[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4340 Reported in House (RH)]


                                                 Union Calendar No. 171
109th CONGRESS
  1st Session
                                H. R. 4340

                          [Report No. 109-318]

      To implement the United States-Bahrain Free Trade Agreement.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 16, 2005

Mr. Blunt (for himself and Mr. Rangel) (both by request) introduced the 
 following bill; which was referred to the Committee on Ways and Means

                            December 6, 2005

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed

_______________________________________________________________________

                                 A BILL


 
      To implement the United States-Bahrain Free Trade Agreement.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``United States-
Bahrain Free Trade Agreement Implementation Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT

Sec. 101. Approval and entry into force of the Agreement.
Sec. 102. Relationship of the agreement to United States and State law.
Sec. 103. Implementing actions in anticipation of entry into force and 
                            initial regulations.
Sec. 104. Consultation and layover provisions for, and effective date 
                            of, proclaimed actions.
Sec. 105. Administration of dispute settlement proceedings.
Sec. 106. Effective dates; effect of termination.
                      TITLE II--CUSTOMS PROVISIONS

Sec. 201. Tariff modifications.
Sec. 202. Rules of origin.
Sec. 203. Customs user fees.
Sec. 204. Enforcement relating to trade in textile and apparel goods.
Sec. 205. Regulations.
                     TITLE III--RELIEF FROM IMPORTS

Sec. 301. Definitions.
     Subtitle A--Relief From Imports Benefiting From the Agreement

Sec. 311. Commencing of action for relief.
Sec. 312. Commission action on petition.
Sec. 313. Provision of relief.
Sec. 314. Termination of relief authority.
Sec. 315. Compensation authority.
Sec. 316. Confidential business information.
           Subtitle B--Textile and Apparel Safeguard Measures

Sec. 321. Commencement of action for relief.
Sec. 322. Determination and provision of relief.
Sec. 323. Period of relief.
Sec. 324. Articles exempt from relief.
Sec. 325. Rate after termination of import relief.
Sec. 326. Termination of relief authority.
Sec. 327. Compensation authority.
Sec. 328. Confidential business information.
                         TITLE IV--PROCUREMENT

Sec. 401. Eligible products.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to approve and implement the Free Trade Agreement 
        between the United States and Bahrain entered into under the 
        authority of section 2103(b) of the Bipartisan Trade Promotion 
        Authority Act of 2002 (19 U.S.C. 3803(b));
            (2) to strengthen and develop economic relations between 
        the United States and Bahrain for their mutual benefit;
            (3) to establish free trade between the 2 nations through 
        the reduction and elimination of barriers to trade in goods and 
        services; and
            (4) to lay the foundation for further cooperation to expand 
        and enhance the benefits of such Agreement.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Agreement.--The term ``Agreement'' means the United 
        States-Bahrain Free Trade Agreement approved by Congress under 
        section 101(a)(1).
            (2) HTS.--The term ``HTS'' means the Harmonized Tariff 
        Schedule of the United States.
            (3) Textile or apparel good.--The term ``textile or apparel 
        good'' means a good listed in the Annex to the Agreement on 
        Textiles and Clothing referred to in section 101(d)(4) of the 
        Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).

TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT

SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE AGREEMENT.

    (a) Approval of Agreement and Statement of Administrative Action.--
Pursuant to section 2105 of the Bipartisan Trade Promotion Authority 
Act of 2002 (19 U.S.C. 3805) and section 151 of the Trade Act of 1974 
(19 U.S.C. 2191), Congress approves--
            (1) the United States-Bahrain Free Trade Agreement entered 
        into on September 14, 2004, with Bahrain and submitted to 
        Congress on November 16, 2005; and
            (2) the statement of administrative action proposed to 
        implement the Agreement that was submitted to Congress on 
        November 16, 2005.
    (b) Conditions for Entry Into Force of the Agreement.--At such time 
as the President determines that Bahrain has taken measures necessary 
to bring it into compliance with those provisions of the Agreement that 
are to take effect on the date on which the Agreement enters into 
force, the President is authorized to exchange notes with the 
Government of Bahrain providing for the entry into force, on or after 
January 1, 2006, of the Agreement with respect to the United States.

SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE LAW.

    (a) Relationship of Agreement to United States Law.--
            (1) United states law to prevail in conflict.--No provision 
        of the Agreement, nor the application of any such provision to 
        any person or circumstance, which is inconsistent with any law 
        of the United States shall have effect.
            (2) Construction.--Nothing in this Act shall be construed--
                    (A) to amend or modify any law of the United 
                States; or
                    (B) to limit any authority conferred under any law 
                of the United States,
        unless specifically provided for in this Act.
    (b) Relationship of Agreement to State Law.--
            (1) Legal challenge.--No State law, or the application 
        thereof, may be declared invalid as to any person or 
        circumstance on the ground that the provision or application is 
        inconsistent with the Agreement, except in an action brought by 
        the United States for the purpose of declaring such law or 
        application invalid.
            (2) Definition of state law.--For purposes of this 
        subsection, the term ``State law'' includes--
                    (A) any law of a political subdivision of a State; 
                and
                    (B) any State law regulating or taxing the business 
                of insurance.
    (c) Effect of Agreement With Respect to Private Remedies.--No 
person other than the United States--
            (1) shall have any cause of action or defense under the 
        Agreement or by virtue of congressional approval thereof; or
            (2) may challenge, in any action brought under any 
        provision of law, any action or inaction by any department, 
        agency, or other instrumentality of the United States, any 
        State, or any political subdivision of a State, on the ground 
        that such action or inaction is inconsistent with the 
        Agreement.

SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE AND 
              INITIAL REGULATIONS.

