[Congressional Record Volume 148, Number 73 (Thursday, June 6, 2002)]
[Senate]
[Pages S5129-S5132]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   EXPORT-IMPORT BANK REAUTHORIZATION ACT OF 2001--CONFERENCE REPORT

  Mr. REID. Mr. President, I submit a report of the committee of 
conference on the bill (S. 1372) and ask for its immediate 
consideration.

[[Page S5130]]

  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the House to the bill (S. 
     1372) to reauthorize the Export-Import Bank of the United 
     States, having met, after full and free conference, have 
     agreed to recommend and do recommend to their respective 
     houses, that the Senate recede from its disagreement to the 
     amendment of the House, and agree to the same with an 
     amendment, signed by a majority of the conferees on the part 
     of both Houses.

  The PRESIDING OFFICER. The Senate will proceed to the consideration 
of the conference report.
  (The report was printed in the House proceedings of the Record of May 
24, 2002.)
  Mr. SARBANES. Mr. President, I rise in support of the conference 
report to accompany S. 1372, the Export-Import Bank Reauthorization Act 
of 2002.
  The Senate passed its version of this legislation on March 14 by 
unanimous consent. The House passed its version, H.R. 2871, by voice 
vote on May 1, then amended the Senate version and requested a 
conference to resolve the differences between the bills. The conference 
committee met on May 21 and reached agreement on the conference report. 
The House has now passed the conference report by a vote of 344-78, and 
it is before the Senate for consideration today.
  I strongly urge my colleagues to support this conference report. In 
my view, it is a carefully developed and balanced piece of legislation 
that makes a number of constructive changes to the Export-Import Bank 
Act, which is the charter of the Export-Import Bank. Before describing 
some of those changes, I would like to thank my colleague, Senator 
Bayh, the chairman of the International Finance Subcommittee of the 
Senate Banking Committee, for his very able leadership in moving 
forward this important legislation. Senator Bayh took a particular 
interest in strengthening the adverse economic impact procedures of the 
Export-Import Bank, which is one of the most significant provisions of 
this legislation. I would also like to thank Senator Hagel, the ranking 
member on the International Finance Subcommittee, who is a strong 
supporter of the Ex-Im Bank and contributed importantly to the 
provision of the conference report dealing with market windows. Senator 
Allard also took a strong interest in this bill and sponsored the 
amendment in the Senate which established an inspector general for the 
Ex-Im Bank.
  In addition, I want to thank Representative Oxley, chairman of the 
House Financial Services Committee, Representative LaFalce, the ranking 
member, and Representative Bereuter, chairman of the International 
Monetary Policy and Trade Subcommittee, for their strong commitment and 
leadership in reaching agreement on this conference report.
  I believe there is a general recognition by most members of the 
Congress, on a bipartisan basis, that the Export-Import Bank has an 
important role to play in U.S. trade policy. Ex-Im Bank financing helps 
U.S. exporters level the playing field against foreign competitors who 
benefit from subsidized export financing from their governments. It 
also gives U.S. negotiators important bargaining leverage in efforts to 
reach international agreements limiting the use of such subsidized 
export financing. U.S. exporters are able to compete with great success 
in international markets on the basis of price and quality. However, 
when foreign exporters benefit from subsidized financing from their 
governments, the Ex-Im Bank is needed to help U.S. companies, and the 
workers they employ, compete on a fair basis.
  This conference report makes a number of changes to the charter of 
the Export-Import Bank that I believe will strengthen the ability of 
the Ex-Im Bank to carry out its important mission. I would like to 
describe briefly some of the most important changes.
  The conference report extends the authorization of the Export-Import 
Bank to September 30, 2006. This extension to 2006 is intended to take 
the reauthorization of the Ex-Im Bank out of the Presidential election 
cycle.
  When the reauthorization of the Ex-Im Bank falls in the first year of 
a President's term, it runs the risk that a new President will be 
taking office, as occurred last year. In that case, a new 
administration must struggle not only to put in place a new Chairman of 
the Ex-Im Bank but also to cope with providing leadership for the 
reauthorization of the Ex-Im Bank as well. The conference committee 
believed that it makes more sense to put the reauthorization of the Ex-
Im Bank in the second year of a President's term to assure that a new 
Ex-Im Bank Chairman has been put in place and has been on the job with 
sufficient time to provide leadership for the reauthorization of the 
Bank.
  Tied aid is highly concessional financing provided by one country to 
another that is linked to the purchase of goods or services from the 
donor country. The U.S. government has targeted foreign government use 
of such financing as particularly harmful to U.S. trade interests, and 
has sought to limit the use of tied aid through negotiations in the 
OECD. Congress created the Tied Aid Credit Fund in the Ex-Im Bank to 
demonstrate to other countries that the U.S. would match their efforts 
to gain sales through the use of tied aid in order to level the playing 
field for U.S. exporters and to provide leverage to U.S. negotiators 
seeking to reach agreements to limit the use of tied aid.
  The conference report makes a number of significant changes to the 
Tied Aid Credit Fund of the Export-Import Bank that I believe will 
strengthen its effectiveness. The charter of the Ex-Im Bank requires 
cooperation between the Bank, which administers the Fund, and the 
Treasury, which leads U.S. negotiating efforts to limit the use of tied 
aid. Section 9(a) of the conference report directs the Ex-Im Bank and 
the Treasury Department to develop a set of principles, process, and 
standards for the operation of the Tied Aid Credit Fund to assure its 
smooth functioning.
  The Ex-Im Bank and the Treasury made an extensive effort last year to 
develop an agreed set of principles, process, and standards for the 
operation of the Tied Aid Credit Fund which was submitted to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate on July 
16, 2001. It is expected that the initial principles, process, and 
standards for the operation of the Tied Aid Credit Fund required by 
section 9(a) of the conference report will be those agreed to and 
submitted by the Ex-Im Bank and the Treasury last year.
  In addition, the conference report amends the Ex-Im Bank Act to 
require that the Tied Aid Credit Fund be administered by the Bank ``in 
consultation with the Secretary (of the Treasury) and in accordance 
with the principles, process, and standards'' developed pursuant to 
section 9(a) of the conference report. This replaces the language 
currently in the Ex-Im Bank Act providing that the Ex-Im Bank 
administer the tied aid credit program ``in accordance with the 
Secretary's recommendations.'' This current language has been the 
subject of a dispute between the Ex-Im Bank and the Treasury over 
whether the language gives the Treasury authority to prevent or 
overrule a final decision by the Board of the Ex-Im Bank to extend a 
tied aid credit in a particular case.
  The purpose of the conference report in removing this language is to 
make clear that the Board of the Ex-Im Bank makes the final decisions 
on extending tied aid credits. Section 9(a) of the conference report 
explicitly states that once the principles, process, and standards are 
followed in a given case, ``the final case-by-case decisions on the use 
of the Tied Aid Credit Fund shall be made by the Bank.''
  The conference report provides that in the extraordinary circumstance 
in which the President of the United States determines, after 
consulting with the President of the Ex-Im Bank and the Secretary of 
the Treasury, that the extension of a tied aid credit would materially 
impede enforcing compliance with the existing OECD Arrangement 
restricting the use of tied aid credits and facilitating efforts to 
negotiate, establish, and enforce new or revised comprehensive 
international arrangements, then the Bank shall not extend the tied aid 
credit. However, absent such an extraordinary action by the President, 
the Ex-Im Bank shall make the final decisions on tied aid credits 
cases.

