[Congressional Record Volume 142, Number 96 (Wednesday, June 26, 1996)]
[House]
[Pages H6905-H6913]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
             INDEPENDENT AGENCIES APPROPRIATIONS ACT, 1997

  The SPEAKER pro tempore. Pursuant to House Resolution 456 and rule 
XXIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the further consideration of the bill, 
H.R. 3666.

                              {time}  1733


                     In the Committee of the Whole

  Accordingly the House resolved itself into the Committee of the Whole 
House on the State of the Union for the further consideration of the 
bill (H.R. 3666) making appropriations for the Departments of Veterans 
Affairs and Housing and Urban Development, and for sundry independent 
agencies, boards, commissions, corporations, and offices for the fiscal 
year ending September 30, 1997, and for other purposes, with Mr. 
Combest in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. When the Committee of the Whole rose earlier today, 
amendment No. 7 offered by the gentleman from Texas [Mr. Bentsen] had 
been disposed of.


                     amendment offered by mr. kolbe

  Mr. KOLBE. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment offered by Mr. Kolbe: Strike Section 421 of the 
     bill.

  Mr. KOLBE. Mr. Chairman, before I proceed, I ask unanimous consent 
that, while they are trying to work out the issue on the other 
amendments, that, the gentleman from Wisconsin, [Mr. Obey] is in 
agreement, that all debate on this amendment and all amendments thereto 
be limited to 60 minutes, with the time equally divided between myself 
and the gentleman from Minnesota. That is pursuant, I might add, to the 
agreement that we had agreed to earlier in the larger unanimous 
consent.
  The Chairman. Is there objection to the request of the gentleman from 
Arizona?
  Mr. OBEY. Mr. Chairman, I object.
  The CHAIRMAN. Objection is heard.
  Mr. KOLBE. Mr. Chairman, let me begin by laying out the background of 
this case. A few months ago, the University Corporation for Atmospheric 
Research, which is a part of the National Science Foundation, began to 
consider bids for a new supercomputer. They had been using a Cray 
computer, and they went through the normal procurement process, the 
conclusion of which was a bid an unusual bid in the amount of money 
that was set--$35 million--won by NEC. There is no dispute over the 
amount of dollars of this procurement. It is $35 million. But to 
continue, in the RFP that was proposed, the question was posed--what 
could you do for $35 million? Clearly the bid proposal from NEC, the 
Japanese company that makes supercomputers, was the best offer.
  Following that decision or that initial bid proposal, this 
information was conveyed to the White House. It was also conveyed to 
the Department of Commerce.
  The Department of Commerce then subsequently wrote a letter to the 
National Science Foundation in which they said they had investigated 
the matter and made a preliminary decision that there was clear dumping 
here. That is, NEC was selling this computer or the software for this 
computer, at well below cost.
  As a result of that letter, even though it was simply a letter and 
nothing more, remember no formal investigation has ever been conducted 
into allegations of dumping, language was added in the subcommittee and 
retained by the full committee, which

[[Page H6906]]

would put in place a limitation on funds for any employee of the 
National Science Foundation that proceeds to sign a contract for the 
purchase of an NEC computer, if, there has been a preliminary or final 
finding of dumping on the part of the Department of Commerce.
  My amendment would seek to strike that language. Why do I seek to do 
this? Am I against Cray computers, American-made computers as opposed 
to Japanese computers? Of course not.
  The fact of the matter is, Mr. Chairman, we have a process, a process 
that is established in law. That process is that an antidumping 
procedure may be initiated if dumping is believed to have occurred. 
Almost always it is initiated by the industry. But it can be self-
initiated by the Department of Commerce. That is rarely done and has 
not been done in this case. In fact, there has been no initiation of an 
antidumping case on the part of the Department of Commerce regarding 
this procurement.
  The Department of Commerce simply on their own wrote a letter which 
bypassed this internationally recognized procedure and simply said, we 
think there is dumping going on here.
  The law is very clear. If Commerce decides to initiate a dumping 
procedure, they then send that inquiry to the International Trade 
Commission. The International Trade Commission then decides on an 
initial basis, if injury has been done. They then send it back to the 
Department of Commerce to determine the amount of the damages and 
injury that has been done, or whether injury has occurred. The 
International Trade Commission then makes a decision as to the extent 
of the damages, and the final result is that a sanction may be applied.
  The only sanction under the law, and I would hope that this body 
cares a little bit about following the law, the only sanction under the 
law is that a tariff may be applied against the company that is 
dumping, the industry which is dumping, in this case against NEC. It is 
very clear, and in fact our trade laws make it very precise, that we do 
not link procurement with dumping laws because that violates the 
international agreements that we have, World Trade Organization 
agreements.
  We do not link the procurement process with dumping. So it is against 
the law for us to unilaterally impose punitive measures and say, you 
cannot go ahead and buy this computer. If indeed the NSF proceeded to 
buy this computer and it was found that there was dumping, a tariff may 
be applied in the future, against any other computers that are bought. 
That is the background of this case.

  In essence, the action of the subcommittee of adding this language 
violates our procurement laws. It violates our antidumping law and it 
violates WTO agreements. We have made a big thing in this country, and 
I hope in this body, about the rule of law. We have tried to get other 
countries to follow the law. We have tried to get those countries to 
follow the law so that they would abide by the rule of law.
  We have made a big case about getting Japan to open its market to 
computers, and we have had some success.
  The CHAIRMAN. The time of the gentleman from Arizona [Mr. Kolbe] has 
expired.
  (By unanimous consent, Mr. Kolbe was allowed to proceed for 2 
additional minutes.)
  Mr. KOLBE. Mr. Chairman, we have had some considerable success in 
this regard. In fact, Cray has sold and installed in Japan 170 
supercomputers. NEC has installed in Japan, their own country, 80 
computers.
  In the United States, Cray has installed 320 supercomputers versus 2 
for NEC and none to a Government corporation, a Government agency.
  Mr. Chairman, are we to suggest here tonight that we are going to 
deny the right of the NSF, which has looked at the bids and has decided 
that this is clearly the superior computer, that we are going to say, 
you cannot proceed with that and jeopardize all of the trade laws, all 
of the sales which Cray and others have made, all of the efforts we 
have made to open this market to our computers and to other countries 
and to other companies that sell in that market?
  I want to make it clear that the bottom line has nothing to do with 
whether it is Cray or NEC that gets the NSF contract. It is a process 
that must be followed here. There is a process for an antidumping case. 
The process has not been followed by the Department of Commerce, and 
this body is preparing to violate it in a very major way tonight. 
Because we are going to say, notwithstanding our procurement laws, 
notwithstanding the antidumping laws, and notwithstanding the WTO and, 
by the way, Japan will have a perfect case to take against us to the 
WTO and we will be sanctioned then on all computers that we try to sell 
in Japan, notwithstanding all that we are simply going to say that, if 
the Department of Commerce writes a letter, with no investigation ever 
conducted, that you cannot buy this computer. That violates the law. It 
violates the rule of law. It violates all the standard procedures, and 
we ought not to do it.
  Let us follow the procedure. We stand for the rule of law. We stand 
for doing the right thing. I urge my colleagues to reject this 
language, to support the Kolbe amendment, to reject this language and 
to remove it from the legislation.
  Mr. OBEY. Mr. Chairman, I rise in opposition to the amendment.
  Mr. Chairman, the issue here is very clear. The issue is whether we 
are going to stand up for America and stand up for fair trade under the 
rule of law or not.
  What are the facts? This Congress is being asked to appropriate $277 
million, and the purpose for that, I quote, is ``to promote fundamental 
research in education and computer and information sciences and 
engineering and to maintain the Nation's preeminence in these fields.''
  Despite that, a grantee of the National Science Foundation wants to 
purchase a supercomputer. They have put out a bid to buy it for a fixed 
price of $35 million. Three companies bid, one American company and two 
Japanese companies. The United States machine on a pound-for-pound and 
chip-for-chip basis ran at a faster clock speed than did their Japanese 
competitors. But one Japanese company, NEC, proposed to sell three 
times the machine at an estimated cost to manufacture of somewhere 
between $90 million and $110 million. So they proceeded to try to sell 
a machine which cost three times as much as the price at which they 
were willing to provide it to the NSF grantee.
  The NFS was warned by the Commerce Department that this appeared to 
be a case of dumping, and it appeared to be a violation of our trade 
rules. But before the Commerce Department could get a written document 
to the NSF, NSF decided to proceed anyway because they wanted to have 
that computer at a cut-rate price.

