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CONGRESSIONAL RECORD: Aug. 2, 1999

During Debate on and AMENDMENT OFFERED BY MR. PAUL TO LIMIT THE FUNDS FOR EXPORT-IMPORT BANK OF THE UNITED STATES, OVERSEAS PRIVATE INVESTMENT CORPORATION, AND THE TRADE AND DEVELOPMENT AGENCY

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HON. RON PAUL
OF TEXAS

[Page: H6837]

Mr. PAUL. Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, this amendment provides that no funds for new obligations, guarantees, or agreements can be issued under the Export-Import Bank under OPIC or under the Trade Development Agency. This again is an attempt to try to slow up the amount of dollars that flow into corporations and for their benefit specifically as well as our foreign competitors.

China, for instance, receives the largest amount of money from the Export-Import Bank. Outstanding liabilities for the Export-Import Bank is now $55 billion. There is $5.9 billion that have been granted to the Chinese.

Last week we had a very important vote on trade. It was hotly debated over human rights issues. I voted to trade with China because I believe it is proper to trade with people. We are less likely to fight with them. And in this institution, too often we use our terms carelessly and we talk about free trade as being something which is managed trade. Free trade here generally means that we will have the NAFTA people managing trade, the World Trade Organization managing trade, and we will subsidize our businesses.

Just this past week we had the World Trade Organization rule against us saying that we grant $2 billion worth of tax benefits to our own corporations and they ruled that that was illegal. This is all done in the name of free trade.

I say that we should have free trade. We should trade with our friends and with anybody who would trade that we are not at war with. We should really, really be careful about issuing sanctions. But here we are, last week we had the great debate and a lot of people could not stand the idea of trading with Red China because of their human rights record and I understand that, although I did not accept that position. But this is the time to do something about it.

Trading with Red China under true free trade is a benefit to both of us. It is a benefit to our consumers and it benefits both countries because we are talking with people and we are not fighting with them. But it gets to be a serious problem when we tax our people in order to benefit those who are receiving the goods overseas.

[pH6838]

Now, if there is a worldwide downturn, this $55 billion of liabilities out there could be very significant in how it is going to be paid back. The Chinese right now, their economy is not all that healthy. They are talking about a devaluation.

So this is a liability that the American taxpayers are exposed to. If we do have a concern about Red China and the Chinese, yes, let us work with them, let us trade with them, but let us not subsidize them.

This is what I am trying to do. I am trying to stop this type of subsidies. So my bill, my amendment would stop any new obligation. It does not close down Export-Import Bank. It allows all the old loans to operate and function, but no new obligations can be made, no new guaranties, and no agreement, with the idea that someday we may truly move to free trade, that we do not recognize free trade as being subsidized trade as well as internationally managed trade with organizations such as NAFTA and World Trade Organization.

Those institutions are not free trade institutions. They are managed trade institutions for the benefit of special interests. That is what this type of funding is for is for the benefit of special interests, whether it is our domestic corporation, which, indeed, I would recognize does receive some benefit.

Sixty-seven percent of all the funding of the Export-Import Bank goes to, not a large number of companies, to five companies. I will bet my colleagues, if they look at those five companies in this country that gets 67 percent of the benefit and look at their political action records, my colleagues might be enlightened. I mean, I bet my colleagues we would learn something about where that money goes, because they are big corporations and they benefit, and they will have their defenders here.

It is time we look carefully at these subsidies.

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Mr. PAUL. Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I would like to point out that it is truly a subsidy to a foreign corporation, a foreign government. For Red China, corporations and governments are essentially identical. They are not really quite in the free market yet.

But the gentleman from Alabama (Mr. CALLAHAN) points out that, no, that is not true. The money does not go to Red China and they buy things; we just give it directly. We do not even send it round trip. This is true.

We take taxpayers' money. We take taxpayers' guarantee. We give them to those huge five corporations that do 67 percent of the business. We give them the money. But where do the goods go? Do the goods go to the American taxpayers? No. They get all of the liabilities. The subsidies help the Chinese.

So, technically, yes, we do not send the money there. But who is going to pay it back? The Chinese pays the loan back. If they default, who pays the bill if the Chinese defaults? Who pays the bill if they default? It is obviously the taxpayers.

What I am pointing out is that $5.9 billion that the Chinese now had borrowed from us, from the Export-Import Bank, is a significant obligation that, too, is on the backs of the American taxpayer.

So I urge support for the amendment because, if we are serious about free trade, just please do not call it free trade anymore. Call it managed trade. Call it subsidized trade. Call it special interest trade. But please do not call it free trade anymore, because it is not free trade.

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