[Congressional Record Volume 142, Number 97 (Thursday, June 27, 1996)]
[Senate]
[Pages S7142-S7151]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1997


                           Amendment No. 4367

  The Senate continued with the consideration of the bill.
  Mr. COHEN. Mr. President, there has been a good deal of discussion 
this evening about the amendment offered by my colleague from Georgia, 
an amendment which I cosponsored. I know it has generated considerable 
controversy because some have questioned the consequences of and even 
the motivation for such an amendment at this time. But I would just 
like to indicate that I think it is important that we try, as best we 
can, to return to a bipartisan approach to foreign policy.
  I would include within foreign policy our defense policy as well. 
This is something that, when I came to the Senate in 1979, we assumed 
would be the policy of this body--at least to try to forge a bipartisan 
coalition that would support foreign policy initiatives and certainly 
our defense policy, knowing unless we are united, we can only cause 
confusion, certainly within the country, and confusion amongst our 
allies as well.
  The issue of NATO expansion is not new. We have been talking about it 
for some time. Yet suddenly, by virtue of the submission of this 
amendment, some of my colleagues assumed there may be some political 
agenda, some hidden agenda on the part of my colleague from Georgia and 
the cosponsors that would have implications for our Presidential 
candidate.
  Let me indicate from the very beginning, I favor the expansion of 
NATO. I also support the candidacy of Bob Dole. I hope he becomes our 
next President. I know that he feels very strongly that NATO should be 
expanded. I intend to lend whatever support I can to his candidacy, as 
I have indicated.
  But I believe that before we make a decision on enlargement, which 
carry some fairly serious consequences, we ought to know a number of 
things. We ought to know what the implications are in terms of costs. 
We ought to know, at least get an assessment from our intelligence 
community, what the likely consequences would be for our allies and 
what the reaction will be in Russia, to the extent we can calculate it. 
Notwithstanding what the Russian reaction might be, we are likely to 
take the steps necessary to enlarge. But we should at least be aware of 
what our intelligence community can tell us about it so that we can 
make informed judgments.
  It seems to me that is not asking too much. And perhaps it comes at a 
political time, but these are issues that we should raise in advance. 
We should not find ourselves coming in at the tail end of a decision 
where a President has made recommendations either to enlarge or not to 
enlarge, where NATO has gone on record in favor, and suddenly the 
President turns to the U.S. Senate and says, ``Well, the decision has 
been made. NATO is in favor of the expansion. Now the Senate must go 
along.'' Ipso facto, we must approve because NATO has approved.
  That, I think, would put this Senate in an untenable position--to 
have a President of the United States make a decision and then simply 
submit it to us for ratification without us having any prior input into 
the decision itself or any kind of prior analysis of the evidence that 
we ought to be considering.

[[Page S7143]]

  There are other questions that can be added to the list of questions 
contained in this amendment. Indeed, one concerns the benefits of 
enlargement. That, I think, is a very appropriate question to add. A 
whole list of questions can be added. It is not locked in concrete. 
These were not written on Mount Sinai. They can be added to; they can 
be subtracted from. But it seems to me we ought to start the discussion 
now.
  One of my biggest criticisms is that NATO expansion has been bandied 
about, but the American people have not been asked about it. I hope we 
can persuade them that it is in our national security interest to 
expand the coverage and the protection and the benefits of NATO 
membership to countries that have long been under the heel and boot of 
tyranny, who are yearning to become part of this wonderful experiment 
in democracy and capitalism. They are eager to come in under our 
umbrella, as such.
  I hope that we can start the dialog now, to start going to the 
American people and pointing out exactly what is involved, 
understanding what the risks are, what the calculated risks are, if 
any. I, frankly, think we have succumbed too often to Soviet, and now 
Russian, indication. Mr. Lebed once indicated if we were to expand 
NATO, that is world war III. Since that time, he has modified that 
suggestion. Now that he is a candidate for vice president, as such, he 
is taking a more moderate approach.
  Nonetheless, we cannot ignore the statements made. We may take an 
action in the face of such a threat, but at least it should be an 
informed decision on our part. And I find nothing wrong with raising 
these issues now, even though there is a Presidential campaign 
underway, because President--well, I speak too soon--Senator Dole, 
candidate for President Dole has been on record for a long time about 
his favoring expansion. We will support him as best we can in that 
regard.

  But I think it is critically important that we start raising these 
issues now, that we not blind side the American people and say, ``Well, 
the President of the United States and the Congress have now gone on 
record that we are all favoring expansion.'' We have never asked them. 
We do not know if there are tax implications for them or whether we are 
simply going to borrow the money, or if any money will be necessary at 
all.
  We have not asked them whether or not they would be willing to do it 
for not only Danzig, but Poland or the Czech Republic or any of the 
other nations that may come in, Hungary and others, Slovenia. We have 
not asked the American people as to whether or not they would support 
our sending our troops to those regions should there be an attack upon 
any one of them. It is important we ask them now to get some sense of 
what the public opinion is going to be, and if it is negative, to try 
to overcome that and shape it to follow our leadership on that 
particular issue.
  I might say in connection with another subject matter, that of 
Bosnia, I do not think we have asked enough questions on the subject of 
Bosnia. Things are going well; apparently they are going quite well 
now. There is less bloodshed, virtually no bloodshed taking place. The 
sides appear to have stepped back from this warfare that has been waged 
for so many years, and there seems to be a positive role that we have 
played during this interim period, a period of trying to maintain a 
truce.
  President Clinton and Secretary Perry each have pledged publicly time 
and time again this is a 1-year commitment. I think most of us would 
raise questions initially as to whether you should ever make a time 
commitment on the deployment of American troops anywhere, but a 
political decision has been made that 1 year and 1 year only is the 
amount of time we would deploy our men and women to that region on the 
ground.
  President Clinton has stated it publicly many times, Secretary Perry 
has testified before the Armed Services Committee on a number of 
occasions that they will start taking troops out, as a matter of fact, 
beginning in either late September or early October.
  So there will be no October surprise. It will not be a politically 
astute movement on the part of the President, ``Aha, we're going to 
have troops coming home; unbeknownst to the American people, they will 
come on the eve of the election.'' We know in advance they will be 
coming home before the election.
  Yes, I am sure there will be some political benefit from that which 
President Clinton will seek to reap. We know that is going to take 
place. We also know, according to Secretary Perry, that all of our 
troops will be out by the end of December.
  IFOR will no longer exist, according to the stated plan. But there is 
something else afoot, I must say, Mr. President. We have not talked 
about it, but I see it starting to take place. It is somewhat undefined 
right now. It is like a cloud very distant on the horizon that is 
coming our way, and we ought to try to identify it, because, Mr. 
President, there is afoot an attempt and a movement, I should say, in 
which the IFOR--the so-called IFOR that is there today, the NATO 
force--will be replaced with a new force.
  That new force, presumably, will be made up of NATO members, 
including the United States. The size of that force has yet to be 
determined, but it will still have to be a sizable force if we are 
going to deter and discourage any attempt to attack our men and women 
who are serving there.
  So now we have a situation in which we have pledged to the American 
people it is 1 year, and that 1 year came over the strong objection, I 
might say, of many on this side of the aisle. But, nonetheless, a 
deployment for 1 year, and at the end of 1 year we are coming home. 
That is the pledge.
  What is taking place now, however, is a suggestion that we need a new 
force, and that new force necessarily will have to include U.S. ground 
forces. We ought to start discussing that now and not wait until after 
the fact. Not wait until after November. Not wait until the Congress 
has dispersed either at the end of September or early October, when we 
are spread to our constituencies, and suddenly a decision is made that 
we are now formulating a new policy.
  The elections will come, and whether it is President Clinton who is 
reelected or President Dole who is elected, a decision could be made in 
that interim between November and January to create a new NATO force 
committing U.S. participation. And then we would be told: ``Well, it's 
a done deal. Our NATO allies are in favor of it, and now we must go 
along or we undermine the credibility of the NATO force itself.'' Our 
NATO allies would no longer trust the United States if we should back 
away from such a commitment.
  That is a subject matter that is worth discussing. It may be 
necessary to do that. I have yet to identify a vital national security 
interest in Bosnia, which is an artificial state, but nonetheless that 
is this Senator's judgment. But we ought to be talking about that. We 
should not wait until after the Bosnia elections in September. We 
should not wait until after the Congress is dispersed and we adjourn 
sine die. We should not wait until after the November elections and 
then suddenly find, my God, the President of the United States has made 
a commitment to deploy our troops in a new type of IFOR in the region, 
maybe smaller, but nonetheless still significant in size.
  So, Mr. President, we ought to get back to the business of having an 
active, intelligent discussion of these issues. We ought to try to do 
so on a bipartisan basis if at all possible. It seems to me we ought 
not to look for hidden agendas. Does the Senator from Georgia have an 
agenda to try to slow the process down? I do not think so. Others may 
come to a different conclusion. He is raising these issues because it 
is important that we prepare the American people for an analysis of 
exactly what the pros and what the cons are, what the benefits are, 
what the costs are.
  Are we placing ourselves in greater jeopardy? Are we reducing the 
jeopardy to our new friends and allies? All of that is of critical 
importance, and we ought to discuss it before we take action, rather 
than bemoan the fact that someone has taken action and we are called to 
ratify it with no prior role or participation.
  I hope we can amend the language to make it more positive, to ask 
about the benefits of expanding NATO, which

