Time: Fri Jun 13 16:51:08 1997
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	Fri, 13 Jun 1997 16:50:34 -0700 (MST)
Date: Fri, 13 Jun 1997 16:49:28 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: pending MFN/China vote, time to be heard! (fwd)

>June 13, 1997
>Oppose MFN status for Red China
>The enclosed advance copy of an article from the July 7th issue of The
>New American will provide you with more ammunition for your calls and 
>letters opposing extension of MFN trade status for Red China.
>Key facts: The House vote to deny Most-Favored Nation trade status to
>Red China will be held in late June or early July; if denial is
>successful in the House, a Senate vote would then follow. Send a copy of
>the enclosed article to your congressman and U.S. Senators along with
>your strong urging that they oppose extension.
>In addition to your letterwriting, also mobilize public pressure on your
>Congressman and Senators by organizing letters-to-the-editor and calls
>to radio talk shows.THE NEW AMERICAN - June 13, 1997
>     MFN and Corporate Welfare
>            In the debate over renewal of most favored nation (MFN)
>trading status for Communist China, a regime that runs over its citizens
>with tanks and requires mothers to abort their babies, one crucial fact
>has been ignored altogether. MFN for China is not about "free trade"
>between nations, or a policy of "engagement" that will eventually
>liberalize the regime's human rights policies. It is the key component
>of a system of transnational corporate welfare that leeches off the U.S.
>taxpayer and enhances the infrastructure and industrial base of a
>potential adversary.
>            The term "most favored nation" is somewhat misleading; most
>nations of the world enjoy MFN status, which simply means that they
>qualify for the lowest tariff rate on the products they export to the
>United States. However, under the Trade Act of 1974, revocation of MFN
>status would choke off access to "programs of credits, credit
>guarantees, [and] investment guarantees" for "nonmarket economy
>countries" such as Communist China, and for the U.S.-based transnational
>corporations seeking to undertake subsidized ventures in such countries.
>The major artery of such taxpayer subsides is the Export-Import Bank
>(Ex-Im). The list of Ex-Im's customers for China ventures could serve as
>a roster of the U.S.-based transnationals who compose the Red China
>            International Corporatism
>            According to an Ex-Im fact sheet, the institution "exists to
>support U.S. exporters in making sales to foreign buyers. It does this
>by filling the gap where private sector export financing is inadequate
>or unavailable." That is, Ex-Im conscripts the wealth of U.S. taxpayers
>to underwrite business ventures that private financial institutions
>subject to the discipline of the free market simply wouldn't touch.
>Congress appropriated $726 million in taxpayer funds for Ex-Im for
>fiscal year 1997, not a penny of which was authorized by the
>Constitution. A large portion of that money was used to finance
>corporate deals in China, which Ex-Im describes as its "largest market
>in Asia." From June 1996 to April 1997, Ex-Im provided more than $2
>billion in subsidies for corporate ventures in China -- subsidies that
>would not have been possible had MFN not been renewed last summer.
>            Among the most lucrative Ex-Im subsidies during that period
>were "direct loans" of $408.8 million for New Jersey's Foster Wheeler
>Energy Company and $383.1 million to underwrite purchases from Overseas
>Bechtel Inc./China Bechtel Inc. Other direct loans included one of
>$260.1 million to General Electric, $55.8 million for Voith Hydro, Inc.,
>$47.5 million for Siemens Corporation, and $36.3 million to
>Westinghouse. Those loans were sent to state-run Chinese banks to
>purchase goods and services from the American transnationals.
>            Ex-Im also provided loan guarantees of $100 million and
>$332.7 million to McDonnell-Douglas and Boeing, respectively, for the
>sale of aircraft. By extending those guarantees Ex-Im assumes "all of
>the political and commercial risks of non-payment" -- by extorting the
>necessary funds from the U.S. taxpayer should the loans go bad. In such
>arrangements, the profits are private, the investments are subsidized,
>and the losses are socialized; it is international corporatism, not free
>            Several of the largest beneficiaries of Ex-Im subsidies are
>identifiable members of the Red China Lobby. Foster Wheeler Energy
>Corporation is a member of the U.S.-China Business Council, as are
>McDonnell-Douglass, General Electric, Texaco ($20 million in Ex-Im
>subsidies), and Westinghouse ($36.3 million). General Electric also
>belongs to the U.S.-China Educational Foundation, and Westinghouse
>participates in the Business Coalition for U.S.-China Trade. Bechtel is
>a member of USA-ENGAGE, which describes MFN renewal for China as "a
>means of encouraging positive change in China and ensuring freedom for
>Hong Kong." Boeing is arguably the corporate "Friend of China"
>nonpareil. The Seattle-based aerospace firm is the leader of the
>Business Coalition for U.S.-China trade, and a member of the U.S.-China
>Educational Foundation, the Business Coalition for U.S.-China Trade, and
>the U.S.-China Business Council.
>            Selective Condemnation
>            There is certainly nothing novel about taxpayer-subsidized
>sales of technology to communist powers. Indeed, today's contemporary
>Red China Lobby in many ways is an institutional continuation of
>yesterday's Soviet lobby. For example, Donald Staheli, outgoing chairman
>of the U.S.-China Business Council (which represents over 300 firms) and
>a former director of both the National Committee on United States-China
>Relations and the America-China Society, is also a former director of
>the U.S.-Russia Trade Council. Staheli was also CEO of the New York
>City-based Continental Grain Company, which for decades was a leader in
>subsidized grain sales to the Soviet Union.
>            Curiously, this continuity is lost on some conservative
>congressmen who had been outspoken opponents of subsidized trade with
>the Soviet bloc. In an April 12, 1984 letter, one such congressman wrote
>that "we can no longer finance the inhuman and reprehensible activities
>of ... communist countries with aid and loans from our lending
>institutions and governmental agencies." "It is my belief that our
>government must not permit trade with a regime actively participating in
>the genocide of its own people," he stated in a February 11, 1988
>letter. On December 7, 1988 he informed yet another correspondent that
>"I have introduced legislation which would prohibit all extensions of
>credit, credit guarantees, investment guarantees, or grants by any
>agency of the U.S. government to any communist country."
>            The author of that sound and commendable legislation was
>Illinois Republican Phil Crane -- who has supported China's MFN status
>in every vote since 1990. As it happens, Motorola, the transnational
>which is the largest employer in Crane's district, has $1.2 billion
>invested in China. Motorola, predictably, belongs to several Red China
>Lobby groups, and Garth Milne, Motorola's senior vice president and
>treasurer, sits on the Ex-Im Bank's Advisory Committee.
>            -- William Norman Grigg
>THE NEW AMERICAN - Copyright 1997
>American Opinion Publishing, Incorporated
>P.O. Box 8040, Appleton, WI 54913
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Paul Andrew Mitchell                 : Counselor at Law, federal witness
B.A., Political Science, UCLA;  M.S., Public Administration, U.C. Irvine

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