[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1121 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1121
To extend certain trade benefits to countries of the greater Middle
East.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 22, 2003
Mr. Baucus (for himself and Mr. McCain) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To extend certain trade benefits to countries of the greater Middle
East.
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 ``Middle East Trade and Engagement Act
of 2003''.
SEC. 2. FINDINGS.
Congress finds that--
(1) it is in the mutual interest of the United States and
the countries of the greater Middle East to promote stable and
sustainable growth and development throughout the greater
Middle East;
(2) Congress views democratization and economic progress in
the countries of the greater Middle East as important elements
of a policy to address terrorism and endemic instability;
(3) free trade relationships are not a substitute for, but
a complement to, necessary political and economic reforms that
lead to political liberalization and economic freedom;
(4) the countries of the greater Middle East have enormous
economic potential and are of enduring political significance
to the United States;
(5) despite their economic potential, the countries of the
greater Middle East are experiencing deepening poverty, slow
job creation, and a declining share of world trade and
investment, while at the same time experiencing population
growth rates among the highest in the world;
(6) these economic conditions are in part the result of
barriers to trade and investment, a failure to engage fully in
the global trading system, lack of participation in the World
Trade Organization, and, often, a lack of economic
diversification and over-reliance on the energy sector;
(7) offering the countries of the greater Middle East
enhanced trade preferences will encourage higher levels of
trade and direct investment and help bring those countries more
fully into the global trading system;
(8) higher levels of trade and investment and greater
involvement in the global trading system can lead to increased
economic development, which can in turn lead to more jobs for
people in the countries of the greater Middle East; and
(9) encouraging the reciprocal reduction of trade and
investment barriers in the greater Middle East will enhance the
benefits of trade and investment for all the countries in the
greater Middle East as well as enhance commercial and political
ties between the United States and the greater Middle East.
SEC. 3. STATEMENT OF POLICY.
Congress supports--
(1) encouraging increased trade and investment between the
United States and the countries of the greater Middle East and
among the countries of the greater Middle East;
(2) reducing tariff and nontariff barriers and other
obstacles to trade between the United States and the countries
of the greater Middle East and among the countries of the
greater Middle East;
(3) strengthening and expanding the private sector and
accelerating the rate of job creation in the countries of the
greater Middle East;
(4) focusing on countries committed to the rule of law,
economic reform, political liberalization, respect for human
rights, and the eradication of poverty;
(5) facilitating the development of civil societies and
political freedom in the countries of the greater Middle East;
(6) promoting sustainable development, and protecting and
preserving the environment in a manner consistent with economic
development; and
(7) encouraging the countries of the greater Middle East to
diversify their economies, implement domestic economic reforms,
open to trade, and adopt anticorruption measures, including
through accession to the Organization for Economic Cooperation
and Development (OECD) Convention on Combating Bribery of
Foreign Public Officials in International Business
Transactions.
SEC. 4. DESIGNATION OF ELIGIBLE COUNTRIES.
(a) In General.--The President is authorized to designate any
country listed in subsection (c) as a beneficiary country if the
President determines that the country--
(1) has established, or is making continual progress toward
establishing--
(A) a market-based economy that protects private
property rights, incorporates an open rules-based
trading system, and minimizes government interference
in the economy through measures such as price controls,
subsidies, and government ownership of economic assets;
(B) the rule of law and the right to due process, a
fair trial, and equal protection under the law;
(C) political pluralism, a climate free of
political intimidation and restrictions on peaceful
political activity, and democratic elections that meet
international standards of fairness, transparency, and
participation;
(D) the elimination of barriers to United States
trade and investment, including by--
(i) providing national treatment and
measures to create an environment conducive to
domestic and foreign investment;
(ii) protecting intellectual property; and
(iii) resolving bilateral trade and
investment disputes;
(E) economic policies that reduce poverty, increase
the availability of health care and educational
opportunities, expand physical infrastructure, promote
the development of private enterprise, and encourage
the formation of capital markets through micro-credit
or other programs;
(F) a system to combat corruption and bribery, such
as signing and implementing the OECD Convention on
Combating Bribery of Foreign Public Officials in
International Business Transactions;
(G) protection of internationally recognized worker
rights, including the right of association, the right
to organize and bargain collectively, a prohibition on
the use of any form of forced or compulsory labor, a
minimum age for the employment of children, and
acceptable conditions of work; and
(H) policies that provide a high level of
environmental protection;
(2) does not engage in activities that undermine United
States national security or foreign policy interests, and
supports a peaceful resolution of the Israeli-Palestinian
conflict;
(3) is a signatory of the United Nations Declaration of
Human Rights, does not engage in gross violations of
internationally recognized human rights, and is making
continuing and verifiable progress on the protection of
internationally recognized human rights, including freedom of
speech and press, freedom of peaceful assembly and association,
and freedom of religion;
(4) is not listed by the United States Department of State
as a state sponsor of terrorism and cooperates fully in
international efforts to combat terrorism;
(5) does not participate in the primary, secondary, or
tertiary economic boycott of Israel; and
(6) otherwise meets the eligibility criteria set forth in
section 502(b)(2) of the Trade Act of 1974 (19 U.S.C.
