[House Report 107-624]
[From the U.S. Government Publishing Office]
107th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 107-624
======================================================================
TRADE ACT OF 2002
_______
July 26, 2002.--Ordered to be printed
_______
Mr. Thomas, from the committee of conference, submitted the following
CONFERENCE REPORT
[To accompany H.R. 3009]
The Committee of conference on the disagreeing votes of
the two Houses on the amendment of the Senate to 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 met, after full and free conference, have
agreed to recommend and do recommend to their respective Houses
as follows:
That the House recede from its disagreement to the
amendment of the Senate and agree to the same with an amendment
as follows:
In lieu of the matter proposed to be inserted by the
Senate amendment, insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Trade Act of 2002''.
SEC. 2. ORGANIZATION OF ACT INTO DIVISIONS; TABLE OF CONTENTS.
(a) Divisions.--This Act is organized into 5 divisions as
follows:
(1) Division a.--Trade Adjustment Assistance.
(2) Division b.--Bipartisan Trade Promotion
Authority.
(3) Division c.--Andean Trade Preference Act.
(4) Division d.--Extension of Certain Preferential
Trade Treatment and Other Provisions.
(5) Division e.--Miscellaneous Provisions.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title.
Sec. 2. Organization of Act into divisions; table of contents.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
Sec. 101. Short title.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance For Workers
Sec. 111. Reauthorization of trade adjustment assistance program.
Sec. 112. Filing of petitions and provision of rapid response
assistance; expedited review of petitions by secretary of
labor.
Sec. 113. Group eligibility requirements.
Sec. 114. Qualifying requirements for trade readjustment allowances.
Sec. 115. Waivers of training requirements.
Sec. 116. Amendments to limitations on trade readjustment allowances.
Sec. 117. Annual total amount of payments for training.
Sec. 118. Provision of employer-based training.
Sec. 119. Coordination with title I of the Workforce Investment Act of
1998.
Sec. 120. Expenditure period.
Sec. 121. Job search allowances.
Sec. 122. Relocation allowances.
Sec. 123. Repeal of NAFTA transitional adjustment assistance program.
Sec. 124. Demonstration project for alternative trade adjustment
assistance for older workers.
Sec. 125. Declaration of policy; sense of Congress.
Subtitle B--Trade Adjustment Assistance For Firms
Sec. 131. Reauthorization of program.
Subtitle C--Trade Adjustment Assistance For Farmers
Sec. 141. Trade adjustment assistance for farmers.
Sec. 142. Conforming amendments.
Sec. 143. Study on TAA for fishermen.
Subtitle D--Effective Date
Sec. 151. Effective date.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
Sec. 201. Credit for health insurance costs of individuals receiving a
trade readjustment allowance or a benefit from the Pension
Benefit Guaranty Corporation.
Sec. 202. Advance payment of credit for health insurance costs of
eligible individuals.
Sec. 203. Health insurance assistance for eligible individuals.
TITLE III--CUSTOMS REAUTHORIZATION
Sec. 301. Short title.
Subtitle A--United States Customs Service
Chapter 1--Drug Enforcement and Other Noncommercial and Commercial
Operations
Sec. 311. Authorization of appropriations for noncommercial operations,
commercial operations, and air and marine interdiction.
Sec. 312. Antiterrorist and illicit narcotics detection equipment for
the United States-Mexico border, United States-Canada border,
and Florida and the Gulf Coast seaports.
Sec. 313. Compliance with performance plan requirements.
Chapter 2--Child Cyber-smuggling Center of the Customs Service
Sec. 321. Authorization of appropriations for program to prevent child
pornography/child sexual exploitation.
Chapter 3--Miscellaneous Provisions
Sec. 331. Additional Customs Service officers for United States-Canada
Border.
Sec. 332. Study and report relating to personnel practices of the
Customs Service.
Sec. 333. Study and report relating to accounting and auditing
procedures of the Customs Service.
Sec. 334. Establishment and implementation of cost accounting system;
reports.
Sec. 335. Study and report relating to timeliness of prospective
rulings.
Sec. 336. Study and report relating to customs user fees.
Sec. 337. Fees for customs inspections at express courier facilities.
Sec. 338. National Customs Automation Program.
Sec. 339. Authorization of appropriations for customs staffing.
Chapter 4--Antiterrorism Provisions
Sec. 341. Immunity for United States officials that act in good faith.
Sec. 342. Emergency adjustments to offices, ports of entry, or staffing
of the customs service.
Sec. 343. Mandatory advanced electronic information for cargo and other
improved Customs reporting procedures.
Sec. 343A. Secure systems of transportation.
Sec. 344. Border search authority for certain contraband in outbound
mail.
Sec. 345. Authorization of appropriations for reestablishment of customs
operations in New York City.
Chapter 5--Textile Transshipment Provisions
Sec. 351. GAO audit of textile transshipment monitoring by Customs
Service.
Sec. 352. Authorization of appropriations for textile transshipment
enforcement operations.
Sec. 353. Implementation of the African Growth and Opportunity Act.
Subtitle B--Office of the United States Trade Representative
Sec. 361. Authorization of appropriations.
Subtitle C--United States International Trade Commission
Sec. 371. Authorization of appropriations.
Subtitle D--Other Trade Provisions
Sec. 381. Increase in aggregate value of articles exempt from duty
acquired abroad by United States residents.
Sec. 382. Regulatory audit procedures.
Sec. 383. Payment of duties and fees.
DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY
TITLE XXI--TRADE PROMOTION AUTHORITY
Sec. 2101. Short title and findings.
Sec. 2102. Trade negotiating objectives.
Sec. 2103. Trade agreements authority.
Sec. 2104. Consultations and assessment.
Sec. 2105. Implementation of trade agreements.
Sec. 2106. Treatment of certain trade agreements for which negotiations
have already begun.
Sec. 2107. Congressional Oversight Group.
Sec. 2108. Additional implementation and enforcement requirements.
Sec. 2109. Committee staff.
Sec. 2110. Conforming amendments.
Sec. 2111. Report on impact of trade promotion authority.
Sec. 2112. Interests of small business.
Sec. 2113. Definitions.
DIVISION C--ANDEAN TRADE PREFERENCE ACT
TITLE XXXI--ANDEAN TRADE PREFERENCE
Sec. 3101. Short title.
Sec. 3102. Findings.
Sec. 3103. Articles eligible for preferential treatment.
Sec. 3104. Termination.
Sec. 3105. Report on Free Trade Agreement with Israel.
Sec. 3106. Modification of duty treatment for tuna.
Sec. 3107. Trade benefits under the caribbean basin economic recovery
act.
Sec. 3108. Trade benefits under the African Growth and Opportunity Act.
DIVISION D--EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT
TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
Sec. 4101. Extension of generalized system of preferences.
Sec. 4102. Amendments to generalized system of preferences.
DIVISION E--MISCELLANEOUS PROVISIONS
TITLE L--MISCELLANEOUS TRADE BENEFITS
Subtitle A--Wool Provisions
Sec. 5101. Wool provisions.
Sec. 5102. Duty suspension on wool.
Subtitle B--Other Provisions
Sec. 5201. Fund for WTO dispute settlements.
Sec. 5202. Certain steam or other vapor generating boilers used in
nuclear facilities.
Sec. 5203. Sugar tariff-rate quota circumvention.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
SEC. 101. SHORT TITLE.
This division may be cited as the ``Trade Adjustment
Assistance Reform Act of 2002''.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance For Workers
SEC. 111. REAUTHORIZATION OF TRADE ADJUSTMENT ASSISTANCE PROGRAM.
(a) Assistance for Workers.--Section 245 of the Trade Act
of 1974 (19 U.S.C. 2317) is amended by striking ``October 1,
1998, and ending September 30, 2001,'' each place it appears
and inserting ``October 1, 2001, and ending September 30,
2007,''.
(b) Assistance for Firms.--Section 256(b) of the Trade Act
of 1974 (19 U.S.C. 2346(b)) is amended by striking ``October 1,
1998, and ending September 30, 2001'' and inserting ``October
1, 2001, and ending September 30, 2007,''.
(c) Termination.--Section 285 of the Trade Act of 1974 is
amended to read as follows:
``SEC. 285. TERMINATION.
``(a) Assistance for Workers.--
``(1) In general.--Except as provided in paragraph
(2), trade adjustment assistance, vouchers, allowances,
and other payments or benefits may not be provided
under chapter 2 after September 30, 2007.
``(2) Exception.--Notwithstanding paragraph (1), a
worker shall continue to receive trade adjustment
assistance benefits and other benefits under chapter 2
for any week for which the worker meets the eligibility
requirements of that chapter, if on or before September
30, 2007, the worker is--
``(A) certified as eligible for trade
adjustment assistance benefits under chapter 2
of this title; and
``(B) otherwise eligible to receive trade
adjustment assistance benefits under chapter 2.
``(b) Other Assistance.--
``(1) Assistance for firms.--Technical assistance
may not be provided under chapter 3 after September 30,
2007.
``(2) Assistance for farmers.--
``(A) In general.--Except as provided in
subparagraph (B), adjustment assistance,
vouchers, allowances, and other payments or
benefits may not be provided under chapter 6
after September 30, 2007.
``(B) Exception.--Notwithstanding
subparagraph (A), an agricultural commodity
producer (as defined in section 291(2)) shall
continue to receive adjustment assistance
benefits and other benefits under chapter 6,
for any week for which the agricultural
commodity producer meets the eligibility
requirements of chapter 6, if on or before
September 30, 2007, the agricultural commodity
producer is--
``(i) certified as eligible for
adjustment assistance benefits under
chapter 6; and
``(ii) is otherwise eligible to
receive adjustment assistance benefits
under such chapter 6.''.
SEC. 112. FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE
ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY
SECRETARY OF LABOR.
(a) Filing of Petitions and Provision of Rapid Response
Assistance.--Section 221(a) of the Trade Act of 1974 (19 U.S.C.
2271(a)) is amended to read as follows:
``(a)(1) A petition for certification of eligibility to
apply for adjustment assistance for a group of workers under
this chapter may be filed simultaneously with the Secretary and
with the Governor of the State in which such workers' firm or
subdivision is located by any of the following:
``(A) The group of workers (including workers in an
agricultural firm or subdivision of any agricultural
firm).
``(B) The certified or recognized union or other
duly authorized representative of such workers.
``(C) Employers of such workers, one-stop operators
or one-stop partners (as defined in section 101 of the
Workforce Investment Act of 1998 (29 U.S.C. 2801)),
including State employment security agencies, or the
State dislocated worker unit established under title I
of such Act, on behalf of such workers.
``(2) Upon receipt of a petition filed under paragraph (1),
the Governor shall--
``(A) ensure that rapid response assistance, and
appropriate core and intensive services (as described
in section 134 of the Workforce Investment Act of 1998
(29 U.S.C. 2864)) authorized under other Federal laws
are made available to the workers covered by the
petition to the extent authorized under such laws; and
``(B) assist the Secretary in the review of the
petition by verifying such information and providing
such other assistance as the Secretary may request.
``(3) Upon receipt of the petition, the Secretary shall
promptly publish notice in the Federal Register that the
Secretary has received the petition and initiated an
investigation.''.
(b) Expedited Review of Petitions by Secretary of Labor.--
Section 223(a) of such Act (19 U.S.C. 2273(a)) is amended in
the first sentence by striking ``60 days'' and inserting ``40
days''.
SEC. 113. GROUP ELIGIBILITY REQUIREMENTS.
(a) Trade Adjustment Assistance Program.--
(1) In general.--Section 222 of the Trade Act of
1974 (19 U.S.C. 2272) is amended--
(A) by amending subsection (a) to read as
follows:
``(a) In General.--A group of workers (including workers in
any agricultural firm or subdivision of an agricultural firm)
shall be certified by the Secretary as eligible to apply for
adjustment assistance under this chapter pursuant to a petition
filed under section 221 if the Secretary determines that--
``(1) a significant number or proportion of the
workers in such workers' firm, or an appropriate
subdivision of the firm, have become totally or
partially separated, or are threatened to become
totally or partially separated; and
``(2)(A)(i) the sales or production, or both, of
such firm or subdivision have decreased absolutely;
``(ii) imports of articles like or directly
competitive with articles produced by such firm or
subdivision have increased; and
``(iii) the increase in imports described in clause
(ii) contributed importantly to such workers'
separation or threat of separation and to the decline
in the sales or production of such firm or subdivision;
or
``(B)(i) there has been a shift in production by
such workers' firm or subdivision to a foreign country
of articles like or directly competitive with articles
which are produced by such firm or subdivision; and
``(ii)(I) the country to which the workers' firm
has shifted production of the articles is a party to a
free trade agreement with the United States;
``(II) the country to which the workers' firm has
shifted production of the articles is a beneficiary
country under the Andean Trade Preference Act, African
Growth and Opportunity Act, or the Caribbean Basin
Economic Recovery Act; or
``(III) there has been or is likely to be an
increase in imports of articles that are like or
directly competitive with articles which are or were
produced by such firm or subdivision.'';
(B) by redesignating subsection (b) as
subsection (c); and
(C) by inserting after subsection (a) the
following:
``(b) Adversely affected secondary workers.--A group of
workers (including workers in any agricultural firm or
subdivision of an agricultural firm) shall be certified by the
Secretary as eligible to apply for trade adjustment assistance
benefits under this chapter if the Secretary determines that--
``(1) a significant number or proportion of the
workers in the workers' firm or an appropriate
subdivision of the firm have become totally or
partially separated, or are threatened to become
totally or partially separated;
``(2) the workers' firm (or subdivision) is a
supplier or downstream producer to a firm (or
subdivision) that employed a group of workers who
received a certification of eligibility under
subsection (a), and such supply or production is
related to the article that was the basis for such
certification (as defined in subsection (c) (3) and
(4)); and
``(3) either--
``(A) the workers' firm is a supplier and
the component parts it supplied to the firm (or
subdivision) described in paragraph (2)
accounted for at least 20 percent of the
production or sales of the workers' firm; or
``(B) a loss of business by the workers'
firm with the firm (or subdivision) described
in paragraph (2) contributed importantly to the
workers' separation or threat of separation
determined under paragraph (1).''.
(b) Definitions.--Section 222(c) of such Act, as
redesignated by paragraph (1)(A), is amended--
(1) in the matter preceding paragraph (1), by
striking ``subsection (a)(3)'' and inserting ``this
section''; and
(2) by adding at the end the following:
``(3) Downstream producer.--The term `downstream
producer' means a firm that performs additional, value-
added production processes for a firm or subdivision,
including a firm that performs final assembly or
finishing, directly for another firm (or subdivision),
for articles that were the basis for a certification of
eligibility under subsection (a) of a group of workers
employed by such other firm, if the certification of
eligibility under subsection (a) is based on an
increase in imports from, or a shift in production to,
Canada or Mexico.
``(4) Supplier.--The term `supplier' means a firm
that produces and supplies directly to another firm (or
subdivision) component parts for articles that were the
basis for a certification of eligibility under
subsection (a) of a group of workers employed by such
other firm.''.
SEC. 114. QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT ALLOWANCES.
(a) Clarification of Certain Reductions.--Section
231(a)(3)(B) of the Trade Act of 1974 (19 U.S.C. 2291(a)(3)(B))
is amended by inserting after ``any unemployment insurance''
the following: ``, except additional compensation that is
funded by a State and is not reimbursed from any Federal
funds,''.
(b) Enrollment in Training Requirement.--Section
231(a)(5)(A) of such Act (19 U.S.C. 2291(a)(5)(A)) is amended--
(1) by inserting ``(i)'' after ``(A)'';
(2) by adding ``and'' after the comma at the end;
and
(3) by adding at the end the following:
``(ii) the enrollment required under clause
(i) occurs no later than the latest of--
``(I) the last day of the 16th week
after the worker's most recent total
separationfrom adversely affected
employment which meets the requirements of paragraphs (1) and (2),
``(II) the last day of the 8th week
after the week in which the Secretary
issues a certification covering the
worker,
``(III) 45 days after the later of
the dates specified in subclause (I) or
(II), if the Secretary determines there
are extenuating circumstances that
justify an extension in the enrollment
period, or
``(IV) the last day of a period
determined by the Secretary to be
approved for enrollment after the
termination of a waiver issued pursuant
to subsection (c),''.
SEC. 115. WAIVERS OF TRAINING REQUIREMENTS.
(a) In General.--Section 231(c) of the Trade Act of 1974
(19 U.S.C. 2291(c)) is amended to read as follows:
``(c) Waivers of Training Requirements.--
``(1) Issuance of waivers.--The Secretary may issue
a written statement to an adversely affected worker
waiving the requirement to be enrolled in training
described in subsection (a)(5)(A) if the Secretary
determines that it is not feasible or appropriate for
the worker, because of 1 or more of the following
reasons:
``(A) Recall.--The worker has been notified
that the worker will be recalled by the firm
from which the separation occurred.
``(B) Marketable skills.--The worker
possesses marketable skills for suitable
employment (as determined pursuant to an
assessment of the worker, which may include the
profiling system under section 303(j) of the
Social Security Act (42 U.S.C. 503(j)), carried
out in accordance with guidelines issued by the
Secretary) and there is a reasonable
expectation of employment at equivalent wages
in the foreseeable future.
``(C) Retirement.--The worker is within 2
years of meeting all requirements for
entitlement to either--
``(i) old-age insurance benefits
under title II of the Social Security
Act (42 U.S.C. 401 et seq.) (except for
application therefor); or
``(ii) a private pension sponsored
by an employer or labor organization.
``(D) Health.--The worker is unable to
participate in training due to the health of
the worker, except that a waiver under this
subparagraph shall not be construed to exempt a
worker from requirements relating to the
availability for work, active search for work,
or refusal to accept work under Federal or
State unemployment compensation laws.
``(E) Enrollment unavailable.--The first
available enrollment date for the approved
training of the worker is within 60 days after
the date of the determination made under this
paragraph, or, if later, there are extenuating
circumstances for the delay in enrollment, as
determined pursuant to guidelines issued by the
Secretary.
``(F) Training not available.--Training
approved by the Secretary is not reasonably
available to the worker from either
governmental agencies or private sources (which
may include area vocational education schools,
as defined in section 3 of the Carl D. Perkins
Vocational and Technical Education Act of 1998
(20 U.S.C. 2302), and employers), no training
that is suitable for the worker is available at
a reasonable cost, or no training funds are
available.
``(2) Duration of waivers.--
``(A) In general.--A waiver issued under
paragraph (1) shall be effective for not more
than 6 months after the date on which the
waiver is issued, unless the Secretary
determines otherwise.
``(B) Revocation.--The Secretary shall
revoke a waiver issued under paragraph (1) if
the Secretary determines that the basis of a
waiver is no longer applicable to the worker
and shall notify the worker in writing of the
revocation.
``(3) Agreements under section 239.--
``(A) Issuance by cooperating states.--
Pursuant to an agreement under section 239, the
Secretary may authorize a cooperating State to
issue waivers as described in paragraph (1).
``(B) Submission of statements.--An
agreement under section 239 shall include a
requirement that the cooperating State submit
to the Secretary the written statements
provided under paragraph (1) and a statement of
the reasons for the waiver.''.
(b) Conforming Amendment.--Section 231(a)(5)(C) of such Act
(19 U.S.C. 2291(a)(5)(C)) is amended by striking ``certified''.
SEC. 116. AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES.
(a) Increase in Maximum Number of Weeks.--Section 233(a) of
the Trade Act of 1974 (19 U.S.C. 2293(a)) is amended--
(1) in paragraph (2), by inserting after ``104-week
period'' the following: ``(or, in the case of an
adversely affected worker who requires a program of
remedial education (as described in section
236(a)(5)(D)) in order to complete training approved
for the worker under section 236, the 130-week
period)''; and
(2) in paragraph (3), by striking ``26'' each place
it appears and inserting ``52''.
(b) Special Rule Relating to Break in Training.--Section
233(f) of the Trade Act of 1974 (19 U.S.C. 2293(f)) is amended
in the matter preceding paragraph (1) by striking ``14 days''
and inserting ``30 days''.
(c) Additional Weeks for Individuals in Need of Remedial
Education.--Section 233 of the Trade Act of 1974 (19 U.S.C.
2293) is amended by adding at the end the following:
``(g) Notwithstanding any other provision of this section,
in order to assist an adversely affected worker to complete
training approved for the worker under section 236 which
includes a program of remedial education (as described in
section 236(a)(5)(D)), and in accordance with regulations
prescribed by the Secretary, payments may be made as trade
readjustment allowances for up to 26 additional weeks in the
26-week period that follows the last week of entitlement to
trade readjustment allowances otherwise payable under this
chapter.''.
SEC. 117. ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING.
Section 236(a)(2)(A) of the Trade Act of 1974 (19 U.S.C.
2296(a)(2)(A)) is amended by striking ``$80,000,000'' and all
that follows through ``$70,000,000'' and inserting
``$220,000,000''.
SEC. 118. PROVISION OF EMPLOYER-BASED TRAINING.
(a) In General.--Section 236(a)(5)(A) of the Trade Act of
1974 (19 U.S.C. 2296(a)(5)(A)) is amended to read as follows:
``(A) employer-based training, including--
``(i) on-the-job training, and
``(ii) customized training,''.
(b) Reimbursement.--Section 236(c)(8) of such Act (19
U.S.C. 2296(c)(8)) is amended to read as follows:
``(8) the employer is provided reimbursement of not
more than 50 percent of the wage rate of the
participant, for the cost of providing the training and
additional supervision related to the training,''.
(c) Definition.--Section 236 of such Act (19 U.S.C. 2296)
is amended by adding at the end the following new subsection:
``(f) For purposes of this section, the term `customized
training' means training that is--
``(1) designed to meet the special requirements of
an employer or group of employers;
``(2) conducted with a commitment by the employer
or group of employers to employ an individual upon
successful completion of the training; and
``(3) for which the employer pays for a significant
portion (but in no case less than 50 percent) of the
cost of such training, as determined by the
Secretary.''.
SEC. 119. COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF
1998.
Section 235 of the Trade Act of 1974 (19 U.S.C. 2295) is
amended by inserting before the period at the end of the first
sentence the following: ``, including the services provided
through one-stop delivery systems described in section 134(c)
of the Workforce Investment Act of 1998 (29 U.S.C. 2864(c))''.
SEC. 120. EXPENDITURE PERIOD.
Section 245 of the Trade Act of 1974 (19 U.S.C. 2317), as
amended by section 111(a) of this Act, is further amended by
amending subsection (b) to read as follows:
``(b) Period of Expenditure.--Funds obligated for any
fiscal year to carry out activities under sections 235 through
238 may be expended by each State receiving such funds during
that fiscal year and the succeeding two fiscal years.''.
SEC. 121. JOB SEARCH ALLOWANCES.
Section 237 of the Trade Act of 1974 (19 U.S.C. 2297) is
amended to read as follows:
``SEC. 237. JOB SEARCH ALLOWANCES.
``(a) Job Search Allowance Authorized.--
``(1) In general.--An adversely affected worker
covered by a certification issued under subchapter A of
this chapter may file an application with the Secretary
for payment of a job search allowance.
``(2) Approval of applications.--The Secretary may
grant an allowance pursuant to an application filed
under paragraph (1) when all of the following apply:
``(A) Assist adversely affected worker.--
The allowance is paid to assist an adversely
affected worker who has been totally separated
in securing a job within the United States.
``(B) Local employment not available.--The
Secretary determines that the worker cannot
reasonably be expected to secure suitable
employment in the commuting area in which the
worker resides.
``(C) Application.--The worker has filed an
application for the allowance with the
Secretary before--
``(i) the later of--
``(I) the 365th day after
the date of the certification
under which the worker is
certified as eligible; or
``(II) the 365th day after
the date of the worker's last
total separation; or
``(ii) the date that is the 182d
day after the date on which the worker
concluded training, unless the worker
received a waiver under section 231(c).
``(b) Amount of Allowance.--
``(1) In general.--An allowance granted under
subsection (a) shall provide reimbursement to the
worker of 90 percent of the cost of necessary job
search expenses as prescribed by the Secretary in
regulations.
``(2) Maximum allowance.--Reimbursement under this
subsection may not exceed $1,250 for any worker.
``(3) Allowance for subsistence and
transportation.--Reimbursement under this subsection
may not be made for subsistence and transportation
expenses at levels exceeding those allowable under
section 236(b) (1) and (2).
``(c) Exception.--Notwithstanding subsection (b), the
Secretary shall reimburse any adversely affected worker for
necessary expenses incurred by the worker in participating in a
job search program approved by the Secretary.''.
SEC. 122. RELOCATION ALLOWANCES.
Section 238 of the Trade Act of 1974 (19 U.S.C. 2298) is
amended to read as follows:
``SEC. 238. RELOCATION ALLOWANCES.
``(a) Relocation Allowance Authorized.--
``(1) In general.--Any adversely affected worker
covered by a certification issued under subchapter A of
this chapter may file an application for a relocation
allowance with the Secretary, and the Secretary may
grant the relocation allowance, subject to the terms
and conditions of this section.
``(2) Conditions for granting allowance.--A
relocation allowance may be granted if all of the
following terms and conditions are met:
``(A) Assist an adversely affected
worker.--The relocation allowance will assist
an adversely affected worker in relocating
within the United States.
``(B) Local employment not available.--The
Secretary determines that the worker cannot
reasonably be expected to secure suitable
employment in the commuting area in which the
worker resides.
``(C) Total separation.--The worker is
totally separated from employment at the time
relocation commences.
``(D) Suitable employment obtained.--The
worker--
``(i) has obtained suitable
employment affording a reasonable
expectation of long-term duration in
the area in which the worker wishes to
relocate; or
``(ii) has obtained a bona fide
offer of such employment.
``(E) Application.--The worker filed an
application with the Secretary before--
``(i) the later of--
``(I) the 425th day after
the date of the certification
under subchapter A of this
chapter; or
``(II) the 425th day after
the date of the worker's last
total separation; or
``(ii) the date that is the 182d
day after the date on which the worker
concluded training, unless the worker
received a waiver under section 231(c).
``(b) Amount of Allowance.--The relocation allowance
granted to a worker under subsection (a) includes--
``(1) 90 percent of the reasonable and necessary
expenses (including, but not limited to, subsistence
and transportation expenses at levels not exceeding
those allowable under section 236(b) (1) and (2)
specified in regulations prescribed by the Secretary,
incurred in transporting the worker, the worker's
family, and household effects; and
``(2) a lump sum equivalent to 3 times the worker's
average weekly wage, up to a maximum payment of $1,250.
``(c) Limitations.--A relocation allowance may not be
granted to a worker unless--
``(1) the relocation occurs within 182 days after
the filing of the application for relocation
assistance; or
``(2) the relocation occurs within 182 days after
the conclusion of training, if the worker entered a
training program approved by the Secretary under
section 236(b) (1) and (2).''.
SEC. 123. REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM.
(a) In General.--Subchapter D of chapter 2 of title II of
such Act (19 U.S.C. 2331) is repealed.
(b) Conforming Amendments.--
(1) Section 225(b) (1) and (2) of the Trade Act of
1974 (19 U.S.C. 2275(b) (1) and (2)) is amended by
striking ``or subchapter D'' each place it appears.
(2) Section 249A of such Act (19 U.S.C. 2322) is
repealed.
(3) The table of contents of such Act is amended--
(A) by striking the item relating to
section 249A; and
(B) by striking the items relating to
subchapter D of chapter 2 of title II.
(4) Section 284(a) of such Act is amended by
striking ``or section 250(c)''.
(c) Effective Date.--
(1) In general.--The amendments made by this
section shall apply with respect to petitions filed
under chapter 2 of title II of the Trade Act of 1974,
on or after the date that is 90 days after the date of
enactment of this Act.
(2) Workers certified as eligible before effective
date.--Notwithstanding subsection (a), a worker
receiving benefits under chapter 2 of title II of the
Trade Act of 1974 shall continue to receive (or be
eligible to receive) benefits and services under
chapter 2 of title II of the Trade Act of 1974, as in
effect on the day before the amendments made by this
section take effect under subsection (a), for any week
for which the worker meets the eligibility requirements
of such chapter 2 as in effect on such date.
SEC. 124. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT
ASSISTANCE FOR OLDER WORKERS.
(a) Demonstration Program.--Chapter 2 of title II of the
Trade Act of 1974 (19 U.S.C. 2271 et seq.) is amended by
striking section 246 and inserting the following new section:
``SEC. 246. DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT
ASSISTANCE FOR OLDER WORKERS.
``(a) In General.--
``(1) Establishment.--Not later than 1 year after
the date of enactment of the Trade Adjustment
Assistance Reform Act of 2002, the Secretary shall
establish an alternative trade adjustment assistance
program for older workers that provides the benefits
described in paragraph (2).
``(2) Benefits.--
``(A) Payments.--A State shall use the
funds provided to the State under section 241
to pay, for a period not to exceed 2 years, to
a worker described in paragraph (3)(B), 50
percent of the difference between--
``(i) the wages received by the
worker from reemployment; and
``(ii) the wages received by the
worker at the time of separation.
``(B) Health insurance.--A worker described
in paragraph (3)(B) participating in the
program established under paragraph (1) is
eligible to receive, for a period not to exceed
2 years, a credit for health insurance costs
under section 35 of the Internal Revenue Code
of 1986,as added by section 201 of the Trade
Act of 2002.
``(3) Eligibility.--
``(A) Firm eligibility.--
``(i) In general.--The Secretary
shall provide the opportunity for a
group of workers on whose behalf a
petition is filed under section 221 to
request that the group of workers be
certified for the alternative trade
adjustment assistance program under
this section at the time the petition
is filed.
``(ii) Criteria.--In determining
whether to certify a group of workers
as eligible for the alternative trade
adjustment assistance program, the
Secretary shall consider the following
criteria:
``(I) Whether a significant
number of workers in the
workers' firm are 50 years of
age or older.
``(II) Whether the workers
in the workers' firm possess
skills that are not easily
transferable.
``(III) The competitive
conditions within the workers'
industry.
``(iii) Deadline.--The Secretary
shall determine whether the workers in
the group are eligible for the
alternative trade adjustment assistance
program by the date specified in
section 223(a).
``(B) Individual eligibility.--A worker in
the group that the Secretary has certified as
eligible for the alternative trade adjustment
assistance program may elect to receive
benefits under the alternative trade adjustment
assistance program if the worker--
``(i) is covered by a certification
under subchapter A of this chapter;
``(ii) obtains reemployment not
more than 26 weeks after the date of
separation from the adversely affected
employment;
``(iii) is at least 50 years of
age; and
``(iv) earns not more than $50,000
a year in wages from reemployment;
``(v) is employed on a full-time
basis as defined by State law in the
State in which the worker is employed;
and
``(vi) does not return to the
employment from which the worker was
separated.
``(4) Total amount of payments.--The payments
described in paragraph (2)(A) made to a worker may not
exceed $10,000 per worker during the 2-year eligibility
period.
``(5) Limitation on other benefits.--Except as
provided in section 238(a)(2)(B), if a worker is
receiving payments pursuant to the program established
under paragraph (1), the worker shall not be eligible
to receive any other benefits under this title.
``(b) Termination.--
``(1) In general.--Except as provided in paragraph
(2), no payments may be made by a State under the
program established under subsection (a)(1) after the
date that is 5 years after the date on which such
program is implemented by the State.
``(2) Exception.--Notwithstanding paragraph (1), a
worker receiving payments under the program established
under subsection (a)(1) on the termination date
described in paragraph (1) shall continue to receive
such payments provided that the worker meets the
criteria described in subsection (a)(3)(B).''.
(b) Table of Contents.--The Trade Act of 1974 (U.S.C. et
seq.) is amended in the table of contents by inserting after
the item relating to section 245 the following new item:
``Sec. 246. Demonstration project for alternative trade adjustment
assistance for older workers.''.
SEC. 125. DECLARATION OF POLICY; SENSE OF CONGRESS.
(a) Declaration of Policy.--Congress reiterates that, under
the trade adjustment assistance program under chapter 2 of
title II of the Trade Act of 1974, workers are eligible for
transportation, childcare, and healthcare assistance, as well
as other related assistance under programs administered by the
Department of Labor.
(b) Sense of Congress.--It is the sense of Congress that
the Secretary of Labor, working independently and in
conjunction with the States, should, in accordance with section
225 of the Trade Act of 1974, provide more specific information
about benefit allowances, training, and other employment
services, and the petition and application procedures
(including appropriate filing dates) for such allowances,
training, and services, under the trade adjustment assistance
program under chapter 2 of title II of the Trade Act of 1974 to
workers who are applying for, or are certified to receive,
assistance under that program, including information on all
other Federal assistance available to such workers.
Subtitle B--Trade Adjustment Assistance For Firms
SEC. 131. REAUTHORIZATION OF PROGRAM.
Section 256(b) of chapter 3 of title II of the Trade Act of
1974 (19 U.S.C. 2346(b)) is amended to read as follows:
``(b) There are authorized to be appropriated to the
Secretary $16,000,000 for each of fiscal years 2003 through
2007, to carry out the Secretary's functions under this chapter
in connection with furnishing adjustment assistance to firms.
Amounts appropriated under this subsection shall remain
available until expended.''.
Subtitle C--Trade Adjustment Assistance For Farmers
SEC. 141. TRADE ADJUSTMENT ASSISTANCE FOR FARMERS.
(a) In General.--Title II of the Trade Act of 1974 (19
U.S.C. 2251 et seq.) is amended by adding at the end the
following new chapter:
``CHAPTER 6--ADJUSTMENT ASSISTANCE FOR FARMERS
``SEC. 291. DEFINITIONS.
``In this chapter:
``(1) Agricultural commodity.--The term
`agricultural commodity' means any agricultural
commodity (including livestock) in its raw or natural
state.
``(2) Agricultural commodity producer.--The term
`agricultural commodity producer' has the same meaning
as the term `person' as prescribed by regulations
promulgated under section 1001(5) of the Food Security
Act of 1985 (7 U.S.C. 1308(5)).
``(3) Contributed importantly.--
``(A) In general.--The term `contributed
importantly' means a cause which is important
but not necessarily more important than any
other cause.
``(B) Determination of contributed
importantly.--The determination of whether
imports of articles like or directly
competitive with an agricultural commodity with
respect to which a petition under this chapter
was filed contributed importantly to a decline
in the price of the agricultural commodity
shall be made by the Secretary.
``(4) Duly authorized representative.--The term
`duly authorized representative' means an association
of agricultural commodity producers.
``(5) National average price.--The term `national
average price' means the national average price paid to
an agricultural commodity producer for an agricultural
commodity in a marketing year as determined by the
Secretary.
``(6) Secretary.--The term `Secretary' means the
Secretary of Agriculture.
``SEC. 292. PETITIONS; GROUP ELIGIBILITY.
``(a) In General.--A petition for a certification of
eligibility to apply for adjustment assistance under this
chapter may be filed with the Secretary by a group of
agricultural commodity producers or by their duly authorized
representative. Upon receipt of the petition, the Secretary
shall promptly publish notice in the Federal Register that the
Secretary has received the petition and initiated an
investigation.
``(b) Hearings.--If the petitioner, or any other person
found by the Secretary to have a substantial interest in the
proceedings, submits not later than 10 days after the date of
the Secretary's publication under subsection (a) a request for
a hearing, the Secretary shall provide for a public hearing and
afford such interested person an opportunity to be present, to
produce evidence, and to be heard.
``(c) Group Eligibility Requirements.--The Secretary shall
certify a group of agricultural commodity producers as eligible
to apply for adjustment assistance under this chapter if the
Secretary determines--
``(1) that the national average price for the
agricultural commodity, or a class of goods within the
agricultural commodity, produced by the group for the
most recent marketing year for which the national
average price is available is less than 80 percent of
the average of the national average price for such
agricultural commodity, or such class of goods, for the
5 marketing years preceding the most recent marketing
year; and
``(2) that increases in imports of articles like or
directly competitive with the agricultural commodity,
or class of goods within the agricultural commodity,
produced by the group contributed importantly to the
decline in price described in paragraph (1).
``(d) Special Rule for Qualified Subsequent Years.--A group
of agricultural commodity producers certified as eligible under
section 293 shall be eligible to apply for assistance under
this chapter in any qualified year after the year the group is
first certified, if the Secretary determines that--
``(1) the national average price for the
agricultural commodity, or class of goods within the
agricultural commodity, produced by the group for the
most recent marketing year for which the national
average price is available is equal to or less than the
price determined under subsection (c)(1); and
``(2) the requirements of subsection (c)(2) are
met.
``(e) Determination of Qualified Year and Commodity.--In
this chapter:
``(1) Qualified year.--The term `qualified year',
with respect to a group of agricultural commodity
producers certified as eligible under section 293,
means each consecutive year after the year in which the
group is certified and in which the Secretary makes the
determination under subsection (c) or (d), as the case
may be.
``(2) Classes of goods within a commodity.--In any
case in which there are separate classes of goods
within an agricultural commodity, the Secretary shall
treat each class as a separate commodity in determining
group eligibility, the national average price, and
level of imports under this section and section 296.
``SEC. 293. DETERMINATIONS BY SECRETARY OF AGRICULTURE.
``(a) In General.--As soon as practicable after the date on
which a petition is filed under section 292, but in any event
not later than 40 days after that date, the Secretary shall
determine whether the petitioning group meets the requirements
of section 292 (c) or (d), as the case may be, and shall, if
the group meets the requirements, issue a certification of
eligibility to apply for assistance under this chapter covering
agricultural commodity producers in any group that meets the
requirements. Each certification shall specify the date on
which eligibility under this chapter begins.
``(b) Notice.--Upon making a determination on a petition,
the Secretary shall promptly publish a summary of the
determination in the Federal Register, together with the
Secretary's reasons for making the determination.
``(c) Termination of Certification.--Whenever the Secretary
determines, with respect to any certification of eligibility
under this chapter, that the decline in price for the
agricultural commodity covered by the certification is no
longer attributable to the conditions described in section 292,
the Secretary shall terminate such certification and promptly
cause notice of such termination to be published in the Federal
Register, together with the Secretary's reasons for making such
determination.
``SEC. 294. STUDY BY SECRETARY OF AGRICULTURE WHEN INTERNATIONAL TRADE
COMMISSION BEGINS INVESTIGATION.
``(a) In General.--Whenever the International Trade
Commission (in this chapter referred to as the `Commission')
begins an investigation under section 202 with respect to an
agricultural commodity, the Commission shall immediately notify
the Secretary of the investigation. Upon receipt of the
notification, the Secretary shall immediately conduct a study
of--
``(1) the number of agricultural commodity
producers producing a like or directly competitive
agricultural commodity who have been or are likely to
be certified as eligible for adjustment assistance
under this chapter, and
``(2) the extent to which the adjustment of such
producers to the import competition may be facilitated
through the use of existing programs.
``(b) Report.--Not later than 15 days after the day on
which the Commission makes its report under section 202(f), the
Secretary shall submit a report to the President setting forth
the findings of the study described in subsection (a). Upon
making the report to the President, the Secretary shall also
promptly make the report public (with the exception of
information which the Secretary determines to be confidential)
and shall have a summary of the report published in the Federal
Register.
``SEC. 295. BENEFIT INFORMATION TO AGRICULTURAL COMMODITY PRODUCERS.
``(a) In General.--The Secretary shall provide full
information to agricultural commodity producers about the
benefit allowances, training, and other employment services
available under this title and about the petition and
application procedures, and the appropriate filing dates, for
such allowances, training, and services. The Secretary shall
provide whatever assistance is necessary to enable groups to
prepare petitions or applications for program benefits under
this title.
``(b) Notice of Benefits.--
``(1) In general.--The Secretary shall mail written
notice of the benefits available under this chapter to
each agricultural commodity producer that the Secretary
has reason to believe is covered by a certification
made under this chapter.
``(2) Other notice.--The Secretary shall publish
notice of the benefits available under this chapter to
agricultural commodity producers that are covered by
each certification made under this chapter in
newspapers of general circulation in the areas in which
such producers reside.
``(3) Other federal assistance.--The Secretary
shall also provide information concerning procedures
for applying for and receiving all other Federal
assistance and services available to workers facing
economic distress.
``SEC. 296. QUALIFYING REQUIREMENTS FOR AGRICULTURAL COMMODITY
PRODUCERS.
``(a) In General.--
``(1) Requirements.--Payment of a trade adjustment
allowance shall be made to an adversely affected
agricultural commodity producer covered by a
certification under this chapter who files an
application for such allowance within 90 days after the
date on which the Secretary makes a determination and
issues a certification of eligibility under section
293, if the following conditions are met:
``(A) The producer submits to the Secretary
sufficient information to establish the amount
of agricultural commodity covered by the
application filed under subsection (a) that was
produced by the producer in the most recent
year.
``(B) The producer certifies that the
producer has not received cash benefits under
any provision of this title other than this
chapter.
``(C) The producer's net farm income (as
determined by the Secretary) for the most
recent year is less than the producer's net
farm income for the latest year in which no
adjustment assistance was received by the
producer under this chapter.
``(D) The producer certifies that the
producer has met with an Extension Service
employee or agent to obtain, at no cost to the
producer, information and technical assistance
that will assist the producer in adjusting to
import competition with respect to the
adversely affected agricultural commodity,
including--
``(i) information regarding the
feasibility and desirability of
substituting 1 or more alternative
commodities for the adversely affected
agricultural commodity; and
``(ii) technical assistance that
will improve the competitiveness of the
production and marketing of the
adversely affected agricultural
commodity by the producer, including
yield and marketing improvements.
``(2) Limitations.--
``(A) Adjusted gross income.--
``(i) In general.--Notwithstanding
any other provision of this chapter, an
agricultural commodity producer shall
not be eligible for assistance under
this chapter in any year in which the
average adjusted gross income of the
producer exceeds the level set forth in
section 1001D of the Food Security Act
of 1985.
``(ii) Certification.--To comply
with the limitation under subparagraph
(A), an individual or entity shall
provide to the Secretary--
``(I) a certification by a
certified public accountant or
another third party that is
acceptable to the Secretary
that the average adjusted gross
income of the producer does not
exceed the level set forth in
section 1001D of the Food
Security Act of 1985; or
``(II) information and
documentation regarding the
adjusted gross income of the
producer through other
procedures established by the
Secretary.
``(B) Counter-cyclical payments.--The total
amount of payments made to an agricultural
producer under this chapter during any crop
year may not exceed the limitation on counter-
cyclical payments set forth in section 1001(c)
of the Food Security Act of 1985.
``(C) Definitions.--In this subsection:
``(i) Adjusted gross income.--The
term `adjusted gross income' means
adjusted gross income of an
agricultural commodity producer--
``(I) as defined in section
62 of the Internal Revenue Code
of 1986 and implemented in
accordance with procedures
established by the Secretary;
and
``(II) that is earned
directly or indirectly from all
agricultural and
nonagricultural sources of an
individual or entity for a
fiscal or corresponding crop
year.
``(ii) Average adjusted gross
income.--
``(I) In general.--The term
`average adjusted gross income'
means the average adjusted
gross income of a producer for
each of the 3 preceding taxable
years.
``(II) Effective adjusted
gross income.--In the case of a
producer that does not have an
adjusted gross income for each
of the 3 preceding taxable
years, the Secretary shall
establish rules that provide
the producer with an effective
adjusted gross income for the
applicable year.
``(b) Amount of Cash Benefits.--
``(1) In general.--Subject to the provisions of
section 298, an adversely affected agricultural
commodity producer described in subsection (a) shall be
entitled to adjustment assistance under this chapter in
an amount equal to the product of--
``(A) one-half of the difference between--
``(i) an amount equal to 80 percent
of the average of the national average
price of the agricultural commodity
covered by the application described in
subsection (a) for the 5 marketing
years preceding the most recent
marketing year, and
``(ii) the national average price
of the agricultural commodity for the
most recent marketing year, and
``(B) the amount of the agricultural
commodity produced by the agricultural
commodity producer in the most recent marketing
year.
``(2) Special rule for subsequent qualified
years.--The amount of cash benefits for a qualified
year shall be determined in the same manner as cash
benefits are determined under paragraph (1) except that
the average national price of the agricultural
commodity shall be determined under paragraph (1)(A)(i)
by using the 5-marketing-year period used to determine
the amount of cash benefits for the first
certification.
``(c) Maximum Amount of Cash Assistance.--The maximum
amount of cash benefits an agricultural commodity producer may
receive in any 12-month period shall not exceed $10,000.
``(d) Limitations on Other Assistance.--An agricultural
commodity producer entitled to receive a cash benefit under
this chapter--
``(1) shall not be eligible for any other cash
benefit under this title, and
``(2) shall be entitled to employment services and
training benefits under part II of subchapter B of
chapter 2.
``SEC. 297. FRAUD AND RECOVERY OF OVERPAYMENTS.
``(a) In General.--
``(1) Repayment.--If the Secretary, or a court of
competent jurisdiction, determines that any person has
received any payment under this chapter to which the
person was not entitled, such person shall be liable to
repay such amount to the Secretary, except that the
Secretary may waive such repayment if the Secretary
determines, in accordance with guidelines prescribed by
the Secretary, that--
``(A) the payment was made without fault on
the part of such person; and
``(B) requiring such repayment would be
contrary to equity and good conscience.
``(2) Recovery of overpayment.--Unless an
overpayment is otherwise recovered, or waived under
paragraph (1), the Secretary shall recover the
overpayment by deductions from any sums payable to such
person under this chapter.
``(b) False Statement.--A person shall, in addition to any
other penalty provided by law, be ineligible for any further
payments under this chapter--
``(1) if the Secretary, or a court of competent
jurisdiction, determines that the person--
``(A) knowingly has made, or caused another
to make, a false statement or representation of
a material fact; or
``(B) knowingly has failed, or caused
another to fail, to disclose a material fact;
and
``(2) as a result of such false statement or
representation, or of such nondisclosure, such person
has received any payment under this chapter to which
the person was not entitled.
``(c) Notice and Determination.--Except for overpayments
determined by a court of competent jurisdiction, no repayment
may be required, and no deduction may be made, under this
section until a determination under subsection (a)(1) by the
Secretary has been made, notice of the determination and an
opportunity for a fair hearing thereon has been given to the
person concerned, and the determination has become final.
``(d) Payment to Treasury.--Any amount recovered under this
section shall be returned to the Treasury of the United States.
``(e) Penalties.--Whoever makes a false statement of a
material fact knowing it to be false, or knowingly fails to
disclose a material fact, for the purpose of obtaining or
increasing for himself or for any other person any payment
authorized to be furnished under this chapter shall be fined
not more than $10,000 or imprisoned for not more than 1 year,
or both.
``SEC. 298. AUTHORIZATION OF APPROPRIATIONS.
``(a) In General.--There are authorized to be appropriated
and there are appropriated to the Department of Agriculture not
to exceed $90,000,000 for each of the fiscal years 2003 through
2007 to carry out the purposes of this chapter.
``(b) Proportionate Reduction.--If in any year the amount
appropriated under this chapter is insufficient to meet the
requirements for adjustment assistance payable under this
chapter, the amount of assistance payable under this chapter
shall be reduced proportionately.''.
(b) Effective Date.--The amendments made by this title
shall take effect on the date that is 180 days after the date
of enactment of this Act.
SEC. 142. CONFORMING AMENDMENTS.
(a) Judicial Review.--
(1) Section 284(a) of the Trade Act of 1974 (19
U.S.C. 2395(a)) is amended--
(A) by inserting ``an agricultural
commodity producer (as defined in section
291(2)) aggrieved by a determination of the
Secretary of Agriculture under section 293,''
after ``section 251 of this title,''; and
(B) in the second sentence of subsection
(a) and in subsections (b) and (c), by striking
``or the Secretary of Commerce'' each place it
appears and inserting ``, the Secretary of
Commerce, or the Secretary of Agriculture''.
(b) Chapters 6.--The table of contents for title II of the
Trade Act of 1974, as amended by subparagraph (A), is amended
by inserting after the items relating to chapter 5 the
following:
``Chapter 6--Adjustment Assistance for Farmers
``Sec. 291. Definitions.
``Sec. 292. Petitions; group eligibility.
``Sec. 293. Determinations by Secretary of Agriculture.
``Sec. 294. Study by Secretary of Agriculture when International Trade
Commission begins investigation.
``Sec. 295. Benefit information to agricultural commodity producers.
``Sec. 296. Qualifying requirements for agricultural commodity
producers.
``Sec. 297. Fraud and recovery of overpayments.
``Sec. 298. Authorization of appropriations.''.
SEC. 143. STUDY ON TAA FOR FISHERMEN.
Not later than 1 year after the date of enactment of this
Act, the Secretary of Commerce shall conduct a study and report
to Congress regarding whether a trade adjustment assistance
program is appropriate and feasible for fishermen. For purposes
of the preceding sentence, the term ``fishermen'' means any
person who is engaged in commercial fishing or is a United
States fish processor.
Subtitle D--Effective Date
SEC. 151. EFFECTIVE DATE.
(a) In General.--Except as otherwise provided in sections
123(c) and 141(b), and subsections (b), (c), and (d) of this
section, the amendments made by this division shall apply to
petitions for certification filed under chapter 2 or 3 of title
II of the Trade Act of 1974 on or after the date that is 90
days after the date of enactment of this Act.
(b) Workers Certified as Eligible Before Effective Date.--
Notwithstanding subsection (a), a worker shall continue to
receive (or be eligible to receive) trade adjustment assistance
and other benefits under chapter 2 of title II of the Trade Act
of 1974, as in effect on September 30, 2001, for any week for
which the worker meets the eligibility requirements of such
chapter 2 as in effect on such date, if on or before such date,
the worker--
(1) was certified as eligible for trade adjustment
assistance benefits under such chapter as in effect on
such date; and
(2) would otherwise be eligible to receive trade
adjustment assistance benefits under such chapter as in
effect on such date.
(c) Workers Who Became Eligible During Qualified Period.--
(1) In general.--Notwithstanding subsection (a) or
any other provision of law, including section 285 of
the Trade Act of 1974, any worker who would have been
eligible to receive trade adjustment assistance or
other benefits under chapter 2 of title II of the Trade
Act of 1974 during the qualified period if such chapter
2 had been in effect during such period, shall be
eligible to receive trade adjustment assistance and
other benefits under chapter 2 of title II of the Trade
Act of 1974, as in effect on September 30, 2001, for
any week during the qualified period for which the
worker meets the eligibility requirements of such
chapter 2 as in effect on September 30, 2001.
(2) Qualified period.--For purposes of this
subsection, the term ``qualified period'' means the
period beginning on January 11, 2002, and ending on the
date that is 90 days after the date of enactment of
this Act.
(d) Adjustment Assistance for Firms.--
(1) In general.--Notwithstanding subsection (a) or
any other provision of law, including section 285 of
the Trade Act of 1974, and except as provided in
paragraph (2), any firm that would have been eligible
to receive adjustment assistance under chapter 3 of
title II of the Trade Act if 1974 during the qualified
period if such chapter 3 had been in effect during such
period, shall be eligible to receive adjustment
assistance under chapter 3 of title II of the Trade Act
of 1974, as in effect on September 30, 2001, for any
week during the qualified period for which the firm
meets the eligibility requirements of such chapter 3 as
in effect on September 30, 2001.
(2) Qualified period.--For purposes of this
subsection, the term ``qualified period'' means the
period beginning on October 1, 2001, and ending on the
date that is 90 days after the date of enactment of
this Act.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
SEC. 201. CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS RECEIVING A
TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE
PENSION BENEFIT GUARANTY CORPORATION.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
refundable credits) is amended by redesignating section 35 as
section 36 and inserting after section 34 the following new
section:
``SEC. 35. HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS.
``(a) In General.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by
subtitle A an amount equal to 65 percent of the amount paid by
the taxpayer for coverage of the taxpayer and qualifying family
members under qualified health insurance for eligible coverage
months beginning in the taxable year.
``(b) Eligible Coverage Month.--For purposes of this
section--
``(1) In general.--The term `eligible coverage
month' means any month if--
``(A) as of the first day of such month,
the taxpayer--
``(i) is an eligible individual,
``(ii) is covered by qualified
health insurance, the premium for which
is paid by the taxpayer,
``(iii) does not have other
specified coverage, and
``(iv) is not imprisoned under
Federal, State, or local authority, and
``(B) such month begins more than 90 days
after the date of the enactment of the Trade
Act of 2002.
``(2) Joint returns.--In the case of a joint
return, the requirements of paragraph (1)(A) shall be
treated as met with respect to any month if at least 1
spouse satisfies such requirements.
``(c) Eligible Individual.--For purposes of this section--
``(1) In general.--The term `eligible individual'
means--
``(A) an eligible TAA recipient,
``(B) an eligible alternative TAA
recipient, and
``(C) an eligible PBGC pension recipient.
``(2) Eligible taa recipient.--The term `eligible
TAA recipient' means, with respect to any month, any
individual who is receiving for any day of such month a
trade readjustment allowance under chapter 2 of title
II of the Trade Act of 1974 or who would be eligible to
receive such allowance if section 231 of such Act were
applied without regard to subsection (a)(3)(B) of such
section. An individual shall continue to be treated as
an eligible TAA recipient during the first month that
such individual would otherwise cease to be an eligible
TAA recipient by reason of the preceding sentence.
``(3) Eligible alternative taa recipient.--The term
`eligible alternative TAA recipient' means, with
respect to any month, any individual who--
``(A) is a worker described in section
246(a)(3)(B) of the Trade Act of 1974 who is
participating in the program established under
section 246(a)(1) of such Act, and
``(B) is receiving a benefit for such month
under section 246(a)(2) of such Act.
An individual shall continue to be treated as an
eligible alternative TAA recipient during the first
month that such individual would otherwise cease to be
an eligible alternative TAA recipient by reason of the
preceding sentence.
``(4) Eligible pbgc pension recipient.--The term
`eligible PBGC pension recipient' means, with respect
to any month, any individual who--
``(A) has attained age 55 as of the first
day of such month, and
``(B) is receiving a benefit for such month
any portion of which is paid by the Pension
Benefit Guaranty Corporation under title IV of
the Employee Retirement Income Security Act of
1974.
``(d) Qualifying Family Member.--For purposes of this
section--
``(1) In general.--The term `qualifying family
member' means--
``(A) the taxpayer's spouse, and
``(B) any dependent of the taxpayer with
respect to whom the taxpayer is entitled to a
deduction under section 151(c).
Such term does not include any individual who has other
specified coverage.
``(2) Special dependency test in case of divorced
parents, etc.--If paragraph (2) or (4) of section
152(e) applies to any child with respect to any
calendar year, in the case of any taxable year
beginning in such calendar year, such child shall be
treated as described in paragraph (1)(B) with respect
to the custodial parent (within the meaning of section
152(e)(1)) and not with respect to the noncustodial
parent.
``(e) Qualified Health Insurance.--For purposes of this
section--
``(1) In general.--The term `qualified health
insurance' means any of the following:
``(A) Coverage under a COBRA continuation
provision (as defined in section 9832(d)(1)).
``(B) State-based continuation coverage
provided by the State under a State law that
requires such coverage.
``(C) Coverage offered through a qualified
State high risk pool (as defined in section
2744(c)(2) of the Public Health Service Act).
``(D) Coverage under a health insurance
program offered for State employees.
``(E) Coverage under a State-based health
insurance program that is comparable to the
health insurance program offered for State
employees.
``(F) Coverage through an arrangement
entered into by a State and--
``(i) a group health plan
(including such a plan which is a
multiemployer plan as defined in
section 3(37) of the Employee
Retirement Income Security Act of
1974),
``(ii) an issuer of health
insurance coverage,
``(iii) an administrator, or
``(iv) an employer.
``(G) Coverage offered through a State
arrangement with a private sector health care
coverage purchasing pool.
``(H) Coverage under a State-operated
health plan that does not receive any Federal
financial participation.
``(I) Coverage under a group health plan
that is available through the employment of the
eligible individual's spouse.
``(J) In the case of any eligible
individual and such individual's qualifying
family members, coverage under individual
health insurance if the eligible individual was
covered under individual health insurance
during the entire 30-day period that ends on
the date that such individual became separated
from the employment which qualified such
individual for--
``(i) in the case of an eligible
TAA recipient, the allowance described
in subsection (c)(2),
``(ii) in the case of an eligible
alternative TAA recipient, the benefit
described in subsection (c)(3)(B), or
``(iii) in the case of any eligible
PBGC pension recipient, the benefit
described in subsection (c)(4)(B).
For purposes of this subparagraph, the term
`individual health insurance' means any
insurance which constitutes medical care
offered to individuals other than in connection
with a group health plan and does not include
Federal- or State-based health insurance
coverage.
``(2) Requirements for state-based coverage.--
``(A) In general.--The term `qualified
health insurance' does not include any coverage
described in subparagraphs (B) through (H) of
paragraph (1) unless the State involved has
elected to have such coverage treated as
qualified health insurance under this section
and such coverage meets the following
requirements:
``(i) Guaranteed issue.--Each
qualifying individual is guaranteed
enrollment if the individual pays the
premium for enrollment or provides a
qualified health insurance costs credit
eligibility certificate described in
section 7527 and pays the remainder of
such premium.
``(ii) No imposition of preexisting
condition exclusion.--No pre-existing
condition limitations are imposed with
respect to any qualifying individual.
``(iii) Nondiscriminatory
premium.--The total premium (as
determined without regard to any
subsidies) with respect to a qualifying
individual may not be greater than the
total premium (as so determined) for a
similarly situated individual who is
not a qualifying individual.
``(iv) Same benefits.--Benefits
under the coverage are the same as (or
substantially similar to) the benefits
provided to similarly situated
individuals who are not qualifying
individuals.
``(B) Qualifying individual.--For purposes
of this paragraph, the term `qualifying
individual' means--
``(i) an eligible individual for
whom, as of the date on which the
individual seeks to enroll in the
coverage described in subparagraphs (B)
through (H) of paragraph (1), the
aggregate of the periods of creditable
coverage (as defined in section
9801(c)) is 3 months or longer and who,
with respect to any month, meets the
requirements of clauses (iii) and (iv)
of subsection (b)(1)(A); and
``(ii) the qualifying family
members of such eligible individual.
``(3) Exception.--The term `qualified health
insurance' shall not include--
``(A) a flexible spending or similar
arrangement, and
``(B) any insurance if substantially all of
its coverage is of excepted benefits described
in section 9832(c).
``(f) Other Specified Coverage.--For purposes of this
section, an individual has other specified coverage for any
month if, as of the first day of such month--
``(1) Subsidized coverage.--
``(A) In general.--Such individual is
covered under any insurance which constitutes
medical care (except insurance substantially
all of the coverage of which is of excepted
benefits described in section 9832(c)) under
any health plan maintained by any employer (or
former employer) of the taxpayer or the
taxpayer's spouse and at least 50 percent of
the cost of such coverage (determined under
section 4980B) is paid or incurred by the
employer.
``(B) Eligible alternative taa
recipients.--In the case of an eligible
alternative TAA recipient, such individual is
either--
``(i) eligible for coverage under
any qualified health insurance (other
than insurance described in
subparagraph (A), (B), or (F) of
subsection (e)(1)) under which at least
50 percent of the cost of coverage
(determined under section 4980B(f)(4))
is paid or incurred by an employer (or
former employer) of the taxpayer or the
taxpayer's spouse, or
``(ii) covered under any such
qualified health insurance under which
any portion of the cost of coverage (as
so determined) is paid or incurred by
an employer (or former employer) of the
taxpayer or the taxpayer's spouse.
``(C) Treatment of cafeteria plans.--For
purposes of subparagraphs (A) and (B), the cost
of coverage shall be treated as paid or
incurred by an employer to the extent the
coverage is in lieu of a right to receive cash
or other qualified benefits under a cafeteria
plan (as defined in section 125(d)).
``(2) Coverage under medicare, medicaid, or
schip.--Such individual--
``(A) is entitled to benefits under part A
of title XVIII of the Social Security Act or is
enrolled under part B of such title, or
``(B) is enrolled in the program under
title XIX or XXI of such Act (other than under
section 1928 of such Act).
``(3) Certain other coverage.--Such individual--
``(A) is enrolled in a health benefits plan
under chapter 89 of title 5, United States
Code, or
``(B) is entitled to receive benefits under
chapter 55 of title 10, United States Code.
``(g) Special Rules.--
``(1) Coordination with advance payments of
credit.--With respect to any taxable year, the amount
which would (but for this subsection) be allowed as a
credit to the taxpayer under subsection (a) shall be
reduced (but not below zero) by the aggregate amount
paid on behalf of such taxpayer under section 7527 for
months beginning in such taxable year.
``(2) Coordination with other deductions.--Amounts
taken into account under subsection (a) shall not be
taken into account in determining any deduction allowed
under section 162(l) or 213.
``(3) MSA distributions.--Amounts distributed from
an Archer MSA (as defined in section 220(d)) shall not
be taken into account under subsection (a).
``(4) Denial of credit to dependents.--No credit
shall be allowed under this section to any individual
with respect to whom a deduction under section 151 is
allowable to another taxpayer for a taxable year
beginning in the calendar year in which such
individual's taxable year begins.
``(5) Both spouses eligible individuals.--The
spouse of the taxpayer shall not be treated as a
qualifying family member for purposes of subsection
(a), if--
``(A) the taxpayer is married at the close
of the taxable year,
``(B) the taxpayer and the taxpayer's
spouse are both eligible individuals during the
taxable year, and
``(C) the taxpayer files a separate return
for the taxable year.
``(6) Marital status; certain married individuals
living apart.--Rules similar to the rules of paragraphs
(3) and (4) of section 21(e) shall apply for purposes
of this section.
``(7) Insurance which covers other individuals.--
For purposes of this section, rules similar to the
rules of section 213(d)(6) shall apply with respect to
any contract for qualified health insurance under which
amounts are payable for coverage of an individual other
than the taxpayer and qualifying family members.
``(8) Treatment of payments.--For purposes of this
section--
``(A) Payments by secretary.--Payments made
by the Secretary on behalf of any individual
under section 7527 (relating to advance payment
of credit for health insurance costs of
eligible individuals) shall be treated as
having been made by the taxpayer on the first
day of the month for which such payment was
made.
``(B) Payments by taxpayer.--Payments made
by the taxpayer for eligible coverage months
shall be treated as having been made by the
taxpayer on the first day of the month for
which such payment was made.
``(9) Regulations.--The Secretary may prescribe
such regulations and other guidance as may be necessary
or appropriate to carry out this section, section
6050T, and section 7527.''.
