[Congressional Record (Bound Edition), Volume 149 (2003), Part 14]
[House]
[Pages 19403-19434]
[From the U.S. 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:

                               H.R. 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.

     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

[[Page 19404]]

     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 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,

[[Page 19405]]

     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 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

[[Page 19406]]

     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 =         -----------------------------         x  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 ``VNM'' means the value of nonoriginating 
     materials used by the producer in the production of the good.
       (3) Build-up method.--
       (A) In general.--The regional value-content of a good may 
     be calculated on the basis of the following build-up method:

 
                                    VOM
         RVC =         -----------------------------         x  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 ``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.

[[Page 19407]]

       (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

[[Page 19408]]

     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:
       ``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

[[Page 19409]]

     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.''.
       (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

[[Page 19410]]

     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
       (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

[[Page 19411]]

     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.--
       (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.

[[Page 19412]]



     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 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

[[Page 19413]]

     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.
       ``(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

[[Page 19414]]

     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:
       ``(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.

[[Page 19415]]

  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 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

[[Page 19416]]

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 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

[[Page 19417]]

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 (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

[[Page 19418]]

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 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

[[Page 19419]]

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 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

[[Page 19420]]

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- 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

[[Page 19421]]

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 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

[[Page 19422]]

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 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. 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.

[[Page 19423]]


  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, 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. 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.
  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.

[[Page 19424]]


  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. 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.
  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

[[Page 19425]]

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. 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

[[Page 19426]]

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. 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 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

[[Page 19427]]

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 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

[[Page 19428]]

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. 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 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.''

[[Page 19429]]

  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 recently 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.
                                  ____


 (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

[[Page 19430]]

     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.
  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

[[Page 19431]]

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 me 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, 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

[[Page 19432]]

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. 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.

[[Page 19433]]

  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,'' no 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 
chance 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 and consumers. In fact, I have supported trade 
agreements previously, including the U.S.-Jordan FTA. Unfortunately, 
however, I

[[Page 19434]]

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.

                          ____________________