[Senate Report 112-222]
[From the U.S. Government Publishing Office]


                                                       Calendar No. 189
112th Congress                                                   Report
                                 SENATE
 2d Session                                                     112-222

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



 
  UNITED STATES-COLOMBIA TRADE PROMOTION AGREEMENT IMPLEMENTATION ACT

                                _______
                                

               September 20, 2012.--Ordered to be printed

                                _______
                                

              Mr. Baucus, from the Committee on Finance, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1641]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Finance, to which was referred the bill 
(S. 1641) to implement the United States-Colombia Trade 
Promotion Agreement, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                                CONTENTS

                                                                   Page
  I. Report and Other Materials of the Committee......................2
      A. Report of the Committee on Finance......................     2
      B. Summary of Congressional Consideration of the Agreement.     2
          1. Background..........................................     2
          2. Trade Promotion Authority Procedures in General.....     3
          3. Notification Prior to Negotiations..................     3
          4. Notification of Intent To Enter Into an Agreement...     4
          5. Development of the Implementing Legislation.........     4
          6. Formal Submission of the Agreement and Implementing 
              Legislation........................................     5
          7. Committee and Floor Consideration...................     6
      C. Trade Relations with Colombia...........................     6
          1. United States-Colombia Trade........................     6
          2. Tariffs and Trade Agreements........................     7
          3. U.S. International Trade Commission Study...........     8
      D. Overview of the Agreement...............................     8
          1. Background..........................................     8
          2. Office of the U.S. Trade Representative Summary of 
              the Agreement......................................     9
      E. General Description of the Bill To Implement the 
          Agreement..............................................    36
          Title I--Approval of, and General Provisions Relating 
              to, the Agreement..................................    36
          Title II--Customs Provisions...........................    38
          Title III--Relief from Imports.........................    41
          Title IV--Procurement..................................    46
          Title V--Extension of Andean Trade Preference Act......    46
          Title VI--Offsets......................................    47
      F. Vote of the Committee in Reporting the Bill.............    47
 II. Budgetary Impact of the Bill....................................47
III. Regulatory Impact of the Bill and Other Matters.................54
 IV. Additional Views................................................55
  V. Changes in Existing Law Made by the Bill, as Reported...........58

             I. REPORT AND OTHER MATERIALS OF THE COMMITTEE


                 A. Report of the Committee on Finance

    The Committee on Finance, to which was referred the bill 
(S. 1641) to implement the United States-Colombia Trade 
Promotion Agreement (``Agreement''), having considered the 
same, reports favorably thereon without amendment and 
recommends that the bill do pass.

       B. Summary of Congressional Consideration of the Agreement


1. Background

    On November 18, 2003, U.S. Trade Representative Robert B. 
Zoellick notified Congress of the Administration's intent to 
negotiate a free trade agreement (``FTA'') with the Republic of 
Colombia (``Colombia''), Peru, Ecuador, and Bolivia. Ambassador 
Zoellick consulted with the relevant congressional committees, 
including the Senate Committee on Finance, with respect to the 
initiation of negotiations. He also attended meetings of the 
Congressional Oversight Group on November 6, 2003, and May 6, 
2004, to discuss the initiation of negotiations.
    Negotiations with Colombia, Peru, and Ecuador were launched 
on May 18, 2004, with Bolivia participating as an observer. The 
United States and Colombia subsequently decided to pursue a 
separate agreement, and U.S. Trade Representative Rob Portman 
announced that the United States and Colombia had successfully 
concluded those negotiations on February 27, 2006.
    The President notified Congress of his intent to enter into 
the Agreement with Colombia on August 24, 2006, and published 
notice of his intent in the Federal Register on August 28, 
2006. On September 20, 2006, the U.S. Trade Representative 
submitted to Congress and the President the reports from 27 
trade advisory groups commenting on the final text of the 
Agreement. The Office of the U.S. Trade Representative also 
made the reports publicly available on its website. On November 
22, 2006, the Agreement was signed by Deputy U.S. Trade 
Representative John Veroneau and Colombian Minister of Trade, 
Industry, and Tourism Jorge Humberto Botero.
    On May 10, 2007, the Bush Administration and the bipartisan 
leadership of the U.S. Senate Committee on Finance and the U.S. 
House of Representatives Committee on Ways and Means reached an 
agreement on trade policy. As discussed further below in 
Section I.D., the May 10 bipartisan trade deal required 
groundbreaking changes to the labor, environmental, 
intellectual property, government procurement, services, and 
investment provisions of the Agreement. The United States and 
Colombia signed amendments to the Agreement to reflect those 
changes on June 28, 2007.

2. Trade promotion authority procedures in general

    Article I, section 8 of the Constitution of the United 
States vests Congress with the authority to regulate 
international trade. Congress has periodically delegated a 
portion of this authority to the President in order to advance 
the economic interests of the United States. This delegation 
represents a compact between Congress and the Administration, 
by which Congress guarantees it will vote on a trade agreement 
entered into by the Administration without amendment and the 
Administration guarantees close consultation with Congress 
during the negotiation of the trade agreement in order to 
achieve the objectives that Congress identifies. Thorough and 
timely consultation by the Administration with Congress is the 
essential bedrock upon which Congress's delegation of 
constitutional authority rests. This longstanding compact, 
spanning decades, has resulted in the successful negotiation 
and implementation of numerous trade agreements that have 
contributed significantly to increased economic growth and 
prosperity in the United States.
    The most recent incarnation of this compact is found in the 
Bipartisan Trade Promotion Authority Act of 2002 (``the Act''), 
which was included in the Trade Act of 2002 (Pub. L. 107-210). 
The Act includes prerequisites for congressional consideration 
of a trade agreement under expedited procedures (known as Trade 
Promotion Authority (``TPA'') procedures), which are found in 
sections 2103 through 2106 of the Act (19 U.S.C. 
Sec. Sec. 3803-3806) and section 151 of the Trade Act of 1974 
(19 U.S.C. Sec. 2191). Section 2103 of the Act authorizes the 
President to enter into reciprocal trade agreements with 
foreign countries to reduce or eliminate tariff or nontariff 
barriers and other trade-distorting measures. Section 2102 of 
the Act outlines the negotiating objectives that the President 
must achieve if the President intends to use TPA procedures to 
implement a trade agreement. And section 151 of the Trade Act 
of 1974 sets forth expedited procedures for congressional 
consideration of a trade agreement without amendment. The 
President's authority under section 2103 extends to trade 
agreements entered into on or before June 30, 2007.

3. Notification prior to negotiations

    Under section 2104(a)(1) of the Act, the President must 
provide written notice to Congress at least 90 calendar days 
before initiating negotiations. On November 18, 2003, the U.S. 
Trade Representative notified Congress of the President's 
intent to initiate negotiations with Colombia. The negotiations 
were initiated on May 18, 2004. Section 2104(a)(2) requires the 
President, before and after submission of the notice, to 
consult regarding the negotiations with the relevant 
congressional committees and the Congressional Oversight Group 
established under section 2107 of the Act. The Administration 
engaged in the requisite consultations with respect to this 
Agreement, including an appearance by the U.S. Trade 
Representative at meetings of the Congressional Oversight Group 
on November 6, 2003, and May 6, 2004.

4. Notification of intent to enter into an agreement

    Under section 2105(a)(1)(A) of the Act, the President must 
notify Congress at least 90 calendar days before entering into 
an agreement of his intent to enter into the agreement. On 
August 24, 2006, the President notified Congress of his intent 
to enter into the United States-Colombia Trade Promotion 
Agreement. The Agreement was signed on November 22, 2006.

5. Development of the implementing legislation

    Under TPA procedures, Congress and the Administration work 
together to produce legislation that implements a free trade 
agreement. Draft legislation is developed in close consultation 
between the Administration and the committees with jurisdiction 
over the laws that must be enacted or amended to implement the 
agreement. The committees may hold informal meetings to 
consider the draft legislation and to make non-binding 
recommendations to the Administration. The Administration then 
finalizes the implementing legislation for formal submission to 
Congress and referral to the committees of jurisdiction. These 
procedures are meant to ensure close cooperation between the 
executive and legislative branches of government to develop 
legislation that faithfully implements the agreement. Under TPA 
and predecessor legislation, trade agreement implementing bills 
may include only those provisions that are necessary or 
appropriate to implement the agreement.
    The Senate Committee on Finance met in open executive 
session on July 7, 2011, to consider informally the draft 
implementing legislation for the Agreement and the draft 
Statement of Administrative Action (``SAA''). The draft 
implementing legislation included provisions to extend the 
Generalized System of Preferences (``GSP'') and the Andean 
Trade Preference Act (``ATPA''). These provisions are 
``necessary or appropriate'' to implement the Agreement, as 
required by TPA and predecessor legislation. The ``necessary or 
appropriate'' standard has applied to virtually every trade 
agreement considered by Congress since 1974, creating an 
extensive history of legislative practice. That practice 
clearly supports the inclusion of the GSP and ATPA extensions 
in the draft legislation implementing this Agreement. 
Specifically, the Uruguay Round Agreements Act of 1994 included 
provisions to extend GSP that were very similar to the 
provisions included in this draft legislation.
    The Committee did, however, consider three other amendments 
to the draft implementing legislation. First, Senator Cardin 
offered an amendment to include the Colombian Action Plan 
Related to Labor Rights (``Labor Action Plan'') in the draft 
implementing legislation. Second, Senator Menendez offered an 
amendment to require the Administration to report to Congress 
on the enforcement and implementation of the Labor Action Plan. 
Third, Senator Enzi offered an amendment to ensure that 
Colombia and the United States are subject to equivalent labor 
law requirements. All three amendments failed by voice vote.
    The Committee approved the draft legislation and draft SAA 
without amendment by a roll call vote of 18 ayes, 6 nays. Ayes: 
Baucus, Conrad, Bingaman, Kerry (proxy), Wyden, Cantwell, 
Nelson, Carper, Hatch, Grassley (proxy), Kyl (proxy), Crapo, 
Roberts, Enzi, Cornyn (proxy), Coburn (proxy), Thune, and Burr 
(proxy). Nays: Rockefeller (proxy), Schumer, Stabenow, 
Menendez, Cardin, and Snowe (proxy). Separately, the Committee 
on Ways and Means in the House of Representatives approved the 
draft implementing legislation and draft SAA, as amended, on 
July 7, 2011, by a roll call vote of 22 ayes, 14 nays.

6. Formal submission of the agreement and implementing legislation

    When the President formally submits a trade agreement to 
Congress under section 2105 of the Act, the President must 
include in the submission the final legal text of the 
agreement, together with implementing legislation, an SAA 
describing regulatory and other changes to implement the 
agreement, a statement setting forth the reasons of the 
President regarding how and to what extent the agreement makes 
progress in achieving the applicable purposes, policies, 
priorities, and objectives set forth in the Act, and a 
statement setting forth the reasons of the President regarding 
how the agreement serves the interests of U.S. commerce. The 
implementing legislation is introduced in both Houses of 
Congress on the day it is submitted by the President and is 
referred to committees with jurisdiction over its provisions.
    On April 8, 2008, President Bush transmitted to Congress 
the final text of the Agreement, the implementing legislation, 
the SAA and other supporting information under section 2105 of 
the Act. The bill was introduced that same day by Mr. Reid, for 
himself, Mr. Grassley and Mr. McConnell. That bill was not 
considered by the Senate.
    On October 3, 2011, President Obama transmitted to Congress 
the final text of this Agreement, the implementing legislation, 
the SAA, and the other supporting information required under 
section 2105 of the Act. That same day, Mr. Baucus, for 
himself, Mr. Hatch and Mr. McConnell introduced the bill as S. 
1641. The legislation was also introduced that same day in the 
House of Representatives (H.R. 3078).
    S. 1641 is substantially the same as the draft legislation 
considered by the Committee during the open executive session 
on July 7, 2011. S. 1641, however, does not contain the 
provisions of the draft legislation extending the GSP program. 
Those provisions were included in separate legislation, H.R. 
2832, which the House and Senate approved and the President 
signed into law on October 21, 2011.
    To qualify for TPA procedures, the implementing legislation 
itself must contain provisions formally approving the agreement 
and the SAA. And, as noted above, the implementing legislation 
must contain only those provisions necessary or appropriate to 
implement the Agreement. The implementing bill reported here--
which approves the Agreement and the accompanying SAA and 
contains provisions necessary or appropriate to implement the 
Agreement into U.S. law--was referred to the Senate Committee 
on Finance.

7. Committee and floor consideration

    When the requirements of the Act are satisfied, 
implementing revenue bills, such as the United States-Colombia 
Trade Promotion Agreement Implementation Act, are subject to 
the legislative procedures of section 151 of the Trade Act of 
1974. The following schedule for congressional consideration 
applies under these procedures:
    (i) House committees have up to 45 calendar days in session 
in which to report the bill; any committee which does not do so 
in that period will be automatically discharged from further 
consideration.
    (ii) A vote on final passage by the House must occur on or 
before the 15th calendar day in session after the committees 
report the bill or are discharged from further consideration.
    (iii) Senate committees must act within 15 calendar days in 
session of receiving the implementing revenue bill from the 
House or within 45 calendar days in session of Senate 
introduction of the implementing bill, whichever is later, or 
they will be discharged automatically.
    (iv) The full Senate then must vote within 15 calendar days 
in session on the implementing bill.
    Once the implementing bill has been formally submitted by 
the President and introduced, no amendments to the bill are in 
order in either House of Congress. Floor debate in each House 
is limited to no more than 20 hours, to be equally divided 
between those favoring the bill and those opposing the bill.
    The Committee on Finance met in open executive session on 
October 11, 2011, to consider favorably reporting S. 1641. At 
the meeting, the Committee favorably reported S. 1641 without 
amendment by roll call vote of 18 ayes, 6 nays. Ayes: Baucus, 
Conrad (proxy), Bingaman, Kerry, Wyden, Cantwell, Nelson, 
Carper, Hatch, Grassley (proxy), Kyl (proxy), Crapo, Roberts, 
Enzi, Cornyn (proxy), Coburn (proxy), Thune, and Burr (proxy). 
Nays: Rockefeller (proxy), Schumer (proxy), Stabenow, Menendez, 
Cardin, and Snowe (proxy). The Committee on Ways and Means in 
the House of Representatives favorably reported the House 
version of the legislation, H.R. 3078, on October 5, 2011, by a 
roll call vote of 24 ayes, 12 nays.
    The House passed H.R. 3078 on October 12, 2011, by a roll 
call vote of 262 ayes, 167 nays. On the same day, the Senate 
passed H.R. 3078 by a roll call vote of 66 ayes, 33 nays. 
President Barack H. Obama signed H.R. 3078 into law on October 
21, 2011 (Pub. L. 112-42).

                    C. Trade Relations With Colombia


1. United States-Colombia trade

    Colombia ranks 20th among U.S. export markets and 25th 
among foreign exporters to the United States. U.S. exports to 
Colombia totaled $12 billion in 2010, while U.S. imports 
totaled $15.7 billion. Major U.S. exports to Colombia include 
petroleum and coal products; agriculture and construction 
machinery; basic chemicals, resin, synthetic rubber and 
products; and general purpose machinery. Major U.S. imports 
from Colombia include oil and gas; nonferrous metal; fruits and 
tree nuts; petroleum and coal products; and coal and petroleum 
gases.

                      2010 U.S. EXPORTS TO COLOMBIA
------------------------------------------------------------------------
                   HTS Code Product                       Value in USD
------------------------------------------------------------------------
84--NUCLEAR REACTORS, BOILERS, MACHINERY ETC.; PARTS.      2,775,095,093
27--MINERAL FUEL, OIL ETC.; BITUMIN SUBST; MINERAL         2,248,909,618
 WAX.................................................
85--ELECTRIC MACHINERY ETC; SOUND EQUIP; TV EQUIP;           941,762,933
 PTS.................................................
29--ORGANIC CHEMICALS................................        815,928,838
39--PLASTICS AND ARTICLES THEREOF....................        615,912,331
90--OPTIC, PHOTO ETC, MEDIC OR SURGICAL INSTRMENTS           601,321,642
 ETC.................................................
87--VEHICLES, EXCEPT RAILWAY OR TRAMWAY, AND PARTS           487,850,013
 ETC.................................................
98--SPECIAL CLASSIFICATION PROVISIONS, NESOI.........        338,682,586
10--CEREALS..........................................        291,709,526
88--AIRCRAFT, SPACECRAFT, AND PARTS THEREOF..........        265,596,538
OTHER................................................      2,686,521,586
                                                      ------------------
    TOTAL............................................    12,069,290,704
------------------------------------------------------------------------
(Source: U.S. Department of Commerce, International Trade
  Administration)


                     2010 U.S. IMPORTS FROM COLOMBIA
------------------------------------------------------------------------
                   HTS Code Product                       Value in USD
------------------------------------------------------------------------
27--MINERAL FUEL, OIL ETC.; BITUMIN SUBST; MINERAL        10,486,082,491
 WAX.................................................
71--NAT ETC PEARLS, PREC ETC STONES, PR MET ETC; COIN      1,646,574,854
09--COFFEE, TEA, MATE & SPICES.......................        817,229,965
06--LIVE TREES, PLANTS, BULBS ETC.; CUT FLOWERS ETC..        561,772,687
08--EDIBLE FRUIT & NUTS; CITRUS FRUIT OR MELON PEEL..        268,996,013
99--SPECIAL IMPORT PROVISIONS, NESOI.................        211,862,018
39--PLASTICS AND ARTICLES THEREOF....................        154,885,668
62--APPAREL ARTICLES AND ACCESSORIES, NOT KNIT ETC...        139,536,356
21--MISCELLANEOUS EDIBLE PREPARATIONS................        126,133,674
61--APPAREL ARTICLES AND ACCESSORIES, KNIT OR CROCHET        120,464,249
OTHER................................................     11,611,819,555
                                                      ------------------
    TOTAL............................................     15,659,275,039
------------------------------------------------------------------------
(Source: U.S. Department of Commerce, International Trade
  Administration)

2. Tariffs and trade agreements

    Colombia acceded to the World Trade Organization (``WTO'') 
in 1995, with an average bound tariff rate of 42.8 percent for 
all goods (91.4 percent for agricultural goods and 35.4 percent 
for nonagricultural goods). In 2010, Colombia maintained an 
average applied tariff rate of more than 12.5 percent for all 
goods (17.2 percent for agricultural goods and 11.8 percent for 
nonagricultural goods). The United States, by contrast, 
provides duty-free treatment to most products from Colombia. In 
2010, more than 90 percent of imports from Colombia entered the 
United States duty free under our most-favored nation tariff 
rates and U.S. trade preference programs. Given that the 
Agreement will greatly reduce this existing tariff asymmetry, 
the U.S. International Trade Commission (``Commission'') found 
that the Agreement likely will result in a larger increase in 
U.S. exports to Colombia than in U.S. imports from Colombia.
    Colombia has FTAs in place with Canada, the Mercosur 
countries (including Brazil and Argentina), Mexico, Guatemala, 
El Salvador, Honduras, and Chile. It has signed FTAs with the 
European Union and the European Free Trade Association 
countries (Norway, Liechtenstein, Iceland, and Switzerland). It 
has also initiated FTA negotiations with South Korea, Japan, 
and Panama. Colombia has entered into bilateral investment 
agreements with Japan, Peru, Spain, and Switzerland.

