WORLD TRADE  
ORGANIZATION  G/C/W/508/Add.1 
17 March 2005 
 
 (05-1108) 
Council for Trade in Goods Original:  English 
  
 
REQUEST FOR A WAIVER 
 
Caribbean Basin Economic Recove ry Act (CBERA as amended
) 
 
Addendum  
 
  The following legislation and annexes, receive d from the delegation of the United States on 
24 February 2005, are circulated as supplemental information to the original waiver request 
(G/C/W/508). 
 
_______________ 
  G/C/W/508/Add.1 
Page 2  
 
ANNEX 1  
 
WTO DOCUMENT G/L/25 – DESCRIPTION OF ORIGINAL CBERA PROGRAMME 
 
 W
ORLD TRADE  G/L/25  
  15 September 1995 
ORGANIZATION  
  (95-2681)  
 
  Original:  English 
COUNCIL FOR TRADE IN GOODS  
26 September 1995  
 
 
 
 
CARIBBEAN BASIN ECONOMIC RECOVERY ACT  
 
Request for Renewal of Waiver  
 
 
 
 The following communication, dated 13 September 1995, has been received from the delegation 
of the United States.  
_________________ 
 
  By action of the CONTRACTING PARTIES of the GATT 1947 on 15 February 1985 (L/5779, 
BISD 31S/20), the United States was granted a waiv er of its obligations under paragraph 1 of Article 1 
of the GATT 1947, for the provision of duty-free treatm ent to eligible products of beneficiary Caribbean 
Basin countries and territories, under the Caribbea n Basin Economic Recovery Act (CBERA).  This 
waiver was granted for the period 1 January 1984 until 30 September 1995. 
  CBERA authorizes the President to provide certai n trade and tax benefits to countries located in 
the Caribbean Basin. The Caribbea n Basin Initiative (CBI) establis hed under the CBERA promotes the 
trade and economic stability of count ries located in the Ca ribbean Basin through a number of measures: 
provision of increased foreign assistance, provision of  duty-free treatment to imports, and extension of 
the applicability of the U.S. convention expense ta x deduction to conventions held in the region to 
encourage greater tourism and inve stment.  In 1990, Congress amended the CBI to make the program a 
permanent part of U.S. law and to provide a modest in crease in access to the U. S. market for products of 
eligible Caribbean Basin countries.  
 The United States requests that Members re new the 1985 waiver for ten years, in order to 
enable the United States to provide duty-free access for imports of eligible articles into the United States 
from beneficiary Caribbean countries and territori es, as provided in the Caribbean Basin Economic 
Recovery Act  (Public Law 98-67 of August 5, 1983) , as amended by the Caribbean Basin Economic 
Recovery Expansion Act of 1990 (Public Law 101-418).   
  G/C/W/508/Add.1 
 Page 3 
 
 
 A waiver of paragraph 1 of Ar ticle I of the GATT 1994 is necessary so that the United States 
can provide such duty-free treatment.1  This request is made in accordance with the Guiding Principles 
to be followed in considering a pplications for waivers adopted on 1 November 1956; the Understanding 
in Respect of Waivers of Obligations under the General Agreement on Tari ffs and Trade 1994; and 
paragraphs 3 and 4 of Article IX of the Ma rrakesh Agreement Establishing the World Trade 
Organization.   The policy objectiv es of CBERA and the exceptional circumstances justifying a waiver 
are described below.  
Discussion  
  The Caribbean Basin Economic Recovery Act  (CBERA) was enacted on 5 August 1983 
effective until 30 September 1995 (P.L. 98-67).  Congre ss then amended the CBERA in Title II of the 
Customs and Trade Act of 1990 (P.L. 101-418), the Caribbean Basin Economic Recovery Expansion 
Act of 1990, commonly known as “CBI II”.  CBI II im proved the CBERA’s trade and tax benefits and 
made them permanent.
2  Trade improvements included a 20 per cent tariff reduction on certain leather 
products, phased in over five years beginning in 1992,  but limited to a total reduction of 2.5 percent ad 
valorem ; duty-free treatment for Puerto Rican produc ts imported from CBI countries; and duty-free 
treatment for imports of products of beneficiary countries pr oducts made from 100 percent U.S. 
components, with certain exceptions .  CBI II also expanded duty-free treatment to include twenty-eight 
additional tariff categories.  
 A.  Purpose and Scope  
  The Caribbean Basin Initiative, or CBI, was designed as a development program using trade, 
tax and assistance measur es to facilitate the economic development and export diversification of the 
economies in the Caribbean Basin.  These small eco nomies had been seriously affected by declining 
prices for their major commodity e xports.  CBI helps these countries and territories  solve their problems 
by opening new markets for CBI exports, encouraging i nvestment and growth of productive capacity in 
the CBI area, and assisting tourism and other service sectors.    The United States seeks to c ontinue the centerpiece of the CB I:  non-reciprocal, duty-free access 
for imports into the territory of the United States from eligible Caribbean countries and territories.  
Duty-free access is provided for a ll products with the exception of textiles and appa rel, footwear, 
petroleum, leather apparel, watches and canned tuna .  The program places a ceiling on duty-free entry 
for sugar, as long as the United States maintains a domestic sugar price support program mandated by 
Congress.  The program provides duty-free access fo r some CBI exports not pr esently covered under the 
U.S. Generalized System of Prefer ences (GSP) program.  Such pref erential duty-free access cannot be 
provided consistent with pa ragraph 1 of Article I of the GATT 19 94; for this reason the United States 
seeks an extension of the waiver granted in  1985 by the CONTRACTING PARTIES of the GATT 
1947.   The CBERA statute provides that 27 countries or territories are eligible for designation as CBI 
beneficiaries.  The at tachment to the present waiver request li sts those countries a nd lists the countries 
actually designated as beneficiaries. 
  B. Effect of the Caribbean Basi n Initiative on other Members  
 
                                                     
 
    1The final list of MFN exceptions submitted by the United St ates under the General Agreem ent on Trade in Services 
in document GATS/EL/90 includes an exception taken with respect to “benefits available under the U.S. Internal Revenue Code 
with respect to Caribbean Basin Initiative (CBI) beneficiary countries”.   
    2A discussion of these changes appears in the November 1993 U.S. report on the CBI waiver, L/7304. G/C/W/508/Add.1 
Page 4  
 
 The duty-free treatment accorde d CBI beneficiary countries ha s not created new barriers or 
otherwise impeded the trade of Members because thes e countries account for a small portion of U.S. 
imports and the program is limited in scope.  In 1994 the U.S. imported $11.5 billion of manufactured 
and agricultural goods from CBI beneficiary countries -- 1.7 percent of total U.S. imports.  Of the $11.5 
billion, 18.5 percent or $2.1 billion entered under CBI.  Hence, only 0.3 percent of total U.S. imports in 
1994 entered under the CBI program.  The trade figures provided in the reports by  the United States on 
the use made of the 1985 waiver demonstrate that the preference given to CBI imports has not resulted 
in displacement of like products from non-CBI sources.  C.Effect on MFN treatment and GSP 
 
 The CBI program is a completely autonomous program which has never involved the binding of 
margins of preference.  The program  did not impede U.S. tariff ne gotiations in the Uruguay Round, in 
which a major objective was the zero-for-zero initia tive for elimination of ta riffs on a most-favoured-
nation basis.  The CBI program is also independent of  the U.S. GSP program as a matter of statute and a 
matter of policy.   
  Although the statutory authorization for the U.S. GSP program expired on 31 July 1995, legislation to reauthorize GSP program is now pending  in Congress.  Provision of CBI benefits will not 
negatively affect GSP benefits.    
D.  Conclusion  
  The United States requests that the Members of the WTO give its application for a waiver renewal expeditious consideration.  The United St ates will cooperate fully in providing additional 
information about the CBI and discussing  the specific terms of the waiver.  
 
