[House Report 107-290]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 107-290
======================================================================
ANDEAN TRADE PROMOTION AND DRUG ERADICATION ACT
_______
November 14, 2001.--Committed to the Committee of the Whole House on
the State of the Union and 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. 3009]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 3009) to extend the Andean Trade Preference Act, to
grant additional trade benefits under that Act, and for other
purposes, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
CONTENTS
I. Introduction.....................................................9
A. Purpose and Summary................................. 9
B. Background.......................................... 9
C. Legislative History................................. 9
II. Explanation of the Bill.........................................10
III. Votes of the Committee..........................................21
IV. Budget Effect...................................................22
A. Committee Estimate of Budgetary Effects............. 22
B. Statement Regarding New Budget Authority and Tax
Expenditures....................................... 22
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 22
V. Other Matters to be Discussed Under the Rules of the House......24
A. Committee Oversight Findings and Recommendations.... 24
B. Statement of General Performance Goals and
Objectives......................................... 24
C. Constitutional Authority Statement.................. 25
VI. Changes in Existing Law Made by the Bill, as Reported...........25
VII. Additional Views................................................40
VIII.Dissenting Views................................................42
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Andean Trade Promotion and Drug
Eradication Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Since the Andean Trade Preference Act was enacted in
1991, it has had a positive impact on United States trade with
Bolivia, Colombia, Ecuador, and Peru. Two-way trade has
doubled, with the United States serving as the leading source
of imports and leading export market for each of the Andean
beneficiary countries. This has resulted in increased jobs and
expanded export opportunities in both the United States and the
Andean region.
(2) The Andean Trade Preference Act has been a key element in
the United States counternarcotics strategy in the Andean
region, promoting export diversification and broad-based
economic development that provides sustainable economic
alternatives to drug-crop production, strengthening the
legitimate economies of Andean countries and creating viable
alternatives to illicit trade in coca.
(3) Notwithstanding the success of the Andean Trade
Preference Act, the Andean region remains threatened by
political and economic instability and fragility, vulnerable to
the consequences of the drug war and fierce global competition
for its legitimate trade.
(4) The continuing instability in the Andean region poses a
threat to the security interests of the United States and the
world. This problem has been partially addressed through
foreign aid, such as Plan Colombia, enacted by Congress in
2000. However, foreign aid alone is not sufficient. Enhancement
of legitimate trade with the United States provides an
alternative means for reviving and stabilizing the economies in
the Andean region.
(5) The Andean Trade Preference Act constitutes a tangible
commitment by the United States to the promotion of prosperity,
stability, and democracy in the beneficiary countries.
(6) Renewal and enhancement of the Andean Trade Preference
Act will bolster the confidence of domestic private enterprise
and foreign investors in the economic prospects of the region,
ensuring that legitimate private enterprise can be the engine
of economic development and political stability in the region.
(7) Each of the Andean beneficiary countries is committed to
conclude negotiation of a Free Trade Area of the Americas by
the year 2005, as a means of enhancing the economic security of
the region.
(8) Temporarily enhancing trade benefits for Andean
beneficiary countries will promote the growth of free
enterprise and economic opportunity in these countries and
serve the security interests of the United States, the region,
and the world.
SEC. 3. ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT.
(a) Eligibility of Certain Articles.--Section 204 of the Andean Trade
Preference Act (19 U.S.C. 3203) is amended--
(1) by striking subsection (c) and redesignating subsections
(d) through (g) as subsections (c) through (f), respectively;
and
(2) by amending subsection (b) to read as follows:
``(b) Exceptions and Special Rules.--
``(1) Certain articles that are not import-sensitive.--The
President may proclaim duty-free treatment under this title for
any article described in subparagraph (A), (B), (C), or (D)
that is the growth, product, or manufacture of an ATPDEA
beneficiary country and that meets the requirements of this
section, if the President determines that such article is not
import-sensitive in the context of imports from ATPDEA
beneficiary countries:
``(A) Footwear not designated at the time of the
effective date of this Act as eligible for the purpose
of the generalized system of preferences under title V
of the Trade Act of 1974.
``(B) Petroleum, or any product derived from
petroleum, provided for in headings 2709 and 2710 of
the HTS.
``(C) Watches and watch parts (including cases,
bracelets and straps), of whatever type including, but
not limited to, mechanical, quartz digital or quartz
analog, if such watches or watch parts contain any
material which is the product of any country with
respect to which HTS column 2 rates of duty apply.
``(D) Handbags, luggage, flat goods, work gloves, and
leather wearing apparel that were not designated on
August 5, 1983, as eligible articles for purposes of
the generalized system of preferences under title V of
the Trade Act of 1974.
``(2) Exclusions.--Subject to paragraph (3), duty-free
treatment under this title may not be extended to--
``(A) textiles and apparel articles which were not
eligible articles for purposes of this title on January
1, 1994, as this title was in effect on that date;
``(B) rum and tafia classified in subheading 2208.40
of the HTS; or
``(C) sugars, syrups, and sugar-containing products
subject to over-quota duty rates under applicable
tariff-rate quotas.
``(3) Apparel articles.--
``(A) In general.--Apparel articles that are imported
directly into the customs territory of the United
States from an ATPDEA beneficiary country shall enter
the United States free of duty and free of any
quantitative restrictions, limitations, or consultation
levels, but only if such articles are described in
subparagraph (B).
``(B) Covered articles.--The apparel articles
referred to in subparagraph (A) are the following:
``(i) Apparel articles assembled from
products of the united states and atpdea
beneficiary countries or products not available
in commercial quantities.--Apparel articles
sewn or otherwise assembled in 1 or more ATPDEA
beneficiary countries, or the UnitedStates, or
both, exclusively from any one or any combination of the following:
``(I) Fabrics or fabric components
formed, or components knit-to-shape, in
the United States, from yarns formed in
the United States or 1 or more ATPDEA
beneficiary countries (including
fabrics not formed from yarns, if such
fabrics are classifiable under heading
5602 or 5603 of the HTS and are formed
in the United States).
``(II) Fabrics or fabric components
formed or components knit-to-shape, in
1 or more ATPDEA beneficiary countries,
from yarns formed in 1 or more ATPDEA
beneficiary countries, if such fabrics
(including fabrics not formed from
yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS
and are formed in 1 or more ATPDEA
beneficiary countries) or components
are in chief weight of llama or alpaca.
``(III) Fabrics or yarn that is not
formed in the United States or in one
or more ATPDEA beneficiary countries,
to the extent that apparel articles of
such fabrics or yarn would be eligible
for preferential treatment, without
regard to the source of the fabrics or
yarn, under Annex 401 of the NAFTA.
``(ii) Additional fabrics.--At the request of
any interested party, the President is
authorized to proclaim additional fabrics and
yarns as eligible for preferential treatment
under clause (i)(III) if--
``(I) the President determines that
such fabrics or yarns cannot be
supplied by the domestic industry in
commercial quantities in a timely
manner;
``(II) the President has obtained
advice regarding the proposed action
from the appropriate advisory committee
established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155) and
the United States International Trade
Commission;
``(III) within 60 days after the
request, the President has submitted a
report to the Committee on Ways and
Means of the House of Representatives
and the Committee on Finance of the
Senate that sets forth the action
proposed to be proclaimed and the
reasons for such action, and the advice
obtained under subclause (II);
``(IV) a period of 60 calendar days,
beginning with the first day on which
the President has met the requirements
of subclause (III), has expired; and
``(V) the President has consulted
with such committees regarding the
proposed action during the period
referred to in subclause (III).
``(iii) Apparel articles assembled in 1 or
more atpdea beneficiary countries from regional
fabrics or regional components.--(I) Subject to
the limitation set forth in subclause (II),
apparel articles sewn or otherwise assembled in
1 or more ATPDEA beneficiary countries from
fabrics or from fabric components formed or
from components knit-to-shape, in 1 or more
ATPDEA beneficiary countries, from yarns formed
in the United States or 1 or more ATPDEA
beneficiary countries (including fabrics not
formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the
HTS and are formed in 1 or more ATPDEA
beneficiary countries), whether or not the
apparel articles are also made from any of the
fabrics, fabric components formed, or
components knit-to-shape described in clause
(i).
``(II) The preferential treatment referred to
in subclause (I) shall be extended in the 1-
year period beginning December 1, 2001, and in
each of the 5 succeeding 1-year periods, to
imports of apparel articles in an amount not to
exceed the applicable percentage of the
aggregate square meter equivalents of all
apparel articles imported into the United
States in the preceding 12-month period for
which data are available.
``(III) For purposes of subclause (II), the
term `applicable percentage' means 3 percent
for the 1-year period beginning December 1,
2001, increased in each of the 5 succeeding 1-
year periods by equal increments, so that for
the period beginning December 1, 2005, the
applicable percentage does not exceed 6
percent.
``(iv) Handloomed, handmade, and folklore
articles.--A handloomed, handmade, or folklore
article of an ATPDEA beneficiary country
identified under subparagraph (C) that is
certified as such by the competent authority of
such beneficiary country.
``(v) Special rules.--
``(I) Exception for findings and
trimmings.--An article otherwise
eligible for preferential treatment
under this paragraph shall not be
ineligible for such treatment because
the article contains findings or
trimmings of foreign origin, if such
findings and trimmings do not exceed 25
percent of the cost of the components
of the assembled product. Examples of
findings and trimmings are sewing
thread, hooks and eyes, snaps, buttons,
`bow buds', decorative lace, trim,
elastic strips, zippers, including
zipper tapes and labels, and other
similar products.
``(II) Certain interlining.--(aa) An
article otherwise eligible for
preferential treatment under this
paragraph shall not be ineligible for
such treatment because the article
contains certain interlinings of
foreign origin, if the value of such
interlinings (and any findings and
trimmings) does not exceed 25 percent
of the cost of the components of the
assembled article.
``(bb) Interlinings eligible for the
treatment described in division (aa)
include only a chest type plate, `hymo'
piece, or `sleeve header', of woven or
weft-inserted warp knit construction
and of coarse animal hair or man-made
filaments.
``(cc) The treatment described in
this subclause shall terminate if the
President makes a determination that
United States manufacturers are
producing such interlinings in the
United States in commercial quantities.
``(III) De minimis rule.--An article
that would otherwise be ineligible for
preferential treatment under this
subparagraph because the article
contains fibers or yarns not wholly
formed in the United States or in one
or more ATPDEA beneficiary countries
shall not be ineligible for such
treatment if the total weight of all
such fibers or yarns is not more than 7
percent of the total weight of the
good.
``(C) Handloomed, handmade, and folklore articles.--
For purposes of subparagraph (B)(iv), the President
shall consult with representatives of the ATPDEA
beneficiary countries concerned for the purpose of
identifying particular textile and apparel goods that
are mutually agreed upon as being handloomed, handmade,
or folklore goods of a kind described in section
2.3(a), (b), or (c) of the Annex or Appendix 3.1.B.11
of the Annex.
``(D) Penalties for transshipment.--
``(i) Penalties for exporters.--If the
President determines, based on sufficient
evidence, that an exporter has engaged in
transshipment with respect to apparel articles
from an ATPDEA beneficiary country, then the
President shall deny all benefits under this
title to such exporter, and any successor of
such exporter, for a period of 2 years.
``(ii) Penalties for countries.--Whenever the
President finds, based on sufficient evidence,
that transshipment has occurred, the President
shall request that the ATPDEA beneficiary
country or countries through whose territory
the transshipment has occurred take all
necessary and appropriate actions to prevent
such transshipment. If the President determines
that a country is not taking such actions, the
President shall reduce the quantities of
apparel articles that may be imported into the
United States from such country by the quantity
of the transshipped articles multiplied by 3,
to the extent consistent with the obligations
of the United States under the WTO.
``(iii) Transshipment described.--
Transshipment within the meaning of this
subparagraph has occurred when preferential
treatment under subparagraph (A) has been
claimed for an apparel article on the basis of
material false information concerning the
country of origin, manufacture, processing, or
assembly of the article or any of its
components. For purposes of this clause, false
information is material if disclosure of the
true information would mean or would have meant
that the article is or was ineligible for
preferential treatment under subparagraph (A).
