# Trade Act of 2002/Division C

DIVISION C—ANDEAN TRADE PREFERENCE ACT

## TITLE XXXI—ANDEAN TRADE PREFERENCE
### SEC. 3101. SHORT TITLE.

    This title may be cited as the ``Andean Trade Promotion and Drug Eradication Act´´.

### SEC. 3102. FINDINGS.

    Congress makes the following findings:
       (1) Since the Andean Trade Preference Act was enacted in 1991, it has had a positive impact on United States trade with Bolivia, Colombia, Ecuador, and Peru. Two-way trade has doubled, with the United States serving as the leading source of imports and leading export market for each of the Andean beneficiary countries. This has resulted in increased jobs and expanded export opportunities in both the United States and the Andean region.
       (2) The Andean Trade Preference Act has been a key element in the United States counternarcotics strategy in the Andean region, promoting export diversification and broad-based economic development that provides sustainable economic alternatives to drug-crop production, strengthening the legitimate economies of Andean countries and creating viable alternatives to illicit trade in coca.
       (3) Notwithstanding the success of the Andean Trade Preference Act, the Andean region remains threatened by political and economic instability and fragility, vulnerable to the consequences of the drug war and fierce global competition for its legitimate trade.
       (4) The continuing instability in the Andean region poses a threat to the security interests of the United States and the world. This problem has been partially addressed through foreign aid, such as Plan Colombia, enacted by Congress in 2000. However, foreign aid alone is not sufficient. Enhancement of legitimate trade with the United States provides an alternative means for reviving and stabilizing the economies in the Andean region.
       (5) The Andean Trade Preference Act constitutes a tangible commitment by the United States to the promotion of prosperity, stability, and democracy in the beneficiary countries.
       (6) Renewal and enhancement of the Andean Trade Preference Act will bolster the confidence of domestic private enterprise and foreign investors in the economic prospects of the region, ensuring that legitimate private enterprise can be the engine of economic development and political stability in the region.
       (7) Each of the Andean beneficiary countries is committed to conclude negotiation of a Free Trade Area of the Americas by the year 2005, as a means of enhancing the economic security of the region.
       (8) Temporarily enhancing trade benefits for Andean beneficiary countries will promote the growth of free enterprise and economic opportunity in these countries and serve the security interests of the United States, the region, and the world.

### SEC. 3103. ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT.

    (a) Eligibility of Certain Articles.—Section 204 of the Andean Trade Preference Act (19 U.S.C. 3203) is amended—
       (1) by striking subsection (c) and redesignating subsections (d) through (g) as subsections (c) through (f), respectively; and
       (2) by amending subsection (b) to read as follows:
             ``(b) Exceptions and Special Rules.—
                ``(1) Certain articles that are not import-sensitive.—The President may proclaim duty-free treatment under this title for any article described in subparagraph (A), (B), (C), or (D) that is the growth, product, or manufacture of an ATPDEA beneficiary country, that is imported directly into the customs territory of the United States from an ATPDEA beneficiary country, and that meets the requirements of this section, if the President determines that such article is not import-sensitive in the context of imports from ATPDEA beneficiary countries:
                   ``(A) Footwear not designated at the time of the effective date of this title as eligible for purposes of the generalized system of preferences under title V of the Trade Act of 1974.
                   ``(B) Petroleum, or any product derived from petroleum, provided for in headings 2709 and 2710 of the HTS.
                   ``(C) Watches and watch parts (including cases, bracelets and straps), of whatever type including, but not limited to, mechanical, quartz digital or quartz analog, if such watches or watch parts contain any material which is the product of any country with respect to which HTS column 2 rates of duty apply.
                   ``(D) Handbags, luggage, flat goods, work gloves, and leather wearing apparel that were not designated on August 5, 1983, as eligible articles for purposes of the generalized system of preferences under title V of the Trade Act of 1974.
                ``(2) Exclusions.—Subject to paragraph (3), duty-free treatment under this title may not be extended to—
                   ``(A) textiles and apparel articles which were not eligible articles for purposes of this title on January 1, 1994, as this title was in effect on that date;
                   ``(B) rum and tafia classified in subheading 2208.40 of the HTS;
                   ``(C) sugars, syrups, and sugar-containing products subject to over-quota duty rates under applicable tariff-rate quotas; or
                   ``(D) tuna prepared or preserved in any manner in airtight containers, except as provided in paragraph (4).
                ``(3) Apparel articles and certain textile articles.—
                   ``(A) In general.—Apparel articles that are imported directly into the customs territory of the United States from an ATPDEA beneficiary country shall enter the United States free of duty and free of any quantitative restrictions, limitations, or consultation levels, but only if such articles are described in subparagraph (B).
                   ``(B) Covered articles.—The apparel articles referred to in subparagraph (A) are the following:
                      ``(i) Apparel articles assembled from products of the united states or atpdea beneficiary countries or products not available in commercial quantities.—Apparel articles sewn or otherwise assembled in 1 or more ATPDEA beneficiary countries, or the United States, or both, exclusively from any one or any combination of the following:
                         ``(I) Fabrics or fabric components wholly formed, or components knit-to-shape, in the United States, from yarns wholly formed in the United States or 1 or more ATPDEA beneficiary countries (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are formed in the United States). Apparel articles shall qualify under this subclause only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are knit fabrics, is carried out in the United States. Apparel articles shall qualify under this subclause only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are woven fabrics, is carried out in the United States.
                         ``(II) Fabrics or fabric components formed or components knit-to-shape, in 1 or more ATPDEA beneficiary countries, from yarns wholly formed in 1 or more ATPDEA beneficiary countries, if such fabrics (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are formed in 1 or more ATPDEA beneficiary countries) or components are in chief value of llama, alpaca, or vicuna.
                         ``(III) Fabrics or yarns, to the extent that apparel articles of such fabrics or yarns would be eligible for preferential treatment, without regard to the source of the fabrics or yarns, under Annex 401 of the NAFTA.
                      ``(ii) Additional fabrics.—At the request of any interested party, the President is authorized to proclaim additional fabrics and yarns as eligible for preferential treatment under clause (i)(III) if—
                         ``(I) the President determines that such fabrics or yarns cannot be supplied by the domestic industry in commercial quantities in a timely manner;
                         ``(II) the President has obtained advice regarding the proposed action from the appropriate advisory committee established under section 135 of the Trade Act of 1974 (19 U.S.C. 2155) and the United States International Trade Commission;
                         ``(III) within 60 days after the request, the President has submitted a report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate that sets forth the action proposed to be proclaimed and the reasons for such action, and the advice obtained under subclause (II);
                         ``(IV) a period of 60 calendar days, beginning with the first day on which the President has met the requirements of subclause (III), has expired; and
                         ``(V) the President has consulted with such committees regarding the proposed action during the period referred to in subclause (III).
                      ``(iii) Apparel articles assembled in 1 or more atpdea beneficiary countries from regional fabrics or regional components.—(I) Subject to the limitation set forth in subclause (II), apparel articles sewn or otherwise assembled in 1 or more ATPDEA beneficiary countries from fabrics or from fabric components formed or from components knit-to-shape, in 1 or more ATPDEA beneficiary countries, from yarns wholly formed in the United States or 1 or more ATPDEA beneficiary countries (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are formed in 1 or more ATPDEA beneficiary countries), whether or not the apparel articles are also made from any of the fabrics, fabric components formed, or components knit-to-shape described in clause (i) (unless the apparel articles are made exclusively from any of the fabrics, fabric components formed, or components knit-to-shape described in clause (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 4 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 2 percent for the 1-year period beginning October 1, 2002, increased in each of the 4 succeeding 1-year periods by equal increments, so that for the period beginning October 1, 2006, the applicable percentage does not exceed 5 percent.
