House Report 107-249 - BIPARTISAN TRADE PROMOTION AUTHORITY ACT OF 2001

[House Report 107-249]
[From the U.S. Government Publishing Office]

107th Congress Rept. 107-249
HOUSE OF REPRESENTATIVES
1st Session Part 1

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BIPARTISAN TRADE PROMOTION AUTHORITY ACT OF 2001

_______

October 16, 2001.--Ordered to be printed

_______

Mr. Thomas, from the Committee on Ways and Means, submitted the
following

R E P O R T

together with

ADDITIONAL AND DISSENTING VIEWS

[To accompany H.R. 3005]

[Including cost estimate of the Congressional Budget Office]

The Committee on Ways and Means, to whom was referred the
bill (H.R. 3005) to extend trade authorities procedures with
respect to reciprocal trade agreements, having considered the
same, report favorably thereon with an amendment and recommend
that the bill as amended do pass.

CONTENTS

Page
I. Introduction....................................................16
A. Purpose and Summary................................. 16
B. Background and Need for Legislation................. 16
C. Legislative History................................. 18
II. Explanation of the Bill.........................................18
III. Vote of the Committee...........................................46
IV. Budget Effects of the Bill......................................47
A. Committee Estimates of Budgetary Effects............ 47
B. Budget Authority and Tax Expenditures............... 47
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 47
V. Other Matters To Be Discussed Under the Rules of the House......48
A. Committee Oversight Findings and Recommendations.... 48
B. Statement of General Performance Goals and
Objectives......................................... 49
C. Constitutional Authority Statement.................. 49
VI. Changes in Existing Law Made by the Bill, as Reported...........49
VII. Additional and Dissenting Views.................................54
The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE AND FINDINGS.

(a) Short Title.--This Act may be cited as the ``Bipartisan Trade
Promotion Authority Act of 2001''.
(b) Findings.--The Congress makes the following findings:
(1) The expansion of international trade is vital to the
national security of the United States. Trade is critical to
the economic growth and strength of the United States and to
its leadership in the world. Stable trading relationships
promote security and prosperity. Trade agreements today serve
the same purposes that security pacts played during the Cold
War, binding nations together through a series of mutual rights
and obligations. Leadership by the United States in
international trade fosters open markets, democracy, and peace
throughout the world.
(2) The national security of the United States depends on its
economic security, which in turn is founded upon a vibrant and
growing industrial base. Trade expansion has been the engine of
economic growth. Trade agreements maximize opportunities for
the critical sectors and building blocks of the economy of the
United States, such as information technology,
telecommunications and other leading technologies, basic
industries, capital equipment, medical equipment, services,
agriculture, environmental technology, and intellectual
property. Trade will create new opportunities for the United
States and preserve the unparalleled strength of the United
States in economic, political, and military affairs. The United
States, secured by expanding trade and economic opportunities,
will meet the challenges of the twenty-first century.

SEC. 2. TRADE NEGOTIATING OBJECTIVES.

(a) Overall Trade Negotiating Objectives.--The overall trade
negotiating objectives of the United States for agreements subject to
the provisions of section 3 are--
(1) to obtain more open, equitable, and reciprocal market
access;
(2) to obtain the reduction or elimination of barriers and
distortions that are directly related to trade and that
decrease market opportunities for United States exports or
otherwise distort United States trade;
(3) to further strengthen the system of international trading
disciplines and procedures, including dispute settlement;
(4) to foster economic growth, raise living standards, and
promote full employment in the United States and to enhance the
global economy;
(5) to ensure that trade and environmental policies are
mutually supportive and to seek to protect and preserve the
environment and enhance the international means of doing so,
while optimizing the use of the world's resources; and
(6) to promote respect for worker rights and the rights of
children consistent with core labor standards of the
International Labor Organization (as defined in section 10(2))
and an understanding of the relationship between trade and
worker rights.
(b) Principal Trade Negotiating Objectives.--
(1) Trade barriers and distortions.--The principal
negotiating objectives of the United States regarding trade
barriers and other trade distortions are--
(A) to expand competitive market opportunities for
United States exports and to obtain fairer and more
open conditions of trade by reducing or eliminating
tariff and nontariff barriers and policies and
practices of foreign governments directly related to
trade that decrease market opportunities for United
States exports or otherwise distort United States
trade; and
(B) to obtain reciprocal tariff and nontariff barrier
elimination agreements, with particular attention to
those tariff categories covered in section 111(b) of
the Uruguay Round Agreements Act (19 U.S.C. 3521(b)).
(2) Trade in services.--The principal negotiating objective
of the United States regarding trade in services is to reduce
or eliminate barriers to international trade in services,
including regulatory and other barriers that deny national
treatment and market access or unreasonably restrict the
establishment or operations of service suppliers.
(3) Foreign investment.--The principal negotiating objective
of the United States regarding foreign investment is to reduce
or eliminate artificial or trade-distorting barriers to trade-
related foreign investment by--
(A) reducing or eliminating exceptions to the
principle of national treatment;
(B) freeing the transfer of funds relating to
investments;
(C) reducing or eliminating performance requirements,
forced technology transfers, and other unreasonable
barriers to the establishment and operation of
investments;
(D) seeking to establish standards for expropriation
and compensation for expropriation, consistent with
United States legal principles and practice;
(E) providing meaningful procedures for resolving
investment disputes; and
(F) seeking to improve mechanisms used to resolve
disputes between an investor and a government through--
(i) mechanisms to eliminate frivolous claims;
(ii) procedures to ensure the efficient
selection of arbitrators and the expeditious
disposition of claims; and
(iii) procedures to increase transparency in
investment disputes.
(4) Intellectual property.--The principal negotiating
objectives of the United States regarding trade-related
intellectual property are--
(A) to further promote adequate and effective
protection of intellectual property rights, including
through--
(i)(I) ensuring accelerated and full
implementation of the Agreement on Trade-
Related Aspects of Intellectual Property Rights
referred to in section 101(d)(15) of the
Uruguay Round Agreements Act (19 U.S.C.
3511(d)(15)), particularly with respect to
meeting enforcement obligations under that
agreement; and
(II) ensuring that the provisions of any
multilateral or bilateral trade agreement
governing intellectual property rights that is
entered into by the United States reflect a
standard of protection similar to that found in
United States law;
(ii) providing strong protection for new and
emerging technologies and new methods of
transmitting and distributing products
embodying intellectual property;
(iii) preventing or eliminating
discrimination with respect to matters
affecting the availability, acquisition, scope,
maintenance, use, and enforcement of
intellectual property rights;
(iv) ensuring that standards of protection
and enforcement keep pace with technological
developments, and in particular ensuring that
rightholders have the legal and technological
means to control the use of their works through
the Internet and other global communication
media, and to prevent the unauthorized use of
their works; and
(v) providing strong enforcement of
intellectual property rights, including through
accessible, expeditious, and effective civil,
administrative, and criminal enforcement
mechanisms; and
(B) to secure fair, equitable, and nondiscriminatory
market access opportunities for United States persons
that rely upon intellectual property protection.
(5) Transparency.--The principal negotiating objective of the
United States with respect to transparency is to obtain wider
and broader application of the principle of transparency
through--
(A) increased and more timely public access to
information regarding trade issues and the activities
of international trade institutions;
(B) increased openness at the WTO and other
international trade fora by increasing public access to
appropriate meetings, proceedings, and submissions,
including with regard to dispute settlement and
investment; and
(C) increased and more timely public access to all
notifications and supporting documentation submitted by
parties to the WTO.
(6) Anti-corruption.--The principal negotiating objectives of
the United States with respect to the use of money or other
things of value to influence acts, decisions, or omissions of
foreign governments or officials or to secure any improper
advantage in a manner affecting trade are--
(A) to obtain high standards and appropriate domestic
enforcement mechanisms applicable to persons from all
countries participating in the applicable trade
agreement that prohibit such attempts to influence
acts, decisions, or omissions of foreign governments;
and
(B) to ensure that such standards do not place United
States persons at a competitive disadvantage in
international trade.
(7) Improvement of the wto and multilateral trade
agreements.--The principal negotiating objectives of the United
States regarding the improvement of the World Trade
Organization, the Uruguay Round Agreements, and other
multilateral and bilateral trade agreements are--
(A) to achieve full implementation and extend the
coverage of the World Trade Organization and such
agreements to products, sectors, and conditions of
trade not adequately covered; and
(B) to expand country participation in and
enhancement of the Information Technology Agreement and
other trade agreements.
(8) Regulatory practices.--The principal negotiating
objectives of the United States regarding the use of government
regulation or other practices by foreign governments to provide
a competitive advantage to their domestic producers, service
providers, or investors and thereby reduce market access for
United States goods, services, and investments are--
(A) to achieve increased transparency and opportunity
for the participation of affected parties in the
development of regulations;
(B) to require that proposed regulations be based on
sound science, cost-benefit analysis, risk assessment,
or other objective evidence;
(C) to establish consultative mechanisms among
parties to trade agreements to promote increased
transparency in developing guidelines, rules,
regulations, and laws for government procurement and
other regulatory regimes; and
(D) to achieve the elimination of government measures
such as price controls and reference pricing which deny
full market access for United States products.
(9) Electronic commerce.--The principal negotiating
objectives of the United States with respect to electronic
commerce are--
(A) to ensure that current obligations, rules,
disciplines, and commitments under the World Trade
Organization apply to electronic commerce;
(B) to ensure that--
(i) electronically delivered goods and
services receive no less favorable treatment
under trade rules and commitments than like
products delivered in physical form; and
(ii) the classification of such goods and
services ensures the most liberal trade
treatment possible;
(C) to ensure that governments refrain from
implementing trade-related measures that impede
electronic commerce;
(D) where legitimate policy objectives require
domestic regulations that affect electronic commerce,
to obtain commitments that any such regulations are the
least restrictive on trade, nondiscriminatory, and
transparent, and promote an open market environment;
and
(E) to extend the moratorium of the World Trade
Organization on duties on electronic transmissions.
(10) Reciprocal trade in agriculture.--(A) The principal
negotiating objective of the United States with respect to
agriculture is to obtain competitive opportunities for United
States exports of agricultural commodities in foreign markets
substantially equivalent to the competitive opportunities
afforded foreign exports in United States markets and to
achieve fairer and more open conditions of trade in bulk,
specialty crop, and value-added commodities by--
(i) reducing or eliminating, by a date certain,
tariffs or other charges that decrease market
opportunities for United States exports--
(I) giving priority to those products that
are subject to significantly higher tariffs or
subsidy regimes of major producing countries;
and
(II) providing reasonable adjustment periods
for United States import-sensitive products, in
close consultation with the Congress on such
products before initiating tariff reduction
negotiations;
(ii) reducing tariffs to levels that are the same as
or lower than those in the United States;
(iii) reducing or eliminating subsidies that decrease
market opportunities for United States exports or
unfairly distort agriculture markets to the detriment
of the United States;
(iv) allowing the preservation of programs that
support family farms and rural communities but do not
distort trade;
(v) developing disciplines for domestic support
programs, so that production that is in excess of
domestic food security needs is sold at world prices;
(vi) eliminating Government policies that create
price-depressing surpluses;
(vii) eliminating state trading enterprises whenever
possible;
(viii) developing, strengthening, and clarifying
rules and effective dispute settlement mechanisms to
eliminate practices that unfairly decrease United
States market access opportunities or distort
agricultural markets to the detriment of the United
States, particularly with respect to import-sensitive
products, including--
(I) unfair or trade-distorting activities of
state trading enterprises and other
administrative mechanisms, with emphasis on
requiring price transparency in the operation
of state trading enterprises and such other
mechanisms in order to end cross subsidization,
price discrimination, and price undercutting;
(II) unjustified trade restrictions or
commercial requirements, such as labeling, that
affect new technologies, including
biotechnology;
(III) unjustified sanitary or phytosanitary
restrictions, including those not based on
scientific principles in contravention of the
Uruguay Round Agreements;
(IV) other unjustified technical barriers to
trade; and
(V) restrictive rules in the administration
of tariff rate quotas;
(ix) eliminating practices that adversely affect
trade in perishable or cyclical products, while
improving import relief mechanisms to recognize the
unique characteristics of perishable and cyclical
agriculture;
(x) ensuring that the use of import relief mechanisms
for perishable and cyclical agriculture are as
accessible and timely to growers in the United States
as those mechanisms that are used by other countries;
(xi) taking into account whether a party to the
negotiations has failed to adhere to the provisions of
already existing trade agreements with the United
States or has circumvented obligations under those
agreements;
(xii) taking into account whether a product is
subject to market distortions by reason of a failure of
a major producing country to adhere to the provisions
of already existing trade agreements with the United
States or by the circumvention by that country of its
obligations under those agreements;
(xiii) otherwise ensuring that countries that accede
to the World Trade Organization have made meaningful
market liberalization commitments in agriculture;
(xiv) taking into account the impact that agreements
covering agriculture to which the United States is a
party, including the North American Free Trade
Agreement, have on the United States agricultural
industry; and
(xv) maintaining bona fide food assistance programs
and preserving United States market development and
export credit programs.
(B)(i) Before commencing negotiations with respect to
agriculture, the United States Trade Representative, in
consultation with the Congress, shall seek to develop a
position on the treatment of seasonal and perishable
agricultural products to be employed in the negotiations in
order to develop an international consensus on the treatment of
seasonal or perishable agricultural products in investigations
relating to dumping and safeguards and in any other relevant
area.
(ii) During any negotiations on agricultural subsidies, the
United States Trade Representative shall seek to establish the
common base year for calculating the Aggregated Measurement of
Support (as defined in the Agreement on Agriculture) as the end
of each country's Uruguay Round implementation period, as
reported in each country's Uruguay Round market access
schedule.
(iii) The negotiating objective provided in subparagraph (A)
applies with respect to agricultural matters to be addressed in
any trade agreement entered into under section 3 (a) or (b),
including any trade agreement entered into under section 3 (a)
or (b) that provides for accession to a trade agreement to
which the United States is already a party, such as the North
American Free Trade Agreement and the United States-Canada Free
Trade Agreement.
(11) Labor and the environment.--The principal negotiating
objectives of the United States with respect to labor and the
environment are--
(A) to ensure that a party to a trade agreement with
the United States does not fail to effectively enforce
its environmental or labor laws, through a sustained or
recurring course of action or inaction, in a manner
affecting trade between the United States and that
party after entry into force of a trade agreement
between those countries;
(B) to recognize that parties to a trade agreement
retain the right to exercise discretion with respect to
investigatory, prosecutorial, regulatory, and
compliance matters and to make decisions regarding the
allocation of resources to enforcement with respect to
other labor or environmental matters determined to have
higher priorities, and to recognize that a country is
effectively enforcing its laws if a course of action or
inaction reflects a reasonable exercise of such
discretion, or results from a bona fide decision
regarding the allocation of resources;
(C) to strengthen the capacity of United States
trading partners to promote respect for core labor
standards (as defined in section 10(2));
(D) to strengthen the capacity of United States
trading partners to protect the environment through the
promotion of sustainable development;
(E) to reduce or eliminate government practices or
policies that unduly threaten sustainable development;
(F) to seek market access, through the elimination of
tariffs and nontariff barriers, for United States
environmental technologies, goods, and services; and
(G) to ensure that labor, environmental, health, or
safety policies and practices of the parties to trade
agreements with the United States do not arbitrarily or
unjustifiably discriminate against United States
exports or serve as disguised barriers to trade.
(12) Dispute settlement and enforcement.--The principal
negotiating objectives of the United States with respect to
dispute settlement and enforcement of trade agreements are--
(A) to seek provisions in trade agreements providing
for resolution of disputes between governments under
those trade agreements in an effective, timely,
transparent, equitable, and reasoned manner, requiring
determinations based on facts and the principles of the
agreements, with the goal of increasing compliance with
the agreements;
(B) to seek to strengthen the capacity of the Trade
Policy Review Mechanism of the World Trade Organization
to review compliance with commitments;
(C) to seek provisions encouraging the early
identification and settlement of disputes through
consultation;
(D) to seek provisions to encourage the provision of
trade-expanding compensation if a party to a dispute
under the agreement does not come into compliance with
its obligations under the agreement;
(E) to seek provisions to impose a penalty upon a
party to a dispute under the agreement that--
(i) encourages compliance with the
obligations of the agreement;
(ii) is appropriate to the parties, nature,
subject matter, and scope of the violation; and
(iii) has the aim of not adversely affecting
parties or interests not party to the dispute
while maintaining the effectiveness of the
enforcement mechanism; and
(F) to seek provisions that treat United States
principal negotiating objectives equally with respect
to--
(i) the ability to resort to dispute
settlement under the applicable agreement;
(ii) the availability of equivalent dispute
settlement procedures; and
(iii) the availability of equivalent
remedies.
(13) WTO extended negotiations.--The principal negotiating
objectives of the United States regarding trade in civil
aircraft are those set forth in section 135(c) of the Uruguay
Round Agreements Act (19 U.S.C. 3355(c)) and regarding rules of
origin are the conclusion of an agreement described in section
132 of that Act (19 U.S.C. 3552).
(c) Promotion of Certain Priorities.--In order to address and
maintain United States competitiveness in the global economy, the
President shall--
(1) seek greater cooperation between the WTO and the ILO;
(2) seek to establish consultative mechanisms among parties
to trade agreements to strengthen the capacity of United States
trading partners to promote respect for core labor standards
(as defined in section 10(2)), and report to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate on the content and operation
of such mechanisms;
(3) seek to establish consultative mechanisms among parties
to trade agreements to strengthen the capacity of United States
trading partners to develop and implement standards for the
protection of the environment and human health based on sound
science, and report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate on the content and operation of such mechanisms;
(4) conduct environmental reviews of future trade and
investment agreements, consistent with Executive Order 13141 of
November 16, 1999 and its relevant guidelines, and report to
the Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate on such reviews;
(5) review the impact of future trade agreements on United
States employment, modeled after Executive Order 13141, and
report to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate on
such review;
(6) take into account other legitimate United States domestic
objectives including, but not limited to, the protection of
legitimate health or safety, essential security, and consumer
interests and the law and regulations related thereto;
(7) have the Secretary of Labor consult with any country
seeking a trade agreement with the United States concerning
that country's labor laws and provide technical assistance to
that country if needed;
(8) with respect to any trade agreement which the President
seeks to implement under trade authorities procedures, submit
to the Congress a report describing the extent to which the
country or countries that are parties to the agreement have in
effect laws governing exploitative child labor;
(9) preserve the ability of the United States to enforce
rigorously its trade laws, including the antidumping and
countervailing duty laws, and avoid agreements which lessen the
effectiveness of domestic and international disciplines on
unfair trade, especially dumping and subsidies, in order to
ensure that United States workers, agricultural producers, and
firms can compete fully on fair terms and enjoy the benefits of
reciprocal trade concessions;
(10) continue to promote consideration of multilateral
environmental agreements and consult with parties to such
agreements regarding the consistency of any such agreement that
includes trade measures with existing environmental exceptions
under Article XX of the GATT 1994; and
(11) report to the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the Senate,
not later than 12 months after the imposition of a penalty or
remedy by the United States permitted by a trade agreement to
which this Act applies, on the effectiveness of the penalty or
remedy applied under United States law in enforcing United
States rights under the trade agreement.
The report under paragraph (11) shall address whether the penalty or
remedy was effective in changing the behavior of the targeted party and
whether the penalty or remedy had any adverse impact on parties or
interests not party to the dispute.
(d) Consultations.--
(1) Consultations with congressional advisers.--In the course
of negotiations conducted under this Act, the United States
Trade Representative shall consult closely and on a timely
basis with, and keep fully apprised of the negotiations, the
Congressional Oversight Group convened under section 7 and all
committees of the House of Representatives and the Senate with
jurisdiction over laws that would be affected by a trade
agreement resulting from the negotiations.
(2) Consultation before agreement initialed.--In the course
of negotiations conducted under this Act, the United States
Trade Representative shall--
(A) consult closely and on a timely basis (including
immediately before initialing an agreement) with, and
keep fully apprised of the negotiations, the
congressional advisers for trade policy and
negotiations appointed under section 161 of the Trade
Act of 1974 (19 U.S.C. 2211), the Committee on Ways and
Means of the House of Representatives, the Committee on
Finance of the Senate, and the Congressional Oversight
Group convened under section 7; and
(B) with regard to any negotiations and agreement
relating to agricultural trade, also consult closely
and on a timely basis (including immediately before
initialing an agreement) with, and keep fully apprised
of the negotiations, the Committee on Agriculture of
the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate.
(e) Adherence to Obligations Under Uruguay Round Agreements.--In
determining whether to enter into negotiations with a particular
country, the President shall take into account the extent to which that
country has implemented, or has accelerated the implementation of, its
obligations under the Uruguay Round Agreements.

SEC. 3. TRADE AGREEMENTS AUTHORITY.

(a) Agreements Regarding Tariff Barriers.--
(1) In general.--Whenever the President determines that one
or more existing duties or other import restrictions of any
foreign country or the United States are unduly burdening and
restricting the foreign trade of the United States and that the
purposes, policies, priorities, and objectives of this Act will
be promoted thereby, the President--
(A) may enter into trade agreements with foreign
countries before--
(i) June 1, 2005; or
(ii) June 1, 2007, if trade authorities
procedures are extended under subsection (c);
and
(B) may, subject to paragraphs (2) and (3),
proclaim--
(i) such modification or continuance of any
existing duty,
(ii) such continuance of existing duty-free
or excise treatment, or
(iii) such additional duties,
as the President determines to be required or
appropriate to carry out any such trade agreement.
The President shall notify the Congress of the President's
intention to enter into an agreement under this subsection.
(2) Limitations.--No proclamation may be made under paragraph
(1) that--
(A) reduces any rate of duty (other than a rate of
duty that does not exceed 5 percent ad valorem on the
date of the enactment of this Act) to a rate of duty
which is less than 50 percent of the rate of such duty
that applies on such date of enactment; or
(B) increases any rate of duty above the rate that
applied on the date of the enactment of this Act.
(3) Aggregate reduction; exemption from staging.--
(A) Aggregate reduction.--Except as provided in
subparagraph (B), the aggregate reduction in the rate
of duty on any article which is in effect on any day
pursuant to a trade agreement entered into under
paragraph (1) shall not exceed the aggregate reduction
which would have been in effect on such day if--
(i) a reduction of 3 percent ad valorem or a
reduction of one-tenth of the total reduction,
whichever is greater, had taken effect on the
effective date of the first reduction
proclaimed under paragraph (1) to carry out
such agreement with respect to such article;
and
(ii) a reduction equal to the amount
applicable under clause (i) had taken effect at
1-year intervals after the effective date of
such first reduction.
(B) Exemption from staging.--No staging is required
under subparagraph (A) with respect to a duty reduction
that is proclaimed under paragraph (1) for an article
of a kind that is not produced in the United States.
The United States International Trade Commission shall
advise the President of the identity of articles that
may be exempted from staging under this subparagraph.
(4) Rounding.--If the President determines that such action
will simplify the computation of reductions under paragraph
(3), the President may round an annual reduction by an amount
equal to the lesser of--
(A) the difference between the reduction without
regard to this paragraph and the next lower whole
number; or
(B) one-half of 1 percent ad valorem.
(5) Other limitations.--A rate of duty reduction that may not
be proclaimed by reason of paragraph (2) may take effect only
if a provision authorizing such reduction is included within an
implementing bill provided for under section 5 and that bill is
enacted into law.
(6) Other tariff modifications.--Notwithstanding paragraphs
(1)(B) and (2) through (5), and subject to the consultation and
layover requirements of section 115 of the Uruguay Round
Agreements Act, the President may proclaim the modification of
any duty or staged rate reduction of any duty set forth in
Schedule XX, as defined in section 2(5) of that Act, if the
United States agrees to such modification or staged rate
reduction in a negotiation for the reciprocal elimination or
harmonization of duties under the auspices of the World Trade
Organization.
(7) Authority under uruguay round agreements act not
affected.--Nothing in this subsection shall limit the authority
provided to the President under section 111(b) of the Uruguay
Round Agreements Act (19 U.S.C. 3521(b)).
(b) Agreements Regarding Tariff and Nontariff Barriers.--
(1) In general.--(A) Whenever the President determines that--
(i) one or more existing duties or any other import
restriction of any foreign country or the United States
or any other barrier to, or other distortion of,
international trade unduly burdens or restricts the
foreign trade of the United States or adversely affects
the United States economy; or
(ii) the imposition of any such barrier or distortion
is likely to result in such a burden, restriction, or
effect;
and that the purposes, policies, priorities, and objectives of
this Act will be promoted thereby, the President may enter into
a trade agreement described in subparagraph (B) during the
period described in subparagraph (C).
(B) The President may enter into a trade agreement under
subparagraph (A) with foreign countries providing for--
(i) the reduction or elimination of a duty,
restriction, barrier, or other distortion described in
subparagraph (A), or
(ii) the prohibition of, or limitation on the
imposition of, such barrier or other distortion.
(C) The President may enter into a trade agreement under this
paragraph before--
(i) June 1, 2005; or
(ii) June 1, 2007, if trade authorities procedures
are extended under subsection (c).
(2) Conditions.--A trade agreement may be entered into under
this subsection only if such agreement makes progress in
meeting the applicable objectives described in section 2 (a)
and (b) and the President satisfies the conditions set forth in
section 4.
(3) Bills qualifying for trade authorities procedures.--(A)
The provisions of section 151 of the Trade Act of 1974 (in this
Act referred to as ``trade authorities procedures'') apply to a
bill of either House of Congress which contains provisions
described in subparagraph (B) to the same extent as such
section 151 applies to implementing bills under that section. A
bill to which this paragraph applies shall hereafter in this
Act be referred to as an ``implementing bill''.
(B) The provisions referred to in subparagraph (A) are--
(i) a provision approving a trade agreement entered
into under this subsection and approving the statement
of administrative action, if any, proposed to implement
such trade agreement; and
(ii) if changes in existing laws or new statutory
authority are required to implement such trade
agreement or agreements, provisions, necessary or
appropriate to implement such trade agreement or
agreements, either repealing or amending existing laws
or providing new statutory authority.
(c) Extension Disapproval Process for Congressional Trade Authorities
Procedures.--
(1) In general.--Except as provided in section 5(b)--
(A) the trade authorities procedures apply to
implementing bills submitted with respect to trade
agreements entered into under subsection (b) before
July 1, 2005; and
(B) the trade authorities procedures shall be
extended to implementing bills submitted with respect
to trade agreements entered into under subsection (b)
after June 30, 2005, and before July 1, 2007, if (and
only if)--
(i) the President requests such extension
under paragraph (2); and
(ii) neither House of the Congress adopts an
extension disapproval resolution under
paragraph (5) before June 1, 2005.
(2) Report to congress by the president.--If the President is
of the opinion that the trade authorities procedures should be
extended to implementing bills described in paragraph (1)(B),
the President shall submit to the Congress, not later than
March 1, 2005, a written report that contains a request for
such extension, together with--
(A) a description of all trade agreements that have
been negotiated under subsection (b) and the
anticipated schedule for submitting such agreements to
the Congress for approval;
(B) a description of the progress that has been made
in negotiations to achieve the purposes, policies,
priorities, and objectives of this Act, and a statement
that such progress justifies the continuation of
negotiations; and
(C) a statement of the reasons why the extension is
needed to complete the negotiations.
(3) Report to congress by the advisory committee.--The
President shall promptly inform the Advisory Committee for
Trade Policy and Negotiations established under section 135 of
the Trade Act of 1974 (19 U.S.C. 2155) of the President's
decision to submit a report to the Congress under paragraph
(2). The Advisory Committee shall submit to the Congress as
soon as practicable, but not later than May 1, 2005, a written
report that contains--
(A) its views regarding the progress that has been
made in negotiations to achieve the purposes, policies,
priorities, and objectives of this Act; and
(B) a statement of its views, and the reasons
therefor, regarding whether the extension requested
under paragraph (2) should be approved or disapproved.
(4) Status of reports.--The reports submitted to the Congress
under paragraphs (2) and (3), or any portion of such reports,
may be classified to the extent the President determines
appropriate.
(5) Extension disapproval resolutions.--(A) For purposes of
paragraph (1), the term ``extension disapproval resolution''
means a resolution of either House of the Congress, the sole
matter after the resolving clause of which is as follows:
``That the ____ disapproves the request of the President for
the extension, under section 3(c)(1)(B)(i) of the Bipartisan
Trade Promotion Authority Act of 2001, of the trade authorities
procedures under that Act to any implementing bill submitted
with respect to any trade agreement entered into under section
3(b) of that Act after June 30, 2005.'', with the blank space
being filled with the name of the resolving House of the
Congress.
(B) Extension disapproval resolutions--
(i) may be introduced in either House of the Congress
by any member of such House; and
(ii) shall be referred, in the House of
Representatives, to the Committee on Ways and Means
and, in addition, to the Committee on Rules.
(C) The provisions of sections 152 (d) and (e) of the Trade
Act of 1974 (19 U.S.C. 2192 (d) and (e)) (relating to the floor
consideration of certain resolutions in the House and Senate)
apply to extension disapproval resolutions.
(D) It is not in order for--
(i) the Senate to consider any extension disapproval
resolution not reported by the Committee on Finance;
(ii) the House of Representatives to consider any
extension disapproval resolution not reported by the
Committee on Ways and Means and, in addition, by the
Committee on Rules; or
(iii) either House of the Congress to consider an
extension disapproval resolution after June 30, 2005.
(d) Commencement of Negotiations.--In order to contribute to the
continued economic expansion of the United States, the President shall
commence negotiations covering tariff and nontariff barriers affecting
any industry, product, or service sector, and expand existing sectoral
agreements to countries that are not parties to those agreements, in
cases where the President determines that such negotiations are
feasible and timely and would benefit the United States. Such sectors
include agriculture, commercial services, intellectual property rights,
industrial and capital goods, government procurement, information
technology products, environmental technology and services, medical
equipment and services, civil aircraft, and infrastructure products. In
so doing, the President shall take into account all of the principal
negotiating objectives set forth in section 2(b).

SEC. 4. CONSULTATIONS AND ASSESSMENT.

(a) Notice and Consultation Before Negotiation.--The President, with
respect to any agreement that is subject to the provisions of section
3(b), shall--
(1) provide, at least 90 calendar days before initiating
negotiations, written notice to the Congress of the President's
intention to enter into the negotiations and set forth therein
the date the President intends to initiate such negotiations,
the specific United States objectives for the negotiations, and
whether the President intends to seek an agreement, or changes
to an existing agreement; and
(2) before and after submission of the notice, consult
regarding the negotiations with the Committee on Finance of the
Senate and the Committee on Ways and Means of the House of
Representatives, such other committees of the House and Senate
as the President deems appropriate, and the Congressional
Oversight group convened under section 7.
(b) Negotiations Regarding Agriculture.--Before initiating or
continuing negotiations the subject matter of which is directly related
to the subject matter under section 2(b)(10)(A)(i) with any country,
the President shall assess whether United States tariffs on
agricultural products that were bound under the Uruguay Round
Agreements are lower than the tariffs bound by that country. In
addition, the President shall consider whether the tariff levels bound
and applied throughout the world with respect to imports from the
United States are higher than United States tariffs and whether the
negotiation provides an opportunity to address any such disparity. The
President shall consult with the Committee on Ways and Means and the
Committee on Agriculture of the House of Representatives and the
Committee on Finance and the Committee on Agriculture, Nutrition, and
Forestry of the Senate concerning the results of the assessment,
whether it is appropriate for the United States to agree to further
tariff reductions based on the conclusions reached in the assessment,
and how all applicable negotiating objectives will be met.
(c) Consultation With Congress Before Agreements Entered Into.--
(1) Consultation.--Before entering into any trade agreement
under section 3(b), the President shall consult with--
(A) the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the
Senate;
(B) each other committee of the House and the Senate,
and each joint committee of the Congress, which has
jurisdiction over legislation involving subject matters
which would be affected by the trade agreement; and
(C) the Congressional Oversight Group convened under
section 7.
(2) Scope.--The consultation described in paragraph (1) shall
include consultation with respect to--
(A) the nature of the agreement;
(B) how and to what extent the agreement will achieve
the applicable purposes, policies, priorities, and
objectives of this Act; and
(C) the implementation of the agreement under section
5, including the general effect of the agreement on
existing laws.
(d) Advisory Committee Reports.--The report required under section
135(e)(1) of the Trade Act of 1974 regarding any trade agreement
entered into under section 3 (a) or (b) of this Act shall be provided
to the President, the Congress, and the United States Trade
Representative not later than 30 days after the date on which the
President notifies the Congress under section 3(a)(1) or 5(a)(1)(A) of
the President's intention to enter into the agreement.
(e) ITC Assessment.--
(1) In general.--The President, at least 90 calendar days
before the day on which the President enters into a trade
agreement under section 3(b), shall provide the International
Trade Commission (referred to in this subsection as ``the
Commission'') with the details of the agreement as it exists at
that time and request the Commission to prepare and submit an
assessment of the agreement as described in paragraph (2).
Between the time the President makes the request under this
paragraph and the time the Commission submits the assessment,
the President shall keep the Commission current with respect to
the details of the agreement.
(2) ITC assessment.--Not later than 90 calendar days after
the President enters into the agreement, the Commission shall
submit to the President and the Congress a report assessing the
likely impact of the agreement on the United States economy as
a whole and on specific industry sectors, including the impact
the agreement will have on the gross domestic product, exports
and imports, aggregate employment and employment opportunities,
the production, employment, and competitive position of
industries likely to be significantly affected by the
agreement, and the interests of United States consumers.
(3) Review of empirical literature.--In preparing the
assessment, the Commission shall review available economic
assessments regarding the agreement, including literature
regarding any substantially equivalent proposed agreement, and
shall provide in its assessment a description of the analyses
used and conclusions drawn in such literature, and a discussion
of areas of consensus and divergence between the various
analyses and conclusions, including those of the Commission
regarding the agreement.

SEC. 5. IMPLEMENTATION OF TRADE AGREEMENTS.

(a) In General.--
(1) Notification and submission.--Any agreement entered into
under section 3(b) shall enter into force with respect to the
United States if (and only if)--
(A) the President, at least 90 calendar days before
the day on which the President enters into the trade
agreement, notifies the House of Representatives and
the Senate of the President's intention to enter into
the agreement, and promptly thereafter publishes notice
of such intention in the Federal Register;
(B) within 60 days after entering into the agreement,
the President submits to the Congress a description of
those changes to existing laws that the President
considers would be required in order to bring the
United States into compliance with the agreement;
(C) after entering into the agreement, the President
submits to the Congress a copy of the final legal text
of the agreement, together with--
(i) a draft of an implementing bill described
in section 3(b)(3);
(ii) a statement of any administrative action
proposed to implement the trade agreement; and
(iii) the supporting information described in
paragraph (2); and
(D) the implementing bill is enacted into law.
(2) Supporting information.--The supporting information
required under paragraph (1)(C)(iii) consists of--
(A) an explanation as to how the implementing bill
and proposed administrative action will change or
affect existing law; and
(B) a statement--
(i) asserting that the agreement makes
progress in achieving the applicable purposes,
policies, priorities, and objectives of this
Act; and
(ii) setting forth the reasons of the
President regarding--
(I) how and to what extent the
agreement makes progress in achieving
the applicable purposes, policies, and
objectives referred to in clause (i);
(II) whether and how the agreement
changes provisions of an agreement
previously negotiated;
(III) how the agreement serves the
interests of United States commerce;
(IV) how the implementing bill meets
the standards set forth in section
3(b)(3); and
(V) how and to what extent the
agreement makes progress in achieving
the applicable purposes, policies, and
objectives referred to in section 2(c)
regarding the promotion of certain
priorities.
(3) Reciprocal benefits.--In order to ensure that a foreign
country that is not a party to a trade agreement entered into
under section 3(b) does not receive benefits under the
agreement unless the country is also subject to the obligations
under the agreement, the implementing bill submitted with
respect to the agreement shall provide that the benefits and
obligations under the agreement apply only to the parties to
the agreement, if such application is consistent with the terms
of the agreement. The implementing bill may also provide that
the benefits and obligations under the agreement do not apply
uniformly to all parties to the agreement, if such application
is consistent with the terms of the agreement.
(b) Limitations on Trade Authorities Procedures.--
(1) For lack of notice or consultations.--
(A) In general.--The trade authorities procedures
shall not apply to any implementing bill submitted with
respect to a trade agreement entered into under section
3(b) if during the 60-day period beginning on the date
that one House of Congress agrees to a procedural
disapproval resolution for lack of notice or
consultations with respect to that trade agreement, the
other House separately agrees to a procedural
disapproval resolution with respect to that agreement.
(B) Procedural disapproval resolution.--For purposes
of this paragraph, the term ``procedural disapproval
resolution'' means a resolution of either House of
Congress, the sole matter after the resolving clause of
which is as follows: ``That the President has failed or
refused to notify or consult (as the case may be) with
Congress in accordance with section 4 or 5 of the
Bipartisan Trade Promotion Authority Act of 2001 on
negotiations with respect to ____________ and,
therefore, the trade authorities procedures under that
Act shall not apply to any implementing bill submitted
with respect to that trade agreement.'', with the blank
space being filled with a description of the trade
agreement with respect to which the President is
considered to have failed or refused to notify or
consult.
(2) Procedures for considering resolutions.--(A) Procedural
disapproval resolutions--
(i) in the House of Representatives--
(I) shall be introduced by the chairman or
ranking minority member of the Committee on
Ways and Means or the chairman or ranking
minority member of the Committee on Rules;
(II) shall be referred to the Committee on
Ways and Means and, in addition, to the
Committee on Rules; and
(III) may not be amended by either Committee;
and
(ii) in the Senate shall be original resolutions of
the Committee on Finance.
(B) The provisions of section 152 (d) and (e) of the Trade
Act of 1974 (19 U.S.C. 2192 (d) and (e)) (relating to the floor
consideration of certain resolutions in the House and Senate)
apply to procedural disapproval resolutions.
(C) It is not in order for the House of Representatives to
consider any procedural disapproval resolution not reported by
the Committee on Ways and Means and, in addition, by the
Committee on Rules.
(c) Rules of House of Representatives and Senate.--Subsection (b) of
this section and section 3(c) are enacted by the Congress--
(1) as an exercise of the rulemaking power of the House of
Representatives and the Senate, respectively, and as such are
deemed a part of the rules of each House, respectively, and
such procedures supersede other rules only to the extent that
they are inconsistent with such other rules; and
(2) with the full recognition of the constitutional right of
either House to change the rules (so far as relating to the
procedures of that House) at any time, in the same manner, and
to the same extent as any other rule of that House.

SEC. 6. TREATMENT OF CERTAIN TRADE AGREEMENTS FOR WHICH NEGOTIATIONS
HAVE ALREADY BEGUN.

(a) Certain Agreements.--Notwithstanding section 3(b)(2), if an
agreement to which section 3(b) applies--
(1) is entered into under the auspices of the World Trade
Organization,
(2) is entered into with Chile,
(3) is entered into with Singapore, or
(4) establishes a Free Trade Area for the Americas,
and results from negotiations that were commenced before the date of
the enactment of this Act, subsection (b) shall apply.
(b) Treatment of Agreements.--In the case of any agreement to which
subsection (a) applies--
(1) the applicability of the trade authorities procedures to
implementing bills shall be determined without regard to the
requirements of section 4(a) (relating only to 90 days notice
prior to initiating negotiations), and any procedural
disapproval resolution under section 5(b)(1)(B) shall not be in
order on the basis of a failure or refusal to comply with the
provisions of section 4(a); and
(2) the President shall, as soon as feasible after the
enactment of this Act--
(A) notify the Congress of the negotiations described
in subsection (a), the specific United States
objectives in the negotiations, and whether the
President is seeking a new agreement or changes to an
existing agreement; and
(B) before and after submission of the notice,
consult regarding the negotiations with the committees
referred to in section 4(a)(2) and the Congressional
Oversight Group.

SEC. 7. CONGRESSIONAL OVERSIGHT GROUP.

(a) Members and Functions.--
(1) In general.--By not later than 60 days after the date of
the enactment of this Act, and not later than 30 days after the
convening of each Congress, the chairman of the Committee on
Ways and Means of the House of Representatives and the chairman
of the Committee on Finance of the Senate shall convene the
Congressional Oversight Group.
(2) Membership from the house.--In each Congress, the
Congressional Oversight Group shall be comprised of the
following Members of the House of Representatives:
(A) The chairman and ranking member of the Committee
on Ways and Means, and 3 additional members of such
Committee (not more than 2 of whom are members of the
same political party).
(B) The chairman and ranking member, or their
designees, of the committees of the House of
Representatives which would have, under the Rules of
the House of Representatives, jurisdiction over
provisions of law affected by a trade agreement
negotiations for which are conducted at any time during
that Congress and to which this Act would apply.
(3) Membership from the senate.--In each Congress, the
Congressional Oversight Group shall also be comprised of the
following members of the Senate:
(A) The chairman and ranking Member of the Committee
on Finance and 3 additional members of such Committee
(not more than 2 of whom are members of the same
political party).
(B) The chairman and ranking member, or their
designees, of the committees of the Senate which would
have, under the Rules of the Senate, jurisdiction over
provisions of law affected by a trade agreement
negotiations for which are conducted at any time during
that Congress and to which this Act would apply.
(4) Accreditation.--Each member of the Congressional
Oversight Group described in paragraph (2)(A) and (3)(A) shall
be accredited by the United States Trade Representative on
behalf of the President as official advisers to the United
States delegation in negotiations for any trade agreement to
which this Act applies. Each member of the Congressional
Oversight Group described in paragraph (2)(B) and (3)(B) shall
be accredited by the United States Trade Representative on
behalf of the President as official advisers to the United
States delegation in the negotiations by reason of which the
member is in the Congressional Oversight Group. The
Congressional Oversight Group shall consult with and provide
advice to the Trade Representative regarding the formulation of
specific objectives, negotiating strategies and positions, the
development of the applicable trade agreement, and compliance
and enforcement of the negotiated commitments under the trade
agreement.
(5) Chair.--The Congressional Oversight Group shall be
chaired by the Chairman of the Committee on Ways and Means of
the House of Representatives and the Chairman of the Committee
on Finance of the Senate.
(b) Guidelines.--
(1) Purpose and revision.--The United States Trade
Representative, in consultation with the chairmen and ranking
minority members of the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate--
(A) shall, within 120 days after the date of the
enactment of this Act, develop written guidelines to
facilitate the useful and timely exchange of
information between the Trade Representative and the
Congressional Oversight Group established under this
section; and
(B) may make such revisions to the guidelines as may
be necessary from time to time.
(2) Content.--The guidelines developed under paragraph (1)
shall provide for, among other things--
(A) regular, detailed briefings of the Congressional
Oversight Group regarding negotiating objectives,
including the promotion of certain priorities referred
to in section 2(c), and positions and the status of the
applicable negotiations, beginning as soon as
practicable after the Congressional Oversight Group is
convened, with more frequent briefings as trade
negotiations enter the final stage;
(B) access by members of the Congressional Oversight
Group, and staff with proper security clearances, to
pertinent documents relating to the negotiations,
including classified materials;
(C) the closest practicable coordination between the
Trade Representative and the Congressional Oversight
Group at all critical periods during the negotiations,
including at negotiation sites; and
(D) after the applicable trade agreement is
concluded, consultation regarding ongoing compliance
and enforcement of negotiated commitments under the
trade agreement.

SEC. 8. ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS.

(a) In General.--At the time the President submits to the Congress
the final text of an agreement pursuant to section 5(a)(1)(C), the
President shall also submit a plan for implementing and enforcing the
agreement. The implementation and enforcement plan shall include the
following:
(1) Border personnel requirements.--A description of
additional personnel required at border entry points, including
a list of additional customs and agricultural inspectors.
(2) Agency staffing requirements.--A description of
additional personnel required by Federal agencies responsible
for monitoring and implementing the trade agreement, including
personnel required by the Office of the United States Trade
Representative, the Department of Commerce, the Department of
Agriculture (including additional personnel required to
implement sanitary and phytosanitary measures in order to
obtain market access for United States exports), the Department
of the Treasury, and such other agencies as may be necessary.
(3) Customs infrastructure requirements.--A description of
the additional equipment and facilities needed by the United
States Customs Service.
(4) Impact on state and local governments.--A description of
the impact the trade agreement will have on State and local
governments as a result of increases in trade.
(5) Cost analysis.--An analysis of the costs associated with
each of the items listed in paragraphs (1) through (4).
(b) Budget Submission.--The President shall include a request for the
resources necessary to support the plan described in subsection (a) in
the first budget that the President submits to the Congress after the
submission of the plan.

SEC. 9. CONFORMING AMENDMENTS.

(a) In General.--Title I of the Trade Act of 1974 (19 U.S.C. 2111 et
seq.) is amended as follows:
(1) Implementing bill.--
(A) Section 151(b)(1) (19 U.S.C. 2191(b)(1)) is
amended by striking ``section 1103(a)(1) of the Omnibus
Trade and Competitiveness Act of 1988, or section 282
of the Uruguay Round Agreements Act'' and inserting
``section 282 of the Uruguay Round Agreements Act, or
section 5(a)(1) of the Bipartisan Trade Promotion
Authority Act of 2001''.
(B) Section 151(c)(1) (19 U.S.C. 2191(c)(1)) is
amended by striking ``or section 282 of the Uruguay
Round Agreements Act'' and inserting ``, section 282 of
the Uruguay Round Agreements Act, or section 5(a)(1) of
the Bipartisan Trade Promotion Authority Act of 2001''.
(2) Advice from international trade commission.--Section 131
(19 U.S.C. 2151) is amended--
(A) in subsection (a)--
(i) in paragraph (1), by striking ``section
123 of this Act or section 1102 (a) or (c) of
the Omnibus Trade and Competitiveness Act of
1988,'' and inserting ``section 123 of this Act
or section 3 (a) or (b) of the Bipartisan Trade
Promotion Authority Act of 2001,''; and
(ii) in paragraph (2), by striking ``section
1102 (b) or (c) of the Omnibus Trade and
Competitiveness Act of 1988'' and inserting
``section 3(b) of the Bipartisan Trade
Promotion Authority Act of 2001'';
(B) in subsection (b), by striking ``section
1102(a)(3)(A)'' and inserting ``section 3(a)(3)(A) of
the Bipartisan Trade Promotion Authority Act of 2001'';
and
(C) in subsection (c), by striking ``section 1102 of
the Omnibus Trade and Competitiveness Act of 1988,''
and inserting ``section 3 of the Bipartisan Trade
Promotion Authority Act of 2001,''.
(3) Hearings and advice.--Sections 132, 133(a), and 134(a)
(19 U.S.C. 2152, 2153(a), and 2154(a)) are each amended by
striking ``section 1102 of the Omnibus Trade and
Competitiveness Act of 1988,'' each place it appears and
inserting ``section 3 of the Bipartisan Trade Promotion
Authority Act of 2001,''.
(4) Prerequisites for offers.--Section 134(b) (19 U.S.C.
2154(b)) is amended by striking ``section 1102 of the Omnibus
Trade and Competitiveness Act of 1988'' and inserting ``section
3 of the Bipartisan Trade Promotion Authority Act of 2001''.
(5) Advice from private and public sectors.--Section 135 (19
U.S.C. 2155) is amended--
(A) in subsection (a)(1)(A), by striking ``section
1102 of the Omnibus Trade and Competitiveness Act of
1988'' and inserting ``section 3 of the Bipartisan
Trade Promotion Authority Act of 2001'';
(B) in subsection (e)(1)--
(i) by striking ``section 1102 of the Omnibus
Trade and Competitiveness Act of 1988'' each
place it appears and inserting ``section 3 of
the Bipartisan Trade Promotion Authority Act of
2001''; and
(ii) by striking ``section 1103(a)(1)(A) of
such Act of 1988'' and inserting ``section
5(a)(1)(A) of the Bipartisan Trade Promotion
Authority Act of 2001''; and
(C) in subsection (e)(2), by striking ``section 1101
of the Omnibus Trade and Competitiveness Act of 1988''
and inserting ``section 2 of the Bipartisan Trade
Promotion Authority Act of 2001''.
(6) Transmission of agreements to congress.--Section 162(a)
(19 U.S.C. 2212(a)) is amended by striking ``or under section
1102 of the Omnibus Trade and Competitiveness Act of 1988'' and
inserting ``or under section 3 of the Bipartisan Trade
Promotion Authority Act of 2001''.
(b) Application of Certain Provisions.--For purposes of applying
sections 125, 126, and 127 of the Trade Act of 1974 (19 U.S.C. 2135,
2136(a), and 2137)--
(1) any trade agreement entered into under section 3 shall be
treated as an agreement entered into under section 101 or 102,
as appropriate, of the Trade Act of 1974 (19 U.S.C. 2111 or
2112); and
(2) any proclamation or Executive order issued pursuant to a
trade agreement entered into under section 3 shall be treated
as a proclamation or Executive order issued pursuant to a trade
agreement entered into under section 102 of the Trade Act of
1974.

SEC. 10. DEFINITIONS.

In this Act:
(1) Agreement on agriculture.--The term ``Agreement on
Agriculture'' means the agreement referred to in section
101(d)(2) of the Uruguay Round Agreements Act (19 U.S.C.
3511(d)(2)).
(2) Core labor standards.--The term ``core labor standards''
means--
(A) the right of association;
(B) the right to organize and bargain collectively;
(C) a prohibition on the use of any form of forced or
compulsory labor;
(D) a minimum age for the employment of children; and
(E) acceptable conditions of work with respect to
minimum wages, hours of work, and occupational safety
and health.
(3) GATT 1994.--The term ``GATT 1994'' has the meaning given
that term in section 2 of the Uruguay Round Agreements Act (19
U.S.C. 3501).
(4) ILO.--The term ``ILO'' means the International Labor
Organization.
(5) United states person.--The term ``United States person''
means--
(A) a United States citizen;
(B) a partnership, corporation, or other legal entity
organized under the laws of the United States; and
(C) a partnership, corporation, or other legal entity
that is organized under the laws of a foreign country
and is controlled by entities described in subparagraph
(B) or United States citizens, or both.
(6) Uruguay round agreements.--The term ``Uruguay Round
Agreements'' has the meaning given that term in section 2(7) of
the Uruguay Round Agreements Act (19 U.S.C. 3501(7)).
(7) World trade organization; wto.--The terms ``World Trade
Organization'' and ``WTO'' mean the organization established
pursuant to the WTO Agreement.
(8) WTO agreement.--The term ``WTO Agreement'' means the
Agreement Establishing the World Trade Organization entered
into on April 15, 1994.

I. INTRODUCTION

A. Purpose and Summary

H.R. 3005, as amended by the Committee, would establish
special provisions for the consideration of legislation to
implement trade agreements. These special procedures, which
were first enacted in 1974, have expired with respect to
agreements entered into after April 15, 1994. The purpose of
this special approval process, previously called ``fast
track,'' has been to preserve the constitutional role and to
fulfill the legislative responsibility of Congress with respect
to trade agreements. At the same time, the process ensures
certain and expeditious action on the results of the
negotiations and on the implementing bill, with no amendments.
H.R. 3005, as amended, would put in place special
procedures for implementing trade agreements entered into
before June 1, 2005, with the opportunity for an extension to
cover agreements entered into before June 1, 2007. These
procedures are similar to the expired provisions, with
modifications to expand and broaden consultation with Congress.

