Congressional Record, Volume 149 Issue 111 (Thursday, July 24, 2003)

[Congressional Record Volume 149, Number 111 (Thursday, July 24, 2003)]
[House]
[Pages H7459-H7489]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

UNITED STATES-CHILE FREE TRADE AGREEMENT IMPLEMENTATION ACT

Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 329, I call up
the bill (H.R. 2738) to implement the United States-Chile Free Trade
Agreement, and ask for its immediate consideration.
The Clerk read the title of the bill.
The text of H.R. 2738 is as follows:

HR. 2738

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``United
States-Chile Free Trade Agreement Implementation Act''.
(b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.

TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT

Sec. 101. Approval and entry into force of the agreement.
Sec. 102. Relationship of the agreement to United States and State law.
Sec. 103. Consultation and layover provisions for, and effective date
of, proclaimed actions.
Sec. 104. Implementing actions in anticipation of entry into force and
initial regulations.
Sec. 105. Administration of dispute settlement proceedings.
Sec. 106. Arbitration of claims.
Sec. 107. Effective dates; effect of termination.

TITLE II--CUSTOMS PROVISIONS

Sec. 201. Tariff modifications.
Sec. 202. Rules of origin.
Sec. 203. Drawback.
Sec. 204. Customs user fees.
Sec. 205. Disclosure of incorrect information; denial of preferential
tariff treatment; false certificates of origin.
Sec. 206. Reliquidation of entries.
Sec. 207. Recordkeeping requirements.
Sec. 208. Enforcement of textile and apparel rules of origin.
Sec. 209. Conforming amendments.
Sec. 210. Regulations.

TITLE III--RELIEF FROM IMPORTS

Sec. 301. Definitions.

Subtitle A--Relief From Imports Benefiting From the Agreement

Sec. 311. Commencing of action for relief.
Sec. 312. Commission action on petition.
Sec. 313. Provision of relief.
Sec. 314. Termination of relief authority.
Sec. 315. Compensation authority.
Sec. 316. Confidential business information.

Subtitle B--Textile and Apparel Safeguard Measures

Sec. 321. Commencement of action for relief.
Sec. 322. Determination and provision of relief.
Sec. 323. Period of relief.
Sec. 324. Articles exempt from relief.
Sec. 325. Rate after termination of import relief.
Sec. 326. Termination of relief authority.
Sec. 327. Compensation authority.
Sec. 328. Business confidential information.

TITLE IV--TEMPORARY ENTRY OF BUSINESS PERSONS

Sec. 401. Nonimmigrant traders and investors.
Sec. 402. Nonimmigrant professionals; labor attestation.
Sec. 403. Labor disputes.
Sec. 404. Conforming amendments.

SEC. 2. PURPOSES.

The purposes of this Act are--
(1) to approve and implement the Free Trade Agreement
between the United States and the Republic of Chile entered
into under the authority of section 2103(b) of the Bipartisan
Trade Promotion Authority Act of 2002;
(2) to strengthen and develop economic relations between
the United States and Chile for their mutual benefit;
(3) to establish free trade between the two nations through
the reduction and elimination of barriers to trade in goods
and services and to investment; and
(4) to lay the foundation for further cooperation to expand
and enhance the benefits of such Agreement.

[[Page H7460]]

SEC. 3. DEFINITIONS.

In this Act:
(1) Agreement.--The term ``Agreement'' means the United
States-Chile Free Trade Agreement approved by the Congress
under section 101(a)(1).
(2) HTS.--The term ``HTS'' means the Harmonized Tariff
Schedule of the United States.
(3) Textile or apparel good.--The term ``textile or apparel
good'' means a good listed in the Annex to the Agreement on
Textiles and Clothing referred to in section 101(d)(4) of the
Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).

TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT

SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE AGREEMENT.

(a) Approval of Agreement and Statement of Administrative
Action.--Pursuant to section 2105 of the Bipartisan Trade
Promotion Authority Act of 2002 (19 U.S.C. 3805) and section
151 of the Trade Act of 1974 (19 U.S.C. 2191), the Congress
approves--
(1) the United States-Chile Free Trade Agreement entered
into on June 6, 2003, with the Government of Chile and
submitted to the Congress on July 15, 2003; and
(2) the statement of administrative action proposed to
implement the Agreement that was submitted to the Congress on
July 15, 2003.
(b) Conditions for Entry Into Force of the Agreement.--At
such time as the President determines that Chile has taken
measures necessary to bring it into compliance with the
provisions of the Agreement that take effect on the date on
which the Agreement enters into force, the President is
authorized to exchange notes with the Government of Chile
providing for the entry into force, on or after January 1,
2004, of the Agreement for the United States.

SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND
STATE LAW.

(a) Relationship to United States Law.--
(1) United states law to prevail in conflict.--No provision
of the Agreement, nor the application of any such provision
to any person or circumstance, which is inconsistent with any
law of the United States shall have effect.
(2) Construction.--Nothing in this Act shall be construed--
(A) to amend or modify any law of the United States, or
(B) to limit any authority conferred under any law of the
United States,

unless specifically provided for in this Act.
(b) Relationship of Agreement to State Law.--
(1) Legal challenge.--No State law, or the application
thereof, may be declared invalid as to any person or
circumstance on the ground that the provision or application
is inconsistent with the Agreement, except in an action
brought by the United States for the purpose of declaring
such law or application invalid.
(2) Definition of state law.--For purposes of this
subsection, the term ``State law'' includes--
(A) any law of a political subdivision of a State; and
(B) any State law regulating or taxing the business of
insurance.
(c) Effect of Agreement With Respect to Private Remedies.--
No person other than the United States--
(1) shall have any cause of action or defense under the
Agreement or by virtue of Congressional approval thereof; or
(2) may challenge, in any action brought under any
provision of law, any action or inaction by any department,
agency, or other instrumentality of the United States, any
State, or any political subdivision of a State on the ground
that such action or inaction is inconsistent with the
Agreement.

SEC. 103. CONSULTATION AND LAYOVER PROVISIONS FOR, AND
EFFECTIVE DATE OF, PROCLAIMED ACTIONS.

(a) Consultation and Layover Requirements.--If a provision
of this Act provides that the implementation of an action by
the President by proclamation is subject to the consultation
and layover requirements of this section, such action may be
proclaimed only if--
(1) the President has obtained advice regarding the
proposed action from--
(A) the appropriate advisory committees established under
section 135 of the Trade Act of 1974 (19 U.S.C. 2155); and
(B) the United States International Trade Commission;
(2) 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--
(A) the action proposed to be proclaimed and the reasons
therefor; and
(B) the advice obtained under paragraph (1);
(3) a period of 60 calendar days, beginning on the first
day on which the requirements set forth in paragraphs (1) and
(2) have been met has expired; and
(4) the President has consulted with such Committees
regarding the proposed action during the period referred to
in paragraph (3).
(b) Effective Date of Certain Proclaimed Actions.--Any
action proclaimed by the President under the authority of
this Act that is not subject to the consultation and layover
provisions under subsection (a) may not take effect before
the 15th day after the date on which the text of the
proclamation is published in the Federal Register.

SEC. 104. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO
FORCE AND INITIAL REGULATIONS.

(a) Implementing Actions.--
(1) Proclamation authority.--After the date of enactment of
this Act--
(A) the President may proclaim such actions, and
(B) other appropriate officers of the United States
Government may issue such regulations,

as may be necessary to ensure that any provision of this Act,
or amendment made by this Act, that takes effect on the date
the Agreement enters into force is appropriately implemented
on such date, but no such proclamation or regulation may
have an effective date earlier than the date of entry into
force.
(2) Waiver of 15-day restriction.--The 15-day restriction
contained in section 103(b) on the taking effect of
proclaimed actions is waived to the extent that the
application of such restriction would prevent the taking
effect on the date the Agreement enters into force of any
action proclaimed under this section.
(b) Initial Regulations.--Initial regulations necessary or
appropriate to carry out the actions required by or
authorized under this Act or proposed in the statement of
administrative action referred to in section 101(a)(2) to
implement the Agreement shall, to the maximum extent
feasible, be issued within 1 year after the date of entry
into force of the Agreement. In the case of any implementing
action that takes effect on a date after the date of entry
into force of the Agreement, initial regulations to carry out
that action shall, to the maximum extent feasible, be issued
within 1 year after such effective date.

SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS.

(a) Establishment or Designation of Office.--The President
is authorized to establish or designate within the Department
of Commerce an office that shall be responsible for providing
administrative assistance to panels established under chapter
22 of the Agreement. The office may not be considered to be
an agency for purposes of section 552 of title 5, United
States Code.
(b) Authorization of Appropriations.--There are authorized
to be appropriated for each fiscal year after fiscal year
2003 to the Department of Commerce such sums as may be
necessary for the establishment and operations of the office
under subsection (a) and for the payment of the United States
share of the expenses of panels established under chapter 22
of the Agreement.

SEC. 106. ARBITRATION OF CLAIMS.

(a) Submission of Certain Claims.--The United States is
authorized to resolve any claim against the United States
covered by article 10.15(1)(a)(i)(C) or 10.15(1)(b)(i)(C) of
the Agreement, pursuant to the Investor-State Dispute
Settlement procedures set forth in section B of chapter 10 of
the Agreement.
(b) Contract Clauses.--All contracts executed by any agency
of the United States on or after the date of entry into force
of the Agreement shall contain a clause specifying the law
that will apply to resolve any breach of contract claim.

SEC. 107. EFFECTIVE DATES; EFFECT OF TERMINATION.

(a) Effective Dates.--Except as provided in subsection (b),
the provisions of this Act and the amendments made by this
Act take effect on the date the Agreement enters into force.
(b) Exceptions.--Sections 1 through 3 and this title take
effect on the date of the enactment of this Act.
(c) Termination of the Agreement.--On the date on which the
Agreement ceases to be in force, the provisions of this Act
(other than this subsection) and the amendments made by this
Act shall cease to be effective.

TITLE II--CUSTOMS PROVISIONS

SEC. 201. TARIFF MODIFICATIONS.

(a) Tariff Modifications Provided for in the Agreement.--
(1) Proclamation authority.--The President may proclaim--
(A) such modifications or continuation of any duty,
(B) such continuation of duty-free or excise treatment, or
(C) such additional duties,

as the President determines to be necessary or appropriate to
carry out or apply articles 3.3, 3.7, 3.9, article 3.20 (8),
(9), (10), and (11), and Annex 3.3 of the Agreement.
(2) Effect on chilean gsp status.--Notwithstanding section
502(a)(1) of the Trade Act of 1974 (19 U.S.C. 2462(a)(1)),
the President shall terminate the designation of Chile as a
beneficiary developing country for purposes of title V of the
Trade Act of 1974 on the date of entry into force of the
Agreement.
(b) Other Tariff Modifications.--Subject to the
consultation and layover provisions of section 103(a), the
President may proclaim--
(1) such modifications or continuation of any duty,
(2) such modifications as the United States may agree to
with Chile regarding the staging of any duty treatment set
forth in Annex 3.3 of the Agreement,
(3) such continuation of duty-free or excise treatment, or
(4) such additional duties,

as the President determines to be necessary or appropriate to
maintain the general level

[[Page H7461]]

of reciprocal and mutually advantageous concessions with
respect to Chile provided for by the Agreement.
(c) Additional Tariffs on Agricultural Safeguard Goods.--
(1) In general.--In addition to any duty proclaimed under
subsection (a) or (b), and subject to paragraphs (3) through
(5), the Secretary of the Treasury shall assess a duty, in
the amount prescribed under paragraph (2), on an agricultural
safeguard good if the Secretary of the Treasury determines
that the unit import price of the good when it enters the
United States, determined on an F.O.B. basis, is less than
the trigger price indicated for that good in Annex 3.18 of
the Agreement or any amendment thereto.
(2) Calculation of additional duty.--The amount of the
additional duty assessed under this subsection shall be
determined as follows:
(A) If the difference between the unit import price and the
trigger price is less than, or equal to, 10 percent of the
trigger price, no additional duty shall be imposed.
(B) If the difference between the unit import price and the
trigger price is greater than 10 percent, but less than or
equal to 40 percent, of the trigger price, the additional
duty shall be equal to 30 percent of the difference between
the preferential tariff rate and the column 1 general rate of
duty imposed under the HTS on like articles at the time the
additional duty is imposed.
(C) If the difference between the unit import price and the
trigger price is greater than 40 percent, but less than or
equal to 60 percent, of the trigger price, the additional
duty shall be equal to 50 percent of the difference between
the preferential tariff rate and the column 1 general rate of
duty imposed under the HTS on like articles at the time the
additional duty is imposed.
(D) If the difference between the unit import price and the
trigger price is greater than 60 percent, but less than or
equal to 75 percent, of the trigger price, the additional
duty shall be equal to 70 percent of the difference between
the preferential tariff rate and the column 1 general rate of
duty imposed under the HTS on like articles at the time the
additional duty is imposed.
(E) If the difference between the unit import price and the
trigger price is greater than 75 percent of the trigger
price, the additional duty shall be equal to 100 percent of
the difference between the preferential tariff rate and the
column 1 general rate of duty imposed under the HTS on like
articles at the time the additional duty is imposed.
(3) Exceptions.--No additional duty under this subsection
shall be assessed on an agricultural safeguard good if, at
the time of entry, the good is subject to import relief
under--
(A) subtitle A of title III of this Act; or
(B) chapter 1 of title II of the Trade Act of 1974 (19
U.S.C. 2251 et seq.).
(4) Termination.--This subsection shall cease to apply on
the date that is 12 years after the date on which the
Agreement enters into force.
(5) Tariff-rate quotas.--If an agricultural safeguard good
is subject to a tariff-rate quota, and the in-quota duty rate
for the good proclaimed pursuant to subsection (a) or (b) is
zero, any additional duty assessed under this subsection
shall be applied only to over-quota imports of the good.
(6) Notice.--Not later than 60 days after the Secretary of
the Treasury first assesses additional duties on an
agricultural safeguard good under this subsection, the
Secretary shall notify the Government of Chile in writing of
such action and shall provide to the Government of Chile data
supporting the assessment of additional duties.
(7) Modification of trigger prices.--Not later than 60
calendar days before agreeing with the Government of Chile
pursuant to article 3.18(2)(b) of the Agreement on a
modification to a trigger price for a good listed in Annex
3.18 of the Agreement, the President shall notify the
Committees on Ways and Means and Agriculture of the House of
Representatives and the Committees on Finance and Agriculture
of the Senate of the proposed modification and the reasons
therefor.
(8) Definitions.--In this subsection:
(A) Agricultural safeguard good.--The term ``agricultural
safeguard good'' means a good--
(i) that qualifies as an originating good under section
202;
(ii) that is included in the United States Agricultural
Safeguard Product List set forth in Annex 3.18 of the
Agreement; and
(iii) for which a claim for preferential tariff treatment
under the Agreement has been made.
(B) F.O.B.--The term ``F.O.B.'' means free on board,
regardless of the mode of transportation, at the point of
direct shipment by the seller to the buyer.
(C) Unit import price.--The term ``unit import price''
means the price expressed in dollars per kilogram.
(d) Conversion to Ad Valorem Rates.--For purposes of
subsections (a) and (b), with respect to any good for which
the base rate in the Schedule of the United States to Annex
3.3 of the Agreement is a specific or compound rate of duty,
the President may substitute for the base rate an ad valorem
rate that the President determines to be equivalent to the
base rate.

SEC. 202. RULES OF ORIGIN.

(a) Originating Goods.--
(1) In general.--For purposes of this Act and for purposes
of implementing the tariff treatment provided for under the
Agreement, except as otherwise provided in this section, a
good is an originating good if--
(A) the good is wholly obtained or produced entirely in the
territory of Chile, the United States, or both;
(B) the good--
(i) is produced entirely in the territory of Chile, the
United States, or both, and

(I) each of the nonoriginating materials used in the
production of the good undergoes an applicable change in
tariff classification specified in Annex 4.1 of the
Agreement, or
(II) the good otherwise satisfies any applicable regional
value-content or other requirements specified in Annex 4.1 of
the Agreement; and

(ii) satisfies all other applicable requirements of this
section; or
(C) the good is produced entirely in the territory of
Chile, the United States, or both, exclusively from materials
described in subparagraph (A) or (B).
(2) Simple combination or mere dilution.--A good shall not
be considered to be an originating good and a material shall
not be considered to be an originating material by virtue of
having undergone--
(A) simple combining or packaging operations; or
(B) mere dilution with water or another substance that does
not materially alter the characteristics of the good or
material.
(b) De Minimis Amounts of Nonoriginating Materials.--
(1) In general.--Except as provided in paragraphs (2) and
(3), a good that does not undergo a change in tariff
classification pursuant to Annex 4.1 of the Agreement is an
originating good if--
(A) the value of all nonoriginating materials that are used
in the production of the good and do not undergo the
applicable change in tariff classification does not exceed 10
percent of the adjusted value of the good;
(B) the value of such nonoriginating materials is included
in the value of nonoriginating materials for any applicable
regional value-content requirement; and
(C) the good meets all other applicable requirements of
this section.
(2) Exceptions.--Paragraph (1) does not apply to the
following:
(A) A nonoriginating material provided for in chapter 4 of
the HTS, or a nonoriginating dairy preparation containing
over 10 percent by weight of milk solids provided for in
subheading 1901.90 or 2106.90 of the HTS, that is used in the
production of a good provided for in chapter 4 of the HTS.
(B) A nonoriginating material provided for in chapter 4 of
the HTS, or nonoriginating dairy preparations containing over
10 percent by weight of milk solids provided for in
subheading 1901.90 of the HTS, that are used in the
production of the following goods:
(i) Infant preparations containing over 10 percent in
weight of milk solids provided for in subheading 1901.10 of
the HTS.
(ii) Mixes and doughs, containing over 25 percent by weight
of butterfat, not put up for retail sale, provided for in
subheading 1901.20 of the HTS.
(iii) Dairy preparations containing over 10 percent by
weight of milk solids provided for in subheading 1901.90 or
2106.90 of the HTS.
(iv) Goods provided for in heading 2105 of the HTS.
(v) Beverages containing milk provided for in subheading
2202.90 of the HTS.
(vi) Animal feeds containing over 10 percent by weight of
milk solids provided for in subheading 2309.90 of the HTS.
(C) A nonoriginating material provided for in heading 0805
of the HTS, or any of subheadings 2009.11.00 through 2009.39
of the HTS, that is used in the production of a good provided
for in any of subheadings 2009.11.00 through 2009.39 of the
HTS, or in fruit or vegetable juice of any single fruit or
vegetable, fortified with minerals or vitamins, concentrated
or unconcentrated, provided for in subheading 2106.90 or
2202.90 of the HTS.
(D) A nonoriginating material provided for in chapter 15 of
the HTS that is used in the production of a good provided for
in any of headings 1501.00.00 through 1508, 1512, 1514, and
1515 of the HTS.
(E) A nonoriginating material provided for in heading 1701
of the HTS that is used in the production of a good provided
for in any of headings 1701 through 1703 of the HTS.
(F) A nonoriginating material provided for in chapter 17 of
the HTS or in heading 1805.00.00 of the HTS that is used in
the production of a good provided for in subheading 1806.10
of the HTS.
(G) A nonoriginating material provided for in any of
headings 2203 through 2208 of the HTS that is used in the
production of a good provided for in heading 2207 or 2208 of
the HTS.
(H) A nonoriginating material used in the production of a
good provided for in any of chapters 1 through 21 of the HTS,
unless the nonoriginating material is provided for in a
different subheading than the good for which origin is being
determined under this section.
(3) Goods provided for in chapters 50 through 63 of the
hts.--
(A) In general.--Except as provided in subparagraph (B), a
good provided for in any of chapters 50 through 63 of the HTS
that is not an originating good because certain fibers or
yarns used in the production of the component of the good
that determines the tariff classification of the good do not
undergo an applicable change in tariff classification set out
in Annex 4.1 of the Agreement, shall be considered to be an
originating good

[[Page H7462]]

if the total weight of all such fibers or yarns in that
component is not more than 7 percent of the total weight of
that component.
(B) Certain textile or apparel goods.--A textile or apparel
good containing elastomeric yarns in the component of the
good that determines the tariff classification of the good
shall be considered to be an originating good only if such
yarns are wholly formed in the territory of Chile or the
United States.
(c) Accumulation.--
(1) Originating goods incorporated in goods of other
country.--Originating goods or materials of Chile or the
United States that are incorporated into a good in the
territory of the other country shall be considered to
originate in the territory of the other country.
(2) Multiple procedures.--A good that is produced in the
territory of Chile, the United States, or both, by 1 or more
producers, is an originating good if the good satisfies the
requirements of subsection (a) and all other applicable
requirements of this section.
(d) Regional Value-Content.--
(1) In general.--For purposes of subsection (a)(2), the
regional value-content of a good referred to in Annex 4.1 of
the Agreement shall be calculated, at the choice of the
person claiming preferential tariff treatment for the good,
on the basis of the build-down method described in paragraph
(2) or the build-up method described in paragraph (3), unless
otherwise provided in Annex 4.1 of the Agreement.
(2) Build-down method.--
(A) In general.--The regional value-content of a good may
be calculated on the basis of the following build-down
method:

AV - VNM
RVC = ----------------------------- 100
AV
------------------------------------------------------------------------

VOM
RVC = ----------------------------- 100
AV
------------------------------------------------------------------------

(B) Definitions.--For purposes of subparagraph (A):
(i) The term ``RVC'' means the regional value-content,
expressed as a percentage.
(ii) The term ``AV'' means the adjusted value.
(iii) The term ``VOM'' means the value of originating
materials used by the producer in the production of the good.
(e) Value of Materials.--
(1) In general.--For purposes of calculating the regional
value-content of a good under subsection (d), and for
purposes of applying the de minimis rules under subsection
(b), the value of a material is--
(A) in the case of a material that is imported by the
producer of the good, the adjusted value of the material with
respect to that importation;
(B) in the case of a material acquired in the territory in
which the good is produced, except for a material to which
subparagraph (C) applies, the producer's price actually paid
or payable for the material;
(C) in the case of a material provided to the producer
without charge, or at a price reflecting a discount or
similar reduction, the sum of--
(i) all expenses incurred in the growth, production, or
manufacture of the material, including general expenses; and
(ii) an amount for profit; or
(D) in the case of a material that is self-produced, the
sum of--
(i) all expenses incurred in the production of the
material, including general expenses; and
(ii) an amount for profit.
(2) Further adjustments to the value of materials.--
(A) Originating materials.--The following expenses, if not
included in the value of an originating material calculated
under paragraph (1), may be added to the value of the
originating material:
(i) The costs of freight, insurance, packing, and all other
costs incurred in transporting the material to the location
of the producer.
(ii) Duties, taxes, and customs brokerage fees on the
material paid in the territory of Chile, the United States,
or both, other than duties and taxes that are waived,
refunded, refundable, or otherwise recoverable, including
credit against duty or tax paid or payable.
(iii) The cost of waste and spoilage resulting from the use
of the material in the production of the good, less the value
of renewable scrap or byproduct.
(B) Nonoriginating materials.--The following expenses, if
included in the value of a nonoriginating material calculated
under paragraph (1), may be deducted from the value of the
nonoriginating material:
(i) The costs of freight, insurance, packing, and all other
costs incurred in transporting the material to the location
of the producer.
(ii) Duties, taxes, and customs brokerage fees on the
material paid in the territory of Chile, the United States,
or both, other than duties and taxes that are waived,
refunded, refundable, or otherwise recoverable, including
credit against duty or tax paid or payable.
(iii) The cost of waste and spoilage resulting from the use
of the material in the production of the good, less the value
of renewable scrap or byproducts.
(iv) The cost of originating materials used in the
production of the nonoriginating material in the territory of
Chile or the United States.
(f) Accessories, Spare Parts, or Tools.--Accessories, spare
parts, or tools delivered with a good that form part of the
good's standard accessories, spare parts, or tools shall be
regarded as a material used in the production of the good,
if--
(1) the accessories, spare parts, or tools are classified
with and not invoiced separately from the good; and
(2) the quantities and value of the accessories, spare
parts, or tools are customary for the good.
(g) Fungible Goods and Materials.--
(1) In general.--
(A) Claim for preferential treatment.--A person claiming
preferential tariff treatment for a good may claim that a
fungible good or material is originating either based on the
physical segregation of each fungible good or material or by
using an inventory management method.
(B) Inventory management method.--In this subsection, the
term ``inventory management method'' means--
(i) averaging;
(ii) ``last-in, first-out'';
(iii) ``first-in, first-out''; or
(iv) any other method--

(I) recognized in the generally accepted accounting
principles of the country in which the production is
performed (whether Chile or the United States); or
(II) otherwise accepted by that country.

(2) Election of inventory method.--A person selecting an
inventory management method under paragraph (1) for
particular fungible goods or materials shall continue to use
that method for those goods or materials throughout the
fiscal year of that person.
(h) Packaging Materials and Containers for Retail Sale.--
Packaging materials and containers in which a good is
packaged for retail sale, if classified with the good, shall
be disregarded in determining whether all nonoriginating
materials used in the production of the good undergo the
applicable change in tariff classification set out in Annex
4.1 of the Agreement, and, if the good is subject to a
regional value-content requirement, the value of such
packaging materials and containers shall be taken into
account as originating or nonoriginating materials, as the
case may be, in calculating the regional value-content of
the good.
(i) Packing Materials and Containers for Shipment.--Packing
materials and containers for shipment shall be disregarded in
determining whether--
(1) the nonoriginating materials used in the production of
the good undergo an applicable change in tariff
classification set out in Annex 4.1 of the Agreement; and
(2) the good satisfies a regional value-content
requirement.
(j) Indirect Materials.--An indirect material shall be
considered to be an originating material without regard to
where it is produced.
(k) Transit and Transshipment.--A good that has undergone
production necessary to qualify as an originating good under
subsection (a) shall not be considered to be an originating
good if, subsequent to that production, the good undergoes
further production or any other operation outside the
territory of Chile or the United States, other than
unloading, reloading, or any other process necessary to
preserve the good in good condition or to transport the good
to the territory of Chile or the United States.
(l) Textile and Apparel Goods Classifiable as Goods Put Up
in Sets.--Notwithstanding the rules set forth in Annex 4.1 of
the Agreement, textile and apparel goods classifiable as
goods put up in sets for retail sale as provided for in
General Rule of Interpretation 3 of the Harmonized System
shall not be considered to be originating goods unless each
of the goods in the set is an originating good or the total
value of the nonoriginating goods in the set does not exceed
10 percent of the value of the set determined for purposes of
assessing customs duties.
(m) Application and Interpretation.--In this section:
(1) The basis for any tariff classification is the HTS.
(2) Any cost or value referred to in this section shall be
recorded and maintained in accordance with the generally
accepted accounting principles applicable in the territory of
the country in which the good is produced (whether Chile or
the United States).
(n) Definitions.--In this section:
(1) Adjusted value.--The term ``adjusted value'' means the
value determined in accordance with articles 1 through 8,
article 15, and the corresponding interpretive notes of the
Agreement on Implementation of Article VII of the General
Agreement on Tariffs and Trade 1994 referred to in section
101(d)(8) of the Uruguay Round Agreements Act, except that
such value may be adjusted to exclude any costs, charges, or
expenses incurred for transportation, insurance, and related
services incident to the international shipment of the
merchandise from the country of exportation to the place of
importation.
(2) Fungible goods or fungible materials.--The terms
``fungible goods'' and

[[Page H7463]]

``fungible materials'' mean goods or materials, as the case
may be, that are interchangeable for commercial purposes and
the properties of which are essentially identical.
(3) Generally accepted accounting principles.--The term
``generally accepted accounting principles'' means the
principles, rules, and procedures, including both broad and
specific guidelines, that define the accounting practices
accepted in the territory of Chile or the United States, as
the case may be.
(4) Goods wholly obtained or produced entirely in the
territory of chile, the united states, or both.--The term
``goods wholly obtained or produced entirely in the territory
of Chile, the United States, or both'' means--
(A) mineral goods extracted in the territory of Chile, the
United States, or both;
(B) vegetable goods, as such goods are defined in the
Harmonized System, harvested in the territory of Chile, the
United States, or both;
(C) live animals born and raised in the territory of Chile,
the United States, or both;
(D) goods obtained from hunting, trapping, or fishing in
the territory of Chile, the United States, or both;
(E) goods (fish, shellfish, and other marine life) taken
from the sea by vessels registered or recorded with Chile or
the United States and flying the flag of that country;
(F) goods produced on board factory ships from the goods
referred to in subparagraph (E), if such factory ships are
registered or recorded with Chile or the United States and
fly the flag of that country;
(G) goods taken by Chile or the United States or a person
of Chile or the United States from the seabed or beneath the
seabed outside territorial waters, if Chile or the United
States has rights to exploit such seabed;
(H) goods taken from outer space, if the goods are obtained
by Chile or the United States or a person of Chile or the
United States and not processed in the territory of a country
other than Chile or the United States;
(I) waste and scrap derived from--
(i) production in the territory of Chile, the United
States, or both; or
(ii) used goods collected in the territory of Chile, the
United States, or both, if such goods are fit only for the
recovery of raw materials;
(J) recovered goods derived in the territory of Chile or
the United States from used goods, and used in the territory
of that country in the production of remanufactured goods;
and
(K) goods produced in the territory of Chile, the United
States, or both, exclusively--
(i) from goods referred to in any of subparagraphs (A)
through (I), or
(ii) from the derivatives of goods referred to in clause
(i),

at any stage of production.
(5) Harmonized system.--The term ``Harmonized System''
means the Harmonized Commodity Description and Coding System.
(6) Indirect material.--The term ``indirect material''
means a good used in the production, testing, or inspection
of a good but not physically incorporated into the good, or a
good used in the maintenance of buildings or the operation of
equipment associated with the production of a good,
including--
(A) fuel and energy;
(B) tools, dies, and molds;
(C) spare parts and materials used in the maintenance of
equipment or buildings;
(D) lubricants, greases, compounding materials, and other
materials used in production or used to operate equipment or
buildings;
(E) gloves, glasses, footwear, clothing, safety equipment,
and supplies;
(F) equipment, devices, and supplies used for testing or
inspecting the good;
(G) catalysts and solvents; and
(H) any other goods that are not incorporated into the good
but the use of which in the production of the good can
reasonably be demonstrated to be a part of that production.
(7) Material.--The term ``material'' means a good that is
used in the production of another good, including a part,
ingredient, or indirect material.
(8) Material that is self-produced.--The term ``material
that is self-produced'' means a material that is an
originating good produced by a producer of a good and used in
the production of that good.
(9) Nonoriginating good or nonoriginating material.--The
terms ``nonoriginating good'' and ``nonoriginating material''
mean a good or material, as the case may be, that does not
qualify as an originating good under this section.
(10) Packing materials and containers for shipment.--The
term ``packing materials and containers for shipment'' means
the goods used to protect a good during its transportation,
and does not include the packaging materials and containers
in which a good is packaged for retail sale.
(11) Preferential tariff treatment.--The term
``preferential tariff treatment'' means the customs duty rate
that is applicable to an originating good pursuant to chapter
3 of the Agreement.
(12) Producer.--The term ``producer'' means a person who
engages in the production of a good in the territory of Chile
or the United States.
(13) Production.--The term ``production'' means growing,
mining, harvesting, fishing, raising, trapping, hunting,
manufacturing, processing, assembling, or disassembling a
good.
(14) Recovered goods.--
(A) In general.--The term ``recovered goods'' means
materials in the form of individual parts that are the result
of--
(i) the complete disassembly of used goods into individual
parts; and
(ii) the cleaning, inspecting, testing, or other processing
of those parts as necessary for improvement to sound working
condition by one or more of the processes described in
subparagraph (B), in order for such parts to be assembled
with other parts, including other parts that have undergone
the processes described in this paragraph, in the production
of a remanufactured good.
(B) Processes.--The processes referred to in subparagraph
(A)(ii) are welding, flame spraying, surface machining,
knurling, plating, sleeving, and rewinding.
(15) Remanufactured good.--The term ``remanufactured good''
means an industrial good assembled in the territory of Chile
or the United States, that is listed in Annex 4.18 of the
Agreement, and--
(A) is entirely or partially comprised of recovered goods;
(B) has the same life expectancy and meets the same
performance standards as a new good; and
(C) enjoys the same factory warranty as such a new good.
(o) Presidential Proclamation Authority.--
(1) In general.--The President is authorized to proclaim,
as part of the HTS--
(A) the provisions set out in Annex 4.1 of the Agreement;
and
(B) any additional subordinate category necessary to carry
out this title consistent with the Agreement.
(2) Modifications.--
(A) In general.--Subject to the consultation and layover
provisions of section 103(a), the President may proclaim
modifications to the provisions proclaimed under the
authority of paragraph (1)(A), other than provisions of
chapters 50 through 63 of the HTS, as included in Annex 4.1
of the Agreement.
(B) Additional proclamations.--Notwithstanding subparagraph
(A), and subject to the consultation and layover provisions
of section 103(a), the President may proclaim--
(i) modifications to the provisions proclaimed under the
authority of paragraph (1)(A) that are necessary to implement
an agreement with Chile pursuant to article 3.20(5) of the
Agreement; and
(ii) before the 1st anniversary of the date of the
enactment of this Act, modifications to correct any
typographical, clerical, or other nonsubstantive technical
error regarding the provisions of chapters 50 through 63 of
the HTS, as included in Annex 4.1 of the Agreement.

SEC. 203. DRAWBACK.

(a) Definition of a Good Subject to Chile FTA Drawback.--
For purposes of this Act and the amendments made by
subsection (b), the term ``good subject to Chile FTA
drawback'' means any imported good other than the
following:
(1) A good entered under bond for transportation and
exportation to Chile.
(2)(A) A good exported to Chile in the same condition as
when imported into the United States.
(B) For purposes of subparagraph (A)--
(i) processes such as testing, cleaning, repacking,
inspecting, sorting, or marking a good, or preserving it in
its same condition, shall not be considered to change the
condition of the good; and
(ii) if a good described in subparagraph (A) is commingled
with fungible goods and exported in the same condition, the
origin of the good for the purposes of subsection (j)(1) of
section 313 of the Tariff Act of 1930 (19 U.S.C. 1313(j)(1))
may be determined on the basis of the inventory methods
provided for in the regulations implementing this title.
(3) A good--
(A) that is--
(i) deemed to be exported from the United States;
(ii) used as a material in the production of another good
that is deemed to be exported to Chile; or
(iii) substituted for by a good of the same kind and
quality that is used as a material in the production of
another good that is deemed to be exported to Chile; and
(B) that is delivered--
(i) to a duty-free shop;
(ii) for ship's stores or supplies for a ship or aircraft;
or
(iii) for use in a project undertaken jointly by the United
States and Chile and destined to become the property of the
United States.
(4) A good exported to Chile for which a refund of customs
duties is granted by reason of--
(A) the failure of the good to conform to sample or
specification; or
(B) the shipment of the good without the consent of the
consignee.
(5) A good that qualifies under the rules of origin set out
in section 202 that is--
(A) exported to Chile;
(B) used as a material in the production of another good
that is exported to Chile; or
(C) substituted for by a good of the same kind and quality
that is used as a material in the production of another good
that is exported to Chile.
(b) Consequential Amendments.--
(1) Bonded manufacturing warehouses.--Section 311 of the
Tariff Act of 1930 (19 U.S.C. 1311) is amended by adding at
the end the following new paragraph:

[[Page H7464]]

``No article manufactured in a bonded warehouse from
materials that are goods subject to Chile FTA drawback, as
defined in section 203(a) of the United States-Chile Free
Trade Agreement Implementation Act, may be withdrawn from
warehouse for exportation to Chile without assessment of a
duty on the materials in their condition and quantity, and at
their weight, at the time of importation into the United
States. The duty shall be paid before the 61st day after the
date of exportation, except that the duty may be waived or
reduced by--
``(1) 100 percent during the 8-year period beginning on
January 1, 2004;
``(2) 75 percent during the 1-year period beginning on
January 1, 2012;
``(3) 50 percent during the 1-year period beginning on
January 1, 2013; and
``(4) 25 percent during the 1-year period beginning on
January 1, 2014.''.
(2) Bonded smelting and refining warehouses.--Section 312
of the Tariff Act of 1930 (19 U.S.C. 1312) is amended--
(A) in paragraph (1) of subsection (b), by striking
``except that'' and all that follows through subparagraph (B)
and inserting the following: ``except that--
``(A) in the case of a withdrawal for exportation of such a
product to a NAFTA country, as defined in section 2(4) of the
North American Free Trade Agreement Implementation Act, if
any of the imported metal-bearing materials are goods subject
to NAFTA drawback, as defined in section 203(a) of that Act,
the duties on the materials shall be paid, and the charges
against the bond canceled, before the 61st day after the date
of exportation; but upon the presentation, before such 61st
day, of satisfactory evidence of the amount of any customs
duties paid to the NAFTA country on the product, the duties
on the materials may be waived or reduced (subject to section
508(b)(2)(B)) in an amount that does not exceed the lesser
of--
``(i) the total amount of customs duties owed on the
materials on importation into the United States, or
``(ii) the total amount of customs duties paid to the NAFTA
country on the product, and
``(B) in the case of a withdrawal for exportation of such a
product to Chile, if any of the imported metal-bearing
materials are goods subject to Chile FTA drawback, as defined
in section 203(a) of the United States-Chile Free Trade
Agreement Implementation Act, the duties on the materials
shall be paid, and the charges against the bond canceled,
before the 61st day after the date of exportation, except
that the duties may be waived or reduced by--
``(i) 100 percent during the 8-year period beginning on
January 1, 2004,
``(ii) 75 percent during the 1-year period beginning on
January 1, 2012,
``(iii) 50 percent during the 1-year period beginning on
January 1, 2013, and
``(iv) 25 percent during the 1-year period beginning on
January 1, 2014, or'';
(B) in paragraph (4) of subsection (b), by striking
``except that'' and all that follows through subparagraph (B)
and inserting the following: ``except that--
``(A) in the case of a withdrawal for exportation of such a
product to a NAFTA country, as defined in section 2(4) of the
North American Free Trade Agreement Implementation Act, if
any of the imported metal-bearing materials are goods subject
to NAFTA drawback, as defined in section 203(a) of that Act,
the duties on the materials shall be paid, and the charges
against the bond canceled, before the 61st day after the date
of exportation; but upon the presentation, before such 61st
day, of satisfactory evidence of the amount of any customs
duties paid to the NAFTA country on the product, the duties
on the materials may be waived or reduced (subject to section
508(b)(2)(B)) in an amount that does not exceed the lesser
of--
``(i) the total amount of customs duties owed on the
materials on importation into the United States, or
``(ii) the total amount of customs duties paid to the NAFTA
country on the product, and
``(B) in the case of a withdrawal for exportation of such a
product to Chile, if any of the imported metal-bearing
materials are goods subject to Chile FTA drawback, as defined
in section 203(a) of the United States-Chile Free Trade
Agreement Implementation Act, the duties on the materials
shall be paid, and the charges against the bond canceled,
before the 61st day after the date of exportation, except
that the duties may be waived or reduced by--
``(i) 100 percent during the 8-year period beginning on
January 1, 2004,
``(ii) 75 percent during the 1-year period beginning on
January 1, 2012,
``(iii) 50 percent during the 1-year period beginning on
January 1, 2013, and
``(iv) 25 percent during the 1-year period beginning on
January 1, 2014, or''; and
(C) in subsection (d), in the matter preceding paragraph
(1), by striking ``except that'' and all that follows through
the end of paragraph (2) and inserting the following:
``except that--
``(1) in the case of a withdrawal for exportation to a
NAFTA country, as defined in section 2(4) of the North
American Free Trade Agreement Implementation Act, if any of
the imported metal-bearing materials are goods subject to
NAFTA drawback, as defined in section 203(a) of that Act,
charges against the bond shall be paid before the 61st day
after the date of exportation; but upon the presentation,
before such 61st day, of satisfactory evidence of the amount
of any customs duties paid to the NAFTA country on the
product, the bond shall be credited (subject to section
508(b)(2)(B)) in an amount not to exceed the lesser of--
``(A) the total amount of customs duties paid or owed on
the materials on importation into the United States, or
``(B) the total amount of customs duties paid to the NAFTA
country on the product; and
``(2) in the case of a withdrawal for exportation to Chile,
if any of the imported metal-bearing materials are goods
subject to Chile FTA drawback, as defined in section 203(a)
of the United States-Chile Free Trade Agreement
Implementation Act, charges against the bond shall be paid
before the 61st day after the date of exportation, and the
bond shall be credited in an amount equal to--
``(A) 100 percent of the total amount of customs duties
paid or owed on the materials on importation into the United
States during the 8-year period beginning on January 1, 2004,
``(B) 75 percent of the total amount of customs duties paid
or owed on the materials on importation into the United
States during the 1-year period beginning on January 1, 2012,
``(C) 50 percent of the total amount of customs duties paid
or owed on the materials on importation into the United
States during the 1-year period beginning on January 1, 2013,
and
``(D) 25 percent of the total amount of customs duties paid
or owed on the materials on importation into the United
States during the 1-year period beginning on January 1,
2014.''.
(3) Drawback.--Section 313 of the Tariff Act of 1930 (19
U.S.C. 1313) is amended--
(A) in paragraph (4) of subsection (j)--
(i) by striking ``(4)'' and inserting ``(4)(A)''; and
(ii) by adding at the end the following new subparagraph:
``(B) Beginning on January 1, 2015, the exportation to
Chile of merchandise that is fungible with and substituted
for imported merchandise, other than merchandise described in
paragraphs (1) through (5) of section 203(a) of the United
States-Chile Free Trade Agreement Implementation Act,
shall not constitute an exportation for purposes of
paragraph (2). The preceding sentence shall not be
construed to permit the substitution of unused drawback
under paragraph (2) of this subsection with respect to
merchandise described in paragraph (2) of section 203(a)
of the United States-Chile Free Trade Agreement
Implementation Act.'';
(B) in subsection (n)--
(i) by striking ``(n)'' and inserting the following:
``(n) Refunds, Waivers, or Reductions Under Certain Free
Trade Agree-
ments.--'';
(ii) in paragraph (1)--

(I) by striking ``; and'' at the end of subparagraph (B);
(II) by striking the period at the end of subparagraph (C)
and inserting ``; and''; and
(III) by adding at the end the following new subparagraph:

``(D) the term `good subject to Chile FTA drawback' has the
meaning given that term in section 203(a) of the United
States-Chile Free Trade Agreement Implementation Act.''; and
(iii) by adding the following new paragraph at the end:
``(4)(A) For purposes of subsections (a), (b), (f), (h),
(j)(2), (p), and (q), if an article that is exported to Chile
is a good subject to Chile FTA drawback, no customs duties on
the good may be refunded, waived, or reduced, except as
provided in subparagraph (B).
``(B) The customs duties referred to in subparagraph (A)
may be refunded, waived, or reduced by--
``(i) 100 percent during the 8-year period beginning on
January 1, 2004;
``(ii) 75 percent during the 1-year period beginning on
January 1, 2012;
``(iii) 50 percent during the 1-year period beginning on
January 1, 2013; and
``(iv) 25 percent during the 1-year period beginning on
January 1, 2014.''; and
(C) in subsection (o)--
(i) by striking ``(o)'' and inserting the following:
``(o) Special Rules for Certain Vessels and Imported
Materials.--''; and
(ii) by adding at the end the following new paragraphs:
``(3) For purposes of subsection (g), if--
``(A) a vessel is built for the account and ownership of a
resident of Chile or the Government of Chile, and
``(B) imported materials that are used in the construction
and equipment of the vessel are goods subject to Chile FTA
drawback, as defined in section 203(a) of the United States-
Chile Free Trade Agreement Implementation Act,

no customs duties on such materials may be refunded, waived,
or reduced, except as provided in paragraph (4).
``(4) The customs duties referred to in paragraph (3) may
be refunded, waived or reduced by--
``(A) 100 percent during the 8-year period beginning on
January 1, 2004;
``(B) 75 percent during the 1-year period beginning on
January 1, 2012;
``(C) 50 percent during the 1-year period beginning on
January 1, 2013; and
``(D) 25 percent during the 1-year period beginning on
January 1, 2014.''.

[[Page H7465]]

(4) Manipulation in warehouse.--Section 562 of the Tariff
Act of 1930 (19 U.S.C. 1562) is amended--
(A) in paragraph (3), by striking ``to a NAFTA country''
and inserting ``to Chile, to a NAFTA country,'';
(B) by striking ``; and'' at the end of paragraph (4)(B);
(C) by striking the period at the end of paragraph (5) and
inserting ``; and''; and
(D) by inserting after paragraph (5) the following:
``(6)(A) without payment of duties for exportation to
Chile, if the merchandise is of a kind described in any of
paragraphs (1) through (5) of section 203(a) of the United
States-Chile Free Trade Agreement Implementation Act; and
``(B) for exportation to Chile if the merchandise consists
of goods subject to Chile FTA drawback, as defined in section
203(a) of the United States-Chile Free Trade Agreement
Implementation Act, except that--
``(i) the merchandise may not be withdrawn from warehouse
without assessment of a duty on the merchandise in its
condition and quantity, and at its weight, at the time of
withdrawal from the warehouse with such additions to, or
deductions from, the final appraised value as may be
necessary by reason of a change in condition, and
``(ii) duty shall be paid on the merchandise before the
61st day after the date of exportation, except that such
duties may be waived or reduced by--
``(I) 100 percent during the 8-year period beginning on
January 1, 2004,
``(II) 75 percent during the 1-year period beginning on
January 1, 2012,
``(III) 50 percent during the 1-year period beginning on
January 1, 2013, and
``(IV) 25 percent during the 1-year period beginning on
January 1, 2014.''.
(5) Foreign trade zones.--Section 3(a) of the Act of June
18, 1934 (commonly known as the ``Foreign Trade Zones Act'';
19 U.S.C. 81c(a)) is amended by striking the end period and
inserting the following: ``: Provided further, That no
merchandise that consists of goods subject to Chile FTA
drawback, as defined in section 203(a) of the United States-
Chile Free Trade Agreement Implementation Act, that is
manufactured or otherwise changed in condition shall be
exported to Chile without an assessment of a duty on the
merchandise in its condition and quantity, and at its
weight, at the time of its exportation (or if the
privilege in the first proviso to this subsection was
requested, an assessment of a duty on the merchandise in
its condition and quantity, and at its weight, at the time
of its admission into the zone) and the payment of the
assessed duty before the 61st day after the date of
exportation of the article, except that the customs duty
may be waived or reduced by (1) 100 percent during the 8-
year period beginning on January 1, 2004; (2) 75 percent
during the 1-year period beginning on January 1, 2012; (3)
50 percent during the 1-year period beginning on January
1, 2013; and (4) 25 percent during the 1-year period
beginning on January 1, 2014.''.
(c) Inapplicability to Countervailing and Antidumping
Duties.--Nothing in this section or the amendments made by
this section shall be considered to authorize the refund,
waiver, or reduction of countervailing duties or antidumping
duties imposed on an imported good.

SEC. 204. CUSTOMS USER FEES.

Section 13031(b) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(b)) is amended by
inserting after paragraph (11) the following:
``(12) No fee may be charged under subsection (a) (9) or
(10) with respect to goods that qualify as originating goods
under section 202 of the United States-Chile Free Trade
Agreement Implementation Act. Any service for which an
exemption from such fee is provided by reason of this
paragraph may not be funded with money contained in the
Customs User Fee Account.''.

SEC. 205. DISCLOSURE OF INCORRECT INFORMATION; DENIAL OF
PREFERENTIAL TARIFF TREATMENT; FALSE
CERTIFICATES OF ORIGIN.

(a) Disclosure of Incorrect Information.--Section 592 of
the Tariff Act of 1930 (19 U.S.C. 1592) is amended--
(1) in subsection (c)--
(A) by redesignating paragraph (6) as paragraph (7); and
(B) by inserting after paragraph (5) the following new
paragraph:
``(6) Prior disclosure regarding claims under the united
states-chile free trade agreement.--An importer shall not be
subject to penalties under subsection (a) for making an
incorrect claim that a good qualifies as an originating good
under section 202 of the United States-Chile Free Trade
Agreement Implementation Act if the importer, in accordance
with regulations issued by the Secretary of the Treasury,
voluntarily makes a corrected declaration and pays any duties
owing.''; and
(2) by adding at the end the following new subsection:
``(g) False Certifications of Origin Under the United
States-Chile Free Trade Agreement.--
``(1) In general.--Subject to paragraph (2), it is unlawful
for any person to certify falsely, by fraud, gross
negligence, or negligence, in a Chile FTA Certificate of
Origin (as defined in section 508(f)(1)(B) of this Act that a
good exported from the United States qualifies as an
originating good under the rules of origin set out in section
202 of the United States-Chile Free Trade Agreement
Implementation Act. The procedures and penalties of this
section that apply to a violation of subsection (a) also
apply to a violation of this subsection.
``(2) Immediate and voluntary disclosure of incorrect
information.--No penalty shall be imposed under this
subsection if, immediately after an exporter or producer that
issued a Chile FTA Certificate of Origin has reason to
believe that such certificate contains or is based on
incorrect information, the exporter or producer voluntarily
provides written notice of such incorrect information to
every person to whom the certificate was issued.
``(3) Exception.--A person may not be considered to have
violated paragraph (1) if--
``(A) the information was correct at the time it was
provided in a Chile FTA Certificate of Origin but was later
rendered incorrect due to a change in circumstances; and
``(B) the person immediately and voluntarily provides
written notice of the change in circumstances to all persons
to whom the person provided the certificate.''.
(b) Denial of Preferential Tariff Treatment.--Section 514
of the Tariff Act of 1930 (19 U.S.C. 1514) is amended by
adding at the end the following new subsection:
``(g) Denial of Preferential Tariff Treatment Under United
States-Chile Free Trade Agreement.--If the Bureau of Customs
and Border Protection or the Bureau of Immigration and
Customs Enforcement finds indications of a pattern of conduct
by an importer of false or unsupported representations that
goods qualify under the rules of origin set out in section
202 of the United States-Chile Free Trade Agreement
Implementation Act, the Bureau of Customs and Border
Protection, in accordance with regulations issued by the
Secretary of the Treasury, may deny preferential tariff
treatment under the United States-Chile Free Trade Agreement
to entries of identical goods imported by that person until
the person establishes to the satisfaction of the Bureau of
Customs and Border Protection that representations of that
person are in conformity with such section 202.''.

SEC. 206. RELIQUIDATION OF ENTRIES.

Subsection (d) of section 520 of the Tariff Act of 1930 (19
U.S.C. 1520(d)) is amended--
(1) by striking ``(d)'' and inserting the following:
``(d) Goods Qualifying Under Free Trade Agreement Rules of
Origin.--'';
(2) in the matter preceding paragraph (1), by inserting
``or section 202 of the United States-Chile Free Trade
Agreement Implementation Act'' after ``Act'';
(3) in paragraph (1), by striking ``those'' and inserting
``the applicable''; and
(4) in paragraph (2), by inserting before the semicolon ``,
or other certificates of origin, as the case may be''.

SEC. 207. RECORDKEEPING REQUIREMENTS.

Section 508 of the Tariff Act of 1930 (19 U.S.C. 1508) is
amended--
(1) by striking the heading of subsection (b) and inserting
the following: ``Exportations to NAFTA Countries.--''; and
(2) by adding at the end the following:
``(f) Certificates of Origin for Goods Exported Under the
United States-Chile Free Trade Agreement.--
``(1) Definitions.--In this subsection:
``(A) Records and supporting documents.--The term `records
and supporting documents' means, with respect to an exported
good under paragraph (2), records and documents related to
the origin of the good, including--
``(i) the purchase, cost, and value of, and payment for,
the good;
``(ii) if applicable, the purchase, cost, and value of, and
payment for, all materials, including recovered goods, used
in the production of the good; and
``(iii) if applicable, the production of the good in the
form in which it was exported.
``(B) Chile fta certificate of origin.--The term `Chile FTA
Certificate of Origin' means the certification, established
under article 4.13 of the United States-Chile Free Trade
Agreement, that a good qualifies as an originating good under
such Agreement.
``(2) Exports to chile.--Any person who completes and
issues a Chile FTA Certificate of Origin for a good exported
from the United States shall make, keep, and, pursuant to
rules and regulations promulgated by the Secretary of the
Treasury, render for examination and inspection all records
and supporting documents related to the origin of the good
(including the Certificate or copies thereof).
``(3) Retention period.--Records and supporting documents
shall be kept by the person who issued a Chile FTA
Certificate of Origin for at least 5 years after the date on
which the certificate was issued.
``(g) Penalties.--Any person who fails to retain records
and supporting documents required by subsection (f) or the
regulations issued to implement that subsection shall be
liable for the greater of--
``(1) a civil penalty not to exceed $10,000; or
``(2) the general record keeping penalty that applies under
the customs laws of the United States.''.

SEC. 208. ENFORCEMENT OF TEXTILE AND APPAREL RULES OF ORIGIN.

(a) Action During Verification.--If the Secretary of the
Treasury requests the Government of Chile to conduct a
verification pursuant to article 3.21 of the Agreement for
purposes of determining that--
(1) an exporter or producer in Chile is complying with
applicable customs laws, regulations, and procedures
regarding trade in textile and apparel goods, or

[[Page H7466]]

(2) claims that textile or apparel goods exported or
produced by such exporter or producer--
(A) qualify as originating goods under section 202 of this
Act, or
(B) are goods of Chile,
are accurate,

the President may direct the Secretary to take appropriate
action described in subsection (b) while the verification is
being conducted.
(b) Appropriate Action Described.--Appropriate action under
subsection (a) includes--
(1) suspension of liquidation of entries of textile and
apparel goods exported or produced by the person that is the
subject of the verification, in a case in which the request
for verification was based on a reasonable suspicion of
unlawful activity related to such goods; and
(2) publication of the name of the person that is the
subject of the verification.
(c) Action When Information is Insufficient.--If the
Secretary of the Treasury determines that the information
obtained within 12 months after making a request for a
verification under subsection (a) is insufficient to make a
determination under subsection (a), the President may direct
the Secretary to take appropriate action described in
subsection (d) until such time as the Secretary receives
information sufficient to make a determination under
subsection (a) or until such earlier date as the President
may direct.
(d) Appropriate Action Described.--Appropriate action under
subsection (c) includes--
(1) publication of the identity of the person that is the
subject of the verification;
(2) denial of preferential tariff treatment under the
Agreement to any textile or apparel goods exported or
produced by the person that is the subject of the
verification; and
(3) denial of entry into the United States of any textile
or apparel goods exported or produced by the person that is
the subject of the verification.

SEC. 209. CONFORMING AMENDMENTS.

