[House Report 108-224]
[From the U.S. Government Publishing Office]



108th Congress                                            Rept. 108-224
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
      UNITED STATES-CHILE FREE TRADE AGREEMENT IMPLEMENTATION ACT

                                _______
                                

                 July 21, 2003.--Ordered to be printed

                                _______
                                

    Mr. Thomas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                             together with

                    DISSENTING AND ADDITIONAL VIEWS

                        [To accompany H.R. 2738]

     [Including cost estimates of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 2738) to implement the United States-Chile Free 
Trade Agreement, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                                Contents

                                                                   Page
  I. Introduction.....................................................2
          A. Purpose and Summary.................................     2
          B. Background..........................................     2
          C. Legislative History.................................     4
 II. Section-by-Section Summary.......................................4
          A. Title I: Approval and General Provisions............     4
          B. Title II: Customs Provisions........................     7
          C. Title III: Relief from Imports......................    12
III. Vote of the Committee...........................................14
 IV. Budget Effects of the Bill......................................15
          A. Committee Estimates and Budgetary Effects...........    15
          B. Budget Authority and Tax Expenditures...............    15
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................    15
  V. Other Matters To Be Discussed Under the Rules of the House......18
          A. Committee Oversight Findings and Recommendations....    18
          B. Statement of General Performance Goals and 
              Objectives.........................................    18
          C. Constitutional Authority Statement..................    18
 VI. Changes in Existing Law Made by the Bill, as Reported...........18
VII. Executive Correspondence........................................44
VIII.Views...........................................................46


                            I. INTRODUCTION


                         A. Purpose and Summary

    H.R. 2738 would implement the June 6, 2003 Agreement 
establishing a free trade area between the United States and 
Chile.

                             B. Background

    The United States-Chile Free Trade Agreement (FTA), signed 
June 6, 2003, is one of the first trade agreements, together 
with the United States-Singapore FTA, to be considered by the 
Congress under the ``fast-track'' procedures outlined in the 
Bipartisan Trade Promotion Authority Act (TPA), which was 
approved by the 107th Congress and signed into law in August 
2002 as part of the Trade Act of 2002 (P.L. 107-210).
    The U.S.-Chile FTA represents an important advance for U.S. 
interests in South America. It is the first such agreement with 
a South American country. The Agreement establishes closer 
economic ties to one of the most open and reformed economies in 
South America and 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 alleviation. It will help spur progress in the Free 
Trade Area of the Americas and will send a positive message 
throughout the world by demonstrating that the United States 
will work in partnership with those who are committed to free 
markets. Currently, U.S. companies are at a competitive 
disadvantage in Chile because other countries, including 
Canada, Mexico, and the European Union, already have FTAs with 
Chile. The U.S.-Chile FTA takes away the advantage that these 
countries have and should expand U.S. gross domestic product by 
over $4 billion per year.
    The possibility of a U.S.-Chile FTA has been discussed for 
many years. In December 1994, the leaders of the United States, 
Canada, and Mexico announced their intention to negotiate 
Chile's accession to the North American Free Trade Agreement 
(NAFTA). Talks on possible accession for Chile to the NAFTA 
formally began in June 1995. However, ``fast track'' authority 
had lapsed, and the talks stalled. Since that time, Mexico, 
Canada, and the European Union have concluded bilateral FTAs 
with Chile, and U.S. exporters have lost business in Chile as a 
result to competitors from these countries.
    Negotiations for a U.S.-Chile FTA began in December 2000. 
After two years and fourteen rounds of negotiations, the two 
countries announced on December 11, 2002 that an agreement had 
been reached between the United States and Chile. Pursuant to 
requirements established under TPA, President Bush formally 
notified the Congress on January 30, 2003, of his intention to 
sign the Agreement. On June 6, 2003, United States Trade 
Representative Robert Zoellick and Chilean Foreign Minister 
Soledad Alvear signed the FTA at a ceremony in Miami.
    The Committee believes that the Agreement meets the 
objectives and priorities set forth in the Trade Act of 2002. 
Specifically, the Agreement benefits key U.S. export sectors 
including agriculture and construction equipment, autos and 
auto parts, computers and other information technology 
products, medical equipment, and paper products. More than 85 
percent of bilateral trade in industrial and consumer products 
areas will become tariff free immediately, with most remaining 
tariffs being phased out over four years. As for agricultural 
products, 75 percent of U.S. farm exports will enter Chile duty 
free within four years, and all duties and quotas on U.S. 
agricultural products will be phased out within 12 years after 
the implementation of the Agreement. Originating textiles and 
apparel goods will also be duty free immediately.
    The FTA is a state of the art agreement in many areas. In 
the area of services, the Agreement contains groundbreaking 
transparency rules and utilizes a trade-enhancing ``negative 
list'' approach to ensure maximum market access for services 
providers. The Agreement also provides protections and non-
discriminatory treatment for digital products such as U.S. 
software, music, text, and videos, and also provides 
protections for U.S. patents, trademarks, and trade secrets 
that go beyond past trade agreements. The investment section 
provides strong protections for U.S. investors in Chile; they 
will be treated fairly and equitably and will have access to 
meaningful dispute settlement. These protections cover key 
sectors such as agriculture, manufacturing, and services. In 
addition, the Agreement makes improvements to the NAFTA 
investor-state dispute settlement (``Chapter 11'') model called 
for in TPA by providing more transparency, public input into 
the dispute settlement, mechanisms to improve the investor-
state process by eliminating frivolous claims, and a place 
marker for a future appellate body or similar review mechanism. 
The Financial Services chapter provides strong protections for 
existing and future U.S. investors and investments in Chile. 
The Agreement also contains obligations under which each 
government commits to enforce its domestic labor and 
environmental laws.
    As noted above, this legislation is being considered under 
the Bipartisan Trade Promotion Authority Act of 2002. Under 
TPA, new trade pacts that the President negotiates in close 
consultation with Congress can be approved and implemented 
through legislation that Congress considers using streamlined 
procedures. Pursuant to TPA requirements, the President is 
required to provide written notice to Congress of the 
President's intention to enter into the negotiations. 
Throughout the negotiating process, and prior to entering into 
an agreement, the President is required to consult with 
Congress regarding the ongoing negotiations.
    The President must notify the Congress of his intent to 
enter into a trade agreement at least 90 calendar days before 
the agreement is signed. Within 60 days after entering in the 
Agreement, the President must submit to the Congress a 
description of those changes to existing laws that the 
President considers would be required in order to bring the 
United States into compliance with the Agreement. After 
entering into the Agreement, the President must also submit to 
the Congress the formal legal text of the agreement, draft 
implementing legislation, astatement of administrative action 
proposed to implement the Agreement, and other related supporting 
information as required under section 2105(a) of TPA. Following 
submission of these documents, the implementing bill is introduced, by 
request, by the Majority Leader in each chamber. The House then has up 
to 60 days to consider implementing legislation for the Agreement (the 
Senate has up to an additional 30 days). No amendments to the 
legislation are allowed under TPA requirements.

                         C. Legislative History

    On November 29, 2000, the President first notified Congress 
of his intent to negotiate an FTA with Chile. The President 
provided formal notification to Congress of the negotiations 
with Chile as required under TPA (which was enacted subsequent 
to the start of the U.S.-Chile FTA negotiations) on August 22, 
2002. During and after the negotiations, the President 
continued his consultations with Congress pursuant to the 
letter and spirit of the TPA requirements.
    Following the June 6, 2003 signing of the U.S.-Chile FTA, 
in accordance with TPA requirements, President Bush submitted 
to Congress on July 3, 2003 a description of the changes to 
existing U.S. laws that would be required to bring the United 
States into compliance with the agreement.
    On June 10, 2003, the Subcommittee on Trade of the 
Committee on Ways and Means held a hearing on the United 
States-Chile and United States-Singapore FTAs. The Subcommittee 
received testimony supporting these Agreements from the 
Administration and Members of Congress. The Subcommittee also 
heard testimony from numerous U.S. private sector companies and 
organizations.
    On July 10, 2003, the Committee on Ways and Means 
considered in an informal markup session draft implementing 
legislation for the Singapore and Chile FTAs concerning matters 
within the jurisdiction of the Committee.
    On July 15, 2003, President Bush formally transmitted to 
Congress the formal legal text of the U.S.-Chile FTA, draft 
implementing legislation, a statement of administrative action 
proposed to implement the Agreement, and other related 
supporting information as required under section 2105(a) of 
TPA. Following this transmittal, on July 15, 2003, Majority 
Leader DeLay, along with Congressman Rangel, introduced, by 
request, H.R. 2738 to implement the U.S.-Chile FTA. The bill 
was referred to the Committee on Ways and Means and the 
Committee on the Judiciary.
    On July 17, 2003, the Committee on Ways and Means formally 
met to consider H.R. 2738. The Committee ordered H.R. 2738 
favorably reported to the House of Representatives by a roll 
call vote of 33-5. Under the requirements of TPA, amendments 
were not permitted.

                     II. SECTION-BY-SECTION SUMMARY


                TITLE I: APPROVAL AND GENERAL PROVISIONS

Section 101: Approval and entry into force

            Current law
    No provision.
            Explanation of provision
    Section 101 states that Congress approves the U.S.-Chile 
Free Trade Agreement and the Statement of Administrative Action 
and provides that the Agreement enters into force when the 
President determines that Chile is in compliance with its 
agreement obligations and has exchanged notes with the United 
States. Section 101 provides that the date of entry into force 
will be no sooner than January 1, 2004.
            Reason for change
    Approval of the Agreement and the Statement of 
Administrative Action is required under the procedures of 
section 2103(b)(3) of the Bipartisan Trade Promotion Authority 
Act of 2002. The remainder of section 101 provides for entry 
into force of the Agreement.

Section 102: Relationship of the agreement to U.S. and state law

            Current law
    No provision.
            Explanation of provision
    Section 102 provides that U.S. law is to prevail in a 
conflict between the Agreement and such law. It also states 
that the Agreement does not preempt state law that may conflict 
with the Agreement. Only the United States is entitled to bring 
a court action to resolve a conflict between a state law and 
the Agreement.
            Reason for change
    Section 102 is necessary to make clear the relationship 
between the Agreement and federal and state law, respectively.

Section 103: Consultation and layover for proclaimed actions

            Current law
    No provision.
            Explanation of provision
    Section 103 provides that where the President is given 
proclamation authority subject to consultation and layover, he 
may proclaim action only after he has: obtained advice from the 
International Trade Commission and the appropriate private 
sector advisory committees; submitted a report to the House 
Ways & Means and Senate Finance Committees concerning the 
reasons for the action; and consulted with the Committees. The 
President may proclaim the proposed action after 60 days have 
elapsed.
            Reason for change
    The bill gives the President certain proclamation authority 
but requires extensive consultation with Congress before such 
authority may be exercised. The Committee believes that such 
consultation is an essential component of the delegation of 
authority to the President and expects that such consultations 
will be conducted in a thorough manner.

Section 104: Implementing actions in anticipation of entry into force 
        and initial regulations

            Current law
    No provision.
            Explanation of provision
    Section 104(a) provides that after the date of enactment, 
the President may proclaim actions and agencies may issue 
regulations as necessary to ensure that any provision of this 
Act that takes effect on the date that the Agreement enters 
into force is appropriately implemented, but not before the 
effective date.
    Section 104(b) establishes that regulations necessary or 
appropriate to carrying out the actions proposed in the 
Statement of Administrative Action shall, to the maximum extent 
feasible, be issued within one year of entry into force of the 
agreement or the effective date of the provision, as the case 
may be.
            Reason for change
    Section 104 provides for the issuance of regulations. The 
Committee strongly believes that regulations should be issued 
in a timely manner in order to provide maximum clarity to 
parties claiming benefits under the Agreement. As noted in the 
Statement of Administrative Action, the regulation-issuing 
agency will provide a report to Congress not later than thirty 
days before one year elapses on any regulation that is going to 
be issued later than one year.

Section 105: Administration of dispute settlement proceedings

            Current law
    No provision.
            Explanation of provision
    Section 105 authorizes the President to establish an office 
within the Commerce Department responsible for providing 
administrative assistance to any state-to-state dispute 
settlement panels that may be established under the Agreement 
and authorizes appropriations for the office and for payment of 
the U.S. share of expenses.
            Reason for change
    The Committee believes that the Commerce Department is the 
appropriate agency to provide administrative assistance to 
panels.