    (a) Implementing Actions.--
            (1) Proclamation authority.--After the date of the 
        enactment of this Act--
                    (A) the President may proclaim such actions, and
                    (B) other appropriate officers of the United States 
                Government may issue such regulations,
        as may be necessary to ensure that any provision of this Act, 
        or amendment made by this Act, that takes effect on the date on 
        which the Agreement enters into force is appropriately 
        implemented on such date, but no such proclamation or 
        regulation may have an effective date earlier than the date on 
        which the Agreement enters into force.
            (2) Effective date of certain proclaimed actions.--Any 
        action proclaimed by the President under the authority of this 
        Act that is not subject to the consultation and layover 
        provisions under section 104 may not take effect before the 
        15th day after the date on which the text of the proclamation 
        is published in the Federal Register.
            (3) Waiver of 15-day restriction.--The 15-day restriction 
        in paragraph (2) on the taking effect of proclaimed actions is 
        waived to the extent that the application of such restriction 
        would prevent the taking effect on the date on which the 
        Agreement enters into force of any action proclaimed under this 
        section.
    (b) Initial Regulations.--Initial regulations necessary or 
appropriate to carry out the actions required by or authorized under 
this Act or proposed in the statement of administrative action 
submitted under section 101(a)(2) to implement the Agreement shall, to 
the maximum extent feasible, be issued within 1 year after the date on 
which the Agreement enters into force. In the case of any implementing 
action that takes effect on a date after the date on which the 
Agreement enters into force, initial regulations to carry out that 
action shall, to the maximum extent feasible, be issued within 1 year 
after such effective date.

SEC. 104. CONSULTATION AND LAYOVER PROVISIONS FOR, AND EFFECTIVE DATE 
              OF, PROCLAIMED ACTIONS.

    If a provision of this Act provides that the implementation of an 
action by the President by proclamation is subject to the consultation 
and layover requirements of this section, such action may be proclaimed 
only if--
            (1) the President has obtained advice regarding the 
        proposed action from--
                    (A) the appropriate advisory committees established 
                under section 135 of the Trade Act of 1974 (19 U.S.C. 
                2155); and
                    (B) the United States International Trade 
                Commission;
            (2) the President has submitted to the Committee on Finance 
        of the Senate and the Committee on Ways and Means of the House 
        of Representatives a report that sets forth--
                    (A) the action proposed to be proclaimed and the 
                reasons therefor; and
                    (B) the advice obtained under paragraph (1);
            (3) a period of 60 calendar days, beginning on the first 
        day on which the requirements set forth in paragraphs (1) and 
        (2) have been met has expired; and
            (4) the President has consulted with the Committees 
        referred to in paragraph (2) regarding the proposed action 
        during the period referred to in paragraph (3).

SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS.

    (a) Establishment or Designation of Office.--The President is 
authorized to establish or designate within the Department of Commerce 
an office that shall be responsible for providing administrative 
assistance to panels established under chapter 19 of the Agreement. The 
office may not be considered to be an agency for purposes of section 
552 of title 5, United States Code.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated for each fiscal year after fiscal year 2005 to the 
Department of Commerce such sums as may be necessary for the 
establishment and operations of the office established or designated 
under subsection (a) and for the payment of the United States share of 
the expenses of panels established under chapter 19 of the Agreement.

SEC. 106. EFFECTIVE DATES; EFFECT OF TERMINATION.

    (a) Effective Dates.--Except as provided in subsection (b), the 
provisions of this Act and the amendments made by this Act take effect 
on the date on which the Agreement enters into force.
    (b) Exceptions.--Sections 1 through 3 and this title take effect on 
the date of the enactment of this Act.
    (c) Termination of the Agreement.--On the date on which the 
Agreement terminates, the provisions of this Act (other than this 
subsection) and the amendments made by this Act shall cease to be 
effective.

                      TITLE II--CUSTOMS PROVISIONS

SEC. 201. TARIFF MODIFICATIONS.

    (a) Tariff Modifications Provided for in the Agreement.--
            (1) Proclamation authority.--The President may proclaim--
                    (A) such modifications or continuation of any duty,
                    (B) such continuation of duty-free or excise 
                treatment, or
                    (C) such additional duties,
        as the President determines to be necessary or appropriate to 
        carry out or apply articles 2.3, 2.5, 2.6, 3.2.8, and 3.2.9, 
        and Annex 2-B of the Agreement.
            (2) Effect on bahraini gsp status.--Notwithstanding section 
        502(a)(1) of the Trade Act of 1974 (19 U.S.C. 2462(a)(1)), the 
        President shall, on the date on which the Agreement enters into 
        force, terminate the designation of Bahrain as a beneficiary 
        developing country for purposes of title V of the Trade Act of 
        1974 (19 U.S.C. 2461 et seq.).
    (b) Other Tariff Modifications.--Subject to the consultation and 
layover provisions of section 104, the President may proclaim--
            (1) such modifications or continuation of any duty,
            (2) such modifications as the United States may agree to 
        with Bahrain regarding the staging of any duty treatment set 
        forth in Annex 2-B of the Agreement,
            (3) such continuation of duty-free or excise treatment, or
            (4) such additional duties,
as the President determines to be necessary or appropriate to maintain 
the general level of reciprocal and mutually advantageous concessions 
with respect to Bahrain provided for by the Agreement.
    (c) Conversion to Ad Valorem Rates.--For purposes of subsections 
(a) and (b), with respect to any good for which the base rate in the 
Tariff Schedule of the United States to Annex 2-B of the Agreement is a 
specific or compound rate of duty, the President may substitute for the 
base rate an ad valorem rate that the President determines to be 
equivalent to the base rate.

SEC. 202. RULES OF ORIGIN.

