[Congressional Record Volume 143, Number 69 (Thursday, May 22, 1997)]
[Senate]
[Pages S4999-S5000]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          OECD SHIPBUILDING AGREEMENT IMPLEMENTING LEGISLATION

  Mr. LOTT. The congressional participation in the OECD shipbuilding 
agreement continues in the 105th Congress. On April 22, 1997, Senator 
Breaux introduced S. 629, the OECD Shipbuilding Agreement Act. On April 
30, 1997, the Senate Committee on Commerce, Science, and 
Transportation, chaired by Senator McCain, held a hearing on trade 
matters which included the OECD shipbuilding agreement. On June 5 that 
hearing will be continued with the focus on this particular maritime 
trade policy.
  I must say that S. 629 represents the administration's attempt to 
reconcile their earlier legislative proposal made in the 104th Congress 
with the successful amendment made by the House of Representatives to 
that bill. Let me be clear, while the current bill does not address all 
of the concerns voiced by America's largest shipbuilders, it is a 
positive step in the right direction. My colleagues must not ignore it.
  It also begins to deal with issues I raised in my two colloquies in 
the Senate with Senator Snowe.
  I intend to work with Senator Breaux to amend S. 629 so that all 
appropriate maritime solutions are incorporated. At a recent maritime 
function, I challenged the audience to examine the new language and to 
offer constructive improvements. Our Nation has international maritime 
responsibilities and we must respond to the challenge.
  I believe that with the introduction of S. 629, the administration 
has made an honest attempt to address the majority of the concerns.
  I plan on working with my colleagues in both the Senate and the House 
of Representatives to ensure that acceptable ratification and 
implementation legislation for the OECD shipbuilding agreement is 
passed by this Congress.
  Mr. BREAUX. I thank the majority leader for his efforts to address 
the concerns of all U.S. shipbuilders while achieving proper 
ratification and implementation of this important international 
agreement.
  Mr. LOTT. A primary thrust of the amendment in the 104th Congress by 
the House of Representatives was to clarify that the agreement shall 
not affect in any way the Jones Act and other laws related to our 
essential coastwise trade. My colleagues know my position on the Jones 
Act--I support it unequivocally. I believe the language in S. 629 also 
supports the Jones Act by requiring the withdrawal of the United States 
from the agreement if it interferes with our coastwise trade laws. 
However, I am continuing to work with Senator Breaux to further 
strengthen this provision.
  Mr. BREAUX. I agree with the majority leader. This legislation 
represents a strong reaffirmation to the world of the United States 
steadfast support for the Jones Act.
  Furthermore, the House of Representatives amended H.R. 2754 to 
clearly preserve the authority of the Secretary of Defense to define, 
for the purposes of exclusion from coverage under the agreement, the 
terms ``military vessel'', ``military reserve vessel'', and ``essential 
security interest''. While the administration and the Office of the 
USTR attempted to define ``military reserve vessel'' by including a 
description of current military reserve vessel programs, some have 
expressed concerns that this approach might in the future limit the 
flexibility of the Secretary of Defense to implement additional 
programs, such as the National Defense Features Program. I am working 
with Senator Lott to redraft this provision in a way that will not 
limit United States national security options.

  Mr. LOTT. Acknowledging the valid concerns raised by Representative

[[Page S5000]]

Bateman is appreciated. I believe together we can find the right 
definition to ensure our national security is protected. No one wants 
to jeopardize our military capabilities.
  S. 629 would also grant the United States a 2-year extension for the 
title XI shipbuilding loan guarantee program to continue under its 
current terms and conditions. This too is a move toward equitable 
implementing language. However, other signatories, including Belgium, 
Portugal, Spain, and South Korea, were provided special arrangements, 
exemptions, and transition programs under the Agreement.
  When the House of Representatives amended H.R. 2754 in the last 
Congress, it provided a 3-year transition period for the title XI 
program. This is an essential component for a fair agreement and I 
intend to work with Senator Breaux to restore the full 3-year 
transition period as provided in last year's House bill.
  Mr. BREAUX. H.R. 2754, as amended by the House of Representatives, 
would have required that third country anti-dumping cases taken by the 
Office of the USTR to the third country be adjudicated in a manner 
similar to that provided by the agreement. Some were concerned that S. 
629 would require that the injurious pricing action be taken in 
accordance with the laws of that third country, without regard to 
whether those laws are consistent with the agreement. I intend to work 
with Senator Lott to ensure that such third country proceedings are 
consistent with the injurious pricing actions of the agreement.
  Mr. LOTT. Many of our American shipbuilders also expressed their 
concern to me that several countries with a significant shipbuilding 
industrial presence are not signatories to the agreement. This reduces 
the effectiveness of the agreement. S. 629 includes a provision not 
found in last year's House bill which would direct our Trade 
Representative to seek the prompt accession to the agreement by these 
other countries. This is one step in the right direction. Another step 
is that S. 629 also would direct our Trade Representative to use the 
mechanisms already available under existing U.S. trade laws to redress 
efforts by non-signatories to undermine the agreement.
  Additionally, I expect our Trade Representative to vigorously protest 
the recent approval of approximately $2.1 billion in restructuring aid 
to shipyards in Germany, Spain, and Greece. I'm sure that all will 
agree that the agreement has no chance of holding together if any 
signatories work around its provisions in order to continue unfairly 
subsidizing their shipyards.
  Mr. BREAUX. I would also like to note that S. 629 includes another 
important provision not found in H.R. 2754, as amended by the House of 
Representatives. S. 629 provides for U.S. shipyards to continue to 
receive 25-year title XI financing when competing in bids against 
subsidized non-signatory shipyards.
  I want to once again thank the majority leader for his efforts to 
resolve the differences within the U.S. shipbuilding industry over the 
agreement and to find an appropriate solution that benefits the entire 
U.S. maritime industry.
  Mr. LOTT. I anticipate a swift resolution of the jurisdictional 
issue. The Senate should focus on the successful enactment of a 
corrected version of S. 629.
  I look forward to working with the other members of the Senate 
Commerce and Finance Committees to develop fair implementing language.
  I want to personally thank you John for your dedication to America's 
maritime industry and I look forward to a continued partnership in 
finding an acceptable consensus for the agreement's implementing 
language.

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