[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3673 Reported in House (RH)]






                                                 Union Calendar No. 567
106th CONGRESS
  2d Session
                                H. R. 3673

                      [Report No. 106-803, Part I]

 To provide certain benefits to Panama if Panama agrees to permit the 
  United States to maintain a presence there sufficient to carry out 
                 counternarcotics and related missions.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 16, 2000

  Mr. Gilman introduced the following bill; which was referred to the 
Committee on International Relations, and in addition to the Committee 
 on Ways and Means, 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

                             July 27, 2000

         Reported from the Committee on International Relations

                             July 27, 2000

   Referral to the Committee on Ways and Means extended for a period 
                ending not later than September 22, 2000

                           September 21, 2000

   Referral to the Committee on Ways and Means extended for a period 
                 ending not later than October 6, 2000

                            October 6, 2000

  Additional sponsors: Mr. Rogan, Mr. Cunningham, Mr. Nethercutt, Mr. 
 Cook, Mrs. Thurman, Mr. Cooksey, Mr. Cox, Mr. Dreier, Mr. Stupak, Mr. 
         Goss, Mr. Spence, Mr. Hyde, and Mr. Burton of Indiana

                            October 6, 2000

 Committee on Ways and Means discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed

_______________________________________________________________________

                                 A BILL


 
 To provide certain benefits to Panama if Panama agrees to permit the 
  United States to maintain a presence there sufficient to carry out 
                 counternarcotics and related missions.

    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 ``United States-Panama Partnership Act 
of 2000''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) Since Panama gained its independence in 1903, the 
        United States and Panama have maintained extremely close 
        relations, resting primarily on the shared interest of both 
        countries in the smooth operation and defense of the Panama 
        Canal.
            (2) In order to defend the Panama Canal, the United States 
        maintained a military presence in Panama for over 90 years.
            (3) In recent decades, the mission of United States 
        military forces stationed in Panama evolved to include 
        significant responsibilities for the conduct of counter 
        narcotics operations in Latin America and the Caribbean, and 
        for the provision of logistical support to such operations by 
        other countries and other agencies of the United States 
        Government.
            (4) In accordance with the Panama Canal Treaty of 1977, the 
        United States withdrew all United States military personnel 
        from Panama by December 31, 1999, and turned over all United 
        States military facilities to the Government of Panama.
            (5) Under the terms of the Treaty Concerning the Permanent 
        Neutrality and Operation of the Panama Canal of 1977, the 
        United States retains responsibilities for the defense of the 
        Panama Canal.
            (6) A 1977 protocol to the Treaty Concerning the Permanent 
        Neutrality and Operation of the Panama Canal provides that 
        ``Nothing in the treaty shall preclude the Republic of Panama 
        and the United States from making  . . . agreements or 
        arrangements for the stationing of any United States military 
        forces or the maintenance of defense sites after [December 31, 
        1999] in Panama that Panama and the United States may deem 
        necessary or appropriate''.
            (7) Public opinion surveys in Panama in recent years 
        consistently have shown that approximately 70 percent of the 
        population of Panama support a United States presence in 
        Panama.
            (8) On September 6, 1995, during an official visit of 
        Panama's President Ernesto Perez Balladares to the United 
        States, it was announced that Presidents Clinton and Perez 
        Balladares had agreed to begin informal consultations on the 
        possible extension beyond December 31, 1999, of a United States 
        presence in Panama.
            (9) Early discussions pursuant to the announcement of 
        September 6, 1995, were very encouraging, but the discussions 
        foundered after the United States refused to consider providing 
        any form of compensation to Panama in exchange for an extension 
        of the United States presence in Panama.
            (10) After it became clear that no agreement could be 
        reached on extending the United States presence in Panama past 
        1999 in its customary form, Panama proposed negotiations on the 
        establishment of a Multinational Counternarcotics Center (MCC), 
        which would permit the continuation of a limited United States 
        presence in Panama past 1999 and for which no compensation 
        would be expected.
            (11) On December 24, 1997, the United States and Panama 
        announced that preliminary agreement had been reached on 
        establishment of the MCC, but the Government of Panama 
        subsequently reopened a number of issues on which preliminary 
        agreement had been reached.
            (12) Following rejection by the voters of Panama on August 
        30, 1998, of a proposed constitutional amendment to permit 
        President Perez Balladares to seek reelection, the United 
        States and Panama announced on September 24, 1998, that the MCC 
negotiations had failed and would be terminated.
            (13) Panama and the United States continue to have a strong 
        shared interest in maintaining a United States presence in 
        Panama and both countries should seek to agree on an 
        appropriate package of benefits to facilitate such a presence.

