[Congressional Record Volume 140, Number 146 (Saturday, October 8, 1994)] [Extensions of Remarks] [Page E] From the Congressional Record Online through the Government Printing Office [www.gpo.gov] [Congressional Record: October 8, 1994] From the Congressional Record Online via GPO Access [wais.access.gpo.gov] STATEMENT OF ADMINISTRATIVE ACTION ON THE URUGUAY ROUND TRADE AGREEMENTS ______ HON. SAM GIBBONS of florida in the house of representatives Friday, October 7, 1994 Mr. GIBBONS. Mr. Speaker, on September 27, 1994, the President transmitted to the Congress the Uruguay Round Trade Agreements, an implementing bill introduced as H.R. 5110, and a Statement of Administrative Action. These documents were printed as House Document 103-316. I have received a letter from the U.S. Trade Representative dated October 3, transmitting corrections of a few printing and other technical errors in the Statement of Administrative Action. Mr. Speaker, I ask that this letter be printed in the Record so that the statement as corrected will be reflected in the legislative history. The United States Trade Representative, Executive Office of the President, Washington, DC, October 3, 1994. Hon. Sam Gibbons Acting Chairman, Committee on Ways and Means, House of Representatives, Washington, DC. Dear Mr. Chairman: In reviewing the Statement of Administrative Action (SAA) accompanying the Uruguay Round implementing bill, H.R. 5110, 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 the 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. Enclosures * * * * * Corrected Page 20: 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. ____ Corrected Page 24: intends to maintain the existing policy advisory committee on environmental and conservation matters. The Administration also intends to seek the views and advice of the ACTPN and environmental policy committee with respect to environmental issues associated with trade policies or trade agreements, including issues related to implementation of the WTO; and for the environmental policy committee to include in its reports on trade agreements an advisory opinion as to any significant environmental effects of the agreement. 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. ____ Corrected Page 45: which can be implemented through Presidential proclamation, this change must be made in a statute. 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. A third area in which further progress is necessary is the harmonization of tariffs on chemical products. The Administration will make every effort to expand * * * ____ Corrected Page 77: their agricultural exports do not impose a similar restriction on themselves and the restriction is not required by the Agreement on Agriculture. No similar statutory change is required for four U.S. export subsidy programs--the Dairy Export Incentive Program, the Sunflowerseed and Cottonseed Oil Assistance programs, and CCC dairy export sales--because there are no similar statutory restrictions on their operations. Combating 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 of export by governments or their agencies on 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. ____ Corrected Page 367: infreqently. In certain cases, the United States has taken such action because a foreign government has blocked adoption of a GATT panel report against it. 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. ____ Corrected Endnotes: who owns more than 10 percent of the capital or profits interests in the partnership, or (3) in the case of a corporation, owns more than 10 percent in value of the voting stock of the corporation or all the stock of the corporation. 56. This method is also known as the frozen initial liability 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. ____________________