I 

108TH CONGRESS 

1ST SESSION H. R. 2267

To extend certain trade benefits to countries of the greater Middle East. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 22, 2003

Mr. SMITH of Washington (for himself and Mr. DOOLEY of California) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL

To extend certain trade benefits to countries of the greater 

Middle East.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Middle East Trade 

5 and Engagement Act of 2003’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds that—

8 (1) it is in the mutual interest of the United 

9 States and the countries of the greater Middle East 
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1 to promote stable and sustainable growth and devel2 opment throughout the greater Middle East; 

3 (2) Congress views democratization and eco4 nomic progress in the countries of the greater Mid5 dle East as important elements of a policy to ad6 dress terrorism and endemic instability; 

7 (3) free trade relationships are not a substitute 

8 for, but a complement to, necessary political and 

9 economic reforms that lead to political liberalization 

10 and economic freedom; 

11 (4) the countries of the greater Middle East 

12 have enormous economic potential and are of endur13 ing political significance to the United States; 

14 (5) despite their economic potential, the coun15 tries of the greater Middle East are experiencing 

16 deepening poverty, slow job creation, and a declining 

17 share of world trade and investment, while at the 

18 same time experiencing population growth rates 

19 among the highest in the world; 

20 (6) these economic conditions are in part the 

21 result of barriers to trade and investment, a failure 

22 to engage fully in the global trading system, lack of 

23 participation in the World Trade Organization, and, 

24 often, a lack of economic diversification and over-re25 liance on the energy sector; 
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1 (7) offering the countries of the greater Middle 

2 East enhanced trade preferences will encourage 

3 higher levels of trade and direct investment and help 

4 bring those countries more fully into the global trad5 ing system; 

6 (8) higher levels of trade and investment and 

7 greater involvement in the global trading system can 

8 lead to increased economic development, which can 

9 in turn lead to more jobs for people in the countries 

10 of the greater Middle East; and 

11 (9) encouraging the reciprocal reduction of 

12 trade and investment barriers in the greater Middle 

13 East will enhance the benefits of trade and invest14 ment for all the countries in the greater Middle East 

15 as well as enhance commercial and political ties be16 tween the United States and the greater Middle 

17 East. 

18 SEC. 3. STATEMENT OF POLICY. 

19 Congress supports—

20 (1) encouraging increased trade and investment 

21 between the United States and the countries of the 

22 greater Middle East and among the countries of the 

23 greater Middle East; 

24 (2) reducing tariff and nontariff barriers and 

25 other obstacles to trade between the United States 
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1 and the countries of the greater Middle East and 

2 among the countries of the greater Middle East; 

3 (3) strengthening and expanding the private 

4 sector and accelerating the rate of job creation in 

5 the countries of the greater Middle East; 

6 (4) focusing on countries committed to the rule 

7 of law, economic reform, political liberalization, re8 spect for human rights, and the eradication of pov9 erty; 

10 (5) facilitating the development of civil societies 

11 and political freedom in the countries of the greater 

12 Middle East; 

13 (6) promoting sustainable development, and 

14 protecting and preserving the environment in a man15 ner consistent with economic development; and 

16 (7) encouraging the countries of the greater 

17 Middle East to diversify their economies, implement 

18 domestic economic reforms, open to trade, and adopt 

19 anticorruption measures, including through acces20 sion to the Organization for Economic Cooperation 

21 and Development (OECD) Convention on Combating 

22 Bribery of Foreign Public Officials in International 

23 Business Transactions. 
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1 SEC. 4. DESIGNATION OF ELIGIBLE COUNTRIES. 

2 (a) IN GENERAL.—The President is authorized to 

3 designate any country listed in subsection (c) as a bene4 ficiary country if the President determines that the coun5 try—

6 (1) has established, or is making continual 

7 progress toward establishing—

8 (A) a market-based economy that protects 

9 private property rights, incorporates an open 

10 rules-based trading system, and minimizes gov11 ernment interference in the economy through 

12 measures such as price controls, subsidies, and 

13 government ownership of economic assets; 

14 (B) the rule of law and the right to due 

15 process, a fair trial, and equal protection under 

16 the law; 

17 (C) political pluralism, a climate free of 

18 political intimidation and restrictions on peace19 ful political activity, and democratic elections 

20 that meet international standards of fairness, 

21 transparency, and participation; 

22 (D) the elimination of barriers to United 

23 States trade and investment, including by—

24 (i) providing national treatment and 

25 measures to create an environment condu26 cive to domestic and foreign investment; 
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1 (ii) protecting intellectual property; 

2 and 

3 (iii) resolving bilateral trade and in4 vestment disputes; 

5 (E) economic policies that reduce poverty, 

6 increase the availability of health care and edu7 cational opportunities, expand physical infra8 structure, promote the development of private 

