[House Report 106-606]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-606
======================================================================
TRADE AND DEVELOPMENT ACT OF 2000
_______
May 4, 2000.--Ordered to be printed
_______
Mr. Archer, from the committee of conference, submitted the following
CONFERENCE REPORT
[To accompany H.R. 434]
The committee of conference on the disagreeing votes of
the two Houses on the amendments of the Senate to the bill
(H.R. 434), to authorize a new trade and investment policy for
sub-Sahara Africa, 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 to the text of the bill 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Trade and
Development Act of 2000''.
(b) Table of Contents.--
TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA
Subtitle A--Trade Policy for Sub-Saharan Africa
Sec. 101. Short title; table of contents.
Sec. 102. Findings.
Sec. 103. Statement of policy.
Sec. 104. Eligibility requirements.
Sec. 105. United States-Sub-Saharan Africa Trade and Economic
Cooperation Forum.
Sec. 106. Reporting requirement.
Sec. 107. Sub-Saharan Africa defined.
Subtitle B--Trade Benefits
Sec. 111. Eligibility for certain benefits.
Sec. 112. Treatment of certain textiles and apparel.
Sec. 113. Protections against transshipment.
Sec. 114. Termination.
Sec. 115. Clerical amendments.
Sec. 116. Free trade agreements with sub-Saharan African countries.
Sec. 117. Assistant United States Trade Representative for African
Affairs.
Subtitle C--Economic Development Related Issues
Sec. 121. Sense of Congress regarding comprehensive debt relief for the
world's poorest countries.
Sec. 122. Executive branch initiatives.
Sec. 123. Overseas Private Investment Corporation initiatives.
Sec. 124. Export-Import Bank initiatives.
Sec. 125. Expansion of the United States and Foreign Commercial Service
in sub-Saharan Africa.
Sec. 126. Donation of air traffic control equipment to eligible sub-
Saharan African countries.
Sec. 127. Additional authorities and increased flexibility to provide
assistance under the Development Fund for Africa.
Sec. 128. Assistance from United States private sector to prevent and
reduce HIV/AIDS in sub-Saharan Africa.
Sec. 129. Sense of the Congress relating to HIV/AIDS crisis in sub-
Saharan Africa.
Sec. 130. Study on improving African agricultural practices.
Sec. 131. Sense of the Congress regarding efforts to combat
desertification in Africa and other countries.
TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN
Subtitle A--Trade Policy for Caribbean Basin Countries
Sec. 201. Short title.
Sec. 202. Findings and policy.
Sec. 203. Definitions.
Subtitle B--Trade Benefits for Caribbean Basin Countries
Sec. 211. Temporary provisions to provide additional trade benefits to
certain beneficiary countries.
Sec. 214. Duty-free treatment for certain beverages made with Caribbean
rum.
Sec. 215. Meetings of trade ministers and USTR.
TITLE III--NORMAL TRADE RELATIONS
Sec. 301. Normal trade relations for Albania.
Sec. 302. Normal trade relations for Kyrgyzstan.
TITLE IV--OTHER TRADE PROVISIONS
Sec. 401. Report on employment and trade adjustment assistance.
Sec. 402. Trade adjustment assistance.
Sec. 403. Reliquidation of certain nuclear fuel assemblies.
Sec. 404. Reports to the Finance and Ways and Means committees.
Sec. 405. Clarification of section 334 of the Uruguay Round Agreements
Act.
Sec. 406. Chief agricultural negotiator.
Sec. 407. Revision of retaliation list or other remedial action.
Sec. 408. Report on trade adjustment assistance for agricultural
commodity producers.
Sec. 409. Agricultural trade negotiating objectives and consultations
with Congress.
Sec. 410. Entry procedures for foreign trade zone operations.
Sec. 411. Goods made with forced or indentured child labor.
Sec. 412. Worst forms of child labor.
TITLE V--IMPORTS OF CERTAIN WOOL ARTICLES
Sec. 501. Temporary duty reductions.
Sec. 502. Temporary duty suspensions.
Sec. 503. Separate tariff line treatment for wool yarn and men's or
boys' suits and suit-type jackets and trousers of worsted wool
fabric.
Sec. 504. Monitoring of market conditions and authority to modify tariff
reductions.
Sec. 505. Refund of duties paid on imports of certain wool articles.
Sec. 506. Wool research, development, and promotion trust fund.
TITLE VI--REVENUE PROVISIONS
Sec. 601. Application of denial of foreign tax credit regarding trade
and investment with respect to certain foreign countries.
Sec. 602. Acceleration of cover over payments to Puerto Rico and Virgin
Islands.
TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA
Subtitle A--Trade Policy for Sub-Saharan Africa
SEC. 101. SHORT TITLE.
This title may be cited as the ``African Growth and
Opportunity Act''.
SEC. 102. FINDINGS.
Congress finds that--
(1) it is in the mutual interest of the United
States and the countries of sub-Saharan Africa to
promote stable and sustainable economic growth and
development in sub-Saharan Africa;
(2) the 48 countries of sub-Saharan Africa form a
region richly endowed with both natural and human
resources;
(3) sub-Saharan Africa represents a region of
enormous economic potential and of enduring political
significance to the United States;
(4) the region has experienced the strengthening of
democracy as countries in sub-Saharan Africa have taken
steps to encourage broader participation in the
political process;
(5) certain countries in sub-Saharan Africa have
increased their economic growth rates, taken
significant steps towards liberalizing their economies,
and made progress toward regional economic integration
that can have positive benefits for the region;
(6) despite those gains, the per capita income in
sub-Saharan Africa averages approximately $500
annually;
(7) trade and investment, as the American
experience has shown, can represent powerful tools both
for economic development and for encouraging broader
participation in a political process in which political
freedom can flourish;
(8) increased trade and investment flows have the
greatest impact in an economic environment in which
trading partners eliminate barriers to trade and
capital flows and encourage the development of a
vibrant private sector that offers individual African
citizens the freedom to expand their economic
opportunities and provide for their families;
(9) offering the countries of sub-Saharan Africa
enhanced trade preferences will encourage both higher
levels of trade and direct investment in support of the
positive economic and political developments under way
throughout the region; and
(10) encouraging the reciprocal reduction of trade
and investment barriers in Africa will enhance the
benefits of trade and investment for the region as well
as enhance commercial and political ties between the
United States and sub-Saharan Africa.
SEC. 103. STATEMENT OF POLICY.
Congress supports--
(1) encouraging increased trade and investment
between the United States and sub-Saharan Africa;
(2) reducing tariff and nontariff barriers and
other obstacles to sub-Saharan African and United
States trade;
(3) expanding United States assistance to sub-
Saharan Africa's regional integration efforts;
(4) negotiating reciprocal and mutually beneficial
trade agreements, including the possibility of
establishing free trade areas that serve the interests
of both the United States and the countries of sub-
Saharan Africa;
(5) focusing on countries committed to the rule of
law, economic reform, and the eradication of poverty;
(6) strengthening and expanding the private sector
in sub-Saharan Africa, especially enterprises owned by
women and small businesses;
(7) facilitating the development of civil societies
and political freedom in sub-Saharan Africa;
(8) establishing a United States-Sub-Saharan Africa
Trade and Economic Cooperation Forum; and
(9) the accession of the countries in sub-Saharan
Africa to the Organization for Economic Cooperation and
Development (OECD) Convention on Combating Bribery of
Foreign Public Officials in International Business
Transactions.
SEC. 104. ELIGIBILITY REQUIREMENTS.
(a) In General.--The President is authorized to designate a
sub-Saharan African country as an eligible sub-Saharan African
country if the President determines that the country--
(1) has established, or is making continual
progress toward establishing--
(A) a market-based economy that protects
private property rights, incorporates an open
rules-based trading system, and minimizes
government interference in the economy through
measures such as price controls, subsidies, and
government ownership of economic assets;
(B) the rule of law, political pluralism,
and the right to due process, a fair trial, and
equal protection under the law;
(C) the elimination of barriers to United
States trade and investment, including by--
(i) the provision of national
treatment and measures to create an
environment conducive to domestic and
foreign investment;
(ii) the protection of intellectual
property; and
(iii) the resolution of bilateral
trade and investment disputes;
(D) economic policies to reduce poverty,
increase the availability of health care and
educational opportunities, expand physical
infrastructure, promote the development of
private enterprise, and encourage the formation
of capital markets through micro-credit or
other programs;
(E) a system to combat corruption and
bribery, such as signing and implementing the
Convention on Combating Bribery of Foreign
Public Officials in International Business
Transactions; and
(F) protection of internationally
recognized worker rights, including the right
of association, the right to organize and
bargain collectively, a prohibition on the use
of any form of forced or compulsory labor, a
minimum age for the employment of children, and
acceptable conditions of work with respect to
minimum wages, hours of work, and occupational
safety and health;
(2) does not engage in activities that undermine
United States national security or foreign policy
interests; and
(3) does not engage in gross violations of
internationally recognized human rights or provide
support for acts of international terrorism and
cooperates in international efforts to eliminate human
rights violations and terrorist activities.
(b) Continuing Compliance.--If the President determines
that an eligible sub-Saharan African country is not making
continual progress in meeting the requirements described in
subsection (a)(1), the President shall terminate the
designation of the country made pursuant to subsection (a).
SEC. 105. UNITED STATES-SUB-SAHARAN AFRICA TRADE AND ECONOMIC
COOPERATION FORUM.
(a) Declaration of Policy.--The President shall convene
annual high-level meetings between appropriate officials of the
United States Government and officials of the governments of
sub-Saharan African countries in order to foster close economic
ties between the United States and sub-Saharan Africa.
(b) Establishment.--Not later than 12 months after the date
of the enactment of this Act, the President, after consulting
with Congress and the governments concerned, shall establish a
United States-Sub-Saharan Africa Trade and Economic Cooperation
Forum (in this section referred to as the ``Forum'').
(c) Requirements.--In creating the Forum, the President
shall meet the following requirements:
(1) The President shall direct the Secretary of
Commerce, the Secretary of the Treasury, the Secretary
of State, and the United States Trade Representative to
host the first annual meeting with their counterparts
from the governments of sub-Saharan African countries
eligible under section 104, and those sub-Saharan
African countries that the President determines are
taking substantial positive steps towards meeting the
eligibility requirements in section 104. The purpose of
the meeting shall be to discuss expanding trade and
investment relations between the United States and sub-
Saharan Africa and the implementation of this title
including encouraging joint ventures between small and
large businesses. The President shall also direct the
Secretaries and the United States Trade Representative
to invite to the meeting representatives from
appropriate sub-Saharan African regional organizations
and government officials from other appropriate
countries in sub-Saharan Africa.
(2)(A) The President, in consultation with the
Congress, shall encourage United States nongovernmental
organizations to host annual meetings with
nongovernmental organizations from sub-Saharan Africa
in conjunction with the annual meetings of the Forum
for the purpose of discussing the issues described in
paragraph (1).
(B) The President, in consultation with the
Congress, shall encourage United States representatives
of the private sector to host annual meetings with
representatives of the private sector from sub-Saharan
Africa in conjunction with the annual meetings of the
Forum for the purpose of discussing the issues
described in paragraph (1).
(3) The President shall, to the extent practicable,
meet with the heads of governments of sub-Saharan
African countries eligible under section 104, and those
sub-Saharan African countries that the President
determines are taking substantial positive steps toward
meeting the eligibility requirements in section 104,
not less than once every 2 years for the purpose of
discussing the issues described in paragraph (1). The
first such meeting should take place not later than 12
months after the date of the enactment of this Act.
(d) Dissemination of Information by USIS.--In order to
assist in carrying out the purposes of the Forum, the United
States Information Service shall disseminate regularly, through
multiple media, economic information in support of the free
market economic reforms described in this title.
(e) HIV/AIDS Effect on the sub-Saharan African Workforce.--
In selecting issues of common interest to the United States-
Sub-Saharan Africa Trade and Economic Cooperation Forum, the
President shall instruct the United States delegates to the
Forum to promote a review by the Forum of the HIV/AIDS epidemic
in each sub-Saharan African country and the effect of the HIV/
AIDS epidemic on economic development in each country.
SEC. 106. REPORTING REQUIREMENT.
The President shall submit to the Congress, not later than
1 year after the date of the enactment of this Act, and
annually thereafter through 2008, a comprehensive report on the
trade and investment policy of the United States for sub-
Saharan Africa, and on the implementation of this title and the
amendments made by this title.
SEC. 107. SUB-SAHARAN AFRICA DEFINED.
For purposes of this title, the terms ``sub-Saharan
Africa'', ``sub-Saharan African country'', ``country in sub-
Saharan Africa'', and ``countries in sub-Saharan Africa'' refer
to the following or any successor political entities:
Republic of Angola (Angola).
Republic of Benin (Benin).
Republic of Botswana (Botswana).
Burkina Faso (Burkina).
Republic of Burundi (Burundi).
Republic of Cameroon (Cameroon).
Republic of Cape Verde (Cape Verde).
Central African Republic.
Republic of Chad (Chad).
Federal Islamic Republic of the Comoros (Comoros).
Democratic Republic of Congo.
Republic of the Congo (Congo).
Republic of Cote d'Ivoire (Cote d'Ivoire).
Republic of Djibouti (Djibouti).
Republic of Equatorial Guinea (Equatorial Guinea).
State of Eritrea (Eritrea).
Ethiopia.
Gabonese Republic (Gabon).
Republic of the Gambia (Gambia).
Republic of Ghana (Ghana).
Republic of Guinea (Guinea).
Republic of Guinea-Bissau (Guinea-Bissau).
Republic of Kenya (Kenya).
Kingdom of Lesotho (Lesotho).
Republic of Liberia (Liberia).
Republic of Madagascar (Madagascar).
Republic of Malawi (Malawi).
Republic of Mali (Mali).
Islamic Republic of Mauritania (Mauritania).
Republic of Mauritius (Mauritius).
Republic of Mozambique (Mozambique).
Republic of Namibia (Namibia).
Republic of Niger (Niger).
Federal Republic of Nigeria (Nigeria).
Republic of Rwanda (Rwanda).
Democratic Republic of Sao Tome and Principe (Sao
Tome and Principe).
Republic of Senegal (Senegal).
Republic of Seychelles (Seychelles).
Republic of Sierra Leone (Sierra Leone).
Somalia.
Republic of South Africa (South Africa).
Republic of Sudan (Sudan).
Kingdom of Swaziland (Swaziland).
United Republic of Tanzania (Tanzania).
Republic of Togo (Togo).
Republic of Uganda (Uganda).
Republic of Zambia (Zambia).
Republic of Zimbabwe (Zimbabwe).
Subtitle B--Trade Benefits
SEC. 111. ELIGIBILITY FOR CERTAIN BENEFITS.
(a) In General.--Title V of the Trade Act of 1974 is
amended by inserting after section 506 the following new
section:
``SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR CERTAIN
BENEFITS.
``(a) Authority To Designate.--
``(1) In general.--Notwithstanding any other
provision of law, the President is authorized to
designate a country listed in section 107 of the
African Growth and Opportunity Act as a beneficiary
sub-Saharan African country eligible for the benefits
described in subsection (b)--
``(A) if the President determines that the
country meets the eligibility requirements set
forth in section 104 of that Act, as such
requirements are in effect on the date of
enactment of that Act; and
``(B) subject to the authority granted to
the President under subsections (a), (d), and
(e) of section 502, if the country otherwise
meets the eligibility criteria set forth in
section 502.
``(2) Monitoring and review of certain countries.--
The President shall monitor, review, and report to
Congress annually on the progress of each country
listed in section 107 of the African Growth and
Opportunity Act in meeting the requirements described
in paragraph (1) in order to determine the current or
potential eligibility of each country to be designated
as a beneficiary sub-Saharan African country for
purposes of this section. The President's
determinations, and explanations of such
determinations, with specific analysis of the
eligibility requirements described in paragraph (1)(A),
shall be included in the annual report required by
section 106 of the African Growth and Opportunity Act.
``(3) Continuing compliance.--If the President
determines that a beneficiary sub-Saharan African
country is not making continual progress in meeting the
requirements described in paragraph (1), the President
shall terminate the designation of that country as a
beneficiary sub-Saharan African country for purposes of
this section, effective on January 1 of the year
following the year in which such determination is made.
``(b) Preferential Tariff Treatment for Certain Articles.--
``(1) In general.--The President may provide duty-
free treatment for any article described in section
503(b)(1)(B) through (G) that is the growth, product,
or manufacture of a beneficiary sub-Saharan African
country described in subsection (a), if, after
receiving the advice of the International Trade
Commission in accordance with section 503(e), the
President determines that such article is not import-
sensitive in the context of imports from beneficiary
sub-Saharan African countries.
``(2) Rules of origin.--The duty-free treatment
provided under paragraph (1) shall apply to any article
described in that paragraph that meets the requirements
of section 503(a)(2), except that--
``(A) if the cost or value of materials
produced in the customs territory of the United
States is included with respect to that
article, an amount not to exceed 15 percent of
the appraised value of the article at the time
it is entered that is attributed to such United
States cost or value may be applied toward
determining the percentage referred to in
subparagraph (A) of section 503(a)(2); and
``(B) the cost or value of the materials
included with respect to that article that are
produced in 1 or more beneficiary sub-Saharan
African countries shall be applied in
determining such percentage.
``(c) Beneficiary Sub-Saharan African Countries, Etc.--For
purposes of this title, the terms `beneficiary sub-Saharan
African country' and `beneficiary sub-Saharan African
countries' mean a country or countries listed in section 107 of
the African Growth and Opportunity Act that the President has
determined is eligible under subsection (a) of this section.''.
(b) Waiver of Competitive Need Limitation.--Section
503(c)(2)(D) of the Trade Act of 1974 (19 U.S.C. 2463(c)(2)(D))
is amended to read as follows:
``(D) Least-developed beneficiary
developing countries and beneficiary sub-
saharan african countries.--Subparagraph (A)
shall not apply to any least-developed
beneficiary developing country or any
beneficiary sub-Saharan African country.''.
SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.
(a) Preferential Treatment.--Textile and apparel articles
described in subsection (b) that are imported directly into the
customs territory of the United States from a beneficiary sub-
Saharan African country described in section 506A(c) of the
Trade Act of 1974, shall enter the United States free of duty
and free of any quantitative limitations in accordance with the
provisions set forth in subsection (b), if the country has
satisfied the requirements set forth in section 113.
(b) Products Covered.--The preferential treatment described
in subsection (a) shall apply only to the following textile and
apparel products:
(1) Apparel articles assembled in beneficiary sub-
saharan african countries.--Apparel articles assembled
in 1 or more beneficiary sub-Saharan African countries
from fabrics wholly formed and cut in the United
States, from yarns wholly formed in the United States,
that are--
(A) entered under subheading 9802.00.80 of
the Harmonized Tariff Schedule of the United
States; or
(B) entered under chapter 61 or 62 of the
Harmonized Tariff Schedule of the United
States, if, after such assembly, the articles
would have qualified for entry under subheading
9802.00.80 of the Harmonized Tariff Schedule of
the United States but for the fact that the articles
were embroidered or subjected to stone-washing,
enzyme-washing, acid washing, perma-pressing,
oven-baking, bleaching, garment-dyeing, screen
printing, or other similar processes.
(2) Apparel articles cut and assembled in
beneficiary sub-saharan african countries.--Apparel
articles cut in 1 or more beneficiary sub-Saharan
African countries from fabric wholly formed in the
United States from yarns wholly formed in the United
States, if such articles are assembled in 1 or more
beneficiary sub-Saharan African countries with thread
formed in the United States.
(3) Apparel articles assembled from regional and
other fabric.--Apparel articles wholly assembled in 1
or more beneficiary sub-Saharan African countries from
fabric wholly formed in 1 or more beneficiary sub-
Saharan African countries from yarn originating either
in the United States or 1 or more beneficiary sub-
Saharan African countries, subject to the following:
(A) Limitations on benefits.--
(i) In general.--Preferential
treatment under this paragraph shall be
extended in the 1-year period beginning
on October 1, 2000, and in each of the
7 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.
(ii) Applicable percentage.--For
purposes of this subparagraph, the term
``applicable percentage'' means 1.5
percent for the 1-year period beginning
October 1, 2000, increased in each of
the seven succeeding 1-year periods by
equal increments, so that for the
period beginning October 1, 2007, the
applicable percentage does not exceed
3.5 percent.
(B) Special rule for lesser developed
countries.--
(i) In general.--Subject to
subparagraph (A), preferential
treatment shall be extended through
September 30, 2004, for apparel
articles wholly assembled in 1 or more
lesser developed beneficiary sub-
Saharan African countries regardless of
the country of origin of the fabric
used to make such articles.
(ii) Lesser developed beneficiary
sub-saharan african country.--For
purposes of this subparagraph the term
``lesser developed beneficiary sub-
Saharan African country'' means a
beneficiary sub-Saharan African country
that had a per capita gross national
product of less than $1,500 a year in
1998, as measured by the World Bank.
(C) Surge mechanism.--
(i) Import monitoring.--The
Secretary of Commerce shall monitor
imports of articles described in this
paragraph on a monthly basis to
determine if there has been a surge in
imports of such articles. In order to
permit public access to preliminary
international trade data and to
facilitate the early identification of
potentially disruptive import surges,
the Director of the Office of
Management and Budget may grant an
exception to the publication dates
established for the release of data on
United States international trade in
covered articles, if the Director
notifies Congress of the early release
of the data.
(ii) Determination of damage or
threat thereof.--Whenever the Secretary
of Commerce determines, based on the
data described in clause (i), or
pursuant to a written request made by
an interested party, that there has
been a surge in imports of an article
described in this paragraph from a
beneficiary sub-Saharan African
country, the Secretary shall determine
whether such article from such country
is being imported in such increased
quantities as to cause serious damage,
or threat thereof, to the domestic
industry producing a like or directly
competitive article. If the Secretary's
determination is affirmative, the
President shall suspend the duty-free
treatment provided for such article
under this paragraph. If the inquiry is
initiated at the request of an
interested party, the Secretary shall
make the determination within 60 days
after the date of the request.
(iii) Factors to consider.--In
determining whether a domestic industry
has been seriously damaged, or is
threatened with serious damage, the
Secretary shall examine the effect of
the imports on relevant economic
indicators such as domestic production,
sales, market share, capacity
utilization, inventories, employment,
profits, exports, prices, and
investment.
(iv) Procedure.--
(I) Initiation.--The
Secretary of Commerce shall
initiate an inquiry within 10
days after receiving a written
request and supporting
information for an inquiry from
an interested party. Notice of
initiation of an inquiry shall
be published in the Federal
Register.
(II) Participation by
interested parties.--The
Secretary of Commerce shall
establish procedures to ensure
participation in the inquiry by
interested parties.
(III) Notice of
determination.--The Secretary
shall publish the determination
described in clause (ii) in the
Federal Register.
(IV) Information
available.--If relevant
information is not available on
the record or any party
withholds information that has
been requested by the
Secretary, the Secretary shall
make the determination on the
basis of the facts available.
When the Secretary relies on
information submitted in the
inquiry as facts available, the
Secretary shall, to the extent
practicable, corroborate the
information from independent
sources that are reasonably
available to the Secretary.
(v) Interested party.--For purposes
of this subparagraph, the term
``interested party'' means any producer
of a like or directly competitive
article, a certified union or
recognized union or group of workers
which is representative of an industry
engaged in the manufacture, production,
or sale in the United States of a like
or directly competitive article, a trade
or business association representing producers
or sellers of like or directly competitive
articles, producers engaged in the production
of essential inputs for like or directly
competitive articles, a certified union or
group of workers which is representative of
an industry engaged in the manufacture,
production, or sale of essential inputs for
the like or directly competitive article, or
a trade or business association representing
companies engaged in the manufacture,
production or sale of such essential inputs.
(4) Sweaters knit-to-shape from cashmere or merino
wool.--
(A) Cashmere.--Sweaters, in chief weight of
cashmere, knit-to-shape in 1 or more
beneficiary sub-Saharan African countries and
classifiable under subheading 6110.10 of the
Harmonized Tariff Schedule of the United
States.
(B) Merino wool.--Sweaters, 50 percent or
more by weight of wool measuring 18.5 microns
in diameter or finer, knit-to-shape in 1 or
more beneficiary sub-Saharan African countries.
(5) Apparel articles wholly assembled from fabric
or yarn not available in commercial quantities in the
united states.--
(A) In general.--Apparel articles that are
both cut (or knit-to-shape) and sewn or
otherwise assembled in 1 or more beneficiary
sub-Saharan African countries, from fabric or
yarn that is not formed in the United States or
a beneficiary sub-Saharan African country, to
the extent that such fabrics or yarns would be
eligible for preferential treatment, without
regard to the source of the fabric or yarn,
under Annex 401 to the NAFTA.
(B) Additional apparel articles.--At the
request of any interested party and subject to
the following requirements, the President is
authorized to proclaim the treatment provided
under subparagraph (A) for yarns or fabrics not
described in subparagraph (A) if--
(i) the President determines that
such yarns or fabrics 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 calendar 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--
(I) the action proposed to
be proclaimed and the reasons
for such action; and
(II) the advice obtained
under clause (ii);
(iv) a period of 60 calendar days,
beginning with the first day on which
the President has met the requirements
of subclauses (I) and (II) of clause
(iii), has expired; and
(v) the President has consulted
with such committees regarding the
proposed action during the period
referred to in clause (iii).
(6) Handloomed, handmade, and folklore articles.--A
handloomed, handmade, or folklore article of a
beneficiary sub-Saharan African country or countries
that is certified as such by the competent authority of
such beneficiary country or countries. For purposes of
this paragraph, the President, after consultation with
the beneficiary sub-Saharan African country or
countries concerned, shall determine which, if any,
particular textile and apparel goods of the country (or
countries) shall be treated as being handloomed,
handmade, or folklore articles.
(c) Treatment of Quotas on Textile and Apparel Imports from
Kenya and Mauritius.--The President shall eliminate the
existing quotas on textile and apparel articles imported into
the United States--
(1) from Kenya within 30 days after that country
adopts an effective visa system to prevent unlawful
transshipment of textile and apparel articles and the
use of counterfeit documents relating to the
importation of the articles into the United States; and
(2) from Mauritius within 30 days after that
country adopts such a visa system.
The Customs Service shall provide the necessary technical
assistance to Kenya and Mauritius in the development and
implementation of the visa systems.
(d) Special Rules.--
(1) Findings and trimmings.--
(A) General rule.--An article otherwise
eligible for preferential treatment under this
section shall not be ineligible for such
treatment because the article contains findings
or trimmings of foreign origin, if the value of
such findings and trimmings do not exceed 25
percent of the cost of the components of the
assembled article. Examples of findings and
trimmings are sewing thread, hooks and eyes,
snaps, buttons, `bow buds', decorative lace
trim, elastic strips, and zippers, including
zipper tapes and labels. Elastic strips are
considered findings or trimmings only if they
are each less than 1 inch in width and used in
the production of brassieres.
(B) Certain interlinings.--
(i) General rule.--An article
otherwise eligible for preferential
treatment under this section 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.
(ii) Interlinings described.--
Interlinings eligible for the treatment
described in clause (i) include only a
chest type plate, a ``hymo'' piece, or
``sleeve header'', of woven or weft-
inserted warp knit construction and of
coarse animal hair or man-made
filaments.
(iii) Termination of treatment.--
The treatment described in this
subparagraph shall terminate if the
President makes a determination that
United States manufacturers are
producing such interlinings in the
United States in commercial quantities.
(C) Exception.--In the case of an article
described in subsection (b)(2), sewing thread
shall not be treated as findings or trimmings
under subparagraph (A).
(2) De minimis rule.--An article otherwise eligible
for preferential treatment under this section shall not
be ineligible for such treatment because the article
contains fibers or yarns not wholly formed in the
United States or 1 or more beneficiary sub-Saharan
African countries if the total weight of all such
fibers and yarns is not more than 7 percent of the
total weight of the article.
(e) Definitions.--In this section and section 113:
(1) Agreement on textiles and clothing.--The term
``Agreement on Textiles and Clothing'' means the
Agreement on Textiles and Clothing referred to in
section 101(d)(4) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(4)).
(2) Beneficiary sub-saharan african country, etc.--
The terms ``beneficiary sub-Saharan African country''
and ``beneficiary sub-Saharan African countries'' have
the same meaning as such terms have under section
506A(c) of the Trade Act of 1974.
(3) NAFTA.--The term ``NAFTA'' means the North
American Free Trade Agreement entered into between the
United States, Mexico, and Canada on December 17, 1992.
(f) Effective Date.--This section takes effect on October
1, 2000, and shall remain in effect through September 30, 2008.
SEC. 113. PROTECTIONS AGAINST TRANSSHIPMENT.
(a) Preferential Treatment Conditioned on Enforcement
Measures.--
(1) In general.--The preferential treatment under
section 112(a) shall not be provided to textile and
apparel articles that are imported from a beneficiary
sub-Saharan African country unless that country--
(A) has adopted an effective visa system,
domestic laws, and enforcement procedures
applicable to covered articles to prevent
unlawful transshipment of the articles and the
use of counterfeit documents relating to the
importation of the articles into the United
States;
(B) has enacted legislation or promulgated
regulations that would permit United States
Customs Service verification teams to have the
access necessary to investigate thoroughly
allegations of transshipment through such
country;
(C) agrees to report, on a timely basis, at
the request of the United States Customs
Service, on the total exports from and imports
into that country of covered articles,
consistent with the manner in which the records
are kept by that country;
(D) will cooperate fully with the United
States to address and take action necessary to
prevent circumvention as provided in Article 5
of the Agreement on Textiles and Clothing;
(E) agrees to require all producers and
exporters of covered articles in that country
to maintain complete records of the production
and the export of covered articles, including
materials used in the production, for at least
2 years after the production or export (as the
case may be); and
(F) agrees to report, on a timely basis, at
the request of the United States Customs
Service, documentation establishing the country
of origin of covered articles as used by that
country in implementing an effective visa
system.
(2) Country of origin documentation.--For purposes
of paragraph (1)(F), documentation regarding the
country of origin of the covered articles includes
documentation such as production records, information
relating to the place of production, the number and
identification of the types of machinery used in
production, the number of workers employed in
production, and certification from both the
manufacturer and the exporter.
(b) Customs Procedures and Enforcement.--
(1) In general.--
(A) Regulations.--Any importer that claims
preferential treatment under section 112 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.
(B) Determination.--
(i) In general.--In order to
qualify for the preferential treatment
under section 112 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 clause (ii)--
(I) has implemented and
follows, or
(II) 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 clause if it is a
beneficiary sub-Saharan African
country--
(I) from which the article
is exported, or
(II) 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.
(2) Certificate of origin.--The Certificate of
Origin that otherwise would be required pursuant to the
provisions of paragraph (1) shall not be required in
the case of an article imported under section 112 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.
(3) Penalties for exporters.--If the President
determines, based on sufficient evidence, that an
exporter has engaged in transshipment as defined in
paragraph (4), then the President shall deny for a
period of 5 years all benefits under section 112 to
such exporter, any successor of such exporter, and any
other entity owned or operated by the principal of the
exporter.
(4) Transshipment described.--Transshipment within
the meaning of this subsection has occurred when
preferential treatment for a textile or apparel article
under this Act has been claimed 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
paragraph, 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 section 112.
(5) Monitoring and reports to congress.--The
Customs Service shall monitor and the Commissioner of
Customs shall submit to Congress, not later than March
31 of each year, a report on the effectiveness of the
visa systems and the implementation of legislation and
regulations described in subsection (a) and on measures
taken by countries in sub-Saharan Africa which export
textiles or apparel to the United States to prevent
circumvention as described in Article 5 of the
Agreement on Textiles and Clothing.
(c) Customs Service Enforcement.--The Customs Service
shall--
(1) make available technical assistance to the
beneficiary sub-Saharan African countries--
(A) in the development and implementation
of visa systems, legislation, and regulations
described in subsection (a)(1)(A); and
(B) to train their officials in anti-
transshipment enforcement;
(2) send production verification teams to at least
4 beneficiary sub-Saharan African countries each year;
and
(3) to the extent feasible, place beneficiary sub-
Saharan African countries on the Electronic Visa
(ELVIS) program.
(d) Authorization of Appropriations.--There is authorized
to be appropriated to carry out subsection (c) the sum of
$5,894,913.
SEC. 114. TERMINATION.
Title V of the Trade Act of 1974 is amended by inserting
after section 506A the following new section:
``SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN COUNTRIES.
``In the case of a beneficiary sub-Saharan African country,
as defined in section 506A(c), duty-free treatment provided
under this title shall remain in effect through September 30,
2008.''.
SEC. 115. CLERICAL AMENDMENTS.
The table of contents for title V of the Trade Act of 1974
is amended by inserting after the item relating to section 506
the following new items:
``Sec. 506A. Designation of sub-Saharan African countries for certain
benefits.
``Sec. 506B. Termination of benefits for sub-Saharan African
countries.''.
SEC. 116. FREE TRADE AGREEMENTS WITH SUB-SAHARAN AFRICAN COUNTRIES.
(a) Declaration of Policy.--Congress declares that free
trade agreements should be negotiated, where feasible, with
interested countries in sub-Saharan Africa, in order to serve
as the catalyst for increasing trade between the United States
and sub-Saharan Africa and increasing private sector investment
in sub-Saharan Africa.
(b) Plan Requirement.--
(1) In general.--The President, taking into account
the provisions of the treaty establishing the African
Economic Community and the willingness of the
governments of sub-Saharan African countries to engage
in negotiations to enter into free trade agreements,
shall develop a plan for the purpose of negotiating and
entering into 1 or more trade agreements with
interested beneficiary sub-Saharan African countries.
(2) Elements of plan.--The plan shall include the
following:
(A) The specific objectives of the United
States with respect to negotiations described
in paragraph (1) and a suggested timetable for
achieving those objectives.
(B) The benefits to both the United States
and the relevant sub-Saharan African countries
with respect to the applicable free trade
agreement or agreements.
(C) A mutually agreed-upon timetable for
the negotiations.
(D) The implications for and the role of
regional and sub-regional organizations in sub-
Saharan Africa with respect to such free trade
agreement or agreements.
(E) Subject matter anticipated to be
covered by the negotiations and United States
laws, programs, and policies, as well as the
laws of participating eligible African
countries and existing bilateral and
multilateral and economic cooperation and trade
agreements, that may be affected by the
agreement or agreements.
(F) Procedures to ensure the following:
(i) Adequate consultation with the
Congress and the private sector during
the negotiations.
(ii) Consultation with the Congress
regarding all matters relating to
implementation of the agreement or
agreements.
(iii) Approval by the Congress of
the agreement or agreements.
(iv) Adequate consultations with
the relevant African governments and
African regional and subregional
intergovernmental organizations during
the negotiation of the agreement or
agreements.
(c) Reporting Requirement.--Not later than 12 months after
the date of the enactment of this Act, the President shall
prepare and transmit to the Congress a report containing the
plan developed pursuant to subsection (b).
SEC. 117. ASSISTANT UNITED STATES TRADE REPRESENTATIVE FOR AFRICAN
AFFAIRS.
It is the sense of the Congress that--
(1) the position of Assistant United States Trade
Representative for African Affairs is integral to the
United States commitment to increasing United States-
sub-Saharan African trade and investment;
(2) the position of Assistant United States Trade
Representative for African Affairs should be maintained
within the Office of the United States Trade
Representative to direct and coordinate
interagency activities on United States-Africa trade
policy and investment matters and serve as--
(A) a primary point of contact in the
executive branch for those persons engaged in
trade between the United States and sub-Saharan
Africa; and
(B) the chief advisor to the United States
Trade Representative on issues of trade and
investment with Africa; and
(3) the United States Trade Representative should
have adequate funding and staff to carry out the duties
of the Assistant United States Trade Representative for
African Affairs described in paragraph (2), subject to
the availability of appropriations.
Subtitle C--Economic Development Related Issues
SEC. 121. SENSE OF CONGRESS REGARDING COMPREHENSIVE DEBT RELIEF FOR THE
WORLD'S POOREST COUNTRIES.
(a) Findings.--Congress makes the following findings:
(1) The burden of external debt has become a major
impediment to economic growth and poverty reduction in
many of the world's poorest countries.
(2) Until recently, the United States Government
and other official creditors sought to address this
problem by rescheduling loans and in some cases
providing limited debt reduction.
(3) Despite such efforts, the cumulative debt of
many of the world's poorest countries continued to grow
beyond their capacity to repay.
(4) In 1997, the Group of Seven, the World Bank,
and the International Monetary Fund adopted the Heavily
Indebted Poor Countries Initiative (HIPC), a commitment
by the international community that all multilateral
and bilateral creditors, acting in a coordinated and
concerted fashion, would reduce poor country debt to a
sustainable level.
(5) The HIPC Initiative is currently undergoing
reforms to address concerns raised about country
conditionality, the amount of debt forgiven, and the
allocation of savings realized through the debt
forgiveness program to ensure that the Initiative
accomplishes the goals of economic growth and poverty
alleviation in the world's poorest countries.
(b) Sense of Congress.--It is the sense of Congress that--
(1) Congress and the President should work
together, without undue delay and in concert with the
international community, to make comprehensive debt
relief available to the world's poorest countries in a
manner that promotes economic growth and poverty
alleviation;
(2) this program of bilateral and multilateral debt
relief should be designed to strengthen and expand the
private sector, encourage increased trade and
investment, support the development of free markets,
and promote broad-scale economic growth in beneficiary
countries;
(3) this program of debt relief should also support
the adoption of policies to alleviate poverty and to
ensure that benefits are shared widely among the
population, such as through initiatives to advance
education, improve health, combat AIDS, and promote
clean water and environmental protection;
(4) these debt relief agreements should be designed
and implemented in a transparent manner and with the
broad participation of the citizenry of the debtor
country and should ensure that country circumstances
are adequately taken into account;
(5) no country should receive the benefits of debt
relief if that country does not cooperate with the
United States on terrorism or narcotics enforcement, is
a gross violator of the human rights of its citizens,
or is engaged in conflict or spends excessively on its
military; and
(6) in order to prevent adverse impact on a key
industry in many developing countries, the
International Monetary Fund must mobilize its own
resources for providing debt relief to eligible
countries without allowing gold to reach the open
market, or otherwise adversely affecting the market
price of gold.
