[Congressional Record Volume 143, Number 137 (Monday, October 6, 1997)]
[House]
[Pages H8373-H8383]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
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REAUTHORIZATION OF THE EXPORT-IMPORT BANK
The SPEAKER pro tempore (Mr. Stearns). Pursuant to House Resolution
255 and rule XXIII, the Chair declares the House in the Committee of
the Whole House on the State of the Union for the further consideration
of the bill, H.R. 1370.
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In the Committee of the Whole
Accordingly the House resolved itself into the Committee of the Whole
House on the State of the Union for the further consideration of the
bill (H.R. 1370) to reauthorize the Export-Import Bank of the United
States, with Mrs. Emerson, Chairman pro tempore in the chair.
The CHAIRMAN pro tempore. When the Committee of the Whole rose on
Tuesday, September 30, 1997, amendment No. 3 printed in House Report
105-282 offered by the gentleman from New York [Mr. LaFalce] had been
disposed of.
It is now in order to consider amendment No. 4 printed in House
report 105-282.
Amendment No. 4 Offered by Mr. Rohrabacher
Mr. ROHRABACHER. Madam Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 4 offered by Mr. Rohrabacher:
At the end of the bill, add the following:
[[Page H8374]]
SEC. 10. PROHIBITION AGAINST ASSISTANCE TO COMPANIES THAT ARE
AT LEAST 50 PERCENT OWNED BY A FOREIGN
GOVERNMENT OR MILITARY.
Section 2(b) of the Export-Import Bank Act of 1945 (12
U.S.C. 635(b)) is amended by adding at the end the following:
``(12) Prohibition Against Assistance to Companies That Are
At Least 50 Percent Owned by a Foreign Government or
Military.--
``(A) Determination of Ownership.--On application for
assistance involving a transaction in connection with the
import or export of any good or service, the Bank shall
determine whether any company involved in the transaction is
at least 50 percent owned by the government or military of a
foreign country.
``(B) Prohibition.--The Bank shall not insure, guarantee,
extend credit, or participate in an extension of credit
involving any transaction in connection with the import or
export of any good or service if any company involved in the
transaction is at least 50 percent owned by the government or
military of a foreign country.''.
The CHAIRMAN pro tempore. Pursuant to House Resolution 255, the
gentleman from California [Mr. Rohrabacher] and a Member opposed each
will control 5 minutes.
The Chair recognizes the gentleman from California [Mr. Rohrabacher].
Mr. CASTLE. Madam Chairman, will the gentleman yield?
Mr. ROHRABACHER. I yield to the gentleman from Delaware.
Mr. CASTLE. Madam Chairman, I ask unanimous consent that the time for
debate on the two Rohrabacher amendments be extended to 20 minutes from
the 10 minutes allocated from the rule, to be equally divided between
the proponents and opponents. We have discussed this, and it is in
everyone's interest to do this.
The CHAIRMAN pro tempore. Is there objection to the request of the
gentleman from Delaware?
There was no objection.
Mr. ROHRABACHER. Madam Chairman, I yield myself such time as I may
consume.
Madam Chairman, my amendment to H.R. 1370 would prohibit the Export-
Import Bank from providing assistance for transactions involving the
import or export of goods or services with companies that are at least
50 percent owned by a foreign government or the military of a foreign
government. My amendment will also prohibit the bank from insuring,
extending credit, or participating in an extension of credit with such
a company.
Numerous studies show that the largest percentage of Export-Import
Bank transactions benefit a small number of mega private corporations
at the expense of small business and/or the taxpaying citizenry. It is
ridiculous that while other U.S. agencies, such as the Agency for
International Development, and multinational-multilateral banks are
spending billions of U.S. tax dollars on privatization efforts, that
the Export-Import Bank subsidizes transactions with State or military-
owned companies. Often these are the vestiges of failed socialist
state-planned political and economic systems.
Even worse, some of these subsidized firms may be owned by the
military arm of dictatorial regimes; for example, the Peoples
Liberation Army in China, Communist China.
I have heard concern that my amendment would prevent companies from
participating in large infrastructure, power generation,
communications, and transportation projects in developing countries.
Clearly this amendment does not prevent American companies from being
involved in such projects.
What it specifies is that the U.S. taxpayers should not be put at
risk with guaranteeing or loaning hundreds of millions of dollars for
ventures with state- or military-owned companies that are shunned by
private lenders.
This is in fact corporate welfare that subsidizes imports over
exports. For example, in China, where U.S. airline companies are
receiving export-import funding, those deals, more often than not,
involve the transfer of American technology and the development of
Chinese assembly lines that in a few short years will be in direct
competition with United States workers. This is the worst kind of
short-sightedness, not only on the part of the companies involved, but
on the part of the U.S. Government. We are subsidizing the creation of
our own high-tech competition in dictatorships like China.
Will my amendment really deter the creation of new American jobs?
According to the Congressional Research Institute, and I quote, Most
economists doubt that a nation can improve its welfare over the long
run by subsidizing exports. At the national level, export financing
merely shifts production among sectors within the economy, rather than
adding to the overall level of economic activity, and subsidizes
foreign consumption at the expense of the domestic economy.
In addition to sustaining the American job base, this amendment will
encourage our trading partners to expedite the privatization of state-
owned and military-owned companies, and to reduce the power of foreign
businesses that are controlled by government apparatchiks, military
brass, and other anti-democratic cronies. This is in the long-term
interest of our people, it is in the long-term interest of our economy,
instead of having some clique, some what they call crony capitalism,
some clique of capitalists in our country being given resources that
should be going out to the small businessmen and women of our country,
and it also protects our own workers from subsidizing their
competition.
Madam Chairman, I reserve the balance of my time.
Mr. FLAKE. Madam Chairman, I rise in opposition to the amendment.
The CHAIRMAN pro tempore. The gentleman from New York [Mr. Flake] is
recognized for 10 minutes.
Mr. FLAKE. Madam Chairman, I yield myself such time as I may consume.
Madam Chairman, this particular amendment and its sponsor I tend to
believe does not understand what the Eximbank really does. It is
completely unilateral, this amendment, and would significantly damage
the ability of U.S. companies to compete for infrastructure projects in
most of the regions of the world. No other government will follow suit,
so this amendment simply gives foreign companies a big advantage over
U.S. firms and our workers.
The amendment applies worldwide, preventing Eximbank financing in
most of the lucrative and most fast-growing markets in the world, where
Exim's financing is essential to U.S. companies to compete in these
various marketplaces.
I think we need to understand that in the countries where Exim is
operating, that those countries that are participating with these
small, developing nations are in fact countries that provide
subsistence to their various companies, and if we do not do that we
will not be in a competitive posture with them.
U.S. industries hurt most under this amendment include power plant
equipment makers, aircraft makers, oil and gas service companies,
construction and engineering firms, communications equipment makers,
water treatment equipment makers, et cetera.
By undercutting American exporters in these markets, this amendment
would directly cut American exports and export-related jobs. These
exports and jobs would go to foreign countries which would still have
their government's full financial backing. I believe that this puts us
in a competitive posture that takes away from our ability to be able to
function appropriately in these marketplaces.
By cutting U.S. exports, this amendment will worsen our already
dismal record of trade deficit. The amendment is based on the false
notion that it is wrong for U.S. Governments to help American exporters
sell our goods and services to government-owned companies anywhere in
the world. Since no other government will follow this policy, foreign
government-owned companies will simply buy from Europe, Japanese,
Korean, and other competitors. It will have no impact on foreign
governments, nor will it hasten privatization.
Foreign corporations and their workers are the only ones who will
benefit from this amendment, because they will get the business that
American exporters will lose by the denial of Exim financing.
Madam Chairman, I reserve the balance of my time.
Mr. FLAKE. Madam Chairman, I yield the balance of my time to the
gentleman from Delaware [Mr. Castle], the distinguished chairman of the
subcommittee.
The CHAIRMAN pro tempore. Without objection, the gentleman from
Delaware [Mr. Castle] will control the remainder of the time, and is
recognized for 7\1/2\ minutes.
There was no objection.
[[Page H8375]]
Mr. CASTLE. Madam Chairman, I yield myself such time as I may
consume.
Madam Chairman, I am in firm opposition to this amendment. I know it
means well, but we do not have time to go through that. But essentially
it would severely damage U.S. exports to developing economies,
developing markets, and post-Communist foreign countries by prohibiting
Exim financing for the purchasing of U.S. goods and services to any
foreign buyer that is at least 50 percent owned by a foreign government
or military.
