[House Report 104-161]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-161
_______________________________________________________________________


 
          AUTHORIZATIONS OF APPROPRIATIONS FOR TRADE AGENCIES

                                _______


 June 27, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


    Mr. Archer, from the Committee on Way and Means, submitted the 
                               following
                              R E P O R T
                        [To accompany H.R. 1887]
    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 1887) to authorize appropriations for fiscal years 
1996 and 1997 for the International Trade Commission, the 
Customs Service, and the Office of the United States Trade 
Representative, and for other purposes, having considered the 
same report favorably thereon with amendments and recommend 
that the bill as amended do pass.
                                Contents
                                                                   Page
 I. Introduction......................................................2
        A. Purpose and summary...................................     2
        B. Background and need for legislation...................     2
        C. Legislative history...................................     3
II. Explanation of the bill...........................................4
        A. Customs and trade agency authorizations for fiscal         4
            years 1996 and 1997.
        B. CBI reports...........................................     9
        C. Andean Trade Preference Act reports...................    10
        D. Repeal of the East-West trade statistics monitoring...    10
        E. Annual report on trade agreements.....................    11
III.
    Votes of the committee...........................................12
IV. Budget effects of the bill.......................................13
        A. Committee estimate of budgetary effects...............    13
        B. Statement regarding new budget authority and tax          13
            expenditures.
        C. Cost estimate prepared by the Congressional Budget        13
            Office.
 V. Other matters to be discussed under the rules of the House.......13
        A. Committee oversight findings and recommendations......    13
        B. Summary of findings and recommendations of the            15
            Government Operations Committee.
        C. Inflationary impact statement.........................    15
VI. Changes in existing law made by the bill, as reported............15
    The amendments (stated in terms of the page and line 
numbers of the introduced bill) are as follows:
    Page 3, line 21, insert ``(A)'' after the dash.
    Page 3, line 23, strike ``(including salaries and 
expenses)''.
    Page 4, line 1, strike ``(A)'' and insert ``(i)''.
    Page 4, line 2, strike ``(B)'' and insert ``(ii)''.
    Page 4, line 2, strike the quotation marks and second 
period.
    Page 4, insert the following after line 2:
          ``(B) Operations referred to in subparagraph (A) 
        include, but are not limited to--
                  ``(i) the provision of support to Customs and 
                other Federal, State, and local agencies in the 
                enforcement or administration of laws enforced 
                by the Customs Service; and
                  ``(ii) at the discretion of the Commissioner 
                of Customs, the provision of assistance to 
                Federal, State, and local agencies in other law 
                enforcement and emergency humanitarian 
                efforts.''.

                            I. Introduction

                         a. purpose and summary

    H.R. 1887 authorizes appropriations for fiscal years (FY) 
1996 and 1997 for the U.S. International Trade Commission 
(ITC), the U.S. Customs Service, and the Office of the U.S. 
Trade Representative (USTR). The bill also provides for 
statutory changes to certain ITC and USTR report requirements.

                 b. background and need for legislation

    H.R. 1887 provides a two-year authorization of 
appropriations for the ITC, Customs, and USTR. The statutory 
basis for the authorization of appropriations for each of the 
three agencies is as follows: ITC, section 330 of the Tariff 
Act of 1930, as amended; Customs, section 301 of the Customs 
Procedural Reform and Simplification Act of 1978; and USTR, 
section 141 of the Trade Act of 1974. The current budget 
authorizations expired at the end of fiscal year 1992. This 
budget authorization legislation is necessary to properly 
authorize subsequent appropriations to fund the operations of 
these essential trade agencies for fiscal years 1996 and 1997. 
The Committee has adopted a two-year authorization scheme in an 
attempt to fulfill its responsibilities as the authorizing 
committee for the trade agencies, as well as provide 
predictable guidance on the proper funding levels to the 
appropriators.
    In addition, these proposals call for statutory changes to 
certain ITC and USTR reporting requirements. The proposed 
legislation calls for the termination of two reports, the 
Caribbean Basin Economic Recovery Act report and the East-West 
Trade Statistics Monitoring System. At present, the legislation 
for these reports, section 215 of the Caribbean Basin Economic 
Recovery Act (Caribbean Basin Economic Recovery report) and 
section 410 of the Trade Act of 1974 (East-West Trade 
Statistics Monitoring System), does not include sunset dates. 
Therefore, these proposals are required to repeal unnecessary 
reporting requirements, reducing costs and freeing ITC staff 
and resources for other purposes. The proposed legislation also 
includes a change in the reporting requirement for the Andean 
Trade Preference Act report from each calendar year to every 
two-calendar year. The Committee recognizes that while the 
information provided in the report is useful, it is not 
required on an annual basis. This proposal is required to 
reduce costs and free ITC resources for other purposes.
    These proposals includes additional annual reporting 
requirements on trade agreements by the President. Under 
section 163 of the Trade Act of 1974, the President must submit 
an annual report on the operation of the trade agreements 
program and provision of import relief and adjustment 
assistant, and on the national trade policy agenda for the 
year. This proposal calls for the inclusion of a listing of 
trade agreements entered into since 1984 and a description of 
any actions taken to ensure compliance. The inclusion of this 
information is necessary for the Congress to assess and 
evaluate more effectively the operations of the trade 
agreements program as a whole.