    G/C/W/508/Add.1 
 Page 5 
 
 
 ANNEX  
 1. Countries and territories statutorily eligible  for designation as CBI beneficiary countries 
 
Anguilla Grenada St. Kitts and Nevis Antigua and Barbuda  Guatemala St. Lucia 
Bahamas, The  Guyana St. Vincent and the Grenadines Barbados Haiti Suriname Belize Honduras Trinidad and Tobago Cayman Islands Jamaica Turks and Caicos Islands 
Costa Rica Montserrat Virgin Islands, British 
Dominica  Netherlands Antilles  Dominican Republic Nicaragua  El Salvador Panama   
(Source: CBERA §212) 
  
2.Countries or territories desi gnated as beneficiary countries for purposes of the CBERA  
 
Antigua and Barbuda Grenada Nicaragua 
Aruba Guatemala Panama 
Bahamas Guyana St. Kitts and Nevis Barbados Haiti St. Lucia Belize Honduras St. Vincen t and the Grenadines 
Costa Rica Jamaica Trinidad and Tobago 
Dominica Montserrat Virgin Islands, British 
Dominican Republic Netherlands Antilles  El Salvador     G/C/W/508/Add.1 
Page 6  
 
ANNEX II.a 
 
CARIBBEAN BASIN ECONOMIC RECOVERY ACT 
 
 19 USC CHAPTER 15 - CARIBBEAN BASIN ECONOMIC RECOVERY             TITLE 19 - CUSTOMS DUTIES     CHAPTER 15 - CARIBBEAN BASIN ECONOMIC RECOVERY 
 Sec. 
2701. Authority to grant duty-free treatment. 2702. Beneficiary country.        (a) Definitions; termination of designation.          (b) Countries eligible for designation as beneficiary countries; conditions. 
              (c) Factors determining designation. 
        (d) Omitted.            (e) Withdrawal or suspen sion of duty-free treatment to specific articles. 
           (f) Reporting requirements. 2703. Eligible articles.          (a) Growth, product, or manufacture of beneficiary countries. 
           (b) Import-sensitive articles. 
         (c) Sugar and beef products; st able food production plan; suspension of duty-free 
treatment; monitoring.          (d) Tariff-rate quotas.          (e) Proclamations suspending duty-free treatment. 
                  (f) Petitions to International Trade Commission. 
            (g) Fees not affected by proclamation.               (h) Duty redu ction for certain leather-related products. 
2704. International Trade Commission reports on im pact of Caribbean Basin Economic Recovery 
Program.            (a) Reporting requirements. 
        (b) Requisite areas of Commission assessment. 
      (c) Time of submission of reports; public participation. 
2705. Impact study by Secretary of Labor. 2706. Effective date. 2707. Center for the Study of Western Hemispheric Trade. 
            (a) Establishment. 
           (b) Scope of Center.          (c) Consultation; selection criteria.            (d) Programs and activities.            (e) Definitions.            (f) Fees for seminars and publications. 
            (g) Duration of grant. 
            (h) Report.   Sec. 2701. Authority to grant duty-free treatment      The President may proclaim duty-free treatment (or other preferential treatment) for all 
eligible articles from any beneficiary country in accordance with the provisions of this chapter. 
 Sec. 2702. Beneficiary country       (a) Definitions; termination of designation 
       (1) For purposes of this chapter -  G/C/W/508/Add.1 
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         (A) The term ''beneficiary country'' means any country listed in subsection (b) of this 
section with respect to which there is in effect  a proclamation by the President designating such 
country as a beneficiary country for purposes of this  chapter.  Before the President designates any 
country as a beneficiary country for purposes of this chapter, he shall notify the House of Representatives and the Senate of his intention to  make such designation, together with the 
considerations entering into such decision. 
         (B) The term ''entered'' means entere d, or withdrawn from warehouse for consumption, in 
the customs territory of the United States.          (C) The term ''HTS'' means Ha rmonized Tariff Schedule of the United States. 
         (D) The term ''NAFTA'' means the North American Free Trade Agreement entered into 
between the United States, Mexico, and Canada on December 17, 1992. 
         (E) The terms ''WTO'' and ''WTO memb er'' have the meanings given those terms in section 
3501 of this title.        (2) If the President has designated any country as a beneficiary country for purposes of this 
chapter, he shall not terminate such designation (e ither by issuing a proclamation for that purpose or 
by issuing a proclamation which has the effect of terminating such designation) unless, at least sixty 
days before such termination, he has notified th e House of Representatives and the Senate and has 
notified such country of his intention to terminate such designation, together with the considerations 
entering into such decision.      (b) Countries eligible for designation as beneficiary countries; conditions        In designating countries as ''beneficiar y countries'' under this chapter the President shall 
consider only the following countries a nd territories or successor political entities: 
      Anguilla                     Jamaica       Antigua and Barbuda         Nicaragua       Bahamas, The                Panama       Barbados                     Saint Lucia 
      Belize                       Saint Vincent and the 
      Costa Rica                   Grenadines       Dominica                     Suriname       Dominican Republic          Trinidad and Tobago       El Salvador                  Cayman Islands       Grenada                      Montserrat 
      Guatemala                   Netherlands Antilles 
      Guyana                       Saint Christopher-Nevis       Haiti                        Turks and Caicos Islands       Honduras                     Virgin Islands, British      In addition, the President shall not desi gnate any country a beneficiary country under this 
chapter - 
         (1) if such country is a Communist country;          (2) if such country -            (A) has nationalized, expropriated or  otherwise seized ownership or control of property 
owned by a United States citizen or by a corporati on, partnership, or association which is 50 per 
centum or more beneficially owned by United States citizens, 
           (B) has taken steps to repudiate or nullify - 
             (i) any existing contract or agreement with, or              (ii) any patent, trademark, or other intellectual property of, a United States citizen or a 
corporation, partnership, or association which is 50 per centum or more beneficially owned by United 
States citizens, the effect of which is to nationa lize, expropriate, or otherwise seize ownership or 
control of property so owned, or            
 (C) has imposed or enforced taxes or other exactions, restrictive maintenance or operational conditions, or othe r measures with respect to property so owned, the effect of which is to 
nationalize, expropriate, or otherw ise seize ownership or control of such property, unless the President 
determines that - 
             (i) prompt, adequate, and effective compensation has been or is being made to such citizen, G/C/W/508/Add.1 
Page 8  
 
