[House Report 108-225]
[From the U.S. Government Publishing Office]



108th Congress                                            Rept. 108-225
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

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



 
    UNITED STATES-SINGAPORE FREE TRADE AGREEMENT IMPLEMENTATION ACT

                                _______
                                

                 July 22, 2003.--Ordered to be printed

                                _______
                                

 Mr. Sensenbrenner, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 2739]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2739) to implement the United States-Singapore Free 
Trade Agreement, having considered the same, reports favorably 
thereon without amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Hearings.........................................................    11
Committee Consideration..........................................    11
Vote of the Committee............................................    11
Committee Oversight Findings.....................................    11
New Budget Authority and Tax Expenditures........................    11
Congressional Budget Office Cost Estimate........................    11
Performance Goals and Objectives.................................    15
Constitutional Authority Statement...............................    15
Section-by-Section Analysis and Discussion.......................    15
Changes in Existing Law Made by the Bill, as Reported............    16
Agency Correspondence............................................    19
Markup Transcript................................................    24
Mock Markup Transcript...........................................    87
Minority Views...................................................    93

                          Purpose and Summary

    On May 6, 2003, United States and Singapore entered into a 
bilateral Free Trade Agreement (``FTA''), concluding a 
negotiation process that began in December 2000.\1\ H.R. 2739 
approves the U.S.-Singapore FTA submitted to Congress on July 
15, 2003 and makes changes to United States law necessary to 
ensure compliance with the agreement. The legislation contains 
four titles: Title I, ``Approval of, and General Provisions to, 
Relating the Agreement;'' Title II, ``Customs Provisions;'' 
Title III, ``Relief from Imports;'' and Title IV, ``Temporary 
Entry of Business Persons.'' The Committee's consideration of 
H.R. 2739 was limited to title IV of the legislation. Title IV 
establishes 5,400 annual professional worker visas for 
Singaporean citizens to enter the United States on a temporary 
basis.
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    \1\ Full text of the U.S.-Singapore Free Trade Agreement available 
at: .
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    H.R. 2739 was considered pursuant to the Bipartisan Trade 
Promotion Authority Act of 2002 \2\ and the Trade Act of 
1974.\3\ As a result, the legislation was considered on an 
expedited basis which did not permit committees of jurisdiction 
to amend the legislation after its formal introduction. 
However, the Committee made several changes to draft 
implementing legislation transmitted to the Committee for a 
pre-introduction "mock markup'' on July 10, 2003. These changes 
were substantially reflected in H.R. 2739.
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    \2\ 19 U.S.C. Sec. 3805 et. seq. (2002).
    \3\ 19 U.S.C. Sec. 2191 et. seq. (2003).
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                Background and Need for the Legislation

                  U.S.-SINGAPORE FREE TRADE AGREEMENT

Background
    On May 6, 2003, the United States and Singapore entered 
into a bilateral FTA, concluding a 14-round negotiation process 
that began in December 2000.\4\ Singapore is America's largest 
trading partner in Southeast Asia with bilateral trade of $31.0 
billion and a U.S. bilateral merchandise trade surplus in 2002 
of $1.4 billion. Singapore is the 11th largest export market 
for the United States with $16.2 billion in merchandise exports 
in 2002. It is the 16th largest source for goods imported into 
the United States with $14.8 billion in 2002. The United States 
is Singapore's second largest trading partner. The United 
States runs surpluses with Singapore in aircraft; electrical 
machinery; plastic; mineral fuel; instruments; miscellaneous 
chemical products; aluminum; dyes, paints, putty; and iron and 
steel products. The U.S. incurs deficits with Singapore in 
machinery; organic chemicals; knit apparel; fish and seafood; 
woven apparel; and books and newspapers.\5\
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    \4\ The full text of the U.S.-Singapore FTA is available at: 
.
    \5\ See generally, Dick K. Nanto, CRS Report for Congress, The 
U.S.-Singapore Free Trade Agreement, June 26, 2003.
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    Last month, the U.S. International Trade Commission (ITC) 
released the results of its investigation into the probable 
economic effects of a U.S.-Singapore FTA. The ITC Report 
concluded that the economy-wide effects on U.S. trade, 
production, and economic welfare of the FTA tariff reductions 
are likely to be negligible to very small. The report explained 
that this is not an unexpected finding given the current open 
trade relationship between the U.S. and Singapore, the 
relatively small trade and bilateral investment flows relative 
to U.S. trade and investment worldwide, and Singapore's small 
economy relative to that of the United States. At the sectoral 
level, the report concluded that some sectors of the U.S. 
economy likely would experience increased import competition 
from Singapore, while other sectors likely would experience 
increased export opportunities in Singapore.
Summary of U.S.-Singapore FTA Provisions Pertaining to the Jurisdiction 
        of the Committee on the Judiciary
    Although the Committee's formal legislative consideration 
of H.R. 2739 was limited to title IV of the legislation, which 
implemented changes to United States immigration law, the U.S.-
Singapore FTA also contained intellectual property and 
competition chapters that fall within the jurisdiction of the 
Committee.
            Intellectual Property Rights (IPR)
    Chapter 16 of the U.S.-Singapore FTA contains several 
provisions which enhance protections for IPR. The FTA requires 
Singapore to more aggressively enforce laws prohibiting piracy 
of intellectual property and establishes that non-
discrimination obligations apply for all types of intellectual 
property. The FTA ensures government involvement in resolving 
disputes between trademarks and Internet domain names 
(important to prevent ``cyber-squatting'' of trademarked domain 
names). It also applies the principle of ``first-in-time, 
first-in-right'' to trademarks and geographical indicators 
(place-names) applied to products.
    The Agreement streamlines the trademark filing process by 
allowing applicants to use their own national patent/trademark 
offices for filing trademark applications. The FTA ensures that 
only authors, composers, and other copyright owners have the 
right the make their works available online. Copyright owners 
maintain rights to temporary copies of their works on 
computers. (This was aimed at protecting music, videos, 
software, or text from widespread unauthorized sharing via the 
Internet). Copyrighted works and phonograms are protected for 
extended terms, consistent with U.S. standards and 
international trends. The FTA also contains anti-circumvention 
provisions aimed at preventing the tampering with technologies 
(such as embedded codes on discs) that are designed to prevent 
piracy and unauthorized distribution over the Internet. It also 
ensures that governments use only legitimate computer software 
(in order to set a positive example for private users). 
Singapore is to prohibit the production of optical discs (CDs, 
DVDs or software) without a source identification code unless 
authorized by the copyright holder in writing.
    Under the FTA, protection for encrypted program-carrying 
satellite signals extends to the signals themselves as well as 
the programming. This is designed to prevent piracy of 
satellite television programming. Both sides agreed to 
criminalize unauthorized reception and re-distribution of 
satellite signals. The Agreement also contains limited 
liability for Internet Service Providers (ISPs)--reflecting the 
balance struck in the U.S. Digital Millennium Copyright Act 
between legitimate ISP activity and the infringement of 
copyrights. In essence, both sides are to provide immunity to 
Internet service providers for complying with notification and 
take-down procedures when material suspected to be infringing 
on copyright is hosted on their servers. The FTA provides for a 
patent term to be extended to compensate for up-front 
administrative or regulatory delays in granting the original 
patent, consistent with U.S. practice. The grounds for revoking 
a patent are limited to the same grounds required to originally 
refuse a patent.
    In addition, the Agreement requires the government of 
Singapore to establish criminal penalties for pirated copies 
from legitimate products. The Singaporean government guarantees 
that it has authority to seize, forfeit, and destroy 
counterfeit and pirated goods and the equipment used to produce 
them. IPR laws are to be enforced against traded goods, 
including transshipments, to deter violators from using U.S. or 
Singaporean ports or free-trade zones to traffic in pirated 
products. The FTA mandates both statutory and actual damages 
under Singaporean law for IPR violations (as a deterrent to 
piracy) and provides that monetary damages be awarded even if 
actual economic harm (retail value, plus the profits made by 
violators) cannot be determined. Singapore is to cooperate in 
preventing pirated and counterfeit goods from being imported 
into the United States. The FTA sharply restricts Singapore 
from using compulsory licenses to copy patented drugs and 
establishes barriers to the import of patented drugs sold at 
lower prices in third countries.\6\
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    \6\ See Id.
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            Competition Policy/Antitrust
    Chapter 12 of the U.S.-Singapore FTA commits Singapore to 
enact a law regulating anti-competitive business conduct and to 
create a competition commission by January 2005. Specific 
conduct guarantees are imposed to ensure that commercial 
enterprises in which the Singapore government has effective 
influence will operate on the basis of commercial 
considerations and that such enterprises will not discriminate 
in their treatment of U.S. firms. Singapore thus commits to 
maintain its existing policy of not interfering with the 
commercial decisions of Government Linked Companies (GLCs) and 
to provide annual information on GLCs with substantial revenues 
or assets. This requirement is particularly important because 
GLCs comprise a relatively large part (nearly 40 percent) of 
Singapore's economy. A summary of provisions related to 
competition and antitrust contained in the U.S.-Singapore FTA 
is set forth below.
    Chapter 12 of the Agreement helps ensure that the 
opportunities created by trade liberalization are supported by 
healthy competitive domestic markets, allowing the firms of 
each country to compete freely and unhampered by 
anticompetitive business conduct in either country's territory. 
Firms that are subject to antitrust enforcement action will be 
guaranteed basic procedural safeguards. Since these protections 
already exist in the United States, no changes to United States 
law are necessary. While state monopolies and state enterprises 
do not account for a significant portion of either country's 
economy, the provisions governing these entities will help 
eliminate the potential for either party to favor domestic 
firms in the sale or purchase of goods and services.
    Specifically, Chapter 12 ensures that both countries:

         LEnforce domestic antitrust law that prohibits 
        anticompetitive business conduct;

         LCooperate in the enforcement of antitrust 
        law;

         LEnsure that any private or public monopolies 
        designated by either country, and any state 
        enterprises, be subject to disciplinary action for 
        abusing their status or otherwise discriminating in a 
        manner that harms the interests of the other country.

         LExplicitly recognize that anticompetitive 
        conduct threatens the free flow of bilateral trade and 
        investment, and seeks to secure the benefits of the FTA 
        by prohibiting such conduct, encouraging economically 
        sound competition policies, and furthering transparency 
        and cooperation;

         LExpand previous competition provisions by 
        affirming that antitrust laws be enforced in a neutral 
        manner that does discriminate on the basis of 
        nationality;

         LEnsure basic procedural rights for firms that 
        are subject to antitrust enforcement actions: each 
        country will provide a right to be heard and to present 
        evidence before imposing a sanction or remedy;

         LProvide for consultations and further 
        transparency by allowing either country to request from 
        the other specific public information regarding 
        antitrust enforcement activity, official monopolies and 
        state enterprises, and any exemptions from their 
        antitrust laws.

    Finally, it is important to note that the provisions 
regarding antitrust law and enforcement are not subject to 
dispute settlement under the Agreement.
            Temporary Entry
    Title IV of the U.S.-Singapore Free Trade Agreement draft 
implementing legislation forwarded to the Committee by the 
Administration for its July 10, 2003 ``mock markup'' reflected 
U.S. commitments under Chapter 14 of the U.S.-Singapore FTA 
pertaining to the temporary entry of business persons. However, 
this draft legislation was considerably amended during the 
Committee's ``mock markup'' on July 10, 2003. These Committee 
recommendations were subsequently incorporated into the 
introduced version of H.R. 2739. These changes are highlighted 
in the `Pre-Introduction `Mock Markup' of U.S.-Singapore FTA 
Implementing Legislation and Committee Amendments Incorporated 
Into H.R. 2739'' section of this report.
    In general, Chapter 14 is consistent with existing 
provisions of the Immigration and Nationality Act (``INA''). 
The four categories of persons eligible for admission under the 
Agreement's expedited procedures correspond to existing INA 
nonimmigrant and related classifications.
    To provide for the admission of the first two categories, 
business visitors and intra-company transferees, no changes in 
U.S. statutes are required. Limited technical changes are 
needed to provide for the admission of traders and investors 
and professionals. Legislation is also required to implement 
article 14.3(2) of the Agreement regarding labor disputes.
            Traders and Investors
    Under Section B of Annex 14.3 of the Agreement, citizens of 
Singapore are eligible for temporary entry as traders and 
investors. This category provides for admission under 
requirements identical to those governing admission under INA 
Sec. 101(a)(15)(E) (8 U.S.C. Sec. 1101(a)(15)(E)), which 
permits entry for persons to carry on substantial trade in 
goods or services or to develop and direct investment 
operations.
    Section 101(a)(15)(E) currently conditions admission into 
the United States upon authorization pursuant to a treaty of 
commerce and navigation. Since the Agreement is not a treaty of 
commerce and navigation, and no such treaty exists between the 
United States and Singapore, legislation is necessary to accord 
treaty trader and investor status to Singaporean citizens 
qualifying for entry under Section B.
    Section 401 of the draft legislation would not have amended 
section 101(a)(15)(E). Instead, it relied on a mechanism 
similar to that provided in Sec. 341(a) of the North American 
Free Trade Agreement Implementation Act, which in turn was 
based upon the Act of June 18, 1954 (68 Stat. 264, 8 U.S.C. 
Sec. 1184(a)). The Act of June 18, 1954 conferred treaty trader 
and investor status upon nationals of the Philippines on a 
reciprocal basis secured by an agreement entered into by the 
President of the United States and the President of the 
Philippines.
            Professionals
    Section 402(a) of the draft bill would have amended 
Sec. 101(a)(15) of the INA (8 U.S.C. Sec. 1101(a)(15)), which 
defines categories of persons entitled to enter the United 
States as nonimmigrants. Section 402(a) of the draft bill would 
have inserted a new subparagraph (W) at the end of INA 
Sec. 101(a)(15). Subparagraph (W) would have established a new 
category of aliens entitled to enter the United States 
temporarily as nonimmigrants. These aliens would have been 
citizens of countries with which the United States has entered 
into free trade agreements and who sought to come to the United 
States temporarily to engage in business activities at the 
professional level. Entry into the United States under 
subparagraph (W) would have been subject to regulations issued 
by the Secretary of Homeland Security implementing numerical 
limitations provided for in the applicable agreement, as set 
forth in new paragraph (8) of INA Sec. 214(g), as added by the 
bill. The Department of Labor would have issued regulations 
governing temporary entry of professionals under this proposed 
provision of law. This amendment to the INA would have 
implemented Section D of Annex 14.3 of the Agreement.
    New INA Sec. 101(a)(15)(W) also would have provided for the 
entry of spouses and children accompanying or following to join 
business persons entering under this category. The purpose of 
this provision was to grant express authorization for current 
Immigration and Naturalization Service practice, which is to 
admit such persons, but not allow them to be employed in the 
United States unless they independently met all applicable INA 
requirements.
    Persons seeking temporary entry into the United States 
under Sec. 101(a)(15)(W) would have been:

         Lconsidered to be seeking nonimmigrant status;

         Lsubject to general requirements relating to 
        admission of nonimmigrants, including those pertaining 
        to the issuance of entry documents and the presumption 
        set out in INA Sec. 214(b) (8 U.S.C. Sec. 1184(b)); and

         Laccorded nonimmigrant status on admission.

    It should be noted that while there are many similarities 
in the way professionals would have been treated under 
Sec. 101(a)(15)(W) of the INA, as proposed by the draft bill 
and the way H-IB professionals are treated, a determination of 
admissibility under subparagraph (W) would have neither 
foreclosed nor established eligibility for entry as an H-1B 
professional. Further, Sec. 101(a)(15)(W) would not have 
authorized a professional to establish a business or practice 
in the United States in which the professional will be self-
employed.
            Numerical Limitations
    Paragraph six of Section D of Annex 14.3 of the Agreement 
permits the United States to establish an annual numerical 
limit on temporary entries under the Agreement of Singaporean 
professionals. Under the proposed new paragraph (8) of INA 
Sec. 214(g), that would have been added by Sec. 402(a) of the 
bill, the Secretary of Homeland Security will issue regulations 
establishing an annual limit of up to 5,400 new temporary entry 
applications from Singaporean professionals, as provided in 
Appendix 14.3(D)(6) of the Agreement.
            Labor Attestations
    Under Sec. (D)(5) of Annex 14.3 of the Agreement, the 
United States may require that an attestation of compliance 
with labor and immigration laws be made a condition for the 
temporary entry of Singaporean professionals. This provision 
allows U.S. labor and immigration officials to ensure that U.S. 
employers are not hiring Singaporean professionals as a way to 
put pressure on U.S. employees to accept lower wages or less 
favorable terms and conditions of employment.
    Section 402(b) of the draft legislation would have 
implemented the attestation requirement under the Agreement. 
Section 402(b) of the draft bill would have amended Sec. 212 of 
the INA (8 U.S.C. Sec. 1182) by adding a new subsection (s) to 
the end of that section. INA Sec. 212(s)(1), which would have 
been added by Sec. 402(b) of the bill, required a U.S. employer 
seeking a temporary entry visa for a Singaporean professional 
to file an attestation with the Secretary of Labor. The 
attestation would have consisted of four core elements similar 
to those required for attestations under the ``H-1B'' visa 
program. See 8 U.S.C. Sec. 1182(n)(1)(A)-(C). Thus, an employer 
would have attested that:

         LIt would pay the employee the higher of: (a) 
        the actual wage paid to all other individuals with 
        similar experience and qualifications for the specific 
        employment in question, or (b) the prevailing wage 
        level for the occupational classification in the area 
        of employment;

         LIt would provide working conditions for the 
        employee that would not adversely affect the working 
        conditions of workers similarly employed;

         LThere was no strike or lockout in the course 
        of a labor dispute in the occupational classification 
        at the place of employment;

         LThe employer had provided notice of its 
        attestation to its employees' bargaining representative 
        in the occupational classification in the area for 
        which the employee was sought or, absent such a 
        representative, has otherwise notified its employees.

    The remainder of the proposed new INA Sec. 212(s) contained 
provisions for enforcing the labor attestation requirement. 
Like the contents of the attestation itself, the enforcement 
requirements were based on requirements under the ``H-1B'' visa 
program. INA Sec. 212(s)(2)(A) required an employer to make 
copies of labor attestations (and such accompanying documents 
as are necessary) available for public examination at the 
employer's principal place of business or worksite. INA 
Sec. 212(s)(2)(B) required the Secretary of Labor to compile a 
list of all labor attestations filed including, with respect to 
each attestation, the wage rate, number of alien professionals 
sought for employment, period of intended employment, and date 
of need. INA Sec. 212(s)(2)(C) provided that the Secretary of 
Labor would accept a labor attestation within 7 days of filing 
and issue the certification necessary for an alien to enter the 
United States as a nonimmigrant under INA Sec. 101(a)(15)(W), 
unless the attestation was incomplete or obviously inaccurate.
    INA Sec. 212(s)(3)(A) required the Secretary of Labor to 
establish a process for the receipt, investigation, and 
disposition of complaints respecting an employer's failure to 
meet a condition specified in a labor attestation or an 
employer's misrepresentation of material facts in such an 
attestation. Section 212(s)(3) also set forth penalties that 
may be imposed for violation of the labor attestation 
requirements, including monetary fines and denial of 
applications for visas under INA section 101(a)(15)(W) for 
specified periods. INA Sec. 212(s)(4) defined certain terms 
used in INA Sec. 212(s).
            Labor Disputes
    Article 14.3(2) of the Agreement establishes an important 
safeguard for the domestic labor forces of the United States 
and Singapore, respectively. It permits either government to 
refuse to issue an immigration document authorizing employment 
where the temporary entry of a business person might affect 
adversely the settlement of a labor dispute or the employment 
of a person involved in such dispute. Article 14.3(2) thus 
allows the United States to deny temporary entry to a 
Singaporean business person whose activities in the United 
States require employment authorization if admission might 
interfere with an ongoing labor dispute. If the United States 
invokes article 14.3(2), it must inform the business person in 
writing of the reasons for its action and notify Singapore.
    Section 403 of the draft bill implemented article 14.3(2) 
of the Agreement by amending INA Sec. 214(j) (8 U.S.C. 
Sec. 1184(j)), designating current subsection (j) as paragraph 
(1) and inserting a new paragraph (2). New paragraph (2) of INA 
Sec. 214(j) provided authority to refuse nonimmigrant 
classification under specified circumstances to a Singaporean 
business person seeking to enter the United States pursuant to 
the Agreement. In particular, nonimmigrant would have been 
refused if there was a strike or lockout affecting the relevant 
occupational classification at the Singaporean business 
person's place of employment or intended place of employment in 
the United States, unless that person established, pursuant to 
regulations issued by the Secretary of Homeland Security after 
consultations with the Secretary of Labor, that the business 
person's entry would not have adversely affected the settlement 
of the strike or lockout or the employment of any person 
involved in the strike or lockout.
    New paragraph (2) also required the provision of notice to 
the affected Singaporean business persons and to Singapore of a 
determination to deny nonimmigrant classification, as required 
under article 14.3(3) of the Agreement. INA Sec. 214(j)(2) as 
inserted by the draft legislation applies only to requests for 
temporary entry by traders and investors, intra-company 
transferees, and professionals--i.e., the categories of 
nonimmigrants that require employment authorization under U.S. 
law (corresponding to Sections B, C, and D of Annex 14.3 of the 
Agreement). Employment in the U.S. labor market would not have 
been permitted for business visitors, as defined in INA 
Sec. 101(a)(15)(B) (8 U.S.C. 1101(a)(15)(B)) (corresponding to 
Section A of Annex 14.3 of the Agreement); violations of status 
under that provision that involve labor disputes are fully 
redressable under existing law.
    Section 214(j)(2) would have been similar to existing INA 
provisions that prohibit admission in certain circumstances 
where interference with a labor dispute may result. For 
example, under INA Sec. 212(n)(1)(B) (8 U.S.C. 
Sec. 1182(n)(1)(B)), the U.S. employer sponsoring an alien for 
admission must certify that there is no strike or lockout in 
the occupational classification at the place of employment. 
Additionally, Sec. 214(j)(2) would have supplemented INA 
Sec. 237(a)(1)(C) (8 U.S.C. 1227(a)(1)(C)) and related INA 
provisions that now authorize deportation of an alien admitted 
under a particular nonimmigrant category if the alien ceased to 
perform the type of work permitted under that category or 
misrepresented the nature of the work at the time of admission. 
The Department of Labor would have provided strike 
certifications to the Department of Homeland Security, as it 
has provided them to the Immigration and Naturalization Service 
under existing provisions, pursuant to 8 C.F.R. 214.2(h)(17).
            Administrative Action
    Singapore would have been added to the list of countries, 
maintained by the Department of State, whose citizens are 
eligible for treaty trader and treaty investor status under INA 
Sec. 101(a)(15)(E). With respect to professionals provided for 
under Section D of Annex 14.3 of the Agreement, in all cases 
where a state license is required to engage in a particular 
activity in the United States, such professionals would have 
been required to obtain the appropriate state license. Pursuant 
to INA Sec. 101(a)(15)(W) as proposed by section 402(a) of the 
draft bill, the Secretary of Homeland Security would have 
issued regulations implementing the numerical limits set forth 
in Appendix 14.3(D)(6) of the Agreement. The Secretary of Labor 
would have issued regulations implementing the labor 
attestation provisions in new subsection (s) of INA Sec. 212. 
The administrative agencies responsible for administering the 
other amendments to the INA described above would have 
promulgated regulations to implement those amendments.
Pre-Introduction ``Mock Markup'' of U.S.-Singapore FTA Implementing 
        Legislation and Committee Amendments Incorporated Into H.R. 
        2739
    On July 10, 2003, the Committee held a pre-introduction 
``mock markup'' of draft implementing legislation submitted by 
the Administration to the Committee. The Committee's 
consideration of this draft legislation was limited to title IV 
of the draft implementing legislation. During this meeting, 
Chairman Sensenbrenner, Ranking Member Conyers, and several 
Members of the Committee made it clear that they opposed the 
inclusion of immigration provisions in H.R. 2739 and that they 
would not support any future FTA that included substantive 
changes to United States immigration law.
            Judiciary Committee Amendments to Draft Implementing 
                    Legislation
    The Committee reported several amendments to the 
immigration provisions by voice vote. The amendments were 
reflected in H.R. 2739.
    First, the Committee reported an amendment by 
Representative King to transfer the new ``W'' professional 
worker visa category for citizens of Singapore to section 
101(a)(15)(H)(i)(b)(1) of the Immigration and Nationality Act, 
rather than 101(a)(15)(W) as provided for in the draft 
implementing legislation. Representative King's amendment also 
ensured that in future years, the national H-1B visa cap will 
be reduced in two situations. First, the number of H-1B visas 
available in a fiscal year will be reduced by the number of 
Singaporean citizens granted extensions of H-1B1 status in that 
fiscal year after having previously been granted five or more 
consecutive prior extensions. Second, the number of H-1B visas 
available in a fiscal year will be reduced by the number of H-
1B1 visas allocated (5,400 for citizens of Singapore). However, 
if at the end of a fiscal year, the 6,800 slots reserved for 
citizens of Singapore have not been exhausted, the number of H-
1B visas available for that fiscal year will be adjusted 
upwards by the number of unused Singapore visas. These newly 
available H-1B visas may be issued 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.
    The Committee also reported an amendment offered by 
Representatives Berman and Conyers requiring that an 
application for every second extension for an H-1B1 visa be 
accompanied by a new employer attestation. This will have the 
effect of requiring the employer to update the prevailing wage 
determination at such time. The amendment also requires that an 
employer pay a fee when H-1B1 status is initially granted and 
after every second extension of that status. The fee shall be 
the same as the fee an employer must pay when petitioning for 
an H-1B visa. However, if no fee is being assessed under the H-
1B program, no fee shall be imposed under the H-1B1 program.
    Finally, the implementing legislation now clarifies that an 
employer generally cannot sponsor an alien for an E, L, or H-
1B1 visa if there is any labor dispute occurring in the 
occupational classification at the place of employment, 
regardless of whether the labor dispute is classified as a 
strike or lockout. In this regard, worker protections in H.R. 
2739 are broader than those contained in the H-1B visa 
category.

                                Hearings

    No hearings were held on H.R. 2739 before the Committee on 
the Judiciary.

                        Committee Consideration

    On July 16, 2003, the Committee met in open session and 
ordered favorably reported the bill H.R. 2739 without amendment 
by voice vote, a quorum being present.

                         Vote of the Committee

    In compliance with clause 3(b) of Rule XIII of the Rules of 
the House of Representatives, the Committee notes that there 
were no recorded votes during the committee consideration of 
H.R. 2739.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of Rule XIII of the Rules 
of the House of Representatives, the Committee reports that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of Rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of Rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of Rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 2739, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 21, 2003.
Hon. F. James Sensenbrenner, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2739, a bill to 
implement the United States-Singapore 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, who can be reached at 226-2680.
            Sincerely,
                                       Douglas Holtz-Eakin.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member
H.R. 2739--A bill to implement the United States-Singapore Free Trade 
        Agreement.

                                SUMMARY

    H.R. 2739 would approve the free trade agreement (FTA) 
between the government of the United States and the government 
of Singapore that was entered into on May 6, 2003. It would 
provide for 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 $55 million in 2004, by $410 
million over the 2004-2008 period, and by about $1 billion 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. 2739 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. 2739 is shown in the 
following table.


                           BASIS OF ESTIMATE

Revenues
    Under the United States-Singapore agreement, all tariffs on 
U.S. imports from Singapore 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, 
the U.S. collected $88 million in customs duties in 2002 on 
about $14.1 billion of imports from Singapore. Of the imports, 
only $1.3 billion faced non-zero tariff rates. These dutiable 
imports from Singapore consist mostly of certain electrical 
machinery, knitted or crocheted apparel, mineral fuels and 
oils, surgical and precision instruments, and certain nuclear 
reactor components. Based on these data, CBO estimates that 
phasing out tariff rates as outlined in the U.S.-Singapore 
agreement would reduce revenues by $55 million in 2004, by $410 
million over the 2004-2008 period, and by about $1 billion over 
the 2004-2013 period, net of income and payroll tax offsets.
    This estimate includes the effects of increased imports 
from Singapore 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 Singapore 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 Singapore would 
displace imports from other countries.
    Based on current law, H.R. 2739 would not provide for the 
assessment of civil monetary penalties on employers for 
violations of the labor attestation process with respect to 
certain workers from Singapore. However, if H.R. 2738, a bill 
to implement the United States-Chile FTA, were to be enacted 
prior to this bill, H.R. 2739 would allow the Secretary of 
Labor to assess such penalties. 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 H.R. 2739 would permit certain traders and 
investors from Singapore, and their spouses and children, to 
enter the United States as nonimmigrants. The Bureau of 
Citizenship and Immigration Services (BCIS) would charge fees 
of about $100 to provide nonimmigrant visas, so CBO estimates 
that the agency could collect several million dollars annually 
in offsetting receipts (a credit against direct spending). The 
agency is authorized to spend such fees without further 
appropriation, so the net impact on BCIS spending would not be 
significant.
    However, if H.R. 2738 (a bill to implement the United 
States-Chile FTA) were to be enacted prior to this bill, title 
IV would establish a new nonimmigrant category for certain 
professional workers from Singapore. The legislation would 
limit the number of annual entries under this category to 
5,400, plus spouses and children. The BCIS would charge fees of 
about $100 to provide nonimmigrant visas, so CBO estimates that 
the agency would collect less than $3 million annually in 
offsetting receipts. Again, the agency is authorized to spend 
such fees without further appropriation, so the net 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. 2739 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 
$200,000 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. 2739 on revenues and direct 
spending are shown in the following table.


              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 (226-2680)
Federal Spending:
  Dispute Settlements--Melissa Zimmerman (226-2860)
  Immigration--Mark Grabowicz (226-2860), Christi Hawley-Sadoti 
        (226-2820), and Sunita D'Monte (226-2840)
Impact on State, Local, and Tribal Governments: Melissa Merrell 
    (225-3220)
Impact on the Private Sector: Paige Piper/Bach (226-0207)

                         ESTIMATE APPROVED BY:

G. Thomas Woodward
Assistant Director for Tax Analysis
Peter H. Fontaine
Deputy Assistant Director for Budget Analysis

                    Performance Goals and Objectives

    H.R. 2739 does not authorize funding. Therefore, clause 
3(c)(4) of Rule XIII of the Rules of the House of 
Representatives is inapplicable.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of Rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in article I, section 8 of the Constitution.

               Section-by-Section Analysis and Discussion

    The following section-by-section analysis describes the 
sections of H.R. 2739 within the rule X jurisdiction of the 
Committee on the Judiciary.

             TITLE IV. TEMPORARY ENTRY FOR BUSINESS PERSONS

    It should be emphasized that all grounds of inadmissibility 
found at section 212(a) of the Immigration and Nationality Act 
(INA), as the section currently exists or as it may be modified 
in the future, shall apply to any applicant for admission 
pursuant to title IV.
Sec. 401. Nonimmigrant Traders and Investors.
    ``E'' nonimmigrant visas are available for treaty traders 
and investors. A visa is available to an alien who:

        is entitled to enter the United States under and in 
        pursuance of the provisions of a treaty of commerce and 
        navigation between the United States and the foreign 
        state of which he is a national, and the spouse and 
        children of any such alien if accompanying or following 
        to join him: i) solely to carry on substantial trade, 
        including trade in services or trade in technology, 
        principally between the United States and the foreign 
        state of which he is a national, or ii) solely to 
        develop and direct the operations of an enterprise in 
        which he has invested . . . a substantial amount of 
        capital[.]
            INA section 101(a)(15)(E).
    Section 401 of the bill provides that nationals of 
Singapore (along with spouses and children, if accompanying or 
following to join), may, if otherwise eligible for a visa and 
admissible into the U.S., be considered to be classifiable as 
``E'' nonimmigrants if entering solely for a purpose specified 
in clause (i) or (ii) of INA section 101(a)(15)(E). H.R. 2739 
contains a similar provision for nationals of Singapore.
Sec. 402. Nonimmigrant Professionals.
    Section 402 of the bill makes nationals of Singapore 
eligible for the the ``H-1B1 nonimmigrant visa program created 
by H.R. 2738 to implement the U.S.-Chile Free Trade Agreement. 
The total number of approvals of initial applications for 
admission by Singaporeans is 5,400 in any fiscal year.
    For a description of the H-1B1 visa program, see the 
accompanying Judiciary Committee Report for H.R. 2738.

         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 italics, existing law in which no change 
is proposed is shown in roman):

SECTION 13031 OF THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 
                                  1985

SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.

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

           *       *       *       *       *       *       *

            (13) 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-Singapore 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 592 OF THE TARIFF ACT OF 1930

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

    (a) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

            (7) Prior disclosure regarding claims under the 
        united states-singapore free trade agreement.--
                    (A) 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-Singapore Free Trade Agreement 
                Implementation Act if the importer, in 
                accordance with regulations issued by the 
                Secretary of the Treasury, voluntarily and 
                promptly makes a corrected declaration and pays 
                any duties owing.
                    (B) In the regulations referred to in 
                subparagraph (A), the Secretary of the Treasury 
                is authorized to prescribe time periods for 
                making a corrected declaration and paying 
                duties owing under subparagraph (A), if such 
                periods are not shorter than 1 year following 
                the date on which the importer makes the 
                incorrect claim that a good qualifies as an 
                originating good.

           *       *       *       *       *       *       *

                              ----------                              


                  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-Singapore 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.

           *       *       *       *       *       *       *


           SECTION 214 OF THE IMMIGRATION AND NATIONALITY ACT

                       admission of nonimmigrants

      Sec. 214. (a) * * *
      (g)(1) * * *

           *       *       *       *       *       *       *


[The purported changes made to paragraph (8) of section 214(g) by this 
bill are shown below. Section 402(a)(2)(B) of H.R. 2738 inserts at the 
 end of subsection (g) a new paragraph (8), which is presumed to take 
          effect prior to the execution of these amendments.]

    [(8)(A) The agreement referred to in section 
101(a)(15)(H)(i)(b1) is the United States-Chile Free Trade 
Agreement.]
    (8)(A) The agreements referred to in section 
101(a)(15)(H)(i)(b1) are--
            (i) the United States-Chile Free Trade Agreement; 
        and
            (ii) the United States-Singapore Free Trade 
        Agreement.
    (B)(i) * * *
    [(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.]
    (ii) The annual numerical limitations described in clause 
(i) shall not exceed--
            (I) 1,400 for nationals of Chile (as defined in 
        article 14.9 of the United States-Chile Free Trade 
        Agreement) for any fiscal year; and
            (II) 5,400 for nationals of Singapore (as defined 
        in Annex 1A of the United States-Singapore Free Trade 
        Agreement) for any fiscal year.

           *       *       *       *       *       *       *


                         Agency Correspondence


                           Markup Transcript



                            BUSINESS MEETING

                        WEDNESDAY, JULY 16, 2003

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:04 a.m., in 
Room 2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner, Jr., [Chairman of the Committee] presiding.
    [Intervening business.]
    Chairman Sensenbrenner. Pursuant to notice, I now call up 
H.R. 2739, the implementing legislation for the U.S.-Singapore 
Free Trade Agreement and move its favorable recommendation to 
the House.
    The same explanation that I have previously given with 
respect to the Chile legislation applies to the Singapore 
legislation, and again only the immigration provisions of the 
agreement require implementing legislation.
    Without objection, H.R. 2739 will be considered as read.
    [The bill, H.R. 2739, follows:]
      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


      
      

  


    Chairman Sensenbrenner. Without objection, the transcript 
of the mock markup held on this legislation last week will be 
inserted into the record following opening statements.
    And I will not use any additional time to repeat myself.
    [The prepared statement of Mr. Sensenbrenner follows:]
  Prepared Statement of the Honorable F. James Sensenbrenner, Jr., a 
         Representative in Congress From the State of Wisconsin
    H.R. 2738, the ``U.S.-Chile Free Trade Agreement Implementation 
Act,'' and H.R. 2739, the ``U.S.-Singapore Free Trade Agreement 
Implementation Act'' were referred to the Judiciary Committee for 
consideration of provisions that fall within the Committee's 
jurisdiction.
    As we were all reminded last week, Trade Promotion Authority (TPA) 
requires the Administration to actively consult with Congress when 
initiating, negotiating, and implementing trade agreements. TPA also 
provides that legislation to implement free trade agreements may not be 
amended by committees of jurisdiction and may only receive an up or 
down vote on the floor of the House.
    The U.S.-Chile and U.S.-Singapore Free Trade Agreements contain 
several issues within the purview of this Committee. Both agreements 
contain competition clauses that ensure antitrust laws are applied in a 
neutral, transparent, nondiscriminatory manner while safeguarding basic 
procedural rights. The agreements also contain robust intellectual 
property protections, requiring the governments of Chile and Singapore 
to take affirmative steps to eradicate the piracy of trademarks, 
patents, satellite television signals, and other forms of intellectual 
property.
    While the antitrust and intellectual property provisions within 
these agreements are critical, they do not require any substantive 
changes to U.S. law. As a result, our consideration of H.R. 2738 and 
H.R. 2739 must be confined to Title IV of each bill, which pertains to 
``Temporary Entry of Business Persons.''
    I have long expressed concern about substantive changes to U.S. law 
contained in free trade agreements. Before passage of Trade Promotion 
Authority, immigration provisions were included in earlier free trade 
agreements such as NAFTA, without any consultation with this Committee. 
This practice unfortunately created precedent for subsequent trade 
agreements, such as those we consider today, and immigration provisions 
were included in the Chile and Singapore Free Trade Agreements before 
passage of TPA last year.
    At last week's mock markup, Members of this Committee spoke with a 
united bipartisan voice that immigration provisions in future free 
trade agreements will not receive the support of this Committee. In 
addition, the implementing legislation we consider today contains a 
number of modifications recommended by the Committee at last week's 
mock markup.
    While the draft implementing legislation created a separate visa 
category for skilled workers from Chile and Singapore, the bills we 
consider today amend the Immigration and Nationality Act to ensure that 
these visas--6,800 in total--are deducted from the national H-1B cap 
when they are issued or when a Chilean or Singaporean citizen is 
granted an extension after five or more consecutive prior extensions.
    In addition, the implementing legislation now provides that after 
every second extension of H-1B1 status for a citizen of Chile or 
Singapore, an application for a further extension must be accompanied 
by a new employer attestation. This will have the effect of requiring 
the employer to update the prevailing wage determination at such time.
    Moreover, the legislation provides that an employer will have to 
pay a fee in order for an alien to be initially granted H-1B1 status 
and after every second extension of that status. The fee shall be the 
same as the fee an employer must pay when petitioning for an H-1B visa. 
However, if no fee is being assessed under the H-1B program, no fee 
shall be imposed under the H-1B1 program.
    Finally, the legislation now clarifies that an employer generally 
cannot sponsor an alien for an E, L, or H-1B1 visa if there is any 
labor dispute occurring in the occupational classification at the place 
of employment, regardless of whether the labor dispute is classified as 
a strike or lockout. In this regard, the implementing language provides 
greater worker protections than those contained in the current H-1B 
program.
    The legislation we consider today is a considerable improvement 
over the draft implementing legislation we considered last week. The 
Committee's bipartisan commitment to ensuring that our recommendations 
were incorporated into these bills reaffirms the constitutional 
prerogative of Congress and this Committee's commitment to ensuring 
that future free trade agreements are not used to substantively alter 
United States immigration law. It is my hope and expectation that our 
actions over the last week will not go unnoticed by this and future 
Administrations.
    These implementing bills as the result of extensive negotiation and 
cooperation between the USTR and Members of this Committee, both 
majority and minority. They represent true bipartisan compromise. 
Several concerns of the minority were addressed and are represented in 
the legislation before us. In recognition of the diligent work by the 
Committee and the USTR to improve the implementing legislation, and in 
light of the fact that our limited jurisdictional referral requires the 
Committee to consider only provisions within our jurisdiction, I would 
urge all members who support our work on the immigration sections in 
Title IV of both bills to support reporting this legislation today. For 
members who do not support portions of the implementing legislation 
outside of this Committee's jurisdiction or the underlying trade 
agreements themselves, I encourage you to vote to report the 
legislation and then submit supplemental views to the committee report 
outlining your position on the broader implementing legislation.
    I now recognize the Ranking Member for his remarks.

    [The prepared statement of Ms. Jackson Lee follows:]
       Prepared Statement of the Honorable Sheila Jackson Lee, a 
           Representative in Congress From the State of Texas
    I have serious reservations about the actions the U.S. Trade 
Representative (USTR) has taken with respect to the temporary entry 
provisions in the Chile and Singapore Free Trade Agreements. In my 
opinion, they have overstepped their bounds and usurped this 
Committee's jurisdiction. The negotiating objectives that Congress laid 
out for USTR in the Trade Act of 2002 (TPA) do not include even one 
word on temporary entry. There is no specific authority in TPA to 
negotiate new visa categories or impose new requirements on our 
temporary entry system, yet that is exactly what USTR has done in the 
Chile and Singapore FTAs.
    The Singapore and Chile FTAs create a new visa classification for 
the temporary admission of nonimmigrant professionals that is similar 
in many respects to the existing H-1B nonimmigrant classification. The 
new nonimmigrant visa classification, however, would differ from the 
existing H-1B program in significant ways.
    Both agreements include caps on the number of professionals that 
can be granted entry each year (1,400 for Chile and 5,400 for 
Singapore).
    The provisions for the new nonimmigrant visa permit an unlimited 
number of extensions in 1-year increments. This makes it possible to 
transform a temporary entry program into a permanent program. In 
effect, employers would have the power to keep permanent workers in a 
temporary legal status. In contrast, under the H-1B program, workers 
are granted a three-year visa that can be renewed only once.
    The Labor Certification Attestation (LCA) is one of the few 
safeguards we have in our H-1B system for ensuring that employers do 
not abuse temporary workers to undermine the domestic labor market. The 
implementing legislation contains some, but not all, of the LCA 
requirements that apply in our H-1B programs.
    The implementing legislation completely omits the category of H-1B 
dependent employers and the additional LCA requirements that apply to 
them. H-1B dependent employers are required to attest that new entrants 
will not displace U.S. workers and demonstrate that they have tried to 
recruit U.S. workers. The implementing legislation should have a 
similar provision.
    In addition, the H-1B program authorizes the Secretary of Labor to 
initiate her own investigations and enforcement proceedings based on 
credible information that an employer is violating the rules of the H-
1B program. No such authority is granted in the administration of the 
Chile and Singapore visa programs.
    The Singapore and Chile FTAs require permanent changes to our 
immigration system, but for now these changes are limited to two 
countries. Unfortunately, we may see these programs expanded to dozens 
of additional countries in future free trade agreements. The 
administration is currently negotiating additional FTAs with Australia, 
Morocco, five countries in Southern Africa, five countries in Central 
America, and the 34 countries of the Western Hemisphere.
    Immigration policy is a sensitive, political matter. Changes in 
immigration policy have traditionally been the result of intense, open 
negotiations between workers, employers, immigration advocates, and 
Members of Congress. These issues simply do not belong in fast-tracked 
trade agreements negotiated by executive agencies.

    Chairman Sensenbrenner. Are there further opening 
statements?
    If not, without objection, the previous question is ordered 
on reporting the bill because a reporting quorum is not 
present.
    [Intervening business.]
    A reporting quorum being present, the unfinished business 
is the question on the motion to report favorably the bill H.R. 
2739, upon which the previous question was ordered.
    Those in favor will say aye.
    Opposed, no.
    The ayes appear to have it, the ayes have it, the motion to 
report favorably is agreed to and all Members will be given 2 
days, as provided by House rules, in which to submit additional 
dissenting supplemental or minority views.

