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Y2K and World Commerce

[ For Educational Purposes Only ]

Live Chat With Michael Copps, Assistant Secretary for Trade Development at the Department of Commerce

America has the taken the lead in addressing the Y2K problem. But is the rest of world ready? Michael Copps is the point person at the U.S. Department of Commerce dealing with this issue.
Hes working tirelessly to ensure that international companies are up to speed on the millennium bug computer problem.

All nations, developed or developing, computerized or not, are interwoven into a global web of economic interdependence that a Y2K mishap could unravel, said Copps in his testimony last month before the Senate Year 2000 Committee.

Copps joins us today at noon ET for a chat on ABCNEWS.com. Please post your questions for him now, and come back when the chat is live.

Moderator at 8:34am ET
Michael Copps joins us Friday at noon ET for a chat on ABCNEWS.com.
Please post your questions for him now, and come back when the chat is live.
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Put on the heat with intelligent, concise questions. Be polite and to-the-point.

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-- Leska (allaha@earthlink.net), April 16, 1999

Answers

I don't know how these chats normally work, but it sounds like they might want questions ahead of time to sort, select, and prepare answers? Might be a good opportunity to apply civil pressure and even glean some answers. Maybe we can go fishing and try to plumb the depths of Mr. Copps Y2K understanding?

How much thought has he put into the realization that a recession/depression is possible?

It's the economy ...

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-- Leska (allaha@earthlink.net), April 16, 1999.

This is what I asked:

85% of the ships built in the last 12-15 years are certified with what are called "unattended" engine rooms. That is, almost all of the world's international commerce is carried by merchant that run with too few crews to operate the engine rooms full time.

These ships depend on sensors, relays, and controllers that are Y2K-threatened, but obviously, not all will fail. Some will fail, though.

What is the status of the world's shipping? How will these possible failures affect us?

These are foreign-registered, foreign manned, foreign-owned, and obviously all of what we import comes from foreign ports that will be affected by possible power and services failures overseas. Since we (the US) can't control or regulate them, what will happen if they leak oil or cannot navigate safely in US waters?

-- Robert A Cook, PE (Kennesaw, GA) (Cook.R@csaatl.com), April 16, 1999.

Excellent question, Robert!!
As a mourning Cascadian seeing our beaches and beautiful coast fouled by beached ship oil, I believe shipping is already encountering systemic problems. The Pacific NorthWest coast and Columbia River have experienced more ships running aground with attendant environmental emergencies in the last few months than ever before. Almost every day now in the news we see another ship stuck.

The New Carissa disaster was a comedy/tragedy of errors, with scores of .gov .mil agencies involved. They really did try, and finally did sink part of the ship, after firebombing it, towing, losing, burning, torpedoing, etc. Incredible saga. A big bulk of the ship is still rusting away on the coast. You'd have to read the whole story to believe it.

The life-strangling oil is still being washed up throughout Cascadia, up to Alaska. Disaster. If any region declares a moratorium on shipping because of Y2K, it may be Cascadia. Too many bad experiences accumulating. Problem is, shipping contributes much to a humming economy up here. But the fish are headed toward extinction and the cost of the oil spills is horrendous -- watch Cascadia.

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-- Leska (allaha@earthlink.net), April 16, 1999.

Moderator at 11:58am ET
Michael Copps now joins us. Welcome to the chat!
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Nathan from frco.com at 11:59am ET
What country's Y2K problems pose the largest concern for the US?
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Michael Copps at 12:00pm ET
We're not in the businessw of trying to rate countriees' risks as we are in trying to alert the countries around the world to the Y2K problem. We're all connected in this world in a network, interdependent on one another, and I think we shouldn't try to single out one or two countries that might be causing special problems. We have an entire network to be sure it's working properly.
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Chad Ogle from dialsprint.net at 12:01pm ET
If the rest of the world does not upgrade thier computer systems, what ramifications would this have on the stock market and the overseas trade industry?
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Michael Copps at 12:03pm ET
I think we don't really know specifically what the precise effects are going to be. we know the whole area of financial services -- banking, stock markets, financial transactions -- is obviously a very critical sector which we must be councerned about. The whole financial industry by and large realizes that -- and certainly the big banks, stock exchanges and other major playes in this sector have been aware for somee time, have devoted attention to it, have committed human and finacial resources to it, so I think it's a sector out front and leading the way. That's not to say that there will be no problems, because I don't think we can say that about any sector, but I think in this one there are some grounds for optimism.
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Andrew from ghc.org at 12:03pm ET
Mr. Copps:
What role does the World Bank plan to play in the upcoming year? What requirements does the World Bank have for a country that it gives/lends money to?
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Michael Copps at 12:05pm ET
The World Bank I know has a Y2K fund that they are putting to work to help countries tackle this problem. The U.S. government has contributed some funds, about $12M to that fund, and I think other multilateral institutions and other export credit agencies will probably also involve themselves. We have an indication for example, that our own import/export bank here in the U.S. may shortly announce some programs in this regard.
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Tina Valentine from mapics.com at 12:05pm ET
If the worst should happen, and the "global web of economic interdependence" does unravel, how would the average US citizen be affected? How long do you think it would it take to recover in the US? Globally? Do you recommend we take any precautions now to prepare for hardship in early 2000?
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Michael Copps at 12:08pm ET
I don't think we're going to have a worst case scenario. One positive aspect of this whole problem is that we have had forewarning, and while it's true that some countries and some companies are starting perhaps late, it is also true that many other companies and countries are already well down the road toward solutions to the problem.