                         c. legislative history

Committee bill

    H.R. 1887 was introduced on June 19, 1995, by Mr. Crane of 
Illinois and referred to the Committee on Ways and Means. The 
bill contained five provisions as reported by the Subcommittee 
on Trade: (1) authorizing appropriations for the International 
Trade Commission, the U.S. Customs Service and the Office of 
the United States Trade Representative; (2) repealing a 
Caribbean Basin Economic Recovery Act report; (3) changing the 
publication of the Economic Impact of Andean Trade Preference 
report from each calendar to every two-calendar years; (4) 
repealing the East-West Trade Statistics Monitoring System; and 
(5) requiring the President to submit additional information in 
the annual report to the Congress.
    The Subcommittee on Trade of the Committee on Ways and 
Means marked up the draft bill on March 29, 1995, and ordered 
the draft bill to be favorably reported by voice vote with an 
amendment by Mr. Rangel to add an annual trade agreements 
reporting requirement.
    The Committee on Ways and Means marked up H.R. 1887 on June 
20, 1995, and approved by voice vote one amendment by Mr. Crane 
that restored legislative authority to permit officials from 
the Customs' Air and Marine Interdiction Program to support 
other Federal, State and local agencies in their law 
enforcement and emergency humanitarian efforts. The Committee 
ordered favorably reported H.R. 1887, as amended, by voice 
vote, with a quorum present.

Legislative hearing

    The Subcommittee on Trade of the Committee on Ways and 
Means held a public hearing on February 27, 1995 on the 
Administration's FY 1996 budget proposals for the ITC, Customs 
and USTR.
                      II. Explanation of the Bill

 a. customs and trade agency authorizations for fiscal years 1996 and 
                       1997 (sec. 1 of the bill)

1. United States International Trade Commission (Sec. 1(a) of the bill)

Present law

    Section 330(e)(2) of the Tariff Act of 1930 contains a two-
year authorization of appropriations for the ITC. The most 
recent authorization (section 101 of Public Law 101-382, the 
Customs and Trade Act of 1990) was $41,170,000 for FY 1991 and 
$44,052,000 for FY 1992 for the ITC. Of these amounts, not to 
exceed $2,500 was authorized to be used for reception and 
entertainment expenses, subject to the approval of the Chairman 
of the Commission. The total appropriation to the ITC for FY 
1995 (Public Law 103-317) is $42,500,000. This does not include 
$2,000,000 in FY 1994 carry-over funds.

Explanation of provision

    The provision amends section 330(e)(2) of the Tariff Act of 
1930 to provide an authorization of appropriations to the ITC 
of $44,500,000 for FY 1996 and $44,500,000 for FY 1997. Of the 
amounts authorized, not more than $2,500 may be used for 
reception and entertainment expenses, subject to the approval 
of the Chairman of the Commission.

Reasons for change

    The FY 1996 authorization is $2,677,000 less than the 
amount requested by the ITC. The ITC requested $47,177,000, an 
amount reflecting a 11 percent increase over the FY 1995 
appropriation of $42,500,000. The ITC's FY 1995 budget includes 
$2,000,000 in carry-over from FY 1994, resulting in a total 
operating level of $44,500,000. The ITC expects to use all 
carry-over funds in FY 1995.
    It is the view of the Committee that freezing the ITC's 
budget at the total FY 1995 operating level of $44,500,000 is 
justified in the current budget climate of decreased federal 
spending. This proposed authorization is a 5 percent increase 
from the FY 1995 appropriation. According to the ITC, 
approximately $2,000,000 of its FY 1996 request would be used 
to pay for mandatory increases in base pay. This amount was not 
included in the authorization in order to bring the ITC's 
budget request into full compliance with President Clinton's 
budget reduction directives for Executive agencies. When this 
amount is taken into account, the difference between the ITC's 
request and the proposed authorization level for FY 1996 is 
less than $700,000.
    The Committee acknowledges that the ITC's caseload 
resulting from the passage of the Uruguay Round and NAFTA 
legislation is expected to increase in FY 1996 and FY 1997. The 
two other trade agencies in the purview of the Committee, USTR 
and Customs, also expect an increase in workload from these two 
trade agreements. However, their FY 1996 budget requests 
represent a freeze and a decrease, respectively, from their FY 
1995 appropriations. To encourage the ITC to consider 
restructuring and to retain equivalent budgetary treatment 
among these three agencies, a freeze of the ITC's budget at the 
FY 1995 total operating level is justified. In anticipation of 
continued contractions of federal spending, the proposed FY 
1997 authorization freezes the ITC's budget at the FY 1996 
level.
    Included in sections 2, 3, and 4 of this bill are changes 
to certain statutory report requirements. In addition, the 
Committee is considering changes in other ITC report 
requirements. Both of these changes should result in cost 
reductions for the agency. As the ITC develops its plan to 
respond to its FY 1996 authorization, the Committee would 
discourage the ITC from eliminating all of its agency details, 
specifically those assigned to USTR. USTR relies heavily on 
agency details and the expertise provided by these details has 
proven invaluable to the trade negotiation process.
Effective date

    This provision is effective upon enactment.

        2. United States Customs Service (Sec. 1(b) of the bill)

Present law

    The Customs Procedural Reform and Simplification Act of 
1978 (Public Law 95-110) provides for a two-year authorization 
of appropriations for the U.S. Customs Service. The Omnibus 
Budget Reconciliation Act of 1986 (Public Law 99-509) requires 
that the salaries and expenses portion of the Customs Service 
authorization specify separate amounts for noncommercial and 
commercial operations.
    The most recent authorization (section 101 of the Customs 
and Trade Act of 1990, Public Law 101-382) provided 
$1,247,884,000 for salaries and expenses of the Customs 
Service, and $150,199,000 for operations and maintenance of the 
air interdiction program. Appropriations for operations and 
maintenance of the marine program were added to this account by 
the FY 1992 Treasury Appropriations Act. The Act authorized 
$542,091,000 for noncommercial operations and $705,793,000 for 
commercial operations in FY 1992.
    The FY 1995 Treasury Appropriation Act (Public Law 103-329) 
provided $1,394,793,000 for Customs Service salaries and 
expenses and $89,041,000 for the operations and maintenance of 
the air and marine interdiction program. Public Law 103-329, 
section 644 further reduced these amounts by $2,142,000 and 
$758,000, respectively, to reflect procurement reductions. 
Under provisions of Public Law 100-690, $4,196,000 was 
transferred to salaries and expenses from the Office of 
National Drug Control Policy for high intensity drug 
trafficking areas programs.

Explanation of provision

    The provision amends section 301(b) of the Customs 
Procedural Reform and Simplification Act of 1978 to authorize 
appropriations for the U.S. Customs Service not to exceed 
$550,237,000 in FY 1996 and $550,237,000 in FY 1997 for 
salaries and expenses incurred in noncommercial operations, and 
not less than $839,593,000 in FY 1996 and $839,593,000 in FY 
1997 for salaries and expense incurred in commercial 
operations. For operations and maintenance of the air and 
marine interdiction program, $60,993,000 in FY 1996 and 
$60,993,000 in FY 1997 are authorized. A carry-over of 
$20,101,000 will also be available for the air and marine 
interdiction program. The bill as reported deletes obsolete 
language to clarify that the operations and maintenance account 
does not include authority for salaries and expenses.
    Section 1(b) also restores legislative authority to permit 
officials from Customs' Air and Marine Interdiction Program to 
support other Federal, State and local agencies in their law 
enforcement and emergency humanitarian efforts.

Reasons for change

    The FY 1996 authorization level reflects the amount 
requested in the President's budget submission. The total 
authorization amount of $1,456,914,000 and 17,169 full-time 
equivalent (FTE) positions represents a decrease of $30,426,000 
and 80 FTE from the FY 1995 appropriation level. The net 
decrease in budget authority is approximately .7 percent 
because of the carry-over of $20,101,000 in FY 1995 unobligated 
balance from the air and marine interdiction program and the 
restoration of funds transferred to the Treasury Overseas Law 
Enforcement Account. The proposed FY 1997 authorization freezes 
the budget at FY 1996 level for all three accounts.
    The President's FY 1996 budget proposed the creation of a 
Treasury Foreign Law Enforcement Account to centralize all 
overseas law enforcement funding under the control of the 
Department of Treasury. The President's budget proposed 
transferring $8,280,000 and 36 FTE from the noncommercial 
salaries and expenses account to this new Treasury account. In 
developing the proposed FY 1996 appropriation, the Committee 
did not approve the new Treasury account, but added this amount 
back into Customs's noncommercial salaries and expenses 
account. It is the Committee's view that this new account is 
unnecessary, weakens the Committee's control over the Customs' 
budget, and leads to additional confusion in the budget 
process. Thus, the FY 1996 authorization reflects the total 
amount requested by the President.
    For the operations and maintenance of the air and marine 
interdiction program, the proposed FY 1996 authorization 
reflects the President's request, which is 30.9 percent less 
than the FY 1995 appropriation. However, Customs plans to use 
$20,101,000 in carry-over funds to augment its FY 1996 
appropriation. Therefore, the total FY 1996 budget (operating 
level) will be $81,094,000, compared with $98,981,000 in FY 
1995.
    Regarding the funding from the Crime Bill Trust Fund, the 
Committee requests that Customs work closely with Treasury 
Department officials to reevaluate the proposed use of such 
funding. The President's FY 1996 request states that the 
funding will be used to continue the development of technology 
to prevent the export of stolen vehicles. The Committee 
believes that more appropriate uses of such funds may exist and 
should be explored.
    Regarding the authority to use air and marine assets to 
assist other agencies, this situation was brought about by an 
investigation conducted last year by the Appropriations 
Committee, which questioned whether Customs had the technical 
legal authority to provide this type of assistance. Last 
summer, Customs issued a legal determination confirming that 
its existing funding authority did not allow their practice. As 
a result, the use of Customs Air and Marine Interdiction assets 
for humanitarian and law enforcement assistance has been 
suspended since that time. Under Customs' prior practice for 
the use of its Air and Marine Interdiction assets, first 
priority was given to Customs drug interdiction mission; second 
priority was given to other Customs missions; and third 
priority was given to assistance to other federal, state, and 
local agencies. It is the view of this Committee that this kind 
of co-operation between law enforcement is essential for an 
effective war on drugs, and, when appropriately used, it 
provides a useful service to local communities.
    The Committee notes that the General Accounting Office 
reported that the Customs Service has a continuing problem 
regarding bond insufficiency. This is of concern because when 
insufficiency is determined the amount deemed due is most often 
uncollectible. In the April 1994 draft report of the Customs 
Bond Sufficiency Task Force, it was revealed that the Customs' 
Automated Commercial System does not have the ability to 
identify losses due to bond insufficiency. The Automated Surety 
Interface initiative would resolve the question of bond 
insufficiency, as well as assist Customs in achieving its goal 
of creating a paperless entry system. The Committee notes that 
Customs had issued a Federal Register notice for the Automated 
Surety Interface (ASI) as early as 1987, and has issued a 
subsequent Federal Register notice for the ASI dated January 
22, 1993. The Committee is interested in Customs' intentions 
with respect to ASI, and would expect Customs to complete the 
rulemaking process for proceeding with ASI in a timely manner.
    The Committee has concerns over the soon to be implemented 
Canadian Private Aircraft Reporting Program. We would like to 
learn more about the program and its impact on enforcement 
against narcotics traffic. The Committee, therefore, requests 
that Customs provide a report on the program within six months 
of the completion of the implementation of the program.
    By reflecting the FY 1996 funding request, the Committee 
recognizes the efforts of the U.S. Customs Service in 
reorganizing and modernizing its operations. The significant 
changes underway at Customs promise to improve the delivery of 
services to the trade community and benefit American taxpayers 
in cost savings. The Committee supports Customs' reorganization 
and modernization efforts and will continue to follow these 
plans closely as they unfold.

Effective date

    This provision is effective upon enactment.