It is ill-conceived, and frankly it is counterproductive. It guts
Eximbank's ability to effectively support U.S. exporters and their
workers, our workers, throughout much of the world. It is plainly
contrary to the national interests and the economic well-being of
American workers.
It is opposed by the Department of State, which has starkly warned
that the amendment could do great damage to U.S. commercial interests.
It is opposed by the Department of Treasury, which points out that most
buyers in the developing world are public sector entities. It is just a
fact. A prohibition on sales to such entities will put Eximbank out of
business and cede export sales to our competitors.
The U.S. Chamber of Commerce has come out in strong opposition to
this particular amendment, while at the same time strongly supporting
H.R. 1370, the Export-Import Bank.
The National Association of Manufacturers states that the Rohrabacher
amendments would reduce U.S. exports or public works projects in every
region of the country, and block U.S. exports to government-owned
customers. These amendments would hand over billions of dollars of
contracts to our major competitors in Germany, Japan, and France, among
others.
According to Exim, had this amendment been in effect since 1987, it
would have cost the United States $8.7 billion in aircraft sales alone.
It would directly jeopardize more than $11 billion in future aircraft
sales.
Why would it wound us so much? Very simply, it would cut off Exim
financing for the export of U.S. goods and services to any public
sector economy anywhere around the world, period. For example, if a
United States company is competing on a public power project in South
Africa against a Japanese firm being financed by JEXIM, Japan's export
credit agency, this amendment would concede that sale to the Japanese.
That is why we need a strong Eximbank, to level the playing field for
American exporters and their workers.
Let us be clear about the effects of this amendment. It would
penalize U.S. businesses and their workers trying to compete and win in
the global marketplace. It would lose billions in U.S. export sales. It
would lose hundreds of thousands of good, high-paying American jobs.
The amendment misperceives the purpose of Exim. It operates on
commercial principles to support U.S. exporters. It operates as a
lender of last resort. It finances the purchase of U.S. exports by
foreign buyers at market rates. It does not subsidize foreign
governments or militaries.
A vote for this amendment is a vote to impose sanctions on United
States businesses and United States workers because it prohibits Exim
from assisting United States exports to the fastest growing emerging
markets of virtually every continent around the world: Argentina,
Brazil, Central Asia, Chile, India, Mexico, Russia, South Africa and
the Ukraine. A vote for this amendment is tantamount to closing down
the Eximbank. I would encourage all of us to rise in opposition to this
amendment.
Madam Chairman, I reserve the balance of my time.
Mr. ROHRABACHER. Madam Chairman, I yield myself 1 minute.
Madam Chairman, first of all, let us just note that when we subsidize
someone who is doing business overseas, that money comes from a pool of
money that is not available for our own small businessmen, for
everybody else who wants to do that kind of business here in the United
States.
There is no reason that I see that we should provide huge American
corporations with loans that are taken right out of the pockets of
these small businesses that would like to maybe expand their little
shop by a little bit in their hometown. That is where that money is
coming from. It is no magic wand that is coming out of nowhere. It is
coming from our pockets, and it is subsidizing, as I say, some of the
largest companies in this country to do business where? In the
developing world. Many times that is a euphemism for vicious, ugly
dictatorships that cannot get loans because they are too risky for
private owners to loan this money. And $8 billion in aircraft loans?
What accompanies those $8 billion in loans has been mandates that we
set up manufacturing units in those other ``developing countries,'' not
in the long run but in the medium run. That means we are setting up
competition for our own aerospace industry. It is ridiculous. Vote
against this.
Mr. CASTLE. Madam Chairman, if the gentleman will yield, I agree with
voting against it.
Mr. ROHRABACHER. Vote in support of the amendment.
Mr. CASTLE. Madam Chairman, I yield 10 seconds to the gentleman from
New York [Mr. Flake].
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Mr. FLAKE. Madam Chairman, I think the gentleman from California [Mr.
Rohrabacher] does not quite understand how the Exim works. These are
American companies that are doing business in countries where other
countries allow for some type of subsidy for the companies that are
operating there. I think the gentleman is correct in stating, though,
that we should vote against the amendment.
Mr. CASTLE. Madam Chairman, I yield 2 minutes to the gentleman from
Iowa [Mr. Leach].
Mr. LEACH. Madam Chairman, let me stress the issue of airplane sales
has been raised. That professionals tell us that if this policy had
been in effect over the last decade, it would have cost about $8.7
billion in U.S. aircraft sales and in the immediate future about $11
billion in aircraft sales.
Yes, it is true that some of our aircraft manufacturers have made
certain agreements with countries around the world to produce parts of
crafts there. On the other hand, so has Airbus. So the question becomes
whether the United States wants to become a part of these markets or
not. If we support this amendment, the United States will be blocked
out of these markets, and once we are blocked out of certain markets,
that ends up having a literally cyclonic effect for other markets. It
is not as if one market stands alone.
Madam Chairman, in terms of what it means for jobs, it has been
estimated that in just eight key emerging markets the approach
contained in this amendment would lose about $16 billion of U.S. export
sales. That is 227,000 jobs, or about 521 jobs per congressional
district. I think that is a pretty difficult thing to suggest that we
ought to be eliminating.
Finally, the issue is not whether Exim as an institution is forced to
be closed down. The issue is whether we cede markets to other
countries, whether we embargo United States exports, whether we give up
United States jobs.
Madam Chairman, this is a case of unilateral economic disarmament. It
is well-intended, but it is clearly counterproductive. I urge in no
uncertain terms the defeat of this amendment.
Mr. ROHRABACHER. Madam Chairman, I yield myself 1\1/2\ minutes.
Madam Chairman, the only economic disarmament that is going on is the
billions of dollars that we are taking out of our country and shipping
manufacturing units to other countries, ``developing'' countries, and
dictatorships like Vietnam and China.
Yes, this is put under the guise of being exports, but, more often
than not, we are not talking about somebody selling refrigerators over
in China or Vietnam, we are talking about companies getting subsidies
from the U.S. Government in order to set up a manufacturing unit in
those countries.
Like these airline deals that we are talking about, yes, we are
selling some airplanes, but part of the deal is, we are setting up an
aerospace industry to compete against our own aerospace industry a few
years down the line.
Madam Chairman, this is so shortsighted, and we are not talking about
exports here, we are talking about setting up temporary sales, some
short-run sales, manufacturing units that
[[Page H8376]]
will import into the United States. This is a disaster in the medium
run. But, again, we have the special interests trying to get their
hands on the taxpayers' dollars for a short-term, cut-and-run
philosophy on profit.
Madam Chairman, this is not going to be in the long-term interest of
the American taxpayers or the American people. After they set up their
companies in these countries, they are going to come back and put our
own working people out of business.
Madam Chairman, I urge my colleagues to vote for this amendment and
let us get on to privatization in the Third World, in the developing
world, and let us not subsidize these companies like the People's
Liberation Army in China.
Mr. CASTLE. Madam Chairman, I yield 1 minute to the gentleman from
New York [Mr. LaFalce].
Mr. LaFALCE. Madam Chairman, I know it is not intended, but I believe
underlying this amendment is a certain arrogance. That is that every
other country in the world and company in the world must be and do as
we in the United States are, that they cannot have their own system.
And if they do, we will not sell them products or services with any
Eximbank assistance.
I really think that that is shortsighted. As a matter of fact, were
we to closely examine the United States, for example, New York State,
we have a New York State Power Authority. It is a governmental entity
that provides power in New York State. We have in western New York the
Niagara Frontier Transportation Authority, a governmental entity
providing public transportation.
Under the Rohrabacher amendment, their counterparts in foreign
countries would be excluded from participating with American
businessmen and women in the purchase of goods, products, and services
if Eximbank were to attempt to be of assistance.
Madam Chairman, I really think that is rather foolish and
narrowminded, and I think the amendment should be rejected.
Mr. ROHRABACHER. Madam Chairman, I yield myself 1 minute.
Madam Chairman, I am not suggesting, and this amendment is not
suggesting, that American businesses cannot go any place in the world,
whether it is dictatorships or nondictatorships, developing world or
developed world, and do business. They are welcome to do so. The major
question is whether or not the taxpayers of this country should be
subsidizing these enterprisers who go overseas, should be subsidizing
them and offering them loan guarantees, et cetera, and direct loans,
through the Export-Import Bank.
Madam Chairman, these people still can go to the private sector and
get their loans, they can still participate in whatever project they
want, but they cannot expect the American taxpayer to subsidize ongoing
socialist projects overseas or ongoing projects in these dictatorships
where they own the enterprises, and so it becomes a bolstering of the
regime rather than just a business enterprise.
