Michael Castle

Mr. CASTLE

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. CASTLE. Madam Chairman, I do rise in opposition to the amendment.

Mr. CASTLE. Madam Chairman, I move that the Committee do now rise.

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.

Mr. CASTLE

Mr. CASTLE. Mr. Speaker, I ask unanimous consent to take from the Speaker's table the Senate bill (S. 1026) to reauthorize the Export- Import Bank of the United States, and ask for its immediate consideration in the House.

Mr. CASTLE. Mr. Speaker, I ask unanimous consent that the House insist on its amendment to S. 1026 and request a conference with the Senate thereon.

Mr. CASTLE. Mr. Speaker, I offer a motion.

Mr. CASTLE

Mr. CASTLE. Mr. Chairman, we have one speaker remaining and we have the right to close, so I would yield to the gentleman from Illinois.

Mr. CASTLE. Mr. Chairman, I yield myself the balance of my time.

Mr. CASTLE. Mr. Chairman, I would say that the amendment should be defeated. I think it makes a point, but my judgment is that if we carry it out to its nth degree, as I pointed out when I first spoke, we would have a serious problem with how to deal with this, and to add in all the various people who might have to do community work would go too far. I do not want to denigrate in any way those people who may be in public housing or on welfare who have some work requirements placed on them, which I have always hoped to be a constructive program in terms of helping them develop so they can enter into the workplace. I do not treat that as punitive, perhaps as the sponsor of this amendment would. I would encourage all of us to take the position that this is not something that should be attached to the Exim authorization, and I encourage its defeat.

Mr. CASTLE. I yield to the gentleman from Massachusetts.

Mr. CASTLE. Mr. Chairman, I yield myself 2 minutes. I do rise in reluctant opposition to this, because I have a great deal of respect for the gentleman who has sponsored it, but I think we really need to understand what we are dealing with here. This is not just a labor vote per se or anything of that nature. We need to know who is opposed to this. First of all, the State Department of the administration is opposed to this amendment and they state that we encourage companies to adopt and implement voluntary codes of conduct for doing business around the world. In adopting these voluntary codes of conduct, U.S. companies can serve as models, encouraging similar behavior by their partners, suppliers and contractors. A mandatory, and that is what we are dealing with here, code of conduct is impractical and unworkable. It would be virtually impossible for Ex-Im Bank to monitor compliance. In China alone, there are more than 20,000 United States-China joint ventures. Mr. Chairman, we are talking about U.S. firms which might export to other countries who have adopted and adhered to a code of conduct for their international operations, as what would be in the amendment. That code would include workplace safety, workers' union and collective bargaining rights, environmental protection, no political coercion of workers, community service, good ethical practices, et cetera. These are standards which are not even public all through America, much less in a lot of countries with which we deal. We basically eliminate a substantial percentage of the present work which goes on in the Ex-Im Bank. At the same time, I think that we are the leaders through the Ex-Im Bank in having a lot of these practices put in place in some of these other countries for which we deserve credit, but on a voluntary basis, not on a mandatory basis. It imposes extraterritorial enforcement of U.S. labor and environmental laws, which is a substantive question that needs to be raised from a legal point of view. It would impose corporate enforcement requirements that would conflict with local laws. It imposes standards on non-U.S. firms which supply and contract with U.S. firms, and makes U.S. firms liable for contractor/supplier conduct. As I said, I respect what the gentleman is trying to do and I respect the gentleman, but I believe this amendment is out of place. We are not making foreign policy here. Mr. Chairman, I reserve the balance of my time.

Mr. CASTLE. Mr. Chairman, I do not translate that as support.

Mr. CASTLE. Mr. Chairman, I rise in opposition to the amendment.

Mr. CASTLE. Mr. Chairman, I yield the balance of our time to the gentleman from Iowa [Mr. Leach], chairman of the Committee on Banking and Financial Services.

Mr. CASTLE

Mr. CASTLE. Mr. Chairman, reclaiming my time, the gentleman is a tremendous asset to this House and, unfortunately, it is the good people who we tend to lose in circumstances like this, and he will be missed tremendously. I have enjoyed working with him in every way possible. I will not add too much more to what has already been stated on this legislation. I think there is some confusion about what we are dealing with. We are not dealing with OPIC. We are not dealing with foreign policy. I think the gentleman from New York [Mr. LaFalce] made that comment. This is not a foreign policy instrument. We are going to see amendments here in a little while which would make one think it is a foreign policy instrument in which we will try to impose our different standards on various countries, some of which we will oppose, some of which we will swallow on a little bit, but all of which, I think, are a little bit dubious in terms of what this policy should be. This truly is what it may be renamed to, which is an export bank for the United States to help our businesses, large and small. I think it is important to understand there has been a change in the mindset at the Eximbank, and that is that small businesses need to be served. There has been a mindset change already, and we have also put it into this legislation as well, as well as some of the other amendments that were put on at the committee level which were discussed today, to make sure that we are encouraging this Bank to help American businesses, dealing with Americans, giving jobs in America, and giving jobs particularly to the small businesses in our country. While in the past some of our large companies have dominated and to some degree still do dominate the loan scene with the Eximbank, that is changing very, very rapidly. I think if we can chart that pace of change, we will see that the small businesses are now sharing dramatically. Plus, I think, from comments of the gentleman from Illinois [Mr. Manzullo], we saw what it means to the various suppliers to one company where the suppliers are all over the United States of America producing jobs in various parts of the country, and I think that is every bit equally as important. Would taxpayers save money if we closed Eximbank? That issue has been raised by my colleagues here. The taxpayers would save no money by closing the Eximbank. A very credible study by the Economic Strategy Institute suggested, after 10 years, closing the bank would actually cost the Federal Government $24 billion annually due to the loss of Federal tax revenues that are generated by bank-approved exports and their indirect effect on the Nation's economy. And that is very, very important. We need to understand all the economic ramifications of this, and I think that has been well studied and well demonstrated.

