[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 465 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 465

To ensure that the Caribbean Basin Initiative is not adversely affected 
by the implementation of the North American Free Trade Agreement and to 
 authorize entry into free trade agreements between the United States 
                 and certain Caribbean Basin countries.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 11, 1995

 Mr. Gibbons introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To ensure that the Caribbean Basin Initiative is not adversely affected 
by the implementation of the North American Free Trade Agreement and to 
 authorize entry into free trade agreements between the United States 
                 and certain Caribbean Basin countries.

    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 ``Caribbean Basin Free Trade 
Agreements Act''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that the continuation and strengthening of the 
commitment of the United States, as expressed by the enactment of the 
Caribbean Basin Economic Recovery Act and the Caribbean Basin Economic 
Recovery Expansion Act of 1990, to the successful development of the 
Caribbean region requires the enactment of provisions--
            (1) to encourage the continuation of structural reform 
        efforts by Caribbean countries toward market economies and 
        trade liberalization;
            (2) to preserve existing economic advantages under the 
        Caribbean Basin Initiative program and avoid the potential 
        diversion of investment from beneficiary countries under the 
        program to Mexico as a result of the North American Free Trade 
        Agreement;
            (3) to maintain and increase trade benefits under the 
        Caribbean Basin Initiative program in order to promote further 
        economic development and political stability in beneficiary 
        countries and to expand United States export opportunities in 
        the Caribbean region; and
            (4) to encourage and create further economic integration in 
        the Western Hemisphere through free trade arrangements that 
        provide United States business and labor reciprocal benefits 
        through the removal of barriers to trade and investment in 
        goods and services on a mutually advantageous basis.

 TITLE I--RELATIONSHIP OF NAFTA IMPLEMENTATION TO THE OPERATION OF THE 
                       CARIBBEAN BASIN INITIATIVE

SEC. 101. TEMPORARY PROVISIONS TO PROVIDE NAFTA PARITY TO BENEFICIARY 
              COUNTRY ECONOMIES.

