79–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 106–606

TRADE AND DEVELOPMENT ACT OF 2000

MAY 4, 2000.—Ordered to be printed

Mr. ARCHER, from the committee of conference,

submitted the following

CONFERENCE REPORT

[To accompany H.R. 434]

The committee of conference on the disagreeing votes of the

two Houses on the amendments of the Senate to the bill (H.R. 434),

to authorize a new trade and investment policy for sub-Sahara Africa, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:

That the House recede from its disagreement to the amendment of the Senate to the text of the bill and agree to the same

with an amendment as follows:

In lieu of the matter proposed to be inserted by the Senate

amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Trade and Development Act of 2000’’.

(b) TABLE OF CONTENTS.—

TITLE I—EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN

AFRICA

Subtitle A—Trade Policy for Sub-Saharan Africa

Sec. 101. Short title; table of contents.

Sec. 102. Findings.

Sec. 103. Statement of policy.

Sec. 104. Eligibility requirements.

Sec. 105. United States-Sub-Saharan Africa Trade and Economic Cooperation

Forum.

Sec. 106. Reporting requirement.

Sec. 107. Sub-Saharan Africa defined.

Subtitle B—Trade Benefits

Sec. 111. Eligibility for certain benefits.

Sec. 112. Treatment of certain textiles and apparel.

Sec. 113. Protections against transshipment.

Sec. 114. Termination.

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Sec. 115. Clerical amendments.

Sec. 116. Free trade agreements with sub-Saharan African countries.

Sec. 117. Assistant United States Trade Representative for African Affairs.

Subtitle C—Economic Development Related Issues

Sec. 121. Sense of Congress regarding comprehensive debt relief for the world’s poorest countries.

Sec. 122. Executive branch initiatives.

Sec. 123. Overseas Private Investment Corporation initiatives.

Sec. 124. Export-Import Bank initiatives.

Sec. 125. Expansion of the United States and Foreign Commercial Service in subSaharan Africa.

Sec. 126. Donation of air traffic control equipment to eligible sub-Saharan African

countries.

Sec. 127. Additional authorities and increased flexibility to provide assistance under

the Development Fund for Africa.

Sec. 128. Assistance from United States private sector to prevent and reduce HIV/

AIDS in sub-Saharan Africa.

Sec. 129. Sense of the Congress relating to HIV/AIDS crisis in sub-Saharan Africa.

Sec. 130. Study on improving African agricultural practices.

Sec. 131. Sense of the Congress regarding efforts to combat desertification in Africa

and other countries.

TITLE II—TRADE BENEFITS FOR CARIBBEAN BASIN

Subtitle A—Trade Policy for Caribbean Basin Countries

Sec. 201. Short title.

Sec. 202. Findings and policy.

Sec. 203. Definitions.

Subtitle B—Trade Benefits for Caribbean Basin Countries

Sec. 211. Temporary provisions to provide additional trade benefits to certain beneficiary countries.

Sec. 214. Duty-free treatment for certain beverages made with Caribbean rum.

Sec. 215. Meetings of trade ministers and USTR.

TITLE III—NORMAL TRADE RELATIONS

Sec. 301. Normal trade relations for Albania.

Sec. 302. Normal trade relations for Kyrgyzstan.

TITLE IV—OTHER TRADE PROVISIONS

Sec. 401. Report on employment and trade adjustment assistance.

Sec. 402. Trade adjustment assistance.

Sec. 403. Reliquidation of certain nuclear fuel assemblies.

Sec. 404. Reports to the Finance and Ways and Means committees.

Sec. 405. Clarification of section 334 of the Uruguay Round Agreements Act.

Sec. 406. Chief agricultural negotiator.

Sec. 407. Revision of retaliation list or other remedial action.

Sec. 408. Report on trade adjustment assistance for agricultural commodity producers.

Sec. 409. Agricultural trade negotiating objectives and consultations with Congress.

Sec. 410. Entry procedures for foreign trade zone operations.

Sec. 411. Goods made with forced or indentured child labor.

Sec. 412. Worst forms of child labor.

TITLE V—IMPORTS OF CERTAIN WOOL ARTICLES

Sec. 501. Temporary duty reductions.

Sec. 502. Temporary duty suspensions.

Sec. 503. Separate tariff line treatment for wool yarn and men’s or boys’ suits and

suit-type jackets and trousers of worsted wool fabric.

Sec. 504. Monitoring of market conditions and authority to modify tariff reductions.

Sec. 505. Refund of duties paid on imports of certain wool articles.

Sec. 506. Wool research, development, and promotion trust fund.

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TITLE VI—REVENUE PROVISIONS

Sec. 601. Application of denial of foreign tax credit regarding trade and investment

with respect to certain foreign countries.

Sec. 602. Acceleration of cover over payments to Puerto Rico and Virgin Islands.

TITLE I—EXTENSION OF CERTAIN

TRADE BENEFITS TO SUB-SAHARAN

AFRICA

Subtitle A—Trade Policy for Sub-Saharan

Africa

SEC. 101. SHORT TITLE.

This title may be cited as the ‘‘African Growth and Opportunity

Act’’.

SEC. 102. FINDINGS.

Congress finds that—

(1) it is in the mutual interest of the United States and the

countries of sub-Saharan Africa to promote stable and sustainable economic growth and development in sub-Saharan Africa;

(2) the 48 countries of sub-Saharan Africa form a region

richly endowed with both natural and human resources;

(3) sub-Saharan Africa represents a region of enormous economic potential and of enduring political significance to the

United States;

(4) the region has experienced the strengthening of democracy as countries in sub-Saharan Africa have taken steps to encourage broader participation in the political process;

(5) certain countries in sub-Saharan Africa have increased

their economic growth rates, taken significant steps towards liberalizing their economies, and made progress toward regional

economic integration that can have positive benefits for the region;

(6) despite those gains, the per capita income in sub-Saha- ran Africa averages approximately $500 annually;

(7) trade and investment, as the American experience has

shown, can represent powerful tools both for economic development and for encouraging broader participation in a political

process in which political freedom can flourish;

(8) increased trade and investment flows have the greatest

impact in an economic environment in which trading partners

eliminate barriers to trade and capital flows and encourage the

development of a vibrant private sector that offers individual

African citizens the freedom to expand their economic opportunities and provide for their families;

(9) offering the countries of sub-Saharan Africa enhanced

trade preferences will encourage both higher levels of trade and

direct investment in support of the positive economic and political developments under way throughout the region; and

(10) encouraging the reciprocal reduction of trade and investment barriers in Africa will enhance the benefits of trade

and investment for the region as well as enhance commercial

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and political ties between the United States and sub-Saharan

Africa.

SEC. 103. STATEMENT OF POLICY.

Congress supports—

(1) encouraging increased trade and investment between the

United States and sub-Saharan Africa;

(2) reducing tariff and nontariff barriers and other obstacles to sub-Saharan African and United States trade;

(3) expanding United States assistance to sub-Saharan Africa’s regional integration efforts;

(4) negotiating reciprocal and mutually beneficial trade

agreements, including the possibility of establishing free trade

areas that serve the interests of both the United States and the

countries of sub-Saharan Africa;

(5) focusing on countries committed to the rule of law, economic reform, and the eradication of poverty;

(6) strengthening and expanding the private sector in subSaharan Africa, especially enterprises owned by women and

small businesses;

(7) facilitating the development of civil societies and political freedom in sub-Saharan Africa;

(8) establishing a United States-Sub-Saharan Africa Trade

and Economic Cooperation Forum; and

(9) the accession of the countries in sub-Saharan Africa to

the Organization for Economic Cooperation and Development

(OECD) Convention on Combating Bribery of Foreign Public

Officials in International Business Transactions.

SEC. 104. ELIGIBILITY REQUIREMENTS.

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

sub-Saharan African country as an eligible sub-Saharan African

country if the President determines that the country—

(1) has established, or is making continual progress toward

establishing—

(A) a market-based economy that protects private property rights, incorporates an open rules-based trading system, and minimizes government interference in the economy

through measures such as price controls, subsidies, and

government ownership of economic assets;

(B) the rule of law, political pluralism, and the right

to due process, a fair trial, and equal protection under the

law;

(C) the elimination of barriers to United States trade

and investment, including by—

(i) the provision of national treatment and measures to create an environment conducive to domestic

and foreign investment;

(ii) the protection of intellectual property; and

(iii) the resolution of bilateral trade and investment disputes;

(D) economic policies to reduce poverty, increase the

availability of health care and educational opportunities,

expand physical infrastructure, promote the development of

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private enterprise, and encourage the formation of capital

markets through micro-credit or other programs;

(E) a system to combat corruption and bribery, such as

signing and implementing the Convention on Combating

Bribery of Foreign Public Officials in International Business Transactions; and

(F) protection of internationally recognized worker

rights, including the right of association, the right to organize and bargain collectively, a prohibition on the use of

any form of forced or compulsory labor, a minimum age for

the employment of children, and acceptable conditions of

work with respect to minimum wages, hours of work, and

occupational safety and health;

(2) does not engage in activities that undermine United

States national security or foreign policy interests; and

(3) does not engage in gross violations of internationally

recognized human rights or provide support for acts of international terrorism and cooperates in international efforts to

eliminate human rights violations and terrorist activities.

(b) CONTINUING COMPLIANCE.—If the President determines that

an eligible sub-Saharan African country is not making continual

progress in meeting the requirements described in subsection (a)(1),

the President shall terminate the designation of the country made

pursuant to subsection (a).

SEC. 105. UNITED STATES-SUB-SAHARAN AFRICA TRADE AND ECONOMIC COOPERATION FORUM.

(a) DECLARATION OF POLICY.—The President shall convene annual high-level meetings between appropriate officials of the United

States Government and officials of the governments of sub-Saharan

African countries in order to foster close economic ties between the

United States and sub-Saharan Africa.

(b) ESTABLISHMENT.—Not later than 12 months after the date

of the enactment of this Act, the President, after consulting with

Congress and the governments concerned, shall establish a United

States-Sub-Saharan Africa Trade and Economic Cooperation

Forum (in this section referred to as the ‘‘Forum’’).