(b) Promotion of State High Risk Pools.--Title XXVII of the
Public Health Service Act is amended by inserting after section
2744 the following new section:
``SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS.
``(a) Seed Grants to States.--The Secretary shall provide
from the funds appropriated under subsection (c)(1) a grant of
up to $1,000,000 to each State that has not created a qualified
high risk pool as of the date of the enactment of this section
for the State's costs of creation and initial operation of such
a pool.
``(b) Matching Funds for Operation of Pools.--
``(1) In general.--In the case of a State that has
established a qualified high risk pool that--
``(A) restricts premiums charged under the
pool to no more than 150 percent of the premium
for applicable standard risk rates;
``(B) offers a choice of two or more
coverage options through the pool; and
``(C) has in effect a mechanism reasonably
designed to ensure continued funding of losses
incurred by the State after the end of fiscal
year 2004 in connection with operation of the
pool;
the Secretary shall provide, from the funds
appropriated under subsection (c)(2) and allotted to
the State under paragraph (2), a grant of up to 50
percent of the losses incurred by the State in
connection with the operation of the pool.
``(2) Allotment.--The amounts appropriated under
subsection (c)(2) for a fiscal year shall be made
available to the States in accordance with a formula
that is based upon the number of uninsured individuals
in the States.
``(c) Funding.--Out of any money in the Treasury of the
United States not otherwise appropriated, there are authorized
and appropriated--
``(1) $20,000,000 for fiscal year 2003 to carry out
subsection (a); and
``(2) $40,000,000 for each of fiscal years 2003 and
2004 to carry out subsection (b).
Funds appropriated under this subsection for a fiscal year
shall remain available for obligation through the end of the
following fiscal year. Nothing in this section shall be
construed as providing a State with an entitlement to a grant
under this section.
``(d) Qualified High Risk Pool and State Defined.--For
purposes of this section, the term `qualified high risk pool'
has the meaning given such term in section 2744(c)(2) and the
term `State' means any of the 50 States and the District of
Columbia.''.
(c) Conforming Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31,
United States Code, is amended by inserting before the
period ``, or from section 35 of such Code''.
(2) The table of sections for subpart C of part IV
of chapter 1 of the Internal Revenue Code of 1986 is
amended by striking the last item and inserting the
following new items:
``Sec. 35. Health insurance costs of eligible individuals.
``Sec. 36. Overpayments of tax.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph
(2), the amendments made by this section shall apply to
taxable years beginning after December 31, 2001.
(2) State high risk pools.--The amendment made by
subsection (b) shall take effect on the date of the
enactment of this Act.
SEC. 202. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF
ELIGIBLE INDIVIDUALS.
(a) In General.--Chapter 77 of the Internal Revenue Code of
1986 (relating to miscellaneous provisions) is amended by
adding at the end the following new section:
``SEC. 7527. ADVANCE PAYMENT OF CREDIT FOR HEALTH INSURANCE COSTS OF
ELIGIBLE INDIVIDUALS.
``(a) General Rule.--Not later than August 1, 2003, the
Secretary shall establish a program for making payments on
behalf of certified individuals to providers of qualified
health insurance (as defined in section 35(e)) for such
individuals.
``(b) Limitation on Advance Payments During any Taxable
Year.--The Secretary may make payments under subsection (a)
only to the extent that the total amount of such payments made
on behalf of any individual during the taxable year does not
exceed 65 percent of the amount paid by the taxpayer for
coverage of the taxpayer and qualifying family members under
qualified health insurance for eligible coverage months
beginning in the taxable year.
``(c) Certified Individual.--For purposes of this section,
the term `certified individual' means any individual for whom a
qualified health insurance costs credit eligibility certificate
is in effect.
``(d) Qualified Health Insurance Costs Credit Eligibility
Certificate.--For purposes of this section, the term `qualified
health insurance costs credit eligibility certificate' means
any written statement that an individual is an eligible
individual (as defined in section 35(c)) if such statement
provides such information as the Secretary may require for
purposes of this section and--
``(1) in the case of an eligible TAA recipient (as
defined in section 35(c)(2)) or an eligible alternative
TAA recipient (as defined in section 35(c)(3)), is
certified by the Secretary of Labor (or by any other
person or entity designated by the Secretary), or
``(2) in the case of an eligible PBGC pension
recipient (as defined in section 35(c)(4)), is
certified by the Pension Benefit Guaranty Corporation
(or by any other person or entity designated by the
Secretary).''.
(b) Disclosure of Return Information for Purposes of
Carrying out a Program for Advance Payment of Credit for Health
Insurance Costs of Eligible Individuals.--
(1) In general.--Subsection (l) of section 6103 of
such Code (relating to disclosure of returns and return
information for purposes other than tax administration)
is amended by adding at the end the following new
paragraph:
``(18) Disclosure of return information for
purposes of carrying out a program for advance payment
of credit for health insurance costs of eligible
individuals.--The Secretary may disclose to providers
of health insurance for any certified individual (as
defined in section 7527(c)) return information with
respect to such certified individual only to the extent
necessary to carry out the program established by
section 7527 (relating to advance payment of credit for
health insurance costs of eligible individuals).''.
(2) Procedures and recordkeeping related to
disclosures.--Subsection (p) of such section is
amended--
(A) in paragraph (3)(A) by striking ``or
(17)'' and inserting ``(17), or (18)'', and
(B) in paragraph (4) by inserting ``or
(17)'' after ``any other person described in
subsection (l)(16)'' each place it appears.
(3) Unauthorized inspection of returns or return
information.--Section 7213A(a)(1)(B) of such Code is
amended by striking ``section 6103(n)'' and inserting
``subsection (l)(18) or (n) of section 6103''.
(c) Information Reporting.--
(1) In general.--Subpart B of part III of
subchapter A of chapter 61 of the Internal Revenue Code
of 1986 (relating to information concerning
transactions with other persons) is amended by
inserting after section 6050S the following new
section:
``SEC. 6050T. RETURNS RELATING TO CREDIT FOR HEALTH INSURANCE COSTS OF
ELIGIBLE INDIVIDUALS.
``(a) Requirement of Reporting.--Every person who is
entitled to receive payments for any month of any calendar year
under section 7527 (relating to advance payment of credit for
health insurance costs of eligible individuals) with respect to
any certified individual (as defined in section 7527(c)) shall,
at such time as the Secretary may prescribe, make the return
described in subsection (b) with respect to each such
individual.
``(b) Form and Manner of Returns.--A return is described in
this subsection if such return--
``(1) is in such form as the Secretary may
prescribe, and
``(2) contains--
``(A) the name, address, and TIN of each
individual referred to in subsection (a),
``(B) the number of months for which
amounts were entitled to be received with
respect to such individual under section 7527
(relating to advance payment of credit for
health insurance costs of eligible
individuals),
``(C) the amount entitled to be received
for each such month, and
``(D) such other information as the
Secretary may prescribe.
``(c) Statements To Be Furnished to Individuals With
Respect to Whom Information Is Required.--Every person required
to make a return under subsection (a) shall furnish to each
individual whose name is required to be set forth in such
return a written statement showing--
``(1) the name and address of the person required
to make such return and the phone number of the
information contact for such person, and
``(2) the information required to be shown on the
return with respect to such individual.
The written statement required under the preceding sentence
shall be furnished on or before January 31 of the year
following the calendar year for which the return under
subsection (a) is required to be made.''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1)
of such Code (relating to definitions) is
amended by redesignating clauses (xi) through
(xvii) as clauses (xii) through (xviii),
respectively, and byinserting after clause (x)
the following new clause:
``(xi) section 6050T (relating to
returns relating to credit for health
insurance costs of eligible
individuals),''.
(B) Paragraph (2) of section 6724(d) of
such Code is amended by striking ``or'' at the
end of subparagraph (Z), by striking the period
at the end of subparagraph (AA) and inserting
``, or'', and by adding after subparagraph (AA)
the following new subparagraph:
``(BB) section 6050T (relating to returns
relating to credit for health insurance costs
of eligible individuals).''.
(d) Clerical Amendments.--
(1) Advance payment.--The table of sections for
chapter 77 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new item:
``Sec. 7527. Advance payment of credit for health insurance
costs of eligible individuals.''.
(2) Information reporting.--The table of sections
for subpart B of part III of subchapter A of chapter 61
of such Code is amended by inserting after the item
relating to section 6050S the following new item:
``Sec. 6050T. Returns relating to credit for health insurance
costs of eligible individuals.''.
(e) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
SEC. 203. HEALTH INSURANCE ASSISTANCE FOR ELIGIBLE INDIVIDUALS.
(a) Eligibility for Grants.--Section 173(a) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(a)) is
amended--
(1) in paragraph (2), by striking ``and'' at the
end;
(2) in paragraph (3), by striking the period and
inserting ``; and''; and
(3) by adding at the end the following:
``(4) from funds appropriated under section
174(c)--
``(A) to a State or entity (as defined in
section 173(c)(1)(B)) to carry out subsection
(f), including providing assistance to eligible
individuals; and
``(B) to a State or entity (as so defined)
to carry out subsection (g), including
providing assistance to eligible
individuals.''.
(b) Use of Funds for Health Insurance Coverage.--Section
173 of the Workforce Investment Act of 1998 (29 U.S.C. 2918) is
amended by adding at the end the following:
``(f) Health Insurance Coverage Assistance for Eligible
Individuals.--
``(1) In general.--Funds made available to a State
or entity under paragraph (4)(A) of subsection (a) may
be used by the State or entity for the following:
``(A) Health insurance coverage.--To assist
an eligible individual and such individual's
qualifying family members in enrolling in
qualified health insurance.
``(B) Administrative and start-up
expenses.--To pay the administrative expenses
related to the enrollment of eligible
individuals and such individuals' qualifying
family members in qualified health insurance,
including--
``(i) eligibility verification
activities;
``(ii) the notification of eligible
individuals of available qualified
health insurance options;
``(iii) processing qualified health
insurance costs credit eligibility
certificates provided for under section
7527 of the Internal Revenue Code of
1986;
``(iv) providing assistance to
eligible individuals in enrolling in
qualified health insurance;
``(v) the development or
installation of necessary data
management systems; and
``(vi) any other expenses
determined appropriate by the
Secretary, including start-up costs and
on going administrative expenses to
carry out clauses (iv) through (ix) of
paragraph (2)(A).
``(2) Qualified health insurance.--For purposes of
this subsection and subsection (g)--
``(A) In general.--The term `qualified
health insurance' means any of the following:
``(i) Coverage under a COBRA
continuation provision (as defined in
section 733(d)(1) of the Employee
Retirement Income Security Act of
1974).
``(ii) State-based continuation
coverage provided by the State under a
State law that requires such coverage.
``(iii) Coverage offered through a
qualified State high risk pool (as
defined in section 2744(c)(2) of the
Public Health Service Act).
``(iv) Coverage under a health
insurance program offered for State
employees.
``(v) Coverage under a State-based
health insurance program that is
comparable to the health insurance
program offered for State employees.
``(vi) Coverage through an
arrangement entered into by a State
and--
``(I) a group health plan
(including such a plan which is
a multiemployer plan as defined
in section 3(37) of the
Employee Retirement Income
Security Act of 1974),
``(II) an issuer of health
insurance coverage,
``(III) an administrator,
or
``(IV) an employer.
``(vii) Coverage offered through a
State arrangement with a private sector
health care coverage purchasing pool.
``(viii) Coverage under a State-
operated health plan that does not
receive any Federal financial
participation.
``(ix) Coverage under a group
health plan that is available through
the employment of the eligible
individual's spouse.
``(x) In the case of any eligible
individual and such individual's
qualifying family members, coverage
under individual health insurance if
the eligible individual was covered
under individual health insurance
during the entire 30-day period that
ends on the date that such individual
became separated from the employment
which qualified such individual for--
``(I) in the case of an
eligible TAA recipient, the
allowance described in section
35(c)(2) of the Internal
Revenue Code of 1986,
``(II) in the case of an
eligible alternative TAA
recipient, the benefit
described in section
35(c)(3)(B) of such Code, or
``(III) in the case of any
eligible PBGC pension
recipient, the benefit
described in section
35(c)(4)(B) of such Code.
For purposes of this clause, the term
`individual health insurance' means any
insurance which constitutes medical
care offered to individuals other than
in connection with a group health plan
and does not include Federal- or State-
based health insurance coverage.
``(B) Requirements for state-based
coverage.--
``(i) In general.--The term
`qualified health insurance' does not
include any coverage described in
clauses (ii) through (viii) of
subparagraph (A) unless the State
involved has elected to have such
coverage treated as qualified health
insurance under this paragraph and such
coverage meets the following
requirements:
``(I) Guaranteed issue.--
Each qualifying individual is
guaranteed enrollment if the
individual pays the premium for
enrollment or provides a
qualified health insurance
costs credit eligibility
certificate described in
section 7527 of the Internal
Revenue Code of 1986 and pays
the remainder of such premium.
``(II) No imposition of
preexisting condition
exclusion.--No pre-existing
condition limitations are
imposed with respect to any
qualifying individual.
``(III) Nondiscriminatory
premium.--The total premium (as
determined without regard to
any subsidies) with respect to
a qualifying individual may not
be greater than the total
premium (as so determined) for
a similarly situated individual
who is not a qualifying
individual.
``(IV) Same benefits.--
Benefits under the coverage are
the same as (or substantially
similar to) the benefits
provided to similarly situated
individuals who are not
qualifying individuals.
``(ii) Qualifying individual.--For
purposes of this subparagraph, the term
`qualifying individual' means--
``(I) an eligible
individual for whom, as of the
date on which the individual
seeks to enroll in clauses (ii)
through (viii) of subparagraph
(A), the aggregate of the
periods of creditable coverage
(as defined in section 9801(c)
of the Internal Revenue Code of
1986) is 3 months or longer and
who, with respect to any month,
meets the requirements of
clauses (iii) and (iv) of
section 35(b)(1)(A) of such
Code; and
``(II) the qualifying
family members of such eligible
individual.
``(C) Exception.--The term `qualified
health insurance' shall not include--
``(i) a flexible spending or
similar arrangement, and
``(ii) any insurance if
substantially all of its coverage is of
excepted benefits described in section
733(c) of the Employee Retirement
Income Security Act of 1974.
``(3) Availability of funds.--
``(A) Expedited procedures.--With respect
to applications submitted by States or entities
for grants under this subsection, the Secretary
shall--
``(i) not later than 15 days after
the date on which the Secretary
receives a completed application from a
State or entity, notify the State or
entity of the determination of the
Secretary with respect to the approval
or disapproval of such application;
``(ii) in the case of an
application of a State or other entity
that is disapproved by the Secretary,
provide technical assistance, at the
request of the State or entity, in a
timely manner to enable the State or
entity to submit an approved
application; and
``(iii) develop procedures to
expedite the provision of funds to
States and entities with approved
applications.
``(B) Availability and distribution of
funds.--The Secretary shall ensure that funds
made available under section 174(c)(1)(A) to
carry out subsection (a)(4)(A) are available to
States and entities throughout the period
described in section 174(c)(2)(A).
``(4) Eligible individual defined.--For purposes of
this subsection and subsection (g), the term `eligible
individual' means--
``(A) an eligible TAA recipient (as defined
in section 35(c)(2) of the Internal Revenue
Code of 1986),
``(B) an eligible alternative TAA recipient
(as defined in section 35(c)(3) of the Internal
Revenue Code of 1986), and
``(C) an eligible PBGC pension recipient
(as defined in section 35(c)(4) of the Internal
Revenue Code of 1986),
who, as of the first day of the month, does not have
other specified coverage and is not imprisoned under
Federal, State, or local authority.
``(5) Qualifying family member defined.--For
purposes of this subsection and subsection (g)--
``(A) In general.--The term `qualifying
family member' means--
``(i) the eligible individual's
spouse, and
``(ii) any dependent of the
eligible individual with respect to
whom the individual is entitled to a
deduction under section 151(c) of the
Internal Revenue Code of 1986.
Such term does not include any individual who
has other specified coverage.
``(B) Special dependency test in case of
divorced parents, etc.--If paragraph (2) or (4)
of section 152(e) of such Code applies to any
child with respect to any calendar year, in the
case of any taxable year beginning in such
calendar year, such child shall be treated as
described in subparagraph (A)(ii) with respect
to the custodial parent (within the meaning of
section 152(e)(1) of such Code) and not with
respect to the noncustodial parent.
``(6) State.--For purposes of this subsection and
subsection (g), the term `State' includes an entity as
defined in subsection (c)(1)(B).
``(7) Other specified coverage.--For purposes of
this subsection, an individual has other specified
coverage for any month if, as of the first day of such
month--
``(A) Subsidized coverage.--
``(i) In general.--Such individual
is covered under any insurance which
constitutes medical care (except
insurance substantially all of the
coverage of which is of excepted
benefits described in section 9832(c)
of the Internal Revenue Code of 1986)
under any health plan maintained by any
employer (or former employer) of the
taxpayer or the taxpayer's spouse and
at least 50 percent of the cost of such
coverage (determined under section
4980B of such Code) is paid or incurred
by the employer.
``(ii) Eligible alternative taa
recipients.--In the case of an eligible
alternative TAA recipient (as defined
in section 35(c)(3) of the Internal
Revenue Code of 1986), such individual
is either--
``(I) eligible for coverage
under any qualified health
insurance (other than insurance
described in clause (i), (ii),
or (vi) of paragraph (2)(A))
under which at least 50 percent
of the cost of coverage
(determined under section
4980B(f)(4) of such Code) is
paid or incurred by an employer
(or former employer) of the
taxpayer or the taxpayer's
spouse, or
``(II) covered under any
such qualified health insurance
under which any portion of the
cost of coverage (as so
determined) is paid or incurred
by an employer (or former
employer) of the taxpayer or
the taxpayer's spouse.
``(iii) Treatment of cafeteria
plans.--For purposes of clauses (i) and
(ii), the cost of coverage shall be
treated as paid or incurred by an
employer to the extent the coverage is
in lieu of a right to receive cash or
other qualified benefits under a
cafeteria plan (as defined in section
125(d) of the Internal Revenue Code of
1986).
``(B) Coverage under medicare, medicaid, or
schip.--Such individual--
``(i) is entitled to benefits under
part A of title XVIII of the Social
Security Act or is enrolled under part
B of such title, or
``(ii) is enrolled in the program
under title XIX or XXI of such Act
(other than under section 1928 of such
Act).
``(C) Certain other coverage.--Such
individual--
``(i) is enrolled in a health
benefits plan under chapter 89 of title
5, United States Code, or
``(ii) is entitled to receive
benefits under chapter 55 of title 10,
United States Code.
``(g) Interim Health Insurance Coverage and Other
Assistance.--
``(1) In general.--Funds made available to a State
or entity under paragraph (4)(B) of subsection (a) may
be used by the State or entity to provide assistance
and support services to eligible individuals, including
health care coverage to the extent provided under
subsection (f)(1)(A), transportation, child care,
dependent care, and income assistance.
``(2) Income support.--With respect to any income
assistance provided to an eligible individual with such
funds, such assistance shall supplement and not
supplant other income support or assistance provided
under chapter 2 of title II of the Trade Act of 1974
(19 U.S.C. 2271 et seq.) (as in effect on the day
before the effective date of the Trade Act of 2002) or
the unemployment compensation laws of the State where
the eligible individual resides.
``(3) Health insurance coverage.--With respect to
any assistance provided to an eligible individual with
such funds in enrolling in qualified health insurance,
the following rules shall apply:
``(A) The State or entity may provide
assistance in obtaining such coverage to the
eligible individual and to such individual's
qualifying family members.
``(B) Such assistance shall supplement and
may not supplant any other State or local funds
used to provide health care coverage and may
not be included in determining the amount of
non-Federal contributions required under any
program.
``(4) Availability of funds.--
``(A) Expedited procedures.--With respect
to applications submitted by States or entities
for grants under this subsection, the Secretary
shall--
``(i) not later than 15 days after
the date on which the Secretary
receives a completed application from a
State or entity, notify the State or
entity of the determination of the
Secretary with respect to the approval
or disapproval of such application;
``(ii) in the case of an
application of a State or entity that
is disapproved by the Secretary,
provide technical assistance, at the
request of the State or entity, in a
timely manner to enable the State or
entity to submit an approved
application; and
``(iii) develop procedures to
expedite the provision of funds to
States and entities with approved
applications.
``(B) Availability and distribution of
funds.--The Secretary shall ensure that funds
made available under section 174(c)(1)(B) to
carry out subsection (a)(4)(B) are available to
States and entities throughout the period
described in section 174(c)(2)(B).
``(5) Inclusion of certain individuals as eligible
individuals.--For purposes of this subsection, the term
`eligible individual' includes an individual who is a
member of a group of workers certified after April 1,
2002, under chapter 2 of title II of the Trade Act of
1974 (as in effect on the day before the effective date
of the Trade Act of 2002) and is participating in the
trade readjustment allowance program under such chapter
(as so in effect) or who would be determined to be
participating in such program under such chapter (as so
in effect) if such chapter were applied without regard
to section 231(a)(3)(B) of the Trade Act of 1974 (as so
in effect).''.
(c) Authorization of Appropriations.--Section 174 of the
Workforce Investment Act of 1998 (29 U.S.C. 2919) is amended by
adding at the end the following:
``(c) Assistance for Eligible Workers.--
``(1) Authorization and appropriation for fiscal
year 2002.--There are authorized to be appropriated and
appropriated--
``(A) to carry out subsection (a)(4)(A) of
section 173, $10,000,000 for fiscal year 2002;
and
``(B) to carry out subsection (a)(4)(B) of
section 173, $50,000,000 for fiscal year 2002.
``(2) Authorization of appropriations for
subsequent fiscal years.--There are authorized to be
appropriated--
``(A) to carry out subsection (a)(4)(A) of
section 173, $60,000,000 for each of fiscal
years 2003 through 2007; and
``(B) to carry out subsection (a)(4)(B) of
section 173--
``(i) $100,000,000 for fiscal year
2003; and
``(ii) $50,000,000 for fiscal year
2004.
``(3) Availability of funds.--Funds appropriated
pursuant to--
``(A) paragraphs (1)(A) and (2)(A) for each
fiscal year shall, notwithstanding section
189(g), remain available for obligation during
the pendency of any outstanding claim under the
Trade Act of 1974, as amended by the Trade Act
of 2002; and
``(B) paragraph (1)(B) and (2)(B), for each
fiscal year shall, notwithstanding section
189(g), remain available during the period that
begins on the date of enactment of the Trade
Act of 2002 and ends on September 30, 2004.''.
(d) Conforming Amendment.--Section 132(a)(2)(A) of the
Workforce Investment Act of 1998 (29 U.S.C. 2862(a)(2)(A)) is
amended by inserting ``, other than under subsection (a)(4),
(f), and (g)'' after ``grants''.
(e) Temporary Extension of COBRA Election Period for
Certain Individuals.--
(1) ERISA amendments.--Section 605 of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1165)
is amended--
(A) by inserting ``(a) In General.--''
before ``For purposes of this part''; and
(B) by adding at the end the following:
``(b) Temporary Extension of COBRA Election Period for
Certain Individuals.--
``(1) In general.--In the case of a nonelecting
TAA-eligible individual and notwithstanding subsection
(a), such individual may elect continuation coverage
under this part during the 60-day period that begins on
the first day of the month in which the individual
becomes a TAA-eligible individual, but only if such
election is made not later than 6 months after the date
of the TAA-related loss of coverage.
``(2) Commencement of coverage; no reach-back.--Any
continuation coverage elected by a TAA-eligible
individual under paragraph (1) shall commence at the
beginning of the 60-day election period described in
such paragraph and shall not include any period prior
to such 60-day election period.
``(3) Preexisting conditions.--With respect to an
individual who elects continuation coverage pursuant to
paragraph (1), the period--
``(A) beginning on the date of the TAA-
related loss of coverage, and
``(B) ending on the first day of the 60-day
election period described in paragraph (1),
shall be disregarded for purposes of determining the
63-day periods referred to in section 701(c)(2),
section 2701(c)(2) of the Public Health Service Act,
and section 9801(c)(2) of the Internal Revenue Code of
1986.
``(4) Definitions.--For purposes of this
subsection:
``(A) Nonelecting taa-eligible
individual.--The term `nonelecting TAA-eligible
individual' means a TAA-eligible individual
who--
``(i) has a TAA-related loss of
coverage; and
``(ii) did not elect continuation
coverage under this part during the
TAA-related election period.
``(B) TAA-eligible individual.--The term
`TAA-eligible individual' means--
``(i) an eligible TAA recipient (as
defined in paragraph (2) of section
35(c) of the Internal Revenue Code of
1986), and
``(ii) an eligible alternative TAA
recipient (as defined in paragraph (3)
of such section).
``(C) TAA-related election period.--The
term `TAA-related election period' means, with
respect to a TAA-related loss of coverage, the
60-day election period under this part which is
a direct consequence of such loss.
``(D) TAA-related loss of coverage.--The
term `TAA-related loss of coverage' means, with
respect to an individual whose separation from
employment gives rise to being an TAA-eligible
individual, the loss of health benefits
coverage associated with such separation.''.
(2) PHSA amendments.--Section 2205 of the Public
Health Service Act (42 U.S.C. 300bb-5) is amended--
(A) by inserting ``(a) In General.--''
before ``For purposes of this title''; and
(B) by adding at the end the following:
``(b) Temporary Extension of COBRA Election Period for
Certain Individuals.--
``(1) In general.--In the case of a nonelecting
TAA-eligible individual and notwithstanding subsection
(a), such individual may elect continuation coverage
under this title during the 60-day period that begins
on the first day of the month in which the individual
becomes a TAA-eligible individual, but only if such
election is made not later than 6 months after the date
of the TAA-related loss of coverage.
``(2) Commencement of coverage; no reach-back.--Any
continuation coverage elected by a TAA-eligible
individual under paragraph (1) shall commence at the
beginning of the 60-day election period described in
such paragraph and shall not include any period prior
to such 60-day election period.
``(3) Preexisting conditions.--With respect to an
individual who elects continuation coverage pursuant to
paragraph (1), the period--
``(A) beginning on the date of the TAA-
related loss of coverage, and
``(B) ending on the first day of the 60-day
election period described in paragraph (1),
shall be disregarded for purposes of determining the
63-day periods referred to in section 2701(c)(2),
section 701(c)(2) of the Employee Retirement Income
Security Act of 1974, and section 9801(c)(2) of the
Internal Revenue Code of 1986.
``(4) Definitions.--For purposes of this
subsection:
``(A) Nonelecting taa-eligible
individual.--The term `nonelecting TAA-eligible
individual' means a TAA-eligible individual
who--
``(i) has a TAA-related loss of
coverage; and
``(ii) did not elect continuation
coverage under this part during the
TAA-related election period.
``(B) TAA-eligible individual.--The term
`TAA-eligible individual' means--
``(i) an eligible TAA recipient (as
defined in paragraph (2) of section
35(c) of the Internal Revenue Code of
1986), and
``(ii) an eligible alternative TAA
recipient (as defined in paragraph (3)
of such section).
``(C) TAA-related election period.--The
term `TAA-related election period' means, with
respect to a TAA-related loss of coverage, the
60-day election period under this part which is
a direct consequence of such loss.
``(D) TAA-related loss of coverage.--The
term `TAA-related loss of coverage' means, with
respect to an individual whose separation from
employment gives rise to being an TAA-eligible
individual, the loss of health benefits
coverage associated with such separation.''.
(3) IRC amendments.--Paragraph (5) of section
4980B(f) of the Internal Revenue Code of 1986 (relating
to election) is amended by adding at the end the
following:
``(C) Temporary extension of cobra election
period for certain individuals.--
``(i) In general.--In the case of a
nonelecting TAA-eligible individual and
notwithstanding subparagraph (A), such
individual may elect continuation
coverage under this subsection during
the 60-day period that begins on the
first day of the month in which the
individual becomes a TAA-eligible
individual, but only if such election
is made not later than 6 months after
the date of the TAA-related loss of
coverage.
``(ii) Commencement of coverage; no
reach-back.--Any continuation coverage
elected by a TAA-eligible individual
under clause (i) shall commence at the
beginning of the 60-day election period
described in such paragraph and shall
not include any period prior to such
60-day election period.
``(iii) Preexisting conditions.--
With respect to an individual who
elects continuation coverage pursuant
to clause (i), the period--
``(I) beginning on the date
of the TAA-related loss of
coverage, and
``(II) ending on the first
day of the 60-day election
period described in clause (i),
shall be disregarded for purposes of
determining the 63-day periods referred
to in section 9801(c)(2), section
701(c)(2) of the Employee Retirement
Income Security Act of 1974, and
section 2701(c)(2) of the Public Health
Service Act.
``(iv) Definitions.--For purposes
of this subsection:
``(I) Nonelecting taa-
eligible individual.--The term
`nonelecting TAA-eligible
individual' means a TAA-
eligible individual who has a
TAA-related loss of coverage
and did not elect continuation
coverage under this subsection
during the TAA-related election
period.
``(II) TAA-eligible
individual.--The term `TAA-
eligible individual' means an
eligible TAA recipient (as
defined in paragraph (2) of
section 35(c)) and an eligible
alternative TAA recipient (as
defined in paragraph (3) of
such section).
``(III) TAA-related
election period.--The term
`TAA-related election period'
means, with respect to a TAA-
related loss of coverage, the
60-day election period under
this subsection which is a
direct consequence of such
loss.
``(IV) TAA-related loss of
coverage.--The term `TAA-
related loss of coverage'
means, with respect to an
individual whose separation
from employment gives rise to
being an TAA-eligible
individual, the loss of health
benefits coverage associated
with such separation.''.
(f) Rule of Construction.--Nothing in this title (or the
amendments made by this title), other than provisions relating
to COBRA continuation coverage and reporting requirements,
shall be construed as creating any new mandate on any party
regarding health insurance coverage.
TITLE III--CUSTOMS REAUTHORIZATION
SEC. 301. SHORT TITLE.
This Act may be cited as the ``Customs Border Security Act
of 2002''.
Subtitle A--United States Customs Service
CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL
OPERATIONS
SEC. 311. AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS,
COMMERCIAL OPERATIONS, AND AIR AND MARINE
INTERDICTION.
(a) Noncommercial Operations.--Section 301(b)(1) of the
Customs Procedural Reform and Simplification Act of 1978 (19
U.S.C. 2075(b)(1)) is amended--
(1) by striking subparagraph (A), and inserting the
following:
``(A) $1,365,456,000 for fiscal year
2003.''; and
(2) by striking subparagraph (B), and inserting the
following:
``(B) $1,399,592,400 for fiscal year
2004.''.
(b) Commercial Operations.--
(1) In general.--Section 301(b)(2)(A) of the
Customs Procedural Reform and Simplification Act of
1978 (19 U.S.C. 2075(b)(2)(A)) is amended--
(A) by striking clause (i), and inserting
the following:
``(i) $1,642,602,000 for fiscal year
2003.''; and
(B) by striking clause (ii), and inserting
the following:
``(ii) $1,683,667,050 for fiscal year
2004.''.
(2) Automated commercial environment computer
system.--Of the amount made available for each of
fiscal years 2003 and 2004 under section 301(b)(2)(A)
of the Customs Procedural Reform and Simplification Act
of 1978 (19 U.S.C. 2075(b)(2)(A)), as amended by
paragraph (1), $308,000,000 shall be available until
expended for each such fiscal year for the development,
establishment, and implementation of the Automated
Commercial Environment computer system.
(3) Reports.--Not later than 90 days after the date
of the enactment of this Act, and not later than the
end of each subsequent 90-day period, the Commissioner
of Customs shall prepare and submit to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate a report
demonstrating that the development and establishment of
the Automated Commercial Environment computer system is
being carried out in a cost-effective manner and meets
the modernization requirements of title VI of the North
American Free Trade Agreement Implementation Act.
(c) Air and Marine Interdiction.--Section 301(b)(3) of the
Customs Procedural Reform and Simplification Act of 1978 (19
U.S.C. 2075(b)(3)) is amended--
(1) by striking subparagraph (A), and inserting the
following:
``(A) $170,829,000 for fiscal year 2003.'';
and
(2) by striking subparagraph (B), and inserting the
following:
``(B) $175,099,725 for fiscal year 2004.''.
(d) Submission of Out-Year Budget Projections.--Section
301(a) of the Customs Procedural Reform and Simplification Act
of 1978 (19 U.S.C. 2075(a)) is amended by adding at the end the
following:
``(3) By not later than the date on which the President
submits to Congress the budget of the United States Government
for a fiscal year, the Commissioner of Customs shall submit to
the Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate the projected amount
of funds for the succeeding fiscal year that will be necessary
for the operations of the Customs Service as provided for in
subsection (b).''.
SEC. 312. ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR
THE UNITED STATES-MEXICO BORDER, UNITED STATES-
CANADA BORDER, AND FLORIDA AND THE GULF COAST
SEAPORTS.
(a) Fiscal Year 2003.--Of the amounts made available for
fiscal year 2003 under section 301(b)(1)(A) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(1)(A)), as amended by section 311(a) of this Act,
$90,244,000 shall be available until expended for acquisition
and other expenses associated with implementation and
deployment of antiterrorist and illicit narcotics detection
equipment along the United States-Mexico border, the United
States-Canada border, and Florida and the Gulf Coast seaports,
as follows:
(1) United states-mexico border.--For the United
States-Mexico border, the following:
(A) $6,000,000 for 8 Vehicle and Container
Inspection Systems (VACIS).
(B) $11,200,000 for 5 mobile truck x-rays
with transmission and backscatter imaging.
(C) $13,000,000 for the upgrade of 8 fixed-
site truck x-rays from the present energy level
of 450,000 electron volts to 1,000,000 electron
volts (1-MeV).
(D) $7,200,000 for 8 1-MeV pallet x-rays.
(E) $1,000,000 for 200 portable contraband
detectors (busters) to be distributed among
ports where the current allocations are
inadequate.
(F) $600,000 for 50 contraband detection
kits to be distributed among all southwest
border ports based on traffic volume.
(G) $500,000 for 25 ultrasonic container
inspection units to be distributed among all
ports receiving liquid-filled cargo and to
ports with a hazardous material inspection
facility.
(H) $2,450,000 for 7 automated targeting
systems.
(I) $360,000 for 30 rapid tire deflator
systems to be distributed to those ports where
port runners are a threat.
(J) $480,000 for 20 portable Treasury
Enforcement Communications Systems (TECS)
terminals to be moved among ports as needed.
(K) $1,000,000 for 20 remote watch
surveillance camera systems at ports where
there are suspicious activities at loading
docks, vehicle queues, secondary inspection
lanes, or areas where visual surveillance or
observation is obscured.
(L) $1,254,000 for 57 weigh-in-motion
sensors to be distributed among the ports with
the greatest volume of outbound traffic.
(M) $180,000 for 36 AM traffic information
radio stations, with 1 station to be located at
each border crossing.
(N) $1,040,000 for 260 inbound vehicle
counters to be installed at every inbound
vehicle lane.
(O) $950,000 for 38 spotter camera systems
to counter the surveillance of customs
inspection activities by persons outside the
boundaries of ports where such surveillance
activities are occurring.
(P) $390,000 for 60 inbound commercial
truck transponders to be distributed to all
ports of entry.
(Q) $1,600,000 for 40 narcotics vapor and
particle detectors to be distributed to each
border crossing.
(R) $400,000 for license plate reader
automatic targeting software to be installed at
each port to target inbound vehicles.
(2) United states-canada border.--For the United
States-Canada border, the following:
(A) $3,000,000 for 4 Vehicle and Container
Inspection Systems (VACIS).
(B) $8,800,000 for 4 mobile truck x-rays
with transmission and backscatter imaging.
(C) $3,600,000 for 4 1-MeV pallet x-rays.
(D) $250,000 for 50 portable contraband
detectors (busters) to be distributed among
ports where the current allocations are
inadequate.
(E) $300,000 for 25 contraband detection
kits to be distributed among ports based on
traffic volume.
(F) $240,000 for 10 portable Treasury
Enforcement Communications Systems (TECS)
terminals to be moved among ports as needed.
(G) $400,000 for 10 narcotics vapor and
particle detectors to be distributed to each
border crossing based on traffic volume.
(3) Florida and gulf coast seaports.--For Florida
and the Gulf Coast seaports, the following:
(A) $4,500,000 for 6 Vehicle and Container
Inspection Systems (VACIS).
(B) $11,800,000 for 5 mobile truck x-rays
with transmission and backscatter imaging.
(C) $7,200,000 for 8 1-MeV pallet x-rays.
(D) $250,000 for 50 portable contraband
detectors (busters) to be distributed among
ports where the current allocations are
inadequate.
(E) $300,000 for 25 contraband detection
kits to be distributed among ports based on
traffic volume.
(b) Fiscal Year 2004.--Of the amounts made available for
fiscal year 2004 under section 301(b)(1)(B) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)(1)(B)), as amended by section 311(a) of this Act,
$9,000,000 shall be available until expended for the
maintenance and support of the equipment and training of
personnel to maintain and support the equipment described in
subsection (a).
(c) Acquisition of Technologically Superior Equipment;
Transfer of Funds.--
(1) In general.--The Commissioner of Customs may
use amounts made available for fiscal year 2003 under
section 301(b)(1)(A) of the Customs Procedural Reform
and Simplification Act of 1978 (19 U.S.C.
2075(b)(1)(A)), as amended by section 311(a) of this
Act, for the acquisition of equipment other than the
equipment described in subsection (a) if such other
equipment--
(A)(i) is technologically superior to the
equipment described in subsection (a); and
(ii) will achieve at least the same results
at a cost that is the same or less than the
equipment described in subsection (a); or
(B) can be obtained at a lower cost than
the equipment described in subsection (a).
(2) Transfer of funds.--Notwithstanding any other
provision of this section, the Commissioner of Customs
may reallocate an amount not to exceed 10 percent of--
(A) the amount specified in any of
subparagraphs (A) through (R) of subsection
(a)(1) for equipment specified in any other of
such subparagraphs (A) through (R);
(B) the amount specified in any of
subparagraphs (A) through (G) of subsection
(a)(2) for equipment specified in any other of
such subparagraphs (A) through (G); and
(C) the amount specified in any of
subparagraphs (A) through (E) of subsection
(a)(3) for equipment specified in any other of
such subparagraphs (A) through (E).
SEC. 313. COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS.
As part of the annual performance plan for each of the
fiscal years 2003 and 2004 covering each program activity set
forth in the budget of the United States Customs Service, as
required under section 1115 of title 31, United States Code,
the Commissioner of Customs shall establish performance goals
and performance indicators, and shall comply with all other
requirements contained in paragraphs (1) through (6) of
subsection (a) of such section with respect to each of the
activities to be carried out pursuant to section 312.
CHAPTER 2--CHILD CYBER-SMUGGLING CENTER OF THE CUSTOMS SERVICE
SEC. 321. AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD
PORNOGRAPHY/CHILD SEXUAL EXPLOITATION.
(a) Authorization of Appropriations.--There is authorized
to be appropriated to the Customs Service $10,000,000 for
fiscal year 2003 to carry out the program to prevent child
pornography/child sexual exploitation established by the Child
Cyber-Smuggling Center of the Customs Service.
(b) Use of Amounts for Child Pornography Cyber Tipline.--Of
the amount appropriated under subsection (a), the Customs
Service shall provide 3.75 percent of such amount to the
National Center for Missing and Exploited Children for the
operation of the child pornography cyber tipline of the Center
and for increased public awareness of the tipline.
CHAPTER 3--MISCELLANEOUS PROVISIONS
SEC. 331. ADDITIONAL CUSTOMS SERVICE OFFICERS FOR UNITED STATES-CANADA
BORDER.
Of the amount made available for fiscal year 2003 under
paragraphs (1) and (2)(A) of section 301(b) of the Customs
Procedural Reform and Simplification Act of 1978 (19 U.S.C.
2075(b)), as amended by section 311 of this Act, $28,300,000
shall be available until expended for the Customs Service to
hire approximately 285 additional Customs Service officers to
address the needs of the offices and ports along the United
States-Canada border.
SEC. 332. STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE
CUSTOMS SERVICE.
(a) Study.--The Commissioner of Customs shall conduct a
study of current personnel practices of the Customs Service,
including an overview of performance standards and the effect
and impact of the collective bargaining process on drug
interdiction efforts of the Customs Service and a comparison of
duty rotation policies of the Customs Service and other Federal
agencies that employ similarly situated personnel.
(b) Report.--Not later than 120 days after the date of the
enactment of this Act, the Commissioner of Customs shall submit
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
report containing the results of the study conducted under
subsection (a).
SEC. 333. STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING
PROCEDURES OF THE CUSTOMS SERVICE.
(a) Study.--(1) The Commissioner of Customs shall conduct a
study of actions by the Customs Service to ensure that
appropriate training is being provided to Customs Service
personnel who are responsible for financial auditing of
importers.
(2) In conducting the study, the Commissioner--
(A) shall specifically identify those actions taken
to comply with provisions of law that protect the
privacy and trade secrets of importers, such as section
552(b) of title 5, United States Code, and section 1905
of title 18, United States Code; and
(B) shall provide for public notice and comment
relating to verification of the actions described in
subparagraph (A).
(b) Report.--Not later than 6 months after the date of the
enactment of this Act, the Commissioner of Customs shall submit
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
report containing the results of the study conducted under
subsection (a).
SEC. 334. ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM;
REPORTS.
(a) Establishment and Implementation.--
(1) In general.--Not later than September 30, 2003,
the Commissioner of Customs shall, in accordance with
the audit of the Customs Service's fiscal years 2000
and 1999 financial statements (as contained in the
report of the Office of the Inspector General of the
Department of the Treasury issued on February 23,
2001), establish and implement a cost accounting system
for expenses incurred in both commercial and
noncommercial operations of the Customs Service.
(2) Additional requirement.--The cost accounting
system described in paragraph (1) shall provide for an
identification of expenses based on the type of
operation, the port at which the operation took place,
the amount of time spent on the operation by personnel
of the Customs Service, and an identification of
expenses based on any other appropriate classification
necessary to provide for an accurate and complete
accounting of the expenses.
(b) Reports.--Beginning on the date of the enactment of
this Act and ending on the date on which the cost accounting
system described in subsection (a) is fully implemented, the
Commissioner of Customs shall prepare and submit to Congress on
a quarterly basis a report on the progress of implementing the
cost accounting system pursuant to subsection (a).
SEC. 335. STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTIVE
RULINGS.
(a) Study.--The Comptroller General shall conduct a study
on the extent to which the Office of Regulations and Rulings of
the Customs Service has made improvements to decrease the
amount of time to issue prospective rulings from the date on
which a request for the ruling is received by the Customs
Service.
(b) Report.--Not later than 1 year after the date of the
enactment of this Act, the Comptroller General shall submit to
the Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate a report containing
the results of the study conducted under subsection (a).
(c) Definition.--In this section, the term ``prospective
ruling'' means a ruling that is requested by an importer on
goods that are proposed to be imported into the United States
and that relates to the proper classification, valuation, or
marking of such goods.
SEC. 336. STUDY AND REPORT RELATING TO CUSTOMS USER FEES.
(a) Study.--The Comptroller General shall conduct a study
on the extent to which the amount of each customsuser fee
imposed under section 13031(a) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(a)) is commensurate with the
level of services provided by the Customs Service relating to the fee
so imposed.
(b) Report.--Not later than 120 days after the date of the
enactment of this Act, the Comptroller General shall submit to
the Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate a report in
classified form containing--
(1) the results of the study conducted under
subsection (a); and
(2) recommendations for the appropriate amount of
the customs user fees if such results indicate that the
fees are not commensurate with the level of services
provided by the Customs Service.
SEC. 337. FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES.
(a) In General.--Section 13031(b)(9) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(b)(9))
is amended as follows:
(1) In subparagraph (A)--
(A) in the matter preceding clause (i), by
striking ``the processing of merchandise that
is informally entered or released'' and
inserting ``the processing of letters,
documents, records, shipments, merchandise, or
any other item that is valued at an amount that
is less than $2,000 (or such higher amount as
the Secretary of the Treasury may set by
regulation pursuant to section 498 of the
Tariff Act of 1930), except such items entered
for transportation and exportation or immediate
exportation''; and
(B) by striking clause (ii), and inserting
the following:
``(ii) Subject to the provisions of
subparagraph (B), in the case of an
express consignment carrier facility or
centralized hub facility, $.66 per
individual airway bill or bill of
lading.''.
(2) By redesignating subparagraph (B) as
subparagraph (C) and inserting after subparagraph (A)
the following:
``(B)(i) Beginning in fiscal year 2004, the
Secretary of the Treasury may adjust (not more
than once per fiscal year) the amount described
in subparagraph (A)(ii) to an amount that is
not less than $.35 and not more than $1.00 per
individual airway bill or bill of lading. The
Secretary shall provide notice in the Federal
Register of a proposed adjustment under the
preceding sentence and the reasons therefor and
shall allow for public comment on the proposed
adjustment.
``(ii) Notwithstanding section 451 of the
Tariff Act of 1930, the payment required by
subparagraph (A)(ii) shall be the only payment
required for reimbursement of the Customs
Service in connection with the processing of an
individual airway bill or bill of lading in
accordance with such subparagraph and for
providing services at express consignment
carrier facilities or centralized hub
facilities, except that the Customs Service may
require such facilities to cover expenses of
the Customs Service for adequate office space,
equipment, furnishings, supplies, and security.
``(iii)(I) The payment required by
subparagraph (A)(ii) and clause (ii) of this
subparagraph shall be paid on a quarterly basis
by the carrier using the facility to the
Customs Service in accordance with regulations
prescribed by the Secretary of the Treasury.
``(II) 50 percent of the amount of payments
received under subparagraph (A)(ii) and clause
(ii) of this subparagraph shall, in accordance
with section 524 of the Tariff Act of 1930, be
deposited in the Customs User Fee Account and
shall be used to directly reimburse each
appropriation for the amount paid out of that
appropriation for the costs incurred in
providing services to express consignment
carrier facilities or centralized hub
facilities. Amounts deposited in accordance
with the preceding sentence shall be available
until expended for the provision of customs
services to express consignment carrier
facilities or centralized hub facilities.
``(III) Notwithstanding section 524 of the
Tariff Act of 1930, the remaining 50 percent of
the amount of payments received under
subparagraph (A)(ii) and clause (ii) of this
subparagraph shall be paid to the Secretary of
the Treasury, which is in lieu of the payment
of fees under subsection (a)(10) of this
section.''.
(b) Effective Date.--The amendments made by subsection (a)
take effect on October 1, 2002.
SEC. 338. NATIONAL CUSTOMS AUTOMATION PROGRAM.
Section 411(b) of the Tariff Act of 1930 (19 U.S.C.
1411(b)) is amended by striking the second sentence and
inserting the following: ``The Secretary may, by regulation,
require the electronic submission of information described in
subsection (a) or any other information required to be
submitted to the Customs Service separately pursuant to this
subpart.''.
SEC. 339. AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS STAFFING.
There are authorized to be appropriated to the Department
of Treasury such sums as may be necessary to provide an
increase in the annual rate of basic pay--
(1) for all journeyman Customs inspectors and
Canine Enforcement Officers who have completed at least
one year's service and are receiving an annual rate of
basic pay for positions at GS-9 of the General Schedule
under section 5332 of title 5, United States Code, from
the annual rate of basic pay payable for positions at
GS-9 of the General Schedule under such section 5332,
to an annual rate of basic pay payable for positions at
GS-11 of the General Schedule under such section 5332;
and
(2) for the support staff associated with the
personnel described in subparagraph (A), at the
appropriate GS level of the General Schedule under such
section 5332.
CHAPTER 4--ANTITERRORISM PROVISIONS
SEC. 341. IMMUNITY FOR UNITED STATES OFFICIALS THAT ACT IN GOOD FAITH.
(a) Immunity.--Section 3061 of the Revised Statutes (19
U.S.C. 482) is amended--
(1) by striking ``Any of the officers'' and
inserting ``(a) Any of the officers''; and
(2) by adding at the end the following:
``(b) Any officer or employee of the United States
conducting a search of a person pursuant to subsection (a)
shall not be held liable for any civil damages as a result of
such search if the officer or employee performed the search in
good faith and used reasonable means while effectuating such
search.''.
(b) Requirement To Post Policy and Procedures for Searches
of Passengers.--Not later than 30 days after the date of the
enactment of this Act, the Commissioner of Customs shall ensure
that at each Customs border facility appropriate notice is
posted that provides a summary of the policy and procedures of
the Customs Service for searching passengers, including a
statement of the policy relating to the prohibition on the
conduct of profiling of passengers based on gender, race,
color, religion, or ethnic background.
SEC. 342. EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, OR STAFFING
OF THE CUSTOMS SERVICE.
Section 318 of the Tariff Act of 1930 (19 U.S.C. 1318) is
amended--
(1) by striking ``Whenever the President'' and
inserting ``(a) Whenever the President''; and
(2) by adding at the end the following:
``(b)(1) Notwithstanding any other provision of law, the
Secretary of the Treasury, when necessary to respond to a
national emergency declared under the National Emergencies Act
(50 U.S.C. 1601 et seq.) or to a specific threat to human life
or national interests, is authorized to take the following
actions on a temporary basis:
``(A) Eliminate, consolidate, or relocate any
office or port of entry of the Customs Service.
``(B) Modify hours of service, alter services
rendered at any location, or reduce the number of
employees at any location.
``(C) Take any other action that may be necessary
to respond directly to the national emergency or
specific threat.
``(2) Notwithstanding any other provision of law, the
Commissioner of Customs, when necessary to respond to a
specific threat to human life or national interests, is
authorized to close temporarily any Customs office or port of
entry or take any other lesser action that may be necessary to
respond to the specific threat.
``(3) The Secretary of the Treasury or the Commissioner of
Customs, as the case may be, shall notify the Committee on Ways
and Means of the House of Representatives and the Committee on
Finance of the Senate not later than 72 hours after taking any
action under paragraph (1) or (2).''.
SEC. 343. MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO AND OTHER
IMPROVED CUSTOMS REPORTING PROCEDURES.
(a) Cargo Information.--
(1) In general.--Subject to paragraphs (2) and (3),
not later than 1 year after the date of enactment of
this Act, the Secretary shall promulgate regulations
providing for the transmission to the Customs Service,
through an electronic data interchange system, of
information pertaining to cargo destined for
importation into the United States or exportation from
the United States, prior to such importation or
exportation.
(2) Information required.--The information required
by the regulations promulgated pursuant to paragraph
(1) under the parameters set forth in paragraph (3)
shall be such information as the Secretary determines
to be reasonably necessary to ensure aviation,
maritime, and surface transportation safety and
security pursuant to those laws enforced and
administered by the Customs Service.
(3) Parameters.--In developing regulations pursuant
to paragraph (1), the Secretary shall adhere to the
following parameters:
(A) The Secretary shall solicit comments
from and consult with a broad range of parties
likely to be affected by the regulations,
including importers, exporters, carriers,
customs brokers, and freight forwarders, among
other interested parties.
(B) In general, the requirement to provide
particular information shall be imposed on the
party most likely to have direct knowledge of
that information. Where requiring information
from the party with direct knowledge of that
information is not practicable, the regulations
shall take into account how, under ordinary
commercial practices, information is acquired
by the party on which the requirement is
imposed, and whether and how such party is able
to verify the information. Where information is
not reasonably verifiable by the party on which
a requirement is imposed, the regulations shall
permit that party to transmit information on
the basis of what it reasonably believes to be
true.
(C) The Secretary shall take into account
the existence of competitive relationships
among the parties on which requirements to
provide particular information are imposed.
(D) Where the regulations impose
requirements on carriers of cargo, they shall
take into account differences among different
modes of transportation, including differences
in commercial practices, operational
characteristics, and technological capacity to
collect and transmit information
electronically.
(E) The regulations shall take into account
the extent to which the technology necessary
for parties to transmit and the Customs Service
to receive and analyze data in a timely fashion
is available. To the extent that the Secretary
determines that the necessary technology will
not be widely available to particular modes of
transportation or other affected parties until
after promulgation of the regulations, the
regulations shall provide interim requirements
appropriatefor the technology that is available
at the time of promulgation.
(F) The information collected pursuant to
the regulations shall be used exclusively for
ensuring aviation, maritime, and surface
transportation safety and security, and shall
not be used for determining entry or for any
other commercial enforcement purposes.
(G) The regulations shall protect the
privacy of business proprietary and any other
confidential information provided to the
Customs Service. However, this parameter does
not repeal, amend, or otherwise modify other
provisions of law relating to the public
disclosure of information transmitted to the
Customs Service.
(H) In determining the timing for
transmittal of any information, the Secretary
shall balance likely impact on flow of commerce
with impact on aviation, maritime, and surface
transportation safety and security. With
respect to requirements that may be imposed on
carriers of cargo, the timing for transmittal
of information shall take into account
differences among different modes of
transportation, as described in subparagraph
(D).
(I) Where practicable, the regulations
shall avoid imposing requirements that are
redundant with one another or that are
redundant with requirements in other provisions
of law.
(J) The Secretary shall determine whether
it is appropriate to provide transition periods
between promulgation of the regulations and the
effective date of the regulations and shall
prescribe such transition periods in the
regulations, as appropriate. The Secretary may
determine that different transition periods are
appropriate for different classes of affected
parties.
(K) With respect to requirements imposed on
carriers, the Secretary, in consultation with
the Postmaster General, shall determine whether
it is appropriate to impose the same or similar
requirements on shipments by the United States
Postal Service. If the Secretary determines
that such requirements are appropriate, then
they shall be set forth in the regulations.
(L) Not later than 15 days prior to
promulgation of the regulations, the Secretary
shall transmit to the Committees on Finance and
Commerce, Science, and Transportation of the
Senate and the Committees on Ways and Means and
Transportation and Infrastructure of the House
of Representatives a report setting forth--
(i) the proposed regulations;
(ii) an explanation of how
particular requirements in the proposed
regulations meet the needs of aviation,
maritime, and surface transportation
safety and security;
(iii) an explanation of how the
Secretary expects the proposed
regulations to affect the commercial
practices of affected parties; and
(iv) an explanation of how the
proposed regulations address particular
comments received from interested
parties.
(b) Documentation of Waterborne Cargo.--Part II of title IV
of the Tariff Act of 1930 is amended by inserting after section
431 the following new section:
``SEC. 431A. DOCUMENTATION OF WATERBORNE CARGO.
``(a) Applicability.--This section shall apply to all cargo
to be exported that is moved by a vessel carrier from a port in
the United States.
``(b) Documentation Required.--(1) No shipper of cargo
subject to this section (including an ocean transportation
intermediary that is a non-vessel-operating common carrier (as
defined in section 3(17)(B) of the Shipping Act of 1984 (46
U.S.C. App. 1702(17)(B)) may tender or cause to be tendered to
a vessel carrier cargo subject to this section for loading on a
vessel in a United States port, unless such cargo is properly
documented pursuant to this subsection.
``(2) For the purposes of this subsection, cargo shall be
considered properly documented if the shipper submits to the
vessel carrier or its agent a complete set of shipping
documents no later than 24 hours after the cargo is delivered
to the marine terminal operator, but under no circumstances
later than 24 hours prior to departure of the vessel.
``(3) A complete set of shipping documents shall include--
``(A) for shipments for which a shipper's export
declaration is required, a copy of the export
declaration or, if the shipper files such declarations
electronically in the Automated Export System, the
complete bill of lading, and the master or equivalent
shipping instructions, including the Internal
Transaction Number (ITN); or
``(B) for shipments for which a shipper's export
declaration is not required, a shipper's export
declaration exemption statement and such other
documents or information as the Secretary may by
regulation prescribe.
``(4) The Secretary shall by regulation prescribe the time,
manner, and form by which shippers shall transmit documents or
information required under this subsection to the Customs
Service.
``(c) Loading Undocumented Cargo Prohibited.--
``(1) No marine terminal operator (as defined in
section 3(14) of the Shipping Act of 1984 (46 U.S.C.
App. 1702(14))) may load, or cause to be loaded, any
cargo subject to this section on a vessel unless
instructed by the vessel carrier operating the vessel
that such cargo has been properly documented in
accordance with this section.
``(2) When cargo is booked by 1 vessel carrier to
be transported on the vessel of another vessel carrier,
the booking carrier shall notify the operator of the
vessel that the cargo has been properly documented in
accordance with this section. The operator of the
vessel may rely on such notification in releasing the
cargo for loading aboard the vessel.
``(d) Reporting of Undocumented Cargo.--A vessel carrier
shall notify the Customs Service of any cargo tendered to such
carrier that is not properly documented pursuant to this
section and that has remained in the marine terminal for more
than 48 hours after being deliveredto the marine terminal, and
the location of the cargo in the marine terminal. For vessel carriers
that are members of vessel sharing agreements (or any other arrangement
whereby a carrier moves cargo on another carrier's vessel), the vessel
carrier accepting the booking shall be responsible for reporting
undocumented cargo, without regard to whether it operates the vessel on
which the transportation is to be made.
``(e) Assessment of Penalties.--Whoever is found to have
violated subsection (b) of this section shall be liable to the
United States for civil penalties in a monetary amount up to
the value of the cargo, or the actual cost of the
transportation, whichever is greater.
``(f) Seizure of Undocumented Cargo.--
``(1) Any cargo that is not properly documented
pursuant to this section and has remained in the marine
terminal for more than 48 hours after being delivered
to the marine terminal operator shall be subject to
search, seizure, and forfeiture.
``(2) The shipper of any such cargo is liable to
the marine terminal operator and to the ocean carrier
for demurrage and other applicable charges for any
undocumented cargo which has been notified to or
searched or seized by the Customs Service for the
entire period the cargo remains under the order and
direction of the Customs Service. Unless the cargo is
seized by the Customs Service and forfeited, the marine
terminal operator and the ocean carrier shall have a
lien on the cargo for the amount of the demurrage and
other charges.
``(g) Effect on Other Provisions.--Nothing in this section
shall be construed, interpreted, or applied to relieve or
excuse any party from compliance with any obligation or
requirement arising under any other law, regulation, or order
with regard to the documentation or carriage of cargo.''.
(c) Secretary.--For purposes of this section, the term
``Secretary'' means the Secretary of the Treasury. If, at the
time the regulations required by subsection (a)(1) are
promulgated, the Customs Service is no longer located in the
Department of the Treasury, then the Secretary of the Treasury
shall exercise the authority under subsection (a) jointly with
the Secretary of the Department in which the Customs Service is
located.
SEC. 343A. SECURE SYSTEMS OF TRANSPORTATION.
(a) Joint Task Force.--The Secretary of the Treasury shall
establish a joint task force to evaluate, prototype, and
certify secure systems of transportation. The joint task force
shall be comprised of officials from the Department of
Transportation and the Customs Service, and any other officials
that the Secretary deems appropriate. The task force shall
establish a program to evaluate and certify secure systems of
international intermodal transport no later than 1 year after
the date of enactment of this Act. The task force shall solicit
and consider input from a broad range of interested parties.
(b) Program Requirements.--At a minimum the program
referred to in subsection (a) shall require certified systems
of international intermodal transport to be significantly more
secure than existing transportation programs, and the program
shall--
(1) establish standards and a process for screening
and evaluating cargo prior to import into or export
from the United States;
(2) establish standards and a process for a system
of securing cargo and monitoring it while in transit;
(3) establish standards and a process for allowing
the United States Government to ensure and validate
compliance with the program elements; and
(4) include any other elements that the task force
deems necessary to ensure the security and integrity of
the international intermodal transport movements.
(c) Recognition of Certified Systems.--
(1) Secretary of the treasury.--The Secretary of
the Treasury shall recognize certified systems of
intermodal transport in the requirements of a national
security plan for United States seaports, and in the
provisions requiring planning to reopen United States
ports for commerce.
(2) Commissioner of customs.--The Commissioner of
Customs shall recognize certified systems of intermodal
transport in the evaluation of cargo risk for purposes
of United States imports and exports.
(d) Report.--Within 1 year after the program described in
subsection (a) is implemented, the Secretary of the Treasury
shall transmit a report to the Committees on Commerce, Science,
and Transportation and Finance of the Senate and the Committees
on Transportation and Infrastructure and Ways and Means of the
House of Representatives that--
(1) evaluates the program and its requirements;
(2) states the Secretary's views as to whether any
procedure, system, or technology evaluated as part of
the program offers a higher level of security than
under existing procedures;
(3) states the Secretary's views as to the
integrity of the procedures, technology, or systems
evaluated as part of the program; and
(4) makes a recommendation with respect to whether
the program, or any procedure, system, or technology
should be incorporated in a nationwide system for
certified systems of intermodal transport.
SEC. 344. BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND
MAIL.
(a) In General.--The Tariff Act of 1930 is amended by
inserting after section 582 the following:
``SEC. 583. EXAMINATION OF OUTBOUND MAIL.
``(a) Examination.--
``(1) In general.--For purposes of ensuring
compliance with the Customs laws of the United States
and other laws enforced by the Customs Service,
including the provisions of law described in paragraph
(2), a Customs officer may, subject to the provisions
of this section, stop and search at the border, without
a search warrant, mail of domestic origin transmitted
for export by the United States Postal Service and
foreign mail transiting the United States that is being
imported or exported by the United States Postal
Service.
``(2) Provisions of law described.--The provisions
of law described in this paragraph are the following:
``(A) Section 5316 of title 31, United
States Code (relating to reports on exporting
and importing monetary instruments).
``(B) Sections 1461, 1463, 1465, and 1466,
and chapter 110 of title 18, United States Code
(relating to obscenity and child pornography).
``(C) Section 1003 of the Controlled
Substances Import and Export Act (relating to
exportation of controlled substances) (21
U.S.C. 953).
``(D) The Export Administration Act of 1979
(50 U.S.C. App. 2401 et seq.).
``(E) Section 38 of the Arms Export Control
Act (22 U.S.C. 2778).
``(F) The International Emergency Economic
Powers Act (50 U.S.C. 1701 et seq.).
``(b) Search of Mail Not Sealed Against Inspection and
Other Mail.--Mail not sealed against inspection under the
postal laws and regulations of the United States, mail which
bears a Customs declaration, and mail with respect to which the
sender or addressee has consented in writing to search, may be
searched by a Customs officer.