Again, I don't think anybody can predict 100%, but as I said when I testified, what I personally plan to do is to prepare my family as if we were expecting a snowstorm or a hurricane or some similar occurence, so I'd stock up a little bit on drinking water, canned food, firewood, and maybe have a little extra cash on hand, but I still believe that when all is said and done, that rather than having to resort to those, I will be able to go out and celebrate the new year, the new century, and the new millennium.
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Tim S. from tnt7.det3.da.uu.net at 12:08pm ET
What special measures have been implemented to assist developing nations in meeting Y2K challenges?
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Michael Copps at 12:12pm ET
We have a whole range of programs: Just two days ago, Sec. of Commerce Daley announced a program enabling businesses around the world to deal with the problem. These programs involve hodling conferences in over 15 countries globally, making information materials available around the world, using videos, CDRoms and the like, special programs to involve particularly small businesses around the world. We have a whole range of programs we are currently coordinating. We think these can make a significant difference, but let me just say that we don't propse to solve the Y2K problems of the world all by ourselves. I was struck at Sec. Daley's press conference earlier this week by a comment that was made by Mr. John Koskinen, who chairs the President's Council on the Y2K conversion, and he said, "We are bounded by the limits of what we can do." So just as we're not the world's policeman, we are not the world's Y2K problemsolver. We can identify the problem, we can emphasize its importan ce, we can suggest procedures fot others to follow to remedy the problem, and we can attempt to provide some incentives -- the rest is up to them.
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Myron from channellcorp.com at 12:13pm ET
Reports indicate that the maritime industry, which is a tremendously important link in international commerce, is far behind in Y2K efforts. Any comments?
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Michael Copps at 12:17pm ET
Well, let me start off by emphasizing the importance of that particular sector, because so many other sectors come together here -- whether it's energy or chemicals or machinery or food -- because all of these things have to be transported. I think we concluded early on that this was indeed a very important sector, so we have put some special attention to it.

We know what the busiest seaports are, we know where the critical points are, and let me add we shouldn't just be talking about ocean transportation because we need to be talking about transportation generally: airlines, railroads and trucking, for example. If we get a breakdown in one of these, obviously there will be problems. Just being realistic, I would think it would be plausible to expect some local glitches, but again we hope that because we have started on this, e can avoid wider pain from that.

The countries where some of the busiest ports are located are places where a good bit of work has been done. Three examples are Hong Kong, Singapore and Rotterdam -- three huge ports that seem to be seriously addressing the issue.
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Mark from [198.234.190.163] at 12:17pm ET
What would you estimate the cost of fixing the Y2K problem domestically and internationally? How did things get so bad? Were we just short-sighted?
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Michael Copps at 12:20pm ET
I can give you an estimate of some figures -- do not interpret them as official, but I have heard figures -- ell, let's start out with the U.S. gov't fixing its problem. We should note that we are well over the 80% range government wide in fixing the Y2K problem already. The cost estimate there is about $7 billion. If you look at the US generally, public and private sectors, probably we're looking at a $200 billion problem. Worldwide, and this is much more difficult to wrap your arms around -- an estimate of $700 billion would not be too far off the mark. Again, those aren't official numbers.
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Michael Copps at 12:24pm ET
Actually, we've been working on international outreach for quite a while. I think the alrge multinational companies have been aware of this problem for years, and have worked on it. But in just about any venue, when you run into a problem, you don't get everybody mobilized until the clock is ticking and people realize that they've got to do something now. It's true in the government, in the rpivate sector, and certainly it's true with regard to small and medium sized businesses around the world. These companies have so much on their plates, so many things to be constantly doing, taht sometimes it's difficult to focus on a problem that may appear 5 or 6 years down the line, but when we get w/in a year or so of the deadline, then we all get 20/20 eyesight. I think we're there now, but it doesn't do much good to try to find a villain who somehow made the situation worse. We need to work together. This problem can affect each and every one of us as individuals, it affects us as a country, and it affects us as citizens of an interdependent world -- and if that's not incentive enough for us to roll up our sleeves and work together, then I don't know what is.
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Y2Kaos from greenwich.com at 12:24pm ET
I've heard that nearly 40% of U.S. foreign oil imports from Venezuela and Saudi Arabia are at extreme risk. Is this true? If so, what is being done about it?
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Michael Copps at 12:30pm ET
We import in the United States about 50% of the oil we consume. It comes from a number of countries, including Venezuela, Saudi Arabia, and a number of others. We are concerned with keeping the oil flowing to keep our houses warm, to keep our factories running. The private sector companies who are in the business of getting that oil into the U.S. have the same concerns and they have been working very hard to avoid such disruptions. Again, I would emphasize that there are all sorts of linkages and interdependencies in getting that oil to the U.S., not just shipping but financial linkages, communications linkages, all kinds of linkages. I come back to that interdependency that I've already mentioned a number of times. we have to be working on all fronts.