Madam Chairman, this amendment would exclude no one from doing
business overseas; it would end the taxpayer subsidy of this type of
business.
Mr. CASTLE. Madam Chairman, I yield 45 seconds to the gentleman from
Illinois [Mr. Manzullo].
(Mr. MANZULLO asked and was given permission to revise and extend his
remarks.)
Mr. MANZULLO. Madam Chairman, with all deference to the gentleman
from California, the Eximbank has nothing to do with projects overseas.
All Eximbank does is make otherwise unavailable financing to companies,
such as Beloit Corporation, which is one of three worldwide
manufacturers of papermaking machines and has 2,900 subcontractors,
hundreds of thousands of jobs. These are blue-collar workers. The
purpose of Eximbank is to allow blue-collar workers to keep their jobs
in the United States. Eximbank does not subsidize projects outside of
the United States.
Madam Chairman, that is the problem with people attacking Eximbank
thinking it is corporate welfare when they do not even understand what
this bank does.
Mr. ROHRABACHER. Madam Chairman, I yield myself the balance of my
time.
Madam Chairman, the gentleman from Illinois [Mr. Manzullo], my good
friend, has demonstrated for me exactly why my amendment is so
important. I do not want us to be subsidizing sending papermaking
machines to another country to then compete with our own people who are
involved with the paper manufacturing industry in the United States of
America.
If people want to sell cardboard boxes or whatever type of machines
we are talking about overseas, more power to them. Let them go out and
sell those cardboard boxes to Vietnam or China or a dictatorship,
democracy, we do not care.
Madam Chairman, I do not need anyone to tell me that the American
taxpayer wants us to sell manufacturing units overseas to compete with
their own jobs, especially when we are talking about the subsidization
here, which is what this amendment does, prevents us from subsidizing
all of these state-run enterprises.
Madam Chairman, what we have got is, fine, my amendment would not
affect people who want to go out and export and be involved in
enterprises overseas whatsoever if they do so at their own risk and
they get private capital. But the private capital will not subsidize
these enterprises overseas in risky situations or in dealing with
companies overseas like the People's Liberation Army where there is a
political risk.
Why in the world are we having the American taxpayer subsidize this
for these big corporations, whether it is a paper manufacturing company
setting up a paper manufacturing company overseas or whether it is a
refrigeration unit?
Motorola set up a chip manufacturing unit in China. They ended up in
China using the chips from that company to develop land mines that will
explode on anyone who is trying to defuse the land mine. I am not sure
if they have an Export-Import Bank loan on that, but if they did, they
should not have.
So, Madam Chairman, I would say let us keep the taxpayers' dollars
here. Let that stay in the pool of money that is available to our own
small business rather than subsidizing these enterprises overseas which
in the end compete with the American jobs.
Madam Chairman, I call for the support of my amendment.
Mr. CASTLE. Madam Chairman, I yield the balance of my time to the
gentleman from Florida [Mr. Mica].
Mr. MICA. Madam Chairman, Exim does not ship any money or set up any
manufacturing overseas. What it does is exactly what the opponent of
Exim has said: It helps American businesses finance the sale of
American goods and products overseas where no one else will touch the
financing. That is the whole purpose of Exim, to help create U.S. jobs,
U.S. opportunities, in the sale of U.S. goods where they cannot obtain
financing in any other market or by any other means.
Madam Chairman, I urge my colleagues to oppose the amendment.
Mr. KIM. Mr. Chairman, I rise in opposition to the Rohrabacher
amendment. While I appreciate the intent of the amendment, it is simply
too broad and makes no distinction between America's friends and foes.
If adopted, this amendment could result in the loss of billions of
dollars of American export sales and tens of thousands of American
jobs, including those of my constituents who work in the commercial
aerospace industry.
Here's just one example of the damage this amendment could do to
American exports. In many developing countries, the only source strong
enough to support a national airline is the government. Like airlines
all over the world these national airlines continue to expand and
modernize. As part of this process, many of these government-owned
airlines utilize the Ex-Im Bank as a key source of financing for the
American-built commercial aircraft they buy. However, if Boeing or
Douglas aircraft are denied access to Ex-Im financing for sales to
these airlines, as this amendment would do, that won't stop these
airlines from modernizing their fleets. Instead, they will turn to the
Europeans who offer Ex-Im type financing and these airlines will buy
Airbus products. That means many more jobs in Germany and France and
fewer in America.
This is not a minor example. The list of airlines owned by a
government or in which a government holds the majority of shares that
have bought or could buy Boeing or Douglas aircraft is extensive. This
amounts to well over 1000 recent or current aircraft orders. Of these,
some 200 are for Douglas aircraft which are built in Long Beach, CA.
Each order sustains hundreds of California jobs.
[[Page H8377]]
Among the major airlines that could be prohibited from utilizing Ex-
Im financing by this amendment are:
Aer Lingus--the national airline of Ireland; Air Afrique--the joint
airline of eleven different African states; Air France; Air India; Air
Malta; air Zimbabwe, Alitalia--the national airline of Italy; Balkan--
the Bulgarian airlines; Biman, the national airline of Bangladesh;
Cyprus Airways; Egyptair; El Al--Israel airlines; Ethiopian Airlines;
Finnair of Finland; Gulf Air--the joint airline of the Bahrain, Qatar,
the United Arab Emirates and Oman; Garuda of Indonesia; Indian
Airlines--the domestic airline of India; Kuwait Airways; Lithuanian
Airlines; Lot--the national airline of Poland; Malev, the national
airline of Hungary; Nigeria Airways; Olympic Airways--the national
airline of Greece; Royal Air Maroc of Morocco; Royal Jordanian
Airlines; Saudia--the national airline of Saudi Arabia; Singapore
Airlines; South African Airways; TAP/Air Portugal; Tarom Romanian
Airlines; China Airlines; Aeroflot Russian Airlines and Turkish
Airlines.
Of course, Boeing and Douglas do not have to approach the Ex-Im Bank
for financing sales to all of these airlines. But, they have for many.
And, American airplanes have been bought.
Mr. Chairman, Israel, Ireland, Portugal, Italy, Bangladesh,
Lithuania, Poland, Romania, Bulgaria, South Africa, India, France,
Greece, Finland, Malta, and Hungary are all democracies and friends of
the United States. Some, like Israel, are strategic allies of the
United States. Yet, this amendment treats aircraft purchases for their
national airlines no different than those of dictatorships like Syria,
Iran, Libya, and Cuba. There are already laws on the books that prevent
U.S. commercial aircraft sales to these countries. If there are
specific countries that the authors of the amendment want to target,
then they should offer an amendment targeting only those countries, not
the significant list of friends I have noted.
I am also concerned that in the course of this debate, the charge has
been made that the Ex-Im Bank uses American tax dollars to subsidize
foreign businesses that compete against American industry. This is
wrong. The Ex-Im Bank provides financing, loan guarantees and insurance
programs like many other banks. While these guarantees are backed up by
the taxpayer, so too are many domestic housing, education and other
loan guarantees. Full repayment is required. In fact, the Ex-Im Bank is
specifically prohibited from providing financing to U.S. exporters
unless there is a reasonable assurance of repayment. Furthermore, Ex-Im
Bank financing can only be used to help export American products.
The bottom line is that this amendment, if adopted, could result in
the loss of billions of dollars of aircraft sales for no apparent
positive reason. I cannot explain such action to an aerospace worker in
my district who watches the sale of a new MD-95 or MD-11 vanish and be
replaced by a European Airbus order. I urge my colleagues to support
American jobs and defeat this amendment.
The CHAIRMAN pro tempore (Mrs. Emerson). All time for debate on the
amendment has expired.
The question is on the amendment offered by the gentleman from
California [Mr. Rohrabacher].
The question was taken; and the Chairman pro tempore announced that
the noes appeared to have it.
Mr. ROHRABACHER. Madam Chairman, I object to the vote on the ground
that a quorum is not present and make the point of order that a quorum
is not present.
The CHAIRMAN pro tempore. Pursuant to House Resolution 255, further
proceedings on the amendment offered by the gentleman from California
[Mr. Rohrabacher] will be postponed.
The point of no quorum is considered withdrawn.
The CHAIRMAN pro tempore. It is now in order to consider Amendment
No. 5 printed in House Report 105-282.
