[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 525 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 525

  To expand trade benefits to certain Andean countries, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 13, 2001

Mr. Graham (for himself, Mr. DeWine, Mr. Hagel, Mr. Breaux, Mr. McCain, 
Mr. Dodd, Mr. Thompson, Mr. Biden, Mr. Nelson of Nebraska, Mr. Kyl, and 
 Mr. Nelson of Florida) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To expand trade benefits to certain Andean countries, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Andean Trade Preference Expansion 
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 
        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. 3. 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 molasses classified in 
                subheadings 1701.11.03, 1701.12.02, 1701.99.02, 
                1702.90.32, 1806.10.42, and 2106.90.12 of the HTS; or
                    ``(H) rum and tafia classified in subheading 
                2208.40.00 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 in one or 
                        more atpea beneficiary countries.--Apparel 
                        articles assembled in one or more ATPEA 
                        beneficiary countries from fabrics wholly 
                        formed and cut in the United States, from yarns 
                        wholly formed in the United States, that are--
                                    ``(I) entered under subheading 
                                9802.00.80 of the HTS; or
                                    ``(II) entered under chapter 61 or 
                                62 of the HTS, if, after such assembly, 
                                the articles would have qualified for 
                                entry under subheading 9802.00.80 of 
                                the HTS but for the fact that the 
                                articles were embroidered or subjected 
                                to stone-washing, enzyme-washing, acid 
                                washing, perma-pressing, oven-baking, 
                                bleaching, garment-dyeing, screen 
                                printing, or other similar processes.
                            ``(ii) Apparel articles cut and assembled 
                        in one or more atpea beneficiary countries.--
                        Apparel articles cut in one or more ATPEA 
                        beneficiary countries from fabric wholly formed 
                        in the United States from yarns wholly formed 
                        in the United States, if such articles are 
                        assembled in one or more such countries with 
                        thread formed in the United States.
                            ``(iii) Certain knit-to-shape apparel 
                        articles.--
                                    ``(I) General rule.--Apparel 
                                articles knit-to-shape (other than 
                                socks provided for in heading 6115 of 
                                the HTS) in an ATPEA beneficiary 
                                country from yarns wholly formed in the 
                                United States.
                                    ``(II) Knit-to-shape in an atpea 
                                beneficiary country and the united 
                                states.--Apparel articles assembled in 
                                an ATPEA beneficiary country from 
                                components knit-to-shape in the United 
                                States and components knit-to-shape in 
                                an ATPEA beneficiary country from yarns 
                                wholly formed in the United States.
                                    ``(III) Assembled in an atpea 
                                beneficiary country.--Apparel articles 
                                assembled in an ATPEA beneficiary 
                                country from components knit-to-shape 
                                in the United States from yarns wholly 
                                formed in the United States.
                            ``(iv) Regional fabric.--
                                    ``(I) General rule.--Knit apparel 
                                articles cut and wholly assembled in 
                                one or more ATPEA beneficiary countries 
                                from fabric formed in one 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 
                                October 1, 2001, increased by 16 
                                percent, compounded annually, in each 
                                succeeding 1-year period through 
                                September 30, 2005.
                            ``(v) 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 October 1, 
                                2002, and during each of the 3 
                                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 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 in 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.
                            ``(vi) Apparel articles assembled from 
                        fabrics or yarn not widely available in 
                        commercial quantities.--
                                    ``(I) General rule.--Apparel 
                                articles that are both cut (or knit-to-
                                shape) and sewn or otherwise assembled 
                                in one or more ATPEA beneficiary 
                                countries, from fabrics or yarn that is 
                                not formed in the United States or in 
                                one or more ATPEA 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 
                                eligible.--At the request of any 
                                interested party, the President is 
                                authorized to proclaim additional 
                                fabrics and yarn as eligible for 
                                preferential treatment under subclause 
                                (I) if--
                                            ``(aa) the President 
                                        determines that such fabrics or 
                                        yarn cannot be supplied by the 
                                        domestic industry in commercial 
                                        quantities in a timely manner;
                                            ``(bb) 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;
                                            ``(cc) 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 division (bb);
                                            ``(dd) a period of 60 
                                        calendar days, beginning with 
                                        the first day on which the 
                                        President has met the 
                                        requirements of division (cc), 
                                        has expired; and
                                            ``(ee) the President has 
                                        consulted with such committees 
                                        regarding the proposed action 
                                        during the period referred to 
                                        in division (cc).
