9

aircraft highjackers. A number of similar proposals were considered but not passed by the Congress, including directives that U.S. representatives oppose IDB membership for the Bahamas until a fishing dispute with this country is resolved, that U.S. representatives at the AFDF to oppose loans to Uganda,10 and that U.S. representatives at the IDB vote against loans for countries which fail to negotiate in good faith on tax treaties with the United States."

The Congress has also made a number of efforts in recent years to directly influence the operations and policies of the international agencies themselves. In 1975, the Congress for the first time sought direct control over how the international agencies use U.S. funds when it earmarked part of its fiscal year 1975 contribution to the IDB for loans to cooperatives and credit unions in an attempt to promote growth in bank programs that directly benefit poor people.12

The IDB also has refused to accept the contributions earmarked for a specific purpose, on the grounds that those restrictions violated the basic operating rules of the international organization.

In the 1976 ADB and AFDF legislation and the fiscal year 1976 foreign assistance appropriations measure, the Congress reversed the position on earmarking it had taken in the fiscal year 1975 appropriation, and accepted House-proposed language rescinding the earmarking proviso. Spokesmen for the House authorizing and appropriating committees argued that earmarking was not permitted under the rules that govern the operation of the international agencies, 13 while Senate committee spokesmen had defended earmarking as necessary to encourage the IDB to be more innovative in its lending policies.14 The Senate Appropriations Committee then eliminated most of the IDB concessional money from the 1977 foreign assistance appropriation, arguing that the goals of the earmarking rule should be met in any case before the IDB received any more such money from the United States.15

The Domenici amendment was adopted by the Senate as a new sec. 212 of the IDB and AFDF bill. Congressional Record (daily ed.), vol. 122, Mar. 18, 1976, p. H3826, but was later incorporated into sec. 211(a) of the Harkin amendment on U.S. participation in the AFDF.

Amendment to 1976 IDB and AFDF bill, introduced and subsequently withdrawn by Representative Pepper. Congressional Record (daily ed.), vol. 121, Dec. 9, 1975, pp. H12051-H12052. 10 Amendment to 1976 IDB and AFDF bill, introduced by Senator Helms, passed by Senate, and subsequently deleted in conference. Congressional Record (daily ed.), vol. 122, Mar. 30, 1976, p. S4603.

Amendment to the 1976 IDB and AFDF bill, introduced by Representative George Miller and rejected by the House. Congressional Record (daily ed.), vol. 121, Dec. 9, 1975. pp. H12050-H12051.

12 Foreign Assistance and Related Programs Appropriations Act, 1975. Public Law 94-11. Mar. 26, 1975, Title III "Investment in Inter-American Development Bank." See: U.S. Congress. Senate. Committee on Appropriations. Foreign Assistance and Related Programs Appropriations Bill, 1975, S. Rept. 94-39, Mar. 17, 1975. Washington, U.S. Government Printing Office, pp. 151–155.

13 See remarks in the Senate by Senators Humphrey and Inouye. Congressional Record (daily ed.), vol. 122. Mar. 18, 1976, p. S3827. See also: U.S. Congress. Senate. Committee on Foreign Relations. Inter-American Development Bank and African Development Fund Act of 1976, S. Rept. 94-673, Mar. 1, 1976. Washington, U.S. Government Printing Office, pp. 14-15. Ibid. Committee on Appropriations. Foreign Assistance and Related Programs Appropriations Bill, 1976. S. Rept. 94-704, Mar. 18, 1976. Washington, U.S. Government Printing Office, pp. 161-162.

14 See the House discussion of a defeated amendment that would have removed the language nullifying the earmarking. Congressional Record (daily ed.), vol. 122, Dec. 9, 1976, pp. H12048-H12050. See also: Congressional Record (daily ed.), vol. 122, May 20, 1976, p. H4704. U.S. Congress. House. Committee on Banking and Currency. Increased U.S. Participation in the Inter-American Development Bank, H. Rept. 94-541. Oct. 8, 1975, pp. 16-18. Inter-American Development Bank Conference Report. H. Rept. 94-1121, May 11, 1976. Washington, U.S. Government Printing Office, p. 3. Ibid. Committee on Appropriations. Foreign Assistance and Related Programs Appropriation Bill, 1976, H. Rept. 94-857, Mar. 1, 1976. Washington, U.S. Government Printing Office, p. 59. Conference report, H. Rept. 94-1006, Apr. 2, 1976, p. 12.