[[Page S5131]]

  Section 10 of the conference report explicitly expands the authority 
of the Ex-Im Bank to use the Tied Aid Credit Fund to respond to the use 
of untied aid by foreign governments to promote exports as if it were 
tied aid. The conference report also directs the Secretary of the 
Treasury to seek to negotiate an OECD Arrangement restricting the use 
of untied aid, and to submit a report to the Congress on the success in 
initiating negotiations.
  Section 10 of the conference report also amends section 10(a) of the 
Ex-Im Bank Act to establish two basic tasks for the Tied Aid Credit 
Fund. First, the Ex-Im Bank should match foreign export credit agencies 
when they engage in tied aid outside the confines of the OECD 
Arrangement and when they exploit loopholes such as untied aid in order 
to provide the United States with leverage in efforts at the OECD to 
reduce the overall level of export subsidies. Second, the Ex-Im Bank 
should support United States exporters when the exporters face foreign 
competition that is consistent with the OECD Arrangement on tied aid 
credits but which places United States exporters at a competitive 
disadvantage. The conference report also amends section 10(b)2) of the 
Ex-Im Bank Act to require that the Ex-Im Bank administer the Tied Aid 
Credit Fund in accordance with these purposes.
  Section 10 of the conference report also addresses the important 
issue of market windows. Market windows are government-sponsored 
enterprises (for example, government owned or directed financial 
institutions) which provide export financing at below market rates. 
However, the foreign governments--notably Germany and Canada--which 
support them claim that these enterprises are not official export 
credit agencies, and thus not subject to the disciplines of the OECD 
Arrangement. Currently, two government entities operate very active 
market windows. They are the German market window KfW and the Canadian 
market window, the Export Development Corporation, EDC. The result is 
that these foreign market windows can provide subsidized export 
financing outside the OECD Arrangement and give their exporters a 
competitive advantage over U.S. exporters. Also, because these foreign 
market windows are not subject to the OECD disciplines, there is often 
a transparency problem--it is difficult to find out the terms of the 
financing they provide.
  The Ex-Im Bank Act currently authorizes the Ex-Im Bank to:

       Provide guarantees, insurance, and extensions of credit at 
     rates and on terms and other conditions which are fully 
     competitive with the Government-supported rates and terms and 
     other conditions available for the financing of exports of 
     goods and services from the principal countries whose 
     exporters compete with the United States.

