[Congressional Record Volume 165, Number 120 (Wednesday, July 17, 2019)]
[Senate]
[Pages S4872-S4873]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                TREATIES

  Mr. McCONNELL. Mr. President, the Senate is in the midst of 
considering bilateral tax treaties with Spain, Switzerland, Japan, and 
Luxembourg. If yesterday's overwhelming votes on the first protocol are 
any indication, all four will be ratified with huge bipartisan margins 
by the end of the day, and American businesses and workers in all 50 
States will be thrilled to finally be back on fair footing.
  The details of these nuanced agreements are complicated, but the core 
principles are quite simple. Foreign trade and international investment 
are key cornerstones of the U.S. economy. Major parts of proud American 
businesses and hundreds of thousands of hard-working Americans' jobs 
are oriented around trade with these four nations. So their governments 
and our government sit down and negotiate which country will tax which 
kind of activities. The result is more clarity, more certainty, and a 
lot less unfair double taxation that has cost American businesses 
millions and millions of dollars.
  Let me say clearly that the years of delays in getting these 
noncontroversial treaties ratified have cost American businesses that 
employ American workers millions and millions of dollars. Inaction on 
this subject has needlessly--needlessly--put our firms that employ all 
of our constituents at a complete disadvantage and delayed capital 
investments that could have helped American workers.
  Let me bring this home with some numbers. I have mentioned one 
Kentucky manufacturer that produces more than one-third of all 
stainless steel that America makes. They employ 1,500 people. I happen 
to know this firm is contemplating a capital investment of more than 
$30 million that would benefit Kentucky workers and provide a shot in 
the arm for the local economy. But there has been a wrinkle because 
this one employer had to pay a $15 million tax bill back in April 
because we hadn't ratified the agreement with Spain. And--listen to 
this--if the delay had continued, an additional $35 million tax 
liability would have been next--had we delayed. If the Senate had not 
finally acted on this, this single American manufacturer would have 
owed $50 million in unnecessary or redundant taxes, had we not acted.
  For nearly 6 years, this manufacturer has been laboring on an unfair 
playing field that discouraged them from making investments that could 
have expanded operations and created more jobs in Kentucky and 
elsewhere in America.
  Mr. President, I ask unanimous consent that the news story containing 
their CEO's statement on yesterday's ratification of the Spain treaty 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  [From Business Wire, July 16, 2019]

 Statement of North American Stainless CEO Cris Fuentes Regarding the 
  Passage of the Protocol Amending the Tax Convention with Spain 94-2

       Ghent, KY.--Today, the United States Senate passed a tax 
     protocol with Spain that had been languishing for over five 
     years, causing unfair double taxation for American companies 
     with foreign investors. This has cost companies like North 
     American Stainless tens of millions of dollars over the 
     years; alleviation of the double taxation could now allow for 
     greater investment in plants and workers.
       NAS Chief Executive Officer Cristobal Fuentes released the 
     following statement heralding news of the Spanish protocol's 
     passage:
       ``This is a great day for North American Stainless and so 
     many U.S. companies with foreign investors that had been 
     subject to unfair double taxation for many years. We are 
     located in Kentucky, and if it had not been for Senate 
     Majority Leader Mitch McConnell and his tireless efforts I 
     firmly believe this day would never have come. Senator 
     McConnell stood up for his constituents and helped many 
     working people at our Ghent, Kentucky plant by moving this 
     protocol through the Senate. He listened to us and put 
     Kentucky first. Workers in all 50 states stand to benefit 
     from Senator McConnell's efforts, and companies nationally 
     have him to thank for improving the American business 
     climate.
       ``In addition to Senator McConnell, we are grateful to 
     Senate Foreign Relations Committee Chairman Jim Risch and the 
     bipartisan group of Senators on his committee that moved this 
     protocol forward. We are also thankful that President Donald 
     Trump and U.S. Treasury Secretary Steve Mnuchin and their 
     staff members understood the vital importance of this 
     protocol and strongly engaged to work with the Senate to 
     achieve this victory. It is now vital that President Trump's 
     Administration move quickly to finalize and implement this 
     protocol with the Spanish Government so that affected 
     companies can have fiscal certainty before year's end as it 
     relates to tax payments. We are confident that President 
     Trump will move quickly because this protocol falls squarely 
     within his America First agenda.
       ``At a time when Chinese stainless steel producers are 
     engaged in unfair trade practices and market uncertainty 
     exists, this treaty victory gives a leg up to the American 
     workers who produce quality stainless slabs in Ghent, 
     Kentucky. Senator McConnell, President Trump, Secretary 
     Mnuchin and everyone who supported the protocol stood up for 
     workers all over America today, including the ones right here 
     in Kentucky. This treaty will preserve and unlock large 
     investments in our facility, and we look forward to talking 
     more about that in the near future.''

