The Senate Banking Committee completed its unusually prolonged consideration of anti-boycott legislation yesterday after making the bill somewhat less "anti."
With representatives of the Carter administration and U.S. international oil companies and other businesses watching approvingly from the sidelines, two freshman Republican senators took the lead in preserving greater freedom for U.S. companies to comply with other nations' discriminatory import laws.
Although it applies worldwide, the legislation is aimed at the Arab economic boycott of Israel. It is designed to make it illegal for an American company to participate in a boycott of Israel or of other firms doing business with Israel as a condition of doing business with Arab nations.
Chairman William Proxmire (D-Wis.), who favored tighter restrictions on U.S. companies, said he believes the legislation now permits "a somewhat effective boycott against Israel."
The key 8-to-7 vote on the committee's fourth day of work on the bill was a victory for Carter post-inauguration policy.
During the campaign Carter said he would "do everything I can as President to stop this boycott of American businesses by the Arab countries."
During yesterday's committee meeting, senator after senator made clear that the State and Commerce departments had been urging amendments to pull some teeth from the bill.
"The administration wants some law, but they don't want a law with any teeth at all. Sen. Edward W. Brooke (R-Mass.) remarked.
When Sen. Paul S. Sarbanes (D-Md.) sought to rally support for restrictive legislation by quoting Carter, the audience chuckled at the date of the Carter statement - Oct. 6, before the election.
The key amendment offered by Sen. Harrison H. Schmitt (R-N.M.) and adopted 3 to 7 grants the President power to allow U.S. companies to comply with other nations' discriminatory import laws on a case-by-case basis.
After it was adopted, an amendment by Sen. Richard G. Lugar (R-Ind.) that would have permitted U.S. citizens working abroad to discriminate against U.S. firms even in the absence of foreign pressure was defeated 11 to 4.
Proxmire and Brooke questioned whether the Schmitt amendment doesn't gut the anti-boycott bill. Thye arqued that since Carter wanted the amendment it would be natural that he would want to grant permissions liberally. Proxmire said "the facts of life" are that State and Commerce will administer the bill while the President is busy with other things.
Lugar told reporters that the Schmitt amendment was based on language worked out with the State Department. Sen. Robert Morgan (D-N.C.) modified the amendment, noting that his modification had the approval of the general counsel's office at the Commerce Department.
Lugar said a number of U.S. companies had told him they would hesitate to station Americans in the Middle East because of the likelihood those representatives could not avoid violating either the laws of their host country of the U.S. anti-boycott legilation.
After the committee meeting, he told reporters that Exxon and Mobil were among the companies that expressed such fears. Lugar said he thought much of their anxiety would be relieved by approval of the Schmitt amendment.
Lugar also mentioned pressure from another direction by quoting from a breakfast about 16 senators had Monday with Sheikh Zaki Yamani, Saudi Arabia's petroleum minister.
"Yamani left no doubt that it is the intent of Saudi Arabia to continue economic warfare against Israel," Lugar said. The United States will be getting 3.5 million barrels of oil a day from Saudi Arabia by 1933, according to forecasts. U.S. imports from Arab oil state have doubled in the last year.
Schmitt said that his amendment's purpose was to enable U.S. companies to import goods into a foreign country that they need for their operations there. The United States provides many services to Arab nations which contribute to relations in the region and the service depend on the2 availability of certain imported goods.