the compounds, which are key to the federal government's program to reduce tooth decay by fluoridating municipal drinking water. Fluoridation chemical shortages coincide with downturns in the fertilizer business, since all three commonly used compounds are byproducts of phosphoric acid production. At a meeting last month called by the Centers for Disease Control (CDC) to discuss preventive measures, producers, distributors, and a variety of government officials agreed that cyclic shortages will recur. Debate focused on two possible solutions—increasing production and inventory of the compounds at the producer level, maintaining more inventory at the municipal level. Phosphoric acid producers balked at the idea of recovering more of the compounds from their byproduct streams on the grounds that such activity, already barely profitable, would be uneconomical. As a result, says national fluoridation engineer Thomas G. Reeves of CDC, those at the meeting agreed in general that municipalities should boost their storage capacity to be able to keep three months' supply on hand. Some large cities, such as New York City, regularly keep as little as 10 days' supply on hand, because the compound most economical for
large buyers—hydrofluosilicic acid— typically is sold in a 75% water solution. That means massive tank capacity is needed to maintain a longterm inventory. Nonetheless, representatives of large cities like Philadelphia, San Francisco, Baltimore, and Cincinnati, all of which had to curtail fluoridation this past winter, reacted mostly positively to the recommendation, Reeves reports. Also discussed were ways to make supply contracts more flexible. Suppliers want longer-term contracts (now typically just one year) in or der to justify new equipment investment and the ability to pass along cost increases mid-contract. Many distributors said they were squeezed badly this year between sharply higher compound costs and fixed municipal contract prices. Municipal officials generally agreed, but said contract prices should then also decrease if freight costs decline, for instance. Municipalities balked, however, at the suppliers' suggestion that performance bonds be dropped. Suggestions of legislative remedies, such as incentives for suppliers to increase storage capacity, fell flat, Reeves says. Reeves says the meeting helped by airing issues that had not been much discussed before between the various parties. Tangible results by way of improvement of the situation, however, probably will not come in the short term, he notes. "We probably won't know how much good has been done until the next fertilizer slump," he says. •
