[Congressional Record Volume 157, Number 115 (Thursday, July 28, 2011)]
[Senate]
[Pages S5020-S5022]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN:
  S. 1443. A bill to extend certain trade preferences to certain least-
developed countries in Asia and the South Pacific, and for other 
purposes; to the Committee on Finance.
  Mrs. FEINSTEIN. Mr. President, I rise today to introduce the Asia-
South Pacific Trade Preferences Act to help some of the world's poorest 
countries sustain vital export industries and promote economic growth 
and political stability.
  This legislation will provide duty free and quota free benefits for 
garments and other products similar to those afforded to beneficiary 
countries under the Africa Growth and Opportunity Act.
  The countries covered by this legislation are 13 Least Developed 
Countries, LDCs, as defined by the United Nations and the U.S. State 
Department, which are not covered by any current U.S. trade preference 
program: Afghanistan, Bangladesh, Bhutan, Cambodia, Kiribati, Laos, 
Maldives, Nepal, Samoa, Solomon Islands, East Timor, Tuvalu, and 
Vanuatu.
  They are among the poorest countries in the world.
  Nepal has per capita income of $240. Unemployment in Bangladesh 
stands at 40 percent. Approximately 36 percent of Cambodia's population 
lives below the poverty line.
  Each country faces critical challenges in the years ahead including 
poor health care, insufficient educational opportunities, high HIV/AIDS 
rates, and the effects of war and civil strife.
  The United States must take a leadership role in providing much 
needed assistance to the people of these countries.
  Yet humanitarian and development assistance should not be the sum 
total of our efforts to put these countries on the road to economic 
prosperity and political stability.
  Indeed, the key for sustained growth and rising standards of living 
will be the ability of each of these countries to create vital export 
industries to compete in a free and open global marketplace.
  We should help these countries help themselves by opening the U.S. 
market to their exports as we have done for other developing countries 
in the past.
  By doing so, we will demonstrate the best of American values: 
reaching out to a neighbor in need and helping him to stand on his own 
two feet.
  Success in this endeavor will ultimately allow these countries to 
become less dependent on foreign aid and allow the United States to 
provide assistance to countries in greater need.
  But make no mistake. These countries will not automatically receive 
the trade benefits provided by this legislation.
  Our efforts to promote economic growth, jobs, and political stability 
will fail if these countries are strangled by human rights abuses, 
corruption, and the absence of the rule of law.
  Instead of lifting the citizens of these countries out of poverty and 
giving hope for a better future, we will ignore our values and sustain 
the status quo.
  So, this legislation has been drafted to ensure that the benefits are 
granted on a performance-driven basis.
  That is, to be eligible, a beneficiary country must demonstrate that 
it is making continual progress toward establishing rule of law, 
political pluralism, the right to due process, and a market-based 
economy that protects private property rights.
  So, this legislation would help promote democracy, human rights, and 
the rule of law while sustaining vital export industries and creating 
employment opportunities.
  The beneficiary countries have a clear incentive to stay on the right 
path or they will lose the benefits of this bill.
  I firmly believe that these benefits will make a difference.
  The garment industry is a key part of the manufacturing sector in 
some of these countries.
  In Nepal, the garment industry is entirely export oriented and 
accounts for 40 percent of foreign exchange earnings. It employs over 
100,000 workers, half of them women, and sustains the livelihood of 
over 350,000 people.
  The United States is the largest market for Nepalese garments and 
accounts for 80-90 percent of Nepal's total exports every year.
  In Cambodia, approximately 250,000 Cambodians work in the garment 
industry supporting approximately one million dependents. The garment 
industry accounts for more than 90 percent of Cambodia's export 
earnings.
  In Bangladesh, the garment industry accounts for 75 percent of export 
earnings. The industry employs 1.8 million

[[Page S5021]]

people, 90 percent of whom are women, and sustains the livelihoods of 
10 to 15 million people.
  Despite the poverty seen in these countries and the importance of the 
garment industry and the U.S. market, they face some of the highest 
U.S. tariffs in the world, averaging over 15 percent.
  In contrast, countries like Japan and our European partners face 
tariffs that are nearly zero.
  Surely we can do better.
  By targeting the garment industry, we can make a real difference now 
in promoting economic growth and higher standards of living.
  This legislation will help these countries compete in the U.S. market 
and lift their and let their citizens know that Americans are committed 
to helping them realize a better future for themselves and their 
families.
  Doing so is consistent with U.S. goals to combat poverty, 
instability, and terrorism in a critical part of the world. We should 
not forget that the vast majority of the people from these beneficiary 
countries are Muslim.
  The impact on U.S. jobs will be minimal.
  Currently, the beneficiary countries under this legislation account 
for only 4 percent of U.S. textile and apparel imports, compared to 24 
percent for China, and 72 percent for the rest of the world.
  These countries will continue to be small players in the U.S. market, 
but the benefits of this legislation will have a major impact on their 
export economies.
  At a time when we are trying to rebuild the image of the U.S. around 
the world, we need legislation such as this to show the best of America 
and American values. It will provide a vital component to our 
development strategy and add another tool to the war on terror. I urge 
my colleagues to support this bill.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1443

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Asia-South Pacific Trade 
     Preferences Act''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) It is in the mutual interest of the United States and 
     least-developed countries to promote stable and sustainable 
     economic growth and development.
       (2) Trade and investment are powerful economic tools and 
     can be used to reduce poverty and raise the standard of 
     living in a country.
       (3) A country that is open to trade may increase its 
     economic growth.
       (4) Trade and investment often lead to employment 
     opportunities and often help alleviate poverty.
       (5) Least-developed countries have a particular challenge 
     in meeting the economic requirements of and competitiveness 
     necessary for globalization and international markets.
       (6) The United States has recognized the benefits that 
     international trade provides to least-developed countries by 
     enacting the Generalized System of Preferences and trade 
     benefits for developing countries in the Caribbean, Andean, 
     and sub-Saharan African regions of the world.
       (7) Enhanced trade with least-developed Muslim countries, 
     including Yemen, Afghanistan, and Bangladesh, is consistent 
     with other United States objectives of encouraging a strong 
     private sector and individual economic empowerment in those 
     countries.
       (8) Offering least-developed countries enhanced trade 
     preferences will encourage both higher levels of trade and 
     direct investment in support of positive economic and 
     political developments throughout the world.
       (9) Encouraging the reciprocal reduction of trade and 
     investment barriers will enhance the benefits of trade and 
     investment as well as enhance commercial and political ties 
     between the United States and the countries designated for 
     benefits under this Act.
       (10) Economic opportunity and engagement in the global 
     trading system together with support for democratic 
     institutions and a respect for human rights are mutually 
     reinforcing objectives and key elements of a policy to 
     confront and defeat global terrorism.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Asia or south pacific country.--The term ``Asia or 
     South Pacific country'' means a country listed in section 
     4(b).
       (2) Beneficiary asia or south pacific country.--The term 
     ``beneficiary Asia or South Pacific country'' means an Asia 
     or South Pacific country that the President has determined is 
     eligible for preferential treatment under this Act.
       (3) Former beneficiary asia or south pacific country.--The 
     term ``former beneficiary Asia or South Pacific country'' 
     means a country that, after being designated as a beneficiary 
     Asia or South Pacific country under this Act, ceased to be 
     designated as such a country by reason of its entering into a 
     free trade agreement with the United States.

     SEC. 4. AUTHORITY TO DESIGNATE; ELIGIBILITY REQUIREMENTS.

       (a) Authority To Designate.--
       (1) In general.--Notwithstanding any other provision of 
     law, the President is authorized to designate an Asia or 
     South Pacific country as a beneficiary Asia or South Pacific 
     country eligible for preferential treatment under this Act--
       (A) if the President determines that the country meets the 
     requirements set forth in section 104 of the African Growth 
     and Opportunity Act (19 U.S.C. 3703); and
       (B) subject to the authority granted to the President under 
     subsections (a), (d), and (e) of section 502 of the Trade Act 
     of 1974 (19 U.S.C. 2462), if the country otherwise meets the 
     eligibility criteria set forth in such section 502.
       (2) Application of section 104.--Section 104 of the African 
     Growth and Opportunity Act shall be applied for purposes of 
     paragraph (1) by substituting ``Asia or South Pacific 
     country'' for ``sub-Saharan African country'' each place it 
     appears.
       (b) Countries Eligible for Designation.--For purposes of 
     this Act, the term ``Asia or South Pacific country'' refers 
     to the following or their successor political entities:
       (1) Afghanistan.
       (2) Bangladesh.
       (3) Bhutan.
       (4) Cambodia.
       (5) Kiribati.
       (6) Lao People's Democratic Republic.
       (7) Maldives.
       (8) Nepal.
       (9) Samoa.
       (10) Solomon Islands.
       (11) Timor-Leste (East Timor).
       (12) Tuvalu.
       (13) Vanuatu.

     SEC. 5. ELIGIBLE ARTICLES.