                              {time}  1745

  Now the question is why would the Japanese sell a $110 million 
computer for 35 million bucks? It is very simple. The supercomputer 
industry is critical to the future economic strength of this country 
and to our national security. The supercomputer industry is very small, 
but it is a cornerstone of U.S. competition and of our competitive 
posture.
  It is crucial to the design of aircraft, it is crucial to the design 
of jet engines.
  In World War II, one of the reasons we won is that we broke the 
Japanese and German codes. The Nation with the best supercomputer 
capacity can decode another Nation's secrets, it can predict weather 
better, it can unravel the mysteries of genetics. It is absolutely key 
in the design and simulation testing for new automobiles, for new 
weapons, for new aircraft, for new items of virtually every kind in the 
economy, for new drugs.
  A supercomputer, for instance, is key to the design of the new Boeing 
777. And yet financial analysts who look at what is happening in this 
field worry about the long-term survivability of the U.S. supercomputer 
industry. Now, they do not worry about it because they think we do not 
produce products of quality. They worry about it because of the huge 
deep pockets that Japanese corporations have in comparison to American 
corporations who produce these supercomputers. U.S. companies have to 
finance their R&D, their development of new products out of profits 
from current sales. But in Japan, Fijitsu and NEC are backed by 
virtually limitless credit from their huge mega banks.

[[Page H6907]]

  I would point out that neither Japanese supercomputer company has 
ever made a profit selling supercomputers. They are willing to sell at 
a loss simply because they want to break the U.S. market, they want to 
drive the U.S. industry right off the face of the globe, and then they 
will have an absolute and total monopoly on supercomputer capacity and 
capability in this world.
  So now what this bill says is something I suppose some people see as 
very shocking. It says simply that none of the funds can be used for 
this agency to purchase a supercomputer if the Commerce Department 
determines that it has been dumped on the U.S. market. Now, the 
Commerce Department has not yet made a preliminary nor a final 
determination. They have made an initial guess about it, and they tried 
to stop the agency and slow them down until this could be evaluated, 
but the agency was hell-bent to go ahead because they were putting 
their own narrow interests, in my view, ahead of the broader interests 
of the country.
  The CHAIRMAN. The time of the gentleman from Wisconsin [Mr. Obey] has 
expired.
  (By unanimous consent, Mr. Obey was allowed to proceed for 3 
additional minutes.)
  Mr. OBEY. Now, the authors of this amendment or the author of this 
amendment is saying that it violates trade laws. It most certainly does 
not. There is no trade law, there is no trade pact which we have joined 
which requires us to accept dumped goods. The authors say, ``Well, why 
don't you follow the process normally used for consumable items? That's 
what you ought to do.''
  The problem is it is very different if one is dealing with an 
automobile versus a supercomputer because if one simply waits and 
allows for a final determination down the line, the only penalty is to 
assess an additional tariff. Japan has already indicated they will 
gladly accept that additional tariff in order to bust the U.S. market 
and compete successfully because of their deep pockets.
  We are told that the Congress is violating the law if they do what 
the committee is suggesting. They do not. The Congress does not violate 
the law. If my colleagues take a look at Footnote 24 to the antidumping 
agreement to which America subscribes, there is a recognition that 
other actions can be taken. It is suggested that we are violating the 
procurement law. That is not correct, because the procurement law only 
applies directly to American agencies, and what we are discussing here 
is the action of a grantee of a U.S. agency.
  So there is in no way a violation of either U.S. law or violation of 
trade agreements to which we have become a party.
  There is a reason why the gentleman from California [Mr. Hunter], why 
the gentlewoman from Ohio [Ms. Kaptur], why myself, why the gentleman 
from Minnesota [Mr. Sabo], Ross Perot and a wide variety of people in 
both parties support the committee action: because they recognize that 
it is critical to the security interests of this country, they 
recognize that it is critical to the long-term economic needs of the 
country.
  All we are saying is, if in the end this computer is determined to be 
purchased at a dumped price, do not buy it. That is all it says. We 
could have gone much further, as has been done in the defense bill, and 
simply say, ``You can't sell any foreign computer.'' We did not say 
that. We preferred to allow the Commerce Department to make a rational 
determination. That is what one would do if they are interested in 
protecting the national security interests of the United States.
  Mr. Chairman, I would urge a ``no'' vote on the amendment.
  Mrs. JOHNSON of Connecticut. Mr. Chairman, I move to strike the last 
word and rise in support of the Kolbe amendment.
  Mr. Chairman, because of Japan's trade barriers, the United States of 
America negotiated an agreement with Japan to have free, open, and 
transparent trade in government procurement of supercomputers. yes; 
this does violate that agreement. It is written so broadly it does 
violate that supercomputer bilateral agreement. It also violates the 
World Trading Organization's, the WTO's, antidumping agreement. It also 
violates a WTO government procurement agreement.
  Now, who wins from this international trading system? America wins. 
If the international trading system goes under, we lose international 
protection of property rights, of intellectual property rights. If is 
all part of the same system. We benefit from the international protocol 
that governs trading, and we cannot go out there and violate the 
agreements that America has put her signature to.
  As a result of this agreement, whose goal it was to overcome Japanese 
barriers in their market, the United States has sold 12 supercomputers 
to the Japanese Government. Now a Japanese company is about to sell one 
to our Government. That is a pretty good deal.
  The American market is growing only slowly because our population is 
growing only slowly and our population is aging. Older people do not 
buy as much as younger people. If we are to have a rising standard of 
living for our folks, if we are to have faster growth in our economy, 
we must be competitive in the international market and we must have 
solid rules that govern international trading, or our kids will not 
have the career opportunities they want and they will not have the 
rising standard of living they hoped for.
  If there is one thing my constituents are concerned about and one 
thing they say to me day after day, it is, ``We're concerned about wage 
stagnation''. And believe me, Connecticut has had a tough time in the 
last 5, 6, 7 years. Wage stagnation, slow economic growth; those are 
the problems we face, and if we persist or if we go forward with this 
proposal that blatantly violates an agreement we put our name to, we 
will not only lose in the short term, as Japan retaliates in whatever 
industry she targets, but in the long term we lose the protection of 
international trade law and that will cost us jobs. Retaliation hurts. 
It is not neutral. It costs jobs. It cuts incomes. But worse than that, 
it sends a terrible signal. The affirmative action to abrogate an 
agreement we are a party to, following passage of Hill-Burton and the 
legislation offering trade with Iran, sends a signal to the 
international community that we are not prepared to adhere to the only 
trade protection that can assure fair trade. I have fought all of my 
years here in Congress for fair trade. I fought for the machine tool 
industry, I fought for the bearing industry, I fought to preserve our 
dumping laws, I fought for 301 retaliation. I have been over there in 
Geneva with many of my colleagues with Chairman Rostenkowski, former 
chairman of the Committee on Ways and Means, as the final deals on the 
GATT agreement, were made. We fought hard to get our way and we won on 
most points.
  For us now to purposefully, consciously, by legislation, violate 
agreements that we put our name to and that are benefiting us simply is 
nuts, and it is going to destroy our credibility as a member of the 
international trading community. It is going to hurt international 
trading companies, and more and more we know it is the small companies 
who are in our export market, and it is going to cost jobs. It is going 
to undermine the very export promotion programs, the export growth, 
that is driving America's economy.
  We do not domestically have the buying power anymore to guarantee our 
people a rising standard of living. We do not have it. We are not 
growing that rapidly, and we are aging rapidly. We depend on success in 
the export market.
  Not to support the amendment offered by the gentleman from Arizona 
(Mr. Kolbe) to strike this provision from this bill is to say to 
people, ``I'm more interested in politics that I am in your wages and 
in your economic future and in the strength of this Nation and the 
preservation of the very regimen that guarantees, that has the best 
hope of creating for us free and fair trade worldwide, and with that 
free and fair trade over the decades ahead, prosperity and peace.''
  I urge support of the Kolbe amendment.
  Mr. LEWIS of California. Mr. Chairman, there has been a bit of 
discussion on both sides regarding the question of time limitation 
earlier, and, as I understand it, the gentleman from Wisconsin [Mr. 
Obey] and the gentleman from Arizona [Mr. Kolbe] are in agreement 
separately to have 20 minutes on

