10 July 1998
(Legislation exempts U.S. agricultural exports) (4500) Washington -- The U.S. Senate voted July 9 unanimously to exempt food exports from sanctions that the United States imposed on India and Pakistan after both countries conducted underground nuclear tests in May. The Senate vote, 98 to 0, removes the largest economic penalty from the sanctions legislation aimed at India and Pakistan. Restrictions on military aid remain. Senators said at the time of the vote that they are still deeply concerned by the threat of a new arms race on the subcontinent. The 1994 Arms Export Control Act automatically imposes sanctions against countries that conduct nuclear tests by cutting off bank loans, support for loans from international institutions and loan guarantees, and trade credits. The House of Representatives will vote July 10 on the Farm Relief Export Bill, which exempts U.S. agricultural products from the sanctions legislation. Following is the transcript of the news conference, following the vote: (Begin transcript) NEWS CONFERENCE WITH SENATOR MITCH MCCONNELL (R-KY), SENATOR LARRY CRAIG (R-ID), SENATOR PAT ROBERTS (R-KS), AND OTHERS SEN. MCCONNELL: Well, thank you very much. We just passed, on a vote of 98 to nothing, a sanctions-lifting measure directed at India and Pakistan. And let me just say, as chairman of the task force that Senator Lott and Senator Daschle set up, along with Senator Biden, this was just a small initial step in the direction of reexamining our sanctions policy across the board. Before turning over to my colleagues who are the real experts in this agriculture area, let me just say that -- where we go from herewith the task force. The entire task force will be meeting next week. In all likelihood, we'll have a public hearing before the August recess, which will include not only representatives from the business community who are disturbed by our current sanctions regime, but also members of what is typically referred to as the Christian right community that have expressed some interest in having even more sanctions around the world. So we're going to give a chance for everybody to be heard. And then we intend to meet the deadline of September 15th to have a report and, hopefully, a proposal in a very, very complicated field. With that, let me turn it over to my colleague Senator Craig, a member of the Republican leadership, who's been very active in this. And then we'll go to Senator Roberts. In many ways, the bill that we passed today was the Roberts measure. He's been extraordinarily active in this, as has Senator Hagel and others. As you can see, we have members of the other party here as well. So, Larry, let me call on you. SEN. CRAIG: Those of us in the Pacific Northwest saw a precipitous drop in the price of soft white winter wheat when the sanctions were placed upon India and Pakistan. It was one of many signals that we have read and watched very closely here in the Congress over the last several months, as a good number of agricultural commodity prices began to fall. Just before the July recess, a good many of us here hosted a summit meeting with all of the major agricultural commodity groups in this country. And they laid out with us a list of items that were "must do" items, to respond not only to a need, production agriculture and our place in a world market, but also to help certainly the price of commodities down on the farm. The item that we have dealt with today was one of the number-one items on that list of many. And so I believe that this a first step today, for this Congress to recognize the importance of honoring the commitments we made to production agriculture when we changed ag policy here in Congress two years ago; that we would actively facilitate the ability of production agriculture to trade in world markets, with their products, as a reliable supplier. Today, on the eve of a major tendering of an order, we have responded. Many of us will now go immediately to the House when it convenes on Monday to work with them to assure that they can move, as rapidly as we have, to respond to this issue. And let me thank Senator McConnell for his leadership in this area. And as he has mentioned, we are watching very closely in leadership and urging that we look at the full gamut of sanctions as it relates to impacts on producers in this country and the U.S. work force and the U.S. economy. So we think this is an important step. Certainly, Senator Roberts and others have played an important role in pushing this issue to the forefront. We are pleased with the action of the Senate today. Thanks, Mitch. SEN. MCCONNELL: (That's all right ?). Pat? SEN. ROBERTS: Well, this is certainly good news. Ninety-eight to nothing, strong bipartisan support. It sends a clear signal to the entire world trading community that we are getting serious about a comprehensive and aggressive and clear trade