``(E) Bilateral emergency actions.--
``(i) In general.--The President may take
bilateral emergency tariff actions of a kind
described in section 4 of the Annex with
respect to any apparel article imported from an
ATPDEA beneficiary country if the application
of tariff treatment under subparagraph (A) to
such article results in conditions that would
be cause for the taking of suchactions under
such section 4 with respect to a like article described in the same 8-
digit subheading of the HTS that is imported from Mexico.
``(ii) Rules relating to bilateral emergency
action.--For purposes of applying bilateral
emergency action under this subparagraph--
``(I) the requirements of paragraph
(5) of section 4 of the Annex (relating
to providing compensation) shall not
apply;
``(II) the term `transition period'
in section 4 of the Annex shall mean
the period ending December 31, 2006;
and
``(III) the requirements to consult
specified in section 4 of the Annex
shall be treated as satisfied if the
President requests consultations with
the ATPDEA beneficiary country in
question and the country does not agree
to consult within the time period
specified under section 4.
``(4) Customs procedures.--
``(A) In general.--
``(i) Regulations.--Any importer that claims
preferential treatment under paragraph (1) or
(3) shall comply with customs procedures
similar in all material respects to the
requirements of Article 502(1) of the NAFTA as
implemented pursuant to United States law, in
accordance with regulations promulgated by the
Secretary of the Treasury.
``(ii) Determination.--
``(I) In general.--In order to
qualify for the preferential treatment
under paragraph (1) or (3) and for a
Certificate of Origin to be valid with
respect to any article for which such
treatment is claimed, there shall be in
effect a determination by the President
that each country described in
subclause (II)--
``(aa) has implemented and
follows; or
``(bb) is making substantial
progress toward implementing
and following,
procedures and requirements similar in
all material respects to the relevant
procedures and requirements under
chapter 5 of the NAFTA.
``(II) Country described.--A country
is described in this subclause if it is
an ATPDEA beneficiary country--
``(aa) from which the article
is exported; or
``(bb) in which materials
used in the production of the
article originate or in which
the article or such materials
undergo production that
contributes to a claim that the
article is eligible for
preferential treatment under
paragraph (1) or (3).
``(B) Certificate of origin.--The Certificate of
Origin that otherwise would be required pursuant to the
provisions of subparagraph (A) shall not be required in
the case of an article imported under paragraph (1) or
(3) if such Certificate of Origin would not be required
under Article 503 of the NAFTA (as implemented pursuant
to United States law), if the article were imported
from Mexico.
``(5) Definitions.--In this subsection--
``(A) Annex.--The term `the Annex' means Annex 300-B
of the NAFTA.
``(B) ATPDEA beneficiary country.--The term `ATPDEA
beneficiary country' means any `beneficiary country',
as defined in section 203(a)(1) of this title, which
the President designates as an ATPDEA beneficiary
country, taking into account the criteria contained in
subsections (c) and (d) of section 203 and other
appropriate criteria, including the following:
``(i) Whether the beneficiary country has
demonstrated a commitment to--
``(I) undertake its obligations under
the WTO, including those agreements
listed in section 101(d) of the Uruguay
Round Agreements Act, on or ahead of
schedule; and
``(II) participate in negotiations
toward the completion of the FTAA or
another free trade agreement.
``(ii) The extent to which the country
provides protection of intellectual property
rights consistent with or greater than the
protection afforded under the Agreement on
Trade-Related Aspects of Intellectual Property
Rights described in section 101(d)(15) of the
Uruguay Round Agreements Act.
``(iii) The extent to which the country
provides internationally recognized worker
rights, including--
``(I) the right of association;
``(II) the right to organize and
bargain collectively;
``(III) a prohibition on the use of
any form of forced or compulsory labor;
``(IV) a minimum age for the
employment of children; and
``(V) acceptable conditions of work
with respect to minimum wages, hours of
work, and occupational safety and
health;
``(iv) Whether the country has implemented
its commitments to eliminate the worst forms of
child labor, as defined in section 507(6) of
the Trade Act of 1974.
``(v) The extent to which the country has met
the counternarcotics certification criteria set
forth in section 490 of the Foreign Assistance
Act of 1961 (22 U.S.C. 2291j) for eligibility
for United States assistance.
``(vi) The extent to which the country has
taken steps to become a party to and implements
the Inter-American Convention Against
Corruption.
``(vii) The extent to which the country--
``(I) applies transparent,
nondiscriminatory, and competitive
procedures in government procurement
equivalent to those contained in the
Agreement on Government Procurement
described in section 101(d)(17) of the
Uruguay Round Agreements Act; and
``(II) contributes to efforts in
international fora to develop and
implement international rules in
transparency in government procurement.
``(C) NAFTA.--The term `NAFTA' means the North
American Free Trade Agreement entered into between the
United States, Mexico, and Canada on December 17, 1992.
``(D) WTO.--The term `WTO' has the meaning given that
term in section 2 of the Uruguay Round Agreements Act
(19 U.S.C. 3501).
``(E) ATPDEA.--The term `ATPDEA' means the Andean
Trade Promotion and Drug Eradication Act.''.
(b) Determination Regarding Retention of Designation.--Section
203(e)(1) of the Andean Trade Preference Act (19 U.S.C. 3202(e)(1)) is
amended--
(1) by redesignating subparagraphs (A) and (B) as clauses (i)
and (ii), respectively;
(2) by inserting ``(A)'' after ``(1)''; and
(3) by adding at the end the following:
``(B) The President may, after the requirements of paragraph (2) have
been met--
``(i) withdraw or suspend the designation of any country as
an ATPDEA beneficiary country, or
``(ii) withdraw, suspend, or limit the application of
preferential treatment under section 204(b)(1) or (3) to any
article of any country,
if, after such designation, the President determines that, as a result
of changed circumstances, the performance of such country is not
satisfactory under the criteria set forth in section 204(b)(5)(B).''.
(c) Conforming Amendments.--(1) Section 202 of the Andean Trade
Preference Act (19 U.S.C. 3201) is amended by inserting ``(or other
preferential treatment)'' after ``treatment''.
(2) Section 204(a) of the Andean Trade Preference Act (19 U.S.C.
3203(a)) is amended--
(A) in paragraph (1), by inserting ``(or otherwise provided
for)'' after ``eligibility''; and
(B) in paragraph (2), by striking ``subsection (a)'' and
inserting ``paragraph (1)''.
SEC. 4. TERMINATION OF PREFERENTIAL TREATMENT.
Section 208 of the Andean Trade Preference Act (19 U.S.C. 3206) is
amended to read as follows:
``SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.
``No duty-free treatment or other preferential treatment extended to
beneficiary countries under this title shall remain in effect after
December 31, 2006.''.
SEC. 5. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT.
Section 213(b)(2)(A) of the Carribean Basin Economic Recovery Act (19
U.S.C. 2703(b)(2)(A)) is amended as follows:
(1) Clause (i) is amended by striking the matter preceding
subclause (I) and inserting the following:
``(i) Apparel articles assembled in one or
more cbtpa beneficiary countries.--Apparel
articles sewn or otherwise assembled inone or
more CBTPA beneficiary countries from fabrics wholly formed and cut, or
from components knit-to-shape, in the United States from yarns wholly
formed in the United States, (including fabrics not formed from yarns,
if such fabrics are classifiable under heading 5602 or 5603 of the HTS
and are wholly formed and cut in the United States) that are--''.
(2) Clause (ii) is amended to read as follows:
``(ii) Other apparel articles assembled in
one or more cbtpa beneficiary countries.--
Apparel articles sewn or otherwise assembled in
one or more CBTPA beneficiary countries with
thread formed in the United States from fabrics
wholly formed in the United States and cut in
one or more CBTPA beneficiary countries from
yarns wholly formed in the United States, or
from components knit-to-shape in the United
States from yarns wholly formed in the United
States, or both (including fabrics not formed
from yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS and are
wholly formed in the United States).''.
(3) Clause (iii)(II) is amended to read as follows:
``(II) The amount referred to in subclause
(I) is as follows:
``(aa) 290,000,000 square meter
equivalents during the 1-year period
beginning on October 1, 2001.
``(bb) 500,000,000 square meter
equivalents during the 1-year period
beginning on October 1, 2002.
``(cc) 850,000,000 square meter
equivalents during the 1-year period
beginning on October 1, 2003.
``(dd) 970,000,000 square meter
equivalents in each succeeding 1-year
period through September 30, 2008.''.
(4) Clause (iii)(IV) is amended to read as follows:
``(IV) The amount referred to in subclause
(III) is as follows:
``(aa) 4,872,000 dozen during the 1-
year period beginning on October 1,
2001.
``(bb) 9,000,000 dozen during the 1-
year period beginning on October 1,
2002.
``(cc) 10,000,000 dozen during the 1-
year period beginning on October 1,
2003.
``(dd) 12,000,000 dozen in each
succeeding 1-year period through
September 30, 2008.''.
(5) Section 213(b)(2)(A) of such Act is further amended by
adding at the end the following new clause:
``(ix) Apparel articles assembled in one or
more cbtpa beneficiary countries from united
states and cbtpa beneficiary country
components.--Apparel articles sewn or otherwise
assembled in one or more CBTPA beneficiary
countries with thread formed in the United
States from components cut in the United States
and in one or more CBTPA beneficiary countries
from fabric wholly formed in the United States
from yarns wholly formed in the United States,
or from components knit-to-shape in the United
States and one or more CBTPA beneficiary
countries from yarns wholly formed in the
United States, or both (including fabrics not
formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the
HTS).''.
SEC. 6. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND OPPORTUNITY ACT.
Section 112(b) of the African Growth and Opportunity Act (19 U.S.C.
3721(b)) is amended as follows:
(1) Paragraph (1) is amended by amending the matter preceding
subparagraph (A) to read as follows:
``(1) Apparel articles assembled in one or more beneficiary
sub-saharan african countries.--Apparel articles sewn or
otherwise assembled in one or more beneficiary sub-Saharan
African countries from fabrics wholly formed and cut, or from
components knit-to-shape, in the United States from yarns
wholly formed in the United States, (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are wholly formed and cut
in the United States) that are--''.
(2) Paragraph (2) is amended to read as follows:
``(2) Other apparel articles assembled in one or more
beneficiary sub-saharan african countries.--Apparel articles
sewn or otherwise assembled in one or more beneficiary sub-
Saharan African countries with thread formed in the United
States from fabrics wholly formed in the United States and cut
in one or more beneficiary sub-Saharan African countries from
yarns wholly formed in the United States, or from components
knit-to-shape in the United States from yarns wholly formed in
the United States, or both (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or
5603 of the HTS and are wholly formed in the United States).''.
(3) Paragraph (3) is amended--
(A) by amending the matter preceding subparagraph (A)
to read as follows:
``(3) Apparel articles from regional fabric or yarns.--
Apparel articles wholly assembled in one or more beneficiary
sub-Saharan African countries from fabric wholly formed in one
or more beneficiary sub-Saharan African countries from yarns
originating either in the United States or one or more
beneficiary sub-Saharan African countries (including fabrics
not formed from yarns, if such fabrics are classified under
heading 5602 or 5603 of the HTS and are wholly formed in one or
more beneficiary sub-Saharan African countries), or from
components knit-to-shape in one or more beneficiary sub-Saharan
African countries from yarns originating either in the United
States or one or more beneficiary sub-Saharan African
countries, or apparel articles wholly formed on seamless
knitting machines in a beneficiary sub-Saharan African country
from yarns originating either in the United States or one or
more beneficiary sub-Saharan African countries, subject to the
following:'';
(B) in subparagraph (A)(ii)--
(i) by striking ``1.5'' and inserting ``3'';
and
(ii) by striking ``3.5'' and inserting ``7'';
and
(C) by amending subparagraph (B) to read as follows:
``(B) Special rules for lesser developed countries.--
``(i) In general.--Subject to subparagraph
(A), preferential treatment under this
paragraph shall be extended through September
30, 2004, for apparel articles wholly
assembled, or knit-to-shape and wholly
assembled, or both, in one or more lesser
developed beneficiary sub-Saharan African
countries regardless of the country of origin
of the fabric or the yarn used to make such
articles.