  Mr. McCONNELL. Multiply this kind of story by all of the other 
numerous, significant Kentucky companies whom these agreements affect; 
then multiply by 50 States because U.S. businesses from coast to coast 
interact with these four nations; then consider how many hundreds of 
thousands of workers all of these companies employ. That is the scale 
of what we are talking about--the highest consequences.
  I know job creators across the country are thrilled that the Senate 
is finally moving forward this week, and I am certainly proud to have 
helped resolve this matter. But, curiously, it seems that not all of 
our colleagues are thrilled. Don't get me wrong; the vote totals on the 
floor have spoken volumes. The cloture vote on the Spain agreement was 
94 to 1--just one Senator in opposition--and the treaty was ratified 
yesterday 94 to 2.
  Yet I was curious to hear one colleague of ours come to the floor 
yesterday and passionately argue against what I have done as majority 
leader to support these agreements. As the Member himself stated, he 
has made obstructing these tax treaties a yearlong personal project. 
The United States and Spain agreed on this protocol back in 2013. Spain 
ratified it in 2014. That is when it also arrived here in the Senate.
  For nearly 6 years, he has worked to stall ratification. I know, 
because on multiple occasions I sought unanimous consent to secure 
Senate ratification of this protocol. During that time, he has tried 
and failed to persuade Treasury Departments of two different 
administrations to insist on certain changes that would have required 
reopening the international negotiations. He tried and failed to 
persuade his colleagues on the Foreign Relations Committee that his 
ideas were so necessary that we should risk scuttling the treaties--
scuttling all of the treaties--over them. He tried and failed to 
persuade the whole Senate.
  At every step, executive branch officials and Senate colleagues have 
tried to engage his concerns in good faith. But for 6 years in the case 
of the Spain treaty, 8 years with respect to Switzerland, and 9 years 
with respect to Luxembourg, he was unable to persuade anybody--over 9 
years. In all of that time, no one was persuaded, partly because the 
changes he demanded don't solve a real problem, partly because they 
would have forced reopening the treaties for even more negotiations, 
and partly because everybody else was actually listening to the job 
creators who have been pleading with us for years to get this millstone 
off their necks. There were 9 years--9 years of rejecting reasonable 
counteroffers and accommodations, 9 years of working to hold up these 
treaties and trying to sell the Obama administration, the Trump 
administration, and his Senate colleagues on an off-the-wall story that 
failed to persuade anyone.
  Look, I am a patient man, but my patience is not inexhaustible. After 
unanimous consent was denied on multiple occasions, I determined, after 
consulting with the Treasury Secretary and the Chairman of the Foreign 
Relations Committee, that I would prepare

[[Page S4873]]

to file cloture on these tax protocols. Yet even after this whole 
journey, our colleague still was not blocked or shut out of the 
process. He had his opportunity.
  A few weeks ago, he had the opportunity to offer amendments to the 
protocols in committee. They failed on a vote of 17 to 5. Last night, 
we put two more of his amendments up for votes on the floor; they went 
nowhere.
  Nine years is long enough. In fact, it is far too long--too long for 
our U.S. businesses to have been either paying needless double taxes or 
deferring huge amounts of money in dividend payments that could 
otherwise have been invested right here at home.
  Year after year, money that could have been immediately used to hire 
Americans or make new investments had to either be frozen up or handed 
over in duplicate taxes--all in large part because one of our 
colleagues could not accept that one single Senator who hasn't 
persuaded his fellow Members is not entitled to singlehandedly rewrite 
international treaties. No wonder all kinds of American employers came 
out of the woodwork yesterday and urged the Senate to reject his 
misguided amendments and waste no more time in ratifying these 
treaties. I don't know why the Senator believes he was close to a 
breakthrough after his years of effort. Hope springs eternal, I 
suppose.
  Even if he had convinced the administration or his colleagues, the 
U.S. Government would have had to reopen the treaties for negotiation 
all over again with the other party, which would almost certainly have 
brought about changes that they wanted. No wonder President Trump's 
Treasury Department expressed opposition to these amendments. Treasury 
told Senators yesterday that going back and inserting these changes 
could force a years-long renegotiation of the treaties themselves, 
jeopardize their ratification, and have a significant adverse impact on 
America's standing among the international community.
  I am not quite sure what all these years of heel-dragging will have 
accomplished--except impose unnecessary taxes on Kentucky employers and 
deferring investments in the United States. I can't see anything to 
show for this crusade except hurting American businesses for the better 
part of a decade, all to no effect. But I am glad we can turn the page 
this week and get these treaties on the books.
  I haven't been able to identify a constituency for which he has 
advocated, but I know my actual constituents in Carroll County--real 
people in Kentucky--are sure glad the Senate has taken this important 
action.
  It is the right thing to do for the country. It is the right thing to 
do for Kentucky workers and all the employers nationwide who have been 
waiting and waiting for this unfair competitive disadvantage to be 
removed. I am glad that is exactly what we are doing this week.

                          ____________________