[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4761 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4761

   To require the United States Trade Representative to take certain 
actions in response to the failure of the European Union to comply with 
              the rulings of the World Trade Organization.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 9, 1998

Mr. Crane (for himself, Mr. Smith of Oregon, Mr. Thomas, Mr. Stenholm, 
 Mrs. Johnson of Connecticut, Mr. Watkins, Mr. Combest, Mr. Kolbe, Mr. 
 Herger, Mr. Houghton, Mr. Tanner, Mr. Barrett of Nebraska, Mr. Camp, 
   Mr. Ewing, Mr. Sam Johnson of Texas, Mr. Nussle, Mr. Ramstad, Mr. 
 Collins, Ms. Dunn, Mr. Lewis of Kentucky, Mr. Pombo, Mr. Portman, Mr. 
 Christensen, Mr. English of Pennsylvania, Mr. Weller, and Mr. Berry) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL


 
   To require the United States Trade Representative to take certain 
actions in response to the failure of the European Union to comply with 
              the rulings of the World Trade Organization.

    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 ``Uruguay Round Agreements Compliance 
Act of 1998''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) The European Union unfairly restricts the importation 
        of billions of dollars of agricultural products from the United 
        States and other exporting nations.
            (2) Opportunities for increased United States agricultural 
        exports are undermined by unfair subsidies provided by the 
        European Union to benefit its own production and by vexing 
        tariff and nontariff trade barriers imposed on highly 
        competitive United States agricultural exports.
            (3) It is essential to the health of United States 
        agriculture that the United States seek the continued 
        elimination of restrictions imposed on United States 
        agricultural exports by the European Union.
            (4) The United States must insist on competitive 
        opportunities for United States exports of agricultural 
        products in European markets substantially equivalent to the 
        competitive opportunities afforded to European exports in 
        United States markets, and on achieving progressively fairer 
        and more open conditions of trade.
            (5) The Uruguay Round Agreements, as implemented by the 
        Uruguay Round Agreements Act, strengthened the multilateral 
        rules for trade in agricultural products and services. 
        Reflecting a principal negotiating objective established by the 
        Congress in the Omnibus Trade and Competitiveness Act of 1988, 
        the Uruguay Round Agreements obligate WTO member countries to 
        reduce and eliminate protection against imports, including 
        discriminatory practices, and to observe the rules provided in 
        the Agreements that are designed to prevent damaging and 
        unacceptable delays in the implementation of dispute settlement 
        panel reports.
            (6) On May 22, 1997, a final report of a dispute settlement 
        panel under the World Trade Organization found that the banana 
        import regime of the European Union, as well as its licensing 
        procedures for the importation of bananas, are in violation of 
        GATT 1994, the Agreement on Import Licensing Procedures, and 
        the General Agreement on Trade in Services. On September 9, 
        1997, the Appellate Body affirmed these findings. The Appellate 
        Body report and the panel report, as modified by the Appellate 
        Body, were adopted by the WTO on September 25, 1997.
            (7) On January 7, 1998, the WTO determined through binding 
        arbitration procedures that the compliance period for the 
        European Union to bring its banana regime into conformity with 
        the Uruguay Round Agreements is 15 months from September 25, 
        1997, a period which will end on January 1, 1999.
            (8) Instead of taking steps to implement promptly and 
        completely its obligations, the European Union has pursued a 
        number of dilatory tactics and has announced a new series of 
        measures to take effect on January 1, 1999, which will not 
        bring the European Union into conformity with its obligations 
        under the WTO but will make only cosmetic changes to its WTO-
        illegal scheme. Such measures undermine the WTO dispute 
        settlement process because they delay implementation, forcing 
        the United States to pursue its rights under dispute settlement 
        once again. This abuse of the dispute settlement process cannot 
        be tolerated.
            (9) A ban by the European Union on the use of hormones in 
        livestock production, which took effect on January 1, 1988, has 
        eliminated about $97,000,000 of United States red meat and meat 
        product exports to the European Union annually. The United 
        States has pursued its concerns regarding the hormone directive 
        in the GATT and the WTO since January of 1987.
            (10) On August 18, 1997, a final report of a dispute 
        settlement panel under the WTO, upholding claims of the United 
        States, found that the ban by the European Union on the use of 
        hormones in livestock production is in violation of the 
        obligations of the European Union under the Agreement on the 
        Application of Sanitary and Phytosanitary Measures. The panel 
        affirmed that the ban is not based on science, risk assessment, 
        or relevant international standards. This panel report and a 
        report by the Appellate Body affirming the finding was adopted 
        by the WTO on February 13, 1998.
            (11) On May 29, 1998, the WTO determined through binding 
        arbitration procedures that the compliance period for the 
        European Union to implement the rulings and recommendations of 
        the WTO on the beef hormone ban will end on May 13, 1999.
            (12) As in the case of bananas, the European Union seeks to 
        abuse the system of dispute settlement with endless delay, 
        showing no signs of ever coming into compliance.
            (13) Together, these two WTO dispute settlement cases 
        represent important precedents for agricultural trade in the 
        areas of tariffs, quotas, import licensing, services, and the 
        use of sound science as a basis for the application of sanitary 
        and phytosanitary standards.
            (14) Successful resolution of these cases will serve to 
        indicate whether the new Uruguay Round Agreements that went 
        into effect in 1995 will operate as an effective means for the 
        United States to resolve trade disputes.
            (15) Serious consequences are necessary to counteract the 
        European Union's deplorable tactics and threat to the dispute 
        settlement system.
            (16) Retaliation is a remedy of last resort. Nevertheless, 
        because the European Union has deliberately flaunted the 
        internationally agreed rules of dispute settlement, thereby 
        jeopardizing United States companies, workers, farmers, and 
        ranchers, serious and immediate action is necessary.