B. Background and Need for Legislation

Certain trade agreements cannot enter into force as a
matter of U.S. law unless implementing legislation making any
changes to U.S. law to implement U.S. rights and obligations
under the agreement is enacted into law. Certain procedures,
previously referred to as ``fast track'' and now referred to as
``trade promotion authority,'' were first authorized in the
Trade Act of 1974 in order to implement trade agreements. These
procedures were first used with respect to the GATT Tokyo Round
Agreements, which were approved and implemented in the Trade
Agreements Act of 1979. The expedited procedures for the
implementation of multilateral trade agreements have not been
significantly altered since 1974 but were expanded in 1984 to
apply to bilateral agreements. Extended through section 1102(c)
of the Omnibus Trade and Competitiveness Act of 1988, and
modified to authorize the President to enter into bilateral
trade agreements, these procedures were most recently used to
implement the Uruguay Round Agreements of the World Trade
Organization (WTO) and the North American Free Trade Agreement
(NAFTA). That negotiating authority, as extended in 1991 and
1993, applied only with respect to agreements entered into
before April 15, 1994.
These special procedures required the President, before
entering into any trade agreement, to consult with Congress and
to provide Congress advance notice of his intent to enter into
an agreement. After entering into the agreement, the President
was required to submit the draft agreement, implementing
legislation, and a statement of administrative action. The
President also consulted with Congressional committees of
jurisdiction on the content of the implementing bill.
Amendments to the legislation were not permitted once the bill
was introduced; the committee and floor actions consisted of
``up or down'' votes on the bill as introduced.
The Committee believes that trade promotion authority has
been a highly effective tool in securing a wide range of
important, market-opening trade agreements for the United
States. Because of these agreements, the Committee believes
that the United States has been able to make substantial
progress in opening markets, lowering tariffs, and reducing and
ending non-tariff barriers to trade. These agreements are
extremely beneficial in creating much-needed jobs, stimulating
the economy, and raising the standard of living for American
families. Without trade promotion authority in place since
1994, however, the United States has concluded only one small
free trade agreement (FTA), while its competitors have
continued to put in place trade agreements that disadvantage
U.S. businesses, workers, and farmers. Of the 134 free trade
agreements negotiated under the GATT/WTO, the United States is
party to only three--the U.S.-Israel Free Trade Agreement, the
NAFTA, and the U.S.-Jordan Free Trade Agreement. Europe, for
its part, has in force FTAs with 27 countries and is now moving
into Latin America. Since 1994, Canada (the largest market for
U.S. exports) has negotiated FTAs with Chile, Costa Rica, and
Israel, and is conducting preliminary talks with Japan,
Singapore, Guatemala, Honduras, and Nicaragua. Likewise, Mexico
(the second largest market for U.S. exports) has trade
agreements with 31 countries and is now in talks with Japan,
Korea, and others. The WTO predicts that by 2005 there will be
more than 250 FTAs. The Committee is concerned that if the
United States does not have trade promotion authority, it will
be left further behind as its competitors negotiate
preferential access in their best interests.
The Committee believes that the only way that the United
States can negotiate these beneficial agreements is through the
well-proven tool of trade promotion authority because it
ensures certain and expeditious consideration of trade
legislation while giving Congress a strong role to play during
negotiation and implementation of trade agreements. In
addition, trade promotion authority gives U.S. trading partners
confidence that an agreement agreed to by the United States
will not be reopened during the implementing process.
Accordingly, H.R. 3005, as amended, would extend many of the
provisions of the 1988 Act to future agreements, although
making a number of improvements, particularly in the area of
Congressional consultation.
The Committee strongly believes that passage of this
legislation is squarely in the national economic and security
interest of the United States. Granting President Bush Trade
Promotion Authority will send a strong signal that the United
States does not intend to revert to isolationism. The Committee
views TPA as a key element of a broader legislative strategy
aimed at building confidence in American economic leadership
and avoiding a global recession.

C. Legislative History

H.R. 2149, the Trade Promotion Authority Act of 2001, was
introduced on June 13, 2001, by Congressman Crane, on behalf of
himself, and 62 other House Members. H.R. 3005, the Bipartisan
Trade Promotion Authority Act of 2001, was introduced on
October 3, 2001, by Chairman Thomas, on behalf of himself and
Congressmen Crane, Dreier, Jefferson, Tanner, and Dooley. The
bill was referred to the Committee on Ways and Means and, in
addition, to the Committee on Rules.
On October 5 and October 9, the Committee on Ways and Means
met to consider H.R. 3005. At that time, Chairman Thomas
offered an amendment in the nature of a substitute, which was
agreed to by voice vote. The Committee also agreed to, by
unanimous consent, an amendment offered by Mr. Cardin
concerning anti-corruption. Mr. Rangel offered an amendment in
the nature of a substitute, which was defeated by a record vote
of 12 yeas, 26 nays, and 1 pass. Mr. Doggett and Mr. McDermott
offered an amendment concerning investment issues and
procedures to remove trade promotion authority, which was
defeated by voice vote. The Committee then ordered the bill
favorably reported, as amended, by a record vote of 26 yeas to
13 nays.

II. EXPLANATION OF THE BILL

1. Section 1: Short Title and Findings

Explanation of provision

The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2001.'' The legislation states that
Congress finds the expansion of international trade is vital to
U.S. national security and economic growth, as well as U.S.
leadership.

2. Section 2 (a) and (b): Trade negotiating objectives

Present/expired law

Section 1101(a) of the Omnibus Trade and Competitiveness
Act of 1988 (the 1988 Act) set forth overall negotiating
objectives for concluding trade agreements. These objectives
were to obtain more open, equitable, and reciprocal market
access, the reduction or elimination of barriers and other
trade-distorting policies and practices, and a more effective
system of international trading disciplines and procedures.
Section 1102(b) set forth the following principal trade
negotiating objectives: dispute settlement, transparency,
developing countries, current account surpluses, trade and
monetary coordination, agriculture, unfair trade practices,
trade in services, intellectual property, foreign direct
investment, safeguards, specific barriers, worker rights,
access to high technology, and border taxes.

Explanation of provision

Section 2 would establish the following overall negotiating
objectives: obtaining more open, equitable, and reciprocal
market access; obtaining the reduction or elimination of
barriers and other trade-distorting policies and practices;
further strengthening the system of international trading
disciplines and procedures, including dispute settlement;
fostering economic growth and full employment in the U.S. and
the global economy; ensuring that trade and environmental
policies are mutually supportive and seeking to protect and
preserve the environment and enhance the international means of
doing so, while optimizing the use of the world's resources;
and to promote respect for worker rights and the rights of
children consistent with International Labor Organization core
labor standards, as defined in the bill.
In addition, section 2 would establish the principal trade
negotiating objectives for concluding trade agreements, as
follows:
Trade barriers and distortions:
--expanding competitive market opportunities for U.S.
exports and obtaining fairer and more open conditions
of trade by reducing or eliminating tariff and
nontariff barriers and policies and practices of
foreign governments directly related to trade that
decrease market opportunities for U.S. exports and
distort U.S. trade; and
--obtaining reciprocal tariff and nontariff barrier
elimination agreements, with particular attention to
products covered in section 111(b) of the Uruguay Round
Agreements Act.
Services: to reduce or eliminate barriers to international
trade in services, including regulatory and other barriers,
that deny national treatment or unreasonably restrict the
establishment or operations of services suppliers.
Foreign investment: to reduce or eliminate artificial or
trade-distorting barriers to trade-related foreign investment
by--
--reducing or eliminating exceptions to the principle
of national treatment;
--freeing the transfer of funds relating to
investments;
--reducing or eliminating performance requirements,
forced technology transfers, and other unreasonable
barriers to the establishment and operation of
investments;
--seeking to establish standards for expropriation
and compensation for expropriation, consistent with
United States legal principles and practice;
--providing meaningful procedures for resolving
investment disputes including between an investor and a
government; and
--seeking to improve mechanisms used to resolve
disputes between an investor and a government through
mechanisms to eliminate frivolous claims, procedures to
ensure the efficient selection of arbitrators and the
expeditious disposition of claims, and procedures to
increase transparency in investment disputes.
Intellectual property: including:
--promoting adequate and effective protection of
intellectual property rights through ensuring
accelerated and full implementation of the Agreement on
Trade-Related Aspects of Intellectual Property Rights,
including strong enforcement;
--providing strong protection for new and emerging
technologies and new methods of transmitting and
distributing products embodying intellectual property;
and
--ensuring that standards of protection and
enforcement keep pace with technological developments,
and in particular ensuring that right holders have the
legal and technological means to control the use of
their works through the internet and other global
communication media.
Transparency: to increase public access to information
regarding trade issues as well as the activities of
international trade institutions; to increase openness in
international trade fora, including the WTO, by increasing
public access to appropriate meetings, proceedings, and
submissions, including with regard to dispute settlement and
investment; and to increase timely public access to
notifications made by WTO member states and the supporting
documents.
Anti-corruption: to obtain high standards and appropriate
enforcement mechanisms applicable to persons from all countries
participating in a trade agreement that prohibit attempts to
influence acts, decisions, or omissions of foreign government;
and to ensure that such standards do not place U.S. persons at
a competitive disadvantage in international trade.
Improvement of the WTO and multilateral trade agreements:
to achieve full implementation and extend the coverage of the
WTO and such agreements to products, sectors, and conditions of
trade not adequately covered; and to expand country
participation in and enhancement of the Information Technology
Agreement (ITA) and other trade agreements.
Regulatory practices: to achieve increased transparency and
opportunity for the participation of affected parties in the
development of regulations; to require that proposed
regulations be based on sound science, cost-benefit analysis,
risk assessment, or other objective evidence; to establish
consultative mechanisms among parties to trade agreements to
promote increased transparency in developing guidelines, rules,
regulations, and laws for government procurement and other
regulatory regimes; and to achieve the elimination of
government measures such as price controls and reference
pricing which deny full market access for United States
products.
Electronic commerce: to ensure that current obligations,
rules, disciplines, and commitments under the WTO apply to
electronic commerce; to ensure that electronically delivered
goods and services receive no less favorable treatment under
trade rules and commitments than like products delivered in
physical form; and the classification of such goods and
services ensures the most liberal trade treatment possible; to
ensure that governments refrain from implementing trade-related
measures that impede electronic commerce; where legitimate
policy objectives require domestic regulations that affect
electronic commerce, to obtain commitments that any such
regulations are the least restrictive on trade,
nondiscriminatory, and transparent, and promote an open market
environment; and to extend the moratorium of the WTO on duties
on electronic transmissions.
Agriculture: to ensure that the U.S. trade negotiators duly
recognize the importance of agricultural issues; to obtain
competitive market opportunities for U.S. exports in foreign
markets substantially equivalent to the competitive
opportunities afforded foreign exports in U.S. markets and to
achieve fairer and more open conditions of trade; to reduce or
eliminate trade distorting subsidies; to impose disciplines on
the operations of state-trading enterprises or similar
administrative mechanisms; to eliminate unjustified
restrictions on products derived from biotechnology; to
eliminate sanitary or phytosanitary restrictions that
contravene the Uruguay Round Agreement as they are not based on
scientific principles and to improve import relief mechanisms
to accommodate the unique aspects of perishable and cyclical
agriculture.
Labor and the environment: to ensure that a party does not
fail to effectively enforce its environmental or labor laws,
through a sustained or recurring course of action or inaction,
in a manner affecting trade between the United States and that
party; to recognize that a party to a trade agreement is
effectively enforcing its laws if a course of inaction or
inaction reflects a reasonable exercise of discretion or
results from a bona fide decision regarding allocation of
resources; to strengthen the capacity of U.S. trading partners
to promote respect for core labor standards and to protect the
environment through the promotion of sustainable development;
to reduce or eliminate government practices or policies that
unduly threaten sustainable development; to seek market access
for U.S. environmental technologies, goods, and services; and
to ensure that labor, environmental, health, or safety policies
and practices of parties to trade agreements do not arbitrarily
or unjustifiably discriminate against U.S. exports or serve as
disguised barriers to trade.
Dispute settlement and enforcement: to seek provisions in
trade agreements providing for resolution of disputes between
governments in an effective, timely, transparent, equitable,
and reasoned manner requiring determinations based on facts and
the principles of the agreement, with the goal of increasing
compliance; seek to strengthen the capacity of the WTO Trade
Policy Review Mechanism to review compliance; seek provisions
encouraging the early identification and settlement of disputes
through consultations; seek provisions encouraging trade-
expanding compensation; seek provisions to impose a penalty
that encourages compliance, is appropriate to the parties,
nature, subject matter, and scope of the violation, and has the
aim of not adversely affecting parties or interests not party
to the dispute while maintaining the effectiveness of the
enforcement mechanism; and seek provisions that treat U.S.
principal negotiating objectives equally with respect to
ability to resort to dispute settlement and availability of
equivalent procedures and remedies.
Extended WTO negotiations: concerning extended WTO
negotiations on financial services, civil aircraft, and rules
of origin.