  Since market windows are government-supported entities, the Ex-Im 
Bank views its current statute as providing Ex-Im Bank authority to 
match market windows financing. The conference committee agreed with 
that view. However, the conference committee believed it would be 
helpful to make this authority explicit so as to remove any question 
about Ex-Im Bank's authority and also to send a message to the foreign 
market windows of U.S. concern about their operations.
  As a result, the conference report contains two provisions which 
address market windows. The first provision directs the executive 
branch to seek increased transparency over the acitivites of market 
windows in the OECD Export Credit Arrangement. If it is determined that 
market windows are disadvantaging U.S. exporters, the U.S. would be 
directed to seek negotiations in the OECD for multilateral disciplines 
and transparency for market windows.
  The second provision authorizes the Ex-Im Bank to provide financing 
on terms and conditions that are inconsistent with those permitted 
under the OECD Export Credit Arrangement to match financing terms and 
conditions that are being offered by market windows if such matching 
advances negotiations for multilateral disciplines and transparency 
within the OECD, or when market windows financing is being offered on 
terms that are more favorable than available from private financial 
markets. Ex-Im Bank could also match market window financing when the 
market window refuses to provide sufficient transparency to permit the 
Ex-Im Bank to determine the terms and conditions of the market window 
financing. The conference committee understood that Ex-Im Bank has the 
authority to match market windows financing that is consistent with the 
terms of the OECD arrangement.
  In addition, the conference committee held the view that increased 
information was needed on the activities of foreign market windows. As 
a result, the conference report specifies that the Bank's annual report 
to Congress on export credit competition should include information on 
export financing available to foreign competitors through market 
windows.
  The conference committee believed that it was very important to make 
clear that the Ex-Im Bank has the authority to match market windows 
financing in order to allow U.S. exporters to compete on a level 
playing field, and to direct the executive branch to seek negotiations 
in the OECD for multilateral disciplines and transparency for market 
windows financing.

  Section 10 of the conference report also makes significant changes to 
section 2(e) of the Ex-Im Bank Act. Section 2(e) prohibits the Ex-Im 
Bank from making a loan or loan guarantee to expand production of a 
commodity for export by another country if the Ex-Im Bank determines 
that the commodity is likely to be in surplus on world markets or the 
resulting production capacity is expected to compete with U.S. 
production of the same commodity, and the Bank determines that the loan 
will cause substantial injury to U.S. producers of the commodity.
  The conference report amends section 2(e) to prohibit the Ex-Im Bank 
from providing any loan or loan guarantee to an entity for the 
resulting production of substantially the same product that is the 
subject of a countervailing duty or antidumping order under title VII 
of the Tariff Act of 1930, or a determination under title II of the 
Trade Act of 1974 that an article is being imported into the United 
States in such increased quantities as to be a substantial cause of 
serious injury to the domestic industry producing an article like or 
directly comopetitive with the imported article.
  The conference report also requires the Ex-Im Bank to establish 
procedures regarding loans or loan guarantees provided to an entity 
that is subject to a preliminary determination of a reasonable 
indication of material injury to an industry under title VII of the 
Tariff Act of 1930. The procedure shall help to ensure that these loans 
and loan guarantees are not likely to result in a significant increase 
in imports of substantially the same product covered by the preliminary 
determination and are not likely to have a significant adverse impact 
on the domestic industry. In addition, in making any determination 
under section 2(e) that a loan or guarantee will cause substantial 
injury to U.S. producers, the conference report requires the Ex-Im Bank 
to consider investigations under title II of the Trade Act of 1974 that 
have been initiated at the request of the President, the U.S. Trade 
Representative, the International Trade Commission, the Senate Finance 
Committee or the House Ways and Means Committee. The conference report 
also requires the Ex-Im Bank to establish procedures to provide a 
public comment period with regard to loans or loan guarantees reviewed 
pursuant to those provisions.
  The Ex-Im Bank Act currently requires that:

       The Bank shall make available, from the aggregate loan, 
     guarantee, and insurance authority available to it, an amount 
     to finance exports directly by small business concerns which 
     shall not be less than 10 percent of such authority for each 
     fiscal year.