policy. The responsibility for that lies, not only with the president and the executive, but the Congress. In my remarks, I said, finally -- and I am very hopeful, as has been indicated by Senator McConnell, Senator Craig, and will be indicated by Senator Hagel, Senator Burns and those of us who have worked so hard on this, this is step one -- step two, step three, step four are coming -- to have a comprehensive trade policy; to convince the president, by the way, that there is strong bipartisan support for serious trade initiatives. I think this is a good step one. I still believe -- maybe I'm just an optimist -- that we can talk to the president and say: Mr. President, you know, we had a 98 to zero vote, you requested this, you might want to rethink it about fast track. In the House, Chairman Bob Smith has indicated he can bring 27 more votes. I'd like to rekindle those embers into a fire of support for fast track, as well as MFN, as well as IMF. If we put all that together, I think we'll have a very clear and comprehensive trade policy. But this is a sorely needed first step. I am extremely hopeful. I'm optimistic. It's not a guarantee, it's not a slam-dunk whether Pakistan will buy our wheat. That's, as you know, July 15, and it's worth about $40 million to U.S. producers. And it can either go to us or it can go to our competitors. Obviously, why, Pakistan will be receiving the wheat. I'm very hopeful that we can have a more comprehensive bill as soon as possible. Thank you. SEN. WYDEN: Well, thank you, Mitch. And it just seems to me that this is a textbook case for how you ought to make bipartisan policy, if you look at what Mitch McConnell and Joe Biden did this morning, Pat Roberts and Patty Murray, a couple of new senators from Oregon. And let me tell you, things just about blew up this morning. We had a two and a half hour session. There were a number of senators who had reservations about this. And I'd really like to just praise particularly Mitch McConnell and Joe Biden because they kept it together. Sandy Berger was in on the discussions. And it really could have all been thrown overboard very easily this morning. The bottom line here is our farmers are six days away from a disaster. In the Pacific Northwest, where we grow a big chunk of the wheat, these sales to Pakistan are critical. On July 15th, Pakistan is going to be initiating a process to determine who gets to sell this wheat. And without the bipartisan legislation that passed the Senate today, we could not sell even the tiniest bit of wheat to Pakistan. These government credits are just that essential. So across this country, we've been able to pass legislation that's going to create jobs from rural wheat fields to metropolitan areas where you have shippers and dock workers. And I just want to thank all of you for including me this afternoon, and I think it's an important bill. SEN. MCCONNELL: Thanks, Ron. Chuck? SEN. CHUCK HAGEL (R-NE): Thank you. I would just add, as I said this afternoon, this is the beginning of a long debate in this Congress and this country about the role of the United States of America in the world. This world is dynamic, it's new, it's hopeful, it's full of opportunity. The United States must step forward. We're the only nation today on Earth that possesses the leadership, the capability, the production, any measure you take of a great nation. It is only the United States that can help lead the world into a new century that in fact (can close ?) the hope and the opportunity to make the world better for so many people. And food, the production of food, is the common denominator of mutual interests. That is why today's vote, today's interest, today's leadership, as Ron Wyden said, the bipartisanship of that leadership, was so critical. A long way to go. This is a beginning. But the comprehensiveness of a foreign policy has to begin with the essence of a trade policy. And it is not just agriculture. It is about IMF and fast track. We will debate MFN for China. And the new strategic triad for this nation as we move into the next century. It will be strong national defense, strong economy, strong, clear, foreign policy and trade policy. Trade is the future of our nation. It's the future of our world. And food is the one bridge, history has always shown, that crosses over totalitarian governments and opens societies and makes the world better and gives hope and opportunity and allows nations to develop market economies and democracies. So I am very, very proud to have been part of this, with the leadership exhibited not only by those who stand here today, but Trent Lott and Tom Daschle deserve a lot of credit for opening this debate up by forming this task force on sanctions. SEN. MCCONNELL: Thank you, Chuck. Wayne SEN. WAYNE ALLARD (R-CO): Thank you very much, Mitch and Senator Roberts both for all your leadership on this particular issue. I'm Wayne Allard from the state of Colorado, and we do raise a lot of wheat in the state of Colorado, on the plains part of our state. And food issues are extremely important because agriculture is an important part of our economy. I'm known as a free trader. I think that we need to have our businesses rely more and more on the markets and not to look to government for subsidies. We've done some major reform in the agricultural bill. As a member of the Ag Committee, working with now Senator Roberts, we've tried to get farmers to look to the markets. And so I think we have a particular obligation. Those of us who served on the Agricultural Committee, who have pushed reform in agriculture, need to stand behind our farmers and make sure that those markets remain viable, so that they can compete in a world market. Sanctions are a tool that's been around for a long time. But as was referred to by my colleague Senator Hagel from Nebraska, the world has changed, and we have other countries out there who are capable of making many of the same products that we make today -- with some very good quality, I might add. I don't think they measure up to what we do here in this country, but they're getting better every year. And sanctions simply are not going to work in today's world. So we need to look at different ways on how we can deal with certain rogue nations. And I think the sanctions policy that we voted for today is a step in the right direction. Thank you. SEN. MCCONNELL: Thanks, Wayne. Gordon? SEN. GORDON SMITH (R-OR): With the action of the U.S. Senate today, the support of the president of the United States, and the hoped-for action of the U.S. House of Representatives, America has been spared the spectacle of watching its government wrestle its farmers to the ground merely because our laws on nuclear nonproliferation were unable to control the spread of nuclear weaponry on the subcontinent. I'm happy to have been a part of this change. It's the first step, as has been mentioned, but it's an important step. This is a particular issue that unites city and country in a way that I think we need to acknowledge. A lot has been said of farmers, and I come from the farming part of our state. But this also means about $10 million worth of maritime activity in the port of Portland. So it is one of those issues that does truly bring our states together, both rural and urban. And it's a good day for our country. Thank you. SEN. MCCONNELL: Thanks, Gordon. Conrad? SEN. CONRAD BURNS (R-MT): Well, let me say when agriculture's healthy, the nation's healthy. I want to come at it just a little bit different. I had a visit with the EU in Brussels. As you know, there's 30,000 metric tons of barley headed this way, and the EU is very, very -- and it's subsidized at around $51 a ton. Had we let this sanction go on, we'd have sent a message to our competitors that we weren't ready to fight and to take our share of the market, because we built an export policy of American agriculture on three things: quality, quantity, and reliability. And sanctions erode that. Today, we took a step to take care of part of that. But I told the minister of Agriculture for the European Union that if they will continue on to ship at high subsidized prices, that I have never been in a fight in my life that they didn't hit one another. And we're going to fight back for our farmers. We are going to fight back for them, and we are going to open those markets up. At least they have got access and a shot at it. Now, we might not sell the wheat, but it's not because we don't have a shot at doing it. And today was -- I think the Senate also understood that we're in a trade battle, and it's a competitive world. But let our people compete, especially when it comes to food. And I think -- this also sends a very loud message to our competitors that we're not going to fiddle around here and let them take our markets and we stand idly by and take the consequences. We're just not going to do that. And so I want to thank Larry and the leadership. And Mr. McConnell's been great on this. But it's been a -- we just have to have an opportunity to -- access to those markets. And I thank you all for coming today. SEN. MCCONNELL: Thanks, Conrad. Rod. SEN. ROD GRAMS (R-MN): Thanks very much, Mitch. And I can't say it any better than what's already been said, but I am going to say something anyway. (Laughter.) SEN. ROBERTS: (Off mike) -- difficult. SEN. GRAMS: But I think today we took a first good step in not allowing a lot of these sanctions to backfire on American farmers. You know, we can't hold our farmers hostage to the political winds of isolationism and protectionism one day, and then promise them free and open markets the next day. I think that we -- as I think Conrad alluded to -- we can't be looked at as unreliable suppliers. It took us a decade or more to get over one