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WASHINGTON — All politics really is local, even when it comes to
national security.

Caterpillar Inc, which calls China a “key” overseas market, can thank
House Speaker Dennis Hastert for closing what was once a yawning gap in
votes for permanent normal trade relations with China.

PNTR, passed Wednesday by the House, for the first time in 25 years
releases the communist state from annual review of its record on
human-rights and nuclear nonproliferation.

House Speaker J. Dennis Hastert

Hastert has said in public statements that the trade deal was “in the
best interest of America.” But House aides, speaking on the condition of
anonymity, say the Illinois Republican had narrower interests in mind –
namely, Peoria, Ill.-based Caterpillar.

The world’s largest maker of construction equipment operates plants in
Hastert’s 14th Illinois district — as well as in China.
Caterpillar, a big GOP and Hastert donor, has lobbied hard for PNTR.

A large chunk of its overseas sales are to China. And over the last five
years, the company has invested in five joint-venture manufacturing
plants in China.

With PNTR, Caterpillar is well positioned to take advantage of one of
China’s biggest public works projects.

“We want to participate and help the massive roadbuilding program
planned by China’s construction of its National Trunk Highway System,”
said S.R. Ramseyer, Caterpillar’s vice president for the Asia Pacific
Division.

On March 9, as the pro-PNTR lobbying effort was getting traction,
Caterpillar took a giant step toward that goal.

The company cut a deal with Beijing to set up a plant to build highway
paving equipment, called “vibratory compactors,” for sale to China. The
joint venture will be called Caterpillar Paving Products Xuzhou Ltd.

To gain votes for PNTR, Hastert engaged in some horse-trading. He got
President Clinton, who’s lobbied hardest for China trade, to agree to
sign a Republican initiative that gives businesses tax breaks to invest
in blighted urban and rural areas. In exchange, a lot of fence-sitters
came over to vote for PNTR.

Hastert, along with several other Republicans, stood behind Clinton when
he made the announcement Tuesday in the Roosevelt Room of the White
House.

On May 17, Hastert released a long statement arguing for passage of
PNTR. The full-page press release, titled “Free trade with China helps
farmers,” does not mention $19.7 billion-in-sales Caterpillar.

Through its PAC, Caterpillar in 1999 gave $94,500 to Republican
candidates, Federal Election Commission records show. It gave $9,000 to
Democrats.

Cat’s PAC donated at least $10,000 to Hastert’s 1998 campaign.

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