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[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]

 
                INTERNATIONAL TRADE AND THE ENVIRONMENT

=======================================================================

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                INTERNATIONAL ECONOMIC POLICY AND TRADE

                                 OF THE

                              COMMITTEE ON
                        INTERNATIONAL RELATIONS
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 21, 2000

                               __________

                           Serial No. 106-170

                               __________

    Printed for the use of the Committee on International Relations

                               

Available via the World Wide Web: http://www.house.gov/international--relations

                                 ______

                     U.S. GOVERNMENT PRINTING OFFICE
 68-287 CC                  WASHINGTON : 2000

                  COMMITTEE ON INTERNATIONAL RELATIONS

                 BENJAMIN A. GILMAN, New York, Chairman
WILLIAM F. GOODLING, Pennsylvania    SAM GEJDENSON, Connecticut
JAMES A. LEACH, Iowa                 TOM LANTOS, California
HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
DOUG BEREUTER, Nebraska              GARY L. ACKERMAN, New York
CHRISTOPHER H. SMITH, New Jersey     ENI F.H. FALEOMAVAEGA, American 
DAN BURTON, Indiana                      Samoa
ELTON GALLEGLY, California           MATTHEW G. MARTINEZ, California
ILEANA ROS-LEHTINEN, Florida         DONALD M. PAYNE, New Jersey
CASS BALLENGER, North Carolina       ROBERT MENENDEZ, New Jersey
DANA ROHRABACHER, California         SHERROD BROWN, Ohio
DONALD A. MANZULLO, Illinois         CYNTHIA A. McKINNEY, Georgia
EDWARD R. ROYCE, California          ALCEE L. HASTINGS, Florida
PETER T. KING, New York              PAT DANNER, Missouri
STEVEN J. CHABOT, Ohio               EARL F. HILLIARD, Alabama
MARSHALL ``MARK'' SANFORD, South     BRAD SHERMAN, California
    Carolina                         ROBERT WEXLER, Florida
MATT SALMON, Arizona                 STEVEN R. ROTHMAN, New Jersey
AMO HOUGHTON, New York               JIM DAVIS, Florida
TOM CAMPBELL, California             EARL POMEROY, North Dakota
JOHN M. McHUGH, New York             WILLIAM D. DELAHUNT, Massachusetts
KEVIN BRADY, Texas                   GREGORY W. MEEKS, New York
RICHARD BURR, North Carolina         BARBARA LEE, California
PAUL E. GILLMOR, Ohio                JOSEPH CROWLEY, New York
GEORGE RADAVANOVICH, Califorina      JOSEPH M. HOEFFEL, Pennsylvania
JOHN COOKSEY, Louisiana
THOMAS G. TANCREDO, Colorado
                    Richard J. Garon, Chief of Staff
          Kathleen Bertelsen Moazed, Democratic Chief of Staff
            John P. Mackey, Republican Investigative Counsel

                                 ------                                

        Subcommittee on International Economic Policy and Trade

                 ILEANA ROS-LEHTINEN, Florida, Chairman
DONALD A. MANZULLO, Illinois         ROBERT MENENDEZ, New Jersey
STEVEN J. CHABOT, Ohio               PAT DANNER, Missouri
KEVIN BRADY, Texas                   EARL F. HILLIARD, Alabama
GEORGE RADANOVICH, California        BRAD SHERMAN, California
JOHN COOKSEY, Louisiana              STEVEN R. ROTHMAN, New Jersey
DOUG BEREUTER, Nebraska              WILLIAM D. DELAHUNT, Massachusetts
DANA ROHRABACHER, California         JOSEPH CROWLEY, New York
TOM CAMPBELL, California             JOSEPH M. HOEFFEL, Pennsylvania
RICHARD BURR, North Carolina
             Mauricio Tamargo, Subcommittee Staff Director
        Jodi Christiansen, Democratic Professional Staff Member
                Yleem Poblete, Professional Staff Member
                   Victor Maldonado, Staff Associate

                            C O N T E N T S

                              ----------                              

                               WITNESSES

                                                                   Page

Mildred Callear, Vice President and Treasurer, Overseas Private 
  Investment Corporation.........................................     8
Barbara Bradford, Deputy Director, U.S. Trade and Development 
  Agency.........................................................    10
Dan Renberg, Member of the Board, Export-Import Bank of the 
  United States..................................................    13
Paul  Joffe, Associate Director for Advocacy, National Wildlife 
  Administration.................................................    23
Myron Ebell, Director, Global Warming and International 
  Environmental Policy, Competitive Enterprise Institute.........    25

                                APPENDIX

Prepared statements:

Mildred Callear..................................................    32
Barbara Bradford.................................................    39
Dan Renberg......................................................    49
Paul Joffe.......................................................    57
Myron Ebell......................................................    61

                INTERNATIONAL TRADE AND THE ENVIRONMENT

                              ----------                              

                        WEDNESDAY, JUNE 21, 2000

              House of Representatives,    
         Subcommittee on International Economic    
                                      Policy and Trade,    
                      Committee on International Relations,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:05 p.m. In 
Room 2255, Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen [Chairwoman of the Subcommittee] presiding.
    Ms. Ros-Lehtinen. The Subcommittee will come to order. 
Thank you so much for being here today.
    It has been said that we do not inherit the Earth from our 
parents but rather bequeath it to our children. Today we are 
just beginning to understand the real and long-term effects 
which our existence has upon the natural world around us and 
how we can as Americans can affect environmental change for the 
better.
    One area in which it has become quite clear that we can 
export our concern over the environment to other nations is in 
international trade and development. By supporting initiatives 
which not only account for environmental concerns but indeed 
promote conservation, the United States can provide leadership 
in a world where concerns over the environment are becoming 
ever more prominent.
    In an age when international commerce and the cause of 
conservation are often described as locked in the proverbial 
battle between an immovable object and an unstoppable force, it 
is incumbent upon us to pause and realize that trade and the 
environment are not issues which are mutually exclusive. The 
twin goals of trade and the protection of the environment can 
provide each other with opportunities to pursue sustainable 
development as well as conservation.
    Following the World Trade Organization Seattle ministerial 
in 1999, the world took notice of the issue of environmental 
conservation and its relation to the international trade 
community. As protesters from an eclectic collection of causes 
pour into the streets of Seattle we were all forced to revisit 
the way in which multi-national trade organizations had dealt 
with the issue of protection of the environment. Among the most 
serious charges leveled at the WTO was the perceived lack of 
priority given to national and international environmental 
laws. For example, while most member nations have committed 
themselves to certain core environmental standards, protesters 
felt that the WTO was not taking steps to implement regulations 
to reward countries adhering to and exceeding such standards.
    In response to these attacks, WTO members stated that as an 
organization it is entirely dependent upon the desires and 
actions of its member states and that many were unenthusiastic 
about instituting reforms which they felt would overly burden 
developing nations.
    So for those Americans who believe that environmental 
conservation is an important and needed reform within the WTO, 
we must look far closer to home in order to ensure that care 
for the environment is afforded the same respect as other 
international trade issues. This goal can be accomplished by 
addressing the procedures and regulations employed by the U.S. 
Government agencies which fund and support American trade and 
investment abroad such as the Overseas Private Investment 
Corporation, OPIC, the United States Trade and Development 
Agency, USTDA, and the Export-Import Bank of the United States.
    By promoting projects and endeavors which account for 
environmental conservation as well as assisting in creating 
sustainable development within the local communities and 
economies, the United States can provide the leadership which 
the WTO has failed to exhibit and perhaps provide other nations 
with an example of just how trade and environmental concerns 
can work together.
    One possible example of this fusion of trade concerns and 
environmental awareness which has been proposed by analysts is 
to take advantage of the vast experience which the United 
States has developed in the field of environmental 
conservation. For many years, the United States has been in the 
forefront of nations studying the environmental impact of 
industry and developing more environmentally friendly modes of 
production.
    These innovations can be put to use, for example, when a 
state finally develops the necessary resources to maintain a 
stable economic infrastructure and decides to allocate some of 
its surplus resources toward protecting the environment. With 
the proper guidance and support from U.S. agencies, American 
firms with the necessary experience and technology may find a 
fertile business opportunity.
    Another example lies in less developed nations, where the 
drive to actively conserve the environment may not be as 
prevalent as it is within our country. American firms with the 
foresight to understand the inherent value of the environment 
can create new opportunities, such as eco-tourism, to not only 
conserve the local environment but to strengthen the local 
economy.
    Finally, there is the vast divide between the 
environmentally friendly technologies developed here at home 
and those available in many other nations of the world. These 
technology firms, which create products such as industrial 
scrubbers and other bio-friendly commodities, represent yet 
another opportunity for Americans to increase our share of the 
growing international market while at the same time benefiting 
the protection of the environment.
    With the passion and assistance of the men and women 
assembled before us today we can come up with just a few 
examples of how it is that international trade and the 
protection of the environment can work, and together we may be 
able to help provide our children and our grandchildren with a 
world full of blue seas and green forests as well as to provide 
them with the prosperity and good fortune to appreciate the 
beauty of nature.
    I am proud to yield now to the Ranking Member of the 
Subcommittee, Mr. Menendez.
    Mr. Menendez. Thank you. I appreciate the opportunity you 
have provided us for talking about this globally important 
question of the relationship between trade and the environment. 
Clearly, the subject is topical, as we have seen over the past 
6 months in the news, and it is, more importantly, of long-
range importance as decisions made now on this issue will have 
an impact for years, even, I believe, centuries to come.
    The protests at the WTO meetings last December in Seattle, 
and in Washington at the World Bank IMF meetings, serve to 
remind us that there are still plenty of skeptics and some with 
good cause. There are legitimate concerns on both sides of the 
question, considering for a moment trade and the environment 
separately. Most people in the United States agree, though 
that, the development of trade and protection of the 
environment are both desirable. More significantly, I would say 
there is growing consensus in this country that they should no 
longer be considered mutually exclusive. I believe most of our 
witnesses today will make that point rather ably.
    Certainly the vote that we expect today, which I think will 
be somewhat lopsided, in calling for the United States to leave 
the WTO, the vote against that is an indication of wide support 
for continued U.S. participation and leadership in global trade 
mechanisms and discussions. But that vote, when it takes place, 
does not, of course, mean citizens in the United States and 
elsewhere are complacent with the WTO. The Seattle protest 
should not be disregarded, for they reflect a real 
disenchantment for the way the WTO operates.
    Principally, these problems include the world trade body's 
failure to pay sufficient attention to environmental concerns, 
as well as its continued penchant for operating in a secretive 
manner.
    These concerns, along with important labor considerations, 
are part of the reasons certainly that talks on future 
multilateral trade agreements remain stalled. In fact, since 
1994 when NAFTA was agreed to, and the Uruguay round of GATT 
negotiations culminated in the establishment of the WTO, not 
much more has happened. So I believe that the United States, 
through continued leadership on these issues, can help lead us 
back on track to sustainable, responsible growth through 
environmentally friendly trade.
    In the past few years, the United States, with help from 
NGO's such as the National Wildlife Federation from which we 
will hear today, has done admirably in asserting the necessity 
of pursuing the twin goals of liberalized trade and 
environmental protection and to argue that these not need be in 
conflict.
    Prior to the start of the Seattle WTO ministerial meeting, 
the U.S. Government, with backing from NGO's, made clear to its 
negotiators a set of guidelines intended to, ``ensure the trade 
rules continue to be supportive of environmental protections at 
home and abroad.''
    In a public White House declaration, President Clinton 
outlined a series of principles. They included: increased 
accounting of environmental implications, greater transparency 
in the WTO and trading system, strengthened cooperation between 
the WTO and international organizations with respect to 
environmental matters, assurance that trade rules do not 
undermine U.S. ability to maintain and enforce fully U.S. 
environmental laws, support for ecolabeling, and full 
participation of environmental, health and safety officials in 
trade negotiations.
    These policy guidelines for the multilateral WTO are 
extensions of what the United States has called for and 
implemented in its own government institutions charged with 
trade development. In 1985, Congress added environmental 
provisions to OPIC's statute. In 1992, Congress revised the 
charter of the Export-Import Bank, requiring environmental 
review procedures; and we look forward to hearing from these 
U.S. trade agencies, including the Trade and Development 
Agency, about how they have redoubled their focus on 
environmental questions in recent years.
    Finally, one of the most interesting proposals prior to 
Seattle was to identify and pursue win-win opportunities in 
which reducing or eliminating subsidies and opening markets can 
yield direct environmental benefits, such as recent moves to 
reduce subsidies to fishing industries and thereby reduce 
overfishing. This kind of initiative is where the future of 
sustainable, environmentally responsible and publicly supported 
trade lies.
    One outcome of the protests at Seattle is that a variety of 
issues once considered anathema to trade discussions, including 
environmental impacts of trade, have become more visible and 
harder to ignore in subsequent trade negotiations. 
Environmental concerns will from now on be a constant ware on 
any trade negotiation table.
    In this reality, there are challenges and opportunities for 
the United States. The challenges include the need for 
industrialized countries, with the United States in the lead, 
to convince developing nations that environmental protection is 
in their interest, too. So, too, the United States and other 
WTO members are challenged to persuade the world trade body to 
be more transparent in its actions and inclined toward 
protecting the environment.
    At the same time, the mounting international pressure for 
sustainable, environmentally responsible growth in developing 
countries provides significant opportunities for U.S. firms. 
U.S. exports in environmental technology have nearly doubled 
since 1996. U.S. companies must overcome extremely difficult 
competition from foreign companies subsidized by their 
governments, but there should be plenty of room in what is 
estimated to grow to a more than $500 billion industry in the 
next few years. Opportunities exist, too, in the growing areas 
of biodiversity and ecotourism.
    So I look forward to hearing from the panelists today about 
some of these issues. I look forward to hearing about those 
projects that support a healthier global environment by helping 
to build the capacity of developing countries to meet 
environmental needs and about opportunities for U.S. firms and 
organizations to play a larger role in the export of 
environmental technology and expertise.
    I am reminded that we travel on a small spaceship called 
Mother Earth and that we are dependent upon its natural but 
limited resources. And that as we seek to raise the tides for 
all people in terms of the economic opportunity that trade can 
provide, we need to remember that the sustainability of all of 
those possibilities exists with the type of environmental 
decisions that make us good stewards of the land for this 
generation and generations to come.
    That is our challenge. It is also a tremendous opportunity. 
And I personally want to thank those who have raised and 
continue to raise the issue of the environment. I don't always 
agree on how they raise the issue, but I do believe that the 
raising of the issues has made it possible for this to be part 
of the agenda and the debate in the days ahead of the trade 
issues that we will face.
    Ms. Ros-Lehtinen. Thank you so much, Mr. Menendez.
    Mr. Cooksey, thank you for joining us.
    Mr. Rohrabacher for some opening statements.
    Mr. Rohrabacher. Every time I hear about this issue being 
discussed there just seems to be something that is left--the 
equation just totally left out. I am listening today, and it 
just seems it is being left out. There is a void there.
    I sort of looked at the map. I was trying to think what 
that void is. It is very clear what that void is now, so that 
nobody is talking about where democracy and freedom come into 
play in this issue. It is just like not part of the question. I 
mean, it is all about the environmentally good things that 
need--the policies that need to be followed and, you know, what 
sort of trade policies we will have. But there is a 
relationship here, a very strong relationship between how we 
trade and what policies we have as--based on what type of 
government is on the other end of the trading relationship.
    And people--let me assert this--people in developing 
countries have just as much right to democratic government and 
making their own decisions and controlling their own destinies 
including their environmental policies as we do. And anybody 
who comes from a rich, developed country like the United States 
and thinks it is going to impose on a democracy environmental 
laws is talking about tyranny. Even though it is the best of 
motives, cost benevolent motives saving the environment, the 
best of motives. But this is totally--then we are talking about 
a dictatorship. When you are talking about how you relate and 
what laws should be restricting trade with dictatorships, that 
is totally different.
    The WTO--and this is one of my biggest problems with the 
WTO and a lot of the other trade--you know, globalist trade 
policies that we have been hearing about on Capitol Hill--is 
that these policies almost always insist that our trade 
policies and our policies in the government should be exactly 
the same toward a dictatorship as it is toward a democratic 
government. That makes no sense to me.
    I happen to believe that if you have a democratic 
government they can set their own environmental restrictions, 
as I said earlier. They have a right, and businesses--and we 
try to control the trade policy--businesses have a 
responsibility when they go to those countries to obey the laws 
of those countries because the laws are, by definition, the 
laws that have been put in place by the people there through 
the ballot box.
    But now, with dictatorships, that is a whole different 
issue, isn't it? And we have had a lot of dictatorships. We had 
a lot of trade with nations when they had a lot less than a 
free government. Now they are struggling to have a democratic 
government. I will bet you that the open environment policies 
that we noticed in the old Indonesian government are going to 
be changed.
    In Burma, we had the rape of a rain forest in order to 
what? In order to put money in the pockets of a militarist 
elite and to also to help give them the weapons they needed to 
repress their own people. So we had dramatic degradation in 
non-free countries. This has to be an important part of the 
debate.
    Because part of the struggle to staff the resources around 
the world and have good environmental laws is, No. 1, giving 
the people of those countries the right to control their 
heritage, their rain forests, their land, their skies, their 
oceans. And I think it is wrong to think that we are going to 
have a WTO, you know, just--the argument is, well, the WTO has 
to do--have more regulations that are going to protect the 
environment in the Third World.
    I don't agree with that at all. I think the WTO should--you 
know, people in their own countries--we should be struggling 
for democracy and let the people in their own countries start 
protecting their rights of their people when it comes to their 
natural resources.
    Again, I say we should be trading, trade-wise, with Costa 
Rica different than Burma. And if we do and if we promote 
democracy I think in the end it will promote environmentally 
good decisions at the same time. Because with honest and 
democratic governments you don't have the wholesale corrupt 
destruction of these natural resources.
    We need a code of conduct for American business in dealing 
with dictatorships. The code of conduct in dealing with 
democratic societies should be the laws of those societies as 
those people see fit.
    If Burma wanted to destroy its rain forest, if the people 
of Burma wanted to do that in order to have an education system 
to sell their trees, they have a right to do so. If the people 
of Burma did that--not the little dictatorship, but if the 
people of--if they wanted to do it because they wanted to use 
that money for education, what might be a tradeoff, that would 
be their right to make that tradeoff. What isn't good is having 
dictators down in Indonesia or Burma or anywhere else raping 
the environment in order to make a quick profit and put it in 
Swiss bank accounts.
    So I think that when we are talking about trade policy, we 
should distinguish, as the WTO does, not between free and 
unfree countries. And if we ourselves in the United States try 
to establish our own standards maybe, as I say, rather than 
putting all of our authority and power in the hands of the WTO, 
set up our own standards like a code of conduct for American 
companies in dealing with dictatorships. That would have my 
support.
    And, with that, I am very interested in hearing what the 
witnesses have to say. I do know one thing. The Export-Import 
Bank and American financially supported international financial 
institutions have subsidized a lot of really bad environmental 
decisions and economic activity going on in dictatorships. I 
mean, we have actually financed with our tax dollars the 
destruction of the environment in countries that were not free, 
where their own people couldn't vote out the clique that was in 
power.
    That should stop immediately. We should have a restriction 
on all subsidies that come from the U.S. taxpayers on economic 
activity that would be deemed not acceptable by American law 
because of environmental reasons in the United States. But, 
again, when we are dealing with a democracy let's have those 
people have control of their own lives and let's not just 
ignore their rights as well.
    So thank you very much, Madam Chairman.
    Ms. Ros-Lehtinen. Mr. Cooksey.
    Mr. Cooksey. Thank you, Madam Chairman.
    I would certainly agree with the comments of my colleagues, 
but I will defer my time to hearing from the witnesses. We have 
some impressive witnesses. I have glanced over your statements. 
I am anxious to hear what you say. Thank you.
    Ms. Ros-Lehtinen. Thank you.
    I would like to now introduce the three administration 
witnesses who will share their views on the current state of 
relations between international trade and environmental 
communities this afternoon. So let me begin with--and I am 
terrible with names. I have got a name that everyone 
slaughters, so I hope I get more or less these right:
    Mildred Callear, Vice President and Treasurer of the 
Department of Financial Management and Statutory Review for the 
Overseas Private Investment Corporation, OPIC. OPIC's former 
Senior Counsel for Administrative Affairs, Ms. Callear is the 
currently the corporation's chief financial officer and 
responsible for administering OPIC's financial and political 
risk insurance portfolios. Thank you so much for joining us.
    She will be followed by Ms. Barbara Bradford, the Deputy 
Director of the United States Trade and Development Agency. A 
graduate of Georgetown University, Ms. Bradford joined TDA in 
1986 after a series of successful ventures in the private 
sector, including having founded a prosperous export trading 
firm. While at TDA she has focused on managing the agency's 
small business outreach programs and its trust funds with the 
World Bank and other financial institutions.
    We are also fortunate to have Mr. Dan Renberg, member of 
the board of the Export-Import Bank of the United States, the 
Eximbank. Sworn in as a board member in November 1999, Mr. 
Renberg is the former president of Renberg Strategies 
consulting firm and a published author of a book on the House 
of Representatives entitled, A House of Ill Repute. I 
understand Mr. Rohrabacher has an entitled chapter in that 
book?
    Mr. Renberg. The Congressman wasn't one of the 
contributors, but some of his colleagues were--Congressman 
Gingrich, Congressman Walker. We could always do a reprint, I 
guess.
    Ms. Ros-Lehtinen. Ms. Callear, Let us begin with you.
    Ms. Callear. Madam Chairwoman----
    Ms. Ros-Lehtinen. We will be glad to put your entire 
statements in the record. If could you briefly summarize them, 
we would appreciate it.

STATEMENT OF MILDRED O. CALLEAR, VICE PRESIDENT AND TREASURER, 
   DEPARTMENT OF FINANCIAL MANAGEMENT AND STATUTORY REVIEW, 
         OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC)

    Ms. Callear. On behalf of OPIC President and CEO George 
Munoz, I appreciate this opportunity to testify on the 
relationship between trade and the environment. And we also 
appreciate your leadership and the bipartisan approach that you 
and the other Members of the Committee are taking to this 
important issue, because we really do think that it is good for 
the environment, good for the developing countries and very 
good for American companies.
    Mr. Ros-Lehtinen. Tell George we all say hello.
    Ms. Callear. I certainly will.
    More than 15 years ago, this Congress had the foresight to 
give OPIC an environmental mandate. We were charged with 
conducting environmental assessments for all of the prospective 
projects that come before us and to avoid doing any project 
that would have the potential for serious harm to the 
environment. Thanks to that vision, OPIC is one of the first 
international agencies to have an environmental mandate, and 
today we have a rich history of successful environmental 
assessment and monitoring that I think showcases the 
responsible approach that American companies have taken.
    Now I would acknowledge that, at times, this has posed a 
dilemma for OPIC because, as Americans, we recognize and value 
the benefits of clean air and water and soil, and it is only 
fair for us to take those values with us when we invest 
overseas. But, unfortunately, not all of our OECD counterparts 
have had the same approach. This has led to a very real concern 
that American companies may be at a competitive disadvantage if 
they are held to a higher standard.
    But today I think there is more and more consensus among 
environmental groups, U.S. business and us in the government 
that common environmental standards for overseas investment 
really do make sense. We should not allow foreign companies to 
compete for business by cutting corners on environmental health 
and safety. And I know that many Members of Congress have 
worked diligently with your parliamentary counterparts overseas 
to try to bring this point home, the importance of having a 
common standard when companies are bidding on the same projects 
in developing countries.
    Since 1999 we do see that some of our counterparts have 
begun to make some changes. I think that some of that is due to 
the same pressures and discussions that we are seeing in our 
own country as the environment is higher on the agenda and 
there is more need for our OECD counterparts to look at these 
issues. But there is much more that needs to be done. There is 
much that has to occur before there is a real, substantive 
standard that is applied and, I think, some of the transparency 
and accountability issues are so important to having an open 
discussion about the projects and their effects.
    So we think that U.S. leadership is helping to level the 
playing field, but there is much more work ahead.
    Now, although having strong policies in the environmental 
sector is important, our real commitment I think is shown by 
the types of projects that we do, as you mentioned earlier. 
There are many opportunities for American companies to really 
take a leadership role. For example, just last week OPIC 
approved a project that will greatly benefit the health of the 
people in Bulgaria. We approved $200 million of political risk 
insurance to rehabilitate a thermal power project in Bulgaria. 
It is Entergy Power Group out of Louisiana--New Orleans--that 
will be modernizing this plant.
    As a direct result of their investments, some very 
important U.S. technology is going to be put into place. 
Atmospheric emissions will be reduced because there will be 
modern new gas desulfurization technology, low NOX 
burners and other state-of-the-art equipment. So this will have 
significant health benefits for the people of Bulgaria, and it 
will also improve the supply of electric power. The 
rehabilitation of this plant will allow the Bulgarians to 
phaseout their reliance upon a Soviet-era nuclear facility that 
is clearly unsafe and technologically obsolete.
    A couple of other noteworthy environmental initiatives. You 
may be aware that OPIC has a series of investment funds, and 
three of those funds are focused on environmental investments. 
There is nearly $500 million of equity capital that is 
available for investment. One of those funds has fully invested 
its capital and two others are making investments in clean 
water, clean energy and waste water treatment.
    Because of President Munoz' dedication to small business, 
we are also focusing on how we can work more closely with the 
small business sector to do good things for the environment. We 
recently announced, during World Environment Week, a $1 million 
project to support small environmental projects in the 
Philippines. We are working with the nonprofit NGO, Counterpart 
International, and they have set up a for-profit subsidiary 
that will take equity stakes in small energy-efficient 
projects, ecotourism, water supply projects, etc., in the 
Philippines that will help to improve the quality of life 
there.
    And, finally, one project that we approved last year I 
think demonstrates how we can meet the environmental challenges 
that are inevitable when we are financing and ensuring projects 
overseas. The Cuiaba integrated power project involved the 
construction of an underground natural gas pipeline from 
southeastern Bolivia to fuel a power plant in Cuiaba, Brazil. 
This project has provided us an unprecedented opportunity for 
participation and dialogue as the project was assessed and 
developed. It will benefit the environment because it will 
provide clean natural gas as an alternative to diesel and 
because currently many of the local citizens are harvesting 
timber for fuel wood and that is resulting in a lot of 
deforestation.
    So we are very pleased to have the opportunity to work on a 
project of this type, but it does present many challenges. It 
required us to ask the sponsors to thoroughly assess all of the 
impacts in advance and, in fact, to reroute part of the 
pipeline to avoid an environmentally sensitive area, which they 
were satisfied to do.
    To ensure that the project meets the environmental 
commitments that we are putting into the agreements, we have 
really an unprecedented monitoring program, and we are trying 
to do it by using advanced technology to measure and manage the 
project impacts. We are using satellite imagery, satellite 
telecommunications and the ability to send digital images, 
including video images, directly from the field as the 
monitoring is occurring back to our offices. Much of this we 
are putting on our state-of-the-art website, and we have had 
the results posted in both English and in Spanish so that the 
local citizens in Bolivia can understand the impact of the 
projects that are taking place in their country.
    So through this process we have I think made great strides 
in engaging the local citizens and the NGO community, and we 
are having a proactive dialogue. We really have set out to make 
this project a model; and we think that, because of the 
cooperation of the sponsors, including the Enron Corporation, 
we are well on our way to doing that.
    As further evidence of their commitment, they put forward 
$20 million of additional funding to support a regional forest 
conservation program which is really separate and apart from 
the project itself but I think shows their good will and their 
desire to have a long-term relationship with the citizens of 
that country.
    So our experience in implementing projects shows that under 
President Munoz' leadership we have really been able to strike 
the right balance between protecting the environment on the one 
hand and making sure that we are helping American companies 
compete in a marketplace that is becoming increasingly 
competitive for all of us.
    As Congressman Menendez and you have described, I think the 
opportunities are excellent for American companies and there is 
a real chance for us to take our technology and our skills and 
our infrastructure that we have developed here and really be a 
model for the world at large and to truly sell our services and 
our products in a way that is very good for our country as 
well. Thank you very much.
    [The prepared statement of Ms. Callear appears in the 
appendix.]
    Ms. Ros-Lehtinen. Thank you so much.
    Ms. Bradford.

