117 S3708 IS: Trading System Preservation Act
U.S. Senate
2022-02-28
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II
117th CONGRESS
2d Session
S. 3708
IN THE SENATE OF THE UNITED STATES
February 28, 2022
Mr. Portman (for himself and Mr. Coons) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To provide the President with authority to enter into certain plurilateral trade agreements with benefits only applying to signatories of those agreements, and for other purposes.
1.

Short title
This Act may be cited as the “Trading System Preservation Act”.
2.

Findings; Sense of Congress
(a)

Findings
Congress makes the following findings:
(1)
The World Trade Organization (in this section referred to as the “WTO”) was established to be a forum for multilateral trade negotiations between member countries.
(2)
Scant negotiating progress has been made at the WTO since its creation in 1995, including through the failed Doha Round, which was initiated 20 years before the date of the enactment of this Act.
(3)
The inability to reach negotiated outcomes at the WTO has pushed the multilateral trading system to the brink of irrelevance and created incentives for members of the WTO to pursue their trade policy objectives through litigation rather than negotiation.
(4)
That lack of negotiating progress can be generally attributed to a small minority of WTO members that, for a variety of reasons, have exercised an effective veto over negotiations, effectively prohibiting agreement on new rules to discipline discriminatory practices.
(5)
Most favored nation (in this section referred to as “MFN”) obligations, strictly defined, which appear to generally require equal treatment of all WTO members, make it difficult to achieve high-quality plurilateral agreements because of concerns about free ridership by WTO members who are not party to those agreements.
(b)

Sense of Congress
It is the sense of Congress that—
(1)
the WTO system affords a variety of flexibilities for WTO members to negotiate and conclude plurilateral agreements without extending the benefits negotiated therein to the entire membership of the WTO on an MFN basis;
(2)
to reinvigorate the multilateral trading system and advance its trade interests, the United States should exercise its rights to negotiate new sectoral trade agreements with other interested WTO members on a plurilateral basis;
(3)
to facilitate those negotiations, enable a high level of ambition, and avoid lowest common denominator outcomes, any new benefits negotiated under those new agreements should be limited to the participants and not extended to the entire membership of the WTO; and
(4)
pursuing plurilateral agreements that are not subject to unconditional MFN will enable the United States to work with like-minded countries within the framework of the WTO to develop new rules to discipline discriminatory, trade distorting, and non-market practices, restore the relevance of the multilateral trading system, and expand trade to the benefit of the citizens of the United States.
3.

Briefing on plurilateral agreements with benefits applying only to signatories of those agreements
(a)

In general
Not later than 120 days after the date of the enactment of this Act, the United States Trade Representative shall provide to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a classified briefing on the feasibility and advisability of pursuing and adopting covered plurilateral trade agreements.
(b)

Elements
The briefing required under subsection (a) shall include a discussion of the opportunities, obstacles, feasibility, and advisability of negotiating and adopting covered plurilateral trade agreements.
(c)

Definitions
In this section:
(1)

Covered plurilateral trade agreement
The term covered plurilateral trade agreement means a sector-specific agreement within the framework of the World Trade Organization involving foreign countries or foreign territories that form a subset of the members of the World Trade Organization that does not extend benefits on a most favored nation basis.
(2)

Most favored nation
The term most favored nation, with respect to requirements relating to a trade agreement, means requirements under the World Trade Organization for nondiscriminatory trade treatment among all parties to the agreement.
4.

Negotiating and trade agreements authority for certain plurilateral agreements with benefits applying only to signatories of those agreements
(a)

Initiation of negotiations
(1)

In general
In order to enhance the economic well-being of the United States, the President shall initiate negotiations for a covered plurilateral trade agreement under this section when the President determines that it is in the national interest to do so.
(2)

Limitation
The President may not initiate negotiations for a covered plurilateral trade agreement under this section until the date on which the United States Trade Representative provides the briefing required by section 3(a).
(b)

Authority for agreements
(1)

In general
To strengthen the economic competitiveness of the United States by improving trade relations with countries similarly interested, the President may enter into covered plurilateral trade agreements in a sector of the economy specified in subsection (d).
(2)

Termination of authority
The authority under paragraph (1) terminates on July 1, 2027.
(c)

Modifications permitted
(1)

In general
Subject to paragraph (2), the President may proclaim such modification or continuance of any existing duty or continuance of existing duty-free or excise treatment as the President determines to be required or appropriate to carry out an agreement entered into under subsection (b).
(2)

Limitation
Substantial modifications to, or substantial additional provisions of, an agreement entered into after July 1, 2027, are not covered by the authority under paragraph (1).
(d)

Sectors of the economy specified
A sector of the economy specified in this subsection is any of the following sectors:
(1)
E-commerce and digital services.
(2)
Pharmaceuticals and medical countermeasures.
(3)
Environmental goods.
(4)
Services.
(5)
Any sector that is subject to substantial interference by a foreign government, including through excessive subsidies or state-owned enterprises.
(e)

Consultation with and notification to Congress
The President shall consult with Congress regarding, and notify Congress of, the intention of the President to enter into an agreement under subsection (b) or to make a proclamation under subsection (c).
(f)

Participating countries
(1)

In general
Subject to paragraph (2), the President may determine which foreign countries or foreign territories to negotiate with toward an agreement under this section and, after the implementation of any such agreement, the President may, as conditions warrant, identify and engage in negotiations with additional countries or territories that wish to accede to the agreement.
(2)

Non-market economy country
(A)

In general
The President may not negotiate an agreement under this section with a foreign country or foreign territory determined to be a non-market economy country pursuant to section 771(18) of the Tariff Act of 1930 (19 U.S.C. 1677(18)).
(B)

After entry into force
A foreign country or foreign territory described in subparagraph (A) may accede to a completed agreement negotiated pursuant to this section after entry into force of the agreement if a joint resolution is first enacted approving the accession of that country to the agreement.
(g)

Bills qualifying for trade authorities procedures
(1)

Implementing bills
(A)

In general
The provisions of section 151 of the Trade Act of 1974 (19 U.S.C. 2191) apply to a bill of either House of Congress which contains provisions described in subparagraph (B) to the same extent as such section 151 applies to implementing bills under that section. A bill to which this paragraph applies shall hereafter in this section be referred to as an “implementing bill”.
(B)

Provisions specified
The provisions described in this subparagraph are—
(i)
a provision approving a trade agreement entered into under this section and approving the statement of administrative action, if any, proposed to implement such trade agreement; and
(ii)
if changes in existing laws or new statutory authority are required to implement such trade agreement or agreements, only such provisions as are strictly necessary or appropriate to implement such trade agreement or agreements, either repealing or amending existing laws or providing new statutory authority.
(2)

Deadline for submission of bill
The procedures under paragraph (1) apply to implementing bills submitted with respect to trade agreements entered into under this section before July 1, 2027.
(h)

Relationship to Bipartisan Congressional Trade Priorities and Accountability Act of 2015
An agreement under this section shall not enter into force with respect to the United States and an implementing bill shall not qualify for trade authorities procedures under subsection (g), including an agreement that does not require changes to United States law or an implementing bill in connection therewith, unless the following requirements under the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (19 U.S.C. 4201 et seq.) are carried out with respect to that agreement or implementing bill to the same extent as would be required of an agreement entered into under section 103(b) of that Act (19 U.S.C. 4202(b)), notwithstanding the expiration of authority to enter into an agreement under such section 103(b):
(1)
The trade negotiating objectives under section 102 of that Act (19 U.S.C. 4201).
(2)
The congressional oversight and consultation requirements under section 104 of that Act (19 U.S.C. 4203).
(3)
The notification, consultation, and reporting requirements under section 105 of that Act (19 U.S.C. 4204).
(4)
The implementation procedures under section 106 of that Act (19 U.S.C. 4205).
(i)

Definitions
In this section:
(1)

Covered plurilateral trade agreement
The term covered plurilateral trade agreement means a sector-specific agreement within the framework of the World Trade Organization involving foreign countries or foreign territories that form a subset of the members of the World Trade Organization that does not extend benefits on a most favored nation basis.
(2)

Most favored nation
The term most favored nation, with respect to requirements relating to a trade agreement, means requirements under the World Trade Organization for nondiscriminatory trade treatment among all parties to the agreement.