[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5416 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5416

 To promote economic development and stability in Southeast Europe by 
   providing countries in that region with additional trade benefits.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 6, 2000

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

_______________________________________________________________________

                                 A BILL


 
 To promote economic development and stability in Southeast Europe by 
   providing countries in that region with additional trade benefits.

    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 ``Southeast Europe Trade Preference 
Act''.

SEC. 2. FINDINGS AND POLICY.

    (a) Findings.--Congress finds that--
            (1) the economic development and stability of certain 
        countries in Southeast Europe will be enhanced by providing 
        them with additional trade benefits;
            (2) offering additional trade benefits to Southeast Europe 
        is a key component of the Stability Pact, a greater initiative 
        designed to bring stability and economic development to 
        Southeast Europe through regional revitalization, development, 
        democratization, stabilization, and integration, to which the 
        United States and over 40 European and North American countries 
        and institutions committed in Sarajevo in July 1999;
            (3) providing additional trade benefits to countries of 
        Southeast Europe will improve their access to the United States 
        market, promote the development of investment in the region, 
        help further these countries' economic development, and promote 
        political stability in the region; and
            (4) the promotion of economic and political security in 
        Southeast Europe will enhance the economic and national 
        security interests of the United States.
    (b) Policy.--It is therefore the policy of the United States to 
offer those Southeast European beneficiary countries additional trade 
benefits as they attempt to revitalize and reintegrate their economies 
following devastating conflict in the region with the goal of promoting 
political and economic security.

SEC. 3. AUTHORITY TO GRANT DUTY-FREE TREATMENT.

    The President may proclaim duty-free treatment for all eligible 
articles from any beneficiary country in accordance with the provisions 
of this Act.

SEC. 4. DEFINITIONS.

    As used in this Act:
            (1) Beneficiary country.--The term ``beneficiary country'' 
        means any country or territory listed in section 5(a)(1) with 
        respect to which there is in effect a proclamation by the 
        President designating such country or territory as a 
        beneficiary country for purposes of this Act.
            (2) Country.--The term ``country'' means a foreign country 
        or territory.
            (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 Harmonized Tariff Schedule 
        of the United States.
            (5) Article.--The term ``article'' means the goods provided 
        for in any individual 8-digit HTS tariff rate line.

SEC. 5. BENEFICIARY COUNTRIES.