Reason for change

The Committee believes that the overall negotiating
objectives balance the need to open markets and strengthen the
international trading system with ensuring that trade and
environment policies are mutually supportive and promoting
respect for core labor rights, all with the goal of fostering
economic growth and full employment in the global economic
system.
In the list of primary negotiating objectives in H.R. 3005,
as amended, the Committee intends to update and broaden
objectives from the 1988 Act.
Trade barriers and distortions: The language in the first
negotiating objective covers any tariff or non-tariff barrier
as well as any policy or practice that is directly related to
trade, regardless of whether the barrier is imposed at the
foreign border or at some other point. Moreover, H.R. 3005, as
amended, addresses policies and practices, not merely a law
``on its face.'' This includes a policy or practice that has
the de facto effect of impeding U.S. imports or exports, not
whether the law is only a de jure barrier. In addition, the
concept ``policy or practice'' covers barriers imposed under,
for example, a regulatory, administrative, adjudicatory, and
investigatory exercise of any level of foreign government
authority, and is not limited to statutory barriers. Finally,
it is the Committee's intention that the phrase ``to obtain
fairer and more open conditions of trade by reducing or
eliminating tariff and nontariff barriers'' applies to barriers
imposed by foreign governments at the border as well as
internal barriers, if any.
In section 2(b)(1)(B), the Committee intends that the
Administration continue to seek, on a priority basis, the
elimination of duties on a reciprocal basis for products
covered in section 111(b) of the Uruguay Round Agreements Act,
as described in page 45 of the Statement of Administrative
Action accompanying that Act. Although the President was
successful in obtaining the reciprocal elimination of duties
for a number of products contained in that list as part of the
Information Technology Agreement negotiated under the auspices
of the WTO, there are a number of products on the list for
which zero-for-zero agreements have not been reached. It is the
Committee's intention that the Administration pay particular
attention to the elimination of tariffs on these products,
which could result in substantial benefits to U.S. industry and
its workers. For many of these products, U.S. producers remain
at a significant competitive disadvantage while foreign
suppliers are able to expand capacity behind high tariff walls.
In other sectors, tariff inequities are aggravated by
tariff escalation, which occurs when a country establishes low
or zero tariffs for raw materials but maintains relatively high
tariffs for processed products. The Committee intends that the
Administration continue to pursue ending such practices for the
sectors covered by the proclamation authority provided in
section 111(b) of the Uruguay Round Agreements Act.
The Committee wishes to emphasize that the overall
negotiating objectives to obtain more open, equitable, and
reciprocal market access and to reduce distortions thatdecrease
market opportunities for United States exports and otherwise distort
trade are increasingly important for the domestic textile and apparel
industry as these sensitive products are removed from quota limitations
and integrated into normal WTO rules.
The WTO agreement addresses many problems facing the United
States textile and apparel industry. Article 5 of the WTO
Agreement on Textiles and Clothing (ATC) recognizes that
circumvention of quotas frustrate the implementation of the
Agreement, and calls on all WTO Members to cooperate fully in
addressing problems arising from transshipment, false
declaration of country of origin, rerouting, use of fraudulent
visas, and other means. Article 7 of the ATC requires WTO
members to take all necessary action to abide by GATT rules and
disciplines to achieve certain objectives, including improved
access to their markets, for example by reducing and binding
tariffs, reducing or eliminating non-tariff barriers, and
facilitating customs, administrative, and licensing
formalities. Any WTO member that considers that another member
has not taken such action may bring a complaint before there
the relevant WTO body, as provided in Article 7, or before the
Textile Monitoring Body.
The Committee expresses strong concern that commitments by
the Administration in the Statement of Administrative Action
accompanying the Uruguay Round Trade Agreements Act to pursue
enforcement of the ATC with respect to high tariff and non-
tariff barriers to United States exports of textile and apparel
products have not been fulfilled in any way. Major textile and
clothing exporting countries fail to adhere to the provisions
of existing agreements discussed above. Average tariff rates on
textiles and apparel in major exporting countries such as
India, Indonesia, Thailand, Malaysia, and Brazil continue to be
significantly higher than United States tariffs on these
products. USTR has not actively pursued negotiations to
implement the market access commitments made in the Uruguay
Round Agreement.
Therefore, the negotiating objectives of opening markets
and reducing distortions in the bill with respect to textiles
and apparel, is to obtain competitive opportunities for United
States exports of these products in foreign markets
substantially equivalent to the competitive opportunities
afforded foreign exports of textiles and apparel in the United
States by: (1) reducing tariffs on textiles and apparel in
major textile and apparel exporting countries to the same as or
lower than those in the United States and; (2) reducing or
eliminating subsidies that decrease market opportunities for
U.S. exports of textiles and apparel or unfairly distort trade;
and (3) ensuring that countries that are members of the WTO
implement immediately all their obligations to provide
effective market access for U.S. exports of textiles and
apparel.
Finally, in developing negotiating objective for future
bilateral trade agreements and for the Free Trade Area of the
Americas, the Committee urges the Administration to take into
account the impact that: (1) all trade agreements covering
textiles and apparel to which the U.S. is a party, including
the North American Free Trade Agreement, have had on the U.S.
industry; and (2) preferential tariff programs such as the
Caribbean Basin Trade Partnership Act and the Africa Growth and
Opportunity Act have had on the industry.
Services: The Committee notes that U.S. services exports
are approaching $300 billion annually. Many markets for U.S.
services are vast and essentially untapped. As income in
foreign countries grows, their imports of U.S. services tend to
rise disproportionately. Thus, negotiations that reduce
barriers to all modes of supply of services could lead to a
major expansion of U.S. services exports, resulting in a
significant improvement in the U.S. balance of payments
account.
Not only do certain sectors, such as telecommunications,
express delivery, financial, energy and information services,
play a key role in a country's infrastructure, but U.S.
manufacturers also benefit from efficient services used to
support production, such as product design and engineering,
marketing and distribution, outsourcing, and globalized
logistics strategies. Accordingly, the Committee wishes to
improve access for all aspects of U.S. services providers.
In bilateral and multilateral trade agreements, the
Committee believes it is important to: (1) achieve maximum
liberalization of trade in all modes of supply, including cross
border supply of services and movement of natural persons,
across the widest possible range of services; (2) provide
rights of establishment with majority ownership and national
treatment for companies operating in foreign markets; (3) allow
investors to establish in whatever corporate form is most
appropriate to their business objectives; (4) grandfather
existing liberalization commitments; (5) create a free and open
commercial environment for the development of electronic
commerce; (6) ensure that market access commitments apply no
matter what technology is used to deliver the service; (7)
promote domestic regulatory reform, with the objective of
committing governments to avoid discrimination against foreign
service suppliers in their current and future regulations; (8)
promote transparency of regulatory processes, including rule-
making, granting of licenses, setting of standards, and
judicial and arbitral proceedings; (9) challenge both the
desirability and the feasibility of a services safeguard
regime, especially in light of the impact of such a provision
on the climate for foreign direct investment; and (10)
explicitly acknowledge the importance of maintaining free flows
of financial and other information that is necessary for the
operation of global business.
The Committee believes that the liberalization of services
in the FTAA must exceed what has already been achieved in the
WTO General Agreement on Trade in Services (GATS). The premise
of such an agreement should be, in fact, free trade in goods
and services throughout the region with minimal exceptions or
limitations. The Committee views the FTAA as an excellent
opportunity to create one general framework for trade in
services among the 34 participating economies.
With regard to bilateral free trade agreements (FTAs), such
as those currently in progress with Chile and Singapore, the
Committee believes that the United States should be as bold as
possible in pursuing complete liberalization across a wide
range of sectors. The ``Top Down'' approach (i.e., negotiating
modality) is the best way to achieve this liberalization for
most sectors, and it should be refined as necessary to meet the
needs of specific sectors. In other words, the Committee
believes that U.S. negotiators should push countries to
schedule complete liberalization with a list of exceptions
where necessary. This contrasts with the complex and cumbersome
``positive list'' approach that is the basis of the GATS
structure.
In the WTO, the services negotiations, along with
agriculture, are unfolding pursuant to the built-in agenda
established by the Uruguay Round. Unfortunately, the GATS lacks
substantive commitments in many areas, and the Committee
believes a new round must be effective in increasing
substantive liberalization commitments across the wide range of
services where the United States is competitive. In addition to
the ``request and offer'' approach pursued in the Uruguay
Round, which can be cumbersome and slow for services, the
Committee is supportive of the use of other more efficient
negotiating techniques and strategies. The Committee urges
negotiators to explore the development of negotiating
techniques such as model schedules, horizontal approaches, and
clusters.
Foreign investment: Companies investing abroad do so to get
closer to their markets, acquire new technologies, form
strategic alliances, and enhance competitiveness by integrating
production and distribution. Foreign investment is increasingly
crucial to the ability of U.S. companies to export, and to the
international competitiveness of U.S. companies. The Committee
believes that because trade and investment flows are
interdependent, rules protecting United States investment
abroad must be rigorous and enforceable.
The United States has long been the champion of
international investment rules because U.S. investors have more
capital at risk than investors from any other country, and thus
have the most to gain from effective mechanisms for enforcing
investor protections. While foreign investors are afforded
strong protections through the U.S. Constitution, U.S. laws,
and the U.S. court system--with or without an investment
agreement--U.S. investors abroad are often consigned to foreign
laws that may not reflect U.S. or international legal standards
and local courts that may be corrupt or do not provide
impartial adjudication.
Therefore, the Committee intends U.S. negotiators to
continue to fight for the recognition of the international rule
of law and respect for international dispute resolution bodies.
Future trade agreements should guarantee the free movement of
capital, prohibit performance requirements such as local
content and export performance requirements, and include, in
bilateral and regional agreements, a mechanism to allow
investors to arbitrate investment disputes with host
governments and obtain relief for damages resulting from
violations of the agreement.
The Committee recognizes that the investor-state dispute
settlement mechanism is a valuable component of investment
agreements in order to allow U.S. investors access to the rule
of law and procedures that would be available in the United
States but also acknowledges that important improvements should
be added to these traditional procedures. Accordingly, the
Committee includes measures that ensure that a number of
safeguards be included in an investor-state dispute settlement
regime. Specifically, the Committee intends U.S. negotiators to
seek to: (1) develop new mechanisms to eliminate frivolous
claims; (2) ensure the efficient selection of arbitrators and
the expeditious disposition of claims and procedures; and (3)
increase transparency in investment disputes by, for example,
ensuring that briefs and arbitration proceedings are open to
public view. An amicus procedure might also be developed
whereby interested members of the public could express their
views on issues before the tribunals.
Intellectual property: Piracy and counterfeiting rates in
much of the world remain alarmingly high. The advent of the
Internet, along with the rapid globalization of the world
economy, mean that piracy, counterfeiting and other economic
crimes are, to an increasing extent, global problems. U.S.
industries based on copyright, patent, trademark and other
forms of intellectual property rights are among the fastest
growing and most productive of all sectors of the U.S. economy.
To enable these export-oriented industries to prosper, it is
essential that the United States work together with governments
throughout the world to prevent, punish, and ultimately deter
these violations.
It is critical that the previously agreed-to obligations
regarding protection and enforcement embodied in the WTO Trade-
Related Intellectual Property Rights (TRIPS) Agreement are
effectively, fully, and immediately implemented. The
enforcement obligations of the TRIPS Agreement are particularly
important. Although, substantive levels of intellectual
property protection have increased significantly around the
world in recent years (due in great part both to U.S. trade law
initiatives and enhanced WTO disciplines), many countries
continue to inadequately enforce intellectual property rights.
Without effective enforcement, the full benefits of the TRIPS
Agreement cannot be realized.
Achieving full implementation of TRIPS should be a top
multilateral priority of U.S. Executive Branch agencies charged
with trade policy responsibilities. For this reason, among
others, this Committee does not believe that it is necessary or
advisable at this time to undertake to amend or improve the
TRIPS agreement in any new WTO negotiating round. TRIPS
implementation will require the full attention and strenuous
efforts of U.S. trade policy officials and their counterparts;
any negotiation of new intellectual property standards in the
WTO would threaten this goal.
Another important objective is to ensure that standards of
protection and enforcement keep pace with rapid technological
developments. For example, the Executive Branch should
encourage countries to ratify and implement the World
Intellectual Property Organization's (WIPO) Copyright Treaty
and the WIPO Performances and Phonograms Treaty, which reflect
enhanced global minimum standards of protection and enforcement
for the networked digital environment.
Section 2(b)(4) reflects the view of this Committee that
strong intellectual property rights protection should be
accompanied by provisions on liability that are consistent with
U.S. law, including the Digital Millennium Copyright Act, and
that provide limitations on the scope of remedies available
against service providers for copyright infringements they do
not control, initiate or direct, and that take place through
systems or networks, controlled or operated by them or on their
behalf. Such limitations also must create legal incentives for
service providers to cooperate with copyright owners in
deterring the unauthorized storage, and transmission of
copyrighted materials.
Finally, U.S. intellectual property industries based on
intellectual property continue to suffer from unnecessary and
discriminatory market access barriers around the globe. U.S.
negotiators must remain vigilant and excise these barriers
since they stunt the growth of otherwise highly productive
industries.
Transparency: The Committee observes that while the WTO and
other international trade fora have improved the level of
transparency in trade negotiations, there remains some lack of
information to the public concerning their operations and the
decisions that they make. The Committee believes that enhancing
the level of transparency at multilateral, plurilateral, and
bilateral institutions would have twofold benefits. First, it
would help U.S. citizens and the citizens of other countries to
have more confidence in the operation of international trade
institutions and the fairness of dispute settlementdecisions.
Second, increased transparency and the flow of information from
international trade institutions would help U.S. exporters to be better
informed as to U.S. rights under international trade rules and would
improve compliance with trade agreements.
Concerning access to appropriate meetings and
documentation, the Committee believes that the public has an
important stake in trade decisions, including those involving
dispute settlement and investment. Since openness will help to
ensure fairness, it is crucial to allow the public to observe
meetings and obtain documents, whenever possible. Further, the
Committee believes that it is important that the documents are
available as soon as practicable, so that the public has access
to current information. As an additional means of increasing
public access to dispute settlement proceedings, U.S.
negotiators should, among other things, pursue building
consensus for establishing rules allowing for submission of
amicus curiae briefs to panels and the Appellate Body of the
WTO.
Finally, the Committee has a special concern that
interested persons have timely access to notifications and
related documents submitted by WTO members. The Committee
believes that it is insufficient for persons to have access to
notifications alone; they must also have access to the
supporting documentation, wherever possible, in order to
evaluate the assertions and policy decisions contained in the
notifications. One example of particular concern to the
Committee is the series of notifications made by the EU to the
WTO in the area of agriculture subsidies. The Committee wants
to assure that U.S. entities, which must compete with EU-
subsidized agriculture, have access to information so they can
determine whether U.S. rights under the agreement are being
violated.
Anti-corruption: The Committee believes that reduction of
corruption in international trade is fundamental to the
expansion of free and fair trade around the world. Trade is a
vital force for economic development, democratization, social
freedom, and political stability in countries struggling to
achieve these objectives. Corruption involving the use of money
and other things of value to influence acts, decisions, or
omissions of foreign government officials or to secure any
improper advantage in a manner affecting trade undermines the
objectives of trade promotion authority legislation.
The Committee intends that obtaining high anti-corruption
standards should be a principal negotiating objective for the
Trade Representative in future TPA trade negotiations. It is
the Committee's view that high standards are those that are
equivalent to those established under section 30A of the
Securities and Exchanges Act of 1934 and sections 104 and 104A
of the Foreign Corrupt Practices Act of 1977. Only standards
equivalent to these will ensure that United States persons, who
are bound by the Foreign Corrupt Practices Act, are not placed
at a competitive disadvantage in international trade.
WTO agreements: The Committee puts a high priority on the
effective implementation of agreements concluded under WTO
auspices--including agreements achieved in the Uruguay Round
and subsequently in areas such as Basic Telecommunications,
Financial Services, and Information Technology.
The ITA, which eliminates tariffs on a wide range of
products essential to the new economy, was concluded at the
WTO's first Ministerial Conference at Singapore in December
1996. As of this writing, the ITA has 55 participants
representing over 95 percent of trade in the $600 billion-plus
global market for information technology products. Through its
work identifying standards, non-tariff measures, and
possibilities for expansion of product coverage, the WTO
Committee of ITA participants has demonstrated how the WTO can
provide dynamic mechanisms for trade liberalization that are
responsive to the ever-changing nature of sectors such as the
information technology sector. Unfortunately, several countries
in Latin America have shown reluctance in the past to joining
the ITA. It is the Committee's expectation that the FTAA
negotiations offer a strong opportunity to expand both the
country participation and the product coverage of this
important agreement.
There has been an ongoing debate about the issue of
implementation among WTO members, some aspects of which
threaten the integrity of the WTO system and existing
agreements. For example, with the completion of the transition
periods provided to developing country members to phase in
adherence to WTO rules in the areas of trade-related
intellectual property rights, trade-related investment
measures, and customs valuation, some of these countries have
now started to call into question the ``reasonableness'' of
obligations imposed by the Agreements and have sought to
``rebalance'' those obligations. It should go without saying
that the Committee views these requests to renege on past WTO
commitments as lacking in respect for international obligations
and the good faith necessary to support an effective trading
system.
With respect to the Agreement on Government Procurement,
the Committee intends for the United States to seek to expand
the membership of the WTO Agreement on Government Procurement;
seek conclusion of a WTO Agreement on Transparency in
Government Procurement; and promote global use of electronic
publication of procurement information, including notices of
procurement opportunities. In addition, the Committee intends
for the United States to seek commitments ensuring access to
foreign government procurement markets through regional and
bilateral free trade agreements, including the Free Trade Area
of the Americas (FTAA).
Bilateral and regional trade agreements often rely on
preferential rules of origin to determine whether a good can
qualify for duty-free treatment. In the area of information
technology (IT) products, the Committee intends that the
Administration take full account of the global nature of the IT
industry in the development and application of preferential
origin rules. The Committee intends that the Administration
eliminate the need to apply preferential origin rules to IT
products to the maximum extent possible. This can be
accomplished by including adherence to the Information
Technology Agreement (ITA) as a baseline for commitments in
bilateral or regional trade agreements. The Committee also
believes the Administration should make preferential origin
rules administrable and trade facilitative in any case. Such
rules should foster administrative ease and market access to
the maximum extent possible. To this end, the Administration
should seek rules that: avoid value-content thresholds, avoid
process-based rules and confer origin based on classification
changes. The Committee also believes the Administration should
seek to harmonize preferential origin rules across trade
arrangements. To the extent preferential rules are
administrable and trade facilitative, they should be applied
uniformly across the FTAA and all other preferential trade
agreements. Rules that vary by trade arrangement create
operational disruption, administrative burdens, and trade
impediments.
Regulatory practices: ``Regulatory reform'' has been given
great attention by a number of U.S. industry groups in
approaching new trade negotiations. There is an increasing
recognition across the spectrum of U.S. industry that legally
binding commitments to remove or lower trade barriers can be
nullified by decisions, either of national and regional
governments or industry standard setting and accrediting
bodies, that are taken as part of regulatory processes. It has
also become clear to the Committee that regulatory reform
encompasses two important prongs: transparency and the need to
ensure that regulations are fair and that they are applied
without regard to the nationality of the industry or company
affected by them.
While in the United States government processes that take
place in the ``sunshine'' are taken for granted, this is not
the case in many other countries. Thus the Committee strongly
urges USTR to pursue strenuously the negotiation of
crosscutting transparency disciplines, particularly in the
areas of services, e-commerce, and government procurement
The realization of the negotiating objectives relating to
regulations may require the negotiation of special rules that
meet the needs of specific sectors for transparency and fair
regulatory systems. In addition, consultative mechanisms are
needed to promote increased transparency in the development of
guidelines, rules, regulations, and laws for government
procurement and other regulatory regimes. The Committee's
strong view isthat transparent and fair regulatory systems are
essential to the continued economic development of U.S. trading
partners around the world.
Electronic commerce: Disciplines important to e-commerce
are more cross-cutting in nature than other sectors, and thus
other negotiating objectives described elsewhere in this
section are relevant to e-commerce, such as services,
investment, intellectual property, transparency, and regulatory
practices. A critical negotiating objective of the United
States must be to ensure that current WTO obligations, rules,
disciplines, and commitments--namely the GATT, GATS and TRIPs
agreements--apply to this new mode of business, which the
Committee views as critical to U.S. international
competitiveness.
The Committee intends that United States negotiators work
to: (1) ensure electronically delivered goods and services
receive no less favorable treatment under trade rules and
commitments than similar products or services delivered by
another means; (2) ensure that the classification of such goods
and services represents the most liberal treatment possible;
(3) ensure that governments refrain from implementing measures
that impede electronic commerce; (4) obtain commitments from
U.S. trading partners that where legitimate policy objectives
require domestic regulations that affect electronic commerce,
that their regulations will be least trade-restrictive,
nondiscriminatory, transparent as possible; (5) achieve the
extension of the moratorium on duties on electronic
transmissions; (6) remove tariff and non-tariff barriers that
impede trade in the hardware and the software used to deploy,
market and access the e-commerce infrastructure, as well as the
goods and services that are traded electronically thereon; (7)
achieve full market access and national treatment commitments
for services that provide the infrastructure for the internet
and electronic commerce (e.g., telecommunication, computer,
advertising, financial, distribution, and express delivery
services) as well as services delivered electronically; (8)
expand and deepen basic and value-added telecommunications
commitments, including the Reference Paper commitments for
basic telecommunications services; and (9) deter attempts to
apply basic telecommunications regulations to competitive
value-added, Internet Service Providers (ISP), and other
Internet-related services.
The U.S.-Jordan Free Trade Agreement represents an
important step forward in achieving the objectives on e-
commerce described in the bill and in this report. Currently,
WTO members only have a political commitment in the form of the
moratorium of duties on e-commerce. In the FTA, however, Jordan
legally bound itself to seek to impose no customs duties on
electronic transmissions and also agreed to seek to not impose
unnecessary regulation on electronic commerce and not to put in
place unnecessary barriers to market access for digitized
products (such as software, video, and music). Jordan also
committed to seek to refrain from impeding the ability of U.S.
providers to deliver services through electronic means.
Jordan made market access and national treatment
commitments in all sectors critical to completing an electronic
transaction including telecommunications, computer-related
services, financial services, distribution services, and
express delivery services. Finally, the Jordan FTA includes
commitments for the protection of intellectual property, going
beyond TRIPs, that address the significant problem of piracy
faced by all content providers. Jordan's ``TRIPs plus''
commitments include: adherence to the provisions of the World
Intellectual Property Organization (WIPO) Digital Treaties
which include important protections for copyrighted works in a
digital network environment, including the exclusive right of
creators to make their creative works available online, using
the Digital Millennium Copyright Act (DMCA) as a model;
critical parallel import protection; and strong guarantees on
enforcement. Consistent with this Act's major negotiating
objective on e-commerce, the Jordan agreement will help ensure
that, where legitimate policy objectives require domestic
regulation that affects commerce, such regulations will be the
least restrictive on trade, non-discriminatory, and
transparent, while promoting an open market environment. Thus,
the Committee's view is that the Jordan FTA is illustrative of
state of the art accomplishments that can be achieved as the
United States moves forward with bilateral trade agreements
with Chile, Singapore, and with regional agreements such as the
FTAA. This in turn will lay the groundwork for future efforts
in developing effective WTO disciplines multilaterally in all
these important areas.
Agriculture: With respect to the negotiating objective
relating to reciprocal trade in agriculture, the Committee
intends that the United States obtain a level playing field
throughout the world for agriculture products, both for U.S.
exporters seeking market access abroad as well as for U.S.
products that are import-sensitive. The Committee acknowledges
that trade in agriculture is a critical issue in all trade
negotiations: bilateral, regional, or multilateral. Thus, the
Committee has set forth specific objectives, recognizing the
need to open markets for U.S. agricultural exports while taking
into account the situation of the import-sensitive portion of
the U.S. agriculture sector.
The Committee believes that U.S. negotiators should seek to
accomplish the objectives set forth in section 2(b)(6),
including reducing or eliminating foreign tariffs and subsidies
and, in addition, eliminating practices that decrease U.S.
market access or distort U.S. or foreign markets, including the
monopoly status of state trading enterprises; unjustified trade
restrictions or commercial requirements affecting new
technologies, including biotechnology; unjustified sanitary or
phytosanitary measures not based on scientific principles in
contravention of WTO standards; other unjustified barriers to
trade; and trade-restrictive rules in the administration of
tariff rate quotas. The Committee also believes that U.S. trade
negotiators should work to preserve the right of the United
States to use agricultural export credit and market development
programs, as well as bona fide food aid.
Regarding the U.S. agriculture negotiating proposal
submitted to the WTO in June 2000, the Committee recognizes
that one of the U.S. objectives is to reduce substantially
trade-distorting domestic support in a manner that corrects the
disproportionate levels of support members use, while
simplifying the way in which domestic support is disciplined.
The Committee is concerned about the disparities in the
relative levels of agricultural production support between the
United States and other developed countries. The Committee
notes with interest with that while the maximum U.S. Aggregate
Measure of Support (AMS) (as reported in the Uruguay Round
Trade Agreement) is approximately $19.1 billion annually, the
European Union's AMS is approximately $59.8 billion. Likewise,
the Committee notes with great concern the disparities that
exist with regard to export subsidies. For example, the EU
provides approximately $5 billion annually in export subsidies
compared to approximately $100 million provided by the United
States.
The Committee believes that to correct these disparities,
any reductions made to the U.S. Aggregate Measure of Support
must be based upon the U.S. bound commitment ($19.1 billion
annually, as reported in the Uruguay Round Trade Agreement),
and not on any lower applied level. Further, subsidy cuts need
to be reviewed in absolute dollar terms, and not only in
percentage terms.
The Committee also believes that establishing a common base
year for the Aggregate Measure of Support will increase
certainty and transparency in agricultural subsidy
negotiations. Under the common base year concept, all countries
would have to agree to make subsidy commitments based upon data
from a common set of base years. Therefore, having a common
base year will help ensure that the United States is not put at
a disadvantage in these negotiations, since countries would be
prevented from choosing a base year in which they had unusually
high agricultural subsidies.
The Committee recognizes that in order for the U.S.
agricultural sector to compete on a level global playing field,
the U.S. Trade Representative must seek disciplines on domestic
support polices. These disciplines will help ensure that U.S.
producers face an international trade environment that is based
upon world market prices.
Regarding U.S. import-sensitive products, the Committee
believes that USTR should seek reasonable adjustment periods
for these products. The Committee alsobelieves that USTR should
seek improved import relief mechanisms that recognize the unique
characteristics of perishable and cyclical agriculture. Further, the
Committee believes that it is important that USTR formulate a specific
proposal on the treatment of seasonal and perishable agricultural
products to be employed in the future negotiations in order to develop
an international consensus on the treatment of such products in
investigations relating to dumping, safeguards, and other relevant
trade remedies. Since the Committee also believes that the timing of
this proposal is of the highest importance, the Committee expects USTR
to prepare this proposal as soon as possible, especially as the United
States has commenced negotiations on agriculture in the WTO, as well as
negotiations for the Free Trade Area of the Americas, and several
bilateral free trade agreements.
The Committee also believes that, during trade
negotiations, USTR should take into account whether a trading
partner has failed to adhere to existing agreements, and
whether trade in a specific product is subject to market
distortions resulting from the failure of a major producing
country to comply with its trade agreements with the United
States.
The Committee intends that the Administration seek an end
to unjustified restrictions that affect new technologies, such
as labeling when used as an unjustified restriction.
Labor and environment: The Committee believes that trade
promotion authority may be used with respect to ensuring that a
foreign government does not fail to effectively enforce its own
environmental or labor laws, if: (1) the failure reflects a
sustained or recurring course of action or inaction; and (2) is
undertaken in a manner affecting trade between the United
States and that country. The language provides an exception if
the behavior reflects a reasonable exercise of discretion or
results from a bona fide decision regarding allocation of
resources. The Committee used the U.S.-Jordan Free Trade
Agreement as a model for this language, which permits parties
to the agreement to retain the right to set their own labor and
environmental standards.
In determining whether foreign government policies and
practices are covered by this negotiating objective, the
Committee intends that the USTR consult closely with the
Congress, the private sector, and other interested groups.
The Committee also believes that the United States should
seek to strengthen the capacity of U.S. trading partners to
promote respect for core labor standards, as defined in the
legislation. With respect to the environment, the Committee
believes that the United States should also seek (1) to
strengthen the capacity of U.S. trading partners to protect the
environment through the promotion of sustainable development;
(2) to promote government practices or policies in the area of
trade that improve sustainable development and to reduce or
eliminate practices or policies related to trade that unduly
threaten sustainable development; and (3) to seek market access
for U.S. environmental technologies, goods, and services.
Finally, the Committee recognizes that in certain
circumstances, aspects of practices and policies involving
labor, the environment, and other matters may decrease market
opportunities for U.S. exports or otherwise distort U.S. trade.
Those aspects of these policies and practices may accordingly
be included in trade agreements whose implementation qualifies
for TPA.
Specifically, the Committee intends that this negotiating
objective cover the use of labor and environmental laws by
another country to restrict U.S. access to its market; if
another country sought to use labor or environmental
restrictions to limit trade improperly, the United States
should be able to respond in trade terms.
Dispute settlement and enforcement: The Committee intends
that USTR seek provisions in trade agreements providing for
resolution of disputes between governments in an effective,
timely, transparent, equitable, and reasoned manner requiring
determinations based on facts and the principles of the
agreement, with the goal of increasing compliance. The
Committee's primary goal with respect to this negotiating
objective is to promote compliance with trade agreements.
The Committee also believes that consultations are an
important means of settling disputes early and effectively,
without resort to remedies or penalties, and urges USTR to seek
to establish meaningful consultation mechanisms in trade
agreements.
The Committee also supports the use of compensation to
resolve disputes, whereby a party found to be violating a trade
agreement lowers tariffs or otherwise increases access to its
own market to rebalance the loss of concessions brought upon by
that party's failure to adhere to its obligations. If the
parties resort to other remedies or penalties, the Committee
urges USTR to ensure that dispute settlement provisions in
trade agreements encourage compliance and are appropriate to
the parties, nature, subject matter, and scope of the
violation.
In addition, the Committee strongly believes that the
remedies and penalties made available to parties under dispute
settlement should have the aim of not adversely affecting
parties or interests not party to the dispute while maintaining
the effectiveness of the enforcement mechanism. Too often,
dispute settlement has the effect of creatingcollateral damage
by harming parties who had not been involved in the original dispute.
At the same time, however, the Committee believes that whatever
mechanism selected should be effective and encourage compliance with
trade obligations.
The Committee also intends that trade agreements treat U.S.
all principal negotiating objectives equally with respect to
ability to resort to dispute settlement and availability of
equivalent procedures and remedies. The Committee believes that
the concept of ``equivalent'' remedy will allow negotiators
flexibility in determining the appropriate remedies, with the
fundamental purpose of finding remedies that are effective in
promoting compliance with the objective at issue even if they
may not be identical.
Finally, the Committee notes that the term ``international
trade'' includes both imports and exports, as well as trade in
services, trade-related investment, and trade-related
intellectual property.

3. SECTION 2(c): PROMOTION OF CERTAIN PRIORITIES

Present/expired law

No provision.

Explanation of provision

Section 2(c) sets forth certain priorities for the
President to address. These provisions include seeking greater
cooperation between WTO and the ILO; seeking to establish
consultative mechanisms among parties to trade agreements to
strengthen the capacity of U.S. trading partners to promote
respect for core labor standards; seeking to seek to establish
consultative mechanisms among parties to trade agreements to
strengthen the capacity of U.S. trading partners to develop and
implement standards for environment and human health based on
sound science; conducting environmental reviews of future trade
and investment agreements, consistent with Executive Order
13141 and its relevant guidelines; reviewing the impact of
future trade agreements on U.S. employment, modeled after
Executive Order 13141; taking into account, in negotiating
trade agreements, protection of legitimate health or safety,
essential security, and consumer interests; requiring the
Secretary of Labor to consult with foreign parties to trade
negotiations as to their labor laws and providing technical
assistance where needed; reporting to Congress on the extent to
which parties to an agreement have in effect laws governing
exploitative child labor; preserving the ability of the United
States ability to enforce rigorously its trade laws, including
antidumping and countervailing duty laws, and avoid agreements
which lessen their effectiveness; continuing to promote
consideration of Multilateral Environmental Agreements (MEAs)
and consult with parties to such agreements regarding the
consistency of any MEA that includes trade measures with
existing environmental exceptions under Article XX of the GATT.
In addition, USTR, twelve months after the imposition of a
penalty or remedy by the United States permitted by an
agreement to which this Act applies, is to report to the
Committee on the effectiveness of remedies applied under U.S.
law to enforce U.S. rights under trade agreements. USTR shall
address whether the remedy was effective in changing the
behavior of the targeted party and whether the remedy had any
adverse impact on parties or interests not party to the
dispute.

Reason for change

The Committee believes that there are certain priorities
that USTR should pursue parallel to trade negotiations in order
to promote respect for core labor standards and to develop and
implement standards for environment and human health based on
sound science. Capacity building within the developing world,
the establishment of consultative mechanisms, and greater
cooperation between the WTO and the ILO are important means for
accomplishing these goals. USTR is to consult regularly with
Members and the COG regarding its efforts regarding capacity-
building within the developing world and report to the
Committee on these efforts.
The Committee also believes that the United States,
through thorough internal reviews, should continue the existing
practice of assessing the impact of trade agreements and
investment components of trade agreements on the environment,
as it has been doing under Executive Order 13141, and on U.S.
employment and labor markets. The intent is not to codify the
Executive Order or guidelines, or to create a mechanism for
judicial review of these assessments, but to continue the
process that USTR began under the Clinton Administration on the
environment and expand it to employment. The Committee believes
strongly that such reviews will show the positive impacts of
trade on the environment and on employment.
In addition, the Committee believes that parallel to the
trade negotiating process, the Department of Labor should learn
more about the labor laws of a potential trading partner and
provide technical assistance, if needed. With respect to
exploitative child labor, the Committee believes that Congress
should be aware of the laws of parties to trade agreements with
the United States.
The Committee also intends to enhance domestic policy
coordination and communication, both in the United States and
in other countries, between Multilateral Environmental
Agreement (MEA) and trade agreement negotiators, with a view
toward the continued compatibility of MEA and WTO rules.
The Committee also intends that USTR take into account
other important domestic priorities, including the protection
of legitimate health or safety, essential security, and
consumer interests.
The Committee also intends that negotiators preserve, in
all trade agreements, the ability of the United States to
enforce rigorously its antidumping and countervailing duty
laws, and to avoid any agreement that would lessen the
effectiveness of the current U.S. antidumping and
countervailing duty remedies. The Committee regards this
directive as critically important for any new trade agreement
to serve the overall economic interests of the United States.
The Committee clarifies that although this provision is not
included in sections 2 (a) or (b) of the bill (relating to
negotiating objectives), this is not an indication that the
resolve to maintain existing U.S. antidumping and
countervailing duty laws is in any way diminished, and in fact
it has been included in a section of the bill indicating
actions the President shall take.
Finally, the Committee is requiring USTR to provide to the
Committee, each time it imposes trade remedies to enforce U.S.
rights under a trade agreement, an assessment of the
effectiveness of those remedies. The Committee wishes to learn
whether the remedy was effective in changing the behavior of
the targeted party and whether the remedy had any adverse
impact on parties or interests not party to the dispute. This
provision underscores the Committee's commitment to an
effective dispute settlement process.

4. Section 2 (d)-(e): Consultations, Adherence to Obligations Under
Uruguay Round Agreements

Present/expired law

No provision.

Explanation of provision

Section 2(d) requires that USTR consult closely and on a
timely basis with the Congressional Oversight Group appointed
under section 7. In addition, USTR would be required to consult
closely (including immediately before the initialing of an
agreement) with the congressional advisers on trade policy and
negotiations appointed under section161 of the Trade Act of
1974, as well as the House Committee on Ways and Means, the Senate
Committee on Finance, and the Congressional Oversight Group. With
regard to negotiations concerning agriculture trade, USTR would also be
required to consult with the House and Senate Committees on
Agriculture.
In determining whether to enter into negotiations with a
particular country, section 2(e) would require the President to
take into account whether that country has implemented its
obligations under the Uruguay Round Agreements.

Reason for change

The Committee intends that the Administration maintain
close contacts with the Committee, with Congressional advisers
on trade policy, and with the newly-formed permanent
Congressional Oversight Group throughout the negotiation
process, including immediately before the initialing of the
agreement. With respect to agriculture negotiations, the
Committee believes that the Agriculture Committee should have
improved consultations as well. Such consultations must be both
meaningful and timely.

5. Section 3: Trade agreements authority

Present/expired law

Tariff proclamation authority. Section 1102(a) of the 1988
Act provided authority to the President to proclaim
modifications in duties without the need for Congressional
approval, subject to certain limitations. Specifically, for
rates that exceed 5 percent ad valorem, the President could not
reduce any rate of duty to a rate less than 50 percent of the
rate of duty applying on the date of enactment. Rates at or
below 5 percent could be reduced to zero. Any duty reduction
that exceeded 50 percent of an existing duty higher than 5
percent or any tariff increase had to be approved by Congress.
Staging authority required that duty reductions on any
article could not exceed 3 percent per year, or one-tenth of
the total reduction, whichever is greater, except that staging
was not required if the International Trade Commission
determined there was no U.S. production of that article.
Negotiation of bilateral agreements. Section 1102(c) of the
1988 Act set forth three requirements for the negotiation of a
bilateral agreement:
The foreign country must request the
negotiation of the bilateral agreement;
The agreement must make progress in meeting
applicable U.S. trade negotiating objectives; and
The President must provide written notice of
the negotiations to the Committee on Ways and Means and
the Committee on Finance of the Senate and consult with
these committees.
The negotiations could proceed unless either Committee
disapproved the negotiations within 60 days prior to the 90
calendar days advance notice required of entry into an
agreement (described below).
Negotiation of multilateral non-tariff agreements. With
respect to multilateral agreements, section 1102(b) of the 1988
Act provided that whenever the President determines that any
barrier to, or other distortion of, international trade unduly
burdens or restricts the foreign trade of the United States or
adversely affects the U.S. economy, or the imposition of any
such barrier or distortion is likely to result in such a
burden, restriction, or effect, he may enter into a trade
agreement with the foreign countries involved. The agreement
must provide for the reduction or elimination of such barrier
or other distortion or prohibit or limit the imposition of such
a barrier or distortion.
Provisions qualifying for fast track procedures. Section
1103(b)(1)(A) of the 1988 Act provided that fast track apply to
implementing bills submitted with respect to any trade
agreements entered into under the statute. Section 151(b)(1) of
the Trade Act of 1974 further defined ``implementing bill'' as
a bill containing provisions ``necessary or appropriate'' to
implement the trade agreement, as well as provisions approving
the agreement and the statement of administrative action.
Time period. The authority applied with respect to
agreements entered into before June 1, 1991, and until June 1,
1993 unless Congress passed an extension disapproval
resolution. The authority was then extended to April 15, 1994,
to cover the Uruguay Round of multilateral negotiations under
the General Agreement on Tariffs and Trade.

Explanation of provision

Proclamation authority. Section 3(a) would provide the
President the authority to proclaim, without Congressional
approval, certain duty modifications in a manner very similar
to the expired provision. Specifically, for rates that exceed 5
percent ad valorem, the President would not be authorized to
reduce any rate of duty to a rate less than 50 percent of the
rate of duty applying on the date of enactment. Rates at or
below 5 percent ad valorem could be reduced to zero. Any duty
reduction that exceeded 50 percent of an existing duty higher
than 5 percent or any tariff increase would have to be approved
by Congress. Staging authority would require that duty
reductions on any article could not exceed 3 percent per year,
or one-tenth of the total reduction, whichever is greater,
except that staging would not be required if the International
Trade Commission determined there is no U.S. production of that
article.
These limitations would not apply to reciprocal agreements
to eliminate or harmonize duties negotiated under the auspices
of the World Trade Organization, such as so-called ``zero-for-
zero'' negotiations.
Agreements on tariff and non-tariff barriers. Section
3(b)(1) would authorize the President to enter into a trade
agreement with a foreign country whenever he determined that
any duty or other import restriction or any other barrier to or
distortion of international trade unduly burdens or restricts
the foreign trade of the United States or adversely affects the
U.S. economy, or the imposition of any such barrier or
distortion is likely to result in such a burden, restriction,
or effect. The agreement must provide for the reduction or
elimination of such barrier or other distortion or prohibit or
limit the imposition of such a barrier or distortion. No
distinction would be made between bilateral and multilateral
agreements.
Conditions. Section 3(b)(2) would provide that the special
implementing bills procedures may be used only if the agreement
makes progress in meeting the applicable objectives set forth
in section 2 (a) and (b) and the President satisfies the
consultation requirements set forth in section 4.
Bills qualifying for trade authorities procedures. Section
3(b)(3)(A) would provide that bills implementing trade
agreements may qualify for trade promotion authority TPA
procedures only if those bills consist solely of the following
provisions:
Provisions approving the trade agreement and
statement of administrative action; and
Provisions necessary or appropriate to
implement the trade agreement.
Time period. Sections 3(a)(1)(A) and 3(b)(1)(C) would
extend trade promotion authority to agreements entered into
before June 1, 2005. An extension until June 1, 2007, would be
permitted unless Congress passed a disapproval resolution, as
described under section 3(c).

Reason for change

H.R. 3005, as amended, extends to the President the same
authority to proclaim tariff modifications as under the 1988
Act. In addition, the President would be given authority to
negotiate reciprocal duty eliminations on a sectoral basis
within the WTO forum. The Committee believes that the
Information Technology Agreement negotiated by the President
under the auspices of the WTO to eliminate tariffs for
information technology products all over the world was a
substantial accomplishment. The Committee recognizes, however,
that the President's ability to carry out such agreements is
limited because section 111(b) of the Uruguay Round Agreements
Act provides the President with proclamation authority
applicable only to a limited number of sectors, that is those
that were negotiated multilaterally under the WTO and that were
the subject of negotiations on reciprocal duty elimination
(``zero-for-zero'') or harmonization during the Uruguay Round.
Because of the success that the Information Technology
Agreement promises for U.S. businesses and U.S. workers, the
Committee wishes to provide authority for this and similar WTO
sector-specific negotiations even if the sector had not been
the subject of zero-for-zero negotiations during the Uruguay
Round.
Therefore, the purpose of this special tariff proclamation
authority is to permit the U.S. Trade Representative to
negotiate sector-specific tariff elimination or harmonization
agreements at any time during the course of the next round of
WTO trade negotiations scheduled for later this year. The
emphasis should be on reaching concrete results as soon as
possible. The Committee recognizes that other nations may be
reluctant to make binding commitments early in the
negotiations, on the theory that this reduces their bargaining
leverage on other items later in the round. To prevent such
concerns from slowing progress on near term tariff elimination
agreements, the Committee intends that the special tariff
proclamation authority could be used to negotiate provisional
agreements which would allow for immediate tariff reductions,
but make permanent duty elimination conditional on a final
agreement in the new round. This would allow for near term
benefits from tariff elimination, while preserving the ability
of countries, including the United States, to condition the
tariff cuts on a final comprehensive agreement on all subjects
under negotiation in the new round.
While the Committee does not intend to limit the possible
tariff elimination agreements that could be reached under this
authority, it does wish to identify the following areas where
it believes that tariff elimination negotiations should be
focused before the conclusion of the round as a whole:
Accelerated tariff elimination in those
sectors where consensus can be achieved;
Geographic expansion of the zero-for-zero
tariff agreements reached in the Uruguay Round and in
the Information Technology Agreement; and
Geographic expansion of tariff harmonization
agreements reached in the Uruguay Round.
H.R. 3005, as amended, would apply the same substantive and
procedural requirements to all types of agreements, thus ending
the special rules for bilateral versus multilateral agreements.
With respect to the requirements for bills qualifying for
trade promotion authority, it is the Committee's intent to
extend authority to the President to negotiate agreements that
would be subject to the special procedures similar to that
given to past Administrations.
The Committee believes that for historical and
constitutional reasons, it is important to make trade promotion
authority as tailored as possible so as not to unnecessarily
intrude on normal legislative procedures. Trade promotion
authority is an exception to the rule that is permitted only
because of the recognition of the compelling need to consider
quickly and efficiently legislation to implement trade
agreements. The President and the Congress both have important
powers with respect to trade and foreign affairs issues.
Therefore, trade agreements do not readily fit the legislative
model used to consider other types of legislation. Trade
promotion authority has been developed to assure that trade
relations with other countries are handled expeditiously and
efficiently with the involvement of the executive and
legislative branches. In so doing, the Committee has always
recognized that this authority should apply only to meet the
special requirements of trade agreements. To apply the
authority more broadly would usurp a broad range of
Congressional authority and prerogatives to make laws in these
areas.
Moreover, the Committee believes that every attempt should
be made to use TPA only for those provisions in the
implementing bill that are strictly necessary or appropriate to
implement the agreement. The Committee takes a strict
interpretation of this language. Specifically, the Committee
emphasizes that trade promotion authority, particularly section
103(b)(3)(C), should not apply to proposals to make wholesale
changes to U.S. law merely because those laws may be addressed
in the agreement. The Committee has been concerned that a
number of provisions that were not related to implementing the
trade agreement at hand have been included in past implementing
bills.

6. Section 4: Consultations and Assessment

Present/expired law

Section 102 of the Trade Act of 1974 and sections 1102(d)
and 1103 of the 1988 Act set forth the fast track requirements.
These provisions required the President, before entering into
any trade agreement, to consult with Congress as to the nature
of the agreement, how and to what extent the agreement will
achieve applicable purposes, policies, and objectives, and all
matters relating to agreement implementation. In addition,
before entering into an agreement, the President was required
to give Congress at least 90 calendar days advance notice of
his intent. The purpose of this period was to provide the
Congressional Committees of jurisdiction an opportunity to
review the proposed agreement before it was signed.
Section 135(e) of the Trade Act of 1974 required that the
Advisory Committee for Trade Policy and Negotiations meet at
the conclusion of negotiations for each trade agreement and
provide a report as to whether and to what extent the agreement
promotes the economic interests of the United States and
achieves the applicable overall and principal negotiating
objectives of section 1101 of the 1988 Act. The report was due
not later than the date on which the President notified
Congress of his intent to enter into an agreement. With regard
to the Uruguay Round, the report was due 30 days after the date
of notification.

Explanation of provision

Section 4 of H.R. 3005, as amended, would establish a
number of requirements that the President consult with
Congress. Specifically, section 4(a)(1) would require the
President to provide written notice and consult with the
relevant committees at least 90 calendar days prior to entering
into negotiations. Trade promotion authority would not apply to
an implementing bill if both Houses separately agree to a
procedural disapproval resolution within any 60-day period
stating that the Administration has failed to notify or consult
with Congress.
Section 4(b) would establish a special consultation
requirement for agriculture. Specifically, before initiating
negotiations concerning tariff reductions in agriculture, the
President is to assess whether U.S. tariffs on agriculture
products that were bound under the Uruguay Round Agreements are
lower than the tariffs bound by that country. In his
assessment, the President would also be required to consider
whether the tariff levels bound and applied throughout the
world with respect to imports from the United States are higher
than U.S. tariffs and whether the negotiation provides an
opportunity to address any such disparity. The President would
be required to consult with theCommittees on Ways and Means and
Agriculture of the House and the Committees on Finance and Agriculture,
Nutrition and Forestry of the Senate concerning the results of this
assessment and whether it is appropriate for the United States to agree
to further tariff reductions under such circumstances and how all
applicable negotiating objectives would be met.
In addition, section 4(c) would require the President,
before entering into any trade agreement, to consult with the
relevant Committees concerning the nature of the agreement, how
and to what extent the agreement will achieve the applicable
purposes, policies, and objectives set forth in H.R. 3005, as
amended, and all matters relating to implementation under
section 5, including the general effect of the agreement on
U.S. laws.
Section 4(c) would require that the report of the Advisory
Committee for Trade Policy and Negotiations under section
135(e)(1) of the Trade Act of 1974 be provided not later than
30 days after the date on which the President notifies Congress
of his intent to enter into the agreement under section
5(a)(1)(A).
Finally, section 4(e) would require the President, at least
90 days before entering into a trade agreement, to ask the
International Trade Commission to assess the agreement,
including the likely impact of the agreement on the U.S.
economy as a whole, specific industry sectors, and U.S.
consumers. That report would be due 90 days from the date after
the President enters into the agreement.

Reason for change

H.R. 3005, as amended, would treat all trade agreements
concluded under section 3(b) in the same manner for
consultation purposes and does not differentiate between
bilateral and multilateral agreements. Accordingly, the bill
would extend to all such negotiations, and not just to
bilateral negotiations as in the 1988 Act, the requirement that
the President provide prior written notice of negotiations.
The Committee emphasizes the importance of timely,
complete, and rigorous consultations between the Administration
and Congress. The improvements made with respect to
consultations, as compared with the expired provisions, are
designed to assure maximum Congressional participation before,
during, and after the trade negotiating process. The Committee
notes that in the past, consultations have been at times less
than ideal and wishes to improve this process considerably to
make it more meaningful. Given the significant Congressional
role in trade policy set forth in the Constitution, it is
imperative that Members and their staffs be given periodic and
timely substantive briefings by U.S. negotiators and access to
relevant documents and information sources. The Committee
emphasizes that Congress must be fully involved in all phases
of the negotiating process and must have the ability to fully
express its views and exert its constitutional role. The
Committee intends that throughout the process, the
consultations address the nature of the agreement in question,
how and to what extent the agreement will achieve the
applicable purposes, policies, and objectives set forth in H.R.
3005, as amended, and all matters relating to implementation
under section 5, including the general effect of the agreement
on U.S. laws.
The provisions require broad consultations, involving
Committees other than the Committee on Ways and Means. In
addition, because of the special requirements of agriculture
tariff negotiations, if there is a great tariff disparity
between the U.S. duty rate and the rate bound or applied by
other countries, additional consultation requirements would
apply.
H.R. 3005, as amended, would permit the Advisory Committee
for Trade Policy and Negotiations to submit its report after
the President notifies his intent to enter into an agreement,
as opposed to requiring the report be filed on the same day as
that notification. The Committee believes that the additional
time would contribute to the usefulness of the report.

7. Section 5: Implementation of Trade Agreements

Present/expired law

Before entering into the draft agreement, the President was
required to give Congress 90 days advance notice (120 days for
the Uruguay Round) to provide an opportunity for revision
before signature. After entering into the agreement, the
President was required to submit formally the draft agreement,
implementing legislation, and a statement of administrative
action. Once the bill was formally introduced, there was no
opportunity to amend any portion of the bill--whether on the
floor or in committee. Consequently, before the formal
introduction took place, the committees of jurisdiction would
hold hearings, ``unofficial'' or ``informal'' mark-up sessions
and a ``mock conference'' with the Senate committees of
jurisdiction in order to develop a draft implementing bill
together with the Administration and to make their concerns
known to the Administration before it introduced the
legislation formally.
After formal introduction of the implementing bill, the
House committees of jurisdiction had 45 legislative days to
report the bill, and the House was required to vote on the bill
within 15 legislative days after the measure was reported or
discharged from the committees. Fifteen additional days were
provided for Senate committee consideration (assuming the
implementing bill was a revenue bill), and the Senate floor
action was required within 15 additional days. Accordingly, the
maximum period for Congressional consideration of an
implementing bill from the date of introduction was 90
legislative days. Amendments to the legislation were not
permitted once the bill was introduced; the committee and floor
actions consisted of ``up or down'' votes on the bill as
introduced.
Finally, section 1103(d) of the 1988 Act specified that the
fast track rules were enacted as an exercise of the rulemaking
power of the House and the Senate, with the recognition of the
right of either House to change the rules at any time.

Explanation of provision

Under section 5(a) of H.R. 3005, as amended, the President
would be required, at least 90 days before entering into an
agreement, to notify Congress of his intent to enter into the
agreement. Section 5(a) also would establish a new requirement
that the President, within 60 days of signing an agreement,
submit to Congress a preliminary list of existing laws that he
considers would be required to bring the United States into
compliance with agreement.
Section 5(b) would provide that trade promotion authority
would not apply if both Houses separately agree to a procedural
disapproval resolution within any 60-day period stating that
the Administration failed to notify or consult with Congress.
Most of the remaining provisions are identical to the
expired law. Specifically, section 5(a) would require the
President, after entering into agreement, to submit formally
the draft agreement, the implementing legislation, and a
statement of administrative action to Congress, and there would
be no time limit to do so. The procedures of section 151 of the
Trade Act of 1974 would then apply. Specifically, on the same
day as the President formally submits the legislation, the bill
would be introduced (by request) by the Majority Leaders of the
House and the Senate. After formal introduction of the
legislation, the House Committees of jurisdiction would have 45
legislative days to report the bill. The House would be
required to vote on the bill within 15 legislative days after
the measure was reported or discharged from the Committees.
Fifteen additional days would be provided for Senate Committee
consideration (assuming the implementing bill was a revenue
bill), and Senate floor action would be required within 15
additional days. Accordingly, the maximum period for
Congressional consideration of the implementing bill from the
date of introduction would be 90 legislative days.
As with the expired provisions, once the bill has been
formally introduced, no amendments would be permitted either in
Committee or floor action, and a straight ``up or down'' vote
would be required. Of course, before formal introduction, the
bill could be developed by the Committees of jurisdiction
together with the Administration during the informal Committee
mark-up process.
Finally, as with the expired provision, section 5(c)
specifies that sections 5(b) and 3(c) are enacted as an
exercise of the rulemaking power of the House and the Senate,
withthe recognition of the right of either House to change the
rules at any time.

Reason for change

The procedures established under H.R. 3005, as amended, are
mainly identical to those of the 1988 Act, with considerable
additional consultation requirements. The Committee believes
that these procedures will permit Congress to participate
meaningfully in the drafting of the implementing bill.
As with the past provision, there would be no deadline for
the submission of the legislation by the President once an
agreement has been concluded, because the Committee intends
that the Committees and the Administration have as much time as
necessary to consider the content of the legislation. After the
formal introduction, certain deadlines are appropriate because
Congress has already conducted its process informally. The
Committee believes that the informal mark-up process conducted
before formal submission of the implementing bill provides the
Congress, the public, and the private sector ample opportunity
to participate in the development of the proposed legislation
and to provide their views to the Administration. The Committee
encourages and expects the Administration to continue its
practice of considering carefully the comments made during this
informal process and of making no changes to the legislation
beyond those recommended by the Committees. If the
Administration must make changes to reconcile differing
recommendations by the relevant Committees, the Committee
expects that the Administration will continue to consult with
the affected Committees.
H.R. 3005, as amended, would add a new procedural step
requiring that the President submit to Congress, within 60 days
of signing an agreement, a preliminary list of existing laws
that he considers would be required to bring the United States
into compliance with the agreement. This requirement has been
added out of concern that in the past, Congress has not always
been timely apprised of the changes to U.S. law that the
Administration believes are required. This information is of
vital importance to the Committee in its deliberations.

8. SECTION 6: TREATMENT OF CERTAIN TRADE AGREEMENTS

Present/expired law

No provision.

Explanation of provision

Section 6 exempts agreements resulting from ongoing
negotiations with Chile or Singapore, an agreement establishing
a Free Trade Area of the Americas, and agreements concluded
under the auspices of the WTO from prenegotiation consultation
requirements of section 4(a) only. However, upon enactment of
H.R. 3005, as amended, the Administration is required to
consult as to those elements set forth in section 4(a) as soon
as feasible.

Reason for change

The Committee recognizes the importance of the listed
negotiations to the United States and the need to implement
them under trade promotion authority. However, because these
negotiations have already begun or may have begun before H.R.
3005 is enacted, it would not be possible for the
Administration to comply with the prenegotiation consultation
requirements set forth in section 4(a). Accordingly, the
Committee believes these requirements should be waived with
regard to these agreements only. However, the Committee expects
that the Administration will consult with Congress as soon as
feasible after enactment of this Act and will continue to
consult closely with the Committees throughout the negotiations
so that the Committees may be informed about the issues and
communicate any concerns.

9. SECTION 7: CONGRESSIONAL OVERSIGHT GROUP

Present/expired law

No provision.

Explanation of provision

Section 7 would require the Chairman of the Committee on
Ways and Means and the Chairman of the Committee on Finance to
chair and convene, sixty days after the effective date of this
Act, the Congressional Oversight Group. The Group would be
comprised of the following Members of the House: the Chairman
and Ranking Member of the Committee on Ways and Means and three
additional members of the Committee (not more than two of whom
are from the same party), and the Chairman and Ranking Member
of the Committees which would have, under the Rules of the
House, jurisdiction over provisions of law affected by a trade
negotiation. The Group would be comprised of the following
Members of the Senate: the Chairman and Ranking Member of the
Committee on Finance and three additional members of the
Committee (not more than two of whom are from the same party),
and the Chairman and Ranking Member of the Committees which
would have, under the Rules of the Senate, jurisdiction over
provisions of law affected by a trade negotiation.
Members are to be accredited as official advisors to the
U.S. delegation in the negotiations. USTR is to develop
guidelines to facilitate the useful and timely exchange of
information between USTR and the Group, including regular
briefings, access to pertinent documents, and the closest
possible coordination at all critical periods during the
negotiations, including at negotiation sites.

Reason for change

The Committee believes that the establishment of the
Congressional Oversight Group will greatly facilitate the
meaningful and timely exchange of information and views between
USTR and Congress. The Group is designed to involve a broad
bipartisan cross-section of the House and Senate so that USTR
will benefit from many viewpoints. Specifically, the Committee
intends that the Group be bipartisan and include representation
beyond the Ways and Means and Finance Committees to include
those Committees that have jurisdiction over provisions of law
affected by a trade negotiation. The composition of the Group
is flexible to allow for the inclusion, after the convening of
the Group, of additional Committees if developments in the
negotiation indicate that they will have jurisdiction over laws
affected by the negotiation.
Finally, by developing written guidelines for the exchange
of information in consultation with the Committee, USTR will
formally institutionalize the consultation process to maximize
its effectiveness.

10. SECTION 8: ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS

Present/expired law

No provision.

Explanation of provision

Section 8 would require the President to submit to the
Congress a plan for implementing and enforcing any trade
agreement resulting from this Act. The report is to be
submitted simultaneously with the text of the agreement and is
to include a review of the Executive Branch personnel needed to
enforce the agreement as well as an assessment of any U.S.
Customs Service infrastructure improvements required. The range
of personnel to be addressed in the report is very
comprehensive, including U.S. Customs and Department of
Agriculture border inspectors, and monitoring and implementing
personnel at USTR, the Departments of Agriculture, Commerce,
and the Treasury, and any other agencies as may be required.

Reason for change

The Committee believes that successful negotiations by
themselves are not sufficient to realize the benefits from
freer trade. Monitoring and enforcement are complementary and
necessary factors in the trade liberalization process. That is,
meaningful progress will result when trading partners know that
the United States stands ready to enforce its rights under
trade agreements. This provision, the Committee believes, will
help to enhance the enforcement readiness of the United States
by requiring the President to conduct a systematic review of
the various agencies involved in border and other types of
trade monitoring and implementing activities. Further, the
Committee recognizes that infrastructure improvements are
important for Customs to maintain adequate border controls.
Therefore, the provision also requires the President to provide
a description of any additional equipment and facilities
required by Customs to enforce the agreement.

III. VOTES OF THE COMMITTEE

In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statements are made
concerning the votes of the Committee on Ways and Means in its
consideration of the bill, H.R. 3005.

motion to report the bill

The bill, H.R. 3005, as amended, was ordered favorably
reported by a roll call vote of 26 yeas to 13 nays (with a
quorum being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Representatives Yea Nay
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.............................. X ....... Mr. Rangel..................... ........ X
Mr. Crane............................... X ....... Mr. Stark...................... ........ ........
Mr. Shaw................................ X ....... Mr. Matsui..................... ........ X
Mrs. Johnson............................ X ....... Mr. Coyne...................... ........ ........
Mr. Houghton............................ X ....... Mr. Levin...................... ........ X
Mr. Herger.............................. X ....... Mr. Cardin..................... ........ X
Mr. McCrery............................. X ....... Mr. McDermott.................. ........ X
Mr. Camp................................ X ....... Mr. Kleczka.................... ........ X
Mr. Ramstad............................. X ....... Mr. Lewis (GA)................. ........ X
Mr. Nussle.............................. X ....... Mr. Neal....................... ........ X
Mr. Johnson............................. X ....... Mr. McNulty.................... ........ X
Ms. Dunn................................ X ....... Mr. Jefferson.................. X ........
Mr. Collins............................. X ....... Mr. Tanner..................... X ........
Mr. Portman............................. X ....... Mr. Becerra.................... ........ X
Mr. English............................. X ....... Mrs. Thurman................... ........ X
Mr. Watkins............................. X ....... Mr. Doggett.................... ........ X
Mr. Hayworth............................ X ....... Mr. Pomeroy.................... ........ X
Mr. Weller.............................. X
Mr. Hulshof............................. X
Mr. McInnis............................. X
Mr. Lewis (KY).......................... X
Mr. Foley............................... X
Mr. Brady............................... X
Mr. Ryan................................ X
----------------------------------------------------------------------------------------------------------------

vote on amendments

A roll call vote was conducted on the following amendment
to the Chairman's amendment in the nature of a substitute.
A substitute amendment by Mr. Rangel, was defeated by a
roll call vote of 12 yeas to 26 nays, with 1 member passing.
The vote was as follows:

----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Representatives Yea Nay
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.............................. ........ X Mr. Rangel..................... X ........
Mr. Crane............................... ........ X Mr. Stark...................... ........ ........
Mr. Shaw................................ ........ X Mr. Matsui..................... X ........
Mrs. Johnson............................ ........ X Mr. Coyne...................... ........ ........
Mr. Houghton............................ ........ X Mr. Levin...................... X ........
Mr. Herger.............................. ........ X Mr. Cardin..................... X ........
Mr. McCrery............................. ........ X Mr. McDermott.................. X ........
Mr. Camp................................ ........ X Mr. Kleczka.................... X ........
Mr. Ramstad............................. ........ X Mr. Lewis (GA)................. X ........
Mr. Nussle.............................. ........ X Mr. Neal....................... X ........
Mr. Johnson............................. ........ X Mr. McNulty.................... X ........
Ms. Dunn................................ ........ X Mr. Jefferson \1\.............. ........ ........
Mr. Collins............................. ........ X Mr. Tanner..................... ........ X
Mr. Portman............................. ........ X Mr. Becerra.................... X ........
Mr. English............................. ........ X Mrs. Thurman................... ........ X
Mr. Watkins............................. ........ X Mr. Doggett.................... X ........
Mr. Hayworth............................ ........ X Mr. Pomeroy.................... X ........
Mr. Weller.............................. ........ X
Mr. Hulshof............................. ........ X
Mr. McInnis............................. ........ X
Mr. Lewis (KY).......................... ........ X
Mr. Foley............................... ........ X
Mr. Brady............................... ........ X
Mr. Ryan................................ ........ X
----------------------------------------------------------------------------------------------------------------
\1\ Mr. Jefferson passed.

IV. BUDGET EFFECTS OF THE BILL

A. Committee Estimates of Budgetary Effect

In compliance with clause 3(d)(2) of rule XIII of the Rules
of the House of Representatives, the Committee agrees with cost
estimates furnished by the Congressional Budget Office on H.R.
3005, as amended, set forth below.

B. Budget Authority and Tax Expenditures

In compliance with subdivision 3(c)(2) of rule XIII of the
Rules of the House of Representatives, the Committee states
that the bill would have no effect on revenues because future
trade agreements would require implementing legislation.

C. Cost Estimate Prepared by the Congressional Budget Office

In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the Congressional Budget Office, the following
report prepared by CBO is provided.

U.S. Congress,
Congressional Budget Office,
Washington, DC, October 11, 2001.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3005, the
Bipartisan Trade Promotion Authority Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Erin
Whitaker.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.

H.R. 3005--Bipartisan Trade Promotion Authority Act

Summary: H.R. 3005 would restore the President's authority
to enter into multilateral and bilateral trade agreements with
Congressional approval or rejection of, but not amendment to,
those agreements. Enacting the bill would not affect revenues,
so pay-as-you-go procedures would not apply.
CBO has determined that H.R. 3009 contains no new private-
sector or intergovernmental mandates as defined in the Unfunded
Mandates Reform Act (UMRA) and would not affect the budgets of
state, local, or tribal governments.
Estimated cost to the Federal Government: CBO estimates
that enacting H.R. 3005 would have no budgetary impact.
Basis of estimate: Before their expiration on June 1, 1993,
sections 1102 and 1103 of the Omnibus Trade and Competitiveness
Act of 1988 granted the President the authority to enter into
multilateral and bilateral trade agreements. The President
could reduce certain tariffs by proclamation within specified
bounds prescribed by the law. For provisions subject to
Congressional approval, the Congress could not amend
implementing legislation once it was introduced. Furthermore,
as long as the President met statutory requirements concerning
Congressional consultation during the negotiation process,
Congress was required to act on the legislation following a
strict timetable. P.L. 103-40 temporarily extended these
provisions through April 16, 1994, for any trade agreement
resulting from the Uruguay Round negotiations taking place
under the General Agreement on Tariffs and Trade.
H.R. 3005 would restore the President's authority to
propose trade agreements under an expedited procedure for
Congressional approval. The bill would have no direct effect on
revenues, because future trade agreements would require
implementing legislation.
Pay-as-you-go considerations: None.
Intergovernmental and private-sector impact: The bill
contains no new private-sector or intergovernmental mandates as
defined in UMRA and would not impose any costs on state,
tribal, or local governments.
Estimate prepared by: Revenues: Erin Whitaker. Impact on
State, Local, and Tribal Governments: Elyse Goldman. Impact on
the Private Sector: Paige Piper/Bach.
Estimate approved by: Roberton Williams, Assistant Director
for Tax Analysis.

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

A. Committee Oversight Findings and Recommendations

With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was as a result of the
Committee's oversight activities concerning customs and tariff
matters, import trade matters, and specific trade-related
issues that the Committee concluded that it was appropriate to
enact the provisions contained in the bill.

B. Statement of General Performance Goals and Objectives

With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that H.R.
3005 is intended to improve the performance of the Executive
Branch with respect to negotiating trade agreements to increase
opportunities for U.S. companies, workers, and farmers.

C. Constitutional Authority Statement

With respect to clause 3(d)(1) of rule XIII of the Rules of
the House of Representatives, relating to Constitutional
Authority, the Committee states that the Committee's action in
reporting the bill is derived from Article I of the
Constitution, Section 8 (``The Congress shall have power to lay
and collect taxes, duties, imposts and excises, to pay the
debts and to provide for * * * the general Welfare of the
United States * * *''.

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):

TRADE ACT OF 1974

* * * * * * *

TITLE I--NEGOTIATING AND OTHER AUTHORITY

* * * * * * *

CHAPTER 3--HEARINGS AND ADVICE CONCERNING NEGOTIATIONS

SEC. 131. ADVICE FROM INTERNATIONAL TRADE COMMISSION.

(a) Lists of Articles Which May Be Considered for Action.--
(1) In connection with any proposed trade agreement
under [section 123 of this Act or section 1102 (a) or
(c) of the Omnibus Trade and Competitiveness Act of
1988,] section 123 of this Act or section 3 (a) or (b)
of the Bipartisan Trade Promotion Authority Act of
2001, the President shall from time to time publish and
furnish the International Trade Commission (hereafter
in this section referred to as the ``Commission'') with
lists of articles which may be considered for
modification or continuance of United States duties,
continuance of United States duty-free or excise
treatment, or additional duties. In the case of any
article with respect to which consideration may be
given to reducing or increasing the rate of duty, the
list shall specify the provision of this subchapter
under which such consideration may be given.
(2) In connection with any proposed trade agreement
under [section 1102 (b) or (c) of the Omnibus Trade and
Competitiveness Act of 1988] section 3(b) of the
Bipartisan Trade Promotion Authority Act of 2001, the
President may from time to time publish and furnish the
Commission with lists of nontariff matters which may be
considered for modification.
(b) Advice to President by Commission.--Within 6 months after
receipt of a list under subsection (a) or, in the case of a
list submitted in connection with a trade agreement, within 90
days after receipt of such list, the Commission shall advise
the President, with respect to each article or nontariff
matter, of its judgment as to the probable economic effect of
modification of the tariff or nontariff measure on industries
producing like or directly competitive articles and on
consumers, so as to assist the President in making an informed
judgment as to the impact which might be caused by such
modifications on United States interests, such as sectors
involved in manufacturing, agriculture, mining, fishing,
services, intellectual property, investment, labor, and
consumers. Such advice may include in the case of any article
the advice of the Commission as to whether any reduction in the
rate of duty should take place over a longer period of time
than the minimum period provided for in [section 1102(a)(3)(A)]
section 3(a)(3)(A) of the Bipartisan Trade Promotion Authority
Act of 2001.
(c) Additional Investigations and Reports Requested by the
President or the Trade Representative.--In addition, in order
to assist the President in his determination whether to enter
into any agreement under section 123 of this Act or [section
1102 of the Omnibus Trade and Competitiveness Act of 1988,]
section 3 of the Bipartisan Trade Promotion Authority Act of
2001, or how to develop trade policy, priorities or other
matters (such as priorities for actions to improve
opportunities in foreign markets), the Commission shall make
such investigations and reports as may be requested by the
President or the United States Trade Representative on matters
such as effects of modification of any barrier to (or other
distortion of) international trade on domestic workers,
industries or sectors, purchasers, prices and quantities of
articles in the United States.

* * * * * * *

SEC. 132. ADVICE FROM EXECUTIVE DEPARTMENTS AND OTHER SOURCES.

Before any trade agreement is entered into under section 123
of this Act or [section 1102 of the Omnibus Trade and
Competitiveness Act of 1988,] section 3 of the Bipartisan Trade
Promotion Authority Act of 2001, the President shall seek
information and advice with respect to such agreement from the
Departments of Agriculture, Commerce, Defense, Interior, Labor,
State and the Treasury, from the United States Trade
Representative, and from such other sources as he may deem
appropriate. Such advice shall be prepared and presented
consistent with the provisions of Reorganization Plan Number 3
of 1979, Executive Order Number 12188 and section 141(c).

SEC. 133. PUBLIC HEARINGS.

(a) Opportunity for Presentation of Views.--In connection
with any proposed trade agreement under section 123 of this Act
or [section 1102 of the Omnibus Trade and Competitiveness Act
of 1988,] section 3 of the Bipartisan Trade Promotion Authority
Act of 2001, the President shall afford an opportunity for any
interested person to present his views concerning any article
on a list published under section 131, any matter or article
which should be so listed, any concession which should be
sought by the United States, or any other matter relevant to
such proposed trade agreement. For this purpose, the President
shall designate an agency or an interagency committee which
shall, after reasonable notice, hold public hearings and
prescribe regulations governing the conduct of such hearings.
When appropriate, such procedures shall apply to the
development of trade policy and priorities.

* * * * * * *

SEC. 134. PREREQUISITES FOR OFFERS.

(a) In any negotiation seeking an agreement under section 123
of this Act or [section 1102 of the Omnibus Trade and
Competitiveness Act of 1988,] section 3 of the Bipartisan Trade
Promotion Authority Act of 2001, the President may make a
formal offer for the modification or continuance of any United
States duty, import restrictions, or barriers to (or other
distortions of) international trade, the continuance of United
States duty-free or excise treatment, or the imposition of
additional duties, import restrictions, or other barrier to (or
other distortion of) international trade including trade in
services, foreign direct investment and intellectual property
as covered by this title, with respect to any article or matter
only after he has received a summary of the hearings at which
an opportunity to be heard with respect to such article has
been afforded under section 133. In addition, the President may
make an offer for the modification or continuance of any United
States duty, the continuance of United States duty-free or
excise treatment, or the imposition of additional duties, with
respect to any article included in a list published and
furnished under section 131(a), only after he has received
advice concerning such article from the Commission under
section 131(b), or after the expiration of the 6-month or 90-
day period provided for in that section, as appropriate,
whichever first occurs.
(b) In determining whether to make offers described in
subsection (a) in the course of negotiating any trade agreement
under [section 1102 of the Omnibus Trade and Competitiveness
Act of 1988] section 3 of the Bipartisan Trade Promotion
Authority Act of 2001, and in determining the nature and scope
of such offers, the President shall take into account any
advice or information provided, or reports submitted, by--
(1) * * *

* * * * * * *

SEC. 135. INFORMATION AND ADVICE FROM PRIVATE AND PUBLIC SECTORS.

(a) In General.--
(1) The President shall seek information and advice
from representative elements of the private sector and
the non-Federal governmental sector with respect to--
(A) negotiating objectives and bargaining
positions before entering into a trade
agreement under this title or [section 1102 of
the Omnibus Trade and Competitiveness Act of
1988] section 3 of the Bipartisan Trade
Promotion Authority Act of 2001;

* * * * * * *

(e) Meeting of Advisory Committees at Conclusion of
Negotiations.--
(1) The Advisory Committee for Trade Policy and
Negotiations, each appropriate policy advisory
committee, and each sectoral or functional advisory
committee, if the sector or area which such committee
represents is affected, shall meet at the conclusion of
negotiations for each trade agreement entered into
under [section 1102 of the Omnibus Trade and
Competitiveness Act of 1988] section 3 of the
Bipartisan Trade Promotion Authority Act of 2001, to
provide to the President, to Congress, and to the
United States Trade Representative a report on such
agreement. Each report that applies to a trade
agreement entered into under [section 1102 of the
Omnibus Trade and Competitiveness Act of 1988] section
3 of the Bipartisan Trade Promotion Authority Act of
2001 shall be provided under the preceding sentence not
later than the date on which the President notifies the
Congress under [section 1103(a)(1)(A) of such Act of
1988] section 5(a)(1)(A) of the Bipartisan Trade
Promotion Authority Act of 2001 of his intention to
enter into that agreement.
(2) The report of the Advisory Committee for Trade
Policy and Negotiations and each appropriate policy
advisory committee shall include an advisory opinion as
to whether and to what extent the agreement promotes
the economic interests of the United States and
achieves the applicable overall and principal
negotiating objectives set forth in [section 1101 of
the Omnibus Trade and Competitiveness Act of 1988]
section 2 of the Bipartisan Trade Promotion Authority
Act of 2001, as appropriate.

* * * * * * *

CHAPTER 5--CONGRESSIONAL PROCEDURES WITH RESPECT TO PRESIDENTIAL
ACTIONS

SEC. 151. BILLS IMPLEMENTING TRADE AGREEMENTS ON NONTARIFF BARRIERS AND
RESOLUTIONS APPROVING COMMERCIAL AGREEMENTS WITH
COMMUNIST COUNTRIES.

(a) * * *
(b) Definitions.--For purposes of this section--
(1) The term ``implementing bill'' means only a bill
of either House of Congress which is introduced as
provided in subsection (c) with respect to one or more
trade agreements, or with respect to an extension
described in section 282(c)(3) of the Uruguay Round
Agreements Act, submitted to the House of
Representatives and the Senate under section 102 of
this Act, [section 1103(a)(1) of the Omnibus Trade and
Competitiveness Act of 1988, or section 282 of the
Uruguay Round Agreements Act] section 282 of the
Uruguay Round Agreements Act, or section 5(a)(1) of the
Bipartisan Trade Promotion Authority Act of 2001 and
which contains--
(A) * * *

* * * * * * *

(c) Introduction and Referral.--
(1) On the day on which a trade agreement or
extension is submitted to the House of Representatives
and the Senate under section 102 [or section 282 of the
Uruguay Round Agreements Act], section 282 of the
Uruguay Round Agreements Act, or section 5(a)(1) of the
Bipartisan Trade Promotion Authority Act of 2001, the
implementing bill submitted by the President with
respect to such trade agreement or extension shall be
introduced (by request) in the House by the majority
leader of the House, for himself and the minority
leader of the House, or by Members of the House
designated by the majority leader and minority leader
of the House; and shall be introduced (by request) in
the Senate by the majority leader of the Senate, for
himself and the minority leader of the Senate, or by
Members of the Senate designated by the majority leader
and minority leader of the Senate. If either House is
not in session on the day on which such a trade
agreement or extension is submitted, the implementing
bill shall be introduced in that House, as provided in
the preceding sentence, on the first day thereafter on
which the House is in session. Such bills shall be
referred by the Presiding Officers of the respective
Houses to the appropriate committee, or, in the case of
a bill containing provisions within the jurisdiction of
two or more committees, jointly to such committees for
consideration of those provisions within their
respective jurisdictions.

* * * * * * *

CHAPTER 6--CONGRESSIONAL LIAISON AND REPORTS

* * * * * * *

SEC. 162. TRANSMISSION OF AGREEMENTS TO CONGRESS.

(a) As soon as practicable after a trade agreement entered
into under section 123 or 124 [or under section 1102 of the
Omnibus Trade and Competitiveness Act of 1988] or under section
3 of the Bipartisan Trade Promotion Authority Act of 2001 has
entered into force with respect to the United States, the
President shall, if he has not previously done so, transmit a
copy of such trade agreement to each House of the Congress
together with a statement, in the light of the advice of the
International Trade Commission under section 131(b), if any,
and of other relevant considerations, of his reasons for
entering into the agreement.

* * * * * * *

VII. ADDITIONAL AND DISSENTING VIEWS

Dissenting Views on H.R. 3005

Putting forth H.R. 3005, even if one or two Democrats on
the Committee agree with it, is not true bipartisanship. And it
particularly fails the test of broad bipartisanship necessary
during this challenging period for our country.
This is truly a shame because issues of international
relationships and trade have traditionally been very
bipartisan--particularly in the history of this great Ways and
Means Committee. The Democratic members of this Committee have
played key roles in the passage of many recent trade bills--the
African Growth and Opportunity Act, enhanced Caribbean Basin
Initiative, U.S.-Vietnam Bilateral Trade Agreement, U.S.-Jordan
Free Trade Agreement, and the legislation granting Permanent
Normal Trade Relations to China.
The Africa bill or enhanced CBI legislation would not have
occurred without Rep. McDermott and Rep. Jefferson, among
others, working with Rep. Crane and others. We would not have
been able to accomplish granting permanent normal trade
relations to China without the efforts of Rep. Levin working
with Rep. Bereuter. And we would not have had the prior ``Fast
Track'' bills without the support and the work of Rep. Matsui.
Instead of following these successes, the vote today is likely
the most partisan Committee vote on a trade issue in more than
a quarter century.
We understand Congress' constitutional responsibility to
work with the President in setting trade policy while not
micro-managing. But we also understand that, as the world's
most important power, we have a responsibility to workers
around the world, to the environment in which we share, and to
the Constitution. Nations should not be permitted to gain
unfair trade advantages by shirking accepted fundamental
standards or humanity's responsibility to protect our
environment. And Congress cannot forget its constitutional
responsibility to be a full partner with the President in
setting trade policy.
The reality of H.R. 3005 does not measure up to the
rhetoric.
The Thomas bill falls short in a number of key areas,
including:
On labor, the Thomas bill would provide only
that a country enforce its own laws whatever they may
be. There is only rhetoric and no requirement that a
country's law include any of the five core labor
standards--bans on child labor, discrimination, and
slave labor, and the rights to associate and to bargain
collectively.
On the environment, the Thomas bill does not
address key problems in the investment area or direct
that concrete steps be taken to integrate Multilateral
Environmental Agreements (MEAs) with trade agreements.
On the critical issue of trade remedies, the
Thomas bill does not provide that the President must
make progress towards achieving this priority. We
believe that the objective of preventing weakening of
U.S. trade remedies--e.g., to renew lesser duty or
public interest rule--must be scrupulously followed for
any new trade agreement to serve the overall economic
interests of the United States. The Thomas bill's
approach is particularly dissatisfying given recent WTO
panel and Appellate Body decisions imposing new
obligations on the use of the trade remedies.
On Congress' role, the Thomas bill mentions
``consultations'' but this is no magic word. This has
been in past ``Fast Track'' bills and yet, we have yet
to be adequately consulted. Presidents Clinton and Bush
never consulted with us. Presidents Reagan and Carter
did not consult us. The word means nothing without
sufficient incentives to ensure that a President will
actually listen in a meaningful way. The Thomas bill
not only does not build on the mechanisms included in
the last fast track law in 1988, it actually deletes
one of those mechanisms.
In agriculture, H.R. 3019 makes clear that
U.S. negotiating objectives for the FTAA negotiations
and the WTO negotiations will necessarily be quite
different, in view of the fact that certain key U.S.
priorities (for example, relating to export subsidies
and domestic supports) relate to the policies of the
European Union. The EU will not even be at the table in
the FTAA negotiations. Accordingly, for the United
States to negotiate reductions in domestic supports in
the FTAA context, without first securing commitments
from the EU in the WTO context, would be tantamount to
unilateral disarmament.
In many other areas, the H.R. 3005 falls
short in comparison with H.R. 3019.
We had hoped during the past year that there would be an
opportunity to address the substantive issues relating to fast
track/TPA legislation. The Chairman and others in his party
have chosen not to do this.
We offer H.R. 3019, the Comprehensive Trade Negotiating
Authority Act of 2001, as an affirmative model for the way fast
track legislation can be written to achieve all of our
objectives as Americans, Democrats and Republicans together.
This bill addresses the full range of trade issues ranging from
agicultural and services trade, to high technology trade and
electronic commerce, to environment and trade, labor standards
and trade, and trade remedies, to protection of intellectual
property rights, opening up the world trading system to public
view and input from NGOs, businesses and unions, and addressing
corruption. The bill also addresses the essential issue of the
constitutional role of Congress. The following section-by-
section summary of H.R. 3019 provides a synopsis of the ways in
which H.R. 3019 addresses these and other key issues.

Section-by-Section Summary of H.R. 3019

Overview

The bill advances the interests of all Americans by
enabling the United States to take full advantage of new
trading opportunities for American workers, farmers and
businesses, and by shaping trade to maximize its benefits and
minimize its costs. The proposal accomplishes these goals by:
(1) setting out clear directions through specific negotiating
objectives for the United States in a wide range of areas and
(2) updating and strengthening Congress' role in overseeing the
trade negotiation process.

Section 1--Short Title

Section 2--Negotiating Objectives

Section 2(a)--Overall Trade Negotiating Objectives
Section 2(a) sets forth ``overall trade negotiating
objectives'' that U.S. negotiators are to use to guide them in
negotiations. These ``overall trade negotiating objectives''
are broad-based statements of congressional policy in 16 key
areas. Unlike the ``Principal Negotiating Objectives'' in
section 2(b), ``Overall Trade Negotiating Objectives'' are not
intended to lead to negotiation of specific agreements.
Section 2(b)--Principal Negotiating Objectives Under WTO
Section 2(b) contains Congress' principal negotiating
objectives for the negotiations to be conducted under the
auspices of the World Trade Organization (WTO) and WTO
Agreements. These objectives are designed to provide specific
direction to U.S. negotiators.
The different levels of economic integration created, and
the different number and diversity of countries involved, in
various types of negotiations, create different contexts,
interests and possibilities for each set of negotiations.
Accordingly, the bill sets forth separately Congress'
negotiating objectives for the WTO (section 2(b)), for the Free
Trade Area of the Americas (section 2(c)), and for other
regional and bilateral trade negotiations (section 2(d)).
Section 2(b) sets forth U.S. principal negotiating
objectives for WTO negotiations.
Section 2(b)(1)--Trade in Agriculture--WTO
Section 2(b)(1) directs U.S. negotiators to obtain
competitive opportunities for U.S. exports equivalent to those
the United States affords foreign agricultural imports and to
achieve more open trade in agricultural commodities. Specific
congressional objectives in this area include:
Reduce the agricultural tariffs actually
applied, as well as the maximum allowable tariffs,
placing priority on products that are subject to
significantly higher tariffs in major producing
countries and providing longer phase-in periods for
tariff reductions on U.S. agricultural products that
are particularly sensitive to imports;
Enhance the transparency of a country's
implementation of its tariff regimes and tighten the
rules that regulate how a country can administer tariff
rate quotas;
Eliminate agricultural export subsidies;
Eliminate or reduce trade-distorting
domestic subsidies;
Require countries with higher subsidy levels
than the U.S. to match U.S. levels before agreeing to
reduce or eliminate U.S. subsidies;
Ensure that trade rules do not undermine
bona fide U.S. agricultural programs like market
development programs, food aid programs, and programs
that support family farms and rural communities;
Eliminate state trading enterprises, which
have been used to distort trade in agriculture or, at
minimum, adopt vigorous oversight mechanisms to ensure
that they operate transparently;
Eliminate practices that discriminate
against perishable or seasonal agricultural products
and develop a more effective import safeguard mechanism
for these types of products;
Consider whether negotiating partners have
adhered to their current trade obligations, how
previous trade agreements have affected the U.S.
agricultural sector, and the extent to which countries
have meaningfully opened up their agriculture markets
in formulating U.S. positions; and
Treat the negotiation of all WTO issues as a
single undertaking to ensure that other countries do
not have opportunities to delay progress on agriculture
negotiations in the hopes of concluding agreement on
other, possibly less difficult, issues.
Section 2(b)(2)--Trade in Services--WTO
Section 2(b)(2) directs U.S. WTO negotiators to further
liberalize international trade in services, e.g., financial
services, consulting, media products, and telecommunications.
The specific instructions focus on deepening and broadening the
commitments in the WTO's General Agreement on Trade in Services
(GATS). In the GATS, WTO members made specific commitments to
allow freer trade in service industries. The specific
objectives advanced by Congress include:
Extend the GATS commitments to achieve the
maximum liberalization in trade in services,
particularly to allow businesses to deliver services
through all modes of supply;
Remove barriers that deny national treatment
(i.e., discriminate against foreign service providers)
or unreasonably restrict the establishment or operation
of foreign service suppliers;
Reduce or eliminate the adverse effects of
existing government measures on trade in services;
Eliminate additional barriers to trade in
services, including unreasonable or discriminatory
licensing requirements, administration of cartels or
toleration of anticompetitive activity and other
methods of hindering trade in services;
Grandfather existing concessions and
liberalization commitments as new commitments are made
and ensure that concessions that pre-dated the GATS
commitments remain in effect;
Strengthen the GATS obligations to ensure
that countries regulate services and service suppliers
in a transparent manner and in accordance with
principles of due process.
Oppose cultural exceptions to GATS
obligations (e.g., a requirement that television
stations reserve a certain minimum percentage of their
programming time for locally-produced items);
Prevent discrimination against like services
delivered via electronic means (e.g., application
services provided through in person servicing or
remotely via the Internet);
Pursue full market access and national
treatment commitments for service sectors essential to
electronic commerce; and
Broaden and deepen the commitments countries
have made relating to basic and value-added
telecommunications services and financial services; for
telecommunications, include strengthening obligations
to ensure competitive and non-discriminatory access to
public telecommunication networks and ISP and other
value-added service providers and preventing anti-
competitive behavior by major suppliers.
Action 2(b)(3)--Trade in Manufactured and Nonagricultural
Goods--WTO
Section 2(b)(3) contains principal negotiating objectives
for U.S. negotiators with respect to trade in manufactured and
non-agricultural goods (essentially all non-agricultural
goods). The specific objectives advanced by Congress are:
Reduce bound tariff levels (maximum
allowable tariffs) to eliminate disparities between the
tariffs actually applied and the bound tariffs;
In sectors where tariffs are approaching
zero, negotiate agreements to eliminate duties;
Eliminate tariff and non-tariff barriers in
sectors where U.S. imposes no significant barriers to
imports and foreign barriers are substantial;
Eliminate or reduce tariffs on value-added
products receiving unequal protection compared to the
raw materials used to make those products (tariff
inversions); and
Eliminate other non-tariff barriers,
including restrictions on access to distribution
networks and information systems; unfair inspection
processes; cartels or anti-competitive activity;
unreasonable delegation of regulatory powers to private
entities; unfair licensing requirements; and other
unfair government acts that restrict market access.
Section 2(b)(4)--Trade in Civil Aircraft--WTO
Section 2(b)(4) contains principal negotiating objectives
for trade in civil aircraft, specifically, those already
approved by Congress in section 135(c) of the Uruguay Round
Agreements Act (19 U.S.C. 3555(c)).
Section 2(b)(5)--Rules of Origin--WTO
Section 2(b)(5) contains principal negotiating objectives
for rules of origin--the rules used to determine the origin of
a good. These rules are relevant for country of origin labeling
requirements, for certain preferential tariff arrangements, and
for other reasons. U.S. negotiators are directed to complete an
international agreement to harmonize rules of origin for
nonpreferential trade programs as envisioned by article 9 of
the WTO's Agreement on Rules of Origin.
Section 2(b)(6)--Dispute Settlement--WTO
Section 2(b)(6) contains principal negotiating objectives
for U.S. negotiators to pursue with respect to the settlement
of trade disputes. Dispute settlement under the WTO rules has
increased dramatically compared to dispute settlement under the
previous GATT-based trade rules. It has become increasingly
important to ensure that these rules operate effectively and
transparently. The specific objectives advanced by Congress
are:
Improve enforcement of decisions for more
prompt compliance;
Strengthen rules related to evidence
requests in proceedings;
Pursue rules for the management of
translation-related issues;
Require that all government submissions be
made public upon submission, with exceptions for
business confidential and national security classified
information;
Require that meetings of dispute settlement
bodies and transcripts of such meetings be open to the
public, with procedures to accommodate business
confidential and national security classified
information;
Establish rules to provide for submission of
friend-of-the-court briefs, e.g., by nongovernmental
organizations, businesses, and unions;
Strengthen rules to prevent conflicts of
interest by panelists;
Establish formal procedures for panels to
seek advice from other international organizations,
e.g., the International Labor Organization; and
Ensure application of the standard of review
in the WTO Antidumping Agreement and clarify that this
standard of review should apply to cases under the WTO
Subsidies/CVD and Safeguards Agreements for reasons of
logic and consistency with basic principles of
administrative law and jurisprudence.
Section 2(b)(7)--Sanitary and Phytosanitary Measures--WTO
Section 2(b)(7) contains principal negotiating objectives
for U.S. negotiators with respect to sanitary and phytosanitary
(SPS) measures, e.g., food health and safety standards. The
specific objectives advanced by Congress are:
Oppose reopening of the WTO's SPS Agreement.
Reaffirm that the decision of a country not
to adopt an international standard for the basis of an
SPS measure does not in itself create a presumption of
inconsistency with the SPS Agreement.
Reaffirm that Members may take sanitary or
phytosanitary measures where the relevant scientific
evidence is insufficient, or conflicting, provided that
the measure is taken in a manner consistent with the
SPS Agreement.
Section 2(b)(8)--Technical Barriers to Trade--WTO
Section 2(b)(8) contains the principal negotiating
objectives for U.S. negotiators with respect to technical
barriers to trade, e.g., unreasonable product standards. The
specific objectives advanced by Congress are:
Oppose reopening of the WTO TBT Agreement;
Increase transparency in the preparation,
adoption and application of labeling regulations and
standards, recognizing the legitimate role of labeling
that provides relevant information to consumers.
Section 2(b)(9)--Trade-Related Aspects of Intellectual
Property Rights (IPR)--WTO
Section 2(b)(7) contains the principal negotiating
objectives for U.S. negotiators regarding intellectual property
rights. The WTO's Agreement on Trade-Related Intellectual
Property Rights (TRIPs) created important new obligations on
countries to respect and enforce intellectual property rights
in their domestic law. The bill calls on U.S. negotiators to
build upon TRIPs and address other issues that have emerged.
The specific objectives advanced by Congress are:
Oppose extension of the date by which
countries must implement their TRIPs obligations;
Oppose extension of the moratorium on ``non-
violation'' complaints under TRIPs;
Oppose any weakening of existing TRIPs
obligations;
Ensure that standards of protection and
enforcement keep pace with technological developments,
particularly on the Internet;
Prevent misuse by industrialized countries
of reference pricing classification systems as way to
discriminate against innovative U.S. pharmaceutical
products to the detriment of U.S. consumers;
Clarify that under Article 31 of the TRIPs
Agreement, WTO Members are able to adopt measures
necessary to protect the public health and to respond
to situations of national emergency or extreme urgency,
including by taking actions that have the effect of
increasing access to essential medicines;
Encourage Members that take action under
Article 31 to also implement policies that respond to
all aspects of the public health problem or national
emergency; and
Encourage members of the Organization for
Economic Cooperation and Development and the private
sectors in such countries to work with other relevant
international organizations to assist developing
countries in all possible ways to increase access to
essential medicines.
Section 2(b)(10)--Transparency--WTO
Section 2(b)(10) contains principal negotiating objectives
for U.S. negotiators with respect to transparency. There are
two components to transparency. First, there is transparency in
domestic government regulation--a concept embodied in U.S. law
through the Administrative Procedures Act and requirements of
due process. Transparency in government regulation is an area
increasingly vital to U.S. workers, farmers and businesses
seeking to export agricultural and manufactured products and
services, particularly in service sectors like
telecommunications and financial services. Second, there is
transparency in the operation of the WTO. The bill addresses
both of these components. The specific objectives advanced by
Congress are:
To conclude an Agreement on Transparency
that would:
--Require that government laws, regulations and
judicial decisions be made publicly available;
--Require adequate notice before amending existing
rules or declaring new ones;
--Encourage governments to open rulemaking to public
comment;
--Require that administrative proceedings in Member
countries relating to any agreement be conducted so as
to give persons from Member countries affected by such
proceedings notice and opportunity to present their
positions; and
--Require Members to establish judicial or
administrative tribunals or procedures to review and
correct final administrative actions on matters covered
by any agreement, allowing parties to the proceeding an
opportunity to present their positions.
Improve public's understanding of and access
to WTO system by:
--Maintaining and expanding official websites, and
making meeting minutes and other documents publicly
available; and
--Instituting regular meetings between WTO officials
and representatives of non-governmental organizations,
businesses, labor unions, consumer groups and other
representatives of civil society.
Section 2(b)(11)--Government Procurement--WTO
Section 2(b)(11) contains principal negotiating objectives
for U.S. negotiators with respect to rules for government
procurement. The WTO includes an Agreement on Government
Procurement, but this is one of the ``plurilateral''
agreements, meaning that not all WTO Members are bound by the
Agreement. The bill calls for U.S. negotiators to build upon
the existing agreement. The specific objectives advanced by
Congress are:
Expand membership of agreement;
Conclude WTO agreement on transparency in
government procurement; and
Promote global use of electronic publication
of government procurement information to make it easier
for U.S. firms to find out about bidding opportunities
abroad.
Section 2(b)(12)--Trade Remedy Laws--WTO
Section 2(b)(12) contains principal negotiating objectives
for U.S. negotiators with respect to the trade remedy laws--
antidumping, anti-subsidies/countervailing duty, and import
surge safeguards remedies. These trade remedy laws and the
related WTO agreements, establish fundamental rules for the
trading system and help ensure continued support for trade
liberalization. Increasingly, however, these trade remedies
have come under attack in the WTO and through trade
negotiations. The bill would make clear to our negotiating
partners that Congress will not accept agreements that weaken
trade remedies. The specific objectives advanced by Congress
are:
Preserve ability of U.S. to enforce trade
laws strongly and do not enter into agreements that
weaken the effectiveness of domestic and international
rules on unfair trade or import surges; and
Eliminate the underlying causes of unfair
trade practices and import surges, including closed
markets, subsidization and anti-competitive practices
that create and sustain excess capacity.
Section 2(b)(13)--Trade and Labor Market Standards--WTO
Section 2(b)(13) contains principal negotiating objectives
for U.S. negotiators with respect to the critical area of trade
and labor market standards. The bill sets forth an objective to
achieve a framework of enforceable multilateral rules as soon
as practicable that leads to the adoption and enforcement of
the core, internationally-recognized labor standards in the
WTO. The specific objectives advanced by Congress towards that
objective are:
Establish promptly within the WTO a working
group on trade and labor issues to explore the linkage
between international trade and investment and
internationally recognized workers rights (as required
by section 131 of the Uruguay Round Agreements Act) and
develop methods to coordinate work program with ILO;
Update the exceptions to trade (article XX
of the GATT 1994) and services (article XIV of GATS)
rules so that countries could not be penalized under
WTO rules for taking actions to carry out ILO
recommendations against countries that have
persistently violated labor rights, e.g., the ILO
recommendation with respect to Burma;
Include review of labor standards as part of
the WTO's Trade Policy Review Mechanism (TPRM). (The
TPRM is the WTO's mechanism for providing regular
reviews of each country's compliance with its WTO
obligations); and
Establish a working relationship between the
WTO and ILO.
Section 2(b)(14)--Trade and the Environment--WTO
Section 2(b)(14) contains principal negotiating objectives
for U.S. negotiators with respect to the critical area of trade
and the environment. The specific objectives advanced by
Congress are:
Strengthen role of the WTO's Committee on
Trade and Environment (CTE), providing the CTE with
authority to review and comment on negotiations and
review potential effects of liberalization of natural
resource products;
Clarify the environmental exceptions already
in the WTO--GATT article XX(b), which allows countries
to take measures necessary to protect human, animal and
plant life or health, and GATT article XX(g), which
allows countries to take measures to conserve
exhaustible natural resources;
Add an exception to the GATT and the GATS so
that, where both parties to a dispute have accepted the
obligations of a multilateral environmental agreement
(MEA), a country could not be penalized under trade
rules for taking action in accordance with the MEA;
Add to the GATS the GATT article XX(g)
exception, which allows countries to take measures to
conserve exhaustible natural resources, to the GATS.
The GATS already includes an exception equivalent to
GATT article XX(b);
Give priority to trade liberalization
measures promoting sustainable development;
Reduce subsidies in natural resource sectors
and export subsidies in agriculture; and
Improve coordination between WTO and
international environmental organizations in formation
of multilaterally accepted principles for sustainable
development.
Section 2(b)(15)--Institution Building--WTO
Section 2(b)(15) contains principal negotiating objectives
for U.S. negotiators with respect to institution building. The
specific objectives advanced by Congress are:
Strengthen institutional mechanisms
facilitating dialogue and activities between WTO and
non-governmental organizations;
Increase transparency by improving internal
communication between the Secretariat and the Members;
Improve coordination between WTO and other
international organizations, including the ILO and the
United Nations Environment Programme, to increase
effectiveness of technical assistance programs;
Improve capability of WTO to provide
technical assistance to developing countries, to
promote the rule of law, and to assist developing
countries with efforts to meet their WTO obligations.
Section 2(b)(16)--Trade and Investment--WTO
Section 2(b)(16) contains principal negotiating objectives
for U.S. negotiators with respect to trade and investment. The
WTO currently includes the Agreement on Trade-Related
Investment Measures (TRIMs), which does not contain investor-
state dispute settlement. The specific objectives advanced by
Congress are:
Pursue further reduction of trade-distorting
investment measures, including restrictions on the free
transfer of funds related to investment, discriminatory
measures, forcedtechnology transfers, performance
requirements, forced licensing requirements, and other unreasonable
barriers to investment; and
Strengthen enforcement of and compliance
with TRIMs.
Section 2(b)(17)--Electronic Commerce--WTO
Section 2(b)(17) contains principal negotiating objectives
for U.S. negotiators with respect to electronic commerce. Rapid
changes in technology and business models on the Internet have
stretched existing rules and created new challenges. The
continued growth of e-commerce requires countries to provide a
favorable regulatory and trading environment. The specific
objectives advanced by Congress are:
Make permanent and binding the moratorium on
customs duties on electronic transmissions;
Ensure that current obligations, rules,
disciplines, and commitments under the WTO apply to
electronically-delivered goods and services;
Ensure that the classification of
electronically-delivered goods and services provides
the most liberal trade treatment possible;
Ensure that electronically-delivered goods
and services receive no less favorable treatment under
trade rules than like products delivered in physical
form;
Ensure that governments refrain from
implementing trade-related measures that impede
electronic commerce;
Obtain commitments that any domestic
regulations affecting electronic commerce are non-
discriminatory, transparent, and consistent with
promoting an open electronic market;
Pursue a pro-competitive regulatory
environment for basic and value-added
telecommunications services abroad since these services
are vital to electronic commerce; and
Educate WTO Members about benefits of
electronic commerce and work to liberalize trade
barriers that directly impede electronic commerce.
Section 2(b)(18)--Developing Countries--WTO
Section 2(b)(18) contains principal negotiating objectives
for U.S. negotiators with respect to developing countries. The
bill recognizes that developing countries may have special
needs. The specific objectives advanced by Congress are:
Enter trade agreements that mutually promote
economic growth of developing countries and U.S.;
Ensure appropriate phase-in periods with
respect to obligations of least-developed countries;
Coordinate with the World Bank, IMF, and
other international institutions to provide debt relief
and other assistance to promote the rule of law and
sound and sustainable development; and
Accelerate tariff reductions that benefit
least-developed countries.
Section 2(b)(19)--Current Account Surpluses--WTO
Section 2(b)(19) contains principal negotiating objectives
for U.S. negotiators with respect to current account surpluses.
This objective seeks to address countries that maintain large,
persistent trade balance surpluses because their markets are
relatively closed to imports. The specific objectives advanced
by Congress are:
Develop rules to address large and
persistent global account imbalances of countries to
impose responsibility on them to undertake policy
changes to restore equilibrium.
Section 2(b)(20)--Trade and Monetary Coordination--WTO
Section 2(b)(20) contains principal negotiating objectives
for U.S. negotiators with respect to trade and monetary
coordination. The specific objectives advanced by Congress are:
Foster stability in international currency
markets and develop mechanisms to protect against trade
consequences of unanticipated currency movements.
Section 2(b)(21)--Access to High Technology--WTO
Section 2(b)(21) contains principal negotiating objectives
for U.S. negotiators with respect to access to high technology.
As a leader in information technology (IT), the United States
should push hard for liberalization in this sector. The
specific objectives advanced by Congress are:
Obtain elimination or reduction of foreign
barriers to access by US persons to foreign-developed
technology;
Seek elimination of tariffs on all IT
products, infrastructure equipment, scientific
instruments and medical equipment;
Pursue reduction of foreign barriers to US
high-tech products;
Enforce and promote the TBT Agreement to
ensure that technical standards and regulations do not
serve as barriers to trade in IT and communications
products; and
Require all WTO Members to sign the
Information Technology Agreement (ITA), which
eliminates tariffs on a wide variety of information
technology products. Expand and update the products
covered by the ITA.
Section 2(b)(22)--Corruption--WTO
Section 2(b)(22) contains principal negotiating objectives
for U.S. negotiators with respect to corruption. Corruption
distorts markets and creates inefficiencies. U.S. businesses
often lose out when corruption interferes with commercial
transactions abroad. Accordingly, trade rules should address
the impact that corruption may have on trade. The specific
objectives advanced by Congress are:
Establish standards at least as restrictive
as those in the Foreign Corrupt Practices Act of 1977
and establish mechanisms to ensure enforcement of such
standards.
Section 2(b)(23)--Implementation of Existing Commitments
and Improvement of the WTO and WTO agreements--WTO
Section 2(b)(23) contains principal negotiating objectives
for U.S. WTO negotiators with respect to implementation of the
existing WTO commitments and improvement of the WTO system. The
specific objectives advanced by Congress are:
Ensure compliance of Members with existing
obligations and under existing timetables;
Strengthen the capacity of the WTO's Trade
Policy Review Mechanism (a WTO device that provides
regular reviews of each country's compliance with its
WTO obligations) to review Member implementation;
Pursue diplomatic and dispute settlement
efforts that promote compliance; and
Extend coverage of WTO Agreements to
products, sectors, and conditions of trade not
adequately covered.
Section 2(c)--Principal Negotiating Objectives Under FTAA
Section 2(c) contains the principal negotiating objectives
for the Free Trade Area of the Americas (FTAA) negotiations.
The FTAA is likely to accelerate substantially the economic
integration of the economies of the Western hemisphere. As is
typically the case in negotiations designed to lead to a free
trade agreement, the United States has been pushing for deep
market-opening and other commitments from the other FTAA
countries. U.S. objectives need to account for the dynamics of
these free trade negotiations, as well as for the fact that
many FTAA countries have different economic structures,
including labor market and environmental standards, than the
United States, and these differences may have effects on trade
and investment flows. In addition, negotiating goals need to
recognize that FTAA negotiations do not include certain
countries whose policies or practices are key to U.S. goals in
the WTO: e.g., members of the European Union and export
subsidies issues. Accordingly, U.S. objectives with respect to
a number of important issues vary significantly.
Section 2(c)(1)--Trade in Agriculture--FTAA
Section 2(c)(1) contains principal negotiating objectives
for U.S. negotiators with respect to trade in agriculture.
Congress would direct the negotiators to obtain competitive
opportunities for U.S. exports in FTAA countries equivalent to
those the United States affords FTAA agricultural imports and
to achieve more open trade in agricultural commodities. The
specific objectives advanced by Congress are the same as for
the WTO with noted exceptions:
Excludes language: (1) to eliminate export
subsidies, (2) reduce or eliminate domestic supports,
(3) the preservation of market development or food aid
programs, which are not at issue in the FTAA, (4)
ensure agriculture commitments for countries acceding
to the WTO, or (5) objective to treat all negotiations
as single undertaking. Non-inclusive of objectives with
respect to elimination or reduction of agricultural
subsides recognizes that pursuing this objective in the
FTAA (which does not include the heavily subsidizing
European Union), without ensuring at a minimum that a
satisfactory agreement is first undertaken in the WTO,
is tantamount to unilateral disarmament by the United
States.
Also includes, establish mechanisms to
prevent the export of products from subsidized, non-
FTAA countries (e.g., the EU) to FTAA countries. This
objective complements the omission of an objective
related to elimination of export subsides, noted above.
Also includes, eliminate technology-based
discrimination against products and ensure that
negotiated rules do not weaken rights and obligations
under the WTO's Agreement on the Application of
Sanitary and Phytosanitary Measures. This addition is
needed to provide clear guidance with respect to the
establishment of SPS standards in the FTAA.
Section 2(c)(2)--Trade in Services--FTAA
Section 2(c)(2) contains principal negotiating objectives
for trade in services. Unlike the WTO, there is no existing
services agreement in the FTAA. Therefore, U.S. negotiators
will be able to ensure that maximum liberalization is
incorporated into FTAA services trade from the inception of the
agreement. The specific objectives advanced by Congress are the
same as for the WTO with noted exceptions:
Excludes language pertaining to the
extension of GATS commitments;
Excludes language relating to the adverse
effects of existing government measures, because that
language is addressed to deficiencies in the GATS;
Modifies objectives referring to GATS to
make them applicable to FTAA negotiations;
Also includes, utilize ``negative list''
approach, whereby commitments will cover all services
and modes of supply unless expressly excluded--to
ensure maximum liberalization;
Also includes, additional language in
principal negotiating statement specifying ``in
services in all modes of supply and across the broadest
range of service sectors.''
Section 2(c)(3)--Trade in Manufactured and Non-agricultural
Goods--FTAA
Section 2(c)(3) contains principal negotiating objectives
for trade in manufactured and non-agricultural goods. U.S.
objectives for trade in manufactured and agricultural goods are
identical in the WTO and the FTAA. Accordingly, the objectives
here are the same as for the WTO.
Section 2(c)(4)--Dispute Settlement--FTAA
Section 2(c)(4) contains principal negotiating objectives
for dispute settlement. Unlike the WTO, the FTAA does not have
an existing dispute settlement mechanism, so the negotiating
objectives in this area seek to ensure that the dispute
settlement mechanism that is created for the FTAA will address
problems that have arisen in WTO dispute settlement and will be
expeditiousand effective. The specific objectives advanced by
Congress are the same as for the WTO with noted exceptions:
Excludes objective related to Article 17.6
of Antidumping Agreement--there should be no separate
antidumping agreement in the FTAA, so there is no need
to address this issue;
Modifies objectives relating to WTO dispute
settlement system to make them applicable to the FTAA;
Also includes, provide for a single,
effective and expeditious mechanism for dispute
settlement and a single set of procedures applicable to
all FTAA agreements--to ensure that all FTAA
obligations, including those on labor and environment,
may be enforced in the same way;
Also includes, ensure that dispute
settlement system provides in all contexts, for the use
of all remedies that are demonstrably effective to
promote compliance--to ensure that all remedies are
available to enforce all FTAA obligations, including
those on labor and environment, and to ensure that the
remedies provided have demonstrated effectiveness.
Section 2(c)(5)--Trade-related Aspects of Intellectual
Property Rights (IPR)--FTAA
Section 2(c)(5) contains principal negotiating objectives
for trade-related aspects of intellectual property rights
(IPR). Unlike the WTO, the FTAA does not have an existing
agreement on intellectual property. The specific objectives
advanced by Congress are the same as for the WTO with noted
exceptions:
Excludes certain objectives specific to the
implementation and operation of the WTO TRIPs
Agreement;
Modifies other objectives relating to WTO
TRIPs Agreement to make them applicable to the FTAA;
Also includes, ensure that rules provide
standard of protection for IPR similar to that found in
U.S. law--which would be greater than the protections
offered by the WTO TRIPs Agreement;
Also includes, provide strong IPR protection
for new and emerging technologies and new methods of
transmitting and distributing products embodying
intellectual property;
Also includes, prevent discrimination with
respect to availability, acquisition, scope,
maintenance, use, and enforcement of IPR.
Also includes, provide strong enforcement of
IPR;
Also includes, secure fair, equitable and
non-discriminatory market access opportunities for
United States persons that rely upon intellectual
property protection.
Section 2(c)(6)--Transparency--FTAA
Section 2(c)(6) contains principal negotiating objectives
for transparency. U.S. objectives for transparency are
essentially identical in the WTO and the FTAA. Accordingly, the
objectives here are essentially the same as for the WTO, with a
few modifications accounting for the fact that the
administrative structure of the FTAA has yet to be established.
Section 2(c)(7)--Government Procurement--FTAA
Section 2(c)(7) contains principal negotiating objectives
for government procurement. U.S. objectives for government
procurement are identical in the WTO and the FTAA. Accordingly,
the objectives here are the same as for the WTO.
Section 2(c)(8)--Trade Remedy Laws--FTAA
Section 2(c)(8) contains principal negotiating objectives
for trade remedy laws. U.S. objectives for trade remedy laws
are identical in the WTO and the FTAA--in both forums, the
United States should not enter into agreements that lessen in
any respect the effectiveness of the trade laws and should seek
to eliminate the causes of unfair trade and import surges.
Accordingly, the objectives here are the same as for the WTO.
Section 2(c)(9)--Trade and Labor Market Standards--FTAA
Section 2(c)(9) contains principal negotiating objectives
for trade and labor market standards. Many of the FTAA
countries have very different economic structures, including
labor market standards, than the United States. These
differences may have affects on trade and investment flows
among the FTAA countries, especially since the FTAA is likely
to accelerate economic integration among the economies of the
Western hemisphere. Accordingly, the objectives differ
considerably from those in the WTO:
Include enforceable rules that provide for
the adoption and enforcement of the International Labor
Organization's (ILO) five core labor standards (rights
to associate and to bargain collectively, bans on
discrimination, child labor, forced labor).
Establish as the trigger for enforcement of
the above obligation
(i) a country's failure to effectively enforce its
domestic labor standards in a manner affecting trade or
investment; or
(ii) a country's waiver or derogation from its
domestic labor standards for the purpose of attracting
investment, inhibiting exports, or otherwise gaining a
competitive advantage;
recognizing that FTAA members retain discretion with
respect to investigatory, prosecutorial, regulatory,
and compliance matters and to adopt or modify their
laws consistent with the ILO's core labor standards;
Provide for phased-in compliance as
appropriate for least-developed countries;
Create an FTAA work program to provide
technical assistance and positive incentives to FTAA
members to aid them in improving their labor laws;
Provide for regular review of each country's
adherence to its labor laws;
Ensure that the FTAA includes exceptions to
allow countries to prohibit products produced by prison
labor and child labor and to ensure that countries
would not bepenalized for taking actions to carry out
ILO recommendations, e.g., the ILO recommendation with respect to
Burma.
Section 2(c)(10)--Trade and the Environment--FTAA
Section 2(c)(10) contains principal negotiating objectives
for trade and the environment. Many of the FTAA countries have
different economic structures, including environmental
standards, than the United States. These differences may have
effects on trade and investment flows between the FTAA
countries, especially since the FTAA is likely to accelerate
economic integration among the economies of the Western
hemisphere. Accordingly, the objectives differ considerably
from those in the WTO:
Obtain rules that provide for each country
to enforce its domestic environmental laws relating to:
(i) the prevention, abatement, or control of the
release, discharge, or emission of pollutants or
environmental contaminants;
(ii) the control of environmentally hazardous or
toxic chemicals, substances, materials and wastes, and
the dissemination of information related thereto; and
(iii) the protection of wild flora or fauna,
including endangered species, their habitats, and
specially protected natural areas, in the territory of
FTAA member countries;
Establish as the trigger for enforcement of
the above obligation
(i) a country's failure to effectively enforce its
domestic environmental laws in a manner affecting trade
or investment; or
(ii) a country's waiver or derogation from its
domestic environmental laws for the purpose of
attracting investment, inhibiting exports, or otherwise
gaining a competitive advantage;
recognizing that FTAA members retain discretion with
respect to investigatory, prosecutorial, regulatory,
and compliance matters and to adopt or modify their
environmental laws;
Provide for phased-in compliance as
appropriate for least-developed countries;
Create an FTAA work program to provide
technical assistance and positive incentives to FTAA
members to aid them in improving their environmental
laws;
Provide for regular review of each country's
adherence to its environmental laws;
Ensure that the FTAA includes exceptions to
allow countries to take measures to provide effective
protection for human, animal, or plant life or health;
to take measures to conserve exhaustible natural
resources; and to take measures in accordance with
obligations under multilateral environmental agreements
accepted by both parties to a dispute;
Give priority to trade liberalization
measures that promote sustainable development.
Section 2(c)(11)--Institution Building--FTAA
Section 2(c)(11) contains principal negotiating objectives
for institution building. The objectives here are similar to
those for the WTO. The minor differences in objectives are due
to the fact that WTO already has an institutional structure,
while the FTAA does not.
Section 2(c)(12)--Trade and Investment--FTAA
Section 2(c)(12) contains principal negotiating objectives
for trade and investment. Unlike the WTO, the FTAA does not
have an existing agreement on investment. Drafts of the FTAA
text indicate that the United States is pursuing an investment
agreement modeled on Chapter 11 of the North American Free
Trade Agreement (NAFTA), which includes a right for investors
to bring claims directly against a state and is otherwise a
substantially different agreement from the limited WTO TRIMs
Agreement. The objectives recognize the value of effective
investor protections, while also recognizing a concern that has
arisen under NAFTA Chapter 11 that investor protections written
too broadly could afford greater rights to foreign investors
than those afforded under U.S. domestic law, and could
jeopardize valid environmental and other regulations.
Accordingly, the objectives differ considerably from those in
the WTO:
Reduce or eliminate barriers to investment
by securing for investors the rights that would be
available under U.S. domestic law, but no greater
rights--this provision ensures effective investment
protections while also ensuring that foreign investors
will receive no greater rights in the U.S. than U.S.
investors;
Ensure national and most-favored nation
(i.e., non-discriminatory) treatment for U.S. investors
and investments;
Free the transfer of funds relating to
investments;
Reduce or eliminate performance
requirements, forced technology transfers, and other
unreasonable barriers to investment;
Establish standards for expropriation
consistent with U.S. law, including by specifically
incorporating the U.S. legal principle that a ``mere
diminution in value'' does not constitute an
expropriation;
Codify the recent clarifications made by the
NAFTA governments to the ``minimum standard of
treatment'' investment rules, which were made to
correct erroneous decisions by NAFTA arbitration
panels;
Ensure through rules in the text of the
agreement that the investor protections do not
interfere with legitimate domestic regulations (e.g.,
domestic health, safety, and environmental
regulations), including by specifically clarifying that
the agreement standards do not require use of the
``least trade restrictive'' alternative--the specific
clarification corrects an erroneous decision by a NAFTA
arbitration panel;
Provide an exception from investment rules
for actions taken in accordance with obligations under
a multilateral environmental agreement;
Provide meaningful procedures for resolving
investment disputes;
Provide an independent, non-political
approval process before an investor may bring a claim
directly against a state in order to screen out
frivolous complaints;
Provide a standing appellate mechanism to
correct erroneous interpretations of law;
Ensure the fullest transparency in
investment dispute settlement mechanisms.
Section 2(c)(13)--Electronic Commerce--FTAA
Section 2(c)(13) contains principal negotiating objectives
for electronic commerce. U.S. objectives for electronic
commerce are essentially identical in the WTO and the FTAA. The
minor differences in objectives are due to the fact that the
WTO already has agreements and obligations applicable to e-
commerce, while the FTAA does not.
Section 2(c)(14)--Developing Countries--FTAA
Section 2(c)(14) contains principal negotiating objectives
for developing countries. U.S. objectives for developing
countries are identical in the WTO and the FTAA. Accordingly,
the objectives here are the same as for the WTO.
Section 2(c)(15)--Trade and Monetary Coordination--FTAA
Section 2(c)(15) contains principal negotiating objectives
for trade and monetary coordination. U.S. objectives for trade
and monetary coordination are identical in the WTO and the
FTAA. Accordingly, the objectives here are the same as for the
WTO.
Section 2(c)(16)--Access to High Technology--FTAA
Section 2(c)(16) contains principal negotiating objectives
for access to high technology. U.S. objectives for access to
high technology are identical in the WTO and the FTAA.
Accordingly, the objectives here are the same as for the WTO.
Section 2(c)(17)--Corruption--FTAA
Section 2(c)(17) contains principal negotiating objectives
for corruption. U.S. objectives for corruption are identical in
the WTO and the FTAA. Accordingly, the objectives here are the
same as for the WTO.

