uarantees the company has lost some potential business to a consortium led by Mitsubishi, which is backed by Japanese export credit guarantees. Caterpillar estimates it lost out on $200 million in sales as a result of the Ex-Im Bank decision. The decision “gave an enormous advantage to our European and Japanese competitors,” said William Lane, chief lobbyist for the company in Washington, in a recent interview (Ibid.). Some U.S. companies were forced to use overseas subsidiaries to stay in the running for the project: Westinghouse and GEboth of which lack hydropower expertise in the United Statesrouted their bids for Three Gorges work through Canadian subsidiaries (only the GE bid was successful). And Voith’s American subsidiary was forced to withdraw from the tender in favor of its German parent, which won $85 million in contracts (Ibid.). According to the U.S. business lobby, more is at stake than even the hundreds of millions of dollars of contracts. American executives argue that the Three Gorges project is a key way to establish a foothold in China, the world’s fastest growing market (Contest Heats Up 1997). Caterpillar, for instance, sees participation in a showpiece project like the dam as a way of developing good relations with local officials and companies. Since doing business in China is all about establishing relationships, companies are gambling that profits will materialize in the future as the market continues to grow and opens further to foreign investment. These companies see acquiring a stake in the dam project as a way of gaining a “first-mover’s” advantage. Critics argue that the Clinton administration’sdecision illustrates the seeming futility of theincreasingly frequent U.S. practice of trying tochange a foreign government’s behavior byunilaterally imposing economic sanctions. Whilethe United States has led the internationalenvironmental opposition to the proje...