    (a) Application and Interpretation.--In this section:
            (1) Tariff classification.--The basis for any tariff 
        classification is the HTS.
            (2) Reference to hts.--Whenever in this section there is a 
        reference to a heading or subheading, such reference shall be a 
        reference to a heading or subheading of the HTS.
    (b) Originating Goods.--
            (1) In general.--For purposes of this Act and for purposes 
        of implementing the preferential tariff treatment provided for 
        under the Agreement, a good is an originating good if--
                    (A) the good is imported directly--
                            (i) from the territory of Bahrain into the 
                        territory of the United States; or
                            (ii) from the territory of the United 
                        States into the territory of Bahrain; and
                    (B)(i) the good is a good wholly the growth, 
                product, or manufacture of Bahrain or the United 
                States, or both;
                    (ii) the good (other than a good to which clause 
                (iii) applies) is a new or different article of 
                commerce that has been grown, produced, or manufactured 
                in Bahrain or the United States, or both, and meets the 
                requirements of paragraph (2); or
                    (iii)(I) the good is a good covered by Annex 3-A or 
                4-A of the Agreement;
                    (II)(aa) each of the nonoriginating materials used 
                in the production of the good undergoes an applicable 
                change in tariff classification specified in such Annex 
                as a result of production occurring entirely in the 
                territory of Bahrain or the United States, or both; or
                    (bb) the good otherwise satisfies the requirements 
                specified in such Annex; and
                    (III) the good satisfies all other applicable 
                requirements of this section.
            (2) Requirements.--A good described in paragraph (1)(B)(ii) 
        is an originating good only if the sum of--
                    (A) the value of each material produced in the 
                territory of Bahrain or the United States, or both, and
                    (B) the direct costs of processing operations 
                performed in the territory of Bahrain or the United 
                States, or both,
        is not less than 35 percent of the appraised value of the good 
        at the time the good is entered into the territory of the 
        United States.
    (c) Cumulation.--
            (1) Originating good or material incorporated into goods of 
        other country.--An originating good, or a material produced in 
        the territory of Bahrain or the United States, or both, that is 
        incorporated into a good in the territory of the other country 
        shall be considered to originate in the territory of the other 
        country.
            (2) Multiple producers.--A good that is grown, produced, or 
        manufactured in the territory of Bahrain or the United States, 
        or both, by 1 or more producers, is an originating good if the 
        good satisfies the requirements of subsection (b) and all other 
        applicable requirements of this section.
    (d) Value of Materials.--
            (1) In general.--Except as provided in paragraph (2), the 
        value of a material produced in the territory of Bahrain or the 
        United States, or both, includes the following:
                    (A) The price actually paid or payable for the 
                material by the producer of the good.
                    (B) The freight, insurance, packing, and all other 
                costs incurred in transporting the material to the 
                producer's plant, if such costs are not included in the 
                price referred to in subparagraph (A).
                    (C) The cost of waste or spoilage resulting from 
                the use of the material in the growth, production, or 
                manufacture of the good, less the value of recoverable 
                scrap.
                    (D) Taxes or customs duties imposed on the material 
                by Bahrain or the United States, or both, if the taxes 
                or customs duties are not remitted upon exportation 
                from the territory of Bahrain or the United States, as 
                the case may be.
            (2) Exception.--If the relationship between the producer of 
        a good and the seller of a material influenced the price 
        actually paid or payable for the material, or if there is no 
        price actually paid or payable by the producer for the 
        material, the value of the material produced in the territory 
        of Bahrain or the United States, or both, includes the 
        following:
                    (A) All expenses incurred in the growth, 
                production, or manufacture of the material, including 
                general expenses.
                    (B) A reasonable amount for profit.
                    (C) Freight, insurance, packing, and all other 
                costs incurred in transporting the material to the 
                producer's plant.
    (e) Packaging and Packing Materials and Containers for Retail Sale 
and for Shipment.--Packaging and packing materials and containers for 
retail sale and shipment shall be disregarded in determining whether a 
good qualifies as an originating good, except to the extent that the 
value of such packaging and packing materials and containers has been 
included in meeting the requirements set forth in subsection (b)(2).
    (f) Indirect Materials.--Indirect materials shall be disregarded in 
determining whether a good qualifies as an originating good, except 
that the cost of such indirect materials may be included in meeting the 
requirements set forth in subsection (b)(2).
    (g) Transit and Transshipment.--A good shall not be considered to 
meet the requirement of subsection (b)(1)(A) if, after exportation from 
the territory of Bahrain or the United States, the good undergoes 
production, manufacturing, or any other operation outside the territory 
of Bahrain or the United States, other than unloading, reloading, or 
any other operation necessary to preserve the good in good condition or 
to transport the good to the territory of Bahrain or the United States.
    (h) Textile and Apparel Goods.--
            (1) De minimis amounts of nonoriginating materials.--
                    (A) In general.--Except as provided in subparagraph 
                (B), a textile or apparel good that is not an 
                originating good because certain fibers or yarns used 
                in the production of the component of the good that 
                determines the tariff classification of the good do not 
                undergo an applicable change in tariff classification 
                set out in Annex 3-A of the Agreement shall be 
                considered to be an originating good if the total 
                weight of all such fibers or yarns in that component is 
                not more than 7 percent of the total weight of that 
                component.
                    (B) Certain textile or apparel goods.--A textile or 
                apparel good containing elastomeric yarns in the 
                component of the good that determines the tariff 
                classification of the good shall be considered to be an 
                originating good only if such yarns are wholly formed 
                in the territory of Bahrain or the United States.
                    (C) Yarn, fabric, or group of fibers.--For purposes 
                of this paragraph, in the case of a textile or apparel 
                good that is a yarn, fabric, or group of fibers, the 
                term ``component of the good that determines the tariff 
                classification of the good'' means all of the fibers in 
                the yarn, fabric, or group of fibers.
            (2) Goods put up in sets for retail sale.--Notwithstanding 
        the rules set forth in Annex 3-A of the Agreement, textile or 
        apparel goods classifiable as goods put up in sets for retail 
        sale as provided for in General Rule of Interpretation 3 of the 
        HTS shall not be considered to be originating goods unless each 
        of the goods in the set is an originating good or the total 
        value of the nonoriginating goods in the set does not exceed 10 
        percent of the value of the set determined for purposes of 
        assessing customs duties.
    (i) Definitions.--In this section:
            (1) Direct costs of processing operations.--
                    (A) In general.--The term ``direct costs of 
                processing operations'', with respect to a good, 
                includes, to the extent they are includable in the 
                appraised value of the good when imported into Bahrain 
                or the United States, as the case may be, the 
                following:
                            (i) All actual labor costs involved in the 
                        growth, production, or manufacture of the good, 
                        including fringe benefits, on-the-job training, 
                        and the cost of engineering, supervisory, 
                        quality control, and similar personnel.
                            (ii) Tools, dies, molds, and other indirect 
                        materials, and depreciation on machinery and 
                        equipment that are allocable to the good.
                            (iii) Research, development, design, 
                        engineering, and blueprint costs, to the extent 
                        that they are allocable to the good.
                            (iv) Costs of inspecting and testing the 
                        good.
                            (v) Costs of packaging the good for export 
                        to the territory of the other country.
                    (B) Exceptions.--The term ``direct costs of 
                processing operations'' does not include costs that are 
                not directly attributable to a good or are not costs of 
                growth, production, or manufacture of the good, such 
                as--
                            (i) profit; and
                            (ii) general expenses of doing business 
                        that are either not allocable to the good or 
                        are not related to the growth, production, or 
                        manufacture of the good, such as administrative 
                        salaries, casualty and liability insurance, 
