Congressional Record, Volume 148 Issue 52 (Wednesday, May 1, 2002)

[Congressional Record Volume 148, Number 52 (Wednesday, May 1, 2002)]
[Senate]
[Pages S3610-S3619]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

ANDEAN TRADE PREFERENCE EXPANSION ACT

The PRESIDING OFFICER. The clerk will state the bill by title.
The legislative clerk read as follows:

A bill (H.R. 3009) to extend the Andean Trade Preference
Act, to grant additional trade benefits under the Act, and
for other purposes, which had been reported from the
Committee on Finance, with an amendment to strike all after
the enacting clause and insert the part printed in italic:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Andean Trade Preference
Expansion Act''.

TITLE I--ANDEAN TRADE PREFERENCE

SEC. 101. FINDINGS.

Congress makes the following findings:
(1) Since the Andean Trade Preference Act was enacted in
1991, it has had a positive impact

[[Page S3611]]

on United States trade with Bolivia, Colombia, Ecuador, and
Peru. Two-way trade has doubled, with the United States
serving as the leading source of imports and leading export
market for each of the Andean beneficiary countries. This has
resulted in increased jobs and expanded export opportunities
in both the United States and the Andean region.
(2) The Andean Trade Preference Act has been a key element
in the United States counternarcotics strategy in the Andean
region, promoting export diversification and broad-based
economic development that provides sustainable economic
alternatives to drug-crop production, strengthening the
legitimate economies of Andean countries and creating viable
alternatives to illicit trade in coca.
(3) Notwithstanding the success of the Andean Trade
Preference Act, the Andean region remains threatened by
political and economic instability and fragility, vulnerable
to the consequences of the drug war and fierce global
competition for its legitimate trade.
(4) The continuing instability in the Andean region poses a
threat to the security interests of the United States and the
world. This problem has been partially addressed through
foreign aid, such as Plan Colombia, enacted by Congress in
2000. However, foreign aid alone is not sufficient.
Enhancement of legitimate trade with the United States
provides an alternative means for reviving and stabilizing
the economies in the Andean region.
(5) The Andean Trade Preference Act constitutes a tangible
commitment by the United States to the promotion of
prosperity, stability, and democracy in the beneficiary
countries.
(6) Renewal and enhancement of the Andean Trade Preference
Act will bolster the confidence of domestic private
enterprise and foreign investors in the economic prospects of
the region, ensuring that legitimate private enterprise can
be the engine of economic development and political stability
in the region.
(7) Each of the Andean beneficiary countries is committed
to conclude negotiation of a Free Trade Area of the Americas
by the year 2005, as a means of enhancing the economic
security of the region.
(8) Temporarily enhancing trade benefits for Andean
beneficiaries countries will promote the growth of free
enterprise and economic opportunity in these countries and
serve the security interests of the United States, the
region, and the world.

SEC. 102. TEMPORARY PROVISIONS.

(a) In General.--Section 204(b) of the Andean Trade
Preference Act (19 U.S.C. 3203(b)) is amended to read as
follows:
``(b) Import-Sensitive Articles.--
``(1) In general.--Subject to paragraphs (2) through (5),
the duty-free treatment provided under this title does not
apply to--
``(A) textile and apparel articles which were not eligible
articles for purposes of this title on January 1, 1994, as
this title was in effect on that date;
``(B) footwear not designated at the time of the effective
date of this title as eligible articles for the purpose of
the generalized system of preferences under title V of the
Trade Act of 1974;
``(C) tuna, prepared or preserved in any manner, in
airtight containers;
``(D) petroleum, or any product derived from petroleum,
provided for in headings 2709 and 2710 of the HTS;
``(E) watches and watch parts (including cases, bracelets,
and straps), of whatever type including, but not limited to,
mechanical, quartz digital, or quartz analog, if such watches
or watch parts contain any material which is the product of
any country with respect to which HTS column 2 rates of duty
apply;
``(F) articles to which reduced rates of duty apply under
subsection (c);
``(G) sugars, syrups, and sugar containing products subject
to tariff-rate quotas; or
``(H) rum and tafia classified in subheading 2208.40 of the
HTS.
``(2) Transition period treatment of certain textile and
apparel articles.--
``(A) Articles covered.--During the transition period, the
preferential treatment described in subparagraph (B) shall
apply to the following articles:
``(i) Apparel articles assembled from products of the
united states and atpea beneficiary countries or products not
available in commercial quantities.--Apparel articles sewn or
otherwise assembled in 1 or more ATPEA beneficiary countries,
or the United States, or both, exclusively from any one or
any combination of the following:

``(I) Fabrics or fabric components formed, or components
knit-to-shape, in the United States, from yarns wholly formed
in the United States (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or
5603 of the HTS and are formed in the United States),
provided that apparel articles sewn or
otherwise assembled from materials described in this
subclause are assembled with thread formed in the United
States.
``(II) Fabric components knit-to-shape in the United States
from yarns wholly formed in the United States and fabric
components knit-to-shape in 1 or more ATPEA beneficiary
countries from yarns wholly formed in the United States.
``(III) Fabrics or fabric components formed or components
knit-to-shape, in 1 or more ATPEA beneficiary countries, from
yarns wholly formed in 1 or more ATPEA beneficiary countries,
if such fabrics (including fabrics not formed from yarns, if
such fabrics are classifiable under heading 5602 or 5603 of
the HTS and are formed in 1 or more ATPEA beneficiary
countries) or components are in chief weight of llama,
alpaca, or vicuna.

``(IV) Fabrics or yarns that are not formed in the United
States or in 1 or more ATPEA beneficiary countries, to the
extent that apparel articles of such fabrics or yarns would
be eligible for preferential treatment, without regard to the
source of the fabrics or yarns, under Annex 401 of the NAFTA.

``(ii) Knit-to-shape apparel articles.--Apparel articles
knit-to-shape (other than socks provided for in heading 6115
of the HTS) in 1 or more ATPEA beneficiary countries from
yarns wholly formed in the United States.
``(iii) Regional fabric.--

``(I) General rule.--Knit apparel articles wholly assembled
in 1 or more ATPEA beneficiary countries exclusively from
fabric formed, or fabric components formed, or components
knit-to-shape, or any combination thereof, in 1 or more ATPEA
beneficiary countries from yarns wholly formed in the United
States, in an amount not exceeding the amount set forth in
subclause (II).
``(II) Limitation.--The amount referred to in subclause (I)
is 70,000,000 square meter equivalents during the 1-year
period beginning on March 1, 2002, increased by 16 percent,
compounded annually, in each succeeding 1-year period through
February 28, 2006.

``(iv) Certain other apparel articles.--

``(I) General rule.--Subject to subclause (II), any apparel
article classifiable under subheading 6212.10 of the HTS, if
the article is both cut and sewn or otherwise assembled in
the United States, or one or more of the ATPEA beneficiary
countries, or both.
``(II) Limitation.--During the 1-year period beginning on
March 1, 2003, and during each of the 2 succeeding 1-year
periods, apparel articles described in subclause (I) of a
producer or an entity controlling production shall be
eligible for preferential treatment under subparagraph (B)
only if the aggregate cost of fabric components formed in the
United States that are used in the production of all such
articles of that producer or entity that are entered during
the preceding 1-year period is at least 75 percent of the
aggregate declared customs value of the fabric contained in
all such articles of that producer or entity that are entered
during the preceding 1-year period.
``(III) Development of procedure to ensure compliance.--The
United States Customs Service shall develop and implement
methods and procedures to ensure ongoing compliance with the
requirement set forth in subclause (II). If the Customs
Service finds that a producer or an entity controlling
production has not satisfied such requirement in a 1-year
period, then apparel articles described in subclause (I) of
that producer or entity shall be ineligible for preferential
treatment under subparagraph (B) during any succeeding 1-year
period until the aggregate cost of fabric components formed
in the United States used in the production of such articles
of that producer or entity that are entered during the
preceding 1-year period is at least 85 percent of the
aggregate declared customs value of the fabric contained in
all such articles of that producer or entity that are entered
during the preceding 1-year period.

``(v) Apparel articles assembled from fabrics or yarn not
widely available in commercial quantities.--At the request of
any interested party, the President is authorized to proclaim
additional fabrics and yarn as eligible for preferential
treatment under clause (i)(IV) if--

``(I) the President determines that such fabrics or yarn
cannot be supplied by the domestic industry in commercial
quantities in a timely manner;
``(II) the President has obtained advice regarding the
proposed action from the appropriate advisory committee
established under section 135 of the Trade Act of 1974 (19
U.S.C. 2155) and the United States International Trade
Commission;
``(III) within 60 days after the request, the President has
submitted a report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate that sets forth the action proposed to be proclaimed
and the reasons for such actions, and the advice obtained
under subclause (II);
``(IV) a period of 60 calendar days, beginning with the
first day on which the President has met the requirements of
subclause (III), has expired; and
``(V) the President has consulted with such committees
regarding the proposed action during the period referred to
in subclause (III).

