To provide temporary duty suspension on products from Sri Lanka.

Summary: Sri Lanka Tsunami Temporary Economic Relief Act of 2006 - Declares Sri Lanka eligible for duty-free treatment for any article that is the growth, product, or manufacture of such country meeting specified requirements if the President certifies to Congress that Sri Lanka: (1) has established or is progressing toward specified political, economic, and social reforms; (2) does not engage in activities that undermine U.S. security or foreign policy; (3) does not engage in gross violations of human rights or activities in support of international terrorism; and (4) Sri Lanka otherwise meets the eligibility requirements set forth in the Trade Act of 1974.

Applies such provisions until the earlier of five years or the date on which a free trade agreement between the United States and Sri Lanka enters into force with respect to the United States under the Bipartisan Trade Promotion Authority Act of 2002.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Sri Lanka Tsunami Temporary Economic 
Relief Act of 2006''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) On December 26, 2004, a devastating earthquake occurred 
        in the Indian Ocean, causing a tsunami that wrecked havoc on 
        the island nation of Sri Lanka.
            (2) More than 70 percent of the coastline in Sri Lanka was 
        affected by the tidal wave, displacing more than 800,000 
        people, injuring more that 14,000, and killing more than 40,000 
        out of a population of just over 19,000,000 living in a land 
        mass equivalent to the size of West Virginia.
            (3) Nearly 5,000 families have been displaced, with more 
        than 90,000 homes destroyed and more than 20,000 homes 
        partially damaged.
            (4) Sri Lanka lost 22 hospitals, 77 field medical centers, 
        68 medical clinics, and 137 schools.
            (5) The tourist industry, which had only begun to rebound 
        after more than 20 years of civil war, suffered a loss of more 
        than 4,000 hotel rooms that are no longer useable.
            (6) The main roads and railway system which circumvented 
        the country along the flat coastline was devastated, cutting 
        off access to the areas of destruction.
            (7) In addition to the immediate loss of lives and 
        facilities, Sri Lanka is facing a crisis of restoring 
        industries.
            (8) The fishing industry of Sri Lanka was devastated, as 80 
        percent of Sri Lanka's fishing boats were destroyed, causing a 
        major loss of a nationwide source of nutrition, as well as 
        employment for an estimated 170,000 fishermen.
            (9) Ten of the nation's 12 fishing harbors were destroyed, 
        as well as most of the 50 plants used for building small boats.
            (10) The industry's nets and land storage and 
        transportation facilities were destroyed, as well as the ice 
        making facilities for the storage facilities.
            (11) The coastal estuary sites, where shrimp and small fish 
        were farmed, and as farm lands located inland from the shore, 
        have been silted up and destroyed.
            (12) More than 40 percent of the population depended on the 
        fishing industry for its livelihood, and 11 percent of the 
        population depended on agriculture.
            (13) Former Presidents George Bush and Bill Clinton 
        estimate that it will require billions of dollars to rebuild 
        the affected countries, and at least three to five years to do 
        so.
            (14) Sri Lanka's most dynamic sectors had been food 
        processing, textiles and apparel, food and beverages, 
        telecommunications, and insurance and banking. Agriculture 
        accounted for 20.1 percent of gross domestic product (GDP) in 
        2003, while industry, primarily garments and leather goods, 
        food processing, chemicals, refined petroleum, wood products, 
        basic metal products, and paper products, accounted for 26.3 
        percent of GDP.
            (15) The inland and leeward plants that were not affected 
        by the tsunami need unrestricted market access to increase 
        production, to offer employment to those who lost jobs and or 
        have moved inland, and to maintain positive economic growth, 
        stability, and democracy in the country.
            (16) The tsunami has forced the government and the rebel 
        forces in Sri Lanka to work together on certain programs, 
        which, through external support, can re-energize peace talks.
            (17) Before the tsunami occurred, Sri Lanka had implemented 
        an economic reform program to open its economy to international 
        competition that will lead to increased growth and 
        international trade and further foreign investment.
            (18) The United States, through opening trade, has an 
        opportunity to support Sri Lanka in its relief efforts, 
        economic reform, peace process, and rebuilding process.