    (a) Countries Eligible for Designation; Congressional 
Notification.--(1) In designating countries as beneficiary countries 
under this Act, the President shall consider only the following 
countries and territories:
            (A) Albania.
            (B) Bosnia and Herzegovina.
            (C) Bulgaria.
            (D) Croatia.
            (E) Former Yugoslav Republic of Macedonia.
            (F) Romania.
            (G) Slovenia.
            (H) Kosovo.
            (I) Montenegro.
    (2) Before the President designates any country a beneficiary 
country for purposes of this Act, the President shall notify the House 
of Representatives and the Senate of the President's intention to make 
such designation, together with the considerations entering into such 
decision.
    (b) Limitations on Designation.--The President shall not designate 
any country a beneficiary country under this Act--
            (1) if such country--
                    (A) has nationalized, expropriated, or otherwise 
                seized ownership or control of property owned by a 
                United States citizen or by a corporation, partnership, 
                or association which is 50 percent or more beneficially 
                owned by United States citizens,
                    (B) has taken steps to repudiate or nullify--
                            (i) any existing contract or agreement 
                        with, or
                            (ii) any patent, trademark, or other 
                        intellectual property of,
                a United States citizen or a corporation, partnership, 
                or association, which is 50 percent or more 
                beneficially owned by United States citizens, the 
                effect of which is to nationalize, expropriate, or 
                otherwise seize ownership or control of property so 
                owned, or
                    (C) has imposed or enforced taxes or other 
                exactions, restrictive maintenance, or operational 
                conditions, or other measures with respect to property 
                so owned, the effect of which is to nationalize, 
                expropriate, or otherwise seize ownership or control of 
                such property, unless the President determines that--
                    (i) prompt, adequate, and effective compensation 
                has been or is being made to such citizen, corporation, 
partnership, or association,
                    (ii) good-faith negotiations to provide prompt, 
                adequate, and effective compensation under the 
                applicable provisions of international law are in 
                progress, or such country is otherwise taking steps to 
                discharge its obligations under international law with 
                respect to such citizen, corporation, partnership, or 
                association, or
                    (iii) a dispute involving such citizen, 
                corporation, partnership, or association over 
                compensation for such a seizure has been submitted to 
                arbitration under the provisions of the Convention for 
                the Settlement of Investment Disputes, or in another 
                mutually agreed upon forum,
        and promptly furnishes a copy of such determination to the 
        Senate and the House of Representatives;
            (2) if such country fails to act in good faith in 
        recognizing as binding or in enforcing arbitral awards in favor 
        of United States citizens or a corporation, partnership, or 
        association which is 50 percent or more beneficially owned by 
        United States citizens, which have been made by arbitrators 
        appointed for each case or by permanent arbitral bodies to 
        which the parties involved have submitted their dispute;
            (3) if such country affords preferential treatment to the 
        products of a developed country, other than the United States, 
        and if such preferential treatment has, or is likely to have, a 
        significant adverse effect on United States, commerce;
            (4) if a government-owned entity in such country engages in 
        the broadcast of copyrighted material, including films or 
        television material, belonging to United States copyright 
        owners without their express consent or such country fails to 
        work toward the provision of adequate and effective protection 
        of intellectual property rights;
            (5) unless a treaty, convention, protocol, or other 
        agreement regarding the extradition of United States citizens 
        is applicable to such country;
            (6) if such country has not taken or is not taking steps to 
        afford to workers in that country (including any designated 
        zone in that country) internationally recognized worker rights, 
        including the right of association, the right to organize and 
        bargain collectively, a prohibition on the use of any form of 
        coerced or compulsory labor (including trafficking in persons), 
        a minimum age for the employment of children, and acceptable 
        conditions of work with respect to minimum wages, hours of 
        work, and occupational safety and health; or
            (7) if such country is a member of the European Union.
Paragraphs (1) through (6) shall not prevent the designation of any 
country as a beneficiary country under this Act if the President 
determines that such designation will be in the national economic or 
security interest of the United States and reports such determination 
to Congress with the reasons therefor.
    (c) Factors Affecting Designation.--In determining whether to 
designate any country a beneficiary country under this Act, the 
President shall take into account--
            (1) an expression by such country of its desire to be so 
        designated;
            (2) the economic conditions in such country, the living 
        standards of its inhabitants, and any other factors which the 
        President deems appropriate;
            (3) the extent to which such country has assured the United 
        States it will provide equitable and reasonable access to such 
        country's--
                    (A) basic commodity resources; and
                    (B) markets with respect to the products for which 
                benefits are provided under this Act, and in other 
                relevant product sectors as determined by the 
                President;
            (4) the degree to which such country follows the accepted 
        rules of international trade provided for under the WTO 
        Agreement and the multilateral trade agreements (as such terms 
        are defined in paragraphs (9) and (4), respectively, of section 