                        advertising, and sales staff salaries, 
                        commissions, or expenses.
            (2) Good.--The term ``good'' means any merchandise, 
        product, article, or material.
            (3) Good wholly the growth, product, or manufacture of 
        bahrain or the united states, or both.--The term ``good wholly 
        the growth, product, or manufacture of Bahrain or the United 
        States, or both'' means--
                    (A) a mineral good extracted in the territory of 
                Bahrain or the United States, or both;
                    (B) a vegetable good, as such a good is provided 
                for in the HTS, harvested in the territory of Bahrain 
                or the United States, or both;
                    (C) a live animal born and raised in the territory 
                of Bahrain or the United States, or both;
                    (D) a good obtained from live animals raised in the 
                territory of Bahrain or the United States, or both;
                    (E) a good obtained from hunting, trapping, or 
                fishing in the territory of Bahrain or the United 
                States, or both;
                    (F) a good (fish, shellfish, and other marine life) 
                taken from the sea by vessels registered or recorded 
                with Bahrain or the United States and flying the flag 
                of that country;
                    (G) a good produced from goods referred to in 
                subparagraph (F) on board factory ships registered or 
                recorded with Bahrain or the United States and flying 
                the flag of that country;
                    (H) a good taken by Bahrain or the United States or 
                a person of Bahrain or the United States from the 
                seabed or beneath the seabed outside territorial 
                waters, if Bahrain or the United States, as the case 
                may be, has rights to exploit such seabed;
                    (I) a good taken from outer space, if such good is 
                obtained by Bahrain or the United States or a person of 
                Bahrain or the United States and not processed in the 
                territory of a country other than Bahrain or the United 
                States;
                    (J) waste and scrap derived from--
                            (i) production or manufacture in the 
                        territory of Bahrain or the United States, or 
                        both; or
                            (ii) used goods collected in the territory 
                        of Bahrain or the United States, or both, if 
                        such goods are fit only for the recovery of raw 
                        materials;
                    (K) a recovered good derived in the territory of 
                Bahrain or the United States from used goods and 
                utilized in the territory of that country in the 
                production of remanufactured goods; and
                    (L) a good produced in the territory of Bahrain or 
                the United States, or both, exclusively--
                            (i) from goods referred to in subparagraphs 
                        (A) through (J), or
                            (ii) from the derivatives of goods referred 
                        to in clause (i),
                at any stage of production.
            (4) Indirect material.--The term ``indirect material'' 
        means a good used in the growth, production, manufacture, 
        testing, or inspection of a good but not physically 
        incorporated into the good, or a good used in the maintenance 
        of buildings or the operation of equipment associated with the 
        growth, production, or manufacture of a good, including--
                    (A) fuel and energy;
                    (B) tools, dies, and molds;
                    (C) spare parts and materials used in the 
                maintenance of equipment and buildings;
                    (D) lubricants, greases, compounding materials, and 
                other materials used in the growth, production, or 
                manufacture of a good or used to operate equipment and 
                buildings;
                    (E) gloves, glasses, footwear, clothing, safety 
                equipment, and supplies;
                    (F) equipment, devices, and supplies used for 
                testing or inspecting the good;
                    (G) catalysts and solvents; and
                    (H) any other goods that are not incorporated into 
                the good but the use of which in the growth, 
                production, or manufacture of the good can reasonably 
                be demonstrated to be a part of that growth, 
                production, or manufacture.
            (5) Material.--The term ``material'' means a good, 
        including a part or ingredient, that is used in the growth, 
        production, or manufacture of another good that is a new or 
        different article of commerce that has been grown, produced, or 
        manufactured in Bahrain or the United States, or both.
            (6) Material produced in the territory of bahrain or the 
        united states, or both.--The term ``material produced in the 
        territory of Bahrain or the United States, or both'' means a 
        good that is either wholly the growth, product, or manufacture 
        of Bahrain or the United States, or both, or a new or different 
        article of commerce that has been grown, produced, or 
        manufactured in the territory of Bahrain or the United States, 
        or both.
            (7) New or different article of commerce.--
                    (A) In general.--The term ``new or different 
                article of commerce'' means, except as provided in 
                subparagraph (B), a good that--
                            (i) has been substantially transformed from 
                        a good or material that is not wholly the 
                        growth, product, or manufacture of Bahrain or 
                        the United States, or both; and
                            (ii) has a new name, character, or use 
                        distinct from the good or material from which 
                        it was transformed.
                    (B) Exception.--A good shall not be considered a 
                new or different article of commerce by virtue of 
                having undergone simple combining or packaging 
                operations, or mere dilution with water or another 
                substance that does not materially alter the 
                characteristics of the good.
            (8) Recovered goods.--The term ``recovered goods'' means 
        materials in the form of individual parts that result from--
                    (A) the complete disassembly of used goods into 
                individual parts; and
                    (B) the cleaning, inspecting, testing, or other 
                processing of those parts that is necessary for 
                improvement to sound working condition.
            (9) Remanufactured good.--The term ``remanufactured good'' 
        means an industrial good that is assembled in the territory of 
        Bahrain or the United States and that--
                    (A) is entirely or partially comprised of recovered 
                goods;
                    (B) has a similar life expectancy to, and meets 
                similar performance standards as, a like good that is 
                new; and
                    (C) enjoys a factory warranty similar to that of a 
                like good that is new.
            (10) Simple combining or packaging operations.--The term 
        ``simple combining or packaging operations'' means operations 
        such as adding batteries to devices, fitting together a small 
        number of components by bolting, gluing, or soldering, and 
        repacking or packaging components together.
            (11) Substantially transformed.--The term ``substantially 
        transformed'' means, with respect to a good or material, 
        changed as the result of a manufacturing or processing 
        operation so that--
                    (A)(i) the good or material is converted from a 
                good that has multiple uses into a good or material 
                that has limited uses;
                    (ii) the physical properties of the good or 
                material are changed to a significant extent; or
                    (iii) the operation undergone by the good or 
                material is complex by reason of the number of 
                different processes and materials involved and the time 
                and level of skill required to perform those processes; 
                and
                    (B) the good or material loses its separate 
                identity in the manufacturing or processing operation.
    (j) Presidential Proclamation Authority.--
            (1) In general.--The President is authorized to proclaim, 
        as part of the HTS--
                    (A) the provisions set forth in Annex 3-A and Annex 
                4-A of the Agreement; and
                    (B) any additional subordinate category that is 
                necessary to carry out this title, consistent with the 
                Agreement.
            (2) Modifications.--
                    (A) In general.--Subject to the consultation and 
                layover provisions of section 104, the President may 
                proclaim modifications to the provisions proclaimed 
                under the authority of paragraph (1)(A), other than 
                provisions of chapters 50 through 63 of the HTS (as 
                included in Annex 3-A of the Agreement).
                    (B) Additional proclamations.--Notwithstanding 
                subparagraph (A), and subject to the consultation and 
                layover provisions of section 104, the President may 
                proclaim--
                            (i) modifications to the provisions 
                        proclaimed under the authority of paragraph 
                        (1)(A) as are necessary to implement an 
                        agreement with Bahrain pursuant to article 
                        3.2.5 of the Agreement; and
                            (ii) before the end of the 1-year period 
                        beginning on the date of the enactment of this 
                        Act, modifications to correct any 
                        typographical, clerical, or other 
                        nonsubstantive technical error regarding the 
                        provisions of chapters 50 through 63 of the HTS 
                        (as included in Annex 3-A of the Agreement).

SEC. 203. CUSTOMS USER FEES.

    Section 13031(b) of the Consolidated Omnibus Budget Reconciliation 
Act of 1985 (19 U.S.C. 58c(b)) is amended--
            (1) in each of paragraphs (13) and (15), by moving the text 
        2 ems to the left; and
            (2) by adding after paragraph (15) the following:
    ``(16) No fee may be charged under subsection (a) (9) or (10) with 
respect to goods that qualify as originating goods under section 202 of 
the United States-Bahrain Free Trade Agreement Implementation Act. Any 
service for which an exemption from such fee is provided by reason of 
this paragraph may not be funded with money contained in the Customs 
User Fee Account.''.

SEC. 204. ENFORCEMENT RELATING TO TRADE IN TEXTILE AND APPAREL GOODS.

    (a) Action During Verification.--
            (1) In general.--If the Secretary of the Treasury requests 
        the Government of Bahrain to conduct a verification pursuant to 
        article 3.3 of the Agreement for purposes of making a 
        determination under paragraph (2), the President may direct the 
        Secretary to take appropriate action described in subsection 
        (b) while the verification is being conducted.
            (2) Determination.--A determination under this paragraph is 
        a determination--
                    (A) that an exporter or producer in Bahrain is 
                complying with applicable customs laws, regulations, 
                procedures, requirements, or practices affecting trade 
                in textile or apparel goods; or
                    (B) that a claim that a textile or apparel good 
                exported or produced by such exporter or producer--
                            (i) qualifies as an originating good under 
                        section 202; or
                            (ii) is a good of Bahrain, is accurate.
    (b) Appropriate Action Described.--Appropriate action under 
subsection (a)(1) includes--
            (1) suspension of liquidation of the entry of any textile 
        or apparel good exported or produced by the person that is the 
        subject of a verification referred to in subsection (a)(1) 
        regarding compliance described in subsection (a)(2)(A), in a 
        case in which the request for verification was based on a 
        reasonable suspicion of unlawful activity related to such good; 
        and
            (2) suspension of liquidation of the entry of a textile or 
        apparel good for which a claim has been made that is the 
        subject of a verification referred to in subsection (a)(1) 
        regarding a claim described in subsection (a)(2)(B).
    (c) Action When Information Is Insufficient.--If the Secretary of 
the Treasury determines that the information obtained within 12 months 
after making a request for a verification under subsection (a)(1) is 
insufficient to make a determination under subsection (a)(2), the 
President may direct the Secretary to take appropriate action described 
in subsection (d) until such time as the Secretary receives information 
sufficient to make a determination under subsection (a)(2) or until 
such earlier date as the President may direct.
    (d) Appropriate Action Described.--Appropriate action referred to 
in subsection (c) includes--
            (1) publication of the name and address of the person that 
        is the subject of the verification;
            (2) denial of preferential tariff treatment under the 
        Agreement to--
                    (A) any textile or apparel good exported or 
                produced by the person that is the subject of a 
                verification referred to in subsection (a)(1) regarding 
                compliance described in subsection (a)(2)(A); or
                    (B) a textile or apparel good for which a claim has 
                been made that is the subject of a verification 
                referred to in subsection (a)(1) regarding a claim 
                described in subsection (a)(2)(B); and
            (3) denial of entry into the United States of--
                    (A) any textile or apparel good exported or 
                produced by the person that is the subject of a 
                verification referred to in subsection (a)(1) regarding 
                compliance described in subsection (a)(2)(A); or
                    (B) a textile or apparel good for which a claim has 
                been made that is the subject of a verification 
                referred to in subsection (a)(1) regarding a claim 
                described in subsection (a)(2)(B).