SEC. 3. CERTIFICATION AND REPORT REGARDING AGREEMENT TO MAINTAIN A 
              UNITED STATES PRESENCE IN PANAMA.

    (a) Submission of Certification and Report.--At any time after the 
date of the enactment of this Act, the President may submit to the 
Committee on International Relations of the House of Representatives 
and the Committee on Foreign Relations of the Senate the certification 
described in subsection (b) and the report described in subsection (c).
    (b) Content of Certification.--The certification referred to in 
subsection (a) is a certification by the President that the United 
States and the Government of Panama have reached an agreement 
permitting the United States, for a period of not less than 15 years, 
to maintain a presence, alone or in conjunction with other friendly 
countries, sufficient to carry out necessary counternarcotics, search 
and rescue, logistical, training, and related missions at Howard Air 
Force Base, Fort Kobbe, Rodman Naval Station, and Fort Sherman, under 
terms and conditions substantially similar to those applied to the 
United States presence at those facilities during the period beginning 
on October 1, 1979, and ending on December 31, 1999.
    (c) Content of Report.--The report referred to in subsection (a) is 
a report containing the following:
            (1) The text of the agreement described in subsection (b) 
        that has been reached between the United States and the 
        Government of Panama.
            (2) A detailed explanation of the manner in which the 
        agreement ensures that the United States will be able to use 
        the facilities subject to the agreement under terms and 
        conditions substantially similar to those that applied during 
        the period beginning on October 1, 1979, and ending on December 
        31, 1999.
            (3) If the agreement provides for a United States presence 
        at the facilities subject to the agreement for a period longer 
        than 15 years, a statement of the date on which that presence 
        expires under the agreement.
    (d) Submission in Classified Form.--To the degree necessary, the 
report under subsection (c) may be submitted in classified form.

SEC. 4. BENEFITS.