        2 of the Uruguay Round Agreements Act);
            (5) the degree to which such country uses export subsidies 
        or imposes export performance requirements or local content 
        requirements which distort international trade;
            (6) the degree to which the trade policies of such country 
        as they relate to other beneficiary countries are contributing 
        to the revitalization of the region;
            (7) the degree to which such country is undertaking self-
        help measures to promote its own economic development;
            (8) the extent to which such country affords to workers in 
        that country (including any designated zone in that country) 
        internationally recognized worker rights, including the right 
        of association, the right to organize and bargain collectively, 
        a prohibition on the use of any form of coerced or compulsory 
        labor (including trafficking in persons), a minimum age for the 
        employment of children, and acceptable conditions of work with 
        respect to minimum wages, hours of work, and occupational 
        safety and health;
            (9) the extent to which the country adopts, maintains, and 
        effectively enforces laws providing for high levels of 
        environmental protection;
            (10) the extent to which such country provides under its 
        law adequate and effective means for foreign nationals to 
        secure, exercise, and enforce exclusive rights in intellectual 
        property, including patent, trademark, and copyright rights;
            (11) the degree to which such country prohibits its 
        nationals from engaging in the broadcast of copyrighted 
        material, including films or television material, belonging to 
        United States copyright owners without their express consent;
            (12) the degree to which the country is taking effective 
        measures to prevent production of, or trafficking in, illicit 
        drugs;
            (13) the degree to which the country provides for effective 
        prohibitions on bribery and other corrupt practices affecting 
        international trade;
            (14) the degree to which the country applies transparent 
        procedures in government procurement and contributes to efforts 
        in international fora to develop and implement international 
        rules on transparency in government procurement; and
            (15) the extent to which such country is prepared to 
        cooperate with the United States in the administration of the 
        provisions of this Act.
The President may consider that a country is not providing adequate and 
effective protection of intellectual property rights under paragraph 
(10), even if the country is in compliance with the country's 
obligations under the Agreement on Trade-Related Aspects of 
Intellectual Property Rights described in section 101(d)(15) of the 
Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)).
    (d) Withdrawal or Suspension of Designation.--(1) The President 
may--
            (A) withdraw or suspend the designation of any country as a 
        beneficiary country, or
            (B) withdraw, suspend, modify, or limit the application of 
        preferential treatment under this Act to any article of any 
        country,
if, after such designation, the President determines that such action 
is appropriate based on the limitations in subsection (b) or on the 
factors in subsection (c).
    (2)(A) The United States Trade Representative shall publish in the 
Federal Register notice of the action the President proposes to take 
under paragraph (1) at least 30 days before taking such action.
    (B) The United States Trade Representative shall, within the 30-day 
period beginning on the date on which the United States Trade 
Representative publishes under subparagraph (A) notice of proposed 
action--
            (i) accept written comments from the public regarding such 
        proposed action;
            (ii) hold a public hearing on such proposed action; and
            (iii) publish in the Federal Register--
                    (I) notice of the time and place of such hearing 
                prior to the hearing; and
                    (II) the time and place at which such written 
                comments will be accepted.
    (3) In the event the President withdraws, suspends, modifies, or 
limits the application of duty-free treatment accorded to a country 
under the Generalized System of Preferences based on one or more of the 
eligibility criteria in section 501 of the Trade Act of 1974 (19 U.S.C. 
2462) that are the same or similar to one or more of the eligibility 
criteria set forth in this section, the President shall likewise 
withdraw, suspend, modify, or limit the application of preferential 
treatment accorded to that country under this Act.
    (e) Report.--Not later than February 1, 2003, the President shall 
submit to Congress a complete report regarding the operation of this 
Act, including the results of a general review of beneficiary countries 
based on the considerations described in subsections (b) and (c).
    (f) Kosovo and Montenegro.--Kosovo and Montenegro may be designated 
as beneficiary countries notwithstanding the provisions of Public Law 
102-420 (19 U.S.C. 2432 note), concerning the withdrawal of 
nondiscriminatory treatment of goods that are the product of Serbia or 
Montenegro, or any other law.
    (g) Federal Republic of Yugoslavia.--Notwithstanding the limitation 
in subsection (a)(1), the Federal Republic of Yugoslavia may be 
considered eligible for designation as a beneficiary country under this 
Act if the President determines that relevant authorities in the 
Government of the Federal Republic of Yugoslavia and the Government of 
the Republic of Serbia have made significant progress in meeting the 
following objectives:
            (1) Participation in a political process designed to 
        determine Kosovo's future status, taking into account the 
        Rambouillet accords.
            (2) Compliance with the General Framework Agreement for 
        Peace in Bosnia and Herzegovina.
            (3) Implementation of internal democratic reform.
            (4) Cooperation on all succession issues with the other 
        republics that emerged from the dissolution of the Socialist 
        Federal Republic of Yugoslavia.
            (5) Cooperation with the International Criminal Tribunal 
        for the Former Yugoslavia, including transfer of all indicted 
        war criminals in the Federal Republic of Yugoslavia to The 
        Hague.
            (6) Peaceful and democratic resolution of differences 
        between its constituent republics, Serbia and Montenegro, over 
        the structure of shared governmental institutions.