                      ``(iv) Handloomed, handmade, and folklore articles.—A handloomed, handmade, or folklore article of an ATPDEA beneficiary country identified under subparagraph (C) that is certified as such by the competent authority of such beneficiary country.
                      ``(v) Certain other apparel articles.—
                         ``(I) General rule.—Any apparel article classifiable under subheading 6212.10 of the HTS, except for articles entered under clause (i), (ii), (iii), or (iv), if the article is both cut and sewn or otherwise assembled in the United States, or one or more ATPDEA beneficiary countries, or both.
                         ``(II) Limitation.—During the 1-year period beginning on October 1, 2003, and during each of the 3 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.
                         ``(III) Development of procedure to ensure compliance.—The United States Customs Service shall develop and implement methods and procedures to ensure ongoing compliance with the requirement set forth in subclause (II). If the Customs Service finds that a producer or an entity controlling production has not satisfied such requirement in a 1-year period, then apparel articles described in subclause (I) of that producer or entity shall be ineligible for preferential treatment under this paragraph during any succeeding 1-year period until the aggregate cost of fabrics (exclusive of all findings and trimmings) formed in the United States that are used in the production of such articles of that producer or entity entered during the preceding 1-year period is at least 85 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.
                      ``(vi) Special rules.—
                         ``(I) Exception for findings and trimmings.—An article otherwise eligible for preferential treatment under this paragraph shall not be ineligible for such treatment because the article contains findings or trimmings of foreign origin, if such findings and trimmings do not exceed 25 percent of the cost of the components of the assembled product. Examples of findings and trimmings are sewing thread, hooks and eyes, snaps, buttons, `bow buds', decorative lace, trim, elastic strips, zippers, including zipper tapes and labels, and other similar products.
                         ``(II) Certain interlining.—(aa) An article otherwise eligible for preferential treatment under this paragraph shall not be ineligible for such treatment because the article contains certain interlinings of foreign origin, if the value of such interlinings (and any findings and trimmings) does not exceed 25 percent of the cost of the components of the assembled article.
                         ``(bb) Interlinings eligible for the treatment described in division (aa) include only a chest type plate, `hymo' piece, or `sleeve header', of woven or weft-inserted warp knit construction and of coarse animal hair or man-made filaments.
                         ``(cc) The treatment described in this subclause shall terminate if the President makes a determination that United States manufacturers are producing such interlinings in the United States in commercial quantities.
                         ``(III) De minimis rule.—An article that would otherwise be ineligible for preferential treatment under this subparagraph because the article contains yarns not wholly formed in the United States or in one or more ATPDEA beneficiary countries shall not be ineligible for such treatment if the total weight of all such yarns is not more than 7 percent of the total weight of the good.
                         ``(IV) Special origin rule.—An article otherwise eligible for preferential treatment under clause (i) or (iii) shall not be ineligible for such treatment because the article contains nylon filament yarn (other than elastomeric yarn) that is classifiable under subheading 5402.10.30, 5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10, 5402.41.90, 5402.51.00, or 5402.61.00 of the HTS from a country that is a party to an agreement with the United States establishing a free trade area, which entered into force before January 1, 1995.
                      ``(vii) Textile luggage.—Textile luggage—
                         ``(I) assembled in an ATPDEA beneficiary country from fabric wholly formed and cut in the United States, from yarns wholly formed in the United States, that is entered under subheading 9802.00.80 of the HTS; or
                         ``(II) assembled from fabric cut in an ATPDEA beneficiary country from fabric wholly formed in the United States from yarns wholly formed in the United States.
                   ``(C) Handloomed, handmade, and folklore articles.—
                      ``For purposes of subparagraph (B)(iv), the President shall consult with representatives of the ATPDEA beneficiary countries concerned for the purpose of identifying particular textile and apparel goods that are mutually agreed upon as being handloomed, handmade, or folklore goods of a kind described in section 2.3(a), (b), or (c) of the Annex or Appendix 3.1.B.11 of the Annex.
                   ``(D) Penalties for transshipment.—
                      ``(i) Penalties for exporters.—If the President determines, based on sufficient evidence, that an exporter has engaged in transshipment with respect to apparel articles from an ATPDEA beneficiary country, then the President shall deny all benefits under this title to such exporter, and any successor of such exporter, for a period of 2 years.
                      ``(ii) Penalties for countries.—Whenever the President finds, based on sufficient evidence, that transshipment has occurred, the President shall request that the ATPDEA beneficiary country or countries through whose territory the transshipment has occurred take all necessary and appropriate actions to prevent such transshipment. If the President determines that a country is not taking such actions, the President shall reduce the quantities of apparel articles that may be imported into the United States from such country by the quantity of the transshipped articles multiplied by 3, to the extent consistent with the obligations of the United States under the WTO.
                      ``(iii) Transshipment described.—
                         ``Transshipment within the meaning of this subparagraph has occurred when preferential treatment under subparagraph (A) has been claimed for an apparel article on the basis of material false information concerning the country of origin, manufacture, processing, or assembly of the article or any of its components. For purposes of this clause, false information is material if disclosure of the true information would mean or would have meant that the article is or was ineligible for preferential treatment under subparagraph (A).
                   ``(E) Bilateral emergency actions.—
                      ``(i) In general.—The President may take bilateral emergency tariff actions of a kind described in section 4 of the Annex with respect to any apparel article imported from an ATPDEA beneficiary country if the application of tariff treatment under subparagraph (A) to such article results in conditions that would be cause for the taking of such actions under such section 4 with respect to a like article described in the same 8-digit subheading of the HTS that is imported from Mexico.
                      ``(ii) Rules relating to bilateral emergency action.—For purposes of applying bilateral emergency action under this subparagraph—
                         ``(I) the requirements of paragraph (5) of section 4 of the Annex (relating to providing compensation) shall not apply;
                         ``(II) the term `transition period' in section 4 of the Annex shall mean the period ending December 31, 2006; and
                         ``(III) the requirements to consult specified in section 4 of the Annex shall be treated as satisfied if the President requests consultations with the ATPDEA beneficiary country in question and the country does not agree to consult within the time period specified under section 4 of the Annex.
                ``(4) Tuna.—
                   ``(A) General rule.—Tuna that is harvested by United States vessels or ATPDEA beneficiary country vessels, that is prepared or preserved in any manner, in an ATPDEA beneficiary country, in foil or other flexible airtight containers weighing with their contents not more than 6.8 kilograms each, and that is imported directly into the customs territory of the United States from an ATPDEA beneficiary country, shall enter the United States free of duty and free of any quantitative restrictions.
                   ``(B) Definitions.—In this paragraph—
                      ``(i) United states vessel.—A `United States vessel' is a vessel having a certificate of documentation with a fishery endorsement under chapter 121 of Controlled Substances Act.
                      ``(ii) ATPDEA vessel.—An `ATPDEA vessel' is a vessel—
                         ``(I) which is registered or recorded in an ATPDEA beneficiary country;
                         ``(II) which sails under the flag of an ATPDEA beneficiary country;
                         ``(III) which is at least 75 percent owned by nationals of an ATPDEA beneficiary country or by a company having its principal place of business in an ATPDEA beneficiary country, of which the manager or managers, chairman of the board of directors or of the supervisory board, and the majority of the members of such boards are nationals of an ATPDEA beneficiary country and of which, in the case of a company, at least 50 percent of the capital is owned by an ATPDEA beneficiary country or by public bodies or nationals of an ATPDEA beneficiary country;
                         ``(IV) of which the master and officers are nationals of an ATPDEA beneficiary country; and
                         ``(V) of which at least 75 percent of the crew are nationals of an ATPDEA beneficiary country.
                ``(5) Customs procedures.—
                   ``(A) In general.—
                      ``(i) Regulations.—Any importer that claims preferential treatment under paragraph (1), (3), or (4) shall comply with customs procedures similar in all material respects to the requirements of Article 502(1) of the NAFTA as implemented pursuant to United States law, in accordance with regulations promulgated by the Secretary of the Treasury.
                      ``(ii) Determination.—
                         ``(I) In general.—In order to qualify for the preferential treatment under paragraph (1), (3), or (4) and for a Certificate of Origin to be valid with respect to any article for which such treatment is claimed, there shall be in effect a determination by the President that each country described in subclause (II)—
                            ``(aa) has implemented and follows, or
                            ``(bb) is making substantial progress toward implementing and following, procedures and requirements similar in all material respects to the relevant procedures and requirements under chapter 5 of the NAFTA.
                         ``(II) Country described.—A country is described in this subclause if it is an ATPDEA beneficiary country—
                            ``(aa) from which the article is exported; or
                            ``(bb) in which materials used in the production of the article originate or in which the article or such materials undergo production that contributes to a claim that the article is eligible for preferential treatment under paragraph (1), (3), or (4).
                   ``(B) Certificate of origin.—The Certificate of Origin that otherwise would be required pursuant to the provisions of subparagraph (A) shall not be required in the case of an article imported under paragraph (1), (3), or (4) if such Certificate of Origin would not be required under Article 503 of the NAFTA (as implemented pursuant to United States law), if the article were imported from Mexico.
                   ``(C) Report on cooperation of atpdea countries concerning circumvention.—The United States Commissioner of Customs shall conduct a study analyzing the extent to which each ATPDEA beneficiary country—
                      ``(i) has cooperated fully with the United States, consistent with its domestic laws and procedures, in instances of circumvention or alleged circumvention of existing quotas on imports of textile and apparel goods, to establish necessary relevant facts in the places of import, export, and, where applicable, transshipment, including investigation of circumvention practices, exchanges of documents, correspondence, reports, and other relevant information, to the extent such information is available;
                      ``(ii) has taken appropriate measures, consistent with its domestic laws and procedures, against exporters and importers involved in instances of false declaration concerning quantities, description, classification, or origin of textile and apparel goods; and
                      ``(iii) has penalized the individuals and entities involved in any such circumvention, consistent with its domestic laws and procedures, and has worked closely to seek the cooperation of any third country to prevent such circumvention from taking place in that third country. The Commissioner of Customs shall submit to the Congress, not later than October 1, 2003, a report on the study conducted under this subparagraph.
                ``(6) Definitions.—In this subsection—
                   ``(A) Annex.—The term `the Annex' means Annex 300-B of the NAFTA.
                   ``(B) ATPDEA beneficiary country.—The term `ATPDEA beneficiary country' means any `beneficiary country', as defined in section 203(a)(1) of this title, which the President designates as an ATPDEA beneficiary country, taking into account the criteria contained in subsections (c) and (d) of section 203 and other appropriate criteria, including the following:
                      ``(i) Whether the beneficiary country has demonstrated a commitment to—
                         ``(I) undertake its obligations under the WTO, including those agreements listed in section 101(d) of the Uruguay Round Agreements Act, on or ahead of schedule; and
                         ``(II) participate in negotiations toward the completion of the FTAA or another free trade agreement.
                      ``(ii) The extent to which the country provides protection of intellectual property rights consistent with or greater than the protection afforded under the Agreement on Trade-Related Aspects of Intellectual Property Rights described in section 101(d)(15) of the Uruguay Round Agreements Act.
                      ``(iii) The extent to which the country provides internationally recognized worker rights, including—
                         ``(I) the right of association;
                         ``(II) the right to organize and bargain collectively;
                         ``(III) a prohibition on the use of any form of forced or compulsory labor;
                         ``(IV) a minimum age for the employment of children; and
                         ``(V) acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.
                      ``(iv) Whether the country has implemented its commitments to eliminate the worst forms of child labor, as defined in section 507(6) of the Trade Act of 1974.
                      ``(v) The extent to which the country has met the counternarcotics certification criteria set forth in section 490 of the Foreign Assistance Act of 1961 (22 U.S.C. 2291j) for eligibility for United States assistance.
                      ``(vi) The extent to which the country has taken steps to become a party to and implements the Inter-American Convention Against Corruption.
                      ``(vii) The extent to which the country—
                         ``(I) applies transparent, nondiscriminatory, and competitive procedures in government procurement equivalent to those contained in the Agreement on Government Procurement described in section 101(d)(17) of the Uruguay Round Agreements Act; and
                         ``(II) contributes to efforts in international fora to develop and implement international rules in transparency in government procurement.
                      ``(viii) The extent to which the country has taken steps to support the efforts of the United States to combat terrorism.
                   ``(C) NAFTA.—The term `NAFTA' means the North American Free Trade Agreement entered into between the United States, Mexico, and Canada on December 17, 1992.
                   ``(D) WTO.—The term `WTO' has the meaning given that term in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501).
                   ``(E) ATPDEA.—The term `ATPDEA' means the Andean Trade Promotion and Drug Eradication Act.
                   ``(F) FTAA.—The term `FTAA' means the Free Trade Area for the Americas.´´.
    (b) Determination Regarding Retention of Designation.—Section 203(e)(1) of the Andean Trade Preference Act (19 U.S.C. 3202(e)(1)) is amended—
       (1) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;
       (2) by inserting ``(A)´´ after ``(1)´´; and
       (3) by adding at the end the following:
             ``(B) The President may, after the requirements of paragraph (2) have been met—
                ``(i) withdraw or suspend the designation of any country as an ATPDEA beneficiary country, or
                ``(ii) withdraw, suspend, or limit the application of preferential treatment under section 204(b)(1), (3), or (4) to any article of any country,
                ``if, after such designation, the President determines that, as a result of changed circumstances, the performance of such country is not satisfactory under the criteria set forth in section 204(b)(6)(B).´´.
    (c) Conforming Amendments.—(1) Section 202 of the Andean Trade Preference Act (19 U.S.C. 3201) is amended by inserting ``(or other preferential treatment)´´ after ``treatment´´.
    (2) Section 204(a) of the Andean Trade Preference Act (19 U.S.C. 3203(a)) is amended—
       (A) in paragraph (1)—
          (i) by inserting ``(or otherwise provided for)´´ after ``eligibility´´; and
          (ii) by inserting ``(or preferential treatment)´´ after ``duty-free treatment´´; and
       (B) in paragraph (2), by striking ``subsection (a)´´ and inserting ``paragraph (1)´´.
    (d) Petitions for Review.—
       (1) In general.—Not later than 180 days after the date of the enactment of this Act, the President shall promulgate regulations regarding the review of eligibility of articles and countries under the Andean Trade Preference Act, consistent with section 203(e) of such Act, as amended by this title.
       (2) Content of regulations.—The regulations shall be similar to the regulations regarding eligibility under the generalized system of preferences under title V of the Trade Act of 1974 with respect to the timetable for reviews and content, and shall include procedures for requesting withdrawal, suspension, or limitations of preferential duty treatment under the Andean Trade Preference Act, conducting reviews of such requests, and implementing the results of the reviews.
    (e) Reporting Requirements.—Section 203(f) of the Andean Trade Preference Act (19 U.S.C. 3202(f)) is amended to read as follows:
             ``(f) Reporting Requirements.—
                ``(1) In general.—Not later than April 30, 2003, and every 2 years thereafter during the period this title is in effect, the United States Trade Representative shall submit to the Congress a report regarding the operation of this title, including—
                   ``(A) with respect to subsections (c) and (d), the results of a general review of beneficiary countries based on the considerations described in such subsections; and
                   ``(B) the performance of each beneficiary country or ATPEA beneficiary country, as the case may be, under the criteria set forth in section 204(b)(6)(B).
                ``(2) Public comment.—Before submitting the report described in paragraph (1), the United States Trade Representative shall publish a notice in the Federal Register requesting public comments on whether beneficiary countries are meeting the criteria listed in section 204(b)(6)(B).´´.

### SEC. 3104. TERMINATION.

    (a) In General.—Section 208 of the Andean Trade Preference Act (19 U.S.C. 3206) is amended to read as follows:
          ``SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.
             ``No duty-free treatment or other preferential treatment extended to beneficiary countries under this title shall remain in effect after December 31, 2006.´´.
    (b) Retroactive Application for Certain Liquidations and Reliquidations.—
       (1) In general.—Notwithstanding section 514 of the Tariff Act of 1930 or any other provision of law, and subject to paragraph (3), the entry—
          (A) of any article to which duty-free treatment (or preferential treatment) under the Andean Trade Preference Act (19 U.S.C. 3201 et seq.) would have applied if the entry had been made on December 4, 2001, and
          (B) that was made after December 4, 2001, and before the date of the enactment of this Act,
          shall be liquidated or reliquidated as if such duty-free treatment (or preferential treatment) applied, and the Secretary of the Treasury shall refund any duty paid with respect to such entry.
       (2) Entry.—As used in this subsection, the term ``entry´´ includes a withdrawal from warehouse for consumption.
       (3) Requests.—Liquidation or reliquidation may be made under paragraph (1) with respect to an entry only if a request therefor is filed with the Customs Service, within 180 days after the date of the enactment of this Act, that contains sufficient information to enable the Customs Service—
          (A) to locate the entry; or
          (B) to reconstruct the entry if it cannot be located.

### SEC. 3105. REPORT ON FREE TRADE AGREEMENT WITH ISRAEL.

    (a) Report to Congress.—The United States Trade Representative shall review the implementation of the United States-Israel Free Trade Agreement and shall submit to the Speaker of the House of Representatives, the President of the Senate, the Committee on Ways and Means of the House of Representatives, and the Committee on Finance of the Senate a report on the results of such review.
    (b) Contents of Report.—The report under subsection (a) shall include the following:
       (1) A review of the terms of the United States-Israel Free Trade Agreement, particularly the terms with respect to market access commitments.
       (2) A review of subsequent agreements which may have been reached between the parties to the Agreement and of unilateral concessions of additional benefits received by each party from the other.
       (3) A review of any current negotiations between the parties to the Agreement with respect to implementation of the Agreement and other pertinent matters.
       (4) An assessment of the degree of fulfillment of obligations under the Agreement by the United States and Israel.
       (5) An assessment of improvements in structuring future trade agreements that should be considered based on the experience of the United States under the Agreement.
    (c) Timing of Report.—The United States Trade Representative shall submit the report under subsection (a) not later than 6 months after the date of the enactment of this Act.
    (d) Definition.—In this section, the terms ``United States-Israel Free Trade Agreement´´ and ``Agreement´´ means the Agreement on the Establishment of a Free Trade Area between the Government of the United States of America and the Government of Israel entered into on April 22, 1985.

### SEC. 3106. MODIFICATION OF DUTY TREATMENT FOR TUNA.

    Subheading 1604.14.20 of the Harmonized Tariff Schedule of the United States is amended—
       (1) in the article description, by striking ``20 percent of the United States pack of canned tuna´´ and inserting ``4.8 percent of apparent United States consumption of tuna in airtight containers´´; and
       (2) by redesignating such subheading as subheading 1604.14.22.

### SEC. 3107. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT.

    (a) In General.—Section 213(b)(2)(A) of the Carribean Basin Economic Recovery Act (19 U.S.C. 2703(b)(2)(A)) is amended as follows:
       (1) Clause (i) is amended—
          (A) by striking the matter preceding subclause (I) and inserting the following:
                      ``(i) Apparel articles assembled in one or more cbtpa beneficiary countries.—Apparel articles sewn or otherwise assembled in one or more CBTPA beneficiary countries from fabrics wholly formed and cut, or from components knit-to-shape, in the United States from yarns wholly formed in the United States, (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are wholly formed and cut in the United States) that are—´´; and
          (B) by adding at the end the following:
             ``Apparel articles entered on or after September 1, 2002, shall qualify under the preceding sentence only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are knit fabrics, is carried out in the United States. Apparel articles entered on or after September 1, 2002, shall qualify under the first sentence of this clause only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are woven fabrics, is carried out in the United States.´´.
       (2) Clause (ii) is amended to read as follows:
                      ``(ii) Other apparel articles assembled in one or more cbtpa beneficiary countries.—Apparel articles sewn or otherwise assembled in one or more CBTPA beneficiary countries with thread formed in the United States from fabrics wholly formed in the United States and cut in one or more CBTPA beneficiary countries from yarns wholly formed in the United States, or from components knit-to-shape in the United States from yarns wholly formed in the United States, or both (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are wholly formed in the United States). Apparel articles entered on or after September 1, 2002, shall qualify under the preceding sentence only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are knit fabrics, is carried out in the United States. Apparel articles entered on or after September 1, 2002, shall qualify under the first sentence of this clause only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are woven fabrics, is carried out in the United States.´´.
       (3) Clause (iii)(II) is amended to read as follows:
                      ``(II) The amount referred to in subclause (I) is as follows:
                         ``(aa) 500,000,000 square meter equivalents during the 1-year period beginning on October 1, 2002.
                         ``(bb) 850,000,000 square meter equivalents during the 1-year period beginning on October 1, 2003.
                         ``(cc) 970,000,000 square meter equivalents in each succeeding 1-year period through September 30, 2008.´´.
       (4) Clause (iii)(IV) is amended to read as follows:
                      ``(IV) The amount referred to in subclause (III) is as follows:
                         ``(aa) 4,872,000 dozen during the 1-year period beginning on October 1, 2001.
                         ``(bb) 9,000,000 dozen during the 1-year period beginning on October 1, 2002.
                         ``(cc) 10,000,000 dozen during the 1-year period beginning on October 1, 2003.
                         ``(dd) 12,000,000 dozen in each succeeding 1-year period through September 30, 2008.´´.
       (5) Clause (iv) is amended to read as follows:
                      ``(iv) Certain other apparel articles.—
                         ``(I) General rule.—Subject to subclause (II), any apparel article classifiable under subheading 6212.10 of the HTS, except for articles entered under clause (i), (ii), (iii), (v), or (vi), if the article is both cut and sewn or otherwise assembled in the United States, or one or more CBTPA beneficiary countries, or both.
                         ``(II) Limitation.—During the 1-year period beginning on October 1, 2001, and during each of the 6 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 subparagraph (B) 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.
                         ``(III) Development of procedure to ensure compliance.—The United States Customs Service shall develop and implement methods and procedures to ensure ongoing compliance with the requirement set forth in subclause (II). If the Customs Service finds that a producer or an entity controlling production has not satisfied such requirement in a 1-year period, then apparel articles described in subclause (I) of that producer or entity shall be ineligible for preferential treatment under subparagraph (B) during any succeeding 1-year period until the aggregate cost of fabrics (exclusive of all findings and trimmings) formed in the United States that are used in the production of such articles of that producer or entity entered during the preceding 1-year period is at least 85 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.´´.
       (6) Clause (vii) is amended by adding at the end the following new subclause:
                         ``(V) Thread.—An article otherwise eligible for preferential treatment under this paragraph shall not be ineligible for such treatment because the thread used to assemble the article is dyed, printed, or finished in one or more CBTPA beneficiary countries.´´.
       (7) Section 213(b)(2)(A) of such Act is further amended by adding at the end the following new clause:
                      ``(ix) Apparel articles assembled in one or more cbtpa beneficiary countries from united states and cbtpa beneficiary country components.—
                         ``Apparel articles sewn or otherwise assembled in one or more CBTPA beneficiary countries with thread formed in the United States from components cut in the United States and in one or more CBTPA beneficiary countries from fabric wholly formed in the United States from yarns wholly formed in the United States, or from components knit-to-shape in the United States and one or more CBTPA beneficiary countries from yarns wholly formed in the United States, or both (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS). Apparel articles shall qualify under this clause only if they meet the requirements of clause (i) or (ii) (as the case may be) with respect to dyeing, printing, and finishing of knit and woven fabrics from which the articles are assembled.´´.
    (b) Effective Date of Certain Provisions.—The amendment made by subsection (a)(3) shall take effect on October 1, 2002.

### SEC. 3108. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND OPPORTUNITY ACT.

    (a) In General.—Section 112(b) of the African Growth and Opportunity Act (19 U.S.C. 3721(b)) is amended as follows:
       (1) Paragraph (1) is amended by amending the matter preceding subparagraph (A) to read as follows:
                ``(1) Apparel articles assembled in one or more beneficiary sub-saharan african countries.—Apparel articles sewn or otherwise assembled in one or more beneficiary sub-Saharan African countries from fabrics wholly formed and cut, or from components knit-to-shape, in the United States from yarns wholly formed in the United States, (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States and are wholly formed and cut in the United States) that are—´´.
       (2) Paragraph (2) is amended to read as follows:
                ``(2) Other apparel articles assembled in one or more beneficiary sub-saharan african countries.—Apparel articles sewn or otherwise assembled in one or more beneficiary sub-Saharan African countries with thread formed in the United States from fabrics wholly formed in the United States and cut in one or more beneficiary sub-Saharan African countries from yarns wholly formed in the United States, or from components knit-to-shape in the United States from yarns wholly formed in the United States, or both (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States and are wholly formed in the United States).´´.
       (3) Paragraph (3) is amended—
          (A) by amending the matter preceding subparagraph (A) to read as follows:
                ``(3) Apparel articles from regional fabric or yarns.—
                   ``Apparel articles wholly assembled in one or more beneficiary sub-Saharan African countries from fabric wholly formed in one or more beneficiary sub-Saharan African countries from yarns originating either in the United States or one or more beneficiary sub-Saharan African countries (including fabrics not formed from yarns, if such fabrics are classified under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States and are wholly formed in one or more beneficiary sub-Saharan African countries), or from components knit-to-shape in one or more beneficiary sub-Saharan African countries from yarns originating either in the United States or one or more beneficiary sub-Saharan African countries, or apparel articles wholly formed on seamless knitting machines in a beneficiary sub-Saharan African country from yarns originating either in the United States or one or more beneficiary sub-Saharan African countries, subject to the following:´´; and
          (B) by amending subparagraph (B) to read as follows:
                   ``(B) Special rule for lesser developed countries.—
                      ``(i) In general.—Subject to subparagraph (A), preferential treatment under this paragraph shall be extended through September 30, 2004, for apparel articles wholly assembled, or knit-to-shape and wholly assembled, or both, in one or more lesser developed beneficiary sub-Saharan African countries regardless of the country of origin of the fabric or the yarn used to make such articles.
                      ``(ii) Lesser developed beneficiary sub-saharan african country.—For purposes of clause (i), the term `lesser developed beneficiary sub-Saharan African country' means—
                         ``(I) a beneficiary sub-Saharan African country that had a per capita gross national product of less than $1,500 in 1998, as measured by the International Bank for Reconstruction and Development;
                         ``(II) Botswana; and
                         ``(III) Namibia.´´.
       (4) Paragraph (4)(B) is amended by striking ``18.5´´ and inserting ``21.5´´.
       (5) Section 112(b) of such Act is further amended by adding at the end the following new paragraph:
                ``(7) Apparel articles assembled in one or more beneficiary sub-saharan african countries from united states and beneficiary sub-saharan african country components.—Apparel articles sewn or otherwise assembled in one or more beneficiary sub-Saharan African countries with thread formed in the United States from components cut in the United States and one or more beneficiary sub-Saharan African countries from fabric wholly formed in the United States from yarns wholly formed in the United States, or from components knit-to-shape in the United States and one or more beneficiary sub-Saharan African countries from yarns wholly formed in the United States, or both (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States).´´.
    (b) Increase in Limitation on Certain Benefits.—The applicable percentage under clause (ii) of section 112(b)(3)(A) of the African Growth and Opportunity Act (19 U.S.C. 3721(b)(3)(A)) shall be increased—
       (1) by 2.17 percent for the 1-year period beginning on October 1, 2002, and
       (2) by equal increments in each succeeding 1-year period provided for in such clause, so that for the 1-year period beginning October 1, 2007, the applicable percentage is increased by 3.5 percent,
    except that such increase shall not apply with respect to articles eligible under subparagraph (B) of section 112(b)(3) of that Act.