[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3009 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 3009
To extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 3, 2001
Mr. Crane (for himself and Mr. Thomas) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, 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 ``Andean Trade Promotion and Drug
Eradication Act''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Since the Andean Trade Preference Act was enacted in
1991, it has had a positive impact on United States trade with
Bolivia, Colombia, Ecuador, and Peru. Two-way trade has
doubled, with the United States serving as the leading source
of imports and leading export market for each of the Andean
beneficiary countries. This has resulted in increased jobs and
expanded export opportunities in both the United States and the
Andean region.
(2) The Andean Trade Preference Act has been a key element
in the United States counternarcotics strategy in the Andean
region, promoting export diversification and broad-based
economic development that provides sustainable economic
alternatives to drug-crop production, strengthening the
legitimate economies of Andean countries and creating viable
alternatives to illicit trade in coca.
(3) Notwithstanding the success of the Andean Trade
Preference Act, the Andean region remains threatened by
political and economic instability and fragility, vulnerable to
the consequences of the drug war and fierce global competition
for its legitimate trade.
(4) The continuing instability in the Andean region poses a
threat to the security interests of the United States and the
world. This problem has been partially addressed through
foreign aid, such as Plan Colombia, enacted by Congress in
2000. However, foreign aid alone is not sufficient. Enhancement
of legitimate trade with the United States provides an
alternative means for reviving and stabilizing the economies in
the Andean region.
(5) The Andean Trade Preference Act constitutes a tangible
commitment by the United States to the promotion of prosperity,
stability, and democracy in the beneficiary countries.
(6) Renewal and enhancement of the Andean Trade Preference
Act will bolster the confidence of domestic private enterprise
and foreign investors in the economic prospects of the region,
ensuring that legitimate private enterprise can be the engine
of economic development and political stability in the region.
(7) Each of the Andean beneficiary countries is committed
to conclude negotiation of a Free Trade Area of the Americas by
the year 2005, as a means of enhancing the economic security of
the region.
(8) Temporarily enhancing trade benefits for Andean
beneficiary countries will promote the growth of free
enterprise and economic opportunity in these countries and
serve the security interests of the United States, the region,
and the world.
SEC. 3. ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT.
(a) Eligibility of Certain Articles.--Section 204 of the Andean
Trade Preference Act (19 U.S.C. 3203) is amended--
(1) by striking subsection (c) and redesignating
subsections (d) through (g) as subsections (c) through (f),
respectively; and
(2) by amending subsection (b) to read as follows:
``(b) Exceptions and Special Rules.--
``(1) Certain articles that are not import-sensitive.--The
President may proclaim duty-free treatment under this title for
any of the following articles only if the article is the
product of an ATPEA beneficiary country and only if the
President determines that the article is not import-sensitive
in the context of imports from ATPEA beneficiary countries:
``(A) Footwear not designated at the time of the
effective date of this Act as eligible for the purpose
of the generalized system of preferences under title V
of the Trade Act of 1974.
``(B) Petroleum, or any product derived from
petroleum, provided for in headings 2709 and 2710 of
the HTS.
``(C) Watches and watch parts (including cases,
bracelets and straps), of whatever type including, but
not limited to, mechanical, quartz digital or quartz
analog, if such watches or watch parts contain any
material which is the product of any country with
respect to which HTS column 2 rates of duty apply.
``(D) Sugars, syrups, and molasses classified in
subheadings 1701.11.03, 1701.12.02, 1701.99.02,
1702.90.32, 1806.10.42, and 2106.90.12 of the HTS.
``(E) Handbags, luggage, flat goods, work gloves,
and leather wearing apparel that--
``(i) are the product of an ATPEA
beneficiary country; and
``(ii) were not designated on August 5,
1983, as eligible articles for purposes of the
generalized system of preferences under title V
of the Trade Act of 1974.
``(2) Exclusions.--Duty-free treatment under this title may
not be extended to--
``(A) textiles; or
``(B) rum and tafia classified in subheading
2208.40.00 of the HTS.
