[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.
                                 <all>