Congressional Record, Volume 142 Issue 87 (Thursday, June 13, 1996)

[Congressional Record Volume 142, Number 87 (Thursday, June 13, 1996)]
[House]
[Pages H6293-H6325]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

SHIPBUILDING TRADE AGREEMENT ACT

The SPEAKER pro tempore. Pursuant to House Resolution 448 and rule
XXIII, the Chair declares the House in the Committee of the Whole House
on

[[Page H6294]]

the State of the Union for the consideration of the bill, H.R. 2754.

{time} 1041

in the committee of the whole

Accordingly the House resolved itself into the Committee of the Whole
House on the State of the Union for the consideration of the bill (H.R.
2754) to approve and implement the OECD Shipbuilding Trade Agreement,
with Mr. Gutknecht in the chair.
The Clerk read the title of the bill.
The CHAIRMAN. Pursuant to the rule, the bill is considered as having
been read the first time.
The gentleman from Texas [Mr. Archer], the gentleman from Florida
[Mr. Gibbons], the gentleman from South Carolina [Mr. Spence], and the
gentleman from California [Mr. Dellums] will each be recognized for 15
minutes.
The Chair understands the Committee on Ways and Means will use all
its time first.
The Chair recognizes the gentleman from Texas [Mr. Archer].
Mr. ARCHER. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I must take a moment to commend our colleague, the
gentleman from Florida. Sam Gibbons, for his hard work, leadership, and
expertise, not only on this bill but on all of the trade bills that we
have worked on together for so many years. Sam, you have been a rock, a
solid free trader, and over these years, you have been a real leader in
forcing open markets, reducing trade barriers, and thereby creating
greater opportunity for all working Americans in the next century. That
is what this is all about: economic improvement and opportunity for all
American workers.
I realize that this may be the last time that we will be here on the
floor together working to achieve freer trade and opportunity for
working Americans. I, for one, am going to miss your leadership, your
vision, and your expertise, your experience, your unsurpassed knowledge
in these trade issues.
Mr. Chairman, I strongly support H.R. 2754 to implement the OECD
agreement on shipbuilding negotiated by the administration. It has
taken us over 6 years from the beginning of the negotiations to get to
this point. We are presented with a unique opportunity to allow U.S.
shipyards to compete in a global market without losing out to companies
from countries that are only too willing to provide billions of dollars
in subsidies.
This is a good agreement that accommodates the priorities of a broad
bipartisan cross-section of the House. It adds a new trade remedy to
our arsenal for U.S. shipbuilders that are injured by unfair pricing of
ships around the world. It preserves our national security interest,
and it preserves the Jones Act.

{time} 1045

We may continue our Title XI: Loan Guarantee Program, although under
the international standards set forth in the agreement. Our trading
partners have to give up far more than we do. In fact, our trading
partners, many of them have already approved this agreement and others
are in the process of approving it and looking to us and what we are
going to do today.
There is strong bipartisan support for the agreement. The Committee
on Ways and Means, which has primary jurisdiction, approved it by a
vote of 27-4. The administration is strongly in support, as well,
because it accurately reflects the negotiated agreement.
I am opposed to the one amendment that will be offered to this bill
because it is clearly inconsistent with the agreement. In extending the
time period in which we can offer title XI loan guarantees that exceed
the terms of the agreement, the amendment would put us in direct
violation of the international standards set forth in the agreement.
This amendment is being presented as a compromise because it would
keep the current title XI program in effect for only 30 months, yet
would not go so far as to maintain the current program indefinitely.
But whatever the justification, it represents a clear and unmistakable
violation of the agreement. In fact, our trading partners, in a matter
of hours after the ink was dry on this amendment, wrote to tell us in
no uncertain terms that they view the amendment as violating the
agreement.

In implementing this agreement we are hamstrung by the fact that we
do not have fast track procedures in place that limit amendments once
the legislation has been formally introduced. Nevertheless, we must
show our trading partners that we have the ability to implement
agreements that are negotiated by representatives of this country.
If we fail to implement the agreement, or if we adopt the amendment
which is inconsistent with the agreement, we lose twice. First, we will
have lost the considerable opportunity to enable U.S. shipbuilders to
reenter the worldwide commercial market and to compete on a level
playing field. Second, such an outcome will reflect poorly upon the
credibility of the United States.
Ours was the country that initiated the negotiations on behalf of its
industry in the first place and was the driving force during the 5-year
negotiating process. We must not lose our reputation as a country that
is able to implement the agreements that it negotiates and signs. The
negotiations must end at the negotiating table and any congressional
concern should be taken up at that point. We cannot redo our agreements
in the implementation process.
Accordingly, I believe that it is important to the future of our
trade goals that we want to accomplish that we implement the agreement
cleanly and quickly, without amendment. If Members vote for H.R. 2754
and against the amendment, they can be assured they are voting for
faithful implementation of the agreement that the administration
negotiated.
Mr. Chairman, I yield the balance of my time for distribution to the
gentleman from Illinois [Mr. Crane].
The CHAIRMAN. Without objection, the Chair will recognize the
gentleman from Illinois to control the balance of the time.
There was no objection.
Mr. GIBBONS. Mr. Chairman, I yield myself 3 minutes.
First let me thank the gentleman from Texas [Mr. Archer] for his
generous comments about my service.
Let me say that the debate here today goes far past this agreement.
One of the reasons we have such a difficult time in international
agreements is because the rest of the world says to America, ``As soon
as we agree with you on something, you will unravel it in the
ratification process.'' Let me make it clear that on this agreement,
every other nation that is involved has already ratified this agreement
and we face a deadline of tomorrow on ratifying this agreement.
I want to talk about the Bateman amendment, with no animosity to the
gentleman from Virginia [Mr. Bateman] or any of the supporters of his
amendment. But the Bateman amendment, if adopted, will kill this
agreement. The evidence is in yesterday's Record if my colleagues want
to read it, all of the signatories of this agreement that said they
will back out if we ratify the Bateman amendment, and tomorrow is the
deadline.
So this is a crucial historic point for this Congress. Can we enter
into an international agreement without unraveling it here on the
floor?
The Bateman amendment itself, it adopted, will be ineffective. The
Bateman amendment itself hangs on the slim gossamer thread of a
standstill arrangement that is in the basic agreement and tomorrow is
the deadline on the basic agreement. So if we signify today that we are
not going ahead with this agreement as negotiated, the Bateman
amendment stands no chance of having any influence upon shipbuilding in
America.
The standstill agreement is something that is common to every
international agreement. That is, when we sign those agreements, all
nations agree to not escalate the practice that we are outlawing.
At best the Bateman amendment will be ineffective. At worst it will
kill the agreement. We must vote down the Bateman amendment.
The people that the gentleman from Virginia [Mr. Bateman] represents
have had some 7 years to adjust to the changes that are coming about.
The position he attempts to ratify and move forward is only short-term.
On its face it looks reasonable, but there is more at stake than just
the reasonableness of the Bateman amendment here. It is

[[Page H6295]]

the credibility of America in negotiating an international agreement.
We cannot negotiate then with anyone. People will refuse to negotiate
any agreements with us if we are going to unravel them here on the
floor. That is the issue that is before us today.
Please vote ``no'' on the Bateman amendment and support this
agreement when it comes up for final ratification.
Mr. Chairman, I rise in strong support of H.R. 2754, the OECD
Shipbuilding Trade Agreement Act. This legislation would implement
under U.S. law an international agreement reached after 5 long years of
negotiations carried out by both the Bush and Clinton administrations.
The agreement would eliminate the destructive pattern of heavy
Government subsidies and chronic predatory pricing that has long
characterized the global commercial shipbuilding industry.
H.R. 2754 was favorably reported by the Ways and Means Committee on
March 21 by a bipartisan vote of 27 to 4. It was also favorably
reported as an amendment in the nature of a substitute by the National
Security Committee by voice vote on May 29. Unfortunately, several key
provisions of the National Security Committee's version of the
legislation are inconsistent with the agreement. These provisions will
be offered as a National Security Committee amendment by Mr. Bateman.
Make no mistake about it, the Bateman amendment, if enacted into law,
will kill the agreement.
The administration strongly supports this legislation as does the
Shipbuilders Council of America. The Shipbuilders Council includes 17
companies operating 44 shipyards in 13 States across the country. In
addition to SCA members, a large coalition of leading shippers, ports,
and U.S.-flag operating companies support the agreement, including the
American Waterways Shipyard Conference, the American Association of
Port Authorities, the American Institute of Merchant Shipping, and the
Labor Management Maritime Committee.

the oecd shipbuilding agreement on h.r. 2754--the key elements

To give Members an idea of what is contained in the OECD Shipbuilding
Agreement and H.R. 2754, I would like to briefly outline the key
elements of the agreement and H.R. 2754, which implements that
agreement.
Generally speaking, the OECD agreement contains four major elements--
First, the elimination of virtually all subsidies granted either
directly to shipbuilders or indirectly through ship operators;
Second, an injurious pricing code designed to prevent dumping in the
commercial shipbuilding industry;
Third, a comprehensive discipline on Government financing for exports
and domestic ship sales designed to avoid trade-distortive financing;
and
Fourth, an effective and binding dispute settlement mechanism.
H.R. 2754 would implement the OECD Shipbuilding Agreement under U.S.
law. By enacting H.R. 2754 into law, Congress would approve the
agreement and make the necessary statutory changes to conform U.S. law
to the agreement.
Title I would establish a new title VIII to the Tariff Act of 1930,
as amended, in order to create an injurious-pricing mechanism
applicable to commercial shipbuilding, analogous to current U.S.
antidumping law.
Title II would eliminate the current 50-percent repair duty for
repairs made to U.S.-flag vessels repaired in a country party to the
agreement. Title II would also amend certain provisions of the Merchant
Marine Act of 1936 to bring U.S. law into conformity with the
agreement. In this regard, title II would amend the operational
differential subsidies, capital construction fund, capital reserve
fund, and cargo preference programs so that such programs would be
available both to U.S.-built vessels as well as to vessels built in
countries party to the agreement. Title II would also amend the title
XI loan guarantee program to bring its terms into conformity with the
agreement.
Title III contains a revenue offset provision in the amount of $36
million over 5 years by amending the penalty provisions for failure to
file a disclosure of exemption for shipping income of foreign persons.

the bateman amendment

The Bateman amendment contains those provisions of the National
Security-reported bill not included as original text in the version of
H.R. 2754 being considered by the House today. I strongly oppose the
Bateman amendment because it will effectively kill the OECD agreement.
I would like to focus on the two key provisions of the Bateman
amendment that are inconsistent with the agreement.
The first inconsistent provision would extend the current title XI
loan guarantee program for an additional 30 months. The current title
XI program, passed in 1994, provides Government guarantees to finance
the purchase of a ship for up to 87.5 percent of the ship's value over
25 years. The agreement, however, only allows financing for up to 80
percent of the ship's value over 12 years. By passing H.R. 2754 without
the Bateman amendment, the United States will continue to operate title
XI financing on these terms.
Unfortunately, if this provision of the Bateman amendment is enacted
into law, it will scuttle the agreement. I have received letters from
the chairman of the OECD negotiating group and high level officials
from the EU, Japan, and Norway stating that continuation of the current
title XI program is inconsistent with the agreement and therefore
unacceptable. The administration also objects to this provision. We
have had a temporary advantage with the current title XI program
because every signatory to the agreement has been operating since the
agreement was signed in December 1994 under a standstill, pending
ratification of the agreement. If the agreement is not faithfully
implemented, our trading partners will match, or better, our current
title XI program and go back to providing other subsidies as well.
The second inconsistent provision in the Bateman amendment would be
contrary to the section of the agreement the United States negotiated
to preserve the home build requirements of the Jones Act. Under the
agreement, every country, except the United States, agreed to eliminate
their home build requirements for ships operating in the coastwise
trades. The United States took a full and permanent exception for the
Jones Act, which means that the Jones Act will never be touched by the
agreement. In exchange for protecting fully the Jones Act, however, the
United States had to agree to a mechanism that would adjust downward,
in certain circumstances, benefits that U.S. shipyards benefiting from
the Jones Act would be entitled to under the agreement. Conceptually,
the notion is that U.S. shipyards that receive increasing benefits
because of exempted Jones Act contracts would be entitled to
correspondingly fewer benefits under the provisions of the agreement in
order to maintain an overall balance of advantages under the agreement.
Given that potential Jones Act contracts are probably less than 1
percent of total worldwide ship tonnage built every year, U.S.
shipyards benefiting from the Jones Act would potentially have to give
up 1 percent of the international market. This trade-off seemed
reasonable in order to fully exempt the Jones Act from the agreement.
Unfortunately, the Bateman amendment would unilaterally negate this
section of the agreement.

conclusion

Mr. Chairman, the OECD Shipbuilding Agreement took 5 long, hard
years of negotiations. It is our best hope for creating a level playing
field internationally for our commercial shipbuilders. Without this
agreement, we will be back where we started some 15 years ago--with
massive subsidies and unfair pricing practices by our trading partners.
I strongly urge this House to oppose the Bateman amendment and to vote
in favor of H.R. 2754. Nothing less will save this agreement.
Mr. Chairman, I reserve the balance of my time.
Mr. CRANE. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I rise in support of H.R. 2754, the Shipbuilding Trade
Agreement Act. This legislation would implement the OECD Agreement on
Shipbuilding. H.R. 2754, and the agreement it implements, are the
culmination of many years of effort to level the playing field
worldwide for the shipbuilding industry. I sponsored H.R. 2754, along
with my colleagues, Mr. Gibbons and Ms. Dunn, and Ways and Means
favorably reported this legislation by an overwhelming bipartisan vote
of 27 to 4. I strongly believe that this agreement will open up trade
in shipbuilding for our industry by eliminating virtually all
government subsidies and creating equitable terms of competition in the
international shipbuilding market for U.S. shipbuilders. The agreement
represents the best chance that our industry has to compete on a
worldwide basis without having to contend with the huge subsidies
offered by other governments to their shipbuilding industries.
In addition, the agreement and implementing bill would provide a new
remedy to U.S. shipyards that have been injured by unfair pricing.
Unless this legislation is passed, our shipyards will not have access
to this valuable remedy, which would force offending shipyards to pay a
charge in the amount of injurious pricing or face significant trade
restrictions.
Of course, any international agreement must be fair and balanced, and
I personally took care to assure that the agreement is truly
symmetrical and that no special deals were cut to the detriment of the
U.S. shipping industry. Any subsidies that are grandfathered under the
agreement are limited and mainly in the form of worker

[[Page H6296]]

assistance related to reducing capacity within these countries. Of
course, capacity reduction benefits shipbuilding industries worldwide.
You will hear debate today that we should not cut back our title XI
loan guarantee program to conform to the agreement because it would
take away the one subsidy that our shipyards have. Do not be misled by
this argument. If we do not implement this agreement out of fear of
having to scale back on our title XI and other programs, we will permit
our trading partners to increase the level of subsidies that they
provide to their industries to a level far beyond any U.S. subsidies--
and the U.S. industry will not be able to compete under those
circumstances. The simple fact is that it is highly unlikely that
Congress will vote to increase subsidies for the U.S. shipbuilding
industry to make it more competitive with highly subsidized foreign
shipyards. As a result, the only way our industry can be competitive is
to force its competitors to give up their subsidies and their ability
to engage in unfair pricing practices. That is precisely what this
agreement does.

You will also hear debate today that we should simply reject the
agreement we have and return to the negotiating table in an attempt to
cut an even better deal for our industry. This argument is misguided as
well. The agreement took 5 years to conclude and was the product of
hard bargaining and concessions on all sides. Our trading partners are
giving up billions of dollars in subsidies. The biggest change that we
have to make is to change the terms of our loan guarantee program. Our
trading partners have told us that if we do not implement this
agreement in a timely manner, support for the agreement in their
countries will erode and vanish. In fact, I have letters from the
European Community, Japan, Norway, and the OECD itself stating that
renegotiating the agreement is simply impossible. If we fail, we will
return to the days when the foreign industries are heavily subsidized
but the U.S. industry is not.
You will also hear that this bill forces us to eliminate our title XI
program in order to comply with the agreement. That is not the case. We
are able to retain title XI, although we have to scale it back to meet
the agreement requirements, just as every other signatory must do. We
can even maintain the same funding levels as we currently have.
Opponents to the agreement are raising the specter that our national
defense is somehow at risk unless we adopt the amendment. That is
simply untrue. The agreement itself contains an exception that allows a
government to back away if it believes its national security interests
are at stake. The Department of Defense has also sent us a letter
stating, and I quote, that ``the agreement will not adversely affect
our national security.'' Mr. Chairman, if our own Defense Department
can make such a bold statement, it is powerful evidence that the
agreement does not threaten our national security.
Mr. Chairman, the shipbuilding agreement represents a good deal. In
an effort to save our shipbuilding industry and in the spirit of
bipartisanship, I urge my colleagues to vote for H.R. 2754.
Mr. Chairman, I reserve the balance of my time.
Mr. GIBBONS. Mr. Chairman, I yield 2 minutes to the gentleman from
Washington [Mr. McDermott].
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
Mr. McDERMOTT. Mr. Chairman, I rise in support of H.R. 2754, the
Shipbuilding Trade Agreement Act, and in opposition to the Bateman
amendment.
I think the chairman and the ranking member have made the arguments,
but I think it is important to say that this implements under U.S. law
an international agreement that sets out the most effective subsidy
discipline ever included as part of a multilateral trade agreement. It
also creates under U.S. law an unfair pricing remedy similar to our
antidumping laws for ships engaged in international trade.
Mr. Chairman, this bill is unique. It has bipartisan support both
from the Bush and the Clinton administrations and from the Democrats
and the Republicans in the House of Representatives. Supporters of this
legislation include a diverse coalition of maritime interests in this
country, including the Shipbuilders Council whose membership includes
17 companies operating 44 shipyards in 13 States. This agreement will
create the necessary conditions for our commercial shipyards to begin
to compete once again in the world shipbuilding industry. Foreign
subsidies have completely forced U.S. shipbuilders out of the
international market to the point that today U.S. yards have less than
1 percent of the world market. The Bateman amendment is inconsistent
with the agreement and will kill it and should be rejected. If we do
not pass H.R. 2754, we will be back to where we were in the 1980's. Our
trading partners will continue their subsidizing ways and we will
continue to engage in predatory pricing practices with impunity.
Mr. Chairman, I urge my colleagues to reject the Bateman amendment
and pass H.R. 2754.
Mr. CRANE. Mr. Chairman, I reserve the balance of my time.
Mr. GIBBONS. Mr. Chairman, I yield 2 minutes to the gentleman from
New York [Mr. Rangel].
(Mr. RANGEL asked and was given permission to revise and extend his
remarks.)
Mr. RANGEL. Mr. Chairman, I rise in support of H.R. 2754, in
opposition to the Bateman amendment, and also to thank Sam Gibbons who
for so many years has been active in these very sensitive negotiations
which involve not just shipbuilding today but shipbuilding tomorrow.

{time} 1100

We are all pleased that America now is going into an era of peace,
that we are moving swiftly from defense into commercial shipping, and
that we now are going to have to make certain that we can have a plane,
an equal, a flat playing field as we move forward in economic
competition with other shipbuilders, and that is exactly what this
agreement has done.
It prevents other countries from manufacturing, making ships, and
dumping them on our markets for less than the price that they actually
paid for it. It really sets the rules for all of the countries that
have sat down and realized that there are pluses and minuses in every
agreement. The subsidies that we have now, sure, we can continue those,
which are higher than other countries, but that does not mean that
other countries cannot change if there is no agreement and put in for
deeper subsidies.
So what we are talking about is a war between which country is
prepared to subsidize this industry more than the other. We know that
we have the expertise, we have the ability to excel, and all we ask is
that other governments play by the same rules.
It took 5 years for the Bush administration, the Clinton
administration, and for other countries to try to figure out what is in
their best interests, and that is what international treaties are all
about. It means that those who have an advantage now will not have that
advantage next year.
So I think that after all of these years, we cannot have America say,
yes, we agree; yes, we spent time at the table; but here again we find
some people that believe that they got a little edge now but are not
looking at the long picture as to where America will be if we do not
restrict other countries from depending on subsidies and allow us to
depend on our expertise, our experience, our high-technology, and know
that those people, whether they are in military vessels or not can
succeed in a fair market.
Mr. CARDIN. Mr. Chairman, I rise in strong support of H.R. 2754 and
against the Bateman amendment, which would basically defeat the bill.
First, I really want to compliment the gentleman from Florida,
Congressman Gibbons, for the work that he has done for so many years to
bring us to this point by bringing forward legislation in this Chamber
that have brought our European friends to the table so that we could
enter into this agreement. We are here today because of his good work
and we all appreciate that very much.
Mr. Chairman, the Port of Baltimore was once a great center for
commercial shipbuilding. During the Second World War we were producing
the Liberty ships after just a few days of work. We had many commercial
shipyards located in the harbor area of Baltimore.

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Well, today, we have one major commercial shipbuilding yard that
remains, and that yard basically competes for repair work.
The reason why Baltimore lost its shipbuilding was not because it was
inefficient; it lost its shipbuilding because of international
subsidies. Other countries were willing to put up tremendous subsidies
for their shipbuilding and we in this Nation thought that was wrong and
we protested and protested, but the jobs were lost in this country.
If we can return to an even playing field, remove the international
subsidies, we can compete. We are finding commercial shipbuilding
coming back in this Nation, but it will only come back if we remove the
international subsidies. We cannot outcompete the Europeans and Korea
and Japan in the amount of subsidies that they will put forward to
their shipbuilding. We want a level playing field. This bill gives us
that level playing field.
If the Bateman amendment is adopted, we have lost this opportunity to
eliminate the international subsidies in this area. Let our communities
rebuild commercial shipbuilding. Support this legislation and vote
against the Bateman amendment.
Mr. CRANE. Mr. Chairman, I yield 2 minutes for purposes of control to
the gentleman from Florida [Mr. Gibbons].
The CHAIRMAN. Without objection, the gentleman from Florida [Mr.
Gibbons] will control 2 additional minutes.
There was no objection.
Mr. GIBBONS. Mr. Chairman, I thank the gentleman for yielding me that
time, and I yield 2 minutes to the gentleman from Michigan [Mr. Levin].
Mr. LEVIN. Mr. Chairman, I thank the distinguished chairman of the
subcommittee and to the ranking member of the Committee on Ways and
Means for yielding me this time.
Mr. Chairman, I just want to say a couple of words on this bill in
favor of it and against the proposed amendment. This is not a perfect
solution, but I think it is clear it is the best we are going to be
able to do under these circumstances, and the alternatives, really, are
quite a bit worse, unraveling this entire structure.
I mainly want to focus on a provision that has received very little
attention and it relates to what is called injurious pricing
mechanisms. We have fought long and hard in international agreements to
make sure that there are some strong antidumping provisions.
These provisions are most beneficial to companies in the United
States and their workers because it is the United States which has been
the place where other countries have tried to dump. We have had open
markets, and other countries have tried to take advantage of that.
This bill incorporates, in essence, the work that we have been doing
all these years to try to have a strong antidumping regimen. And as I
said, in this case, it is framed somewhat differently because we are
talking about ships, but the thrust of it is the same under the
terminology ``injurious pricing mechanism.''
So this is a step forward. It is the best we can do, and it is
surrounded by provisions that will try to prevent other countries
injuring our shipbuilding by essentially dumping or undercutting
through unfair price mechanisms.
Mr. Chairman, I urge support of the bill and opposition to the
amendment.
Mr. GIBBONS. Mr. Chairman, I yield myself 1 minute.
I regret that the debate is arranged such as it is today because I
would like to have had the gentleman from Virginia [Mr. Bateman] and
others participate in this debate so that we could respond to issues
that are bound to be raised. So let me raise some of the issues.
First of all, they will say that this agreement does not play fairly
with the United States. The United States had no subsidies or
practically had no subsidies when we entered into this agreement. In
1981, here on this floor in the Gramm-Latta amendment, we abolished
practically all the subsidies that could be found. One little subsidy
slipped through, that is the title XI subsidy. It just was not seen and
was not operative at that time, and we did not take any advantage of
it.
Because of the standstill arrangement in this agreement, we were able
to exploit the title XI subsidy and some small contracts were garnered
by some of the big navy yards in this country. But the big navy yards
are not really the huge commercial builders in this country. They
represent a very small part of the commercial capacity. The commercial
capacity and the Navy capacity is really somewhat different because of
specialization of labor and work.

So we face it today. The gentleman from Virginia [Mr. Bateman] is
trying to defend his big Navy yard. I do not blame him; I would too if
I had one of those things. But most of the commercial shipbuilders are
in non-Navy yards and they are the ones that will profit, along with
the yard that the gentleman from Virginia represents. It will also
profit from all of this arrangement if we can get it into position.
The problem is we have delayed so long, because of the legislative
process in Congress, getting this matter to the floor, all the other
nations have already ratified the agreement. We have had to seek
extension, and our extension runs out tomorrow, and this agreement is
in the best interest of the greatest number of Americans. We are having
to give up very little.
The gentleman from Virginia [Mr. Bateman] only wants to extend his
slight preference fore another 30 months. Sounds reasonable on its
face. The only trouble is the other nations of the world just do not
trust us. Every time we bring agreements to the floor for ratification,
we have to bring them under a fast track procedure or they will unravel
here on the floor.
This agreement was not brought back under a fast track arrangement
and, therefore, it is being unraveled on the floor by what looks like
harmless little amendments, and that is what the issue is here today.
All of the industrialized nations that build ships have already
served notice on us in writing that if we adopt the Bateman amendment
today this agreement is dead. Let me repeat that. All of the other
signatories to this pact have agreed to this proposal, and they have
served notice on us in writing that if we agree to the Bateman
amendment this whole agreement is dead.
We do not have any choice. And it would not be a good choice anyway,
because if the Bateman amendment ever becomes law the standstill
arrangement that is in this pact will have expired and other nations
can meet or match or better the Bateman subsidies. It will not work.
Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from
Massachusetts [Mr. Studds] for a colloquy.
Mr. STUDDS. Mr. Chairman, I want to engage the manager of the bill,
the distinguished gentleman from Illinois [Mr. Crane], for one moment.
When the agreement was negotiated, it was agreed that U.S.
shipbuilders would have a full 3 years to deliver vessels financed with
favorable lending terms under title XI. This is critical to many of our
shipyards, including one in my district. Since we are late in passing
implementing legislation, some have suggested our yards will have only
2 or 2.5 years to deliver the vessels.
I know the U.S. Trade Representative has taken steps to make sure
that our yards have a full 3 years from the effective date of the
agreement to deliver the so-called subsidized vessels. I wanted to
confirm that this is the understanding of the gentleman from Illinois
and that he can give us his assurance that he will do everything he can
to ensure U.S. yards have the 3-year delivery window.
Mr. CRANE. Mr. Chairman, will the gentleman yield?
Mr. STUDDS. I yield to the gentleman from Illinois.
Mr. CRANE. Mr. Chairman, my understanding is if before July 15 this
were to occur, that it would be in order, but that ultimately is an
administration decision, and I have no input whatsoever that they would
have any objections to that.
Mr. STUDDS. I appreciate that.
My second point is MarAd has a number of title XI applications in the
pipeline, ones submitted many months ago and are substantially
completed. Is it the gentleman's understanding that MarAd will be
allowed to offer the favorable terms, depending on title XI
applications which are substantially complete, and to work with me to
ensure that applications, such as that

[[Page H6298]]

from the Quincy shipyard, are eligible for the favorable terms before
the agreement enters into effect?
Mr. CRANE. That is my understanding. As I say, it would be an
administration interpretation, but I do not think there would be a
problem.
Mr. STUDDS. Mr. Chairman, I thank the gentleman, and I thank the
gentleman from Florida for the time.
Mr. CRANE. Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. The time of the gentleman from Florida [Mr. Gibbons]
has expired; the gentleman from Illinois [Mr. Crane] yields back the
balance of his time.
The gentleman from South Carolina [Mr. Spence] will be recognized for
15 minutes and the gentleman from California [Mr. Dellums] will be
recognized for 15 minutes.
The Chair recognizes the gentleman from South Carolina [Mr. Spence].
Mr. SPENCE. Mr. Chairman, I yield myself such time as I may consume.
(Mr. SPENCE asked and was given permission to revise and extend his
remarks.)
Mr. SPENCE. Mr. Chairman, now it is time to hear the other side of
the story. Today I rise to express my support not for the OECD
shipbuilding trade agreement, or H.R. 2754, but for the amendment that
will be offered by my colleague, the gentleman from Virginia [Mr.
Bateman].
H.R. 2754, the Shipbuilding Trade Agreement Act, would implement the
Organization for Economic Cooperation and Development, or OECD,
agreement on shipbuilding. This agreement, which was signed in December
1994 by the United States and other major shipbuilding countries,
eliminates most shipbuilding subsidies provided by signatory countries
to their shipbuilding industry or ship operators.

{time} 1115

The OECD agreement also includes provisions designed to eliminate
anticompetitive pricing practices which would have allowed some
countries to sell ships on the open market at unfairly low prices.
Many Members of the House, and certainly the Committee on National
Security, consider the base bill to be seriously flawed. Many believe
that the agreement negotiated by the administration contains loopholes
that will allow foreign shipyards to continue to receive subsidies,
while we will have abolished our successful loan guarantee program for
struggling U.S. shipbuilders.
Many believe that the OECD agreement does not give America's major
shipyards, most of which have primarily been in the business of
building U.S. Navy ships, sufficient time to transition form military
to commercial work.
Still others are concerned that the agreement will adversely affect
the Jones Act and could prevent shipyards from building vessels for
domestic shipping without penalty.
Finally, many are concerned that the existing OECD agreement does not
allow the United States adequate flexibility to protect its national
security interests and to exempt from the agreement ships that serve
military purposes. In short, many Members believe that the agreement
negotiated by the administration is seriously flawed.
The Bateman amendment, which was agreed to in the Committee on
National Security and enjoys strong bipartisan support, attempts to
correct many of the flaws I have described. In the debate ahead, the
gentleman from Virginia [Mr. Bateman] and others will address the
constructive fixes his amendment proposes for the title XI program, the
Jones Act, and important definitional issues. It is an important
amendment that deserves Members' attention and support.
Suffice it to say, Mr. Chairman, H.R. 2754 is a flawed bill that
would implement an imperfect agreement. Regardless of how Members feel
about voting on final passage of this bill, I strongly encourage my
colleagues to vote in favor of the Bateman amendment, which goes a long
way toward protecting our national security interests.
Mr. Chairman, I ask unanimous consent that I be permitted to yield
the remainder of my general debate time to the gentleman from Virginia
[Mr. Bateman] and that he be permitted to manage and control such
debate time.
The CHAIRMAN. Is there objection to the request of the gentleman from
South Carolina?
There was no objection.
Mr. DELLUMS. Mr. Chairman, I yield myself 7 minutes.
(Mr. DELLUMS asked and was given permission to revise and extend his
remarks.)
Mr. DELLUMS. Mr. Chairman, I too join the gentleman from Florida in
his concern with respect to the nature of this process. We were told
that the Committee on Ways and Means wanted to exercise their option to
debate on this matter for the first 30 minutes, otherwise this
gentleman would have been more than willing to engage in significant
debate because I think this is an important issue.
Obviously, the bill before us is designed to put the Congress in the
position to ratify an agreement, the purpose of which is to end
subsidies, Government subsidies, in the shipbuilding industry across
the world.
There have been great allusions to the amendment that will be offered
by the gentleman from Virginia [Mr. Bateman]. They have suggested that
in offering the amendment, the ratification of this amendment would
kill the agreement. Let us step back for a moment.
First of all, we believe that what we are being asked to agree to is
a flawed agreement. Congress does, indeed, have a role in this process
to ratify. Are we simply rubber stamps, or do we have the option to
exercise our intellectual and political responsibilities in this
matter? If we do, then it seems to me that it is perfectly within our
right and prerogatives to offer an amendment. Now, that is the nature
of the process, otherwise why have the agreement here?
We think that it is indeed flawed. The stakeholders in this issue,
the workers, the union people, the shipbuilders looked at this
agreement and said long term they agree with the purpose. But the
problem with this agreement is in the transition. We believe that the
U.S. shipbuilders have been grossly disadvantaged.
Now, we believe that in offering this amendment and accepting this
amendment, it would be not unlike many other exceptions and exemptions
from other countries, and I will point them out in a moment. If we pass
it, they will simply go back with the exception, exemption, and
renegotiate, because it is in the world's collective interest to stop
subsidies. Other countries, other governments do not wish to continue.
That is the imperative. That is the self-interest that will drive
everyone back.
Now, are we doing something different, Mr. Chairman, than any other
country? Example: Foreign governments were granted the following
subsidy packages and the authority to continue paying out existing
subsidies for ships delivered up until January 1, 1999: Spain, $1.4
billion in restructuring aid; Portugal, $110 million in restructuring
aid; Belgium, $74 million in restructuring aid; South Korea,
restructuring aid amount unknown, but based on information we have
received it includes the $750 million plus government bailout of Daeoo
Shipyard begun in 1990.

With respect to France, unknown at this time in terms of the overall
amount, but special offers are currently being made by other Members of
the European Community to gain France's support for the agreement;
minimally, $480 million. Germany: Germany has a package for exemption.
Germany's package to modernize, restructure and cover the loss of the
shipyards in former East Germany, we believe that that figure adds up
to approximately $4 billion.
So, what the United States is asking in comparison to these other
countries, they went back in, Mr. Chairman, and renegotiated these
exceptions and these exemptions. Title XI did not just happen; it just
did not sneak in through the back-door. The distinguished gentleman
from Mississippi [Mr. Taylor] and this gentleman, during the time when
this party was in control of the Congress, put $50 million in loan
guarantees in title XI because we saw that we cannot specialize in
these shipyards because not enough work is being done.
So we took DOD money, put it into loan guarantees, leveraged it. Do
my colleagues know what happened? Shipbuilding began on a commercial
level in this country unprecedented in the last one or two decades.

[[Page H6299]]

Now, Mr. Chairman, we are simply saying that we would like to be on a
level playing field. Ultimately, let us end all subsidies, but in the
transition give us the opportunity to make the transition correctly.
Leave title XI in for 3 years. That simply puts us on a level playing
field, not only at the end of the day but in the transition period.
Now, we need to understand Mr. Chairman, 90 percent of the American
workers in this country work in the top six shipyards in America. So if
my colleagues care about working-class people, if they care about the
working people in this country, they work in the top six yards in
America.
There is no such thing anymore as specialized shipbuilding. We do not
do as much. At one point we were moving toward a 600-ship Navy. The
cold war is over, the military budget is coming down, and we are
battling over how fast and how deep that it does come down.
Shipbuilding is coming down in terms of military activity, so where do
we have to balance that out? With commercial development.
We simply say at the end of the day, my conclusion is this. We are
simply asking for what other signatories went in and renegotiated. This
is not going to kill this agreement. It is in everybody's interest to
get to the table.
We are simply saying let us not be fools. Let us go in intelligently,
with our self-interest involved, and let us make this decision here.
That is what our responsibility is. We have a fiduciary responsibility
to the American people. Let us carry it out. If the other countries do
not particularly like this, then let us ask them, ``Why did you ratify
these other exceptions?'' They will not do it. They will come back to
the table because it is in their self-interest.
Mr. Chairman, I hope my colleagues will support the Bateman
amendment. Without it, it seems that this agreement is not supportable.
Mr. Chairman, I reserve the balance of my time.
Mr. BATEMAN. Mr. Chairman, I yield myself 3 minutes.
Mr. Chairman, I would like to first associate myself with the
splendid remarks of the gentleman from California [Mr. Dellums], who I
think has very well articulated what is before the House today. Let me
say, in order to try and reinforce and to place this debate in context,
that I heard today that the amendments which I will offer are
reasonable and they are modest, and yet I am told that we will unravel
the agreement if this House, in pursuit of what it conceives to be
sound public policy for the United States of America, were to adopt
those amendments.
This presumably is a meaningful process. If this agreement is flawed,
and I put it to my colleagues that it is very seriously flawed, then we
should not approve it and implement it.
Mr. Chairman, I am not asking this House to reject this amendment. I
am asking this House to adopt amendments which would remove the flaws
and the warps from this agreement so that it at least is arguably in
the best interest of the people of the United States and our national
security.
To do less, Mr. Chairman, would in my view be an abdication of our
responsibility. Much has been said about how long this agreement was in
process of negotiation. I think there is something that needs to be
said about that.
During the course of the Bush administration, no agreement could be
struck, and the reason it could not be struck is because there was an
insistence on the part of this country that we protect and preserve the
Jones Act for our domestic internal trade.
This agreement does not protect the Jones Act, as least according to
all of the people who have said my amendment undermines the agreement,
because we make it explicit by my amendment that the Jones Act shall
not be affected because that is what the U.S. Trade Representative told
us.
But now even they are saying the Bateman amendment, by making it
explicit that the Jones Act will be protected, is going to unravel the
agreement. This is not a treaty or an agreement that I think has been
dealt with very uprightly in terms of what it does and does not
include. Clearly, we should insist through my amendment that we
preserve the Jones Act inviolate.
To say that we should have no interim transition provisions
protecting our shipbuilding is, I think, again a terrible mistake,
especially when we look at it in the context that has been pointed out,
that numerous other parties who are signatories to this agreement were
taken care of by transition provisions for their shipyards while we
have none.
Our trade representative came back after he signed this agreement in
December and admitted to me that they had not even sought any
transition provisions for this country's shipbuilders, even though the
other parties to this agreement had been subsidized to the tune of as
much as $8 billion a year when we were not subsidizing at all, and yet
they sought no concession or transition provision for American
shipbuilders.
Mr. Chairman, that is why this agreement is flawed. That is why it
needs the amendments.
Mr. Chairman, I reserve the balance of my time.
Mr. BATEMAN. Mr. Chairman, I yield 3 minutes to the gentleman from
Tennessee [Mr. Quillen].
Mr. QUILLEN. Mr. Chairman, I thank the gentleman for yielding.
Mr. Chairman, I rise in support of the National Security Committee
amendment to H.R. 2754. The amendment offered by the National Security
Committee will mitigate the damage this shipbuilding trade agreement
will have on our national security interests and our defense
shipbuilding industrial base. No commercial trade agreement should
place restrictions on our domestic Jones Act trade. The Jones Act fleet
and the industrial base sustained through construction of ships for
this trade is an essential arm of our military in a contingency.
During the Gulf war, shipyards worked around the clock to activate
moth-balled ships to transport our tanks and helicopters to our forward
deployed troops, and the mariners who operated our Jones Act fleet in
peacetime were called upon to crew these military reserve vessels. The
Department of Defense has stated that the Jones Act is essential to our
national security interests. The House National Security Committee
amendment will ensure that the Jones Act ship construction and
operating requirement is not jeopardized by this agreement.
It will also clarify that noncombatant military auxiliary and sealift
ships are not covered by this agreement. No commercial trade agreement
should restrict the U.S. Department of Defense from procuring surge and
prepositioning sealift ships needed to meet our Army and Marine Corps
requirements. This was not the intent of these negotiations; however,
this will be the case unless the National Security Committee amendment
is passed.
I also support the 30-month extension of our title XI ship loan
guarantee program which has enabled our navy shipbuilders to transition
back into the business of building large ocean-going commercial ships.
This commercial work has created 4,000 jobs in our shipyards, and
helped to sustain our critical Navy shipbuilding base during a
historical low in Navy shipbuilding orders. This limited extension of
title XI is very modest compared to the 3- and 4-year transition
subsidies granted to foreign signatories of this trade agreement--
subsidies above and beyond their already massive subsidies.
I urge my colleagues to vote for the National Security Committee
amendment.

{time} 1130

The CHAIRMAN. The Chair advises that the gentleman from Virginia [Mr.
Bateman] has 5\1/2\ minutes remaining, and the gentleman from
California [Mr. Dellums] has 8 minutes remaining.
Mr. DELLUMS. Mr. Chairman, I yield 4 minutes to the distinguished
gentleman from Mississippi [Mr. Taylor].
Mr. TAYLOR of Mississippi. Mr. Chairman, I thank the distinguished
Member for yielding the time.
No one comes here to increase the deficit. No one comes here to
dismantle America's might. But just last night, the new majority voted
for a budget for the next 2 years that increases the annual operating
deficit and in turn the national debt. Today we are going to have a
choice of whether or not we are going to dismantle America's industrial
might. I have to my left, and I hope the television camera can show

[[Page H6300]]

this, one of the 66 jewels of America's industrial might. It is so huge
that this 990-foot warship appears to be but a toy when compared to
that overall industrial facility. It is called Ingalls Shipbuilding and
is one of the six remaining shipyards in America that build ships to
defend our country.
This agreement would preclude any chance Ingalls Shipbuilding ever
has of in the long run staying in business. And that is what it comes
down to. You see, as mentioned before, during the Reagan years there
was talk of a 600-ship Navy and therefore people like Ingalls and
Newport News would have plenty of work building those ships. We are now
looking at a 150-ship Navy, which means there is not work for all six
of them. If we do not find commercial work for those yards, they will
simply go out of business. Why is that important?
This island nation during World War II had to build 16,000 ships to
save itself from Japan and Nazi Germany. We are now down to what will
be in the near future a 150-ship fleet so, if we lose our ability in
the meantime between wars to do some commercial work, those yards will
not be around. If you had to start this yard from scratch, you would
have to find $800 million. That just is not going to happen.
So why is the agreement bad? The agreement is bad because we are
counting on about 20 other nations to quit subsidizing their yards
unilaterally. It is not going to happen. It has not happened. Even
today in the Journal of Commerce, here is the story, that the Danes,
even before the ink on this agreement is dry, are already cheating on
this agreement. The reason the Danes say that they are cheating is
because the Germans are cheating.
So we are being asked by the Committee on Ways and Means to
unilaterally disarm, to give away the ability of our Nation to defend
itself in future wars. So the Committee on Ways and Means can proudly
proclaim that they have passed another failed trade agreement. May I
remind them of their tremendous success of NAFTA? May I invite the
Committee on Ways and Means to come to Lucedale, MS, or to Hattiesburg,
MS, or Poplarville, MS, and go to the cattle auction and see the
cattlemen who cry because they are selling their calves for one-half of
the price that they were just 3 years ago before NAFTA. Or maybe once
again to go to Lumberton, MS, or Poplarville, MS or Wiggins, MS or
Neely, MS, or Gulfport, MS and visit the empty garment plants where
thousands of people have been laid off as a direct result of NAFTA. In
Neely, MS, when you lose your job, job retraining does not matter
because there is no other factory in Neely, MS. The only business in
town shut down.

So based on the success of NAFTA and our ability to pass an agreement
that hurts only us and helps only our competitors, we want to do this
again, except this time we want to do it with regard to national
defense. We want to take the magnificent machine built up over the
course of the past century, first by Democrats like FDR and later by
Republicans like Ronald Reagan and George Bush, and we want to put it
out of business so that when the next war comes we will not have a
yard. And maybe if we are lucky, the Germans will sell us a ship. Maybe
if we are lucky the Japanese will sell us a ship. But maybe if we are
not lucky, they will be on the other side. Then what do we do?
The great powers of the world have always been great manufacturers,
and they have been great maritime powers. Those two things go hand in
hand during the course of recorded history. With NAFTA, we have given
away a lot of our manufacturing might. With this agreement, they are
trying to give away our maritime might, what is left of it, and our
ability to get back in the business.
Title XI works. It is a loan guarantee program that works. We are
building ships in this country, and now they are saying, let us take it
away. The gentleman from Virginia [Mr. Bateman] is saying, let us slow
that down a little bit.
I encourage Members to vote for the Bateman amendment. At the very
least it will slow it down a little bit. And then I encourage Members
to vote against this entire agreement because we do not need to give up
our sovereignty to 20 other countries to tell us where and when we can
invest in the industrial might of this Nation.
Mr. BATEMAN. Mr. Chairman, I yield 3 minutes to the gentleman from
California [Mr. Hunter].
Mr. HUNTER. Mr. Chairman, I want to thank the distinguished gentleman
from Virginia for yielding to me. I want to note to my colleagues in
the full committee and all the Members that this is one of those
occasions, as you can see with respect to this substitute amendment,
there is solidarity in the Committee on National Security, on the
Democrat side, on the Republican side, on all shades of the political
spectrum. This is the reason: No matter how much we disagree about
weapons systems and about strategies and about budget numbers, we all
agree on one thing, one fact that comes home to us every time we have a
conflict. When we move out to project American power, we carry that
power, whether it is marines or soldiers or ammunition or aircraft and
all the logistics that you have to take to a foreign place to fight a
war on ships.
In Desert Storm we carried 95 percent of our war materiel on ships,
not on airplanes, and everybody knows that. The gentleman from
California [Mr. Dellums] knows that. The gentleman from South Carolina
[Mr. Spence] knows that. Every member of the committee knows that.
Every Member of the House knows that. With respect to our ability to
move to change this amendment, all of our allies know that. All of the
signatories of this agreement know that.
South Korea is not going to complain because we want to maintain our
shipbuilding base. South Korea exists because we had a shipbuilding
base. We saved them as the North Koreans were driving down the Korean
Peninsula and the Chinese shortly thereafter because we were able to
move an American blocking force in there, hold the line and gradually
push it back.
Our European allies are not going to complain because two times in
this century we have saved Europe with American ships carrying American
personnel and war materiel. Our allies who depended on the lifeline in
the Gulf war understand that, while we had to rely on rent-a-ships in
that case, 95 percent of the American equipment that was carried to
that war was carried on ships.
Now, this bill, if it is not amended by the national security
substitute, is going to do some bad things because theoretically it
excludes military construction but it reserves for foreign judges the
definition of what is a military program. It warns us against
``disguising commercial shipbuilding in military programs.'' That means
somebody else is going to be interpreting what is an American military
program.
Is a prepositioning ship an American military program or just another
way to have commercial cargo or to have logistics that you might be
taking on a rent-a-ship? Is that an American military program? In the
WTO we are now seeing these decisions come home where they have
enforced Brazil's right to send dirty gas into the United States
because foreign judges have said American environmental laws are
invalid. We have seen the problem with giving to foreign judges the
right to arbitrate and to determine what is an American military
program.
Let me urge all of my colleagues to support the national security
position on this and vote against the full bill on final passage.
Mr. DELLUMS. Mr. Chairman, I yield myself the balance of my time.
The CHAIRMAN. The gentleman from California [Mr. Dellums] is
recognized for 4 minutes.
Mr. DELLUMS. Mr. Chairman, the bill, H.R. 2754, provides the Congress
of the United States with the opportunity to ratify an agreement, the
purpose of which is to end government subsidies in shipbuilding. I
believe that it is in the interest of the shipbuilding industry and in
the interest of the American worker and ultimately the American people
that we ratify a treaty, the purpose of which is to end Government
subsidies. That is indeed in our interest.
I would like to take this opportunity to applaud the gentleman from
Florida [Mr. Gibbons], who has perhaps beyond any other Member of this
body worked tirelessly to get such an agreement because he had the
wisdom and the vision to understand that it is indeed in the

[[Page H6301]]

interest of the United States to end Government subsidy. For that, I
applaud the gentleman. I am one of the gentleman's greatest fans.
My point of departure today with my distinguished colleague is very
simple and very straightforward. I believe that the agreement is flawed
in its transition implications. We are simply saying that we need to
put the United States in a better position in this transition period,
as we move from a heavy reliance on military dollars, building hundreds
of military ships, to building commercial ships.

As I look at the experience around this agreement, I have come to the
startling realization but the comforting realization that other
countries saw problems in the transition and sought exemptions and
exceptions prior to signing the agreement that would allow them to step
forward and then sign the agreement.
I believe that the notion that if the Bateman amendment passed that
it would kill the agreement is hyperbole. But I have been here going on
26 years, and I know how we can engage in hyperbole in this
institution. The amendment will kill the bill. But that is hyperbole,
and I love the Members that say it, but we often practice overstatement
and hyperbole.
You have to be bright enough to cut through the weed and get to the
real issue. It is not going to kill this agreement, because it is in
the world's collective interest to end government subsidies. That
imperative and that imperative alone will drive everybody back to the
table.
If we pass this agreement, the world is not going to step back and
say, well, you guys are going to do this, I am going to spend $2
billion a year subsidizing shipbuilding. That is bizarre, extreme and
absurd. What they will do is sit down and try to work it out. That is
all we are simply saying.

{time} 1145

Finally, as I said in my opening remarks, if the Congress did not
have any role, then why are we here to ratify it? And I think our role
should go beyond simply rubber stamping when we believe substantively,
economically, politically and intellectually that there is something
wrong with the agreement. Working people in this country looked at it
and said it is flawed in the transition. Shipbuilding people looked at
it and said it is flawed in its transition. These are two major
stakeholders who believe ultimately that we ought to end government
subsidy.
So we stepped up to the plate and said, ``Let's correct it, let's
clarify on the Jones Act, let's clarify some boilerplate language with
respect to national security issues.
That is all this amendment does. I urge my colleagues to listen
carefully to the debate around the Bateman amendment, not be guided by
hyperbole and overstatement, and look at the facts, and I believe that
they will come to the conclusion that we are correct. Adopt the Bateman
amendment, and go forward to pass H.R. 2754, as amended.
Mr. BATEMAN. Mr. Chairman, I yield 2 minutes to the gentleman from
Maine [Mr. Longley].
Mr. LONGLEY. Mr. Chairman, the reason we are debating these
amendments to this trade agreement today is that we are seeking at
least some element of fairness to our shipbuilders. The reason we are
debating these amendments is that we believe it is important to
maintain these critical manufacturing jobs that shipbuilding and the
supplier base provides. The reason we are debating these amendments is
that many of us fear this trade agreement will be like so many before
it--one that is unfair to the United States and that will send these
jobs to other countries.
But let us not lose sight of the most important reason we are
debating these amendments: and that is, that we are concerned about the
national security of this country. You see, we have gotten to the point
where the shipbuilding industrial base that embodies the critical
skills and facilities needed to produce our Navy's ships has shrunken
to just six shipyards and 70,000 employees. These same shipyards are
the ones that have historically produced most of the large, oceangoing
ships built in this country for both our domestic and international
trades. Commercial shipbuilding has always been essential to helping
level out the valleys when the government's purchase of ships has
declined.
We are at this very moment considering Navy shipbuilding budgets that
are the lowest in over 40 years! And while the Congress is attempting
to increase that level slightly, the numbers of ships being ordered by
the Navy are simply not sufficient to sustain the bare minimum
shipbuilding base we now have. And if we are going to even come close
to maintaining the 346-ship Navy that forms the basis of our current
warfighting strategy, we are going to ask these same shipbuilders a few
years from now to increase their rate of shipbuilding to two to three
times what it is today.
Even with these amendments, we are perilously close to signing away
our capability to ensure economic and national security through our
shipbuilding industrial base.
I urge my colleagues to join me in voting for jobs and for national
security. Vote for the National Security Committee amendments.
Mr. BATEMAN. Mr. Chairman, I yield myself the 30 seconds remaining
only to remind the Members of the House that the six major shipyards
who are diametrically opposed to this agreement in its present form
represent 300,000 jobs at their shipyards and in the companies that
service and work with them. This is over 90 percent of all the workers
engaged in ship construction in the United States, and these shipyards
build 98 percent of all ships for the United States Navy. We are
speaking not just for those shipyards, but for all of the unions and
the workers who are employed in those shipyards and for whom my
amendments to this bill are extremely significant and are very
intensely supported by those people.
Mr. BLILEY. Mr. Chairman, I rise in support of the efforts of the
gentleman from Virginia [Mr. Bateman] regarding our Nation's
shipbuilding industrial base by ensuring that industry's success in its
endeavor to participate in commercial shipbuilding on the international
level. I speak on this matter to support my colleague, and to note my
interest as chairman of the Committee on Commerce in the issue of
dumping.
In support of my colleague, I signed a letter delineating the problem
created by the OECD Shipbulding Agreement that H.R. 2754 would
implement. The agreement fails to remedy the historical advantage
foreign shipbuilders have maintained over the U.S. shipbuilding
industry through government subsidies. Although the agreement does
eliminate certain aspects of foreign government subsidies, it still
does not place U.S. shipbuilders on equal footing with foreign
shipbuilders in the international market. Therefore, I support Mr.
Bateman's efforts to create an even playing field.
My interest in the matter as chairman of the Committee on Commerce
stems from my committee's extensive work in the area of trade. H.R.
2754 would add a new title, ``Title VIII--Injurious Pricing and
Countermeasures Relating to Shipbuilding'' to the Tariff Act of 1930,
The new title VIII would provide a mechanism, tailored to the unique
situation of the shipbuilding industry, to address concerns regarding
the practice of dumping--selling goods, in this case ships, for less
than their fair value.
Without recounting the lengthy history of my committee's work in the
area of trade, I will point out just a few previous legislative
initiatives--focusing on the 100th Congress--that addressed dumping.
During the 100th Congress, at least four trade measures considered by
the Commerce Committee were incorporated into the Omnibus Trade Reform
Act of 1988. Although other measures included provisions on the issue
of dumping, H.R. 268--notably--addressed only the issue of dumping.
Through that measure, my committee and others sought to amend the
Tariff Act of 1930 ``to provide private remedies for injury caused by
unfair foreign competition and violations of certain customs fraud
provisions.''
Just as H.R. 268 establishes remedies where an article ``is imported
or sold within the United States at a United States price which is less
than the foreign market value or constructed value of such article,''
H.R. 2754 provides for remedies where ``a foreign vessel has been sold
directly or indirectly to one or more United States buyers at less than
its fair value.'' Therefore, my interest in this measure is twofold.
First, I want to support my colleague Mr. Bateman; and second, I want
to express my committee's jurisdictional interest in the dumping
provisions of this measure. Based on my committee's lengthy history of
work in the area of trade, and on the issue of dumping. I would like to
note our intent to continue in the exercise of our authority in these
areas.

[[Page H6302]]

The CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the amendment in the nature of a substitute,
recommended by the Committee on Ways and Means, modified by the
amendment printed in part 1 of House Report 104-606, is considered as
an original bill for the purpose of amendment and is considered read.
The text of the committee amendment in the nature of a substitute, as
modified, is as follows:

H.R. 2754

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 ``Shipbuilding Trade Agreement
Act''.

SEC. 2. APPROVAL OF THE SHIPBUILDING AGREEMENT.

The Congress approves The Agreement Respecting Normal
Competitive Conditions in the Commercial Shipbuilding and
Repair Industry (hereafter in this Act referred to as the
``Shipbuilding Agreement''), a reciprocal trade agreement
which resulted from negotiations under the auspices of the
Organization for Economic Cooperation and Development, and
was entered into on December 21, 1994.

SEC. 3. EFFECTIVE DATE.

This Act and the amendments made by this Act take effect on
the date that the Shipbuilding Agreement enters into force
with respect to the United States.
TITLE I--INJURIOUS PRICING AND COUNTERMEASURES

SEC. 101. INJURIOUS PRICING AND COUNTERMEASURES PROCEEDINGS.

The Tariff Act of 1930 is amended by adding at the end the
following new title:
``TITLE VIII--INJURIOUS PRICING AND COUNTERMEASURES RELATING TO
SHIPBUILDING

``Subtitle A--Injurious Pricing Charge and Countermeasures

``Sec. 801. Injurious pricing charge.
``Sec. 802. Procedures for initiating an injurious pricing
investigation.
``Sec. 803. Preliminary determinations.
``Sec. 804. Termination or suspension of investigation.
``Sec. 805. Final determinations.
``Sec. 806. Imposition and collection of injurious pricing charge.
``Sec. 807. Imposition of countermeasures.
``Sec. 808. Injurious pricing petitions by third countries.

``Subtitle B--Special Rules

``Sec. 821. Export price.
``Sec. 822. Normal value.
``Sec. 823. Currency conversion.

``Subtitle C--Procedures

``Sec. 841. Hearings.
``Sec. 842. Determinations on the basis of the facts available.
``Sec. 843. Access to information.
``Sec. 844. Conduct of investigations.
``Sec. 845. Administrative action following shipbuilding agreement
panel reports.

``Subtitle D--Definitions

``Sec. 861. Definitions.
``Subtitle A--Injurious Pricing Charge and Countermeasures

``SEC. 801. INJURIOUS PRICING CHARGE.

``(a) Basis for Charge.--If--
``(1) the administering authority determines that a foreign
vessel has been sold directly or indirectly to one or more
United States buyers at less than its fair value, and
``(2) the Commission determines that--
``(A) an industry in the United States--
``(i) is or has been materially injured, or
``(ii) is threatened with material injury, or
``(B) the establishment of an industry in the United States
is or has been materially retarded,

by reason of the sale of such vessel, then there shall be
imposed upon the foreign producer of the subject vessel an
injurious pricing charge, in an amount equal to the amount by
which the normal value exceeds the export price for the
vessel. For purposes of this subsection and section
805(b)(1), a reference to the sale of a foreign vessel
includes the creation or transfer of an ownership interest in
the vessel, except for an ownership interest created or
acquired solely for the purpose of providing security for a
normal commercial loan.
``(b) Foreign Vessels Not Merchandise.--No foreign vessel
may be considered to be, or to be part of, a class or kind of
merchandise for purposes of subtitle B of title VII.

``SEC. 802. PROCEDURES FOR INITIATING AN INJURIOUS PRICING
INVESTIGATION.

``(a) Initiation by Administering Authority.--
``(1) General rule.--Except in the case in which subsection
(d)(6) applies, an injurious pricing investigation shall be
initiated whenever the administering authority determines,
from information available to it, that a formal investigation
is warranted into the question of whether the elements
necessary for the imposition of a charge under section 801(a)
exist, and whether a producer described in section 861(17)(C)
would meet the criteria of subsection (b)(1)(B) for a
petitioner.
``(2) Time for initiation by administering authority.--An
investigation may only be initiated under paragraph (1)
within 6 months after the time the administering authority
first knew or should have known of the sale of the vessel.
Any period in which subsection (d)(6)(A) applies shall not be
included in calculating that 6-month period.
``(b) Initiation by Petition.--
``(1) Petition requirements.--(A) Except in a case in which
subsection (d)(6) applies, an injurious pricing proceeding
shall be initiated whenever an interested party, as defined
in subparagraph (C), (D), (E), or (F) of section 861(17),
files a petition with the administering authority, on behalf
of an industry, which alleges the elements necessary for the
imposition of an injurious pricing charge under section
801(a) and the elements required under subparagraph (B), (C),
(D), or (E) of this paragraph, and which is accompanied by
information reasonably available to the petitioner supporting
those allegations and identifying the transaction concerned.
``(B)(i) If the petitioner is a producer described in
section 861(17)(C), and--
``(I) if the vessel was sold through a broad multiple bid,
the petition shall include information indicating that the
petitioner was invited to tender a bid on the contract at
issue, the petitioner actually did so, and the bid of the
petitioner substantially met the delivery date and technical
requirements of the bid,
``(II) if the vessel was sold through any bidding process
other than a broad multiple bid and the petitioner was
invited to tender a bid on the contract at issue, the
petition shall include information indicating that the
petitioner actually did so and the bid of the petitioner
substantially met the delivery date and technical
requirements of the bid, or
``(III) except in a case in which the vessel was sold
through a broad multiple bid, if there is no invitation to
tender a bid, the petition shall include information
indicating that the petitioner was capable of building the
vessel concerned and, if the petitioner knew or should have
known of the proposed purchase, it made demonstrable efforts
to conclude a sale with the United States buyer consistent
with the delivery date and technical requirements of the
buyer.
``(ii) For purposes of clause (i)(III), there is a
rebuttable presumption that the petitioner knew or should
have known of the proposed purchase if it is demonstrated
that--
``(I) the majority of the producers in the industry have
made efforts with the United States buyer to conclude a sale
of the subject vessel, or
``(II) general information on the sale was available from
brokers, financiers, classification societies, charterers,
trade associations, or other entities normally involved in
shipbuilding transactions with whom the petitioner had
regular contacts or dealings.
``(C) If the petitioner is an interested party described in
section 861(17)(D), the petition shall include information
indicating that members of the union or group of workers
described in that section are employed by a producer that
meets the requirements of subparagraph (B) of this paragraph.
``(D) If the petitioner is an interested party described in
section 861(17)(E), the petition shall include information
indicating that a member of the association described in that
section is a producer that meets the requirements of
subparagraph (B) of this paragraph.
``(E) If the petitioner is an interested party described in
section 861(17)(F), the petition shall include information
indicating that a member of the association described in that
section meets the requirements of subparagraph (C) or (D) of
this paragraph.
``(F) The petition may be amended at such time, and upon
such conditions, as the administering authority and the
Commission may permit.
``(2) Simultaneous filing with commission.--The petitioner
shall file a copy of the petition with the Commission on the
same day as it is filed with the administering authority.
``(3) Deadline for filing petition.--
``(A) Deadline.--(i) A petitioner to which paragraph (1)(B)
(i) or (ii) applies shall file the petition no later than the
earlier of--
``(I) 6 months after the time that the petitioner first
knew or should have known of the sale of the subject vessel,
or
``(II) 6 months after delivery of the subject vessel.
``(ii) A petitioner to which paragraph (1)(B)(iii) applies
shall--
``(I) file the petition no later than the earlier of 9
months after the time that the petitioner first knew or
should have known of the sale of the subject vessel, or 6
months after delivery of the subject vessel, and
``(II) submit to the administering authority a notice of
intent to file a petition no later than 6 months after the
time that the petitioner first knew or should have known of
the sale (unless the petition itself is filed within that 6-
month period).
``(B) Presumption of knowledge.--For purposes of this
paragraph, if the existence of the sale, together with
general information concerning the vessel, is published in
the international trade press, there is a rebuttable
presumption that the petitioner knew or should have known of
the sale of the vessel from the date of that publication.
``(c) Actions Before Initiating Investigations.--
``(1) Notification of governments.--Before initiating an
investigation under either subsection (a) or (b), the
administering authority shall notify the government of the
exporting country of the investigation. In the case of the
initiation of an investigation under subsection (b), such
notification shall include a public version of the petition.
``(2) Acceptance of communications.--The administering
authority shall not accept any unsolicited oral or written
communication from any person other than an interested party
described in section 861(17)(C), (D), (E), or (F) before the
administering authority makes its decision whether to
initiate an investigation pursuant to a petition, except for
inquiries regarding

[[Page H6303]]

the status of the administering authority's consideration of
the petition or a request for consultation by the government
of the exporting country.
``(3) Nondisclosure of certain information.--The
administering authority and the Commission shall not disclose
information with regard to any draft petition submitted for
review and comment before it is filed under subsection
(b)(1).
``(d) Petition Determination.--
``(1) Time for initial determination.--(A) Within 45 days
after the date on which a petition is filed under subsection
(b), the administering authority shall, after examining, on
the basis of sources readily available to the administering
authority, the accuracy and adequacy of the evidence provided
in the petition, determine whether the petition--
``(i) alleges the elements necessary for the imposition of
an injurious pricing charge under section 801(a) and the
elements required under subsection (b)(1)(B), (C), (D), or
(E), and contains information reasonably available to the
petitioner supporting the allegations; and
``(ii) determine if the petition has been filed by or on
behalf of the industry.
``(B) Any period in which paragraph (6)(A) applies shall
not be included in calculating the 45-day period described in
subparagraph (A).
``(2) Affirmative determinations.--If the determinations
under clauses (i) and (ii) of paragraph (1)(A) are
affirmative, the administering authority shall initiate an
investigation to determine whether the vessel was sold at
less than fair value, unless paragraph (6) applies.
``(3) Negative determinations.--If--
``(A) the determination under clause (i) or (ii) of
paragraph (1)(A) is negative, or
``(B) paragraph (6)(B) applies,

the administering authority shall dismiss the petition,
terminate the proceeding, and notify the petitioner in
writing of the reasons for the determination.
``(4) Determination of industry support.--
``(A) General rule.--For purposes of this subsection, the
administering authority shall determine that the petition has
been filed by or on behalf of the domestic industry, if--
``(i) the domestic producers or workers who support the
petition collectively account for at least 25 percent of the
total capacity of domestic producers capable of producing a
like vessel, and
``(ii) the domestic producers or workers who support the
petition collectively account for more than 50 percent of the
total capacity to produce a like vessel of that portion of
the domestic industry expressing support for or opposition to
the petition.
``(B) Certain positions disregarded.--In determining
industry support under subparagraph (A), the administering
authority shall disregard the position of domestic producers
who oppose the petition, if such producers are related to the
foreign producer or United States buyer of the subject
vessel, or the domestic producer is itself the United States
buyer, unless such domestic producers demonstrate that their
interests as domestic producers would be adversely affected
by the imposition of an injurious pricing charge.
``(C) Polling the industry.--If the petition does not
establish support of domestic producers or workers accounting
for more than 50 percent of the total capacity to produce a
like vessel--
``(i) the administering authority shall poll the industry
or rely on other information in order to determine if there
is support for the petition as required by subparagraph (A),
or
``(ii) if there is a large number of producers in the
industry, the administering authority may determine industry
support for the petition by using any statistically valid
sampling method to poll the industry.
``(D) Comments by interested parties.--Before the
administering authority makes a determination with respect to
initiating an investigation, any person who would qualify as
an interested party under section 861(17) if an investigation
were initiated, may submit comments or information on the
issue of industry support. After the administering authority
makes a determination with respect to initiating an
investigation, the determination regarding industry support
shall not be reconsidered.
``(5) Definition of domestic producers or workers.--For
purposes of this subsection, the term `domestic producers or
workers' means interested parties as defined in section
861(17)(C), (D), (E), or (F).
``(6) Proceedings by wto members.--The administering
authority shall not initiate an investigation under this
section if, with respect to the vessel sale at issue, an
antidumping proceeding conducted by a WTO member who is not a
Shipbuilding Agreement Party--
``(A) has been initiated and has been pending for not more
than one year, or
``(B) has been completed and resulted in the imposition of
antidumping measures or a negative determination with respect
to whether the sale was at less than fair value or with
respect to injury.
``(e) Notification to Commission of Determination.--The
administering authority shall--
``(1) notify the Commission immediately of any
determination it makes under subsection (a) or (d), and
``(2) if the determination is affirmative, make available
to the Commission such information as it may have relating to
the matter under investigation, under such procedures as the
administering authority and the Commission may establish to
prevent disclosure, other than with the consent of the party
providing it or under protective order, of any information to
which confidential treatment has been given by the
administering authority.

``SEC. 803. PRELIMINARY DETERMINATIONS.

``(a) Determination by Commission of Reasonable Indication
of Injury.--
``(1) General rule.--Except in the case of a petition
dismissed by the administering authority under section
802(d)(3), the Commission, within the time specified in
paragraph (2), shall determine, based on the information
available to it at the time of the determination, whether
there is a reasonable indication that--
``(A) an industry in the United States--
``(i) is or has been materially injured, or
``(ii) is threatened with material injury, or
``(B) the establishment of an industry in the United States
is or has been materially retarded,

by reason of the sale of the subject vessel. If the
Commission makes a negative determination under this
paragraph, the investigation shall be terminated.
``(2) Time for commission determination.--The Commission
shall make the determination described in paragraph (1)
within 90 days after the date on which the petition is filed
or, in the case of an investigation initiated under section
802(a), within 90 days after the date on which the Commission
receives notice from the administering authority that the
investigation has been initiated.
``(b) Preliminary Determination by Administering
Authority.--
``(1) Period of injurious pricing investigation.--(A) The
administering authority shall make a determination, based
upon the information available to it at the time of the
determination, of whether there is a reasonable basis to
believe or suspect that the subject vessel was sold at less
than fair value.
``(B) If cost data is required to determine normal value on
the basis of a sale of a foreign like vessel that has not
been delivered on or before the date on which the
administering authority initiates the investigation, the
administering authority shall make its determination within
160 days after the date of delivery of the foreign like
vessel.
``(C) If normal value is to be determined on the basis of
constructed value, the administering authority shall make its
determination within 160 days after the date of delivery of
the subject vessel.
``(D) In cases in which subparagraph (B) or (C) does not
apply, the administering authority shall make its
determination within 160 days after the date on which the
administering authority initiates the investigation under
section 802.
``(E) In no event shall the administering authority make
its determination before an affirmative determination is made
by the Commission under subsection (a).
``(2) De minimis injurious pricing margin.--In making a
determination under this subsection, the administering
authority shall disregard any injurious pricing margin that
is de minimis. For purposes of the preceding sentence, an
injurious pricing margin is de minimis if the administering
authority determines that the margin is less than 2 percent
of the export price.
``(c) Extension of Period in Extraordinarily Complicated
Cases or for Good Cause.--
``(1) In general.--If--
``(A) the administering authority concludes that the
parties concerned are cooperating and determines that--
``(i) the case is extraordinarily complicated by reason
of--

``(I) the novelty of the issues presented, or

``(II) the nature and extent of the information required,
and

``(ii) additional time is necessary to make the preliminary
determination, or
``(B) a party to the investigation requests an extension
and demonstrates good cause for the extension,

then the administering authority may postpone the time for
making its preliminary determination.
``(2) Length of postponement.--The preliminary
determination may be postponed under paragraph (1)(A) or (B)
until not later than the 190th day after--
``(A) the date of delivery of the foreign like vessel, if
subsection (b)(1)(B) applies,
``(B) the date of delivery of the subject vessel, if
subsection (b)(1)(C) applies, or
``(C) the date on which the administering authority
initiates an investigation under section 802, in a case in
which subsection (b)(1)(D) applies.
``(3) Notice of postponement.--The administering authority
shall notify the parties to the investigation, not later than
20 days before the date on which the preliminary
determination would otherwise be required under subsection
(b)(1), if it intends to postpone making the preliminary
determination under paragraph (1). The notification shall
include an explanation of the reasons for the postponement,
and notice of the postponement shall be published in the
Federal Register.
``(d) Effect of Determination by the Administering
Authority.--If the preliminary determination of the
administering authority under subsection (b) is affirmative,
the administering authority shall--
``(1) determine an estimated injurious pricing margin, and
``(2) make available to the Commission all information upon
which its determination was based and which the Commission
considers relevant to its injury determination, under such
procedures as the administering authority and the Commission
may establish to prevent disclosure, other than with the
consent of the party providing it or under protective order,
of any information to which confidential treatment has been
given by the administering authority.
``(e) Notice of Determination.--Whenever the Commission or
the administering authority makes a determination under this
section, the Commission or the administering authority, as
the case may be, shall notify the petitioner, and other
parties to the investigation, and the Commission or the
administering authority (whichever is appropriate) of its
determination. The

[[Page H6304]]

administering authority shall include with such notification
the facts and conclusions on which its determination is
based. Not later than 5 days after the date on which the
determination is required to be made under subsection (a)(2),
the Commission shall transmit to the administering authority
the facts and conclusions on which its determination is
based.

``SEC. 804. TERMINATION OR SUSPENSION OF INVESTIGATION.

``(a) Termination of Investigation Upon Withdrawal of
Petition.--
``(1) In general.--Except as provided in paragraph (2), an
investigation under this subtitle may be terminated by either
the administering authority or the Commission, after notice
to all parties to the investigation, upon withdrawal of the
petition by the petitioner.
``(2) Limitation on termination by commission.--The
Commission may not terminate an investigation under paragraph
(1) before a preliminary determination is made by the
administering authority under section 803(b).
``(b) Termination of Investigations Initiated by
Administering Authority.--The administering authority may
terminate any investigation initiated by the administering
authority under section 802(a) after providing notice of such
termination to all parties to the investigation.
``(c) Alternate Equivalent Remedy.--The criteria set forth
in subparagraphs (A) through (D) of section 806(e)(1) shall
apply to any agreement that forms the basis for termination
of an investigation under subsection (a) or (b).
``(d) Proceedings by WTO Members.--
``(1) Suspension of investigation.--The administering
authority and the Commission shall suspend an investigation
under this section if a WTO member that is not a Shipbuilding
Agreement Party initiates an antidumping proceeding described
in section 861(29)(A) with respect to the sale of the subject
vessel.
``(2) Termination of investigation.--If an antidumping
proceeding described in paragraph (1) is concluded by--
``(A) the imposition of antidumping measures, or
``(B) a negative determination with respect to whether the
sale is at less than fair value or with respect to injury,

the administering authority and the Commission shall
terminate the investigation under this section.
``(3) Continuation of investigation.--(A) If such a
proceeding--
``(i) is concluded by a result other than a result
described in paragraph (2), or
``(ii) is not concluded within one year from the date of
the initiation of the proceeding,

then the administering authority and the Commission shall
terminate the suspension and continue the investigation. The
period in which the investigation was suspended shall not be
included in calculating deadlines applicable with respect to
the investigation.
``(B) Notwithstanding subparagraph (A)(ii), if the
proceeding is concluded by a result described in paragraph
(2)(A), the administering authority and the Commission shall
terminate the investigation under this section.

``SEC. 805. FINAL DETERMINATIONS.

``(a) Determinations by Administering Authority.--
``(1) In general.--Within 75 days after the date of its
preliminary determination under section 803(b), the
administering authority shall make a final determination of
whether the vessel which is the subject of the investigation
has been sold in the United States at less than its fair
value.
``(2) Extension of period for determination.--(A) The
administering authority may postpone making the final
determination under paragraph (1) until not later than 290
days after--
``(i) the date of delivery of the foreign like vessel, in
an investigation to which section 803(b)(1)(B) applies,
``(ii) the date of delivery of the subject vessel, in an
investigation to which section 803(b)(1)(C) applies, or
``(iii) the date on which the administering authority
initiates the investigation under section 802, in an
investigation to which section 803(b)(1)(D) applies.
``(B) The administering authority may apply subparagraph
(A) if a request in writing is made by--
``(i) the producer of the subject vessel, in a proceeding
in which the preliminary determination by the administering
authority under section 803(b) was affirmative, or
``(ii) the petitioner, in a proceeding in which the
preliminary determination by the administering authority
under section 803(b) was negative.
``(3) De minimis injurious pricing margin.--In making a
determination under this subsection, the administering
authority shall disregard any injurious pricing margin that
is de minimis as defined in section 803(b)(2).
``(b) Final Determination by Commission.--
``(1) In general.--The Commission shall make a final
determination of whether--
``(A) an industry in the United States--
``(i) is or has been materially injured, or
``(ii) is threatened with material injury, or
``(B) the establishment of an industry in the United States
is or has been materially retarded,

by reason of the sale of the vessel with respect to which the
administering authority has made an affirmative determination
under subsection (a)(1).
``(2) Period for injury determination following affirmative
preliminary determination by administering authority.--If the
preliminary determination by the administering authority
under section 803(b) is affirmative, then the Commission
shall make the determination required by paragraph (1) before
the later of--
``(A) the 120th day after the day on which the
administering authority makes its affirmative preliminary
determination under section 803(b), or
``(B) the 45th day after the day on which the administering
authority makes its affirmative final determination under
subsection (a).
``(3) Period for injury determination following negative
preliminary determination by administering authority.--If the
preliminary determination by the administering authority
under section 803(b) is negative, and its final determination
under subsection (a) is affirmative, then the final
determination by the Commission under this subsection shall
be made within 75 days after the date of that affirmative
final determination.
``(c) Effect of Final Determinations.--
``(1) Effect of affirmative determination by the
administering authority.--If the determination of the
administering authority under subsection (a) is affirmative,
then the administering authority shall--
``(A) make available to the Commission all information upon
which such determination was based and which the Commission
considers relevant to its determination, under such
procedures as the administering authority and the Commission
may establish to prevent disclosure, other than with the
consent of the party providing it or under protective order,
of any information to which confidential treatment has been
given by the administering authority, and
``(B) calculate an injurious pricing charge in an amount
equal to the amount by which the normal value exceeds the
export price of the subject vessel.
``(2) Issuance of order; effect of negative
determination.--If the determinations of the administering
authority and the Commission under subsections (a)(1) and
(b)(1) are affirmative, then the administering authority
shall issue an injurious pricing order under section 806. If
either of such determinations is negative, the investigation
shall be terminated upon the publication of notice of that
negative determination.
``(d) Publication of Notice of Determinations.--Whenever
the administering authority or the Commission makes a
determination under this section, it shall notify the
petitioner, other parties to the investigation, and the other
agency of its determination and of the facts and conclusions
of law upon which the determination is based, and it shall
publish notice of its determination in the Federal Register.
``(e) Correction of Ministerial Errors.--The administering
authority shall establish procedures for the correction of
ministerial errors in final determinations within a
reasonable time after the determinations are issued under
this section. Such procedures shall ensure opportunity for
interested parties to present their views regarding any such
errors. As used in this subsection, the term `ministerial
error' includes errors in addition, subtraction, or other
arithmetic function, clerical errors resulting from
inaccurate copying, duplication, or the like, and any other
type of unintentional error which the administering authority
considers ministerial.

``SEC. 806. IMPOSITION AND COLLECTION OF INJURIOUS PRICING
CHARGE.

``(a) In General.--Within 10 days after being notified by
the Commission of an affirmative determination under section
805(b), the administering authority shall publish an order
imposing an injurious pricing charge on the foreign producer
of the subject vessel which--
``(1) directs the foreign producer of the subject vessel to
pay to the Secretary of the Treasury, or the designee of the
Secretary, within 180 days from the date of publication of
the order, an injurious pricing charge in an amount equal to
the amount by which the normal value exceeds the export price
of the subject vessel,
``(2) includes the identity and location of the foreign
producer and a description of the subject vessel, in such
detail as the administering authority deems necessary, and
``(3) informs the foreign producer that--
``(A) failure to pay the injurious pricing charge in a
timely fashion may result in the imposition of
countermeasures with respect to that producer under section
807,
``(B) payment made after the deadline described in
paragraph (1) shall be subject to interest charges at the
Commercial Interest Reference Rate (CIRR), and
``(C) the foreign producer may request an extension of the
due date for payment under subsection (b).
``(b) Extension of Due Date for Payment in Extraordinary
Circumstances.--
``(1) Extension.--Upon request, the administering authority
may amend the order under subsection (a) to set a due date
for payment or payments later than the date that is 180 days
from the date of publication of the order, if the
administering authority determines that full payment in 180
days would render the producer insolvent or would be
incompatible with a judicially supervised reorganization.
When an extended payment schedule provides for a series of
partial payments, the administering authority shall specify
the circumstances under which default on one or more payments
will result in the imposition of countermeasures.
``(2) Interest charges.--If a request is granted under
paragraph (1), payments made after the date that is 180 days
from the publication of the order shall be subject to
interest charges at the CIRR.
``(c) Notification of Order.--The administering authority
shall deliver a copy of the order requesting payment to the
foreign producer of the subject vessel and to an appropriate
representative of the government of the exporting country.
``(d) Revocation of Order.--The administering authority--
``(1) may revoke an injurious pricing order if the
administering authority determines that producers accounting
for substantially all of the

[[Page H6305]]

capacity to produce a domestic like vessel have expressed a
lack of interest in the order, and
``(2) shall revoke an injurious pricing order--
``(A) if the sale of the vessel that was the subject of the
injurious pricing determination is voided,
``(B) if the injurious pricing charge is paid in full,
including any interest accrued for late payment,
``(C) upon full implementation of an alternative equivalent
remedy described in subsection (e), or
``(D) if, with respect to the vessel sale that was at issue
in the investigation that resulted in the injurious pricing
order, an antidumping proceeding conducted by a WTO member
who is not a Shipbuilding Agreement Party has been completed
and resulted in the imposition of antidumping measures.
``(e) Alternative Equivalent Remedy.--
``(1) Agreement for alternate remedy.--The administering
authority may suspend an injurious pricing order if the
administering authority enters into an agreement with the
foreign producer subject to the order on an alternative
equivalent remedy, that the administering authority
determines--
``(A) is at least as effective a remedy as the injurious
pricing charge,
``(B) is in the public interest,
``(C) can be effectively monitored and enforced, and
``(D) is otherwise consistent with the domestic law and
international obligations of the United States.
``(2) Prior consultations and submission of comments.--
Before entering into an agreement under paragraph (1), the
administering authority shall consult with the industry, and
provide for the submission of comments by interested parties,
with respect to the agreement.
``(3) Material violations of agreement.--If the injurious
pricing order has been suspended under paragraph (1), and the
administering authority determines that the foreign producer
concerned has materially violated the terms of the agreement
under paragraph (1), the administering authority shall
terminate the suspension.

``SEC. 807. IMPOSITION OF COUNTERMEASURES.

``(a) General Rule.--
``(1) Issuance of order imposing countermeasures.--Unless
an injurious pricing order is revoked or suspended under
section 806 (d) or (e), the administering authority shall
issue an order imposing countermeasures.
``(2) Contents of order.--The countermeasure order shall--
``(A) state that, as provided in section 468, a permit to
lade or unlade passengers or merchandise may not be issued
with respect to vessels contracted to be built by the foreign
producer of the vessel with respect to which an injurious
pricing order was issued under section 806, and
``(B) specify the scope and duration of the prohibition on
the issuance of a permit to lade or unlade passengers or
merchandise.
``(b) Notice of Intent To Impose Countermeasures.--
``(1) General rule.--The administering authority shall
issue a notice of intent to impose countermeasures not later
than 30 days before the expiration of the time for payment
specified in the injurious pricing order (or extended payment
provided for under section 806(b)), and shall publish the
notice in the Federal Register within 7 days after issuing
the notice.
``(2) Elements of the notice of intent.--The notice of
intent shall contain at least the following elements:
``(A) Scope.--A permit to lade or unlade passengers or
merchandise may not be issued with respect to any vessel--
``(i) built by the foreign producer subject to the proposed
countermeasures, and
``(ii) with respect to which the material terms of sale are
established within a period of 4 consecutive years beginning
on the date that is 30 days after publication in the Fedeal
Register of the notice of intent described in paragraph (1).
``(B) Duration.--For each vessel described in subparagraph
(A), a permit to lade or unlade passengers or merchandise may
not be issued for a period of 4 years after the date of
delivery of the vessel.
``(c) Determination To Impose Countermeasures; Order.--
``(1) General rule.--The administering authority shall,
within the time specified in paragraph (2), issue a
determination and order imposing countermeasures.
``(2) Time for determination.--The determination shall be
issued within 90 days after the date on which the notice of
intent to impose countermeasures under subsection (b) is
published in the Federal Register. The administering
authority shall publish the determination, and the order
described in paragraph (4), in the Federal Register within 7
days after issuing the final determination, and shall provide
a copy of the determination and order to the Customs Service.
``(3) Content of the determination.--In the determination
imposing countermeasures, the administering authority shall
determine whether, in light of all of the circumstances, an
interested party has demonstrated that the scope or duration
of the countermeasures described in subsection (b)(2) should
be narrower or shorter than the scope or duration set forth
in the notice of intent to impose countermeasures.
``(4) Order.--At the same time it issues its determination,
the administering authority shall issue an order imposing
countermeasures, consistent with its determination.
``(d) Administrative Review of Determination To Impose
Countermeasures.--
``(1) Request for review.--Each year, in the anniversary
month of the issuance of the order imposing countermeasures
under subsection (c), the administering authority shall
publish in the Federal Register a notice providing that
interested parties may request--
``(A) a review of the scope or duration of the
countermeasures determined under subsection (c)(3), and
``(B) a hearing in connection with such a review.
``(2) Review.--If a proper request has been received under
paragraph (1), the administering authority shall--
``(A) publish notice of initiation of a review in the
Federal Register not later than 15 days after the end of the
anniversary month of the issuance of the order imposing
countermeasures, and
``(B) review and determine whether the requesting party has
demonstrated that the scope or duration of the
countermeasures is excessive in light of all of the
circumstances.
``(3) Time for review.--The administering authority shall
make its determination under paragraph (2)(B) within 90 days
after the date on which the notice of initiation of the
review is published. If the determination under paragraph
(2)(B) is affirmative, the administering authority shall
amend the order accordingly. The administering authority
shall promptly publish the determination and any amendment to
the order in the Federal Register, and shall provide a copy
of any amended order to the Customs Service. In extraordinary
circumstances, the administering authority may extend the
time for its determination under paragraph (2)(B) to not
later than 150 days after the date on which the notice of
initiation of the review is published.
``(e) Extension of Countermeasures.--
``(1) Request for extension.--Within the time described in
paragraph (2), an interested party may file with the
administering authority a request that the scope or duration
of countermeasures be extended.
``(2) Deadline for request for extension.--
``(A) Request for extension beyond 4 years.--If the request
seeks an extension that would cause the scope or duration of
countermeasures to exceed 4 years, including any prior
extensions, the request for extension under paragraph (1)
shall be filed not earlier than the date that is 15 months,
and not later than the date that is 12 months, before the
date that marks the end of the period that specifies the
vessels that fall within the scope of the order by virtue of
the establishment of material terms of sale within that
period.
``(B) Other requests.--If the request seeks an extension
under paragraph (1) other than one described in subparagraph
(A), the request shall be filed not earlier than the date
that is 6 months, and not later than a date that is 3 months,
before the date that marks the end of the period referred to
in subparagraph (A).
``(3) Determination.--
``(A) Notice of request for extension.--If a proper request
has been received under paragraph (1), the administering
authority shall publish notice of initiation of an extension
proceeding in the Federal Register not later than 15 days
after the applicable deadline in paragraph (2) for requesting
the extension.
``(B) Procedures.--
``(i) Requests for extension beyond 4 years.--If paragraph
(2)(A) applies to the request, the administering authority
shall consult with the Trade Representative under paragraph
(4).
``(ii) Other requests.--If paragraph (2)(B) applies to the
request, the administering authority shall determine, within
90 days after the date on which the notice of initiation of
the proceeding is published, whether the requesting party has
demonstrated that the scope or duration of the
countermeasures is inadequate in light of all of the
circumstances. If the administering authority determines that
an extension is warranted, it shall amend the countermeasure
order accordingly. The administering authority shall promptly
publish the determination and any amendment to the order in
the Federal Register, and shall provide a copy of any amended
order to the Customs Service.
``(4) Consultation with trade representative.--If paragraph
(3)(B)(i) applies, the administering authority shall consult
with the Trade Representative concerning whether it would be
appropriate to request establishment of a dispute settlement
panel under the Shipbuilding Agreement for the purpose of
seeking authorization to extend the scope or duration of
countermeasures for a period in excess of 4 years.
``(5) Decision not to request panel.--If, based on
consultations under paragraph (4), the Trade Representative
decides not to request establishment of a panel, the Trade
Representative shall inform the party requesting the
extension of the countermeasures of the reasons for its
decision in writing. The decision shall not be subject to
judicial review.
``(6) Panel proceedings.--If, based on consultations under
paragraph (4), the Trade Representative requests the
establishment of a panel under the Shipbuilding Agreement to
authorize an extension of the period of countermeasures, and
the panel authorizes such an extension, the administering
authority shall promptly amend the countermeasure order. The
administering authority shall publish notice of the amendment
in the Federal Register.
``(f) List of Vessels Subject to Countermeasures.--
``(1) General rule.--At least once during each 12-month
period beginning on the anniversary date of a determination
to impose countermeasures under this section, the
administering authority shall publish in the Federal Register
a list of all delivered vessels subject to countermeasures
under the determination.
``(2) Content of list.--The list under paragraph (1) shall
include the following information for each vessel, to the
extent the information is available:
``(A) The name and general description of the vessel.

[[Page H6306]]

``(B) The vessel identification number.
``(C) The shipyard where the vessel was constructed.
``(D) The last-known registry of the vessel.
``(E) The name and address of the last-known owner of the
vessel.
``(F) The delivery date of the vessel.
``(G) The remaining duration of countermeasures on the
vessel.
``(H) Any other identifying information available.
``(3) Amendment of list.---The administering authority may
amend the list from time to time to reflect new information
that comes to its attention and shall publish any amendments
in the Federal Register.
``(4) Service of list and amendments.--(A) The
administering authority shall serve a copy of the list
described in paragraph (1) on--
``(i) the petitioner under section 802(b),
``(ii) the United States Customs Service,
``(iii) the Secretariat of the Organization for Economic
Cooperation and Development,
``(iv) the owners of vessels on the list,
``(v) the shipyards on the list, and
``(vi) the government of the country in which a shipyard on
the list is located.
``(B) The administering authority shall serve a copy of any
amendments to the list under paragraph (3) or subsection
(g)(3) on--
``(i) the parties listed in clauses (i), (ii), and (iii) of
subparagraph (A), and,
``(ii) if the amendment affects their interests, the
parties listed in clauses (iv), (v), and (vi) of subparagraph
(A).
``(g) Administrative Review of List of Vessels Subject to
Countermeasures.--
``(1) Request for review.--(A) An interested party may
request in writing a review of the list described in
subsection (f)(1), including any amendments thereto, to
determine whether--
``(i) a vessel included in the list does not fall within
the scope of the applicable countermeasure order and should
be deleted, or
``(ii) a vessel not included in the list falls within the
scope of the applicable countermeasure order and should be
added.
``(B) Any request seeking a determination described in
subparagraph (A)(i) shall be made within 90 days after the
date of publication of the applicable list.
``(2) Review.--If a proper request for review has been
received, the administering authority shall--
``(A) publish notice of initiation of a review in the
Federal Register--
``(i) not later than 15 days after the request is received,
or
``(ii) if the request seeks a determination described in
paragraph (1)(A)(i), not later than 15 days after the
deadline described in paragraph (1)(B), and
``(B) review and determine whether the requesting party has
demonstrated that--
``(i) a vessel included in the list does not qualify for
such inclusion, or
``(ii) a vessel not included in the list qualifies for
inclusion.
``(3) Time for determination.--The administering authority
shall make its determination under paragraph (2)(B) within 90
days after the date on which the notice of initiation of such
review is published. If the administering authority
determines that a vessel should be added or deleted from the
list, the administering authority shall amend the list
accordingly. The administering authority shall promptly
publish in the Federal Register the determination and any
such amendment to the list.
``(h) Expiration of Countermeasures.--Upon expiration of a
countermeasure order imposed under this section, the
administering authority shall promptly publish a notice of
the expiration in the Federal Register.
``(i) Suspension or Termination of Proceedings or
Countermeasures; Temporary Reduction of Countermeasures.--
``(1) If injurious pricing order revoked or suspended.--If
an injurious pricing order has been revoked or suspended
under section 806(d) or (e), the administering authority
shall, as appropriate, suspend or terminate proceedings under
this section with respect to that order, or suspend or revoke
a countermeasure order issued with respect to that injurious
pricing order.
``(2) If payment date amended.--(A) Subject to subparagraph
(C), if the payment date under an injurious pricing order is
amended under section 845, the administering authority shall,
as appropriate, suspend proceedings or modify deadlines under
this section, or suspend or amend a countermeasure order
issued with respect to that injurious pricing order.
``(B) In taking action under subparagraph (A), the
administering authority shall ensure that countermeasures are
not applied before the date that is 30 days after publication
in the Federal Register of the amended payment date.
``(C) If--
``(i) a countermeasure order is issued under subsection (c)
before an amendment is made under section 845 to the payment
date of the injurious pricing order to which the
countermeasure order applies, and
``(ii) the administering authority determines that the
period of time between the original payment date and the
amended payment date is significant for purposes of
determining the appropriate scope or duration of
countermeasures,

the administering authority may, in lieu of acting under
subparagraph (A), reinstitute proceedings under subsection
(c) for purposes of issuing a new determination under that
subsection.
``(j) Comment and Hearing.--In the course of any proceeding
under subsection (c), (d), (e), or (g), the administering
authority--
``(1) shall solicit comments from interested parties, and
``(2)(A) in a proceeding under subsection (c) or (d), upon
the request of an interested party, shall hold a hearing in
accordance with section 841(b) in connection with that
proceeding, or
``(B) in a proceeding under subsection (e) or (g), upon the
request of an interested party, may hold a hearing in
accordance with section 841(b) in connection with that
proceeding.

``SEC. 808. INJURIOUS PRICING PETITIONS BY THIRD COUNTRIES.

``(a) Filing of Petition.--The government of a Shipbuilding
Agreement Party may file with the Trade Representative a
petition requesting that an investigation be conducted to
determine if--
``(1) a vessel from another Shipbuilding Agreement Party
has been sold in the United States at less than fair value,
and
``(2) an industry, in the petitioning country, producing or
capable of producing a like vessel is materially injured by
reason of such sale.
``(b) Initiation.--The Trade Representative, after
consultation with the administering authority and the
Commission and obtaining the approval of the Parties Group
under the Shipbuilding Agreement, shall determine whether to
initiate an investigation described in subsection (a).
``(c) Determinations.--Upon initiation of an investigation
under subsection (a), the Trade Representative shall request
the following determinations be made in accordance with
substantive and procedural requirements specified by the
Trade Representative, notwithstanding any other provision of
this title:
``(1) The administering authority shall determine whether
the subject vessel has been sold at less than fair value.
``(2) The Commission shall determine whether an industry in
the petitioning country is materially injured by reason of
the sale of the subject vessel in the United States.
``(d) Public Comment.--An opportunity for public comment
shall be provided, as appropriate--
``(1) by the Trade Representative, in making the
determinations required by subsection (b), and
``(2) by the administering authority and the Commission, in
making the determinations required by subsection (c).
``(e) Issuance of Order.--If the administering authority
makes an affirmative determination under paragraph (1) of
subsection (c), and the Commission makes an affirmative
determination under paragraph (2) of subsection (c), the
administering authority shall--
``(1) order an injurious pricing charge in accordance with
section 806, and
``(2) make such determinations and take such other actions
as are required by sections 806 and 807, as if affirmative
determinations had been made under subsections (a) and (b) of
section 805.
``(f) Reviews of Determinations.--For purposes of review
under section 516B, if an order is issued under subsection
(e)--
``(1) the final determinations of the administering
authority and the Commission under subsection (c) shall be
treated as final determinations made under section 805, and
``(2) determinations of the administering authority under
subsection (e)(2) shall be treated as determinations made
under section 806 or 807, as the case may be.
``(g) Access to Information.--Section 843 shall apply to
investigations under this section, to the extent specified by
the Trade Representative, after consultation with the
administering authority and the Commission.
``Subtitle B--Special Rules

``SEC. 821. EXPORT PRICE.

``(a) Export Price.--For purposes of this title, the term
`export price' means the price at which the subject vessel is
first sold (or agreed to be sold) by or for the account of
the foreign producer of the subject vessel to an unaffiliated
United States buyer. The term `sold (or agreed to be sold) by
or for the account of the foreign producer' includes any
transfer of an ownership interest, including by way of lease
or long-term bareboat charter, in conjunction with the
original transfer from the producer, either directly or
indirectly, to a United States buyer.
``(b) Adjustments to Export Price.--The price used to
establish export price shall be--
``(1) increased by the amount of any import duties imposed
by the country of exportation which have been rebated, or
which have not been collected, by reason of the exportation
of the subject vessel, and
``(2) reduced by--
``(A) the amount, if any, included in such price,
attributable to any additional costs, charges, or expenses
which are incident to bringing the subject vessel from the
shipyard in the exporting country to the place of delivery,
``(B) the amount, if included in such price, of any export
tax, duty, or other charge imposed by the exporting country
on the exportation of the subject vessel, and
``(C) all other expenses incidental to placing the vessel
in condition for delivery to the buyer.

``SEC. 822. NORMAL VALUE.

``(a) Determination.--In determining under this title
whether a subject vessel has been sold at less than fair
value, a fair comparison shall be made between the export
price and normal value of the subject vessel. In order to
achieve a fair comparison with the export price, normal value
shall be determined as follows:
``(1) Determination of normal value.--
``(A) In general.--The normal value of the subject vessel
shall be the price described in subparagraph (B), at a time
reasonably corresponding to the time of the sale used to
determine the export price under section 821(a).
``(B) Price.--The price referred to in subparagraph (A)
is--
``(i) the price at which a foreign like vessel is first
sold in the exporting country, in the ordinary course of
trade and, to the extent practicable, at the same level of
trade, or
``(ii) in a case to which subparagraph (C) applies, the
price at which a foreign like vessel is

[[Page H6307]]

so sold for consumption in a country other than the exporting
country or the United States, if--

``(I) such price is representative, and
``(II) the administering authority does not determine that
the particular market situation in such other country
prevents a proper comparison with the export price.

``(C) Third country sales.--This subparagraph applies
when--
``(i) a foreign like vessel is not sold in the exporting
country as described in subparagraph (B)(i), or
``(ii) the particular market situation in the exporting
country does not permit a proper comparison with the export
price.
``(D) Contemporaneous sale.--For purposes of subparagraph
(A), `a time reasonably corresponding to the time of the
sale' means within 3 months before or after the sale of the
subject vessel or, in the absence of such sales, such longer
period as the administering authority determines would be
appropriate.
``(2) Fictitious markets.--No pretended sale, and no sale
intended to establish a fictitious market, shall be taken
into account in determining normal value.
``(3) Use of constructed value.--If the administering
authority determines that the normal value of the subject
vessel cannot be determined under paragraph (1)(B) or (1)(C),
then the normal value of the subject vessel shall be the
constructed value of that vessel, as determined under
subsection (e).
``(4) Indirect sales.--If a foreign like vessel is sold
through an affiliated party, the price at which the foreign
like vessel is sold by such affiliated party may be used in
determining normal value.
``(5) Adjustments.--The price described in paragraph (1)(B)
shall be--
``(A) reduced by--
``(i) the amount, if any, included in the price described
in paragraph (1)(B), attributable to any costs, charges, and
expenses incident to bringing the foreign like vessel from
the shipyard to the place of delivery to the purchaser,
``(ii) the amount of any taxes imposed directly upon the
foreign like vessel or components thereof which have been
rebated, or which have not been collected, on the subject
vessel, but only to the extent that such taxes are added to
or included in the price of the foreign like vessel, and
``(iii) the amount of all other expenses incidental to
placing the foreign like vessel in condition for delivery to
the buyer, and
``(B) increased or decreased by the amount of any
difference (or lack thereof) between the export price and the
price described in paragraph (1)(B) (other than a difference
for which allowance is otherwise provided under this section)
that is established to the satisfaction of the administering
authority to be wholly or partly due to--
``(i) physical differences between the subject vessel and
the vessel used in determining normal value, or
``(ii) other differences in the circumstances of sale.
``(6) Adjustments for level of trade.--The price described
in paragraph (1)(B) shall also be increased or decreased to
make due allowance for any difference (or lack thereof)
between the export price and the price described in paragraph
(1)(B) (other than a difference for which allowance is
otherwise made under this section) that is shown to be wholly
or partly due to a difference in level of trade between the
export price and normal value, if the difference in level of
trade--
``(A) involves the performance of different selling
activities, and
``(B) is demonstrated to affect price comparability, based
on a pattern of consistent price differences between sales at
different levels of trade in the country in which normal
value is determined.

In a case described in the preceding sentence, the amount of
the adjustment shall be based on the price differences
between the two levels of trade in the country in which
normal value is determined.
``(7) Adjustments to constructed value.--Constructed value
as determined under subsection (d) may be adjusted, as
appropriate, pursuant to this subsection.
``(b) Sales at Less Than Cost of Production.--
``(1) Determination; sales disregarded.--Whenever the
administering authority has reasonable grounds to believe or
suspect that the sale of the foreign like vessel under
consideration for the determination of normal value has been
made at a price which represents less than the cost of
production of the foreign like vessel, the administering
authority shall determine whether, in fact, such sale was
made at less than the cost of production. If the
administering authority determines that the sale was made at
less than the cost of production and was not at a price which
permits recovery of all costs within 5 years, such sale may
be disregarded in the determination of normal value. Whenever
such a sale is disregarded, normal value shall be based on
another sale of a foreign like vessel in the ordinary course
of trade. If no sales made in the ordinary course of trade
remain, the normal value shall be based on the constructed
value of the subject vessel.
``(2) Definitions and special rules.--For purposes of this
subsection:
``(A) Reasonable grounds to believe or suspect.--There are
reasonable grounds to believe or suspect that the sale of a
foreign like vessel was made at a price that is less than the
cost of production of the vessel, if an interested party
described in subparagraph (C), (D), (E), or (F) of section
861(17) provides information, based upon observed prices or
constructed prices or costs, that the sale of the foreign
like vessel under consideration for the determination of
normal value has been made at a price which represents less
than the cost of production of the vessel.
``(B) Recovery of costs.--If the price is below the cost of
production at the time of sale but is above the weighted
average cost of production for the period of investigation,
such price shall be considered to provide for recovery of
costs within 5 years.
``(3) Calculation of cost of production.--For purposes of
this section, the cost of production shall be an amount equal
to the sum of--
``(A) the cost of materials and of fabrication or other
processing of any kind employed in producing the foreign like
vessel, during a period which would ordinarily permit the
production of that vessel in the ordinary course of business,
and
``(B) an amount for selling, general, and administrative
expenses based on actual data pertaining to the production
and sale of the foreign like vessel by the producer in
question.

For purposes of subparagraph (A), if the normal value is
based on the price of the foreign like vessel sold in a
country other than the exporting country, the cost of
materials shall be determined without regard to any internal
tax in the exporting country imposed on such materials or on
their disposition which are remitted or refunded upon
exportation.
``(c) Nonmarket Economy Countries.--
``(1) In general.--If--
``(A) the subject vessel is produced in a nonmarket economy
country, and
``(B) the administering authority finds that available
information does not permit the normal value of the subject
vessel to be determined under subsection (a),

the administering authority shall determine the normal value
of the subject vessel on the basis of the value of the
factors of production utilized in producing the vessel and to
which shall be added an amount for general expenses and
profit plus the cost of expenses incidental to placing the
vessel in a condition for delivery to the buyer. Except as
provided in paragraph (2), the valuation of the factors of
production shall be based on the best available information
regarding the values of such factors in a market economy
country or countries considered to be appropriate by the
administering authority.
``(2) Exception.--If the administering authority finds that
the available information is inadequate for purposes of
determining the normal value of the subject vessel under
paragraph (1), the administering authority shall determine
the normal value on the basis of the price at which a vessel
that is--
``(A) comparable to the subject vessel, and
``(B) produced in one or more market economy countries that
are at a level of economic development comparable to that of
the nonmarket economy country,

is sold in other countries, including the United States.
``(3) Factors of production.--For purposes of paragraph
(1), the factors of production utilized in producing the
vessel include, but are not limited to--
``(A) hours of labor required,
``(B) quantities of raw materials employed,
``(C) amounts of energy and other utilities consumed, and
``(D) representative capital cost, including depreciation.
``(4) Valuation of factors of production.--The
administering authority, in valuing factors of production
under paragraph (1), shall utilize, to the extent possible,
the prices or costs of factors of production in one or more
market economy countries that are--
``(A) at a level of economic development comparable to that
of the nonmarket economy country, and
``(B) significant producers of comparable vessels.
``(d) Special Rule for Certain Multinational
Corporations.--Whenever, in the course of an investigation
under this title, the administering authority determines
that--
``(1) the subject vessel was produced in facilities which
are owned or controlled, directly or indirectly, by a person,
firm, or corporation which also owns or controls, directly or
indirectly, other facilities for the production of a foreign
like vessel which are located in another country or
countries,
``(2) subsection (a)(1)(C) applies, and
``(3) the normal value of a foreign like vessel produced in
one or more of the facilities outside the exporting country
is higher than the normal value of the foreign like vessel
produced in the facilities located in the exporting country,

the administering authority shall determine the normal value
of the subject vessel by reference to the normal value at
which a foreign like vessel is sold from one or more
facilities outside the exporting country. The administering
authority, in making any determination under this subsection,
shall make adjustments for the difference between the costs
of production (including taxes, labor, materials, and
overhead) of the foreign like vessel produced in facilities
outside the exporting country and costs of production of the
foreign like vessel produced in facilities in the exporting
country, if such differences are demonstrated to its
satisfaction.
``(e) Constructed Value.--
``(1) In general.--For purposes of this title, the
constructed value of a subject vessel shall be an amount
equal to the sum of--
``(A) the cost of materials and fabrication or other
processing of any kind employed in producing the subject
vessel, during a period which would ordinarily permit the
production of the vessel in the ordinary course of business,
and
``(B)(i) the actual amounts incurred and realized by the
foreign producer of the subject vessel for selling, general,
and administrative expenses, and for profits, in connection
with the production and sale of a foreign like vessel, in the
ordinary course of trade, in the domestic

[[Page H6308]]

market of the country of origin of the subject vessel, or
``(ii) if actual data are not available with respect to the
amounts described in clause (i), then--
``(I) the actual amounts incurred and realized by the
foreign producer of the subject vessel for selling, general,
and administrative expenses, and for profits, in connection
with the production and sale of the same general category of
vessel in the domestic market of the country of origin of the
subject vessel,
``(II) the weighted average of the actual amounts incurred
and realized by producers in the country of origin of the
subject vessel (other than the producer of the subject
vessel) for selling, general, and administrative expenses,
and for profits, in connection with the production and sale
of a foreign like vessel, in the ordinary course of trade, in
the domestic market, or
``(III) if data is not available under subclause (I) or
(II), the amounts incurred and realized for selling, general,
and administrative expenses, and for profits, based on any
other reasonable method, except that the amount allowed for
profit may not exceed the amount normally realized by foreign
producers (other than the producer of the subject vessel) in
connection with the sale of vessels in the same general
category of vessel as the subject vessel in the domestic
market of the country of origin of the subject vessel.

The profit shall, for purposes of this paragraph, be based on
the average profit realized over a reasonable period of time
before and after the sale of the subject vessel and shall
reflect a reasonable profit at the time of such sale. For
purposes of the preceding sentence, a `reasonable period of
time' shall not, except where otherwise appropriate, exceed 6
months before, or 6 months after, the sale of the subject
vessel. In calculating profit under this paragraph, any
distortion which would result in other than a profit which is
reasonable at the time of the sale shall be eliminated.
``(2) Costs and profits based on other reasonable
methods.--When costs and profits are determined under
paragraph (1)(B)(ii)(III), such determination shall, except
where otherwise appropriate, be based on appropriate export
sales by the producer of the subject vessel or, absent such
sales, to export sales by other producers of a foreign like
vessel or the same general category of vessel as the subject
vessel in the country of origin of the subject vessel.
``(3) Costs of materials.--For purposes of paragraph
(1)(A), the cost of materials shall be determined without
regard to any internal tax in the exporting country imposed
on such materials or their disposition which are remitted or
refunded upon exportation of the subject vessel produced from
such materials.
``(f) Special Rules for Calculation of Cost of Production
and for Calculation of Constructed Value.--For purposes of
subsections (b) and (e)--
``(1) Costs.--
``(A) In general.--Costs shall normally be calculated based
on the records of the foreign producer of the subject vessel,
if such records are kept in accordance with the generally
accepted accounting principles of the exporting country and
reasonably reflect the costs associated with the production
and sale of the vessel. The administering authority shall
consider all available evidence on proper allocation of
costs, including that which is made available by the foreign
producer on a timely basis, if such allocations have been
historically used by the foreign producer, in particular for
establishing appropriate amortization and depreciation
periods, and allowances for capital expenditures and other
development costs.
``(B) Nonrecurring costs.--Costs shall be adjusted
appropriately for those nonrecurring costs that benefit
current or future production, or both.
``(C) Startup costs.--
``(i) In general.--Costs shall be adjusted appropriately
for circumstances in which costs incurred during the time
period covered by the investigation are affected by startup
operations.
``(ii) Startup operations.--Adjustments shall be made for
startup operations only where--

``(I) a producer is using new production facilities or
producing a new type of vessel that requires substantial
additional investment, and
``(II) production levels are limited by technical factors
associated with the initial phase of commercial production.

For purposes of subclause (II), the initial phase of
commercial production ends at the end of the startup period.
In determining whether commercial production levels have been
achieved, the administering authority shall consider factors
unrelated to startup operations that might affect the volume
of production processed, such as demand, seasonality, or
business cycles.
``(iii) Adjustment for startup operations.--The adjustment
for startup operations shall be made by substituting the unit
production costs incurred with respect to the vessel at the
end of the startup period for the unit production costs
incurred during the startup period. If the startup period
extends beyond the period of the investigation under this
title, the administering authority shall use the most recent
cost of production data that it reasonably can obtain,
analyze, and verify without delaying the timely completion of
the investigation. For purposes of this subparagraph, the
startup period ends at the point at which the level of
commercial production that is characteristic of the vessel,
the producer, or the industry is achieved.
``(D) Costs due to extraordinary circumstances not
included.--Costs shall not include actual costs which are due
to extraordinary circumstances (including, but not limited
to, labor disputes, fire, and natural disasters) and which
are significantly over the cost increase which the
shipbuilder could have reasonably anticipated and taken into
account at the time of sale.
``(2) Transactions disregarded.--A transaction directly or
indirectly between affiliated persons may be disregarded if,
in the case of any element of value required to be
considered, the amount representing that element does not
fairly reflect the amount usually reflected in sales of a
like vessel in the market under consideration. If a
transaction is disregarded under the preceding sentence and
no other transactions are available for consideration, the
determination of the amount shall be based on the information
available as to what the amount would have been if the
transaction had occurred between persons who are not
affiliated.
``(3) Major input rule.--If, in the case of a transaction
between affiliated persons involving the production by one of
such persons of a major input to the subject vessel, the
administering authority has reasonable grounds to believe or
suspect that an amount represented as the value of such input
is less than the cost of production of such input, then the
administering authority may determine the value of the major
input on the basis of the information available regarding
such cost of production, if such cost is greater than the
amount that would be determined for such input under
paragraph (2).

``SEC. 823. CURRENCY CONVERSION.

``(a) In General.--In an injurious pricing proceeding under
this title, the administering authority shall convert foreign
currencies into United States dollars using the exchange rate
in effect on the date of sale of the subject vessel, except
that if it is established that a currency transaction on
forward markets is directly linked to a sale under
consideration, the exchange rate specified with respect to
such foreign currency in the forward sale agreement shall be
used to convert the foreign currency.
``(b) Date of Sale.--For purposes of this section, `date of
sale' means the date of the contract of sale or, where
appropriate, the date on which the material terms of sale are
otherwise established. If the material terms of sale are
significantly changed after such date, the date of sale is
the date of such change. In the case of such a change in the
date of sale, the administering authority shall make
appropriate adjustments to take into account any unreasonable
effect on the injurious pricing margin due only to
fluctuations in the exchange rate between the original date
of sale and the new date of sale.
``Subtitle C--Procedures

``SEC. 841. HEARINGS.

``(a) Upon Request.--The administering authority and the
Commission shall each hold a hearing in the course of an
investigation under this title, upon the request of any party
to the investigation, before making a final determination
under section 805.
``(b) Procedures.--Any hearing required or permitted under
this title shall be conducted after notice published in the
Federal Register, and a transcript of the hearing shall be
prepared and made available to the public. The hearing shall
not be subject to the provisions of subchapter II of chapter
5 of title 5, United States Code, or to section 702 of such
title.

``SEC. 842. DETERMINATIONS ON THE BASIS OF THE FACTS
AVAILABLE.

``(a) In General.--If--
``(1) necessary information is not available on the record,
or
``(2) an interested party or any other person--
``(A) withholds information that has been requested by the
administering authority or the Commission under this title,
``(B) fails to provide such information by the deadlines
for the submission of the information or in the form and
manner requested, subject to subsections (b)(1) and (d) of
section 844,
``(C) significantly impedes a proceeding under this title,
or
``(D) provides such information but the information cannot
be verified as provided in section 844(g),

the administering authority and the Commission shall, subject
to section 844(c), use the facts otherwise available in
reaching the applicable determination under this title.
``(b) Adverse Inferences.--If the administering authority
or the Commission (as the case may be) finds that an
interested party has failed to cooperate by not acting to the
best of its ability to comply with a request for information
from the administering authority or the Commission, the
administering authority or the Commission (as the case may
be), in reaching the applicable determination under this
title, may use an inference that is adverse to the interests
of that party in selecting from among the facts otherwise
available. Such adverse inference may include reliance on
information derived from--
``(1) the petition, or
``(2) any other information placed on the record.
``(c) Corroboration of Secondary Information.--When the
administering authority or the Commission relies on secondary
information rather than on information obtained in the course
of an investigation under this title, the administering
authority and the Commission, as the case may be, shall, to
the extent practicable, corroborate that information from
independent sources that are reasonably at their disposal.

``SEC. 843. ACCESS TO INFORMATION.

``(a) Information Generally Made Available.--
``(1) Progress of investigation reports.--The administering
authority and the Commission shall, from time to time upon
request, inform the parties to an investigation under this
title of the progress of that investigation.
``(2) Ex parte meetings.--The administering authority and
the Commission shall maintain a record of any ex parte
meeting between--

[[Page H6309]]

``(A) interested parties or other persons providing factual
information in connection with a proceeding under this title,
and
``(B) the person charged with making the determination, or
any person charged with making a final recommendation to that
person, in connection with that proceeding,

if information relating to that proceeding was presented or
discussed at such meeting. The record of such an ex parte
meeting shall include the identity of the persons present at
the meeting, the date, time, and place of the meeting, and a
summary of the matters discussed or submitted. The record of
the ex parte meeting shall be included in the record of the
proceeding.
``(3) Summaries; non-proprietary submissions.--The
administering authority and the Commission shall disclose--
``(A) any proprietary information received in the course of
a proceeding under this title if it is disclosed in a form
which cannot be associated with, or otherwise be used to
identify, operations of a particular person, and
``(B) any information submitted in connection with a
proceeding which is not designated as proprietary by the
person submitting it.
``(4) Maintenance of public record.--The administering
authority and the Commission shall maintain and make
available for public inspection and copying a record of all
information which is obtained by the administering authority
or the Commission, as the case may be, in a proceeding under
this title to the extent that public disclosure of the
information is not prohibited under this chapter or exempt
from disclosure under section 552 of title 5, United States
Code.
``(b) Proprietary Information.--
``(1) Proprietary status maintained.--
``(A) In general.--Except as provided in subsection (a)(4)
and subsection (c), information submitted to the
administering authority or the Commission which is designated
as proprietary by the person submitting the information shall
not be disclosed to any person without the consent of the
person submitting the information, other than--
``(i) to an officer or employee of the administering
authority or the Commission who is directly concerned with
carrying out the investigation in connection with which the
information is submitted or any other proceeding under this
title covering the same subject vessel, or
``(ii) to an officer or employee of the United States
Customs Service who is directly involved in conducting an
investigation regarding fraud under this title.
``(B) Additional requirements.--The administering authority
and the Commission shall require that information for which
proprietary treatment is requested be accompanied by--
``(i) either--

``(I) a nonproprietary summary in sufficient detail to
permit a reasonable understanding of the substance of the
information submitted in confidence, or
``(II) a statement that the information is not susceptible
to summary, accompanied by a statement of the reasons in
support of the contention, and

``(ii) either--

``(I) a statement which permits the administering authority
or the Commission to release under administrative protective
order, in accordance with subsection (c), the information
submitted in confidence, or
``(II) a statement to the administering authority or the
Commission that the business proprietary information is of a
type that should not be released under administrative
protective order.

``(2) Unwarranted designation.--If the administering
authority or the Commission determines, on the basis of the
nature and extent of the information or its availability from
public sources, that designation of any information as
proprietary is unwarranted, then it shall notify the person
who submitted it and ask for an explanation of the reasons
for the designation. Unless that person persuades the
administering authority or the Commission that the
designation is warranted, or withdraws the designation, the
administering authority or the Commission, as the case may
be, shall return it to the party submitting it. In a case in
which the administering authority or the Commission returns
the information to the person submitting it, the person may
thereafter submit other material concerning the subject
matter of the returned information if the submission is made
within the time otherwise provided for submitting such
material.
``(c) Limited Disclosure of Certain Proprietary Information
Under Protective Order.--
``(1) Disclosure by administering authority or
commission.--
``(A) In general.--Upon receipt of an application (before
or after receipt of the information requested) which
describes in general terms the information requested and sets
forth the reasons for the request, the administering
authority or the Commission shall make all business
proprietary information presented to, or obtained by it,
during a proceeding under this title (except privileged
information, classified information, and specific information
of a type for which there is a clear and compelling need to
withhold from disclosure) available to all interested parties
who are parties to the proceeding under a protective order
described in subparagraph (B), regardless of when the
information is submitted during the proceeding. Customer
names (other than the name of the United States buyer of the
subject vessel) obtained during any investigation which
requires a determination under section 805(b) may not be
disclosed by the administering authority under protective
order until either an order is published under section 806(a)
as a result of the investigation or the investigation is
suspended or terminated. The Commission may delay disclosure
of customer names (other than the name of the United States
buyer of the subject vessel) under protective order during
any such investigation until a reasonable time before any
hearing provided under section 841 is held.
``(B) Protective order.--The protective order under which
information is made available shall contain such requirements
as the administering authority or the Commission may
determine by regulation to be appropriate. The administering
authority and the Commission shall provide by regulation for
such sanctions as the administering authority and the
Commission determine to be appropriate, including disbarment
from practice before the agency.
``(C) Time limitations on determinations.--The
administering authority or the Commission, as the case may
be, shall determine whether to make information available
under this paragraph--
``(i) not later than 14 days (7 days if the submission
pertains to a proceeding under section 803(a)) after the date
on which the information is submitted, or
``(ii) if--

``(I) the person submitting the information raises
objection to its release, or
``(II) the information is unusually voluminous or complex,

not later than 30 days (10 days if the submission pertains to
a proceeding under section 803(a)) after the date on which
the information is submitted.
``(D) Availability after determination.--If the
determination under subparagraph (C) is affirmative, then--
``(i) the business proprietary information submitted to the
administering authority or the Commission on or before the
date of the determination shall be made available, subject to
the terms and conditions of the protective order, on such
date, and
``(ii) the business proprietary information submitted to
the administering authority or the Commission after the date
of the determination shall be served as required by
subsection (d).
``(E) Failure to disclose.--If a person submitting
information to the administering authority refuses to
disclose business proprietary information which the
administering authority determines should be released under a
protective order described in subparagraph (B), the
administering authority shall return the information, and any
nonconfidential summary thereof, to the person submitting the
information and summary and shall not consider either.
``(2) Disclosure under court order.--If the administering
authority or the Commission denies a request for information
under paragraph (1), then application may be made to the
United States Court of International Trade for an order
directing the administering authority or the Commission, as
the case may be, to make the information available. After
notification of all parties to the investigation and after an
opportunity for a hearing on the record, the court may issue
an order, under such conditions as the court deems
appropriate, which shall not have the effect of stopping or
suspending the investigation, directing the administering
authority or the Commission to make all or a portion of the
requested information described in the preceding sentence
available under a protective order and setting forth
sanctions for violation of such order if the court finds
that, under the standards applicable in proceedings of the
court, such an order is warranted, and that--
``(A) the administering authority or the Commission has
denied access to the information under subsection (b)(1),
``(B) the person on whose behalf the information is
requested is an interested party who is a party to the
investigation in connection with which the information was
obtained or developed, and
``(C) the party which submitted the information to which
the request relates has been notified, in advance of the
hearing, of the request made under this section and of its
right to appear and be heard.
``(d) Service.--Any party submitting written information,
including business proprietary information, to the
administering authority or the Commission during a proceeding
shall, at the same time, serve the information upon all
interested parties who are parties to the proceeding, if the
information is covered by a protective order. The
administering authority or the Commission shall not accept
any such information that is not accompanied by a certificate
of service and a copy of the protective order version of the
document containing the information. Business proprietary
information shall only be served upon interested parties who
are parties to the proceeding that are subject to protective
order, except that a nonconfidential summary thereof shall be
served upon all other interested parties who are parties to
the proceeding.
``(e) Information Relating to Violations of Protective
Orders and Sanctions.--The administering authority and the
Commission may withhold from disclosure any correspondence,
private letters of reprimand, settlement agreements, and
documents and files compiled in relation to investigations
and actions involving a violation or possible violation of a
protective order issued under subsection (c), and such
information shall be treated as information described in
section 552(b)(3) of title 5, United States Code.
``(f) Opportunity for Comment by Vessel Buyers.--The
administering authority and the Commission shall provide an
opportunity for buyers of subject vessels to submit relevant
information to the administering authority concerning a sale
at less than fair value or countermeasures, and to the
Commission concerning material injury by reason of the sale
of a vessel at less than fair value.
``(g) Publication of Determinations; Requirements for Final
Determinations.--
``(1) In general.--Whenever the administering authority
makes a determination under section 802 whether to initiate
an investigation, or

[[Page H6310]]

the administering authority or the Commission makes a
preliminary determination under section 803, a final
determination under section 805, a determination under
subsection (b), (c), (d), (e)(3)(B)(ii), (g), or (i) of
section 807, or a determination to suspend an investigation
under this title, the administering authority or the
Commission, as the case may be, shall publish the facts and
conclusions supporting that determination, and shall publish
notice of that determination in the Federal Register.
``(2) Contents of notice or determination.--The notice or
determination published under paragraph (1) shall include, to
the extent applicable--
``(A) in the case of a determination of the administering
authority--
``(i) the names of the foreign producer and the country of
origin of the subject vessel,
``(ii) a description sufficient to identify the subject
vessel,
``(iii) with respect to an injurious pricing charge, the
injurious pricing margin established and a full explanation
of the methodology used in establishing such margin,
``(iv) with respect to countermeasures, the scope and
duration of countermeasures and, if applicable, any changes
thereto, and
``(v) the primary reasons for the determination, and
``(B) in the case of a determination of the Commission--
``(i) considerations relevant to the determination of
injury, and
``(ii) the primary reasons for the determination.
``(3) Additional requirements for final determinations.--In
addition to the requirements set forth in paragraph (2)--
``(A) the administering authority shall include in a final
determination under section 805 or 807(c) an explanation of
the basis for its determination that addresses relevant
arguments, made by interested parties who are parties to the
investigation, concerning the establishment of the injurious
pricing charge with respect to which the determination is
made, and
``(B) the Commission shall include in a final determination
of injury an explanation of the basis for its determination
that addresses relevant arguments that are made by interested
parties who are parties to the investigation concerning the
effects and impact on the industry of the sale of the subject
vessel.

``SEC. 844. CONDUCT OF INVESTIGATIONS.

``(a) Certification of Submissions.--Any person providing
factual information to the administering authority or the
Commission in connection with a proceeding under this title
on behalf of the petitioner or any other interested party
shall certify that such information is accurate and complete
to the best of that person's knowledge.
``(b) Difficulties in Meeting Requirements.--
``(1) Notification by interested party.--If an interested
party, promptly after receiving a request from the
administering authority or the Commission for information,
notifies the administering authority or the Commission (as
the case may be) that such party is unable to submit the
information requested in the requested form and manner,
together with a full explanation and suggested alternative
forms in which such party is able to submit the information,
the administering authority or the Commission (as the case
may be) shall consider the ability of the interested party to
submit the information in the requested form and manner and
may modify such requirements to the extent necessary to avoid
imposing an unreasonable burden on that party.
``(2) Assistance to interested parties.--The administering
authority and the Commission shall take into account any
difficulties experienced by interested parties, particularly
small companies, in supplying information requested by the
administering authority or the Commission in connection with
investigations under this title, and shall provide to such
interested parties any assistance that is practicable in
supplying such information.
``(c) Deficient Submissions.--If the administering
authority or the Commission determines that a response to a
request for information under this title does not comply with
the request, the administering authority or the Commission
(as the case may be) shall promptly inform the person
submitting the response of the nature of the deficiency and
shall, to the extent practicable, provide that person with an
opportunity to remedy or explain the deficiency in light of
the time limits established for the completion of
investigations or reviews under this title. If that person
submits further information in response to such deficiency
and either--
``(1) the administering authority or the Commission (as the
case may be) finds that such response is not satisfactory, or
``(2) such response is not submitted within the applicable
time limits,
then the administering authority or the Commission (as the
case may be) may, subject to subsection (d), disregard all or
part of the original and subsequent responses.
``(d) Use of Certain Information.--In reaching a
determination under section 803, 805, or 807, the
administering authority and the Commission shall not decline
to consider information that is submitted by an interested
party and is necessary to the determination but does not meet
all the applicable requirements established by the
administering authority or the Commission if--
``(1) the information is submitted by the deadline
established for its submission,
``(2) the information can be verified,
``(3) the information is not so incomplete that it cannot
serve as a reliable basis for reaching the applicable
determination,
``(4) the interested party has demonstrated that it acted
to the best of its ability in providing the information and
meeting the requirements established by the administering
authority or the Commission with respect to the information,
and
``(5) the information can be used without undue
difficulties.
``(e) Nonacceptance of Submissions.--If the administering
authority or the Commission declines to accept into the
record any information submitted in an investigation under
this title, it shall, to the extent practicable, provide to
the person submitting the information a written explanation
of the reasons for not accepting the information.
``(f) Public Comment on Information.--Information that is
submitted on a timely basis to the administering authority or
the Commission during the course of a proceeding under this
title shall be subject to comment by other parties within
such reasonable time as the administering authority or the
Commission shall provide. The administering authority and the
Commission, before making a final determination under section
805 or 807, shall cease collecting information and shall
provide the parties with a final opportunity to comment on
the information obtained by the administering authority or
the Commission (as the case may be) upon which the parties
have not previously had an opportunity to comment. Comments
containing new factual information shall be disregarded.
``(g) Verification.--The administering authority shall
verify all information relied upon in making a final
determination under section 805.

``SEC. 845. ADMINISTRATIVE ACTION FOLLOWING SHIPBUILDING
AGREEMENT PANEL REPORTS.

``(a) Action by United States International Trade
Commission.--
``(1) Advisory report.--If a dispute settlement panel
under the Shipbuilding Agreement finds in a report that an
action by the Commission in connection with a particular
proceeding under this title is not in conformity with the
obligations of the United States under the Shipbuilding
Agreement, the Trade Representative may request the
Commission to issue an advisory report on whether this title
permits the Commission to take steps in connection with the
particular proceeding that would render its action not
inconsistent with the findings of the panel concerning those
obligations. The Trade Representative shall notify the
Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate of such request.
``(2) Time limits for report.--The Commission shall
transmit its report under paragraph (1) to the Trade
Representative within 30 calendar days after the Trade
Representative requests the report.
``(3) Consultations on request for commission
determination.--If a majority of the Commissioners issues an
affirmative report under paragraph (1), the Trade
Representatives shall consult with the congressional
committees listed in paragraph (1) concerning the matter.
``(4) Commission determination.--Notwithstanding any other
provision of this title, if a majority of the Commissioners
issues an affirmative report under paragraph (1), the
Commission, upon the written request of the Trade
Representative, shall issue a determination in connection
with the particular proceeding that would render the
Commission's action described in paragraph (1) not
inconsistent with the findings of the panel. The Commission
shall issue its determination not later than 120 calendar
days after the request from the Trade Representative is made.
``(5) Consultations on implementation of commission
determination.--The Trade Representative shall consult with
the congressional committees listed in paragraph (1) before
the Commission's determination under paragraph (4) is
implemented.
``(6) Revocation of order.--If, by virtue of the
Commission's determination under paragraph (4), an injurious
pricing order is no longer supported by an affirmative
Commission determination under this title, the Trade
Representative may, after consulting with the congressional
committees under paragraph (5), direct the administering
authority to revoke the injurious pricing order.
``(b) Action by Administering Authority.--
``(1) Consultations with administering authority and
congressional committees.--Promptly after a report or other
determination by a dispute settlement panel under the
Shipbuilding Agreement is issued that contains findings
that--
``(A) an action by the administering authority in a
proceeding under this title is not in conformity with the
obligations of the United States under the Shipbuilding
Agreement,
``(B) the due date for payment of an injurious pricing
charge contained in an order issued under section 806 should
be amended,
``(C) countermeasures provided for in an order issued under
section 807 should be provisionally suspended or reduced
pending the final decision of the panel, or
``(D) the scope or duration of countermeasures imposed
under section 807 should be narrowed or shortened,

the Trade Representative shall consult with the administering
authority and the congressional committees listed in
subsection (a)(1) on the matter.
``(2) Determination by administering authority.--
Notwithstanding any other provision of this title, the
administering authority shall, in response to a written
request from the Trade Representative, issue a determination,
or an amendment to or suspension of an injurious pricing or
countermeasure order, as the case may be, in connection with
the particular proceeding that would render the administering

[[Page H6311]]

authority's action described in paragraph (1) not
inconsistent with the findings of the panel.
``(3) Time limits for determinations.--The administering
authority shall issue its determination, amendment, or
suspension under paragraph (2)--
``(A) with respect to a matter described in subparagraph
(A) of paragraph (1), within 180 calendar days after the
request from the Trade Representative is made, and
``(B) with respect to a matter described in subparagraph
(B), (C), or (D) of paragraph (1), within 15 calendar days
after the request from the Trade Representative is made.
``(4) Consultations before implementation.--Before the
administering authority implements any determination,
amendment, or suspension under paragraph (2), the Trade
Representative shall consult with the administering authority
and the congressional committees listed in subsection (a)(1)
with respect to such determination, amendment, or suspension.
``(5) Implementation of determination.--The Trade
Representative may, after consulting with the administering
authority and the congressional committees under paragraph
(4), direct the administering authority to implement, in
whole or in part, the determination, amendment, or suspension
made under paragraph (2).
``(6) Implementation of determination; notice of
implementation.--The administering authority shall implement
the determination, amendment, or suspension under paragraph
(2)--
``(A) with respect to a matter described in subparagraph
(A) of paragraph (1), only if the injurious pricing margin
determined under paragraph (2) differs from the injurious
pricing margin in the determination reviewed by the panel,
and
``(B) with respect to a matter described in subparagraph
(B), (C), or (D) of paragraph (1), upon issuance of the
determination, amendment, or suspension under paragraph (2).
The administering authority shall publish notice of such
implementation in the Federal Register.
``(c) Opportunity for Comment by Interested Parties.--
Before issuing a determination, amendment, or suspension, the
administering authority, in a matter described in subsection
(b)(1)(A), or the Commission, in a matter described in
subsection (a)(1), as the case may be, shall provide
interested parties with an opportunity to submit written
comments and, in appropriate cases, may hold a hearing, with
respect to the determination.
``Subtitle D--Definitions

``SEC. 861. DEFINITIONS.

``For purposes of this title:
``(1) Administering authority.--The term `administering
authority' means the Secretary of Commerce, or any other
officer of the United States to whom the responsibility for
carrying out the duties of the administering authority under
this title are transferred by law.
``(2) Commission.--The term `Commission' means the United
States International Trade Commission.
``(3) Country.--The term `country' means a foreign country,
a political subdivision, dependent territory, or possession
of a foreign country and, except as provided in paragraph
(16)(E)(iii), may not include an association of 2 or more
foreign countries, political subdivisions, dependent
territories, or possessions of countries into a customs union
outside the United States.
``(4) Industry.--
``(A) In general.--Except as used in section 808, the term
`industry' means the producers as a whole of a domestic like
vessel, or those producers whose collective capability to
produce a domestic like vessel constitutes a major proportion
of the total domestic capability to produce a domestic like
vessel.
``(B) Producer.--A `producer' of a domestic like vessel
includes an entity that is producing the domestic like vessel
and an entity with the capability to produce the domestic
like vessel.
``(C) Capability to produce a domestic like vessel.--A
producer has the `capability to produce a domestic like
vessel' if it is capable of producing a domestic like vessel
with its present facilities or could adapt its facilities in
a timely manner to produce a domestic like vessel.
``(D) Related parties.--(i) In an investigation under this
title, if a producer of a domestic like vessel and the
foreign producer, seller (other than the foreign producer),
or United States buyer of the subject vessel are related
parties, or if a producer of a domestic like vessel is also a
United States buyer of the subject vessel, the domestic
producer may, in appropriate circumstances, be excluded from
the industry.
``(ii) For purposes of clause (i), a domestic producer and
the foreign producer, seller, or United States buyer shall be
considered to be related parties, if--
``(I) the domestic producer directly or indirectly controls
the foreign producer, seller or United States buyer,
``(II) the foreign producer, seller, or United States buyer
directly or indirectly controls the domestic producer,
``(III) a third party directly or indirectly controls the
domestic producer and the foreign producer, seller, or United
States buyer, or
``(IV) the domestic producer and the foreign producer,
seller, or United States buyer directly or indirectly control
a third party and there is reason to believe that the
relationship causes the producer to act differently than a
nonrelated producer.
For purposes of this subparagraph, a party shall be
considered to directly or indirectly control another party if
the party is legally or operationally in a position to
exercise restraint or direction over the other party.
``(E) Product lines.--In an investigation under this title,
the effect of the sale of the subject vessel shall be
assessed in relation to the United States production (or
production capability) of a domestic like vessel if available
data permit the separate identification of production (or
production capability) in terms of such criteria as the
production process or the producer's profits. If the domestic
production (or production capability) of a domestic like
vessel has no separate identity in terms of such criteria,
then the effect of the sale shall be assessed by the
examination of the production (or production capability) of
the narrowest group or range of vessels, which includes a
domestic like vessel, for which the necessary information can
be provided.
``(5) Buyer.--The term `buyer' means any person who
acquires an ownership interest in a vessel, including by way
of lease or long-term bareboat charter, in conjunction with
the original transfer from the producer, either directly or
indirectly, including an individual or company which owns or
controls a buyer. There may be more than one buyer of any one
vessel.
``(6) United states buyer.--The term `United States buyer'
means a buyer that is any of the following:
``(A) A United States citizen.
``(B) A juridical entity, including any corporation,
company, association, or other organization, that is legally
constituted under the laws and regulations of the United
States or a political subdivision thereof, regardless of
whether the entity is organized for pecuniary gain, privately
or government owned, or organized with limited or unlimited
liability.
``(C) A juridical entity that is owned or controlled by
nationals or entities described in subparagraphs (A) and (B).
For the purposes of this subparagraph--
``(i) the term `own' means having more than a 50 percent
interest, and
``(ii) the term `control' means the actual ability to have
substantial influence on corporate behavior, and control is
presumed to exist where there is at least a 25 percent
interest.

If ownership of a company is established under clause (i),
other control is presumed not to exist unless it is otherwise
established.
``(7) Ownership interest.--An `ownership interest' in a
vessel includes any contractual or proprietary interest which
allows the beneficiary or beneficiaries of such interest to
take advantage of the operation of the vessel in a manner
substantially comparable to the way in which an owner may
benefit from the operation of the vessel. In determining
whether such substantial comparability exists, the
administering authority shall consider--
``(A) the terms and circumstances of the transaction which
conveys the interest,
``(B) commercial practice,
``(C) whether the vessel subject to the transaction is
integrated into the operations of the beneficiary or
beneficiaries, and
``(D) whether in practice there is a likelihood that the
beneficiary or beneficiaries of such interests will take
advantage of and the risk for the operation of the vessel for
a significant part of the life-time of the vessel.
``(8) Vessel.--
``(A) In general.--Except as otherwise specifically
provided under international agreements, the term `vessel'
means--
``(i) a self-propelled seagoing vessel of 100 gross tons or
more used for transportation of goods or persons or for
performance of a specialized service (including, but not
limited to, ice breakers and dredgers), and
``(ii) a tug of 365 kilowatts or more,
that is produced in a Shipbuilding Agreement Party or a
country that is not a Shipbuilding Agreement Party and not a
WTO member.
``(B) Exclusions.--The term `vessel' does not include--
``(i) any fishing vessel destined for the fishing fleet of
the country in which the vessel is built,
``(ii) any military vessel, and
``(iii) any vessel sold before the date that the
Shipbuilding Agreement enters into force with respect to the
United States, except that any vessel sold after December 21,
1994, for delivery more than 5 years after the date of the
contract of sale shall be a `vessel' for purposes of this
title unless the shipbuilder demonstrates to the
administering authority that the extended delivery date was
for normal commercial reasons and not to avoid applicability
of this title.
``(C) Self-propelled seagoing vessel.--A vessel is `self-
propelled seagoing' if its permanent propulsion and steering
provide it all the characteristics of self-navigability in
the high seas.
``(D) Military vessel.--A `military vessel' is a vessel
which, according to its basic structural characteristics and
ability, is intended to be used exclusively for military
purposes.
``(9) Like vessel.--The term `like vessel' means a vessel
of the same type, same purpose, and approximate size as the
subject vessel and possessing characteristics closely
resembling those of the subject vessel.
``(10) Domestic like vessel.--The term `domestic like
vessel' means a like vessel produced in the United States.
``(11) Foreign like vessel.--Except as used in section
822(e)(1)(B)(ii)(II), the term `foreign like vessel' means a
like vessel produced by the foreign producer of the subject
vessel for sale in the producer's domestic market or in a
third country.
``(12) Same general category of vessel.--The term `same
general category of vessel' means a vessel of the same type
and purpose as the subject vessel, but of a significantly
different size.
``(13) Subject vessel.--The term `subject vessel' means a
vessel subject to investigation under section 801 or 808.
``(14) Foreign producer.--The term `foreign producer' means
the producer or producers of the subject vessel.
``(15) Exporting country.--The term `exporting country'
means the country in which the subject vessel was built.
``(16) Material injury.--
``(A) In general.--The term `material injury' means harm
which is not inconsequential, immaterial, or unimportant.

[[Page H6312]]

``(B) Sale and consequent impact.--In making determinations
under sections 803(a) and 805(b), the Commission in each
case--
``(i) shall consider--

``(I) the sale of the subject vessel,
``(II) the effect of the sale of the subject vessel on
prices in the United States for a domestic like vessel, and
``(III) the impact of the sale of the subject vessel on
domestic producers of the domestic like vessel, but only in
the context of production operations within the United
States, and

``(ii) may consider such other economic factors as are
relevant to the determination regarding whether there is or
has been material injury by reason of the sale of the subject
vessel.

In the notification required under section 805(d), the
Commission shall explain its analysis of each factor
considered under clause (i), and identify each factor
considered under clause (ii) and explain in full its
relevance to the determination.
``(C) Evaluation of relevant factors.--For purposes of
subparagraph (B)--
``(i) Sale of the subject vessel.--In evaluating the sale
of the subject vessel, the Commission shall consider whether
the sale, either in absolute terms or relative to production
or demand in the United States, in terms of either volume or
value, is or has been significant.
``(ii) Price.--In evaluating the effect of the sale of the
subject vessel on prices, the Commission shall consider
whether--

``(I) there has been significant price underselling of the
subject vessel as compared with the price of a domestic like
vessel, and
``(II) the effect of the sale of the subject vessel
otherwise depresses or has depressed prices to a significant
degree or prevents or has prevented price increases, which
otherwise would have occurred, to a significant degree.

``(iii) Impact on affected domestic industry.--In examining
the impact required to be considered under subparagraph
(B)(i)(III), the Commission shall evaluate all relevant
economic factors which have a bearing on the state of the
industry in the United States, including, but not limited
to--

``(I) actual and potential decline in output, sales, market
share, profits, productivity, return on investments, and
utilization of capacity,
``(II) factors affecting domestic prices, including with
regard to sales,
``(III) actual and potential negative effects on cash flow,
employment, wages, growth, ability to raise capital, and
investment,
``(IV) actual and potential negative effects on the
existing development and production efforts of the domestic
industry, including efforts to develop a derivative or more
advanced version of a domestic like vessel, and
``(V) the magnitude of the injurious pricing margin.

The Commission shall evaluate all relevant economic factors
described in this clause within the context of the business
cycle and conditions of competition that are distinctive to
the affected industry.
``(D) Standard for determination.--The presence or absence
of any factor which the Commission is required to evaluate
under subparagraph (C) shall not necessarily give decisive
guidance with respect to the determination by the Commission
of material injury.
``(E) Threat of material injury.--
``(i) In general.--In determining whether an industry in
the United States is threatened with material injury by
reason of the sale of the subject vessel, the Commission
shall consider, among other relevant economic factors--

``(I) any existing unused production capacity or imminent,
substantial increase in production capacity in the exporting
country indicating the likelihood of substantially increased
sales of a foreign like vessel to United States buyers,
taking into account the availability of other export markets
to absorb any additional exports,
``(II) whether the sale of a foreign like vessel or other
factors indicate the likelihood of significant additional
sales to United States buyers,
``(III) whether sale of the subject vessel or sale of a
foreign like vessel by the foreign producer are at prices
that are likely to have a significant depressing or
suppressing effect on domestic prices, and are likely to
increase demand for further sales,

``(IV) the potential for product-shifting if production
facilities in the exporting country, which can presently be
used to produce a foreign like vessel or could be adapted in
a timely manner to produce a foreign like vessel, are
currently being used to produce other types of vessels,
``(V) the actual and potential negative effects on the
existing development and production efforts of the domestic
industry, including efforts to develop a derivative or more
advanced version of a domestic like vessel, and
``(VI) any other demonstrable adverse trends that indicate
the probability that there is likely to be material injury by
reason of the sale of the subject vessel.

``(ii) Basis for determination.--The Commission shall
consider the factors set forth in clause (i) as a whole. The
presence or absence of any factor which the Commission is
required to consider under clause (i) shall not necessarily
give decisive guidance with respect to the determination.
Such a determination may not be made on the basis of mere
conjecture or supposition.
``(iii) Effect of injurious pricing in third-country
markets.--

``(I) In general.--The Commission shall consider whether
injurious pricing in the markets of foreign countries (as
evidenced by injurious pricing findings or injurious pricing
remedies of other Shipbuilding Agreement Parties, or
antidumping determinations of, or measures imposed by, other
countries, against a like vessel produced by the producer
under investigation) suggests a threat of material injury to
the domestic industry. In the course of its investigation,
the Commission shall request information from the foreign
producer or United States buyer concerning this issue.
``(II) European communities.--For purposes of this clause,
the European Communities as a whole shall be treated as a
single foreign country.

``(F) Cumulation for determining material injury.--
``(i) In general.--For purposes of clauses (i) and (ii) of
subparagraph (C), and subject to clause (ii) of this
subparagraph, the Commission shall cumulatively assess the
effects of sales of foreign like vessels from all foreign
producers with respect to which--

``(I) petitions were filed under section 802(b) on the same
day,
``(II) investigations were initiated under section 802(a)
on the same day, or
``(III) petitions were filed under section 802(b) and
investigations were initiated under section 802(a) on the
same day,

if, with respect to such vessels, the foreign producers
compete with each other and with producers of a domestic like
vessel in the United States market.
``(ii) Exceptions.--The Commission shall not cumulatively
assess the effects of sales under clause (i)--

``(I) with respect to which the administering authority has
made a preliminary negative determination, unless the
administering authority subsequently made a final affirmative
determination with respect to those sales before the
Commission's final determination is made, or
``(II) from any producer with respect to which the
investigation has been terminated.

``(iii) Records in final investigations.--In each final
determination in which it cumulatively assesses the effects
of sales under clause (i), the Commission may make its
determinations based on the record compiled in the first
investigation in which it makes a final determination, except
that when the administering authority issues its final
determination in a subsequently completed investigation, the
Commission shall permit the parties in the subsequent
investigation to submit comments concerning the significance
of the administering authority's final determination, and
shall include such comments and the administering authority's
final determination in the record for the subsequent
investigation.
``(G) Cumulation for determining threat of material
injury.--To the extent practicable and subject to
subparagraph (F)(ii), for purposes of clause (i) (II) and
(III) of subparagraph (E), the Commission may cumulatively
assess the effects of sales of like vessels from all
countries with respect to which--
``(i) petitions were filed under section 802(b) on the same
day,
``(ii) investigations were initiated under section 802(a)
on the same day, or
``(iii) petitions were filed under section 802(b) and
investigations were initiated under section 802(a) on the
same day,

if, with respect to such vessels, the foreign producers
compete with each other and with producers of a domestic like
vessel in the United States market.
``(17) Interested party.--The term `interested party'
means, in a proceeding under this title--
``(A)(i) the foreign producer, seller (other than the
foreign producer), and the United States buyer of the subject
vessel, or
``(ii) a trade or business association a majority of the
members of which are the foreign producer, seller, or United
States buyer of the subject vessel,
``(B) the government of the country in which the subject
vessel is produced or manufactured,
``(C) a producer that is a member of an industry,
``(D) a certified union or recognized union or group of
workers which is representative of an industry,
``(E) a trade or business association a majority of whose
members are producers in an industry,
``(F) an association, a majority of whose members is
composed of interested parties described in subparagraph (C),
(D), or (E), and
``(G) for purposes of section 807, a purchaser who, after
the effective date of an order issued under that section,
entered into a contract of sale with the foreign producer
that is subject to the order.
``(18) Affirmative determinations by divided commission.--
If the Commissioners voting on a determination by the
Commission are evenly divided as to whether the determination
should be affirmative or negative, the Commission shall be
deemed to have made an affirmative determination. For the
purpose of applying this paragraph when the issue before the
Commission is to determine whether there is or has been--
``(A) material injury to an industry in the United States,
``(B) threat of material injury to such an industry, or
``(C) material retardation of the establishment of an
industry in the United States,

by reason of the sale of the subject vessel, an affirmative
vote on any of the issues shall be treated as a vote that the
determination should be affirmative.
``(19) Ordinary course of trade.--The term `ordinary course
of trade' means the conditions and practices which, for a
reasonable time before the sale of the subject vessel, have
been normal in the shipbuilding industry with respect to a
like vessel. The administering authority shall consider the
following sales and transactions, among others, to be outside
the ordinary course of trade:

[[Page H6313]]

``(A) Sales disregarded under section 822(b)(1).
``(B) Transactions disregarded under section 822(f)(2).
``(20) Nonmarket economy country.--
``(A) In general.--The term `nonmarket economy country'
means any foreign country that the administering authority
determines does not operate on market principles of cost or
pricing structures, so that sales of vessels in such country
do not reflect the fair value of the vessels.
``(B) Factors to be considered.--In making determinations
under subparagraph (A) the administering authority shall take
into account--
``(i) the extent to which the currency of the foreign
country is convertible into the currency of other countries,
``(ii) the extent to which wage rates in the foreign
country are determined by free bargaining between labor and
management,
``(iii) the extent to which joint ventures or other
investments by firms of other foreign countries are permitted
in the foreign country,
``(iv) the extent of government ownership or control of the
means of production,
``(v) the extent of government control over the allocation
of resources and over the price and output decisions of
enterprises, and
``(vi) such other factors as the administering authority
considers appropriate.
``(C) Determination in effect.--
``(i) Any determination that a foreign country is a
nonmarket economy country shall remain in effect until
revoked by the administering authority.
``(ii) The administering authority may make a determination
under subparagraph (A) with respect to any foreign country at
any time.
``(D) Determinations not in issue.--Notwithstanding any
other provision of law, any determination made by the
administering authority under subparagraph (A) shall not be
subject to judicial review in any investigation conducted
under subtitle A.
``(21) Shipbuilding agreement.--The term `Shipbuilding
Agreement' means The Agreement Respecting Normal Competitive
Conditions in the Commercial Shipbuilding and Repair
Industry, resulting from negotiations under the auspices of
the Organization for Economic Cooperation and Development,
and entered into on December 21, 1994.
``(22) Shipbuilding agreement party.--The term
`Shipbuilding Agreement Party' means a state or separate
customs territory that is a Party to the Shipbuilding
Agreement, and with respect to which the United States
applies the Shipbuilding Agreement.
``(23) WTO agreement.--The term `WTO Agreement' means the
Agreement defined in section 2(9) of the Uruguay Round
Agreements Act.
``(24) WTO member.--The term `WTO member' means a state, or
separate customs territory (within the meaning of Article XII
of the WTO Agreement), with respect to which the United
States applies the WTO Agreement.
``(25) Trade representative.--The term `Trade
Representative' means the United States Trade Representative.
``(26) Affiliated persons.--The following persons shall be
considered to be `affiliated' or `affiliated persons':
``(A) Members of a family, including brothers and sisters
(whether by the whole or half blood), spouse, ancestors, and
lineal descendants.
``(B) Any officer or director of an organization and such
organization.
``(C) Partners.
``(D) Employer and employee.
``(E) Any person directly or indirectly owning,
controlling, or holding with power to vote, 5 percent or more
of the outstanding voting stock or shares of any
organization, and such organization.
``(F) Two or more persons directly or indirectly
controlling, controlled by, or under common control with, any
person.
``(G) Any person who controls any other person, and such
other person.

For purposes of this paragraph, a person shall be considered
to control another person if the person is legally or
operationally in a position to exercise restraint or
direction over the other person.
``(27) Injurious pricing.--The term `injurious pricing'
refers to the sale of a vessel at less than fair value.
``(28) Injurious pricing margin.--
``(A) In general.--The term `injurious pricing margin'
means the amount by which the normal value exceeds the export
price of the subject vessel.
``(B) Magnitude of the injurious pricing margin.--The
magnitude of the injurious pricing margin used by the
Commission shall be--
``(i) in making a preliminary determination under section
803(a) in an investigation (including any investigation in
which the Commission cumulatively assesses the effect of
sales under paragraph (16)(F)(i)), the injurious pricing
margin or margins published by the administering authority in
its notice of initiation of the investigation; and
``(ii) in making a final determination under section
805(b), the injurious pricing margin or margins most recently
published by the administering authority before the closing
of the Commission's administrative record.
``(29) Commercial interest reference rate.--The term
`Commercial Interest Reference Rate' or `CIRR' means an
interest rate that the administering authority determines to
be consistent with Annex III, and appendices and notes
thereto, of the Understanding on Export Credits for Ships,
resulting from negotiations under the auspices of the
Organization for Economic Cooperation, and entered into on
December 21, 1994.
``(30) Antidumping.--
``(A) WTO members.--In the case of a WTO member, the term
`antidumping' refers to action taken pursuant to the
Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994.
``(B) Other cases.--In the case of any country that is not
a WTO member, the term `antidumping' refers to action taken
by the country against the sale of a vessel at less than fair
value that is comparable to action described in subparagraph
(A).
``(31) Broad multiple bid.--The term `broad multiple bid'
means a bid in which the proposed buyer extends an invitation
to at least all the producers in the industry known by the
buyer to be capable of building the subject vessel.''.

SEC. 102. ENFORCEMENT OF COUNTERMEASURES.

Part II of title IV of the Tariff Act of 1930 is amended by
adding at the end the following:

``SEC. 468. SHIPBUILDING AGREEMENT COUNTERMEASURES.

``(a) In General.--Notwithstanding any other provision of
law, upon receiving from the Secretary of Commerce a list of
vessels subject to countermeasures under section 807, the
Customs Service shall deny any request for a permit to lade
or unlade passengers, merchandise, or baggage from or onto
those vessels so listed.
``(b) Exceptions.--Subsection (a) shall not be applied to
deny a permit for the following:
``(1) To unlade any United States citizen or permanent
legal resident alien from a vessel included in the list
described in subsection (a), or to unlade any refugee or any
alien who would otherwise be eligible to apply for asylum and
withholding of deportation under the Immigration and
Nationality Act.
``(2) To lade or unlade any crewmember of such vessel.
``(3) To lade or unlade coal and other fuel supplies (for
the operation of the listed vessel), ships' stores, sea
stores, and the legitimate equipment of such vessel.
``(4) To lade or unlade supplies for the use or sale on
such vessel.
``(5) To lade or unlade such other merchandise, baggage, or
passenger as the Customs Service shall determine necessary to
protect the immediate health, safety, or welfare of a human
being.
``(c) Correction of Ministerial or Clerical Errors.--
``(1) Petition for correction.--If the master of any vessel
whose application for a permit to lade or unlade has been
denied under this section believes that such denial resulted
from a ministerial or clerical error, not amounting to a
mistake of law, committed by any Customs officer, the master
may petition the Customs Service for correction of such
error, as provided by regulation.
``(2) Inapplicability of sections 514 and 520.--
Notwithstanding paragraph (1), imposition of countermeasures
under this section shall not be deemed an exclusion or other
protestable decision under section 514, and shall not be
subject to correction under section 520.
``(3) Petitions seeking administrative review.--Any
petition seeking administrative review of any matter
regarding the Secretary of Commerce's decision to list a
vessel under section 807 must be brought under that section.
``(d) Penalties.--In addition to any other provision of
law, the Customs Service may impose a civil penalty of not to
exceed $10,000 against the master of any vessel--
``(1) who submits false information in requesting any
permit to lade or unlade; or
``(2) who attempts to, or actually does, lade or unlade in
violation of any denial of such permit under this section.''.

SEC. 103. JUDICIAL REVIEW IN INJURIOUS PRICING AND
COUNTERMEASURE PROCEEDINGS.

(a) Judicial Review.--Part III of title IV of the Tariff
Act of 1930 is amended by inserting after section 516A the
following:

``SEC. 516B. JUDICIAL REVIEW IN INJURIOUS PRICING AND
COUNTERMEASURE PROCEEDINGS.

``(a) Review of Determination.--
``(1) In general.--Within 30 days after the date of
publication in the Federal Register of--
``(A)(i) a determination by the administering authority
under section 802(c) not to initiate an investigation,
``(ii) a negative determination by the Commission under
section 803(a) as to whether there is or has been reasonable
indication of material injury, threat of material injury, or
material retardation,
``(iii) a determination by the administering authority to
suspend or revoke an injurious pricing order under section
806(d) or (e),
``(iv) a determination by the administering authority under
section 807(c),
``(v) a determination by the administering authority in a
review under section 807(d),
``(vi) a determination by the administering authority
concerning whether to extend the scope or duration of a
countermeasure order under section 807(e)(3)(B)(ii),
``(vii) a determination by the administering authority to
amend a countermeasure order under section 807(e)(6),
``(viii) a determination by the administering authority in
a review under section 807(g),
``(ix) a determination by the administering authority under
section 807(i) to terminate proceedings, or to amend or
revoke a countermeasure order,
``(x) a determination by the administering authority under
section 845(b), with respect to a matter described in
paragraph (1)(D) of that section, or
``(B)(i) an injurious pricing order based on a
determination described in subparagraph (A) of paragraph (2),
``(ii) notice of a determination described in subparagraph
(B) of paragraph (2),
``(iii) notice of implementation of a determination
described in subparagraph (C) of paragraph (2), or
``(iv) notice of revocation of an injurious pricing order
based on a determination described in subparagraph (D) of
paragraph (2),

[[Page H6314]]

an interested party who is a party to the proceeding in
connection with which the matter arises may commence an
action in the United States Court of International Trade by
filing concurrently a summons and complaint, each with the
content and in the form, manner, and style prescribed by the
rules of that court, contesting any factual findings or legal
conclusions upon which the determination is based.
``(2) Reviewable determinations.--The determinations
referred to in paragraph (1)(B) are--
``(A) a final affirmative determination by the
administering authority or by the Commission under section
805, including any negative part of such a determination
(other than a part referred to in subparagraph (B)),
``(B) a final negative determination by the administering
authority or the Commission under section 805,
``(C) a determination by the administering authority under
section 845(b), with respect to a matter described in
paragraph (1)(A) of that section, and
``(D) a determination by the Commission under section
845(a) that results in the revocation of an injurious pricing
order.
``(3) Exception.--Notwithstanding the 30-day limitation
imposed by paragraph (1) with regard to an order described in
paragraph (1)(B)(i), a final affirmative determination by the
administering authority under section 805 may be contested by
commencing an action, in accordance with the provisions of
paragraph (1), within 30 days after the date of publication
in the Federal Register of a final negative determination by
the Commission under section 805.
``(4) Procedures and fees.--The procedures and fees set
forth in chapter 169 of title 28, United States Code, apply
to an action under this section.
``(b) Standards of Review.--
``(1) Remedy.--The court shall hold unlawful any
determination, finding, or conclusion found--
``(A) in an action brought under subparagraph (A) of
subsection (a)(1), to be arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law, or
``(B) in an action brought under subparagraph (B) of
subsection (a)(1), to be unsupported by substantial evidence
on the record, or otherwise not in accordance with law.
``(2) Record for review.--
``(A) In general.--For purposes of this subsection, the
record, unless otherwise stipulated by the parties, shall
consist of--
``(i) a copy of all information presented to or obtained by
the administering authority or the Commission during the
course of the administrative proceeding, including all
governmental memoranda pertaining to the case and the record
of ex parte meetings required to be kept by section
843(a)(2); and
``(ii) a copy of the determination, all transcripts or
records of conferences or hearings, and all notices published
in the Federal Register.
``(B) Confidential or privileged material.--The
confidential or privileged status accorded to any documents,
comments, or information shall be preserved in any action
under this section. Notwithstanding the preceding sentence,
the court may examine, in camera, the confidential or
privileged material, and may disclose such material under
such terms and conditions as it may order.
``(c) Standing.--Any interested party who was a party to
the proceeding under title VIII shall have the right to
appear and be heard as a party in interest before the United
States Court of International Trade in an action under this
section. The party filing the action shall notify all such
interested parties of the filing of an action under this
section, in the form, manner, and within the time prescribed
by rules of the court.
``(d) Definitions.--For purposes of this section:
``(1) Administering authority.--The term `administering
authority' has the meaning given that term in section 861(1).
``(2) Commission.--The term `Commission' means the United
States International Trade Commission.
``(3) Interested party.--The term `interested party' means
any person described in section 861(17).''.
(b) Conforming Amendments.--
(1) Jurisdiction of the court.--Section 1581(c) of title
28, United States Code, is amended by inserting ``or 516B''
after ``section 516A''.
(2) Relief.--Section 2643 of title 28, United States Code,
is amended--
(A) in subsection (c)(1) by striking ``and (5)'' and
inserting ``(5), and (6)''; and
(B) in subsection (c) by adding at the end the following
new paragraph:
``(6) In any civil action under section 516B of the Tariff
Act of 1930, the Court of International Trade may not issue
injunctions or any other form of equitable relief, except
with regard to implementation of a countermeasure order under
section 468 of that Act, upon a proper showing that such
relief is warranted.''.
TITLE II--OTHER PROVISIONS

SEC. 201. EQUIPMENT AND REPAIR OF VESSELS.

Section 466 of the Tariff Act of 1930 (19 U.S.C. 1466), is
amended by adding at the end the following new subsection:
``(i) The duty imposed by subsection (a) shall not apply
with respect to activities occurring in a Shipbuilding
Agreement Party, as defined in section 861(22), with respect
to--
``(1) self-propelled seagoing vessels of 100 gross tons or
more that are used for transportation of goods or persons or
for performance of a specialized service (including, but not
limited to, ice breakers and dredges), and
``(2) tugs of 365 kilowatts or more.

A vessel shall be considered `self-propelled seagoing' if its
permanent propulsion and steering provide it all the
characteristics of self-navigability in the high seas.''.

SEC. 202. EFFECT OF AGREEMENT WITH RESPECT TO PRIVATE
REMEDIES.

No person other than the United States--
(1) shall have any cause of action or defense under the
Shipbuilding Agreement or by virtue of congressional approval
of the agreement, or
(2) may challenge, in any action brought under any
provision of law, any action or inaction by any department,
agency, or other instrumentality of the United States, the
District of Columbia, any State, any political subdivision of
a State, or any territory or possession of the United States
on the ground that such action or inaction is inconsistent
with such agreement.

SEC. 203. IMPLEMENTING REGULATIONS.

After the date of the enactment of this Act, the heads of
agencies with functions under this Act and the amendments
made by this Act may issue such regulations as may be
necessary to ensure that this Act is appropriately
implemented on the date the Shipbuilding Agreement enters
into force with respect to the United States.

SEC. 204. AMENDMENTS TO THE MERCHANT MARINE ACT, 1936.

The Merchant Marine Act, 1936, is amended as follows:
(1) Section 511(a)(2) (46 App. U.S.C. 1161(a)(2)) is
amended by inserting after ``1939,'' the following: ``or, if
the vessel is a Shipbuilding Agreement vessel, constructed in
a Shipbuilding Agreement Party, but only with regard to
moneys deposited, on or after the date on which the
Shipbuilding Trade Agreement Act takes effect, into a
construction reserve fund established under subsection (b)''.
(2) Section 601(a) (46 App. U.S.C. 1171(a)) is amended by
striking ``, and that such vessel or vessels were built in
the United States, or have been documented under the laws of
the United States not later than February 1, 1928, or
actually ordered and under construction for the account of
citizens of the United States prior to such date'' and
inserting ``and that such vessel or vessels were built in the
United States, or, if the vessel or vessels are Shipbuilding
Agreement vessels, in a Shipbuilding Agreement Party''.
(3) Section 606(6) (46 App. U.S.C. 1176(6)) is amended by
inserting ``or, if the vessel is a Shipbuilding Agreement
vessel, in a Shipbuilding Agreement Party or in the United
States'' before ``, except in an emergency.''.
(4) Section 607 (46 App. U.S.C. 1177) is amended as
follows:
(A) Subsection (a) is amended by inserting ``or, if the
vessel is a Shipbuilding Agreement vessel, in a Shipbuilding
Agreement Party,'' after ``built in the United States''.
(B) Subsection (k) is amended as follows:
(i) Paragraph (1) is amended by striking subparagraph (A)
and inserting the following:
``(A)(i) constructed in the United States and, if
reconstructed, reconstructed in the United States or in a
Shipbuilding Agreement Party, or
``(ii) that is a Shipbuilding Agreement vessel and is
constructed in a Shipbuilding Agreement Party and, if
reconstructed, is reconstructed in a Shipbuilding Agreement
Party or in the United States,''.
(ii) Paragraph (2)(A) is amended to read as follows:
``(A)(i) constructed in the United States and, if
reconstructed, reconstructed in the United States or in a
Shipbuilding Agreement Party, or
``(ii) that is a Shipbuilding Agreement vessel and is
constructed in a Shipbuilding Agreement Party and, if
reconstructed, is reconstructed in a Shipbuilding Agreement
Party or in the United States, but only with regard to moneys
deposited into the fund on or after the date on which the
Shipbuilding Trade Agreement Act takes effect,''.
(5) Section 610 (46 App. U.S.C. 1180) is amended by
striking ``shall be built in a domestic yard or shall have
been documented under the laws of the United States not later
than February 1, 1928, or actually ordered and under
construction for the account of citizens of the United States
prior to such date,'' and inserting ``shall be built in the
United States or, if the vessel is a Shipbuilding Agreement
vessel, in a Shipbuilding Agreement Party,''.
(6) Section 901(b)(1) (46 App. U.S.C. 1241(b)(1)) is
amended by striking the third sentence and inserting the
following:

``For purposes of this section, the term `privately owned
United States-flag commercial vessels' shall be deemed to
include--
``(A) any privately owned United States-flag commercial
vessel constructed in the United States, and if rebuilt,
rebuilt in the United States or in a Shipbuilding Agreement
Party on or after the date on which the Shipbuilding Trade
Agreement Act takes effect, and
``(B) any privately owned vessel constructed in a
Shipbuilding Agreement Party on or after the date on which
the Shipbuilding Trade Agreement Act takes effect, and if
rebuilt, rebuilt in a Shipbuilding Agreement Party or in the
United States, that is documented pursuant to chapter 121 of
title 46, United States Code.

The term `privately owned United States-flag commercial
vessels' shall also be deemed to include any cargo vessel
that so qualified pursuant to section 615 of this Act or this
paragraph before the date on which the Shipbuilding Trade
Agreement Act takes effect. The term `privately owned United
States-flag commercial vessels' shall not be deemed to
include any liquid bulk cargo vessel that does not meet the
requirements of section 3703a of title 46, United States
Code.''.
(7) Section 905 (46 App. U.S.C. 1244) is amended by adding
at the end the following:
``(h) The term `Shipbuilding Agreement' means the Agreement
Respecting Normal Competitive Conditions in the Commercial
Shipbuilding and Repair Industry, which resulted from

[[Page H6315]]

negotiations under the auspices of the Organization for
Economic Cooperation and Development, and was entered into on
December 21, 1994.
``(i) The term `Shipbuilding Agreement Party' means a state
or separate customs territory that is a Party to the
Shipbuilding Agreement, and with respect to which the United
States applies the Shipbuilding Agreement.
``(j) The term `Shipbuilding Agreement vessel' means a
vessel to which the Secretary determines Article 2.1 of the
Shipbuilding Agreement applies.
``(k) The term `Export Credit Understanding' means the
Understanding on Export Credits for Ships which resulted from
negotiations under the auspices of the Organization for
Economic Cooperation and Development and was entered into on
December 21, 1994.
``(l) The term `Export Credit Understanding vessel' means a
vessel to which the Secretary determines the Export Credit
Understanding applies.''.
(8) Section 1104A (46 App. U.S.C. 1274) is amended as
follows:
(A) Paragraph (5) of subsection (b) is amended to read as
follows:
``(5) shall bear interest (exclusive of charges for the
guarantee and service charges, if any) at rates not to exceed
such percent per annum on the unpaid principal as the
Secretary determines to be reasonable, taking into account
the range of interest rates prevailing in the private market
for similar loans and the risks assumed by the Secretary,
except that, with respect to Export Credit Understanding
vessels, and Shipbuilding Agreement vessels, the obligations
shall bear interest at a rate the Secretary determines to be
consistent with obligations of the United States under the
Export Credit Understanding or the Shipbuilding Agreement, as
the case may be;''.
(B) Subsection (i) is amended to read as follows:
``(i)(1) Except as provided in paragraph (2), the Secretary
may not, with respect to--
``(A) the general 75 percent or less limitation contained
in subsection (b)(2),
``(B) the 87\1/2\ percent or less limitation contained in
the 1st, 2nd, 4th, or 5th proviso to subsection (b)(2) or in
section 1112(b), or
``(C) the 80 percent or less limitation in the 3rd proviso
to such subsection,
establish by rule, regulation, or procedure any percentage
within any such limitation that is, or is intended to be,
applied uniformly to all guarantees or commitments to
guarantee made under this section that are subject to the
limitation.
``(2) With respect to Export Credit Understanding vessels
and Shipbuilding Agreement vessels, the Secretary may
establish by rule, regulation, or procedure a uniform
percentage that the Secretary determines to be consistent
with obligations of the United States under the Export Credit
Understanding or the Shipbuilding Agreement, as the case may
be.''.
(C) Section 1104B(b) (46 App. U.S.C. 1274a(b)) is amended
by striking the period at the end and inserting the
following:

``, except that, with respect to Export Credit Understanding
vessels and Shipbuilding Agreement vessels, the Secretary may
establish by rule, regulation, or procedure a uniform
percentage that the Secretary determines to be consistent
with obligations of the United States under the Export Credit
Understanding or the Shipbuilding Agreement, as the case may
be.''.

SEC. 205. WITHDRAWAL FROM THE AGREEMENT.

(a) Withdrawal.--
(1) Notice.--The President shall give notice, under Article
14 of the Shipbuilding Agreement, of intent of the United
States to withdraw from the Shipbuilding Agreement, as soon
as is practicable after one or more Shipbuilding Agreement
Parties give notice, under such article, of intent to
withdraw from the Shipbuilding Agreement, if paragraph (2)
applies.
(2) Tonnage of new construction in withdrawing parties.--
This paragraph applies if the combined gross tonnage of new
Shipbuilding Agreement vessels constructed in all
Shipbuilding Agreement Parties who have given notice to
withdraw from the Shipbuilding agreement, which were
delivered in the calendar year preceding the calendar year in
which the notice is given, is 15 percent or more of the gross
tonnage of new Shipbuilding Agreement vessels that were
constructed in all Shipbuilding Agreement Parties and were
delivered in the calendar year preceding the calendar year in
which the notice is given.
(3) Termination of withdrawal.--If a Shipbuilding Agreement
Party described in paragraph (2) takes action to terminate
its withdrawal from the Shipbuilding Agreement, so that
paragraph (2) would not apply if that Party had not given the
notice to withdraw, the President may take the necessary
steps to terminate the notice of withdrawal of the United
States from the Shipbuilding Agreement.
(b) Reinstatement of Laws.--If the United States withdraws
from the Shipbuilding agreement on the date on which such
withdrawal becomes effective, the amendments made by section
204 shall be deemed not to have been made, and the provisions
of law amended by section 204 shall, on and after such date,
be effective as if this Act had not been enacted.

SEC. 206. DEFINITIONS.

As used in this title--
(1) the terms ``Shipbuilding Agreement'', ``Shipbuilding
agreement Party'', and ``Shipbuilding Agreement vessel'' have
the meanings given those terms in subsections (h), (i), and
(j), respectively, of section 905 of the Merchant Marine Act,
1936, as added by section 204(7) of this Act; and
(2) the terms ``GATT 1994'' and ``Uruguay Round
Agreements'' have the meanings given those terms in section 2
of the Uruguay Round Agreements Act.
TITLE III--REVENUE OFFSET

SEC. 301. PENALTIES FOR FAILURE TO DISCLOSE POSITION THAT
CERTAIN INTERNATIONAL SHIPPING INCOME IS NOT
INCLUDIBLE IN GROSS INCOME.

(a) In General.--Section 883 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
subsection:
``(d) Penalties for Failure to Disclose Position That
Certain International Shipping Income Is Not Includible in
Gross Income.--
``(1) In general.--A taxpayer who, with respect to any tax
imposed by this title, takes the position that any of its
gross income derived from the international operation of a
ship or ships is not includible in gross income by reason of
subsection (a)(1) or section 872(b)(1) shall be entitled to
such treatment only if such position is disclosed (in such
manner as the Secretary may prescribe) on the return of tax
for such tax (or any statement attached to such return).
``(2) Additional penalties for failing to disclose
position.--If a taxpayer fails to meet the requirement of
paragraph (1) with respect to any taxable year--
``(A) the amount of the income from the international
operation of a ship or ships--
``(i) which is from sources without the United States, and
``(ii) which is attributable to a fixed place of business
in the United States,
shall be treated for purposes of this title as effectively
connected with the conduct of a trade or business within the
United States, and
``(B) no deductions or credits shall be allowed which are
attributable to income from the international operation of a
ship or ships.
``(3) Reasonable cause exception.--This subsection shall
not apply to a failure to disclose a position if it is shown
that such failure is due to reasonable cause and not due to
willful neglect.''
(b) Conforming Amendments.--
(1) Paragraph (1) of section 872(b) of such Code is amended
by striking ``Gross income'' and inserting ``Except as
provided in section 883(d), gross income''.
(2) Paragraph (1) of section 883(a) of such Code is amended
by striking ``Gross income'' and inserting ``Except as
provided in subsection (d), gross income''.
(c) Effective Date.--
(1) In general.--Notwithstanding section 3, the amendments
made by this section shall apply to taxable years beginning
after the later of--
(A) December 31, 1996, or
(B) the date that the Shipbuilding Agreement enters into
force with respect to the United States.
(2) Coordination with treaties.--The amendments made by
this section shall not apply in any case where their
application would be contrary to any treaty obligation of the
United States.
(d) Information To Be Provided by Customs Service.--The
United States Custom Service shall provide the Secretary of
the Treasury or his delegate with such information as may be
specified by such Secretary in order to enable such Secretary
to determine whether ships which are not registered in the
United States are engaged in transportation to or from the
United States.

The CHAIRMAN. No other amendment is in order except the amendment
printed in part 2 of the report. That amendment may be offered only by
a member designated in the report, shall be considered read, shall be
debatable for 1 hour, equally divided and controlled by the proponent
and an opponent, shall not be subject to amendment, and shall not be
subject to a demand for division of the question.
It is now in order to consider the amendment printed in part 2 of the
report.

amendment offered by mr. bateman

Mr. BATEMAN. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:

Amendment offered by Mr. Bateman: In section 3 (page 2,
line 15), strike ``This'' and insert ``Except as provided in
section 206, this''.
Redesignate section 206 as section 209, and insert the
following after section 205:

SEC. 296. APPLICABILITY OF TITLE XI AMENDMENTS.

(a) Effective Date.--
(1) In general.--Notwithstanding any provision of the
Shipbuilding Agreement or the Export Credit Understanding,
the amendments made by paragraph (8) of section 204 shall not
apply with respect to any commitment to guarantee made under
title XI of the Merchant Marine Act, 1936, before January 1,
1999, with respect to a vessel delivered--
(A) before January 1, 2002, or
(B) in the case of unusual circumstances to which paragraph
(2) applies, as soon after January 1, 2002, as is
practicable.
(2) Unusual circumstances.--This paragraph applies in a
case in which unusual circumstances beyond the control of the
parties concerned prevent the delivery of a vessel by January
1, 2002. As used in this paragraph, the term ``unusual
circumstances'' means acts of God (other than ordinary storms
or inclement weather conditions), labor strikes, acts of
sabotage, explosions, fires, or vandalism, and similar
circumstances.

SEC. 207. OTHER LAWS NOT AFFECTED.

The Shipbuilding Agreement shall not affect, directly or
indirectly, the Merchant

[[Page H6316]]

Marine Act, 1920, the Act of June 19, 1886 (46 U.S.C. App.
289), or any other provision of law set forth in Accompanying
Note 2 to Annex II to the Shipbuilding Agreement, and shall
not provide any mechanism to subject any producer of vessels
in the United States to financial penalties, duties, bid
restrictions, unfavorable bid preferences, or withdrawal of
concessions under the GATT 1994 or other Uruguay Round
Agreements, in the competition for international commercial
vessel construction or reconstruction orders because of
construction of vessels by United States shipbuilders for
operation in the coastwise trade of the United States.

SEC. 208. PROTECTION OF UNITED STATES INTERESTS.

Nothing in the Shipbuilding Agreement shall be construed to
prevent the United States from taking any action which it
considers necessary for the protection of essential security
interests or from invoking its sovereign authority to define,
for purposes of exclusion from coverage under the
Shipbuilding Agreement and from any dispute or challenge
based on Annex I to the Shipbuilding Agreement, ``military
vessel'', ``military reserve vessel'', or ``essential
security interest'' on a case by case basis, as determined by
the Secretary of Defense.
In paragraph (1) of section 209 (as redesignated by this
amendment), strike ``and `Shipbuilding Agreement vessel' have
the meanings given those terms in subsections (h), (i), and
(j)'' and insert `` `Shipbuilding Agreement vessel', and
`Export Credit Understanding' have the meanings given those
terms in subsections (h), (i), (j), and (k)''
Page 6, strike line 19 and all that follows through page 7,
line 2.
Page 7, line 3, insert ``(I) if'' before ``the
petitioner''.
Page 7, strike lines 9 through 11 and insert the following:
``(II) if the petitioner was not invited to tender a bid,
the petition''.
Page 7, line 19, strike ``(i)(III)'' and insert
``(i)(II)''.
Page 9, line 10, strike ``(i) or (ii)'' and insert
``(i)(I)''.
Page 9, line 18, strike ``(1)(B)(iii)'' and insert
``(1)(B)(i)(II)''.
Page 49, add the following after line 24:

``SEC. 809. THIRD COUNTRY SALES.

``(a) Filing of Petition.--Any interested party that would
be eligible to file a petition under section 802(b)(1) with
respect to a sale if such sale had been to a United States
buyer may, with respect to a sale of a vessel by a foreign
producer in a Shipbuilding Agreement Party to a buyer in a
third country that is a Shipbuilding Agreement Party, file
with the Trade Representative a petition alleging that--
``(1) such vessel has been sold at less than fair value;
and
``(2) the industry in the United States producing or
capable of producing a like vessel is materially injured by
reason of such sale.
``(b) Determination.--Upon receipt of a petition under
subsection (a), the Trade Representative shall request the
following determinations to be made in accordance with
substantive and procedural requirements specified by the
Trade Representative, notwithstanding any other provision of
this title:
``(1) The administering authority shall determine whether
there is reasonable cause to believe that the subject vessel
has been sold at less than fair value.
``(2) The Commission shall determine whether there is
reasonable cause to believe that the industry in the United
States is materially injured by reason of such sale.
``(c) Complaint by Trade Representative.--If the
administering authority makes an affirmative determination
under paragraph (1) of subsection (b), and the Commission
makes an affirmative determination under paragraph (2) of
subsection (b), the Trade Representative shall make
application to the country of the buyer of the subject vessel
for an injurious pricing action and relief similar to that
available under section 808. The Trade Representative shall
advise the petitioner of the proceedings undertaken by the
third country in response to such application and shall
permit the petitioner to participate in such proceedings to
the greatest extent practicable.''
Page 102, line 9, strike ``or 808'' and insert ``, 808, or
809''.
In the table of contents for chapter 8 of title VII of the
Tariff Act of 1930 (page 3, after line 9), insert the
following after the item relating to section 808:

``Sec. 809. Third country sales.''

Page 100, line 20, strike ``and''; on line 21, strike
``(iii)'' and insert ``(iv)'', and insert the following after
line 20:
``(iii) a military reserve vessel, and''.
Page 101, insert the following after line 15:
``(E) Military reserve vessel.--A `military reserve vessel'
is a vessel that has been constructed with national defense
features and characteristics required by the Secretary of
Defense for the purpose of supporting the United States Armed
Forces in a contingency.

The CHAIRMAN. Pursuant to the rule, the gentleman from Virginia [Mr.
Bateman] and a Member opposed will each control 30 minutes.
The Chair recognizes the gentleman from Virginia [Mr. Bateman].
Mr. BATEMAN. Mr. Chairman, I ask unanimous consent that 15 minutes of
the time allotted to me on the Committee on National Security be
assigned to the gentleman from California [Mr. Dellums].
The CHAIRMAN. Is there objection to the request of the gentleman from
Virginia?
There was no objection.
Mr. BATEMAN. Mr. Chairman, I yield myself as much time as I may
consume.
Mr. Chairman, my amendment will address a number of deficiencies in
the underlying text of H.R. 2754. Again I wish to emphasize that my
complaints with this agreement are not over the pros and cons of
subsidizing this industry or any other industry. This is not a fight
over subsidies. It is, however, a fight over the fairness of this
agreement as it relates to our large domestic shipyards.
This amendment will not make the agreement perfect, but it will
negate to some degree its negative impact on the large shipyards which
have been committed to building naval vessels.
Let me explain how this agreement works from the perspective of our
shipyards during the process of transitioning from 100 percent Navy
work to a combination of Navy and commercial work. Take, for example,
the title XI loan guarantee program which my amendment addresses. Under
the agreement in H.R. 2754, as presently before my colleagues, the
favorable terms are offered effective July 15, 1996. Current law, which
my amendment seeks to retain for a period of 30 months, allows U.S.
Maritime Administration to issue loan guarantees for the construction
of vessels in U.S. yards. Those guarantees allow for a loan repayment
period of up to 25 years and a downpayment required of 12.5 percent.
Under this agreement this will change to a repayment term of only 12
years and require a downpayment of 20 percent.
In simple terms, the shipowner will have to pay off the mortgage
twice as fast and will have to come up with almost double the
downpayment if he chooses to build in a U.S. shipyard.
The more favorable terms which my amendment seeks to retain for only
30 additional months was the product of extensive debate between the
House and the Senate during consideration of the fiscal year 1994
defense authorization bill. The Senate had, at the urging of the
administration, sought to adopt at that time the less favorable terms
which we are being asked to adopt now. The House version recognized
that if we were to offer any chance to our large U.S. yards to move to
commercial ship construction, that we had to offer a program to
encourage foreign purchases to at least give U.S. shipyards one
competitive tool.
The Committee on National Security was well aware that our foreign
competitors had received literally billions of dollars annually in
subsidies. We also knew that it would take more than 24 months to have
our yards retooled and market a totally new product. Remarkably two of
our shipyards, Newport News in Virginia and Avondale in Louisiana are
making the transition having recently begun construction, thanks to
title XI loan guarantees, on double-hull commercial tankers.
It is important to keep in mind that our northern competitors have
benefited from literally billions of dollars in subsidies over the
years. As my colleagues can see from charts that we put before them,
the annual average has exceeded $8 billion for our six major
competitors. Our title XI program has amounted to an average of only
$50 billion since fiscal year 1994.
The advantage of my amendment is severalfold. It brings to an end
subsidies. Yes, it is a compromise. It also recognizes that we cannot
wish budgets, as tight as they are, to afford to get in subsidy battles
with other nations. With the compromise here is that it recognizes that
our foreign competitors were able to retain under the guise of
restructuring a large package which lasts well into 1999.
In other words, my amendment, as it addresses title XI, brings some
measure of fairness to this agreement, fairness which our negotiators
choose not to insist on. It is now up to the Congress to step up and
correct the deficiency.

Let me briefly respond to charges that this amendment will result in
the agreement falling apart. Our negotiators are already at work
getting an extension of the delivery date on vessels which are built
using the title XI

[[Page H6317]]

guarantees. They have already gained a delay of 6 months from the
original effective date.
Now, I appreciate that they do not wish to approach our trading
partners again but for what is, by any fair assessment, a very modest
extension. However, it is the obligation and the duty of Congress not
to accept every agreement that has been negotiated. We are not here to
simply rubber stamp an agreement if we think it is wrong.
Finally, my amendment corrects several other deficiencies,
particularly as they relate to the Jones Act and DOD procurements. As
presently drafted, this agreement may be used as a wedge against the
Jones Act. The Jones Act requires that all merchandise transported to
points in the United States must be carried on U.S.-registered and
U.S.-built vessels. This agreement appears to allow foreign countries
to retaliate against U.S. companies if U.S. shipbuilders construct more
than 200,000 tons of Jones Act trade vessels annually for the first 3
years. After 3 years, any construction creates a presumption that the
rights and balances of the parties is upset and sanctions can be
imposed.
This part of the en bloc amendment simply assures that exemption from
the Jones Act, which our trade negotiators tell us is consistent with
the agreement even though the OECD representatives insist the Jones Act
must go away. The U.S. Trade Representatives noted in our hearing that
European Union interpretation of the Jones Act provisions were wrong.
We are simply making it absolutely clear that nothing in this agreement
affects the Jones Act. The Committee on National Security believes the
changes to domestic law within the jurisdiction of the Congress and the
imposition of penalties by foreign entities for compliance with the
domestic statute is inappropriate. My amendment prevents this from
happening. If our Trade Representative is correct and the Jones Act is
not affected, my amendment clearly can do no harm. If they are
incorrect, my amendment is critically needed. We should protect the
Jones Act and do so, and to do so my colleagues should vote for my
amendment.
Last, my amendment would clarify that nothing in the agreement should
be construed as preventing the United States from taking any action
which it considers necessary for the protection of its essential
security interests. This part of the amendment would allow the United
States to invoke its sovereign authority to define for the purposes of
exclusion from the agreement the terms, quote, military vessel,
unquote, military reserve vessel, or, quote, essential security
interests on a case-by-case basis as determined by the Secretary of
Defense. This part of the amendment would prevent an international
trade organization from defining what is or is not in the national
security interests of the United States.
Finally, this amendment would allow greater rights for U.S.
shipbuilders to petition the U.S. Trade Representative if they believe
other countries are selling ships at less than the cost to foreign
countries.
In conclusion, the Committee on National Security changes are modest,
reasonable, and crucial. They will not bring down this agreement as the
opponents would have us believe. If it does, it demonstrates the
signatories are not seriously interested in ending shipbuilding
subsidies, and if they are not so interested, then the agreement is
worthless.
I urge my colleagues' support if they believe it is important to
preserve a strong defense industrial base that will be available if,
God forbid, we ever need to mobilize our shipbuilders.
Mr. Chairman, I reserve the balance of my time.
The CHAIRMAN. Is the gentleman from Illinois [Mr. Crane] opposed to
the amendment?
Mr. CRANE. I am, Mr. Chairman.
The CHAIRMAN. The gentleman from Illinois is recognized for 30
minutes.
Mr. CRANE. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, I am adamantly opposed to this amendment. If
implemented, it would cause the agreement to disintegrate, leaving us
with nothing but many wasted years. Make no mistake: the amendment
violates the agreement in a fatal way. We have received letters from a
number of our trading partners telling us that if this amendment is
adopted, we will not have implemented the agreement and that they will
not renegotiate the agreement. We cannot afford to have them walk away.
Let me rebut the arguments raised by the supporters of this
amendment. First, we do not need to eliminate our title XI program in
order to comply with the agreement. We merely have to scale it back to
meet the agreement requirements, just as our trading partners must. We
will achieve balance instead of a war of escalation that we cannot and
will not win.
Second, our national security is completely protected under the
agreement. The agreement contains an exception that allows a government
to back away if it believes its national security interests are at
stake. The Department of defense has also sent us a letter stating, and
I quote, that ``the Agreement will not adversely affect our national
security.'' This statement is powerful evidence that the agreement does
not threaten our national security.
Third, our negotiators were able to achieve an exception for the
Jones Act, something no other country was able to achieve. Although I
agree that the Jones Act is not affected, I do not believe that we need
specific statutory language that says so. But more importantly, I
believe that this amendment goes too far. I am concerned that we could
potentially violate a whole series of agreements, let alone the
Shipbuilding Agreement, by prohibiting such measures from taking
effect. There is no need to put us at such risk. As the Defense
Department stated in the letter I quoted earlier, the agreement ``does
not change cabotage laws, that are clearly vital to our national
security.''
We have heard some discussion that the amendment represents a
compromise position because there are some members that wanted even
tougher language. Mr. Chairman, a serious violation is still a serious
violation. Merely because the amendment keeps the current title XI
program in effect for 30 months as opposed to a longer period of time
does not change the fact that any extension of the current title XI
program violates the agreement.
Nor can it be said that the amendment merely extends the transition
period. Let us not be naive. We would be asking for more benefits than
we currently have but, at the same time, would be requiring our trading
partners to implement all of the terms of the agreement immediately.
But trade agreements do not work that way. We have to give up
something, too. But the reality is that our shipyards will feel the
pinch considerably less than our trading partners: Our $50 million in
title XI loan guarantees compared to billions of dollars in foreign
subsidies. And we do not even have to give up our $50 million. Instead,
we just have to make sure that we do not make guarantees in a manner
that violates the agreement.
Let me read what our administration and some of our trading partners
have said about the amendment. U.S. Trade Representative Charlene
Barshefsky has stated:

I want to make clear that the substitute amendment to H.R.
2754 approved by the National Security Committee * * *
modifies the legislation in ways that are clearly
incompatible with the agreement and unacceptable to the other
signatories.

The EU Ambassador to the United States has stated:

This amendment clearly is inconsistent with the terms of
the agreement as negotiated between the parties. * * * This
significant amendment would not be acceptable to the European
Community since it would be contrary to the basic objectives
and balance of mutual concessions contained in the agreement.
I cannot envisage the circumstances under which signatories
of the OECD agreement would be willing to reopen
negotiations. The adoption of the amendment would put the
agreement in serious jeopardy.

The OECD has stated:

If this amendment is attached to H.R. 2754 and passed by
the House of Representatives, the United States is putting in
jeopardy the entry into force of the Agreement.

For all of these reasons, Mr. Chairman, let me be clear that a vote
for the amendment is a vote against the agreement. Contrary to what the
supporters are arguing, this amendment would not improve the agreement;
it would destroy it. I urge my colleagues to join

[[Page H6318]]

together in a bipartisan effort to support our shipbuilding industry
and to oppose the amendment.
Mr. Chairman, I include the following information for the Record:
Organisation for Economic

Co-operation and Development,

Paris, June 4, 1996.
Hon. Herbert H. Bateman,
House of Representatives,
Washington, DC.
Dear Congressman: I understand that the mark-up by the
House National Security Committee of HR 2754, a bill to
approve and implement the provisions of the 1994 ``Agreement
Respecting Normal Competitive Conditions in the Commercial
Shipbuilding and Repair Industry'' has led to an amendment by
yourself, among others, that would extend the provisions of
the present Title XI Loan Guarantee Program until January
1999, with the vessels constructed using these terms being
required to be delivered by January 1, 2002. It is clear that
this proposal will be in contradiction to the Agreement and a
breach of its provisions. As you know, the essential approach
to shipbuilding subsidization in the Agreement and a
guarantee of its effectiveness is equal treatment of all
Parties and quick elimination, i.e. by entry into force, of
all existing support measures.
Let me therefore express my great concern that if this
amendment is attached to HR 2754 and passed by the House of
Representatives, the United States is putting in jeopardy the
entry into force of the Agreement.
Failure to bring the Agreement into effect, though possibly
of some advantage for the US shipbuilding industry in the
very short-term, will be of great harm to it in the longer-
term. Failure will, inter alia, prompt a resurgence of
shipbuilding subsidies in the other countries--which as you
know have severely affected the competitiveness of US yards
in the past. Furthermore, it would deprive the United States
shipbuilding industry of the tool to act against dumping in
the world shipbuilding market.
I therefore urge you to reconsider your amendment as the
legislation makes its progress on the floor of the House of
Representatives. Strict and immediate implementation of the
Agreement seems to me to be the way of ensuring the long-term
viability of the shipbuilding industries in the United
States, as well as those of the other Parties to the
Agreement.
Sincerely,
P.M. Olberg,
Ambassador.
____

European Union, Delegation

of the European Commission,

Washington, DC, May 31, 1996.
Hon. Herbert H. Bateman,
House of Representatives,
Washington, DC.
Dear Congressman: I am writing on behalf of the European
Commission to express our considerable concern with respect
to the amendment passed by the House National Security
Committee in its mark-up of the OECD shipbuilding
implementing legislation. The amendment calls for an
extension of the term of Title XI financing for ship
construction for thirty months. Furthermore the amendment
would clearly state that the agreement does not require
changes in the Jones Act and that certain Department of
Defense procurements are not covered.
This amendment clearly is inconsistent with the terms of
the agreement as negotiated between the parties.
The agreement is the result of five years of complex
negotiations which have led to the adoption of the basic
principles originally proposed by the United States (i.e. the
prohibition of virtually all forms of future government
subsidies). Therefore this significant amendment would not be
acceptable to the European Community since it would be
contrary to the basic objectives and balance of mutual
concessions contained in the agreement. I cannot envisage the
circumstances under which signatories of the OECD agreement
would be willing to reopen negotiations.
The adoption of the amendment would put the agreement in
serious jeopardy. Therefore, I should like to urge you to
take the above into account in future consideration of the
bill.
Sincerely Yours,
Hugo Paemen,
Ambassador.
____

Embassy of Japan,

Washington, DC, June 5, 1996.
Hon. Philip M. Crane,
House of Representatives,
Washington, DC.
Dear Congressman Crane: Upon the instruction from my
government, I wish to draw your attention to an important and
urgent matter concerning the ``OECD Shipbuilding Agreement''
(the Agreement respecting Normal Competitive Conditions in
the Commercial Shipbuilding and Repair Industry) which is to
be ratified by 15 June.
Recently we were informed that the amendments of the
implementing bill, which would not be consistent with the
obligations under the Agreement, was made in a U.S. House
committee. We noted with surprise that such an action has
been taken in the U.S., which was the initiator and driving
force behind the negotiations of the Agreement.
This Agreement was negotiated for several years and aims to
reach normal competitive conditions in the world commercial
shipbuilding and repair industry. We are gravely concerned
that amending the Agreement would, in fact, make it
impossible to enter into force. It would seriously undermine
the credibility of the U.S., if the Agreement, made by the
U.S. initiatives, would not enter into force due to the U.S.
failure to conclude it.
In Japan, this Agreement was approved by the House of
Representatives on 31 May and is to be put to a vote in the
responsible committee of the House of Councilors in the very
near future. The implementing legislation was already
approved by the Diet on 5 June. Thus, we are approaching to
the goal in time for the target date of 15 June.
I would like to invite you to review the above situations
and impacts and strongly encourage the U.S. to quickly
conclude this Agreement as it is.
Sincerely,
------ Saito,
Ambassador of Japan.
____

Royal Norwegian Embassy,

Washington, DC, June 5, 1996.
Hon. Charlene Barshefsky,
Acting U.S. Trade Representative,
Washington, DC.
Dear Ambassador Barshefsky: I am writing to you to express
the Norwegian Government's grave concern regarding the
amendments passed by the National Security Committee of the
House of Representatives in its mark-up last week of the
legislation for implementation of the OECD Shipbuilding
Agreement.
Several of the amendments, most notably the provisions for
extending the Title XI shipbuilding loan guarantee program
and the provisions for removing the applicability of the
Agreement with respect to the building of Jones Act vessels,
are clearly inconsistent with the terms of Agreement.
The OECD Shipbuilding Agreement is the result of many years
of complex negotiations and represents a carefully crafted
compromise between the parties to the Agreement. My
Government holds the view that the Agreement is of vital
importance for the return to normal competitive conditions in
the commercial shipbuilding industry.
Norway has ratified the OECD Agreement, and would find that
the introduction of amendments such as those proposed by the
National Security Committee would destroy the balance of
obligations and, thus, undermine the foundation upon which
the Agreement was built. On the Norwegian side, we do not
foresee circumstances whereby the signatories of the OECD
Agreement would be prepared to reopen negotiations.
Hoping that you will convey to Congress Norway's concern
that adoption of the aforementioned amendments would
seriously jeopardize the OECD Agreement, I remain.
Sincerely yours.
Karsten Klepsvik,
Charge d'Affaires ai.

{time} 1200

Mr. Chairman, I reserve the balance of my time.
Mr. DELLUMS. Mr. Chairman, I yield 1 minute to my distinguished
colleague, the gentlewoman from Oregon [Ms. Furse].
Ms. FURSE. Mr. Chairman, I rise in strong support of the Bateman
amendment. It is absolutely essential for our national security and the
security of our economy that we continue to have a shipbuilding
industry. It seems to me, Mr. Chairman, that there is no better public-
private partnership than the loan guarantee. I want to congratulate the
gentleman from Virginia [Mr. Bateman] for having brought this
absolutely vital amendment to us. I urge my colleagues to support it,
both for the economy and for our national security.
Mr. DELLUMS. Mr. Chairman, I yield 4 minutes to my distinguished
colleague, the gentleman from Illinois [Mr. Lipinski].
Mr. LIPINSKI. Mr. Chairman, I want to thank the gentleman from
California for yielding this time to me.
Mr. Chairman, as the former chairman of the Committee on Merchant
Marine and Fisheries, or as the chairman of the late Committee on
Merchant Marine and Fisheries, I rise today in very strong support of
the amendment offered by the gentleman from Virginia [Mr. Bateman]. Mr.
Bateman and I, when we had the Committee on Merchant Marine and
Fisheries, worked very, very hard on behalf of the maritime industry. I
am very happy that he has continued to do so over on the Committee on
National Security, as I have tried to do on the Committee on
Infrastructure and Transportation.
Mr. Chairman, I commend the gentleman from Virginia and the other
members of the National Security Committee for recognizing the need to
improve the OECD Shipbuilding Trade Agreement to make it more equitable
for the United States shipbuilding industry.
The United States initiated negotiations for the OECD Shipbuilding
Trade

[[Page H6319]]

Agreement 5 years ago in order to end the massive government subsidies
that give foreign shipbuilders an unfair competitive advantage.
Unfortunately, the final OECD agreement fails to meet the objective of
eliminating foreign government shipbuilding subsidies. For instance,
the agreement contains a major restricting loophole which European
Governments are using to spend millions of dollars for the
modernization of their shipyards. In fact, the French Government
refused to even sign the agreement until it was allowed to spend $480
million for such restructuring of its shipyards. In addition, United
States trade negotiators agreed to grandfather certain subsidy programs
by South Korea and Germany, which were initiated during the
negotiations. Yet, the United States is expected to immediately
depredate the title XI loan guarantee program for U.S. shipbuilders--
despite the fact that U.S. shipbuilders have not enjoyed a direct
Government subsidy in over a decade.
The OECD agreement is full of loopholes and exemptions that will
benefit foreign shipbuilders. Moreover, the agreement does not even
cover such major shipbuilding nations such as Poland, China, Taiwan,
and Russia, allowing those countries to continue their direct and
substantial subsidization of their domestic shipbuilding. Yet, the
United States is expected to immediately reduce the current Title XI:
Loan Guarantee Program. This will cause immediate harm to the U.S.
shipbuilding industry.
With Navy shipbuilding at an all time low, it is critical for our
yards to secure commercial work. And, for the first time in 35 years,
American shipbuilders are experiencing a resurgence in commercial
business. These recently signed commercial contracts were made possible
by the Title XI: Ship Loan Guarantee Program. Yet, the OECD agreement
and the bill would bring a screeching halt to this resurgence by
rendering the title XI program ineffective.
A 30-month extension of the modest title XI, as provided in the
Bateman amendment, is needed to give U.S. shipyards an adequate
transition period to ensure their continued viability. This is a
reasonable request when compared to the unfair competitive advantage
subsidized foreign shipbuilders have enjoyed for the past decade--and
will continue to enjoy in China, Poland, and other nonsignatory
nations.
This amendment is the absolute minimum we can, and must, enact. I
urge my colleagues to support the Bateman amendment.
Mr. CRANE. Mr. Chairman, I yield 2 minutes to the gentlewoman from
Washington [Ms. Dunn].
Ms. DUNN of Washington. Mr. Chairman, I thank the gentleman for
yielding time to me.
Mr. Chairman, I rise in support of H.R. 2754 as approved by the
Committee on Ways and Means, and to commend the chairman of the
committee and the gentleman from Florida [Mr. Gibbons] for their
steadfast work in securing enactment of this historic agreement.
Unfortunately, in spite of their efforts, some individuals argue that
no agreement is better than this agreement. In reality, if the Bateman
amendment is adopted, that is exactly what we would have: No agreement.
To all those people, I say, take off your blinders and recognize
that, embodied in this agreement, is our best chance to revitalize our
domestic industry. For years we have witnessed the continued decline of
the U.S. shipbuilding industry at the hands of massive foreign
subsidization. The remaining American commercial shipbuilders have
become the most efficient in the world. Yet no amount of belt-
tightening could ever overcome the enormous subsidy margins provided by
their foreign competitors.
Over the past several years, many have expressed frustration with the
negotiating of this agreement. I must say that while the road to this
final agreement has been extremely difficult, I am confident that this
agreement provides our domestic shipbuilders with the best opportunity
to compete in a fair world market.
If Members believe they are helping our domestic shipbuilding
industry by voting for the Bateman amendment, let me tell the Members,
I believe they are wrong. Our failure to pass this measure as approved
by the Committee on Ways and Means will likely spur existing subsidies
by our foreign competitors to record levels, and this would certainly
be the final and fatal blow to our domestic shipbuilding industry.
Mr. Chairman, I urge my colleagues to defeat the Bateman amendment
and adopt this historic and sound international agreement.
Mr. BATEMAN. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman
from California [Mr. Cunningham].
Mr. CUNNINGHAM. Mr. Chairman, I commend the loyalty of the
gentlewoman from Washington [Ms. Dunn] to the chairman of the committee
she serves on, but I believe she is wrong.
Mr. Chairman, let me go to a little different direction. I truly
believe that both under Republican and Democrat administrations, our
State Department has been the weak link of this country. While we have
strong militaries, the American worker can compete against any nation
in the world, but yet our trade agreements which I supported, NAFTA and
GATT, they have been treated very, very poorly as far as the
administration of them. Who ends up paying for that? The American
worker, Mr. Chairman.
If we take a look in which title XI uses $50 million, why was it
created in the last couple of years? Under OPA 90 we wanted to build
dual hull tankers. There is no money to build ships in the United
States, because foreign nations have subsidized by billions of dollars
and cut on the west coast. NASCO is the only shipbuilder left on the
west coast. We only built one ship in this decade, because foreign
nations, with their cutthroat economic tactics, have cut and killed the
American worker. So we established it not only to help the environment,
so we could build tankers, but to neutralize that system.
In the meantime, while we build one ship, they build 100. I cannot
tell the Members just the economy of scale. If you build 100 ships, it
is much cheaper to build those ships. They say let us do away with
title XI, and that will neutralize this situation. No, it will not, Mr.
Chairman, because they still have the advantage of all of these orders
and all of these ships they are building, which makes our ships cost
much more, which we cannot sell. All we are asking is to give us a
level playing field.
Mr. Chairman, I think for the first time this country has a chance to
walk softly and carry a big stick. Let us approach this trade agreement
for a change with a benefit to the American worker, not to the benefit
of foreign trading interests. The President was right on his trading
policies, but we have to get tough.
Do Members think the Secretary of State, under either Republican or
Democratic administrations, is going to push and support this? No, they
are not. Let us support the American worker, let us support the Bateman
amendment.
Mr. CRANE. Mr. Chairman, I yield 2 minutes to the gentleman from
Florida [Mr. Deutsch].
Mr. DEUTSCH. Mr. Chairman, the agreement that is really before us,
the OECD agreement, is an agreement which I think all of us would
argue, at least the concept of the agreement, will greatly benefit the
United States of America. It would end the subsidies that other
countries have been doing for years, the dumping that other countries
have done for years to adversely affect the American shipbuilding
industry.
All we need to do is look at the facts on the ground in this country
today, or the facts in the shipyards. Those facts are that the United
States right now does not sell very many ships in terms of the world
market, an infinitesimal percentage of those ships in the world market,
because of the type of system that exists today and that this agreement
is trying to end.
Now in front of us, the Bateman amendment says, well, this agreement
is going to adversely affect the defense of the United States of
America, our national security. That is why we need the Batement
amendment. I would reiterate what actually has been pointed out by the
chairman of the subcommittee previously, the gentleman from Illinois
[Mr. Crane], that the Defense Department, the Joint Chiefs, have
obviously gone through this agreement, have sent correspondence to the
chairman of the committee the gentleman

[[Page H6320]]

from South Carolina, [Mr. Spence] specifically, categorically stating
that there would be no adverse effect. There is a specific national
defense exemption that exists in the agreement.
Mr. Chairman, I think it is really unfortunate to raise this issue,
really almost as a scare tactic, versus what the facts are as based
through the Joint Chiefs.

{time} 1215

The other issue that I would raise is, it has been brought out, the
whole issue that this is a jobs loss issue for the United States of
America. Let us look at the facts. The facts are we are not producing a
heck of a lot of jobs in terms of commercial production and, in fact,
the commercial production that would exist, the potential for us to
compete in that market is far greater than really any potential loss
that exists.
Mr. DELLUMS. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, let me surface an issue that has not been dealt with
and just put it on the table so we all can look at it. That is that
this bill, there is joint jurisdiction on this piece of legislation.
The tragedy of this institution is that we tend to get caught up and
see the world in very narrow terms, and that is through the narrow
prism of our committee jurisdiction. But someone was wise enough, Mr.
Chairman, to refer this bill to two committees.
I would hope that the process would allow us to bring together the
perspectives and the perceptions of both committees in the hope that in
joining those two perceptions, we will arrive at the wisest decision,
so we do not get caught up in knee-jerk responses on the basis of a
committee jurisdiction. I do not know taxes. I am not on Ways and
Means. But I will debate anyone in this town on national security
matters, because that has been my job for 25 years here.
We looked at this bill. Where are we in agreement? First, that this
is a maritime nation. Second, that we need to stimulate shipbuilding.
Third, that we need to stimulate commercial shipbuilding. Fourth,
that American workers and shipbuilders believe that it is in their
mutual self-interest to end government subsidies of shipbuilding. So
let us take that off the table. We all agree with that, so we do not
have to sword fight over these issues.

Where is the area of disagreement? The area of disagreement is that
we believe that this agreement is flawed with respect to its transition
implications. When speaking to the persons that negotiated the
agreement, they admitted that they never sought transition assistance
to the American shipbuilding industry.
Did other countries do it? The answer is yes. I repeat, and
underscore for the purposes of emphasis: Spain, $1.4 billion in
restructuring aid; Portugal, $110 million in restructuring aid;
Belgium, $74 million in restructuring aid; South Korea, restructuring
aid, we believe that that amount is somewhere around $750 million plus
bailout guarantees to the Daewoo shipbuilding industry.
France, unknown total amount at this time, but we know minimally $480
million. Special offers are currently being made by other members of
the European Community to gain France's support for this agreement.
Germany, a package to modernize, restructure, and cover losses of
shipyards in the former East Germany.
So some other Nation's negotiators looked at transition, and these
subsidies that I spoke to were granted to January 31, 1999, Mr.
Chairman. So somebody saw the need for transition.
We are being asked to ratify an agreement, as I have said on more
than one occasion today, and we have a responsibility to bring our
intellectual capacity, our economic understanding and our political
prowess to this situation and make the best decision. We tend to engage
in hyperbole around here. ``Killer amendment.'' I have not seen
anything die in the 25 years I have been around here, and I have gone
after some things to try to kill them, so that is a bunch of hyperbole,
Mr. Chairman.
As I said before, the world wants this agreement, we want this
agreement, I want this agreement, the shipbuilders want the agreement,
and thousands and thousands of American workers want this agreement.
They are the stakeholders. But when they looked at the agreement, they
said, ``Hey, fellows, what about the transition? What about us until
January 1999?'' All the Bateman amendment does is says, ``Here is some
transition assistance, 30 months.''
Loan guarantee program. Where were all the people around here when we
put in this loan guarantee program and fought to get a measly $50
million in loan guarantees for an economic conversion program because a
lot of people said, ``Wait a minute, you're spending DOD dollars to
stimulate commercial shipbuilding development?'' We said that if we do
not build some kind of ships, we are going to lose our industrial base.
That is why we have a National Security Committee. That is why we
have Ways and Means. We study certain things, but our collective
perception is where the great wisdom is.
We are simply saying that this is an important agreement, it is a
wonderful agreement. I have complimented the gentleman from Florida and
I said, without equivocation, I am one of his greatest fans on the
floor of this Congress. There is no finer person in this institution.
I am simply saying that my point of departure is on the basis of the
problems that it gives our American shipbuilding industry in the
transition, and our American workers, who are extremely sensitive to
these issues. They have all communicated with all of us here and said,
``We want the agreement, the intent makes sense, but in the transition,
we feel disadvantaged.''

I do not think this agreement dies, because there is an imperative
larger than this amendment. It is the world community coming together.
But we can enter that stage, that world stage, as rational and
intelligent people and say, just as these other nations did in their
restructuring aid, that we can restructure as well.
That is what this gentleman's argument is all about, not to kill the
agreement. That would be stupid. It would be bizarre. It would be
extreme. It would be self-defeating. But it would seem to me to allow
it to go forward when other nations continue to have this kind of
extraordinary advantage to January 1999 stabs at the agreement, the
very people we choose to help, the American shipbuilding industry, the
American worker, and at the end of the day the American citizen,
because we are a maritime Nation.
That is this gentleman's argument, so I am not trying to engage in
any scare tactics, but I would make this point. We have six major
shipbuilding industries, and when Ronald Reagan was spending $300
billion a year on the military budget, everybody was building ships,
they were coming out of our ears. That day is over. There is no such
thing as a 600-ship Navy anymore. The gentleman from Mississippi
pointed out we are moving toward a 150-ship Navy.
So if we are not going to build naval ships because we are cutting
the military budget, we have got to build some other kind of ships to
keep this going, keep these people working, keep the economy moving. It
is in the area of commercial ships, in a post-cold-war environment,
where our future lies. So we want to see this agreement, but we want to
see the transition period speak to us as eloquently as this
restructuring speaks to these other countries that are moving toward
signing this agreement.
A final point. One of my colleagues said that this amendment would
violate the agreement. We cannot violate anything that we have not
agreed to as yet. That is why we are here, to use our brains, to use
our ingenuity, to use our competence to decide how and what we will
agree with.
I hope my colleagues will join me in overwhelming support of the
Bateman amendment, overwhelming support of the American shipbuilding
industry, overwhelming support of the hundreds of thousands of American
workers who desperately need us to do this, and overwhelming support
for a transition period that speaks to the dignity of the respect and
the reality of the American shipbuilding industry.
Mr. Chairman, I reserve the balance of my time.
Mr. CRANE. Mr. Chairman, I yield 2 minutes to the gentleman from Ohio
[Mr. Sawyer].

[[Page H6321]]

Mr. SAWYER. Mr. Chairman, the comments of our colleague from
California are eloquent as always. I take a back seat to no one in my
admiration of the work that he has done in the interests of economic
conversion. Nothing could be more important to the economy of this
Nation.
Mr. Chairman, in many areas, American industries and their workers
have had to complete against heavily subsidized European firms. Even
where the gap between the level of subsidies has been the greatest--
most notably in the areas of aerospace and agriculture--American
industries have largely been able to overcome this added challenge.
However, in shipbuilding, American firms have simply been at too
great a disadvantage. We have two choices of actions to address this:
complete by enacting--and inevitably increasing--our own subsidies, or
use our economic leverage to convince our trading partners to reduce
their own subsidies.
As public sector deficits have emerged as an increasing drag on the
economies of all nations, those partners have seen the advantages of
reducing their spending on subsidies. That is part of the reason we
have this agreement before us today.
We must also recognize the reality that we cannot afford a subsidy
war. The continuation of the title XI program unchanged for another 3
years, as the Bateman amendment would accomplish, will not alter that
fact. It will only convince our trading partners to resurrect the
subsidies that have crippled our ability to compete in the past.
The complexities and challenges of international competition will
continue to cause pain and disruption in this country and across the
world. But when we can convince other nations to level the
international playing fiend, the opportunities of trade become that
much more apparent. The decision we face today is between seizing such
an opportunity or hanging on to the vestiges of a disappointing past. I
urge my colleagues to oppose the Bateman amendment and support the
bill.
Mr. BATEMAN. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman
from Maine [Mr. Longley].
Mr. LONGLEY. Mr. Chairman, I will be supporting the Bateman
amendments, but I also want to make clear that I do not think the
shipbuilding agreement itself is the solution. It will in all
likelihood make much more difficult if not impossible U.S.
shipbuilders' pursuit of commercial shipbuilding orders in the
international market.
This agreement is fatally flawed in that it permits other governments
to continue direct subsidy shipbuilding payments to their yards until
1999 as long as those subsidies are committed by the end of this year.
The last direct U.S. commercial subsidy program was unilaterally
terminated by our Government in 1981, a full 15 years ago. I find it
appalling that U.S. negotiators took part in formulation of an
agreement in which numerous exceptions are granted to specific
subsidizing foreign governments totaling billions of dollars. How this
combination of provisions does anything other than make the
international commercial playing field even more lopsided against
unsubsidized American shipbuilders escapes me.
A French shipyard received a subsidy package in the range of $480
million after the agreements were concluded and our negotiators had
returned home. That event alone should have provided more than ample
grounds for our Government to insist on reopening the negotiations for
the purpose of gaining more equitable treatment for the unsubsidized
U.S. industry. Other subsidies are actually provided for in the
agreement, including subsidies to Spain, Portugal, and Belgium.
It is unfortunate, to say the least, that the administration chose to
ignore this information and not respond favorably last December to the
formal request of the six major U.S. shipbuilders which represent 95
percent of all active American shipbuilding workers that the United
States not sign the agreement in its present form.
I will support the Bateman amendments but I will also oppose final
passage. Bateman will fix some of the weaknesses in the bill, but, by
the same token, they do not go far enough.
Mr. CRANE. Mr. Chairman, I yield 2 minutes to the gentleman from New
Mexico [Mr. Richardson].
(Mr. RICHARDSON asked and was given permission to revise and extend
his remarks.)

{time} 1230

Mr. RICHARDSON. Mr. Chairman, I speak as a 14-year member of the
Democratic Party with a 90-percent labor voting record. The AFL-CIO has
been mentioned here. Yes, they are opposed, but let me state that their
opposition stems from following the lead of the big Navy-oriented
yards.
Mr. Chairman, while 80 percent or more of total employment in
shipbuilding is in these big yards, these yards primarily build Navy
ships, not commercial ships. Over 90 percent of commercial ships are
build in yards other than these Navy yards. The bill does not affect
military ships. The big Navy yards are hopeful for big new subsidies
for commercial ships. That is very enlightening. Jobs would be created
for commercial yards to build more, but they cannot compete with the
much larger subsidies from foreigners.
Foreign subsidies are more than $4 billion. U.S. subsidies are $50
million. This is the reason for the agreement to eliminate these
subsidies, so we can create more American jobs, so our shipbuilders are
more active and can compete more. The agreement would eliminate these
unfair subsidies that we cannot compete with.
This is a good bill, this is an amendment that would violate the fair
trade agreement.
Significant growth is projected for the highly competitive
international shipbuilding market, while domestic military and
commercial markets are expected to be small. The commercial
shipbuilding market is projected to be $265 billion for the period 1992
to 2001.
American shipbuilders are being squeezed out of this market by heavy
foreign government shipyard subsidiaries. This agreement eliminates
those subsidies and allows the American builders to compete on a level
playing field with the major shipbuilding countries of the world.
We are in the midst of tight fiscal pressures to reduce our own
spending, we cannot compete with major industrialized nations in a race
to subsidize our shipping industries.
The United States must take the lead in implementing this agreement.
It will signal our commitment to freer markets to the international
community. The strength of U.S. industry is its ability to compete.
This agreement will give American shipbuilders the opportunity to
expand operations and increase their production.
International leadership requires courage and vision. Let's
demonstrate to the world that we are looking forward and embracing the
principles that have made America great.
Mr. STUDDS. Mr. Chairman, will the gentleman yield?
Mr. RICHARDSON. I yield to the gentleman from Massachusetts.
Mr. STUDDS. Mr. Chairman, I thank the gentleman for yielding to me,
and I want to associate myself with his remarks and rise in opposition
to the amendment and in support of the bill.
Let me say sadly and somewhat soberly that we have been here before.
In the early 1980's, this country decided that it could no longer
afford to and no longer wished to try to compete with the subsidies of
foreign nations for the construction of vessels. We withdrew and,
ironically, this agreement before us, the ratification of it, is a
result, ultimately, of a suit brought under our own trade laws by our
own shipbuilding industry, which concluded they could not possibly win
a battle of competition with the subsidies of foreign nations.
We cannot afford to go back there. I think in the long run our best
bet is a world without these subsidies and, therefore, I complement the
gentleman and join him in his remarks.
Mr. CRANE. Mr. Chairman, I yield myself such time as I may consume.
The gentleman from Virginia [Mr. Bateman] stated earlier that because
the USTR is reopening the agreement to add 6 months to the delivery
date, that it can renegotiate to permit us to retain title XI. And I
want to explain to colleagues that is not correct. It will be
impossible to reopen the agreement, as Mr. Bateman suggests.
The agreement currently provides that no subsidies may be awarded
under the agreement after the effective date of the agreement, July 15.
Subsidies may be granted before that point as long as the vessel is
constructed by December 31, 1998. The signatories had originally agreed
that the agreement would take effect on February 1, 1996. That date had
to be delayed 6 months because the United States was not

[[Page H6322]]

ready to implement. However, the December 31, 1998, delivery date
remained in place.
The administration is merely seeking a change applicable to all
countries that would extend the delivery date 6 months to match the
delayed starting date. The administration is not renegotiating the
agreement. This change can be made merely through an understanding.
Our trading partners appear to be willing to discuss this limited
change that applies to all countries equally. However, our trading
partners have told us that they will not renegotiate the agreement
under the terms set forth in the Bateman amendment because it would
destroy the balance in the agreement and give the United States an
undue advantage.
Mr. Chairman, I reserve the balance of my time.
Mr. BATEMAN. Mr. Chairman, I yield 2 minutes to the gentleman from
California [Mr. Hunter].
Mr. HUNTER. Mr. Chairman, I thank the gentleman for yielding me this
time. I want to make a couple of closing remarks, first to my friend,
the gentleman from Illinois [Mr. Crane], a dear friend and one of the
real leaders in this Congress with respect to trade. I know that the
President's, the Clinton administration's appointees in the Pentagon
have said there is no threat to national security. They also told us
the other day and repeated in a statement there is no threat to this
country in terms of incoming ballistic missiles. Both of us disagree
with the second statement that they made, and I think we should both
disagree with the first statement they have made.
Mr. Chairman, I want to remind my colleagues that all of the nations
which are signatories to this agreement, all the major nations that are
asking us to give up our national shipbuilding program, are nations
that in this century have been saved militarily or protected militarily
by America's national shipbuilding program. They will wait for us to
work this agreement and make it right before they sign it.
Second, my colleagues, this is a sovereignty issue. We are doing the
same thing we did in the World Trade Organization, where we are giving
up the right to a foreign judge to decide what is a military program.
And I would just remind Members that the latest World Trade
Organization ruling under WTO, in which foreign judges said Brazil and
Venezuela can send dirty gas into the United States and, in the absence
of that, retaliate against Americans, because they said that our
environmental laws were in conflict with the World Trade Organization's
ideas of what those laws should be. We will see exactly the same thing
here because these foreign tribunals reserve to themselves the
definition of what is an American military shipbuilding program.
This is a sovereignty issue. Every single conservative should vote
against the bill and for the Bateman amendment because it fixes some of
those sovereignty problems on that basis. This is also predominantly a
national security issue. I would hope that when national security goes
head to head with economic considerations, national security with
respect to maritime power should predominate. Please vote for the
Bateman amendment.
Mr. CRANE. Mr. Chairman, I yield myself such time as I may consume.
On the question of whether the agreement unfairly disadvantages the
United States, let me reassure colleagues that other countries are not
permitted to transition, as the gentleman from California [Mr. Dellums]
had earlier suggested. The agreement does provide for some existing
shipbuilding restructuring programs to be phased out in Spain,
Portugal, and Belgium; however, these programs are primarily for the
express purpose of reducing capacity in the respective shipbuilding
industries of these nations, not for expanding the industry or
supporting specific ship construction activities.
The precise terms of these programs, the amounts of funding, the
purpose and deadlines for completion of these programs are spelled out
in the agreement. The downsizing of European shipbuilding capacity is
in the best interest of this Nation and the United States shipbuilding
industry and should be encouraged. The special provisions result in an
advantage, not a disadvantage to United States shipbuilders that wish
to compete in the world shipbuilding marketplace.
No other countries have received special deals. Without the OECD
agreement there would be no way to monitor or control these programs.
They could continue indefinitely at any level of funding for whatever
purpose they chose. The Bateman amendment would not provide us with
transition; it would completely and unequivocally kill the agreement
and all we have achieved.
Mr. Chairman, I reserve the balance of my time.
Mr. DELLUMS. Mr. Chairman, may I inquire as to the remaining amount
of time on either side?
The CHAIRMAN. The gentleman from California [Mr. Dellums] has 1\1/2\
minutes remaining; the gentleman from Virginia [Mr. Bateman] has 2
minutes remaining; and the gentleman from Illinois [Mr. Crane] has
14\1/2\ minutes remaining.
Mr. DELLUMS. Mr. Chairman, I yield the balance of my time, 1\1/2\
minutes, to my distinguished colleague, the gentlewoman from Ohio [Ms.
Kaptur].
Ms. KAPTUR. Mr. Chairman, I thank the gentleman for yielding me this
time and I rise in strong support of the Bateman amendment and want to
talk a little bit with the membership about why the agreement without
this amendment is so flawed.
The agreement essentially will not end foreign subsidy and dumping
practices, it will, however, kill the recent rebirth of commercial
shipbuilding in our country. It will eliminate thousands of highly
skilled jobs in our shipyards and in the thousands of industries
throughout 46 States which supply our shipyards.
While our Trade Representative was at the negotiating table, it is
important to point out that South Korea announced a $750 million
bailout of its Daewoo Shipyard, which has been dumping ships on the
world's market; Germany granted a $4 billion shipyard modernization
subsidy to its shipyards, monies which are still being disbursed.
Our negotiators agreed to grandfather these special subsidies, and
though our trade negotiator maintains that restructuring is supposed to
be tied to closure of facilities and associated worker restraining,
that is not how foreign governments see it. In fact, Spain is spending
$723 million to modernize all of its existing facilities with no
closures planned.
Further, the overall agreement fails to discipline the ship dumping
practices of Japan and South Korea, and even though China has just
begun to target shipbuilding as a means to develop its manufacturing
industries, China is not a signatory to this agreement, nor is Poland,
nor is Russia.
So what did America get out of this deal? Nothing. What did American
shipbuilders get out of this deal? Nothing. And what did American
workers get out of this deal? Nothing. In fact, our negotiators agreed
to immediately gut the modest title XI ship loan program that is
included in the Bateman amendment. So without the Bateman amendment we
will kiss more U.S. shipyard jobs goodbye.
Mr. Chairman, I urge my colleagues to support the Bateman amendment
and, without its inclusion, to oppose the bill.
Mr. BATEMAN. Mr. Chairman, I yield myself the remainder of my time,
and say in closing the debate on behalf of the Committee on National
Security that it is passing strange to have heard my amendment referred
to as reasonable on its face and modest, and at the same time be told
that we are going to unravel an agreement and that we are violating an
agreement.
Mr. Chairman, we will not be violating an agreement. What we are
contemplating is essentially a proposed agreement until and unless this
Congress, in the exercise of its sovereign right for the people of the
United States, determines that this is an agreement that should be
implemented.
My amendment, contrary to some who would have me taking a position of
total opposition to any agreement, is a midpoint. It simply says there
are flaws in this proposed agreement which had been identified, and, in
the interest and protection of American shipbuilding because of its
importance to American national security, need to be modified.
If the other nations who purport to be in agreement on this agreement
are

[[Page H6323]]

unwilling to accept these modest transition provisions, it speaks
volumes to me as to whether or not they were seriously interested in
ending shipbuilding subsidies. I am. We should be.
This is not about doing that. This is about modest, reasonable
transition provisions in protection of the core American shipbuilding
capability, which is absolutely essential to our national security. And
it is those shipyards and the workers in those shipyards and the
merchant mariners who man American ships, and because of the importance
of that merchant marine to the United States, that ask that Members
vote for the Bateman amendment.
Mr. CRANE. Mr. Chairman, I yield the remainder of my time to the
gentleman from Florida, Sam Gibbons, our distinguished ranking minority
member for closing remarks, and I want to pay tribute to him again as
the man who served for so long as chairman of the trade subcommittee on
which I served in my ranking minority position. We have worked
collegially for years together and I pay tribute to this great man from
Florida.

{time} 1245

Mr. GIBBONS. Mr. Chairman, I thank the gentleman from Illinois [Mr.
Crane] and others of my colleagues who have recognized my service here,
and I want to say to them I close this debate with certainly no
personal rancor toward them or to the cause that they advocate.
I am here to give the best of my knowledge to the Members of this
House, and the best of my judgment about the outcomes of actions we may
take, what will follow.
Mr. Chairman, over the years, ever since World War II, the United
States has been backing out of the subsidy in shipbuilding. Through the
1950's and the 1960's we cut back on our appropriations to commercial
shipbuilding subsidies. Through the 1970's we did the same thing, and
finally in the 1980's, under a procedure here on the budget
reconciliation bill, the minority, together with some Members of the
majority, got control of the situation through the Gramm-Latta
substitute and actually abolished all the shipbuilding subsidies they
could find. So since the 1980's the United States has had absolutely no
shipbuilding subsidies of any consequence.
Now, as I sat here attentively listening to this debate today, I had
been hoping that I would find something that I had not heard before
that perhaps I could respond to or answer a question about.

Now, I know that negotiations are a tedious process. I participated
in the launching of these negotiations many, many years ago. The
negotiations have actually gone on for more than 5 years. Prior to
that, I met with all of the shipbuilding industry in the United States.
They all, because of my responsibilities, came by to see me. I sat down
with them all in my office over here in the Rayburn building and we
agreed to launch these negotiations.
Now, as I hear these negotiations discussed, I would have to believe
that they were not even a party to the negotiations, but they sent
representatives to these negotiations that sat there with our
negotiators and participated in all of these negotiations. Nobody was
surprised about anything that was brought up. They would come back from
these negotiations and come to see me and we would discuss these
points.
Mr. Chairman, I started unilateral U.S. action against these
countries because at first they would not even negotiate with us on
this. They would just come to the sessions and say no. Finally, they
got concerned enough about the actions of Congress here to come to the
negotiations and really truthfully begin the negotiations, and 5
tortuous years of negotiations took place.
During those 5 tortuous years, everybody in the shipbuilding industry
had somebody around the negotiating table there to kibitz and to add
their suggestions as to what should be done. Concessions were made back
and forth. Deals were entered into and agreed to. Finally, all of these
mutual concessions and negotiations came to an agreement.
I celebrated, as did the shipbuilding industry at that time, because
we thought we had a good agreement and I believe we still do have a
good agreement.
One thing was overlooked. The Committee on National Security found
and rejuvenated an old, old subsidy that goes back to 1936; one that
had been overlooked in the 1981 abolishment of all subsidies. Perfectly
all right.
Under the standstill agreement that is a part of the general
agreement we are talking about here today, all countries agreed to
stand still and not to go out and create new additional subsidies, and
this little subsidy for $50 million that the Committee on National
Security found qualified as one of those that could still be used. So,
Mr. Chairman, some of our yards got a little jump out of that.
But tomorrow, Mr. Chairman, June 15, is the deadline for us to take
affirmative action on this agreement. If we do not take affirmative
action in this House today to ratify this agreement, all of the other
nations that have agreed to this agreement will back out of it. They
have not just told us that; they put it in writing, and it is in
yesterday's Congressional Record there for my colleagues' examination.
Now, I know my friend, the gentleman from California [Mr. Dellums],
believes that they will come back to the negotiating table. Well, I do
not have the optimism that he has. Perhaps my lack of optimism is
caused by having followed this agreement so closely over the years. All
of these other nations are having trouble with their own shipbuilders,
and the only reason they are standing still is because their word is
good. But once we back out of the agreement, I do not see them coming
back to the negotiating table to do what the gentleman from Virginia
[Mr. Bateman] wants to do here.
Mr. Chairman, let me say this. This agreement was negotiated with
everybody participating. Every American shipbuilder in the United
States had an opportunity and most of them did participate in this
agreement. It was an agreement that had concessions on all sides. On
our side, the Jones Act people put up a good case, and every other
nation on Earth that participated in this agreement got rid of their
so-called Jones Act subsidies or protection except the United States.
We got a concession there. But a resulting concession had to come in,
and that is that the Jones Act people, acting under the protection that
they get from the Jones Act, would not take the economic advantage that
they got from their Jones Act protection and go out and get a double
dip under the international marketplace agreement that was negotiated
here. That is all that is involved here.
Now, the Department of Defense has signed off on this agreement. They
followed the negotiation, both Republican and Democratic
administrations. They have been a part of it. They know the
consequences of it, and they are not concerned about it at all. The
letter from the Secretary of Defense is also in the record.
So, Mr. Chairman, this is not a national security issue; it is an
economic issue for America. We stand on the verge of entering into the
international shipbuilding market for the first time since 1981. If we
do not take this advantage, we are going to lose a lot of jobs that we
already have in the United States, and we are not going to take the
opportunity to get the new jobs that are coming about because of the
rapid obsolescence of the world's merchant marine fleet. American
shipyards are competitive. They can compete against the best shipyards
around the world. Our labor costs are low. Let me repeat that: Our
labor costs are low and our technology is high.
What has defeated us all these years is that all of the other nations
on Earth continued their subsidies, continued their unfair pricing, and
we sat with our hands tied. Do not let us go down today with our hands
continually tied behind us. Give our yards an opportunity to get out
and compete.
Shipbuilders from all over the United States have come and talked to
me about, ``Mr. Gibbons, if we could only get there subsidies ended, we
can compete. But if we cannot end these subsidies right now, we are
going to have to go on welfare.''
Now, that is not fair. There are many conflicting interests in all of
this in the United States, and I respect everyone's interest in this. I
accuse no one

[[Page H6324]]

of any unfair, undemocratic practices. But the problem is we have got a
once-in-a-lifetime opportunity to get rid of these pernicious worldwide
subsidies. If we do not do it now, the Record already reflects that our
trading partners will back out. We cannot afford to do that.
It is really bigger than this shipbuilding issue. Ever since I have
had a responsibility for monitoring our international trade
negotiations, the rest of the world is structured politically different
than we. No one has a Congress or a lawmaking body that is as powerful
and as intrusive in the process as the Congress of the United States,
and all of the rest of the world understands that and knows that.
That is the reason why they will not deal with us on any kind of
international agreement unless we have what we call fast track. A
horrible misnomer, but I think all of us know what it is. They accuse
us time and time again, in all international negotiations, of coming
back to the House floor and the Senate floor and unraveling all of the
mutual concessions that were made in the agreement.
That is really what we are doing here today. I know we do not
recognize it but they recognize it. They are resisting that, not only
because of shipbuilding but because of all of the other negotiations
that they have carried on with us and will carry on with us over the
period of time.
So this is a big issue. It is a big issue about how we organize a
peaceful world, a world that lives under law, a world that lives under
law openly developed and put forward and negotiated and agreed to by
the different bodies of this country.
Certainly the Committee on National Security has a role in all of
this. I guess I regret as I stand here now that they probably were not
involved in it enough during the negotiating process. I am sorry I did
not call it to their attention. But I though that all of the
shipbuilders in this country, particularly the large Navy yards that
are so dependent on national security contracts, were keeping in touch
with their other Members of Congress. I can tell my colleagues that I
spent a lot of other time with them, time that I could have better
spent on Florida concerns rather than on national concerns.
So believe me, we have got an opportunity here today. We have got an
opportunity to get a good agreement. This is the best agreement that
American negotiators, including the private sector in all of these
negotiations, could work out in 5 tortuous years. Four sets of
negotiators, Republican and Democrat. We wore out in these
negotiations. We cannot go back and undo all of that again because of
these rather last-minute concessions.
At best, if the Bateman amendment succeeds, it will last until
Monday. It will last until Monday, and then it is gone, because it is
only protected by the standstill agreement that is in this basic
agreement. The other nations have told us, ``If you are not going to
agree to it, we are not going to stand still,'' and they will meet and
match on Monday the Bateman amendment subsidy, and there will be no
more advantage, as temporary as it is, for the United States under the
Bateman amendment. That is what all of this is about.
This is perhaps my swan song on trade. I may have a few words on some
other things around here before my term expires, but I want to thank
the Members of Congress for listening to me, and I want to thank you
also for this opportunity to participate.
Mr. CRANE. Mr. Chairman, I yield 30 seconds to the gentleman from
Alabama [Mr. Callahan].
Mr. CALLAHAN. Mr. Chairman, I just want to echo what the gentleman
from Florida [Mr. Gibbons] was talking about, and to tell the gentleman
that the day has already arrived.
Mr. Chairman, just yesterday in my district, a press release came
from the Alabama shipyard, and it is based upon whether or not this
agreement is enacted, where they signed a contract for five Russian
tankers to be built in the State of Alabama. We are talking about 600
new jobs.
Mr. Chairman, I chair or have chaired for the past 8 years, the
revitalization of the shipbuilding industry in this country. This is
the biggest thing that we have going for us. We are now here. We
already have achieved contracts, created jobs. If we turn this back,
then we are going to lose American jobs.
So, Mr. Chairman, I would encourage my colleagues to vote against the
Bateman amendment and encourage them to support the bill once the
Bateman amendment is rejected.
The CHAIRMAN. All time has expired.
The question is on the amendment offered by the gentleman from
Virginia [Mr. Bateman].
The question was taken; and the Chairman announced that the ayes
appeared to have it.

recorded vote

Mr. CRANE. Mr. Chairman, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 278,
noes 149, not voting 7, as follows:

[Roll No. 237]

AYES--278

Abercrombie
Ackerman
Andrews
Baesler
Baker (LA)
Baldacci
Ballenger
Barcia
Barr
Barrett (WI)
Bartlett
Bateman
Becerra
Bilirakis
Bishop
Bliley
Blute
Boehlert
Bonior
Borski
Boucher
Brown (CA)
Brown (FL)
Brown (OH)
Bryant (TN)
Bryant (TX)
Burr
Burton
Buyer
Calvert
Chambliss
Chenoweth
Clay
Clayton
Clement
Clyburn
Coburn
Coleman
Collins (IL)
Collins (MI)
Condit
Conyers
Cooley
Costello
Coyne
Crapo
Cummings
Cunningham
Danner
Davis
Deal
DeFazio
DeLauro
Dellums
Diaz-Balart
Dickey
Dingell
Dixon
Doggett
Dooley
Doolittle
Dornan
Doyle
Duncan
Durbin
Edwards
Ehrlich
Emerson
Engel
Eshoo
Evans
Ewing
Farr
Fattah
Fazio
Fields (LA)
Fields (TX)
Filner
Flake
Flanagan
Foglietta
Forbes
Ford
Fox
Frank (MA)
Franks (CT)
Franks (NJ)
Frost
Funderburk
Furse
Gallegly
Gejdenson
Gekas
Gephardt
Geren
Gilman
Gonzalez
Goodlatte
Goodling
Gordon
Graham
Green (TX)
Greenwood
Gunderson
Gutierrez
Hall (OH)
Hansen
Harman
Hayes
Hayworth
Hefner
Hilleary
Hinchey
Hoke
Holden
Horn
Hostettler
Hunter
Hutchinson
Hyde
Inglis
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (SD)
Jones
Kanjorski
Kaptur
Kelly
Kennedy (MA)
Kennedy (RI)
Kildee
Kleczka
Klink
LaFalce
LaHood
Lantos
LaTourette
Lazio
Lewis (CA)
Lewis (GA)
Lipinski
Livingston
Lofgren
Longley
Lowey
Lucas
Maloney
Manton
Markey
Martinez
Martini
Mascara
McHale
McHugh
McInnis
McIntosh
McKeon
McKinney
McNulty
Meehan
Meek
Menendez
Metcalf
Mica
Millender-McDonald
Mink
Moakley
Molinari
Mollohan
Montgomery
Moorhead
Moran
Morella
Murtha
Myers
Nadler
Neal
Neumann
Ney
Norwood
Oberstar
Obey
Olver
Ortiz
Owens
Packard
Pallone
Pastor
Payne (NJ)
Payne (VA)
Pelosi
Peterson (MN)
Pickett
Pombo
Pomeroy
Porter
Poshard
Quillen
Rahall
Reed
Regula
Riggs
Rivers
Roberts
Roemer
Rogers
Ros-Lehtinen
Rose
Roukema
Roybal-Allard
Rush
Sabo
Sanders
Saxton
Scarborough
Schaefer
Schiff
Schumer
Scott
Seastrand
Serrano
Shuster
Sisisky
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Solomon
Souder
Spence
Spratt
Stark
Stockman
Stokes
Stump
Stupak
Talent
Tanner
Tate
Tauzin
Taylor (MS)
Tejeda
Thompson
Thornberry
Thornton
Tiahrt
Torkildsen
Torres
Torricelli
Towns
Traficant
Upton
Velazquez
Vento
Visclosky
Volkmer
Vucanovich
Walsh
Wamp
Ward
Waters
Watt (NC)
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Wicker
Williams
Wilson
Wise
Wolf
Woolsey
Wynn
Yates
Young (AK)
Young (FL)

NOES--149

Allard
Archer
Armey
Bachus
Baker (CA)
Barrett (NE)
Barton
Bass
Beilenson
Bentsen
Bereuter
Berman
Bevill
Bilbray
Blumenauer
Boehner
Bonilla
Bono
Brewster
Browder
Brownback
Bunn
Bunning
Callahan
Camp
Campbell
Canady
Cardin
Castle
Chabot
Chapman
Christensen
Chrysler
Clinger
Coble
Collins (GA)
Combest
Cox
Cramer
Crane
Cremeans
Cubin
de la Garza
DeLay
Deutsch
Dicks
Dreier
Dunn
Ehlers
English
Ensign
Everett
Fawell
Foley
Fowler
Frelinghuysen
Frisa

[[Page H6325]]

Ganske
Gibbons
Gilchrest
Goss
Gutknecht
Hall (TX)
Hamilton
Hancock
Hastert
Hastings (FL)
Hastings (WA)
Hefley
Heineman
Herger
Hilliard
Hobson
Hoekstra
Hoyer
Istook
Jacobs
Johnson (CT)
Johnson, E. B.
Johnson, Sam
Johnston
Kasich
Kennelly
Kim
King
Kingston
Klug
Knollenberg
Kolbe
Largent
Latham
Laughlin
Leach
Levin
Lewis (KY)
Lightfoot
Linder
LoBiondo
Luther
Manzullo
Matsui
McCarthy
McCollum
McCrery
McDermott
Meyers
Miller (FL)
Minge
Myrick
Nethercutt
Nussle
Orton
Parker
Paxon
Peterson (FL)
Petri
Portman
Pryce
Quinn
Radanovich
Ramstad
Rangel
Richardson
Rohrabacher
Roth
Royce
Salmon
Sanford
Sawyer
Schroeder
Sensenbrenner
Shadegg
Shaw
Shays
Skaggs
Smith (TX)
Smith (WA)
Stearns
Stenholm
Studds
Taylor (NC)
Thomas
Thurman
Walker
Waxman
White
Whitfield
Zeliff
Zimmer

NOT VOTING--7

Gillmor
Greene (UT)
Houghton
Lincoln
McDade
Miller (CA)
Oxley

{time} 1321

Messrs. KIM, KNOLLENBERG, FOLEY, McCOLLUM, ZELIFF, SHADEGG, CANADY of
Florida, and HOYER changed their vote from ``aye'' to ``no.''
Messrs. GILMAN, EWING, WELLER, Mrs. MEEK of Florida, and Mr. BARRETT
of Wisconsin changed their vote from ``no'' to ``aye.''
So the amendment was agreed to.
The result of the vote was announced as above recorded.
The CHAIRMAN. The question is on the committee amendment in the
nature of a substitute, as amended.
The Committee amendment in the nature of a substitute, as amended,
was agreed to.
The CHAIRMAN. Under the rule, the Committee rises.
Accordingly the Committee rose; and the Speaker pro tempore (Mr.
Barrett of Nebraska) having assumed the chair, Mr. Gutknecht, Chairman
of the Committee of the Whole House on the State of the Union, reported
that that Committee, having had under consideration the bill (H.R.
2754), to approve and implement the OECD Shipbuilding Trade Agreement,
pursuant to House Resolution 448, he reported the bill back to the
House with an amendment adopted by the Committee of the Whole.
The SPEAKER pro tempore. Under the rule the previous question is
ordered.
Is a separate vote demanded on the amendment to the Committee
amendment in the nature of a substitute adopted by the Committee of the
Whole? If not, the question is on the Committee amendment in the nature
of a substitute.
The Committee amendment in the nature of a substitute amendment was
agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.

recorded vote

Mr. DAVIS. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 325,
noes 100, not voting 9, as follows:

[Roll No. 238]

AYES--325

Ackerman
Allard
Andrews
Baesler
Baker (LA)
Baldacci
Ballenger
Barcia
Barrett (NE)
Barrett (WI)
Bartlett
Bass
Bateman
Becerra
Beilenson
Bentsen
Bereuter
Berman
Bilbray
Bilirakis
Bishop
Bliley
Blumenauer
Blute
Boehlert
Bonior
Bono
Borski
Boucher
Brewster
Brown (CA)
Brown (FL)
Brown (OH)
Brownback
Bryant (TN)
Bryant (TX)
Bunn
Burr
Calvert
Campbell
Canady
Cardin
Castle
Chabot
Chambliss
Chapman
Christensen
Clay
Clayton
Clement
Clinger
Clyburn
Coble
Coburn
Coleman
Collins (MI)
Condit
Conyers
Crane
Cremeans
Cummings
Cunningham
Danner
Davis
Deal
DeFazio
DeLauro
Dellums
Deutsch
Dickey
Dingell
Dixon
Doggett
Dooley
Doyle
Dreier
Duncan
Durbin
Ehlers
Ehrlich
Emerson
Engel
Ensign
Eshoo
Ewing
Farr
Fattah
Fawell
Fazio
Fields (LA)
Fields (TX)
Filner
Flake
Flanagan
Foglietta
Forbes
Ford
Fox
Frank (MA)
Franks (CT)
Franks (NJ)
Frelinghuysen
Frisa
Frost
Funderburk
Furse
Gallegly
Ganske
Gejdenson
Gekas
Gephardt
Geren
Gibbons
Gilchrest
Gilman
Gonzalez
Goodlatte
Goodling
Gordon
Goss
Greene (UT)
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hamilton
Hancock
Hansen
Harman
Hastings (FL)
Hayes
Hayworth
Hefley
Hefner
Heineman
Herger
Hinchey
Hoekstra
Hoke
Horn
Hostettler
Hoyer
Hutchinson
Hyde
Inglis
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Johnson (SD)
Johnson, E. B.
Johnston
Jones
Kanjorski
Kaptur
Kasich
Kelly
Kennedy (MA)
Kennedy (RI)
Kennelly
Kildee
Kim
King
Kleczka
Knollenberg
LaFalce
LaHood
Largent
Latham
LaTourette
Lazio
Leach
Levin
Lewis (CA)
Lewis (GA)
Lightfoot
Linder
Lipinski
Livingston
Lofgren
Lowey
Lucas
Luther
Maloney
Manton
Manzullo
Markey
Martinez
Martini
Mascara
Matsui
McCarthy
McCollum
McHale
McHugh
McInnis
McIntosh
McKeon
McKinney
McNulty
Meehan
Meek
Menendez
Metcalf
Mica
Millender-McDonald
Miller (CA)
Miller (FL)
Minge
Mink
Moakley
Molinari
Moorhead
Moran
Morella
Murtha
Myers
Myrick
Nadler
Neal
Ney
Norwood
Olver
Ortiz
Orton
Owens
Packard
Pallone
Parker
Pastor
Paxon
Payne (NJ)
Payne (VA)
Pelosi
Peterson (FL)
Peterson (MN)
Petri
Pickett
Pomeroy
Porter
Pryce
Quillen
Quinn
Radanovich
Rangel
Reed
Regula
Richardson
Riggs
Rivers
Roberts
Roemer
Rogers
Roth
Roukema
Roybal-Allard
Sabo
Sanders
Sawyer
Saxton
Scarborough
Schaefer
Schiff
Schumer
Scott
Seastrand
Sensenbrenner
Serrano
Shaw
Shays
Shuster
Sisisky
Skaggs
Skeen
Skelton
Slaughter
Smith (MI)
Smith (TX)
Solomon
Souder
Spence
Spratt
Stark
Stenholm
Stokes
Studds
Stupak
Talent
Tate
Tauzin
Taylor (NC)
Tejeda
Thomas
Thornberry
Thornton
Thurman
Torkildsen
Torres
Towns
Upton
Velazquez
Vento
Visclosky
Volkmer
Vucanovich
Walker
Walsh
Wamp
Ward
Waters
Watt (NC)
Watts (OK)
Waxman
Weldon (FL)
Weldon (PA)
Weller
Wicker
Williams
Wilson
Wolf
Woolsey
Wynn
Young (AK)
Young (FL)
Zeliff

NOES--100

Abercrombie
Archer
Armey
Bachus
Baker (CA)
Barr
Barton
Bevill
Boehner
Bonilla
Browder
Bunning
Burton
Callahan
Camp
Chenoweth
Chrysler
Collins (GA)
Collins (IL)
Combest
Cooley
Costello
Cox
Coyne
Cramer
Crapo
Cubin
de la Garza
DeLay
Diaz-Balart
Dicks
Doolittle
Dornan
Dunn
English
Evans
Everett
Foley
Fowler
Graham
Gunderson
Hall (TX)
Hastert
Hastings (WA)
Hilleary
Hilliard
Hobson
Holden
Hunter
Jacobs
Johnson (CT)
Johnson, Sam
Kingston
Klink
Klug
Kolbe
Lantos
Laughlin
Lewis (KY)
LoBiondo
Longley
McCrery
McDermott
Mollohan
Montgomery
Nethercutt
Neumann
Nussle
Oberstar
Obey
Pombo
Portman
Poshard
Rahall
Ramstad
Rohrabacher
Ros-Lehtinen
Rose
Royce
Rush
Salmon
Sanford
Schroeder
Shadegg
Smith (NJ)
Smith (WA)
Stearns
Stockman
Stump
Tanner
Taylor (MS)
Thompson
Tiahrt
Torricelli
Traficant
White
Whitfield
Wise
Yates
Zimmer

NOT VOTING--9

Buyer
Edwards
Gillmor
Green (TX)
Houghton
Lincoln
McDade
Meyers
Oxley

{time} 1342

Mr. McNULTY changed his vote from ``no'' to ``aye.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.

____________________