[Congressional Record Volume 145, Number 74 (Thursday, May 20, 1999)]
[Senate]
[Pages S5759-S5761]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself, Mr. Bingaman, Mr. Dorgan, Mr. Kerrey, 
        Mr. Johnson, and Mr. Daschle):
  S. 1099. A bill to establish a mechanism for using the duties imposed 
on products of countries that fail to comply with WTO dispute 
resolution decision to provide relief to injured domestic producers; to 
the Committee on Finance.


                     trade injury compensation act

  Mr. BAUCUS. Mr. President, on behalf of myself and Senators Bingaman, 
Dorgan, Kerrey, Johnson, and Daschle. I rise to introduce the Trade 
Injury Compensation Act of 1999.
  Under U.S. trade law, we may retaliate when a trading partner 
improperly closes its market to American goods or services. In certain 
circumstances, the World Trade Organization endorses that retaliation. 
The normal form of trade retaliation is to increase the tariff to one 
hundred percent on a designated list of imported goods.
  The intention of retaliation is not protectionist. It is just the 
opposite--use the leverage of access to the huge United States market 
to open up a foreign market and expand trade. Retaliation is a tool 
designed to inflict enough economic pain on a trading partner that he 
returns to the negotiating table and removes the trade barriers that 
started the problem in the first place. Sometimes these negotiations 
restart quickly, sometimes even before the retaliation goes into 
effect. Other times, the negotiations start again only after the impact 
of retaliation sinks in.
  In some cases, the new one hundred percent tariff raises the price of 
the imported good so prohibitively that it is priced completely out of 
the market. In other cases, the product is still sold in the United 
States, perhaps at a higher price, or perhaps at the original price 
with the importer absorbing the added tariff.
  The United States is increasingly taking trade disputes to the WTO's 
Dispute Settlement Body. However, some of our trading partners have 
been, in effect, snubbing their nose at the WTO's decisions. The most 
egregious example of this is the European Union, whose approach to WTO 
dispute

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settlement is, frankly, outrageous. First, in bananas, and now in beef, 
the EU is using legal and procedural technicalities to delay 
implementation of important and legitimate WTO panel decisions. Each 
time they do this, the EU seriously undermines the credibility of the 
WTO as a fair and even-handed place to get trade justice.
  The Trade Injury Compensation Act establishes a mechanism for using 
the tariffs imposed when a country fails to comply with WTO dispute 
resolution decisions. Normally, the additional tariff revenues received 
from retaliation go to the Treasury. This bill establishes a trust fund 
so that the affected industry will receive those revenues as 
compensation for its injury.
  In the case of agriculture, the money will be spent on promotion and 
development of products for the industry. In non-agriculture cases, the 
money will go to additional Trade Adjustment Assistance payments to the 
affected industry.
  Mr. President, the WTO is a critically important institution that 
sets the foundation and framework to make world trade grow. We all 
recognize that it needs improvement, and I, along with many of my 
colleagues, are working on ways to fix it, starting with the WTO 
Ministerial in Seattle. But, while the United Staes is striving to 
support and improve the WTO system, the EU seems to be working overtime 
to undercut the WTO. We must stop this abuse of the WTO, and we must 
provide assistance to our industries that are damaged by these illegal 
actions of the EU or others in the future.
  Within two weeks, the Administration will implement retaliatory 
measures against the European Union because of its WTO-illegal 
restrictions on beef. My bill would provide the American beef industry 
with much needed compensation while the retaliatory measures remain in 
place.
  I encourage all my colleagues to support this bill.
  Mr. President, I ask unanimous consent that the 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. 1099

       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 ``Trade Injury Compensation 
     Act of 1999''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) United States goods and services compete in global 
     markets and it is necessary for trade agreements to promote 
     such competition.
       (2) The current dispute resolution mechanism of the World 
     Trade Organization is designed to resolve disputes in a 
     manner that brings stability and predictability to world 
     trade.
       (3) When foreign countries refuse to comply with a panel or 
     Appellate Body report of the World Trade Organization and 
     violate any of the Uruguay Round Agreements, it has a 
     deleterious effect on the United States economy.
       (4) A WTO member can retaliate against a country that 
     refuses to implement a panel or Appellate Body report by 
     imposing additional duties of up to 100 percent on goods 
     imported from the noncomplying country.
       (5) In cases where additional duties are imposed on 
     imported goods, the duties should be used to provide relief 
     to the industry that is injured by the noncompliance.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Agricultural commodity.--The term ``agricultural 
     commodity'' has the meaning given the term by section 102 (1) 
     of the Agricultural Trade Act of 1978 (7 U.S.C. 5602(1)).
       (2) Injured agricultural commodity producer.--The term 
     ``injured agricultural commodity producer'' means a domestic 
     producer of an agricultural commodity with respect to which a 
     dispute resolution proceeding has been brought before the 
     World Trade Organization, if the dispute resolution is 
     resolved in favor of the agricultural commodity producer, and 
     the foreign country against which the proceeding has been 
     brought has failed to comply with the report of the panel or 
     Appellate Body of the WTO.
       (3) Injured producer.--The term ``injured producer'' means 
     a domestic producer of a product (other than an agricultural 
     product) with respect to which a dispute resolution 
     proceeding has been brought before the World Trade 
     Organization, if the dispute resolution is resolved in favor 
     of the producer, and the foreign country against which the 
     proceeding has been brought has failed to comply with the 
     report of the panel or Appellate Body of the WTO.
       (4) Retaliation list.--The term ``retaliation list'' means 
     the list of products of a foreign country that has failed to 
     comply with the report of the panel or Appellate Body of the 
     WTO and with respect to which the United States Trade 
     Representative is imposing duties above the level that would 
     otherwise be imposed under the Harmonized Tariff Schedule of 
     the United States.
       (5) Uruguay round agreements.--The term ``Uruguay Round 
     Agreements'' has the meaning given such term in section 2(7) 
     of the Uruguay Round Agreements Act (19 U.S.C. 3501(7)).
       (6) World trade organization.--The term ``World Trade 
     Organization'' means the organization established pursuant to 
     the WTO Agreement.
       (7) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement Establishing The World Trade Organization entered 
     into on April 15, 1994.
       (8) WTO and wto member.--The terms ``WTO'' and ``WTO 
     member'' have the meanings given those terms in section 2 of 
     the Uruguay Round Agreements Act (19 U.S.C. 3501).

     SEC. 4. TRADE INJURY COMPENSATION TRUST FUND.

       (a) Establishment.--There is established in the Treasury of 
     the United States a fund to be known as the ``Trade Injury 
     Compensation Trust Fund'' (referred to in this Act as the 
     ``Fund'') consisting of such amounts as may be appropriated 
     to the Fund under subsection (b) and any amounts credited to 
     the Fund under subsection (c)(2).
       (b) Transfer of Amounts Equivalent to Certain Duties.--
       (1) In general.--There are hereby appropriated and 
     transferred to the Fund an amount equal to the amount 
     received in the Treasury as a result of the imposition of 
     additional duties imposed on the products on a retaliation 
     list.
       (2) Transfers based on estimates.--The amounts required to 
     be transferred under paragraph (1) shall be transferred at 
     least quarterly from the general fund of the Treasury to the 
     Fund on the basis of estimates made by the Secretary of the 
     Treasury. Proper adjustment shall be made in amounts 
     subsequently transferred to the extent prior estimates were 
     in excess of or less than the amounts required to be 
     transferred.
       (c) Investment of Trust Fund.--
       (1) In general.--The Secretary of the Treasury shall invest 
     such portion of the Fund as is not, in the Secretary's 
     judgment, required to meet current withdrawals. Such 
     investments may be made only in interest-bearing obligations 
     of the United States or in obligations guaranteed as to both 
     principal and interest by the United States.
       (2) Credits to fund.--The interest on, and the proceeds 
     from the sale or redemption of, any obligations held in the 
     Fund shall be credited to and form a part of the Fund.
       (d) Distributions From Fund.--Amounts in the Fund shall be 
     available as provided in appropriations Acts, for making 
     distributions in accordance with subsections (e) and (f).
       (e) Criteria for Determining Injured Producers and Amount 
     To Be Paid.--Not later than 30 days after the implementation 
     of a retaliation list, the Secretary of the Treasury, in 
     consultation with the Secretaries of Agriculture and 
     Commerce, shall promulgate such regulations as may be 
     necessary to carry out the provisions of this Act. The 
     regulations shall include the following:
       (1) Procedures for identifying injured producers and 
     injured producers of agricultural commodities.
       (2) Standards for determining the eligibility of injured 
     producers and injured producers of agricultural commodities 
     to participate in the distribution of any money from the 
     Fund.
       (3) Procedures for determining the amount of the 
     distribution each injured producer and injured producers of 
     agricultural commodities should be paid.
       (4) Procedures for establishing separate accounts for 
     duties collected with respect to each retaliation list and 
     for making distributions to the group of injured producers 
     and injured producers of agricultural commodities with 
     respect to each such retaliation list.
       (f) Distribution to Injured Producers.--
       (1) Distribution to agricultural producers.--The Secretary 
     of the Treasury shall transfer to the Secretary of 
     Agriculture such sums as may be transferred or credited to 
     the Fund as the result of items on a retaliation list because 
     of injury to producers of agricultural commodities. The 
     Secretary of Agriculture shall distribute to each injured 
     producer of an agricultural commodity that the Secretary 
     determines is eligible a portion of the amount so 
     transferred. The distribution shall be made in accordance 
     with the subsection (e) and shall be used by the producers 
     for the promotion and development of products of the injured 
     producers.
       (2) Distribution to other injured producers.--The Secretary 
     of the Treasury shall transfer to the Secretary of Commerce 
     such sums as may be transferred or credited to the Fund as 
     the result of items on a retaliation list because of injury 
     to producers (other than producers of agricultural 
     commodities). The Secretary of Commerce shall distribute to 
     each injured producer (other than a producer described in 
     paragraph (1)) that the Secretary determines is eligible a 
     portion of the amount so transferred. The distribution shall 
     be made in accordance with subsection (e) and in accordance 
     with the procedures applicable to the provision of assistance 
     under chapter 3 of title II of the Trade Act of 1974 (19 
     U.S.C. 2341 et seq.).

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       (g) Report to Congress.--The Secretary of the Treasury 
     shall, after consultation with the Secretaries of Agriculture 
     and Commerce, submit a report to the Congress each year on--
       (1) the financial condition and the results of the 
     operations of the Fund during the preceding fiscal year; and
       (2) the expected condition and operations of the Fund 
     during the fiscal year following the fiscal year that is the 
     subject of the report.

     SEC. 5. PROHIBITION ON REDUCING SERVICES OR FUNDS.

       No payment made to an injured producer or an injured 
     agricultural commodity producer under this Act shall result 
     in the reduction or denial of any service or assistance with 
     respect to which the injured producer or injured agricultural 
     commodity producer would otherwise be entitled.
                                 ______