[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3009 Reported in Senate (RS)]
Calendar No. 295
107th CONGRESS
1st Session
H. R. 3009
[Report No. 107-126]
To extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 16, 2001
Received; read twice and referred to the Committee on Finance
December 14, 2001
Reported by Mr. Baucus, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
AN ACT
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,
<DELETED>SECTION 1. SHORT TITLE.</DELETED>
<DELETED> This Act may be cited as the ``Andean Trade Promotion and
Drug Eradication Act''.</DELETED>
<DELETED>SEC. 2. FINDINGS.</DELETED>
<DELETED> Congress makes the following findings:</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED> (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.</DELETED>
<DELETED>SEC. 3. ARTICLES ELIGIBLE FOR PREFERENTIAL
TREATMENT.</DELETED>
<DELETED> (a) Eligibility of Certain Articles.--Section 204 of the
Andean Trade Preference Act (19 U.S.C. 3203) is amended--</DELETED>
<DELETED> (1) by striking subsection (c) and redesignating
subsections (d) through (g) as subsections (c) through (f),
respectively; and</DELETED>
<DELETED> (2) by amending subsection (b) to read as
follows:</DELETED>
<DELETED> ``(b) Exceptions and Special Rules.--</DELETED>
<DELETED> ``(1) Certain articles that are not import-
sensitive.--The President may proclaim duty-free treatment
under this title for any article described in subparagraph (A),
(B), (C), or (D) that is the growth, product, or manufacture of
an ATPDEA beneficiary country and that meets the requirements
of this section, if the President determines that such article
is not import-sensitive in the context of imports from ATPDEA
beneficiary countries:</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(B) Petroleum, or any product derived
from petroleum, provided for in headings 2709 and 2710
of the HTS.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(D) Handbags, luggage, flat goods, work
gloves, and leather wearing apparel that 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.</DELETED>
<DELETED> ``(2) Exclusions.--Subject to paragraph (3), duty-
free treatment under this title may not be extended to--
</DELETED>
<DELETED> ``(A) textiles and apparel articles which
were not eligible articles for purposes of this title
on January 1, 1994, as this title was in effect on that
date;</DELETED>
<DELETED> ``(B) rum and tafia classified in
subheading 2208.40 of the HTS; or</DELETED>
<DELETED> ``(C) sugars, syrups, and sugar-containing
products subject to over-quota duty rates under
applicable tariff-rate quotas.</DELETED>
<DELETED> ``(3) Apparel articles.--</DELETED>
<DELETED> ``(A) In general.--Apparel articles that
are imported directly into the customs territory of the
United States from an ATPDEA 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).</DELETED>
<DELETED> ``(B) Covered articles.--The apparel
articles referred to in subparagraph (A) are the
following:</DELETED>
<DELETED> ``(i) Apparel articles assembled
from products of the united states and atpdea
beneficiary countries or products not available
in commercial quantities.--Apparel articles
sewn or otherwise assembled in 1 or more ATPDEA
beneficiary countries, or the United States, or
both, exclusively from any one or any
combination of the following:</DELETED>
<DELETED> ``(I) Fabrics or fabric
components formed, or components knit-
to-shape, in the United States, from
yarns formed in the United States or 1
or more ATPDEA 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 the United
States).</DELETED>
<DELETED> ``(II) Fabrics or fabric
components formed or components knit-
to-shape, in 1 or more ATPDEA
beneficiary countries, from yarns
formed in 1 or more ATPDEA 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 ATPDEA beneficiary
countries) or components are in chief
weight of llama or alpaca.</DELETED>
<DELETED> ``(III) Fabrics or yarn
that is not formed in the United States
or in one or more ATPDEA beneficiary
countries, to the extent that apparel
articles of such fabrics or yarn would
be eligible for preferential treatment,
without regard to the source of the
fabrics or yarn, under Annex 401 of the
NAFTA.</DELETED>
<DELETED> ``(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--</DELETED>
<DELETED> ``(I) the President
determines that such fabrics or yarns
cannot be supplied by the domestic
industry in commercial quantities in a
timely manner;</DELETED>
<DELETED> ``(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;</DELETED>
<DELETED> ``(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);</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(V) the President has
consulted with such committees
regarding the proposed action during
the period referred to in subclause
(III).</DELETED>
<DELETED> ``(iii) Apparel articles assembled
in 1 or more atpdea 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 ATPDEA
beneficiary countries from fabrics or from
fabric components formed or from components
knit-to-shape, in 1 or more ATPDEA beneficiary
countries, from yarns formed in the United
States or 1 or more ATPDEA 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 ATPDEA 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).</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(iv) Handloomed, handmade, and
folklore articles.--A handloomed, handmade, or
folklore article of an ATPDEA beneficiary
country identified under subparagraph (C) that
is certified as such by the competent authority
of such beneficiary country.</DELETED>
<DELETED> ``(v) Special rules.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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 ATPDEA 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.</DELETED>
<DELETED> ``(C) Handloomed, handmade, and folklore
articles.--For purposes of subparagraph (B)(iv), the
President shall consult with representatives of the
ATPDEA 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.</DELETED>