SEC. 6. ELIGIBLE ARTICLES.

    (a) In General.--(1) Unless otherwise excluded from eligibility by 
this Act, the duty-free treatment provided under this Act shall apply 
to any article which is the growth, product, or manufacture of a 
beneficiary country if--
            (A) that article is imported directly from a beneficiary 
        country into the customs territory of the United States; and
            (B) the sum of--
                    (i) the cost or value of the materials produced in 
                a beneficiary country or 2 or more beneficiary 
                countries under this Act, plus
                    (ii) the direct costs of processing operations 
                performed in a beneficiary country or countries,
        is not less than 35 percent of the appraised value of such 
        article at the time it is entered.
If the cost or value of materials produced in the customs territory of 
the United States is included with respect to an article to which this 
paragraph applies, an amount not to exceed 15 percent of the appraised 
value of the article at the time it is entered that is attributed to 
such United States cost or value may be applied toward determining the 
percentage referred to in subparagraph (B).
    (2) The Secretary of the Treasury shall prescribe such regulations 
as may be necessary to carry out subsection (a), including, but not 
limited to, regulations providing that, in order to be eligible for 
duty-free treatment under this Act, an article must be wholly the 
growth, product, or manufacture of a beneficiary country, or must be a 
new or different article of commerce which has been grown, produced, or 
manufactured in the beneficiary country; but no article or material of 
a beneficiary country shall be eligible for such treatment by virtue of 
having merely undergone--
            (A) simple combining or packaging operations, or
            (B) mere dilution with water or mere dilution with another 
        substance that does not materially alter the characteristics of 
        the article.
    (3)(A) As used in this subsection, the term ``direct costs of 
processing operations'' includes, but is not limited to--
            (i) all actual labor costs involved in the growth, 
        production, manufacture, or assembly of the specific 
        merchandise, including fringe benefits, on-the-job training, 
        and the cost of engineering, supervisory, quality control, and 
        similar personnel; and
            (ii) dies, molds, tooling, and depreciation on machinery 
        and equipment which are allocable to the specific merchandise.
    (B) The term ``direct costs of processing operations'' does not 
include costs which are not directly attributable to the merchandise 
concerned or are not costs of manufacturing the product, such as--
            (i) profit; and
            (ii) general expenses of doing business which are either 
        not allocable to the specific merchandise or are not related to 
        the growth, production, manufacture, or assembly of the 
        merchandise, such as administrative salaries, casualty and 
        liability insurance, advertising, interest, and salesperson's 
        salaries, commissions, or expenses.
    (b) Exception to Duty-Free Treatment.--The duty-free treatment 
provided under this Act shall not apply to textile and apparel articles 
which are not eligible for duty-free treatment under section 
503(b)(1)(A) of the Trade Act of 1974 (19 U.S.C. 2463(b)(1)(A)).
    (c) Suspension of Duty-Free Treatment.--(1) The President may by 
proclamation suspend the duty-free treatment provided by this Act with 
respect to any eligible article and may proclaim a duty rate for such 
article if such action is proclaimed under chapter 1 of title II of the 
Trade Act of 1974 or section 232 of the Trade Expansion Act of 1962.
    (2) In any report by the United States International Trade 
Commission to the President under section 202(f) of the Trade Act of 
1974 regarding any article for which duty-free treatment has been 
proclaimed by the President pursuant to this Act, the Commission shall 
state whether and to what extent its findings and recommendations apply 
to such article when imported from beneficiary countries.
    (3) For purposes of section 203 of the Trade Act of 1974, the 
suspension of duty-free treatment provided by this Act shall be treated 
as an increase in duty.
    (4) No proclamation providing solely for a suspension referred to 
in paragraph (3) of this subsection with respect to any articles shall 
be taken under section 203 of the Trade Act of 1974 unless the United 