9 enterprise, and encourage the formation of cap10 ital markets through micro-credit or other pro11 grams; 

12 (F) a system to combat corruption and 

13 bribery, such as signing and implementing the 

14 OECD Convention on Combating Bribery of 

15 Foreign Public Officials in International Busi16 ness Transactions; 

17 (G) protection of internationally recognized 

18 worker rights, including the right of association, 

19 the right to organize and bargain collectively, a 

20 prohibition on the use of any form of forced or 

21 compulsory labor, a minimum age for the em22 ployment of children, and acceptable conditions 

23 of work; and 

24 (H) policies that provide a high level of en25 vironmental protection; 
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1 (2) does not engage in activities that undermine 

2 United States national security or foreign policy in3 terests, and supports a peaceful resolution of the 

4 Israeli-Palestinian conflict; 

5 (3) is a signatory of the United Nations Dec6 laration of Human Rights, does not engage in gross 

7 violations of internationally recognized human 

8 rights, and is making continuing and verifiable 

9 progress on the protection of internationally recog10 nized human rights, including freedom of speech and 

11 press, freedom of peaceful assembly and association, 

12 and freedom of religion; 

13 (4) is not listed by the United States Depart14 ment of State as a state sponsor of terrorism and 

15 cooperates fully in international efforts to combat 

16 terrorism; 

17 (5) does not participate in the primary, sec18 ondary, or tertiary economic boycott of Israel; and 

19 (6) otherwise meets the eligibility criteria set 

20 forth in section 502(b)(2) of the Trade Act of 1974 

21 (19 U.S.C. 2462(b)(2)), other than section 

22 502(b)(2)(B). 

23 (b) CONTINUING COMPLIANCE.—If the President de24 termines that a designated beneficiary country no longer 

25 meets the requirements described in subsection (a), the 
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1 President shall terminate the designation of the country 

2 made pursuant to subsection (a) and inform Congress of 

3 the President’s determination and the reasons therefor. 

4 (c) COUNTRIES ELIGIBLE FOR DESIGNATION.—In 

5 designating countries as beneficiary countries under this 

6 Act, the President shall consider only the following coun7 tries of the greater Middle East or their successor political 

8 entities: 

9 (1) Afghanistan. 

10 (2) Algeria. 

11 (3) Azerbaijan. 

12 (4) Bahrain. 

13 (5) Bangladesh. 

14 (6) Egypt. 

15 (7) Iraq. 

16 (8) Kuwait. 

17 (9) Lebanon. 

18 (10) Morocco. 

19 (11) Oman. 

20 (12) Pakistan. 

21 (13) Qatar. 

22 (14) Saudi Arabia. 

23 (15) Tunisia. 

24 (16) Turkey. 

25 (17) United Arab Emirates. 
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1 (18) Yemen. 

2 (d) THE PALESTINIAN AUTHORITY.—The President 

3 is also authorized to designate the Palestinian Authority 

4 or its successor political entity as a beneficiary political 

5 entity which, if so designated, shall be accorded benefits 

6 under this Act as if it were a beneficiary country, if the 

7 President determines that the Palestinian Authority—

8 (1) satisfies the conditions of subsection (a) (1) 

9 and (2); 

10 (2) does not participate in acts of terrorism, 

11 and takes active measures to combat terrorism; 

12 (3) cooperates fully in international efforts to 

13 combat terrorism; 

14 (4) does not engage in gross violations of inter15 nationally recognized human rights, and is making 

16 continuing and verifiable progress on the protection 

17 of internationally recognized human rights, including 

18 freedom of speech and the press, freedom of peaceful 

19 assembly and association, and freedom of religion; 

20 and 

21 (5) accepts Israel’s right to exist in peace with22 in secure borders. 

23 SEC. 5. DESIGNATION OF ELIGIBLE ARTICLES. 

24 (a) ELIGIBLE ARTICLES.—Except as provided in sec25 tions 503(b)(2) and (3) of the Trade Act of 1974 (19 
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1 U.S.C. 2463(b)(2) and (3)), the President is authorized 

2 to designate articles as eligible for duty-free treatment 

3 from all beneficiary countries for purposes of this Act by 

4 Executive order or Presidential proclamation after receiv5 ing the advice of the International Trade Commission in 

6 accordance with subsection (c). 

7 (b) RULES OF ORIGIN.—

8 (1) GENERAL RULE.—The duty-free treatment 

9 provided under this Act shall apply to any eligible 

10 article which is the growth, product, or manufacture 

11 of 1 or more beneficiary countries if—

12 (A) that article is imported directly from a 

13 beneficiary country into the customs territory of 

14 the United States; and 

15 (B) the sum of—

16 (i) the cost or value of the materials 

17 produced in 1 or more beneficiary coun18 tries, plus

19 (ii) the direct cost of processing oper20 ations performed in such beneficiary coun21 try or countries, 

22 is not less than 35 percent of the appraised 

23 value of such article at the time it is entered. 

