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[Senate Report 108-117]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 223
108th Congress                                                   Report
                                 SENATE
 1st Session                                                    108-117

======================================================================

 
    UNITED STATES-SINGAPORE FREE TRADE AGREEMENT IMPLEMENTATION ACT

                                _______
                                

    July 29 (legislative day, July 21), 2003.--Ordered to be printed

                                _______
                                

   Mr. Grassley, from the Committee on Finance, and on behalf of Mr. 
    Hatch, from the Committee on the Judiciary; filed the following

                              JOINT REPORT

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1417]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Finance, and the Committee on the 
Judiciary, to which was jointly referred the bill (S. 1417) to 
implement the United States-Singapore Free Trade Agreement, 
having considered the same, reports thereon and recommends that 
the bill do pass.

                                CONTENTS

                                                                   Page
 I. Reports and Other Materials of the Committees.....................2
    Part I. Report of the Committee on Finance........................2
        A. Summary of Congressional Consideration of the United 
            States-Chile Free Trade Agreement....................     2
        B. General Background....................................     4
        C. Overview of the United States-Singapore Free Trade 
            Agreement............................................     7
        D. General Description of the Bill.......................    24
            Title I--Approval of, and General Provisions Relating 
                to, the Agreement................................    24
            Title II--Customs Provisions.........................    25
            Title III--Relief From Imports.......................    27
            Title IV--Temporary Entry of Business Persons........    33
        E. Congressional Action..................................    33
        F. Vote of the Committee in Reporting the Bill...........    35
        G. Regulatory Impact and Other Matters...................    35
    Part II. Report of the Committee on the Judiciary................35
        A. Background............................................    35
        B. Implementing Legislation on Temporary Professional 
            Workers..............................................    36
        C. Judiciary Committee Action............................    37
II. Budgetary Impact of the Bill.....................................39
III.Additional Views.................................................42

IV. Changes in Existing Law..........................................54

             I. REPORTS AND OTHER MATTERS OF THE COMMITTEES

               Part I. Report of the Committee on Finance

    The Committee on Finance, to which was referred the bill 
(S. 1416) to approve and implement the United States-Singapore 
Free Trade Agreement, having considered the same, reports 
favorably thereon and recommends that the bill do pass.

    A. SUMMARY OF CONGRESSIONAL CONSIDERATION OF THE UNITED STATES-
                     SINGAPORE FREE TRADE AGREEMENT

1. Background

    On November 16, 2000, President William J. Clinton and 
Prime Minister Goh Chok Tong of Singapore agreed that in 
December 2000, the two countries would begin negotiations on a 
United States-Singapore Free Trade Agreement with the goal of 
completing negotiations before the end of 2000. On August 6, 
2002, President George W. Bush signed the Trade Act of 2002, 
which provides expedited procedures for consideration of 
legislation implementing trade agreements that meet objectives 
under the Act. On October 1, 2002, President Bush notified 
Congress of ongoing negotiations between the United States and 
Singapore on a Free Trade Agreement. On January 29, 2003, 
President Bush notified Congress of his intention to enter into 
the United States-Singapore Free Trade Agreement. President 
Bush and Prime Minister Goh signed the Agreement on May 6, 
2003.

2. Trade Promotion Authority Procedures In General

    The requirements for Congressional consideration of the 
United States-Singapore Free Trade Agreement (the Agreement) 
under expedited procedures (known as Trade Promotion Authority 
(TPA) Procedures) are set forth in sections 2103 through 2106 
of the Bipartisan Trade Promotion Authority Act (the Act) and 
section 151 of the Trade Act of 1974.
    Section 2103 of the Act authorizes the President, prior to 
June 1, 2005 (or prior to June 1, 2007, if trade authority 
procedures are extended under section 2103(c) of the Act), to 
enter into reciprocal trade agreements with foreign countries 
to reduce or eliminate tariff or nontariff barriers and other 
trade-distorting measures. The purpose of section 2103 
procedures is to provide the means to achieve U.S. negotiating 
objectives set forth under section 2102 of the Act in 
international trade negotiations.

3. Notification Prior to Negotiations

    Under section 2104(a)(1) of the Act, the President must 
provide written notice to the Congress at least 90 calendar 
days before initiating negotiations. Section 2104(a)(2) 
requires the President, before and after submission of the 
notice, to consult regarding the negotiations with the relevant 
Committees of Congress and the Congressional Oversight Group 
established under section 2107 of the Act. Section 2106 of the 
Act exempts Singapore from the pre-negotiation notification and 
consultation requirements of section 2104(a) only. Section 
2106(b)(2), however, requires the President, as soon as 
feasible after the enactment of the Act, to notify Congress of, 
and consult with Congress about, the negotiations. The Act was 
enacted on August 6, 2002 as part of the Trade Act of 2002 
(Pub. L. 107-210). On October 1, 2002, President George W. Bush 
notified the Congress of the United States' ongoing 
negotiations with Singapore on a free trade agreement.

4. Notification of Intent To Enter Into an Agreement

    Under section 2105(a)(1)(A) of the Act, the President is 
required, at least 90 days before entering into an agreement, 
to notify Congress of his intent to enter into the agreement. 
On January 29, 2003, President George W. Bush notified Congress 
of his intention to enter into the United States-Singapore Free 
Trade Agreement.
    Section 2105(a)(1)(B) of the Act also requires the 
President, within 60 days of signing an agreement, to submit to 
Congress a preliminary list of existing laws that the President 
considers would be required to bring the United States into 
compliance with such agreement. On May 6, 2003, the President 
signed the Agreement. On July 3, 2003, the President 
transmitted to Congress a description of changes in existing 
law required to comply with the Agreement.

5. Development of the Implementing Legislation

    Under TPA Procedures, the Congress and the Administration 
work together to produce the legislation to implement a free 
trade agreement. The drafting occurs in informal meetings of 
the Committees with jurisdiction over the laws that must be 
amended to implement the agreement. At times, this process may 
also include one or more House-Senate conference meetings. The 
objective is to produce one bill to be transmitted by the House 
and Senate Leadership to the President as the recommended 
legislation to implement the trade agreement. The drafting is 
done in close consultation with the Administration in an effort 
to ensure that the legislation faithfully implements the 
agreement and that the Administration's subsequent formal 
submission is consistent with the legislation recommended by 
the Congress.
    In meetings in June and July 2003, the Senate Committee on 
Finance and the House Committee on Ways and Means considered 
and made recommendations for the implementing bill. Other 
Committees of the Senate and House also considered provisions 
of the implementing legislation within their respective 
jurisdictions.

6. Formal Submission of the Agreement and Legislation

    When the President formally submits a trade Agreement to 
the Congress under section 2105 of the Act, the President must 
include in the submission the final legal text of the 
agreement, together with implementing legislation, a statement 
of administrative action (describing regulatory and other 
changes that are necessary or appropriate to implement the 
agreement), a statement setting forth the reasons of the 
President regarding how and to what extent the agreement makes 
progress in achieving the applicable policies, purposes, 
priorities, and objectives set forth in the Act, and a 
statement setting forth the reasons of the President regarding 
how the agreement serves the interests of U.S. commerce.
    The implementing legislation is introduced in both Houses 
of Congress on the day it is submitted by the President and is 
referred to Committees with jurisdiction over its provisions. 
President George W. Bush transmitted the final text of the 
United States-Singapore Free Trade Agreement, along with 
implementing legislation, a Statement of Administrative Action, 
and other supporting information, as required under section 
2105 of the Trade Act of 2002, to the Congress on July 15, 
2003. The legislation was introduced that same day in both the 
House and the Senate.
    To qualify for TPA Procedures, the implementing bill itself 
must contain provisions formally approving the agreement and 
the statement of administrative action. Further, the 
implementing bill must contain only those provisions necessary 
or appropriate to implement the Agreement. The implementing 
bill reported here--which approves the United States-Singapore 
Free Trade Agreement and the Statement of Administrative Action 
and contains provisions necessary or appropriate to implement 
the Agreement into U.S. law-was referred to the Senate 
Committee on Finance and the Senate Committee on the Judiciary.

7. Committee and Floor Consideration

    When the requirements of the Act are satisfied, 
implementing revenue bills, such as the United States-Singapore 
Free Trade Agreement Implementation Act (Implementation Act), 
are subject to the legislative procedures of section 151 of the 
Trade Act of 1974. The following schedule for Congressional 
consideration applies under these procedures:
          (i) House Committees have up to 45 days in which to 
        report the bill; any Committee which does not do so in 
        that period will be automatically discharged from 
        further consideration.
          (ii) A vote on final passage by the House must occur 
        on or before the 15th day after the Committees report 
        or are discharged.
          (iii) Senate Committees must act within 15 days of 
        receiving the implementing revenue bill from the House 
        or within 45 days of Senate introduction of the 
        implementing bill, whichever is longer, or they will be 
        discharged automatically.
          (iv) The full Senate then must vote within 15 days.
    Thus, the Congress has a maximum of 90 days to complete 
action on the bill, although the time period can be shortened.
    Once the implementing bill has been formally submitted by 
the President and introduced, no amendments to the bill are in 
order in either House of Congress. Floor debate in each House 
is limited to no more than 20 hours.

                         B. GENERAL BACKGROUND

1. United States-Singapore Trade

    Singapore is the 12th largest trading partner of the United 
States in terms of total trade. With a gross domestic product 
(GDP) of about $88 billion, and per capita income of about 
$20,900, Singapore has one of the highest per capita GDPs in 
the world. It is a major trading country whose exports and 
imports each generally exceed its GDP.
    Some 1,600 U.S. companies and close to 20,000 American 
citizens are located in Singapore. Many U.S. multinational 
corporations use Singapore as a regional headquarters and base 
to export around the world. The United States is Singapore's 
largest foreign direct investor, while Singapore is the second 
largest Asian investor in the United States after Japan. As of 
2001, Singapore accounted for $26.7 billion in American direct 
investment, or a little over 12 percent of total U.S. direct 
investment in Asia and the Pacific.
    Singapore is the largest trading partner of the United 
States in Southeast Asia with two-way trade of $30.3 billion 
and a U.S. bilateral merchandise trade surplus in 2002 of $0.6 
billion (down from $0.9 billion in 2001), a reversal from the 
deficit of $3.1 billion in 2000. The United States generally 
runs a surplus in services trade with Singapore. Singapore is 
the 11th largest export market for the United States with $14.7 
billion in merchandise exports in 2002. It is the 16th largest 
source for goods imported into the United States with $14.1 
billion in 2002. The United States is Singapore's second 
largest trading partner (after Malaysia, while Japan is third). 
In bilateral trade by sectors, the United States runs surpluses 
with Singapore in aircraft; electrical machinery; plastic; 
mineral fuel; instruments; miscellaneous chemical products; 
aluminum; dyes, paints, and putty; and iron and steel products. 
The United States incurs deficits with Singapore in machinery; 
organic chemicals; a special other category under Chapter 98 of 
the HTS; knit apparel; special import reporting provisions 
under Chapter 99 of the HTS; fish and seafood; woven apparel; 
and books and newspapers.

2. Tariffs and Trade Agreements

    Virtually all of Singapore's imports enter Singapore duty-
free. Only beer and certain alcoholic beverages are subject to 
import tariffs. Singapore does, however, impose high excise 
taxes on distilled spirits and wines, tobacco products, and 
motor vehicles. The Government of Singapore also bans chewing 
gum. These practices are addressed in the Agreement.
    Singapore has implemented free trade agreements with New 
Zealand (effective January 1, 2001) and with the European Free 
Trade Area (effective January 1, 2003). The European Free Trade 
Area encompasses Iceland, Norway, Switzerland, and 
Liechtenstein. In January 2002, Singapore concluded a free 
trade agreement with Japan that excludes agricultural products. 
Singapore has also completed free trade negotiations with 
Australia (agreement signed on February 17, 2003), and is in 
negotiations with Mexico (since July 2000) and Canada (since 
October 2001). On November 14, 2002, Singapore established a 
study group to explore a free trade agreement with South Korea. 
As a member of the Association of South East Asian Nations 
(ASEAN), Singapore also is a participant in The Framework 
Agreement on Comprehensive Economic Co-operation between ASEAN 
and the Peoples Republic of China (signed November 4, 2002), 
under which tariffs are to be reduced or eliminated by 2010.

                                      U.S. EXPORTS TO SINGAPORE, 1997-2002
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                 HTS category                      1997       1998       1999       2000       2001       2002
----------------------------------------------------------------------------------------------------------------
84--Machinery.................................    4,936.9    4,298.2    4,569.0    5,373.2    4,631.2    4,159.0
85--Electrical machinery......................    5,842.2    5,198.8    5,276.7    5,946.5    4,415.3    3,819.1
88--Aircraft, spacecraft......................    1,630.6    1,833.6    1,547.1      840.4    3,544.3    2,828.2
90--Optical, medical equipment................    1,014.6      895.4    1,016.3    1,364.8    1,020.2    1,124.7
27--Mineral fuels, oil, etc...................      193.9      109.7      282.1      311.4      475.3      615.3
39--Plastics..................................      549.8      480.4      535.6      656.8      546.3      602.0
98--Special other.............................      489.7      502.7      511.1      554.4      550.7      499.3
29--Organic chemicals.........................      488.1      339.9      385.1      402.8      405.5      368.2
38--Misc. chemical products...................      326.7      252.8      293.5      358.2      285.4      316.2
76--Aluminum..................................      168.4      154.1      142.4       71.8       28.6      118.0
32--Tanning, dyes, paints.....................       90.5       76.3      106.4       89.1       77.8      107.4
73--Iron/steel products.......................      107.4      118.8      110.9      114.2      104.2      107.3
87--Vehicles, not railway.....................      176.9      138.2      107.3       93.0      124.1      100.8
37--Photographic/cinematic....................       87.9       75.6       94.7      105.2       87.3       97.2
28--Inorganic chemicals/rare earths...........       57.6       46.8       58.9       70.8       73.4       92.1
Other.........................................    1,566.1    1,152.3    1,209.3    1,463.8    1,322.0    1,266.6
                                               -----------------------------------------------------------------
      Total exports...........................   17,727.4   15,673.5   16,246.4   17,816.4   17,691.6  16,221.2
----------------------------------------------------------------------------------------------------------------
 Note.--HTS = harmonized tariff schedule number.

 Source: U.S. International Trade Commission Dataweb.

                                     U.S. IMPORTS FROM SINGAPORE, 1997-2002
                                            [In millions of dollars]
----------------------------------------------------------------------------------------------------------------
                 HTS category                      1997       1998       1999       2000       2001       2002
----------------------------------------------------------------------------------------------------------------
84--Machinery.................................   13,545.9   12,453.0   11,516.0   10,366.1    8,198.0    7,977.9
85--Electrical machinery/equipment............    3,504.0    2,995.7    3,209.0    4,762.1    2,955.5    2,389.6
98--Special other.............................      652.0      680.2      953.3    1,161.1    1,016.1      921.3
29--Organic chemicals.........................      688.1      333.6      582.9      634.9      821.2      806.6
90--Optical, medical instruments..............      435.9      574.3      627.2      713.5      728.9      755.8
61--Knit apparel..............................      232.2      249.6      256.3      264.9      233.6      233.8
27--Mineral fuels, oil, etc...................      116.3      106.7      139.6      318.6      188.4      157.9
30--Pharmaceutical products...................        3.6        6.7        6.6        5.9        4.9      152.0
49--Books, newspapers, manuscripts............      124.3      122.9      120.4      120.4      125.0      121.9
99--Other special import provisions...........       82.8       94.1      109.6      116.0       93.9       87.8
39--Plastics..................................       36.0       34.4       37.1       49.4       40.1       73.0
88--Aircraft, spacecraft......................       63.7       68.8       56.4       58.7       72.9       61.6
62--Woven apparel.............................       55.0       56.6       69.3       89.7       64.8       52.2
3--Fish and seafood...........................       83.4       63.2       52.8       61.2       54.0       51.1
87--Vehicles, not railway.....................       46.4       47.4       74.1       52.2       33.3       33.6
Other.........................................      312.3      328.5      309.0      332.9      268.7      239.7
                                               -----------------------------------------------------------------
      Total imports...........................   19,981.8   18,215.7   18,119.6   19,107.6   14,899.4   14,115.8
----------------------------------------------------------------------------------------------------------------
 Note.--HTS = harmonized tariff schedule number.

 Source: U.S. International Trade Commission Dataweb.

3. International Trade Commission Study

    In June 2003, the United States International Trade 
Commission (ITC) released the results of its investigation 
(Investigation No. TA-2104-6) into the probable economic 
effects of a United States-Singapore Free Trade Agreement. The 
ITC concluded that the economy-wide effects on U.S. trade, 
production, and economic welfare, of the Agreement's tariff 
reductions alone are likely to be small. The report explained 
that this is not an unexpected finding given: the existing open 
trade relationship; small trade and bilateral investment flows 
relative to U.S. trade and investment worldwide; and the small 
size of Singapore's economy relative to that of the United 
States. The ITC finding, however, serves as an estimate of 
confirmation, focusing largely on the implications of tariff 
reduction, which may be quantified, unlike changes in many non-
tariff barriers.
    At the sectoral level, the report concluded that some 
sectors of the U.S. economy likely would experience increased 
import competition from Singapore, while other sectors likely 
would experience increased export opportunities with respect to 
Singapore. However, any such increase would be from a very 
small base, given Singapore's small economy and small market 
size, and thus have a minimal impact on production, prices, or 
employment in the corresponding U.S. sector. By the year 2016, 
the ITC estimated the effects to be greater for U.S. exports of 
vegetables, fruits, and nuts; meats; and other processed foods. 
For U.S. imports, the likely effects would be greater for 
electronic equipment and other machinery and equipment.