SEC. 3. TRADE ENHANCEMENT.

    (a) Eligibility Requirements.--Sri Lanka shall be eligible for 
duty-free treatment under subsection (c)--
            (1) if the President determines and certifies to Congress 
        that Sri Lanka--
                    (A) has established, or is making continual 
                progress toward establishing--
                            (i) a market-based economy that protects 
                        private property rights, incorporates an open 
                        rules-based trading system, and minimizes 
                        government interference in the economy through 
                        measures such as price controls, subsidies, and 
                        government ownership of economic assets;
                            (ii) the rule of law, political pluralism, 
                        and the right to due process, a fair trial, and 
                        equal protection under the law;
                            (iii) the elimination of barriers to United 
                        States trade and investment, including by--
                                    (I) the provision of national 
                                treatment and measures to create an 
                                environment conducive to domestic and 
                                foreign investment;
                                    (II) the protection of intellectual 
                                property; and
                                    (III) the resolution of bilateral 
                                trade and investment disputes;
                            (iv) economic policies to reduce poverty, 
                        increase the availability of health care and 
                        educational opportunities, expand physical 
                        infrastructure, promote the development of 
                        private enterprise, and encourage the formation 
                        of capital markets through micro-credit or 
                        other programs;
                            (v) a system to combat corruption and 
                        bribery, such as signing and implementing the 
                        Convention on Combating Bribery of Foreign 
                        Public Officials in International Business 
                        Transactions; and
                            (vi) protection of internationally 
                        recognized worker rights, including the right 
                        of association, the right to organize and 
                        bargain collectively, a prohibition on the use 
                        of any form of forced or compulsory labor, a 
                        minimum age for the employment of children, and 
                        acceptable conditions of work with respect to 
                        minimum wages, hours of work, and occupational 
                        safety and health;
                    (B) does not engage in activities that undermine 
                United States national security or foreign policy 
                interests; and
                    (C) does not engage in gross violations of 
                internationally recognized human rights or provide 
                support for acts of international terrorism and 
                cooperates in international efforts to eliminate human 
                rights violations and terrorist activities; and
            (2) subject to the authority granted to the President under 
        subsections (a), (d), and (e) of section 502 of the Trade Act 
        of 1974 (19 U.S.C. 2462(a), (d), and (e)), if Sri Lanka 
        otherwise meets the eligibility criteria set forth in section 
        502 of the Trade Act of 1974.
    (b) Continuing Compliance.--If the President determines that Sri 
Lanka is not making continual progress in meeting the requirements 
described in subsection (a)(1), the President shall terminate the 
eligibility of Sri Lanka for the preferential treatment under 
subsection (c).
    (c) Preferential Treatment.--
            (1) In general.--Subject to subsections (a) and (b), duty-
        free treatment shall apply to any article that is the growth, 
        product, or manufacture of Sri Lanka and that meets the 
        requirements of paragraph (2).
            (2) Requirements.--
                    (A) In general.--The duty-free treatment provided 
                under paragraph (1) shall apply to any article 
                described in that paragraph if--
                            (i) that article is imported directly from 
                        Sri Lanka into the customs territory of the 
                        United States; and
                            (ii) the direct costs of processing 
                        operations performed on the article in Sri 
                        Lanka is not less than 35 percent of the 
                        appraised value of the article at the time it 
                        enters the customs territory of the United 
                        States.
                    (B) Textile and apparel articles.--The duty-free 
                treatment provided under paragraph (1) applies to a 
                textile and apparel article only if that article meets 
                the requirements set forth in section 102.21 of title 
                19, Code of Federal Regulations, as in effect on 
                November 1, 2005.
                    (C) Determination of 35 percent requirement.--For 
                purposes of determining the percentage referred to in 
                subparagraph (A)(ii), if the cost or value of material 
                produced in the customs territory of the United States 
                (other than the Commonwealth of Puerto Rico) is 
                included with respect to an article that is the growth, 
                product, or manufacture of Sri Lanka, an amount not to 
                exceed 15 percent of the appraised value of the article 
                at the time it enters the customs territory of the 
                United States that is attributable to such United 
                States cost or value may be applied toward determining 