STATEMENT OF BARBARA BRADFORD, DEPUTY DIRECTOR, U.S. TRADE AND 
                       DEVELOPMENT AGENCY

    Ms. Bradford. Thank you, Chairperson Ros-Lehtinen, 
Congressman Menendez, and Members of the Subcommittee, for this 
opportunity to testify today on the U.S. Trade and Development 
Agency and the environment.
    I would like to briefly summarize my remarks.
    As our name suggests, TDA targets projects that promote 
trade while assisting low- and middle-income countries with 
their development and infrastructure priorities. With the 
international political pressure mounting in recent years for 
countries to become more environmentally responsible, 
environmental projects have become an important mainstay of 
TDA's programs. Despite the growth in this market, however, 
U.S. companies face extremely tough foreign government 
subsidized competition. As a result, the assistance TDA and our 
sister export promotion agencies can provide our companies can 
be critically important to their success overseas.
    My testimony today will focus on how TDA has responded to 
worldwide environmental trends presenting export opportunities 
for U.S. companies, as well as a couple of examples of the 
environmental projects in which we have invested.
    Let me begin by discussing some of the trends we have 
observed in trade and the environment around the world. From 
hazardous waste to air pollution, the world community now 
recognizes that environmental mismanagement in one country can 
have negative global or regional consequences. Although the 
initial investment in pollution mitigation and prevention 
technologies can be costly, failure to make this investment can 
result in environmental problems with much higher costs. 
Recognizing this, many countries have significantly 
strengthened their environmental policies.
    One of the trends we have witnessed that we believe has 
great promise for U.S. firms is the increase in the number of 
privatization and private sector projects. When market-based 
decisions prevail over political ones, U.S. companies 
frequently benefit. We have witnessed this in Asia where, given 
the somewhat limited resources of the public sector, 
governments are encouraging the private sector to undertake 
many environmental investments. Also, in Europe, there is 
intense political pressure for the new EU accession countries 
to adopt the strong environmental regimes of their Western 
European counterparts. This has led to a multitude of private 
sector environmental projects.
    Our strategy, however, has been to focus on private sector 
projects because private sector decisions tend to be less 
distorted by political pressures than public sector projects. 
On a level playing field, when the choice comes down to who has 
the better product and expertise, U.S. firms do very well 
against their tough competition, whether it is in Asia, Europe 
or any other region.
    TDA has recently hosted several conferences geared toward 
the environmental sector. Conferences are particularly helpful 
for small business, and many environmental firms fall in this 
category, because their limited business development budgets 
make it difficult for them to identify potential overseas 
opportunities. Our conferences help with this problem because 
we have essentially done the legwork for them.
    Take as an example our U.S. Environmental and Process 
Technologies Conference which we held in Hungary last fall, 
where, for the price of an airline ticket and a nominal fee 56 
U.S. companies were able to meet one on one with local project 
sponsors regarding more than 30 major environmental projects. 
Since that conference, we have already funded half a dozen 
feasibility studies for projects that were profiled at that 
event.
    TDA conferences and the resulting feasibility studies are 
examples of TDA capitalizing on win-win situations. Not only 
are we able to assist regions in addressing their thorny 
environmental problems, we also help U.S. companies establish a 
foothold against their competition in this lucrative market.
    Let me turn for a moment to a newly identified category 
that falls within the environmental sector, emergency 
management and preparedness. Obviously, not all environmental 
calamities are man-made, so we must make efforts to deal with 
natural disasters as they occur. Institutions such as the World 
Bank, tired of watching decades of loans and advances in 
development literally wash away in floods or crumble in 
earthquakes, are seeking solutions. In the last 2 decades, the 
World Bank has lent over $14 billion for disaster preparedness, 
mitigation and response, with this trend expected to increase 
rapidly.
    With key sources of funding such as the World Bank already 
identified, the potential for significant U.S. exports in this 
area is pretty impressive; and U.S. firms are well-positioned 
to take advantage of these opportunities. The United States 
industry is a world leader in emergency management, information 
technology systems, weather forecasting systems, 
telecommunications and a wide variety of emergency response 
equipment. To capitalize on this new sector, TDA has hosted 
several events designed to showcase U.S. equipment and 
expertise, including earthquake reconstruction symposia in 
Turkey and our first major event, the Asia Regional Emergency 
Management Conference.
    This fall, TDA will sponsor a similar event targeted toward 
Latin America.
    TDA spends close to 20 percent of its budget each year on 
environmental projects ranging from water and waste water to 
air quality to industrial efficiency and clean energy. Last 
year alone, we invested $10 million on over 50 feasibility 
studies and other related activities that had a strong 
environmental benefit. This year, in India alone, we will 
probably invest in over a dozen environmental feasibility 
studies. In addition, it is important to note that all of our 
feasibility studies in every sector examine the environmental 
implications of projects in which we invest to ensure that 
where the environment is concerned we do no harm.
    Madam Chairwoman, I would like to briefly discuss a couple 
of examples of TDA's environmental projects.
    The first is a great little success story of a small 
business in California with new, high-tech proprietary 
technology and its efforts to introduce this technology into 
the marketplace. In Venezuela, the government is trying to 
address environmental problems caused by the oil industry, 
particularly in the area of thousands of oil pits. In response 
to this effort, TDA funded a feasibility study for an oil pit 
remediation project in 1993. As a result of the feasibility 
study, a U.S. environmental company teamed up in a joint 
venture with a Venezuelan firm and won the contract to clean up 
one of the oil pits using their centrifuging and stabilization 
technologies. This has generated approximately $5 million in 
exports so far, and since it is viewed as a pilot project we 
expect the exports to go much higher in the years to come. In a 
couple of weeks, 12 Venezuelan delegates are coming to visit 
the United States to look for again U.S. technology for this 
clean-up of the oil pits.
    At the other end of the spectrum is one of TDA's biggest 
success stories. Almost $200 million in exports have been 
associated with the feasibility study we funded for a Mexico 
City air pollution project in the early 1990's. It is no secret 
that Mexico City has faced a serious air pollution problem with 
untold health and economic costs. In the early 90's the Mexican 
government made a major commitment to begin addressing their 
pollution problems. We provided a grant for the major 
feasibility study coordinating Mexico City's pollution 
mitigation effort. This project has been a huge success for 
U.S. exporters while tackling one of the world's most infamous 
environmental problems.
    In conclusion, again I would like to say that TDA's 
environmental projects are win-win situations. Not only do they 
present U.S. firms with lucrative export opportunities, but 
they help developing countries address their pressing 
environmental problems. While U.S. firms are very competitive 
in the environmental sector, we must not lose sight of the fact 
that our companies are facing competition that is heavily 
subsidized by foreign governments. To counter this competition, 
TDA strategically responds to the trends driving environmental 
decisions in the various regions of the world. In this way we 
believe that we are making a significant contribution in 
helping U.S. firms win some of these opportunities, while 
helping countries take important steps on the road to 
environmental progress.
    Thank you very much for your time and attention.
    [The prepared statement of Ms. Bradford appears in the 
appendix.]
    Ms. Ros-Lehtinen. Thank you so much, Ms. Bradford.
    Mr. Renberg.