    C. OVERVIEW OF THE UNITED STATES-SINGAPORE FREE TRADE AGREEMENT

1. The Agreement

    The Agreement comprises an integrated set of reciprocal 
obligations that will eliminate barriers to trade between 
Singapore and the United States in a manner that is consistent 
with Article XXIV of the General Agreement on Tariffs and Trade 
1994 (GATT 1994) and Article V of the General Agreement on 
Trade in Services (GATS). It would enter into force after an 
exchange of notes on or after January 1, 2004.

2. Chapters

    Establishment of the Free Trade Area and Definitions. 
Parties agree to the establishment of a free trade area and 
affirm that they will interpret and apply the Agreement in 
light of the objectives of the Agreement. Parties further agree 
that existing bilateral rights and obligations will continue to 
apply and that nothing in the Agreement is to be read as 
altering any legal obligation under other international 
agreements. Certain terms within the Agreement are defined, 
including the territory of each Party to which the free trade 
agreement will apply. For the United States, this includes the 
customs territory of the United States, foreign trade zones 
within the United States and Puerto Rico, and the undersea 
international economic zone; insular possessions of the United 
States and any area of outer space are not covered. For 
Singapore, this includes all territory, land, sea or air, under 
its sovereign control.
    National Treatment and Market Access for Goods. The 
Agreement sets forth the principal rules governing trade in 
goods, requiring each Party to treat products from the other 
Party in a non-discriminatory manner. It provides for the 
phase-out of tariffs on ``originating goods'' (as defined by 
the rules of origin) that are traded between the two Parties, 
and requires the elimination of a wide variety of non-tariff 
trade barriers that restrict or distort trade flows.
    Upon the Agreement's entry into force, Singapore is to 
apply zero tariffs immediately on all U.S. products. U.S. 
tariffs on 92 percent of Singaporean goods are also to be 
eliminated immediately, with remaining tariffs phased out over 
periods of up to 10 years. In addition, U.S. merchandise 
processing fees on imports of originating goods from Singapore 
will be eliminated. The Agreement also provides that the 
Parties may agree to speed up tariff phase-outs on a product-
by-product basis after the Agreement takes effect.
    Certain products, including professional equipment, goods 
for display or demonstration, and commercial samples, will be 
granted duty-free temporary admission without the usual bonding 
requirement applied to imports. Import and export restrictions, 
fees, and formalities, such as export and import price 
requirements, import licensing conditioned on performance 
requirements, and voluntary export restraints inconsistent with 
the GATT 1994, will be prohibited.
    Singapore will harmonize its excise taxes on imports of 
distilled spirits by 2005, allow imports of chewing gum with 
therapeutic value, and eliminate its ban on imports of 
satellite dishes. During the first 9 years that the Agreement 
is in force, the United States will provide tariff preference 
levels for specific and limited amounts of certain non-
originating apparel from Singapore. These tariff preference 
levels (TPLs) will apply to a limited quantity of cotton and 
man-made fiber goods cut and sewn in Singapore using fabric or 
yarn imported from third countries. In the first year after the 
TPL provisions take effect, TPL status will apply to 25 million 
square meters of apparel. This quantity will be reduced each 
year thereafter. The TPL program will terminate 9 years after 
it first takes effect. The United States will phase out duties 
on TPL imports in five equal annual increments once the TPL 
program takes effect, with the U.S. duty rate reduced to zero 
beginning on the first day of the fifth year.
    Rules of Origin. Chapter 3 of the Agreement sets out duty 
benefits that will apply to goods considered to be 
``originating goods'' under the rules of origin set out in the 
Agreement and in Annexes 3A, 3B and 3C. Chapter 3 of the 
Agreement includes four alternative sets of criteria under 
which a product will generally qualify as an originating good. 
They are: (1) when a good is wholly obtained or produced in the 
territory of one or both of the Parties; (2) when a good is 
manufactured or assembled from non-originating materials that 
undergo a specified change in tariff classification in one or 
both Parties; (3) when a good falls under the ``integrated 
sourcing initiative'' category of goods listed in Annex 3B; or 
(4) the good meets any applicable ``regional value content'' 
requirement, or the good meets the de minimis rule and all 
other applicable criteria of Chapter 3.
    The Agreement also clarifies that simple combining or 
packaging operations, or mere dilution with water or another 
substance that does not change the characteristics of the good, 
will not confer origin.
    Under the de minimis rule, a good can receive originating 
status if the value of non-originating materials does not 
exceed 10 percent of the adjusted value of the good, and the 
good otherwise meets the criteria of the Agreement. Chapter 3 
of the Agreement also outlines the regional value content test 
whereby a good can qualify for originating status if a 
specified percentage of the value of the good is attributable 
to originating materials. The Agreement provides two methods 
for calculating that percentage: the ``build-down method'' 
based on the value of non-originating materials used, and the 
``build-up method'' based on the value of originating materials 
used. Under the Agreement, accessories, spare parts, and tools 
delivered with a good will be considered part of the material 
making up the good so long as these items are not separately 
classified or invoiced and their quantities and values are 
customary. The de minimis rule does not apply in calculating 
regional value content.
    The Agreement requires that the denial of preferential 
treatment by a Party must be issued in writing and accompanied 
by legal and factual findings. Each Party may require that an 
importer retain, for up to 5 years, records necessary for 
demonstrating that a good is originating. Further, a Party will 
not penalize an importer where the importer promptly and 
voluntarily corrects a claim and pays any duties owed within 1 
year of submission of the claim. Chapter 3 of the Agreement 
also contains provisions for the verification of the 
originating status of goods.
    The Agreement also contains textile and apparel rules of 
origin. A textile or apparel product will generally qualify as 
an originating good only if all processing (e.g., yarn-
spinning, fabric production, cutting, and assembly) takes place 
in the territory of one or both of the Parties, or if there is 
an applicable change in tariff classification as specified in 
Annex 3A of the Agreement. A special 7 percent de minimis rule 
applies to certain textile and apparel products. This special 
de minimis rule does not apply to elastomeric yarns.
    Parties to the Agreement shall work together to ensure the 
effective and uniform application of the rules found in Chapter 
3 of the Agreement. Modifications of Annexes 3A, 3B, and 3C 
may, upon consultation, be considered. Either Party may convene 
consultations in which the Parties will consider whether to 
modify the textile and apparel rules of origin.
    Customs Administration. The Agreement commits each Party to 
observe certain transparency and rulemaking obligations for 
customs administration. Each Party must promptly publish its 
customs measures on the Internet or in print form and, where 
possible, solicit public comments before amending customs 
regulations. Parties will also provide written advance rulings, 
on request, to its importers and to exporters of the other 
Party regarding whether a product qualifies as an originating 
good under the Agreement, as well as on other customs matters. 
Each Party will guarantee importers access to both 
administrative and judicial reviews of customs decisions.
    The Agreement calls for the Parties to cooperate in 
securing compliance with each other's customs measures related 
to the Agreement and to import and export restrictions. Parties 
will also release goods from customs promptly and apply 
expedited procedures for clearing express shipments through 
customs under security considerations. Specific provisions 
calling for the Parties to share customs information where a 
Party has a reasonable suspicion of unlawful activity in 
connection with goods traded between the two countries are also 
provided. Provisions for the clearance and handling of express 
shipments are also included.
    Textile and Apparel. The Agreement commits the Parties to 
adopt or maintain certain administrative, judicial, and 
enforcement measures, relating to trade in textile and apparel 
goods, which include: anti-circumvention, monitoring, 
cooperation and information sharing, enforcement, 
confidentiality, consultations, and safeguard actions.
    Parties are to prevent circumvention by undertaking 
measures to enforce domestic laws related to circumvention of 
textile and apparel import rules and to cooperate in the 
enforcement of the other Party's laws related to circumvention. 
Singapore will establish and maintain a number of monitoring 
programs designed to enhance the enforcement of its laws 
relating to trade in textile and apparel goods. Among others, 
these include measures to: (1) monitor imports, exports, and 
production of textile and apparel goods in free trade zones; 
(2) institute a system of registration, inspection, record 
keeping and reporting covering all enterprises that produce 
textile or apparel goods claimed to be originating goods under 
the Agreement or marked as ``products of Singapore,'' and all 
enterprises that export such goods to the United States; and 
(3) establish and maintain a program to ensure that goods en 
route to the United States bear accurate country of origin 
markings and that the documents accompanying the goods 
accurately describe the goods.
    Parties will share documents and information relevant to 
circumvention of their rules governing textile and apparel 
imports. They will investigate claims of circumvention and, 
where appropriate, perform on-site verifications and take 
enforcement action. If the United States discovers that an 
enterprise in Singapore is engaged in intentional 
circumvention, it may temporarily bar imports from the 
enterprise. Further, either Party may convene bilateral 
consultations on circumvention issues.
    Textile and apparel provisions and pertinent provisions of 
national treatment and market access for goods, as well as 
rules of origin, will take effect after the Parties consult and 
exchange written notices that legislation needed to implement 
the provisions is in place.
    Chapter 5 of the Agreement establishes a specific bilateral 
safeguard mechanism for textiles and apparel goods. A Party may 
take a safeguard action with respect to a textile or apparel 
good benefiting from preferential tariff treatment under the 
Agreement if that good is being imported in such increased 
quantities and under such conditions that imports of the good 
from the other Party constitute a substantial cause of serious 
damage, or actual threat thereof, to a domestic industry. The 
safeguard actions authorized in the Agreement consist of: a 
suspension of the further reduction of any rate of duty 
provided for under the Agreement on the good; or, an increase 
in the rate of duty on the good, to a level not to exceed the 
lesser of the normal trade relations/most-favored-nation (NTR/
MFN) applied rate of duty in effect at the time the action is 
taken or the NTR/MFN applied rate of duty in effect on the date 
of entry into force of the Agreement.
    A safeguard action, including any extension of such action, 
may not be maintained under Chapter 5 of the Agreement for more 
than 4 years, and no safeguard action may be taken or 
maintained beyond the period ending 10 years after the entry 
into force of the terms of the Agreement relating to textile 
and apparel goods under Article 5.10 of the Agreement. In 
addition, no safeguard action may be taken by an importing 
Party against a particular textile or apparel good of the other 
Party more than once, and upon termination of a safeguard 
action, the rate of duty on the good shall be the rate that 
would have been in effect but for the safeguard action.
    The Party taking a safeguard action must provide mutually 
agreed-upon trade liberalizing compensation in the form of 
concessions having substantially equivalent trade effects, or 
equivalent value, compared to the additional duties resulting 
from the emergency action. Such concessions shall be limited to 
textile and apparel goods, unless the Parties agree otherwise. 
If the Parties are unable to reach an agreement on 
compensation, the exporting Party may take action with respect 
to textile and apparel goods of the other Party that has trade 
effects substantially equivalent to the trade effects of the 
safeguard action taken under Chapter 5 of the Agreement. 
However, the right to take such action shall not be exercised 
for the first 24 months that the textile or apparel safeguard 
action is in effect, provided that the safeguard action was 
taken in response to an absolute increase in imports and such 
action conforms to the provisions of Chapter 5 of the 
Agreement.
    Nothing in Chapter 5 of the Agreement shall be construed to 
limit a Party's rights and obligations under Chapter 7 
(Safeguards) of the Agreement, except that a bilateral 
safeguard measure under Chapter 7 of the Agreement may not be 
taken with respect to textile or apparel goods that have been 
subject to a safeguard action under Chapter 5 of the Agreement. 
Nothing in Chapter 7 of the Agreement shall be construed to 
affect a Party's rights and obligations under Chapter 5 of the 
Agreement. In addition, nothing in Chapter 5 of the Agreement 
shall be construed to limit the ability of a Party to restrain 
imports of textile and apparel goods in a manner consistent 
with the WTO Agreement on Textiles and Clothing or the WTO 
Agreement on Safeguards.
    Technical Barriers to Trade. The Agreement enhances 
existing WTO obligations by encouraging the Parties to exchange 
information on technical barriers to trade (TBT) issues, hold 
consultations to resolve issues, and use international 
standards as a basis for technical regulations, standards, and 
conformity assessment procedures. It encourages the Parties to 
enhance their cooperation in the context of other agreements, 
including taking steps toward the implementation of the first 
two phases of the Asia Pacific Economic Cooperation (APEC) 
Mutual Recognition Arrangement for Conformity Assessment of 
Telecommunications Equipment. Each Party is to designate a TBT 
coordinator to work with domestic firms and groups and the 
other Party's TBT coordinator on enhancing bilateral 
cooperation. A working group on medical products and their 
regulation is established under annex 6A.
    Safeguards. The Agreement establishes a bilateral safeguard 
mechanism that allows a Party to impose a temporary safeguard 
on an originating good of the other Party if, as a result of 
the reduction or elimination of a customs duty pursuant to the 
Agreement, that good is being imported in such increased 
quantities and under such conditions as to constitute a 
substantial cause of serious injury, or threat of serious 
injury, to a domestic industry.
    If serious injury to a domestic industry, or threat 
thereof, is found under procedural and investigative 
requirements pursuant to domestic law and in accordance with 
the WTO Agreement on Safeguards, the importing Party may 
suspend any further staged reductions in customs duties on the 
good, or may increase the customs duty rate to a level not 
greater than a specified normal trade relation/most-favored-
nation (NTR/MFN) rate. A bilateral safeguard measure can be 
imposed for up to 4 years, including any extension of the 
original measure; for safeguards applied for more than 1 year, 
the Party must progressively liberalize the safeguard measure 
at regular intervals. Upon termination of the safeguard 
measure, the rate of customs duty on the originating good 
reverts to the rate that would have been in effect but for the 
measure.
    The Agreement also permits the imposition of provisional 
safeguard measures in critical circumstances where delay would 
cause damage that would be difficult to repair, subject to a 
preliminary determination that there is clear evidence that 
imports of an originating good from the other Party have 
increased as a result of the reduction or elimination of a 
customs duty pursuant to the Agreement, and that such imports 
constitute a substantial cause of serious injury, or threat of 
serious injury, to a domestic industry. A provisional measure 
may be imposed under such circumstances for up to 200 days, 
during which time the Party must complete the safeguard 
investigation.
    The Party imposing a safeguard measure must provide 
mutually agreed-upon trade liberalizing compensation in the 
form of concessions having substantially equivalent trade 
effects, or equivalent value, compared to the additional 
customs duties resulting from the safeguard measure. If the 
Parties are unable to reach an agreement on compensation, the 
exporting Party may take substantially equivalent action with 
respect to the originating goods of the other Party. Under 
Chapter 7, a bilateral safeguard measure cannot be applied more 
than once to an originating good, nor may a bilateral safeguard 
be applied or maintained to an originating good that has been 
subject to any other safeguard measure since the entry into 
force of the Agreement. Chapter 7 permits the imposition of a 
bilateral safeguard measure only during the 10 year transition 
period identified in the Agreement, unless the Party against 
whose originating good the measure is applied consents to the 
measure.
    Each Party retains its rights and obligations in accordance 
with the WTO Agreement on Safeguards, and the Agreement does 
not confer any additional rights or obligations on the Parties 
with respect to actions taken in accordance with the WTO 
Agreement on Safeguards, except that a Party imposing a global 
safeguard measure may exclude imports of an originating good 
from the other Party if such imports are not a substantial 
cause of serious injury or threat of serious injury.
    Cross-Border Trade in Services. Under the Agreement, cross-
border trade in services covering the supply of a service 
either: (1) from the territory of one Party into the territory 
of another; (2) in the territory of a Party by a person of that 
Party to a person of the other Party; or (3) by a national of a 
Party in the territory of another Party, shall be accorded 
national treatment and normal trade relation/most-favored-
nation (NTR/MFN) treatment. The Agreement also includes a rule 
prohibiting Parties from requiring firms to establish a local 
presence before they can supply a service.
    In addition, the Agreement seeks to remove market access 
barriers by barring certain types of restrictions on the supply 
of services (e.g., rules limiting the number of firms that may 
offer a particular service or restricting or requiring specific 
types of legal structures or joint ventures with local 
companies in order to supply a service). The Agreement's market 
access rules apply both to services supplied on a cross-border 
basis and through a local investment.
    The Agreement contains Annexes listing exemptions from 
certain service provisions of the Agreement. Further, all 
existing state and local laws and regulations are exempted from 
the service obligations. Once a Party liberalizes a measure 
that it has exempted, it must thereafter maintain the measure 
at least at that level of openness.
    The Agreement includes provisions on transparency and 
domestic regulation that apply to the development and 
application of regulations governing services and rules on 
domestic regulation that govern the operation of approval and 
licensing systems for service suppliers. The Agreement also 
excludes any service supplied in the exercise of governmental 
authority (a service that is provided on a non-commercial and 
non-competitive basis). The Agreement does not generally apply 
to government subsidies, although Singapore has undertaken a 
commitment relating to cross-subsidization of certain express 
delivery services.
    Telecommunications. The Agreement provides for non-
discriminatory access to public telecommunications networks for 
the service suppliers of each nation. Telecommunication network 
users are guaranteed reasonable and non-discriminatory access 
and transparent and effective enforcement by telecommunications 
regulators.
    In addition, the Agreement requires each Party to regulate 
its dominant telecommunications suppliers in ways that will 
ensure a level playing field for new entrants from the other 
Party. Phone companies are to obtain the right to interconnect 
with networks in a timely fashion and on terms, conditions, and 
cost-oriented rates that are transparent and reasonable. Firms 
seeking to build a physical network are to be granted non-
discriminatory access to buildings that contain telephone 
switches and submarine cable heads. Firms are to be able to 
lease elements of telecommunication networks on non-
discriminatory terms and to re-sell telecommunication services 
to build their customer bases.
    The Agreement opens rulemaking procedures within 
telecommunication regulatory authorities and requires 
publication of inter-connection agreements and service rates. 
The Agreement also requires Parties to make deregulation 
commitments tied to the emergence of competition in a 
telecommunication services area. The Agreement specifies that 
companies will compete on the basis of technology and 
innovation, not on government-mandated standards.
    In a letter from Singapore's Trade Minister signed along 
with the Agreement, Singapore has committed to establish a plan 
to divest its majority interest in Singapore's two leading 
telecommunications firms.
    Financial Services. Chapter 10 of the Agreement applies to 
measures adopted or maintained by a Party relating to: 
financial institutions of the other Party; investors of the 
other Party, and investments of such investors, in financial 
institutions within the Party's territory; and, cross-border 
trade in financial services. Chapter 10 of the Agreement does 
not apply to measures adopted or maintained by a Party relating 
to: activities or services forming part of a public retirement 
plan or statutory system of social security; or, activities or 
services conducted for the account or with the guarantee or 
using the financial resources of the Party, including its 
public entities. The foregoing exceptions to the application of 
Chapter 10 of the Agreement do not apply if a Party allows any 
of the foregoing activities or services to be conducted by its 
financial institutions in competition with a public entity or a 
financial institution.
    Under the Agreement, each Party will accord national 
treatment and normal trade relation/most-favored-nation (NTR/
MFN) treatment to investors of the other Party and will provide 
market access for financial institutions without limitations 
on, inter alia, the number of financial institutions, the total 
value of financial service transactions or assets, the total 
number of financial service operations or the total quantity of 
financial services output, or the number of natural persons 
that may be employed in a particular financial service sector. 
A Party shall not adopt or maintain measures that restrict or 
require specific types of legal entity or joint venture through 
which a financial institution may supply a service.
    Under the terms of the Agreement, a Party may not require 
financial institutions of the other Party to hire individuals 
of a particular nationality as senior managerial or other 
essential personnel, nor may a Party require more than a simple 
majority of the board of directors to be nationals or residents 
of the Party. Provisions are made for nonconforming measures 
maintained by a Party, and Chapter 10 of the Agreement 
enumerates certain exceptions to the application of: Chapter 
10; Chapter 9 (Telecommunications); Chapter 14 (Electronic 
Commerce); Chapter 15 (Investment); and Articles 8.2.2 and 8.10 
of Chapter 8 (Cross-Border Trade in Services).
    The Parties recognize the importance of transparency and 
agree that transparent regulations and policies shall be 
published in advance of general application. Parties shall also 
maintain or establish mechanisms to respond to inquiries from 
interested persons. The Agreement establishes a Financial 
Services Committee under Article 10.16 to promote objective and 
transparent regulatory processes in each Party. A Party may 
request consultations with the other Party regarding any matter 
arising under the Agreement. As modified by Article 10.18 of 
the Agreement (Dispute Settlement), Article 20.4 applies to the 
settlement of disputes between the Parties arising under 
Chapter 10 of the Agreement.
    If an investor of a Party submits a claim under Section C 
of Chapter 15 of the Agreement (Investor-State Dispute 
Settlement) against the other Party and the respondent invokes 
Article 10.10 (Exceptions), on the request of the respondent, 
the tribunal shall refer the matter to the Financial Services 
Committee for a decision. The tribunal may not proceed pending 
receipt of a decision or report under Chapter 10 of the 
Agreement.
    Annex 10A specifies the application of Chapter 10 of the 
Agreement to insurance and insurance-related services, and 
banking and other financial services (excluding insurance), in 
the United States and Singapore. Annex 10B of the Agreement 
contains Introductory Notes for the Schedules of the United 
States and Singapore to Annex 10B, while Annex 10C of the 
Agreement lists specific commitments of the United States and 
Singapore relating to financial services. Annex 10D of the 
Agreement details additional information with respect to the 
Financial Services Committee established pursuant to article 
10.16 of the Agreement.
    Temporary Entry. Chapter 11 of the Agreement sets forth 
general principles and obligations with respect to providing 
for the temporary entry of business persons. These provisions 
are more fully addressed in Part II., Report of the Committee 
on the Judiciary.
    Competition Policy. The Agreement requires each Party to 
adopt or maintain laws prohibiting anti-competitive business 
conduct and an agency to enforce them. In particular, Singapore 
has committed to enact general antitrust legislation by January 
2005. Each Party will take appropriate enforcement action to 
address anti-competitive business conduct. The Agreement also 
affirms that each Party's antitrust enforcement policy is not 
to discriminate on the basis of nationality.
    Basic procedural rights for firms facing antitrust 
enforcement actions are provided, requiring each Party to 
provide such firms with the right to be heard and to present 
evidence before imposing a sanction or remedy, and ensuring 
that any sanctions or remedies are subject to review by a court 
or independent tribunal.
    Parties must ensure that private or government-owned 
entities that are granted the sole right to provide or purchase 
a good or service conduct themselves in a manner consistent 
with commercial considerations; that they do not discriminate 
against the other Party's goods or service suppliers, and that 
they do not use their monopoly position to engage in anti-
competitive practices in markets outside their monopoly 
mandate. The Agreement further requires that Singapore ensure 
that its government enterprises act in accordance with 
commercial considerations, provide non-discriminatory treatment 
to U.S. goods and services suppliers, and refrain from entering 
into anti-competitive agreements among competitors or engaging 
in exclusionary practices that reduce competition to the 
detriment of consumers.
    Singapore shall also publish an annual report detailing its 
ownership and control of larger government enterprises, and 
will provide the same information for enterprises of any size 
upon U.S. request. Singapore will not exercise influence over 
its government enterprises except in a manner consistent with 
the Agreement, and will continue to reduce its aggregate 
ownership and other interests in these enterprises. The United 
States will ensure that its government enterprises accord non-
discriminatory treatment in their sales of goods and services 
to Singaporean companies.
    Parties to the Agreement are to cooperate on competition 
law and policy developments and further transparency by 
providing for the exchange of publicly available information on 
antitrust enforcement and on designated monopolies and 
government enterprises. The Parties may also request 