 3. Office of the United States Trade Representative (Sec. 1(c) of the 
                                 bill)

Present law

    Section 141(g) of the Trade Act of 1974, as amended, 
authorizes two-year appropriations to carry out the functions 
of the USTR. The most recent authorization (under section 103 
of the Customs and Trade Act of 1990) was $23,250,000 for FY 
1991 and $21,077,000 for FY 1992, of which not to exceed 
$98,000 is available for official reception and entertainment 
expenses, not to exceed $2,050,000 for the U.S. share of 
expenses for binational panels and committees under Chapter 19 
of the U.S.-Canada Free Trade Agreement, and not to exceed 
$1,000,000 to remain available until expended.
    The total appropriation to USTR for FY 1995 (Public Law 
103-317) is $20,949,000, of which not to exceed $98,000 shall 
be available for official reception and representation expenses 
and $2,500,000 shall remain available until expended.

Explanation of provision

    This provision amends section 141(g)(1) of the Trade Act of 
1974 to provide a two-year authorization of appropriations to 
the USTR totaling $20,949,000 for FY 1996 and $20,949,000 for 
FY 1997. Of these amounts in each year, not to exceed $98,000 
may be used for entertainment and representation expenses and 
not to exceed $2,500,000 shall remain available until expended.
Reason for change

    The FY 1996 authorization level reflects the amount 
requested in the President's budget submission. For FY 1996, 
USTR is requesting $20,949,000 in budget authority and 166 FTE. 
This represents no change in budgetary authority from FY 1995, 
but is a decrease of 2 FTE. The proposed FY 1997 authorization 
freezes the budget at the FY 1966 level.
    In FY 1996, USTR plans to absorb an estimated $450,000 in 
costs associated with employee pay raises and general inflation 
by curbing spending on printing, equipment purchases and 
travel, reducing employment by 2 FTE, and phasing out the 
dispute resolution expenses under the U.S.-Canadian Free Trade 
Agreement. The Committee notes that the number of Schedule C/
political appointees has increased more than 50 percent over 
the last several years. Since its inception, the number of USTR 
ambassadors has increased from 3 to 5, with the possibility of 
an additional appointment later this year.
    USTR's budget request for FY 1996 represents a freeze in 
budget authority, a commendable request from an agency which 
has the primary responsibility for developing, coordinating and 
articulating U.S. international trade policy, advising the 
President and the Congress on trade policy, and conducted 
international trade negotiations. The request is justified by 
the agency's statutory functions and the full agenda of 
international trade policy issues and negotiations.
    It has come to the attention of the Committee that USTR is 
considering relocating its Geneva, Switzerland office from its 
present location to the State Department mission building. 
Given its role as the U.S. government's lead trade negotiator, 
it is the Committee's view that USTR's current location is more 
conducive to fulfilling its mission. The Committee has strongly 
supported the independence of USTR from other agencies of the 
U.S. government. The USTR, a Cabinet-level appointment within 
the White House, has served as the coordinator among agencies 
of U.S. trade policy. The Committee believes it is important to 
maintain, in semblance and reality, that independence and 
coordinating function.
    Also, the proximity of the current Geneva office to the 
World Trade Organization headquarters allows the United States 
to host numerous meetings and to better consolidate the U.S. 
position by taking a leadership role. The accessibility of the 
current USTR office in Geneva, with respect to visits by both 
representatives of foreign governments and the private sector, 
would certainly be reduced if USTR were to relocate to offices 
within the State Department mission building. Therefore, the 
Committee recommends that USTR remain in its current location 
in Geneva.

Effective date

    This provision is effective upon enactment.

                  b. cbi reports (sec. 2 of the bill)

Present law

    Section 215(a) requires the ITC to report to the Congress 
and the President on the economic impact of the Caribbean Basin 
Economic Recovery Act (CBERA) on U.S. industries and consumers 
during (1) the two-year period beginning with enactment [August 
5, 1983]; and (2) each year afterwards, until duty-free 
treatment is terminated. Public Law 101-382 repealed the 
termination date.

Explanation of provision

    The provision repeals section 215(a) of CBERA which 
required the ITC to report to the Congress and the President on 
the economic impact of the Act on U.S. industries and 
consumers.

Reason for change

    On March 29, 1995, the Subcommittee on Trade ordered 
favorably reported H.R. 553, the ``Caribbean Basin Trade 
Security Act.'' The bill provides NAFTA parity benefits for 
Caribbean countries to restore benefits eroded by NAFTA 
implementation, and to preserve and attract economic investment 
to the region. The bill contains new reporting requirements 
that require (1) the President to conduct and report to 
Congress, on a triennial basis, a review of the benefits 
accorded under the bill; and (2) USTR to assess the economic 
development efforts and market-oriented reforms in each 
beneficiary country. Given the new reporting requirements of 
this pending legislation, it is the Committee's view that the 
CBERA report is no longer necessary or relevant. In addition, 
repeal of the CBERA report would free ITC resources for other 
purposes and reduce printing and distribution costs. (The 
report costs approximately $135,000 to produce and more than 
1,800 copies are distributed annually.)

Effective date

    This provision is effective upon enactment.

      c. andean trade preference act reports (sec. 3 of the bill)

Present law

    Section 206 of the Andean Trade Preferences Act provides 
that the ITC shall prepare a report for Congress regarding the 
economic impact of this Act each calendar year until duty-free 
treatment is terminated, December 4, 2001.

Explanation of provision

    The provision amends section 206(a)(2) of the Andean Trade 
Preferences Act to change the publication of the Economic 
Impact of the Andean Trade Preferences report from each 
calendar year to every two-calendar years.

Reason for change

    The Committee finds that while the information provided by 
the report is useful, it is not required on an annual basis. It 
is the Committee's view that every two years is a sufficient 
timeframe to review the effect of the Andean Trade Preferences 
Program on U.S. industries and trade. In addition, changing the 
reporting requirement to every two years would free ITC 
resources for other purposes and reduce printing and 
distribution costs. (The report costs approximately $127,000 
and nearly 800 copies are distributed annually.)

Effective date

    This provision is effective upon enactment.

 d. repeal of east-west trade statistics monitoring system (sec. 4 of 
                               the bill)

Present law

    Section 410 of the Trade Act of 1974 as amended (19 U.S.C. 
2440) established the East-West Trade Statistics Monitoring 
System. It requires the ITC to monitor U.S. imports from, and 
exports to, nonmarket economy countries. Such data must be 
published and transmitted to Congress each quarter.
Explanation of provision

    The provision repeals section 410 of the Trade Act of 1974, 
as amended, which established the East-West Trade Statistics 
Monitoring System.

Reason for change

    Identical provisions were included in H.R. 11, the 
``Revenue Act of 1992,'' passed by the 102nd Congress but 
vetoed by the President and H.R. 2264, the ``Omnibus Budget 
Reconciliation Act of 1993'' as passed by the House. The 
Committee believes that repeal of section 410 is warranted due 
to the substantial political and economic transformation of the 
former East Bloc regimes and the need to focus limited ITC 
resources on other areas. The reporting requirement was enacted 
as part of Title IV, along with the Jackson-Vanik amendment, 
which authorized the President to extend most-favored-nation 
status to nonmarket economy countries, subject to certain 
conditions. After 20 years' experience with the Jackson-Vanik 
amendment, a quarterly reporting requirement on nonmarket 
economy countries appears to be unnecessary and outdated. In 
addition, repeal of the reporting requirement would free ITC 
staff resources for other purposes and reduces printing and 
distribution costs. (More than 1,000 copies are printed and 
mailed.) Data on trade with the former East Bloc countries will 
continue to be collected by the U.S. Census Bureau and the ITC 
and can be readily obtained by Members of Congress and the 
public.

Effective date

    This provision is effective upon enactment.

       e. annual report on trade agreements (sec. 5 of the bill)

Present law

    Section 163(a) of the Trade Act of 1974 requires the 
President to submit an annual report to the Congress on the 
operation of the trade agreements program and provision of 
import relief and adjustment assistance, and on the national 
trade policy agenda for the year.

Explanation of provision

    The provision amends section 163(a) of the Trade Act of 
1974 to provide for additional annual reporting requirements on 
trade agreements by the President to the Congress. The 
provision requires: (1) a listing of trade agreements entered 
into by the United States since 1984 which afford increased 
market access or reduce barriers and other trade distorting 
policies and practices by other parties to those agreements; 
and (2) a description of any actions taken during the preceding 
calendar year to ensure compliance with those agreements by 
other parties to those agreements.

Reason for change

    Since the passage of the Trade Act of 1974, which set forth 
a number of reporting requirements by the President concerning 
the operation of the trade agreements program, the United 
States has entered into numerous trade agreements, such as the 
Uruguay Round; regional agreement, such as the NAFTA; and 
bilateral agreements, such as those the United States has 
reached with Japan on different sectoral issues as well those 
the United States has entered into with other trading partners 
to settle section 301 cases.
    Under the reporting requirements of current law, there is 
no requirement for the President to provide the Congress with a 
consolidated and updated listing of the various trade 
agreements which are currently available to achieve our 
country's trade policy objectives and to assist U.S. firms 
engaged in international trade. Given the numerous trade 
agreements the United States has entered into since 1984, the 
Committee believes that including such a listing in the 
President's annual report would enable the Congress to assess 
and evaluate more effectively the operation of the trade 
agreements program as a whole. Too often in the past, the focus 
has been on concluding new trade agreements rather than on 
ensuring that existing agreements are being properly 
implemented by our trading partners. Requiring the President to 
provide Congress annually with an updated listing of relevant 
trade agreements and to report on actions taken during the 
preceding calendar year to ensure compliance with such 
agreements would give the President an important, but non-
burdensome, statutory framework within which to organize and 
conduct the Administration's compliance efforts.
    The Committee intends the President to have discretion on 
the manner in which the information to fulfill the new 
reporting requirements is presented and notes that some of this 
information is already being provided in some form in the 
annual report. Nonetheless, the Committee believes that it 
would be helpful to organize the presentation of this 
information such that there would be an annex in the annual 
report listing the relevant trade agreements entered into since 
1984, with the bilateral agreements set forth on a country-by-
country basis. The Committee would also encourage the 
Administration to include in the listing, as it deems 
appropriate, any relevant trade agreement entered into prior to 
1984. More detailed information on these agreements and any 
actions taken in the preceding calendar year to ensure 
compliance with these agreements could be incorporated, as 
appropriate, into the body of the report.
    The Committee intends that the term ``trade agreements'' 
should be broadly construed to cover both Executive trade 
agreements (including any bilateral memoranda of understanding, 
side letters and other applicable instruments) as well as 
Executive trade agreements approved by Congress (i.e. 
Congressional-Executive agreements). However, the Committee 
also intends that the trade agreements to be covered by this 
new reporting requirement are only those that are intended to 
provide increased market access or to reduce trade barriers or 
trade distorting policies or practices by our trading partners. 
In this regard, the Committee is seeking a listing of those 
substantive agreements which are particularly relevant to U.S. 
firms engaged in international trade. The Committee does not 
intend that the list include procedural agreements which are of 
no substantive value with respect to obtaining market access or 
reducing trade barriers or trade distorting policies or 
practices.

Effective date

    This provision is effective upon enactment.

                      III. Votes of the Committee

    In compliance with clause 2(l)(2)(B) of the Rules of the 
House of Representatives, the following statements are made 
concerning the votes of the Committee in its consideration of 
the bill, H.R. 1887.

Motion to report the bill

    The bill, H.R. 1887, was ordered favorably reported, as 
amended, by voice vote on June 20, 1995, with a quorum present.