SEC. 205. REGULATIONS.

            The Secretary of the Treasury shall prescribe such 
        regulations as may be necessary to carry out--
            (1) subsections (a) through (i) of section 202;
            (2) the amendment made by section 203(2); and
            (3) proclamations issued under section 202(j).

                     TITLE III--RELIEF FROM IMPORTS

SEC. 301. DEFINITIONS.

    In this title:
            (1) Bahraini article.--The term ``Bahraini article'' means 
        an article that--
                    (A) qualifies as an originating good under section 
                202(b); or
                    (B) receives preferential tariff treatment under 
                paragraphs 8 through 11 of article 3.2 of the 
                Agreement.
            (2) Bahraini textile or apparel article.--The term 
        ``Bahraini textile or apparel article'' means an article that--
                    (A) is listed in the Annex to the Agreement on 
                Textiles and Clothing referred to in section 101(d)(4) 
                of the Uruguay Round Agreements Act (19 U.S.C. 
                3511(d)(4)); and
                    (B) is a Bahraini article.
            (3) Commission.--The term ``Commission'' means the United 
        States International Trade Commission.

     Subtitle A--Relief From Imports Benefiting From the Agreement

SEC. 311. COMMENCING OF ACTION FOR RELIEF.

    (a) Filing of Petition.--A petition requesting action under this 
subtitle for the purpose of adjusting to the obligations of the United 
States under the Agreement may be filed with the Commission by an 
entity, including a trade association, firm, certified or recognized 
union, or group of workers, that is representative of an industry. The 
Commission shall transmit a copy of any petition filed under this 
subsection to the United States Trade Representative.
    (b) Investigation and Determination.--Upon the filing of a petition 
under subsection (a), the Commission, unless subsection (d) applies, 
shall promptly initiate an investigation to determine whether, as a 
result of the reduction or elimination of a duty provided for under the 
Agreement, a Bahraini article is being imported into the United States 
in such increased quantities, in absolute terms or relative to domestic 
production, and under such conditions that imports of the Bahraini 
article constitute a substantial cause of serious injury or threat 
thereof to the domestic industry producing an article that is like, or 
directly competitive with, the imported article.
    (c) Applicable Provisions.--The following provisions of section 202 
of the Trade Act of 1974 (19 U.S.C. 2252) apply with respect to any 
investigation initiated under subsection (b):
            (1) Paragraphs (1)(B) and (3) of subsection (b).
            (2) Subsection (c).
            (3) Subsection (i).
    (d) Articles Exempt From Investigation.--No investigation may be 
initiated under this section with respect to any Bahraini article if, 
after the date on which the Agreement enters into force with respect to 
the United States, import relief has been provided with respect to that 
Bahraini article under this subtitle.

SEC. 312. COMMISSION ACTION ON PETITION.

    (a) Determination.--Not later than 120 days after the date on which 
an investigation is initiated under section 311(b) with respect to a 
petition, the Commission shall make the determination required under 
that section.
    (b) Applicable Provisions.--For purposes of this subtitle, the 
provisions of paragraphs (1), (2), and (3) of section 330(d) of the 
Tariff Act of 1930 (19 U.S.C. 1330(d) (1), (2), and (3)) shall be 
applied with respect to determinations and findings made under this 
section as if such determinations and findings were made under section 
202 of the Trade Act of 1974 (19 U.S.C. 2252).
    (c) Additional Finding and Recommendation if Determination 
Affirmative.--
            (1) In general.--If the determination made by the 
        Commission under subsection (a) with respect to imports of an 
        article is affirmative, or if the President may consider a 
        determination of the Commission to be an affirmative 
        determination as provided for under paragraph (1) of section 
        330(d) of the Tariff Act of 1930 (19 U.S.C. 1330(d)(1)), the 
        Commission shall find, and recommend to the President in the 
        report required under subsection (d), the amount of import 
        relief that is necessary to remedy or prevent the injury found 
        by the Commission in the determination and to facilitate the 
        efforts of the domestic industry to make a positive adjustment 
        to import competition.
            (2) Limitation on relief.--The import relief recommended by 
        the Commission under this subsection shall be limited to that 
        described in section 313(c).
            (3) Voting; separate views.--Only those members of the 
        Commission who voted in the affirmative under subsection (a) 
        are eligible to vote on the proposed action to remedy or 
        prevent the injury found by the Commission. Members of the 
        Commission who did not vote in the affirmative may submit, in 
        the report required under subsection (d), separate views 
        regarding what action, if any, should be taken to remedy or 
        prevent the injury.
    (d) Report to President.--Not later than the date that is 30 days 
after the date on which a determination is made under subsection (a) 
with respect to an investigation, the Commission shall submit to the 
President a report that includes--
            (1) the determination made under subsection (a) and an 
        explanation of the basis for the determination;
            (2) if the determination under subsection (a) is 
        affirmative, any findings and recommendations for import relief 
        made under subsection (c) and an explanation of the basis for 
        each recommendation; and
            (3) any dissenting or separate views by members of the 
        Commission regarding the determination and recommendation 
        referred to in paragraphs (1) and (2).
    (e) Public Notice.--Upon submitting a report to the President under 
subsection (d), the Commission shall promptly make public such report 
(with the exception of information which the Commission determines to 
be confidential) and shall cause a summary thereof to be published in 
the Federal Register.