                the percentage referred to in subparagraph (A)(ii).
            (3) Surge mechanism.--
                    (A) Import monitoring.--The Secretary of Commerce 
                shall monitor imports of textile and apparel articles 
                from Sri Lanka on a monthly basis to determine if there 
                has been a surge in imports of such articles. In order 
                to permit public access to preliminary international 
                trade data and to facilitate the early identification 
                of potentially disruptive import surges, the Director 
                of the Office of Management and Budget may grant an 
                exception to the publication dates established for the 
                release of data on United States international trade in 
                covered articles, if the Director notifies the Congress 
                of the early release of the data.
                    (B) Determination of damage or threat thereof.--
                Whenever the Secretary of Commerce determines, based on 
                the data described in subparagraph (A), or pursuant to 
                a written request made by an interested party, that 
                there has been a surge in imports of a textile or 
                apparel article from Sri Lanka, the Secretary shall 
                determine whether such article from such country is 
                being imported in such increased quantities as to cause 
                serious damage, or threat thereof, to the domestic 
                industry producing a like or directly competitive 
                article. If the Secretary's determination is 
                affirmative, the President shall suspend the duty-free 
                treatment provided for such article under paragraph 
                (1). If the inquiry is initiated at the request of an 
                interested party, the Secretary shall make the 
                determination within 60 days after the date of the 
                request.
                    (C) Factors to consider.--In determining whether a 
                domestic industry has been seriously damaged, or is 
                threatened with serious damage, the Secretary shall 
                examine the effect of the imports on relevant economic 
                indicators such as domestic production, sales, market 
                share, capacity utilization, inventories, employment, 
                profits, exports, prices, and investment.
                    (D) Procedure.--
                            (i) Initiation.--The Secretary of Commerce 
                        shall initiate an inquiry within 10 days after 
                        receiving a written request and supporting 
                        information for an inquiry from an interested 
                        party. Notice of initiation of an inquiry shall 
                        be published in the Federal Register.
                            (ii) Participation by interested parties.--
                        The Secretary of Commerce shall establish 
                        procedures to ensure participation in the 
                        inquiry by interested parties.
                            (iii) Notice of determination.--The 
                        Secretary of Commerce shall publish the 
                        determination described in subparagraph (B) in 
                        the Federal Register.
                            (iv) Information available.--If relevant 
                        information is not available on the record or 
                        any party withholds information that has been 
                        requested by the Secretary of Commerce, the 
                        Secretary shall make the determination on the 
                        basis of the facts available. When the 
                        Secretary relies on information submitted in 
                        the inquiry as facts available, the Secretary 
                        shall, to the extent practicable, corroborate 
                        the information from independent sources that 
                        are reasonably available to the Secretary.
                            (v) Interested party.--For purposes of this 
                        paragraph, the term ``interested party'' means 
                        any producer of a like or directly competitive 
                        article, a certified union or recognized union 
                        or group of workers which is representative of 
                        an industry engaged in the manufacture, 
                        production, or sale in the United States of a 
                        like or directly competitive article, a trade 
                        or business association representing producers 
                        or sellers of like or directly competitive 
                        articles, producers engaged in the production 
                        of essential inputs for like or directly 
                        competitive articles, a certified union or 
                        group of workers which is representative of an 
                        industry engaged in the manufacture, 
                        production, or sale of essential inputs for the 
                        like or directly competitive article, or a 
                        trade or business association representing 
                        companies engaged in the manufacture, 
                        production, or sale of such essential inputs.

SEC. 4. EFFECTIVE PERIOD OF DUTY-FREE TREATMENT.

    The duty-free treatment under section 3 shall apply to any article 
that is entered, or withdrawn from warehouse for consumption, into the 
customs territory of the United States during the period beginning on 
the 15th day after the date of the enactment of this Act and ending on 
the earlier of--
            (1) 5 years after that date; or
            (2) the date on which a free trade agreement between the 
        United States and Sri Lanka enters into force with respect to 
        the United States under the Bipartisan Trade Promotion 
        Authority Act of 2002 (19 U.S.C. 3801 et seq.).