SEC. 3. ACTIONS IN RESPONSE TO EU BANANA REGIME.

    (a) In General.--Notwithstanding the provisions of section 6, the 
Trade Representative shall, in accordance with this section, take 
action under section 301(c)(1)(A) and (B) of the Trade Act of 1974, as 
if a determination had been made under section 304(a)(1) of that Act 
that the practices of the European Union regarding the importation of 
bananas violate, or are inconsistent with, or otherwise deny benefits 
to the United States under the Uruguay Round Agreements. Any such 
action to eliminate such practices shall be devised so as to affect 
goods or services of the European Union in an amount that is equivalent 
in value to the burden or restriction being imposed by the European 
Union on United States commerce.
    (b) Preliminary List of Articles for Increased Tariffs.--By not 
later than November 10, 1998, the Trade Representative shall publish, 
and provide an opportunity for public comment on, a proposed list of 
actions to be taken under subsection (a).
    (c) Final List.--By not later than December 15, 1998, the Trade 
Representative, after taking into account comments submitted by the 
public on the proposed list, shall publish a final list of actions to 
be taken under subsection (a). Prior to publishing the final list, the 
Trade Representative shall also consult with the Committee on Ways and 
Means and the Committee on Agriculture of the House of Representatives 
and the Committee on Finance and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate with respect to the composition 
of the final list.
    (d) Implementation of Final Actions.--The Trade Representative 
shall endeavor to take all action authorized under Article 22.2 of the 
Understanding on Rules and Procedures Governing the Settlement of 
Disputes, and the Trade Representative shall proclaim the measures 
included on the list published under subsection (c) to go into effect 
on February 1, 1999, unless the Trade Representative determines and 
certifies to the Congress that--
            (1) the Dispute Settlement Body has adopted a report that--
                    (A) the rights of the United States under the 
                Uruguay Round Agreements are not being denied by the 
                practices of the European Union regarding the 
                importation of bananas; or
                    (B) the practices of the European Union regarding 
                the importation of bananas--
                            (i) are not a violation of, or inconsistent 
                        with, the rights of the United States; or
                            (ii) do not deny, nullify, or impair 
                        benefits to the United States under the Uruguay 
                        Round Agreements; or
            (2) the European Union is taking satisfactory measures to 
        grant the rights of the United States under the Uruguay Round 
        Agreements;
            (3) the European Union has--
                    (A) agreed to eliminate or phase out the practices 
                referred to in subsection (a); or
                    (B) agreed to an imminent solution to the burden or 
                restriction on United States commerce that is 
                satisfactory to the Trade Representative;
            (4) it is impossible for the European Union to achieve the 
        results described in paragraph (2) or (3), as appropriate, but 
        the European Union agrees to provide to the United States 
        compensatory trade benefits that are satisfactory to the Trade 
        Representative;
            (5) in extraordinary cases, where the taking of action 
        under this section would have an adverse impact on the United 
        States economy substantially out of proportion to the benefits 
        of such action, taking into account the impact of not taking 
        such action on the credibility of title III of the Trade Act of 
        1974 and the findings and provisions of this Act; or
            (6) the taking of action under this section would cause 
        serious harm to the national security of the United States.
    (e) Arbitration.--In the event that the European Union seeks 
arbitration under Article 22.6 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes, the Trade 
Representative shall, notwithstanding the requirements of subsection 
(d), proclaim the measures included on the list published under 
subsection (c) to go into effect on the date that the arbitration is 
concluded, but in no event later than March 3, 1999. If, as a result of 
such arbitration, the arbitrator concludes that the measures are not 
consistent with Articles 22.3 or 22.4, the measures shall be adjusted 
to be in compliance with Articles 22.3 and 22.4.
    (f) Suspension of Liquidation.--In applying subsection (d), the 
Trade Representative shall order the suspension of liquidation of all 
entries of merchandise included on the list published under subsection 
(c) which are entered, or withdrawn from warehouse for consumption, on 
or after January 2, 1999, through January 31, 1999, or, in the case of 
arbitration under subsection (e), until the date that the arbitration 
is concluded but in no event later than March 2, 1999. On the date that 
the Trade Representative proclaims the measures included on the list 
published under subsection (c), the Trade Representative shall also 
proclaim the measures to apply to merchandise for which liquidation had 
been suspended and shall order terminated the suspension.
    (g) Consultation With Congress and Domestic Industry.--In 
determining whether any of the conditions described in paragraphs (1) 
through (6) of subsection (d) exist, the Trade Representative shall 
consult with the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate, and with 
representatives of the domestic industry concerned, and shall provide 
an opportunity for the presentation of views by other interested 
persons affected by the proposed determination concerning the effects 
of the determination and whether such a determination is appropriate.
    (h) Notice; Report to Congress.--The Trade Representative shall 
promptly publish in the Federal Register notice of, and report in 
writing to the Congress with respect to, any determination made under 
paragraphs (1) through (6) of subsection (d), together with the reasons 
therefor.

SEC. 4. ACTIONS IN RESPONSE TO EU BEEF HORMONE BAN.

    (a) In General.--Notwithstanding the provisions of section 6, the 
Trade Representative shall, in accordance with this section, take 
action under section 301(c)(1)(A) and (B) of the Trade Act of 1974, as 
if a determination had been made under section 304(a)(1) of that Act 
that the practices of the European Union regarding the use of hormones 
in livestock production violate, or are inconsistent with, or otherwise 
deny benefits to the United States under the Uruguay Round Agreements. 
Any such action to eliminate such practices shall be devised so as to 
affect goods or services of the European Union in an amount that is 
equivalent in value to the burden or restriction being imposed by the 
European Union on United States commerce.
    (b) Preliminary List of Articles for Increased Tariffs.--By not 
later than April 1, 1999, the Trade Representative shall publish, and 
provide an opportunity for public comment on, a proposed list of 
actions to be taken under subsection (a).
    (c) Final List.--By not later than May 3, 1999, the Trade 
Representative, after taking into account comments submitted by the 
public on the proposed list, shall publish a final list of actions to 
be taken under subsection (a). Prior to publishing the final list, the 
Trade Representative shall also consult with the Committee on Ways and 
Means and the Committee on Agriculture of the House of Representatives 
and the Committee on Finance and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate with respect to the composition 
of the final list.
    (d) Implementation of Final Actions.--The Trade Representative 
shall endeavor to take all action authorized under Article 22.2 of the 
Understanding on Rules and Procedures Governing the Settlement of 
Disputes, and the Trade Representative shall proclaim the measures 
included on the list published under subsection (c) to go into effect 
on June 13, 1999, unless the Trade Representative determines and 
certifies to the Congress that--
            (1) the Dispute Settlement Body has adopted a report that--
                    (A) the rights of the United States under the 
                Uruguay Round Agreements are not being denied by the 
                practices of the European Union regarding the use of 
                hormones in livestock production; or
                    (B) the practices of the European Union regarding 
                the use of hormones in livestock production--
                            (i) are not a violation of, or inconsistent 
                        with, the rights of the United States; or
                            (ii) do not deny, nullify, or impair 
                        benefits to the United States under the Uruguay 
                        Round Agreements; or
            (2) the European Union is taking satisfactory measures to 
        grant the rights of the United States under the Uruguay Round 
        Agreements;
            (3) the European Union has--
                    (A) agreed to eliminate or phase out the practices 
                referred to in subsection (a); or
                    (B) agreed to an imminent solution to the burden or 
                restriction on United States commerce that is 
                satisfactory to the Trade Representative;
            (4) it is impossible for the European Union to achieve the 
        results described in paragraph (2) or (3), as appropriate, but 
        the European Union agrees to provide to the United States 
        compensatory trade benefits that are satisfactory to the Trade 
        Representative;
            (5) in extraordinary cases, where the taking of action 
        under this section would have an adverse impact on the United 
        States economy substantially out of proportion to the benefits 
        of such action, taking into account the impact of not taking 
        such action on the credibility of title III of the Trade Act of 
        1974 and the findings and provisions of this Act; or
            (6) the taking of action under this section would cause 
        serious harm to the national security of the United States.
    (e) Arbitration.--In the event that the European Union seeks 
arbitration under Article 22.6 of the Understanding on Rules and 
Procedures Governing the Settlement of Disputes, the Trade 
Representative shall, notwithstanding the requirements of subsection 
(d), proclaim the measures included on the list published under 
subsection (c) to go into effect on the date that the arbitration is 
concluded, but in no event later than July 13, 1999. If, as a result of 
such arbitration, the arbitrator concludes that the measures are not 
consistent with Articles 22.3 or 22.4, the measures shall be adjusted 
to be in compliance with Articles 22.3 and 22.4.
    (f) Suspension of Liquidation.--In applying subsection (d), the 
Trade Representative shall order the suspension of liquidation of all 
entries of merchandise included on the list published under subsection 
(c) which are entered, or withdrawn from warehouse for consumption, on 
or after May 14, 1999, through June 12, 1999, or, in the case of 
arbitration under subsection (e), until the date that the arbitration 
is concluded but in no event later than July 12, 1999. On the date that 
the Trade Representative proclaims the measures included on the list 
published under subsection (c), the Trade Representative shall also 
proclaim the measures to apply to merchandise for which liquidation had 
been suspended and shall order terminated the suspension.
    (g) Consultation With Congress and Domestic Industry.--In 
determining whether any of the conditions described in paragraphs (1) 
through (6) of subsection (d) exist, the Trade Representative shall 
consult with the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate, and with 
representatives of the domestic industry concerned, and shall provide 
an opportunity for the presentation of views by other interested 
persons affected by the proposed determination concerning the effects 
of the determination and whether such a determination is appropriate.
    (h) Notice; Report to Congress.--The Trade Representative shall 
promptly publish in the Federal Register notice of, and report in 
writing to the Congress with respect to, any determination made under 
paragraphs (1) through (6) of subsection (d), together with the reasons 
therefor.