Amendment No. 5 offered by Mr. Rohrabacher
Mr. ROHRABACHER. Madam Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 5 offered by Mr. Rohrabacher:
At the end of the bill, add the following:
SEC. 10. PROHIBITION AGAINST ASSISTANCE TO ENTITY OWNED BY A
GOVERNMENT WHICH IS NOT CHOSEN THROUGH FREE AND
FAIR DEMOCRATIC ELECTIONS OF WHICH LACKS AN
INDEPENDENT JUDICIARY, OR FOR IMPORT FROM OR
EXPORT TO A COUNTRY WITH SUCH A GOVERNMENT.
Section 2(b) of the Export-Import Bank Act of 1945 (12
U.S.C. 635(b)) is amended by adding at the end the following:
``(12) Prohibition Against Assistance to Entity Owned by a
Government Which Is Not Chosen Through Free and Fair
Democratic Elections or Which Lacks an Independent Judiciary,
or for Import From or Export to a Country With Such a
Government.--The Bank shall not insure, guarantee, extend
credit, or participate in an extension of credit in
connection with--
``(A) a transaction by an entity which is owned by a
government that--
``(i) is not chosen through free and fair democratic
elections, as certified by the President of the United
States; or
``(ii) lacks a independent judicial system; or
``(B) the import of any good or service from, or export of
any good or service to, a country with a government described
in subparagraph (A).''.
The CHAIRMAN pro tempore. Pursuant to the order of the Committee, the
gentleman from California [Mr. Rohrabacher] and a Member opposed each
will control 10 minutes.
The Chair recognizes the gentleman from California [Mr. Rohrabacher].
Mr. ROHRABACHER. Madam Chairman, I yield myself such time as I may
consume.
Madam Chairman, my amendment to H.R. 1370 would prohibit the Export-
Import Bank from providing assistance for transactions within a country
ruled by a government which is not chosen through free and fair
elections, as certified by the President of the United States, or which
lacks an independent judiciary. This amendment will also prohibit
Export-Import Bank transactions for import from or export to a country
with a nondemocratic government.
While supporters of an unrestricted Export-Import Bank argue that the
Bank's role is to provide support for transactions that cannot find
private support, let me note that in countries where private
international banks are reluctant to fund business transactions, the
Export-Import Bank's subsidized lending and guarantees often reward bad
economic policies and relieve nondemocratic governments of the need to
create a free market environment that genuinely attracts sound foreign
capital investment.
Madam Chairman, worse than that, these loans reinforce these
dictatorial governments, and, basically, these governments that deny
their people their basic civil liberties and economic freedoms are
being told that they can be subsidized, even though they have these
restrictions on their own people and it takes away their pressure then
to democratize.
Opponents of my amendment also claim that Export-Import Bank
transactions primarily assist small businesses in this country. To the
contrary. A recent study by the CRS, that is, Congressional Research
Service, shows that small businesses account for only 12 to 15 percent
of the Export-Import Bank's total authorization.
CRS also emphasizes that, quote, subsidized export financing raises
financial costs for all borrowers by drawing financial resources that
otherwise would be available for other uses, thereby crowding some
buyers from the financial markets.
{time} 1530
This crowding-out effect might nullify any positive impacts
subsidizing export financing may have on the economy. In other words,
we are crowding out the little guy in this country in order to give
some big megacorporations the money they need to set up some company in
a dictatorship, and that money is no longer available to be loaned to
our small businessmen and women throughout the country. End of quote
from the Congressional Research Service.
It is our responsibility in Congress to appropriate America's
taxpayers' dollars wisely. It makes no sense to subsidize American
companies for doing business with largely corrupt and inefficient,
basically antidemocratic and socialist governments who are too risky
for these people to get loans from other sources in the private sector.
Our international business policy should be based on reinforcing free
markets and democratic institutions where these people could get
private sector loans. This is especially true when the business being
subsidized is building manufacturing units abroad, which means U.S.
working people, taxpayers, are subsidizing the building of factories in
dictatorships to produce goods in competition with their own jobs.
Most of the investment that has gone into many of these countries,
and much of it into China, we are not selling refrigerators there. We
are selling people who are exporting what? Manufacturing units of
refrigerators which
[[Page H8378]]
end up being sold in the United States and putting our own people out
of work. This is immoral. It is wrong, especially wrong when we are
dealing with a dictatorship that is the recipient of this business
activity.
My amendment will help protect U.S. taxpayers by preventing the
Export-Import Bank from providing corporate welfare to risky ventures
by megacorporations who should not be investing in these antidemocratic
societies in the first place. But if they do, they can do it at their
own risk. And it will keep us moral by preventing the taxpayers from
subsidizing and propping up those regimes.
This is in fact corporate welfare that subsidizes imports actually to
a higher degree than exports. For example, in China, where the United
States airline companies, which we have heard today, have sold their
products subsidized by the Export-Import Bank, we, as part of those
agreements, have set up an aerospace industry or are in the process of
setting up an aerospace industry that will put my people out of work in
the medium term, not the long term but the medium term. It is
ridiculous. If the dictatorships are making those sorts of demands, the
last thing we should do is subsidize it with the Export-Import Bank.
I would call on my colleagues to support my amendment and let us stop
this subsidization of providing manufacturing units for dictatorships.
Madam Chairman, I reserve the balance of my time.
The CHAIRMAN pro tempore [Mrs. Emerson]. Does the gentleman from
Delaware [Mr. Castle] rise in opposition to the amendment?
Mr. CASTLE. Madam Chairman, I do rise in opposition to the amendment.
The CHAIRMAN pro tempore. The gentleman from Delaware [Mr. Castle] is
recognized for 10 minutes.
Mr. CASTLE. Madam Chairman, I yield myself such time as I may
consume. Last time I looked the American government was not a
dictatorship. These are American businesses and American workers which
we are helping. Virtually nobody else is being helped at the same
level. We are helping them compete with other countries.
I do rise in very strong opposition to this amendment. This is a
debate about means and ends. The sponsor of the amendment seeks to
promote democracy and the rule of law abroad. So does this Member and
every Member of this body. There is no disagreement about the
objective, but there is disagreement about the means.
The amendment's sponsor evidently believes that the United States
should express its repugnance for undemocratic governments by enacting
sweeping, unprecedented global sanctions against ourselves by cutting
off trade, by unilaterally embargoing American exports and sacrificing
good, high-paying American jobs. I do not. The United States does not
advance its interest in democracy and the rule of law by punishing
ourselves by telling foreign purchasers of United States goods and
services to buy their industrial machinery, power equipment,
telecommunications and aircraft from European or Japanese companies.
The Department of State is opposed to this amendment. The Department
of the Treasury is also opposed to the amendment because Eximbank is
the most effective tool in the Treasury-led international negotiations
to reduce foreign export financing subsidies. The Export-Import Bank
itself is opposed to this and states very explicitly that their
business would be decimated by the Rohrabacher amendment. I will
include their letter for the Record.
The effect of this amendment would be to cut off Exim financing of
all export transactions in any country anywhere around the world with
an unelected government, such as in the Persian Gulf, Sub-Saharan
Africa, Central Asia and Southeast Asia. Likewise, the amendment would
also shut off Exim financing in any country around the world which does
not have an independent judiciary. This would include many countries in
the newly independent states, the Middle East and Southeast Asia. Exim
financing is cut off regardless of whether or not the U.S. exporter is
facing government-financed competition.
The amendment therefore shifts export sales and the jobs they support
from U.S. exporters all across the country to the exporters of our
competitors. How can this be in the national interest?
This amendment would leave U.S. exporters defenseless in the face of
foreign-government-financed competition for export contracts throughout
much of the developing world. I cannot imagine a more unsound and ill-
conceived basis for United States economic policy.
I urge my colleagues to reject this ill-conceived amendment.
Madam Chairman, I include for the Record the letter to which I
referred:
Export-Import Bank
of the United States,
Washington, DC, October 6, 1997.
Hon. Mike Castle,
Chairman, Subcommittee on Domestic and International Monetary
Policy, House of Representatives, Washington, DC.
Dear Chairman Castle: I am writing to express my great
concern about two amendments being offered by Congressman
Rohrabacher that seriously undermine the ability of U.S.
exporters to sell goods and services into emerging markets
and cost U.S. jobs. Simply stated, these two amendments put
Ex-Im Bank ``out of business''.
The Rohrabacher amendments cost U.S. jobs by preventing
U.S. companies from competing against Airbus and other
European and Japanese supported competitor companies. Had
these amendments been in effect during the past five years,
Ex-Im Bank would have been unable to support approximately
$50 billion out of $77 billion in U.S. exports that went
forward during this period. The loss of these exports would
have resulted in the loss of hundreds of thousands of jobs in
each of the five years.