                         Mock Markup Transcript



                            BUSINESS MEETING

                        THURSDAY, JULY 10, 2003

                  House of Representatives,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:49 a.m., in 
Room 2141, Rayburn House Office Building, Hon. F. James 
Sensenbrenner, Jr., [Chairman of the Committee] presiding.
    [Intervening business.]
    Chairman Sensenbrenner. The next item on the agenda is the 
consideration of the draft implementing legislation for the 
U.S.-Singapore Free Trade Agreement, and without objection, the 
draft implementing legislation will be considered as read and 
open for amendment at any point.
    [The legislation follows:]
      
      

  


      
      

  


    Chairman Sensenbrenner. The gentleman from Iowa, Mr. King, 
has to offer his amendment as amended by Mr. Conyers and Mr. 
Berman's amendment as modified. Do you do so?
    Mr. King. Mr. Chairman, I do so. I'm not aware that that 
amendment is printed and ready to be presented to the 
Committee. I could speak to the issue.
    Chairman Sensenbrenner. It's the same amendment.
    [The amendments follows:]
    
    
    Chairman Sensenbrenner. Without objection, the King 
amendment as amended by Berman-Conyers modified is agreed to.
    Are there further amendments?
    Mr. Conyers. Mr. Chairman?
    Chairman Sensenbrenner. The gentleman from Michigan.
    Mr. Conyers. I ask unanimous consent--we just discovered--
to make this----
    Chairman Sensenbrenner. Hold on. Are there further 
amendments? If not, the question is on agreeing to the draft 
implementing legislation as amended by the King amendment. 
Those in favor will say aye? Opposed, no?
    The ayes appear to have it. The ayes have it, and the draft 
implementing legislation as amended is agreed to.
    Without objection, the staff is permitted to make technical 
and conforming changes.
    The Chair would like to thank all Members for their 
cooperation on this. I believe we accomplished something that 
is in the public interest during today's session, and the 
Committee is adjourned.
    [Whereupon, at 12:08 p.m., the Committee was adjourned.]
                             Minority Views

    We write these views to explain that, as a general 
proposition we oppose efforts by the Administration to distort 
our immigration laws by offering new visa categories to 
specific nations as a bargaining chip in trade negotiations. 
This should not have been done as part of the North American 
Free Trade Agreement and it should not have been done as part 
of the Singapore Free Trade Agreement.
    We would note that Article I, section 8, clause 4 of the 
Constitution provides that Congress shall have the power to 
``establish an uniform Rule of Naturalization.'' The Supreme 
Court has long found that this provision of the Constitution 
grants Congress plenary power over immigration policy.\1\ 
Moreover, the Court has found that ``the formulation of 
policies [pertaining to the entry of aliens and their right to 
remain here] is entrusted exclusively to Congress has become 
firmly imbedded in the legislative and judicial tissues of our 
body politics as any aspect of our government.'' \2\ 
Nonetheless the Administration has negotiated a new visa 
program in the U.S.-Singapore FTA; usurping Congress' clear 
constitutional role in creating immigration law.
---------------------------------------------------------------------------
    \1\ See: Kleindienst v. Mandel, 408 U.S. 753, 766 (1972) and 
Boutilier v. INS, 387 U.S. 118, 123 (1967)
    \2\ Galvan v. Press, 347 U.S. 522,531(1954)
---------------------------------------------------------------------------
    Having stated that, we do appreciate the efforts of the 
Majority to work with us in improving the implementing language 
with regard to immigration as best we could, given the 
unfortunate constraints of the underlying agreement. For 
example, the initial draft of the legislation we received 
contained several major loopholes and flaws. It would have 
created 5,400 new visas for persons to come into this country 
from Singapore. There was no requirement that employers pay any 
fees when such temporary workers were brought in. There was no 
requirement that employers certify that they were unable to 
find American workers before they hired these foreign workers. 
And there was no real limitation on the ability of these 
individuals to stay in this country indefinitely.
    Many of these problems were mitigated as a result of this 
Committee's input in the process. We enacted language which 
would insure that several H-1b requirements apply to these new 
visas.\3\ We also enacted a requirement that the new visas not 
go beyond the current H-1b limits.
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    \3\ Although the amount of the fee was specified, the implementing 
legislation fails to include the requirement in INA section 
212(n)(2)(C)(vi)(II) that forbids the employer from requiring the 
employee to pay the fee.
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    We would note that we have a significant remaining concern 
that the Administration was unwilling to include in the text of 
the implementing legislation. First and foremost, the Singapore 
implementing bill provides no overall limitation on how many 
times professional visas can be renewed. While the implementing 
language included the Conyers/Berman language insuring that 
renewals beyond 6 years count against the overall H-1b cap, it 
does not include language present in the current H-1b 
provisions that limits authorized admission to 6 years. Thus, 
it is possible that employers could renew their employees' 
visas each and every year under the Singapore agreement, with 
no limits, while also bringing in new entrants to fill up the 
annual numerical limit for new visas. This would rob the 
program of its supposedly temporary nature and harm American 
workers.
    In addition we are concerned that the implementing 
legislation does not contain all of the Labor Condition 
Application requirements that apply in the current H-1b 
programs. Most importantly, the implementing legislation 
completely omits the category of H-1b dependent employers 
present in existing law that requires employers to demonstrate 
that they have tried to recruit U.S. workers and attest that 
new entrants will not displace U.S. workers.\4\ In addition, 
the implementing legislation does not grant the authority given 
to Secretary of Labor in the H-1b to initiate her own 
investigations based on credible information that the employer 
is violating the rules of employment of the H-1b program. USTR 
has argued that these provisions expire in October 1, 2003 and 
that should Congress extend or modify provisions of the H-1b 
program, it may make corresponding modifications to the 
amendments to the INA made by the implementing bill. However, 
omission of these important worker protections sets a dangerous 
precedent for inclusion in future agreements.
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    \4\ The implementing language also omits H-1b dependent requirement 
in 212(n)(2)(E) that the H-1b dependent employer not place the H-1b 
worker with a third employer that is displacing U.S. workers.
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    Finally, we strongly object to any notion that the U.S.-
Singapore Free Trade Agreement will be used as a model for 
future FTAs. We have been informed by the Majority that the 
Administration will not seek immigration in future possible 
free trade agreements, such as the Central American Free Trade 
Agreement, and this is spelled out in the letter from Chairman 
Sensenbrenner and Ranking Member Conyers to Ambassador 
Zoellick. It is critical that the administration interpret the 
inherent problems in the new visa program not as a precedent 
for future agreements, but rather as a sign that immigration 
has no place in trade agreements.

                                   John Conyers, Jr.
                                   Jerrold Nadler.
                                   Robert C. Scott.
                                   Sheila Jackson Lee.
                                   Martin T. Meehan.
                                   William D. Delahunt.
                                   Tammy Baldwin.
                                   Linda T. Sanchez.

                                
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