[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 990 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 990

  To promote fair trade for the United States shipbuilding and repair 
                               industry.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                May 19 (legislative day, April 19), 1993

  Mr. Breaux (for himself, Ms. Mikulski, Mr. Lott, Mr. Mitchell, Mr. 
 Warner, Mrs. Feinstein, Mr. Cohen, Mr. Wofford, Mr. Rockefeller, Mr. 
   Lieberman, Mr. Sarbanes, Mr. Specter, Mr. Cochran, Mr. Robb, Mr. 
 Johnston, Mr. Simon, Mr. Riegle, Mr. Pell, Mr. Heflin, and Mr. Dodd) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To promote fair trade for the United States shipbuilding and repair 
                               industry.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Shipbuilding Trade Reform Act of 
1993''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds that--
            (1) in 1981, the United States Government terminated 
        funding for the construction-differential subsidy program, 
        thereby ending direct subsidization of commercial shipbuilding 
        in the United States;
            (2) since 1981, the international market for ship 
        construction has been distorted by a wide array of subsidies 
        and other anticompetitive practices by foreign countries, 
        including but not limited to the member countries of Working 
        Party 6 of the Organization for Economic Cooperation and 
        Development;
            (3) such subsidies and anticompetitive practices include, 
        but are not limited to, direct grants, preferential 
        refinancing, equity infusions, research and development 
        assistance, restructuring aid, special tax concessions, debt 
        forgiveness, and other forms of direct and indirect assistance;
            (4) foreign countries that directly or indirectly provide 
        subsidies or other forms of anticompetitive assistance for the 
        construction or repair of vessels are engaging in 
        unjustifiable, unreasonable, and discriminatory trade practices 
        which--
                    (A) burden and restrict United States commerce;
                    (B) materially injure the United States ship 
                construction and repair industry; and
                    (C) create general or special conditions 
                unfavorable to the ability of United States 
                shipbuilders to engage in the construction of vessels 
                for international commerce;
            (5) foreign shipbuilding subsidies have caused, and 
        threaten to cause, material injury to the United States 
        shipbuilding and ship repair industry, as evidenced by--
                    (A) the closure of more than forty major shipyards 
                and the loss of over one hundred-twenty thousand jobs 
                in shipyards and their supplier base since 1981;
                    (B) the potential loss of another one hundred-
                eighty thousand jobs by 1998 if foreign subsidies are 
                not eliminated;
                    (C) the decline in the United States share of the 
                international commercial vessel construction market 
                from 7.9 percent in 1979 to less than 1 percent in 
                1991;
                    (D) the substantial reduction in shipyard 
                profitability and the industry's difficulty in raising 
                capital;
                    (E) the dramatic decline in the capacity 
                utilization of United States shipyards and the lost 
                opportunities for technological advancement; and
                    (F) the significant price underselling by foreign 
                shipyards;
            (6) existing United States trade laws and trade agreements 
        provide limited redress to domestic producers of ships for the 
        trade-distorting subsidies and dumping practices of foreign 
        shipbuilders;
            (7) a strong, effective multilateral agreement among 
        shipbuilding nations to eliminate trade-distorting practices in 
        the ship construction industry is the best means of providing 
        for fair international competition; however, absent such an 
        agreement, greater redress under United States law against 
        unfair and unreasonable foreign trade practices in commercial 
        ship construction is necessary;
            (8) a viable United States ship construction and repair 
        industry is necessary to achieve the national defense and 
        economic security interests of the United States; and
            (9) United States shipyards, which have become almost 
        exclusive defense contractors, are positioning themselves to 
        make those investments in commercial facilities, ship designs, 
        manufacturing process, and structural reorganization that are 
        necessary for their conversion to compete in the international 
        commercial ship construction and repair market and thereby 
        ensure a viable United States industry which can respond to the 
        Nation's future national security requirements; however, this 
        conversion to the commercial market cannot be achieved unless 
        the massive subsidies provided by foreign governments for the 
        construction and repair of commercial ships are eliminated.
    (b) Purpose.--It is the purpose of this Act to ensure fair trade in 
the commercial shipbuilding and repair industry by providing for 
additional trade remedies against unfair foreign competition.