<DELETED> ``(D) Penalties for transshipment.--
</DELETED>
<DELETED> ``(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 ATPDEA 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.</DELETED>
<DELETED> ``(ii) Penalties for countries.--
Whenever the President finds, based on
sufficient evidence, that transshipment has
occurred, the President shall request that the
ATPDEA 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.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(E) Bilateral emergency actions.--
</DELETED>
<DELETED> ``(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
ATPDEA 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.</DELETED>
<DELETED> ``(ii) Rules relating to bilateral
emergency action.--For purposes of applying
bilateral emergency action under this
subparagraph--</DELETED>
<DELETED> ``(I) the requirements of
paragraph (5) of section 4 of the Annex
(relating to providing compensation)
shall not apply;</DELETED>
<DELETED> ``(II) the term
`transition period' in section 4 of the
Annex shall mean the period ending
December 31, 2006; and</DELETED>
<DELETED> ``(III) the requirements
to consult specified in section 4 of
the Annex shall be treated as satisfied
if the President requests consultations
with the ATPDEA beneficiary country in
question and the country does not agree
to consult within the time period
specified under section 4.</DELETED>
<DELETED> ``(4) Customs procedures.--</DELETED>
<DELETED> ``(A) In general.--</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(ii) Determination.--</DELETED>
<DELETED> ``(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)--</DELETED>
<DELETED> ``(aa) has
implemented and follows;
or</DELETED>
<DELETED> ``(bb) is making
substantial progress toward
implementing and
following,</DELETED>
<DELETED>procedures and requirements
similar in all material respects to the
relevant procedures and requirements
under chapter 5 of the NAFTA.</DELETED>
<DELETED> ``(II) Country
described.--A country is described in
this subclause if it is an ATPDEA
beneficiary country--</DELETED>
<DELETED> ``(aa) from which
the article is exported;
or</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(5) Definitions.--In this subsection--</DELETED>
<DELETED> ``(A) Annex.--The term `the Annex' means
Annex 300-B of the NAFTA.</DELETED>
<DELETED> ``(B) ATPDEA beneficiary country.--The
term `ATPDEA beneficiary country' means any
`beneficiary country', as defined in section 203(a)(1)
of this title, which the President designates as an
ATPDEA beneficiary country, taking into account the
criteria contained in subsections (c) and (d) of
section 203 and other appropriate criteria, including
the following:</DELETED>
<DELETED> ``(i) Whether the beneficiary
country has demonstrated a commitment to--
</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(II) participate in
negotiations toward the completion of
the FTAA or another free trade
agreement.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(iii) The extent to which the
country provides internationally recognized
worker rights, including--</DELETED>
<DELETED> ``(I) the right of
association;</DELETED>
<DELETED> ``(II) the right to
organize and bargain
collectively;</DELETED>
<DELETED> ``(III) a prohibition on
the use of any form of forced or
compulsory labor;</DELETED>
<DELETED> ``(IV) a minimum age for
the employment of children;
and</DELETED>
<DELETED> ``(V) acceptable
conditions of work with respect to
minimum wages, hours of work, and
occupational safety and
health;</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(v) The extent to which the
country has met the counternarcotics
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.</DELETED>
<DELETED> ``(vi) The extent to which the
country has taken steps to become a party to
and implements the Inter-American Convention
Against Corruption.</DELETED>
<DELETED> ``(vii) The extent to which the
country--</DELETED>
<DELETED> ``(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</DELETED>
<DELETED> ``(II) contributes to
efforts in international fora to
develop and implement international
rules in transparency in government
procurement.</DELETED>
<DELETED> ``(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.</DELETED>
<DELETED> ``(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).</DELETED>
<DELETED> ``(E) ATPDEA.--The term `ATPDEA' means the
Andean Trade Promotion and Drug Eradication
Act.''.</DELETED>
<DELETED> (b) Determination Regarding Retention of Designation.--
Section 203(e)(1) of the Andean Trade Preference Act (19 U.S.C.
3202(e)(1)) is amended--</DELETED>
<DELETED> (1) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively;</DELETED>
<DELETED> (2) by inserting ``(A)'' after ``(1)'';
and</DELETED>
<DELETED> (3) by adding at the end the following:</DELETED>
<DELETED> ``(B) The President may, after the requirements of
paragraph (2) have been met--</DELETED>
<DELETED> ``(i) withdraw or suspend the designation of any
country as an ATPDEA beneficiary country, or</DELETED>
<DELETED> ``(ii) withdraw, suspend, or limit the application
of preferential treatment under section 204(b)(1) or (3) to any
article of any country,</DELETED>
<DELETED>if, after such designation, the President determines that, as
a result of changed circumstances, the performance of such country is
not satisfactory under the criteria set forth in section
204(b)(5)(B).''.</DELETED>
<DELETED> (c) 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''.</DELETED>
<DELETED> (2) Section 204(a) of the Andean Trade Preference Act (19
U.S.C. 3203(a)) is amended--</DELETED>
<DELETED> (A) in paragraph (1), by inserting ``(or otherwise
provided for)'' after ``eligibility''; and</DELETED>
<DELETED> (B) in paragraph (2), by striking ``subsection
(a)'' and inserting ``paragraph (1)''.</DELETED>
<DELETED>SEC. 4. TERMINATION OF PREFERENTIAL TREATMENT.</DELETED>
<DELETED> Section 208 of the Andean Trade Preference Act (19 U.S.C.