of the sanctions or embargoes in 1978. And we can't put our farm community and rural America through this again. So again, this has got to be, I think, maybe the first step for agriculture, but I think it's got to be the first step in trying to broaden the debate and the fight against how we impose sanctions through our policy. So again, I want to thank everybody here. I think it's a great vote for what we did today. Thank you, Mitch. SEN. MCCONNELL: (Thank you ?). A couple of you came in late. Let me just say again quickly. The task force -- Senator Biden and I called a meeting of the task force next week. We expect to have a public hearing before the August recess, giving a broad range of Americans, who have different views on the whole sanctions question, an opportunity to be heard. And we expect to meet the September deadline for a report, which we hope will be overwhelming, but it's a lot of tough times ahead of us. Questions? Q: Yeah. Have you talked to the Republican leadership on the House side, yet, to see what kind of reception you expect this measure to have? Do you expect it to pass on that side? SEN. ROBERTS: We've had discussions with the chairman of the House Ag Committee, Bob Smith. We've had discussions with the speaker. They've been along the lines of the meeting we held with the farm groups and the commodity groups when they outlined -- we listened to them; they outlined their priorities. This is one of the top priorities. You'll recall that the speaker, in a press conference with Chairman Smith, outlined some of the things that he thought should happen and will happen. One of them was IMF, one of them was MFN, one of them was fast track, and we hope that that can get back, and obviously, one of them was sanctions reform. I have been in constant conversation with the speaker, and I think he'll be very favorably disposed. Ninety-eight to nothing sort of sends a strong signal to the House that I think they can follow suit. SEN. CRAIG: I've also talked with Trent today, and he's going to be sitting down with Newt Monday. This is number one on the agenda of items that are "must move" this next week in the House. We think they can respond that quickly. It's critical they do. SEN. MCCONNELL: Someone else. Yeah? Q: Senator Daschle and a group of Democratic farm state senators had a press conference at 3:15 saying that they very much approve of this bill, but it isn't enough. And then they brought up some other things they wanted to do, such as raising the loan cap on loan rates. Do any of you have any reaction to this? Is this something that you're considering supporting or what? SEN. BURNS: Let's take care of the promises that was made in the first place. Let's do some tax reform. Let's do -- let's do the IMF and let's do fast track. Let's open up these markets, because I'll tell you what, I've got mail from my state that the problem is that they're being denied access, then we also have the problem of Canada, both in wheat and cattle. And let's try to deal with that with their producers up there, because this just isn't an American problem, this is a North American problem. And I think we should deal with that. I don't think we want the government back in the grain business with a huge supply out there that processors knows that it's there, and we will never work our way out of this. We've got to sell it. Let's move it down the pipeline. I think everybody understands what happened in the milk business whenever we had a shortage of butterfat; all at once, that market shoots up. And that's what we've got to be able to do -- is be able to roll with the market, and -- but we cannot be denied the access to the market just by government fiat. SEN. ROBERTS: Let me just say that as one individual senator that had at least a bit to do with the passed farm bill, that I think we have a lot of problems. I think the situation is very severe, more especially in the northern plains. I know there's concern in regards to our friends and colleagues across the aisle about what they refer to a safety net. I would point out that the income assistance we're providing to producers is roughly twice as much as it was under the old farm bill. Many of their proposals do have some budget impact. I'm open to all suggestions. I've said, I think, at a similar meeting here, if I thought an increase in the loan rate would actually answer the problem, as opposed to drive prices lower, I might be for it. But I think the budget estimate was $3.2 billion. I don't know how we'd get that money in terms of an offset, unless you would take it away from the transition payments, and I don't think that's a viable alternative. But just summing up, I think if you look at the real causes of the problem, most of it involves trade, and I'd go back to the 12 major farm organizations and the commodity groups. They sat around a table. We listened for an hour