SEC. 5. MODIFICATION AND TERMINATION OF ACTIONS.

    (a) In General.--The Trade Representative may modify or terminate 
any action, subject to the specific direction, if any, of the President 
with respect to such action, that is being taken under section 4 or 
section 5 if--
            (1) any of the conditions described in paragraphs (1) 
        through (6) of section 4(d) (in the case of an action under 
        section 4), or any of the conditions described in paragraphs 
        (1) through (6) of section 5(d) (in the case of an action under 
        section 5), exist; or
            (2) the burden or restriction on United States commerce of 
        the denial of rights, or of the practices, that are the subject 
        of such action has increased or decreased.
    (b) Consultation With Domestic Industry.--Before taking any action 
under subsection (a) to modify or terminate any action taken under 
section 4 or section 5, the Trade Representative shall consult with 
representatives of the domestic industry concerned, and shall provide 
an opportunity for the presentation of views by other interested 
persons affected by the proposed modification or termination concerning 
the effects of the modification or termination and whether any 
modification or termination of the action is appropriate.
    (c) Notice; Report to Congress.--The Trade Representative shall 
promptly publish in the Federal Register notice of, and report in 
writing to the Congress with respect to, any modification or 
termination of any action taken under section 4 or section 5 and the 
reasons therefor.

SEC. 6. ACTION WITH WTO.

    The United States Trade Representative shall continue to make 
efforts to preserve the rights of the United States under Article 21.5 
of the Understanding on Rules and Procedures Governing the Settlement 
of Disputes concerning the measures of the European Union on the 
importation of bananas and concerning the ban by the European Union on 
the use of hormones in livestock production.

SEC. 7. DEFINITIONS

    As used in this Act:
            (1) the term ``Trade Representative'' means the United 
        States Trade Representative;
            (2) the term ``HTS'' means the Harmonized Tariff Schedule 
        of the United States;
            (3) the terms ``GATT 1994'', ``Uruguay Round Agreements'', 
        ``WTO'', ``World Trade Organization'', and ``WTO member 
        country'' have the meaning given those terms in section 2 of 
        the Uruguay Round Agreements Act (19 U.S.C. 3501);
            (4) the terms ``Agreement on the Application of Sanitary 
        and Phytosanitary Measures'', ``Agreement on Import Licensing 
        Procedures'', ``General Agreement on Trade in Services'', and 
        ``Understanding on Rules and Procedures Governing the 
        Settlement of Disputes'' refer to the agreements with those 
        names referred to in section 101(d) of the Uruguay Round 
        Agreements Act (19 U.S.C. 3511(d)); and
            (4) the terms ``Appellate Body'', ``dispute settlement 
        panel'', ``Dispute Settlement Body'', and ``General Council'' 
        have the meanings given those terms in section 121 of the 
        Uruguay Round Agreements Act (19 U.S.C. 3531).

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