[[Page S7144]]

I support. But I hope we do not simply defer these questions until some 
time after the decision has been made and then have the American people 
say, ``We don't want it. We don't want to pay for it. We don't want the 
benefits of it. We don't want to defend Poland or Hungary or the Czech 
Republic or Slovenia or the Baltics. We don't want any part of that.'' 
And suddenly the United States is placed in the position of saying, 
``Well, we can't back out of it now. We have made the pledge.''
  So I think these are important issues to be discussed. I hope that we 
can help shape public opinion in favor of expansion, and I continue to 
lend whatever support I can to Presidential Candidate Dole, Senator 
Dole, whom I expect and hope will become the new President of the 
United States.


                           Amendment No. 4369

   (Purpose: To authorize additional disposals of material from the 
                      National Defense Stockpile)

  Mr. COHEN. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from Maine [Mr. Cohen] proposes an amendment 
     numbered 4369.

  Mr. COHEN. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:
       At the end of title XXXIII, add the following:

     SEC. 3303. ADDITIONAL AUTHORITY TO DISPOSE OF MATERIALS IN 
                   NATIONAL DEFENSE STOCKPILE.

       (a) Disposal Required.--Subject to subsection (c), the 
     President shall dispose of materials contained in the 
     National Defense Stockpile and specified in the table in 
     subsection (b) so as to result in receipts to the United 
     States in amounts equal to--
       (1) $110,000,000 during the five-fiscal year period ending 
     September 30, 2001;
       (2) $260,000,000 during the seven-fiscal year period ending 
     September 30, 2003; and
       (3) $440,000,000 during the nine-fiscal year period ending 
     September 30, 2005.
       (b) Limitation on Disposal Quantity.--The total quantities 
     of materials authorized for disposal by the President under 
     subsection (a) may not exceed the amounts set forth in the 
     following table:

                     AUTHORIZED STOCKPILE DISPOSALS                     
------------------------------------------------------------------------
           Material for disposal                      Quantity          
------------------------------------------------------------------------
Chrome Metal, Electrolytic................  8,471 short tons            
Cobalt....................................  9,902,774 pounds            
Columbium Carbide.........................  21,372 pounds               
Columbium Ferro...........................  249,395 pounds              
Diamond, Bort.............................  91,542 carats               
Diamond, Stone............................  3,029,413 carats            
Germanium.................................  28,207 kilograms            
Indium....................................  15,205 troy ounces          
Palladium.................................  1,249,601 troy ounces       
Platinum..................................  442,641 troy ounces         
Rubber....................................  567 long tons               
Tantalum, Carbide Powder..................  22,688 pounds contained     
Tantalum, Minerals........................  1,748,947 pounds contained  
Tantalum, Oxide...........................  123,691 pounds contained    
Titanium Sponge...........................  36,830 short tons           
Tungsten..................................  76,358,235 pounds           
Tungsten, Carbide.........................  2,032,942 pounds            
Tungsten, Metal Powder....................  1,181,921 pounds            
Tungsten, Ferro...........................  2,024,143 pounds            
------------------------------------------------------------------------

       (c) Minimization of Disruption and Loss.--The President may 
     not dispose of materials under subsection (a) to the extent 
     that the disposal will result in--
       (1) undue disruption of the usual markets of producers, 
     processors, and consumers of the materials proposed for 
     disposal; or
       (2) avoidable loss to the United States.
       (d) Treatment of Receipts.--(1) Notwithstanding section 9 
     of the Strategic and Critical Materials Stock Piling Act (50 
     U.S.C. 98h), funds received as a result of the disposal of 
     materials under subsection (a) shall be deposited into the 
     general fund of the Treasury and used to offset the revenues 
     lost as a result of the amendments made by subsection (a) of 
     section 4303 of the National Defense Authorization Act for 
     Fiscal Year 1996 (Public Law 104-106; 100 Stat. 658).
       (2) This section shall be treated as qualifying offsetting 
     legislation for purposes of subsection (b) of such section 
     4303.
       (e) Relationship to Other Disposal Authority.--The disposal 
     authority provided in subsection (a) is new disposal 
     authority and is in addition to, and shall not affect, any 
     other disposal authority provided by law regarding the 
     materials specified in such subsection.
       (f) Definition.--The term ``National Defense Stockpile'' 
     means the National Defense Stockpile provided for in section 
     4 of the Strategic and Critical Materials Stock Piling Act 
     (50 U.S.C. 98c).

  Mr. COHEN. Mr. President, this is an amendment which I am offering, 
actually, on behalf of the administration. It is something that 
involves what we call research and development recoupment.
  The state of affairs is as such: The U.S. companies that sell defense 
equipment abroad are charged a fee by the Department of Defense for the 
purpose of recouping the research and development investment that the 
Department has made in developing the equipment. These fees can run 
anywhere from 5 percent of the unit cost to as high as 25 percent of 
the unit cost.
  These recoupment fees often put our industries at a substantial 
competitive disadvantage because the fees result in higher sales costs, 
leading some of the buyers to simply purchase foreign-produced systems, 
instead.
  The Bush administration eliminated the R&D recoupment fee for 
commercial arms sales, but in the case of foreign military sales, so-
called FMS, those in which the U.S. Government acts as a middleman, the 
fee is actually required by law.
  Last year--let me emphasize this--last year the Defense Authorization 
Act included a provision to allow the President to waive the fee under 
two conditions. First, if imposing the fee would cause us to lose the 
sale, then the President can waive that recoupment fee. Second, if the 
foreign sale would result in unit cost savings to the Defense 
Department when it buys the same equipment and those fees would 
substantially offset the revenue lost from waiving the fee.
  Here is the problem, Mr. President. Since allowing the fee to be 
waived would on a net basis lower Government revenues, last year's bill 
delayed the waiver authority until the enactment of legislation to 
offset the projected lost revenues through the year 2005.
  So the administration, as required by last year's bill, has submitted 
such offset legislation. They have now submitted offset legislation 
which would cover the lost revenues by selling assets from the 
strategic stockpile. The Congressional Budget Office has given its 
stamp of approval to the administration's plan.
  For several months there was some confusion over whether the 
administration's bill would work because it significantly overestimated 
how much lost revenue needed to be offset, calling into question 
whether the Department of Defense could sell off sufficient stockpile 
assets without interfering with the market.
  Earlier this month, however, CBO concluded that waiving the R&D 
recoupment fee per last year's bill would cost roughly $415 million 
through the year 2005. That is about half of what the administration 
originally projected would be the cost.
  At the time that the Armed Services Committee marked up this bill, 
CBO had yet to produce its analysis. So the issue simply was not 
addressed at that time. But after we completed the markup, President 
Clinton's administration said that unless we included this provision in 
the offset, they would recommend a veto of the DOD bill.
  So, in essence, I am acting on behalf of the administration to try to 
avoid a veto of the measure by now offering that provision in the form 
of an amendment, the provision that the committee had failed to 
include. So I am serving here, I think, a bipartisan purpose; namely, 
the administration said we are going to veto this bill unless you 
include this amendment, so now I am offering the amendment to help 
avoid a veto.
  I know that some Members from States that produce materials that 
would have to be sold have indicated some concern about the effect that 
selling these strategic minerals would have on the markets. But I 
emphasize, the amendment explicitly prohibits any sale that would have 
an undue disruption on the markets involved.
  Also, I am aware that some Senators might look at this amendment and 
ask, ``Aren't we promoting international arms sales?'' I agree that we 
should always be careful about what arms we sell and to whom we sell 
them. But this amendment does not pose any problem in terms of unwise 
arms sales.