3206) is amended to read as follows:</DELETED>
<DELETED>``SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.</DELETED>
<DELETED> ``No duty-free treatment or other preferential treatment
extended to beneficiary countries under this title shall remain in
effect after December 31, 2006.''.</DELETED>
<DELETED>SEC. 5. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC
RECOVERY ACT.</DELETED>
<DELETED> Section 213(b)(2)(A) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2703(b)(2)(A)) is amended as follows:</DELETED>
<DELETED> (1) Clause (i) is amended by striking the matter
preceding subclause (I) and inserting the following:</DELETED>
<DELETED> ``(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--
''.</DELETED>
<DELETED> (2) Clause (ii) is amended to read as
follows:</DELETED>
<DELETED> ``(ii) Other apparel articles
assembled in one or more cbtpa beneficiary
countries.--Apparel articles sewn or otherwise
assembled in one or more CBTPA beneficiary
countries with thread formed in the United
States from fabrics wholly formed in the United
States and cut in one or more CBTPA beneficiary
countries from yarns wholly formed in the
United States, or from components knit-to-shape
in the United States from yarns wholly formed
in the United States, or both (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).''.</DELETED>
<DELETED> (3) Clause (iii)(II) is amended to read as
follows:</DELETED>
<DELETED> ``(II) The amount referred to in
subclause (I) is as follows:</DELETED>
<DELETED> ``(aa) 290,000,000 square
meter equivalents during the 1-year
period beginning on October 1,
2001.</DELETED>
<DELETED> ``(bb) 500,000,000 square
meter equivalents during the 1-year
period beginning on October 1,
2002.</DELETED>
<DELETED> ``(cc) 850,000,000 square
meter equivalents during the 1-year
period beginning on October 1,
2003.</DELETED>
<DELETED> ``(dd) 970,000,000 square
meter equivalents in each succeeding 1-
year period through September 30,
2008.''.</DELETED>
<DELETED> (4) Clause (iii)(IV) is amended to read as
follows:</DELETED>
<DELETED> ``(IV) The amount referred to in
subclause (III) is as follows:</DELETED>
<DELETED> ``(aa) 4,872,000 dozen
during the 1-year period beginning on
October 1, 2001.</DELETED>
<DELETED> ``(bb) 9,000,000 dozen
during the 1-year period beginning on
October 1, 2002.</DELETED>
<DELETED> ``(cc) 10,000,000 dozen
during the 1-year period beginning on
October 1, 2003.</DELETED>
<DELETED> ``(dd) 12,000,000 dozen in
each succeeding 1-year period through
September 30, 2008.''.</DELETED>
<DELETED> (5) Section 213(b)(2)(A) of such Act is further
amended by adding at the end the following new
clause:</DELETED>
<DELETED> ``(ix) Apparel articles assembled
in one or more cbtpa beneficiary countries from
united states and cbtpa beneficiary country
components.--Apparel articles sewn or otherwise
assembled in one or more CBTPA beneficiary
countries with thread formed in the United
States from components cut in the United States
and in one or more CBTPA beneficiary countries
from fabric wholly formed in the United States
from yarns wholly formed in the United States,
or from components knit-to-shape in the United
States and one or more CBTPA beneficiary
countries from yarns wholly formed in the
United States, or both (including fabrics not
formed from yarns, if such fabrics are
classifiable under heading 5602 or 5603 of the
HTS).''.</DELETED>
<DELETED>SEC. 6. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND
OPPORTUNITY ACT.</DELETED>
<DELETED> Section 112(b) of the African Growth and Opportunity Act
(19 U.S.C. 3721(b)) is amended as follows:</DELETED>
<DELETED> (1) Paragraph (1) is amended by amending the
matter preceding subparagraph (A) to read as follows:</DELETED>
<DELETED> ``(1) Apparel articles assembled in one or more
beneficiary sub-saharan african countries.--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--''.</DELETED>
<DELETED> (2) Paragraph (2) is amended to read as
follows:</DELETED>
<DELETED> ``(2) Other apparel articles assembled in one or
more beneficiary sub-saharan african countries.--Apparel
articles sewn or otherwise assembled in one or more beneficiary
sub-Saharan African countries with thread formed in the United
States from fabrics wholly formed in the United States and cut
in one or more beneficiary sub-Saharan African countries from
yarns wholly formed in the United States, or from components
knit-to-shape in the United States from yarns wholly formed in
the United States, or both (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).''.</DELETED>
<DELETED> (3) Paragraph (3) is amended--</DELETED>
<DELETED> (A) by amending the matter preceding
subparagraph (A) to read as follows:</DELETED>
<DELETED> ``(3) Apparel articles from regional fabric or
yarns.--Apparel articles wholly assembled in one or more
beneficiary sub-Saharan African countries from fabric wholly
formed in one or more beneficiary sub-Saharan African countries
from yarns originating either in the United States or one or
more beneficiary sub-Saharan African countries (including
fabrics not formed from yarns, if such fabrics are classified
under heading 5602 or 5603 of the HTS and are wholly formed in
one or more beneficiary sub-Saharan African countries), or from
components knit-to-shape in one or more beneficiary sub-Saharan
African countries from yarns originating either in the United
States or one or more beneficiary sub-Saharan African
countries, or apparel articles wholly formed on seamless
knitting machines in a beneficiary sub-Saharan African country
from yarns originating either in the United States or one or
more beneficiary sub-Saharan African countries, subject to the
following:'';</DELETED>
<DELETED> (B) in subparagraph (A)(ii)--</DELETED>
<DELETED> (i) by striking ``1.5'' and
inserting ``3''; and</DELETED>
<DELETED> (ii) by striking ``3.5'' and
inserting ``7''; and</DELETED>
<DELETED> (C) by amending subparagraph (B) to read
as follows:</DELETED>
<DELETED> ``(B) Special rules for lesser developed
countries.--</DELETED>
<DELETED> ``(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, or both, 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.</DELETED>
<DELETED> ``(ii) Lesser developed
beneficiary sub-saharan african country.--For
purposes of clause (i), the term `lesser
developed beneficiary sub-Saharan African
country' means--</DELETED>
<DELETED> ``(I) a beneficiary sub-
Saharan African country that had a per
capita gross national product of less
than $1,500 in 1998, as measured by the
International Bank for Reconstruction
and Development;</DELETED>
<DELETED> ``(II) Botswana;
and</DELETED>
<DELETED> ``(III)
Namibia.''.</DELETED>
<DELETED> (4) Paragraph (4)(B) is amended by striking
``18.5'' and inserting ``21.5''.</DELETED>
<DELETED> (5) Section 112(b) of such Act is further amended
by adding at the end the following new paragraph:</DELETED>
<DELETED> ``(7) Apparel articles assembled in one or more
beneficiary sub-saharan african countries from united states
and beneficiary sub-saharan african country components.--
Apparel articles sewn or otherwise assembled in one or more
beneficiary sub-Saharan African countries with thread formed in
the United States from components cut in the United States and
one or more beneficiary sub-Saharan African countries from
fabric wholly formed in the United States from yarns wholly
formed in the United States, or from components knit-to-shape
in the United States and one or more beneficiary sub-Saharan
African countries from yarns wholly formed in the United
States, or both (including fabrics not formed from yarns, if
such fabrics are classifiable under heading 5602 or 5603 of the
HTS).''.</DELETED>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Andean Trade Preference Expansion
Act''.
TITLE I--ANDEAN TRADE PREFERENCE
SEC. 101. 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
beneficiaries 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. 102. TEMPORARY PROVISIONS.
(a) In General.--Section 204(b) of the Andean Trade Preference Act
(19 U.S.C. 3203(b)) is amended to read as follows:
``(b) Import-Sensitive Articles.--
``(1) In general.--Subject to paragraphs (2) through (5),
the duty-free treatment provided under this title does not
apply to--
``(A) textile and apparel articles which were not
eligible articles for purposes of this title on January
1, 1994, as this title was in effect on that date;
``(B) footwear not designated at the time of the
effective date of this title as eligible articles for
the purpose of the generalized system of preferences
under title V of the Trade Act of 1974;
``(C) tuna, prepared or preserved in any manner, in
airtight containers;
``(D) petroleum, or any product derived from
petroleum, provided for in headings 2709 and 2710 of
the HTS;
``(E) 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;
``(F) articles to which reduced rates of duty apply
under subsection (c);
``(G) sugars, syrups, and sugar containing products
subject to tariff-rate quotas; or
``(H) rum and tafia classified in subheading
2208.40 of the HTS.
``(2) Transition period treatment of certain textile and
apparel articles.--
``(A) Articles covered.--During the transition
period, the preferential treatment described in
subparagraph (B) shall apply to the following articles:
``(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, or the United States, or
both, 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, 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 formed
in the United States), provided that
apparel articles sewn or
otherwise assembled from materials
described in this subclause are
assembled with thread formed in the
United States.
``(II) Fabric components knit-to-
shape in the United States from yarns
wholly formed in the United States and
fabric components knit-to-shape in 1 or
more ATPEA beneficiary countries from
yarns wholly formed in the United
States.
``(III) Fabrics or fabric
components formed or components knit-
to-shape, in 1 or more ATPEA
beneficiary countries, from yarns
wholly 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) or components
are in chief weight of llama, alpaca,
or vicuna.
``(IV) Fabrics or yarns that are
not formed in the United States or in 1
or more ATPEA beneficiary countries, to
the extent that apparel articles of
such fabrics or yarns would be eligible
for preferential treatment, without
regard to the source of the fabrics or
yarns, under Annex 401 of the NAFTA.
``(ii) Knit-to-shape apparel articles.--
Apparel articles knit-to-shape (other than
socks provided for in heading 6115 of the HTS)
in 1 or more ATPEA beneficiary countries from
yarns wholly formed in the United States.
``(iii) Regional fabric.--
``(I) General rule.--Knit apparel
articles wholly assembled in 1 or more
ATPEA beneficiary countries exclusively
from fabric formed, or fabric
components formed, or components knit-
to-shape, or any combination thereof,
in 1 or more ATPEA beneficiary
countries from yarns wholly formed in
the United States, in an amount not
exceeding the amount set forth in
subclause (II).
``(II) Limitation.--The amount
referred to in subclause (I) is
70,000,000 square meter equivalents
during the 1-year period beginning on
March 1, 2002, increased by 16 percent,
compounded annually, in each succeeding
1-year period through February 28,
2006.
``(iv) Certain other apparel articles.--
``(I) General rule.--Subject to
subclause (II), any apparel article
classifiable under subheading 6212.10
of the HTS, if the article is both cut
and sewn or otherwise assembled in the
United States, or one or more of the
ATPEA beneficiary countries, or both.
``(II) Limitation.--During the 1-
year period beginning on March 1, 2003,
and during each of the 2 succeeding 1-
year periods, apparel articles
described in subclause (I) of a
producer or an entity controlling
production shall be eligible for
preferential treatment under
subparagraph (B) only if the aggregate
cost of fabric components formed in the
United States that are used in the
production of all such articles of that
producer or entity that are entered
during the preceding 1-year period is
at least 75 percent of the aggregate
declared customs value of the fabric
contained in all such articles of that
producer or entity that are entered
during the preceding 1-year period.
``(III) Development of procedure to
ensure compliance.--The United States
Customs Service shall develop and
implement methods and procedures to
ensure ongoing compliance with the
requirement set forth in subclause
(II). If the Customs Service finds that
a producer or an entity controlling
production has not satisfied such
requirement in a 1-year period, then
apparel articles described in subclause
(I) of that producer or entity shall be
ineligible for preferential treatment
under subparagraph (B) during any
succeeding 1-year period until the
aggregate cost of fabric components
formed in the United States used in the
production of such articles of that
producer or entity that are entered
during the preceding 1-year period is
at least 85 percent of the aggregate
declared customs value of the fabric
contained in all such articles of that
producer or entity that are entered
during the preceding 1-year period.
``(v) Apparel articles assembled from
fabrics or yarn not widely available in
commercial quantities.--At the request of any
interested party, the President is authorized
to proclaim additional fabrics and yarn as
eligible for preferential treatment under
clause (i)(IV) if--
``(I) the President determines that
such fabrics or yarn 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 actions, 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).
``(vi) 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.
``(vii) Special rules.--
``(I) Exception for findings and
trimmings.--(aa) 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. Elastic strips are
considered findings or trimmings only if they are each less than 1 inch
in width and are used in the production of brassieres.
``(bb) In the case of an article
described in clause (i)(I) of this
subparagraph, sewing thread shall not
be treated as findings or trimmings
under this subclause.
``(II) Certain interlinings.--(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 paragraph because the
article contains yarns not wholly
formed in the United States or in 1 or
more ATPEA beneficiary countries shall
not be ineligible for such treatment if
the total weight of all such yarns is
not more than 7 percent of the total
weight of the good. Notwithstanding the
preceding sentence, an apparel article
containing elastomeric yarns shall be
eligible for preferential treatment
under this paragraph only if such yarns
are wholly formed in the United States.
``(IV) Special origin rule.--An
article otherwise eligible for
preferential treatment under clause (i)
of this subparagraph shall not be
ineligible for such treatment because
the article contains nylon filament
yarn (other than elastomeric yarn) that
is classifiable under subheading
5402.10.30, 5402.10.60, 5402.31.30,
5402.31.60, 5402.32.30, 5402.32.60,
5402.41.10, 5402.41.90, 5402.51.00, or
5402.61.00 of the HTS duty-free from a
country that is a party to an agreement
with the United States establishing a
free trade area, which entered into
force before January 1, 1995.
``(V) Clarification of certain knit
apparel articles.--Notwithstanding any
other provision of law, an article
otherwise eligible for preferential
treatment under clause (iii)(I) of this
subparagraph, shall not be ineligible
for such treatment because the article,
or a component thereof, contains fabric
formed in the United States from yarns
wholly formed in the United States.
``(viii) Textile luggage.--Textile
luggage--
``(I) assembled in an ATPEA
beneficiary country from fabric wholly
formed and cut in the United States,
from yarns wholly formed in the United
States, that is entered under
subheading 9802.00.80 of the HTS; or
``(II) assembled from fabric cut in
an ATPEA beneficiary country from
fabric wholly formed in the United
States from yarns wholly formed in the
United States.
``(B) Preferential treatment.--Except as provided
in subparagraph (E), during the transition period, the
articles to which subparagraph (A) applies shall enter
the United States free of duty and free of any
quantitative restrictions, limitations, or consultation
levels.
``(C) Handloomed, handmade, and folklore
articles.--For purposes of subparagraph (A)(vi), 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 transshipments.--
``(i) Penalties for exporters.--If the
President determines, based on sufficient
evidence, that an exporter has engaged in
transshipment with respect to textile or
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 textile and 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 (B) has been
claimed for a textile or 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 (B).
``(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 (B) 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 have
the meaning given that term in
paragraph (5)(D) of this subsection;
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.
``(3) Transition period treatment of certain other articles
originating in beneficiary countries.--
``(A) Equivalent tariff treatment.--
``(i) In general.--Subject to clause (ii),
the tariff treatment accorded at any time
during the transition period to any article
referred to in any of subparagraphs (B), (D)
through (F), or (H) of paragraph (1) that is an
ATPEA originating good 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.
``(ii) Exception.--Clause (i) 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.
``(B) Relationship to subsection (c) duty
reductions.--If at any time during the transition
period the rate of duty that would (but for action
taken under subparagraph (A)(i) in regard to such
period) apply with respect to any article under
subsection (c) 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.
``(C) Special rule for sugars, syrups, and sugar
containing products.--Duty-free treatment under this
Act shall not be extended to sugars, syrups, and sugar-
containing products subject to over-quota duty rates
under applicable tariff-rate quotas.
``(D) Special rule for certain tuna products.--
``(i) In general.--The President may
proclaim duty-free treatment under this Act for
tuna that is harvested by United States vessels
or ATPEA beneficiary country vessels, and is
prepared or preserved in any manner, in
airtight containers in an ATPEA beneficiary
country. Such duty-free treatment may be
proclaimed in any calendar year for a quantity
of such tuna that does not exceed 20 percent of
the domestic United States tuna pack in the
preceding calendar year. As used in the
preceding sentence, the term `tuna pack' means
tuna pack as defined by the National Marine
Fisheries Service of the United States
Department of Commerce for purposes of
subheading 1604.14.20 of the HTS as in effect
on the date of enactment of the Andean Trade
Preference Expansion Act.
``(ii) United states vessel.--For purposes
of this subparagraph, a `United States vessel'
is a vessel having a certificate of
documentation with a fishery endorsement under
chapter 121 of title 46, United States Code.
``(iii) ATPEA vessel.--For purposes of this
subparagraph, an `ATPEA vessel' is a vessel--
``(I) which is registered or
recorded in an ATPEA beneficiary
country;
``(II) which sails under the flag
of an ATPEA beneficiary country;
``(III) which is at least 75
percent owned by nationals of an ATPEA
beneficiary country or by a company
having its principal place of business
in an ATPEA beneficiary country, of
which the manager or managers, chairman
of the board of directors or of the
supervisory board, and the majority of
the members of such boards are
nationals of an ATPEA beneficiary
country and of which, in the case of a
company, at least 50 percent of the
capital is owned by an ATPEA
beneficiary country or by public bodies
or nationals of an ATPEA beneficiary
country;
``(IV) of which the master and
officers are nationals of an ATPEA
beneficiary country; and
``(V) of which at least 75 percent
of the crew are nationals of an ATPEA
beneficiary country.
``(4) Customs procedures.--
``(A) In general.--
``(i) Regulations.--Any importer that
claims preferential treatment under paragraph
(2) 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 (2) 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 (2) 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 (2) 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.
``(C) Report by ustr on cooperation of other
countries concerning circumvention.--The United States
Commissioner of Customs shall conduct a study analyzing
the extent to which each ATPEA beneficiary country--
``(i) 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;
``(ii) 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
``(iii) 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 Trade Representative shall submit to Congress, not
later than October 1, 2002, a report on the study
conducted under this subparagraph.
``(5) Definitions and special rules.--For purposes of 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 (c) and (d) 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) ATPEA originating good.--
``(i) In general.--The term `ATPEA
originating good' means a good that meets the
rules of origin for a good set forth in chapter
4 of the NAFTA as implemented pursuant to
United States law.
``(ii) Application of chapter 4.--In
applying chapter 4 of the NAFTA with respect to
an ATPEA beneficiary country for purposes of
this subsection--
``(I) no country other than the
United States and an ATPEA beneficiary
country may be treated as being a party
to the NAFTA;
``(II) any reference to trade
between the United States and Mexico
shall be deemed to refer to trade
between the United States and an ATPEA
beneficiary country;
``(III) any reference to a party
shall be deemed to refer to an ATPEA
beneficiary country or the United
States; and
``(IV) any reference to parties
shall be deemed to refer to any
combination of ATPEA beneficiary
countries or to the United States and
one or more ATPEA beneficiary countries
(or any combination thereof).