Section 106: Arbitration of claims

            Current law
    No provision.
            Explanation of provision
    Section 106 authorizes the United States to resolve certain 
claims covered by the investor-state dispute settlement 
procedures set forth in the Agreements and specifies that all 
U.S. government contracts are to contain a choice of law 
provision for resolving any breach of contract claim.
            Reason for change
    This provision is necessary to meet U.S. obligations under 
Article 10.21 of the Agreement.

Section 107: Effective dates; effect of termination

            Current law
    No provision.
            Explanation of provision
    The effective date of this Act is the date of entry into 
force of the Agreement. However, sections 1-3 and Title I take 
effect upon enactment. The Act shall cease to be effective on 
the date on which the Agreement ceases to be in effect.
            Reason for change
    Section 107 implements U.S. obligations under the 
Agreement.

                      TITLE II: CUSTOMS PROVISIONS

Section 201: Tariff modifications

            Current law
    No provision.
            Explanation of provision
    Section 201(a) provides the President with the authority to 
proclaim tariff modifications to carry out the Agreement.
    Section 201(b) gives the President the authority, subject 
to consultation and layover procedures, to proclaim further 
tariff modifications 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.
    Section 201(c) allows, in addition to any duty ordinarily 
collected on Chilean imports, the assessment of a duty on an 
``agricultural safeguard good'' if the unit import price of the 
good when it enters the United States is less than the trigger 
price for that good in the Agreement. However, no additional 
duty may be assessed if the good is subject to a safeguard 
measure under the Agreement or under Title II of the Trade Act 
of 1974. The authority to apply such an agriculture safeguard 
to a good terminates on the earlier of the date on which that 
good first receives duty-free treatment under the Agreement or 
twelve years after the Agreement's entry into force.
            Reason for change
    Section 201(a) is necessary to put the United States in 
compliance with the market access provisions of the Agreement. 
Section 201(b) gives the President flexibility to maintain the 
trade liberalizing nature of the Agreement. The Committee 
expects the President to comply with the letter and spirit of 
the consultation and layover provisions of this Act in carrying 
out this subsection.
    Section 201(c) implements the agriculture safeguard 
provisions of article 3.18 of the Agreement and provides 
important security to U.S. farmers.

Section 202: Rules of origin

            Current law
    No provision.
            Explanation of provision
    Section 202 codifies the rules of origin set out in Chapter 
4 of the Agreement. Under the general rules, there are three 
basic ways for a good of Chile to qualify as an ``originating 
good,'' and therefore be eligible for preferential tariff 
treatment when it is imported into the United States. A good is 
an originating good if: (1) it is ``wholly obtained or produced 
entirely in the territory of Chile, the United States or 
both''; (2) those materials used to produce the good that are 
not themselves originating goods are transformed in such a way 
as to cause their tariff classification to change or meet other 
requirements, as specified in Annex 4.1 of the Agreement; or 
(3) it is produced entirely in the territory of Chile, the 
United States, or both exclusively from originating materials.
    Under Chapter 4 rules, an apparel product must generally 
meet a tariff shift rule that implicitly imposes a ``yarn 
forward'' requirement. Thus, to qualify as an originating good 
imported into the United States from Chile, an apparel product 
must have been cut (or knit to shape) and sewn or otherwise 
assembled in Chile from yarn, or fabric made from yarn, that 
originates in Chile or the United States. There is a limited 
amount of apparel that may enter the United States duty free, 
subject to tariff preference level (TPL) caps if it does not 
meet the rule of origin.
    The remainder of section 202 of the implementing bill sets 
forth more detailed rules for determining whether a good meets 
the Agreement's requirements under the second method for 
qualifying as an originating good. These provisions include 
rules pertaining to de minimis quantities of non-originating 
materials that do not undergo a tariff transformation, and the 
alternative methods for calculating regional value content. 
Other provisions in section 202 address valuation of materials 
and determination of the originating or non-originating status 
of fungible goods and materials.
            Reason for change
    Rules of origin are needed in order to confine Agreement 
benefits, such as tariff cuts, to Chilean goods to prevent 
third-country goods from being transshipped through Chile and 
claiming benefits under the Agreement. Section 202 puts the 
United States in compliance with the rules of origin provisions 
of the agreement.

Section 203: Drawback

            Current law
    Current law under several sections of the Tariff Act of 
1930 and the Foreign Trade Zones Act provides for the 
availability of duty drawback and other duty refund or deferral 
mechanisms.
            Explanation of provision
    Section 203 of the bill implements Article 3.8 of the 
Agreement, which begins a 3-year, phased elimination of duty 
drawback and duty deferral programs between the United States 
and Chile eight years after the entry into force of the 
Agreement. Specifically, eight years after the Agreement enters 
into force, the United States will reduce the refund, waiver, 
or remission of duties subject to duty drawback or duty 
deferral programs by the following formula: 75 percent during 
the first year period; 50 percent in the following year; and 25 
percent during the final year. The formula will be applied to 
drawback claims for duties paid on imported goods that are 
subsequently exported, as well as duties for which the payment 
has been deferred because of their introduction into a foreign-
trade zone or other duty deferral program.
    Section 203(c) of the bill makes clear that no amendment 
contained in section 203 authorizes the refund, waiver, or 
reduction of countervailing or antidumping duties imposed on a 
good imported into the United States. This provision is 
consistent with Article 3.8(2)(a) of the Agreement and current 
U.S. law.
            Reason for change
    The Administration maintains that some free trade 
agreements should include the elimination of duty drawback to 
ensure that neither country becomes an ``export platform'' for 
materials produced in other regions of the world. Accordingly, 
the Agreement phases out drawback rights, and section 203 is 
necessary to put the United States in compliance with those 
provisions of the agreement. Committee Members, however, have 
expressed concern about this strategy and note approvingly that 
the Administration has recently requested public comment on the 
subject and will seek comments from formal trade advisory 
committees.

Section 204: Customs user fees

            Current law
    Section 58c of the Title 19 lays out various user fees 
applied by customs officials to imports, including the 
Merchandise Processing Fee, which is applied on an ad valorem 
basis subject to a cap.
            Explanation of provision
    Section 204 of the bill implements U.S. commitments under 
Article 3.12(4) of the Agreement, regarding the exemption of 
the merchandise processing fee for originating goods. This 
provision is similar to the one in the implementing legislation 
for the North American Free Trade Agreement (NAFTA). The 
provision also prohibits use of funds in the Customs User Fee 
Account to provide services related to entry of originating 
goods in accordance with U.S. obligations under the General 
Agreement on Tariffs and Trade 1994.
            Reason for change
    As with other free trade agreements, the Agreement 
eliminates the merchandise processing fee on qualifying goods 
from Chile. Other customs user fees remain in place. Section 
204 is necessary to put the United States in compliance with 
the user fee elimination provisions of the Agreement. The 
Committee expects that the President, in his yearly budget 
request, will take into account the need for funds to pay 
expenses for entries under the Agreement given that MPF funds 
will not be available.

Section 205: Disclosure of incorrect information

            Current law
    No provision.
            Explanation of provision
    Section 205 of the bill implements Articles 4.16(4) and 
4.16(5) of the Agreement. The provision prohibits the 
imposition of a penalty upon an importer who makes an invalid 
claim for preferential tariff treatment under the Agreement if 
the importer acts promptly and voluntarily to disclose the 
error. If an importer so acts more than once, falsely or 
without substantiation, U.S. authorities may suspend 
preferential treatment with respect to identical goods imported 
by that importer.
            Reason for change
    Section 205 is necessary to put the United States into 
compliance with Articles 4.16(4) and 4.16(5) of the Agreement.

Section 206: Reliquidation of entries

            Current law
    No provision.
            Explanation of provision
    Section 206, in accordance with Article 4.12 of the 
Agreement, provides authority for customs officials to 
reliquidate an entry to refund any excess duties (including any 
merchandise processing fees) paid on a good qualifying under 
the rules of origin for which no claim for preferential tariff 
treatment was made at the time of importation if the importer 
so requests within one year of the date of importation. Current 
law provides similar authority for NAFTA entries.
            Reason for change
    Article 4.12 of the Agreement anticipates that private 
parties may err in claiming preferential benefits under the 
Agreement and provides a one-year period for parties to make 
such claims for preferential tariff treatment even if the entry 
of the goods at issue has already been liquidated, i.e., 
legally finalized by customs officials. Section 206 is 
necessary to put the United States into compliance with Article 
4.12 of the Agreement.

Section 207: Recordkeeping requirements

            Current law
    No provision.
            Explanation of provision
    Section 207 of the bill, in accordance with Article 4.14 of 
the Agreement, provides that an exporter or producer claiming 
that a good is an originating good for the purposes of the 
Agreement shall maintain, for a period of five years after the 
date of issuance of a certificate of origin, a copy of the 
certificate and other information demonstrating that the good 
qualifies as originating.
            Reason for change
    Section 207 is necessary to put the United States in 
compliance with the recordkeeping requirement provisions of the 
Agreement at Article 4.14.

Section 208: Enforcement of textile and apparel rules of origin

            Current law
    No provision.
            Explanation of provision
    Section 208 of the bill implements the verification 
provisions of the Agreement at Article 3.21 and authorizes the 
President to take appropriate action while the verification is 
being conducted, including suspending the application of 
preferential tariff treatment to the textile or apparel good 
for which a claim of origin has been made or for textile or 
apparel goods exported or produced by the person subject to a 
verification. If the President is unable to make a 
determination within 12 months of the date of the request, the 
President may take appropriate action, including denial of 
entry to the textile or apparel goods subject to the 
verification, to similar goods exported or produced by the 
person that exported or produced the good, or to any textile or 
apparel goods exported or produced by the person subject to the 
verification.
            Reason for change
    In order to avoid textile transshipment, special textile 
enforcement provisions were included in the Agreement. Section 
208 is necessary to authorize these enforcement mechanisms for 
use by U.S. authorities.

Section 209: Conforming amendments

            Current law
    No provision.
            Explanation of provision
    Section 209 makes conforming technical amendments to the 
Tariff Act of 1930 related to the changes in the drawback 
statute in section 203.
            Reason for change
    Section 203 makes various changes to the duty drawback 
statutes that require conforming technical amendments to 
existing law. Like section 203, section 209 is thus necessary 
to put the United States in compliance with the drawback 
provisions of the Agreement.

Section 210: Regulations

            Current law
    No provision.
            Explanation of provision
    Section 210 provides that the Secretary of the Treasury 
shall issue regulations to carry out provisions of this bill 
related to duty drawback, rules of origin, and Customs user 
fees.
            Reason for change
    Because the implementing bill involves lengthy and complex 
implementation procedures by customs officials, section 210 is 
necessary in order to authorize the Secretary of the Treasury 
to carry out provisions of the implementing bill through 
regulations.

                     TITLE III: RELIEF FROM IMPORTS

Subtitle A: Relief From Imports Benefiting From the Agreement (Sections 
                                311-316)


Current law

    No provision.

Explanation of provision

    Sections 311-316 authorize the President, after an 
investigation and affirmative determination by the U.S. 
International Trade Commission, to impose specified import 
relief when, as a result of the reduction or elimination of a 
duty under the Agreement, a Chilean product is being imported 
into the United States in such increased quantities and under 
such conditions as to be a substantial cause of serious injury 
or threat of serious injury to the domestic industry.
    Section 311(c) defines ``substantial cause'' in the same 
manner as Section 201 of the Trade Act of 1974.
    Section 311(d) exempts from investigation under this 
section Chilean articles that have previously received relief 
since entry into force under this safeguard or if, at the time 
the petition is filed, the article is subject to import relief 
under the global safeguard provisions in section 201 of the 
Trade Act of 1974.
    Under section 312(b), if the ITC makes an affirmative 
determination, it must find and recommend to the President the 
amount of import relief that is necessary to remedy or prevent 
serious injury and to facilitate the efforts of the domestic 
industry to make a positive adjustment to import competition.
    Under section 313(a), the President must provide import 
relief to the extent that the President determines is necessary 
to remedy or prevent the injury found by the ITC and to 
facilitate the efforts of the domestic industry to make a 
positive adjustment to import competition. Under section 
313(b), the President is not required to provide import relief 
if the President determines that the relief will not provide 
greater economic or social benefits than costs. Section 313(c) 
sets forth the nature of the relief that the President may 
provide as: a suspension of further tariff reductions for the 
article; or an increase of tariffs to a level that does not 
exceed the lesser of the existing most favored nation (MFN)/
normal trade relation (NTR) rate or the MFN/NTR rate in effect 
when the Agreement entered into force. The provision further 
states that if the President provides relief for greater than 
one year, the relief must be subject to progressive 
liberalization at regular intervals over the course of its 
application.
    Section 313(d) states that the import relief that the 
President is authorized to provide may not exceed three years. 
If the President provided an initial period of relief of less 
than three years, the President may extend the relief under 
certain circumstances, but the aggregate period of relief, 
including extensions, may not exceed three years.
    Section 314 provides that no relief may be provided under 
this subtitle after ten years from the Agreement's entry into 
force, unless the tariff elimination for the article under the 
Agreement is twelve years, in which case relief may not be 
provided for that article after twelve years from entry into 
force.
    Section 315 authorizes the President to provide 
compensation to Chile consistent with Article 7.4 of the 
Agreement.
    Section 316 provides for the treatment of confidential 
business information.