       (a) In General.--Unless otherwise excluded from eligibility 
     (or otherwise provided for in this Act), preferential 
     treatment shall apply in accordance with subsections (b), 
     (c), and (d).
       (b) Certain Articles.--
       (1) In general.--The President may provide duty-free 
     treatment to any article described in subparagraphs (B) 
     through (G) of section 503(b)(1) of the Trade Act of 1974 (19 
     U.S.C. 2463(b)(1)) if--
       (A) the article is the growth, product, or manufacture of a 
     beneficiary Asia or South Pacific country; and
       (B) the President determines, after receiving the advice of 
     the International Trade Commission in accordance with section 
     503(e) of the Trade Act of 1974 (19 U.S.C. 2463(e)), that the 
     article is not import-sensitive in the context of imports 
     from beneficiary Asia or South Pacific countries.
       (2) Rules of origin.--The duty-free treatment provided 
     under paragraph (1) shall apply to any article described in 
     that paragraph that meets the requirements of section 
     503(a)(2) of the Trade Act of 1974 (19 U.S.C. 2463(a)(2)), 
     except that for purposes of determining if the article meets 
     the 35-percent requirement under subparagraph (A)(ii) of such 
     section--
       (A) if the cost or value of materials produced in the 
     customs territory of the United States is included with 
     respect to that article, an amount not to exceed 15 percent 
     of the appraised value of the article at the time it is 
     entered that is attributed to such United States cost or 
     value may be applied toward meeting the 35-percent 
     requirement; and
       (B) the cost or value of the materials included with 
     respect to that article that are produced in one or more 
     beneficiary Asia or South Pacific countries or former 
     beneficiary Asia or South Pacific countries shall be applied 
     toward meeting the 35-percent requirement.
       (c) Textile and Apparel Articles.--
       (1) In general.--The preferential treatment described in 
     subsection (a) of section 112 of the African Growth and 
     Opportunity Act (19 U.S.C. 3721(a)) shall apply with respect 
     to textile and apparel articles described in paragraphs (1), 
     (2), (4), (5), (7), and (8) of subsection (b) of such section 
     and paragraphs (2) and (3) of this subsection that are 
     imported directly into the customs territory of the United 
     States from a beneficiary Asia or South Pacific country 
     except that such section 112 shall be applied and 
     administered with respect to such articles--
       (A) in subsection (a), by substituting ``a beneficiary Asia 
     or South Pacific country (as defined in section 3 of the 
     Asia-South Pacific Trade Preferences Act)'' for ``a 
     beneficiary sub-Saharan African country described in section 
     506A(c) of the Trade Act of 1974''; and
       (B) in paragraphs (1), (2), (4), (5), (7), and (8) of 
     subsection (b), by substituting ``beneficiary Asia or South 
     Pacific country'' and ``beneficiary Asia or South Pacific 
     countries'' for ``beneficiary sub-Saharan African country'' 
     and ``beneficiary sub-Saharan African countries'', 
     respectively, each place such terms appear.
       (2) Textile and apparel articles assembled from regional 
     and other fabric.--
       (A) In general.--Textile and apparel articles described in 
     this paragraph are textile

[[Page S5022]]

     and apparel articles wholly assembled in one or more 
     beneficiary Asia or South Pacific countries or former 
     beneficiary Asia or South Pacific countries, or both, from 
     fabric wholly formed in one or more beneficiary Asia or South 
     Pacific countries or former beneficiary Asia or South Pacific 
     countries, or both, from yarn originating either in the 
     United States or one or more beneficiary Asia or South 
     Pacific countries or former beneficiary Asia or South Pacific 
     countries, or both (including fabrics not formed from yarns, 
     if such fabrics are classifiable under heading 5602 or 5603 
     of the Harmonized Tariff Schedule of the United States and 
     are wholly formed and cut in the United States, in one or 
     more beneficiary Asia or South Pacific countries or former 
     beneficiary Asia or South Pacific countries, or any 
     combination thereof), whether or not the textile and apparel 
     articles are also made from any of the fabrics, fabric 
     components formed, or components knit-to-shape described in 
     paragraph (1) or (2) of section 112(b) of the African Growth 
     and Opportunity Act (19 U.S.C. 3721(b)) (unless the apparel 
     articles are made exclusively from any of the fabrics, fabric 
     components formed, or components knit-to-shape described in 
     paragraph (1) or (2) of such section 112(b)).
       (B) Limitations on benefits.--
       (i) In general.--Preferential treatment under this 
     subsection shall be extended in the 1-year period beginning 
     January 1, 2012, and in each of the succeeding 10 1-year 
     periods, to imports of textile and apparel articles described 
     in subparagraph (A) in an amount not to exceed the applicable 
     percentage of the aggregate square meter equivalents of all 
     textile and apparel articles imported into the United States 
     in the most recent 12-month period for which data are 
     available.
       (ii) Applicable percentage.--For purposes of this 
     subparagraph, the term ``applicable percentage'' means 11 
     percent for the 1-year period beginning January 1, 2012, 
     increased in each of the 10 succeeding 1-year periods by 
     equal increments, so that for the period beginning January 1, 
     2022, the applicable percentage does not exceed 14 percent.
       (3) Handloomed, handmade, folklore articles and ethnic 
     printed fabrics.--
       (A) In general.--A textile or apparel article described in 
     this paragraph is a handloomed, handmade, folklore article or 
     an ethnic printed fabric of a beneficiary Asia or South 
     Pacific country or countries that is certified as such by the 
     competent authority of such beneficiary country or countries. 
     For purposes of this subsection, the President, after 
     consultation with the beneficiary Asia or South Pacific 
     country or countries concerned, shall determine which, if 
     any, particular textile and apparel goods of the country or 
     countries shall be treated as being handloomed, handmade, or 
     folklore articles or an ethnic printed fabric.
       (B) Requirements for ethnic printed fabric.--Ethnic printed 
     fabrics qualified under this paragraph are--
       (i) fabrics containing a selvedge on both edges, having a 
     width of less than 50 inches, classifiable under subheading 
     5208.52.30 or 5208.52.40 of the Harmonized Tariff Schedule of 
     the United States;
       (ii) of the type that contains designs, symbols, and other 
     characteristics of Asian or South Pacific prints--