3. U.S. International Trade Commission study

    In December 2006, the Commission released the results of 
its investigation (Investigation No. TA-2104-023) into the 
probable economic effect of the Agreement (USITC Pub. 3896). 
The Commission found that the expected growth in U.S. trade 
with Colombia under the Agreement would likely have a small but 
positive impact on the U.S. economy, predicting a $2.5 billion 
increase in U.S. gross domestic product. The Commission 
indicated, however, that these benefits may be tempered by the 
relatively small size of Colombia's economy, its small share of 
total U.S. trade, and its existing duty-free access to the U.S. 
market under ATPA.
    As noted above, the Commission also concluded that the 
Agreement likely will result in a much larger increase in U.S. 
exports to Colombia than in U.S. imports from Colombia. More 
specifically, it estimated that annual U.S. exports to Colombia 
will increase by $1.1 billion while annual U.S. imports from 
Colombia will increase by $487 million. It further estimated 
that the Agreement will increase U.S. exports of meat (beef and 
pork), grains, soybeans, soybean products, animal feeds, 
chemical, rubber, plastic products, machinery, electronics, and 
transportation equipment. It also estimated that the Agreement 
will result in a small increase of U.S. imports from Colombia 
of textiles and apparel, sugar, and cut flowers.
    With respect to services, the Commission concluded that 
U.S. service firms will benefit from improved market access, 
national treatment, and regulatory transparency under the 
Agreement. The Commission noted, however, that these benefits 
will be moderated by the relatively small size of Colombia's 
economy and the relatively small and domestically-focused 
nature of its service sector.

                      D. Overview of the Agreement


1. Background

    The Agreement establishes a bilateral free trade area that 
eliminates tariffs on trade between the United States and 
Colombia for all qualifying goods except sugar. The Agreement 
also liberalizes trade in services and contains provisions that 
address telecommunications, electronic commerce, intellectual 
property rights, labor, environment, government procurement, 
and investment issues. In addition, the Agreement contains 
provisions that promote bilateral consultation and cooperation, 
procedural and substantive due process, administrative and 
judicial review, transparency, and the rule of law. It also 
contains a mechanism for settling disputes that arise under the 
Agreement.
    As noted above, the Bush Administration and the bipartisan 
leadership of the U.S. Senate Committee on Finance and the U.S. 
House of Representatives Committee on Ways and Means reached an 
agreement on trade policy on May 10, 2007. The United States-
Colombia Trade Promotion Agreement incorporates the provisions 
of the May 10 agreement. This Agreement therefore includes the 
following provisions: (1) fully enforceable commitments by the 
Parties to adopt, maintain, and enforce the 5 core 
international labor standards incorporated in the 1988 
International Labor Organization Declaration on Fundamental 
Principles and Rights at Work; (2) fully enforceable 
commitments by the Parties to adopt, maintain, and enforce 
their obligations under certain common multilateral 
environmental agreements; (3) modifications to the intellectual 
property chapter that balance the need for access to medicines 
with patent protections for pharmaceutical products; (4) 
modifications to the government procurement chapter that allow 
the Parties to condition government contracts on adherence to 
core labor standards; (5) confirmation that the United States 
can prevent foreign companies from supplying services at U.S. 
ports if the United States deems such action necessary to 
protect our national security; and (6) confirmation that the 
Agreement accords foreign investors in the United States no 
greater substantive rights with regard to investor protections 
than U.S. investors in the United States.

2. Office of the U.S. Trade Representative summary of the agreement

    The Office of the U.S. Trade Representative prepared a 
summary of the Agreement that was included among the documents 
that the President transmitted to Congress on October 3, 2011. 
This summary was distributed to Members of the Committee to aid 
in their consideration of the implementing legislation, and it 
is reprinted below:

          THE UNITED STATES-COLOMBIA TRADE PROMOTION AGREEMENT


                        Summary of the Agreement

    This summary briefly describes key provisions of the United 
States-Colombia Trade Promotion Agreement (``Agreement'') that 
the United States has concluded with Colombia and represents an 
authoritative expression of Administration views regarding the 
interpretation of the Agreement both for purposes of U.S. 
international obligations and domestic law.

                                PREAMBLE

    The Preamble to the Agreement provides the Parties' 
underlying objectives in entering into the Agreement and 
provides context for the provisions that follow. It includes 
the following statement:
    ``AGREE that foreign investors are not hereby accorded 
greater substantive rights with respect to investment 
protections than domestic investors under domestic law where, 
as in the United States, protections of investor rights under 
domestic law equal or exceed those set forth in this 
Agreement''.
    This statement clarifies that, as stated in the Bipartisan 
Trade Promotion Authority Act of 2002, under the Agreement 
foreign investors in the United States are not to be accorded 
greater substantive rights with respect to investment 
protections than United States investors in the United States.

        CHAPTER ONE: INITIAL PROVISIONS AND GENERAL DEFINITIONS

    Section A of Chapter One sets out provisions establishing a 
free trade area and affirming the Parties' existing rights and 
obligations with respect to each other under the Marrakesh 
Agreement Establishing the World Trade Organization (WTO) and 
other agreements to which they are party.
    Section B defines certain terms that recur in various 
chapters of the Agreement.

      CHAPTER TWO: NATIONAL TREATMENT AND MARKET ACCESS FOR GOODS

    Chapter Two and its relevant annexes and appendices set out 
the Agreement's principal rules governing trade in goods. Each 
Party must treat products from the other Party in a non-
discriminatory manner, provide for the phase-out and 
elimination of tariffs on ``originating'' goods (as defined in 
Chapter Four) traded between the Parties, and eliminate a wide 
variety of non-tariff trade barriers that restrict or distort 
trade flows.
    Tariff Elimination. Chapter Two provides for the 
elimination of customs duties on originating goods traded 
between the Parties. Duties on most tariff lines covering 
industrial and consumer goods will be eliminated as soon as the 
Agreement enters into force. Duties on other goods, including 
all industrial goods, will be phased out over periods of up to 
10 years. Some agricultural goods will have longer periods for 
elimination of duties or be subject to other provisions, 
including, in some cases, the application of preferential 
tariff-rate quotas (TRQs). The General Notes to the U.S. and 
Colombia Schedules to Annex 2.3 include detailed provisions on 
staging of tariff reductions and application of TRQs for 
certain agricultural goods. The Chapter provides that the 
Parties may agree to speed up tariff phase-outs on a product-
by-product basis after the Agreement takes effect.
    Waiver of Customs Duties. The Parties may not adopt new 
duty waivers or expand existing duty waivers conditioned on the 
fulfillment of a performance requirement. Chapter Two defines 
the term ``performance requirements'' so as not to restrict a 
Party's ability to provide duty drawback on goods imported from 
the other Party.
    Temporary Admission. The Parties will provide duty-free 
temporary admission for certain products. Such items include 
professional equipment, goods for display or demonstration, and 
commercial samples. The Chapter also includes specific 
provisions on transit of vehicles and containers used in 
international traffic.
    Import/Export Restrictions, Fees, and Formalities. The 
Agreement clarifies that restrictions prohibited under the 
General Agreement on Tariffs and Trade (GATT) 1994 and this 
Agreement include export and import price requirements (except 
under antidumping and countervailing duty orders and 
undertakings) and import licensing conditioned on the 
fulfillment of a performance requirement. In addition, a Party 
must limit all fees and charges imposed on or in connection 
with importation or exportation to the approximate cost of 
services rendered. The United States will not apply its 
merchandise processing fee on imports of originating goods. 
Colombia will not require a person of the United States to have 
or maintain a relationship with a ``distributor'' as a 
condition for allowing the importation of a good.
    Distinctive Products. Colombia will recognize Bourbon 
Whiskey and Tennessee Whiskey as ``distinctive products'' of 
the United States, meaning Colombia will not permit the sale of 
any product as Bourbon Whiskey or Tennessee Whiskey unless it 
was manufactured in the United States in accordance with 
applicable laws and regulations.
    Committee on Trade in Goods. The Parties establish a 
Committee on Trade in Goods to consider matters arising under 
Chapters Two, Four (Rules of Origin and Origin Procedures), and 
Five (Customs Administration and Trade Facilitation). The 
functions of the Committee are to promote trade in goods 
between the Parties and address barriers to trade in goods and 
to provide advice and recommendations on trade capacity 
building with respect to matters those chapters cover.

Agriculture

    TRQs. Under Chapter Two, each government must administer 
TRQs in a manner that is transparent, non-discriminatory, 
responsive to market conditions, and minimally burdensome on 
trade. In addition, the Parties will make every effort to 
administer TRQs in a manner that allows importers to fully 
utilize import quotas. In addition, the Chapter provides that 
Parties may not condition application for, or utilization of, 
import licenses or quota allocations on the re-export of an 
agricultural good.
    Export Subsidies. Each Party will eliminate export 
subsidies on agricultural goods destined for the other Party. 
Under Article 2.16, no Party may introduce or maintain an 
export subsidy on agricultural goods destined for the other 
Party unless the exporting Party believes that a third country 
is subsidizing its exports to that other Party. In such a case, 
the exporting Party may initiate consultations with the 
importing Party to develop measures the importing Party may 
adopt to counteract such subsidies. If the importing Party 
agrees to such measures, the exporting Party must refrain from 
applying export subsidies to its exports of the good to the 
importing Party.
    Safeguards. Chapter Two sets out a transitional 
agricultural safeguard mechanism that allows a Party to impose 
a temporary additional duty on specified agricultural products 
if imports exceed an established volume ``trigger.'' The 
safeguard measure will remain in force until the end of the 
calendar year in which the measure applies. A Party may not 
apply an agricultural safeguard on a good after the date that 
the good is subject to duty-free treatment under the Party's 
Schedule to Annex 2.3 of the Agreement.
    A Party may not apply a safeguard measure to a good that is 
already the subject of a safeguard measure under either Chapter 
Eight (Trade Remedies) of the Agreement or Article XIX of GATT 
1994 and the WTO Agreement on Safeguards. All agricultural 
safeguard measures must be applied and maintained in a 
transparent manner and the Party applying such a measure must, 
on request, consult with the other Party concerning the 
application of the measure.
    Neither Party may impose safeguard duties pursuant to the 
WTO Agreement on Agriculture on originating goods.
    Sugar. The Agreement contains several unique features 
applicable to imports of sugar into the United States. First, 
imports under the TRQs provided for in the Agreement will be 
limited to the lesser of (i) the quantity established in the 
TRQ, or (ii) Colombia's trade surplus in specific sugar goods. 
(``Colombia's trade surplus'' is the amount by which Colombia's 
exports to all destinations exceed its imports from all sources 
in specified sugar and sweetener goods, except that Colombia's 
exports of sugar to the United States and its imports of high 
fructose corn syrup from the United States are not included in 
the calculation of its trade surplus). The aggregate quantities 
established for the TRQ start at 50,000 metric tons in the 
first year and go up to 60,500 metric tons by year 15 of the 
Agreement. After year 15, the quantities increase by 750 metric 
tons per year. Second, in contrast to how it will treat other 
commodities subject to TRQs, the United States will not 
eliminate its over-quota duty on sugar imports under the 
Agreement. Lastly, the Agreement includes a mechanism that 
allows the United States, at its option, to provide some form 
of alternative compensation to Colombian exporters in place of 
imports of sugar in any given year.
    Additional Provisions. Chapter Two provides for the 
creation of a Committee on Agricultural Trade. The Committee 
will be established within 180 days after the date the 
Agreement enters into force and will provide a forum for 
promoting cooperation in the implementation and administration 
of the Agreement, as well as for consultations on matters 
related to the agricultural provisions of the Agreement. In 
addition, the Chapter provides that the Parties will consult on 
and review the operation of the Agreement as it relates to 
trade in chicken nine years after the Agreement enters into 
force.

                  CHAPTER THREE: TEXTILES AND APPAREL

    Tariff Elimination. Chapter Three provides for duties on 
all originating textile or apparel goods to be eliminated on 
the date the Agreement enters into force.
    Safeguards. The Chapter also establishes a transitional 
safeguard procedure for textile and apparel goods, under which 
an importing Party may temporarily impose additional duties up 
to the level of the normal trade relations (most-favored-
nation) (NTR(MFN)) duty rates on imports of textile or apparel 
goods that cause, or threaten to cause, serious damage to a 
domestic industry as a result of the elimination or reduction 
of duties under the Agreement. An importing Party may impose a 
textile safeguard measure only once on the same textile or 
apparel good. The measure may not be in place for more than two 
years, or three years if the measure is extended. The ability 
to impose or maintain textile safeguards lapses five years 
after the Agreement enters into force. A Party may not apply a 
textile safeguard measure to a good while the good is subject 
to a safeguard measure under (i) Chapter Eight (Trade 
Remedies), or (ii) Article XIX of the GATT 1994 and the WTO 
Agreement on Safeguards.
    A Party imposing a safeguard measure under Chapter Three 
must provide the exporting Party with mutually agreed 
compensation in the form of trade concessions for textile or 
apparel goods that have a value substantially equivalent to the 
increased duties resulting from application of the safeguard 
measure. If the Parties cannot agree on compensation, the 
exporting Party may raise duties on any goods from the 
importing Party in an amount that has a value substantially 
equivalent to the increased duties resulting from application 
of the safeguard measure.
    Rules of Origin and Related Matters. A textile or apparel 
good will generally qualify as an ``originating good'' eligible 
to receive preferential treatment under the Agreement only if 
all processing from the yarn stage to the final product (e.g., 
yarn-spinning, fabric production, cutting, and assembly) takes 
place in the United States, Colombia, or both, or if there is 
an applicable change in tariff classification under the 
specific rules of origin contained in Annex 3-A of the 
Agreement.
    Chapter Three sets out special rules for determining 
whether a textile or apparel good is an ``originating good,'' 
including a de minimis exception for non-originating yarns or 
fibers, a process for designating inputs not available in 
commercial quantities, a rule for treatment of sets, an 
exception for use of certain nylon filament yarn, and 
consultation provisions.
    The de minimis rule applies to goods that ordinarily would 
not be considered originating goods because certain of their 
fibers or yarns do not undergo an applicable change in tariff 
classification. Under the rule, the Parties will consider a 
good to be ``originating'' if those fibers or yarns constitute 
ten percent or less of the total weight of the component of the 
good that determines origin. This special rule does not apply 
to goods containing elastomeric yarns in the component of the 
good that determines the classification.
    Annex 3-B of the Agreement sets out a list of fabrics, 
yarns, and fibers that the Parties have determined are not 
available in commercial quantities in a timely manner from 
producers in the United States and Colombia. A textile or 
apparel good that includes the fabrics, yarns, or fibers 
included in this list will be treated as if it is 
``originating'' for purposes of the specific rules of origin in 
Annex 3-A of the Agreement, regardless of the actual origin of 
those inputs. Chapter Three establishes procedures under which 
the United States will determine whether additional fabrics, 
yarns, or fibers are not available in commercial quantities in 
the United States and Colombia. The United States may also 
remove a fabric, yarn, or fiber from the list if it determines 
that the fabric, yarn, or fiber has become available in 
commercial quantities.
    Customs Cooperation. In Chapter Three, the Parties commit 
to cooperate in enforcing their laws related to trade in 
textile and apparel goods, to ensure the accuracy of claims of 
origin, and to prevent circumvention of the Parties' laws or 
agreements relating to trade in textile and apparel goods. The 
Chapter also provides that, under certain circumstances, the 
exporting Party must conduct a verification to determine that a 
claim of origin is accurate, or to determine compliance with 
relevant laws. A verification may include visits to the 
premises of the exporter or producer of the goods in question. 
If there is insufficient information to make the relevant 
determination, or if an enterprise provides incorrect 
information, the importing Party may take appropriate action, 
which may include denying application of preferential tariff 
treatment or denying entry to the goods in question. Further, 
either Party may convene consultations to resolve technical or 
interpretive issues arising with respect to customs cooperation 
or may request technical assistance from the other Party in 
implementing the Chapter's customs cooperation provisions.
    Duty Free Treatment for Certain Goods. The United States 
and Colombia will provide duty-free treatment for goods that 
both Parties may agree qualify as handmade, hand-loomed, or 
traditional folklore goods.

          CHAPTER FOUR: RULES OF ORIGIN AND ORIGIN PROCEDURES

    To benefit from various trade preferences provided under 
the Agreement, including reduced duties, a good must qualify as 
an ``originating'' good under the rules of origin set out in 
Chapter Four and Annex 4.1. These rules ensure that the 
preferential tariff treatment and other benefits of the 
Agreement accrue primarily to firms or individuals that produce 
or manufacture goods in the Parties' territories.
    Key Concepts. Chapter Four provides general criteria under 
which a good may qualify as ``originating:''
           When the good is wholly obtained or produced 
        entirely in Colombia, the United States, or both 
        countries (e.g., crops harvested or minerals extracted 
        in the United States); or
           When the good is produced entirely in 
        Colombia, the United States, or both countries and: (1) 
        is manufactured or assembled from non-originating 
        materials that undergo a specified change in tariff 
        classification in Colombia, the United States, or both 
        countries; or (2) meets any applicable ``regional value 
        content'' requirement (see below); and (3) satisfies 
        all other requirements of Chapter Four, including Annex 
        4.1, or Annex 3-A; or
           When the good is produced entirely in 
        Colombia, the United States, or both countries, 
        exclusively from ``originating'' materials.
    De Minimis. Even if a good does not undergo a specified 
change in tariff classification, it will be treated as an 
originating good if the value of non-originating materials that 
do not undergo the required tariff shift does not exceed 10 
percent of the adjusted value of the good, and the good 
otherwise meets the criteria of the Chapter. This de minimis 
exception does not apply to certain agricultural and textile 
goods.
    Regional Value Content. Some origin rules under the 
Agreement require that certain goods meet a regional value 
content test in order to qualify as ``originating,'' meaning 
that a specified percentage of the value of the good must be 
attributable to originating materials. In general, the 
Agreement provides two methods for calculating that percentage: 
(1) the ``build-down method'' (based on the value of non-
originating materials used); and (2) the ``build-up method'' 
(based on the value of originating materials used). The 
regional value content of certain automotive goods, however, 
must be calculated on the basis of the net cost of the good. 
Finally, accessories, spare parts, and tools delivered with a 
good are considered part of the material making up the good so 
long as these items are not separately classified or invoiced 
and their quantities and values are customary. The de minimis 
rule does not apply in calculating regional value content.
    Claims for Preferential Tariff Treatment. Under the 
Chapter, importers who wish to claim preferential tariff 
treatment for particular goods must be prepared to demonstrate, 
on the request of the importing Party's customs authority, that 
the goods are originating. A Party may only deny preferential 
treatment through a written determination that the claim is 
invalid as a matter of law or fact. The Chapter provides that, 
subject to certain conditions, a Party must allow for the 
filing of claims for preferential treatment and for seeking a 
refund of any excess duties paid up to one year after a good is 
imported. Chapter Four also provides that a Party will not 
penalize an importer if the importer promptly and voluntarily 
corrects an incorrect claim and pays any duties owed.
    Verification. Each Party must ensure that its customs 
authority is empowered to conduct verifications for purposes of 
determining whether a good is an originating good. Where an 
importing Party determines through a verification that an 
importer, exporter, or producer has engaged in a pattern of 
conduct in providing false or unsupported statements, 
declarations, or certifications that a good is an originating 
good, the Party may suspend preferential tariff treatment to 
identical goods from that importer, exporter, or producer until 
the importing Party determines that the importer, exporter, or 
producer is in compliance with the rules set out in the 
Chapter.
    Additional Rules. Chapter Four provides specific rules with 
respect to the treatment of (1) packing materials and 
containers; (2) indirect materials; (3) fungible goods; and (4) 
sets of goods for purposes of determining origin. The Chapter 
provides that a Party may not treat a good as originating if 
the good undergoes production or any operation in a third 
country other than being unloaded, reloaded, or preserved in 
good condition, or if it is shipped through a third country and 
does not remain under the control of customs authorities there.