``(c) Search of Mail Sealed Against Inspection Weighing in
Excess of 16 Ounces.--
``(1) In general.--Mail weighing in excess of 16 ounces
sealed against inspection under the postal laws and regulations
of the United States may be searched by a Customs officer,
subject to paragraph (2), if there is reasonable cause to
suspect that such mail contains one or more of the following:
``(A) Monetary instruments, as defined in section
1956 of title 18, United States Code.
``(B) A weapon of mass destruction, as defined in
section 2332a(b) of title 18, United States Code.
``(C) A drug or other substance listed in schedule
I, II, III, or IV in section 202 of the Controlled
Substances Act (21 U.S.C. 812).
``(D) National defense and related information
transmitted in violation of any of sections 793 through
798 of title 18, United States Code.
``(E) Merchandise mailed in violation of section
1715 or 1716 of title 18, United States Code.
``(F) Merchandise mailed in violation of any
provision of chapter 71 (relating to obscenity) or
chapter 110 (relating to sexual exploitation and other
abuse of children) of title 18, United States Code.
``(G) Merchandise mailed in violation of the Export
Administration Act of 1979 (50 U.S.C. App. 2401 et
seq.).
``(H) Merchandise mailed in violation of section 38
of the Arms Export Control Act (22 U.S.C. 2778).
``(I) Merchandise mailed in violation of the
International Emergency Economic Powers Act (50 U.S.C.
1701 et seq.).
``(J) Merchandise mailed in violation of the
Trading with the Enemy Act (50 U.S.C. App. 1 et seq.).
``(K) Merchandise subject to any other law enforced
by the Customs Service.
``(2) Limitation.--No person acting under the
authority of paragraph (1) shall read, or authorize any
other person to read, any correspondence contained in
mail sealed against inspection unless prior to so
reading--
``(A) a search warrant has been issued
pursuant to rule 41 of the Federal Rules of
Criminal Procedure; or
``(B) the sender or addressee has given
written authorization for such reading.
``(d) Search of Mail Sealed Against Inspection Weighing 16
Ounces or Less.--Notwithstanding any other provision of this
section, subsection (a)(1) shall not apply to mail weighing 16
ounces or less sealed against inspection under the postal laws
and regulations of the United States.''.
(b) Certification by Secretary.--Not later than 3 months
after the date of enactment of this section, the Secretary of
State shall determine whether the application of section 583 of
the Tariff Act of 1930 to foreign mail transiting the United
States that is imported or exported by the United States Postal
Service is being handled in a manner consistent with
international law and any international obligation of the
United States. Section 583 of such Act shall not apply to such
foreign mail unless the Secretary certifies to Congress that
the application of such section 583 is consistent with
international law and any international obligation of the
United States.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph
(2), this section and the amendments made by this
section shall take effect on the date of enactment of
this Act.
(2) Certification with respect to foreign mail.--
The provisions of section 583 of the Tariff Act of 1930
relating to foreign mail transiting the United States
that is imported or exported by the United States
Postal Service shall not take effect until the
Secretary of State certifies to Congress, pursuant to
subsection (b), that the application of such section
583 is consistent with international law and any
international obligation of the United States.
SEC. 345. AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT OF
CUSTOMS OPERATIONS IN NEW YORK CITY.
(a) Authorization of Appropriations.--
(1) In general.--There is authorized to be
appropriated for the reestablishment of operations of
the Customs Service in New York, New York, such sums as
may be necessary for fiscal year 2003.
(2) Operations described.--The operations referred
to in paragraph (1) include, but are not limited to,
the following:
(A) Operations relating to the Port
Director of New York City, the New York Customs
Management Center (including the Director of
Field Operations), and the Special Agent-In-
Charge for New York.
(B) Commercial operations, including
textile enforcement operations and salaries and
expenses of--
(i) trade specialists who determine
the origin and value of merchandise;
(ii) analysts who monitor the entry
data into the United States of textiles
and textile products; and
(iii) Customs officials who work
with foreign governments to examine
textile makers and verify entry
information.
(b) Availability.--Amounts appropriated pursuant to the
authorization of appropriations under subsection (a) are
authorized to remain available until expended.
CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS
SEC. 351. GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY CUSTOMS
SERVICE.
(a) GAO Audit.--The Comptroller General of the United
States shall conduct an audit of the system established and
carried out by the Customs Service to monitor transshipment.
(b) Report.--Not later than 9 months after the date of
enactment of this Act, the Comptroller General shall submit to
the Committee on Ways and Means of the House of Representatives
and Committee on Finance of the Senate a report that contains
the results of the study conducted under subsection (a),
including recommendations for improvements to the transshipment
monitoring system if applicable.
(c) Transshipment Described.--Transshipment within the
meaning of this section has occurred when preferential
treatment under any provision of law has been claimed for a
textile or 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 the preceding sentence, 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 the provision of
law in question.
SEC. 352. AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT
ENFORCEMENT OPERATIONS.
(a) Authorization of Appropriations.--
(1) In general.--There is authorized to be
appropriated for transshipment (as described in section
351(c)) enforcement operations, outreach, and education
of the Customs Service $9,500,000 for fiscal year 2003.
(2) Availability.--Amounts appropriated pursuant to
the authorization of appropriations under paragraph (1)
are authorized to remain available until expended.
(b) Use of Funds.--Of the amount appropriated pursuant to
the authorization of appropriations under subsection (a), the
following amounts are authorized to be made available for the
following purposes:
(1) Import specialists.--$1,463,000 for 21 Customs
import specialists to be assigned to selected ports for
documentation review to support detentions and
exclusions and 1 additional Customs import specialist
assigned to the Customs headquarters textile program to
administer the program and provide oversight.
(2) Inspectors.--$652,080 for 10 Customs inspectors
to be assigned to selected ports to examine targeted
high-risk shipments.
(3) Investigators.--(A) $1,165,380 for 10
investigators to be assigned to selected ports to
investigate instances of smuggling, quota and trade
agreement circumvention, and use of counterfeit visas
to enter inadmissible goods.
(B) $149,603 for 1 investigator to be assigned to
the Customs headquarters textile program to coordinate
and ensure implementation of textile production
verification team results from an investigation
perspective.
(4) International trade specialists.--$226,500 for
3 international trade specialists to be assigned to
Customs headquarters to be dedicated to illegal textile
transshipment policy issues, outreach, education, and
other free trade agreement enforcement issues.
(5) Permanent import specialists for hong kong.--
$500,000 for 2 permanent import specialist positions
and $500,000 for 2 investigators to be assigned to Hong
Kong to work with Hong Kong and other government
authorities in Southeast Asia to assist such
authorities in pursuing proactive enforcement of
bilateral trade agreements.
(6) Various permanent trade positions.--$3,500,000
for the following:
(A) 2 permanent positions to be assigned to
the Customs attache office in Central America
to address trade enforcement issues for that
region.
(B) 2 permanent positions to be assigned to
the Customs attache office in South Africa to
address trade enforcement issues pursuant to
the African Growth and Opportunity Act (title I
of Public Law 106-200).
(C) 4 permanent positions to be assigned to
the Customs attache office in Mexico to address
the threat of illegal textile transshipment
through Mexico and other related issues under
the North American Free Trade Agreement Act.
(D) 2 permanent positions to be assigned to
the Customs attache office in Seoul, South
Korea, to address the trade issues in the
geographic region.
(E) 2 permanent positions to be assigned to
the proposed Customs attache office in New
Delhi, India, to address the threat of illegal
textile transshipment and other trade
enforcement issues.
(F) 2 permanent positions to be assigned to
the Customs attache office in Rome, Italy, to
address trade enforcement issues in the
geographic region, including issues under free
trade agreements with Jordan and Israel.
(7) Attorneys.--$179,886 for 2 attorneys for the
Office of the Chief Counsel of the Customs Service to
pursue cases regarding illegal textile transshipment.
(8) Auditors.--$510,000 for 6 Customs auditors to
perform internal control reviews and document and
record reviews of suspect importers.
(9) Additional travel funds.--$250,000 for
deployment of additional textile production
verification teams to sub-Saharan Africa.
(10) Training.--(A) $75,000 for training of Customs
personnel.
(B) $200,000 for training for foreign counterparts
in risk management analytical techniques and for
teaching factory inspection techniques, model law
development, and enforcement techniques.
(11) Outreach.--$60,000 for outreach efforts to
United States importers.
SEC. 353. IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT.
Of the amount made available for fiscal year 2003 under
section 301(b)(2)(A) of the Customs Procedural Reform and
Simplification Act of 1978 (19 U.S.C. 2075(b)(2)(A)), as
amended by section 311(b)(1) of this Act, $1,317,000 shall be
available until expended for the Customs Service to provide
technical assistance to help sub-Saharan African countries
develop and implement effective visa and anti-transshipment
systems as required by the African Growth and Opportunity Act
(title I of Public Law 106-200), as follows:
(1) Travel funds.--$600,000 for import specialists,
special agents, and other qualified Customs personnel
to travel to sub-Saharan African countries to provide
technical assistance in developing and implementing
effective visa and anti-transshipment systems.
(2) Import specialists.--$266,000 for 4 import
specialists to be assigned to Customs headquarters to
be dedicated to providing technical assistance to sub-
Saharan African countries for developing and
implementing effective visa and anti-transshipment
systems.
(3) Data reconciliation analysts.--$151,000 for 2
data reconciliation analysts to review apparel
shipments.
(4) Special agents.--$300,000 for 2 special agents
to be assigned to Customs headquarters to be available
to provide technical assistance to sub-Saharan African
countries in the performance of investigations and
other enforcement initiatives.
Subtitle B--Office of the United States Trade Representative
SEC. 361. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--Section 141(g)(1) of the Trade Act of 1974
(19 U.S.C. 2171(g)(1)) is amended--
(1) in subparagraph (A)--
(A) in the matter preceding clause (i), by
striking ``not to exceed'';
(B) by striking clause (i), and inserting
the following:
``(i) $32,300,000 for fiscal year 2003.''; and
(C) by striking clause (ii), and inserting
the following:
``(ii) $33,108,000 for fiscal year 2004.''; and
(2) in subparagraph (B)--
(A) in clause (i), by adding ``and'' at the
end;
(B) by striking clause (ii); and
(C) by redesignating clause (iii) as clause
(ii).
(b) Submission of Out-Year Budget Projections.--Section
141(g) of the Trade Act of 1974 (19 U.S.C. 2171(g)) is amended
by adding at the end the following:
``(3) By not later than the date on which the President
submits to Congress the budget of the United States Government
for a fiscal year, the United States Trade Representative shall
submit to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate the
projected amount of funds for the succeeding fiscal year that
will be necessary for the Office to carry out its functions.''.
(c) Additional Staff for Office of Assistant U.S. Trade
Representative for Congressional Affairs.--
(1) In general.--There is authorized to be
appropriated such sums as may be necessary for fiscal
year 2003 for the salaries and expenses of two
additional legislative specialist employee positions
within the Office of the Assistant United States Trade
Representative for Congressional Affairs.
(2) Availability.--Amounts appropriated pursuant to
the authorization of appropriations under paragraph (1)
are authorized to remain available until expended.
Subtitle C--United States International Trade Commission
SEC. 371. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--Section 330(e)(2)(A) of the Tariff Act of
1930 (19 U.S.C. 1330(e)(2)(A)) is amended--
(1) by striking clause (i), and inserting the
following:
``(i) $54,000,000 for fiscal year 2003.''; and
(2) by striking clause (ii), and inserting the
following:
``(ii) $57,240,000 for fiscal year 2004.''.
(b) Submission of Out-Year Budget Projections.--Section
330(e) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)) is
amended by adding at the end the following:
``(4) By not later than the date on which the President
submits to Congress the budget of the United States Government
for a fiscal year, the Commission shall submit to the Committee
on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate the projected amount of
funds for the succeeding fiscal year that will be necessary for
the Commission to carry out its functions.''.
Subtitle D--Other Trade Provisions
SEC. 381. INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT FROM DUTY
ACQUIRED ABROAD BY UNITED STATES RESIDENTS.
(a) In General.--Subheading 9804.00.65 of the Harmonized
Tariff Schedule of the United States is amended in the article
description column by striking ``$400'' and inserting ``$800''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect 90 days after the date of the enactment of
this Act.
SEC. 382. REGULATORY AUDIT PROCEDURES.
Section 509(b) of the Tariff Act of 1930 (19 U.S.C.
1509(b)) is amended by adding at the end the following:
``(6)(A) If during the course of any audit
concluded under this subsection, the Customs Service
identifies overpayments of duties or fees or over-
declarations of quantities or values that are within
the time period and scope of the audit that the Customs
Service has defined, then in calculating the loss of
revenue or monetary penalties under section 592, the
Customs Service shall treat the overpayments or over-
declarations on finally liquidated entries as an offset
to any underpayments or underdeclarations also
identified on finally liquidated entries, if such
overpayments or over-declarations were not made by the
person being audited for the purpose of violating any
provision of law.
``(B) Nothing in this paragraph shall be construed
to authorize a refund not otherwise authorized under
section 520.''.
SEC. 383. PAYMENT OF DUTIES AND FEES.
Section 505(a) of the Tariff Act of 1930 (19 U.S.C.
1505(a)) is amended to read as follows:
``(a) Deposit of Estimated Duties and Fees.--Unless the
entry is subject to a periodic payment or the merchandise is
entered for warehouse or transportation, or under bond, the
importer of record shall deposit with the Customs Service at
the time of entry, or at such later time as the Secretary may
prescribe by regulation (but not later than 10 working days
after entry or release) the amount of duties and fees estimated
to be payable on such merchandise. As soon as a periodic
payment module of the Automated Commercial Environment is
developed, but no later than October 1, 2004, a participating
importer of record, or the importer's filer, may deposit
estimated duties and fees for entries of merchandise no later
than the 15th day of the month following the month in which the
merchandise is entered or released, whichever comes first.''.
DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY
TITLE XXI--TRADE PROMOTION AUTHORITY
SEC. 2101. SHORT TITLE AND FINDINGS.
(a) Short Title.--This title may be cited as the
``Bipartisan Trade Promotion Authority Act of 2002''.
(b) Findings.--The Congress makes the following findings:
(1) The expansion of international trade is vital
to the national security of the United States. Trade is
critical to the economic growth and strength of the
United States and to its leadership in the world.
Stable trading relationships promote security and
prosperity. Trade agreements today serve the same
purposes that security pacts played during the Cold
War, binding nations together through a series of
mutual rights and obligations. Leadership by the United
States in international trade fosters open markets,
democracy, and peace throughout the world.
(2) The national security of the United States
depends on its economic security, which in turn is
founded upon a vibrant and growing industrial base.
Trade expansion has been the engine of economic growth.
Trade agreements maximize opportunities for the
critical sectors and building blocks of the economy of
the United States, such as information technology,
telecommunications and other leading technologies,
basic industries, capital equipment, medical equipment,
services, agriculture, environmental technology, and
intellectual property. Trade will create new
opportunities for the United States and preserve the
unparalleled strength of the United States in economic,
political, and military affairs. The United States,
secured by expanding trade and economic opportunities,
will meet the challenges of the twenty-first century.
(3) Support for continued trade expansion requires
that dispute settlement procedures under international
trade agreements not add to or diminish the rights and
obligations provided in such agreements. Therefore--
(A) the recent pattern of decisions by
dispute settlement panels of the WTO and the
Appellate Body to impose obligations and
restrictions on the use of antidumping,
countervailing, and safeguard measures by WTO
members under the Antidumping Agreement, the
Agreement on Subsidies and Countervailing
Measures, and the Agreement on Safeguards has
raised concerns; and
(B) the Congress is concerned that dispute
settlement panels of the WTO and the Appellate
Body appropriately apply the standard of review
contained in Article 17.6 of the Antidumping
Agreement, to provide deference to a
permissible interpretation by a WTO member of
provisions of that Agreement, and to the
evaluation by a WTO member of the facts where
that evaluation is unbiased and objective and
the establishment of the facts is proper.
SEC. 2102. TRADE NEGOTIATING OBJECTIVES.
(a) Overall Trade Negotiating Objectives.--The overall
trade negotiating objectives of the United States for
agreements subject to the provisions of section 2103 are--
(1) to obtain more open, equitable, and reciprocal
market access;
(2) to obtain the reduction or elimination of
barriers and distortions that are directly related to
trade and that decrease market opportunities for United
States exports or otherwise distort United States
trade;
(3) to further strengthen the system of
international trading disciplines and procedures,
including dispute settlement;
(4) to foster economic growth, raise living
standards, and promote full employment in the United
States and to enhance the global economy;
(5) to ensure that trade and environmental policies
are mutually supportive and to seek to protect and
preserve the environment and enhance the international
means of doing so, while optimizing the use of the
world's resources;
(6) to promote respect for worker rights and the
rights of children consistent with core labor standards
of the ILO (as defined in section 2113(6)) and an
understanding of the relationship between trade and
worker rights;
(7) to seek provisions in trade agreements under
which parties to those agreements strive to ensure that
they do not weaken or reduce the protections afforded
in domestic environmental and labor laws as an
encouragement for trade;
(8) to ensure that trade agreements afford small
businesses equal access to international markets,
equitable trade benefits, and expanded export market
opportunities, and provide for the reduction or
elimination of trade barriers that disproportionately
impact small businesses; and
(9) to promote universal ratification and full
compliance with ILO Convention No. 182 Concerning the
Prohibition and Immediate Action for the Elimination of
the Worst Forms of Child Labor.
(b) Principal Trade Negotiating Objectives.--
(1) Trade barriers and distortions.--The principal
negotiating objectives of the United States regarding
trade barriers and other trade distortions are--
(A) to expand competitive market
opportunities for United States exports and to
obtain fairer and more open conditions of trade
by reducing or eliminating tariff and nontariff
barriers and policies and practices of foreign
governments directly related to trade that
decrease market opportunities for United States
exports or otherwise distort United States
trade; and
(B) to obtain reciprocal tariff and
nontariff barrier elimination agreements, with
particular attention to those tariff categories
covered in section 111(b) of the Uruguay Round
Agreements Act (19 U.S.C. 3521(b)).
(2) Trade in services.--The principal negotiating
objective of the United States regarding trade in
services is to reduce or eliminate barriers to
international trade in services, including regulatory
and other barriers that deny national treatment and
market access or unreasonably restrict the
establishment or operations of service suppliers.
(3) Foreign investment.--Recognizing that United
States law on the whole provides a high level of
protection for investment, consistent with or greater
than the level required by international law, the
principal negotiating objectives of the United States
regarding foreign investment are to reduce or eliminate
artificial or trade-distorting barriers to foreign
investment, while ensuring that foreign investors in
the United States are not accorded greater substantive
rights with respect to investment protections than
United States investors in the United States, and to
secure for investors important rights comparable to
those that would be available under United States legal
principles and practice, by--
(A) reducing or eliminating exceptions to
the principle of national treatment;
(B) freeing the transfer of funds relating
to investments;
(C) reducing or eliminating performance
requirements, forced technology transfers, and
other unreasonable barriers to the
establishment and operation of investments;
(D) seeking to establish standards for
expropriation and compensation for
expropriation, consistent with United States
legal principles and practice;
(E) seeking to establish standards for fair
and equitable treatment consistent with United
States legal principles and practice, including
the principle of due process;
(F) providing meaningful procedures for
resolving investment disputes;
(G) seeking to improve mechanisms used to
resolve disputes between an investor and a
government through--
(i) mechanisms to eliminate
frivolous claims and to deter the
filing of frivolous claims;
(ii) procedures to ensure the
efficient selection of arbitrators and
the expeditious disposition of claims;
(iii) procedures to enhance
opportunities for public input into the
formulation of government positions;
and
(iv) providing for an appellate
body or similar mechanism to provide
coherence to the interpretations of
investment provisions in trade
agreements; and
(H) ensuring the fullest measure of
transparency in the dispute settlement
mechanism, to the extent consistent with the
need to protect information that is classified
or business confidential, by--
(i) ensuring that all requests for
dispute settlement are promptly made
public;
(ii) ensuring that--
(I) all proceedings,
submissions, findings, and
decisions are promptly made
public; and
(II) all hearings are open
to the public; and
(iii) establishing a mechanism for
acceptance of amicus curiae submissions
from businesses, unions, and
nongovernmental organizations.
(4) Intellectual property.--The principal
negotiating objectives of the United States regarding
trade-related intellectual property are--
(A) to further promote adequate and
effective protection of intellectual property
rights, including through--
(i)(I) ensuring accelerated and
full implementation of the Agreement on
Trade-Related Aspects of Intellectual
Property Rights referred to in section
101(d)(15) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(15)),
particularly with respect to meeting
enforcement obligations under that
agreement; and
(II) ensuring that the provisions
of any multilateral or bilateral trade
agreement governing intellectual
property rights that is entered into by
the United States reflect a standard of
protection similar to that found in
United States law;
(ii) providing strong protection
for new and emerging technologies and
new methods of transmitting and
distributing products embodying
intellectual property;
(iii) preventing or eliminating
discrimination with respect to matters
affecting the availability,
acquisition, scope, maintenance, use,
and enforcement of intellectual
property rights;
(iv) ensuring that standards of
protection and enforcement keep pace
with technological developments, and in
particular ensuring that rightholders
have the legal and technological means
to control the use of their works
through the Internet and other global
communication media, and to prevent the
unauthorized use of their works; and
(v) providing strong enforcement of
intellectual property rights, including
through accessible, expeditious, and
effective civil, administrative, and
criminal enforcement mechanisms;
(B) to secure fair, equitable, and
nondiscriminatory market access opportunities
for United States persons that rely upon
intellectual property protection; and
(C) to respect the Declaration on the TRIPS
Agreement and Public Health, adopted by the
World Trade Organization at the Fourth
Ministerial Conference at Doha, Qatar on
November 14, 2001.
(5) Transparency.--The principal negotiating
objective of the United States with respect to
transparency is to obtain wider and broader application
of the principle of transparency through--
(A) increased and more timely public access
to information regarding trade issues and the
activities of international trade institutions;
(B) increased openness at the WTO and other
international trade fora by increasing public
access to appropriate meetings, proceedings,
and submissions, including with regard to
dispute settlement and investment; and
(C) increased and more timely public access
to all notifications and supporting
documentation submitted by parties to the WTO.
(6) Anti-corruption.--The principal negotiating
objectives of the United States with respect to the use
of money or other things of value to influence acts,
decisions, or omissions of foreign governments or
officials or to secure any improper advantage in a
manner affecting trade are--
(A) to obtain high standards and
appropriate domestic enforcement mechanisms
applicable to persons from all countries
participating in the applicable trade agreement
that prohibit such attempts to influence acts,
decisions, or omissions of foreign governments;
and
(B) to ensure that such standards do not
place United States persons at a competitive
disadvantage in international trade.
(7) Improvement of the wto and multilateral trade
agreements.--The principal negotiating objectives of
the United States regarding the improvement of the
World Trade Organization, the Uruguay Round Agreements,
and other multilateral and bilateral trade agreements
are--
(A) to achieve full implementation and
extend the coverage of the World Trade
Organization and such agreements to products,
sectors, and conditions of trade not adequately
covered; and
(B) to expand country participation in and
enhancement of the Information Technology
Agreement and other trade agreements.
(8) Regulatory practices.--The principal
negotiating objectives of the United States regarding
the use of government regulation or other practices by
foreign governments to provide a competitive advantage
to their domestic producers, service providers, or
investors and thereby reduce market access for United
States goods, services, and investments are--
(A) to achieve increased transparency and
opportunity for the participation of affected
parties in the development of regulations;
(B) to require that proposed regulations be
based on sound science, cost-benefit analysis,
risk assessment, or other objective evidence;
(C) to establish consultative mechanisms
among parties to trade agreements to promote
increased transparency in developing
guidelines, rules, regulations, and laws for
government procurement and other regulatory
regimes; and
(D) to achieve the elimination of
government measures such as price controls and
reference pricing which deny full market access
for United States products.
(9) Electronic commerce.--The principal negotiating
objectives of the United States with respect to
electronic commerce are--
(A) to ensure that current obligations,
rules, disciplines, and commitments under the
WorldTrade Organization apply to electronic
commerce;
(B) to ensure that--
(i) electronically delivered goods
and services receive no less favorable
treatment under trade rules and
commitments than like products
delivered in physical form; and
(ii) the classification of such
goods and services ensures the most
liberal trade treatment possible;
(C) to ensure that governments refrain from
implementing trade-related measures that impede
electronic commerce;
(D) where legitimate policy objectives
require domestic regulations that affect
electronic commerce, to obtain commitments that
any such regulations are the least restrictive
on trade, nondiscriminatory, and transparent,
and promote an open market environment; and
(E) to extend the moratorium of the World
Trade Organization on duties on electronic
transmissions.
(10) Reciprocal trade in agriculture.--(A) The
principal negotiating objective of the United States
with respect to agriculture is to obtain competitive
opportunities for United States exports of agricultural
commodities in foreign markets substantially equivalent
to the competitive opportunities afforded foreign
exports in United States markets and to achieve fairer
and more open conditions of trade in bulk, specialty
crop, and value-added commodities by--
(i) reducing or eliminating, by a date
certain, tariffs or other charges that decrease
market opportunities for United States
exports--
(I) giving priority to those
products that are subject to
significantly higher tariffs or subsidy
regimes of major producing countries;
and
(II) providing reasonable
adjustment periods for United States
import-sensitive products, in close
consultation with the Congress on such
products before initiating tariff
reduction negotiations;
(ii) reducing tariffs to levels that are
the same as or lower than those in the United
States;
(iii) reducing or eliminating subsidies
that decrease market opportunities for United
States exports or unfairly distort agriculture
markets to the detriment of the United States;
(iv) allowing the preservation of programs
that support family farms and rural communities
but do not distort trade;
(v) developing disciplines for domestic
support programs, so that production that is in
excess of domestic food security needs is sold
at world prices;
(vi) eliminating government policies that
create price-depressing surpluses;
(vii) eliminating state trading enterprises
whenever possible;
(viii) developing, strengthening, and
clarifying rules and effective dispute
settlement mechanisms to eliminate practices
that unfairly decrease United States market
access opportunities or distort agricultural
markets to the detriment of the United States,
particularly with respect to import-sensitive
products, including--
(I) unfair or trade-distorting
activities of state trading enterprises
and other administrative mechanisms,
with emphasis on requiring price
transparency in the operation of state
trading enterprises and such other
mechanisms in order to end cross
subsidization, price discrimination,
and price undercutting;
(II) unjustified trade restrictions
or commercial requirements, such as
labeling, that affect new technologies,
including biotechnology;
(III) unjustified sanitary or
phytosanitary restrictions, including
those not based on scientific
principles in contravention of the
Uruguay Round Agreements;
(IV) other unjustified technical
barriers to trade; and
(V) restrictive rules in the
administration of tariff rate quotas;
(ix) eliminating practices that adversely
affect trade in perishable or cyclical
products, while improving import relief
mechanisms to recognize the unique
characteristics of perishable and cyclical
agriculture;
(x) ensuring that import relief mechanisms
for perishable and cyclical agriculture are as
accessible and timely to growers in the United
States as those mechanisms that are used by
other countries;
(xi) taking into account whether a party to
the negotiations has failed to adhere to the
provisions of already existing trade agreements
with the United States or has circumvented
obligations under those agreements;
(xii) taking into account whether a product
is subject to market distortions by reason of a
failure of a major producing country to adhere
to the provisions of already existing trade
agreements with the United States or by the
circumvention by that country of its
obligations under those agreements;
(xiii) otherwise ensuring that countries
that accede to the World Trade Organization
have made meaningful market liberalization
commitments in agriculture;
(xiv) taking into account the impact that
agreements covering agriculture to which the
United States is a party, including the North
American Free Trade Agreement, have on the
United States agricultural industry;
(xv) maintaining bona fide food assistance
programs and preserving United States market
development and export credit programs; and
(xvi) striving to complete a general
multilateral round in the World Trade
Organization by January 1, 2005, and seeking
the broadest market access possible in
multilateral, regional, and bilateral
negotiations, recognizing the effect that
simultaneous sets of negotiations may have on
United States import-sensitive commodities
(including those subject to tariff-rate
quotas).
(B)(i) Before commencing negotiations with respect
to agriculture, the United States Trade Representative,
in consultation with the Congress, shall seek to
develop a position on the treatment of seasonal and
perishable agricultural products to be employed in the
negotiations in order to develop an international
consensus on the treatment of seasonal or perishable
agricultural products in investigations relating to
dumping and safeguards and in any other relevant area.
(ii) During any negotiations on agricultural
subsidies, the United States Trade Representative shall
seek to establish the common base year for calculating
the Aggregated Measurement of Support (as defined in
the Agreement on Agriculture) as the end of each
country's Uruguay Round implementation period, as
reported in each country's Uruguay Round market access
schedule.
(iii) The negotiating objective provided in
subparagraph (A) applies with respect to agricultural
matters to be addressed in any trade agreement entered
into under section 2103(a) or (b), including any trade
agreement entered into under section 2103(a) or (b)
that provides for accession to a trade agreement to
which the United States is already a party, such as the
North American Free Trade Agreement and the United
States-Canada Free Trade Agreement.
(11) Labor and the environment.--The principal
negotiating objectives of the United States with
respect to labor and the environment are--
(A) to ensure that a party to a trade
agreement with the United States does not fail
to effectively enforce its environmental or
labor laws, through a sustained or recurring
course of action or inaction, in a manner
affecting trade between the United States and
that party after entry into force of a trade
agreement between those countries;
(B) to recognize that parties to a trade
agreement retain the right to exercise
discretion with respect to investigatory,
prosecutorial, regulatory, and compliance
matters and to make decisions regarding the
allocation of resources to enforcement with
respect to other labor or environmental matters
determined to have higher priorities, and to
recognize that a country is effectively
enforcing its laws if a course of action or
inaction reflects a reasonable exercise of such
discretion, or results from a bona fide
decision regarding the allocation of resources,
and no retaliation may be authorized based on
the exercise of these rights or the right to
establish domestic labor standards and levels
of environmental protection;
(C) to strengthen the capacity of United
States trading partners to promote respect for
core labor standards (as defined in section
2113(6));
(D) to strengthen the capacity of United
States trading partners to protect the
environment through the promotion of
sustainable development;
(E) to reduce or eliminate government
practices or policies that unduly threaten
sustainable development;
(F) to seek market access, through the
elimination of tariffs and nontariff barriers,
for United States environmental technologies,
goods, and services; and
(G) to ensure that labor, environmental,
health, or safety policies and practices of the
parties to trade agreements with the United
States do not arbitrarily or unjustifiably
discriminate against United States exports or
serve as disguised barriers to trade.
(12) Dispute settlement and enforcement.--The
principal negotiating objectives of the United States
with respect to dispute settlement and enforcement of
trade agreements are--
(A) to seek provisions in trade agreements
providing for resolution of disputes between
governments under those trade agreements in an
effective, timely, transparent, equitable, and
reasoned manner, requiring determinations based
on facts and the principles of the agreements,
with the goal of increasing compliance with the
agreements;
(B) to seek to strengthen the capacity of
the Trade Policy Review Mechanism of the World
Trade Organization to review compliance with
commitments;
(C) to seek adherence by panels convened
under the Dispute Settlement Understanding and
by the Appellate Body to the standard of review
applicable under the Uruguay Round Agreement
involved in the dispute, including greater
deference, where appropriate, to the fact-
finding and technical expertise of national
investigating authorities;
(D) to seek provisions encouraging the
early identification and settlement of disputes
through consultation;
(E) to seek provisions to encourage the
provision of trade-expanding compensation if a
party to a dispute under the agreement does not
come into compliance with its obligations under
the agreement;
(F) to seek provisions to impose a penalty
upon a party to a dispute under the agreement
that--
(i) encourages compliance with the
obligations of the agreement;
(ii) is appropriate to the parties,
nature, subject matter, and scope of
the violation; and
(iii) has the aim of not adversely
affecting parties or interests not
party to the dispute while maintaining
the effectiveness of the enforcement
mechanism; and
(G) to seek provisions that treat United
States principal negotiating objectives equally
with respect to--
(i) the ability to resort to
dispute settlement under the applicable
agreement;
(ii) the availability of equivalent
dispute settlement procedures; and
(iii) the availability of
equivalent remedies.
(13) WTO extended negotiations.--The principal
negotiating objectives of the United States regarding
trade in civil aircraft are those set forth in section
135(c) of the Uruguay Round Agreements Act (19 U.S.C.
3355(c)) and regarding rules of origin are the
conclusion of an agreement described in section 132 of
that Act (19 U.S.C. 3552).
(14) Trade remedy laws.--The principal negotiating
objectives of the United States with respect to trade
remedy laws are--
(A) to preserve the ability of the United
States to enforce rigorously its trade laws,
including the antidumping, countervailing duty,
and safeguard laws, and avoid agreements that
lessen the effectiveness of domestic and
international disciplines on unfair trade,
especially dumping and subsidies, or that
lessen the effectiveness of domestic and
international safeguard provisions, in order to
ensure that United States workers, agricultural
producers, and firms can compete fully on fair
terms and enjoy the benefits of reciprocal
trade concessions; and
(B) to address and remedy market
distortions that lead to dumping and
subsidization, including overcapacity,
cartelization, and market-access barriers.
(15) Border taxes.--The principal negotiating
objective of the United States regarding border taxes
is to obtain a revision of the WTO rules with respect
to the treatment of border adjustments for internal
taxes to redress the disadvantage to countries relying
primarily on direct taxes for revenue rather than
indirect taxes.
(16) Textile negotiations.--The principal
negotiating objectives of the United States with
respect to trade in textiles and apparel articles are
to obtain competitive opportunities for United States
exports of textiles and apparel in foreign markets
substantially equivalent to the competitive
opportunities afforded foreign exports in United States
markets and to achieve fairer and more open conditions
of trade in textiles and apparel.
(17) Worst forms of child labor.--The principal
negotiating objective of the United States with respect
to the trade-related aspects of the worst forms of
child labor are to seek commitments by parties to trade
agreements to vigorously enforce their own laws
prohibiting the worst forms of child labor.
(c) Promotion of Certain Priorities.--In order to address
and maintain United States competitiveness in the global
economy, the President shall--
(1) seek greater cooperation between the WTO and
the ILO;
(2) seek to establish consultative mechanisms among
parties to trade agreements to strengthen the capacity
of United States trading partners to promote respect
for core labor standards (as defined in section
2113(6)) and to promote compliance with ILO Convention
No. 182 Concerning the Prohibition and Immediate Action
for the Elimination of the Worst Forms of Child Labor,
and report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance
of the Senate on the content and operation of such
mechanisms;
(3) seek to establish consultative mechanisms among
parties to trade agreements to strengthen the capacity
of United States trading partners to develop and
implement standards for the protection of the
environment and human health based on sound science,
and report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance
of the Senate on the content and operation of such
mechanisms;
(4) conduct environmental reviews of future trade
and investment agreements, consistent with Executive
Order 13141 of November 16, 1999, and its relevant
guidelines, and report to the Committee on Ways and
Means of the House of Representatives and the Committee
on Finance of the Senate on such reviews;
(5) review the impact of future trade agreements on
United States employment, including labor markets,
modeled after Executive Order 13141 to the extent
appropriate in establishing procedures and criteria,
report to the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the
Senate on such review, and make that report available
to the public;
(6) take into account other legitimate United
States domestic objectives including, but not limited
to, the protection of legitimate health or safety,
essential security, and consumer interests and the law
and regulations related thereto;
(7) direct the Secretary of Labor to consult with
any country seeking a trade agreement with the United
States concerning that country's labor laws and provide
technical assistance to that country if needed;
(8) in connection with any trade negotiations
entered into under this Act, submit to the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate a meaningful labor
rights report of the country, or countries, with
respect to which the President is negotiating, ona time
frame determined in accordance with section 2107(b)(2)(E);
(9) with respect to any trade agreement which the
President seeks to implement under trade authorities
procedures, submit to the Congress a report describing
the extent to which the country or countries that are
parties to the agreement have in effect laws governing
exploitative child labor;
(10) continue to promote consideration of
multilateral environmental agreements and consult with
parties to such agreements regarding the consistency of
any such agreement that includes trade measures with
existing environmental exceptions under Article XX of
the GATT 1994;
(11) report to the Committee on Ways and Means of
the House of Representatives and the Committee on
Finance of the Senate, not later than 12 months after
the imposition of a penalty or remedy by the United
States permitted by a trade agreement to which this
title applies, on the effectiveness of the penalty or
remedy applied under United States law in enforcing
United States rights under the trade agreement; and
(12) seek to establish consultative mechanisms
among parties to trade agreements to examine the trade
consequences of significant and unanticipated currency
movements and to scrutinize whether a foreign
government engaged in a pattern of manipulating its
currency to promote a competitive advantage in
international trade.
The report under paragraph (11) shall address whether the
penalty or remedy was effective in changing the behavior of the
targeted party and whether the penalty or remedy had any
adverse impact on parties or interests not party to the
dispute.
(d) Consultations.--
(1) Consultations with congressional advisers.--In
the course of negotiations conducted under this title,
the United States Trade Representative shall consult
closely and on a timely basis with, and keep fully
apprised of the negotiations, the Congressional
Oversight Group convened under section 2107 and all
committees of the House of Representatives and the
Senate with jurisdiction over laws that would be
affected by a trade agreement resulting from the
negotiations.
(2) Consultation before agreement initialed.--In
the course of negotiations conducted under this title,
the United States Trade Representative shall--
(A) consult closely and on a timely basis
(including immediately before initialing an
agreement) with, and keep fully apprised of the
negotiations, the congressional advisers for
trade policy and negotiations appointed under
section 161 of the Trade Act of 1974 (19 U.S.C.
2211), the Committee on Ways and Means of the
House of Representatives, the Committee on
Finance of the Senate, and the Congressional
Oversight Group convened under section 2107;
and
(B) with regard to any negotiations and
agreement relating to agricultural trade, also
consult closely and on a timely basis
(including immediately before initialing an
agreement) with, and keep fully apprised of the
negotiations, the Committee on Agriculture of
the House of Representatives and the Committee
on Agriculture, Nutrition, and Forestry of the
Senate.
(e) Adherence to Obligations Under Uruguay Round
Agreements.--In determining whether to enter into negotiations
with a particular country, the President shall take into
account the extent to which that country has implemented, or
has accelerated the implementation of, its obligations under
the Uruguay Round Agreements.
SEC. 2103. TRADE AGREEMENTS AUTHORITY.
(a) Agreements Regarding Tariff Barriers.--
(1) In general.--Whenever the President determines
that one or more existing duties or other import
restrictions of any foreign country or the United
States are unduly burdening and restricting the foreign
trade of the United States and that the purposes,
policies, priorities, and objectives of this title will
be promoted thereby, the President--
(A) may enter into trade agreements with
foreign countries before--
(i) June 1, 2005; or
(ii) June 1, 2007, if trade
authorities procedures are extended
under subsection (c); and
(B) may, subject to paragraphs (2) and (3),
proclaim--
(i) such modification or
continuance of any existing duty,
(ii) such continuance of existing
duty-free or excise treatment, or
(iii) such additional duties,
as the President determines to be required or
appropriate to carry out any such trade
agreement.
The President shall notify the Congress of the
President's intention to enter into an agreement under
this subsection.
(2) Limitations.--No proclamation may be made under
paragraph (1) that--
(A) reduces any rate of duty (other than a
rate of duty that does not exceed 5 percent ad
valorem on the date of the enactment of this
Act) to a rate of duty which is less than 50
percent of the rate of such duty that applies
on such date of enactment;
(B) reduces the rate of duty below that
applicable under the Uruguay Round Agreements,
on any import sensitive agricultural product;
or
(C) increases any rate of duty above the
rate that applied on the date of the enactment
of this Act.
(3) Aggregate reduction; exemption from staging.--
(A) Aggregate reduction.--Except as
provided in subparagraph (B), the aggregate
reduction in the rate of duty on any article
which is in effect on any day pursuant to a
trade agreement entered into under paragraph
(1)shall not exceed the aggregate reduction
which would have been in effect on such day if--
(i) a reduction of 3 percent ad
valorem or a reduction of one-tenth of
the total reduction, whichever is
greater, had taken effect on the
effective date of the first reduction
proclaimed under paragraph (1) to carry
out such agreement with respect to such
article; and
(ii) a reduction equal to the
amount applicable under clause (i) had
taken effect at 1-year intervals after
the effective date of such first
reduction.
(B) Exemption from staging.--No staging is
required under subparagraph (A) with respect to
a duty reduction that is proclaimed under
paragraph (1) for an article of a kind that is
not produced in the United States. The United
States International Trade Commission shall
advise the President of the identity of
articles that may be exempted from staging
under this subparagraph.
(4) Rounding.--If the President determines that
such action will simplify the computation of reductions
under paragraph (3), the President may round an annual
reduction by an amount equal to the lesser of--
(A) the difference between the reduction
without regard to this paragraph and the next
lower whole number; or
(B) one-half of 1 percent ad valorem.
(5) Other limitations.--A rate of duty reduction
that may not be proclaimed by reason of paragraph (2)
may take effect only if a provision authorizing such
reduction is included within an implementing bill
provided for under section 2105 and that bill is
enacted into law.
(6) Other tariff modifications.--Notwithstanding
paragraphs (1)(B), (2)(A), (2)(C), and (3) through (5),
and subject to the consultation and layover
requirements of section 115 of the Uruguay Round
Agreements Act, the President may proclaim the
modification of any duty or staged rate reduction of
any duty set forth in Schedule XX, as defined in
section 2(5) of that Act, if the United States agrees
to such modification or staged rate reduction in a
negotiation for the reciprocal elimination or
harmonization of duties under the auspices of the World
Trade Organization.
(7) Authority under uruguay round agreements act
not affected.--Nothing in this subsection shall limit
the authority provided to the President under section
111(b) of the Uruguay Round Agreements Act (19 U.S.C.
3521(b)).
(b) Agreements Regarding Tariff and Nontariff Barriers.--
(1) In general.--(A) Whenever the President
determines that--
(i) one or more existing duties or any
other import restriction of any foreign country
or the United States or any other barrier to,
or other distortion of, international trade
unduly burdens or restricts the foreign trade
of the United States or adversely affects the
United States economy, or
(ii) the imposition of any such barrier or
distortion is likely to result in such a
burden, restriction, or effect,
and that the purposes, policies, priorities, and
objectives of this title will be promoted thereby, the
President may enter into a trade agreement described in
subparagraph (B) during the period described in
subparagraph (C).
(B) The President may enter into a trade agreement
under subparagraph (A) with foreign countries providing
for--
(i) the reduction or elimination of a duty,
restriction, barrier, or other distortion
described in subparagraph (A); or
(ii) the prohibition of, or limitation on
the imposition of, such barrier or other
distortion.
(C) The President may enter into a trade agreement
under this paragraph before--
(i) June 1, 2005; or
(ii) June 1, 2007, if trade authorities
procedures are extended under subsection (c).
(2) Conditions.--A trade agreement may be entered
into under this subsection only if such agreement makes
progress in meeting the applicable objectives described
in section 2102(a) and (b) and the President satisfies
the conditions set forth in section 2104.
(3) Bills qualifying for trade authorities
procedures.--(A) The provisions of section 151 of the
Trade Act of 1974 (in this title referred to as ``trade
authorities procedures'') apply to a bill of either
House of Congress which contains provisions described
in subparagraph (B) to the same extent as such section
151 applies to implementing bills under that section. A
bill to which this paragraph applies shall hereafter in
this title be referred to as an ``implementing bill''.
(B) The provisions referred to in subparagraph (A)
are--
(i) a provision approving a trade agreement
entered into under this subsection and
approving the statement of administrative
action, if any, proposed to implement such
trade agreement; and
(ii) if changes in existing laws or new
statutory authority are required to implement
such trade agreement or agreements, provisions,
necessary or appropriate to implement such
trade agreement or agreements, either repealing
or amending existing laws or providing new
statutory authority.
(c) Extension Disapproval Process for Congressional Trade
Authorities Procedures.--
(1) In general.--Except as provided in section
2105(b)--
(A) the trade authorities procedures apply
to implementing bills submitted with respect
totrade agreements entered into under subsection (b) before July 1,
2005; and
(B) the trade authorities procedures shall
be extended to implementing bills submitted
with respect to trade agreements entered into
under subsection (b) after June 30, 2005, and
before July 1, 2007, if (and only if)--
(i) the President requests such
extension under paragraph (2); and
(ii) neither House of the Congress
adopts an extension disapproval
resolution under paragraph (5) before
June 1, 2005.
(2) Report to congress by the president.--If the
President is of the opinion that the trade authorities
procedures should be extended to implementing bills
described in paragraph (1)(B), the President shall
submit to the Congress, not later than March 1, 2005, a
written report that contains a request for such
extension, together with--
(A) a description of all trade agreements
that have been negotiated under subsection (b)
and the anticipated schedule for submitting
such agreements to the Congress for approval;
(B) a description of the progress that has
been made in negotiations to achieve the
purposes, policies, priorities, and objectives
of this title, and a statement that such
progress justifies the continuation of
negotiations; and
(C) a statement of the reasons why the
extension is needed to complete the
negotiations.
(3) Other reports to congress.--
(A) Report by the advisory committee.--The
President shall promptly inform the Advisory
Committee for Trade Policy and Negotiations
established under section 135 of the Trade Act
of 1974 (19 U.S.C. 2155) of the President's
decision to submit a report to the Congress
under paragraph (2). The Advisory Committee
shall submit to the Congress as soon as
practicable, but not later than May 1, 2005, a
written report that contains--
(i) its views regarding the
progress that has been made in
negotiations to achieve the purposes,
policies, priorities, and objectives of
this title; and
(ii) a statement of its views, and
the reasons therefor, regarding whether
the extension requested under paragraph
(2) should be approved or disapproved.
(B) Report by itc.--The President shall
promptly inform the International Trade
Commission of the President's decision to
submit a report to the Congress under paragraph
(2). The International Trade Commission shall
submit to the Congress as soon as practicable,
but not later than May 1, 2005, a written
report that contains a review and analysis of
the economic impact on the United States of all
trade agreements implemented between the date
of enactment of this Act and the date on which
the President decides to seek an extension
requested under paragraph (2).
(4) Status of reports.--The reports submitted to
the Congress under paragraphs (2) and (3), or any
portion of such reports, may be classified to the
extent the President determines appropriate.
(5) Extension disapproval resolutions.--(A) For
purposes of paragraph (1), the term ``extension
disapproval resolution'' means a resolution of either
House of the Congress, the sole matter after the
resolving clause of which is as follows: ``That the
____ disapproves the request of the President for the
extension, under section 2103(c)(1)(B)(i) of the
Bipartisan Trade Promotion Authority Act of 2002, of
the trade authorities procedures under that Act to any
implementing bill submitted with respect to any trade
agreement entered into under section 2103(b) of that
Act after June 30, 2005.'', with the blank space being
filled with the name of the resolving House of the
Congress.
(B) Extension disapproval resolutions--
(i) may be introduced in either House of
the Congress by any member of such House; and
(ii) shall be referred, in the House of
Representatives, to the Committee on Ways and
Means and, in addition, to the Committee on
Rules.
(C) The provisions of section 152(d) and (e) of the
Trade Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating
to the floor consideration of certain resolutions in
the House and Senate) apply to extension disapproval
resolutions.
(D) It is not in order for--
(i) the Senate to consider any extension
disapproval resolution not reported by the
Committee on Finance;
(ii) the House of Representatives to
consider any extension disapproval resolution
not reported by the Committee on Ways and Means
and, in addition, by the Committee on Rules; or
(iii) either House of the Congress to
consider an extension disapproval resolution
after June 30, 2005.
(d) Commencement of Negotiations.--In order to contribute
to the continued economic expansion of the United States, the
President shall commence negotiations covering tariff and
nontariff barriers affecting any industry, product, or service
sector, and expand existing sectoral agreements to countries
that are not parties to those agreements, in cases where the
President determines that such negotiations are feasible and
timely and would benefit the United States. Such sectors
include agriculture, commercial services, intellectual property
rights, industrial and capital goods, government procurement,
information technology products, environmental technology and
services, medical equipment and services, civil aircraft, and
infrastructure products. In so doing, the President shall take
into account all of the principal negotiating objectives set
forth in section 2102(b).
SEC. 2104. CONSULTATIONS AND ASSESSMENT.
(a) Notice and Consultation Before Negotiation.--The
President, with respect to any agreement that is subject to the
provisions of section 2103(b), shall--
(1) provide, at least 90 calendar days before
initiating negotiations, written notice to the Congress
ofthe President's intention to enter into the
negotiations and set forth therein the date the President intends to
initiate such negotiations, the specific United States objectives for
the negotiations, and whether the President intends to seek an
agreement, or changes to an existing agreement;
(2) before and after submission of the notice,
consult regarding the negotiations with the Committee
on Finance of the Senate and the Committee on Ways and
Means of the House of Representatives, such other
committees of the House and Senate as the President
deems appropriate, and the Congressional Oversight
group convened under section 2107; and
(3) upon the request of a majority of the members
of the Congressional Oversight Group under section
2107(c), meet with the Congressional Oversight Group
before initiating the negotiations or at any other time
concerning the negotiations.
(b) Negotiations Regarding Agriculture.--
(1) In general.--Before initiating or continuing
negotiations the subject matter of which is directly
related to the subject matter under section
2102(b)(10)(A)(i) with any country, the President shall
assess whether United States tariffs on agricultural
products that were bound under the Uruguay Round
Agreements are lower than the tariffs bound by that
country. In addition, the President shall consider
whether the tariff levels bound and applied throughout
the world with respect to imports from the United
States are higher than United States tariffs and
whether the negotiation provides an opportunity to
address any such disparity. The President shall consult
with the Committee on Ways and Means and the Committee
on Agriculture of the House of Representatives and the
Committee on Finance and the Committee on Agriculture,
Nutrition, and Forestry of the Senate concerning the
results of the assessment, whether it is appropriate
for the United States to agree to further tariff
reductions based on the conclusions reached in the
assessment, and how all applicable negotiating
objectives will be met.
(2) Special consultations on import sensitive
products.--(A) Before initiating negotiations with
regard to agriculture, and, with respect to the Free
Trade Area for the Americas and negotiations with
regard to agriculture under the auspices of the World
Trade Organization, as soon as practicable after the
enactment of this Act, the United States Trade
Representative shall--
(i) identify those agricultural products
subject to tariff-rate quotas on the date of
enactment of this Act, and agricultural
products subject to tariff reductions by the
United States as a result of the Uruguay Round
Agreements, for which the rate of duty was
reduced on January 1, 1995, to a rate which was
not less than 97.5 percent of the rate of duty
that applied to such article on December 31,
1994;
(ii) consult with the Committee on Ways and
Means and the Committee on Agriculture of the
House of Representatives and the Committee on
Finance and the Committee on Agriculture,
Nutrition, and Forestry of the Senate
concerning--
(I) whether any further tariff
reductions on the products identified
under clause (i) should be appropriate,
taking into account the impact of any
such tariff reduction on the United
States industry producing the product
concerned;
(II) whether the products so
identified face unjustified sanitary or
phytosanitary restrictions, including
those not based on scientific
principles in contravention of the
Uruguay Round Agreements; and
(III) whether the countries
participating in the negotiations
maintain export subsidies or other
programs, policies, or practices that
distort world trade in such products
and the impact of such programs,
policies, and practices on United
States producers of the products;
(iii) request that the International Trade
Commission prepare an assessment of the
probable economic effects of any such tariff
reduction on the United States industry
producing the product concerned and on the
United States economy as a whole; and
(iv) upon complying with clauses (i), (ii),
and (iii), notify the Committee on Ways and
Means and the Committee on Agriculture of the
House of Representatives and the Committee on
Finance and the Committee on Agriculture,
Nutrition, and Forestry of the Senate of those
products identified under clause (i) for which
the Trade Representative intends to seek tariff
liberalization in the negotiations and the
reasons for seeking such tariff liberalization.
(B) If, after negotiations described in
subparagraph (A) are commenced--
(i) the United States Trade Representative
identifies any additional agricultural product
described in subparagraph (A)(i) for tariff
reductions which were not the subject of a
notification under subparagraph (A)(iv), or
(ii) any additional agricultural product
described in subparagraph (A)(i) is the subject
of a request for tariff reductions by a party
to the negotiations,
the Trade Representative shall, as soon as practicable,
notify the committees referred to in subparagraph
(A)(iv) of those products and the reasons for seeking
such tariff reductions.
(3) Negotiations regarding the fishing industry.--
Before initiating, or continuing, negotiations which
directly relate to fish or shellfish trade with any
country, the President shall consult with the Committee
on Ways and Means and the Committee on Resources of the
House of Representatives, and the Committee on Finance
and the Committee on Commerce, Science, and
Transportation of the Senate, and shall keep the
Committees apprised of negotiations on an ongoing and
timely basis.
(c) Negotiations Regarding Textiles.--Before initiating or
continuing negotiations the subject matter of which is directly
related to textiles and apparel products with any country, the
President shall assess whether United States tariffs on textile
and apparel products that were bound under the Uruguay Round
Agreements are lower than the tariffs bound by that country and
whether the negotiation provides an opportunity to address any
such disparity. The President shall consult with the Committee
on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate concerning the results of
the assessment, whether it is appropriate for the United States
to agree to further tariff reductions based on the conclusions
reached in the assessment, and how all applicable negotiating
objectives will be met.
(d) Consultation With Congress Before Agreements Entered
Into.--
(1) Consultation.--Before entering into any trade
agreement under section 2103(b), the President shall
consult with--
(A) the Committee on Ways and Means of the
House of Representatives and the Committee on
Finance of the Senate;
(B) each other committee of the House and
the Senate, and each joint committee of the
Congress, which has jurisdiction over
legislation involving subject matters which
would be affected by the trade agreement; and
(C) the Congressional Oversight Group
convened under section 2107.
(2) Scope.--The consultation described in paragraph
(1) shall include consultation with respect to--
(A) the nature of the agreement;
(B) how and to what extent the agreement
will achieve the applicable purposes, policies,
priorities, and objectives of this title; and
(C) the implementation of the agreement
under section 2105, including the general
effect of the agreement on existing laws.
(3) Report regarding united states trade remedy
laws.--
(A) Changes in certain trade laws.--The
President, at least 180 calendar days before
the day on which the President enters into a
trade agreement under section 2103(b), shall
report to the Committee on Ways and Means of
the House of Representatives and the Committee
on Finance of the Senate--
(i) the range of proposals advanced
in the negotiations with respect to
that agreement, that may be in the
final agreement, and that could require
amendments to title VII of the Tariff
Act of 1930 or to chapter 1 of title II
of the Trade Act of 1974; and
(ii) how these proposals relate to
the objectives described in section
2102(b)(14).
(B) Certain agreements.--With respect to a
trade agreement entered into with Chile or
Singapore, the report referred to in
subparagraph (A) shall be submitted by the
President at least 90 calendar days before the
day on which the President enters into that
agreement.
(C) Resolutions.--(i) At any time after the
transmission of the report under subparagraph
(A), if a resolution is introduced with respect
to that report in either House of Congress, the
procedures set forth in clauses (iii) through
(vi) shall apply to that resolution if--
(I) no other resolution with
respect to that report has previously
been reported in that House of Congress
by the Committee on Ways and Means or
the Committee on Finance, as the case
may be, pursuant to those procedures;
and
(II) no procedural disapproval
resolution under section 2105(b)
introduced with respect to a trade
agreement entered into pursuant to the
negotiations to which the report under
subparagraph (A) relates has previously
been reported in that House of Congress
by the Committee on Ways and Means or
the Committee on Finance, as the case
may be.
(ii) For purposes of this subparagraph, the
term ``resolution'' means only a resolution of
either House of Congress, the matter after the
resolving clause of which is as follows: ``That
the ____ finds that the proposed changes to
United States trade remedy laws contained in
the report of the President transmitted to the
Congress on ____ under section 2104(d)(3) of
the Bipartisan Trade Promotion Authority Act of
2002 with respect to ____, are inconsistent
with the negotiating objectives described in
section 2102(b)(14) of that Act.'', with the
first blank space being filled with the name of
the resolving House of Congress, the second
blank space being filled with the appropriate
date of the report, and the third blank space
being filled with the name of the country or
countries involved.
(iii) Resolutions in the House of
Representatives--
(I) may be introduced by any Member
of the House;
(II) shall be referred to the
Committee on Ways and Means and, in
addition, to the Committee on Rules;
and
(III) may not be amended by either
Committee.
(iv) Resolutions in the Senate--
(I) may be introduced by any Member
of the Senate;
(II) shall be referred to the
Committee on Finance; and
(III) may not be amended.
(iv) It is not in order for the House of
Representatives to consider any resolution that
is not reported by the Committee on Ways and
Means and, in addition, by the Committee on
Rules.
(v) It is not in order for the Senate to
consider any resolution that is not reported by
the Committee on Finance.
(vi) The provisions of section 152(d) and
(e) of the Trade Act of 1974 (19 U.S.C. 2192(d)
and (e)) (relating to floor consideration of
certain resolutions in the House and Senate)
shall apply to resolutions.
(e) Advisory Committee Reports.--The report required under
section 135(e)(1) of the Trade Act of 1974 regarding any trade
agreement entered into under section 2103(a) or (b) of this Act
shall be provided to the President, the Congress, and the
United States Trade Representative not later than 30 days after
the date on which the President notifies the Congress under
section 2103(a)(1) or 2105(a)(1)(A) of the President's
intention to enter into the agreement.
(f) ITC Assessment.--
(1) In general.--The President, at least 90
calendar days before the day on which the President
enters into a trade agreement under section 2103(b),
shall provide the International Trade Commission
(referred to in this subsection as ``the Commission'')
with the details of the agreement as it exists at that
time and request the Commission to prepare and submit
an assessment of the agreement as described in
paragraph (2). Between the time the President makes the
request under this paragraph and the time the
Commission submits the assessment, the President shall
keep the Commission current with respect to the details
of the agreement.
(2) ITC assessment.--Not later than 90 calendar
days after the President enters into the agreement, the
Commission shall submit to the President and the
Congress a report assessing the likely impact of the
agreement on the United States economy as a whole and
on specific industry sectors, including the impact the
agreement will have on the gross domestic product,
exports and imports, aggregate employment and
employment opportunities, the production, employment,
and competitive position of industries likely to be
significantly affected by the agreement, and the
interests of United States consumers.
(3) Review of empirical literature.--In preparing
the assessment, the Commission shall review available
economic assessments regarding the agreement, including
literature regarding any substantially equivalent
proposed agreement, and shall provide in its assessment
a description of the analyses used and conclusions
drawn in such literature, and a discussion of areas of
consensus and divergence between the various analyses
and conclusions, including those of the Commission
regarding the agreement.
SEC. 2105. IMPLEMENTATION OF TRADE AGREEMENTS.
(a) In General.--
(1) Notification and submission.--Any agreement
entered into under section 2103(b) shall enter into
force with respect to the United States if (and only
if)--
(A) the President, at least 90 calendar
days before the day on which the President
enters into the trade agreement, notifies the
House of Representatives and the Senate of the
President's intention to enter into the
agreement, and promptly thereafter publishes
notice of such intention in the Federal
Register;
(B) within 60 days after entering into the
agreement, the President submits to the
Congress a description of those changes to
existing laws that the President considers
would be required in order to bring the United
States into compliance with the agreement;
(C) after entering into the agreement, the
President submits to the Congress, on a day on
which both Houses of Congress are in session, a
copy of the final legal text of the agreement,
together with--
(i) a draft of an implementing bill
described in section 2103(b)(3);
(ii) a statement of any
administrative action proposed to
implement the trade agreement; and
(iii) the supporting information
described in paragraph (2); and
(D) the implementing bill is enacted into
law.
(2) Supporting information.--The supporting
information required under paragraph (1)(C)(iii)
consists of--
(A) an explanation as to how the
implementing bill and proposed administrative
action will change or affect existing law; and
(B) a statement--
(i) asserting that the agreement
makes progress in achieving the
applicable purposes, policies,
priorities, and objectives of this
title; and
(ii) setting forth the reasons of
the President regarding--
(I) how and to what extent
the agreement makes progress in
achieving the applicable
purposes, policies, and
objectives referred to in
clause (i);
(II) whether and how the
agreement changes provisions of
an agreement previously
negotiated;
(III) how the agreement
serves the interests of United
States commerce;
(IV) how the implementing
bill meets the standards set
forth in section 2103(b)(3);
and
(V) how and to what extent
the agreement makes progress in
achieving the applicable
purposes, policies, and
objectives referred to in
section 2102(c) regarding the
promotion of certain
priorities.
(3) Reciprocal benefits.--In order to ensure that a
foreign country that is not a party to a trade
agreement entered into under section 2103(b) does not
receive benefits under the agreement unless the country
is also subject to the obligations under the agreement,
the implementing bill submitted with respect to the
agreement shall provide that the benefits and
obligations under the agreement apply only to the
parties to the agreement, if such application is
consistent with the terms of the agreement. The
implementing bill may also provide that the benefits
and obligationsunder the agreement do not apply
uniformly to all parties to the agreement, if such application is
consistent with the terms of the agreement.
(4) Disclosure of commitments.--Any agreement or
other understanding with a foreign government or
governments (whether oral or in writing) that--
(A) relates to a trade agreement with
respect to which the Congress enacts an
implementing bill under trade authorities
procedures, and
(B) is not disclosed to the Congress before
an implementing bill with respect to that
agreement is introduced in either House of
Congress,
shall not be considered to be part of the agreement
approved by the Congress and shall have no force and
effect under United States law or in any dispute
settlement body.
(b) Limitations on Trade Authorities Procedures.--
(1) For lack of notice or consultations.--
(A) In general.--The trade authorities
procedures shall not apply to any implementing
bill submitted with respect to a trade
agreement or trade agreements entered into
under section 2103(b) if during the 60-day
period beginning on the date that one House of
Congress agrees to a procedural disapproval
resolution for lack of notice or consultations
with respect to such trade agreement or
agreements, the other House separately agrees
to a procedural disapproval resolution with
respect to such trade agreement or agreements.
(B) Procedural disapproval resolution.--(i)
For purposes of this paragraph, the term
``procedural disapproval resolution'' means a
resolution of either House of Congress, the
sole matter after the resolving clause of which
is as follows: ``That the President has failed
or refused to notify or consult in accordance
with the Bipartisan Trade Promotion Authority
Act of 2002 on negotiations with respect to
____________ and, therefore, the trade
authorities procedures under that Act shall not
apply to any implementing bill submitted with
respect to such trade agreement or
agreements.'', with the blank space being
filled with a description of the trade
agreement or agreements with respect to which
the President is considered to have failed or
refused to notify or consult.