    (a) In General.--If the President submits the certification and 
report under section 3, then the provisions of subsections (b) through 
(h) apply.
    (b) Assistance for Bridge Project in Panama.--
            (1) Action by trade and development agency.--The Director 
        of the Trade and Development Agency shall consider a grant or 
        grants to assist in the design, financial planning, training, 
        and other preparatory steps for the construction of a new 
        bridge across the Panama Canal.
            (2) Reporting requirement.--Not later than 1 year after the 
        date on which the President submits the certification and 
        report under section 3, the Director of the Trade and 
        Development Agency shall submit a report to the Committee on 
        International Relations of the House of Representatives and the 
        Committee on Foreign Relations of the Senate regarding the 
        steps taken pursuant to paragraph (1) and the status of 
        planning for construction of a new bridge across the Panama 
        Canal.
    (c) Assistance for Sewage Treatment Plant Project in Panama.--
            (1) Action by trade and development agency.--The Director 
        of the Trade and Development Agency shall consider a grant or 
        grants to assist in the design, financial planning, training, 
        and other preparatory steps for the construction of a new 
        sewage treatment plant for Panama City.
            (2) Reporting requirement.--Not later than 1 year after the 
        date on which the President submits the certification and 
        report under section 3, the Director of the Trade and 
        Development Agency shall submit a report to the Committee on 
        International Relations of the House of Representatives and the 
        Committee on Foreign Relations of the Senate regarding the 
        steps taken pursuant to paragraph (1) and the status of 
        planning for construction of a new sewage treatment plant for 
        Panama City.
    (d) Scholarship Program for Panama.--
            (1) Action by agency for international development.--The 
        Administrator of the Agency for International Development shall 
        ensure that, for the duration of the agreement period, up to 
        $2,000,000 of the funds made available each year to the 
        Cooperative Association of States for Scholarships program 
        shall be made available for scholarships for deserving students 
        from Panama to study in the United States.
            (2) Reporting requirement.--Not later than 1 year after the 
        date on which the President submits the certification and 
        report under section 3, the Administrator of the Agency for 
        International Development shall submit a report to the 
        Committee on International Relations of the House of 
        Representatives and the Committee on Foreign Relations of the 
        Senate regarding the steps taken pursuant to paragraph (1).
    (e) Treatment of Certain Textile and Apparel Articles.--
            (1) Equivalent tariff and quota treatment.--During the 
        transition period--
                    (A) the tariff treatment accorded at any time to 
                any textile or apparel article that originates in 
                Panama shall be identical to the tariff treatment that 
                is accorded at such time under section 2 of the Annex 
                to an article described in the same 8-digit subheading 
                of the HTS that is a good of Mexico and is imported 
                into the United States;
                    (B) duty-free treatment under the Caribbean Basin 
                Economic Recovery Act shall apply to any textile or 
                apparel article that is imported into the United States 
                from Panama and that--
                            (i) is assembled in Panama, from fabrics 
                        wholly formed and cut in the United States from 
                        yarns formed in the United States, and is 
                        entered--
                                    (I) under subheading 9802.00.80 of 
                                the HTS; or
                                    (II) under chapter 61, 62, or 63 of 
                                the HTS if, after such assembly, the 
                                article would have qualified for 
                                treatment under subheading 9802.00.80 
                                of the HTS, but for the fact the 
                                article was subjected to bleaching, 
                                garments dyeing, stone-washing, enzyme-
                                washing, acid-washing, perma-pressing, 
                                oven-baking, or embroidery;
                            (ii) is knit-to-shape in Panama from yarns 
                        wholly formed in the United States;
                            (iii) is made in Panama from fabric knit in 
                        Panama from yarns wholly formed in the United 
                        States;
                            (iv) is cut and assembled in Panama from 
                        fabrics wholly formed in the United States from 
yarns wholly formed in the United States; or
                            (v) is identified under paragraph (3) as a 
                        handloomed, handmade, or folklore article of 
                        Panama and is certified as such by the 
                        competent authority of that country; and
                    (C) 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 Panama, 
                        or
                            (ii) qualifies for duty-free treatment 
                        under clause (i), (ii), (iii), (iv), or (v) of 
                        subparagraph (B).
            (2) Treatment of other nonoriginating textile and apparel 
        articles.--
                    (A) Preferential tariff treatment.--Subject to 
                subparagraph (B), the President 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 Panama, but
                            (ii) does not qualify as a good that 
                        originates in the territory of Panama or is 
                        eligible for benefits under paragraph (1)(B),
                tariff treatment that is identical to the in-
                preference-level tariff treatment accorded at such time 
                under Appendix 6.B of the Annex to an article described 