``(ii) Lesser developed beneficiary sub-
saharan african country.--For purposes of
clause (i), the term `lesser developed
beneficiary sub-Saharan African country'
means--
``(I) a beneficiary sub-Saharan
African country that had a per capita
gross national product of less than
$1,500 in 1998, as measured by the
International Bank for Reconstruction
and Development;
``(II) Botswana; and
``(III) Namibia.''.
(4) Paragraph (4)(B) is amended by striking ``18.5'' and
inserting ``21.5''.
(5) Section 112(b) of such Act is further amended by adding
at the end the following new paragraph:
``(7) Apparel articles assembled in one or more beneficiary
sub-saharan african countries from united states and
beneficiary sub-saharan african country components.--Apparel
articles sewn or otherwise assembled in one or more beneficiary
sub-Saharan African countries with thread formed in the United
States from components cut in the United States and one or more
beneficiary sub-Saharan African countries from fabric wholly
formed in the United States from yarns wholly formed in the
United States, or from components knit-to-shape in the United
States and one or more beneficiary sub-Saharan African
countries from yarns wholly formed in the United States, or
both (including fabrics not formed from yarns, if such fabrics
are classifiable under heading 5602 or 5603 of the HTS).''.
I. INTRODUCTION
A. Purpose and Summary
H.R. 3009, the ``Andean Trade Promotion and Drug
Eradication Act,'' would extend (through December 31, 2006) and
enhance the Andean Trade Preference Act (ATPA), which expires
on December 4, 2001. The purpose of the bill is to expand trade
and promote economic development as a way to create viable
alternatives to illicit trade in coca, thereby enhancing
political security in the Andean region and the hemisphere.
B. Background
The Andean Trade Preference Act (ATPA) was enacted on
December 4, 1991 as title II of P.L. 102-182. Modeled after the
Caribbean Basin Initiative (P.L. 98-67, title II), the Act
authorized preferential trade benefits to four Andean
countries--Bolivia, Colombia, Ecuador, and Peru. Because the
ATPA's authority was limited to 10 years, it will expire on
December 4, 2001, unless renewed.
The ATPA has been cornerstone of U.S. efforts to encourage
the Andean countries to move out of illegal drug production and
trafficking and into legitimate products. Its success is
demonstrated by the growth in trade between the United States
and the Andean nations. Between 1991 and 2000, total two-way
trade nearly doubled: U.S. exports to the ATPA countries
increased 66 percent, while imports more than doubled, rising
from $5 billion to $11 billion. Although the Andean countries
supply only a fraction of U.S. imports, the United States is
the leading export market for each of these countries.
Another mark of the ATPA's success can be seen in the
market reforms of the Andean countries. As these countries
shift their polices to favor private enterprise and initiative
and open their markets to the free flow of goods and services,
they are realizing that legitimate trade creates jobs, reduces
poverty, and decreases the incentive to trade in illegal
narcotics.
C. Legislative History
Committee action
H.R. 3009, the Andean Trade Promotion and Drug Eradication
Act, was introduced on October 3, 2001, by Congressman Crane,
on behalf of himself, and Chairman Thomas. The bill was
referred to the Committee on Ways and Means.
On October 5, 2001, the Committee on Ways and Means met to
consider H.R. 3009. At that time, Chairman Thomas offered an
amendment in the nature of a substitute which was adopted by
voice vote. An amendment offered by Mr. Rangel to allow Namibia
and Botswana to use third country fabric for the transition
period under the regional fabric cap established in the Africa
Growth and Opportunity Act (AGOA,) was accepted by voice vote.
An amendment offered by Mr. Rangel to add tuna and tuna
products to the list of items excluded from duty-free treatment
under the bill was defeated by a roll call vote of 17 yeas to
23 nays. The Committee then ordered the bill favorably
reported, as amended, by voice vote.
Legislative hearing and oversight
On May 8, 2001 the Trade Subcommittee held a hearing on the
prospects and timing for achieving the Free Trade Area of the
Americas (FTAA) and on proposals to increase trade with Andean
countries through the extension and expansion of the Andean
Trade Preference Act. The Subcommittee received testimony from
both invited and public witnesses, many of whom stressed the
importance of expanding trade and investment relations with
Andean countries in order to create legitimate economic
alternatives to the illicit production of coca in the region.
Testimony in favor of expanding trade benefits available under
the Andean Trade Preference Act was received from the U.S.
Trade Representative, Ambassador Robert Zoellick.
II. EXPLANATION OF THE BILL
Section 1: Short Title
Present law
No provision.
Explanation of the bill
Section 1 of H.R. 3009, as amended, provides that the Act
may be cited as the ``Andean Trade Promotion and Drug
Eradication Act.''
Reasons for change
This section names the legislation for identification
purposes.
Section 2: Findings
Present law
No provision.
Explanation of provision
Section 2 contains findings of Congress that:
(1) Since the Andean Trade Preference Act was enacted in
1991, it has had a positive impact on United States trade with
Bolivia, Colombia, Ecuador, and Peru. Two-way trade has
doubled, with the United States serving as the leading source
of imports and leading export market for each of the Andean
beneficiary countries. This has resulted in increased jobs and
expanded export opportunities in both the United States and the
Andean region.
(2) The Andean Trade Preference Act has been a key element
in the United States counter narcotics strategy in the Andean
region, promoting export diversification and broad-based
economic development that provide sustainable economic
alternatives to drug-crop production, strengthening the
legitimate economies of Andean countries and creating viable
alternatives to illicit trade in coca.
(3) Notwithstanding the success of the Andean Trade
Preference Act, the Andean region remains threatened by
political and economic instability and fragility, vulnerable to
the consequences of the drug war and fierce global competition
for its legitimate trade.
(4) The continuing instability in the Andean region poses a
threat to the security interests of the United States and the
world. This problem has been partially addressed through
foreign aid, such as Plan Colombia, enacted by Congress in
2000. However, foreign aid alone is not sufficient. Enhancement
of legitimate trade with the United States provides an
alternative means for reviving and stabilizing the economies in
the Andean region.
(5) The Andean Trade Preference Act constitutes a tangible
commitment by the United States to the promotion of prosperity,
stability, and democracy in the beneficiary countries.
(6) Renewal and enhancement of the Andean Trade Preference
Act will bolster the confidence of domestic private enterprise
and foreign investors in the economic prospects of the region,
ensuring that legitimate private enterprise can be the engine
of economic development and political stability in the region.
(7) Each of the Andean beneficiary countries is committed
to conclude negotiation of a Free Trade Area of the Americas by
the year 2005 as a means of enhancing the economic security of
the region.
(8) Temporarily enhancing trade benefits for Andean
beneficiaries countries will promote the growth of free
enterprise and economic opportunity in these countries and
serve the security interests of the United States, the region,
and the world.
Reason for change
Section 2 expresses the Committee's view that extension and
enhancement of the Andean Trade Preference Act will promote
free enterprise as an engine of economic development that will
create viable alternatives to illicit trade in coca, thereby
enhancing political security in the region.
Section 3: Articles eligible for preferential treatment
Articles (except apparel) eligible for preferential
treatment
Present law
The Andean Trade Preference Act (ATPA), enacted on December
4, 1991 as title II of Public Law 102-182, authorizes
preferential trade benefits for the Andean nations of Bolivia,
Colombia, Ecuador, and Peru, similar to those benefits granted
to beneficiaries under the Caribbean Basin Initiative program.
The ATPA authorizes the President to proclaim duty-free
treatment for all eligible articles from Bolivia, Colombia,
Ecuador, Peru. This authority applies only to normal column 1
rates of duty in the Harmonized Tariff Schedule of the United
States (HTS); any additional duties imposed under U.S. unfair
trade practice laws, such as the antidumping or countervailing
duty laws, are not affected by this authority.
The ATPA contains a list of products that are ineligible
for duty-free treatment. More specifically, ATPA duty-free
treatment does not apply to textile and apparel articles that
are subject to textile agreements; petroleum and petroleum
products; footwear not eligible for duty-free treatment under
the Generalized System of Preferences; certain watches and
watch parts; certain leather products; and sugar, syrups and
molasses subject to over-quota rates of duty.
Explanation of provision
Section 3(a) amends the Andean Trade Preference Act to
authorize the President to proclaim duty-free treatment for any
of the following articles which were previously excluded from
duty-free treatment under the ATPA, if the President determines
that the article is not import-sensitive in the context of
imports from beneficiary countries:
(1) Footwear not designated at the time of the
effective date of this Act as eligible for the purposes
of the Generalized System of Preferences under title V
of the Trade Act of 1974;
(2) Petroleum, or any product derived from petroleum,
provided for in headings 2709 and 2710 of the HTS;
(3) Watches and watch parts (including cases,
bracelets and straps), of whatever type including, but
not limited to, mechanical, quartz digital or quartz
analog, if such watches or watch parts contain any
material which is the product of any country with
respect to which HTS column 2 rates of duty apply;
(4) Handbags, luggage, flat goods, work gloves, and
leather wearing apparel that--(i) are the product of
any beneficiary country; and (ii) were not designated
on August 5, 1983, as eligible articles for purposes of
the Generalized System of Preferences under title V of
the Trade Act of 1974.
Under H.R. 3009, textiles subject to textile agreements;
sugar, syrups and molasses subject to over-quota tariffs; and
rum and tafia classified in subheading 2208.40.00 of the HTS
would continue to be ineligible for duty-free treatment, as
would apparel products other than those specifically described
below. Imports of tuna, prepared or preserved in any manner, in
airtight containers would receive immediate duty-free
treatment.
Reason for change
The Committee believes that extending and enhancing
economic benefits to countries under the Andean Trade
Preference Act, by authorizing duty-free treatment for products
excluded from duty-free treatment under current law, as long as
they are not import-sensitive, will promote economic
alternatives to the production of illicit drugs, while
encouraging these nations to make necessary economic reforms.
Eligible apparel articles
Present law
Under the ATPA, apparel articles are on the list of
products excluded from eligibility for duty-free treatment.
Explanation of provision
Under Section 3, the President may proclaim duty-free and
quota-free treatment for apparel articles sewn or otherwise
assembled in one or more beneficiary countries exclusively from
any one or any combination of the following:
(1) Fabrics or fabric components formed, or components
knit-to-shape, in the United States (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are formed in the United
States).
(2) Fabrics or fabric components formed, or components
knit-to-shape, in one or more beneficiary countries, from yarns
formed in one or more beneficiary countries, if such fabrics
(including fabrics not formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the HTS and are
formed in one or more beneficiary countries) are in chief
weight of llama, or alpaca.
(3) Fabrics or yarn not produced in the United States or in
the region, to the extent that apparel articles of such fabrics
or yarn would be eligible for preferential treatment, without
regard to the source of the fabrics or yarn, under Annex 401 of
the NAFTA (short supply provisions). Any interested party may
request the President to consider such treatment for additional
fabrics and yarns on the basis that they cannot be supplied by
the domestic industry in commercial quantities in a timely
manner, and the President must make a determination within 60
calendar days of receiving the request from the interested
party.
(4) Apparel articles sewn or otherwise assembled in one or
more beneficiary countries from fabrics or fabric components
formed or components knit-to-shape, in one or more beneficiary
countries, from yarns formed in the United States or in one or
more beneficiary countries (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or
5603 of the HTS and are formed in one or more beneficiary
countries), whether or not the apparel articles are also made
from any of the fabrics, fabric components formed, or
components knit-to-shape in the United States described in
paragraph 1. Imports of apparel made from regional fabric and
regional yarn would be capped at 3 percent of U.S. imports
growing to 6 percent of U.S. imports in 2006, measured in
square meter equivalents.