  The conference report increases the requirement to 20 percent.
  According to the Ex-Im Bank, in fiscal year 2000 small business 
comprised 18 percent of the total value of all Ex-Im Bank financing 
authorizations and 86 percent of all transactions supported by Ex-Im 
Bank. In fiscal year 1998 these numbers were 21 percent and 85 percent 
respectively.
  The conference committee believed that the requirement for Ex-Im Bank 
small business financing could reasonably be raised to a level of 20 
percent without causing disruption to Ex-Im Bank's lending programs, 
Ex-Im Bank remains free to go above this level, as

[[Page S5132]]

it has in the past, but the conference committee was concerned that 
requiring a higher level could have the unwanted effect of tying up 
available Ex-Im Bank resources if the Ex-Im Bank could not achieve 
higher levels of small business financing in a given year. The 
conference report also requires the Ex-Im Bank to conduct outreach to 
socially and economically disadvantaged small business concerns, small 
business concerns owned by women, and small business concerns employing 
fewer than 100 employees.
  The conference report also makes a number of other significant 
changes to the Ex-Im Bank Act. It establishes an inspector general for 
the Export-Import Bank. It makes clear that the Ex-Im Bank's objective 
in authorizing loans, guarantees, insurance, and credits shall be to 
contribute to maintaining or increasing employment of United States 
workers. It increases the aggregate loan, guarantee, and insurance 
authority for the Bank to $100 billion by 2006. The conference report 
also requires the Ex-Im Bank to submit its annual competitiveness 
report to Congress by June 30 of each year in order to ensure its 
availability for oversight, and requires that the competitiveness 
report contain an estimate of he annual amount of export financing 
available from other foreign government and foreign government-related 
agencies.
  The conference report to accompany S. 1372, the Export-Import Bank 
Reauthorization Act of 2002, makes a number of significant changes to 
the charter of the Ex-Im Bank that I believe will greatly strengthen 
the Ex-Im Bank's effectiveness as a tool to help U.S. exporters and the 
workers they employ to level the playing field of competition in 
international trade, and strengthen the ability of U.S. negotiators to 
achieve meaningful international agreements to limit the use of export 
subsidies. Taken together, these changes represent a major enhancement 
of the Ex-Im Bank charter. I strongly urge my colleagues to support the 
conference report.
  Mr. BAYH. Mr. President, I rise today to offer my support for the 
conference agreement on the charter reauthorization of the Export-
Import Bank of the United States.
  As chairman of the Subcommittee on International Trade and Finance, I 
have worked with my colleagues to craft a bill that creates a level 
playing field for all U.S. companies. The conference agreement includes 
a number of important provisions that will help make the Bank more 
competitive with other export credit agencies.
  Although the Ex-Im Bank has played an important role in increasing 
our country's exports, there have been a few instances in which the 
Bank has lent its support to exports that have helped foreign companies 
who are engaged in dumping products into our domestic market. For this 
reason, I included a provision in the conference agreement that would 
prohibit the extension of a loan or guarantee to any entity subject to 
a determination of injury under section 201 by the International Trade 
Commission, ITC or subject to a countervailing duty or anti-dumping 
order. Action by the President is not necessary. Additionally, it would 
required a heighten level of scrutiny and comment period for 
transactions where a preliminary injury determination exists.
  Since its creation in 1934, the Export Import Bank of America has 
contributed greatly to the welfare and well-being of America's economy. 
I hope that we will allow the Bank to continue its function, and I 
encourage my colleagues to support reauthorization of this important 
organization.
  Mr. DURBIN. Mr. President, I would like to commend the conferees to 
the Export-Import Bank Reauthorization, S. 1372, and particularly 
Senators Bayh and Dodd, for preserving language that helps protect the 
U.S. steel industry from illegal dumping.
  By facilitating foreign purchases of U.S. goods and services that 
might not otherwise be possible, the Bank helps promote economic growth 
at home and abroad. Since its creation in 1934, the Export-Import Bank 
of the United States, has helped several Illinois companies, such as 
Caterpillar and Motorola, finance exports to foreign countries. 
However, there have been some instances in which the Ex-Im Bank has 
lent support to foreign companies that have engaged in dumping 
products, including steel, into U.S. markets. Such support is 
inconsistent with our desire for a strong domestic steel industry and 
our belief in a level playing field for international commerce.
  The reauthorization legislation that passed the Senate today requires 
significantly increased scrutiny of transactions that could adversely 
impact domestic industries. Furthermore, it prohibits the extension of 
a loan or guarantee to any company or country subject to a 
determination of injury under Section 201 by the International Trade 
Commission (ITC) or subject to a countervailing duty or anti-dumping 
order. This is a significant step forward and I am pleased to have 
aided in this effort.
  Mr. REID. I ask unanimous consent the conference report be adopted, 
the motion to reconsider be laid upon the table, and any statements 
relating to this be printed in the Record, without any intervening 
action or debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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