  First of all, the amendment only deals with FMS sales, which the 
Government has complete control and discretion over. If a proposed sale 
is unwise or against our interest, this amendment in no way creates any 
incentive for U.S. officials to approve the sale. In fact, it would 
create a disincentive because waiving the fee would reduce revenues.
  I also note a Presidential commission on conventional arms 
proliferation just last week released its report. That commission was 
chaired by Janne

[[Page S7145]]

Nolan, known to many Senators because of her service in the Carter 
administration and as a Democratic Senate staffer. Another commission 
member was Paul Warnke, who was President Carter's head of the Arms 
Control and Disarmament Agency. So we have two very strong individuals 
who have served in past Democratic administrations who served on this 
commission.
  The commission came out with some strong recommendations to limit the 
sale of conventional arms to other countries. The relevant point for 
this amendment is that the commission called for the complete repeal of 
FMS R&D recoupment fees.
  My amendment does not go that far. Perhaps we ought to eliminate the 
recoupment fee altogether. But my amendment is not trying to establish 
new policy. It merely finances the policy decision that Congress made 
last year when we approved the DOD authorization bill.
  So, Mr. President, the President's commission on preventing the 
proliferation of conventional arms sales totally supports this 
particular approach. They want to eliminate the recoupment fee 
entirely. This is a much more modest step. It is something that the 
administration has requested. I hope that my colleagues will see fit to 
support it.
  Also, Mr. President, I ask unanimous consent to have printed in the 
Record a letter from the Department of Defense supporting the 
amendment, an excerpt from the report of the President's Advisory Board 
on Arms Proliferation Policy, an article from the Washington Post 
describing the general findings of the commission calling for greater 
restraint in arms sales, and, finally, a letter from the Aerospace 
Industries Association, which endorses the amendment.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                     Office of the


                                   Under Secretary of Defense,

                                                   Washington, DC.
     Senator Strom Thurmond,
     Chairman, Committee on Armed Services, U.S. Senate, 
         Washington, DC.
       Dear Senator Thurmond: Your staff has asked for the 
     Department of Defense views on two draft floor amendments to 
     S. 1745, the DoD Authorization Act for Fiscal Year 1997. The 
     first amendment would reinsert into the bill offsets valued 
     at $440 million over nine years for funding Foreign Military 
     Sales (FMS) from sales of excess inventories of the National 
     Defense Stockpile (NDS). The initial Department of Defense 
     legislative proposals for FY97 also contained such an offset 
     provision. The draft floor amendment is worded somewhat 
     differently from DoD's original offset proposal for FMS 
     sales. However, we support the amendment as long as it 
     contains language in subsection (c) subjecting the stockpile 
     sales to a provision that would prohibit disposals to the 
     extent that they would result in ``undue disruption of the 
     usual markets of producers, processors, and consumers of the 
     materials proposed for disposal.''
       Without the market impact provision, the Department could 
     be in a position where we would have to sell large amounts of 
     its inventories of NDS materials on to the world market in 
     order to meet the mandatory schedule of receipts even if this 
     would adversely impact world markets for these materials and 
     harm both domestic and foreign producers. Moreover, such 
     action could affect the market value of the remainder of the 
     NDS inventories of these materials making it impossible to 
     meet the schedule of receipts in future years.
       The second amendment would authorize sales of 10,000 short 
     tons of Titanium Sponge. This amendment is duplicative of the 
     disposal authority for Titanium Sponge in section (b) of the 
     first floor amendment regarding FMS offsets which authorizes 
     disposal of our total Titanium Sponge inventory of 36,830 
     short tons. Therefore, these amendments are mutually 
     inconsistent. We believe the FMS offset amendment should have 
     priority.
           Sincerely,

                                              John B. Goodman,

                                            Deputy Under Secretary
                           (Industrial Affairs and Installations).
       Enclosure.

  Excerpt From the Report of the Presidential Advisory Board on Arms 
                          Proliferation Policy


                       the r&d recoupment charge

       Current law provides that when certain weapons developed 
     for U.S. use are sold abroad by the U.S. Government, a charge 
     is to be added to the price and remitted to the Department of 
     Defense. This requirement, intended to recover part of the 
     U.S. government's original investment, is called an R&D 
     recoupment charge. The case-by-case application of this 
     charge has historically been both uneven and controversial. 
     Various administrations have obtained numerous exceptions 
     from Congress, allowing the charge to be reduced or waived 
     for foreign policy reasons. General exceptions currently 
     exist in law for individual nations, including NATO allies.
       Industry has argued that the charge discriminates against 
     defense contractors, since such recoupment rules have no such 
     parallel in other areas where the U.S. government has made 
     major R&D investments in developing and purchasing capital 
     equipment--for example, power generation, telecommunications, 
     computer systems, and nuclear reactor technology. Further, 
     American firms cite the R&D recoupment charge as a clear and 
     sometimes significant price discriminator against them as 
     they compete for sales in third countries against foreign 
     producers. These foreign competitors have no equivalent added 
     costs, and may even benefit from overt or covert subsidies 
     from their respective governments. Based upon its review of 
     this issue, the Board supports the Administration's stated 
     intent to seek repeal of the current R&D recoupment charge.
                                                                    ____


               [From the Washington Post, June 26, 1996]

 Arms Trade Menaces U.S. Security, Panel Says: Clinton-Appointed Group 
   Urges Restraint in Selling Conventional Weapons to Other Countries

                         (By R. Jeffrey Smith)

       An advisory panel appointed by President Clinton has warned 
     that the $22 billion global trade in increasingly 
     sophisticated conventional arms threatens to undermine the 
     security of the United States and its friends and has called 
     on Washington and its allies to exercise more restraint in 
     selling such weaponry to other countries.
       Noting that the end of the Cold War has reshaped the world 
     market for armaments and given the United States the 
     predominant share of all such exports, the panel said that 
     Washington should show more leadership to slow the 
     proliferation of advanced weaponry and ensure that civilian 
     technology are not being diverted to military use overseas.
       Although the panel noted that some arms sales to friendly 
     regimes can add to U.S. security, it warned that modern arms 
     ``have in some cases attained degrees of military 
     effectiveness . . . [previously] associated only with nuclear 
     weapons'' and expressed particular concerns about the risks 
     from selling to unstable regimes in Asia and the Persian 
     Gulf.
       In particular, the panel called for U.S. policymakers to 
     stop approving some weapons exports to prop up declining U.S. 
     defense firms, a recommendation at direct odds with a U.S. 
     conventional arms control policy adopted by Clinton in 
     February 1995. National security interests should be the sole 
     criteria for making such exports, and domestic economic 
     pressures should ``not be allowed to subvert'' decision-
     making, the panel said.
       ``The world struggles today with the implications of 
     [exporting] advanced conventional weapons,'' including the 
     promotion of regional arms races or political instabilities, 
     and risks to U.S. soldiers overseas, the panel said. It 
     warned of even greater problems in the future, as ``yet 
     another generation of weapons'' with greater destructive 
     power is exported.
       As a result, the five-member, bipartisan panel said it was 
     ``strongly convinced that control of conventional arms and 
     technology transfers must become a significantly more 
     important and integral element of United States foreign and 
     defense policy if the overall goals of nonproliferation are 
     to succeed.'' The report--the result of an 18-month study 
     with assistance from the Rand Corp.--was presented to the 
     White House on Friday, and is to be formally released this 
     week.
       The U.S. shares of the global arms market is 52 percent, up 
     from around 25 percent nine years ago, and will likely expand 
     to about 60 percent by the end of the decade, according to 
     the report. But the size of the market has shrunk by more 
     than half during the same period, primarily at the expense of 
     Russia, which no longer ships arms to client states such as 
     Afghanistan, Cuba, Iraq, Syria and Vietnam. U.S. domestic 
     arms procurement also declined by $60 billion between 1985 
     and 1993.
       The result is what the report describes as an ``excess 
     production capability'' in weapons factories around the world 
     that has created enormous corporate pressures to sell 
     products abroad. The Clinton administration paid heed to 
     these pressures when it decided that safeguarding the U.S. 
     ``defense industrial base'' or certain key U.S. defense firms 
     should be among the criteria used in arms export decisions.
       The panel said, however, that the export market remains too 
     small to compensate for domestic business losses, and that 
     ``means other than questionable arms sales'' are available to 
     protect vital U.S. defense firms. It said that ``the best 
     solution to over capacity in defense industries is to reduce 
     supply rather than increase demand.''
       This conclusion was hailed by House Budget Committee 
     Chairman John R. Kasich (R-Ohio), who sponsored legislation 
     creating the panel. ```It's the economy, stupid,' is a cute 
     slogan, but must never be the justification for arms sales 
     abroad. I am glad the commission rejected the industrial base 
     argument and hope the administration will implement the 
     recommendation.''
       The panel was also sharply critical of the way the 
     administration reviews arms exports, accusing the National 
     Security Council of paying insufficient attention to the 
     issue and urging it to exercise more power to