                           IV. Budget Effects

               a. committee estimate on budgetary effects

    In compliance with clause 7(a) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of this bill, H.R. 1887, 
as reported:
    The Committee agrees with the estimate prepared by CBO, 
which is included below.

    b. statement regarding new budget authority and tax expenditures

    In compliance with subdivision (B) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, the 
Committee states that the provisions of H.R. 1887 do not 
involve any new budget authority, or any increase or decrease 
in revenues or tax expenditures.

      c. cost estimate prepared by the congressional budget office

    In compliance with subdivision (C) of clause 2(l)(3) of 
rule XI of the Rules of the House of Representatives, requiring 
a cost estimate prepared by the Congressional Budget Office, 
the following report prepared by CBO is provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 22, 1995.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the attached estimate for H.R. 1887, a bill to 
authorize appropriations for fiscal years 1996 and 1997 for the 
International Trade Commission, the Customs Service, and the 
Office of the United States Trade Representative, and for other 
purposes.
    Enacting the bill would not affect direct spending or 
receipts. Therefore, pay-as-you-go procedures would not apply.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                                   June E. O'Neill.

     V. Other Matters to be Discussed Under the Rules of the House

          A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    With respect to subdivision (A) of clause 2(l)(3) of rule 
XI of the rules of the House of Representatives (relating to 
oversight findings), the Committee advises that it was as a 
result of the Committee's oversight activities concerning the 
budget authorizations for the ITC, Customs and USTR that the 
Committee concluded that it is appropriate to enact the 
provisions contained in the bill.

               congressional budget office cost estimate

    1. Bill number: H.R. 1887.
    2. Bill title: A bill to authorize appropriations for 
fiscal years 1996 and 1997 for the International Trade 
Commission, the Customs Service, and the Office of the United 
States Trade Representative, and for other purposes.
    3. Bill status: As ordered reported by the House Committee 
on Ways and Means on June 20, 1995.
    4. Bill purpose: The bill would authorize appropriations 
for 1996 and 1997 for the U.S. Customs Service, the 
International Trade Commission (ITC), and the Office of the 
U.S. Trade Representative (OUSTR). For the Customs Service, the 
amounts authorized would be about $1.4 billion for salaries and 
expenses and about $61 million for operations and maintenance, 
annually, for fiscal years 1996 and 1997. Also, for 1996 and 
1997, the bill would authorize annual appropriations of about 
$45 million for the ITC and about $21 million for the OUSTR.
    The bill also would repeal or slightly modify the 
requirements for certain reports prepared for the congress by 
the ITC and the OUSTR.
    5. Estimated cost to the Federal Government: Enacting H.R. 
1887 would affect discretionary spending, subject to 
appropriations of the necessary funds, as shown in the 
following table.

----------------------------------------------------------------------------------------------------------------
                                                   1995       1996       1997       1998       1999       2000  
----------------------------------------------------------------------------------------------------------------
Spending under current law:                                                                                     
    Budget authority \1\......................      1,549  .........  .........  .........  .........  .........
    Estimated outlays.........................      1,524        163          1  .........  .........  .........
Proposed changes:                                                                                               
    Authorization level.......................  .........      1,516      1,516  .........  .........  .........
    Estimated outlays.........................  .........      1,359      1,515        158          1  .........
Spending under H.R. 1887:                                                                                       
    Authorization level \1\...................      1,549      1,516      1,516  .........  .........  .........
    Estimated outlays.........................      1,524      1,522      1,516        158          1  .........
----------------------------------------------------------------------------------------------------------------
\1\ The 1995 is the amount appropriated for that year.                                                          

    The costs of this bill fall within budget functions 150, 
750, and 800.
    In total, the amounts authorized for the Customs Service, 
the ITC, and the OUSTR are slightly lower than the sum of 
appropriations provided for fiscal year 1995. This estimate 
assumes that the Congress will appropriate the full amounts 
authorized for each fiscal year. The estimated outlays are 
based on historical spending patterns.
    6. Pay-as-you-go considerations: None.
    7. Estimated cost to State and local governments: None.
    8. Estimate comparison: None.
    9. Previous CBO estimate: None.
    10. Estimate prepared by: Mark Grabowicz and Sunita 
D'Monte.
    11. Estimate approved by: Robert A. Sunshine for Paul N. 
Van de Water, Assistant Director for Budget Analysis.

    b. summary of findings and recommendations of the committee on 
                    government reform and oversight

    With respect to subdivision (D) of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives (relating to 
oversight findings), the Committee advises that no oversight 
findings or recommendations have been submitted to this 
Committee by the Committee on Government Reform and Oversight 
with respect to the provisions contained in this bill.

                    c. inflationary impact statement

    In compliance with clause 2(l)(4) of rule XI of the rules 
of the House of Representatives, the Committee states that the 
provisions of the bill are not expected to have an overall 
inflationary impact on prices and costs in the operation of the 
national economy. As is indicated above (in Part IV of this 
report), the bill is projected to be deficit neutral over 
fiscal years 1995-2000.
         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

                 SECTION 330 OF THE TARIFF ACT OF 1930

SEC. 330. ORGANIZATION OF THE COMMISSION.

  (a)  * * *
          * * * * * * *
  (e) Authorization of Appropriations.--For the fiscal year 
beginning October 1, 1976, and each fiscal year thereafter, 
there are authorized to be appropriated to the Commission only 
such sums as may hereafter be provided by law.
  [(2)(A) There are authorized to be appropriated to the 
Commission for necessary expenses (including the rental of 
conference rooms in the District of Columbia and elsewhere) not 
to exceed the following:
          [(i) $41,170,000 for fiscal year 1991.
          [(ii) $44,052,000 for fiscal year 1992.
  [(B) Not to exceed $2,500 of the amount authorized to be 
appropriated for any fiscal year under subparagraph (A) may be 
used, subject to the approval of the Chairman of the 
Commission, for reception and entertainment expenses.
  [(C) No part of any sum that is appropriated under the 
authority of subparagraph (A) may be used by the Commission in 
the making of any special study, investigation, or report that 
is requested by any agency of the executive branch unless that 
agency reimburses the Commission for the cost thereof.]
  (2)(A) There are authorized to be appropriated to the 
Commission for necessary expenses (including the rental of 
conference rooms in the District of Columbia and elsewhere) not 
to exceed the following:
          (i) $44,500,000 for fiscal year 1996.
          (ii) $44,500,000 for fiscal year 1997.
  (B) Not to exceed $2,500 of the amount authorized to be 
appropriated for any fiscal year under subparagraph (A) may be 
used, subject to the approval of the Chairman of the 
Commission, for reception and entertainment expenses.
  (C) No part of any sum that is appropriated under the 
authority of subparagraph (A) may be used by the Commission in 
the making of any special study, investigation, or report that 
is requested by any agency of the executive branch unless that 
agency reimburses the Commission for the cost thereof.
          * * * * * * *
                              ----------                              