Let me just add that this whole Y2K problem points up how interdependent we are with the rest of the world. We live in a global economy. Some people still seem to be debating whether America should participate in the global economy. When you realize all of the interdependencies and netowrks that I've talked about, you immediately realize that we are irreversibly square in the middle of the global economy, and the question is not: Should America participate in the global economy? The question is whether we will participate smartly or dumbly.
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Bingo1 from d.shentel.net at 12:30pm ET
How many years has the Department of Commerce been trying to alert the countries around the world to the Y2K problem?

Is the Department of Commerce Y2K-compliant & certified by an independent, third-party organization?
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Michael Copps at 12:37pm ET
I would really have to research the exact date, but off the top of my head I can recall us being involved in international outreach at either the end of 1997 or beginning of 1998 here in the international trade administration. As for our own compliance in the department, we are approximately 98% compliant. I think that certification is made by the chief information officer, but I would also add that there are all sorts of people, like inspectors general, who monitor and will continue to monitor the state of government compliance.

Let me make one more point: Where I work in the Dept. of Commerce, in an area called Trade Development, our job is to work with the private sector to promote exports. We were not set up to tackle a problem quite like Y2K, but we have realized its importance to exports and to imports, so we have made a commitment to utilize part of our resources to address the problem. We are part of a much larger effort working under the President's Council, and working under a fairly elaborate structure. Mr. Koskinen,for example, has established some 25 working groups representing all sectors of our economy. He has mobilized both the government agencies and the private sector to participate in those working groups, and I think really that's the key to success -- the partnering activities, the cooperation of the private sector and government at all levels. that's what I think gives us a pretty high level of hope.
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Gregg Abbott from los-angeles-01-02rs.ca.dial-access.att.net at 12:37pm ET
Given the assessment that there will be disruptions here and globally -by the CIA, Army, and others - why are we not making serious contingency plans nationally?
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Michael Copps at 12:39pm ET
Well, I think everything I've tried to indicate today indicates that we do take this problem very seriously. and that planning IS being done. We haven't talked about the national security ramifications of Y2K, because most of those are well outside the bounds of what I do. But I do know enough to indicate that those problems are being addressed with utmost seriousness, the most scrupulous attention, and with considerable resources.
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gkossuth from draper.com at 12:39pm ET
It seems we passed thru day 99 in year 99 without any hype from the press. No comment from doom-sayers either. Does this give you any sense of relief?
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Michael Copps at 12:43pm ET
Well, what gives me relief is that we have passed through some of these critical dates without very many real problems. To me, that's more fundamental than media reaction or doomsayer imput. I think things like the Federal Aviation Administration tests last week, other such tests in the financial community and in power -- these are cause for optimism. But again, they're not cause for complacency. We still have a lot of work to do, and I hope that's come through in what I've said today. There are countries who still need to address this problem more effectively, and there are sectors of the economy, both within the U.S. and outside the U.S., where considerable work remains to be done. Our challenge now is to take the progress that has already been made, speed it up over the next few months, and then I think we can not only solve the problem, but join together to celebrate the coming of the new millennium.

Thanks for your excellent questions.
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Moderator at 12:44pm ET
Thank you for joining us today.
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-- Leska (allaha@earthlink.net), April 16, 1999.

We're not in the businessw of trying to rate countriees' risks as we are in trying to alert the countries around the world to the Y2K problem.

Excuse me? They are "not in the business" of risk assessment? Let us hope this is simply a useful lie (or whatever term is currently in voge in DeeCee) on Mr. Copps' part. Unless they evaluate the most likely "failure candidates", how can they establish useful risk management scenarios and contingency plans?

Or am I misunderstanding his statement?

-- Mac (sneak@lurk.hid), April 16, 1999.