                in the same 8-digit subheading of the HTS that is a 
                product of Mexico and is imported into the United 
                States. For purposes of this subparagraph, the ``in-
                preference-level tariff treatment'' accorded to an 
                article that is a product of Mexico is the rate of duty 
                applied to that article when imported in quantities 
                less than or equal to the quantities specified in 
                Schedule 6.B.1, 6.B.2., or 6.B.3. of the Annex for 
                imports of that article from Mexico into the United 
                States.
                    (B) Limitations on all articles.--Tariff treatment 
                under subparagraph (A) may be extended, during any 
                calendar year, to not more than 6,750,000 square meter 
                equivalents of cotton or man-made fiber apparel, to not 
                more than 225,000 square meter equivalents of wool 
                apparel, and to not more than 3,750,000 square meter 
                equivalents of goods entered under subheading 
                9802.00.80 of the HTS.
                    (C) Prior consultation.--The President may 
                implement the preferential tariff treatment described 
                in subparagraph (A) 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, and
                            (ii) the annual quantities of such articles 
                        that may be imported at the preferential duty 
                        rates described in subparagraph (A).
            (3) Handloomed, handmade, and folklore articles.--For 
        purposes of paragraph (1), the United States Trade 
        Representative shall consult with representatives of Panama 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.
            (4) Bilateral emergency actions.--(A) 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 Panama if the 
                application of tariff treatment under paragraph (1) to 
                such article results in conditions that would be cause 
                for the taking of such actions under such section 4 
                with respect to an article described in the same 8-
                digit subheading of the HTS that is imported from 
                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 clauses (i) and (ii) of paragraph 
                (2)(A) 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.
            (B) The requirement in paragraph (5) of section 4 of the 
        Annex (relating to providing compensation) shall not be deemed 
        to apply to a bilateral emergency action taken under this 
        paragraph.
            (C) For purposes of applying bilateral emergency action 
        under this paragraph--
                    (i) the term ``transition period'' in sections 4 
                and 5 of the Annex shall be deemed to be the period 
                defined in subsection (h)(8); and
                    (ii) any requirements to consult specified in 
                section 4 or 5 of the Annex are deemed to be satisfied 
                if the President requests consultations with Panama and 
                Panama does not agree to consult within the time period 
                specified under such section 4 or 5, whichever is 
                applicable.
    (f) Treatment of Certain Other Articles Originating in Panama.--
            (1) Equivalent tariff treatment.--
                    (A) In general.--Subject to subparagraph (B), the 
                tariff treatment accorded at any time during the 
                transition period to any article referred to in any of 
                paragraphs (2) through (5) of section 213(b) of the 
                Caribbean Basin Economic Recovery Act that originates 
                in Panama shall be identical to the tariff treatment 
                that is accorded at such time under Annex 302.2 of the 
                NAFTA to an article described in the same 8-digit 
                subheading of the HTS that is a good of Mexico and is 
                imported into the United States.
                    (B) Exception.--Subparagraph (A) does not apply to 
                any article accorded duty-free treatment under U.S. 
                Note 2(b) to subchapter II of chapter 98 of the HTS.
            (2) Relationship to other duty reductions.--If at any time 
        during the transition period the rate of duty that would (but 
        for action taken under paragraph (1)(A) in regard to such 
        period) apply with respect to any article under section 213(h) 
        of the Caribbean Basin Economic Recovery Act 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.
    (g) Customs Procedures.--
            (1) In general.--
                    (A) Regulations.--Any importer that claims 
                preferential tariff treatment under subsection (e) or 
                (f) shall comply with customs procedures similar in all 
                material respects to the requirements of Article 502(1) 
                of the NAFTA as implemented pursuant to United States 
                law, in accordance with regulations promulgated by the 
                Secretary of the Treasury.
                    (B) Determination.--In order to qualify for such 
                preferential tariff treatment and for a Certificate of 
                Origin to be valid with respect to any article for 
                which such treatment is claimed, there shall be in 
                effect a determination by the President that Panama has 
                implemented and follows, or is making substantial 
                progress toward implementing and following, procedures 
                and requirements similar in all material respects to 
                the relevant procedures and requirements under chapter 
                5 of the NAFTA.
            (2) Certificate of origin.--The Certificate of Origin that 
        otherwise would be required pursuant to the provisions of 
        paragraph (1) shall not be required in the case of an article 
        imported under subsection (e) or (f) if such Certificate of 
        Origin would not be required under Article 503 of the NAFTA (as 
        implemented pursuant to United States law), if the article were 
        imported from Mexico.
            (3) Penalties for transshipments.--If the President 
        determines, based on sufficient evidence, that an exporter has 
        engaged in willful illegal transshipment or willful customs 