``(D) Transition period.--The term `transition
period' means, with respect to an ATPEA beneficiary
country, the period that begins on the date of
enactment, and ends on the earlier of--
``(i) February 28, 2006; or
``(ii) the date on which the FTAA or
another free trade agreement that makes
substantial progress in achieving the
negotiating objectives set forth in section
108(b)(5) of Public Law 103-182 (19 U.S.C.
3317(b)(5)) enters into force with respect to
the United States and the ATPEA beneficiary
country.
``(E) ATPEA.--The term `ATPEA' means the Andean
Trade Preference Expansion Act.
``(F) FTAA.--The term `FTAA' means the Free Trade
Area of the Americas.''.
(b) Determination Regarding Retention of Designation.--Section
203(e) of the Andean Trade Preference Act (19 U.S.C. 3202(e)) is
amended--
(1) in paragraph (1)--
(A) by redesignating subparagraphs (A) and (B) as
clauses (i) and (ii), respectively;
(B) by inserting ``(A)'' after ``(1)''; and
(C) by adding at the end the following:
``(B) The President may, after the requirements of paragraph (2)
have been met--
``(i) withdraw or suspend the designation of any country as
an ATPEA beneficiary country; or
``(ii) withdraw, suspend, or limit the application of
preferential treatment under section 204(b) (2) and (3) to any
article of any country,
if, after such designation, the President determines that, as a result
of changed circumstances, the performance of such country is not
satisfactory under the criteria set forth in section 204(b)(5)(B).'';
and
(2) by adding after paragraph (2) the following new
paragraph:
``(3) If preferential treatment under section 204(b) (2) and (3) is
withdrawn, suspended, or limited with respect to an ATPEA beneficiary
country, such country shall not be deemed to be a `party' for the
purposes of applying section 204(b)(5)(C) to imports of articles for
which preferential treatment has been withdrawn, suspended, or limited
with respect to such country.''.
(c) Reporting Requirements.--Section 203(f) of the Andean Trade
Preference Act (19 U.S.C. 3202(f)) is amended to read as follows:
``(f) Reporting Requirements.--
``(1) In general.--Not later than December 31, 2002, and
every 2 years thereafter during the period this title is in
effect, the United States Trade Representative shall submit to
Congress a report regarding the operation of this title,
including--
``(A) with respect to subsections (c) and (d), the
results of a general review of beneficiary countries
based on the considerations described in such
subsections; and
``(B) the performance of each beneficiary country
or ATPEA beneficiary country, as the case may be, under
the criteria set forth in section 204(b)(5)(B).
``(2) Public comment.--Before submitting the report
described in paragraph (1), the United States Trade
Representative shall publish a notice in the Federal Register
requesting public comments on whether beneficiary countries are
meeting the criteria listed in section 204(b)(5)(B).''.
(d) Conforming Amendments.--
(1) In general.--
(A) Section 202 of the Andean Trade Preference Act
(19 U.S.C. 3201) is amended by inserting ``(or other
preferential treatment)'' after ``treatment''.
(B) Section 204(a)(1) of the Andean Trade
Preference Act (19 U.S.C. 3203(a)(1)) is amended by
inserting ``(or otherwise provided for)'' after
``eligibility''.
(C) Section 204(a)(1) of the Andean Trade
Preference Act (19 U.S.C. 3203(a)(1)) is amended by
inserting ``(or preferential treatment)'' after ``duty-
free treatment''.
(2) Definitions.--Section 203(a) of the Andean Trade
Preference Act (19 U.S.C. 3202(a)) is amended by adding at the
end the following new paragraphs:
``(4) The term ``NAFTA'' means the North American Free
Trade Agreement entered into between the United States, Mexico,
and Canada on December 17, 1992.
``(5) The terms `WTO' and `WTO member' have the meanings
given those terms in section 2 of the Uruguay Round Agreements
Act (19 U.S.C. 3501).''.
SEC. 103. TERMINATION.
Section 208(b) of the Andean Trade Preference Act (19 U.S.C.
3206(b)) is amended to read as follows:
``(b) Termination of Preferential Treatment.--No preferential duty
treatment extended to beneficiary countries under this Act shall remain
in effect after February 28, 2006.''.
TITLE II--MISCELLANEOUS TRADE PROVISIONS
SEC. 201. WOOL PROVISIONS.
(a) Short Title.--This section may be cited as the ``Wool
Manufacturer Payment Clarification and Technical Corrections Act''.
(b) Clarification of Temporary Duty Suspension.--Heading 9902.51.13
of the Harmonized Tariff Schedule of the United States is amended by
inserting ``average'' before ``diameters''.
(c) Payments to Manufacturers of Certain Wool Products.--
(1) Payments.--Section 505 of the Trade and Development Act
of 2000 (Public Law 106-200; 114 Stat. 303) is amended as
follows:
(A) Subsection (a) is amended--
(i) by striking ``In each of the calendar
years'' and inserting ``For each of the
calendar years''; and
(ii) by striking ``for a refund of duties''
and all that follows through the end of the
subsection and inserting ``for a payment equal
to an amount determined pursuant to subsection
(d)(1).''.
(B) Subsection (b) is amended to read as follows:
``(b) Wool Yarn.--
``(1) Importing manufacturers.--For each of the calendar
years 2000, 2001, and 2002, a manufacturer of worsted wool
fabrics who imports wool yarn of the kind described in heading
9902.51.13 of the Harmonized Tariff Schedule of the United
States shall be eligible for a payment equal to an amount
determined pursuant to subsection (d)(2).