consultations to discuss specific issues. Where pertinent in 
such consultations, Singapore will provide information 
regarding the steps it plans to take or has taken to address 
anti-competitive conduct by a government enterprise.
    Provisions requiring the Parties to adopt and enforce 
antitrust laws are not subject to the Agreement's dispute 
settlement procedures. However, rules addressing conduct by 
designated monopolies and government enterprises can be 
enforced through the Agreement's dispute settlement mechanism.
    Government Procurement. The Agreement establishes 
obligations regarding government purchases that extend beyond 
those that the Parties have undertaken under the WTO Agreement 
on Government Procurement (GPA). These include such areas as 
thresholds, scope and coverage, and procedures for withdrawing 
entities from coverage when a government's control or influence 
over them has been eliminated. The Agreement also commits 
Parties to cooperate in the ongoing review of the GPA, on 
procurement matters in APEC, and in WTO negotiations regarding 
transparency in government procurement.
    The provisions on government procurement within the 
Agreement cover purchases abovecertain dollar thresholds by 
government departments and entities that each Party has listed in its 
relevant Schedules to the GPA. The Agreement applies to central or 
Federal Government procurement of goods and services valued at $56,190 
or more and construction services valued at $6,481,000 or more. The 
Agreement's provisions also apply to certain purchases by U.S. State 
governments listed in the GPA Schedule of the United States, namely, 
the procurement of goods and services valued at $460,000 or more and 
construction services of $6,481,000 or more. For government enterprises 
subject to the Parties' commitments under the GPA, the Chapter's 
thresholds are set at either $250,000 or $518,000 for goods and 
services, and $6,481,000 for construction services.
    The Agreement incorporates the GPA's basic rule of national 
treatment and bars discrimination against locally established 
suppliers on the basis of foreign affiliation or ownership. The 
Agreement also includes GPA rules designed to ensure 
transparency in procurement procedures. Each Party must publish 
laws, regulations and other measures governing procurement, 
along with any changes to those measures. Further, procuring 
entities must publish notices of procurement opportunities in 
advance.
    The Agreement incorporates GPA rules for setting deadlines 
on tendering and requires procuring entities to give suppliers 
information needed to prepare tenders, including the criteria 
that procuring entities will use to evaluate tenders. The 
Agreement also requires that procuring entities publish 
information on awards, including the names of suppliers, a 
description of the goods or services procured, and the value of 
the contract.
    Electronic Commerce. The Agreement includes provisions on 
electronic commerce which establish explicit guarantees that 
the principle of non-discrimination applies to products 
delivered electronically. It further establishes a binding 
prohibition on customs duties charged on digital products 
delivered electronically, such as legitimate downloads of 
music, videos, software or text.
    The Agreement makes binding a number of commitments that 
are now only voluntary or temporary commitments under the WTO. 
It affirms that any commitments made related to services in the 
Agreement also extend to the electronic delivery of such 
services, such as financial services delivered over the 
Internet. Parties have agreed to the non-discriminatory 
treatment of digital products and the permanent duty-free 
status of products delivered electronically.
    Investment. The Agreement provides national treatment 
protections for investors. Among the rights afforded to 
investors (consistent with those found in U.S. law) are due 
process protections and the right to receive fair market value 
for property in the event of an expropriation. The Agreement 
prohibits and removes certain performance-related requirements 
or restrictions on investors, such as limitations on the number 
of locations or the requirement that an investor export a given 
level of goods and services as a condition for the investment.
    The Agreement ties investor protections to standards 
developed under customary international law. It further 
obligates Parties to provide investors with treatment in 
accordance with ``customary international law'' rather than in 
accordance with ``international law'' (as was done in NAFTA).
    The Agreement includes an investor-State mechanism under 
which investors aggrieved by government actions that are in 
breach of obligations under the Agreement have the right to 
take the dispute directly to an international arbitration 
tribunal for resolution. Submissions to dispute panels and 
panel hearings are to be open to the public, and interested 
parties are to have the opportunity to submit their views.
    Intellectual Property Rights. The Agreement provides for 
the protection of copyrights, patents, trademarks and trade 
secrets. It enhances enforcement of intellectual property 
rights and requires that non-discrimination obligations apply 
to all types of intellectual property. The Agreement will 
require Singapore to ratify or accede to several agreements on 
intellectual property rights, including the International 
Convention for the Protection of New Varieties of Plants, the 
Trademark Law Treaty, the Brussels Convention Relating to the 
Distribution of Programme-Carrying Satellite Signals, and the 
Patent Cooperation Treaty. The Agreement also includes full 
national treatment commitments, with no exceptions for digital 
products. It also requires each Party to publish its laws, 
regulations, procedures, and decisions concerning the 
protection or enforcement of intellectual property rights.
    The Agreement imposes rules with respect to the 
registration of collective, certification, and sound marks, as 
well as geographical indications and scent marks. It also 
imposes rules for domain name management that require a dispute 
resolution procedure to prevent trademark cyber-piracy. The 
Agreement streamlines the trademark filing process by allowing 
applicants to use their own national patent/trademark offices 
for filing trademark applications.
    The Agreement further ensures that only authors, composers, 
and other copyright owners, have the right to make their works 
available online. Copyright owners maintain rights to temporary 
copies of their works on computers. Copyrighted works and 
phonograms are protected for extended terms, consistent with 
U.S. standards and international trends. The Agreement also 
contains anti-circumvention provisions aimed at preventing the 
tampering with technologies (such as embedded codes on discs) 
that are designed to prevent piracy and unauthorized 
distribution over the Internet. The Agreement also ensures that 
governments use only legitimate computer software.
    Under the Agreement, protection for encrypted program-
carrying satellite signals extends to the signals themselves as 
well as the programming. Parties have agreed to criminalize 
unauthorized reception and re-distribution of satellite 
signals. The Agreement also contains limited liability for 
internet service providers.
    The Agreement provides for a patent term to be extended to 
compensate for up-front administrative or regulatory delays in 
granting the original patent. The grounds for revoking a patent 
are limited to the same grounds required to originally refuse a 
patent. The Agreement also provides protection for patents 
covering biotech plants and animals. In addition, the Agreement 
provides for protection against imports of pharmaceutical 
products without a patent-holder's consent by allowing lawsuits 
when contracts are breached.
    Under the Agreement, test data and trade secrets submitted 
to a government for the purpose of product approval are to be 
protected against disclosure for a period of 5 years for 
pharmaceuticals and 10 years for agricultural chemicals. The 
Agreement also closes potential loopholes to these provisions 
and is designed to ensure that government marketing-approval 
agencies will not grant approval to patent-violating products.
    Under the Agreement, there are criminal penalties for 
companies that make pirated copies from legitimate products. 
Intellectual property right laws are to be enforced against 
traded goods, including transshipments, to deter violators from 
using U.S. or Singaporean ports or free-trade zones to traffic 
in pirated products. The Agreement mandates both statutory and 
actual damages for intellectual property rights violations and 
provides that monetary damages be awarded even if actual 
economic harm (retail value, profits made by violators) cannot 
be determined. The Agreement also restricts the use of 
compulsory licenses to copy patented drugs and sets up new 
barriers to the import of patented drugs sold at lower prices 
in third countries.
    Labor. The Parties reaffirm their obligations as members of 
the International Labor Organization (ILO) and under the 1998 
ILO Declaration on Fundamental Principles and Rights at Work 
and its Follow-up (ILO Declaration). The Agreement provides 
that each Party must strive to ensure that its domestic labor 
laws recognize and protect the fundamental labor principles 
spelled out in the ILO Declaration and listed in Chapter 17 of 
the Agreement. Each Party also commits not to weaken 
protections under domestic labor laws in order to encourage 
bilateral trade or investment. The Agreement defines labor laws 
to mean those statutes or regulations directly related to: the 
right of association; the right to organize and bargain 
collectively; a prohibition of forced or compulsory labor; a 
minimum age for the employment of children and elimination of 
the worst forms of child labor; and, acceptable conditions of 
work with respect to minimum wages, hours of work, and 
occupational safety and health.
    The Agreement recognizes the right of each Party to 
establish its own domestic labor standards, and to adopt or 
modify its labor laws. The Agreement provides that each Party 
shall not fail to effectively enforce its labor laws, through a 
sustained or recurring course of action or inaction, in a 
manner affecting trade between the Parties. The Agreement 
recognizes that each Party retains the right to exercise 
discretion with respect to investigatory, prosecutorial, 
regulatory, and compliance matters and to make decisions 
regarding the allocation of resources to enforcement with 
respect to other labor matters determined to have higher 
priorities. Each Party is obliged to provide fair, equitable, 
and transparent proceedings for the enforcement of labor laws, 
and each Party guarantees that Parties to such proceedings may 
seek remedies to ensure the enforcement of their rights under 
domestic labor laws.
    The Agreement authorizes the Joint Committee established 
under Chapter 20 of the Agreement to create a Subcommittee on 
Labor Affairs to provide a forum for consultation on the 
Agreement and its implementation. Meetings of the Subcommittee 
shall include a public session, unless the Parties otherwise 
agree. The Agreement also establishes a United States-Singapore 
Labor Cooperation Mechanism to: promote respect for ILO labor 
principles and other common commitments; establish priorities 
for cooperative activities on labor matters; develop specific 
cooperative activities; exchange information; and, develop 
recommendations for consideration by the Joint Committee.
    A Party can request consultations with the other Party 
regarding any matter arising under Chapter 17 of the Agreement. 
If the Parties fail to resolve the matter through 
consultations, either Party may then request that the 
Subcommittee on Labor Affairs be convened to address the 
matter. Dispute settlement procedures are available only when a 
Party asserts under Article 17.2.1(a) that the other Party has 
failed to effectively enforce its labor laws, through a 
sustained or recurring course of action or inaction, in a 
manner affecting trade between the Parties. In that instance, 
the complaining Party may request dispute settlement 
proceedings under Chapter 20 of the Agreement, after an initial 
60-day consultation period, by referring the matter to the 
Joint Committee.
    If a panel determines that a Party has not conformed with 
its obligations under Article 17.2.1(a) and the Parties are 
unable to reach agreement on a resolution, the complaining 
Party may request that the panel reconvene to impose an annual 
monetary assessment on the other Party not to exceed $15 
million, adjusted for inflation pursuant to Annex 20A of the 
Agreement. Any assessments will be paid into a fund established 
by the Joint Committee and utilized for labor initiatives. 
Suspension of tariff benefits of an equivalent dollar value may 
result from a Party's failure to pay the monetary assessment.
    Environment. Chapter 18 of the Agreement recognizes the 
right of each Party to establish its own levels of domestic 
environmental protection and environmental development policies 
and priorities, and to adopt or modify its environmental laws. 
Each Party is obliged to provide fair, open, and equitable 
proceedings for the enforcement of its environmental laws, as 
well as appropriate and effective remedies for violation of its 
environmental laws.
    Under the Agreement, a Party shall not fail to effectively 
enforce its environmental laws, through a sustained or 
recurring course of action or inaction, in a manner affecting 
trade between the Parties. The Agreement recognizes that each 
Party retains the right to exercise discretion with respect to 
investigatory, prosecutorial, regulatory, and compliance 
matters and to make decisions regarding the allocation of 
resources to enforcement with respect to other environmental 
matters determined to have higher priorities.
    The Parties commit to ensure that domestic laws provide for 
high levels of environmental protection, and to strive to 
continue to improve those laws. Each Party also recognizes that 
it is inappropriate to encourage trade or investment by 
weakening or reducing the protections afforded in domestic 
environmental laws. Thus, each Party under the Agreement shall 
strive to ensure that it does not waive or otherwise derogate 
from, or offer to waive or derogate from, such laws in a manner 
that weakens or reduces protections afforded in those laws as 
an encouragement for trade with the other Party.
    Chapter 18 of the Agreement defines environmental laws as 
any statutes or regulations of a Party, or provisions thereof, 
the primary purpose of which is the protection of the 
environment or the prevention of a danger to human, animal, or 
plant life or health, through: the prevention, abatement, or 
control of the release or emission of pollutants or 
environmental contaminants; the control of environmentally 
hazardous or toxic chemicals, substances, materials, and 
wastes; or, the protection or conservation of wild flora and 
fauna, including endangered species, their habitat, and 
specially protected natural areas. The Agreement excludes from 
the definition of environmental laws any statute or regulation, 
or provision thereof, directly related to worker safety or 
health.
    Chapter 18 calls for the establishment of a Subcommittee of 
the Joint Committee established under Chapter 20 of the 
Agreement to provide a forum for consultation on the Agreement 
and its implementation. Meetings of the Subcommittee shall 
normally include a session where members of the Subcommittee 
have an opportunity to meet with the public to discuss matters 
related to Chapter 18 of the Agreement. Separately, each Party 
commits to ensure the opportunity for public participation in 
the discussion of matters related to Chapter 18 of the 
Agreement. The Parties also commit to pursue cooperative 
environmental activities, and to strengthen environmental 
performance, under a Memorandum of Intent on Cooperation in 
Environmental Matters to be entered into between the Government 
of Singapore and the United States, and in other fora.
    A Party can request consultations with the other Party 
regarding any matter arising under Chapter 18 of the Agreement. 
If the Parties fail to resolve the matter through 
consultations, either Party may then request that the 
Subcommittee of the Joint Committee be convened to address the 
matter. Dispute settlement procedures are available only when a 
Party asserts under Article 18.2.1(a) that the other Party has 
failed to effectively enforce its environmental laws, through a 
sustained or recurring course of action or inaction, in a 
manner affecting trade between the Parties. In that instance, 
the complaining Party may request dispute settlement 
proceedings under Chapter 20 of the Agreement, after an initial 
60-day consultation period, by referring the matter to the 
Joint Committee.
    If a panel determines that a Party has not conformed with 
its obligations under Article 18.2.1(a) and the Parties are 
unable to reach agreement on a resolution, the complaining 
Party may request that the panel reconvene to impose an annual 
monetary assessment on the other Party not to exceed $15 
million, adjusted for inflation pursuant to Annex 20A of the 
Agreement. Any assessments will be paid into a fund established 
by the Joint Committee and utilized for environmental 
initiatives. Suspension of tariff benefits of an equivalent 
dollar value may result from a Party's failure to pay the 
monetary assessment.
    The Parties recognize the importance of multilateral 
environmental agreements (MEAs) and agree to consult on the 
extent to which the outcome of ongoing WTO negotiations, 
regarding the relationship between WTO rules and trade 
obligations specified in MEAs, applies to the Agreement. The 
Parties also agree to encourage businesses to voluntarily 
incorporate sound principles of corporate stewardship into 
their internal policies.
    Transparency. The Agreement provides for the promulgation 
of measures that ensure transparency and fairness in the 
adoption and application of administrative action covered by 
the Agreement. Parties agree, to the fullest extent possible: 
to the advanced publishing of laws, regulations, procedures, 
and administrative rulings that they propose to adopt; that on 
the request of the other Party, a Party shall promptly respond 
and provide information pertaining to any actual or proposed 
measure; that administrative proceedings are to be conducted in 
a consistently impartial and reasonable manner; and, that each 
Party shall maintain judicial and/or administrative tribunals 
or procedures for the purpose of the prompt review and possible 
correction of final administrative actions regarding matters 
covered by the Agreement.
    Administrative and Dispute Settlement. Chapter 20 of the 
Agreement establishes a dispute settlement mechanism that is 
generally applicable to disputes between the Parties regarding 
claims that a measure of a Party is inconsistent with the 
Agreement or that a Party has otherwise failed to carry out its 
obligations under the Agreement, or claims that a measure of 
one Party causes nullification or impairment of benefits to the 
other Party arising under: Chapter 2 (National Treatment and 
Market Access for Goods); Chapter 3 (Rules of Origin); Chapter 
8 (Cross Border Trade in Services); or Chapter 16 (Intellectual 
Property Rights). For disputes arising under Chapter 17 (Labor) 
or Chapter 18 (Environment), dispute settlement procedures 
under Chapter 20 of the Agreement may be invoked only with 
respect to a Party's obligation to not fail to effectively 
enforce its labor or environmental laws, as the case may be, 
through a sustained or recurring course of action or inaction, 
in a manner affecting trade between the Parties.
    A Party must first make a written request for consultations 
and deliver the request to other Party. If the Parties fail to 
resolve the matter within 60 days of delivery of the request, 
either Party may refer the matter to the Joint Committee 
established under Chapter 20 of the Agreement. If the Joint 
Committee fails to resolve the dispute within 60 days, the 
complaining Party may refer the matter to a dispute settlement 
panel. By the date of entry into force of the Agreement, the 
Parties are obliged to establish a contingent list of five 
individuals who can each serve as a panelist or chair of a 
panel. Procedures for panel selection are set forth in the 
Agreement. The Agreement commits the Parties to establish rules 
of procedure for panels; these rules shall include the right to 
at least one public hearing before the panel, subject to the 
protection of confidential information.
    A panel is to present its initial report within 150 days 
after the chair is appointed. The initial report shall contain 
findings of fact and a determination as to whether: the measure 
at issue is inconsistent with the obligations of the Agreement; 
a Party has otherwise failed to carryout its obligations under 
the Agreement; or, the measure at issue causes a nullification or 
impairment of benefits to the other Party as specified in the 
Agreement. The initial report shall also contain any other 
determination requested by both Parties with regard to the dispute. 
After Party comment, the panel is to issue a final report to the 
Parties within 45 days of the initial report, unless the Parties agree 
otherwise. Public release of the final report is to occur within 15 
days thereafter, subject to the protection of confidential information. 
Upon receiving the final report, the Parties are to agree on a 
resolution of the dispute and, in instances of non-conformance with 
obligations under the Agreement or nullification or impairment of 
benefits as defined under the Agreement, such resolution, wherever 
possible, should be the elimination of the nonconformity or the 
nullification or impairment.
    If the panel has found non-conformance with obligations 
under the Agreement or nullification or impairment of benefits 
as defined under the Agreement, and the Parties cannot resolve 
their dispute generally within 45 days of receiving the panel's 
final report, the Parties must enter into compensation 
negotiations. If the Parties cannot agree on compensation 
within 30 days, or the Parties agree on compensation or some 
other resolution of the dispute and the complaining Party 
believes that the other Party has failed to observe the terms 
of such resolution, the complaining Party may propose a 
suspension of trade benefits of equivalent effect. In general, 
the complaining Party may begin suspending trade benefits 30 
days after providing notice of its intent to do so. If the 
other Party believes that either the proposed suspension of 
benefits is manifestly excessive, or that it has eliminated the 
nonconformity or nullification or impairment identified by the 
panel and therefore suspension of benefits is not warranted, 
the Party may request that the panel be reconvened in order to 
consider the matter. In that instance, the complaining Party 
may not begin suspending benefits until 30 days after receiving 
the determination of the reconvened panel; if the panel 
determines that the proposed level of benefits to be suspended 
is manifestly excessive, it shall determine the level of 
benefits it considers to be of equivalent effect.
    The complaining Party may not suspend benefits if the 
reconvened panel determines that the other Party has eliminated 
the nonconformity or nullification or impairment. Similarly, 
the complaining Party may not suspend benefits if the other 
Party chooses to pay an annual monetary assessment; if the 
Parties cannot agree on an amount of monetary assessment, the 
amount will be set at a level equal to 50 percent of the level 
determined by the reconvened panel or, if the panel has not 
reconvened, 50 percent of the amount proposed by the 
complaining Party. Unless the Joint Committee decides 
otherwise, a monetary assessment is to be paid to the 
complaining Party. Where circumstances warrant, the Joint 
Committee may decide that a monetary assessment shall be paid 
into a fund established by the Joint Committee and expended at 
the direction of the Joint Committee for appropriate 
initiatives to facilitate trade between the Parties. Suspension 
of the full amount of benefits previously identified pursuant 
to the Agreement may result from a Party's failure to pay a 
monetary assessment.
    Where a dispute involves Article 17.2.1(a) (Application and 
Enforcement of Labor Laws) or Article 18.2.1(a) (Application 
and Enforcement of Environmental Laws), however, and the 
Parties either: are unable to reach agreement on a resolution 
within 45 days of receiving the panel's final report; or, the 
Parties agree on a resolution of the dispute and the 
complaining Party considers that the other Party has failed to 
observe the terms of such resolution, the complaining Party may 
at any time thereafter request that the panel be reconvened to 
impose an annual monetary assessment on the other Party. The 
panel is to take certain enumerated factors into account in 
setting the level of monetary assessment; the amount of the 
assessment shall not exceed $15 million annually, adjusted for 
inflation pursuant to Annex 20A of the Agreement. The amount is 
to be paid into a fund established by the Joint Committee and 
is to be expended at the direction of the Joint Committee for 
appropriate labor or environmental initiatives, as the case may 
be, in the territory of the Party complained against. If the 
assessment is not paid, the complaining Party may take other 
appropriate steps to collect the assessment, including 
suspending tariff benefits under the Agreement.
    The Agreement also establishes a compliance review 
procedure available in all disputes, under which the Party 
complained against may request that the panel determine whether 
a previously identified nonconformity or nullification or 
impairment has been eliminated. The panel must report within 90 
days and, if it decides that the Party is in compliance, the 
complaining Party must promptly reinstate any benefits that it 
has suspended and the other Party will no longer be required to 
pay any monetary assessment.
    Not later than 5 years after the Agreement enters into 
force, the Joint Committee is required to review the operation 
and effectiveness of the provisions in Chapter 20 of the 
Agreement that address non-implementation of the final report 
(i.e. the provisions allowing for suspension of benefits or 
imposition of monetary assessments). In the event five 
proceedings initiated under Chapter 20 of the Agreement result 
in either the suspension of benefits or the imposition of 
monetary assessments, the Joint Committee shall complete its 
review within 6 months of the fifth such occurrence, if sooner 
than 5 years after the Agreement enters into force.
    General and Final Provisions. Chapter 21 of the Agreement 
sets out general provisions that apply to large portions of the 
Agreement. It incorporates general provisions on issues such as 
balance of payments, general exceptions, essential security, 
taxation, disclosure of information, and corruption, including 
mechanisms for accession to the Agreement and entry into force 
of the Agreement, and a provision on the legal significance of 
Annexes.
    Chapter 21 of the Agreement further provides that the 
Agreement will not affect either Party's rights or obligations 
under any tax convention and sets out circumstances under which 
tax measures are subject to the Agreement's national treatment 
obligation for goods, the national treatment and normal trade 
relation/most-favored-nation (NTR/MFN) obligations for 
services, prohibitions on performance requirements, and 
expropriation rules.
    The Agreement also provides that a Party may withhold 
information from the other Party where disclosure will impede 
law enforcement, would be contrary to the public interest, or 
would prejudice the legitimate commercial interests of a public 
or private enterprise.
    Parties further affirm their commitment to the adoption, 
cooperation on, maintenance, and enforcement of, effective 
anti-corruption measures, including deterrent penalties against 
bribery and corruption in international business transactions.
    Included in Chapter 21 of the Agreement are terms of 
accession which allow other countries to accede to the 
Agreement, subject to terms and conditions agreed upon between 
such countries and the Parties, in accordance with applicable 
legal procedures of each Party and the full consent of each 
Party.
    Chapter 21 of the Agreement also provides that the Annexes 
are part of the Agreement and that the Parties may amend the 
Agreement subject to applicable domestic procedures. This 
Chapter also provides that the Agreement will enter into force 
60 days after the exchange of written notifications and can be 
terminated 6 months after a Party provides written notice of 
its intention to withdraw from the Agreement.

