[Congressional Record Volume 142, Number 136 (Friday, September 27, 1996)]
[Senate]
[Pages S11496-S11497]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT AGREEMENT

  Mr. BREAUX. Mr. President, I take the floor to make a couple of 
comments about my extreme disappointment over the obvious fact that now 
this Congress will not be able to take up an agreement that has been 
worked on and negotiated for over 7 years that has now been completed 
but that will not be considered by our Congress through the 
ratification process.
  The agreement that I speak to is the so-called OECD agreement, which 
is the Organization for Economic Cooperation and Development, which has 
brought together the shipbuilding countries of the world, and after 7 
years and two administrations negotiating this agreement and having the 
other nations of the world that build ships sign on the dotted line 
saying that this agreement is right for this time, unfortunately, this 
Congress, and this Senate in particular, will not be in a position to 
even bring it up for ratification.
  The bottom line is that this agreement, which has been negotiated for 
so long, has as its major purpose the ending of shipbuilding subsidies 
by the other countries of the world.
  In my time in the Congress, I have heard from people who work in 
shipyards, people who own shipyards, people who have shipyards in their 
districts and in their States, that if we could only end the other 
countries' subsidies to their yards, government subsidies, we in the 
United States could not only compete with these other foreign shipyards 
but we could do much better than they are doing.
  This agreement, I say to my colleagues and to all, does exactly that. 
After 7 years of negotiation under the leadership of the Clinton 
administration and Bush administration, both of which have said this is 
a priority, and this agreement has now been completed and signed, we at 
this last hour refuse to take it up because there are some in our 
country who have said it is not perfect so, if it is not perfect, we 
will not participate. The losers of this battle are the people who 
asked us to enter into these negotiations in the first place, the 
shipbuilding industry. It is unfortunate that now there is such a 
division among the industry that we in the Congress are not able to do 
something which helps everybody in a major way.
  I am committed to continue our efforts in the next Congress. I am 
fearful, however, that other countries will see the U.S. lack of 
ratification of this international agreement to mean that they will 
then be able to engage in their own subsidy wars once again, and that 
will be most unfortunate because, if there is anything which is clear, 
it is that this country cannot participate and cannot win an 
international subsidy battle with other countries willing to heavily 
subsidize their shipbuilding industries as a matter of national policy.
  We have no subsidies directly provided by our Government to our 
shipbuilding industry. That program, the construction subsidy 
differential program, was ended in the administration of President 
Ronald Reagan. He said we are not going to do that any more. Congress 
agreed, and there is no longer any shipbuilding subsidies in place for 
our yards in this country, but all the other countries that are major 
shipbuilders still have subsidy programs.
  This international agreement got them all to sit down at the table 
after 7 years and say, all right, if everybody agrees they are not 
going to do it, we are not going to do it either.

  That agreement is a win-win for the United States. Failure to ratify 
and approve that treaty is a lose-lose for the United States industry 
and the thousands and thousands of men and women who work in those 
industries, because if we do not enact this agreement and other 
countries continue to subsidize their yards, we will continue to lose 
business. We will continue to build only militarily useful vessels in 
this country and commercial shipbuilding will continue to go overseas 
to yards that are consistently subsidized by their governments, because 
in many of these countries shipbuilding is their biggest industry. It 
is not in our country, and therefore we do not subsidize it. This 
agreement would have put other countries on a level playing field with 
us.
  I am struck by the fact that at the last minute, when some of our 
industry people came in and said, well, we do not like this agreement 
because of this, that and the other, my staff, USTR people, many 
Members of the Senate and in the House sat down and said, all right, we 
will try to get what we can to fix it to address your concerns. Those 
who opposed the treaty said, well, they needed explicit clarification 
that the United States would not under any circumstances change our 
Jones Act, and we did that and clarified that in the treaty, that that 
would be exactly the way they asked for it.
  They said that they need explicit clarification that our national 
security interests would be protected by this treaty, and that the 
defense features and military reserve vessels would be outside of the 
agreement. And we put that into this treaty to be ratified.
  They said they needed 30 additional months of the current title 11 
financing program for our shipbuilders to cover projects that were 
close to having their applications in. And we did that.
  They said they needed clarification that the limited restructuring 
subsidies for some countries, which were allowed under the agreement to 
four countries in order to reduce their shipbuilding capacity, would be 
actionable if they, in fact, increased their capacity instead of 
reduced their capacity. And we did that.
  It is unfortunate that, in the end, some would agree only on a 
perfect agreement. If anyone has been here longer than 2 weeks, he or 
she knows there are no such things as perfect bills, perfect 
legislation, or perfect treaties--or perfect anything. We are humans 
who try to do the best we can. Perfection is not something that we, 
oftentimes, are able to achieve.
  So, while this agreement may not have been perfect, we answered in 
each instance the opposition of those who continue to oppose this 
treaty. They, in my opinion, will be the ones who will ultimately 
suffer the most by their stopping this Congress from bringing forth 
this agreement for ratification.
  I know there are a lot of people who worked very hard. I commend 
Congressman Sam Gibbons, from the other body, who really tried to bring 
his people together on this issue. Senator Bill

[[Page S11497]]

Roth, the distinguished chairman of the Senate Finance Committee, 
worked very hard with his staff to say, yes, let us meet to try to 
bring this together. Our Democratic leader, Tom Daschle, tried to urge 
people to sit and negotiate. And also, particularly, Senator Trent 
Lott, the majority leader, who hosted meetings with the differing 
parties to try to bring people closer together, to say, yes, we should 
get this agreement in a posture to which everyone could agree.
  I will conclude, Mr. President. We have been ravaged, ravaged by the 
subsidy practices of other countries in the shipbuilding industries. 
This agreement that two different administrations hammered out and 
negotiated over a 7-year period was an effort to end those subsidy 
practices of those other countries so the United States, which does not 
have a direct subsidy program, would be able to compete with our 
competitors from around the world on a level playing field.
  Unfortunately, in the absence of this agreement being ratified by 
this body, we as a country have a signature on a piece of paper which 
is meaningless because we in the Senate could not bring the parties 
together to see the benefits of this agreement. It is a most 
unfortunate set of circumstances. It is unfortunate because there will 
be thousands of men and women who work in these yards every day who 
will be disadvantaged and who will be less competitive, not because 
they have less skills or are less productive, but because they are 
unable to compete with other governments.
  Our workers and our industry and our engineers and our technicians 
can compete with any other engineer or any other technician or any 
other worker anywhere in the world. But our workers cannot compete with 
other governments who are not concerned about making a profit. We 
cannot compete under those terms with another government that so highly 
subsidizes those industries in those nations.

  It is clear, at a time when we are talking about reducing Medicaid 
benefits, reducing welfare benefits, reducing benefits in Medicare, 
that we are certainly not going to start subsidizing our shipbuilding 
industries in the opposite direction.
  So I am extremely disappointed, but, as always, I try to always be 
optimistic. There will be those in the next Congress who will realize 
this was a tragic mistake. I say to the other countries around the 
world that they, too, should look upon this effort, not as a final 
failure on the part of the United States, but rather only a pause in 
the legislative process, and, in the next Congress, hopefully we will 
get back on track and get our industries together to allow this 
Congress, and particularly this body, to approve what I think is a good 
treaty.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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