(ii) For purposes of clause (i), the
President has ``failed or refused to notify or
consult in accordance with the Bipartisan Trade
Promotion Authority Act of 2002'' on
negotiations with respect to a trade agreement
or trade agreements if--
(I) the President has failed or
refused to consult (as the case may be)
in accordance with section 2104 or 2105
with respect to the negotiations,
agreement, or agreements;
(II) guidelines under section
2107(b) have not been developed or met
with respect to the negotiations,
agreement, or agreements;
(III) the President has not met
with the Congressional Oversight Group
pursuant to a request made under
section 2107(c) with respect to the
negotiations, agreement, or agreements;
or
(IV) the agreement or agreements
fail to make progress in achieving the
purposes, policies, priorities, and
objectives of this title.
(2) Procedures for considering resolutions.--(A)
Procedural disapproval resolutions--
(i) in the House of Representatives--
(I) may be introduced by any Member
of the House;
(II) shall be referred to the
Committee on Ways and Means and, in
addition, to the Committee on Rules;
and
(III) may not be amended by either
Committee; and
(ii) in the Senate--
(I) may be introduced by any Member
of the Senate;
(II) shall be referred to the
Committee on Finance; and
(III) may not be amended.
(B) The provisions of section 152(d) and (e) of the
Trade Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating
to the floor consideration of certain resolutions in
the House and Senate) apply to a procedural disapproval
resolution introduced with respect to a trade agreement
if no other procedural disapproval resolution with
respect to that trade agreement has previously been
reported in that House of Congress by the Committee on
Ways and Means or the Committee on Finance, as the case
may be, and if no resolution described in section
2104(d)(3)(C)(ii) with respect to that trade agreement
has been reported in that House of Congress by the
Committee on Ways and Means or the Committee on
Finance, as the case may be, pursuant to the procedures
set forth in clauses (iii) through (vi) of such section
2104(d)(3)(C).
(C) It is not in order for the House of
Representatives to consider any procedural disapproval
resolution not reported by the Committee on Ways and
Means and, in addition, by the Committee on Rules.
(D) It is not in order for the Senate to consider
any procedural disapproval resolution not reported by
the Committee on Finance.
(3) For failure to meet other requirements.--Not
later than December 31, 2002, the Secretary of
Commerce, in consultation with the Secretary of State,
the Secretary of the Treasury, the Attorney General,
and the United States Trade Representative, shall
transmit to the Congress a report setting forth the
strategy of the executive branch to address concerns of
the Congress regarding whether dispute settlement
panels and the Appellate Body of the WTO have added to
obligations, or diminished rights, of the United
States, as described in section2101(b)(3). Trade
authorities procedures shall not apply to any implementing bill with
respect to an agreement negotiated under the auspices of the WTO unless
the Secretary of Commerce has issued such report in a timely manner.
(c) Rules of House of Representatives and Senate.--
Subsection (b) of this section, section 2103(c), and section
2104(d)(3)(C) are enacted by the Congress--
(1) as an exercise of the rulemaking power of the
House of Representatives and the Senate, respectively,
and as such are deemed a part of the rules of each
House, respectively, and such procedures supersede
other rules only to the extent that they are
inconsistent with such other rules; and
(2) with the full recognition of the constitutional
right of either House to change the rules (so far as
relating to the procedures of that House) at any time,
in the same manner, and to the same extent as any other
rule of that House.
SEC. 2106. TREATMENT OF CERTAIN TRADE AGREEMENTS FOR WHICH NEGOTIATIONS
HAVE ALREADY BEGUN.
(a) Certain Agreements.--Notwithstanding the prenegotiation
notification and consultation requirement described in section
2104(a), if an agreement to which section 2103(b) applies--
(1) is entered into under the auspices of the World
Trade Organization,
(2) is entered into with Chile,
(3) is entered into with Singapore, or
(4) establishes a Free Trade Area for the Americas,
and results from negotiations that were commenced before the
date of the enactment of this Act, subsection (b) shall apply.
(b) Treatment of Agreements.--In the case of any agreement
to which subsection (a) applies--
(1) the applicability of the trade authorities
procedures to implementing bills shall be determined
without regard to the requirements of section 2104(a)
(relating only to 90 days notice prior to initiating
negotiations), and any procedural disapproval
resolution under section 2105(b)(1)(B) shall not be in
order on the basis of a failure or refusal to comply
with the provisions of section 2104(a); and
(2) the President shall, as soon as feasible after
the enactment of this Act--
(A) notify the Congress of the negotiations
described in subsection (a), the specific
United States objectives in the negotiations,
and whether the President is seeking a new
agreement or changes to an existing agreement;
and
(B) before and after submission of the
notice, consult regarding the negotiations with
the committees referred to in section
2104(a)(2) and the Congressional Oversight
Group convened under section 2107.
SEC. 2107. CONGRESSIONAL OVERSIGHT GROUP.
(a) Members and Functions.--
(1) In general.--By not later than 60 days after
the date of the enactment of this Act, and not later
than 30 days after the convening of each Congress, the
chairman of the Committee on Ways and Means of the
House of Representatives and the chairman of the
Committee on Finance of the Senate shall convene the
Congressional Oversight Group.
(2) Membership from the house.--In each Congress,
the Congressional Oversight Group shall be comprised of
the following Members of the House of Representatives:
(A) The chairman and ranking member of the
Committee on Ways and Means, and 3 additional
members of such Committee (not more than 2 of
whom are members of the same political party).
(B) The chairman and ranking member, or
their designees, of the committees of the House
of Representatives which would have, under the
Rules of the House of Representatives,
jurisdiction over provisions of law affected by
a trade agreement negotiations for which are
conducted at any time during that Congress and
to which this title would apply.
(3) Membership from the senate.--In each Congress,
the Congressional Oversight Group shall also be
comprised of the following members of the Senate:
(A) The chairman and ranking member of the
Committee on Finance and 3 additional members
of such Committee (not more than 2 of whom are
members of the same political party).
(B) The chairman and ranking member, or
their designees, of the committees of the
Senate which would have, under the Rules of the
Senate, jurisdiction over provisions of law
affected by a trade agreement negotiations for
which are conducted at any time during that
Congress and to which this title would apply.
(4) Accreditation.--Each member of the
Congressional Oversight Group described in paragraph
(2)(A) and (3)(A) shall be accredited by the United
States Trade Representative on behalf of the President
as an official adviser to the United States delegation
in negotiations for any trade agreement to which this
title applies. Each member of the Congressional
Oversight Group described in paragraph (2)(B) and
(3)(B) shall be accredited by the United States Trade
Representative on behalf of the President as an
official adviser to the United States delegation in the
negotiations by reason of which the member is in the
Congressional Oversight Group. The Congressional
Oversight Group shall consult with and provide advice
to the Trade Representative regarding the formulation
of specific objectives, negotiating strategies and
positions, the development of the applicable trade
agreement, and compliance and enforcement of the
negotiated commitments under the trade agreement.
(5) Chair.--The Congressional Oversight Group shall
be chaired by the Chairman of the Committee on Ways and
Means of the House of Representatives and the Chairman
of the Committee on Finance of the Senate.
(b) Guidelines.--
(1) Purpose and revision.--The United States Trade
Representative, in consultation with the chairmen and
ranking minority members of the Committee on Ways and
Means of the House of Representatives and the Committee
on Finance of the Senate--
(A) shall, within 120 days after the date
of the enactment of this Act, develop written
guidelines to facilitate the useful and timely
exchange of information between the Trade
Representative and the Congressional Oversight
Group convened under this section; and
(B) may make such revisions to the
guidelines as may be necessary from time to
time.
(2) Content.--The guidelines developed under
paragraph (1) shall provide for, among other things--
(A) regular, detailed briefings of the
Congressional Oversight Group regarding
negotiating objectives, including the promotion
of certain priorities referred to in section
2102(c), and positions and the status of the
applicable negotiations, beginning as soon as
practicable after the Congressional Oversight
Group is convened, with more frequent briefings
as trade negotiations enter the final stage;
(B) access by members of the Congressional
Oversight Group, and staff with proper security
clearances, to pertinent documents relating to
the negotiations, including classified
materials;
(C) the closest practicable coordination
between the Trade Representative and the
Congressional Oversight Group at all critical
periods during the negotiations, including at
negotiation sites;
(D) after the applicable trade agreement is
concluded, consultation regarding ongoing
compliance and enforcement of negotiated
commitments under the trade agreement; and
(E) the time frame for submitting the
report required under section 2102(c)(8).
(c) Request for Meeting.--Upon the request of a majority of
the Congressional Oversight Group, the President shall meet
with the Congressional Oversight Group before initiating
negotiations with respect to a trade agreement, or at any other
time concerning the negotiations.
SEC. 2108. ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS.
(a) In General.--At the time the President submits to the
Congress the final text of an agreement pursuant to section
2105(a)(1)(C), the President shall also submit a plan for
implementing and enforcing the agreement. The implementation
and enforcement plan shall include the following:
(1) Border personnel requirements.--A description
of additional personnel required at border entry
points, including a list of additional customs and
agricultural inspectors.
(2) Agency staffing requirements.--A description of
additional personnel required by Federal agencies
responsible for monitoring and implementing the trade
agreement, including personnel required by the Office
of the United States Trade Representative, the
Department of Commerce, the Department of Agriculture
(including additional personnel required to implement
sanitary and phytosanitary measures in order to obtain
market access for United States exports), the
Department of the Treasury, and such other agencies as
may be necessary.
(3) Customs infrastructure requirements.--A
description of the additional equipment and facilities
needed by the United States Customs Service.
(4) Impact on state and local governments.--A
description of the impact the trade agreement will have
on State and local governments as a result of increases
in trade.
(5) Cost analysis.--An analysis of the costs
associated with each of the items listed in paragraphs
(1) through (4).
(b) Budget Submission.--The President shall include a
request for the resources necessary to support the plan
described in subsection (a) in the first budget that the
President submits to the Congress after the submission of the
plan.
SEC. 2109. COMMITTEE STAFF.
The grant of trade promotion authority under this title is
likely to increase the activities of the primary committees of
jurisdiction in the area of international trade. In addition,
the creation of the Congressional Oversight Group under section
2107 will increase the participation of a broader number of
Members of Congress in the formulation of United States trade
policy and oversight of the international trade agenda for the
United States. The primary committees of jurisdiction should
have adequate staff to accommodate these increases in
activities.
SEC. 2110. CONFORMING AMENDMENTS.
(a) In General.--Title I of the Trade Act of 1974 (19
U.S.C. 2111 et seq.) is amended as follows:
(1) Implementing bill.--
(A) Section 151(b)(1) (19 U.S.C.
2191(b)(1)) is amended by striking ``section
1103(a)(1) of the Omnibus Trade and
Competitiveness Act of 1988, or section 282 of
the Uruguay Round Agreements Act'' and
inserting ``section 282 of the Uruguay Round
Agreements Act, or section 2105(a)(1) of the
Bipartisan Trade Promotion Authority Act of
2002''.
(B) Section 151(c)(1) (19 U.S.C.
2191(c)(1)) is amended by striking ``or section
282 of the Uruguay Round Agreements Act'' and
inserting ``, section 282 of the Uruguay Round
Agreements Act, or section 2105(a)(1) of the
Bipartisan Trade Promotion Authority Act of
2002''.
(2) Advice from international trade commission.--
Section 131 (19 U.S.C. 2151) is amended--
(A) in subsection (a)--
(i) in paragraph (1), by striking
``section 123 of this Act or section
1102 (a) or (c) of the Omnibus Trade
and Competitiveness Act of 1988,'' and
inserting ``section 123 of this Act or
section 2103(a) or (b) ofthe Bipartisan
Trade Promotion Authority Act of 2002,''; and
(ii) in paragraph (2), by striking
``section 1102 (b) or (c) of the
Omnibus Trade and Competitiveness Act
of 1988'' and inserting ``section
2103(b) of the Bipartisan Trade
Promotion Authority Act of 2002'';
(B) in subsection (b), by striking
``section 1102(a)(3)(A)'' and inserting
``section 2103(a)(3)(A) of the Bipartisan Trade
Promotion Authority Act of 2002''; and
(C) in subsection (c), by striking
``section 1102 of the Omnibus Trade and
Competitiveness Act of 1988,'' and inserting
``section 2103 of the Bipartisan Trade
Promotion Authority Act of 2002,''.
(3) Hearings and advice.--Sections 132, 133(a), and
134(a) (19 U.S.C. 2152, 2153(a), and 2154(a)) are each
amended by striking ``section 1102 of the Omnibus Trade
and Competitiveness Act of 1988,'' each place it
appears and inserting ``section 2103 of the Bipartisan
Trade Promotion Authority Act of 2002,''.
(4) Prerequisites for offers.--Section 134(b) (19
U.S.C. 2154(b)) is amended by striking ``section 1102
of the Omnibus Trade and Competitiveness Act of 1988''
and inserting ``section 2103 of the Bipartisan Trade
Promotion Authority Act of 2002''.
(5) Advice from private and public sectors.--
Section 135 (19 U.S.C. 2155) is amended--
(A) in subsection (a)(1)(A), by striking
``section 1102 of the Omnibus Trade and
Competitiveness Act of 1988'' and inserting
``section 2103 of the Bipartisan Trade
Promotion Authority Act of 2002'';
(B) in subsection (e)(1)--
(i) by striking ``section 1102 of
the Omnibus Trade and Competitiveness
Act of 1988'' each place it appears and
inserting ``section 2103 of the
Bipartisan Trade Promotion Authority
Act of 2002''; and
(ii) by striking ``section
1103(a)(1)(A) of such Act of 1988'' and
inserting ``section 2105(a)(1)(A) of
the Bipartisan Trade Promotion
Authority Act of 2002''; and
(C) in subsection (e)(2), by striking
``section 1101 of the Omnibus Trade and
Competitiveness Act of 1988'' and inserting
``section 2102 of the Bipartisan Trade
Promotion Authority Act of 2002''.
(6) Transmission of agreements to congress.--
Section 162(a) (19 U.S.C. 2212(a)) is amended by
striking ``or under section 1102 of the Omnibus Trade
and Competitiveness Act of 1988'' and inserting ``or
under section 2103 of the Bipartisan Trade Promotion
Authority Act of 2002''.
(b) Application of Certain Provisions.--For purposes of
applying sections 125, 126, and 127 of the Trade Act of 1974
(19 U.S.C. 2135, 2136(a), and 2137)--
(1) any trade agreement entered into under section
2103 shall be treated as an agreement entered into
under section 101 or 102, as appropriate, of the Trade
Act of 1974 (19 U.S.C. 2111 or 2112); and
(2) any proclamation or Executive order issued
pursuant to a trade agreement entered into under
section 2103 shall be treated as a proclamation or
Executive order issued pursuant to a trade agreement
entered into under section 102 of the Trade Act of
1974.
SEC. 2111. REPORT ON IMPACT OF TRADE PROMOTION AUTHORITY.
(a) In General.--Not later than 1 year after the date of
enactment of this Act, the International Trade Commission shall
report to the Committee on Finance of the Senate and the
Committee on Ways and Means of the House of Representatives
regarding the economic impact on the United States of the trade
agreements described in subsection (b).
(b) Agreements.--The trade agreements described in this
subsection are the following:
(1) The United States-Israel Free Trade Agreement.
(2) The United States-Canada Free Trade Agreement.
(3) The North American Free Trade Agreement.
(4) The Uruguay Round Agreements.
(5) The Tokyo Round of Multilateral Trade
Negotiations.
SEC. 2112. INTERESTS OF SMALL BUSINESS.
The Assistant United States Trade Representative for
Industry and Telecommunications shall be responsible for
ensuring that the interests of small business are considered in
all trade negotiations in accordance with the objective
described in section 2102(a)(8). It is the sense of the
Congress that the small business functions should be reflected
in the title of the Assistant United States Trade
Representative assigned the responsibility for small business.
SEC. 2113. DEFINITIONS.
In this title:
(1) Agreement on agriculture.--The term ``Agreement
on Agriculture'' means the agreement referred to in
section 101(d)(2) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(2)).
(2) Agreement on safeguards.--The term ``Agreement
on Safeguards means the agreement referred to in
section 101(d)(12) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(12)).
(3) Agreement on subsidies and countervailing
measures.--The term ``Agreement on Subsidies and
Countervailing Measures'' means the agreement referred
to in section 101(d)(13) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(13)).
(4) Antidumping agreement.--The term ``Antidumping
Agreement`` means the Agreement on Implementation of
Article VI of the General Agreement on Tariffs and
Trade 1994 referred to in section 101(d)(7) of the
Uruguay Round Agreements Act (19 U.S.C. 3511(d)(7)).
(5) Appellate body.--The term ``Appellate Body''
means the Appellate Body established under Article 17.1
of the Dispute Settlement Understanding.
(6) Core labor standards.--The term ``core labor
standards'' means--
(A) the right of association;
(B) the right to organize and bargain
collectively;
(C) a prohibition on the use of any form of
forced or compulsory labor;
(D) a minimum age for the employment of
children; and
(E) acceptable conditions of work with
respect to minimum wages, hours of work, and
occupational safety and health.
(7) Dispute settlement understanding.--The term
``Dispute Settlement Understanding'' means the
Understanding on Rules and Procedures Governing the
Settlement of Disputes referred to in section
101(d)(16) of the Uruguay Round Agreements Act.
(8) GATT 1994.--The term ``GATT 1994'' has the
meaning given that term in section 2 of the Uruguay
Round Agreements Act (19 U.S.C. 3501).
(9) ILO.--The term ``ILO'' means the International
Labor Organization.
(10) Import sensitive agricultural product.--The
term ``import sensitive agricultural product'' means an
agricultural product--
(A) with respect to which, as a result of
the Uruguay Round Agreements the rate of duty
was the subject of tariff reductions by the
United States and, pursuant to such Agreements,
was reduced on January 1, 1995, to a rate that
was not less than 97.5 percent of the rate of
duty that applied to such article on December
31, 1994; or
(B) which was subject to a tariff-rate
quota on the date of the enactment of this Act.
(11) United states person.--The term ``United
States person'' means--
(A) a United States citizen;
(B) a partnership, corporation, or other
legal entity organized under the laws of the
United States; and
(C) a partnership, corporation, or other
legal entity that is organized under the laws
of a foreign country and is controlled by
entities described in subparagraph (B) or
United States citizens, or both.
(12) Uruguay round agreements.--The term ``Uruguay
Round Agreements'' has the meaning given that term in
section 2(7) of the Uruguay Round Agreements Act (19
U.S.C. 3501(7)).
(13) World trade organization; wto.--The terms
``World Trade Organization'' and ``WTO'' mean the
organization established pursuant to the WTO Agreement.
(14) WTO agreement.--The term ``WTO Agreement''
means the Agreement Establishing the World Trade
Organization entered into on April 15, 1994.
(15) WTO member.--The term ``WTO member'' has the
meaning given that term in section 2(10) of the Uruguay
Round Agreements Act (19 U.S.C. 3501(10)).
DIVISION C--ANDEAN TRADE PREFERENCE ACT
TITLE XXXI--ANDEAN TRADE PREFERENCE
SEC. 3101. SHORT TITLE.
This title may be cited as the ``Andean Trade Promotion and
Drug Eradication Act''.
SEC. 3102. 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. 3103. 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, that is imported directly into the customs
territory of the United States from 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 title as eligible
for purposes 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;
``(C) sugars, syrups, and sugar-containing
products subject to over-quota duty rates under
applicable tariff-rate quotas; or
``(D) tuna prepared or preserved in any
manner in airtight containers, except as
provided in paragraph (4).
``(3) Apparel articles and certain textile
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 or
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 wholly formed, or
components knit-to-shape, in
the United States, from yarns
wholly 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).
Apparel articles shall qualify
under this subclause only if
all dyeing, printing, and
finishing of the fabrics from
which the articles are
assembled, if the fabrics are
knit fabrics, is carried out in
the United States. Apparel
articles shall qualify under
this subclause only if all
dyeing, printing, and finishing
of the fabrics from which the
articles are assembled, if the
fabrics are woven fabrics, is
carried out in the United
States.
``(II) Fabrics or fabric
components formed or components
knit-to-shape, in 1 or more
ATPDEA beneficiary countries,
from yarns wholly 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 value
of llama, alpaca, or vicuna.
``(III) Fabrics or yarns,
to the extent that apparel
articles of such fabrics or
yarns would be eligible for
preferential treatment, without
regard to the source of the
fabrics or yarns, 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 wholly 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)
(unless the apparel articles are made
exclusively 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
October 1, 2002, and in each of the 4
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 2 percent for the 1-year period
beginning October 1, 2002, increased in
each of the 4 succeeding 1-year periods
by equal increments, so that for the
period beginning October 1, 2006, the
applicable percentage does not exceed 5
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) Certain other apparel
articles.--
``(I) General rule.--Any
apparel article classifiable
under subheading 6212.10 of the
HTS, except for articles
entered under clause (i), (ii),
(iii), or (iv), if the article
is both cut and sewn or
otherwise assembled in the
United States, or one or more
ATPDEA beneficiary countries,
or both.
``(II) Limitation.--During
the 1-year period beginning on
October 1, 2003, and during
each of the 3 succeeding 1-year
periods, apparel articles
described in subclause (I) of a
producer or an entity
controlling production shall be
eligible for preferential
treatment under this paragraph
only if the aggregate cost of
fabrics (exclusive of all
findings and trimmings) formed
in the United States that are
used in the production of all
such articles of that producer
or entity that are entered and
eligible under this clause
during the preceding 1-year
period is at least 75 percent
of the aggregate declared
customs value of the fabric
(exclusive of all findings and
trimmings) contained in all
such articles of that producer
or entity that are entered and
eligible under this clause
during the preceding 1-year
period.
``(III) Development of
procedure to ensure
compliance.--The United States
Customs Service shall develop
and implement methods and
procedures to ensure ongoing
compliance with the requirement
set forth in subclause (II). If
the Customs Service finds that
a producer or an entity
controlling production has not
satisfied such requirement in a
1-year period, then apparel
articles described in subclause
(I) of that producer or entity
shall be ineligible for
preferential treatment under
this paragraph during any
succeeding 1-year period until
the aggregate cost of fabrics
(exclusive of all findings and
trimmings) formed in the United
States that are used in the
production of such articles of
that producer or entity entered
during the preceding 1-year
period is at least 85 percent
of the aggregate declared
customsvalue of the fabric
(exclusive of all findings and trimmings) contained in all such
articles of that producer or entity that are entered and eligible under
this clause during the preceding 1-year period.
``(vi) 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 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 yarns is not more
than 7 percent of the total
weight of the good.
``(IV) Special origin
rule.--An article otherwise
eligible for preferential
treatment under clause (i) or
(iii) shall not be ineligible
for such treatment because the
article contains nylon filament
yarn (other than elastomeric
yarn) that is classifiable
under subheading 5402.10.30,
5402.10.60, 5402.31.30,
5402.31.60, 5402.32.30,
5402.32.60, 5402.41.10,
5402.41.90, 5402.51.00, or
5402.61.00 of the HTS from a
country that is a party to an
agreement with the United
States establishing a free
trade area, which entered into
force before January 1, 1995.
``(vii) Textile luggage.--Textile
luggage--
``(I) assembled in an
ATPDEA beneficiary country from
fabric wholly formed and cut in
the United States, from yarns
wholly formed in the United
States, that is entered under
subheading 9802.00.80 of the
HTS; or
``(II) assembled from
fabric cut in an ATPDEA
beneficiary country from fabric
wholly formed in the United
States from yarns wholly formed
in the United States.
``(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
thissubparagraph 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 of the Annex.
``(4) Tuna.--
``(A) General rule.--Tuna that is harvested
by United States vessels or ATPDEA beneficiary
country vessels, that is prepared or preserved
in any manner, in an ATPDEA beneficiary
country, in foil or other flexible airtight
containers weighing with their contents not
more than 6.8 kilograms each, and that is
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.
``(B) Definitions.--In this paragraph--
``(i) United states vessel.--A
`United States vessel' is a vessel
having a certificate of documentation
with a fishery endorsement under
chapter 121 of title 46, United States
Code.
``(ii) ATPDEA vessel.--An `ATPDEA
vessel' is a vessel--
``(I) which is registered
or recorded in an ATPDEA
beneficiary country;
``(II) which sails under
the flag of an ATPDEA
beneficiary country;
``(III) which is at least
75 percent owned by nationals
of an ATPDEA beneficiary
country or by a company having
its principal place of business
in an ATPDEA beneficiary
country, of which the manager
or managers, chairman of the
board of directors or of the
supervisory board, and the
majority of the members of such
boards are nationals of an
ATPDEA beneficiary country and
of which, in the case of a
company, at least 50 percent of
the capital is owned by an
ATPDEA beneficiary country or
by public bodies or nationals
of an ATPDEA beneficiary
country;
``(IV) of which the master
and officers are nationals of
an ATPDEA beneficiary country;
and
``(V) of which at least 75
percent of the crew are
nationals of an ATPDEA
beneficiary country.
``(5) Customs procedures.--
``(A) In general.--
``(i) Regulations.--Any importer
that claims preferential treatment
under paragraph (1), (3), or (4) 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),
(3), or (4) 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 ifit 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),
(3), or (4).
``(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), (3), or (4) 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.
``(C) Report on cooperation of atpdea
countries concerning circumvention.--The United
States Commissioner of Customs shall conduct a
study analyzing the extent to which each ATPDEA
beneficiary country--
``(i) has cooperated fully with the
United States, consistent with its
domestic laws and procedures, in
instances of circumvention or alleged
circumvention of existing quotas on
imports of textile and apparel goods,
to establish necessary relevant facts
in the places of import, export, and,
where applicable, transshipment,
including investigation of
circumvention practices, exchanges of
documents, correspondence, reports, and
other relevant information, to the
extent such information is available;
``(ii) has taken appropriate
measures, consistent with its domestic
laws and procedures, against exporters
and importers involved in instances of
false declaration concerning
quantities, description,
classification, or origin of textile
and apparel goods; and
``(iii) has penalized the
individuals and entities involved in
any such circumvention, consistent with
its domestic laws and procedures, and
has worked closely to seek the
cooperation of any third country to
prevent such circumvention from taking
place in that third country.
The Commissioner of Customs shall submit to the
Congress, not later than October 1, 2003, a
report on the study conducted under this
subparagraph.
``(6) 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.
``(viii) The extent to which the
country has taken steps to support the
efforts of the United States to combat
terrorism.
``(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.
``(F) FTAA.--The term `FTAA' means the Free
Trade Area for the Americas.''.
(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), (3),
or (4) 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)(6)(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)--
(i) by inserting ``(or otherwise provided
for)'' after ``eligibility''; and
(ii) by inserting ``(or preferential
treatment)'' after ``duty-free treatment''; and
(B) in paragraph (2), by striking ``subsection
(a)'' and inserting ``paragraph (1)''.
(d) Petitions for Review.--
(1) In general.--Not later than 180 days after the
date of the enactment of this Act, the President shall
promulgate regulations regarding the review of
eligibility of articles and countries under the Andean
Trade Preference Act, consistent with section 203(e) of
such Act, as amended by this title.
(2) Content of regulations.--The regulations shall
be similar to the regulations regarding eligibility
under the generalized system of preferences under title
V of the Trade Act of 1974 with respect to the
timetable for reviews and content, and shall include
procedures for requesting withdrawal, suspension, or
limitations of preferential duty treatment under the
Andean Trade Preference Act, conducting reviews of such
requests, and implementing the results of the reviews.
(e) Reporting Requirements.--Section 203(f) of the Andean
Trade Preference Act (19 U.S.C. 3202(f)) is amended to read as
follows:
``(f) Reporting Requirements.--
``(1) In general.--Not later than April 30, 2003,
and every 2 years thereafter during the period this
title is in effect, the United States Trade
Representative shall submit to the Congress a report
regarding the operation of this title, including--
``(A) with respect to subsections (c) and
(d), the results of a general review of
beneficiary countries based on the
considerations described in such subsections;
and
``(B) the performance of each beneficiary
country or ATPEA beneficiary country, as the
case may be, under the criteria set forth in
section 204(b)(6)(B).
``(2) Public comment.--Before submitting the report
described in paragraph (1), the United States Trade
Representative shall publish a notice in the Federal
Register requesting public comments on whether
beneficiary countries are meeting the criteria listed
in section 204(b)(6)(B).''.
SEC. 3104. TERMINATION.
(a) In General.--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.''.
(b) Retroactive Application for Certain Liquidations and
Reliquidations.--
(1) In general.--Notwithstanding section 514 of the
Tariff Act of 1930 or any other provision of law, and
subject to paragraph (3), the entry--
(A) of any article to which duty-free
treatment (or preferential treatment) under the
Andean Trade Preference Act (19 U.S.C. 3201 et
seq.) would have applied if the entry had been
made on December 4, 2001, and
(B) that was made after December 4, 2001,
and before the date of the enactment of this
Act,
shall be liquidated or reliquidated as if such duty-
free treatment (or preferential treatment) applied, and
the Secretary of the Treasury shall refund any duty
paid with respect to such entry.
(2) Entry.--As used in this subsection, the term
``entry'' includes a withdrawal from warehouse for
consumption.
(3) Requests.--Liquidation or reliquidation may be
made under paragraph (1) with respect to an entry only
if a request therefor is filed with the Customs
Service, within 180 days after the date of the
enactment of this Act, that contains sufficient
information to enable the Customs Service--
(A) to locate the entry; or
(B) to reconstruct the entry if it cannot
be located.
SEC. 3105. REPORT ON FREE TRADE AGREEMENT WITH ISRAEL.
(a) Report to Congress.--The United States Trade
Representative shall review the implementation of the United
States-Israel Free Trade Agreement and shall submit to the
Speaker of the House of Representatives, the President of the
Senate, the Committee on Ways and Means of the House of
Representatives, and the Committee on Finance of the Senate a
report on the results of such review.
(b) Contents of Report.--The report under subsection (a)
shall include the following:
(1) A review of the terms of the United States-
Israel Free Trade Agreement, particularly the terms
with respect to market access commitments.
(2) A review of subsequent agreements which may
have been reached between the parties to the Agreement
and of unilateral concessions of additional benefits
received by each party from the other.
(3) A review of any current negotiations between
the parties to the Agreement with respect to
implementation of the Agreement and other pertinent
matters.
(4) An assessment of the degree of fulfillment of
obligations under the Agreement by the United States
and Israel.
(5) An assessment of improvements in structuring
future trade agreements that should be considered based
on the experience of the United States under the
Agreement.
(c) Timing of Report.--The United States Trade
Representative shall submit the report under subsection (a) not
later than 6 months after the date of the enactment of this
Act.
(d) Definition.--In this section, the terms ``United
States-Israel Free Trade Agreement'' and ``Agreement'' means
the Agreement on the Establishment of a Free Trade Area between
the Government of the United States of America and the
Government of Israel entered into on April 22, 1985.
SEC. 3106. MODIFICATION OF DUTY TREATMENT FOR TUNA.
Subheading 1604.14.20 of the Harmonized Tariff Schedule of
the United States is amended--
(1) in the article description, by striking ``20
percent of the United States pack of canned tuna'' and
inserting ``4.8 percent of apparent United States
consumption of tuna in airtight containers''; and
(2) by redesignating such subheading as subheading
1604.14.22.
SEC. 3107. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC RECOVERY
ACT.
(a) In General.--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--
(A) 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 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--'';
and
(B) by adding at the end the following:
``Apparel articles entered on or after
September 1, 2002, shall qualify under
the preceding sentence only if all
dyeing, printing, and finishing of the
fabrics from which the articles are
assembled, if the fabrics are knit
fabrics, is carried out in the United
States. Apparel articles entered on or
after September 1, 2002, shall qualify
under the first sentence of this clause
only if all dyeing, printing, and
finishing of the fabrics from which the
articles are assembled, if the fabrics
are woven fabrics, is carried out in
the United States.''.
(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). Apparel articles entered on or
after September 1, 2002, shall qualify
under the preceding sentence only if
all dyeing, printing, and finishing of
the fabrics from which the articles are
assembled, if the fabrics are knit
fabrics, is carried out in the United
States. Apparel articles entered on or
after September 1, 2002, shall qualify
under the first sentence of this clause
only if all dyeing, printing, and
finishing of the fabrics from which the
articles are assembled, if the fabrics
are woven fabrics, is carried out 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) 500,000,000 square
meter equivalents during the 1-
year period beginning on
October 1, 2002.
``(bb) 850,000,000 square
meter equivalents during the 1-
year period beginning on
October 1, 2003.
``(cc) 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) Clause (iv) is amended to read as follows:
``(iv) Certain other apparel
articles.--
``(I) General rule.--
Subject to subclause (II), any
apparel article classifiable
under subheading 6212.10 of the
HTS, except for articles
entered under clause (i), (ii),
(iii), (v), or (vi), if the
article is both cut and sewn or
otherwise assembled in the
United States, or one or more
CBTPA beneficiary countries, or
both.
``(II) Limitation.--During
the 1-year period beginning on
October 1, 2001, and during
each of the 6 succeeding 1-year
periods, apparel articles
described in subclause (I) of a
producer or an entity
controlling production shall be
eligible for preferential
treatment under subparagraph
(B) only if the aggregate cost
of fabrics (exclusive of all
findings and trimmings) formed
in the United States that are
used in the production of all
such articles of that producer
or entity that are entered and
eligible under this clause
during the preceding 1-year
period is at least 75 percent
of the aggregate declared
customs value of the fabric
(exclusive of all findings and
trimmings) contained in all
such articles of that producer
or entity that are entered and
eligible under this clause
during the preceding 1-year
period.
``(III) Development of
procedure to ensure
compliance.--The United States
Customs Service shall develop
and implement methods and
procedures to ensure ongoing
compliance with the requirement
set forth in subclause (II). If
the Customs Service finds that
a producer or an entity
controlling production has not
satisfied such requirement in a
1-year period, then apparel
articles described in subclause
(I) of that producer or entity
shall be ineligible for
preferential treatment under
subparagraph (B) during any
succeeding 1-year period until
the aggregate cost of fabrics
(exclusive of all findings and
trimmings) formed in the United
States that are used in the
production of such articles of
that producer or entity entered
during the preceding 1-year
period is at least 85 percent
of the aggregate declared
customs value of the fabric
(exclusive of all findings and
trimmings) contained in all
such articles of that producer
or entity that are entered and
eligible under this clause
during the preceding 1-year
period.''.
(6) Clause (vii) is amended by adding at the end
the following new subclause:
``(V) Thread.--An article
otherwise eligible for
preferential treatment under
this paragraph shall not be
ineligible for such treatment
because the thread used to
assemble the article is dyed,
printed, or finished in one or
more CBTPA beneficiary
countries.''.
(7) 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).
Apparel articles shall qualify under
this clause only if they meet the
requirements of clause (i) or (ii) (as
the case may be) with respect to
dyeing, printing, and finishing of knit
and woven fabrics from which the
articles are assembled.''.
(b) Effective Date of Certain Provisions.--The amendment
made by subsection (a)(3) shall take effect on October 1, 2002.
SEC. 3108. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND OPPORTUNITY ACT.
(a) In General.--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 Harmonized Tariff Schedule of the
United States 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 Harmonized Tariff
Schedule of the United States 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 Harmonized Tariff Schedule
of the United States 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:''; and
(B) by amending subparagraph (B) to read as
follows:
``(B) Special rule 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
Harmonized Tariff Schedule of the United States).''.
(b) Increase in Limitation on Certain Benefits.--The
applicable percentage under clause (ii) of section 112(b)(3)(A)
of the African Growth and Opportunity Act (19 U.S.C.
3721(b)(3)(A)) shall be increased--
(1) by 2.17 percent for the 1-year period beginning
on October 1, 2002, and
(2) by equal increments in each succeeding 1-year
period provided for in such clause, so that for the 1-
year period beginning October 1, 2007, the applicable
percentage is increased by 3.5 percent,
except that such increase shall not apply with respect to
articles eligible under subparagraph (B) of section 112(b)(3)
of that Act.
DIVISION D--EXTENSION OF CERTAIN PREFERENTIAL TRADE TREATMENT
TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
SEC. 4101. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.
(a) Extension of Duty-Free Treatment Under System.--Section
505 of the Trade Act of 1974 (19 U.S.C. 2465(a)) is amended by
striking ``September 30, 2001'' and inserting ``December 31,
2006''.
(b) Retroactive Application for Certain Liquidations and
Reliquidations.--
(1) In general.--Notwithstanding section 514 of the
Tariff Act of 1930 or any other provision of law, and
subject to paragraph (2), the entry--
(A) of any article to which duty-free
treatment under title V of the Trade Act of
1974 would have applied if the entry had been
made on September 30, 2001,
(B) that was made after September 30, 2001,
and before the date of the enactment of this
Act, and
(C) to which duty-free treatment under
title V of that Act did not apply,
shall be liquidated or reliquidated as free of duty,
and the Secretary of the Treasury shall refund any duty
paid with respect to such entry.
(2) Requests.--Liquidation or reliquidation may be
made under paragraph (1) with respect to an entry only
if a request therefor is filed with the Customs
Service, within 180 days after the date of the
enactment of this Act, that contains sufficient
information to enable the Customs Service--
(A) to locate the entry; or
(B) to reconstruct the entry if it cannot
be located.
(3) Definition.--As used in this subsection, the
term ``entry'' includes a withdrawal from warehouse for
consumption.
SEC. 4102. AMENDMENTS TO GENERALIZED SYSTEM OF PREFERENCES.
(a) Eligibility for Generalized System of Preferences.--
Section 502(b)(2)(F) of the Trade Act of 1974 (19 U.S.C.
2462(b)(2)(F)) is amended by striking the period at the end and
inserting ``or such country has not taken steps to support the
efforts of the United States to combat terrorism.''.
(b) Definition of Internationally Recognized Worker
Rights.--Section 507(4) of the Trade Act of 1974 (19 U.S.C.
2467(4)) is amended by amending subparagraph (D) to read as
follows:
``(D) a minimum age for the employment of
children, and a prohibition on the worst forms
of child labor, as defined in paragraph (6);
and''.
DIVISION E--MISCELLANEOUS PROVISIONS
TITLE L--MISCELLANEOUS TRADE BENEFITS
Subtitle A--Wool Provisions
SEC. 5101. WOOL PROVISIONS.
(a) Short Title.--This section may be cited as the ``Wool
Manufacturer Payment Clarification and Technical Corrections
Act''.
(b) Clarification of Temporary Duty Suspension.--Heading
9902.51.13 of the Harmonized Tariff Schedule of the United
States is amended by inserting ``average'' before
``diameters''.
(c) Payments to Manufacturers of Certain Wool Products.--
(1) Payments.--Section 505 of the Trade and
Development Act of 2000 (Public Law 106-200; 114 Stat.
303) is amended as follows:
(A) Subsection (a) is amended--
(i) by striking ``In each of the
calendar years'' and inserting ``For
each of the calendar years''; and
(ii) by striking ``for a refund of
duties'' and all that follows through
the end of the subsection and inserting
``for a payment equal to an amount
determined pursuant to subsection
(d)(1).''.
(B) Subsection (b) is amended to read as
follows:
``(b) Wool Yarn.--
``(1) Importing manufacturers.--For each of the
calendar years 2000, 2001, and 2002, a manufacturer of
worsted wool fabrics who imports wool yarn of the kind
described in heading 5107.10 or 9902.51.13 of the
Harmonized Tariff Schedule of the United States shall
be eligible for a payment equal to an amount determined
pursuant to subsection (d)(2).
``(2) Nonimporting manufacturers.--For each of the
calendar years 2001 and 2002, any other manufacturer of
worsted wool fabrics of imported wool yarn of the kind
described in heading 5107.10 or 9902.51.13 of the
Harmonized Tariff Schedule of the United States shall
be eligible for a payment equal to an amount determined
pursuant to subsection (d)(2).''.
(C) Subsection (c) is amended to read as
follows:
``(c) Wool Fiber and Wool Top.--
``(1) Importing manufacturers.--For each of the
calendar years 2000, 2001, and 2002, a manufacturer of
wool yarn or wool fabric who imports wool fiber or wool
top of the kind described in heading 5101.11, 5101.19,
5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 5104.00,
5105.21, 5105.29, or 9902.51.14 of the Harmonized
Tariff Schedule of the United States shall be eligible
for a payment equal to an amount determined pursuant to
subsection (d)(3).
``(2) Nonimporting manufacturers.--For each of the
calendar years 2001 and 2002, any other manufacturer of
wool yarn or wool fabric of imported wool fiber or wool
top of the kind described in heading 5101.11, 5101.19,
5101.21, 5101.29, 5101.30, 5103.10, 5103.20, 5104.00,
5105.21, 5105.29, or 9902.51.14 of the Harmonized
Tariff Schedule of the United States shall be eligible
for a payment equal to an amount determined pursuant to
subsection (d)(3).''.
(D) Section 505 is further amended by
striking subsection (d) and inserting the
following new subsections:
``(d) Amount of Annual Payments to Manufacturers.--
``(1) Manufacturers of men's suits, etc. of
imported worsted wool fabrics.--
``(A) Eligible to receive more than
$5,000.--Each annual payment to manufacturers
described in subsection (a) who, according to
the records of the Customs Service as of
September 11, 2001, are eligible to receive
more than $5,000 for each of the calendar years
2000, 2001, and 2002, shall be in an amount
equal to one-third of the amount determined by
multiplying $30,124,000 by a fraction--
``(i) the numerator of which is the
amount attributable to the duties paid
on eligible wool products imported in
calendar year 1999 by the manufacturer
making the claim, and
``(ii) the denominator of which is
the total amount attributable to the
duties paid on eligible wool products
imported in calendar year 1999 by all
the manufacturers described in
subsection (a) who, according to the
records of the Customs Service as of
September 11, 2001, are eligible to
receive more than $5,000 for each such
calendar year under this section as it
was in effect on that date.
``(B) Eligible wool products.--For purposes
of subparagraph (A), the term `eligible wool
products' refers to imported worsted wool
fabrics described in subsection (a).
``(C) Others.--All manufacturers described
in subsection (a), other than the manufacturers
to which subparagraph (A) applies, shall each
receive an annual payment in an amount equal to
one-third of the amount determined by dividing
$1,665,000 by the number of all such other
manufacturers.
``(2) Manufacturers of worsted wool fabrics of
imported wool yarn.--
``(A) Importing manufacturers.--Each annual
payment to an importing manufacturer described
in subsection (b)(1) shall be in an amount
equal to one-third of the amount determined by
multiplying $2,202,000 by a fraction--
``(i) the numerator of which is the
amount attributable to the duties paid
on eligible wool products imported in
calendar year 1999 by the importing
manufacturer making the claim, and
``(ii) the denominator of which is
the total amount attributable to the
duties paid on eligible wool products
imported in calendar year 1999 by all
the importing manufacturers described
in subsection (b)(1).
``(B) Eligible wool products.--For purposes
of subparagraph (A), the term `eligible wool
products' refers to imported wool yarn
described in subsection (b)(1).
``(C) Nonimporting manufacturers.--Each
annual payment to a nonimporting manufacturer
described in subsection (b)(2) shall be in an
amount equal to one-half of the amount
determined by multiplying $141,000 by a
fraction--
``(i) the numerator of which is the
amount attributable to the purchases of
imported eligible wool products in
calendar year 1999 by the nonimporting
manufacturer making the claim, and
``(ii) the denominator of which is
the total amount attributable to the
purchases of imported eligible wool
products in calendar year 1999 by all
the nonimporting manufacturers
described in subsection (b)(2).
``(3) Manufacturers of wool yarn or wool fabric of
imported wool fiber or wool top.--
``(A) Importing manufacturers.--Each annual
payment to an importing manufacturer described
in subsection (c)(1) shall be in an amount
equal to one-third of the amount determined by
multiplying $1,522,000 by a fraction--
``(i) the numerator of which is the
amount attributable to the duties paid
on eligible wool products imported in
calendar year 1999 by the importing
manufacturer making the claim, and
``(ii) the denominator of which is
the total amount attributable to the
duties paid on eligible wool products
imported in calendar year 1999 by all
the importing manufacturers described
in subsection (c)(1).
``(B) Eligible wool products.--For purposes
of subparagraph (A), the term `eligible wool
products' refers to imported wool fiber or wool
top described in subsection (c)(1).
``(C) Nonimporting manufacturers.--Each
annual payment to a nonimporting manufacturer
described in subsection (c)(2) shall be in an
amount equal to one-half of the amount
determined by multiplying $597,000 by a
fraction--
``(i) the numerator of which is the
amount attributable to the purchases of
imported eligible wool products in
calendar year 1999 by the nonimporting
manufacturer making the claim, and
``(ii) the denominator of which is
the amount attributable to the
purchases of imported eligible wool
products in calendar year 1999 by all
the nonimporting manufacturers
described in subsection (c)(2).
``(4) Letters of intent.--Except for the
nonimporting manufacturers described in subsections
(b)(2) and (c)(2) who may make claims under this
section by virtue of the enactment of the Wool
Manufacturer Payment Clarification and Technical
Corrections Act, only manufacturers who, according to
therecords of the Customs Service, filed with the
Customs Service before September 11, 2001, letters of intent to
establish eligibility to be claimants are eligible to make a claim for
a payment under this section.
``(5) Amount attributable to purchases by
nonimporting manufacturers.--
``(A) Amount attributable.--For purposes of
paragraphs (2)(C) and (3)(C), the amount
attributable to the purchases of imported
eligible wool products in calendar year 1999 by
a nonimporting manufacturer shall be the amount
the nonimporting manufacturer paid for eligible
wool products in calendar year 1999, as
evidenced by invoices. The nonimporting
manufacturer shall make such calculation and
submit the resulting amount to the Customs
Service, within 45 days after the date of
enactment of the Wool Manufacturer Payment
Clarification and Technical Corrections Act, in
a signed affidavit that attests that the
information contained therein is true and
accurate to the best of the affiant's belief
and knowledge. The nonimporting manufacturer
shall retain the records upon which the
calculation is based for a period of five years
beginning on the date the affidavit is
submitted to the Customs Service.
``(B) Eligible wool product.--For purposes
of subparagraph (A)--
``(i) the eligible wool product for
nonimporting manufacturers of worsted
wool fabrics is wool yarn of the kind
described in heading 5107.10 or
9902.51.13 of the Harmonized Tariff
Schedule of the United States purchased
in calendar year 1999; and
``(ii) the eligible wool products
for nonimporting manufacturers of wool
yarn or wool fabric are wool fiber or
wool top of the kind described in
heading 5101.11, 5101.19, 5101.21,
5101.29, 5101.30, 5103.10, 5103.20,
5104.00, 5105.21, 5105.29, or
9902.51.14 of such Schedule purchased
in calendar year 1999.
``(6) Amount attributable to duties paid.--For
purposes of paragraphs (1), (2)(A), and (3)(A), the
amount attributable to the duties paid by a
manufacturer shall be the amount shown on the records
of the Customs Service as of September 11, 2001, under
this section as then in effect.
``(7) Schedule of payments; reallocations.--
``(A) Schedule.--Of the payments described
in paragraphs (1), (2)(A), and (3)(A), the
Customs Service shall make the first and second
installments on or before the date that is 45
days after the date of enactment of the Wool
Manufacturer Payment Clarification and
Technical Corrections Act, and the third
installment on or before April 15, 2003. Of the
payments described in paragraphs (2)(C) and
(3)(C), the Customs Service shall make the
first installment on or before the date that is
120 days after the date of enactment of the
Wool Manufacturer Payment Clarification and
Technical Corrections Act, and the second
installment on or before April 15, 2003.
``(B) Reallocations.--In the event that a
manufacturer that would have received payment
under subparagraph (A) or (C) of paragraph (1),
(2), or (3) ceases to be qualified for such
payment as such a manufacturer, the amounts
otherwise payable to the remaining
manufacturers under such subparagraph shall be
increased on a pro rata basis by the amount of
the payment such manufacturer would have
received.
``(8) Reference.--For purposes of paragraphs (1)(A)
and (6), the `records of the Customs Service as of
September 11, 2001' are the records of the Wool Duty
Unit of the Customs Service on September 11, 2001, as
adjusted by the Customs Service to the extent necessary
to carry out this section. The amounts so adjusted are
not subject to administrative or judicial review.
``(e) Affidavits by Manufacturers.--
``(1) Affidavit required.--A manufacturer may not
receive a payment under this section for calendar year
2000, 2001, or 2002, as the case may be, unless that
manufacturer has submitted to the Customs Service for
that calendar year a signed affidavit that attests
that, during that calendar year, the affiant was a
manufacturer in the United States described in
subsection (a), (b), or (c).
``(2) Timing.--An affidavit under paragraph (1)
shall be valid--
``(A) in the case of a manufacturer
described in paragraph (1), (2)(A), or (3)(A)
of subsection (d) filing a claim for a payment
for calendar year 2000 or 2001, or both, only
if the affidavit is postmarked no later than 15
days after the date of enactment of the Wool
Manufacturer Payment Clarification and
Technical Corrections Act; and
``(B) in the case of a claim for a payment
for calendar year 2002, only if the affidavit
is postmarked no later than March 1, 2003.
``(f) Offsets.--Notwithstanding any other provision of this
section, any amount otherwise payable under subsection (d) to a
manufacturer in calendar year 2001 and, where applicable, in
calendar years 2002 and 2003, shall be reduced by the amount of
any payment received by that manufacturer under this section
before the enactment of the Wool Manufacturer Payment
Clarification and Technical Corrections Act.
``(g) Definition.--For purposes of this section, the
manufacturer is the party that owns--
``(1) imported worsted wool fabric, of the kind
described in heading 9902.51.11 or 9902.51.12 of the
Harmonized Tariff Schedule of the United States, at the
time the fabric is cut and sewn in the United States
into men's or boys' suits, suit-type jackets, or
trousers;
``(2) imported wool yarn, of the kind described in
heading 5107.01 or 9902.51.13 of such Schedule, atthe
time the yarn is processed in the United States into worsted wool
fabric; or
``(3) imported wool fiber or wool top, of the kind
described in heading 5101.11, 5101.19, 5101.21,
5101.29, 5101.30, 5103.10, 5103.20, 5104.00, 5105.21,
5105.29, or 9902.51.14 of such Schedule, at the time
the wool fiber or wool top is processed in the United
States into wool yarn.''.
(2) Funding.--There is authorized to be
appropriated and is hereby appropriated, out of amounts
in the General Fund of the Treasury not otherwise
appropriated, $36,251,000 to carry out the amendments
made by paragraph (1).
SEC. 5102. DUTY SUSPENSION ON WOOL.
(a) Extension of Temporary Duty Reductions.--
(1) Heading 9902.51.11.-- Heading 9902.51.11 of the
Harmonized Tariff Schedule of the United States is
amended by striking ``2003'' and inserting ``2005''.
(2) Heading 9902.51.12.-- Heading 9902.51.12 of the
Harmonized Tariff Schedule of the United States is
amended--
(A) by striking ``2003'' and inserting
``2005''; and
(B) by striking ``6%'' and inserting
``Free''.
(3) Heading 9902.51.13.--Heading 9902.51.13 of the
Harmonized Tariff Schedule of the United States is
amended by striking ``2003'' and inserting ``2005''.
(4) Heading 9902.51.14.--Heading 9902.51.14 of the
Harmonized Tariff Schedule of the United States is
amended by striking ``2003'' and inserting ``2005''.
(b) Limitation on Quantity of Imports.--
(1) Note 15.--U.S. Note 15 to subchapter II of
chapter 99 of the Harmonized Tariff Schedule of the
United States is amended--
(A) by striking ``from January 1 to
December 31 of each year, inclusive''; and
(B) by striking ``, or such other'' and
inserting the following: ``in calendar year
2001, 3,500,000 square meter equivalents in
calendar year 2002, and 4,500,000 square meter
equivalents in calendar year 2003 and each
calendar year thereafter, or such greater''.
(2) Note 16.--U.S. Note 16 to subchapter II of
chapter 99 of the Harmonized Tariff Schedule of the
United States is amended--
(A) by striking ``from January 1 to
December 31 of each year, inclusive''; and
(B) by striking ``, or such other'' and
inserting the following: ``in calendar year
2001, 2,500,000 square meter equivalents in
calendar year 2002, and 3,500,000 square meter
equivalents in calendar year 2003 and each
calendar year thereafter, or such greater''.
(c) Extension of Duty Refunds and Wool Research Trust
Fund.--
(1) In general.--The United States Customs Service
shall pay each manufacturer that receives a payment
under section 505 of the Trade and Development Act of
2000 (Public Law 106-200) for calendar year 2002, and
that provides an affidavit that it remains a
manufacturer in the United States as of January 1 of
the year of the payment, 2 additional payments, each
payment equal to the payment received for calendar year
2002 as follows:
(A) The first payment to be made after
January 1, 2004, but on or before April 15,
2004.
(B) The second payment to be made after
January 1, 2005, but on or before April 15,
2005.
(2) Conforming amendment.--Section 506(f) of the
Trade and Development Act of 2000 (Public Law 106-200)
is amended by striking ``2004'' and inserting ``2006''.
(3) Authorization.--There is authorized to be
appropriated and is hereby appropriated out of amounts
in the general fund of the Treasury not otherwise
appropriated such sums as are necessary to carry out
the provisions of this subsection.
(d) Effective Date.--The amendment made by subsection
(a)(2)(B) applies to goods entered, or withdrawn from warehouse
for consumption, on or after January 1, 2002.
Subtitle B--Other Provisions
SEC. 5201. FUND FOR WTO DISPUTE SETTLEMENTS.
(a) Establishment of Fund.--There is established in the
Treasury a fund for the payment of settlements under this
section.
(b) Authority of USTR to Pay Settlements.--Amounts in the
fund established under subsection (a) shall be available, as
provided in appropriations Acts, only for the payment by the
United States Trade Representative of the amount of the total
or partial settlement of any dispute pursuant to proceedings
under the auspices of the World Trade Organization, if--
(1) in the case of a total or partial settlement in
an amount of not more than $10,000,000, the Trade
Representative certifies to the Secretary of the
Treasury that the settlement is in the best interests
of the United States; and
(2) in the case of a total or partial settlement in
an amount of more than $10,000,000, the Trade
Representative certifies to the Congress that the
settlement is in the best interests of the United
States.
(c) Appropriations.--There are authorized to be
appropriated to the fund established under subsection (a)--
(1) $50,000,000; and
(2) amounts equivalent to amounts recovered by the
United States pursuant to the settlement of disputes
pursuant to proceedings under the auspices of the World
Trade Organization.
Amounts appropriated to the fund are authorized to remain
available until expended.
(d) Management of Fund.--Sections 9601 and 9602(b) of the
Internal Revenue Code of 1986 shall apply to the fund
established under subsection (a) to the same extent as such
provisions apply to trust funds established under subchapter A
of chapter 98 of such Code.
SEC. 5202. CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN
NUCLEAR FACILITIES.
(a) In General.--Subheading 9902.84.02 of the Harmonized
Tariff Schedule of the United States is amended--
(1) by striking ``4.9%'' and inserting ``Free'';
and
(2) by striking ``12/31/2003'' and inserting ``12/
31/2006''.
(b) Effective Date.--
(1) In general.--The amendments made by subsection
(a) shall apply to goods entered, or withdrawn from
warehouse for consumption, on or after January 1, 2002.
(2) Retroactive application.--Notwithstanding
section 514 of the Tariff Act of 1930 or any other
provision of law, and subject to paragraph (4), the
entry of any article--
(A) that was made on or after January 1,
2002, and
(B) to which duty-free treatment would have
applied if the amendment made by this section
had been in effect on the date of such entry,
shall be liquidated or reliquidated as if such duty-
free treatment applied, and the Secretary of the
Treasury shall refund any duty paid with respect to
such entry.
(3) Entry.--As used in this subsection, the term
``entry'' includes a withdrawal from warehouse for
consumption.
(4) Requests.--Liquidation or reliquidation may be
made under paragraph (2) with respect to an entry only
if a request therefor is filed with the Customs
Service, within 180 days after the date of the
enactment of this Act, that contains sufficient
information to enable the Customs Service--
(A) to locate the entry; or
(B) to reconstruct the entry if it cannot
be located.
SEC. 5203. SUGAR TARIFF-RATE QUOTA CIRCUMVENTION.
(a) In General.--Chapter 17 of the Harmonized Tariff
Schedule of the United States is amended in the superior text
to subheading 1702.90.05 by striking ``Containing'' and all
that follows through ``solids:'' and inserting the following:
``Containing soluble non-sugar solids (excluding any
foreign substances, including but not limited to
molasses, that may have been added to or developed in
the product) equal to 6 percent or less by weight of
the total soluble solids:''.
(b) Monitoring for Circumvention.--The Secretary of
Agriculture and the Commissioner of Customs shall continuously
monitor imports of sugar and sugar-containing products provided
for in chapters 17, 18, 19, and 21 of the Harmonized Tariff
Schedule of the United States, other than molasses imported for
use in animal feed or the production of rum and articles
prepared for marketing to the ultimate consumer in the form and
package in which imported, for indications that an article is
being used to circumvent a tariff-rate quota provided for in
those chapters. The Secretary and Commissioner shall
specifically examine imports of articles provided for in
subheading 1703.10.30 of the Harmonized Tariff Schedule of the
United States.
(c) Reports and Recommendations.--The Secretary and the
Commissioner shall report their findings to Congress and the
President not later than 180 days after the date of enactment
of this Act and every 6 months thereafter. The reports shall
include data and a description of developments and trends in
the composition of trade of articles provided for in the
chapters of the Harmonized Tariff Schedule of the United States
identified in subsection (b) and any indications of
circumvention that may exist. The reports shall also include
recommendations for ending such circumvention, including
recommendations for legislation.
And the Senate agree to the same.
From the Committee on Ways and Means, for
consideration of the House amendment and the
Senate amendment, and modifications committed
to conference:
William Thomas,
Phillip M. Crane,
From the Committee on Education and the
Workforce, for consideration of sec. 603 of the
Senate amendment, and modifications committed
to conference:
John Boehner,
Sam Johnson,
From the Committee on Energy and Commerce, for
consideration of sec. 603 of the Senate
amendment, and modifications committed to
conference:
Billy Tauzin,
Michael Bilirakis,
From the Committee on Government Reform, for
consideration of sec. 344 of the House
amendment, and sec. 1143 of the Senate
amendment, and modifications committed to
conference:
Dan Burton,
Bob Barr,
From the Committee on the Judiciary, for
consideration of secs. 111, 601, and 701 of the
Senate amendment, and modifications committed
to conference:
F. James Sensenbrenner,
Howard Coble,
From the Committee on Rules, for consideration
of secs. 2103, 2105, and 2106 of the House
amendment and secs. 2103, 2105, and 2106 of the
Senate amendment, and modifications committed
to conference:
David Dreier,
John Linder,
Managers on the Part of the House.
Max Baucus,
John Breaux,
Chuck Grassley,
Orrin Hatch,
Managers on the Part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at
the conference on the disagreeing votes of the two Houses on
the amendment of the Senate to the bill (H.R. 3009), to extend
the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes, submit the
following joint statement to the House and the Senate in
explanation of the effect of the action agreed upon by the
managers and recommended in the accompanying conference report:
The Senate amendment struck all of the House bill after
the enacting clause and inserted a substitute text.
The House recedes from its disagreement to the amendment
of the Senate with an amendment that is a substitute for the
House bill and the Senate amendment. The differences between
the House bill, the Senate amendment, and the substitute agreed
to in conference are noted below, except for clerical
corrections, conforming changes made necessary by agreements
reached by the conferees, and minor drafting and clerical
changes.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
SEC. 101--SHORT TITLE
Present law
No provision.
House amendment
Section 101 of H.R. 3009 provides that Division A of the
Act may be cited as the ``Trade Adjustment Assistance Reform
Act of 2002.''
Senate amendment
Section 101 of H.R. 3009 provides that Division A of the
Act may be cited as the ``Trade Adjustment Assistance Reform
Act of 2002.''
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance for Workers
SEC. 111--REAUTHORIZATION OF THE TRADE ADJUSTMENT ASSISTANCE PROGRAM
Present law
Current section 245 authorizes to be appropriated to the
Department of Labor such sums as may be necessary to carry out
the purposes of the TAA and NAFTA-TAA for workers programs for
the period October 1, 1998 through September 30, 2001. Current
section 285 provides for termination of all Trade Adjustment
Assistance programs on September 30, 2001, but provides that
workers, and firms eligible to receive benefits on or before
that date shall continue to be eligible to receive such
benefits as though the programs were in effect.
House amendment
The House Amendment reauthorized the Trade Adjustment
Assistance programs through September 30, 2004.
Senate amendment
Section 111 of the Senate bill creates a new section 248
of the Trade Act of 1974 which authorizes to be appropriated to
the Department of Labor such sums as may be necessary to carry
out the purposes of the Trade Adjustment Assistance for workers
program for the period October 1, 2001, through September 30,
2007. Section 701 of the Senate bill amends current section 285
to provide for termination of all Trade Adjustment Assistance
programs on September 30, 2007, but provides that workers, and
firms, communities, farmers, and fishermen eligible to receive
benefits on or before that date shall continue to be eligible
to receive such benefits as though the programs were in effect.
Conference agreement
Conferees agree to extend the authorization of the Trade
Adjustment Assistance programs through September 30, 2007, and
to consolidate the NAFTA-TAA program with the regular TAA
program.
SEC. 112--FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE
ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY SECRETARY OF LABOR
Present law
Current sections 221 and 250 set forth requirements
concerning who may file a petition for certification of
eligibility to apply for TAA and NAFTA-TAA assistance,
respectively. Under both programs, petitions may be filed by a
group of workers or by their certified or recognized union or
other duly authorized representative. TAA petitions are filed
with the Secretary of Labor. NAFTA-TAA petitions are filed with
the Governor of the relevant State and forwarded by him to the
Secretary of Labor. Under section 223, the Secretary of Labor
must rule on eligibility within 60 days after a TAA petition is
filed. Under section 250, the Governor must make a preliminary
eligibility determination within 10 days after a NAFTA-TAA
petition is filed, and the Secretary of Labor must make a final
eligibility determination within the next 30 days. Section 221
also sets forth notice and hearing obligations of the Secretary
of Labor upon receipt of a TAA petition. Section 250 provides
that, in the event of preliminary certification of eligibility
to apply for NAFTA-TAA benefits, the Governor immediately
provide the affected workers with certain rapid response
services.