SEC. 3. DEFINITIONS.

    As used in this Act--
            (1) The term ``conditions unfavorable to the ability of any 
        United States shipbuilder to engage in the construction or 
        repair of vessels for international commerce'' includes, but is 
        not limited to, any conditions available to, and favorable for, 
        foreign shipbuilders which are not reciprocally available to 
        and favorable for United States shipbuilders and which--
                    (A) provide any disincentive to investment in 
                facilities, equipment, and technology for the 
                construction or repair of vessels in the United States;
                    (B) contribute to any reduction in the 
                competitiveness of any United States shipbuilder to 
                engage in the construction or repair of vessels for 
                international commerce; or
                    (C) otherwise contribute to any distortion of the 
                international market for the construction or repair of 
                vessels.
            (2) The term ``construction'' includes reconstruction.
            (3) The term ``interested party'' means--
                    (A) a person that engages in the construction or 
                repair of vessels in the United States;
                    (B) a certified union or recognized union or group 
                of workers which is representative of workers in an 
                industry that engages in the construction or repair of 
                vessels in the United States;
                    (C) a trade or business association whose members 
                include firms, partnerships, or other entities, which 
                engage in the construction or repair of vessels in the 
                United States; and
                    (D) an association, a majority of whose members is 
                composed of interested parties described in 
                subparagraphs (A), (B), and (C) that, respectively, 
                engage in vessel construction, represent workers in an 
                industry that engages in vessel construction, and have 
                members that engage in vessel construction.
            (4) The term ``Secretary'' means the Secretary of Commerce.
            (5) The term ``subsidizing country list'' and ``list'' mean 
        the list established under section 4(a).
            (6) The term ``subsidy'' includes, but is not limited to, 
        any of the following:
                    (A) Officially supported export credits and 
                development assistance.
                    (B) Direct official operating support to the vessel 
                construction and repair industry, or to a related 
                entity that favors the operation of vessel construction 
                and repair, including--
                            (i) grants;
                            (ii) loans and loan guarantees other than 
                        those available on the commercial market;
                            (iii) forgiveness of debt;
                            (iv) equity infusions on terms inconsistent 
                        with commercially reasonable investment 
                        practices;
                            (v) preferential provision of goods and 
                        services; and
                            (vi) public sector ownership of commercial 
                        shipyards on terms inconsistent with 
                        commercially reasonable investment practices.
                    (C) Direct official support for investment in the 
                vessel construction and repair industry, or to a 
                related entity that favors the operation of vessel 
                construction and repair, including the kinds of support 
                listed in clauses (i) through (v) of subparagraph (B), 
                and any restructuring support, except public support 
                for social purposes directly and effectively linked to 
                shipyard closures.
                    (D) Assistance in the form of grants, preferential 
                loans, preferential tax treatment, or otherwise, that 
                benefits or is directly related to vessel construction 
                and repair for purposes of research and development 
                that is not equally open to domestic and foreign 
                enterprises.
                    (E) Tax policies and practices that favor the 
                vessel construction and repair industry, directly or 
                indirectly, such as tax credits, deductions, 
                exemptions, and preferences, including accelerated 
                depreciation, if the benefits are not generally 
                available to persons or firms not engaged in vessel 
                construction or repair.
                    (F) Any official regulation or practice that 
                authorizes or encourages persons or firms engaged in 
                vessel construction or repair to enter into 
                anticompetitive arrangements.
                    (G) Any indirect support directly related, in law 
                or in fact, to vessel construction and repair at 
                national yards, including any public assistance 
                favoring vessel owners with an indirect effect on 
                vessel construction or repair activities, and any 
                assistance provided to suppliers to significant inputs 
                to vessel construction, which results in benefits to 
                domestic shipbuilders.
                    (H) Any export subsidy identified in the 
                Illustrative List of Export Subsidies in the Annex to 
                the Agreement on Interpretation and Application of 
                Articles VI, XVI, and XXIII of the General Agreement on 
                Tariffs and Trade or any other export subsidy that may 
                be prohibited as a result of the Uruguay Round of trade 
                negotiations.
            (7) The term ``vessel'' means any self-propelled, seagoing 
        vessel--
                    (A) of not less than one hundred gross tons, as 
                measured under the International Convention on Tonnage 
                Measurement of Ships, 1969; and
                    (B) not exempt from entry under section 441 of the 
                Tariff Act of 1930 (19 U.S.C. 1441).

