[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 432 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                 S. 432

    To extend certain trade preferences to certain least-developed 
    countries in Asia and the South Pacific, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 28, 2013

Mrs. Feinstein introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To extend certain trade preferences to certain least-developed 
    countries in Asia and the South Pacific, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Asia-South Pacific Trade Preferences 
Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) It is in the mutual interest of the United States and 
        least-developed countries to promote stable and sustainable 
        economic growth and development.
            (2) Trade and investment are powerful economic tools and 
        can be used to reduce poverty and raise the standard of living 
        in a country.
            (3) A country that is open to trade may increase its 
        economic growth.
            (4) Trade and investment often lead to employment 
        opportunities and often help alleviate poverty.
            (5) Least-developed countries have a particular challenge 
        in meeting the economic requirements of and competitiveness 
        necessary for globalization and international markets.
            (6) The United States has recognized the benefits that 
        international trade provides to least-developed countries by 
        enacting the Generalized System of Preferences under title V of 
        the Trade Act of 1974 (19 U.S.C. 2461 et seq.) and trade 
        benefits for developing countries in the Caribbean, Andean, and 
        sub-Saharan African regions of the world.
            (7) Enhanced trade with least-developed Muslim countries, 
        including Afghanistan and Bangladesh, is consistent with other 
        United States objectives of encouraging a strong private sector 
        and individual economic empowerment in those countries.
            (8) Offering least-developed countries enhanced trade 
        preferences will encourage both higher levels of trade and 
        direct investment in support of positive economic and political 
        developments throughout the world.
            (9) Encouraging the reciprocal reduction of trade and 
        investment barriers will enhance the benefits of trade and 
        investment as well as enhance commercial and political ties 
        between the United States and the countries designated for 
        benefits under this Act.
            (10) Economic opportunity and engagement in the global 
        trading system together with support for democratic 
        institutions and a respect for human rights are mutually 
        reinforcing objectives and key elements of a policy to confront 
        and defeat global terrorism.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Asia or south pacific country.--The term ``Asia or 
        South Pacific country'' means--
                    (A) Afghanistan;
                    (B) Bangladesh;
                    (C) Bhutan;
                    (D) Cambodia;
                    (E) Kiribati;
                    (F) Lao People's Democratic Republic;
                    (G) Maldives;
                    (H) Nepal;
                    (I) Samoa;
                    (J) Solomon Islands;
                    (K) Timor-Leste (East Timor);
                    (L) Tuvalu;
                    (M) Vanuatu; or
                    (N) a successor political entity of a country 
                specified in subparagraphs (A) through (M).
            (2) Beneficiary asia or south pacific country.--The term 
        ``beneficiary Asia or South Pacific country'' means an Asia or 
        South Pacific country that the President has designated as 
        eligible for preferential treatment under this Act.
            (3) Former beneficiary asia or south pacific country.--The 
        term ``former beneficiary Asia or South Pacific country'' means 
        a country that, after being designated as a beneficiary Asia or 
        South Pacific country under this Act, ceased to be designated 
        as such a country by reason of its entering into a free trade 
        agreement with the United States.

SEC. 4. AUTHORITY TO DESIGNATE.

    (a) In General.--The President is authorized to designate an Asia 
or South Pacific country as a beneficiary Asia or South Pacific country 
eligible for preferential treatment under this Act if the President 
determines--
            (1) that the country meets the requirements set forth in 
        paragraphs (1), (2), and (3) of section 104(a) of the African 
        Growth and Opportunity Act (19 U.S.C. 3703(a)); and
            (2) after taking into account the factors set forth in 
        paragraphs (1) through (7) of subsection (c) of section 502 of 
        the Trade Act of 1974 (19 U.S.C. 2462), that the country meets 
        the eligibility requirements of such section 502.
    (b) Withdrawal, Suspension, or Limitation of Preferential 
Treatment; Mandatory Graduation of Countries.--The provisions of 
subsections (d) and (e) of section 502 of the Trade Act of 1974 (19 
U.S.C. 2462) shall apply with respect to beneficiary Asia or South 
Pacific countries to the same extent and in the same manner as such 
provisions apply with respect to beneficiary developing countries under 
title V of that Act (19 U.S.C. 2461 et seq.).

SEC. 5. ELIGIBLE ARTICLES.

    (a) Certain Manufactured or Other Articles.--
            (1) Duty-free treatment.--An article described in paragraph 
        (2) may enter the customs territory of the United States free 
        of duty.
            (2) Articles described.--An article is described in this 
        paragraph if--
                    (A) the article is the growth, product, or 
                manufacture of a beneficiary Asia or South Pacific 
                country;
                    (B) the article is imported directly from that 
                country into the customs territory of the United 
                States;
                    (C) the article is described in subparagraphs (B) 
                through (G) of section 503(b)(1) of the Trade Act of 
                1974 (19 U.S.C. 2463(b)(1));
                    (D) the President determines, after receiving the 
                advice of the International Trade Commission in 
                accordance with section 503(e) of the Trade Act of 1974 
                (19 U.S.C. 2463(e)), that the article is not import-
                sensitive in the context of imports from beneficiary 
                Asia or South Pacific countries; and
                    (E) the article meets the requirements of paragraph 
                (3).
            (3) Rules of origin.--
                    (A) In general.--Subject to subparagraph (B), an 
                article imported from a beneficiary Asia or South 
                Pacific country meets the requirements of this 
                paragraph if not less than 35 percent of the appraised 
                value of the article at the time it is entered is 
                attributable to--
                            (i) the cost or value of the materials 
                        produced in one or more beneficiary Asia or 
                        South Pacific countries, one or more former 
                        beneficiary Asia or South Pacific countries, 
                        the customs territory of the United States, or 
                        any combination thereof; and
                            (ii) the direct costs of processing 
                        operations performed in one or more beneficiary 
                        Asia or South Pacific countries, one or more 
                        former beneficiary Asia or South Pacific 
                        countries, or any combination thereof.
                    (B) Limitation on united states cost or value of 
                materials.--For purposes of subparagraph (A), the cost 
                or value of materials produced in, and the direct costs 
                of processing operations performed in, the customs 
                territory of the United States and attributed to the 
                35-percent requirement under that subparagraph may not 
                exceed 15 percent of the appraised value of the article 
                at the time it is entered.
            (4) Exclusions.--An article shall not be treated as the 
        growth, product, or manufacture of a beneficiary Asia or South 
        Pacific country for purposes of paragraph (2)(A) 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.
    (b) Textile and Apparel Articles.--
            (1) Duty-free treatment.--A textile or apparel article may 
        enter the customs territory of the United States free of duty 
        if the article--
                    (A) is imported directly into the customs territory 
                of the United States from a beneficiary Asia or South 
                Pacific country; and
                    (B) is described in--
                            (i) paragraph (1), (2), (4), (5), or (7) of 
                        section 112(b) of the African Growth and 
                        Opportunity Act (19 U.S.C. 3721(b)), as applied 
                        and administered pursuant to paragraph (2); or
                            (ii) paragraph (3) or (4).
            (2) Application and administration of section 112 of the 
        african growth and opportunity act.--Section 112 of the African 
        Growth and Opportunity Act (19 U.S.C. 3721) shall be applied 
        and administered for purposes of this subsection--
                    (A) in subsection (a), by substituting ``a 
                beneficiary Asia or South Pacific country (as defined 
                in section 3 of the Asia-South Pacific Trade 
                Preferences Act)'' for ``a beneficiary sub-Saharan 
                African country described in section 506A(c) of the 
                Trade Act of 1974''; and
                    (B) in paragraphs (1), (2), (4), (5), and (7) of 
                subsection (b), by substituting ``beneficiary Asia or 
                South Pacific country'' and ``beneficiary Asia or South 
                Pacific countries'' for ``beneficiary sub-Saharan 
                African country'' and ``beneficiary sub-Saharan African 
                countries'', respectively, each place such terms appear 
                in the text and the paragraph headings.
            (3) Textile and apparel articles assembled from regional 
        and other fabric.--
                    (A) In general.--A textile or apparel article 
                described in this paragraph is a textile or apparel 
                article wholly assembled in one or more beneficiary 
                Asia or South Pacific countries or former beneficiary 
                Asia or South Pacific countries, or both, from--
                            (i) fabric wholly formed in one or more 
                        beneficiary Asia or South Pacific countries or 
                        former beneficiary Asia or South Pacific 
                        countries, or both, from yarn originating 
                        either in the customs territory of the United 
                        States or one or more beneficiary Asia or South 
                        Pacific countries or former beneficiary Asia or 
                        South Pacific countries, or both; or
                            (ii) from fabric not formed from yarn, if 
                        such fabric is classifiable under heading 5602 
                        or 5603 of the Harmonized Tariff Schedule of 
                        the United States and wholly formed and cut in 
                        the customs territory of the United States, in 
                        one or more beneficiary Asia or South Pacific 
                        countries or former beneficiary Asia or South 
                        Pacific countries, or any combination thereof.
                    (B) Exception.--Textile and apparel articles 
                described in this paragraph do not include textile and 
                apparel articles that are made exclusively from any of 
                the fabrics, fabric components formed, or components 
                knit-to-shape described in paragraph (1) or (2) of 
                section 112(b) of the African Growth and Opportunity 
                Act (19 U.S.C. 3721(b)), as applied and administered 
                pursuant to paragraph (2).
            (4) Handloomed, handmade, folklore articles and ethnic 
        printed fabrics.--
                    (A) In general.--A textile or apparel article is 
                described in this paragraph if the textile or apparel 
                article is--
                            (i) a textile or apparel article of a 
                        beneficiary Asia or South Pacific country or 
                        countries;
                            (ii) certified as handloomed, handmade, 
                        folklore articles or ethnic printed fabric by 
                        the competent authority of such beneficiary 
                        country or countries; and
                            (iii) on a list of textile or apparel 
                        articles determined by the President, after 
                        consultation with the government of the 
                        beneficiary Asia or South Pacific country or 
                        countries concerned, to be treated as being 
                        handloomed, handmade, or folklore articles or 
                        ethnic printed fabrics of such beneficiary Asia 
                        or South Pacific country or countries.
                    (B) Additional requirements for ethnic printed 
                fabric.--For purposes of subparagraph (A), an ethnic 
                printed fabric of a beneficiary Asia or South Pacific 
                country or countries is--
                            (i) fabric containing a selvedge on both 
                        edges, having a width of less than 50 inches, 
                        and classifiable under subheading 5208.52.30 or 
                        5208.52.40 of the Harmonized Tariff Schedule of 
                        the United States;
                            (ii) fabric of a type that contains 
                        designs, symbols, and other characteristics of 
                        Asian or South Pacific prints--
                                    (I) normally produced for and sold 
                                in indigenous Asian or South Pacific 
                                markets; and
                                    (II) normally sold in Asia or South 
                                Pacific countries by the piece as 
                                opposed to being tailored into garments 
                                before being sold in indigenous Asian 
                                or South Pacific markets;
                            (iii) fabric printed, including waxed, in 
                        one or more beneficiary Asia or South Pacific 
                        countries; and
                            (iv) fabric formed in the customs territory 
                        of the United States, from yarn formed in the 
                        customs territory of the United States, or from 
                        fabric formed in one or more beneficiary Asia 
                        or South Pacific countries from yarn 
                        originating in either the customs territory of 
                        the United States or one or more beneficiary 
                        Asia or South Pacific countries.
            (5) Special rule.--
                    (A) In general.--Preferential treatment under this 
                subsection shall be extended through December 31, 2019, 
                for textile and apparel articles that are wholly 
                assembled in one or more beneficiary Asia or South 
                Pacific countries or former beneficiary Asia or South 
                Pacific countries, or both, regardless of the country 
                of origin of the yarn or fabric used to make such 
                articles.
                    (B) Country limitations.--
                            (i) Small suppliers.--If, during a calendar 
                        year, imports of textile and apparel articles 
                        described in subparagraph (A) from a 
                        beneficiary Asia or South Pacific country are 
                        less than 1 percent of the aggregate square 
                        meter equivalents of all textile and apparel 
                        articles imported into the customs territory of 
                        the United States during that calendar year, 
                        such imports from that country may be increased 
                        to an amount that is equal to not more than 1.5 
                        percent of the aggregate square meter 
                        equivalents of all textile and apparel articles 
                        imported into the customs territory of the 
                        United States during that calendar year for the 
                        succeeding calendar year.
                            (ii) Other suppliers.--If, during a 
                        calendar year, imports of textile and apparel 
                        articles described in subparagraph (A) from a 
                        beneficiary Asia or South Pacific country are 
                        not less than 1 percent of the aggregate square 
                        meter equivalents of all textile and apparel 
                        articles imported into the customs territory of 
                        the United States during that calendar year, 
                        such imports from that country may be increased 
                        by an amount that is equal to not more than \1/
                        3\ of 1 percent of the aggregate square meter 
                        equivalents of all textile and apparel articles 
                        imported into the customs territory of the 
                        United States during that calendar year for the 
                        succeeding calendar year.
                            (iii) Aggregate country limit.--In no case 
                        may the aggregate quantity of textile and 
                        apparel articles described in subparagraph (A) 
                        imported into the customs territory of the 
                        United States during a calendar year under this 
                        subsection exceed the applicable percentage set 
                        forth in paragraph (8)(B) for that calendar 
                        year.
            (6) Surge mechanism.--The provisions of subparagraph (B) of 
        section 112(b)(3) of the African Growth and Opportunity Act (19 
        U.S.C. 3721(b)(3)) shall apply to textile and apparel articles 
        imported from a beneficiary Asia or South Pacific country to 
        which preferential treatment is extended under this subsection 
        to the same extent and in the same manner that such provisions 
        apply to textile and apparel articles described in such section 
        112(b)(3) imported from a beneficiary sub-Saharan African 
        country.
            (7) Special eligibility rules; protections against 
        transshipment.--The provisions of subsection (e) of section 112 
        and section 113 of the African Growth and Opportunity Act (19 
        U.S.C. 3721 and 3722) shall apply to textile and apparel 
        articles imported from a beneficiary Asia or South Pacific 
        country to which preferential treatment is extended under this 
        subsection to the same extent and in the same manner that such 
        provisions apply to textile and apparel articles imported from 
        beneficiary sub-Saharan countries to which preferential 
        treatment is extended under such section 112.
            (8) Limitations on benefits.--
                    (A) In general.--Preferential treatment under this 
                subsection shall be extended in the 1-year period 
                beginning January 1, 2014, and in each of the 10 
                succeeding 1-year periods, to imports of textile and 
                apparel articles described in this subsection in an 
                amount not to exceed the applicable percentage, as 
                defined in subparagraph (B), of the aggregate square 
                meter equivalents of all textile and apparel articles 
                imported into the customs territory of the United 
                States in the most recent 12-month period for which 
                data are available.
                    (B) Applicable percentage.--For purposes of this 
                paragraph, the term ``applicable percentage'' means 11 
                percent for the 1-year period beginning January 1, 
                2014, increased in each of the 10 succeeding 1-year 
                periods by equal increments, so that for the period 
                beginning January 1, 2024, the applicable percentage 
                does not exceed 14 percent.
    (c) Technical Amendment.--Section 6002(a)(2)(B) of the Africa 
Investment Incentive Act of 2006 (Public Law 109-432; 120 Stat. 3190) 
is amended by inserting ``in paragraph (3),'' before ``by striking''.

SEC. 6. REPORTING REQUIREMENT.

    Not later than 1 year after the date of the enactment of this Act, 
and annually thereafter, the President shall report to Congress on the 
implementation of this Act and on the trade and investment policy of 
the United States with respect to the Asia or South Pacific countries.

SEC. 7. TERMINATION OF PREFERENTIAL TREATMENT.

    No preferential treatment extended to a beneficiary Asia or South 
Pacific country under this Act shall remain in effect after December 
31, 2024.

SEC. 8. EFFECTIVE DATE.

    The provisions of this Act shall take effect on January 1, 2014.
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