Section 508(b)(2)(B)(i)(I) of the Tariff Act of 1930 (19
U.S.C. 1508(b)(2)(B)(i)(I)) is amended--
(1) by striking ``the last paragraph of section 311'' and
inserting ``the eleventh paragraph of section 311''; and
(2) by striking ``the last proviso to section 3(a)'' and
inserting ``the proviso preceding the last proviso to section
3(a)''.

SEC. 210. REGULATIONS.

The Secretary of the Treasury shall prescribe such
regulations as may be necessary to carry out--
(1) subsections (a) through (n) of section 202, and
sections 203 and 204;
(2) amendments made by the sections referred to in
paragraph (1); and
(3) proclamations issued under section 202(o).

TITLE III--RELIEF FROM IMPORTS

SEC. 301. DEFINITIONS.

In this title:
(1) Commission.--The term ``Commission'' means the United
States International Trade Commission.
(2) Chilean article.--The term ``Chilean article'' means an
article that qualifies as an originating good under section
202(a) of this Act.
(3) Chilean textile or apparel article.--The term ``Chilean
textile or apparel article'' means an article--
(A) that is listed in the Annex to the Agreement on
Textiles and Clothing referred to in section 101(d)(4) of the
Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)); and
(B) that is a Chilean article.

Subtitle A--Relief From Imports Benefiting From the Agreement

SEC. 311. COMMENCING OF ACTION FOR RELIEF.

(a) Filing of Petition.--A petition requesting action under
this subtitle for the purpose of adjusting to the obligations
of the United States under the Agreement may be filed with
the Commission by an entity, including a trade association,
firm, certified or recognized union, or group of workers,
that is representative of an industry. The Commission shall
transmit a copy of any petition filed under this subsection
to the United States Trade Representative.
(b) Investigation and Determination.--Upon the filing of a
petition under subsection (a), the Commission, unless
subsection (d) applies, shall promptly initiate an
investigation to determine whether, as a result of the
reduction or elimination of a duty provided for under the
Agreement, a Chilean article is being imported into the
United States in such increased quantities, in absolute terms
or relative to domestic production, and under such conditions
that imports of the Chilean article constitute a substantial
cause of serious injury or threat thereof to the domestic
industry producing an article that is like, or directly
competitive with, the imported article.
(c) Applicable Provisions.--The following provisions of
section 202 of the Trade Act of 1974 (19 U.S.C. 2252) apply
with respect to any investigation initiated under subsection
(b):
(1) Paragraphs (1)(B) and (3) of subsection (b).
(2) Subsection (c).
(3) Subsection (i).
(d) Articles Exempt From Investigation.--No investigation
may be initiated under this section with respect to any
Chilean article if, after the date that the Agreement enters
into force, import relief has been provided with respect to
that Chilean article under this subtitle, or if, at the time
the petition is filed, the article is subject to import
relief under chapter 1 of title II of the Trade Act of 1974.

SEC. 312. COMMISSION ACTION ON PETITION.

(a) Determination.--Not later than 120 days after the date
on which an investigation is initiated under section 311(b)
with respect to a petition, the Commission shall make the
determination required under that section.
(b) Applicable Provisions.--For purposes of this subtitle,
the provisions of paragraphs (1), (2), and (3) of section
330(d) of the Tariff Act of 1930 (19 U.S.C. 1330(d) (1), (2),
and (3)) shall be applied with respect to determinations and
findings made under this section as if such determinations
and findings were made under section 202 of the Trade Act of
1974 (19 U.S.C. 2252).
(c) Additional Finding and Recommendation if Determination
Affirmative.--If the determination made by the Commission
under subsection (a) with respect to imports of an article is
affirmative, or if the President may consider a determination
of the Commission to be an affirmative determination as
provided for under paragraph (1) of section 330(d) of the
Tariff Act of 1930 (19 U.S.C. 1330(d)), the Commission shall
find, and recommend to the President in the report required
under subsection (d), the amount of import relief that is
necessary to remedy or prevent the injury found by the
Commission in the determination and to facilitate the efforts
of the domestic industry to make a positive adjustment to
import competition. The import relief recommended by the
Commission under this subsection shall be limited to the
relief described in section 313(c). Only those members of the
Commission who voted in the affirmative under subsection (a)
are eligible to vote on the proposed action to remedy or
prevent the injury found by the Commission. Members of the
Commission who did not vote in the affirmative may submit, in
the report required under subsection (d), separate views
regarding what action, if any, should be taken to remedy or
prevent the injury.
(d) Report to President.--Not later than the date that is
30 days after the date on which a determination is made under
subsection (a) with respect to an investigation, the
Commission shall submit to the President a report that
includes--
(1) the determination made under subsection (a) and an
explanation of the basis for the determination;
(2) if the determination under subsection (a) is
affirmative, any findings and recommendations for import
relief made under subsection (c) and an explanation of the
basis for each recommendation; and
(3) any dissenting or separate views by members of the
Commission regarding the determination and recommendation
referred to in paragraphs (1) and (2).
(e) Public Notice.--Upon submitting a report to the
President under subsection (d), the Commission shall promptly
make public such report (with the exception of information
which the Commission determines to be confidential) and shall
cause a summary thereof to be published in the Federal
Register.

SEC. 313. PROVISION OF RELIEF.

(a) In General.--Not later than the date that is 30 days
after the date on which the President receives the report of
the Commission in which the Commission's determination under
section 312(a) is affirmative, or which contains a
determination under section 312(a) that the President
considers to be affirmative under paragraph (1) of section
330(d) of the Tariff Act of 1930 (19 U.S.C. 1330(d)(1), the
President, subject to subsection (b), shall provide relief
from imports of the article that is the subject of such
determination to the extent that the President determines
necessary to remedy or prevent the injury found by the
Commission and to facilitate the efforts of the domestic
industry to make a positive adjustment to import competition.
(b) Exception.--The President is not required to provide
import relief under this section if the President determines
that the provision of the import relief will not provide
greater economic and social benefits than costs.
(c) Nature of Relief.--
(1) In general.--The import relief that the President is
authorized to provide under this section with respect to
imports of an article is as follows:
(A) The suspension of any further reduction provided for
under Annex 3.3 of the Agreement in the duty imposed on such
article.
(B) An increase in the rate of duty imposed on such article
to a level that does not exceed the lesser of--
(i) the column 1 general rate of duty imposed under the HTS
on like articles at the time the import relief is provided;
or
(ii) the column 1 general rate of duty imposed under the
HTS on like articles on the day before the date on which the
Agreement enters into force.
(2) Progressive liberalization.--If the period for which
import relief is provided under this section is greater than
1 year, the President shall provide for the progressive
liberalization (described in article 8.2(2) of the Agreement)
of such relief at regular intervals during the period of its
application.
(d) Period of Relief.--

[[Page H7467]]

(1) In general.--Subject to paragraph (2), the import
relief that the President is authorized to provide under this
section, including any extensions thereof, may not, in the
aggregate, exceed 3 years.
(2) Extension.--
(A) In general.--If the initial period for any import
relief provided under this section is less than 3 years, the
President, after receiving an affirmative determination from
the Commission under subparagraph (B), may extend the
effective period of any import relief provided under this
section, subject to the limitation under paragraph (1), if
the President determines that--
(i) the import relief continues to be necessary to remedy
or prevent serious injury and to facilitate adjustment; and
(ii) there is evidence that the industry is making a
positive adjustment to import competition.
(B) Action by commission.--(i) Upon a petition on behalf of
the industry concerned, filed with the Commission not earlier
than the date which is 9 months, and not later than the date
which is 6 months, before the date on which any action taken
under subsection (a) is to terminate, the Commission shall
conduct an investigation to determine whether action under
this section continues to be necessary to remedy or prevent
serious injury and whether there is evidence that the
industry is making a positive adjustment to import
competition.
(ii) The Commission shall publish notice of the
commencement of any proceeding under this subparagraph in the
Federal Register and shall, within a reasonable time
thereafter, hold a public hearing at which the Commission
shall afford interested parties and consumers an opportunity
to be present, to present evidence, and to respond to the
presentations of other parties and consumers, and otherwise
to be heard.
(iii) The Commission shall transmit to the President a
report on its investigation and determination under this
subparagraph not later than 60 days before the action under
subsection (a) is to terminate, unless the President
specifies a different date.
(e) Rate After Termination of Import Relief.--When import
relief under this section is terminated with respect to an
article--
(1) the rate of duty on that article after such termination
and on or before December 31 of the year in which such
termination occurs shall be the rate that, according to the
Schedule of the United States in Annex 3.3 of the Agreement
for the staged elimination of the tariff, would have been in
effect 1 year after the provision of relief under subsection
(a); and
(2) the rate of duty for that article after December 31 of
the year in which termination occurs shall be, at the
discretion of the President, either--
(A) the applicable rate of duty for that article set out in
the Schedule of the United States in Annex 3.3 of the
Agreement; or
(B) the rate of duty resulting from the elimination of the
tariff in equal annual stages ending on the date set out in
the United States Schedule in Annex 3.3 of the Agreement for
the elimination of the tariff.
(f) Articles Exempt From Relief.--No import relief may be
provided under this section on any article subject to import
relief under chapter 1 of title II of the Trade Act of 1974.

SEC. 314. TERMINATION OF RELIEF AUTHORITY.

(a) General Rule.--No import relief may be provided under
this subtitle after the date that is 10 years after the date
on which the Agreement enters into force.
(b) Exception.--If an article for which relief is provided
under this subtitle is an article for which the period for
tariff elimination, set out in the Schedule of the United
States to Annex 3.3 of the Agreement, is 12 years, no relief
under this subtitle may be provided for that article after
the date that is 12 years after the date on which the
Agreement enters into force.

SEC. 315. COMPENSATION AUTHORITY.

For purposes of section 123 of the Trade Act of 1974 (19
U.S.C. 2133), any import relief provided by the President
under section 313 shall be treated as action taken under
chapter 1 of title II of such Act.

SEC. 316. CONFIDENTIAL BUSINESS INFORMATION.

Section 202 (a)(8) of the Trade Act of 1974 (19 U.S.C.
2252(a)(8)) is amended in the first sentence--
(1) by striking ``and''; and
(2) by inserting before the period at the end ``, and title
III of the United States-Chile Free Trade Agreement
Implementation Act''.

Subtitle B--Textile and Apparel Safeguard Measures

SEC. 321. COMMENCEMENT OF ACTION FOR RELIEF.

(a) In General.--A request under this subtitle for the
purpose of adjusting to the obligations of the United States
under the Agreement may be filed with the President by an
interested party. Upon the filing of a request, the President
shall review the request to determine, from information
presented in the request, whether to commence
consideration of the request.
(b) Publication of Request.--If the President determines
that the request under subsection (a) provides the
information necessary for the request to be considered, the
President shall cause to be published in the Federal Register
a notice of commencement of consideration of the request, and
notice seeking public comments regarding the request. The
notice shall include the request and the dates by which
comments and rebuttals must be received.

SEC. 322. DETERMINATION AND PROVISION OF RELIEF.

(a) Determination.--
(1) In general.--If a positive determination is made under
section 321(b), the President shall determine whether, as a
result of the elimination of a duty under the Agreement, a
Chilean textile or apparel article is being imported into the
United States in such increased quantities, in absolute terms
or relative to the domestic market for that article, and
under such conditions as to cause serious damage, or actual
threat thereof, to a domestic industry producing an article
that is like, or directly competitive with, the imported
article.
(2) Serious damage.--In making a determination under
paragraph (1), the President--
(A) shall examine the effect of increased imports on the
domestic industry, as reflected in changes in such relevant
economic factors as output, productivity, utilization of
capacity, inventories, market share, exports, wages,
employment, domestic prices, profits, and investment, none of
which is necessarily decisive; and
(B) shall not consider changes in technology or consumer
preference as factors supporting a determination of serious
damage or actual threat thereof.
(b) Provision of Relief.--
(1) In general.--If a determination under subsection (a) is
affirmative, the President may provide relief from imports of
the article that is the subject of such determination, as
provided in paragraph (2), to the extent that the President
determines necessary to remedy or prevent the serious damage
and to facilitate adjustment by the domestic industry.
(2) Nature of relief.--The relief that the President is
authorized to provide under this subsection with respect to
imports of an article is an increase in the rate of duty
imposed on the article to a level that does not exceed the
lesser of--
(A) the column 1 general rate of duty imposed under the HTS
on like articles at the time the import relief is provided;
or
(B) the column 1 general rate of duty imposed under the HTS
on like articles on the day before the date on which the
Agreement enters into force.

SEC. 323. PERIOD OF RELIEF.

(a) In General.--The import relief that the President is
authorized to provide under section 322, including any
extensions thereof, may not, in the aggregate, exceed 3
years.
(b) Extension.--If the initial period for any import relief
provided under this section is less than 3 years, the
President may extend the effective period of any import
relief provided under this section, subject to the limitation
set forth in subsection (a), if the President determines
that--
(1) the import relief continues to be necessary to remedy
or prevent serious damage and to facilitate adjustment; and
(2) there is evidence that the industry is making a
positive adjustment to import competition.

SEC. 324. ARTICLES EXEMPT FROM RELIEF.

The President may not provide import relief under this
subtitle with respect to any article if import relief
previously has been provided under this subtitle with respect
to that article.

SEC. 325. RATE AFTER TERMINATION OF IMPORT RELIEF.

When import relief under this subtitle is terminated with
respect to an article, the rate of duty on that article shall
be duty-free.

SEC. 326. TERMINATION OF RELIEF AUTHORITY.

No import relief may be provided under this subtitle with
respect to any article after the date that is 8 years after
the date on which duties on the article are eliminated
pursuant to the Agreement.

SEC. 327. COMPENSATION AUTHORITY.

For purposes of section 123 of the Trade Act of 1974 (19
U.S.C. 2133), any import relief provided by the President
under this subtitle shall be treated as action taken under
chapter 1 of title II of that Act.

SEC. 328. BUSINESS CONFIDENTIAL INFORMATION.

The President may not release information which the
President considers to be confidential business information
unless the party submitting the confidential business
information had notice, at the time of submission, that such
information would be released by the President, or such party
subsequently consents to the release of the information. To
the extent business confidential information is provided, a
nonconfidential version of the information shall also be
provided, in which the business confidential information is
summarized or, if necessary, deleted.

TITLE IV--TEMPORARY ENTRY OF BUSINESS PERSONS.

SEC. 401. NONIMMIGRANT TRADERS AND INVESTORS.

Upon a basis of reciprocity secured by the Agreement, an
alien who is a national of Chile (and any spouse or child (as
defined in section 101(b)(1) of the Immigration and
Nationality Act (8 U.S.C. 1101(b)(1)) of such alien, if
accompanying or following to join the alien) may, if
otherwise eligible for a visa and if otherwise admissible
into the United States under the Immigration and Nationality
Act (8 U.S.C. 1101 et seq.), be considered to be classifiable
as a nonimmigrant under section 101(a)(15)(E) of such

[[Page H7468]]

Act (8 U.S.C. 1101(a)(15)(E)) if entering solely for a
purpose specified in clause (i) or (ii) of such section
101(a)(15)(E). For purposes of this section, the term
``national'' has the meaning given such term in article 14.9
of the Agreement.

SEC. 402. NONIMMIGRANT PROFESSIONALS; LABOR ATTESTATIONS.

(a) Nonimmigrant Professionals.--
(1) Definitions.--Section 101(a)(15)(H)(i)(b) of the
Immigration and Nationality Act (8 U.S.C.
1101(a)(15)(H)(i)(b)) is amended by striking ``212(n)(1), or
(c)'' and inserting ``212(n)(1), or (b1) who is entitled to
enter the United States under and in pursuance of the
provisions of an agreement listed in section 214(g)(8)(A),
who is engaged in a specialty occupation described in section
214(i)(3), and with respect to whom the Secretary of Labor
determines and certifies to the Secretary of Homeland
Security and the Secretary of State that the intending
employer has filed with the Secretary of Labor an attestation
under section 212(t)(1), or (c)''.
(2) Admission of nonimmigrants.--Section 214 of the
Immigration and Nationality Act (8 U.S.C. 1184) is amended--
(A) in subsection (i)--
(i) in paragraph (1), by striking ``For purposes'' and
inserting ``Except as provided in paragraph (3), for
purposes''; and
(ii) by adding at the end the following:
``(3) For purposes of section 101(a)(15)(H)(i)(b1), the
term `specialty occupation' means an occupation that
requires--
``(A) theoretical and practical application of a body of
specialized knowledge; and
``(B) attainment of a bachelor's or higher degree in the
specific specialty (or its equivalent) as a minimum for entry
into the occupation in the United States.''; and
(B) in subsection (g), by adding at the end the following:
``(8)(A) The agreement referred to in section
101(a)(15)(H)(i)(b1) is the United States-Chile Free Trade
Agreement.
``(B)(i) The Secretary of Homeland Security shall establish
annual numerical limitations on approvals of initial
applications by aliens for admission under section
101(a)(15)(H)(i)(b1).
``(ii) The annual numerical limitations described in clause
(i) shall not exceed 1,400 for nationals of Chile for any
fiscal year. For purposes of this clause, the term `national'
has the meaning given such term in article 14.9 of the United
States-Chile Free Trade Agreement.
``(iii) The annual numerical limitations described in
clause (i) shall only apply to principal aliens and not to
the spouses or children of such aliens.
``(iv) The annual numerical limitation described in
paragraph (1)(A) is reduced by the amount of the annual
numerical limitations established under clause (i). However,
if a numerical limitation established under clause (i) has
not been exhausted at the end of a given fiscal year, the
Secretary of Homeland Security shall adjust upwards the
numerical limitation in paragraph (1)(A) for that fiscal year
by the amount remaining in the numerical limitation under
clause (i). Visas under section 101(a)(15)(H)(i)(b) may be
issued pursuant to such adjustment within the first 45 days
of the next fiscal year to aliens who had applied for such
visas during the fiscal year for which the adjustment was
made.
``(C) The period of authorized admission as a nonimmigrant
under section 101(a)(15)(H)(i)(b1) shall be 1 year, and may
be extended, but only in 1-year increments. After every
second extension, the next following extension shall not be
granted unless the Secretary of Labor had determined and
certified to the Secretary of Homeland Security and the
Secretary of State that the intending employer has filed with
the Secretary of Labor an attestation under section 212(t)(1)
for the purpose of permitting the nonimmigrant to obtain such
extension.
``(D) The numerical limitation described in paragraph
(1)(A) for a fiscal year shall be reduced by one for each
alien granted an extension under subparagraph (C) during such
year who has obtained 5 or more consecutive prior
extensions.''.
(b) Labor Attestations.--Section 212 of the Immigration and
Nationality Act (8 U.S.C. 1182) is amended--
(1) by redesignating the subsection (p) added by section
1505(f) of Public Law 106-386 (114 Stat. 1526) as subsection
(s); and
(2) by adding at the end the following:
``(t)(1) No alien may be admitted or provided status as a
nonimmigrant under section 101(a)(15)(H)(i)(b1) in an
occupational classification unless the employer has filed
with the Secretary of Labor an attestation stating the
following:
``(A) The employer--
``(i) is offering and will offer during the period of
authorized employment to aliens admitted or provided status
under section 101(a)(15)(H)(i)(b1) wages that are at least--
``(I) the actual wage level paid by the employer to all
other individuals with similar experience and qualifications
for the specific employment in question; or
``(II) the prevailing wage level for the occupational
classification in the area of employment,

whichever is greater, based on the best information available
as of the time of filing the attestation; and
``(ii) will provide working conditions for such a
nonimmigrant that will not adversely affect the working
conditions of workers similarly employed.
``(B) There is not a strike or lockout in the course of a
labor dispute in the occupational classification at the place
of employment.
``(C) The employer, at the time of filing the attestation--
``(i) has provided notice of the filing under this
paragraph to the bargaining representative (if any) of the
employer's employees in the occupational classification and
area for which aliens are sought; or
``(ii) if there is no such bargaining representative, has
provided notice of filing in the occupational classification
through such methods as physical posting in conspicuous
locations at the place of employment or electronic
notification to employees in the occupational classification
for which nonimmigrants under section 101(a)(15)(H)(i)(b1)
are sought.
``(D) A specification of the number of workers sought, the
occupational classification in which the workers will be
employed, and wage rate and conditions under which they will
be employed.
``(2)(A) The employer shall make available for public
examination, within one working day after the date on which
an attestation under this subsection is filed, at the
employer's principal place of business or worksite, a copy of
each such attestation (and such accompanying documents as are
necessary).
``(B)(i) The Secretary of Labor shall compile, on a current
basis, a list (by employer and by occupational
classification) of the attestations filed under this
subsection. Such list shall include, with respect to each
attestation, the wage rate, number of aliens sought, period
of intended employment, and date of need.
``(ii) The Secretary of Labor shall make such list
available for public examination in Washington, D.C.
``(C) The Secretary of Labor shall review an attestation
filed under this subsection only for completeness and obvious
inaccuracies. Unless the Secretary of Labor finds that an
attestation is incomplete or obviously inaccurate, the
Secretary of Labor shall provide the certification
described in section 101(a)(15)(H)(i)(b1) within 7 days of
the date of the filing of the attestation.
``(3)(A) The Secretary of Labor shall establish a process
for the receipt, investigation, and disposition of complaints
respecting the failure of an employer to meet a condition
specified in an attestation submitted under this subsection
or misrepresentation by the employer of material facts in
such an attestation. Complaints may be filed by any aggrieved
person or organization (including bargaining
representatives). No investigation or hearing shall be
conducted on a complaint concerning such a failure or
misrepresentation unless the complaint was filed not later
than 12 months after the date of the failure or
misrepresentation, respectively. The Secretary of Labor shall
conduct an investigation under this paragraph if there is
reasonable cause to believe that such a failure or
misrepresentation has occurred.
``(B) Under the process described in subparagraph (A), the
Secretary of Labor shall provide, within 30 days after the
date a complaint is filed, for a determination as to whether
or not a reasonable basis exists to make a finding described
in subparagraph (C). If the Secretary of Labor determines
that such a reasonable basis exists, the Secretary of Labor
shall provide for notice of such determination to the
interested parties and an opportunity for a hearing on the
complaint, in accordance with section 556 of title 5, United
States Code, within 60 days after the date of the
determination. If such a hearing is requested, the Secretary
of Labor shall make a finding concerning the matter by not
later than 60 days after the date of the hearing. In the case
of similar complaints respecting the same applicant, the
Secretary of Labor may consolidate the hearings under this
subparagraph on such complaints.
``(C)(i) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a failure to meet a condition of
paragraph (1)(B), a substantial failure to meet a condition
of paragraph (1)(C) or (1)(D), or a misrepresentation of
material fact in an attestation--
``(I) the Secretary of Labor shall notify the Secretary of
State and the Secretary of Homeland Security of such finding
and may, in addition, impose such other administrative
remedies (including civil monetary penalties in an amount not
to exceed $1,000 per violation) as the Secretary of Labor
determines to be appropriate; and
``(II) the Secretary of State or the Secretary of Homeland
Security, as appropriate, shall not approve petitions or
applications filed with respect to that employer under
section 204, 214(c), or 101(a)(15)(H)(i)(b1) during a period
of at least 1 year for aliens to be employed by the employer.
``(ii) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a willful failure to meet a
condition of paragraph (1), a willful misrepresentation of
material fact in an attestation, or a violation of clause
(iv)--
``(I) the Secretary of Labor shall notify the Secretary of
State and the Secretary of Homeland Security of such finding
and may, in addition, impose such other administrative
remedies (including civil monetary penalties in an amount not
to exceed $5,000 per violation) as the Secretary of Labor
determines to be appropriate; and
``(II) the Secretary of State or the Secretary of Homeland
Security, as appropriate, shall not approve petitions or
applications filed with respect to that employer under
section 204, 214(c), or 101(a)(15)(H)(i)(b1) during a period
of at least 2 years for aliens to be employed by the
employer.

[[Page H7469]]

``(iii) If the Secretary of Labor finds, after notice and
opportunity for a hearing, a willful failure to meet a
condition of paragraph (1) or a willful misrepresentation of
material fact in an attestation, in the course of which
failure or misrepresentation the employer displaced a United
States worker employed by the employer within the period
beginning 90 days before and ending 90 days after the date of
filing of any visa petition or application supported by the
attestation--
``(I) the Secretary of Labor shall notify the Secretary of
State and the Secretary of Homeland Security of such finding
and may, in addition, impose such other administrative
remedies (including civil monetary penalties in an amount not
to exceed $35,000 per violation) as the Secretary of Labor
determines to be appropriate; and
``(II) the Secretary of State or the Secretary of Homeland
Security, as appropriate, shall not approve petitions or
applications filed with respect to that employer under
section 204, 214(c), or 101(a)(15)(H)(i)(b1) during a period
of at least 3 years for aliens to be employed by the
employer.
``(iv) It is a violation of this clause for an employer who
has filed an attestation under this subsection to intimidate,
threaten, restrain, coerce, blacklist, discharge, or in any
other manner discriminate against an employee (which term,
for purposes of this clause, includes a former employee and
an applicant for employment) because the employee has
disclosed information to the employer, or to any other
person, that the employee reasonably believes evidences a
violation of this subsection, or any rule or regulation
pertaining to this subsection, or because the employee
cooperates or seeks to cooperate in an investigation or
other proceeding concerning the employer's compliance with
the requirements of this subsection or any rule or
regulation pertaining to this subsection.
``(v) The Secretary of Labor and the Secretary of Homeland
Security shall devise a process under which a nonimmigrant
under section 101(a)(15)(H)(i)(b1) who files a complaint
regarding a violation of clause (iv) and is otherwise
eligible to remain and work in the United States may be
allowed to seek other appropriate employment in the United
States for a period not to exceed the maximum period of stay
authorized for such nonimmigrant classification.
``(vi)(I) It is a violation of this clause for an employer
who has filed an attestation under this subsection to require
a nonimmigrant under section 101(a)(15)(H)(i)(b1) to pay a
penalty for ceasing employment with the employer prior to a
date agreed to by the nonimmigrant and the employer. The
Secretary of Labor shall determine whether a required payment
is a penalty (and not liquidated damages) pursuant to
relevant State law.
``(II) If the Secretary of Labor finds, after notice and
opportunity for a hearing, that an employer has committed a
violation of this clause, the Secretary of Labor may impose a
civil monetary penalty of $1,000 for each such violation and
issue an administrative order requiring the return to the
nonimmigrant of any amount paid in violation of this clause,
or, if the nonimmigrant cannot be located, requiring payment
of any such amount to the general fund of the Treasury.
``(vii)(I) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an attestation under
this subsection and who places a nonimmigrant under section
101(a)(15)(H)(i)(b1) designated as a full-time employee in
the attestation, after the nonimmigrant has entered into
employment with the employer, in nonproductive status due to
a decision by the employer (based on factors such as lack of
work), or due to the nonimmigrant's lack of a permit or
license, to fail to pay the nonimmigrant full-time wages in
accordance with paragraph (1)(A) for all such nonproductive
time.
``(II) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an attestation under
this subsection and who places a nonimmigrant under section
101(a)(15)(H)(i)(b1) designated as a part-time employee in
the attestation, after the nonimmigrant has entered into
employment with the employer, in nonproductive status under
circumstances described in subclause (I), to fail to pay such
a nonimmigrant for such hours as are designated on the
attestation consistent with the rate of pay identified on the
attestation.
``(III) In the case of a nonimmigrant under section
101(a)(15)(H)(i)(b1) who has not yet entered into employment
with an employer who has had approved an attestation under
this subsection with respect to the nonimmigrant, the
provisions of subclauses (I) and (II) shall apply to the
employer beginning 30 days after the date the nonimmigrant
first is admitted into the United States, or 60 days after
the date the nonimmigrant becomes eligible to work for the
employer in the case of a nonimmigrant who is present in the
United States on the date of the approval of the attestation
filed with the Secretary of Labor.
``(IV) This clause does not apply to a failure to pay wages
to a nonimmigrant under section 101(a)(15)(H)(i)(b1) for
nonproductive time due to non-work-related factors, such as
the voluntary request of the nonimmigrant for an absence or
circumstances rendering the nonimmigrant unable to work.
``(V) This clause shall not be construed as prohibiting an
employer that is a school or other educational institution
from applying to a nonimmigrant under section
101(a)(15)(H)(i)(b1) an established salary practice of the
employer, under which the employer pays to nonimmigrants
under section 101(a)(15)(H)(i)(b1) and United States workers
in the same occupational classification an annual salary in
disbursements over fewer than 12 months, if--
``(aa) the nonimmigrant agrees to the compressed annual
salary payments prior to the commencement of the employment;
and
``(bb) the application of the salary practice to the
nonimmigrant does not otherwise cause the nonimmigrant to
violate any condition of the nonimmigrant's authorization
under this Act to remain in the United States.
``(VI) This clause shall not be construed as superseding
clause (viii).
``(viii) It is a failure to meet a condition of paragraph
(1)(A) for an employer who has filed an attestation under
this subsection to fail to offer to a nonimmigrant under
section 101(a)(15)(H)(i)(b1), during the nonimmigrant's
period of authorized employment, benefits and eligibility for
benefits (including the opportunity to participate in health,
life, disability, and other insurance plans; the opportunity
to participate in retirement and savings plans; and cash
bonuses and non-cash compensation, such as stock options
(whether or not based on performance)) on the same basis, and
in accordance with the same criteria, as the employer offers
to United States workers.
``(D) If the Secretary of Labor finds, after notice and
opportunity for a hearing, that an employer has not paid
wages at the wage level specified in the attestation and
required under paragraph (1), the Secretary of Labor shall
order the employer to provide for payment of such amounts of
back pay as may be required to comply with the requirements
of paragraph (1), whether or not a penalty under subparagraph
(C) has been imposed.
``(E) The Secretary of Labor may, on a case-by-case basis,
subject an employer to random investigations for a period of
up to 5 years, beginning on the date on which the employer is
found by the Secretary of Labor to have committed a willful
failure to meet a condition of paragraph (1) or to have made
a willful misrepresentation of material fact in an
attestation. The authority of the Secretary of Labor under
this subparagraph shall not be construed to be subject to, or
limited by, the requirements of subparagraph (A).
``(F) Nothing in this subsection shall be construed as
superseding or preempting any other enforcement-related
authority under this Act (such as the authorities under
section 274B), or any other Act.
``(4) For purposes of this subsection:
``(A) The term `area of employment' means the area within
normal commuting distance of the worksite or physical
location where the work of the nonimmigrant under section
101(a)(15)(H)(i)(b1) is or will be performed. If such
worksite or location is within a Metropolitan Statistical
Area, any place within such area is deemed to be within the
area of employment.
``(B) In the case of an attestation with respect to one or
more nonimmigrants under section 101(a)(15)(H)(i)(b1) by an
employer, the employer is considered to `displace' a United
States worker from a job if the employer lays off the worker
from a job that is essentially the equivalent of the job for
which the nonimmigrant or nonimmigrants is or are sought. A
job shall not be considered to be essentially equivalent of
another job unless it involves essentially the same
responsibilities, was held by a United States worker with
substantially equivalent qualifications and experience, and
is located in the same area of employment as the other job.
``(C)(i) The term `lays off', with respect to a worker--
``(I) means to cause the worker's loss of employment, other
than through a discharge for inadequate performance,
violation of workplace rules, cause, voluntary departure,
voluntary retirement, or the expiration of a grant or
contract; but
``(II) does not include any situation in which the worker
is offered, as an alternative to such loss of employment, a
similar employment opportunity with the same employer at
equivalent or higher compensation and benefits than the
position from which the employee was discharged, regardless
of whether or not the employee accepts the offer.
``(ii) Nothing in this subparagraph is intended to limit an
employee's rights under a collective bargaining agreement or
other employment contract.
``(D) The term `United States worker' means an employee
who--
``(i) is a citizen or national of the United States; or
``(ii) is an alien who is lawfully admitted for permanent
residence, is admitted as a refugee under section 207 of this
title, is granted asylum under section 208, or is an
immigrant otherwise authorized, by this Act or by the
Secretary of Homeland Security, to be employed.''.
(c) Special Rule for Computation of Prevailing Wage.--
Section 212(p)(1) of the Immigration and Nationality Act (8
U.S.C. 1182(p)(1)) is amended by striking ``(n)(1)(A)(i)(II)
and (a)(5)(A)'' and inserting ``(a)(5)(A), (n)(1)(A)(i)(II),
and (t)(1)(A)(i)(II)''.
(d) Fee.--
(1) In general.--Section 214(c) of the Immigration and
Nationality Act (8 U.S.C. 1184(c)) is amended by adding at
the end the following:

[[Page H7470]]

``(11)(A) Subject to subparagraph (B), the Secretary of
Homeland Security or the Secretary of State, as appropriate,
shall impose a fee on an employer who has filed an
attestation described in section 212(t)--
``(i) in order that an alien may be initially granted
nonimmigrant status described in section
101(a)(15)(H)(i)(b1); or
``(ii) in order to satisfy the requirement of the second
sentence of subsection (g)(8)(C) for an alien having such
status to obtain certain extensions of stay.
``(B) The amount of the fee shall be the same as the amount
imposed by the Secretary of Homeland Security under paragraph
(9), except that if such paragraph does not authorize such
Secretary to impose any fee, no fee shall be imposed under
this paragraph.
``(C) Fees collected under this paragraph shall be
deposited in the Treasury in accordance with section
286(s).''.
(2) Use of fee.--Section 286(s)(1) of the Immigration and
Nationality Act (8 U.S.C. 1356(s)(1)) is amended by striking
``section 214(c)(9).'' and inserting ``paragraphs (9) and
(11) of section 214(c).''.

SEC. 403. LABOR DISPUTES.

Section 214(j) of the Immigration and Nationality Act (8
U.S.C. 1184(j)) is amended--
(1) by striking ``(j)'' and inserting ``(j)(1)'';
(2) by striking ``this subsection'' each place such term
appears and inserting ``this paragraph''; and
(3) by adding at the end the following:
``(2) Notwithstanding any other provision of this Act
except section 212(t)(1), and subject to regulations
promulgated by the Secretary of Homeland Security, an alien
who seeks to enter the United States under and pursuant to
the provisions of an agreement listed in subsection
(g)(8)(A), and the spouse and children of such an alien if
accompanying or following to join the alien, may be denied
admission as a nonimmigrant under subparagraph (E), (L), or
(H)(i)(b1) of section 101(a)(15) if there is in progress a
labor dispute in the occupational classification at the place
or intended place of employment, unless such alien
establishes, pursuant to regulations promulgated by the
Secretary of Homeland Security after consultation with the
Secretary of Labor, that the alien's entry will not affect
adversely the settlement of the labor dispute or the
employment of any person who is involved in the labor
dispute. Notice of a determination under this paragraph shall
be given as may be required by such agreement.''.

SEC. 404. CONFORMING AMENDMENTS.

Section 214 of the Immigration and Nationality Act (8
U.S.C. 1184) is amended--
(1) in subsection (b), by striking ``(other than a
nonimmigrant described in subparagraph (H)(i), (L), or (V) of
section 101(a)(15))'' and inserting ``(other than a
nonimmigrant described in subparagraph (L) or (V) of section
101(a)(15), and other than a nonimmigrant described in any
provision of section 101(a)(15)(H)(i) except subclause (b1)
of such section)'';
(2) in subsection (c)(1), by striking ``section
101(a)(15)(H), (L), (O), or (P)(i)'' and inserting
``subparagraph (H), (L), (O), or (P)(i) of section 101(a)(15)
(excluding nonimmigrants under section
101(a)(15)(H)(i)(b1))''; and
(3) in subsection (h), by striking ``(H)(i)'' and inserting
``(H)(i)(b) or (c)''.

The SPEAKER pro tempore (Mr. Hefley). Pursuant to House Resolution
329, the gentleman from California (Mr. Thomas) and the gentleman from
New York (Mr. Rangel) each will control 50 minutes. The gentleman from
Wisconsin (Mr. Sensenbrenner) and the gentleman from Michigan (Mr.
Conyers) each will control 10 minutes.
The Chair recognizes the gentleman from California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of H.R. 2738 and the companion
bill, which we will discuss immediately following, H.R. 2739. These are
the first fruits of the passage of the Free Trade Act implementing for
the United States its ability to negotiate agreements with countries,
with regions, and with multilateral organizations.
We have been out of the arena for a long time. To show you how long
we have been out and how much the world has changed in a very positive
way, when you look at H.R. 2738, the Free Trade Agreement with Chile,
there are a number of firsts in trade agreements with the United States
that are racked up by this particular agreement.
One, it is the first true bilateral agreement that we have had in 15
years. It is the first free trade agreement with a South American
country. It is the first free trade agreement using a negative list
approach in services, a significant step forward where you say where
you do not want to play, but everything else is open. That stands on
its head the historical free trade agreement arrangement.
This is the first free trade agreement requiring our trading partner
to apply the TRIPS Plus Intellectual Property protections which go
beyond the WTO protections. This is the first FTA allowing the use of
monetary assessments for commercial disputes as a means to avoid
collateral damage caused by import sanctions. It is the first FTA
treating labor and environment obligations enforceable on a par with
commercial disputes.
It is the first FTA requiring our trading partner to utilize
transparent rule-making procedures following U.S. standards. It is the
first free trade agreement covering e-commerce.
You can go on and on because there are so many firsts in these
agreements. The idea is that once we are back in the field, we have
leap-frogged across a decade and a half. These are world-class free
trade agreements, and one of the things that I think we can say is, it
is about time.
Mr. Speaker, I reserve the balance of my time.
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of the Chile and Singapore Free Trade
Agreements. Even though they are small in terms of the overall trade
that our great Nation will be involved in, it is the first time that we
are recognizing the ability to trade with our South American neighbors
and to coordinate this with Mexico and the Caribbean and, indeed, to
move forward so that we can end up with a free trade agreement for the
Americas.
It is oftentimes said that peace is not just the absence of war, but
it is the ability for nations to work with each other to trade with
each other to improve the quality of life and to create jobs. And to a
large extent, the work that has been done on the Chile and Singapore
agreements will serve as a model for agreements that have to follow.
But I must say that, as we trade, we must remember that we have to,
as a great Nation, have to have minimum standards that we expect that
our trading partners will have. We have to make certain that we try to
protect not just intellectual property rights, but environmental rights
and workers' rights. We have to recognize that if we are going to
become members of international organizations that have international
standards, we must abide by those standards; and certainly all
Americans should want to have core international work standards so that
we do not drive to the minimum what we pay our workers and health
standards that we try to improve.
In the Chile and Singapore agreements, you will see documents that
these countries are to enforce their domestic labor laws. Many of us
support the Chile and Singapore Free Trade Agreement not only because
they have decent labor laws, but they have the ability and willingness
to enforce them. We are not certain that this is going to happen with
other trade agreements that may be coming before this body, but we want
to make it abundantly clear that the mere fact that we accept this
language in Chile and Singapore does not mean that we will have to
accept this language where we do not see it is abundantly clear that
other nations have labor laws that follow the core international labor
organization laws and the fact that they have a willingness to enforce
these laws.
Mr. Speaker, I ask unanimous consent to yield the balance of my time
to the gentleman from Michigan (Mr. Levin) for purposes of control. The
gentleman is the ranking member of the Subcommittee on Trade.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New York?
There was no objection.
Mr. THOMAS. Mr. Speaker, I yield such time as she may consume to the
gentlewoman from Illinois (Mrs. Biggert).
Mrs. BIGGERT. Mr. Speaker, I thank the chairman for yielding me time.
Mr. Speaker, it is with great pleasure that I rise today to express
my strong support for the U.S.-Chile Free Trade Agreement.
Mr. Speaker, it was back in late 1992, just as the former Bush
administration concluded negotiations on NAFTA, that the U.S. announced
its intention to pursue a Free Trade Agreement of the Americas, or
FTAA, with Chile as its first new partner. Now, at that time, no one
could have predicted that it would take more than a decade to conclude
an agreement and arrive here at the House today.
The delay, of course, was not the result of changes in the
administrations

[[Page H7471]]

in the U.S. or Chile, President Clinton supported an FTA with Chile as
did President George W. Bush when he was elected in 2000. And
successive Chilean governments have backed an agreement.
It was only last year, with the passage of Trade Promotion Authority,
or TPA, that the logjam finally was broken and the negotiators, free to
conclude the agreement that we address here today.
There is no mystery as to why the United States moved forward first
with Chile. It is true, Brazil is potentially a much larger Latin
American market for U.S. products and services, and the nations of the
Caribbean are undeniably closer to the United States. But it was Chile,
not Brazil or the Caribbean or other nations of our hemisphere that
exhibited our greatest promise for a partnership, and that is why we
should support this agreement today.
Truly a South American success story, Chile during the 1990s, more
than doubled its gross domestic product, becoming the fourth fastest
growing economy in the world. Even more significant are the political
reforms that have supported this growth. Chile has rebuilt its
historically solid democracy over the past decade. It has a transparent
government that adheres to the rule of law. It has a firm legal
commitment to human rights, including strong progressive labor and
environmental protection regimes.
Perhaps most importantly, Chile has demonstrated its commitment to
open markets, lowering unilaterally many of its own trade barriers and
working bilaterally, regionally, and multilaterally for trade
liberalization. In short, Chile is a good partner who can only become a
better partner within our hemisphere with the enactment into force of
this agreement.
It is not a huge trading partner for the United States. Its
population of 15 million is only slightly larger than my home State of
Illinois. And Chile is our 44th largest trading partner, whereas the
United States is Chile's number one trading partner. Right now, most
Chilean products enter the United States duty free under the GSP. In
contrast, our products face a 6 percent across-the-board tariff when
they enter Chile.
This free trade agreement with Chile will put the United States back
on an equal or better footing with the Europeans, Brazilians, Mexicans,
and Canadians with whom we compete in Chile. It is an agreement that is
strong on market access, service openings, intellectual property
protection, and labor and environmental safeguards.
The Free Trade Agreement with Chile was a good idea 10 years ago and
it is an even better idea today. It is about reducing trade barriers,
allowing our companies to compete successfully, and strengthening our
friendships in the Western Hemisphere. I urge my colleagues to support
the legislation.

{time} 1030

Mr. LEVIN. Mr. Speaker, let me just be sure of the procedure here so
that we are clear. I want to be sure that all the Members who want to
speak on both sides of this have a chance to do so. I think the way we
worked this out, the gentleman from California (Mr. Stark) would go
next, and after the gentleman from California (Mr. Stark), the
gentleman from California (Mr. Thomas) will go, and then I will go.
The SPEAKER pro tempore (Mr. Hefley). The gentleman from Michigan
(Mr. Levin) has the time, and he can yield it at his pleasure.
Mr. LEVIN. Mr. Speaker, I yield 25 minutes to my distinguished
colleague from California (Mr. Stark).
The SPEAKER pro tempore. Does the gentleman ask unanimous consent
that he be able to yield that time?
Mr. LEVIN. Yes, Mr. Speaker.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Michigan?
There was no objection.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume,
and in doing so rise in opposition to 2738, the U.S.-Chile Free Trade
Agreement implementing the Act. And not only do I speak on behalf of
numerous Members who oppose this, but I also speak on behalf of the
International Brotherhood of Teamsters, the AFL-CIO, the International
Brotherhood of Boilermakers, the International Brotherhood of
Electrical Workers, United Auto Workers, United Steelworkers of
America, the UNITE, the needle trades, and the Machinists Union, all of
whom strongly oppose the Singapore and Chile Free Trade Agreements, and
it will soon become apparent why they oppose it.
These agreements are notable for their lack of labor rights
enforcement language and, for the first time, the addition of a
permanent work visa program for a violation of a guest laborer
organization that invites foreign workers to come to this country under
specialized visa programs, and these agreements are a template for
future trade agreements and are sufficient reason to oppose both
agreements and the implementing legislation.
American workers have suffered too many job losses for the sake of
free trade, for the sake of giving huge tax cuts to the richest
Americans, and they have suffered, the children and education and
health care in this country, as the current administration has worked
its will to harm and dismantle labor unions and to ignore children's
education by starving these programs through tax cuts.
The U.S. Trade Representative has the ability to ensure that good-
paying jobs are not shipped overseas, I must say, by negotiating labor
standards that have strong enforcement measures, but the U.S. Trade
Representative has not, he will not, and the administration will not
ask him to. Thus, it is up to Congress to require him to protect U.S.
workers from the devastation of trade agreements like the Chile Fair
Trade Agreement.
Our Nation's unemployment rate reached 6.4 percent in June, the
highest rate in more than 9 years, causing the loss of more than 1
million jobs in the last 3 months. Since NAFTA, we have lost 500,000
jobs due to NAFTA. Three-quarters of the jobs lost due to NAFTA have
been in the manufacturing sector. These are good-paying jobs that have
been shipped overseas. These are traditional American jobs that are the
highest skilled among our labor force.
But rather than take the successes of the U.S.-Jordan Fair Trade
Agreement, which was heralded by labor and environmental organizations,
as the new model for trade agreements, the Bush administration is
taking us down the path of further job losses and more degradation of
our environment.
Chile's Free Trade Agreement contains only one enforceable provision
on workers rights, and it is a hollow, hollow obligation that each
country, get this, each country must enforce but not necessarily
maintain its own domestic labor laws. If they change their domestic
labor laws, that is all they have to do. If they eliminate their
domestic labor laws, this fair trade agreement acknowledges that and
ignores the fact that there will no longer be any workers rights.
It pays lip service to upholding the International Labor
Organization's core worker rights and to not weaken its domestic labor
laws, but then both these provisions are expressly excluded from
coverage in the dispute settlement chapter. Hence, the Chile Fair Trade
Agreement contains virtually no labor standards because any worthwhile
labor standard is not enforceable.
The U.S. cannot afford to go down the road of further job losses with
the Chile FTA and the Singapore FTA or any other future trade
agreements.
It is anticipated that 3.5 million white collar jobs and $136 billion
in wages will shift from the United States to low-cost countries in the
next 10 years. So all of those, in addition to the 100,000 high-tech
jobs we have already lost in California, Silicon Valley, those jobs
will become obsolete under the Bush administration's course for free
trade. It will not just be IT jobs. We will see a shift in financial
service jobs, research and development jobs, service call center jobs
and insurance jobs.
Then we get to the new immigration visa program established in the
Chile FTA, and it will exacerbate the loss of white collar jobs here.
The current H-1B visa program, kind of an enforced slavery program that
was written at the behest of the Silicon Valley corporations, is a
program of a 3-year temporary work visa renewable one time. So it is a
6-year program. The new visa program will allow an indefinite renewal,
time after time, for 1,400 nationals from Chile.
U.S. college grads will increasingly see a future in flipping
hamburgers and

[[Page H7472]]

waiting on tables, while college grads from overseas will increasingly
see good-paying white collar jobs in their future.
The U.S.-Chile Free Trade Agreement is nothing more than a model, a
template, an excuse for the Bush administration to diminish labor
standards here in the United States. Furthermore, it sets a dangerous
precedent as a model for current negotiations with Central America and
the Western hemisphere, and I am sorry for my colleagues who think we
are going to do something different in Central America. They are just
wrong.
We cannot trust the U.S. Trade Representative or the Bush
administration to do the right thing. We know it. They behave like
China. If we want to get them to do the right thing, we must stop them
here before they strike again and diminish more labor standards. It is
time for us to stand up, defend the few good-paying jobs we have left
in this country and demand the administration go back to the drawing
board and include enforceable labor language in the Chile FTA.
I urge my colleagues to oppose H.R. 2738, the implementing language
for the U.S.-Chile Free Trade Agreement.
Mr. Speaker, I reserve the balance of my time.
Mr. SENSENBRENNER. Mr. Speaker, I rise to claim the time for the
Committee on the Judiciary.
The SPEAKER pro tempore. The gentleman from Wisconsin (Mr.
Sensenbrenner) is recognized for 10 minutes.
Mr. SENSENBRENNER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, both the U.S.-Chile and U.S.-Singapore Free Trade
Agreements contain several important provisions within the purview of
the Committee on the Judiciary. Both agreements contain competition
clauses that ensure antitrust laws are applied in a neutral,
transparent and nondiscriminatory manner while safeguarding basic
procedural rights.
The agreements also contain robust intellectual property protections,
requiring the governments of Chile and Singapore to take affirmative
steps to eradicate the piracy of trademarks, patents, satellite
television rights and other forms of intellectual property. These
intellectual property provisions are widely supported and are likely to
serve as a model for future free trade agreements. The intellectual
property and antitrust provisions required no substantive changes to
U.S. law and thus are not within the text of the implementing
legislation before the House today.
For the last several years, I have woefully and repeatedly expressed
concern about substantive changes to U.S. law contained in free trade
agreements. Before passage of the Trade Promotion Authority Act,
immigration provisions were included in earlier free trade agreements
such as NAFTA without formal consultation with Congress. This
regrettable practice created precedent for subsequent trade agreements,
and immigration provisions were included in both the Chile and
Singapore Free Trade Agreements before the elevated consultation
requirements created by the Trade Promotion Authority were enacted last
year.
Mr. Speaker, article I, section 8, clause 3 of the Constitution gives
the Congress plenary authority over matters pertaining to immigration
and naturalization. During the Committee on the Judiciary's mock markup
of this legislation, I, the gentleman from Michigan (Mr. Conyers), the
ranking member and several members of the committee spoke with a united
and bipartisan voice and declared that immigration provisions in future
free trade agreements will not receive the support of the Committee on
the Judiciary. Plainly stated, the Committee on the Judiciary will
oppose any future free trade agreement that contains substantive
changes in immigration law.
Following the markup, the gentleman from Michigan (Mr. Conyers), the
ranking member, and I transmitted a letter to the United States Trade
Representative that reaffirmed Congress' exclusive constitutional
mandate to consider immigration law. An additional letter was sent by
other members of the committee and several Members of the Congress not
on the committee echoing this bipartisan commitment. This was sent to
the Trade Representative.
Mr. Speaker, the Committee on the Judiciary's July 10 preintroduction
markup of this legislation was a mock markup in name only. At the
markup, the committee reported several substantive amendments to the
draft we were furnished, and these were incorporated into the
legislation which we consider today.
First, while the draft implementing legislation created a separate
visa category for skilled workers from Chile and Singapore, the
Committee on the Judiciary amended the Immigration and Nationality Act
to ensure that these visas, 6,800 in total, are now deducted from the
national H-1B visa cap at the time they are issued and when they are
renewed after five or more prior extensions.
The committee also reported an amendment to ensure that every second
extension of temporary status for citizens of Chile and Singapore be
accompanied by a new employer attestation to ensure that an employer
updates the prevailing wage determination after each second application
for extension.
In addition, the committee approved an amendment that requires an
employer to pay a fee equal to that charged to an employer petitioning
for H-1B visa status whenever a temporary exit visa is granted and
after every second extension of that status.
Finally, H.R. 2738 and H.R. 2739 now explicitly state that an
employer generally cannot sponsor an alien for an EL or H-1B1 visa if
there is any labor dispute occurring in the occupational classification
at the place of employment, regardless of whether the labor dispute is
classified as a strike or a lockout. In this regard, title IV of both
bills provides greater worker protection than that presently contained
in the H-1B program.
The committee's commitment to ensuring that its amendments were
incorporated into the introduced bills we consider today dramatically
enhanced the quality of the legislation and recaptured a crucial
prerogative of the Congress. It is my hope and expectation that the
Committee on the Judiciary's clarion call over the last 2 weeks that
immigration provisions be excluded from future trade agreements will be
clearly received by this and future administrations.
Given the leadership of Ambassador Zoellick, his proven commitment to
working with Congress on a cooperative and constructive basis that
fully respects the constitutional prerogatives of this body and the
dedication and professionalism of his staff, I have great confidence
that the will of Congress will not be ignored.

{time} 1045

Mr. Speaker, reducing barriers to U.S. exports is crucial to
restoring America's economic vibrancy. U.S. products containing
intellectual property continue to lead America's exports, and it is
incumbent upon this body to ensure that foreign governments stamp out
the rampant piracy that costs America and Americans several billion
dollars a year.
Strong safeguards in these agreements will ensure that the
governments of Chile and Singapore create criminal sanctions to punish
intellectual property theft with the seriousness and severity that it
demands. In addition, the antitrust provisions will ensure that these
governments do not rely on the increasingly common foreign practice of
manipulating antitrust laws to discriminate against American
businesses.
Mr. Speaker, the Chilean-Singapore Free Trade Agreements contain
critical market-opening provisions which will expand commercial
opportunities for America's farmers and dairy producers and ensure that
the United States continues to lead the world in exports. These
agreements also advance America's broader strategic interests by
liberalizing trade with two key economic allies which serve as regional
models for neighboring countries.
For the reasons I have outlined, Mr. Speaker, I urge my colleagues to
support this legislation.
Mr. Speaker, I reserve the balance of my time.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise to claim the time of
the Committee on the Judiciary.
The SPEAKER pro tempore (Mr. Hefley). The gentlewoman from Texas

[[Page H7473]]

(Ms. Jackson-Lee) is recognized for 10 minutes.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I yield myself such time as I
may consume.
Mr. Speaker, I believe we might have been on another journey if the
USTR had responded to the concerns of many of us in a more constructive
and readily solvable fashion. The Committee on the Judiciary stands as
the monitor of the Constitution, and it is clear that the issue of
commerce is designated in the Constitution. But it is also clear that
in the Constitution, under Article 1, Section 8, Clause 4 of that
document, it provides that Congress shall have the power to establish a
uniform rule of naturalization.
The Supreme Court has long found that this provision of the
Constitution grants Congress plenary power over immigration policy.
Moreover, the Court has found that the formulation of policies
pertaining to the entry of aliens and their right to remain here, as
entrusted exclusively to Congress, has become as firmly embedded in the
legislative and judicial tissues of our body politics as any aspect of
our government. Nonetheless, the administration has negotiated a new
visa program in the U.S.-Singapore-Chile FTA usurping Congress' clear
and constitutional role in creating immigration law.
Mr. SENSENBRENNER. Mr. Speaker, will the gentlewoman yield?
Ms. JACKSON-LEE of Texas. I yield to the gentleman from Wisconsin.
Mr. SENSENBRENNER. Mr. Speaker, I ask unanimous consent that the
balance of my time be yielded to the gentleman from Utah (Mr. Cannon)
and that he be allowed to yield time to other Members.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Ms. JACKSON-LEE of Texas. Reclaiming my time, Mr. Speaker, we want to
be friends with all of those very fine neighbors and nations across the
ocean, but I believe that the USTR made a terrible mistake in
implementing FTA, which many of us questioned, by delving into
authority that should be left to this Congress. The USTR should not
have included immigration provisions in both of these trade bills. The
inclusion of immigration provisions overstepped the bounds of the USTR
and usurped the jurisdiction of the Committee on the Judiciary.
Many of us reached out to the USTR in order to analyze ways of
retracting some of those negotiated provisions in the trade agreement.
Through their stubbornness, they refused to meet or to agree to any of
these provisions. Let me give an example.
We have about 8 million undocumented aliens in the United States.
Many of us have argued vigorously that we should find a way through the
Congress, legislatively, to allow those undocumented individuals who
are working, who are paying taxes, to access legalization. In this
trade bill, we have a perpetual unlimited visa process that will allow
any of those citizens from those countries to stay in the United States
forever.
Now, Mr. Speaker, I did not say 1 year, 2 years, or 3 years, I said
forever, with an annual renewal. No review by this Congress at all. So
rather than come in, try to establish legal permanent residency, all
you have to say is that you are coming in under this particular visa
provision, and each year you are allowed to renew it.
We simply asked for there to be a capping of 8 years, to at least
have the ability, if we are supposed to be concerned about homeland
security, securing of this Nation. We now have a gaping new hole that
someone can go through to apply for this kind of visa, through certain
processes, and stay in the United States forever. Forever, Mr. Speaker.
Negotiating objectives that the Congress laid out for the USTR in the
Trade Act of 2002 do not include a single word on entry into the United
States. That was my fear about Fast Track Authority. That is what we
should be concerned about.
I understand what trade agreements are about. They are a deal. It is
that simple. Plain and simple, they are deals. You sit on this side of
the table, they sit on that side of the table, and you make a deal. And
the dealmakers do not want anyone to oversee the deal so they can slip
anything in without any ability of this Congress to oversee it.
What they have done is slipped in a perpetual visa status that no one
can oversee. There is no specific authority in the TPA to negotiate new
visa categories or to impose new requirements on our temporary entry
system, yet that is exactly what the USTR has done in these trade
agreements. The trade agreements create a new visa classification for
the temporary provision of a nonprofessional that is similar in many
respects to the existing H-1B nonimmigrant classification.
The new nonimmigrant visa classifications, however, would differ from
the existing H-1B program in significant ways. The provisions for the
new nonimmigrant visa permit allow an unlimited number of extensions in
1-year increments. This makes it possible for a foreign employee
entering the company on a supposedly temporary basis at the age of 22
to remain until he or she is ready to retire at the age of 70. This is
with the backdrop of 6.4 million that are unemployed and with the
backdrop of companies like IBM, just reported in the newspapers,
outsourcing a number of their jobs, maybe upwards of 3,000 per company,
outsourcing them from the United States to places beyond its borders.
In effect, this gives American employers the option of keeping
permanent workers in a temporary legal status forever and ever and
ever. In contrast to the H-1B program, workers are granted a 3-year
visa that can be extended only once. And maybe some of us believe there
should be more flexibility, but at least there is an end time. A single
3-year extension is available, but there is an end time.
The labor certification attestation is one of the few safeguards we
have in our H-1B system for ensuring that employers do not abuse
temporary workers and undermine the domestic labor market. The
implementation legislation contains some but not all of the attestation
requirements that apply in our H-1B program. The implementing
legislation completely omits the category of H-1B independent employers
and the additional attestation requirements that apply to them.
The problem we have here, Mr. Speaker, is the fact that we have
legislation that includes boundaries beyond that of the USTR. They
should not have trampled on the rights of this Congress regarding the
issues of immigration, and I would argue that for that very reason this
bill has an Achilles heel and should be defeated.
I will begin by saying that I value the trade relations that the
United States has with Chile. Although Chile was only our 36th largest
trading partner in goods in 2002 (with $2.6 billion in exports and $3.8
billion in imports), Chile has one of the fastest growing economies in
the world. Its sound economic policies are reflected in its investment
grade market ratings, unique in South America. Over the past 15-20
years, Chile has established a thriving democracy, a free market
society and an open economy built on trade. I support trade with Chile.
My concern is with the details of the trade agreement. The U.S. Trade
Representative (USTR) should not have included immigration provisions
in the Chile Free Trade Agreement. The negotiating objectives that
Congress laid out for the USTR in the Trade Protection Act of 2002
(TPA) do not include a single word on temporary entry into the United
States. There is no specific authority in the TPA to negotiate new visa
categories or to impose new requirements on our temporary entry system,
yet that is exactly what USTR has done in the Chile Free Trade
Agreement.
The inclusion of immigration provisions overstepped the bounds of the
USTR and usurped the jurisdiction of the Congress. Article I, section
8, clause 4 of the Constitution provides that Congress shall have the
power to establish a uniform Rule of Naturalization. The Supreme Court
has long found that this provision of the Constitution grants Congress
plenary power over immigration policy. The Court has found that the
formulation of policies [pertaining to the entry of aliens and their
right to remain here] is entrusted exclusively to Congress has become
as firmly embedded in the legislative and judicial tissues of our body
politics as any aspect of our government. Nonetheless, the
Administration has negotiated a new visa program in the Chile Free
Trade Agreement; usurping Congress' clear constitutional role in
creating immigration law.
The Chile Free Trade Agreement creates a new visa classification for
the temporary admission of nonimmigrant professionals that is similar
in many respects to the existing H-1B nonimmigrant classification. The
new nonimmigrant visa classification, however, would

[[Page H7474]]

differ from the existing H-1B program in significant ways.
The provisions for the new nonimmigrant visa permit an unlimited
number of extensions in 1-year increments. This makes it possible for a
foreign employee entering the country on a supposedly temporary basis
at the age of 22 to remain until he is ready to retire at the age of
70. In effect, this gives American employers the option of keeping
permanent workers in a temporary legal status. In contrast, under the
H-1B program, workers are granted a 3-year visa that can be extended
only once. A singe 3-year extension is available.
The Labor Certification Attestation is one of the few safeguards we
have in our H-1B system for ensuring that employers do not abuse
temporary workers to undermine the domestic labor market. The
implementing legislation contains some, but not all, of the attestation
requirements that apply in our H-1B program.
The implementing legislation completely omits the category of H-1B
dependent employers and the additional attestation requirements that
apply to them. H-1B dependent employers are required to attest that new
entrants will not displace American workers and demonstrate that they
have tried to recruit American workers. The implementing legislation
should have a similar provision.
In addition, the H-1B program authorizes the Secretary of Labor to
initiate her own investigations and enforcement proceedings based on
credible information that an employer is violating the rules of the H-
1B program. No such authority is granted to the Secretary in the Chile
Free Trade Agreement's implementing legislation.
The Chile Free Trade Agreement requires permanent changes to our
immigration system, but for now these changes are limited to two
countries. Unfortunately, we may see these programs expanded to dozen
of additional countries in future Free Trade Agreements. The
administration is currently negotiating additional Free Trade
Agreements with Australia, Morocco, five countries in Southern Africa,
five countries in Central America, and the 34 countries of the Western
Hemisphere.
Immigration policy is a sensitive, political matter. Changes in
immigration law traditionally have been the result of intense, open
negotiations between workers, employers, immigration advocates, and
Members of Congress. These issues simply do not belong in fast-tracked
trade agreements negotiated by executive agencies. Because the
legislation is being fast-tracked, Congress does not have the power to
amend it. We have to vote on it as written with no power to make any
changes.
If amendments had been permitted, I would have offered one to put a
limit on renewals. My amendment would have permitted no more than eight
1-year renewals of the nonimmigrant status. That would have permitted a
9-year period, which would be 50 percent longer than is allowed for
employees who are here with H-1B status.
I also would have offered an amendment that would have used part of
the fees generated by the new visa classification for accelerating the
processing of nonimmigrant visas by the State Department's consulate
offices. Delays in processing nonimmigrant visas are causing difficulty
to people coming to the United States for medical treatment, to do
important research, or for any of a number of other urgent reasons.
I urge you to vote against the U.S.-Chile Trade Agreement
Implementation Act, H.R. 2738.
Mr. Speaker, I reserve the balance of my time.
Mr. CANNON. Mr. Speaker, I yield myself such time as I may consume,
and I rise to speak in favor of the United States and Chile Free Trade
Agreements.
Mr. Speaker, I appreciate the fact the administration has worked
closely with the gentleman from Wisconsin (Mr. Sensenbrenner) and other
members of the Committee on the Judiciary on the legislation to
implement the temporary entry provisions that are included in the
Singapore and Chile Free Trade Agreements.
The bill language relating to the temporary entry of professionals
was carefully crafted to track the H-1B program, therefore ensuring
that Chilean professionals fall under the H-1B cap and that comparable
fees can be charged and that the labor attestations for these visas are
modeled after the H-1B program.
The temporary entry of professionals, who must have bachelor degrees
or more advanced degrees, facilitates trade and services which
currently account for 65 percent of the U.S. economy. The international
mobility of business professionals has become an increasingly important
aspect of competitive markets for suppliers and consumers alike.
Facilitating the movement of professionals allows trade partners to
more efficiently provide each other with services, such as
architecture, engineering, consulting, and construction. It has been
customary to include such provisions in trade agreements as a part of
the services chapter, and the U.S. service providers are very
supportive of these provisions.
The current U.S. Trade Representative inherited the Chile agreement
from the prior administration, and this USTR has consulted very closely
with Congress on negotiations on the agreement last year and on the
implementing legislation in recent weeks, including on temporary entry
of professionals. I know the USTR appreciates this consultation process
on these sensitive issues. The USTR has continued to consult with
Congress on trade agreements now being negotiated, including the
Moroccan Free Trade Agreement, the Central American Free Trade
Agreement, the Australia FTA, and the Free Trade Area of the Americas,
and none of these agreements currently includes provisions on the
temporary entry of professionals.
Over the past few weeks, Congress has sent a clear message asking
USTR to discontinue the practice of including such provisions in these
agreements. I know the USTR listens closely to Congress, and I am
confident that we will continue to have opportunities to work closely
with Ambassador Zoellick and his team in ensuring that the best
possible free trade agreements are achieved.
Congress' goal, however, is not to become the U.S. trade negotiator
itself but to be a close partner in the overall process. Recent
consultations with the administration on the Chile agreement shows that
this partnership is beneficial and can work. Let us not take a step
backward at this crucial time. I urge my colleagues to support this
agreement.
Mr. Speaker, I reserve the balance of my time.
The SPEAKER pro tempore. The gentleman's time has expired.
Ms. JACKSON-LEE of Texas. Mr. Speaker, may I inquire of the Speaker
how much time we have remaining?
The SPEAKER pro tempore. The gentlewoman from Texas has 2 minutes
remaining.
Ms. JACKSON-LEE of texas. Mr. Speaker, I yield 1 minute to the
gentleman from New Jersey (Mr. Pascrell).
Mr. PASCRELL. Mr. Speaker, I thank the gentlewoman from Texas for
yielding me this time.
Mr. Speaker, the Statue of Liberty speaks out very clearly, if
anybody has been to this great monument. And from the poem ``The New
Colossus,'' at the bottom, the 19th century American poet Emma Lazarus
writes, ``Give me your tired, your poor, your huddled masses yearning
to breathe free, the wretched refuse of your teeming shore. Send these,
the homeless, tempest-tossed, to me. I lift my lamp beside the golden
door.''

{time} 1100

What has happened to us, in a country where we continue to export
jobs and import workers? This issue is at the very center of the
economy of this country. We will never have recovery until we address
it, Mr. Speaker.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I yield myself the balance of
my time.
Let me conclude by simply saying this. This legislation again has
trampled on the constitutional rights delineated for this Congress as
it relates to immigration policies. This bill does not even have the
provision that says that you need to attest that there are no American
workers that can do this job before you give this perpetual visa.
When we tried to get a revenue stream for the visa fees in order to
unclog the backlog of visas in our consul offices around the world, for
researchers and people who need medical care, we could not even get
that established. The USTR has trampled on our rights.
Fast track should not undermine the Constitution. This is a bad trade
bill, a bad precedent, and if this Congress does not stand up to its
right to protect the American people, who will?
I ask my colleagues to vote against this. They need to go back to the
drawing boards, back to the deal-making, and if need be, you need to
have Congress sit at this table so that you do not trample on our
rights and begin to

[[Page H7475]]

put in immigration policies that discriminate against hard-working
immigrants who are here in this country seeking legal status, who
cannot seek legal status because of our policies, yet you can be
overseas, staying overseas, look up, get a visa and never leave this
country.
If we are concerned about security, if we are concerned about
homeland security, if we are concerned about protecting ourselves
against terrorism, what a big, gaping hole.
This is a bad trade bill. I ask my colleagues to vote against it.
The SPEAKER pro tempore (Mr. Hefley). All time for the Judiciary
Committee portion of the bill has expired.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
There is no question that we should rightly be concerned about
traditional industries, manufacturing and the changing world and the
United States relationship to that changing world. And I do believe
that there will be some free trade agreements that will come before us
when the concern about manufacturing is front and center. But one of
the important things about the agreement that is in front of us today,
the U.S.-Chile Free Trade Agreement is, first of all, I consider this
agreement old business, not new business.
Secondly, I just have to tell you, as someone who represents
California and, more particularly, the great Central Valley of
California in which when I am back home, and I am greatly anticipating
that in less than a week, in the morning the sun comes up over the
snowy Sierra Nevadas.
As most of you know, Mount Whitney at 14,500 feet is the highest
mountain in the continental 48 States. The Central Valley is the single
richest agricultural area in the world. When the sun goes down, it goes
down over the Pacific Ocean. If you have the opportunity, as I have, to
be able to go to Chile, you will find that the geography, the
topography is literally exactly the same.
One of the things that is important about this agreement is that it
is a world-class agreement in the area of agriculture. Where many times
people use nontariff barriers, argue sanitary or phytosanitary reasons
for not allowing the free movement of agricultural products, what we
have here is an opportunity to show the rest of the world how it ought
to be done.
What I am hearing from people is, why should we enter into this
agreement? I guess my response is, why not? It is true that we are
trading the entire internal market of the United States for a market
about the size of L.A. County.
But the fact of the matter is, Chile has not waited for us, no matter
how close our friendship is. They have moved on in the world. They have
free trade agreements with other countries who are more than willing to
supply the products that we would love to supply, and no matter how
close the friendship, if the price is not right, if the structure is
not right, they are going to trade with people who are smart enough and
wise enough to create a more comfortable trading arrangement.
We are doing this for us, not for Chile. But let me tell you, the
U.S. consumer has benefited from this relationship.
Just as I described the geography of California and the geography of
Chile, they may be the same, but when you look at them on the globe,
they are on opposite sides of the equator, which means we are able to
produce the same agricultural products but at a different time of the
year. There is a seasonal complementariness to the agriculture on what
would otherwise be directly competing products that creates a positive
for the American consumer. Just one product, table grapes, currently if
you go down to your market, you will find fresh table grapes and
especially the new varieties that are seedless and they will be in a
bag which says ``Product of USA.'' But if you go to that same market in
November or December or January or February, you will find what looks
like exactly the same product in a bag and it will say ``Product of
Chile.''
What we used to do in the old days was when the growing season was
over, we would throw the grapes in cold storage, 4 months later we
would drag them out and, as you might expect, consumer demand and
interest was pretty low. Today, we can supply 12 months out of the year
a fresh product where there is not the kind of conflict that would
otherwise occur.
We benefit, the Chileans benefit from the primary focus of
agriculture in an agreement that is world class, but beyond that,
allows us to go to the market in Chile and offer a product in
competition with other countries. But this time we do so under a free
trade agreement. And when you have an opportunity to trade under the
same economic relationship, then the question is, if there is no
difference in terms of economics, why not trade with a friend rather
than someone else? That is what this free trade agreement is all about.
Mr. Speaker, it is now my pleasure to yield 3 minutes to the
gentlewoman from Washington (Ms. Dunn), but prior to that, I yield my
time to the gentleman from Illinois (Mr. Crane), chairman of the
Subcommittee on Trade, and ask unanimous consent that he have the
ability to disburse the time as he may see fit.
The SPEAKER pro tempore (Mr. Quinn). Is there objection to the
request of the gentleman from California?
There was no objection.
Ms. DUNN. Mr. Speaker, it is indeed a pleasure to speak on behalf of
this agreement. It has been a long time coming. I am delighted to be
here on the floor supporting it.
This is the first comprehensive free trade agreement between the
United States and a major South American country. Passing this trade
agreement will help American businesses and farmers gain better access
to foreign markets.
Currently, Chile already has a trade agreement with the European
Union, with Mexico and Canada, but not with the United States. As a
result, American businesses and farmers do not enjoy the same
preferential benefits and advantages that their counterparts in these
countries do. Of course, that results consistently in our losing
contracts to Canada, the EU and Mexico because we must pay the 6
percent tariff in Chile since we do not have an agreement and they, of
course, pay nothing which makes the cost of their goods and services
much less.
By leveling the playing field, this trade agreement will ensure that
85 percent of United States consumer and industrial products will
receive tariff-free treatment in Chile immediately. For our farmers,
over 75 percent of agricultural goods exported to Chile will be duty-
free within 4 years. Furthermore, both nations renewed their commitment
to continuing to work on resolving sanitary and phytosanitary issues so
that artificial barriers will no longer be used to inhibit legitimate
trade.
For the people I represent in the Pacific Northwest, this trade
agreement will require Chile to comply with intellectual property
rights protections beyond the current international standards and will
improve enforcement against piracy and counterfeits. It is my hope that
the IPR provisions in this agreement will be a model for our efforts
with the Central American FTA and the impending Free Trade Area of the
Americas negotiations.
This agreement is not only about expanding market access; it also
reflects our commitment to strengthen our relationship with our friends
and our neighbors in South America. It will also underscore our
commitment to move forward with a hemispheric free trade agreement
through the FTAA. While two-way trade between our nations was only $6.4
billion last year, this agreement will help to expand foreign
investment that will strengthen both our economies.
I urge passage of this bill.
Mr. LEVIN. Mr. Speaker, I yield myself such time as I may consume.
Clearly, the Chile and Singapore Free Trade Agreements have many
strong provisions, including comprehensive commitments by Chile and
Singapore to open their goods, agricultural and services markets. This
will be beneficial to American businesses, workers and farmers,
commitments that will increase regulatory transparency and act to the
benefit of U.S. investors, intellectual property holders, businesses,
workers and consumers.
So what is the major source of controversy, especially since the
economic impact of the two agreements combined will account for less
than one-

[[Page H7476]]

quarter of 1 percent of U.S. GDP? I believe that it is mainly the
potential and the existing inappropriate use by this administration of
provisions in these agreements as models for other agreements.
For example, the Singapore FTA includes an integrated sourcing
initiative. As first drafted, ISI would have allowed in listed
instances components from any country in the world imported directly
into Singapore to be treated as Singapore content, i.e., Singapore as a
proxy for other nations not signatory to the FTA. This local content
feature has been restricted through amendments to the agreement and by
this legislation at our instigation, making it difficult to use as a
practical matter. And, importantly, Democrats took the initiative to
prevent any expansion of the ISI list without congressional approval.
These efforts should send a clear message: Do not negotiate a similar
provision in any future FTA.
Second, both agreements contain provisions relating to the temporary
entry of nationals which required the creation of a new H1B visa
program for workers from these countries. We were able through the
implementing legislation on a bipartisan basis to significantly tighten
these provisions. As a result, they are not now, in my judgment, a
sufficient reason to vote against these agreements. But in this day and
age of heavy loss of American jobs, the changes insisted on by this
House must send a clear message to the administration not to negotiate
immigration provisions in future FTAs, especially where the number of
such visas involved would be larger without the active involvement of
Congress.
Third, both agreements contain separate dispute settlement rules that
place arbitrary caps on the enforcement of the labor and environmental
provisions. This is a mistaken approach, the difficulties of which
would only be magnified if used as a precedent for future FTAs
involving very different circumstances.
Fourth, while substantial progress was made in the critical area of
investment, these agreements should not be a model for all future FTAs.
Additional steps should be included in future trade negotiations to
ensure fully that foreign investors have no greater rights than U.S.
citizens have under U.S. law.
Fifth, of great concern about these agreements is the actual use by
USTR in the ongoing Central American negotiations of the ``enforce your
own laws'' standard in the Singapore and Chile FTAs relating to basic
labor standards. The laws of Chile and Singapore incorporate five
internationally recognized core labor standards, prohibition against
child labor, forced labor, discrimination, and, vitally, the right to
associate and bargain collectively; and they basically enforce them,
though there are cultural differences in their doing so.
In clear contrast to Chile and Singapore, the laws of most Central
American countries irrefutably do not embody these five standards and
the inadequate laws that exist are poorly enforced. Indeed, there is a
pervasive antiworker-rights culture that prevents workers from getting
a livable piece of the economic pie and climbing the economic ladder to
the middle class.

{time} 1115

So use of an ``enforce your own law standard'' where opposite
conditions exist is a contradiction that would lead to contradictory
results.
Central America does not need to suppress its workers to compete. To
say that it does, whether with neighbors or with China, is untrue, and
such an argument only gives ammunition to those who say that expanded
trade, indeed globalization, inevitably leads to helping the rich and
continuing to exploit the poor.
CAFTA is the real test and provides a real opportunity to shape
expanded trade so that it leads to a leveling up, not a leveling down,
with FTAA following next. So there is not a race to the bottom. So
people in developing nations, as is basically true now in Chile and
Singapore, can move up the ladder. So it is clear to workers in our
Nation that when they compete, it is not with workers in other nations
suppressed of their basic rights to associate and bargain together to
get a decent piece of the economic action.
There are two ways to respond to this situation.
One is to acknowledge the many positives in these agreements, voting
a green light while making very clear a red light against
misapplication of Chile and Singapore to CAFTA, FTAA, and other future
agreements where the conditions are very different. Different
conditions, different agreements. Or, to vote ``no.''
My judgment is that the message is more clear, the distinctions
between different situations remain starker and less blurred, and
efforts to make these distinctions more likely to succeed with a
``yes'' vote in the manner described above. Either way, there must be a
similar message: Do not negotiate an agreement with Central American
nations on the assumption that conditions are like those in Chile or
Singapore when they are not.
We oppose such efforts. They would not lead to the breakthroughs that
Central American or FTA nations need in access to U.S. markets. They
would result, in my judgment, in the eventual defeat of CAFTA. And they
would throw away an opportunity, a major opportunity for those Central
American nations and others, and for ours, and an opportunity to move
U.S. trade policy forward, with the broad base of support necessary for
a healthy future for expanded trade.
Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I am pleased to yield 3 minutes to the
gentleman from Ohio (Mr. Brown).
Mr. BROWN of Ohio. Mr. Speaker, where I come from, trade is a 4-
letter word: J-O-B-S. Unfortunately, this Congress, this U.S. Trade
Representative, and this President do not spell very well.
In the 2\1/2\ years since George Bush became President, we have lost
3.1 million jobs in this country, we have lost 2.1 million
manufacturing jobs in this country, and President Bush's answer is,
more tax cuts for the wealthiest Americans, more cuts in services to
veterans, to education, to health care, and more flawed trade
agreements. There was fast track, and now there is Singapore and Chile.
American workers understand these trade agreements do not work. We
have lost 2.1 million manufacturing jobs in 2\1/2\ years. American
workers understand that NAFTA has failed. Ten years ago when NAFTA
passed, we had a $1.7 billion surplus with Mexico and Canada. Today, 10
years later, we have a $25 billion deficit with Canada and Mexico.
American workers understand that our China trade policy does not
work. A dozen years ago we had a $100 million trade deficit with China.
Today, under these failed policies, for a decade we have had a $100
billion trade deficit with China, and growing.
President Bush, Sr., told the American people that for every billion
dollars in trade surplus or trade deficit, it meant 18,000 jobs. That
means that our trade deficit with China every year costs us 1.8 million
jobs. Yet we continue the same failed trade policies that hemorrhage
American jobs.
In 1992, the U.S. had a $38 billion trade deficit. Today, it is a
$418 billion trade deficit. We had a bigger trade deficit in May of
this year than we had for the entire year 11 years ago.
And white collar workers are next. The New York Times said IBM's top
employee relations executive said 3 million service jobs will be gone
by 2015, 3 million more. These are white collar: 3 million more jobs
lost.
American workers, as I said, understand that these trade agreements,
these failed trade policies hemorrhage American jobs.
Two years ago, President Clinton and the Congress finally figured it
out. We passed a trade agreement, the Jordan Trade Agreement, that
lifted up environmental labor standards, lifted up standards, lifted up
people's lives, promoted American values rather than pulling down labor
standards and pulling down environmental standards. Now President Bush
has brought us back to the same failed NAFTA policies. That is what
this Chile trade agreement is about.
The worst part is the Bush administration has announced that these
agreements with Chile and Singapore will serve as the model for future
trade agreements such as the Central American Free Trade Agreement,
CAFTA, and the Free Trade Agreement of the Americas. They will serve as
the model

[[Page H7477]]

for these next huge trade agreements that will hemorrhage even more
jobs.
The administration impact report on the Singapore Free Trade
Agreement, which we will debate next, estimates that we will lose
22,000 manufacturing jobs.
That is the problem. This trade policy is continuing to hemorrhage
American jobs.
Mr. CRANE. Mr. Speaker, I yield 3 minutes to my distinguished
colleague, the gentleman from Illinois (Mr. Weller).
Mr. WELLER. Mr. Speaker, let me first indicate my strong support for
this trade agreement with our friend and ally, the nation of Chile, a
longtime democracy, a longtime ally; and clearly, I am one who believes
that if you believe in freedom and democracy, you believe in free
trade.
This historic agreement that we have between our Nation and Chile to
reduce trade barriers and open up opportunities for Illinois
agriculture and Illinois business and Illinois workers to sell products
is a big step forward.
I want to focus on a very key portion of this trade agreement with
the nation of Chile and our country, and that is, this trade agreement
recognizes that today, in our economy, our global economy, that we are
in a digital age, and that we exist in a digital global economy.
Our Nation's largest exports are in entertainment and technology,
important industries for the State of Illinois. We are concerned about
the rights of those who create music, entertainment, software, and
technology products, and we are concerned about manufacturers' patents.
This agreement is an historic agreement because it includes, clearly,
one of the highest levels of intellectual property rights protections
that we have ever had in any trade agreement with any other nation. It
is just one more reason why we should all support, in a bipartisan way,
this trade agreement with the nation of Chile.
We have a high level of intellectual property rights protections. We
protect trademarks in this legislation, state-of-the-art protections in
this digital age. We also protect copyrights, protecting copyrights in
the digital economy, protections from piracy.
We often think about it. Here in the Americas, particularly in Latin
America, we have seen cases where there is an incredible amount of
piracy and an incredible amount of counterfeiting of intellectual
goods, music and entertainment and films and software; and that is a
tremendous loss to the artists, to the creators, to those who came up
with that idea and that product. But if we are concerned about those
workers, we ought to ensure that they get the benefits of the fruits of
their labors. If we do not provide for additional protections for
intellectual property rights, those involved in piracy, some are even
associated with terrorist organizations, will continue to have that
niche where they take away the rights of our workers.
This is historic legislation that is before us today, protecting
intellectual property rights as well as the patent rights for our
American businesses, as well as our American workers.
I would note that Illinois, of course, is a major manufacturer of
pharmaceutical products and also is a major manufacturer of
agricultural chemicals. Again, this legislation provides strong
protections for the copyrights and patents that protect our industries
in Illinois.
Last, of course, it is one thing to say we are going to agree to
protect them; the other key part is what are we going to do to enforce
these intellectual property rights? Clearly, this agreement that we
have with the nation of Chile provides tough penalties which they agree
to implement on those who commit piracy and counterfeiting.
This legislation deserves bipartisan support.
Mr. LEVIN. Mr. Speaker, it is my pleasure to yield 3 minutes to the
gentleman from Washington (Mr. McDermott), my distinguished colleague
on the Committee on Ways and Means.
Mr. McDERMOTT. Mr. Speaker, today's votes are not about the merits of
liberalizing or opening up foreign markets to American goods and
services. Democrats and Republicans both support doing that because
over 90 percent of our consumers live outside the United States
borders.
I represent a congressional district whose economy relies heavily on
exports, but my district is also deeply concerned about the process by
which economies liberalize and the effects these liberalizations have
on working families and the environment in which they live.
Process is very important. Read James Madison. The rules that the
Congress laid out in the fast track bill were not met. Fast track
requires the U.S. Trade Representative to consult with several private-
sector advisory committees to seek their opinion about trade
agreements, but Mr. Zoellick refused to provide these committees with
the final text of the agreements before they were required by law to
respond. Many on the committees voiced frustration over this.
One committee, the Advisory Committee on Services, had this to say
when they submitted their final analysis of the Singapore agreement:
``It should be noted that our members were challenged by the lack of
available text during the 30-day period we had to conduct this analysis
and write this report.''
Mr. Speaker, after EarthJustice represented several environmental
groups in court to seek the release of documents used in the U.S.-Chile
negotiations, a district court ruled that the U.S. Trade Representative
was wrong to deny Americans these documents. After that ruling, instead
of opening up, the Inside U.S. Trade article which I offer for the
Record says, ``The Office of the USTR is now formally classifying
negotiating texts and related documents as exempt from the Freedom of
Information Act requests on national security grounds as a part of an
overall effort aimed at tightening the flow of information on trade
policy between the executive branch and the private sector.''
The Congress needs more time, not less. We do not need obstruction
from the USTR. I believe that our Founding Fathers wanted it to be an
open process. For that reason, I suggest that we reject this document
and we will go back to the drawing boards. Mr. Zoellick has to follow
the law. Let people have the information. Do not hide behind secrecy on
national security grounds.
Mr. Speaker, I will enter in the Record at this point an article from
Inside U.S. Trade, dated April 25, 2003.
Mr. CRANE. Mr. Speaker, I yield 2 minutes to the gentleman from Texas
(Mr. Hensarling).
Mr. HENSARLING. Mr. Speaker, I thank the gentleman for yielding me
this time.
Mr. Speaker, today I rise in support of the United States-Chile Free
Trade Agreement implementation. When signed into law, this agreement,
as with other free trade agreements, will help boost exports of
Americans' goods and services. It will help create more net jobs for
American workers and will help fuel economic growth.
Mr. Speaker, when trade grows, income grows. Free trade not only
creates opportunities for the unemployed and underemployed, it helps
increase wages and improves the standard of living of our workers and
consumers at home and abroad. It is that simple, and we have 200 years
of experience to prove it.
For example, free trade benefits small business, the job engine of
America.

{time} 1130

Ninety-seven percent of U.S. exporters are small businesses with
fewer than 500 employees. Free trade benefits farmers. U.S.
agricultural exports support hundreds of thousands of jobs. Nearly 25
percent of farmers' gross cash sales are generated by exports.
Perhaps most importantly, trade benefits families through a greater
choice of goods through lower prices so more families can get better
products using less of their paychecks.
But, Mr. Speaker, besides the obvious economic benefits,
fundamentally we must recognize that it is not nations that trade with
nations, it is people that trade with people. Every American should
have the right to determine the origin of the products they want to
purchase, be these products from next door, down the street or even
Chile and Singapore. With the exception of national security and safety
considerations, it should not be the

[[Page H7478]]

role of the Federal Government to tell consumers from where they should
buy their goods. It is a fundamental economic liberty that is at stake
here.
Mr. Speaker, I urge my colleagues to reject protectionism and to
support jobs and freedom by supporting this Free Trade Agreement with
Chile.
Mr. STARK. Mr. Speaker, I yield 4 minutes to the gentlewoman from
Ohio (Mrs. Jones).
(Mrs. JONES of Ohio asked and was given permission to revise and
extend her remarks.)
Mrs. JONES of Ohio. Mr. Speaker, I would like to thank the gentleman
from California (Mr. Stark) for his leadership on this issue and for
yielding me time.
Mr. Speaker, today I rise to express my opposition to the trade
agreements before the House today. My concerns regarding these
agreements cover many issues such as their lack of strong labor and
environmental enforcement language, the intrusion of immigration policy
into the realm of trade policy, and the fact that these agreements are
a step backwards from the standards set by the Jordan Free Trade
Agreement and are being used and touted as the model for future
agreements.
First, however, I would like to address the effect these agreements
will have on our trade deficit and how they will harm American workers.
As the gentleman from California (Mr. Stark) has already said, our
Nation's unemployment rate is now at 6.4 percent, the highest rate in
more than 9 years. Many of these jobs were lost in the manufacturing
sector, just under 100,000 in Ohio alone. It seems that many perceive
the solution to this crisis is to implement trade agreements that
depart from the standards set by the U.S.-Jordan Free Trade Agreement,
returning instead to what most would concede is the weak model
accomplished by NAFTA. I anticipate that the most likely traded item
these agreements will facilitate will only be more U.S. jobs.
Like NAFTA, the Chile/Singapore agreements will cause shifts in
production from the U.S. that will further engorge the already bloated
trade deficit and lead to the loss of more U.S. jobs.
At this time, I have been working in the City of Cleveland trying to
save steel jobs in the City of Cleveland with my colleague who I share
Cleveland with in terms of representation.
Mr. KUCINICH. Mr. Speaker, will the gentlewoman yield?
Mrs. JONES of Ohio. I yield to the gentleman from Ohio.
Mr. KUCINICH. Mr. Speaker, I want to say that, having worked together
in Cleveland in trying to save jobs in the steel industry, we
understand what these trade bills do in undermining our jobs. Of
course, we are both familiar with the fact that the unemployment rate
nationally is currently at 6.4 percent and with this bill we are going
to receive an aggravated trade deficit that is already at $492 billion.
I think the gentlewoman would agree that this is a condition that is
intolerable for the workers in that district.
Mrs. JONES of Ohio. Absolutely.
Mr. KUCINICH. We already see these agreements that have weak labor
laws, and this particular bill with a country that has laws that were
established by an anti-labor, anti-union dictator, how in the world can
our country protect our workers when we are facilitating a race to the
bottom when we are engaging in trade agreements with countries that do
not have a history of protecting workers?
Mrs. JONES of Ohio. The wonderful thing about all these agreements is
that, right in the Ohio delegation, we have five members in our
delegation who are on record in opposition to this trade agreement. I
believe it is probably the largest number of Members who are engaged.
Mr. KUCINICH. One of things that we fought for is to protect the
rights of the public, and this bill opens the door to further
privatization and deregulation of vital human services, including
health and water; and what that means is higher profits for
corporations, higher rates and diminished services and limited access
for more people.
So I want to thank the gentlewoman for her leadership and how we have
been able to work together in Cleveland to protect jobs. We know from
our constituents that they need us here on the floor of the House
making sure that we demand this these trade agreements not further
cause loss of jobs and loss of power on the part of the people.
Mrs. JONES of Ohio. I will reiterate that it is so important that
everybody understand that even though Chile and Singapore may be better
than other countries, these agreements are set to be a model for future
trade agreements, and we do not want to set the model at the standard
that we have in these agreements.
I am pleased to stand here with my colleagues in opposition to this
legislation.
Mr. CRANE. Mr. Speaker, I yield two minutes to the gentleman from
Texas (Mr. Brady).
Mr. BRADY of Texas. Mr. Speaker, I rise in strong support of this
agreement for better trade between the U.S. and Chile and, following
this, U.S. and Singapore. I appreciate the leadership of the gentleman
from Illinois (Chairman Crane) in opening these new markets for
American companies.
There is a principle involved in every piece of legislation we deal
with. The principle in trade is this: If, as Americans, we build a
better mouse trap, we ought to be able to sell it anywhere in the world
without discrimination. If someone else builds a better mouse trap, we
ought to be able to buy it for our families and for our businesses.
This type of free trade is important to America if we look at the
most important thing, jobs. It is important to us because now every one
of every three new jobs we are creating in America comes from
international trade. No one sells more than our country outside. No one
buys more than our country inside. And one out of every three acres
that our farmers plant are for sale overseas, so it is important that
these markets are open to companies and our farmers.
This is important in our State as well. It is important to Texas
already. Just Chile's trade is responsible for almost 180,000 new jobs
in Texas. That is enough new Texas workers to fill the Astrodome three
times over. We have not even yet begun to scratch the surface of what
new jobs we can create through free trade; and as the State which is
the largest exporter, in other words, no one sells more, ships more
overseas than our State, this is real jobs for our communities. These
are real jobs for our families.
But let me state that, though we have not scratched the surface,
other countries are not waiting for us to get our act together. They
are already reaching agreements so that their companies can sell on
level playing fields. We need to make sure American companies have a
fair shake.
Mr. LEVIN. Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from
Texas (Mr. Ortiz).
(Mr. ORTIZ asked and was given permission to revise and extend his
remarks.)
Mr. ORTIZ. Mr. Speaker, I rise in support of the trade agreements
before us, the Chile/Singapore agreements.
As a Democrat, I often find myself opposing long-time friends on
matters of trade, and that never comes easily. But the reason I support
this agreement is I know free trade simply works through strategic
agreements like this one.
I have seen the unemployment rate in south Texas and my State of
Texas decline through the 1990s. Coming from a poor district like the
district that I represent, to see unemployment go down from 15, 17
percent to 9 percent after the agreement that we had with Mexico tells
us one thing, that these agreements work.
Now we are not speculating about the benefits of free trade. We have
seen them at work in our community. This economy churns mightily, and
the more free trade we have, the more opportunities that there are for
this Nation to advance our economy. By strengthening trade and
investment relations between two partners with similar economies, both
nations benefit from this agreement. This agreement streamlines the
operation of major industries within our countries, the United States,
Singapore, and Chile. It allows our companies greater efficiency and
flexibility by cutting processing costs for some technology products
and medical devices in Singapore and the United States. Benefits like
this will foster greater economic growth between these countries.

[[Page H7479]]

The FTA formalizes our work together on labor, environmental and
domestic enforcement issues. And in Singapore, clearly, these trade
agreements strengthens our economic opportunity with our military
partner in the war on terrorism. I have seen what Singapore has done to
help us with our military. They built a pier to the cost of anywhere
from 40 to $50 million so that our vessels could berth, so they could
refuel, so that our young sailors could have R&R in Singapore. This
strengthens the United States' presence in east and south Asia, with
Singapore as a base.
Singapore serves as a regional center for many American multinational
corporations. This will be the first transcontinental trade agreement
across the Asia-Pacific to the nation whose United States trade exceeds
all our current trading partners, which is the second largest Asian
investor in the United States after Japan and which hosts over 1,300
United States corporations and 15,000 Americans. With Chile, we have
the same.
As great a country that we are, can you imagine that we only have
four trading agreements with the rest of the world? And what I have
seen when I travel through these countries is that other countries seem
to be eating our lunch. We cannot afford to do that.
I ask my friends on both sides of the aisle to please support these
free trade agreements with Chile and Singapore. It will benefit our
country and the lives of many of our people.
Mr. CRANE. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from New York (Mr. Houghton).
Mr. HOUGHTON. Mr. Speaker, I am not going to take my two minutes
because there have been many figures cited, there have been many
comparisons. There are always problems in trade agreements, whether
they are labor conditions or environmental or currency or intellectual
property rights.
The only thing I can say is, I have been there. I have done business
in Chile. I have manufactured, I have sold, and I have never had a
situation where they have abused the trading privilege.
There are two issues here: one is to protect the jobs, and we all do
that. The gentleman from Michigan (Mr. Levin) and I were down at the
International Trade Commission talking about section 201 and the steel
case. Of course, we are trying to protect our jobs, and we have got to
do it, and we have got to do more. But at the same time we have got to
open up markets. Because, as everybody knows, 95 percent of the world's
population is outside of the United States, and we cannot build a wall
around us.
This is a good agreement. It is not a perfect agreement, but it is a
good agreement with a good country, and I urge Members to support it.
Mr. STARK. Mr. Speaker, I yield 3 minutes to the gentleman from
Wisconsin (Mr. Kleczka).
Mr. KLECZKA. Mr. Speaker, the proponents of the Chile and Singapore
trade agreements are correct. The bills before us today will lead to
increased jobs and increased exports. Unfortunately, those increases
will take place in Chile and Singapore and not in the United States.
Since the first contraction of the United States gross domestic
product in March, 2001, our trade deficit has risen by 31 percent.
During the same period we have lost over 2.4 manufacturing jobs.
Congress should be considering measures to grow the economy and create
jobs instead of agreements before us today that are just one more step
down the road of growing trade deficits and lost employment.
These bills represent a significant step backwards from the progress
made on the Jordan Free Trade Agreement and even a step backwards from
the bill authorizing fast track. Passage of these agreements will set a
horrible precedent for future trade negotiations and will be an omen
for even more U.S. job losses.
The devil is in the details: The Chile and Singapore Free Trade
Agreements contain only one workers' rights provision protected by a
dispute settlement procedure, and this is that a country enforce its
own labor laws. However, the bills do not commit Chile or Singapore to
even have any labor laws or to ensure that their labor laws meet any
international standards.

{time} 1145

These agreements also create a totally new visa category for the
temporary entry of professionals into this country, even if there is no
shortage of workers in the United States. These visas are temporary in
name only because the bill provides that they are renewable
indefinitely.
It is absurd to allow new sources of low-wage labor into this country
when we are not facing a labor shortage, quite the contrary, but are
facing the highest unemployment rate in 9 years.
The Singapore Free Trade Agreement also is a large loophole that
allows goods made in other countries to be treated as made in Singapore
and imported into our country duty free if they simply pass through
Singapore's ports. This practice will allow goods made all over the
world to escape U.S. duties.
Mr. Speaker, I urge my colleagues to reject both of these trade
agreements.
The SPEAKER pro tempore (Mr. Quinn.) The Chair would inform the
speakers that the gentleman from Illinois (Mr. Crane) has 28\1/2\
minutes remaining, the gentleman from Michigan (Mr. Levin) has 8
minutes remaining and the gentleman from California (Mr. Stark) has 8
minutes remaining.
Mr. CRANE. Mr. Speaker, I yield 4 minutes to the gentleman from
California (Mr. Dreier), our distinguished chairman of the Committee on
Rules.
(Mr. DREIER asked and was given permission to revise and extend his
remarks.)
Mr. DREIER. Mr. Speaker, I rise in strong support of these
agreements. I was not intending on speaking. Yesterday, I certainly had
my say; for an hour, we had a very interesting exchange with a wide
range of our colleagues on both sides of the aisle on this issue. But I
was listening to the debate upstairs and heard some aspersions cast at
our great U.S. Trade Representative, Ambassador Robert Zoellick.
I will tell my colleagues that I have had the privilege of serving
now approaching a quarter century in this institution, and I have
worked closely with a wide range of U.S. Trade Representatives and I
have never known one to be more open to input not only from Members of
Congress, but from a wide range of entities that are charged with
providing the kind of information that is necessary for him to do his
job.
I also want to say that we, in a bipartisan way, have had great
leadership on this issue. The gentleman from Illinois (Mr. Crane), the
chairman of the Subcommittee on Trade, has, and I know this makes him
sound like there is a huge disparity in our age, in fact, there is a
huge disparity in our age. When I was a child, the gentleman from
Illinois (Mr. Crane) was providing great leadership on the goal of
breaking down tariff barriers and openness.
I have heard a number of our colleagues talk about this issue, and
freedom is really what this is all about.
We referred to the fact yesterday that 71 years of one-party rule in
Mexico came to an end on July 2, 2000, and we know that that came about
in large part due to the economic liberalization that was implemented
in Mexico; and we saw political freedom follow. Clearly, we, by
breaking down barriers, are expanding freedom worldwide.
In 1947, following the Second World War, leaders of the United States
and Europe came together to establish the General Agreement on Tariffs
and Trade, and the goal was a very simple one, Mr. Speaker. It was the
elimination of tariff barriers, knowing that Adolph Hitler was
emboldened by the fact that the United States Congress had passed a
Smoot-Hawley Tariff Act, and we stuck our heads in the sand and did not
engage in Western Europe, and that played a role in bringing him into
power.
Similarly, we have seen very repressive societies in recent history,
and we have been able to break down that repression through the further
expansion of freedom and opportunity, and that is what this is all
about.
Clearly, trade, as the gentleman from Illinois (Mr. Crane) taught me,
is a win-win. It benefits both sides.
Are there dislocations? Are there difficulties with which we have to
contend? Absolutely. The economic theory of comparative advantage says
we do what we do best.

[[Page H7480]]

Mr. PASCRELL. Mr. Speaker, will the gentleman yield?
Mr. DREIER. I yield to the gentleman from New Jersey.
Mr. PASCRELL. Mr. Speaker, when the gentleman says displacement, when
a manufacturing job is lost, the average in United States pays $635 a
week, and it is usually replaced eventually down the line by a retail
job, which is $350. Let us put the facts on the table.
Mr. DREIER. Mr. Speaker, I have a limited amount of time.
Mr. PASCRELL. Let us get our facts straight.
Mr. DREIER. Mr. Speaker, I am going to continue to yield to the
gentleman. What are the facts?
Mr. PASCRELL. The facts are that we should not have manufactured jobs
here and have manufactured jobs across the ocean. We need to take care
of our own people in this country.
Mr. DREIER. Mr. Speaker, the gentleman has made his point.
If I could reclaim my time, Mr. Speaker, let me reclaim my time and
say that comparative advantage does, Mr. Speaker, say that we do what
we do best. Do I want a manufacturing sector of our economy?
Absolutely, but I do not in any way want us to arbitrarily keep into
place an antiquated society. We have to recognize that this is a global
economy and the world is changing. We have to be prepared to compete in
that global economy.
Mr. LEVIN. Mr. Speaker, I yield 5 minutes to the gentleman from
Oregon (Mr. Blumenauer).
Mr. BLUMENAUER. Mr. Speaker, I appreciate the gentleman's courtesy in
permitting me to speak on this today. I have enjoyed working with our
colleague, the gentlewoman from Illinois (Mrs. Biggert), in promoting a
discussion of the benefits of this agreement with Chile. I think it is
an important step in getting our balance on trade correct. And I
appreciate the dialogue between my friend from New Jersey and the Chair
of the Committee on Rules because I think it is important for us to get
our facts straight, and I think an honest and open discussion will
promote that.
The facts, from my perspective, are that the United States gives up
very little in exchange for this agreement. My colleagues have heard,
if they have been following the debate on the floor, the fact that the
average tariff for U.S. goods is over 5.5 percent for what we send to
Chile, but that the vast majority of the product that comes from Chile
to the United States is duty free and the average about one-half of 1
percent.
In my community, the facts are, we have seen the impact of losing the
market share that the United States used to have with Chile, lost to
the other countries that Chile has in the Western Hemisphere, like
Argentina, Brazil, Mexico and Canada, and the European Union where we
are losing market share.
I represent Freight Liner. Perhaps the largest, most efficient truck
manufacturing operation in the world is in my community. They are
family wage, union jobs, paying upwards of $20 an hour or more. In the
last 10 years, because we have lost market share, because we could not
compete with manufacturing in Brazil and in Mexico, we have lost the
truck market.
There is a potential with this agreement that we would be able to
have a more advantageous situation, and actually it would make more
family wage jobs in my community.
We heard talk about labor and environmental practices, and I yield to
no one in my concern to make sure that we are protecting quality of
life and the environment at home or around the world; but the facts
are, if we look at Chile, it has strong labor and environmental
standards. They are amongst the best in Latin America. It is important
for us to reinforce that, and I would suggest that Chile is a good
model in terms of what happens on the ground. Indeed, overall, Chile is
a good model. It is an island of stability in very troubled waters in
Latin America. We ought to reinforce that model by providing this trade
agreement to them.
I have been troubled since I have come to this Chamber listening to
some of the debate that has been more emotional than factual, where
people on both sides have engaged in the debate between what some say
is fair trade and some say is free trade. Well, I would like us to
begin an era of honest trade debate.
We have all got our blind spots. The United States has its
protections. One of the reasons why I voted against the trade promotion
authority that was before us last Congress is that people wanted to
draw bright partisan lines and then make a hash out of our trade policy
with side agreements on citrus and textiles, and we had this egregious
farm bill that really was antitrade.
I think this agreement before us is a step for us to get our balance
back. It is a vote for an opportunity to deal with the merits of the
agreement, not what is down the line. That is the precedent I want to
establish, that we look at the agreements before us, look at the facts
and vote on them, that we vote on the merits and that we start
rebuilding the trust, the understanding and the dialogue in this
Chamber so that we can have an honest trade debate, which is so
important for the future of my community, my State and, I think, our
country.
Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am delighted to rise today in support of H.R. 2738,
legislation that implements the U.S.-Chile Free Trade Agreement. The
U.S.-Chile FTA has been a very long time in coming. During the NAFTA
non-markup 10 years ago, I offered an amendment expressing the sense of
Congress that the President should begin FTA negotiations with Chile.
Finally, this has come to fruition.
Chile has one of the fastest growing economies in the world. Over the
last two decades, Chile has established a vigorous democracy, a
thriving and open economy built on trade and a free market society. The
U.S.-Chile FTA will help Chile continue its impressive record of
growth, development and poverty reduction. It will also help spur
progress in the free trade area of the Americas, and will send a
positive message throughout the world by demonstrating that we will
work in partnership with those who are committed to free markets.
The U.S.-Chile FTA provides new trade opportunities for U.S. workers
and manufacturers. More than 85 percent of two-way trade in consumer
and industrial products will become tariff free immediately, with most
remaining tariffs being eliminated within 4 years. This tariff
elimination will benefit manufacturers, workers and consumers in such
key industries as construction equipment, autos and auto parts,
computers and other information technology products and medical
equipment.
The agreement also allows access to new opportunities and benefits to
Chile's fast-growing services sector for U.S. service providers.
In the area of agriculture, more than three-quarters of U.S. farm
goods will enter Chile tariff free within 4 years, and all remaining
tariffs will be phased out within 12 years. New opportunities for trade
and numerous agricultural sectors such as soybeans, pork and feed
grains, as well as in processed food products such as distilled spirits
and breakfast cereals, will be created by this FTA.
The U.S.-Chile FTA is also groundbreaking in many areas. For example,
the U.S.-Chile FTA will be a benchmark for future trade agreements
because of the protections given to U.S. intellectual property rights.
These new protections in digital areas such as software, music, text
and videos go beyond past trade agreements in addressing protection for
U.S. patents and trade secrets.
A U.S.-Chile FTA will provide tremendous benefits to the economies of
both the United States and Chile. According to a study that was
conducted by the University of Michigan and Tufts University, it is
estimated that a U.S.-Chile FTA will expand U.S. GDP by $4.2 billion
annually.
I strongly urge my colleagues to support this bill and to use this
opportunity to strengthen the United States' strong relationship with
Chile, which will extend the benefits of the free trade agreement to
the American people.
Mr. Speaker, I reserve the balance of my time.

{time} 1200

Mr. STARK. Mr. Speaker, I yield such time as he may consume to the
gentleman from Illinois (Mr. Lipinski).
(Mr. LIPINSKI asked and was given permission to revise and extend his
remarks.)

[[Page H7481]]

Mr. LIPINSKI. Mr. Speaker, I rise in opposition to the Chilean and
Singapore Free Trade Agreements.
Mr. Speaker, I continue to be amazed by the supposedly business-
friendly policies that are advanced by the American business community.
As we should have learned from Enron and Worldcom, focusing on
immediate profit recognition is usually a terrible long-term business
strategy. But that is also the failed strategy of our shortsighted
trade policies: Our business community is addicted to a quick fix at
the expense of its long-term health--and America's long-term health by
extension.
Perhaps there will be some short-term gains in U.S. exports because
of these trade accords. Some in this body seem proud to argue that
tariffs on U.S. luxury cars will be eliminated under the Chile accord.
My colleagues, I am eager to see how many luxury cars we will sell to
Chile.
In the last three years, 2.6 million American manufacturing jobs were
lost, mostly because of bad foreign trade agreements. Today, our
unemployment rate is at a 9-year high and American wages are stagnant.
If these trade agreements were part of a grand foreign aid program to
develop poor countries, I would feel somewhat better about them. After
all, we would presumably be transferring America's standard of living
to the developing world, and nurturing new consumers. But that is not
the case either, as the business communities in Central America and
East Asia are just as myopic as the American corporate lobby.
The countries this administration proposes to expand trade with have
little to no environmental or labor protections, and their workers'
wages reflect this reality. Under this Singapore and Chile framework,
these countries will not be required to abide by International Labor
Organization standards. Accordingly, worker wages and standards of
living will continue to be abhorrent, and American jobs will continue
to be trans-shipped abroad.
These agreements will further the gulf of extreme poverty in this
world, and drag down progressive societies along with them. Mr.
Speaker, I urge my colleagues to reject the Chile/Singapore trade
framework and adopt a healthy, long-term vision for America's future.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from
Oregon (Mr. DeFazio).
Mr. DeFAZIO. Mr. Speaker, I thank the gentleman for yielding me this
time.
As this is the first significant trade agreement in the 21st century,
let us look back and see, is our trade policy working? 2001, $358
billion trade deficit; 2002, $436 billion trade deficit; a record first
quarter this year, $136 billion headed toward a $550 billion trade
deficit; $1.5 billion a day, $1 million a minute. Three million jobs
have been lost in the last decade due to trade policies, capital
exports; 251,000 manufacturing jobs since January 1; 53,000 in May.
NAFTA, WTO, Fast Track, FTAA. Every time here on the floor of the
House we hear the same carrying on about exports of goods and services
and consumer benefits. Yes, exports will result. I agree. But they
forget to tell us that there will be a much greater increase in
imports, and they do not talk about the net, which is this deficit
headed to more than $.5 trillion.
Then, if cornered, they will fall back and say, what about the
consumer benefits? Well, the benefits are not really great for American
workers when their jobs have been exported, no matter how cheap the
goods are.
Earlier, we heard an eloquent lesson in geography, new false promises
for our farmers. Already there are pending unfair trade complaints for
dumping against grapes, raspberries, pears and salmon from Chile. But
do not worry, we will retrain these people who lose their jobs for the
new high-tech economy and for all the skilled work. Except now IBM,
Boeing, GM, they are all exporting their jobs; and it is estimated
under these agreements we will export 3.3 million skilled jobs in the
next decade because of these trade agreements.
There is a new twist in this one, though. We are going to import
skilled laborers from Chile under this agreement. Yes, we will mandate
the importation of skilled laborers to displace the few remaining jobs
in the United States of America.
Is our trade policy working? Yes, exactly as designed, but not the
way it is being sold here on the floor of the House. It is about access
to cheap labor, weak laws, and profiting a select few multinational
corporations.
Will the last worker in the last manufacturing plant in America
please turn out the lights.
Mr. CRANE. Mr. Speaker, I ask unanimous consent that I be allowed to
yield the balance of my time to the gentleman from Texas (Mr. Brady)
and that he be permitted to manage the time.
The SPEAKER pro tempore (Mr. Quinn). Is there objection to the
request of the gentleman from Illinois?
There was no objection.
Mr. LEVIN. Mr. Speaker, it is my pleasure to yield 3 minutes to the
gentleman from Texas (Mr. Stenholm).
(Mr. STENHOLM asked and was given permission to revise and extend his
remarks.)
Mr. STENHOLM. Mr. Speaker, I rise in support of the Chile Free Trade
Agreement, and I thank the gentleman from Michigan for yielding me this
time.
The Chile Free Trade Agreement will eliminate tariffs on 85 percent
of the U.S. exports to Chile immediately. Under the U.S.-Chile Free
Trade Agreement, American workers, consumers, businesses, and farmers
will enjoy preferential access to a small but fast-growing economy,
enabling trade with no tariffs and under streamlined customs
procedures.
Over 75 percent of U.S. farm goods, including pork, beef, wheat,
soybeans, feed grains, and potatoes will enter Chile duty-free within 4
years. Other duties on U.S. agriculture products will be phased out
over 12 years.
U.S. farmers' access to Chilean markets will be as good or better
than our competitors in Chile. Now, that is something to be emphasized:
as good or better. This will help reverse the gains Canada and Europe
achieved in market share after implementing their free trade agreements
with Chile.
U.S. wheat, wheat flower, and vegetable oils will now receive the
most preferential rate available and will be duty free at the
conclusion of the transition periods.
While U.S. tariffs will also be eliminated over time under the free
trade agreement, the agreement has a provision that will help protect
farmers and ranchers from sudden surges in imports of designated
agricultural products from Chile, a very key new and significant
additions to the trade agreement.
The agricultural safeguard provision will apply to imports of certain
Chilean products, including many canned fruits, frozen concentrated
orange juice, tomato products and avocados. The safeguard is price-
based and automatic.
The prices for the commodities subject to safeguards will be
programmed into U.S. Customs Service computers, which will
automatically assess the tariff uplift if the import value of the
commodity falls below the trigger price established in the agreement.
When the safeguard is triggered, additional duties will be applied.
Mr. Speaker, Chilean consumers appreciate the quality of U.S.
agricultural products, but prior to this agreement there were
significant hurdles to U.S. exports, something that gets overlooked by
those who oppose this agreement. Chile's associate membership with
MERCOSUR and its free trade agreements with other countries meant that
while U.S. products paid the full common external tariff, up to 10
percent, products from Europe, Canada, Mexico, Argentine and Brazil
entered Chile at either zero duty or reduced rates.
Progress was made in 1997 when the United States gained exclusive
market access for table grapes, apples and citrus after resolving a
number of sanitary and phytosanitary issues.
Let me just say in conclusion that this Chile Free Trade Agreement
benefits the U.S. by lowering duties on exports to Chile. Clearly, it
will benefit us over current law and the current situation. It also
includes innovative provisions on transparency and customs facilitation
that will help promote full implementation of these agreements and
further respect for the rule of law.
For these reasons, I urge my colleagues to support implementation of
the Chile Free Trade Agreement.
Mr. BRADY of Texas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, does it matter in all these discussions if we have a
trade agreement with Chile or not? Would it matter if this bill simply
went away? The answer is, if you care about American jobs, yes, it very
much matters.
The National Association of Manufacturers estimates that the lack of
an

[[Page H7482]]

agreement between America and Chile causes our companies to lose more
than $1 billion in sales each year to other countries. For example,
when Chile reached free trade agreements with Europe, sales to Europe
automatically increased. In fact, it expanded by 30 percent in the year
just ending in February, while our increased sales to Chile were
negligible at best. We did not have an agreement. Our sales faltered.
Germany had an agreement, and their sales grew by almost 50 percent.
France had an agreement with Chile. They grew by 41 percent.
We have to ask ourselves, if these free trade agreements are so bad,
why do other countries pursue them so much, and why do immediately they
begin selling more of their products to Chile, and why do they start
creating more jobs in their countries?
We are paying a price in America for not having a free trade
agreement; and, frankly, in this economy we cannot stand to lose even
one American job or lose the prospect of creating more American jobs.
Mr. Speaker, I yield 4 minutes to the gentleman from Michigan (Mr.
Levin).
The SPEAKER pro tempore. The Chair informs all speakers that the
gentleman from Michigan (Mr. Levin) has 4\1/2\ minutes remaining, the
gentleman from California (Mr. Stark) has 6 minutes remaining, and the
gentleman from Texas (Mr. Brady) has 15 minutes remaining.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from New
Jersey (Mr. Pascrell).
Mr. PASCRELL. Mr. Speaker, I thank the gentleman from California for
yielding me this time.
Mr. Speaker, those who are supporting the Chilean resolution here
would like us to think this is the process. Many of them have said
already we do not agree with what the United States Trade
Representative did in these agreements, and for that reason we will
oppose the bills by voting yes. Now, if that makes sense, please, what
have I missed?
We have already a trade deficit with Chile. That deficit has tripled
from 2001. It is now $1.2 billion. This is not the way to have
reciprocal trade agreements. These agreements set precedent. Again, we
export jobs, we import workers. It is our workers that are out of jobs.
We understand that this is at the very basis of the downturn in the
economy. We will not recover this economy. These folks are out of work
not 2 weeks or 3 weeks, this is permanent unemployment; and the jobs
that they finally do get pay half of what the jobs paid that they lost.
This is a fact of life.
The trade deficit that we have with Chile and the rest of the world
equates to a loss of $1 million per minute in United States' wealth. It
makes no sense. We need to stop the hemorrhaging of jobs.
We need to stop trying to communicate to the American people that we
care about their jobs. We know that these trade agreements are
precipitated by the big folks, the big corporations, the big farmers to
the detriment of the average American worker, and we cannot accept that
any longer.
What is it about this trade deal that will stop the job losses? How
does this end these consecutive months of decline in the manufacturing
workforce? The silence is deafening, Mr. Speaker.
Mr. BRADY of Texas. Mr. Speaker, I yield 3 minutes to the gentleman
from Ohio (Mr. Portman), who has played a leading role in expanding
markets around the world for American companies.
Mr. PORTMAN. Mr. Speaker, I thank the gentleman for yielding me this
time, and I just want to say that the silence may be deafening to the
gentleman, so I will break it. There is no silence among those of us
who support these trade agreements. These are good trade agreements
because they will mean more U.S. jobs. That is the whole point.
This is a very exciting day on the floor, Mr. Speaker, because for
years this Congress has been paralyzed on trade. While other countries
are gaining market share in countries like Chile and, as an obvious
example, where for 10 years the United States has not been able to move
forward on trade because this Congress, at least for the past 7 or 8
years, has not had the ability through a Trade Promotion Authority,
Fast Track authority to do so, we have lost market share. We have lost
jobs.
We have lost jobs in my area of Ohio, which is a heavy export area;
we have lost jobs all over the country, and I would daresay in the
State of the gentleman from New Jersey as well. And that is what it is
all about.
Now there will be an allocation of jobs. There will be a
differential, depending on what part of the country you are from. But
to lose these jobs because other countries, including our friends in
Europe, are getting this market share in countries like Chile is
unacceptable. It is irresponsible. So I am delighted to be on the floor
to talk about Singapore, to talk about Chile, to talk about two good
trade agreements that come out of a process where we finally now have,
through this Trade Promotion Authority law, the ability to open up
these markets to U.S. goods.
Our country is wide open. We protect a few products, but for the most
part we are the most open country in the world. We let them sell stuff
here. Talk about trade deficits. That is because we are open. They are
not as open as we are. We want to open up their markets, including to
products from my area.
Earlier today there was discussion about, gee, there is not enough
consultation in these agreements. I do not know where that comes from,
because there is unprecedented consultation in these two agreements
that come out of, again, this Trade Promotion Authority that we finally
passed in Congress, which allows Congress to have a bigger role and the
public to have a bigger role in saying how to come up with these
agreements.
Is it perfect? No. We would all like to have more of this, more of
that, more information.
But let me cite a few facts. There have been more than 250 meetings
with Members and staff regarding Singapore and Chile. There has been a
proposed draft provided to Congress prior to the negotiating sessions.
That was never true previously. The final draft text was made available
to Congress not yesterday but in January of 2003.
We have also worked with more than 700 cleared advisors, including
labor and environmental representatives. They are the ones that put
together these advisory committees that work together with the trade
folks at USTR, the U.S. Trade Representative and his negotiators. And,
guess what, of those 31 advisory committees looking at everything, all
the issues across the board, including environmental policy, of the 31,
30 have endorsed both of these free trade agreements. Thirty of the 31,
including the environmental group.

{time} 1215

That is pretty good. Yes, we always want to know as Members of
Congress how we can represent our constituents better, but we have seen
a vast improvement in the consultation. Therefore, I think it is ironic
that some would come to this floor and say this is somehow backtracking
on the ability of Congress to know what is in these agreements.
I strongly support the Chilean and Singapore Free Trade Agreements.
Mr. LEVIN. Mr. Speaker, I yield 4 minutes to the distinguished
gentleman from California (Mr. Becerra), a colleague on the Committee
on Ways and Means.
Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me this
time. I thank my colleague from Texas for yielding us additional time
as well. I hope that we will listen to the debate here by many,
including those who are opposed to this agreement. I will stand here
today in support of this agreement, but with some trepidation.
First, I have to say that Chile and Singapore perhaps represent the
type of country that we would like to extend these free trade
agreements to, the opportunity to have these accords with us. Chile and
Singapore have both proven that they are advancing countries, they have
both demonstrated a respect for their laws and enforcement of their
laws; and in regards to Chile in particular, it is a country within
Latin America that has over the years demonstrated that it is ready to
be a full-fledged partner of the United States when it comes to
international commerce.
Quite honestly, we would have had a great standard to work with in
negotiating an accord on trade with Chile and

[[Page H7483]]

Singapore if we had looked at the model that had just come through this
House within the past year and that was the trade agreement with
Jordan. In that Jordan agreement, we established that we would respect
not just a country's manufactured products, not just that each country
would respect its intellectual property and protect those rights of the
property, not just that we would respect our agricultural industries,
but in Jordan we also said we will respect the people who actually
produce all these things, the workers; we will respect each country's
environment, and we will respect that we want to bring everybody up,
not just the manufactured good, not just a piece of intellectual
property, not just agriculture, but the actual people who do the work.
Unfortunately, this agreement did not include that language. This
agreement treats workers differently than it treats a manufactured
product. It treats workers less than it does capital, inanimate
objects, and that, I think, is unfortunate.
Yes, there are some provisions within the deal that speak to
enforcement provisions to make sure that each of those two countries,
Chile and Singapore, enforces its own laws. But what happens if they do
not have these laws in the future? Then we cannot respect labor rights
and environmental rights.
Chile and Singapore probably would have been very happy to have
negotiated an agreement that was similar to Jordan on labor and the
environment because they already meet those standards in their own
domestic laws. The unfortunate thing here is that we know that the
administration is negotiating future agreements with Central America
and other countries that are not prepared, like Chile and Singapore, to
take on these obligations, because they have proven, they have
demonstrated that they will not protect the rights of workers, the
rights of the environment, and they will not enforce even those laws on
the books that may be able to do that.
What are we left with? A year ago when we debated the fast track law
that gave the President the authority to negotiate these agreements
without having to come to Congress for consultation, I said, this is a
chance for this country to lead, for our country and its administration
to lead.
Mr. Speaker, the administration did not lead. Instead of trying to
protect workers and the environment the same way we protect inanimate
objects and capital, we did not do that. We had that opportunity to do
so.
Not only are we not protecting those things, labor and the
environment, but we are also not funding the tools we have in place to
try to make sure countries do respect the rights of workers and the
environment.
It is unfortunate that we are moving forward with a budget in this
administration that would defund those systems that we have in place in
agencies that would give us a chance to know if countries are actually
protecting their workers and the environment.
Mr. Speaker, this is not a way to lead. But am I going to fault Chile
and Singapore for the failings of our government negotiators in not
trying to protect workers here and abroad, and the environment here and
abroad? I will not do that. But I hope that we will all learn, as the
Congressional Hispanic Caucus decided a week ago, that we will not
support future agreements on trade that use the same language as the
Chile and Singapore agreements do with regard to labor and the
environment.
It is time to protect workers and the environment the same way we
protect any other inanimate object.
Mr. BRADY of Texas. Mr. Speaker, I yield myself 2 minutes. What kind
of partner will we have in free trade with Chile? The answer is,
America will have a wonderful partner in trade.
Chile has one of the fastest growing economies in the entire world.
Over the last two decades, Chile has established a vigorous democracy,
an open democracy, a thriving and open economy built on trade and a
free market society. These are American values that we treasure. These
are values that Chile embraces. The American-Chile Free Trade Agreement
will help Chile continue its impressive record of growth, of
development and in alleviating poverty in Chile; it will help spur
progress in the Free Trade Area of the Americas; and importantly, I
think it will send a positive message throughout the world by
demonstrating that America will work in true partnership with those who
are committed to free markets.
Free trade opens markets, it opens minds, it fosters democracy, it
fosters labor rights and environmental protections. This free trade
agreement represents those values, American values that we ought to be
embracing.
Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I am pleased to yield 2 minutes to the
gentlewoman from California (Ms. Solis).
Ms. SOLIS. Mr. Speaker, today I rise to urge my colleagues to oppose
the U.S.-Chile and U.S.-Singapore Free Trade Agreements. Almost 5,000
jobs have been lost in my district alone since President Bush took
office. Unemployment in towns that I represent are largely represented
by Latinos and are averaging around 10 percent unemployment rates.
Almost 10 years after NAFTA was adopted, we saw our trade deficit
with Canada and Mexico go up 10 times higher than we would have ever
anticipated, destroying hundreds and thousands of jobs that left that
will never come back to this country. Why when unemployment in the U.S.
is at a 9-year high are we engaging in trade policies that have failed
to create jobs here at home?
The Chile and Singapore trade agreements would allow thousands of
temporary workers from many low-wage nations to enter into this country
to compete with Americans or people who live here for those high-paying
jobs. They would fill virtually any service sector jobs that have
recently been filled by people who are looking for a better wage. They
would be able to get jobs in technology, finance, engineering, medicine
and law.
I recently saw some news stories on one of the major stations showing
two very highly skilled people that recently lost their jobs. They were
engineers. Now one is a telemarketer and the other one is flipping
burgers. They are barely making minimum wage right now.
Why is it, then, that the U.S. wants to enter into this trade
agreement with Chile and Singapore? This is a giant step backwards.
Just 2 years ago, we went about supporting the Jordan Free Trade
Agreement, which I believe set a higher standard for both environmental
and labor laws. Why are we going backwards?
This, as I understand, will be a template for future negotiations
with Central America. I have something to say about that, because I am
part Central American and recently visited Nicaragua and El Salvador.
They do not have any standards for labor relations or negotiations.
They actually permit young women under the age of 15 to work long hours
under harsh conditions, and they do not even receive a dollar's worth
of pay in a day.
How are we going to lead America down that route, to lose so many
jobs? I ask my colleagues to vote against these two agreements.
Mr. STARK. Mr. Speaker, I yield the balance of my time to the
gentleman from Massachusetts (Mr. Frank).
Mr. LEVIN. Mr. Speaker, I yield the balance of my time to the
gentleman from Massachusetts (Mr. Frank).
The SPEAKER pro tempore (Mr. Quinn). The gentleman from Massachusetts
is recognized for 2\1/2\ minutes.
(Mr. FRANK of Massachusetts asked and was given permission to revise
and extend his remarks, and include extraneous material.)
Mr. FRANK of Massachusetts. Mr. Speaker, first I do want to comment
on the irony of many of us being lectured about the value of free trade
by supporters of the most anti-free trade, anti-poor people policy that
the United States has, our agriculture policy. People who have voted
for the American agriculture bill have less credentials to preach to
the rest of us about being fair to poor people than anyone I can think
of.
I am here to speak against the Chile Free Trade Agreement, as well as
the Singapore Free Trade Agreement, both for the reasons that we have
heard from from others, but specifically because they have
unfortunately become the embodiment of a purist, right-wing ideology
gone mad. Chile, in fact, as we have known, has been a successful
economy. Part of what Chile did as it

[[Page H7484]]

was building its successful economy was to adopt some sensible controls
on short-term capital flows. They did not want hot money coming in and
out.
Most analysts agree that the major cause of the problems in Asia in
the late 1990s had to do with hot money going in and out. Sound
economies, sound budgets were undermined when short-term investments
had flowed in and there was a run on the country.
Most economists today agree, including advocates of free trade, that
it is wise for countries in some cases, particularly developing
countries that may not have sound banking systems, to be allowed to put
controls not on foreign direct investment, but on short-term hot money.
This agreement, because of the right-wing ideology that governs this
administration and, I must say, I believe contrary to the wishes of the
Trade Representative, embodies a purist view that says no capital
controls anywhere, anytime, anyplace.
Let me tell my colleagues what some free trade advocates say of this.
The Economist magazine, which prides itself on its free trade
credentials, says in an article entitled ``A Place for Capital
Controls'':
``In negotiating new free trade agreements with Chile and with
Singapore, the U.S. has recently sought assurances of complete capital
account liberalization. Bitter experience suggests that such demands
are a mistake. It is past time to revise economic orthodoxy.''
Joseph Stiglitz, former chief economist of the World Bank, a strong
supporter of the Trade Promotion Act, a free trader, says:
``There is an emerging consensus among economists that emerging
markets should be particularly wary about full capital account
liberalization. It makes little sense for our trade agreements to be
pushing on our trading partners' restrictions which fly in the face of
sound economics.'' He is again opposed to this.
Finally, Professor Jagdish Bhagwati, a strong advocate of free trade,
says:
``The inclusion of provisions in this regard, in these treaties, in
these FTAs, seems to be ideological and a result of narrow lobbying
interests hiding behind the assertion of social purposes or ideology.''
I urge the rejection of these treaties. Singapore and Chile were
forced to agree to these over their objection. If we rejected these
treaties, we could easily renegotiate without these ideological
insistencies, right-wing ideology run amuck. I hope that we defeat
these treaties and renegotiate them without imposing this rigid capital
control prohibition on these two countries.

[Excerpted testimony from Apr. 1, 2003 House Financial Services
Committee Hearing on the U.S.-Singapore and U.S.-Chile FTAs]

The Capital Control Provisions in the Singapore and Chile FTAs

By Jadish Bhagwati, University Professor (Economics), Columbia
University)

The inclusion of capital control provisions in the Chile
and Singapore FTAs is . . . difficult to understand in terms
of economics. Even the IMF, including in its latest report
from its Chief Economist Ken Rogoff and associates, concedes
the case for prudence rather than haste in dismantling
capital controls and in occasional but cautious use of them
when necessary in otherwise capital-wise open economies. The
inclusion of provisions in this regard in these FTAs seems
therefore to be ideological and/or a result of narrow
lobbying interests hiding behind the assertion of social
purpose. I see, in particular, the following problems with
these FTAs as a template:
1. The provisions are overly ambitious in extending to all
kinds of ``investments'', including ``futures, options and
derivatives'', instead of being confined to direct foreign
investment. I see this as a potential problem with the NGO
community which has become properly sensitive to financial
flows and crises, and to the havoc they cause, especially on
the poor in the afflicted countries. It will simply play into
the hands of the many anti-globalization critics who see
trade treaties as being captive to financial and corporate
interests. At a time when trade liberalization itself has
become difficult to manage, the inclusion of such provisions
into a trade agreement is to invite gratuitous criticism.
2. The limitations put on what can be demanded by way of
compensation for use of capital controls and their effects on
the value of investments by foreign entities go some way
towards assuaging the early concerns. But they still amount
to roadblocks. I do not see how it can lead to anything but
political objections when invoked, just as the ultra-
conservative view of ``takings'' that was slipped into
Chapter 11 provisions of NAFTA has led to fierce political
objections.
3. As I read the text of the agreements, it appears that
the traditional protections built in for ``balance of
payments'' situations, which would have been invoked
automatically to suspend ``free transfers'', have been
removed and been replaced by a separate Dispute Settlement
mechanism when capital controls are invoked. This is more
restrictive for Chile and Singapore; it also constitutes a
tightening of the restrictions being imposed on these
countries' ability to use capital controls as they see fit.
None of this is good news. It also seems to me that few
other countries will be prepared to accept such a template.
Such restrictions, which are to be deplored in any event, are
best left to be handled through investment agreements, rather
than fastened on to trade agreements where they will bring
trade liberalization, a policy which is far less
controversial, into disrepute.
____

[From The Economist, May 3, 2003]

A Place for Capital Controls

For many developing countries, unrestricted inflows of
capital are an avoidable danger.
If any cause commands the unswerving support of The
Economist, it is that of liberal trade. For as long as it has
existed, this newspaper has championed freedom of commerce
across borders. Liberal trade, we have always argued,
advances prosperity, encourages peace among nations and is an
indispensable part of individual liberty. It seems natural to
suppose that what goes for trade in goods must go for trade
in capital, in which case capital controls would offend us as
violently as, say, an import quota on bananas. The issues
have much in common, but they are not the same. Untidy as it
may be, economic liberals should acknowledge that capital
controls--of a certain restricted sort, and in certain
cases--have a role.
Why is trade in capital different from trade in goods? For
two main reasons. First, international markets in capital are
prone to error, whereas international markets in goods are
not. Second, the punishment for big financial mistakes can be
draconian, and tends to hurt innocent bystanders as much as
borrowers and lenders. Recent with terrible clarity. Great
tides of foreign capital surged into East Asia and Latin
America, and then abruptly reversed. At a moment's notice,
hitherto-successful economies were plunged deep into
recession.
These experiences served only to underline the lesson of
previous financial decades. Yet it is a lesson that
governments remain decidedly reluctant to learn. Big inflows
of foreign capital present developing countries with a nearly
irresistible opportunity to accelerate their economic
development. Where those flows are of foreign direct
investment, they are all to the good. But in other cases,
disaster beckons unless a series of demanding preconditions
are met first. A flood of capital into an economy with
immature and poorly regulated financial institutions can do
more harm than good.
Unquestionably, developing countries should strive to
improve their financial systems so that foreign capital can
be successfully absorbed. Good government, sophisticated
financial firms, and regulators who are honest and competent
cannot eliminate the risk of financial calamity altogether,
but they can reduce it to bearable proportions. At that point
a liberal regime for international capital makes sense. The
trouble is, many developing countries are nowhere near that
point.
Rich-country governments and, until recently, the
International Monetary Fund have often seemed reluctant to
endorse this notion. One might say the same of The Economist.
This reluctance is defensible Often, indeed typically,
governments have abused capital controls in ways that oppress
their citizens and do grave economic harm. It seems safer to
frown on any and all controls--and, in those cases where they
have been used intelligently and successfully, to acknowledge
any success very grudgingly. But this is dishonest. It is
better to face up to the case for such rules in some
circumstances and thing hard about how to use them sensibly,
with restraint.

In from the cold

Experience suggests some rules. Refrain from blocking
capital outflows (tempting as this might be at times of
crisis). Such measures are usually oppressive, and deter
future inflows of all kinds. Poor countries need all the
foreign direct investment they can get: let inflows of FDI be
unconfined. Other long-term inflows also pose little threat
to stability. The chief danger lies with heavy inflows of
short-term capital, bank lending above all. These can be
difficult to stem, but many developing countries would do
well to emulate the successful experience of Chile, which has
imposed taxes on such inflows, with the rate of tax varying
according to the holding period. In negotiating new free-
trade arrangements with Chile (and with Singapore), the
United States has recently sought assurances of complete
capital-account liberalization. Bitter experience suggests
that such demands are a mistake. It is past time to revise
economic orthodoxy on this subject.

[[Page H7485]]

____
(By Joseph E. Stiglitz, Professor of Economics and Finance, Columbia
University)

The importance of the subject of these hearings cannot be
overestimated. There are implications for global economic
stability and poverty reduction, and continuing progress in
trade liberalization, as well as for broader relations with
other countries around the world.
The provisions in the recent trade agreements with Chile
and Singapore limiting government interventions in short term
capital flows are a major source of concern. Everything
should be done to eliminate them from the agreements, and to
make sure that such provisions are not inserted into further
trade agreements.
The purpose of trade agreements is to facilitate trade, and
to eliminate trade barriers among countries. In principle,
reducing such trade barriers can be of benefit to all
policies on the part of government require that they maintain
reserves equal to the amounts that they hold in short term
foreign denominated liabilities. Hence, when a firm within a
poor developing country borrows short term abroad, it in
effect forces the government to set aside a corresponding
amount in reserves, typically held in U.S. dollar T-bills. In
effect, the country is borrowing, say, $100 million from
American bank, paying say, 18 percent interest, and at the
same time lending precisely the same amount to the U.S., and
receiving today less than 2 percent interest. The country as
a whole loses on the entire transaction. The money the
government put into reserves could have yielded far higher
returns, say invested in education, roads, or health. It is
no wonder then that so many countries have been so skeptical
about capital account liberalization.
Chile, in its period of rapid economic growth, in the early
90s, imposed restrictions on the inflow of capital. I believe
that such restrictions play an important role in its growth
and stability. In particular, it meant that when global
capital markets suddenly changed their attitudes towards
emerging markets, and when capital started flowing out of
them and the markets insisted on far higher interest rates,
Chile was spared the pains inflicted on so many other
countries (though of course it still faced problems caused by
changing copper prices.) Such restrictions on capital inflows
are of limited relevance in the current economic situation--
with an overall dearth of capital flows to emerging markets--
hopefully, at some time in the future, when capital flows are
more abundant, Chile might find it in its own best interests
to dampen these flows, to avoid the irrational exuberance
that has affected so many countries. Whether Chile chooses to
do so should be a matter of its own determination.
By the same token, the developing countries in Asia that
have grown the fastest, done the most to eliminate poverty,
and exhibited the greatest stability have all intervened
actively in capital markets at critical stages in their
development--and many continue to do so today. They have
shown forcefully that one can attract huge amounts of foreign
direct investment, without fully liberalizing markets to
short term speculative flows.
Using our economic power and the promise or hope of
increased investment and exports, to impose the viewpoint of
particular set of interests, or particularly ideology, on our
trading partners. Trade should be bringing us all closer
together. Trade agreements with these kinds of provisions are
likely to do just the opposite. This is especially the case
if the kinds of patterns we have observed in recent years
continue, with the short term capital flows contributing so
much to instability, and with its accompaniment of insecurity
and poverty.
The arguments for trade liberalization is totally distinct
from those for capital market liberalization. They share in
common but one word, ``liberalization''. There is an emerging
consensus among economists that emerging markets should be
particularly wary about full capital account liberalization,
exposing themselves to the vicissitudes of short term
speculative capital flows. It makes little sense for our
trade agreements to be pushing on our trading partners
restrictions which fly in the face of sound economics.