SEC. 4. LISTING OF SUBSIDIZING COUNTRIES.

    (a) Establishment of List.--The Secretary shall establish and 
maintain a subsidizing country list that shall contain the name of each 
foreign country that is placed on the list under subsection (b), 
subsection (d), or subsection (e) of this section, under section 5(a), 
or under section 6(c). The Secretary shall revise the list on the basis 
of the requirements of this Act and shall, on at least a biannual 
basis, publish in the Federal Register the most current list.
    (b) Statutory Listing.--
            (1) In general.--Unless the Secretary determines, based on 
        clear and convincing evidence, that a foreign country that was 
        a party to negotiating a multilateral agreement for the 
        elimination of shipbuilding subsidies in Working Party 6 of the 
        Organization for Economic Cooperation and Development on 
        October 16, 1991, does not provide, directly or indirectly, any 
        subsidy for the construction or repair of vessels, the 
        Secretary shall, on the date of enactment of this Act--
                    (A) place the foreign country on the subsidizing 
                country list;
                    (B) notify the foreign country of its inclusion on 
                the list; and
                    (C) publish notice of the listing in the Federal 
                Register.
            (2) Duration of listing.--Each foreign country listed under 
        subsection (a) as a result of this subsection shall remain on 
        the subsidizing country list until such time as the foreign 
        country signs a trade agreement with the United States that 
        provides for the immediate elimination of subsidies for the 
        construction and repair of vessels (including the elimination 
        of continuing benefits from prior subsidy programs).
    (c) Investigations.--
            (1) Initiation of investigations.--The Secretary shall 
        initiate an investigation into the practices of any foreign 
        country (other than a country listed under subsection (b)) 
        within twenty days after receipt of a petition for such an 
        investigation from an interested party or whenever the 
        Secretary has reasonable cause to believe that such country 
        provides, directly or indirectly, any subsidy for the 
        construction or repair of vessels.
            (2) Administrative procedure for investigations; 
        preliminary determinations.--
                    (A) Notice.--Within seven days after initiating an 
                investigation under paragraph (1), the Secretary shall 
                publish in the Federal Register a notice of such 
                investigation, together with a request for public 
                comments.
                    (B) Public comments.--The Secretary shall--
                            (i) receive public comments during the 
                        thirty-day period that begins on the date on 
                        which notice is published under subparagraph 
                        (A); and
                            (ii) subject to section 7(a), make such 
                        comments available to the general public upon 
                        request.
                    (C) Preliminary determination.--Within thirty days 
                after the close of the public comment period referred 
                to in subparagraph (B), the Secretary, on the basis of 
                the information contained in the record, shall make a 
                preliminary determination regarding whether the foreign 
                country provides, directly or indirectly, any subsidy 
                for the construction or repair of vessels.
                    (D) Notice of preliminary determination.--Within 
                seven days after the date on which a preliminary 
                determination is made under subparagraph (C), the 
                Secretary shall published in the Federal Register a 
                notice of the preliminary determination, together 
                with--
                            (i) an explanation of the determination, 
                        including the nature and extent of any subsidy 
                        identified as the basis for the preliminary 
                        determination; and
                            (ii) a request for public comment regarding 
                        the preliminary determination.
                    (E) Public comments on preliminary determination.--
                The Secretary shall--
                            (i) receive public comments on such 
                        preliminary determination, during the thirty-
                        day period that begins on the date on which 
                        notice is published under subparagraph (D); and
                            (ii) subject to section 7(a), make such 
                        comments available to the general public upon 
                        request.
    (d) Emergency Listing.--If at any time the Secretary determines 
that information provided by any interested party presents a prima 
facie case that a foreign country is providing any subsidy for the 
construction or repair of vessels, the Secretary shall, within seven 
days after receiving such evidence, place that country on the 
subsidizing country list. Within seven days after making an emergency 
listing under this subsection, the Secretary shall--
            (1) notify the affected foreign country thereof;
            (2) published in the Federal Register a notice of the 
        determination and the emergency listing, together with a 
        request for public comment and a schedule for an investigation 
        into the alleged subsidy; and
            (3) initiate an investigation into the alleged subsidy. An 
        investigation initiated under paragraph (3) shall be concluded 
        by the Secretary within sixty days after the date of 
        initiation. Upon completion of the investigation, the Secretary 
        shall make a final determination under subsection (e).
    (e) Final Determination.--
            (1) In general.--Within--
                    (A) Thirty days after the close of the public 
                comment period referred to in subsection (c)(2)(E)(i), 
                in case of an investigation initiated under subsection 
                (c)(1); or
                    (B) Thirty days after the completion of an 
                investigation regarding an emergency listing under 
                subsection (d);
        the Secretary shall make a final determination regarding 
        whether a foreign country provides, directly or indirectly, any 
        subsidy for the construction or repair of vessels. Any 
        determination made by the Secretary under this subsection shall 
        be based solely upon information contained in the record, 
        including that information which is otherwise treated as 
        proprietary under section 7(a).
            (2) Notification and publication of listing.--If the 
        Secretary determines under paragraph (1) that a foreign country 
        provides, directly or indirectly, any subsidy for the 
        construction or repair of vessels, the Secretary shall, within 
        seven days after the date of the determination--
                    (A) place the foreign country on the subsidizing 
                country list;
                    (B) notify the foreign country of its inclusion on 
                the list; and
                    (C) publish in the Federal Register a notice of the 
                determination and listing, together with a full 
                explanation of the determination, including the nature 
                and extent of any subsidy identified as the basis for 
                the determination.
    (f) Reconsideration and Removal of Listings.--
            (1) Reconsideration.--A final determination under 
        subsection (e) that results in the placement of a foreign 
        country on the subsidizing country list may be reconsidered by 
        the Secretary if--
                    (A) after receiving an application for 
                reconsideration from such foreign country, the 
                application alleges material error in the determination 
                or alleges changed circumstances concerning the 
                elimination by the foreign country of its subsidy 
                practices and the Secretary considers the allegations 
                sufficient to warrant a reconsideration; or
                    (B) the Secretary receives information concerning 
                the signing of an agreement between the United States 
                Government and such foreign country that provides for 
                the immediate elimination by such country of 
                construction and repair subsidies for vessels.
            (2) Restriction on reconsideration.--A foreign country may 
        not make more than one application for reconsideration under 
        this subsection in any calendar year.
            (3) Burden of persuasion.--In any reconsideration under 
        paragraph (1)(A), the burden of persuasion is on the applicant, 
        regarding whether material error exists or whether there are 
        changed circumstances sufficient to warrant a determination 
        that the foreign country should be removed from the list.
            (4) Removal from list.--The Secretary may remove a foreign 
        country from the list only if the Secretary determines--
                    (A) based solely on the information contained in 
                the record, including that information which is 
                otherwise treated as proprietary under section 7(a), 
                that the foreign country does not provide any subsidy, 
                directly or indirectly, for the construction or repair 
                of vessels (including any continuing benefit from any 
                prior subsidy program); or
                    (B) that there is a signed agreement between the 
                United States Government and the foreign country that 
                provides for the immediate elimination of subsidies for 
                the construction and repair of vessels.
            (5) Administrative procedures for reconsideration.--
                    (A) Notice and comment.--After receiving an 
                application for reconsideration under paragraph (1) 
                from a foreign country, the Secretary shall--
                            (i) within seven days publish in the 
                        Federal Register the text of the application, 
                        together with a request for public comments; 
                        and
                            (ii) receive comments from the public for a 
                        period of sixty days after the date of 
                        publication and, subject to section 7(a), make 
                        such comments available to the general public 
                        upon request.
                    (B) Review and determination.--Within ninety days 
                after receiving an application for reconsideration 
                under paragraph (1), the Secretary shall--
                            (i) review the comments received under 
                        subparagraph (A) and issue a final affirmative 
                        or negative determination regarding the removal 
                        of the foreign country from the list; and
                            (ii) publish notice in the Federal Register 
                        of the determination, together with a full 
                        explanation thereof.
    (g) Judicial Review.--
            (1) Review of determination.--Within thirty days after the 
        date of publication in the Federal Register of a final 
        determination of the Secretary made under subsection (e) or 
        (f)(5)(B), any interested party may commence an action in the 
        United States Court of International Trade by filing 
        concurrently a summons and complaint, each with the content and 
        in the form, manner, and style prescribed by the rules of that 
        court, contesting any factual findings or legal conclusions 
        upon which the determination is based.
            (2) Procedures and fees.--The procedures and fees set forth 
        in chapter 169 of title 28, United States Code, apply to an 
        action under this subsection.
            (3) Standard of review.--The court shall hold unlawful any 
        determination, finding, or conclusion found to be unsupported 
        by substantial evidence on the record, or otherwise not in 
        accordance with law.
            (4) Record of review.--The record for review shall consist 
        of a copy of all information presented to or obtained by the 
        Secretary during the course of the administrative proceeding, 
        including all governmental memoranda pertaining to the case and 
        the record of ex parte meetings, as well as a copy of the 
        determination, all transcripts or records of conferences and 
        hearings, and all notices published in the Federal Register.
            (5) Standing.--Any person who was a party to the 
        administrative proceedings described in this section shall have 
        the right to appear and be heard as a party in interest before 
        the United States Court of International Trade under this 
        subsection. The party filing the action shall notify all such 
        persons of the filing of an action under this section, in the 
        form and manner, and within the time, prescribed by the rules 
        of the court.
            (6) Conforming amendment.--Section 1581 of title 28, United 
        States Code, is amended by adding the following subsection:
    ``(k) The Court of International Trade shall have exclusive 
jurisdiction of any civil action commenced under section 4(g) of the 
Shipbuilding Trade Reform Act of 1993.''.

SEC. 5. PENALTIES.

    (a) Penalty for False Information and Renewal of Subsidies.--
            (1) In general.--The Secretary shall place a foreign 
        country on the subsidizing country list for a period of not 
        less than five years if the Secretary--
                    (A) determines that a foreign country provided the 
                Secretary with false or misleading information during 
                any investigation or reconsideration under section 4; 
                or
                    (B) after making a final determination under 
                section 4(e) or 4(f) that the foreign country is not 
                providing a subsidy, determines that the foreign 
                country provides, directly or indirectly, any new 
                construction or repair subsidy (including the 
                reinstatement of any benefit under any prior subsidy 
                program).
        A listing required by this subsection shall be made within 
        thirty days after the date of the determination under 
        subparagraph (A) or (B).
            (2) Time limits for determinations.--The Secretary shall 
        complete action on a determination under subparagraph (A) or 
        (B) of paragraph (1) within thirty days after the date on which 
        the Secretary receives information indicating a likelihood that 
        the foreign country concerned acted in the manner described in 
        that subparagraph.
    (b) Penalties for Failure to Eliminate Subsidies.--
            (1) Basis for imposition of penalties.--The Secretary shall 
        take action under paragraphs (2), (3), and (4) with respect to 
        a foreign country if--
                    (A) the Secretary determines that the foreign 
                country has been notified of its inclusion on the 
                subsidizing country list and has failed, within one 
                hundred and eighty days after that notification, to 
                eliminate subsidies for the construction and repair of 
                vessels, or to enter into an agreement that requires 
                the immediate elimination of such subsidies; or
                    (B) the Secretary places the foreign country on the 
                subsidizing country list in accordance with section 
                6(c).
            (2) Penalties for new affected vessels.--The Secretary 
        shall take one or more of the following actions with respect to 
        any new affected vessel of such foreign country:
                    (A) Limit the sailings of the vessel to or from the 
                United States, or the amount of cargo carried, by the 
                vessel to not less than 50 percent of the number of 
                sailings, or the amount of cargo carried, by the vessel 
                during the immediately preceding full calendar year.
                    (B) Impose on the vessel a fee of not less than 
                $500,000 and not more than $1,000,000 per voyage.
                    (C) Direct the appropriate customs officer at any 
                port or place of destination in the United States to 
                refuse the clearance required by section 4197 of the 
                Revised Statutes (46 App. U.S.C. 91) to the vessel.
                    (D) Direct the Secretary of the department in which 
                the Coast Guard is operating to deny entry for purposes 
                of oceanborne trade of the vessel to any port or place 
                in the United States or the navigable waters of the 
                United States.
            (3) Penalties for existing affected vessels.--The Secretary 
        shall take either or both of the actions described in 
        subparagraphs (A) and (B) of paragraph (2) with respect to an 
        existing affected vessel of such foreign country, if the 
        Secretary finds the existence of conditions unfavorable to the 
        ability of any United States shipbuilder to engage in the 
        construction or repair of vessels for international commerce 
        which arise out of, or result from a subsidy provided by such 