[[Page S7146]]

     restructure interagency mechanisms for greater efficiency, 
     including improved intelligence-gathering. It also said 
     regulations created by a half-dozen or more laws that govern 
     exports should be formed into a ``single, coherent 
     framework.''
       ``It looks like a very thorough, thoughtful, comprehensive 
     report and we look forward to studying its recommendations 
     closely,'' a senior administration official said.
       The panel chairman was Janne E. Nolan, a senior fellow at 
     the Brookings Institution who was a delegate to international 
     arms transfer negotiations during the Carter administration. 
     Its other members were Edward R. Jayne II, a business 
     executive; Ronald F. Lehman, a former director of the Arms 
     Control and Disarmament Agency in the Bush administration; 
     David E. McGiffert, a former assistant secretary of defense; 
     and Paul C. Warnke, a former U.S. arms negotiator and 
     assistant secretary of defense.
                                                                    ____



                             Aerospace Industries Association,

                                    Washington, DC, June 27, 1996.
     Senator Sam Nunn,
     Ranking Member, Senate Armed Services Committee, Russell 
         Senate Office Building, Washington, DC.
       Dear Sam: The Arms Export Control Act currently requires 
     the government to add a charge on all Foreign Military Sales 
     (FMS) of major defense equipment to recoup costs incurred by 
     the government for the research and development, and non-
     recurring costs for production of the products being sold. 
     The Bush and Clinton Administrations, recognizing that this 
     fee is essentially a tax on exports, asked Congress to 
     rescind this requirement. Furthermore, the recently published 
     Report of the Presidential Advisory Board on Arms 
     Proliferation Policy, also recommends that this charge be 
     eliminated.
       Congress ultimately included an authority in the FY 96 DoD 
     Authorization bill to waive FMS recoupment requirement should 
     failure to do so likely result in the loss of a sale or 
     should U.S. Government procurement cost savings associated 
     with a sale substantially offset the foregone recoupment 
     revenue. However, this waiver authority is not effective 
     until qualifying budget offset legislation is enacted. 
     Recently, DoD has identified such a budget offset.
       It is my understanding that Senator Cohen (R ME) will offer 
     an amendment to the FY97 DoD Authorization bill that will 
     enact the budget offset legislation. As I mentioned above, 
     the recently published Presidential Advisory Board report 
     states that recoupment charges should be completely 
     eliminated. Senator Cohen's amendment would provide only 
     partial repeal, and we feel that this is a fair compromise 
     position.
       We believe that the time has come to eliminate this tax on 
     exports, and we urge you to support the Cohen Amendment.
           Sincerely,
                                                        Don Fuqua.

  Mr. LIEBERMAN. Mr. President, I am offering my support to and 
cosponsorship of Senator Cohen's amendment to the fiscal year 1997 
defense authorization bill which authorizes additional disposals of 
material from the national defense stockpile. The revenues generated by 
these sales are needed to offset the revenues lost as a result of 
waiving certain surcharges on sales of U.S. defense equipment to 
foreign countries aimed at recouping some of the original costs of 
developing those products.
  Last year, this Congress correctly saw fit to expand the President's 
authority to waive these surcharges when, and only when doing so would 
improve the prospects of winning contracts from foreign countries or 
lowering the cost of acquiring similar equipment by the Department of 
Defense. With the downsizing of our military force structure and the 
concomitant reduction in demand for equipment, it has become 
increasingly important for us to ensure that we can maintain a minimum 
industrial base and the skilled workforce necessary to preserve our 
production capabilities so as to provide for an adequate defense of our 
Nation. These sales will help us maintain these manufacturing and 
manpower capabilities.
  In addition, the requirement for the stockpiles that would be reduced 
by this amendment was established in case they would be needed in a 
protracted war with the Soviet Union. Clearly, this threat has 
significantly abated, and the stockpiles in question are in excess of 
any near term requirement.
  Mr. President, for these reasons it is important that these stockpile 
sales be authorized. I urge my colleagues to vote for this amendment.
  Mr. COHEN. I yield the floor.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mrs. HUTCHISON. Thank you, Mr. President.


                           Amendment No. 4367

  Mrs. HUTCHISON. Mr. President, I rise to speak on behalf of the Nunn-
Hutchison amendment. Let me just say that I appreciate what has been 
said on the floor, and I think that all of us are moving in the same 
direction. I think that we are moving in a very positive and 
responsible way. This is not an issue of, are you for NATO expansion or 
not? This is an issue of a responsible approach to the expansion of 
NATO.
  What we are asking for is a report that would ask and answer the 
questions that anyone coming into a mutual defense pact would want to 
be answered. Very clearly, if we are going to put up the resources of 
the United States and the lives of our young men and women who are in 
our armed services, we want to do it in a very responsible and studied 
way.
  We have simply said we want this decision to be a fully informed 
decision. We want to know the extent to which any prospective new NATO 
members have established democratic institutions, free market 
economies, civilian control of their armed forces, the rule of law, 
parliamentary oversight of military affairs. I think these are very 
important questions to ask because they determine how strong a 
democracy will be in any country that would be part of this very 
important alliance.
  I think it is important that we know what are the mechanisms for 
border dispute resolutions. Certainly, we know there are going to be 
border disputes among friendly nations. There are border disputes that 
are not so friendly. We must know exactly what the resolution of border 
disputes will be, how will it be handled, what are the mechanisms that 
will be set forth for the resolution of border disputes.
  Most certainly, had Yugoslavia been a member of NATO, it would have 
put us in a very difficult situation. Yugoslavia was not a member of 
NATO, so it was not in the perimeter of the actual NATO alliance. I 
think these are very valid questions. I am certainly going to support 
the informed expansion of NATO. I want to be there for especially the 
countries that are trying so hard and are succeeding at having strong 
economies and are putting democracies in place that are beginning to 
work. I think we are looking at the time element here. We need to have 
a test of time before we go into the mutual defense pact. That is what 
we are saying here.
  I think it is a very positive thing for all of us to ask these 
questions and to make sure that if we are going to have before us the 
ratification of the expansion of the NATO treaty, that we have all of 
the answers to these questions, because a two-thirds vote will be 
required in the Senate. We want to make sure there is overwhelming 
support.
  Last but not least, Mr. President, I want to make sure that we 
protect the underlying NATO alliance. I think it is very important we 
keep the commitment that we have in this country to our transatlantic 
friendships and our transatlantic allies and alliances. To do this, we 
must make sure if we expand this very important alliance, which I think 
probably has been the most successful alliance perhaps in the history 
of the world, that we need to do it judiciously and carefully and in a 
very informed way.
  I think we have seen great disagreement on American troops in Bosnia. 
We did this in a NATO mission. I do not want there to be a question in 
the future about the strength of NATO or our commitment to NATO. This 
is our important alliance. I want to keep it strong. I think the way to 
do that is to make sure when we expand, we do it in an informed way.
  It is not a question if you are for or against the expansion of NATO, 
but whether you are for a deliberate and informed expansion of NATO. I 
think there can be no question that when the lives of our citizens are 
at stake and when the money of our hard-earned taxpaying citizens is at 
stake, we should know exactly what we are getting into, as should every 
member nation of this alliance and every prospective member nation of 
this alliance.
  I speak in favor of the amendment. I hope we can work out the 
language so that every single Member of the Senate will be comfortable 
that this is the right thing to do. I yield the floor, and I suggest 
the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.

