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Isn’t it ironic that the proponents of “free trade agreements” likeCAFTA are lining up squarely behind a bill like this that threatens a trade war with China, and at the least calls for

be reason to stop and think about this, but we do not look at thatparticular article too often any more.

Also for moral reasons, I object to this Even if we accepted theidea that we should interfere and be involved in this type of activ-ity, it is unfair because the little guy gets squeezed and the big guygets all of the money It is not morally fair because itcannot be

One thing that annoys me the most is when Members come tothe floor and in the name of free trade say we have to support theExport-Import Bank This is the opposite of free trade Free trade

is good Low tariffs are good, which lead to lowerprices; but subsidies to our competitors is not free trade Weshould call it for what it is We have Members who claim they arefree traders, and yet support managed trade through NAFTA andWTO and all these special interest management schemes, aswell as competitive devaluation of currencies with the notion that

we might increase exports This has nothing to do with free trade

I am a strong advocate for free trade, and for that reason I thinkthis bill should not be passed There are good economic reasonsnot to support this Because some who favor this bill argue thatsome of these companies are doing risky things andthey do not qualify in the ordinary banking system for these loansand, therefore, they need a little bit of help That is precisely when

we should not be helping If there is a risk, it is telling us there issomething wrong and we should not do it It is transferring the lia-bility from the company to the taxpayer So the risk argument doesnot hold water at all

The other reason why economically it is unsound, is that this is

a form of credit allocation If a bank has money and they can get

a guarantee from the Export-Import Bank, they will alwayschoose the guarantee over the nonguarantee, so who getssqueezed? The funds are taken out of the investment pool The lit-tle people get squeezed They do not get the loan, but they aretotally unknown Nobody sees those who did not get a loan All

we see is the loan that benefits somebody on the short run Butreally in the long run, it benefits the big corporations Many times

it doesn’t even do that

Take a look at Enron We have mentioned Enron quite a fewtimes already If we add up all of the subsidies to Enron, it adds up

to $1.9 billion That is if we add up the subsidies from OPIC aswell And look at what Enron did They ran a few risks,and then they lost it Who was left holding the bag? The taxpayers.Madam Speaker, I strongly urge a no vote on this bill If Mem-bers are for free trade, they will vote against this bill, and will votefor true free trade

Don’t Antagonize Our Trading Partners

Congressional Record—U.S House of Representatives

April 1, 2003

Madam Speaker, this week we will be working on the $75 lion supplemental appropriation to pay for the war Financing thewar is not as simple as it appears It involves more than just pass-ing a piece of legislation labeled as support for the troops

bil-It has now been fashionable to bash France and Germany andother friends if they are less enthusiastic for the war than we thinkthey should be Yet foreign corporations provide millions of jobsfor American citizens French companies alone employ over400,000 There is a practical reason why offending the French andothers may backfire on us

In 2002 we earned $11.9 billion less from our investments seas than foreigners did here This is not a sign of financialstrength A negative balance on the income account contributes tothe $500 billion annual current account deficit Since 1985 when webecame a deficit nation, we have acquired a foreign debt ofapproximately $2.8 trillion, the world’s largest No nation can longsustain a debt that continues to expand at a rate greater than 5 per-cent of the GDP This means we borrowed more than $1.4 billionevery day to keep the borrowing binge going This only can bemaintained until foreigners get tired of taking and holding ourdollars and buying our debt Bashing the French and others will

over-only hasten the day that sets off the train of economic events thatwill please no one

In thinking about providing funds for the war and overall itary expenditures, not only must every dollar be borrowed fromoverseas, but an additional $150 billion each year as well The cur-rent account deficit is now 44 percent greater than the militarybudget and represents the amount we must borrow to balance theaccounts The bottom line is that our international financial condi-tion is dire and being made worse by current international events

mil-It is true that military might gives a boost to a nation’s currency;but this is not permanent if fiscal and monetary policies areabused Currently, our budget deficits are exploding, as there is norestraint on spending

No one can guarantee permanent military superiority

The dollar has already significantly weakened this past year,and this trend will surely continue A weaker dollar requires that

we pay more for everything we buy overseas Foreign borrowingwill eventually become more difficult, and this will in time causeinterest rates to rise Be assured that domestic price inflation willaccelerate Economic law dictates that these events will cause therecession to linger and deepen