Mr. BRADY of Texas. Mr. Speaker, I yield myself such time as I may
consume.
In conclusion, what does this trade agreement mean for America and
for American workers? Our answer is, a lot for our future. In this
agreement there will be new opportunities for workers, especially those
in manufacturing-type companies, because much of the tariffs will be
immediately taken away for consumer and industrial products.
It means that our products will be more competitive. That is
important if you are a worker in a company that sells construction
equipment, automobiles and automobile parts, computers and other
information technology products, or if you work for a company that
sells medical equipment and paper products.
This agreement is important for U.S. farmers and ranchers because
most of the farm goods will be tariff-free within 4 years. That is
important if you are selling pork in America, pork and pork products,
beef and beef products, soybeans and meal, durum wheat, feed grains,
potatoes and processed foods, these are jobs for your industry.
This provides access to the fast-growing services market in Chile.
That is important if you work for a U.S. bank, for a U.S. insurance
company, for an American telecommunications firm. If you work in a U.S.
securities firm or an express delivery company, if you are a
professional in that area, these are new opportunities for sales for
your company and for yourself.
This is a trade agreement for the Digital Age. So it is important for
workers who work in U.S. software, which is a growing part of our
economy, in the music world, in the video and text world, these are
record protections for our patents, for the work that American workers
and inventions that we have created.
This is important for U.S. investors with strong protections and a
secure, predictable legal framework for those of us who will invest in
Chile. It is important if you are a company who wants to sell to the
Chilean government because it creates ground-breaking anticorruption
measures and guarantees that we have a fair and transparent process to
sell our goods and services to a big range of Chilean government
entities, including airports and seaports.
Finally, these are strong protections for labor and environment. Both
governments commit to enforce their domestic labor and environmental
laws. There is an innovative enforcement mechanism that includes
monetary assessments to make sure that commercial, labor and
environmental obligations are met. These cooperative projects will help
protect wildlife, reduce environmental hazards and promote
internationally recognized labor rights.
In conclusion, Mr. Speaker, if we do not pass this trade agreement,
we will pass over a billion dollars worth of sales that we could have
with Chile each year, a billion dollars that will create a lot of U.S.
jobs and save a lot of U.S. workers in America.

{time} 1230

The time is now for a free trade agreement between U.S. and Chile, a
time for new American jobs, for new American growth, for our economic
future.
Mr. RAMSTAD. Mr. Speaker, I rise today in strong support of H.R.
2738, the ``U.S.-Chile Free Trade Agreement Implementation Act.''
Last Congress, we passed Trade Promotion Authority to open markets
for American products, create jobs and get the best deal possible for
our businesses and workers. Our legislative efforts are beginning to
pay off with our first two bilateral Free Trade Agreements, with Chile
and Singapore.
Mr. Speaker, Chile represents a particular benefit because it is the
first free trade pact between the U.S. and a South American country,
opening important new inroads into the continent.
Through the personal mission work I've done in South America, I can
tell you firsthand that it's long past time we pay more attention to
the economic problems of our South American neighbors. And our initial
inroads in Chile, hopefully followed by a Central American Free Trade
Agreement will go along way toward achieving our goal of a Free Trade
Area of the Americas.
Mr. Speaker, Chile has one of the fastest growing economies in the
world. Over the last two decades, Chile has established a vigorous
democracy, a thriving and open economy built on trade and a free-market
society.
The U.S.-Chile Free Trade Agreement will help Chile continue its
impressive record of growth, development and poverty alleviation. It
will help spur progress toward our larger goal of creating a Free Trade
Area of the Americas and will send a strong message to the rest of the
world that we will work in partnership with those who are committed to
free markets.
The best part, though, is that reducing trade barriers is not a zero-
sum game. Free Trade agreements open markets for American companies,
improving the American economy and providing more American jobs!
Unfortunately, because we are so behind in international trade
agreements, U.S. companies are at a steep competitive disadvantage in
Chile because other countries, including Canada, Mexico and the
European Union, already have Free Trade Agreements with Chile.
The U.S.-Chile Free Trade Agreement takes away the advantage these
countries have and will expand U.S. GDP by approximately $4 billion.

[[Page H7486]]

Mr. Speaker, it's long past time the U.S. actively engaged our
foreign trade partners to negotiate bilateral and multi-lateral trade
agreements. Our manufacturers, farmers and businesses depend on our
swift action in opening up new markets for their products. The U.S.-
Chile Free Trade Agreement represents an excellent start to what I hope
will lead to several more bilateral and multilateral Free Trade
Agreements in the near future.
Mr. Speaker, let's pass this legislation and help put people back to
work!
Mr. ETHERIDGE. Mr. Speaker, I rise today to announce my support for
H.R. 2738, legislation implementing a free trade agreement with the
nation of Chile.
Chile has consistently been a partner with the United States in
pushing for more open and freer trade throughout the world. Since the
1970s, Chile has pursued a policy of unilateral trade opening through
the systematic and sustained lowering of import tariffs and the near
total elimination of non-tariff barriers. It is therefore only fitting
that one of America's first free trade agreements of the 21st Century
will be with this nation.
Chile currently has signed more free trade and economic agreements
with other nations than has the United States. By passing this
agreement, U.S. exports to Chile will now be on an equal footing with
exports from Canada, Mexico, the European Union, and many other Latin
American nations.
I am particularly pleased about the benefits this agreement provides
with respect to agriculture. For example, all tariffs on pork and pork
products will be eliminated immediately upon implementation. Due to the
hard work of the folks at USTR, Chile has agreed to recognize the U.S.
meat-inspection system.
Several other commodities important to North Carolina also will
receive immediate duty-free access to Chile, including cotton and
tobacco. While North Carolina poultry does not get immediate access,
tariffs will be reduced over the next 10 years.
This is an acceptable agreement for a nation as economically advanced
and sophisticated as Chile. However, I want to make it perfectly clear
to the Administration that the Chile Free Trade Agreement and the
Singapore Agreement are not sufficient models for future trade
agreements.
Currently, the Administration is negotiating a Free Trade Agreement
of the Americas, a Central American Free Trade Agreement, and several
other FTAs with a variety of nations. As the Administration's first
attempts to negotiate a free trade agreement, I believe Singapore and
Chile deserve support. However, future agreements will prove to be much
more difficult tests of the Administration.
I support fair trade. However, on future FTAs, the Administration
will need to do a better job with regard to market access, sanitary and
phytosanitary issues, labor and environmental standards, and
intellectual property protection. I look forward to continuing to work
with the Administration and my colleagues in Congress on all of these
important issues.
I ask my colleagues to support this bill.
Mr. KIND. Mr. Speaker, I rise today in support of the Chile-U.S. Free
Trade Agreement (FTA). While I maintain reservations about certain
sections of this agreement, overall I believe that this FTA succeeds in
lowering tariffs on American goods entering Chile and will benefit
Wisconsin and the United States.
As our Nation leads the world into the 21st century, we should not
shy from opportunities to guide and expand global trade. Chile has
persevered as a model of successful, pro-trade economic growth in a
region scarred by economic turmoil. Our enhanced engagement with Chile,
symbolized in the free trade agreement, is a necessary commitment to
stability and economic prosperity in Latin America, while at the same
time serving to expand American export opportunities.
The U.S.-Chile Agreement will essentially level the playing field for
U.S. companies and workers. Currently, Chile imposes a uniform tariff
of six percent on American exports. Under this agreement, the tariff
will be eliminated immediately on approximately 85 percent of U.S.
exports. Tariffs on the remaining exports will phase out over the next
4 to 12 years. In comparison, 65 percent of Chile's exports enter the
United States duty-free under the Generalized System of Preferences
program, with the remaining goods facing an average duty of 0.5
percent.
With the United States economy still in a slump, the consequences of
not pursuing an FTA with Chile are extreme for American workers. In
2001, exports from the United States to Chile totaled over $3 billion.
This was 17 percent of all imports into Chile and made the U.S. Chile's
largest single country trade partner. Over the past 2 years, however,
the percentage of American imports into Chile has decreased as other
international competitors have completed FTA's with Chile, including
Mexico, Canada, Central America, European Union, and South Korea, and
have taken over as major suppliers to the Chilean market. As a result,
the U.S. has seen its share of the Chilean market drop by one third,
and its bilateral trade position reverse from surplus to deficit.
This define in market share is evident in my home state of Wisconsin.
For example, in 2000, Wisconsin exports to Chile totaled over $120
million--in the top quarter of all U.S. states. Of this amount, over
$90 million was in industrial machinery. However, in 2002, Wisconsin
exports to Chile declined to $72 million total and $47 million in
industrial machinery.
The FTA with Chile will benefit Wisconsin in additional ways,
including opening up the Chilean market to U.S. agriculture imports.
Chile's tariffs on dairy imports from the U.S. will drop from as high
as ten percent to zero in four years. The National Milk Producers
Federation expects that exports will increase by several million
dollars during the first few years of the agreement, and continue to
grown down the road.
As I mentioned earlier, I do have concerns with this agreement, but
on its merits, I believe the FTA with Chile addresses a number of
important issues and will benefit the American economy. Today's trade
environment is constantly changing, with non-tariff trade issues
impacting all aspects of our economy and law. Through 14 rounds of
negations over 2 years, negotiators were able to hammer out agreements
on very complicated and important issues including intellectual
property, e-commerce, agriculture, market access, and government
procurement. In these respects, this FTA addresses growing challenges
facing international trade in the 21st century.
Controversy remains on a few very important aspects of any trade
agreement--those dealing with labor and environment. While these
provisions are some of the most difficult to find agreement on with
potential trade partners, I along with many in Congress, believe trade
agreements can serve to raise labor and environmental standards in
developing nations and that such provisions must be included in
bilateral trade agreements.
While differing from the labor provisions in the Jordan agreement,
the labor language in this bill, requiring Chile to enforce its labor
laws or be subject to penalty, is acceptable because there is wide
agreement that Chile's labor laws are consistent with high
International Labor Organization standards and are systematically
enforced. In addition, there is wide agreement that, while possible, it
is very unlikely that Chile would ever lower labor standards to entice
trade.
I, along with many members, also remain concerned with the inclusion
of immigration policy in a fast tracked trade bill. While the USTR
argues that the temporary workers provisions can be an aspect of
services trade, I believe that Congress must thoroughly debate any
changes to immigration policy. These objections were strongly conveyed
by my colleagues and I to the USTR, and as a result the implementing
language before us includes language placing certain H1-B visa
restrictions and caps on the temporary worker provisions in this
agreement that were previously excluded.
Trade agreements cannot be one-size-fits-all, and this comprehensive
bilateral agreement conforms to the characteristics of Chile and the
United States. With an open and developed economy grounded in market-
based principles, a strong and growing middle class, a credible labor
movement, and laws respecting human rights, Chile is a model trading
partner. It is in the strategic interest, and economic interest of the
United States to engage Chile and complete our nation's 5th bilateral
free trade agreement. I urge my colleagues to support this agreement.
Ms. LEE. Mr. Speaker. I rise in opposition to H.R. 2738, the Chile
Free Trade Agreement.
Last year, this House passed a free trade agreement that I voted for
because it encouraged commerce while protecting important labor and
environmental standards and protecting American jobs.
The Chilean FTA and the Singapore agreement we will be voting on
shortly, represent the products of Fast Track: Congress has no chance
to remedy fundamental flaws in these bills. We are asked to accept what
the President hands us, and in this case the Administration has handed
us two bills that represent a step backward.
These bills do not uphold basic labor standards.
We set a terrible precedent if we pass these bills without adequate
labor provisions because I guarantee you this weak standard will be
replicated in future trade agreements.
We see the same shortfall on environmental standards and thus we set
a bad precedent in that regard as well.
We need to be promoting sustainable development and environmentally
sustainable trade--it's in the American interest.
Finally, this bill and its companion will continue to erode the
American job base. NAFTA has cost hundreds of thousands of American
jobs.
These trade agreements and those that will follow in their path will
accelerate this job loss,

[[Page H7487]]

further damaging an economy that is already spiraling down in a jobs
depression.
Labor and environmental standards are not luxuries: they are
essential ingredients to a sound trading policy. We could have built on
the Jordanian standard; instead, these bills fall short.
I urge you to oppose this bill.
Mr. SHAYS. Mr. Speaker, I rise in strong support of this legislation
to implement free trade agreements that have been negotiated with Chile
and Singapore. These agreements are an important step in restoring our
international competitiveness, stimulating our economy and promoting
long-term economic growth.
The Administration's first two negotiated agreements since receiving
trade promotion authority in 2002 will benefit businesses in
Connecticut, which exported $279 million worth of goods to Singapore
and $59 million worth of goods to Chile in 2000. More broadly, these
agreements provide an excellent framework for creating larger free
trade areas.
Chile could be a model for creating a Central American Free Trade
Agreement, and even more broadly, a Free Trade Area of the Americas.
The country is an ideal partner in South America because, unlike many
other nations in the region, it has stabilized and restructured its
economy, lifting price controls, deregulating labor markets, and
privatizing state enterprises.
The United States is Chile's largest single-country trading partner,
accounting for 20 percent of Chilean exports and 15 percent of imports
in 2002. Chile is the United States' 34th largest export destination
and 36th largest import contributor, but because Chile already has free
trade agreements with other countries, including Canada, an agreement
with Chile is critical to reduce the relatively high tariffs U.S.
businesses face compared to these countries, and allow them to compete.
Singapore is a much larger trading partner for the United States. It
is our 11th largest export market, with $16.2 billion in goods, and the
16th largest source for imports, with $14.8 billion. The United States
is Singapore's second-largest trading partner, after Malaysia and
before even Japan. Both countries already have relatively open trade
with very low tariffs, if any at all, so the implementation of this
agreement should not create a significant imbalance of any sort.
Southeast Asia generally has been a poor partner in trade, with
average tariffs near 30 percent, and I have serious concerns about
these nations' respect for intellectual property (IP) rights, but this
agreement is a step in the right direction. The agreement allows U.S.
companies to receive monetary compensation in cases where IP rights
have been violated, and establishes tough penalties under Singapore law
for IP violators.
In my judgment, trade can have a positive effect on social reforms
and environmental protections by facilitating economic development and
creating both the income and the institutional structures to address
those issues.
Since 1994, when trade promotion authority expired, the United States
has been steadily losing its status as the leader of free trade. We
can't afford to let this decline continue. Passing trade promotion
authority was like setting up a ladder that gives us the ability to get
back to the top, and passing these two free trade agreements takes the
first steps up that ladder. I urge my colleagues to support H.R. 2738
and H.R. 2739.
Ms. SLAUGHTER. Mr. Speaker, I rise in strong opposition to the
Singapore and Chile Free Trade Agreements. Such flawed bilateral
agreements risk further weakening our economy at a time of record trade
deficits and when our nation's unemployment rate is at its highest
point in nine years. I cannot support these agreements, which will
simply send millions of American manufacturing jobs overseas. I will
not put the economic security of my constituents at stake.
Our domestic manufacturing sector has been decimated by the so-called
``liberalization of world trade.'' Since enactment of the North
American Free Trade Agreement (NAFTA) and China's entry into the World
Trade Organization, the U.S. has experienced a net loss of three
million jobs, according to the Economic Policy Institute. In the
manufacturing sector alone, we have experience a free fall, with more
than 1.7 million jobs lost. The liberalization of world trade and the
emergence of nations like China, India and Mexico as centers of
manufacturing and technology for U.S. firms has certainly played a role
in speeding the decline of U.S. industry.
Mexico and China are not solely to blame for the fact that my own
district of Rochester, New York, in my district, has lost half of its
manufacturing base in the past two decades. However, I doubt that
Eastman Kodak would have moved its entire disposable camera
manufacturing operation, ``lock, stock, and barrel'' to Mexico and
China last year, in the absence of NAFTA and WTO trade preferences.
My constituents will, no doubt, appreciate the bitter irony that
Congress is considering these bills--that are being touted as job-
creating initiatives--when, just yesterday, Kodak, which has a long,
storied history in Rochester, announced that between two and three
thousand jobs would be eliminated in Rochester (6,500 worldwide). Kodak
attributes its decision to the fact that its film business has been
significantly weakened, with the emergence of the digital camera
market. Where are those jobs going? Certainly, Kodak is not going to
abandon its film manufacturing altogether? No, those jobs are going
overseas, to our trading partners--where wages are low, labor standards
are spotty, and the environment is free for the poisoning.
I cannot help but be struck by the glaring reality of what has
happened to Kodak's Rochester workforce, about 40,000 jobs lost--never
to return--since 1990. In the days leading up to the vote on NAFTA,
Kodak tried to assure me that NAFTA would be a ``job-creator''--that
Rochester would be booming--that the only jobs that would move abroad
would be low-skilled, low-paying. I take no pleasure in saying that
Kodak's vision has not come to pass.
At the same time, there's more bad news from Kodak. Kodak is again
poised to leave behind its loyal employees and a region that has
treated it well as it ships new technology overseas. On Monday, Kodak
announced that it plans to begin manufacturing part of its
revolutionary new display technology in China. The company has entered
into a licensing agreement with a Hong Kong firm to manufacture Kodak's
organic light emitting diode display (OLED). This technology, developed
in the U.S., represents a major breakthrough in display technology with
untold potential for consumer and military products. Making matters
worse, Kodak's OLED production facility will be the first of its kind
in China--a move that could foreclose any hope of OLED production ever
growing in the U.S. This decision represents another missed opportunity
to rebuild our electronic component sector.
Mr. Speaker, regrettably Rochester's experience with Kodak is not
unique. As an active member of the Congressional Manufacturing Caucus,
I know that this issue cuts across party lines, state lines, and
economic class. Given what we know about the costs of trade
liberalization, enactment of these two bilateral agreements would be
tantamount to aiding and abetting in the destruction of our
manufacturing base.
When we look at the agreements themselves, I am very disappointed
that they fail to establish sufficient enforcement of labor and
environmental protections and would loosen U.S. immigration policy
regarding temporary entry of workers. Rather than building on the
positive labor and environmental provisions in the U.S.-Jordan Free
Trade Agreement, these agreements place no requirement on Chile and
Singapore to adhere to internationally recognized labor principles.
With the Central American Free Trade Agreement and the Free Trade Area
of the Americas (FTAA) in the pipeline, these agreements are a terrible
model. Simply put, a vote for the U.S.-Chile and U.S.-Singapore
agreements would send a signal that the weak labor standards in them
are acceptable.
Mr. Speaker, I urge my colleagues to join me in rejecting these
flawed agreements.
Mr. MOORE. Mr. Speaker, I rise in support of both H.R. 2738 and H.R.
2739, the U.S.-Chile and U.S.-Singapore Free Trade Agreements,
respectively.
Globalization is here to stay. With markets now linked globally by
computers, satellite communications, and advanced transportation
networks, international trade and investment will play an increasing
role in American prosperity. We cannot, as a nation, afford to retreat
from a proactive strategy of trade expansion that takes advantage of
our position as the world's most prosperous and dynamic economy.
I have great faith in American workers. They are the best in the
world. And, I'm convinced they can compete with workers from any other
country.
Trade liberalization is also an important tool towards developing
responsible global relations. It is a tool, as the preamble of the GATT
states, for ``raising standards of living, ensuring full employment,
developing the full use of the resources of the world and expanding the
production and exchange of goods.'' Indeed, open markets are an
important engine of economic growth, which can expand opportunities,
raise living standards, and affect social change. Perhaps most
importantly, however, trade liberalization provides our nation with an
additional diplomatic tool and a forum within which our nation may deal
with international disputes and/or coalition building. Trade's national
security component cannot be understated.
The Chile and Singapore Free Trade Agreements include strong and
comprehensive commitments from both of these nations to open their
goods, agricultural and service markets to U.S. producers. These
agreements include commitments that will increase regulatory
transparency and act to the benefit of U.S.

[[Page H7488]]

workers, investors, intellectual property holders, businesses and
consumers.
While some of the provisions in these FTAs could serve as a model for
other agreements, a number of provisions clearly cannot be, nor should
they be. As a general rule, I believe that each country or countries
with whom we negotiate are unique; and while the provisions contained
in the Chile and Singapore FTAs work for Chile and Singapore, they may
not be appropriate for FTAs with other countries, where may exist very
different circumstances.
Indeed, concerns have been raised that the Administration may use
some of their provisions contained in the agreements as models for
other FTAs, such as the Central America Free Trade Agreement (CAFTA),
where the conditions may make it inappropriate to do so. Specifically,
with regard to the labor and environmental provisions, there are
separate dispute settlement rules that place arbitrary caps on the
enforceability of those provisions. Moreover, these agreements contain
an ``enforce your own laws'' standard for dealing with labor and
environmental disputes. In the context of Chile and Singapore, I have
limited concerns about this standard since both of these countries'
laws essentially reflect internationally recognized core labor rights.
How they are applied does vary in the two countries, reflecting the
different general characteristics of the two nations; however, there is
little practical concern that these countries will backtrack.
Concerns about labor and environmental standards, however, should
receive careful scrutiny on a case-by-case basis as different
circumstances and situations warrant. Use of the ``enforce your own
law'' standard is invalid as a precedent--indeed is a contradiction to
the purpose of promoting enforceable core labor standards--when a
country's laws clearly do not reflect international standards and when
there is a history, not only of non-enforcement, but of a hostile
environment towards the rights of workers to organize and bargain
collectively. Using a standard in totally different circumstances will
lead to totally different results.
As such, my vote for the Chile and Singapore FTAs should not be
interpreted as support for using these agreements as boilerplate models
for future trade negotiations. I will evaluate all future trade
agreements on their merits and their applicability to each country to
ensure that core international labor rights and environmental standards
are addressed in a meaningful manner. Expanded trade is important to
this country and the world; but it will be beneficial to a broad range
of persons in our nation and in other nations only if these trade
agreements are carefully shaped to include basic standards, including
the requirement that nations compete on the basis of core rights for
their workers, not by suppression of these basic rights.
The Singapore and Chile FTAs meet these standards and I urge my
colleagues to support these two important initiatives.
Mr. SHAW. Mr. Speaker, I rise today in support of H.R. 2738, the
United States-Chile Free Trade Implementation Act. A free trade
agreement with Chile is tremendously important to U.S. trading
interests with our South American neighbors.
The legislation before us provides a new market access for U.S.
Consumer and industrial products, new opportunities for U.S. financial
institutions, an open and competitive telecommunications market,
protections for U.S. investors, common ground on environmental
protections, and allows for 85 percent of consumer and industrial
products to become duty-free.
Chile is a trade leader in South America. Over the last decade, Chile
has doubled its gross domestic product and has become the 4th fastest
growing economy in the world. This success stemmed from low inflation,
a balanced national budget, a vigilance to eliminate corruption and a
strong financial infrastructure. In securing this agreement, we
acknowledge the leadership of the Lagos Administration both in Santiago
and here in Washington.
Mr. Speaker, I congratulate Ambassador Robert Zoellick and his
distinguished team at USTR in crafting what can truly be called a world
class agreement. Free trade is the future of the U.S. economy. I urge
my colleagues to support H.R. 2738.
Mr. UDALL of New Mexico. Mr. Speaker, I rise today in opposition to
H.R. 2738 and H.R. 2739, the U.S.-Chile FTA Implementation Act and the
U.S.-Singapore FTA Implementation Act, respectively. It is unfortunate
that I find myself in this position because I want to support trade
agreements because I believe they can have a positive effect on our
economy. However, they only can have a positive effect if they are
negotiated properly. They only can have a positive effect if they have
strong labor, environmental, and consumer protections. Unfortunately,
these two bills before us, and the underlying Free Trade Agreements,
are woefully inadequate in these regards.
Unlike the U.S.-Jordan FTA, which passed unanimously in the 107th
Congress, these FTAs--the first signed by the Administration since
passage of Trade Promotion Authority--will set a dangerous precedent
for future agreements, including the Central American FTA and the Free
Trade Area of the Americas (FTAA).
Unlike the U.S.-Jordan FTA, which provided workers with enforceable
protections based on the core International Labor Organizations
workers' rights--freedom of association; the right to bargain
collectively; prohibitions on child labor, forced labor and employment
discrimination, these FTAs give scant attention to these important
issues. The only reference to workers' rights is a provision stating
that each party ``shall not fail to effectively enforce its labor
laws,'' not matter how inadequate they may be. There is no parity
between our strong labor laws here in the United States and the weak
protections in Singapore or Chile.
As predicted during the TPA debate during the 107th Congress, these
trade agreements are bad environmental policy--and now, we have no
change to amend them. Contrary to the claims of the FTA supporters, the
provisions on investment in the Chile and Singapore FTAs do not meet
the requirements of the Trade Act of 2002 that foreign investors should
receive ``no greater substantive rights'' than U.S. citizens under U.S.
law. What this means is that foreign investors will be granted broad
rights under international law that do not exist under U.S. law. For
example, many companies have aggressively used NAFTA's Chapter 11
authority to undermine our strong environmental protections. This
continues with the Chile and Singapore FTAs where foreign investors can
bring suit against our laws to prevent pollution because they may claim
a right to be compensated. This is just one example. Applied broadly,
these two FTAs have investment language that could cause serious harm
to the environment and the public interest.
The Chile and Singapore FTAs also undermine U.S. immigration policy.
Specifically, they loosen policies regarding temporary entry to
workers. Some claim the H1-B visa issue has been addressed. However,
this is far from true. While the implementing legislation claims to
``fix'' the problem by limiting the damage by applying some elements of
the H1-B, these provisions are not legally binding because the
agreements in the actual trade agreement have been violated by these
``fixes'' and will be eliminated in the pacts' dispute resolution
systems. Furthermore, the Chile FTA has an unprecedented requirement
that the U.S. provide ``written justification'' to any person denied a
visa.

The Singapore FTA contains Integrated Sourcing Initiative (ISI)/
Transshipment permissions. Last year's Fast Track, or Trade Promotion
Authority contained no authority to negotiate such deals. Yet, the U.S.
Trade Representative has this deal in the FTA, and the so-called
``fix'' largely replicates existing terms in the World Trade
Organization Information Technology Agreement, for which even the
Clinton Administration--as pro-free trade as any--never sought
congressional approval.
Also, these FTAs could have very negative affects on the health care
system. They will impede the access to life-saving medicines by
extending patents beyond the 20-year limit required by the Trade-
Related Aspects of Intellection Property Rights (TRIPS); they will
require a 5-year waiting period before governments can provide generic
drug producers test data, thereby delaying affordable medicines; they
also will permit major pharmaceutical companies to block the production
of generic medicines. Also, the Singapore FTA reduces tobacco tariffs
to zero, which actually will encourage more dumping of U.S. tobacco
products in Singapore. Finally, these FTAs will open the door to
further privatization and deregulation of vital human services
including health care professionals, and the provisions for public
control of water and sanitation services. Amazingly, these FTAs will
leave the U.S. open to challenges from foreign private corporations and
the subsidiaries to compete for these public sector services. This is
just plain wrong.
Finally, some have claimed to have ``fixed'' this legislation with a
``mock mark-up'' in the Ways and Means Committee. I'm not quite certain
what a ``mock mark-up'' is, but most believe it hasn't done anything.
Specifically, some who support this implementing legislation say we
have two choices: one, we can block this legislation to send a message
to the administration that they need to do a better job of negotiating
FTAs that have real environmental and labor protections. Or, two, we
can approve this implementing legislation, and then send a message to
the White House to do a better job the next time. I, for one, am not
willing to take that risk--the risk that this White House and this USTR
will actually listen to Congress. That is one of the reasons I voted
against TPA in the first place. Sadly, many of my concerns and reason
for voting no have come to fruition in these first two negotiations.
I want to support free trade because I know it has the potential to
help American workers

[[Page H7489]]

and consumers. In fact, I have supported trade agreements previously,
including the U.S.-Jordan FTA. Unfortunately, however, I cannot find
many positive developments in either the U.S.-Chile Free Trade
Agreement or the U.S.-Singapore Free Trade Agreements. Reluctantly, Mr.
Speaker, I will vote ``no''on H.R. 2738 and on H.R. 2739. I urge my
colleagues to do likewise.
Mr. BRADY of Texas. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Linder). Pursuant to House Resolution
329, the bill is considered read for amendment, and the previous
question is ordered.
The question is on the engrossment and third reading of the bill.
Pursuant to section 3 of House Resolution 329, the Chair postpones
further consideration of the bill until later today.

____________________