[[Page S7147]]

  The bill clerk proceeded to call the roll.
  Mr. THURMOND. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THURMOND. Mr. President, I support the adoption of the amendment 
offered by the able Senator from Maine.
  The Department of Defense proposed this amendment allowing the 
President to waive recoupment charges on foreign military sales. This 
measure to repeal the recoupment provision is strongly supported by 
this administration, which feels that recoupment is an impediment to 
foreign military sales. Eliminating recoupment was also supported by 
President Bush's administration. So this is not a partisan issue. 
Because of its support by the executive branches under both Republicans 
and Democrats and because of the support on both sides of the aisle in 
Congress, this matter needs to be addressed.
  Some will no doubt contend that eliminating recoupment charges will 
encourage an arms race. Those against repealing recoupment argue that 
we are going to become an arms merchant, and that we are going to 
contribute to the escalation of arms sales all over the world if this 
recoupment provision is repealed. There is no basis for such claims. In 
fact, the decision as to whether or not to buy a particular weapons 
system is made primarily by countries and their particular defense 
needs. Elimination of recoupment is not an incentive to additional arms 
sales. However, its elimination will have the result of making the 
United States much more competitive in terms of being able to compete 
with those nations which are now both our allies in the world and also 
now our industrial competitors. The United States initially enacted 
laws requiring recoupment payments primarily for the benefit of our 
allies, especially to enable our NATO allies to have these weapons. Now 
that is no longer solely the case. Our friends are also competing 
internationally with U.S. businesses, and in many cases they are 
overtaking us on some of these arms sales. This ultimately affects U.S. 
jobs.
  Mr. President, recoupment payments were initially instituted in the 
early 1960's. The intent of recoupment was to enable our Government to 
recover part of the cost of developing the technology needed to fight 
at the side of our NATO allies and win the cold war. However, our 
allies--especially in Europe--have now also become our economic 
competitors. Now, when American corporations attempt to sell military 
goods, their products are burdened with a surcharge that makes American 
products less competitive. These exports create and protect thousands 
of American jobs and contribute billions of dollars to our national 
economy. Lowering barriers and expanding opportunities for American 
companies to trade abroad is critical to America's long term well-being 
and international competitiveness.
  If we encourage appropriate and responsible commercial foreign 
military sales, we do three things. Jobs is one. Second, we save the 
industrial base. The United States can use the advantage of a strong 
industrial base later as our own national security problems arise. 
Third, and this is very important in terms of saving money for the 
Government, we are able to manufacture more units of whatever is 
exported. Because of these exports, we lower the per-unit cost of 
whatever the item might be. This means that when the U.S. Government 
purchases that item in the future, it will cost the United States less. 
If, for instance, C-17's are sold abroad, the per-unit cost of is lower 
to the U.S. Government. We save the industrial base; we lower the cost 
of defense purchases for the U.S. Government. For all these reasons I 
think this proposed change in the law is a worthy idea.
  Mr. President, the question of recoupment is also a question of 
national security. If we can keep defense industry healthy doing 
business that is fully supported by our laws and U.S. foreign policy, 
then this same industry will be alive and healthy to produce weapons 
and defense assets for the future in the event the need arises in this 
increasingly unstable world. This is one strong measure in which we can 
help preserve our industrial base. If our industrial base shrinks, it 
would jeopardize us in the event we have hostilities elsewhere in the 
world. We must respect these long-range national security implications. 
The issue has jobs, economic, and security implications for our 
country. For these reasons, I support adoption of this amendment.
  (Mrs. HUTCHISON assumed the chair.)
  Mr. GRASSLEY. Madam President, I ask unanimous consent that the Cohen 
amendment be set aside for the purpose of my offering an amendment.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                           Amendment No. 4370

 (Purpose: To establish a commission to review the dispute settlement 
    reports of the World Trade Organization, and for other purposes)

  Mr. GRASSLEY. Madam President, I send an amendment to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Iowa [Mr. Grassley] proposes an amendment 
     numbered 4370.

  Mr. GRASSLEY. Madam President, I ask unanimous consent that reading 
of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. GRASSLEY. Madam President, the amendment that I am offering does 
not need a great deal of discussion. The reason it does not need a 
great deal of discussion at this point is because it has been 
considered on the floor of the Senate and has been the subject of 
hearings before the Senate Finance Committee.
  This amendment incorporates the language contained in S. 1438, the 
bill introduced by our former colleague, Senator Dole. It would create 
a review commission, consisting of Federal appellate judges, who would 
review the decisions of the World Trade Organization. It would review 
those decisions made against the United States. The judges would 
determine whether any decision was arbitrary or capricious, or 
otherwise constituted an abuse of the World Trade Organization's 
authority.
  If such an abuse were found by our appellate judges, that 
determination would be transmitted to the Congress. At that time, any 
Member of Congress would be authorized to introduce a joint resolution 
calling for the renegotiation of the World Trade Organization dispute 
settlement rules.
  Upon the third such determination within a 5-year period, a joint 
resolution could be introduced withdrawing congressional approval of 
U.S. membership in the World Trade Organization.
  It should be remembered that this language was approved by the White 
House as part of the compromise needed to assure passage of the Uruguay 
Round and, as more and more cases will be going to the WTO in the 
future, this amendment will provide a crucial safety valve to assure 
that our interests in free and fair trade will be given a proper 
hearing.
  It should also ease the fears of any of our constituents that the 
United States has somehow surrendered its sovereignty by joining the 
World Trade Organization. I think such an argument is not very factual, 
does not have any basis whatsoever; but those arguments are made. And 
it was a major issue of concern during the debate on the approval of 
the World Trade Organization 2 years ago. So we now know that not to be 
true.
  But Senator Dole, because of that concern at the time of the 
approval, worked out this agreement with the administration, in order 
to assure passage of the Uruguay Round. President Clinton strongly 
supports this bill, and it is supported by the special trade 
representative office. I believe that now is a good time to put this 
commission into place. So I ask my colleagues to vote for this 
amendment.
  I yield the floor.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina, Mr. Hollings, 
is recognized.
  Mr. HOLLINGS. Madam President, I was just notified that the amendment 
was called up, and I do not have my entire file on this subject here. 
But I have

[[Page S7148]]

a mental file because this has been discussed back and forth over the 
past several months.
  What really occurred, Madam President, is that we made a disastrous 
mistake in joining in the World Trade Organization. We joined the WTO 
without the caution exercised in joining the United Nations. We would 
never have really joined the United Nations and maintained our support 
for its operations had we not had our veto power in the U.N. Security 
Council.
  The creation of a security council with an absolute veto by any one 
member was debated at length at the time of the adoption of the United 
Nations. Here we were, in the family of some 117 countries at the 
time--and I think maybe 137 have joined since--and in this family of 
nations, we were looked upon as the rich nation that could afford any 
and every kind of contribution for the freedom of man the world around. 
This was particularly true when it came to economic affairs. We agreed 
to act as the market of first resort in order to rebuild the shattered 
economies and in order to develop the third world. If we had any 
illusions about how we are perceived in most international 
organizations we need only to look back to 3 weeks ago when the--the 
People's Republic of China--faced condemnation by a U.N. resolution 
criticizing the People's Republic for human rights abuses. In the 
United Nations they passed a resolution, joined in the Assembly with 
the European Community and the United States, to get a hearing before 
the Human Rights Commission. Our friends, the People's Republic of 
China, immediately went down to Africa and corralled the votes, and 
when the issue came up 3 weeks ago, the People's Republic of China had 
the votes within the U.N. Human Rights Commission that it was what they 
called a nonissue, and not to be discussed.

  So here is an example of the problems we face in the international 
organizations, rather than the United States being the leader we were 
immediately put on the defensive and roundly condemned in the 
developing world. We may think of ourselves as the light upon nations 
leading the way to democracy but in international organizations we are 
viewed as the hypocritical rich uncle constantly lecturing others on 
how they should behave.
  With respect to the World Trade Organization itself, we argued at the 
time--and I will argue at length here this evening--how we lost our 
rights under section 301. So we have lost those rights under 301.
  Again, not just 3 weeks ago but this past week, you see where the 
United States of America has abandoned the Eastman Kodak case, instead 
of using sanctions for unfair practices not covered under the WTO the 
Japanese have called our bluff and said in the new WTO era all disputes 
must be taken to the WTO. We had no choice but to comply with their 
desire to settle this dispute. If the WTO found against Japan and for 
the United States in that particular case, I can tell you right now 
that would be the end of the WTO. If the WTO rules in favor of the 
Japanese in the Kodak case I can tell you right now, we won't need a 
review commission, the pressure to withdraw from the WTO will be 
overwhelming. This case amply displayed that we have lost our 
independence in trade policy, the WTO has achieved its principal 
objective, the elimination of U.S. unilateralism in trade policy.
  There are two very important individuals that are worried about these 
strains. One is the President of the United States, and the other is 
the likely Republican nominee for the Presidency here come November. 
These two folks are unindicted coconspirators if you will conspiring to 
pass the GATT. The Senator from South Carolina would then charge them--
that is the President and the Republican nominee--as conspirators 
unindicted to cover their backsides.
  The Senator from Iowa has put in S. 1437, the Dole bill, Calendar No. 
253, to establish a commission to review the dispute settlement reports 
of the World Trade Organization.
  Madam President, this is not a well-conceived thing. It need not be 
well conceived because it really is to get the people past the 
Presidential election. But the commission shall be composed of five 
members, all of whom shall be judges of the Federal judicial circuits 
and shall be appointed by the President, after consultation with the 
majority leader and minority leader of the House of Representatives, 
the majority leader and the minority leader of the Senate, the chairman 
and the ranking member of the Committee on Ways and Means of the House 
of Representatives, and the chairman and ranking member of the 
Committee on Finance of the Senate.
  Here is a high-level commission of Federal district judges from the 
Federal judicial circuit, plus these leaders in both Houses, and 
everything else, to get together to do what? To determine if three 
adverse rulings by the World Trade Organization are, of course, 
adverse, being against us, and, if so, then they can memorialize 
Congress to pass a resolution to withdraw from the World Trade 
Organization.
  We can do that now. We do not need a commission.
  This crowd has certainly got political gall to buck 
the responsibilities of being Senators and Congressmen to any and 
everybody else. It is sort of hit-and-run driving in politics in this 
day--``I am concerned. I am concerned. I am disturbed.'' This crowd 
should quit getting concerned and disturbed, and let us start to do 
some things.

  This does nothing. It can be used on the political stump in the 
Presidential debates later on. ``Oh, yes, don't worry it. We got a 
high-level commission that we passed this year to review it.''
  Well, go over there and ask the Chief Justice of the Supreme Court of 
the United States, and he will tell you these Federal district judges 
have no authority to serve on such a commission. In fact, they will be 
forbidden to serve on it.
  This is hogwash, a cover-your-backside kind of resolution to show 
that they are concerned and they are disturbed and they are watching it 
carefully, as they berate, ``I am for jobs, I am for jobs, I am for 
jobs.'' They are nothing but pollster politicians running around--``I 
am for the family and against crime. I am for jobs and against taxes.'' 
And all they do is they take these seven or eight hot buttons, and they 
make their little TV squibs, 20-second bites. As long as they can 
articulate a lot of them with a lot of money, a lot of TV shots and 
everything, come to public service, and they do not know anything else 
to do.
  They get in this sort of game here tonight where we have the armed 
services bill, a very important measure. I serve on the Defense 
Appropriations Subcommittee, so I am familiar with many of the 
particular issues that need be decided here by the U.S. Senate on the 
armed services authorization. But, instead of that, we got any and 
everything--cattle, dog--bring it up with respect to this. This is a 
grab bag for the Presidential race, and we do it, so-called, with 
dignity and in seriousness of purpose, and treat it seriously by this 
news crowd that my friend James Fallows has written an entire book 
about, now, about breaking the news, how the media undermine American 
democracy.
  So it will be my purpose this evening--and I will be taking up a good 
part of the evening, I would think, because I do not have some of the 
colleagues alerted, but I will be taking up a good part of the evening 
reading this bill and the Fallows book about how the media has 
undermined American democracy by refusing to engage in the real issues 
the American people should be engaged in.
  Fallows really has a very interesting approach, Madam President. He 
describes the dichotomy between Walter Lippmann, on the one hand, and 
John Dewey on the other. Lippmann contended that the press should be an 
erudite, an unusually trained and skilled group on all the complicated 
subjects, and together they should decide the more or less bill of 
particulars for the American public and the programs and the way they 
emitted the news.
  In contrast, John Dewey said, yes, they should be well trained and 
skilled, fully informed of this particular subject matter, but, more 
particularly, they should engage the American public in subject matters 
that need to be engaged in--and that, they have not. And to tell the 
American people the truth even at times they do not want to hear the 
truth. The truth is the most important subject totally neglected in 
this particular session of the 104th Congress is the subject matter of 
trade. The helter-skelter treatment

[[Page S7149]]

given trade in November year before last was just that. We were force 
fed without the proper leadership, without the proper hearings. We 
tried our best at the level of the Commerce, Science and Transportation 
Committee that I chaired at that particular time to bring the witnesses 
from all the different trade organizations.

  Madam President, I am getting good news. I feel that my good friend 
from Iowa realizes how serious we are. I do not want to just act like 
we do not have a point here and we are just politically rejoining.
  I happen to be a friend of the distinguished former majority leader, 
the Republican nominee for the Presidency. I will never forget the 
early days when I had suggested the appointment of Clement Furman 
Haynesworth to the U.S. Supreme Court, a distinguished South 
Carolinian, and I turned to then freshman Senator Robert Dole, of 
Kansas, who stayed in the Chamber intermittent hours on end to help me 
with that particular appointment. We have been close friends ever 
since. But I had explained to the distinguished former majority leader 
that this was a subject matter not to be glossed over with one of these 
cover-your-backside kind of amendments to get a judicial council like 
they are studying it and they are watching it closely--all, of course, 
apple sauce to get us past the November election and then once again 
the total drain of America's industrial backbone.
  I would be delighted to continue. I know my distinguished former 
majority leader, the former President pro tempore of the Senate, the 
Senator from West Virginia, had a studied amendment here. I wanted to 
be able to discuss that. But I have just been notified that the 
distinguished Senator from Iowa has a different idea perhaps at the 
moment for this particular evening about his amendment. And I learned 
in the courtroom long ago, when the judge is ruling with you, to hush, 
so I yield the floor.
  Mr. BYRD. Madam President, will the Senator yield before he does?
  Mr. HOLLINGS. Yes.
  Mr. BYRD. Madam President, I congratulate the distinguished Senator.
  He will perhaps remember that one Friday afternoon, I believe it was, 
most everyone had gone home and the distinguished former majority 
leader, Mr. Dole, wanted to call up this bill and get it passed by 
unanimous consent, and we contacted, I believe, Senator Hollings' 
office and Senator Dorgan's office because I knew how they felt about 
it. I think everybody was gone. I said, well, who am I to object to 
this, but I just do not feel right in letting this bill pass with 
nobody here, so I objected to passing the bill by unanimous consent on 
that afternoon, which irritated the then-majority leader, but I was 
sure I did the right thing in objecting to unanimous consent.
  I voted against the GATT, as did the Senator from South Carolina; I 
was very much opposed to it. I did not think too much of the 
legislation that was being drawn up by Mr. Dole because it included a 
number of judges, five I believe. They do not have time to engage in 
matters of this kind. As a matter of fact, I received a letter dated 
August 31, 1995, from the Administrative Office of the United States 
Courts in which they objected to this legislation.
  So I thought, well, I would like to get that judgeship panel out of 
there, but I was unable to get it out, and so I decided I would try for 
an amendment that would create some other entities, one of which would 
be made up of business men and women and labor representatives, so that 
they would have some idea of what is happening, what the impact of WTO 
decisions was going to be on our own economy, jobs, and so forth.
  So that was the amendment I was going to offer if this thing was 
going to move, and I am sure the distinguished Senator, while he 
opposed the then Dole proposal and now the proposal by the Senator from 
Iowa, would not oppose my amendment if it had to go along with this 
thing. If the Senate is going to act on it and take it, I would like to 
have my amendment on it. But I am personally happy just to rest and let 
matters take their course, and if on another day this comes up, I will 
have my amendment ready if need be.
  I thank the Senator. I think he has done yeoman's work here, and he 
has been successful. I will sit down. I will take my seat along with 
him.
  Mr. HOLLINGS. I thank the distinguished Senator.
  Mr. BYRD. Madam President, I ask unanimous consent to insert in the 
Record the letter to which I referred from the Administrative Office of 
the United States Courts.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                      Administrative Office of the


                                         United States Courts,

                                  Washington, DC, August 31, 1995.
     Hon. Robert C. Byrd,
     United States Senate,
     Washington, DC.
       Dear Senator Byrd: The Judicial Conference of the United 
     States opposes the enactment of S. 16, the WTO Dispute 
     Settlement Review Commission Act, so long as five sitting 
     federal judges are required to become members of this 
     commission. Accordingly, we applaud your action of August 11, 
     1995, when you declined to give consent to Senator Dole's 
     request to allow the Senate to pass this bill.
       While you said on the floor that you do not have a full 
     understanding of the merits and demerits of S. 16, your 
     instincts were entirely correct. There is no compelling 
     reason why sitting federal judges have to comprise the 
     membership of this commission. As you say, the judiciary has 
     a very heavy workload, and also the responsibility to the 
     public and to litigants to promptly deal with the cases 
     assigned to them. In response to your second point, federal 
     judges have no special competence or experience to decide 
     whether a WTO dispute resolution panel complied or failed to 
     comply with GATT-related rules in reaching a decision.
       The Finance Committee held a hearing on S. 16 on May 10, 
     1995. Judge Stanley S. Harris testified in opposition to the 
     bill on behalf of the Judicial Conference. A copy of the 
     Judge's statement is enclosed. Judge Harris explained that of 
     the 179 authorized circuit court judgeships, 16 positions are 
     vacant; that circuit court judges have, on average, dockets 
     of nearly 300 pending cases, up from 120 cases in 1970; and 
     that the forecast is that the caseload will continue to 
     increase. In sum, forcing five judges off the bench, for at 
     least six months each year, will have a negative effect on 
     judicial resources.
       During the Finance Committee hearing, the issue of the 
     constitutionality of this bill was raised by Senator 
     Grassley. Judge Harris pointed out in his prepared statement 
     that the Judicial Conference does not offer advisory opinions 
     on such an issue, although he urged the committee to study 
     the constitutionality of this bill for itself. A witness at 
     the hearing, Alan M. Wolff, testified that the use of federal 
     judges on the commission ``does not present constitutional 
     problems''.
       Given that, Senator Grassley asked Judge Harris his 
     personal opinion of whether Congress has the authority to 
     assign non-judicial duties to Article III judges in light of 
     Mistretta v. United States, 488 U.S. 361 (1989). In that 
     case, the Supreme Court held that sitting Article III judges 
     could serve on the U.S. Sentencing Commission. Judge Harris 
     said that the ``linchpin'' of the Mistretta decision was that 
     the Court recognized that the U.S. Sentencing Commission 
     operated ``within the essential framework of the Judicial 
     Branch of Government'', that the duties to be performed by 
     judges on this commission were clearly not judicial functions 
     but rather functions ``sort of in between the Executive 
     Branch and the Legislative Branch'', Judge Harris then 
     summarized as follows:
       ``I commend the purposes of S. 16. I think it would be 
     extremely unfortunate to have it begin to be implemented, get 
     down the track, and then get thrown off the track by a 
     conclusion that it involves an unconstitutional use of 
     Article III judges.''
       In conclusion, I commend you for your action on August 11. 
     Hopefully, if and when the Finance Committee considers S. 16, 
     it will decide that all federal judges should continue to 
     judge as the Constitution commands, and that others can 
     decide whether the United States has been treated fairly by 
     the World Trade Organization. If I can provide anything 
     further to convince you to persist in opposing this bill, 
     please advise.
           Sincerely,
                                                  L. Ralph Mecham,
                                                        Secretary.

  Mr. THURMOND. Madam President, there is no question that the new 
rules of the World Trade Organization, especially the new dispute 
settlement regime, can create a situation of unprecedented opportunity. 
It also creates a situation of potential harm to American interests if 
we do not enact responsibilities by Congress on this matter.
  Americans have been generally suspicious of the GATT Agreement and 
the corresponding powers given to the World Trade Organization. Many 
Americans feel our country might be giving up far more than we are 
getting under this agreement. Most importantly, what we appear to be 
giving up is some of our sovereignty, some of our ability to decide for 
ourselves, and control over the laws and practices which govern us. The 
biggest potential threat to our sovereignty is the new dispute 
settlement process.

[[Page S7150]]

  If we are to be comfortable with the international dispute settlement 
process, above all else, it must be completely impartial. If the United 
States does not perceive impartiality and if the WTO oversteps its 
authority, then our country must be prepared to respond. That is what 
this amendment calls for. The Dispute Settlement Review Commission will 
help us respond. The Commission will review every adverse decision 
issued by the WTO. Federal appellate court judges, which this amendment 
proposes as Commission members, are especially qualified to review 
these decisions, because the questions will be complex international 
legal issues of whether the WTO as an international tribunal acted 
within its authority, abused that authority or acted arbitrarily or 
capriciously.
  I believe establishing this review commission will enhance the 
credibility of the WTO. It will be a powerful signal to WTO panelists 
that their work must be absolutely impartial. And, a reminder of their 
obligation to observe the bounds in negotiated trade agreements. And 
perhaps, most importantly, it will demonstrate that the U.S. Congress 
takes a strong and long-term interest in the dispute settlement process 
and its proper functioning. Confidence in the WTO process was not 
created merely by signing a trade agreement. Confidence must be built 
up over a long time.
  I believe the President has already expressed support for this 
legislation in its earlier form as a bill. This is not a partisan 
measure. It gives Congress some authority and some responsibility 
required in international trade. We know the American people are 
concerned about job loss, about exporting jobs, and about international 
organizations making decisions that might affect their jobs. In this 
light, the Congress should have some comment on the WTO's activities, 
and if necessary, authority to initiate withdrawal from participation 
if U.S. interests are abused.
  It would also send a strong enough signal that some of our unfair 
competitors in foreign countries understand that we are serious about 
this. We are concerned about American jobs, fairness in international 
trade, and the accountability of Congress in these matters.