       (I) normally produced for and sold on the indigenous Asian 
     or South Pacific market; and
       (II) normally sold in Asia or South Pacific countries by 
     the piece as opposed to being tailored into garments before 
     being sold in indigenous Asian or South Pacific markets;

       (iii) printed, including waxed, in one or more beneficiary 
     Asia or South Pacific countries; and
       (iv) fabrics formed in the United States, from yarns formed 
     in the United States, or from fabric formed in one or more 
     beneficiary Asia or South Pacific countries from yarn 
     originating in either the United States or one or more 
     beneficiary Asia or South Pacific countries.
       (4) Special rule.--
       (A) In general.--Preferential treatment under this 
     subsection shall be extended through December 31, 2019, for 
     textile and apparel articles that are wholly assembled in one 
     or more beneficiary Asia or South Pacific countries or former 
     beneficiary Asia or South Pacific countries, or both, 
     regardless of the country of origin of the yarn or fabric 
     used to make such articles.
       (B) Country limitations.--
       (i) Small suppliers.--If, during a calendar year, imports 
     of textile and apparel articles described in subparagraph (A) 
     from a beneficiary Asia or South Pacific country are less 
     than 1 percent of the aggregate square meter equivalents of 
     all textile and apparel articles imported into the United 
     States during that calendar year, such imports may be 
     increased to an amount that is equal to not more than 1.5 
     percent of the aggregate square meter equivalents of all 
     textile and apparel articles imported into the United States 
     during that calendar year for the succeeding calendar year.
       (ii) Other suppliers.--If, during a calendar year, imports 
     of textile and apparel articles described in subparagraph (A) 
     from a beneficiary Asia or South Pacific country are at least 
     1 percent of the aggregate square meter equivalents of all 
     textile and apparel articles imported into the United States 
     during that calendar year, such imports may be increased by 
     an amount that is equal to not more than \1/3\ of 1 percent 
     of the aggregate square meter equivalents of all textile and 
     apparel articles imported into the United States during that 
     calendar year for the succeeding calendar year.
       (iii) Aggregate country limit.--In no case may the 
     aggregate quantity of textile and apparel articles described 
     in subparagraph (A) imported into the United States during a 
     calendar year under this subsection exceed the applicable 
     percentage set forth in paragraph (2)(B)(ii) for that 
     calendar year.
       (d) Other Restrictions.--The provisions of subsections 
     (b)(3)(B) and (e) of section 112 and section 113 of the 
     African Growth and Opportunity Act (19 U.S.C. 3721 and 3722) 
     shall apply with respect to the preferential treatment 
     extended under this section to a beneficiary Asia or South 
     Pacific country by substituting ``beneficiary Asia or South 
     Pacific country'' for ``beneficiary sub-Saharan African 
     country'' and ``beneficiary Asia or South Pacific countries'' 
     and ``former beneficiary Asia or South Pacific countries'' 
     for ``beneficiary sub-Saharan African countries'' and 
     ``former sub-Saharan African countries'', respectively, as 
     appropriate.
       (e) Technical Amendment.--Section 6002(a)(2)(B) of the 
     Africa Investment Incentive Act of 2006 (Public Law 109-432) 
     is amended by inserting before ``by striking'' the following: 
     ``in paragraph (3),''.

     SEC. 6. REPORTING REQUIREMENT.

       The President shall monitor, review, and report to 
     Congress, not later than 1 year after the date of the 
     enactment of this Act, and annually thereafter, on the 
     implementation of this Act and on the trade and investment 
     policy of the United States with respect to the Asia or South 
     Pacific countries.

     SEC. 7. TERMINATION OF PREFERENTIAL TREATMENT.

       No duty-free treatment or other preferential treatment 
     extended to a beneficiary Asia or South Pacific country under 
     this Act shall remain in effect after December 31, 2022.

     SEC. 8. EFFECTIVE DATE.

       The provisions of this Act shall take effect on January 1, 
     2012.
                                 ______