SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Narcotics Control Trade Act of 
1996''.

SEC. 2. AMENDMENT TO TRADE ACT OF 1974.

    (a) In General.--Section 802 of the Trade Act of 1974 is amended to 
read as follows:

``SEC. 802. TARIFF TREATMENT OF PRODUCTS OF NONCOOPERATIVE MAJOR 
              ILLICIT DRUG PRODUCING OR DRUG TRANSIT COUNTRIES.

    ``(a) Annual Reports on Trade.--
            ``(1) In general.--At the time that the report required by 
        section 489(a) of the Foreign Assistance Act of 1961 is 
        submitted each year, the United States Trade Representative, in 
        consultation with the Secretary of State, shall report to the 
        appropriate congressional committees on the bilateral trade 
        relationship between the United States and each major illicit 
        drug producing country and each major drug transit country as 
        determined under section 490(h) of that Act, including the 
        volume of imports entering the United States from that country 
        under any preferential trade program such as that under title V 
        of this Act (relating to the Generalized System of 
        Preferences), the Caribbean Basin Economic Recovery Act, or the 
        Andean Trade Preference Act. The report may be submitted in 
        classified form, as appropriate.
            ``(2) Review of impact of imposition of trade sanctions on 
        major illicit drug producing and major drug transit 
        countries.--The report required by paragraph (1) shall include 
        an assessment, for each of the countries referred to in 
        paragraph (1)--
                    ``(A) by the United States Trade Representative of 
                the anticipated impact of taking any of the actions 
                described in subsection (b) on the economy of the 
                United States, and the economy of such country; and
                    ``(B) by the Secretary of State of the anticipated 
                impact of taking any of the actions described in 
                subsection (b) on the country's cooperation with the 
                United States, or taking steps on its own, to achieve 
                full compliance with the goals and objectives of the 
                United Nations Convention Against Illicit Traffic in 
                Narcotic Drugs and Psychotropic Substances.
            ``(3) Recommendation on trade sanctions.--At the time that 
        the report is submitted under paragraph (1), the Trade 
        Representative, in consultation with the Secretary of State, 
        shall recommend to the President, on the basis of available 
        information, which trade sanctions should be imposed by the 
        President under subsection (b)(2), and  the products to which 
the sanctions should be applied.
            ``(4) Information to be included.--Each report under this 
        subsection shall take into account information from sources 
        available to the United States Trade Representative and the 
        Secretary of State, and such information as may be submitted to 
        the Trade Representative or the Secretary by interested 
        persons.
    ``(b) Required Actions by President.--
            ``(1) In general.--Subject to subsection (c), for each 
        major illicit drug producing or major drug transit country, the 
        President shall, at the time of submission of the report 
        required by section 489(a) of the Foreign Assistance Act of 
        1961, or at any time after the submission of such report, to 
        the extent considered necessary to achieve the purpose of this 
        title--
                    ``(A) deny to any or all of the products of that 
                country nondiscriminatory treatment (most favored 
                nation treatment) or tariff treatment under title V 
                (relating to the Generalized System of Preferences), 
                the Caribbean Basin Economic Recovery Act, the Andean 
                Trade Preference Act, or any other law providing 
                preferential tariff treatment;
                    ``(B) apply to any or all of the dutiable products 
                of that country an additional duty at a rate not to 
                exceed 50 percent ad valorem or the specific rate 
                equivalent;
                    ``(C) apply to one or more duty-free products of 
                that country a duty at a rate not to exceed 50 percent 
                ad valorem;
                    ``(D) take the steps described in subsection (g)(1) 
                or (2), or both, to curtail air transportation between 
                the United States and that country;
                    ``(E) withdraw the personnel and resources of the 
                United States from participation in any arrangement 
                with that country for the pre-clearance of customs by 
                visitors between the United States and that country;
                    ``(F) deny trade benefits under any agreement 
                between that country and the United States establishing 
                a free trade area;
                    ``(G) decline to negotiate with that country for 
                purposes of establishing a free trade area; or
                    ``(H) take any combination of the actions described 
                in subparagraphs (A) through (G).
            ``(2) Requirement for imposition of sanctions.--The 
        President shall take at least one of the actions described in 
        paragraph (1) for any major illicit drug producing or major 
        drug transit country that has been denied certification under 
        subsection (c)(1)(A) for 2 or more consecutive years.
    ``(c) Certification Procedures.--
            ``(1) What must be certified.--Subject to paragraph (4), 
        subsection (b) shall not apply with respect to a country if the 
        President determines and certifies to the Congress at the time 
        of the submission of the report required by section 489(a) of 
        the Foreign Assistance Act of 1961, that--
                    ``(A) during the previous year the country has 
                cooperated fully with the United States, or has taken 
                adequate steps on its own, to achieve full compliance 
                with the goals and objectives established by the United 
                Nations Convention Against Illicit Traffic in Narcotic 
                Drugs and Psychotropic Substances; or
                    ``(B) for a country that would not otherwise 
                qualify for certification under subparagraph (A), the 
                vital national interests of the United States require 
that subsection (b) not be applied with respect to that country.
            ``(2) Considerations regarding cooperation.--In making the 
        determination described in paragraph (1)(A), the President 
        shall consider the extent to which the country has--
                    ``(A) met the goals and objectives of the United 
                Nations Convention Against Illicit Traffic in Narcotic 
                Drugs and Psychotropic Substances, including action on 
                such issues as illicit cultivation, production, 
                distribution, sale, transport and financing, and money 
                laundering, asset seizure, extradition, mutual legal 
                assistance, law enforcement and transit cooperation, 
                precursor chemical control, and demand reduction;
                    ``(B) accomplished the goals described in an 
                applicable bilateral narcotics agreement with the 
                United States or a multilateral agreement; and
                    ``(C) taken legal and law enforcement measures to 
                prevent and punish public corruption, especially by 
                senior government officials, that facilitates the 
                production, processing, or shipment of narcotic and 
                psychotropic substances, or that discourages the 
                investigation or prosecution of such acts.
            ``(3) Information to be included in national interest 
        certification.--If the President makes a certification with 
        respect to a country pursuant to paragraph (1)(B), the 
        President shall include in such certification--
                    ``(A) a full and complete description of the vital 
                national interests placed at risk if action is taken 
                pursuant to subsection (b) with respect to that 
                country; and
                    ``(B) a statement weighing the risk described in 
                subparagraph (A) against the risks posed to the vital 
                national interest of the United States by the failure 
                of such country to cooperate fully with the United 
                States in combating narcotics or to take adequate steps 
                to combat narcotics on its own.
            ``(4) Congressional review.--Subsection (b) shall apply to 
        a country without regard to paragraph (1) if, within 30 
        calendar days after the receipt of a certification submitted 
        under this subsection, the Congress enacts a joint resolution 
        disapproving the determination of the President contained in 
        such certification.
    ``(d) Licit Opium Producing Countries.--The President may make a 
certification under subsection (c)(1)(A) with respect to a major 
illicit drug producing country, or major drug transit country, that is 
a producer of licit opium only if the President determines that such 
country has taken adequate steps to prevent significant diversion of 
its licit cultivation and production into the illicit market, maintains 
production and stockpiles at levels no higher than those consistent 
with licit market demand, and prevents illicit cultivation and 
production.
    ``(e) Duration of Action.--Any action taken by the President under 
subparagraph (A), (B), (C), or (F) of subsection (b)(1) shall apply to 
the products of a foreign country that are entered, or withdrawn from 
warehouse for consumption, during the period that such action is in 
effect.
    ``(f) Recertification.--Any action taken by the President under 
subsection (b) against a country shall remain in effect until--
            ``(1) the President, at the time of submission of the 
        report required by section 489(a) of the Foreign Assistance Act 
        of 1961--
                    ``(A) makes a certification under subsection 
                (c)(1)(A) with respect to that country, if the action 
was taken under subsection (b)(2), or
                    ``(B) makes a certification under subsection (c)(1) 
                with respect to that country, in any other case,
        and the Congress does not enact a joint resolution under 
        subsection (c)(4) disapproving the determination of the 
        President contained in that certification; or
            ``(2) the President, at any other time, makes the 
        certification described in subsection (c)(1)(B) with respect to 
        that country, except that this paragraph applies only if 
        either--
                    ``(A) the President also certifies that--
                            ``(i) that country has undergone a 
                        fundamental change in the government, or
                            ``(ii) there has been a fundamental change 
                        in the conditions that were the reason--
                                    ``(I) why the President had not 
                                made a certification with respect to 
                                that country under subsection 
                                (c)(1)(A), or
                                    ``(II) if he had made such a 
                                certification and the Congress enacted 
                                a joint resolution disapproving the 
                                determination contained in the 
                                certification, why the Congress enacted 
                                that joint resolution; or
                    ``(B) the Congress does not enact a joint 
                resolution disapproving the determination contained in 
                the certification under subsection (c)(1)(B).
        Any certification under subparagraph (A) of paragraph (2) shall 
        discuss the justification for the certification.
    ``(g) Presidential Action Regarding Aviation.--
            ``(1) Suspension of air service.--(A) The President is 
        authorized to notify the government of a country against which 
        is imposed the sanction described in subsection (b)(1)(D) of 
        the President's intention to suspend the authority of foreign 
        air carriers owned or controlled by the government or nationals 
        of that country to engage in foreign air transportation to or 
        from the United States.
            ``(B) Within 10 days after the date of notification of a 
        government under subparagraph (A), the Secretary of 
        Transportation shall take all steps necessary to suspend at the 
        earliest possible date the authority of any foreign air carrier 
        owned or controlled, directly or indirectly, by the government 
        or nationals of that country to engage in foreign air 
        transportation to or from the United States, notwithstanding 
        any agreement relating to air services.
            ``(C) The President may also direct the Secretary of 
        Transportation to take such steps as may be necessary to 
        suspend the authority of any air carrier to engage in foreign 
        air transportation between the United States and that country.
            ``(2) Termination of air service agreement.--(A) The 
        President may direct the Secretary of State to terminate any 
        air service agreement between the United States and a country 
        against which a sanction described in subsection (b)(1)(D) is 
        imposed in accordance with the provisions of that agreement.
            ``(B) Upon termination of an agreement under this 
        paragraph, the Secretary of Transportation shall take such 
        steps as may be necessary to revoke at the earliest possible 
        date the right of any foreign air carrier owned or controlled, 
        directly or indirectly, by the government or nationals of that 
        country to engage in foreign air transportation to or from the 
        United States.
            ``(C) Upon termination of an agreement under this 
        paragraph, the Secretary of Transportation may also revoke the 
        authority of any air carrier to engage in foreign air 
        transportation between the United States and that country.
            ``(3) Exceptions.--The Secretary of Transportation may 
        provide for such exceptions from paragraphs (1) and (2) as the 
        Secretary considers necessary to provide for emergencies in 
        which the safety of an aircraft or its crew or passengers is 
        threatened.
    ``(h) Congressional Review Procedures.--The procedures for 
congressional review contained in section 490(g) of the Foreign 
Assistance Act of 1961 shall apply to the consideration of any joint 
resolution under this section.
    ``(i) Notification.--(1) The President shall notify the appropriate 
congressional committees any time an action is taken under subsection 
(b) with respect to a major illicit drug producing or major drug 
transit country.
    ``(2) The President shall also notify the appropriate congressional 
committees any time an action taken under subsection (b) with respect 
to a major illicit drug producing or major drug transit country is 
modified or suspended.
    ``(j) Definitions.--(1) For purposes of this section, the terms 
`major illicit drug producing country' and `major drug transit country' 
have the meanings such terms have under section 481(e) of the Foreign 
Assistance Act of 1961.
    ``(2) For purposes of this section, the terms `air transportation', 
`air carrier', `foreign air carrier', and `foreign air transportation' 
have the meanings such terms have under section 101 of the Federal 
Aviation Act of 1958 (49 U.S.C. App. 1301).
    ``(3) For purposes of this section, the term `appropriate 
congressional committees' means the Committee on Ways and Means and the 
Committee on International Relations of the House of Representatives 
and the Committee on Finance and the Committee on Foreign Relations of 
the Senate.''.
    (b) Repeal of Obsolete Provisions.--Sections 804 and 805 of the 
Trade Act of 1974 (19 U.S.C. 2493 and 2494) are repealed.