Small business programs at Ex-Im Bank will be decimated by
the Rohrabacher amendments. Ex-Im Bank has worked diligently
over the last four years to simplify its small business
programs and make them accessible through delegated authority
arrangements. Last year alone, Ex-Im Bank directly supported
$2.4 billion in small business exports. Ex-Im Bank would be
unable to finance these U.S. small business exports under the
Rohrabacher amendments.
In short, these two amendments would prevent the Bank from
fulfilling its mission to support U.S. exports and thereby
create and sustain U.S. jobs. Without Ex-Im Bank, U.S.
companies and U.S. workers will be unable to compete in
emerging markets.
Sincerely,
James A. Harmon.
Madam Chairman, I reserve the balance of my time.
Mr. ROHRABACHER. Madam Chairman, I reserve the balance of my time.
Mr. CASTLE. Madam Chairman, I yield 2 minutes to the gentleman from
New York [Mr. Flake].
Mr. FLAKE. Madam Chairman, I rise in opposition to the amendment.
It seems to me that a part of our responsibility is obviously to
create U.S. jobs wherever that possibility exists for us. Indeed, what
we have done through Exim cannot be duplicated from any other source
that we have in America.
It seems to me that as we look at the letter that James Harmon has
sent and that the gentleman from Delaware [Mr. Castle] has asked to be
included in the RECORD, we would have lost a great deal of money and a
great number of jobs had we not had the Eximbank support for those
American companies who are doing business abroad over the last 5 years.
As a matter of fact, he estimates that we would have lost $50 billion
out of $777 billion in exports. That is not, it seems to me, the
direction that we ought to be going.
The gentleman who is the sponsor of the amendment seems to be moving
in a direction that takes out of hand the possibility for us to be able
to create jobs for American companies and for American citizens. I tend
to think that we cannot afford to support this amendment. It is
completely unilateral. No other government would adopt such
restrictions. It means that we have basically given this market over to
other countries and to other companies. That does not provide any kind
of creation of jobs for American citizens.
I would hope that as our colleagues come to vote on this particular
amendment, that they would vote against it and that we would continue
to provide the level of support for the Exim that we have in the past.
Mr. CASTLE. Madam Chairman, I yield 2 minutes to the distinguished
gentleman from Iowa [Mr. Leach], chairman of the Committee on Banking
and Financial Services.
Mr. LEACH. Madam Chairman, I thank my colleague for yielding me the
time. Let me just say this amendment not only defies rational
explication today, it defies our history. For half a century the United
States of America
[[Page H8379]]
has set a model around the world of active engagement with many
different societies, even when we disagree with what is happening in
those societies.
What this amendment says is, if we do not like what is happening in
another society, we are going to express our differences by hitting
ourselves in the face. It is patently counterproductive. I would say to
my distinguished friend that while he has certain premises and certain
concerns which we all share, by the same token he has a solution that I
think is a countersolution.
The great question is, is this country going to be better off to
constructively engage even with those with whom we differ, or are we
better off going through some sort of economic isolation that amounts
not only to unilateral economic disarmament but amounts to harming
ourselves by giving markets to others, by allowing them to build up
their export capacity in direct competition with us?
I think the answer has to be that this is an amendment that is very
dicey and something that this Congress should would be ill-served to
adopt.
Mr. ROHRABACHER. Madam Chairman, I yield myself 3 minutes.
Just to reflect on what my colleague, the gentleman from Iowa [Mr.
Leach] has just said, this is not unilateral disarmament. This is
refraining from arming our adversaries. Yes, we have been engaged for
the last half century, since World War II, the United States has been
the sucker of the world most of that time. But we had to defend the
world against international communism.
We do not have to take American taxpayers' dollars anymore and
subsidize business deals in foreign lands, taking that money directly
out of the pool of money that is available for our own people, the
small business men and women of every community throughout our country.
They have to take money from that same pool in order to do business in
their communities, and instead we are decreasing the amount of money in
that pool to give to large corporations to do what? To do business in
some communist or some fascist dictatorship overseas. It is not only
immoral, it is bad economics.
Yes, Red China has been a big market for our airplanes and other
things, they are setting up an aerospace industry at our expense, but
they have a $40 billion trade deficit with the United States. Let them
finance their own business deals. They have got the money. They have
got the capital.
The fact is that no private companies will finance that because it is
risky, because you are dealing with a dictatorship. So what do we do?
We take the pressure off them to liberalize and become a freer society
by giving them the loans and guaranteeing the loans anyway.
Who are the benefactors in the Three Gorge Dam project in China, $30-
$40 billion? Yes, there are some American companies over here that
would like to sell the equipment to do the $30-$40 billion Three Gorge
Dam project in China. We have got some public works projects here in
our own country. Why are we taking money from the pool of money that is
available to do things in the United States and transferring it
overseas? We can buy the tractors and we can buy the equipment to do
those projects right here in the United States.
We do not need to drain our own pool of capital dry in order so a few
big corporations can show a profit at the end of this year, while what
we are really doing is subsidizing projects in vicious and ugly
dictatorships around the world, especially Red China; Red China, which
now has such an unfair trading relationship with the United States that
when we try to send our goods and services in, they are taxed, they are
tariffed at 30-40 percent.
What do we do? We subsidize somebody who wants to set up a company
over there. They set up the company and then, because we only charge
them 3-4 percent tariffs on their goods coming back, that company
begins exporting to the United States. In the medium run, yes, a few
jobs are created in the short run, but in the long run we are
destroying the economic base of our own country. We are destroying the
working people of our own country, subsidizing with taxpayers' dollars.
Vote for my amendment.
Mr. CASTLE. Madam Chairman, I yield myself 15 seconds.
I would like to make a couple points. First is, this is the Eximbank,
not OPIC. Exim is not financing the Three Gorges project in China
because of environmental concerns.
Mr. Harmon, talking about small businesses and their involvement in
this, says the small business programs at Eximbank will be decimated by
the Rohrabacher amendments. He is the head of Eximbank. Exim has worked
diligently over the last 4 years to simplify its small business
programs. It has $2.4 billion in small business exports.
Madam Chairman, I yield 1 minute to the distinguished gentleman from
New York [Mr. LaFalce].
Mr. LaFALCE. Madam Chairman, I would think that the governments of
Japan, the governments of Germany, the governments of France would
favor the Rohrabacher amendment. But I would think that the people of
the United States and the exporters in the United States would strongly
oppose it because if his amendment passes, we will be at a competitive
disadvantage.
The argument has been made, and I agree with it, that we would lose
money, lose jobs, to be sure, but even more important than that in my
judgment, we would lose influence over those governments. The gentleman
from California [Mr. Rohrabacher] used the word ``adversaries,'' why
are we financing United States exporters who want to sell their goods
or services to our adversaries. I do not view them as adversaries
simply because they have a form of government that is not a clone of
the United States or is not the form of government that we have. I
think that we have more influence over the Chiles of this world, the
Argentinas, the Brazils, the Mexicos, the central European countries,
Russia, Saudi Arabia, et cetera, when we trade with them and promote
trade with them rather than when we build a wall of isolation between
ourselves and those countries.
Mr. CASTLE. Madam Chairman, I yield 1\1/2\ minutes to the gentleman
from Illinois [Mr. Manzullo].
(Mr. MANZULLO asked and was given permission to revise and extend his
remarks.)
{time} 1545
Mr. MANZULLO. Madam Chairman, the Eximbank, to my dear colleague from
the State of California, does not build factories overseas. That is not
what the Eximbank does. What the Eximbank does is make loans to foreign
companies so that they can buy goods that are manufactured by American
companies. That is what this is about.
I met with two gentlemen from the Republic of Georgia; perhaps the
George Masons and James Madisons who are in the process of writing the
Constitution to set up an independent judiciary. They do not have one
yet, they are working on it. The gentleman from California would draw
this arbitrary line and say, well, if their government does not meet
our standards of running a government, they cannot be involved in
buying American goods.
Eximbank is about allowing people in foreign countries to buy goods
manufactured in the United States, because Eximbank has a rule that
most of the content of that which is financed has to be American
products. That is what Eximbank is all about. It is very, very simple.
The gentleman from California would cut off sales to China, cut off
sales to Saudi Arabia, even cut off sales to Peru, where ultimately the
independent judiciary there is the military triumvirate.