      CHAPTER FIVE: CUSTOMS ADMINISTRATION AND TRADE FACILITATION

    Chapter Five establishes rules designed to encourage 
transparency, predictability, and efficiency in the operation 
of each Party's customs procedures and to provide for 
cooperation between the Parties on customs matters.
    General Principles. In Chapter Five, each Party commits to 
observe certain transparency obligations. Each Party must 
promptly publish its customs measures, including on the 
Internet, and, where possible, solicit public comments before 
amending its customs regulations. Each Party must also provide 
written advance rulings, on request, to its importers and to 
exporters and producers of the other Party, regarding whether a 
product qualifies as an ``originating'' good under the 
Agreement, as well as on other customs matters. In addition, 
each Party must guarantee importers access to both 
administrative and judicial review of customs decisions. The 
Parties must release goods from customs promptly and 
expeditiously clear express shipments. After the Agreement 
enters into force Colombia will have one year to comply with 
the Chapter's rules on release of goods; two years to comply 
with the Chapter's express shipments obligations and certain of 
its transparency obligations; and three years to comply with 
the Chapter's requirement to provide advance rulings.
    Cooperation. Chapter Five also is designed to enhance 
customs cooperation. The Parties are encouraged to give each 
other advance notice of customs developments likely to affect 
the Agreement. The Chapter calls for the Parties to cooperate 
in securing compliance with each other's customs measures 
related to the implementation and operation of the provisions 
of the Agreement governing importations and exportations. It 
includes specific provisions requiring the Parties to share 
customs information where a Party has a reasonable suspicion of 
unlawful activity relating to its laws and regulations 
governing importations.

            CHAPTER SIX: SANITARY AND PHYTOSANITARY MEASURES

    Chapter Six defines the Parties' obligations to each other 
regarding sanitary and phytosanitary (SPS) measures. It 
reflects the Parties' understanding that implementation of 
existing obligations under the WTO Agreement on the Application 
of Sanitary and Phytosanitary Measures (SPS Agreement) is a 
shared objective. Nothing in the Agreement imposes new 
limitations on the United States in terms of maintaining high 
safety and inspection standards.
    Key Concepts. SPS measures are laws or regulations that 
protect human, animal, or plant life or health from certain 
risks, including plant- and animal-borne pests and diseases, 
additives, contaminants, toxins, or disease-causing organisms 
in food and beverages.
    Cooperation. Under Chapter Six, the Parties will establish 
an SPS Committee consisting of relevant trade and regulatory 
officials. The objectives of the Committee are to (i) enhance 
the implementation by each Party of the WTO SPS Agreement; (ii) 
assist each Party to protect human, animal, or plant life or 
health; (iii) enhance consultation and cooperation between the 
Parties on SPS matters; and (iv) address SPS measures affecting 
trade between the Parties. The Committee will also provide a 
forum for enhancing mutual understanding of each Party's SPS 
measures and the regulatory processes that relate to those 
measures; consulting on SPS matters that may affect trade 
between the Parties; and consulting on issues, agendas, and 
positions for meetings of certain international organizations 
that address SPS matters.
    Dispute Settlement. No Party may invoke the Agreement's 
dispute settlement procedures for a matter arising under 
Chapter Six. Instead, any dispute between the Parties involving 
an SPS measure must be resolved through the WTO.

               CHAPTER SEVEN: TECHNICAL BARRIERS TO TRADE

    Chapter Seven builds on WTO rules related to technical 
barriers to trade to promote transparency, accountability, and 
cooperation between the Parties on regulatory issues.
    Key Concepts. The term ``technical barriers to trade'' 
(TBT) refers to barriers that may arise in preparing, adopting, 
or applying voluntary product standards, mandatory product 
standards (``technical regulations''), and procedures used to 
determine whether a particular good meets such standards, i.e., 
``conformity assessment'' procedures.
    International Standards. The principles articulated in the 
WTO TBT Committee's Decision on Principles for the Development 
of International Standards, Guides and Recommendations 
emphasize the need for openness and consensus in the 
development of international standards. Under Chapter Seven, 
the Parties will apply these principles when determining 
whether an international standard exists and consult on 
pertinent matters under consideration by relevant international 
or regional bodies.
    Cooperation. In Chapter Seven, the Parties establish a 
Committee on Technical Barriers to Trade through which the 
Parties will cooperate to reduce technical barriers and improve 
market access. The Committee's specific functions will include: 
(i) enhancing cooperation in the development and improvement of 
standards, technical regulations, and conformity assessment 
procedures; (ii) facilitating sectoral cooperation between 
governmental and non-governmental conformity assessment bodies; 
(iii) exchanging information on developments in non-
governmental, regional, and multilateral fora engaged in 
activities related to standards, technical regulations, and 
conformity assessment procedures; and (iv) consulting, at a 
Party's request, on any matter arising under the Chapter.
    Conformity Assessment. Chapter Seven provides for a 
dialogue between the Parties on ways to facilitate the 
acceptance of conformity assessment results. Each Party will 
recognize conformity assessment bodies in the territory of the 
other Party on terms no less favorable than it accords 
conformity assessment bodies in its own territory.
    Transparency. Chapter Seven contains various transparency 
obligations, such as requiring each Party to: (i) allow persons 
of the other Party to participate in the development of 
technical regulations, standards, and conformity assessment 
procedures on a non-discriminatory basis; (ii) transmit 
regulatory proposals notified under the WTO Agreement on 
Technical Barriers to Trade directly to the other Party; (iii) 
describe in writing the objectives of and reasons for the 
proposed technical regulations or conformity assessment 
procedure; and (iv) consider comments on such proposals and 
respond in writing to significant comments it receives. Each 
Party must implement the Chapter's transparency provisions as 
soon as practicable, and no later than three years after the 
Agreement enters into force.

                     CHAPTER EIGHT: TRADE REMEDIES

    Safeguards. Chapter Eight establishes a safeguard procedure 
that will be available to aid domestic industries that sustain 
or are threatened with serious injury due to increased imports 
resulting from tariff reduction or elimination under the 
Agreement. The Chapter does not affect the Parties' rights or 
obligations under the WTO's safeguard provisions (global 
safeguards) or under other WTO trade remedy rules.
    In Chapter Eight, each Party is authorized to impose 
temporary duties on an imported originating good if, as a 
result of the reduction or elimination of a duty under the 
Agreement, the good is being imported in such increased 
quantities and under such conditions as to constitute a 
substantial cause of serious injury, or threat of serious 
injury, to a domestic industry producing a ``like'' or 
``directly competitive'' good.
    A safeguard measure may be applied on a good only during 
the Agreement's ``transition period'' for phasing out duties. A 
safeguard measure may take one of two forms--a temporary 
increase in duties to NTR (MFN) levels or a temporary 
suspension of duty reductions called for under the Agreement. A 
Party may not impose a safeguard measure under Chapter Eight 
more than once on any good. A safeguard measure may be in place 
for an initial period of up to two years. A Party may extend a 
measure for up to an additional two years, if it determines 
that the industry is adjusting and the measure remains 
necessary to facilitate adjustment and prevent or remedy 
serious injury. If a measure lasts more than one year, the 
Party must scale it back at regular intervals.
    If a Party imposes a safeguard measure, that Party must 
provide offsetting trade compensation to the other Party whose 
goods are subject to the measure. If the Parties cannot agree 
on the amount or nature of the compensation, the exporting 
Party may unilaterally suspend ``substantially equivalent'' 
trade concessions that it has made to the importing Party.
    Global Safeguards. Each Party maintains its right to take 
action against imports from all sources under Article XIX of 
GATT 1994 and the WTO Agreement on Safeguards. A Party may 
exclude imports of an originating good from the other Party 
from a global safeguard measure if those imports are not a 
substantial cause of serious injury or do not create a threat 
of serious injury. A Party may not apply a safeguard measure 
under Chapter Eight at the same time that it applies a 
safeguard measure on the same good under the WTO Agreement on 
Safeguards.
    Antidumping and Countervailing Duties. The Parties confirm 
that each retains its rights and obligations under the WTO 
Agreement relating to the application of antidumping and 
countervailing duties. Antidumping and countervailing duty 
measures may not be challenged under the Agreement's dispute 
settlement procedures.

                  CHAPTER NINE: GOVERNMENT PROCUREMENT

    Under Chapter Nine each Party must apply fair and 
transparent procurement procedures and rules and each 
government and its procuring entities are prohibited from 
discriminating in purchasing practices against goods, services, 
and suppliers from the other Party. The rules of Chapter Nine 
are broadly based on the rules of the WTO Agreement on 
Government Procurement.
    General Principles. Chapter Nine establishes a basic rule 
of ``national treatment,'' meaning that each Party's 
procurement rules and the entities applying those rules must 
treat goods, services, and suppliers of such goods and services 
from the other Party in a manner that is ``no less favorable'' 
than their domestic counterparts. Parties are also barred from 
discriminating against locally established suppliers on the 
basis of foreign affiliation or ownership. Chapter Nine also 
provides rules aimed at ensuring a fair and transparent 
procurement process.
    Coverage and Thresholds. Chapter Nine applies to purchases 
and other means of obtaining goods and services valued above 
certain dollar thresholds by those government departments, 
agencies, and enterprises listed in each Party's schedule. 
Specifically, the Chapter applies to procurements by listed 
agencies of the ``central government,'' which for the United 
States is the federal government, of goods and services valued 
at $64,786 or more and construction services valued at 
$7,407,000 or more. The equivalent thresholds for purchases by 
listed ``sub-central'' government entities (i.e., 
``Gobernaciones'' for Colombia and U.S. state government 
agencies) are $526,000 and $7,407,000, for goods and services 
and construction services, respectively. The Chapter's 
thresholds for other covered entities are either $250,000 or 
$593,000 for goods and services, and $7,407,000 for 
construction services. The thresholds (other than the $250,000 
threshold for other covered entities) are subject to adjustment 
every two years on January 1, with the next adjustment set for 
January 1, 2012. With respect to construction services, during 
the three-year period following the date of entry into force of 
the Agreement, Colombia may apply a threshold of $8,000,000 
with respect to all three types of entities. The Agreement also 
provides that certain Colombian telecommunications and electric 
utilities that would not otherwise be covered by the Agreement 
must comply with the national treatment non-discrimination 
obligations in making purchases.
    Transparency. Chapter Nine establishes rules designed to 
ensure transparency in procurement procedures. Each Party must 
publish its laws, regulations, and other measures governing 
procurement, along with any changes to those measures. 
Procuring entities must publish notices of procurement 
opportunities in advance. The Chapter also lists minimum 
information that such notices must include.
    Tendering Rules. Chapter Nine provides rules for setting 
deadlines on ``tendering'' (bidding on government contracts). 
Procuring entities must give suppliers all the information they 
need to prepare tenders, including the criteria that procuring 
entities will use to evaluate tenders. Entities must also, 
where appropriate, base their technical specifications (i.e., 
detailed descriptions of the goods or services to be procured) 
on performance-oriented criteria and international standards. 
Chapter Nine provides that procuring entities may not write 
technical specifications with the purpose or effect of creating 
an unnecessary obstacle to trade between the Parties while 
clarifying that an entity may adopt technical specifications to 
promote environmental conservation. The Chapter also clarifies 
that an entity may adopt technical specifications that require 
suppliers to comply with generally applicable laws regarding 
fundamental principles and rights at work and acceptable 
conditions of work with respect to minimum wages, hours of 
work, and occupational safety and health in the territory where 
they make the product or perform the service that the entity 
will purchase. It also sets out the circumstances under which 
procuring entities are allowed to use limited tendering, i.e., 
award a contract to a supplier without opening the procurement 
to all interested suppliers.
    Award Rules. Chapter Nine provides that to be considered 
for an award, a tender must be submitted by a qualified 
supplier. The tender must meet the criteria set out in the 
tender documentation, and procuring entities must base their 
award of contracts on those criteria. Procuring entities must 
publish information on awards, including the name of the 
supplier, a description of the goods or services procured, and 
the value of the contract. Chapter Nine also calls for each 
Party to ensure that suppliers may bring challenges against 
procurement decisions before independent reviewers.
    Additional Provisions. The provisions in Chapter Nine build 
on the anti-corruption provisions of Chapter Nineteen 
(Transparency), including by requiring each Party to maintain 
procedures to declare suppliers that have engaged in fraudulent 
or other illegal actions in relation to procurement ineligible 
for participation in the Party's procurement. It establishes 
procedures under which a Party may modify its coverage under 
the Chapter, such as when a Party privatizes an entity whose 
purchases are covered under the Chapter. It also provides that 
Parties may adopt or maintain measures necessary to protect: 
(1) public morals, order, or safety; (2) human, animal, or 
plant life or health, including environmental measures 
necessary to protect human, animal, or plant life or health; or 
(3) intellectual property. Parties may also adopt measures 
relating to goods or services of handicapped persons, 
philanthropic institutions, or prison labor.

                        CHAPTER TEN: INVESTMENT

    Chapter Ten establishes rules to protect investors from one 
Party against wrongful or discriminatory government actions 
when they invest or attempt to invest in the other Party's 
territory. The Chapter's provisions reflect traditional 
standards incorporated in earlier U.S. bilateral investment 
treaties, previous trade agreements, and customary 
international law.
    Key Concepts. Under Chapter Ten, the term ``investment'' 
covers all forms of investment, including enterprises, 
securities, certain forms of debt, intellectual property 
rights, licenses, and certain contracts. The Chapter covers 
both investments existing when the Agreement enters into force 
and future investments. The term ``investor of a Party'' 
encompasses U.S. and Colombian nationals as well as firms 
(including branches) established in one of the Parties.
    General Principles. Under the Agreement, investors enjoy 
six basic protections: (1) the right to non-discriminatory 
treatment relative both to domestic investors and investors of 
non-Parties; (2) limits on imposition by the host Party of 
``performance requirements;'' (3) the right to free transfer of 
funds related to an investment; (4) protection from 
expropriation except when done in conformity with customary 
international law; (5) the right to the minimum standard of 
treatment of aliens in accordance with customary international 
law; and (6) the right to hire key managerial personnel without 
regard to nationality. (As to this last protection, a Party may 
require that a majority of the board of directors be of a 
particular nationality, as long as this does not prevent the 
investor from controlling its investment.)
    Sectoral Coverage and Non-Conforming Measures. With the 
exception of investments in or by regulated financial 
institutions (which are treated in Chapter Twelve), Chapter Ten 
generally applies to all sectors, including service sectors. 
However, each Party negotiated a limited list, in in Annexes I 
and II, of exemptions from the Chapter's obligations relating 
to national treatment, NTR (MFN), performance requirements, or 
senior management and boards of directors (``non-conforming 
measures''). Annex I contains each Party's list of existing 
non-conforming measures at the central and regional levels of 
government. The United States has scheduled an exemption from 
all of the aforementioned obligations for all existing state 
measures. All existing local measures are exempted from those 
obligations for both Parties without the need to be listed. If 
a Party liberalizes any of these non-conforming Annex I 
measures, it must thereafter maintain the measure at least at 
that level of openness. In Annex II, each Party has listed 
sectors or activities in which it reserves the right to adopt 
or maintain future non-conforming measures. (Annexes I and II 
also include exemptions from Chapter Eleven (Cross-Border Trade 
in Services). See below).
    Investor-State Disputes. Chapter Ten provides a mechanism 
for an investor of a Party to submit to binding international 
arbitration a claim for damages against the other Party. The 
investor may assert that the Party has breached a substantive 
obligation under the Chapter or that the Party has breached an 
``investment agreement'' with, or an ``investment 
authorization'' granted to, the investor or a covered 
investment that the investor owns or controls. ``Investment 
agreements'' and ``investment authorizations'' are arrangements 
between an investor and a host government based on contracts 
and authorizations, respectively. These terms are defined in 
Chapter Ten.
    Chapter Ten affords public access to information on 
investor-State arbitrations conducted pursuant to the 
Agreement. For example, Chapter Ten requires that hearings be 
generally open to the public and key documents be publicly 
available, with exceptions for confidential information, 
including confidential business information. The Parties also 
authorize tribunals to accept amicus submissions from the 
public. In addition, the Chapter includes provisions similar to 
those used in U.S. courts to dispose quickly of claims a 
tribunal finds to be frivolous. Finally, within three years 
after the Agreement enters into force the Parties will consider 
whether to establish an appellate body, or similar mechanism, 
to review arbitral awards rendered by tribunals under the 
Chapter.
    Chapter Ten provides that, ``except in rare 
circumstances,'' nondiscriminatory regulatory actions designed 
and applied to meet legitimate public welfare objectives, such 
as public health, safety, and the environment, are not indirect 
expropriations.
    The Agreement does not require the United States to give 
Colombian investors greater substantive rights that U.S. 
companies already enjoy in the United States.

             CHAPTER ELEVEN: CROSS-BORDER TRADE IN SERVICES

    Chapter Eleven governs measures affecting cross-border 
trade in services between the Parties. Certain provisions also 
apply to measures affecting investments to supply services.
    Key Concepts. Under the Agreement, cross-border trade in 
services covers supply of a service:
           from the territory of one Party into the 
        territory of the other Party (e.g., electronic delivery 
        of services from the United States to Colombia);
           in the territory of a Party by a person of 
        that Party to a person of the other Party (e.g., a 
        Colombian company provides services to U.S. visitors in 
        Colombia); and
           by a national of a Party in the territory of 
        the other Party (e.g., a U.S. lawyer provides legal 
        services in Colombia).
    Chapter Eleven should be read together with Chapter Ten 
(Investment), which establishes rules pertaining to the 
treatment of service firms that choose to provide their 
services through a local presence, rather than cross-border. 
Chapter Eleven applies where, for example, a service supplier 
is temporarily present in a territory of a Party and does not 
operate through a local investment.
    General Principles. Among Chapter Eleven's core obligations 
are requirements to provide national treatment and NTR (MFN) 
treatment to service suppliers of the other Party. Thus, each 
Party must treat service suppliers of the other Party no less 
favorably than its own suppliers or those of any other country. 
This commitment applies to state and local governments as well 
as the federal government. The Chapter's provisions apply to 
existing service suppliers as well as those who seek to supply 
services. The Parties are prohibited from requiring firms to 
establish a local presence as a condition for supplying a 
service on a cross-border basis. In addition, certain types of 
market access restrictions on the supply of services (e.g., 
that limit the number of firms that may offer a particular 
service or that restrict or require specific types of legal 
structures or joint ventures with local companies in order to 
supply a service) are also barred. The Chapter's market access 
rules apply both to services supplied on a cross-border basis 
and through a local investment.
    Sectoral Coverage and Non-Conforming Measures. Chapter 
Eleven applies across virtually all services sectors. The 
Chapter excludes financial services (which are addressed in 
Chapter Twelve), except that certain provisions of Chapter 
Eleven apply to investments in financial services that are not 
regulated as financial institutions and are covered by Chapter 
Ten (Investment). In addition, Chapter Eleven does not cover 
air transportation, although it does apply to specialty air 
services and aircraft repair and maintenance.
    Each Party has listed in Annexes I and II measures or 
sectors for which it negotiated exemptions from Chapter 
Eleven's core obligations (national treatment, NTR (MFN), local 
presence, and market access). Annex I contains the list of 
existing non-conforming measures at the central and regional 
level of government. The United States has scheduled an 
exemption from national treatment, NTR (MFN), and local 
presence for all existing state measures. Our coverage under 
the market access discipline is the same as our commitments 
under the WTO General Agreement on Trade in Services, with the 
right to take measures not inconsistent with those commitments. 
All existing local measures are exempted for both Parties 
without the need to be listed. However, once a Party 
liberalizes any of these non-conforming Annex I measures, it 
must thereafter maintain the measure at least at that level of 
openness. Each Party has listed in Annex II sectors or 
activities in which it reserves the right to adopt or maintain 
future non-conforming measures.
    Specific Commitments. Chapter Eleven includes a 
comprehensive definition of express delivery services under 
which each Party must provide national treatment, NTR (MFN) 
treatment, and additional benefits to express delivery services 
of the other Party. The Chapter provides that the Parties will 
try to maintain the level of market openness for express 
delivery services they provided on the date the Agreement was 
signed, and a Party may request consultations with the other if 
it believes the other Party is not maintaining that level of 
access. The Chapter also addresses the issue of postal 
monopolies directing revenues derived from monopoly postal 
services to confer an advantage on express delivery services. 
In addition, Colombia has committed to eliminate a requirement 
that has prevented U.S.-owned companies in Colombia from hiring 
the managers, professionals, and specialists of their choice 
for their operations in Colombia.
    Transparency and Domestic Regulation. Provisions on 
transparency and domestic regulation complement the core rules 
of Chapter Eleven. The transparency rules apply to the 
development and application of regulations governing services. 
The Chapter's rules on domestic regulation govern the operation 
of approval and licensing systems for service suppliers. Like 
the Chapter's market access rules, its provisions on 
transparency and domestic regulation cover services supplied 
both on a cross-border basis and through a local investment.
    Exclusions. Chapter Eleven does not apply to any service 
supplied ``in the exercise of governmental authority''--that 
is, a service that is provided on a non-commercial and non-
competitive basis. Chapter Eleven also does not apply to 
government subsidies. In addition, the Chapter makes clear that 
the Agreement does not impose any obligation on a Party with 
respect to its immigration measures, including admission or 
conditions of admission for temporary entry.