Reason for change

    The Committee believes that it is important to have in 
place a temporary, extraordinary mechanism if a U.S. industry 
experiences injury by reason of increased import competition 
from Chile in the future, with the understanding that the 
President is not required to provide relief if the relief will 
not provide greater economic or social benefits than costs. The 
Committee intends that administration of this safeguard be 
consistent with U.S. obligations under Chapter 8 of the 
Agreement.

      Subtitle B: Textile and Apparel Safeguard (Sections 321-328)


Current law

    No provision.

Explanation of provision

    Section 321 provides that a request for safeguard relief 
under this subtitle may be filed with the President by an 
interested party. The President is to review the request and 
determine whether to commence consideration of the request. If 
the President determines to commence consideration of the 
request, he is to publish a notice commencing consideration and 
seeking comments. The notice is to include the request itself.
    Section 322(a) of the Act provides for the President to 
determine, pursuant to a request by an interested party, 
whether, as a result of the elimination of a duty provided 
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. Section 322(a) defines ``serious 
damage,'' directing the President to examine the effect of 
increased imports on the domestic industry producing the 
article that is like, or directly competitive with, the 
imported article.
    Section 322(b) identifies the relief that the President may 
provide, which generally will be an increase in tariffs to the 
MFN/NTR duty rate for the article at the time relief is 
granted. Section 323 of the bill provides that the initial 
period of relief will be no longer than three years, although 
if the initial period for any import relief is less than three 
years, the President may extend the total relief for a period 
of up to three years under certain circumstances. Section 324 
provides that relief may not be granted to an article under the 
textile safeguard if relief has previously been granted under 
Subtitle A of this title safeguard. Under section 325, after 
the safeguard expires, the article that had been subject to 
such action shall be subject to duty-free treatment.
    Section 326 of the bill states that the authority to 
provide this safeguard relief expires eight years after the 
textile and apparel provisions of the Agreement take effect. 
Section 327 of the Act gives authority to the President to 
provide compensation to Chile if he orders relief. Section 328 
provides for the treatment of business confidential 
information.

Reason for change

    The Committee intends that the provisions of subtitle B be 
administered in a manner that is in compliance with U.S. 
obligations under Article 3.19 of the Agreement. In particular, 
the Committee expects that the President will implement a 
transparent process that will serve as an example to our 
trading partners.

                       III. VOTE OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the vote of the Committee on Ways and Means in its 
consideration of the bill, H.R. 2738.

                       MOTION TO REPORT THE BILL

    The bill, H.R. 2738, was ordered favorably reported by a 
roll call vote of 33 yeas to 5 nays (with a quorum being 
present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present    Representatives      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Thomas.....................        X   ........  .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................        X   ........  .........  Mr. Stark........  ........        X   .........
Mr. Shaw.......................        X   ........  .........  Mr. Matsui.......        X   ........  .........
Mrs. Johnson...................        X   ........  .........  Mr. Levin........        X   ........  .........
Mr. Houghton...................        X   ........  .........  Mr. Cardin.......        X   ........  .........
Mr. Herger.....................        X   ........  .........  Mr. McDermott....        X   ........  .........
Mr. McCrery....................        X   ........  .........  Mr. Kleczka......  ........        X   .........
Mr. Camp.......................        X   ........  .........  Mr. Lewis (GA)...  ........        X   .........
Mr. Ramstad....................        X   ........  .........  Mr. Neal.........        X   ........  .........
Mr. Nussle.....................        X   ........  .........  Mr. McNulty......  ........        X   .........
Mr. Johnson....................        X   ........  .........  Mr. Jefferson....  ........  ........  .........
Ms. Dunn.......................        X   ........  .........  Mr. Tanner.......        X   ........  .........
Mr. Collins....................        X   ........  .........  Mr. Becerra......        X   ........  .........
Mr. Portman....................        X   ........  .........  Mr. Doggett......  ........  ........  .........
Mr. English....................        X   ........  .........  Mr. Pomeroy......        X   ........  .........
Mr. Hayworth...................        X   ........  .........  Mr. Sandlin......        X   ........  .........
Mr. Weller.....................        X   ........  .........  Ms. Tubbs Jones..  ........  ........  .........
Mr. Hulshof....................        X   ........  .........
Mr. McInnis....................        X   ........  .........
Mr. Lewis (KY).................        X   ........  .........
Mr. Foley......................        X   ........  .........
Mr. Brady......................  ........  ........  .........
Mr. Ryan.......................        X   ........  .........
Mr. Cantor.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d)(2) 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. 
3009 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 clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that 
enactment of H.R. 3009 would reduce customs duty receipts due 
to lower tariffs imposed on goods from Chile.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII 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, July 21, 2003.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2738, a bill to 
implement the United States-Chile Free Trade Agreement.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Annabelle 
Bartsch.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 2738--A bill to implement the United States-Chile Free Trade 
        Agreement

    Summary: H.R. 2738 would approve the free agreement (FTA) 
between the government of the United States and the government 
of Chile that was entered into on June 6, 2003. It would 
provide the tariff reductions and other changes in law related 
to implementation of the agreement, such as provisions dealing 
with dispute settlement, rules of origin, and safeguard 
measures for textile and apparel industries. The bill also 
would allow the temporary entry of certain business persons 
into the United States.
    The Congressional Budget Office estimates that enacting the 
bill would reduce revenues by $5 million in 2004, by $38 
million over the 2004-2008 period, and by $109 million over the 
2004-2013 period, net of income and payroll tax offsets. The 
bill would not have a significant effect on direct spending or 
spending subject to appropriation. CBO has determined that H.R. 
2738 contains no intergovernmental or private-sector mandates 
as defined in the Unfunded Mandates Reform Act (UMRA) and would 
not affect the budgets of state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2738 is shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                             CHANGES IN REVENUES \1\

Reductions in Tariff Rates.........................................       -5       -7       -8       -9      -10
Civil Penalties for Attestation Violations.........................        *        *        *        *        *
                                                                    --------------------------------------------
      Total........................................................       -5       -7       -8       -9      -10
----------------------------------------------------------------------------------------------------------------
\1\ H.R. 2738 also would affect direct spending and spending subject to appropriation, but the amounts of those
  changes would be less than $500,000 a year.
* = Less than $500,000.

Basis of estimate

            Revenues
    Under the United States-Chile agreement, all tariffs on 
U.S. imports from Chile would be phased out over time. The 
tariffs would be phased out for individual products at varying 
rates according to one of several different timetables ranging 
from immediate elimination to partial elimination over 10 
years. According to the U.S. International Trade Commission 
(USITC), the U.S. collected $24 million in customs duties in 
2002 on about $3.6 billion of imports from Chile. These imports 
consist mostly of edible fruits and nuts, articles of wood or 
copper, fish and crustaceans, and certain organic chemicals. 
Based on these data, CBO estimates that phasing out tariff 
rates as outlined in the U.S.-Chile agreement would reduce 
revenues by $5 million in 2004, by $38 million over the 2004-
2008 period, and by $109 million over the 2004-2013 period, net 
of income and payroll tax offsets.
    This estimate includes the effects of increased imports 
from Chile that would result from the reduced prices of 
imported products in the United States, reflecting the lower 
tariff rates. It is likely that some of the increase in U.S. 
imports from Chile would displace imports from other countries. 
In the absence of specific data on the extent of this 
substitution effect, CBO assumes that an amount equal to one-
half of the increase in U.S. imports from Chile would displace 
imports from other countries.
    H.R. 2738 would also allow the Secretary of Labor to assess 
civil monetary penalties on employers for violations of the 
labor attestation process with respect to certain workers 
fromChile. CBO expects that any additional revenues collected as a 
result would amount to less than $500,000 in any year.
            Direct spending
    Title IV of the bill would establish a new nonimmigrant 
category for certain professional workers from Chile. The 
legislation would limit the number of annual entries under this 
category to 1,400, plus spouses and children. The Bureau of 
Citizenship and Immigration Services (BCIS) would charge fees 
of about $100 to provide nonimmigrant visas, so CBO estimates 
that the agency would collect less than $1 million annually in 
offsetting receipts (a credit against direct spending). The 
agency is authorized to spend such fees without further 
appropriation, so the new impact on BCIS spending would not be 
significant.
    Under current law, the Department of State also collects 
$100 application fee for nonimmigrant visas. These collections 
are spent on border security and consular functions. CBO 
estimates that the net budgetary impact would be less than 
$500,000 a year.
            Spending subject to appropriation
    Title I of H.R. 2738 would authorize the appropriation the 
necessary funds for the Department of Commerce to pay the 
United States' share of the costs of the dispute settlement 
procedures established by the agreement. Based on information 
from the agency, CBO estimates that implementing this provision 
would cost $100,000 in 2004, and $250,000 in each of the 
following years, subject to the availability of appropriated 
funds.
    Title III would require the International Trade Commission 
(ITC) to investigate claims of injury to domestic industries as 
a result of the FTA. The ITC would have 120 days to determine 
whether a domestic industry has been injured, and if so, would 
recommend the necessary amount of import relief. The ITC would 
also submit a report on its determination to the President. 
According to the ITC, similar FTAs have resulted in only a 
handful of cases each year, at an average cost of about $200,00 
per investigation. Based on this information, CBO estimates the 
bill would have no significant effect on spending subject to 
appropriation.
    Summary of effect on revenues and direct spending: The 
overall effects of H.R. 2738 on revenues and direct spending 
are shown in the following table.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                         2003     2004     2005     2006     2007     2008     2009     2010     2011     2012     2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in receipts..................................        0       -5       -7       -8       -9      -10      -11      -13      -14      -16      -18
Changes in outlays...................................        *        *        *        *        *        *        *        *        *        *        *
--------------------------------------------------------------------------------------------------------------------------------------------------------
* = Less than $500,000.

    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Revenues: Annabelle Bartsch. 
Federal Spending: Dispute Settlements--Melissa Zimmerman; 
Immigration--Mark Grabowicz, Christi Hawley-Sadoti, and Sunita 
D'Monte. Impact on State, Local, and Tribal Governments: 
Melissa Merrell. Impact on the Private Sector: Paige Piper/
Bach.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis and Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee, based on public hearing testimony and 
information from the Administration, concluded that it is 
appropriate and timely to consider the bill as reported. In 
addition, the legislation is governed by procedures of the 
Trade Agreements Act of 2002.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

                 C. Constitutional Authority Statement

    With respect to clause 3(d)(1) of rule XIII of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article 1 of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States.'')

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  In compliance with clause 3(e) 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 italic, existing law in which no change is 
proposed is shown in roman):

TARIFF ACT OF 1930

           *       *       *       *       *       *       *



                     TITLE III--SPECIAL PROVISIONS

Part I--Miscellaneous

           *       *       *       *       *       *       *



SEC. 311. BONDED MANUFACTURING WAREHOUSES.

  All articles manufactured in whole or in part of imported 
materials, or of materials subject to internal-revenue tax, and 
intended for exportation without being charged with duty, and 
without having an internal-revenue stamp affixed thereto, 
shall, under such regulations as the Secretary of the Treasury 
may prescribe, in order to be so manufactured and exported, be 
made and manufactured in bonded warehouses similar to those 
known and designated in Treasury Regulations as bonded 
warehouses, class six: Provided, That the manufacturer of such 
articles shall first give satisfactory bonds for the faithful 
observance of all the provisions of law and of such regulations 
as shall be prescribed by the Secretary of the Treasury: 
Provided further, That the manufacture of distilled spirits 
from grain, starch, molasses, or sugar, including all dilutions 
or mixtures of them or either of them, shall not be permitted 
in such manufacturing warehouses.
  Whenever goods manufactured in any bonded warehouse 
established under the provisions of the preceding paragraph 
shall be exported directly therefrom or shall be duly laden for 
transportation and immediate exportation under the supervision 
of the proper officer who shall be duly designated for that 
purpose, such goods shall be exempt from duty and from the 
requirements relating to revenue stamps.
  No flour, manufactured in a bonded manufacturing warehouse 
from wheat imported from ninety days after the date of the 
enactment of this Act, shall be withdrawn from such warehouse 
for exportation without payment of a duty on such imported 
wheat equal to any reduction in duty which by treaty will apply 
in respect of such flour in the country to which it is to be 
exported.
  Any materials used in the manufacture of such goods, and any 
packages, coverings, vessels, brands, and labels used in 
putting up the same may, under the regulations of the Secretary 
of the Treasury, be conveyed without the payment of revenue tax 
or duty into any bonded manufacturing warehouse, and imported 
goods may, under the aforesaid regulations, be transferred 
without the exaction of duty from any bonded warehouse into any 
bonded manufacturing warehouse; but this privilege shall not be 
held to apply to implements, machinery, or apparatus to be used 
in the construction or repair of any bonded manufacturing 
warehouse or for the prosecution of the business carried on 
therein.
  Articles or materials received into such bonded manufacturing 
warehouse or articles manufactured therefrom may be withdrawn 
or removed therefrom for direct shipment and exportation or for 
transportation and immediate exportation in bond to foreign 
countries or to the Philippine Islands under the supervision of 
the officer duly designated therefor by the appropriate customs 
officer of the port, who shall certify to such shipment and 
exportation, or ladening for transportation, as the case may 
be, describing the articles by their mark or otherwise, the 
quantity, the date of exportation, and the name of the vessel: 
Provided, That the by-products incident to the processes of 
manufacture, including waste derived from cleaning rice in 
bonded warehouse under the Act of March 24, 1874, in said 
bonded warehouses may be withdrawn for domestic consumption on 
the payment of duty equal to the duty which would be assessed 
and collected by law if such waste or by-products were imported 
from a foreign country: Provided, That all waste material may 
be destroyed under Government supervision. All labor performed 
and services rendered under these provisions shall be under the 
supervision of a duly designated officer of the customs and at 
the expense of the manufacturer.
  A careful account shall be kept by the appropriate custom 
officer of all merchandise delivered by him to any bonded 
manufacturing warehouse, and a sworn monthly return, verified 
by the customs officers in charge, shall be made by the 
manufacturer containing a detailed statement of all imported 
merchandise used by him in the manufacture of exported 
articles.
  Before commencing business the proprietor of any 
manufacturing warehouse shall file with the Secretary of the 
Treasury a list of all the articles intended to be manufactured 
in such warehouse, and state the formula of manufacture and the 
names and quantities of the ingredients to be used therein.
  Articles manufactured under these provisions may be withdrawn 
under such regulations as the Secretary of the Treasury may 
prescribe for transportation and delivery into any bonded 
warehouse for the sole purpose of export therefrom: Provided, 
That cigars manufactured in whole of tobacco imported from any 
one country, made and manufactured in such bonded manufacturing 
warehouses, may be withdrawn for home consumption upon the 
payment of the duties on such tobacco in its condition as 
imported under such regulations as the Secretary of the 
Treasury may prescribe, and the payment of the internal-revenue 
tax accruing on such cigars in their condition as withdrawn, 
and the boxes or packages containing such cigars shall be 
stamped to indicate their character, origin of tobacco from 
which made, and place of manufacture.
  The provisions of section 3433 of the Revised Statutes shall, 
so far as may be practicable, apply to any bonded manufacturing 
warehouse established under this Act and to the merchandise 
conveyed therein.
    Distilled spirits and wines which are rectified in bonded 
manufacturing warehouse, class six, and distilled spirits which 
are reduced in proof and bottled in such warehouses, shall be 
deemed to have been manufactured within the meaning of this 
section, and may be withdrawn as hereinbefore provided, and 
likewise for shipment in bond to Puerto Rico, subject to the 
provisions of this section, and under such regulations as the 
Secretary of the Treasury may prescribe, there to be withdrawn 
for consumption or be rewarehoused and subsequently withdrawn 
for consumption: Provided, That upon withdrawal in Puerto Rico 
for consumption, the duties imposed by the customs laws of the 
United States shall be collected on all imported merchandise 
(in its condition as imported) and imported containers used in 
the manufacture and putting up of such spirits and wines in 
such warehouses: Provided further, That no internal-revenue tax 
shall be imposed on distilled spirits and wines rectified in 
class six warehouses if such distilled spirits and wines are 
exported or shipped in accordance with the provisions of this 
section, and that no person rectifying distilled spirits or 
wines in such warehouses shall be subject by reason of such 
rectification to the payment of special tax as a rectifier.
    No article manufactured in a bonded warehouse from 
materials that are goods subject to NAFTA drawback, as defined 
in section 203(a) of the North American Free Trade Agreement 
Implementation Act, may be withdrawn from warehouse for 
exportation to a NAFTA country, as defined in section 2(4) of 
that Act, 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 
upon the presentation, before such 61st day, of satisfactory 
evidence of the amount of any customs duties paid to the NAFTA 
country on the article, the customs duty may be waived or 
reduced (subject to section 508(b)(2)(B)) in an amount that 
does not exceed the lesser of--
          (1) the total amount of customs duties paid or owed 
        on the materials on importation into the United States, 
        or
          (2) the total amount of customs duties paid on the 
        materials to the NAFTA country.
    If Canada ceases to be a NAFTA country and the suspension 
of the operation of the United States-Canada Free-Trade 
Agreement thereafter terminates, no article manufactured in a 
bonded warehouse, except to the extent that such article is 
made from an article that is a drawback eligible good under 
section 204(a) of the United States-Canada Free-Trade Agreement 
Implementation Act of 1988, may be withdrawn from such 
warehouse for exportation to Canada during the period such 
Agreement is in operation without payment of a duty on such 
imported merchandise in its condition, and at the rate of duty 
in effect, at the time of importation.
    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.

SEC. 312. BONDED SMELTING AND REFINING WAREHOUSES.

    (a) * * *
    (b) The several charges against such bond may be canceled 
in whole or in part--
          (1) upon the exportation from the bonded warehouses 
        which treated the metal-bearing materials, or from any 
        other bonded smelting or refining warehouse, of a 
        quantity of the same kind of metal contained in any 
        product of smelting or refining of metal-bearing 
        materials equal to the dutiable quantity contained in 
        the imported metal-bearing materials less wastage 
        provided for in subsection (c); [except that 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--
                  [(A) the total amount of customs duties 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, or] 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

           *       *       *       *       *       *       *

          (4) upon the transfer of the bond charges to a bonded 
        customs warehouse other than a bonded smelting or 
        refining warehouse by physical shipment of a quantity 
        of the same kind of metal contained in any product of 
        smelting or refining equal to the dutiable quantity 
        contained in the imported metal-bearing materials less 
        wastage provided for in subsection (c), and upon 
        withdrawal from such other warehouse for exportation or 
        domestic consumption the provisions of this section 
        shall apply; [except that 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--
                  [(A) the total amount of customs duties 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, or] 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

           *       *       *       *       *       *       *

  (d) Upon the exportation of a product of smelting or refining 
other than refined metal the bond shall be credited with a 
quantity of metal equivalent to the quantity of metal contained 
in the product exported less the proportionate part of the 
deductions allowed for losses in determination of the bond 
charge being cancelled that would not ordinarily be sustained 
in production of the specific product exported as ascertained 
from time to time by the Secretary of the Treasury; [except 
that 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--
          [(1) the total amount of customs duties paid or owed 
        on the materials on importation into the United States, 
        or
          [(2) the total amount of customs duties paid to the 
        NAFTA country on the product.] 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.

           *       *       *       *       *       *       *


SEC. 313. DRAWBACK AND REFUNDS.

    (a) * * *

           *       *       *       *       *       *       *

    (j) Unused Merchandise Drawback.--
          (1) * * *

           *       *       *       *       *       *       *

          (4)(A) Effective upon the entry into force of the 
        North American Free Trade Agreement, the exportation to 
        a NAFTA country, as defined in section 2(4) of the 
        North American Free Trade Agreement Implementation Act, 
        of merchandise that is fungible with and substituted 
        for imported merchandise, other than merchandise 
        described in paragraphs (1) through (8) of section 
        203(a) of that Act, shall not constitute an exportation 
        for purposes of paragraph (2).
          (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.

           *       *       *       *       *       *       *

    [(n)] (n) Refunds, Waivers, or Reductions Under Certain 
Free Trade Agreements.--(1) For purposes of this subsection and 
subsection (o)--
          (A) * * *
          (B) the terms ``NAFTA country'' and ``good subject to 
        NAFTA drawback'' have the same respective meanings that 
        are given such terms in sections 2(4) and 203(a) of the 
        NAFTA Act; [and]
          (C) a refund, waiver, or reduction of duty under 
        paragraph (2) of this subsection or paragraph (1) of 
        subsection (o) is subject to section 508(b)(2)(B)[.]; 
        and
          (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.

           *       *       *       *       *       *       *

    (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.
    [(o)] (o) Special Rules for Certain Vessels and Imported 
Materials.--(1) For purposes of subsection (g), if--
          (A) * * *

           *       *       *       *       *       *       *

    (3) For purposes of subsection (g), if--
          (A) a vessel is built for the account and ownership 
        of a resident of Chile or the Government of Chile, and
          (B) imported materials that are used in the 
        construction and equipment of the vessel are goods 
        subject to Chile FTA drawback, as defined in section 
        203(a) of the United States-Chile Free Trade Agreement 
        Implementation Act,
no customs duties on such materials may be refunded, waived, or 
reduced, except as provided in paragraph (4).
    (4) The customs duties referred to in paragraph (3) may be 
refunded, waived or reduced by--
          (A) 100 percent during the 8-year period beginning on 
        January 1, 2004;
          (B) 75 percent during the 1-year period beginning on 
        January 1, 2012;
          (C) 50 percent during the 1-year period beginning on 
        January 1, 2013; and
          (D) 25 percent during the 1-year period beginning on 
        January 1, 2014.

           *       *       *       *       *       *       *


SEC. 508. RECORDKEEPING.

    (a) * * *
    (b) [Exportations to Free Trade Countries.--] Exportations 
to NAFTA Countries.--
          (1) * * *
          (2) Exports to nafta countries.--
          (A) * * *
                  (B) Claims for certain waivers, reductions, 
                or refunds of duties or for credit against 
                bonds.--
                          (i) In general.--Any person that 
                        claims with respect to an article--
                                  (I) a waiver or reduction of 
                                duty under [the last paragraph 
                                of section 311] the eleventh 
                                paragraph of section 311, 
                                section 312(b)(1) or (4), 
                                section 562(2), or [the last 
                                proviso to section 3(a)] the 
                                proviso preceding the last 
                                proviso to section 3(a) of the 
                                Foreign Trade Zones Act;

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 514. PROTEST AGAINST DECISIONS OF THE CUSTOMS SERVICE.

    (a) * * *

           *       *       *       *       *       *       *

    (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. 520. REFUNDS AND ERRORS.

    (a) * * *

           *       *       *       *       *       *       *

    [(d)] (d) Goods Qualifying Under Free Trade Agreement Rules 
of Origin.--Notwithstanding the fact that a valid protest was 
not filed, the Customs Service may, in accordance with 
regulations prescribed by the Secretary, reliquidate an entry 
to refund any excess duties (including any merchandise 
processing fees) paid on a good qualifying under the rules of 
origin set out in section 202 of the North American Free Trade 
Agreement Implementation Act or section 202 of the United 
States-Chile Free Trade Agreement Implementation Act for which 
no claim for preferential tariff treatment was made at the time 
of importation if the importer, within 1 year after the date of 
importation, files, in accordance with those regulations, a 
claim that includes--
          (1) a written declaration that the good qualified 
        under [those] the applicable rules at the time of 
        importation;
          (2) copies of all applicable NAFTA Certificates of 
        Origin (as defined in section 508(b)(1)), or other 
        certificates of origin, as the case may be; and

           *       *       *       *       *       *       *


SEC. 562. MANIPULATION IN WAREHOUSE.