House amendment
The House Amendment provided for a shortened period for
the Secretary of Labor to consider petitions from 60 days to 40
days and for other rapid response assistance toworkers.
Senate amendment
Section 111 of the Senate bill creates a new section 231
of the Trade Act of 1974, which consolidates the TAA and NAFTA-
TAA programs by establishing a single program with a single set
of group eligibility criteria and a single set of procedures
and standards for filing and reviewing petitions, certifying
eligibility, and terminating certifications of eligibility.
Section 231 expands the list of entities that may file a
petition for group certification of eligibility to include
employers, one-stop operators or one-stop partners, State
employment agencies, and any entity to which notice of a plant
closing or mass layoff must be given under section 3 of the
Worker Adjustment and Retaining Notification Act. Section 231
also provides that the President, or the Committee on Finance
of the Senate or the Committee on Ways and Means of the House
of Representatives (by resolution), may direct the Secretary of
Labor to initiate a certification process under this chapter to
determine the eligibility for Trade Adjustment Assistance of a
group of workers.
Section 231 creates a single process for filing and
reviewing petitions for Trade Adjustment Assistance for
workers, under which all petitions are filed with both the
Secretary of Labor and the Governor of the State. Upon filing
of the petition, the Governor is required to fulfill the
requirements of any agreement entered into with the Department
of Labor under section 222, to provide certain rapid response
services, and to notify workers on whose behalf a petition has
been filed of their potential eligibility for certain existing
federal health care, child care, transportation, and other
assistance programs. Upon filing the petition, the Secretary of
Labor must make his certification determination within 40 days
and provide the notice required.
Conference agreement
The Senate recedes to the House with a change providing
for simultaneous filing of petitions with the Secretary of
Labor and State Governor.
SEC. 113--GROUP ELIGIBILITY REQUIREMENTS
Present law
Current law sections 222 and 250 of Title II of the Trade
Act of 1974 set forth group eligibility criteria. Under TAA,
the Secretary must certify a group of workers as eligible to
apply for Trade Adjustment Assistance if he determines (1) that
a significant number or proportion of the workers in such
workers' firm have become or are threatened to become totally
or partially separated; (2) sales or production of such firm
have decreased absolutely; and (3) imports of articles like or
directly competitive with articles produced by such workers'
firm contributed importantly to the total or partial separation
or threat thereof, and to the decline in sales or production.
Under NAFTA-TAA, group eligibility may be based on the same
criteria set forth in section 222, but section 250 also
provides for NAFTA-TAA eligibility where there has been a shift
in production by the workers' firm to Mexico or Canada of
articles like or directly competitive with articles which are
produced by the firm. Section 222 also includes special
eligibility provisions with respect to oil and natural gas
producers.
House amendment
The House Amendment at Section 113 expanded the Trade
Adjustment Assistance programs to secondary workers that are
suppliers to firms that were certified and which satisfied
certain conditions.
Senate amendment
Section 111 of the Senate Amendment creates a new section
231 under which the eligibility criteria are revised. First,
workers are eligible for TAA if the value or volume of imports
of articles like or directly competitive with articles produced
by that firm have increased and the increase in the value or
volume of imports contributed importantly to the workers'
separation or threat of separation. Second, eligibility is
extended to workers who are separated due to shifts in
production to any country, rather than only when the shift in
production is to Mexico or Canada. Third, eligibility is
extended to adversely affected secondary workers. Eligible
secondary workers include workers in supplier firms and, with
respect to trade with NAFTA countries, downstream firms.
Fourth, a new special eligibility provision is added with
respect to taconite pellets.
Conference agreement
The Conferees agree to extend coverage of Trade
Adjustment Assistance to new categories of workers: (1)
secondary workers that supply directly to another firm
component parts for articles that were the basis for a
certification of eligibility, (2) downstream workers that were
affected by trade with Mexico or Canada, and (3) certain
workers that have been laid off because their firm has shifted
its production to another country that has a free trade
agreement with the United States, that has a unilaterally
preferential trading arrangement with the United States, or
when there has been or is likely to be an increase in imports
of the relevant articles.
SEC. 114--QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT ALLOWANCES
Present law
Current section 231 establishes qualifying requirements
that must be met in orderfor an individual worker within a
certified group to receive Trade Adjustment Assistance. In order to
receive trade readjustment allowances, a certified worker must have
been separated on or after the eligibility date established in the
certification but within 2 years of the date of the certification
determination; been employed for at least 26 of the 52 weeks preceding
the separation at wages of $30 or more a week; be eligible for and have
exhausted unemployment insurance benefits; not be disqualified for
extended compensation payable under the Federal-State Extended
Unemployment Compensation Act of 1970 by reason of the work acceptance
and job search requirements in section 202(a)(3) of that Act; and be
enrolled in a training program approved by the Secretary of Labor or
have received a training waiver.
House amendment
The House Amendment at Section 114 provided for
requirements and deadlines for workers to enroll in training.
Senate amendment
Section 111 of the Senate Amendment adds a new section
235 which maintains the individual eligibility requirements in
current law, with the exception of revisions to provisions
governing bases for granting training waivers.
Conference agreement
The Senate recedes to the House, with a change to adopt a
training enrollment deadline of 16 weeks after separation.
SEC. 115--WAIVERS OF TRAINING REQUIREMENTS
Present law
Section 231 sets forth permissible bases for granting a
training waiver. Pursuant to section 250(d), training waivers
are not available in the NAFTA-TAA program.
House amendment
The House Amendment provides that all workers who are
eligible to apply for Trade Adjustment Assistance may be
considered for training waivers and codifies several bases on
which the Secretary may grant a waiver.
Senate amendment
Section 111 of the Senate Amendment adds a new section
235 which provides that all workers who are eligible to apply
for Trade Adjustment Assistance may be considered for training
waivers and codifies several bases on which the Secretary may
grant a waiver.
Conference agreement
The House receded to the Senate with a change to delete
the Senate provision giving the Secretary discretion to grant
waivers for ``other'' reasons.
SEC. 116--AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES
Present law
Current section 233 provides that each certified worker
may receive trade readjustment allowances for a maximum of 52
weeks. Current law also provides that, in most circumstances, a
worker is treated as participating in training during any week
which is part of a break in training that does not exceed 14
days.
House amendment
Section 116 of the House Amendment would add 26 weeks of
trade adjustment allowances for those workers who were in
training and required the extension of benefits for the purpose
of completing training.
Senate amendment
Section 111 of the Senate Amendment adds a new section
237 which increases the maximum time period during which a
worker may receive trade adjustment allowances to 78 weeks,
extends the permissible duration of a break in training to 30
days, and provides for an additional 26 weeks of income support
for workers requiring remedial education. Section 237 also
clarifies that the requirement that a worker exhaust
unemployment insurance benefits prior to receiving trade
adjustment allowances does not apply to any extension of
unemployment insurance by a State using its own funds that
extends beyond either the 26 week period mandated by Federal
law or any additional period provided for under the Federal-
State Extended Unemployment Compensation Act of 1970 (26 U.S.C.
3304 note).
Conference agreement
The Senate recedes to the House.
SEC. 117--ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING
Present law
Current section 236 establishes the terms and conditions
under which training isavailable to eligible workers; permits
the Secretary of Labor to approve certain specified types of training
programs and to pay the costs of approved training and certain
supplemental costs, including subsistence and transportation costs, for
eligible workers; and caps total annual funding for training under the
TAA for workers program at $80 million. Section 250 separately caps
training expenditures under the NAFTA-TAA program at $30 million
annually.
House amendment
The House provided $30 million additional funds for the
Trade Adjustment Assistance program. Combined with NAFTA Trade
Adjustment Assistance, the total training funds available were
$140 million.
Senate amendment
Section 111 of the Senate Amendment adds a new section
240 which sets the total funds available for training
expenditures under the unified TAA for workers program to $300
million annually.
Conference agreement
Conferees agreed to a combined training cap of $220
million for Trade Adjustment Assistance training.
SEC. 118--PROVISION OF EMPLOYER-BASED TRAINING
Present law
No applicable section.
House amendment
The House Amendment included provisions related to
employer based training including on-the-job training and
customized training with partial reimbursements provided to the
employer.
Senate amendment
Section 111 of the Senate Amendment adds a new section
240 which revises the list of training programs which the
Secretary may approve to include customized training. It also
adds a new section 237, which clarifies that the prohibition on
payment of trade adjustment allowances to a worker receiving
on-the-job training does not apply to a worker enrolled in a
non-paid customized training program.
Conference agreement
The Senate recedes to the House.
SEC. 119--COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF
1998
Present law
No provision.
House amendment
The House Amendment provided multiple provisions related
to coordinating efforts under the Trade Adjustment Assistance
programs to provide information and benefits to workers under
the Workforce Investment Act.
Senate amendment
No provision.
Conference agreement
Conferees agreed to drop House language with the
exception of a provision related to coordinating the delivery
of Trade Adjustment Assistance benefits and information at one-
stop delivery systems under the Workforce Investment Act.
SEC. 120--EXPENDITURE PERIOD
Present law
No provision.
House amendment
The House amendment provided that certain funds obligated
for any fiscal year to carry out activities may be expended by
each State in the succeeding two fiscal years.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 121--JOB SEARCH ALLOWANCES
Present law
Under current section 237, when the Secretary of Labor
determines that local employment is not available, an adversely
affected worker certified eligible for TAA benefits may receive
reimbursement of 90 percent of the cost of necessary job search
expenses up to $800.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section
241 which raises the maximum reimbursement for job search
expenses to $1,250 per worker.
Conference agreement
The House recedes to the Senate.
SEC. 122--RELOCATION ALLOWANCES
Present law
Under current section 238, when the Secretary of Labor
determines that local employment is not available, an adversely
affected worker certified eligible for TAA benefits may receive
a relocation allowance consisting of (1) 90 percent of the
reasonable and necessary expenses incurred in transporting a
worker and his family, if any, and household effects, and (2) a
lump sum equivalent to three times the worker's average weekly
wage, up to a maximum payment of $800.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section
242 which raises the maximum lump sum portion of the relocation
allowance to $1,250.
Conference agreement
The House recedes to the Senate.
SEC. 123--REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM
Present law
Current law authorizes a Trade Adjustment Assistance
Program for workers affected by NAFTA trade.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section
231 which combines the TAA and NAFTA-TAA programs, establishing
a single program with a single set of group eligibility
criteria and a single set of procedures and standards for
filing and reviewing petitions, certifying eligibility, and
terminating certification of eligibility.
Conference agreement
The House recedes to the Senate to the extent of
repealing the NAFTA Trade Adjustment Assistance program and
creating a single, unified TAA program for workers.
SEC. 124--DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT
ASSISTANCE FOR OLDER WORKERS
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section
243 which directs the Secretary of Labor, within one year of
enactment, to establish a two-year wage insurance pilot program
under which a State uses the funds provided to the State for
Trade Adjustment allowances to pay to an adversely affected
worker certified under section 231, for a period not to exceed
two years, a wage subsidy of up to 50 percent of the difference
between the wages received by the adversely affected worker
from reemployment and the wages received by the adversely
affected worker at the time of separation. An adversely
affected worker may be eligible to receive a wage subsidy if
the worker obtains reemployment not more than 26 weeks after
the date of separation from the adversely affected employment,
is at least 50 years of age, earns not more than $50,000 a year
in wages from reemployment, is employed at least 30 hours a
week in the reemployment, and does not return to the employment
from which the worker was separated. The wage subsidy available
to workers in the wage insurance program is 50 percent of the
difference between the amount of the wages received by the
worker from reemployment and the amount of the wages received
by the worker at the time of separation, if the wages the
worker receives from reemployment are less than $40,000 a year.
The wage subsidy is 25 percent if the wages received by the
worker from reemployment are greater than $40,000 a year but
not more than $50,000 a year. Total payments made to an
adversely affected worker under the wage insurance program may
not exceed $5,000 in each year of the 2-year period. A worker
participating in the wage insurance program is not eligible to
receive any other Trade Adjustment Assistance benefits, unless
the Secretary of Labor determines that the worker has shown
circumstances that warrant eligibility for training benefits
under section 240.
Conference agreement
The Conferees agree to create a new alternative Trade
Adjustment Assistance program for older workers.
SEC. 125--DECLARATIONS OF POLICY; SENSE OF CONGRESS
Present law
No provision.
House amendment
The House passed amendment included a declaration of
policy and Sense of the Congress related to the responsibility
of the Secretary of Labor to provide information to workers
related to benefits available to them under the TAA and other
federal programs.
Senate amendment
Although certain supportive services are available to
dislocated workers under WIA, current law makes no express
linkage between these services and Trade Adjustment Assistance
and TAA certified workers may not be able to access them.
Section 111 of the Senate Amendment adds a new section 243
which provides that States may apply for and the Secretary of
Labor may make available to adversely affected workers
certified under the Trade Adjustment Assistance program
supportive services available under WIA, including
transportation, child care, and dependent care, that are
necessary to enable a worker to participate in or complete
training. Section 243 requires the Comptroller General to
conduct a study of all assistance provided by the Federal
Government for workers facing job loss and economic distress;
to submit a report to the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives on the study within one year of enactment of
this Act; and to distribute the report to all WIA one-stop
partners. Section 243 further provides that each State may
conduct a study of its assistance programs for workers facing
job loss and economic distress. Each State is eligible for a
grant from the Secretary of Labor, not to exceed $50,000, to
enable it to conduct the study. In the event that a grant is
awarded, the State must, within one year of receiving the
grant, provide its report to the Committee on Finance and the
Committee on Ways and Means and distribute its report to one-
stop partners in the State.
Conference agreement
The Senate recedes to the House.
Subtitle B--Trade Adjustment Assistance for Firms
SEC. 131--REAUTHORIZATION OF TRADE ADJUSTMENT FOR FIRMS PROGRAM
Present law
The Trade Adjustment Assistance for Firms program
provides technical assistance to qualifying firms. Current
Title II, Chapter 3, section 251 of the Trade Act of 1974
provides that a firm is eligible to receive Trade Adjustment
Assistance under this program if (1) a significant number or
proportion of its workers have become or are threatened to
become totally or partially separated; (2) sales or production,
or both, have decreased absolutely; and (3) increases of
imports of articles like or directly competitive with articles
which are produced by such firms contributed importantly to the
total or partial separations or threat thereof.
The authorization for the Trade Adjustment Assistance for
Firms program expired on September 30, 2001. The TAA for Firms
program is currently subject to annual appropriations and is
funded as part of the budget of the Economic Development
Administration in the Department of Commerce.
House amendment
The House passed amendment included a 2-year
reauthorization for Trade Adjustment Assistance for Firms.
Senate amendment
Section 201 of the Senate Amendment reauthorizes the
Trade Adjustment Assistance for Firms program for fiscal years
2002 through 2007; expands the definition of qualifying firms
to cover shifts in production; and authorizes appropriations to
the Department of Commerce in the amount of $16 million
annually for fiscal years 2002 through 2007 to carry out the
purposes of the Trade Adjustment Assistance for Firms program.
Conference agreement
The House recedes to the Senate on the issue of providing
a $16 million authorization for Trade Adjustment Assistance for
Firms and reauthorizing the program through September 30, 2007.
Subtitle C--Trade Adjustment Assistance for Farmers and Ranchers
SEC. 141--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 401 of the Senate Amendment adds new sections
292-298 of the Trade Act of 1974 which create a Trade
Adjustment Assistance program for farmers and ranchers in the
Department of Agriculture. Under this section, a group of
agricultural commodity producers may petition the Secretary of
Agriculture for Trade Adjustment Assistance. The Secretary must
certify the group as eligible for Trade Adjustment Assistance
for farmers if it is determined that the national average price
in the most recent marketing year for the commodity produced by
the group is less than 80 percent of the national average price
in the preceding 5 marketing years and that increases in
imports of that commodity contributed importantly to the
decline in price.
Conference agreement
The House recedes to the Senate with changes. The
Conferees agree to include limitations on eligibility based
upon adjusted gross income and counter-cyclical payment
limitations set forth in the Food Security Act of 1985.
SEC. 142--CONFORMING AMENDMENTS
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate Amendment makes conforming amendments to the
Trade Act of 1974 concerning the TAA for Farmers program.
Conference agreement
Conferees agree to make conforming amendments to the
Trade Act of 1974.
SEC. 143--TRADE ADJUSTMENT ASSISTANCE FOR FISHERMEN
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 502 of the Senate Amendment adds new sections
299-299(G) which create a Trade Adjustment Assistance program
for fishermen in the Department of Commerce. Under this
program, a group of fishermen may petition the Secretary of
Commerce for Trade Adjustment Assistance. The Secretary must
certify the group as eligible for Trade Adjustment Assistance
for fishermen if it is determined that the national average
price in the most recent marketing year for the fish produced
by the group is less than 80 percent of the national average
price in the proceeding five marketing years and that increases
in imports of that fish contributed importantly to the decline
in price.
Conference agreement
Conferees agree to drop Senate Amendment and authorize a
study by the Department of Labor to investigate applying TAA to
fisherman.
Subtitle D--Effective Date
SEC. 151--EFFECTIVE DATE
Present law
No applicable provision.
House amendment
No provision.
Senate amendment
Section 801 of the Senate Amendment provides that except
as otherwise specified, the amendments to the TAA program shall
be effective 90 days after enactment of the Trade Act of 2002.
The Senate Amendment includes transitional provisions governing
the period between expiration of the prior authorizations of
TAA for workers and firms and the effective date of the
amendments/
Conference agreement
The House recedes to the Senate.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
SEC. 201(A) AND 202--CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE PENSION
BENEFIT GUARANTY CORPORATION; ADVANCE PAYMENT OF CREDIT FOR HEALTH
INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
Present law
Under present law, the tax treatment of health insurance
expenses depends on the individual's circumstances. In general,
employer contributions to an accident or health plan are
excludable from an employee's gross income (sec. 106).
Self-employed individuals are entitled to deduct a
portion of the amount paid for health insurance expenses for
the individual and his or her spouse and dependents. The
percentage of deductible expenses is 70 percent in 2002 and 100
percent in 2003 and thereafter.
Individuals other than self-employed individuals who
purchase their own health insurance and itemize deductions may
deduct their expenses to the extent that their total medical
expenses exceed 7.5 percent of adjusted gross income.
Present law does not provide a tax credit for the
purchase of health insurance.
The health care continuation rules (commonly referred to
as ``COBRA'' rules, after the Consolidated Omnibus Budget
Reconciliation Act of 1985 in which they were enacted) require
that employer-sponsored group health plans of employers with 20
or more employees must offer certain covered employees and
their dependents (``qualified beneficiaries'') the option of
purchasing continued health coverage in the event of loss of
coverage resulting from certain qualifying events. These
qualifying events include: termination or reduction in hours of
employment, death, divorce or legal separation, enrollment in
Medicare, the bankruptcy of the employer, or the end of a
child's dependency under a parent's health plan. In general,
the maximum period of COBRA coverage is 18 months. An employer
is permitted to charge qualified beneficiaries 102 percent of
the applicable premium for COBRA coverage.
Under present law, individuals without access to COBRA
are able to purchase individual policies on a guaranteed issue
basis without exclusion of coverage forpre-existing conditions
if they had 18 months of creditable coverage under an employer
sponsored group health plan, governmental plan, or a church plan. Those
with access to COBRA are required to exhaust their 18 months of COBRA
prior to obtaining a policy on a guaranteed issue basis without
exclusion of coverage for pre-existing conditions.
House amendment
The House bill provides a refundable tax credit for up to
60 percent of the expenses of an eligible individual for
qualified health insurance coverage of the eligible individual
and his or her spouse or dependents. Eligible individuals are
certain TAA eligible workers and PBGC pension beneficiaries. In
the case of TAA eligible workers, no more than 12 months of
coverage would be eligible for the credit. The amount of the
credit would be phased out for taxpayers with modified adjusted
gross income between $20,000 and $40,000 for single taxpayers
($40,000 and $80,000 for married taxpayers filing a joint
return). The credit would be available on an advance basis
pursuant to a program to be established by the Secretary of the
Treasury. Insurance that qualifies for the credit includes
certain COBRA coverage and certain individual market options.
Senate amendment
The Senate amendment provides a refundable credit for 70
percent of qualified health insurance expenses. The credit is
available with respect to certain TAA eligible workers. The
credit is payable on an advance basis pursuant to a program to
be established by the Secretary of the Treasury. Insurance that
qualifies for the credit includes certain COBRA coverage,
certain State-based options, and individual health insurance if
certain requirements are satisfied.
Conference agreement
Refundable health insurance credit: in general
In the case of taxpayers who are eligible individuals,
the conference agreement provides a refundable tax credit for
65 percent of the taxpayer's expenses for qualified health
insurance of the taxpayer and qualifying family members for
each eligible coverage month beginning in the taxable year. The
credit is available only with respect to amounts paid by the
taxpayer.
Qualifying family members are the taxpayer's spouse and
any dependent of the taxpayer with respect to whom the taxpayer
is entitled to claim a dependency exemption.\1\ Any individual
who has other specified coverage is not a qualifying family
member.
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\1\ Present law allows the custodial parent to release the right to
claim the dependency exemption for a child to the noncustodial parent.
In addition, if certain requirements are met, the parents may decide by
ageement that the noncustodial parent is entitled to the dependency
exemption with respect to a child. In such cases, the provision would
treat the child as the dependent of the custodial parent for purposes
of the credit.
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Persons eligible for the credit
Eligibility for the credit is determined on a monthly
basis. In general, an eligible coverage month is any month if,
as of the first day of the month, the taxpayer (1) is an
eligible individual, (2) is covered by qualified health
insurance, (3) does not have other specified coverage, and (4)
is not imprisoned under Federal, State, or local authority. In
the case of a joint return, the eligibility requirements are
met if at least one spouse satisfies the requirements. An
eligible month must begin more than 90 days after the date of
enactment.
An eligible individual is (1) an eligible TAA recipient,
(2) an eligible alternative TAA recipient, and (3) an eligible
PBGC pension recipient.
An individual is an eligible TAA recipient during any
month if the individual (1) is receiving for any day of such
month a trade adjustment allowance \2\ or who would be eligible
to receive such an allowance but for the requirement that the
individual exhaust unemployment benefits before being eligible
to receive an allowance and (2) with respect to such allowance,
is covered under a certification issued under subchapter A or D
of chapter 2 of title II of the Trade Act of 1974. An
individual is treated as an eligible TAA recipient during the
first month that such individual would otherwise cease to be an
eligible TAA recipient.
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\2\ Part I of subchapter B, or subchapter D, of chapter 2 of title
II of the Trade Act of 1974.
---------------------------------------------------------------------------
An individual is an eligible alternative TAA recipient
during any month if the individual (1) is a worker described in
section 246(a)(3)(B) of the Trade Act of 1974 who is
participating in the program established under section
246(a)(1) of such Act, and (2) is receiving a benefit for such
month under section 246(a)(2) of such Act. An individual is
treated as an eligible alternative TAA recipient during the
first month that such individual would otherwise cease to be an
eligible TAA recipient.
An individual is a PBGC pension recipient for any month
if he or she (1) is age 55 or over as of the first day of the
month, and (2) is receiving a benefit any portion of which is
paid by the Pension Benefit Guaranty Corporation (PBGC).
An otherwise eligible taxpayer is not eligible for the
credit for a month if, as of the first day of the month the
individual has other specified coverage. Specified coverage
would be (1) coverage under any insurance which constitutes
medical care (expect for insurance substantially all of the
coverage of which is for excepted benefits) \3\ if at least 50
percent of the cost of the coverage is paid by an employer \4\
(or former employer) of the individual or his or her spouse or
(2) coverage under certain governmental health programs.\5\ A
rule aggregating plans of the same employer applies in
determining whether the employer pays at least 50 percent of
the cost of coverage. A person is not an eligible individual if
he or she may be claimed as a dependent on another person's tax
return. A special rule applies with respect to alternative TAA
recipients.
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\3\ Excepted benefits are: (1) coverage only for accident or
disability income or any combination thereof, (2) coverage issued as a
supplement to liability insurance; (3) liability insurance, including
general liability insurance and automobile liability insurance; (4)
worker's compensation or similar insurance; (5) automobile medical
payment insurance; (6) credit-only insurance; (7) coverage for on-site
medical clinics; (8) other insurance coverage similar to the coverages
in (1)-(7) specified in regulations under which benefits for medical
care are secondary or incidental to other insurance benefits; (9)
limited scope dental or vision benefits; (10) benefits for long-term
care, nursing home care, home health care, community-based care, or any
combination thereof. and (11) other benefits similar to those in (9)
and (10) as specified in regulations. (12) coverage only for a
specified disease or illness; (13) hospital indemnity or other fixed
indemnity insurance; and (14) Medicare supplemental insurance.
\4\ An amount would be considered paid by the employer if it is
excludable from income. Thus. for example, amounts paid for health
coverage on a salary reduction basis under an employer plan are
considered paid by the employer.
\5\ Specifically, an individual would not be eligible for the
credit if, as of the first day of the month, the individual is (1)
entitled to benefits under Medicare Part A, enrolled in Medicare Part
B, or enrolled in Medicaid or SCHIP, (2) enrolled in a health benefits
plan under the Federal Employees Health Benefit Plan, or (3) entitled
to receive benefits under chapter 55 of title 10 of the United States
Code (relating to military personnel). An individual is not considered
to be enrolled in Medicaid solely by reason of receiving immunizations.
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Qualified health insurance
Qualified health insurance eligible for the credit is:
(1) COBRA continuation coverage; (2) State based continuation
coverage provided by the State under a State law that requires
such coverage; (3) coverage offered through a qualified State
high risk pool; (4) coverage under a health insurance program
offered to State employees or a comparable program; (5)
coverage through an arrangement entered into by the State and a
group health plan, an issuer of health insurance coverage, an
administrator, or an employer; (6) coverage offered through a
State arrangement with a private sector health care coverage
purchasing pool; (7) coverage under a State-operated health
plan that does not receive any Federal financial participation;
(8) coverage under a group health plan that is available
through the employment of the eligible individual's spouse; and
(9) coverage under individual health insurance if the eligible
individual was covered under individual health insurance during
the entire 30-day period that ends on the date the individual
became separated from the employment which qualified the
individual for the TAA allowance, the benefit for an eligible
alternative TAA recipient, or a pension benefit from the PBGC,
whichever applies.\6\
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\6\ For this purpose, ``individual health insurance'' means any
insurance which constitutes medical care offered to individuals other
than in connection with a group health plan. Such term does not include
Federal- or State-based health insurance coverage.
---------------------------------------------------------------------------
Qualified health insurance does not include any State-
based coverage (i.e., coverage described in (2)-(8) in the
preceding paragraph), unless the State has elected to have such
coverage treated as qualified health insurance and such
coverage meets certain requirements. Such State coverage must
provide that each qualifying individual is guaranteed
enrollment if the individual pays the premium for enrollment or
provides a qualified health insurance costs eligibility
certificate and pays the remainder of the premium. In addition,
the State-based coverage cannot impose any pre-existing
condition limitation with respect to qualifying individuals.
State-based coverage cannot require a qualifying individual to
pay a premium or contribution that is greater than the premium
or contribution for a similarly situated individual who is not
a qualified individual. Finally, benefits under the State-based
coverage must be the same as (or substantially similar to)
benefits provided to similarly situated individuals who are not
qualified individuals. A qualifying individual is an eligible
individual who seeks to enroll in the State-based coverage and
who has aggregate periods of creditable coverage \7\ of three
months or longer, does not have other specified coverage, and
who is not imprisoned. A qualifying individual also includes
qualified family members of such an eligible individual.
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\7\ Creditable coverage is determined under the Health Care
Portability and Accountability Act (Code sec. 9801 (c)).
---------------------------------------------------------------------------
Qualified health insurance does not include coverage
under a flexible spending or similar arrangement or any
insurance if substantially all of the coverage is of excepted
benefits.
Other rules
Amounts taken into account in determining the credit
could not be taken into account in determining the amount
allowable under the itemized deduction for medical expenses or
the deduction for health insurance expenses of self-employed
individuals. Amounts distributed from a medical savings account
would not be eligible for the credit. The amount of the credit
is reduced by any credit received on an advance basis. Married
taxpayers filing separate returns are eligible for the credit;
however, if both spouses are eligible individuals and the
spouses file a separate return, then the spouse of the taxpayer
is not a qualifying family member.
The Secretary of the Treasury is authorized to prescribe
such regulations and other guidance as may be necessary or
appropriate to carry out the provision.
Advance payment of refundable health insurance credit;
reporting requirements
The conference agreement provides for payment of the
credit on an advance basis (i.e., prior to the filing of the
taxpayer's return) pursuant to a program to be established by
the Secretary of the Treasury no later than August 1, 2003.
Such program is to provide for making payments on behalf of
certified individuals to providers of qualified health
insurance. In order to receive the credit on an advance basis,
a qualified health insurance costs credit eligibility
certificate would have to be in effect for the taxpayer. A
qualified health insurance costs credit eligibility certificate
is a written statement that an individual is an eligible
individual for purposes of the credit, provides such
information as the Secretary of the Treasury may require, and
is provided by the Secretary of Labor or the PBGC (as
appropriate) or such other person or entity designated by the
Secretary.
The conference report permits the disclosure of return
information of certified individuals to providers of health
insurance information to the extent necessary to carry out the
advance payment mechanism.
The conference report provides that any person who
receives payments during a calendar year for qualified health
insurance and claims a reimbursement for an advance credit
amount is to file an information return with respect to each
individual from whom such payments were received or for whom
such a reimbursement is claimed. The return is to be in such
form as the Secretary may prescribe and is to contain the name,
address, and taxpayer identification number of the individual
and any other individual on the same health insurance policy,
the aggregate of the advance credit amounts provided, the
number of months for which advance credit amounts are provided,
and such other information as the Secretary may prescribe. The
conference report requires that similar information be provided
to the individual no later than January 31 of the year
following the year for which the information return is made.
Effective Date
The provision is generally effective with respect to
taxable years beginning after December 31, 2001. The provision
relating to the advance payment mechanism to be developed by
the Secretary would be effective on the date of enactment.
TITLE III--CUSTOMS REAUTHORIZATION
Subtitle A--United States Customs Service
CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL
OPERATIONS
SEC. 301--SHORT TITLE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House provides
that the Act may be cited as, the ``Customs Border Security Act
of 2002.''
Senate amendment
The Senate amendment is identical.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 311--AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS,
COMMERCIAL OPERATIONS, AND AIR AND MARINE INTERDICTION
Present law
The statutory basis for authorization of appropriations
for Customs is section 301 (b)(1) of the Customs Procedural and
Simplification Act of 1978 (19 U.S.C. 2075(b)). That law, as
amended by section 8102 of the Omnibus Budget Reconciliation
Act of 1986 [P.L. 99-509], first outlined separate amounts for
non-commercial and commercial operations for the salaries and
expenses portion of the Customs authorization. Under 19 U.S.C.
2075, Congress has adopted a two-year authorization process to
provide Customs with guidance as it plans its budget, as well
as guidance from the Committee for the appropriation process.
The most recent authorization of appropriations for
Customs (under section 101 of the Customs and Trade Act of 1990
[P.L. 101-382]) provided $118,238,000 for salaries and expenses
and $143,047,000 for air and marine interdiction program for FY
1991, and $1,247,884,000 for salaries and expenses and
$150,199,000 for air and marine interdiction program in FY
1992.
House amendment
This provision authorizes $1,365,456,000 for FY 2003 and
$1,399,592,400 for FY 2004 for noncommercial operations of the
Customs Service. It also authorizes $1,642,602,000 for FY 2003
and $1,683,667,050 for FY 2004 for commercial operations of the
Customs Service. Of the amounts authorized for commercial
operations, $308,000,000 is authorized for the automated
commercial environment computer system for each fiscal year.
The provisions require that the Customs Service provide the
Committee on Ways and Means and the Committee on Finance of the
Senate with a report demonstrating that the computer system is
being built in a cost-effective manner. In addition, the
provisions authorizes $170,829,000 for FY 2003 and $175,099,725
for FY 2004 for air and marine interdiction operations of the
Customs Service. The provision requires submission of out-of-
year budget projections to the Ways and Means and Finance
Committees.
Senate amendment
This provision authorizes $886,513,000 for FY 2003 and
$909,471,000 for FY 2004 for noncommercial operations of the
Customs Service. It also authorizes $1,603,482,000 for FY 2003
and $1,645,009,000 for FY 2004 for commercial operations of the
Customs Service. Of the amounts authorized for commercial
operations, $308,000,000 is authorized for the automated
commercial environment computer system for each fiscal year.
The provisions require that the Customs Service provide the
Committee on Ways and Means and the Committee on Finance of the
Senate with a report demonstrating that the computer system is
being built in a cost-effective manner. In addition, the
provisions authorizes $181,860,000 for FY 2003 and $186,570,000
for FY 2004 for air and marine interdiction operations of the
Customs Service. The provision requires submission of out-of-
year budget projections to the Ways and Means and Finance
Committees.
Conference agreement
The Senate recedes to House.
SEC. 312--ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR
THE UNITED STATES-MEXICO BORDER, UNITED STATES-CANADA BORDER, AND
FLORIDA AND THE GULF COAST SEAPORTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require that $90,244,000 of the FY 2003 appropriations be
available until expended for acquisition and other expenses
associated with implementation and deployment of terrorist and
narcotics detection equipment along the United States-Mexico
border, the United States-Canada border, and Florida and the
Gulf seaports. The equipment would include vehicle and
inspection systems. The provision would require that $9,000,000
of the FY 2004 appropriations be used for maintenance of
equipment described above. This section would also provide the
Commissioner of Customs with flexibility in using these funds
and would allow for the acquisition of new updated technology
not anticipated when this bill was drafted. Nothing in the
language of the bill is intended to prevent the Commissioner of
Customs from dedicating resources to specific ports not
identified in the bill.
The equipment would include vehicle and container
inspection systems, mobile truck x-rays, upgrades to fixed-site
truck x-rays, pallet x-rays, busters, contraband detection
kits, ultrasonic container inspection units, automated
targeting systems, rapid tire deflator systems, portable
Treasury Enforcement Communications Systems terminals, remote
surveillance camera systems, weigh-in-motion sensors, vehicle
counters, spotter camera systems, inbound commercial truck
transponders, narcotics vapor and particle detectors, and
license plate reader automatic targeting software.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 313--COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require Customs to measure specifically the effectiveness of
the resources dedicated in sections 312 as part of its annual
performance plan.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
Subtitle B--Child Cyber-Smuggling Center of the Customs Service
SEC. 321--AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD
PORNOGRAPHY/CHILD SEXUAL EXPLOITATION
Present law
Customs enforcement responsibilities include enforcement
of U.S. laws to prevent border trafficking relating to child
pornography, intellectual property rights violations, money
laundering, and illegal arms. Funding for these activities has
been included in the Customs general account.
House amendment
H.R. 3009 as amended and passed by the House would
authorize $10 million for Customs to carry out its program to
combat on-line child sex predators. Of that amount, $375,000
would be dedicated to the National Center for Missing Children
for the operation of its child pornography cyber tipline.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
CHAPTER 2--MISCELLANEOUS PROVISIONS
SEC. 331--ADDITIONAL CUSTOMS SERVICE OFFICERS FOR U.S.-CANADA BORDER
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House earmarks $25
million and 285 new staff hires for Customs to use at the U.S.-
Canada border.
Senate amendment
The Senate amendment is the same as the House Amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 332--STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE
CUSTOMS SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House requires
Customs to conduct a study of current personnel practices
including: performance standards; the effect and impact of the
collective bargaining process on Customs drug interdiction
efforts; and a comparison of duty rotations policies of Customs
and other federal agencies employing similarly situated
personnel.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 333--STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING
PROCEDURES OF THE CUSTOMS SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require Customs to conduct a study to ensure that appropriate
training is being provided to personnel who are responsible for
financial auditing of importers. Customs would specifically
report on how its audit personnel protect the privacy and trade
secrets of importers.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 334--ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM;
REPORTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
mandate the imposition of a cost accounting system in order for
Customs to effectively explain its expenditures. Such a system
would provide compliance with the core financial system
requirements of the Joint Financial Management Improvement
Program (JFMIP), which is a joint and cooperative undertaking
of the U.S. Department of the Treasury, the General Accounting
Office, the Office of Management and Budget, and the Office of
Personnel Management working in cooperation with each other and
other agencies to improve financial management practices in
government. That Program has statutory authorization in the
Budget and Accounting Procedures Act of 1950 (31 U.S.C. 65).
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 335--STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTIVE
RULINGS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require the Comptroller General to prepare a report to
determine whether Customs has improved its timeliness in
providing prospective rulings.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 336--STUDY AND REPORT RELATING TO CUSTOMS USER FEES
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require the Comptroller General to prepare a confidential
report to determine whether current user fees are appropriately
set at a level commensurate with the service provided for the
fee. The Comptroller General is authorized to recommend the
appropriate level for customs user fees.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 337--FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES
Present law
Current law provides for direct reimbursement by courier
facilities of expenses incurred by Customs conducting
inspections at those facilities.
House amendment
H.R. 3009 as amended and passed by the House would
establish a per item fee of sixty-six cents to cover Customs
expenses. This amount could be lowered to more than thirty-five
cents or raised to no more than $1.00 by the Secretary of the
Treasury after a rulemaking process to reevaluate the expenses
incurred by Customs in providing inspectional services.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 338--NATIONAL CUSTOMS AUTOMATION PROGRAM
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
empower the Secretary to require the electronic submission of
any information required to be submitted to the Customs
Service.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 339--AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS STAFFING
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate Amendment authorizes the appropriation to the
Department of the Treasury such sums as may be necessary to
increase the annual pay of journeyman Customs inspectors and
Canine Enforcement Officers who have completed at least one
year of service and are being paid at a GS-9 level, from GS-9
to GS-11. The Senate provision also authorizes an increase in
pay of support staff.
Conference agreement
The House recedes to the Senate.
CHAPTER 4--ANTITERRORISM PROVISIONS
SEC. 341--IMMUNITY FOR CUSTOMS OFFICERS THAT ACT IN GOOD FAITH
Present law
Currently, Customs officers are entitled to qualified
immunity in civil suits brought by persons, who were searched
upon arrival in the United States. Qualified immunity protects
officers from liability if they can establish that their
actions did not violate any clearly established constitutional
or statutory rights.
House amendment
H.R. 3009 as amended and passed by the House would
protect Customs officers by providing them immunity from
lawsuits stemming from personal searches of people entering the
country so long as the officers conduct the searches in good
faith.
Senate amendment
No provision.
Conference agreement
Senate recedes to the House, but conferees qualify the
provision by adding that the means used to effectuate such
searches must be reasonable. To be covered by this immunity
provision, inspectors must follow Customs Service inspection
rules including the rule against profiling against race,
religions, or ethnic background.
SEC. 342--EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, OR STAFFING
OF THE CUSTOMS SERVICE
Present law
Present law places numerous restrictions on and, in some
instances, precludes the Secretary of the Treasury or Customs
from making any adjustments to ports and staff. 19 U.S.C. 1318
requires a Presidential proclamation of an emergency and
authorization to the Secretary of the Treasury only to extend
the time for performance of legally required acts during an
emergency. No other emergency powers statute for Customs
exists.
House amendment
H.R. 3009 as amended and passed by the House would permit
the Secretary of the Treasury, if the President declares a
national emergency or if necessary to address specific threats
to human life or national interests, to eliminate, consolidate,
or relocate Customs ports and offices and to alter staffing
levels, services rendered and hours of operations at those
locations. In addition, the amendment would permit the
Commissioner of Customs, when necessary to address threats to
human life or national interests, to close temporarily any
Customs office or port or take any other lesser action
necessary to respond to the specific threat. The Secretary or
the Commissioner would be required to notify Congress of any
action taken under this proposal within 72 hours.
Senate amendment
The Senate amendment is the same as the House Amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 343 AND 343A--MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO
AND PASSENGERS; SECURE SYSTEMS OF TRANSPORTATION
Present law
Currently, commercial carriers bringing passengers or
cargo into or out of the country have no obligation to provide
Customs with such information in advance.
House amendment
H.R. 3009 as amended and passed by the House would
require every air, land, or water-based commercial carrier to
file an electronic manifest describing all passengers with
Customs before entering or leaving the country. There is a
similar requirement for cargo entering the country. Specific
information required in the advanced manifest system would be
developed by Treasury in regulations.
Senate amendment
The Senate Amendment is similar to the House Amendment.
However, with respect to cargo, the Senate Amendment applies to
out-bound as well as in-bound shipments.
Conference agreement
The conferees agree to direct the Secretary of the
Treasury to promulgate regulations pertaining to the electronic
transmission to the Customs Service of information relevant to
aviation, maritime, and surface transportation safety and
security prior to a cargo carrier's arrival in or departure
from the United States. The agreement sets forth parameters for
the Secretary to follow in developing these regulations. For
example, the parameters require that the regulations be
flexible with respect to the commercial and operational aspects
of different modes of transportation. They also require that,
in general, the Customs Service seek information from parties
most likely to have direct knowledge of the information at
issue. The conferees also agree to amendment of the Tariff Act
of 1930 to establish requirements concerning proper
documentation of ocean-bound cargo prior to a vessel's
departure. Finally, the conferees agree to direct the Secretary
of the Treasury to establish a task force to evaluate,
prototype and certify secure systems of transportation.
SEC. 344--BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND
MAIL
Present law
Although Customs currently searches all inbound mail, and
although it searches outbound mail sent via private carriers,
outbound mail carried by the Postal Service is not subject to
search.
House amendment
H.R. 3009 as amended and passed by the House would enable
Customs officers to search outbound U.S. mail for unreported
monetary instruments, weapons of mass destruction, firearms,
and other contraband used by terrorists. However, reading of
mail would not be authorized absent Customs officers obtaining
a search warrant or consent.
Senate amendment
The Senate Amendment is the same as the House Amendment
with respect to mail weighing in excess of 16 ounces. However,
under the Senate Amendment, the Customs Service would be
required to obtain a warrant in order to search mail weighing
16 ounces or less. The Senate Amendment also requires the
Secretary of State to determine whether it is consistent with
international law and U.S. treaty obligations for the Customs
Service to search mail transiting the United States between two
foreign countries. The Customs Service would be authorized to
search such mail only after the Secretary of State determined
that such measures are consistent with international law and
U.S. treaty obligations.
Conference agreement
The House recedes to the Senate.
SEC. 345--AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT OF
CUSTOMS OPERATIONS IN NEW YORK CITY
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House authorizes
funds to reestablish those operations.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS
SEC. 351--GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY CUSTOMS
SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would direct
the Comptroller General to conduct an audit of the systems at
the Customs Service to monitor and enforce textile
transshipment. The Comptroller General would report on
recommendations for improvements.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 352--AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT
ENFORCEMENT OPERATIONS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
authorize $9,500,000 for FY 2002 to the Customs Service for the
purpose of enhancing its textile transshipment enforcement
operations. This amount would be in addition to Customs
Service's base authorization and the authorization to
reestablish the destroyed textile monitoring and enforcement
operations at the World Trade Center.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The Senate recedes to the House, but the text is
clarified to provide that personnel will also conduct education
and outreach in addition to enforcement.
SEC. 353--IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
earmark approximately $1.3 million within Customs' budget for
selected activities related to providing technical assistance
to help sub-Saharan African countries develop and implement
effective visa and anti-transshipment systems as required by
the African Growth and Opportunity Act (title I of Public Law
106-200).
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
Subtitle B--Office of the United States Trade Representative
SEC. 361--AUTHORIZATION OF APPROPRIATIONS
Present law
The statutory authority for budget authorization for the
Office of the United States Trade Representative is section
141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)). The
most recent authorization of appropriations for USTR was under
section 101 of the Customs and Trade Act of 1990 [P.L. 101-
382]. Under 19 U.S.C. 2171, Congress has adopted a two-year
authorization process to provide USTR with guidance as it plans
its budget as well as guidance from the Committee for the
appropriation process.
House amendment
H.R. 3009 as amended and passed by the House authorizes
$32,300,000 for FY 2003 and $31,108,000 for FY 2004. The
provision requires submission of out-of-year budget projections
to the Ways and Means and Finance Committees. In light of the
substantial increase in trade negotiation work to be conducted
by USTR and the associated need for consultations with
Congress, this provision would authorize the addition of two
individuals to assist the office of Congressional Affairs.
Senate amendment
The Senate amendment authorizes $30,000,000 for FY 2003
and $31,000,000 for FY 2004.
Conference agreement
The Senate recedes to the House.
Subtitle C--United States International Trade Commission
SEC. 371--AUTHORIZATION OF APPROPRIATIONS
Present law
The statutory authority for budget authorization for the
International Trade Commission is section 330(e)(2)(A) of the
Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent
authorization of appropriations for the ITC was under section
101 of the Customs and Trade Act of 1990 [P.L. 101-382]. Under
19 U.S.C. 1330, Congress has adopted a two-year authorization
process to provide the ITC with guidance as it plans its budget
as well as guidance from the Committees for the appropriation
process.
House amendment
H.R. 3009 as amended and passed by the House authorizes
$54,000,000 for FY 2003 and $57,240,000 for FY 2004. The
provision requires submission of out-of-year budget projections
to the Ways and Means and Finance Committees.
Senate amendment
The Senate amendment authorizes $51,400,000 for FY 2003
and $53,400,000 for FY 2004.
Conference agreement
The Senate recedes to the House.
Subtitle D--Other Trade Provisions
SEC. 381. INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT FROM DUTY
ACQUIRED ABROAD BY UNITED STATES RESIDENTS
Present law
The Harmonized Tariff Schedule at subheading 9804.00.65
currently provides a $400 duty exemption for travelers
returning from abroad.
House amendment
H.R. 3009 as amended and passed by the House would
increased the current $400 duty exemption to $800.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 382--REGULATORY AUDIT PROCEDURES
Present law
Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509)
provides the authority for Customs to audit persons making
entry of merchandise into the U.S. In the course of such audit,
Customs auditors may identify discrepancies, including
underpayments of duties. However, if there also are
overpayments, there is no requirement that such overpayments be
offset against the underpayments if the underlying entry has
been liquidated.
House amendment
H.R. 3009 as amended and passed by the House would
require that when conducting an audit, Customs must recognize
and offset overpayments and overdeclarations of duties,
quantities and values against underpayments and
underdeclarations. As an example, if during an audit Customs
finds that an importer has underpaid duties associated with one
entry of merchandise by $100 but has also overpaid duties from
another entry of merchandise by $25, then any assessment by
Customs must be the difference of $75.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 383--PAYMENT OF DUTIES AND FEES
Present law
Current law at 19 U.S.C. 1505 provides for the collection
of duties by the Secretary through regulatory process.
House amendment
H.R. 3009 as amended and passed by the House would
require duties to be paid within 10 working days without
extension. The bill also provides for the Customs Service to
create a monthly billing system upon the building of the
Automated Commercial Environment.
Senate amendment
No provision.
Conference agreement
Senate recedes to the House.
DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY
TITLE XXI--TRADE PROMOTION AUTHORITY
SEC. 2101--SHORT TITLE AND FINDINGS
Present law
No provision.
House amendment
The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2001.'' Section 2101 of the House
amendment to H.R. 3009 states that Congress finds the expansion
of international trade is vital to U.S. national security and
economic growth, as well as U.S. leadership. Section 2101 also
states that the recent pattern of decisions by dispute
settlement panels and the Appellate Body of the World Trade
Organization to impose obligations and restrictions on the use
of antidumping and countervailing measures by WTO members has
raised concerns, and Congress is concerned that such bodies
appropriately apply the standard of review contained in Article
17.6 of the Antidumping Agreement, to provide deference to a
permissible interpretation by a WTO member and to the
evaluation by a member of the facts where that evaluation is
unbiased and objective and the establishment of the facts is
proper.
Senate amendment
The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2002.'' Section 2101 of the Senate
amendment to H.R. 3009 states that Congress finds the expansion
of international trade is vital to U.S. national security and
economic growth, as well as U.S. leadership. Section 2101 also
states that support for continued trade expansion requires that
dispute settlement procedures under international trade
agreements not add to or diminish the rights and obligations
provided in such agreements. It goes on to note a troubling
pattern of cases before WTO dispute settlement panels and the
WTO Appellate Body that do precisely that.
Conference agreement
The Senate recedes to the House with modifications. With
respect to the findings, the Conferees believe that, as stated
in section 2101(b) of the Conference agreement, support for
continued trade expansion requires that dispute settlement
procedures under international trade agreements not add to or
diminish the rights and obligations provided in such
agreements. Therefore, the recent pattern of decisions by
dispute settlement panels and the WTO Appellate Body to impose
obligations and restrictions on the use of antidumping,
countervailing and safeguard measures by WTO members has raised
concerns, and Congress is concerned that such bodies
appropriately apply the standard of review contained in Article
17.6 of the Antidumping Agreement, to provide deference to a
permissible interpretation by a WTO member and to the
evaluation by a member of the facts where that evaluation is
unbiased and objective and the establishment of the facts is
proper.
SEC. 2102--TRADE NEGOTIATING OBJECTIVES
Present/expired law
Section 1101(a) of the Omnibus Trade and Competitiveness
Act of 1988 (the 1988 Act) set forth overall negotiating
objectives for concluding trade agreements. These objectives
were to obtain more open, equitable, and reciprocal market
access, the reduction or elimination of barriers and other
trade-distorting policies and practices, and a more effective
system of international trading disciplines and procedures.
Section 1102(b) set forth the following principal trade
negotiating objectives: dispute settlement, transparency,
developing countries, current account surpluses, trade and
monetary coordination, agriculture, unfair trade practices,
trade in services, intellectual property, foreign direct
investment, safeguards, specific barriers, worker rights,
access to high technology, and border taxes.
House amendment
Section 2102 of the House amendment to H.R. 3009 would
establish the following overall negotiating objectives:
obtaining more open, equitable, and reciprocal market access;
obtaining the reduction or elimination of barriers and other
trade-distorting policies and practices; further strengthening
the system of international trading disciplines and procedures,
including dispute settlement; fostering economic growth and
full employment in the U.S. and the global economy; ensuring
that trade and environmental policies are mutually supportive
and seeking to protect and preserve the environment and enhance
the international means of doing so, while optimizing the use
of the world's resources; promoting respect for worker rights
and the rights of children consistent with International Labor
Organization core labor standards, as defined in the bill; and
seeking provisions in trade agreements under which parties
strive to ensure that they do not weaken or reduce the
protections afforded in domestic environmental and labor laws
as an encouragement to trade.
In addition, section 2102 would establish the principal
trade negotiating objectives for concluding trade agreements,
as follows:
Trade barriers and distortions: expanding competitive
market opportunities for U.S. exports and obtaining fairer and
more open conditions of trade by reducing or eliminating tariff
and nontariff barriers and policies and practices of foreign
governments directly related to trade that decrease market
opportunities for U.S. exports and distort U.S. trade; and
obtaining reciprocal tariff and nontariff barrier elimination
agreements, with particular attention to products covered in
section 111(b) of the Uruguay Round Agreements Act.
Services: to reduce or eliminate barriers to
international trade in services, including regulatory and other
barriers, that deny national treatment or unreasonably restrict
the establishment or operations of services suppliers.
Foreign investment: to reduce or eliminate artificial or
trade-distorting barriers to trade-related foreign investment
and, recognizing that U.S. law on the whole provides a high
level of protection for investment, consistent with or greater
than the level required by international law, to secure for
investors important rights comparable to those that would be
available under U.S. legal principles and practice, by:
Reducing or eliminating exceptions to the principle
of national treatment;
Freeing the transfer of funds relating to
investments;
Reducing or eliminating performance requirements,
forced technology transfers, and other unreasonable
barriers to the establishment and operation of
investments;
Seeking to establish standards for expropriation
and compensation for expropriation, consistent with
United States legal principles and practice;
Providing meaningful procedures for resolving
investment disputes including between an investor and a
government;
Seeking to improve mechanisms used to resolve
disputes between an investor and a government through
mechanisms to eliminate frivolous claims and procedures
to ensure the efficient selection of arbitrators and
the expeditious disposition of claims;
Providing an appellate or similar review mechanism
to correct manifestly erroneous interpretations of law;
and
Ensuring the fullest measure of transparency in
investment disputes by
Ensuring that all requests for dispute
settlement and all proceedings, submissions,
findings, and decisions are promptly made
public;
All hearings are open to the public; and
Establishing a mechanism for acceptance of
amicus curiae submissions.
Intellectual property: including promoting adequate and
effective protection of intellectual property rights through
ensuring accelerated and full implementation of the Agreement
on Trade-Related Aspects of Intellectual Property Rights,
including strong enforcement;
Providing stronger protection for new and emerging
technologies and new methods of transmitting and
distributing products embodying intellectual property;
and
Ensuring that standards of protection and
enforcement keep pace with technological developments,
and in particular ensuring that tight holders have the
legal and technological means to control the use of
their works through the internet and other global
communication media.
Transparency: to increase public access to information
regarding trade issues as well as the activities of
international trade institutions; to increase openness in
international trade fora, including the WTO, by increasing
public access to appropriate meetings, proceedings, and
submissions, including with regard to dispute settlement and
investment; and to increase timely public access to
notifications made by WTO member states and the supporting
documents.
Anti-corruption: to obtain high standards and appropriate
enforcement mechanisms applicable to persons from all countries
participating in a trade agreement that prohibit attempts to
influence acts, decisions, or omissions of foreign government;
and to ensure that such standards do not place U.S. persons at
a competitive disadvantage in international trade.
Improvement of the WTO and multilateral trade agreements:
to achieve full implementation and extend the coverage of the
WTO and such agreements to products, sectors, and conditions of
trade not adequately covered; and to expand country
participation in and enhancement of the Information Technology
Agreement (ITA) and other trade agreements.
Regulatory practices: to achieve increased transparency
and opportunity for the participation of affected parties in
the development of regulations; to require that proposed
regulations be based on sound science, cost-benefit analysis,
risk assessment, or other objective evidence; to establish
consultative mechanisms among parties to trade agreements to
promote increased transparency in developing guidelines, rules,
regulations, and laws for government procurement and other
regulatory regimes; and to achieve the elimination of
government measures such as price controls and reference
pricing which deny full market access for United States
products.
Electronic commerce: to ensure that current obligations,
rules, disciplines, and commitments under the WTO apply to
electronic commerce; to ensure that electronically delivered
goods and services receive no less favorable treatment under
trade rules and commitments than like products delivered in
physical form; and the classification of such goods and
services ensures the most liberal trade treatment possible; to
ensure that governments refrain from implementing trade-related
measures that impede electronic commerce; where legitimate
policy objectives require domestic regulations that affect
electronic commerce, to obtain commitments that any such
regulations are the least restrictive on trade,
nondiscriminatory, and transparent, and promote an open market
environment; and to extend the moratorium of the WTO on duties
on electronic transmissions.
Agriculture: to ensure that the U.S. trade negotiators
duly recognize the importance of agricultural issues; to obtain
competitive market opportunities for U.S. exports in foreign
markets substantially equivalent to the competitive
opportunities afforded foreign exports in U.S. markets and to
achieve fairer and more open conditions of trade; to reduce or
eliminate trade distorting subsidies; to impose disciplines on
the operations of state-trading enterprises or similar
administrative mechanisms; to eliminate unjustified
restrictions on products derived from biotechnology; to
eliminate sanitary or phytosanitary restrictions that
contravene the Uruguay Round Agreement as they are not based on
scientific principles and to improve import relief mechanisms
to accommodate the unique aspects of perishable and cyclical
agriculture.
Labor and the environment: to ensure that a party does
not fail to effectively enforce its environmental or labor
laws, through a sustained or recurring course of action or
inaction, in a manner affecting trade between the United States
and that party; to recognize that a party to a trade agreement
is effectively enforcing its laws if a course of inaction or
inaction reflects a reasonable exercise of discretion or
results from a bona fide decision regarding allocation of
resources and no retaliation may be authorized based on the
exercise of these rights or the right to establish domestic
labor standards and levels of environmental protection; to
strengthen the capacity of U.S. trading partners to promote
respect for core labor standards and to protect the environment
through the promotion of sustainable development; to reduce or
eliminate government practices or policies that unduly threaten
sustainable development; to seek market access for U.S.
environmental technologies, goods, and services; and to ensure
that labor, environmental, health, or safety policies and
practices of parties to trade agreements do not arbitrarily or
unjustifiably discriminate against U.S. exports or serve as
disguised barriers to trade.
Dispute settlement and enforcement: to seek provisions in
trade agreements providing for resolution of disputes between
governments in an effective, timely, transparent, equitable,
and reasoned manner requiring determinations based on facts and
the principles of the agreement, with the goal of increasing
compliance; seek to strengthen the capacity of the WTO Trade
Policy Review Mechanism to review compliance; seek provisions
encouraging the early identification and settlement of disputes
through consultations; seek provisions encouraging trade-
expanding compensation; seek provisions to impose a penalty
that encourages compliance, is appropriate to the parties,
nature, subject matter, and scope of the violation, and has the
aim of not adversely affecting parties or interests not party
to the dispute while maintaining the effectiveness of the
enforcement mechanism; and seek provisions that treat U.S.
principal negotiating objectives equally with respect to
ability to resort to dispute settlement and availability of
equivalent procedures and remedies.
Extended WTO negotiations: concerning extended WTO
negotiations on financial services, civil aircraft, and rules
of origin.
Senate amendment
The Senate Amendment is substantially similar to the
House Amendment, with the exception of several key provisions:
Small Business: The Senate Amendment contains an overall
negotiating objective ``to ensure that trade agreements afford
small businesses equal access to international markets,
equitable trade benefits, expanded export market opportunities,
and provide for the reduction or elimination of trade barriers
that disproportionately impact small businesses.''
Trade in Motor Vehicles and Parts: The Senate Amendment
contains a principal negotiating objective on expanding
competitive opportunities for exports of U.S. motor vehicles
and parts.
Foreign Investment: The Senate Amendment states as an
objective of the United States in the context of investor-state
dispute settlement ``ensuring that foreign investors in the
United States are not accorded greater rights than United
States investors in the United States.'' The Senate Amendment's
objective with respect to investor-state dispute settlement
also differs from the House Amendment in the following
respects:
It sets as an objective ``seeking to establish
standards for fair and equitable treatment consistent
with United States legal principles and practice,
including the principle of due process.''
It sets deterrence of the filing of frivolous
claims as an objective, in addition to the prompt
elimination of frivolous claims.
The Senate Amendment seeks to establish
``procedures to enhance opportunities for public input
into the formulation of government positions.''
The Senate Amendment seeks to establish a single
appellate body to review decisions by arbitration
panels in investor-state dispute settlement cases.
Also, unlike the House Amendment, the Senate Amendment
does not prescribe a standard of review for an eventual
appellate body.
Intellectual Property: The Senate Amendment contains an
objective to respect the ``Declaration on the TRIPS Agreement
and Public Health, adopted by the World Trade Organization at
the Fourth Ministerial Conference at Doha, Qatar on November
14, 2001.''
Trade in Agriculture: The Senate Amendment's negotiating
objective on export subsidies differs from the House Amendment,
stating that an objective of the United States is ``seeking to
eliminate all export subsidies on agricultural commodities
while maintaining bona fide food aid and preserving U.S.
agriculture development and export credit programs that allow
the U.S. to compete with other foreign export promotion
efforts.'' The Senate Amendment also provides that it is a
negotiating objective of the United States to ``strive to
complete a general multilateral round in the WTO by January 1,
2005, and seek the broadest market access possible in
multilateral, regional, and bilateral negotiations, recognizing
the effect that simultaneous sets of negotiations may have on
US import-sensitive commodities (including those subject to
tariff-rate quotas).''
Human Rights and Democracy: The Senate Amendment contains
a negotiating objective ``to obtain provisions in trade
agreements that require parties to those agreements to strive
to protect internationally recognized civil, political, and
human rights.''
Dispute Settlement: The Senate Amendment contains a
negotiating objective absent in the House Amendment ``to seek
improved adherence by panels convened under the WTO
Understanding on Rules and Procedures Governing the Settlement
of Disputes and by the WTO Appellate Body to the standard of
review applicable under the WTO Agreement involved in the
dispute, including greater deference, where appropriate, to the
fact finding and technical expertise of national investigating
authorities.''
Border Taxes: The Senate Amendment contains an objective
absent from the House Amendment on border taxes. The objective
seeks ``to obtain a revision of the WTO rules with respect to
the treatment of border adjustments for internal taxes to
redress the disadvantage to countries relying primarily on
direct taxes for revenue rather than indirect taxes.'' The
objective is addressed to a decision by the WTO Dispute
Settlement Body holding the foreign sales corporation
provisions of the Internal Revenue Code to be inconsistent with
WTO rules.
Textiles: The Senate Amendment contains an extensive
objective on opening foreign markets to U.S. textile exports.
There is no similar provision in the House Amendment.
Worst Forms of Child Labor: The Senate Amendment contains
a negotiating objective to prevent distortions in the conduct
of international trade caused by the use of the worst forms of
child labor and to redress unfair and illegitimate competition
based upon the use of the worst forms of child labor.
Conference agreement
The Senate recedes to the House with several
modifications. With respect to the overall negotiating
objectives, the Conferees agree to the overall negotiating
objective regarding small business in section 2101(a)(8) of the
Senate amendment. Second, theConferees agree to an overall
negotiating objective to promote universal compliance with ILO
Declaration 182 concerning the worst forms of child labor.
With respect to the principal negotiating objectives, the
Conferees agree to expand the negotiating objective on
intellectual property to respect the Declaration on the TRIPS
Agreement and Public Health, adopted by the WTO at Doha
(section 2102(b)(4)(c) of the Senate amendment).
With respect to the principal negotiating objectives
regarding foreign investment, the Conferees believe that it is
a priority for negotiators to seek agreements protecting the
rights of U.S. investors abroad and ensuring the existence of a
neutral investor-state dispute settlement mechanism. At the
same time, these protections must be balanced so that they do
not come at the expense of making Federal, State and local laws
and regulations more vulnerable to successful challenges by
foreign investors than by similarly situated U.S. investors.