[[Page H6908]]

each side on this amendment. Presuming that, I ask unanimous consent to 
limit the time to 40 minutes, 20 minutes on each side.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
California?
  Mr. SKAGGS. Reserving the right to object, Mr. Chairman, if I may, I 
have a very direct district interest in this particular controversy, 
had not been involved in the negotiation on the time limit and, 
therefore, have not had a chance to discuss with the gentleman from 
Arizona [Mr. Kolbe] what the allotment of time might be under the 
proposed unanimous-consent request.
  Mr. LEWIS of California. Mr. Chairman, will the gentleman yield?
  Mr. SKAGGS. I yield to the gentleman from California.
  Mr. LEWIS of California. Mr. Chairman, the request is 20 minutes on 
each side.
  Mr. SKAGGS. I mean within the gentleman's 20 minutes, and I just need 
assurances of an adequate piece of that time from the gentleman.
  Mr. LEWIS of California. We will try to see if we can get him to 
yield.
  The CHAIRMAN. The gentleman from California's unanimous-consent 
request is for 20 minutes controlled by the gentleman from Arizona [Mr. 
Kolbe] and 20 minutes controlled by the gentleman from Wisconsin [Mr. 
Obey].
  Mr. LEWIS of California. Yes, Mr. Chairman.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
California?
  There was no objection.
  Mr. KOLBE. Mr. Chairman, I yield 4 minutes to the gentleman from 
California [Mr. Campbell].
  (Mr. CAMPBELL asked and was given permission to revise and extend his 
remarks.)
  Mr. CAMPBELL. Mr. Chairman, I wish to begin on the question of the 
Government procurement code, and I would yield to my good friend from 
Wisconsin, if I could have his attention. Might I have the attention of 
the gentleman from Wisconsin [Mr. Obey], the author of the provision to 
which I am speaking? I wanted to offer to yield to my good friend from 
Wisconsin, and if I am wrong, I will be the first to admit it.
  But I have a copy of the procurement code in front of me, and the 
reason why I am speaking is that I took the gentleman's comments to say 
that the procurement code did not cover this case because the 
procurement is by the National Science Foundation, and I will yield if 
the gentleman would make his point regarding the procurement code, and 
then I will read the section on point.