15 S. Rept. 94-1009, pp. 112-113.

Subsequently, the House and Senate both reversed the position they had taken on earmarking. The House passed language to prohibit the international agencies from using U.S. appropriated funds for loans to Vietnam. The Senate ultimately succeeded in eliminating this negative earmark, however, arguing that the international bodies could not accept the money if this country imposed conditions on its use.16 It would appear from their tendency to reverse positions on the earmarking issue that the House and Senate were less concerned about the abstract issue of earmarking and international law than in the policy implications of the amendments themselves.

The House also succeeded in sponsoring language in the fiscal year 1977 bill requiring the multilateral agencies to give U.S. representatives information on loans as a condition for future U.S. contributions.17 This was the culmination of its unsuccessful 1971 effort requiring notification to Congress for every loan and GAO audit of the Banks, sought after the House appropriations panel discovered cases where ADB management had refused the U.S. Director access to such information.18

19

The multilateral banks also became embroiled during 1976 in a dispute between U.S. oilseed growers and Asian palm oil producers. Arguing that international organization loans encourage overproduction and damage the world market for edible oils, the Senate Agriculture Committee sponsored a resolution (S. Res. 444) in which the Senate formally requested the World Bank to cease lending for palm oil production. The House subsequently rejected a proposal by the chairman of its Agriculture Committee's Subcommittee on Oilseeds and Rice to force the Bank to make this reduction in its lending program. By a 198-210 vote, it rejected an amendment to the Fiscal Year 1977 Foreign Assistance Appropriations bill that would have prohibited the international financial institutions from using U.S. funds for loans to palm oil producers who export their product to the United States,20

In addition to these congressional actions during 1976, the House and Senate Appropriations Committees also took a number of nonstatutory steps which affected U.S. policy and the international agencies. The appropriations panels continued to press the administration during the year regarding limits on its authority for promising U.S. contributions to the multilateral banks. The Appropriations Committees have contended in recent years that neither the executive nor the Congress has the power to obligate this country to future appropriations to international organizations. They have also insisted that it is not enough for the Congress to pass legislation authorizing U.S. participation in these Bank funding agreements, and that the Executive must wait for positive action by the Appropriations Committees before it can formally pledge U.S. involvement in these international plans.

18 House Fiscal Year 1976 Appropriations Report (II. Rept. 94-857), p. 58. House Fiscal Year 1976 Appropriations Conference Report (H. Rept. 94-1006), p. 10. See also remarks in the Senate regarding the implications of the House-passed language. Congressional Record (daily ed.), vol. 122. Mar. 23, 1976, pp. H4062-H4083.

17 H. Rept. 94-1228, pp. 46-47. Sec. 506 of the Fiscal Year 1977 Foreign Assistance Appropriations Act (Public Law 94-441).

18 H. Rept. 91-1134. p. 27.

19 U.S. Congress. Senate. Committee on Agriculture and Forestry. Cessation of Loans for Palm Oil Production, S. Rept. 94-804 on S. Res. 444, May 6, 1976. The resolution was passed May 11, 1976.

20 See the House debate on the amendment by Representative Moore. Congressional Record (daily ed.), vol. 122, June 29, 1976, pp. H6955-H6961.