``(3) Apparel articles.--
``(A) In general.--Apparel articles that are
imported directly into the customs territory of the
United States from an ATPEA beneficiary country shall
enter the United States free of duty and free of any
quantitative restrictions, limitations, or consultation
levels, but only if such articles are described in
subparagraph (B).
``(B) Covered articles.--The apparel articles
referred to in subparagraph (A) are the following:
``(i) Apparel articles assembled from
products of the united states and atpea
beneficiary countries or products not available
in commercial quantities.--Apparel articles
sewn or otherwise assembled in 1 or more ATPEA
beneficiary countries exclusively from any one
or any combination of the following:
``(I) Fabrics or fabric components
formed, or components knit-to-shape, in
the United States (including fabrics
not formed from yarns, if such fabrics
are classifiable under heading 5602 or
5603 of the HTS and are formed in the
United States).
``(II) Fabrics or fabric components
formed, or components knit-to-shape, in
1 or more ATPEA beneficiary countries,
from yarns formed in 1 or more ATPEA
beneficiary countries, if such fabrics
(including fabrics not formed from
yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS
and are formed in 1 or more ATPEA
beneficiary countries) are in chief
weight of llama, or alpaca.
``(III) Fabrics or yarns, without
regard to where they are formed, if
such fabrics or yarns are classifiable
under headings of the HTS from which a
change in tariff classification is
allowed under the applicable rules for
the good under General Note 12(t) of
the HTS (except for goods classifiable
under heading 6212.10 of the HTS),
without regard to whether the
components of such yarns or fabrics
determine the tariff classification of
the apparel article, except that if
such yarns or fabrics are used to
produce knit-to-shape components, the
components must be knit-to-shape in the
United States or in 1 or more ATPEA
beneficiary countries.
``(ii) Additional fabrics.--At the request
of any interested party, the President is
authorized to proclaim additional fabrics and
yarns as eligible for preferential treatment
under clause (i)(III) if--
``(I) the President determines that
such fabrics or yarns cannot be
supplied by the domestic industry in
commercial quantities in a timely
manner;
``(II) the President has obtained
advice regarding the proposed action
from the appropriate advisory committee
established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155) and
the United States International Trade
Commission;
``(III) within 60 days after the
request, the President has submitted a
report to the Committee on Ways and
Means of the House of Representatives
and the Committee on Finance of the
Senate that sets forth the action
proposed to be proclaimed and the
reasons for such action, and the advice
obtained under subclause (II);
``(IV) a period of 60 calendar
days, beginning with the first day on
which the President has met the
requirements of subclause (III), has
expired; and
``(V) the President has consulted
with such committees regarding the
proposed action during the period
referred to in subclause (III).
``(iii) Apparel articles assembled in 1 or
more atpea beneficiary countries from regional
fabrics or regional components.--(I) Subject to
the limitation set forth in subclause (II),
apparel articles sewn or otherwise assembled in
1 or more ATPEA beneficiary countries from
fabrics or from fabric components formed or
from components knit-to-shape, in 1 or more
ATPEA beneficiary countries, from yarns formed
in the United States or in 1 or more ATPEA
beneficiary countries (including fabrics not
formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the
HTS and are formed in 1 or more ATPEA
beneficiary countries), whether or not the
apparel articles are also made from any of the
fabrics, fabric components formed, or
components knit-to-shape described in clause
(i).
``(II) The preferential treatment referred
to in subclause (I) shall be extended in the 1-
year period beginning December 1, 2001, and in
each of the 5 succeeding 1-year periods, to
imports of apparel articles in an amount not to
exceed the applicable percentage of the
aggregate square meter equivalents of all
apparel articles imported into the United
States in the preceding 12-month period for
which data are available.
``(III) For purposes of subclause (II), the
term `applicable percentage' means 3 percent
for the 1-year period beginning December 1,
2001, increased in each of the 5 succeeding 1-
year periods by equal increments, so that for
the period beginning December 1, 2005, the
applicable percentage does not exceed 6
percent.