2462(b)(2)), other than section 502(b)(2)(B).
(b) Continuing Compliance.--If the President determines that a
designated beneficiary country no longer meets the requirements
described in subsection (a), the President shall terminate the
designation of the country made pursuant to subsection (a) and inform
Congress of the President's determination and the reasons therefor.
(c) Countries Eligible for Designation.--In designating countries
as beneficiary countries under this Act, the President shall consider
only the following countries of the greater Middle East or their
successor political entities:
(1) Afghanistan.
(2) Algeria.
(3) Azerbaijan.
(4) Bahrain.
(5) Bangladesh.
(6) Egypt.
(7) Iraq.
(8) Kuwait.
(9) Lebanon.
(10) Morocco.
(11) Oman.
(12) Pakistan.
(13) Qatar.
(14) Saudi Arabia.
(15) Tunisia.
(16) Turkey.
(17) United Arab Emirates.
(18) Yemen.
(d) The Palestinian Authority.--The President is also authorized to
designate the Palestinian Authority or its successor political entity
as a beneficiary political entity which, if so designated, shall be
accorded benefits under this Act as if it were a beneficiary country,
if the President determines that the Palestinian Authority--
(1) satisfies the conditions of subsection (a) (1) and (2);
(2) does not participate in acts of terrorism, and takes
active measures to combat terrorism;
(3) cooperates fully in international efforts to combat
terrorism;
(4) does not engage in gross violations of internationally
recognized human rights, and is making continuing and
verifiable progress on the protection of internationally
recognized human rights, including freedom of speech and the
press, freedom of peaceful assembly and association, and
freedom of religion; and
(5) accepts Israel's right to exist in peace within secure
borders.
SEC. 5. DESIGNATION OF ELIGIBLE ARTICLES.
(a) Eligible Articles.--Except as provided in sections 503(b)(2)
and (3) of the Trade Act of 1974 (19 U.S.C. 2463(b)(2) and (3)), the
President is authorized to designate articles as eligible for duty-free
treatment from all beneficiary countries for purposes of this Act by
Executive order or Presidential proclamation after receiving the advice
of the International Trade Commission in accordance with subsection
(c).
(b) Rules of Origin.--
(1) General rule.--The duty-free treatment provided under
this Act shall apply to any eligible article which is the
growth, product, or manufacture of 1 or more beneficiary
countries if--
(A) that article is imported directly from a
beneficiary country into the customs territory of the
United States; and
(B) the sum of--
(i) the cost or value of the materials
produced in 1 or more beneficiary countries,
plus
(ii) the direct cost of processing
operations performed in such beneficiary
country or countries,
is not less than 35 percent of the appraised value of
such article at the time it is entered.
(2) Additional countries.--For purposes of the rules of
origin in paragraph (1) and the regulations prescribed pursuant
to paragraph (4), the term ``beneficiary country'' includes
Israel and Jordan.
(3) Exclusions.--An article shall not be treated as the
growth, product, or manufacture of a beneficiary country by
virtue of having merely undergone--
(A) simple combining or packaging operations; or
(B) mere dilution with water or mere dilution with
another substance that does not materially alter the
characteristics of the article.
(4) Regulations.--The Secretary of the Treasury, after
consulting with the United States Trade Representative, shall
prescribe such regulations as may be necessary to carry out
this subsection, including, but not limited to, regulations
providing that, in order to be eligible for duty-free treatment
under this Act, an article--
(A) must be wholly the growth, product, or
manufacture of 1 or more beneficiary countries,
including Israel and Jordan; or
(B) must be a new or different article of commerce
which has been grown, produced, or manufactured in 1 or
more beneficiary countries, including Israel and
Jordan.
(c) International Trade Commission Advice.--Before designating an
article as an eligible article under subsection (a), the President
shall publish in the Federal Register and furnish the International
Trade Commission with a list of articles that may be considered for
designation as eligible articles for purposes of this Act. The
President shall comply with the provisions of sections 131, 132, 133,
and 134 of the Trade Act of 1974 as if an action under this Act were an
action taken under section 123 of the Trade Act of 1974 to carry out a
trade agreement entered into under section 123.
SEC. 6. UNITED STATES-MIDDLE EAST TRADE AND ECONOMIC COOPERATION FORUM.
(a) Declaration of Policy.--The President shall convene annual
high-level meetings among appropriate officials of the United States
Government, officials of the governments of eligible beneficiary
countries, and officials of the Governments of Israel and Jordan in
order to foster close economic ties between the United States and the
countries of the greater Middle East.
(b) Establishment.--Not later than 12 months after the date of
enactment of this Act, the President, after consulting with Congress
and the governments concerned, shall establish a United States-Middle
East Trade and Economic Cooperation Forum (in this section referred to
as the ``Forum'').