    Unless by special authority of the Secretary of the 
Treasury, no merchandise shall be withdrawn from bonded 
warehouse in lessquantity than an entire bale, cask, box, or 
other package; or, if in bulk, in the entire quantity imported or in a 
quantity not less than one ton weight. All merchandise so withdrawn 
shall be withdrawn in the original packages in which imported unless, 
upon the application of the importer, it appears to the appropriate 
customs officer that it is necessary to the safety or preservation of 
the merchandise to repack or transfer the same; except that upon 
permission therefor being granted by the Secretary of the Treasury, and 
under customs supervision, at the expense of the proprietor, 
merchandise may be cleaned, sorted, repacked, or otherwise changed in 
condition, but not manufactured, in bonded warehouses established for 
that purpose and be withdrawn therefrom--
          (1) * * *

           *       *       *       *       *       *       *

          (3) without payment of duties for exportation to any 
        foreign country other than [to a NAFTA country] to 
        Chile, to a NAFTA country, or to Canada when exports to 
        that country are subject to paragraph (4);
          (4) without payment of duties for exportation to 
        Canada (if that country ceases to be a NAFTA country 
        and the suspension of the operation of the United 
        States-Canada Free-Trade Agreement thereafter 
        terminates), but the exemption from the payment of 
        duties under this paragraph applies only in the case of 
        an exportation during the period such Agreement is in 
        operation of merchandise that--
                  (A) * * *
                  (B) is a drawback eligible good under section 
                204(a) of the United States-Canada Free-Trade 
                Agreement Implementation Act of 1988[; and]
          (5) without payment of duties for shipment to the 
        Virgin Islands, American Samoa, Wake Island, Midway 
        Island, Kingman Reef, Johnston Island or the island of 
        Guam[.]; and
          (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.

           *       *       *       *       *       *       *


SEC. 592. PENALTIES FOR FRAUD, GROSS NEGLIGENCE, AND NEGLIGENCE.

    (a) * * *

           *       *       *       *       *       *       *

    (c) Maximum Penalties.--
          (1) * * *

           *       *       *       *       *       *       *

          (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.
          [(6)] (7) Seizure.--If the Secretary has reasonable 
        cause to believe that a person has violated the 
        provisions of subsection (a) and that such person is 
        insolvent or beyond the jurisdiction of the United 
        States or that seizure is otherwise essential to 
        protect the revenue of the United States or to prevent 
        the introduction of prohibited or restricted 
        merchandise into the customs territory of the United 
        States, then such merchandise may be seized and, upon 
        assessment of a monetary penalty, forfeited unless the 
        monetary penalty is paid within the time specified by 
        law. Within a reasonable time after any such seizure is 
        made, the Secretary shall issue to the person concerned 
        a written statement containing the reasons for the 
        seizure. After seizure of merchandise under this 
        subsection, the Secretary may, in the case of 
        restricted merchandise, and shall, in the case of any 
        other merchandise (other than prohibited merchandise), 
        return such merchandise upon the deposit of security 
        not to exceed the maximum monetary penalty which may be 
        assessed under subsection (c).

           *       *       *       *       *       *       *

    (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.

           *       *       *       *       *       *       *

                              ----------                              


                 SECTION 3 OF THE ACT OF JUNE 18, 1934

          (Commonly known as the ``Foreign Trade Zones Act'')

    Sec. 3. (a) Foreign and domestic merchandise of every 
description, except such as is prohibited by law, may, without 
being subject to the customs laws of the United States, except 
as otherwise provided in this Act, be brought into a zone and 
may be stored, sold, exhibited, broken up, repacked, assembled, 
distributed, sorted, graded, cleaned, mixed with foreign or 
domestic merchandise, or otherwise manipulated, or be 
manufactured except as otherwise provided in this Act, and be 
exported, destroyed, or sent into customs territory of the 
United States therefrom, in the original package or otherwise; 
but when foreign merchandise is so sent from a zone into 
customs territory of the United States it shall be subject to 
the laws and regulations of the United States affecting 
imported merchandise: Provided, That whenever the privilege 
shall be requested and there has been no manipulation or 
manufacture effecting a change in tariff classification, the 
appropriate customs officer shall take under supervision any 
lot or part of a lot of foreign merchandise in a zone, cause it 
to be appraised and taxes determined and duties liquidated 
thereon. Merchandise so taken under supervision may be stored, 
manipulated, or manufactured under the supervision and 
regulations prescribed by the Secretary of the Treasury, and 
whether mixed or manufactured with domestic merchandise or not 
may, under regulations prescribed by the Secretary of the 
Treasury, be exported or destroyed, or may be sent into customs 
territory upon the payment of such liquidated duties and 
determined taxes thereon. If merchandise so taken under 
supervision has been manipulated or manufactured, such duties 
and taxes shall be payable on the quantity of such foreign 
merchandise used in the manipulation or manufacture of the 
entered article. Allowance shall be made for recoverable and 
irrecoverable waste; and if recoverable waste is sent into 
customs territory, it shall be dutiable and taxable in its 
condition and quantity and at its weight at the time of entry. 
Where two or more products result from the manipulation or 
manufacture of merchandise in a zone the liquidated duties and 
determined taxes shall be distributed to the several products 
in accordance with their relative value at the time of 
separation with due allowance for waste as provided for above: 
Provided further, That subject to such regulations respecting 
identity and the safeguarding of the revenue as the Secretary 
of the Treasury may deem necessary, articles, the growth, 
product, or manufacture of the United States, on which all 
internal-revenue taxes have been paid, if subject thereto, and 
articles previously imported on which duty and/or tax has been 
paid, or which have been admitted free of duty and tax, may be 
taken into a zone from the customs territory of the United 
States, placed under the supervision of the appropriate customs 
officer, and whether or not they have been combined with or 
made part, while in such zone, of other articles, may be 
brought back thereto free of quotas, duty, or tax: Provided 
further, That if in the opinion of the Secretary of the 
Treasury their identity has been lost, such articles not 
entitled to free entry by reason of noncompliance with the 
requirements made hereunder by the Secretary of the Treasury 
shall be treated when they reenter customs territory of the 
United States as foreign merchandise under the provisions of 
the tariff and internal-revenue laws in force at that time: 
Provided further, That under the rules and regulations of the 
controlling Federal agencies, articles which have been taken 
into a zone from customs territory for the sole purpose of 
exportation, destruction (except destruction of distilled 
spirits, wines, and fermented malt liquors), or storage shall 
be considered to be exported for the purpose of--
          (1) * * *

           *       *       *       *       *       *       *

    Such a transfer may also be considered an exportation for 
the purposes of other Federal laws insofar as Federal agencies 
charged with the enforcement of those laws deem it advisable. 
Such articles may not be returned to customs territory for 
domestic consumption except where the Foreign-Trade Zones Board 
deems such return to be in the public interest, in which event 
the articles shall be subject to the provisions of paragraph 
1615(f) of the Tariff Act of 1930, as amended: Provided 
further, That no operation involving any foreign or domestic 
merchandise brought into a zone which operation would be 
subject to any provision or provisions of section 1807, chapter 
15, chapter 16, chapter 17, chapter 21, chapter 23, chapter 24, 
chapter 25, chapter 26, or chapter 32 of the Internal Revenue 
Code if performed in customs territory, or involving the 
manufacture of any article provided for in paragraph 367 or 
paragraph 368 of the Tariff Act of 1930, shall be permitted in 
a zone except those operations (other than rectification of 
distilled spirits and wines, or the manufacture or production 
of alcoholic products unfit for beverage purposes) which were 
permissible under this Act prior to July 1, 1949: Provided 
further, That articles produced or manufactured in a zone and 
exported therefrom shall on subsequent importation into the 
customs territory of the United States be subject to the import 
laws applicable to like articles manufactured in a foreign 
country, except that articles produced or manufactured in a 
zone exclusively with the use of domestic merchandise, the 
identity of which has been maintained in accordance with the 
second proviso of this section, may, on such importation, be 
entered as American goods returned: Provided further, That no 
merchandise that consists of goods subject to NAFTA drawback, 
as defined in section 203(a) of the North American Free Trade 
Agreement Implementation Act, that is manufactured or otherwise 
changed in condition shall be exported to a NAFTA country, as 
defined in section 2(4) of that Act, 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 
upon the presentation, before such 61st day, of satisfactory 
evidence of the amount of any customs duties paid or owed to 
the NAFTA country on the article, the customs duty may be 
waived or reduced (subject to section 508(b)(2)(B) of the 
Tariff Act of 1930) in an amount that does not exceed the 
lesser of (1) the total amount of customs duties paid or owed 
on the merchandise on importation into the United States, or 
(2) the total amount of customs duties paid on the article to 
the NAFTA country: Provided further, That if Canada ceases to 
be a NAFTA country and the suspension of the operation of the 
United States-Canada Free-Trade Agreement thereafter 
terminates, with the exception of drawback eligible goods under 
section 204(a) of the United States-Canada Free-Trade Agreement 
Implementation Act of 1988, no article manufactured or 
otherwise changed in condition (except a change by cleaning, 
testing or repacking) shall be exported to Canada during the 
period such Agreement is in operation without the payment of a 
duty that shall be payable on the article in its condition and 
quantity, and at its weight, at the time of its exportation to 
Canada unless the privilege in the first proviso to this 
subsection was requested[.]: 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.

           *       *       *       *       *       *       *

                              ----------                              


SECTION 13031 OF THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 
                                  1985

SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.

    (a) * * *
    (b) Limitations on Fees.--(1) * * *

           *       *       *       *       *       *       *

    (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.

           *       *       *       *       *       *       *

                              ----------                              


                  SECTION 202 OF THE TRADE ACT OF 1974

SEC. 202. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY 
                    COMMISSION.

    (a) Petitions and Adjustment Plans.--
          (1) * * *

           *       *       *       *       *       *       *

          (8) The procedures concerning the release of 
        confidential business information set forth in section 
        332(g) of the Tariff Act of 1930 shall apply with 
        respect to information received by the Commission in 
        the course of investigations conducted under this 
        chapter, part 1 of title III of the North American Free 
        Trade Agreement Implementation Act, [and] title II of 
        the United States-Jordan Free Trade Area Implementation 
        Act, and title III of the United States-Chile Free 
        Trade Agreement Implementation Act. The Commission may 
        request that parties providing confidential business 
        information furnish nonconfidential summaries thereof 
        or, if such parties indicate that the information in 
        the submission cannot be summarized, the reasons why a 
        summary cannot be provided. If the Commission finds 
        that a request for confidentiality is not warranted and 
        if the party concerned is either unwilling to make the 
        information public or to authorize its disclosure in 
        generalized or summarized form, the Commission may 
        disregard the submission.

           *       *       *       *       *       *       *

                              ----------                              


IMMIGRATION AND NATIONALITY ACT

           *       *       *       *       *       *       *


                            TITLE I--GENERAL


                              definitions

    Section 101. (a) As used in this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (15) The term ``immigrant'' means every alien except 
        an alien who is within one of the following classes of 
        nonimmigrant aliens--
                  (A) * * *

           *       *       *       *       *       *       *

                  (H) an alien (i)(b) subject to section 
                212(j)(2), who is coming temporarily to the 
                United States to perform services (other than 
                services described in subclause (a) during the 
                period in which such subclause applies and 
                other than services described in subclause 
                (ii)(a) or in subparagraph (O) or (P)) in a 
                specialty occupation described in section 
                214(i)(1) or as a fashion model, who meets the 
                requirements for the occupation specified in 
                section 214(i)(2) or, in the case of a fashion 
                model, is of distinguished merit and ability, 
                and with respect to whom the Secretary of Labor 
                determines and certifies to the Attorney 
                General that the intending employer has filed 
                with the Secretary an application under section 
                [212(n)(1), or (c)] 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) who 
                is coming temporarily to the United States to 
                perform services as a registered nurse, who 
                meets the qualifications described in section 
                212(m)(1), and with respect to whom the 
                Secretary of Labor determines and certifies to 
                the Attorney General that an unexpired 
                attestation is on file and in effect under 
                section 212(m)(2) for the facility (as defined 
                in section 212(m)(6)) for which the alien will 
                perform the services; or (ii)(a) having a 
                residence in a foreign country which he has no 
                intention of abandoning who is coming 
                temporarily to the United States to perform 
                agricultural labor or services, as defined by 
                the Secretary of Labor in regulations and 
                including agricultural labor defined in section 
                3121(g) of the Internal Revenue Code of 1954 
                and agriculture as defined in section 3(f) of 
                the Fair Labor Standards Act of 1938 (29 U.S.C. 
                203(f)), of a temporary or seasonal nature, or 
                (b) having a residence in a foreign country 
                which he has no intention of abandoning who is 
                coming temporarily to the United States to 
                perform other temporary service or labor if 
                unemployed persons capable of performing such 
                service or labor cannot be found in this 
                country, but this clause shall not apply to 
                graduates of medical schools coming to the 
                United States to perform services as members of 
                the medical profession; or (iii) having a 
                residence in a foreign country which he has no 
                intention of abandoning who is coming 
                temporarily to the United States as a trainee, 
                other than to receive graduate medical 
                education or training, in a training program 
                that is not designed primarily to provide 
                productive employment; and the alien spouse and 
                minor children of any such alien specified in 
                this paragraph if accompanying him or following 
                to join him;

           *       *       *       *       *       *       *


TITLE II--IMMIGRATION

           *       *       *       *       *       *       *



 Chapter 2--Qualifications for Admission of Aliens; Travel Control of 
Citizens and Aliens

           *       *       *       *       *       *       *



 GENERAL CLASSES OF ALIENS INELIGIBLE TO RECEIVE VISAS AND INELIGIBLE 
               FOR ADMISSION; WAIVERS OF INADMISSIBILITY

  Sec. 212. (a) * * *

           *       *       *       *       *       *       *

    (p)(1) In computing the prevailing wage level for an 
occupational classification in an area of employment for 
purposes of subsections [(n)(1)(A)(i)(II) and (a)(5)(A)] 
(a)(5)(A), (n)(1)(A)(i)(II), and (t)(1)(A)(i)(II) in the case 
of an employee of--
          (A) * * *

           *       *       *       *       *       *       *

    [(p)] (s) In determining whether an alien described in 
subsection (a)(4)(C)(i) is inadmissible under subsection (a)(4) 
or ineligible to receive an immigrant visa or otherwise to 
adjust to the status of permanent resident by reason of 
subsection (a)(4), the consular officer or the Attorney General 
shall not consider any benefits the alien may have received 
that were authorized under section 501 of the Illegal 
Immigration Reform and Immigrant Responsibility Act of 1996 (8 
U.S.C. 1641(c)).
    (t)(1) No alien may be admitted or provided status as a 
nonimmigrant under section 101(a)(15)(H)(i)(b1) in an 
occupational classification unless the employer has filed with 
the Secretary of Labor an attestation stating the following:
          (A) The employer--
                  (i) is offering and will offer during the 
                period of authorized employment to aliens 
                admitted or provided status under section 
                101(a)(15)(H)(i)(b1) wages that are at least--
                          (I) the actual wage level paid by the 
                        employer to all other individuals with 
                        similar experience and qualifications 
                        for the specific employment in 
                        question; or
                          (II) the prevailing wage level for 
                        the occupational classification in the 
                        area of employment,
    whichever is greater, based on the best information 
available as of the time of filing the attestation; and
                  (ii) will provide working conditions for such 
                a nonimmigrant that will not adversely affect 
                the working conditions of workers similarly 
                employed.
          (B) There is not a strike or lockout in the course of 
        a labor dispute in the occupational classification at 
        the place of employment.
          (C) The employer, at the time of filing the 
        attestation--
                  (i) has provided notice of the filing under 
                this paragraph to the bargaining representative 
                (if any) of the employer's employees in the 
                occupational classification and area for which 
                aliens are sought; or
                  (ii) if there is no such bargaining 
                representative, has provided notice of filing 
                in the occupational classification through such 
                methods as physical posting in conspicuous 
                locations at the place of employment or 
                electronic notification to employees in the 
                occupational classification for which 
                nonimmigrants under section 
                101(a)(15)(H)(i)(b1) are sought.
          (D) A specification of the number of workers sought, 
        the occupational classification in which the workers 
        will be employed, and wage rate and conditions under 
        which they will be employed.
  (2)(A) The employer shall make available for public 
examination, within one working day after the date on which an 
attestation under this subsection is filed, at the employer's 
principal place of business or worksite, a copy of each such 
attestation (and such accompanying documents as are necessary).
  (B)(i) The Secretary of Labor shall compile, on a current 
basis, a list (by employer and by occupational classification) 
of the attestations filed under this subsection. Such list 
shall include, with respect to each attestation, the wage rate, 
number of aliens sought, period of intended employment, and 
date of need.
  (ii) The Secretary of Labor shall make such list available 
for public examination in Washington, D.C.
  (C) The Secretary of Labor shall review an attestation filed 
under this subsection only for completeness and obvious 
inaccuracies. Unless the Secretary of Labor finds that an 
attestation is incomplete or obviously inaccurate, the 
Secretary of Labor shall provide the certification described in 
section 101(a)(15)(H)(i)(b1) within 7 days of the date of the 
filing of the attestation.
  (3)(A) The Secretary of Labor shall establish a process for 
the receipt, investigation, and disposition of complaints 
respecting the failure of an employer to meet a condition 
specified in an attestation submitted under this subsection or 
misrepresentation by the employer of material facts in such an 
attestation. Complaints may be filed by any aggrieved person or 
organization (including bargaining representatives). No 
investigation or hearing shall be conducted on a complaint 
concerning such a failure or misrepresentation unless the 
complaint was filed not later than 12 months after the date of 
the failure or misrepresentation, respectively. The Secretary 
of Labor shall conduct an investigation under this paragraph if 
there is reasonable cause to believe that such a failure or 
misrepresentation has occurred.
  (B) Under the process described in subparagraph (A), the 
Secretary of Labor shall provide, within 30 days after the date 
a complaint is filed, for a determination as to whether or not 
a reasonable basis exists to make a finding described in 
subparagraph (C). If the Secretary of Labor determines that 
such a reasonable basis exists, the Secretary of Labor shall 
provide for notice of such determination to the interested 
parties and an opportunity for a hearing on the complaint, in 
accordance with section 556 of title 5, United States Code, 
within 60 days after the date of the determination. If such a 
hearing is requested, the Secretary of Labor shall make a 
finding concerning the matter by not later than 60 days after 
the date of the hearing. In the case of similar complaints 
respecting the same applicant, the Secretary of Labor may 
consolidate the hearings under this subparagraph on such 
complaints.
  (C)(i) If the Secretary of Labor finds, after notice and 
opportunity for a hearing, a failure to meet a condition of 
paragraph (1)(B), a substantial failure to meet a condition of 
paragraph (1)(C) or (1)(D), or a misrepresentation of material 
fact in an attestation--
          (I) the Secretary of Labor shall notify the Secretary 
        of State and the Secretary of Homeland Security of such 
        finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed $1,000 per 
        violation) as the Secretary of Labor determines to be 
        appropriate; and
          (II) the Secretary of State or the Secretary of 
        Homeland Security, as appropriate, shall not approve 
        petitions or applications filed with respect to that 
        employer under section 204, 214(c), or 
        101(a)(15)(H)(i)(b1) during a period of at least 1 year 
        for aliens to be employed by the employer.
  (ii) If the Secretary of Labor finds, after notice and 
opportunity for a hearing, a willful failure to meet a 
condition of paragraph (1), a willful misrepresentation of 
material fact in an attestation, or a violation of clause 
(iv)--
          (I) the Secretary of Labor shall notify the Secretary 
        of State and the Secretary of Homeland Security of such 
        finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed $5,000 per 
        violation) as the Secretary of Labor determines to be 
        appropriate; and
          (II) the Secretary of State or the Secretary of 
        Homeland Security, as appropriate, shall not approve 
        petitions or applications filed with respect to that 
        employer under section 204, 214(c), or 
        101(a)(15)(H)(i)(b1) during a period of at least 2 
        years for aliens to be employed by the employer.
  (iii) If the Secretary of Labor finds, after notice and 
opportunity for a hearing, a willful failure to meet a 
condition of paragraph (1) or a willful misrepresentation of 
material fact in an attestation, in the course of which failure 
or misrepresentation the employer displaced a United States 
worker employed by the employer within the period beginning 90 
days before and ending 90 days after the date of filing of any 
visa petition or application supported by the attestation--
          (I) the Secretary of Labor shall notify the Secretary 
        of State and the Secretary of Homeland Security of such 
        finding and may, in addition, impose such other 
        administrative remedies (including civil monetary 
        penalties in an amount not to exceed $35,000 per 
        violation) as the Secretary of Labor determines to be 
        appropriate; and
          (II) the Secretary of State or the Secretary of 
        Homeland Security, as appropriate, shall not approve 
        petitions or applications filed with respect to that 
        employer under section 204, 214(c), or 
        101(a)(15)(H)(i)(b1) during a period of at least 3 
        years for aliens to be employed by the employer.
  (iv) It is a violation of this clause for an employer who has 
filed an attestation under this subsection to intimidate, 
threaten, restrain, coerce, blacklist, discharge, or in any 
other manner discriminate against an employee (which term, for 
purposes of this clause, includes a former employee and an 
applicant for employment) because the employee has disclosed 
information to the employer, or to any other person, that the 
employee reasonably believes evidences a violation of this 
subsection, or any rule or regulation pertaining to this 
subsection, or because the employee cooperates or seeks to 
cooperate in an investigation or other proceeding concerning 
the employer's compliance with the requirements of this 
subsection or any rule or regulation pertaining to this 
subsection.
  (v) The Secretary of Labor and the Secretary of Homeland 
Security shall devise a process under which a nonimmigrant 
under section 101(a)(15)(H)(i)(b1) who files a complaint 
regarding a violation of clause (iv) and is otherwise eligible 
to remain and work in the United States may be allowed to seek 
other appropriate employment in the United States for a period 
not to exceed the maximum period of stay authorized for such 
nonimmigrant classification.
  (vi)(I) It is a violation of this clause for an employer who 
has filed an attestation under this subsection to require a 
nonimmigrant under section 101(a)(15)(H)(i)(b1) to pay a 
penalty for ceasing employment with the employer prior to a 
date agreed to by the nonimmigrant and the employer. The 
Secretary of Labor shall determine whether a required payment 
is a penalty (and not liquidated damages) pursuant to relevant 
State law.
  (II) If the Secretary of Labor finds, after notice and 
opportunity for a hearing, that an employer has committed a 
violation of this clause, the Secretary of Labor may impose a 
civil monetary penalty of $1,000 for each such violation and 
issue an administrative order requiring the return to the 
nonimmigrant of any amount paid in violation of this clause, 
or, if the nonimmigrant cannot be located, requiring payment of 
any such amount to the general fund of the Treasury.
  (vii)(I) It is a failure to meet a condition of paragraph 
(1)(A) for an employer who has filed an attestation under this 
subsection and who places a nonimmigrant under section 
101(a)(15)(H)(i)(b1) designated as a full-time employee in the 
attestation, after the nonimmigrant has entered into employment 
with the employer, in nonproductive status due to a decision by 
the employer (based on factors such as lack of work), or due to 
the nonimmigrant's lack of a permit or license, to fail to pay 
the nonimmigrant full-time wages in accordance with paragraph 
(1)(A) for all such nonproductive time.
  (II) It is a failure to meet a condition of paragraph (1)(A) 
for an employer who has filed an attestation under this 
subsection and who places a nonimmigrant under section 
101(a)(15)(H)(i)(b1) designated as a part-time employee in the 
attestation, after the nonimmigrant has entered into employment 
with the employer, in nonproductive status under circumstances 
described in subclause (I), to fail to pay such a nonimmigrant 
for such hours as are designated on the attestation consistent 
with the rate of pay identified on the attestation.
  (III) In the case of a nonimmigrant under section 
101(a)(15)(H)(i)(b1) who has not yet entered into employment 
with an employer who has had approved an attestation under this 
subsection with respect to the nonimmigrant, the provisions of 
subclauses (I) and (II) shall apply to the employer beginning 
30 days after the date the nonimmigrant first is admitted into 
the United States, or 60 days after the date the nonimmigrant 
becomes eligible to work for the employer in the case of a 
nonimmigrant who is present in the United States on the date of 
the approval of the attestation filed with the Secretary of 
Labor.
  (IV) This clause does not apply to a failure to pay wages to 
a nonimmigrant under section 101(a)(15)(H)(i)(b1) for 
nonproductive time due to non-work-related factors, such as the 
voluntary request of the nonimmigrant for an absence or 
circumstances rendering the nonimmigrant unable to work.
  (V) This clause shall not be construed as prohibiting an 
employer that is a school or other educational institution from 
applying to a nonimmigrant under section 101(a)(15)(H)(i)(b1) 
an established salary practice of the employer, under which the 
employer pays to nonimmigrants under section 
101(a)(15)(H)(i)(b1) and United States workers in the same 
occupational classification an annual salary in disbursements 
over fewer than 12 months, if--
          (aa) the nonimmigrant agrees to the compressed annual 
        salary payments prior to the commencement of the 
        employment; and
          (bb) the application of the salary practice to the 
        nonimmigrant does not otherwise cause the nonimmigrant 
        to violate any condition of the nonimmigrant's 
        authorization under this Act to remain in the United 
        States.
  (VI) This clause shall not be construed as superseding clause 
(viii).
  (viii) It is a failure to meet a condition of paragraph 
(1)(A) for an employer who has filed an attestation under this 
subsection to fail to offer to a nonimmigrant under section 
101(a)(15)(H)(i)(b1), during the nonimmigrant's period of 
authorized employment, benefits and eligibility for benefits 
(including the opportunity to participate in health, life, 
disability, and other insurance plans; the opportunity to 
participate in retirement and savings plans; and cash bonuses 
and non-cash compensation, such as stock options (whether or 
not based on performance)) on the same basis, and in accordance 
with the same criteria, as the employer offers to United States 
workers.
  (D) If the Secretary of Labor finds, after notice and 
opportunity for a hearing, that an employer has not paid wages 
at the wage level specified in the attestation and required 
under paragraph (1), the Secretary of Labor shall order the 
employer to provide for payment of such amounts of back pay as 
may be required to comply with the requirements of paragraph 
(1), whether or not a penalty under subparagraph (C) has been 
imposed.
    (E) The Secretary of Labor may, on a case-by-case basis, 
subject an employer to random investigations for a period of up 
to 5 years, beginning on the date on which the employer is 
found by the Secretary of Labor to have committed a willful 
failure to meet a condition of paragraph (1) or to have made a 
willful misrepresentation of material fact in an attestation. 
The authority of the Secretary of Labor under this subparagraph 
shall not be construed to be subject to, or limited by, the 
requirements of subparagraph (A).
    (F) Nothing in this subsection shall be construed as 
superseding or preempting any other enforcement-related 
authority under this Act (such as the authorities under section 
274B), or any other Act.
    (4) For purposes of this subsection:
          (A) The term ``area of employment'' means the area 
        within normal commuting distance of the worksite or 
        physical location where the work of the nonimmigrant 
        under section 101(a)(15)(H)(i)(b1) is or will be 
        performed. If such worksite or location is within a 
        Metropolitan Statistical Area, any place within such 
        area is deemed to be within the area of employment.
          (B) In the case of an attestation with respect to one 
        or more nonimmigrants under section 
        101(a)(15)(H)(i)(b1) by an employer, the employer is 
        considered to ``displace'' a United States worker from 
        a job if the employer lays off the worker from a job 
        that is essentially the equivalent of the job for which 
        the nonimmigrant or nonimmigrants is or are sought. A 
        job shall not be considered to be essentially 
        equivalent of another job unless it involves 
        essentially the same responsibilities, was held by a 
        United States worker with substantially equivalent 
        qualifications and experience, and is located in the 
        same area of employment as the other job.
          (C)(i) The term ``lays off'', with respect to a 
        worker--
                  (I) means to cause the worker's loss of 
                employment, other than through a discharge for 
                inadequate performance, violation of workplace 
                rules, cause, voluntary departure, voluntary 
                retirement, or the expiration of a grant or 
                contract; but
                  (II) does not include any situation in which 
                the worker is offered, as an alternative to 
                such loss of employment, a similar employment 
                opportunity with the same employer at 
                equivalent or higher compensation and benefits 
                than the position from which the employee was 
                discharged, regardless of whether or not the 
                employee accepts the offer.
          (ii) Nothing in this subparagraph is intended to 
        limit an employee's rights under a collective 
        bargaining agreement or other employment contract.
          (D) The term ``United States worker'' means an 
        employee who--
                  (i) is a citizen or national of the United 
                States; or
                  (ii) is an alien who is lawfully admitted for 
                permanent residence, is admitted as a refugee 
                under section 207 of this title, is granted 
                asylum under section 208, or is an immigrant 
                otherwise authorized, by this Act or by the 
                Secretary of Homeland Security, to be employed.