``(iv) Handloomed, handmade, and folklore
articles.--A handloomed, handmade, or folklore
article of an ATPEA beneficiary country
identified under subparagraph (C) that is
certified as such by the competent authority of
such beneficiary country.
``(v) Special rules.--
``(I) Exception for findings and
trimmings.--An article otherwise
eligible for preferential treatment
under this paragraph shall not be
ineligible for such treatment because
the article contains findings or
trimmings of foreign origin, if such
findings and trimmings do not exceed 25
percent of the cost of the components
of the assembled product. Examples of
findings and trimmings are sewing
thread, hooks and eyes, snaps, buttons,
`bow buds', decorative lace, trim,
elastic strips, zippers, including
zipper tapes and labels, and other
similar products.
``(II) Certain interlining.--(aa)
An article otherwise eligible for
preferential treatment under this
paragraph shall not be ineligible for
such treatment because the article
contains certain interlinings of
foreign origin, if the value of such
interlinings (and any findings and
trimmings) does not exceed 25 percent
of the cost of the components of the
assembled article.
``(bb) Interlinings eligible for
the treatment described in division
(aa) include only a chest type plate,
`hymo' piece, or `sleeve header', of
woven or weft-inserted warp knit
construction and of coarse animal hair
or man-made filaments.
``(cc) The treatment described in
this subclause shall terminate if the
President makes a determination that
United States manufacturers are
producing such interlinings in the
United States in commercial quantities.
``(III) De minimis rule.--An
article that would otherwise be
ineligible for preferential treatment
under this subparagraph because the
article contains fibers or yarns not
wholly formed in the United States or
in one or more ATPEA beneficiary
countries shall not be ineligible for
such treatment if the total weight of
all such fibers or yarns is not more
than 7 percent of the total weight of
the good.
``(C) Handloomed, handmade, and folklore
articles.--For purposes of subparagraph (B)(iv), the
President shall consult with representatives of the
ATPEA beneficiary countries concerned 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) of the Annex or Appendix
3.1.B.11 of the Annex.
``(D) Penalties for transshipment.--
``(i) Penalties for exporters.--If the
President determines, based on sufficient
evidence, that an exporter has engaged in
transshipment with respect to apparel articles
from an ATPEA beneficiary country, then the
President shall deny all benefits under this
title to such exporter, and any successor of
such exporter, for a period of 2 years.
``(ii) Penalties for countries.--Whenever
the President finds, based on sufficient
evidence, that transshipment has occurred, the President shall request
that the ATPEA beneficiary country or countries through whose territory
the transshipment has occurred take all necessary and appropriate
actions to prevent such transshipment. If the President determines that
a country is not taking such actions, the President shall reduce the
quantities of apparel articles that may be imported into the United
States from such country by the quantity of the transshipped articles
multiplied by 3, to the extent consistent with the obligations of the
United States under the WTO.
``(iii) Transshipment described.--
Transshipment within the meaning of this
subparagraph has occurred when preferential
treatment under subparagraph (A) has been
claimed for an apparel article on the basis of
material false information concerning the
country of origin, manufacture, processing, or
assembly of the article or any of its
components. For purposes of this clause, false
information is material if disclosure of the
true information would mean or would have meant
that the article is or was ineligible for
preferential treatment under subparagraph (A).
``(E) Bilateral emergency actions.--
``(i) In general.--The President may take
bilateral emergency tariff actions of a kind
described in section 4 of the Annex with
respect to any apparel article imported from an
ATPEA beneficiary country if the application of
tariff treatment under subparagraph (A) to such
article results in conditions that would be
cause for the taking of such actions under such
section 4 with respect to a like article
described in the same 8-digit subheading of the
HTS that is imported from Mexico.