(c) Requirements.--In creating the Forum, the President shall meet
the following requirements:
(1) The President shall direct the Secretary of Commerce,
the Secretary of the Treasury, the Secretary of State, and the
United States Trade Representative to host the first annual
meeting with their counterparts from the governments of
designated beneficiary countries, and those countries and
political entities listed in section 4 (c) and (d) that the
President determines are taking substantial positive steps
toward meeting the eligibility requirements in section 4. The
purpose of the meeting shall be to discuss expanding trade and
investment relations between the United States and the
countries of the greater Middle East and the implementation of
this Act including encouraging joint ventures between small and
large businesses. The President shall also direct the
Secretaries and the United States Trade Representative to
invite to the meeting representatives from appropriate
organizations and government officials from countries and
political entities in the greater Middle East.
(2)(A) The President, in consultation with Congress, shall
encourage United States nongovernmental organizations to host
annual meetings with nongovernmental organizations from the
countries and political entities of the greater Middle East in
conjunction with the annual meetings of the Forum for the
purpose of discussing the issues described in paragraph (1).
(B) The President, in consultation with Congress, shall
encourage United States representatives of the private sector
to host annual meetings with representatives of the private
sector from the countries and political entities of the greater
Middle East in conjunction with the annual meetings of the
Forum for the purpose of discussing the issues described in
paragraph (1).
(3) The President shall, to the extent practicable, meet
with the heads of governments of designated beneficiary
countries, and those countries and political entities listed in
section 4 (c) and (d) that the President determines are taking
substantial positive steps toward meeting the eligibility
requirements in section 4, not less than once every 2 years for
the purpose of discussing the issues described in paragraph
(1). The first such meeting should take place not later than 12
months after the date of enactment of this Act.
(d) Dissemination of Information by USIS.--In order to assist in
carrying out the purposes of the Forum, the United States Information
Service shall disseminate regularly, through multiple media, economic
information in support of the free market economic reforms described in
this Act.
SEC. 7. FREE TRADE AGREEMENTS WITH COUNTRIES OR POLITICAL ENTITIES IN
THE GREATER MIDDLE EAST.
(a) Declaration of Policy.--Congress declares that bilateral free
trade agreements should be negotiated, where feasible, with interested
countries or political entities in the greater Middle East, in order to
serve as the catalyst for increasing trade between the United States
and the greater Middle East and increasing private sector investment in
the greater Middle East.
(b) Eligibility.--Any country or political entity that desires to
negotiate a bilateral free trade agreement with the United States shall
be a member of the World Trade Organization or be working diligently
toward membership and shall satisfy the criteria in section 4(a) of
this Act.
(c) Plan Requirement.--
(1) In general.--The President, taking into account the
willingness of the governments of the beneficiary countries to
engage in negotiations to enter into free trade agreements,
shall develop a plan for the purpose of negotiating and
entering into 1 or more trade agreements with interested
beneficiary countries.
(2) Elements of plan.--The plan shall include the
following:
(A) The specific objectives of the United States
with respect to negotiations described in paragraph (1)
and a suggested timetable for achieving those
objectives.
(B) The benefits to both the United States and the
relevant beneficiary countries with respect to the
applicable free trade agreement or agreements.
(C) A mutually agreed-upon timetable for the
negotiations.
(D) Subject matter anticipated to be covered by the
negotiations and United States laws, programs, and
policies, as well as the laws of participating eligible
countries of the greater Middle East and existing
bilateral and multilateral and economic cooperation and
trade agreements, that may be affected by the agreement
or agreements.
(E) Procedures to ensure the following:
(i) Adequate consultation with Congress and
the private sector during the negotiations.
(ii) Consultation with Congress regarding
all matters relating to implementation of the
agreement or agreements.
(iii) Approval by Congress of the agreement
or agreements.
(iv) Adequate consultations with the
relevant governments of the greater Middle East
during the negotiation of the agreement or
agreements.
(d) Reporting Requirement.--Not later than 12 months after the date
of enactment of this Act, the President shall prepare and transmit to
Congress a report containing the plan developed pursuant to subsection
(c).
SEC. 8. REPORTING REQUIREMENT.
(a) In General.--The President shall monitor, review, and prepare a
report annually on the progress of each country and political entity
listed in section 4 (c) and (d) in meeting the requirements described
in section 4(a) in order to determine the current or potential
eligibility of each country or political entity to be designated as a
beneficiary country under this Act. The report shall also include a
comprehensive discussion of the implementation of this Act and an
analysis of the trade and investment policy of the United States with
respect to the countries and political entities listed in section 4 (c)
and (d). To the extent that any subject matter required by the report
is included in another report submitted by the President, the report
required by this section may reference the other report.
(b) Time for Submitting Report.--The President shall submit the
report described in subsection (a) to Congress not later than 1 year
after the date of enactment of this Act, and annually thereafter
through 2011.
SEC. 9. PRESERVATION OF BENEFITS OF UNITED STATES-ISRAEL AND UNITED
STATES-JORDAN FREE TRADE AGREEMENTS.
Nothing in this Act shall be deemed to nullify or impair any right
or benefit accorded either to Israel or to Jordan under the existing
trade agreements with the United States.
SEC. 10. TERMINATION OF PREFERENTIAL TREATMENT.
No duty-free treatment or other preferential treatment extended to
beneficiary countries under this Act shall remain in effect after
December 31, 2011.
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