Mr. ROHRABACHER. Madam Chairman, I yield myself the balance of my
time.
I do not believe in economic isolation. I applaud those enterprisers
of the United States who want to go out and take risks. Let them take
their own risks. Let them take their own risks. They will reap the
profit. If they reap the profit, they can take the risk.
Yes, if someone wants to do business in red China, where Christians
are being tortured, where the Dalai Lama's followers are being victims
of genocide in Tibet, where they are wiping out Muslims in East
Turkestan. Let those businessmen who want to do business in that
situation take their risk, get their own loans.
Let us not deplete the limited amount of money available to create
[[Page H8380]]
new business from our country and ship it to those people who are
trying to do business over there. Let us let the mom and pops continue
to have the money available from that pool of resources for us.
If the Saudis, and they have been our friends during the cold war,
but if they want to buy something, let them finance it. Let the Red
Chinese finance it. Let us not take this from the American taxpayers'
pockets.
And if we were following the logic I have heard in this debate, we
would never have ended farm subsidies in this Congress. We would have
said, well, other countries have farm subsidies so we have to continue.
Other countries have socialism and government controls and government
subsidies to other people, thus we have to do it and follow those same
countries down the drain of collectivism, which has destroyed the
standard of living of so many other countries. We do not need to do
that. We can lead the way.
And, in fact, the risks that are taken overseas, we do not say that
these people are going to be isolated, we just say we are not going to
subsidize it with taxpayers' dollars.
And again we keep hearing the refrain of selling American products
overseas. Let us note that many of these projects that are being
financed by mega corporations are the export of manufacturing units,
which only in the short term look like exports but in the long term
become a huge force for imports to overwhelm our own manufacturing jobs
in the United States of America.
Let us vote for this amendment. Vote against subsidizing
dictatorships.
Mr. CASTLE. Madam Chairman, I yield such time as he may consume to
the gentleman from Washington [Mr. Metcalf].
Mr. METCALF. Madam Chairman, I rise in opposition to the amendment.
In simple terms, the United States has a trade deficit. The only
major component doing poorly in the total economy is exports. The only
strong tool we have to fend off foreign nations that subsidize their
exports is the U.S. Export Import Bank.
This amendment will hurt American exporters and American jobs. It
does not target the perpetrator of the problem--that being the foreign
nation who we disagree with. The effect of this amendment is handing
over billions of dollars of contract to foreign countries.
Surely this amendment will hurt large corporations, but let us not
forget that EXIM is vital to small business exporters. Approximately 81
percent, let me repeat, 81 percent of EXIM transactions go to small
exporters. Last year EXIM extended nearly $378 million in guarantees to
support small business exporters which have supported 200,000 jobs
annually and over 2,000 communities.
Export transactions supported by EXIM ripple through the economy to
hundreds of suppliers. Thus, EXIM is not some financial boutique merely
for the Fortune 500. United States Manufacturers, small and large, only
go to EXIM when they have to, which is when foreign government
financing is being offered on behalf of our competitors. It would be
nice to live in a world where agencies such as the Export-Import Bank
were not needed. Until we do this disbanding EXIM would be tantamount
to unilateral economic disarmament.
The effect of this amendment will place the burden on U.S. companies
and will hurt the American Worker.
Mr. CASTLE. Madam Chairman, I yield the balance of my time to the
distinguished gentleman from Florida [Mr. Mica].
Mr. MICA. Madam Chairman, we have heard the statement, let U.S.
businesses get their own financing. The whole purpose of Exim is for
U.S. businesses, small, medium and large, to obtain financing to sell
U.S.-produced goods overseas where there is no financing. That is the
whole purpose.
There is no money that goes overseas with Exim. It is U.S.-produced
products only. There is no building of factories with this money. It is
U.S. goods with the government assisting and financing small, medium
and large U.S. companies to sell those goods where they cannot get
financing. Only U.S. contractors would be financed under this program.
We have heard about the plea for small businesses. Over 80 percent of
Exim assistance goes to medium and small U.S. firms who cannot find
financing to sell these U.S.-made products overseas in these difficult
markets.
Exim is not corporate welfare. Exim is not a giveaway program. Exim
is not a business subsidy. Exim creates thousands of jobs for American
workers.
The CHAIRMAN pro tempore (Mrs. Emerson). The question is on the
amendment offered by the gentleman from California [Mr. Rohrabacher].
The question was taken; and the Chairman pro tempore announced that
the noes appeared to have it.
Mr. ROHRABACHER. Madam Chairman, I demand a recorded vote, and
pending that, I make the point of order that a quorum is not present.
The CHAIRMAN pro tempore. Pursuant to House Resolution 255, further
proceedings on the amendment offered by the gentleman from California
[Mr. Rohrabacher] will be postponed.
The point of no quorum is considered withdrawn.
It is now in order to consider amendment No. 6 printed in House
Report 105-282.
Amendment No. 6 Offered by Mr. Solomon
Mr. SOLOMON. Madam Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 6 offered by Mr. Solomon:
At the end of the bill, add the following:
SEC. 10. PROHIBITION AGAINST ASSISTANCE TO RUSSIA IF RUSSIA
TRANSFERS CERTAIN MISSILE SYSTEMS TO THE
PEOPLE'S REPUBLIC OF CHINA.
Section 2(b) of the Export-Import Bank Act of 1945 (12
U.S.C. 635(b)) is amended by adding at the end the following:
``(12) Prohibition Against Assistance to Russia if Russia
Transfers Certain Missile Systems to the People's Republic of
China.--If the President of the United States is made aware
that Russia has transferred or delivered to the People's
Republic of China an SS-N-22 or SS-N-26 missile system, the
President of the United States shall notify the Bank of the
transfer or delivery. Upon receipt of the notification, the
Bank shall not insure, guarantee, extend credit or
participate in an extension of credit with respect to, or
otherwise subsidize the export of any good or service to
Russia.''.
The CHAIRMAN pro tempore. Pursuant to House Resolution 255, the
gentleman from New York [Mr. Solomon] and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from New York [Mr. Solomon].
Mr. SOLOMON. Madam Chairman, I yield myself such time as I may
consume.
Madam Chairman, my amendment simply would prohibit further Export-
Import Bank subsidies of transactions involving Russian firms if, and
this is so important, if Russia transfers either the SS-N-26 Sunburn
missile or the SS-N-26 Yakhont missile to Communist China.
As all my colleagues will recall, this amendment passed on the State
Department authorization bill, which covers Freedom Support Act aid to
Russia, in June with over 240 votes at that time.
Madam Chairman, over the past 5 or 6 years, America has been engaged
in an extraordinary act of generosity toward the Russian people. I have
monitored all of that aid as it has gone to the former Soviet Union,
now the country called Russia. Together with our allies, we have
provided tens of billions of dollars in assistance for Russia's
transformation toward a free market democracy, including over $2
billion in Eximbank assistance.
That is a lot of money, my colleagues. It is a lot of taxpayers'
money. And yet we have seen instances over the years where Russia has
shown a very alarming disregard for the legitimate security interests
of the United States of America in return for this assistance. And that
puts America's soldiers and sailors at risk wherever they may serve in
other foreign ports of this world. In the hands of the Communist
government in Beijing, these missiles pose a direct threat to U.S.
ships and U.S. sailors in the Pacific Theatre.
My colleagues, the Sunburn, and in case Members do not know, they
should listen closely, the Sunburn is a supersonic sea-skimming missile
designed specifically for what purpose, for the purpose to attack
American ships equipped with the Aegis radar system. That is what the
thing was developed for in the first place. That is right, let me say
it again. The Sunburn was designed specifically to take out American
ships and kill American sailors. One noted Russian defense analyst has
called the Sunburn the most vicious antiship missile in the world.
The Chinese Government began shopping for this missile. Why? In
direct response to the deployment of the United
[[Page H8381]]
States aircraft carrier last year to the Strait of Taiwan, after China
began lobbing missiles at Taiwan. That is true. Because of the Taiwan
Relations Act we have to defend Taiwan, one of our greatest allies in
the history of this world, and they were having missiles lobbed at
them.
We have put American sailors at risk in those Taiwan straits and we
have learned recently, Madam Chairman, that the Russians are readying
to export another advanced cruise missile. This one is the SS-N-26,
called the Yakhont, that travels at more than Mach II speed and has a
range of 200 miles. Do my colleagues know what kind of damage that can
do to American personnel serving overseas?
