[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2485 Placed on Calendar Senate (PCS)]






                                                       Calendar No. 367
107th CONGRESS
  2d Session
                                S. 2485

   Entitled the ``Andean Trade Promotion and Drug Eradication Act''.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 8, 2002

  Mr. McCain (for himself, Mr. Gramm, and Mr. Nickles) introduced the 
             following bill; which was read the first time

                              May 9, 2002

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
   Entitled the ``Andean Trade Promotion and Drug Eradication Act''.

    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 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:
                    ``(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) 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.
            ``(2) Exclusions.--Subject to paragraph (3), duty-free 
        treatment under this title may not be extended to--
                    ``(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;
                    ``(B) rum and tafia classified in subheading 
                2208.40 of the HTS; or
                    ``(C) sugars, syrups, and sugar-containing products 
                subject to over-quota duty rates under applicable 
                tariff-rate quotas.
            ``(3) Apparel articles.--
                    ``(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).
                    ``(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 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:
                                    ``(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).
                                    ``(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 classified 
                                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.
                                    ``(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.
                            ``(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 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).
                                    ``(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 ATPDEA 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.
                                    ``(II) 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.
                    ``(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.
                    ``(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 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.
                            ``(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 transshiped 
                        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 
                        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.
                            ``(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 ATPDEA 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 ATPDEA 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) 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:
                            ``(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.




                                                       Calendar No. 367

107th CONGRESS

  2d Session

                                S. 2485

_______________________________________________________________________

                                 A BILL

   Entitled the ``Andean Trade Promotion and Drug Eradication Act''.

_______________________________________________________________________

                              May 9, 2002

            Read the second time and placed on the calendar