Reason for change
As described above, the Committee believes that extending
and enhancing economic benefits to countries under the Andean
Trade Preference Act, by authorizing duty-free treatment for
certain products excluded from duty-free treatment under
current law, will promote economic alternatives to the
production of illicit drugs, while encouraging these nations to
make necessary economic reforms. The Committee believes that an
ATPA enhancement bill should be tailored to the nature of
textile and apparel production in the region. Unlike the
Caribbean Basin region, the Andean region produces much of its
own fabric and yarn. A bill that made benefits contingent on
U.S. fabric and yarn content would provide very little benefit
to Andean countries. In addition, the region manufactures a
considerable amount of woven fabric, so limiting the use of
regional fabric to knit fabric made of U.S. yarn, as in
Caribbean Basin Trade Partnership Act, would not provide
meaningful benefits to Andean economies.
Penalties for transshipment
Present law
The Tariff Act of 1930, as amended, provides for civil
monetary penalties forunlawful transshipment. These include
penalties under section 1592 for up to a maximum of the domestic value
of the imported merchandise or eight times the loss of revenue, as well
as denial of entry, redelivery or liquidated damages for failure to
redeliver the merchandise determined to be inaccurately represented. In
addition, an importer may be liable for criminal penalties, including
imprisonment for up to five years, under section 1001 of title 18 of
the United States Code for making false statements on import
documentation.
Under the North American Free Trade Agreement (NAFTA),
Parties to the Agreement must observe Customs procedures and
documentation requirements, which are established in Chapter 5
of NAFTA. Requirements regarding Certificates of Origin for
imports receiving preferential tariffs are detailed in Article
502.1 of NAFTA.
Explanation of provision
Section 3 requires that importers comply with requirements
similar in all material respects to the requirements regarding
Certificates of Origin contained in Article 502.1 of the North
American Free Trade Agreement (NAFTA) for a similar importation
from Mexico.
In addition, if an exporter is determined under the laws of
the United States to have engaged in illegal transshipment of
apparel products from an Andean country, then the President
shall deny all benefits under the bill to such exporter, and to
any successors of such exporter, for a period of two years.
In cases where the President has requested a beneficiary
country to take action to prevent transshipment and the country
has failed to do so, the President shall reduce the quantities
of textile and apparel articles that may be imported into the
United States from that country by three times the quantity of
articles transshipped, to the extent that such action is
consistent with World Trade Organization (WTO) rules.
Reason for change
The Committee believes these hard-hitting transshipment
provisions will address concerns raised by the textile and
apparel industry that increasing trade with the Andean
countries could result in illegal transshipment of textile and
apparel products through the region.
Import relief actions
Present law
The import relief procedures and authorities under sections
201-204 of the Trade Act of 1974 apply to imports from ATPA
beneficiary countries, as they do to imports from other
countries. If ATPA imports cause serious injury, or threat of
such injury, to the domestic industry producing a like or
directly competitive article, section 204(d) of the ATPA
authorizes the President to suspend ATPA duty-free treatment
and proclaim a rate of duty or other relief measures.
Under NAFTA, the United States may invoke a special
safeguard provision at any time during the tariff phase-out
period if a NAFTA-origin textile or apparel good is being
imported in such increased quantities and under such conditions
as to cause ``serious damage, or actual threat thereof,'' to a
domestic industry producing a like or directly competitive
good. The President is authorized to either suspend further
duty reductions or increase the rate of duty to the NTR rate
for up to three years.
Explanation of provision
Under Section 3(E) normal safeguard authorities under ATPA
would apply to imports of all products except textiles and
apparel. A NAFTA equivalent safeguard authorities would apply
to imports of apparel products from ATPA countries, except
that, United States, if it applied a safeguard action, would
not be obligated to provide equivalent trade liberalizing
compensation to the exporting country.
Reason for change
The Committee believes that NAFTA equivalent safeguard
authority is appropriate in order to ensure that the domestic
apparel industry is not damaged by increased imports from the
Andean region.
Designation criteria
Present law
In determining whether to designate any country as an ATPA
beneficiary country, the President must take into account seven
mandatory and 12 discretionary criteria, which are listed in
section 203 of the ATPA.
Under Section 203 of the ATPA, the President shall not
designate any country a ATPA beneficiary country if:
(1) The country is a Communist country;
(2) The country has nationalized, expropriated,
imposed taxes or other exactions or otherwise seized
ownership or control of U.S. property (including
intellectual property), unless he determines that
prompt, adequate, and effective compensation has been
or is being made, or good faith negotiations to provide
such compensation are in progress, or the country is
otherwise taking steps to discharge its international
obligations, or a dispute over compensation has been
submitted to arbitration;
(3) The country fails to act in good faith in
recognizing as binding or in enforcing arbitral awards
in favor of U.S. citizens;
(4) The country affords ``reverse'' preferences to
developed countries and whether such treatment has or
is likely to have a significant adverse effect on U.S.
commerce;
(5) A government-owned entity in the country engages
in the broadcast of copyrighted material belonging to
U.S. copyright owners without their express consent or
the country fails to work toward the provision of
adequate and effective intellectual property rights;
(6) The country is not a signatory to an agreement
regarding the extradition of U.S. citizens;
(7) If the country has not or is not taking steps to
afford internationally recognized worker rights to
workers in the country;
In determining whether to designate a country as eligible
for ATPA benefits, the President shall take into account
(discretionary criteria):
(1) An expression by the country of its desire to be
designated;
(2) The economic conditions in the country, its
living standards, and any other appropriate economic
factors;
(3) The extent to which the country has assured the
United States it will provide equitable and reasonable
access to its markets and basic commodity resources;
(4) The degree to which the country follows accepted
rules of international trade under the World Trade
Organization;
(5) The degree to which the country uses export
subsidies or imposes export performance or local
content requirements which distort international trade;
(6) The degree to which the trade policies of the
country are contributing to the revitalization of the
region;
(7) The degree to which the country is undertaking
self-help measures to protect its own economic
development;
(8) Whether or not the country has taken or is taking
steps to afford to workers in that country (including
any designated zone in that country) internationally
recognized workers rights;
(9) The extent to which the country provides under
its law adequate and effective means for foreign
nationals to secure, exercise, and enforce exclusive
intellectual property rights;
(10) The extent to which the country prohibits its
nationals from engaging in the broadcast of copyrighted
material belonging to U.S. copyright owners without
their express consent;
(11) Whether such country has met the narcotics
cooperation certification criteria of the Foreign
Assistance Act of 1961 for eligibility for U.S.
assistance; and
(12) The extent to which the country is prepared to
cooperate with the United States in the administration
of the Act.
Under the ATPA the President is prohibited from designating
a country a beneficiary country if any of criteria (1)-(7)
apply to that country, subject to waiver if the President
determines that country designation will be in the U.S.
national economic or security interest. The waiver does not
apply to criteria (4) and (6). Under the ATPA criteria on (7)
is included as both mandatory and discretionary.
The President may withdraw or suspend beneficiary country
status or duty-free treatment on any article if he determines
the country should be barred from designation asa result of
changed circumstances. The President must submit a triennial report to
the Congress on the operation of the program. The report shall include
any evidence that the crop eradication and crop substitution efforts of
the beneficiary country are directly related to the effects of the
legislation
Explanation of provision
Section 3 provides that the President, in designating a
country as eligible for the enhanced ATPDEA benefits, shall
take into account the existing eligibility criteria established
under ATPA described above, as well as other appropriate
criteria, including: whether a country has demonstrated a
commitment to undertake its WTO obligations and participate in
negotiations toward the completion of the FTAA or comparable
trade agreement; the extent to which the country provides
intellectual property protection consistent with or greater
than that afforded under the Agreement on Trade-Related Aspects
of Intellectual Property Rights; the extent to which the
country provides internationally recognized worker rights;
whether the country has implemented its commitments to
eliminate the worst forms of child labor; the extent to which a
country has taken steps to become a party to and implement the
Inter-American Convention Against Corruption; and the extent to
which the country applies transparent, nondiscriminatory and
competitive procedures in government procurement equivalent to
those included in the WTO Agreement on Government Procurement
and otherwise contributes to efforts in international fora to
develop and implement international rules in transparency in
government procurement.
In evaluating a potential beneficiary's compliance with its
WTO obligations, the Committee expects the President to take
account the extent to which the country follows the rules on
customs valuation set forth in the WTO Customs Valuation
Agreement. With respect to intellectual property protection, it
is the intention of the conferees that the President will also
take into account the extent to which potential beneficiary
countries are providing or taking steps to provide protection
of intellectual property rights comparable to the protections
provided to the United States in bilateral intellectual
property agreements.
The Committee has serious concerns about the Government of
Colombia's compliance with the mandatory condition for
eligibility in Section 203(c)(2) relating to protections of
property and businesses owned by U.S. citizens. The Committee
urges the Government to resolve its outstanding disputes with
US corporations immediately. The Committee reminds the
Government of Colombia it is obligated, as a beneficiary of the
ATPA program, to fulfill its responsibility toward U.S.
corporations which have received favorable arbitral awards from
internationally recognized arbitration panels.
Unfortunately, the Committee is aware of several cases in
which the Colombian Government has ignored these obligations,
in clear violation of the ATPA. For example, despite a binding
arbitration award by an official tribunal of the Government of
Colombia to Nortel Networks, the Government of Colombia has not
paid Nortel. Similarly, in December 2000, TermoRio, a power
plant project which included Sithe Energies, received a $60.3
million award in a binding arbitration by a tribunal of
Colombian legal scholars under the auspices of the Centro de
Conciliacion y Arbitraje de la Camara de Comericio de
Barranquilla and the International Chamber of Commerce. The
Committee urges the Government of Colombia to comply with such
decisions and compensate Nortel, Sithe Energies and other U.S.
corporations appropriately in order to maintain its beneficiary
status under status ATPA.
Since April 1995, Colombia has applied a variable import
duty system, known as the ``price band'' system, on fourteen
basic agriculture products such as wheat, corn, and soybean
oil. An additional 147 commodities, considered substitutes or
related products, are subject to the price band system which
establishes ceiling, floor, and reference prices on imports.
The Committee's view is that the price band system is non-
transparent and easily manipulated as a protectionist device.
In early 2000, the United States reached agreement with
Colombia in the WTO that Colombia would delink wet pet food,
the only finished product in this system, from the price band
system. In implementing the eligibility criteria relating to
market access and implementation of WTO commitments, it is the
Committees intent that USTR insist that Colombia implement its
WTO commitment to remove pet food from the price band tariff
system and to apply the 20 percent common external tariff to
imported pet food.
With respect to whether beneficiary countries are following
established WTO rules, the Committee believes it is important
for Andean governments to provide transparent and non-
discriminatory regulatory procedures. Unfortunately, the
Committee knows of instances where regulatory policies in
Andean countries are opaque, unpredictable, and arbritarily
applied. As such, its is the Committee's view that Andean
countries that seek trade benefits should adopt, implement, and
apply transparent and non-discriminatory regulatory procedures.
The development of such procedures would help create regulatory
stability in the Andean region and thus provide mere certainty
to U.S. companies that would like to invest in these countries.
Section 4: Termination of Duty-free treatment
Present law
Duty-free treatment under the ATPA expires on December 4,
2001.
Explanation of provision
Duty-free treatment terminates under the Act on December
31, 2006.
Reason for change
A termination date one year after the scheduled conclusion
of negotiations to establish the Free Trade Area of the
Americas will provide a necessary transition period to phase in
reductions in duties pursuant to the larger hemispheric
agreement.
Section 5. Trade Benefits under the Caribbean Basin Trade Partnership
Act (CBTPA and the Africa Growth and Opportunity Act (AGOA)
Knit-to-shape apparel
Present law
Draft regulations issued by Customs to implement P.L. 106-
200 stipulate that knit-to-shape garments, because technically
they do not go through the fabric stage, are not eligible for
trade benefits under the act.
Explanation of provision
Sec. 5 of H.R. 3009 amends AGOA and CBTPA to clarify that
preferential treatment is provided to knit-to-shape apparel
articles assembled in beneficiary countries.
Reason for change
Although the Committee believes that the AGOA and CBTPA
language stated clearly that knit-to-shape apparel articles are
to receive benefits, draft Customs regulations do not so
provide. Accordingly, this provision gives effect to
Congressional intent.
Present law
Draft regulations issued by Customs to implement P.L. 106-
200 deny preferential access to garments that are cut both in
the United States and beneficiary countries, on the rationale
that the legislation does not specifically list this variation
in processing (the so-called ``hybrid cutting problem'').