        fraud with respect to textile or apparel articles for which 
        preferential tariff treatment under paragraph (1) or (2) of 
        subsection (e) is claimed, then the President shall deny all 
        benefits under subsections (e) and (f) of this section to such 
        exporter, and any successors of such exporter, for a period of 
        2 years.
            (4) Report by ustr on cooperation concerning 
        circumvention.--The United States Commissioner of Customs shall 
        conduct a study analyzing the extent to which Panama--
                    (A) has cooperated fully with the United States, 
                consistent with its domestic laws and procedures, in 
                instances of circumvention or alleged circumvention of 
                existing quotas on imports of textile and apparel 
                goods, to establish necessary relevant facts in the 
                places of import, export, and, where applicable, 
                transshipment, including investigation of circumvention 
                practices, exchanges of documents, correspondence, 
                reports, and other relevant information, to the extent 
                such information is available;
                    (B) has taken appropriate measures, consistent with 
                its domestic laws and procedures, against exporters and 
                importers involved in instances of false declaration 
                concerning fiber content, quantities, description, 
                classification, or origin of textile and apparel goods; 
                and
                    (C) has penalized the individuals and entities 
                involved in any such circumvention, consistent with its 
                domestic laws and procedures, and has worked closely to 
                seek the cooperation of any third country to prevent 
                such circumvention from taking place in that third 
                country.
        The United States Trade Representative shall submit to the 
        Congress, not later than 1 year after the certification is 
        submitted under section 3, a report on the study conducted 
        under this paragraph.
    (h) Definitions.--For purposes of this section--
            (1) Agreement period.--The term ``agreement period'' means 
        the period that begins on the date on which the certification 
        is submitted under section 3, and ends on the date that is 15 
        years after such date, or such later date as is reported to the 
        Congress under section 3(c)(3).
            (2) Annex.--The term ``the Annex'' means Annex 300-B of the 
        NAFTA.
            (3) Entered.--The term ``entered'' means entered, or 
        withdrawn from warehouse for consumption, in the customs 
        territory of the United States.
            (4) HTS.--The term ``HTS'' means the Harmonized Tariff 
        Schedule of the United States.
            (5) NAFTA.--The term ``NAFTA'' means the North American 
        Free Trade Agreement entered into between the United States, 
        Mexico, and Canada on December 17, 1992.
            (6) Originating.--An article shall be deemed as originating 
        in the territory of Panama if the article meets the rules of 
        origin for a good set forth in chapter 4 of the NAFTA, and, in 
        the case of an article described in Appendix 6.A of the Annex, 
        the requirements stated in such Appendix 6.A for such article 
        to be treated as if it were an originating good. In applying 
        such chapter 4 or Appendix 6.A with respect to Panama for 
        purposes of this section--
                    (A) no countries other than the United States and 
                Panama may be treated as being Parties to the NAFTA,
                    (B) references to trade between the United States 
                and Mexico shall be deemed to refer to trade between 
                the United States and Panama, and
                    (C) references to a Party shall be deemed to refer 
                to the United States or Panama, and references to the 
                Parties shall be deemed to refer to Panama and the 
                United States.
            (7) Textile or apparel article.--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.
            (8) Transition period.--The term ``transition period'' 
        means the period that begins on the date on which the 
        certification is submitted under section 3, and ends on the 
        earlier of--
                    (A) the date that is 3 years after such date; or
                    (B) the date on which--
                            (i) the United States first applies the 
                        NAFTA to Panama upon its accession to the 
                        NAFTA; or
                            (ii) there enters into force with respect 
                        to the United States and Panama a free trade 
                        agreement comparable to the NAFTA that makes 
                        substantial progress in achieving the 
                        negotiating objectives set forth in section 
                        108(b)(5) of the North American Free Trade 
                        Agreement Implementation Act (19 U.S.C. 
                        3317(b)(5)).

SEC. 5. APPLICABILITY OF BENEFITS.

    The tariff treatment under section 4 may be accorded to goods of 
Panama only during such periods as a designation of Panama as a 
beneficiary country under the Caribbean Basin Economic Recovery Act is 
in effect.

SEC. 6. CONFORMING AMENDMENT.

    Section 213(a)(1) of the Caribbean Basin Economic Recovery Act is 
amended by inserting ``and except as provided in section 4 of the 
United States-Panama Partnership Act of 2000,'' after ``Tax Reform Act 
of 1986,''.




                                                 Union Calendar No. 567

106th CONGRESS

  2d Session

                               H. R. 3673

                      [Report No. 106-803, Part I]

_______________________________________________________________________

                                 A BILL

 To provide certain benefits to Panama if Panama agrees to permit the 
  United States to maintain a presence there sufficient to carry out 
                 counternarcotics and related missions.

_______________________________________________________________________

                            October 6, 2000

 Committee on Ways and Means discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed