[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 78 Introduced in House (IH)]

  1st Session
                                 H. R. 78

 To assess the impact of the NAFTA, to require further negotiations of 
 certain provisions of the NAFTA, to establish a commission to review 
the dispute settlement reports of the World Trade Organization, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 7, 1997

  Mr. Regula introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committee on Rules, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To assess the impact of the NAFTA, to require further negotiations of 
 certain provisions of the NAFTA, to establish a commission to review 
the dispute settlement reports of the World Trade Organization, and for 
                            other purposes.

    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 ``NAFTA Renegotiation and WTO Dispute 
Settlement Review Commission Act''.

                    TITLE I--NAFTA RENEGOTIATION ACT

SEC. 101. FINDINGS.

    The Congress makes the following findings:
            (1) Expanded markets.--One of the purposes of the NAFTA, as 
        stated in the preamble, is to ``create an expanded and secure 
        market'' for goods and services. Instead, the NAFTA has 
        resulted in a spiraling trade deficit with Mexico and Canada 
        that exceeded $30,000,000,000 in 1995; and that had reached 
        $30,000,000,000 at the end of the third quarter of 1996.
            (2) Currency stability.--One of the purposes of the NAFTA 
        is to ``ensure a predictable commercial framework for business 
        planning and investment''. However, the NAFTA contains no 
        safeguards to minimize the negative economic impacts of severe 
        shifts in currency exchange rates among the NAFTA parties. To 
        protect its own economy the United States has sought to bolster 
        the Mexican peso which has been supported by $30,000,000,000 in 
        loans.
            (3) NAFTA to be renegotiated.--Based on the experience with 
        the NAFTA since its implementation, it has become evident that 
        further negotiation is required to resolve fundamental 
        inadequacies within the NAFTA with respect to trade balances 
        and currency differentials.

SEC. 102. RENEGOTIATION OF THE NAFTA.

    (a) In General.--The President is authorized and directed to confer 
with the Governments of Canada and Mexico and to renegotiate the terms 
of the NAFTA as described in this subsection by July 31, 1998:
            (1) Renegotiation of nafta to correct trade deficits.--The 
        President is authorized and directed to confer with the 
        Governments of Canada and Mexico and to renegotiate the terms 
        of the NAFTA to provide for implementation of emergency 
        adjustments of tariffs, quotas, and other measures to stabilize 
        the flow of trade among the NAFTA parties when the United 
        States has an annual deficit in trade of goods and services 
        with another NAFTA party that exceeds 10 percent of the United 
        States exports to that party.
            (2) Renegotiate the nafta to correct currency 
        distortions.--The President is authorized and directed to 
        confer with the Governments of Canada and Mexico and to 
        renegotiate the terms of the NAFTA to provide for the 
        implementation of emergency adjustments of tariffs, quotas, and 
        other measures to mitigate the adverse effects of rapid or 
        substantial changes in exchange rates between the United States 
        dollar and the currency of another NAFTA party.

SEC. 103. REPORTS ASSESSING THE IMPACT OF NAFTA ON JOBS AND THE 
              ENVIRONMENT.

    (a) In General.--The Secretary of Commerce and the Administrator of 
the Environmental Protection Agency are authorized and directed to 
conduct the studies as described in this subsection and submit them to 
the Congress by December 31, 1997.
            (1) Report on domestic manufacturing and jobs.--The 
        Secretary of Commerce, after consultation with the appropriate 
        government agencies, shall determine the levels of exports of 
        United States manufactured goods to the NAFTA parties and 
        imports of manufactured goods from NAFTA parties, and the 
        number of jobs that have resulted from increased exports of 
        manufactured goods to NAFTA parties and the loss of jobs that 
        have resulted from increased imports of manufactured goods from 
        NAFTA parties since January 1, 1994.
            (2) Report relating to health and environmental impacts of 
        nafta.--The Administrator of the Environmental Protection 
        Agency, in consultation with the Secretarial for the NAFTA 
        Commission on Environmental Cooperation, shall conduct 
        investigations on whether pollution and health hazards have 
        worsened since January 1, 1994 and report to the Congress on 
        the outcomes of the Administration's investigations on 
        pollution and health hazards in and around the United States-
        Mexico border zone since the implementation of the NAFTA. The 
        report shall include--
                    (A) a description and status report of all 
                industrial site cleanup and environmental improvement 
                projects begun in the border zone since January 1, 
                1994; and
                    (B) information on the incidence of air and water 
                pollution since January 1, 1990, and the causes, 
                levels, and types of pollution which have occurred.

SEC. 104. CONSULTATION WITH CONGRESS.

    The President shall consult regularly with the Congress regarding 
the negotiations described in section 102. The United States Trade 
Representative shall consult with the appropriate committees of 
Congress in the development of any technical and conforming amendments 
that may be required to carry out the provisions of this Act.

SEC. 105. DEFINITIONS.

    As used in this Act:
            (1) NAFTA.--The term ``NAFTA'' means the North American 
        Free Trade Agreement entered into the United States, Canada, 
        and Mexico on December 17, 1992.
            (2) NAFTA party.--The term ``NAFTA party'' means the United 
        States, Canada, or Mexico.
            (3) United states-mexico border zone.--The term ``United 
        States-Mexico border zone'' means the area that comprises the 
        12-mile zone on the Mexican side of the United States-Mexico 
        border and the counties within any State of the United States 
        that are contiguous with Mexico.

         TITLE II--WTO DISPUTE SETTLEMENT REVIEW COMMISSION ACT

SEC. 201. CONGRESSIONAL FINDINGS AND PURPOSE.

    (a) Findings.--The Congress finds the following:
            (1) The United States joined the World Trade Organization 
        as a founding member with the goal of creating an improved 
        global trading system.
            (2) The American people must receive assurances that United 
        States sovereignty will be protected, and United States 
        interests will be advanced, within the global trading system 
        which the WTO will oversee.
            (3) The survival of the new WTO requires the continuation 
        of both trade liberalization and the ability to respond 
        effectively to unfair or otherwise harmful trade practices.
            (4) United States support for the WTO depends upon 
        obtaining mutual trade benefits through the openness of foreign 
        markets and the maintenance of effective United States and WTO 
        remedies against unfair or otherwise harmful trade practices.
            (5) Congress passed the Uruguay Round Agreements Act based 
        upon its understanding that effective trade remedies would not 
        be eroded. These remedies are essential to continue the process 
        of opening foreign markets to imports of goods and services and 
        to prevent harm to American industry and agriculture, 
        particularly through foreign dumping and subsidization.
            (6) The continued support of the Congress for the WTO is 
        dependent upon a WTO dispute settlement system that--
                    (A) operates in a fair and impartial manner;
                    (B) does not add to the obligations of or diminish 
                the rights of the United States under the Uruguay Round 
                Agreements; and
                    (C) does not exceed its authority, scope, or 
                established standard of review.
    (b) Purpose.--It is the purpose of this title to provide for the 
establishment of the WTO Dispute Settlement Review Commission to 
achieve the goals described in subsection (a)(6).

SEC. 202. ESTABLISHMENT OF COMMISSION.

    (a) Establishment.--There is established a commission to be known 
as the WTO Dispute Settlement Review Commission (hereafter in this Act 
referred to as the ``Commission'').
    (b) Membership.--
            (1) Composition.--The Commission shall be composed of five 
        members all of whom shall be judges of the Federal judicial 
        circuits and shall be appointed by the President, after 
        consultation with the majority leader and minority leader of 
        the House of Representatives, the majority leader and minority 
        leader of the Senate, the chairman and ranking member of the 
        Committee on Ways and Means of the House of Representatives, 
        and the chairman and ranking member of the Committee on Finance 
        of the Senate.
            (2) Date.--The appointments of the members of the 
        Commission shall be made no later than 60 days after the date 
        of the enactment of this Act.
    (c) Period of Appointment; Vacancies.--
            (1) In general.--Members of the Commission first appointed 
        shall each be appointed for a term of 5 years. After the 
        initial 5-year term, three members of the Commission shall be 
        appointed for terms of 3 years and the remaining two members 
        shall be appointed for terms of 2 years.
            (2) Vacancies.--
                    (A) In general.--Any vacancy on the Commission 
                shall not affect its powers, but shall be filled in the 
                same manner as the original appointment and shall be 
                subject to the same conditions as the original 
                appointment.
                    (B) Unexpired term.--An individual chosen to fill a 
                vacancy shall be appointed for the unexpired term of 
                the member replaced.
    (d) Initial Meeting.--No later than 30 days after the date on which 
all members of the Commission have been appointed, the Commission shall 
hold its first meeting.
    (e) Meetings.--The Commission shall meet at the call of the 
Chairman.
    (f) Quorum.--A majority of the members of the Commission shall 
constitute a quorum, but a lesser number of members may hold hearings.
    (g) Chairman and Vice Chairman.--The Commission shall select a 
Chairman and Vice Chairman from among its members.

SEC. 203. DUTIES OF THE COMMISSION.

    (a) Review of WTO Dispute Settlement Reports.--
            (1) In general.--The Commission shall review--
                    (A) all reports of dispute settlement panels or the 
                Appellate Body of the World Trade Organization in 
                proceedings initiated by other parties to the WTO which 
                are adverse to the United States and which are adopted 
                by the Dispute Settlement Body, and
                    (B) upon request of the United States Trade 
                Representative, and any other report of a dispute 
                settlement panel or the Appellate Body which is adopted 
                by the Dispute Settlement Body.
            (2) Scope of review.--In the case of any report described 
        in paragraph (1), the Commission shall review the report and 
        determine whether--
                    (A) the panel or the Appellate Body, as the case 
                may be, exceeded its authority or its terms of 
                reference;
                    (B) the panel or the Appellate Body, as the case 
                may be, added to the obligations of or diminished the 
                rights of the United States under the Uruguay Round 
                Agreement which is the subject of the report;
                    (C) the panel or the Appellate Body, as the case 
                may be, acted arbitrarily or capriciously, engaged in 
                misconduct, or demonstrably departed from the 
                procedures specified for panels and the Appellate Body 
                in the applicable Uruguay Round Agreement; and
                    (D) the report of the panel or the Appellate Body, 
                as the case may be, deviated from the applicable 
                standard of review, including in antidumping, 
                countervailing duty, and other unfair trade remedy 
                cases, including the standard of review set forth in 
                article 17.6 of the Agreement on Implementation of 
                article VI of the General Agreement on Tariffs and 
                Trade 1994.
            (3) Affirmative determination.--If the Commission makes an 
        affirmative determination with respect to the action of a panel 
        or the Appellate Body under subparagraph (A), (B), (C), or (D) 
        of paragraph (2), the Commission shall determine whether the 
        action of the panel or Appellate Body materially affected the 
        outcome of the report of the panel or Appellate Body.
    (b) Determination; Report.--
            (1) Determination.--No later than 120 days after the date 
        on which a report of a panel or the Appelate Body described in 
        subsection (a)(1) is adopted by the Dispute Settlement Body, 
        the Commission shall make a written determination with respect 
        to matters described in subsections (a)(2) and (a)(3).
            (2) Reports.--The Commission shall report the 
        determinations described in paragraph (1) to the Committee on 
        Ways and Means of the House of Representatives and the 
        Committee on Finance of the Senate.

SEC. 204. POWERS OF THE COMMISSION.

    (a) Hearings.--The Commission may hold such hearings, sit and act 
at such times and places, take such testimony, and receive such 
evidence as the Commission considers advisable to carry out the 
purposes of this Act.
    (b) Information From Interested Parties and Federal Agencies.--
            (1) Notice of panel or appellate body report.--The 
United States Trade Representative shall advise the Commission no later 
than 5 days after the date the Dispute Settlement Body adopts the 
report of a panel or the Appellate Body that is adverse to the United 
States and shall immediately publish notice of such advice in the 
Federal Register, along with notice of an opportunity for interested 
parties to submit.
            (2) Submissions and requests for information.--Any 
        interested party may submit comments to the Commission 
        regarding the panel or Appellate Body report. The Commission 
        may also secure directly from any Federal department or agency 
        such information as the Commission considers necessary to carry 
        out the provisions of this Act. Upon request of the Chairman of 
        the Commission, the head of such department or agency shall 
        furnish such information to the Commission.
            (3) Access to panel and appellate body documents.--The 
        United States Trade Representative shall make available to the 
        Commission all submissions and relevant documents relating to 
        the panel or Appellate Body report, including any information 
        contained in such submissions identified by the provider of the 
        information as proprietary information or information treated 
        as confidential by a foreign government.

SEC. 205. REVIEW OF DISPUTE SETTLEMENT PROCEDURES AND PARTICIPATION IN 
              THE WTO.

    (a) Affirmative Report by Commission.--
            (1) In general.--If a joint resolution described in 
        subsection (b)(1) is enacted into law pursuant to the 
        provisions of subsection (c), the United States Trade 
        Representative shall undertake negotiations to amend or modify 
        the rules and procedures of the dispute settlement 
        understanding to which such joint resolution relates.
            (2) Three affirmative reports by commission.--If a joint 
        resolution described in subsection (b)(2) is enacted into law 
        pursuant to the provisions of subsection (c), the approval of 
        the Congress, provided under section 101(a) of the Uruguay 
        Round Agreements Act, of the WTO Agreement shall cease to be 
        effective in accordance with the provisions of the joint 
        resolution and the United States shall cease to be a member of 
        the WTO.
    (b) Joint Resolution Described.--
            (1) In general.--For purposes of subsection (a)(1), a joint 
        resolution is described in this paragraph if it is a joint 
        resolution of the two Houses of Congress and the matter after 
        the resolving clause of such a joint resolution is as follows: 
        ``That the Congress authorizes and directs the United States 
        Trade Representative to undertake negotiations to amend or 
        modify the rules and procedures of the Understanding on Rules 
        and Procedures Governing the Settlement of Disputes relating to 
        XX with respect to the affirmative determination submitted to 
        the Congress by the WTO Dispute Settlement Review Commission on 
        XX,'' the first blank space being filled with the specific 
        rules and procedures with respect to which Trade Representative 
        is to undertake negotiations and the second blank space being 
        filled with the date of the affirmative determination submitted 
        to the Congress by the Commission pursuant to section 4(b) 
        which has given rise to the joint resolution.
            (2) Withdrawal resolution.--For purposes of subsection 
        (a)(2), a joint resolution is described in this paragraph if it 
        is a joint resolution of the two Houses of Congress and the 
        matter after the resolving clause of such joint resolution is 
        as follows: ``That the Congress authorizes and directs the 
        United States Trade Representative to undertake negotiations to 
        amend or modify the rules and procedures of the Understanding 
        on Rules and Procedures Governing the Settlement of Disputes 
        relating to XX with respect to the affirmative report submitted 
        to the Congress by the WTO Dispute Settlement Review Commission 
        on XX and if such negotiations do not result in a solution that 
        the Trade Representative, by XX, certifies to the Congress is 
        satisfactory, the Congress withdraws its approval, provided 
        under section 101(a) of the Uruguay Round Agreements Act, of 
        the WTO Agreement as defined in section 2(9) of the Act'', the 
        first blank space being filled with the specific rules and 
        procedures with respect to which the Trade Representative is to 
        undertake negotiations, the second blank space being filled 
        with the date of the affirmative determination submitted to the 
        Congress by the Commission pursuant to section 4(b) which has 
        given rise to the joint resolution, and the third blank space 
        being filled with the date the Congress withdraws its approval 
        of the WTO Agreement.
    (c) Procedural Provisions.--
            (1) In general.--The requirements of this subsection are 
        met if the joint resolution is enacted in accordance with this 
        subsection, and--
                    (A) in the case of a joint resolution described in 
                subsection (b)(1), the Congress adopts and transmits 
                the joint resolution to the President before the end of 
                the 90-day period (excluding any day described in 
                section 154(b) of the Trade Act of 1974) beginning on 
                the date on which the Congress receives an affirmative 
                determination from the Commission described in section 
                4(b), or
                    (B) in the case of a joint resolution described in 
                subsection (b)(2), the Commission has made 3 
                affirmative determinations described in section 4(b) 
                during a 5-year period, and the Congress adopts and 
transmits the joint resolution to the President before the end of the 
90-day period (excluding any day described in section 154(b) of the 
Trade Act of 1974) beginning on the date on which the Congress receives 
the third such affirmative determination.
            (2) Presidential veto.--In any case in which the President 
        vetoes the joint resolution, the requirements of this 
        subsection are met if each House of Congress votes to override 
        that veto on or before the later of the last day of the 90-day 
        period referred to in subparagraph (A) or (B) of paragraph (1), 
        whichever is applicable, or the last day of the 15-day period 
        (excluding any day described in section 154(b) of the Trade Act 
        of 1974) beginning on the date on which the Congress receives 
        the veto message from the President.
            (3) Introduction.--
                    (A) Time.--A joint resolution to which this section 
                applies may be introduced at any time on or after the 
                date on which the Commission transmits to the Congress 
                an affirmative determination described in section 4(b), 
                and before the end of the 90-day period referred to in 
                subparagraph (A) or (B) of paragraph (1), as the case 
                may be.
                    (B) Any member may introduce.--A joint resolution 
                described in subsection (b) may be introduced in either 
                House of the Congress by any Member of such House.
            (4) Expedited procedures.--
                    (A) General rule.--Subject to the provisions of 
                this subsection, the provisions of subsections (b), 
                (d), (e), and (f) of section 152 of the Trade Act of 
                1974 (19 U.S.C. 2192 (b), (d), (e), and (f)) apply to 
                joint resolutions described in subsection (b) to the 
                same extent as such provisions apply to resolutions 
                under such section.
                    (B) Report of discharge of committee.--If the 
                committee of either House to which a joint resolution 
                has been referred has not reported it by the close of 
                the 45th day after its introduction (excluding any day 
                described in section 154(d) of the Trade Act of 1974), 
                such committee shall be automatically discharged from 
                further consideration of the joint resolution and it 
                shall be placed on the appropriate calendar.
                    (C) Finance and ways and means committees.--It is 
                not in order for--
                            (i) the Senate to consider any joint 
                        resolution unless it has been reported by the 
                        Committee on Finance or the committee has been 
                        discharged under subparagraph (B); or
                            (ii) the House of Representatives to 
                        consider any joint resolution unless it has 
                        been reported by the Committee on Ways and 
                        Means or the committee has been discharged 
                        under subparagraph (B).
                    (D) Special rules for house.--A motion in the House 
                of Representatives to proceed to the consideration of a 
                joint resolution may only be made on the second 
                legislative day after the calendar day on which the 
                Member making the motion announces to the House his or 
                her intention to do so.
            (5) Consideration of second resolution not in order.--It 
        shall not be in order in either the House of Representatives or 
        the Senate to consider a joint resolution (other than a joint 
        resolution received from the other House), if that House has 
        previously adopted a joint resolution under this section 
        relating to the same matter.
    (d) Rules of House of Representatives and Senate.--This section is 
enacted by the Congress--
            (1) as an exercise of the rulemaking power of the House of 
        Representatives and the Senate, respectively, and as such is 
        deemed a part of the rules of each House, respectively, and 
        such procedures supersede other rules only to the extent that 
        they are inconsistent with such other rules; and
            (2) with the full recognition of the constitutional right 
        of either House to change the rules (so far as relating to the 
        procedures of that House) at any time, in the same manner, and 
        to the same extent as any other rule of that House.

SEC. 206. PARTICIPATION IN WTO PANEL PROCEEDINGS.

    (a) In General.--If the United States Trade Representative, in 
proceedings before a dispute settlement panel or the Appellate Body of 
the WTO, seeks--
            (1) to enforce United States rights under a multilateral 
        trade agreement; or
            (2) to defend a challenged action or determination of the 
        United States Government;
a private United States person that is supportive of the United States 
Government's position before the panel or Appellate Body and that has a 
direct economic interest in the panel's or Appellate Body's resolution 
of the matters in dispute shall be permitted to participate in 
consultations and panel proceedings. The Trade Representative shall 
issue regulations, consistent with subsections (b) and (c), ensuring 
full and effective participation by any such private person.
    (b) Access to Information.--The United States Trade Representative 
shall make available to persons described in subsection (a) all 
information presented to or otherwise obtained by the Trade 
Representative in connection with a WTO dispute settlement proceeding. 
The United States Trade Representative shall promulgate regulations 
implementing a protective order system to protect information 
designated by the submitting member as confidential.
    (c) Participation in Panel Process.--Upon request from a person 
described in subsection (a), the United States Trade Representative 
shall--
            (1) consult in advance with such person regarding the 
        content of written submissions from the United States to the 
        WTO panel concerned or to the other member countries involved;
            (2) include, where appropriate, such person or its 
        appropriate representative as an advisory member of the 
        delegation in sessions of the dispute settlement panel;
            (3) allow such special delegation member, where such member 
        would bring special knowledge to the proceeding, to appear 
        before the panel, directly or through counsel, under the 
        supervision of responsibility United States Government 
        officials; and
            (4) in proceedings involving confidential information, 
        allow appearance of such person only through counsel as a 
        member of the special delegation.

SEC. 207. DEFINITIONS.

    For purposes of this Act:
            (1) Appellate body.--The term ``Appellate Body'' means the 
        Appellate Body established under article 17.1 of the Dispute 
        Settlement Understanding.
            (2) Adverse to the united states.--The term ``adverse to 
        the United States'' includes any report which holds any law, 
        regulation, or application thereof by a government agency to be 
        inconsistent with international obligations under a Uruguay 
        Round Agreement (or a nullification or impairment thereof), 
        whether or not there are other elements of the decision which 
        favor arguments made by the United States.
            (3) Dispute settlement panel; panel.--The terms ``dispute 
        settlement panel'' and ``panel'' mean a panel established 
        pursuant to article 6 of the Dispute Settlement Understanding.
            (4) Dispute settlement body.--The term ``Dispute Settlement 
        Body'' means the Dispute Settlement Body administering the 
        rules and procedures set forth in the Dispute Settlement 
        Understanding.
            (5) Dispute settlement understanding.--The term ``Dispute 
        Settlement Understanding'' means the understanding on rules and 
        procedures governing the settlement of disputes referred to in 
        section 101(d)(16) of the Uruguay Round Agreements Act.
            (6) Uruguay round agreement.--The term ``Uruguay Round 
        Agreement'' means any of the agreements described in section 
        101(d) of the Uruguay Round Agreements Act.
            (7) World trade organization; wto.--The term ``World Trade 
        Organization'' and ``WTO'' mean the organization established 
        pursuant to the WTO Agreement.
            (8) WTO agreement.--The term ``WTO Agreement'' means the 
        Agreement Establishing the World Trade Organization entered 
        into on April 15, 1994.
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