SEC. 313. PROVISION OF RELIEF.

    (a) In General.--Not later than the date that is 30 days after the 
date on which the President receives the report of the Commission in 
which the Commission's determination under section 312(a) is 
affirmative, or which contains a determination under section 312(a) 
that the President considers to be affirmative under paragraph (1) of 
section 330(d) of the Tariff Act of 1930 (19 U.S.C. 1330(d)(1)), the 
President, subject to subsection (b), shall provide relief from imports 
of the article that is the subject of such determination to the extent 
that the President determines necessary to remedy or prevent the injury 
found by the Commission and to facilitate the efforts of the domestic 
industry to make a positive adjustment to import competition.
    (b) Exception.--The President is not required to provide import 
relief under this section if the President determines that the 
provision of the import relief will not provide greater economic and 
social benefits than costs.
    (c) Nature of Relief.--
            (1) In general.--The import relief that the President is 
        authorized to provide under this section with respect to 
        imports of an article is as follows:
                    (A) The suspension of any further reduction 
                provided for under Annex 2-B of the Agreement in the 
                duty imposed on such article.
                    (B) An increase in the rate of duty imposed on such 
                article to a level that does not exceed the lesser of--
                            (i) the column 1 general rate of duty 
                        imposed under the HTS on like articles at the 
                        time the import relief is provided; or
                            (ii) the column 1 general rate of duty 
                        imposed under the HTS on like articles on the 
                        day before the date on which the Agreement 
                        enters into force.
            (2) Progressive liberalization.--If the period for which 
        import relief is provided under this section is greater than 1 
        year, the President shall provide for the progressive 
        liberalization of such relief at regular intervals during the 
        period in which the relief is in effect.
    (d) Period of Relief.--
            (1) In general.--Subject to paragraph (2), any import 
        relief that the President provides under this section may not, 
        in the aggregate, be in effect for more than 3 years.
            (2) Extension.--
                    (A) In general.--If the initial period for any 
                import relief provided under this section is less than 
                3 years, the President, after receiving a determination 
                from the Commission under subparagraph (B) that is 
                affirmative, or which the President considers to be 
                affirmative under paragraph (1) of section 330(d) of 
                the Tariff Act of 1930 (19 U.S.C. 1330(d)(1)), may 
                extend the effective period of any import relief 
                provided under this section, subject to the limitation 
                under paragraph (1), if the President determines that--
                            (i) the import relief continues to be 
                        necessary to remedy or prevent serious injury 
                        and to facilitate adjustment by the domestic 
                        industry to import competition; and
                            (ii) there is evidence that the industry is 
                        making a positive adjustment to import 
                        competition.
                    (B) Action by commission.--
                            (i) Investigation.--Upon a petition on 
                        behalf of the industry concerned that is filed 
                        with the Commission not earlier than the date 
                        which is 9 months, and not later than the date 
                        which is 6 months, before the date any action 
                        taken under subsection (a) is to terminate, the 
                        Commission shall conduct an investigation to 
                        determine whether action under this section 
                        continues to be necessary to remedy or prevent 
                        serious injury and to facilitate adjustment by 
                        the domestic industry to import competition and 
                        whether there is evidence that the industry is 
                        making a positive adjustment to import 
                        competition.
                            (ii) Notice and hearing.--The Commission 
                        shall publish notice of the commencement of any 
                        proceeding under this subparagraph in the 
                        Federal Register and shall, within a reasonable 
                        time thereafter, hold a public hearing at which 
                        the Commission shall afford interested parties 
                        and consumers an opportunity to be present, to 
                        present evidence, and to respond to the 
                        presentations of other parties and consumers, 
                        and otherwise to be heard.
                            (iii) Report.--The Commission shall 
                        transmit to the President a report on its 
                        investigation and determination under this 
                        subparagraph not later than 60 days before the 
                        action under subsection (a) is to terminate, 
                        unless the President specifies a different 
                        date.
    (e) Rate After Termination of Import Relief.--When import relief 
under this section is terminated with respect to an article, the rate 
of duty on that article shall be the rate that would have been in 
effect, but for the provision of such relief, on the date on which the 
relief terminates.
    (f) Articles Exempt From Relief.--No import relief may be provided 
under this section on any article that has been subject to import 
relief under this subtitle after the date on which the Agreement enters 
into force.

SEC. 314. TERMINATION OF RELIEF AUTHORITY.

    (a) General Rule.--Subject to subsection (b), no import relief may 
be provided under this subtitle after the date that is 10 years after 
the date on which the Agreement enters into force.
    (b) Presidential Determination.--Import relief may be provided 
under this subtitle in the case of a Bahraini article after the date on 
which such relief would, but for this subsection, terminate under 
subsection (a), if the President determines that Bahrain has consented 
to such relief.

SEC. 315. COMPENSATION AUTHORITY.

    For purposes of section 123 of the Trade Act of 1974 (19 U.S.C. 
2133), any import relief provided by the President under section 313 
shall be treated as action taken under chapter 1 of title II of such 
Act (19 U.S.C. 2251 et seq.).

SEC. 316. CONFIDENTIAL BUSINESS INFORMATION.

    Section 202(a)(8) of the Trade Act of 1974 (19 U.S.C. 2252(a)(8)) 
is amended in the first sentence--
            (1) by striking ``and''; and
            (2) by inserting before the period at the end ``, and title 
        III of the United States-Bahrain Free Trade Agreement 
        Implementation Act''.