           *       *       *       *       *       *       *


                       admission of nonimmigrants

    Sec. 214. (a) * * *
    (b) Every alien [(other than a nonimmigrant described in 
subparagraph (H)(i), (L), or (V) of section 101(a)(15))] (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) shall be presumed to be an immigrant until he 
establishes to the satisfaction of the consular officer, at the 
time of application for a visa, and the immigration officers, 
at the time of application for admission, that he is entitled 
to a nonimmigrant status under section 101(a)(15). An alien who 
is an officer or employee of any foreign government or of any 
international organization entitled to enjoy privileges, 
exemptions, and immunities under the International 
Organizations Immunities Act, or an alien who is the attendant, 
servant, employee, or member of the immediate family of any 
such alien shall not be entitled to apply for or receive an 
immigrant visa, or to enter the United States as an immigrant 
unless he executes a written waiver in the same form and 
substance as is prescribed by section 247(b).
    (c)(1) The question of importing any alien as a 
nonimmigrant under [section 101(a)(15)(H), (L), (O), or (P)(i)] 
subparagraph (H), (L), (O), or (P)(i) of section 101(a)(15) 
(excluding nonimmigrants under section 101(a)(15)(H)(i)(b1)) in 
any specific case or specific cases shall be determined by the 
Attorney General, after consultation with appropriate agencies 
of the Government, upon petition of the importing employer. 
Such petition shall be made and approved before the visa is 
granted. The petition shall be in such form and contain such 
information as the Attorney General shall prescribe. The 
approval of such a petition shall not, of itself, be construed 
as establishing that the alien is a nonimmigrant. For purposes 
of this subsection with respect to nonimmigrants described in 
section 101(a)(15)(H)(ii)(a), the term ``appropriate agencies 
of Government'' means the Department of Labor and includes the 
Department of Agriculture. The provisions of section 218 shall 
apply to the question of importing any alien as a nonimmigrant 
under section 101(a)(15)(H)(ii)(a).

           *       *       *       *       *       *       *

    (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).

           *       *       *       *       *       *       *

  (g)(1) * * *

           *       *       *       *       *       *       *

    (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.
  (h) The fact that an alien is the beneficiary of an 
application for a preference status filed under section 204 or 
has otherwise sought permanent residence in the United States 
shall not constitute evidence of an intention to abandon a 
foreign residence for purposes of obtaining a visa as a 
nonimmigrant described in subparagraph [(H)(i)] (H)(i)(b) or 
(c), (L), or (V) of section 101(a)(15) or otherwise obtaining 
or maintaining the status of a nonimmigrant described in such 
subparagraph, if the alien had obtained a change of status 
under section 248 to a classification as such a nonimmigrant 
before the alien's most recent departure from the United 
States.
  (i)(1) [For purposes] Except as provided in paragraph (3), 
for purposes of section 101(a)(15)(H)(i)(b) and paragraph (2), 
the term ``specialty occupation'' means an occupation that 
requires--
        (A) * * *

           *       *       *       *       *       *       *

    (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.
    (j)(1) Notwithstanding any other provision of this Act, an 
alien who is a citizen of Canada or Mexico who seeks to enter 
the United States under and pursuant to the provisions of 
Section B, Section C, or Section D of Annex 1603 of the North 
American Free Trade Agreement, shall not be classified as a 
nonimmigrant under such provisions if there is in progress a 
strike or lockout in the course of 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 Attorney General, that the 
alien's entry will not affect adversely the settlement of the 
strike or lockout or the employment of any person who is 
involved in the strike or lockout. Notice of a determination 
under this [subsection] paragraph shall be given as may be 
required by paragraph 3 of article 1603 of such Agreement. For 
purposes of this [subsection] paragraph, the term ``citizen of 
Mexico'' means ``citizen'' as defined in Annex 1608 of such 
Agreement.
    (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.

           *       *       *       *       *       *       *


Chapter 9--Miscellaneous

           *       *       *       *       *       *       *


   disposition of moneys collected under the provisions of this title

    Sec. 286. (a) * * *

           *       *       *       *       *       *       *

    (s) H-1B Nonimmigrant Petitioner Account.--
          (1) In general.--There is established in the general 
        fund of the Treasury a separate account, which shall be 
        known as the ``H-1B Nonimmigrant Petitioner Account''. 
        Notwithstanding any other section of this title, there 
        shall be deposited as offsetting receipts into the 
        account all fees collected under [section 214(c)(9).] 
        paragraphs (9) and (11) of section 214(c).

           *       *       *       *       *       *       *


                     VII. EXECUTIVE CORRESPONDENCE

                 Executive Office of the President,
                    The United States Trade Representative,
                                     Washington, DC, July 18, 2003.
Hon. William M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC
    Dear Mr. Chairman: I appreciate your leadership in moving 
through the Ways and Means Committee legislation to implement 
the United States-Singapore and United States-Chile free trade 
agreements.
    Because we have received inquiries about how the tariff 
suspension provisions of the agreements would operate, I 
thought it would be useful to provide the relevant text for the 
enforcement of dispute settlement panel reports. The following 
provisions are set out in articles 20.5-7 of the U.S.-Singapore 
Free Trade Agreement (FTA) and articles 22.14-16 of the U.S.-
Chile FTA.

Commercial disputes

    If, in its final report, the panel determines that a Party 
has not conformed with its obligation under this Agreement or 
that a Party's measure is causing nullification or impairment * 
* *, the resolution, whenever possible, shall be eliminate the 
non-conformity or the nullification or impairment * * * If * * 
* the Parties are unable to reach agreement on a resolution, * 
* * the Party complained against shall enter into negotiations 
with the other Party with a view to developing mutually 
acceptable compensation.
    If the Parties * * * are unable to agree on compensation 
within 30 days after the period for developing such 
compensation has begun; or * * * have agreed on compensation or 
on a resolution * * * and the complaining Party consider that 
the other Party has failed to observe the terms of such 
agreement, the complaining Party may at any time thereafter 
provide written notice * * * that it intends to suspend the 
application to the other Party of benefits of equivalent effect 
* * *.
    If the Party complained against considers that * * * the 
level of benefits [that the other Party has] proposed to be 
suspended is manifestly excessive; or * * * [that the defending 
party] has eliminated the non-conformity or the nullification 
or impairment that the panel has found, it may * * * request 
that the panel be reconvened to consider the matter * * * If 
the panel determines that the level of benefits proposed to be 
suspended is manifestly excessive, it shall determine the level 
of benefits is considers to be of equivalent effect.
    The complaining Party may suspend benefits up to the level 
the panel has determined of, if the panel has not determined 
the level, the level the Party has proposed to suspend * * * 
unless the panel has determined that the Party complained 
against has eliminated the non-conformity or the nullification 
or impairment.
    The complaining Party may not suspend benefits if, within 
30 days after is provides written notice of intent to suspend 
benefits or * * * the Party complained against provides written 
notice * * * that it pay an annual monetary assessment. The 
Parties shall consult * * * with a view to reaching agreement 
on the amount of the assessment. If the Parties are unable to 
reach an agreement within 30 days after consultations begin, 
the amount of the assessment shall be set at a level, in U.S. 
dollars, equal to 50 percent of the level of the benefits the 
panel has determined * * * to be of equivalent effect of, if 
the panel has not determined the level, 50 percent of the level 
of that the complaining Party has proposed to suspend * * *.
    If the Party complained against fails to pay a monetary 
assessment, the complaining Party may suspend the application 
to the Party complained against of benefits [under the 
Agreement].

Labor and environment disputes

    If, in its final report, a panel determines that a party 
has not conformed with its [labor or environment] obligations * 
* * and the Parties * * * are unable to reach agreement on a 
resolution * * *; or have agreed on a resolution * * * and the 
complaining Party considers that the other Party has failed to 
observe the terms of the agreement, the complaining Party may 
at any time thereafter request that the panel be reconvened to 
impose an annual monetary assessment on the other Party * * *.
    The panel shall determine the amount of the monetary 
assessment in U.S. dollars * * * In determining the amount of 
the assessment, the panel shall take into account [various 
factors set forth in the agreement.]
    The amount of the assessment shall not exceed 15 million 
U.S. dollars annually * * *. Assessments shall be * * * 
expended * * * for appropriate labor or environmental 
initiatives, including efforts to improve or enhance labor or 
environmental law enforcement, as the case may be, in the 
territory of the Party complained against, consistent with its 
law.
    If the Party complained against fails to pay a monetary 
assessment, [or, under the U.S.-Singapore FTA, does not make 
funds available through an escrow account] the complaining 
Party may take other appropriate steps to collect the 
assessment or otherwise secure compliance. These steps may 
include suspending tariff benefits under the Agreement as 
necessary to collect the assessment, while bearing in mind the 
Agreement's objective of eliminating barriers to bilateral 
trade and while seeking to avoid unduly affecting parties or 
interests not party to the dispute.
    Against, thank your for your efforts to securing passage of 
this important legislation.
            Sincerely,
                                                Robert B. Zoellick.