SEC. 3. DEFENSES OF THE UNITED STATES UNDER EXISTING TRADE AGREEMENTS.

    If proceedings are initiated by a country against the United States 
in the World Trade Organization or under the North American Free Trade 
Agreement with respect to actions taken pursuant to title VIII of the 
Trade Act of 1974 (19 U.S.C. 2491 et seq.), the President shall invoke 
all applicable defenses in such proceedings, including exceptions for 
measures necessary to protect the national security of the United 
States and to protect human, animal, or plant life, or health.
Narcotics Control Trade Act of 1996 - Amends the Trade Act of 1974 to revise requirements for the tariff treatment of products of uncooperative major drug producing or drug-transit countries. Requires the United States Trade Representative (USTR) to report annually to the appropriate congressional committees on:  (1) the bilateral trade relationship between the United States and each major illicit drug producing country and each major drug-transit country, including the volume of imports entering the United States from that country; and (2) an assessment with the Secretary of State of the impact of imposing certain trade sanctions against such countries on the economy of the United States and that country, and on the country's cooperation with the United States in achieving the objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. 
Requires the President to impose one or more existing trade sanctions recommended by the USTR against countries not certified as in compliance with the anti-drug producing and trafficking objectives of the Convention.  Adds to existing sanctions:  (1) denial of trade benefits under any agreement between the country in question and the United States establishing a free trade area; and (2) refusal to negotiate for purposes of establishing such a free trade area. 
Requires the President to invoke all applicable defenses, including exceptions for measures necessary to protect U.S. national security and to protect human, animal, or plant life, or health, if proceedings are initiated by a country against the United States in the World Trade Organization (WTO) or under the North American Free Trade Agreement (NAFTA) with respect to such trade sanctions.
Narcotics Control Trade Act of 1996