It would be nothing short of irresponsible, Madam Chairman, if we did
not take every step possible to prevent Communist China from acquiring
these missiles, and we still have time to do it. Though the Sunburn
missile sale has been in the work for some time now, it is not final
yet. And there are forces in Russia I have spoken to that are opposed
to it. There are good people over there. There are even people like
Yeltsin who want good democracy in that country and they say, ``Block
that sale.''
We can give those positive forces in Russia some help by using our
considerable aid, including Export-Import Bank subsidies, as leverage.
Madam Chairman, this amendment is about deterrence. It does not cut
off Eximbank subsidies to Russia unless and until a transfer of these
missile systems to China take place. If we pass it, the ball is in the
Russian court.
All we want to do is to help Russia succeed, Madam Chairman. But if
our aid cannot induce the Russian Government to refrain from making a
sale that poses such a direct threat to our security interests, then
the return on our investment is very low indeed.
If this is the case, then we owe it to the taxpayers and we owe it to
our military personnel in the Pacific and in other parts of the world
to terminate our aid to Russia, and that is why I urge support of this
amendment. It is a very reasonable amendment, and I urge the managers
of the bill from both sides of the aisle to accept the amendment.
Madam Chairman, I reserve the balance of my time.
Mr. CASTLE. Madam Chairman, I do not rise in opposition but, if there
is no Member in opposition, I ask unanimous consent to control the
time.
The CHAIRMAN pro tempore. Without objection, the Chair recognizes the
gentleman from Delaware [Mr. Castle] for 5 minutes.
There was no objection.
Mr. CASTLE. Madam Chairman, I yield myself such time as I may
consume.
Madam Chairman, this amendment prohibits Exim financing of exports to
Russia if Russia transfers two sea-launched cruise missile systems to
China, which is obviously a worthwhile goal.
The background to the gentleman's amendment is a concern with China's
international security policy, particularly with the perception that
Beijing is believed to be focused on obtaining a greater power
projection capability, in part through an enhanced naval capability.
In addition, sales to China of advanced missile technology from
Russia poses concerns for United States policymakers, as it does this
gentleman, in part because of the potential for retransfer to buyers of
Chinese supplies.
In this context, the gentleman has raised a very serious issue and
the committee will not oppose his amendment.
Having said that, let me just highlight a number of concerns that
will have to be addressed at some point later as the legislative
process wends its way through here.
It is very broad in scope. It would impose an automatic shutoff of
all Exim financing to Russia if the transfer occurs. The cutoff would
apply to any transaction involving a Russian interest, whether or not
the export is to Russia or involves a project in Russia.
By contrast, other United States nonproliferation legislation more
narrowly targets foreign persons, including individuals and entities
responsible for the arms transfer. The amendment, in its current form,
also provides no waiver authority or discretionary flexibility to the
executive branch.
In addition, the committee is notified that the Department of State
is opposed to the amendment, noting that current law does not proscribe
or sanction arms transfer by third countries to the PRC.
Nevertheless, the committee will not object to the amendment from the
distinguished chairman of the Committee on Rules and, hopefully, we can
work through what may or may not be problems as stated here.
Madam Chairman, I reserve the balance of my time.
Mr. SOLOMON. Madam Chairman, I yield myself the balance of my time.
Mr. FLAKE. Madam Chairman, will the gentleman yield?
Mr. SOLOMON. I yield to the gentleman from New York, one of the
outstanding, distinguished Members of this House.
Mr. FLAKE. Madam Chairman, we are prepared to accept the amendment.
Ms. HARMAN. Mr. Chairman, I move to strike the requisite number of
words.
As a Californian, I understand the value of the Ex-Im Bank, which
supports 737 small and large businesses in my state, with a total
export value of $4 billion.
But not all exports have commendable objectives, and for this reason,
I rise in support of the amendment offered by my friend, the gentleman
from New York [Mr. Solomon].
Like him, I am especially concerned about the proliferation of
technologies related to weapons of mass destruction out of the former
Soviet Union. Despite reassurances from top Russian leaders that these
technologies and materials are under lock and key, evidence is mounting
to the contrary.
An area of particular concern to me and a bipartisan group of my
colleagues, including Mr. Solomon, is that Russia has failed to halt
the sale of ballistic missile technology to Iran.
Mr. Chairman, these Russian transactions are in violation to the
Missile Control Technology Regime (MTCR) of which Russia has been a
member since 1995.
The Administration is working through diplomatic channels to address
this problem, but the response of the Russian government so far is not
satisfactory. Further, the clock is ticking, and I have very credible
evidence suggesting that this problem may be getting worse.
Together with 76 colleagues from the House, including the gentleman
from New York, Mr. Solomon, I have introduced a concurrent resolution
asking that Russia take all the necessary steps to stop these illegal
transactions with Iran in accordance with its own policy, export
control laws, and criminal code.
If Russia fails to take appropriate action, our resolution calls on
President Clinton to impose sanctions on the Russian entities
responsible for this proliferation under current policy and law.
It is time for the Russian government to provide evidence that its
proliferating activities to Iran and elsewhere have stopped. It's time
for the U.S. government to act to ensure Russia acts as well.
I applaud my colleague Mr. Solomon for having raised this issue at
this time.
Mr. SOLOMON. Madam Chairman, I yield back the balance of my time.
Mr. CASTLE. Madam Chairman, I yield back the balance of my time.
The CHAIRMAN pro tempore. The question is on the amendment offered by
the gentleman from New York [Mr. Solomon].
The amendment was agreed to.
{time} 1600
The Chairman pro tempore [Mrs. Emerson]. It is now in order to
consider amendment No. 7 printed in House Report 105-282.
Amendment No. 7 Offered by Mr. Vento
Mr. VENTO. Madam Chairman, I offer an amendment.
The CHAIRMAN pro tempore. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 7 offered by Mr. Vento:
At the end of the bill, add the following:
SEC. 10. PROHIBITION AGAINST PROVISION OF ASSISTANCE FOR
EXPORTS TO COMPANIES THAT EMPLOY CHILD LABOR.
Section 2 of the Export-Import Bank Act of 1945 (12 U.S.C.
635 is amended by adding at the end the following:
``(f) Prohibition Against Assistance for Exports to
Companies That Employ Child Labor.--The Bank shall not
guarantee, insure, extend credit, or participate in the
extension of credit with respect to the export of any good or
service to an entity if the entity--
``(1) employs children in a manner that would violate
United States law regarding child labor if the entity were
located in the United States; or
``(2) has not made a binding commitment to not employ
children in such manner.''.
[[Page H8382]]
The CHAIRMAN pro tempore. Pursuant to House Resolution 255, the
gentleman from Minnesota [Mr. Vento] and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from Minnesota [Mr. Vento].
Mr. VENTO. Madam Chairman, I yield myself such time as I may consume.
(Mr. VENTO asked and was given permission to revise and extend his
remarks.)
Mr. VENTO. Madam Chairman, this is a simple amendment that amplifies
the theme that is currently in the law that guides the approval of
loans, loan guarantees, and insurance to customers or consumers abroad
for the benefit of U.S. jobs. This amendment will certify that in
addition to evaluating a foreign buyer's creditworthiness, the Export-
Import Bank would consider the child labor practices of the potential
foreign buyer. If the company exploits child labor, it would not be
eligible for assistance from the Export-Import Bank.
This amendment would motivate, of course, domestic companies to
investigate the labor and business practices of potential partners
before entering into such agreements. In fact, this bill recognizes the
increased potential in the Newly Independent States of the former
Soviet Union and the sub-Saharan African areas. It, in fact, emphasizes
that more of the loans ought to be made to smaller entities and smaller
businesses, smaller loans, in fact, which of course bring us into
contact.
Madam Chairman, I am not going to go through a recitation all of the
problems with child labor around the world. Someone might say, well, we
do not have a lot of data on it. And that is accurate; we are operating
in the dark. But we know from reports from the International Labor
Organization that there are 250 million children worldwide under the
age of 15 that are working instead of receiving basic education, that
are being employed in jobs that would not be permitted to be employed
in our Nation.
That is 250 million reasons, in my judgment, to in fact make certain
that the assistance and loans and loan guarantees and insurance that we
provide in this program does have this as a major focus specified in
the legislation. There is no doubt that these programs touch upon the
problem that we should be proactive, not reactive, to the matter of
child labor.
The employment and exploitation of children is an emerging scandal
around the globe. We need to be certain, as we engage in subsidizing
trade, that we do what we can to curtail the exploitation of children.
This amendment will help, I think. And I trust that it is not a major
problem with this area, but it is one that we have to, as I said, be
proactive on.