                   CHAPTER TWELVE: FINANCIAL SERVICES

    Chapter Twelve covers measures relating to the supply of 
financial services. It provides rules governing each Party's 
treatment of: (1) financial institutions of the other Party; 
(2) investors of the other Party, and their investments, in 
financial institutions; and (3) cross-border trade in financial 
services.
    Key Concepts. The Chapter defines a ``financial 
institution'' as any financial intermediary or other enterprise 
authorized to do business and regulated or supervised as a 
financial institution under the law of the Party where it is 
located. A ``financial service'' is any service of a financial 
nature, including, for example, insurance, banking, securities, 
asset management, financial information and data processing 
services, and financial advisory services.
    General Principles. Chapter Twelve's core obligations 
parallel those in Chapters Ten (Investment) and Eleven (Cross-
Border Trade in Services). Specifically, Chapter Twelve imposes 
rules requiring national treatment and NTR (MFN) treatment, 
prohibits certain quantitative restrictions on market access of 
financial institutions, and bars restrictions on the 
nationality of senior management. As appropriate, these rules 
apply to measures affecting financial institutions, investors 
and investments in financial institutions of the other Party, 
and services companies that are currently supplying and that 
seek to supply financial services on a cross-border basis. The 
rules do not apply to measures adopted or maintained by a Party 
relating to certain specified services and activities--for 
example, activities or services forming part of a public 
retirement plan or statutory system of social security--unless 
a Party allows its financial institutions to compete with a 
public entity or a financial institution to supply such 
services and activities. Provisions such as the prudential and 
monetary and exchange rate exceptions ensure that governments 
may continue to regulate the financial sector and to take 
action to ensure the stability and integrity of the financial 
system in a financial crisis.
    Non-Conforming Measures. Similar to Chapters Ten 
(Investment) and Eleven (Cross-Border Trade in Services), each 
Party has listed in an annex (Annex III) particular measures 
for which it negotiated exemptions from the Chapter's core 
obligations. Existing non-conforming U.S. state and local laws 
and regulations are exempted from these obligations. Once a 
Party, including a state or local government, liberalizes one 
of these non-conforming measures, however, it must, in most 
cases, maintain the measure at least at that new level of 
openness.
    Other Provisions. Chapter Twelve also includes provisions 
on regulatory transparency, ``new'' financial services, self-
regulatory organizations, and the expedited availability of 
insurance products.
    Relationship to Other Chapters. Measures that a Party 
applies to financial services suppliers of the other Party, 
other than regulated financial institutions, that make or 
operate investments in the Party's territory are covered 
principally by Chapter Ten (Investment) and certain provisions 
of Chapter Eleven (Cross-Border Trade in Services). In 
particular, the core obligations of Chapter Ten apply to such 
measures, as do the market access, transparency, and domestic 
regulation provisions of Chapter Eleven. Chapter Twelve 
incorporates by reference certain provisions of Chapter Ten, 
such as those relating to transfers and expropriation.

CHAPTER THIRTEEN: COMPETITION POLICY, DESIGNATED MONOPOLIES, AND STATE 
                              ENTERPRISES

    Recognizing that anticompetitive business conduct has the 
potential to restrict bilateral trade and investment, Chapter 
Thirteen calls for each government to proscribe such conduct. 
The Chapter also sets out basic procedural safeguards and rules 
ensuring against harmful conduct by government-designated 
monopolies and state enterprises.
    Competition Laws. Each Party must adopt or maintain laws 
prohibiting anticompetitive business conduct and to take 
appropriate action with respect to such conduct. Each Party 
must also maintain authorities responsible for enforcing its 
national competition laws. The Parties affirm that the 
enforcement policy of each Party's national competition 
authority is not to discriminate on the basis of nationality. 
It also obligates each Party to provide certain procedural 
protections for persons facing enforcement actions. Each Party 
will ensure that persons subject to sanctions or remedies for 
competition law violations will be provided a right to be heard 
and to present evidence, and to seek review by a court or 
independent tribunal.
    Designated Monopolies. There are specific rules governing 
instances in which a Party gives a private or national 
government-owned entity a monopoly to provide or purchase a 
good or service. In particular, the Party must ensure that the 
entity: (1) abides by the Party's obligations under the 
Agreement wherever it exercises authority delegated to it by 
the government in connection with the monopoly good or service; 
(2) purchases or sells the monopoly product in a manner 
consistent with commercial considerations; (3) does not 
discriminate against the other Party's investments, goods, or 
service suppliers in the purchase or sale of the monopoly 
product; and (4) does not engage in anticompetitive practices 
in markets outside its monopoly mandate that harm the other 
Party's investments.
    State Enterprises. Chapter Thirteen sets forth obligations 
regarding the Parties' responsibilities for ``state 
enterprises,'' i.e., enterprises owned or controlled by a 
Party. Each Party must ensure that its state enterprises accord 
non-discriminatory treatment in the sale of their products to 
the other Party's investments.
    Cooperation and Working Group. Chapter Thirteen provides 
for bilateral cooperation in relation to the enforcement of 
competition laws. In addition, the Parties will establish a 
working group to promote greater understanding and cooperation 
between the Parties with respect to the matters covered under 
the Chapter.
    Dispute Settlement. Many of the Chapter's provisions are 
not subject to the Agreement's dispute settlement procedures, 
including the provisions requiring a Party to adopt and enforce 
laws prohibiting anticompetitive business conduct and the 
provisions governing cooperation and consultations. The 
Chapter's rules addressing designated monopolies and state 
enterprises, however, may be enforced through the Agreement's 
State-to-State dispute settlement mechanism.

                  CHAPTER FOURTEEN: TELECOMMUNICATIONS

    Chapter Fourteen includes disciplines beyond those imposed 
under Chapters Ten (Investment) and Eleven (Cross-Border Trade 
in Services) on regulatory measures affecting 
telecommunications trade and investment between the Parties. It 
is designed to ensure that service suppliers of each Party have 
non-discriminatory access to public telecommunications networks 
in the territory of the other Party. In addition, each Party 
must regulate its major telecommunications suppliers in ways 
that will ensure a level playing field for new entrants. The 
Parties also seek to ensure that telecommunications regulations 
are set by independent regulators applying transparent 
procedures, and is designed to encourage adherence to 
principles of deregulation and technological neutrality.
    Key Concepts. Under Chapter Fourteen, a ``public 
telecommunications service'' is any telecommunications service 
that a Party requires to be offered to the public generally. 
The term includes voice and data transmission services. It does 
not include the offering of ``information services'' (e.g., 
services that enable users to create, store, or process 
information over a network). A ``major supplier'' is a company 
that, by virtue of its market position or control over certain 
facilities, can materially affect the terms of participation in 
the market.
    Competition. Chapter Fourteen establishes rules promoting 
effective competition in telecommunications services. It also 
provides flexibility to account for changes that may occur 
through new legislation or regulatory decisions. The Chapter 
includes commitments by each Party to:
           ensure that all service suppliers of the 
        other Party that seek to access or use a public 
        telecommunications network in the Party's territory can 
        do so on reasonable and non-discriminatory terms (e.g., 
        Colombia must ensure that its public phone companies do 
        not provide preferential access to Colombian banks or 
        Internet service providers, to the detriment of U.S. 
        competitors);
           give the other Party's telecommunications 
        suppliers, in particular, the right to interconnect 
        their networks with public networks in the Party's 
        territory;
           ensure that telecommunications suppliers of 
        the other Party enjoy the right to lease lines to 
        supplement their own networks or, alternatively, 
        purchase telecommunications services from domestic 
        suppliers and resell them in order to build a customer 
        base; and
           impose disciplines on the behavior of 
        ``major suppliers.''
    Regulation. The Chapter addresses key regulatory concerns 
that may create barriers to trade and investment in 
telecommunications services. In particular, each Party:
           will adopt procedures that will help ensure 
        that they maintain open and transparent 
        telecommunications regulatory regimes, including 
        requirements to publish interconnection agreements and 
        service tariffs;
           will require their telecommunications 
        regulators to resolve disputes between suppliers and 
        provide foreign suppliers the right to seek judicial 
        review of those decisions;
           may elect to deregulate telecommunications 
        services when competition emerges and certain standards 
        are met; and
           will avoid impeding telecommunications 
        suppliers from choosing technologies they consider 
        appropriate for supplying their services.

                  CHAPTER FIFTEEN: ELECTRONIC COMMERCE

    Chapter Fifteen establishes rules designed to prohibit 
discriminatory regulation of electronic trade in digitally 
encoded products such as computer programs, video, images, and 
sound recordings. The provisions in this and other recent U.S. 
trade agreements represent a major advance over previous 
international understandings on this subject.
    Customs Duties. Chapter Fifteen provides that a Party may 
not impose customs duties on digital products of the other 
Party transmitted electronically and will determine the customs 
value of an imported carrier medium bearing a digital product 
based on the value of the carrier medium alone, without regard 
to the value of the digital product stored on the carrier 
medium.
    Non-Discrimination. The Parties will apply the principles 
of national treatment and NTR (MFN) treatment to trade in 
electronically-transmitted digital products. Thus, a Party may 
not discriminate against electronically-transmitted digital 
products on the grounds that they have a nexus to another 
country, either because they have undergone certain specific 
activities (e.g., creation, production, first sale) there or 
are associated with certain categories of persons of the other 
Party or a non-Party (e.g., authors, performers, producers). 
Nor may a Party provide less favorable treatment to digital 
products that have a nexus to the other Party than it gives to 
like products that have a nexus to a third country. The non-
discrimination rules do not apply to non-conforming measures 
adopted under Chapters Ten (Investment), Eleven (Cross-Border 
Trade in Services), or Twelve (Financial Services).
    Additional Provisions. Chapter Fifteen contains additional 
provisions relating to authentication, online consumer 
protection, and paperless trade administration.

             CHAPTER SIXTEEN: INTELLECTUAL PROPERTY RIGHTS

    Chapter Sixteen complements and enhances existing 
international standards for the protection of intellectual 
property and the enforcement of intellectual property rights, 
consistent with U.S. law.
    General Provisions. In Chapter Sixteen the Parties commit 
to ratify or accede to several agreements on intellectual 
property rights, including, by the date the Agreement enters 
into force, the WIPO Copyright Treaty, the Brussels Convention 
Relating to the Distribution of Programme-Carrying Satellite 
Signals, and the WIPO Performances and Phonograms Treaty, and, 
within specified periods, the International Convention for the 
Protection of New Varieties of Plants, the Trademark Law 
Treaty, and the Patent Cooperation Treaty. The United States is 
already a party to these Agreements. With very limited 
exceptions, each Party commits to provide national treatment to 
the other Party's nationals with respect to the enjoyment and 
protection of the intellectual property rights covered by the 
Chapter.
    Trademarks and Geographical Indications. Each Party must 
protect trademarks and geographical indications, including by 
refusing protection or recognition of a geographical indication 
that is likely to cause confusion with a preexisting trademark. 
The Chapter provides that trademarks protection includes 
protection for collective marks and certification marks. Each 
Party must also establish an electronic system for applying 
for, registering, and maintaining trademarks, as well as an 
online database. (Colombia has one year from the date of entry 
into force of the Agreement to give effect to this provision.) 
Each Party must also provide efficient and transparent 
procedures governing applications to protect trademarks and 
geographical indications. Furthermore, each Party's Internet 
domain name management system must include a dispute resolution 
procedure to address trademark cyber-piracy.
    Copyright and Related Rights. Under Chapter Sixteen, the 
Parties must provide broad protection for copyright and related 
rights, affirming and building on rights set out in several 
international agreements. For instance, each Party must provide 
copyright protection for the life of the author plus 70 years 
(for works measured by a person's life). The Chapter also 
provides enhancements of the rights of copyright owners over 
digital copies of their works. Each Party must also provide a 
right of communication to the public, including the exclusive 
right to authorize making protected works available online. 
Each Party must also protect the rights of performers and 
producers of phonograms.
    To curb copyright piracy, government agencies of the 
Parties must use only legitimate computer software, setting an 
example for the private sector. The Chapter also includes 
provisions on anti-circumvention of effective technological 
measures, under which the Parties commit to prohibit tampering 
with technology used to protect copyrighted works. In addition, 
Chapter Sixteen sets out obligations with respect to the 
liability of Internet service providers in connection with 
copyright infringements that take place over their networks. 
Finally, recognizing the importance of satellite broadcasts, 
Chapter Sixteen provides that each Party will protect encrypted 
program-carrying satellite signals. It obligates the Parties to 
extend protection to the signals themselves, as well as to the 
content contained in the signals.
    Patents. Chapter Sixteen also includes a variety of 
provisions for the protection of patents. The Parties will make 
patents available for any invention, subject to limited 
exclusions. To guard against arbitrary revocation of patents, 
each Party must limit the grounds for revoking a patent to the 
grounds that would have justified a refusal to grant the 
patent. Under Chapter Sixteen, each Party must make best 
efforts to process patent applications and marketing approval 
applications expeditiously. With respect to most products, a 
Party must adjust the patent term to compensate for 
unreasonable delays that occur while granting a patent. For 
pharmaceutical products, a Party may provide for such 
adjustments if there is an unreasonable delay in granting a 
patent or providing marketing approval for a product.
    Certain Regulated Products. Chapter Sixteen includes 
additional specific provisions relating to pharmaceuticals and 
agricultural chemicals. Among other things, the Chapter 
provides for the protection of test data and other data 
concerning safety or efficacy that a company submits in seeking 
marketing approval for such products by precluding other firms 
from relying on the data. It provides specific periods for such 
protection--normally five years for pharmaceuticals and ten 
years for agricultural chemicals. This means, for example, that 
during the period of protection, information that a company 
submits for approval of a new agricultural chemical product 
cannot be used without that company's consent in granting 
approval to market a new product. If a Party bases its decision 
to approve a pharmaceutical product for marketing in its 
territory on a marketing approval the other Party has granted 
for that product, and it approves the product within six months 
after the company applies for the approval in the Party, the 
period of test data protection will be counted from the date 
the other Party approved the product. The Chapter's rules 
governing test data protection for pharmaceutical products are 
subject to a public health exception in accordance with the 
Doha Declaration on the TRIPS Agreement and Public Health. The 
Parties must implement procedures for the expeditious 
adjudication of disputes concerning the validity or 
infringement of a patent, a transparent system to provide 
notice to a patent holder that another person is seeking to 
market an approved pharmaceutical product during the term of a 
patent, and sufficient time and opportunity for a patent holder 
to seek, prior to the marketing of an allegedly infringing 
product, available remedies for an infringing product.
    Public Health. Chapter Sixteen expresses the Parties' 
understanding that its obligations do not and should not 
prevent a Party from taking measures to protect public health, 
in accordance with the Doha Declaration on the TRIPS Agreement 
and Public Health, by promoting access to medicines for all.
    Enforcement Provisions. In Chapter Sixteen the Parties also 
assume obligations with respect to the enforcement of 
intellectual property rights in administrative, civil, and 
criminal proceedings, and at the border. For example, each 
Party, in determining damages in civil proceedings involving 
copyright infringement or trademark counterfeiting, must take 
into account the value of the legitimate goods as well as the 
infringer's profits, and must also provide for damages based on 
a fixed range (i.e., ``pre-established damages'') as an option 
that the right holder can elect instead of actual damages.
    Chapter Sixteen further provides that each Party's law 
enforcement agencies must have authority to seize suspected 
pirated and counterfeit goods, the equipment used to make or 
transmit them, and documentary evidence. Each Party must give 
its courts authority to order the forfeiture and/or destruction 
of such items. Chapter Sixteen also provides that each Party 
must apply criminal penalties against willful counterfeiting 
and piracy, including end-user piracy, on a commercial scale.
    Each Party must empower its law enforcement agencies to 
take ex officio enforcement action at the border against 
pirated or counterfeit goods without waiting for a formal 
complaint.
    Transition Periods. Most obligations in the Chapter take 
effect on the date the Agreement enters into force. However, 
Colombia may delay giving effect to certain specified 
obligations for periods ranging from one year to three years 
after that date.

                        CHAPTER SEVENTEEN: LABOR

    Chapter Seventeen sets out the Parties' commitments and 
undertakings regarding trade-related labor rights.
    Fundamental Labor Rights. Each Party commits to adopt and 
maintain in its statutes, regulations, and practice certain 
enumerated labor rights, as stated in the 1998 ILO Declaration 
on Fundamental Principles and Rights at Work and Its Follow Up. 
Specifically, these are (1) freedom of association; (2) the 
effective recognition of the right to collective bargaining; 
(3) the elimination of all forms of forced or compulsory labor; 
(4) the effective abolition of child labor and, for purposes of 
the Agreement, a prohibition on the worst forms of child labor; 
and (5) the elimination of discrimination in respect of 
employment and occupation. In order to establish a violation of 
this obligation, a Party must demonstrate that the other Party 
has failed to comply in a manner affecting trade or investment 
between the Parties. Neither Party may waive or otherwise 
derogate from its statutes or regulations implementing this 
obligation in a manner affecting bilateral trade or investment 
where the waiver or derogation would be inconsistent with one 
of the enumerated rights. For the United States, the Chapter's 
provisions regarding fundamental labor rights apply to federal 
law only.
    Effective Enforcement. Each Party commits not to fail to 
effectively enforce its labor laws on a sustained or recurring 
basis in a manner affecting trade or investment between the 
Parties. The Chapter defines ``labor laws'' to include laws 
directly related to the ILO fundamental labor rights, as well 
as laws providing for acceptable conditions of work with 
respect to minimum wages, hours of work, and occupational 
safety and health, and laws providing labor protections for 
children and minors, including a prohibition on the worst forms 
of child labor. For the United States, ``labor laws'' includes 
federal statutes and regulations addressing these areas, but it 
does not cover state or local labor laws.
    Procedural Guarantees. Each Party commits to afford 
procedural guarantees that ensure workers and employers have 
access to tribunals for the enforcement of its labor laws. To 
this end, each Party must ensure that proceedings before these 
tribunals are fair, equitable, and transparent and comply with 
due process of law. Decisions of such tribunals must be in 
writing, made publicly available, and based on information or 
evidence in respect of which the parties were offered the 
opportunity to be heard. In addition, hearings in such 
proceedings must be open to the public, except where the 
administration of justice otherwise requires. Each Party also 
commits to make remedies available to ensure the enforcement of 
its labor laws. Such remedies might include orders, fines, 
penalties, or temporary workplace closures.
    Dispute Settlement. Chapter Seventeen provides for 
cooperative consultations as a first step if a Party considers 
that the other Party is not complying with its obligations 
under the Chapter. The complaining Party may, after an initial 
60-day consultation period under Chapter Seventeen, invoke the 
Agreement's general dispute settlement mechanism by requesting 
additional consultations or a meeting of the Agreement's 
cabinet-level Free Trade Commission under the provisions of 
Chapter Twenty-One (Dispute Settlement). If the Commission is 
unable to resolve the dispute, the matter may be referred to a 
dispute settlement panel.
    Institutional Arrangements, Cooperation and Capacity 
Building. Chapter Seventeen establishes a cabinet-level Labor 
Affairs Council to oversee the Chapter's implementation and to 
provide a forum for consultations and cooperation on labor 
matters. Each Party must designate a contact point for 
communications with the other Party and the public regarding 
the Chapter. Each Party's contact point must provide 
transparent procedures for the submission, receipt, and 
consideration of communications from persons of a Party 
relating to the Chapter.
    The Parties also create a labor cooperation and capacity 
building mechanism through which the Parties will work together 
to address labor matters of common interest. In particular, the 
mechanism will assist the Parties to establish priorities for, 
and carry out, cooperation and capacity building activities 
relating to such topics as: the effective application of 
fundamental labor rights; legislation and practice relating to 
compliance with ILO Convention 182 on the worst forms of child 
labor; strengthening labor inspection systems and the 
institutional capacity of labor administrations and tribunals; 
mechanisms for supervising compliance with laws and regulations 
pertaining to working conditions; and the elimination of gender 
discrimination in employment.

                     CHAPTER EIGHTEEN: ENVIRONMENT

    Chapter Eighteen sets out the Parties' commitments and 
undertakings regarding environmental protection.
    General Principles. Each Party must strive to ensure that 
its environmental laws provide for and encourage high levels of 
environmental protection and continue to improve its respective 
levels of environmental protection. Each Party also commits not 
to waive or otherwise derogate from its environmental laws to 
weaken or reduce the levels of environmental protection in a 
manner affecting trade or investment between the Parties other 
than pursuant to a provision in its environmental law providing 
for waivers or derogations. Chapter Eighteen further includes 
commitments to enhance cooperation between the Parties in 
environmental matters and encourages the Parties to develop 
voluntary, market-based mechanisms as one means for achieving 
and sustaining high levels of environmental protection.
    Multilateral Environmental Agreements. The Parties 
recognize that certain multilateral environment agreements 
(MEAs) play an important role globally and domestically in 
protecting the environment. The Chapter includes a provision 
requiring each Party to adopt, maintain, and implement laws, 
regulations, and all other measures to fulfill its obligations 
under certain MEAs to which both governments are parties 
(``covered agreements''). To establish a violation of this 
obligation a Party must demonstrate that the other Party has 
failed to comply in a manner affecting trade or investment 
between the Parties.
    Chapter Eighteen provides that in the event of any 
inconsistency between a Party's obligations under the Agreement 
and a covered agreement, the Party must seek to balance its 
obligation under both agreements, but this will not preclude a 
Party from taking measures to comply with the covered agreement 
as long as the measure's primary purpose is not to impose a 
disguised restriction on trade.
    Effective Enforcement. Each Party commits not to fail to 
effectively enforce its environmental laws, and its laws, 
regulations, and other measures to fulfill its obligations 
under the covered agreements, on a sustained or recurring basis 
in a manner affecting trade or investment between the Parties. 
For the United States, ``environmental laws'' comprise federal 
environmental statutes and regulations promulgated under those 
statutes that are enforceable by action of the federal 
government.
    Procedural Matters. Each Party commits to make judicial, 
quasi-judicial, or administrative proceedings available to 
sanction or remedy violations of its environmental laws. Each 
Party must ensure that such proceedings are fair, equitable, 
and transparent, and, to this end, comply with due process of 
law and are open to the public, except where the administration 
of justice otherwise requires. Each Party must ensure that 
interested persons may request the Party's competent 
authorities to investigate alleged violations of its 
environmental laws and that those authorities duly consider 
such requests. Each Party must also make appropriate and 
effective remedies available for violations of its 
environmental laws. These remedies may include, for example, 
fines, injunctions, or requirements to take remedial action or 
pay for the cost of containing or cleaning up pollution.
    Environmental Performance: Each Party will encourage the 
development and use of flexible, voluntary, and incentive-based 
mechanisms for environmental protection, and will encourage the 
development and improvement of performance goals and indicators 
for measuring environmental performance as well as flexible 
means for achieving performance goals.
    Institutional Arrangements and Cooperation. Chapter 
Eighteen establishes a senior-level Environmental Affairs 
Council to oversee implementation of the Chapter. The Council 
will provide for the public to participate in its work, 
including by affording an opportunity at each Council meeting, 
unless the Parties otherwise agree, for the public to express 
views on how the Chapter is being implemented. The Council must 
also provide appropriate opportunities for the public to 
participate in the development and implementation of joint 
environmental activities, including those developed under a 
separate bilateral environmental cooperation agreement that the 
Parties have negotiated.
    Public Participation and Submissions. Each Party must 
provide for the receipt and consideration of submissions from 
persons of a Party on matters related to implementation of the 
Chapter. Each Party will also convene a national advisory 
committee to solicit views on matters related to the 
implementation of the Chapter. In addition, the Chapter 
provides that any person of a Party may file a submission with 
an independent secretariat asserting that a Party is failing to 
effectively enforce its environmental laws. The secretariat 
will review the submission according to specified criteria and 
in appropriate cases recommend to the Environmental Affairs 
Council that a factual record concerning the matter be 
developed. The secretariat will prepare a factual record if a 
member of the Environmental Affairs Council instructs it to do 
so. The Council will consider the record and, where 
appropriate, provide recommendations to an environmental 
cooperation commission that will be created under the related 
environmental cooperation agreement. U.S. persons who consider 
that the United States is failing to effectively enforce its 
environmental laws may invoke the comparable public submissions 
process under the North American Agreement on Environmental 
Cooperation. The Parties will designate the secretariat and 
make related arrangements through a separate understanding.
    Biological Diversity. The Chapter includes a specific 
provision on biological diversity, in which the Parties 
recognize the importance of biological diversity, restate their 
commitment to encouraging and promoting its protection, and 
agree to enhance their cooperative efforts with respect to 
biological diversity.
    Dispute Settlement. Chapter Eighteen provides for 
cooperative consultations as a first step if a Party considers 
that the other Party is not complying with its obligations 
under the Chapter. The complaining Party may, after an initial 
60-day consultation period, invoke the Agreement's general 
dispute settlement mechanism by requesting additional 
consultations or a meeting of the Agreement's cabinet-level 
Free Trade Commission under Chapter Twenty-One (Dispute 
Settlement). If the Commission is unable to resolve the 
dispute, the matter may be referred to a dispute settlement 
panel.

                     CHAPTER NINETEEN: TRANSPARENCY

    Section A of Chapter Nineteen sets out requirements 
designed to foster openness, transparency, and fairness in the 
adoption and application of measures on matters covered by the 
Agreement. Each Party must promptly publish all laws, 
regulations, procedures, and administrative rulings of general 
application concerning subjects covered by the Agreement, or 
otherwise make them available. To the extent possible, the 
Parties must publish proposed regulations in advance and give 
interested persons a reasonable opportunity to comment. 
Wherever possible, each Party must provide reasonable notice to 
the other Party's nationals and enterprises that are directly 
affected by an agency process, including an adjudication, 
rulemaking, licensing, determination, and approval process. A 
Party is to afford such persons a reasonable opportunity to 
present facts and arguments prior to any final administrative 
action, when time, the nature of the process, and the public 
interest permit.
    Chapter Nineteen also provides for independent review and 
appeal of final administrative actions. Appeal rights must 
include a reasonable opportunity to present arguments and to 
obtain a decision based on evidence in the administrative 
record.
    In Section B of Chapter Nineteen, the Parties affirm their 
commitment to prevent and combat corruption, including bribery 
in international trade and investment. To this end, each Party 
is obligated to make it a criminal offense for its public 
officials to solicit or accept a bribe, and for any person 
subject to its jurisdiction to bribe a public official of that 
Party or a foreign public official in exchange for favorable 
government action in matters affecting international trade or 
investment. Each Party must also endeavor to protect persons 
who, in good faith, report acts of bribery or corruption and to 
work together to encourage and support initiatives in relevant 
international fora to prevent bribery and corruption.

  CHAPTER TWENTY: ADMINISTRATION OF THE AGREEMENT AND TRADE CAPACITY 
                                BUILDING

    In Chapter Twenty, the Parties create a Free Trade 
Commission to supervise the implementation and overall 
operation of the Agreement. The Commission comprises the 
Parties' trade ministers and will meet annually. The Commission 
will assist in the resolution of any disputes that may arise 
under the Agreement. The Commission may issue interpretations 
of the Agreement and agree to accelerate duty elimination on 
particular products and adjust the Agreement's product-specific 
rules of origin.
    Each Party must designate an office to provide 
administrative assistance to dispute settlement panels and 
perform such other functions as the Commission may direct.
    The Parties also establish a Committee on Trade Capacity 
Building comprising representatives of each Party. The overall 
objective of the Committee is to assist Colombia to implement 
the Agreement and adjust to liberalized bilateral trade. 
Particular functions of the Committee include: prioritizing 
trade capacity building projects; inviting international donor 
institutions, private sector entities, and non-governmental 
organizations to assist in the development and implementation 
of trade capacity building projects; and monitoring and 
assessing progress in implementing those projects.

                 CHAPTER TWENTY-ONE: DISPUTE SETTLEMENT

    Chapter Twenty-One sets out detailed procedures for the 
resolution of disputes between the Parties over compliance with 
the Agreement. Those procedures emphasize amicable settlements, 
relying wherever possible on bilateral cooperation and 
consultations. When disputes arise under provisions common to 
the Agreement and other agreements (e.g., the WTO agreements), 
the complaining government may choose a forum for resolving the 
matter that is set forth in any valid agreement between the 
Parties. The selected forum will be the exclusive venue for 
resolving that dispute.
    Consultations. A Party may request consultations with the 
other Party on any actual or proposed measure that it believes 
might affect the operation of the Agreement. If the Parties 
cannot resolve the matter through consultations within a 
specified period (normally 60 days), any consulting Party may 
refer the matter to the Free Trade Commission, which will 
attempt to resolve the dispute.
    Panel Procedures. If the Commission cannot resolve the 
dispute within a specified period (normally 30 days), any 
consulting Party may refer the matter, if it involves an actual 
measure, to a panel comprising independent experts that the 
Parties select. The Parties will set rules to protect 
confidential information, provide for open hearings and public 
release of submissions, and allow an opportunity for the panel 
to accept submissions from non-governmental entities in the 
Parties' territories.
    Unless the Parties agree otherwise, a panel is to present 
its initial report within 120 days after the last panelist is 
selected. Once the panel presents its initial report containing 
findings of fact and a determination on whether a Party has met 
its obligations, the Parties will have the opportunity to 
provide written comments to the panel. When the panel receives 
these comments, it may reconsider its report and make any 
further examination that it considers appropriate. Within 30 
days after it presents its initial report, the panel will 
submit its final report. The Parties will then seek to agree on 
how to resolve the dispute, normally in a way that conforms to 
the panel's determinations and recommendations. Subject to 
protection of confidential information, the panel's final 
report will be made available to the public 15 days after the 
Parties receive it.
    Suspension of Benefits. If the Parties cannot resolve the 
dispute after they receive the panel's final report, the 
Parties will seek to agree on acceptable trade compensation. If 
they cannot agree on compensation, or if the complaining Party 
believes the defending Party has failed to implement an agreed 
resolution, the complaining Party may provide notice that it 
intends to suspend trade benefits equivalent in effect to those 
it considers were impaired, or may be impaired, as a result of 
the disputed measure.
    If the defending Party considers that the proposed level of 
benefits to be suspended is ``manifestly excessive,'' or 
believes that it has modified the disputed measure to make it 
conform to the Agreement, it may request the panel to reconvene 
and decide the matter. The panel must issue its determination 
no later than 90 days after the request is made (or 120 days if 
the panel is reviewing both the level of the proposed 
suspension and a modification of the measure).
    The complaining Party may suspend trade benefits up to the 
level that the panel sets or, if the panel has not been asked 
to determine the level, up to the amount that the complaining 
Party has proposed. The complaining Party cannot suspend 
benefits, however, if the defending Party provides notice that 
it will pay an annual monetary assessment to the other Party. 
The amount of the assessment will be established by agreement 
of the Parties or, failing that, will be set at 50 percent of 
the level of trade concessions the complaining Party was 
authorized to suspend.
    Compliance Review Mechanism. If, at any time, the defending 
Party believes it has made changes in its laws or regulations 
sufficient to comply with its obligations under the Agreement, 
it may refer the matter to the panel. If the panel agrees, the 
dispute ends and the complaining Party must withdraw any 
offsetting measures it has put in place. Concurrently, the 
defending government will be relieved of any obligation to pay 
a monetary assessment.
    The Parties will review the operation of the compliance 
procedures either five years after the Agreement enters into 
force or within six months after benefits have been suspended 
or assessments paid in five proceedings initiated under this 
Agreement, whichever occurs first.
    Settlement of Private Disputes. The Parties will encourage 
the use of arbitration and other alternative dispute resolution 
mechanisms to settle international commercial disputes between 
private parties. Each Party must provide appropriate procedures 
for the recognition and enforcement of arbitral awards, for 
example by complying with the 1958 United Nations Convention on 
the Recognition and Enforcement of Foreign Arbitral Awards or 
the 1975 Inter-American Convention on International Commercial 
Arbitration.

                     CHAPTER TWENTY-TWO: EXCEPTIONS

    Chapter Twenty-Two sets out provisions that generally apply 
to the entire Agreement. Article XX of the GATT 1994 and its 
interpretive notes are incorporated into and made part of the 
Agreement, mutatis mutandis, and apply to those Chapters 
related to treatment of goods. Likewise, for the purposes of 
Chapters Eleven (Cross-Border Trade in Services), Fourteen 
(Telecommunications), and Fifteen (Electronic Commerce), GATS 
Article XIV (including its footnotes) is incorporated into and 
made part of the Agreement. For both goods and services, the 
Parties understand that these exceptions include certain 
environmental measures.
    Essential Security. Chapter Twenty-Two makes clear that 
nothing in the Agreement prevents a Party from taking actions 
it considers necessary to protect its essential security 
interests, and specifically provides that an arbitration panel 
must apply the essential security exception if a Party invokes 
it. With respect to non-conforming measures relating to port 
activities listed by Colombia and the United States in Annex I 
and II, respectively, each Party has clarified that the 
landside aspects of port activities are subject to the 
Agreement's essential security exception.
    Taxation. An exception for taxation limits the field of tax 
measures subject to the Agreement. For example, the exception 
generally provides that the Agreement does not affect a Party's 
rights or obligations under any tax convention. The exception 
sets out certain circumstances under which tax measures are 
subject to the Agreement's: (1) national treatment obligation 
for goods; (2) national treatment and NTR (MFN) obligations for 
services; (3) prohibitions on performance requirements; and (4) 
expropriation rules.
    Disclosure of Information. The Chapter also provides that a 
Party may withhold information from the other Party where such 
disclosure would impede domestic law enforcement, otherwise be 
contrary to the public interest, or prejudice the legitimate 
commercial interests of particular enterprises.

                 CHAPTER TWENTY-THREE: FINAL PROVISIONS

    Chapter Twenty-Three provides that (i) the annexes, 
appendices, and footnotes are part of the Agreement, (ii) the 
Parties may amend the Agreement subject to the legal 
requirements of each Party, and (iii) the English and Spanish 
texts are both authentic. It also provides for consultations if 
any provision of the WTO Agreement that the Parties have 
incorporated into the Agreement is amended.
    In Chapter Twenty-Three, the Parties establish the 
procedures for the Agreement to enter into force and terminate. 
The Chapter provides that any other country or group of 
countries may accede to the Agreement on terms and conditions 
that are agreed with the Parties and approved according to each 
Party's legal requirements.

     E. General Description of the Bill To Implement the Agreement


Sec. 1. Short title; table of contents

    This section provides that the short title of the act 
implementing the Agreement is the ``United States-Colombia 
Trade Promotion Agreement Implementation Act'' 
(``Implementation Act''). Section 1 also provides the table of 
contents for the Implementation Act.

Sec. 2. Purposes

    This section provides that the purposes of the 
Implementation Act are to approve and implement the Agreement, 
to strengthen and develop economic relations between the United 
States and Colombia, to establish free trade between the United 
States and Colombia through the reduction and elimination of 
barriers to trade in goods and services and to investment, and 
to lay the foundation for further cooperation to expand and 
enhance the benefits the Agreement.

Sec. 3. Definitions

    This section defines the terms ``Agreement,'' 
``Commission,'' ``HTS,'' and ``Textile or apparel good'' for 
purposes of the Implementation Act.

TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT


Sec. 101. Approval and entry into force of the Agreement

    This section provides congressional approval for the 
Agreement and its accompanying SAA. Section 101 also provides 
that, if the President determines that Colombia has taken 
measures necessary to comply with obligations that take effect 
at the time the Agreement enters into force, the President may 
exchange notes with Colombia providing for the entry into force 
of the Agreement with respect to the United States on or after 
January 1, 2012.

Sec. 102. Relationship of the Agreement to United States and state law

    This section establishes the relationship between the 
Agreement and U.S. law. Section 102 clearly states that no 
provision of the Agreement will be given effect if it is 
inconsistent with any federal law.
    Section 102 also provides that only the United States may 
bring a court action to resolve a conflict between a state law 
and the Agreement. And it precludes any private right of action 
against the federal government, state or local governments, or 
a private party based on the provisions of the Agreement.

Sec. 103. Implementing actions in anticipation of entry into force and 
        initial regulations

    This section provides that, following the enactment of the 
Act, the President may proclaim such actions, and other 
appropriate officers of the federal government may issue such 
regulations, as may be necessary to ensure that provisions of 
the legislation that take effect on the date the Agreement 
enters into force are appropriately implemented on that date. 
Section 103 further provides that, with respect to any action 
proclaimed by the President that is not subject to the 
consultation and layover provisions contained in section 104, 
such action may not take effect before the 15th day after the 
date on which the text of the proclamation is published in the 
Federal Register. The 15-day restriction is waived, however, to 
the extent that it would prevent an action from taking effect 
on the date the Agreement enters into force. Section 103 also 
provides that, to the maximum extent feasible, initial 
regulations necessary or appropriate to carry out the actions 
required by the Implementation Act or proposed in the SAA shall 
be issued within 1 year after the date on which the Agreement 
enters into force. In accordance with the SAA, any agency 
unable to issue a regulation within 1 year must report to the 
relevant Congressional committees, at least 30 days prior to 
the end of the 1-year period, the reasons for the delay and the 
expected date for issuance of the regulation.

Sec. 104. Consultation and layover provisions for, and effective date 
        of, proclaimed actions

    This section sets forth consultation and layover steps that 
must precede the President's implementation of any action by 
proclamation that is subject to the requirements of this 
section. Under the consultation and layover provisions, the 
President must obtain advice regarding the proposed action from 
the Commission and from the appropriate advisory committees 
established under section 135 of the Trade Act of 1974 (19 
U.S.C. Sec. 2155). The President must also submit to the Senate 
Committee on Finance and the House Committee on Ways and Means 
a report that sets forth the action proposed, the reasons for 
the proposed action, and the advice of the appropriate advisory 
committees and the Commission. Section 104 sets aside a 60-day 
period following the date of transmittal of the report for the 
President to consult with the Senate Committee on Finance and 
the House Committee on Ways and Means on the proposed action.

Sec. 105. Administration of dispute settlement proceedings

    This section authorizes the President to establish or 
designate within the Department of Commerce an office 
responsible for providing administrative assistance to dispute 
settlement panels established under Chapter 21 of the 
Agreement. Section 105 also authorizes the appropriation of 
funds to support this office.

Sec. 106. Arbitration of claims

    This section authorizes the United States to use binding 
arbitration to resolve certain claims against the United States 
pursuant to the Investor-State Dispute Settlement procedures 
set forth in section B of chapter 10 of the Agreement.

Sec. 107. Effective dates; effect of termination

    This section provides that the provisions of the 
Implementation Act and the amendments made by it take effect on 
the date on which the Agreement enters into force, except for 
sections 1 through 3, title I, and title V, which take effect 
on the date of enactment of the Act. This section also provides 
that the amendments made by section 204, 205, 207, and 401 of 
the Implementation Act take effect on the date of enactment of 
the Implementation Act and apply with respect to Panama on the 
date on which the Agreement enters into force. Section 107 also 
provides that the provisions of the Implementation Act (other 
than this subsection and title V) and the amendments to other 
statutes made by it (other than the amendments made by title V) 
will cease to have effect on the date on which the Agreement 
terminates.

                      TITLE II--CUSTOMS PROVISIONS


Sec. 201. Tariff modifications

    Section 201(a) authorizes the President to implement by 
proclamation the modification or continuation of any duty, 
imposition of any additional duties, or the continuation of 
duty-free or excise treatment that the President determines to 
be necessary or appropriate to carry out or apply Articles 2.3, 
2.5, 2.6, 3.3.13, and Annex 2.3 of the Agreement. In addition, 
section 201(a) requires the President to terminate the 
designation of Colombia as a beneficiary developing country for 
purposes of the GSP and the ATPA program on the date the 
Agreement enters into force.
    Section 201(b) authorizes the President, subject to the 
consultation and layover provisions of section 104, to proclaim 
the modification or continuation of any duty, the modification 
of the staging of any duty elimination, the imposition of 
additional duties, or the continuation of duty-free or excise 
treatment that the President determines to be necessary or 
appropriate to maintain the general level of reciprocal and 
mutually advantageous concessions with respect to Panama 
provided by the Agreement.
    Section 201(c) authorizes the President, with respect to 
any good for which the base rate of duty in the Tariff Schedule 
of the United States to Annex 2.3 of the Agreement is a 
specific or compound rate of duty, to substitute for the base 
rate an ad valorem rate that the President determines to be 
equivalent to the base rate.
    Section 201(d) authorizes the President, in implementing 
the tariff rate quotas set forth in the Agreement, to take 
actions necessary to ensure that imports of agricultural goods 
do not disrupt the orderly marketing of commodities in the 
United States.

Sec. 202. Additional duties on certain agricultural goods

    Section 202 implements the agricultural safeguard 
provisions of the Agreement. Section 202(a) defines the terms 
``applicable NTR (MFN) rate of duty,'' ``safeguard good,'' 
``schedule rate of duty,'' ``trigger level,'' ``year 1 of the 
agreement'' and ``years other than year 1 of the agreement'' 
for purposes of section 202. Section 202(b) requires the 
Secretary of the Treasury (``Secretary'') to impose additional 
duties on imports of certain Colombian agricultural goods if 
the Secretary determines that, prior to such importation, the 
total volume of the imported good in a calendar year exceeds 
the volume by amounts set forth in this section and in Appendix 
I of the General Notes to the Schedule of the United States to 
Annex 2.3 of the Agreement. Section 202(c) provides that the 
Secretary may not impose an additional duty on a good if, at 
the time of entry, the good is subject to a safeguard measure 
under the procedures set out in subtitle A of title III of the 
Implementation Act or under the safeguard procedures set out in 
chapter 1 of title II of the Trade Act of 1974. Finally, 
Section 202(d) provides that the additional duties shall cease 
to apply to a good on the date on which duty-free treatment 
must be provided to that good under the Schedule of the United 
States to Annex 2.3 of the Agreement.

Sec. 203. Rules of origin

    Section 203 implements the general rules of origin set 
forth in Chapter 4 of the Agreement. These rules define the 
circumstances under which a good imported from Colombia 
qualifies as an originating good and is thus eligible for 
preferential tariff treatment under the Agreement.
    Section 203(a) establishes the Harmonized Tariff Schedule 
of the United States (``HTS'') as the basis of any tariff 
classification. It also provides that any cost or value 
referred to in section 203 shall be recorded and maintained in 
accordance with the generally accepted accounting principles 
applicable in the territory of the country in which the good is 
produced.
    Section 203(b) provides that a good is an originating good 
if it falls within one of three specified categories. First, a 
good qualifies as an originating good if it is wholly obtained 
or produced entirely in the territory of Colombia, the United 
States, or both. Second, a good qualifies as an originating 
good if the good is produced in the territory of Colombia, the 
United States, or both, and the 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 
and to meet other requirements specified in Annex 3-A or Annex 
4.1 of the Agreement. Third, and finally, a good qualifies as 
an originating good if the good is produced entirely in the 
territory of Colombia, the United States, or both, exclusively 
from materials that fall within the first two categories.
    The remainder of section 203 sets forth specific rules 
related to determining whether a good meets the Agreement's 
specific requirements to qualify as an originating good. 
Section 203(c) implements provisions in Annex 4.1 of the 
Agreement that require certain goods to have a specified 
percentage of ``regional value content'' to qualify as 
originating goods. It prescribes alternative methods for 
calculating regional value content, as well as a specific 
method that must be used in the case of certain automotive 
goods. Section 203(d) addresses how materials are to be valued 
for purposes of calculating the regional value content of a 
good under subsection 203(c) and for purposes of applying the 
de minimis rules under subsection 203(f). Section 203(e) 
provides a rule of accumulation for originating materials from 
the territory of Colombia or the United States that are used in 
the production of a good in the territory of the other country. 
Section 203(f) provides that a good is not disqualified as an 
originating good if it contains de minimis quantities of non-
originating materials that do not undergo a change in tariff 
classification. Section 203(g) addresses how to determine 
whether fungible goods and materials qualify as originating or 
non-originating under the Agreement. Section 203(h) provides 
rules for the treatment of accessories, spare parts, or tools 
that are delivered with a good. Sections 203(i) and (j) address 
the treatment of packaging materials and containers for retail 
sale and for shipment in determining whether a good qualifies 
as an originating good. Section 203(k) provides that indirect 
materials shall be treated as originating materials without 
regard to where they are produced. Section 203(l) provides 
rules for the treatment of goods that undergo further 
production in a third country or that otherwise transit through 
a third country. And section 203(m) provides rules for the 
treatment of goods classifiable as sets.
    Section 203(n) defines various terms used in section 203. 
Section 203(o) authorizes the President to proclaim the 
specific rules of origin set forth in Annex 3-A and Annex 4.1 
of the Agreement and to modify certain rules of origin in the 
Agreement by proclamation subject to the consultation and 
layover provisions of section 104.

Sec. 204. Customs user fees

    This section provides for the immediate elimination of the 
merchandise processing fee for goods qualifying as originating 
goods under the Agreement. Processing of goods qualifying as 
originating goods will be financed from the General Fund of the 
Treasury.

Sec. 205. Disclosure of incorrect information; false certifications of 
        origin; denial of preferential tariff treatment

    Section 205(a) amends section 592 of the Tariff Act of 1930 
(19 U.S.C. Sec. 1592) to impose penalties on an importer, 
exporter, or producer that makes an invalid claim for 
preferential tariff treatment under the Agreement through 
negligence, gross negligence, or fraud, unless the importer, 
exporter, or producer, after discovering that the claim is 
invalid, promptly and voluntarily corrects the claim and pays 
any customs duties owed. Section 205(b) amends section 514 of 
the Tariff Act of 1930 (19 U.S.C. Sec. 1514) to provide that, 
if an importer, exporter, or producer has engaged in a pattern 
of conduct in providing false representations that a good 
qualifies as originating, the United States may suspend 
preferential tariff treatment under the Agreement to identical 
goods covered by any subsequent representations that the person 
may make.

Sec. 206. Reliquidation of entries

    This section amends section 520(d) of the Tariff Act of 
1930 (19 U.S.C. Sec. 1520(d)) to allow an importer to claim 
preferential tariff treatment for an originating good within 1 
year of importation, even if no such claim was made at the time 
of the importation.

Sec. 207. Recordkeeping requirements

    This section amends section 508 of the Tariff Act of 1930 
(19 U.S.C. Sec. 1508) to establish recordkeeping requirements 
for U.S. exporters and producers that issue certifications of 
origin for goods exported to Colombia.

Sec. 208. Enforcement relating to trade in textile or apparel goods

    This section authorizes the President to apply anti-
circumvention provisions concerning trade in textile and 
apparel goods. Pursuant to article 3.2 of the Agreement, the 
Secretary may request that the Government of Colombia conduct a 
verification to determine the compliance of exporters and 
producers with applicable customs laws, regulations, and 
procedures regarding trade in textile or apparel goods, and to 
determine the accuracy of a claim of origin for a textile or 
apparel good. Section 208(a) provides that the President may 
direct the Secretary to take ``appropriate action'' while the 
verification is being conducted. Under section 208(b), such 
appropriate action includes detaining, suspending preferential 
tariff treatment of, or denying entry to, any textile or 
apparel good that the person subject to the verification has 
produced or exported or for which a claim has been made that is 
the subject of the verification if the Secretary determines 
there is insufficient information to support a claim for such 
treatment.
    Section 208(c) permits the President to direct the 
Secretary to take ``appropriate action'' after a verification 
has been completed. Section 208(d) defines ``appropriate 
action'' to include the denial of preferential treatment or 
entry to textile or apparel goods that the person subject to 
the verification has exported or produced until such time as 
the Secretary receives information sufficient to prove 
compliance or until an earlier date as the President may 
direct.
    Finally, section 208(e) permits the Secretary to publish 
the name of any person that the Secretary determines has 
engaged in circumvention of applicable laws, regulations, or 
procedures affecting trade in textile or apparel goods or has 
failed to demonstrate that it produces, or is capable of 
producing, textile or apparel goods.

Sec. 209. Regulations

    Section 209 authorizes the Secretary to prescribe 
regulations necessary to carry out the rules of origin and 
customs user fee provisions in the Implementation Act and to 
carry out the President's proclamation authority under section 
203(o).

                     TITLE III--RELIEF FROM IMPORTS


Sec. 301. Definitions

    This section defines the terms ``Colombian article'' and 
``Colombian textile or apparel article'' for purposes of this 
title. Section 301(1) defines ``Colombian article'' as an 
article that qualifies as an originating good under section 
203(b) of the Implementation Act. And section 301(2) defines 
``Colombian textile or apparel article'' as a textile or 
apparel good as defined in section 3(4) of the Implementation 
Act that is a Colombian article.

     Subtitle A--Relief From Imports Benefiting From the Agreement

    Subtitle A of title III implements the bilateral safeguard 
provisions set out in Chapter Eight of the Agreement. It 
authorizes the President, after an investigation and 
affirmative determination by the Commission, to suspend duty 
reductions or impose duties temporarily up to NTR (MFN) rates 
on a ``Colombian article'' when, as a result of the reduction 
or elimination of a duty under the Agreement, the article 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 a 
domestic industry that produces a like or directly competitive 
good. The standards and procedures set out in this subtitle 
closely parallel the procedures for global safeguards set forth 
in sections 201 through 204 of the Trade Act of 1974 (19 U.S.C. 
Sec. Sec. 2251-2254).

Sec. 311. Commencing of action for relief

    Section 311(a) requires an entity that is representative of 
an industry to file a petition with the Commission to commence 
a bilateral safeguard investigation. Section 311(a) defines an 
entity to include a trade association, firm, certified or 
recognized union, or a group of workers.
    Section 311(b) provides that, upon the filing of a 
petition, the Commission shall promptly initiate an 
investigation to determine whether, as a result of the 
reduction or elimination of a duty provided for under the 
Agreement, a Colombian article is being imported into the 
United States in such increased quantities and under such 
conditions that imports of the Panamanian article constitute a 
substantial cause of serious injury, or threat of serious 
injury, to the domestic industry producing an article that is 
like, or directly competitive with, the imported article.
    Section 311(c) extends certain provisions (both substantive 
and procedural) contained in subsections (b), (c), and (i) of 
section 202 of the Trade Act of 1974 (19 U.S.C. Sec. 2252(b), 
(c), and (i)), which apply to global safeguard investigations, 
to any bilateral safeguard initiated under the Agreement. These 
provisions include, inter alia, the requirement that the 
Commission publish notice of the commencement of an 
investigation; the requirement that the Commission hold a 
public hearing at which interested parties and consumers have 
the right to be present and to present evidence; the factors to 
be taken into account by the Commission in making its 
determinations; and authorization for the Commission to 
promulgate regulations providing access to confidential 
business information under protective order to authorized 
representatives of interested parties in an investigation.
    Section 311(d) precludes the initiation of a bilateral 
safeguard investigation with respect to any Colombian article 
for which import relief has already been provided under 
subtitle A.

Sec. 312. Commission action on petition

    Section 312(a) establishes deadlines for Commission action 
following the initiation of a bilateral safeguard 
investigation. Section 312(b) applies certain statutory 
provisions regarding an equally divided vote by the Commission 
in a global safeguard investigation under section 202 of the 
Trade Act of 1974 (19 U.S.C. Sec. 2252) to Commission 
determinations and findings under this section. If the 
Commission renders an affirmative injury determination or a 
determination that the President may treat as an affirmative 
determination in the event of an equally divided vote by the 
Commission, section 312(c) requires the Commission to find and 
recommend to the President the amount of import relief that is 
necessary to remedy or prevent the injury and to facilitate the 
efforts of the domestic industry to make a positive adjustment 
to import competition. Section 312(d) requires the Commission 
to submit a report to the President regarding its determination 
and specifies the information that the Commission must include 
in the report. Upon submitting the report to the President, 
section 312(e) requires the Commission to promptly release the 
report to the public, except for any confidential information 
contained therein, and to publish a summary of the report in 
the Federal Register.

Sec. 313. Provision of relief

    Section 313(a) directs the President, not later than 30 
days after receiving the report from the Commission, to provide 
relief from imports of the article subject to an affirmative 
determination by the Commission, or a determination that the 
President treats as affirmative, to the extent that the 
President determines is necessary to remedy or prevent the 
injury and to facilitate the efforts of the domestic industry 
to make a positive adjustment to import competition. Section 
313(b), however, provides that the President need not provide 
import relief if the President determines that the import 
relief will not provide greater economic and social benefits 
than costs.
    Section 313(c) specifies the nature of the import relief 
that the President may impose, which includes the suspension of 
any further reduction in the rate of duty imposed on the 
article in question under Annex 2.3 of the Agreement and an 
increase in the rate of duty imposed on such article to a level 
that does not exceed the lesser of (1) the NTR (MFN) duty rate 
at the time the import relief is provided; or (2) the NTR (MFN) 
duty rate on the day before the Agreement enters into force. 
Section 313(c) also requires the President to provide for the 
progressive liberalization of import relief at regular 
intervals during the period of its application if that period 
exceeds 1 year.
    Section 313(d) limits any import relief that the President 
imposes in a bilateral safeguard action to no more than 4 years 
in the aggregate. The initial period of import relief that the 
President imposes may not exceed 2 years. The President may 
extend the relief up to an additional 2 years, however, if (1) 
the Commission makes an affirmative determination, or a 
determination that the President treats as affirmative, that 
import relief continues to be necessary to remedy or prevent 
serious injury and that there is evidence that the domestic 
industry is making a positive adjustment to import competition; 
and (2) the President makes a determination to the same effect.
    Section 313(e) specifies the duty rate to be applied to 
Colombian articles after termination of a safeguard action. On 
the termination of import relief, the rate of duty for the 
remainder of the calendar year shall be the rate that was 
scheduled to have been in effect 1 year after the initial 
provision of import relief. For the rest of the duty phase-out 
period, the President may set the duty either at the rate 
called for under the Schedule of the United States to Annex 2.3 
of the Agreement or in a manner that eliminates the duty in 
equal annual stages ending on the date set out in that 
Schedule.
    Section 313(f) precludes the application of import relief 
pursuant to the bilateral safeguard provisions with respect to 
any Colombian article that is (1) subject to import relief 
under the global safeguard provisions in chapter 1 of title II 
of the Trade Act of 1974 (19 U.S.C. Sec. 2251 et seq.); (2) 
subject to import relief under subtitle B of title III of the 
Act; or (3) subject to an additional duty assessment under 
section 202(b) of the Act.

Sec. 314. Termination of relief authority

    This section provides that the President's authority to 
impose import relief under the bilateral safeguard expires 10 
years after the date on which the Agreement enters into force. 
If, however, the period for elimination of duties on a 
particular article exceeds 10 years, relief may be provided for 
that article until the date on which the duty elimination 
period ends.

Sec. 315. Compensation authority

    This section authorizes the President, under section 123 of 
the Trade Act of 1974 (19 U.S.C. Sec. 2133), to grant new 
concessions to Colombia as compensation for the imposition of 
import relief pursuant to the bilateral safeguard.

Sec. 316. Confidential business information

    This section applies the same procedures for the treatment 
and release of confidential business information by the 
Commission in a global safeguard investigation under chapter 1 
of title II of the Trade Act of 1974 (19 U.S.C. Sec. 2251 et 
seq.) to investigations under title III of the Act.

           Subtitle B--Textile and Apparel Safeguard Measures

    Subtitle B of title III implements the Agreement's textile 
and apparel safeguard.

Sec. 321. Commencement of action for relief

    Section 321(a) requires an interested party to file a 
request with the President in order to commence action for 
relief under the textile and apparel safeguard. Upon the filing 
of a request, the President must review the request to 
determine, from information presented in the request, whether 
to commence consideration of the request on its merits. Section 
321(b) provides that, if the President determines that the 
request contains the information necessary for the request to 
be considered on the merits, the President must publish notice 
in the Federal Register stating that the request will be 
considered and seeking public comments on the request. The 
notice must contain a summary of the request and the dates by 
which comments and rebuttals must be received.
    The Committee notes our regulatory processes should be 
administered in an open and transparent manner that can serve 
as a model for our trading partners. For example, the Committee 
understands that, in addition to publishing a summary of a 
request for safeguard relief, the President plans to make the 
full text of the request available on the U.S. Department of 
Commerce's International Trade Administration website, subject 
to the protection of confidential business information, if any. 
The Committee encourages this and similar efforts to enhance 
government transparency.