SECTION 301 OF THE CUSTOMS PROCEDURAL REFORM AND SIMPLIFICATION ACT OF 
                                  1978

  Sec. 301. (a) * * *
  [(b) Authorization of Appropriations.--
          [(1) For noncommercial operations.--There are 
        authorized to be appropriated for the salaries and 
        expenses of the Customs Service that are incurred in 
        noncommercial operations not to exceed the following:
                  [(A) $516,217,000 for fiscal year 1991.
                  [(B) $542,091,000 for fiscal year 1992.
          [(2) For commercial operations.--(A) There are 
        authorized to be appropriated for the salaries and 
        expenses of the Customs Service that are incurred in 
        commercial operations not less than the following:
                  [(i) $672,021,000 for fiscal year 1991.
                  [(ii) $705,793,000 for fiscal year 1992.
          [(B) The monies authorized to be appropriated under 
        subparagraph (A) for any fiscal year, except for such 
        sums as may be necessary for the salaries and expenses 
        of the Customs Service that are incurred in connection 
        with the processing of merchandise that is exempt from 
        the fees imposed under section 13031(a) (9) and (10) of 
        the Consolidated Omnibus Budget Reconciliation Act of 
        1985, shall be appropriated from the Customs User Fee 
        Account.
          [(3) For air interdiction.--There are authorized to 
        be appropriated for the operation (including salaries 
        and expenses) and maintenance of the air interdiction 
        program of the Customs Service not to exceed the 
        following:
                  [(A) $143,047,000 for fiscal year 1991.
                  [(B) $150,199,000 for fiscal year 1992.]
  (b) Authorization of Appropriations.--
          (1) For noncommercial operations.--There are 
        authorized to be appropriated for the salaries and 
        expenses of the Customs Service that are incurred in 
        noncommercial operations not to exceed the following:
                  (A) $550,237,000 for fiscal year 1996.
                  (B) $550,237,000 for fiscal year 1997.
          (2) For commercial operations.--(A) There are 
        authorized to be appropriated for the salaries and 
        expenses of the Customs Service that are incurred in 
        commercial operations not less than the following:
                  (i) $839,593,000 for fiscal year 1996.
                  (ii) $839,593,000 for fiscal year 1997.
          (B) the monies authorized to be appropriated under 
        subparagraph (A) for any fiscal year, except for such 
        sums as may be necessary for the salaries and expenses 
        of the Customs Service that are incurred in connection 
        with the processing of merchandise that is exempt from 
        the fees imposed under section 13031(a) (9) and (10) of 
        the Consolidated Omnibus Budget Reconciliation Act of 
        1985, shall be appropriated from the Customs User Fee 
        Account.
          (3) For air and marine interdiction.--(A) There are 
        authorized to be appropriated for the operation and 
        maintenance of the air and marine interdiction programs 
        of the Customs Service not to exceed the following:
                  (i) $60,993,000 for fiscal year 1996.
                  (ii) $60,993,000 for fiscal year 1997.
          (B) Operations referred to in subparagraph (A) 
        include, but are not limited to--
                  (i) the provision of support to Customs and 
                other Federal, State, and local agencies in the 
                enforcement or administration of laws enforced 
                by the Customs Service; and
                  (ii) at the discretion of the Commissioner of 
                Customs, the provision of assistance to 
                Federal, State, and local agencies in other law 
                enforcement and emergency humanitarian efforts.
          * * * * * * *
                              ----------                              


                           TRADE ACT OF 1974
                            TABLE OF CONTENTS

                TITLE I--NEGOTIATING AND OTHER AUTHORITY

     * * * * * * *

    TITLE IV--TRADE RELATIONS WITH COUNTRIES NOT CURRENTLY RECEIVING 
                       NONDISCRIMINATORY TREATMENT

Sec. 401.  Exception of the products of certain countries or areas.
Sec. 402.  Freedom of emigration in East-West trade.
Sec. 403.  United States personnel missing in action in Southeast Asia.
     * * * * * * *
[Sec. 410.  East-West Trade Statistics Monitoring System.]
          * * * * * * *

                TITLE I--NEGOTIATING AND OTHER AUTHORITY

          * * * * * * *

      CHAPTER 4--OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

SEC. 141. OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE.

    (a)  * * *
          * * * * * * *
    [(g)(1)(A) There are authorized to be appropriated to the 
Office for the purposes of carrying out its functions not to 
exceed the following:
          [(i) $23,250,000 for fiscal year 1991.
          [(ii) $21,077,000 for fiscal year 1992.
    [(B) Of the amounts authorized to be appropriated under 
subparagraph (A) for any fiscal year--
          [(i) not to exceed $98,000 may be used for 
        entertainment and representation expenses of the 
        Office;
          [(ii) not to exceed $2,050,000 may be used to pay the 
        United States share of the expenses of binational 
        panels and extraordinary challenge committees convened 
        pursuant to chapter 19 of the United States-Canada 
        Free-Trade Agreement; and
          [(iii) not to exceed $1,000,000 shall remain 
        available until expended.]
    (g)(1)(A) There are authorized to be appropriated to the 
Office for the purposes of carrying out its functions not to 
exceed the following:
          (i) $20,949,000 for fiscal year 1996.
          (ii) $20,949,000 for fiscal year 1997.
    (B) Of the amounts authorized to be appropriated under 
subparagraph (A) for any fiscal year--
          (i) not to exceed $98,000 may be used for 
        entertainment and representation expenses of the 
        Office; and
          (ii) not to exceed $2,500,000 shall remain available 
        until expended.
          * * * * * * *

              CHAPTER 6--CONGRESSIONAL LIAISON AND REPORTS

          * * * * * * *

SEC. 163. REPORTS.