``(vi) Handloomed, handmade, and folklore articles.--A
handloomed, handmade, or folklore article of an ATPEA
beneficiary country identified under subparagraph (C) that is
certified as such by the competent authority of such
beneficiary country.
``(vii) Special rules.--

``(I) Exception for findings and trimmings.--(aa) An
article otherwise eligible for preferential treatment under
this paragraph shall not be ineligible for such treatment
because the article contains findings or trimmings of foreign
origin, if such findings and trimmings do not exceed 25
percent of the cost of the components of the assembled
product. Examples of findings and trimmings are sewing
thread, hooks and eyes, snaps, buttons, `bow buds',
decorative lace, trim, elastic strips, zippers, including
zipper tapes and labels, and other similar products. Elastic
strips are considered findings or trimmings only if they
are each less than 1 inch in width and are used in the
production of brassieres.

``(bb) In the case of an article described in clause (i)(I)
of this subparagraph, sewing thread shall not be treated as
findings or trimmings under this subclause.
``(II) Certain interlinings.--(aa) An article otherwise
eligible for preferential treatment under this paragraph
shall not be ineligible for such treatment because the
article contains certain interlinings of foreign origin, if
the value of

[[Page S3612]]

such interlinings (and any findings and trimmings) does not
exceed 25 percent of the cost of the components of the
assembled article.
``(bb) Interlinings eligible for the treatment described in
division (aa) include only a chest type plate, `hymo' piece,
or `sleeve header', of woven or weft-inserted warp knit
construction and of coarse animal hair or man-made filaments.
``(cc) The treatment described in this subclause shall
terminate if the President makes a determination that United
States manufacturers are producing such interlinings in the
United States in commercial quantities.
``(III) De minimis rule.--An article that would otherwise
be ineligible for preferential treatment under this paragraph
because the article contains yarns not wholly formed in the
United States or in 1 or more ATPEA beneficiary countries
shall not be ineligible for such treatment if the total
weight of all such yarns is not more than 7 percent of the
total weight of the good. Notwithstanding the preceding
sentence, an apparel article containing elastomeric yarns
shall be eligible for preferential treatment under this
paragraph only if such yarns are wholly formed in the United
States.
``(IV) Special origin rule.--An article otherwise eligible
for preferential treatment under clause (i) of this
subparagraph shall not be ineligible for such treatment
because the article contains nylon filament yarn (other than
elastomeric yarn) that is classifiable under subheading
5402.10.30, 5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30,
5402.32.60, 5402.41.10, 5402.41.90, 5402.51.00, or 5402.61.00
of the HTS duty-free from a country that is a party to an
agreement with the United States establishing a free trade
area, which entered into force before January 1, 1995.
``(V) Clarification of certain knit apparel articles.--
Notwithstanding any other provision of law, an article
otherwise eligible for preferential treatment under clause
(iii)(I) of this subparagraph, shall not be ineligible for
such treatment because the article, or a component thereof,
contains fabric formed in the United States from yarns wholly
formed in the United States.

``(viii) Textile luggage.--Textile luggage--

``(I) assembled in an ATPEA beneficiary country from fabric
wholly formed and cut in the United States, from yarns wholly
formed in the United States, that is entered under subheading
9802.00.80 of the HTS; or
``(II) assembled from fabric cut in an ATPEA beneficiary
country from fabric wholly formed in the United States from
yarns wholly formed in the United States.

``(B) Preferential treatment.--Except as provided in
subparagraph (E), during the transition period, the articles
to which subparagraph (A) applies shall enter the United
States free of duty and free of any quantitative
restrictions, limitations, or consultation levels.
``(C) Handloomed, handmade, and folklore articles.--For
purposes of subparagraph (A)(vi), the President shall consult
with representatives of the ATPEA beneficiary countries
concerned for the purpose of identifying particular textile
and apparel goods that are mutually agreed upon as being
handloomed, handmade, or folklore goods of a kind described
in section 2.3(a), (b), or (c) of the Annex or Appendix
3.1.B.11 of the Annex.
``(D) Penalties for transshipments.--
``(i) Penalties for exporters.--If the President
determines, based on sufficient evidence, that an exporter
has engaged in transshipment with respect to textile or
apparel articles from an ATPEA beneficiary country, then the
President shall deny all benefits under this title to such
exporter, and any successor of such exporter, for a period of
2 years.
``(ii) Penalties for countries.--Whenever the President
finds, based on sufficient evidence, that transshipment has
occurred, the President shall request that the ATPEA
beneficiary country or countries through whose territory the
transshipment has occurred take all necessary and appropriate
actions to prevent such transshipment. If the President
determines that a country is not taking such actions, the
President shall reduce the quantities of textile and apparel
articles that may be imported into the United States from
such country by the quantity of the transshipped articles
multiplied by 3, to the extent consistent with the
obligations of the United States under the WTO.
``(iii) Transshipment described.--Transshipment within the
meaning of this subparagraph has occurred when preferential
treatment under subparagraph (B) has been claimed for a
textile or apparel article on the basis of material false
information concerning the country of origin, manufacture,
processing, or assembly of the article or any of its
components. For purposes of this clause, false information is
material if disclosure of the true information would mean or
would have meant that the article is or was ineligible for
preferential treatment under subparagraph (B).
``(E) Bilateral emergency actions.--
``(i) In general.--The President may take bilateral
emergency tariff actions of a kind described in section 4 of
the Annex with respect to any apparel article imported
from an ATPEA beneficiary country if the application of
tariff treatment under subparagraph (B) to such article
results in conditions that would be cause for the taking
of such actions under such section 4 with respect to a
like article described in the same 8-digit subheading of
the HTS that is imported from Mexico.
``(ii) Rules relating to bilateral emergency action.--For
purposes of applying bilateral emergency action under this
subparagraph--

``(I) the requirements of paragraph (5) of section 4 of the
Annex (relating to providing compensation) shall not apply;
``(II) the term `transition period' in section 4 of the
Annex shall have the meaning given that term in paragraph
(5)(D) of this subsection; and
``(III) the requirements to consult specified in section 4
of the Annex shall be treated as satisfied if the President
requests consultations with the ATPEA beneficiary country in
question and the country does not agree to consult within the
time period specified under section 4.

``(3) Transition period treatment of certain other articles
originating in beneficiary countries.--
``(A) Equivalent tariff treatment.--
``(i) In general.--Subject to clause (ii), the tariff
treatment accorded at any time during the transition period
to any article referred to in any of subparagraphs (B), (D)
through (F), or (H) of paragraph (1) that is an ATPEA
originating good shall be identical to the tariff treatment
that is accorded at such time under Annex 302.2 of the NAFTA
to an article described in the same 8-digit subheading of the
HTS that is a good of Mexico and is imported into the United
States.
``(ii) Exception.--Clause (i) does not apply to any article
accorded duty-free treatment under U.S. Note 2(b) to
subchapter II of chapter 98 of the HTS.
``(B) Relationship to subsection (c) duty reductions.--If
at any time during the transition period the rate of duty
that would (but for action taken under subparagraph (A)(i) in
regard to such period) apply with respect to any article
under subsection (c) is a rate of duty that is lower than the
rate of duty resulting from such action, then such lower rate
of duty shall be applied for the purposes of implementing
such action.
``(C) Special rule for sugars, syrups, and sugar containing
products.--Duty-free treatment under this Act shall not be
extended to sugars, syrups, and sugar-containing products
subject to over-quota duty rates under applicable tariff-rate
quotas.
``(D) Special rule for certain tuna products.--
``(i) In general.--The President may proclaim duty-free
treatment under this Act for tuna that is harvested by United
States vessels or ATPEA beneficiary country vessels, and is
prepared or preserved in any manner, in airtight containers
in an ATPEA beneficiary country. Such duty-free treatment may
be proclaimed in any calendar year for a quantity of such
tuna that does not exceed 20 percent of the domestic United
States tuna pack in the preceding calendar year. As used in
the preceding sentence, the term `tuna pack' means tuna pack
as defined by the National Marine Fisheries Service of the
United States Department of Commerce for purposes of
subheading 1604.14.20 of the HTS as in effect on the date of
enactment of the Andean Trade Preference Expansion Act.
``(ii) United states vessel.--For purposes of this
subparagraph, a `United States vessel' is a vessel having a
certificate of documentation with a fishery endorsement under
chapter 121 of title 46, United States Code.
``(iii) ATPEA vessel.--For purposes of this subparagraph,
an `ATPEA vessel' is a vessel--

``(I) which is registered or recorded in an ATPEA
beneficiary country;
``(II) which sails under the flag of an ATPEA beneficiary
country;
``(III) which is at least 75 percent owned by nationals of
an ATPEA beneficiary country or by a company having its
principal place of business in an ATPEA beneficiary country,
of which the manager or managers, chairman of the board of
directors or of the supervisory board, and the majority of
the members of such boards are nationals of an ATPEA
beneficiary country and of which, in the case of a company,
at least 50 percent of the capital is owned by an ATPEA
beneficiary country or by public bodies or nationals of an
ATPEA beneficiary country;
``(IV) of which the master and officers are nationals of an
ATPEA beneficiary country; and
``(V) of which at least 75 percent of the crew are
nationals of an ATPEA beneficiary country.

