II 111th CONGRESS 1st Session S. 1043 IN THE SENATE OF THE UNITED STATES May 14, 2009 Mr. Graham introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To require the United States Trade Representative to negotiate a remedy for the equitable border tax treatment on goods and services within the WTO by January 1, 2010, and for other purposes.

1.

Short title

This Act may be cited as the Border Tax Fairness Act.

2.

Definitions

In this Act: (1)

United States trade negotiating goals relating to equitable border tax treatment

The term United States trade negotiating goals relating to equitable border tax treatment means— (A)with respect to trade in goods, to obtain a revision of the World Trade Organization rules with respect to the treatment of border adjustments for internal taxes to redress the disadvantage to countries relying primarily on direct taxes rather than indirect taxes for revenue, as provided in section 2102(b)(15) of the Bipartisan Trade Promotion Authority Act of 2002 (19 U.S.C. 3802(b)(15)); and (B)with respect to trade in services, to— (i)eliminate the disadvantage in trade in services that exists for countries relying primarily on direct taxes that are not adjusted at the border rather than indirect taxes that are adjusted at the border; and (ii)ensure that rules regarding trade in services do not result in disparate treatment of border adjustments for internal taxes based on the direct or indirect nature of such taxes. (2)

WTO negotiations

The term WTO negotiations means any multilateral negotiations that may result in revisions to WTO agreements that meet the United States trade negotiating goals relating to equitable border tax treatment. (3)

WTO

The term WTO means the World Trade Organization established pursuant to the WTO Agreement. (4)

WTO Agreement

The term “WTO Agreement” means the Agreement Establishing The World Trade Organization entered into on April 15, 1994.

3.

Requirement for negotiations

(a)

In general

Not later than 30 days after the date of the enactment of this Act, the United States Trade Representative shall pursue WTO negotiations to meet the United States trade negotiating goals relating to equitable border tax treatment and shall submit a report on whether the United States trade negotiating goals relating to equitable border tax treatment have been met in revising the WTO rules. The report shall be submitted to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives not later than the earlier of— (1)60 days after completing WTO negotiations; or (2)January 1, 2010. (b)

Content of report; legislative recommendations

The report required by subsection (a) shall describe the negotiations regarding meeting United States trade negotiating goals relating to equitable border tax treatment and how the goals have been accomplished. If the goals with respect to trade in goods or trade in services have not met, the report shall include recommendations for legislation to address the equitable border tax treatment for goods or services, as the case may be. The legislative recommendation shall also include— (1)recommendations for imposing a tax on imports from any country that employs indirect taxes; and (2)recommendations for compensatory payments to eligible United States exporters to neutralize the discriminatory effect of border taxes paid by such exporters.