Explanation of provision
Sec. 5 of H.R. 3009 adds new rules in CBTPA and AGOA to
provide preferential treatment for apparel articles that are
cut both in the United States and beneficiary countries.
Reason for change
Although the Committee believes that the CBTPA and AGOA
language stated clearly that articles that are both cut in the
United States and beneficiary countries, draft Customs
regulations do not so provide. Accordingly, this provision
gives effect to Congressional intent.
CBI knit cap
Present law
P.L. 106-200 extended duty-free benefits to knit apparel
made in CBI countries from regional fabric made with U.S. yarn
and to knit-to-shape apparel (except socks), up to a cap of
250,000,000 square meter equivalents (SMEs), with a growth rate
of 16 percent per year for first 3 years.
Explanation of provision
Sec. 5 of H.R. 2009 would raise this cap to the following
amounts: 250,000,000 SMEs for the 1-year period beginning
October 1, 2001; 500,000,000 SMEs for the 1-year period
beginning on October 1, 2002; 850,000,000 SMEs for the 1-year
period beginning on October 1, 2003; 970,000,000 SMEs in each
succeeding 1-year period through September 30, 2009.
Reason for change
Now that P.L. 106-200 has been in effect for one year, the
Committee believes it is appropriate to increase these caps.
CBI T-shirt cap
Present law
P.L. 106-200 extends benefits for an additional category of
CBI regional knit apparel products (T-shirts) up to a cap of
4.2 million dozen, growing 16 percent per year for the first 3
years.
Explanation of provision
Section 5 of H.R 3009 would raise this cap to the following
amounts: 4,200,000 dozen during the 1-year period beginning
October 1, 2001; 9,000,000 dozen for the 1-year period
beginning on October 1, 2002; 10,000,00 dozen for the 1-year
period beginning on October 1, 2003; 12,000,000 dozen in each
succeeding 1-year period through September 30, 2009.
Reason for change
Now that P.L. 106-200 has been in effect for one-year, the
Committee believes it is appropriate to increase these caps in
current law which will limit trade under the bill in the future
Present law
Section 112(b)(3) of the AGOA provides preferential
treatment for apparel made in beneficiary sub-Saharan African
countries from ``regional'' fabric (i.e., fabric formed in one
or more beneficiary countries) from yarn originating either in
the United States or one or more such countries. Section
112(b)(3)(B) establishes a special rule for lesser developed
beneficiary sub-Saharan African countries, which provides
preferential treatment, through September 30, 2004, for apparel
wholly assembled in one or more such countries regardless of
the origin of the fabric used to make the articles. Section
112(b)(3)(A) establishes a quantitative limit or ``cap'' on the
amount of apparel that may be imported under section 112(b)(3)
or section 112(b)(3)(B). This ``cap'' is 1.5 percent of the
aggregate square meter equivalents of all apparel articles
imported into the United States for the year that began October
1, 2000, and increases in equal increments to 3.5 percent for
the year beginning October 1, 2007.
Explanation of provision
Section 5 would clarify that apparel wholly assembled in
one or more beneficiary sub-Saharan African countries from
components knit-to-shape in one or more such countries from
U.S. or regional yarn is eligible for preferential treatment
under section 112(b)(3) of AGOA. Similarly, Section 5 would
clarify that apparel knit-to-shape and wholly assembled in one
or more lesser developed beneficiary sub-Saharan African
countries is eligible for preferential treatment, regardless of
the origin of the yarn used to make such articles. Section 5
also would increase the ``cap'' by changing the applicable
percentages from 1.5 percent to 3 percent in the year that
began October 1, 2000, and from 3.5 percent to 7 percent in the
year beginning October 1, 2007.
Present law
AGOA was supposed to provide duty-free, quota-free
treatment to sweaters knit in African beneficiary countries
from fine merino wool yarn, regardless of where the yarn was
formed. AGOA was supposed to provide duty-free, quota-free
treatment to sweaters knit in African beneficiary countries
from fine merino wool yarn, regardless of where the yarn was
formed. However, due to a drafting problem, the wrong diameter
was included, making it impossible to use the provision.
Explanation of provision
Section 5 corrects the yarn diameter in the AGOA
legislation so that sweaters knit to shape from merino wool of
a specific diameter are eligible.
Reason for change
This provision gives effect to Congressional intent in the
AGOA legislation.
Africa: Namibia and Botswana
Present Law
The GDBs of Botswana and Namibia exceed the LLDC limit of
$1500 and therefore these countries are not eligible to use
third country fabric for the transition period under the AGOA
regional fabric country cap.
Explanation of provision
Section 5 allows Namibia and Botswana to use third country
fabric for the transition period under the AGOA regional fabric
country cap.
Reason for change
Because, neither Botswana nor Namibia has regional fabric
making capacity, both countries need the ability to use third
country fabric for a limited period to assist in the
development of their indigenous textile and apparel industries.
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. 3009.
VOTES ON AMENDMENTS
A rollcall vote was conducted on the following amendment to
the Chairman's amendment in the nature of a substitute.
An amendment by Mr. Rangel, to the Chairman's amendment in
the nature of a substitute to add tuna or tuna products to the
list of items that are excluded from duty-free treatment under
the bill, was defeated by a rollcall vote of 17 yeas to 23
nays. The vote was as follows:
Representatives Yea Nay Present Representatives Yea Nay Present
Mr. Thomas..................... ........ X ......... Mr. Rangel....... X ........ .........
Mr. Crane...................... ........ X ......... Mr. Stark........ X ........ .........
Mr. Shaw....................... ........ X ......... Mr. Matsui...... X ........ .........
Mrs. Johnson................... ........ X ......... Mr. Coyne....... ........ X .........
Mr. Houghton................... ........ ........ ......... 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 ......... .................
MOTION TO REPORT THE BILL
The bill, H.R. 3009, was ordered favorably reported by
voice vote (with a quorum being present).
IV. BUDGET EFFECTS
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d)(2) of rule XIII of the Rules
of the House of Representatives, the following statement is
made concerning the effects on the budget of this bill, H.R.
3009 as reported: The Committee agrees with the estimate
prepared by CBO which is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that
enactment of H.R. 3009 would reduce customs duty receipts due
to lower tariffs imposed on goods from Andean countries.
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. 3009, the Andean
Trade Promotion and Drug Eradication 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. 3009--Andean Trade Promotion and Drug Eradication Act
Summary: H.R. 3009 would extend the period in which
preferential treatment provided to certain products of
countries under the Andean Trade Preference Act (ATPC) is in
effect. In addition, the bill would provide preferential
treatment under ATPA for additional articles, including certain
footwear and petroleum products. The bill also would extend
preferential treatment to knit-to-shape apparel articles
imported from countries under the Caribbean Basin Economic
Recovery Act (CBERA) and the African Growth and Opportunity Act
(AGOA).
The Congressional Budget Office estimates that enacting the
bill would reduce revenues by $41 million in 2002, by $247
million over the 2002-2006 period, and by $263 million over the
2002-2011 period. Because enacting H.R. 3009 would affect
receipts, pay-as-your-go procedures would apply. CBO has
determined that H.R. 3009 contains no 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: The estimated
budgetary impact of H.R. 3009 is shown in the following table.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-------------------------------------------------
2002 2003 2004 2005 2006
----------------------------------------------------------------------------------------------------------------
CHANGES IN REVENUES
Estimated Revenues -41 -47 -50 -53 -57
----------------------------------------------------------------------------------------------------------------
Basis of Estimate: ATPA is scheduled to expire on December
4, 2001. H.R. 3009 would extend the ATPA program until December
31, 2006. Several products of beneficiary countries would
continue to receive preferential duty treatment if the bill
were enacted. Based on information from the International Trade
Commission and other trade sources, CBO estimates that
extending the ATPA program would reduce revenues by $18 million
in 2002, by $119 million over the 2002-2006 period, and by $126
million over the 2002-2007 period.
Under current law, ATPA does not extend preferential
treatment to footwear that is ineligible for treatment under
the generalized system of preferences (GSP), petroleum and
certain products derived from petroleum, watches and watch
parts containing material that is the product of countries not
receiving normal trade relations (NTR) treatment, certain
sugars and molasses, and certain leather goods. H.R. 3009 would
allow the President to extend duty-free treatment to those
products. CBO expects that all imports of these products would
receive duty-free treatment.
Under current law, apparel articles that are the product or
manufacture of an ATPA beneficiary country are entitled to
preferential treatment. The bill would allow apparel articles
assembled from fabrics formed or knit-to-shape in the United
States and certain other apparel articles to receive duty-free
treatment. Apparel articles assembled from regional fabrics
would also receive preferential treatment if they do not exceed
certain percentages of imports on apparel articles. All
preferential treatment would expire after December 31, 2006.
Based on information from the International Trade Commission,
the Office of Textiles and Apparel in the Department of
Commerce, and private-sector sources, CBO estimates that if
enacted, the provisions that expand ATPA treatment to new
products would reduce revenues by $22 million in 2002, by $125
million over the 2002-2006 period, and by $132 million over the
2002-2011 period.
H.R. 3009 would extend preferential treatment to apparel
articles formed from components knit-to-shape in the United
States for beneficiary countries under CBERA and AGOA. It would
also increase the amount of certain apparel articles assembled
from regional fabrics that would receive preferential
treatment. Preferential treatment for the beneficiary countries
is scheduled to expire after September 30, 2008. Based on
information from the International Trade Commission, the Office
of Textiles and Apparel in the Department of Commerce and
private-sector sources, CBO estimates that if enacted, these
provisions would reduce revenues by $1 million in 2002, by $3
million over the 2002-2006 period, and by $5 million over the
2002-2008 period.
Pay-as-you-go-considerations: The Balanced Budget and
Emergency Deficit Control Act sets up procedures for
legislation affecting receipts or direct spending. The net
changes in governmental receipts that are subject to pay-as-
you-go procedures are shown in the following table. For the
purposes of enforcing pay-as-you-go procedures, only the
effects in the budget year and the succeeding four years are
counted.
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
---------------------------------------------------------------------------
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
Changes in receipts................. -41 -47 -50 -53 -57 -16 -1 0 0 0
Changes in outlays.................. Not applicable
----------------------------------------------------------------------------------------------------------------
Impact on State, local, and tribal governments: The bill
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal Revenues: Erin Whitaker.
Impact on State, Local, and Tribal Governments: Elyse Goldman.
Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Robertson 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, based on public hearing testimony and
information from the Administration, concluded that it is
appropriate and timely to consider the bill as reported.
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 the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
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 1 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):
ANDEAN TRADE PREFERENCE ACT
* * * * * * *
TITLE II--TRADE PREFERENCE FOR THE ANDEAN REGION
SEC. 201. SHORT TITLE.
This title may be cited as the ``Andean Trade Preference
Act''.
SEC. 202. AUTHORITY TO GRANT DUTY-FREE TREATMENT.
The President may proclaim duty-free treatment (or other
preferential treatment) for all eligible articles from any
beneficiary country in accordance with the provisions of this
title.
SEC. 203. BENEFICIARY COUNTRY.
(a) * * *
* * * * * * *
(e) Withdrawal or Suspension of Designation.--(1)(A) The
President may--
[(A)] (i) withdraw or suspend the designation of any
country as a beneficiary country, or
[(B)] (ii) withdraw, suspend, or limit the
application of duty-free treatment under this title to
any article of any country, if, after such designation,
the President determines that as a result of changed
circumstances such a country should be barred from
designation as a beneficiary country.
(B) The President may, after the requirements of paragraph
(2) have been met--
(i) withdraw or suspend the designation of any
country as an ATPDEA beneficiary country, or
(ii) withdraw, suspend, or limit the application of
preferential treatment under section 204(b)(1) or (3)
to any article of any country,
if, after such designation, the President determines that, as a
result of changed circumstances, the performance of such
country is not satisfactory under the criteria set forth in
section 204(b)(5)(B).
* * * * * * *
SEC. 204. ELIGIBLE ARTICLES.