``(4) Customs procedures.--
``(A) In general.--
``(i) Regulations.--Any importer that claims preferential
treatment under paragraph (2) or (3) shall comply with
customs procedures similar in all material respects to the
requirements of Article 502(1) of the NAFTA as implemented
pursuant to United States law, in accordance with regulations
promulgated by the Secretary of the Treasury.
``(ii) Determination.--

``(I) In general.--In order to qualify for the preferential
treatment under paragraph (2) or (3) and for a Certificate of
Origin to be valid with respect to any article for which such
treatment is claimed, there shall be in effect a
determination by the President that each country described in
subclause (II)--

``(aa) has implemented and follows; or
``(bb) is making substantial progress toward implementing
and following, procedures and requirements similar in all
material respects to the relevant procedures and
requirements under chapter 5 of the NAFTA.

``(II) Country described.--A country is described in this
subclause if it is an ATPEA beneficiary country--

``(aa) from which the article is exported; or
``(bb) in which materials used in the production of the
article originate or in which the article or such materials
undergo production that contributes to a claim that the
article is eligible for preferential treatment under
paragraph (2) or (3).
``(B) Certificate of origin.--The Certificate of Origin
that otherwise would be required pursuant to the provisions
of subparagraph (A) shall not be required in the case of an
article imported under paragraph (2) or (3) if such
Certificate of Origin would not be required under Article 503
of the NAFTA (as implemented pursuant to United States law),
if the article were imported from Mexico.

[[Page S3613]]

``(C) Report by ustr on cooperation of other countries
concerning circumvention.--The United States Commissioner of
Customs shall conduct a study analyzing the extent to which
each ATPEA beneficiary country--
``(i) has cooperated fully with the United States,
consistent with its domestic laws and procedures, in
instances of circumvention or alleged circumvention of
existing quotas on imports of textile and apparel goods, to
establish necessary relevant facts in the places of import,
export, and, where applicable, transshipment, including
investigation of circumvention practices, exchanges of
documents, correspondence, reports, and other relevant
information, to the extent such information is available;
``(ii) has taken appropriate measures, consistent with its
domestic laws and procedures, against exporters and importers
involved in instances of false declaration concerning fiber
content, quantities, description, classification, or origin
of textile and apparel goods; and
``(iii) has penalized the individuals and entities involved
in any such circumvention, consistent with its domestic laws
and procedures, and has worked closely to seek the
cooperation of any third country to prevent such
circumvention from taking place in that third country.
The Trade Representative shall submit to Congress, not later
than October 1, 2002, a report on the study conducted under
this subparagraph.
``(5) Definitions and special rules.--For purposes of this
subsection--
``(A) Annex.--The term `the Annex' means Annex 300-B of the
NAFTA.
``(B) ATPEA beneficiary country.--The term `ATPEA
beneficiary country' means any `beneficiary country', as
defined in section 203(a)(1) of this title, which the
President designates as an ATPEA beneficiary country, taking
into account the criteria contained in subsections (c) and
(d) of section 203 and other appropriate criteria, including
the following:
``(i) Whether the beneficiary country has demonstrated a
commitment to--

``(I) undertake its obligations under the WTO, including
those agreements listed in section 101(d) of the Uruguay
Round Agreements Act, on or ahead of schedule; and
``(II) participate in negotiations toward the completion of
the FTAA or another free trade agreement.

``(ii) The extent to which the country provides protection
of intellectual property rights consistent with or greater
than the protection afforded under the Agreement on Trade-
Related Aspects of Intellectual Property Rights described in
section 101(d)(15) of the Uruguay Round Agreements Act.
``(iii) The extent to which the country provides
internationally recognized worker rights, including--

``(I) the right of association;
``(II) the right to organize and bargain collectively;
``(III) a prohibition on the use of any form of forced or
compulsory labor;
``(IV) a minimum age for the employment of children; and
``(V) acceptable conditions of work with respect to minimum
wages, hours of work, and occupational safety and health;

``(iv) Whether the country has implemented its commitments
to eliminate the worst forms of child labor, as defined in
section 507(6) of the Trade Act of 1974.
``(v) The extent to which the country has met the counter-
narcotics certification criteria set forth in section 490 of
the Foreign Assistance Act of 1961 (22 U.S.C. 2291j) for
eligibility for United States assistance.
``(vi) The extent to which the country has taken steps to
become a party to and implements the Inter-American
Convention Against Corruption.
``(vii) The extent to which the country--

``(I) applies transparent, nondiscriminatory, and
competitive procedures in government procurement equivalent
to those contained in the Agreement on Government Procurement
described in section 101(d)(17) of the Uruguay Round
Agreements Act; and
``(II) contributes to efforts in international fora to
develop and implement international rules in transparency in
government procurement.

``(C) ATPEA originating good.--
``(i) In general.--The term `ATPEA originating good' means
a good that meets the rules of origin for a good set forth in
chapter 4 of the NAFTA as implemented pursuant to United
States law.
``(ii) Application of chapter 4.--In applying chapter 4 of
the NAFTA with respect to an ATPEA beneficiary country for
purposes of this subsection--

``(I) no country other than the United States and an ATPEA
beneficiary country may be treated as being a party to the
NAFTA;
``(II) any reference to trade between the United States and
Mexico shall be deemed to refer to trade between the United
States and an ATPEA beneficiary country;
``(III) any reference to a party shall be deemed to refer
to an ATPEA beneficiary country or the United States; and
``(IV) any reference to parties shall be deemed to refer to
any combination of ATPEA beneficiary countries or to the
United States and one or more ATPEA beneficiary countries (or
any combination thereof ).

``(D) Transition period.--The term `transition period'
means, with respect to an ATPEA beneficiary country, the
period that begins on the date of enactment, and ends on the
earlier of--
``(i) February 28, 2006; or
``(ii) the date on which the FTAA or another free trade
agreement that makes substantial progress in achieving the
negotiating objectives set forth in section 108(b)(5) of
Public Law 103-182 (19 U.S.C. 3317(b)(5)) enters into force
with respect to the United States and the ATPEA beneficiary
country.
``(E) ATPEA.--The term `ATPEA' means the Andean Trade
Preference Expansion Act.
``(F) FTAA.--The term `FTAA' means the Free Trade Area of
the Americas.''.
(b) Determination Regarding Retention of Designation.--
Section 203(e) of the Andean Trade Preference Act (19 U.S.C.
3202(e)) is amended--
(1) in paragraph (1)--
(A) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively;
(B) by inserting ``(A)'' after ``(1)''; and
(C) by adding at the end the following:
``(B) The President may, after the requirements of
paragraph (2) have been met--
``(i) withdraw or suspend the designation of any country as
an ATPEA beneficiary country; or
``(ii) withdraw, suspend, or limit the application of
preferential treatment under section 204(b) (2) and (3) to
any article of any country,
if, after such designation, the President determines that, as
a result of changed circumstances, the performance of such
country is not satisfactory under the criteria set forth in
section 204(b)(5)(B).''; and
(2) by adding after paragraph (2) the following new
paragraph:
``(3) If preferential treatment under section 204(b) (2)
and (3) is withdrawn, suspended, or limited with respect to
an ATPEA beneficiary country, such country shall not be
deemed to be a `party' for the purposes of applying section
204(b)(5)(C) to imports of articles for which preferential
treatment has been withdrawn, suspended, or limited with
respect to such country.''.
(c) Reporting Requirements.--Section 203(f ) of the Andean
Trade Preference Act (19 U.S.C. 3202(f )) is amended to read
as follows:
``(f ) Reporting Requirements.--
``(1) In general.--Not later than December 31, 2002, and
every 2 years thereafter during the period this title is in
effect, the United States Trade Representative shall submit
to Congress a report regarding the operation of this title,
including--
``(A) with respect to subsections (c) and (d), the results
of a general review of beneficiary countries based on the
considerations described in such subsections; and
``(B) the performance of each beneficiary country or ATPEA
beneficiary country, as the case may be, under the criteria
set forth in section 204(b)(5)(B).
``(2) Public comment.--Before submitting the report
described in paragraph (1), the United States Trade
Representative shall publish a notice in the Federal Register
requesting public comments on whether beneficiary countries
are meeting the criteria listed in section 204(b)(5)(B).''.
(d) Conforming Amendments.--
(1) In general.--
(A) Section 202 of the Andean Trade Preference Act (19
U.S.C. 3201) is amended by inserting ``(or other preferential
treatment)'' after ``treatment''.
(B) Section 204(a)(1) of the Andean Trade Preference Act
(19 U.S.C. 3203(a)(1)) is amended by inserting ``(or
otherwise provided for)'' after ``eligibility''.
(C) Section 204(a)(1) of the Andean Trade Preference Act
(19 U.S.C. 3203(a)(1)) is amended by inserting ``(or
preferential treatment)'' after ``duty-free treatment''.
(2) Definitions.--Section 203(a) of the Andean Trade
Preference Act (19 U.S.C. 3202(a)) is amended by adding at
the end the following new paragraphs:
``(4) The term ``NAFTA'' means the North American Free
Trade Agreement entered into between the United States,
Mexico, and Canada on December 17, 1992.
``(5) 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. 103. TERMINATION.