                   D. GENERAL DESCRIPTION OF THE BILL

TITLE I. APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT

Sec. 101. Approval and Entry Into Force of the Agreement

    This section provides Congressional approval for the 
Agreement and its accompanying Statement of Administrative 
Action. Section 101 also authorizes the President to exchange 
notes with Singapore to provide for entry into force of the 
Agreement on or after January 1, 2004. The exchange of notes is 
conditioned on a determination by the President that Singapore 
has taken measures necessary to comply with those of its 
obligations that take effect at the time the Agreement enters 
into force.

Sec. 102. Relationship of the Agreement to United States and State Law

    This section establishes the relationship between the 
Agreement and U.S. law. It clarifies that no provision of the 
Agreement will be given effect under domestic law if 
inconsistent with Federal law; this would include provisions of 
Federal law enacted or amended by the Act.
    Section 102 also provides that no State law may be declared 
invalid on the ground that the law is inconsistent with the 
Agreement, except in an action brought by the United States for 
the purpose of declaring such law invalid. This section 
precludes any private right of action or remedy against the 
Federal Government, or a State government, based on the 
provisions of the Agreement.

Sec. 103. Consultation and Layover Provisions for, and Effective Date 
        of, Proclaimed Actions

    This section sets forth consultation and layover steps that 
must precede the President's implementation of any tariff 
modification by proclamation. Under the consultation and 
layover provisions, the President must obtain the advice of the 
relevant private sector advisory committees and the U.S. 
International Trade Commission (ITC) on a proposed action. The 
President must submit a report to the Senate Committee on 
Finance and the House Committee on Ways and Means setting forth 
the action proposed, the reasons therefore, and the advice of 
the private sector advisors and the ITC. The Act sets aside a 
60 day period following the date of transmittal of the report 
for the Committees to consult with the President on the action.

Sec. 104. Implementing Actions in Anticipation of Entry Into Force and 
        Initial Regulations

    This section provides the authority for new or amended 
regulations to be issued, and for the President to proclaim 
actions implementing the provisions of the Agreement, on the 
date the Agreement enters into force. This section also 
requires that, whenever possible, all Federal regulations 
required or authorized under the Implementation Act are to be 
developed and promulgated within 1 year of the Agreement's 
entry into force.

Sec. 105. Administration of Dispute Settlement Proceedings

    This section authorizes the President to establish or 
designate within the Department of Commerce an office 
responsible for providing administrative assistance to dispute 
settlement panels established under Chapter 20 of the 
Agreement. This section also authorizes the appropriation of 
funds to support this office.

Sec. 106. Arbitration of Certain Claims

    This section authorizes the United States to use binding 
arbitration to resolve claims covered by two provisions of the 
Agreement that concern government contracts. This section also 
provides that contracts executed by an agency of the United 
States on or after the entry into force of the Agreement shall 
contain a clause specifying the law that will apply to resolve 
any breach of contract claim.

Sec. 107. Effective Dates; Effect of Termination

    This section provides the dates that certain provisions of 
the Act will go into effect. This section also provides that 
the provisions of the Implementation Act will no longer be in 
effect on the date on which the Agreement ceases to be in 
force.

                      TITLE II. CUSTOMS PROVISIONS

Sec. 201. Tariff Modifications

    This section authorizes the President to implement by 
proclamation the continuation, modification or elimination of 
tariffs as the President determines to be necessary or 
appropriate to carry out the terms of the Agreement.
    Section 201(b) authorizes the President, subject to the 
consultation and layover provisions of section 103(a) of the 
bill, to: modify or continue any duty; modify the staging of 
duty elimination pursuant to an agreement with Singapore under 
Article 2.2.3 of the Agreement; keep in place duty-free or 
excise treatment; or, impose any duty by proclamation whenever 
the President determines it to be necessary or appropriate to 
maintain the general level of reciprocal and mutually 
advantageous concessions with respect to Singapore provided by 
the Agreement.