(a) In General.--(1) Unless otherwise excluded from
eligibility (or otherwise provided for) by this title, the
duty-free treatment provided under this title shall apply to
any article which is the growth, product, or manufacture of a
beneficiary country if--
(A) * * *
* * * * * * *
(2) The Secretary of the Treasury shall prescribe such
regulations as may be necessary to carry out [subsection (a)]
paragraph (1) including, but not limited to, regulations
providing that, in order to be eligible for duty-free treatment
under this title, an article must be wholly the growth,
product, or manufacture of a beneficiary country, or must be a
new or different article of commerce which has been grown,
produced, or manufactured in the beneficiary country; but no
article or material of a beneficiary country shall be eligible
for such treatment by virtue of having merely undergone--
(A) simple combining or packaging operations, or
(B) mere dilution with water or mere dilution with
another substance that does not materially alter the
characteristics of the article.
* * * * * * *
[(b) Exceptions to Duty-Free Treatment.--The duty-free
treatment provided under this title shall not apply to--
[(1) textile and apparel articles which are subject
to textile agreements;
[(2) footwear not designated at the time of the
effective date of this Act as eligible for the purpose
of the generalized system of preferences under title V
of the Trade Act of 1974;
[(3) tuna, prepared or preserved in any manner, in
airtight containers;
[(4) petroleum, or any product derived from
petroleum, provided for in headings 2709 and 2710 of
the HTS;
[(5) watches and watch parts (including cases,
bracelets and straps), of whatever type including, but
not limited to, mechanical, quartz digital or quartz
analog, if such watches or watch parts contain any
material which is the product of any country with
respect to which HTS column 2 rates of duty apply;
[(6) articles to which reduced rates of duty apply
under subsection (c);
[(7) sugars, syrups, and molasses classified in
subheadings 1701.11.03, 1701.12.02, 1701.99.02,
1702.90.32, 1806.10.42, and 2106.90.12 of the HTS; or
[(8) rum and tafia classified in subheading
2208.40.00 of the HTS.
[(c) Duty Reductions for Certain Goods.--(1) Subject to
paragraph (2), the President shall proclaim reductions in the
rates of duty on handbags, luggage, flat goods, work gloves,
and leather wearing apparel that--
[(A) are the product of any beneficiary country; and
[(B) were not designated on August 5, 1983, as
eligible articles for purposes of the generalized
system of preferences under title V of the Trade Act of
1974.
[(2) The reduction required under paragraph (1) in the rate
of duty on any article shall--
[(A) result in a rate that is equal to 80 percent of
the rate of duty that applies to the article on
December 31, 1991, except that, subject to the
limitations in paragraph (3), the reduction may not
exceed 2.5 percent ad valorem; and
[(B) be implemented in 5 equal annual stages with the
first 1/5 of the aggregate reduction in the rate of
duty being applied to entries, or withdrawals from
warehouse for consumption, of the article on or after
January 1, 1992.
[(3) The reduction required under this subsection with
respect to the rate of duty on any article is in addition to
any reduction in the rate of duty on that article that may be
proclaimed by the President as being required or appropriate to
carry out any trade agreement entered into under the Uruguay
Round of trade negotiations; except that if the reduction so
proclaimed--
[(A) is less than 1.5 percent ad valorem, the
aggregate of such proclaimed reduction and the
reduction under this subsection may not exceed 3.5
percent ad valorem, or
[(B) is 1.5 percent ad valorem or greater, the
aggregate of such proclaimed reduction and the
reduction under this subsection may not exceed the
proclaimed reduction plus 1 percent ad valorem.]
(b) Exceptions and Special Rules.--
(1) Certain articles that are not import-sensitive.--
The President may proclaim duty-free treatment under
this title for any article described in subparagraph
(A), (B), (C), or (D) that is the growth, product, or
manufacture of an ATPDEA beneficiary country and that
meets the requirements of this section, if the
President determines that such article is not import-
sensitive in the context of imports from ATPDEA
beneficiary countries:
(A) Footwear not designated at the time of
the effective date of this Act as eligible for
the purpose of the generalized system of
preferences under title V of the Trade Act of
1974.
(B) Petroleum, or any product derived from
petroleum, provided for in headings 2709 and
2710 of the HTS.
(C) Watches and watch parts (including cases,
bracelets and straps), of whatever type
including, but not limited to, mechanical,
quartz digital or quartz analog, if such
watches or watch parts contain any material
which is the product of any country with
respect to which HTS column 2 rates of duty
apply.
(D) Handbags, luggage, flat goods, work
gloves, and leather wearing apparel that were
not designated on August 5, 1983, as eligible
articles for purposes of the generalized system
of preferences under title V of the Trade Act
of 1974.
(2) Exclusions.--Subject to paragraph (3), duty-free
treatment under this title may not be extended to--
(A) textiles and apparel articles which were
not eligible articles for purposes of this
title on January 1, 1994, as this title was in
effect on that date;
(B) rum and tafia classified in subheading
2208.40 of the HTS; or
(C) sugars, syrups, and sugar-containing
products subject to over-quota duty rates under
applicable tariff-rate quotas.
(3) Apparel articles.--
(A) In general.--Apparel articles that are
imported directly into the customs territory of
the United States from an ATPDEA beneficiary
country shall enter the United States free of
duty and free of any quantitative restrictions,
limitations, or consultation levels, but only
if such articles are described in subparagraph
(B).
(B) Covered articles.--The apparel articles
referred to in subparagraph (A) are the
following:
(i) Apparel articles assembled from
products of the united states and
atpdea beneficiary countries or
products not available in commercial
quantities.--Apparel articles sewn or
otherwise assembled in 1 or more ATPDEA
beneficiary countries, or the United
States, or both, exclusively from any
one or any combination of the
following:
(I) Fabrics or fabric
components formed, or
components knit-to-shape, in
the United States, from yarns
formed in the United States or
1 or more ATPDEA beneficiary
countries (including fabrics
not formed from yarns, if such
fabrics are classifiable under
heading 5602 or 5603 of the HTS
and are formed in the United
States).
(II) Fabrics or fabric
components formed or components
knit-to-shape, in 1 or more
ATPDEA beneficiary countries,
from yarns formed in 1 or more
ATPDEA beneficiary countries,
if such fabrics (including
fabrics not formed from yarns,
if such fabrics are
classifiable under heading 5602
or 5603 of the HTS and are
formed in 1 or more ATPDEA
beneficiary countries) or
components are in chief weight
of llama or alpaca.
(III) Fabrics or yarn that is
not formed in the United States
or in one or more ATPDEA
beneficiary countries, to the
extent that apparel articles of
such fabrics or yarn would be
eligible for preferential
treatment, without regard to
the source of the fabrics or
yarn, under Annex 401 of the
NAFTA.
(ii) Additional fabrics.--At the
request of any interested party, the
President is authorized to proclaim
additional fabrics and yarns as
eligible for preferential treatment
under clause (i)(III) if--
(I) the President determines
that such fabrics or yarns
cannot be supplied by the
domestic industry in commercial
quantities in a timely manner;
(II) the President has
obtained advice regarding the
proposed action from the
appropriate advisory committee
established under section 135
of the Trade Act of 1974 (19
U.S.C. 2155) and the United
States International Trade
Commission;
(III) within 60 days after
the request, the President has
submitted a report to the
Committee on Ways and Means of
the House of Representatives
and the Committee on Finance of
the Senate that sets forth the
action proposed to be
proclaimed and the reasons for
such action, and the advice
obtained under subclause (II);
(IV) a period of 60 calendar
days, beginning with the first
day on which the President has
met the requirements of
subclause (III), has expired;
and
(V) the President has
consulted with such committees
regarding the proposed action
during the period referred to
in subclause (III).
(iii) Apparel articles assembled in 1
or more atpdea beneficiary countries
from regional fabrics or regional
components.--(I) Subject to the
limitation set forth in subclause (II),
apparel articles sewn or otherwise
assembled in 1 or more ATPDEA
beneficiary countries from fabrics or
from fabric components formed or from
components knit-to-shape, in 1 or more
ATPDEA beneficiary countries, from
yarns formed in the United States or 1
or more ATPDEA beneficiary countries
(including fabrics not formed from
yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS
and are formed in 1 or more ATPDEA
beneficiary countries), whether or not
the apparel articles are also made from
any of the fabrics, fabric components
formed, or components knit-to-shape
described in clause (i).
(II) The preferential treatment
referred to in subclause (I) shall be
extended in the 1-year period beginning
December 1, 2001, and in each of the 5
succeeding 1-year periods, to imports
of apparel articles in an amount not to
exceed the applicable percentage of the
aggregate square meter equivalents of
all apparel articles imported into the
United States in the preceding 12-month
period for which data are available.
(III) For purposes of subclause (II),
the term ``applicable percentage''
means 3 percent for the 1-year period
beginning December 1, 2001, increased
in each of the 5 succeeding 1-year
periods by equal increments, so that
for the period beginning December 1,
2005, the applicable percentage does
not exceed 6 percent.
(iv) Handloomed, handmade, and
folklore articles.--A handloomed,
handmade, or folklore article of an
ATPDEA beneficiary country identified
under subparagraph (C) that is
certified as such by the competent
authority of such beneficiary country.
(v) Special rules.--
(I) Exception for findings
and trimmings.--An article
otherwise eligible for
preferential treatment under
this paragraph shall not be
ineligible for such treatment
because the article contains
findings or trimmings of
foreign origin, if such
findings and trimmings do not
exceed 25 percent of the cost
of the components of the
assembled product. Examples of
findings and trimmings are
sewing thread, hooks and eyes,
snaps, buttons, ``bow buds'',
decorative lace, trim, elastic
strips, zippers, including
zipper tapes and labels, and
other similar products.
(II) Certain interlining.--
(aa) An article otherwise
eligible for preferential
treatment under this paragraph
shall not be ineligible for
such treatment because the
article contains certain
interlinings of foreign origin,
if the value of such
interlinings (and any findings
and trimmings) does not exceed
25 percent of the cost of the
components of the assembled
article.
(bb) Interlinings eligible
for the treatment described in
division (aa) include only a
chest type plate, ``hymo''
piece, or ``sleeve header'', of
woven or weft-inserted warp
knit construction and of coarse
animal hair or man-made
filaments.
(cc) The treatment described
in this subclause shall
terminate if the President
makes a determination that
United States manufacturers are
producing such interlinings in
the United States in commercial
quantities.
(III) De minimis rule.--An
article that would otherwise be
ineligible for preferential
treatment under this
subparagraph because the
article contains fibers or
yarns not wholly formed in the
United States or in one or more
ATPDEA beneficiary countries
shall not be ineligible for
such treatment if the total
weight of all such fibers or
yarns is not more than 7
percent of the total weight of
the good.
(C) Handloomed, handmade, and folklore
articles.--For purposes of subparagraph
(B)(iv), the President shall consult with
representatives of the ATPDEA beneficiary
countries concerned for the purpose of
identifying particular textile and apparel
goods that are mutually agreed upon as being
handloomed, handmade, or folklore goods of a
kind described in section 2.3(a), (b), or (c)
of the Annex or Appendix 3.1.B.11 of the Annex.
(D) Penalties for transshipment.--
(i) Penalties for exporters.--If the
President determines, based on
sufficient evidence, that an exporter
has engaged in transshipment with
respect to apparel articles from an
ATPDEA beneficiary country, then the
President shall deny all benefits under
this title to such exporter, and any
successor of such exporter, for a
period of 2 years.
(ii) Penalties for countries.--
Whenever the President finds, based on
sufficient evidence, that transshipment
has occurred, the President shall
request that the ATPDEA beneficiary
country or countries through whose
territory the transshipment has
occurred take all necessary and
appropriate actions to prevent such
transshipment. If the President
determines that a country is not taking
such actions, the President shall
reduce the quantities of apparel
articles that may be imported into the
United States from such country by the
quantity of the transshipped articles
multiplied by 3, to the extent
consistent with the obligations of the
United States under the WTO.
(iii) Transshipment described.--
Transshipment within the meaning of
this subparagraph has occurred when
preferential treatment under
subparagraph (A) has been claimed for
an apparel article on the basis of
material false information concerning
the country of origin, manufacture,
processing, or assembly of the article
or any of its components. For purposes
of this clause, false information is
material if disclosure of the true
information would mean or would have
meant that the article is or was
ineligible for preferential treatment
under subparagraph (A).