``(2) Nonimporting manufacturers.--For each of the calendar
years 2001 and 2002, any other manufacturer of worsted wool
fabrics of imported wool yarn of the kind described in heading
9902.51.13 of the Harmonized Tariff Schedule of the United
States shall be eligible for a payment equal to an amount
determined pursuant to subsection (d)(2).''.
(C) Subsection (c) is amended to read as follows:
``(c) Wool Fiber and Wool Top.--
``(1) Importing manufacturers.--For each of the calendar
years 2000, 2001, and 2002, a manufacturer of wool yarn or wool
fabric who imports wool fiber or wool top of the kind described
in heading 9902.51.14 of the Harmonized Tariff Schedule of the
United States shall be eligible for a payment equal to an
amount determined pursuant to subsection (d)(3).
``(2) Nonimporting manufacturers.--For each of the calendar
years 2001 and 2002, any other manufacturer of wool yarn or
wool fabric of imported wool fiber or wool top of the kind
described in heading 9902.51.14 of the Harmonized Tariff
Schedule of the United States shall be eligible for a payment
equal to an amount determined pursuant to subsection (d)(3).''.
(D) Section 505 is further amended by striking
subsection (d) and inserting the following new
subsections:
``(d) Amount of Annual Payments to Manufacturers.--
``(1) Manufacturers of men's suits, etc. of imported
worsted wool fabrics.--
``(A) Eligible to receive more than $5,000.--Each
annual payment to manufacturers described in subsection
(a) who, according to the records of the Customs
Service as of September 11, 2001, are eligible to
receive more than $5,000 for each of the calendar years
2000, 2001, and 2002, shall be in an amount equal to
one-third of the amount determined by multiplying
$30,124,000 by a fraction--
``(i) the numerator of which is the amount
attributable to the duties paid on eligible
wool products imported in calendar year 1999 by
the manufacturer making the claim, and
``(ii) the denominator of which is the
total amount attributable to the duties paid on
eligible wool products imported in calendar
year 1999 by all the manufacturers described in
subsection (a) who, according to the records of
the Customs Service as of September 11, 2001,
are eligible to receive more than $5,000 for
each such calendar year under this section as
it was in effect on that date.
``(B) Eligible wool products.--For purposes of
subparagraph (A), the term `eligible wool products'
refers to imported worsted wool fabrics described in
subsection (a).
``(C) Others.--All manufacturers described in
subsection (a), other than the manufacturer's to which
subparagraph (A) applies, shall each receive an annual
payment in an amount equal to one-third of the amount
determined by dividing $1,665,000 by the number of all
such other manufacturers.
``(2) Manufacturers of worsted wool fabrics of imported
wool yarn.--
``(A) Importing manufacturers.--Each annual payment
to an importing manufacturer described in subsection
(b)(1) shall be in an amount equal to one-third of the amount
determined by multiplying $2,202,000 by a fraction--
``(i) the numerator of which is the amount
attributable to the duties paid on eligible
wool products imported in calendar year 1999 by
the importing manufacturer making the claim,
and
``(ii) the denominator of which is the
total amount attributable to the duties paid on
eligible wool products imported in calendar
year 1999 by all the importing manufacturers
described in subsection (b)(1).
``(B) Eligible wool products.--For purposes of
subparagraph (A), the term `eligible wool products'
refers to imported wool yarn described in subsection
(b)(1).
``(C) Nonimporting manufacturers.--Each annual
payment to a nonimporting manufacturer described in
subsection (b)(2) shall be in an amount equal to one-
half of the amount determined by multiplying $141,000
by a fraction--
``(i) the numerator of which is the amount
attributable to the purchases of imported
eligible wool products in calendar year 1999 by
the nonimporting manufacturer making the claim,
and
``(ii) the denominator of which is the
total amount attributable to the purchases of
imported eligible wool products in calendar
year 1999 by all the nonimporting manufacturers
described in subsection (b)(2).
``(3) Manufacturers of wool yarn or wool fabric of imported
wool fiber or wool top.--
``(A) Importing manufacturers.--Each annual payment
to an importing manufacturer described in subsection
(c)(1) shall be in an amount equal to one-third of the
amount determined by multiplying $1,522,000 by a
fraction--
``(i) the numerator of which is the amount
attributable to the duties paid on eligible
wool products imported in calendar year 1999 by
the importing manufacturer making the claim,
and
``(ii) the denominator of which is the
total amount attributable to the duties paid on
eligible wool products imported in calendar
year 1999 by all the importing manufacturers
described in subsection (c)(1).
``(B) Eligible wool products.--For purposes of
subparagraph (A), the term `eligible wool products'
refers to imported wool fiber or wool top described in
subsection (c)(1).
``(C) Nonimporting manufacturers.--Each annual
payment to a nonimporting manufacturer described in
subsection (c)(2) shall be in an amount equal to one-
half of the amount determined by multiplying $597,000
by a fraction--
``(i) the numerator of which is the amount
attributable to the purchases of imported
eligible wool products in calendar year 1999 by
the nonimporting manufacturer making the claim,
and
``(ii) the denominator of which is the
amount attributable to the purchases of
imported eligible wool products in calendar
year 1999 by all the nonimporting manufacturers
described in subsection (c)(2).
``(4) Letters of intent.--Except for the nonimporting
manufacturers described in subsections (b)(2) and (c)(2) who
may make claims under this section by virtue of the enactment
of the Wool Manufacturer Payment Clarification and Technical
Corrections Act, only manufacturers who, according to the
records of the Customs Service, filed with the Customs Service
before September 11, 2001, letters of intent to establish
eligibility to be claimants are eligible to make a claim for a
payment under this section.