My humble advice, consider being nicer to our friends andallies We need them more than we can imagine to finance our warefforts There is more to it than passing the supplemental appro-priation Besides, we need time to get our financial house in order.Antagonizing our trading partners can only make that task thatmuch more complicated

The day will come when true monetary reform will berequired Printing money to finance war and welfare can never be

a panacea

The United States Trade Rights Enforcement Act

Congressional Record—U.S House of Representatives

July 26, 2005

Mr Speaker, I rise in strong opposition to this legislation Isn’t

it ironic that the proponents of “free trade agreements” likeCAFTA are lining up squarely behind a bill like this that threatens

a trade war with China, and at the least calls for the United States

to initiate protectionist measures such as punitive tariffs against

“subsidized” sectors of the Chinese economy? In reality, this bill,which appeared out of the blue on the House floor as a suspensionbill, is part of a deal made with several Members in return for afew votes on CAFTA That is why it is ironic: to get to “free trade”with Central America we first need to pass protectionist legislationregarding China

Mr Speaker, in addition to the irony of the protectionist flavor

of this bill, let me say that we should be careful what we demand

of the Chinese government Take the demand that the government

“revalue” its currency, for example First, there is sufficient dent to suggest that doing this would have very little effect on

prece-China’s trade surplus with the United States As Barron’s magazine

pointed out recently, “the Japanese yen’s value has more thantripled since the breakdown of the Bretton Woods system, yetJapan’s trade surplus remains huge Why should the unpegging ofthe Chinese yuan have any greater impact?”

As was pointed out in the Wall Street Journal recently, with the

yuan tied to several foreign currencies and the value of the dollardropping, China could be less inclined to purchase dollars as away of keeping the yuan down Fewer Treasury bond purchases

by China, in turn, would drive bond prices down and boostyields—which, subsequently, would cause borrowing costs forresidential and some corporate customers to increase Does any-one want to guess what a sudden burst of the real estate bubble

might mean for the shaky U.S economy? This is not an argument

for the status quo, however, but rather an observation that there are

often unforeseen consequences when we demand that foreign ernments manipulate their currency to U.S “advantage.”

gov-At the very least, American consumers will immediately feelthe strengthening of the yuan in the form of higher U.S retailprices This will disproportionately affect Americans of lowerincomes and, as a consequence, slow the economy and increase thehardship of those struggling to get by Is this why our constituentshave sent us here?

In conclusion, I strongly oppose this ill-considered and tially destructive bill, and I hope my colleagues will join me inrejecting it

poten-International Affairs

In these selections I discuss U.S economic relations with other countries, outside the narrow context of trade policies History shows that the most productive and peaceful behavior would be to mind our own business, not giving taxpayer money to regimes we like or imposing punitive sanctions

on those we dislike I believe the U.S should withdraw from tions such as the IMF, World Bank, and United Nations, as they uncon- stitutionally delegate U.S sovereignty to international bodies, which are unaccountable to the American people.

organiza-Congressional Record—U.S House of Representatives

May 15, 1980

Mr Speaker, once again your committee has recommendedpouring billions of tax dollars down an international rat hole,bringing to approximately $16.5 billion the total amount of wealth

we have taken from the American people and given to the national Monetary Fund The approximately $5.5 billion increase

Inter-in our quota is the largest sInter-ingle Inter-increase Inter-in history, and it occurs

at a most dangerous point in the history of the international etary system

mon-Bailing Out the Banks

In his appearances before the Senate and House Banking mittees on this bill, Federal Reserve Governor Henry C Wallichhad some disturbing things to say about the purposes of this mas-sive increase in our quota Many of these statements are allusions

Com-to the desperate condition that seems Com-to exist and be worsening inrepayments of loans by developing countries to large American,Japanese, and European banks

1 In an environment of increased internationalfinancial strains and of increased sensitivity of the U.S.economy to developments abroad, the United Statesalso benefits indirectly from the IMF’s efforts to allevi-ate such strains In many instances, without temporaryfinancial assistance from the IMF, countries would be

333

forced to take severe adjustment actions that couldhave a disruptive effect on the international economy.