``(ii) Rules relating to bilateral
emergency action.--For purposes of applying
bilateral emergency action under this
subparagraph--
``(I) the requirements of paragraph
(5) of section 4 of the Annex (relating
to providing compensation) shall not
apply;
``(II) the term `transition period'
in section 4 of the Annex shall mean
the period ending December 31, 2006;
and
``(III) the requirements to consult
specified in section 4 of the Annex
shall be treated as satisfied if the
President requests consultations with
the ATPEA beneficiary country in
question and the country does not agree
to consult within the time period
specified under section 4.
``(4) Customs procedures.--
``(A) In general.--
``(i) Regulations.--Any importer that
claims preferential treatment under paragraph
(1) or (3) 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.
``(ii) Determination.--
``(I) In general.--In order to
qualify for the preferential treatment
under paragraph (1) or (3) 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 each country described in
subclause (II)--
``(aa) has implemented and
follows; or
``(bb) 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.
``(II) Country described.--A
country is described in this subclause
if it is an ATPEA beneficiary country--
``(aa) from which the
article is exported; or
``(bb) in which materials
used in the production of the
article originate or in which
the article or such materials
undergo production that
contributes to a claim that the
article is eligible for
preferential treatment under
paragraph (1) or (3).
``(B) Certificate of origin.--The Certificate of
Origin that otherwise would be required pursuant to the
provisions of subparagraph (A) shall not be required in
the case of an article imported under paragraph (1) or
(3) 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.
``(5) Definitions.--In this subsection--
``(A) Annex.--The term `the Annex' means Annex 300-
B of the NAFTA.
``(B) ATPEA beneficiary country.--The term `ATPEA
beneficiary country' means any `beneficiary country',
as defined in section 203(a)(1) of this title, which
the President designates as an ATPEA beneficiary
country, taking into account the criteria contained in
subsections (b) and (c) of section 203 and other
appropriate criteria, including the following:
``(i) Whether the beneficiary country has
demonstrated a commitment to--
``(I) undertake its obligations
under the WTO, including those
agreements listed in section 101(d) of
the Uruguay Round Agreements Act, on or
ahead of schedule; and
``(II) participate in negotiations
toward the completion of the FTAA or
another free trade agreement.
``(ii) The extent to which the country
provides protection of intellectual property
rights consistent with or greater than the
protection afforded under the Agreement on
Trade-Related Aspects of Intellectual Property
Rights described in section 101(d)(15) of the
Uruguay Round Agreements Act.
``(iii) The extent to which the country
provides internationally recognized worker
rights, including--
``(I) the right of association;
``(II) the right to organize and
bargain collectively;
``(III) a prohibition on the use of
any form of forced or compulsory labor;
``(IV) a minimum age for the
employment of children; and
``(V) acceptable conditions of work
with respect to minimum wages, hours
of work, and occupational safety and health;
``(iv) Whether the country has implemented
its commitments to eliminate the worst forms of
child labor, as defined in section 507(6) of
the Trade Act of 1974.
``(v) The extent to which the country has
met the counter-narcotics certification
criteria set forth in section 490 of the
Foreign Assistance Act of 1961 (22 U.S.C.
2291j) for eligibility for United States
assistance.
``(vi) The extent to which the country has
taken steps to become a party to and implements
the Inter-American Convention Against
Corruption.
``(vii) The extent to which the country--
``(I) applies transparent,
nondiscriminatory, and competitive
procedures in government procurement
equivalent to those contained in the
Agreement on Government Procurement
described in section 101(d)(17) of the
Uruguay Round Agreements Act; and
``(II) contributes to efforts in
international fora to develop and
implement international rules in
transparency in government procurement.
``(C) NAFTA.--The term `NAFTA' means the North
American Free Trade Agreement entered into between the
United States, Mexico, and Canada on December 17, 1992.
``(D) WTO.--The term `WTO' has the meaning given
that term in section 2 of the Uruguay Round Agreements
Act (19 U.S.C. 3501).''.
(b) Conforming Amendments.--(1) Section 202 of the Andean Trade
Preference Act (19 U.S.C. 3201) is amended by inserting ``(or other
preferential treatment)'' after ``treatment''.