States International Trade Commission, in addition to making an 
affirmative determination with respect to such article under section 
202(b) of the Trade Act of 1974, determines in the course of its 
investigation under such section that the serious injury (or threat 
thereof) substantially caused by imports to the domestic industry 
producing a like or directly competitive article results from the duty-
free treatment provided by this Act.
    (5)(A) Any action taken under section 203 of the Trade Act of 1974 
that is in effect when duty-free treatment is proclaimed under section 
3 of this Act shall remain in effect until modified or terminated.
    (B) If any article is subject to any such action at the time duty-
free treatment is proclaimed under section 3 of this Act, the President 
may reduce or terminate the application of such action to the 
importation of such article from beneficiary countries prior to the 
otherwise scheduled date on which such reduction or termination would 
occur pursuant to the criteria and procedures of section 204 of the 
Trade Act of 1974.
    (d) Emergency Relief With Respect to Perishable Products.--(1) If a 
petition is filed with the United States International Trade Commission 
pursuant to the provisions of section 201 of the Trade Act of 1974 
regarding a perishable product and alleging injury from imports from 
beneficiary countries, then the petition may also be filed with the 
Secretary of Agriculture with a request that emergency relief be 
granted pursuant to paragraph (3) of this subsection with respect to 
such article.
    (2) Within 14 days after the filing of a petition under paragraph 
(1)--
            (A) if the Secretary of Agriculture has reason to believe 
        that a perishable product from a beneficiary country is being 
        imported into the United States in such increased quantities as 
        to be a substantial cause of serious injury, or the threat 
        thereof, to the domestic industry producing a perishable 
        product like or directly competitive with the imported product 
        and that emergency action is warranted, the Secretary shall 
        advise the President and recommend that the President take 
        emergency action; or
            (B) the Secretary of Agriculture shall publish a notice of 
        the Secretary's determination not to recommend the imposition 
        of emergency action and so advise the petitioner.
    (3) Within 7 days after the President receives a recommendation 
from the Secretary of Agriculture to take emergency action pursuant to 
paragraph (2), the President shall issue a proclamation withdrawing the 
duty-free treatment provided by this Act or publish a notice of the 
President's determination not to take emergency action.
    (4) The emergency action provided by paragraph (3) shall cease to 
apply--
            (A) upon the taking of action under section 203 of the 
        Trade Act of 1974,
            (B) on the day that a determination by the President not to 
        take action under section 203(b)(2) of such Act becomes final,
            (C) in the event of a report of the United States 
        International Trade Commission containing a negative finding, 
        on the day that the Commission's report is submitted to the 
        President, or
            (D) whenever the President determines that because of 
        changed circumstances such relief is no longer warranted.
    (5) For purposes of this subsection, the term ``perishable 
product'' means--
            (A) live plants and fresh cut flowers provided for in 
        chapter 6 of the HTS;
            (B) fresh or chilled vegetables provided for in headings 
        0701 through 0709 (except subheading 0709.52.00) and heading 
        0714 of the HTS;
            (C) fresh fruit provided for in subheadings 0804.20 through 
        0810.90 (except citrons of subheadings 0805.90.00, tamarinds of 
        subheading 0810.90.25, and kiwi fruit of subheading 0810.50.00, 
        and cashew apples, mameyes colorados, sapodillas, soursops, and 
        sweetsops of subheading 0810.90.40) of the HTS; and
            (D) concentrated citrus fruit juice provided for in 
        subheadings 2009.11.00, 2009.19.40, 2009.20.40, 2009.30.20, and 
        2009.30.60 of the HTS.
    (e) Section 22 Fees.--No proclamation issued pursuant to this Act 
shall affect fees imposed pursuant to section 22 of the Agricultural 
Adjustment Act of 1933 (7 U.S.C. 624).
    (f) Tariff-Rate Quotas.--No quantity of an agricultural product 
subject to a tariff-rate quota that exceeds the in-quota quantity shall 
be eligible for duty-free treatment under this Act.