2 The strengthening of the financial position of theFund resulting from the increase in Fund quotas is anessential element in preparing for the strains that maywell develop on the international financial system inthe next year or two

3 Given the expected increases in demands for ance of payments financing, as well as the large exter-nal indebtedness that many countries already havewith commercial banks, the IMF should be in a position

bal-to meet a larger proportion of the immediate financingneeds of its members in the coming years than it hasassumed recently A strengthening of the Fund’s finan-cial position by an increase in members’ quotas wouldincrease the likelihood that more countries would comeunder the Fund’s conditional lending umbrella

4 The letter from the chairman of the tee inviting the Board to testify has accurately pointed

subcommit-to the dilemma facing the international financial tem: a high level of lending by banks to developingcountries could lead to excessive risk concentrations atbanks

sys-5 Between the end of 1974 and the end of 1979, standing claims of banks from all countries on non-oildeveloping countries increased on average about $20billion per year

out-6 The rapid expansion in lending by foreign bankshas caused some concern among foreign regulatoryauthorities The German and British authorities havebegun to require banks in those countries to maintaindetailed records on a consolidated basis including, as aminimum, lending by their head offices and foreignbranches Since last fall, Japanese banks have been con-strained by a request from the Ministry of Finance tolimit their international lending

7 Weighing all these factors is indeed complex,but, on balance, I would conclude that the general risksare somewhat greater in 1980 and 1981 than in 1974 and

1975 The situation clearly varies greatly from country

to country Recent history has taught us that the tions of some countries can improve dramatically in ashort period of time Unfortunately, in other cases, theexternal situation has deteriorated rapidly over time,either as a consequence of financial mismanagement orbecause of external (and sometimes internal) eventsover which the country has little control

posi-These warnings and allusions to impending crises cast somelight on the perceived necessity for this massive infusion of Amer-ican tax dollars into the IMF The money will apparently beneeded to bail out some banks that have made risky loans to thesocialist governments of developing countries

Worldwide Inflation

Ever since World War II, the IMF has permitted and aged worldwide inflation This has been done through providingreserves to facilitate international payment problems One of thereasons given for passage of this bill is that it will enable the IMF

encour-to handle the large imbalances of payments that now exist and areexpected to persist into the foreseeable future The developingnations, like the developed nations, have to face reality There is nofree lunch An increase of international liquidity merely serves asanother source of price inflation It is true that recipient nationscan buy goods and services in the international markets at yester-day’s prices, thereby gaining in relationship to those who have notyet gained access to the fiat money, but this only can be paid for bythose who must restrict their purchases in the face of higher prices

By creating added liquidity, the IMF can indeed redistributewealth, but it cannot create new wealth The net trade imbalances

of the nations that import more than they export can be met bygifts of new liquidity of IMF reserves, at least for as long as suchreserves are honored by the producing nations But this is simply

a giveaway program

In effect, it steals resources from one group of citizens and givesthem to another group.

The transfer of resources from one nation to another makes theIMF just one more foreign aid bureaucracy The wealth of middle-class citizens of the nations of the West will wind up subsidizingthe grossly inefficient programs of the elitist, socialist, envious,and bureaucratized Third World nations The middle classes of theWest will have to support the educated elite of the less-developednations We will rob from the middle class to finance the powerful,only we will do it across borders

What we have seen again and again during the past 30 years isthat the guilt-ridden voters of the West—unnecessarily guilt-rid-den—have allowed their governments to transfer their hard-earned resources to the state planning bureaucracies of the ThirdWorld Government-to-government aid strengthens the economics

of socialism This kind of aid is nothing less than a weapon—aweapon used by Western-educated socialist bureaucrats in theThird World to suppress economic freedom in their own countries.Because of the testimony taken by the subcommittee twoamendments were incorporated into this bill regarding the socialprograms of nations which borrow from the IMF The first wouldencourage the IMF not to impose conditions on its loans thatwould adversely affect the socialist programs of the borrowinggovernments It seems that the conditions that the IMF hasimposed in the past have curtailed the attempts of those govern-ments to provide material security for their subjects, and the com-mittee feels that these welfare programs should not suffer because

of the irresponsible policies of the government

Important as this amendment is, the second amendment wouldencourage the World Bank to coordinate its lending activities withthose of the IMF so that borrowing governments may receivefunds sufficient to repay their loans to the banks and also maintainthe welfare programs at home Working in tandem, the IMF andthe World Bank would become the main vehicle for the interna-tional redistribution of wealth Much of that wealth, of course, will

be redistributed from the American people to large bankers viaThird World governments It will not be the first time that poorPeter will have been robbed to pay wealthy Paul If the IMF is suc-cessful in its proposed policies, we will see even greater disruption

of international economic cooperation The IMF may have failed inits attempt to create a world of price-controlled stability; it will notfail in its attempt to subsidize uncertainty-producing socialistregimes in the Third World and large banks in the First World.Should anyone believe that the United States needs the IMF toachieve its supposed goals of monetary reliability, price stability,and economic growth, let him consider this fact: Switzerland hasnever belonged to the IMF, does not suffer from price inflation,and did not contribute its gold reserves only to see its gold sold off

to finance the financial follies of the Third World socialists

We could learn a lesson from the Swiss experience, and I hope

we do I urge my colleagues to reject this bill „

Big Bankers Get Their Bailout

Congressional Record—U.S House of Representatives

March 24, 1983

Mr Speaker, in spite of the expressed concern for the poor bythe proponents of big government policies, they, nevertheless, areseeing to it that the wealthy big bankers get their bailout Thebudget resolution passed yesterday contains $8.4 billion for fur-ther IMF funding I realize the budget resolution was directedtoward the benefit of welfare recipients but I really do not thinkthe bankers who made unwise foreign loans are all that deserving.Billions of dollars were loaned by large international bankswith the intention of making big profits Because these loans areproving to be unwise and unprofitable, it is no reason why thepain and suffering should be passed on to the American taxpayerwho is now just barely getting by

Besides it is hardly necessary since the IMF is financially able topursue other courses It has 103 million ounces of gold on hand

and could easily sell what is needed to keep their scheme of wide inflation going—for a while longer that is—without furthertaxing the American taxpayer The IMF’s official position is thatgold is not money so they have no more reason to hold gold thandiamonds.

world-The IMF also has authority and plans to borrow funds in themarket by issuing bonds They claim their credit is good and couldeasily raise whatever funds are necessary This voluntaryapproach is certainly preferable to the taxpayer being stuck withthe bill

The American taxpayer should not be asked to sacrifice for eign debtors nor the world’s international bankers

for-The IMF funding must be rejected for moral and economic sons It is unfair to American taxpayers and it is unwise to perpet-uate the engine of worldwide inflation

rea-I am really rather shocked that the bleeding hearts who ously care for the poor have such compassion for the banking richwho stand to lose a few dollars from the ill-advised loans theymade overseas with the intention of making huge profits „

seri-The Mexican Bailout

Congressional Record—U.S House of Representatives

February 12, 1997

President Clinton, in his State of the Union Address, smuglyannounced that:

We should all be proud that America led the effort to

rescue our neighbor, Mexico, from its economic crisis

And we should all be proud that Mexico repaid the

United States—three full years ahead of schedule—with

half a billion dollar profit to us

The reporting of this payback and the State of the UnionAddress was all favorable, highly praising the administration Thebailout was bipartisan so leaders of both parties were pleased withthe announcement International finance, just as it is with interna-tional military operations, is rarely hindered by inter-party fightsthat get so much attention But there are several reasons why weshould not be too quick to congratulate the money manipulators.First, they merely celebrate the postponement of the day ofreckoning of their financial Ponzi scheme It took 50 billion in U.S.dollars to save creditors who had unwisely invested in Mexicoprior to the crisis of two years ago Much of this $50 billion alsoincluded U.S credit extended through the IMF, the World Bank,and the Bank of International Settlements, much of which is yet to

be repaid

Second, foreign government welfare, and there is no bettername for it, takes money out of the productive sectors of the econ-omy—the paychecks of middle-class Americans—to reward eco-nomic mismanagement and political corruption Such “welfare”exacerbates Mexico’s suffering: social disruption, economic stag-nation, debt crises, and declines in real incomes

Third, a new fund set up under the IMF will serve to bail outthe next Mexico in trouble The plan calls for the establishment of

a $25 billion credit fund with the U.S “ponying up” $3.5 billion.This fund is in addition to the IMF funds already available for suchcrises Mexico has also received help from the Inter-AmericanDevelopment Fund; again, indirectly supported by U.S taxpayers.These funds indirectly guarantee the newly-issued Mexican gov-ernment bonds and undermine the normal incentive for investors

to police governments

As such, more confidence is now being placed in new Mexicanbonds enabling Mexico to refinance its old loans Of course, it is atslightly lower interest rates, but they are more than doubling thetime of repayment All investments involve some risks Therewards of such risk-taking are appropriately realized by investors

as loans are repaid American taxpayers should not, however, beforced to subsidize the Wall Street financier any time such entre-preneurial ventures are unprofitable The true test of the professedconfidence in Mexico will come from the level of private invest-ment into the productive sectors of the economy

Fourth, the Fed is allowed to hold Mexican bonds and use them

as collateral for our own Federal Reserve Notes It does so, eventhough it will not admit it, and refuses to reveal just how much itholds It is quite possible that the newly issued Mexican bonds willfind their way into the Fed’s holdings How far down the road wehave traveled from constitutional money when we are backing thedollar not with gold but with Mexican bonds!

Fifth, a likely motivation for this fanfare regarding the ment of the loans, and the so-called profits engendered, is to getthe U.S Congress to go along with using this money to pay ourback dues to the United Nations How about paying our so-calledU.N back dues with our Mexican bond holdings?!

repay-The use of the Exchange Stabilization Fund to bail out the pesowas illegal and unconstitutional, and yet now we have a precedentnot only established but praised for its great success This prece-dent encourages political currency manipulation over sound fiscaland monetary policies as well as establishes the U.S as lender oflast resort for all governments with bad policies

President Clinton claims that, “We stand at another moment ofchange and choice—and another time to be farsighted, to bringAmerica 50 more years of security and prosperity.” He earlier told

us the “era of big government is over,” but calls for full burdensharing through the IMF in a multilateral way with the Mexicoagreement We need to end this shell game of masking economicmismanagement by circumventing both the Constitution and Con-gress

We must stand firm in our opposition to the establishment ofnew extra-governmental agreements that will reward govern-ments with irresponsible policies which, at the same time, punishtheir own people and erode U.S sovereignty Such policies take usone step further from a constitutional rule of law, and institution-alize the United States as the world’s lender of last resort—all atthe expense of the American taxpayer

Political and economic factors can override, only in the shortrun, the subtle reality that the fiat nature of the dollar guaranteesits inherent weakness and steady depreciation This new easycredit scheme that the government creates by fiat only expands theWorld Dollar Base leading to U.S dollar depreciation and reducedbuying power

In essence, the bailout of Mexico and the financing of the back with interest, to the sheer delight of the politicians and theirWall Street constituents, were done on the back of the U.S dollarand the U.S taxpayer The real consequence, however, will not befelt until dollar confidence is lost which will surely come and beaccompanied by rapid inflation and high interest rates „

pay-Reaffirming Commitment of United States to Principles of the Marshall Plan

Congressional Record—U.S House of Representatives

May 21, 1997

Mr Speaker, I rise to make some comments about the MarshallPlan because my interpretation is somewhat different than theconventional wisdom of the past 50 years

I happen to believe the understanding of the Marshall Plan isprobably one of the most misunderstood economic events of the20th century The benefits are grossly overstated The MarshallPlan through these many years has been used as the moral justifi-cation for all additional foreign aid And once I hear it, I assume

we are on the verge of extending and expanding our foreign aidoverseas

When we look at the total amount of money that flowed intoEurope following World War II, the amount that came from theAmerican taxpayers was not large The large amount came fromcorporations and investors who believed that Europe would besafe and secure, so the large number of dollars then flowed intoEurope

It was interesting that the conditions were improved in Europenot so much because of America but sometimes in spite of America,

because many of our economists went to Europe at this time andadvised them that the most important thing that they could do,especially in Germany, was to maintain price controls Here in thiscountry we did not learn, and hopefully we have finally learnedthe lesson, but we had not learned until at least 1971 that wage andprice controls were not a good idea

Yet Ludwig Erhard at that time defied the strong advice by theAmerican advisers and took off wage and price controls, kepttaxes low, kept regulations low, produced political conditionswhich were very conducive to investment, and this is what causedthe real recovery in Europe

Political assistance, funds flowing into a country through ical maneuvers, are never superior to those funds that flow into acountry for reasons of the political stability Because Europe didinvite capital, this was the real reason why Europe recovered Foreign aid is used frequently throughout the world to helppeople But if we look at Zaire and Rwanda and the many coun-tries of the world, foreign aid has really been a gross failure As a

polit-matter of fact, it does harm because it encourages the status quo.

The market is much smarter than we as politicians, because if themarket and the political conditions are not right, that country thatwants capital must improve those conditions to invite the capital

A good example might be in Vietnam at the current time Theychanged their conditions to invite capital So there must be anincentive for those countries to change their condition

Foreign aid very often and very accurately, I believe, is a dition of taking money from the poor people in a rich country andgiving it to the rich people of a poor country I think there is a lot

con-of truth to that, because the burden con-of taxation and inflation andthe many things that our average citizen and our middle-class cit-izen suffer comes from overexpenditures and good intentionswhether they are here, at home, or overseas We believed at thattime, and strongly so, I guess, still, that the government’s respon-sibility, whether it is through government expenditures or throughthe inflationary machinery of the Federal Reserve, that if we stim-ulate an economy, if we prime the pump, so to speak, that we canstimulate the economy This was the argument after World War II,that we would prime the pump That is not a free-market notion,that is a Keynesian notion There has been no proof that this is

beneficial Really what counts is a sound currency Germany afterWorld War II and even to this date is known to have a harder andsounder currency than any other currency in Europe Political sta-bility is what is necessary, not taking money from taxpayers of onecountry and shifting it to another one

Foreign aid very often, not so much the foreign aid that went toEurope, and I would grant my colleagues, the other conditionscompensated and did not allow the foreign aid to be damaging somuch as the foreign aid, say, to a country like Rwanda That was

so destabilizing, because the politicians get hold of the money andthey use it for political reasons Money to help a country must go

in because conditions are beneficial, that encourage investment,that encourage the market to work

Mr Speaker, I would argue that there is a different tion, but I know that the support for this measure is justified „

interpreta-Calling for the United States to Withdraw from the World Trade Organization

Congressional Record—U.S House of Representatives

March 1, 2000

Mr Speaker, I rise today to announce my introduction of andrequest cosponsors for a privileged resolution to withdraw theUnited States from the World Trade Organization

Last week, the Wall Street Journal reported that the United States

was dealt a defeat in a tax dispute with the European Union by anunelected board of international bureaucrats It seems that, accord-ing to the WTO, $2.2 billion of United States tax reductions forAmerican businesses violates WTO’s rules and must be eliminated

by October 1 of this year

Much could be said about the WTO’s mistaken Orwelliannotion that allowing citizens to retain the fruits of their own laborconstitutes subsidies and corporate welfare However, we neednot even reach the substance of this particular dispute prior to ask-ing: by what authority does the World Trade Organization assumejurisdiction over the United States federal tax policy? That is thequestion

At last reading, the Constitution required that all appropriationbills originate in the House, and specified that only Congress hasthe power to lay and collect taxes Taxation without representationwas a predominant reason for America’s fight for independenceduring the American Revolution Yet, now we face an unconstitu-tional delegation of taxing authority to an unelected body of inter-national bureaucrats

Let me assure Members that this nation does not need yetanother bureaucratic hurdle to tax reduction Article 1, Section 8

of the United States Constitution reserves to Congress alone theauthority for regulating foreign commerce According to Article

II, Section 2, it reserves to the Senate the sole power to ratifyagreements, namely, treaties, between the United States govern-ment and other governments

We all saw the recent demonstrations at the World Trade nization meetings in Seattle Although many of those folks whowere protesting were indeed rallying against what they see as evils