Sec. 322. Determination and provision of relief

    Section 322 sets out the procedures to be followed in 
considering a request filed under section 321. If a positive 
determination is made under section 321(b), section 322(a) 
requires the President to determine whether, as a result of the 
elimination of a duty under the Agreement, a Colombian textile 
or apparel article is being imported into the United States in 
such increased quantities 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) also 
provides that, in making such a determination, the President 
shall examine the effect of increased imports on the domestic 
industry's output, productivity, capacity utilization, 
inventories, market share, exports, wages, employment, domestic 
prices, profits and losses, and investment, none of which is 
necessarily decisive. Finally, section 322(a) provides that the 
President shall not consider changes in consumer preference or 
technology as factors supporting a determination of serious 
damage or actual threat thereof.
    Section 322(b) authorizes the President, in the event of an 
affirmative determination of serious damage or actual threat 
thereof, to provide import relief to the extent that the 
President determines is necessary to remedy or prevent the 
serious damage and to facilitate adjustment by the domestic 
industry. Section 322(b) also specifies the nature of the 
import relief that the President may impose, which consists of 
an increase in the rate of duty imposed on the article to a 
level that does not exceed the lesser of (1) the NTR (MFN) duty 
rate in place for the textile or apparel article at the time 
the import relief is provided; or (2) the NTR (MFN) duty rate 
for that article on the day before the Agreement enters into 
force.

Sec. 323. Period of relief

    Section 323(a) limits any import relief that the President 
imposes under the textile and apparel safeguard to no more than 
3 years in the aggregate. Section 323(b) provides that if the 
initial period of import relief is less than 3 years, the 
President may extend the relief (to a maximum of 3 years) if 
the President determines that continuation is necessary to 
remedy or prevent serious damage and to facilitate adjustment, 
and that the domestic industry is, in fact, adjusting to import 
competition.

Sec. 324. Articles exempt from relief

    This section provides that relief may not be granted to an 
article under the textile and apparel safeguard if: (i) relief 
previously has been granted to that article under the textile 
and apparel safeguard; or (ii) the article is subject, or 
becomes subject, to a safeguard measure under (a) Chapter Eight 
of the Agreement (corresponding to subtitle A of title III of 
the bill), or (b) chapter 1 of title II of the Trade Act of 
1974.

Sec. 325. Rate after termination of import relief

    This section provides that on the date import relief 
terminates, imports of the textile or apparel article that was 
subject to the safeguard action will be subject to the rate of 
duty that would have been in effect on that date in the absence 
of the relief.

Sec. 326. Termination of relief authority

    This section provides that authority to provide relief 
under the textile and apparel safeguard will expire 5 years 
after the date on which the Agreement enters into force.

Sec. 327. Compensation authority

    This section authorizes the President, under section 123 of 
the Trade Act of 1974 (19 U.S.C. Sec. 2133), to grant new 
concessions to Colombia as compensation for the imposition of 
import relief pursuant to the textile and apparel safeguard.

Sec. 328. Confidential business information

    This section provides that confidential business 
information submitted in the course of consideration of a 
request for a textile or apparel safeguard may not be released 
absent the consent of the party providing the information. It 
also provides that a party submitting confidential business 
information in a textile or apparel safeguard proceeding must 
submit a non-confidential version of the information or a 
summary of the information.

       Subtitle C--Cases Under Title II of the Trade Act of 1974

    Subtitle C of title III implements the global safeguard 
provisions of the Agreement. It authorizes the President, in 
granting global import relief under the global safeguard 
provisions in sections 201 through 204 of the Trade Act of 1974 
(19 U.S.C. Sec. Sec. 2251-2254), to exclude imports of 
originating articles from the relief when certain conditions 
are present.

Sec. 331. Findings and action on goods of Panama

    Section 331(a) provides that, if the Commission makes an 
affirmative determination, or a determination that the 
President may treat as an affirmative determination, in a 
global safeguard investigation initiated under chapter 1 of 
title II of the Trade Act of 1974 (19 U.S.C. Sec. 2251 et 
seq.), the Commission must find and report to the President 
whether imports of the article from Colombia that qualify as 
originating goods under section 203(b) of the Implementation 
Act are a substantial cause of serious injury or threat 
thereof. Section 331(b) provides that, if the Commission makes 
a negative finding under section 331(a), the President may 
exclude the Colombian articles from the global safeguard 
action.

                         TITLE IV--PROCUREMENT


Sec. 401. Eligible products

    This section amends section 308(4)(A) of the Trade 
Agreements Act of 1979 (19 U.S.C. Sec. 2518(4)(A)) to implement 
the government procurement provisions of the Agreement.

           TITLE V--EXTENSION OF ANDEAN TRADE PREFERENCE ACT


Section 501. Extension of Andean Trade Preference Act

    Section 501(a)(1) of the implementing bill provides for an 
extension of ATPA benefits with respect to Colombia until July 
31, 2013. Although Colombia's designation as a beneficiary 
country under ATPA will terminate on the date the Agreement 
enters into force, this extension will allow imports from 
Colombia to continue to benefit under the program until the 
earlier of such entry into force date or July 31, 2013.
    Section 501(a)(2) provides for an extension of ATPA 
benefits with respect to Ecuador until July 31, 2013.
    Section 501(b) provides for consequential time period 
adjustments for both Colombia and Ecuador. Section 501(c) 
provides for the retroactive application of duty-free treatment 
for entries from Colombia and Ecuador made after ATPA expired 
on February 12, 2011, and before the 15th day after the date of 
enactment of the Implementation Act (the effective date of the 
extension), if those entries would have qualified for duty-free 
treatment if they had been made on February 12, 2011.

                           TITLE VI--OFFSETS


Sec. 601. Elimination of Certain NAFTA Customs Fees Exemption

    This section amends section 13031 of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (``COBRA'') to 
eliminate the current exemption from customs user fees for air 
and sea passengers arriving from Canada, Mexico, and the 
Caribbean. The amendment leaves in place the exemption for 
travelers arriving from U.S. territories and possessions.

Sec. 602. Extension of customs user fees

    This section amends section 13031 of COBRA to extend from 
August 3, 2021 until September 30, 2021 the merchandise 
processing fees and from December 9, 2020 until August 31, 2021 
the passenger and conveyance processing fees authorized under 
that act.

Sec. 603. Time for payment of corporate estimated taxes

    This section increases the amount of the required 
installment of estimated tax otherwise due from a corporation 
with at least $1 billion in assets in July, August, or 
September 2016 by .50 percent. The bill reduces the next 
required installment to reflect the prior increase.

             F. Vote of the Committee in Reporting the Bill

    In compliance with section 133 of the Legislative 
Reorganization Act of 1946, the Committee states that on 
October 11, 2011, S. 1641 was ordered favorably reported, 
without amendment, by a roll call vote of 18 ayes, 6 nays. 
Ayes: Baucus, Conrad (proxy), Bingaman, Kerry, Wyden, Cantwell, 
Nelson, Carper, Hatch, Grassley (proxy), Kyl (proxy), Crapo, 
Roberts, Enzi, Cornyn (proxy), Coburn (proxy), Thune, and Burr, 
(proxy). Nays: Rockefeller (proxy), Schumer (proxy), Stabenow, 
Menendez, Cardin, and Snowe (proxy).

                    II. BUDGETARY IMPACT OF THE BILL

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 12, 2011.
Hon. Max Baucus,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1641, the United 
States-Colombia Trade Promotion Agreement Implementation Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kalyani 
Parthasarathy.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

    Summary: S. 1641 would approve the trade promotion 
agreement between the government of the United States and the 
government of Colombia that was signed on November 22, 2006. It 
would provide for tariff reductions and other changes in law 
related to implementation of the agreement. It also would 
retroactively extend the Andean Trade Preference Act (ATPA) 
from February 12, 2011, through July 31, 2013, while removing 
Colombia from eligibility for trade preferences under that 
program. The bill would extend user fees collected by Customs 
and Border Protection (CBP) that expire under current law, and 
remove an exemption from those fees for travelers to the United 
States from Mexico, Canada, and certain Caribbean countries. It 
also would shift some corporate income tax payments between 
fiscal years.
    The Congressional Budget Office (CBO) and the staff of the 
Joint Committee on Taxation (JCT) estimate that enacting S. 
1641 would reduce revenues by $139 million in 2012 and by about 
$1.5 billion over the 2012-2021 period. CBO estimates that 
enacting S. 1641 would decrease direct spending by $68 million 
in 2012 and by about $1.5 billion over the 2012-2021 period. 
The net impact of those effects is an estimated reduction in 
deficits of $22 million over the 2012-2021 period. Pay-as-you-
go procedures apply because enacting the legislation would 
affect direct spending and revenues.
    Further, CBO estimates that implementing the legislation 
would result in discretionary costs of $4 million over the 
2012-2016 period, assuming the availability of appropriated 
funds.
    CBO has determined that the nontax provisions of S. 1641 
contain no intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act (UMRA), and would impose no costs 
on state, local, or tribal governments.
    CBO has determined that the nontax provisions of the bill 
contain private-sector mandates with costs that would exceed 
the annual threshold established in UMRA for private-sector 
mandates ($142 million in 2011, adjusted annually for 
inflation).
    JCT has determined that the tax provision of S. 1641 
contains no private-sector or intergovernmental mandates as 
defined in UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1641 is shown in the following table. 
The costs of this legislation fall within budget functions 150 
(international affairs), 370 (commerce and housing credit), 750 
(administration of justice), and 800 (general government).
    Basis of estimate: For the purposes of this estimate, CBO 
assumes that S. 1641 will be enacted early in fiscal year 2012.

Revenues

    Under the United States-Colombia trade promotion agreement, 
tariffs on U.S. imports from Colombia would be phased out over 
time. The tariffs would be phased out for individual products 
at varying rates, ranging from immediate elimination on the 
date the agreement enters into force to gradual elimination 
over 10 or more years. According to the U.S. International 
Trade Commission, the United States collected about $9 million 
in customs duties in 2010 on $16 billion of imports from 
Colombia. However, since 1991, imports to the United States 
from Colombia have been subject to reduced tariff rates in 
accordance with the ATPA, which was expanded in legislation 
enacted in 2002, and expired on February 12, 2011. The ATPA 
overlaps to a large extent with the trade promotion agreement 
that would be implemented by this bill. As a result, enacting 
the bill would effectively extend the ATPA for Colombia, while 
also lowering tariff rates not covered by the ATPA.
    Based on expected imports from Colombia, CBO estimates that 
implementing the tariff schedule outlined in the U.S.-Colombia 
trade promotion agreement would reduce revenues by $55 million 
in 2012, and by about $1.4 billion over the 2012-2021 period, 
net of income and payroll tax offsets.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           By fiscal year, in millions of dollars--
                                                             -----------------------------------------------------------------------------------------------------------------------------------
                                                                 2012       2013       2014       2015       2016       2017       2018       2019       2020       2021    2012-2016  2012-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       CHANGES IN REVENUES

Preferential Trade Agreement................................        -55       -100       -110       -122       -135       -148       -159       -171       -185       -199       -522     -1,384
Extend ATPA.................................................        -84        -19          0          0          0          0          0          0          0          0       -103       -103
Corporate Payment Shift.....................................          0          0          0          0        344       -344          0          0          0          0        344          0
                                                             -----------------------------------------------------------------------------------------------------------------------------------
    Estimated Revenues......................................       -139       -119       -110       -122        209       -492       -159       -171       -185       -199       -282     -1,488

                                                                                  CHANGES IN DIRECT SPENDING\a\

Extend Customs User Fees:
    Estimated Budget Authority..............................          0          0          0          0          0          0          0          0          0       -754          0       -754
    Estimated Outlays.......................................          0          0          0          0          0          0          0          0          0       -754          0       -754
Eliminate COBRA Fee Exemption:
    Estimated Budget Authority..............................        -83       -111       -112       -113       -114       -116       -117       -118        -35        -80       -533       -999
    Estimated Outlays.......................................        -83       -111       -112       -113       -114       -116       -117       -118        -35        -80       -533       -999
Exemption from Merchandise Processing Fee:
    Estimated Budget Authority..............................         15         26         28         29         30         32         34         35         10          5        128        243
    Estimated Outlays.......................................         15         26         28         29         30         32         34         35         10          5        128        243
    Total, Direct Spending\a\ Estimated Budget:
        Authority...........................................        -68        -85        -84        -84        -84        -84        -83        -83        -25       -829       -405     -1,510
        Estimated Outlays...................................        -68        -85        -84        -84        -84        -84        -83        -83        -25       -829       -405     -1,510

                                                    NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND RECEIPTS

Impact on Deficit...........................................         71         34         26         38       -293        408         76         88        160       -630       -123       -22
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office and the staff of the Joint Committee on Taxation.
Note: Components may not sum to totals because of rounding.
ATPA = Andean Trade Preference Act; COBRA = Consolidated Omnibus Budget Reconciliation Act.
a. In addition, CBO estimates that implementing the provisions of S. 1641 would have a discretionary cost of $4 million over the 2012-2016 period, assuming appropriation of the necessary
  amounts.

    This estimate includes the effects of increased imports 
from Colombia 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 Colombia 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 Colombia would 
displace imports from other countries.
    The Generalized System of Preferences, which allows duty-
free importation of a wide range of products from 129 
countries, including Colombia, expired on December 31, 2010. If 
those preferences were extended through July 13, 2013, in other 
legislation enacted prior to S. 1641 (such as in H.R. 2832 as 
passed by the Senate on September 22, 2011), then the revenue 
loss from implementing the tariff reductions in S. 1641 would 
be reduced by $6 million over the 2012-2021 period, to $1.378 
billion instead of $1.384 billion.
    Under S. 1641, the ATPA trade preferences, which expired on 
February 12, 2011, would be extended, retroactively, for each 
of the beneficiary countries: Colombia and Ecuador. (The free 
trade agreement with Peru supersedes that country's ATPA 
preferences. Bolivia, which had been a member country in 
previous years, had its eligibility revoked in June 2009.) The 
preferences would be extended from February 12, 2011, through 
July 31, 2013, with Colombia losing its eligibility for ATPA 
preferences upon enactment of the trade promotion agreement. 
CBO estimates that the retroactive extension of the ATPA 
preferences, including removing Colombia for eligibility, would 
reduce revenues from customs duties by $84 million in 2012, 
including refunds of duties paid by importers in 2011, and $19 
million in 2013, net of income and payroll tax offsets.
    S. 1641 also would shift payments of corporate estimated 
taxes between fiscal years 2016 and 2017. For corporations with 
at least $1 billion in assets, the bill would increase the 
portion of corporate estimated payments due from July through 
September of 2016. JCT estimates that this change would 
increase revenues by $344 million in 2016 and decrease revenues 
by $344 million in 2017.

Direct Spending

    Under current law, user fees collected by CBP will expire 
in January of 2020. The bill would permit CBP to collect COBRA 
fees (which were established in the Consolidated Omnibus Budget 
Reconciliation Act of 1985) from December 9, 2020, through 
August 31, 2021, and to collect merchandise processing fees 
from August 3, 2021, through September 30, 2021. CBO estimates 
that those changes would increase offsetting receipts (a credit 
against direct spending) by about $750 million in 2021.
    Under current law, certain travelers arriving in the United 
States from Mexico, Canada, and some Caribbean countries are 
exempt from paying COBRA fees; the bill would remove this 
exemption. CBO estimates that this would increase offsetting 
receipts by about $1 billion over the 2012-2021 period.
    In addition, the bill would exempt imports from Colombia 
from merchandise processing fees. CBO estimates that this would 
reduce offsetting receipts by about $130 million over the five-
year period and by $245 million over the 10-year period.

Spending Subject to Appropriation

    Implementing provisions of S. 1641 would increase the costs 
of several agencies affected by the bill including:
           The Department of Commerce to provide 
        administrative support for dispute-settlement panels 
        established in the agreement,
           The International Trade Commission to 
        conduct investigations, if petitioned, into whether 
        Colombian imports might threaten or cause serious 
        injury to domestic competitors, and
           The Department of the Treasury and the 
        United States Trade Representative to establish 
        regulations to carry out provisions of the agreement.
    Based on information from the agencies, CBO estimates that 
these activities would cost $4 million over the 2012-2016 
period, assuming appropriation of the necessary amounts.
    Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

                                  CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 1641 AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FINANCE ON OCTOBER 11, 2011
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           By fiscal year, in millions of dollars--
                                                             -----------------------------------------------------------------------------------------------------------------------------------
                                                                 2012       2013       2014       2015       2016       2017       2018       2019       2020       2021    2012-2016  2012-2021
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact..............................         71         34         26         38       -293        408         76         88        160       -630       -123        -22
Memorandum:
    Changes in Revenues.....................................       -139       -119       -110       -122       -209       -492       -159       -171       -185       -199       -282     -1,488
    Changes in Outlays......................................        -68        -85        -84        -84        -84        -84        -83        -83        -25       -829       -405     -1,510
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments: 
CBO has determined that the nontax provisions of S. 1641 
contain no intergovernmental mandates as defined in UMRA, and 
would impose no costs on state, local, or tribal governments. 
JCT has determined that the tax provision of the bill contains 
no intergovernmental mandates as defined in UMRA.
    Estimated impact on the private sector: CBO has determined 
that the nontax provisions of S. 1641 would impose private-
sector mandates, as defined in UMRA, by extending the customs 
user fees, increasing merchandise processing fees, and by 
enforcing new record-keeping requirements. CBO estimates that 
the aggregate costs of those mandates would exceed the annual 
threshold established in UMRA for private-sector mandates ($142 
million in 2011, adjusted annually for inflation). JCT has 
determined that the tax provision of S. 1641 contains no 
private-sector mandates as defined in UMRA.
    Previous CBO estimate: On October 5, 2011, CBO transmitted 
a cost estimate for H.R. 3078, the United States-Colombia Trade 
Promotion Agreement Implementation Act, as ordered reported by 
the House Committee on Ways and Means on October 5, 2011. S. 
1641 and H.R. 3078 are similar, and the CBO cost estimates are 
the same.
    Estimate prepared by: Federal Revenues: Kalyani 
Parthasarathy; Federal Spending: Sunita D'Monte, Mark 
Grabowicz, Matthew Pickford, and Susan Willie; Impact on State, 
Local, and Tribal Governments: Lisa Ramirez-Branum; Impact on 
the Private Sector: Marin Randall.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis; Frank Sammartino, Assistant Director for 
Tax Analysis.

          III. REGULATORY IMPACT OF THE BILL AND OTHER MATTERS

    Pursuant to the requirements of paragraph 11(b) of Rule 
XXVI of the Standing Rules of the Senate, the Committee states 
that the bill will not significantly regulate any individuals 
or businesses, will not affect the personal privacy of 
individuals, and will result in no significant additional 
paperwork.
    The following information is provided in accordance with 
the Unfunded Mandates Reform Act of 1995 (``UMRA'') (Pub. L. 
No. 104-04). The Committee has reviewed the provisions of S. 
1641 as approved by the Committee on October 11, 2011. In 
accordance with the requirements of UMRA, the Committee has 
determined that the bill contains no intergovernmental 
mandates, as defined in the UMRA, and will not affect the 
budgets of State, local, or tribal governments. The Committee 
has determined that S. 1641 would impose private-sector 
mandates, as defined in UMRA, by extending customs user fees, 
increasing merchandise processing fees, and enforcing new 
record-keeping requirements. CBO estimates that the aggregate 
costs of those mandates would exceed the annual threshold 
established in UMRA for private-sector mandates ($142 million 
in 2011, adjusted annually for inflation).