                     Amendment No. 4370, Withdrawn

  Mr. GRASSLEY. Madam President, I will withdraw my amendment and do 
withdraw it, but I want to make some points.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. My amendment is withdrawn.
  The PRESIDING OFFICER. The amendment is withdrawn.
  Mr. GRASSLEY. I want to make a couple of points, some of them on the 
issue and some of them the situation we are in with this amendment.
  This amendment has been approved by the Senate Finance Committee a 
long time ago. This amendment has the support of the President of the 
United States. This amendment has the support of the person who will be 
the Republican nominee for President of the United States, a former 
Member of this body, Bob Dole. I would imagine, if we could get this 
amendment to a vote, it would carry overwhelmingly.
  If anybody wonders why sometimes the political process does not work, 
the decisionmaking process does not work, this is a perfect example. 
How much better of a position should the Senate be in to get work done, 
passing very good legislation, when the President of the United States, 
who is a Democrat, thinks it ought to be done and the Republican 
nominee to be thinks it ought to be. If they agree on it, it seems to 
me it ought to have a pretty good chance of passing the Senate but not 
so.
  Just remember, that is the situation. Also remember the situation is 
this in regard to the World Trade Organization, the WTO. It builds on 
50 years of dispute settlement within the GATT process. There has been 
a dispute settlement process to have trade disputes between two 
countries settled for almost a half a century. The United States had a 
lot of trade disputes with other countries before GATT over the last 
half century. We would win a fair majority, a good number of those 
disputes.
  But under the old process, the United States could win and not win. 
We could win because we had the facts on our side, the decisions were 
made in our favor, but if the country we defeated wanted to ignore the 
decision, they could thumb their noses at the process, thumb their 
noses at the United States. If we were to take action, we could be 
guilty of violating the GATT agreement, just because we were willing to 
take action to do what was said to be right for ourselves in the first 
place.
  So the World Trade Organization has a process that will allow 
disputes between countries to be settled, but it also allows 
retaliation by a country if the country that is the loser in the 
process is not going to honor and respect the decision.
  It seems to me that anybody who wants the United States to advance as 
a result of the freeing up of trade, and to have disputes settled, 
ought to welcome the opportunity when there is a dispute settlement 
process in which not only will the United States have as much of a 
chance of winning as ever, which seems to always be in our favor, and 
be able to enforce that, because if the other country will not respect 
it, unlike in the past, if we were to take action, it would be GATT 
illegal. If we are to take retaliatory action at this time, it will be 
GATT legal. And everybody understands that the world is better off with 
the freeing up of trade.
  Any of the speakers on free trade, any of the speakers on GATT, have 
to realize that our country has more to gain than any other country has 
to gain by the freeing of trade because we already have lower barriers 
than any other country has. If other countries under those agreements 
bring their barriers down, we are the winners, not the losers. And $1 
billion more in trade is 20,000 more jobs. That is not bad for America.
  So I hope sometime we will be able to get this legislation passed. 
Again, the President of the United States, President Clinton, agrees it 
should be done, and Bob Dole agrees that it should be done. We should 
do it.
  Mr. HOLLINGS addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Madam President, right to the point, that is exactly 
what is the trouble right this minute. The Finance Committee approved 
GATT and the WTO. The President of the United States approved GATT and 
the WTO. Senator Bob Dole approved and led the fight for the approval 
of GATT and the WTO.
  Now, why is the President this very minute in France beating up on 
the council of the seven economic ministers? Why is he beating up on 
the Japanese, trying to get their attention? Because the World Trade 
Organization and the GATT agreement has chilled progress in trade 
disputes.
  Specifically, the Japanese will not even talk to us. They have WTO. 
They know they have the vote. So, under 301, we found out we could not 
use the sanctions, and if we tried to, they would retaliate against us. 
Not retaliate as the distinguished Senator just referred--that is 
exactly our dilemma.
  So they say, point 1, it probably is a matter of terrorism. Because 
publicly the public can understand that, and we all really regret the 
loss. I have had 10 of those airmen--we did not lose them--we had 10 
hurt in Charleston, and we had from the 9th Air Force, I would say, 30 
or 40 at least flying those F-16's out of Shaw Air Base. So I do not 
talk casually about that.
  But the real No. 1 trade issue is this dilemma we have gotten into 
with the World Trade Organization. We are not making any progress at 
all. We had a semiconductor agreement. Instead of adhering to the 
agreement, they ignore it now. They said, go to the WTO, go to the WTO. 
We know that is a loser now.

  So, politically, before the American people can appreciate --and my 
distinguished colleague from Iowa can appreciate--the fact that the WTO 
is a loser, before we can learn that, let us get in ahead of the curve 
here, of public despondency over the trend of trade in this so-called 
globalization, globalization, globalization.
  Specifically, I want to make one good reference that is categorically 
uncontested. In 1981, we had before then-President Reagan a textile 
bill. The deficit and the balance of trade in textiles in the United 
States was $4 billion. The deficit in the European Community in textile 
trade was $4 billion.

[[Page S7151]]

  I noted just recently, of course, that the Europeans enforce their 
trade agreements. We do not. We act like we have these rights, and we 
are in there moving and we are watching and everything else of that 
kind. We just never have been astute to really go against these dumping 
cases. We have asked for more customs agents and everything else. The 
authorities, customs, tell us there are as much as $5 billion in 
transshipments violations coming in here with this cheap clothing, way 
less than any kind of minimum wage, child labor and slave labor, you 
might call it, in the People's Republic, all being manufactured.
  The deficit and the balance of trade in Europe in textiles is less 
than $1 billion. The deficit in the balance of textile trade is $35.8 
billion. So, the Europeans know how to deal and enforce, and 
categorically have. We have taken the position of Uncle Sucker. We have 
done it in defense, and we know it. We have done it in all these other 
international organizations, and we know it. It is time we start 
protecting our industrial backbone.
  America's strength and security rests like on a three-legged stool. 
We have the one leg of defense. That is unquestioned. That is what they 
mean by superpower. We have the leg of the values as a Nation, and that 
is strong. Yes, we feed the hungry in Somalia. We sacrifice for 
democracy, to build it in Haiti. We commit troops to try to bring peace 
in Bosnia. So our values, we all know, of the American good will, stand 
for freedom and democracy the world around.
  But the third leg of economic strength, that leg was fractured over 
some 45 to 50 years now. The cold war, where we had to intentionally, 
in a sense, sacrifice that leg in order to keep the alliance together. 
But now, with the fall of the wall, we continue to act like we are fat, 
rich and happy.
  The American people see it. Why do you think they followed Pat 
Buchanan wherever he went? Because he was talking sense on trade. I do 
not agree with him on many of his other stances, but he was solid as a 
dollar on the subject of jobs and trade. That is why he was picking up 
Republicans, Democrats, Independents, all, as long as he talked that 
sense on trade.
  My workers know, for example, under NAFTA we have already lost, last 
year, 1995, with the closure of 21 mills, the loss of 10,000 textile 
jobs. Almost that many already this year have gone down to Mexico and 
to Malaysia. You go over to the Secretary of Labor and the fine little 
gentleman gives you the singsong, ``retrain, retrain, retrain.''
  Madam President, I wish to get your attention here. If you look at 
Oneida Mills that just closed--they have been there 37 years--just the 
other day, 487 workers, most of them female. They make T-shirts. The 
age average is 47 years of age.
  Let us retrain them and assume tomorrow morning they are already 
expert computer operators. Are you going to hire the expert computer 
operator, 47 years of age, or the 21-year-old computer operator? The 
answer is obvious. You are not going to take on the retirement costs. 
You are not going to take on these medical costs. But that is what they 
continue to tell you up here. The American people are losing these 
jobs, losing this industry, losing, as a Nation, our economic strength.
  Superpower--they are ashes in my mouth. You cannot use the nuclear 
bomb, we all know that. We cannot meet them man for man on manpower. We 
try to develop our technology, but the truth of the matter is, by the 
year 2000--Fingleton, read his book ``Blind Side''--they will have a 
larger economy with 120 million and less than the size of California, 
compared with our 260 million.
  They are already our manufacturing superior. Give them 4 more years, 
and they will have a larger economy than we will have. In 15 years, the 
People's Republic of China will be ahead of us. We are going the way of 
England, I can tell you that right now: a second-rate nation with a lot 
of parliamentary papers and scandalous newspapers, parliamentary 
maneuvers around here and debate, debate, debate: ``I am concerned,'' 
``I am worried,'' ``I am disturbed,'' ``I am concerned,'' ``I am 
worried,'' and nothing happens. It is all procedural.
  That sorry contract over there on the House side was all procedural 
bunk. Term limits, product liability--I can just go down the list of 
all of those things they had in there. Constitutional amendments--it is 
like running up in the grandstand like a football team: ``We want a 
touchdown.'' We are on the field, and we are supposed to balance the 
budget, but we have to hear all the procedural crap so we can get to 
the next election and try to get elected and try to hoodwink the people 
even further.
  It is time we stop this nonsense and realize--I say to the 
distinguished Senator from Iowa that I am just as much an agricultural 
Senator as he is. I got up to WHO in Des Moines, IA. It was 5:30 in the 
morning. ``No Democrat would appear.'' I did.
  The first question for me was, ``Senator, how do you expect to get 
any votes out here in Iowa when you are standing for all the 
protectionism for the textile industry?''
  I said, ``Wait one minute.'' It was a young lady. I said, ``Madam, 
the truth of the matter is that we don't ask for any protection. What 
we ask for is protection of our agricultural products. We believe in 
price supports and import quotas and those Export-Import Bank 
subsidies. We've got wheat, too, and corn. We've got agricultural 
products.''
  Until I was Governor, we were an agricultural State. Now the majority 
are in industry today. We have to find technical training and skills, 
but we think highly of agriculture. So do not think we do not know 
about agriculture and jobs and wheat. We want to sell it, too, but we 
have to have a balanced approach to try to maintain America's 
industrial backbone.
  So I appreciate the position of the distinguished Senator from Iowa 
tonight, and I hope he will give me a little bit more notice next time, 
because I thought once the distinguished Senator from Kansas, the 
former majority leader, had left us, that that was one problem solved 
and we could go on and get some other things done.
  But I can tell you now why that passed before with all of those. We 
had fast track, no amendments, limited time. When your amendment comes, 
we will not have fast track, we will have amendments, and we will have 
unlimited time, and my distinguished senior Senator has set the pace 
for unlimited time and debate. I yield the floor.
  Mr. THURMOND addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina is recognized.

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