Section 208(b) of the Andean Trade Preference Act (19
U.S.C. 3206(b)) is amended to read as follows:
``(b) Termination of Preferential Treatment.--No
preferential duty treatment extended to beneficiary countries
under this Act shall remain in effect after February 28,
2006.''.

TITLE II--MISCELLANEOUS TRADE PROVISIONS

SEC. 201. WOOL PROVISIONS.

(a) Short Title.--This section may be cited as the ``Wool
Manufacturer Payment Clarification and Technical Corrections
Act''.
(b) Clarification of Temporary Duty Suspension.--Heading
9902.51.13 of the Harmonized Tariff Schedule of the United
States is amended by inserting ``average'' before
``diameters''.
(c) Payments to Manufacturers of Certain Wool Products.--
(1) Payments.--Section 505 of the Trade and Development Act
of 2000 (Public Law 106-200; 114 Stat. 303) is amended as
follows:
(A) Subsection (a) is amended--
(i) by striking ``In each of the calendar years'' and
inserting ``For each of the calendar years''; and
(ii) by striking ``for a refund of duties'' and all that
follows through the end of the subsection and inserting ``for
a payment equal to an amount determined pursuant to
subsection (d)(1).''.
(B) Subsection (b) is amended to read as follows:
``(b) Wool Yarn.--
``(1) Importing manufacturers.--For each of the calendar
years 2000, 2001, and 2002, a manufacturer of worsted wool
fabrics who imports wool yarn of the kind described in
heading 9902.51.13 of the Harmonized Tariff Schedule of the
United States shall be eligible for a payment equal to an
amount determined pursuant to subsection (d)(2).

[[Page S3614]]

``(2) Nonimporting manufacturers.--For each of the calendar
years 2001 and 2002, any other manufacturer of worsted wool
fabrics of imported wool yarn of the kind described in
heading 9902.51.13 of the Harmonized Tariff Schedule of the
United States shall be eligible for a payment equal to an
amount determined pursuant to subsection (d)(2).''.
(C) Subsection (c) is amended to read as follows:
``(c) Wool Fiber and Wool Top.--
``(1) Importing manufacturers.--For each of the calendar
years 2000, 2001, and 2002, a manufacturer of wool yarn or
wool fabric who imports wool fiber or wool top of the kind
described in heading 9902.51.14 of the Harmonized Tariff
Schedule of the United States shall be eligible for a payment
equal to an amount determined pursuant to subsection (d)(3).
``(2) Nonimporting manufacturers.--For each of the calendar
years 2001 and 2002, any other manufacturer of wool yarn or
wool fabric of imported wool fiber or wool top of the kind
described in heading 9902.51.14 of the Harmonized Tariff
Schedule of the United States shall be eligible for a payment
equal to an amount determined pursuant to subsection
(d)(3).''.
(D) Section 505 is further amended by striking subsection
(d) and inserting the following new subsections:
``(d) Amount of Annual Payments to Manufacturers.--
``(1) Manufacturers of men's suits, etc. of imported
worsted wool fabrics.--
``(A) Eligible to receive more than $5,000.--Each annual
payment to manufacturers described in subsection (a) who,
according to the records of the Customs Service as of
September 11, 2001, are eligible to receive more than $5,000
for each of the calendar years 2000, 2001, and 2002, shall be
in an amount equal to one-third of the amount determined by
multiplying $30,124,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the duties paid on eligible wool products imported in
calendar year 1999 by the manufacturer making the claim, and
``(ii) the denominator of which is the total amount
attributable to the duties paid on eligible wool products
imported in calendar year 1999 by all the manufacturers
described in subsection (a) who, according to the records of
the Customs Service as of September 11, 2001, are eligible to
receive more than $5,000 for each such calendar year under
this section as it was in effect on that date.
``(B) Eligible wool products.--For purposes of subparagraph
(A), the term `eligible wool products' refers to imported
worsted wool fabrics described in subsection (a).
``(C) Others.--All manufacturers described in subsection
(a), other than the manufacturer's to which subparagraph (A)
applies, shall each receive an annual payment in an amount
equal to one-third of the amount determined by dividing
$1,665,000 by the number of all such other manufacturers.
``(2) Manufacturers of worsted wool fabrics of imported
wool yarn.--
``(A) Importing manufacturers.--Each annual payment to an
importing manufacturer described in subsection (b)(1) shall
be in an amount equal to one-third of the amount
determined by multiplying $2,202,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the duties paid on eligible wool products imported in
calendar year 1999 by the importing manufacturer making the
claim, and
``(ii) the denominator of which is the total amount
attributable to the duties paid on eligible wool products
imported in calendar year 1999 by all the importing
manufacturers described in subsection (b)(1).
``(B) Eligible wool products.--For purposes of subparagraph
(A), the term `eligible wool products' refers to imported
wool yarn described in subsection (b)(1).
``(C) Nonimporting manufacturers.--Each annual payment to a
nonimporting manufacturer described in subsection (b)(2)
shall be in an amount equal to one-half of the amount
determined by multiplying $141,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the purchases of imported eligible wool products in calendar
year 1999 by the nonimporting manufacturer making the claim,
and
``(ii) the denominator of which is the total amount
attributable to the purchases of imported eligible wool
products in calendar year 1999 by all the nonimporting
manufacturers described in subsection (b)(2).
``(3) Manufacturers of wool yarn or wool fabric of imported
wool fiber or wool top.--
``(A) Importing manufacturers.--Each annual payment to an
importing manufacturer described in subsection (c)(1) shall
be in an amount equal to one-third of the amount determined
by multiplying $1,522,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the duties paid on eligible wool products imported in
calendar year 1999 by the importing manufacturer making the
claim, and
``(ii) the denominator of which is the total amount
attributable to the duties paid on eligible wool products
imported in calendar year 1999 by all the importing
manufacturers described in subsection (c)(1).
``(B) Eligible wool products.--For purposes of subparagraph
(A), the term `eligible wool products' refers to imported
wool fiber or wool top described in subsection (c)(1).
``(C) Nonimporting manufacturers.--Each annual payment to a
nonimporting manufacturer described in subsection (c)(2)
shall be in an amount equal to one-half of the amount
determined by multiplying $597,000 by a fraction--
``(i) the numerator of which is the amount attributable to
the purchases of imported eligible wool products in calendar
year 1999 by the nonimporting manufacturer making the claim,
and
``(ii) the denominator of which is the amount attributable
to the purchases of imported eligible wool products in
calendar year 1999 by all the nonimporting manufacturers
described in subsection (c)(2).
``(4) Letters of intent.--Except for the nonimporting
manufacturers described in subsections (b)(2) and (c)(2) who
may make claims under this section by virtue of the enactment
of the Wool Manufacturer Payment Clarification and Technical
Corrections Act, only manufacturers who, according to the
records of the Customs Service, filed with the Customs
Service before September 11, 2001, letters of intent to
establish eligibility to be claimants are eligible to make a
claim for a payment under this section.
``(5) Amount attributable to purchases by nonimporting
manufacturers.--
``(A) Amount attributable.--For purposes of paragraphs
(2)(C) and (3)(C), the amount attributable to the purchases
of imported eligible wool products in calendar year 1999 by a
nonimporting manufacturer shall be the amount the
nonimporting manufacturer paid for eligible wool products in
calendar year 1999, as evidenced by invoices. The
nonimporting manufacturer shall make such calculation and
submit the resulting amount to the Customs Service, within 45
days after the date of enactment of the Wool Manufacturer
Payment Clarification and Technical Corrections Act, in a
signed affidavit that attests that the information contained
therein is true and accurate to the best of the affiant's
belief and knowledge. The nonimporting manufacturer shall
retain the records upon which the calculation is based for a
period of five years beginning on the date the affidavit is
submitted to the Customs Service.
``(B) Eligible wool product.--For purposes of subparagraph
(A)--
``(i) the eligible wool product for nonimporting
manufacturers of worsted wool fabrics is wool yarn of the
kind described in heading 9902.51.13 of the Harmonized Tariff
Schedule of the United States purchased in calendar year
1999; and
``(ii) the eligible wool products for nonimporting
manufacturers of wool yarn or wool fabric are wool fiber or
wool top of the kind described in heading 9902.51.14 of such
Schedule purchased in calendar year 1999.
``(6) Amount attributable to duties paid.--For purposes of
paragraphs (1), (2)(A), and (3)(A), the amount attributable
to the duties paid by a manufacturer shall be the amount
shown on the records of the Customs Service as of September
11, 2001, under this section as then in effect.
``(7) Schedule of payments; reallocations.--
``(A) Schedule.--Of the payments described in paragraphs
(1), (2)(A), and (3)(A), the Customs Service shall make the
first installment on or before December 31, 2001, the second
installment on or before April 15, 2002, and the third
installment on or before April 15, 2003. Of the payments
described in paragraphs (2)(C) and (3)(C), the Customs
Service shall make the first installment on or before April
15, 2002, and the second installment on or before April 15,
2003.
``(B) Reallocations.--In the event that a manufacturer that
would have received payment under subparagraph (A) or (C) of
paragraph (1), (2), or (3) ceases to be qualified for such
payment as such a manufacturer, the amounts otherwise payable
to the remaining manufacturers under such subparagraph shall
be increased on a pro rata basis by the amount of the payment
such manufacturer would have received.
``(8) Reference.--For purposes of paragraphs (1)(A) and
(6), the `records of the Customs Service as of September 11,
2001' are the records of the Wool Duty Unit of the Customs
Service on September 11, 2001, as adjusted by the Customs
Service to the extent necessary to carry out this section.
The amounts so adjusted are not subject to administrative or
judicial review.
``(e) Affidavits by Manufacturers.--
``(1) Affidavit required.--A manufacturer may not receive a
payment under this section for calendar year 2000, 2001, or
2002, as the case may be, unless that manufacturer has
submitted to the Customs Service for that calendar year a
signed affidavit that attests that, during that calendar
year, the affiant was a manufacturer in the United States
described in subsection (a), (b), or (c).
``(2) Timing.--An affidavit under paragraph (1) shall be
valid--
``(A) in the case of a manufacturer described in paragraph
(1), (2)(A), or (3)(A) of subsection (d) filing a claim for a
payment for calendar year 2000, only if the affidavit is
postmarked no later than 15 days after the date of enactment
of the Wool Manufacturer Payment Clarification and Technical
Corrections Act; and
``(B) in the case of a claim for a payment for calendar
year 2001 or 2002, only if the affidavit is postmarked no
later than March 1, 2002, or March 1, 2003, respectively.
``(f) Offsets.--Notwithstanding any other provision of this
section, any amount otherwise payable under subsection (d) to
a manufacturer in calendar year 2001 and, where applicable,
in calendar years 2002 and 2003, shall be reduced by the
amount of any payment received by that manufacturer under
this section before the enactment of the Wool Manufacturer
Payment Clarification and Technical Corrections Act.
``(g) Definition.--For purposes of this section, the
manufacturer is the party that owns--
``(1) imported worsted wool fabric, of the kind described
in heading 9902.51.11 or 9902.51.12 of the Harmonized Tariff
Schedule of the United States, at the time the fabric is cut
and sewn in the United States into men's or boys' suits,
suit-type jackets, or trousers;
``(2) imported wool yarn, of the kind described in heading
9902.51.13 of such Schedule, at the time the yarn is
processed in the United States into worsted wool fabric; or
``(3) imported wool fiber or wool top, of the kind
described in heading 9902.51.14 of such

[[Page S3615]]

Schedule, at the time the wool fiber or wool top is processed
in the United States into wool yarn.''.
(2) Funding.--There is authorized to be appropriated and is
appropriated, out of amounts in the General Fund of the
Treasury not otherwise appropriated, $36,251,000 to carry out
the amendments made by paragraph (1).

SEC. 202. CEILING FANS.

(a) In General.--Notwithstanding any other provision of
law, ceiling fans classified under subheading 8414.51.00 of
the Harmonized Tariff Schedule of the United States imported
from Thailand shall enter duty-free and without any
quantitative limitations, if duty-free treatment under title
V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.) would
have applied to such entry had the competitive need
limitation been waived under section 503(d) of such Act.
(b) Applicability.--The provisions of this section shall
apply to ceiling fans described in subsection (a) that are
entered, or withdrawn from warehouse for consumption--
(1) on or after the date that is 15 days after the date of
enactment of this Act; and
(2) before July 30, 2002.

SEC. 203. CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS
USED IN NUCLEAR FACILITIES.

(a) In General.--Subheading 9902.84.02 of the Harmonized
Tariff Schedule of the United States is amended--
(1) by striking ``4.9%'' and inserting ``Free''; and
(2) by striking ``12/31/2003'' and inserting ``12/31/
2006''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to goods entered, or withdrawn from warehouse for
consumption, on or after January 1, 2002.

Amendment No. 3386

Mr. DASCHLE. Madam President, with the authority of the Finance
Committee, I withdraw the committee amendment and send an amendment to
the desk.
The PRESIDING OFFICER. The committee amendment is withdrawn.
The clerk will report the amendment.
The legislative clerk read as follows:

The Senator from South Dakota [Mr. Daschle] proposes an
amendment numbered 3386.

Mr. DASCHLE. I ask unanimous consent that further reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is printed in today's Record under ``Text
of Amendments.'')
Mr. DASCHLE. Madam President, we have just sent to the desk
legislation that includes three components: First, the trade promotion
authority; second, trade adjustment assistance; and third, the Andean
Trade Preference Expansion Act.
The trade adjustment assistance measures are particularly crucial
because they will provide help to dislocated workers. This package
includes job search assistance, unemployment insurance, and, for the
first time, much needed health benefits. We are now ready to begin the
debate on this important trade legislation and, as we have noted for
some time, this bill is open to amendment and we encourage Senators to
come forth with their amendments soon.
I look forward to a full and spirited debate. I yield the floor.
The PRESIDING OFFICER. The Senator from Mississippi is recognized.
Mr. LOTT. Madam President, sometime when the Senate is doing its best
work, it is not always visible. Throughout the day, we have been having
discussions that involved the managers of this legislation. They have
been talking to members of the Finance Committee and communicating with
the administration. It is very important that we have the straight
legislation. There are a lot of different views on both sides of the
aisle about exactly how this should proceed, or whether it is a good
idea.
There are those who say, yes, we would like to have trade promotion
authority, but there must be trade adjustment assistance to go with it
for those who might be displaced from jobs so they can get assistance
with training and get into the next job.
It is important we move forward. Everybody's options are still
preserved. Senator Daschle and I have indicated to each other that
there is not going to be any precipitous move. We want to take a look
at the actual language. Sometimes it is hard to negotiate a moving
target or when there is not a clear understanding of what is involved.
We now have a document. We are going to take a look at it tonight. I
hope we can begin to move forward, perhaps even with amendments
tomorrow. We will go over the language, and we will be talking further
with the managers of the legislation and make sure the administration
has a chance to review it.
I look forward to a full debate and amendment process. I do wish to
add--and I know Senator Daschle is thinking it right now--this should
not take place over weeks, as we experienced with the energy bill. We
have some important issues, some tough issues, but once we see if we
can come to agreement on two or three of these issues or get votes on a
couple of these issues, we should be able to move it forward in an
expeditious way.
It did not work on the energy bill, but I do think this week, and
hopefully by the end of next week, we will have an agreement on which
we can vote. It is worth the effort, and I am prepared to put a lot of
time into it.
I thank Senator Daschle for agreeing to lay this legislation down so
we can take a look at it. We will continue working together tomorrow.
The PRESIDING OFFICER. The majority leader.
Mr. DASCHLE. Madam President, first, I compliment and thank the
distinguished Republican leader for the cooperative effort he has put
forth to get to this point. We have talked on many occasions over the
last several days, and the spirit with which he has discussed the
importance of this legislation, as well as the importance of a good
debate, is exactly the one I hold as well.
I encourage Senators to offer amendments, but let me also say, as the
Senator alluded, we will be able to determine whether this is good
faith or not, whether we are just delaying for the sake of delaying;
that will not be something we can tolerate. But we certainly encourage
a good and vigorous debate with ample opportunity to offer amendments.
There is a difference between simply delaying for delaying sake and
amendments for the sake of changing, improving, or in some way altering
the legislation as it has been introduced.
Again, we will work with all of our colleagues to accommodate that
and look forward to the debate beginning tonight and again tomorrow
morning. I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.