SEC. 122. EXECUTIVE BRANCH INITIATIVES.
(a) Statement of the Congress.--The Congress recognizes
that the stated policy of the executive branch in 1997, the
``Partnership for Growth and Opportunity in Africa''
initiative, is a step toward the establishment of a
comprehensive trade and development policy for sub-Saharan
Africa. It is the sense of the Congress that this Partnership
is a companion to the policy goals set forth in this title.
(b) Technical Assistance To Promote Economic Reforms and
Development.--In addition to continuing bilateral and
multilateral economic and development assistance, the President
shall target technical assistance toward--
(1) developing relationships between United States
firms and firms in sub-Saharan Africa through a variety
of business associations and networks;
(2) providing assistance to the governments of sub-
Saharan African countries to--
(A) liberalize trade and promote exports;
(B) bring their legal regimes into
compliance with the standards of the World
Trade Organization in conjunction with
membership in that Organization;
(C) make financial and fiscal reforms; and
(D) promote greater agribusiness linkages;
(3) addressing such critical agricultural policy
issues as market liberalization, agricultural export
development, and agribusiness investment in processing
and transporting agricultural commodities;
(4) increasing the number of reverse trade missions
to growth-oriented countries in sub-Saharan Africa;
(5) increasing trade in services; and
(6) encouraging greater sub-Saharan African
participation in future negotiations in the World Trade
Organization on services and making further commitments
in their schedules to the General Agreement on Trade in
Services in order to encourage the removal of tariff
and nontariff barriers.
SEC. 123. OVERSEAS PRIVATE INVESTMENT CORPORATION INITIATIVES.
(a) Initiation of Funds.--It is the sense of the Congress
that the Overseas Private Investment Corporation should
exercise the authorities it has to initiate an equity fund or
equity funds in support of projects in the countries in sub-
Saharan Africa, in addition to the existing equity fund for
sub-Saharan Africa created by the Corporation.
(b) Structure and Types of Funds.--
(1) Structure.--Each fund initiated under
subsection (a) should be structured as a partnership
managed by professional private sector fund managers
and monitored on a continuing basis by the Corporation.
(2) Capitalization.--Each fund should be
capitalized with a combination of private equity
capital, which is not guaranteed by the Corporation,
and debt for which the Corporation provides guaranties.
(3) Infrastructure fund.--1 or more of the funds,
with combined assets of up to $500,000,000, should be
used in support of infrastructure projects in countries
of sub-Saharan Africa.
(4) Emphasis.--The Corporation shall ensure that
the funds are used to provide support in particular to
women entrepreneurs and to innovative investments that
expand opportunities for women and maximize employment
opportunities for poor individuals.
(c) Overseas Private Investment Corporation.--
(1) Investment advisory council.--Section 233 of
the Foreign Assistance Act of 1961 is amended by adding
at the end the following:
``(e) Investment Advisory Council.--The Board shall take
prompt measures to increase the loan, guarantee, and insurance
programs, and financial commitments, of the Corporation in sub-
Saharan Africa, including through the use of an investment
advisory council to assist the Board in developing and
implementing policies, programs, and financial instruments with
respect to sub-Saharan Africa. In addition, the investment
advisory council shall make recommendations to the Board on how
the Corporation can facilitate greater support by the United
States for trade and investment with and in sub-Saharan Africa.
The investment advisory council shall terminate 4 years after
the date of the enactment of this subsection.''.
(2) Reports to the congress.--Within 6 months after
the date of the enactment of this Act, and annually for
each of the 4 years thereafter, the Board of Directors
of the Overseas Private Investment Corporation shall
submit to the Congress a report on the steps that the
Board has taken to implement section 233(e) of the
Foreign Assistance Act of 1961 (as added by paragraph
(1)) and any recommendations of the investment advisory
council established pursuant to such section.
SEC. 124. EXPORT-IMPORT BANK INITIATIVES.
(a) Sense of Congress.--It is the sense of Congress that
the Board of Directors of the Bank shall continue to take
comprehensive measures, consistent with the credit standards
otherwise required by law, to promote the expansion of the
Bank's financial commitments in sub-Saharan Africa under the
loan, guarantee and insurance programs of the Bank.
(b) Sub-Saharan Africa Advisory Committee.--The sub-
Saharan Africa Advisory Committee (SAAC) is to be commended for
aiding the Bank in advancing the economic partnership between
the United States and the nations of sub-Saharan Africa by
doubling the number of sub-Saharan African countries in which
the Bank is open for traditional financing and by increasing by
tenfold the Bank's support for sales to sub-Saharan Africa from
fiscal year 1998 to fiscal year 1999. The Board of Directors of
the Bank and its staff shall continue to review carefully the
sub-Saharan Africa Advisory Committee recommendations on the
development and implementation of new and innovative policies
and programs designed to promote the Bank's expansion in sub-
Saharan Africa.
SEC. 125. EXPANSION OF THE UNITED STATES AND FOREIGN COMMERCIAL SERVICE
IN SUB-SAHARAN AFRICA.
(a) Findings.--The Congress makes the following findings:
(1) The United States and Foreign Commercial
Service (hereafter in this section referred to as the
`Commercial Service') plays an important role in
helping U.S. businesses identify export opportunities
and develop reliable sources of information on
commercial prospects in foreign countries.
(2) During the 1980s, the presence of the
Commercial Service in sub-Saharan Africa consisted of
14 professionals providing services in 8 countries. By
early 1997, that presence had been reduced by half to 7
professionals in only 4 countries.
(3) Since 1997, the Department of Commerce has
slowly begun to increase the presence of the Commercial
Service in sub-Saharan Africa, adding 5 full-time
officers to established posts.
(4) Although the Commercial Service Officers in
these countries have regional responsibilities, this
kind of coverage does not adequately service the needs
of U.S. businesses attempting to do business in sub-
Saharan Africa.
(5) The Congress has, on several occasions,
encouraged the Commercial Service to focus its
resources and efforts in countries or regions in Europe
or Asia to promote greater United States export
activity in those markets, and similar encouragement
should be provided for countries in sub-Saharan Africa
as well.
(6) Because market information is not widely
available in many sub-Saharan African countries, the
presence of additional Commercial Service Officers and
resources can play a significant role in assisting
United States businesses in markets in those countries.
(b) Appointments.--Subject to the availability of
appropriations, by not later than December 31, 2001, the
Secretary of Commerce, acting through the Assistant Secretary
of Commerce and Director General of the United States and
Foreign Commercial Service, shall take steps to ensure that--
(1) at least 20 full-time Commercial Service
employees are stationed in sub-Saharan Africa; and
(2) full-time Commercial Service employees are
stationed in not less than 10 different sub-Saharan
African countries.
(c) Initiative for Sub-Saharan Africa.--In order to
encourage the export of United States goods and services to
sub-Saharan African countries, the International Trade
Administration shall make a special effort to--
(1) identify United States goods and services which
are the best prospects for export by United States
companies to sub-Saharan Africa;
(2) identify, where appropriate, tariff and
nontariff barriers that are preventing or hindering
sales of United States goods and services to, or the
operation of United States companies in, sub-Saharan
Africa;
(3) hold discussions with appropriate authorities
in sub-Saharan Africa on the matters described in
paragraphs (1) and (2) with a view to securing
increased market access for United States exporters of
goods and services;
(4) identify current resource allocations and
personnel levels in sub-Saharan Africa for the
Commercial Service and consider plans for the
deployment of additional resources or personnel to that
region; and
(5) make available to the public, through printed
and electronic means of communication, the information
derived pursuant to paragraphs (1) through (4) for each
of the 4 years after the date of enactment of this Act.
SEC. 126. DONATION OF AIR TRAFFIC CONTROL EQUIPMENT TO ELIGIBLE SUB-
SAHARAN AFRICAN COUNTRIES.
It is the sense of the Congress that, to the extent
appropriate, the United States Government should make every
effort to donate to governments of sub-Saharan African
countries determined to be eligible under section 104 air
traffic control equipment that is no longer in use, including
appropriate related reimbursable technical assistance.
SEC. 127. ADDITIONAL AUTHORITIES AND INCREASED FLEXIBILITY TO PROVIDE
ASSISTANCE UNDER THE DEVELOPMENT FUND FOR AFRICA.
(a) Use of Sustainable Development Assistance To Support
Further Economic Growth.--It is the sense of the Congress that
sustained economic growth in sub-Saharan Africa depends in
large measure upon the development of a receptive environment
for trade and investment, and that to achieve this objective
the United States Agency for International Development should
continue to support programs which help to create this
environment. Investments in human resources, development, and
implementation of free market policies, including policies to
liberalize agricultural markets and improve food security, and
the support for the rule of law and democratic governance
should continue to be encouraged and enhanced on a bilateral
and regional basis.
(b) Declarations of Policy.--The Congress makes the
following declarations:
(1) The Development Fund for Africa established
under chapter 10 of part I of the Foreign Assistance
Act of 1961 (22 U.S.C. 2293 et seq.) has been an
effective tool in providing development assistance to
sub-Saharan Africa since 1988.
(2) The Development Fund for Africa will complement
the other provisions of this title and lay a foundation
for increased trade and investment opportunities
between the United States and sub-Saharan Africa.
(3) Assistance provided through the Development
Fund for Africa will continue to support programs and
activities that promote the long term economic
development of sub-Saharan Africa, such as programs and
activities relating to the following:
(A) Strengthening primary and vocational
education systems, especially the acquisition
of middle-level technical skills for operating
modern private businesses and the introduction
of college level business education, including
the study of international business, finance,
and stock exchanges.
(B) Strengthening health care systems.
(C) Supporting democratization, good
governance and civil society and conflict
resolution efforts.
(D) Increasing food security by promoting
the expansion of agricultural and agriculture-
based industrial production and productivity
and increasing real incomes for poor
individuals.
(E) Promoting an enabling environment for
private sector-led growth through sustained
economic reform, privatization programs, and
market-led economic activities.
(F) Promoting decentralization and local
participation in the development process,
especially linking the rural production sectors
and the industrial and market centers
throughout Africa.
(G) Increasing the technical and managerial
capacity of sub-Saharan African individuals to
manage the economy of sub-Saharan Africa.
(H) Ensuring sustainable economic growth
through environmental protection.
(4) The African Development Foundation has a unique
congressional mandate to empower the poor to
participate fully in development and to increase
opportunities for gainful employment, poverty
alleviation, and more equitable income distribution in
sub-Saharan Africa. The African Development Foundation
has worked successfully to enhance the role of women as
agents of change, strengthen the informal sector with
an emphasis on supporting micro and small sized
enterprises, indigenous technologies, and mobilizing
local financing. The African Development Foundation
should develop and implement strategies for promoting
participation in the socioeconomic development process
of grassroots and informal sector groups such as
nongovernmental organizations, cooperatives, artisans,
and traders into the programs and initiatives
established under this title.
(c) Additional Authorities.--
(1) In general.--Section 496(h) of the Foreign
Assistance Act of 1961 (22 U.S.C. 2293(h)) is amended--
(A) by redesignating paragraph (3) as
paragraph (4); and
(B) by inserting after paragraph (2) the
following:
``(3) Democratization and conflict resolution
capabilities.--Assistance under this section may also
include program assistance--
``(A) to promote democratization, good
governance, and strong civil societies in sub-
Saharan Africa; and
``(B) to strengthen conflict resolution
capabilities of governmental,
intergovernmental, and nongovernmental entities
in sub-Saharan Africa.''.
(2) Conforming amendment.--Section 496(h)(4) of
such Act, as amended by paragraph (1), is further
amended by striking ``paragraphs (1) and (2)'' in the
first sentence and inserting ``paragraphs (1), (2), and
(3)''.
SEC. 128. ASSISTANCE FROM UNITED STATES PRIVATE SECTOR TO PREVENT AND
REDUCE HIV/AIDS IN SUB-SAHARAN AFRICA.
It is the sense of the Congress that United States
businesses should be encouraged to provide assistance to sub-
Saharan African countries to prevent and reduce the incidence
of HIV/AIDS in sub-Saharan Africa. In providing such
assistance, United States businesses should be encouraged to
consider the establishment of an HIV/AIDS Response Fund in
order to provide for coordination among such businesses in the
collection and distribution of the assistance to sub-Saharan
African countries.
SEC. 129. SENSE OF THE CONGRESS RELATING TO HIV/AIDS CRISIS IN SUB-
SAHARAN AFRICA.
(a) Findings.--The Congress finds the following:
(1) Sustained economic development in sub-Saharan
Africa depends in large measure upon successful trade
with and foreign assistance to the countries of sub-
Saharan Africa.
(2) The HIV/AIDS crisis has reached epidemic
proportions in sub-Saharan Africa, where more than
21,000,000 men, women, and children are infected with
HIV.
(3) 83 percent of the estimated 11,700,000 deaths
from HIV/AIDS worldwide have been in sub-Saharan
Africa.
(4) The HIV/AIDS crisis in sub-Saharan Africa is
weakening the structure of families and societies.
(5)(A) The HIV/AIDS crisis threatens the future of
the workforce in sub-Saharan Africa.
(B) Studies show that HIV/AIDS in sub-Saharan
Africa most severely affects individuals between the
ages of 15 and 49--the age group that provides the most
support for the economies of sub-Saharan African
countries.
(6) Clear evidence demonstrates that HIV/AIDS is
destructive to the economies of sub-Saharan African
countries.
(7) Sustained economic development is critical to
creating the public and private sector resources in
sub-Saharan Africa necessary to fight the HIV/AIDS
epidemic.
(b) Sense of the Congress.--It is the sense of the Congress
that--
(1) addressing the HIV/AIDS crisis in sub-Saharan
Africa should be a central component of United States
foreign policy with respect to sub-Saharan Africa;
(2) significant progress needs to be made in
preventing and treating HIV/AIDS in sub-Saharan Africa
in order to sustain a mutually beneficial trade
relationship between the United States and sub-Saharan
African countries; and
(3) the HIV/AIDS crisis in sub-Saharan Africa is a
global threat that merits further attention through
greatly expanded public, private, and joint public-
private efforts, and through appropriate United States
legislation.
SEC. 130. STUDY ON IMPROVING AFRICAN AGRICULTURAL PRACTICES.
(a) In General.--The Secretary of Agriculture, in
consultation with American Land Grant Colleges and Universities
and not-for-profit international organizations, is authorized
to conduct a 2-year study on ways to improve the flow of
American farming techniques and practices to African farmers.
The study shall include an examination of ways of improving or
utilizing--
(1) knowledge of insect and sanitation procedures;
(2) modern farming and soil conservation
techniques;
(3) modern farming equipment (including maintaining
the equipment);
(4) marketing crop yields to prospective
purchasers; and
(5) crop maximization practices.
The Secretary of Agriculture shall submit the study to the
Committee on Agriculture, Nutrition, and Forestry of the Senate
and the Committee on Agriculture of the House of
Representatives not later than September 30, 2001.
(b) Land Grant Colleges and Not-for-Profit Institutions.--
In conducting the study under subsection (a), the Secretary of
Agriculture is encouraged to consult with American Land Grant
Colleges and not-for-profit international organizations that
have firsthand knowledge of current African farming practices.
SEC. 131. SENSE OF THE CONGRESS REGARDING EFFORTS TO COMBAT
DESERTIFICATION IN AFRICA AND OTHER COUNTRIES.
(a) Findings.--The Congress finds that--
(1) desertification affects approximately one-sixth
of the world's population and one-quarter of the total
land area;
(2) over 1,000,000 hectares of Africa are affected
by desertification;
(3) dryland degradation is an underlying cause of
recurrent famine in Africa;
(4) the United Nations Environment Programme
estimates that desertification costs the world
$42,000,000,000 a year, not including incalculable
costs in human suffering; and
(5) the United States can strengthen its
partnerships throughout Africa and other countries
affected by desertification, help alleviate social and
economic crises caused by misuse of natural resources,
and reduce dependence on foreign aid, by taking a
leading role to combat desertification.
(b) Sense of the Congress.--It is the sense of the Congress
that the United States should expeditiously workwith the
international community, particularly Africa and other countries
affected by desertification, to--
(1) strengthen international cooperation to combat
desertification;
(2) promote the development of national and
regional strategies to address desertification and
increase public awareness of this serious problem and
its effects;
(3) develop and implement national action programs
that identify the causes of desertification and
measures to address it; and
(4) recognize the essential role of local
governments and nongovernmental organizations in
developing and implementing measures to address
desertification.
TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN
Subtitle A--Trade Policy for Caribbean Basin Countries
SEC. 201. SHORT TITLE.
This title may be cited as the ``United States-Caribbean
Basin Trade Partnership Act''.
SEC. 202. FINDINGS AND POLICY.
(a) Findings.--Congress makes the following findings:
(1) The Caribbean Basin Economic Recovery Act (in
this title referred to as ``CBERA'') represents a
permanent commitment by the United States to encourage
the development of strong democratic governments and
revitalized economies in neighboring countries in the
Caribbean Basin.
(2) In 1998, Hurricane Mitch and Hurricane Georges
devastated areas in the Caribbean Basin region, killing
more than 10,000 people and leaving 3,000,000 homeless.
(3) The total direct impact of Hurricanes Mitch and
Georges on Honduras, Nicaragua, the Dominican Republic,
El Salvador, and Guatemala amounts to $4,200,000,000,
representing a severe loss to income levels in this
underdeveloped region.
(4) In addition to short term disaster assistance,
United States policy toward the region should focus on
expanding international trade with the Caribbean Basin
region as an enduring solution for successful economic
growth and recovery.
(5) Thirty-four democratically elected leaders
agreed at the 1994 Summit of the Americas to conclude
negotiation of a Free Trade Area of the Americas (in
this title referred to as ``FTAA'') by the year 2005.
(6) The economic security of the countries in the
Caribbean Basin will be enhanced by the completion of
the FTAA.
(7) Offering temporary benefits to Caribbean Basin
countries will preserve the United States commitment to
Caribbean Basin beneficiary countries, promote the
growth of free enterprise and economic opportunity in
these neighboring countries, and thereby enhance the
national security interests of the United States.
(8) Given the greater propensity of countries
located in the Western Hemisphere to use United States
components and to purchase United States products
compared to other countries, increased trade and
economic activity between the United States and
countries in the Western Hemisphere will create new
jobs in the United States as a result of expanding
export opportunities.
(b) Policy.--It is the policy of the United States--
(1) to offer Caribbean Basin beneficiary countries
willing to prepare to become a party to the FTAA or
another free trade agreement, tariff treatment
essentially equivalent to that accorded to products of
NAFTA countries for certain products not currently
eligible for duty-free treatment under the CBERA; and
(2) to seek the participation of Caribbean Basin
beneficiary countries in the FTAA or another free trade
agreement at the earliest possible date, with the goal
of achieving full participation in such agreement not
later than 2005.
SEC. 203. DEFINITIONS.
In this title:
(1) NAFTA.--The term ``NAFTA'' means the North
American Free Trade Agreement entered into between the
United States, Mexico, and Canada on December 17, 1992.
(2) NAFTA country.--The term ``NAFTA country''
means any country with respect to which the NAFTA is in
force.
(3) WTO and wto member.--The terms ``WTO'' and
``WTO member'' have the meanings given those terms in
section 2 of the Uruguay Round Agreements Act (19
U.S.C. 3501).
Subtitle B--Trade Benefits for Caribbean Basin Countries
SEC. 211. TEMPORARY PROVISIONS TO PROVIDE ADDITIONAL TRADE BENEFITS TO
CERTAIN BENEFICIARY COUNTRIES.
(a) Temporary Provisions.--Section 213(b) of the Caribbean
Basin Economic Recovery Act (19 U.S.C. 2703(b)) is amended to
read as follows:
``(b) Import-Sensitive Articles.--
``(1) In general.--Subject to paragraphs (2)
through (5), the duty-free treatment provided under
this title does not apply to--
``(A) textile 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) footwear not designated at the time
of the effective date of this title as eligible
articles for the purpose of the generalized
system of preferences under title V of the
Trade Act of 1974;
``(C) tuna, prepared or preserved in any
manner, in airtight containers;
``(D) petroleum, or any product derived
from petroleum, provided for in headings 2709
and 2710 of the HTS;
``(E) 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; or
``(F) articles to which reduced rates of
duty apply under subsection (h).
``(2) Transition period treatment of certain
textile and apparel articles.--
``(A) Articles covered.--During the
transition period, the preferential treatment
described in subparagraph (B) shall apply to
the following articles:
``(i) Apparel articles assembled in
a cbtpa beneficiary country.--Apparel
articles assembled in a CBTPA
beneficiary country from fabrics wholly
formed and cut in the United States,
from yarns wholly formed in the United
States, that are--
``(I) entered under
subheading 9802.00.80 of the
HTS; or
``(II) entered under
chapter 61 or 62 of the HTS,
if, after such assembly, the
articles would have qualified
for entry under subheading
9802.00.80 of the HTS but for
the fact that the articles were
embroidered or subjected to
stone-washing, enzyme-washing,
acid washing, perma-pressing,
oven-baking, bleaching,
garment-dyeing, screen
printing, or other similar
processes.
``(ii) Apparel articles cut and
assembled in one or more cbtpa
beneficiary countries.--Apparel
articles cut in a CBTPA beneficiary
country from fabric wholly formed in
the United States from yarns wholly
formed in the United States, if such
articles are assembled in such country
with thread formed in the United
States.
``(iii) Certain knit apparel
articles.--(I) Apparel articles knit to
shape (other than socks provided for in
heading 6115 of the HTS) in a CBTPA
beneficiary country from yarns wholly
formed in the United States, and knit
apparel articles (other than t-shirts
described in subclause (III)) cut and
wholly assembled in 1 or more CBTPA
beneficiary countries from fabric
formed in one or more CBTPA beneficiary
countries or the United States from
yarns wholly formed in the United
States, in an amount not exceeding the
amount set forth in subclause (II).
``(II) The amount referred to in
subclause (I) is--
``(aa) 250,000,000 square
meter equivalents during the 1-
year period beginning on
October 1, 2000, increased by
16 percent, compounded
annually, in each succeeding 1-
year period through September
30, 2004; and
``(bb) in each 1-year
period thereafter through
September 30, 2008, the amount
in effect for the 1-year period
ending on September 30, 2004,
or such other amount as may be
provided by law.
``(III) T-shirts, other than
underwear, classifiable under
subheadings 6109.10.00 and 6109.90.10
of the HTS, made in one or more CBTPA
beneficiary countries from fabric
formed in one or more CBTPA beneficiary
countries from yarns wholly formed in
the United States, in an amount not
exceeding the amount set forth in
subclause (IV).
``(IV) The amount referred to in
subclause (III) is--
``(aa) 4,200,000 dozen
during the 1-year period
beginning on October 1, 2000,
increased by 16 percent,
compounded annually, in each
succeeding 1-year period
through September 30, 2004; and
``(bb) in each 1-year
period thereafter, the amount
in effect for the 1-year period
ending on September 30, 2004,
or such other amount as may be
provided by law.
``(V) It is the sense of Congress
that the Congress should determine,
based on the record of expansion of
exports from the United States as a
result of the preferential treatment of
articles under this clause, the
percentage by which the amount provided
in subclauses (II) and (IV) should be
compounded for the 1-year periods
occuring after the 1-year period ending
on September 30, 2004.
``(iv) Certain other apparel
articles.--(I) Subject to subclause
(II), any apparel article classifiable
under subheading 6212.10 of the HTS, if
the article is both cut and sewn or
otherwise assembled in the United
States, or 1 or more of the CBTPA
beneficiary countries, or both.
``(II) During the 1-year period
beginning on October 1, 2001, and
during eachof 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 fabric
components formed in the United States that are used in the production
of all such articles of that producer or entity during the preceding 1-
year period is at least 75 percent of the aggregate declared customs
value of the fabric contained in all such articles of that producer or
entity that are entered during the preceding 1-year period.
``(III) 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 fabric components formed in the
United States used in the production of
such articles of that producer or
entity in the preceding 1-year period
is at least 85 percent of the aggregate
declared customs value of the fabric
contained in all such articles of that
producer or entity that are entered
during the preceding 1-year period.
``(v) Apparel articles assembled
from fibers, fabric, or yarn not widely
available in commercial quantities.--
(I) Apparel articles that are both cut
(or knit-to-shape) and sewn or
otherwise assembled in 1 or more CBTPA
beneficiary countries, from fibers,
fabric, or yarn that is not formed in
the United States or in 1 or more CBTPA
beneficiary countries, to the extent
that such fibers, fabric, or yarn would
be eligible for preferential treatment,
without regard to the source of the
fibers, fabric, or yarn, under Annex
401 of the NAFTA.
``(II) At the request of any
interested party, the President is
authorized to proclaim additional
fibers, fabric, and yarn as eligible
for preferential treatment under
subclause (I) if--
``(aa) the President
determines that such fibers,
fabric, or yarn cannot be
supplied by the domestic
industry in commercial
quantities in a timely manner;
``(bb) 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;
``(cc) 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 actions, and the advice
obtained under division (bb);
``(dd) a period of 60
calendar days, beginning with
the first day on which the
President has met the
requirements of division (cc),
has expired; and
``(ee) the President has
consulted with such committees
regarding the proposed action
during the period referred to
in division (cc).
``(vi) Handloomed, handmade, and
folklore articles.--A handloomed,
handmade, or folklore article of a
CBTPA beneficiary country identified
under subparagraph (C) that is
certified as such by the competent
authority of such beneficiary country.
``(vii) Special rules.--
``(I) Exception for
findings and trimmings.--(aa)
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. Elastic
strips are considered findings
or trimmings only if they are
each less than 1 inch in width
and are used in the production
of brassieres.
``(bb) In the case of an
article described in clause
(ii) of this subparagraph,
sewing thread shall not be
treated as findings or
trimmings under this subclause.
``(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 anyfindings
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 paragraph
because the article contains
fibers or yarns not wholly
formed in the United States or
in 1 or more CBTPA beneficiary
countries shall not be
ineligible for such treatment
if the total weight of all such
fibers or yarns is not more
than 7 percent of the total
weight of the good.
Notwithstanding the preceding
sentence, an apparel article
containing elastomeric yarns
shall be eligible for
preferential treatment under
this paragraph only if such
yarns are wholly formed in the
United States.
``(IV) Special origin
rule.--An article otherwise
eligible for preferential
treatment under clause (i) or
(ii) of this subparagraph shall
not be ineligible for such
treatment because the article
contains nylon filament yarn
(other than elastomeric yarn)
that is entered 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 duty-free
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 a CBTPA
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 a CBTPA
beneficiary country from fabric
wholly formed in the United
States from yarns wholly formed
in the United States.
``(B) Preferential treatment.--Except as
provided in subparagraph (E), during the
transition period, the articles to which this
subparagraph applies shall enter the United
States free of duty and free of any
quantitative restrictions, limitations, or
consultation levels.
``(C) Handloomed, handmade, and folklore
articles.--For purposes of subparagraph
(A)(vi), the President shall consult with
representatives of the CBTPA 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 transshipments.--
``(i) Penalties for exporters.--If
the President determines, based on
sufficient evidence, that an exporter
has engaged in transshipment with
respect to textile or apparel articles
from a CBTPA 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 CBTPA 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 textile and
apparel articles that may be imported
into the United States from such
country by the quantity of the
transshipped articles multiplied by 3,
to the extent consistent with the
obligations of the United States under
the WTO.
``(iii) Transshipment described.--
Transshipment within the meaning of
this subparagraph has occurred when
preferential treatment under
subparagraph (B) 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 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 (B).
``(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 articleimported from a CBTPA
beneficiary country if the application of tariff treatment under
subparagraph (B) 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 have the meaning
given that term in paragraph
(5)(D) of this subsection; 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
CBTPA beneficiary country in
question and the country does
not agree to consult within the
time period specified under
section 4.
``(3) Transition period treatment of certain other
articles originating in beneficiary countries.--
``(A) Equivalent tariff treatment.--
``(i) In general.--Subject to
clause (ii), the tariff treatment
accorded at any time during the
transition period to any article
referred to in any of subparagraphs (B)
through (F) of paragraph (1) that is a
CBTPA originating good shall be
identical to the tariff treatment that
is accorded at such time under Annex
302.2 of the NAFTA to an article
described in the same 8-digit
subheading of the HTS that is a good of
Mexico and is imported into the United
States.
``(ii) Exception.--Clause (i) does
not apply to any article accorded duty-
free treatment under U.S. Note 2(b) to
subchapter II of chapter 98 of the HTS.
``(B) Relationship to subsection (h) duty
reductions.--If at any time during the
transition period the rate of duty that would
(but for action taken under subparagraph (A)(i)
in regard to such period) apply with respect to
any article under subsection (h) is a rate of
duty that is lower than the rate of duty
resulting from such action, then such lower
rate of duty shall be applied for the purposes
of implementing such action.
``(4) Customs procedures.--
``(A) In general.--
``(i) Regulations.--Any importer
that claims preferential treatment
under paragraph (2) or (3) shall comply
with customs procedures similar in all
material respects to the requirements
of Article 502(1) of the NAFTA as
implemented pursuant to United States
law, in accordance with regulations
promulgated by the Secretary of the
Treasury.
``(ii) Determination.--
``(I) In general.--In order
to qualify for the preferential
treatment under paragraph (2)
or (3) and for a Certificate of
Origin to be valid with respect
to any article for which such
treatment is claimed, there
shall be in effect a
determination by the President
that each country described in
subclause (II)--
``(aa) has
implemented and
follows, or
``(bb) is making
substantial progress
toward implementing and
following,
procedures and requirements
similar in all material
respects to the relevant
procedures and requirements
under chapter 5 of the NAFTA.
``(II) Country described.--
A country is described in this
subclause if it is a CBTPA
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 (2) or
(3).
``(B) Certificate of origin.--The
Certificate of Origin that otherwise would be
required pursuant to the provisions of
subparagraph (A) shall not be required in the
case of an article imported under paragraph (2)
or (3) if such Certificate of Origin would not
be required under Article 503 of the NAFTA (as
implemented pursuant to United States law), if
the article were imported from Mexico.
``(C) Report by ustr on cooperation of
other countries concerning circumvention.--The
United States Commissioner of Customs shall
conduct a study analyzing the extent to which
each CBTPA 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 fiber
content, 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 Trade Representative shall submit to
Congress, not later than October 1, 2001, a
report on the study conducted under this
subparagraph.
``(5) Definitions and special rules.--For purposes
of this subsection--
``(A) Annex.--The term `the Annex' means
Annex 300-B of the NAFTA.
``(B) CBTPA beneficiary country.--The term
`CBTPA beneficiary country' means any
`beneficiary country', as defined in section
212(a)(1)(A) of this title, which the President
designates as a CBTPA beneficiary country,
taking into account the criteria contained in
subsections (b) and (c) of section 212 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 counter-narcotics
certification criteria set forth in
section 490 of the Foreign Assistance
Act of 1961 (22 U.S.C. 2291j) for
eligibility for United States
assistance.
``(vi) The extent to which the
country has taken steps to become a
party to and implements the Inter-
American Convention Against Corruption.
``(vii) The extent to which the
country--
``(I) applies transparent,
nondiscriminatory, and
competitive procedures in
government procurement
equivalent to those contained
in the Agreement on Government
Procurement described in
section 101(d)(17) of the
Uruguay Round Agreements Act;
and
``(II) contributes to
efforts in international fora
to develop and implement
international rules in
transparency in government
procurement.
``(C) CBTPA originating good.--
``(i) In general.--The term `CBTPA
originating good' means a good that
meets the rules of origin for a good
set forth in chapter 4 of the NAFTA as
implemented pursuant to United States
law.
``(ii) Application of chapter 4.--
In applying chapter 4 of the NAFTA with
respect to a CBTPA beneficiary country
for purposes of this subsection--
``(I) no country other than
the United States and a CBTPA
beneficiary country may be
treated as being a party to the
NAFTA;
``(II) any reference to
trade between the United States
and Mexico shall be deemed to
refer to trade between the
United States and a CBTPA
beneficiary country;
``(III) any reference to a
party shall be deemed to refer
to a CBTPA beneficiary country
or the United States; and
``(IV) any reference to
parties shall be deemed to
refer to any combination of
CBTPA beneficiary countries or
to the United States and 1 or
more CBTPA beneficiary
countries (or any combination
thereof).
``(D) Transition period.--The term
`transition period' means, with respect to a
CBTPAbeneficiary country, the period that
begins on October 1, 2000, and ends on the earlier of--
``(i) September 30, 2008, or
``(ii) the date on which the FTAA
or another free trade agreement that
makes substantial progress in achieving
the negotiating objectives set forth in
108(b)(5) of Public Law 103-182 (19
U.S.C. 3317(b)(5)) enters into force
with respect to the United States and
the CBTPA beneficiary country.
``(E) CBTPA.--The term `CBTPA' means the
United States-Caribbean Basin Trade Partnership
Act.
``(F) FTAA.--The term `FTAA' means the Free
Trade Area of the Americas.''.
(b) Determination Regarding Retention of Designation.--
Section 212(e) of the Caribbean Basin Economic Recovery Act (19
U.S.C. 2702(e)) is amended--
(1) in paragraph (1)--
(A) by redesignating subparagraphs (A) and
(B) as clauses (i) and (ii), respectively;
(B) by inserting ``(A)'' after ``(1)''; and
(C) by adding at the end the following:
``(B) The President may, after the requirements of
subsection (a)(2) and paragraph (2) have been met--
``(i) withdraw or suspend the designation of any
country as a CBTPA beneficiary country, or
``(ii) withdraw, suspend, or limit the application
of preferential treatment under section 213(b) (2) and
(3) to any article of any country,
if, after such designation, the President determines that, as a
result of changed circumstances, the performance of such
country is not satisfactory under the criteria set forth in
section 213(b)(5)(B).''; and
(2) by adding after paragraph (2) the following new
paragraph:
``(3) If preferential treatment under section 213(b) (2)
and (3) is withdrawn, suspended, or limited with respect to a
CBTPA beneficiary country, such country shall not be deemed to
be a `party' for the purposes of applying section 213(b)(5)(C)
to imports of articles for which preferential treatment has
been withdrawn, suspended, or limited with respect to such
country.''.
(c) Reporting Requirements.--
(1) Section 212(f) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2702(f)) is amended to read as
follows:
``(f) Reporting Requirements.--
``(1) In general.--Not later than December 31,
2001, and every 2 years thereafter during the period
this title is in effect, the United States Trade
Representative shall submit to Congress a report
regarding the operation of this title, including--
``(A) with respect to subsections (b) and
(c), 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 CBTPA beneficiary country, as the
case may be, under the criteria set forth in
section 213(b)(5)(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 213(b)(5)(B).''.
(2) Section 203(f) of the Andean Trade Preference
Act (19 U.S.C. 3202(f)) is amended--
(A) by striking ``Triennial Report'' in the
heading and inserting ``Report''; and
(B) by striking ``On or before'' and all
that follows through ``enactment of this
title'' and inserting ``Not later than January
31, 2001''.
(d) International Trade Commission Reports.--
(1) Section 215(a) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2704(a)) is amended to read as
follows:
``(a) Reporting Requirement.--
``(1) In general.--The United States International
Trade Commission (in this section referred to as the
`Commission') shall submit to Congress and the
President biennial reports regarding the economic
impact of this title on United States industries and
consumers and on the economy of the beneficiary
countries.
``(2) First report.--The first report shall be
submitted not later than September 30, 2001.
``(3) Treatment of puerto rico, etc.--For purposes
of this section, industries in the Commonwealth of
Puerto Rico and the insular possessions of the United
States are considered to be United States
industries.''.
(2) Section 206(a) of the Andean Trade Preference
Act (19 U.S.C. 3204(a)) is amended to read as follows:
``(a) Reporting Requirements.--
``(1) In general.--The United States International
Trade Commission (in this section referred to as the
`Commission') shall submit to Congress and the
President biennial reports regarding the economic
impact of this title on United States industries and
consumers, and, in conjunction with other agencies, the
effectiveness of this title in promoting drug-related
crop eradication and crop substitution efforts of the
beneficiary countries.
``(2) Submission.--During the period that this
title is in effect, the report required by paragraph
(1) shall be submitted on December 31 of each year that
the report required by section 215 of the Caribbean
Basin Economic Recovery Act is not submitted.
``(3) Treatment of puerto rico, etc.--For purposes
of this section, industries in the Commonwealth of
Puerto Rico and the insular possessions of the United
States are considered to be United States
industries.''.
(e) Technical and Conforming Amendments.--
(1) In general.--
(A) Section 211 of the Caribbean Basin
Economic Recovery Act (19 U.S.C. 2701) is
amended by inserting ``(or other preferential
treatment)'' after ``treatment''.
(B) Section 213(a)(1) of the Caribbean
Basin Economic Recovery Act (19 U.S.C.
2703(a)(1)) is amended by inserting ``and
exceptas provided in subsection (b) (2) and
(3),'' after ``Tax Reform Act of 1986,''.
(2) Definitions.--Section 212(a)(1) of the
Caribbean Basin Economic Recovery Act (19 U.S.C.
2702(a)(1)) is amended by adding at the end the
following new subparagraphs:
``(D) The term `NAFTA' means the North
American Free Trade Agreement entered into
between the United States, Mexico, and Canada
on December 17, 1992.
``(E) The terms `WTO' and `WTO member' have
the meanings given those terms in section 2 of
the Uruguay Round Agreements Act (19 U.S.C.
3501).''.
SEC. 214. DUTY-FREE TREATMENT FOR CERTAIN BEVERAGES MADE WITH CARIBBEAN
RUM.
Section 213(a) of the Caribbean Basin Economic Recovery Act
(19 U.S.C. 2703(a)) is amended--
(1) in paragraph (5), by striking ``chapter'' and
inserting ``title''; and
(2) by adding at the end the following new
paragraph:
``(6) Notwithstanding paragraph (1), the duty-free
treatment provided under this title shall apply to liqueurs and
spirituous beverages produced in the territory of Canada from
rum if--
``(A) such rum is the growth, product, or
manufacture of a beneficiary country or of the Virgin
Islands of the United States;
``(B) such rum is imported directly from a
beneficiary country or the Virgin Islands of the United
States into the territory of Canada, and such liqueurs
and spirituous beverages are imported directly from the
territory of Canada into the customs territory of the
United States;
``(C) when imported into the customs territory of
the United States, such liqueurs and spirituous
beverages are classified in subheading 2208.90 or
2208.40 of the HTS; and
``(D) such rum accounts for at least 90 percent by
volume of the alcoholic content of such liqueurs and
spirituous beverages.''.
SEC. 215. MEETINGS OF TRADE MINISTERS AND USTR.
(a) Schedule of Meetings.--The President shall take the
necessary steps to convene a meeting with the trade ministers
of the CBTPA beneficiary countries in order to establish a
schedule of regular meetings, to commence as soon as is
practicable, of the trade ministers and the Trade
Representative, for the purpose set forth in subsection (b).
(b) Purpose.--The purpose of the meetings scheduled under
subsection (a) is to reach agreement between the United States
and CBTPA beneficiary countries on the likely timing and
procedures for initiating negotiations for CBTPA beneficiary
countries to enter into mutually advantageous free trade
agreements with the United States that contain provisions
comparable to those in the NAFTA and would make substantial
progress in achieving the negotiating objectives set forth in
section 108(b)(5) of Public Law 103-182 (19 U.S.C. 3317(b)(5)).
(c) Definition.--In this section, the term ``CBTPA
beneficiary country'' has the meaning given that term in
section 213(b)(5)(B) of the Caribbean Basin Economic Recovery
Act.
TITLE III--NORMAL TRADE RELATIONS
SEC. 301. NORMAL TRADE RELATIONS FOR ALBANIA.
(a) Findings.--Congress makes the following findings:
(1) Albania has been found to be in full compliance
with the freedom of emigration requirements under title
IV of the Trade Act of 1974.
(2) Since its emergence from communism, Albania has
made progress toward democratic rule and the creation
of a free-market economy.
(3) Albania has concluded a bilateral investment
treaty with the United States.
(4) Albania has demonstrated a strong desire to
build a friendly relationship with the United States
and has been very cooperative with NATO and the
international community during and after the Kosova
crisis.
(5) The extension of unconditional normal trade
relations treatment to the products of Albania will
enable the United States to avail itself of all
rightsunder the World Trade Organization with respect to Albania when
that country becomes a member of the World Trade Organization.
(b) Termination of Application of Title IV of the Trade Act
of 1974 to Albania.--
(1) Presidential determinations and extensions of
nondiscriminatory treatment.--Notwithstanding any
provision of title IV of the Trade Act of 1974 (19
U.S.C. 2431 et seq.), the President may--
(A) determine that such title should no
longer apply to Albania; and
(B) after making a determination under
subparagraph (A) with respect to Albania,
proclaim the extension of nondiscriminatory
treatment (normal trade relations treatment) to
the products of that country.
(2) Termination of application of title iv.--On or
after the effective date of the extension under
paragraph (1)(B) of nondiscriminatory treatment to the
products of Albania, title IV of the Trade Act of 1974
shall cease to apply to that country.
SEC. 302. NORMAL TRADE RELATIONS FOR KYRGYZSTAN.
(a) Findings.--Congress makes the following findings:
(1) Kyrgyzstan has been found to be in full
compliance with the freedom of emigration requirements
under title IV of the Trade Act of 1974.
(2) Since its independence from the Soviet Union in
1991, Kyrgyzstan has made great progress toward
democratic rule and toward creating a free-market
economic system.
(3) Kyrgyzstan concluded a bilateral investment
treaty with the United States in 1994.
(4) Kyrgyzstan has demonstrated a strong desire to
build a friendly and cooperative relationship with the
United States.
(5) The extension of unconditional normal trade
relations treatment to the products of Kyrgyzstan will
enable the United States to avail itself of all
rightsunder the World Trade Organization with respect to Kyrgyzstan.
(b) Termination of Application of Title IV of the Trade Act
of 1974 to Kyrgyzstan.--
(1) Presidential determinations and extensions of
nondiscriminatory treatment.--Notwithstanding any
provision of title IV of the Trade Act of 1974 (19
U.S.C. 2431 et seq.), the President may--
(A) determine that such title should no
longer apply to Kyrgyzstan; and
(B) after making a determination under
subparagraph (A) with respect to Kyrgyzstan,
proclaim the extension of nondiscriminatory
treatment (normal trade relations treatment) to
the products of that country.
(2) Termination of application of title iv.--On or
after the effective date of the extension under
paragraph (1)(B) of nondiscriminatory treatment to the
products of Kyrgyzstan, title IV of the Trade Act of
1974 shall cease to apply to that country.
TITLE IV--OTHER TRADE PROVISIONS
SEC. 401. REPORT ON EMPLOYMENT AND TRADE ADJUSTMENT ASSISTANCE.
(a) In General.--Not later than 9 months after the date of
enactment of this section, the Comptroller General of the
United States shall submit to Congress a report regarding the
efficiency and effectiveness of Federal and State coordination
of employment and retraining activities associated with the
following programs and legislation:
(1) Trade adjustment assistance (including NAFTA
trade adjustment assistance) provided for under title
II of the Trade Act of 1974.
(2) The Job Training Partnership Act.
(3) The Workforce Investment Act of 1998.
(4) Unemployment insurance.
(b) Period Covered.--The report shall cover the activities
involved in the programs and legislation listed in subsection
(a) from January 1, 1994, to December 31, 1999.
(c) Data and Recommendations.--The report shall at a
minimum include specific data and recommendations regarding--
(1) the compatibility of program requirements
related to the employment and retraining of dislocated
workers in the United States, with particular emphasis
on the trade adjustment assistance programs provided
for under title II of the Trade Act of 1974;
(2) the compatibility of application procedures
related to the employment and retraining of dislocated
workers in the United States;
(3) the capacity of the programs in addressing
foreign trade and the transfer of production to other
countries on workers in the United States measured in
terms of loss of employment and wages;
(4) the capacity of the programs in addressing
foreign trade and the transfer of production to other
countries on secondary workers in the United States
measured in terms of loss of employment and wages;
(5) how the impact of foreign trade and the
transfer of production to other countries would have
changed the number of beneficiaries covered under the
trade adjustment assistance program if the trade
adjustment assistance program covered secondary workers
in the United States; and
(6) the effectiveness of the programs described in
subsection (a) in achieving reemployment of United
States workers and maintaining wage levels of United
States workers who have been dislocated as a result of
foreign trade and the transfer of production to other
countries.
SEC. 402. TRADE ADJUSTMENT ASSISTANCE.
(a) Certification of Eligibility for Workers Required for
Decommissioning or Closure of Facility.--
(1) In general.--Notwithstanding any other
provision of law or any decision by the Secretary of
Labor denying certification or eligibility for
certification for adjustment assistance under title II
of the Trade Act of 1974, a qualified worker described
in paragraph (2) shall be certified by the Secretary as
eligible to apply for adjustment assistance under such
title II.
(2) Qualified worker.--For purposes of this
subsection, a ``qualified worker'' means a worker who--
(A) was determined to be covered under
Trade Adjustment Assistance Certification TA-W-
28,438; and
(B) was necessary for the decommissioning
or closure of a nuclear power facility.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of enactment of this Act.
SEC. 403. RELIQUIDATION OF CERTAIN NUCLEAR FUEL ASSEMBLIES.
(a) In General.--Notwithstanding section 514 of the Tariff
Act of 1930 (19 U.S.C. 1514) or any other provision of law,
upon proper request filed with the Secretary of the Treasury
not later than 90 days after the date of enactment of this Act,
the Secretary shall--
(1) reliquidate as free of duty the entries listed
in subsection (b); and
(2) refund any duties paid with respect to such
entries as shown on Customs Service Collection Receipt
Number 527006753.
(b) Entries.--The entries referred to in subsection (a) are
as follows:
Entry number Date of entry
062-2320014-5.....January 16, 1996....................................
062-2320085-5.....February 13, 1996...................................
839-4030989-7.....November 25, 1996...................................
839-4031053-1.....December 2, 1996....................................
839-4031591-0.....January 21, 1997....................................
SEC. 404. REPORTS TO THE FINANCE AND WAYS AND MEANS COMMITTEES.
(a) Reports Regarding Initiatives To Update the
International Monetary Fund.--Section 607 of the Foreign
Operations, Export Financing, and Related Appropriations Act,
1999 (as contained in section 101(d) of division A of the
Omnibus Consolidated and Emergency Supplemental Appropriations
Act, 1999) (Public Law 105-277;112 Stat. 2681-224), relating to
international financial programs and reform, is amended--
(1) by inserting ``Finance,'' after ``Foreign
Relations,''; and
(2) by inserting ``, Ways and Means,'' before ``and
Banking and Financial Services''.
(b) Reports on Financial Stabilization Programs.--Section
1704(b) of the International Financial Institutions Act (22
U.S.C. 262r-3(b)) is amended to read as follows:
``(b) Timing.--Not later than March 15, 1999, and
semiannually thereafter, the Secretary of the Treasury shall
submit to the Committees on Banking and Financial Services,
Ways and Means, and International Relations of the House of
Representatives and the Committees on Finance, Foreign
Relations, and Banking, Housing, and Urban Affairs of the
Senate a report on the matters described in subsection (a).''.
(c) Annual Report on the State of the International
Financial System, IMF Reform, and Compliance With IMF
Agreements.--Section 1705(a) of the International Financial
Institutions Act (22 U.S.C. 262r-4(a)) is amended by striking
``Committee on Banking and Financial Services of the House of
Representatives and the Committee on Foreign Relations of the
Senate'' and inserting ``Committees on Banking and Financial
Services and on Ways and Means of the House of Representatives
and the Committees on Finance and on Foreign Relations of the
Senate''.
(d) Audits of the IMF.--Section 1706(a) of the
International Financial Institutions Act (22 U.S.C. 262r-5(a))
is amended by striking ``Committee on Banking and Financial
Services of the House of Representatives and the Committee on
Foreign Relations of the Senate'' and inserting ``Committees on
Banking and Financial Services and on Ways and Means of the
House of Representatives and the Committees on Finance and on
Foreign Relations of the Senate''.
(e) Report on Protection of Borders Against Drug Traffic.--
Section 629 of the Treasury and General Government
Appropriations Act, 1999 (as contained in section 101(h) of
division A of the Omnibus Consolidated and Emergency
Supplemental Appropriations Act, 1999) (Public Law 105-277; 112
Stat. 2681-522), relating to general provisions, is amended by
adding at the end the following new paragraph:
``(3) For purposes of paragraph (1), the term `appropriate
congressional committees' includes the Committee on Finance of
the Senate and the Committee on Ways and Means of the House of
Representatives.''.
SEC. 405. CLARIFICATION OF SECTION 334 OF THE URUGUAY ROUND AGREEMENTS
ACT.
(a) In General.--Section 334(b)(2) of the Uruguay Round
Agreements Act (19 U.S.C. 3592(b)(2)) is amended--
(1) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively;
(2) in the matter preceding clause (i) (as
redesignated), by striking ``Notwithstanding paragraph
(1)(D)'' and inserting ``(A) Notwithstanding paragraph
(1)(D) and except as provided in subparagraphs (B) and
(C)''; and
(3) by adding at the end the following:
``(B) Notwithstanding paragraph (1)(C), fabric
classified under the HTS as of silk, cotton, man-made
fiber, or vegetable fiber shall be considered to
originate in, and be the growth, product, or
manufacture of, the country, territory, or possession
in which the fabric is both dyed and printed when
accompanied by 2 or more of the following finishing
operations: bleaching, shrinking, fulling, napping,
decating, permanent stiffening, weighting, permanent
embossing, or moireing.
``(C) Notwithstanding paragraph (1)(D), goods
classified under HTS heading 6117.10, 6213.00, 6214.00,
6302.22, 6302.29, 6302.52, 6302.53, 6302.59, 6302.92,
6302.93, 6302.99, 6303.92, 6303.99, 6304.19, 6304.93,
6304.99, 9404.90.85, or 9404.90.95, except for goods
classified under such headings as of cotton or of wool
or consisting of fiber blends containing 16 percent or
more by weight of cotton, shall be considered to
originate in, and be the growth, product, or
manufacture of, the country, territory, or possession
in which the fabric is both dyed and printed when
accompanied by 2 or more of the following finishing
operations: bleaching, shrinking, fulling, napping,
decating, permanent stiffening, weighting, permanent
embossing, or moireing.''.
(b) Effective Date.--The amendments made by this section
apply to goods entered, or withdrawn from warehouse for
consumption, on or after the date of enactment of this Act.
SEC. 406. CHIEF AGRICULTURAL NEGOTIATOR.
Section 141 of the Trade Act of 1974 (19 U.S.C. 2171) is
amended--
(1) by amending subsection (b)(2) to read as
follows:
``(2) There shall be in the Office three Deputy
United States Trade Representatives and one Chief
Agricultural Negotiator who shall be appointed by the
President, by and with the advice and consent of the
Senate. As an exercise of the rulemaking power of the
Senate, any nomination of a Deputy United States Trade
Representative or the Chief Agricultural Negotiator
submitted to the Senate for its advice and consent, and
referred to a committee, shall be referred to the
Committee on Finance. Each Deputy United States Trade
Representative and the Chief Agricultural Negotiator
shall hold office at the pleasure of the President and
shall have the rank of Ambassador.''; and
(2) in subsection (c), by adding at the end the
following new paragraph:
``(5) The principal function of the Chief
Agricultural Negotiator shall be to conduct trade
negotiations and to enforce trade agreements relating
to United States agricultural products and services.
The Chief Agricultural Negotiator shall be a vigorous
advocate on behalf of United States agricultural
interests. The Chief Agricultural Negotiator shall
perform such other functions as the United States Trade
Representative may direct.''.
SEC. 407. REVISION OF RETALIATION LIST OR OTHER REMEDIAL ACTION.
Section 306(b)(2) of the Trade Act of 1974 (19 U.S.C.
2416(b)(2)) is amended--
(1) by striking ``If the'' and inserting the
following:
``(A) Failure to implement
recommendation.--If the''; and
(2) by adding at the end the following:
``(B) Revision of retaliation list and
action.--
``(i) In general.--Except as
provided in clause (ii), in the event
that the United States initiates a
retaliation list or takes any other
action described in section 301(c)(1)
(A) or (B) against the goods of a
foreign country or countries because of
the failure of such country or
countries to implement the
recommendation made pursuant to a
dispute settlement proceeding under the
World Trade Organization, the Trade
Representative shall periodically
revise the list or action to affect
other goods of the country or countries
that have failed to implement the
recommendation.
``(ii) Exception.--The Trade
Representative is not required to
revise the retaliation list or the
action described in clause (i) with
respect to a country, if--
``(I) the Trade
Representative determines that
implementation of a
recommendation made pursuant to
a dispute settlement proceeding
described in clause (i) by the
country is imminent; or
``(II) the Trade
Representative together with
the petitioner involved in the
initial investigation under
this chapter (or if no petition
was filed, the affected United
States industry) agree that it
is unnecessary to revise the
retaliation list.
``(C) Schedule for revising list or
action.--The Trade Representative shall, 120
days after the date the retaliation list or
other section 301(a) action is first taken, and
every 180 days thereafter, review the list or
action taken and revise, in whole or in part,
the list or action to affect other goods of the
subject country or countries.
``(D) Standards for revising list or
action.--In revising any list or action against
a country or countries under this subsection,
the Trade Representative shall act in a manner
that is most likely to result in the country or
countries implementing the recommendations
adopted in the dispute settlement proceeding or
in achieving a mutually satisfactory solution
to the issue that gave rise to the dispute
settlement proceeding. The Trade Representative
shall consult with the petitioner, if any,
involved in the initial investigation under
this chapter.
``(E) Retaliation list.--The term
`retaliation list' means the list of products
of a foreign country or countries that have
failed to comply with the report of the panel
or Appellate Body of the WTO and with respect
to which the Trade Representative is imposing
duties above the level that would otherwise be
imposed under the Harmonized Tariff Schedule of
the United States.
``(F) Requirement to include reciprocal
goods on retaliation list.--The Trade
Representative shall include on the retaliation
list, and on any revised lists, reciprocal
goods of the industries affected by the failure
of the foreign country or countries to
implement the recommendation made pursuant to a
dispute settlement proceeding under the World
Trade Organization, except in cases where
existing retaliation and its corresponding
preliminary retaliation list do not already
meet this requirement.''.
SEC. 408. REPORT ON TRADE ADJUSTMENT ASSISTANCE FOR AGRICULTURAL
COMMODITY PRODUCERS.
(a) In General.--Not later than 4 months after the date of
enactment of this Act, the Secretary of Labor, in consultation
with the Secretary of Agriculture and the Secretary of
Commerce, shall submit to the Committee on Ways and Means of
the House of Representatives and the Committee on Finance of
the Senate a report that--
(1) examines the applicability to agricultural
commodity producers of trade adjustment assistance
programs established under title II of the Trade Act of
1974; and
(2) sets forth recommendations to improve the
operation of those programs as the programs apply to
agricultural commodity producers or to establish a new
trade adjustment assistance program for agricultural
commodity producers.
(b) Contents.--In preparing the report required by
subsection (a), the Secretary of Labor shall--
(1) assess the degree to which the existing trade
adjustment assistance programs address the adverse
effects on agricultural commodity producers due to
price suppression caused by increased imports of like
or directly competitive agricultural commodities; and
(2) examine the effectiveness of the program
benefits authorized under subchapter B of chapter 2 and
chapter 3 of title II of the Trade Act of 1974 in
remedying the adverse effects, including price
suppression, caused by increased imports of like or
directly competitive agricultural commodities.
(c) Definitions.--In this section:
(1) Agricultural commodity.--The term
``agricultural commodity'' means any agricultural
commodity, including livestock, fish or harvested
seafood in its raw or natural state.
(2) Agricultural commodity producer.--The term
``agricultural commodity producer'' means any person
who is engaged in the production and sale of an
agricultural commodity in the United States and who
owns or shares the ownership and risk of loss of the
agricultural commodity.
SEC. 409. AGRICULTURAL TRADE NEGOTIATING OBJECTIVES AND CONSULTATIONS
WITH CONGRESS.
(a) Findings.--Congress finds that--
(1) United States agriculture contributes
positively to the United States balance of trade
andUnited States agricultural exports support in excess of 1,000,000
United States jobs;
(2) United States agriculture competes successfully
worldwide despite the fact that United States producers
are at a competitive disadvantage because of the trade
distorting support and subsidy practices of other
countries and despite the fact that significant tariff
and nontariff barriers exist to United States exports;
and
(3) a successful conclusion of the current World
Trade Organization agricultural negotiations is
critically important to the United States agricultural
sector.
(b) Objectives.--The agricultural trade negotiating
objectives of the United States with respect to the current
World Trade Organization agricultural negotiations include as
matters of the highest priority--
(1) the expeditious elimination of all export
subsidies worldwide while maintaining bona fide food
aid and preserving United States market development and
export credit programs that allow the United States to
compete with other foreign export promotion efforts;
(2) leveling the playing field for United States
producers of agricultural products by eliminating blue
box subsidies and disciplining domestic supports in a
way that forces producers to face world prices on all
production in excess of domestic food security needs
while allowing the preservation of nontrade distorting
programs to support family farms and rural communities;
(3) the elimination of state trading enterprises or
the adoption of rigorous disciplines that ensure
operational transparency, competition, and the end of
discriminatory pricing practices, including policies
supporting cross-subsidization and price undercutting
in export markets;
(4) affirming that the World Trade Organization
Agreement on the Application of Sanitary and
Phytosanitary Measures applies to new technologies,
including biotechnology, and that labeling requirements
to allow consumers to make choices regarding
biotechnology products or other regulatory requirements
may not be used as disguised barriers to trade;
(5) increasing opportunities for United States
exports of agricultural products by reducing tariffs to
the same levels that exist in the United States or to
lower levels and by eliminating all nontariff barriers,
including--
(A) restrictive or trade distorting
practices, including those that adversely
impact perishable or cyclical products;
(B) restrictive rules in the administration
of tariff-rate quotas; and
(C) other barriers to agriculture trade,
including unjustified restrictions or
commercial requirements affecting new
technologies, including biotechnology;
(6) eliminating government policies that create
price-depressing surpluses; and
(7) strengthening dispute settlement procedures to
ensure prompt compliance by foreign governments with
their World Trade Organization obligations including
commitments not to maintain unjustified restrictions on
United States exports.
(c) Consultation With Congressional Committees.--
(1) Consultation before offer made.--In developing
and before submitting an initial or revised negotiating
proposal that would reduce United States tariffs on
agricultural products or require a change in United
States agricultural law, the United States Trade
Representative shall consult with the Committee on
Agriculture, Nutrition, and Forestry and the Committee
on Finance of the Senate and the Committee on
Agriculture and the Committee on Ways and Means of the
House of Representatives.
(2) Consultation with congressional trade
advisers.--Prior to and during the course of current
negotiations on agricultural trade, the United States
Trade Representative shall consult closely with the
congressional trade advisers.
(3) Consultation before agreement initialed.--Not
less than 48 hours before initialing an agreement
reached as part of current World Trade Organization
agricultural negotiations, the United States Trade
Representative shall consult closely with the
committees referred to in paragraph (1) regarding--
(A) the details of the agreement;
(B) the potential impact of the agreement
on United States agricultural producers; and
(C) any changes in United States law
necessary to implement the agreement.
(4) Disclosure of commitments.--Any agreement or
other understanding addressing agricultural trade with
a foreign government or governments (whether oral or in
writing) that relates to a trade agreement with respect
to which Congress must enact implementing legislation
and that is not disclosed to Congress before
legislation implementing that agreement is introduced
in either House of Congress shall not be considered to
be part of the agreement approved by Congress and shall
have no force and effect under United States law or in
any dispute settlement body.
(d) Sense of Congress.--It is the sense of Congress that--
(1) granting the President trade negotiating
authority is essential to the successful conclusion of
the new round of World Trade Organization agricultural
negotiations;
(2) reaching a successful agreement on agriculture
should be the top priority of United States
negotiators; and
(3) if by the conclusion of the negotiations, the
primary agricultural competitors of the United States
do not agree to reduce their trade distorting domestic
supports and eliminate export subsidies in accordance
with the negotiating objectives expressed in this
section, the United States should take steps to
increase the leverage of United States negotiators and
level the playing field for United States producers.
SEC. 410. ENTRY PROCEDURES FOR FOREIGN TRADE ZONE OPERATIONS.
(a) In General.--Section 484 of the Tariff Act of 1930 (19
U.S.C. 1484) is amended by adding at the end the following new
subsection:
``(i) Special Rule For Foreign Trade Zone Operations.--
``(1) In general.--Notwithstanding any other
provision of law and except as provided in paragraph
(3), all merchandise (including merchandise of
different classes, types, and categories), withdrawn
from a foreign trade zone during any 7-day period,
shall, at the option of the operator or user of the
zone, be the subject of a single estimated entry or
release filed on or before the first day of the 7-day
period in which the merchandise is to be withdrawn from
the zone. The estimated entry or release shall be
treated as a single entry and a single release of
merchandise for purposes of section 13031(a)(9)(A) of
the Consolidated Omnibus Budget Reconciliation Act of
1985 (19 U.S.C. 58c(a)(9)(A)) and all fee exclusions
and limitations of such section 13031 shall apply,
including the maximum and minimum fee amounts provided
for under subsection (b)(8)(A)(i) of such section. The
entry summary for the estimated entry or release shall
cover only the merchandise actually withdrawn from the
foreign trade zone during the 7-day period.
``(2) Other requirements.--The Secretary of the
Treasury may require that the operator or user of the
zone--
``(A) use an electronic data interchange
approved by the Customs Service--
``(i) to file the entries described
in paragraph (1); and
``(ii) to pay the applicable
duties, fees, and taxes with respect to
the entries; and
``(B) satisfy the Customs Service that
accounting, transportation, and other controls
over the merchandise are adequate to protect
the revenue and meet the requirements of other
Federal agencies.
``(3) Exception.--The provisions of paragraph (1)
shall not apply to merchandise the entry of which is
prohibited by law or merchandise for which the filing
of an entry summary is required before the merchandise
is released from customs custody.
``(4) Foreign trade zone; zone.--In this
subsection, the terms `foreign trade zone' and `zone'
mean a zone established pursuant to the Act of June 18,
1934, commonly known as the Foreign Trade Zones Act (19
U.S.C. 81a et seq.).''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date that is 60 days after the date of
enactment of this Act.
SEC. 411. GOODS MADE WITH FORCED OR INDENTURED CHILD LABOR.
(a) In General.--Section 307 of the Tariff Act of 1930 (19
U.S.C. 1307) is amended by adding at the end the following new
sentence: ``For purposes of this section, the term `forced
labor or/and indentured labor' includes forced or indentured
child labor.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of enactment of this Act.
SEC. 412. WORST FORMS OF CHILD LABOR.
(a) In General.--Section 502(b)(2) of the Trade Act of 1974
(19 U.S.C. 2462(b)(2) is amended--
(1) by inserting after subparagraph (G) the
following new subparagraph:
``(H) Such country has not implemented its
commitments to eliminate the worst forms of
child labor.''; and
(2) in the flush paragraph at the end, by striking
``and (G)'' and inserting ``(G), and (H) (to the extent
described in section 507(6)(A), (B), and (C))''.
(b) Definition of Worst Forms Of Child Labor.--Section 507
of the Trade Act of 1974 (19 U.S.C. 2467) is amended by adding
at the end the following new paragraph:
``(6) Worst forms of child labor.--The term `worst
forms of child labor' means--
``(A) all forms of slavery or practices
similar to slavery, such as the sale or
trafficking of children, debt bondage and
serfdom, or forced or compulsory labor,
including forced or compulsory recruitment of
children for use in armed conflict;
``(B) the use, procuring, or offering of a
child for prostitution, for the production of
pornography or for pornographic purposes;
``(C) the use, procuring, or offering of a
child for illicit activities in particular for
the production and trafficking of drugs; and
``(D) work which, by its nature or the
circumstances in which it is carried out, is
likely to harm the health, safety, or morals of
children.
The work referred to in subparagraph (D) shall be
determined by the laws, regulations, or competent
authority of the beneficiary developing country
involved.''.
(c) Annual Report.--Section 504 of the Trade Act of 1974
(19 U.S.C. 2464) is amended by inserting ``, including the
findings of the Secretary of Labor with respect to the
beneficiary country's implementation of its international
commitments to eliminate the worst forms of child labor''
before the end period.
TITLE V--IMPORTS OF CERTAIN WOOL ARTICLES
SEC. 501. TEMPORARY DUTY REDUCTIONS.
(a) Certain Worsted Wool Fabrics With Average Fiber
Diameters Greater Than 18.5 Micron.--
(1) In general.--Subchapter II of chapter 99 of the
Harmonized Tariff Schedule of the United States is
amended by inserting in numerical sequence the
following new heading:
`` 9902.51.11 Fabrics, of 19.3% No change No change On or before
worsted wool, 12/31/2003 ''.
with average
fiber
diameters
greater than
18.5 micron,
all the
foregoing
certified by
the importer
as suitable
for use in
making suits,
suit-type
jackets, or
trousers
(provided for
in subheadings
5111.11.70,
5111.19.60,
5112.11.20, or
5112.19.90)...
(2) Staged rate reductions.--Any staged rate
reduction of a rate of duty set forth in subheading
6203.31.00 of the Harmonized Tariff Schedule of the
United States that is proclaimed by the President shall
also apply to the corresponding rate
of duty set forth in heading 9902.51.11 of such Schedule, as
added by paragraph (1).
(b) Certain Worsted Wool Fabrics With Average Fiber
Diameters of 18.5 Micron or Less.--
(1) In general.--Subchapter II of chapter 99 of the
Harmonized Tariff Schedule of the United States is
amended by inserting in numerical sequence the
following new heading:
`` 9902.51.12 Fabrics, of 6% No change No change On or before
worsted wool, 12/31/2003 ''.
with average
fiber
diameters of
18.5 micron or
less, all the
foregoing
certified by
the importer
as suitable
for use in
making suits,
suit-type
jackets, or
trousers
(provided for
in subheadings
5111.11.70,
5111.19.60,
5112.11.20, or
5112.19.90)...
(2) Equalization with canadian duty rates.--The
President is authorized to proclaim a reduction in the
rate of duty applicable to imports of worsted wool
fabrics classified under subheading 9902.51.12 of the
Harmonized Tariff Schedule of the United States, as
added by paragraph (1), that is necessary to equalize
such rate of duty with the most favored nation rate of
duty applicable to imports of worsted wool fabrics of
the kind described in such subheading imported into
Canada.
(c) Definitions.--The U.S. Notes to subchapter II of
chapter 99 of the Harmonized Tariff Schedule of the United
States are amended by adding at the end the following:
``13. For purposes of headings 9902.51.11 and 9902.51.12,
the term `suit' has the meaning given such term under note 3(a)
of chapter 62 for purposes of headings 6203 and 6204.
``14. For purposes of headings 9902.51.11 and 9902.51.12,
the term `making' means cut and sewn in the United States.''.
(d) Limitation on Quantity of Imports.--The U.S. Notes to
subchapter II of chapter 99 of the Harmonized Tariff Schedule
of the United States, as amended by subsection (c), are further
amended by adding at the end the following:
``15. The aggregate quantity of worsted wool fabrics
entered under heading 9902.51.11 from January 1 to December 31
of each year, inclusive, shall be limited 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 of 2000.
``16. The aggregate quantity of worsted wool fabrics
entered under subheading 9902.51.12 from January 1 to December
31 of each year, inclusive, shall be limited 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 of 2000.''.
(e) Allocation of Tariff-Rate Quotas.--In implementing the
limitation on the quantity of imports of worsted wool fabrics
under headings 9902.51.11 and 9902.51.12 of the Harmonized
Tariff Schedule of the United States, as required by U.S. Notes
15 and 16 of subchapter II of chapter 99 of such Schedule,
respectively, for the entry, or withdrawal from warehouse for
consumption, the President, consistent with United States
international obligations, shall take such action as determined
appropriate by the President to ensure that such fabrics are
fairly allocated to persons (including firms, corporations, or
other legal entities) who cut and sew men's and boys' worsted
wool suits and suit-like jackets and trousers in the United
States and who apply for an allocation based on the amount of
such suits cut and sewn during the prior calendar year.
(f) Effective Date.--The amendments made by this section
apply with respect to goods entered, or withdrawn from
warehouse for consumption, on or after January 1, 2001.
SEC. 502. TEMPORARY DUTY SUSPENSIONS.
(a) Wool Yarn With Average Fiber Diameters of 18.5 Micron
or Less.--Subchapter II of chapter 99 of the Harmonized Tariff
Schedule of the United States is amended by inserting in
numerical sequence the following new heading:
`` 9902.51.13 Yarn, of combed Free No change No change On or before
wool, not put 12/31/2003 ''.
up for retail
sale,
containing 85
percent or
more by weight
of wool, of
64's and linen
worsted wool
count wool
yarn formed
with wool
fibers having
diameters of
18.5 micron or
less (provided
for in
subheading
5107.10.00)...
(b) Wool Fiber and Wool Top With Average Diameters of 18.5
Micron or Less.--Subchapter II of chapter 99 of the Harmonized
Tariff Schedule of the United States is amended by inserting in
numerical sequence the following new heading:
`` 9902.51.14 Wool fiber, Free No change No change On or before
waste, 12/31/2003 ''.
garnetted
stock, combed
wool, or wool
top, having
average fiber
diameters of
18.5 micron or
less (provided
for in
subheadings
5101.11,
5101.19,
5101.21,
5101.29,
5101.30,
5103.10,
5103.20,
5104.00,
5105.21, or
5105.29)......
(c) Effective Date.--The amendments made by this section
apply with respect to goods entered, or withdrawn from
warehouse for consumption, on or after January 1, 2001.
SEC. 503. SEPARATE TARIFF LINE TREATMENT FOR WOOL YARN AND MEN'S OR
BOYS' SUITS AND SUIT-TYPE JACKETS AND TROUSERS OF
WORSTED WOOL FABRIC.
(a) Separate Tariff Line Treatment.--The President shall
proclaim 8-digit tariff categories, without changes in existing
duty rates, in chapters 51 and 62 of the Harmonized Tariff
Schedule of the United States in order to provide separate
tariff treatment for--
(1) wool yarn made of wool fiber with an average
fiber diameter of 18.5 micron or less, and wool fabrics
made from yarns with an average fiber diameter of 18.5
micron or less; and
(2) men's or boys' suits, suit-type jackets and
trousers of worsted wool fabric, made of wool yarn
having an average diameter of 18.5 micron or less.
(b) Conforming Changes.--The President is authorized to
make conforming changes in headings 9902.51.11, 9902.51.12,
9902.51.13, and 9902.51.14 of the Harmonized Tariff Schedule of
the United States to take into account the new permanent tariff
categories proclaimed under subsection (a).
SEC. 504. MONITORING OF MARKET CONDITIONS AND AUTHORITY TO MODIFY
TARIFF REDUCTIONS.
(a) Monitoring of Market Conditions.--Beginning on the date
of the enactment of this Act, the President shall monitor
market conditions in the United States, including domestic
demand, domestic supply, and increases in domestic production,
of worsted wool fabrics and their components in the market
for--
(1) men's or boys' worsted wool suits, suit-type
jackets, and trousers;
(2) worsted wool fabric and yarn used in the
manufacture of such suits, jackets and trousers; and
(3) wool used in the production of such fabrics and
yarn.
(b) Authority to Modify Limitation on Quantity of Worsted
Wool Fabrics Subject to Tariff Reduction.--
(1) In general.--The President shall, on an annual
basis, consider requests made by United States
manufacturers of apparel products made of worsted wool
fabrics described in subsection (a) to modify the
limitation on the quantity of imports of worsted wool
fabrics under headings 9902.51.11 and 9902.51.12 of the
Harmonized Tariff Schedule of the United States, as
required by U.S. Notes 15 and 16 of subchapter II of
chapter 99 of such Schedule, respectively.
(2) Consideration of certain market conditions.--In
determining whether to modify the limitation on the
quantity of imports of worsted wool fabrics described
in paragraph (1), the President shall consider the
following United States market conditions:
(A) Increases or decreases in sales of the
domestically-produced worsted wool fabrics
described in subsection (a).
(B) Increases or decreases in domestic
production of such fabrics.
(C) Increases or decreases in domestic
production and consumption of the apparel items
described in subsection (a).
(D) The ability of domestic producers of
worsted wool fabrics described in subsection
(a) to meet the needs of domestic manufacturers
of the apparel items described in subsection
(a) in terms of quantity and ability to meet
market demands for the apparel items.
(E) Evidence that domestic manufacturers of
worsted wool fabrics have lost sales due to the
temporary duty reductions on certain worsted
wool fabrics under headings 9902.51.11 and
9902.51.12 of the Harmonized Tariff Schedule of
the United States (as added by subsections (a)
and (b) of section 501).
(F) Evidence that domestic manufacturers of
apparel items described in subsection (a) have
lost sales due to the inability to purchase
adequate supplies of worsted wool fabrics on a
cost competitive basis.
(G) Price per square meter of imports and
domestic sales of worsted wool fabrics.
(3) Modification of limitation on quantity of
fabrics.--
(A) In general.--If the President
determines that the limitation on the quantity
of imports of worsted wool fabrics under
headings 9902.51.11 and 9902.51.12 of the
Harmonized Tariff Schedule of the United States
should be modified, the President shall
proclaim such changes to U.S. Note 15 or 16 to
subchapter II of chapter 99 of such Schedule
(as added by section 501(d)), as the President
determines to be appropriate.
(B) Additional requirement.--In any
calendar year, any modification of the
limitation on the quantity of imports of
worsted wool fabrics under headings 9902.51.11
and 9902.51.12 of the Harmonized Tariff
Schedule of the United States shall not
exceed--
(A) 1,000,000 square meter equivalents for
worsted wool fabrics under heading 9902.51.11;
and
(B) 1,000,000 square meter equivalents for
worsted wool fabrics under heading 9902.51.12.
(c) Implementation.--The President shall issue regulations
necessary to implement the provisions of this section.
SEC. 505. REFUND OF DUTIES PAID ON IMPORTS OF CERTAIN WOOL ARTICLES.
(a) Worsted Wool Fabrics.--In each of the calendar years
2000, 2001, and 2002, a manufacturer of men's or boys' suits,
suit-type jackets, or trousers (not a broker or other
individual acting on behalf of the manufacturer to process the
import) of imported worsted wool fabrics of the kind described
in heading 9902.51.11 or 9902.51.12 of the Harmonized Tariff
Schedule of the United States shall be eligible for a refund of
duties paid on entries of such fabrics in each such calendar
year in an amount equal to one-third of the amount of duties
paid by the importer on such worsted wool fabrics (without
regard to micron level) imported in calendar year 1999.
(b) Wool Yarn.--In 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 9902.51.13 of the
Harmonized Tariff Schedule of the United States shall be
eligible for a refund of duties paid on entries of such wool
yarn in each such calendar year in an amount equal to one-third
of the amount of duties paid by the manufacturer on such wool
yarn (without regard to micron level) imported in calendar year
1999.
(c) Wool Fiber and Wool Top.--In 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 9902.51.14 of the Harmonized Tariff Schedule of the
United States shall be eligible for a refund of duties paid on
entries of such wool fiber in each such calendar year in an
amount equal to one-third of the amount of duties paid by the
manufacturer on such wool fiber (without regard to micron
level) imported in calendar year 1999.
(d) Proper Identification and Appropriate Claim.--Any
person applying for a rebate under this section shall properly
identify and make appropriate claim for each entry involved.
SEC. 506. WOOL RESEARCH, DEVELOPMENT, AND PROMOTION TRUST FUND.
(a) Establishment.--There is hereby established within the
Treasury of the United States a trust fund to be known as the
Wool Research, Development, and Promotion Trust Fund
(hereinafter in this section referred to as the ``Trust
Fund''), consisting of such amounts as may be transferred to
the Trust Fund under subsection (b)(1)and any amounts as may be
credited to the Trust Fund under subsection (c)(2).
(b) Transfer of Amounts.--
(1) In general.--The Secretary of the Treasury
shall transfer to the Trust Fund out of the general
fund of the Treasury of the United States amounts
determined by the Secretary of the Treasury to be
equivalent to the amounts received into such general
fund that are attributable to the duty received on
articles under chapters 51 and 52 of the Harmonized
Tariff Schedule of the United States, subject to the
limitation in paragraph (2).
(2) Limitation.--The Secretary shall not transfer
more than $2,250,000 to the Trust Fund in any fiscal
year.
(3) Transfers based on estimates.--The amounts
required to be transferred under paragraph (1) shall be
transferred at least quarterly from the general fund of
the Treasury of the United States to the Trust Fund on
the basis of estimates made by the Secretary of the
Treasury of the amounts referred to in paragraph (1)
that are received into the Treasury. Proper adjustments
shall be made in the amounts subsequently transferred
to the extent prior estimates were in excess of, or
less than, the amounts required to be transferred.
(c) Investment of Trust Fund.--
(1) In general.--It shall be the duty of the
Secretary of the Treasury to invest such portion of the
Trust Fund as is not, in the Secretary's judgment,
required to meet current withdrawals. Such investments
may be made only in interest-bearing obligations of the
United States or in obligations guaranteed as to both
principal and interest by the United States. For such
purpose, such obligations may be acquired on original
issue at the issue price or by purchase of outstanding
obligations at the market price. Any obligation
acquired by the Trust Fund may be sold by the Secretary
of the Treasury at the market price.
(2) Interest and proceeds from sale or redemption
of obligations.--The interest on, and the proceeds from
the sale or redemption of, any obligations held in the
Trust Fund shall be credited to and form a part of the
Trust Fund.
(d) Availability of Amounts from Trust Fund.--From amounts
available in the Trust Fund (including any amounts not
obligated in previous fiscal years), the Secretary of
Agriculture is authorized to provide grants to a nationally-
recognized council established for the development of the
United States wool market for the following purposes:
(1) Assist United States wool producers to improve
the quality of wool produced in the United States,
including to improve wool production methods.
(2) Disseminate information on improvements
described in paragraph (1) to United States wool
producers generally.
(3) Assist United States wool producers in the
development and promotion of the wool market.
(e) Reports to Congress.--The Secretary of the Treasury, in
consultation with the Secretary of Agriculture, shall prepare
and submit to Congress an annual report on the financial
condition and the results of the operations of the Trust Fund,
including a description of the use of amounts of grants
provided under subsection (d), during the preceding fiscal year
and on its expected condition and operations during the next
fiscal year.
(f) Sunset Provision.--Effective January 1, 2004, the Trust
Fund shall be abolished and all amounts in the Trust Fund on
such date shall be transferred to the general fund of the
Treasury of the United States.
TITLE VI--REVENUE PROVISIONS
SEC. 601. APPLICATION OF DENIAL OF FOREIGN TAX CREDIT REGARDING TRADE
AND INVESTMENT WITH RESPECT TO CERTAIN FOREIGN
COUNTRIES.
(a) In General.--Section 901(j) of the Internal Revenue
Code of 1986 (relating to denial of foreign tax credit, etc.,
regarding trade and investment with respect to certain foreign
countries) is amended by adding at the end the following new
paragraph:
``(5) Waiver of denial.--
``(A) In general.--Paragraph (1) shall not
apply with respect to taxes paid or accrued to
a country if the President--
``(i) determines that a waiver of
the application of such paragraph is in
the national interest of the United
States and will expand trade and
investment opportunities for United
States companies in such country, and
``(ii) reports such waiver under
subparagraph (B).
``(B) Report.--Not less than 30 days before
the date on which a waiver is granted under
this paragraph, the President shall report to
Congress--
``(i) the intention to grant such
waiver, and
``(ii) the reason for the
determination under subparagraph
(A)(i).''.
(b) Effective Date.--The amendment made by this section
shall apply on or after February 1, 2001.
SEC. 602. ACCELERATION OF COVER OVER PAYMENTS TO PUERTO RICO AND VIRGIN
ISLANDS.
(a) Initial Payment.--Section 512(b) of the Ticket to Work
and Work Incentives Improvement Act of 1999 is amended--
(1) by striking ``October 1, 2000,'' in the matter
preceding paragraph (1) and inserting ``the first day
of the month within which the date of enactment of the
Trade and Development Act of 2000 occurs,'', and
(2) by striking paragraph (2) and inserting the
following new paragraph:
``(2) Second transfer of incremental increase in
cover over attributable to periods before resumption of
regular payments.--The Secretary of the Treasury shall
transfer on the first payment date after the date of
enactment of the Tradeand Development Act of 2000 an
amount equal to the excess of--
``(A) the amount of such increase otherwise
required to be covered over after June 30,
1999, and before the first day of the month
within which such date of enactment occurs,
over
``(B) the amount of the transfer described
in paragraph (1).''.
(b) Clarification of Disposition of Taxes to Virgin
Islands.--So much of paragraph (3) of section 7652(b) of the
Internal Revenue Code of 1986 (relating to Virgin Islands) as
precedes subparagraph (B) thereof is amended to read as
follows:
``(3) Disposition of internal revenue
collections.--The Secretary shall determine the amount
of all taxes imposed by, and collected under the
internal revenue laws of the United States on articles
produced in the Virgin Islands and transported to the
United States. The amount so determined less 1 percent
and less the estimated amount of refunds or credits
shall be subject to disposition as follows:
``(A) The payment of an estimated amount
shall be made to the government of the Virgin
Islands before the commencement of each fiscal
year as set forth in section 4(c)(2) of the Act
entitled `An Act to authorize appropriations
for certain insular areas of the United States,
and for other purposes', approved August 18,
1978 (48 U.S.C. 1645), as in effect on the date
of enactment of the Trade and Development Act
of 2000. The payment so made shall constitute a
separate fund in the treasury of the Virgin
Islands and may be expended as the legislature
may determine.''.
(c) Resolution of Statutory Conflict.--Section 7652 of the
Internal Revenue Code of 1986 (relating to shipments to the
United States) is amended by adding at the end the following
new subsection:
``(h) Manner of Cover Over of Tax Must Be Derived from This
Title.--No amount shall be covered into the treasury of Puerto
Rico or the Virgin Islands with respect to taxes for which
cover over is provided under this section unless made in the
manner specified in this section without regard to--
``(1) any provision of law which is not contained
in this title or in a revenue Act, and
``(2) whether such provision of law is a
subsequently enacted provision or directly or
indirectly seeks to waive the application of this
subsection.''.
(d) Effective Date.--The amendments made by this section
shall apply with respect to transfers or payments made after
the date of enactment of this Act.
And the Senate agree to the same.
That the House recede from its disagreement to the
amendment of the Senate to the title of the bill and agree to
the same.
From the Committee on International Relations,
for consideration of the House bill and the
Senate amendment, and modifications committed
to conference:
Benjamin A. Gilman,
Edward R. Royce,
Sam Gejdenson,
From the Committee on Ways and Means, for
consideration of the House bill and the Senate
amendment, and modifications committed to
conference:
Bill Archer,
Phil Crane,
Charles B. Rangel,
As additional conferees, for consideration of
the House bill and the Senate amendment, and
modifications committed to conference:
Amo Houghton,
Joe Hoeffel,
Managers on the Part of the House.
W.V. Roth, Jr.,
Chuck Grassley,
Trent Lott,
Daniel P. Moynihan,
Max Baucus,
Joe Biden,
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 amendments of the Senate to the bill (H.R. 434), to
authorize a new trade and investment policy for sub-Sahara
Africa, 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 to the text of the bill 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.
TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA
Subtitle A--Trade Policy for Sub-Saharan Africa
Sec. 101. Short Title
Present law
No provision.
House bill
Section 1 of the House bill states that this Act may be
cited as the ``African Growth and Opportunity Act.''
Senate amendment
Section 101 of the Senate amendment states that this
title may be cited as the ``African Growth and Opportunity
Act.''
Conference agreement
The conference agreement provides that title I of the
bill may be referred to as the African Growth and Opportunity
Act.
sec. 102. findings
Present law
No provision.
House bill
In section 2 of the House bill, Congress finds that it is
in the mutual economic interest of the United States and
countries of sub-Saharan Africa to promote stable and
sustainable economic growth and development in sub-Saharan
Africa and that sustained economic growth in sub-Saharan Africa
depends in large measure upon the development of a receptive
environment for trade and investment. To that end, the United
States seeks to facilitate market-led economic growth in, and
thereby the social and economic development of, countries in
sub-Saharan Africa. In particular, the United States seeks to
assist sub-Saharan African countries, and the private sector in
those countries, to achieve economic self-reliance by:
(1) strengthening and expanding the private sector
in sub-Saharan Africa, especially women owned
businesses;
(2) encouraging increased trade and investment
between the U.S. and sub-Saharan Africa;
(3) reducing tariff and nontariff barriers and
other trade obstacles;
(4) expanding U.S. assistance to sub-Saharan
Africa's regional integration efforts;
(5) negotiating free trade areas;
(6) establishing a United States-Sub-Saharan Africa
Trade and Investment Partnership;
(7) focusing on countries committed to accountable
government, economic reform, and the eradication of
poverty;
(8) establishing a United States-Sub Saharan Africa
Economic Cooperation Forum; and
(9) continuing to support development assistance
for countries in sub-Saharan Africa attempting to build
civil societies.
Senate amendment
In section 102 of the Senate amendment, Congress finds
that:
(1) it is in the mutual interest of the United
States and the countries of sub-Saharan Africa to
promote stable and sustainable economic growth and
development in sub-Saharan Africa;
(2) the 48 countries of sub-Saharan Africa form a
region richly endowed with both natural and human
resources;
(3) sub-Saharan Africa represents a region of
enormous economic potential and of enduring political
significance to the United States;
(4) the region has experienced a rise in both
economic development and political freedom as countries
in sub-Saharan Africa have taken steps toward
liberalizing their economies and encouraged broader
participation in the political process;
(5) the countries of sub-Saharan Africa have made
progress toward regional economic integration that can
have positive benefits for the region;
(6) despite those gains, the per capita income in
sub-Saharan Africa averages less than $500 annually;
(7) U.S. foreign direct investment in the region
has fallen in recent years and the sub-Saharan African
region receives only minor inflows of direct investment
from around the world;
(8) trade between the United States and sub-Saharan
Africa remains, apart from the import of oil, an
insignificant part of total U.S. trade;
(9) trade and investment, as the American
experience has shown, can represent powerful tools both
for economic development and for building a stable
politicalenvironment in which political freedom can
flourish;
(10) increased trade and investment flows have the
greatest impact in an economic environment in which
trading partners eliminate barriers to trade and
capital flows and encourage the development of a
vibrant private sector that offers individual African
citizens the freedom to expand their economic
opportunities and provide for their families;
(11) offering the countries of sub-Saharan Africa
enhanced trade preferences will encourage both higher
levels of trade and direct investment in support of the
positive economic and political developments under way
throughout the region; and
(12) encouraging the reciprocal reduction of trade
and investment barriers in Africa will enhance the
benefits of trade and investment for the region as well
as enhance commercial and political ties between the
United States and sub-Saharan Africa.
Conference agreement
The House recedes to the Senate except to delete certain
findings related to the decline in foreign direct investment in
sub-Saharan Africa and the low levels of U.S. trade with sub-
Saharan Africa. In addition, the conference agreement clarifies
the findings related to the political and economic development.
Sec. 103. Statement of Policy
Present law
No provision.
House bill
In section 3 of the House bill, Congress supports
economic self-reliance for sub-Saharan African countries,
particularly those committed to economic and political reform;
market incentives and private sector growth; the eradication of
poverty; and the importance of women to economic growth and
development.
Senate amendment
Section 103 of the Senate amendment states the support of
the Congress for:
(1) encouraging increased trade and investment
between the United States and sub-Saharan Africa;
(2) reducing tariff and nontariff barriers and
other obstacles to sub-Saharan African and U.S. trade;
(3) expanding U.S. assistance to sub-Saharan
Africa's regional integration efforts;
(4) negotiating reciprocal and mutually beneficial
trade agreements, including the possibility of
establishing free trade areas that serve the interests
of both the United States and countries in sub-Saharan
Africa;
(5) focusing on countries committed to accountable
government, economic reform, and the eradication of
poverty;
(6) strengthening and expanding the private sector
in sub-Saharan Africa;
(7) supporting the development of civil societies
and political freedom in sub-Saharan Africa; and
(8) establishing a United States-Sub-Saharan
African Economic Cooperation Forum.
In section 717 of the Senate amendment, Congress makes
the following:
(1) Corruption and bribery of public officials is a
major problem in many African countries and represents
a serious threat to the development of a functioning
domestic private sector, to United States business and
trade interests, and to prospects for democracy and
good governance in African countries.
(2) Of the 17 countries in sub-Saharan Africa rated
by the international watchdog group, Transparency
International, as part of the 1998 Corruption
Perception Index, 13 ranked in the bottom half.
(3) The Organization for Economic Cooperation and
Development (OECD) Convention on Combating Bribery of
Foreign Public Officials in International Business
Transactions, which has been signed by all 29 members
of the OECD plus Argentina, Brazil, Bulgaria, Chile,
and the Slovak Republic and which entered into force on
February 15, 1999, represents a significant step in the
elimination of bribery and corruption in international
commerce.
(4) As a party to the OECD Convention on Combating
Bribery of Foreign Public Officials in International
Business Transactions, the United States should
encourage the highest standards possible with respect
to bribery and corruption.
Section 717 of the Senate amendment expresses the sense
of Congress that the United States should encourage at every
opportunity the accession of sub-Saharan African countries, as
defined in section 104, to the OECD Convention on Combating
Bribery of Foreign Public Officials in International Business
Transactions.
Conference agreement
The House recedes to the Senate with the addition of
language from the House bill related to the importance of small
businesses and women owned enterprises in strengthening and
expanding the private sector in sub-Saharan Africa. In
addition, the conference agreement includes a new policy
statement, based on section 717 of the Senate bill, expressing
Congressional support for the accession of countries in sub-
Saharan Africa to the Convention on Combating Bribery of
Foreign Public Officials in InternationalBusiness Transactions
of the Organization for Economic Cooperation and Development.
Sec. 104. Eligibility Requirements
Present law
Title V of the Trade Act of 1974 grants authority to the
President under the Generalized System of Preferences (GSP)
program to provide duty-free treatment on imports of eligible
articles from beneficiary developing countries (BDC), which
meet specific eligibility criteria.
House bill
Section 4 of the House bill states that a sub-Saharan
African country shall be eligible to participate in programs,
projects, or activities, or receive assistance or other
benefits under this Act if the President determines that the
country does not engage in gross violations of internationally
recognized human rights and has established, or is making
continual progress toward establishing, a market economy, such
as the establishment and enforcement of appropriate policies
relating to:
(1) promoting free movement of goods and services
between the United States and sub-Saharan Africa and
among countries in sub-Saharan Africa;
(2) promoting the expansion of the production base
and the transformation of commodities and
nontraditional products for export through joint
venture projects between African and foreign investors;
(3) trade issues, such as the protection of
intellectual property rights, improvements in
standards, testing, labeling and certification, and
government procurement;
(4) the protection of property rights, such as
protection against expropriation and a functioning and
fair judicial system;
(5) the protection of internationally recognized
worker rights, including the right of association, the
right to organize and bargain collectively, a
prohibition on the use of any form of forced or
compulsory labor, a minimum age for the employment of
children, and acceptable conditions of work with
respect to minimum wages, hours of work, and
occupational safety and health;
(6) appropriate fiscal systems, such as reducing
high import and corporate taxes, controlling government
consumption, participation in bilateral investment
treaties, and the harmonization of such treaties to
avoid double taxation;
(7) foreign investment issues, such as the
provision of national treatment for foreign investors,
removing restrictions on investment, and other measures
to create an environment conducive to domestic and
foreign investment;
(8) supporting the growth of regional markets
within a free trade area framework;
(9) governance issues, such as eliminating
government corruption, minimizing government
intervention in the market such as price controls and
subsidies, and streamlining the business license
process;
(10) supporting the growth of the private sector,
in particular by promoting the emergence of a new
generation of African entrepreneurs;
(11) encouraging the private ownership of
government-controlled economic enterprises through
divestiture programs; and
(12) observing the rule of law, including equal
protection under the law and the right to due process
and a fair trial.
In determining whether a sub-Saharan African country is
eligible under this section, the President shall take into
account the following factors:
(1) an expression by a country of its desire to be
an eligible country;
(2) the extent to which a country has made
substantial progress toward reducing tariff levels,
binding its tariffs in the World Trade Organization
(WTO) and assuming meaningful binding obligations in
other sectors of trade, and eliminating nontariff
barriers to trade;
(3) whether such country, if not already a member
of the WTO, is actively pursuing membership in that
organization;
(4) the extent to which such country has a
recognizable commitment to reducing poverty, increasing
the availability of health care and educational
opportunities, the expansion of physical infrastructure
in a manner designed to maximize accessibility,
increased access to market and credit facilities for
small farmers and producers, and improved economic
opportunities for women as entrepreneurs and employees,
and promoting and enabling the formation of capital to
support the establishment and operation of micro-
enterprises; and
(5) whether or not such country engages in
activities that undermine U.S. national security or
foreign policy interests.
The President shall monitor and review the progress of
sub-Saharan African countries in order to determine their
current or potential eligibility to participate in this Act.
Such determinations shall be based on quantitative factors to
the fullest extent possible and shall be included in the annual
report requested by section 15 of this Act.
A sub-Saharan African country that has not made continual
progress in meeting the requirements with which it is not in
compliance shall be ineligible to participate in programs,
projects, or activities, or receive assistance or other
benefits, under this Act.
Senate amendment
Section 111 of the Senate amendment amends title V of the
Trade Act of 1974 by inserting after section 506 a new section
506A on the ``Designation of sub-Saharan African countries for
certain benefits.''
Notwithstanding any other provision of law, the President
is authorized to designate a sub-Saharan African country
eligible for the enhanced GSP benefits, if the President
determines that the country:
(A) has established, or is making continual
progress toward establishing:
(i) a market-based economy, where private
property rights are protected and the
principles of an open, rules-based trading
system are observed;
(ii) a democratic society, where the rule
of law, political freedom, participatory
democracy, and the right to due process and a
fair trial are observed;
(iii) an open trading system through the
elimination of barriers to United States trade
and investment and the resolution of bilateral
trade and investment disputes;
(iv) economic policies to reduce poverty,
increase the availability of health care and
educational opportunities, expand physical
infrastructure, and promote the establishment
of private enterprise; and
(v) a system to combat corruption and
bribery, such as signing the Convention on
Combating Bribery of Foreign Public Officials
in International Business Transactions;
(B) does not engage in gross violations of
internationally recognized human rights or provide
support for acts of international terrorism and
cooperates in international efforts to eliminate human
rights violations and terrorist activities; and
(C) subject to the authority granted to the
President under the GSP program, otherwise satisfies
the GSP eligibility criteria.
The President shall monitor and review the progress of
each sub-Saharan African country in meeting these eligibility
requirements described in paragraph 1 in order to determine the
current or potential eligibility of each country to be
designated as a beneficiary sub-Saharan African country. The
President shall include the reasons for the determinations in
the annual report required by section 115 of this title.
If the President determines that a beneficiary sub-
Saharan African country is not making continual progress in
meeting the eligibility requirements, the President shall
terminate the designation of that country as a beneficiary sub-
Saharan African country for purposes of this section, effective
January 1 of the year following the year in which such
determination is made.
Conference agreement
The conference agreement authorizes the President to
designate a sub-Saharan African country that meets the
eligibility criteria as eligible for the economic development
related provisions in subtitle C. The eligibility criteria as
in effect on the date of enactment apply to the trade benefits
through an amendment to the Trade Act of 1974 included in
subtitle B.
The eligibility criteria as contained in the conference
report reflect the Senate provisions, with the addition of
criteria from the House bill on the protection of
internationally recognized worker rights and the prohibition on
the designation of countries as eligible under this Act that
engage in activities that undermine U.S. national security or
foreign policy interests. In addition, the conference agreement
incorporates elements from the House bill on the provision of
national treatment and measures to create an environment
conducive to domestic and foreign investment; minimizing
government interference in the economy through price controls,
subsidies, and government ownership of economic assets; the
protection of intellectual property; and the importance of
micro-credit to the formation of capital markets.
The section also stipulates that the President shall
terminate the eligibility for preferential treatment under this
Act for any sub-Saharan African country that is making
continual progress in meeting the eligibility requirements.
The eligibility criteria are designed to identify sub-
Saharan countries that are creating a climate conducive to
greater levels of trade and investment, and with which the U.S.
can build a growing economic partnership. While this section is
designed to afford flexibility in this identification, and
while the conferees have no target number of participants, it
is clear that several sub-Saharan African countries
unfortunately have in place policies that would not qualify
them from accessing the benefits of the bill. These are sub-
Saharan African countries that discourage trade and investment.
The conferees note that the eligibility criteria are similar to
those USAID uses to allocate development assistance among
African countries.
The conferees urge the President to make determinations
regarding country eligibility as soon as practicable.
sec. 105. united states-sub-saharan africa trade and economic
cooperation forum
Present law
No provision.
House bill
Section 5 of the House bill requires the President to
convene annual high-level meetings between appropriate
officials of the U.S. government and the governments of sub-
Saharan African countries in order to foster closer economic
ties. Not later than 12 months after enactment, the section
requires the President, after consulting with Congress and the
governments concerned, shall establish a United States-Sub-
Saharan Africa Trade and Economic Cooperation Forum.
In creating the Forum, the President shall:
(1) direct the Secretaries of Commerce, the
Treasury, State, and the United States Trade
Representative (USTR) to host the first annual meeting
with their counterparts from eligible sub-Saharan
African countries, the Secretary General of the
Organization of African Unity, and government officials
from other appropriate countries in Africa to discuss
expanding trade and investment relations between the
United States and sub-Saharan Africa and the
implementation of this Act;
(2) in consultation with Congress, encourage U.S.
non-governmental organizations (NGOs) and
representatives of the private sector to host annual
meetings with their respective counterparts from sub-
Saharan Africa in conjunction with the annual meetings
of the Forum; and
(3) to the extent practicable, meet with the heads
of government of eligible sub-Saharan African countries
no less than once every 2 years. The first meeting
should take place not later than 12 months after
enactment.
In order to assist in carrying out the purposes of the
Forum, the United States Information Agency shall disseminate
regularly, through multiple media, economic information in
support of the free market economic reforms described in this
Act.
The provision authorizes such sums as may be necessary to
carry out this section. None of the funds authorized under this
section may be used to create or support any NGO for the
purpose of expanding or facilitating trade between the United
States and sub-Saharan Africa.
Senate amendment
Section 113 of the Senate amendment requires the
President to convene annual meetings between senior officials
of the U.S. Government and officials of the governments of sub-
Saharan African countries in order to foster close economic
ties between the United States and sub-Saharan Africa. Not
later than 12 months after the date of enactment, the
President, after consulting with the officials of interested
sub-Saharan African governments, shall establish a United
States-Sub-Saharan African Trade and Economic Cooperation
Forum.
In creating the Forum, the President shall:
(1) direct the Secretaries of Commerce, the
Treasury, State, and the USTR to invite their
counterparts from interested sub-Saharan African
governments and representatives of appropriate regional
organizations to participate in the first annual
meeting to discuss expanding trade and investment
relations between the United States and sub-Saharan
Africa;
(2) in consultation with Congress, invite U.S. NGOs
and private sector representatives to host meetings
with their respective counterparts from sub-Saharan
Africa in conjunction with meetings of the Forum to
discuss expanding trade and investment relations
between the United States and sub-Saharan Africa;
(3) as soon as practicable after enactment, meet
with the heads of the governments of interested sub-
Saharan African countries for the purpose of discussing
the issues described in paragraph 1.
In selecting issues of common interest to the United
States-Sub-Saharan African Trade and Economic Cooperation
Forum, section 706 of the Senate amendment requires the
President to instruct the U.S. delegates to the Forum to
promote a review by the Forum of the HIV/AIDS epidemic in each
sub-Saharan African country and the effect of the HIV/AIDS
epidemic on human and social development in each country.
Conference agreement
In order to expand U.S. trade and investment relations
with sub-Saharan Africa and achieve the goals of the Act, the
conferees believe that it is important to foster a regular
dialogue between U.S. government officials and their
counterparts from sub-Saharan African countries. Therefore, the
legislation establishes a yearly forum at the Ministerial level
to facilitate these discussions. The conferees also believe
that it would help to promote the goals of this Act if the
President, to the extent practicable, met with the heads of
state of sub-Saharan African governments not less than once
every two years.
With respect to the countries eligible to participate in
the Forum and the heads of state meeting to discuss expanding
trade and investment relations between the United States and
sub-Saharan Africa and the implementation of this title, the
Senate recedes to the House with a modification to permit
participation by countries that the President determines are
taking substantial positive steps towards meeting the
eligibility requirements set forth in section 104 of the Act
(as well as countries that are found eligible under section
104). The conferees expect the Administration to interpret this
provision narrowly to allow as Forum participants only those
countries that are undertaking substantial, positive reforms,
although they may not satisfy all of the eligibility
requirements. In addition, the conference agreement directs the
Administration to invite to the Forum appropriate
representatives of sub-Saharan African regional organizations,
and government officials from other appropriate countries in
sub-Saharan Africa.
In addition, the conference agreement requires the
President to encourage NGOs and representatives of the private
sector to host annual meetings with their respective
counterparts from sub-Saharan Africa in conjunction with the
annual meetings of the Forum. The conferees observe that there
is no precedent of using taxpayer funds to facilitate such
meetings in conjunction with other multilateral fora and do not
intend that taxpayer funds should be used in this instance.
The conference agreement updates the reference to the
United States Information Agency from the House bill to the
United States Information Service.
The conference agreement also includes the language from
section 706 of the Senate amendment requiring the President to
direct the U.S. delegates at the Forum to promote a review by
the Forum on the HIV/AIDS epidemic in sub-Saharan Africa and
the effect of the HIV/AIDS epidemic on the economic development
of each country in sub-Saharan Africa.
Sec. 106. Reporting Requirement
Present law
Section 134(b) of the Uruguay Round Agreements Act
requires the President to submit five annual reports to
Congress on his ``Comprehensive Trade and Development Policy
for Countries in Africa.'' The President's fifth and final
report was submitted in January 2000.
House bill
Section 15 of the House bill requires the President to
submit to Congress, not later than 1 year after enactment and
for 6 years thereafter, a comprehensive report on the trade and
investment policy of the United States for sub-Saharan Africa,
and on the implementation of this Act. The last report required
by section 134(b) of the Uruguay Round Agreements Act shall be
consolidated and submitted with the first report required by
this section.
Senate amendment
Section 115 of the Senate amendment requires the
President to submit a report to Congress on the implementation
of this title not later than 1 year after the date of enactment
of this Act, and annually thereafter for 4 years.
Conference agreement
The conference agreement reflects House language
requiring annual Presidential reports for 8 years on the trade
and investment policy of the United States toward sub-Saharan
Africa and on the implementation of this title, but strikes the
language on the consolidation of the final report required by
the Uruguay Round Agreements Act. This report was submitted to
Congress in January 2000.
Sec. 107. Sub-Saharan Africa Defined
Present law
No provision.
House bill
Section 16 of the House bill defines the terms ``sub-
Saharan Africa'', ``sub-Saharan African country'', ``country in
sub-Saharan Africa'', and ``countries in sub-Saharan Africa''
for the purposes of this Act as referring to the following or
any successor political entities:
Republic of Angola (Angola), Republic of Botswana
(Botswana), Republic of Burundi (Burundi), Republic of Cape
Verde (Cape Verde), Republic of Chad (Chad), Democratic
Republic of Congo, Republic of the Congo (Congo), Republic of
Djibouti (Djibouti), State of Eritrea (Eritrea), Gabonese
Republic (Gabon), Republic of Ghana (Ghana), Republic of
Guinea-Bissau (Guinea-Bissau), Kingdom of Lesotho (Lesotho),
Republic of Madagascar (Madagascar), Republic of Mali (Mali),
Republic of Mauritius (Mauritius), Republic of Namibia
(Namibia), Federal Republic of Nigeria (Nigeria), Democratic
Republic of Sao Tome and Principe (Sao Tome and Principe),
Republic of Sierra Leone (Sierra Leone), Somalia, Kingdom of
Swaziland (Swaziland), Republic of Togo (Togo), Republic of
Zimbabwe (Zimbabwe), Republic of Benin (Benin), Burkina Faso
(Burkina), Republic of Cameroon (Cameroon), Central African
Republic, Federal Islamic Republic of the Comoros (Comoros),
Republic of Cote d'Ivoire (Cote d'Ivoire), Republic of
Equatorial Guinea (Equatorial Guinea), Ethiopia, Republic of
the Gambia (Gambia), Republic of Guinea (Guinea), Republic of
Kenya (Kenya), Republic of Liberia (Liberia), Republic of
Malawi (Malawi), Islamic Republic of Mauritania (Mauritania),
Republic of Mozambique (Mozambique), Republic of Niger (Niger),
Republic of Rwanda (Rwanda), Republic of Senegal (Senegal),
Republic of Seychelles (Seychelles), Republic of South Africa
(South Africa), Republic of Sudan (Sudan), United Republic of
Tanzania (Tanzania), Republic of Uganda (Uganda), Republic of
Zambia (Zambia).
Senate amendment
Section 104 of the Senate amendment is identical to the
House bill provision except for the exclusion of the language
applying the definition to any successor political entities.
Conference agreement
The conference agreement includes the language from the
House bill permitting the designation of successor political
entities of the countries listed for benefits under this title.
In addition, the conference agreement arranges the list of
countries in alphabetical order.
Subtitle B--Trade Provisions
Sec. 111. Eligibility for Certain Benefits
Present law
Title V of the Trade Act of 1974, as amended, grants
authority to the President to provide duty-free treatment on
imports of eligible articles from beneficiary developing
countries (BDC). Under section 503(a)(1), the President may not
designate any article as GSP eligible within the following
categories:
(1) textiles and apparel articles which were not
eligible articles for purposes of this title on January
1, 1994;
(2) watches, except watches entered after June 30,
1989 that the President determines will not cause
material injury to watch or watch band, strap, or
bracelet manufacturing and assembly operations in the
United States or U.S. insular possessions;
(3) import-sensitive electronic articles;
(4) import-sensitive steel articles;
(5) footwear, handbags, luggage, flat goods, work
gloves, and leather wearing apparel which were not GSP
eligible articles on January 1, 1995;
(6) import-sensitive semimanufactured and
manufactured glass products; and,
(7) any other articles the President determines to
be import-sensitive in the context of GSP.
Under section 502(a)(2), the President is authorized to
designate any article that is the growth, product, or
manufacture of a least developed developing country (LDDC) as
an eligible article with respect to imports from LDDCs, if the
President determines such article is not import-sensitive in
the context of imports from LDDCs. This authority does not
apply to statutorily exempt articles listed under paragraphs
(1), (2), and (5) above.
Under section 503(b)(3), no quantity of an agricultural
product subject to a tariff-rate quota that exceeds the in-
quota quantity is eligible for duty-free treatment.
Under section 503(c)(2)(D), whenever the President
determines that exports by any BDC to the United States of a
GSP eligible article (1) exceed a dollar limit of $75 million a
year (a number which was set in 1996 and is indexed to increase
by $5 million annually), or (2) equal or exceed a 50 percent
share of the total value of U.S. imports of the article, then,
not later than July 1 of the next year, such country is not
treated as a BDC with respect to such article.
Under section 503(c)(2)(A), GSP duty-free treatment
applies to any eligible article which is the growth, product or
manufacture of a BDC if: (1) that article is imported directly
from a BDC into the U.S. customs territory; and, (2) the sum of
(a) the cost or value of the materials produced in the BDC or
member countries in an association which is treated as one BDC,
plus (b) the direct costs of processing operations performed in
such BDC or member countries is not less than 35 percent of the
value of the article.
Under section 505, no duty-free treatment shall remain in
effect after September 30, 2001.
House bill
In order to receive extended and enhanced GSP benefits
under the House bill, sub-Saharan African countries must meet
all of the criteria in current law regarding designation of
beneficiary developing countries and also the eligibility
requirements set forth in section 4 of H.R. 434. The existing
statutory GSP designation criteria include internationally
recognized worker rights, intellectual property rights,
compensation for property expropriation, and market access.
Section 8(a) of the House bill amends section 503(a)(1) of the
Trade Act of 1974 to authorize the President to grant duty-free
GSP treatment for products from eligible African GSP
beneficiary countries that are currently excluded from the GSP
program, if, after receiving advice from the International
Trade Commission, he determines that imports of these products
are not import sensitive in the context of imports from sub-
Saharan African countries. Opportunities for public comment
would be provided in making this determination.
The House bill does not change the rule of origin
requirements under current law for GSP duty-free treatment on
any currently eligible or any additional products, including
textiles and apparel.
With respect to the second required test of value
content, section 8(b) of the House bill amends section
503(a)(2) of the Trade Act of 1974 to allow up to 15 percent of
the total value of the article from U.S.-made materials to
count toward the 35 percent local value requirement for duty-
free entry under the GSP program. In order to encourage
regional economic integration in Africa, the bill provides that
the minimum 35 percentlocal value content may be cumulated in
any eligible sub-Saharan African country.
Section 8(c) amends section 503(c)(2)(D) of the Trade Act
of 1974 to stipulate that the competitive need limits do not
apply to imports from eligible countries in sub-Saharan Africa.
Section 8(d) amends section 505 of the Trade Act of 1974
to extend the GSP program until June 30, 2009, for eligible
countries in sub-Saharan Africa.
Section 8(f) establishes July 1, 1999 as the effective
date for the amendments made to the GSP program for sub-Saharan
Africa.
Senate amendment
Section 111 of the Senate amendment creates a new section
506A in the Trade Act of 1974, authorizing the President to
provide duty-free treatment for imports from beneficiary sub-
Saharan African countries of any item, other than textiles or
apparel products or textile luggage, that is designated as
import sensitive under section 503(b)(1) of title V of the
Trade Act of 1974. A beneficiary sub-Saharan African country is
defined as those that meet the eligibility criteria under GSP
and the criteria added under the new section 506A of the Trade
Act of 1974. The general rules of origin governing duty-free
entry under the GSP program would continue to apply, except
that, in determining whether products are eligible for the
enhanced benefits of the bill, up to 15 percent of the
appraised value of the article at the time of importation may
be derived from materials produced in the United States. In
addition, under the new section 506A, the value of materials
produced in any beneficiary sub-Saharan African country may be
applied in determining whether the product meets the applicable
rules of origin for purposes of determining the eligibility of
an article to receive the duty-free treatment provided by this
section. Section 111 also amends section 503(c)(2)(D) to waive
permanently the competitive need limits that would otherwise
apply to beneficiary sub-Saharan African countries.
The new section 506A established by section 111 of the
Senate amendment also requires the President to monitor, and
report annually to Congress, on the progress the sub-Saharan
African countries have made in meeting the three categories of
eligibility criteria set forth. The new section 506A requires
the President to terminate the designation of a country as a
beneficiary sub-Saharan African country if that country is not
making continual progress in meeting the eligibility
requirements. Any such termination would be effective on
January 1 of the year following the year in which the
determination is made that the eligibility criteria are no
longer met.
Section 111 of the Senate amendment sets as a termination
date for the duty-free treatment provided by this title as
September 30, 2006. It further includes a clerical amendment to
the table of contents in title V of the Trade Act of 1974 and
sets the effective date for this title as October 1, 1999.
Conference agreement
The House recedes to the Senate on the creation of a new
section 506A in the Trade Act of 1974 for the ``Designation of
Sub-Saharan African Countries for Certain Benefits.'' The
provision incorporates the eligibility requirements in section
107 as in effect on the date of enactment, as well as the
eligibility requirements in the GSP program, for countries to
receive the enhanced trade benefits under subtitle B.
Sec. 112. Treatment of Certain Textiles and Apparel
Present law
At present, textile and apparel articles are ineligible
for duty-free treatment under the GSP program. Normal trade
relations tariff rates apply to imports of textile and apparel
articles into the United States from sub-Saharan Africa.
Currently, only two countries in sub-Saharan Africa, Kenya and
Mauritius, are subject to quantitative restrictions on the
levels of textile and apparel articles that they can export to
the United States.
House bill
Section 4 of the House bill provides duty-free treatment
under the GSP program to textile and apparel articles from
eligible sub-Saharan African countries. Textile and apparel
products eligible for duty-free and quota-free treatment must
be substantially transformed in sub-Saharan Africa as
determined by the ``Breaux-Cardin'' rules of origin enacted
into law in 1994 (section 334 of P.L. 103-465). The rule of
origin remains that articles must be the growth, product, or
manufacture of an eligible country and also contain a minimum
35 percent local value. As under present law, processes such as
simple combining, packaging, or dilution would not constitute
substantial transformation to qualify an article for trade
benefits under this program. The article must also be directly
imported from a beneficiary country.
Section 7(b) of the House bill expresses the sense of
Congress that:
(1) It would be to the mutual benefit of the
countries in sub-Saharan Africa and the United States
to ensure that the commitments of the World Trade
Organization are faithfully implemented in each of the
member countries;
(2) Reform of trade policies in sub-Saharan Africa
with the objective of removing structural impediments
to trade can assist the countries of the region in
achieving greater diversification of textile and
apparel export commodities and products and export
markets; and
(3) The President should support textile and
apparel trade reform in sub-Saharan Africa by providing
technical assistance and encouraging business-to-
business contacts with the region.
Section 7(c)(1) provides that, pursuant to the WTO
Agreement on Textiles and Clothing, the United States shall
eliminate the existing quotas on textile and apparel exports to
the United States from Kenya and Mauritius within 30 days after
these countries adopt an efficient visa system to guard against
unlawful transshipment of textile and apparel goods and the use
of counterfeit documents. The provision requires the Customs
Service to provide technical assistance to Kenya and Mauritius
in the development and implementation of visa systems.
Section 7(c)(2) requires the President to continue the
existing no quota policy for other countries in sub-Saharan
Africa.
Section 7(d)(1) states that the President should ensure
that any sub-Saharan African country that intends to export
textile and apparel goods to the United States: (1) has in
place an effective visa system to guard against unlawful
transshipment of textile and apparel goods and the use of
counterfeit documents; and (2) will cooperate fully with the
United States to address and take action necessary to prevent
circumvention, as provided in Article 5 of the WTO Agreement on
Textiles and Clothing.
Senate amendment
Section 112 of the Senate amendment provides beneficiary
sub-Saharan African countries (as designated under the new
section 506A of the Trade Act of 1974 created by the Senate
amendment) with duty-free and quota-free access to the U.S.
market for certain textiles and apparel products. In order to
receive these benefits, a beneficiary sub-Saharan African
country must (1) adopt an effective and efficient visa system
to guard against unlawful transshipment of textile and apparel
products and the use of counterfeit documents; and (2) enact
legislation or regulations that would permit the U.S. Customs
Service to investigate thoroughly allegations of transshipment
through such country. Section 112 directs the U.S. Customs
Service to provide technical assistance to the beneficiary sub-
Saharan African countries in complying with these two
requirements.
The benefits under section 112 of the Senate amendment
are available only for the following textile and apparel
products:
(1) Apparel articles assembled in beneficiary sub-
Saharan African countries from fabrics wholly formed
and cut in the United States, from yarns wholly formed
in the United States;
(2) Apparel articles cut and assembled in
beneficiary sub-Saharan African countries from fabric
wholly formed in the United States from yarns wholly
formed in the United States, and assembled with thread
formed in the United States; and
(3) Handloomed, handmade and folklore articles,
that have been certified as such by the competent
authority in the beneficiary sub-Saharan African
country.
The Senate intends that this new program of textile and
apparel benefits will be administered in a manner consistent
with the regulations that apply under the ``Special Access
Program'' for textile and apparel articles from Caribbean and
Andean Trade Preference Act countries, as described in 63 Fed.
Reg. 16474-16476 (April 3, 1998). Thus, the requirement that
products must be assembled from fabric formed in the United
States applies to all textile components of the assembled
products, including linings and pocketing, subject to the
exceptions that currently apply under the ``Special Access
Program.''
Section 112 also includes a safeguard measure,
authorizing the President to impose appropriate remedies,
including restrictions on or the removal of quota-free and
duty-free treatment, in the event that imports of textile and
apparel articles from a beneficiary sub-Saharan African country
are being imported in such increased quantities as to cause
serious damage, or actual threat of such damage, under the WTO
Agreement on Textile and Clothing.
Conference agreement
The conference agreement provides preferential treatment
to certain apparel articles imported from beneficiary sub-
Saharan countries meeting the transhipment requirements set
forth in section 113.
Duty-free and quota-free treatment is provided for the
following apparel articles:
(1) apparel articles assembled in one or more
beneficiary sub-Saharan African countries from fabrics
wholly formed and cut in the United States, from yarns
wholly formed in the United States;
(2) apparel articles cut and assembled or knit-to-
shape in one or more beneficiary sub-Saharan African
countries from fabrics or yarns wholly formed and cut
in the United States, from yarns wholly formed in the
United States and assembled with thread formed in the
United States;
(3) knit-to-shape sweaters made from cashmere and
fine merino wool;
(4) apparel articles wholly assembled in one or
more beneficiary sub-Saharan countries from fabrics not
available in commercial quantities in the United States
(e.g., those fabrics and yarns identified in Annex 401
of the NAFTA, which include fine count cotton knitted
fabrics for certain apparel, linen, silk, cotton
velveteen, fine wale corduroy, Harris Tweed, certain
woven fabrics made with animal hairs, certain
lightweight, high thread count poly-cotton woven
fabrics, and certain lightweight, high thread count
broadwoven fabrics used in the production of men's and
boy's shirts); and
(5) certified handloomed, handmade and folklore
articles.
Certain other apparel articles would be free of duties
and of quantitative restrictions up to a specified level of
imports. The cap on preferential treatment is 1.5% of total
U.S. apparel imports (in square meter equivalents) for the
first year of the bill, growing in equal increments in each of
the seven succeeding one-year periods, to a maximum of 3.5% of
U.S. apparel imports in the last year of the bill. The
following apparel articles are eligible for preferential
treatment under this cap:
(1) for the first four years of the bill, apparel
articles wholly assembled in one or more lesser
developed beneficiary sub-Saharan African countries
(defined as beneficiary sub-Saharan African countries
with a 1998 per capita GNP of less than $1,500),
without regard to the origin of the fabric; and
(2) apparel articles wholly assembled in one or
more beneficiary sub-Saharan African countries from
fabric wholly formed in one or more beneficiary
countries from yarn originating either in the United
States or in one or more beneficiary sub-Saharan
African countries (the country of origin of the yarn is
to be determined by the rules of origin set forth in
section 334 of the Uruguay Round Agreements Act).
The conferees intend that the Secretary of Commerce shall
determine and publish in the Federal Register in a timely
manner on an annual basis the level of apparel imports (in
square meter equivalents) eligible for duty-free treatment
under the cap described above for each one year period. The
conferees recognize that special program indicators will be
necessary to identify apparel articles qualifying for duty-free
treatment under the cap. In addition, in order to evaluate the
trade liberalizing benefits provided under section 112 of the
bill, the conferees encourage special program indicators to be
created for all apparel articles covered by the bill.
The bill also provides that import relief in the form of
a tariff snapback shall be provided if the Secretary determines
that an article qualifying for duty-free treatment under the
cap from a single beneficiary sub-Saharan African country is
being imported in such increased quantities and under such
conditions as to cause ``serious damage, or threat thereof'' to
the domestic industry producing the like or directly
competitive article. The conference agreement directs the
Secretary of Commerce to conduct inquiries under this section.
Under authority delegated by Executive Order 11651, the
Committee for the Implementation of Textile Agreements
currently supervises the implementation of U.S. bilateral
textile and apparel agreements, including making determinations
of market disruption due to textile and apparel imports.
Under the bill, the Secretary of Commerce will initiate
an inquiry to determine whether import relief is warranted if
there has been a surge in imports under the cap from a single
beneficiary sub-Saharan African country based on import data.
The Secretary of Commerce shall initiate an inquiry upon
written request by an interested party, when such request is
supported by sufficient evidence. The conferees intend the
inquiry into whether import relief is warranted to be open and
transparent. Key elements for ensuring an open and transparent
process include notice of initiation, opportunity for a hearing
open to interested parties (if requested), opportunity for
written submissions and responses, and a written, published
determination setting forth the reasoning that justifies the
determination. The conferees intend the Secretary of Commerce
to consider all relevant information received from interested
parties. Furthermore, the conferees intend that when the
Secretary of Commerce relies on information that is not
publicly available, that information should be, to the extent
practicable, corroborated with reasonably available
information.
For purposes of this section, the term ``interested
party'' means any producer of a like or directly competitive
article, a certified union or recognized union or group of
workers which is representative of an industry engaged in the
manufacture, production or sale in the United States of a like
or directly competitive article, a trade or business
association representing producers or sellers of like or
directly competitive articles, producers engaged in the
production of essential inputs for like or directly competitive
articles, a certified union or group of workers which is
representative of an industry engaged in the manufacture,
production or sale of essential inputs for the like or directly
competitive article, or a trade or business association
representing companies engaged in the manufacture, production
or sale of such essential inputs.
The conference agreement also authorizes the President to
proclaim duty-free and quota-free treatment for fabrics and
yarns not available in the United States, in addition to those
fabrics and yarns already listed in Annex 401 of the NAFTA. Any
interested party may request the President to consider such
treatment for additional fabrics and yarns. The requesting
party will bear the burden of demonstrating that a change is
warranted by providing sufficient evidence. The President must
make a determination within 60 calendar days of receiving a
request from an interested party.
The Senate recedes to the House on the elimination of
existing quotas on textile and apparel articles imported into
the United States from Kenya and Mauritius.
With regards to findings and trimmings, the conference
agreement states that an article eligible for preferential
treatment under section 112 of the bill 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 article. For most apparel imports, findings and
trimmings include sewing thread, hooks and eyes, snaps,
buttons, ``bow buds'', decorative lace trim, elastic strips,
and zippers, including zipper tapes, labels, and certain
elastic strips. However, for apparel articles cut and assembled
in one or more beneficiary sub-Saharan African countries from
fabrics wholly formed and cut in the United States, from yarns
wholly formed in the United States, sewing thread is not
included in the findings or trimmings exception.
The conference agreement also provides that certain
interlinings are eligible for treatment as findings and
trimmings. The treatment of interlinings above shall
beterminated if the President determines that U.S. manufacturers are
providing such interlinings in the United States in commercial
quantities.
The conference agreement further provides that an article
otherwise eligible for preferential treatment under section 112
shall not be ineligible for such treatment because the article
contains fibers or yarns not wholly formed in the United States
or 1 or more beneficiary sub-Saharan African countries if the
total weight of all such fibers and yarns is not more than 7
percent of the total weight of the article.
Sec. 113. Protections Against Transshipment
Present law
The Tariff Act of 1930, as amended, provides for civil
monetary penalties for unlawful transshipment. These include
penalties under section 1592 for up to a maximum of the
domestic value of the imported merchandise or eight times the
loss of revenue, as well as denial of entry, redelivery or
liquidated damages for failure to redeliver the merchandise
determined to be inaccurately represented. In addition, an
importer may be liable for criminal penalties, including
imprisonment for up to five years, under section 1001 of title
18 of the United States Code for making false statements on
import documentation.
House bill
Section 7(c)(1) provides that, pursuant to the WTO
Agreement on Textiles and Clothing, the United States shall
eliminate the existing quotas on textile and apparel exports to
the United States from Kenya and Mauritius within 30 days after
these countries adopt an efficient visa system to guard against
unlawful transshipment of textile and apparel goods and the use
of counterfeit documents. The provision requires the Customs
Service to provide technical assistance to Kenya and Mauritius
in the development and implementation of visa systems.
Section 7(c)(2) requires the President to: (1) continue
the existing no quota policy for other countries in sub-Saharan
Africa; and (2) submit a report to Congress by March 31 of each
year concerning the growth in textiles and apparel exports to
the United States from countries in sub-Saharan Africa in order
to protect United States consumers, workers, and textile
manufacturers from economic injury due to the no quota policy.
Section 7(d)(1) states that the President should ensure
that any sub-Saharan African country that intends to export
textile and apparel goods to the United States: (1) has in
place an effective visa system to guard against unlawful
transshipment of textile and apparel goods and the use of
counterfeit documents; and (2) will cooperate fully with the
United States to address and take action necessary to prevent
circumvention, as provided in Article 5 of the WTO Agreement on
Textiles and Clothing.
Section 7(d)(2) requires the President to impose
penalties by denying an exporter, or any of its successors,
duty-free treatment under this section for textile and apparel
articles for a period of two years if the President determines,
based on sufficient evidence, that the exporter has willfully
falsified information regarding the country of origin,
manufacture, processing, or assembly of a textile or apparel
article for which duty-free treatment under the GSP program is
claimed.
Section 7(d)(3) underscores that all provisions of the
laws, regulations, and procedures of the United States relating
to the denial of entry of articles or penalties against
individuals or entities for engaging in illegal transshipment,
fraud, or other violations of the customs laws shall apply to
imports from sub-Saharan countries.
In order to facilitate close monitoring by the
Administration and expanded oversight by the Committee, section
7(d)(4) requires that the Customs Service submit to the
Congress, by not later than March 31 of each year, a report on
the effectiveness of visa systems required of Kenya and
Mauritius and other countries that intend to export textiles
and apparel products to the United States, and on measures
taken by countries in sub-Saharan Africa to prevent
circumvention as described in Article 5 of the WTO Agreement on
Textiles and Clothing.
Senate amendment
Section 112(a) of the Senate amendment provides that the
preferential treatment accorded to imports of textiles and
apparel shall only be extended to beneficiary sub-Saharan
African countries that adopt an efficient visa system to guard
against transshipment and the use of counterfeit documents, and
enact legislation or promulgate regulations to permit
transshipment investigations by the U.S. Customs Service.
Section 112(d) directs the Customs Service to provide
technical assistance to the beneficiary sub-Saharan African
countries for the implementation of these requirements.
Section 112 of the Senate amendment also provides that if
an exporter is found to have engaged in transshipment with
respect to textile or apparel products from a beneficiary sub-
Saharan African country, the President must deny all benefits
under section 112 and 111 to such exporter, any successor of
such exporter, and any other entity owned or operated by the
principal of the exporter for a period of five years.
Conference agreement
The conference agreement includes provisions from both
the House and Senate bills, as well as several additional
elements intended to prevent the transshipment of textile and
apparel articles from sub-Saharan Africa.
Section 113(a) sets forth the following requirements that
beneficiary sub-Saharan countries must satisfy before
preferential tariff treatment is extended to the covered
textileand apparel articles pursuant to section 112(a):
The country has adopted an effective visa system,
domestic laws, and enforcement procedures to prevent
unlawful transshipment of the covered articles and the
use of counterfeit documents relating to the entry of
the articles into the United States. An effective visa
system should require documentation supporting the
country of origin such as production records,
information relating to the place of production, the
number and identification of the types of machinery
used in the production, the number of employees
employed in production, and certification from both the
manufacturer and exporter. The conferees also expect
that countries adopt and implement domestic laws and
procedures consistent with Article 5 of the WTO
Agreement on Textiles and Clothing, which obligates
countries to establish the necessary legal provisions
and/or administrative procedures to address and take
action against circumvention.
The country has adopted legislation or regulations
to permit verification of information by the U.S.
Customs Service. Such laws or regulations should be
clear and unambiguous.
The country agrees to report on a timely basis
export and import information requested by U.S.
Customs. This requirement is not intended to
unnecessarily burden beneficiary countries and
specifically requires that the requested information be
consistent with the manner in which the country keeps
those records.
The country cooperates fully with the Customs
Service to prevent circumvention and transshipment as
provided in Article 5 of the Agreement on Textiles and
Clothing. Article 5 of that Agreement establishes that
cooperation will include: (1) investigation of
circumvention practices; (2) exchange of documents,
correspondence, reports, and other relevant information
to the extent available; and (3) facilitation of plant
visits and contacts. The conferees also intend
cooperation and action to include the following:
suspending or denying export visas to manufacturers/
exporters suspected of transshipping; sharing trade
data with the U.S. Customs Service (including import
data relating to textile and apparel); performing
factory visits in order to verify production (including
verification of the commodity produced, the quota
category and volume); providing information to U.S.
Customs on actions taken by the country relating to
production verification, the identity of factories and/
or companies suspected of illegal transshipment,
further investigation or administrative action, the
names of open and producing factories and the types of
goods produced, and the names of closed factories; and
executing a memorandum of understanding with the United
States establishing the commitment of the beneficiary
sub-Saharan country to self-policing and sharing
enforcement results (including border searches, results
of factory verification visits, and administrative
penalties assessed against factories and exporters).
The United States fully expects that beneficiary sub-
Saharan countries will take action against
circumvention and implement the cooperation principles
in Article 5 of the Agreement, including denial of
entry into the beneficiary sub-Saharan country of
merchandise suspected of transshipment. The United
States will vigorously enforce its rights to deny entry
and/or adjust quota charges to reflect the true origin
of the transshipped goods.
The country agrees to report on a timely basis, at
the request of the Customs Service, documentation
establishing the country of origin of covered articles.
Section 113(b)(1) also 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, and section
113(b)(2) sets forth the exceptions where a certificate of
origin is not required.
The conferees believe that transshipment is a serious
violation of U.S. laws and undermines the benefits that would
otherwise accrue to the beneficiary sub-Saharan African
countries. Section 113(b)(3) of the conference agreement
incorporates the penalty provisions from the Senate amendment
denying for a period of five years all benefits provided under
section 112 of this bill to the exporter, any successor of such
exporter, and any other entity owned or operated by the
principal of the exporter if the President determines, based on
sufficient evidence, that an exporter has engaged in
transshipment as defined in paragraph 4 of this section.
Section 113(b)(4) incorporates the definition of
transshipment from the Senate amendment. Transshipment is
defined to have occurred when preferential treatment for a
textile or apparel product has been claimed on the basis of
material false information concerning the country of origin,
manufacture, processing, or assembly of the article or any of
its components. 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.
Section 113(b)(5) incorporates the House provision
requiring the U.S. Customs Service to monitor and report to
Congress (on an annual basis beginning no later than March 31)
on the effectiveness of the visa systems and measures taken to
deter circumvention as described in the Article 5 of the
Agreement on Textiles and Clothing.
The conferees also believe that it is important for the
U.S. Customs Service to make available technical assistance in
preventing transshipment to interested sub-Saharan African
countries. Section 113(c) directs U.S. Customs Service to
provide technical assistance to beneficiary sub-Saharan
countries for the implementation of an effective visa system
and domestic laws. Section 113(c) also requires the Customs
Service to provide assistance in training sub-Saharan African
officials in anti-transshipment enforcement and to the extent
feasible, assist such countries in developing and adopting an
electronic visa system (ELVIS). The conferees expect that the
U.S. Customs Service will provide model laws, regulations, and
enforcement procedures and training seminars to beneficiary
sub-Saharan countries requesting such assistance.
Finally, the conferees believe that it is critical to
provide the Customs Service with additional resources in order
to provide technical assistance to sub-Saharan countries as
well as for increased transshipment enforcement. Section 113(d)
of the conference agreement authorizes $5,894,913.00 for this
purpose. The conferees expect the U.S. Customs Service to
utilize these resources as follows:
Hiring of import specialists to be assigned to
selected U.S. ports, strategically placed teams, and
the Headquarters textile program, to administer the
program and provide oversight;
Hiring of inspectors and investigators (Special
Agents) to be assigned to selected ports, and to
Headquarters textiles program to coordinate and ensure
implementation of Textile Production Verification Team
results;
Hiring of international trade specialists to be
assigned at Headquarters to work on illegal textile
transshipment policy issues, and to the Strategic Trade
Center in New York to work on targeting and risk
assessment for illegal transshipment;
Increased office space for additional personnel in
Hong Kong;
Hiring of auditors for internal control and
document reviews to audit importers to ensure that they
are not engaging in textile and apparel transshipment;
Additional travel funds to be used for deployment
of additional textile production verification teams
(``jump teams'') to sub-Saharan countries as required
under the bill and as warranted, based on U.S. Customs
risk analysis of suspected illegal textile
transshipment;
Internal training for Customs personnel; and
Training of foreign counterparts in risk management
analytical techniques and for teaching factory
inspection techniques, including training in effective
border examination, factory inspection techniques,
audit reviews skills, and model laws and regulations;
and for outreach to the U.S. Importing Community for
voluntary compliance programs and troubleshooting.
The U.S. Customs Service has estimated that its current
enforcement against textile and apparel transshipment from sub-
Saharan Africa has resulted in over 90% compliance. The
conferees believe that the additional resources of
$5,594,913.00, used as described above, will enable the U.S.
Customs Service to continue, and even increase, this compliance
rate after passage of this bill because the U.S. Customs
Service will have more resources to continually review, expand,
and modify its current practice of transshipment enforcement.
The current practices include the use of jump-teams,
informants, collection of production information, monitoring
and analyzing imports trends, and the use of lists designating
persons and companies found to be engaged in transshipping
(``592A,'' ``592B,'' and the Administrative List containing the
names of convicted foreign factories and foreign factories that
have had administrative penalties assessed against them). The
U.S. Customs Service will also use information available from
private sector groups that monitor trade production activities
in assessing risk factors and enforcing transshipment.
Sec. 114. Termination
Present law
The Generalized System of Preferences (GSP) program is
authorized through September 30, 2001.
House bill
Section 8 of the House bill establishes the effective
dates of the GSP program and the amendments made by this Act as
July 1, 1999 through June 30, 2009 for eligible countries in
sub-Saharan Africa.
Senate amendment
Section 111 of the Senate amendment extends the regular
GSP program for countries in sub-Saharan Africa through
September 30, 2006 and establishes October 1, 1999, as the
effective date for the enhanced GSP benefits set forth in this
section with an expiration date of September 30, 2006.
Conference agreement
The Conference agreement creates a new section 506C in
the Trade Act of 1974 extending the regular GSP and enhanced
duty-free treatment provided to beneficiary sub-Saharan African
countries through September 30, 2008.
Sec. 115. Clerical Amendments
Present law
Title V of the Trade Act of 1974 authorizes the President
to extend duty-free treatment to eligible imports from
beneficiary developing countries in accordance with the
provisions of the title. The table of contents for the Trade
Act of 1974 lists the sections contained in each title.
House bill
No provision.
Senate amendment
Section 111 of the Senate amendment amends the table of
contents for title V of the Trade Act of 1974 by inserting
after the item relating to section 505 the following new items:
506A. Designation of sub-Saharan African countries for
certain benefits.
506B. Termination of benefits for sub-Saharan African
countries.
Conference agreement
The House recedes to the Senate. The conference agreement
also adds a listing for ``Protections against transshipment''
as a new section 506B in the table of contents and
redesignating the section on ``Termination of benefits for sub-
Saharan African countries'' as a new section 506C.
sec. 116. free trade agreements with sub-saharan african countries
Present law
No provision.
House bill
In section 6 of the House bill, Congress declares that a
United States-Sub-Saharan Africa Free Trade Area should be
established, or free trade agreements entered into, to serve as
the catalyst for increasing trade between the United States and
sub-Saharan Africa, and increasing private sector development
in sub-Saharan Africa.
To this end, section 6 requires the President, taking
into account the provisions of the treaty establishing the
African Economic Community and the willingness of the
governments of sub-Saharan African countries to engage in
negotiations, to develop a plan for entering into one or more
trade agreements with eligible sub-Saharan African countries in
order to establish a United States-Sub-Saharan Africa Free
Trade Area. The plan shall include the following:
(1) the specific objectives of the United States
with respect to the establishment of the free trade
area and a suggested timetable;
(2) the benefits to both the United States and sub-
Saharan Africa with respect to the free trade area;
(3) a mutually agreed-upon timetable for
establishing a free trade area;
(4) the implications for and the role of regional
and sub-regional organizations in sub-Saharan Africa;
(5) subject matter anticipated to be covered and
U.S. laws, programs, and policies, as well as the laws
of participating eligible African countries and
existing economic cooperation and trade agreements that
may be affected; and
(6) procedures to ensure adequate consultation with
Congress and the private sector during the
negotiations, consultation with the Congress regarding
all matters relating to implementing of the
agreement(s), approval by the Congress of the
agreement(s), and adequate consultations with the
relevant African governments and African regional and
subregional intergovernmental organizations during the
negotiations of the agreement(s).
Not later than 12 months after the date of enactment, the
President shall prepare and transmit to Congress a report on
the plan developed.
Senate amendment
Section 114 of the Senate amendment requires the
President to examine the feasibility of negotiating a free
trade agreement (or agreements) with interested sub-Saharan
African countries.
Not later than 12 months after the date of enactment of
this Act, the President shall submit a report to the Senate
Finance Committee and the House Ways and Means Committee
regarding the feasibility of negotiating such agreement (or
agreements). If the President determines that the negotiation
of any such free trade agreement is feasible, the President
shall provide a detailed plan for such negotiation that
outlines the objectives, timing, any potential benefits to the
United States and sub-Saharan Africa, and the likely economic
impact of any such agreement.
Conference agreement
By eliminating the barriers that currently exist to
developing stronger, mutually beneficial trade and investment
relations between the United States and sub-Saharan Africa, the
conferees believe that the negotiation of one or more free
trade agreements would serve an important catalyst in the
economic development of sub-Saharan Africa.
The Senate recedes to the House, with a modification to
state that the negotiation of free trade agreements, rather
than the establishment of a Free Trade Area, with interested
countries in sub-Saharan Africa, is an important catalyst for
increasing trade between the United States and sub-Saharan
Africa and increasing private sector development in sub-Saharan
Africa.
Consistent with this policy objective, the conference
agreement requires the President to prepare and transmit to
Congress a plan for the purpose of negotiating andentering into
one or more trade agreements with interested eligible sub-Saharan
African countries. The plan shall include the specific objectives of
the United States with respect to the negotiations and a suggested
timetable, the benefits to both the United States and the relevant sub-
Saharan African countries, a mutually agreed upon timetable for the
President's report should also include procedures to ensure adequate
consultation with Congress and the private sector during the
negotiations, consultation with Congress regarding all matters relating
to implementation of the free trade agreements, approval by Congress of
the agreements, and adequate consultation with the relevant African
governments and regional and sub-regional intergovernmental
organizations during the negotiations.
The conference agreement also clarifies that the
President's report should include procedures to ensure adequate
consultation with Congress and the private sector during the
negotiations, consultation with Congress regarding all matters
relating to implementation of free trade agreements, approval
by Congress of the agreements, and adequate consultation with
the relevant African governments, and regional and sub-regional
intergovernmental organizations during the negotiations.
Sec. 117. Assistant United States Trade Representative for African
Affairs
Present law
Section 141 of the Trade Act of 1974 established within
the Executive Office of the President the office of the United
States Trade Representative (USTR). The President is directed
to appoint a person to head the office and to serve as USTR.
House bill
Section 13 of the House bill expresses the sense of
Congress that the position of Assistant United States Trade
Representative (AUSTR) for African Affairs is integral to the
U.S. commitment to increasing U.S.-sub-Saharan African trade
and investment.
The provision requires the President to maintain a
position of AUSTR for African Affairs within the Office of USTR
to direct and coordinate interagency activities on U.S.-Africa
trade policy and investment matters and serve as: (1) a primary
point of contact in the executive branch for persons engaged in
trade between the U.S. and sub-Saharan Africa; and (2) the
chief advisor to the USTR on issues of trade with Africa.
The President shall ensure that the AUSTR for African
Affairs has adequate funding and staff to carry out the duties
described in this section.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House with a modification. The
modification expresses the Sense of Congress that the position
of AUSTR should be maintained and is integral to strengthening
U.S.-sub-Saharan African trade and economic relations.
The conferees note that since the Office on African
American Affairs was created in 1998, the United States has
signed several significant trade agreements with sub-Saharan
Africa, including a Bilateral Trade and Investment Treaty with
Mozambique, and Trade and Investment Framework Agreements with
South Africa and Ghana.
The conference agreement reflects the conferees' opinion
that the AUSTR for African Affairs should: (1) act as a senior
negotiator with sub-Saharan African countries; (2) take a lead
role in designating participants in the U.S.-sub-Saharan
African Economic and Cooperation Forum; (3) take a lead role in
designating sub-Saharan African countries as beneficiary
countries; and (4) take a lead role in administering and
implementing the trade provisions of this Act.
Subtitle C--Economic Development Related Issues
Sec. 121. Sense of Congress Regarding Comprehensive Debt Relief for the
World's Poorest Countries
Present law
In FY 2000, Congress supported U.S.-led efforts to
enhance the Heavily Indebted Poor Countries (HIPC) Initiative
by funding roughly one-third of the direct costs to the United
States, as well as authorizing the use of IMF internal
resources, including earnings on investments of profits of
sales of IMF gold, for HIPC debt relief (Consolidated
Appropriations Act for FY 2000 H.R. 3194; P.L. 106-113).
House bill
Section 9 of the House bill expresses the sense of the
Congress that the Secretary of the Treasury should instruct the
United States Executive Directors of the International Bank for
Reconstruction and Development, the International Monetary
Fund, and the African Development Bank to use the voice and
votes of the Executive Directors to encourage vigorously their
respective institutions to develop enhanced mechanisms which
further the following goals in eligible countries in sub-
Saharan Africa:
(1) Strengthening and expanding the private sector,
especially among women-owned businesses.
(2) Reducing tariffs, nontariff barriers, and other
trade obstacles, and increasing economic integration.
(3) Supporting countries committed to accountable
government, economic reform, the eradication of
poverty, and the building of civil societies.
(4) Supporting deep debt reduction at the earliest
possible date with the greatest amount of relief for
eligible poorest countries under the ``Heavily Indebted
Poor Countries'' (HIPC) debt initiative.
It is the sense of the Congress that relief provided to
countries in sub-Saharan Africa that qualify for the HIPC debt
initiative should be made primarily through grants rather than
through extended-term debt, and that interim relief or interim
financing should be provided for eligible countries that
establish a strong record of macroeconomic reform.
Senate amendment
In Section 714 of the Senate amendment, Congress makes
the following findings:
(1) The burden of external debt has become a major
impediment to economic growth and poverty reduction in
many of the world's poorest countries.
(2) Until recently, the United States Government
and other official creditors sought to address this
problem by rescheduling loans and in some cases
providing limited debt reduction.
(3) Despite such efforts, the cumulative debt of
many of the world's poorest countries continued to grow
beyond their capacity to repay.
(4) In 1997, the Group of Seven, the World Bank,
and the International Monetary Fund adopted the HIPC
Initiative, a commitment by the international community
that all multilateral and bilateral creditors, acting
in a coordinated and concerted fashion, would reduce
poor country debt to a sustainable level.
(5) The HIPC Initiative is currently undergoing
reforms to address concerns raised about country
conditionality, the amount of debt forgiven, and the
allocation of savings realized through the debt
forgiveness program to ensure that the Initiative
accomplishes the goals of economic growth and poverty
alleviation in the world's poorest countries.
(6) Recently, the President requested Congress to
provide additional resources for bilateral debt
forgiveness and additional United States contributions
to the HIPC Trust Fund.
Section 714 expresses the sense of Congress that:
(1) Congress and the President should work
together, without undue delay and in concert with the
international community, to make comprehensive debt
relief available to the world's poorest countries in a
manner that promotes economic growth and poverty
alleviation;
(2) this program of bilateral and multilateral debt
relief should be designed to strengthen and expand the
private sector, encourage increased trade and
investment, support the development of free markets,
and promote broad-scale economic growth in beneficiary
countries;
(3) this program of debt relief should also support
the adoption of policies to alleviate poverty and to
ensure that benefits are shared widely among the
population, such as through initiatives to advance
education, improve health, combat AIDS, and promote
clean water and environmental protection;
(4) these debt relief agreements should be designed
and implemented in a transparent manner and with the
broad participation of the citizenry of the debtor
country and should ensure that country circumstances
are adequately taken into account;
(5) no country should receive the benefits of debt
relief if that country does not cooperate with the
United States on terrorism or narcotics enforcement, is
a gross violator of the human rights of its citizens,
or is engaged in conflict or spends excessively on its
military; and
(6) in order to prevent adverse impact on a key
industry in many developing countries, the
International Monetary Fund must mobilize its own
resources for providing debt relief to eligible
countries without allowing gold to reach the open
market, or otherwise adversely affecting the market
price of gold.
Conference agreement
The House recedes to the Senate with minor technical
modifications.
Sec. 122. Executive Branch Initiatives
Present law
No provision.
House bill
In section 10 of the House bill Congress recognizes that
the stated policy of the executive branch in 1997, the
``Partnership for Growth and Opportunity in Africa''
initiative, is a step toward the establishment of a
comprehensive trade and development policy for sub-Saharan
Africa. It is the sense of the Congress that this Partnership
is a companion to the policy goals set forth in this Act.
Section 10 provides that in addition to continuing
bilateral and multilateral economic and development assistance,
the President shall target technical assistance toward:
(1) developing relationships between United States
firms and firms in sub-Saharan Africa through a variety
of business associations and networks;
(2) providing assistance to the governments of sub-
Saharan African countries to:
(A) liberalize trade and promote exports;
(B) bring their legal regimes into
compliance with the standards of the WTO in
conjunction with membership in that
Organization;
(C) make financial and fiscal reforms; and
(D) promote greater agribusiness linkages;
(3) addressing such critical agricultural policy
issues as market liberalization, agricultural export
development, and agribusiness investment in processing
and transporting agricultural commodities;
(4) increasing the number of reverse trade missions
to growth-oriented countries in sub-Saharan Africa;
(5) increasing trade in services; and
(6) encouraging greater sub-Saharan participation
in future negotiations in the WTO on services and
making further commitments in their schedules to the
General Agreement on Trade in Services in order to
encourage the removal of tariff and nontariff barriers.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
Sec. 123. Overseas Private Investment Corporation Initiatives
Present law
Title IV of Part I of the Foreign Assistance Act of 1961,
as amended (Public Law 87-195), established the Overseas
Private Investment Corporation (OPIC), a Board of Directors for
the Corporation, consisting of 15 members, and authorized the
corporation to create equity funds.
House bill
Section 11 of the House bill expresses the sense of the
Congress that OPIC should use its current authorities to
initiate an equity fund or funds in support of projects in the
countries in sub-Saharan Africa, in addition to the existing
equity fund for sub-Saharan Africa created by the Corporation.
The provision specifies how each fund should be structured,
capitalized and implemented.
Section 12 of the bill amends Section 233 of the Foreign
Assistance Act of 1961 to direct the OPIC Board to form an
advisory committee to develop and implement policies, programs
and financial instruments with respect to sub-Saharan Africa.
It directs the advisory committee to make recommendations to
the Board on how the Corporation can facilitate greater support
by the United States for trade and investment with and in sub-
Saharan Africa. And it also provides for the termination of the
committee four years after the date of enactment and for a
report on the steps that the Board has taken to implement the
committee's recommendations six months after the date of
enactment and annually thereafter for the next four years.
Senate bill
No provision.
Conference agreement
The Senate recedes to the House with a slightly modified
provision changing the name of the advisory committee to the
investment advisory council. In addition, the conference
agreement specifies that the OPIC Board shall take measures to
increase the loan, guarantee and insurance programs, and
financial commitments of the corporation in sub-Saharan Africa,
including through the use of an investment advisory council to
assist the Board in developing and implementing programs and
policies for sub-Saharan Africa.
Sec. 124. Export-Import Bank Initiatives
Present law
The Export-Import Bank is advised by a sub-Saharan Africa
Advisory Committee (SAAC) on the expansion of its activities in
sub-Saharan Africa.
House bill
Section 12(b) of the House bill would establish a SAAC
for the Bank.
Senate amendment
No provision.
Conference agreement
The conference agreement strikes section 12(b) of the
House bill in its entirety, since an advisory committee was
created previously by the Export-Import Bank Reauthorization
Act of 1997 (P.L. 105-121). Instead, the conference agreement
expresses the sense of Congress that the Export-Import Bank
should continue to take measures to promote the expansion of
the Bank's commitments in sub-Saharan Africa. The conference
provision also commends the SAAC for aiding the Bank in
doubling the number of sub-Saharan African countries in which
the Bank is open, and by increasing by tenfold the Bank's
support for sales to sub-Saharan Africa from fiscal year 1998
to fiscal year 1999.
Sec. 125. Expansion of the United States and Foreign Commercial Service
in Sub-Saharan Africa
Present law
No provision.
House bill
Section 14 of the House bill would make a number of
findings regarding the Service's presence in sub-Saharan Africa
and direct the Service to expand its presence in that region.
It also would require the Service to identify new market
opportunities and barriers thereto, and to make efforts to
facilitate U.S. entry into those markets, with an annual report
on such efforts to Congress.
Senate amendment
No provision.
Conference agreement
The conference agreement adopts a modified version of the
House provision that directs the International Trade
Administration (ITA), rather than the Service, to carry out the
market entry and barrier identifications and make those
identifications publicly available. The ITA, which already
undertakes trade-related research efforts, is better suited to
carrying out this initiative.
Sec. 126. Donation of Air Traffic Control Equipment to Eligible Sub-
Saharan African Countries
Present law
No provision.
