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Africa: Trade and Development Initiatives by the Clinton Administration and Congress
This report summarizes legislation in Congress that President Clinton suggested concerning trade in Africa. Specifically, President Clinton called on Congress during his State of the Union address to pass the legislation.
Africa: Trade and Development Initiatives by the Clinton Administration and Congress
In February 1997, the Clinton Administration submitted the second of five annual reports on the Administration's Comprehensive Trade and Development Policy for Africa as required by section 134 of the Uruguay Round Agreements Act (House Document 103-3415, Vol. 1.). On April 24, 1997, members of the African Trade and Investment Caucus introduced a bill, H.R. 1432, on U.S.-Africa trade and investment issues. In his State of the Union address in January 1998, President Clinton called on Congress to pass the trade legislation.
China and the Multilateral Development Banks
Congress is currently considering appropriations for U.S. contributions to the World Bank and other multilateral development banks (MDBs) as well as separate legislation that would require U.S. representatives to these institutions to oppose all concessional loans to China. This report provides a brief analysis of China’s relationship with the MDBs to highlight some issues and help Members of Congress, congressional staff, and observers better understand the context for the current debates in Congress and the multilateral agencies.
China and the Multilateral Development Banks
Congress is currently considering appropriations for U.S. contributions to the World Bank and other multilateral development banks (MDBs) as well as separate legislation that would require U.S. representatives to these institutions to oppose all concessional loans to China. This report provides a brief analysis of China’s relationship with the MDBs to highlight some issues and help Members of Congress, congressional staff, and observers better understand the context for the current debates in Congress and the multilateral agencies.
The Daiwa Bank Problems: Background and Policy Issues
On November 2, 1995, U.S. banking authorities ordered the Daiwa Bank to close its banking operations in the United States, and a 24-count criminal indictment was issued against it. These actions stem from the bank's admission that Toshihide Iguchi, a rogue trader at its New York branch office, had incurred $1.1 billion in losses over eleven years from trading U.S. Treasury securities and that Daiwa managers had "directed that those losses be concealed" from U.S. regulators.
The Exchange-Rate System: Return to Bretton Woods?
This report focuses on the exchange-rate system set up at Bretton Woods, its breakdown in the 1970s, the current system of managed floating and, finally, proposals to return part or all the way to a more fixed-rate system.
The Federal Reserve's Arrangement for Emergency Loans to Japanese Banks
The U.S. Federal Reserve reportedly has an arrangement with the Bank of Japan to provide emergency loans to Japanese banks operating overseas in exchange for U.S. Treasury securities. The collateralized loans would be extended on short notice for banks facing emergency liquidity needs. The purpose of the arrangement is to forestall the possible sale by Japanese banks of large amounts of U.S. Government securities (thereby raising U.S. interest rates) and to boost confidence in Japan's financial system. The loans would not risk U.S. taxpayers' funds. The Chairmen of both House and Senate Banking Committees have made statements about the arrangement, thus making it a matter oflegislative interest.
Foreign Direct Investment in the U.S.: Staging a Comeback?
After four years of decline, foreign direct investment in the United States showed sharp gains in 1993 and 1994. Japan remained the largest foreign direct investor in the U.S. economy in 1993, despite a sharp slow down in investments by Japanese firms compared with British firms, the second largest direct investors. The overall foreign direct investment position in U.S. businessesand real estate - or the accumulated book value of all foreign investments - increased by $20 billion in 1993, nearly three times faster than the amount recorded in 1992. Preliminary data indicate that foreigners' investments could surpass $30 billion in 1994. Economists generally believe that foreign direct investment yields positive net benefits to both the recipient and the investing countries. For some American firms, foreign investments have been especially beneficial, because they supplied the firms with funds during times when many U.S. commercial banks were unwilling to finance them.
International Financial Institutions and Environment: Multilateral Development Banks and the Global Environment Facility
The World Bank and other multilateral development banks (MDB) have come under increasing pressure to assess the environmental impacts of bank-sponsored projects. The U.S. Congress has required that U.S. participation be based on policies that encourage the banks to raise the priority of environmental protection in their operations and to address environmental impacts; however, major issues continue to revolve around the effectiveness of all the MDBs in promoting environmentally sustainable development. Additionally, increasing concern over global environmental problems led to the creation in 1990 of a new multilateral fund -- the Global Environment Facility (GEF) -- to fund environmental projects of global concern that were generally not being funded by the MDBs. The pilot phase of the GEF ended in December 1993, and participants are currently in the process of determining how, or if, it should function as a permanent entity.
Japanese and U.S. Economic Involvement in Asia and the Pacific: Comparative Data and Analysis
In a world in which economic and trade performance are fast gaining acceptance as important components of national power and well being, Congress has become increasingly interested in the comparative success of U.S. business in the vast, rapidly growing Asia-Pacific region. For the most part, Congress has tended to view Japan as the main competitor of the United States in Asian markets and the standard against which U.S. success is measured. The stakes for the United States are considerable. Exclusive of Japan, the Asia-Pacific region accounted for $ 92 billion in U.S. exports in 1993 and $ 138 billion in imports, or about 20 percent of total U.S. exports and 24 percent of U.S. global imports. A number of projections indicate that Asia will account for the largest share of world trade growth in the next decade. Japan's growing economic presence has been accompanied by a relative increase in its political influence vis-a-vis that of the United States, a factor of considerable long term significance for U.S. interests, and it would appear the availability of alternative Asian markets has strengthened Japan's resistance to U.S. trade demands.
Japanese Trade Balance and Exchange Rate: Seeing Through the Numbers
Measured in dollars, Japan's global trade surplus stands at a record level. Also in recent months the Japanese yen has appreciated markedly against the dollar. The two events seem to foster a sizable degree of concern among many Americans, perhaps, taken to be evidence of Japan's economic success and the United States' economic failure. Things need not be as they seem, however.
A Reappraisal of Foreign Investment Policy
The rise of the multinational corporation and the increased flow of capital across national borders have raised anew the question of how to treat foreign direct investment, both inward and outward. The U.S. government and, increasingly, other governments advocate that, with some exceptions, economic policies should be neutral in the treatment of investment, foreign and domestic, inward and outward. This report discusses the changing view of foreign investment, both nationally and internationally.
The Yen/Dollar Exchange Rate
The dollar declined abruptly in value against the yen in the second quarter of 1994, spurring the central banks of seventeen nations to coordinate a series of intervention efforts in the world's currency trading markets. In addition, the dollar's decline sparked discussions of the possible policy moves the United States and other nations might take to stem the fluctuations in the value of the dollar. Economic theory and empirical evidence indicate that the underlying movement of the exchange rate is tied to the long-term, macroeconomic movements of the economy, or to the combined movements of the economies of different countries, such as the United States and Japan. These macroeconomic factors account for at least half of the overall movement of exchange rates.
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