Sec. 202. Rules of Origin

    This section implements the general rules of origin set 
forth in Chapter 3 of the Agreement. Under the general rules, 
there are four basic ways for a good imported from Singapore to 
qualify as an originating good, and therefore be eligible for 
preferential tariff treatment when the good is imported into 
the United States.
    First, a good is an originating good if it is wholly 
obtained or produced entirely in the territory of Singapore, 
the United States, or both. Second, the general rules of origin 
provide that a good is an originating good if those materials 
used to produce the good that are not themselves originating 
goods are transformed in such a way as to cause their tariff 
classification to change or meet other requirements, as 
specified in Annex 3A of the Agreement.
    Third, Article 3.2 provides that a good listed in Annex 3B 
of the Agreement is considered to be an originating good if it 
is imported into the territory of the United States from the 
territory of Singapore. The goods listed in Annex 3B are 
information technology goods and certain other goods for which 
the current normal trade relation/most-favored-nation (NTR/MFN) 
duty rate of the United States is zero. Thus, imports of these 
goods into the United States would receive duty-free treatment 
regardless of origin. The Agreement provides that a product 
listed in Annex 3B (the Integrated Sourcing Initiative or ISI 
product list) is an originating good only if it is shipped from 
one Agreement Party to the other. If a product is shipped from 
a non-Agreement party to Singapore, but is not then shipped 
between Singapore and the United States, the product does not 
meet the criteria for treatment as an originating good under 
the Agreement. The ISI provisions of the Agreement do not 
affect the applicability of normal rules of origin, except in 
the limited situation of shipments between Singapore and the 
United States.
    Finally, the remainder of section 202 sets forth specific 
rules for determining whether a good qualifies as an 
originating good under the Agreement. Section 202(b) provides 
that a good is not disqualified as an originating good if it 
contains de minimis quantities of non-originating materials 
that do not undergo a tariff transformation. Section 202(d) 
implements provisions in Annex 3A of the Agreement that require 
certain goods to have at least a specified percentage of 
regional value content to qualify as originating goods. Section 
202(d) prescribes alternative methods for calculating regional 
value content. Other provisions in section 202 address the 
valuation of materials and the determination of originating or 
non-originating status for fungible goods and materials.
    This section also authorizes the President to modify 
certain of the Agreement's specific rules of origin by 
proclamation, subject to the consultation and layover 
provisions of section 103 of the Implementation Act. Section 
202 expressly limits the President's authority to modify 
specific rules of origin pertaining to textile and apparel 
goods and precludes the modification by proclamation of 
provisions of Annex 3B of the Agreement (the Integrated 
Sourcing Initiative or ISI product list).

Sec. 203. Customs User Fees

    This section amends Section 13031(b) of the Consolidated 
Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c) to 
provide for the immediate elimination of the merchandise 
processing fee for goods qualifying for preferential treatment 
under the terms of the United States-Singapore Free Trade 
Agreement. Processing of goods under the Agreement will be 
financed by money from the General Fund of the Treasury.

Sec. 204. Disclosure of Incorrect Information

    This section provides that the United States may not impose 
a penalty on an importer who makes an invalid claim for 
preferential tariff treatment under the Agreement if, after 
discovering that the claim is invalid, the importer promptly 
and voluntarily corrects the claim and pays any duty owing.

Sec. 205. Enforcement Relating to Trade in Textile and Apparel Goods

    This section authorizes the President to apply anti-
circumvention provisions concerning textile and apparel goods. 
In particular, this section authorizes the President to bar 
textile and apparel goods from an exporter or producer that has 
engaged in intentional circumvention or refused permission for 
U.S. officials to conduct a verification visit at its 
facilities in Singapore. Section 205 also authorizes the 
President to take action against circumvention that has not 
been addressed through bilateral cooperation by denying 
preferential tariff treatment for the goods subject to the 
circumvention and for other textile and apparel goods produced 
by the enterprise that has been found to have engaged in the 
circumvention.

Sec. 206. Regulations

    This section requires the Secretary of the Treasury to 
prescribe regulations necessary to carry out the tariff-related 
provisions of the Agreement, including the rules of origin 
provisions.

                     TITLE III. RELIEF FROM IMPORTS

Sec. 301. Definitions

    This section defines the terms ``Commission'' and 
``Singaporean Article'' for purposes of the bilateral safeguard 
provision contained in Chapter 7 of the United States-Singapore 
Free Trade Agreement. The term ``Commission'' is defined as the 
United States International Trade Commission, and the term 
``Singaporean Article'' is defined as an article that qualifies 
as an originating good under section 202(a) of the United 
States-Singapore Free Trade Agreement Implementation Act. This 
section also defines the term ``Singaporean Textile or Apparel 
Article'' for purposes of the textile and apparel safeguard 
provision contained in Chapter 5 of the United States-Singapore 
Free Trade Agreement. The term ``Singaporean Textile or Apparel 
Article'' is defined as an article that is listed in the Annex 
to the Agreement on Textiles and Clothing referred to in 
section 101(d)(4) of the Uruguay Round Agreements Act (19 
U.S.C. Sec. 3511(d)(4)), and that satisfies the definition of a 
Singaporean article as provided for in this section.

     Subtitle A. Relief From Imports Benefiting From the Agreement

Sec. 311. Commencing of Action for Relief

    This section requires the filing of a petition with the 
Commission by an entity that is representative of an industry 
in order to commence a bilateral safeguard investigation. 
Section 311(a) permits a petitioning entity to request 
provisional relief as if the petition had been filed under 
section 202(a) of the Trade Act of 1974 (19 U.S.C. 
Sec. 2252(a)). Any request for provisional relief based upon an 
allegation of ``critical circumstances'' shall include such 
allegation in the petition.
    Section 311(b) provides that, upon the filing of a 
petition, the Commission shall promptly initiate an 
investigation to determine whether, as a result of the 
reduction or elimination of a duty provided for under the 
United States-Singapore Free Trade Agreement, a Singaporean 
article is being imported into the United States in such 
increased quantities, and under such conditions, that imports 
of the Singaporean article constitute a substantial cause of 
serious injury, or threat of serious injury, to the domestic 
industry producing an article that is like, or directly 
competitive with, the imported article.
    Section 311(c) applies to any bilateral safeguard initiated 
under the Agreement certain provisions, both substantive and 
procedural, contained in section 202 of the Trade Act of 1974 
(19 U.S.C. Sec. 2252) that apply to global safeguard 
investigations. These provisions include, inter alia, the 
requirement that the Commission publish notice of the 
commencement of an investigation; the requirement that the 
Commission hold a public hearing at which interested parties 
and consumers have the right to be present, to present 
evidence, and to respond to the presentations of other parties 
and consumers; the factors to be taken into account by the 
Commission in making its determinations; and, authorization for 
the Commission to promulgate regulations to provide access to 
confidential business information under protective order to 
authorized representatives of interested parties in an 
investigation.
    Section 311(d) precludes the initiation of an investigation 
with respect to any Singaporean article to which import relief 
has already been provided under either: this bilateral 
safeguard provision; the textile and apparel safeguard 
provision set forth in subtitle B of title III of the United 
States-Singapore Free Trade Agreement Implementation Act; the 
global safeguard provision set forth in Chapter 1 of title II 
of the Trade Act of 1974 (19 U.S.C. Sec. 2251 et seq.); article 
6 of the Agreement on Textiles and Clothing referred to in 
section 101(d)(4) of the Uruguay Round Agreements Act (19 
U.S.C. Sec. 3511(d)(4)); or, article 5 of the Agreement on 
Agriculture referred to in section 101(d)(2) of the Uruguay 
Round Agreements Act (19 U.S.C. Sec. 3511(d)(2)).

Sec. 312. Commission Action on Petition

    This section establishes deadlines for Commission 
determinations following the initiation of a bilateral 
safeguard investigation. Section 312(b) applies certain 
statutory provisions that address a divided vote by the 
Commission in a global safeguard investigation under section 
202 of the Trade Act of 1974 (19 U.S.C. Sec. 2252), to 
Commission determinations under this section. If the Commission 
renders an affirmative injury determination, or a determination 
that the President may consider to be an affirmative 
determination in the event of a divided vote by the Commission, 
section 312(c) requires that the Commission also find and 
recommend to the President the amount of import relief that is 
necessary to remedy or prevent the injury found by the 
Commission and to facilitate the efforts of the domestic 
industry to make a positive adjustment to import competition. 
Section 312(d) specifies the information to be included by the 
Commission in a report to the President regarding its 
determination. Upon submitting the requisite report to the 
President, section 312(e) requires the Commission to promptly 
make public such report, except for confidential information 
contained in the report.

Sec. 313. Provision of Relief

    This section directs the President, not later than 30 days 
after receiving the report from the Commission, to provide 
relief from imports of the article subject to an affirmative 
determination by the Commission, or a determination that the 
President considers to be an affirmative determination in the 
event of a divided vote by the Commission, to the extent that 
the President determines necessary to remedy or prevent the 
injury and to facilitate the efforts of the domestic industry 
to make a positive adjustment to import competition. Under 
section 313(b), the President is not required to provide import 
relief if the President determines that the provision of the 
import relief will not provide greater economic and social 
benefits than costs.
    Section 313(c) specifies the nature of the import relief 
that the President may impose, to include: the suspension of 
any further reduction in duty provided under Annex 2B of the 
United States-Singapore Free Trade Agreement; and, an increase 
in the rate of duty imposed on such article to a level that 
does not exceed the lesser of (1) the normal trade relation/
most-favored-nation (NTR/MFN) duty rate imposed on like 
articles at the time the import relief is provided, or (2) the 
NTR/MFN duty rate imposed on like articles on the day before 
the date on which the United States-Singapore Free Trade 
Agreement enters into force. In the case of a duty applied on a 
seasonal basis to an article, the President may increase the 
rate of duty imposed on such article to a level that does not 
exceed the lesser of (1) the NTR/MFN duty rate imposed on like 
articles for the immediately preceding corresponding season, or 
(2) the NTR/MFN duty rate imposed on like articles on the day 
before the date on which the United States-Singapore Free Trade 
Agreement enters into force. Section 313(c) also requires that 
if the period for which import relief is provided exceeds 1 
year, the President shall provide for the progressive 
liberalization (described in article 7.28 of the United States-
Singapore Free Trade Agreement) of such relief at regular 
intervals during the period of its application.
    Section 313(d) provides that the initial period for import 
relief in a bilateral safeguard action shall not exceed 2 
years. The President is authorized to extend the effective 
period of such relief under section 313(d) if the President 
determines that import relief continues to be necessary to 
remedy or prevent serious injury and to facilitate adjustment 
to import competition, and that there is evidence that the 
domestic industry is making a positive adjustment to import 
competition. Before the President can extend the period of 
import relief, the President must first receive a report from 
the Commission under section 313(d)(2)(B) containing an 
affirmative determination, or a determination that the 
President may consider to be an affirmative determination in 
the event of a divided vote by the Commission, that import 
relief continues to be necessary to remedy or prevent serious 
injury and that the domestic industry is making a positive 
adjustment to import competition. Section 313(d) also provides 
that the total period for import relief in a bilateral 
safeguard action, including any extension of such import 
relief, shall not exceed 4 years.
    Section 313(e) provides that upon termination of import 
relief under the bilateral safeguard provision, the rate of 
duty to be applied is the rate of duty that would have been in 
effect on that date with respect to the article, but for the 
provision of such import relief.
    Section 313(f) provides that no import relief may be 
provided under the bilateral safeguard provision on any article 
that has been subject to relief, after entry into force of the 
United States-Singapore Free Trade Agreement, under either: 
this bilateral safeguard provision; the textile and apparel 
safeguard provision set forth in subtitle B of title III of the 
United States-Singapore Free Trade Agreement Implementation 
Act; the global safeguard provision set forth in Chapter 1 of 
title II of the Trade Act of 1974 (19 U.S.C. Sec. 2251 et 
seq.); article 6 of the Agreement on Textiles and Clothing 
referred to in section 101(d)(4) of the Uruguay Round 
Agreements Act (19 U.S.C. Sec. 3511(d)(4)); or, article 5 of 
the Agreement on Agriculture referred to in section 101(d)(2) 
of the Uruguay Round Agreements Act (19 U.S.C. 
Sec. 3511(d)(2)). This section is necessary to implement 
article 7.2.7 of the United States-Singapore Free Trade 
Agreement, in the event that an article subject to import 
relief under the bilateral safeguard subsequently becomes 
subject to import relief under one of these other provisions.

Sec. 314. Termination of Relief Authority

    This section provides that the President's authority to 
impose import relief under the bilateral safeguard provision 
ends after the date that is 10 years after the date on which 
the United States-Singapore Free Trade Agreement enters into 
force. Section 314(b) contains an exception to this general 
rule. The President may provide import relief under the 
bilateral safeguard provision after the date that is 10 years 
after the date on which the United States-Singapore Free Trade 
Agreement enters into force if the President determines that 
the Government of Singapore has consented to the imposition of 
such import relief.

Sec. 315. Compensation Authority

    This section authorizes the President, under section 123 of 
the Trade Act of 1974 (19 U.S.C. Sec. 2133), to grant Singapore 
new concessions as compensation for the imposition of import 
relief in a bilateral safeguard investigation, in order to 
maintain the general level of reciprocal concessions.

Sec. 316. Confidential Business Information

    This section applies the same procedures for the treatment 
and release of confidential business information by the 
Commission in a global safeguard investigation under Chapter 1 
of title II of the Trade Act of 1974 (19 U.S.C. Sec. 2251 et 
seq.) to bilateral safeguard investigations under this 
provision.

           Subtitle B. Textile and Apparel Safeguard Measures

Sec. 321. Commencement of Action for Relief

    This section requires the filing of a request with the 
President by an interested party in order to commence action 
for relief under the textile and apparel safeguard provision. 
Upon the filing of a request, the President shall review the 
request to determine, from the information presented in the 
request, whether to commence consideration of the request. 
Section 321(b) provides that, if the President determines that 
the request provides the information necessary for the request 
to be considered, the President shall cause to be published in 
the Federal Register a notice of commencement of consideration 
of the request, and notice seeking public comments regarding 
the request. The notice shall include the request and the dates 
by which comments and rebuttals must be received.

Sec. 322. Determination and Provision of Relief

    This section provides that following the President's 
commencement of consideration of the request, the President 
shall determine whether, as a result of the elimination of a 
duty under the United States-Singapore Free Trade Agreement, a 
Singaporean textile or apparel article is being imported into 
the United States in such increased quantities and under such 
conditions that imports of the article constitute a substantial 
cause of serious damage, or actual threat thereof, to a 
domestic industry producing an article that is like, or 
directly competitive with, the imported article.
    Section 322(a) identifies certain economic factors that the 
President shall examine in making a determination, including 
changes in the domestic industry's output, productivity, 
capacity utilization, inventories, market share, exports, 
wages, employment, domestic prices, profits, and investment, 
none of which is necessarily decisive. Section 322(a) also 
provides that the President shall not consider changes in 
technology or consumer preference as factors supporting a 
determination of serious damage or actual threat thereof.
    Section 322(b) authorizes the President, in the event of an 
affirmative determination of serious damage or actual threat 
thereof, to provide import relief to the extent that the 
President determines necessary to remedy or prevent the serious 
damage and to facilitate adjustment by the domestic industry to 
import competition. Section 322(b) also specifies the nature of 
the import relief that the President may impose, to consist of: 
the suspension of any further reduction in duty provided under 
Annex 2B of the United States-Singapore Free Trade Agreement; 
or, an increase in the rate of duty imposed on such article to 
a level that does not exceed the lesser of (1) the normal trade 
relation/most-favored-nation (NTR/MFN) duty rate imposed on 
like articles at the time the import relief is provided, or (2) 
the NTR/MFN duty rate imposed on like articles on the day 
before the date on which the United States-Singapore Free Trade 
Agreement enters into force.

Sec. 323. Period of Relief

    This section provides that the initial period for import 
relief in a textile and apparel safeguard action shall not 
exceed 2 years. The President is authorized to extend the 
effective period of such relief under section 323(b) if the 
President determines that import relief continues to be 
necessary to remedy or prevent serious damage and to facilitate 
adjustment to import competition, and that there is evidence 
that the domestic industry is making a positive adjustment to 
import competition. Section 323(b) also provides that the total 
period for import relief in a textile and apparel safeguard 
action, including any extension of such import relief, may not 
exceed 4 years.

Sec. 324. Articles Exempt From Relief

    This section precludes the President from providing import 
relief under the textile and apparel safeguard provision with 
respect to any article to which import relief has already been 
provided under the textile and apparel safeguard provision.

Sec. 325. Rate After Termination of Import Relief

    This section provides that the duty rate applicable to a 
textile or apparel article after termination of the import 
relief shall be the duty rate that would have been in effect on 
that date but for the provision of such import relief.

Sec. 326. Termination of Relief Authority

    This section provides that the President's authority to 
provide relief under the textile and apparel safeguard 
provision terminates after the date that is 10 years after the 
date on which the provisions of the United States-Singapore 
Free Trade Agreement relating to trade in textile and apparel 
goods take effect pursuant to article 5.10 of the United 
States-Singapore Free Trade Agreement.

Sec. 327. Compensation Authority

    This section authorizes the President, under section 123 of 
the Trade Act of 1974 (19 U.S.C. Sec. 2133), to grant Singapore 
new concessions as compensation for the imposition of import 
relief in a textile and apparel safeguard proceeding, in order 
to maintain the general level of reciprocal concessions.

Sec. 328. Business Confidential Information

    This section precludes the President from releasing 
information that the President considers to be confidential 
business information unless the party submitting the 
confidential business information had notice, at the time of 
submission, that such information would be released by the 
President, or such party subsequently consents to the release 
of the information. This section also provides that, to the 
extent business confidential information is provided, a 
nonconfidential version of the information shall also be 
provided in which the business confidential information is 
summarized or, if necessary, deleted.