 STATEMENT OF DAN RENBERG, MEMBER OF THE BOARD, EXPORT-IMPORT 
                   BANK OF THE UNITED STATES

    Mr. Renberg. I assume that you will put the longer version 
in the record----
    Ms. Ros-Lehtinen. Absolutely.
    Mr. Renberg [continuing]. For history and historians. I 
worked on it last evening. I tried to abbreviate it. It was 
down to 4 minutes and 40 seconds in my kitchen. Different air, 
different temperature--I am not sure how it will come out.
    I appreciate you having this hearing. I think it is great 
for the people who visit Washington occasionally in the 
summertime to descend on your offices and ask for the passes--
it is great for them to see an oversight hearing not just 
targeted on legislation.
    The comments you made in your opening statements I 
certainly take to heart--I am sure my colleagues here at the 
table do as well--and it is great to have a chance to think 
about these issues, as opposed to just thinking about a piece 
of legislation that is moving.
    As a member of the board, I have just been there 7 months, 
since I was sworn in, I have what we call the environmental 
portfolio where I divvy up some responsibilities, jointly and 
separately liable for all the activities of the bank, but I 
asked for and have received this chance to work on 
environmental matters.
    To give you an idea of the scope of our involvement, just 
15, 20 years ago an Eximbank board member giving testimony 
wouldn't be able to say the following: We did $17 billion in 
transactions last year, total export value, 2,200 or so 
transactions, 86 percent of which were small businesses. So 
right off the bat this is not the Eximbank of old. I just want 
to draw that to the attention especially to people who aren't 
as familiar with Eximbank as they might be OPIC and TDA.
    Over the past 5\1/2\ years we financed transactions 
including an estimated $2.7 billion in environmental export 
value. This includes the small business sales of air and water 
purification systems as well as multi-million-dollar fossil-
fuel-burning, natural-gas-burning power plants. That really 
ranges--but a total of $2.7 billion over the past 5\1/2\ years.
    A couple of the key points I wanted to leave you with today 
because I think you have had a chance to read the written 
testimony. We have an environmental exports program. We have 
had it since 1994, and we provide enhanced levels of support 
for environmentally beneficial exports, goods and services, 
which is another thing to point out. We are able to maximize 
repayment terms under the OECD guidelines. We can capitalize 
interest during construction, and we can finance a percentage 
of local costs. So we have tried to use market approaches, if 
you will, to get people to think more about buying United 
States environmental technologies.
    I think that the Chair would be particularly pleased to 
learn about our experience with Kimre Incorporated. I am not 
sure if the Chair is familiar with that company. It is in 
Miami, Florida, in your district. Funny how that works, that my 
testimony would reflect that.
    But a small business manufacturer of environmental control 
filters that is using one of our short-term policies to export 
around the world, they offer 60 days open account credit to 
their customers. What this means is they--first of all, they 
can do more exports. But, technically, what we can do is they 
don't need to insist on letters of credit from the foreign 
buyer. This makes it less expensive for the buyer, and they can 
hopefully buy more. Second, domestic banks for Kimre and other 
banks will allow them to get credit. As an assured foreign 
receivable they can get credit and borrow against that. So they 
can grow their business as a result of an export sale that 
really we believe wouldn't happen but for our involvement.
    Congressman Rohrabacher, your comments on democracies and 
dictatorships made me pleased that I had included in my 
prepared text a mention of the southeast Europe reconstruction 
credit initiative that I am working on at the bank.
    In early May, I visited both Prague and Budapest. We 
identified Hungary in particular as a very useful gateway for 
American goods and services, and once again particularly with 
the environment. One thing that the Czech Republic and Hungary 
have in common, they want to enter the EU, the European Union. 
They have to bring themselves into compliance across the board 
environmentally.
    It is a wonderful market opportunity for the United States. 
So what we decided was to--not only did we have the Czech 
Republic and Hungary as potential markets, but all of southeast 
Europe is a potential market. We joined in what is a unique 
marketing relationship with our sister agency, the Hungarian 
Export-Import Bank, where we will jointly identify projects in 
Third World countries, in southeast Europe, Croatia, Romania, 
Bulgaria, where, for instance, a Hungarian company could bid on 
a waste water treatment plant, deciding to incorporate U.S. 
technologies, U.S. goods, U.S. services. The Hungarian Eximbank 
would finance the Hungarian portion of the contract if they 
win, and we would finance the American portion.
    So it is a chance for us to--almost a Trojan horse, if you 
will, but I don't mean in a war-like situation. But we can come 
in using the good offices of Hungarian Eximbank, the Czech 
Export-Import Bank, where we are hoping to do a comparable 
agreement with them. This is an effort to recognize that these 
fledgling democracies certainly need our help to stay--for 
their economies but also for the environment, and I am hoping 
that we can help them grow so they won't go back to the ways of 
old.
    With respect to our environmental guidelines and 
procedures, we place a real importance--our charter places a 
real importance on balancing our mission both to promote 
exports with the need to protect the environment; and we do 
this through our environmental procedures and guidelines. I am 
sure you are all familiar with them. If a project doesn't fall 
within our guidelines, our first response is not to say, hey, 
we are not going to do this. Our first response so to try to 
work with the exporters and the project sponsors to see how we 
can ameliorate the project. What could we do with them so that 
they can avail themselves of the U.S. exports?
    Of course, one potential outcome is that we still consider 
the transaction, declining. But certainly since I have been 
there that hasn't happened. Really, in recent memory what we 
have been able to do is to lift up the boat, so to speak.
    One example, in Venezuela, they don't have--they did not at 
the time--I can't tell you when this was--they did not have 
guidelines on NOX emissions nitrogen oxides. As a 
result, a foreign buyer, a power plant, wasn't forced to 
content with that issue. They could retrofit their power plant.
    What we did is we came in, as I understand, and said, look, 
we have an environmental exports enhancement program. If you 
decide to put in special low NOX burners, even 
though you don't have to under host country law, we can finance 
that. It meant that, ultimately, when Venezuela does get around 
to adopting NOX regulations, they would already be 
in a position to comply. So it was I think a real win-win not 
only for the people of Venezuela but for the American exporter. 
That wouldn't have happened if our engineering division didn't 
take the time to work with the project sponsor on it.
    My last point I would make is that the OECD is actually 
meeting--the exports credit group of the OECD is meeting this 
week in Paris. It is a very timely hearing with respect to what 
other ECAs, export credit agencies, are doing with respect to 
their own environmental procedures. Most of them don't have 
guidelines such as ours. We are seen--I think the NGO community 
would say we are seen as being in the forefront on this fight.
    What I can report is we are making incremental progress at 
getting the G-7, ECAs and the other OECD ECAs to move forward. 
Right now, we have information exchange, but that is the first 
step. We are not in a position to dictate what these other 
country sovereign nations will do. What we are trying to do is 
lead by example and show that you can help your exporters get 
the job done and get more sales without necessarily having to 
hurt the environment.
    With that, I would be more than happy to answer your 
questions.
    [The prepared statement of Mr. Renberg appears in the 
appendix.]
    Ms. Ros-Lehtinen. Thank you, Mr. Renberg.
    Following up on what you had said in your statement about 
the policy you have about declining certain projects, that 
says--your environmental policy description states, Eximbank 
will decline to finance an export transaction if the board of 
directors determine that it is appropriate in light of the 
project's serious adverse environmental effects. And you had 
given us some examples, but what is considered serious enough 
to prompt the denial and what adverse environmental effects are 
deemed acceptable by your policy?
    Mr. Renberg. I will tell you, Madam Chair, I would be more 
than happy to supply the Subcommittee for the record with a 
copy of our environmental procedures and guidelines. We are 
really out there with respect to our ability. We can quantify 
NOX, SO2. We can really--I could give you 
that, but I don't have it off the top of my head.
    Ms. Ros-Lehtinen. So you have sound science to back up.
    Mr. Renberg. We have sound science, quantifiable guidelines 
with respect to specific emissions, for instance. We also have 
a more of a broad--we take into account sociocultural effects.
    For instance, if a population is going to have to be 
shifted--you know, they are going to have to be forcibly moved 
by an environment, we take that that account. What efforts are 
there going to be to mitigate through compensation and other 
means? I think we are leading the league, so to speak, on 
having quantifiable emissions guidelines.
    I would be more than happy to provide them for the record.
    Ms. Ros-Lehtinen. How do your board and your agency 
complement the work of the other agencies that are involved in 
helping U.S. businesses abroad? Especially U.S. environmental 
exporters.
    Mr. Renberg. Sure. Well, one thing I didn't mention on your 
first question, Madam Chair, would be that since I have been 
there we have not declined anything for environmental reasons. 
In fact, just last week we approved a transaction that I would 
say had some environmental issues. So there is not much in 
recent memory where we said no to something. So the board of 
directors doesn't often have to do it. We try to work with the 
project sponsors, as I said.
    With respect to how we work with the other groups, we like 
to say we are the agency with the checkbook for American 
businesses that want to export. We have--thanks to Congress's 
appropriation, we have the ability to underwrite insurance and 
to direct loans but preferably loan guarantees. As you know, we 
don't compete with the private sector. We price things 
accordingly. I would say that sometimes there are projects 
where we work with OPIC jointly financing some power plants, 
clean natural gas in Turkey I think earlier this year.
    With respect to TDA, one of my colleagues, Craig O'Connor, 
attended that Hungary environmental conference and came back 
with loads of leads. So, from my perspective, we work 
harmoniously with them.
    Ms. Ros-Lehtinen. Thank you. Would you care to add anything 
about the agency's coordinated efforts?
    Ms. Callear. Sure. I think the way that we look at it at 
OPIC is that the first stop is TDA, because they are involved 
in the feasibility study end of things when a company is just 
beginning to think about a prospect; and the next stop is 
Eximbank, because you are going to generally export before you 
are ready to invest and the first step is to have a product and 
try to test it out in the marketplace by continuing to be here 
in the United States and to export abroad.
    Finally, if you are successful enough, your investment may 
be such that you need to expand your presence and you need a 
presence in the market that you are going to serve, and we are 
involved in helping finance that long-term investment overseas.
    As was stated, because Eximbank's focus is on exports and 
our focus is on investments, sometimes we can be side by side 
in the same project. We are financing it from the investment 
standpoint, and Eximbank is financing it because perhaps there 
are some GE turbines that are going into that power plant, and 
hopefully TDA did the feasibility study to start with.
    Ms. Ros-Lehtinen. Great.
    Ms. Bradford.
    Ms. Bradford. We are trying to open up the opportunities in 
the largest projects in developing countries for U.S. firms. At 
that very early stage in the project development, the 
feasibility, prefeasibility study stage, nobody knows where the 
financing for the project itself is going to come from. If U.S. 
investors and U.S. manufacturers get involved in building the 
project, likely, OPIC and Eximbank financing will be there. But 
many of the projects are financed by the World Bank, the host 
governments themselves and private financing, and we want to 
make sure that those projects go forward with financing and 
that it isn't tied to some other nationalities and so that the 
U.S. exporters have a chance to sell into them.
    Ms. Ros-Lehtinen. Thank you.
    Mr. Menendez.
    Mr. Menendez. I want to make a comment to my colleague from 
California. I share some of his concerns on the question of the 
democracy aspects of our trade and the engagement with 
nondemocratic countries. I know that the Chairlady's focus 
today was the environment, and so I think many of us are 
focused that way.
    I would love to see a session on--a hearing on trade and 
democracy issues as well. We look forward to that opportunity.
    Let me just--one of our panelists later will say that any 
linkages with our trade issues and environment are possibly 
doomed, that the World Trade Organization creates some serious 
issues for us. You have all spoken about what you have done 
positively in this regard. Have we put you at a competitive 
disadvantage--since you are all there to promote U.S. interests 
abroad in terms of export promotion and assisting U.S. 
companies being able to export their products and services 
abroad, and ultimately that creates opportunities here at home, 
have we put you at a competitive disadvantage by the 
congressional mandates that we have provided in legislation to 
have you consider environmental issues in the process?
    Ms. Callear. I would say that was the fear of some American 
companies initially, but the reality is that today the 
environment is so much a part of the business that is done here 
in the United States that, when it is taken overseas, it is 
really not as great a leap as one might think. The concern, 
however, is that their competitors may not have the same rules 
that have to be followed if they are going to the equivalent of 
their Eximbank or OPIC for financing; and that is the danger 
and why it is important for us to continue to work on this 
concept of trying to level the playing field for the standards. 
This is what we have tried to do with our political risk 
insurance counterparts and others who are in the development 
financing business, as opposed to just the export side.
    It is not what Congress has done, I think it is what our 
counterparts have not done in living up to the responsibility 
that we all acknowledge we have to be sure that what we are 
doing in these developing countries is something that we can be 
proud of and that it is going to be beneficial and 
developmental, as opposed to harmful.
    Mr. Menendez. Doesn't that speak to creating the greater 
linkages that we would like to see in order to level that 
playing field and ensure that American interests abroad are 
competitive in the context of others meeting some of the same 
standards? As long as that doesn't happen, we will consistently 
have a set of problems in this regard?
    Ms. Callear. I think that is an issue that is there and has 