                              {time}  1800

  Mr. OBEY. Mr. Chairman, will the gentleman yield?
  Mr. CAMPBELL. I yield to the gentleman from Wisconsin.
  Mr. OBEY. I did not have a point to make on the procurement code, Mr. 
Chairman. The gentleman from Arizona [Mr. Kolbe] suggested we were in 
violation of procurement laws. I said that we were not, because the 
argument that has been made about that relates to the action of 
government agencies, not grantees.
  Mr. CAMPBELL. Mr. Chairman, I appreciate the gentleman for 
responding. Here is exactly why I want to speak to the point. The 
procurement code reads, in article I section 3: ``Where entities, in 
the context of procurement covered under this Agreement, require 
enterprises not included in Appendix 1 to award contracts in accordance 
with particular requirements, Article III shall apply . * * *''
  So the procurement code in itself deals with Government agencies and 
then, in article I, section 3, says, and I repeat: ``Where entities, in 
the context of procurement * * * require enterprises not included in 
Appendix 1 to award contracts in accordance with particular 
requirements, Article III shall apply. * * *''
  So unless the gentleman wishes to correct me, and I would yield to 
him for that purpose, I believe his point is, with good intention no 
doubt, simply erroneous--that the procurement code does apply where a 
Government agency imposes a requirement on another enterprise in regard 
to a contract, as this law would. My friend, the gentleman from 
Arizona, makes a very valid point. This provision violates the 
procurement code.
  Mr. KOLBE. If the gentleman would yield this amendment is a 
limitation on the National Science Foundation, which is an agency, so 
it clearly does go to the procurement code, to the National Science 
Foundation. I would also make the point that the procurement code says 
we must give national treatment: We cannot treat one country 
differently than another. This does that, it violates the WTO, it 
violates the procurement code.
  Mr. CAMPBELL. Mr. Chairman, I grant the gentleman's point, but I 
think we have an even better point. Even if the Obey language were a 
requirement upon an enterprise, rather than the Government entity 
itself, it is covered by the procurement code. So I believe we have 
them both ways. This does violate the procurement code. The policy 
question I have is, do we want to violate the procurement code? I 
certainly hope we do not wish to violate international trade law, but 
that is what Government procurement code is.
  The second and last point that I have to raise is the issue about 
violating the antidumping code. I would like the chairman's permission 
to recite what a commissioner of the U.S. International Trade 
Commission has told my good friend, the gentleman from Arizona, on June 
19. He said, ``I believe that the amendment, if passed,'' referring to 
the amendment by the gentleman from Wisconsin, ``is in probable 
violation of our GATT-WTO obligations. In particular, the amendment 
appears to be inconsistent with article 18.1 of the antidumping code, 
which prohibits GATT members from taking punitive measures in response 
to dumping, other than those set forth in the antidumping code.''
  The reason is this: We have in our antidumping law a requirement 
that, first of all, the Department of Commerce find that there is a 
difference in price in the country where the good is sold and made and 
the country into which it is imported. Then following that, there must 
be an injury finding. The reason is the natural concern that countries 
have that if goods are selling at two different prices in two different 
markets just because the market conditions are different, that that may 
or may not be unfair. But if there is injury to the U.S. domestic 
market because of it, then it is unfair. I note that the gentleman from 
Wisconsin's amendment does not include that injury requirement.
  Mr. OBEY. Mr. Chairman, I yield 2 minutes to the gentleman from New 
York [Mr. Walsh].
  Mr. WALSH. Mr. Chairman, I thank the gentleman from Wisconsin for 
yielding time to me.
  Mr. Chairman, I rise in opposition to the Kolbe amendment and in 
support of the committee bill. Mr. Chairman, this procurement for the 
NCAR, National Center for Atmospheric Research, for a supercomputer of 
Japanese make, Japanese make, NEC, what we are doing is supporting a 
policy of subsidizing prices of Japanese products by the Japanese 
Government for sale in the United States.
  We have a history of this. My background was in telecommunications. I 
saw it happen in the telecommunications industry. We are talking about 
a sale of a computer for $35 million that has been estimated to be 
worth $100 million. If this was a supermarket, this would be referred 
to as a loss leader. You walk in the door, you buy a quart of milk for 
50 cents, and you hopefully, as far as the supermarket is concerned, 
spend a whole lot more money while you are there. This is a way to get 
in the door. It is dumping. It is a subsidy.
  If our laws do not cover this, I would be surprised, but good 
judgment should. Good judgment should. If the NSF has found themselves 
a good deal by comparing two fairly similar computers, and they get a 
similar price so they opt for the Japanese make, that is fine; but the 
fact is the Commerce Department has determined that NEC is dumping, and 
we should be supporting that activity. So I would strongly urge a 
``no'' vote on the Kolbe amendment, and stop rewarding foreign dumping 
in the United States.

  Mr. KOLBE. Mr. Chairman, I yield 5 minutes to the gentleman from 
Colorado [Mr. Skaggs].
  Mr. SKAGGS. Mr. Chairman, I thank the gentleman for yielding time to 
me.

[[Page H6909]]

  Let me pick up where the gentleman from New York left off, because 
there has been no Department of Commerce determination of dumping. What 
there has been is what I think would be best referred to as an 
extraordinary back-of-the-envelope, very unusual, preliminary, 
preliminary guess by the Department of Commerce that there might be 
dumping. But upon analysis, two things are really very clear: First, 
they did the arithmetic wrong; second, they should not have done the 
arithmetic to begin with, because it is out of the normal process for 
dealing with these issues.
  As the gentleman from California pointed out, the law provides a very 
firm, formal methodology for determining whether below-cost, unfair 
pricing occurs, and then what the remedy should be. We have not gotten 
to that point yet.
  Clearly we should not be using taxpayer money to buy a foreign-made 
good that is dumped in this country. No argument about that. But we are 
getting way ahead of ourselves in assuming that that has been 
established in this case, because it has not.
  There has been only one other case that anyone that I have been able 
to find could remember where the Department of Commerce issued this 
kind of an extraordinary predetermination before a case has even been 
filed. So, for some reason, the Department of Commerce wants to get 
ahead of its normal process in this case. In doing so, it simply, as 
far as I have been able to determine, probably did a sloppy job.
  The reason it reached its conclusion, as far as one can tell, and we 
are none of us experts in this kind of analysis, was because they 
apportioned the R&D costs attributable to this machine across one-tenth 
of the number of units that should be used, thereby greatly inflating 
the proportion of R&D costs that would be factored in; and second, 
because they failed to look at it as a lease transaction, in which 
there would be residual value going back to the manufacturer or the 
lessor, which would serve to increase the net profit.
  But in any case, Mr. Chairman, we do not have any business doing this 
on the floor of the House of Representatives.
  What this is about is the earnest, good faith effort made by the 
National Center for Atmospheric Research [NCAR], which happens to be 
based in Boulder, CO. It does world class science on the atmosphere. It 
needs the most powerful computer capability it is able to buy with its 
NSF grant, with taxpayer money, to do the best work it can for all of 
us.