Yes, I know. The word is "vogue". "Voge" is a verb ("to voge"), which refers to reading Vogon poetry aloud with the intent of turning the listener's brain to blancmange. 8-}]

-- Mac (sneak@lurk.hid), April 16, 1999.

Well that was certainly a waste of time & bandwidth...

Hey Mac, is the "Vogon poetry" you reference from one of Douglas Adam's Hitchhiker books? Sounds vaguely familiar, kinda like Michael Copps answers.

-- Bingo1 (howe9@pop.shentel.net), April 16, 1999.

He is in the political business only - if he told us who is most threatened (with failure from potential Y2K troubles) - we would be able to respond and work out alternatice suppliers and actions. (For example, if Chile was threatened, importers here would look elsewhere for apples and fruit to import next Jan and Feb, (Argentina or South Africe or NZ).

This is good for the US and its companies.

But he would be "threatening" the growers in Chile - he would be "criticizing" (implicitly) the government of Chile for failing to mobilize that country to resolve its y2K troubles early enough.

That is "not right" - in the minds of the current administration apparently - "because it makes them (the other country) look bad". So they choose to deliberately not warn our citizens about problems anticipated abroad, to not share CIA assessments (as another example) about foreign risks, or other such information with its own citizens. These guys have consistently placed the interests of the UN, EU, and DNC first. That US citizens and companies are threatened by withholding information is irrelevent - in their minds.

-- Robert A Cook, PE (Kennesaw, GA) (Cook.R@csaatl.com), April 16, 1999.

Bingo1 -

Yes, the effect of Vogon Poetry (a.k.a., "the third-worst poetry in the Universe") is well-documented in Adam's The Hitch Hiker's Guide to the Galaxy. The Guide also has good advice for all of us, printed in large, friendly letters on its back cover, to wit:

"Don't Panic!" 8-}]

-- Mac (sneak@lurk.hid), April 16, 1999.

More wishy-washy glib dumb-rendering babble-speak. Disappointing. Not re.ass.u.ring. Do they take lessons and practice that way of speaking? Smoothly saying nothing? Uuuchk.

Robert, your points very interesting. Don't they know the disruptions will cause the weeples to pop their heads out of the sands and start reacting? No amount of "control" will be able to stem the rage people feel at this betrayal.

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-- Leska (allaha@earthlink.net), April 16, 1999.

Leska --- not at all, here is something you can bank on:

"We haven't talked about the national security ramifications of Y2K, because most of those are well outside the bounds of what I do. But I do know enough to indicate that those problems are being addressed with utmost seriousness, the most scrupulous attention, and with considerable resources."

Utmost seriousness. Most scrupulous attention. Considerable resources. Yummy.

-- BigDog (BigDog@duffer.com), April 16, 1999.

Big Dog, noticed those words too, obviously there's plenty going on, but *we* know that here, right? The public does not know. And at this point I can only think the govt either is severely underestimating Y2K impacts OR they are planning something very very heinous.

OR, anyone thought of this? They DO know and staged this incredibly dangerous fiasco in Yugoslavia so they would *have* to reinstitute the Draft so they *can* induct more men quickly into military service? ??? This occurs to me and I could believe it, but THERE ISN'T ENOUGH TIME LEFT TO THOROUGHLY TRAIN INDUCTEES to corral Y2K disruptions!

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-- Leska (allaha@earthlink.net), April 16, 1999.

The remote possibility that the above scenario could be part of the Y2K 'plan' is comparatively refreshing when considered against the other 'solution' nightmare discussed on the Forum today:

That of deliberately causing an escalating armed conflict in a sovereign foreign land known to breed World Wars and unremitting guerrilla warfare, with the intent of being forced to draft USA men into the military, send them overseas before Y2K, and therefore be able to work a dirty evil scheme of 'enhanced' martial law using foreign troops upon US soil.

At first glance "They DO know and staged this incredibly dangerous fiasco in Yugoslavia so they would *have* to reinstitute the Draft so they *can* induct more men quickly into military service?" may seem preposterous, but when one contemplates the cause and continuing bedlam of Y2K, even though it is unjustifiable, it is no longer such a bizarre thought. That Y2K was allowed to come to this point is strange indeed, disturbingly so.

The other possibility, foreign troops herding US citizens during martial law, is treasonous to an intolerable extreme.

mmmmmmmm mmmmmmmm mmmmmmm

-- Ashton (allaha@earthlink.net), April 16, 1999.

Ashton heard on the car radio this morning that what the Yugoslavians fear most is not death from the bombs, but living afterwards with the infrastructure down. Wonder if they've heard of Y2K?

It would seem if people really KNEW what might be coming, like a freight train hurtling down the time tracks with no stopping, they would be asking more questions and preparing with gusto.

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-- Leska (allaha@earthlink.net), April 17, 1999.