corporation, partnership, or association,              (ii) good-faith negotiations to provide prompt, adequate, and effective compensation under 
the applicable provisions of international law are in  progress, or such country is otherwise taking steps 
to discharge its obligations under international la w with respect to such citizen, corporation, 
partnership, or association, or 
             (iii) a dispute involving such citizen, corporation, partne rship, or association, over 
compensation for such a seizure has been submitt ed to arbitration under the provisions of the 
Convention for the Settlement of Investment Disputes,  or in another mutually agreed upon forum, and 
promptly furnishes a copy of such determina tion to the Senate and House of Representatives; 
         (3) if such country fails to act in good faith in recognizing as binding or in enforcing 
arbitral awards in favor of United States citizens or  a corporation, partnership or association which is 
50 per centum or more beneficially owned by Un ited States citizens, which have been made by 
arbitrators appointed for each case or by permanent arbitral bodies to which the parties involved have 
submitted their dispute;          (4) if such country affords preferen tial treatment to the products of a developed country, 
other than the United States, which has, or is lik ely to have, a significant adverse effect on United 
States commerce, unless the President has recei ved assurances satisfactory to him that such 
preferential treatment will be eliminated or that ac tion will be taken to assure that there will be no 
such significant adverse effect, and he reports those assurances to the Congress;          (5) if a government-owned entity in su ch country engages in the broadcast of copyrighted 
material, including films or television material, bel onging to United States copyright owners without 
their express consent; 
         (6) unless such country is a signatory to a treaty, convention, protocol, or other agreement 
regarding the extradition of United States citizens; and          (7) if such country has not or is not ta king steps to afford internationally recognized worker 
rights (as defined in section 2467(4) of this title) to  workers in the country (including any designated 
zone in that country). Paragraphs (1), (2), (3), (5), and (7) shall not prevent the designation of any 
country as a beneficiary country under this Act if th e President determines that such designation will 
be in the national economic or security interest of the United States and reports such determination to 
the Congress with his reasons therefor.      (c) Factors determining designation        In determining whether to designate a ny country a beneficiary country under this chapter, 
the President shall take into account - 
         (1) an expression by such country of its desire to be so designated;          (2) the economic conditions in such c ountry, the living standards of  its inhabitants, and any 
other economic factors whic h he deems appropriate; 
         (3) the extent to which such country  has assured the United States it will provide equitable 
and reasonable access to the markets and basic commodity resources of such country; 
         (4) the degree to which such count ry follows the accepted rules of international trade 
provided for under the WTO Agreement and the multila teral trade agreements (as such terms are 
defined in paragraphs (9) and (4), resp ectively, of section 3501 of this title); 
         (5) the degree to which such country uses export subsidies or imposes export performance requirements or local content requirements which distort international trade; 
         (6) the degree to which the trade polici es of such country as they relate to other beneficiary 
countries are contributing to the revitalization of the region;          (7) the degree to which such country  is undertaking self-help measures to promote its own 
economic development;          (8) whether or not such country has ta ken or is taking steps to afford to workers in that 
country (including any designated zone in that c ountry) internationally recognized worker rights. 
         (9) the extent to which such count ry provides under its law adequate and effective means 
for foreign nationals to secure, exercise, and en force exclusive rights in intellectual property, 
including patent, trademark, and copyright rights;          (10) the extent to which such country  prohibits its nationals from engaging in the broadcast 
of copyrighted material, including films or television material, belonging to United States copyright  G/C/W/508/Add.1 
 Page 9 
 
 
owners without their express consent; and          (11) the extent to which such country is prepared to cooperate with the United States in the 
administration of the provisions of this chapter.      (d) Omitted      (e) Withdrawal or suspension of duty-free treatment to specific articles 
       (1)(A) The President may, after the re quirements of subsection (a)(2) of this section and 
paragraph (2) have been met -          (i) withdraw or suspend the desi gnation of any country as a beneficiary country, or 
         (ii) withdraw, suspend, or limit the application of duty-free treatment under this chapter to 
any article of any country, if, after such designa tion, the President determines that as a result of 
changed circumstances such country would be ba rred from designation as a beneficiary country under 
subsection (b) of this section.        (B) The President may, after the requirements of subsection (a)(2) of this section and paragraph (2) have been met -          (i) withdraw or suspend the designation of any country as a CBTPA beneficiary country; or  
         (ii) withdraw, suspend, or limit the application of preferential treatment under section 
2703(b)(2) and (3) of this title to any article of an y country, if, after such designation, the President 
determines that, as a result of changed circumst ances, the performance of such country is not 
satisfactory under the criteria set fort h in section 2703(b)(5)(B) of this title. 
       (2)(A) The President shall publish in the Federal Register notice of the action the President 
proposes to take under paragraph (1) at least  30 days prior to taking such action. 
       (B) The United States Trade Represen tative shall, within the 30-day period beginning on 
the date on which the Presidentpublishes under su bparagraph (A) notice of proposed action - 
         (i) accept written comments from the public regarding such proposed action, 
         (ii) hold a public hearing on such proposed action, and          (iii) publish in the Federal Register - 
           (I) notice of the time and pl ace of such hearing prior to the hearing, and 
           (II) the time and place at which such written comments will be accepted.        (3) If preferential treatment under secti on 2703(b)(2) and (3) of this title is withdrawn, 
suspended, or limited with respect to a CBTPA benefi ciary country, such country shall not be deemed 
to be a ''party'' for the purposes of applying section 2703(b)(5)(C) of this title to imports of articles for which preferential treatment has been withdrawn, su spended, or limited with respect to such country. 
     (f) Reporting requirements 
       (1) In general          Not later than December 31, 2001, and every 2 years thereafter during the period this 
chapter is in effect, the United States Trad e Representative shall submit to Congress a report 
regarding the operation of this chapter, including - 
           (A) with respect to subsections (b) an d (c) of this section, the results of a general review of 
beneficiary countries based on the considera tions described in such subsections; and 
           (B) the performance of each bene ficiary country or CBTPA beneficiary country, as the 
case may be, under the criteria set forth in section 2703(b)(5)(B) of this title.        (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 2703(b)(5)(B) of this title. 
 Sec. 2703. Eligible articles  
     (a) Growth, product, or manufacture of beneficiary countries 
       (1) Unless otherwise excluded from eligibilit y by this chapter, and subject to section 423 of 
the Tax Reform Act of 1986, and except as provided in  subsection (b)(2) and (3) of this section, the 
duty-free treatment provided under this chapter shall a pply to any article which is the growth, product, 
or manufacture of a beneficiary country if - 
         (A) that article is imported directly from a beneficiary country into the customs territory of G/C/W/508/Add.1 
Page 10  
 
the United States; and          (B) the sum of (i) the cost or value of the materials produced in a beneficiary country or two or more beneficiary countries, plus (ii) the direct costs of processing operations performed in a 
beneficiary country or countries is not less than 35 pe r centum of the appraised value of such article at 
the time it is entered. For purposes of determining th e percentage referred to in subparagraph (B), the 
term ''beneficiary country'' includes the Commonwealth  of Puerto Rico and the United States Virgin 
Islands. If the cost or value of materials produced in  the customs territory of the United States (other 
than the Commonwealth of Puerto Rico) is included w ith respect to an article to which this paragraph 
applies, an amount not to exceed 15 per centum of th e appraised value of the article at the time it is 
entered that is attributed to such United States co st or value may be applied toward determining the 
percentage referred to in subparagraph (B). 
       (2) The Secretary of the Treasury sha ll prescribe such regulations as may be necessary to 
carry out this subsection including, but not limited to, regulations providing that, in order to be 
eligible for duty-free treatment under this chapter, an  article must be wholly the growth, product, or 
manufacture of a beneficiary country, or must be a new or different article of commerce which has 
been grown, produced, or manufactured in the benefi ciary country; but no article or material of a 
beneficiary country shall be eligible for such tr eatment by virtue of having merely undergone - 
         (A) simple combining or packaging operations, or          (B) mere dilution with water or mere dilution with another substance that does not 
materially alter the characteristics of the article.        (3) As used in this subsection, the ph rase ''direct costs of processing operations'' includes, 
but is not limited to - 
         (A) all actual labor costs involved in  the growth, production, manufacture, or assembly of 
the specific merchandise, including fringe benefits, on- the-job training and the cost of engineering, 
supervisory, quality control,  and similar personnel; and 
         (B) dies, molds, tooling, and depr eciation on machinery and equipment which are allocable 
to the specific merchandise. Such phrase does not incl ude costs which are not directly attributable to 
the merchandise concerned or are not costs of manufacturing the product, such as (i) profit, and (ii) general expenses of doing business which are either not  allocable to the specific merchandise or are 
not related to the growth, production, manufacture,  or assembly of the merchandise, such as 
administrative salaries, casualty and liability insu rance, advertising, and salesmen's salaries, 
commissions or expenses. 
       (4) Notwithstanding section 1311 of this title, the products of a beneficiary country which 
are imported directly from any beneficiary country  into Puerto Rico may be entered under bond for 
processing or use in manufacturing in Puerto Rico. No duty shall be imposed on the withdrawal from 
warehouse of the product of such processing or manufact uring if, at the time of such withdrawal, such 
product meets the requirements of paragraph (1)(B). 
       (5) The duty-free treatment provided under th is chapter shall apply to an article (other than 
an article listed in subsection (b) of this section) which is the growth, product, or manufacture of the 
Commonwealth of Puerto Rico if -          (A) the article is imported directly from the beneficiary country into the customs territory 
of the United States,          (B) the article was by any means advanced in value or im proved in condition in a 
beneficiary country, and 
         (C) if any materials are added to the article in a beneficiary country, such materials are a 
product of a beneficiary country or the United States.        (6) Notwithstanding paragraph (1), the duty-free treatment provided under this chapter 
shall apply to liqueurs and spirituous beverages pr oduced in the territory of Canada from rum if - 
         (A) such rum is the growth, product, or manufacture of a beneficiary country or of the 
Virgin Islands of the United States;          (B) such rum is imported directly fro m a beneficiary country or the Virgin Islands of the 
United States into the territory of Canada, and such liqueurs and spirituous beverages are imported 
directly from the territory of Canada into the customs territory of the United States; 
         (C) when imported into the custom s territory of the United States, such liqueurs and  G/C/W/508/Add.1 
 Page 11 
 