  NCAR started out some time ago in this procurement effort, put out an 
RFP to 14 prospective vendors, 12 of them U.S. manufacturers; has 
strictly adhered to the Federal acquisition regulations throughout the 
process; ended up with three serious proposals; asked all of those 
people to go through best and final offer; and has now, at the request 
of the Department of Commerce, undertaken its own very rigorous 
analysis to determine whether there is any unfair pricing involved in 
this. I am absolutely certain it will be perfectly prepared to 
reexamine this whole exercise if there is any solidly developed 
determination, preliminary or final, of unfair pricing. But we simply 
do not have that.
  Mr. Chairman, if we want to have a debate in this body about whether 
we should ever allow a supercomputer to be purchased with U.S. 
Government taxpayer funds from other than a U.S. manufacturer on 
national security, national infrastructure grounds, let us have that 
debate in an appropriate setting. It is not appropriate to be having 
that discussion as an adjunct to an appropriations bill. We already 
have in law all the guarantees and remedies necessary to deal with 
unfair pricing if it should turn out to be the case in this instance.
  With respect to the question of the future of U.S. supercomputing, 
there are, by GSA analysis, General Services Administration analysis, 
some 700 supercomputers currently owned by various agencies of the U.S. 
Government, approximately 500 of those 700 in various Defense 
Department and national security-related agencies that are essentially 
going to be buying American. So if there is any question that we are 
going to have a very, very substantial and virtually guaranteed market 
for an American supercomputer industry, rest easy.
  Mr. OBEY. Mr. Chairman, I yield 2 minutes to the gentleman from 
Michigan [Mr. Levin].
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)
  Mr. LEVIN. Mr. Chairman, we could debate the technical issues, and I 
enjoy doing that on antidumping. This provision that the Kolbe 
amendment is attacking may not be perfectly drawn, but let me say I 
think the amendment is a very imperfect solution. There is a real 
problem here. In the past, industries in this country have been 
targeted. In the 1980's it was semiconductors, machine tools, 
televisions, VCR's; almost you name it, and a major industry was 
targeted.
  Now there is considerable evidence that supercomputers are being 
targeted, and what is happening is that profits from a sanctuary market 
in Japan are being used to drive out the remaining U.S. companies. Most 
of them are out of business.
  I suggest, Mr. Chairman, that this is not the appropriate forum to 
discuss all the intricacies of our antidumping laws and the role of 
this agency or another agency. There is a problem here. The bill has an 
honest effort to address it. If there are some technical problems with 
it, it can be handled later on, but do not try to cure that by ignoring 
what is a real problem in an important industry, as the L.A. Times 
said, one of the industries of the future, really of the present, a 
corner of American competitiveness.
  It has been said we are getting way ahead of ourselves. To the 
gentleman from Colorado [Mr. Skaggs], I would say in the past the 
problem has been we have been way behind when American industries have 
been targeted and have been lost. Let us not lose this one. Defeat the 
Kolbe amendment.
  Mr. KOLBE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, the gentleman from Michigan [Mr. Levin] is absolutely 
correct. There is a problem here. He said, let us not worry about the 
technical aspects of this. We can correct that later. There is a 
problem, all right. We are violating GATT and WTO agreements, we are 
violating our antidumping laws, we are violating our procurement laws; 
just minor little details, apparently, to some people. I think these 
are important matters. We have a firm commitment in this country to the 
rule of law. We ought not to so casually and cavalierly disregard that.
  I would also like to respond to something that was said earlier by 
the gentleman from Wisconsin when he talked about the danger that we 
face of driving our industry out. Some danger: Cray has installed 130 
supercomputers in Japan versus 80 by NEC and Fujitsu; in other words, 
more than 50 percent more by an American company. We are endangering 
that, all right. We endanger selling any more American computers in 
Japan if we take this kind of action, because they have a perfect 
recourse under the WTO to stop us, to levy fines and sanctions against 
us from selling computers.
  Another point that should be made is that Cray has installed 320 
supercomputers in the United States versus 2 from NEC. Some danger that 
Cray is in here. The gentleman is right, we are endangering. We are 
endangering the U.S. industry with this action, not with the action 
that was taken by the National Science Foundation and its grantee, the 
University Corporation for Atmospheric Research, which did follow the 
procurement procedure exactly as they were supposed to.
  Finally, let me say with regard to the matter that NEC is selling at 
below cost, the National Science Foundation, or rather the University 
Corporation for Atmospheric Research [UCAR], asked for an analysis to 
be done by a respected law firm here in Washington on this issue. They 
concluded that the Department of Commerce analyzed the wrong 
transaction. The treaty antidumping statute applies to the sale of 
imported merchandise to the first U.S. party, unrelated to the 
exporter. It does not have anything to do with leased kinds of 
equipment.
  It also says that antidumping law provides, they concluded, that the 
fair value determination should be made by comparing prices for the 
same or similar products in the exporters' market or third 
country market with the U.S. price; but they conducted the type of 
constructed value analysis that is a method of price comparison that is 
invalid in this country, because of the

[[Page H6910]]

absence of a home market or third country sales that have not been 
demonstrated.

                              {time}  1815

  So even on the back-of-the-envelope analysis that was done, by 
Commerce and the gentleman from Colorado [Mr. Skaggs] had it exactly 
right, it was a back-of-the-envelope kind of thing, they said on their 
own that they did not want to actually initiate antidumping because 
they were uncomfortable. The Department of Commerce instead just sent 
this letter. So they violated the process that they are supposed to 
follow, that the industry is supposed to follow to have an antidumping 
case.
  We have an antidumping process because Members on that side of the 
aisle and this side of the aisle said there has to be a way from 
companies to deal with this when there are allegation of dumping. Well, 
let us follow the law.
  I would just say that what I am talking about here is the process. 
Again, there is a process to be followed. We are not following that 
process, and we are suggesting that we are just simply going to ignore 
the law.
  Mr. Chairman, I reserve the balance of my time.
  Mr. OBEY. Mr. Chairman, I yield 2 minutes to the gentleman from New 
York [Mr. Houghton].
  (Mr. HOUGHTON asked and was given permission to revise and extend his 
remarks.)
  Mr. HOUGHTON. Mr. Chairman, I thank the gentleman for yielding me 
time.
  I rise to oppose the Kolbe amendment. I do so reluctantly because I 
have respect for the gentleman from Arizona [Mr. Kolbe] and for the 
position which he is taking. However, we can argue the legalities 
endlessly here in terms of whether we are violating any procedural 
process with GATT or the World Trade Organization.
  I am not going to get into that because there are interpretations on 
both sides of this thing which I could agree with if I listen to very, 
very erudite lawyers.
  However, what I am saying is this: Over a period of years I have seen 
egregious examples of dumping coming in very small packages. It would 
seem to me this particular case with the National Science Foundation 
that it is a perfectly normal and legal and obvious approach to have 
the Department of commerce review this to see whether there is any 
dumping.
  Once you get an acknowledgment of the fact that NEC or any other 
computer is approved by an extraordinary group like the National 
Science Foundation, then you have something far more than the purchase 
of that one unit. I think is a perfectly normal process, I agree with 
it, and I reluctantly oppose the Kolbe amendment.
  Mr. OBEY. Mr. Chairman, I yield 4 minutes to the gentleman from 
Minnesota [Mr. Sabo].
  Mr. SABO. Mr. Chairman, I rise in strong opposition to the Kolbe 
amendment.
  In behalf of the language that is in the bill, might I inquire of the 
gentleman from Wisconsin [Mr. Obey] what our language is in the bill?
  Mr. OBEY. Mr. Chairman, will the gentleman yield?
  Mr. SABO. I yield to the gentleman from Wisconsin.
  Mr. OBEY. Mr. Chairman, all the language says is that, if it is 
determined that this supercomputer has been dumped on to the U.S. 
market, that it cannot be bought.
  Mr. SABO. I thank the gentleman.
  Mr. Chairman, reclaiming my time, I have listened to some of these 
arguments. The gentlewoman from Ohio [Ms. Kaptur] will speak later. The 
gentlewoman knows our trade deficit with Japan. I think it is $70 
billion or so; $60 billion, only $60 billion.
  Here we have a very sensitive industry. I believe we have spent 
something like $5.5 billion on R&D on supercomputing through DOD and 
the NSF since 1991 to make sure that we retain our technological edge 
in this country. It is a very small industry, very key to our economy, 
very key to our national defense. We are told, I heard here a while 
ago, that, unless we ignore dumping in this case, that is going to 
destroy the American standard of living. That sort of leaves me 
confused.
  It seems to me that we should make sure on this very crucial, small 
industry that the Japanese do not dump a product into our markets, 
particularly when it is taxpayer dollars going to purchase it. It seems 
to me we should continue on the policy of R&D to make sure we retain 
our national edge.
  I hear all of these things, how we should be afraid of Japanese 
retaliation. The reality is the history of competition in Europe is the 
U.S. products win. We have not won in Japan. In 1995, the public 
supercomputer procurement market share in Japan: United States, 8 
percent; Japanese, 92 percent. Do you think that is because of quality 
and cost and price? No; it is not. Our products are the best and the 
best price. Procurement by the Government in Japan in 1995, 11, 
Japanese; 1, United States. Do you think that is because they had 
superior quality and price? No.
  So I do not know. Mr. Chairman, I am not a technical expert to make 
the judgments on whether they are dumping. All indications are that 
they are. This amendment would ask the Department of Commerce to 
appropriately make those judgments. If we are, we should not be 
spending taxpayer dollars to buy it.
  People say: Oh, go through this process, put the computer in, let 
them get by with it. Some place, some time later, some tariff may be 
applied on a supercomputer. You know, they may not even sell the same 
product 1 year from now or 6 months from now.
  So the provision in the bill is a good one; this amendment is one we 
should overwhelmingly reject.
  Mr. VENTO. Mr. Chairman, will the gentleman yield?
  Mr. SABO. I yield to the gentleman from Minnesota.
  Mr. VENTO. Mr. Chairman, I commend the gentleman for his leadership 
role. This is the evolution, this is the last chance to have a 
supercomputer company. I heard them talk about the computers sold in 
Japan. I wonder how many of them resulted in offsets where we actually 
had a transfer of technology in order to sell the product in Japan. 
Sixty-six percent of our avionics and electronics are an offset.
  Mr. KOLBE. Mr. Chairman, I yield myself 1 minute.
  We talked about what this would do to our supercomputer industry, 
which is one company: Cray. Let me just tell my colleagues what they 
said in a memorandum to their own employees just a month ago in which 
they said, it is a Q and A kind of memorandum.
  Question. How much of an impact does the entire deal have on Cray 
financially and in terms of jobs?
  Answer. It is a large procurement, but we as a company do not live or 
die by one deal. It does not make or break our revenue goals for the 
year, and it does not really make a difference in employment because we 
do not staff up prospectively for business that is not booked yet.
  Mr. Chairman, this is not going to make or break Cray; they are doing 
very well in Japan. Let us not jeopardize the sales of computers that 
they have in Japan. Let us not jeopardize this with the kind of action 
that is being talked about here today. Let us not jeopardize this by 
violating our own law our law makes it clear that you can only have a 
sanction after there is a final determination of dumping, and then it 
can only be in the form of an antidumping tariff, not in terms as 
proposed by section 421. It violates our dumping laws, and our 
procurement costs.
  Mr. OBEY. Mr. Chairman, I yield myself 1 minute simply to say that I 
think the gentleman ought to consider what is happening today, not in 
the deep, dark, distant past.
  My colleague talks about the wonderful performance of the Japanese in 
purchasing American supercomputers. If we read Foreign Trade Barriers, 
1996 national trade estimate report on foreign trade barriers put out 
by the U.S. Trade Representative, we will see the following:

       The positive trend in Japanese government supercomputer 
     procurement witnessed in fiscal year 1993 and 1994 was 
     reversed in 1995 during which U.S. firms won only 1 of 11 
     Japanese government procurements. Moreover, the United States 
     has serious concerns about the conduct of the procurement 
     process in two specific procurements.

  I would suggest that hardly suggests to me that the Japanese are 
about to turn over a new leaf.
  Mr. VENTO. Mr. Chairman, will the gentleman yield?
  Mr. OBEY. I yield to the gentleman from Minnesota.

[[Page H6911]]

  Mr. VENTO. Mr. Chairman, I just think it points right out to this 
offset agreement where they demand that the product, not just that they 
transfer the technology and then they produce it and then the next 
thing you know they are selling it back to us, our own technology, 
except that it has a Japanese label on it.
  Mr. OBEY. Mr. Chairman, I yield 4\1/2\ minutes to the gentlewoman 
from Ohio [Ms. Kaptur].
  Ms. KAPTUR. Mr. Chairman, I thank the gentleman for yielding me this 
time and rise in very strong support of the committee bill and oppose 
the Kolbe amendment, which was defeated in the full committee.
  The language in the bill is fair, it is reasonable, and without 
question it is in our national interest.
  The issue here really is why should we not as lawmakers ensure that 
the bidding process in this Government procurement activity is 
conducted in a fair manner at fair value offers. That is all it says.
  It is somewhat curious, although it is not curious to those who have 
watched Japan over the years, that for a system that should cost 
somewhere between maybe $80 million and $100 million, the bid comes in 
at $35 million. Kind of interesting the way Japan behaves on the 
international market.
  Mr. Chairman, if we go and read a recent book by the President's 
chief economic advisor, Laura Tyson, and I do not think she knew we 
would be debating this, but in her book, ``Who's Bashing Whom,'' she 
gives us a window on what Japan really does and how they compete, and I 
quote directly.
  She says:

       At the root of the ability of Japanese firms to compete 
     aggressively on price, even when it means selling products 
     below cost and running losses, are the unique structural 
     features of the Japanese economy. The companies competing 
     with--U.S. firms like--Cray and Motorola have deep pockets 
     and long time horizons. They can afford to cross-subsidize 
     losses in one market with profits from another. They continue 
     to benefit from a variety of promotional policies and from 
     lax enforcement of regulations or restrictive business 
     practices. They also continue to benefit from the insulated 
     nature of the Japanese market, fostered by these and other 
     structural impediments. In short, the pricing behavior of 
     Japanese companies is a natural outgrowth of Japan's business 
     and government environment.

  We know it is a protected environment. There is not a person in this 
institution that would call Japan a free trader.
  I know that the gentleman from Arizona [Mr. Kolbe] is a complete free 
trader. I am a fair trader. There is no way anybody could call Japan a 
free trader.
  Now, if we look at this particular market, and I can still remember 
Norm Mineta when he served here laboring over those agreements with 
Japan trying to get 5-percent access in the market, 10-percent access, 
maybe 12 percent, and then Japan would violate those agreements. There 
is not any question Japan has a habit well recognized of underbidding 
in almost every market.

  Look at what they did to us on the airport, the new airport out 
there, Osaka. We could not get U.S. firms to be able to bid into that 
construction.
  So it is not just in supercomputers. It is in construction. It 
certainly is in the automotive industry. The results are painfully 
clear to the American people if they are not painfully clear to every 
Member of Congress here. That is we have maintained a $50 billion to 
$60 billion trade deficit now, annually, annually, in this decade 
growing every year regardless of what the exchange rate is.
  I remember one of my dear friends, the gentleman from Florida, Sam 
Gibbons, said to me: Well, if only the exchange rate, U.S. dollar to 
the yen, would go down from 240 to maybe 250 yen to the dollar. Why, we 
could just crack the Japanese market.
  You know what? It never happened. And then the yen went down to 90, 
and the trade deficit kept going up. It does not matter whether Japan 
has got pneumonia or whether she is the most strident economy on the 
face of the earth in any given year. The trade deficit just keeps going 
on.
  I would just have to say, let us wake up. Let us wake up. Let this 
Congress not be bound up in legalisms and procedures that we knot 
ourselves up into. Let us look at the bottom line, and let us do 
everything we can in order to ensure that the bidding practices in this 
situation are completely fair.
  In many ways, supercomputers translate into national security. Let us 
not be naive. Support the committee bill. Oppose the Kolbe amendment, 
and stand up, for a change, for fair bidding practices.

                              {time}  1830

  Mr. KOLBE. Mr. Chairman, I yield myself 30 seconds.
  Mr. Chairman, I listened to the gentlewoman from Ohio and I assume 
she believes that dumping is taking place in this case. I do not know 
if that is a fact or not. But if it is, there is a process to be 
followed. You file an antidumping case, you make a determination, you 
make a determination of the injury, and then you impose a sanction. The 
sanction is an antidumping tariff. I do not understand why the 
gentlewoman and other people over there are not willing to follow the 
law, the law that we voted on, that we adopted here.
  Mr. Chairman, I yield 2 minutes to the gentleman from Colorado [Mr. 
Skaggs].
  Mr. SKAGGS. I thank the gentleman for yielding me some additional 
time.
  Mr. Chairman, again I think all parties to this debate would 
stipulate that we are not going to buy anything with taxpayer money 
that we know to be priced unfairly. We are not going to ignore dumping. 
There is a regular order to be followed in dealing with those cases 
when they arise. We do not know if this is one of those cases or not.
  Contrary to comments that have been made earlier by the gentleman 
from Minnesota, all indications are not that we have a dumping case.
  The only indication that we have one is that very sloppily done 
predetermination made by the Department of Commerce contrary to the 
regular procedures that are supposed to apply. They basically put this 
through a black box and came out with an answer that nobody is able to 
review or scrutinize against any known standard. So we are really 
boxing against a sort of mythic opponent here.
  What the regular Department of Commerce process prescribed by law 
requires is a very rigorous, very open process on the record with 
extensive filings of documentation of costs and pricing that the whole 
world can look at and scrutinize and analyze, that is subject to 
technical review, not in this kind of a very unfortunate circumstance. 
That is the way that we need to proceed.

  If we want this aspect of our trade law to be different and if we 
want it to be handled differently, then we need to go through the 
process of changing the law and renegotiating our international trade 
agreements. We cannot make policy on this in an ad hoc, case-by-case 
basis, when something high profile like this jumps up and grabs our 
attention. It will not serve the national interest in the long haul to 
proceed in this fashion.
  Mr. OBEY. Mr. Chairman, I have only one remaining speaker and I 
understand we have the right to close.
  The KOLBE. Mr. Chairman, I yield 30 seconds to the gentleman from 
California [Mr. Campbell].
  Mr. CAMPBELL. Mr. Chairman, just one point: What does this amendment 
provide? It removes the language by the gentleman from Wisconsin. That 
language does not say what was reported in the colloquy between the 
gentleman from Wisconsin and the gentleman from Minnesota, that the NSF 
may not buy this computer if dumping is found by the Commerce 
Department. What it says is that NSF cannot go ahead if there has been 
a ``preliminary'' or a ``final'' determination of dumping. The whole 
difference here is if the dumping finding is just preliminary and not 
final. If it is only a preliminary finding, it violates our 
international obligations to impose sanctions.
  Mr. KOLBE. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, let me just reiterate a couple of points here. There is 
a process that we have adopted that must be followed when we believe 
dumping is taking place. The process requires the industry or the 
Department of Commerce to initiate an antidumping case. The 
International Trade Commission then makes an initial determination of 
injury. The full investigation is then done by the Department of 
Commerce.

[[Page H6912]]

It goes back to the International Trade Commission for ratification and 
for the imposition of an antidumping tariff. That is the process. That 
is the law.
  As the gentleman from Colorado so aptly put it, we ought not to be 
engaging in ad hoc changes to our entire law as it relates to 
procurement, dumping, and international agreements. We should not be 
jeopardizing our supercomputer industry. Any foreign country would have 
a perfect case against us when we violate the law and violate our 
international agreements in this fashion to block the sale of 
supercomputers overseas. If people believe that we should have a 
process of protecting ourselves, then they should adopt that process 
and follow it. If the process is not right, change the process.
  Mr. Chairman, I yield back the balance of my time.
  Mr. OBEY. Mr. Chairman, I yield myself 4 minutes.
  Mr. Chairman, let me say I respect the arguments being made by both 
sides. This is legitimate debate. I simply want to make a few points to 
refute what has been alleged by the amendment's sponsors.
  I want to repeat, this bill does not say that we cannot buy this 
computer. What it says is that if there is either a preliminary or a 
final determination by the Commerce Department that this constitutes 
dumping by the Japanese, that then that computer cannot be purchased.
  The reason it is worded that way is very simple: It can take up to a 
year to reach a final determination, whereas a preliminary 
determination, which has not yet been made, if a preliminary 
determination is reached it usually takes about 4 months.
  The problem with waiting over a year and the problem of doing what 
the gentleman from Arizona wants us to do, and simply rely on the post-
fact additional tariff if there is found to be dumping, is that that 
suits the situation if we are talking about consumables. But if we are 
talking about an industry such as the supercomputer industry, which is 
so integral to the defense of this country and to the national welfare, 
if we simply allow a Japanese company which has already demonstrated it 
is willing to sell every supercomputer they sell at a loss, then they 
are certainly willing to eat the additional tariff that would be 
imposed upon them in order to break the supercomputer market in this 
country and to eventually drive American supercomputer producers out of 
business.
  We used to have 15 American supercomputer producers. We were down to 
5. Two of them got out of business. There are really only three 
companies left in this country who produce anything that can be called 
close to the supercomputer and only one, Cray, which is still left 
fully standing. They will not be standing for very long if we allow the 
Japanese to continue this predatory pricing of theirs.
  I want to make the point: we have signed no agreement that requires 
us to buy dumped products. We have signed an agreement to require open 
and transparent trading, but that was never meant to serve as a cover 
for predatory pricing of products.
  We could have done, as I said, as has already been done on the 
defense bill, simply say these computers cannot be bought, period. I 
did not hear anybody object to that. But we took the more modest 
approach of simply saying if a determination is reached by the Commerce 
Department, then that supercomputer shall not be purchased with 
American tax dollars, because these dollars are appropriated to expand 
and to maintain the American preeminence in this field, and yet they 
are ironically being used to undercut that preeminence. All we are 
saying is if they reach that determination, then we cannot buy this 
supercomputer. That is all we are asking to do.
  I would make the point that it ought to be obvious that if those 
Japanese corporations have never made a profit on the sale of a 
supercomputer, it is obvious that they are not after profit. They are 
looking at their long-term ability to bust the U.S. lead, break into 
our market and eventually drive our short-pocket companies out of 
business. I do not think that is in the interest of the United States.
  I appreciate the bipartisan support for the action taken by the 
committee, and I would urge that the committee uphold the judgment of 
the committee.
  Mr. SKAGGS. Mr. Chairman, I ask unanimous consent that each side have 
2 additional minutes in this debate so as to accommodate the body 
hearing from the gentleman from Illinois [Mr. Crane].
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Colorado?
  Mr. OBEY. Mr. Chairman, I must respectfully object. I was asked to 
agree to a time limit. I have the right to close. Now we are being 
asked to violate that process. I really do not think that is fair.
  The CHAIRMAN. Objection is heard.
  Mr. OBEY. Mr. Chairman, if I could reserve the right to object, I 
would be happy to give the gentleman 2 minutes to speak if I could be 
assured that we will still have the right to close.
  Mr. KOLBE. If the gentleman will yield, that was the unanimous-
consent request, 2 minutes on each side.
  The CHAIRMAN. The gentleman from Wisconsin would still have the right 
to close if there was an extension on both sides of 2 minutes.
  Mr. OBEY. Mr. Chairman, if that is the case, then I withdraw my 
reservation of objection.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Colorado?
  There was no objection.
  The CHAIRMAN. The Chair recognizes the gentleman from Arizona [Mr. 
Kolbe].
  Mr. KOLBE. Mr. Chairman, I yield my 2 minutes to the gentleman from 
Illinois [Mr. Crane], the distinguished chairman of the Subcommittee on 
Trade of the Committee on Ways and Means.
  Mr. CRANE. I thank my colleague for yielding this time, and I want to 
thank my distinguished colleague from the neighboring State of 
Wisconsin for accommodating us.
  Mr. Chairman, I rise today in support of the amendment offered by my 
colleague, the gentleman from Arizona [Mr. Kolbe], to strike section 
421 from the bill. I am greatly concerned that section 421 would force 
an independent government agency to turn down the NEC computer in 
question, even though neither the Department of Commerce nor the 
International Trade Commission has made any formal findings of dumping 
and injury, and in fact has not initiated any formal investigation, as 
required by statute and by international law, to impose antidumping 
duties.
  Clearly we must enforce our antidumping laws to prevent unfair 
trading. However, section 421 would improperly use the appropriations 
process to chill what could be a legitimate procurement that does not 
involve dumping. It is impossible for Congress to determine now whether 
the procurement in question violates the antidumping statute. That is a 
matter for the Commerce Department and the International Trade 
Commission to determine, using statutorily mandated procedures. Only 
when they have made this determination can we begin to consider the 
effects on the procurement.
  In addition, I am greatly concerned that such language could violate 
our obligations under the WTO antidumping agreement, which provides 
that no specific action against dumping of exports from another party 
may be taken except in accordance with the agreement, and does not 
authorize punitive measures such as disqualification from government 
procurement.
  In addition, I am concerned that the amendment could violate the 
Government Procurement Agreement, which provides that each party shall 
provide national treatment to suppliers of other parties. The Japanese 
government has already notified our government of their concerns that 
we would be violating our international obligations if this provision 
is adopted.
  The United States is the largest target of foreign antidumping 
actions. We are vulnerable. What we do to other countries will be done 
to us. Accordingly, I would urge all Members to support the Kolbe 
amendment.
  The CHAIRMAN. The gentleman from Wisconsin has 3 minutes remaining.
  Mr. OBEY. Mr. Chairman, I yield myself 2 of those minutes.
  Mr. Chairman, I simply want to repeat again, there is no violation of 
law and there is no violation of our trade

[[Page H6913]]

agreements by the action taken by the committee. NCAR is not an agency 
of the Government. Article 3 of the Government Procurement Agreement 
does not apply to the proposed legislation because article 1 of the 
agreement states that the agreement covers procurements only by those 
entities listed in the agreement's appendices.

                              {time}  1845

  Neither ENCAR nor UCAR are among those listed entities. But having 
put that technical argument aside, I simply want to make this point. 
The only argument that is being made by the folks who are opposed to 
the committee action is that it is one of process.
  As the gentleman from New York [Mr. Houghton] has pointed out, we 
have lawyers on both sides of the argument making opposite arguments, 
and they will continue to do so. Our job is to cut through that and 
recognize that tonight what is important is that we defend the national 
interest of the United States. I repeat, we are not making a judgment 
that this supercomputer cannot be bought and we are not making a 
judgment that it is being dumped, although it is pretty hard to see why 
it is not when they are offering to provide a supercomputer worth $90 
to $110 million for a $35 million price because they want so badly to 
bust into the United States market.
  But I simply want to repeat, despite that fact, we are not 
determining that this computer at this point is being dumped. All we 
are saying is that if the Commerce Department reaches that conclusion, 
then, because this industry is so crucial, not only to the defense 
capability of this country but to the long-term economic viability of 
this country, it is important that we not allow legalisms to bind us to 
a requirement that if the Japanese corporation is willing to eat 
another $70 or $100 million tariff, that they would be allowed to use 
trade agreements to destroy our economy. That is all we are saying.
  Mr. Chairman, I yield such time as he may consume to the gentleman 
from California [Mr. Lewis].
  Mr. LEWIS of California. Mr. Chairman, I very much appreciate the 
gentleman yielding. He has done so in order for me to have a colloquy 
with the gentleman from Arizona [Mr. Kolbe].
  Mr. Chairman, I very much appreciate the cooperation of the gentleman 
from Wisconsin [Mr. Obey] in that regard.
  Mr. KOLBE. Mr. Chairman, will the gentleman yield?
  Mr. LEWIS of California. I yield to the gentleman from Arizona.
  Mr. KOLBE. Mr. Chairman, I would just ask the gentleman from 
California [Mr. Lewis] to enter into a colloquy.
  I think the gentleman has heard the very legitimate concerns that 
have been expressed about the possibility of antidumping. The gentleman 
has also heard the concerns on this side about the possible violations 
of law that may be involved here on the possible changes to our law.
  I am just wondering if the gentleman can assure me that if this issue 
gets into the conference that this will be considered very carefully in 
the context of what might be done by the Senate and with the debate 
that has taken place here today.
  Mr. LEWIS of California. Reclaiming my time, I can say to the 
gentleman we have had a very thorough discussion in our full committee 
and here on the House floor. There is no question that the gentleman 
from Wisconsin [Mr. Obey] has a serious point that he wants to make. He 
has made that point very well. Between now and conference, there is not 
any question that we will continue to consider the result of this and 
it will be discussed thoroughly in conference.
  Mr. KOLBE. Mr. Chairman, with that proviso, I ask unanimous consent 
to withdraw the amendment.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Arizona?
  There was no objection.
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                              N O T I C E
Incomplete record of House proceedings. Except for concluding business 
                             which follows,
 today's House proceedings will be continued in the next issue of the 
                                Record.


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