The committees published their strong letters to Treasury Secretary Simon and included several comments on this matter in their 1976 reports."1

The committees also published comments in their reports during 1976 on matters that directly affect the operations of the multilateral agencies themselves. For example, the Senate appropriations panel continued in 1976 to stress its concern about the high salaries and fringe benefits that the multilateral banks pay their staffs.22 Singling out the World Bank for special attention, the committee indicated that future appropriations for the IDA "will have a substantial hurdle to overcome" unless the World Bank makes substantial progress in reducing benefits to its staff.23

21 Letter to Treasury Secretary Simon from House Subcommittee Chairman Passman and Senate Subcommittee Chairman Inouye, Senate Fiscal Year 1977 Appropriation Report (S. Rept. 94-857), p. 115. Letter to Treasury Secretary Simon from full committee Chairman McClellan, general remarks, Fiscal Year 1976 Senate Appropriations Report (S. Rept. 94-704), pp. 158, 163, 165–167. House Fiscal Year 1977 Appropriations Report (H. Rept. 94-1228), pp. 40-41. House Fiscal Year 1976 Appropriations Report (H. Rept. 94-857), p. 49. For a general discussion of the implications of the commitment issue, see: Jonathan E. Sanford and Margaret G. Goodman. Congressional oversight and the multilateral development banks. International Organization, vol. 29, No. 4 (autumn 1975), pp. 1055-1064, as well as U.S. Congress. House. Committee on Foreign Affairs. The United States and the Multilateral Development Banks (committee print), 93d Cong., 2d sess., March 1974. Prepared by the Foreign Affairs Division, Congressional Research Service. Washington, U.S. Government Printing Office, 1974.

Senate Fiscal Year 1976 Appropriation Report (S. Rept. 94-704), pp. 148-154. Senate Fiscal Year 1977 Appropriation Report (S. Rept. 94-1009), pp. 102-108.

Senate Fiscal Year 1976 Appropriation Report (S. Rept. 94-704), p. 166.

THE INTERNATIONAL ECONOMY

CONGRESS AND U.S. TRADE POLICY*

Primary focus on international trade issues during the second session of the 94th Congress concerned consideration of U.S. export control policy. However, for the first time in a quarter of a century the Congress in 1976 did not extend legislation providing for administration of export control regulations.

The Export Administration Act of 1969 (Public Law 91-184), as amended, has been the basic statute regulating U.S. exports to Communist countries when national security, foreign policy and shortsupply matters were involved. The latest extension (Public Law 93500), of the 1969 act expired on September 30, 1976, when Congress failed to reach agreement on the bill prior to adjournment. With the expiration of the act, President Ford issued Executive Order 11940 citing his authority under section 5(b) of the Trading With the Enemy Act of October 6, 1917, as amended, and the continuing existence of national emergencies declared by Presidential proclamations, to continue the regulation of exports.1

In the early spring, 1976, the Subcommittee on International Finance of the Senate Banking, Housing and Urban Affairs Committee held hearings on S. 3048, to extend the Export Administration Act of 1969, as amended.2 The major question was whether the post-World War II national security export controls were appropriate to present political realities, shifting alliances and changing military and strategic balances throughout the world. In particular, the 1969 statute retained the basic requirement for regulating U.S. exports of "economic and military significance" to Communist nations and to control exports that would result in "excessive drain of scarce materials." However, it was pointed out that the law assumes that all Communist countries automatically pose a threat to the national security and, conversely, that all non-Communist nations do not. Witnesses at the hearing further noted that identical export policies apply to diverse countries, and the Secretary of Defense must review the applications for exports to "controlled countries" (that is, almost all Communist countries) on the assumption that they all represent a threat to the national security. On the other hand, they noted that the Secretary of Defense is under no obligation to review exports to other countries, regardless of the potential threat they might pose.

Prepared by John A. Costa, analyst in international relations.

1 U.S. President. Weekly Compilation of Presidential Documents: Gerald R. Ford, 1976. Regulation of Exports. Executive Order 11940. vol. 12, No. 40, Oct. 4, 1976. Washington, U.S. Government Printing Office, 1976, pp. 1426-1427.

U.S. Congress. Senate. Committee on Banking. Housing and Urban Affairs. Extension of the Export Administration Act: S. 3084. Hearings, 94th Cong., 2d Sess. Washington, U.S. Government Printing Office, 1976, 393 pp.