The House Financial Services Committee has been mired in debate for two days over China and reauthorization of the Export-Import Bank, an agency that supports U.S. exporters by helping finance deals with foreign buyers.
This past summer, Republicans said they had a deal with Chairwoman Maxine Waters, D-Calif., to include provisions in the reauthorization bill that would restrict its ability to finance transactions with Chinese state-owned enterprises. But labor-backed Democrats, led by Rep. Denny Heck of Washington, balked, saying it would unduly restrict big exporters like Boeing Co.
After months of negotiations, Waters sided with Heck, and introduced a bill with weaker restraints on China, which was the subject of the multi-day markup.
For nearly 10 hours Tuesday and Wednesday, the panel argued over Republican amendments aimed at proving that Democrats were being soft on China. In turn, Democrats accused the GOP of using China as a red herring, saying they really wanted to let the agency’s authorization expire.
On Wednesday, Waters started responding to the Republican amendments by listing firms in their districts that had received support from the Export-Import Bank.
“Does Mr. Freeman of the Freeman Corp. know that your amendment would kill the bill and he would not have$ 1,234,000 worth of business supported by Ex-Im?” Waters asked Rep. Andy Barr of Kentucky about the CEO of a wood veneer supplier.
“You mentioned George Freeman,” Barr said. “I know he doesn’t like red China. I know he’d support this amendment.”
“I can’t wait to show George this video,” Barr later added, referring to the YouTube recording of the hearing available on the committee’s website.
Waters and Barr went back and forth for about an hour, each repeatedly insisting that Freeman would be on their side.
So when the committee recessed briefly an hour later, CQ Roll Call called Freeman to ask.
What he said spoke more to the state of trade policy as U.S. trade officials and lawmakers debate how to respond to China’s growing challenge to America’s status as the world’s predominant economic power.
Freeman first said he wasn’t aware his company was the topic of a heated congressional debate until the call. CQ Roll Call told him where to livestream it.
“I did see the one thing where Andy [Barr] was talking about how I hate red China,” Freeman said. “He went a little off on that one.”
The wood veneer supplier sells a lot abroad, Freeman said. “We have 250 employees and export all over the world.”
But the last time his firm used the Export-Import Bank was in 2013, for export credit insurance, which, Freeman said, is “good to have but it’s not the difference between doing business or not.”
Freeman switched to a private European firm for the insurance and hasn’t looked back. “From our use, I wouldn’t know [Ex-Im] existed for the last six-and-a-half years,” he said, adding that he was a “very nonpolitical person.”
His firm and other U.S. veneer mills used to do a lot of business in China, Freeman said.
But China “decided they wanted to make [their] own veneer, so they put huge barriers on trade on U.S. imports starting about 15 years ago, and basically shut us out,” Freeman said. “There used to be 40 veneer mills, but now there’s only 10 left.”
“There are all these government subsidies for veneer in China,” he said. According to the Congressional Research Service, China’s export credit support now equals that of the G-7 combined, and those figures don’t include the full amount of government subsidies.
“I have a lot of opinions about U.S. trade policy with China, but I don’t think that the Ex-Im Bank has much to do with it,” Freeman said. “It certainly hasn’t leveled the playing field.”
The Export-Import Bank was in fact created partially to help offset the impact of foreign subsidies. It has been hobbled the last few years due to the lack of a quorum on its board, limiting it to deals under $10 million.
Freeman eventually sided with Barr.
“Maxine Waters doesn’t know anything about our company. But Andy does — he’s been here a couple of times,” Freeman said. “So, I’d have to say I agree with Andy.”
After the recess, Barr told the committee that he spoke with Freeman, relaying that he sided with the Republican in the debate and has not used the Export-Import Bank in recent years.
The overall debate on the measure lasted so long that Waters ultimately ended Wednesday’s session before voting on most of the amendments or the underlying bills. The committee will reconvene Thursday morning at 8:30 a.m., for roll call votes.
Freeman did not say whether he would be watching.