[Congressional Record Volume 140, Number 143 (Wednesday, October 5, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: October 5, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                      URUGUAY ROUND AGREEMENTS ACT

  Mr. MOYNIHAN. Mr. President, I am in receipt of a letter from U.S. 
Trade Representative Mickey Kantor indicating that, in reviewing the 
Statement of Administrative Action [SAA] accompanying the Uruguay Round 
Agreements Act (S. 2467), submitted to the Congress on September 27, 
1994, his Office had discovered six minor errors. Four of these involve 
the omission of a few lines of text at the bottom of pages as a result 
of printing problems. The other two involve descriptive errors. All are 
technical in nature.
  In order to ensure that all Members are aware of these corrections, I 
ask unanimous consent to insert in the Record, immediately following my 
statement, the letter from Ambassador Kantor and accompanying corrected 
pages to the SAA.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                    U.S. Trade Representative,

                                  Washington, DC, October 3, 1994.
     Hon. Daniel Patrick Moynihan,
     Chairman, Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Mr. Chairman: In reviewing the Statement of 
     Administrative Action (SAA) accompanying the Uruguay Round 
     implementing bill, S. 2467, we have found that a few lines of 
     text were omitted from the end of several pages of the SAA 
     due to printing errors. The omissions occurred on pages 20, 
     24, and 367 of the SAA and at the conclusion of the endnotes 
     following the document.
       In addition, on page 45, the words ``soda ash'' were 
     omitted in the fifth line of the second full paragraph and in 
     the second line of the third full paragraph. The same words 
     erroneously appear in the third line of the sixth full 
     paragraph on that page.
       Finally, in the first full paragraph on page 77, the words 
     ``WTO member'' were erroneously inserted in place of the word 
     ``country.'' The sentence should read: ``Combatting 
     subsidized competition in third country markets will remain a 
     high priority for the United States for two reasons.''
       I am enclosing with this letter corrected copies of those 
     pages of the SAA pages mentioned above. I hope that they will 
     clarify the Administration's intent with regard to the 
     matters discussed on those pages and will permit the 
     Committee to take the corrections into account in preparing 
     its report on the bill.
           Sincerely,
                                                   Michael Kantor.

          Excerpts From the Statement of Administrative Action


                          f. Private Lawsuits

       Section 102(c) of the implementing bill precludes any 
     private right of action or remedy--including an action or 
     remedy sought by a foreign government--against a federal, 
     state, or local government, or against a private party, based 
     on the provisions of the Uruguay Round agreements. This would 
     include any such suit brought against a federal, state, or 
     local agency or against an officer or employee of any such 
     agency. A private party thus could not sue (or defend suit 
     against) the United States, a state or a private party on 
     grounds of consistency (or inconsistency) with those 
     agreements. The provision also precludes a private right of 
     action attempting to require, preclude, or modify federal or 
     state action on grounds such as an allegation that the 
     government is required to exercise discretionary authority or 
     general ``public interest'' authority under other provisions 
     of law in conformity with the Uruguay Round agreements.
       With respect to the states, section 102(c) represents a 
     determination by the Congress and the Administration that 
     private lawsuits are not an appropriate means for ensuring 
     state compliance with the Uruguay Round agreements. Suits of 
     this nature may interfere with the President's conduct of 
     trade and foreign relations and with suitable resolution of 
     disagreements or disputes under those agreements. Moreover, 
     as section 102(c)(2) makes clear, through its approval and 
     implementation of the Uruguay Round agreements Congress will 
     have ``occupied the field'' with respect to any cause of 
     action or defense that seeks, directly or indirectly, the 
     private enforcement of those agreements. That means that 
     private parties may not bring suit or raise defenses:
       directly under those agreements;
       on the basis of a successful judgment against a state in a 
     suit brought by the Attorney General under the agreements; or
       on any other basis, including Congress' Commerce Clause 
     authority.
       In sum, the language of section 102(c)(2) is intended to 
     make clear that Congress seeks the complete preclusion of 
     Uruguay Round agreement-related actions and defenses in 
     respect of state law in any action or proceeding brought by 
     or against private parties.
       The prohibition of a private right of action based on the 
     Uruguay Round agreements, or on Congressional approval of 
     those agreements in section 101(a), does not preclude any 
     agency of government from considering, or entertaining 
     argument on, whether its action or proposed action is 
     consistent with the Uruguay Round agreements, although any 
     change in agency action would have to be authorized by 
     domestic law.


                   l. working party on worker rights

       Section 131 of the bill directs the President to seek in 
     the GATT and the WTO the establishment of a working party to 
     examine the relationship of internationally recognized worker 
     rights, as defined in section 502(a)(4) of the Trade Act of 
     1974, to GATT and WTO articles, objectives, and related 
     instruments. Section 131 sets out four U.S. objectives for 
     the working party:
       To explore the linkage between international trade and 
     internationally recognized worker rights, taking into account 
     differences in the level of development among countries; to 
     examine the effects on international trade of the systematic 
     denial of such rights; to consider ways to address such 
     effects; and to develop methods to coordinate the work 
     program of the working party with the International Labor 
     Organization.
       Section 131 also directs the President to report to the 
     Congress within one year on the progress made in establishing 
     the working party and on U.S. objectives with respect to the 
     working party's work program.


                 m. countries participating in boycott

       Section 133 of the bill calls on the Trade Representative 
     to oppose the admission into the WTO of any country that 
     participates in a boycott of the type described in section 
     8(a) of the Export Administration Act of 1979.


                            n. africa policy

       Section 134 of the implementing bill provides that the 
     President should develop and implement a comprehensive trade 
     and development policy for the countries of Africa. Section 
     134 also requires the President to submit reports to the 
     House Ways and Means and Foreign Affairs Committees and the 
     Senate Finance and Foreign Relations Committees and other 
     appropriate Congressional committees within twelve months of 
     enactment of the bill and annually for the next four years 
     thereafter on its trade and development policy for the 
     countries of Africa and on progress made toward implementing 
     it.
       Sections 113 and 114 of the bill amend the Harmonized 
     Tariff Schedule (HTS) and other provisions of U.S. law to 
     permit the Secretary of the Treasury to liquidate or 
     reliquidate entries of specified products and, on request, to 
     refund any duty paid. These provisions are necessary to 
     correct long-standing errors in classification of certain 
     products in the HTS that are corrected prospectively in 
     Schedule XX, or to correct omissions in the preparation of 
     that Schedule.


              b. additional tariff proclamation authority

       During the Uruguay Round, the United States sought the 
     reciprocal elimination of duties among major trading 
     countries in a wide range of sectors of key interest to U.S. 
     firms. This zero-for-zero initiative consisted of the 
     following sectors: pharmaceuticals, electronics, furniture, 
     distilled spirits, medical equipment, non-ferrous metals, 
     paper and paper products, wood products, soda ash, steel, 
     agricultural equipment, construction equipment, scientific 
     equipment, oilseeds, and oilseed products and toys. These 
     products represent key U.S. import and export interests.
       In some sectors, namely wood products, electronics, 
     distilled spirits, non-ferrous metals, soda ash, and oilseeds 
     and oilseed products, agreement on complete duty elimination 
     was not achieved. Obtaining further reductions and 
     elimination of duties in these sectors is a priority 
     objective for U.S. multilateral, regional and bilateral 
     negotiations.
       The Administration was particularly disappointed over the 
     failure of Japan to agree to further reductions of tariffs on 
     wood products. Every effort will be made to negotiate 
     reductions toward the elimination of the tariffs facing our 
     exports in this sector.
       Moreover, U.S. exports of items such as high value oilseed 
     products would especially benefit from tariff reductions 
     below that achieved in the Uruguay Round. U.S. interests have 
     identified specific products that should be subject to 
     intensified efforts to achieve duty reductions and 
     elimination and the Administration intends to pursue 
     negotiations on these products.
       For those sectors in which the United States achieved duty 
     elimination, acceleration of the phase-out of duties in 
     certain sectors, such as paper, and paper products, should 
     grant these U.S. industries improved access to key markets. 
     The Administration will also pursue accelerated staging of 
     tariff reductions as a priority objective with our trading 
     partners, such as an accelerated reduction of the EU tariffs 
     on paper and paper products.
       Combatting subsidized competition in third country markets 
     will remain a priority for the United States for two reasons. 
     First, the European Union, in general, has higher export 
     subsidy ceilings than does the United States. Therefore, 
     there will continue to be a need to protect U.S. export 
     markets abroad from subsidized competition. Secondly, the 
     Agreement on Agriculture requires further multilateral 
     negotiations on trade-distorting agricultural subsidies and 
     import protection in five years. The use of U.S. subsidies in 
     the interim should help induce the European Union and others 
     to agree on further reductions in those negotiations.
       The CCC will also administer egg EEP initiatives in a 
     manner to maximize benefits to the entire U.S. egg industry. 
     In particular, the CCC will make efforts to enable the U.S. 
     egg industry to maintain a strong presence in Hong Kong.


                   b. Dairy Export Incentive Program

       Section 153 of the Food Security Act of 1985 requires the 
     CCC to operate a Dairy Export Incentive Program (DEIP). The 
     program operates in a manner similar to the EEP, but is 
     limited to dairy products. Section 411(b) of the implementing 
     bill extends the DEIP through 2001.


                       c. ccc dairy export sales

       Section 1163(a) of the Food Security Act of 1985 currently 
     requires the Secretary of Agriculture annually through fiscal 
     year 1995 to sell for export not less than 150,000 metric 
     tons of dairy products, including not less than 100,000 
     metric tons of butter and not less than 20,000 metric tons of 
     cheese, out of CCC-owned stocks. Because export sales are 
     usually at world prices, which normally are lower than 
     domestic prices, the export sale of these products by CCC 
     under section 1163(a) is likely to constitute a ``sale or 
     disposition for export by governments or their agencies of 
     non-commercial stocks of agricultural products at a price 
     lower than the comparable price charged for the like product 
     to buyers in the domestic market,'' within the meaning of 
     Article 9:1(b) of the Agreement. Accordingly, CCC dairy 
     export sales made at prices meeting this standard are subject 
     to U.S. export subsidy volume and budgetary outlay 
     commitments under the Agreement.
       Just as the United States may now choose to take section 
     301 actions that are not GATT-authorized, governments that 
     are the subject of such actions may choose to respond in 
     kind. That situation will not change under the Uruguay Round 
     agreements. The risk of counter-retaliation under the GATT 
     has not prevented the United States from taking actions in 
     connection with such matters as semiconductors, 
     pharmaceuticals, beer, and hormone-treated beef.
       Finally, nothing in the DSU will affect application of 
     section 301 against practices by governments that either are 
     not WTO members or by WTO members to which the United States 
     does not apply the Uruguay Round agreements. The Trade 
     Representative will address section 301 investigations of 
     unfair trade practices by such countries on a bilateral 
     basis.


                      c. anticompetitive practices

       Among the foreign government practices that section 
     301(d)(3)(B) of the Trade Act of 1974 defines as 
     ``unreasonable'' are those that deny fair and equitable 
     market opportunities, including the toleration by a foreign 
     government of systematic anticompetitive activities. The 
     Administration will enforce vigorously the ``toleration of . 
     . . anticompetitive activities'' provision in section 301 
     when appropriate to address foreign anticompetitive behavior. 
     The practices covered by the provision include, but are not 
     limited to, toleration of cartel-type behavior or toleration 
     of closed purchasing behavior (including collusive coercion 
     of distributors or customers) that precludes or limits U.S. 
     access in a concerted and systematic way.
       The Trade Representative, in consultation with the Attorney 
     General, will look to a variety of information sources in 
     evaluating a foreign government's toleration of 
     anticompetitive practices. Issues to be addressed include the 
     existence of the anticompetitive practices and whether there 
     was an unreasonable failure to take timely action against 
     them. In making an assessment, the Trade Representative will 
     consider whether the pertinent foreign government, and 
     especially its competition authorities, have been made aware 
     of the alleged practices and, if so, how they were informed, 
     the relevant evidence that has been provided to, or is known 
     to be available to, the foreign authorities, and the nature 
     of response those authorities have made.
       The evidence provided to, or known to be available to, a 
     foreign authority normally should include, among other 
     things, the identity of the enterprises allegedly involved 
     and the relevant markets affected, a description of the 
     specific practices, and an indication of their duration and 
     pervasiveness. In keeping with the Congressional intent in 
     adopting this provision, the Trade Representative will also 
     take into account whether the anticompetitive activities are 
     inconsistent with the foreign country's own laws, how 
     systematic and pernicious those activities have been, and 
     their degree of effect on U.S. domestic or foreign commerce.
       56. This method is also known as the frozen initial method.
       57. Under this funding method, the normal cost is generally 
     determined by dividing (1) the actuarial present value of 
     future benefits less the sum of the actuarial value of the 
     assets and the unfunded liability by (2) a weighted temporary 
     annuity factor that spreads the cost of the plan over future 
     years. If the sum of the actuarial value of assets and the 
     unfunded liability exceed the present value of future 
     benefits, the normal cost under the method will be negative.
       58. For these purposes, plans with no unfunded vested 
     benefits and plans not subject to title IV of ERISA are 
     disregarded.

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