No Greater Rights: The House recedes to the Senate with a
technical modification to clarify that foreign investors in the
United States are not accorded greater substantive rights with
respect to investment protections than United States investors
in the United States. That is, the reciprocal obligations
regarding investment protections that the United States
undertakes in pursuing its goals should not result in foreign
investors being entitled to compensation for government actions
where a similarly situated U.S. investor would not be entitled
to any form of relief, while ensuring that U.S. investors
abroad can challenge host government measures which violate the
terms of the investment agreement. Thus, this language
expresses Congress' direction that the substantive investment
protections (e.g., expropriation, fair and equitable treatment,
and full protection and security) should be consistent with
United States legal principles and practice and not provide
greater rights to foreign investors in the United States.
This language applies to substantive protections only and
is not applicable to procedural issues, such as access to
investor-state dispute settlement. The Conferees recognize that
the procedures for resolving disputes between a foreign
investor and a government may differ from the procedures for
resolving disputes between a domestic investor and a government
and may be available at different times during the dispute.
Thus, the ``no greater rights'' direction does not, for
instance, apply to such issues as the dismissal of frivolous
claims, the exhaustion of remedies, access to appellate
procedures, or other similar issues.
The Conferees also agree that negotiators should seek to
provide for an appellate body or similar mechanism to provide
coherence to the interpretations of investment provisions in
trade agreements.
With respect to the principal negotiating objective on
agriculture, the Conferees agree to section 2102(b)(10)(A)(iii)
and (xv) of the House amendment, in lieu of section
2102(b)(10)(A)(iii) of the Senate amendment. The Conferees also
accept section 2102(b)(10)(A)(xvi) of the Senate amendment on
the timing and sequence of WTO agriculture negotiations
relative to other negotiations.
The Conferees agree to section 2102(b)(13)(C) of the
Senate amendment, relating to dispute settlement in dumping,
subsidy, and safeguard cases, as modified, to seek adherence by
WTO panels to the applicable standard of review.
The Conferees recognize the importance of preserving the
ability of the United States to enforce rigorously its trade
remedy laws, including the antidumping, countervailing duty and
safeguard laws. Because this issue is significant to many
Members of Congress in both the House and Senate, the Conferees
have made this priority a principal negotiating objective.
Negotiators must also avoid agreements that lessen the
effectiveness of domestic and international disciplines on
unfair trade, as well as domestic and international safeguard
provisions. In addition, section 2102(b)(14)(B) directs the
President to address and remedy market distortions that lead to
dumping and subsidization, including overcapacity,
cartelization, and market-access barriers.
The Conferees agree to section 2012(b)(14) of the Senate
amendment stating that the United States should seek a revision
of WTO rules on the treatment of border adjustments for
internal taxes to redress the disadvantage to countries relying
primarily on direct taxes for revenue rather than indirect
taxes. The Conferees agree that such a revision of WTO rules is
one among other options for the United States, including
domestic legislation, to redress such a disadvantage.
The Conferees agree to include as a principal negotiating
objective to obtain competitive market opportunities for U.S.
exports of textiles substantially equivalent to those for
foreign textiles in the United States.
The Conferees agree to a principal negotiating objective
concerning the worst forms of child labor, to seek commitments
by trade agreement parties to vigorously enforce their own laws
prohibiting the worst forms of child labor.
SEC. 2102(C)--PROMOTION OF CERTAIN PRIORITIES
Present/expired law
No provision.
House amendment
Section 2102(c) of the House amendment to H.R. 3009 sets
forth certain priorities for the President to address. These
provisions include seeking greater cooperation between WTO and
the ILO; seeking to establish consultative mechanisms
amongparties to trade agreements to strengthen the capacity of U.S.
trading partners to promote respect for core labor standards, seeking
to seek to establish consultative mechanisms among parties to trade
agreements to strengthen the capacity of U.S. trading partners to
develop and implement standards for environment and human health based
on sound science; conducting environmental reviews of future trade and
investment agreements, consistent with Executive Order 13141 and its
relevant guidelines; reviewing the impact of future trade agreements on
U.S. employment, modeled after Executive Order 13141; taking into
account, in negotiating trade agreements, protection of legitimate
health or safety, essential security, and consumer interests; requiring
the Secretary of Labor to consult with foreign parties to trade
negotiations as to their labor laws and providing technical assistance
where needed; reporting to Congress on the extent to which parties to
an agreement have in effect laws governing exploitative child labor;
preserving the ability of the United States to enforce rigorously its
trade laws, including antidumping and countervailing duty laws, and
avoiding agreements which lessen their effectiveness; ensuring that
U.S. exports are not subject to the abusive use of trade laws,
including antidumping and countervailing duty laws, by other countries;
continuing to promote consideration of Multilateral Environmental
Agreements (MEAs) and consulting with parties to such agreements
regarding the consistency of any MEA that includes trade measures with
existing environmental exceptions under Article XX of the GATT.
In addition, USTR, twelve months after the imposition of
a penalty or remedy by the United States permitted by an
agreement to which this Act applies, is to report to the
Committee on the effectiveness of remedies applied under U.S.
law to enforce U.S. rights under trade agreements. USTR shall
address whether the remedy was effective in changing the
behavior of the targeted party and whether the remedy had any
adverse impact on parties or interests not party to the
dispute.
Finally, section 2102(c) would direct the President to
seek to establish consultative mechanisms among parties to
trade agreements to examine the trade consequences of
significant and unanticipated currency movements and to
scrutinize whether a foreign government engaged in a pattern of
manipulating its currency to promote a competitive advantage in
international trade.
Senate amendment
With several notable exceptions, the priorities set forth
in section 2102(c) of the Senate Amendment are identical to the
priorities set forth in the House Amendment. The exceptions
are:
With respect to the study that the President must perform
on the impact of future trade agreements on employment, the
Senate Amendment requires the President to examine particular
criteria, as follows: the impact on job security, the level of
compensation of new jobs and existing jobs, the displacement of
employment, and the regional distribution of employment,
utilizing experience from previous trade agreements and
alternative models of employment analysis. The Senate Amendment
also requires that the report be made available to the public.
The Senate Amendment requires that, in connection
with new trade agreement negotiations, the President
shall ``submit to the Committee on Ways and Means of
the House of Representatives and the Committee on
Finance of the Senate a meaningful labor rights report
of the country, or countries, with respect to which the
President is negotiating.''
The Senate Amendment adds to the House Amendment
priority on preserving the ability of the United States
to enforce vigorously its trade laws, by including U.S.
``safeguards'' law in the list of laws at issue. This
is the U.S. law authorizing the President to provide
relief to parties seriously injured or threatened with
serious injury due to surges of imports. The priority
in the Senate Amendment also directs the President to
remedy certain market distorting measures that underlie
unfair trade practices.
Conference agreement
The Senate recedes to the House amendment with several
modifications. With respect to the worst forms of child labor,
the Conferees agree to expand section 2102(c)(2) of the House
amendment to include the worst forms of child labor within
requirements to seek to establish consultative mechanisms to
strengthen the capacity of U.S. trading partners to promote
respect for core labor standards.
The Conferees agree to modify section 2105(c)(5) of the
House amendment to require the President to report on impact of
future trade agreements on U.S. employment, including on labor
markets, modeled after E.O. 13141 to the extent appropriate in
establishing procedures and criteria, and to make the report
public.
With respect to the labor rights report in section
2102(c)(8) of both bills, the Conferees agree to the Senate
provision. Furthermore, the Conferees agree to section
2107(b)(2)(E) of the Senate amendment to require that
guidelines for the Congressional Oversight Group include the
time frame for submitting this report.
SEC. 2102(D)--CONSULTATIONS, ADHERENCE TO OBLIGATIONS UNDER URUGUAY
ROUND AGREEMENTS
Present/expired law
No provision.
House amendment
Section 2102(d) of the House amendment to H.R. 3009
requires that USTR consult closely and on a timely basis with
the Congressional Oversight Group appointed undersection 2107.
In addition, USTR would be required to consult closely (including
immediately before the initialing of an agreement) with the
congressional advisers on trade policy and negotiations appointed under
section 161 of the Trade Act of 1974, as well as the House Committee on
Ways and Means, the Senate Committee on Finance, and the Congressional
Oversight Group. With regard to negotiations concerning agriculture
trade, USTR would also be required to consult with the House and Senate
Committees on Agriculture.
In determining whether to enter into negotiations with a
particular country, section 2102(e) would require the President
to take into account whether that country has implemented its
obligations under the Uruguay Round Agreements.
Senate amendment
Section 2102(d) of the Senate amendment is identical to
the House provision in the House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2103--TRADE AGREEMENTS AUTHORITY
Present/expired law
Tariff proclamation authority. Section 1102(a) of the
1988 Act provided authority to the President to proclaim
modifications in duties without the need for Congressional
approval, subject to certain limitations. Specifically, for
rates that exceed 5 percent ad valorem, the President could not
reduce any rate of duty to a rate less than 50 percent of the
rate of duty applying on the date of enactment. Rates at or
below 5 percent could be reduced to zero. Any duty reduction
that exceeded 50 percent of an existing duty higher than 5
percent or any tariff increase had to be approved by Congress.
Staging authority required that duty reductions on any
article could not exceed 3 percent per year, or one-tenth of
the total reduction, whichever is greater, except that staging
was not required if the International Trade Commission
determined there was no U.S. production of that article.
Negotiation of bilateral agreements. Section 1102(c) of
the 1988 Act set forth three requirements for the negotiation
of a bilateral agreement:
The foreign country must request the negotiation of the
bilateral agreement;
The agreement must make progress in meeting applicable
U.S. trade negotiating objectives; and
The President must provide written notice of the
negotiations to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate and
consult with these committees.
The negotiations could proceed unless either Committee
disapproved the negotiations within 60 days prior to the 90
calendar days advance notice required of entry into an
agreement (described below).
Negotiation of multilateral non-tariff agreements. With
respect to multilateral agreements, section 1102(b) of the 1988
Act provided that whenever the President determines that any
barrier to, or other distortion of, international trade unduly
burdens or restricts the foreign trade of the United States or
adversely affects the U.S. economy, or the imposition of any
such barrier or distortion is likely to result in such a
burden, restriction, or effect, he may enter into a trade
agreement with the foreign countries involved. The agreement
must provide for the reduction or elimination of such barrier
or other distortion or prohibit or limit the imposition of such
a barrier or distortion.
Provisions qualifying for fast track procedures. Section
1103(b)(1)(A) of the 1988 Act provided that fast track apply to
implementing bills submitted with respect to any trade
agreements entered into under the statute. Section 151(b)(1) of
the Trade Act of 1974 further defined ``implementing bill'' as
a bill containing provisions ``necessary or appropriate'' to
implement the trade agreement, as well as provisions approving
the agreement and the statement of administrative action.
Time period. The authority applied with respect to
agreements entered into before June 1, 1991, and until June 1,
1993 unless Congress passed an extension disapproval
resolution. The authority was then extended to April 15, 1994,
to cover the Uruguay Round of multilateral negotiations under
the General Agreement on Tariffs and Trade.
House amendment
Section 2103 of the House amendment provides:
Proclamation authority. Section 2103(a) would provide the
President the authority to proclaim, without Congressional
approval, certain duty modifications in a manner very similar
to the expired provision. Specifically, for rates that exceed 5
percent ad valorem, the President would not be authorized to
reduce any rate of duty to a rate lessthan 50 percent of the
rate of duty applying on the date of enactment. Rates at or below 5
percent ad valorem could be reduced to zero. Any duty reduction that
exceeded 50 percent of an existing duty higher than 5 percent or any
tariff increase would have to be approved by Congress.
In addition, section 2103(a) would not allow the use of
tariff proclamation authority on import sensitive agriculture.
Staging authority would require that duty reductions on
any article could not exceed 3 percent per year, or one-tenth
of the total reduction, whichever is greater, except that
staging would not be required if the International Trade
Commission determined there is no U.S. production of that
article.
These limitations would not apply to reciprocal
agreements to eliminate or harmonize duties negotiated under
the auspices of the World Trade Organization, such as so-called
``zero-for-zero'' negotiations.
Agreements on tariff and non-tariff barriers. Section
2103(b)(1) would authorize the President to enter into a trade
agreement with a foreign country whenever he determined that
any duty or other import restriction or any other barrier to or
distortion of international trade unduly burdens or restricts
the foreign trade of the United States or adversely affects the
U.S. economy, or the imposition of any such barrier or
distortion is likely to result in such a burden, restriction,
or effect. The agreement must provide for the reduction or
elimination of such barrier or other distortion or prohibit or
limit the imposition of such a barrier or distortion. No
distinction would be made between bilateral and multilateral
agreements.
Conditions. Section 2103(b)(2) would provide that the
special implementing bills procedures may be used only if the
agreement makes progress in meeting the applicable objectives
set forth in section 2102(a) and (b) and the President
satisfies the consultation requirements set forth in section
2104.
Bills qualifying for trade authorities procedures.
Section 2103(b)(3)(A) would provide that bills implementing
trade agreements may qualify for trade promotion authority TPA
procedures only if those bills consist solely of the following
provisions:
Provisions approving the trade agreement and
statement of administrative action; and
Provisions necessary or appropriate to implement
the trade agreement.
Time period. Sections 2103(a)(1)(A) and 2103(b)(1)(C)
would extend trade promotion authority to agreements entered
into before June 1, 2005. An extension until June 1, 2007,
would be permitted unless Congress passed a disapproval
resolution, as described under section 2103(c).
Senate amendment
In most respects, section 2103 of the Senate Amendment is
identical to section 2103 of the House Amendment. However,
there are several key differences, as follows:
The Senate Amendment limits the President's
proclamation authority with respect to ``import
sensitive agricultural products,'' a term defined in
section 2113(5) of the Senate Amendment. This
limitation differs from the limitation in the House
Amendment, inasmuch as it includes certain products
subject to tariff rate quotas.
The Senate Amendment contains a provision making a
trade agreement implementing bill ineligible for ``fast
track'' procedures if the bill modifies, amends, or
requires modification or amendment to certain trade
remedy laws. A bill that does modify, amend or require
modification or amendment to those laws is subject to a
point of order in the Senate, which may be waived by a
majority vote.
The Senate Amendment requires the U.S.
International Trade Commission to submit a report to
Congress on negotiations during the initial period for
which the President is granted trade promotion
authority. This report would be made in connection with
a request by the President to have such authority
extended.
Conference agreement
The Senate recedes to the House amendment with several
modifications. The Conferees agree to the new definition of
import sensitive agriculture in section 2103(a)(2)(B),
2104(b)(2)(A)(i), and 2113(5) of the Senate amendment to
encompass products subject to tariff rate quotas, as well as
products subject to the lowest tariff reduction in the Uruguay
Round.
The Conferees agree to section 2103(c)(3)(B) of the
Senate amendment, which requires the ITC to submit a report to
Congress by May 1, 2005 (if the President seeks extension of
TPA until June 2, 2007) analyzing the economic impact on the
United States of all trade agreements implemented between
enactment and the extension request.
SEC. 2104--CONSULTATIONS AND ASSESSMENT
Present/expired law
Section 102 of the Trade Act of 1974 and sections 1102(d)
and 1103 of the 1988 Act set forth the fast track requirements.
These provisions required the President, before entering into
any trade agreement, to consult with Congress as to the nature
of the agreement, how and to what extent the agreement will
achieve applicable purposes, policies, and objectives, and all
matters relating to agreement implementation. Inaddition,
before entering into an agreement, the President was required to give
Congress at least 90 calendar days advance notice of his intent. The
purpose of this period was to provide the Congressional Committees of
jurisdiction an opportunity to review the proposed agreement before it
was signed.
Section 135(e) of the Trade Act of 1974 required that the
Advisory Committee for Trade Policy and Negotiations meet at
the conclusion of negotiations for each trade agreement and
provide a report as to whether and to what extent the agreement
promotes the economic interests of the United States and
achieves the applicable overall and principal negotiating
objectives of section 1101 of the 1988 Act. The report was due
not later than the date on which the President notified
Congress of his intent to enter into an agreement. With regard
to the Uruguay Round, the report was due 30 days after the date
of notification.
House amendment
Section 2104 of the House amendment to H.R. 3009 would
establish a number of requirements that the President consult
with Congress. Specifically, section 2104(a)(1) would require
the President to provide written notice and consult with the
relevant committees at least 90 calendar days prior to entering
into negotiations. Section 2104(a)(c) also provides that
President shall meet with the Congressional Oversight Group
established under section 2107 upon a request of a majority of
its members. Trade promotion authority would not apply to an
implementing bill if both Houses separately agree to a
procedural disapproval resolution within any 60-day period
stating that the Administration has failed to notify or consult
with Congress.
Section 2104(b)(1) would establish a special consultation
requirement for agriculture. Specifically, before initiating
negotiations concerning tariff reductions in agriculture, the
President is to assess whether U.S. tariffs on agriculture
products that were bound under the Uruguay Round Agreements are
lower than the tariffs bound by that country. In his
assessment, the President would also be required to consider
whether the tariff levels bound and applied throughout the
world with respect to imports from the United States are higher
than U.S. tariffs and whether the negotiation provides an
opportunity to address any such disparity. The President would
be required to consult with the Committees on Ways and Means
and Agriculture of the House and the Committees on Finance and
Agriculture, Nutrition and Forestry of the Senate concerning
the results of this assessment and whether it is appropriate
for the United States to agree to further tariff reductions
under such circumstances and how all applicable negotiating
objectives would be met.
Section 2104(b)(2) provides special consultations on
import sensitive agriculture products. Specifically, before
initiating negotiations on agriculture and as soon as
practicable with respect to the Free Trade Area of the Americas
and WTO negotiations, USTR is to identify import sensitive
agriculture products and consult with the Committees on Ways &
Means and Agriculture of the House and the Committees on
Finance and Agriculture, Nutrition, and Forestry in the Senate
concerning whether any further tariff reduction should be
appropriate, and whether the identified products face
unjustified sanitary or phytosanitary barriers. USTR is also to
request that the International Trade Commission prepare an
assessment of the probable economic effects of any such tariff
reduction on the U.S. industry producing the product and on the
U.S. economy as a whole. USTR is to then notify the Committees
of those products for which it intends to seek tariff
liberalization as well as the reasons. If USTR commences
negotiations and then identifies additional import sensitive
agriculture products, or a party to the negotiations requests
tariff reductions on such a product, then USTR shall notify the
Committees as soon as practicable of those products and the
reasons for seeking tariff reductions.
Section 2104(c) would establish a special consultation
requirement for textiles. Specifically, before initiating
negotiations concerning tariff reductions in textiles and
apparel, the President is to assess whether U.S. tariffs on
textile and apparel products that were bound under the Uruguay
Round Agreements are lower than the tariffs bound by that
country. In his assessment, the President would also be
required to consider whether the tariff levels bound and
applied throughout the world with respect to imports from the
United States are higher than U.S. tariffs and whether the
negotiation provides an opportunity to address any such
disparity. The President would be required to consult with the
Committee on Ways and Means of the House and the Committee on
Finance of the Senate concerning the results of this assessment
and whether it is appropriate for the United States to agree to
further tariff reductions under such circumstances and how all
applicable negotiating objectives would be met.
In addition, section 2104(d) would require the President,
before entering into any trade agreement, to consult with the
relevant Committees concerning the nature of the agreement, how
and to what extent the agreement will achieve the applicable
purposes, policies, and objectives set forth in the House
amendment to H.R. 3009 and all matters relating to
implementation under section 2105, including the general effect
of the agreement on U.S. laws.
Section 2104(e) would require that the report of the
Advisory Committee for Trade Policy and Negotiations under
section 135(e)(1) of the Trade Act of 1974 be provided not
later than 30 days after the date on which the President
notifies Congress of his intent to enter into the agreement
under section 2105(a)(1)(A).
Finally, section 2104(f) would require the President, at
least 90 days before entering into a trade agreement, to ask
the International Trade Commission to assess the agreement,
including the likely impact of the agreement on the U.S.
economy as a whole, specific industry sectors, and U.S.
consumers. That report would be due 90 days from the date after
the President enters into the agreement.
Senate amendment
The Senate Amendment is substantially similar to the
House bill, with the following exceptions:
Consultations on export subsidies and distorting
policies. Section 2104(b)(2)(A)(ii)(III) requires consultations
on whether nations producing identified products maintain
export subsidies or distorting policies that distort trade and
impact of policies on U.S. producers.
Consultations relating to fishing trade. Section
2104(b)(3) requires that for negotiations relating to fishing
trade, the Administration will keep fully apprised and on
timely basis consult with the House Resources Committee and the
Senate Commerce Committee.
Special reporting requirements on U.S. trade remedy laws.
Section 2104(d) provides that the President, at least 90
calendar days before the President enters into a trade
agreement, shall notify the House Ways and Means Committee and
the Senate Finance Committee in writing any amendments to U.S.
antidumping and countervailing duty laws (title VII of the
Tariff Act of 1930) or U.S. safeguard provisions (chapter 1 of
title II of the Trade Act of 1974) that the President proposes
to include in the implementing legislation. On the date that
the President transmits the notification, the President must
also transmit to the Committees a report explaining his reasons
for believing that amendments to these trade remedy laws are
necessary to implement the trade agreement and his reasons for
believing that such amendments are consistent with the
negotiating objective on this issue. Not later than 60 calendar
days after the date on which the President transmits
notification to the relevant committees, the Chairman and
ranking members of the House Ways and Means Committee and the
Senate Finance Committees shall issue reports stating whether
the proposed amendments described in the President's
notification are consistent with the negotiating objectives on
trade laws.
Conference agreement
The Senate recedes to the House with several
modifications. The Conferees agree to section
2104(b)(2)(A)(11)(III) of the Senate amendment, which requires
consultations on whether other nations producing identified
products maintain export subsidies or distorting policies that
distort trade and impact of policies on U.S. producers. In
addition, the Conferees agree to section 2104(b)(3) of the
Senate amendment, which requires that for negotiations relating
to fishing trade, the Administration will keep fully apprised
and on timely basis consult with the House Resources Committee
and the Senate Commerce Committee.
Finally, the Conferees agree to include the notification
and report on changes to trade remedy laws in sections
2104(d)(3)(A) and (B) in the Senate amendment with
modifications. Given the priority that Conferees attach to
keeping U.S. trade remedy laws strong and ensuring that they
remain fully enforceable, the Conference agreement puts in
place a process requiring special scrutiny of any impact that
trade agreements may have on these laws. The process requires
the President, at least 180 calendar days before the day on
which he enters into a trade agreement, to report to the
Committees on Ways and Means and the Committee on Finance the
range of proposals advanced in trade negotiations and may be in
the final agreement that could require amendments to title VII
of the Tariff Act of 1930 or to chapter 1 of title II of the
Trade Act of 1974; and how these proposals relate to the
objectives described in section 2102(b)(14).
The Conference agreement also provides a mechanism for
any Member in the House or Senate to introduce at any time
after the President's report is issued a nonbinding resolution
which states ``that the ________ finds that the proposed
changes to U.S. trade remedy laws contained in the report of
the President transmitted to the Congress on ________ under
section 2104(d)(3) of the Bipartisan Trade Promotion Authority
Act of 2002 with respect to ________, are inconsistent with the
negotiating objectives described in section 2102(b)(14) of that
Act.'', with the first blank space being filled in with either
the ``House of Representatives'' or the ``Senate'', as the case
may be, the second blank space filled in with the appropriate
date of the report, and the third blank space being filled in
with the name of the country or countries involved.
The resolution is referred to the Ways and Means and
Rules Committees in the House and the Finance Committee in the
Senate, and is privileged on the floor if it is reported by the
Committees. The Conference agreement allows only one resolution
(either a nonbinding resolution or a disapproval resolution)
per agreement to be eligible for the trade promotion authority
procedures contained in sections 152 (d) and (e) of the Trade
Act of 1974. The one resolution quota is satisfied for the
House only after the Ways and Means Committee reports a
resolution, and for the Senate only after the Finance Committee
reports a resolution.
The Conference agreement states that, with respect to
agreements entered into with Chile and Singapore, the report
referenced in section 2104(d)(3)(A) shall be submitted by the
President at least 90 calendar days before the day on which the
President enters into a trade agreement with either country.
SEC. 2105--IMPLEMENTATION OF TRADE AGREEMENTS
Present/expired law
Before entering into the draft agreement, the President
was required to give Congress 90 days advance notice (120 days
for the Uruguay Round) to provide an opportunity for revision
before signature. After entering into the agreement, the
President was required to submit formally the draft agreement,
implementing legislation, and a statement of administrative
action. Once the bill was formally introduced, there was no
opportunity to amend any portion of the bill--whether on the
floor or in committee. Consequently, before the formal
introduction took place, the committees of jurisdiction would
hold hearings, ``unofficial'' or ``informal'' mark-up sessions
and a ``mock conference'' with the Senate committees of
jurisdiction in order to develop a draft implementing bill
together with the Administration and to make their concerns
known to the Administration before it introduced the
legislation formally.
After formal introduction of the implementing bill, the
House committees of jurisdiction had 45 legislative days to
report the bill, and the House was required to vote on the bill
within 15 legislative days after the measure was reported or
discharged from the committees. Fifteen additional days were
provided for Senate committee consideration (assuming the
implementing bill was a revenue bill), and the Senate floor
action was required within 15 additional days. Accordingly, the
maximum period for Congressional consideration of an
implementing bill from the date of introduction was 90
legislative days. Amendments to the legislation were not
permitted once the bill was introduced; the committee and floor
actions consisted of ``up or down'' votes on the bill as
introduced.
Finally, section 1103(d) of the 1988 Act specified that
the fast track rules were enacted as an exercise of the
rulemaking power of the House and the Senate, with the
recognition of the right of either House to change the rules at
any time.
House amendment
Under Section 2105 of the House amendment to H.R. 3009,
the President would be required, at least 90 days before
entering into an agreement, to notify Congress of his intent to
enter into the agreement. Section 2105(a) also would establish
a new requirement that the President, within 60 days of signing
an agreement, submit to Congress a preliminary list of existing
laws that he considers would be required to bring the United
States into compliance with agreement.
Section 2105(b) would provide that trade promotion
authority would not apply if both Houses separately agree to a
procedural disapproval resolution within any 60-day period
stating that the Administration failed to notify or consult
with Congress, which is defined as failing or refusing to
consult in accordance with section 2104 or 2105, failing to
develop or meet guidelines under section 2107(b), failure to
meet with the Congressional Oversight Group, or the agreement
fails to make progress in achieving the purposes. policies,
priorities, and objectives of the Act. In a change from the
expired law, such a resolution may be introduced by any Member
of the House or Senate. Only one such privileged resolution
would be permitted to be considered per trade agreement per
Congress.
Most of the remaining provisions are identical to the
expired law. Specifically, section 2105(a) would require the
President, after entering into agreement, to submit formally
the draft agreement, the implementing legislation, and a
statement of administrative action to Congress, and there would
be no time limit to do so, but with the new requirement that
the submission be made on a date on which both Houses are in
session. The procedures of section 151 of the Trade Act of 1974
would then apply. Specifically, on the same day as the
President formally submits the legislation, the bill would be
introduced (by request) by the Majority Leaders of the House
and the Senate. After formal introduction of the legislation,
the House Committees of jurisdiction would have 45 legislative
days to report the bill. The House would be required to vote on
the bill within 15 legislative days after the measure was
reported or discharged from the Committees. Fifteen additional
days would be provided for Senate Committee consideration
(assuming the implementing bill was a revenue bill), and Senate
floor action would be required within 15 additional days.
Accordingly, the maximum period for Congressional consideration
of the implementing bill from the date of introduction would be
90 legislative days.
As with the expired provisions, once the bill has been
formally introduced, no amendments would be permitted either in
Committee or floor action, and a straight ``up or down'' vote
would be required. Of course, before formal introduction, the
bill could be developed by the Committees of jurisdiction
together with the Administration during the informal Committee
mark-up process.
Finally, as with the expired provision, section 2105(c)
specifies that sections 2105(b) and 3(c) are enacted as an
exercise of the rulemaking power of the House and the Senate,
with the recognition of the right of either House to change the
rules at any time.
Senate amendment
The Senate Amendment is substantially similar to the
House Bill, with the following exception:
Reporting requirements. Section 2105(a)(1)(A)(ii)
requires the President to transmit to the House Ways and Means
Committee and the Senate Finance Committee the notification and
report described in section 2104(d)(3)(A) regarding changes to
U.S. trade remedy laws.
Disclosure Requirements. Section 2105(a)(4) of the Senate
bill specifies that any trade agreement or understanding with a
foreign government (oral or written) not disclosed to Congress
will not be considered part of trade agreement approved by
Congress and shall have no effect under U.S. law or in any
dispute settlement body.
Senate Procedures. Section 2105(b)(1)(C)(i)(II) provides
that any Member of the Senate may introduce a procedural
disapproval resolution, and that that resolution will be
referred to the Senate Finance Committee. Section
2105(b)(1)(C)(iv) provides that the Senate may not consider a
disapproval resolution that has not been reported by the Senate
Finance Committee.
Conference agreement
The Senate recedes to the House amendment with several
modifications. The Conferees agree to section 2105(a)(4) of the
Senate amendment, which specifies that any trade agreement or
understanding with a foreign government (oral or written) not
disclosed to Congress will not be considered part of trade
agreement approved by Congress and shall have no effect under
U.S. law or in any dispute settlement body, theConferees also
agree to sections 2105(b)(1)(C)(i)(II) and (b)(1)(C)(iv) of the Senate
amendment, which applies the same procedures for consideration of bills
in the Senate as for the House.
Finally, the Conferees agree to section 2105(b)(2) of the
Senate amendment with modifications, which requires the
Secretary of Commerce, in consultation with the Secretaries of
State and Treasury, the Attorney General, and the United States
Trade Representative, to transmit to Congress a report setting
forth the strategy of the executive branch to address concerns
of Congress regarding whether dispute settlement panels and the
Appellate Body of the WTO have added to obligations or
diminished rights of the United States, as described in section
2101(b)(3). Trade authorities procedures shall not apply to any
implementing bill with respect to an agreement negotiated under
the auspices of the WTO unless the Secretary of Commerce has
issued such report prior to December 31, 2002.
SEC. 2106--TREATMENT OF CERTAIN TRADE AGREEMENTS
Present/expired law
No provision.
House amendment
Section 2106 of the House amendment to H.R. 3009 exempts
agreements resulting from ongoing negotiations with Chile or
Singapore, an agreement establishing a Free Trade Area of the
Americas, and agreements concluded under the auspices of the
WTO from prenegotiation consultation requirements of section
2104(a) only. However, upon enactment of H.R. 3009, the
Administration is required to consult as to those elements set
forth in section 2104(a) as soon as feasible.
Senate amendment
Section 2106 of the Senate amendment is substantially
similar to the House bill.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2107--CONGRESSIONAL OVERSIGHT GROUP
Present/expired law
No provision.
House amendment
Section 2107 of the House amendment to H.R. 3009 would
require the Chairman of the Committee on Ways and Means and the
Chairman of the Committee on Finance to chair and convene,
sixty days after the effective date of this Act, the
Congressional Oversight Group. The Group would be comprised of
the following Members of the House: the Chairman and Ranking
Member of the Committee on Ways and Means and three additional
members of the Committee (not more than two of whom are from
the same party), and the Chairman and Ranking Member of the
Committees which would have, under the Rules of the House,
jurisdiction over provisions of law affected by a trade
negotiation. The Group would be comprised of the following
Members of the Senate: the Chairman and Ranking Member of the
Committee on Finance and three additional members of the
Committee (not more than two of whom are from the same party),
and the Chairman and Ranking Member of the Committees which
would have, under the Rules of the Senate, jurisdiction over
provisions of law affected by a trade negotiation.
Members are to be accredited as official advisors to the
U.S. delegation in the negotiations. USTR is to develop
guidelines to facilitate the useful and timely exchange of
information between USTR and the Group, including regular
briefings, access to pertinent documents, and the closest
possible coordination at all critical periods during the
negotiations, including at negotiation sites.
Finally, section 2107(c) provides that upon the request
of a majority of the Congressional Oversight Group, the
President shall meet with the Group before initiating
negotiations or at any other time concerning the negotiations.
Senate amendment
Section 2107 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2108--ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS
Present/expired law
No provision.
House amendment
Section 2108 of the House amendment to H.R. 3009 would
require the President to submit to the Congress a plan for
implementing and enforcing any trade agreement resulting from
this Act. The report is to be submitted simultaneously with the
text of the agreement and is to include a review of the
Executive Branch personnel needed to enforce the agreement as
well as an assessment of any U.S. Customs Service
infrastructure improvements required. The range of personnel to
be addressed in the report is very comprehensive, including
U.S. Customs and Department of Agriculture border inspectors,
and monitoring and implementing personnel at USTR, the
Departments of Agriculture, Commerce, and the Treasury, and any
other agencies as may be required.
Senate amendment
Section 2108 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2109--COMMITTEE STAFF
Present/expired law
No provision.
House amendment
Section 2109 of the House amendment to H.R. 3009 states
that the grant of trade promotion authority is likely to
increase the activities of the primary committees of
jurisdiction and the creation of the Congressional Oversight
Group under section 2107 will increase the participation of a
broader Members of Congress in the formulation of U.S. trade
policy and oversight of the U.S. trade agenda. The provision
specifies that the primary committees of jurisdiction should
have adequate staff to accommodate these increases in
activities.
Senate amendment
Section 2109 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2111--REPORT ON THE IMPACT OF TRADE PROMOTION AUTHORITY
Present/expired law
No provision.
House amendment
No provision.
Senate amendment
Section 2111 requires the International Trade Commission,
within one year following enactment of this Act, to issue a
report regarding the economic impact of the following trade
agreements: (1) The U.S.-Israel Free Trade Agreement; (2) the
U.S.-Canada Free Trade Agreement; (3) the North American Free
Trade Agreement (NAFTA); (4) The Uruguay Round Agreements,
which established the World Trade Organization; and (5) The
Tokyo Round of Multilateral Trade Negotiations.
Conference agreement
The House recedes to the Senate amendment.
SEC. 2112--SMALL BUSINESS
Present/expired law
No provision.
House amendment
No provision.
Senate amendment
WTO small business advocate. Section 2112(a) provides
that the U.S. Trade Representative shall pursue identification
of a small business advocate at the World Trade Organization
Secretariat to examine the impact of WTO agreements on the
interests of small businesses, address the concerns of small
businesses, and recommend ways to address those interests in
trade negotiations involving the WTO.
Assistant USTR responsible for small businesses. Section
2112(b) provides that the Assistant United States Trade
Representative for Industry and Telecommunications shall be
responsible for ensuring that the interests of small businesses
are considered in trade negotiations.
Conference agreement
The Senate recedes to the House amendment with a
modification. The Conferees agree to section 2112(b) of the
Senate amendment, which provides that the Assistant USTR for
Industry and Telecommunications will be responsible for
ensuring that the interests of small business are considered in
trade negotiations.
DIVISION C--ANDEAN TRADE PREFERENCE ACT
TITLE XXXI--ANDEAN TRADE PREFERENCE
SEC. 3101--SHORT TITLE
Present law
No provision.
House amendment
Section 3101 of H.R. 3009, as amended, provides that the
Act may be cited as the ``Andean Trade Promotion and Drug
Eradication Act.''
Senate amendment
Section 3101 provides that the Act may be cited as the
``Andean Trade Preference Expansion Act.''
Conference agreement
The Senate recedes.
SEC. 3102--FINDINGS
Present law
No provision.
House amendment
Section 1302 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.
Senate amendment
Section 3101 is identical.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 3103--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 beneficiariesunder 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.
House amendment
Section 3103(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.
Senate amendment
Section 3102 of the bill replaces the list of excluded
products under section 204(b) of the current ATPA with a new
provision that extends duty preferences to most of those
products. The new preferences take the form of exceptions to
the general rule that the excluded products are not eligible
for duty-free treatment.
The enhanced preferences are made available to ``ATPEA
beneficiary countries.'' Paragraph (5) of section 204(b) of the
ATPA as amended by the present bill defines ATPEA beneficiary
countries as those countries previously designated by the
President as ``beneficiary countries'' (i.e., Bolivia,
Colombia, Ecuador, and Peru) which subsequently are designated
by the President as ``ATPEA beneficiary countries,'' based on
the President's consideration of additional eligibility
criteria.
In the event that the President did not designate a
current ``beneficiary country'' as an ``ATPEA beneficiary
country,'' that country would remain eligible for ATPA benefits
under the law as expired on December 4, 2001, but would not be
eligible for the enhanced benefits provided under the present
bill.
Footwear not eligible for duty-free treatment under GSP
receives the same tariff treatment as like products from
Mexico, except that duties on articles in particular tariff
subheadings are to be reduced by \1/15\ per year.
The Senate Amendment provides special treatment for rum
and tafia, allowing them to receive the same tariff treatment
as like products from Mexico. The bill also allows certain
handbags, luggage, flat goods, work gloves, and leather wearing
apparel to receive the same tariff treatment as like products
from Mexico.
Under the bill, the President is authorized to proclaim
duty-free treatment for tuna that is harvested by United States
or ATPEA vessels, subject to a quantitative yearly cap of 20
percent of the domestic United States tuna pack in the
preceding year.
Conference agreement
Senate recedes on the authority of President to proclaim
duty-free treatment for particular 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.
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.
House recedes on the treatment of tuna with an amendment
to: (1) retain U.S. orAndean flagged vessel rule of origin
requirement in Senate amendment; (2) authorize the President to grant
duty-free treatment for Andean exports of tuna packed in flexible
(e.g., foil), airtight containers weighing with their contents not more
than 6.8 kg each; and (3) update calculation of current MFN tariff-rate
quota to be an amount based on 4.8 percent of apparent domestic
consumption of tuna in airtight containers rather than domestic
production.
Eligible Apparel Articles
Present law
Under the ATPA, apparel articles are on the list of
products excluded from eligibility for duty-free treatment.
House amendment
Under Section 3103, 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% of U.S. imports growing to
6% of U.S. imports in 2006, measured in square meter
equivalents.
Senate amendment
Paragraph (2) of section 204(b) of the ATPA as amended by
section 3102 of the present bill extends duty-free treatment to
certain textile and apparel articles from ATPEA beneficiary
countries. The provision divides articles eligible for this
treatment into several different categories and limits duty-
free treatment to a period defined as the ``transition
period.'' The transition period is defined in paragraph (5) of
section 204(b) of the ATPA as amended to be the period from
enactment of the present bill through the earlier of February
28, 2006 or establishment of a FTAA.
In general, the different categories of textile and
apparel articles eligible for duty free treatment are defined
according to the origin of the yarn and fabric from which the
articles are made. Under the first category, apparel sewn or
otherwise assembled in one or more ATPEA beneficiary countries
is eligible for duty-free treatment if it is made exclusively
from one or a combination of several sub-categories of
components, as follows:
(1) United States fabric, fabric components, or
knit-to-shape components, made from yarns wholly formed
in the United States;
(2) A combination of both United States and ATPEA
beneficiary country components knit-to-shape from yarns
wholly formed in the United States;
(3) ATPEA beneficiary country fabric, fabric
components, or knit-to-shape components, made from
yarns wholly formed in one or more ATPEA beneficiary
countries, if the constituent fibers are primarily
llama or alpaca hair; and
(4) Fabrics or yarns, regardless of origin, if such
fabrics or yarns have been deemed, under the North
American Free Trade Agreement, not to be widely
available in commercial quantities in the United
States. A separate provision of section 204(b) of the
ATPA as amended by the present bill sets forth a
process for interested parties to petition the
President for inclusion of additional yarns and fabrics
in the ``short supply'' list. This process includes
obtaining advice from the United States International
Trade Commission and industry advisory groups, and
consultation with the Committee on Finance of the
Senate and the Committee on Ways and Means of the House
of Representatives.
A second category of apparel articles eligible for duty-
free treatment is apparel articles knit-to-shape (except socks)
in one or more ATPEA beneficiary countries from yarns wholly
formed in the United States. To qualify under this category,
the entire articlemust be knit-to-shape--as opposed to being
assembled from components that are themselves knit-to-shape.
A third category of apparel articles eligible for duty-
free treatment is apparel articles wholly assembled in one or
more ATPEA beneficiary countries from fabric or fabric
components knit, or components knit-to-shape in one or more
ATPEA beneficiary countries from yarns wholly formed in the
United States. The quantity of apparel eligible for this
benefit is subject to an annual cap. The cap is set at 70
million square meter equivalents for the one-year period
beginning March 1, 2002. The cap will increase by 16 percent,
compounded annually, in each succeeding one-year period,
through February 28, 2006.
Thus, the cap applied to this category in each year
following enactment will be as follows:
70 million square meter equivalents (SME) in the
year beginning March 1, 2002;
81.2 million SME in the year beginning March 1,
2003;
94.19 million SME in the year beginning March 1,
2004; and
109.26 million SME in the year beginning March 1,
2005.
A separate provision makes clear that goods otherwise
qualifying under the latter category will not be disqualified
if they happen to contain United States fabric made from United
States yarn.
A fourth category of apparel eligible for duty-free
treatment under the Senate bill is brassieres that are cut or
sewn, or otherwise assembled, in one or more ATPEA beneficiary
countries, or in such countries and the United States. This
separate category requires that, in the aggregate, brassieres
manufactured by a given producer claiming duty-free treatment
for such products contain certain quantities of United States
fabric.
A fifth category of textile and apparel eligible for
duty-free treatment is handloomed, handmade, and folklore
articles.
A final category of textile and apparel goods eligible
for duty-free treatment is textile luggage assembled in an
ATPEA beneficiary country from fabric and yarns formed in the
United States.
In addition to the foregoing categories, the bill sets
forth special rules for determining whether particular textile
and apparel articles qualify for duty-free treatment.
Conference agreement
In general the conferees agreed to follow the House
amendment on apparel provisions with the exception that the
House receded to the Senate on the treatment of textile
luggage. With respect to category 2 in the House bill relating
to 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 are in
chief weight of llama, or alpaca, conferees agreed to include
vicuna and calculate product eligibility based on chief value
instead of chief weight. Also, conferees agreed to cap imports
of apparel made from regional fabric and regional yarn
(category 4 in the House bill) at 2% of U.S. imports growing to
5% of U.S. imports in 2006, measured in square meter
equivalents.
It is the intention of the conferees that in cases where
fabrics or yarns determined by the President to be in short
supply impart the essential character to an article, the
remaining textile components may be constructed of fabrics or
yarns regardless of origin, as in Annex 401 of the NAFTA. In
cases where the fabrics or yarns determined by the President to
be in short supply do not impart the essential character of the
article, the article shall not be ineligible for preferential
treatment under this Act because the article contains the short
supply fabric or yarn.
Special Origin Rule for Nylon Filament Yarn
House amendment
No provision.
Senate amendment
Articles otherwise eligible for duty-free treatment and
quota free treatment under the bill are not ineligible because
they contain certain nylon filament yarn (other than
elastomeric yarn) from a country that had an FTA with the U.S.
in force prior to January 1, 1995.
Conference agreement
House recedes.
Dyeing, Finishing and Printing Requirement
House amendment
New requirement that apparel made of U.S. knit or woven
fabric assembled in CBTPA country qualifies for benefits only
if the U.S. knit or woven fabric is dyed and finished in the
United States. Apparel made of U.S. knit or woven fabric
assembled in an Andean beneficiary country qualifies for
benefits only if the U.S. knit or woven fabric is dyed and
finished in the United States.
Senate provision
No provision.
Conference agreement
Senate recedes.
Penalties for Transshipment
Present law
The Tariff Act of 1930, as amended, provides for civil
monetary penalties for unlawful transshipment. These include
penalties under 19 U.S.C. 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.
House amendment
Section 3103 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.
Senate amendment
In amending section 204(b) of the ATPA, section 3102 of
the present bill provides special penalties for transshipment
of textile and apparel articles from an ATPEA beneficiary
country. Transshipment is defined as claiming duty-free
treatment for textile and apparel imports on the basis of
materially false information. An exporter found to have engaged
in such transshipment (or a successor of such exporter) shall
be denied all benefits under the ATPA for a period of two
years.
The bill further provides penalties for an ATPEA
beneficiary country that fails to cooperate with the United
States in efforts to prevent transshipment. Where textile and
apparel articles from such country are subject to quotas on
importation into the United States consistent with WTO rules,
the President must reduce the quantity of such articles that
may be imported into the United States by three times the
quantity of transshipped articles, to the extent consistent
with WTO rules.
Conference agreement
Conference agreement follows House and Senate bill.
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.
House amendment
Under Section 3103 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.
Senate amendment
The bill establishes similar textile and apparel
safeguard provisions based on the NAFTA textile and apparel
safeguard provision.
Conference agreement
Conference Agreement follows House and Senate bill.
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-freetreatment on any article if he determines
the country should be barred from designation as a 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
House amendment
The House amendment 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 fights;
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.
Senate amendment
Section 3102(5) contains identical provisions.
Conference agreement
Conference Agreement follows the House and Senate
amendments. In evaluating a potential beneficiary's compliance
with its WTO obligations, the conferees expect the President to
take into 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 Conferees intent 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.
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 Conferees'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
Conferees 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% common external tariff to imported
pet food.
With respect to whether beneficiary countries are
following established WTO rules, the Conferees believe it is
important for Andean governments to provide transparent and
non-discriminatory regulatory procedures. Unfortunately, the
Conferees know of instances where regulatory policies in Andean
countries are opaque, unpredictable, and arbritarily applied.
As such, it is the Conferees' 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.
Determination Regarding Retention of Designation
Present law
Under Section 203(e) of the ATPA, the President may
withdraw or suspend a country's beneficiary country
designation, or withdraw, suspend, or limit the application of
duty-free treatment to particular articles of a beneficiary
country, due to changed circumstances.
House amendment
Section 3102(b) amends section 203(e) of the ATPA to
provide that the President may withdraw or suspend ATPA
designation, or withdraw, suspend or limit benefits if a
country's performance under eligibility criteria are no longer
satisfactory.
Senate amendment
Identical.
Conference agreement
Conference agreement follows the House amendment and
Senate amendment.
Reporting Requirements
Present law
Provides for: (1) an annual report by the International
Trade Commission on the economic impact of the bill and; (2) an
annual report by the Secretary of Labor on the impact of the
bill with respect to U.S. labor. Also under present law, USTR
is required to report triannually on operation of the program.
House amendment
Retains current law on reports.
Senate amendment
Senate bill requires same ITC and Labor reports as well
as an annual report by the Customs Service on compliance and
anti-circumvention on the part of beneficiary countries in the
area of textile and apparel trade. It also requires USTR to
report biannually on operation of the program.
Conference agreement
House recedes.
Petitions for review
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 3102(e) of the bill directs the President to
promulgate regulations regarding the review of eligibility of
articles and countries under the ATPA. Such regulations are to
be similar to regulations governing the Generalized System of
Preferences petition process.
Conference agreement
House recedes.
SECTION 3104--TERMINATION OF DUTY-FREE TREATMENT
Present law
Duty-free treatment under the ATPA expires on December 4,
2001.
House amendment
Duty-free treatment terminates under the Act on December
31, 2006.
Senate amendment
Section 3103 of the bill amends section 208(b) of the
ATPA to provide for a termination date of February 28, 2006.
Basic ATPA benefits apply retroactively to December 4, 2001.
Conference agreement
House recedes on retroactivity for basic ATPA benefits;
Senate recedes on termination.
SECTION 3106--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.
House amendment
Sec. 3106 and 3107 of the House bill amends AGOA and
CBTPA to clarify that preferential treatment is provided to
knit-to-shape apparel articles assembled in beneficiary
countries.
Senate amendment
No provision.
Conference agreement
Senate recedes.
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'').
House amendment
Sec. 3107 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.
Senate amendment
No provision.
Conference agreement
Senate recedes.
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% per year for first 3 years.
House amendment
Sec. 3106 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.
Senate amendment
No provision.
Conference agreement
Senate recedes.
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% per year for the first 3 years.
House amendment
Section 3106 of H.R. 3006 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; 10,000,000 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.
Senate amendment
No provision.
Conference agreement
Senate recedes.
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.
House amendment
Section 3107 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. The House
amendment 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.
Senate amendment
No provision.
Conference agreement
Conference agreement follows House Amendment accept the
increase in the cap is limited to apparel products made with
regional or U.S. fabric and yarn. No increases in amounts of
apparel made of third-country fabric over current law.
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.
House amendment
Section 3107 corrects the yarn diameter in the AGOA
legislation so that sweaters knit to shape from merino wool of
a specific diameter are eligible.
Senate amendment
No provision.
Conferce agreement
Senate recedes.
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 transitionperiod under the AGOA
regional fabric country cap.
House amendment
Section 5 allows Namibia and Botswana to use third
country fabric for the transition period under the AGOA
regional fabric country cap.
Senate amendment
No provision.
Conference agreement
Senate recedes.
TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
SEC. 4101--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
Expired law
Section 505 of the Trade Act of 1974, as amended,
provides that no duty-free treatment under Title V (the
Generalized System of Preferences) shall remain in effect after
September 30, 2001.
House bill
The House amendment to H.R. 3009 would amend section 505
of the Trade Act of 1974 to authorize an extension through
December 31, 2002. It would also provide retroactive relief in
that, notwithstanding section 514 of the Tariff Act of 1930 or
any other provision of law, the entry of any article to which
duty-free treatment under Title V of the Trade Act of 1974
would have applied if the entry had been made on September 30.
2001, and was made after September 30, 2001, and before the
enactment of this Act, shall be liquidated or reliquidated as
free of duty and the Secretary of Treasury shall refund any
duty paid, upon proper request filed with the appropriate
Customs officer, within 180 days after the date of enactment.
Senate amendment
The Senate amendment authorizes an extension of GSP
through December 31, 2006. The extension is retroactive to
September 30, 2001, permitting importers to liquidate or
reliquidate entries made since that date and to seek a return
of duties paid on goods that would have entered the United
States free of duty, but for expiration of GSP.
The Senate amendment also amends the definition of
``internationally recognized worker rights'' set forth in the
GSP statute (section 507(4) of the Trade Act of 1974).
Specifically, it adds to that definition ``a prohibition on
discrimination with respect to employment and occupation'' and
a ``prohibition of the worst forms of child labor.'' These two
prohibitions come from the International Labor Organization's
1998 Declaration on Fundamental Principles and Rights at Work,
which defines certain worker rights as ``fundamental.''
The GSP statute identifies certain criteria that the
President must take into account in determining whether to
designate a country as eligible for GSP benefits. Conversely, a
country's lapse in compliance with one or more of these
criteria may be grounds for withdrawal, suspension, or
limitation of benefits. Whether a country is taking steps to
afford its workers internationally recognized worker rights is
one of those criteria. The Senate Amendment seeks to make the
concept of ``internationally recognized worker rights'' as
defined for GSP consistent with the concept as defined by the
ILO.
Finally, the Senate Amendment establishes a new
eligibility criterion for GSP: ``A country is ineligible for
GSP if it has not taken steps to support the efforts of the
United States to combat terrorism.''
Conference agreement
The Conference agreement authorizes an extension of GSP
through December 31, 2006. Conferees approved the Senate
provision to include a prohibition on the worst forms of child
labor in the definition of internationally recognized worker
rights in Section 507(a) of the Trade Act of 1974. Conferees
declined to include the Senate provision on discrimination with
respect to employment in the definition of ``international
recognized worker rights under Sec. 507(a) of the Trade Act of
1974. Agreement follows the House and the Senate bill with
respect to providing retroactive relief.
DIVISION E--MISCELLANEOUS PROVISIONS
TITLE L--MISCELLANEOUS TRADE BENEFITS
Subtitle A--Wool Provisions
SEC. 5101--WOOL MANUFACTURER PAYMENT CLARIFICATION AND TECHNICAL
CORRECTIONS ACT
Present law
Title V of the Trade and Development Act of 2000 (Pub. L.
No. 106-200) included certain tariff relief for the domestic
tailored clothing and textile industries. The relief was
largely aimed at reducing the harmful affects of a ``tariff
inversion''--i.e., a tariff structure that levies higher duties
on the raw material (such as wool fabric) than on the finished
goods (such as mens' suits). A component of the relief to the
U.S. tailored clothing and textile industry was a refund of
duties paid in calendar year 1999, spread out over calendar
years 2000, 2001 and 2002. Pub. L. No. 106-2000, Sec. 505.
House amendment
No provision.
Senate amendment
The Senate bill amends section 505 of the Trade and
Development Act of 2000 to simplify the process for refunding
to eligible parties duties paid in 1999. Specifically, it
creates three special refund pools for each of the affected
wool articles (fabric, yarn, and fiber and top). Refunds for
importing manufacturers will be distributed in three
installments--the first and second on or before the date that
is 45 days after the date of enactment of the Wool Manufacturer
Payment and Clarification and Technical Corrections Act, and
the third on or before April 15, 2003. Refunds for nonimporting
manufacturers will be distributed in two installments--the
first on or before the date that is 120 days after the date of
enactment of the Wool Manufacturer Payment Clarification and
Technical Corrections Act, and the second on or before April
15, 2003.
The provision also streamlines the paperwork process, in
light of the destruction of previously filed claims and
supporting information in the September 11, 2001 attacks on the
World Trade Center in New York, New York. Finally, the
provision identifies all persons eligible for the refunds.
Conference agreement
The House recedes to the Senate.
SEC. 5102--DUTY SUSPENSION ON WOOL
Present law
Sections 501(a) and (b) of the Trade and Development Act
of 2000 provide temporary duty reductions for certain worsted
wool fabrics through 2003.
Section 501(d) limits the aggregate quantity of worsted
wool fabrics entered under heading 9902.51.11 from January 1 to
December 31 of each year, inclusive, to 2,500,000 square meter
equivalents, or such other quantity proclaimed by the President
pursuant to section 504(b)(3) of the Trade and Development Act.
Further, the section limits the aggregate quantity of worsted
wool fabrics entered under heading 9902.51.12 from January 1 to
December 31 of each year, inclusive, to 1,500,000 square meter
equivalents, or such other quantity proclaimed by the President
pursuant to section 504(b)(3) of the Trade and Development Act.
House amendment
No provision.
Senate bill
The Senate bill extends the temporary duty reductions on
fabrics of worsted wool from 2003 to 2005. The provision
increases the limitation on the quantity of imports of worsted
wool fabrics entered under heading 9902.51.11 to 3,500,000
square meter equivalents in calendar year 2002, and 4,500,000
square meter equivalents in calendar year 2003. Imports of
worsted wool fabrics entered under heading 9902.51.12 are
increased to 2,500,000 square meter equivalents in calendar
year 2002, and 3,500,000 square meter equivalents in calendar
year 2003.
The bill extends the payments made to manufacturers under
section 505 of the Trade and Development Act of 2000 and
requires an affidavit that the manufacturer will remain a
manufacturer in the United States as of January 1 of the year
of payment. The two additional payments will occur as follows:
the first to be made after January 1, 2004, but on or before
April 15, 2004, and the second after January 1, 2005, but on or
before April 15, 2005.
Finally, the bill extends the ``Wool Research Trust
Fund'' for two years through 2006.
Conference agreement
The House recedes to the Senate.
Subtitle B--Other Provisions
SEC. 5201--FUND FOR WTO DISPUTE SETTLEMENT
Present law
No applicable section.
House amendment
The provision authorizes a settlement fund within the
United States Trade Representative's Office in the amount of
$50 million for the use in settling disputes that occur related
to the World Trade Organization. The Trade Representative must
certify to the Secretary of the Treasury that the settlement is
in the best interest of the United States in cases of not more
than $10 million. For cases above $10 million, the Trade
Representative must make the same certification to the United
States Congress.
Senate bill
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 5202--CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN
NUCLEAR FACILITIES
Present law
Under present law, certain steam or other vapor
generating boilers used in nuclear facilities imported into the
United States prior to December 31, 2003 are charged a duty
rate of 4.9 percent ad valorem. This rate took effect pursuant
to section 1268 of Public Law Number 106-476 (``Tariff
Suspension and Trade Act of 2000''). Previously, the rate had
been 5.2 percent ad valorem.
House amendment
No provision.
Senate amendment
Section 203 of the Senate amendment chances the duty rate
on certain steam or other vapor generating boilers used in
nuclear facilities to zero for such goods entered, or withdrawn
from warehouse for consumption, on or after January 1, 2002,
and on or before December 31, 2006. The provision was intended
to lower the cost of inputs into the operation of nuclear
facilities and thereby lower the cost of energy to consumers.
Committee agreement
The House recedes to the Senate.
SEC. 5203--SUGAR TARIFF RATE QUOTA CIRCUMVENTION
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate bill establishes a sugar anti-circumvention
program which requires the Secretary of Agriculture to identify
imports of articles that are circumventing tariff rate quotas
on sugars, syrups, or sugar-containing products imposed under
chapters 17, 18, 19, and 21 of the Harmonized Tariff Schedule.
The Secretary shall then report to the President articles found
to be circumventing such tariff-rate quotas. Upon receiving the
Secretary's report, the President shall, by proclamation,
include any identified article in the appropriate tariff-rate
quota provision of the Harmonized Tariff Schedule.
Conference agreement
Conferees agreed to a provision directing the Secretary
of Agriculture and the Commissioner of Customs shall monitor
for sugar circumvention and shall report and make
recommendations to Congress and the President.
This provision amends the Harmonized Tariff Schedule of
the United States (``HTSUS'') to make clear in the statute an
important element of the ruling of the Court of Appeals for the
Federal Circuit in Heartland By-Products, Inc. v. United
States, 264 F. 3rd 1126 (Fed. Cir. 2001), i.e., that molasses
is one of the foreign substances that must be excluded when
calculating the percentage of soluble non-sugar solids under
subheading 1702.90.40.
The provision requires the Secretary of Agriculture and
the Commissioner of Customs to establish a monitoring program
to identify existing or likely circumvention of the tariff-rate
quotas in Chapters 17, 18, 19 and 21 of the HTSUS. The
Secretary and the Commissioner shall report the results of
their monitoring to Congress and the President every six
months, together with data and a description of developments
and trends in the composition of trade provided for in such
chapters. This report will be made public. The report will
discuss any indications that imports of articles not subject to
the tariff-rate quotas are being used for commercial extraction
of sugar in the United States. Imports of so-called ``high-test
molasses'' currently classified under subheading 1703.10.30
will be examined particularly closely for such indications.
Finally, the Secretary and the Commissioner will include
in the report their recommendations for ending circumvention,
including their recommendations for legislation. The Managers
emphasize that rapid action to stop circumvention is the best
way to prevent a problem from developing and that quick
administrative or legislative action is preferable to
protracted procedures and litigation, as occurred in the
Heartland case.
DIVISION A--TRADE ADJUSTMENT ASSISTANCE
SEC. 101--SHORT TITLE
Present law
No provision.
House amendment
Section 101 of H.R. 3009 provides that Division A of the
Act may be cited as the ``Trade Adjustment Assistance Reform
Act of 2002.''
Senate amendment
Section 101 of H.R. 3009 provides that Division A of the
Act may be cited as the ``Trade Adjustment Assistance Reform
Act of 2002.''
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
TITLE I--TRADE ADJUSTMENT ASSISTANCE PROGRAM
Subtitle A--Trade Adjustment Assistance for Workers
SEC. 111--REAUTHORIZATION OF THE TRADE ADJUSTMENT ASSISTANCE PROGRAM
Present law
Current section 245 authorizes to be appropriated to the
Department of Labor such sums as may be necessary to carry out
the purposes of the TAA and NAFTA-TAA for workers programs for
the period October 1, 1998 through September 30, 2001. Current
section 285 provides for termination of all Trade Adjustment
Assistance programs on September 30, 2001, but provides that
workers, and firms eligible to receive benefits on or before
that date shall continue to be eligible to receive such
benefits as though the programs were in effect.
House amendment
The House Amendment reauthorized the Trade Adjustment
Assistance programs through September 30, 2004.
Senate amendment
Section 111 of the Senate bill creates a new section 248
of the Trade Act of 1974 which authorizes to be appropriated to
the Department of Labor such sums as may be necessary to carry
out the purposes of the Trade Adjustment Assistance for workers
program for the period October 1, 2001, through September 30,
2007. Section 701 of the Senate bill amends current section 285
to provide for termination of all Trade Adjustment Assistance
programs on September 30, 2007, but provides that workers, and
firms, communities, farmers, and fishermen eligible to receive
benefits on or before that date shall continue to be eligible
to receive such benefits as though the programs were in effect.
Conference agreement
Conferees agree to extend the authorization of the Trade
Adjustment Assistance programs through September 30, 2007, and
to consolidate the NAFTA-TAA program with the regular TAA
program.
SEC. 112--FILING OF PETITIONS AND PROVISION OF RAPID RESPONSE
ASSISTANCE; EXPEDITED REVIEW OF PETITIONS BY SECRETARY OF LABOR
Present law
Current sections 221 and 250 set forth requirements
concerning who may file a petition for certification of
eligibility to apply for TAA and NAFTA-TAA assistance,
respectively. Under both programs, petitions may be filed by a
group of workers or by their certified or recognized union or
other duly authorized representative. TAA petitions are filed
with the Secretary of Labor. NAFTA-TAA petitions are filed with
the Governor of the relevant State and forwarded by him to the
Secretary of Labor. Under section 223, the Secretary of Labor
must rule on eligibility within 60 days after a TAA petition is
filed. Under section 250, the Governor must make a preliminary
eligibility determination within 10 days after a NAFTA-TAA
petition is filed, and the Secretary of Labor must make a final
eligibility determination within the next 30 days. Section 221
also sets forth notice and hearing obligations of the Secretary
of Labor upon receipt of a TAA petition. Section 250 provides
that, in the event of preliminary certification of eligibility
to apply for NAFTA-TAA benefits, the Governor immediately
provide the affected workers with certain rapid response
services.
House amendment
The House Amendment provided for a shortened period for
the Secretary of Labor to consider petitions from 60 days to 40
days and for other rapid response assistance toworkers.
Senate amendment
Section 111 of the Senate bill creates a new section 231
of the Trade Act of 1974, which consolidates the TAA and NAFTA-
TAA programs by establishing a single program with a single set
of group eligibility criteria and a single set of procedures
and standards for filing and reviewing petitions, certifying
eligibility, and terminating certifications of eligibility.
Section 231 expands the list of entities that may file a
petition for group certification of eligibility to include
employers, one-stop operators or one-stop partners, State
employment agencies, and any entity to which notice of a plant
closing or mass layoff must be given under section 3 of the
Worker Adjustment and Retraining Notification Act. Section 231
also provides that the President, or the Committee on Finance
of the Senate or the Committee on Ways and Means of the House
of Representatives (by resolution), may direct the Secretary of
Labor to initiate a certification process under this chapter to
determine the eligibility for Trade Adjustment Assistance of a
group of workers.
Section 231 creates a single process for filing and
reviewing petitions for Trade Adjustment Assistance for
workers, under which all petitions are filed with both the
Secretary of Labor and the Governor of the State. Upon filing
of the petition, the Governor is required to fulfill the
requirements of any agreement entered into with the Department
of Labor under section 222, to provide certain rapid response
services, and to notify workers on whose behalf a petition has
been filed of their potential eligibility for certain existing
federal health care, child care, transportation, and other
assistance programs. Upon filing the petition, the Secretary of
Labor must make his certification determination within 40 days
and provide the notice required.
Conference agreement
The Senate recedes to the House with a change providing
for simultaneous filing of petitions with the Secretary of
Labor and State Governor.
SEC. 113--GROUP ELIGIBILITY REQUIREMENTS
Present law
Current law sections 222 and 250 of Title 11 of the Trade
Act of 1974 set forth group eligibility criteria. Under TAA,
the Secretary must certify a group of workers as eligible to
apply for Trade Adjustment Assistance if he determines (1) that
a significant number or proportion of the workers in such
workers' firm have become or are threatened to become totally
or partially separated; (2) sales or production of such firm
have decreased absolutely; and (3) imports of articles like or
directly competitive with articles produced by such workers'
firm contributed importantly to the total or partial separation
or threat thereof, and to the decline in sales or production.
Under NAFTA-TAA, group eligibility may be based on the same
criteria set forth in section 222, but section 250 also
provides for NAFTA-TAA eligibility where there has been a shift
in production by the workers' firm to Mexico or Canada of
articles like or directly competitive with articles which are
produced by the firm. Section 222 also includes special
eligibility provisions with respect to oil and natural gas
producers.
House amendment
The House Amendment at Section 113 expanded the Trade
Adjustment Assistance programs to secondary workers that are
suppliers to firms that were certified and which satisfied
certain conditions.
Senate amendment
Section 111 of the Senate Amendment creates a new section
231 under which the eligibility criteria are revised. First,
workers are eligible for TAA if the value or volume of imports
of articles like or directly competitive with articles produced
by that firm have increased and the increase in the value or
volume of imports contributed importantly to the workers'
separation or threat of separation. Second, eligibility is
extended to workers who are separated due to shifts in
production to any country, rather than only when the shift in
production is to Mexico or Canada. Third, eligibility is
extended to adversely affected secondary workers. Eligible
secondary workers include workers in supplier firms and, with
respect to trade with NAFTA countries, downstream firms.
Fourth, a new special eligibility provision is added with
respect to taconite pellets.
Conference agreement
The Conferees agree to extend coverage of Trade
Adjustment Assistance to new categories of workers: (1)
secondary workers that supply directly to another firm
component parts for articles that were the basis for a
certification of eligibility, (2) downstream workers that were
affected by trade with Mexico or Canada, and (3) certain
workers that have been laid off because their firm has shifted
its production to another country that has a free trade
agreement with the United States, that has a unilaterally
preferential trading arrangement with the United States, or
when there has been or is likely to be an increase in imports
of the relevant articles.
SEC. 114--QUALIFYING REQUIREMENTS FOR TRADE READJUSTMENT ALLOWANCES
Present law
Current section 231 establishes qualifying requirements
that must be met in orderfor an individual worker within a
certified group to receive Trade Adjustment Assistance. In order to
receive trade readjustment allowances, a certified worker must have
been separated on or after the eligibility date established in the
certification but within 2 years of the date of the certification
determination; been employed for at least 26 of the 52 weeks preceding
the separation at wages of $30 or more a week; be eligible for and have
exhausted unemployment insurance benefits; not be disqualified for
extended compensation payable under the Federal-State Extended
Unemployment Compensation Act of 1970 by reason of the work acceptance
and job search requirements in section 202(a)(3) of that Act; and be
enrolled in a training program approved by the Secretary of Labor or
have received a training waiver.
House amendment
The House Amendment at Section 114 provided for
requirements and deadlines for workers to enroll in training.
Senate amendment
Section 111 of the Senate Amendment adds a new section
235 which maintains the individual eligibility requirements in
current law, with the exception of revisions to provisions
governing bases for granting training waivers.
Conference agreement
The Senate recedes to the House, with a change to adopt a
training enrollment deadline of 16 weeks after separation.
SEC. 115--WAIVERS OF TRAINING REQUIREMENTS
Present law
Section 231 sets forth permissible bases for granting a
training waiver. Pursuant to section 250(d), training waivers
are not available in the NAFTA-TAA program.
House amendment
The House Amendment provides that all workers who are
eligible to apply for Trade Adjustment Assistance may be
considered for training waivers and codifies several bases on
which the Secretary may grant a waiver.
Senate amendment
Section 111 of the Senate Amendment adds a new section
235 which provides that all workers who are eligible to apply
for Trade Adjustment Assistance may be considered for training
waivers and codifies several bases on which the Secretary may
grant a waiver.
Conference agreement
The House receded to the Senate with a change to delete
the Senate provision giving the Secretary discretion to grant
waivers for ``other'' reasons.
SEC. 116--AMENDMENTS TO LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES
Present law
Current section 233 provides that each certified worker
may receive trade readjustment allowances for a maximum of 52
weeks. Current law also provides that, in most circumstances, a
worker is treated as participating in training during any week
which is part of a break in training that does not exceed 14
days.
House amendment
Section 116 of the House Amendment would add 26 weeks of
trade adjustment allowances for those workers who were in
training and required the extension of benefits for the purpose
of completing training.
Senate amendment
Section 111 of the Senate Amendment adds a new section
237 which increases the maximum time period during which a
worker may receive trade adjustment allowances to 78 weeks,
extends the permissible duration of a break in training to 30
days, and provides for an additional 26 weeks of income support
for workers requiring remedial education. Section 237 also
clarifies that the requirement that a worker exhaust
unemployment insurance benefits prior to receiving trade
adjustment allowances does not apply to any extension of
unemployment insurance by a State using its own funds that
extends beyond either the 26 week period mandated by Federal
law or any additional period provided for under the Federal-
State Extended Unemployment Compensation Act of 1970 (26 U.S.C.
3304 note).
Conference agreement
The Senate recedes to the House.
SEC. 117--ANNUAL TOTAL AMOUNT OF PAYMENTS FOR TRAINING
Present law
Current section 236 establishes the terms and conditions
under which training isavailable to eligible workers; permits
the Secretary of Labor to approve certain specified types of training
programs and to pay the costs of approved training and certain
supplemental costs, including subsistence and transportation costs, for
eligible workers; and caps total annual funding for training under the
TAA for workers program at $80 million. Section 250 separately caps
training expenditures under the NAFTA-TAA program at $30 million
annually.
House amendment
The House provided $30 million additional funds for the
Trade Adjustment Assistance program. Combined with NAFTA Trade
Adjustment Assistance, the total training funds available were
$140 million.
Senate amendment
Section 111 of the Senate Amendment adds a new section
240 which sets the total funds available for training
expenditures under the unified TAA for workers program to $300
million annually.
Conference agreement
Conferees agreed to a combined training cap of $220
million for Trade Adjustment Assistance training.
SEC. 118--PROVISION OF EMPLOYER-BASED TRAINING
Present law
No applicable section.
House amendment
The House Amendment included provisions related to
employer based training including on-the-job training and
customized training with partial reimbursements provided to the
employer.
Senate amendment
Section 111 of the Senate Amendment adds a new section
240 which revises the list of training programs which the
Secretary may approve to include customized training. It also
adds a new section 237, which clarifies that the prohibition on
payment of trade adjustment allowances to a worker receiving
on-the-job training does not apply to a worker receiving on-
the-job training does not apply to worker enrolled in a non-
paid customized training program.
Conference agreement
The Senate recedes to the House.
SEC. 119--COORDINATION WITH TITLE I OF THE WORKFORCE INVESTMENT ACT OF
1998
Present law
No provision.
House amendment
The House Amendment provided multiple provisions related
to coordinating efforts under the Trade Adjustment Assistance
programs to provide information and benefits to workers under
the Workforce Investment Act.
Senate amendment
No provision.
Conference agreement
Conferees agreed to drop House language with the
exception of a provision related to coordinating the delivery
of Trade Adjustment Assistance benefits and information at one-
stop delivery systems under the Workforce Investment Act.
SEC. 120--EXPENDITURE PERIOD
Present law
No provision.
House amendment
The House amendment provided that certain funds obligated
for any fiscal year to carry out activities may be expended by
each State in the succeeding two fiscal years.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 121--JOB SEARCH ALLOWANCES
Present law
Under current section 237, when the Secretary of Labor
determines that local employment is not available, an adversely
affected worker certified eligible for TAA benefits may receive
reimbursement of 90 percent of the cost of necessary job search
expenses up to $800.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section
241 which raises the maximum reimbursement for job search
expenses to $1250 per worker.
Conference agreement
The House recedes to the Senate.
SEC. 122--RELOCATION ALLOWANCES
Present law
Under current section 238, when the Secretary of Labor
determines that local employment is not available, an adversely
affected worker certified eligible for TAA benefits may receive
a relocation allowance consisting of (1) 90 percent of the
reasonable and necessary expenses incurred in transporting a
worker and his family, if any, and household effects, and (2) a
lump sum equivalent to three times the worker's average weekly
wage, up to a maximum payment of $800.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section
242 which raises themaximum lump sum portion of the relocation
allowance to $1,250.
Conference agreement
The House recedes to the Senate.
SEC. 123--REPEAL OF NAFTA TRANSITIONAL ADJUSTMENT ASSISTANCE PROGRAM
Present law
Current law authorizes a Trade Adjustment Assistance
Program for workers affected by NAFTA trade.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section
231 which combines the TAA and NAFTA-TAA programs, establishing
a single program with a single set of group eligibility
criteria and a single set of procedures and standards for
filing and reviewing petitions, certifying eligibility, and
terminating certification of eligibility.
Conference agreement
The House recedes to the Senate to the extent of
repealing the NAFTA Trade Adjustment Assistance program and
creating a single, unified TAA program for workers.
SEC. 124--DEMONSTRATION PROJECT FOR ALTERNATIVE TRADE ADJUSTMENT
ASSISTANCE FOR OLDER WORKERS
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 111 of the Senate Amendment adds a new section
243 which directs the Secretary of Labor, within one year of
enactment, to establish a two-year wage insurance pilot program
under which a State uses the funds provided to the State for
Trade Adjustment allowances to pay to an adversely affected
worker certified under section 231, for a period not to exceed
two years, a wage subsidy of up to 50 percent of the difference
between the wages received by the adversely affected worker
from reemployment and the wages received by the adversely
affected worker at the time of separation. An adversely
affected worker may be eligible to receive a wage subsidy if
the worker obtains reemployment not more than 26 weeks after
the date of separation from the adversely affected employment,
is at least 50 years of age, earns not more than $50,000 a year
in wages from reemployment, is employed at least 30 hours a
week in the reemployment, and does not return to the employment
from which the worker was separated. The wage subsidy available
to workers in the wage insurance program is 50 percent of the
difference between the amount of the wages received by the
worker from reemployment and the amount of the wages received
by the worker at the time of separation, if the wages the
worker receives from reemployment are less than $40,000 a year.
The wage subsidy is 25 percent if the wages received by the
worker from reemployment are greater than $40,000 a year but
not more than $50,000 a year. Total payments made to an
adversely affected worker under the wage insurance program may
not exceed $5,000 in each year of the 2-year period. A worker
participating in the wage insurance program is not eligible to
receive any other Trade Adjustment Assistance benefits, unless
the Secretary of Labor determines that the worker has shown
circumstances that warrant eligibility for training benefits
under section 240.
Conference agreement
The Conferees agree to create a new alternative Trade
Adjustment Assistance program for older workers.
SEC. 125--DECLARATIONS OF POLICY; SENSE OF CONGRESS
Present law
No provision.
House amendment
The House passed amendment included a declaration of
policy and Sense of the Congress related to the responsibility
of the Secretary of Labor to provide information to workers
related to benefits available to them under the TAA and other
federal programs.
Senate amendment
Although certain supportive services are available to
dislocated workers under WIA, current law makes no express
linkage between these services and Trade AdjustmentAssistance
and TAA certified workers may not be able to access them. Section 111
of the Senate Amendment adds a new section 243 which provides that
States may apply for and the Secretary of Labor may make available to
adversely affected workers certified under the Trade Adjustment
Assistance program supportive services available under WIA, including
transportation, child care, and dependent care, that are necessary to
enable a worker to participate in or complete training. Section 243
requires the Comptroller General to conduct a study of all assistance
provided by the Federal Government for workers facing job loss and
economic distress; to submit a report to the Committee on Finance of
the Senate and the Committee on Ways and Means of the House of
Representatives on the study within one year of enactment of this Act;
and to distribute the report to all WIA one-stop partners. Section 243
further provides that each State may conduct a study of its assistance
programs for workers facing job loss and economic distress. Each State
is eligible for a grant from the Secretary of Labor, not to exceed
$50,000, to enable it to conduct the study. In the event that a grant
is awarded, the State must, within one year of receiving the grant,
provide its report to the Committee on Finance and the Committee on
Ways and Means and distribute its report to one-stop partners in the
State.
Conference agreement
The Senate recedes to the House.
Subtitle B--Trade Adjustment Assistance for Firms
SEC. 131--REAUTHORIZATION OF TRADE ADJUSTMENT FOR FIRMS PROGRAM
Present law
The Trade Adjustment Assistance for Firms program
provides technical assistance to qualifying firms. Current
Title II, Chapter 3, section 251 of the Trade Act of 1974
provides that a firm is eligible to receive Trade Adjustment
Assistance under this program if (1) a significant number or
proportion of its workers have become or are threatened to
become totally or partially separated; (2) sales or production,
or both, have decreased absolutely; and (3) increases of
imports of articles like or directly competitive with articles
which are produced by such firms contributed importantly to the
total or partial separations or threat thereof.
The authorization for the Trade Adjustment Assistance for
Firms program expired on September 30, 2001. The TAA for Firms
program is currently subject to annual appropnations and is
funded as part of the budget of the Economic Development
Administration in the Department of Commerce.
House amendment
The House passed amendment included a 2 year
reauthorization for Trade Adjustment Assistance for Firms.
Senate amendment
Section 201 of the Senate Amendment reauthorizes the
Trade Adjustment Assistance for Firms program for fiscal years
2002 through 2007; expands the definition of qualifying firms
to cover shifts in production; and authorizes appropriations to
the Department of Commerce in the amount of $16 million
annually for fiscal years 2002 through 2007 to carry out the
purposes of the Trade Adjustment Assistance for Firms program.
Conference agreement
The House recedes to the Senate on the issue of providing
a $16 million authorization for Trade Adjustment Assistance for
Firms and reauthorizing the program through September 30, 2007.
Subtitle C--Trade Adjustment Assistance for Farmers and Ranchers
SEC. 141--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 401 of the Senate Amendment adds new sections
292-298 of the Trade Act of 1974 which create a Trade
Adjustment Assistance program for farmers and ranchers in the
Department of Agriculture. Under this section, a group of
agricultural commodity producers may petition the Secretary of
Agriculture for Trade Adjustment Assistance. The Secretary must
certify the group as eligible for Trade Adjustment Assistance
for farmers if it is determined that the national average price
in the most recent marketing year for the commodity produced by
the group is less than 80 percent of the national average price
in the preceding 5 marketing years and that increases in
imports of that commodity contributed importantly to the
decline in price.
Conference agreement
The House recedes to the Senate with changes. The
Conferees agree to include limitations on eligibility based
upon adjusted gross income and counter-cyclical payment
limitations set forth in the Food Security Act of 1985.
SEC. 142--CONFORMING AMENDMENTS
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate Amendment makes conforming amendments to the
Trade Act of 1974 concerning the TAA for Farmers program.
Conference agreement
Conferees agree to make conforming amendments to the
Trade Act of 1974.
SEC. 143--TRADE ADJUSTMENT ASSISTANCE FOR FISHERMEN
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 502 of the Senate Amendment adds new sections
299-299(G) which create a Trade Adjustment Assistance program
for fishermen in the Department of Commerce. Under this
program, a group of fishermen may petition the Secretary of
Commerce for Trade Adjustment Assistance. The Secretary must
certify the group as eligible for Trade Adjustment Assistance
for fishermen if it is determined that the national average
price in the most recent marketing year for the fish produced
by the group is less than 80 percent of the national average
price in the proceeding five marketing years and that increases
in imports of that fish contributed importantly to the decline
in price.
Conference agreement
Conferees agree to drop Senate Amendment and authorize a
study by the Department of Labor to investigate applying TAA to
fisherman.
Subtitle D--Effective Date
SEC. 151--EFFECTIVE DATE
Present law
No applicable provision.
House amendment
No provision.
Senate amendment
Section 801 of the Senate Amendment provides that except
as otherwise specified, the amendments to the TAA program shall
be effective 90 days after enactment of the Trace Act of 2002.
The Senate Amendment includes transitional provisions governing
the period between expiration of the prior authorizations of
TAA for workers and firms and the effective date of the
amendments.
Conference agreement
The House recedes to the Senate.
TITLE II--CREDIT FOR HEALTH INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
SEC. 201(A) AND 202--CREDIT FOR HEALTH INSURANCE COSTS OF INDIVIDUALS
RECEIVING A TRADE READJUSTMENT ALLOWANCE OR A BENEFIT FROM THE PENSION
BENEFIT GUARANTY CORPORATION; ADVANCE PAYMENT OF CREDIT FOR HEALTH
INSURANCE COSTS OF ELIGIBLE INDIVIDUALS
Present law
Under present law, the tax treatment of health insurance
expenses depends on the individual's circumstances. In general,
employer contributions to an accident or health plan are
excludable from an employee's gross income (sec. 106).
Self-employed individuals are entitled to deduct a
portion of the amount paid for health insurance expenses for
the individual and his or her spouse and dependents. The
percentage of deductible expenses is 70 percent in 2002 and 100
percent in 2003 and thereafter.
Individuals other than self-employed individuals who
purchase their own health insurance and itemize deductions may
deduct their expenses to the extent that their total medical
expenses exceed 7.5 percent of adjusted gross income.
Present law does not provide a tax credit for the
purchase of health insurance.
The health care continuation rules (commonly referred to
as ``COBRA'' rules, after the Consolidated Omnibus Budget
Reconciliation Act of 1985 in which they were enacted) require
that employer-sponsored group health plans of employers with 20
or more employees must offer certain covered employees and
their dependents (``qualified beneficiaries'') the option of
purchasing continued health coverage in the event of loss of
coverage resulting from certain qualifying events. These
qualifying events include: termination or reduction in hours of
employment, death, divorce or legal separation, enrollment in
Medicare, the bankruptcy of the employer, or the end of a
child's dependency under a parent's health plan. In general,
the maximum period of COBRA coverage is 18 months. An employer
is permitted to charge qualified beneficiaries 102 percent of
the applicable premium for COBRA coverage.
Under present law, individuals without access to COBRA
are able to purchase individual policies on a guaranteed issue
basis without exclusion of coverage for pre-existing conditions
if they had 18 months of creditable coverage under an employer
sponsored group health plan, governmental plan, or a church
plan. Those with access to COBRA are required to exhaust their
18 months of COBRA prior to obtaining a policy on a guaranteed
issue basis without exclusion of coverage for pre-existing
conditions.
House amendment
The House bill provides a refundable tax credit for up to
60 percent of the expenses of an eligible individual for
qualified health insurance coverage of the eligible individual
and his or her spouse or dependents. Eligible individuals are
certain TAA eligible workers and PBGC pension beneficiaries. In
the case of TAA eligible workers, no more than 12 months of
coverage would be eligible for the credit. The amount of the
credit would be phased out for taxpayers with modified adjusted
gross income between $20,000 and $40,000 for single taxpayers
($40,000 and $80,000 for married taxpayers filing a joint
return). The credit would be available on an advance basis
pursuant to a program to be established by the Secretary of the
Treasury. Insurance that qualifies for the credit includes
certain COBRA coverage and certain individual market options.
Senate amendment
The Senate amendment provides a refundable credit for 70
percent of qualified health insurance expenses. The credit is
available with respect to certain TAA eligible workers. The
credit is payable on an advance basis pursuant to a program to
be established by the Secretary of the Treasury. Insurance that
qualifies for the credit includes certain COBRA coverage,
certain State-based options, and individual health insurance if
certain requirements are satisfied.
Conference agreement
Refundable health insurance credit: in general
In the case of taxpayers who are eligible individuals,
the conference agreement provides a refundable tax credit for
65 percent of the taxpayer's expenses for qualified health
insurance of the taxpayer and qualifying family members for
each eligible coverage month beginning in the taxable year. The
credit is available only with respect to amounts paid by the
taxpayer.
Qualifying family members are the taxpayer's spouse and
any dependent of the taxpayer with respect to whom the taxpayer
is entitled to claim a dependency exemption.\1\ Any individual
who has other specified coverage is not a qualifying family
member.
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\1\ Present law allows the custodial parent to release the night to
claim the dependency exemption for a child to the noncustodial parent.
In addition, if certain requirements are met, the parents may, decide
by agreement that the noncustodial parent is entitled to the dependency
exemption with respect to a child. In such cases, the provision would
treat the child as the dependent of the custodial parent for purposes
of the credit.
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Persons eligible for the credit
Eligibility for the credit is determined on a monthly
basis. In general, an eligible coverage month is any month if,
as of the first day of the month, the taxpayer (1) is an
eligible individual, (2) is covered by qualified health
insurance, (3) does not have other specified coverage, and (4)
is not imprisoned under Federal, State, or local authority. In
the case of a joint return, the eligibility requirements are
met if at least one spouse satisfies the requirements. An
eligible month must begin more than 90 days after the date of
enactment.
An eligible individual is (1) an eligible TAA recipient,
(2) an eligible alternative TAA recipient, and (3) an eligible
PBGC pension recipient.
An individual is an eligible TAA recipient during any
month if the individual (1) is receiving for any day of such
month a trade adjustment allowance \2\ or who would be eligible
to receive such an allowance but for the requirement that the
individual exhaust unemployment benefits before being eligible
to receive an allowance and (2) with respect to such allowance,
is covered under a certification issued under subchapter A or D
of chapter 2 of title 11 of the Trade Act of 1974. An
individual is treated as an eligible TAA recipient during the
first month that such individual would otherwise cease to be an
eligible TAA recipient.
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\2\ Part I of subchapter B, or subchapter D. of chapter 2 of title
11 of the Trade Act of 1974.
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An individual is an eligible alternative TAA recipient
during any month if the individual (1) is a worker described in
section 246(a)(3)(B) of the Trade Act of 1974 who is
participating in the program established under section
246(a)(1) of such Act, and (2) is receiving a benefit for such
month under section 246(a)(2) of such Act. An individual is
treated as an eligible alternative TAA recipient during the
first month that such individual would otherwise cease to be an
eligible TAA recipient.
An individual is a PBGC pension recipient for any month
if he or she (1) is age 55 or over as of the first day of the
month, and (2) is receiving a benefit any portion of which is
paid by the Pension Benefit Guaranty Corporation (``PBGC).
An otherwise eligible taxpayer is not eligible for the
credit for a month if, as of the first day of the month the
individual has other specified coverage. Specified coverage
would be (1) coverage under any insurance which constitutes
medical care (expect for insurance substantially all of the
coverage of which is for excepted benefits) \3\ if at least 50
percent of the cost of the coverage is paid by an employee \4\
(or former employer) of the individual or his or her spouse or
(2) coverage under certain governmental health programs. \5\ A
rule aggregating plans of the same employer applies in
determining whether the employer pays at least 50 percent of
the cost of coverage. A person is not an eligible individual if
he or she may be claimed as a dependent on another person's tax
return. A special rule applies with respect to alternative TAA
recipients.
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\3\ Excepted benefits are: (1) coverage only for accident or
disability income or any combination thereof, (2) coverage issued as a
supplement to liability insurance; (3) liability insurance. including
general liability insurance and automobile liability insurance; (4)
worker's compensation or similar insurance; (5) automobile medical
payment insurance; (6) credit-only insurance; (7) coverage for on-site
medical clinics; (8) other insurance coverage similar to the coverages
in (1)-(7) specified in regulations under which benefits for medical
care are secondary or incidental to other insurance benefits; (9)
limited scope dental or vision benefits; (10) benefits for long-term
care, nursing home care, home health care, community-based care, or any
combination thereof, and (11) other benefits similar to those in (9)
and (10) as specified in regulations; (12) coverage only for a
specified disease or illness; (13) hospital indemnity or other fixed
indemnity insurance; and (14) Medicare supplemental insurance.
\4\ An amount would be considered paid by the employer if it is
excludable from income. Thus. for example, amounts paid for health
coverage on a salary reduction basis under an employer plan are
considered paid by the employer.
\5\ Specifically, an individual would not be eligible for the
credit if, as of the first day of the month, the individual is (1)
entitled to benefits under Medicare Part A, enrolled in Medicare Part
B, or enrolled in Medicaid or SCHIP, (2) enrolled in a health benefits
plan under the Federal Employees Health Benefit Plan, or (3) entitled
to receive benefits under chapter 55 of title 10 of the United States
Code (relating to military personnel). An individual is not considered
to be enrolled in Medicaid solely by reason of receiving immunizations.
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Qualified health insurance
Qualified health insurance eligible for the credit is:
(1) COBRA continuation coverage (2) State based continuation
coverage provided by the State under a State law that requires
such coverage; (3) coverage offered through a qualified State
high risk pool;(4) coverage under a health insurance program
offered to State employees or a comparable program; (5) coverage
through an arrangement entered into by the State and a group health
plan, an issuer of health insurance coverage, an administrator, or an
employer; (6) coverage offered through a State arrangement with a
private sector health care coverage purchasing pool; (7) coverage under
a State-operated health plan that does not receive any Federal
financial participation; (8) coverage under a group health plan that is
available through the employment of the eligible individual's spouse;
and (9) coverage under individual health insurance if the eligible
individual was covered under individual health insurance during the
entire 30-day period that ends on the date the individual became
separated from the employment which qualified the individual for the
TAA allowance, the benefit for an eligible alternative TAA recipient,
or a pension benefit from the PBGC, whichever applies.\6\
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\6\ For this purpose, ``individual health insurance'' means any
insurance which constitutes medical care offered to individuals other
than in connection with a group health plan. Such term does not include
Federal- or State-based health insurance coverage.
---------------------------------------------------------------------------
Qualified health insurance does not include any State-
based coverage (i.e., coverage described in (2)-(8) in the
preceding paragraph), unless the State has elected to have such
coverage treated as qualified health insurance and such
coverage meets certain requirements. Such State coverage must
provide that each qualifying individual is guaranteed
enrollment if the individual pays the premium for enrollment or
provides a qualified health insurance costs eligibility
certificate and pays the remainder of the premium. In addition,
the State-based coverage cannot impose any pre-existing
condition limitation with respect to qualifying individuals.
State-based coverage cannot require a qualifying individual to
pay a premium or contribution that is greater than the premium
or contribution for a similarly situated individual who is not
a qualified individual. Finally, benefits under the State-based
coverage must the same as (or substantially similar to)
benefits provided to similarly situated individuals who are not
qualifying individuals. A qualifying individual is an eligible
individual who seeks to enroll in the State-based coverage and
who has aggregate periods of creditable coverage \7\ of three
months or longer, does not have other specified coverage, and
who is not imprisoned. A ``qualifying individual'' also
includes qualified family members of such an eligible
individual.
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\7\ Creditable coverage is determined under the Health Care
Portability and Accountability Act (Code sec. 9801 (c)).
---------------------------------------------------------------------------
Qualified health insurance does not include coverage
under a flexible spending or similar arrangement or any
insurance if substantially all of the coverage is of excepted
benefits.
Other rules
Amounts taken into account in determining the credit
could not be taken into account in determining the amount
allowable under the itemized deduction for medical expenses or
the deduction for health insurance expenses of self-employed
individuals. Amounts distributed from a medical savings account
would not be eligible for the credit. The amount of the credit
is reduced by any credit received on an advance basis. Married
taxpayers filing separate returns are eligible for the credit;
however, if both spouses are eligible individuals and the
spouses file a separate return, then the spouse of the taxpayer
is not a qualifying family member.
The Secretary of the Treasury is authorized to prescribe
such regulations and other guidance as may be necessary or
appropriate to carry out the provision.
Advance payment of refundable health insurance credit;
reporting requirements
The conference agreement provides for payment of the
credit on an advance basis (i.e., prior to the filing of the
taxpayer's return) pursuant to a program to be established by
the Secretary of the Treasury no later than August 1, 2003.
Such program is to provide for making payments on behalf of
certified individuals to providers of qualified health
insurance. In order to receive the credit on an advance basis,
a qualified health insurance costs credit eligibility
certificate would have to be in effect for the taxpayer. A
qualified health insurance costs credit eligibility certificate
is a written statement that an individual is an eligible
individual for purposes of the credit, provides such
information as the Secretary of the Treasury may require, and
is provided by the Secretary of Labor or the PBGC (as
appropriate) or such other person or entity designated by the
Secretary.
The conference report permits the disclosure of return
information of certified individuals to providers of health
insurance information to the extent necessary to carry out the
advance payment mechanism.
The conference report provides that any person who
receives payments during a calendar year for qualified health
insurance and claims a reimbursement for an advance credit
amount is to file an information return with respect to each
individual from whom such payments were received or for whom
such a reimbursement is claimed. The return is to be in such
form as the Secretary may prescribe and is to contain the name,
address, and taxpayer identification number of the individual
and any other individual on the same health insurance policy,
the aggregate of the advance credit amounts provided, the
number of months for which advance credit amounts are provided,
and such other information as the Secretary may prescribe. The
conference report requires that similar information be provided
to the individual no later than January 31 of the year
following the year for which the information return is made.
Effective Date
The provision is generally effective with respect to
taxable years beginning after December 31, 2001. The provision
relating to the advance payment mechanism to be developed by
the Secretary would be effective on the date of enactment.
TITLE III--CUSTOMS REAUTHORIZATION
Subtitle A--United States Customs Service
CHAPTER 1--DRUG ENFORCEMENT AND OTHER NONCOMMERCIAL AND COMMERCIAL
OPERATIONS
SEC. 301--SHORT TITLE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House provides
that the Act may be cited as the ``Customs Border Security Act
of 2002.''
Senate amendment
The Senate amendment is identical.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment
SEC. 311--AUTHORIZATION OF APPROPRIATIONS FOR NONCOMMERCIAL OPERATIONS,
COMMERCIAL OPERATIONS, AND AIR AND MARINE INTERDICTION
Present law
The statutory basis for authorization of appropriations
for Customs is section 301(b)(1) of the Customs Procedural and
Simplification Act of 1978 (19 U.S.C. 2075(b)). That law, as
amended by section 8102 of the Omnibus Budget Reconciliation
Act of 1986 [P.L. 99-509], first outlined separate amounts for
non-commercial and commercial operations for the salaries and
expenses portion of the Customs authorization. Under 19 U.S.C.
2075, Congress has adopted a two-year authorization process to
provide Customs with guidance as it plans its budget, as well
as guidance from the Committee for the appropriation process.
The most recent authorization of appropriations for
Customs (under section 101 of the Customs and Trade Act of 1990
[P.L. 101 382]) provided $118,238,000 for salaries and expenses
and $143,047,000 for air and marine interdiction program for FY
1991, and $1,247,884,000 for salaries and expenses and
$150,199,000 for air and marine interdiction program in FY
1992.
House amendment
This provision authorizes $1,365,456,000 for FY 2003 and
$1,399,592,400 for FY 2004 for noncommercial operations of the
Customs Service. It also authorizes $1,642,602,000 for FY 2003
and $1,683,667,050 for FY 2004 for commercial operations of the
Customs Service. Of the amounts authorized for commercial
operations, $308,000,000 is authorized for the automated
commercial environment computer system for each fiscal year.
The provisions require that the Customs Service provide the
Committee on Ways and Means and the Committee on Finance of the
Senate with a report demonstrating that the computer system is
being built in a cost-effective manner. In addition, the
provisions authorizes $170,829,000 for FY 2003 and $175,099,725
for FY 2004 for air and marine interdiction operations of the
Customs Service. The provision requires submission of out-of-
year budget projections to the Ways and Means and Finance
Committees.
Senate amendment
This provision authorizes $886,513,000 for FY 2003 and
$909,471,000 for FY 2004 for noncommercial operations of the
Customs Service. It also authorizes $1,603,482,000 for FY 2003
and $1,645,009,000 for FY 2004 for commercial operations of the
Customs Service. Of the amounts authorized for commercial
operations, $308,000,000 is authorized for the automated
commercial environment computer system for each fiscal year.
The provisions require that the Customs Service provide the
Committee on Ways and Means and the Committee on Finance of the
Senate with a report demonstrating that the computer system is
being built in a cost-effective manner. In addition, the
provisions authorizes $181,860,000 for FY 2003 and $186,570,000
for FY 2004 for air and marine interdiction operations of the
Customs Service. The provision requires submission of out-of-
year budget projections to the Ways and Means and Finance
Committees.
Conference agreement
The Senate recedes to House.
SEC. 312--ANTITERRORIST AND ILLICIT NARCOTICS DETECTION EQUIPMENT FOR
THE UNITED STATES-MEXICO BORDER, UNITED STATES-CANADA BORDER, AND
FLORIDA AND THE GULF COAST SEAPORTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require that $90,244,000 ofthe FY 2003 appropriations be
available until expended for acquisition and other expenses associated
with implementation and deployment of terrorist and narcotics detection
equipment along the United States-Mexico border, the United States-
Canada border, and Florida and the Gulf seaports. The equipment would
include vehicle and inspection systems. The provision would require
that $9,000,000 of the FY 2004 appropriations be used for maintenance
of equipment described above. This section would also provide the
Commissioner of Customs with flexibility in using these funds and would
allow for the acquisition of new updated technology not anticipated
when this bill was drafted. Nothing in the language of the bill is
intended to prevent the Commissioner of Customs from dedicating
resources to specific ports not identified in the bill.
The equipment would include vehicle and container
inspection systems, mobile truck x-rays, upgrades to fixed-site
truck x-rays, pallet x-rays, busters, contraband detection
kits, ultrasonic container inspection units, automated
targeting systems, rapid tire deflator systems, portable
Treasury Enforcement Communications Systems terminals, remote
surveillance camera systems, weigh-in-motion sensors, vehicle
counters, spotter camera systems, inbound commercial truck
transponders, narcotics vapor and particle detectors, and
license plate reader automatic targeting software.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 313--COMPLIANCE WITH PERFORMANCE PLAN REQUIREMENTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require Customs to measure specifically the effectiveness of
the resources dedicated in sections 312 as part of its annual
performance plan.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
Subtitle B--Child Cyber-Smuggling Center of the Customs Service
SEC. 321--AUTHORIZATION OF APPROPRIATIONS FOR PROGRAM TO PREVENT CHILD
PORNOGRAPHY/CHILD SEXUAL EXPLOITATION
Present law
Customs enforcement responsibilities include enforcement
of U.S. laws to prevent border trafficking relating to child
pornography, intellectual property rights violations, money
laundering, and illegal arms. Funding for these activities has
been included in the Customs general account.
House amendment
H.R. 3009 as amended and passed by the House would
authorize $10 million for Customs to carry out its program to
combat on-line child sex predators. Of that amount, $375,000
would be dedicated to the National Center for Missing Children
for the operation of its child pornography cyber tipline.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
CHAPTER 2--MISCELLANEOUS PROVISIONS
SEC. 331--ADDITIONAL CUSTOMS SERVICE OFFICERS FOR U.S.-CANADA BORDER
Present law
No applicable section.
House Amendment
H.R. 3009 as amended and passed by the House earmarks $25
million and 285new staff hires for Customs to use at the U.S.-
Canada border.
Senate amendment
The Senate amendment is the same as the House Amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 332--STUDY AND REPORT RELATING TO PERSONNEL PRACTICES OF THE
CUSTOMS SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House requires
Customs to conduct a study of current personnel practices
including: performance standards; the effect and impact of the
collective bargaining process on Customs drug interdiction
efforts; and a comparison of duty rotations policies of Customs
and other federal agencies employing similarly situated
personnel.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 333--STUDY AND REPORT RELATING TO ACCOUNTING AND AUDITING
PROCEDURES OF THE CUSTOMS SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require Customs to conduct a study to ensure that appropriate
training is being provided to personnel who are responsible for
financial auditing of importers. Customs would specifically
report on how its audit personnel protect the privacy and trade
secrets of importers.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 334--ESTABLISHMENT AND IMPLEMENTATION OF COST ACCOUNTING SYSTEM;
REPORTS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
mandate the imposition of a cost accounting system in order for
Customs to effectively explain its expenditures. Such a system
would provide compliance with the core financial system
requirements of the Joint Financial Management Improvement
Program (JFMIP), which is a joint and cooperative undertaking
of the U.S. Department of the Treasury, the General Accounting
Office, the Office of Management and Budget, and the Office of
Personnel Management working in cooperation with each other and
other agencies to improve financial management practices in
government. That Program has statutory authorization in the
Budget and Accounting Procedures Act of 1950 (31 U.S.C. 65).
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 335--STUDY AND REPORT RELATING TO TIMELINESS OF PROSPECTFVE
RULINGS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require the Comptroller General to prepare a report to
determine whether Customs has improved its timeliness in
providing prospective rulings.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 336--STUDY AND REPORT RELATING TO CUSTOMS USER FEES
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
require the Comptroller General to prepare a confidential
report to determine whether current user fees are appropriately
set at a level commensurate with the service provided for the
fee. The Comptroller General is authorized to recommend the
appropriate level for customs user fees.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 337--FEES FOR CUSTOMS INSPECTIONS AT EXPRESS COURIER FACILITIES
Present law
Current law provides for direct reimbursement by courier
facilities of expenses incurred by Customs conducting
inspections at those facilities.
House amendment
H.R. 3009 as amended and passed by the House would
establish a per item fee of sixty-six cents to cover Customs
expenses. This amount could be lowered to more than thirty-five
cents or raised to no more than $1.00 by the Secretary of the
Treasury after a rulemaking process to reevaluate the expenses
incurred by Customs in providing inspectional services.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 338--NATIONAL CUSTOMS AUTOMATION PROGRAM
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
empower the Secretary to require the electronic submission of
any information required to be submitted to the Customs
Service.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 339--AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS STAFFING
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate Amendment authorizes the appropriation to the
Department of Treasury such sums as may be necessary to
increase the annual pay of journeyman Customs inspectors and
Canine Enforcement Officers who have completed at least one
year of service and are being paid at a GS-9 level, from GS-9
to GS-11. The Senate provision also authorizes an increase in
pay of support staff.
Conference agreement
The House recedes to the Senate.
CHAPTER 4--ANTITERRORISM PROVISIONS
SEC. 341--IMMUNITY FOR CUSTOMS OFFICERS THAT ACT IN GOOD FAITH
Present law
Currently, Customs officers are entitled to qualified
immunity in civil suits brought by persons, who were searched
upon arrival in the United States. Qualified immunity protects
officers from liability if they can establish that their
actions did not violate any clearly established constitutional
or statutory rights.
House amendment
H.R. 3009 as amended and passed by the House would
protect Customs officers by providing them immunity from
lawsuits stemming from personal searches of people entering the
country so long as the officers conduct the searches in good
faith.
Senate amendment
No provision.
Conference agreement
Senate recedes to the House, but conferees qualify the
provision by adding that the means used to effectuate such
searches must be reasonable. To be covered by this immunity
provision, inspectors must follow Customs Service inspection
rules including the rule against profiling against race,
religions, or ethnic background.
SEC. 342--EMERGENCY ADJUSTMENTS TO OFFICES, PORTS OF ENTRY, OR STAFFING
OF THE CUSTOMS SERVICE
Present law
Present law places numerous restrictions on and, in some
instances, precludes the Secretary of the Treasury or Customs
from making any adjustments to ports and staff. 19 U.S.C. 1318
requires a Presidential proclamation of an emergency and
authorization to the Secretary of the Treasury only to extend
the time for performance of legally required acts during an
emergency. No other emergency powers statute for Customs
exists.
House amendment
H.R. 3009 as amended and passed by the House would permit
the Secretary of the Treasury, if the President declares a
national emergency or if necessary to address specific threats
to human life or national interests, to eliminate, consolidate,
or relocate Customs ports and offices and to alter staffing
levels, services rendered and hours of operations at those
locations. In addition, the amendment would permit the
Commissioner of Customs, when necessary to address threats to
human life or national interests, to close temporarily any
Customs office or port or take any other lesser action
necessary to respond to the specific threat. The Secretary or
the Commissioner would be required to notify Congress of any
action taken under this proposal within 72 hours.
Senate amendment
The Senate amendment is the same as the House Amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SECS. 343 AND 343A--MANDATORY ADVANCED ELECTRONIC INFORMATION FOR CARGO
AND PASSENGERS; SECURE SYSTEMS OF TRANSPORTATION
Present law
Currently, commercial carriers bringing passengers or
cargo into or out of the country have no obligation to provide
Customs with such information in advance.
House amendment
H.R. 3009 as amended and passed by the House would
require every air, land, or water-based commercial carrier to
file an electronic manifest describing all passengers with
Customs before entering or leaving the country. There is a
similar requirement for cargo entering the country. Specific
information required in the advanced manifest system would be
developed by Treasury in regulations.
Senate amendment
The Senate Amendment is similar to the House Amendment.
However, with respect to cargo, the Senate Amendment applies to
out-bound as well as in-bound shipments.
Conference agreement
The conferees agree to direct the Secretary of the
Treasury to promulgate regulations pertaining to the electronic
transmission to the Customs Service of information relevant to
aviation, maritime, and surface transportation safety and
security prior to a cargo carrier's arrival in or departure
from the United States. The agreement sets forth parameters for
the Secretary to follow in developing these regulations. For
example, the parameters require that the regulations be
flexible with respect to the commercial and operational aspects
of different modes of transportation. They also require that,
in general, the Customs Service seek information from parties
most likely to have direct knowledge of the information at
issue. The conferees also agree to amendment of the Tariff Act
of 1930 to establish requirements concerning proper
documentation of ocean-bound cargo prior to a vessel's
departure. Finally, the conferees agree to direct the Secretary
of the Treasury to establish a task force to evaluate,
prototype and certify secure systems of transportation.
SEC. 344--BORDER SEARCH AUTHORITY FOR CERTAIN CONTRABAND IN OUTBOUND
MAIL
Present law
Although Customs currently searches all inbound mail, and
although it searches outbound mail sent via private carriers,
outbound mail carried by the Postal Service is not subject to
search.
House amendment
H.R. 3009 as amended and passed by the House would enable
Customs officers to search outbound U.S. mail for unreported
monetary instruments, weapons of mass destruction, firearms,
and other contraband used by terrorists. However, reading of
mail would not be authorized absent Customs officers obtaining
a search warrant or consent.
Senate amendment
The Senate Amendment is the same as the House Amendment
with respect to mail weighing in excess of 16 ounces. However,
under the Senate Amendment, the Customs Service would be
required to obtain a warrant in order to search mail weighing
16 ounces or less. The Senate Amendment also requires the
Secretary of State to determine whether it is consistent with
international law and U.S. treaty obligations for the Customs
Service to search mail transiting the United States between two
foreign countries. The Customs Service would be authorized to
search such mail only after the Secretary of State determined
that such measures are consistent with international law and
U.S. treaty obligations.
Conference agreement
The House recedes to the Senate.
SEC. 345--AUTHORIZATION OF APPROPRIATIONS FOR REESTABLISHMENT OF
CUSTOMS OPERATIONS IN NEW YORK CITY
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House authorizes
funds to reestablish those operations.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
CHAPTER 5--TEXTILE TRANSSHIPMENT PROVISIONS
SEC. 351--GAO AUDIT OF TEXTILE TRANSSHIPMENT MONITORING BY CUSTOMS
SERVICE
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would direct
the Comptroller General to conduct an audit of the systems at
the Customs Service to monitor and enforce textile
transshipment. The Comptroller General would report on
recommendations for improvements.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 352--AUTHORIZATION OF APPROPRIATIONS FOR TEXTILE TRANSSHIPMENT
ENFORCEMENT OPERATIONS
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
authorize $9,500,000 for FY 2002 to the Customs Service for the
purpose of enhancing its textile transshipment enforcement
operations. This amount would be in addition to Customs
Service's base authorization and the authorization to
reestablish the destroyed textile monitoring and enforcement
operations at the World Trade Center.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The Senate recedes to the House, but the text is
clarified to provide that personnel will also conduct education
and outreach in addition to enforcement.
SEC. 353--IMPLEMENTATION OF THE AFRICAN GROWTH AND OPPORTUNITY ACT
Present law
No applicable section.
House amendment
H.R. 3009 as amended and passed by the House would
earmark approximately $1.3 million within Customs' budget for
selected activities related to providing technical assistance
to help sub-Saharan African countries develop and implement
effective visa and anti-transshipment systems as required by
the African Growth and Opportunity Act (title I of Public Law
106-200).
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
Subtitle B--Office of the United States Trade Representative
SEC. 361--AUTHORIZATION OF APPROPRIATIONS
Present law
The statutory authority for budget authorization for the
Office of the United States Trade Representative is section
141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)). The
most recent authorization of appropriations for USTR was under
section 101 of the Customs and Trade Act of 1990 [P.L. 101-
382]. Under 19 U.S.C. 2171, Congress has adopted a two-year
authorization process to provide USTR with guidance as it plans
its budget as well as guidance from the Committee for the
appropriation process.
House amendment
H.R. 3009 as amended and passed by the House authorizes
$32,300,000 for FY 2003 and $31,108,000 for FY 2004. The
provision requires submission of out-of-year budget projections
to the Ways and Means and Finance Committees. In light of the
substantial increase in trade negotiation work to be conducted
by USTR and the associated need for consultations with
Congress, this provision would authorize the addition of two
individuals to assist the office of Congressional Affairs.
Senate amendment
The Senate amendment authorizes $30,000,000 for FY 2003
and $31,000,000 for FY 2004.
Conference agreement
The Senate recedes to the House.
Subtitle C--United States International Trade Commission
SEC. 371--AUTHORIZATION OF APPROPRIATIONS
Present law
The statutory authority for budget authorization for the
International Trade Commission is section 330(e)(2)(A) of the
Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)). The most recent
authorization of appropriations for the ITC was under section
101 of the Customs and Trade Act of 1990 [P.L. 101-382]. Under
19 U.S.C. 1330, Congress has adopted a two-year authorization
process to provide the ITC with guidance as it plans its budget
as well as guidance from the Committees for the appropriation
process.
House amendment
H.R. 3009 as amended and passed by the House authorizes
$54,000,000 for FY 2003 and $57,240,000 for FY 2004. The
provision requires submission of out-of-year budget projections
to the Ways and Means and Finance Committees.
Senate amendment
The Senate amendment authorizes $51,400,000 for FY 2003
and $53,400,000 for FY 2004.
Conference agreement
The Senate recedes to the House.
Subtitle D--Other Trade Provisions
SEC. 381--INCREASE IN AGGREGATE VALUE OF ARTICLES EXEMPT FROM DUTY
ACQUIRED ABROAD BY UNITED STATES RESIDENTS
Present law
The Harmonized Tariff Schedule at subheading 9804.00.65
currently provides a $400 duty exemption for travelers
returning from abroad.
House amendment
H.R. 3009 as amended and passed by the House would
increased the current $400 duty exemption to $800.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 382--REGULATORY AUDIT PROCEDURES
Present law
Section 509 of the Tariff Act of 1930 (19 U.S.C. 1509)
provides the authority for Customs to audit persons making
entry of merchandise into the U.S. In the course of such audit,
Customs auditors may identify discrepancies, including
underpayments of duties. However, if there also are
overpayments, there is no requirement that such overpayments be
offset against the underpayments if the underlying entry has
been liquidated.
House amendment
H.R. 3009 as amended and passed by the House would
require that when conducting an audit, Customs must recognize
and offset overpayments and overdeclarations of duties,
quantities and values against underpayments and
underdeclarations. As an example, if during an audit Customs
finds that an importer has underpaid duties associated with one
entry of merchandise by $100 but has also overpaid duties from
another entry of merchandise by $25, then any assessment by
Customs must be the difference of $75.
Senate amendment
The Senate amendment is the same as the House amendment.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 383--PAYMENT OF DUTIES AND FEES
Present law
Current law at 19 U.S.C. 1505 provides for the collection
of duties by the Secretary through regulatory process.
House amendment
H.R. 3009 as amended and passed by the House would
require duties to be paid within 10 working days without
extension. The bill also provides for the Customs Service to
create a monthly billing system upon the building of the
Automated Commercial Environment.
Senate amendment
No provision.
Conference agreement
Senate recedes to the House.
DIVISION B--BIPARTISAN TRADE PROMOTION AUTHORITY
TITLE XXI--TRADE PROMOTION AUTHORITY
SEC. 2101--SHORT TITLE AND FINDINGS
Present law
No provision.
House amendment
The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2001.'' Section 2101 of the House
amendment to H.R. 3009 states that Congress finds the expansion
of international trade is vital to U.S. national security and
economic growth, as well as U.S. leadership. Section 2101 also
states that the recent pattern of decisions by dispute
settlement panels and the Appellate Body of the World Trade
Organization to impose obligations and restrictions on the use
of antidumping and countervailing measures by WTO members has
raised concerns, and Congress is concerned that such bodies
appropriately apply the standard of review contained in Article
17.6 of the Antidumping Agreement, to provide deference to a
permissible interpretation by a WTO member and to the
evaluation by a member of the facts where that evaluation is
unbiased and objective and the establishment of the facts is
proper.
Senate amendment
The short title of the bill is the ``Bipartisan Trade
Promotion Authority Act of 2002.'' Section 2101 of the Senate
amendment to H.R. 3009 states that Congress finds the expansion
of international trade is vital to U.S. national security and
economic growth, as well as U.S. leadership. Section 2101 also
states that support for continued trade expansion requires that
dispute settlement procedures under international trade
agreements not add to or diminish the rights and obligations
provided in such agreements. It goes on to note a troubling
pattern of cases before WTO dispute settlement panels and the
WTO Appellate Body that do precisely that.
Conference agreement
The Senate recedes to the House with modifications. With
respect to the findings, the Conferees believe that, as stated
in section 2101(b) of the Conference agreement, support for
continued trade expansion requires that dispute settlement
procedures under international trade agreements not add to or
diminish the rights and obligations provided in such
agreements. Therefore, the recent pattern of decisions by
dispute settlement panels and the WTO Appellate Body to impose
obligations and restrictions on the use of antidumping,
countervailing and safeguard measures by WTO members has raised
concerns, and Congress is concerned that such bodies
appropriately apply the standard of review contained in Article
17.6 of the Antidumping Agreement, to provide deference to a
permissible interpretation by a WTO member and to the
evaluation by a member of the facts where that evaluation is
unbiased and objective and the establishment of the facts is
proper.
SEC. 2102--TRADE NEGOTIATING OBJECTIVES
Present/expired law
Section 1101(a) of the Omnibus Trade and Competitiveness
Act of 1988 (the 1988 Act) set forth overall negotiating
objectives for concluding trade agreements. These objectives
were to obtain more open, equitable, and reciprocal market
access, the reduction or elimination of barriers and other
trade-distorting policies and practices, and a more effective
system of international trading disciplines and procedures.
Section 1102(b) set forth the following principal trade
negotiating objectives: dispute settlement, transparency,
developing countries, current account surpluses, trade and
monetary coordination, agriculture, unfair trade practices,
trade in services, intellectual property, foreign direct
investment, safeguards, specific barriers, worker rights,
access to high technology, and border taxes.
House amendment
Section 2102 of the House amendment to H.R. 3009 would
establish the following overall negotiating objectives:
obtaining more open, equitable, and reciprocal market access;
obtaining the reduction or elimination of barriers and other
trade-distorting policies and practices; further strengthening
the system of international trading disciplines and procedures,
including dispute settlement; fostering economic growth and
full employment in the U.S. and the global economy; ensuring
that trade and environmental policies are mutually supportive
and seeking to protect and preserve the environment and enhance
the international means of doing so, while optimizing the use
of the world's resources; promoting respect for worker rights
and the rights of children consistent with International Labor
Organization core labor standards, as defined in the bill; and
seeking provisions in trade agreements under which parties
strive to ensure that they do not weaken or reduce the
protections afforded in domestic environmental and labor laws
as an encouragement to trade.
In addition, section 2102 would establish the principal
trade negotiating objectives for concluding trade agreements,
as follows:
Trade barriers and distortions: expanding competitive
market opportunities for U.S. exports and obtaining fairer and
more open conditions of trade by reducing or eliminating tariff
and nontariff barriers and policies and practices of foreign
governments directly related to tradethat decrease market
opportunities for U.S. exports and distort U.S. trade; and obtaining
reciprocal tariff and nontariff barrier elimination agreements, with
particular attention to products covered in section 111(b) of the
Uruguay Round Agreements Act.
Services: to reduce or eliminate barriers to
international trade in services, including regulatory and other
barriers, that deny national treatment or unreasonably restrict
the establishment or operations of services suppliers.
Foreign investment: to reduce or eliminate artificial or
trade-distorting barriers to trade-related foreign investment
and, recognizing that U.S. law on the whole provides a high
level of protection for investment, consistent with or greater
than the level required by international law, to secure for
investors important rights comparable to those that would be
available under U.S. legal principles and practice, by:
Reducing or eliminating exceptions to the principle
of national treatment;
Freeing the transfer of funds relating to
investments;
Reducing or eliminating performance requirements,
forced technology transfers, and other unreasonable
barriers to the establishment and operation of
investments;
Seeking to establish standards for expropriation
and compensation for expropriation, consistent with
United States legal principles and practice;
Providing meaningful procedures for resolving
investment disputes including between an investor and a
government;
Seeking to improve mechanisms used to resolve
disputes between an investor and a government through
mechanisms to eliminate frivolous claims and procedures
to ensure the efficient selection of arbitrators and
the expeditious disposition of claims;
Providing an appellate or similar review mechanism
to correct manifestly erroneous interpretations of law;
and
Ensuring the fullest measure of transparency in
investment disputes by ensuring that all requests for
dispute settlement and all proceedings, submissions,
findings, and decisions are promptly made public; all
hearings are open to the public; and establishing a
mechanism for acceptance of amicus curiae submissions.
Intellectual property: including: promoting adequate and
effective protection of intellectual property rights through
ensuring accelerated and full implementation of the Agreement
on Trade-Related Aspects of Intellectual Property Rights,
including strong enforcement; providing strong protection for
new and emerging technologies and new methods of transmitting
and distributing products embodying intellectual property; and
ensuring that standards of protection and enforcement keep pace
with technological developments, and in particular ensuring
that right holders have the legal and technological means to
control the use of their works through the internet and other
global communication media.
Transparency: to increase public access to information
regarding trade issues as well as the activities of
international trade institutions; to increase openness in
international trade fora, including the WTO, by increasing
public access to appropriate meetings, proceedings, and
submissions, including with regard to dispute settlement and
investment; and to increase timely public access to
notifications made by WT0 member states and the supporting
documents.
Anti-corruption: to obtain high standards and appropriate
enforcement mechanisms applicable to persons from all countries
participating in a trade agreement that prohibit attempts to
influence acts, decisions, or omissions of foreign government;
and to ensure that such standards do not place U.S. persons at
a competitive disadvantage in international trade.
Improvement of the WTO and multilateral trade agreements:
to achieve full implementation and extend the coverage of the
WTO and such agreements to products, sectors, and conditions of
trade not adequately covered; and to expand country
participation in and enhancement of the Information Technology
Agreement (ITA) and other trade agreements.
Regulatory practices: to achieve increased transparency
and opportunity for the participation of affected parties in
the development of regulations; to require that proposed
regulations be based on sound science, cost-benefit analysis,
risk assessment, or other objective evidence; to establish
consultative mechanisms among parties to trade agreements to
promote increased transparency in developing guidelines, rules,
regulations, and laws for government procurement and other
regulatory regimes; and to achieve the elimination of
government measures such as price controls and reference
pricing which deny full market access for United States
products.
Electronic commerce: to ensure that current obligations,
rules, disciplines, and commitments under the WTO apply to
electronic commerce; to ensure that electronically delivered
goods and services receive no less favorable treatment under
trade rules and commitments than like products delivered in
physical form; and the classification of such goods and
services ensures the most liberal trade treatment possible; to
ensure that governments refrain from implementing trade-related
measures that impede electronic commerce; where legitimate
policy objectives require domestic regulations that affect
electronic commerce, to obtain commitments that any such
regulations are the leastrestrictive on trade,
nondiscriminatory, and transparent, and promote an open market
environment, and to extend the moratorium of the WTO on duties on
electronic transmissions.
Agriculture: to ensure that the U.S. trade negotiators
duly recognize the importance of agricultural issues; to obtain
competitive market opportunities for U.S. exports in foreign
markets substantially equivalent to the competitive
opportunities afforded foreign exports in U.S. markets and to
achieve fairer and more open conditions of trade; to reduce or
eliminate trade distorting subsidies; to impose disciplines on
the operations of state-trading enterprises or similar
administrative mechanisms; to eliminate unjustified
restrictions on products derived from biotechnology; to
eliminate sanitary or phytosanitary restrictions that
contravene the Uruguay Round Agreement as they are not based on
scientific principles and to improve import relief mechanisms
to accommodate the unique aspects of perishable and cyclical
agriculture.
Labor and the environment: to ensure that a party does
not fail to effectively enforce its environmental or labor
laws, through a sustained or recurring course of action or
Inaction, in a manner affecting trade between the United States
and that party; to recognize that a party to a trade agreement
is effectively enforcing its laws if a course of inaction or
inaction reflects a reasonable exercise of discretion or
results from a bona fide decision regarding allocation of
resources and no retaliation may be authorized based on the
exercise of these rights or the right to establish domestic
labor standards and levels of environmental protection; to
strengthen the capacity of U.S. trading partners to promote
respect for core labor standards and to protect the environment
through the promotion of sustainable development; to reduce or
eliminate government practices or policies that unduly threaten
sustainable development; to seek market access for U.S.
environmental technologies, goods, and services; and to ensure
that labor, environmental, health, or safety policies and
practices of parties to trade agreements do not arbitrarily or
unjustifiably discriminate against U.S. exports or serve as
disguised barriers to trade.
Dispute settlement and enforcement: to seek provisions in
trade agreements providing for resolution of disputes between
governments in an effective, timely, transparent, equitable,
and reasoned manner requiring determinations based on facts and
the principles of the agreement, with the goal of increasing
compliance; seek to strengthen the capacity of the WTO Trade
Policy Review Mechanism to review compliance; seek provisions
encouraging the early identification and settlement of disputes
through consultations; seek provisions encouraging trade-
expanding compensation; seek provisions to impose a penalty
that encourages compliance, is appropriate to the parties,
nature, subject matter, and scope of the violation, and has the
aim of not adversely affecting parties or interests not party
to the dispute while maintaining the effectiveness of the
enforcement mechanism; and seek provisions that treat U.S.
principal negotiating objectives equally with respect to
ability to resort to dispute settlement and availability of
equivalent procedures and remedies.
Extended WTO negotiations: concerning extended WTO
negotiations on financial services, civil aircraft, and rules
of origin.
Senate amendment
The Senate Amendment is substantially similar to the
House Amendment, with the exception of several key provisions:
Small Business: The Senate Amendment contains an overall
negotiating objective ``to ensure that trade agreements afford
small businesses equal access to international markets,
equitable trade benefits, expanded export market opportunities,
and provide for the reduction or elimination of trade barriers
that disproportionately impact small businesses.''
Trade in Motor Vehicles and Parts: The Senate Amendment
contains a principal negotiating objective on expanding
competitive opportunities for exports of U.S. motor vehicles
and parts.
Foreign Investment: The Senate Amendment states as an
objective of the United States in the context of investor-state
dispute settlement ``ensuring that foreign investors in the
United States are not accorded greater rights than United
States investors in the United States.'' The Senate Amendment's
objective with respect to investor-state dispute settlement
also differs from the House Amendment in the following
respects:
It sets as an objective'' seeking to establish
standards for fair and equitable treatment consistent
with United States legal principles and practice,
including the principle of due process.''
It sets deterrence of the filing of frivolous
claims as an objective, ``in addition to the prompt
elimination of frivolous claims.
The Senate Amendment seeks to establish
``procedures to enhance opportunities for public input
into the formulation of government positions.''
The Senate Amendment seeks to establish a single
appellate body to review decisions by arbitration
panels 'in investor-state dispute settlement cases.
Also, unlike the House Amendment, the Senate Amendment
does not prescribe a standard of review for an eventual
appellate body.
Intellectual Property: The Senate Amendment contains an
objective to respect the Declaration on the TRIPS Agreement and
Public Health, adopted by the World Trade Organization at the
Fourth Ministerial Conference at Doha, Qatar on November 14,
2001.''
Trade in Agriculture: The Senate Amendment's negotiating
objective on export subsidies differs from the House Amendment,
stating that an objective of the United States is ``seeking to
eliminate all export subsidies on agricultural commodities
while maintaining bona fide food aid and preserving U.S.
agriculture development and export credit programs that allow
the U.S. to compete with other foreign export promotion
efforts.'' The Senate Amendment also provides that it is a
negotiating objective of the United States to ``strive to
complete a general multilateral round in the WTO by January 1,
2005, and seek the broadest market access possible in
multilateral, regional, and bilateral negotiations, recognizing
the effect that simultaneous sets of negotiations may have on
US import-sensitive commodities (including those subject to
tariff-rate quotas).''
Human Rights and Democracy: The Senate Amendment contains
a negotiating objective ``to obtain provisions in trade
agreements that require parties to those agreements to strive
to protect internationally recognized civil, political, and
human rights.''
Dispute Settlement: The Senate Amendment contains a
negotiating objective absent in the House Amendment ``to seek
improved adherence by panels convened under the WTO
Understanding on Rules and Procedures Governing the Settlement
of Disputes and by the WTO Appellate Body to the standard of
review applicable under the WTO Agreement involved in the
dispute, including greater deference, where appropriate, to the
fact finding and technical expertise of national investigating
authorities.''
Border Taxes: The Senate Amendment contains an objective
absent from the House Amendment on border taxes. The objective
seeks ``to obtain a revision of the WTO rules with respect to
the treatment of border adjustments for internal taxes to
redress the disadvantage to countries relying primarily on
direct taxes for revenue rather than indirect taxes.'' The
objective is addressed to a decision by the WTO Dispute
Settlement Body holding the foreign sales corporation
provisions of the Internal Revenue Code to be inconsistent with
WTO rules.
Textiles: The Senate Amendment contains an extensive
objective on opening foreign markets to U.S. textile exports.
There is no similar provision in the House Amendment.
Worst Forms of Child Labor: The Senate Amendment contains
a negotiating objective to prevent distortions in the conduct
of international trade caused by the use of the worst forms of
child labor and to redress unfair and illegitimate competition
based upon the use of the worst forms of child labor.
Conference agreement
The Senate recedes to the House with several
modifications. With respect to the overall negotiating
objectives, the Conferees agree to the overall negotiating
objective regarding small business in section 2102(a)(8) of the
Senate amendment. Second, the Conferees agree to an overall
negotiating objective to promote universal compliance with ILO
Declaration 182 concerning the worst forms of child labor.
With respect to the principal negotiating objectives, the
Conferees agree to expand the negotiating objective on
intellectual property to respect the Declaration on the TRIPS
Agreement and Public Health, adopted by the WTO at Doha
(section 2102(b)(4)(c) of the Senate amendment).
With respect to the principal negotiating objectives
regarding foreign investment, the Conferees believe that it is
a priority for negotiators to seek agreements protecting the
rights of U.S. investors abroad and ensuring the existence of a
neutral investor-state dispute settlement mechanism. At the
same time, these protections must be balanced so that they do
not come at the expense of making Federal, State and local laws
and regulations more vulnerable to successful challenges by
foreign investors than by similarly situated U.S. investors.
No Greater Rights: The House recedes to the Senate with a
technical modification to clarify that foreign investors in the
United States are not accorded greater substantive rights with
respect to investment protections than United States investors
in the United States. That is, the reciprocal obligations
regarding investment protections that the United States
undertakes in pursuing its goals should not result in foreign
investors being entitled to compensation for government actions
where a similarly situated U.S. investor would not be entitled
to any form of relief, while ensuring that U.S. investors
abroad can challenge host government measures which violate the
terms of the investment agreement. Thus, this language
expresses Congress' direction that the substantive investment
protections (e.g., expropriation, fair and equitable treatment,
and full protection and security) should be consistent with
United States legal principles and practice and not provide
greater rights to foreign investors in the United States.
This language applies to substantive protections only and
is not applicable to procedural issues, such as access to
investor-state dispute settlement. The Conferees recognize that
the procedures for resolving disputes between a foreign
investor and a government may differ from the procedures for
resolving disputes between a domestic investor and a government
and may be available at different times during the dispute.
Thus, the ``no greater rights'' direction does not, for
instance, apply to such issues as the dismissal of frivolous
claims, the exhaustion of remedies, access to appellate
procedures, or other similar issues.
The Conferees also agree that negotiators should seek to
provide for an appellate body, or similar mechanism to provide
coherence to the interpretations of investment provisions in
trade agreements.
With respect to the principal negotiating objective on
agriculture, the Conferees agree to section 2102(b)(10)(A)(iii)
and (xv) of the House amendment, in lieu of section
2102(b)(10)(A)(iii) of the Senate amendment. The Conferees also
accept section2102(b)(10)(A)(xvi) of the Senate amendment on
the timing and sequence of WTO agriculture negotiations relative to
other negotiations.
The Conferees agree to section 2102(b)(13)(C) of the
Senate amendment, relating to dispute settlement in dumping,
subsidy, and safeguard cases, as modified, to seek adherence by
WTO panels to the applicable standard of review.
The Conferees recognize the importance of preserving the
ability of the United States to enforce rigorously its trade
remedy laws, including the antidumping, countervailing duty and
safeguard laws. Because this issue is significant to many
Members of Congress in both the House and Senate, the Conferees
have made this priority a principal negotiating objective.
Negotiators must also avoid agreements that lessen the
effectiveness of domestic and international disciplines on
unfair trade, as well as domestic and international safeguard
provisions. In addition, section 2102(b)(14)(B) directs the
President to address and remedy market distortions that lead to
dumping and subsidization, including overcapacity,
cartelization, and market-access barriers.
The Conferees agree to section 2012(b)(14) of the Senate
amendment stating that the United States should seek a revision
of WTO rules on the treatment of border adjustments for
internal taxes to redress the disadvantage to countries relying
primarily on direct taxes for revenue rather than indirect
taxes. The Conferees agree that such a revision of WTO rules is
one among other options for the United States, including
domestic legislation, to redress such a disadvantage.
The Conferees agree to include as a principal negotiating
objective to obtain competitive market opportunities for U.S.
exports of textiles substantially equivalent to those for
foreign textiles in the United States.
The Conferees agree to a principal negotiating objective
concerning the worst forms of child labor, to seek commitments
by trade agreement parties to vigorously enforce their own laws
prohibiting the worst forms of child labor.
SEC. 2102(C)--PROMOTION OF CERTAIN PRIORITIES
Present/expired law
No provision.
House amendment
Section 2102(c) of the House amendment to H.R. 3009 sets
forth certain priorities for the President to address. These
provisions include seeking greater cooperation between WTO and
the ILO; seeking to establish consultative mechanisms among
parties to trade agreements to strengthen the capacity of U.S.
trading partners to promote respect for core labor standards;
seeking to seek to establish consultative mechanisms among
parties to trade agreements to strengthen the capacity of U.S.
trading partners to develop and implement standards for
environment and human health based on sound science; conducting
environmental reviews of future trade and investment
agreements, consistent with Executive Order 13141 and its
relevant guidelines; reviewing the impact of future trade
agreements on U.S. employment, modeled after Executive Order
13141; taking into account, in negotiating trade agreements,
protection of legitimate health or safety, essential security,
and consumer interests; requiring the Secretary of Labor to
consult with foreign parties to trade negotiations as to their
labor laws and providing technical assistance where needed;
reporting to Congress on the extent to which parties to an
agreement have in effect laws governing exploitative child
labor; preserving the ability of the United States to enforce
rigorously its trade laws, including antidumping and
countervailing duty laws, and avoiding agreements which lessen
their effectiveness; ensuring that U.S. exports are not subject
to the abusive use of trade laws, including antidumping and
countervailing duty laws, by other countries; continuing to
promote consideration of Multilateral Environmental Agreements
(MEAs) and consulting with parties to such agreements regarding
the consistency of any MEA that includes trade measures with
existing environmental exceptions under Article XX of the GATT.
In addition, USTR, twelve months after the imposition of
a penalty or remedy by the United States permitted by an
agreement to which this Act applies, is to report to the
Committee on the effectiveness of remedies applied under U.S.
law to enforce U.S. rights under trade agreements. USTR shall
address whether the remedy was effective in changing the
behavior of the targeted party and whether the remedy had any
adverse impact on parties or interests not party to the
dispute.
Finally, section 2102(c) would direct the President to
seek to establish consultative mechanisms among parties to
trade agreements to examine the trade consequences of
significant and unanticipated currency movements and to
scutinize whether a foreign government engaged in a pattern of
manipulating its currency to promote a competitive advantage in
international trade.
Senate amendment
With several notable exceptions, the priorities set forth
in section 2102(c) of the Senate Amendment are identical to the
priorities set forth in the House Amendment. The exceptions
are:
With respect to the study that the President must perform
on the impact of future trade agreements on employment, the
Senate Amendment requires the President to examine particular
criteria, as follows: the impact on job security, the level of
compensation of new jobs and existing jobs, the displacement of
employment, and the regional distribution of employment,
utilizing experience from previous trade agreements and
alternative models of employment analysis. The Senate Amendment
also requires that the report be made available to the public.
The Senate Amendment requires that, in connection with
new trade agreement negotiations, the President shall ``submit
to the Committee on Ways and Means of the House of
Representatives and the Committee on Finance of the Senate a
meaningful labor rights report of the country, or countries,
with respect to which the President is negotiating.''
The Senate Amendment adds to the House Amendment priority
on preserving the ability of the United States to enforce
vigorously its trade laws, by including U.S. ``safeguards'' law
in the list of laws at issue. This is the U.S. law authorizing
the President to provide relief to parties seriously injured or
threatened with serious injury due to surges of imports. The
priority in the Senate Amendment also directs the President to
remedy certain market distorting measures that underlie unfair
trade practices.
Conference agreement
The Senate recedes to the House amendment with several
modifications. With respect to the worst forms of child labor,
the Conferees agree to expand section 2102(c)(2) of the House
amendment to include the worst forms of child labor within
requirement to seek to establish consultative mechanisms to
strengthen the capacity of U.S. trading partners to promote
respect for core labor standards.
The Conferees agree to modify section 2105(c)(5) of the
House amendment to require the President to report on impact of
future trade agreements on US employment, including on labor
markets, modeled after E.O. 13141 to the extent appropriate in
establishing procedures and criteria, and to make the report
public.
With respect to the labor rights report in section
2102(c)(8) of both bills, the Conferees agree to the Senate
provision. Furthermore, the Conferees agree to section
2107(b)(2)(E) of the Senate amendment to require that
guidelines for the Congressional Oversight Group include the
time frame for submitting this report.
SEC. 2102(D)--CONSULTATIONS, ADHERENCE TO OBLIGATIONS UNDER URUGUAY
ROUND AGREEMENTS
Present/expired law
No provision.
House amendment
Section 2102(d) of the House amendment to H.R. 3009
requires that USTR consult closely and on a timely basis with
the Congressional Oversight Group appointed under section 2107.
In addition, USTR would be required to consult closely
(including immediately before the initialing of an agreement)
with the congressional advisers on trade policy and
negotiations appointed under section 161 of the Trade Act of
1974, as well as the House Committee on Ways and Means, the
Senate Committee on Finance, and the Congressional Oversight
Group. With regard to negotiations concerning agriculture
trade, USTR would also be required to consult with the House
and Senate Committees on Agriculture.
In determining whether to enter into negotiations with a
particular country, section 2102(e) would require the President
to take into account whether that country has implemented its
obligations under the Uruguay Round Agreements.
Senate amendment
Section 2102(d) of the Senate amendment is identical to
the House provision in the House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2103--TRADE AGREEMENTS AUTHORITY
Present/expired law
Tariff proclamation authority. Section 1102(a) of the
1988 Act provided authority to the President to proclaim
modifications in duties without the need for Congressional
approval, subject to certain limitations. Specifically, for
rates that exceed 5 percent ad valorem, the President could not
reduce any rate of duty to a rate less than 50 percent of the
rate of duty applying on the date of enactment. Rates at or
below 5 percent could be reduced to zero. Any duty reduction
that exceeded 50 percent of an existing duty higher than 5
percent or any tariff increase had to be approved by Congress.
Staging authority required that duty reductions on any
article could not exceed 3 percent per year, or one-tenth of
the total reduction, whichever is greater, except that staging
was not required if the International Trade Commission
determined there was no U.S. production of that article.
Negotiation of bilateral agreements. Section 1102(c) of
the 1988 Act set forth three requirements for the negotiation
of a bilateral agreement:
The foreign country must request the negotiation of the
bilateral agreement;
The agreement must make progress in meeting applicable
U.S. trade negotiating objectives; and
The President must provide written notice of the
negotiations to the Committee on Ways and Means and the
Committee on Finance of the Senate and consult with these
committees.
The negotiations could proceed unless either Committee
disapproved the negotiations within 60 days prior to the 90
calendar days advance notice required of entry into an
agreement (described below).
Negotiation of multilateral non-tariff agreements. With
respect to multilateral agreements, section 1102(b) of the 1988
Act provided that whenever the President determines that any
barrier to, or other distortion of, international trade unduly
burdens or restricts the foreign trade of the United States or
adversely affects the U.S. economy, or the imposition of any
such barrier or distortion is likely to result in such a
burden, restriction, or effect, he may enter into a trade
agreement with the foreign countries involved. The agreement
must provide for the reduction or elimination of such barrier
or other distortion or prohibit or limit the imposition of such
a barrier or distortion.
Provisions qualifying for fast track procedures. Section
1103(b)(1)(A) of the 1988 Act provided that fast track apply to
implementing bills submitted with respect to any trade
agreements entered into under the statute. Section 151(b)(1) of
the Trade Act of 1974 further defined ``implementing bill'' as
a bill containing provisions ``necessary or appropriate'' to
implement the trade agreement, as well as provisions approving
the agreement and the statement of administrative action.
Time period. The authority applied with respect to
agreements entered into before June 1, 1991, and until June 1,
1993 unless Congress passed an extension disapproval
resolution. The authority was then extended to April 15, 1994,
to cover the Uruguay Round of multilateral negotiations under
the General Agreement on Tariffs and Trade.
House amendment
Section 2103 of the House amendment provides:
Proclamation authority. Section 2103(a) would provide the
President the authority to proclaim, without Congressional
approval, certain duty modifications in a manner very similar
to the expired provision. Specifically, for rates that exceed 5
percent ad valorem, the President would not be authorized to
reduce any rate of duty to a rate less than 50 percent of the
rate of duty applying on the date of enactment. Rates at or
below 5 percent ad valorem could be reduced to zero. Any duty
reduction that exceeded 50 percent of an existing duty higher
than 5 percent or any tariff increase would have to be approved
by Congress.
In addition, section 2103(a) would not allow the use of
tariff proclamation authority on import sensitive agriculture.
Staging authority would require that duty reductions on
any article could not exceed 3 percent per year, or one-tenth
of the total reduction, whichever is greater, except that
staging would not be required if the International Trade
Commission determined there is no U.S. production of that
article.
These limitations would not apply to reciprocal
agreements to eliminate or harmonize duties negotiated under
the auspices of the World Trade Organization, such as so-called
``zero-for-zero'' negotiations.
Agreements on tariff and non-tariff barriers. Section
2103(b)(1) would authorize the President to enter into a trade
agreement with a foreign country whenever he determined that
any duty or other import restriction or any other barrier to or
distortion of international trade unduly burdens or restricts
the foreign trade of the United States or adversely affects the
U.S. economy, or the imposition of any such barrier or
distortion is likely to result in such a burden, restriction,
or effect. The agreement must provide for the reduction or
elimination of such barrier or other distortion or prohibit or
limit the imposition of such a barrier or distortion. No
distinction would be made between bilateral and multilateral
agreements.
Conditions. Section 2103(b)(2) would provide that the
special implementing bills procedures may be used only if the
agreement makes progress in meeting the applicable objectives
set forth in section 2102(a) and (b) and the President
satisfies the consultation requirements set forth in section
2104.
Bills qualifying for trade authorities procedures.
Section 2103(b)(3)(A) would provide that bills implementing
trade agreements may qualify for trade promotion authority TPA
procedures only if those bills consist solely of the following
provisions:
Provisions approving the trade agreement and statement
of administrative action; and
Provisions necessary or appropriate to implement the
trade agreement.
Time period. Sections 2103(a)(1)(A) and 2103(b)(1)(C)
would extend trade promotion authority to agreements entered
into before June 1, 2005. An extension until June 1, 2007,
would be permitted unless Congress passed a disapproval
resolution, as described under section 2103(c).
Senate amendment
In most respects, section 2103 of the Senate Amendment is
identical to section 2103 of the House Amendment. However,
there are several key differences, as follows:
The Senate Amendment limits the President's
proclamation authority with respect to ``import sensitive
agricultural products,'' a term defined in section 2113(5) of
the Senate Amendment. This limitation differs from the
limitation in the House Amendment, inasmuch as it includes
certain products subject to tariff rate quotas.
The Senate Amendment contains a provision making a
trade agreement implementing bill ineligible for ``fast track''
procedures if the bill modifies, amends, or requires
modification or amendment to certain trade remedy laws. A bill
that does modify, amend or require modification or amendment to
those laws is subject to a point of order in the Senate, which
may be waived by a majority vote.
The Senate Amendment requires the U.S. International
Trade Commission to submit a report to Congress on negotiations
during the initial period for which the President is granted
trade promotion authority. This report would be made in
connection with a request by the President to have such
authority extended.
Conference agreement
The Senate recedes to the House amendment with several
modifications. The Conferees agree to the new definition of
import sensitive agriculture in section 2103(a)(2)(B),
2104(b)(2)(A)(i), and 2113(5) of the Senate amendment to
encompass products subject to tariff rate quotas, as well as
products subject to the lowest tariff reduction in the Uruguay
Round.
The Conferees agree to section 2103(c)(3)(B) of the
Senate amendment, which requires the ITC to submit a report to
Congress by May 1, 2005 (if the President seeks extension of
TPA until June 2, 2007) analyzing the economic impact on the
United States of all trade agreements implemented between
enactment and the extension request.
SEC. 2104--CONSULTATIONS AND ASSESSMENT
Present/expired law
Section 102 of the Trade Act of 1974 and sections 1102(d)
and 1103 of the 1988 Act set forth the fast track requirements.
These provisions required the President, before entering into
any trade agreement, to consult with Congress as to the nature
of the agreement, how and to what extent the agreement will
achieve applicable purposes, policies, and objectives, and all
matters relating to agreement implementation. In addition,
before entering into an agreement, the President was required
to give Congress at least 90 calendar days advance notice of
his intent. The purpose of this period was to provide the
Congressional Committees of jurisdiction an opportunity to
review the proposed agreement before it was signed.
Section 135(e) of the Trade Act of 1974 required that the
Advisory Committee for Trade Policy and Negotiations meet at
the conclusion of negotiations for each trade agreement and
provide a report as to whether and to what extent the agreement
promotes the economic interests of the United States and
achieves the applicable overall and principal negotiating
objectives of section 1101 of the 1988 Act. The report was due
not later than the date on which the President notified
Congress of his intent to enter into an agreement. With regard
to the Uruguay Round, the report was due 30 days after the date
of notification.
House amendment
Section 2104 of the House amendment to H.R. 3009 would
establish a number of requirements that the President consult
with Congress. Specifically, section 2104(a)(1) would require
the President to provide written notice and consult with the
relevant committees at least 90 calendar days prior to entering
into negotiations. Section 2104(a)(c) also provides that
President shall meet with the Congressional Oversight Group
established under section 2107 upon a request of a majority of
its members. Trade promotion authority would not apply to an
implementing bill if both Houses separately agree to a
procedural disapproval resolution within any 60-day period
stating that the Administration has failed to notify or consult
with Congress.
Section 2104(b)(1) would establish a special consultation
requirement for agriculture. Specifically, before initiating
negotiations concerning tariff reductions in agriculture, the
President is to assess whether U.S. tariffs on agriculture
products that were bound under the Uruguay Round Agreements are
lower than the tariffs bound by that country. In his
assessment, the President would also be required to consider
whether the tariff levels bound and applied throughout the
world with respect to imports from the United States are higher
than U.S. tariffs and whether the negotiation provides an
opportunity to address any such disparity. The President would
be required to consult with the Committees on Ways and Means
and Agriculture of the House and the Committees on Finance and
Agriculture, Nutrition and Forestry of the Senate concerning
the results of this assessment and whether it is appropriate
for the United States to agree to further tariff reductions
under such circumstances and how all applicable negotiating
objectives would be met.
Section 2104(b)(2) provides special consultations on
import sensitive agriculture products. Specifically, before
initiating negotiations on agriculture and as soon as
practicable with respect to the Free Trade Area of the Americas
and WTO negotiations, USTR is to identify import sensitive
agriculture products and consult with the Committees on Ways
and Means and Agriculture of the House and the Committees
onFinance and Agriculture, Nutrition, and Forestry in the Senate
concerning whether any further tariff reduction should be appropriate,
and whether the identified products face unjustified sanitary or
phytosanitary barriers. USTR is also to request that the International
Trade Commission prepare an assessment of the probable economic effects
of any such tariff reduction on the U.S. industry producing the product
and on the U.S. economy as a whole. USTR is to then notify the
Committees of those products for which it intends to seek tariff
liberalization as well as the reasons. If USTR commences negotiations
and then identifies additional import sensitive agriculture products,
or a party to the negotiations requests tariff reductions on such a
product, then USTR shall notify the Committees as soon as practicable
of those products and the reasons for seeking tariff reductions.
Section 2104(c) would establish a special consultation
requirement for textiles. Specifically, before initiating
negotiations concerning tariff reductions in textiles and
apparel, the President is to assess whether U.S. tariffs on
textile and apparel products that were bound under the Uruguay
Round Agreements are lower than the tariffs bound by that
country. In his assessment, the President would also be
required to consider whether the tariff levels bound and
applied throughout the world with respect to imports from the
United States are higher than U.S. tariffs and whether the
negotiation provides an opportunity to address any such
disparity. The President would be required to consult with the
Committee on Ways and Means of the House and the Committee on
Finance of the Senate concerning the results of this assessment
and whether it is appropriate for the United States to agree to
further tariff reductions under such circumstances and how all
applicable negotiating objectives would be met.
In addition, section 2104(d) would require the President,
before entering into any trade agreement, to consult with the
relevant Committees concerning the nature of the agreement, how
and to what extent the agreement will achieve the applicable
purposes, policies, and objectives set forth in the House
amendment to H.R. 3009 and all matters relating, to
implementation under section 2105, including the general effect
of the agreement on U.S. laws.
Section 2104(e) would require that the report of the
Advisory Committee for Trade Policy and Negotiations under
section 135(e)(1) of the Trade Act of 1974 be provided not
later than 30 days after the date on which the President
notifies Congress of his intent to enter into the agreement
under section 2105(a)(1)(A).
Finally, section 2104(f) would require the President, at
least 90 days before entering into a trade agreement, to ask
the International Trade Commission to assess the agreement,
including the likely impact of the agreement on the U.S.
economy as a whole, specific industry sectors, and U.S.
consumers. That report would be due 90 days from the date after
the President enters into the agreement.
Senate amendment
The Senate Amendment is substantially similar to the
House bill, with the following exceptions:
Consultations on export subsidies and distorting
policies. Section 2104(b)(2)(A)(ii)(III) requires consultations
on whether nations producing identified products maintain
export subsidies or distorting policies that distort trade and
impact of policies on U.S. producers.
Consultations relating to fishing trade. Section
2104(b)(3) requires that for negotiations relating to fishing
trade, the Administration will keep fully apprised and on
timely basis consult with the House Resources Committee and the
Senate Commerce Committee.
Special reporting requirements on U.S. trade remedy laws.
Section 2104(d) provides that the President, at least 90
calendar days before the President enters into a trade
agreement, shall notify the House Ways and Means Committee and
the Senate Finance Committee in writing any amendments to U.S.
antidumping and countervailing duty laws (title VII of the
Tariff Act of 1930) or U.S. safeguard provisions (chapter 1 of
title II of the Trade Act of 1974) that the President proposes
to include in the implementing legislation. On the date that
the President transmits the notification, the President must
also transmit to the Committees a report explaining his reasons
for believing that amendments to these trade remedy laws are
necessary to implement the trade agreement and his reasons for
believing that such amendments are consistent with the
negotiating objective on this issue. Not later than 60 calendar
days after the date on which the President transmits
notification to the relevant committees, the Chairman and
ranking members of the House Ways and Means Committee and the
Senate Finance Committees shall issue reports stating whether
the proposed amendments described in the President's
notification are consistent with the negotiating objectives on
trade laws.
Conference agreement
The Senate recedes to the House with several
modifications. The Conferees agree to section
2104(b)(2)(A)(ii)(III) of the Senate amendment, which requires
consultations on whether other nations producing identified
products maintain export subsidies or distorting policies that
distort trade and impact of policies on U.S. producers. In
addition, the Conferees agree to section 2104(b)(3) of the
Senate amendment, which requires that for negotiations relating
to fishing trade, the Administration will keep fully apprised
and on timely basis consult with the House Resources Committee
and the Senate Commerce Committee.
Finally, the Conferees agree to include the notification
and report on changes to trade remedy laws in sections
2104(d)(3)(A) and (B) in the Senate amendment with
modifications. Given the priority that Conferees attach to
keeping U.S. trade remedy laws strong and ensuring that they
remain fully enforceable, the Conference agreement puts in
place a process requiring special scrutiny of any impact that
trade agreements may have on these laws. The process requires
the President, at least 180 calendar days beforethe day on
which he enters into a trade agreement, to report to the Committees on
Ways and Means and the Committee on Finance the range of proposals
advanced in trade negotiations and may be in the final agreement that
could require amendments to title VII of the Tariff Act of 1930 or to
chapter 1 of title II of the Trade Act of 1974; and how these proposals
relate to the objectives described in section 2102(b)(14).
The Conference agreement also provides a mechanism for
any Member in the House or Senate to introduce at any time
after the President's report is issued a nonbinding resolution
which states ``that the ______ finds that the proposed changes
to U.S. trade remedy laws contained in the report of the
President transmitted to the Congress on ______ under section
2104(d)(3) of the Bipartisan Trade Promotion Authority Act of
2002 with respect to ______, are inconsistent with the
negotiating objectives described in section 2102(b)(14) of that
Act.'', with the first blank space being filled in with either
the ``House of Representatives'' or the ``Senate'', as the case
may be, the second blank space filled in with the appropriate
date of the report, and the third blank space being filled in
with the name of the country or countries involved.
The resolution is referred to the Ways and Means and
Rules Committees in the House and the Finance Committee in the
Senate, and is privileged on the floor if it is reported by the
Committees. The Conference agreement allows only one resolution
(either a nonbinding resolution or a disapproval resolution)
per agreement to be eligible for the trade promotion authority
procedures contained in sections 152 (d) and (e) of the Trade
Act of 1974. The one resolution quota is satisfied for the
House only after the Ways and Means Committee reports a
resolution, and for the Senate only after the Finance Committee
reports a resolution.
The Conference agreement states that, with respect to
agreements entered into with Chile and Singapore, the report
referenced in section 2104(d)(3)(A) shall be submitted by the
President at least 90 calendar days before the day on which the
President enters into a trade agreement with either country.
SEC. 2105--IMPLEMENTATION OF TRADE AGREEMENTS
Present/expired law
Before entering into the draft agreement, the President
was required to give Congress 90 days advance notice (120 days
for the Uruguay Round) to provide an opportunity for revision
before signature. After entering into the agreement, the
President was required to submit formally the draft agreement,
implementing legislation, and a statement of administrative
action. Once the bill was formally introduced, there was no
opportunity to amend any portion of the bill--whether on the
floor or in committee. Consequently, before the formal
introduction took place, the committees of jurisdiction would
hold hearings, ``unofficial'' or ``informal'' mark-up sessions
and a ``mock conference'' with the Senate committees of
jurisdiction in order to develop a draft implementing bill
together with the Administration and to make their concerns
known to the Administration before it introduced the
legislation formally.
After formal introduction of the implementing bill, the
House committees of jurisdiction had 45 legislative days to
report the bill, and the House was required to vote on the bill
within 15 legislative days after the measure was reported or
discharged from the committees. Fifteen additional days were
provided for Senate committee consideration (assuming the
implementing bill was a revenue bill), and the Senate floor
action was required within 15 additional days. Accordingly, the
maximum period for Congressional consideration of an
implementing bill from the date of introduction was 90
legislative days. Amendments to the legislation were not
permitted once the bill was introduced; the committee and floor
actions consisted of ``up or down'' votes on the bill as
introduced.
Finally, section 1103(d) of the 1988 Act specified that
the fast track rules were enacted as an exercise of the
rulemaking power of the House and the Senate, with the
recognition of the right of either House to change the rules at
any time.
House amendment
Under Section 2105 of the House amendment to H.R. 3009,
the President would be required, at least 90 days before
entering into an agreement, to notify Congress of his intent to
enter into the agreement. Section 2105(a) also would establish
a new requirement that the President, within 60 days of signing
an agreement, submit to Congress a preliminary list of existing
laws that he considers would be required to bring the United
States into compliance with agreement.
Section 2105(b) would provide that trade promotion
authority would not apply if both Houses separately agree to a
procedural disapproval resolution within any 60-day period
stating that the Administration failed to notify or consult
with Congress, which is defined as failing or refusing to
consult in accordance with section 2104 or 2105, failing to
develop or meet guidelines under section 2107(b), failure to
meet with the Congressional Oversight Group, or the agreement
fails to make progress in achieving the purposes. policies,
priorities, and objectives of the Act. In a change from the
expired law, such a resolution may be introduced by any Member
of the House or Senate. Only one such privileged resolution
would be permitted to be considered per trade agreement per
Congress.
Most of the remaining provisions are identical to the
expired law. Specifically, section 2105(a) would require the
President, after entering into agreement, to submit formally
the draft agreement, the implementing legislation, and a
statement of administrative action to Congress, and there would
be no time limit to do so, but with the new requirement that
the submission be made on a date on which both Houses are in
session, The procedures of section 151 of the Trade Act of 1974
would then apply. Specifically, on the same day as the
President formally submits the legislation, the bill would be
introduced (by request) by the Majority Leaders of the House
and the Senate. After formal introduction of the legislation,
the House Committees of jurisdiction would have 45 legislative
days to report the bill. The House would be required to vote on
thebill within 15 legislative days after the measure was
reported or discharged from the Committees. Fifteen additional days
would be provided for Senate Committee consideration (assuming the
implementing bill was a revenue bill), and Senate floor action would be
required within 15 additional days. Accordingly, the maximum period for
Congressional consideration of the implementing bill from the date of
introduction would be 90 legislative days.
As with the expired provisions, once the bill has been
formally introduced, no amendments would be permitted either in
Committee or floor action, and a straight ``up or down'' vote
would be required. Of course, before formal introduction, the
bill could be developed by the Committees of jurisdiction
together with the Administration during the informal Committee
mark-up process.
Finally, as with the expired provision, section 2105(c)
specifies that sections 2105(b) and 3(c) are enacted as an
exercise of the rulemaking power of the House and the Senate,
with the recognition of the right of either House to change the
rules at any time.
Senate amendment
The Senate Amendment is substantially similar to the
House Bill, with the following exception:
Reporting requirements. Section 2105(a)(1)(A)(ii)
requires the President to transmit to the House Ways and Means
Committee and the Senate Finance Committee the notification and
report described in section 2104(d)(3)(A) regarding changes to
U.S. trade remedy laws.
Disclosure Requirements. Section 2105(a)(4) of the Senate
bill specifies that any trade agreement or understanding with a
foreign government (oral or written) not disclosed to Congress
will not be considered part of trade agreement approved by
Congress and shall have no effect under U.S. law or in any
dispute settlement body.
Senate Procedures. Section 2105(b)(1)(C)(i)(II) provides
that any Member of the Senate may introduce a procedural
disapproval resolution, and that that resolution will be
referred to the Senate Finance Committee. Section
2105(b)(1)(C)(iv) provides that the Senate may not consider a
disapproval resolution that has not been reported by the Senate
Finance Committee.
Conference agreement
The Senate recedes to the House amendment with several
modifications. The Conferees agree to section 2105(a)(4) of the
Senate amendment, which specifies that any trade agreement or
understanding with a foreign government (oral or written) not
disclosed to Congress will not be considered part of trade
agreement approved by Congress and shall have no effect under
U.S. law or in any dispute settlement body. The Conferees also
agree to sections 2105(b)(1)(C)(i)(II) and (b)(1)(C)(iv) of the
Senate amendment, which applies the same procedures for
consideration of bills in the Senate as for the House.
Finally, the Conferees agree to section 2105(b)(2) of the
Senate amendment with modifications, which requires the
Secretary of Commerce, in consultation with the Secretaries of
State and Treasury, the Attorney General, and the United States
Trade Representative, to transmit to Congress a report setting
forth the strategy of the executive branch to address concerns
of Congress regarding whether dispute settlement panels and the
Appellate Body of the WTO have added to obligations or
diminished rights of the United States, as described in section
2101(b)(3). Trade authorities procedures shall not apply to any
implementing bill with respect to an agreement negotiated under
the auspices of the WTO unless the Secretary of Commerce has
issued such report prior to December 31, 2002.
SEC. 2106--TREATMENT OF CERTAIN TRADE AGREEMENTS
Present/expired law
No provision.
House amendment
Section 2106 of the House amendment to H.R. 3009 exempts
agreements resulting from ongoing negotiations with Chile or
Singapore, an agreement establishing a Free Trade Area of the
Americas, and agreements concluded under the auspices of the
WTO from prenegotiation consultation requirements of section
2104(a) only. However, upon enactment of H.R. 3009, the
Administration is required to consult as to those elements set
forth in section 2104(a) as soon as feasible.
Senate amendment
Section 2106 of the Senate amendment is substantially
similar to the House bill.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2107--CONGRESSIONAL OVERSIGHT GROUP
Present/expired law
No provision.
House amendment
Section 2107 of the House amendment to H.R. 3009 would
require the Chairman of the Committee on Ways and Means and the
Chairman of the Committee on Finance to chair and convene,
sixty days after the effective date of this Act, the
Congressional Oversight Group. The Group would be comprised of
the following Members of the House: the Chairman and Ranking
Member of the Committee on Ways and Means and three additional
members of the Committee (not more than two of whom are from
the same party), and the Chairman and Ranking Member of the
Committees which would have, under the Rules of the House,
jurisdiction over provisions of law affected by a trade
negotiation. The Group would be comprised of the following
Members of the Senate: the Chairman and Ranking Member of the
Committee on Finance and three additional members of the
Committee (not more than two of whom are from the same party),
and the Chairman and Ranking Member of the Committees which
would have, under the Rules of the Senate, jurisdiction over
provisions of law affected by a trade negotiation.
Members are to be accredited as official advisors to the
U.S. delegation in the negotiations. USTR is to develop
guidelines to facilitate the useful and timely exchange of
information between USTR and the Group, including regular
briefings, access to pertinent documents, and the closest
possible coordination at all critical periods during the
negotiations, including at negotiation sites.
Finally, section 2107(c) provides that upon the request
of a majority of the Congressional Oversight Group, the
President shall meet with the Group before initiating
negotiations or any other time concerning the negotiations.
Senate amendment
Section 2107 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2108--ADDITIONAL IMPLEMENTATION AND ENFORCEMENT REQUIREMENTS
Present/expired law
No provision.
House amendment
Section 2108 of the House amendment to H.R. 3009 would
require the President to submit to the Congress a plan for
implementing and enforcing any trade agreement resulting from
this Act. The report is to be submitted simultaneously with the
text of the agreement and is to include a review of the
Executive Branch personnel needed to enforce the agreement as
well as an assessment of any U.S. Customs Service
infrastructure improvements required. The range of personnel to
be addressed in the report is very comprehensive, including
U.S. Customs and Department of Agriculture border inspectors,
and monitoring and implementing personnel at USTF, the
Departments of Agriculture, Commerce, and the Treasury, and any
other agencies as may be required.
Senate amendment
Section 2108 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2109--COMMITTEE STAFF
Present/expired law
No provision.
House amendment
Section 2109 of the House amendment to H.R. 3009 states
that the grant of trade promotion authority is likely to
increase the activities of the primary committees of
jurisdiction and the creation of the Congressional Oversight
Group under section 2107 will increase the participation of a
broader Members of Congress in the formulation of U.S. trade
policy and oversight of the U.S. trade agenda. The provision
specifies that the primary committees of jurisdiction should
have adequate staff to accommodate these increases in
activities.
Senate amendment
Section 2109 of the Senate amendment is identical to the
House amendment to H.R. 3009.
Conference agreement
The Conference agreement follows the House amendment and
the Senate amendment.
SEC. 2111--REPORT ON THE IMPACT OF TRADE PROMOTION AUTHORITY
Present/expired law
No provision.
House amendment
No provision.
Senate amendment
Section 2111 requires the International Trade Commission,
within one year following enactment of this Act, to issue a
report regarding the economic impact of the following trade
agreements: (1) The U.S.-Israel Free Trade Agreement; (2) the
U.S.-Canada Free Trade Agreement; (3) the North American Free
Trade Agreement (NAFTA); (4) The Uruguay Round Agreements,
which established the World Trade Organization; and (5) The
Tokyo Round of Multilateral Trade Negotiations.
Conference agreement
The House recedes to the Senate amendment.
SEC. 2112--SMALL BUSINESS
Present/expired law
No provision.
House amendment
No provision.
Senate amendment
WTO small business advocate. Section 2112(a) provides
that the U.S. Trade Representative shall pursue identification
of a small business advocate at the World Trade Organization
Secretariat to examine the impact of WTO agreements on the
interests of small businesses, address the concerns of small
businesses, and recommend ways to address those interests in
trade negotiations involving the WTO.
Assistant USTR responsible for small businesses. Section
2112(b) provides that the Assistant United States Trade
Representative for Industry and Telecommunications shall be
responsible for ensuring that the interests of small businesses
are considered in trade negotiations.
Conference agreement
The Senate recedes to the House amendment with a
modification. The Conferees agree to section 2112(b) of the
Senate amendment, which provides that the Assistant USTR for
Industry and Telecommunications will be responsible for
ensuring that the interests of small business are considered in
trade negotiations.
DIVISION C--ANDEAN TRADE PREFERENCE ACT
TITLE XXXI--ANDEAN TRADE PREFERENCE
SEC. 3101--SHORT TITLE
Present law
No provision.
House amendment
Section 3101 of H.R. 3009, as amended, provides that the
Act may be cited as the ``Andean Trade Promotion and Drug
Eradication Act.''
Senate amendment
Section 3101 provides that the Act may be cited as the
``Andean Trade Preference Expansion Act.''
Conference agreement
The Senate recedes.
SEC. 3102--FINDINGS
Present law
No provision.
House amendment
Section 1302 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.
Senate amendment
Section 3101 is identical.
Conference agreement
The conference agreement follows the House amendment and
the Senate amendment.
SEC. 3103--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 I
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.
House amendment
Section 3103 (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.
Senate amendment
Section 3102 of the bill replaces the list of excluded
products under section 204(b) of the current ATPA with a new
provision that extends duty preferences to most of those
products. The new preferences take the form of exceptions to
the general rule that the excluded products are not eligible
for duty-free treatment.
The enhanced preferences are made available to ``ATPEA
beneficiary countries.'' Paragraph (5) of section 204(b) of the
ATPA as amended by the present bill defines ATPEA beneficiary
countries as those countries previously designated by the
President as ``beneficiary countries'' (i.e., Bolivia,
Colombia, Ecuador, and Peru) which subsequently are designated
by the President as ``ATPEA beneficiary countries,'' based on
the President's consideration of additional eligibility
criteria.
In the event that the President did not designate a
current ``beneficiary country'' as an ``ATPEA beneficiary
country,'' that country would remain eligible for ATPA benefits
under the law as expired on December 4, 2001, but would not be
eligible for the enhanced benefits provided under the present
bill.
Footwear not eligible for duty-free treatment under GSP
receives the same tariff treatment as like products from
Mexico, except that duties on articles in particular tariff
subheadings are to be reduced by 1/15 per year.
The Senate Amendment provides special treatment for rum
and tafia, allowing them to receive the same tariff treatment
as like products from Mexico. The bill also allows certain
handbags, luggage, flat goods, work gloves, and leather wearing
apparel to receive the same tariff treatment as like products
from Mexico.
Under the bill, the President is authorized to proclaim
duty-free treatment for tuna that is harvested by United States
or ATPEA vessels, subject to a quantitative yearly cap of 20
percent of the domestic United States tuna pack in the
preceding year.
Conference agreement
Senate recedes on the authority of President to proclaim
duty-free treatment for particular 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.
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.
House recedes on the treatment of tuna with an amendment
to: (1) retain U.S. or Andean flagged vessel rule of origin
requirement in Senate amendment; (2) authorize the President to
grant duty-free treatment for Andean exports of tuna packed in
flexible (e.g., foil), airtight containers weighing with their
contents not more than 6.8 kg each; and (3) update calculation
of current MFN tariff-rate quota to be an amount based on 4.8
percent of apparent domestic consumption of tuna in airtight
containers rather than domestic production.
Eligible Apparel Articles
Present law
Under the ATPA, apparel articles are on the list of
products excluded from eligibility for duty-free treatment.
House amendment
Under Section 3103, 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 alsomade 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% of U.S. imports growing to 6%
of U.S. imports in 2006, measured in square meter equivalents.
Senate amendment
Paragraph (2) of section 204(b) of the ATPA as amended by
section 3102 of the present bill extends duty-free treatment to
certain textile and apparel articles from ATPEA beneficiary
countries. The provision divides articles eligible for this
treatment into several different categories and limits duty-
free treatment to a period defined as the ``transition
period.'' The transition period is defined in paragraph (5) of
section 204(b) of the ATPA as amended to be the period from
enactment of the present bill through the earlier of February
28, 2006 or establishment of a FTAA.
In general, the different categories of textile and
apparel articles eligible for duty-free treatment are defined
according to the origin of the yarn and fabric from which the
articles are made. Under the first category, apparel sewn or
otherwise assembled in one or more ATPEA beneficiary countries
is eligible for duty-free treatment if it is made exclusively
from one or a combination of several sub-categories of
components, as follows:
(1) United States fabric, fabric components, or
knit-to-shape components, made from yarns wholly formed
in the United States;
(2) A combination of both United States and ATPEA
beneficiary country components knit-to-shape from yarns
wholly formed in the United States;
(3) ATPEA beneficiary country fabric, fabric
components, or knit-to-shape components, made from
yarns wholly formed in one or more ATPEA beneficiary
countries, if the constituent fibers are primarily
llama or alpaca hair; and
(4) Fabrics or yarns, regardless of origin, if such
fabrics or yarns have been deemed, under the North
American Free Trade Agreement, not to be widely
available in commercial quantities in the United
States. A separate provision of section 204(b) of the
ATPA as amended by the present bill sets forth a
process for interested parties to petition the
President for inclusion of additional yarns and fabrics
in the ``short supply'' list. This process includes
obtaining advice from the United States International
Trade Commission and industry advisory groups, and
consultation with the Committee on Finance of the
Senate and the Committee on Ways and Means of the House
of Representatives.
A second category of apparel articles eligible for duty-
free treatment is apparel articles knit-to-shape (except socks)
in one or more ATPEA beneficiary countries from yarns wholly
formed in the United States. To qualify under this category,
the entire article must be knit-to-shape--as opposed to being
assembled from components that are themselves knit-to-shape.
A third category of apparel articles eligible for duty-
free treatment is apparel articles wholly assembled in one or
more ATPEA beneficiary countries from fabric or fabric
components knit, or components knit-to-shape in one or more
ATPEA beneficiary countries from yarns wholly formed in the
United States. The quantity of apparel eligible for this
benefit is subject to an annual cap. The cap is set at 70
million square meter equivalents for the one-year period
beginning March 1, 2002. The cap will increase by 16 percent,
compounded annually, in each succeeding one-year period,
through February 28, 2006.
Thus, the cap applied to this category in each year
following enactment will be as follows:
70 million square meter equivalents (SME) in the
year beginning March 1, 2002;
81.2 million SME in the year beginning March 1,
2003;
94.19 million SME in the year beginning March 1,
2004; and
109.26 million SME in the year beginning March 1,
2005.
A separate provision makes clear that goods otherwise
qualifying under the latter category will not be disqualified
if they happen to contain United States fabric made from United
States yarn.
A fourth category of apparel eligible for duty-free
treatment under the Senate bill is brassieres that are cut or
sewn, or otherwise assembled, in one or more ATPEA beneficiary
countries, or in such countries and the United States. This
separate category requires that, in the aggregate, brassieres
manufactured by a given producer claiming duty-free treatment
for such products contain certain quantities of United States
fabric.
A fifth category of textile and apparel eligible for
duty-free treatment is handloomed, handmade, and folklore
articles.
A final category of textile and apparel goods eligible
for duty-free treatment is textile luggage assembled in an
ATPEA beneficiary country from fabric and yarns formed in the
United States.
In addition to the foregoing categories, the bill sets
forth special rules for determining whether particular textile
and apparel articles qualify for duty-free treatment.
Conference agreement
In general the conferees agreed to follow the House
amendment on apparel provisions with the exception that the
House receded to the Senate on the treatment of textile
luggage. With respect to category 2 in the House bill relating
to 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 are in chief
weight of llama, or alpaca, conferees agreed to include vicuna and
calculate product eligibility based on chief value instead of chief
weight. Also, conferees agreed to cap imports of apparel made from
regional fabric and regional yarn (category 4 in the House bill) at 2%
of U.S. imports growing to 5% of U.S. imports in 2006, measured in
square meter equivalents.
It is the intention of the conferees that in cases where
fabrics or yarns determined by the President to be in short
supply impart the essential character to an article, the
remaining textile components may be constructed of fabrics or
yarns regardless of origin, as in Annex 401 of the NAFTA. In
cases where the fabrics or yarns determined by the President to
be in short supply do not impart the essential character of the
article, the article shall not be ineligible for preferential
treatment under this Act because the article contains the short
supply fabric or yarn.
Special Origin Rule for Nylon Filament Yarn
House amendment
No provision.
Senate amendment
Articles otherwise eligible for duty-free treatment and
quota free treatment under the bill are not ineligible because
they contain certain nylon filament yarn (other than
elastomeric yarn) from a country that had an FTA with the U.S.
in force prior to January 1, 1995.
Conference agreement
House recedes.
Dyeing, Finishing and Printing Requirement
House amendment
New requirement that apparel made of U.S. knit or woven
fabric assembled in CBTPA country qualifies for benefits only
if the U.S. knit or woven fabric is dyed and finished in the
United States. Apparel made of U.S. knit or woven fabric
assembled in an Andean beneficiary country qualifies for
benefits only if the U.S. knit or woven fabric is dyed and
finished in the United States.
Senate provision
No provision.
Conference agreement
Senate recedes.
Penalties for Transshipment
Present law
The Tariff Act of 1930, as amended, provides for civil
monetary penalties for unlawful transshipment. These include
penalties under 19 U.S.C. 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.
House amendment
Section 3103 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.
Senate amendment
In amending, section 204(b) of the ATPA, section 3102 of
the present bill provides special penalties for transshipment
of textile and apparel articles from an ATPEA beneficiary
country. Transshipment is defined as claiming duty-free
treatment for textileand apparel imports on the basis of
materially false information. An exporter found to have engaged in such
transshipment (or a successor of such exporter) shall be denied all
benefits under the ATPA for a period of two years.
The bill further provides penalties for an ATPEA
beneficiary country that fails to cooperate with the United
States in efforts to prevent transshipment. Where textile and
apparel articles from such country are subject to quotas on
importation into the United States consistent with WTO rules,
the President must reduce the quantity of such articles that
may be imported into the United States by three times the
quantity of transshipped articles, to the extent consistent
with WTO rules.
Conference agreement
Conference agreement follows House and Senate bill.
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.
House amendment
Under Section 3103 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.
Senate amendment
The bill establishes similar textile and apparel
safeguard provisions based on the NAFTA textile and apparel
safeguard provision.
Conference agreement
Conference Agreement follows House and Senate bill.
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 as a 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.
House amendment
The House amendment 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.
Senate amendment
Section 3102(5) contains identical provisions.
Conference agreement
Conference Agreement follows the House and Senate
amendments. In evaluating a potential beneficiary's compliance
with its WTO obligations, the conferees expect the President to
take into 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 Conferees intent 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.
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 priceson imports. The
Conferees'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
Conferees 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% common external tariff to imported pet food.
With respect to whether beneficiary countries are
following established WTO rules, the Conferees believe it is
important for Andean governments to provide transparent and
non-discriminatory regulatory procedures. Unfortunately, the
Conferees know of instances where regulatory policies in Andean
countries are opaque, unpredictable, and arbritarily applied.
As such, it is the Conferees'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.
Determination regarding retention of designation
Present law
Under Section 203(e) of the ATPA, the President may
withdraw or suspend a country's beneficiary country
designation, or withdraw, suspend, or limit the application of
duty-free treatment to particular articles of a beneficiary
country, due to changed circumstances.
House amendment
Section 3102(b) amends section 203(e) of the ATPA to
provide that President may withdraw or suspend ATPA
designation, or withdraw, suspend or limit benefits is a
country's performance under eligibility criteria are no longer
satisfactory.
Senate amendment
Identical.
Conference agreement
Conference agreement follows the House amendment and
Senate amendment.
Reporting Requirements
Present law
Provides for: (1) an annual report by the International
Trade Commission on the economic impact of the bill and; (2) an
annual report by the Secretary of Labor on the impact of the
bill with respect to U.S. labor. Also under present law, USTR
is required to report triannually on operation of the program.
House amendment
Retains current law on reports.
Senate amendment
Senate bill requires same ITC and Labor reports as well
as an annual report by the Customs Service on compliance and
anti-circumvention on the part of beneficiary countries in the
area of textile and apparel trade. It also requires USTR to
report biannually on operation of the program.
Conference agreement
House recedes.
Petitions for review
Present law
No provision.
House amendment
No provision.
Senate amendment
Section 3102(e) of the bill directs the President to
promulgate regulations regarding the review of eligibility of
articles and countries under the ATPA. Such regulations are to
be similar to regulations governing the Generalized System of
Preferences petition process.
Conference agreement
House recedes.
SEC. 3104--TERMINATION OF DUTY-FREE TREATMENT
Present law
Duty-free treatment under the ATPA expires on December 4,
2001.
House amendment
Duty-free treatment terminates under the Act on December
31, 2006.
Senate amendment
Section 3103 of the bill amends section 208(b) of the
ATPA to provide for a termination date of February 28, 2006.
Basic ATPA benefits apply retroactively to December 4, 2001.
Conference agreement
House recedes on retroactivity for basic ATPA benefits;
Senate recedes on termination.
SEC. 3106--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.
House amendment
Sec. 3106 and 3107 of the House bill amends AGOA and
CBTPA to clarify that preferential treatment is provided to
knit-to-shape apparel articles assembled in beneficiary
countries.
Senate amendment
No provision.
Conference agreement
Senate recedes.
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'').
House amendment
Sec. 3107 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.
Senate amendment
No provision.
Conference agreement
Senate recedes
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% per year for first 3 years.
House amendment
Sec. 3106 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.
Senate amendment
No provision.
Conference agreement
Senate recedes.
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% per year for the first 3 years.
House amendment
Section 3106 of H.R 3006 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.
Senate amendment
No provision.
Conference agreement
Senate recedes
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.
House amendment
Section 3107 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. The House
amendment 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.
Senate amendment
No provision.
Conference agreement
Conference agreement follows House Amendment accept the
increase in the cap is limited to apparel products made with
regional or U.S. fabric and yarn. No increases in amounts of
apparel made of third-country fabric over current law.
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.
House amendment
Section 3107 corrects the yarn diameter in the AGOA
legislation so that sweaters knit to shape from merino wool of
a specific diameter are eligible.
Senate amendment
No provision.
Conference agreement
Senate recedes.
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 transitionperiod under the AGOA
regional fabric country cap.
House amendment
Section 5 allows Namibia and Botswana to use third
country fabric for the transition period under the AGOA
regional fabric country cap.
Senate amendment
No provision.
Conference agreement
Senate recedes.
TITLE XLI--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
SEC. 4101--EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES
Expired law
Section 505 of the Trade Act of 1974, as amended,
provides that no duty-free treatment under Title V (the
Generalized System of Preferences) shall remain in effect after
September 30, 2001.
House bill
The House amendment to H.R. 3009 would amend section 505
of the Trade Act of 1974 to authorize an extension through
December 31, 2002. It would also provide retroactive relief in
that, notwithstanding section 514 of the Tariff Act of 1930 or
any other provision of law, the entry of any article to which
duty-free treatment under Title V of the Trade Act of 1974
would have applied if the entry had been made on September 30,
2001, and was made after September 30, 2001, and before the
enactment of this Act, shall be liquidated or reliquidated as
free of duty and the Secretary of Treasury shall refund any
duty paid, upon proper request filed with the appropriate
Customs officer, within 180 days after the date of enactment.
Senate amendment
The Senate amendment authorizes an extension of GSP
through December 31, 2006. The extension is retroactive to
September 30, 2001, permitting importers to liquidate or
reliquidate entries made since that date and to seek a return
of duties paid on goods that would have entered the United
States free of duty, but for expiration of GSP.
The Senate Amendment also amends the definition of
``internationally recognized worker rights'' set forth in the
GSP statute (section 507(4) of the Trade Act of 1974).
Specifically, it adds to that definition ``a prohibition on
discrimination with respect to employment and occupation'' and
a ``prohibition of the worst forms of child labor.'' These two
prohibitions come from the International Labor Organization's
1998 Declaration on Fundamental Principles and Rights at Work,
which defines certain worker rights as ``fundamental.''
The GSP statute identifies certain criteria that the
President must take into account in determining whether to
designate a country as eligible for GSP benefits. Conversely, a
country's lapse in compliance with one or more of these
criteria may be grounds for withdrawal, suspension, or
limitation of benefits. Whether a country is taking steps to
afford its workers internationally recognized worker rights is
one of those criteria. The Senate Amendment seeks to make the
concept of ``internationally recognized worker rights'' as
defined for GSP consistent with the concept as defined by the
ILO.
Finally, the Senate Amendment establishes a new
eligibility criterion for GSP: ``A country is ineligible for
GSP if it has not taken steps to support the efforts of the
United States to combat terrorism.''
Conference agreement
The Conference agreement authorizes an extension of GSP
through December 31, 2006. Conferees approved the Senate
provision to include a prohibition on the worst forms of child
labor in the definition of internationally recognized worker
rights in Section 507(a) of the Trade Act of 1974. Conferees
declined to include the Senate provision on discrimination with
respect to employment in the definition of ``international
recognized worker rights under Sec. 507(a) of the Trade Act of
1974. Agreement follows the House and the Senate bill with
respect to providing retroactive relief.
DIVISION E--MISCELLANEOUS PROVISIONS
TITLE L--MISCELLANEOUS TRADE BENEFITS
Subtitle A--Wool Provisions
SEC. 5101--WOOL MANUFACTURER PAYMENT CLARIFICATION AND TECHNICAL
CORRECTIONS ACT
Present law
Title V of the Trade and Development Act of 2000 (Pub. L.
No. 106-200) included certain tariff relief for the domestic
tailored clothing and textile industries. The relief was
largely aimed at reducing the harmful affects of a ``tariff
inversion''--i.e., a tariff structure that levies higher duties
on the raw material (such as wool fabric) than on the finished
goods (such as mens' suits). A component of the relief to the
U.S. tailored clothing and textile industry was a refund of
duties paid in calendar year 1999, spread out over calendar
years 2000, 2001 and 2002. Pub. L. No. 106-2000, Sec. 505.
House amendment
No provision.
Senate amendment
The Senate bill amends section 505 of the Trade and
Development Act of 2000 to simplify the process for refunding
to eligible parties duties paid in 1999. Specifically, it
creates three special refund pools for each of the affected
wool articles (fabric, yarn, and fiber and top). Refunds for
importing manufacturers will be distributed in three
installments--the first and second on or before the date that
is 45 days after the date of enactment of the Wool Manufacturer
Payment and Clarification and Technical Corrections Act, and
the third on or before April 15, 2003. Refunds for nonimporting
manufacturers will be distributed in two installments--the
first on or before the date that is 120 days after the date of
enactment of the Wool Manufacturer Payment Clarification and
Technical Corrections Act, and the second on or before April
15, 2003.
The provision also streamlines the paperwork process, in
light of the destruction of previously filed claims and
supporting information in the September 11, 2001 attacks on the
World Trade Center in New York, New York. Finally, the
provision identifies all persons eligible for the refunds.
Conference agreement
The House recedes to the Senate.
SEC. 5102--DUTY SUSPENSION ON WOOL
Present law
Sections 501(a) and (b) of the Trade and Development Act
of 2000 provide temporary duty reductions for certain worsted
wool fabrics through 2003.
Section 501(d) limits the aggregate quantity of worsted
wool fabrics entered under heading 9902.51.11 from January 1 to
December 31 of each year, inclusive, to 2,500,000 square meter
equivalents, or such other quantity proclaimed by the President
pursuant to section 504(b)(3) of the Trade and Development Act.
Further, the section limits the aggregate quantity of worsted
wool fabrics entered under heading 9902.51.12 from January 1 to
December 31 of each year, inclusive, to 1,500,000 square meter
equivalents, or such other quantity proclaimed by the President
pursuant to section 504(b)(3) of the Trade and Development Act.
House amendment
No provision.
Senate bill
The Senate bill extends the temporary duty reductions on
fabrics of worsted wool from 2003 to 2005. The provision
increases the limitation on the quantity of imports of worsted
wool fabrics entered under heading 9902.51.11 to 3,500,000
square meter equivalents in calendar year 2002, and 4,500,000
square meter equivalents in calendar year 2003. Imports of
worsted wool fabrics entered under heading 9902.51.12 are
increased to 2,500,000 square meter equivalents in calendar
year 2002, and 3,500,000 square meter equivalents in calendar
year 2003.
The bill extends the payments made to manufacturers under
section 505 of the Trade and Development Act of 2000 and
requires an affidavit that the manufacturer will remain a
manufacturer in the United States as of January 1 of the year
of payment. The two additional payments will occur as follows:
the first to be made after January 1, 2004, but on or before
April 15, 2004, and the second after January 1, 2005, but on or
before April 15, 2005.
Finally, the bill extends the ``Wool Research Trust
Fund'' for two years through 2006.
Conference agreement
The House recedes to the Senate.
Subtitle B--Other Provisions
SEC. 5201--FUND FOR WTO DISPUTE SETTLEMENT
Present law
No applicable section.
House amendment
The provision authorizes a settlement fund within the
United States Trade Representative's Office in the amount of
$50 million for the use in settling disputes that occur related
to the World Trade Organization. The Trade Representative must
certify to the Secretary of the Treasury that the settlement is
in the best interest of the United States in cases of not more
than $10 million. For cases above $10 million, the Trade
Representative must make the same certification to the United
States Congress.
Senate bill
No provision.
Conference agreement
The Senate recedes to the House.
SEC. 5202--CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN
NUCLEAR FACILITIES
Present law
Under present law, certain steam or other vapor
generating boilers used in nuclear facilities imported into the
United States prior to December 31, 2003 are charged a duty
rate of 4.9 percent ad valorem. This rate took effect pursuant
to section 1268 of Public Law Number 106-476 (``Tariff
Suspension and Trade Act of 2000''). Previously, the rate had
been 5.2 percent ad valorem.
House amendment
No provision.
Senate amendment
Section 203 of the Senate amendment changes the duty rate
on certain steam or other vapor generating boilers used in
nuclear facilities to zero for such goods entered, or withdrawn
from warehouse for consumption, on or after January 1, 2002,
and on or before December 31, 2006. The provision was intended
to lower the cost of inputs into the operation of nuclear
facilities and thereby lower the cost of energy to consumers.
Committee agreement
The House recedes to the Senate.
SEC. 5203--SUGAR TARIFF RATE QUOTA CIRCUMVENTION
Present law
No applicable section.
House amendment
No provision.
Senate amendment
The Senate bill establishes a sugar anti-circumvention
program which requires the Secretary of Agriculture to identify
imports of articles that are circumventing tariff-rate quotas
on sugars, syrups, or sugar-containing products imposed under
chapters 17, 18, 19, and 21 of the Harmonized Tariff Schedule.
The Secretary shall then report to the President articles found
to be circumventing such tariff-rate quotas. Upon receiving the
Secretary's report, the President shall, by proclamation,
include any identified article in the appropriate tariff-rate
quota provision of the Harmonized Tariff Schedule.
Conference agreement
Conferees agreed to a provision directing the Secretary
of Agriculture and the Commissioner of Customs shall monitor
for sugar circumvention and shall report and make
recommendations to Congress and the President.
This provision amends the Harmonized Tariff Schedule of
the United States (``HTSUS'') to make clear in the statute an
important element of the ruling of the Court of Appeals for the
Federal Circuit in Heartland By-Products, Inc. v. United
States, 264 F. 3rd 1126 (Fed. Cir. 2001), i.e., that molasses
is one of the foreign substances that must be excluded when
calculating the percentage of soluble non-sugar solids under
subheading 1702.90.40.
The provision requires the Secretary of Agriculture and
the Commissioner of Customs to establish a monitoring program
to identify existing or likely circumvention of the tariff-rate
quotas in Chapters 17, 18, 19 and 21 of the HTSUS. The
Secretary and the Commissioner shall report the results of
their monitoring to Congress and the President every six
months, together with data and a description of developments
and trends in the composition of trade provided for in such
chapters. This report will be made public. The report will
discuss any indications that imports of articles not subject to
the tariff-rate quotas are being used for commercial extraction
of sugar in the United States. Imports of so-called ``high-test
molasses'' currently classified under subheading 1703.10.30
will be examined particularly closely for such indications.
Finally, the Secretary and the Commissioner will include
in the report their recommendations for ending circumvention,
including their recommendations for legislation. The Managers
emphasize that rapid action to stop circumvention is the best
way to prevent a problem from developing and that quick
administrative or legislative action is preferable to
protracted procedures and litigation, as occurred in the
Heartland case.
From the Committee on Ways and Means, for
consideration of the House amendment and the
Senate amendment, and modifications committed
to conference:
William Thomas,
Phillip M. Crane,
From the Committee on Education and the
Workforce, for consideration of sec. 603 of the
Senate amendment, and modifications committed
to conference:
John Boehner,
Sam Johnson,
From the Committee on Energy and Commerce, for
consideration of sec. 603 of the Senate
amendment, and modifications committed to
conference:
Billy Tauzin,
Michael Bilirakis,
From the Committee on Government Reform, for
consideration of sec. 344 of the House
amendment, and sec. 1143 of the Senate
amendment, and modifications committed to
conference:
Dan Burton,
Bob Barr,
From the Committee on the Judiciary, for
consideration of secs. 111, 601, and 701 of the
Senate amendment, and modifications committed
to conference:
F. James Sensenbrenner,
Howard Coble,
From the Committee on Rules, for consideration
of secs. 2103, 2105, and 2106 of the House
amendment and secs. 2103, 2105, and 2106 of the
Senate amendment, and modifications committed
to conference:
David Dreier,
John Linder,
Managers on the Part of the House.
Max Baucus,
John Breaux,
Chuck Grassley,
Orrin Hatch,
Managers on the Part of the Senate.