                              VIII. VIEWS

                            DISSENTING VIEWS

    If these two trade agreements were truly going to benefit 
U.S. workers, as the Administration claims, then we would have 
no reservations and would gladly support both agreements today. 
However, the lack of strong labor enforcement language, the 
addition of a new permanent work visa program, and the use of 
these agreements as a template for future trade agreements is 
sufficient reason to oppose both agreements and the 
implementing legislation.
    Our nation's unemployment rate reached 6.4 percent in 
June--the highest rate in more than nine years, causing a loss 
of more than one million jobs in the last three months alone. 
The Bush Administration's solution is to pursue trade 
agreements that depart from the standard set by the U.S.-Jordan 
Free Trade Agreement and return to the failed North American 
Free Trade Agreement (NAFTA) model. As of September 2000, the 
U.S. lost over half a million jobs due to NAFTA. Over three-
quarters of the jobs lost due to NAFTA have been in the 
manufacturing sector. These are good paying U.S. jobs that have 
been shipped overseas. But rather than take the successes of 
the U.S.-Jordan FTA which was heralded by the Clinton 
Administration, labor and environment organizations, as the new 
model for trade agreements, the Bush Administration is taking 
us down the path of further job losses.
    Neither trade agreement includes the International Labour 
Organization's (ILO) five core labor standards. While both 
countries claim to uphold the ILO's core labor standards, there 
is nothing in the agreements that require either country to do 
so. If these countries are truly committed to the five core 
labor standards then there is no reason to exclude binding 
agreement language that would have committed these countries to 
adhering to them. It is time to make labor standards as serious 
an issue in trade agreements as the commercial provisions--
especially when the involved parties claim to uphold ILO's 
policies anyway.
    Furthermore, these agreements fail to provide the same 
enforcement mechanisms for labor and environmental violations 
as the agreements provide for commercial violations. Once 
again, the Administration chooses to relegate labor and 
environment to a substandard class. Under the Chile and 
Singapore agreements, once a determination that a labor 
violation has been made the first course of action is a fine, 
which is capped at $15 million annually. This is a mere slap on 
the wrist for a country that could be found in serious 
violation of the labor provisions. The negotiated course of 
enforcement pales in comparison to the sanctions that are 
available for commercial violations.
    In addition to the failures of the labor provisions in both 
trade agreements, both agreements set up a new immigration visa 
program. This sets a dangerous precedent by including U.S. 
immigration law in trade agreements. Nor was this provision 
authorized in the Fast Tract negotiating language that narrowly 
passed the House of Representatives. House Judiciary members of 
both the majority and minority have expressed serious 
reservations about including U.S. immigration law in trade 
agreements, and usurping Congress's constitutional authority. 
The current H1-B visa program is a 3-year temporary work visa, 
which may be renewed one time. The new visa program negotiated 
in these trade agreements will allow an indefinite renewal of 
5,800 nationals from Singapore and Chile. This means that we 
are earmarking ten percent of the current H1-B visa program to 
nationals from these small countries in these small agreements.
    Another serious concern we have is the fact that the 
implementing language contradicts the trade agreement language 
with respect to the new visa program. It is doublespeak. The 
implementing language attempts to address the concern of 
allowing new immigrant workers only upon certifying that U.S. 
workers won't be displaced; the negotiated trade agreements 
prohibit such certification as a condition of entry. As the 
U.S. experienced with NAFTA, it is the trade agreement, and not 
the domestic statute that takes precedent under global trade 
rules.
    Finally, these two agreements should not be used as a model 
for future trade agreements. A vote in support of the 
agreements signals to the Administration that the model used 
for Chile and Singapore is acceptable, when it is far from 
acceptable. We oppose both agreements, the implementing 
legislation and urge the Administration to avoid using the 
flawed Chile and Singapore model for future trade agreements.

                                   Pete Stark.
                                   Stephanie Tubbs Jones.
                                   Jerry Kleczka.
                                   Michael R. McNulty.
                                   John Lewis.

                            ADDITIONAL VIEWS

The U.S.-Chile Free Trade Agreement
    The U.S.-Chile Free Trade Agreement (FTA) includes strong 
and comprehensive commitments by Chile to open its goods, 
agricultural and services markets to U.S. producers. The 
agreement includes commitments that will increase regulatory 
transparency and act to the benefit of U.S. workers, investors, 
intellectual property holders, businesses and consumers.
    At the same time, the economic impact of the Chile 
agreement is likely to be minuscule. The U.S. International 
Trade Commission estimates that the Chile FTA will account for 
just five one hundredths of one percent of U.S. gross domestic 
product (GDP).
    While some of the provisions in the FTA could serve as a 
model for other agreements, a number of provisions clearly 
cannot. In some instances, this is because the provision, while 
workable in the Chile context, is not appropriate for FTAs with 
other countries, where very different circumstances prevail. In 
other cases, it is because the policy being pursued by the 
Administration is just plain wrong.
    In fact, one of the concerns raised in the consideration of 
both the Chile and Singapore FTAs has been that the 
Administration is beginning to use some of their provisions as 
models for other FTAs, for example the Central America Free 
Trade Agreement (CAFTA), where the conditions make it 
inappropriate to do so.
    We cannot change in the implementing bill major provisions 
in the basic agreements specifically negotiated between the 
parties. Unfortunately, the provisions relating to core labor 
and environmental standards and investment issues, raise 
serious concerns. For example, there are separate dispute 
settlement rules that place arbitrary caps on the 
enforceability of those 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.
    That is doubly true of any attempt to use as a model for 
other FTAs the ``enforce your own law'' standard used in Chile 
and Singapore. The laws of Chile and Singapore essentially 
reflect core internationally recognized labor rights and these 
countries' have a history of enforcing their laws. How they are 
applied does vary in the two countries, reflecting the 
different characteristics of the two nations. At the same time, 
there is little practical concern that these countries will 
backtrack.
    Chile is very different from many other FTA negotiating 
partners, including most Central American countries and many 
others that would be a part of an FTAA. Use of the ``enforce 
your own law'' standard is invalid as a precedent--indeed it 
contradicts 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 
this standard in different circumstances will lead to totally 
different results.
    The Office of the U.S. Trade Representative (USTR) has 
undertaken this misapplication of the ``enforce your own law'' 
standard by using it in the core labor proposal tabled in CAFTA 
and Free Trade Area of the Americas (FTAA). USTR justifies this 
action by arguing that the Trade Act of 2002 does not allow it 
to go further. That interpretation is erroneous. Under Trade 
Promotion Authority, USTR can negotiate a provision to adopt 
and enforce the five core International Labor Organization 
(ILO) labor standards (bans on child labor, forced labor, 
discrimination, and the rights to associate and bargain 
collectively).
    Expanded trade is important to this country and the world. 
Benefits will accrue to a broad range of persons in our nation 
and other nations if trade agreements include enforceable 
commitments on basic labor standards. With such a provision, 
workers in developing countries, including Central America, 
have the opportunity to become real partners in economic 
progress and help develop the expanded middle class so vital to 
those nations, and to the United States.
    With regard to other provisions that the Administration has 
stated it intends to use as a model, we are seriously concerned 
about any such use and we will be watching carefully their 
implementation. These provisions include: (1) certain 
intellectual property provisions that lock in the current state 
of U.S. law, thereby making it much more difficult for Congress 
to change those rules in the future; (2) the investor-state 
provisions and the issue of whether the USTR has adequately 
ensured that foreign investors will not have greater rights 
than provided under U.S. law; and (3) the provisions on capital 
controls and the question of whether USTR's and Treasury's 
effort to eliminate a country's flexibility to impose on an 
emergency basis temporary capital controls is sound policy and 
should be pursued in future FTAs. At a recent hearing, USTR 
Zoellick made comments that indicated that the USTR had changed 
its position on this issue.
    Finally, one area where we would like to see improvements 
in future FTAs is in the rules or origin. The Committee report 
states that the Agreement contains ``strong, simple, and 
transparent rules of origin.'' The rules of origin used for the 
Agreement are different than those for the NAFTA and for other 
previous FTAs. It is extremely difficult for Congress to gauge 
whether the rules of origin strike the correct balance between 
the dual goals of preventing transshipment/ensuring economic 
activity in the FTA partners and ease of compliance 
andadministration. While we trust that the USTR negotiators are seeking 
the correct balance, the Committee should request the ITC to conduct a 
study into the operation of various type of rules of origin and their 
impact on trade.

The U.S.-Chile implementing legislation

    The Committee Democrats pressed for the Committee to hold 
the July 10, 2003, traditional ``mock'' mark-up. The 
information legislative drafting process ensures active 
congressional involvement in shaping the legislation necessary 
to implement changes to U.S. law that are required by trade 
agreements. This process was used in the case of implementing 
legislation for the North American Free Trade Agreement 
(NAFTA), the Uruguay round agreements, and prior trade 
agreements dating back more than 20 years.
    The mock markup reflects a broadly agree-upon and well-
established practice. Further, is enables the Members of the 
Committee and the public to understand more fully and clearly 
the content of the legislation, raise questions about it, and 
offer ``mock amendments'' when necessary. Ensuring that the 
legislative process for the implementing legislation is as open 
as possible in consistent with the great importance the United 
States has attached to improving the transparency of 
international trade agreements and foreign government laws and 
regulatory practices.
    The implementing legislation only addresses those portions 
of the FTA where implementation requires changes to U.S. law. 
With respect to these provisions, it is important to note the 
improvements that we have been successful in making to several 
controversial areas.
    One set of troublesome issues in both the U.S.-Chile and 
U.S.-Singapore FTAs related to H1-B immigration visas. Although 
non under the jurisdiction of this Committee, we worked 
actively with our colleagues in both parties on the Judiciary 
Committee to make meaningful changes to these provisions. The 
most significant changes include: (1) inclusion of the 
Singapore and Chile visas within the overall H-1B cap; (2) a 
requirement that employers pay the H1-B fee (currently $1000) 
for the initial visa, and for every third renewal of the visa 
(these fees are used to fund training programs for workers in 
the United States); (3) a requirement that employers submit 
labor attestations not only for the initial visa, but also for 
every third renewal; (4) a clarification in the Statement of 
Administrative Action that visas issued under the Chile and 
Singapore programs are temporary, and that laws governing 
temporary visas, including requirements that the visa holder 
show that the stay is temporary, continue to apply; and (5) a 
clarification in the Statement of Administrative Action on the 
scope of occupations covered.
    Finally, as first drafted, the bills did not require the 
Administration to consult with trade advisory committee, ITC, 
or Congress when exercising discretionary authority granted by 
the legislation. the bill has amended to require consultation 
with each of these entities, helping to provide a greater role 
for Congress and a more balanced and well-founded trade policy.
    This process has worked for improving the problematic 
provisions in the implementing legislation.
    Additionally, we are concerned that the legislative 
implementation of the rules of origin may create unnecessary 
confusion. The rules of origin in the Chile and Singapore FTAs 
differ in a number of ways, some substantive, but most non-
substantive. In a number of instances, the implementing 
legislation mirrored the language in the agreements, despite 
the fact that there were no substantive differences intended. 
We are concerned that the differences in legislative language 
between two contemporaneously considered bills could create 
confusion for Customs and traders. Generally, Congress does not 
use different language when it means the same thing. 
Accordingly, we encourage Customs to issue harmonized 
implementing regulations for the Singapore and Chile FTAs to 
the maximum extent possible.

U.S. trade policy for economic growth and jobs

    Even as we support these agreements, it is vital that 
American trade policy restore a focus on opening markets that 
achieve the largest gains for Americans. In particular, 
numerous barriers to exports of American goods and services and 
other unfair trade practices have been allowed to stand for too 
long. These barriers include international piracy of the 
American copyrights and other intellectual property, 
discrimination by China against key American high-tech exports, 
and Japan's discrimination against myriad of manufactured and 
agricultural goods. A more concerted effort needs to be 
undertaken to reduce these barriers that cost American jobs and 
exports.
    Additionallly, there is a great deal at stake in 
negotiations currently ongoing under the auspices of the World 
Trade Organization--the so-called Doha round. These 
negotiations should be concluded carefully to achieve potential 
significant benefits to both the United States as well as other 
developed countries, and developing countries. Ways and Means 
Democrats are monitoring these negotiations carefully and urge 
a greater focus by the Administration ensuring real and 
meaningful process at the upcoming Ministerial meeting in 
September in Mexico.

                                   Charles B. Rangel.
                                   Jim McDermott.
                                   Max Sandlin.
                                   Robert T. Matsui.
                                   Earl Pomeroy.
                                   Richard E. Neal.
                                   Ben Cardin.
                                   Sander Levin.
                                   Xavier Becerra.

                                
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