Orga-of free trade and capitalist markets, the real problem when itcomes to the World Trade Organization is not free trade TheWorld Trade Organization is the furthest thing from free trade Instead, it is an egregious attack upon our national sovereignty,and this is the reason why we must vigorously oppose it Nonation can maintain its sovereignty if it surrenders its authority to

an international collective Since sovereignty is linked so closely tofreedom, our very notion of American liberty is at stake in thisissue

Let us face it, free trade means trade without interference fromgovernmental or quasi-governmental agencies The World TradeOrganization is a quasi-governmental agency, and hence, it is notaccurate to describe it as a vehicle of free trade Let us call a spade

a spade: the World Trade Organization is nothing other than avehicle for managed trade whereby the politically-connected get

the benefits of exercising their position as a preferred group; ferred, that is, by the Washington and international political andbureaucratic establishments

pre-As a representative of the people of the 14th District of Texasand a Member of the United States Congress sworn to uphold theConstitution of this country, it is not my business to tell othercountries whether or not they should be in the World Trade Orga-nization They can toss their own sovereignty out the window ifthey choose I cannot tell China or Britain or anybody else that theyshould or should not join the World Trade Organization That isnot my constitutional role

I can, however, say that the United States of America ought towithdraw its membership and funding from the WTO immedi-ately

We need to better explain that the Founding Fathers believedthat tariffs were meant to raise revenues, not to erect trade barri-ers American colonists even before the war for independenceunderstood the difference

When our Founding Fathers drafted the Constitution, theyplaced the treaty-making authority with the President and the Sen-ate, but the authority to regulate commerce with the House Theeffects of this are obvious The Founders left us with a system thatmade no room for agreements regarding international trade;hence, our nation was to be governed not by protection, but rather,

by market principles Trade barriers were not to be erected, period

A revenue tariff was to be a major contributor to the U.S sury, but only to fund the limited and constitutionally authorizedresponsibilities of the federal government Thus, the tariff would

Trea-be low

The colonists and Founders clearly recognized that these aretariffs or taxes on American consumers, they are not truly taxes onforeign corporations This realization was made obvious by theBritish government’s regulation of trade with the colonies, but it is

a realization that has apparently been lost by today’s ists

protection-Simply, protectionists seem to fail even to realize that raisingthe tariff is a tax hike on the American people „

U.S Membership in the World Trade

There are many of us here in the House and many Americanswho believe very sincerely that it is not in our best interests tobelong to the World Trade Organization, who believe very sin-cerely that international managed trade, as carried on through theWorld Trade Organization, does not conform with our Constitu-tion and does not serve our interests

It is said by those who disagree with this so often in the mediathat those of us who disagree with the World Trade Organizationthat we are paranoid, we worry too much, and that there is no loss

of sovereignty in this procedure But quite frankly, there is strongevidence to present to show that not only do we lose sovereignty

as we deliver this power to the World Trade Organization, that itindeed is not a legal agreement It does not conform with our Con-stitution, and, therefore, we as Members of Congress should exertthis privilege that we have every five years to think about theWorld Trade Organization, whether it is in our best interests andwhether it is technically a good agreement

The World Trade Organization came into existence, and wejoined it, in a lame duck session in 1994 It was hurried up in 1994because of the concern that the new Members of Congress, whowould have much more reflected the sentiments of the people,would oppose our membership in the WTO So it went through in1994; but in that bill, there was an agreement that a privileged res-olution could come up to offer us this opportunity

Mr Speaker, let me just point out the importance of whether ornot this actually attacks our sovereignty The CRS has done astudy on the WTO, and they make a statement in this regard Thiscomes from a report from the Congressional Research Service onAugust 25, 1996 It is very explicit It says, as a member of theWTO, the United States does commit to act in accordance with therules of the multilateral body It is legally obligated to ensurenational laws do not conflict with WTO rules That is about as clear

as one can get

Now, more recently, on June 5, the WTO director, GeneralMichael Moore, made this statement and makes it very clear: thedispute settlement mechanism is unique in the international archi-tecture WTO member governments bind themselves to the out-come from panels and, if necessary, the appellate body That iswhy the WTO has attracted so much attention from all sorts ofgroups who wish to use this mechanism to advance their interests Interestingly enough, in the past, if we dealt with trade matters,they came to the U.S Congress to change the law; they came toelected representatives to deal with this, and that is the way itshould be under the Constitution Today, though, the effort has to

be directed through our world trade representative, our tional trade representative, who then goes to bat for our businesspeople at the WTO So is it any surprise that, for instance, the com-pany of Chiquita Banana, who has these trade wars going on in thetrade fights, wants somebody in the administration to fight theirbattle, and just by coincidence, they have donated $1.5 million intheir effort to get influence?