(2) Section 204(a) of the Andean Trade Preference Act (19 U.S.C.
3203(a)) is amended--
(A) in paragraph (1), by inserting ``(or otherwise provided
for)'' after ``eligibility''; and
(B) in paragraph (2), by striking ``subsection (a)'' and
inserting ``paragraph (1)''.
SEC. 4. TERMINATION OF PREFERENTIAL TREATMENT.
Section 208 of the Andean Trade Preference Act (19 U.S.C. 3206) is
amended to read as follows:
``SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.
``No duty-free treatment or other preferential treatment extended
to beneficiary countries under this title shall remain in effect after
December 31, 2006.''.
SEC. 5. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT.
Section 213(b)(2)(A) of the Carribean Basin Economic Recovery Act
(19 U.S.C. 2703(b)(2)(A)) is amended as follows:
(1) Clause (i) is amended by striking the matter preceding
subclause (I) and inserting the following:
``(i) Apparel articles assembled in one or
more cbtpa beneficiary countries.--Apparel
articles sewn or otherwise assembled in one or
more CBTPA beneficiary countries from fabrics
wholly formed and cut, or from components knit-
to-shape, in the United States from yarns
wholly formed in the United States, (including
fabrics not formed from yarns, if such fabrics
are classifiable under heading 5602 or 5603 of
the HTS and are wholly formed and cut in the
United States) that are--''.
(2) Clause (ii) is amended to read as follows:
``(ii) Apparel articles cut and assembled
in one or more cbtpa beneficiary countries.--
Apparel articles cut in one or more CBTPA
beneficiary countries from fabric wholly formed
in the United States, or from components knit-
to-shape in the United States, from yarns
wholly formed in the United States (including
fabrics not formed from yarns, if such fabrics
are classifiable under heading 5602 or 5603 of
the HTS and are wholly formed in the United
States), if such articles are sewn or otherwise
assembled in one or more such countries with
thread formed in the United States.''.
SEC. 6. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND OPPORTUNITY ACT.
Section 112(b) of the African Growth and Opportunity Act (19 U.S.C.
3721(b)) is amended as follows:
(1) Paragraph (1) is amended--
(A) by amending the heading to read as follows:
``(1) Apparel articles assembled in one or more beneficiary
sub-saharan african countries.--''; and
(B) by amending the matter preceding subparagraph
(A) to read as follows: ``Apparel articles sewn or
otherwise assembled in one or more beneficiary sub-
Saharan African countries from fabrics wholly formed
and cut, or from components knit-to-shape, in the
United States from yarns wholly formed in the United
States, (including fabrics not formed from yarns, if
such fabrics are classifiable under heading 5602 or
5603 of the HTS and are wholly formed and cut in the
United States) that are--''.
(2) Paragraph (2) is amended to read as follows:
``(2) Apparel articles cut and assembled in one or more
beneficiary sub-saharan african countries.--Apparel articles
cut in one or more beneficiary sub-Saharan African countries
from fabric wholly formed in the United States, or from
components knit-to-shape in the United States, from yarns
wholly formed in the United States, (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are wholly formed in the
United States) if such articles are sewn or otherwise assembled
in one or more such countries with thread formed in the United
States.''.
(3) Paragraph (3) is amended--
(A) in the matter preceding subparagraph (A), by
inserting ``, or components knit-to-shape,'' after
``from fabric wholly formed'';
(B) in subparagraph (A)(ii)--
(i) by striking ``1.5'' and inserting
``3''; and
(ii) by striking ``3.5'' and inserting
``7''; and
(C) in subparagraph (B), by amending clause (i) to
read as follows:
``(i) In general.--Subject to subparagraph
(A), preferential treatment under this
paragraph shall be extended through September
30, 2004, for apparel articles wholly assembled
or knit-to-shape and wholly assembled in one or
more lesser developed beneficiary sub-Saharan
African countries regardless of the country of
origin of the fabric or the yarn used to make
such articles.''.
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