and a half. They went through their list of what they think are the priority items. Not one of them -- not one -- said, "Let's open up the farm bill, lose the flexibility, lose the transition payments, lose that investment in agriculture." It was trade, tax, regulatory reform, all of those things. And now we can get some of those things done during this session. And I think probably the appropriation bill is probably not the best place to be doing things like that. I expect a good discussion. I remain open to all suggestions. I'm extremely hopeful it doesn't get into an even-numbered year finger-pointing match with appropriate adjectives and adverbs. SEN. CRAIG: That commodity group that we spent time with, that Pat just alluded to, before the July 4th break, while they offered us their list, and it was, as Pat has said, trade, trade, trade, trade, trade, and tax relief, and a few more things, many of us asked the question, "Do you want to roll back the farm bill and return to the past?" There was a unanimous chorus of no. SEN. ROBERTS: It was 11 groups, by the way. I just want (a correction ?). SEN. CRAIG: We're talking all of the major commodity production groups. I think the answer on our side is we are going to listen. But we don't sense the need to change, we need the sense to honor the promises that this Congress in a bipartisan way made when we passed the new farm policy. SEN. : And, you got to wake up back there. I mean, you -- (laughs). SEN. MCCONNELL: Yeah Q: Senator McConnell, setting aside Chairman Lugar's amendment to the ag appropriations, how precedent-setting do you think this vote is in terms of keeping farm and ag interests in mind -- (inaudible) -- the other 61 economic sanctions that are currently in place? SEN. MCCONNELL: A hundred and fifteen. Q: Instead of 61. SEN. MCCONNELL: Well, 61 since the last four years. SEN. : That's the last four years. Q: However many it is. SEN. MCCONNELL: Yeah. Well, I would just call this a -- Q: (Off mike) -- you're going to roll back some of the other sanctions? SEN. MCCONNELL: Yeah, I would -- we have a wide disparity of views in the Senate in both parties from Senator Lugar's sort of no-sanctions-essentially policy to others who believe that we ought to apply sanctions frequently to any kind of conduct we condemn around the world. What we hope to do with the task force is to sort of sort out what is a sanction -- there are different kinds of sanctions -- and come up with some bipartisan agreement on the kinds of sanctions that clearly -- that have no impact on national security and have no demonstrated history of success. And what we hope is that in that category we can have broad legislation that sweeps that kind of thing off the books. But that's just my observation at the beginning of the process. We will have a meeting next week. We will have a hearing before the August recess. We're going to work on this intensely and hopefully have a piece of legislation in September. SEN. HAGEL: Excuse me. Let me just add one point to this. SEN. MCCONNELL: Yeah. SEN. HAGEL: You mentioned Senator Lugar's bill. Senators Roberts, Dodd, and Biden and I have a bill that we dropped in right before the 4th of July recess. And this bill would address current sanctions. As you know, the Lugar bill is past -- is future. I'm sorry. The Dodd bill with the three of us on it would take a look at what's in place now and give the president waiver authority with appropriate checks and balances. Nothing would go into effect for 30 days until Congress could act. The Congress then could override, and all the appropriate constitutional protections. But we are going to debate that. We think that's important. Senator Lugar's bill is important. But I think what's most important is that we focus on the entire issue. And what the task force will give us will give us some overall sense of the issue itself, and then we can pull it apart. But the four of us on the Dodd bill are rather intent to go forward with it. SEN. ROBERTS: I hope we can do Section 3, that portion of the bill that I spoke to this afternoon that was stricken from the bill mainly because of one senator who has some concerns. I don't, you know, challenge that. But I hope we can do Section 3 at the earliest possible time because that's national security. Secretary of State Albright asked for that. The president has asked for that to give us some flexibility in regards to the proliferation issue with India and Pakistan. It makes no sense to have a sledgehammer and shatter glass when you need, you know, carrots and sticks. Those aren't my words, that's Secretary Albright. So the administration wants it. We think it was appropriate. We think that would have been a giant step, and even a bigger signal to send, but unfortunately, we ran into a situation where there were some concerns. SEN. MCCONNELL: Okay, thank you very much. (End of Text)