Section 3--Congressional Trade Advisors

The Act enlarges the membership and strengthens the role of
the statutorily-created congressional trade advisors. Under
existing law (section 161 of the Trade Act of 1974), the
Speaker of the House and the President Pro Tem of the Senate
appoint five Members from the Committees on Ways and Means and
Finance, respectively, to serve as congressional advisors on
trade policy and trade negotiations. These five Ways and Means
and five Finance Members are mandatory appointments, and must
be made at the start of each Congress. In addition, the statute
allows the Speaker and President Pro Tem to select additional
members for designation as congressional advisors on specific
issues. The additional appointments are discretionary.
Section 3 of the Act expands the mandatory appointments to
the congressional trade advisors to include two Members each
from the House Agriculture Committee and Senate Agriculture,
Nutrition and Forestry Committees, and two additional Members
from each House. The Act preserves the Speaker's ability under
current law to appoint additional advisors (hereafter
``discretionary advisors''). The Act retains the party ratio
set forth in existing law (the party in control of a chamber
has one more appointment than the minority party).
The Act also strengthens the role of the congressional
trade advisors in a number of ways. First, the Act requires the
President to consult with them at specified points in a
negotiation, such as in formulating negotiating objectives for
new negotiations (section 5), during the course of negotiations
(section 6), and prior to entering into an agreement (section
7). Second, under section 7 of the Act, a majority of the
mandatory must concur with the President's certification that
the agreement substantially achieves the principal negotiating
objectives identified in the Act or developed in consultation
with Congress for the related implementing bill to be covered
by fast track procedures. Third, section 5 of the Act requires
the congressional trade advisors to submit a report providing
their views regarding extension of fast track authority if the
President requests extension beyond the initial five-year
period. Finally, section 3 of the Act allows the statutory
trade advisors to serve as official advisors to U.S.
delegations in dispute settlement proceedings.

Section 4--Trade Agreements Authority

Section 4 provides the President with two types of
authority: (1) the authority to proclaim certain duty
modifications without Congressional approval; and (2) the
authority to enter into trade agreements with foreign countries
to eliminate trade barriers, and to secure fast track coverage
for implementing bills related to agreements covering the
elimination of such barriers.
With respect to duty modifications, section 4(a) provides
the President with the authority to proclaim certain duty
modifications required by a trade agreement without additional
legislation. This authority, which tracks the 1988 fast track
grant, is limited by the following. First, for duty rates that
exceed 5 percent ad valorem, the President is not authorized to
reduce any rate of duty to a rate less than 50 percent of the
rate of duty in effect on the date of enactment. Rates at or
below 5 percent ad valorem can be reduced to zero. Second, no
duty reduction done by proclamation may exceed more than 3
percent per year or one-tenth of the total reduction, whichever
is greater, except for products for which there is no U.S.
production. These limitations do not apply to reciprocal
agreements to eliminate or harmonize duties negotiated under
the WTO or interim agreements leading to the formation of a
regional free trade agreement.
With respect to trade barriers, section 4(b) authorizes the
President to enter into a trade agreement with a foreign
country if: (1) he determines that any duty or other import
restriction or any other barrier to or distortion of
international trade unduly burdens or restricts the foreign
trade of the United States or adversely affects the U.S.
economy, or the imposition of any such barrier or distortion is
likely to result in such a burden, restriction or effect; (2)
the agreement provides for the reduction or elimination of such
barrier or other distortion or prohibits or limits the
imposition of such a barrier or other distortion; (3) the
agreement substantially achieves the identified negotiating
objectives; and (4) the President meets other conditions set
forth in the Act.
Section 4 also defines what may be included in an
implementing bill submitted under fast track procedures. Under
section 4(b), an implementing bill may include only: (1)
provisions approving the trade agreement and the statement of
administrative action; (2) if changes to existing law are
required to implement the agreement, provisions necessary or
appropriate to implementation; and (3) provisions to provide
trade adjustment assistance to workers, firms and communities.
The Act extends fast track authority to the President for
five years. Fast track authority may be extended for two
additional years, if the President requests an extension, and
if neither House of Congress disapproves of the extension
request. Procedures for consideration of resolutions
disapproving of the President's extension request are set forth
in section 4(c), and largely track the procedures set forth in
the 1988 Act.

Section 5--Commencement of Negotiations

Section 5 establishes procedural requirements for new trade
negotiations initiated during the term of the Act for which the
Administration is seeking fast track procedures. Section 5
applies only to new negotiations--section 5 does not apply to
negotiations in the WTO and the FTAA (for which negotiating
objectives have been identified in the Act), or negotiations
with Singapore and Chile (which are on-going). Section 5
requires the President to develop with Congress the negotiating
objectives to be pursued in a new negotiation, and establishes
an opportunity for Congress to disapprove of new negotiations
involving more than one foreign country.
With respect to development of negotiating objectives,
section 5(b) provides that at least 90 days prior to initiation
of negotiations, the President must both notify Congress of his
intent to negotiate, and submit proposed negotiating
objectives. Between notification and the start of the
negotiations, the Act directs the President to work with the
committees of jurisdiction and the congressional trade advisors
to develop the specific negotiating objectives to be pursued,
and in the case of negotiations involving agriculture, to make
certain evaluations concerning foreign tariff barriers.
With respect to the role of Congress, section 5 creates a
legislative mechanism for Congress to deny fast track
protections to new trade negotiations involving more than one
foreign country (e.g., new regional negotiations).
Specifically, under section 5(c), fast track protections are
denied to such new trade negotiations if both Houses of
Congress pass a resolution of disapproval during the 90-day
period between notification of intent to negotiate, and
initiation of negotiations. Resolutions under section 5(c) are
privileged (i.e., automatic committee discharge, mandatory
floor consideration, and time-limited debate, as set forth in
section 152 (c), (d), and (e) of the Trade Act of 1974).

Section 6--Congressional Participation During Negotiations

Section 6 of the Act strengthens and expands the
congressional role during the course of trade negotiations by:
(1) creating a more active oversight role for the committees of
jurisdiction and the congressional trade advisors; (2) creating
the opportunity for periodic congressional review of on-going
negotiations; (3) requiring the President to examine and report
to the Congress on specified issues during the course of
negotiations; and (4) establishing reporting requirements and
other procedures for the President to meet prior to entering
into an agreement.
Section 6(a) requires the President to consult closely and
on a timely basis with the committees of jurisdiction and the
congressional trade advisors during the course of negotiations.
In addition, section 6(b) requires the USTR to develop, in
consultation with the chairs and ranking members of the Ways
and Means and Finance Committees and the trade advisors,
detailed guidelines for briefing committees and the trade
advisors during negotiations.
Section 6(c) creates an opportunity for the full Congress
to review periodically the course of on-going trade
negotiations, and to revoke fast track authority for a
negotiation. Specifically, section 6(c) creates a mechanism for
a sizeable minority of Members in the House or Senate to bring
to the floor a privileged resolution revoking fast track
protections for a trade negotiation, or set of negotiations
(i.e., more than one negotiation may be named in the
resolution). Privileged resolutions are subject to automatic
committee discharge, and mandatory floor consideration, and
gain privileged status if co-sponsored by 145 Members in the
House, or, in the Senate, if co-sponsored by 34 Senators. For
fast track procedures to be revoked for that agreement, both
the House and Senate must pass a disapproval resolution naming
the same agreement within 120 days. However, the House and
Senate resolutions need not be identical. Only one resolution
in each House may gain privileged status per Congress.
Disapproval resolutions that do not have the requisite
number of cosponsors, or that are introduced after the first
privileged resolution, are considered under normal procedures
(i.e., must be reported by Ways and Means in the House, and
Finance in the Senate, and are not entitled to automatic floor
consideration, unless subject to a discharge petition).
Section 6(d) codifies an existing Executive Order mandating
environmental assessments for all new trade agreements. Section
6(d) improves the Executive Order by mandating that the USTR
and CEQ identify in the assessment presented to Congress: (1)
the environmental impacts of trade agreements; (2) ways to
minimize adverse impacts and maximize positive ones; and (3)
how USTR incorporated the result of the assessment in
developing U.S. negotiating positions. Section 6(d) also
codifies the advisory committee on trade and environment (the
Trade and Environmental Policy Advisory Committee).
Section 6(e) requires the USTR and the Department of Labor
to assess and report on the impact of new trade agreements on
workers, and to develop proposals to mitigate adverse impacts.
Section 6(e) also codifies the advisory committee on trade and
labor (the Labor Advisory Committee).
Section 6(f) requires the USTR to notify Congress at least
90 days before entering into a trade agreement of language in
an agreement that could affect U.S. trade laws, or U.S. rights
and obligations under the WTO safeguards, antidumping and
countervailing duty agreements.
Section 6(g) requires the President to report to Congress
at least 90 days before entering into a trade agreement that
includes an investor-state dispute settlement mechanism on
theoperation of the dispute settlement mechanism, including how the
agreement does not impair a host state's police powers, including its
regulatory authority.
Section 6(h) requires the President, prior to signing a
trade agreement, to consult with the relevant committees of
jurisdiction and the congressional trade advisors on the nature
of the agreement, how and to what extent the agreement will
achieve the applicable purposes, policies, and objectives set
forth in the Act, and the implementation of the agreement,
including the impact on U.S. laws.
Section 6(i) requires the Advisory Committee for Trade
Policy and Negotiations to provide a report on the trade
agreement no later than 30 days after the President notifies
Congress of his intent to sign the agreement.
Section 6(j) requires the U.S. International Trade
Commission to provide an assessment of the trade agreement on
the U.S. economy as a whole, and on specific sectors, no later
than 90 days after the President signs the agreement.

Section 7--Implementation of Trade Agreements

Section 7 governs Congressional consideration of a signed
trade agreement and the accompanying implementing legislation.
The primary innovation in section 7 is the requirement that
the President certify that an agreement substantially achieves
the identified negotiating objectives prior to signing the
agreement, and that such certification be agreed to by the
congressional trade advisors for the related implementing bill
to be covered by fast track procedures. Specifically, under
section 7 the President is required, at least 120 days before
signing a trade agreement, to notify Congress of his intent to
enter into the agreement. No later than 30 days thereafter, the
President must also present to Congress a statement certifying
that the agreement substantially achieves the negotiating
objectives identified for the negotiation.
After the President submits his certification to Congress,
the congressional trade advisors have 30 days to review the
draft agreement and the President's certification, and make an
independent assessment of whether the agreement substantially
achieves the principal negotiating objectives. If a majority of
the congressional trade advisors concurs with the President's
certification, the procedures under section 151 of the Trade
Act of 1974 (fast track procedures) apply to the related
implementing legislation. (The procedures under section 151 of
the Trade Act of 1974 require Congressional action on
qualifying implementing bills no later than 90 days after
formal submission of the agreement and the draft implementing
legislation. Section 151 requires Congressional consideration
without amendment.)
The remainder of section 7 largely tracks the procedures in
the 1988 Act. Specifically, within 60 days of entering into the
agreement, the President is required to submit a list of
changes to existing laws required to bring the United States
into compliance with the agreement. After signing the
agreement, the President is required to submit formally the
agreement, the draft implementing legislation, a statement of
administrative action, and additional supporting information.
The supporting information includes: (1) an explanation as to
how the implementing legislation and the statement of
administrative action change existing law; (2) a statement
asserting that the agreement substantially achieves the
applicable purposes, policies and objectives of the fast track
bill, and explaining how and to what extent the agreement
substantially achieves the applicable purposes, policies and
objectives of the Act; and (3) a statement explaining why the
implementing bill and statement of administrative action is
required or appropriate to carry out the agreement.
The President may submit these documents at any time after
signing the agreement. The committees of jurisdiction are
expected to conduct an informal markup of the implementing
legislation between the time the President enters into the
agreement, and before he formally submits it, and the proposed
implementing legislation.

Section 8--Treatment of Certain Trade Agreements

Section 8 exempts specific trade agreements from the Act's
pre-negotiation notification requirements and review. The
exempted negotiations are: (1) the WTO and FTAA negotiations,
because negotiating objectives are identified in the fast track
legislation; and (2) negotiations with Chile and Singapore,
because the negotiations are on-going, and are well along
toward completion. Section 8 also modifies deadlines for
certain reports on the exempted agreements.

Section 9--Additional Reports and Studies

Section 9 requires the President to submit a report on
trade-restrictive practices of U.S. trading partners, including
anti-competitive practices by private entities promoted,
enabled or tolerated by a foreign government. Section 9 also
requires the USTR to provide Congress with an annual report on
exchange rate fluctuations.

Section 10--Additional Implementation and Enforcement Requirements

Section 10 requires the President to submit an enforcement
plan with each signed trade agreement. The plan must indicate
whether additional personnel and equipment are necessary for
the agencies charged with enforcement of the agreement to carry
out their responsibilities. If additional resources are
necessary, the President must include a request for such
resources in his next budget submission.

Charles B. Rangel.
Michael R. McNulty.
Robert T. Matsui.
Sander Levin.
William J. Coyne.
Xavier Becerra.

Dissenting Views on the Thomas Fast-Track Bill

Recently, Ambassador Zoellick joined with his ministerial
colleagues from Canada and Mexico to issue an interpretation of
some NAFTA Chapter 11 investment provisions. While we
appreciate this effort, which acknowledges that changes in the
Chapter 11 model are needed, it is far short of reform. We do
not believe that these interpretations address many of the most
fundamental and critical problems with the Chapter 11 rules,
nor does HR 3005.
Given the serious problems that we believe exist in NAFTA's
Chapter 11 on investment, we believe that the U.S. position on
investment must involve a substantial revision of the Chapter
11 model. NAFTA's investment provisions have opened the door to
a number of unexpected legal challenges brought before
international tribunals by foreign companies seeking financial
compensation from governments. Many of these challenges have
been brought on the grounds that foreign investors must be
compensated when regulation entirely within the scope of
traditional governmental authority over the environment, health
and safety or government purchasing threatens their business
interests.
Under the vague and overly broad language in the
substantive provisions of Chapter 11, the actions against the
United States could result in outcomes that would not be
possible if the challenges were brought in domestic courts,
thereby granting to foreign investors greater rights than those
that are available to U.S. citizens. HR 3005 does nothing to
change this skewed system against American citizens and
businesses.
Moreover, challenges under Chapter 11 are conducted before
tribunals whose proceedings are not open to the public, whose
rulings are not required to follow any judicial precedent, and
whose decisions are not subject to any standard appeals
process. Further, there is no diplomatic check or screen, such
as approval from a national government, before private entities
can bring these cases before international tribunals. HR 3005
does nothing to allow US citizens to view and participate in
these court proceedings where their interests are being
decided, what we ordinarily consider basic legal protections.
These cases represent a troubling shift of oversight over
environmental and public interest regulation to international
tribunals operating behind closed doors. We therefore believe
that the provisions of Chapter 11 represent a fundamental
threat to the ability of democratic governments to protect the
public interest. These provisions should not be repeated in any
future trade agreement, and HR 3005 does nothing to prevent
this.
At the markup, we offered a simple, common-sense amendment
to address these serious issues. Our amendment, if successful,
would have:
Ensured that foreign investors will enjoy no greater
protection than that afforded to domestic U.S.
investors under the U.S. constitution;
Required that all private investors gain approval
from their home country government before bringing a
case under the investment provisions;
Limited expropriation to cases in which there is
direct expropriation of all economically beneficial use
of property;
Limited violations of minimum standard of treatment
to a customary international law standard defined as
denial of justice and failure to provide full
protection and security;
Provided a clear exception for the governmental
exercise of police powers, including legitimate health,
safety, environmental, consumer and employment
opportunity laws and regulations, and;
Ensured that all proceedings, submissions, findings,
and decisions are promptly made public and that all
hearings are open to the public, and ensure that amicus
briefs will be accepted and considered by the
tribunals.
The Administration's arguments that any such mandatory
language should not be accepted is, itself, unacceptable. HR
3005 presents merely a wish-list of environmental, labor,
public health and safety goals. If we had unlimited faith in
the Executive, we would not need any guidelines.
We believe that unless the important issues outlined above
are addressed and the Chapter 11 model for investment
provisions substantially revised, future trade agreements may
impair our sovereignty and thus both our ability to protect our
citizens and preserve our country's remarkable natural
resources. We can make trade agreements that include a shield
to guard against expropriation of an industry, without giving
foreign investors a sword to attack our laws. And we can do so
while opening the entire process to public inspection. We
respectfully dissent and oppose HR 3005.

Lloyd Doggett.
John Lewis.
Jim McDermott.
Karen Thurman.

Additional Views on H.R. 3005

Every President since 1974--Republican and Democrat--has
had Trade Promotion Authority. Congress has consistently
recognized that the Administration must have the authority to
break down foreign trade barriers, and a bi-partisan majority
of the United States Congress has consistently supported
American leadership in opening markets and creating jobs.
This year, we face the question of how to address the
emerging issues that have shaped the global economy in more
recent years, including how to address the competitiveness
issues raised by varying labor and environmental conditions in
developing countries.
The United States cannot negotiate another country's wage
levels or environmental standards anymore than the United
States would permit other countries to determine our own, but
we can and should work cooperatively with our trading partners
to raise labor and environmental standards. Promoting
sustainable development practices and respect for worker rights
is a gradual process.
As you may know, we spent months working on a
comprehensive, balanced proposal to grant the President
authority to negotiate trade agreements. We worked hard to
ensure that Democratic principles were balanced with the need
to ensure our products have access to more open markets.
Like many Members, we found the Crane bill unacceptable.
After consultations with Representative Rangel and other
Democrats on the Ways and Means Committee, we engaged in
discussions on a bill to push forward Democratic ideals. We are
convinced that our proposal moves the ball forward in a
balanced, meaningful, and substantial way on labor and
environmental issues.
Some have argued that our proposal does not go far enough;
we strongly disagree.
ILO Core Labor standards will now be considered in the
context of trade agreements and negotiations. Negotiators will
be able to promote respect for these ILO standards; not impose
them on countries. And our proposal provides for meaningful
ways for the U.S. to assist countries in improving their labor
standards. Principal Negotiating Objectives require the U.S. to
assist in building the capacity for countries to respect worker
rights (defined in Section 10 (2) of H.R. 3005 as (1) the right
of association; (2) the right to organize and bargain
collectively; (3) a prohibition on the use of any form of
forced or compulsory labor; (4) a minimum age for the
employment of children; and (5) acceptable conditions of work
with respect to minimum wages, hours of work, and occupational
safety and health) and to develop more protective environmental
laws as well as requires countries to enforce the labor and
environment laws they have.
The bill also requires the U.S. to establish consultative
mechanisms to improve worker rights and environmental laws, and
requires the Secretary of Labor to provide technical assistance
to developing countries in the development of better labor laws
and enforcement of those laws. We feel these provisions give
U.S. negotiators a strong mandate to address labor and
environmental issues without infringing on the ability of
negotiators to open markets for U.S. exports and investment.
Consider other key elements of our proposal:
The bipartisan proposal includes a substantive,
enforceable standard on labor and environment directly
taken from the Jordan Free Trade Agreement;
The bipartisan proposal includes labor and
environment objectives which require negotiators to
promote respect for core labor standards, sustainable
development and environmental protection;
There is parity of enforcement and the availability
for the use of sanctions for ALL negotiating
objectives;
We provide for a substantive, inclusive, and
prescriptive role for Congress in the development of
trade policy and trade negotiations; and finally,
The bill incorporates the concept of transparency at
all levels of the multilateral trading regime.
While it is true that this bipartisan legislation does not
take steps to impose standards on developing countries, provide
overly prescriptive negotiating objectives, or attempt to grant
only a limited form of negotiating authority, the bipartisan
proposal represents substantial progress in the area of U.S.
trade policy since the 1988 Trade Act.
Clearly, we are at a crossroads in trying to determine how
best to improve international labor standards among our trading
partners. On the one hand, H.R. 3005 presents an opportunity
for creating a bipartisan consensus in the United States to
integrate the enforcement of national labor laws into trade
agreements and to increase the ability of countries through
trade-related initiatives to have ``core'' labor standards. On
the other hand, we can continue to argue over whether trade
agreements must require countries to adopt specific labor laws;
a position that has no chance of succeeding domestically or
internationally.
Some of our colleagues advocate for the imposition of ILO
standards on developing countries. The United States cannot
negotiate another country's labor laws anymore than the U.S.
would permit other countries to determine our own, but we can
and should work cooperatively to raise labor standards around
the world.
A few points on this issue:
Mandating Trade-based Enforcement of ILO Commitments Will
Not Be As Effective in Improving Standards As Working
Cooperatively with Developing Countries. In general, the
countries whose labor standards we most want to improve will
simply not agree to adopt commitments in trade agreements to
enforce ILO conventions or ILO standards subject to trade
sanctions. Indeed, many of these countries are as skeptical
about trade and investment liberalization as they are about
enforceable commitments on labor standards. The perceived
benefits of trade agreements are insufficient to change the
longstanding antipathy towards linking these issues in many
developing countries.
Mandating Trade-based Enforcement of ILO Commitments Will
Reduce, Not Enhance, the Effectiveness of the ILO. Developing
countries will be less likely to agree to new ILO declarations
or conventions if they see trade sanctions down the road.
Neither the ``Core Principles'' nor Conventional Standards
Represent Appropriate Standards to be enforced in Trade
Agreements. The ``ILO core principles'' do not provide concrete
or enforceable standards for determining what is a violation.
They represent general principles that all ILO member nations
have agreed to pursue. ILO conventions are not appropriate
standards for the United States to impose even if the other
country has ratified a particular convention.
The United States is only party to two core
conventions (No. 105, Abolition of Forced Labor (1957)
and No. 182, Worst Forms of Child Labor (1999)) and is
party to only 12 of the over 150 ILO conventions
currently in force.
The United States has not ratified several of the
core conventions, including those on freedom of
association and collective bargaining, and other
conventions. U.S. labor laws and practices may not be
consistent with specific provisions in those
conventions.
The dispute settlement systems typically set up by
trade agreements lack the expertise to address whether
such labor principles or conventional standards are
being adequately enforced.
Other Mechanisms Would be More Useful to Promote
Enforcement of ILO Standards. Many developing countries lack
the capacity or expertise to enforce standards adequately.
Efforts to provide technical assistance and increase capacity
are critical to having a positive impact on labor practices
worldwide. Rather than working outside the ILO to improve the
enforcement of ILO standards, it would make more sense to work
within the organization with both the technical expertise and
all the relevant parties (e.g., governments, labor and
business) on improving the ILO's existing mechanisms.
Many on the Committee have expressed concern that the
bipartisan bill does not go far enough to address labor and
environmental concerns. While we can always strive for the
perfect; the bipartisan bill represents substantial progress
and a balanced approach to trade negotiations. Its provisions
allow for the achievement of all the goals of the Democratic
substitute; and it achieves them in a manner that does not
raise questions regarding the treatment of developing countries
or regarding the ability of TPA to provide greater confidence
with our trading partners and our potential trading partners in
the United States' commitment to enhancing the global economy
through more liberalized trade.
The approach to improving labor and environmental standards
in trade agreements included in the bipartisan TPA bill is
balanced and responsible and we are pleased that a majority on
the Committee also recognized H.R. 3005 for having made
progress in these areas of U.S. trade policy.

William J. Jefferson.
John Tanner.