24 (2) ADDITIONAL COUNTRIES.—For purposes of 

25 the rules of origin in paragraph (1) and the regula-
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1 tions prescribed pursuant to paragraph (4), the term 

2 ‘‘beneficiary country’’ includes Israel and Jordan. 

3 (3) EXCLUSIONS.—An article shall not be treat4 ed as the growth, product, or manufacture of a ben5 eficiary country by virtue of having merely under6 gone—

7 (A) simple combining or packaging oper8 ations; or 

9 (B) mere dilution with water or mere dilu10 tion with another substance that does not mate11 rially alter the characteristics of the article. 

12 (4) REGULATIONS.—The Secretary of the 

13 Treasury, after consulting with the United States 

14 Trade Representative, shall prescribe such regula15 tions as may be necessary to carry out this sub16 section, including, but not limited to, regulations 

17 providing that, in order to be eligible for duty-free 

18 treatment under this Act, an article—

19 (A) must be wholly the growth, product, or 

20 manufacture of 1 or more beneficiary countries, 

21 including Israel and Jordan; or 

22 (B) must be a new or different article of 

23 commerce which has been grown, produced, or 

24 manufactured in 1 or more beneficiary coun25 tries, including Israel and Jordan. 
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1 (c) INTERNATIONAL TRADE COMMISSION ADVICE.—

2 Before designating an article as an eligible article under 

3 subsection (a), the President shall publish in the Federal 

4 Register and furnish the International Trade Commission 

5 with a list of articles that may be considered for designa6 tion as eligible articles for purposes of this Act. The Presi7 dent shall comply with the provisions of sections 131, 132, 

8 133, and 134 of the Trade Act of 1974 as if an action 

9 under this Act were an action taken under section 123 

10 of the Trade Act of 1974 to carry out a trade agreement 

11 entered into under section 123. 

12 SEC. 6. UNITED STATES-MIDDLE EAST TRADE AND ECO13 NOMIC COOPERATION FORUM. 

14 (a) DECLARATION OF POLICY.—The President shall 

15 convene annual high-level meetings among appropriate of16 ficials of the United States Government, officials of the 

17 governments of eligible beneficiary countries, and officials 

18 of the Governments of Israel and Jordan in order to foster 

19 close economic ties between the United States and the 

20 countries of the greater Middle East. 

21 (b) ESTABLISHMENT.—Not later than 12 months 

22 after the date of enactment of this Act, the President, 

23 after consulting with Congress and the governments con24 cerned, shall establish a United States-Middle East Trade 
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1 and Economic Cooperation Forum (in this section referred 

2 to as the ‘‘Forum’’). 

3 (c) REQUIREMENTS.—In creating the Forum, the 

4 President shall meet the following requirements: 

5 (1) The President shall direct the Secretary of 

6 Commerce, the Secretary of the Treasury, the Sec7 retary of State, and the United States Trade Rep8 resentative to host the first annual meeting with 

9 their counterparts from the governments of des10 ignated beneficiary countries, and those countries 

11 and political entities listed in section 4(c) and (d) 

12 that the President determines are taking substantial 

13 positive steps toward meeting the eligibility require14 ments in section 4. The purpose of the meeting shall 

15 be to discuss expanding trade and investment rela16 tions between the United States and the countries of 

17 the greater Middle East and the implementation of 

18 this Act including encouraging joint ventures be19 tween small and large businesses. The President 

20 shall also direct the Secretaries and the United 

21 States Trade Representative to invite to the meeting 

22 representatives from appropriate organizations and 

23 government officials from countries and political en24 tities in the greater Middle East. 
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1 (2)(A) The President, in consultation with Con2 gress, shall encourage United States nongovern3 mental organizations to host annual meetings with 

4 nongovernmental organizations from the countries 

5 and political entities of the greater Middle East in 

6 conjunction with the annual meetings of the Forum 

7 for the purpose of discussing the issues described in 

8 paragraph (1). 

9 (B) The President, in consultation with Con10 gress, shall encourage United States representatives 

11 of the private sector to host annual meetings with 

12 representatives of the private sector from the coun13 tries and political entities of the greater Middle East 

14 in conjunction with the annual meetings of the 

15 Forum for the purpose of discussing the issues de16 scribed in paragraph (1). 

17 (3) The President shall, to the extent prac18 ticable, meet with the heads of governments of des19 ignated beneficiary countries, and those countries 

20 and political entities listed in section 4(c) and (d) 

21 that the President determines are taking substantial 

22 positive steps toward meeting the eligibility require23 ments in section 4, not less than once every 2 years 

24 for the purpose of discussing the issues described in 

25 paragraph (1). The first such meeting should take 
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1 place not later than 12 months after the date of en2 actment of this Act. 