       Subtitle C. Cases Under Title II of the Trade Act of 1974

Sec. 331. Findings and Action on Goods From Singapore

    This section authorizes the President, when imposing global 
safeguard relief under Chapter 1 of title II of the Trade Act 
of 1974 (19 U.S.C. Sec. 2251 et seq.), to exercise the 
discretion to exclude imports from Singapore that would 
otherwise be subject to the global safeguard relief, if certain 
conditions are met. Section 331(a) requires the Commission to 
find and report to the President whether imports of the article 
from Singapore are a substantial cause of serious injury or 
threat thereof. Section 331(b) requires the President, in 
determining the nature and extent of action to be taken under 
Chapter 1 of title II of the Trade Act of 1974 (19 U.S.C. 
Sec. 2251 et seq.), to also determine whether imports from 
Singapore are a substantial cause of the serious injury or 
threat thereof found by the Commission. If the President 
determines that imports from Singapore are not a substantial 
cause of the serious injury or threat thereof found by the 
Commission, the President may exclude imports from Singapore 
from any global safeguard relief action taken by the President.

             TITLE IV. TEMPORARY ENTRY OF BUSINESS PERSONS

    Sections 401 and 402 implement Chapter 11 of the Agreement 
with respect to providing for the temporary entry of business 
persons. These provisions are more fully addressed in Part II., 
Report of the Committee on the Judiciary.

                        E. CONGRESSIONAL ACTION

    On November 16, 2000, President William J. Clinton and 
Prime Minister Goh Chok Tong of Singapore agreed that in 
December 2000 the two countries would begin negotiations on a 
United States-Singapore Free Trade Agreement. On October 1, 
2002, President George W. Bush notified the Congress of ongoing 
negotiations between the United States and Singapore on a free 
trade agreement. On January 29, 2003, President Bush notified 
Congress of his intention to enter into the United States-
Singapore Free Trade Agreement. President Bush and Prime 
Minister Goh signed the Agreement on May 6, 2003. The 
Administration published the Agreement on May 7, 2003, and 
informally submitted draft implementing legislation to the 
108th Congress in June 2003.
    On June 10, 2003, the House Ways and Means Committee, 
Subcommittee on Trade, held a hearing on the implementation of 
the bilateral Free Trade Agreements with Singapore and Chile. 
The Subcommittee received testimony from the Hon. Earl 
Blumenauer (Representative in Congress from the State of 
Oregon); the Hon. Pete Sessions (Representative in Congress 
from the State of Texas); the Hon. Judy Biggert (Representative 
in Congress from the State of Illinois); the Hon. Peter F. 
Allgeier (Deputy United States Trade Representative); E. Leon 
Trammell (founder and chief executive officer, Tramco, 
Incorporated, on behalf of the U.S. Chamber of Commerce); Jeff 
Jacobs (president, Global Business Development, QUALCOMM, 
Incorporated); Keith Gottfried (senior vice president and 
general counsel, Borland Software Corporation, on behalf of the 
Business Software Alliance); Bob Haines (manager, International 
Relations, Exxon Mobil Corporation, and co-chair, U.S.-
Singapore Free Trade Agreement Business Coalition); Joseph 
Papovich (senior vice president, international, Recording 
Industry Association of America, on behalf of the Entertainment 
Industry Coalition for Free Trade); David Spence (managing 
director, regulatory and industry affairs, Legal Department, 
Federal Express, and chairman, Trade Committee, Air Courier 
Conference of America); Gawain Kripke (senior policy advisor, 
Oxfam America); Thea M. Lee (chief international economist, 
American Federation of Labor and Congress of Industrial 
Organizations); John Audley (senior associate and director, 
Project on Trade, Equity, and Development, Carnegie Endowment 
for International Peace).
    On June 17, 2003, the Senate Committee on Finance held a 
public hearing on the implementation of the bilateral Free 
Trade Agreements with Singapore and Chile. The Committee 
received testimony from the Hon. Christopher S. Bond (Senator 
from the State of Missouri); the Hon. Peter Allgeier (Deputy 
United States Trade Representative); Norman Sorensen 
(president, Principal International Incorporated, on behalf of 
the Coalition of Service Industries); James Jarrett (vice 
president for worldwide government affairs, Intel Corporation, 
on behalf of the Business Software Alliance and the High Tech 
Trade Coalition); Jeffrey Shafer (managing director, Citigroup, 
on behalf of the U.S.-Singapore Free Trade Agreement Business 
Coalition); Sandra Polaski (senior associate, Carnegie 
Endowment for International Peace); Larry Liebenow (president 
and chief executive officer, Quaker Fabric Corporation, and 
chairman of the executive committee of the U.S. Chamber of 
Commerce); Jon Caspers (Pleasant Valley Pork Corporation, and 
president of the National Pork Producers Council); Keith Schott 
(Bar Four F Ranch Incorporated, and treasurer, Montana Grain 
Growers Association); David Johnson (executive vice president 
and general counsel, Warner Music Group, on behalf of the 
Entertainment Industry Coalition for Free Trade); and Paul 
Joffe (senior director for international affairs, National 
Wildlife Federation).
    On July 10, 2003, the Senate Committee on Finance conducted 
an informal consideration of the implementing language 
submitted by the Administration. In addition, the House Ways 
and Means Committee and the House Judiciary Committee conducted 
their informal considerations of the implementing language on 
July 10, 2003, respectively. On July 14, 2003, the Senate 
Judiciary Committee notified an informal consideration of the 
Administration's implementing language.
    On July 15, 2003, the Administration formally transmitted 
to Congress the implementing legislation for the United States-
Singapore Free Trade Agreement. On July 15, 2003, Senator 
Charles E. Grassley introduced legislation in the Senate 
(S.1417), with Senator Max Baucus and Senator Bill Frist as 
cosponsors, to implement the Agreement. Congressman Tom DeLay, 
with Congressman Charles Rangel as a cosponsor, as respective 
designees for the Speaker of the House and the Minority Leader 
of the House and by request, introduced the identical 
legislation in the House (H.R. 2739), on July 15, 2003.
    On July 14, 2003, the Senate Judiciary Committee held a 
public hearing on draft implementing legislation for the 
proposed United States-Singapore Free Trade Agreement. The 
Committee received testimony from Regina Vargo (Assistant 
United States Trade Representative for the Americas), and Ralph 
Ives (Assistant United States Trade Representative for 
Southeast Asia, Pacific, and APEC Affairs). The House Judiciary 
Committee favorably voted out the measure on July 16, 2003, by 
voice vote.
    On July 17, 2003, the Senate Committee on Finance 
unanimously reported out S.1417, a bill to implement the United 
States-Singapore Free Trade Agreement, by a vote of 21-0. The 
House Ways and Means Committee also favorably reported out H.R. 
2739 on July 17, 2003, by a vote of 32-5. On the same day, the 
Senate Judiciary Committee also favorably reported out the 
measure by a vote of 11-4.

             F. VOTE OF THE COMMITTEE IN REPORTING THE BILL

    In compliance with section 133 of the Legislative 
Reorganization Act of 1946, the Committee states that S.1417 
was ordered favorably reported, without amendment, by a 
unanimous recorded vote with a quorum present on July 17, 2003.

                 g. regulatory impact and other matters

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill will not significantly regulate any individuals or 
businesses, will not affect the personal privacy of 
individuals, and will result in no significant additional 
paperwork.
    The following information is provided in accordance with 
section 423 of the Unfunded Mandates Reform Act of 1995 (Pub. 
L. No. 104-04). The committee has reviewed the provisions of S. 
1417 as approved by the Committee on July 17, 2003. In 
accordance with the requirement of Pub. L. No. 104-04, the 
Committee has determined that the bill contains no 
intergovernmental mandates, as defined in the UMRA, and would 
not affect the budgets of State, local, or tribal governments.

           Part II. Report of the Committee on the Judiciary

                             A. BACKGROUND

    As provided in Article 11.1 et seq. and Annex 11A, the 
United States-Singapore Free Trade Agreement (FTA) creates 
separate categories of entry for citizens of each country to 
engage in a wide range of business and investment activities on 
a temporary basis. The FTA addresses four specific categories 
of temporary nonimmigrant admissions currently governed by U.S. 
immigration law. They are: business visitors, treaty traders 
and investors, intra-company transfers, and professional 
workers. These categories parallel the visa categories commonly 
referred to by the letter and numeral that denotes their 
subsection in Sec. 101(a)(15) of the Immigration and 
Nationality Act: B-1 visitors, E treaty traders and investors, 
L-1 intra-company transferees, and H-1B professional workers.
    B-1 nonimmigrants are visitors for business purposes and 
are required to be seeking admission for activities other than 
purely employment or hire. The difference between a business 
visitor and a temporary worker depends also on the source of 
the alien's salary. To be classified as a visitor for business, 
an alien must receive his or her salary from abroad and must 
not receive any remuneration from a U.S. source other than an 
expense allowance and reimbursement for other expenses 
incidental to temporary stay.
    Foreign nationals who are treaty traders enter on the E-1 
visa, while those who are treaty investors use the E-2 visa. 
Treaty trader is defined as one who seeks temporary admission 
to the United States solely to carry on substantial trade, 
including trade in services or trade in technology, principally 
between the United States and the foreign state of which he/she 
is a national. Treaty investor is defined as one who seeks 
temporary admission to the United States solely to develop and 
direct the operations of an enterprise in which he/she has 
invested, or of an enterprise in which he/she is actively in 
the process of investing a substantial amount of capital.
    Intracompany transferees who work for an international firm 
or corporation in executive and managerial positions or have 
specialized product knowledge are admitted on L-1 visas. The 
prospective L-1 nonimmigrant must demonstrate that he or she 
meets the qualifications for the particular job as well as the 
visa category. The alien must have been employed by the firm 
for at least 6 months in the preceding 3 years in the capacity 
for which the transfer is sought.
    Foreign nationals seeking H-1B visas for professional 
specialty workers go through a 2-step admissions process. Using 
a streamlined form of the Labor Condition Application (LCA) 
known as labor attestation, employers wishing to bring in an H-
1B professional foreign worker first must attest in an 
application to the U.S. Department of Labor (DOL) that the 
employer will pay the nonimmigrant the greater of the actual 
wages paid other employees in the same job or the prevailing 
wages for that occupation; the employer will provide working 
conditions for the nonimmigrant that do not cause the working 
conditions of the other employees to be adversely affected; 
and, there is no strike or lockout. Firms categorized as H-1B 
dependent (generally if at least 15% of the workforce are H-1B 
workers) must also attest that they have attempted to recruit 
U.S. workers and that they have not laid off U.S. workers 90 
days prior to or after hiring any H-1B nonimmigrants. The 
prospective H-1B nonimmigrants then must demonstrate that they 
have the requisite education and work experience for the posted 
positions as well as a baccalaureate degree (or equivalent 
experience) necessary to be considered a professional specialty 
worker. The admission of H-1B nonimmigrants is numerically 
limited, with a statutory cap of 65,000 that is temporarily 
increased to 195,000 through FY2003.

     B. IMPLEMENTING LEGISLATION ON TEMPORARY PROFESSIONAL WORKERS

    The USTR's legislation that would implement the Singapore 
agreement was introduced July 15, 2003, as S. 1417. Title IV of 
this bill would amend several sections of the Immigration and 
Nationality Act. Foremost, the bills would amend 
Sec. 101(a)(15)(H) of INA to carve out a portion of the H-1B 
visas--to be designated the H-1B-1 visa--for professional 
workers entering through the FTAs. In many ways the proposed 
FTA professional worker visa requirements parallel the H-1B 
visa requirements, notably having similar educational 
requirements. Although the implementing language, for the 
purpose of consistency with the actual FTA, requires 
``specialized knowledge'' instead of ``highly specialized 
knowledge'' as stated in the current H-1B statute, the 
Administration's Statement of Administrative Action (SAA) 
clearly instructs that specialized knowledge and highly 
specialized knowledge are to be treated similarly. The bill 
also amends Sec. 212 of INA to add a labor attestation 
requirement for employers bringing in potential FTA 
professional workers that is similar to the H-1B labor 
attestation statutory requirements. The additional attestation 
requirements for ``H-1B dependent employers'' currently 
specified in Sec. 212 are not included in the labor attestation 
requirements for employers of the proposed FTA professional 
workers. The Administration omitted some of the requirements 
that are due to ``sunset'' at the end of FY 2003 because it did 
not know whether the provisions will continue after the current 
fiscal year, and did not wish to impose harsher conditions on 
trade partners than the United States currently imposes on 
other nations. However, nothing in the implementing language 
precludes application of future restrictions on these FTA visas 
so long as the restrictions do not conflict with the underlying 
terms of the FTA.
    S. 1417 contains numerical limits of 5,400 new entries 
under the proposed FTA professional worker visa from Singapore. 
The bill does not limit the number of times that an alien may 
renew the FTA professional worker visa on an annual basis, 
unlike H-1B workers who are limited to a total of 6 years. 
However, the bar on immigrant intent under INA Sec. 214(b) 
applies here, whereas such ban does not apply to H-1B visa 
holders. This means that a holder of the FTA visa must show 
that he or she intends to return to Singapore and has 
maintained substantial ties to Singapore. Otherwise, the United 
States government may deny the renewal request. H-1B visa 
holders may intend to remain permanently in the United States.
    There is also a numerical limitation on the entry of 
professional workers. The legislation limits the number of 
Singaporean professional workers coming into the United States 
to 5,400 annually. Further, the Secretary of Homeland Security 
may set a cap lower than the 5,400 limitfor any given year. 
Each FTA professional worker visa granted is charged against the total 
H-1B cap, whether it remains at 195,000, goes down to 65,000, or if a 
new cap is set after the current law sunsets. Moreover, after the fifth 
year, a number is charged against the overall H1-B cap for each year 
that the FTA professional worker visa is extended.
    There is little debate on the investor (E) and business 
visitor (B-1) visa provisions of the FTA. Some members of the 
Committee have criticized that the intra-company transferee (L-
1) provisions of the FTA do not permit labor certification or 
numerical limitations to be placed on these visas. However, 
neither the FTA nor S. 1417 precludes imposition of conditions 
that would be intended to thwart fraud or to punish fraudulent 
use of this visa category.

                     C. JUDICIARY COMMITTEE ACTION

    On July 14, 2003, the Judiciary Committee held a hearing on 
the temporary entry provisions of the FTAs with Singapore and 
Chile. The USTR provided two witnesses, Ralph Ives and Regina 
Vargo, who were the lead negotiators with Singapore and Chile, 
respectively.
    At the hearing, members of this Committee expressed serious 
concerns about the propriety of using trade agreements as the 
vehicle to enter into immigration agreements with foreign 
countries. The concerns were shared by Republican as well as 
Democrat senators.
    On July 15, 2003, the Administration transmitted the entire 
implementing language for the two trade agreements, including 
the provisions for temporary entry of professional workers, 
business visitors, intra-company transferees, and investors.
    On July 17, 2003, at an Executive Business Meeting of the 
Judiciary Committee, the members discussed the temporary entry 
provisions of both trade agreements. There was a bipartisan 
sentiment that the trade agreements were not the appropriate 
vehicle to negotiate immigration provisions. Despite the 
general displeasure, the Committee voted in favor of the 
temporary entry provisions.
    The Committee voted in the following manner for both the 
Singapore and the Chile agreements:

          YES                    NO                       PASS

Mr. Hatch              Mr. Sessions          Mr. Leahy
Mr. Grassley           Mr. Kohl              Mr. Biden
Mr. Specter            Mrs. Feinstein        Mr. Durbin
Mr. Kyl                Mr. Feingold          Mr. Edwards
Mr. DeWine
Mr. Graham
Mr. Craig
Mr. Cornyn
Mr. Chambliss
Mr. Kennedy
Mr. Schumer

                    II. BUDGETARY IMPACT OF THE BILL

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 1417--A bill to implement the United States-Singapore Free Trade 
        Agreement
    Summary: S. 1417 would approve the free trade agreement 
(FTA) between the government of the United States and the 
government of Singapore that was entered into on May 6, 2003. 
It would provide for tariff reductions and other changes in law 
related to implementation of the agreement, such as provisions 
dealing with dispute settlement, rules of origin, and safeguard 
measures for textile and apparel industries. The bill also 
would allow the temporary entry of certain business persons 
into the United States.
    The Congressional Budget Office estimates that enacting the 
bill would reduce revenues by $55 million in 2004, by $410 
million over the 2004-2008 period, and by about $1 billion over 
the 2004-2013 period, net of income and payroll tax offsets. 
The bill would not have a significant effect on direct spending 
or spending subject to appropriation. CBO has determined that 
S. 1417 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of S. 1417 is shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                       By Fiscal Year, in Millions of Dollars--
                                                                    --------------------------------------------
                                                                       2004     2005     2006     2007     2008
----------------------------------------------------------------------------------------------------------------
                                             CHANGES IN REVENUES \1\

Estimated revenues.................................................      -55      -80      -86      -92      -98
----------------------------------------------------------------------------------------------------------------
\1\ S. 1417 also would affect direct spending and discretionary spending, but the amounts of those changes would
  be less than $500,000 a year.