 
spirituous beverages are classified in subh eading 2208.90 or 2208. 40 of the HTS; and 
        (D) such rum accounts for at least 90 pe rcent by volume of the alcoholic content of such 
liqueurs and spirituous beverages.      (b) Import-sensitive articles        (1) In general 
         Subject to paragraphs (2) through (5 ), the duty-free treatment provided under this chapter 
does not apply to -            (A) textile and apparel articles whic h were not eligible articles for purposes of this chapter 
on January 1, 1994, as this chapte r was in effect on that date; 
           (B) footwear not designated at the time of the effective date of this chapter (Aug. 5, 1983) 
as eligible articles for the purpose of the generalized  system of preferences under title V of the Trade 
Act of 1974 (19 U.S.C. 2461 et seq.);            (C) tuna, prepared or pr eserved in any manner, in airtight containers; 
           (D) petroleum, or any product de rived from petroleum, provided for in headings 2709 and 
2710 of the HTS; 
           (E) watches and watch parts (including cases, bracelets, and straps), of whatever type 
including, but not limited to, mechanical, quartz dig ital 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; or            (F) articles to which reduced rates of duty apply under subsection (h) of this section.        (2) Transition period treatment of certain textile and apparel articles 
         (A) Articles covered 
           During the transition period, the pr eferential treatment described in subparagraph (B) shall 
apply to the following articles:            (i) Apparel articles assemb led in one or more CBTPA beneficiary countries 
             Apparel articles sewn or otherw ise assembled in one or more CBTPA beneficiary countries 
from fabrics wholly formed and cut, or from comp onents 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 -                (I) entered unde r subheading 9802.00.80 of the HTS; or 
               (II) entered under chapter 61 or 62 of the HTS, if, after such assembly, the articles would 
have qualified for entry under subheading 9802.00.80 of  the HTS but for the fact that the articles were 
embroidered or subjected to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, screen printing,  or other similar processes.  Apparel articles 
entered on or after September 1, 2002, shall qualif y 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. Appa rel 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.              (ii) Other apparel articles a ssembled in one or more CBTPA beneficiary countries 
             Apparel articles sewn or otherw ise assembled in one or more CBTPA beneficiary countries 
with thread formed in the United States from fabr ics 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 yarn s 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 Unite d 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 asse mbled, if the fabrics are knit fabrics, is carried 
out in the United States. Apparel articles entere d 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. Apparel 
articles shall qualify under the preceding sentence only if all dyeing, printing, and finishing of the G/C/W/508/Add.1 
Page 12  
 
fabrics from which the articles are assembled, if th e fabrics are knit fabrics, is carried out in the 
United States.            (iii) Certain knit apparel articles              (I) Apparel articles knit to shape (other than socks provided for in heading 6115 of the 
HTS) in a CBTPA beneficiary country from yarns wholly formed in the United States, and knit 
apparel articles (other than t-shirts described in  subclause (III)) cut and wholly assembled in one or 
more CBTPA beneficiary countries from fabric form ed in one or more CBTPA beneficiary countries 
or the United States from yarns wholly formed in th e United States (including fabrics not formed from 
yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are formed in one or more CBTPA beneficiary countries), in an amount not exceeding the amount set forth in subclause 
(II). 
             (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 mete r equivalents during the 1-year period beginning on October 
1, 2003. 
               (cc) 970,000,000 square mete r equivalents in each succeeding 1-year period through 
September 30, 2008.              (III) T-shirts, other than underwear, classifiable under subheadings 6109.10.00 and 
6109.90.10 of the HTS, made in one or more CBTPA  beneficiary countries from fabric formed in one 
or more CBTPA beneficiary countries from yarns wholly formed in the United States, in an amount 
not exceeding the amount set forth in subclause (IV). 
             (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. 
             (V) It is the sense of the Congr ess that the Congress should determine, based on the record 
of expansion of exports from the United States as a result of the preferential treatment of articles 
under this clause, the percentage by which the am ount provided in subclauses (II) and (IV) should be 
compounded for the 1-year periods occurring after th e 1-year period ending on September 30, 2004. 
           (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 describe d in subclause (I) of a producer or an entity 
controlling production shall be eligible for preferen tial 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) containe d in all such articles of that 
producer or entity that are entered and eligible un der this clause during the preceding 1-year period. 
             (III) Development of procedure to ensure compliance                The United States Customs Serv ice 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 fo r 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  G/C/W/508/Add.1 
 Page 13 
 
 
that producer or entity entered during the precedi ng 1-year period is at least 85 percent of the 
aggregate declared customs value of the fabric (exc lusive of all findings a nd trimmings) contained in 
all such articles of that producer or entity that ar e entered and eligible under this clause during the 
preceding 1-year period.            (v) Apparel articles assembled from fabrics or yarn not widely available in commercial 
quantities 
             (I) Apparel articles that are both cut (or knit-to-shape) and sewn or otherwise assembled in 
one or more CBTPA beneficiary countries, from fabrics or yarn that is not formed in the United States 
or in one or more CBTPA beneficiary countries, to th e extent that apparel articles of such fabrics or 
yarn would be eligible for prefer ential treatment, without regard to the source of the fabrics or yarn, 
under Annex 401 of the NAFTA. 
             (II) At the request of any interested party, the President is authorized to proclaim additional 
fabrics and yarn as eligible for prefer ential treatment under subclause (I) if - 
               (aa) the President determines that  such fabrics or yarn cannot be supplied by the domestic 
industry in commercial quantities in a timely manner; 
               (bb) the President has obtai ned 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;                (cc) 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 a nd the reasons for such actions, and the advice 
obtained under division (bb); 
               (dd) a period of 60 calendar da ys, beginning with the first day on which the President has 
met the requirements of division (cc), has expired; and                (ee) the President has consu lted with such committees rega rding the proposed action during 
the period referred to in division (cc). 
           (vi) Handloomed, handmade, and folklore articles 
 A handloomed, handmade, or folklore article  of a CBTPA beneficiary country identified 
under subparagraph (C) that is certified as such by the competent authority of such beneficiary 
country.            (vii) Special rules              (I) Exception for findings and trimmings 
               (aa) An article otherwise elig ible 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 percen t 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 tape s and labels, and other 
similar products.  Elastic strips are considered findi ngs or trimmings only if they are each less than 1 
inch in width and are used in the production of brassieres.                (bb) In the case of an article d escribed in clause (ii) of this subparagraph, sewing thread 
shall not be treated as findings or trimmings under this subclause.              (II) Certain interlining                (aa) An article otherwise elig ible for preferential treatment under this paragraph shall not 
be ineligible for such treatment becau se 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 divi sion (aa) include only a chest 
type plate, ''hymo'' piece, or ''sleeve header'', of  woven or weft-inserted wa rp 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 produc ing 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 paragraph G/C/W/508/Add.1 
Page 14  
 
