de la Garza, Hon. "Kika", chairman, Subcommittee on Department Op- Erb, Richard D., Deputy Assistant Secretary for Developing Nations, Treasury Department, letter dated September 28, 1976 to Chairman Gon- zalez on behalf of Secretary Simon, with attached statement regarding the Department's position on financing palm oil projects by international "Ivory's Coast's Output of Palm Oil Gains; U.S. Gives Aid, Irking Soybean Lawson, W. D., III, president, National Cotton Council of America, state- McNamara, Hon. Robert S., President, World Bank, letter dated July 30, 1976, responding to Hon. de la Garza. National Cotton Council of America, statement of W. D. Lawson III, pres- Treasury Department, letter dated September 28, 1976, from Richard D. Erb, Deputy Assistant Secretary for Developing Nations, with attached "U.S. to Fight Aid Abroad for Palm-Oil Exports," article from the Wall MATERIAL FROM FEDERAL AGENCIES REFERRED TO IN THE HEARING RECORD Bank staff working paper No. 193 entitled: "Possible Effects of Trade National Advisory Council: Report prepared by the NAC Working Group U.S. International Trade Commission: "Shrimp Report to the President on Investigation No. TA-201-12 Under Section 201 of the Trade Act of DEVELOPMENT INSTITUTION LENDING FOR PALM OIL PRODUCTION WEDNESDAY, SEPTEMBER 15, 1976 HOUSE OF REPRESENTATIVES, OF THE COMMITTEE ON BANKING, CURRENCY, AND HOUSING, Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 2222, Rayburn House Office Building, Hon. Henry B. Gonzalez (chairman of the subcommittee) presiding. Present: Representatives Gonzalez, Mrs. Boggs, Stephens, Johnson, Grassley, and Paul. Also present: Representative Mark W. Hannaford of California. Mr. GONZALEZ. The subcommittee will come to order. I will proceed by reading my statement. This is a hearing on four resolutions concerning loans by international development lending institutions for the development of palm oil production. Palm oil is an edible oil, and competes directly with edible oils produced here in the United States. The resolutions we are considering are House resolution 1399, 1419, 1445, and 1451. Two of these are identical, so Members will find only two of the resolutions before them. All of the resolutions state that loans made by the development banks for palm oil production are causing serious harm to American farmers and processors, especially in the soybean market. Our witnesses today will be sponsors of these resolutions. In addition to the six members we will hear, a number of statments that have been received from others of our colleagues who are concerned about this matter, and these statements will be entered into the record. The administration has been invited to appear at these hearings, but I am told that the invitation has been declined. Representatives of the Treasury have said that the administration has to work on palm oil loans, and that it is trying to work with various banks to persuade them that no more loans should be made for these projects. According to them, no useful purpose would be served as public discussion at this time. I find this attitude incredible and totally and wholly unacceptable. The President's campaigners have said that there won't be any more. palm oil loans. If that can be said on the campaign trail and in other public announcements, it can be said here, and for the record. If our Government has a policy, it can, and it should be, discussed. I cannot understand how an administration can proclaim a policy one day, (1) refuse to testify on that policy a few days later, and then literally the next day talk about what a great thing government-in-the-sunshine is. The public statements we have heard say that there will be no more palm oil loans. But the policy adopted by the administration is, in fact, different. That policy says that there won't be any more loans for palm oil export production after the loans now in the pipeline have been acted on. This policy is stated in a memorandum for the National Advisory Council, with an attached report dated August 11, 1976 and which was the official basis for the public statements that have been made. A copy of that memorandum will be inserted in the record. [The memorandum referred to may be found in the appendix on p. 93.] Mr. GONZALEZ. I believe that the administration is declining to appear, not because it would upset some delicate negotiations, but because their real policy is very different from what they want the American public to believe. The fact is that we do have a problem here. We are going to have other problems, whenever the lending institutions help establish industries that compete directly with American products. We are concerned here with edible oils; we may in the future be concerned with citrus production, as one of my colleagues will point out later on today. It is a serious problem, one that goes beyond the single product we are concerned about here; it will require our serious consideration. [A statement submitted by the Treasury Department after the hearing was completed may be found in the appendix on p. 69.] Mr. GONZALEZ. Before going on I should also place the resolutions in the record. So ordered. [The text of House Resolutions 1399, 1419, 1445, and 1451 follow:] 94TH CONGRESS 2D SESSION H. RES. 1399 IN THE HOUSE OF REPRESENTATIVES JULY 1, 1976 Mr. JENRETTE (for himself and Mr. MATHIS) submitted the following resolution; which was referred jointly to the Committees on Agriculture and Banking, Currency and Housing RESOLUTION Resolved. That it is the sense of the House that (1) The Secretary of Agriculture should study the impact of the development of the foreign palm oil industry on the domestic vegetable oil industry and submit his recommendations to the National Advisory Council on International Monetary and Financial Policies that further loans by the international financial institutionsthe International Bank for Reconstruction and Development, the Inter-American Development Bank, and the Asian Development Bank-for the development of palm oil be discouraged by the United States. (2) The Secretary of the Treasury, with the cooperation of the member agencies of the National Ad 1 2 3 4 5 6 2 visory Council and the Secretary of Agriculture, instruct the United States Executive Director in each of the international financial institutions to oppose new proposals for palm oil development loans unless the palm oil is needed domestically and does not have the effect of increasing palm oil exports. |