SEC. 7. RELATED AMENDMENTS.

    (a) Increase in Duty-Free Tourist Allowance.--Note 4 to subchapter 
IV of chapter 98 of the HTS is amended by inserting before the final 
period the phrase ``, or a country designated as a beneficiary country 
under the Southeast Europe Trade Preference Act''.
    (b) Treatment of Insular Possessions Products.--General note 
3(a)(iv) of the HTS (relating to products of the insular possessions) 
is amended by redesignating subdivision (F) as subdivision (G), and by 
inserting after subdivision (E) the following:
                    ``(F) Subject to the provisions in section 5 of the 
                Southeast Europe Trade Preference Act, goods which are 
                imported from the insular possessions of the United 
                States shall receive duty treatment no less favorable 
                than the treatment afforded such goods when they are 
                imported from a beneficiary country under that Act.''.
    (c) Section 301.--Section 301(c) of the Trade Act of 1974 (19 
U.S.C. 2411) is amended in paragraph (1)(C) by striking ``or'' after 
``(19 U.S.C. 2702 (b) and (c))'' and inserting ``or section 5 (b) and 
(c) of the Southeast Europe Trade Preference Act,'' after ``19 U.S.C. 
3202 (b) and (c)),''.

SEC. 8. INTERNATIONAL TRADE COMMISSION REPORT ON IMPACT OF THE 
              SOUTHEAST EUROPE TRADE PREFERENCE ACT.

    (a) Reporting Requirement.--(1) No later than October 1, 2002, the 
United States International Trade Commission (referred to in this 
section as the ``Commission'') shall submit to Congress and the 
President a report regarding the economic impact of this Act on United 
States industries and consumers, and, in conjunction with other 
agencies, the effectiveness of this Act in promoting regional 
reconstruction.
    (2) For purposes of this section, industries in the Commonwealth of 
Puerto Rico and the insular possessions of the United States are 
considered to be United States industries.
    (b) Requirements for Report.--(1) The report required under 
subsection (a) shall include, but not be limited to, an assessment by 
the Commission regarding--
            (A) the actual effect, during the period covered by the 
        report, of this Act on the United States economy generally as 
        well as on those specific domestic industries which produce 
        articles that are like, or directly competitive with, articles 
        being imported into the United States from beneficiary 
        countries; and
            (B) the probable future effect that this Act will have on 
        the United States economy generally, as well as on such 
        domestic industries, before the provisions of this Act 
        terminate.
    (2) In preparing the assessments required under paragraph (1), the 
Commission shall, to the extent practicable--
            (A) analyze the production, trade, and consumption of 
        United States products affected by this Act, taking into 
        consideration employment, profit levels, and use of productive 
        facilities with respect to the domestic industries concerned, 
        and such other economic factors in such industries as it 
        considers relevant, including prices, wages, sales, 
        inventories, patterns of demand, capital investment, 
        obsolescence of equipment, and diversification of production; 
        and
            (B) describe the nature and extent of any significant 
        change in employment, profit levels, and use of productive 
        facilities, and such other conditions as it deems relevant in 
        the domestic industries concerned, which it believes are 
        attributable to this Act.
    (c) Submission Dates; Public Comment.--The Commission shall provide 
an opportunity for the submission by the public, either orally or in 
writing, or both, of information relating to matters that will be 
addressed in the report.

SEC. 9. IMPACT STUDY BY THE SECRETARY OF LABOR.

    (a) The Secretary of Labor, in consultation with other appropriate 
Federal agencies, shall undertake a continuing review and analysis of 
the impact that the implementation of the provisions of this Act has 
with respect to United States labor, shall review developments in labor 
conditions in the beneficiary countries, and, no later than October 1, 
2002, shall make a report to Congress on the results of such review and 
analysis.
    (b) For purposes of this section, industries in the Commonwealth of 
Puerto Rico and the insular possessions of the United States are 
considered to be United States industries.

SEC. 10. EFFECTIVE DATE AND TERMINATION OF DUTY-FREE TREATMENT.

    (a) Effective Date.--This Act shall take effect on the date of 
enactment of this Act.
    (b) Termination of Duty-Free Treatment.--Duty-free treatment 
extended to beneficiary countries under this Act shall terminate on the 
date that is 5 years after the date of enactment of this Act.
                                 <all>