    (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 are 
                subject to textile agreements;
                    ``(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 Harmonized Tariff Schedule of the United States;
                    ``(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) NAFTA transition period treatment of certain textile 
        and apparel articles.--
                    ``(A) Equivalent tariff and quota treatment.--
                During the transition period--
                            ``(i) the tariff treatment accorded at any 
                        time to any textile or apparel article that 
                        originates in the territory of a beneficiary 
                        country shall be identical to the tariff 
                        treatment that is accorded during such time 
                        under section 2 of the Annex to a like article 
                        that originates in the territory of Mexico and 
                        is imported into the United States;
                            ``(ii) duty-free treatment under this title 
                        shall apply to any textile or apparel article 
                        of a beneficiary country that is imported into 
                        the United States and that--
                                    ``(I) meets the same requirements 
                                (other than assembly in Mexico) as 
                                those specified in Appendix 2.4 of the 
                                Annex (relating to goods assembled from 
                                fabric wholly formed and cut in the 
                                United States) for the duty free entry 
                                of a like article assembled in Mexico; 
                                or
                                    ``(II) is identified under 
                                subparagraph (C) as a handloomed, 
                                handmade, or folklore article of such 
                                country and is certified as such by the 
                                competent authority of such country; 
                                and
                            ``(iii) no quantitative restriction or 
                        consultation level may be applied to the 
                        importation into the United States of any 
                        textile or apparel article that--
                                    ``(I) originates in the territory 
                                of a beneficiary country,
                                    ``(II) meets the same requirements 
                                (other than assembly in Mexico) as 
                                those specified in Appendix 3.1.B.10 of 
                                the Annex (relating to goods assembled 
                                from fabric wholly formed and cut in 
                                the United States) for the exemption of 
                                a like article assembled in Mexico from 
                                United States quantitative restrictions 
                                and consultation levels, or
                                    ``(III) qualifies for duty-free 
                                treatment under clause (ii)(II).
                    ``(B) NAFTA transition period treatment of 
                nonoriginating textile and apparel articles.--
                            ``(i) Preferential tariff treatment.--
                        Subject to clause (ii), the United States Trade 
                        Representative may place in effect at any time 
                        during the transition period with respect to 
                        any textile or apparel article that--
                                    ``(I) is a product of a beneficiary 
                                country; but
                                    ``(II) does not qualify as a good 
                                that originates in the territory of 
                                that country;
                        tariff treatment that is identical to the 
                        preferential tariff treatment that is accorded 
                        during such time under Appendix 6.B of the 
                        Annex to a like article that is a product of 
                        Mexico and imported into the United States.
                            ``(ii) Prior consultation.--The United 
                        States Trade Representative may implement the 
                        preferential tariff treatment described in 
                        clause (i) only after consultation with 
                        representatives of the United States textile 
                        and apparel industry and other interested 
                        parties regarding--
                                    ``(I) the specific articles to 
                                which such treatment will be extended,
                                    ``(II) the annual quantity levels 
                                to be applied under such treatment and 
                                any adjustment to such levels,
                                    ``(III) the allocation of such 
                                annual quantities among the beneficiary 
                                countries that export the articles 
                                concerned to the Untied States, and
                                    ``(IV) any other applicable 
                                provision.
                            ``(iii) Adjustment of certain bilateral 
                        textile agreements.--The United States Trade 
                        Representatives shall undertake negotiations 
                        for purposes of seeking appropriate reductions 
                        in the quantities of textile and apparel 
                        articles that are permitted to be imported into 
                        the United States under bilateral agreements 
                        with beneficiary countries in order to reflect 
                        the quantities of textile and apparel articles 
                        of each respective country that are exempt from 
                        quota treatment by reason of paragraph 
                        (2)(A)(iii).
                    ``(C) Handloomed, handmade, and folklore 
                articles.--For purposes of subparagraph (A), the United 
                States Trade Representative shall consult with 
                representatives of the beneficiary country 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) or Appendix 
                3.1.B.11 of the Annex.
                    ``(D) Bilateral emergency actions.--The President 
                may take--
                            ``(i) bilateral emergency tariff actions of 
                        a kind described in section 4 of the Annex with 
                        respect to any textile or apparel article 
                        imported from a beneficiary country if the 
                        application of tariff treatment under 
                        subparagraph (A) to such article results in 
                        conditions that would be cause for the taking 
                        of such actions under such section 4 with 
                        respect to a like article that is a product of 
                        Mexico; or
                            ``(ii) bilateral emergency quantitative 
                        restriction actions of a kind described in 
                        section 5 of the Annex with respect to imports 
                        of any textile or apparel article described in 
                        subparagraph (B)(i) (I) and (II) if the 
                        importation of such article into the United 
                        States results in conditions that would be 
                        cause for the taking of such actions under such 
                        section 5 with respect to a like article that 
                        is a product of Mexico.
            ``(3) NAFTA 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 originates in the 
                        territory of a beneficiary country shall be 
                        identical to the tariff treatment that is 
                        accorded during such time under Annex 302.2 of 
                        the NAFTA to a like article that originates in 
                        the territory of Mexico and is imported into 
                        the United States. Such articles shall be 
                        subject to the provisions for emergency action 
                        under chapter 8 of part two of the NAFTA to the 
                        same extent as if such articles were imported 
                        from Mexico.
                            ``(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 Harmonized Tariff Schedule 
                        of the United States.
                    ``(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.--The provisions of chapter 5 of 
        part two of the NAFTA regarding customs procedures apply to 
        importations under paragraphs (2) and (3) of articles from 
        beneficiary countries.
            ``(5) Definitions.--As used in this subsection--
                    ``(A) The term `the Annex' means Annex 300-B of the 
                NAFTA.
                    ``(B) The term `NAFTA' means the North American 
                Free Trade Agreement entered into between the United 
                States, Mexico, and Canada on December 17, 1992.
                    ``(C) The term `textile or apparel article' means 
                any article referred to in paragraph (1)(A) that is a 
                good listed in Appendix 1.1 of the Annex.
                    ``(D) The term `transition period' means, with 
                respect to a beneficiary country, the period that 
                begins on the date of the enactment of the Caribbean 
                Basin Free Trade Agreements Act and ends on the earlier 
                of--
                            ``(i) the date that is the 3rd anniversary 
                        of such date of enactment, or
                            ``(ii) the date on which--
                                    ``(I) there enters into force with 
                                respect to the United States a trade 
                                agreement entered into under the 
                                authority of section 202(a) of the 
                                Caribbean Basin Free Trade Agreements 
                                Act and to which the beneficiary 
                                country is a party, or
                                    ``(II) the beneficiary country 
                                accedes to the NAFTA.
                    ``(E) An article shall be treated as having 
                originated in the territory of a beneficiary country if 
                the article meets the rules of origin for a good set 
                forth in chapter 4 of part two of the NAFTA or in 
                Appendix 6.A of the Annex. In applying such chapter 4 
                or Appendix 6.A with respect to a beneficiary country 
                for purposes of this subsection, no countries other 
                than the United States and beneficiary countries may be 
                treated as being Parties to the NAFTA.''.
    (b) Conforming Amendments.--The Caribbean Basin Economic Recovery 
Act is further amended--
            (1) by amending section 212(e)(1)(B) to read as follows:
                    ``(B) withdraw, suspend, or limit the application 
                of the duty-free treatment under this subtitle, and the 
                tariff and preferential tariff treatment under section 
                213(b) (2) and (3), to any article of any country,''; 
                and
            (2) by inserting ``and except as provided in section 213(b) 
        (2) and (3),'' after ``Tax Reform Act of 1986,'' in section 
        213(a)(1).