Amendment No. 3387 To Amendment No. 3386

Mr. DORGAN. Madam President, I rise to offer an amendment. I send an
amendment to the desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:

The Senator from North Dakota [Mr. Dorgan], for himself and
Mr. Craig, proposes an amendment numbered 3387 to amendment
No. 3386.

Mr. DORGAN. Madam President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place, insert the following:

SEC. ____. SECRET TRIBUNALS.

(a) Findings.--Congress makes the following findings:
(1) Chapter Eleven of the North American Free Trade
Agreement (``NAFTA'') allows foreign investors to file claims
against signatory countries that directly or indirectly
nationalize or expropriate an investment, or take measures
``tantamount to nationalization or expropriation'' of such an
investment.
(2) Foreign investors have filed several claims against the
United States, arguing that regulatory activity has been
``tantamount to nationalization or expropriation''. Most
notably, a Canadian chemical company claimed $970,000,000 in
damages allegedly resulting from a California State
regulation banning the use of a gasoline additive produced by
that company.
(3) A claim under Chapter Eleven of the NAFTA is
adjudicated by a three-member panel, whose deliberations are
largely secret.
(4) While it may be necessary to protect the
confidentiality of business sensitive information, the
general lack of transparency of these proceedings has been
excessive.
(b) Purpose.--The purpose of this amendment is to ensure
that the proceedings of the NAFTA investor protection
tribunals are as transparent as possible, consistent with the
need to protect the confidentiality of business sensitive
information.
(c) Chapter 11 of NAFTA.--The President shall negotiate
with Canada and Mexico an amendment to Chapter Eleven of the
NAFTA to ensure the fullest transparency possible with
respect to the dispute settlement mechanism in that Chapter,
consistent with the need to protect information that is
classified or confidential, by--

[[Page S3616]]

(1) ensuring that all requests for dispute settlement under
Chapter Eleven are promptly made public;
(2) ensuring that with respect to Chapter Eleven--
(A) all proceedings, submissions, findings, and decisions
are promptly made public; and
(B) all hearings are open to the public; and
(3) establishing a mechanism under that Chapter for
acceptance of amicus curiae submissions from businesses,
unions, and nongovernmental organizations.
(d) Certification Requirements.--Within one year of the
enactment of this Act, the U.S. Trade Representative shall
certify to Congress that the President has fulfilled the
requirements set forth in subsection (c).

Mr. DORGAN. Madam President, I understand the rather lengthy
managers' amendment has just been offered. I do not know how many pages
it is, but obviously we will have to study it. It is a substantial
amendment.
I offer my amendment in the first degree to the managers' amendment
that was just offered. I will describe it briefly. I understand there
are no further votes today, and perhaps I will discuss it briefly and
then discuss it some in the morning. I hope perhaps tomorrow we may
have a vote on it. I offer this amendment on behalf of myself and
Senator Craig from Idaho.
The amendment is relatively simple. This amendment deals with Chapter
11 of the North American Free Trade Agreement. Under Chapter 11 of
NAFTA, secret multinational tribunals consider claims by private
investors against member countries, including claims by foreign
investors against the U.S. Government. This amendment would end the
undemocratic and unfair secrecy in these tribunals.
My amendment directs the President to negotiate with Canada and
Mexico an amendment to NAFTA that would require transparency in these
tribunals. The U.S. Trade Representative under this amendment is to
certify to Congress that this has been done within 12 months of the
enactment.
Even the supporters of fast track have recognized that secrecy is not
appropriate, and yet we have these tribunals that are secret. No one is
allowed to understand their work; no one can be a part of their
discussions; no one understands the deliberations. The door is locked.
Three members are appointed to a tribunal. They meet in secret, make
judgments in secret, make decisions in secret, and then we are told the
result. That is not the way for this country to proceed with respect to
dispute resolutions to trade agreements.
U.S. Trade Representative Zoellick has recognized this secrecy is a
problem, and he met with his counterparts from Mexico and Canada on
this issue. In fact, they agreed there needed to be more openness, and
they announced that July 31 of last year. They said that these
tribunals will operate as openly as possible.
But just last month, a NAFTA tribunal refused to open their
proceedings once again and rejected the guidelines by Ambassador
Zoellick and his counterparts.
This amendment will fix a problem that everyone, including the
administration, acknowledges. It will require transparency. It will
require an end to the secrecy, an opening up of the process so the
American people can understand how this democratic process must work.
We cannot and should not be a party to secret tribunals. We have
been, but we should not be, and my amendment will remedy that.
I understand that in the negotiating objectives described in the
managers' amendment, there is language that would address the secrecy
of the tribunals going forward for future agreements. I do not know
that for certain. I am told that is part of the managers' amendment.
If it is the case, it seems logical to me that we would want to
extend that to other agreements with which we are now engaged,
including the North American Free Trade Agreement.
I might mention again--I do not have all the details--but we have a
situation in California where California understood that an additive to
gasoline called MTBE was showing up in drinking water and ground water.
They discovered that is dangerous to people, and California banned MTBE
from being added to gasoline in California. A couple of other States
have taken the same action.

A Canadian company that manufactures MTBE has filed an action under
NAFTA and is asking for hundreds of millions of dollars against
California and our country because we are taking action to protect our
citizens. They say they have been injured by this and have a right
under NAFTA to make the claim; then, a tribunal is developed and begins
to meet and it is totally secret. Its proceedings are totally,
completely secret. The American public is told: You are not involved;
you cannot see, you cannot be a part of this; it is none of your
business.
Talk about a bizarre set of circumstances for a democracy to enter
into trade agreements by which we allow someone from another country to
challenge a State government in our country, just because it is trying
to protect their citizens from poisons in the drinking water, chemicals
that are harmful to human health. We end up being sued under a trade
agreement for damages totaling hundreds of millions of dollars, just
for protecting our people; and we are told that this suit will be
determined by a tribunal that will meet in secret. What is that about?
Does anybody really think this makes any sense? Can anybody really
support this? We will have a vote on this and see whether people will.
This amendment, which is bipartisan--Senator Craig and I are offering
it--is a simple one. It says we are a party to trade agreements--we
understand that--but we cannot and should not be a party to a trade
agreement by which investor dispute tribunals will be conducted in
secret. They have been in the past, they should not ever be again, and
our amendment says, stop it, this country cannot be a part of that.
I will speak at greater length about the amendment and describe in
some more detail the MTBE saga, which I think is symbolic of the
egregious actions of tribunals meeting in secrecy. I will not do that
this evening. I will do that in the morning.
Mr. REID. Will the Senator yield for a question?
Mr. DORGAN. I will be happy to yield.
Mr. REID. I appreciate the Senator offering this amendment at this
time. Based on what the majority leader just said, that he wanted, in
effect, quality amendments, I think he has one here. This is the type
of amendment people should look forward to, I hope.
Of what I know about the Senator's amendment--and I have spoken with
him off the floor--it is going to be a tough amendment to vote against.
How can anybody be in favor of secret meetings when they deal with some
of the most important issues in this country and, in fact, our
relations with other countries? I do not think we should be doing that
in secret. That is what the Senator is saying; is that not true?
Mr. DORGAN. That is the case. This is an amendment I am offering,
along with my colleague Senator Craig from Idaho. It is bipartisan. And
whether you are in favor of fast track or opposed to it, you should be
opposed to tribunals meeting in secret.
I think we will find agreement between both supporters and opponents
of fast track that we ought not be a party to tribunals that are
secret, that are shielded from the view of the American people. I am
going to use the MTBE case tomorrow morning to graphically demonstrate
how absurd it is that we could be sued under a trade law for taking
action, or we can have action taken against us for our deciding we want
to protect the health of the American people and that the dispute will
be resolved behind a cloak of secrecy. That is not what this country
should be involved in.
It is at this point because that is the way NAFTA works, but we can
change it. This Congress can change it, and I hope tomorrow by voting
for this amendment this Congress will change it.
I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Madam President, I will speak on the bill, but I first
want to make a comment not for or against the amendment of the Senator
from North Dakota but to put it in context. The reason I cannot make a
comment for or against the amendment of the Senator from North Dakota
is at this point I have not read it or studied it. I do think he has
brought up an issue of transparency, and it deals with NAFTA. On all
agreements, particularly WTO agreements, there has been

[[Page S3617]]

a big concern about the process not being transparent enough.
Senator Baucus and I, in the Finance Committee, have spoken about the
necessity for doing this in several different venues. We have spoken
with people from the European Community about it. We believe the
process of the WTO, for instance, should be very much more transparent
than it has been in the past. So the issue of transparency is one that
does fall on acceptable ears in a very general sense, not necessarily
related to the amendment of the Senator from North Dakota but in a very
general sense with most of us in the Congress of the United States.
Where we have run into most of the opposition is from the European
Community.
We have also had a lot of the developing nations of the world that
are members of the World Trade Organization be highly in favor of more
transparency.
The issue of transparency was the basis for a lot of the protests in
Seattle, and since then there has been a real determined look at the
process. A lot of us have come to the conclusion that whatever we can
do to promote more transparency we should.
Speaking now on the bill and where we are at this point, particularly
now that we do have a substitute amendment before us laid down by the
Senate majority leader, I am encouraged on the one hand, dismayed on
the other, by the action taken today in the laying down of this
amendment.

