Loan Guarantees

Secretary of State James A. Baker III scolded Israel on Tuesday for opening a new Jewish settlement on occupied Arab territory in the midst of peace negotiations, saying that the action seemed "provocative" and did not help "create a positive environment" for the talks.

The Syrian government warned Wednesday that it would consider a U.S. decision to guarantee $10 billion in housing loans to Israel "a major obstacle to peace" because it would encourage the construction of new Jewish settlements in occupied Arab territories. But Foreign Minister Farouk Shareh did not threaten to boycott a U.S.-promoted Arab-Israeli peace conference if the loan guarantees are granted, contrary to the predictions of some U.S. officials.

The Export-Import Bank is suspending until March 27 new loan guarantees for U.S. projects in China, a move that could hurt American investors as well as China's economy. The bank acted Wednesday at the request of Secretary of State Warren Christopher. It gives the Clinton administration time to obtain Beijing's explanation for reports that it sold technology to Pakistan that can be used in making nuclear weapons.

The White House expressed confidence Monday that, despite an outcry from Jerusalem, the prospects now appear favorable that the United States and Israel will resolve a potentially explosive dispute over new housing loans. "We think there's still a good chance we can work this out," spokesman Marlin Fitzwater said. "They want the loan guarantees and they want the peace process--both are in their interests." The statement of assurance came as Secretary of State James A.

Early in his Administration, Ronald Reagan made an important foreign-policy decision: Whenever the United States engaged in government-to-government negotiations with the Soviet Union, one of the first issues on the agenda would be the Soviet Union's atrocious record on human rights--including its persecution of Soviet Jews.

As prospects for a U.S. aid package for Mexico's economy have grown increasingly uncertain in Congress, U.S. investors and Mexican leaders find themselves entertaining some grim scenarios. Economists and trade experts say a refusal by Congress to approve President Clinton's $40 billion in loan guarantees would deliver a devastating economic blow to Mexico--and have severe repercussions on this side of the border and throughout Latin America as well.

The House and the Senate voted today to impose trade sanctions against Iraq, including an end to the $1.2 billion in loan guarantees Baghdad receives to buy U.S. farm and commercial products, but the House measure would allow the penalties to be waived if they hurt American farmers. Both houses attached amendments cutting off credit guarantees to the farm bill, which must still be passed by Congress before it can go to President Bush.

In a retreat from his effort to separate a request for new U.S. aid from his settlements policy, Prime Minister Yitzhak Shamir is resigned to having conditions imposed by the United States on loan guarantees, top Israeli officials said Sunday.

Does this sound ridiculous: George Herbert Walker Bush, the tall, aristocratic leader of the world's one remaining superpower, is fed up with being bullied by short, squat Israeli Prime Minister Yitzhak Shamir and his friends? Actually, it goes a long way to explain the Administration's extraordinary behavior toward Israel in recent days. Bush has made it clear that he is prepared to wage an all-out fight to prevent Congress from providing $10 billion in loan guarantees to Israel this fall.

This nation's already battered financial markets on Monday suffered one of their worst days since Mexico's economic crisis began nearly six weeks ago, with the peso closing at record lows against the U.S. dollar and the stock market losing 3.3% of its value within the first hour of trading.