to be addressed. I think the problem that will develop is that, 
ultimately, if the playing field is not level, American 
companies are creative and they will find other ways to 
continue to do business, but it might be at the expense of U.S. 
exports. And that is the real fear--that we all learn how to 
work around the system if we have to, although it is not our 
preference. Certainly any company here in the United States 
would prefer to be using U.S. suppliers, but they do want that 
level playing field.
    Mr. Renberg. I don't think that Congress has disadvantaged 
American businesses with our current mandate as I have seen it 
in the 7 months I have been at Eximbank. I have seen 
environmental benefits occurring, mitigation of adverse impacts 
as we saw in a number of board transactions. We are up for 
reauthorization next year. After I have more time, I would be 
glad to chat with you on that issue.
    The real issue is, can we get other members of the G-7 to 
stay with the program? The Cologne summit, they have spoken a 
good game about common--moving forward to their common 
environmental guidelines. Getting them to act has been tougher 
and slower going.
    I can't wait to see what happens in Paris this week with 
respect to the OECD negotiations. There is a Congressman 
Menendez in France or Germany, and I would hope----
    Mr. Menendez. Probably in Spain.
    Mr. Renberg. Quite possibly--I would hope that your 
counterpart over there would care. To the extent that you can 
raise the issue with your counterparts, it would be so helpful.
    Mr. Menendez. With reference to your discussion about that 
pipeline development in Brazil and Bolivia and the public 
participation, how does that actually come about? How does that 
take place?
    Ms. Callear. Well, it takes place person by person, step by 
step. It is a very labor-intensive process. Enron Corporation 
estimated earlier in this implementation phase that they had 
upwards of 200 meetings individually with indigenous groups, 
members of communities, various NGO's, government officials on 
the ground in the various communities that are affected along 
the pipeline. The work is at the grassroots level.
    At the more macro level, what we do is make sure that we 
post on our Internet site when we are about to do a particular 
project, make the environmental impact assessment available to 
anyone in the public who requests it, and provide an 
opportunity for comments. In fact, before every board meeting 
we have a public hearing so anyone who wants to come and talk 
to us about the project and give us their ideas or suggestions 
can do so. It becomes a very iterative process, and I think a 
dialogue has gone on in this particular case because it is a 
large pipeline, and a lot of people are affected.
    Mr. Menendez. But for the requirement for that 
consultation, we would have less of an empowerment and less of 
a democratization for those individuals, would we not?
    Ms. Callear. You have hit the nail on the head. As 
Congressman Rohrabacher was talking before, having that kind of 
public debate and accountability is the first step to 
democratization. It empowers people, and they have a tool to 
make the changes needed in the country. Environmental standards 
are good, but having accountability and transparency is really 
key.
    Mr. Menendez. Thank you.
    Ms. Ros-Lehtinen. Thank you.
    Mr. Cooksey.
    Mr. Cooksey. Thank you, Madam Chair.
    Ms. Callear, tell me if an American company went to 
Venezuela and started a business, took some of their technology 
there and they did not go through OPIC, what would be the 
ramifications of it on environmental issues, bad loan, on the 
political risk insurance?
    Ms. Callear. Clearly we believe we are adding value to the 
transaction, because chances are that, at this point in time, 
the standards that might apply in Venezuela--and I think we 
just heard an example from Eximbank about a similar case--might 
not be at the level that we require. We tend to follow the 
World Bank guidelines and supplement them when necessary.
    This project has better environmental impacts because we 
have been engaged and working with the company to apply those 
standards. Certainly from a political risk standpoint, without 
OPIC that company has less protection if there are changes in 
the government's viewpoint on the particular project, if there 
is some difficulty on down the road, some contract that has to 
get renegotiated, some concerns that are raised.
    Mr. Cooksey. So if they did not go through you, they would 
not have any opportunity to take advantage of the political 
risk insurance?
    Ms. Callear. Certainly they would not have the U.S. 
Government behind them.
    Mr. Cooksey. Our largest source of oil for gasoline is 
Venezuela and Mexico, not the United States. It is not the 
Middle East. The largest retailer of gasoline products in this 
country is CITGO, and CITGO's major stockholder is the 
Venezuela government. Chavez is the man that led an overthrow 
of the government a few years ago, and then he was elected 
through a democratic process. That directly relates to what you 
are talking to.
    I couldn't help but notice that Brazil in your testimony is 
replacing diesel fuel with natural gas, and that is the right 
and proper decision, and that has not been done in this 
country. In the energy crisis in this country, the Department 
of Energy or some of these politicians--and you know how I rail 
against politicians--they have dictated that we would do 
certain things in this country.
    For example, in my State, they mandated a coal-burning 
power plant and energy plant, and we have these trainloads of 
coal coming in, while the plant is located on one of the 
largest reserves of natural gas in the United States. When all 
of you Northeasterners get cold in the winter and are 
complaining about your high heating oil, you should be buying 
natural gas because it is better burning fuel, it is 
environmentally the best. But that decision was made by a bunch 
of politicians 20 years ago. Of course, none of us would make 
bad decisions like that.
    The other thing that I am glad to see is that our 
technology is being exported over there with energy. They are a 
good company in Bulgaria. And, again, I would emphasize 
something that Mr. Rohrabacher emphasized, that Bulgaria was 
running their government on a flawed political policy and that 
flawed political policy, which had no democracy, led them to 
make a lot of bad decisions from an environmental standpoint 
and from an energy standpoint, and they are paying the price 
right now. I think some of the worst environmental abuses 
occurred in these countries.
    Ms. Bradford, I was glad to hear you say that you are aware 
when market-based decisions prevail over political decision the 
outcomes are better. I think that is true. You said that 
private sector decisions are usually better, and I think that 
is certainly the case--not that politicians don't always have 
this clairvoyant ability that we think that we have. Anyway, it 
is reassuring.
    Mr. Renberg, sometimes I have some question about the 
Export-Import Bank and the approach that is used on some of 
those loans in countries, but you were reassuring, and I am 
sure that you are making economic statements and not political 
statements--and good banking decisions, too.
    Thank you very much. Your testimony was good. There seems 
to be a game plan. I think that will be good for us and good 
for the rest of the world and the environment.
    Ms. Ros-Lehtinen. Thank you, Mr. Cooksey.
    Mr. Rohrabacher.
    Mr. Rohrabacher. There is one thing worse than a politician 
and that is them who holds power without having been elected 
through a political process.
    Dan, did you say that there have been no requests for loans 
turned down for environmental reasons by the Export-Import 
Bank?
    Mr. Renberg. Not since I have been there. Historically 
there have, but not since I have been there.
    Mr. Rohrabacher. Historically there have. You mean the 
Three Gorges Dam project in China?
    Mr. Renberg. Yes.
    Mr. Rohrabacher. Do you know of any other contracts with 
your organizations that have been turned down for environmental 
reasons?
    Ms. Callear. On a regular basis, people come to us with 
large dam projects, and we are not able to do those because of 
the environmental impacts.
    Mr. Rohrabacher. Yes, those dam projects.
    Ms. Callear. If someone proposes a power plant that can't 
meet our emissions standards, unless they are willing to apply 
the appropriate technology, we are not able to do them.
    Mr. Rohrabacher. Do you have some examples of people who 
have been turned down for environmental reasons?
    Ms. Bradford. We turn down a lot of projects for a lot of 
reasons, and if there is an environmental problem that is so 
big, it wouldn't even come up from the staff as a 
recommendation.
    Mr. Rohrabacher. Early on we mentioned that we should not 
be financing with any tax subsidy any project that 
environmentally would not be permitted in the United States. Do 
you have that standard? Or is that something that has not been 
codified by your operations?
    Ms. Bradford. Would we finance a feasibility study for a 
project that would not meet the environmental standards of the 
United States, is that the question?
    Mr. Rohrabacher. Correct. In other words, if a project is 
not possible in the United States because of our environmental 
quality, our laws, etc., and regulations, are any of your 
organizations involved or can you legally be involved in 
providing funds and support and subsidies for that very same 
project overseas?
    Ms. Bradford. I don't know on an exact par, sir, how that 
would work. At the TDA level, when we are talking about the 
prefeasibility and the feasibility study stage of a project on 
the drawing boards, every step when deciding whether we provide 
financing for the feasibility study, we are trying to frame up 
the environmental issues. You are starting to frame up those 
issues and not apply the standards. So I----
    Mr. Rohrabacher. That is still a no.
    What about you two guys?
    Ms. Callear. Our standards basically are the World Bank 
standards, and so what I would call them are international 
standards. Many of them have been based over the years by 
reviewing the best standards that exist in the world, which 
usually are the U.S. standards. But in terms of the actual 
substantive levels in every category, because U.S. laws were 
written for the U.S. environment and the conditions that 
prevail here, which may or may not be the same in the 
developing countries, but they are the highest standards.
    Mr. Rohrabacher. In my opening statement I made it clear 
that people in democratic countries can set their own 
standards, but that is different. We are talking about setting 
standards for the use of our tax dollars. American people have 
a right to set a standard for the use of their tax dollars in 
subsidizing projects, at least that they are consistent with 
our values or consistent with our standards of environment or 
other types of standards. But that might be a good piece of 
legislation to consider perhaps.
    Mr. Renberg. If I could respond along those lines, 
Congressman, our guidelines I believe were done first in 1992--
obviously, 1988 or 1992. They were recently updated in 1998. As 
part of that process, there was significant public 
participation, exporters, NGO's, dissemination very wide, and 
we--the good part, they sunset. We did not get a permanent 
guideline in place. They sunset at some point in the next year; 
and as a member of the board with this portfolio, I intend to 
work closely----
    Mr. Rohrabacher. Let me be more specific then. Are we 
financing in any way--have we financed in the last 10 years the 
construction of nuclear power plants overseas? No nuclear power 
plants? Nothing from your institutions on that?
    Mr. Renberg. Since I have been there, we did the safety 
upgrade in Lithuania.
    Mr. Rohrabacher. I have this feeling that some money that 
went into North Korea came from us or some of these Japanese 
clients.
    Again, I personally am not necessarily against nuclear 
power, but I do know that you can't build nuclear power plants 
in the United States. And if that is the case because of our 
standards we should not be subsidizing that to other countries.
    I have another question here about--what relationship do 
you guys have with the World Bank in terms of--you are totally 
separate? You do join in joint projects? Your organization does 
feasibility sometimes with the World Bank, doesn't it?
    Ms. Bradford. Yes. But the World Bank is a multilateral 
development institution, and the United States is a member. TDA 
does have grant funding at the bank in a trust fund that is 
available to be used in the exact same way that the TDA core 
budget is to be used.
    Mr. Rohrabacher. Are there companies--to your knowledge, do 
you know of companies that actually leave the United States and 
set up factories in places like China in order to escape 
environmental regulations here?
    Ms. Callear. If there were companies doing that we would 
not be able to assist them, because we have a provision that 
states that we cannot support a runaway project. We are not 
active in China now anyway.
    Mr. Rohrabacher. My question is whether or not there are 
companies that close up shop here and set up in China, and that 
is not the discussion of today. If there are companies like 
that, they do get support from the World Bank, do they not, 
maybe if they go to China or Vietnam?
    Ms. Bradford. Those that TDA funding goes into, bank 
projects, we look at that runaway shop issue at each stage of 
the vetting; and we would not put any TDA funding into a 
project that had that element.
    Mr. Rohrabacher. Your testimony today has been basically 
talking, and I would say justifiably, tooting your own horn 
about the proactive way that you have been to the environment; 
and that is very good. They say here in Washington if you don't 
toot your own horn somebody is going to come along and turn it 
into a spittoon.
    I am very concerned about maybe some of the things that are 
not proactive but instead policies that are permitting things 
that go ahead and happen, you want to happen, but are just 
going through the system, people using your systems to do 
projects overseas that they couldn't do here. Of course, 
philosophically, I oppose the idea that we should be 
subsidizing people doing business overseas--but it makes it 
worse when they do things that we don't permit in our own 
country.
    Thank you.
    Ms. Ros-Lehtinen. Thank you very much for your testimony 
today. We thank you for your participation.
    To complement the expertise of our first panel, I would 
like to introduce two gentlemen who have been in the field and 
understand the problems and prospects of relations between the 
environmental movement and the international trade community.
    First, I would like to introduce Mr. Paul Joffe, the 
Associate Director for Advocacy at the National Wildlife 
Federation's Office of Federal and International Affairs. A 
former Acting General Counsel of the Department of Commerce and 
Deputy Assistant Secretary of Commerce for Import 
Administration, Mr. Joffe is a former recipient of the Navy 
Achievement Medal for his years of service at the U.S. Navy JAG 
Corps. We thank you for being here today.
    He will be followed by Mr. Myron Ebell, the Director of 
Global Warming and International Environmental Policy with the 
Competitive Enterprise Institute. In addition, Mr. Ebell 
currently chairs the Cooler Heads Coalition, a subgroup of the 
National Consumers Coalition that focuses on the issues of 
climate change. A former policy director at Frontiers of 
Freedom, Mr. Ebell is an accomplished essayist whose writings 
have appeared in a number of nationally respected publications.
    I thank you gentlemen for your testimony. We look forward 
to hearing your insights, and your full statement will be 
entered into the record, so if you would feel free to summarize 
your remarks. Thank you.
    Ms. Ros-Lehtinen. Mr. Joffe, let us begin with you.