 IV. ADDITIONAL VIEWS OF RANKING MEMBER ORRIN G. HATCH AND SENATOR JON 
                                  KYL

    Several elements of this report deserve significant 
elaboration. The May 10, 2007 agreement (May 10th Agreement) 
negotiated by some in Congress and the Bush Administration was 
intended to secure votes for the four free trade agreements 
(FTAs) with Colombia, Panama, Peru, and South Korea, but it did 
not reflect an agreement on a new trade policy as the Majority 
contends. We were not part of the negotiations of these new 
provisions. We continue to harbor misgivings over several 
aspects of these changes, including in the areas of labor, the 
environment, and intellectual property. The May 10th Agreement, 
however, failed--as only a vote on Peru was allowed by Democrat 
congressional leaders during the 110th Congress--and the other 
three FTAs had to wait for more than four years before a vote 
was secured. The Bush administration and the governments of 
Colombia, Panama, Peru, and South Korea upheld their ends of 
the bargain by incorporating the May 10th Agreement changes 
into each FTA, but the Democrat leadership of Congress refused 
to honor its part of the May 10th Agreement and allow a vote on 
any of the three remaining FTAs. The Obama administration 
continued this pattern of delay for nearly three years.
    In the area of labor, the revised Colombia FTA incorporates 
binding labor obligations predicated upon norms contained in 
the International Labor Organization Declaration on Fundamental 
Principles and Rights at Work and its Follow-up (1998) (ILO 
Declaration). Over the years, we have expressed serious 
concerns that by incorporating binding dispute resolution for 
obligations which rely upon amorphous and ever-evolving 
standards set by an international organization, our labor 
chapters potentially expose the United States to risk of 
sanction--especially if these standards were to be construed 
expansively in the context of dispute resolution. 
Unfortunately, we believe that recent actions by the Obama 
administration are compounding this risk.
    Labor provisions in our existing trade agreements are being 
interpreted by the Obama administration in a manner which 
appears to be increasingly divorced from any nexus to trade. 
Expansive interpretations of the labor obligations contained in 
trade agreements, and the blurring of their nexus to trade, 
risk setting precedents which could result in unintended 
consequences for the United States in the context of future 
labor-related disputes.
    The purpose of trade agreements is to foster increased 
growth in the economy of the United States and those of our 
trading partners, which in turn, helps raise the standards of 
living for U.S. and foreign workers. Assessing trade sanctions 
for labor violations is counterproductive as it impedes 
economic growth in the United States and the partner country, 
thereby punishing the very workers it purports to assist.
    Rather than seeking to punish countries and their workers 
for labor protections deemed to be inadequate, the United 
States should be encouraging the development of capacity-
building and technical assistance programs that more 
effectively improve labor conditions on the ground in poor 
developing countries. We should work to ensure that the labor 
provisions in the Colombia FTA, and any substantive labor 
obligations in future trade agreements: (1) are clear and 
narrowly tailored so as not to expose the United States to the 
risk of retaliatory sanctions; (2) are not used as a means to 
change U.S. labor law indirectly by potentially binding the 
United States to international standards that exceed current 
U.S. law; (3) allow flexibility for the United States and our 
trading partners to adopt and change labor laws as needed; (4) 
are closely linked to trade; (5) actually help workers both in 
the United States and abroad; and (6) do not unduly impede U.S. 
businesses operating in markets abroad.
    The Committee report asserts that the intellectual property 
rights (IPR) provisions in the Colombia FTA were revised under 
the May 10th Agreement to ``balance the need for access to 
medicines with patent protections for pharmaceutical 
products''. We do not believe that is what occurred. On the 
contrary, these new provisions impede the development of new 
treatments and cures, while putting an important, world-
leading, and job-creating U.S. industry at a disadvantage.
    First, the Colombia FTA makes patent linkage optional. 
Linkage requires a country, before it approves a generic 
medicine for sale, to ensure that the brand-name medicine is no 
longer under patent. Without linkage, governments can help 
facilitate patent infringement. Linkage doesn't hinder access 
to medicines and is simply about protecting basic patent 
rights. The changes to the Colombia FTA replace this simple 
enforcement procedure with a complex one.
    Second, in certain circumstances, the changes shorten the 
period of data exclusivity for innovative medicines, 
authorizing a shorter period than we require here in the United 
States. This change is not only unfair to U.S. innovators but 
devalues the incentive for launching new drugs in developing 
countries. In developing countries, it is often difficult to 
enforce patent rights. But data protection is effective and 
relatively easy to administer. It often provides the only real 
protection biopharmaceutical companies have when they invest 
significant resources to launch new products. You take away the 
protection and you take away the incentive to launch.
    Finally, the template no longer requires countries to add 
time to patent terms for pharmaceuticals to make up for undue 
delays in marketing approval or patent grant. The United States 
requires patent restoration, so why not require the same 
abroad? Critics argue that patent terms are long enough as they 
are. But without patent term restoration, we actually move IPR 
protection in the other direction. Without patent term 
restoration, the effective patent term could actually shrink 
significantly.
    Some argue that strong intellectual property rights 
protection result in some countries having poor health care. We 
strongly disagree. In many of these poor countries, IPR 
protection for pharmaceuticals and medical devices is weak at 
best. On top of that, the vast majority of drugs on the World 
Health Organization's (WHO) essential medicines list are not 
protected by patent. The fact is that without IPR protection, 
there would be few medicines for anyone to access.
    Poor infrastructure, high taxes and tariffs, ineffective 
health care systems, and misplaced government funding 
priorities are far more acute problems when it comes to access 
to medicine. To cite one example, until 2005, India did not 
grant product patents for pharmaceuticals. Yet India's access 
to medicines was woeful. WHO statistics indicate that only 20 
percent of India's population had access to unpatented 
essential medicines from 2000-2007. Access remains a challenge 
in India today, despite the fact that more than 95 percent of 
the medicines available in India are not covered by patents. As 
we continue to strive to achieve the appropriate balance 
between innovation and access to medicines, we hope that the 
Obama and future administrations will take these factors into 
consideration.
    Finally, we would note our extreme disappointment in 
President Obama's unprecedented delay in sending the Colombia 
FTA to Congress for our consideration. For far too long, U.S. 
workers, innovators, and farmers have been barred from taking 
advantage of this trade agreement. While the United States 
delayed, others countries entered into trade agreements with 
Colombia that gave their workers better access to its growing 
market. We hope the Finance Committee will continue working 
together to ensure that future agreements are considered 
expeditiously.

               ADDITIONAL VIEWS OF SENATOR CHUCK GRASSLEY

    The Majority has stated that, ``On May 10, 2007, the Bush 
Administration and the bipartisan leadership of the U.S. Senate 
Committee on Finance and the U.S. House of Representatives 
Committee on Ways and Means reached an agreement on trade 
policy.'' However, as Ranking Member of the Finance Committee 
during that time period, I strongly disagree with the 
Majority's statement that the agreement was an agreement ``on 
trade policy.'' The Majority's terminology implies the terms of 
the agreement reached on May 10, 2007 with President Bush are 
somehow now the blueprint for future trade agreements. This is 
not the case. The May 10th agreement was made out of necessity 
by President Bush as he attempted to gain support from the 
democratically-controlled Congress for approving the South 
Korea, Panama, Peru, and Colombia trade agreements. As I 
expressed at the time, I have reservations about many of the 
provisions included in the May 10th agreement, including the 
terms regarding labor, environment, and intellectual property. 
I continue to have reservations about the May 10th provisions. 
Most, if not all, of the members on our side do not see the May 
10th provisions as part of a blueprint for future trade 
agreements. Those provisions were part of a bargain between 
President Bush and Democrat leaders in Congress, for those 
specific free trade agreements at the time, not an ``agreement 
on trade policy'' as the Majority suggests.

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

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, 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, and 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)(A) Except as provided in 
subsection (a)(5)(B) of this section, no fee may be charged 
under subsection (a) of this section for customs services 
provided in connection with--
          [(i) the arrival of any passenger whose journey--
                  [(I) originated in--
                          [(aa) Canada,
                          [(bb) Mexico,
                          [(cc) a territory or possession of 
                        the United States, or
                          [(dd) any adjacent island (within the 
                        meaning of section 101(b)(5) of the 
                        Immigration and Nationality Act (8 
                        U.S.C. 1101(b)(5))), or
                  [(II) originated in the United States and was 
                limited to--
                          [(aa) Canada,
                          [(bb) Mexico,
                          [(cc) territories and possessions of 
                        the United States, and
                          [[dd) such adjacent islands;]
          (i) the arrival of any passenger whose journey--
                  (I) originated in a territory or possession 
                of the United States; or
                  (II) originated in the United States and was 
                limited to territories and possessions of the 
                United States;

           *       *       *       *       *       *       *

    (20) No fee may be charged under subsection (a) (9) or (10) 
with respect to goods that qualify as originating goods under 
section 203 of the United States-Colombia Trade Promotion 
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.

           *       *       *       *       *       *       *

    (j) Effective Dates.--(1) * * *

           *       *       *       *       *       *       *

          (3)(A) * * *

           *       *       *       *       *       *       *

                  (C)(i) Notwithstanding subparagraph (A), fees 
                may be charged under paragraphs (9) and (10) of 
                subsection (a) during the period beginning on 
                August 3, 2021, and ending on September 30, 
                2021.
                  (ii) Notwithstanding subparagraph (B)(i), 
                fees may be charged under paragraphs (1) 
                through (8) of subsection (a) during the period 
                beginning on December 9, 2020, and ending on 
                August 31, 2021.

           *       *       *       *       *       *       *


TARIFF ACT OF 1930

           *       *       *       *       *       *       *


TITLE IV-- ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


Part III--Ascertainment, Collection, and Recovery of Duties

           *       *       *       *       *       *       *



SEC. 508. RECORDKEEPING.

    (a) * * *

           *       *       *       *       *       *       *

    (j) Certification of Origin for Goods Exported Under the 
United States-Colombia Trade Promotion 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) the purchase, cost, and value 
                        of, and payment for, all materials, 
                        including indirect materials, used in 
                        the production of the good; and
                          (iii) the production of the good in 
                        the form in which it was exported.
                  (B) CTPA certification of origin.--The term 
                ``CTPA certification of origin'' means the 
                certification established under article 4.15 of 
                the United States-Colombia Trade Promotion 
                Agreement that a good qualifies as an 
                originating good under such Agreement.
          (2) Exports to colombia.--Any person who completes 
        and issues a CTPA certification 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 certification 
        or copies thereof).
          (3) Retention period.--The person who issues a CTPA 
        certification of origin shall keep the records and 
        supporting documents relating to that certification of 
        origin for a period of at least 5 years after the date 
        on which the certification is issued.

           *       *       *       *       *       *       *


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

    (a) * * *

           *       *       *       *       *       *       *

    (k) Denial of Preferential Tariff Treatment Under The 
United States-Colombia Trade Promotion Agreement.--If U.S. 
Customs and Border Protection or U.S. Immigration and Customs 
Enforcement of the Department of Homeland Security finds 
indications of a pattern of conduct by an importer, exporter, 
or producer of false or unsupported representations that goods 
qualify under the rules of origin provided for in section 203 
of the United States-Colombia Trade Promotion Agreement 
Implementation Act, U.S. Customs and Border Protection, in 
accordance with regulations issued by the Secretary of the 
Treasury, may suspend preferential tariff treatment under the 
United States-Colombia Trade Promotion Agreement to entries of 
identical goods covered by subsequent representations by that 
importer, exporter, or producer until U.S. Customs and Border 
Protection determines that representations of that person are 
in conformity with such section 203.

           *       *       *       *       *       *       *


SEC. 520. REFUNDS AND ERRORS.

    (a) * * *

           *       *       *       *       *       *       *

    (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, section 202 of the United States-Chile Free 
Trade Agreement Implementation Act, section 203 of the 
Dominican Republic-Central America-United States Free Trade 
Agreement Implementation Act, section 202 of the United States-
Oman Free Trade Agreement Implementation Act, [or] section 203 
of the United States-Peru Trade Promotion Agreement 
Implementation Act [for which], or section 203 of the United 
States-Colombia Trade Promotion 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) * * *

           *       *       *       *       *       *       *


PART V--ENFORCEMENT PROVISIONS

           *       *       *       *       *       *       *



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

    (a) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (12) Prior disclosure regarding claims under the 
        united states-colombia trade promotion 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 203 
        of the United States-Colombia Trade Promotion Agreement 
        Implementation Act if the importer, in accordance with 
        regulations issued by the Secretary of the Treasury, 
        promptly and voluntarily makes a corrected declaration 
        and pays any duties owing with respect to that good.

           *       *       *       *       *       *       *

    (k) False Certifications of Origin Under the United States-
Colombia Trade Promotion 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 CTPA 
        certification of origin (as defined in section 508 of 
        this Act) that a good exported from the United States 
        qualifies as an originating good under the rules of 
        origin provided for in section 203 of the United 
        States-Colombia Trade Promotion 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) Prompt and voluntary disclosure of incorrect 
        information.--No penalty shall be imposed under this 
        subsection if, promptly after an exporter or producer 
        that issued a CTPA certification of origin has reason 
        to believe that such certification 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 certification 
        was issued.
          (3) Exception.--A person shall not be considered to 
        have violated paragraph (1) if--
                  (A) the information was correct at the time 
                it was provided in a CTPA certification of 
                origin but was later rendered incorrect due to 
                a change in circumstances; and
                  (B) the person promptly and voluntarily 
                provides written notice of the change in 
                circumstances to all persons to whom the person 
                provided the certification.

           *       *       *       *       *       *       *


TRADE ACT OF 1974

           *       *       *       *       *       *       *


       TITLE II--RELIEF FROM INJURY CAUSED BY IMPORT COMPETITION

CHAPTER 1--POSITIVE ADJUSTMENT BY INDUSTRIES INJURED BY IMPORTS

           *       *       *       *       *       *       *



SEC 202. INVESTIGATIONS, DETERMINATIONS, AND RCOMMENDATIONS 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, title II of the 
        United States-Jordan Free Trade Area Implementation 
        Act, title III of the United States-Chile Free Trade 
        Agreement Implementation Act, title III of the United 
        States-Singapore Free Trade Agreement Implementation 
        Act, title III of the United States-Australia Free 
        Trade Agreement Implementation Act, title III of the 
        United States-Morocco Free Trade Agreement 
        Implementation Act, title III of the Dominican 
        Republic-Central America-United States Free Trade 
        Agreement Implementation Act, title III of the United 
        States-Bahrain Free Trade Agreement Implementation Act, 
        title III of the United States-Oman Free Trade 
        Agreement Implementation Act, [and] title III of the 
        United States-Peru Trade Promotion Agreement 
        Implementation Act, and title III of the United States-
        Colombia Trade Promotion 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.

           *       *       *       *       *       *       *


TRADE AGREEMENTS ACT OF 1979

           *       *       *       *       *       *       *


TITLE III--GOVERNMENT PROCUREMENT

           *       *       *       *       *       *       *


SEC. 308. DEFINITIONS.

    As used in this title--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Eligible products.--
                  (A) In general.--The term ``eligible 
                product'' means, with respect to any foreign 
                country or instrumentality that is--
                          (i) * * *

           *       *       *       *       *       *       *


           *       *       *       *       *       *       *

                          (ix) a party to the United States-
                        Colombia Trade Promotion Agreement, a 
                        product or service of that country or 
                        instrumentality which is covered under 
                        that agreement for procurement by the 
                        United States.

           *       *       *       *       *       *       *


                      ANDEAN TRADE PREFERENCE ACT

TITLE II--TRADE PREFERENCE FOR THE ANDEAN REGION

           *       *       *       *       *       *       *


SEC. 204. ELIGIBLE ARTICLES.

    (a) * * *
    (b) Exceptions and Special Rules.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Apparel articles and certain textile articles.--
                  (A) * * *
                  (B) Covered articles.--The apparel articles 
                referred to in subparagraph (A) are the 
                following:
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) Apparel articles assembled in 1 
                        or more atpdea beneficiary countries 
                        from regional fabrics or regional 
                        components.--(I) * * *
                          (II) The preferential treatment 
                        referred to in subclause (I) shall be 
                        extended in the 1-year period beginning 
                        October 1, 2002, and in each of the [8 
                        succeeding 1-year periods] 10 
                        succeeding 1-year periods, to imports 
                        of apparel articles in an amount not to 
                        exceed the applicable percentage of the 
                        aggregate square meter equivalents of 
                        all apparel articles imported into the 
                        United States in the preceding 12-month 
                        period for which data are available.
                          (III) For purposes of subclause (II), 
                        the term ``applicable percentage'' 
                        means--
                                  (aa) * * *
                                  (bb) for the 1-year period 
                                beginning October 1, 2007 [and 
                                for the succeeding 3-year 
                                period] and for the succeeding 
                                5-year period, the percentage 
                                determined under item (aa) for 
                                the 1-year period beginning 
                                October 1, 2006.

           *       *       *       *       *       *       *

                          (v) Certain other apparel articles.--
                                  (I) * * *
                                  (II) Limitation.--During the 
                                1-year period beginning on 
                                October 1, 2003, and during 
                                each of the [7 succeeding 1-
                                year periods] 9 succeeding 1-
                                year periods, apparel articles 
                                described in subclause (I) of a 
                                producer or an entity 
                                controlling production shall be 
                                eligible for preferential 
                                treatment under this paragraph 
                                only if the aggregate cost of 
                                fabrics (exclusive of all 
                                findings and trimmings) formed 
                                in the United States that are 
                                used in the production of all 
                                such articles of that producer 
                                or entity that are entered and 
                                eligible under this clause 
                                during the preceding 1-year 
                                period is at least 75 percent 
                                of the aggregate declared 
                                customs value of the fabric 
                                (exclusive of all findings and 
                                trimmings) contained in all 
                                such articles of that producer 
                                or entity that are entered and 
                                eligible under this clause 
                                during the preceding 1-year 
                                period.

           *       *       *       *       *       *       *

                  (E) Bilateral emergency actions.--
                          (i) * * *
                          (ii) Rules relating to bilateral 
                        emergency action.--For purposes of 
                        applying bilateral emergency action 
                        under this subparagraph--
                                  (I) * * *
                                  (II) the term ``transition 
                                period'' in section 4 of the 
                                Annex shall mean the period 
                                ending [February 12, 2011] July 
                                31, 2013; and

           *       *       *       *       *       *       *


SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.

    (a) In General.--No duty-free treatment or other 
preferential treatment extended to beneficiary countries under 
this title shall--
          (1) remain in effect--
                  (A) with respect to Colombia after [February 
                12, 2011] July 31, 2013; and

           *       *       *       *       *       *       *

          (2) remain in effect with respect to Ecuador after 
        June 30, 2009, except that duty-free treatment and 
        other preferential treatment under this title shall 
        remain in effect with respect to Ecuador during the 
        period beginning on July 1, 2009, and ending on 
        [February 12, 2011] July 31, 2013, unless the President 
        reviews the criteria set forth in section 203, and on 
        or before June 30, 2009, reports to the Committee on 
        Finance of the Senate and the Committee on Ways and 
        Means of the House of Representatives pursuant to 
        subsection (b) that--
                  (A) * * *

           *       *       *       *       *       *       *


                                  
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