interna-So I think that the American people deserve a little bit morethan this

The membership in the WTO actually is illegal, illegal any way

we look at it If we are delivering to the WTO the authority to ulate trade, we are violating the Constitution, because it is veryclear that only Congress can do this We cannot give that author-ity away We cannot give it to the President, and we cannot give it

reg-to an international body that is going reg-to manage trade in the WTO.This is not legal, it is not constitutional, and it is not in our bestinterests It stirs up the interest to do things politically, andunelected bureaucrats make the decision, not elected officials Itwas never intended to be that way, and yet we did this five years

ago We have become accustomed to it, and I think it is veryimportant, it is not paranoia that makes some of us bring this up

on the floor

Mr Speaker, we will be discussing this either tomorrow or thenext day We will make a decision, and it is not up to the WorldTrade Organization to decide what labor laws we have or whatkind of environmental laws we have, or what tax laws „

New China Policy

Congressional Record—U.S House of Representatives

April 25, 2001

President Bush deserves much credit for the handling of thespy plane crisis However, he has received significant criticismfrom some of his own political supporters for saying he was

“very” sorry for the incident This seems a “very” small price topay for the safe return of 24 American military personnel Tradewith China though should be credited for helping to resolve thiscrisis President Bush, in the diplomatic handling of this event,avoided overly strong language and military threats, which wouldhave done nothing to save the lives of these 24 Americans

This confrontation, however, provides an excellent opportunityfor us to reevaluate our policy toward China and other nations.Although trade with China, for economic reasons, encouragedboth America and China to work for a resolution of the spy planecrisis, our trading status with China should be reconsidered Whattoday is called free trade is not exactly that Although we engage

in trade with China, it is subsidized to the tune of many billions ofdollars through the Export-Import Bank—the most of any country

in the world

We also have been careless over the last several years inallowing our military secrets to find their way into the hands of

the Chinese government At the same time we subsidize tradewith China, including sensitive military technology, we also build

up the Taiwanese military while continuing to patrol the Chineseborder with our spy planes It’s a risky, inconsistent policy.The question we must ask ourselves is how would we react if

we had Chinese airplanes flying up and down our coast and pying the air space of the Gulf of Mexico?? We must realize thatChina is a long way from the U.S and is not capable, nor is sheshowing any signs, of launching an attack on any sovereign terri-tory of the United States

occu-Throughout all of China’s history she has never pursued tary adventurism far from her own borders That is something that

mili-we cannot say about our own policy China traditionally has onlyfought for secure borders predominantly with India, Russia,Japan, and in Korea against the United States, and that was onlywhen our troops approached the Yaloo River

It should not go unnoticed that there was no vocal supportfrom any of our allies for our spy missions along the Chinese coast.None of our allies bothered to condemn the action of the Chinesemilitary aircraft, although it technically was the cause of the acci-dent Don’t forget that when a Russian aircraft landed in Japan in

1976, it was only after many months we returned the plane to sia—in crates

Rus-Although there is no doubt that we technically have legalgrounds for making these flights, the question really is whether ornot it is wise to do so or necessary for our national security Actu-ally a strong case can be made that our national security is morethreatened by our patrolling the Chinese coast than if we avoidedsuch flights altogether After a half a century it’s time to reassessthe need for such flights Satellite technology today gives us theability to watch and to listen to almost everyone on earth If there

is a precise need for this type of surveillance for the benefit of wan, then the Taiwanese ought to be involved in this activity, notAmerican military personnel We should not feel so insecure that

Tai-we need to threaten and intimidate other countries in order toachieve some vague psychological reassurance that we’re still thetop military power in the world This is unnecessary and may wellrepresent a weakness rather than strength