To require the President to certify whether the commitments made in the side agreements on the environment and on labor to the North American Free Trade Agreement are being met, and to remove certain benefits from a country that is certified as not meeting those commitments.

Summary: Directs the President to certify annually to the Congress whether or not each North American Free Trade Agreement (NAFTA) country is meeting its commitments under the North American Agreement on Environmental Cooperation and the North American Agreement on Labor Cooperation (NAFTA supplemental agreements). 
Establishes certain economic and trade sanctions for countries that receive a negative certification.  Authorizes the President to waive the requirements of this Act if it is in the U.S. national security interest.

SECTION 1. PRESIDENTIAL CERTIFICATIONS.

    (a) Certifications Regarding Environmental Agreement.--
            (1) Annual certifications.--The President shall, on the 
        basis of the reports prepared under paragraph (2), submit to 
        the Congress, not later than May 31 of each year, a report that 
        certifies whether or not each NAFTA country is meeting 
        commitments made in the North American Agreement on 
        Environmental Cooperation--
                    (A) to ensure that the regulations of that country 
                establish and enforce levels of environmental 
                protection that meet the requirements of its 
                constitution and other laws setting forth the country's 
                policy on environmental protection; and
                    (B) to effectively enforce the laws referred to in 
                paragraph (1).
            (2) Basis of certification.--The Administrator of the 
        Environmental Protection Agency shall prepare for the President 
        an annual report on the enforcement by each NAFTA country of 
        its laws governing environmental protection, and its progress 
        in protecting the environment in accordance with its 
        development. In doing so, the Administrator shall consider the 
        country's--
                    (A) air quality standards;
                    (B) water effluent standards; and
                    (C) hazardous waste disposal standards.
        Each report under this paragraph shall be transmitted to the 
        President not later than 30 days before the date on which the 
        President is required to submit his report under paragraph (1).
    (b) Certifications Regarding Labor Agreement.--
            (1) Annual certifications.--The President shall, on the 
        basis of the reports prepared under paragraph (2), submit to 
        the Congress, not later than May 31 of each year, a report that 
        certifies whether or not each NAFTA country is meeting 
        commitments made in the North American Agreement on Labor 
        Cooperation to comply with the objectives of that Agreement to 
        promote and improve laws protecting worker rights and to 
        promote compliance with these laws by using appropriate methods 
        such as--
                    (A) monitoring and on-site inspection by trained;
                    (B) encouragement of voluntary compliance by 
                employers;
                    (C) mandatory reporting by employers to appropriate 
                governmental authorities; and
                    (E) enforcement actions.
            (2) Basis of certification.--The Secretary of Labor shall 
        prepare for the President an annual report on the enforcement 
        by each NAFTA country of its laws protecting worker rights. In 
        doing so, the Secretary shall consider the country's 
        enforcement of such laws in accordance with the following labor 
        principles (as stated in the Preamble of the North American 
        Agreement on Labor Cooperation):
                    (A) Freedom of association.
                    (B) The right to bargain collectively.
                    (C) The right to strike.
                    (D) Prohibition on forced labor.
                    (E) Restrictions on labor by children and young 
                people.
                    (F) Minimum employment standards.
                    (G) Elimination of employment discrimination.
                    (H) Equal pay for men and women.
                    (I) Prevention of occupational accidents and 
                diseases.
                    (J) Compensation in cases of work accidents and 
                occupational diseases.
        Each report under this paragraph shall be transmitted to the 
        President not later than 30 days before the date on which the 
        President is required to submit his report under paragraph (1).

SEC. 2. DENIAL OF CERTAIN BENEFITS.

    (a) In General.--In any case in which the President certifies in a 
report submitted under section 1 that a NAFTA country is not meeting 
commitments made in the North American Agreement on Environmental 
Cooperation or the North American Agreement on Labor Cooperation, then 
the following shall apply, beginning 30 days after the report is 
submitted, until the next report is submitted under section 1:
            (1) Denial of united states assistance.--That country may 
        not receive any United States assistance (other than 
        humanitarian assistance), including any loans or other 
        extensions of credit or credit guarantees by the United States.
            (2) Opposition to assistance by international financial 
        institutions.--The President shall direct the United States 
        Representative to each international financial institution to 
        use the voice and vote of the United States to oppose any loan 
        or other extension of credit to that country.
            (3) Imposition of tariffs.--The President may impose on 
        products of that country, notwithstanding any other provision 
        of law, tariffs, in addition to those that would otherwise 
        apply, on products in those sectors of the economy directly 
        related to the failure of the country to meet the commitments 
        made in the applicable agreement.
    (b) Waiver.--The President may waive the application of any 
provision of subsection (a) with respect to a country if the President 
determines that it is in the national security interests of the United 
States to do so and the President submits that determination, and the 
rationale for the determination, to the Congress at least 30 days 
before the waiver would take effect.

SEC. 3. DEFINITIONS.

    As used in this Act:
            (1) International financial institution.--The term 
        ``international financial institution'' has the meaning given 
        that term in section 1701(c)(2) of the International Financial 
        Institutions Act (22 U.S.C. 262r(c)(2)).
            (2) Nafta country.--The term ``NAFTA country'' has the 
        meaning given that term in section 2(4) of the North American 
        Free Trade Agreement Implementation Act (19 U.S.C. 3301(4)).
            (3) North american agreement on environmental 
        cooperation.--The term ``North American Agreement on 
        Environmental Cooperation'' has the meaning given that term in 
        section 532(b)(2) of the North American Free Trade Agreement 
        Implementation Act (19 U.S.C. 3472(b)(2)).
            (4) North american agreement on labor cooperation.--The 
        term ``North American Agreement on Labor Cooperation'' has the 
        meaning given that term in section 531(b)(2) of the North 
        American Free Trade Agreement Implementation Act (19 U.S.C. 
        3471(b)(2)).
            (5) United states assistance.--The term ``United States 
        assistance'' means any program of assistance or credits 
        provided by the United States to other countries under any 
        provision of law.