Basis of Estimate
            Revenues
    Under the United States-Singapore agreement, all tariffs on 
U.S. imports from Singapore would be phased out over time. The 
tariffs would be phased out for individual products at varying 
rates according to one of several different timetables ranging 
from immediate elimination to partial elimination over 10 
years. According to the U.S. International Trade Commission, 
the U.S. collected $88 million in customs duties in 2002 on 
about $14.1 billion of imports from Singapore. Of the imports, 
only $1.3 billion faced non-zero tariff rates. These dutiable 
imports from Singapore consist mostly of certain electrical 
machinery, knitted or crocheted apparel, mineral fuels and 
oils, surgical and precision instruments, and certain nuclear 
reactor components. Based on these data, CBO estimates that 
phasing out tariff rates as outlined in the U.S.-Singapore 
agreement would reduce revenues by $55 million in 2004, by $410 
million over the 2004-2008 period, and by about $1 billion over 
the 2004-2013 period, net of income and payroll tax offsets.
    This estimate includes the effects of increased imports 
from Singapore that would result form the reduced prices of 
imported products in the United States, reflecting the lower 
tariff rates. It is likely that some of the increase in U.S. 
imports from Singapore would displace imports from other 
countries. In the absence of specific data on the extent of 
this substitution effect, CBO assumes that an amount equal to 
one-half of the increase in U.S. imports form Singapore would 
display imports form other countries.
    Based on current law, S. 1417 would not provide for the 
assessment of civil monetary penalties on employers for 
violations of the labor attestation process with respect to 
certain workers form Singapore. However, if S. 1416, a bill to 
implement the United States-Chile FTA, were to be enacted prior 
to this bill, S.1417 would allow the Secretary of Labor to 
assess such penalties. CBO expects that any additional revenues 
collected as a result would amount to less than $500,000 in any 
year.
            Direct Spending
    Title IV of S. 1417 would permit certain traders and 
investors form Singapore, and their spouses and children, to 
enter the United States as nonimmigrants. The Bureau of 
Citizenship and Immigration Service (BCIS) would charge fee of 
about $100 to provide nonimmigant visas, so CBO estimates that 
the agency could collect several million dollars annually in 
offsetting receipts ( a credit against direct spending). The 
agency is authorizedto spend such fees without further 
appropriation, so the net impact on BCIS spending would not be 
significant.
    However, if S. 1416 (a bill to implement the United States-
Chile FTA) were to be enacted prior to this bill, title IV 
would establish a new nonimmigrant category for certain 
professional workers from Singapore. The legislation would 
limit the number of annual entries under this category to 
5,400, plus spouses and children. The BCIS would charge fees of 
about $100 to provide nonimmigrant visas, so CBO estimates that 
the agency would collect less than $3 million annually in 
offsetting receipts. Again, the agency is authorized to spend 
such fees without further appropriation, so the net impact on 
BCIS spending would not be significant.
    Under current law, the Department of State also collects 
$100 application fee for nonimmigrant visas. These collections 
are spent on border security and consular functions. CBO 
estimates that the net budgetary impact would be less than 
$500,000 a year.
            Spending Subject to Appropriation
    Title I of S. 1417 would authorize the appropriation the 
necessary funds for the Department of Commerce to pay the 
United States' share of the costs of the dispute settlement 
procedures established by the agreement. Based on information 
from the agency, CBO estimates that implementing this provision 
would cost $100,000 in 2004,and $250,000 in each of the 
following years, subject to the availability of appropriated 
funds.
    Title II would require the International Trade Commission 
(ITC) to investigate claims of injury to domestic industries as 
a result of the FTA. The ITC would have 120 days to determine 
whether a domestic industry has been injured, and if so, would 
recommend the necessary amount of import relief. The ITC would 
also submit a report on its determination to the President. 
According to the ITC, similar FTAs have resulted in only a 
handful of cases each year, at an average cost of about 
$200,000 per investigation. Based on this information, CBO 
estimates the bill would have no significant effect on spending 
subject to appropriation.
    Summary of Effect on Revenues and Direct Spending: The 
overall effects of S. 1417 on revenues and direct spending are 
shown in the following table.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                       By Fiscal Year, In Millions of Dollars--
                                                            --------------------------------------------------------------------------------------------
                                                              2003    2004    2005    2006    2007    2008     2009     2010     2011     2012     2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in receipts........................................       0     -55     -80     -86     -92     -98     -104     -110     -117     -124     -132
Changes in outlays.........................................       *       *       *       *       *       *        *        *        *        *       *
--------------------------------------------------------------------------------------------------------------------------------------------------------
Note.--* = less than $500.000.

Source: the Congressional Budget Office.

    Intergovernment and Private-Sector Impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate Prepared by: Federal Revenues: Annabelle Bartsch. 
Federal Spending: Dispute Settlements--Melissa Zimmerman; 
Immigration--Mark Grabowicz, Christi Hawley-Sadoti, and Sunita 
D'Monte. Impact on State, Local, and Tribal Governments: 
Melissa Merrell. Impact on the Private Sector: Paige Piper/
Bach.
    Estimate Approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis; and Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                         III. ADDITIONAL VIEWS

            ADDITIONAL VIEWS OF SENATORS FEINSTEIN AND LEAHY

    Article 11.1 et seq. and Annex 11A of the United States-
Singapore Free Trade Agreement (FTA) contains provisions 
governing the temporary entry of foreign nationals from 
Singapore. Specifically, the agreement would require the United 
States to grant temporary entry to business persons under 
categories that parallel four nonimmigrant visa categories: the 
B-1 business visitor visa, E-1 treaty trader or investor visa, 
the L-1 intra-company transfer visa, and the H-1b professional 
visa. With the exception of the H-1b visa equivalent, the trade 
agreement does not impose numerical limits on the number of 
nonimmigrant visas that may be issued in a given year. In fact, 
the trade agreement expressly prohibits numerical limits on the 
visa categories. In addition, neither party to the agreement 
would be permitted to impose labor certification tests or other 
similar conditions of entry upon foreign nationals of 
Singapore.
    On July 15, 2003, despite concerns expressed by members of 
Congress over the immigration provisions, the President 
transmitted to Congress legislation to implement the U.S.-
Singapore agreement. The legislation was subsequently 
introduced in the Senate as S. 1417. Title IV of the 
legislation establishes a new H-1B(1) category for the 
temporary entry of foreign professionals from Singapore.

  BINDING IMMIGRATION POLICY SHOULD NOT BE ENACTED IN TRADE AGREEMENTS

    Trade agreements are not the appropriate vehicle for 
broadening or constraining immigration policy. Such agreements 
are meant to have a permanent impact. They cannot be amended or 
modified by subsequent legislation, should Congress choose for 
other compelling reasons to alter those provisions. The end 
result would be a patchwork of inconsistent immigration laws 
that may not serve not national interest.
    The authority to establish immigration laws and policies 
has historically rested with Congress. Article I, section 8, 
clause 4 of the Constitution provides that Congress shall have 
power to ``establish an uniform Rule of Naturalization.'' The 
Supreme Court has long interpreted this provision of the 
Constitution to grant Congress plenary power over immigration 
policy.
    As the Court found in Galvan v. Press, 347 U.S. 522, 531 
(1954), ``that the formulation of policies [pertaining to the 
entry of aliens and their right to remain here] is entrusted 
exclusively to Congress has become about as firmly imbedded in 
the legislative and judicial tissues of our body politic as any 
aspect of our government.'' And, as the Court found in 
Kleindienst v. Mandel, 408 U.S. 753, 766 (quoting Bountilier v. 
INS, 387 U.S. 118, 123 (1967)), ``[t]he Court without exception 
has sustained Congress' `plenary power to make rules for the 
admission of aliens and to exclude those who possess those 
characteristics which Congress has forbidden.'''
    The practice of trading immigration visas for business 
opportunities restricts the ability of Congress to legislate 
and the Executive Branch to administer U.S. immigration law and 
protect the interests of American and immigrant workers. 
Moreover, such agreements usually involvenegotiating legally 
binding provisions that limit the ability of policymakers to correct 
abuses or deficiencies in our immigration system.
    Because the Office of the United States Trade 
Representative has agreed to binding commitments on the 
movement of people, congressional measures to correct abuses in 
a given visa program could be deemed inconsistent with the 
U.S.'s obligations under the agreement, and thus, subject to 
penalty. Without express authority from Congress, the U.S. 
Trade Representative should not be permitted to negotiate new 
visa categories and impose new obligations on our temporary 
entry system in the trade agreements.

THE UNITED STATES TRADE REPRESENTATIVE HAS NOT DEMONSTRATED A NEED FOR 
                 ADDITIONAL TEMPORARY ENTRY PROVISIONS

    Our current immigration laws accommodate the entry of 
foreign workers, providing employers access to a broad range of 
temporary professionals. Each year, hundreds of thousands of 
visas are issued to temporary workers and their family members. 
The growth in the number of foreign professionals admitted for 
temporary stays reflects global economic trends.
    Not only has the U.S. Trade Representative not demonstrated 
a need for negotiating the temporary entry provisions, the 
Office did not provide any evidence that current immigration 
law would be a barrier to meeting the U.S. obligation to 
further trade in goods and services. In fact, current law is 
sufficient to accommodate these obligations as evidenced by the 
millions of temporary workers that enter the United States each 
year.
    The principal nonimmigrant visa categories under which 
temporary business professionals enter are the B-1 visa for 
business visitors, the E visa for traders and investors 
entering under bilateral treaties, the H-1b for professionals 
working in specialty occupations and the L visa for 
intracompany transfers. These categories parallel the 
categories of temporary admissions under the U.S.-Singapore 
Free Trade Agreement.
    In Fiscal year 2002, 4,376,935 foreign nationals entered 
under the B-1 temporary business visitor visa; 171,368 entered 
under the E treaty-trader visa; another 313,699 entered under 
the L intracompany transfer visa; and an additional 370,490 
entered the U.S. under the H-1b professional visa. In all, the 
United States admitted a total of 5,232,492 foreign nationals 
under the current temporary visa categories.
    While the Free Trade Agreement with Singapore specifically 
expresses the desire to facilitate the temporary entry of 
persons fitting these categories, only the E visa category 
would need to be modified in order to meet the obligations of 
the U.S. and Singapore. Thus, with the possible exception of 
the E visa, no evidence has been presented to substantiate the 
need to include the temporary entry provisions in the trade 
agreement.
    Members of the Judiciary Committee asked why the U.S. Trade 
Representative believed it necessary to include immigration 
provisions in a fast-tracked agreement. The Office of the 
United States Trade Representative offered the following 
response: ``The international mobility of business persons, 
whether in their personal capacity or as employees providing 
services, hasbecome an increasingly important component of 
competitive markets for suppliers and consumers alike.''
    The assertion that there is a direct link between the 
temporary entry of ``professionals'' and increased market 
access for corporations involved in foreign direct investment 
or trade in services, as the U.S. Trade Representative claims, 
is questionable. Companies that use the new professional visa 
programs would not have to be involved in international trade 
and investment in any way. They can be domestic companies, 
providing goods or services to domestic consumers. The only 
global feature about these companies is their workforce. 
Bringing in additional professionals outside of our traditional 
H-1b framework has little to do with eliminating barriers to 
services trade and foreign direct investment, and thus cannot 
be justified as a logical extension of the limited authority 
granted to the U.S. Trade Representative by the Trade Promotion 
Authority Act.

         FREE TRADE VISAS SHOULD NOT BE INDEFINITELY RENEWABLE

    Under the trade agreement, the visas for temporary business 
persons entering under all the categories in the agreement are 
indefinitely renewable. This, in effect, transforms what on 
paper is a temporary entry visa program into a permanent visa 
program.
    While the trade agreement requires temporary professionals 
who enter under its term count against the overall cap imposed 
on H-1b visas, each visa holder would be permitted to remain in 
the United States for an indefinite period of time. Thus, 
employers could renew their employees' visas each and every 
year under the agreements, with no limits, while also bringing 
in new entrants to fill up the annual numerical limits for new 
visas. This effectively would prevent Congress from limiting 
the duration of such visas when it is in the national interest 
to do so.

    INSUFFICIENT PROTECTIONS FOR WORKERS--BOTH DOMESTIC AND FOREIGN 
                               TEMPORARY

    Today 15.3 million people are unemployed, underemployed, or 
have given up looking for work. Of that number, 9.4 million are 
considered officially unemployed. These unemployment figures 
are the highest in almost a decade. The average person has been 
out of work nearly 20 weeks, one of the longest periods since 
1948.
    While employers are generally good actors, the provisions 
as drafted in the trade agreement would increase the number of 
temporary foreign workers exposed to exploitation and leave 
more to face an uncertain future. By making the visas 
indefinitely extendable these workers will remain in limbo with 
year-to-year extensions of their stay.
    Despite these concerns, the U.S. Trade Representative has 
seen fit to push through a free trade agreement with 
immigration provisions that significantly weaken the worker 
protections under current immigration law. The provisions would 
expand the types of occupation currently covered under H-1B to 
include: management consultants, disaster relief claims 
adjusters, physical therapists, and agricultural managers--
professions that do not require a bachelor's degree. (U.S.-
Singapore Free Trade Agreement, Appendix 11A.2, p. 131.) Nor 
would employers be required to demonstrate a shortage of 
workers in these professions before hiring foreign nationals 
under the agreement.Essentially, these provisions would open 
the door to the inclusion of new occupations in the trade agreement 
that are not currently included in the H-1b program. The definition of 
``specialty occupation'' in the H-1b program is specifically designed 
to ensure that employers do not abuse the H-1b program to undercut 
American workers in occupations where there is no skill shortage. The 
H-1b program defines a ``specialty occupation'' as one that requires 
the application of a ``body of highly specialized knowledge.'' The free 
trade agreement with Singapore and implementing legislation, on the 
other hand, broadens the definition of ``specialty occupation'' to 
include any job that requires the application ``of a body of 
specialized knowledge.'' Thus, the agreement omits the important 
qualifier that the intending foreign professional's knowledge be highly 
specialized, thus lowering the standard for admission. This is 
unacceptable.
    Moreover, unlike the provisions in the agreement, current 
law requires ``H-1b dependent'' employers seeking temporary 
workers to attest that they are actively trying to recruit U.S. 
workers for the positions filled by the foreign workers. They 
must also attest that they have not laid off U.S. workers 90 
days prior to or after hiring H-1b nonimmigrants. These 
additional requirements are not included in the agreement with 
Singapore.
    Neither the free trade agreement nor the implementing 
legislation require the employer to attest and the Department 
of Labor to certify that the employer has not laid off a U.S. 
worker either 90 days before or after hiring the foreign worker 
before the foreign national is permitted to enter the U.S. A 
labor certification would require the Department of Labor to 
undertake an investigation to verify that the employer's 
attestation is accurate and truthful before permitting the 
entry of the foreign national. Labor certifications are 
expressly prohibited under the trade agreement. Under the 
implementing provisions, the Labor Department may review 
attestations only for completeness and obvious inaccuracies and 
must provide the certification within seven days.
    Neither the trade agreement nor the implementing language 
provide the Department of Labor the authority to initiate 
investigations or conduct spot checks at work sites to uncover 
instances of U.S. worker displacement and other labor 
violations pertaining to the entry of foreign workers. This is 
particularly troublesome, given that in the last two fiscal 
years, the Department of Labor investigated 166 businesses with 
H-1b violations. As a result of those investigations, H-1b 
employers were required to pay more than $5 million in back pay 
awards to 678 H-1b workers. This suggests a compelling need to 
exercise greater oversight over employers reliant upon foreign 
labor.

                NO LIMITATIONS ON OTHER VISA CATEGORIES

    While the Administration has included a cap of 5,400 on the 
foreign professional visa category, there are other categories 
under which an unlimited number of foreign nationals from 
Singapore could enter: the B-1 visitor visa; the E-treaty/
investor visas; and L-1 intracompany visas (which have recently 
been the subject of investigations). None of these categories 
are numerically limited under the agreement, and once enacted, 
Congress may not subsequently impose caps on these categories 
for nationals entering pursuant to this agreement.
    Moreover, the agreement expressly prohibits the imposition 
of labor certification tests or other similar conditions on 
temporary entries under the B-1, E-1 and L-1 visa categories. 
While Congress could certainly correct some aspects of the law 
implementing the trade agreements, it would be limited in what 
it could do by the underlying trade agreement itself.
    For example, if Congress decided to better protect U.S. 
businesses and workers by amending the laws governing the L-1 
visa category to require a labor certification or a numerical 
limit before a foreign worker from Singapore could enter the 
U.S., it would not be able to do so. Both are plausible options 
for dealing with perceived abuses in the visa category. The 
trade agreement with Singapore states: ``Neither party may:
          (a) As a condition for temporary entry under 
        paragraph 1, require labor certifications, or other 
        procedures of similar effect; or
          (b) Impose or maintain any numerical restriction 
        relating to temporary entry under paragraph 1.'' [U.S.-
        Singapore Free Trade Agreement, Chapter 11, Annex 11A, 
        section 3, p. 125.]
    These provisions under the trade agreements would 
significantly limit Congress' authority to: (a) establish more 
stringent labor protections when warranted; and (b) limit the 
number of visas that could be issued to nationals of Singapore, 
should it deem that it is in the national interest.
    The negotiation of temporary entry provisions demands 
Congressional oversight and input and public scrutiny, 
especially during a time when national security issues are of 
such paramount concern to us all. Congress should not 
relinquish its traditional authority over immigration power to 
any administration, to other countries or to a panel of 
international arbiters.
    Behind the abstraction, the theories, and the statistics of 
the Free Trade Agreement and its implementing provisions, there 
is one inescapable factor: the real faces of the working men 
and women of this country, and what will happen to them. For 
this reason, we dissent from the Committee's majority views on 
the temporary entry provisions of the U.S.-Singapore Free Trade 
Agreement.