Madam Chairman, I reserve the balance of my time.
My amendment prohibits the Export-Import Bank to provide assistance
for exports to companies that violate U.S. child labor laws. The
question is what types of enterprises are we facilitating abroad.
The amendment would certify that, in addition to evaluating a foreign
buyer's creditworthiness, the Export-Import Bank would consider the
child labor practices of the potential foreign buyer. If the company
exploits child labor, then it would not be eligible for Export-Import
assistance. This amendment would motivate domestic companies to
investigate the labor and business practices of potential partners
before entering into export agreements. The global market place means
that this Congress can no longer remain passive regards how programs
that we advance; U.S. loans, guarantees, and insurance may be engaged
to help address the most serious problems, such as child labor.
On this issue we are advancing current policy in the dark, there is,
no data to suggest that is not a problem. In fact, there is every
reason for concern. The International Labor Organization estimates that
over 250 million children worldwide under the age of 15 are working
instead of receiving basic education. That is 250 million reasons to
ensure that U.S. Ex-Im loan guarantees, insurance, and loans take the
extra step to protect against the exploitation of child labor by U.S.
companies and partners, there is no doubt that these programs touch
upon the problem. And we should be pro-active not reactive to the
matter of child labor. Child labor practices today reveal an
unprecedented tragedy of a far greater magnitude than what transpired
in a less global economic marketplace. It was, therefore, surprising to
me that child labor practices are not considered by the Export-Import
Bank when evaluating potential firms and their partners. Because we
neither investigate nor know the child labor practices of the companies
we assist, this amendment is essential to help assure that our U.S.
child labor standards are not violated. Both symbolically and
substantively, the U.S. must set an example as we advance and engage in
the global marketplace.
The employment and exploitation of children is an emerging scandal
around the globe. We need to be certain as we engage in subsidizing
trade that we do what we can to curtail the exploitation of children.
No single nation or single agency can eradicate the child labor
problem. However, we should deliberately pursue each opportunity in
order to turn the tide on the inappropriate employment exploitation of
young children. We have leverage in the export sector, and we should
harness our market power to effect positive change. If we help these
U.S. companies, then we should expect that they and their partners
reflect and follow fundamental U.S. values and basic laws.
If we impede the development of young people, we curb the growth of
economies and nations. And we shortchange our own work force.
Our American workers need a raise. Not just a raise in wages and
benefits, but a raise in corporate conscience too and trade
responsibility and fairness that addresses such obvious concerns. Let
me be clear, I support the Export-Import Bank. I think that its
programs are necessary in a world of global governments which subsidize
corporate trade transactions. However, the U.S. Export-Import Bank
needs to concentrate on financing export growth that will create good
jobs at home and reinforce our basic values. The Bank's primary concern
cannot only be to maximize corporate profits. We must be certain that
it tracks our respect for individuals and the welfare of children.
The initiative to move into sub-Saharan Africa and other markets like
the newly independent states [NIS], the former Soviet Union, raise new
real risks regards child labor.
Our Nation must be more responsible in choosing with whom we do
business and who our policies benefit. If the Export-Import Bank
provides financing to an overseas company to buy U.S. exports, both
companies win. the U.S. firm increases its profits through the sale of
its goods, and the overseas company receives the financial support it
needs to purchase the product. We certainly should not allow
enterprises which directly or indirectly exploit children--that rob
children of their most formative years--to flourish by helping them get
the goods they need. Export sales advanced through Export-Import
assistance should carefully screen out products which employ illegal
child labor. We need to send both domestic and foreign firms the
message that if you violate the principles of U.S. child labor laws,
you are no longer eligible for U.S. Export-Import assistance. Today,
this amendment provides the opportunity to stand up for children, who
even marginally, may be contributing to a subsidized U.S. export
product.
By providing assistance to companies that employ child labor, we
would be shortchanging hard working American adults by threatening
their economic security. Goods produced by child labor ultimately end
up in our own markets, exerting downward pressure on wages and living
standards. American consumers do not want their Government to provide
assistance to a market for goods produced and squeezed from the sweat
and toil of children.
The United States has a long history of encouraging fair and
responsible business practices. In this vein, my amendment would
encourage that domestic businesses and the Export-Import Bank enter
into agreements with companies that follow U.S. child labor laws.
Children working in overseas factories deserve the same standard of
protection that we extend to U.S. children. While this amendment does
not question the benefits of young people working, it opposes excessive
hours, interference with education, and hazardous occupations and
workplaces that are intellectually and physically debilitating to the
health of young individuals. U.S. child labor laws protect the
educational opportunities of minors and prohibit their employment in
jobs that are detrimental to their development. By extending
essentially such protection to all children, this amendment is one
small step towards closing the market for illegal child labor.
This measure--the Exim Bank--isn't our sole instrument of U.S.
foreign policy, but frankly it is time that we're asked to ``show us
the money'' that we have the best leverage in collaboration with U.S.
exporters we can get positive results to stop the exploitation of
children.
There is no other practice so universally condemned, yet so
universally practiced as the exploitation of child labor and the
problem of the global marketplace means that it's our problem. Crimes
committed against children
[[Page H8383]]
around the world, that this Congress is so adamant to speak out
against, should not be encouraged or tolerated by our own Government
policies. This ought to be boiler plate law and policy on our every
action. Export-Import financing should promote progress in wages,
living standards, and human rights here in the United States and around
the globe. I've been encouraged by new progress on this topic regards
many imports to the United States of America. U.S. sponsored financing
should not undermine progress in these important areas or legitimatize
the negative status quo. U.S. Labor protections are just one reason why
the United States has a good economy in the world today. Why should we
lower the standards and protections that provide the foundation for
U.S. prosperity? I urge my colleagues to support the Vento amendment
which places the interests and well-being of our children ahead of
international corporate profits.
Mr. CASTLE. Madam Chairman, I do not rise in opposition.
Madam Chairman, this amendment, as has been so fairly stated by its
sponsor, prohibits the use of Exim assistance for exports to companies
that employ child labor.
The majority does not intend to object to the amendment. The
gentleman from Minnesota [Mr. Vento] seeks to address a very serious
human rights concern that is being examined in a number of fora,
including the OECD, as well as by our own Customs Department.
Although we have doubts that Eximbank is the appropriate vehicle
through which to address this issue, the amendment is certainly a
powerful symbol of congressional concerns that inhumane child labor
practices should not be tolerated.
Having said that, let me register some apprehensions the majority has
regarding how the amendment would be implemented. Is there any
comprehensive list available to the Bank of companies that employ child
labor? Would the amendment apply retrospectively to new transactions
only? How would it be enforced? Would foreign buyers of U.S. goods see
this as an extraterritorial of U.S. laws?
It would be my hope that we would work with the sponsor of the
amendment and the minority to iron out these details later in
conference with the other body.
Having said that, we will not oppose the amendment. And I applaud the
gentleman from Minnesota [Mr. Vento] for his thoughtful initiative.
Mr. VENTO. Madam Chairman, will the gentleman yield?
Mr. CASTLE. I yield to the gentleman from Minnesota.
Mr. VENTO. Madam Chairman, I appreciate the support of the
subcommittee chairman and the questions he raised. There are not such
lists, but there are other questions that we need to work together on.
I appreciate his support, and I pledge myself to work with that and
make this a part of the explicit policy of the Eximbank, the U.S.
Export Bank, I guess, if we are successful with the new nomenclature of
the gentleman from New York [Mr. LaFalce].
Madam Chairman, I yield back the balance of my time.
Mr. CASTLE. Madam Chairman, I yield myself such time as I may
consume.
Madam Chairman, I would just say with respect to the name change,
after some of the debates I have heard here in the 2 days we have
debated this, I hope we can make this name change sooner rather than
later. There seems to be a lot of confusion about what this bank does,
I believe.
In any event, with respect to the amendment, it has been stated and
we will support it.
Madam Chairman, I yield back the balance of my time.
The CHAIRMAN pro tempore. The question is on the amendment offered by
the gentleman from Minnesota [Mr. Vento].
The amendment was agreed to.
Mr. CASTLE. Madam Chairman, I move that the Committee do now rise.
The motion was agreed to.
Accordingly, the Committee rose; and the Speaker pro tempore [Mr.
Solomon] having assumed the chair, [Mrs. Emerson], Chairman pro tempore
of the Committee of the Whole House on the State of the Union, reported
that that Committee, having had under consideration the bill (H.R.
1370) to reauthorize the Export-Import Bank of the United States, had
come to no resolution thereon.
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