           Subtitle B--Textile and Apparel Safeguard Measures

SEC. 321. COMMENCEMENT OF ACTION FOR RELIEF.

    (a) In General.--A request under this subtitle for the purpose of 
adjusting to the obligations of the United States under the Agreement 
may be filed with the President by an interested party. Upon the filing 
of a request, the President shall review the request to determine, from 
information presented in the request, whether to commence consideration 
of the request.
    (b) Publication of Request.--If the President determines that the 
request under subsection (a) provides the information necessary for the 
request to be considered, the President shall cause to be published in 
the Federal Register a notice of commencement of consideration of the 
request, and notice seeking public comments regarding the request. The 
notice shall include a summary of the request and the dates by which 
comments and rebuttals must be received.

SEC. 322. DETERMINATION AND PROVISION OF RELIEF.

    (a) Determination.--
            (1) In general.--If a positive determination is made under 
        section 321(b), the President shall determine whether, as a 
        result of the reduction or elimination of a duty under the 
        Agreement, a Bahraini textile or apparel article is being 
        imported into the United States in such increased quantities, 
        in absolute terms or relative to the domestic market for that 
        article, and under such conditions as to cause serious damage, 
        or actual threat thereof, to a domestic industry producing an 
        article that is like, or directly competitive with, the 
        imported article.
            (2) Serious damage.--In making a determination under 
        paragraph (1), the President--
                    (A) shall examine the effect of increased imports 
                on the domestic industry, as reflected in changes in 
                such relevant economic factors as output, productivity, 
                utilization of capacity, inventories, market share, 
                exports, wages, employment, domestic prices, profits, 
                and investment, none of which is necessarily decisive; 
                and
                    (B) shall not consider changes in technology or 
                consumer preference as factors supporting a 
                determination of serious damage or actual threat 
                thereof.
    (b) Provision of Relief.--
            (1) In general.--If a determination under subsection (a) is 
        affirmative, the President may provide relief from imports of 
        the article that is the subject of such determination, as 
        described in paragraph (2), to the extent that the President 
        determines necessary to remedy or prevent the serious damage 
        and to facilitate adjustment by the domestic industry to import 
        competition.
            (2) Nature of relief.--The relief that the President is 
        authorized to provide under this subsection with respect to 
        imports of an article is an increase in the rate of duty 
        imposed on the article to a level that does not exceed the 
        lesser of--
                    (A) the column 1 general rate of duty imposed under 
                the HTS on like articles at the time the import relief 
                is provided; or
                    (B) the column 1 general rate of duty imposed under 
                the HTS on like articles on the day before the date on 
                which the Agreement enters into force.

SEC. 323. PERIOD OF RELIEF.

    (a) In General.--Subject to subsection (b), any import relief that 
the President provides under subsection (b) of section 322 may not, in 
the aggregate, be in effect for more than 3 years.
    (b) Extension.--If the initial period for any import relief 
provided under section 322 is less than 3 years, the President may 
extend the effective period of any import relief provided under that 
section, subject to the limitation set forth in subsection (a), if the 
President determines that--
            (1) the import relief continues to be necessary to remedy 
        or prevent serious damage and to facilitate adjustment by the 
        domestic industry to import competition; and
            (2) there is evidence that the industry is making a 
        positive adjustment to import competition.

SEC. 324. ARTICLES EXEMPT FROM RELIEF.

    The President may not provide import relief under this subtitle 
with respect to any article if--
            (1) the article has been subject to import relief under 
        this subtitle after the date on which the Agreement enters into 
        force; or
            (2) the article is subject to import relief under chapter 1 
        of title II of the Trade Act of 1974 (19 U.S.C. 2251 et seq.).

SEC. 325. RATE AFTER TERMINATION OF IMPORT RELIEF.

    When import relief under this subtitle is terminated with respect 
to an article, the rate of duty on that article shall be the rate that 
would have been in effect, but for the provision of such relief, on the 
date on which the relief terminates.

SEC. 326. TERMINATION OF RELIEF AUTHORITY.

    No import relief may be provided under this subtitle with respect 
to any article after the date that is 10 years after the date on which 
duties on the article are eliminated pursuant to the Agreement.

SEC. 327. COMPENSATION AUTHORITY.

    For purposes of section 123 of the Trade Act of 1974 (19 U.S.C. 
2133), any import relief provided by the President under this subtitle 
shall be treated as action taken under chapter 1 of title II of such 
Act.

SEC. 328. CONFIDENTIAL BUSINESS INFORMATION.

    The President may not release information that is submitted in a 
proceeding under this subtitle and that the President considers to be 
confidential business information unless the party submitting the 
confidential business information had notice, at the time of 
submission, that such information would be released, or such party 
subsequently consents to the release of the information. To the extent 
a party submits confidential business information to the President in a 
proceeding under this subtitle, the party shall also submit a 
nonconfidential version of the information, in which the confidential 
business information is summarized or, if necessary, deleted.

                         TITLE IV--PROCUREMENT

SEC. 401. ELIGIBLE PRODUCTS.

    Section 308(4)(A) of the Trade Agreements Act of 1979 (19 U.S.C. 
2518(4)(A)) is amended--
            (1) by striking ``or'' at the end of clause (iii);
            (2) by striking the period at the end of clause (iv) and 
        inserting ``; or''; and
            (3) by adding at the end the following new clause:
                            ``(v) a party to a free trade agreement 
                        that entered into force with respect to the 
                        United States after December 31, 2005, and 
                        before July 2, 2006, a product or service of 
                        that country or instrumentality which is 
                        covered under the free trade agreement for 
                        procurement by the United States.''.
                                                 Union Calendar No. 171

109th CONGRESS

  1st Session

                               H. R. 4340

                          [Report No. 109-318]

_______________________________________________________________________

                                 A BILL

      To implement the United States-Bahrain Free Trade Agreement.

_______________________________________________________________________

                            December 6, 2005

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed