[Congressional Record Volume 144, Number 19 (Tuesday, March 3, 1998)]
[Senate]
[Pages S1257-S1258]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                          By Mr. ROCKEFELLER:

  S. 1702. A bill to amend the Harmonized Tariff Schedule for the 
United States to change the special rate of duty on purified 
terephtalic acid imported from Mexico; to the Committee on Finance.


                 harmonized tariff schedule legislation

  Mr. ROCKEFELLER. Mr. President, I rise today to introduce this bill 
to amend Chapter 29 of the Harmonized Tariff Schedule of the United 
States to effect the immediate elimination of the special duty rate on 
Purified Terephthalic Acid (PTA) imports from Mexico in order that the 
United States polyester industry can remain competitive in the U.S. 
domestic market.
  We're faced with an ironic situation where a single American supplier 
is the source of substantial harm to the American polyester production 
industry and American workers. This is a highly unusual situation in 
which the American supplier has been able to remain a monopolistic 
producer of PTA, thus controlling the supply of the product and the 
price U.S. consumers must pay. By eliminating the tariff on PTA from 
Mexico, this legislation will place the U.S. PTA market on a level 
playing field with adequate supply and market dictated prices.
  PTA is the principal feedstock in producing polyethylene 
terephthalate (PET), a polyester resin produced in West Virginia by 
Shell Chemical. This feedstock, PTA, comprises nearly two thirds the 
cost of polyester production. PTA is produced for the U.S. merchant 
market by one sole supplier, who can control both the price and supply 
of PTA in the U.S. market. Because the NAFTA tariff makes PTA imports 
unaffordable, U.S. PET producers, like Shell, are limited domestically 
to only one source to meet their PTA needs. This domestic source is not 
providing PET buyers with sufficient quantities of PTA, nor at a 
competitive price. Subsequently, the combination of the NAFTA tariff on 
PTA and a single domestic merchant producer of PTA, the U.S. price for 
PTA is kept the highest in the world. As a result, U.S. polyester 
producers, like the one in West Virginia, operate in a closed, non-
competitive environment.
  Consequently, a tariff inversion is created which significantly harms 
U.S. PET production because PET imports made with cheaper, foreign PTA 
are subject to relatively low tariffs or none at all in the case of GSP 
countries. This tariff inversion exposes West Virginia's PET production 
and all U.S. polyester production to unfair competition from foreign 
competitors. Further, it prohibits any possibility for expansion and 
new job creation.
  I understand that the Office of the United States Trade 
Representative is currently negotiating with their Mexican counterparts 
various tariff eliminations under the Second Round of Accelerated 
Tariff Elimination under the North American Free Trade Agreement. The 
PTA tariff is under consideration. The elimination of the duty for PTA 
is supported by the majority of the U.S. PTA industry and Mexico.
  Shell's future economic viability in West Virginia is linked to the 
elimination of this tariff. If the tariff is not eliminated, the 
cutback in Shell polyester production could cost as many as 250 full-
time jobs that pay on average, $70,000 a year, including direct wages, 
benefits and retirement. Already 160 jobs have been lost since 1995 as 
a direct result of the economic disadvantage caused by this inequity. I 
would add that these jobs provide some of the highest paying salaries 
in my State.
  This lack of competitive domestic PTA pricing does not just cause 
harm

[[Page S1258]]

to my State of West Virginia--also at risk are nearly 3,500 workers 
employed by several U.S. polyester producers buying PTA across the 
country.
  I urge the Senate to act on this PTA tariff elimination bill so that 
West Virginians and other domestic workers and producers can fairly 
compete in this highly competitive global marketplace and to have the 
opportunity to expand U.S. operations when market conditions permit.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1702

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

     SECTION 1. TEREPHTHALIC ACID.

       (a) In General.--Subheading 2917.36.00 of the harmonized 
     Tariff Schedule of the United States in amended by striking 
     ``1.8 cents/kg + 8.9% (MX)'' in the special rates of duty 
     subcolumn and inserting ``, MX'' in the parenthetical after 
     ``J''.
       (b) Effective Date.--The amendment made by this section 
     applies to goods entered on or after the date that is 15 days 
     after the date of enactment of this Act.
                                 ______