(E) Bilateral emergency actions.--
(i) In general.--The President may
take bilateral emergency tariff actions
of a kind described in section 4 of the
Annex with respect to any apparel
article imported from an ATPDEA
beneficiary country if the application
of tariff treatment under subparagraph
(A) to such article results in
conditions that would be cause for the
taking of such actions under such
section 4 with respect to a like
article described in the same 8-digit
subheading of the HTS that is imported
from Mexico.
(ii) Rules relating to bilateral
emergency action.--For purposes of
applying bilateral emergency action
under this subparagraph--
(I) the requirements of
paragraph (5) of section 4 of
the Annex (relating to
providing compensation) shall
not apply;
(II) the term ``transition
period'' in section 4 of the
Annex shall mean the period
ending December 31, 2006; and
(III) the requirements to
consult specified in section 4
of the Annex shall be treated
as satisfied if the President
requests consultations with the
ATPDEA beneficiary country in
question and the country does
not agree to consult within the
time period specified under
section 4.
(4) Customs procedures.--
(A) In general.--
(i) Regulations.--Any importer that
claims preferential treatment under
paragraph (1) or (3) shall comply with
customs procedures similar in all
material respects to the requirements
of Article 502(1) of the NAFTA as
implemented pursuant to United
Stateslaw, in accordance with regulations promulgated by the Secretary
of the Treasury.
(ii) Determination.--
(I) In general.--In order to
qualify for the preferential
treatment under paragraph (1)
or (3) and for a Certificate of
Origin to be valid with respect
to any article for which such
treatment is claimed, there
shall be in effect a
determination by the President
that each country described in
subclause (II)--
(aa) has implemented
and follows; or
(bb) is making
substantial progress
toward implementing and
following,
procedures and requirements
similar in all material
respects to the relevant
procedures and requirements
under chapter 5 of the NAFTA.
(II) Country described.--A
country is described in this
subclause if it is an ATPDEA
beneficiary country--
(aa) from which the
article is exported; or
(bb) in which
materials used in the
production of the
article originate or in
which the article or
such materials undergo
production that
contributes to a claim
that the article is
eligible for
preferential treatment
under paragraph (1) or
(3).
(B) Certificate of origin.--The Certificate
of Origin that otherwise would be required
pursuant to the provisions of subparagraph (A)
shall not be required in the case of an article
imported under paragraph (1) or (3) if such
Certificate of Origin would not be required
under Article 503 of the NAFTA (as implemented
pursuant to United States law), if the article
were imported from Mexico.
(5) Definitions.--In this subsection--
(A) Annex.--The term ``the Annex'' means
Annex 300-B of the NAFTA.
(B) ATPDEA beneficiary country.--The term
``ATPDEA beneficiary country'' means any
``beneficiary country'', as defined in section
203(a)(1) of this title, which the President
designates as an ATPDEA beneficiary country,
taking into account the criteria contained in
subsections (c) and (d) of section 203 and
other appropriate criteria, including the
following:
(i) Whether the beneficiary country
has demonstrated a commitment to--
(I) undertake its obligations
under the WTO, including those
agreements listed in section
101(d) of the Uruguay Round
Agreements Act, on or ahead of
schedule; and
(II) participate in
negotiations toward the
completion of the FTAA or
another free trade agreement.
(ii) The extent to which the country
provides protection of intellectual
property rights consistent with or
greater than the protection afforded
under the Agreement on Trade-Related
Aspects of Intellectual Property Rights
described in section 101(d)(15) of the
Uruguay Round Agreements Act.
(iii) The extent to which the country
provides internationally recognized
worker rights, including--
(I) the right of association;
(II) the right to organize
and bargain collectively;
(III) a prohibition on the
use of any form of forced or
compulsory labor;
(IV) a minimum age for the
employment of children; and
(V) acceptable conditions of
work with respect to minimum
wages, hours of work, and
occupational safety and health;
(iv) Whether the country has
implemented its commitments to
eliminate the worst forms of child
labor, as defined in section 507(6) of
the Trade Act of 1974.
(v) The extent to which the country
has met the counternarcotics
certification criteria set forth in
section 490 of the Foreign Assistance
Act of 1961 (22 U.S.C. 2291j) for
eligibility for United States
assistance.
(vi) The extent to which the country
has taken steps to become a party to
and implements the Inter-American
Convention Against Corruption.
(vii) The extent to which the
country--
(I) applies transparent,
nondiscriminatory, and
competitive procedures in
government procurement
equivalent to those contained
in the Agreement on Government
Procurement described in
section 101(d)(17) of the
Uruguay Round Agreements Act;
and
(II) contributes to efforts
in international fora to
develop and implement
international rules in
transparency in government
procurement.
(C) NAFTA.--The term ``NAFTA'' means the
North American Free Trade Agreement entered
into between the United States, Mexico, and
Canada on December 17, 1992.
(D) WTO.--The term ``WTO'' has the meaning
given that term in section 2 of the Uruguay
Round Agreements Act (19 U.S.C. 3501).
(E) ATPDEA.--The term ``ATPDEA'' means the
Andean Trade Promotion and Drug Eradication
Act.
[(d)] (c) Suspension of Duty-Free Treatment.--(1) The
President may by proclamation suspend the duty-free treatment
provided by this title with respect to any eligible article and
may proclaim a duty rate for such article if such action is
proclaimed under chapter 1 of title II of the Trade Act of 1974
or section 232 of the Trade Expansion Act of 1962.
* * * * * * *
[(e)] (d) Emergency Relief With Respect to Perishable
Products.--(1) If a petition is filed with the United States
International Trade Commission pursuant to the provisions of
section 201 of the Trade Act of 1974 regarding a perishable
product and alleging injury from imports from beneficiary
countries, then the petition may also be filed with the
Secretary of Agriculture with a request that emergency relief
be granted pursuant to paragraph (3) of this subsection with
respect to such article.
* * * * * * *
[(f)] (e) Section 22 Fees.--No proclamation issued pursuant
to this title shall affect fees imposed pursuant to section 22
of the Agricultural Adjustment Act of 1933 (7 U.S.C. 624).
[(g)] (f) Tariff-Rate Quotas.--No quantity of an agricultural
product subject to a tariff-rate quota that exceeds the in-
quota quantity shall be eligible for duty-free treatment under
this Act.
* * * * * * *
[SEC. 208. EFFECTIVE DATE AND TERMINATION OF DUTY-FREE TREATMENT.
[(a) Effective Date.--This title shall take effect on the
date of enactment.
[(b) Termination of Duty-Free Treatment.--No duty-free
treatment extended to beneficiary countries under this title
shall remain in effect 10 years after the date of the enactment
of this title.]
SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.
No duty-free treatment or other preferential treatment
extended to beneficiary countries under this title shall remain
in effect after December 31, 2006.
----------
SECTION 213 OF THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT
SEC. 213. ELIGIBLE ARTICLES.
(a) * * *
(b) Import-Sensitive Articles.--
(1) In general.--Subject to paragraphs (2) through
(5), the duty-free treatment provided under this title
does not apply to--
(A) * * *
* * * * * * *
(2) Transition period treatment of certain textile
and apparel articles.--
(A) Articles covered.--During the transition
period, the preferential treatment described in
subparagraph (B) shall apply to the following
articles:
[(i) Apparel articles assembled in
one or more cbtpa beneficiary
countries.--Apparel articles assembled
in one or more CBTPA beneficiary
countries from fabrics wholly formed
and cut in the United States, from
yarns wholly formed in the United
States, (including fabrics not formed
from yarns, if such fabrics are
classifiable under heading 5602 or5603
of the HTS and are wholly formed and cut in the United States) that
are--
(i) Apparel articles assembled in one
or more cbtpa beneficiary countries.--
Apparel articles sewn or otherwise
assembled in one or more CBTPA
beneficiary countries from fabrics
wholly formed and cut, or from
components knit-to-shape, in the United
States from yarns wholly formed in the
United States, (including fabrics not
formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603
of the HTS and are wholly formed and
cut in the United States) that are--
(I) * * *
* * * * * * *
[(ii) Apparel articles cut and
assembled in one or more cbtpa
beneficiary countries.--Apparel
articles cut in one or more CBTPA
beneficiary countries from fabric
wholly formed in the United States from
yarns wholly formed in the United
States (including fabrics not formed
from yarns, if such fabrics are
classifiable under heading 5602 or 5603
of the HTS and are wholly formed in the
United States), if such articles are
assembled in one or more such countries
with thread formed in the United
States.
(ii) Other apparel articles assembled
in one or more cbtpa beneficiary
countries.--Apparel articles sewn or
otherwise assembled in one or more
CBTPA beneficiary countries with thread
formed in the United States from
fabrics wholly formed in the United
States and cut in one or more CBTPA
beneficiary countries from yarns wholly
formed in the United States, or from
components knit-to-shape in the United
States from yarns wholly formed in the
United States, or both (including
fabrics not formed from yarns, if such
fabrics are classifiable under heading
5602 or 5603 of the HTS and are wholly
formed in the United States).
(iii) Certain knit apparel
articles.--(I) * * *
[(II) The amount referred to in
subclause (I) is--
[(aa) 250,000,000 square
meter equivalents during the 1-
year period beginning on
October 1, 2000, increased by
16 percent, compounded
annually, in each succeeding 1-
year period through September
30, 2004; and
[(bb) in each 1-year period
thereafter through September
30, 2008, the amount in effect
for the 1-year period ending on
September 30, 2004, or such
other amount as may be provided
by law.
(II) The amount referred to in
subclause (I) is as follows:
(aa) 290,000,000 square meter
equivalents during the 1-year
period beginning on October 1,
2001.
(bb) 500,000,000 square meter
equivalents during the 1-year
period beginning on October 1,
2002.
(cc) 850,000,000 square meter
equivalents during the 1-year
period beginning on October 1,
2003.
(dd) 970,000,000 square meter
equivalents in each succeeding
1-year period through September
30, 2008.
* * * * * * *
[(IV) the amount referred to in
subclause (III) is--
[(aa) 4,200,000 dozen during
the 1-year period beginning on
October 1, 2000, increased by
16 percent, compounded
annually, in each succeeding 1-
year period through September
30, 2004; and
[(bb) in each 1-year period
thereafter, the amount in
effect for the 1-year period
ending on September 30, 2004,
or such other amount as may be
provided by law.
(IV) The amount referred to in
subclause (III) is as follows:
(aa) 4,872,000 dozen during
the 1-year period beginning on
October 1, 2001.
(bb) 9,000,000 dozen during
the 1-year period beginning on
October 1, 2002.
(cc) 10,000,000 dozen during
the 1-year period beginning on
October 1, 2003.
(dd) 12,000,000 dozen in each
succeeding 1-year period
through September 30, 2008.
* * * * * * *
(ix) Apparel articles assembled in
one or more cbtpa beneficiary countries
from united states and cbtpa
beneficiary country components.--
Apparel articles sewn or otherwise
assembled in one or more CBTPA
beneficiary countries with thread
formed in the United States from
components cut in the United States and
in one or more CBTPA beneficiary
countries from fabric wholly formed in
the United States from yarns wholly
formed in the United States, or from
components knit-to-shape in the United
States and one or more CBTPA
beneficiary countries from yarns wholly
formed in the United States, or both
(including fabrics not formed from
yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS).
* * * * * * *
SECTION 112 OF THE AFRICAN GROWTH AND OPPORTUNITY ACT
SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.
(a) * * *
(b) Products Covered.--The preferential treatment described
in subsection (a) shall apply only to the following textile and
apparel products:
[(1) Apparel articles assembled in beneficiary sub-
saharan african countries.--Apparel articles assembled
in one or more beneficiary sub-Saharan African
countries from fabrics wholly formed and cut in the
United States, from yarns wholly formed in the United
States, (including fabrics not formed from yarns, if
such fabrics are classifiable under heading 5602 or
5603 of the Harmonized Tariff Schedule of the United
States and are wholly formed and cut in the United
States)
that are--]
(1) Apparel articles assembled in one or more
beneficiary sub-saharan african countries.--Apparel
articles sewn or otherwise assembled in one or more
beneficiary sub-Saharan African countries from fabrics
wholly formed and cut, or from components knit-to-
shape, in the United States from yarns wholly formed in
the United States, (including fabrics not formed from
yarns, if such fabrics are classifiable under heading
5602 or 5603 of the HTS and are wholly formed and cut
in the United States) that are--
(A) * * *
* * * * * * *
[(2) Apparel articles cut and assembled in
beneficiary sub-saharan african countries.--Apparel
articles cut in one or more beneficiary sub-Saharan
African countries from fabric wholly formed in the
United States from yarns wholly formed in the United
States, (including fabrics not formed from yarns, if
such fabrics are classifiable under heading 5602 or
5603 of the Harmonized Tariff Schedule of the United
States and are wholly formed in the United States) if
such articles are assembled in one or more beneficiary
sub-Saharan African countries with thread formed in the
United States.
[(3) Apparel articles assembled from regional and
other fabric.--Apparel articles wholly assembled in one
or more beneficiary sub-Saharan African countries from
fabric wholly formed in one or more beneficiary sub-
Saharan African countries from yarn originating either
in the United States or one or more beneficiary sub-
Saharan African countries (including fabrics not formed
from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the Harmonized Tariff Schedule
of the United States and are wholly formed and cut in
one or more beneficiary sub-Saharan African countries),
subject to the following:]
(2) Other apparel articles assembled in one or more
beneficiary sub-saharan african countries.--Apparel
articles sewn or otherwise assembled in one or more
beneficiary sub-Saharan African countries with thread
formed in the United States from fabrics wholly formed
in the United States and cut in one or more beneficiary
sub-Saharan African countries from yarns wholly formed
in the United States, or from components knit-to-shape
in the United States from yarns wholly formed in the
United States, or both (including fabrics not formed
from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are wholly formed
in the United States).
(3) Apparel articles from regional fabric or yarns.--
Apparel articles wholly assembled in one or more
beneficiary sub-Saharan African countries from fabric
wholly formed in one or more beneficiary sub-Saharan
African countries from yarns originating either in the
United States or one or more beneficiary sub-Saharan
African countries (including fabrics not formed from
yarns, if such fabrics are classified under heading
5602 or 5603 of the HTS and are wholly formed in one or
more beneficiary sub-Saharan African countries), or
from components knit-to-shape in one or more
beneficiary sub-Saharan African countries from yarns
originating either in the United States or one or more
beneficiary sub-Saharan African countries, or apparel
articles wholly formed on seamless knitting machines in
a beneficiary sub-Saharan African country from yarns
originating either in the United States or one or more
beneficiary sub-Saharan African countries, subject to
the following:
(A) Limitations on benefits.--
(i) * * *
* * * * * * *
(ii) Applicable percentage.--For
purposes of this subparagraph, the term
``applicable percentage'' means [1.5] 3
percent for the 1-year period beginning
October 1, 2000, increased in each of
the seven succeeding 1-year periods by
equal increments, so that for the
period beginning October 1, 2007, the
applicable percentage does not exceed
[3.5] 7 percent.
[(B) Special rule for lesser developed
countries.--
[(i) In general.--Subject to
subparagraph (A), preferential
treatment shall be extended through
September 30, 2004, for apparel
articles wholly assembled in one or
more lesser developed beneficiary sub-
Saharan African countries regardless of
the country of origin of the fabric
used to make such articles.
[(ii) Lesser developed beneficiary
sub-saharan african country.--For
purposes of this subparagraph the term
``lesser developed beneficiary sub-
Saharan African country'' means a
beneficiary sub-Saharan African country
that had a per capita gross national
product of less than $1,500 a year in
1998, as measured by the World Bank.]
(B) Special rules for lesser developed
countries.--
(i) In general.--Subject to
subparagraph (A), preferential
treatment under this paragraph shall be
extended through September 30, 2004,
for apparel articles wholly assembled,
or knit-to-shape and wholly assembled,
or both, in one or more lesser
developed beneficiary sub-Saharan
African countries regardless of the
country of origin of the fabric or the
yarn used to make such articles.
(ii) Lesser developed beneficiary
sub-saharan african country.--For
purposes of clause (i), the term
``lesser developed beneficiary sub-
Saharan African country'' means--
(I) a beneficiary sub-Saharan
African country that had a per
capita gross national product
of less than $1,500 in 1998, as
measured by the International
Bank for Reconstruction and
Development;
(II) Botswana; and
(III) Namibia.
* * * * * * *
(4) Sweaters knit-to-shape from cashmere or merino
wool.--
(A) * * *
(B) Merino wool.--Sweaters, 50 percent or
more by weight of wool measuring [18.5] 21.5
microns in diameter or finer, knit-to-shape in
one or more beneficiary sub-Saharan African
countries.
* * * * * * *
(7) Apparel articles assembled in one or more
beneficiary sub-saharan african countries from united
states and beneficiary sub-saharan african country
components.--Apparel articles sewn or otherwise
assembled in one or more beneficiary sub-Saharan
African countries with thread formed in the United
States from components cut in the United States and one
or more beneficiary sub-Saharan African countries from
fabric wholly formed in the United States from yarns
wholly formed in the United States, or from components
knit-to-shape in the United States and one or more
beneficiary sub-Saharan African countries from yarns
wholly formed in the United States, or both (including
fabrics not formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the HTS).
* * * * * * *
VII. ADDITIONAL VIEWS
As a co-chair of the African Trade and Investment Caucus,
and as an ardent supporter of the African Growth and
Opportunity Act (AGOA), which was signed into law just over a
year ago, I was very pleased to see the Committee take action
to address some of the concerns raised regarding the
implementation of AGOA.
The new provisions reported from the Committee would
clarify and narrowly expand the trade opportunities for sub-
Saharan Africa countries under AGOA, and are designed to
encourage more investment in the region, particularly in the
apparel sector. I along with Representatives Rangel, Royce,
Crane, Payne, and McDermott, were in the process of developing
AGOA II legislation to address these and other issues.
AGOA is the most significant U.S. policy statement to date
on the U.S. commitment to assist the countries of sub-Saharan
Africa (SSA) with their efforts to stimulate economic growth
and development in the region. The bill was many years in the
making, and enjoyed broad, bi-partisan support.
Increased international trade and investment is a key
component leading to economic development and growth in sub-
Saharan Africa. Economic growth is an integral element of any
sub-Saharan strategy to overcome the many and severe social,
health, political, environmental and other challenges. I have
recently returned from a trip to the region and was pleased to
find AGOA has demonstrated initial success in promoting greater
commercial activity between the United States and sub-Saharan
Africa. According to the Office of the United States Trade
Representative, AGOA has resulted in nearly $4 billion dollars
in expanded trade and investment in the region and has spurred
and bolstered economic reform in several African countries.
Now that the bill is law, the U.S. must ensure that the
objective of stimulating regional economic development and
growth is achieved. The African Trade and Investment Caucus
(ATIC) has been following closely the Administration's efforts
to implement this bill as well as the efforts of sub-Saharan
countries to comply with the bill's eligibility criteria. Two
major issues have come to our attention. First, sub-Saharan
beneficiary countries need additional assistance from the
United States to meet the stringent customs and visa
requirements in the legislation. Currently, only a handful of
SSA countries designated as beneficiaries have been certified
as eligible to ship apparel products since the effective date
of October 1, 2000. Many of the countries are willing to
upgrade their customs systems to comply with the law; however
they need additional technical assistance from the United
States to undertake this important task.
Second, we need to ensure that the authorized resources
under the bill are available to assist U.S. companies and
African companies in realizing the opportunities created by
AGOA. Many U.S. and African companies are unaware that AGOA
provides preferential treatment to many non-apparel items.
To make this information known and to spur participation of
U.S. and African businesses in the AGOA program full support
for AGOA-related programs is needed. The first step is ensuring
that each agency with responsibility for AGOA has adequate
personnel to carry out its duties. This is a priority for the
Office of African Affairs at the Office of the U.S. Trade
Representative in particular. Second, it is important for the
Administration to make available the resources to provide
technical assistance for AGOA-related programs.
In Committee, I offered an amendment that would have
established a technical assistance fund designed to improve the
trade capacity of sub-Saharan countries that would have ensured
funding for the technical assistance authorized in Section
122(b) of AGOA to promote economic reforms and development in
sub-Saharan Africa. Building trade capacity is essential for
sub-Saharan countries to fully utilize the benefits provided
under AGOA. While the amendment was not in order, I appreciated
the commitments given by yourselves and Ambassador Zoellick to
continue to work on ensuring resources to:
Improve the trade capacity of sub-Saharan
countries;
Improve the ability of sub-Saharan countries
to comply with the eligibility requirements of AGOA;
Ensure proper implementation of AGOA
provisions in beneficiary countries;
Promote economic reform; and
Improve capacity of WTO member-countries
from the sub-Saharan region to implement and negotiate
WTO agreements.
Without the appropriate resources, AGOA will fail to
achieve its important goals; and the United States will have
reneged on its commitment to the poorest region of the world.
William J. Jefferson.
VIII. DISSENTING VIEWS
It is with great regret that we oppose H.R. 3009, the
Andean Trade Promotion and Drug Eradication Act.
We believe that in the long term, an indispensable way we
can assist the Andean region and help combat the scourge of
illegal drugs is by promoting economic development and growth
in these countries. As observed when we discussed benefits to
the Caribbean countries and the African countries, the path and
strategies that have proven the most successful are those that
provide a framework to ensure that development benefits the
greatest number of people in the entire hemispheric region.
Assisting economic development abroad must take into full
account the needs of, and outcomes for, workers and businesses
in the United States. In crafting unilateral preference
programs like the existing Andean Trade Preferences Act (ATPA),
and the Africa and Caribbean programs, Congress has sought to
match the strengths of businesses and workers in the United
States with the strengths of businesses and workers in the
region.
And that is the approach we had hoped to take with respect
to enhancement of the ATPA program. In fact, that is the
direction in which we had been headed. For the last several
months, the majority and the minority staff have been working
on an ATPA renewal and expansion bill that would have expanded
the trade benefits under the ATPA in a manner that would ensure
benefits to the greatest number of people in the region and the
United States, and that would have created the broadest
coalition of support in the Congress.
The majority chose to abruptly end those discussions,
however. Without any prior notice or consultation, the Chairman
of the Trade Subcommittee introduced H.R. 3009, and Chairman
Thomas scheduled a markup for about 36 hours later. The bill
that they introduced does reflect several items from our
discussions. But, the bill's approach to many key issues is not
satisfactory. The bill does not effectively build upon the
complementarities between the U.S. and Andean textile and
apparel industries, rather, it would make them competitors on
unequal terms.
Additionally, by bringing this bill up without any notice,
Congress and the groups affected have been denied the
opportunity to take one last look at other key concerns, the
most serious of which is the very real issue of labor rights
abuses in the Andean countries, particularly the murder with
impunity of labor leaders in Colombia. The bill reported by the
Committee does require the Administration to evaluate the
extent to which each Andean country adheres to core workers
rights in making the determination as to which countries are
eligible for enhanced benefits. However, this Administration
has not rigorously applied this eligibility criteria in the
past. We need a clear understanding that it will do so in this
case, with particular attention paid to the situation in
Colombia.
There are other important issues that were left unresolved
because of the haste with which the Majority chose to bring
this legislation to Committee. These include issues related to
treatment of U.S. companies, such as Nortel, in Colombia, and
the continued denial of non-discriminatory market access to
U.S. goods in Andean markets.
We want to be clear. We are not opposing this bill only
because of the fundamental process flaws that preceded this
mark-up. Those flaws are troubling. But, those flaws also led
to a bill that is flawed on policy. This situation is deeply
regrettable, because we think with more time an agreement that
advanced everyone's interests could have been achieved. We
actively favor that result.
Sander Levin.
Michael R. McNulty.
John Lewis.
Karen L. Thurman.
Jerry Kleczka.
Richard E. Neal.