WASHINGTON--"Fair trade in financial services" staged a comeback on Capitol Hill last week as key lawmakers in the House and Senate introduced bills aimed at cracking open foreign markets for banks and other financial providers.
Senate Banking Committee Chairman Donald W. Riegle Jr., D-Mich., the prime mover behind last year's legislative effort, introduced a new version of the Fair Trade in Financial Services bill in the Senate. He was joined by Sen. Alfonse M. D'Amato of New York, the panel's ranking Republican.
An identical bill was introduced in the House by Rep. Charles E. Schumer, D-N.Y., and Rep. Jim Leach, R-Iowa.
Prospect of Enactment
This year's bill has a much better chance of being enacted than the earlier version, in large part because the Clinton administration is likely to unite behind it, said Karen Shaw, president of the Institute for Strategy Development.
"The last time, Treasury supported the bill, but the U.S. trade representative opposed it," she said, referring to a split within the Bush administration.
The bill permits, but does not require, the Department of Treasury to deny applications from financial services providers whose home countries do not treat U.S. firms on the same footing as domestic companies.
"For years, financial firms from some foreign countries have expanded their market share here," said Sen. Riegle. "Yet when our financial firms want to expand overseas, we encounter substantial market barriers with some of our trading partners.
"I say, |Enough is enough.'" he added. "If they want equal treatment here, then we have every right to equal competitive opportunities in their country."
The Schumer Amendment
The bill follows in the footsteps of a 1988 amendment sponsored by Rep. Schumer that was intended to open up the government securities markets in other countries to U.S. banks.
The Schumer measure, which was aimed primarily at Japan, barred foreign banks from joining the Federal Reserve's list of primary dealers if their home countries discriminated against U.S. institutions.
Rep. Schumer said the Treasury has been negotiating with Japan and other countries for more than a decade in an effort to open up their financial services markets.
"Unfortunately, these negotiations have been less than successful," he said. "Hence, the need for this legislation."