   STATEMENT OF PAUL JOFFE, ASSOCIATE DIRECTOR FOR ADVOCACY, 
                  NATIONAL WILDLIFE FEDERATION

    Mr. Joffe. Thank you very much, Madam Chair. And I want to 
commend the Chair and the Ranking Minority Member for their 
very constructive statements and in fact support for 
environmental legislation such as the conservation funding 
legislation, and I would like to salute the Ranking Member for 
being from my home State of New Jersey.
    Ms. Ros-Lehtinen. There is another Mr. Menendez in Spain, 
you know.
    Mr. Joffe. Without a healthy global environment, any one 
nation's prosperity is in jeopardy.
    The evidence of the need to ensure that trade and 
environment policy are mutually supportive continues to 
increase. At the same time, public confidence in trade rules 
and in multilateral institutions has been shaken. We believe 
this is because of a growing sense that these institutions 
don't reflect the public interest regarding the environment, 
but we are optimistic that that can be remedied because we 
believe that there are ways to do that, some of which have 
already been explored today.
    I would like to suggest three components of U.S. trade 
policy we believe can advance both trade and the environment 
simultaneously so that they are mutually reinforcing. I am just 
going to touch on and summarize some items in the prepared 
statement for the record.
    The first of the three is improved openness and 
accountability both in our own trade institutions and in those 
multilateral trade institutions. For example, prior to any 
action initiated by the United States against a foreign 
environmental measure, we believe that other agencies of the 
U.S. Government and the Congress and the public should be 
consulted. That is not something that has been fully done in 
the past, and we think that would be an improvement, and that 
is an example of a process improvement that we mention in the 
statement.
    The second category of recommendations we have deal with 
ensuring that trade liberalization and environmental protection 
go hand in hand, and we reference a number of improvements here 
such as the need for recognizing legitimate national and 
international environmental standards. Contrary to what some 
have suggested, this is not some novel innovation. The charter 
of the GATT going back to 1948 contains a provision which 
allows for that type of consideration, and there has been some 
debate over whether it is being applied properly, but there is 
a long-standing principle, not a terribly novel innovation. In 
fact, it is something that happens within the United States. 
There is a leading Supreme Court case in which the 
environmental rules of the State of Maine were sustained 
against claims that they somehow violated free trade within the 
United States. So that balancing goes on under free trade 
regimes classically.
    The third area in which we make recommendations is for 
improving global consensus. A major lesson of the Seattle 
ministerial was, as a consensus-driven institution, the WTO 
needs to find common ground that unites the interests of the 
industrial world with those of the developing world. We 
recognize that liberalized trade abroad can be vital to 
securing the means for less developed nations to implement 
policies for sustainable development and environmental 
protection. But these results are not a given. They do not 
occur automatically.
    And glancing at the statement of Mr. Ebell, who is going to 
follow me, we would not agree with the idea that one somehow 
has to go first; and perhaps we can discuss that in the 
question period. We believe that they go together. They are 
mutually reinforcing. And indeed the sustainability aspect is 
an important aspect of development, that you really are not 
going to have successful development unless it is sustainable. 
So we have proposed in recent months to both the administration 
and Congress that there be a systematic approach to reaching 
out to developing countries and to working with them to improve 
the capacity of those countries to help themselves; and we have 
proposed that that include evaluation of their needs, 
significant incentives and financial assistance to those 
countries, milestones and reporting and evaluation of results.
    In conclusion, international trade is suffering a crisis of 
eroding public confidence. It is in the interest of everyone 
who wants trade to succeed to establish public confidence in 
the institutions and policies governing trade.
    We are optimistic that this is possible because we believe 
that the agenda we have set forth is a straightforward, common-
sense agenda that can provide the basis for consensus, not one 
that is terribly difficult if all concerned will work together. 
Thank you.
    [The prepared statement of Mr. Joffe appears in the 
appendix.]
    Ms. Ros-Lehtinen. Thank you, Mr. Joffe.
    Mr. Ebell.

    STATEMENT OF MYRON EBELL, DIRECTOR, GLOBAL WARMING AND 
  INTERNATIONAL ENVIRONMENTAL POLICY, COMPETITIVE ENTERPRISE 
                           INSTITUTE