House bill
Section 16 of the House bill expresses the sense of the
Congress that, to the extent appropriate, the U.S. Government
should make every effort to donate to governments of sub-
Saharan African countries (determined to be eligible under
section 4 of this Act) air traffic control equipment that is no
longer in use, including appropriate related reimbursable
technical assistance.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
Sec. 127. Additional Authorities and Increased Flexibility to Provide
Assistance under the Development Fund for Africa
Present law
Section 496 of Chapter 10 of the Foreign Assistance Act
of 1961 established the Development Fund for Africa (DFA) to
promote the participation of Africans in long term sustainable
development. Title V of the International Security and
Cooperation Act of 1981 established the African Development
Foundation (ADF) in order to provide assistance aimed at promoting
economic opportunities and community development in Africa.
House bill
Section 17 of the House bill expresses the sense of
Congress that sustained economic growth in sub-Saharan Africa
depends in large measure upon the development of a receptive
environment for trade and investment, and that to achieve this
objective the United States Agency for International
Development should continue to support programs which help to
create this environment. Investments in human resources,
development, and implementation of free market policies,
including policies to liberalize agricultural markets and
improve food security, and the support for the rule of law and
democratic governance should continue to be encouraged and
enhanced on a bilateral and regional basis.
In section 17 of the House bill, Congress makes the
following declarations:
(1) The DFA established under chapter 10 of part I
of the Foreign Assistance Act of 1961 (22 U.S.C. 2293
et seq.) has been an effective tool in providing
development assistance to sub-Saharan Africa since
1988.
(2) The DFA will complement the other provisions of
this Act and lay a foundation for increased trade and
investment opportunities between the United States and
sub-Saharan Africa.
(3) Assistance provided through the Development
Fund for Africa will continue to support programs and
activities that promote the long term economic
development of sub-Saharan Africa, such as programs and
activities relating to the following:
(A) Strengthening primary and vocational
education systems, especially the acquisition
of middle-level technical skills for operating
modern private businesses and the introduction
of college level business education, including
the study of international business, finance,
and stock exchanges.
(B) Strengthening health care systems.
(C) Supporting democratization, good
governance and civil society and conflict
resolution efforts.
(D) Increasing food security by promoting
the expansion of agricultural and agriculture-
based industrial production and productivity
and increasing real incomes for poor
individuals.
(E) Promoting an enabling environment for
private sector-led growth through sustained
economic reform, privatization programs, and
market-led economic activities.
(F) Promoting decentralization and local
participation in the development process,
especially linking the rural production sectors
and the industrial and market centers
throughout Africa.
(G) Increasing the technical and managerial
capacity of sub-Saharan African individuals to
manage the economy of sub-Saharan Africa.
(H) Ensuring sustainable economic growth
through environmental protection.
(4) The ADF has a unique congressional mandate to
empower the poor to participate fully in development
and to increase opportunities for gainful employment,
poverty alleviation, and more equitable income
distribution in sub-Saharan Africa. The ADF has worked
successfully to enhance the role of women as agents of
change, strengthen the informal sector with an emphasis
on supporting micro and small sized enterprises,
indigenous technologies, and mobilizing local
financing. The ADF should develop and implement
strategies for promoting participation in the
socioeconomic development process of grassroots and
informal sector groups such as nongovernmental
organizations, cooperatives, artisans, and traders into
the programs and initiatives established under this
Act.
In addition, section 17 of the House bill amends section
496(h) of the Foreign Assistance Act of 1961 (22 U.S.C.
2293(h)) by:
(A) redesignating paragraph (3) as paragraph (4);
and
(B) inserting after paragraph (2) the following:
(3) Democratization and conflict resolution
capabilities.--Assistance under this section may also
include program assistance--
(A) to promote democratization, good
governance, and strong civil societies in sub-
Saharan Africa; and
(B) to strengthen conflict resolution
capabilities of governmental,
intergovernmental, and nongovernmental entities
in sub-Saharan Africa.
Section 496(h)(4) of such Act, as amended by paragraph
(1), is further amended by striking paragraphs (1) and (2) in
the first sentence and inserting paragraphs (1), (2), and (3).
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
Sec. 128. Assistance from United States Private Sector to Prevent and
Reduce HIV/AIDS in Sub-Saharan Africa
Present law
No provision.
House bill
Section 18 of the House bill expresses the sense of
Congress that U.S. businesses should be encouraged to provide
assistance to sub-Saharan African countries to prevent and
reduce the incidence of HIV/AIDS in sub-Saharan Africa. In
providing such assistance, U.S. businesses should be encouraged
to consider the establishment of an HIV/AIDS Response Fund in
order to provide for coordination among such businesses in the
collection and distribution of the assistance to sub-Saharan
African countries.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
Sec. 129. Sense of the Congress Relating to HIV/AIDS Crisis in Sub-
Saharan Africa
Present law
No provision.
House bill
In section 19 of the House bill, Congress finds that:
(1) Sustained economic development in sub-Saharan
Africa depends in large measure upon successful trade
with and foreign assistance to the countries of sub-
Saharan Africa.
(2) The HIV/AIDS crisis has reached epidemic
proportions in sub-Saharan Africa, where more than
21,000,000 men, women, and children are infected with
HIV.
(3) 83 percent of the estimated 11,700,000 deaths
from HIV/AIDS worldwide have been in sub-Saharan
Africa.
(4) The HIV/AIDS crisis in sub-Saharan Africa is
weakening the structure of families and societies.
(5)(A) The HIV/AIDS crisis threatens the future of
the workforce in sub-Saharan Africa.
(B) Studies show that HIV/AIDS in sub-Saharan
Africa most severely affects individuals between the
ages of 15 and 49--the age group that provides the most
support for the economies of sub-Saharan African
countries.
(6) Clear evidence demonstrates the HIV/AIDS is
destructive to the economies of sub-Saharan African
countries.
(7) Sustained economic development is critical to
creating the public and private sector resources in
sub-Saharan Africa necessary to fight the HIV/AIDS
epidemic.
Section 19 of the House bill expresses the sense of
Congress that:
(1) addressing the HIV/AIDS crisis in sub-Saharan
Africa should be a central component of U.S. foreign
policy with respect to sub-Saharan Africa;
(2) significant progress needs to be made in
preventing and treating HIV/AIDS in sub-Saharan Africa
in order to sustain a mutually beneficial trade
relationship between the United States and sub-Saharan
African countries; and
(3) the HIV/AIDS crisis in sub-Saharan Africa is a
global threat that merits further attention through
greatly expanded public, private, and joint public-
private efforts, and through appropriate U.S.
legislation.
Senate amendment
No provision.
Conference agreement
The Senate recedes to the House.
Sec. 130. Study on Improving African Agricultural Practices
Present law
No provision.
House bill
No provision.
Senate amendment
Section 716 of the Senate amendment authorizes the USDA,
in consultation with the American Land Grant Colleges and
Universities and not-for-profit international organization, to
conduct a two-year study on ways to improve the flow of
American farming techniques and practices to African farmers.
The study conducted by the USDA shall include an examination of
ways of improving or utilizing:
(1) knowledge of insect and sanitation procedures;
(2) modern farming and soil conservation
techniques;
(3) modern farming equipment (including maintaining
the equipment);
(4) marketing crop yields to prospective
purchasers; and
(5) crop maximization practices.
The study shall be submitted to the Committee on
Agriculture, Nutrition, and Forestry of the Senate and the
Committee on Agriculture of the House of Representatives not
later than September 30, 2001.
The USDA is encouraged to consult with American Land
Grant Colleges and not-for-profit international organizations
that have firsthand knowledge of current African farming
practices.
There is authorized to be appropriated $2,000,000 to
conduct the study.
Conference agreement
The House recedes to the Senate, with a modification to
delete the authorization of funds.
sec. 131. sense of the congress regarding efforts to combat
desertification in african and other countries
Present law
No provision.
House bill
No provision.
Senate amendment
In section 718 of the Senate amendment, Congress finds
that:
(1) desertification affects approximately one-sixth
of the world's population and one-quarter of total land
area;
(2) over 1,000,000 hectacres of Africa are affected
by desertification;
(3) dryland degradation is an underlying cause of
recurrent famine in Africa;
(4) the United Nations Environmental Programme
estimates that desertification costs the world
$42,000,000,000 a year, not including incalculable
costs in human suffering; and
(5) the United States can strengthen its
partnership throughout Africa and other nations
affected by desertification, help alleviate social
economic crises caused by misuse of natural resources,
and reduce dependence on foreign aid, by taking a
leading role to combat desertification.
Section 718 of the Senate amendment expresses of the sense
of the Senate that the United States should expeditiously work
with the international community, particularly Africa and other
nations affected by desertification to:
(1) strengthen international cooperation to combat
desertification;
(2) promote the development of national and
regional strategies to address desertification and
increase public awareness of this serious problem and
its effects;
(3) develop and implement national action programs
that identify the causes of desertification and
measures to address it; and
(4) recognize the essential role of local
governments and nongovernmental organizations in
developing and implementing measures to address
desertification.
Conference agreement
The House recedes to the Senate with a technical
modification to express the sense of the Congress instead of
the sense of the Senate.
TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN
Subtitle A--Trade Policy for Caribbean Basin Countries
Sec. 201. Short Title
Present law
No provision.
House bill
No provision, but Section 1 of H.R. 984, as approved by
the Committee on Ways and Means, provides that the subtitle may
be cited as the Caribbean and Central America Relief and
Economic Stabilization Act (CCARES).
Senate amendment
Section 201 of the Senate bill provides that the subtitle
may be cited as the Caribbean Basin Trade Enhancement Act
(CBTEA).
Conference agreement
The Title of the Act is the Caribbean Basin Trade
Partnership Act.
Sec. 202. Findings and Policy
Present law
The Caribbean Basin Initiative (CBI) program was
established by the Caribbean Basin Economic Recovery Act
(CBERA), which was enacted on August 5, 1983. This legislation
authorized the President to grant duty-free treatment to
imports of eligible articles from designated Caribbean
countries. The basic purpose of the CBI program, as originally
proposed by President Ronald Reagan, was to respond to an
economic crisis in the Caribbean by encouraging industrial
development primarily through preferential access to the U.S.
market. The goal was to promote political and social stability
in a strategically important region. CBI trade benefits were
made permanent in 1990.
House bill
No provision, however Section 2 of H.R. 984, as approved
by the Committee on Ways and Means makes Congressional findings
relating to the damage caused to the Caribbean Basin region by
Hurricanes Mitch and George and states that United States
assistance to the region should focus on, in addition to the
short-term disaster assistance, long-term solutions for a
successful economic recovery of Central America and the
Caribbean. Finally the findings state that the Caribbean Basin
Economic Recovery Act has represented a permanent and
successful commitment by the United States to encourage the
development of strong democratic governments and revitalized
economies in neighboring countries in the Caribbean Basin.
Section 102 of H.R. 984, as approved by the Committee on
Ways and Means, states that it is, therefore, the policy of the
United States to: (1) offer Caribbean Basin beneficiary
countries tariff and quota treatment equivalent to that
accorded to products of NAFTA countries, and to seek the
accession of these partnership countries to NAFTA or a free
trade agreement comparable to NAFTA at the earliest possible
date, with the goal of achieving full NAFTA participation by
all Caribbean countries by January 1, 2005; and (2) assure that
the domestic textile and apparel industry remains competitive
in the global marketplace by encouraging the formation and
expansion of ``partnerships'' between the textile and apparel
industry of the United States and the textile and apparel
industry of various countries located in the Western
Hemisphere.
Senate amendment
The Senate bill contains similar Congressional findings.
Section 202(b) of the Senate bill states that it is the
policy of the United States to: (1) offer Caribbean Basin
beneficiary countries willing to prepare to become a party to
the FTAA or a comparable trade agreement, tariff treatment
essentially equivalent to that accorded to products of NAFTA
countries for certain products not currently eligible for duty-
free treatment under the CBERA; and (2) seek the participation
of Caribbean Basin beneficiary countries in the FTAA or a trade
agreement comparable to the FTAA at the earliest possible date,
with the goal of achieving full participation in such an
agreement not later than 2005.
Conference agreement
The findings contained in section 2 of the conference
agreement set out the underlying rationale for expansion of the
CBI program. This section describes the conferees' agreement
that the U.S. response to the devastation caused by Hurricanes
Mitchand Georges should include, in addition to short-term
disaster assistance, a long-term mechanism to promote economic recovery
in Central America and the Caribbean. Based on the successful record of
the Caribbean Basin Initiative, the Conferees believe that economic
recovery will be achieved most effectively by enhancing the region's
opportunities to expand its international trade with important trading
partners such as the United States.
The success of the CBI program indicates that increasing
international trade with the CBI region will also promote the
growth of United States exports, decrease illegal immigration,
and improve regional cooperation in efforts to fight drug
trafficking. Finally, the conferees intend that this bill
foster increased opportunities for U.S. companies in the
textile and apparel sector to expand co-production arrangements
with countries in the CBI region, thereby sustaining and
preserving manufacturing operations in the United States that
would otherwise be relocated to the Far East.
Sec. 203. Definitions
Section 3 defines several terms used in the bill.
Subtitle B--Trade Benefits for Caribbean Basin Countries
Sec. 211. Temporary Provisions to Provide Additional Trade Benefits to
Certain Beneficiary Countries
Present law
Under the CBERA, imports from CBI beneficiary countries,
except for certain products that are statutorily excluded, are
granted duty-free treatment, subject to specific eligibility
requirements. Statutorily excluded articles are ineligible for
duty-free treatment under the CBI. These excluded products are:
textile and apparel articles that are subject to textile
agreements, canned tuna, petroleum and petroleum products,
footwear, handbags, luggage, flat goods, work gloves, and
leather-wearing apparel. Also excluded are certain watches and
watch products.
Under NAFTA, imports of these products from Mexico
(excluded from CBI and listed above) receive either declining
tariff or duty-free and quota-free treatment. Chapter Four of
NAFTA establishes rules of origin for identifying goods that
are to be treated as ``originating in the territories of NAFTA
parties'' and are therefore eligible for preferential treatment
accorded to originating goods under NAFTA, including reduced
duties and duty-free and quota-free treatment.
House bill
No provision, however section 104 of the H.R. 984 amends
section 213(b) of the CBERA to provide tariff and quota
treatment on imports from CBI beneficiary countries of excluded
articles that is identical to tariff and quota treatment
accorded like articles imported from Mexico under NAFTA during
a temporary period ending on the date that either NAFTA
accession or a reciprocal free trade agreement enters into
force with the partnership country, or on the fifth anniversary
of the temporary treatment, whichever is earlier.
Section 104 of the bill provides that NAFTA tariff and
quota treatment would apply to CBI articles that meet NAFTA
rules of origin (treating the United States and CBI beneficiary
countries as ``parties'' under the agreement for this purpose).
Customs procedures applicable to exporters under NAFTA also
must be met for partnership countries to qualify for parity
treatment. Imports of articles currently excluded under CBI,
which do not meet the conditions of NAFTA parity, would
continue to be excluded from the CBI program.
Senate amendment
The Senate bill applies NAFTA tariff treatment to all
excluded products, with the exception of textiles and apparel
which are treated separately as described below.
Conference agreement
NAFTA tariff treatment applies to goods excluded from
CBI, except to textiles and apparel. More specifically, for
imports of canned tuna, petroleum and petroleum products,
footwear, handbags, luggage, flat goods, work gloves, and
leather-wearing apparel, the conference agreement provides an
immediate reduction in tariffs equal to the preference Mexican
products enjoy under NAFTA. The applicable duty paid by
importers on such goods would be equal to the duty applicable
to the same goods if entered from Mexico. In order for their
products to qualify for the preferences afforded under this
Act, whether applied to textiles and apparel or other products,
the beneficiary country must comply with customs procedures
equivalent to those required under the NAFTA.
Treatment of Textile and Apparel Imports from Caribbean Countries and
Mexico
a. GAL Program and ``807'' Tariff Treatment
Present law
The ``Special Access Program for Textiles,'' established
by regulation in February 1986, provides flexible Guaranteed
Access Levels (GALs) to the United States market for textile or
apparel and ``made up'' textile product categories (not fabric,
yarn, or other textile products) assembled in CBI countries
from fabrics wholly formed and cut in the United States, under
bilateral agreements. GALs (also known as ``807A'') are
separate limits from (and usually significantly higher than)
standard quota levels, and are generally increased upon request
of the exporting country.
Imports under item 9802.00.80 of the U.S. Harmonized
Tariff Schedule (HTS) (previously item 807), which are
assembled abroad from U.S.-fabricated components, including
apparel assembled in Caribbean countries from fabric cut in the
United States, are assessed duty only on the value-added
abroad. Under NAFTA, Mexico receives duty-free and quota-free
treatment on articles assembled from U.S.-formed and cut
fabric.
Certain textile and apparel articles from major supplying
CBI countries are subject to import quotas under bilateral
agreements negotiated on a product-category basis under
authority of section 204 of the Agricultural Act of 1956 and in
accordance with the Uruguay Round Agreement on Textiles and
Clothing. Articles under quota may be assembled from U.S. and/
or foreign components.
House bill
No provision, but under section 104 of H.R. 984, as
approved by the Committee on Ways and Means, imports of textile
and apparel articles from CBI partnership countries that meet
NAFTA rules of origin would receive tariff treatment equivalent
to such goods originating in Mexico and would enter quota-free.
Under H.R. 984, there would be no change in the treatment of
non-originating textile products currently subject to import
quotas under bilateral and multilateral textile agreements.
Section 104 of H.R. 984 eliminates import restraint
levels and duties on textile and apparel articles: (1)
assembled in a partnership country from fabrics wholly formed
and cut in the United States from yarns formed in the United
States; (2) cut and assembled in a partnership country from
fabrics wholly formed in the United States, from yarns wholly
formed in the United States; (3) knit-to-shape in a partnership
country from yarns wholly formed in the United States; or (4)
made in a partnership country from fabric knit in a partnership
country from yarn wholly formed in the United States. Hand-
made, hand-loomed and folklore articles of the region also
qualify for duty-free and quota-free treatment.
Senate amendment
The Senate bill provides no preferential treatment for
textile products, with the exception of certain hand-made,
hand-loomed and folklore articles and certain textile luggage.
With respect to apparel products, duty-free, quota-free
treatment applies to those products listed below. Section 101
of the Senate bill would extend immediate duty-free and quota-
free treatment to the following apparel products:
(1) apparel articles assembled in an eligible CBI
beneficiary country from U.S. fabrics wholly formed
from U.S. yarns and cut in the United States that would
enter the United States under Harmonized Tariff
Schedule (HTS) item number 9802.00.80 (a provision that
otherwise allows an importer to pay duty solely on the
value-added abroad when U.S. components are shipped
abroad for assembly and re-imported into the United
States);
(2) apparel articles entered under chapters 61 and
62 of the HTS where they would have qualified for HTS
9802.00.80 treatment but for the fact that the articles
were subjected to certain types of washing and
finishing;
(3) apparel articles cut and assembled in the
eligible CBI country from U.S. fabric formed from U.S.
yarn and sewn in the Caribbean with U.S. thread;
(4) handloomed, handmade and folklore articles
originating in the CBI beneficiary country;
(5) textile luggage assembled in an eligible CBI
beneficiary country from U.S. fabrics wholly formed
from U.S. yarns and cut in the United States that would
enter the United States under Harmonized Tariff
Schedule (HTS) item number 9802.00.80; and
(6) textile luggage cut and assembled in the
eligible CBI country from U.S. fabric formed from U.S.
yarn and sewn in the Caribbean with U.S. thread.
The Senate intends that this new program of textile and
apparel benefits will be administered in a manner consistent
with the regulations that apply under the ``Special Access
Program'' for textile and apparel articles from Caribbean and
Andean Trade Preference Act countries, as described in 63 Fed.
Reg. 16474-16476 (April 3, 1998). Thus, the requirement that
products must be assembled from fabric formed in the
UnitedStates applies to all textile components of the assembled
products, including linings and pocketing, subject to the exceptions
that currently apply under the ``Special Access Program.''
Conference agreement
The House recedes with an amendment that provides duty-
free, quota-free treatment to the following apparel products:
(1) apparel articles assembled in a CBTPA country
from fabrics wholly formed and cut in the United
States, from yarns wholly formed in the United States
that are (I) entered under subheading 9802.00.80 of the
HTS or (II) entered under chapter 61 or 62 of the HTS,
if, after such assembly, the articles would have
qualified for entry under subheading 9802.00.80 but for
the fact that the articles were embroidered or
subjected to stone-washing, enzyme-washing, acid
washing, perma-pressing, oven-baking, bleaching,
garment-dyeing, screen printing, or other similar
processes;
(2) apparel articles cut in a CBTPA beneficiary
country from fabric wholly formed in the United States
from yarns wholly formed in the United States, if such
articles are assembled in such country with thread
formed in the United States;
(3) certain apparel articles knit-to-shape (other
than socks provided for in heading 6115 of the HTS) in
a CBTPA beneficiary country from yarns wholly formed in
the United States, and knit apparel articles (other
than certain T-shirts, as described below) cut and
wholly assembled in one or more CBTPA beneficiary
countries from fabric formed in one or more CBTPA
beneficiary countries or the United States from yarns
wholly formed in the United States, in an amount not to
exceed 250 million square meter equivalents (SMEs)
during the 1-year period beginning on October 1, 2000.
That amount will increase by 16 percent, compounded
annually, in each succeeding 1-year period through
September 30, 2004. In each 1-year period thereafter
through September 30, 2008, the amount will be the
amount that was in effect for the 1-year period ending
on September 30, 2004, or such other amount as may be
provided by law. For T-shirts, other then underwear T-
shirts, the amount eligible for duty-free, quota-free
treatment is 4.2 million dozen during the 1-year period
beginning on October 1, 2000. That amount will be
increased by 16 percent, compounded annually, in each
succeeding 1-year period through September 30, 2004 and
thereafter will be the amount in effect for the period
ending on September 30, 2004, or such other amount as
may be provided by law. The conference agreement
provides that it is the sense of Congress that the
Congress should determine, based on the record of
expansion of exports from the United States as a result
of the preferential treatment of articles under this
provision, the percentage by which the amounts referred
to above with respect to knit-to-shape articles and T-
shirts should be compounded for the one-year periods
occurring after the period ending on September 30,
2004;
(4) certain brassieres, subject to the requirements
set forth in the Act;
(5) certain articles assembled from fibers, yarns
or fabric not widely available in commercial
quantities, with reference to the relevant provisions
of the NAFTA; the conference agreement also authorizes
the President to extend duty-free and quota-free
treatment to certain other fibers, fabrics and yarns.
Any interested party may submit to the President a
request for extension of benefits to fibers, fabrics
and yarns not available. The requesting party will bear
the burden of demonstrating that a change is warranted
by providing sufficient evidence. The President must
make a determination within 60 calendar days of
receiving a request from an interested party;
(6) certain handloomed, handmade and folklore
articles; and
(7) certain textile luggage, as described in the
legislation.
The conference agreement establishes certain special
rules:
(1) Findings and trimmings.--Articles otherwise
eligible for preferential treatment 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.
However, sewing thread shall not be treated as a
finding or trimming for purposes of apparel articles
cut in a CBTPA beneficiary country from fabric wholly
formed in the United States from yarns wholly formed in
the United States, where preferential treatment is
contingent upon assembly with thread formed in the
United States
(2) Interlinings.--Articles otherwise eligible for
preferential treatment shall not be ineligible for such
treatment because the articles contain certain
interlinings, as described in the legislation, 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
articles. This rule will not apply if the President
determines that United States manufacturers are
producing such interlinings in the United States in
commercial quantities;
(3) De Minimis.--An article otherwise ineligible
for preferential treatment because the article contains
fibers or yarns not wholly formed in the United States
or in 1 or more beneficiary countries shall not be
ineligible for such treatment if the total weight of
all such fibers or yarns is not more than 7 percent of
the total weight of the good. However, in order for an
apparel article containing elastomeric yarns to be
eligible for preferentialtreatment, such yarns must be
wholly formed in the United States.
The conferees agree that offering trade benefits to
CBI countries for certain apparel products would be a
valuable mechanism to promote long-term economic growth
by enhancing the region's opportunities to expand trade
with the United States. At the same time, the conferees
believe these provisions would promote growth of U.S.
exports and the use of U.S. fabric, yarn and cotton.
(4) Special Origin Rule.--An article otherwise
eligible for preferential treatment shall not be
ineligible for such treatment because the article
contains nylon filament yarn (other than elastomeric
yarn), if entered under certain tariff headings 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. The House position
would have encompassed these articles. The Senate rule
of origin would have precluded eligibility. The Senate
recedes.
b. Trade Preference Levels (TPLs)
Present law
Appendix 6(B) of NAFTA provides a limited exception to
NAFTA rules of origin for textile and apparel goods. The
exception takes the form of Tariff Preference Levels (TPLs),
under which specific quantities of goods from each NAFTA
country that do not meet NAFTA ``yarn-forward'' rules of origin
will nonetheless be accorded NAFTA preferential tariff rates.
Imports of such goods that exceed these quantities will be
subject to Normal Trade Relations (NTR) duty rates. Under
NAFTA, TPLs are available for three broad categories of
products: (1) cotton or man-made apparel; (2) wool apparel;
and, (3) goods entered under subheading 9802.00.80 of the HTS.
House bill
No provision. But Section 104(2)(B)(i) of H.R. 984, as
passed by the Committee on Ways and Means authorizes USTR to
establish TPLs for Caribbean textile and apparel products which
are similar to those established for Mexican textile and
apparel products in NAFTA. After consulting with the domestic
industry and other interested parties, USTR is authorized to
establish TPLs in the following categories at specified levels:
not more than 45,000,000 square meter equivalents of cotton or
man-made fiber apparel; not more 1,500,000 square meter
equivalents of wool apparel; and, not more than 25,000,000
square meter equivalents of goods entered under subheading
9802.00.80 of the HTS.
Senate amendment
No provision.
Conference agreement
No provision.
2. Effective Date and Termination of Temporary Treatment
Present law
CBI trade benefits were made permanent in 1990.
House bill
No provision, however under section 104, of H.R. 984 a
temporary transitional period would begin upon date of
enactment and end on the date that either NAFTA accession or a
reciprocal free trade agreement enters into force with the
partnership country, or on December 31, 2004, whichever is
earlier.
Senate amendment
The Senate bill establishes a temporary transitional
period of 51 months beginning on October 1, 2000, and ending on
December 31, 2004.
Conference agreement
The Conference agreement establishes a transition period
that begins on October 1, 2000 and ends on the earlier of
September 30, 2008, or the date on which the Free Trade Area of
the Americas or another free trade agreement as described in
the legislation enters into force with respect to the United
States and the CBTPA beneficiary country.
3. Designation Criteria
Present law
In determining whether to designate any country as a CBI
beneficiary country, the President must take into account 7
mandatory and 11 discretionary criteria, which are listedin
section 212 of the CBERA:
(1) whether the country is a Communist country;
(2) whether the country has nationalized,
expropriated, 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) whether the country fails to act in good faith
in recognizing as binding or in enforcing arbitral
awards in favor of U.S. citizens;
(4) whether 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) whether 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) whether the country is a signatory to an
agreement regarding the extradition of U.S. citizens;
(7) whether the country has or is taking steps to
afford internationally recognized worker rights to
workers in the country;
(8) an expression by the country of its desire to
be designated;
(9) the economic conditions in the country, its
living standards, and any other appropriate economic
factors;
(10) 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;
(11) the degree to which the country follows
accepted rules of international trade under the World
Trade Organization;
(12) the degree to which the country uses export
subsidies or imposes export performance or local
content requirements which distort international trade;
(13) the degree to which the trade policies of the
country are contributing to the revitalization of the
region;
(14) the degree to which the country is undertaking
self-help measures to protect its own economic
development;
(15) 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;
(16) 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; and
(17) the extent to which the country is prepared to
cooperate with the United States in the administration
of the Act.
Under the CBERA, 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). Criteria (8)-(18) are
discretionary. Under the CBERA, criteria on (7) is included as
both mandatory and discretionary.
House bill
No provision, however H.R. 984, as approved by the
Committee on Ways and Means, makes no change in country
designation criteria established in the CBERA.
Senate amendment
Under the Senate bill, eligibility for the new trade
benefits is left to the discretion of the President, but the
proposal would provide specific guidance as to the criteria the
President should apply in making that determination. The
starting point under the Senate bill is compliance with the
eligibility criteria set out in the original CBERA. The Senate
bill would add certain trade-related criteria, such as the
extent to which the beneficiary country fully implements the
various Uruguay Round agreements, whether the beneficiary
country affords adequate intellectual property protection and
protection to U.S. investors, and the extent to which the
country applies internationally accepted rules on
governmentprocurement and customs valuation.
This section of the Senate bill also adds other criteria
that reflect important U.S. initiatives. They include, among
others, the extent to which the country has become a party to
and implements the Inter-American Convention Against
Corruption, is or becomes a party to a convention regarding the
extradition of its nationals, satisfies the criteria for
counter-narcotics certification under section 490 of the
Foreign Assistance Act of 1961, and provides internationally
recognized worker rights.
Conference agreement
The conference agreement provides that the President, in
designating a country as eligible for the enhanced CBTPA
benefits, shall take into account the existing eligibility
criteria established under CBERA, as well as other appropriate
criteria, including whether a country has demonstrated a
commitment to undertake its WTO obligations and participate in
negotiations toward the completion of the FTAA or comparable
trade agreement, the extent to which the country provides
intellectual property protection consistent with or greater
than that afforded under the Agreement on Trade-Related Aspects
of Intellectual Property Rights, the extent to which the
country provides internationally recognized worker rights,
whether the country has implemented its commitments to
eliminate the worst forms of child labor, the extent to which a
country has taken steps to become a party to and implement the
Inter-American Convention Against Corruption, and the extent to
which the country applies transparent, nondiscriminatory and
competitive procedures in government procurement equivalent to
those included in the WTO Agreement on Government Procurement
and otherwise contributes to efforts in international fora to
develop and implement international rules in transparency in
government procurement.
In evaluating a potential beneficiary's compliance with
its WTO obligations, the conferees expect the President to take
account of the extent to which the country follows the rules on
customs valuation set forth in the WTO Customs Valuation
Agreement. With respect to intellectual property protection, it
is the intention of the conferees that the President will also
take into account the extent to which potential beneficiary
countries are providing or taking steps to provide protection
of intellectual property rights comparable to the protections
provided to the United States in bilateral intellectual
property agreements.
In evaluating a potential beneficiary's performance with
respect to the existing eligibility criteria under CBERA, the
conferees expect that the President will take into account, in
evaluating a potential beneficiary's performance with respect
to subsections (b)(2) and (c)(5) of section 212 of CBERA, the
extent that beneficiary countries are providing or taking steps
to provide protection of investment and investors comparable to
the protection provided to the United States in bilateral
investment treaties. And with respect to evaluating a potential
beneficiary's performance with respect to subsection (c)(3) of
CBERA relating to market access, the conferees intend that the
President shall take into account the extent to which the
country provides the United States and other WTO members
nondiscriminatory, equitable, and reasonable market access with
respect to the products that will receive the enhanced benefits
provided under the CBTPA.
4. General Review of Countries
Present law
Section 212(f) of the CBERA requires the President to
submit to the Congress every three years a complete report
regarding the operation of the CBI program, including the
results of a general review of beneficiary countries.
House bill
No provision, however section 104 of H.R. 984 amends
section 212(f) of the CBERA to provide that the next review
take place one year after the effective date of H.R. 984 and
subsequent reviews occur at three year intervals thereafter.
The bill requires the President to report to Congress on a
triennial basis regarding the benefits accorded under the terms
of H.R. 984. The review will be based on the 18 eligibility
criteria listed in section 212 of the CBERA, as further
interpreted by the bill. These criteria address such issues as
intellectual property protection, investment protection, market
access, worker rights, cooperation in administering the
program, and the degree to which the country follows accepted
rules of international trade provided for under the World Trade
Organization. The President may determine, based on the review,
whether to withdraw, suspend, or limit new parity benefits.
Existing authority in the CBERA would continue to withdraw,
suspend, or limit current benefits at any time based on the
criteria under existing laws.
Senate amendment
No provision.
Conference Agreement
No provision.
5. Safeguards
Present law
The import relief procedures and authorities under
sections 201-204 of the Trade Act of 1974 apply to imports from
CBI beneficiary countries, as they do to imports from other
countries. If CBI imports cause serious injury, or threat of
such injury, to the domestic industry producing a like or
directly competitive article, section 213(e) of the CBERA
authorizes the President to suspend CBI 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. The NAFTA also provides for a
``quantitative restriction'' safeguard, which the United States
or Mexico may invoke against ``non-originating'' textile or
apparel goods, using the standard of ``serious damage, or
actual threat thereof.''
House bill
Under H.R. 984, normal safeguard authorities under CBERA
would apply to imports of all products except textiles and
apparel. The NAFTA equivalent safeguard authorities would apply
to imports of textile and apparel products from CBI countries,
except that, under the bill, the United States, if it applied a
safeguard action, would not be obligated to provide equivalent
trade liberalizing compensation to the exporting country.
Senate amendment
Identical provision except that the Senate bill does not
provide a ``quantitative restriction'' safeguard.
Conference agreement
Senate provision.
6. Termination or Withdrawal of Benefits
Present law
The President may withdraw or suspend designation of any
beneficiary country or withdraw, suspend, or limit the
application of duty-free treatment to any article from any
country if he determines that, as a result of changed
circumstances, the country is not meeting criteria set forth in
the statute for beneficiary country designation. The President
must publish at least 30-days advance notice of the proposed
action. The U.S. Trade Representative shall accept written
public comments and hold a public hearing on the proposed
action.
House bill
No provision. But under H.R. 984, all country designation
criteria apply as under the CBERA. The President may withdraw,
suspend, or limit the application of duty-free or preferential
quota treatment to any article if he determines the country or
the product, based on changed circumstances, should be barred
from eligibility. The bill makes no change in the President's
authority to withdraw, suspend, or limit current benefits under
the CBERA at any time.
Senate amendment
The Senate bill provides that the President may withdraw
or suspend the designation of a CBERA beneficiary country or
withdraw, suspend, or limit duty-free treatment if, as a result
of changed circumstances, the country no longer satisfies the
mandatory eligibility criteria or fails adequately to meet one
or more of the discriminatory criteria.
The Senate bill also provides that the President may
withdraw or suspend the designation of CBTEA beneficiary
country or CBTEA benefits if the President determines that, as
result of changed circumstances, the country's performance is
not satisfactory under the CBTEA eligibility criteria.
Conference agreement
The Conference Agreement merges the House and Senate
provisions. The Conferees believe that it is appropriate to
retain broad authority for the President to withdraw, suspend,
or limit benefits under the CBERA and to provide similar
authority for the President with respect to the new trade
benefits under the bill.
d. customs procedures and penalties for transshipment
Present law
Under the 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 bill
No provision, but H.R. 984, as approved by the Committee
on Ways and Means, requires the Secretary of the Treasury to
prescribe regulations that require, as a condition of entry,
that any importer of record claiming preferential tariff
treatment for textile and apparel products under the bill must
comply with requirements similar in all material respects to
the requirements regarding Certificates of Origin contained in
Article 502.1 of 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
textile or apparel products from a partnership 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 2 years.
No provision. H.R. 984 requires the Commissioner of
Customs to conduct a study analyzing the extent to which each
partnership country has: (1) cooperated with the United States
in instances of circumvention or alleged circumvention of
existing quotas on imports of textile and apparel products; and
(2) has taken appropriate measures consistent with its laws and
domestic procedures to prevent transshipment and circumvention
from taking place.
Senate amendment
The Senate bill provides that if the President determines
that an exporter has engaged in transshipment with respect to
textile and apparel products from a beneficiary country, the
President shall deny all enhanced benefits to such exporter and
any successor for a period of 2 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 U.S. from that country
by three times the quantity of articles transshipped.
Conference agreement
The Conference Agreement merges the House and Senate
provisions, but clarifies that the President may only ``triple-
charge'' quotas to the extent that such action is consistent
with WTO rules. The conferees believe these transshipment
provisions will address concerns that increasing trade with the
Caribbean Basin region could result in illegal transshipment of
textile and apparel products through the region.
F. DUTY-FREE TREATMENT FOR CERTAIN BEVERAGES MADE WITH CARIBBEAN RUM
Present law
Rum and beverages made with rum are eligible for duty-
free entry into the United States both under the CBI program
and NAFTA, provided that they meet the CBI or NAFTA rules of
origin and other requirements. When Caribbean rum is processed
in Canada into a rum beverage and the beverage is exported from
Canada into the United States, it is not eligible for duty-free
treatment under either the CBI or NAFTA. Specifically, the
beverage is ineligible for duty-free treatment under CBI,
because it is not shipped directly from a beneficiary country
to the United States as the CBI rules require. The beverage
does not qualify for NAFTA duty-free treatment, because the
processing in Canada is not sufficient to qualify it as a NAFTA
``originating good.''
House bill
No provision, however section 106 of H.R. 984, as
approved by the Committee on Ways and Means, amends the CBERA
to accord duty-free treatment to certain beverages imported
from Canada if: (1) the rum is the growth, product, or
manufacture of a beneficiary country or the U.S. Virgin
Islands; (2) the rum is imported directly into Canada, and the
beverages made from it are imported directly from Canada into
the United States; and (3) the rum accounts for at least 90
percent by volume of the alcoholic content of the beverages.
This provision would ensure that certain rum beverages that
originate in the CBI, but which are processed in Canada, are
not denied duty-free treatment under the CBERA.
Senate amendment
No provision.
Conference agreement
Adopt provisions from H.R. 984.
G. MEETING OF CARIBBEAN TRADE MINISTERS AND USTR
Present law
No provision.
House bill
No provision, however section 107 of H.R. 984, as
approved by the Committee on Ways and Means directs the
President to convene a meeting with the trade ministers of CBI
partnership countries in order to establish a schedule of
regular meetings, to commence as soon as practicable, of the
trade ministers and USTR. The purpose of the meetings is to
advance consultations between the United States and partnership
countries concerning the likely timing and procedures for
initiating negotiations for partnership countries to: (1)
accede to NAFTA; or (2) enter into comprehensive, mutually
advantageous trade agreements with the United States that
contain comparable provisions to NAFTA, and would make
substantial progress in achieving the negotiation objectives
listed in Section 108(b)(5) of Public Law 103-182. This
provision is intended to encourage the United States Trade
Representative to expand efforts to increase trade with
countries in the Caribbean Basin region.
Senate amendment
No provision.
Conference agreement
Adopt provision of H.R. 984, with minor amendments.
TITLE III--NORMAL TRADE RELATIONS
Sec. 301. Permanent Normal Trade Relations for Albania
Present law
Albania's trade status is currently governed by title IV
of the Trade Act of 1974, as amended by the Customs and Trade
Act of 1990 (title IV). Section 402 of title IV (also known as
the Jackson-Vanik amendment) sets forth requirements relating
to freedom of emigration, which must be met or waived by the
President in order for the President to grant nondiscriminatory
normal trade relations (NTR) status to non-market economy
countries. Title IV also requires that a trade agreement remain
in force between the United States and a non-market economy
country receiving NTR status and sets forth minimum provisions
which must be included in such agreement.
Albania, which was first granted NTR status in 1992, was
found to be in full compliance with the Jackson-Vanik freedom
of emigration requirements on December 5, 1997. Since then, NTR
has been granted to Albania subject to semiannual review and
disapproval by a Joint Resolution of Congress.
House bill
No provision.
Senate amendment
Section 701 of the Senate amendment authorizes the
President to determine that title IV should no longer apply to
Albania and to proclaim permanent normal trade relations (PNTR)
for Albania. Application of title IV shall terminate with
respect to Albania on the effective date of the President's
extension of PNTR.
Conference agreement
The House recedes to the Senate.
The conferees note that Albania has concluded a bilateral
investment treaty with the United States and been very
cooperative with NATO and the international community during
and after the Kosova crisis. Albania is also currently
negotiating to join the World Trade Organization.
Sec. 302. Permanent Normal Trading Relations for Kyrgyzstan
Present law
Kyrgyzstan's NTR status is currently governed by title IV
of the Trade Act of 1974, as amended by the Customs and Trade
Act of 1990 (title IV). Section 402 of title IV (also known as
the Jackson-Vanik amendment) sets forth requirements relating
to freedom of emigration, which must be met or waived by the
President in order for the President to grant nondiscriminatory
normal trade relations (NTR) status to non-market economy
countries. Title IV also requires that a trade agreement remain
in force between the United States and a non-market-economy
country receiving NTR status and sets forth minimum provisions
which must be included in such agreement.
Kyrgyzstan, which was granted NTR in 1992, was found to
be in full compliance with the Jackson-Vanik freedom of
emigration requirements on December 5, 1997. Since then, NTR
has been granted to Kyrgyzstan subject to semiannual review,
and disapproval by a Joint Resolution of Congress.
Kyrgyzstan joined the World Trade Organization (WTO) on
December 20, 1998, and the United States was forced to invoke
Article XIII of the Agreement Establishing the World Trade
Organization, which allows the United States to withhold
application of the WTO Agreements with respect to Kyrgyzstan
until the United States extends it permanent normal trade
relations status.
House bill
No provision.
Senate amendment
Section 702 of the Senate amendment authorizes the
President to determine that title IV should no longer apply to
Kyrgyzstan and to proclaim PNTR for Kyrgyzstan. Application of
title IV shall terminate with respect to Kyrgyzstan on the
effective date of the President's extension of PNTR.
Conference agreement
The House recedes to the Senate.
The conferees recognize that title IV of the Trade Act of
1974 has promoted the right to emigrate. Since the dissolution
of the Soviet Union, minority groups have secured the return of
communal properties confiscated during the Soviet period,
thereby facilitating the reemergence of communal organizations
and participation in domestic affairs. Based upon the report on
compliance with title IV, the conferees conclude that
Kyrgyzstan is in compliance with the emigration provisions of
title IV and should be graduated from title IV, thereby
permitting the extension of permanent normal trade relations to
Kyrgyzstan.
With respect to national minorities, the conferees note
that the member states of the Organization for Security and
Cooperation in Europe (OSCE), including the former USSR and its
successor states, have committed to ``adopt, where necessary,
special measures for the purpose of ensuring to persons
belonging to national minorities full equality . . .
individually as well as in community with other members of
their group.''
The conferees note that Kyrgyzstan is the first former
Soviet state to be graduated from Jackson-Vanik and expect that
the graduation of other successor states to the former Soviet
Union will be contingent upon a thorough public assessment of
their laws and policies regarding emigration.
TITLE IV--OTHER TRADE PROVISIONS
Sec. 401. Report on Employment and TAA
Present law
Title II of the Trade Act of 1974, as amended, authorizes
three trade adjustment assistance (TAA) programs for the
purpose of providing assistance to individual workers and firms
that are adversely affected by import competition. Those
programs are: the general TAA program for workers, which
provides training and income support for workers adversely
affected by import competition; the TAA program for firms,
which provides technical assistance to qualifying firms; and
the North American Free Trade Agreement Act (NAFTA)
transitional adjustment assistance program which provides
training and income support for workers who may be adversely
impacted by imports from or production shifts to Canada and/or
Mexico.
House bill
No provision.
Senate amendment
Section 703 of the Senate amendment requires GAO to
submit a report to Congress within 9 months after the date of
enactment offering specific data and recommendations concerning
the effectiveness and efficiency of inter-agency and federal-
state coordination of a number of worker training programs,
including the general TAA program for workers, the NAFTA
Transitional Adjustment Assistance program, the Workforce
Investment Act of 1998 and the federal unemployment insurance
program. GAO would be required to examine the compatibility of
the existing worker retraining/compensation programs, the
effects of foreign trade and shifts in production on workers in
the United States and the impact that the trade effects and
production shifts have had on ``secondary'' workers, i.e.,
those whose jobs are affected indirectly by import competition
because their customers were adversely affected by imports or
production shifts. The amendment responds to the concern that
there are conflicting requirements in the worker retraining
programs, including eligibility requirements and the benefits
available. It also aims at establishing an objective assessment
of the impact of imports and production shifts on job loss in
theUnited States.
Conference agreement
The House recedes to the Senate.
sec. 402. trade adjustment assistance
Present law
Title II of the Trade Act of 1974, as amended, authorizes
three trade adjustment assistance (TAA) programs for the
purpose of providing assistance to individual workers and firms
that are adversely affected by import competition. Those
programs are: the general TAA program for workers, which
provides training and income support for workers adversely
affected by import competition; the TAA program for firms,
which provides technical assistance to qualifying firms; and
the North American Free Trade Agreement Act (NAFTA)
transitional adjustment assistance program which provides
training and income support for workers who may be adversely
impacted by imports from or production shifts to Canada and/or
Mexico. Under the general TAA program for workers, a worker
must be certified by the Secretary of Labor as eligible for
benefits before applying for the assistance. A worker is not
eligible for benefits, however, if they have applied for such
assistance after the expiration of the 2-year period beginning
with the worker's initial certification for benefits by the
Secretary of Labor.
House bill
No provision.
Senate amendment
Section 704 of the Senate amendment provides that a group
of workers who will lose their jobs at a nuclear power plant in
Oregon that is closing would be eligible for TAA benefits,
notwithstanding the fact that their original eligibility for
TAA benefits, as determined by the Labor Department, expired
more than two years ago. In 1993, the Department of Labor
certified workers at a nuclear power plant near Portland,
Oregon, as eligible for TAA benefits as a result of increased
competition from imports of electricity from British Columbia.
The plant was slated to be shut down and has been going through
the decommissioning process since that time. Because of the
length of time it takes to decommission a nuclear power plant,
a number of workers kept their jobs for several years and would
otherwise be ineligible for TAA benefits because of the
expiration of the initial certification. This provision would
reinstate their eligibility for TAA.
Conference agreement
The House recedes to the Senate.
sec. 403. reliquidation of certain nuclear fuel assemblies
Present law
Nuclear fuel rods containing fuel elements are
classifiable under Harmonized Tariff System (HTS) subheading
8401.30.00, which provides for ``fuel elements (cartridges),
non-irradiated, and parts thereof.'' Prior to the adoption of
the HTS in 1989, these fuel elements were classifiable in a
separate duty free provision under the Tariff Schedules of the
United States Annotated (TSUSA).
House bill
No provision.
Senate amendment
Section 708 authorizes the Secretary of the Treasury,
upon a proper request filed no later than 90 days after the
enactment of the Act, to reliquidate as free of duty five
identified entries of nuclear fuel assemblies, and refund
duties paid on each identified entry, including duties paid on
October 4, 1994, referenced in Customs Service Collection
Receipt Number 527006753.
Conference agreement
The House recedes to the Senate, with an amendment to
correct a date of entry.
Sec. 404. reports to the finance and ways and means committees
Present law
Section 607 of the Foreign Operations, Export Financing,
and Related Appropriations Act, 1999 (as contained in section
101(d) of division A of the Omnibus Consolidated and Emergency
Supplemental Appropriations Act, 1999) (112 Stat. 2681-224)
directs the Administration to report to certain Congressional
Committees on various issues. Among these were a certification
by the Treasury Secretary and the Chairman of the Federal
Reserve Board that the International Monetary Fund is requiring
borrowers to liberalize restrictions on trade in goods and
services, consistent with the terms of allinternational trade
agreements of which the borrowing country is a signatory. The Secretary
of the Treasury is also directed to periodically report on the progress
of efforts to reform the architecture of the international monetary
system, with a focus on minimizing disruptions in patterns of trade.
Section 1704(b) of the International Financial
Institutions Act (22 U.S.C. 262r-3(b)) requires the Secretary
of the Treasury to report to certain Congressional Committees
semiannually on financial stabilization programs led by the IMF
in connection with financing from the Exchange Stabilization
Fund. The reports are to include a description of the degree to
which recipient countries are ensuring that no government
subsidies or tax privileges will be provided to bail out
individual corporations, particularly in the semiconductor,
steel, and paper industries. Also, the report is to include a
description of the trade policies of the countries involved,
including any unfair trade practices or adverse effects of the
trade policies on the U.S.
Section 1705(a) of the International Financial
Institutions Act (22 U.S.C. 262r-5(a)) requires the Secretary
of the Treasury to report to certain Congressional committees
annually on the state of the international financial system.
Section 1706(a) of the International Financial
Institutions Act (22 U.S.C. 262r-5(a)) requires the Comptroller
General to report to certain Congressional committees on the
trade policies of IMF borrower countries.
Section 629 of the Treasury and General Government
Appropriations Act, 1999 requires the Administration to report
to certain Congressional committees on the protection of United
States borders against drug traffic.
Although each of these reports is required to address
international trade issues, none are specifically directed to
the Senate Finance or House Ways and Means Committees.
House bill
No provision.
Senate amendment
Sec. 710 of the Senate amendment includes the Finance and
Ways and Means Committees among those Congressional Committees
receiving the certifications and reports on international trade
and international economic issues which are otherwise mandated
by section 607 of the Foreign Operations, Export Financing, and
Related Appropriations Act, 1999 (Pub. L. 105-277; 112 Stat.
2681-224); section 1704(b) of the International Financial
Institutions Act (22 U.S.C. 262r-3(b)); section 1705(a) of the
International Financial Institutions Act (22 U.S.C. 262r-5(a));
section 1706(a) of the International Financial Institutions Act
(22 U.S.C. 262r-5(a)); section 629 of the Treasury and General
Government Appropriations Act, 1999.
Conference agreement
The House recedes to the Senate.
sec. 405. clarification of section 334 of the uruguay round agreements
act
Present law
Section 334 of the Uruguay Round Agreements Act (URAA)
(P.L. 103-465) (1994), commonly referred to as the Breaux-
Cardin rules of origin for textile and apparel, directed the
Secretary of the Treasury to prescribe rules for determining
the origin of textile and apparel products. Under those new
rules, fabrics and certain products (such as scarves and
handkerchiefs) derive their origin in the country where the
fabric is woven or knitted (notwithstanding any further
processing such as dyeing and printing). In addition, the
country of origin of any other textile or apparel product is
the country in which the textile or apparel product is wholly
assembled. Under the multicountry rule, origin is conferred in
the country in which the most important assembly or
manufacturing process occurs, or if origin cannot be determined
in this manner, origin is conferred in the last country in
which important assembly or manufacturing occurs.
House bill
No provision.
Senate amendment
Section 711 would reinstate the rules of origin that
existed prior to URAA for certain products. Specifically, the
amendment would confer origin as the country in which dyeing,
printing, and two or more finishing operations were done on
fabrics classified under the HTS as of silk, cotton, man-made,
and vegetable fibers. This rule would also apply to various
products classified in 18 identified HTS subheadings (mostly
flat products) except for goods made from cotton, wool, or
fiber blends containing 16 percent or more of cotton.
Conference agreement
The House recedes to the Senate.
Prior to the Breaux-Cardin enactment, the rules of origin
permitted the processes of dyeing and printing to confer origin
when accompanied by two or more finishing operations for
certain products. Under the new regulations prescribed by the
Secretary of the Treasury, certain fabrics, silk handkerchiefs
and scarves were considered to originate where the base fabric
was knit and woven, notwithstanding any further processing.
In May 1997, the European Union (EU) requested
consultations in the World Trade Organization (WTO) with the
United States, charging that the changes to the rules of origin
made by URAA violated United States obligations under a number
of agreements: the Agreement on Textiles and Clothing, the
Agreement on Rules of Origin, the Agreement on Technical
Barriers to Trade, and the General Agreement on Tariffs and
Trade. A number of countries requested third-party
participation in the dispute. A ``process-verbal'' was
concluded between the two countries in July 1997, which was
later amended. Formal consultations were held in January 1999.
In August 1999, the United States and the EU agreed to
settle the dispute. A second ``process-verbal'' concluded
between the two countries obligates the U.S. Administration to
submit legislation which, as described above, amends the rule-
of-origin requirements in section 334 of the URAA in order to
allow dyeing, printing, and two or more finishing operations to
confer origin on certain fabrics and goods. In particular, this
dyeing and printing rule would apply to fabrics classified
under the Harmonized Tariff Schedule (HTS) as silk, cotton,
man-made, and vegetable fibers. The rule would also apply to
the various products classified in 18 specific subheadings of
the HTS listed in the bill, except for goods made from cotton,
wool, or fiber blends containing 16 percent or more of cotton.
sec. 406. chief agricultural negotiator
Present law
Currently, a special Trade Negotiator with the rank of
Ambassador serves as the Chief Negotiator for agricultural
trade in the Office of the United States Trade Representative.
The position is not established in statute.
House bill
No provision.
Senate amendment
Section 712 amends section 141 of the Trade Act of 1974
((19 U.S.C.) 2171) to establish in statute within the Office of
the United States Trade Representative a Chief Agricultural
Negotiator with the rank of Ambassador who shall be appointed
by the President, by and with the advice and consent of the
Senate. As an exercise of the rulemaking power of the Senate,
any nomination of a Deputy United States Trade Representative
or the Chief Agricultural Negotiator submitted to the Senate
for its advice and consent, and referred to a committee, shall
be referred to the Committee on Finance.
The principal function of the Chief Agricultural
Negotiator shall be to conduct trade negotiations, enforce
trade agreements relating to United States agricultural
products and service, and be a vigorous advocate on behalf of
United States agricultural interests.
Conference agreement
The House recedes to the Senate.
sec. 407. revision of retaliation list or other remedial action
Present law
No provision.
House bill
No provision.
Senate amendment
Section 713 of the Senate amendment amends the Trade Act
of 1974 to require the United States Trade Representative
(USTR) to make periodic revisions of retaliation lists 120 days
from the date the retaliation list is made and every 180 days
thereafter. The purpose of this provision is to facilitate
efforts by the USTR to enforce the rights of the United States
in instances where another World Trade Organization (WTO)
member fails to comply with the results of a dispute settlement
proceeding.
Conference agreement
The House recedes to the Senate. The conferees added
language that requires the USTR to include on any retaliation
list reciprocal goods of the industries affected by the failure
of the World Trade Organization member to implement the
decision of the WTO. This new provision does not apply when the
preliminary or initial retaliation list does not include any
reciprocal goods of the industries affected.
The conferees are of the view that compliance with
dispute settlement panel and Appellate Body decisions is
essential to the successful operation of the WTO. This
objective has been threatened by non-compliance in some recent
cases brought by the United States--particularly in disputes
with the European Union involving beef and bananas.
It is the view of the Conferees that this provision
affirms authority already available to the U.S. Trade
Representative under the Trade Act of 1974. It is further the
view of the conferees that this provision is consistent with
the United States international obligations under the Dispute
Settlement Understanding of the WTO, and that the USTR would
retain ample discretion and authority to ensure that
retaliation implemented by the United States remained within
the levels authorized by the WTO. As the provision makes clear,
actions taken by the USTR are intended to be structured
carefully and to effectuate substantial changes that will
maximize the likelihood of compliance by the losing member. The
Ways and Means and Finance Committees will monitor those
actions to ensure that changes are made consistent with that
intention.
With regard to pending cases in which the United States
has taken retaliatory measures, and in which the initial
timetable for action laid out in the provision has already
passed, the conferees expect that the USTR will undertake the
initial action required by the provision no later than 30 days
after the enactment of the law, and will undertake any
subsequently required action every 180 days thereafter. It is
also the sense of the conferees that USTR should vigorously
defend the authority granted under the statute with its trading
partners.
Sec. 408. Report on TAA for Agricultural Commodity Producers
Present law
Title II of the Trade Act of 1974, as amended, authorizes
three trade adjustment assistance (TAA) programs for the
purpose of providing assistance to individual workers and firms
that are adversely affected by import competition. Those
programs are: the general TAA program for workers, which
provides training and income support for workers adversely
affected by import competition; the TAA program for firms,
which provides technical assistance to qualifying firms; and
the North American Free Trade Agreement Act (NAFTA)
transitional adjustment assistance program which provides
training and income support for workers who may be adversely
impacted by imports from or production shifts to Canada and/or
Mexico.
House bill
No provision.
Senate amendment
Section 715 of the Senate amendment requires that the
Secretary of Labor, not later than 4 months after enactment of
the provision and in consultation with the Secretary of
Agriculture and Secretary of Commerce, shall submit to the
Committee on Ways and Means of the House of Representatives and
the Committee on Finance of the Senate a report that examines
the applicability to farmers of trade adjustment assistance
programs under title II of the Trade Act of 1974. The report
will also set forth recommendations to improve the operation of
those programs as they apply to farmers or to establish a new
trade adjustment assistance program for farmers.
Conference agreement
The House recedes to the Senate.
sec. 409. agriculture trade negotiating objectives and consultations
with congress
Present law
No provision.
House bill
No provision.
Senate amendment
Section 723 of the Senate amendment consists of three
sections. The first section lists findings of the Congress. The
second section contains the specific agricultural negotiating
objectives of the United States for the World Trade
Organization's agriculture negotiations mandated by the Uruguay
Round. The third section mandates consultations with Congress
at specific points during the negotiations.
Conference agreement
The House recedes to the Senate.
Sec. 410. Entry Procedures for Foreign Trade Zone Operations
Present law
Section 484 of the Tariff Act of 1930 (19 U.S.C. 1484)
sets forth the procedures for the entry of merchandise imported
into the United States. Under section 484, the Customs Service
has permitted a limited weekly entry procedure for foreign
trade zones (FTZ) since May 12, 1986 (as authorized by T.D. 86-
16, 51 Fed. Reg. 5040). This procedure has been limited to
merchandise which is manufactured or changed into its final
form just prior to its transfer from the zone. Section 637 of
the Customs Modernization Act (included as title VI of the
North American Free Trade Agreement Implementation Act, Pub. L.
103-182, 107 Stat. 2057) provided the Customs Service with
additional statutory support for the weekly entry procedure.
House bill
No provision.
Senate amendment
Sec. 302 of the Senate amendment amends Section 484 of
the Tariff Act of 1930 (19 U.S.C. 1484) to allow merchandise
withdrawn from a foreign-trade zone during a week (i.e., any 7
calendar day period) to be the subject of a single entry, at
the option of the zone operator or user. Such an entry is
treated under the new provision as a single entry or release of
merchandise for purposes of assessment of the merchandise
processing fee of 19 U.S.C. 8c(a)(9)(A) and thus may not be
assessed such fee in excess of the fee limitations provided for
under 19 U.S.C. 58c(b)(8)(A)(i). All other pertinent exceptions
and exclusions from the merchandise processing fee would also
apply, as appropriate. The amendment establishes a new section
19 U.S.C. 1484(a)(3). The provision is self executing and
accordingly does not require the issuance of implementing
regulations by the Secretary of the Treasury in order for it to
go into effect.
The net effect of the provision is to require Customs to
expand the weekly entry system (which currently is only
available to certain manufactured goods) to permit FTZ
operators and users to use a weekly entry system, under certain
limitations, if they so choose. This expanded procedure allows
for goods stored in a FTZ for the purpose of warehouse and
distribution to be removed from the zone under a weekly Customs
entry process. This provision would also mean that the
merchandise processing fee (MPF) that Customs collects would be
collected on the basis of that single weekly entry at the same
rate applicable to any other single entry of such merchandise
into the Customs territory of the United States.
Conference agreement
The House recedes to the Senate.
While the Customs Service issued proposed regulations to
expand the weekly entry system (62 Fed. Reg. 12129, March 14,
1997) consistent with Congress' intent as set out in the
Customs Modernization Act, those regulations were never
finalized. The conferees intend the new provision to remedy
that failure by requiring such treatment as a matter of law.
The new provision is not intended to qualify, limit or
restrict any foreign-trade zone weekly entry procedures now in
effect. Rather, it is intended to broaden the availability of
weekly entry procedures to all zones, including general purpose
zones and special purpose subzones, and to all zone operations
and processes authorized by law. Consistent with the Foreign
Trade Zones Act, the new procedure is available for merchandise
of every description, except such as is prohibited by law,
regardless of whether such merchandise is of the same class,
type or category or of different classes, types, and
categories.
The conferees are mindful of the revenue impact of this
expanded procedure, but the conferees also believe that,
consistent with the notion of a user fee, the MPF is not a
revenue raiser for Customs expenses, but instead is intended to
cover the cost of the service U.S. Customs provides.
The conferees also believe that the Customs Service pilot
procedure to expand the weekly entry filing procedures to
activities other than manufacturing operations is consistent
with Congress' intent relating to periodic entry for weekly
entries formerchandise from general purpose foreign trade
zones, as set out in the Mod Act. Section 637 of the Mod Act, which
amended 19 U.S.C. 1484 concerning the entry of merchandise generally,
among other things, provides further statutory support for the weekly
entry procedure. Part 1, page 136 of the Ways and Means NAFTA
Implementation Act Report (103-361) reflects the intent of Congress.
The report states, ``in developing the regulations for periodic entry,
the Committee intends that Customs will allow for weekly and monthly
entries for merchandise shipments from general purpose foreign trade
zones and subzones.''
Sec. 411. Goods Made With Forced or Indentured Child Labor
Present law
Section 307 of the Tariff Act of 1930 prohibits the
importation of articles made by convict labor or/and forced
labor or/and indentured labor under penal sanctions.
House bill
No provision.
Senate amendment
Section 707 of the Senate bill amends section 307 of the
Tariff Act of 1930 to clarify that the ban on articles made
with forced or/and indentured labor includes those articles
made with forced or/and indentured child labor.
Conference agreement
The House recedes to Senate.
Sec. 412. Worst Forms of Child Labor
Present law
No provision.
House bill
No provision.
Senate amendment
Section 722 provides that no benefits under the Act (with
respect to the provisions covering sub-Saharan Africa, CBI, or
GSP) shall be granted to countries that fail to meet and
effectively enforce the standards established by ILO Convention
No. 182 on the Worst Forms of Child Labor.
Conference agreement
The conference agreement adds a new eligibility criterion
to the Generalized System of Preferences so that the President
shall not designate a country for benefits if it has not
implemented its obligations to eliminate the worst forms of
child labor. The conference agreement adopts the GSP program's
standard for purposes of the eligibility criteria applicable to
the additional trade benefits extended to African beneficiary
countries. The conferees intend that the GSP standard,
including the provision with respect to implementation of
obligations to eliminate the worst forms of child labor, apply
to eligibility for those additional benefits.
The conferees note the tremendous progress on the
elimination of the worst forms of child labor accomplished in
the International Labor Organization through the unanimous
approval of ILO Convention No. 182. The conferees believe that
the practices described in the Convention, as agreed by all ILO
members, represent heinous activities that should not be
tolerated. For this reason the conferees are willing for the
first time to include an eligibility criterion relating to
whether a country has implemented its obligations to eliminate
the worst forms of child labor. The conferees recognize that
the convention represents the international standard on the
worst forms of child labor and have accordingly defined the
worst forms of child labor using the definition in ILO
Convention No. 182.
It is the expectation of the conferees that the
beneficiaries of the Africa, CBI and GSP programs will join the
United States in ratifying ILO Convention No. 182 as soon as
possible and promptly come into compliance with the procedural
requirements of that convention including the submission to the
ILO of the National Action Plans required by the convention,
the designation of a competent authority responsible for the
implementation of the convention and the submission of annual
reports to the ILO identifying steps taken to implement the
provisions of the convention.
In determining whether a country is complying with the
terms of section 502(b)(2)(G) with respect to GSP (and related
provisions with respect to benefits for sub-Saharan Africa),
the conferees intend that the President consider (1) whether
the country has adequate laws and regulations proscribing the
worst forms of child labor; (2) whether the country has
adequate laws and regulations for the implementation and
enforcement of such measures; (3) whether the country has
established formal institutional mechanisms to investigate and
address complaints relating to allegations of the worst forms
of child labor; (4) whether social programs exist in the
country to prevent the engagement of children in the worst
forms of child labor, and to assist with the removal of
children engaged in the worst forms of child labor; (5) whether
the country has a comprehensive policy for the elimination of
the worst forms of child labor; and (6) whether the country is
making continual progress toward eliminating the worst forms of
child labor.
The conferees intend that the phrase ``work which, by its
nature or the circumstances in which it is carried out, is
likely to harm the health, safety or morals of children'' be
defined as provided in Article II of Recommendation No. 190,
which accompanies ILO Convention No. 182. Accordingly, work
that is ``likely to harm the health, safety or morals of
children'' includes work that exposes children to physical,
psychological, or sexual abuse; work underground, under water,
at dangerous heights or in confined spaces; work with dangerous
machinery, equipment or tools, or work under circumstances
which involve the manual handling or transport of heavy loads;
work in an unhealthy environment that exposes children to
hazardous substances, agents or processes, or to temperatures,
noise levels, or vibrations damaging to their health; and work
under particularly difficult conditions such as for long hours,
during the night or under conditions where children are
unreasonably confined to the premises of the employer.
The conferees further intend that the phrase ``work
which, by its nature or the circumstances in which it is
carried out, is likely to harm the health, safety or morals of
children'' be interpreted in a manner consistent with the
intent of Article 4 of ILO Convention No. 182, which states
that such work shall be determined by national laws or
regulations or by the competent authority in the country
involved. In addition, the conferees intend that the phrase
generally not apply to situations in which children work for
their parents on bona fide family farms or holdings.
The conferees expect that the Secretary of Labor, in
preparing the report required under section 504, will invite
public comment to assist in the preparation of his or her
findings to be incorporated in each annual report. The
conferees expect that the President, in making determinations
under section 504(d) with respect to the withdrawal, suspension
or limitation of benefits, will take into account the findings
of the Secretary of Labor.
TITLE V--IMPORTS OF CERTAIN WOOL ARTICLES
Present law
Under current law, worsted wool fabric imported into the
United States is subject to tariffs of 29.4 percent, whereas
apparel articles made from such fabric, such as men's suits,
may be imported at a tariff rate of 19.3 percent. By applying a
higher tariff to the input product, the tariff schedule
provides an incentive for the importation of the more-labor
intensive and higher-value-added apparel item. That inversion
has been compounded by the reduction of tariffs applicable to
men's wool suits under U.S. free trade agreements, with the
effect that U.S. suit-makers face a still more considerable
competitive disadvantage relative to imports of suits from
Canada and Mexico because the difference in tariffs applicable
to worsted wool fabric relative to the zero rate of duty paid
on imports of suits is the full 19.3 percent of the tariff
applicable to fabric imported by such manufacturers.
House bill
No provision.
Senate amendment
Section 721 of the Senate amendment expresses the sense
of the Senate that United States trade policy should, taking
into account the conditions among U.S. producers, place a
priority on the elimination of tariff inversions that undermine
the competitiveness of United States consuming industries.
Conference agreement
The conferees agree to reduce tariffs on worsted wool
fabric intended for use in the manufacture of men's suits,
suit-type jackets, and trousers in order to limit the tariff
inversion U.S. suit-makers face in the purchase of such fabric.
For worsted wool fabric containing greater than or equal to 85
percent wool intended for use in the suit market made from
fiber averaging 18.5 micron or less in diameter, the applicable
tariff would be reduced from the current U.S. rate on such
fabric to a level equivalent to the current Canadian ``most
favored nation'' (``MFN'') rate applicable to imports of such
fabric, to a quantity equaling 1.5 million square meter
equivalents each year. For worsted wool fabric of the type used
in the manufacture of men's suits made from fiber greater than
18.5 micron, the applicable tariff would be reduced from the
current U.S. rate on such fabric to the current U.S. rate on
worsted wool suit-type jackets, up to a quantity equaling 2.5
million square meterequivalents each year. The conference
agreement suspends the current U.S. tariff on worsted wool yarn
containing greater than or equal to 85 percent wool of average fiber
diameter of 18.5 micron or finer and on wool fiber and wool top made
from wool fiber of an average diameter of 18.5 micron and finer from
the current U.S. normal trade relations (NTR) rate to zero.
The conference agreement also authorizes the President to
grant additional tariff relief on wool fabric of up to 1
million square meter equivalents per year for worsted wool
fabric from fiber of 18.5 micron and finer and up to 1 million
square meter equivalents per year for worsted wool fabric from
fiber greater than 18.5 micron. Expanding the quantity of
fabric to which the tariff reductions would apply would depend
each year on the President's determination with respect to
then-current market conditions in the United States markets for
suits, fabric, yarn and fiber. In particular, the President
should focus on growth in production and the relative
competitiveness and health of both the suit-making and fabric
manufacturing industries in the United States.
Under the conference agreement, the President is obliged
to monitor market conditions in the United States and, toward
that end, establish statistical suffixes in the Harmonized
Tariff Schedule sufficient for the collection of certain data
on imports of worsted wool fabric and apparel. The President
has residual authority to reduce the applicable tariffs on
imports of worsted wool fabric in order to take into account
any staged reductions in the U.S. tariff rate applicable to
worsted wool suits and the Canadian tariff rate applicable to
worsted wool fabric that serve as benchmark rates under the
conference report.
The conference report requires the President or his or
her designee to allocate the available tariff relief on worsted
wool fabric among manufacturers of the apparel items identified
in the agreement based on historical production. The same
principle would apply to the President's allocation of other
tariff relief provided under these provisions of the conference
agreement.
The conference agreement also provides for the refund of
certain duties in each of three succeeding years on imports of
worsted wool fabric used in men's and boys' suits, suit-type
jackets and trousers, worsted wool yarn, wool fiber and wool
top. In each instance, a U.S. manufacturer of a downstream
product would be eligible for a refund of duties currently paid
on certain inputs up to an amount that is one-third of the
duties actually paid by such importing U.S. manufacturer on
such items in calendar year 1999. In the case of worsted wool
fabric, for example, a U.S. suit-maker would be eligible to
claim a refund during calendar year 2000 for one-third of the
duties paid on such fabric during calendar year 1999. The same
refund schedule applies to a fabric-maker's importation of wool
yarn, wool fiber, and wool top.
The conference agreement creates a fund for research and
market development for American wool-growers that would assist
in disseminating information that would help the industry
improve the quality of the fiber provided and its production
methods. The conference report sets aside duties collected
under the HTS chapter relating to the products covered by these
provisions--wool fiber and top and worsted wool yarn and fabric
up to an amount of $2.25 million per year in each fiscal year
from 2000-2003. It is the intent of the conferees that the
United States Department of Agriculture shall designate an
experienced cooperator such as the American Wool Council as the
trust fund's representative for the purposes of this provision.
The conferees direct the President to determine what
mechanisms are available under the North American Free Trade
Agreement (NAFTA), the World Trade Organization and U.S.
domestic law to alleviate the serious injury to the U.S. wool
suit and fabric industries as a result of the Canadian wool
tariff preference level under the NAFTA. The President shall
recommend that the U.S. Trade Representative undertake the
appropriate steps necessary to help remedy the adverse effect
on this sector's competitiveness, and shall report his
recommendations to the Committee on Ways and Means of the House
of Representatives and the Senate Committee on Finance by
January 1, 2001.
TITLE VI--REVENUE PROVISIONS
A. Limitation on the Use of Non-Accrual Experience Method of Accounting
(sec. 21 of the House bill, sec. 504 of the Senate amendment, and sec.
448 of the Code)
Present law
An accrual method taxpayer generally must recognize
income when all the events have occurred that fix the right to
receive the income and the amount of the income can be
determined with reasonable accuracy. An accrual method taxpayer
may deduct the amount of any receivable that was previously
included in income that becomes worthless during the year.
Accrual method taxpayers are not required to include in
income amounts to be received for the performance of services
which, on the basis of experience, will not be collected (the
``non-accrual experience method''). The availability of this
method is conditioned on the taxpayer not charging interest or
a penalty for failure to timely pay the amount charged. The
Secretary of the Treasury has published temporary regulations
\1\ requiring the use of a formula comparing receivables not
collected to total receivables earned during the testing period
in determining the portion of the amount which, on the basis of
experience, will not be collected. The temporary regulations
provide that no other method or formula may be used by a
taxpayer in determining the uncollectible amounts under this
subsection.
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\1\ Treas. Reg. sec. 1.448-2T.
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A cash method taxpayer is not required to include an
amount in income until it is received. A taxpayer generally may
not use the cash method if purchase, production, or sale of
merchandise is an income producing factor. Such taxpayers
generally are required to keep inventories and use an accrual
method of accounting. In addition, corporations (and
partnerships with corporate partners) generally may not use the
cash method of accounting if their average annual gross
receipts exceed $5 million. An exception to this $5 million
rule is provided for qualified personal service corporations. A
qualified personal service corporation is a corporation (1)
substantially all of whose activities involve the performance
of services in the fields of health, law, engineering,
architecture, accounting, actuarial science, performing arts or
consulting and (2) substantially all of the stock of which is
owned by current or former employees performing such services,
their estates or heirs. Qualified personal service corporations
are allowed to use the cash method without regard to whether
their average annual gross receipts exceed $5 million.
House bill
The House bill provides that the non-accrual experience
method will be available only for amounts to be received for
the performance of qualified personal services. Amounts to be
received for the performance of all other services will be
subject to the general rule regarding inclusion in income.
Qualified personal services are personal services in the fields
of health, law, engineering, architecture, accounting,
actuarial science, performing arts or consulting. As under
present law, the availability of the method is conditioned on
the taxpayer not charging interest or a penalty for failure to
timely pay the amount.
Effective date.--The provision of the House bill is
effective for taxable years ending after the date of enactment.
Any change in the taxpayer's method of accounting necessitated
as a result of the proposal will be treated as a voluntary
change initiated by the taxpayer with the consent of the
Secretary of the Treasury. Any required section 481(a)
adjustment is to be taken into account over a period not to
exceed four years under principles consistent with those in
Rev. Proc. 99-49.\2\
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\2\ 1999-52 I.R.B. 725.
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Senate amendment
The Senate amendment is the same as the House bill.
Conference agreement
The conference agreement does not include the House bill
or the Senate amendment provision.
B. Add Certain Vaccines Against Streptococcus Pneumoniae to the List of
Taxable Vaccines
(sec. 22 of the house bill and secs. 4131 and 4132 of the code)
Present law
A manufacturer's excise tax is imposed at the rate of 75
cents per dose (sec. 4131) on the following vaccines
recommended for routine administration to children: diphtheria,
pertussis, tetanus, measles, mumps, rubella, polio, HIB
(haemophilus influenza type B), hepatitis B, varicella (chicken
pox), and rotavirus gastroenteritis. In addition, the Ticket to
Work and Work Incentives Improvement Act of 1999 (Pub. L. No.
106-170, December 17, 1999) added any conjugate vaccine against
streptococcus pneumoniae to the list of taxable vaccines. The
tax applied to any vaccine that is a combination of vaccine
components equals 75 cents times the number of components in
the combined vaccine.
Amounts equal to net revenues from this excise tax are
deposited in the Vaccine Injury Compensation Trust Fund
(``Vaccine Trust Fund'') to finance compensation awards under
the Federal Vaccine Injury Compensation Program for individuals
who suffer certain injuries following administration of the
taxable vaccines. This program provides a substitute Federal,
``no fault'' insurance system for the State-law tort and
private liability insurance systems otherwise applicable to
vaccine manufacturers and physicians. All persons immunized
after September 30, 1988, with covered vaccines must pursue
compensation under this Federal program before bringing civil
tort actions under State law.
House bill
The House bill would add any conjugate vaccine against
streptococcus pneumoniae to the list of taxable vaccines.
Senate amendment
No provision.
Conference agreement
No provision. However, the provision was enacted in the
Ticket to Work and Work Incentives Improvement Act of 1999.
C. Modification of Installment Method and Repeal of Installment Method
for Accrual Method Taxpayers
(sec. 501 of the Senate Amendment and secs. 453 and 453a of the code)
Present law
The installment method of accounting allows a taxpayer to
defer the recognition of income from the disposition of certain
property until payment is received. Sales to customers in the
ordinary course of business are not eligible for the
installment method, except for sales of property that is used
or produced in the trade or business of farming and sales of
timeshares and residential lots if an election to pay interest
under section 453(l)(2)(B)) is made. The Ticket to Work and
Work Incentives Improvement Act of 1999 prohibits the use of
the installment method for a transaction that would otherwise
be required to be reported using the accrual method of
accounting, effective for dispositions occurring on or after
December 17, 1999.
A pledge rule provides that if an installment obligation
is pledged as security for any indebtedness, the net proceeds
\3\ of such indebtedness are treated as a payment on the
obligation, triggering the recognition of income. Actual
payments received on the installment obligation subsequent to
the receipt of the loan proceeds are not taken into account
until such subsequent payments exceed the loan proceeds that
were treated as payments. The pledge rule does not apply to
sales of property used or produced in the trade or business of
farming, to sales of timeshares and residential lots where the
taxpayer elects to pay interest under section 453(l)(2)(B), or
to dispositions where the sales price does not exceed $150,000.
The Ticket to Work and Work Incentives Improvement Act of 1999
provides that the right to satisfy a loan with an installment
obligation will be treated as a pledge of the installment
obligation, effective for dispositions occurring on or after
December 17, 1999.
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\3\ The net proceeds equal the gross loan proceeds less the direct
expenses of obtaining the loan.
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House bill
No provision.
Senate amendment
The Senate amendment contains provisions prohibiting the
use of the installment method for a transaction that would
otherwise be required to be reported using the accrual method
of accounting and expanding the pledge rule.
Conference agreement
No provision. The provisions in the Senate amendment were
enacted in the Ticket to Work and Work Incentives Improvement
Act of 1999.
D. Impose Limitation on Prefunding of Certain Employee Benefits
(sec. 502 of the senate amendment and secs. 419a and 4976 of the code)
Present law
Under present law, contributions to a welfare benefit
fund generally are deductible when paid, but only to the extent
permitted under the rules of sections 419 and 419A. The amount
of an employer's deduction in any year for contributions to a
welfare benefit fund cannot exceed the fund's qualified cost
for the year minus the fund's after-tax income for the year.
With certain exceptions, the term qualified cost means the sum
of (1) the amount that would be deductible for benefits
provided during the year if the employer paid them directly and
was on the cash method of accounting, and (2) within limits,
the amount of any addition to a qualified asset account for the
year. A qualified asset account includes any account consisting
of assets set aside for the payment of disability benefits,
medical benefits, supplemental unemployment compensation or
severance pay benefits, or life insurance benefits. The account
limit for a qualified asset account for a taxable year is
generally the amount reasonably and actuarially necessary to
fund claims incurred but unpaid (as of the close of the taxable
year) for benefits with respect to which the account is
maintained and the administrative costs incurred with respect
to those claims. Specific additional reserves are allowed for
future provisions of post-retirement medical and life insurance
benefits.
The deduction limits of sections 419 and 419A for
contributions to welfare benefit funds do not apply in the case
of certain 10-or-more employer plans. A plan is a 10-or-more
employer plan if (1) more than one employer contributes to it,
and (2) no employer is normally required to contribute more
than 10 percent of the total contributions contributed under
the plan by all employers. The exception is not available if
the plan maintains experience-rating arrangements with respect
to individual employers.
If any portion of a welfare benefit fund reverts to the
benefit of an employer, an excise tax equal to 100 percent of
the reversion is imposed on the employer.
House bill
No provision.
Senate amendment
The Senate amendment limits the present-law exception to
the deduction limit for 10-or-more employer plans to plans that
provide only medical benefits, disability benefits, and
qualifying group-term life insurance benefits to plan
beneficiaries. The legislative history provides that it is
intended that a plan will not be treated as failing to provide
only medical benefits, disability benefits, and qualifying
group-term life insurance benefits to plan beneficiaries merely
because the plan provides certain de minimis ancillary benefits
in addition to medical, disability, and qualifying group-term
life insurance benefits (e.g., accidental death and
dismemberment insurance, group-term life insurance coverage for
dependents and directors, business travel insurance, and 24-
hour accident insurance). Such ancillary benefits are
considered de minimis only if the total premiums for all such
insurance coverages for the year do not exceed 2 percent of the
total contributions to the plan for the year for all employers.
Of course, any benefits provided are includible in income
unless expressly excluded under a specific provision under the
Code.
The legislative history also provides that, for purposes
of this provision, qualifying group-term life insurance
benefits do not include any arrangements that permit a plan
beneficiary to directly or indirectly access all or part of the
account value of any life insurance contract, whether through a
policy loan, a partial or complete surrender of the policy, or
otherwise. The legislative history provides that it is intended
that qualifying group-term life insurance benefits do not
include any arrangement whereby a plan beneficiary may receive
a policy without a stated account value that has the potential
to give rise to an account value whether through the exchange
of such policy for another policy that would have an account
value or otherwise.
Under the Senate amendment, the 10-or-more employer plan
exception is no longer available with respect to plans that
provide supplemental unemployment compensation, severance pay,
or life insurance (other than qualifying group-term life
insurance) benefits. Thus, the generally applicable deduction
limits (sections 419 and 419A) apply to plans providing these
benefits.
In addition, if any portion of a welfare benefit fund
attributable to contributions that are deductible pursuant to
the 10-or-more employer exception (and earnings thereon) is
used for a purpose other than for providing medical benefits,
disability benefits, or qualifying group-term life insurance
benefits to plan beneficiaries such portion is treated as
reverting to the benefit of the employers maintaining the fund
and is subject to the imposition of the 100-percent excise
tax.\4\ Thus, for example, cash payments to employees upon
termination of the fund, and loans or other distributions to
the employee or employer, would be treated as giving rise to a
reversion that is subject to the excise tax.
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\4\ For purposes of the provision, medical benefits, disability
benefits, and qualifying group-term life insurance benefits include de
minimus ancillary benefits as described above.
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The legislative history indicates that no inference is
intended with respect to the validity of any 10-or-more
employer arrangement under the provisions of present law.
Effective date.--The Senate amendment is effective with
respect to contributions paid or accrued on or after June 9,
1999, in taxable years ending after such date.
Conference agreement
No provision.
E. Treatment of Gain From Constructive Ownership Transactions
(sec. 503 of the senate amendment and sec. 1260 of the code)
Present law
The maximum individual income tax rate on ordinary income
and short-term capital gain is 39.6 percent, while the maximum
individual income tax rate on long-term capital gain generally
is 20 percent. Long-term capital gain means gain from the sale
or exchange of a capital asset held more than one year. For
this purpose, gain from the termination of a right with respect
to property which would be a capital asset in the hands of the
taxpayer is treated as capital gain.\5\
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\5\ Section 1234A, as amended by the Taxpayer Relief Act of 1997.
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A pass-thru entity (such as a partnership) generally is
not subject to Federal income tax. Rather, each owner includes
its share of a pass-thru entity's income, gain, loss, deduction
or credit in its taxable income. Generally, the character of
the item is determined at the entity level and flows through to
the owners.
Investors may enter into forward contracts, notional
principal contracts, and other similar arrangements with
respect to property that provides the investor with the same or
similar economic benefits as owning the property directly but
with potentially different tax consequences as to the character
and timing of any gain. The Ticket to Work and Work Incentives
Improvement Act of 1999 limits the amount of long-term capital
gain a taxpayer can recognize from certain ``constructive
ownership transactions'' any excess gain is treated as ordinary
income.
House bill
No provision.
Senate amendment
The Senate amendment provision limits the amount of long-
term capital gain a taxpayer can recognize from certain
constructive ownership transactions with respect to certain
financial assets. This provision was enacted in the Ticket to
Work and Work Incentives Improvement Act of 1999.
Conference agreement
No provision. However, the provision was enacted in the
Ticket to Work and Work Incentives Improvement Act of 1999.
F. Require Consistent Treatment and Provide Basis Allocation Rules for
Transfers of Intangibles in Certain Nonrecognition Transactions
(sec. 505 of the senate amendment and secs. 351 and 721 of the code)
Present law
Generally, no gain or loss is recognized if one or more
persons transfer property to a corporation solely in exchange
for stock in the corporation and, immediately after the
exchange such person or persons are in control of the
corporation. Similarly, no gain or loss is recognized in the
case of a contribution of property in exchange for a
partnership interest. Neither the Internal Revenue Code nor the
regulations provide the meaning of the requirement that a
person ``transfer property'' in exchange for stock (or a
partnership interest). The Internal Revenue Service interprets
the requirement consistent with the ``sale or other disposition
of property'' language in the context of a taxable disposition
of property. See, e.g., Rev. Rul. 69-156, 1969-1 C.B. 101.
Thus, a transfer of less than ``all substantial rights'' to use
property will not qualify as a tax-free exchange and stock
received will be treated as payments for the use of property
rather than for the property itself. These amounts are
characterized as ordinary income. However, the Claims Court has
rejected the Service's position and held that the transfer of a
nonexclusive license to use a patent (or any transfer of
``something of value'') could be a ``transfer'' of ``property''
for purposes of the nonrecognition provision. See E.I. DuPont
de Nemours & Co. v. U.S., 471 F.2d 1211 (Ct. Cl. 1973).
House bill
No provision.
Senate amendment
The Senate amendment treats a transfer of an interest in
intangible property constituting less than all of the
substantial rights of the transferor in the property as a
transfer of property for purposes of the nonrecognition
provisions regarding transfers of property to controlled
corporations and partnerships. In the case of a transfer of
less than all of the substantial rights, the transferor is
required to allocate the basis of the intangible between the
retained rights and the transferred rights based upon their
respective fair market values.
No inference is intended as to the treatment of these or
similar transactions prior to the effective date.
Effective date.--The provision is effective for transfers
on or after the date of enactment.
Conference agreement
No provision.
G. Increase Elective Withholding Rate for Nonperiodic Distributions
From Deferred Compensation Plans
(sec. 506 of the Senate amendment and sec. 3405 of the Code)
Present law
Present law provides that income tax withholding is
required on designated distributions from employer deferred
compensation plans (whether or not such plans are tax
qualified), individual retirement arrangements (``IRAs''), and
commercial annuities unless the payee elects not to have
withholding apply. A designated distribution does not include
any payment (1) that is wages, (2) the portion of which it is
reasonable to believe is not includible in gross income, (3)
that is subject to withholding of tax on nonresident aliens and
foreign corporations (or would be subject to such withholding
but for a tax treaty), or (4) that is a dividend paid on
certain employer securities (as defined in sec. 404(k)(2)).
Tax is generally withheld on the taxable portion of any
periodic payment as if the payment is wages to the payee. A
periodic payment is a designated distribution that is an
annuity or similar periodic payment.
In the case of a nonperiodic distribution, tax generally
is withheld at a flat 10-percent rate unless the payee makes an
election not to have withholding apply. A nonperiodic
distribution is any distribution that is not a periodic
distribution. Under current administrative rules, an individual
receiving an nonperiodic distribution can designate an amount
to be withheld in addition to the 10-percent otherwise required
to be withheld.
Under present law, in the case of a nonperiodic
distribution that is an eligible rollover distribution, tax is
withheld at a 20-percent rate unless the payee elects to have
the distribution rolled directly over to an eligible retirement
plan (i.e., an IRA, a qualified plan (sec. 401(a)) that is a
defined contribution plan permitting direct deposits of
rollover contributions, or a qualified annuity plan (sec.
403(a)). In general, an eligible rollover distribution includes
any distribution to an employee of all or any portion of the
balance to the credit of the employee in a qualified plan or
qualified annuity plan. An eligible rollover distribution does
not include any distribution that is part of a series of
substantially equal periodic payments made (1) for the life (or
life expectancy) of the employee or for the joint lives (or
joint life expectancies) of the employee and the employee's
designated beneficiary, or (2) over a specified period of 10
years or more. An eligible rollover distribution also does not
include any distribution required under the minimum
distribution rules of section 401(a)(9), hardship distributions
from section 401(k) plans, or the portion of a distribution
that is not includible in income. The payee of an eligible
rollover distribution can only elect not to have withholding
apply by making the direct rollover election.
House bill
H. Provisions Relating to Real Estate Investment Trusts (``REITS'')
(secs. 610-622 of the Senate amendment and secs. 852, 856, and 857 of
the Code)
Present law
In general, a real estate investment trust (``REIT'') is
an entity that receives most of its income from passive real
estate related investments and that receives pass-through
treatment for income that is distributed to shareholders. If an
electing entity meets the qualifications for REIT status, the
portion of its income that is distributed to the investors each
year generally is taxed to the investors without being
subjected to tax at the REIT level.
A REIT must satisfy a number of tests on a year-by-year
basis that relate to the entity's: (1) organizational
structure; (2) source of income; (3) nature of assets; and (4)
distribution of income.
Under the organizational structure test, except for the
first taxable year for which an entity elects to be a REIT, the
beneficial ownership of the entity must be held by 100 or more
persons. Generally, no more than 50 percent of the value of the
REIT's stock can be owned by five or fewer individuals during
the last half of the taxable year. Certain attribution rules
apply in making this determination. No similar rule applies to
corporate ownership of a REIT.
House bill
No provision.
Senate amendment
The Senate amendment contains a number of provisions
relating to REITS. These include a provision generally limiting
the level of investment a REIT can have in another entity to 10
percent of value (or vote), except in the case of taxable REIT
subsidiaries, for which specific rules are provided. The
provisions also permit REITs to own and operate health care
facilities under certain circumstances, modify the definition
of independent contractor and of real estate rental income,
modify the earnings and profits rules for REITs and for
regulated investment companies (``RICS''), and modify the
estimated tax rules for investors in certain closely held
REITs.
The Senate amendment also imposes an additional
requirement for REIT qualification that makes certain
controlled entities ineligible for REIT status and imposes a
number of related rules. Under that provision, except for the
first taxable year for which an entity elects to be a REIT, no
one person can own stock of a REIT possessing 50 percent or
more of the combined voting power of all classes of voting
stock or 50 percent or more of the total value of shares of all
classes of stock of the REIT. For purposes of determining a person's
stock ownership, rules similar to attribution rules for REIT
qualification under present law apply (secs. 856(d)(5) and 856(h)(3)).
The provision does not apply to ownership by a REIT of 50 percent or
more of the stock (vote or value) of another REIT.
An exception applies for a limited period to certain
``incubator REIT''. An incubator REIT is a corporation that
elects to be treated as an incubator REIT and that meets all
the following other requirements: (1) it has only voting common
stock outstanding, (2) not more than 50 percent of the
corporation's real estate assets consist of mortgages, (3) from
not later than the beginning of the last half of the second
taxable year, at least 10 percent of the corporation's capital
is provided by lenders or equity investors who are unrelated to
the corporation's largest shareholder, (4) the corporation must
annually increase the value of real estate assets by at least
10 percent, (5) the directors of the corporation must adopt a
resolution setting forth an intent to engage in a going public
transaction, and (6) no predecessor entity (including any
entity from which the electing incubator REIT acquired assets
in a transaction in which gain or loss was not recognized in
whole or in part) had elected incubator REIT status.
The new ownership requirement does not apply to an
electing incubator REIT until the end of the REIT's third
taxable year; and can be extended for an additional two taxable
years if the REIT so elects. However, a REIT cannot elect the
additional two-year extension unless the REIT agrees that if it
does not engage in a going public transaction by the end of the
extended eligibility period, it shall pay Federal income taxes
for the two years of the extended period as if it had not made
an incubator REIT election and had ceased to qualify as a REIT
for those two taxable years. In such case, the corporation
shall file appropriate amended returns within 3 months of the
close of the extended eligibility period. Interest would be
payable, but no substantial underpayment penalties would apply
except in cases where there is a finding that incubator REIT
status was elected for a principal purpose other than as part
of a reasonable plan to engage in a going public transaction.
Notification of shareholders and any other person whose tax
position would reasonably be expected to be affected is also
required.
If an electing incubator REIT does not elect to extend
its initial 2-year extended eligibility period and has not
engaged in a going public transaction by the end of such
period, it must satisfy the new control requirements as of the
beginning of its fourth taxable year (i.e., immediately after
the close of the last taxable year of the two-year initial
extension period) or it will be required to notify its
shareholderss and other persons that may be affected by its tax
status, and pay Federal income tax as a corporation that has
ceased to qualify as a REIT at that time.
If the Secretary of the Treasury determines that an
incubator REIT election was filed for a principal purpose other
than as part of a reasonable plan to undertake a going public
transaction, an excise tax of $20,000 is imposed on each of the
corporation's directors for each taxable year for which the
election was in effect.
For purposes of determining whether a corporation has met
the requirement that it annually increase the value of its real
estate assets by 10 percent, the following rules shall apply.
First, values shall be based on cost and properly capitalizable
expenditures with no adjustment for depreciation. Second, the
test shall be applied by comparing the value of assets at the
end of the first taxable year with those at the end of the
second taxable year and by similar successive taxable year
comparisons during the eligibility period. Third, if a
corporation fails the 10 percent comparison tests for one
taxable year, it may remedy the failure by increasing the value
of real estate assets by 25 percent in the following taxable
year, provided it meets all the other eligibility period
requirements in that following taxable year.
A going public transaction is defined as either (1) a
public offering of shares of stock of the incubator REIT, (2) a
transaction, or series of transactions, that result in the
incubator REIT stock being regularly traded on an established
securities market (as defined in section 897) and being held by
shareholders unrelated to persons who held such stock before it
began to be so regularly traded, or (3) any transaction
resulting in ownership of the REIT by 200 or more persons
(excluding the largest single shareholder) who in the aggregate
own least 50 percent of the stock of the REIT. Attribution
rules apply in determining ownership of stock.
Effective date.--Under the Senate amendment, the
provision denying REIT status to certain controlled entities is
effective for taxable years ending after July 14, 1999. Any
entity that elects (or has elected) REIT status for a taxable
year including July 14, 1999, and which is both a controlled
entity and has significant business assets or activities on
such date, will not be subject to the proposal. Under this
rule, a controlled entity with significant business assets or
activities on July 14, 1999, can be grandfathered even if it
makes its first REIT election after that date with its return
for the taxable year including that date.
For purposes of the transition rules, the significant
business assets or activities in place on July 14, 1999, must
be real estate assets and activities of a type that would be
qualified real estate assets and would produce qualified real
estate related income for a REIT.
Conference agreement
No provision. However, the Senate amendment provisions,
except for the provision what would have denied REIT status to
certain controlled entities, were enacted in the ticket to Work
and Work Incentives Improvement Act of 1999.
I. Modification of Individual Estimated Tax Safe Harbor
(sec. 623 of the Senate amendment and sec. 6654 of the Code)
Present law
Under present law, an individual taxpayer generally is
subject to an addition to tax for any underpayment of estimated
tax. An individual generally does not have an underpayment of
estimated tax if he or she makes timely estimated tax payments
at least equal to: (1) 90 percent of the tax shown on the
current year's return or (2) 100 percent of the prior year's
tax. For taxpayers with a prior year's AGI above $150,000,\6\
however the rule that allows payment of 100 percent of prior
year's tax is modified. Those taxpayers with AGI above $150,000
generally must make estimated payments based on either (1) 90
percent of the tax shown on the current year's return or (2)
110 percent of the prior year's tax.
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\6\ The threshold is $75,000 for married taxpayers filing
separately.
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For taxpayers with a prior year's AGI above $150,000, the
prior year's tax safe harbor is modified for estimated tax
payments made for taxable years 2000 and 2002. For such
taxpayers making estimated tax payments based on prior year's
tax payments must be made based on 108.6 percent of prior
year's tax for taxable year 2000 \7\ and 112 percent of prior
year's tax for taxable year 2002.
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\7\ This percentage was enacted in sec. 531 of P.L. 106-170, the
Ticket to Work and Work Incentives Improvement Act of 1999 (December
17, 1999).
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House bill
No provision.
Senate amendment
The Senate amendment further modifies the safe harbor
rule by providing that taxpayers with prior year's AGI above
$150,000 who make estimated tax payments based on prior year's
tax must do so based on 106.5 percent of prior year's tax for
estimated tax payments made for taxable year 2000. Taxpayers
with prior year's AGI above $150,000 who made estimated tax
payments based on prior year's tax must do so based on 106
percent of prior year's tax for estimated tax payments made for
taxable year 2001. All other years remain as under present law.
Effective date.--The provision is effective for estimated
payments made for taxable year beginning after December 31,
1999.
Conference agreement
No provision.
J. Provide Waiver From Denial of Foreign Tax Credits
(sec. 724 of the Senate amendment and sec. 901(j) of the Code)
Present law
In general, U.S. persons may credit foreign taxes against
U.S. tax on foreign-source income. The amount of foreign tax
credits that can be claimed in a year is subject to a
limitation that prevents taxpayers from using foreign tax
credits to offset U.S. tax on U.S.-source income. Separate
limitations are applied to specific categories of income.
Pursuant to special rules applicable to taxes paid to
certain foreign countries, no foreign tax credit is allowed for
income, war profits, or excess profits taxed paid, accrued, or
deemed paid to a country which satisfies specified criteria, to
the extent that the taxes are with respect to income
attributable to a period during which such criteria were
satisfied (sec. 901(j)). Section 901(j) applies with respect to
any foreign country: (1) the government of which the United
States does not recognize, unless such government is otherwise
eligible to purchase defense articles or services under the
Arms Export Control Act, (2) with respect to which the United
States has severed diplomatic relations, (3) with respect to
which the United States has not severed diplomatic relations
but does not conduct such relations, or (4) which the Secretary
of State has, pursuant to section 6(j) of the Export
Administration Act of 1979, as amended, designated as a foreign
country which repeatedly provides support for acts of
international terrorisms (a ``section 901(j) foreign
country''). The denial of credits applies to any foreign
country during the period beginning on the later of January 1,
1987, or six months after such country becomes a section 901(j)
country, and ending on the date the Secretary of State
certifies to the Secretary of the Treasury that such country is
no longer a section 901(j) country.
Taxes treated as noncreditable under section 901(j)
generally are permitted to be deducted notwithstanding the fact
that the taxpayer elects use of the foreign tax credit for the
taxable year with respect to other taxes. In addition, income
for which foreign tax credits are denied generally cannot be
sheltered from U.S. tax by other creditable foreign taxes.
Under the rules of subpart F, U.S. 10-percent
shareholders of a controlled foreign corporation (``CFC'') are
required to include in income currently certain types of income
of the CFC, whether or not such income is actually distributed
currently to the shareholders (referred to as ``subpart F
income''). Subpart F income includes income derived from any
foreign country during a period in which the taxes imposed by
that country are denied eligibility for the foreign tax credit
under section 901(j).\8\
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\8\ Sec. 952(a)(5).
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House bill
No provision.
Senate amendment
The Senate amendment provides that section 901(j) no
longer applies with respect to a foreign country if: (1) the
President determines that a waiver of the application of
section 901(j) to such foreign country is in the national
interest of the United States and will expand trade
opportunities for U.S. companies in such foreign country, and
(2) the President reports to the Congress, not less than 30
days before the waiver is granted, the intention to grant such
a waiver and the reason for such waiver.
Effective date.--The provision is effective on or after
February 1, 2001.
Conference agreement
The conference agreement follows the Senate amendment.
K. Accelerate Rum Excise Tax Coverover Payments to Puerto Rico and the
U.S. Virgin Islands
(sec. 221 of the senate amendment and sec. 7652 of the code)
Present law
A $13.50 per proof gallon \9\ excise tax is imposed on
distilled spirits produced in or imported (or brought) into the
United States. The excise tax does not apply to distilled
spirits that are exported from the United States or to
distilled spirits that are consumed in U.S. possessions (e.g.,
Puerto Rico and the Virgin Islands).
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\9\ A proof gallon is a liquid gallon consisting of 50 percent
alcohol.
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The Code provides for coverover (payment) of $13.25 per
proof gallon of the excise tax imposed on rum imported (or
brought) into the United States (without regard to the country
of origin) to Puerto Rico and the Virgin Islands during the
period July 1, 1999 through December 31, 2001. Effective on
January 1, 2002, the coverover rate is scheduled to return to
its permanent level of $10.50 per proof gallon. The maximum
amount attributable to the increased coverover rate over the
permanent rate of $10.50 per proof gallon that can be paid to
Puerto Rico and the Virgin Islands before October 1, 2000 is
$20 million. Payment of this amount was made on January 3,
2000.\10\ Any remaining amounts attributable to the increased
coverover rate are to be paid on October 1, 2000.
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\10\ The Department of the Interior, which administers the
coverover payments for rum imported into the United States from the
U.S. Virgin Islands, erroneously authorized full payment to the Virgin
Islands of the increased coverover rate on that rum notwithstanding the
statutory limit on these transfers for periods before October 1, 2000.
The Bureau of Alcohol, Tobacco, and Firearms, which administers the
coverover payments for the Virgin Islands' portion of tax collected on
rum imported from other countries, complied with the statutory limit.
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Amounts covered over to Puerto Rico and the Virgin
Islands are deposited into the treasuries of the two
possessions for use as those possessions determine.
House bill
No provision, but H.R. 984, as reported by the Committee
on Ways and Means, would have provided an increase in the
coverover amount to $13.50 per proof gallon for the period June
30, 1999, and before October 1, 1999. (The conference report on
the Ticket to Work and Work Incentives Improvement Act of 1999
(Pub. L. No. 106-170, December 17, 1999) subsequently increased
the coverover rate from $10.50 per proof gallon to $13.25 per
proof gallon, and enacted the $20 million limit on transfer of
the increased amount before October 1, 2000. The conference
report further indicated that the special payment rule would be
reviewed during consideration of H.R. 434.)
Senate amendment
The Senate amendment is the same as the Ways and Means
Committee-reported provisions of H.R. 984.
Conference agreement
The conference agreement provides that unpaid amounts
attributable to the increase in the coverover rate to $13.25
per proof gallon for the period from July 1, 1999 through the
last day of the month prior to the date of enactment will be
paid on the first monthly payment date following the date of
enactment.\11\ With respect to amounts attributable to the
period beginning with the month of the conference agreement's
enactment, payments will be based on the full $13.25 per proof
gallon rate.
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\11\ Thus, this provision of the conference agreement applies only
to payments to Puerto Rico and to payments of the Virgin Islands'
portion of tax on rum imported from other countries because the
Interior Department erroneously has already paid in full amounts
attributable to rum imported from the Virgin Islands.
---------------------------------------------------------------------------
The conference agreement further includes two
clarifications to the rules governing coverover payments.
First, clarification is provided that payments to the Virgin
Islands with respect to rum imported from that possession are
to be made annually in advance (based on estimates) as is the
current administrative practice. Second, the conference
agreement clarifies that the Internal Revenue Code provisions
governing coverover payments are the exclusive authorize
authority for making those payments.
Effective date.--The provision is effective on the date
of enactment.
trade provisions not included in either the house or senate bill--
access to hiv/aids pharmaceuticals and medical technologies
Present law
The Special 301 provisions of the Trade Act of 1974
require the President to identify, within 30 days after
submission of the annual National Trade Estimates report to
Congress, those foreign countries that deny adequate and
effective protection of intellectual property rights or fair
and equitable market access to U.S. persons that rely upon
intellectual property protection, and those countries
determined by USTR to be ``priority foreign countries.'' The
President is to identify as priority countries only those that
have the most onerous or egregious acts, policies, or practices
with the greatest adverse impact on the relevant U.S. products,
and that are not entering into good faith negotiations or
making significant progress in bilateral or multilateral
negotiations to provide adequate and affective intellectual
property rights protection.
House bill
No provision.
Senate amendment
Section 116 of the Senate bill seeks to address the issue
of access to HIV/AIDS pharmaceuticals and medical technologies
in the beneficiary countries of sub-Saharan Africa. In
subsection (a), Congress finds that since the onset of the
worldwide HIV/AIDS epidemic, approximately 34,000,000 people
living in sub-Saharan Africa have been infected with the
disease. Of those infected, approximately 11,500,000 have died,
representing 83 percent of the total HIV/AIDS-related deaths
worldwide. Subsection (b) expresses the sense of Congress that:
It is in the interest of the United States to take
all necessary steps to prevent further spread of
infectious disease, particularly HIV/AIDS;
There is critical need for effective incentives to
develop new pharmaceuticals, vaccines, and therapies to
combat the HIV/AIDS crisis, especially effective global
standards for protecting pharmaceutical and medical
innovation;
The overriding priority for responding to the
crisis on HIV/AIDS in sub-Saharan Africa should be the
development of the infrastructure necessary to deliver
adequate health care services, and of public education
to prevent transmission and infection, rather than
legal standards issues;
Individual countries should have the ability to
determine the availability of pharmaceuticals and
health care for their citizens in general, and
particularly with respect to the HIV/AIDS epidemic.
Subsection (c) prohibits the Administration from seeking,
through negotiation or otherwise, the revocation or revision of
any intellectual property or competition law or policy that
regulates HIV/AIDS pharmaceuticals or medical technologies of a
beneficiary sub-Saharan African country if the law or policy
promotes access to HIV/AIDS pharmaceuticals or medical
technologies and the law or policy of the country provides
adequate and effective intellectual property protection
consistent with the Agreement on Trade-Related Aspects of
Intellectual Property Rights referred to in section 101(d)(15)
of the Uruguay Round Agreements Act.
Conference agreement
The Senate recedes to the House.
trade adjustment assistance
Present law
Title II of the Trade Act of 1974, as amended, authorizes
three trade adjustment assistance (TAA) programs for the
purpose of providing assistance to individual workers and firms
that are adversely affected by import competition. Those
programs are: (1) the general TAA program for workers, which
provides training and income support for workers adversely
affected by import competition; (2) the TAA program for firms,
which provides technical assistance to qualifying firms; and
(3) the North American Free Trade Agreement (NAFTA)
Transitional Adjustment Assistance (NAFTA-TAA) program for
workers (established by the North American Free Trade Agreement
Implementation Act of 1993), which provides training and income
support for workers adversely affected by imports from or
production shifts to Canada and/or Mexico.
The authorizations for all three programs expire on
September 30, 2001. At the time of the passage of the Senate
bill, the authorization for these programs had expired on June
30, 1999.
House bill
No provision.
Senate amendment
Section 401 of the Senate bill reauthorizes each of the
three TAA programs through September 30, 2001. It also caps the
amount of money appropriated for any fiscal year from October
1, 1998 to September 30, 2001 at $30,000,000.
Section 402 of the Senate bill requires the Secretary of
Labor to certify as eligible for benefits under the general TAA
program workers in textile and apparel firms who lose their
jobs as a result of either (1) a decrease in the firm's sales
or production; or (2) a firm's plant or facility closure or
relocation.
Conference agreement
The Senate recedes to the House.
Trade Adjustment Assistance for Farmers
Present law
Title II of the Trade Act of 1974, as amended, authorizes
three trade adjustment assistance (TAA) programs for the
purpose of providing assistance to individual workers and firms
that are adversely affected by import competition. Those
programs are: the general TAA program for workers, which
provides training and income support for workers adversely
affected by import competition; the TAA program for firms,
which provides technical assistance to qualifying firms; and
the North American Free Trade Agreement Act (NAFTA)
transitional adjustment assistance program which provides
training and income support for workers who may be adversely
impacted by imports from or production shifts to Canada and/or
Mexico.
House bill
No provision.
Senate amendment
The Trade Adjustment Assistance for Farmers provision
would create a new TAA program for farmers as Chapter 6 of
title II of the Trade Act of 1974. Under this new program,
farmers would be eligible for cash assistance when commodity
prices drop by more than 20 percent below the average for the
previous five year period and imports contributed importantly
to this price drop. When a commodity meets these criteria,
individual farmers would be eligible to receive cash assistance
equal to half the difference between the actual national
average price for the year and 80 percent of the average price
in the previous five years (the price trigger level), provided
that the farmer's income had declined from the previous year.
This assistance was capped at $10,000 per farmer. The program
is authorized at $100 million annually and is to be
administered by the Department of Agriculture.
Report on Debt Relief
Present law
No provision.
House bill
No provision.
Senate amendment
Section 705 of the Senate amendment requires the
President to submit a report to Congress on the President's
recommendations for: bilateral debt relief for sub-Saharan
African countries; new loan, credit and guarantee programs for
these countries; and the President's assessment of how debt
relief will affect the ability of each country to participate
fully in the international trading system.
Conference agreement
The Senate recedes to the House. Section 714 of the
Senate bill, expressing Congress' support for comprehensive
debt relief for the world's poorest countries, is included in
Title I of the conference agreement.
Sense of Senate Regarding Fair Access to Japanese Telecommunications
Facilities and Services
Present law
No provision.
House bill
No provision.
Senate amendment
Section 709 of the Senate amendment expresses the Sense
of the Senate that the Administration should pursue efforts to
open the Japanese telecommunications market, particularly to
internet services. This provision notes that despite several
bilateral agreements with Japan regarding its
telecommunications market, the Senate remains concerned about
Japan's excessive regulation and anti-competitive activity in
the telecommunications sector. The provision urges the
Administration to continue to pursue aggressively further
market opening with Japan as part of the multilateral
negotiations that were to be launched at the WTO Ministerial in
Seattle (November 30-December 3).
Conference agreement
The Senate recedes to the House.
report on wto ministerial
Present law
No provision.
House bill
No provision.
Senate amendment
Section 709 of the Senate amendment expresses the Sense
of Congress on the importance of the new round of international
trade negotiations that was to be launched at the World Trade
Organization (WTO) Ministerial Conference in Seattle,
Washington from November 30 to December 3, 1999. Subsection (b)
requires that the United States Trade Representative shall
submit a report to Congress regarding any discussions on the
Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 (the Antidumping Agreement)
and the Agreement on Subsidies and Countervailing Measures
during the Seattle Ministerial Conference.
Conference agreement
The Senate recedes to the House.
marking of imported jewelry
Present law
Section 304 of the Tariff Act of 1930 (19 U.S.C.
Sec. 1304) requires that all articles of foreign origin
imported into the United States ``shall be marked in a
conspicuous place as legibly, indelibly and permanently as the
nature of the article (or container) will permit a manner to
indicate to the ultimate purchaser in the United States the
English name of the country of origin of the article.'' The
provision authorizes several exceptions to this standard
including where ``such article is incapable of being marked''
and ``such article cannot be marked prior to shipment to the
United States, except at an expense economically prohibitive of
its importation.'' 19 U.S.C. Sec. 1304(3) (A), (C). Part 134,
Customs Regulations (19 C.F.R. part 134), implements the
country of origin marking requirements and exceptions of 19
U.S.C. 1304.
The Customs Service has not implemented any specific
regulation with respect to costume jewelry. In practice,
however, the Customs Service has interpreted the statute and
its exceptions to permit articles of costume jewelry to be
marked with a hang tag, applied tag, or similar labeling where
the article is incapable of being marked in a more permanent
manner or where it is economically prohibitive to indelibly
mark the article.
House bill
No provision.
Senate amendment
Section 720 of the Senate bill directs the U.S.
Department of Treasury to implement regulations, consistent
with the existing statutory framework, with respect to the
marking of costume jewelry of foreign origin within one year of
the date of enactment of this bill. These regulations are
intended to clarify the existing statutory standard and are to
be modeled after the Customs Service's regulation with respect
to Native American jewelry, codified in 19 C.F.R.
Sec. 134.43(c).
The U.S. jewelry industry continues to report, however,
that hang tags and labels on imported costume jewelry that are
in place upon entry into the United States often disappear or
are removed prior to the jewelry's display or sale. When
country-of-origin markings do not appear on imported jewelry or
other items offered to the consumer, it constitutes a violation
of federal marking law and prevents purchasers from being
informed about the origin of such products.
Conference agreement
The Senate recedes to the House.
Unreasonable Acts, Policies and Practices
Present law
Sections 301-310 of the Trade Act of 1974 provides
authority to the United States Trade Representative to enforce
U.S. rights under international trade agreements. Section
301(a) authorizes the Trade Representative to take action to
enforce such rights if the Trade Representative determines that
an act, policy, or practice of a foreign country is
unreasonable or discriminatory and burdens or restricts United
States commerce. Section 301(d)(3)(B)(i) defines unreasonable
acts, policies, and practices to include acts which deny fair
and equitable market opportunities, including the toleration by
a foreign government of systematic anticompetitive activities
by enterprises in the foreign country that have the effect of
restricting access of U.S. goods or services in that foreign
market or a third country market.
House bill
No provision.
Senate amendment
Section 725 of the Senate amendment adds language to
section 301(d)(3)(B)(i) to define unreasonable acts, policies,
and practices which deny fair and equitable market
opportunities as including predatory pricing, discriminatory
pricing, or pricing below the cost of production if such acts,
policies or practices are inconsistent with commercial
practices. This provision also deletes the existing reference
to systematic anticompetitive activities.
Conference agreement
The House recedes to the Senate.
From the Committee on International Relations,
for consideration of the House bill and the
Senate amendment, and modifications committed
to conference:
Benjamin A. Gilman,
Edward R. Royce,
Sam Gejdenson,
From the Committee on Ways and Means, for
consideration of the House bill and the Senate
amendment, and modifications committed to
conference:
Bill Archer,
Phil Crane,
Charles B. Rangel,
As additional conferees, for consideration of
the House bill and the Senate amendment, and
modifications committed to conference:
Amo Houghton,
Joe Hoeffel,
Managers on the Part of the House.
W.V. Roth, Jr.,
Chuck Grassley,
Trent Lott,
Daniel P. Moynihan,
Max Baucus,
Joe Biden,
Managers on the Part of the Senate.