        country.
            (4) Cargo diversion.--The Secretary shall direct the 
        appropriate customs officer to deny entry of cargo into the 
        United States that has been transported on an affected vessel 
        of such foreign country, if that cargo has been transported to 
        a port or place in the United States through a foreign port or 
        place in a country contiguous to the United States.
            (5) Duration of penalties.--Any penalty imposed on a 
        foreign country under the subsection shall remain in effect 
        until such country is removed from the subsidizing country list 
        in accordance with section 4(f).
            (6) Definitions.--As used in this subsection--
                    (A) The term ``affected vessel'' means a vessel--
                            (i) that is documented under the laws of 
                        the foreign country concerned; or
                            (ii) the controlling interest in which is 
                        held by a citizen or national of, or a legal 
                        entity existing under the laws of, such foreign 
                        country, regardless of whether the vessel is 
                        documented under the laws of that country.
                    (B) The term ``existing affected vessel'' means an 
                affected vessel that is not a new affected vessel.
                    (C) The term ``new affected vessel'' means an 
                affected vessel that was constructed after the date of 
                enactment of this Act, unless such construction was 
                completed within thirty months after such date of 
                enactment under a contract entered into before such 
                date of enactment.

SEC. 6. TRADE AGREEMENTS.

    (a) In General.--Any negotiation, to which the United States is a 
party, for the elimination of subsidies for the construction or repair 
of vessels by foreign countries shall be conducted by the United States 
Government in full consultation with the affected industries in the 
United States.
    (b) Monitoring.--The Secretary shall monitor the compliance of each 
foreign country with any agreement to which the United States and such 
country are parties, requiring the elimination of subsidies for the 
construction or repair of vessels. The Secretary shall publish annually 
in the Federal Register the findings made by the Secretary under this 
subsection, together with a request for public comments.
    (c) Penalty for Noncompliance.--If, based on the findings made and 
the public comments received under subsection (b), the Secretary 
determines (within ninety days after the date of publication of the 
findings under subsection (b)) that a foreign country is not in 
compliance with the agreement being monitored, the Secretary shall, 
within seven days after making such determination, place such foreign 
country on the subsidizing country list.

SEC. 7. GENERAL ADMINISTRATIVE PROVISIONS.

    (a) Proprietary Information.--The procedures set forth in section 
777 of the Tariff Act of 1930 (19 U.S.C. 1677f) shall govern the rights 
of access to information obtained by the Secretary during the course of 
any investigation conducted under section 4.
    (b) Information Used in Making Determinations.--The Secretary 
shall, before making any final determination under section 4, 5, or 6, 
verify all information that will be relied upon in making that 
determination. If the Secretary is unable to verify any information 
submitted, the Secretary shall use the best information available as 
the basis for action. Whenever a party refuses or is unable to produce 
the information requested in a timely manner and in the form provided, 
the Secretary shall use the best information otherwise available. All 
information presented to or obtained by the Secretary shall be part of 
the record of the proceeding.
    (c) Public Availability of Determinations.--The Secretary shall 
make available for public inspection the text of all determinations 
made under section 4, 5, or 6.

                                 <all>

S 990 IS----2