                                   Dianne Feinstein.
                                   Patrick J. Leahy.

                  ADDITIONAL VIEWS OF SENATOR KENNEDY

    I voted in favor of the temporary entry provisions of the 
Singapore and Chile Free Trade Agreements, but I have serious 
concerns about the inclusion of immigration provisions in trade 
agreements.
    The implementing legislation submitted to the Committee 
reflects a substantial improvement over the provisions 
originally shown to the Committee. Many of us had major 
concerns about the lack of worker protections in these 
agreements, but in the several days before S. 1416 and S. 1417 
were transmitted to Congress, bipartisan members of the House 
and Senate Judiciary Committees succeeded in making 
improvements in this legislation to strengthen these 
protections.
    The Constitution clearly gives Congress authority over 
immigration issues and trade agreements should not change 
immigration law without House and Senate approval. The Trade 
Promotion Authority process used to implement free trade 
agreements requires consultations with Congress, but not the 
approval of Congress, amendments to implementing legislation 
are prohibited after the legislation is transmitted to 
Congress.
    Although the number of workers who come to the United 
States from Chile and Singapore under these agreements will be 
relatively low, the Administration intends to negotiate similar 
agreements with Morocco, Central American nations, South 
Africa, Australia and other countries. These agreements with 
Singapore and Chile should not be allowed to become a precedent 
for the Administration to bypass Congress on immigration 
issues.
    Trade agreements are not an acceptable venue for changing 
immigration law unless appropriate approval by Congress has 
been obtained to make such changes.

                                                 Edward M. Kennedy.

                    ADDITIONAL VIEWS OF SENATOR KYL

    I voted for the entry provisions of the U.S.-Chile and 
U.S.-Singapore Free Trade Agreements because I understand the 
importance of passing the legislation to implement these 
underlying trade agreements. They would both be jeopardized if 
forced to be renegotiated. I would like to point out, however, 
that I am troubled that the U.S. Trade Representative 
negotiated the immigration provisions, and proposed substantive 
changes to immigration law, without any real input from the 
Congress.
    Broadly speaking, I am concerned that such U.S. immigration 
law was changed not just by an executive branch of the United 
States, but by other countries. It is also troubling that such 
changes were negotiated by the United States Trade 
Representative (USTR), and not by the U.S. Congress, even 
though Congress is solely responsible for regulating the 
nation's immigration policy, including the admission of foreign 
nationals. Finally, as we prepare to reauthorize the INA's 
expiring H1-B law, changes to the H1-B law included in these 
agreements could serve as an unwelcome precedent for future 
congressional negotiations on the H1-B visa policy.
    I would note on the positive side, that within the 
immigration requirements included in the treaties with Child 
and Singapore, numerous improvements to the implementing 
legislation have been made. The agreements allow for the entry 
of 5,400 Singapore nationals and 1,400 Chile nationals to enter 
the United States under the H1-B visa. The fact that the 
proposed visa carve-outs are included in the existing H1-B 
category, and that the Chile and Singapore numbers must be 
included in the overall H1-B limit, are welcome improvements 
over the original legislation's draft. In the original 
implementing legislation draft, a separate visa category (an 
H1-B(1)) was created that would have prevented any future 
changes in our H1-B laws from affecting the proposed new visa 
for Chile and Singapore nationals. It is also good that any 
future improvements to the H1-B law will also be applicable to 
these visas. I am also pleased that the legislation requires 
that H1-B visas granted to Chile and Singapore nationals be 
included in the nation's overall H1-B cap.
    Other improvements from the original draft include a ban on 
dual intent, in that a potential employee must be able to prove 
that he intends to return home. Current H1-B visa holders do 
not have to prove that they ever intend to return home. Another 
improvement is the requirement that an attestation be completed 
by the sponsoring employer that he sought out available U.S. 
workers before offering the job to the person from Chile or 
Singapore, just as current H1-B laws require. Moreover, an 
additional attestation must be completed after the worker has 
been working here for three years, which strengthens current 
law. The legislation, unlike the original draft, also requires 
that, as does current H1-B law, a fee to be paid by the 
sponsoring employer. Other labor assurances were also included 
in the final bill.
    I am concerned, however, that the implementing legislation 
still strays from our current H1-B law in numerous ways. First, 
under current H1-B policy, workers can only adjust status twice 
and then must adjust status or depart. Workers from Chile and 
Singapore, however, will adjust annually--and, they can adjust 
annually forever. Admittedly, such workers will be required to 
prove that they intend to eventually return to home country but 
a worker could conceivably prove that every year for the next 
25 years. Such workers who seek renewal will also not be 
included in the H1-B cap until the fifth year they apply for a 
renewal of their visa.
    There is also no requirement in the implementing 
legislation that H1-B-dependent employers (15 percent or more 
H1-B workers) in the United States undergo additional 
attestation requirements before being allowed to bring in 
Chilean or Singaporian workers. Current H1-B law requires that 
H1-B-dependent employers show that they are ``actively trying 
to recruit U.S. workers and that they have not laid off workers 
in the last 90 days'' but there is no such requirement included 
for H1-B-dependent employers in the U.S.
    Immigration law is complicated, not only from a legal 
perspective, but from a social and economic perspective. The 
implementing legislation was improved a good deal before it was 
sent to us. But, changes to the immigration policies 
established by Congress should not have been a part of the 
underlying trade negotiations. I would hope that the USTR would 
commit that any future trade agreements negotiated and 
completed under its watch include minimal, and acceptable to 
Congress, changes to our immigration laws. In order to move 
these agreements forward and hopefully complete action on them 
before the August recess, I have voted them out of committee. I 
would urge, again, that in future trade negotiations that we 
concentrate on the issue of trade and leave changes to 
immigration law to the Congress to work on for the good of the 
country. Thank you.

                                                           Jon Kyl.

                  ADDITIONAL VIEWS OF SENATOR SESSIONS

    The legislation that we have before us is deeply troubling. 
The U.S. Trade Representative, by implementing new immigration 
provisions in treaty negotiations, has usurped the role of the 
legislative branch without any consent from this Congress.
    The inclusion of immigration provisions in the Free Trade 
Agreements with Chile and Singapore interferes with Congress' 
plenary power to regulate the nation's immigration policy. This 
power belongs to Congress alone and includes both the temporary 
and permanent admissions of foreign nationals into the United 
States.
    Article I, section 8, clause 4 of the Constitution provides 
that Congress shall have power to ``establish a uniform Rule of 
Naturalization.'' The Supreme Court has long interpreted this 
provision of the Constitution to grant Congress plenary power 
over immigration policy. As the Court found in Galvan v. Press, 
347 U.S. 522, 531 (1954), ``the formulation of policies 
[pertaining to the entry of aliens and their right to remain 
here] is entrusted exclusively to Congress has become about as 
firmly imbedded in the legislative and judicial tissues of our 
body politic as any aspect of our government.'' And, as the 
Court held in Kleindienst v. Mandel, 408 U.S. 753, 766 (1972) 
(quoting Boutilier v. INS, 386 U.S. 123 (1967)), ``[t]he Court 
without exception has sustained Congress' plenary power to make 
rules for the admission of aliens and to exclude those who 
possess those characteristics which Congress has forbidden.''
    As a Senator of this Committee, which has jurisdiction over 
immigration policy, it is my duty to preserve the plenary power 
of Congress to make immigration policy--I am dedicated to 
opposing any erosions of that power.
    At the hearing on Monday, the witness for the U.S. Trade 
Representative, Mrs.Regina Vargo, was asked what legal 
authority the USTR was relying on as a basis for including immigration 
law negotiations in trade treaties. The USTR witness responded by 
differentiating between temporary and permanent entries into the United 
States, stating that because the Chile and Singapore Free Trade 
Agreements only contained provisions regarding temporary entries of 
foreign persons, the USTR was acting within the bounds of its 
negotiating authority. This is not the case.
    By negotiating and including immigration law provisions in 
a binding bi-lateral treaty that Congress does not have the 
power to amend, the USTR has established a dangerous precedent 
that will not be tolerated in future trade agreements.
    It would have been especially appropriate for the USTR to 
ensure that employers who repeatedly use the visa programs 
established under the trade agreements abide by all laws 
governing the entry of the foreign workers.
    The legislation before us today makes the H-1B requirements 
under the Chile and Singapore agreements weaker than the 
requirements for other H-1B workers and may restrict Congress' 
ability to reform the L-1 visa program. Specifically, the 
legislation--
           Permits the admission of up to 5,400 
        professionals from Singapore and up to 1,400 
        professionals from Chile each year;
           Permits the almost unlimited renewal of 
        these visas each year, which could have the effect of 
        turning a temporary entry visa program into a permanent 
        visa program; and
           Permits the entry of dependent spouses and 
        children to join these professionals without their 
        entry into the U.S. being subject to a numerical cap.
    If the U.S. Trade Representative continues to negotiate 
treaty terms such as the ones before us today, I will be unable 
to support them.
    I am concerned with the current unemployment rate among 
U.S. workers and I am dedicated to preserving their jobs. The 
abuse surrounding some immigration visas is contributing to a 
record level of unemployment for U.S. high-tech workers.
    I welcome, when appropriate, foreign industries within our 
borders, and, when appropriate, I fully support foreign workers 
coming here to work. I believe the only way to protect the job 
market for American workers is to preserve Congress' plenary 
power to make laws that affect the ability of foreign workers 
to displace American workers from their jobs.
    Any provision of a future trade agreement that restricts 
the ability of this Congress to protect U.S. jobs will not be 
looked upon favorably.
    I have great respect and appreciation for both Chile and 
Singapore. They are great allies of this country and I want, 
very much, to support the Free Trade Agreements that have been 
negotiated with them. In this single instance, however, my 
support of the trade provisions of the underlying treaty 
agreements should not be read as support of the immigration 
policies included therein or included in the implementing 
legislation.
    We have seen some improvement from the provisions included 
in the initial draft, and I thought the administration had 
heard our message loud and clear. The answers to written follow 
up questions, however, do not indicate that the message was 
clear enough. My support for the trade agreements should not be 
questioned, but the assertion that the USTR now has the 
authority to effectively legislate in the area of immigration 
was detrimental to my support of the immigration provisions 
included herein. I deeply desire to support Chile and Singapore 
and had fully planned on voting for the Free Trade Agreements 
at every turn. However, in light of the answers that we 
received this morning from the USTR--answers to the written 
questions submitted by Senators Feinstein, Kennedy and Graham 
after Monday's hearing--I cannot support the committee vote 
concerning the immigration provisions.
    I continue to rely fully on the verbal guarantees we have 
received that this process will not happen again in treaty 
negotiations. I look forward to working with colleagues from 
each nation, but in particular, the businessmen and women who 
are engaged in the expansion of trade between our respective 
business communities. In Alabama we are indeed fortunate that 
several company's from Singapore found opportunities which they 
developed into thriving businesses. One such business is 
located in my home town of Mobile, Alabama. Mobile Aerospace 
Engineering (MAE) is Singapore owned, but more importantly it 
is a vibrant business employing over 1,000 local workers. MAE 
is a community leader not just in the number of its employees, 
but in its community outlook and community involvement. My 
visits have revealed that Singapore is indeed a valued economic 
partner and trusted ally.
    I believe the Governments of Singapore and Chile clearly 
understand the message my colleagues and I communicated to the 
USTR. Our commitment to trade is not diminished; our message 
however is quite clear.

                                                     Jeff Sessions.

                 ADDITIONAL VIEWS OF SENATOR CHAMBLISS

    [Excerpted from page 36 of the transcript of the hearing 
held on July 14, 2003, by the Committee on the Judiciary 
regarding the temporary entry provisions of the Free Trade 
Agreements with Chile and Singapore.]
    Senator Chambliss. Mr. Chairman, as Chairman of the 
Immigration Subcommittee, Senator Kennedy and I have a hearing 
set next week to discuss H1-B and L1 visa programs. There is 
the potential that after that hearing and subsequent thereto 
and other hearings or whatever, we may be talking about 
reducing the numbers available under those programs, for 
various reasons.
    I think for USTR to come in and to, in effect, legislate 
immigration policy, as Senator Feinstein has said, is wrong. I 
am going to vote for it to get it out of Committee. I am not 
committed to voting for it on the floor.
    It may be that we need USTR to go back--if they are 
planning on, as this article indicates, bringing this type of 
legislation forward in every agreement they negotiate under 
Fast Track, then we have got a problem. And I think it needs to 
be addressed now with the first agreements, and USTR needs to 
know that this Subcommittee has jurisdiction over immigration 
and we intend to assert it.

                                                   Saxby Chambliss.

       IV. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  Pursuant to the requirements of paragraph 12 of Rule XXVI of 
the Standing Rules of the Senate, changes in existing law made 
by the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

SECTION 13031 OF THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 
                                  1985

SEC. 13031. FEES FOR CERTAIN CUSTOMS SERVICES.

  (a) * * *
  (b) Limitations on Fees.--(1) * * *

           *       *       *       *       *       *       *

          (13) No fee may be charged under subsection (a) (9) 
        or (10) with respect to goods that qualify as 
        originating goods under section 202 of the United 
        States-Singapore Free Trade Agreement Implementation 
        Act. Any service for which an exemption from such fee 
        is provided by reason of this paragraph may not be 
        funded with money contained in the Customs User Fee 
        Account.

           *       *       *       *       *       *       *

                              ----------                              

                 SECTION 592 OF THE TARIFF ACT OF 1930

SEC. 592. PENALTIES FOR FRAUD, GROSS NEGLIGENCE, AND NEGLIGENCE.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Maximum Penalties.--
          (1) * * *

           *       *       *       *       *       *       *

          (7) Prior disclosure regarding claims under the 
        united states-singapore free trade agreement.--
                  (A) An importer shall not be subject to 
                penalties under subsection (a) for making an 
                incorrect claim that a good qualifies as an 
                originating good under section 202 of the 
                United States-Singapore Free Trade Agreement 
                Implementation Act if the importer, in 
                accordance with regulations issued by the 
                Secretary of the Treasury, voluntarily and 
                promptly makes a corrected declaration and pays 
                any duties owing.
                  (B) In the regulations referred to in 
                subparagraph (A), the Secretary of the Treasury 
                is authorized to prescribe time periods for 
                making a corrected declaration and paying 
                duties owing under subparagraph (A), if such 
                periods are not shorter than 1 year following 
                the date on which the importer makes the 
                incorrect claim that a good qualifies as an 
                originating good.

           *       *       *       *       *       *       *

                              ----------                              

                  SECTION 202 OF THE TRADE ACT OF 1974

SEC. 202. INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY 
                    COMMISSION.

  (a) Petitions and Adjustment Plans.--
          (1) * * *

           *       *       *       *       *       *       *

          (8) The procedures concerning the release of 
        confidential business information set forth in section 
        332(g) of the Tariff Act of 1930 shall apply with 
        respect to information received by the Commission in 
        the course of investigations conducted under this 
        chapter, part 1 of title III of the North American Free 
        Trade Agreement Implementation Act, [and] title II of 
        the United States-Jordan Free Trade Area Implementation 
        Act, and title III of the United States-Singapore Free 
        Trade Agreement Implementation Act. The Commission may 
        request that parties providing confidential business 
        information furnish nonconfidential summaries thereof 
        or, if such parties indicate that the information in 
        the submission cannot be summarized, the reasons why a 
        summary cannot be provided. If the Commission finds 
        that a request for confidentiality is not warranted and 
        if the party concerned is either unwilling to make the 
        information public or to authorize its disclosure in 
        generalized or summarized form, the Commission may 
        disregard the submission.

           *       *       *       *       *       *       *

           SECTION 214 OF THE IMMIGRATION AND NATIONALITY ACT

                       admission of nonimmigrants

      Sec. 214. (a) * * *
      (g)(1) * * *

           *       *       *       *       *       *       *

[The purported changes made to paragraph (8) of section 214(g) by this 
bill are shown below. Section 402(a)(2)(B) of H.R. 2738 inserts at the 
 end of subsection (g) a new paragraph (8), which is presumed to take 
          effect prior to the execution of these amendments.]

  [(8)(A) The agreement referred to in section 
101(a)(15)(H)(i)(b1) is the United States-Chile Free Trade 
Agreement.]
  (8)(A) The agreements referred to in section 
101(a)(15)(H)(i)(b1) are--
          (i) the United States-Chile Free Trade Agreement; and
          (ii) the United States-Singapore Free Trade 
        Agreement.
  (B)(i) * * *
  [(ii) The annual numerical limitations described in clause 
(i) shall not exceed 1,400 for nationals of Chile for any 
fiscal year. For purposes of this clause, the term ``national'' 
has the meaning given such term in article 14.9 of the United 
States-Chile Free Trade Agreement.]
  (ii) The annual numerical limitations described in clause (i) 
shall not exceed--
          (I) 1,400 for nationals of Chile (as defined in 
        article 14.9 of the United States-Chile Free Trade 
        Agreement) for any fiscal year; and
          (II) 5,400 for nationals of Singapore (as defined in 
        Annex 1A of the United States-Singapore Free Trade 
        Agreement) for any fiscal year.

           *       *       *       *       *       *       *

                                
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