3 (d) DISSEMINATION OF INFORMATION BY USIS.—In 

4 order to assist in carrying out the purposes of the Forum, 

5 the United States Information Service shall disseminate 

6 regularly, through multiple media, economic information 

7 in support of the free market economic reforms described 

8 in this Act. 

9 SEC. 7. FREE TRADE AGREEMENTS WITH COUNTRIES OR 

10 POLITICAL ENTITIES IN THE GREATER MID11 DLE EAST. 

12 (a) DECLARATION OF POLICY.—Congress declares 

13 that bilateral free trade agreements should be negotiated, 

14 where feasible, with interested countries or political enti15 ties in the greater Middle East, in order to serve as the 

16 catalyst for increasing trade between the United States 

17 and the greater Middle East and increasing private sector 

18 investment in the greater Middle East. 

19 (b) ELIGIBILITY.—Any country or political entity 

20 that desires to negotiate a bilateral free trade agreement

21 with the United States shall be a member of the World 

22 Trade Organization or be working diligently toward mem23 bership and shall satisfy the criteria in section 4(a) of this 

24 Act. 

25 (c) PLAN REQUIREMENT.—
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1 (1) IN GENERAL.—The President, taking into 

2 account the willingness of the governments of the 

3 beneficiary countries to engage in negotiations to 

4 enter into free trade agreements, shall develop a 

5 plan for the purpose of negotiating and entering into 

6 1 or more trade agreements with interested bene7 ficiary countries. 

8 (2) ELEMENTS OF PLAN.—The plan shall in9 clude the following: 

10 (A) The specific objectives of the United 

11 States with respect to negotiations described in 

12 paragraph (1) and a suggested timetable for 

13 achieving those objectives. 

14 (B) The benefits to both the United States 

15 and the relevant beneficiary countries with re16 spect to the applicable free trade agreement or 

17 agreements. 

18 (C) A mutually agreed-upon timetable for 

19 the negotiations. 

20 (D) Subject matter anticipated to be cov21 ered by the negotiations and United States 

22 laws, programs, and policies, as well as the laws 

23 of participating eligible countries of the greater 

24 Middle East and existing bilateral and multilat25 eral and economic cooperation and trade agree-
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1 ments, that may be affected by the agreement 

2 or agreements. 

3 (E) Procedures to ensure the following: 

4 (i) Adequate consultation with Con5 gress and the private sector during the ne6 gotiations. 

7 (ii) Consultation with Congress re8 garding all matters relating to implementa9 tion of the agreement or agreements. 

10 (iii) Approval by Congress of the 

11 agreement or agreements. 

12 (iv) Adequate consultations with the 

13 relevant governments of the greater Middle 

14 East during the negotiation of the agree15 ment or agreements. 

16 (d) REPORTING REQUIREMENT.—Not later than 12 

17 months after the date of enactment of this Act, the Presi18 dent shall prepare and transmit to Congress a report con19 taining the plan developed pursuant to subsection (c). 

20 SEC. 8. REPORTING REQUIREMENT. 

21 (a) IN GENERAL.—The President shall monitor, re22 view, and prepare a report annually on the progress of 

23 each country and political entity listed in section 4(c) and 

24 (d) in meeting the requirements described in section 4(a) 

25 in order to determine the current or potential eligibility 
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1 of each country or political entity to be designated as a 

2 beneficiary country under this Act. The report shall also 

3 include a comprehensive discussion of the implementation 

4 of this Act and an analysis of the trade and investment 

5 policy of the United States with respect to the countries 

6 and political entities listed in section 4(c) and (d). To the 

7 extent that any subject matter required by the report is 

8 included in another report submitted by the President, the 

9 report required by this section may reference the other re10 port. 

11 (b) TIME FOR SUBMITTING REPORT.—The President 

12 shall submit the report described in subsection (a) to Con13 gress not later than 1 year after the date of enactment 

14 of this Act, and annually thereafter through 2011. 

15 SEC. 9. PRESERVATION OF BENEFITS OF UNITED STATES16 ISRAEL AND UNITED STATES-JORDAN FREE 

17 TRADE AGREEMENTS. 

18 Nothing in this Act shall be deemed to nullify or im19 pair any right or benefit accorded either to Israel or to 

20 Jordan under the existing trade agreements with the 

21 United States. 
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1 SEC. 10. TERMINATION OF PREFERENTIAL TREATMENT. 

2 No duty-free treatment or other preferential treat3 ment extended to beneficiary countries under this Act 

4 shall remain in effect after December 31, 2011.

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