because the article contains fibers or yarns not who lly formed in the United States or in one or more 
CBTPA beneficiary countries shall not be ineligible fo r such treatment if the total weight of all such 
fibers or yarns is not more than 7 percent of th e total weight of the good.  Notwithstanding the 
preceding sentence, an apparel article containing elast omeric yarns shall be eligible for preferential 
treatment under this paragraph only if such ya rns are wholly formed in the United States. 
             (IV) Special origin rule 
               An article otherwise eligible for preferential treatment under clause (i) or (ii) of this 
subparagraph shall not be ineligible for such treat ment because the article contains nylon filament 
yarn (other than elastomeric yarn) that is cl assifiable 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 duty-free 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.              (V) Thread                An article otherwise eligible for preferential treatment under this paragraph shall not be 
ineligible for such treatment becau se the thread used to assemble the article is dyed, printed, or 
finished in one or more CBTPA beneficiary countries. 
           (viii) Textile luggage              Textile luggage -                (I) assembled in a CBTPA 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  a CBTPA beneficiary country from fabric wholly formed 
in the United States from yarns who lly formed in the United States. 
           (ix) Apparel articles assembled in one or more CBTPA beneficiary countries from United States and CBTPA beneficiary country components              Apparel articles sewn or otherw ise assembled in one or more CBTPA beneficiary countries 
with thread formed in the United States from compon ents 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 kni t-to-shape in the United States and one or more 
CBTPA beneficiary countries from yarns wholly fo rmed in the United States, or both (including 
fabrics not  formed from yarns, if such fabri cs 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) Preferential treatment            Except as provided in subparagraph (E), during the transition period, the articles to which 
this subparagraph applies shall  enter the Unite d States free of duty and free of any quantitative 
restrictions, limitations, or consultation levels. 
         (C) Handloomed, handmade, and folklore articles            For purposes of subparagraph (A)(vi) , the President shall consult with representatives of 
the CBTPA beneficiary countries concerned for th e purpose of identifying particular textile and 
apparel goods that are mutually agreed upon as bei ng 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 transshipments 
           (i) Penalties for exporters              If the President determines, based  on sufficient evidence, that an exporter has engaged in 
transshipment with respect to textile or apparel articles from a CBTPA beneficiary country, then the 
President shall deny all benefits under this chap ter 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 CBTPA  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  G/C/W/508/Add.1 
 Page 15 
 
 
shall reduce the quantities of textile  and 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 mean ing of this subparagraph has occurred when preferential 
treatment under subparagraph (B) has been claimed for a textile or 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 woul d have meant that the article is or was ineligible 
for preferential treatment under subparagraph (B). 
         (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 a CBTPA beneficiary country if the 
application of tariff treatment under subparagraph (B) to such article results in conditions that would 
be cause for the taking of such actions under such sec tion 4 with respect to a like article described in 
the same 8-digit subheading of the HTS that is imported from Mexico. 
           (ii) Rules re lating to bilatera l emergency action 
             or purposes of applying bi lateral emergency action un der this subparagraph - 
               (I) the requirements of paragr aph (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 have the meaning given that 
term in paragraph (5)(D) of this subsection; and 
               (III) the requirements to consult specified in section 4 of the Annex shall be treated as 
satisfied if the President requests consultations w ith the CBTPA beneficiary country in question and 
the country does not agree to consult within  the time period specified under section 4. 
       (3) Transition period treatment of certain  other articles originating in beneficiary countries 
         (A) Equivalent tariff treatment            (i) In general              Subject to clause (ii), the tariff treatment accorded at any time during the transition period 
to any article referred to in any of subparagraphs (B) through (F) of paragraph (1) that is a CBTPA 
originating good shall be identical to the tariff treat ment that is accorded at such time under Annex 
302.2 of the NAFTA to an article described in the same 8-digit subheading of the HTS that is a good 
of Mexico and is imported into the United States.            (ii) Exception              Clause (i) does not apply to any article accorded duty-free treatment under U.S. Note 2(b) 
to subchapter II of chapter 98 of the HTS. 
         (B) Relationship to subsection (h) duty reductions 
           If at any time during the transition pe riod the rate of duty that would (but for action taken 
under subparagraph (A)(i) in regard to such period) apply with respect to any article under subsection 
(h) of this section is a rate of duty that is lower than the rate of duty resulti ng from such action, then 
such lower rate of duty shall be applied for the purposes of implementing such action. 
       (4) Customs procedures 
         (A) In general 
           (i) Regulations              Any importer that claims prefer ential treatment under paragraph (2) or (3) shall comply 
with customs procedures similar in all material r espects to the requirements of Article 502(1) of the 
NAFTA as implemented pursuant to United States la w, 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 (2) or (3) and for a 
Certificate of Origin to be valid with respect to an y article for which such treatment is claimed, there 
shall be in effect a determination by the Preside nt that each country described in subclause (II) - G/C/W/508/Add.1 
Page 16  
 
                 (aa) has implemented and follows; or                  bb) is making substantia l progress toward implementing and following, procedures and 
requirements similar in all materi al 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 a CBTPA beneficiary country - 
                 (aa) from which the article is exported; or              (bb) in which materials used in th e 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 (2) or (3). 
         (B) Certificate of origin 
           The Certificate of Origin that ot herwise would be required pur suant to the provisions of 
subparagraph (A) shall not be required in the case of an article imported under paragraph (2) or (3) if 
such Certificate of Origin would not be require d under Article 503 of the NAFTA (as implemented 
pursuant to United States law), if the article were imported from Mexico. 
         (C) Report by USTR on cooperati on of other countries concerning circumvention 
           The United States Commissioner of Customs shall conduct a study analyzing the extent to which each CBTPA beneficiary country -              (i) has cooperated fully with th e United States, consistent with its domestic laws and 
procedures, in instances of circumvention or alle ged circumvention of existing quotas on imports of 
textile and apparel goods, to establish necessary releva nt facts in the places of import, export, and, 
where applicable, transshipment, including investig ation of circumvention practices, exchanges of 
documents, correspondence, reports, and other relevant information, to the extent such information is 
available;              (ii) has taken appropriate measur es, consistent with its dom estic laws and procedures, 
against exporters and importers i nvolved in instances of false declaration concerning fiber content, 
quantities, description, classification, or or igin 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 Trade 
Representative shall submit to Congress, not late r than October 1, 2001, a report on the study 
conducted under this  subparagraph. 
       (5) Definitions and special rules 
         For purposes of this subsection -          (A) Annex            The term ''the Annex'' means Annex 300-B of the NAFTA.          (B) CBTPA beneficiary country 
           The term ''CBTPA beneficiary coun try'' means any ''beneficiary country'', as defined in 
section 2702(a)(1)(A) of this title, which the Preside nt designates as a CBTPA beneficiary country, 
taking into account the criteria contained in subsect ions (b) and (c) of section 2702 of this title and 
other appropriate criteria, including the following:              (i) Whether the benefici ary country has demonstrated a commitment to - 
               (I) undertake its obligations unde r the WTO, including those agreements listed in section 
3511(d) of this title, 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 a fforded under the Agreement on Trade-Related Aspects 
of Intellectual Property Rights described  in section 3511(d)(15) of this title. 
             (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;  G/C/W/508/Add.1 
 Page 17 
 
 
               (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 impl emented its commitments to el iminate the worst forms of 
child labor, as defined in section 507(6) of the Trade Act of 1974 (19 U.S.C. 2467(6)). 
             (v) The extent to which the c ountry has met the counter-narcotics certification criteria set 
forth in section 2291j of title 22 for eligibility for United States assistance.              (vi) The extent to which the count ry 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 th e Agreement on Government Procurement described 
in section 3511(d)(17) of this title; and                (II) contributes to efforts in inte rnational fora to develop and implement international rules 
in transparency in government procurement. 
         (C) CBTPA originating good 
           (i) In general              The term ''CBTPA originating goo d'' means a good that meets the rules of origin for a good 
set forth in chapter 4 of the NAFTA as implemented pursuant to United States law.            (ii) Application of chapter 4              In applying chapter 4 of the NAFTA with respect to a CBTPA beneficiary country for 
purposes of this subsection - 
               (I) no country other than th e United States and a CBTPA beneficiary country may be 
treated as being a party to the NAFTA;                (II) any reference to trade betw een the United States and Mexico shall be deemed to refer 
to trade between the United States and a CBTPA beneficiary country; 
               (III) any reference to a party sha ll be deemed to refer to a CBTPA beneficiary country or 
the United States; and                 (IV) any reference to parties shall be deemed to refer to any combination of CBTPA 
beneficiary countries or to the United States and one  or more CBTPA beneficiary countries (or any 
combination thereof).          (D) Transition period 
           The term ''transition period'' mean s, with respect to a CBTPA beneficiary country, the 
period that begins on October 1, 2000, and ends on the earlier of -              (i) September 30, 2008; or              (ii) the date on which the FTAA or another free trade agreement that makes substantial 
progress in achieving the negotiating objectives set fort h in 3317(b)(5) of this title enters into force 
with respect to the United States and the CBTPA beneficiary country. 
         (E) CBTPA            The term ''CBTPA'' means the United States-Caribbean Basin Trade Partnership Act. 
         (F) FTAA            The term ''FTAA'' means the Free Trade Area of the Americas.      (c) Sugar and beef products; stable  food production plan; suspension of duty-free 
treatment; monitoring 
 (1) As used in this subsection -         (A) The term ''sugar and beef products'' means -            (i) sugars, sirups, and mol asses provided for in subheadi ngs 1701.11.00,  1701.12.00, 
1701.91.20, 1701.99.00, 1702.90.30, 1806.10.40, and 2106.90.10 of the Harmonized Tariff Schedule 
of the United States, and 
           (ii) articles of beef or veal, howev er provided for in chapters  2 and 16 of the Harmonized 
Tariff Schedule of the United States.          (B) The term ''Plan'' means a stable  food production plan that consists of measures and 
proposals designed to ensure that the present level of food production in, and the nutritional level of 
the population of, a beneficiary country  will not be adversely affected by changes in land use and land G/C/W/508/Add.1 
Page 18  
 
ownership that will result if incr eased production of sugar and beef products is undertaken in response 
to the duty-free treatment extended under this chapte r to such products.  A Plan must specify such 
facts regarding, and such proposed actions by, a beneficiary country as the President deems necessary 
for purposes of carrying out this subsection, including but not limited to -            (i) the current levels of food  production and nutritional health of the population; 
           (ii) current level of pro duction and export of sugar and beef products; 
           (iii) expected increases in productio n and export of sugar and beef products as a result of 
the duty-free access to the United States market provided under this chapter; 
           (iv) measures to be taken to ensure  that the expanded production of those products because 
of such duty-free access will not occur at th e expense of stable food production; and 
           (v) proposals for a system to mon itor the impact of such duty-free access on stable food 
production and land use and land ownership patterns.        (2) Duty-free treatment extended under this  chapter to sugar and beef products that are the 
product of a beneficiary country shall be suspende d by the President under this subsection if –  
 (A) the beneficiary country, within the nine ty-day period beginning on the date of its 
designation as such a country under section 2702 of this title, does not submit a Plan to the President 
for evaluation;          (B) on the basis of his evaluation, the President determines that the Plan of a beneficiary country does not meet the criteria set forth in paragraph (1)(B); or          (C) as a result of the monitoring of the operation of the Plan under paragraph (5), the President determines that a beneficiary country is  not making a good faith effort to implement its 
Plan, or that the measures and proposals in the Plan, although being implemented, are not achieving 
their purposes.         (3) Before the President suspends duty -free treatment by reason of paragraph (2)(A), (B), 
or (C) to the sugar and beef products  of a beneficiary country, he must  offer to enter into consultation 
with the beneficiary country for purposes of form ulating appropriate remedial action which may be 
taken by that country to avoid such suspension.  If the beneficiary country thereafter enters into 
consultation within a reasonable time and undertakes to formulate remedial action in good faith, the 
President shall withhold the suspension of duty-fre e treatment on the condition that the remedial 
action agreed upon be appropriately  implemented by that country. 
       (4) The President shall monitor on a bi ennial basis the operation of the Plans implemented 
by beneficiary countries, and shall submit a written report to Congress by March 15 following the 
close of 
    each biennium, that -          (A) specifies the extent to which each  Plan, and remedial actions, if any, agreed upon under 
paragraph (4), have b een implemented; and 
         (B) evaluates the results of such implementation. 
       (5) The President shall terminate any suspension of duty-free treatment imposed under this 
subsection if he determines that the beneficiary country has taken appropriate action to remedy the 
factors on which the suspension was based.      (d) Tariff-rate quotas        No quantity of an agricultural product subject to a tariff-rate quota that exceeds the in-quota quantity shall be eligible for dut y-free treatment under this chapter. 
     (e) Proclamations suspending duty-free treatment  
 (1) The President may by proclamation susp end the duty-free treatment provided by this 
chapter with respect to any eligible article and may pr oclaim a duty rate for such article if such action 
is provided under chapter 1 of title II of the Trade Act of 1974 (19 U.S.C. 2251 et seq.) or section 
1862 of this title.  
       (2) In any report by the Internati onal Trade Commission to the President under section 
202(f) of the Trade Act of 1974 (19 U.S.C. 2252 (f)) regarding any article for which duty-free 
treatment has been proclaimed by the President pur suant to this chapter, the Commission shall state 
whether and to what extent its findings and r ecommendations apply to such article when imported 
from beneficiary countries. 
       (3) For purposes of subsections sec tion 203 of the Trade Act of 1974 (19 U.S.C. 2253(a),  G/C/W/508/Add.1 
 Page 19 
 
 
(c)), the suspension of the duty-free treatment provide d by this chapter shall be treated as an increase 
in duty.        (4) No proclamation which provides solely  for a suspension referred to in paragraph (3) of 
this subsection with respect to any article shall be taken under section 203 of the Trade Act of 1974 
(19 U.S.C. 2253) unless the United States International Trade Commission, in addition to making an 
affirmative determination with respect to such ar ticle under section 202(b) of  the Trade Act of 1974 
(19 U.S.C. 2252(b)), determines in the course of its  investigation under such section that the serious 
injury (or threat thereof) substantially caused by im ports to the domestic industry producing a like or 
directly competitive article results from the duty-free treatment provided by this chapter.        (5)(A) Any action taken under section 203 of the Trade Act of 1974 (19 U.S.C. 2253) that 
is in effect when duty-free treatment pursuant to sect ion 2701 of this title is proclaimed shall remain 
in effect until modified or terminated.        (B) If any article is subject to any such  action at the time duty-free treatment is proclaimed 
pursuant to section 2701 of this title, the President ma y reduce or terminate the application of such 
action to the importation of such article from benefi ciary countries prior to the otherwise scheduled 
date on which such reduction or termination would occur pursuant to the criteria and procedures of 
section 203 of the Trade Act of 1974 (19 U.S.C. 2253).      (f) Petitions to International Trade Commission        (1) If a petition is filed with the Inte rnational Trade Commission pursuant to the provisions 
of section 201 of the Trade Act of 1974 (19 U.S.C. 2251) regarding a perishable product and alleging 
injury from imports from beneficiary countries, then  the petition may also be filed with the Secretary 
of Agriculture with a request that emergency relie f be granted pursuant to paragraph (3) of this 
subsection with respect to such article.         (2) Within fourteen days after the filing of  a petition under paragraph (1) of this subsection 
-          (A) if the Secretary of Agriculture has reason to believe that a perishable product from a 
beneficiary country is being imported into the United States in such increased quantities as to be a 
substantial cause of serious injury, or the thr eat thereof, to the domestic industry producing a 
perishable product like or directly competitive with  the imported product and th at emergency action is 
warranted, he shall advise the President and recomme nd that the President take emergency action; or 
         (B) the Secretary of Agriculture shall publish a notice of his determination not to 
recommend the imposition of emergency action and so advise the petitioner. 
       (3) Within seven days after the Presi dent receives a recommendation from the Secretary of 
Agriculture to take emergency action pursuant to pa ragraph (2) of this subsection, he shall issue a 
proclamation withdrawing the duty-free treatment provi ded by this chapter or publish a notice of his 
determination not to ta ke emergency action. 
       (4) The emergency action provided by para graph (3) of this subsection shall cease to apply 
- 
         (A) upon the taking of action under sec tion 203 of the Trade Act of 1974 (19 U.S.C. 2253), 
         (B) on the day a determination by th e President not to take action under section 203 of such 
Act (19 U.S.C. 2253) not to take action becomes final,          (C) in the event of a report of th e United States International Trade Commission containing 
a negative finding, on the day the Commission's report is submitted to the President, or 
         (D) whenever the President determin es that because of changed circumstances such relief 
is no longer warranted.        (5) For purposes of this subsec tion, the term ''perishable product'' means - 
         (A) live plants and fresh cut flowers provided for in chapter 6 of the HTS;          (B) fresh or chilled vegetables pr ovided for in headings 0701 through 0709 (except 
subheading 0709.52.00) and heading 0714 of the HTS; 
         (C) fresh fruit provided for in subh eadings 0804.20 through 0810.90 (except citrons of 
subheading 0805.90.00, tamarinds and kiwi fruit of subheading 0810.90.20, and cashew apples, 
mameyes colorados, sapodillas, soursops and sweetso ps of subheading 0810.90.40) of the HTS; and 
         (D) concentrated citrus fruit juice provided for in subheadings 2009.11.00, 2009.19.40, 
2009.20.40, 2009.30.20, and 2009.30.60 of the HTS. G/C/W/508/Add.1 
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     (g) Fees not affected by proclamation        No proclamation issued pursuant to th is chapter shall affect fees imposed pursuant to 
section 624 of title 7.      (h) Duty reduction fo r certain leather-related products 
       (1) Subject to paragraph (2), the Preside nt shall proclaim reductions  in the rates of duty on 
handbags, luggage, flat goods, work glov es, and leather wearing apparel that - 
         (A) are the product of any beneficiary country; and          (B) 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 (19 U.S.C. 2461 et seq.). 
       (2) The reduction required under paragraph (1) in the rate of duty on any article shall - 
         (A) result in a rate that is equal to 80 percent of the rate of duty that applies to the article on 
December 31, 1991, except that, subj ect to the limitations in paragraph (3), the reduction may not 
exceed 2.5 percent ad valorem; and          (B) be implemented in 5 equal a nnual stages with the first one-fifth of the aggregate 
reduction in the rate of duty being applied to entr ies, or withdrawals from warehouse for consumption, 
of the article on or after January 1, 1992. 
       (3) The reduction required under this sub section with respect to the rate of duty on any 
article is in addition to any reductio n in the rate of duty on that article that may be proclaimed by the 
President as being required or appropriate to carry  out any trade agreement entered into under the 
Uruguay Round of trade negotiations; except that if the reduction so proclaimed -          (A) is less than 1.5 percent ad valore m, the aggregate of such proclaimed reduction and the 
reduction under this subsection may not exceed 3.5 percent ad valorem, or 
         (B) is 1.5 percent ad valorem or gr eater, the aggregate of su ch proclaimed reduction and 
the reduction under this subsection may not exceed the proclaimed reduction plus 1 percent ad 
valorem.  
Sec. 2704. International Trade Commission reports on impact of Caribbean Basin Economic 
Recovery Program        (a) Reporting requirement        (1) In general          The United States International Tr ade Commission (in this section referred to as the 
''Commission'') shall submit to Congress and the Pr esident biennial reports regarding the economic 
impact of this chapter on United States indus tries and consumers and on the economy of the 
beneficiary countries.        (2) First report          The first report shall be submitted not later than September 30, 2001. 
       (3) Treatment of Puerto Rico, etc. 
         For purposes of this section, industr ies in the Commonwealth of Puerto Rico and the 
insular possessions of the United States are c onsidered to be United States industries. 
     (b) Requisite areas of Commission assessment        (1) Each report required under subsecti on (a) of this section shall include, but not be 
limited to, an assessment by the Commission regarding - 
         (A) the actual effect, during the peri od covered by the report, of this Act on the United 
States economy generally as well as on those specific domestic industries which produce articles that 
are like, or directly competitive with, articles be ing imported into the United States from beneficiary 
countries; and          (B) the probable future effect which this Act will have on the United States economy 
generally, as well as on such domestic industries, be fore the provisions of this Act terminate. 
       (2) In preparing the assessments require d under paragraph (1), the Commission shall, to the 
extent practicable -          (A) analyze the production, trade a nd consumption of United States products affected by 
this Act, taking into consideration employment, profit levels, and use of productive facilities with 
respect to the domestic industries concerned, and such  other economic factors in such industries as it  G/C/W/508/Add.1 
 Page 21 
 
 
considers relevant, including prices, wages, sales, inventories, patterns of demand, capital investment, 
obsolescence of equipment, and dive rsification of production; and 
         (B) describe the nature and extent of any significant change in employment, profit levels, and use of productive facilities, and such other co nditions as it deems relevant in the domestic 
industries concerned, which it believes are attributable to this Act. 
     (c) Time of submission of reports; public participation 
       (1) Each report required under subsec tion (a) of this section shall be submitted to the 
Congress and to the President before the close of the nine-month period beginning on the day after the 
last day of the period covered by the report.        (2) The Commission shall provide opport unity for the submission by the public, either 
orally or in writing, or both, of  information relating to matters th at will be addressed in the reports. 
 Sec. 2705. Impact study by Secretary of Labor         The Secretary of Labor, in consulatio n with other appropriate Federal agencies, shall 
undertake a continuing review and analysis of the impact which the implementation of the provisions 
of this chapter have with respect to United Stat es labor; and shall make an annual written report to 
Congress on the results of such review and analysis.         Sec. 2706. Effective date  
       (a) This chapter shall take effect on August 5, 1983. 
       (b) Repealed. Pub. L. 101-382, title II, Sec. 211, Aug. 20, 1990, 104 Stat. 655.  Sec. 2707. Center for the Study of Western Hemispheric Trade   
     (a) Establishment 
       The Commissioner of Customs, after consultation with appropriate officials in the State of Texas, is authorized and directed to make grants to an institution (or a consortium of such institutions) 
to assist such institution in planning, establishing,  and operating a Center for the Study of Western 
Hemispheric Trade (hereafter in this section refe rred to as the ''Center''). The Commissioner of 
Customs shall make the first grant not later than  December 1, 1994, and the Center shall be 
established not later than February 1, 1995. 
     (b) Scope of Center        The Center shall be a year-round program operated by an institution located in the State of 
Texas (or a consortium of such institutions), the purpose of which is to promote and study trade 
between and among Western Hemisphere countries.  The Center shall conduct activities designed to 
examine –  
 (1) the impact of the NAFTA on the economies in, and trade within, the Western Hemisphere;          (2) the negotiation of any future fr ee trade agreements, including possible accessions to the 
NAFTA; and          (3) adjusting tariffs, reducing n ontariff barriers, improving relations among customs 
officials, and promoting economic relations  among countries in the Western Hemisphere. 
     (c) Consultation; selection criteria        The Commissioner of Customs shall consult with appropriate officials of the State of Texas and private sector authorities with respect to sel ecting, planning, and establishing the Center. In 
selecting the appropriate institution, the Commissione r of Customs shall give consideration to –  
 (1) the institution's ability to carry out the pr ograms and activities described in this section; 
and          (2) any resources the institution can provide the Center in addition to Federal funds 
provided under this program.      (d) Programs and activities 
       The Center shall conduct the following activities: G/C/W/508/Add.1 
Page 22  
 
         (1) Provide forums for international discussion and debate for representatives from countries in the Western Hemisphere regarding issu es which affect trade and other economic relations 
within the hemisphere, including the impact of the NAFTA on individual economies and the 
desirability and feasibility of possible accessions to the NAFTA by such countries.          (2) Conduct studies and research pr ojects on subjects which affect Western Hemisphere 
trade, including tariffs, customs, regional and na tional economics, business development and finance, 
production and personnel management, manufacturing,  agriculture, engineering, transportation, 
immigration, telecommunications, medicine, scien ce, urban studies, border demographics, social 
anthropology, and population.          (3) Publish materials, disseminate information, and conduct seminars and conferences to 
support and educate representatives from countries  in the Western Hemisphere who seek to do 
business with or invest in other Western Hemisphere countries.          (4) Provide grants, fellowships, e ndowed chairs, and financial assistance to outstanding 
scholars and authorities from Western Hemisphere countries.          (5) Provide grants, fellowships, a nd other financial assistan ce to qualified graduate 
students, from Western Hemisphere countries, to study at the Center. 
         (6) Implement academic exchange programs and other cooperative research and instructional agreements with the complementar y Dante B. Fascell North-South Center at the 
University of Miami at Coral Gables.      (e) Definitions        For purposes of this section - 
       (1) NAFTA 
         The term ''NAFTA'' means the North American Free Trade Agreement. 
       (2) Western Hemisphere countries          The terms ''Western Hemisphere countries'', ''countries in the Western Hemisphere'', and ''Western Hemisphere'' mean Canada, the United St ates, Mexico, countries located in South America, 
beneficiary countries (as defined by section 2702 of this title), the Commonwealth of Puerto Rico, and 
the United States Virgin Islands.      (f) Fees for seminars and publications        Notwithstanding any other provision of law, a grant made under this section may provide 
that the Center may charge a reasonable fee for attendance at seminars and conferences and for copies of publications, studies, reports, and other documen ts the Center publishes.  The Center may waive 
such fees in any case in which it determines imposing a fee would impose a financial hardship and the 
purposes of the Center would be served by granting such a waiver.      (g) Duration of grant        The Commissioner of Customs is directed  to make grants to any institution or institutions 
selected as the Center for fiscal years 1994, 1995, 1996, and 1997. 
     (h) Report 
       The Commissioner of Customs shall, no later than July 1, 1994, and annually thereafter for 
years for which grants are made, submit a written re port to the Committee on Finance of the Senate 
and the Committee on Ways and Means of the House of Representatives. The first report shall include –   (1) a statement identifying the institution or institutions selected as the Center; 
         (2) the reasons for selecting the institution or institutions as the Center; and 
         (3) the plan of such institution or institutions for operating the Center.      Each subsequent report shall include in formation with respect to the operations of the 
Center, the collaboration of the Center with, a nd dissemination of information to, Government 
policymakers and the business community with respect to the study of Western Hemispheric trade by 
the Center, and the plan and efforts of the Center to  continue operations after grants under this section 
have expired.    G/C/W/508/Add.1 
 Page 23 
 
 
ANNEX II.b 
 
MISCELLANEOUS TRADE AND TECH NICAL CORRECTIONS ACT OF 2004 
 
SEC. 1558. TREATMENT OF CERTAI N FOOTWEAR UNDER CARIBBEAN BASIN 
ECONOMIC RECOVERY ACT. 
Section 213(b) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(b)) is 
amended as follows: 
(1) By amending paragraph (1)(B) to read as follows: 
`(B) footwear provided for in any of  subheadings 6401.10.00, 6401.91.00, 
6401.92.90, 6401.99.30, 6401.99.60, 6401.99.90, 6402.30.50, 6402.30.70, 
6402.30.80, 6402.91.50, 6402.91.80, 6402.91.90, 6402.99.20, 6402.99.80, 6402.99.90, 6403.59.60, 6403.91.30, 6403.99.60, 6403.99.90, 6404.11.90, and 6404.19.20 of the HTS that was not designated at the time of the effective 
date of this title as eligible articles for the purpose of the generalized system 
of preferences under title V of the Trade Act of 1974;'. 
(2) In paragraph (3)(A)-- 
(A) in clause (i), by striking `Subject to clause (ii)' and inserting `Subject to 
clauses (ii) and (iii)'; and 
(B) by adding at the end the following: 
`(iii) CERTAIN FOOTWEAR- Notw ithstanding paragraph (1)(B) 
and clause (i) of this subparagraph, footwear provided for in any of subheadings 6403.59.60, 6403.91.30, 6403.99.60, and 6403.99.90 of the 
HTS shall be eligible for the dut y-free treatment provided for under 
this title if-- 
`(I) the article of footwear is the growth, product, or 
manufacture of a CBTPA beneficiary country; and 
`(II) the article otherwise meets the requirements of 
subsection (a), except that in applying such subsection, `CBTPA beneficiary country' shall be substituted for 
`beneficiary country' each place it appears.'. 
SEC. 2004. TECHNICAL AMENDMENTS. 
 
(b) APPAREL ARTICLES UNDER CARIBBEAN BASIN ECONOMIC RECOVERY 
ACT- (1) Section 213(b)(2)(A) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 
2703(b)(2)(A)) is amended-- G/C/W/508/Add.1 
Page 24  
 
(A) in clause (i), by striking `(including' and inserting `or both (including'; 
(B) in clause (v), by striking `, from fabr ics or yarn that is not formed in the United 
States or in one or more CBTPA beneficiary countries'; and 
(C) in clause (vii)(IV), by striking `(i) or (ii)' and inserting `(i), (ii), or (ix)'. 
 
(g) ENTRIES OF CERTAIN APPAREL ARTICLES PURSUANT TO THE CARIBBEAN 
BASIN ECONOMIC RECOVERY ACT- 
(1) IN GENERAL- Notwithstanding section 514 of the Tariff Act of 1930 (19 U.S.C. 
1514) or any other provision of law, the Customs Service shall liquidate or 
reliquidate as free of duty and free of any quantitative restrictions, limitations, or consultation levels entries of articles described in paragraph (4) made on or after October 1, 2000. 
(2) REQUESTS- Liquidation or reliquida tion may be made under paragraph (1) 
with respect to an entry described in paragraph (4) only if a request therefor is filed with the Customs Service within 90 days after the date of the enactment of this Act 
and the request contains sufficient inform ation to enable the Customs Service to 
locate the entry or reconstruct the entry if it cannot be located. 
(3) PAYMENT OF AMOUNTS OWED- Any amounts owed by the United States 
pursuant to the liquidation or reliquidation of any entry under paragraph (1) shall 
be paid not later than 180 days after the date of such liquidation or reliquidation. 
(4) ENTRIES- The entries referred to in  paragraph (1) are entries of apparel 
articles (other than socks provided for in heading 6115 of the Harmonized Tariff Schedule of the United States) that meet the requirements of s ection 213(b)(2)(A) of 
the Caribbean Basin Economic Recovery Act (as amended by section 3107(a) of the 
Trade Act of 2002 and subsection (b) of this section). 
 
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