Mr. CASTLE. Mr. Chairman, I yield back the balance of my time.

Mr. CASTLE. Mr. Chairman, the Committee meets today to consider the bill, H.R. 1370, legislation to reauthorize the Export-Import Bank of the United States, Eximbank, as it is known, for an additional 4 years. The bill, as amended, was favorably reported by the Committee on Banking and Financial Services by voice vote to the House of Representatives on July 9 with a report on this bill, Report No. 105- 224, being filed on July 31, 1997. Without timely reauthorization, Eximbank will have to shut down its operations at the end of this fiscal year, literally less than a day away. Briefly, H.R. 1370 provides for the following: First, a 4-year renewal of Eximbank's charter through September 30, 2001; Second, an extension of the tied aid credit fund authority; Third, an extension of the authority for providing financing for the export of nonlethal defense articles; Fourth, a clarification of the President's authority to prevent bank financing based on national interest concerns; Fifth, the creation of an Assistant General Counsel for Administration position; Sixth, authorization for the establishment of an advisory committee to assist the bank in facilitating United States exports to sub-Saharan Africa; Seventh, a requirement that two labor representatives be appointed to the Bank's existing advisory committee; Eighth, a requirement that the Bank's chairman design an outreach program for companies that have never used its services; Ninth, the establishment of regulations and procedures as appropriate to ensure that when the Bank is making a determination as among firms that receive assistance, that preference be given to those firms that have shown a commitment to reinvestment and job creation in the United States. Not every Member may be familiar with the work of Eximbank, so let me clarify what the Bank is and what it is not. Eximbank is an independent Federal agency established in 1934 to provide export financing for U.S. businesses. It has the twofold purpose of neutralizing an aggressive financing by foreign export credit agencies and to furnish export credit financing when private financing is unavailable and only when the Bank has a reasonable assurance of repayment. Eximbank is not a foreign policy agency. Eximbank is not a development agency. The Bank's narrow purpose is to create jobs in the United States by promoting exports abroad. Why do we need Eximbank? Largely because many foreign governments provide official financing to their countries' exporters. Although many of us would like to reduce or eliminate export credit subsidies, it is clear that without Eximbank the United States would have no leverage to help bring more market discipline to the rules governing international trade finance. Likewise, American exporters would be hindered in their efforts to establish market presence in developing countries lacking full and easy access to private sources of finance. While American workers and companies have made enormous strides to compete in the global economy, they cannot compete and win against Government-supported foreign competition. We need Eximbank to deter the distorting tied aid and other forms of economic pressure used by some of our trading partners. We also need Eximbank to help secure the necessary financing that will enable our dynamic small businesses to export their goods and services to the broader global market. American firms will simply not thrive at home unless they take full advantage of the tremendous opportunities abroad. Today, 96 percent of U.S. firms' potential customers are outside U.S. borders, and key developing markets alone will account for almost half of the world's market by the year 2010. These markets are already our country's best economic opportunity, with developing countries already accounting for 67 percent of world import growth. This body and the American people should have no illusions about the intensity of commercial competition for export contracts in emerging markets, competition that frequently hinges on the terms of export financing. The simple fact of the matter is that without Eximbank, U.S. exporters would lose contracts in important developing countries to companies in Japan, France, and Germany that receive trade finance from their Government-supported export credit agencies. Moreover, in critical technology, such as aerospace, power generation, and telecommunications, the loss of markets is long-term as the initial choice of a supplier determines services, parts, and follow-on sales. In closing, Mr. Chairman, the committee has reported out a solid bipartisan bill reauthorizing this vitally important agency. I would urge Members to give it their enthusiastic support. Mr. Chairman, I reserve the balance of my time.

Mr. CASTLE. Mr. Chairman, I yield 5 minutes to the distinguished gentleman from Illinois [Mr. Manzullo], a member of the Committee on Banking and Financial Services. (Mr. MANZULLO asked and was given permission to revise and extend his remarks.)

Mr. CASTLE. I yield to the gentleman from Michigan.

Mr. CASTLE. Mr. Chairman, I yield 5 minutes to the distinguished gentleman from Texas [Mr. Paul], with whom I disagree on this bill, but I totally agree with his right to present his points of view. (Mr. PAUL asked and was given permission to revise and extend his remarks.)

Mr. CASTLE. Mr. Chairman, I yield 2 minutes to the gentleman from Texas [Mr. Brady].

Mr. CASTLE. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from Florida [Mr. Mica]. (Mr. MICA asked and was given permission to revise and extend his remarks.)

Mr. CASTLE. Mr. Chairman, I yield 2 minutes to the distinguished gentleman from New York [Mr. Houghton]. (Mr. HOUGHTON asked and was given permission to revise and extend his remarks.)

Mr. CASTLE

Mr. CASTLE. Mr. Chairman, I move the Committee do now rise.