Seeking to shore up global financial stability despite shaky Asian economies, the House Banking Committee approved Thursday President Clinton's $18 billion request for the International Monetary Fund.
But the panel added new legislation by Rep. Merrill Cook, R-Utah, designed to prevent Asian countries from using such aid to subsidize their exports unfairly and cost U.S. jobs.An example of abuses, Cook said, is use of IMF loans by South Korea to subsidize its already heavily indebted semiconductor manufacturers. He said they used the money to help flood the world market with low-cost memory chips and drive down prices.
"U.S. chip manufacturers like Micron were badly hurt by this export drive," Cook said.
"The financial blow to Micron, in turn, hurt Utah. Utah County was devastated by the loss of thousands of jobs Micron would have created with the opening of its plant in Lehi. That plant was indefinitely delayed when the bottom fell out of the memory chip market," he said.
"That's outrageous. If South Korea wants IMF aid . . . the country has to stop these ridiculous fiscal policies that damage its own economy and cost us American jobs," Cook said.
Cook's legislation requires the treasury secretary to report quarterly to Congress on whether east Asian recipients of IMF loans are fully meeting loan conditions - including not making loans to subsidize businesses.
He introduced that as a separate bill on Wednesday, and the Banking Committee incorporated it into its overall IMF bill Thursday.
That overall bill passed on a 40-9 vote. It provides for a U.S. contribution of $3.5 billion to an IMF emergency fund to deal with future financial crises and $14.5 billion to the international lending agency's reserves.
Banking Committee Chairman Jim Leach, R-Iowa, said the overall package "increases the effectiveness of the IMF in promoting market-oriented reform, trade liberalization, economic growth and social stability."
Treasury Secretary Robert Rubin said the package was essential "to deal with risks to financial stability around the world."
President Clinton issued a statement saying, "This bipartisan legislation will help ensure that the IMF has the funds it needs to protect American jobs and exports."