    Mr. Ebell. Thank you, Madam Chair; and thank you for 
inviting me to testify today. My name is Myron Ebell. I will 
just try to highlight a couple of aspects of my written 
testimony.
    It seems to me that there is always a temptation to try to 
make trade into some--to try to moralize it, moralize it for 
whatever goal particular a group has. Now, some religious 
communities over the centuries have tried to do this within 
their own community, and that is their right. But to 
memorialize trade and make it compulsory for all of us is 
problematic, and that is what is at stake with the World Trade 
Organization and the attempt to link the environmental and 
labor issues into them. Because, of course, each one of those 
interests, the environmental interests and the labor interests, 
are an attempt to moralize trade on the basis of some interest 
of that group.
    I think this was best put some time ago by Professor Deepak 
Wol, one of the world's largest development authorities. He 
teaches at UCLA but is a native of India. He was debating Ralph 
Nader on television, and he turned to him and said, so, Ralph, 
when you go to the butcher do you inquire as to the background 
of the butcher who is providing your meat? And Ralph Nader was 
apparently nonplused. And Deepak explained, what you are 
offering for the international trading system should be applied 
in your own life. That is, do you inquire as to whether this is 
a good family that is providing this meat and look at the farm 
that it has come from and if you agree with them politically 
and religiously and everything.
    But that is not the purpose of trade, of course. The 
purpose of trade is to provide consumers with the cheapest and 
best goods possible. And there are many, many protectionist 
interests in the world that would like to do down consumers, 
make goods less affordable and of less quality by protecting 
their own special interests; and that is the battle that the 
WTO has all the time. And so, therefore, I would like to 
suggest that importing two groups of protectionists into the 
WTO is a recipe for disaster, labor protectionist and 
environmental protectionist, because each one of these groups, 
their recipe for everything is to restrict trade in some way. 
That is in the way that they like.
    Now, they have some charges against the WTO, that it is 
undemocratic, unaccountable and secretive and that it overturns 
national environmental standards; and I would like to address 
those.
    The WTO is a club of sovereign nations that have joined up. 
Each one of these sovereign nations has a role to play and can 
negotiate there. Other groups that are not nations, such as the 
environmental groups, or, in the case of my organization, free 
market groups, we have every right to make ourselves heard 
within our own deliberative processes in our countries. And we 
do that.
    Now, I should say that the environmental groups usually 
win, and the free market groups usually lose, but that is the 
way that the game is played. But what is it to import these 
groups and to give them a seat at the table, at the WTO? Well, 
it is to change the club into something very different, 
something that is not accountable to anyone. Because 
environmental groups, labor unions, even free market public 
policy institutes are not accountable. They work in secret. 
They are not democratically elected; and, therefore, they 
should mind their own business and stay out of the WTO. Now, 
they can make their views known, but they don't have a place. 
They are not members of the club, and they should not become 
members of the club.
    Now, of course, some deliberations are secretive. All 
international negotiations have periods that must be secret 
because the nations that are doing deals are giving up some of 
the interests of some of the people in their own country in 
order to further what they feel is a larger national interest; 
and, of course, they have to be able to do that without having 
the world scrutinizing them. And I think opening up the 
deliberative processes of international negotiations is the way 
to spread strife and probably warfare, certainly civil warfare 
in the world. The idea that WTO overturns national and 
environmental standards, this is utterly false. The WTO in 
every one of its dispute resolutions has upheld national and 
forbidden extraterritoriality, and that is that we can export 
our standards and force some other country to abide by them as 
a condition of trading with us.
    So it seems to me that all of the complaints about the WTO, 
which is certainly not a perfect organization, are largely 
baseless.
    I would conclude with a couple of remarks with the 
practical problems of the environmental linkage, and I would 
like to quote from an editorial that appeared in the 
International Herald Tribune right before the WTO met. It is by 
Barry Akobundu, who is a colleague of mine at CEI who is an 
agricultural economist by trade and a Nigerian by birth. This 
is what she said from her perspective as someone from a poor 
and developing nation:
    Increases in wealth will first provide families with basic 
necessities and only later with the disposal income to demand 
improvements in the environmental quality. Consideration of 
environmental issues in WTO trade talks threatens to restrain 
trade and progress in the 48 sub-Saharan countries. Detractors 
of free trade point to environmental degradation as a 
consequence of trade and want this to be a priority issue in 
trade negotiations. They would condition trade with countries 
of the region on environmental policies. Such linkage would 
make an acceptable set of environmental policies precede 
increased access to the markets of developed countries. But in 
a region in which the basic necessities of life are luxuries, 
that is at best unrealistic and at worst inhumane.

    I think that fairly summarizes the situation between our 
environmental standards and those that are possible in the rest 
of the world.
    Finally, I would bring up something that has only very 
marginally come up so far today and that is the claim that, 
without the ability to export our environmental standards and 
force them upon other countries, we will have a race to the 
bottom. That is to say, industries will move to those areas of 
the world that have the lowest environmental standards.
    Well, first, there is absolutely no evidence of this, no 
factual evidence; and I have searched quite a lot.
    Second, the environmental groups that push for 
environmental legislation in this country continually talk 
about how it won't be costly. That is, it will not impact 
industry in the way that industry claims that it is going to 
raise our cost of production. They continually say no, no, no, 
it will actually improve your performance by spending this 
money on pollution controls.
    So I think I would conclude by saying that the threat to 
the world trading system is real. It is very serious. It is 
called linkage, and thank God for the developing nations of the 
world which almost unanimously and steadfastly oppose linkage 
because they understand what is at stake.
    [The prepared statement of Mr. Ebell appears in the 
appendix.]
    Ms. Ros-Lehtinen. Thank you, Mr. Ebell and Mr. Joffe, for 
both of your testimonies. As you heard, the bells have rung, 
and we have a series of four votes, so that will keep us on the 
floor for a substantial period of time.
    I would like to recognize Mr. Menendez to ask a concluding 
question, and I have a few questions, but I will give them to 
you in writing and perhaps you can respond.
    Mr. Menendez. Thank you. I also have more questions than I 
could ask, so I will submit them for you to answer as well.
    Let me get this straight. The purpose of trade--I was 
trying to write your words down as you said them--is to obtain 
the cheapest and best goods possible. Is that a fair 
characterization of what you said?
    Mr. Ebell. Yes.
    Mr. Menendez. So it is also fair to say that that purpose 
would be achieved regardless of how we seek to accomplish that 
goal?
    Mr. Ebell. Could you repeat that?
    Mr. Menendez. The purpose of trade is the cheapest and best 
goods possible. It is the cheapest and best good possible 
however we can achieve that?
    Mr. Ebell. As long as we pay for them, yes.
    Mr. Menendez. That would be the only qualifier?
    Mr. Ebell. There may be some slight other qualifications, 
but yes, in a market economy, when you pay for a product, you 
get it.
    Mr. Menendez. So if the price of paying for that is our 
only qualifier, and listening to your comments about moralizing 
trade, I guess then it is OK to trade with those countries that 
imprison their people and use their prisoners for slave labor. 
I guess that it is OK to trade with those countries that 
Chernobylize their citizens; and I guess it is OK to trade with 
those countries that, in fact, would use children to create 
products. Because those ultimately would be the cheapest 
possible products that we would obtain and, of course, we would 
pay for them, but that would be OK?
    Mr. Ebell. Yes, it seems to me that we do all of those 
things now that you have just listed. We do trade with 
countries that do all of those things.
    Our belief is, first of all, that it benefits consumers in 
this country.
    Second, that it is up to those countries to decide what 
sort of political system they want to have and what sort of 
laws governing production they want to have.
    Third, it is the belief I believe of virtually every trade 
economist in the world that trade with repressive regimes has 
the effect of both helping the poorest people in those 
countries and also has the effect of liberalizing those regimes 
over time. This is not a hard-and-fast rule, but I think the 
people who have looked most seriously believe trade does good.
    Mr. Menendez. I have looked at it seriously, and I beg to 
differ with you. I don't believe that Americans generally want 
the cheapest price at any cost, including the sacrifice of a 
child or the imprisonment of people in order to achieve a 
benefit here in the United States. If they truly knew that was 
the case, I would venture to say on that score, or having a 
cleaner environment that they would mutually enjoy, that they 
would pay somewhat more not to get the cheapest product to 
their table or to wear a clothing article in that regard.
    The suggestion that trade alone is going to lift all tides 
for the people here in this hemisphere of which nearly 50 
percent live below the poverty level--trade has broadened the 
gulf between those who already have within those societies and 
those that do not. If you do not match it with development 
assistance in addition to trade, you do not lead to where you 
need to be.
    I am really concerned about the view that neither 
environmental issues nor some of the issues in terms of labor--
that our view is that, at any cost, as long as we pay for it 
and the cheapest price, if that is the standard of the United 
States of America, that is in my mind an appalling standard and 
one that does not sustain itself over time for our country for 
a policy and ultimately for the sustainability. I am not among 
those marching on the streets of Seattle who drowned you out, 
but I do believe that you cannot say that the only equation is 
the cheapest price. The cheapest price does not promote 
democracy, it does not promote sustainability and----
    Mr. Ebell. You have made several points.
    Ms. Ros-Lehtinen. Mr. Ebell, I am afraid--if you can just 
take 1 minute each. We have 5 minutes to vote.
    Mr. Ebell. First, I just suggest that trade embargoes don't 
have much impact. Are we hurting Saddam Hussein or the poorest 
people in Iraq? We are hurting the poorest people in Iraq.
    Second, I have no problem not to buy products that are 
produced in countries which produce them in ways that I don't 
agree with. I make many of those choices in my personal life. 
But I don't want my country telling me what I can and cannot 
buy. I want that choice.
    One more point. There are many other international forums 
for pursuing human rights, labor and environmental issues. We 
have hundreds of treaties governing national environmental 
issues. Don't mix up trade with environment.
    Mr. Menendez. Thank you. Thank God you are not in a country 
where you are sitting in jail.
    Ms. Ros-Lehtinen. Mr. Joffe.
    Mr. Joffe. It is not the law of the GATT or the charter of 
the WTO that anything goes. There are provisions in the charter 
that provide for exceptions, forced labor and for immoral 
aspects of trade. The debate is somewhere else. The debate is 
how those are being interpreted. And the only other point in 
the shortness of time that I would say is that it is impossible 
to avoid some discussion of this in the WTO because the 
existing environmental rules are sometimes challenged under the 
WTO charter, and it is at that point that a deliberative 
process has to take place as to whether the exceptions apply. 
So you can't extricate them, but if the countries of the world 
can move in another forum and provide a rule that applies to 
particular cases, we are all for that.
    Ms. Ros-Lehtinen. Thank you, Mr. Joffe; and thank you, Mr. 
Ebell.
    The Subcommittee is now adjourned.
    [Whereupon, at 3:50 p.m., the Subcommittee was adjourned.]
      
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                            A P P E N D I X

                             June 21, 2000

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