I am encouraged because, after months of delays, we are moving
forward on trade promotion authority. The House passed TPA last year.
Unfortunately, TPA has languished much too long in the Senate. So I
definitely am glad we are moving forward. In a minute I will talk about
being dismayed.
In regard to moving forward, the fact is, while we were sitting on
the sidelines for the last 5 or 6 years that our President has not had
trade promotion authority, the United States is a party to only 3
agreements out of some 130 free trade agreements negotiated worldwide.
That means other countries get better access to foreign markets than we
do. That is unfair.
Let me give some examples. Today, the average U.S. tariff is 4.8
percent. In contrast, Brazil's tariff averages 14.6 percent; Thailand,
45.6 percent. That is much too high. We need to correct the imbalance,
and the best way to do that is by providing our President with the
tools he needs to tear down these barriers to our exports. The most
important tool we have to accomplish that is through trade promotion
authority.
Let me go through those figures once more to emphasize the point. The
United States has an average tariff of 4.8 percent. We have Brazil much
higher at 14.6 percent and Thailand at 45.6 percent. So if anybody in
this body ever wonders whether it is a benefit to the United States to
be involved in regimes of negotiating down barriers to trade, and
particularly tariffs, they ought to understand that for the United
States, at 4.8 percent compared to 14.6 percent, and 45 percent for
Thailand, they must be brought down, even if they are not brought down
to where we are. That is a win-win situation for the American worker,
as jobs that are created in international trade are good jobs that pay
15 percent above the national average. So the President then needs
trade promotion authority to represent the interests of American
workers in international trade negotiations.
He has not been there for 127 of the agreements reached in the last
few years. He has not been there because Congress has not given him the
authority to be there. So I am committed to helping the President get
these tools.
Without trade agreements, the United States will lose its role as
world leader in setting global trade policies and standards. That means
other nations, in no way committed to U.S. interests, will set the
world's future trading rules. They will do it, and it is going to
affect us. I can guarantee those nations are not looking out for the
best interests of our workers.
TPA will help us and our President get back into the game where we
were practically full time from 1947 to 1994. It has only been since
1994 that the President has not had this authority. This is why I am
glad we have this bill before us.
Now I wish to state why I am dismayed about the process thus far, and
that is the insistence on linking trade promotion authority, which has
strong bipartisan support as per the 18-to-3 vote out of the Senate
Finance Committee, but they want to link it to the controversial
expansion of trade adjustment assistance. I am dismayed not because
there is a linkage between trade promotion authority and trade
adjustment assistance because these two bills have often been linked in
the past; I am dismayed that trade adjustment assistance is being
brought up in a partisan way.
Ever since President Kennedy first designed the Trade Adjustment
Assistance Program in the early 1960s, the program has garnered strong
bipartisan support. That is the way it has been. That is the way it
should be this year. Unfortunately, the way in which this bill is being
brought forward falls far short of that bipartisanship.
As the ranking member of the Senate Finance Committee, which is the
committee responsible for drafting both trade promotion authority
legislation and trade adjustment assistance, perhaps I can shed some
light on how we got to where we are today.
First, Chairman Max Baucus and I worked for months crafting a
bipartisan trade promotion bill, and we did it in a very good way or it
would not have gotten a 18-to-3 vote. The end result was supported by
the White House, by Majority Leader Tom Daschle because he is a member
of the committee, by Republican Minority Leader Trent Lott because he
is also a member of the committee, and it sailed through the Finance
Committee.
In contrast to trade promotion authority, we have this other bill, S.
1209, the trade adjustment assistance bill, that I talked about. It was
not a product of the committee process or bipartisan compromise. In
fact, days before the bill was brought before the Finance Committee,
Democrats inserted a provision and legislation requiring large
Government subsidies for company-based health care coverage for the
first time in the history of trade adjustment assistance. This new and
unprecedented provision shattered what would otherwise have been strong
bipartisan support for trade adjustment assistance.
At the time, the chairman of the Finance Committee assured Members
that the health care provision was simply a place hold that would be
replaced by whatever bipartisan approach results from the debate over
providing health care to uninsured workers which was then taking place
in the economic stimulus package.
As we all know now, a bipartisan consensus could not be achieved and
ultimately the stimulus bill passed Congress without a health care
provision. Now the health care fight has moved from stimulus to trade
promotion authority. Still, no bipartisan consensus. I hope by tomorrow
morning I can say that there is such a bipartisan consensus. It is a
shame that to this point there is not. We should be able to do better.
The trade adjustment assistance bill currently before the Senate also
risks jeopardizing strong public support that trade adjustment
assistance has always had because it expands the program too far,
opening the program to possible abuse. In my view, we need to be sure
that the scope of the program--and I am talking beyond the health
provisions suggested--is limited to those people who are truly impacted
by negative aspects of international trade, we also need to be sure the
program is fiscally prudent, and we need to be sure the administration
can actually administer the program we might outline in the bill. If
the administration cannot so administer, we will only have more worker
frustration as they try to use the Trade Adjustment Assistance Program.
American workers are too important to be reckless. We need to
maintain confidence in the Trade Adjustment Assistance Program. We need
to do that through this legislation, getting this legislation just
exactly right. This may take a little longer, but it is the right thing
to do. We can provide expanded and improved trade adjustment assistance
to America's workers with strong bipartisan support. We can also devise
ways to provide temporary health insurance assistance for trade
adjustment assistance workers, even

[[Page S3618]]

though doing so would constitute a fundamental unfairness to the 39
million other Americans living without health insurance.
So all my colleagues can hear me, I know we are going to end up with
health insurance provisions in the Trade Adjustment Assistance Act. As
long as that doesn't become a pattern for what this Congress has not
responsibly done up to this point--and maybe we all share in that
problem; we have not tackled the problem of all the millions--it is
probably 39 to 40 million Americans--who do not have health insurance--
it is my view we should tackle the health provision vis-a-vis trade
adjustment assistance workers with a pool of uninsured workers in
America and not do it piecemeal. I am not going to prevail in that
point of view. Or if I prevail in that point of view, we will not have
trade promotion authority. So I am giving on it.
But I think it is wrong because it detracts, that we don't think 40
million uninsured Americans is a problem. We have to deal with that.
The President of the United States recognizes that. He has $81 billion
in his budget for programs for the 42 million uninsured Americans.
How we achieve these goals is a debate I and my Republican colleagues
are ready and willing to undertake. We are starting now with the Senate
majority leader laying down this trade adjustment assistance bill and
other items related to trade promotion authority.
The PRESIDING OFFICER (Ms. Cantwell). The Senator from South
Carolina.
Mr. HOLLINGS. Madam President, with respect to the amendment of the
distinguished Senator from North Dakota, I have an important article I
will include in the Record. However, I respond to the distinguished
Senator from Iowa, pointing out the trade adjustment assistance and the
emphasis on it. At least we now are admitting that in this proceeding
we are not going to win jobs, we are going to lose jobs. In every one
of these trade debates, that is the first thing they say: This is so
fine, it will create jobs--NAFTA was to create 200,000 jobs; we have
lost some 670,000 textile jobs alone since that time.
The appeal now for this fast track and this trade agreement is: We
will put you on welfare reform. We will let you have health costs. We
will have certain benefits.
I am looking for jobs for my people. I am not looking for welfare
reform. At least they acknowledge that. That is the big debate going on
for the past week. We were ready this morning, and they were not. After
we had lost that motion to proceed, they had won, so we were ready to
proceed. However, they had not gotten together the welfare reform
clause for lost jobs.
Having observed that, Madam President, let me refer to Senator
Dorgan's amendment with respect to an article that appeared in Business
Week, dated April 1, on page 76. It is entitled ``The Highest Court
You've Never Heard Of.'' I ask unanimous consent this article be
printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:

[From Business Week, Apr. 1, 2002]

The Highest Court You've Never Heard Of

(By Paul Magnussun)

When a Mississippi jury slapped a $500 million judgment on
Loewen Group, a Canadian funeral-home chain, in 1995 for
breaching a contract with a hometown rival, the company
quickly settled the case for $129 million but then decided to
appeal. But instead of going to a U.S. court, the Canadians
took their case to an obscure three-judge panel that stands
distinctly apart from the U.S. legal system. And that panel's
decision cannot be appealed.
Thanks to some fine print in the 1994 North American Free
Trade Agreement, the case of Loewen Group vs. the U.S. is
just one of two dozen wending their way through a little-
known and highly secretive process. The panels, using
arbitration procedures established by the World Bank, were
supposed to ensure that governments in the U.S., Mexico, and
Canada would pay compensation to any foreign investor whose
property they might seize. U.S. business groups originally
demanded the investor-protection mechanism, noting that the
Mexican government had a history of nationalizing its oil,
electricity, and banking industries, including many U.S.
assets.
But even some of NAFTA's strongest supporters say that
clever and creative lawyers in all three countries and
rapidly expanding the anti-expropriation clause in
unanticipated ways. ``The question in a lot of these pending
cases is, will the panels produce a pattern of decisions that
the negotiators never envisioned?'' says Charles E. Roh Jr.,
deputy chief U.S. negotiator for NAFTA, now a partner at
Weil, Gotshal & Manges LLC. Some of the early indications, he
says, ``are troubling.''
In one case, a NAFTA panel issued an interpretation of the
Mexican Constitution, an authority the NAFTA negotiators
hadn't intended to give the panel. In the dispute, a
California waste disposal company, Metalclad Corp., was
awarded $16.7 million by a NAFTA tribunal after the governor
of the state of San Luis Potosi and a town council refused
the company a permit to open a toxic waste site. The company
had asked for $90 million in damages, insisting that the
state and local governments had overstepped their authority.
The majority of the cases are yet to be decided, but the
NAFTA panels are controversial nonetheless. For one thing,
they are already pitting environmentalists and federal,
state, and local government regulators in all three countries
against multinationals. The basic disagreement: Business
groups want to include NAFTA's strongest investor-protection
provisions in all future free-trade agreements, while many
environmentalists would like to scrap the entire procedure as
an impediment to government regulatory action. The cases are
also complicating efforts to negotiate free-trade agreements
with Chile and the hemispheric, 34-nation Free Trade Area of
the Americas.
Washington's problem: While such panels may favor U.S.
businesses abroad, foreign plaintiffs would enjoy the same
such privileges in the U.S. And that could end up giving them
protections against regulations far beyond those domestic
companies enjoy in their own courts. What's more, states and
municipalities have also warned that their ability to govern
is being compromised by ``a new set of foreign investor
rights.''
In some cases, the NAFTA suits seek damages for government
decisions that are clearly legal but can be questioned under
vague notions of international law. For example, a Canadian
chemical company, Methanex Corp., bypassed U.S. courts to
challenge California's ban on a health-threatening gasoline
additive, MTBE, that has been polluting municipal wells and
reservoirs. In its $970 million claim, the Canadian company
said California Governor Gray Davis had been influenced in
his decision by a $150,000 campaign contribution from U.S.-
based Archer Daniels Midland Co., the maker of a rival
gasoline additive. The campaign contribution was legal, but
Methanex' lawyers argued that the Davis decision was
``palpably unfair and inequitable'' because of ADM's
influence. Such an argument wouldn't likely work in a U.S.
court.
No laws can be overturned by the panel, but the cost of
defending against a NAFTA lawsuit may run so high that it
could still deter agencies from imposing strict regulations
on foreign companies, critics charge. They point to a
decision by Canada not to restrict cigarette marketing after
Ottawa was threatened with a NAFTA case by U.S. tobacco
companies. In another potentially intimidating move, United
Parcel Service Inc. is seeking $160 million in damages from
Canada, arguing that the state-owned Canadian postal system,
Canada Post, maintains a monopoly on first-class mail and
delivers parcels with private Canadian partners.
But right now, the Loewen case is the one in the spotlight.
The Mississippi trial was so theatrical that Warner Bros.
Inc. and film director Ron Howard have acquired the movie
rights, according to attorneys in the case. Canadian funeral
chain founder Ray Loewen was vilified as a foreigner, a
``gouger of grieving families,'' an owner of a large yacht, a
racist, a customer of foreign banks, and greedy besides,
according to the transcript. Yet the State Supreme Court
refused to waive the appeal bond, which had been set at $625
million--to be posted in 10 days. (The largest previous
verdict in the state had been $18 million.) Loewen filed for
bankruptcy protection in 1999 but is hopeful that the
imminent NAFTA ruling will revive the company.
Although many of the current cases raise questions,
business groups insist that NAFTA-like panels are needed in
all trade deals because so many developing nations have poor
judicial systems. But they allow that the process may still
need some tweaking. ``Of course, if I look at the filed cases
so far, I could write a pretty scary story,'' says Scott
Miller, a Washington lobbyist for Procter & Gamble Co. And
Eric Biehl, a former top Commerce Dept. official, who
supports NAFTA, wonders, ``how does some mechanism on a trade
agreement that no one ever thought much about suddenly get
used to open up a whole new appellate process around the U.S.
judicial system?'' That's a question a lot more people may
soon be asking.

Mr. HOLLINGS. It reads: Do NAFTA judges have too much authority?
Let me read:

[[Page S3619]]

Thanks to some fine print in the 1994 North American Free
Trade Agreement, the case of Loewen Group vs. U.S. is just
one of two dozen wending their way through a little-known and
highly secretive process.

Let me read that sentence one more time. That is the reason we
opposed fast track. We will have a time agreement, 2 hours a side, or 4
hours, or debate it this afternoon. You never get the obscure addendum
and other things agreed to. They don't tell you about them.

Thanks to some fine print in the 1994 North American Free
Trade Agreement, the case of Loewen Group vs. U.S. is just
one of two dozen winding their way through a little-known
highly secretive process. The panels, using arbitration
procedures established by the World Bank, were supposed to
ensure the governments in the U.S., Mexico, and Canada would
pay compensation to any foreign investor whose property they
might seize. U.S. business groups originally demanded the
investor-protection mechanism, noting that the Mexican
government had a history of nationalizing its oil,
electricity, and banking industries, including many U.S.
assets.
But even some of NAFTA's strongest supporters say the
clever and creative lawyers in all 3 countries are rapidly
expanding the anti-expropriation clause in unanticipated
ways. ``The question in a lot of these pending cases is, will
the panels produce a pattern of decisions that the
negotiators never envisioned?'' says Charles E. Roh Jr,
deputy chief U.S. negotiator for NAFTA, now a partner at
Weil, Gotshal & Manges, LLC. Some of the early indications,
he says, ``are troubling.''

But there are some examples here. There is not only the particular
funeral home case, but:

UPS claims that the Canadian post, the state-owned postal
system, uses its monopoly on letter mail to gain unfair
advantages in parcel deliveries.

In the matter of the Canadian manufacturer, Methanex, versus the
United States:

The Canadian manufacturer of a gasoline additive sued after
California found the health-threatening chemical had
contaminated water, and banned its use.

So after the California authorities have the hearings and everything
else, they find out it is contaminative. As a result, they ban the use.
No, you take that up to the secret panel of NAFTA judges, who meet in
secret, decide in secret, and if you can get a fix--like you can get
the fix of the vote around here--what happens is the California
proceeding, totally in the open, is overturned. The legal process is
totally frustrated.
I will read one more example. Those who are interested can follow the
particular article, Metalclad v. Mexico:

U.S. company sued after it obtains permits from the Mexican
federal government for a waste disposal site. Then localities
denied a permit to operate.

They said that was taking away their particular business. You can go
on and on, but it is a two-way street. Lawyers on both sides of the
border are using this particular secretive measure.

Although many of the current cases raise questions,
business groups insist that NAFTA-like panels are needed in
all trade deals because so many developing nations have poor
judicial systems. But they allow that the process may still
need some tweaking. ``Of course, if I look at the filed cases
so far, I could write a pretty scary story,'' says Scott
Miller, a Washington lobbyist for Procter & Gamble Co. and
Eric Biehl, a former top Commerce Dept. official, wonders
``how does some mechanism on a trade agreement that no one
ever thought much about suddenly get used to open up a whole
new appellate process around the U.S. judicial system?''
That's a question a lot more people may soon be asking.

The distinguished Senator from North Dakota asked the question. That
is what this amendment does. It goes to the heart of that secretive
process, trying to get transparency. I think there should be a greater
enforcement provision in this particular amendment. Maybe we can have
the amendment itself amended.
Be that as it may, this ought to receive 100 bipartisan votes in the
Senate against the secret process of the NAFTA panels that no one ever
heard of. ``The Highest Court You've Never Heard Of,'' says Business
Week.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. SPECTER. Madam President, I ask unanimous consent the order for
the quorum call be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The remarks of Mr. Specter pertaining to the introduction of S. 2439
are located in today's Record under ``Statements on Introduced Bills
and Joint Resolutions.'')
Mr. SPECTER. Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. BIDEN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BIDEN. Madam President, I ask unanimous consent to be able to
proceed as if in morning business for up to 15 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.

____________________