    (a) Annual Report on Trade Agreements Program and National 
Trade Policy Agenda.--
          (1)  * * *
          (2) The report shall include--
                  (A) a listing of trade agreements entered 
                into by the United States since 1984 which 
                afford increased market access or reduce 
                barriers and other trade distorting policies 
                and practices by other parties to those 
                agreements; and
                  (B) a description of any actions taken during 
                the preceding calendar year to ensure 
                compliance with those agreements by other 
                parties to those agreements.
          [(2)] (3) The report shall include, with respect to 
        the matters referred to in paragraph (1)(A), 
        information regarding--
                  (A) new trade negotiations;
          * * * * * * *
          [(3)] (4)(A) The national trade policy agenda 
        required under paragraph (1)(B) for the year in which a 
        report is submitted shall be in the form of a statement 
        of--
                  (i) the trade policy objectives and 
                priorities of the United States for the year, 
                and the reasons therefor;
          * * * * * * *

   TITLE IV--TRADE RELATIONS WITH COUNTRIES NOT CURRENTLY RECEIVING 
                      NONDISCRIMINATORY TREATMENT

          * * * * * * *

[SEC. 410. EAST-WEST TRADE STATISTICS MONITORING SYSTEM.

    [The International Trade Commission shall establish and 
maintain a program to monitor imports of articles into the 
United States from nonmarket economy countries and exports of 
articles from the United States to nonmarket economy countries. 
To the extent feasible, the Commission shall coordinate such 
program with any relevant data gathering programs presently 
conducted by the Secretary of Commerce. The Secretary of 
Commerce shall provide the Commission with any information 
which, in the determination of the Commission, is necessary to 
carry out this section. The Commission shall publish a detailed 
summary of the data collected under the East-West Trade 
Statistics Monitoring System not less frequently than once each 
calendar quarter and shall transmit such publication to the 
East-West Foreign Trade Board and to Congress. Such publication 
shall include data on the effect of such imports if any, on the 
production of like, or directly competitive, articles in the 
United States, and on employment within the industry which 
produces like, or directly competitive, articles in the United 
States.]
          * * * * * * *
                              ----------                              

        SECTION 215 OF THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT

[SEC. 215. INTERNATIONAL TRADE COMMISSION REPORTS ON IMPACT OF THIS 
                    ACT.

    [(a) The United States International Trade Commission 
(hereinafter in this section referred to as the ``Commission'') 
shall prepare, and submit to Congress and to the President, a 
report regarding the economic impact of this Act on United 
States industries and consumers during--
          [(1) the twenty-four-month period beginning with the 
        date of enactment of this Act; and
          [(2) each calendar year occurring thereafter until 
        duty-free treatment under this title is terminated 
        under section 216(b).
For purposes of this section, industries in the Commonwealth of 
Puerto Rico and the insular possessions of the United States 
shall be considered to be United States industries.
    [(b)(1) Each report required under subsection (a) shall 
include, but not be limited to, an assessment by the Commission 
regarding--
          [(A) the actual effect, during the period covered by 
        the report, of this Act on the United States economy 
        generally as well as on those specific domestic 
        industries which produce articles that are like, or 
        directly competitive with, articles being imported into 
        the United States from beneficiary countries; and
          [(B) the probable future effect which this Act will 
        have on the United States economy generally, as well as 
        on such domestic industries, before the provisions of 
        this Act terminate.
    [(2) In preparing the assessments required under paragraph 
(1), the Commission shall, to the extent practicable--
          [(A) analyze the production, trade and consumption of 
        United States products affected by this Act, taking 
        into consideration employment, profit levels, and use 
        of productive facilities with respect to the domestic 
        industries concerned, and such other economic factors 
        in such industries as it considers relevant, including 
        prices, wages, sales, inventories, patterns of demand, 
        capital investment, obsolescence of equipment, and 
        diversification of production; and
          [(B) describe the nature and extent of any 
        significant change in employment, profit levels, and 
        use of productive facilities, and such other conditions 
        as it deems relevant in the domestic industries 
        concerned, which it believes are attributable to this 
        Act.
    [(c)(1) Each report required under subsection (a) shall be 
submitted to the Congress and to the President before the close 
of the nine-month period beginning on the day after the last 
day of the period covered by the report.
      [(2) The Commission shall provide opportunity for the 
submission by the public, either orally or in writing, or both, 
of information relating to matters that will be addressed in 
the reports.]
                              ----------                              


             SECTION 206 OF THE ANDEAN TRADE PREFERENCE ACT

SEC. 206. INTERNATIONAL TRADE COMMISSION REPORTS ON IMPACT OF THE 
                    ANDEAN TRADE PREFERENCE ACT.

    (a) In General.--The United States International Trade 
Commission (hereinafter in this section referred to as the 
``Commission'') shall prepare, and submit to the Congress, a 
report regarding the economic impact of this title on United 
States industries and consumers, and, in conjunction with other 
agencies, the effectiveness of this title in promoting drug-
related crop eradication and crop substitution efforts of the 
beneficiary countries, during--
          (1) the 24-month period beginning with the date of 
        enactment of this title; and
          (2) [each calendar year] each 2-calendar-year period 
        occurring thereafter until duty-free treatment under 
        this title is terminated under section 208(b). For 
        purposes of this section, industries in the 
        Commonwealth of Puerto Rico and the insular possessions 
        of the United States shall be considered to be United 
        States industries.
          * * * * * * *