                            ``(vii) 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.
                            ``(viii) Apparel articles made from alpaca, 
                        vicuna, or llama.--An apparel article of an 
                        ATPEA beneficiary country in chief weight of 
                        alpaca, vicuna, or llama.
                            ``(ix) 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 (ii) 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 fibers or yarns not 
                                wholly formed in the United States or 
                                in one or more ATPEA beneficiary 
                                countries shall not be ineligible for 
                                such treatment if the total weight of 
                                all such fibers or yarns is not more 
                                than 7 percent of the total weight of 
                                the good. 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) 
                                or (ii) 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) Fabrics not formed from 
                                yarns.--An article otherwise eligible 
                                for preferential treatment under clause 
                                (i) or (ii) of this subparagraph shall 
                                not be ineligible for such treatment 
                                because the article is assembled in one 
                                or more beneficiary countries from 
                                fabrics not formed from yarns, if such 
                                fabrics are classifiable under heading 
                                5602 or 5603 of the HTS and are wholly 
                                formed (or wholly formed and cut, as 
                                the case may be) in the United States.
                                    ``(VI) Clarification of certain 
                                knit apparel articles.--Notwithstanding 
                                any other provision of law, an article 
                                otherwise eligible for preferential 
                                treatment under clause (iv)(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.''.
                            ``(x) 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)(vii), 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) through 
                        (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.
            ``(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 (b) and (c) of section 203 and other 
                appropriate criteria, including the following:
                            ``(i) Whether the beneficiary country has 
                        demonstrated a commitment to--
                                    ``(I) undertake its obligations 
                                under the WTO, including those 
                                agreements listed in section 101(d) of 
                                the Uruguay Round Agreements Act, on or 
                                ahead of schedule; and
                                    ``(II) participate in negotiations 
                                toward the completion of the FTAA or 
                                another free trade agreement.
                            ``(ii) The extent to which the country 
                        provides protection of intellectual property 
                        rights consistent with or greater than the 
                        protection afforded under the Agreement on 
                        Trade-Related Aspects of Intellectual Property 
                        Rights described in section 101(d)(15) of the 
                        Uruguay Round Agreements Act.
                            ``(iii) The extent to which the country 
                        provides internationally recognized worker 
                        rights, including--
                                    ``(I) the right of association;
                                    ``(II) the right to organize and 
                                bargain collectively;
                                    ``(III) a prohibition on the use of 
                                any form of forced or compulsory labor;
                                    ``(IV) a minimum age for the 
                                employment of children; and
                                    ``(V) acceptable conditions of work 
                                with respect to minimum wages,  hours 
of work, and occupational safety and health;
                            ``(iv) Whether the country has implemented 
                        its commitments to eliminate the worst forms of 
                        child labor, as defined in section 507(6) of 
                        the Trade Act of 1974.
                            ``(v) The extent to which the country has 
                        met the counter-narcotics certification 
                        criteria set forth in section 490 of the 
                        Foreign Assistance Act of 1961 (22 U.S.C. 
                        2291j) for eligibility for United States 
                        assistance.
                            ``(vi) The extent to which the country has 
                        taken steps to become a party to and implements 
                        the Inter-American Convention Against 
                        Corruption.
                            ``(vii) The extent to which the country--
                                    ``(I) applies transparent, 
                                nondiscriminatory, and competitive 
                                procedures in government procurement 
                                equivalent to those contained in the 
                                Agreement on Government Procurement 
                                described in section 101(d)(17) of the 
                                Uruguay Round Agreements Act; and
                                    ``(II) contributes to efforts in 
                                international fora to develop and 
                                implement international rules in 
                                transparency in government procurement.
                    ``(C) 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 October 1, 2001, and 
                ends on the earlier of--
                            ``(i) September 30, 2005; 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 (b) and (c), 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''.
            (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. 4. 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 Duty-Free Treatment.--No duty-free treatment 
extended to beneficiary countries under this title shall remain in 
effect after September 30, 2005.''.
                                 <all>