``(5) Amount attributable to purchases by nonimporting
manufacturers.--
``(A) Amount attributable.--For purposes of
paragraphs (2)(C) and (3)(C), the amount attributable
to the purchases of imported eligible wool products in
calendar year 1999 by a nonimporting manufacturer shall
be the amount the nonimporting manufacturer paid for
eligible wool products in calendar year 1999, as
evidenced by invoices. The nonimporting manufacturer
shall make such calculation and submit the resulting
amount to the Customs Service, within 45 days after the
date of enactment of the Wool Manufacturer Payment
Clarification and Technical Corrections Act, in a
signed affidavit that attests that the information
contained therein is true and accurate to the best of
the affiant's belief and knowledge. The nonimporting
manufacturer shall retain the records upon which the
calculation is based for a period of five years
beginning on the date the affidavit is submitted to the
Customs Service.
``(B) Eligible wool product.--For purposes of
subparagraph (A)--
``(i) the eligible wool product for
nonimporting manufacturers of worsted wool
fabrics is wool yarn of the kind described in
heading 9902.51.13 of the Harmonized Tariff
Schedule of the United States purchased in
calendar year 1999; and
``(ii) the eligible wool products for
nonimporting manufacturers of wool yarn or wool
fabric are wool fiber or wool top of the kind
described in heading 9902.51.14 of such
Schedule purchased in calendar year 1999.
``(6) Amount attributable to duties paid.--For purposes of
paragraphs (1), (2)(A), and (3)(A), the amount attributable to
the duties paid by a manufacturer shall be the amount shown on
the records of the Customs Service as of September 11, 2001,
under this section as then in effect.
``(7) Schedule of payments; reallocations.--
``(A) Schedule.--Of the payments described in
paragraphs (1), (2)(A), and (3)(A), the Customs Service
shall make the first installment on or before December
31, 2001, the second installment on or before April 15,
2002, and the third installment on or before April 15,
2003. Of the payments described in paragraphs (2)(C)
and (3)(C), the Customs Service shall make the first
installment on or before April 15, 2002, and the second
installment on or before April 15, 2003.
``(B) Reallocations.--In the event that a
manufacturer that would have received payment under
subparagraph (A) or (C) of paragraph (1), (2), or (3)
ceases to be qualified for such payment as such a
manufacturer, the amounts otherwise payable to the
remaining manufacturers under such subparagraph shall
be increased on a pro rata basis by the amount of the
payment such manufacturer would have received.
``(8) Reference.--For purposes of paragraphs (1)(A) and
(6), the `records of the Customs Service as of September 11,
2001' are the records of the Wool Duty Unit of the Customs
Service on September 11, 2001, as adjusted by the Customs
Service to the extent necessary to carry out this section. The
amounts so adjusted are not subject to administrative or
judicial review.
``(e) Affidavits by Manufacturers.--
``(1) Affidavit required.--A manufacturer may not receive a
payment under this section for calendar year 2000, 2001, or
2002, as the case may be, unless that manufacturer has
submitted to the Customs Service for that calendar year a
signed affidavit that attests that, during that calendar year,
the affiant was a manufacturer in the United States described
in subsection (a), (b), or (c).
``(2) Timing.--An affidavit under paragraph (1) shall be
valid--
``(A) in the case of a manufacturer described in
paragraph (1), (2)(A), or (3)(A) of subsection (d)
filing a claim for a payment for calendar year 2000,
only if the affidavit is postmarked no later than 15
days after the date of enactment of the Wool
Manufacturer Payment Clarification and Technical
Corrections Act; and
``(B) in the case of a claim for a payment for
calendar year 2001 or 2002, only if the affidavit is
postmarked no later than March 1, 2002, or March 1,
2003, respectively.
``(f) Offsets.--Notwithstanding any other provision of this
section, any amount otherwise payable under subsection (d) to a
manufacturer in calendar year 2001 and, where applicable, in calendar
years 2002 and 2003, shall be reduced by the amount of any payment
received by that manufacturer under this section before the enactment
of the Wool Manufacturer Payment Clarification and Technical
Corrections Act.
``(g) Definition.--For purposes of this section, the manufacturer
is the party that owns--
``(1) imported worsted wool fabric, of the kind described
in heading 9902.51.11 or 9902.51.12 of the Harmonized Tariff
Schedule of the United States, at the time the fabric is cut
and sewn in the United States into men's or boys' suits, suit-
type jackets, or trousers;
``(2) imported wool yarn, of the kind described in heading
9902.51.13 of such Schedule, at the time the yarn is processed
in the United States into worsted wool fabric; or
``(3) imported wool fiber or wool top, of the kind
described in heading 9902.51.14 of such Schedule, at the time
the wool fiber or wool top is processed in the United States
into wool yarn.''.
(2) Funding.--There is authorized to be appropriated and is
appropriated, out of amounts in the General Fund of the
Treasury not otherwise appropriated, $36,251,000 to carry out
the amendments made by paragraph (1).
SEC. 202. CEILING FANS.
(a) In General.--Notwithstanding any other provision of law,
ceiling fans classified under subheading 8414.51.00 of the Harmonized
Tariff Schedule of the United States imported from Thailand shall enter
duty-free and without any quantitative limitations, if duty-free
treatment under title V of the Trade Act of 1974 (19 U.S.C. 2461 et
seq.) would have applied to such entry had the competitive need
limitation been waived under section 503(d) of such Act.
(b) Applicability.--The provisions of this section shall apply to
ceiling fans described in subsection (a) that are entered, or withdrawn
from warehouse for consumption--
(1) on or after the date that is 15 days after the date of
enactment of this Act; and
(2) before July 30, 2002.
SEC. 203. CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN
NUCLEAR FACILITIES.
(a) In General.--Subheading 9902.84.02 of the Harmonized Tariff
Schedule of the United States is amended--
(1) by striking ``4.9%'' and inserting ``Free''; and
(2) by striking ``12/31/2003'' and inserting ``12/31/
2006''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to goods entered, or withdrawn from warehouse for consumption, on
or after January 1, 2002.
Calendar No. 295
107th CONGRESS
1st Session
H. R. 3009
[Report No. 107-126]
_______________________________________________________________________
AN ACT
To extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes.
_______________________________________________________________________
December 14, 2001
Reported with an amendment