SEC. 102. EFFECT OF NAFTA ON SUGAR IMPORTS FROM BENEFICIARY COUNTRIES.

    The President shall monitor the effects, if any, that the 
implementation of the North American Free Trade Agreement has on the 
access of beneficiary countries under the Caribbean Basin Economic 
Recovery Act to the United States market for sugars, syrups, and 
molasses. If the President considers that the implementation of the 
Agreement is affecting, or will likely affect, in an adverse manner the 
access of such countries to the United States market, the President 
shall promptly--
            (1) take such actions, after consulting with interested 
        parties and with the appropriate committees of the House of 
        Representatives and the Senate; or
            (2) propose to the Congress such legislative actions;
as may be necessary or appropriate to ameliorate such adverse effect.

            TITLE II--CARIBBEAN BASIN FREE TRADE AGREEMENTS

SEC. 201. TRADE AGREEMENT FEASIBILITY AND OBJECTIVES.

    As soon as practicable, the United States Trade Representative 
shall determine the desirability and feasibility of, and a likely 
timetable for, any country that is a beneficiary country for purposes 
of the Caribbean Basin Economic Recovery Act, or a group of such 
beneficiary countries, either--
            (1) acceding to--
                    (A) the North American Free Trade Agreement 
                pursuant to Article 2204 of such Agreement, and
                    (B) as appropriate, supplemental agreements 
                pertaining to environmental, labor, and import issues; 
                or
            (2) entering into comprehensive bilateral or multilateral 
        agreements with the United States that contain provisions 
        that--
                    (A) are comparable to the provisions of the North 
                American Free Trade Agreement and, as appropriate, to 
                the provisions of supplemental agreements pertaining to 
                environmental, labor, and import issues, and
                    (B) will achieve the applicable purposes, policies, 
                and objectives set forth in section 212 (b) and (c) of 
                the Caribbean Basin Economic Recovery Act and section 
                1101 of the Omnibus Trade and Competitiveness Act of 
                1988.
The United States Trade Representative shall consult with the Committee 
on Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate regarding the determinations made under this 
section.

SEC. 202. TRADE AGREEMENT NEGOTIATING AUTHORITY.

    (a) In General.--
            (1) Authority to enter into agreements.--The President may 
        enter into trade agreements with one or more beneficiary 
        countries under the Caribbean Basin Economic Recovery Act 
        providing for the elimination or reduction of any duty imposed 
        by the United States and for the reduction or elimination of 
        barriers to, or other distortions of, the international trade 
        of the beneficiary countries or the United States, if each such 
        agreement would comply with section 201.
            (2) Limitation.--Notwithstanding any other provision of 
        law, no trade benefit shall be extended to any country by 
        reason of the extension of any trade benefit to another country 
        under a trade agreement entered into under paragraph (1) with 
        such other country.
    (b) Consultation With Congress Before Agreements Entered Into.--
            (1) Before the President enters into any trade agreement 
        under subsection (a), the President shall consult with--
                    (A) the Committee on Ways and Means of the House of 
                Representatives and the Committee on Finance of the 
                Senate; and
                    (B) each other committee of the House and the 
                Senate, and each joint committee of the Congress, which 
                has jurisdiction over legislation involving subject 
                matters which would be affected by the trade agreement.
            (2) The consultation under paragraph (1) shall include--
                    (A) the nature of the agreement;
                    (B) how and to what extent the agreement will 
                achieve the applicable purposes, policies, and 
                objectives of this title; and
                    (C) all matters relating to the implementation of 
                the agreement.
            (3) If it is proposed to implement two or more trade 
        agreements in a single implementing bill, the consultation 
        under paragraph (1) shall include the desirability and 
        feasibility of such proposed implementation.
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