(c) REQUIREMENTS.—In creating the Forum, the President shall

meet the following requirements:

(1) The President shall direct the Secretary of Commerce,

the Secretary of the Treasury, the Secretary of State, and the

United States Trade Representative to host the first annual

meeting with their counterparts from the governments of subSaharan African countries eligible under section 104, and those

sub-Saharan African countries that the President determines

are taking substantial positive steps towards meeting the eligibility requirements in section 104. The purpose of the meeting

shall be to discuss expanding trade and investment relations

between the United States and sub-Saharan Africa and the implementation of this title including encouraging joint ventures

between small and large businesses. The President shall also

direct the Secretaries and the United States Trade Representative to invite to the meeting representatives from appropriate

sub-Saharan African regional organizations and government officials from other appropriate countries in sub-Saharan Africa.

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(2)(A) The President, in consultation with the Congress,

shall encourage United States nongovernmental organizations

to host annual meetings with nongovernmental organizations

from sub-Saharan Africa in conjunction with the annual meetings of the Forum for the purpose of discussing the issues described in paragraph (1).

(B) The President, in consultation with the Congress, shall

encourage United States representatives of the private sector to

host annual meetings with representatives of the private sector

from sub-Saharan Africa in conjunction with the annual meetings of the Forum for the purpose of discussing the issues described in paragraph (1).

(3) The President shall, to the extent practicable, meet with

the heads of governments of sub-Saharan African countries eligible under section 104, and those sub-Saharan African countries that the President determines are taking substantial positive steps toward meeting the eligibility requirements in section

104, not less than once every 2 years for the purpose of discussing the issues described in paragraph (1). The first such

meeting should take place not later than 12 months after the

date of the enactment of this Act.

(d) DISSEMINATION OF INFORMATION BY USIS.—In order to assist in carrying out the purposes of the Forum, the United States Information Service shall disseminate regularly, through multiple

media, economic information in support of the free market economic

reforms described in this title.

(e) HIV/AIDS EFFECT ON THE SUB-SAHARAN AFRICAN WORKFORCE.—In selecting issues of common interest to the United StatesSub-Saharan Africa Trade and Economic Cooperation Forum, the

President shall instruct the United States delegates to the Forum to

promote a review by the Forum of the HIV/AIDS epidemic in each

sub-Saharan African country and the effect of the HIV/AIDS epidemic on economic development in each country.

SEC. 106. REPORTING REQUIREMENT.

The President shall submit to the Congress, not later than 1

year after the date of the enactment of this Act, and annually thereafter through 2008, a comprehensive report on the trade and investment policy of the United States for sub-Saharan Africa, and on the

implementation of this title and the amendments made by this title.

SEC. 107. SUB-SAHARAN AFRICA DEFINED.

For purposes of this title, the terms ‘‘sub-Saharan Africa’’, ‘‘subSaharan African country’’, ‘‘country in sub-Saharan Africa’’, and

‘‘countries in sub-Saharan Africa’’ refer to the following or any successor political entities:

Republic of Angola (Angola).

Republic of Benin (Benin).

Republic of Botswana (Botswana).

Burkina Faso (Burkina).

Republic of Burundi (Burundi).

Republic of Cameroon (Cameroon).

Republic of Cape Verde (Cape Verde).

Central African Republic.

Republic of Chad (Chad).

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Federal Islamic Republic of the Comoros (Comoros).

Democratic Republic of Congo.

Republic of the Congo (Congo).

Republic of Coˆte d’Ivoire (Coˆte d’Ivoire).

Republic of Djibouti (Djibouti).

Republic of Equatorial Guinea (Equatorial Guinea).

State of Eritrea (Eritrea).

Ethiopia.

Gabonese Republic (Gabon).

Republic of the Gambia (Gambia).

Republic of Ghana (Ghana).

Republic of Guinea (Guinea).

Republic of Guinea-Bissau (Guinea-Bissau).

Republic of Kenya (Kenya).

Kingdom of Lesotho (Lesotho).

Republic of Liberia (Liberia).

Republic of Madagascar (Madagascar).

Republic of Malawi (Malawi).

Republic of Mali (Mali).

Islamic Republic of Mauritania (Mauritania).

Republic of Mauritius (Mauritius).

Republic of Mozambique (Mozambique).

Republic of Namibia (Namibia).

Republic of Niger (Niger).

Federal Republic of Nigeria (Nigeria).

Republic of Rwanda (Rwanda).

Democratic Republic of Sao Tome ́ and Principe (Sao Tome ́

and Principe).

Republic of Senegal (Senegal).

Republic of Seychelles (Seychelles).

Republic of Sierra Leone (Sierra Leone).

Somalia.

Republic of South Africa (South Africa).

Republic of Sudan (Sudan).

Kingdom of Swaziland (Swaziland).

United Republic of Tanzania (Tanzania).

Republic of Togo (Togo).

Republic of Uganda (Uganda).

Republic of Zambia (Zambia).

Republic of Zimbabwe (Zimbabwe).

Subtitle B—Trade Benefits

SEC. 111. ELIGIBILITY FOR CERTAIN BENEFITS.

(a) IN GENERAL.—Title V of the Trade Act of 1974 is amended

by inserting after section 506 the following new section:

‘‘SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR

CERTAIN BENEFITS.

‘‘(a) AUTHORITY TO DESIGNATE.—

‘‘(1) IN GENERAL.—Notwithstanding any other provision of

law, the President is authorized to designate a country listed in

section 107 of the African Growth and Opportunity Act as a

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beneficiary sub-Saharan African country eligible for the benefits

described in subsection (b)—

‘‘(A) if the President determines that the country meets

the eligibility requirements set forth in section 104 of that

Act, as such requirements are in effect on the date of enactment of that Act; and

‘‘(B) subject to the authority granted to the President

under subsections (a), (d), and (e) of section 502, if the

country otherwise meets the eligibility criteria set forth in

section 502.

‘‘(2) MONITORING AND REVIEW OF CERTAIN COUNTRIES.—

The President shall monitor, review, and report to Congress annually on the progress of each country listed in section 107 of

the African Growth and Opportunity Act in meeting the requirements described in paragraph (1) in order to determine the current or potential eligibility of each country to be designated as

a beneficiary sub-Saharan African country for purposes of this

section. The President’s determinations, and explanations of

such determinations, with specific analysis of the eligibility requirements described in paragraph (1)(A), shall be included in

the annual report required by section 106 of the African Growth

and Opportunity Act.

‘‘(3) CONTINUING COMPLIANCE.—If the President determines

that a beneficiary sub-Saharan African country is not making

continual progress in meeting the requirements described in

paragraph (1), the President shall terminate the designation of

that country as a beneficiary sub-Saharan African country for

purposes of this section, effective on January 1 of the year following the year in which such determination is made.

‘‘(b) PREFERENTIAL TARIFF TREATMENT FOR CERTAIN ARTICLES.—

‘‘(1) IN GENERAL.—The President may provide duty-free

treatment for any article described in section 503(b)(1)(B)

through (G) that is the growth, product, or manufacture of a

beneficiary sub-Saharan African country described in subsection (a), if, after receiving the advice of the International

Trade Commission in accordance with section 503(e), the President determines that such article is not import-sensitive in the

context of imports from beneficiary sub-Saharan African countries.

‘‘(2) RULES OF ORIGIN.—The duty-free treatment provided

under paragraph (1) shall apply to any article described in that

paragraph that meets the requirements of section 503(a)(2), except that—

‘‘(A) if the cost or value of materials produced in the

customs territory of the United States is included with respect to that article, an amount not to exceed 15 percent of

the appraised value of the article at the time it is entered

that is attributed to such United States cost or value may

be applied toward determining the percentage referred to in

subparagraph (A) of section 503(a)(2); and

‘‘(B) the cost or value of the materials included with respect to that article that are produced in 1 or more beneVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00008 Fmt 6659 Sfmt 6603 E:\HR\OC\A606HR.004 pfrm02 PsN: A606HR
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ficiary sub-Saharan African countries shall be applied in

determining such percentage.

‘‘(c) BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES, ETC.— For purposes of this title, the terms ‘beneficiary sub-Saharan African country’ and ‘beneficiary sub-Saharan African countries’ mean

a country or countries listed in section 107 of the African Growth

and Opportunity Act that the President has determined is eligible

under subsection (a) of this section.’’.

(b) WAIVER OF COMPETITIVE NEED LIMITATION.—Section

503(c)(2)(D) of the Trade Act of 1974 (19 U.S.C. 2463(c)(2)(D)) is

amended to read as follows:

‘‘(D) LEAST-DEVELOPED BENEFICIARY DEVELOPING

COUNTRIES AND BENEFICIARY SUB-SAHARAN AFRICAN COUN- TRIES.—Subparagraph (A) shall not apply to any least-developed beneficiary developing country or any beneficiary

sub-Saharan African country.’’.

SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.

(a) PREFERENTIAL TREATMENT.—Textile and apparel articles

described in subsection (b) that are imported directly into the customs territory of the United States from a beneficiary sub-Saharan

African country described in section 506A(c) of the Trade Act of

1974, shall enter the United States free of duty and free of any

quantitative limitations in accordance with the provisions set forth

in subsection (b), if the country has satisfied the requirements set

forth in section 113.

(b) PRODUCTS COVERED.—The preferential treatment described

in subsection (a) shall apply only to the following textile and apparel products:

(1) APPAREL ARTICLES ASSEMBLED IN BENEFICIARY SUB-SA- HARAN AFRICAN COUNTRIES.—Apparel articles assembled in 1 or

more beneficiary sub-Saharan African countries from fabrics

wholly formed and cut in the United States, from yarns wholly

formed in the United States, that are—

(A) entered under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States; or

(B) entered under chapter 61 or 62 of the Harmonized

Tariff Schedule of the United States, if, after such assembly, the articles would have qualified for entry under subheading 9802.00.80 of the Harmonized Tariff Schedule of

the United States but for the fact that the articles were embroidered or subjected to stone-washing, enzyme-washing,

acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, screen printing, or other similar processes.

(2) APPAREL ARTICLES CUT AND ASSEMBLED IN BENEFICIARY

SUB-SAHARAN AFRICAN COUNTRIES.—Apparel articles cut in 1 or

more beneficiary sub-Saharan African countries from fabric

wholly formed in the United States from yarns wholly formed

in the United States, if such articles are assembled in 1 or more

beneficiary sub-Saharan African countries with thread formed

in the United States.

(3) APPAREL ARTICLES ASSEMBLED FROM REGIONAL AND

OTHER FABRIC.—Apparel articles wholly assembled in 1 or more

beneficiary sub-Saharan African countries from fabric wholly

formed in 1 or more beneficiary sub-Saharan African countries

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from yarn originating either in the United States or 1 or more

beneficiary sub-Saharan African countries, subject to the following:

(A) LIMITATIONS ON BENEFITS.—

(i) IN GENERAL.—Preferential treatment under this

paragraph shall be extended in the 1-year period beginning on October 1, 2000, and in each of the 7 succeeding 1-year periods, to imports of apparel articles in

an amount not to exceed the applicable percentage of

the aggregate square meter equivalents of all apparel

articles imported into the United States in the preceding 12-month period for which data are available.

(ii) APPLICABLE PERCENTAGE.—For purposes of this

subparagraph, the term ‘‘applicable percentage’’ means

1.5 percent for the 1-year period beginning October 1,

2000, increased in each of the seven succeeding 1-year

periods by equal increments, so that for the period beginning October 1, 2007, the applicable percentage does

not exceed 3.5 percent.

(B) SPECIAL RULE FOR LESSER DEVELOPED COUNTRIES.—

(i) IN GENERAL.—Subject to subparagraph (A),

preferential treatment shall be extended through September 30, 2004, for apparel articles wholly assembled

in 1 or more lesser developed beneficiary sub-Saharan

African countries regardless of the country of origin of

the fabric used to make such articles.

(ii) LESSER DEVELOPED BENEFICIARY SUB-SAHARAN

AFRICAN COUNTRY.—For purposes of this subparagraph

the term ‘‘lesser developed beneficiary sub-Saharan African country’’ means a beneficiary sub-Saharan African country that had a per capita gross national product of less than $1,500 a year in 1998, as measured by

the World Bank.

(C) SURGE MECHANISM.—

(i) IMPORT MONITORING.—The Secretary of Commerce shall monitor imports of articles described in

this paragraph on a monthly basis to determine if

there has been a surge in imports of such articles. In

order to permit public access to preliminary international trade data and to facilitate the early identification of potentially disruptive import surges, the Director of the Office of Management and Budget may

grant an exception to the publication dates established

for the release of data on United States international

trade in covered articles, if the Director notifies Congress of the early release of the data.

(ii) DETERMINATION OF DAMAGE OR THREAT THEREOF.—Whenever the Secretary of Commerce determines,

based on the data described in clause (i), or pursuant

to a written request made by an interested party, that

there has been a surge in imports of an article described in this paragraph from a beneficiary sub-Saharan African country, the Secretary shall determine

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whether such article from such country is being imported in such increased quantities as to cause serious

damage, or threat thereof, to the domestic industry producing a like or directly competitive article. If the Secretary’s determination is affirmative, the President

shall suspend the duty-free treatment provided for such

article under this paragraph. If the inquiry is initiated

at the request of an interested party, the Secretary

shall make the determination within 60 days after the

date of the request.

(iii) FACTORS TO CONSIDER.—In determining

whether a domestic industry has been seriously damaged, or is threatened with serious damage, the Secretary shall examine the effect of the imports on relevant economic indicators such as domestic production,

sales, market share, capacity utilization, inventories,

employment, profits, exports, prices, and investment.

(iv) PROCEDURE.—

(I) INITIATION.—The Secretary of Commerce

shall initiate an inquiry within 10 days after receiving a written request and supporting information for an inquiry from an interested party. Notice

of initiation of an inquiry shall be published in the

Federal Register.

(II) PARTICIPATION BY INTERESTED PARTIES.—

The Secretary of Commerce shall establish procedures to ensure participation in the inquiry by interested parties.

(III) NOTICE OF DETERMINATION.—The Secretary shall publish the determination described in

clause (ii) in the Federal Register.

(IV) INFORMATION AVAILABLE.—If relevant information is not available on the record or any

party withholds information that has been requested by the Secretary, the Secretary shall make

the determination on the basis of the facts available. When the Secretary relies on information submitted in the inquiry as facts available, the Secretary shall, to the extent practicable, corroborate

the information from independent sources that are

reasonably available to the Secretary.

(v) INTERESTED PARTY.—For purposes of this subparagraph, the term ‘‘interested party’’ means any producer of a like or directly competitive article, a certified

union or recognized union or group of workers which

is representative of an industry engaged in the manufacture, production, or sale in the United States of a

like or directly competitive article, a trade or business

association representing producers or sellers of like or

directly competitive articles, producers engaged in the

production of essential inputs for like or directly competitive articles, a certified union or group of workers

which is representative of an industry engaged in the

manufacture, production, or sale of essential inputs for

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the like or directly competitive article, or a trade or

business association representing companies engaged

in the manufacture, production or sale of such essential

inputs.

(4) SWEATERS KNIT-TO-SHAPE FROM CASHMERE OR MERINO

WOOL.—

(A) CASHMERE.—Sweaters, in chief weight of cashmere,

knit-to-shape in 1 or more beneficiary sub-Saharan African

countries and classifiable under subheading 6110.10 of the

Harmonized Tariff Schedule of the United States.

(B) MERINO WOOL.—Sweaters, 50 percent or more by

weight of wool measuring 18.5 microns in diameter or

finer, knit-to-shape in 1 or more beneficiary sub-Saharan

African countries.

(5) APPAREL ARTICLES WHOLLY ASSEMBLED FROM FABRIC OR

YARN NOT AVAILABLE IN COMMERCIAL QUANTITIES IN THE

UNITED STATES.—

(A) IN GENERAL.—Apparel articles that are both cut (or

knit-to-shape) and sewn or otherwise assembled in 1 or

more beneficiary sub-Saharan African countries, from fabric or yarn that is not formed in the United States or a beneficiary sub-Saharan African country, to the extent that

such fabrics or yarns would be eligible for preferential

treatment, without regard to the source of the fabric or

yarn, under Annex 401 to the NAFTA.

(B) ADDITIONAL APPAREL ARTICLES.—At the request of

any interested party and subject to the following requirements, the President is authorized to proclaim the treatment provided under subparagraph (A) for yarns or fabrics

not described in subparagraph (A) if—

(i) the President determines that such yarns or fabrics cannot be supplied by the domestic industry in

commercial quantities in a timely manner;

(ii) the President has obtained advice regarding

the proposed action from the appropriate advisory committee established under section 135 of the Trade Act

of 1974 (19 U.S.C. 2155) and the United States International Trade Commission;

(iii) within 60 calendar days after the request, the

President has submitted a report to the Committee on

Ways and Means of the House of Representatives and

the Committee on Finance of the Senate that sets

forth—

(I) the action proposed to be proclaimed and

the reasons for such action; and

(II) the advice obtained under clause (ii);

(iv) a period of 60 calendar days, beginning with

the first day on which the President has met the requirements of subclauses (I) and (II) of clause (iii), has

expired; and

(v) the President has consulted with such committees regarding the proposed action during the period

referred to in clause (iii).

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(6) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES.—A

handloomed, handmade, or folklore article of a beneficiary subSaharan African country or countries that is certified as such

by the competent authority of such beneficiary country or countries. For purposes of this paragraph, the President, after consultation with the beneficiary sub-Saharan African country or

countries concerned, shall determine which, if any, particular

textile and apparel goods of the country (or countries) shall be

treated as being handloomed, handmade, or folklore articles.

(c) TREATMENT OF QUOTAS ON TEXTILE AND APPAREL IMPORTS

FROM KENYA AND MAURITIUS.—The President shall eliminate the

existing quotas on textile and apparel articles imported into the

United States—

(1) from Kenya within 30 days after that country adopts an

effective visa system to prevent unlawful transshipment of textile and apparel articles and the use of counterfeit documents

relating to the importation of the articles into the United States;

and

(2) from Mauritius within 30 days after that country

adopts such a visa system.

The Customs Service shall provide the necessary technical assistance to Kenya and Mauritius in the development and implementation of the visa systems.

(d) SPECIAL RULES.—

(1) FINDINGS AND TRIMMINGS.—

(A) GENERAL RULE.—An article otherwise eligible for

preferential treatment under this section shall not be ineligible for such treatment because the article contains findings or trimmings of foreign origin, if the value of such

findings and trimmings do not exceed 25 percent of the cost

of the components of the assembled article. Examples of

findings and trimmings are sewing thread, hooks and eyes,

snaps, buttons, ‘bow buds’, decorative lace trim, elastic

strips, and zippers, including zipper tapes and labels. Elastic strips are considered findings or trimmings only if they

are each less than 1 inch in width and used in the production of brassieres.

(B) CERTAIN INTERLININGS.—

(i) GENERAL RULE.—An article otherwise eligible

for preferential treatment under this section shall not

be ineligible for such treatment because the article contains certain interlinings of foreign origin, if the value

of such interlinings (and any findings and trimmings)

does not exceed 25 percent of the cost of the components

of the assembled article.

(ii) INTERLININGS DESCRIBED.—Interlinings eligible for the treatment described in clause (i) include

only a chest type plate, a ‘‘hymo’’ piece, or ‘‘sleeve header’’, of woven or weft-inserted warp knit construction

and of coarse animal hair or man-made filaments.

(iii) TERMINATION OF TREATMENT.—The treatment

described in this subparagraph shall terminate if the

President makes a determination that United States

14

manufacturers are producing such interlinings in the

United States in commercial quantities.

(C) EXCEPTION.—In the case of an article described in

subsection (b)(2), sewing thread shall not be treated as

findings or trimmings under subparagraph (A).

(2) DE MINIMIS RULE.—An article otherwise eligible for

preferential treatment under this section shall not be ineligible

for such treatment because the article contains fibers or yarns

not wholly formed in the United States or 1 or more beneficiary

sub-Saharan African countries if the total weight of all such fibers and yarns is not more than 7 percent of the total weight

of the article.

(e) DEFINITIONS.—In this section and section 113:

(1) AGREEMENT ON TEXTILES AND CLOTHING.—The term

‘‘Agreement on Textiles and Clothing’’ means the Agreement on

Textiles and Clothing referred to in section 101(d)(4) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).

(2) BENEFICIARY SUB-SAHARAN AFRICAN COUNTRY, ETC.—

The terms ‘‘beneficiary sub-Saharan African country’’ and ‘‘beneficiary sub-Saharan African countries’’ have the same meaning

as such terms have under section 506A(c) of the Trade Act of

1974.

(3) NAFTA.—The term ‘‘NAFTA’’ means the North American Free Trade Agreement entered into between the United

States, Mexico, and Canada on December 17, 1992.

(f) EFFECTIVE DATE.—This section takes effect on October 1,

2000, and shall remain in effect through September 30, 2008.

SEC. 113. PROTECTIONS AGAINST TRANSSHIPMENT.

(a) PREFERENTIAL TREATMENT CONDITIONED ON ENFORCEMENT

MEASURES.—

(1) IN GENERAL.—The preferential treatment under section

112(a) shall not be provided to textile and apparel articles that

are imported from a beneficiary sub-Saharan African country

unless that country—

(A) has adopted an effective visa system, domestic laws,

and enforcement procedures applicable to covered articles to

prevent unlawful transshipment of the articles and the use

of counterfeit documents relating to the importation of the

articles into the United States;

(B) has enacted legislation or promulgated regulations

that would permit United States Customs Service

verification teams to have the access necessary to investigate thoroughly allegations of transshipment through

such country;

(C) agrees to report, on a timely basis, at the request

of the United States Customs Service, on the total exports

from and imports into that country of covered articles, consistent with the manner in which the records are kept by

that country;

(D) will cooperate fully with the United States to address and take action necessary to prevent circumvention as

provided in Article 5 of the Agreement on Textiles and

Clothing;

15

(E) agrees to require all producers and exporters of covered articles in that country to maintain complete records

of the production and the export of covered articles, including materials used in the production, for at least 2 years

after the production or export (as the case may be); and

(F) agrees to report, on a timely basis, at the request

of the United States Customs Service, documentation establishing the country of origin of covered articles as used by

that country in implementing an effective visa system.

(2) COUNTRY OF ORIGIN DOCUMENTATION.—For purposes of

paragraph (1)(F), documentation regarding the country of origin of the covered articles includes documentation such as production records, information relating to the place of production,

the number and identification of the types of machinery used in

production, the number of workers employed in production, and

certification from both the manufacturer and the exporter.

(b) CUSTOMS PROCEDURES AND ENFORCEMENT.—

(1) IN GENERAL.—

(A) REGULATIONS.—Any importer that claims preferential treatment under section 112 shall comply with customs procedures similar in all material respects to the requirements of Article 502(1) of the NAFTA as implemented

pursuant to United States law, in accordance with regulations promulgated by the Secretary of the Treasury.

(B) DETERMINATION.—

(i) IN GENERAL.—In order to qualify for the preferential treatment under section 112 and for a Certificate of Origin to be valid with respect to any article for

which such treatment is claimed, there shall be in effect a determination by the President that each country

described in clause (ii)—

(I) has implemented and follows, or

(II) is making substantial progress toward implementing and following,

procedures and requirements similar in all material respects to the relevant procedures and requirements

under chapter 5 of the NAFTA.

(ii) COUNTRY DESCRIBED.—A country is described

in this clause if it is a beneficiary sub-Saharan African

country—

(I) from which the article is exported, or

(II) in which materials used in the production

of the article originate or in which the article or

such materials, undergo production that contributes to a claim that the article is eligible for preferential treatment.

(2) CERTIFICATE OF ORIGIN.—The Certificate of Origin that

otherwise would be required pursuant to the provisions of paragraph (1) shall not be required in the case of an article imported under section 112 if such Certificate of Origin would not

be required under Article 503 of the NAFTA (as implemented

pursuant to United States law), if the article were imported

from Mexico.

16

(3) PENALTIES FOR EXPORTERS.—If the President determines, based on sufficient evidence, that an exporter has engaged in transshipment as defined in paragraph (4), then the

President shall deny for a period of 5 years all benefits under

section 112 to such exporter, any successor of such exporter, and

any other entity owned or operated by the principal of the exporter.

(4) TRANSSHIPMENT DESCRIBED.—Transshipment within

the meaning of this subsection has occurred when preferential

treatment for a textile or apparel article under this Act has been

claimed on the basis of material false information concerning

the country of origin, manufacture, processing, or assembly of

the article or any of its components. For purposes of this paragraph, false information is material if disclosure of the true information would mean or would have meant that the article is

or was ineligible for preferential treatment under section 112.

(5) MONITORING AND REPORTS TO CONGRESS.—The Customs Service shall monitor and the Commissioner of Customs

shall submit to Congress, not later than March 31 of each year,

a report on the effectiveness of the visa systems and the implementation of legislation and regulations described in subsection

(a) and on measures taken by countries in sub-Saharan Africa

which export textiles or apparel to the United States to prevent

circumvention as described in Article 5 of the Agreement on

Textiles and Clothing.

(c) CUSTOMS SERVICE ENFORCEMENT.—The Customs Service

shall—

(1) make available technical assistance to the beneficiary

sub-Saharan African countries—

(A) in the development and implementation of visa systems, legislation, and regulations described in subsection

(a)(1)(A); and

(B) to train their officials in anti-transshipment enforcement;

(2) send production verification teams to at least 4 beneficiary sub-Saharan African countries each year; and

(3) to the extent feasible, place beneficiary sub-Saharan African countries on the Electronic Visa (ELVIS) program.

(d) AUTHORIZATION OF APPROPRIATIONS.—There is authorized

to be appropriated to carry out subsection (c) the sum of $5,894,913.

SEC. 114. TERMINATION.

Title V of the Trade Act of 1974 is amended by inserting after

section 506A the following new section:

‘‘SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN

COUNTRIES.

‘‘In the case of a beneficiary sub-Saharan African country, as

defined in section 506A(c), duty-free treatment provided under this

title shall remain in effect through September 30, 2008.’’.

SEC. 115. CLERICAL AMENDMENTS.

The table of contents for title V of the Trade Act of 1974 is

amended by inserting after the item relating to section 506 the following new items:

17

‘‘Sec. 506A. Designation of sub-Saharan African countries for certain benefits.

‘‘Sec. 506B. Termination of benefits for sub-Saharan African countries.’’.

SEC. 116. FREE TRADE AGREEMENTS WITH SUB-SAHARAN AFRICAN

COUNTRIES.

(a) DECLARATION OF POLICY.—Congress declares that free trade

agreements should be negotiated, where feasible, with interested

countries in sub-Saharan Africa, in order to serve as the catalyst for

increasing trade between the United States and sub-Saharan Africa

and increasing private sector investment in sub-Saharan Africa.

(b) PLAN REQUIREMENT.—

(1) IN GENERAL.—The President, taking into account the

provisions of the treaty establishing the African Economic Community and the willingness of the governments of sub-Saharan

African countries to engage in negotiations to enter into free

trade agreements, shall develop a plan for the purpose of negotiating and entering into 1 or more trade agreements with interested beneficiary sub-Saharan African countries.

(2) ELEMENTS OF PLAN.—The plan shall include the following:

(A) The specific objectives of the United States with respect to negotiations described in paragraph (1) and a suggested timetable for achieving those objectives.

(B) The benefits to both the United States and the relevant sub-Saharan African countries with respect to the applicable free trade agreement or agreements.

(C) A mutually agreed-upon timetable for the negotiations.

(D) The implications for and the role of regional and

sub-regional organizations in sub-Saharan Africa with respect to such free trade agreement or agreements.

(E) Subject matter anticipated to be covered by the negotiations and United States laws, programs, and policies,

as well as the laws of participating eligible African countries and existing bilateral and multilateral and economic

cooperation and trade agreements, that may be affected by

the agreement or agreements.

(F) Procedures to ensure the following:

(i) Adequate consultation with the Congress and

the private sector during the negotiations.

(ii) Consultation with the Congress regarding all

matters relating to implementation of the agreement or

agreements.

(iii) Approval by the Congress of the agreement or

agreements.

(iv) Adequate consultations with the relevant African governments and African regional and subregional

intergovernmental organizations during the negotiation

of the agreement or agreements.

(c) REPORTING REQUIREMENT.—Not later than 12 months after

the date of the enactment of this Act, the President shall prepare

and transmit to the Congress a report containing the plan developed

pursuant to subsection (b).

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SEC. 117. ASSISTANT UNITED STATES TRADE REPRESENTATIVE FOR

AFRICAN AFFAIRS.

It is the sense of the Congress that—

(1) the position of Assistant United States Trade Representative for African Affairs is integral to the United States commitment to increasing United States-sub-Saharan African trade

and investment;

(2) the position of Assistant United States Trade Representative for African Affairs should be maintained within the Office

of the United States Trade Representative to direct and coordinate interagency activities on United States-Africa trade policy

and investment matters and serve as—

(A) a primary point of contact in the executive branch

for those persons engaged in trade between the United

States and sub-Saharan Africa; and

(B) the chief advisor to the United States Trade Representative on issues of trade and investment with Africa;

and

(3) the United States Trade Representative should have

adequate funding and staff to carry out the duties of the Assistant United States Trade Representative for African Affairs described in paragraph (2), subject to the availability of appropriations.

Subtitle C—Economic Development Related

Issues

SEC. 121. SENSE OF CONGRESS REGARDING COMPREHENSIVE DEBT

RELIEF FOR THE WORLD’S POOREST COUNTRIES.

(a) FINDINGS.—Congress makes the following findings:

(1) The burden of external debt has become a major impediment to economic growth and poverty reduction in many of the

world’s poorest countries.

(2) Until recently, the United States Government and other

official creditors sought to address this problem by rescheduling

loans and in some cases providing limited debt reduction.

(3) Despite such efforts, the cumulative debt of many of the

world’s poorest countries continued to grow beyond their capacity to repay.

(4) In 1997, the Group of Seven, the World Bank, and the

International Monetary Fund adopted the Heavily Indebted

Poor Countries Initiative (HIPC), a commitment by the international community that all multilateral and bilateral creditors, acting in a coordinated and concerted fashion, would reduce poor country debt to a sustainable level.

(5) The HIPC Initiative is currently undergoing reforms to

address concerns raised about country conditionality, the

amount of debt forgiven, and the allocation of savings realized

through the debt forgiveness program to ensure that the Initiative accomplishes the goals of economic growth and poverty alleviation in the world’s poorest countries.

(b) SENSE OF CONGRESS.—It is the sense of Congress that—

19

(1) Congress and the President should work together, without undue delay and in concert with the international community, to make comprehensive debt relief available to the world’s

poorest countries in a manner that promotes economic growth

and poverty alleviation;

(2) this program of bilateral and multilateral debt relief

should be designed to strengthen and expand the private sector,

encourage increased trade and investment, support the development of free markets, and promote broad-scale economic growth

in beneficiary countries;

(3) this program of debt relief should also support the

adoption of policies to alleviate poverty and to ensure that benefits are shared widely among the population, such as through

initiatives to advance education, improve health, combat AIDS,

and promote clean water and environmental protection;

(4) these debt relief agreements should be designed and implemented in a transparent manner and with the broad participation of the citizenry of the debtor country and should ensure

that country circumstances are adequately taken into account;

(5) no country should receive the benefits of debt relief if

that country does not cooperate with the United States on terrorism or narcotics enforcement, is a gross violator of the

human rights of its citizens, or is engaged in conflict or spends

excessively on its military; and

(6) in order to prevent adverse impact on a key industry in

many developing countries, the International Monetary Fund

must mobilize its own resources for providing debt relief to eligible countries without allowing gold to reach the open market,

or otherwise adversely affecting the market price of gold.

SEC. 122. EXECUTIVE BRANCH INITIATIVES.

(a) STATEMENT OF THE CONGRESS.—The Congress recognizes

that the stated policy of the executive branch in 1997, the ‘‘Partnership for Growth and Opportunity in Africa’’ initiative, is a step toward the establishment of a comprehensive trade and development

policy for sub-Saharan Africa. It is the sense of the Congress that

this Partnership is a companion to the policy goals set forth in this

title.

(b) TECHNICAL ASSISTANCE TO PROMOTE ECONOMIC REFORMS

AND DEVELOPMENT.—In addition to continuing bilateral and multilateral economic and development assistance, the President shall

target technical assistance toward—

(1) developing relationships between United States firms

and firms in sub-Saharan Africa through a variety of business

associations and networks;

(2) providing assistance to the governments of sub-Saharan

African countries to—

(A) liberalize trade and promote exports;

(B) bring their legal regimes into compliance with the

standards of the World Trade Organization in conjunction

with membership in that Organization;

(C) make financial and fiscal reforms; and

(D) promote greater agribusiness linkages;

(3) addressing such critical agricultural policy issues as

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ribusiness investment in processing and transporting agricultural commodities;

(4) increasing the number of reverse trade missions to

growth-oriented countries in sub-Saharan Africa;

(5) increasing trade in services; and

(6) encouraging greater sub-Saharan African participation

in future negotiations in the World Trade Organization on services and making further commitments in their schedules to the

General Agreement on Trade in Services in order to encourage

the removal of tariff and nontariff barriers.

SEC. 123. OVERSEAS PRIVATE INVESTMENT CORPORATION INITIATIVES.

(a) INITIATION OF FUNDS.—It is the sense of the Congress that

the Overseas Private Investment Corporation should exercise the authorities it has to initiate an equity fund or equity funds in support

of projects in the countries in sub-Saharan Africa, in addition to the

existing equity fund for sub-Saharan Africa created by the Corporation.

(b) STRUCTURE AND TYPES OF FUNDS.— (1) STRUCTURE.—Each fund initiated under subsection (a)

should be structured as a partnership managed by professional

private sector fund managers and monitored on a continuing

basis by the Corporation.

(2) CAPITALIZATION.—Each fund should be capitalized with

a combination of private equity capital, which is not guaranteed

by the Corporation, and debt for which the Corporation provides guaranties.

(3) INFRASTRUCTURE FUND.—1 or more of the funds, with

combined assets of up to $500,000,000, should be used in support of infrastructure projects in countries of sub-Saharan Africa.

(4) EMPHASIS.—The Corporation shall ensure that the

funds are used to provide support in particular to women entrepreneurs and to innovative investments that expand opportunities for women and maximize employment opportunities for

poor individuals.

(c) OVERSEAS PRIVATE INVESTMENT CORPORATION.—

(1) INVESTMENT ADVISORY COUNCIL.—Section 233 of the

Foreign Assistance Act of 1961 is amended by adding at the

end the following:

‘‘(e) INVESTMENT ADVISORY COUNCIL.—The Board shall take

prompt measures to increase the loan, guarantee, and insurance

programs, and financial commitments, of the Corporation in subSaharan Africa, including through the use of an investment advisory council to assist the Board in developing and implementing

policies, programs, and financial instruments with respect to subSaharan Africa. In addition, the investment advisory council shall

make recommendations to the Board on how the Corporation can facilitate greater support by the United States for trade and investment with and in sub-Saharan Africa. The investment advisory

council shall terminate 4 years after the date of the enactment of

this subsection.’’.

(2) REPORTS TO THE CONGRESS.—Within 6 months after the

date of the enactment of this Act, and annually for each of the

21

4 years thereafter, the Board of Directors of the Overseas Private Investment Corporation shall submit to the Congress a report on the steps that the Board has taken to implement section

233(e) of the Foreign Assistance Act of 1961 (as added by paragraph (1)) and any recommendations of the investment advisory

council established pursuant to such section.

SEC. 124. EXPORT-IMPORT BANK INITIATIVES.

(a) SENSE OF CONGRESS.—It is the sense of Congress that the

Board of Directors of the Bank shall continue to take comprehensive

measures, consistent with the credit standards otherwise required

by law, to promote the expansion of the Bank’s financial commitments in sub-Saharan Africa under the loan, guarantee and insurance programs of the Bank.

(b) SUB-SAHARAN AFRICA ADVISORY COMMITTEE.—The sub-Saharan Africa Advisory Committee (SAAC) is to be commended for

aiding the Bank in advancing the economic partnership between the

United States and the nations of sub-Saharan Africa by doubling

the number of sub-Saharan African countries in which the Bank is

open for traditional financing and by increasing by tenfold the

Bank’s support for sales to sub-Saharan Africa from fiscal year

1998 to fiscal year 1999. The Board of Directors of the Bank and

its staff shall continue to review carefully the sub-Saharan Africa

Advisory Committee recommendations on the development and implementation of new and innovative policies and programs designed

to promote the Bank’s expansion in sub-Saharan Africa.

SEC. 125. EXPANSION OF THE UNITED STATES AND FOREIGN COMMERCIAL SERVICE IN SUB-SAHARAN AFRICA.

(a) FINDINGS.—The Congress makes the following findings:

(1) The United States and Foreign Commercial Service

(hereafter in this section referred to as the ‘Commercial Service’)

plays an important role in helping U.S. businesses identify export opportunities and develop reliable sources of information

on commercial prospects in foreign countries.

(2) During the 1980s, the presence of the Commercial Service in sub-Saharan Africa consisted of 14 professionals providing services in 8 countries. By early 1997, that presence had

been reduced by half to 7 professionals in only 4 countries.

(3) Since 1997, the Department of Commerce has slowly

begun to increase the presence of the Commercial Service in

sub-Saharan Africa, adding 5 full-time officers to established

posts.

(4) Although the Commercial Service Officers in these countries have regional responsibilities, this kind of coverage does

not adequately service the needs of U.S. businesses attempting

to do business in sub-Saharan Africa.

(5) The Congress has, on several occasions, encouraged the

Commercial Service to focus its resources and efforts in countries or regions in Europe or Asia to promote greater United

States export activity in those markets, and similar encouragement should be provided for countries in sub-Saharan Africa as

well.

(6) Because market information is not widely available in

many sub-Saharan African countries, the presence of additional

22

Commercial Service Officers and resources can play a significant role in assisting United States businesses in markets in

those countries.

(b) APPOINTMENTS.—Subject to the availability of appropriations, by not later than December 31, 2001, the Secretary of Commerce, acting through the Assistant Secretary of Commerce and Director General of the United States and Foreign Commercial Service, shall take steps to ensure that—

(1) at least 20 full-time Commercial Service employees are

stationed in sub-Saharan Africa; and

(2) full-time Commercial Service employees are stationed in

not less than 10 different sub-Saharan African countries.

(c) INITIATIVE FOR SUB-SAHARAN AFRICA.—In order to encourage the export of United States goods and services to sub-Saharan

African countries, the International Trade Administration shall

make a special effort to—

(1) identify United States goods and services which are the

best prospects for export by United States companies to sub-Saharan Africa;

(2) identify, where appropriate, tariff and nontariff barriers

that are preventing or hindering sales of United States goods

and services to, or the operation of United States companies in,

sub-Saharan Africa;

(3) hold discussions with appropriate authorities in sub-Saharan Africa on the matters described in paragraphs (1) and

(2) with a view to securing increased market access for United

States exporters of goods and services;

(4) identify current resource allocations and personnel levels in sub-Saharan Africa for the Commercial Service and consider plans for the deployment of additional resources or personnel to that region; and

(5) make available to the public, through printed and electronic means of communication, the information derived pursuant to paragraphs (1) through (4) for each of the 4 years after

the date of enactment of this Act.

SEC. 126. DONATION OF AIR TRAFFIC CONTROL EQUIPMENT TO ELIGIBLE SUB-SAHARAN AFRICAN COUNTRIES.

It is the sense of the Congress that, to the extent appropriate,

the United States Government should make every effort to donate to

governments of sub-Saharan African countries determined to be eligible under section 104 air traffic control equipment that is no

longer in use, including appropriate related reimbursable technical

assistance.

SEC. 127. ADDITIONAL AUTHORITIES AND INCREASED FLEXIBILITY TO

PROVIDE ASSISTANCE UNDER THE DEVELOPMENT FUND

FOR AFRICA.

(a) USE OF SUSTAINABLE DEVELOPMENT ASSISTANCE TO SUPPORT FURTHER ECONOMIC GROWTH.—It is the sense of the Congress

that sustained economic growth in sub-Saharan Africa depends in

large measure upon the development of a receptive environment for

trade and investment, and that to achieve this objective the United

States Agency for International Development should continue to

support programs which help to create this environment. Investments in human resources, development, and implementation of free

23

market policies, including policies to liberalize agricultural markets

and improve food security, and the support for the rule of law and

democratic governance should continue to be encouraged and enhanced on a bilateral and regional basis.

(b) DECLARATIONS OF POLICY.—The Congress makes the following declarations:

(1) The Development Fund for Africa established under

chapter 10 of part I of the Foreign Assistance Act of 1961 (22

U.S.C. 2293 et seq.) has been an effective tool in providing development assistance to sub-Saharan Africa since 1988.

(2) The Development Fund for Africa will complement the

other provisions of this title and lay a foundation for increased

trade and investment opportunities between the United States

and sub-Saharan Africa.

(3) Assistance provided through the Development Fund for

Africa will continue to support programs and activities that

promote the long term economic development of sub-Saharan

Africa, such as programs and activities relating to the following:

(A) Strengthening primary and vocational education

systems, especially the acquisition of middle-level technical

skills for operating modern private businesses and the introduction of college level business education, including the

study of international business, finance, and stock exchanges.

(B) Strengthening health care systems.

(C) Supporting democratization, good governance and

civil society and conflict resolution efforts.

(D) Increasing food security by promoting the expansion of agricultural and agriculture-based industrial production and productivity and increasing real incomes for

poor individuals.

(E) Promoting an enabling environment for private sector-led growth through sustained economic reform, privatization programs, and market-led economic activities.

(F) Promoting decentralization and local participation

in the development process, especially linking the rural production sectors and the industrial and market centers

throughout Africa.

(G) Increasing the technical and managerial capacity

of sub-Saharan African individuals to manage the economy

of sub-Saharan Africa.

(H) Ensuring sustainable economic growth through environmental protection.

(4) The African Development Foundation has a unique congressional mandate to empower the poor to participate fully in

development and to increase opportunities for gainful employment, poverty alleviation, and more equitable income distribution in sub-Saharan Africa. The African Development Foundation has worked successfully to enhance the role of women as

agents of change, strengthen the informal sector with an emphasis on supporting micro and small sized enterprises, indigenous technologies, and mobilizing local financing. The African

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gies for promoting participation in the socioeconomic development process of grassroots and informal sector groups such as

nongovernmental organizations, cooperatives, artisans, and

traders into the programs and initiatives established under this

title.

(c) ADDITIONAL AUTHORITIES.—

(1) IN GENERAL.—Section 496(h) of the Foreign Assistance

Act of 1961 (22 U.S.C. 2293(h)) is amended—

(A) by redesignating paragraph (3) as paragraph (4);

and

(B) by inserting after paragraph (2) the following:

‘‘(3) DEMOCRATIZATION AND CONFLICT RESOLUTION CAPABILITIES.—Assistance under this section may also include program assistance—

‘‘(A) to promote democratization, good governance, and

strong civil societies in sub-Saharan Africa; and

‘‘(B) to strengthen conflict resolution capabilities of governmental, intergovernmental, and nongovernmental entities in sub-Saharan Africa.’’.

(2) CONFORMING AMENDMENT.—Section 496(h)(4) of such

Act, as amended by paragraph (1), is further amended by striking ‘‘paragraphs (1) and (2)’’ in the first sentence and inserting

‘‘paragraphs (1), (2), and (3)’’.

SEC. 128. ASSISTANCE FROM UNITED STATES PRIVATE SECTOR TO

PREVENT AND REDUCE HIV/AIDS IN SUB-SAHARAN AFRICA.

It is the sense of the Congress that United States businesses

should be encouraged to provide assistance to sub-Saharan African

countries to prevent and reduce the incidence of HIV/AIDS in subSaharan Africa. In providing such assistance, United States businesses should be encouraged to consider the establishment of an

HIV/AIDS Response Fund in order to provide for coordination

among such businesses in the collection and distribution of the assistance to sub-Saharan African countries.

SEC. 129. SENSE OF THE CONGRESS RELATING TO HIV/AIDS CRISIS IN

SUB-SAHARAN AFRICA.

(a) FINDINGS.—The Congress finds the following:

(1) Sustained economic development in sub-Saharan Africa

depends in large measure upon successful trade with and foreign assistance to the countries of sub-Saharan Africa.

(2) The HIV/AIDS crisis has reached epidemic proportions

in sub-Saharan Africa, where more than 21,000,000 men,

women, and children are infected with HIV.

(3) 83 percent of the estimated 11,700,000 deaths from

HIV/AIDS worldwide have been in sub-Saharan Africa.

(4) The HIV/AIDS crisis in sub-Saharan Africa is weakening the structure of families and societies.

(5)(A) The HIV/AIDS crisis threatens the future of the

workforce in sub-Saharan Africa.

(B) Studies show that HIV/AIDS in sub-Saharan Africa

most severely affects individuals between the ages of 15 and

49—the age group that provides the most support for the economies of sub-Saharan African countries.

25

(6) Clear evidence demonstrates that HIV/AIDS is destructive to the economies of sub-Saharan African countries.

(7) Sustained economic development is critical to creating

the public and private sector resources in sub-Saharan Africa

necessary to fight the HIV/AIDS epidemic.

(b) SENSE OF THE CONGRESS.—It is the sense of the Congress

that—

(1) addressing the HIV/AIDS crisis in sub-Saharan Africa

should be a central component of United States foreign policy

with respect to sub-Saharan Africa;

(2) significant progress needs to be made in preventing and

treating HIV/AIDS in sub-Saharan Africa in order to sustain

a mutually beneficial trade relationship between the United

States and sub-Saharan African countries; and

(3) the HIV/AIDS crisis in sub-Saharan Africa is a global

threat that merits further attention through greatly expanded

public, private, and joint public-private efforts, and through appropriate United States legislation.

SEC. 130. STUDY ON IMPROVING AFRICAN AGRICULTURAL PRACTICES.

(a) IN GENERAL.—The Secretary of Agriculture, in consultation

with American Land Grant Colleges and Universities and not-forprofit international organizations, is authorized to conduct a 2-year

study on ways to improve the flow of American farming techniques

and practices to African farmers. The study shall include an examination of ways of improving or utilizing—

(1) knowledge of insect and sanitation procedures;

(2) modern farming and soil conservation techniques;

(3) modern farming equipment (including maintaining the

equipment);

(4) marketing crop yields to prospective purchasers; and

(5) crop maximization practices.

The Secretary of Agriculture shall submit the study to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the

Committee on Agriculture of the House of Representatives not later

than September 30, 2001.

(b) LAND GRANT COLLEGES AND NOT-FOR-PROFIT INSTITUTIONS.—In conducting the study under subsection (a), the Secretary

of Agriculture is encouraged to consult with American Land Grant

Colleges and not-for-profit international organizations that have

firsthand knowledge of current African farming practices.

SEC. 131. SENSE OF THE CONGRESS REGARDING EFFORTS TO COMBAT

DESERTIFICATION IN AFRICA AND OTHER COUNTRIES.

(a) FINDINGS.—The Congress finds that—

(1) desertification affects approximately one-sixth of the

world’s population and one-quarter of the total land area;

(2) over 1,000,000 hectares of Africa are affected by

desertification;

(3) dryland degradation is an underlying cause of recurrent

famine in Africa;

(4) the United Nations Environment Programme estimates

that desertification costs the world $42,000,000,000 a year, not

including incalculable costs in human suffering; and

26

(5) the United States can strengthen its partnerships

throughout Africa and other countries affected by

desertification, help alleviate social and economic crises caused

by misuse of natural resources, and reduce dependence on foreign aid, by taking a leading role to combat desertification.

(b) SENSE OF THE CONGRESS.—It is the sense of the Congress

that the United States should expeditiously work with the international community, particularly Africa and other countries affected by desertification, to—

(1) strengthen international cooperation to combat

desertification;

(2) promote the development of national and regional strategies to address desertification and increase public awareness of

this serious problem and its effects;

(3) develop and implement national action programs that

identify the causes of desertification and measures to address it;

and

(4) recognize the essential role of local governments and

nongovernmental organizations in developing and implementing measures to address desertification.

TITLE II—TRADE BENEFITS FOR

CARIBBEAN BASIN

Subtitle A—Trade Policy for Caribbean

Basin Countries

SEC. 201. SHORT TITLE.

This title may be cited as the ‘‘United States-Caribbean Basin

Trade Partnership Act’’.

SEC. 202. FINDINGS AND POLICY.

(a) FINDINGS.—Congress makes the following findings:

(1) The Caribbean Basin Economic Recovery Act (in this

title referred to as ‘‘CBERA’’) represents a permanent commitment by the United States to encourage the development of

strong democratic governments and revitalized economies in

neighboring countries in the Caribbean Basin.

(2) In 1998, Hurricane Mitch and Hurricane Georges devastated areas in the Caribbean Basin region, killing more than

10,000 people and leaving 3,000,000 homeless.

(3) The total direct impact of Hurricanes Mitch and

Georges on Honduras, Nicaragua, the Dominican Republic, El

Salvador, and Guatemala amounts to $4,200,000,000, representing a severe loss to income levels in this underdeveloped

region.

(4) In addition to short term disaster assistance, United

States policy toward the region should focus on expanding

international trade with the Caribbean Basin region as an enduring solution for successful economic growth and recovery.

(5) Thirty-four democratically elected leaders agreed at the

1994 Summit of the Americas to conclude negotiation of a Free

27

Trade Area of the Americas (in this title referred to as ‘‘FTAA’’)

by the year 2005.

(6) The economic security of the countries in the Caribbean

Basin will be enhanced by the completion of the FTAA.

(7) Offering temporary benefits to Caribbean Basin countries will preserve the United States commitment to Caribbean

Basin beneficiary countries, promote the growth of free enterprise and economic opportunity in these neighboring countries,

and thereby enhance the national security interests of the

United States.

(8) Given the greater propensity of countries located in the

Western Hemisphere to use United States components and to

purchase United States products compared to other countries,

increased trade and economic activity between the United

States and countries in the Western Hemisphere will create new

jobs in the United States as a result of expanding export opportunities.

(b) POLICY.—It is the policy of the United States—

(1) to offer Caribbean Basin beneficiary countries willing to

prepare to become a party to the FTAA or another free trade

agreement, tariff treatment essentially equivalent to that accorded to products of NAFTA countries for certain products not

currently eligible for duty-free treatment under the CBERA; and

(2) to seek the participation of Caribbean Basin beneficiary

countries in the FTAA or another free trade agreement at the

earliest possible date, with the goal of achieving full participation in such agreement not later than 2005.

SEC. 203. DEFINITIONS.

In this title:

(1) NAFTA.—The term ‘‘NAFTA’’ means the North American Free Trade Agreement entered into between the United

States, Mexico, and Canada on December 17, 1992.

(2) NAFTA COUNTRY.—The term ‘‘NAFTA country’’ means

any country with respect to which the NAFTA is in force.

(3) WTO AND WTO MEMBER.—The terms ‘‘WTO’’ and ‘‘WTO

member’’ have the meanings given those terms in section 2 of

the Uruguay Round Agreements Act (19 U.S.C. 3501).

Subtitle B—Trade Benefits for Caribbean

Basin Countries

SEC. 211. TEMPORARY PROVISIONS TO PROVIDE ADDITIONAL TRADE

BENEFITS TO CERTAIN BENEFICIARY COUNTRIES.

(a) TEMPORARY PROVISIONS.—Section 213(b) of the Caribbean

Basin Economic Recovery Act (19 U.S.C. 2703(b)) is amended to

read as follows:

‘‘(b) IMPORT-SENSITIVE ARTICLES.—

‘‘(1) IN GENERAL.—Subject to paragraphs (2) through (5),

the duty-free treatment provided under this title does not apply

to—

‘‘(A) textile and apparel articles which were not eligible

articles for purposes of this title on January 1, 1994, as

this title was in effect on that date;

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‘‘(B) footwear not designated at the time of the effective

date of this title as eligible articles for the purpose of the

generalized system of preferences under title V of the Trade

Act of 1974;

‘‘(C) tuna, prepared or preserved in any manner, in airtight containers;

‘‘(D) petroleum, or any product derived from petroleum,

provided for in headings 2709 and 2710 of the HTS;

‘‘(E) watches and watch parts (including cases, bracelets, and straps), of whatever type including, but not limited to, mechanical, quartz digital or quartz analog, if such

watches or watch parts contain any material which is the

product of any country with respect to which HTS column

2 rates of duty apply; or

‘‘(F) articles to which reduced rates of duty apply under

subsection (h).

‘‘(2) TRANSITION PERIOD TREATMENT OF CERTAIN TEXTILE

AND APPAREL ARTICLES.—

‘‘(A) ARTICLES COVERED.—During the transition period,

the preferential treatment described in subparagraph (B)

shall apply to the following articles:

‘‘(i) APPAREL ARTICLES ASSEMBLED IN A CBTPA BENEFICIARY COUNTRY.—Apparel articles assembled in a

CBTPA beneficiary country from fabrics wholly formed

and cut in the United States, from yarns wholly

formed in the United States, that are—

‘‘(I) entered under subheading 9802.00.80 of

the HTS; or

‘‘(II) entered under chapter 61 or 62 of the

HTS, if, after such assembly, the articles would

have qualified for entry under subheading

9802.00.80 of the HTS but for the fact that the articles were embroidered or subjected to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing,

screen printing, or other similar processes.

‘‘(ii) APPAREL ARTICLES CUT AND ASSEMBLED IN

ONE OR MORE CBTPA BENEFICIARY COUNTRIES.—Apparel articles cut in a CBTPA beneficiary country from

fabric wholly formed in the United States from yarns

wholly formed in the United States, if such articles are

assembled in such country with thread formed in the

United States.

‘‘(iii) CERTAIN KNIT APPAREL ARTICLES.—(I) Apparel articles knit to shape (other than socks provided

for in heading 6115 of the HTS) in a CBTPA beneficiary country from yarns wholly formed in the United

States, and knit apparel articles (other than t-shirts

described in subclause (III)) cut and wholly assembled

in 1 or more CBTPA beneficiary countries from fabric

formed in one or more CBTPA beneficiary countries or

the United States from yarns wholly formed in the

United States, in an amount not exceeding the amount

set forth in subclause (II).

29

‘‘(II) The amount referred to in subclause (I) is—

‘‘(aa) 250,000,000 square meter equivalents

during the 1-year period beginning on October 1,

2000, increased by 16 percent, compounded annually, in each succeeding 1-year period through September 30, 2004; and

‘‘(bb) in each 1-year period thereafter through

September 30, 2008, the amount in effect for the 1-

year period ending on September 30, 2004, or such

other amount as may be provided by law.

‘‘(III) T-shirts, other than underwear, classifiable

under subheadings 6109.10.00 and 6109.90.10 of the

HTS, made in one or more CBTPA beneficiary countries from fabric formed in one or more CBTPA beneficiary countries from yarns wholly formed in the

United States, in an amount not exceeding the amount

set forth in subclause (IV).

‘‘(IV) The amount referred to in subclause (III) is—

‘‘(aa) 4,200,000 dozen during the 1-year period

beginning on October 1, 2000, increased by 16 percent, compounded annually, in each succeeding 1-

year period through September 30, 2004; and

‘‘(bb) in each 1-year period thereafter, the

amount in effect for the 1-year period ending on

September 30, 2004, or such other amount as may

be provided by law.

‘‘(V) It is the sense of Congress that the Congress

should determine, based on the record of expansion of

exports from the United States as a result of the preferential treatment of articles under this clause, the percentage by which the amount provided in subclauses

(II) and (IV) should be compounded for the 1-year periods occuring after the 1-year period ending on September 30, 2004.

‘‘(iv) CERTAIN OTHER APPAREL ARTICLES.—(I) Subject to subclause (II), any apparel article classifiable

under subheading 6212.10 of the HTS, if the article is

both cut and sewn or otherwise assembled in the

United States, or 1 or more of the CBTPA beneficiary

countries, or both.

‘‘(II) During the 1-year period beginning on October 1, 2001, and during each of the 6 succeeding 1-year

periods, apparel articles described in subclause (I) of a

producer or an entity controlling production shall be

eligible for preferential treatment under subparagraph

(B) only if the aggregate cost of fabric components

formed in the United States that are used in the production of all such articles of that producer or entity

during the preceding 1-year period is at least 75 percent of the aggregate declared customs value of the fabric contained in all such articles of that producer or entity that are entered during the preceding 1-year period.

30

‘‘(III) The United States Customs Service shall develop and implement methods and procedures to ensure

ongoing compliance with the requirement set forth in

subclause (II). If the Customs Service finds that a producer or an entity controlling production has not satisfied such requirement in a 1-year period, then apparel

articles described in subclause (I) of that producer or

entity shall be ineligible for preferential treatment

under subparagraph (B) during any succeeding 1-year

period until the aggregate cost of fabric components

formed in the United States used in the production of

such articles of that producer or entity in the preceding

1-year period is at least 85 percent of the aggregate declared customs value of the fabric contained in all such

articles of that producer or entity that are entered during the preceding 1-year period.

‘‘(v) APPAREL ARTICLES ASSEMBLED FROM FIBERS,

FABRIC, OR YARN NOT WIDELY AVAILABLE IN COMMERCIAL QUANTITIES.—(I) Apparel articles that are both cut

(or knit-to-shape) and sewn or otherwise assembled in

1 or more CBTPA beneficiary countries, from fibers,

fabric, or yarn that is not formed in the United States

or in 1 or more CBTPA beneficiary countries, to the extent that such fibers, fabric, or yarn would be eligible

for preferential treatment, without regard to the source

of the fibers, fabric, or yarn, under Annex 401 of the

NAFTA.

‘‘(II) At the request of any interested party, the

President is authorized to proclaim additional fibers,

fabric, and yarn as eligible for preferential treatment

under subclause (I) if—

‘‘(aa) the President determines that such fibers, fabric, or yarn cannot be supplied by the domestic industry in commercial quantities in a

timely manner;

‘‘(bb) the President has obtained advice regarding the proposed action from the appropriate

advisory committee established under section 135

of the Trade Act of 1974 (19 U.S.C. 2155) and the

United States International Trade Commission;

‘‘(cc) within 60 days after the request, the

President has submitted a report to the Committee

on Ways and Means of the House of Representatives and the Committee on Finance of the Senate

that sets forth the action proposed to be proclaimed

and the reasons for such actions, and the advice

obtained under division (bb);

‘‘(dd) a period of 60 calendar days, beginning

with the first day on which the President has met

the requirements of division (cc), has expired; and

‘‘(ee) the President has consulted with such

committees regarding the proposed action during

the period referred to in division (cc).

31

‘‘(vi) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES.—A handloomed, handmade, or folklore article

of a CBTPA beneficiary country identified under subparagraph (C) that is certified as such by the competent authority of such beneficiary country.

‘‘(vii) SPECIAL RULES.—

‘‘(I) EXCEPTION FOR FINDINGS AND TRIMMINGS.—(aa) An article otherwise eligible for preferential treatment under this paragraph shall not

be ineligible for such treatment because the article

contains findings or trimmings of foreign origin, if

such findings and trimmings do not exceed 25 percent of the cost of the components of the assembled

product. Examples of findings and trimmings are

sewing thread, hooks and eyes, snaps, buttons,

‘bow buds,’ decorative lace, trim, elastic strips, zippers, including zipper tapes and labels, and other

similar products. Elastic strips are considered

findings or trimmings only if they are each less

than 1 inch in width and are used in the production of brassieres.

‘‘(bb) In the case of an article described in

clause (ii) of this subparagraph, sewing thread

shall not be treated as findings or trimmings

under this subclause.

‘‘(II) CERTAIN INTERLINING.—(aa) An article

otherwise eligible for preferential treatment under

this paragraph shall not be ineligible for such

treatment because the article contains certain

interlinings of foreign origin, if the value of such

interlinings (and any findings and trimmings)

does not exceed 25 percent of the cost of the components of the assembled article.

‘‘(bb) Interlinings eligible for the treatment described in division (aa) include only a chest type

plate, ‘hymo’ piece, or ‘sleeve header’, of woven or

weft-inserted warp knit construction and of coarse

animal hair or man-made filaments.

‘‘(cc) The treatment described in this subclause

shall terminate if the President makes a determination that United States manufacturers are

producing such interlinings in the United States in

commercial quantities.

‘‘(III) DE MINIMIS RULE.—An article that

would otherwise be ineligible for preferential treatment under this paragraph because the article contains fibers or yarns not wholly formed in the

United States or in 1 or more CBTPA beneficiary

countries shall not be ineligible for such treatment

if the total weight of all such fibers or yarns is not

more than 7 percent of the total weight of the good.

Notwithstanding the preceding sentence, an apparel article containing elastomeric yarns shall be

eligible for preferential treatment under this paraVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00031 Fmt 6659 Sfmt 6603 E:\HR\OC\A606HR.015 pfrm02 PsN: A606HR
32

graph only if such yarns are wholly formed in the

United States.

‘‘(IV) SPECIAL ORIGIN RULE.—An article otherwise eligible for preferential treatment under

clause (i) or (ii) of this subparagraph shall not be

ineligible for such treatment because the article

contains nylon filament yarn (other than elastomeric yarn) that is entered under subheading

5402.10.30, 5402.10.60, 5402.31.30, 5402.31.60,

5402.32.30, 5402.32.60, 5402.41.10, 5402.41.90,

5402.51.00, or 5402.61.00 of the HTS duty-free

from a country that is a party to an agreement

with the United States establishing a free trade

area, which entered into force before January 1,

1995.

‘‘(vii) TEXTILE LUGGAGE.—Textile luggage—

‘‘(I) assembled in a CBTPA beneficiary country

from fabric wholly formed and cut in the United

States, from yarns wholly formed in the United

States, that is entered under subheading

9802.00.80 of the HTS; or

‘‘(II) assembled from fabric cut in a CBTPA

beneficiary country from fabric wholly formed in

the United States from yarns wholly formed in the

United States.

‘‘(B) PREFERENTIAL TREATMENT.—Except as provided

in subparagraph (E), during the transition period, the articles to which this subparagraph applies shall enter the

United States free of duty and free of any quantitative restrictions, limitations, or consultation levels.

‘‘(C) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES.—For purposes of subparagraph (A)(vi), the President

shall consult with representatives of the CBTPA beneficiary

countries concerned for the purpose of identifying particular textile and apparel goods that are mutually agreed

upon as being handloomed, handmade, or folklore goods of

a kind described in section 2.3 (a), (b), or (c) of the Annex

or Appendix 3.1.B.11 of the Annex.

‘‘(D) PENALTIES FOR TRANSSHIPMENTS.—

‘‘(i) PENALTIES FOR EXPORTERS.—If the President

determines, based on sufficient evidence, that an exporter has engaged in transshipment with respect to

textile or apparel articles from a CBTPA beneficiary

country, then the President shall deny all benefits

under this title to such exporter, and any successor of

such exporter, for a period of 2 years.

‘‘(ii) PENALTIES FOR COUNTRIES.—Whenever the

President finds, based on sufficient evidence, that

transshipment has occurred, the President shall request that the CBTPA beneficiary country or countries

through whose territory the transshipment has occurred take all necessary and appropriate actions to

prevent such transshipment. If the President determines that a country is not taking such actions, the

33

President shall reduce the quantities of textile and apparel articles that may be imported into the United

States from such country by the quantity of the transshipped articles multiplied by 3, to the extent consistent

with the obligations of the United States under the

WTO.

‘‘(iii) TRANSSHIPMENT DESCRIBED.—Transshipment

within the meaning of this subparagraph has occurred

when preferential treatment under subparagraph (B)

has been claimed for a textile or apparel article on the

basis of material false information concerning the

country of origin, manufacture, processing, or assembly

of the article or any of its components. For purposes of

this clause, false information is material if disclosure

of the true information would mean or would have

meant that the article is or was ineligible for preferential treatment under subparagraph (B).

‘‘(E) BILATERAL EMERGENCY ACTIONS.—

‘‘(i) IN GENERAL.—The President may take bilateral

emergency tariff actions of a kind described in section

4 of the Annex with respect to any apparel article imported from a CBTPA beneficiary country if the application of tariff treatment under subparagraph (B) to

such article results in conditions that would be cause

for the taking of such actions under such section 4 with

respect to a like article described in the same 8-digit

subheading of the HTS that is imported from Mexico.

‘‘(ii) RULES RELATING TO BILATERAL EMERGENCY

ACTION.—For purposes of applying bilateral emergency

action under this subparagraph—

‘‘(I) the requirements of paragraph (5) of section 4 of the Annex (relating to providing compensation) shall not apply;

‘‘(II) the term ‘transition period’ in section 4 of

the Annex shall have the meaning given that term

in paragraph (5)(D) of this subsection; and

‘‘(III) the requirements to consult specified in

section 4 of the Annex shall be treated as satisfied

if the President requests consultations with the

CBTPA beneficiary country in question and the

country does not agree to consult within the time

period specified under section 4.

‘‘(3) TRANSITION PERIOD TREATMENT OF CERTAIN OTHER ARTICLES ORIGINATING IN BENEFICIARY COUNTRIES.—

‘‘(A) EQUIVALENT TARIFF TREATMENT.—

‘‘(i) IN GENERAL.—Subject to clause (ii), the tariff

treatment accorded at any time during the transition

period to any article referred to in any of subparagraphs (B) through (F) of paragraph (1) that is a

CBTPA originating good shall be identical to the tariff

treatment that is accorded at such time under Annex

302.2 of the NAFTA to an article described in the same

8-digit subheading of the HTS that is a good of Mexico

and is imported into the United States.

34

‘‘(ii) EXCEPTION.—Clause (i) does not apply to any

article accorded duty-free treatment under U.S. Note

2(b) to subchapter II of chapter 98 of the HTS.

‘‘(B) RELATIONSHIP TO SUBSECTION (h) DUTY REDUCTIONS.—If at any time during the transition period the rate

of duty that would (but for action taken under subparagraph (A)(i) in regard to such period) apply with respect to

any article under subsection (h) is a rate of duty that is

lower than the rate of duty resulting from such action, then

such lower rate of duty shall be applied for the purposes of

implementing such action.

‘‘(4) CUSTOMS PROCEDURES.—

‘‘(A) IN GENERAL.—

‘‘(i) REGULATIONS.—Any importer that claims preferential treatment under paragraph (2) or (3) shall

comply with customs procedures similar in all material

respects to the requirements of Article 502(1) of the

NAFTA as implemented pursuant to United States

law, in accordance with regulations promulgated by

the Secretary of the Treasury.

‘‘(ii) DETERMINATION.—

‘‘(I) IN GENERAL.—In order to qualify for the

preferential treatment under paragraph (2) or (3)

and for a Certificate of Origin to be valid with respect to any article for which such treatment is

claimed, there shall be in effect a determination by

the President that each country described in subclause (II)—

‘‘(aa) has implemented and follows, or

‘‘(bb) is making substantial progress toward implementing and following,

procedures and requirements similar in all material respects to the relevant procedures and requirements under chapter 5 of the NAFTA.

‘‘(II) COUNTRY DESCRIBED.—A country is described in this subclause if it is a CBTPA beneficiary country—

‘‘(aa) from which the article is exported, or

‘‘(bb) in which materials used in the production of the article originate or in which the

article or such materials undergo production

that contributes to a claim that the article is

eligible for preferential treatment under paragraph (2) or (3).

‘‘(B) CERTIFICATE OF ORIGIN.—The Certificate of Origin

that otherwise would be required pursuant to the provisions

of subparagraph (A) shall not be required in the case of an

article imported under paragraph (2) or (3) if such Certificate of Origin would not be required under Article 503 of

the NAFTA (as implemented pursuant to United States

law), if the article were imported from Mexico.

‘‘(C) REPORT BY USTR ON COOPERATION OF OTHER

COUNTRIES CONCERNING CIRCUMVENTION.—The United

States Commissioner of Customs shall conduct a study

35

analyzing the extent to which each CBTPA beneficiary

country—

‘‘(i) has cooperated fully with the United States,

consistent with its domestic laws and procedures, in instances of circumvention or alleged circumvention of

existing quotas on imports of textile and apparel goods,

to establish necessary relevant facts in the places of import, export, and, where applicable, transshipment, including investigation of circumvention practices, exchanges of documents, correspondence, reports, and

other relevant information, to the extent such information is available;

‘‘(ii) has taken appropriate measures, consistent

with its domestic laws and procedures, against exporters and importers involved in instances of false declaration concerning fiber content, quantities, description, classification, or origin of textile and apparel

goods; and

‘‘(iii) has penalized the individuals and entities involved in any such circumvention, consistent with its

domestic laws and procedures, and has worked closely

to seek the cooperation of any third country to prevent

such circumvention from taking place in that third

country.

The Trade Representative shall submit to Congress, not

later than October 1, 2001, a report on the study conducted

under this subparagraph.

‘‘(5) DEFINITIONS AND SPECIAL RULES.—For purposes of this

subsection—

‘‘(A) ANNEX.—The term ‘the Annex’ means Annex 300–

B of the NAFTA.

‘‘(B) CBTPA BENEFICIARY COUNTRY.—The term

‘CBTPA beneficiary country’ means any ‘beneficiary country’, as defined in section 212(a)(1)(A) of this title, which

the President designates as a CBTPA beneficiary country,

taking into account the criteria contained in subsections (b)

and (c) of section 212 and other appropriate criteria, including the following:

‘‘(i) Whether the beneficiary country has demonstrated a commitment to—

‘‘(I) undertake its obligations under the WTO,

including those agreements listed in section 101(d)

of the Uruguay Round Agreements Act, on or

ahead of schedule; and

‘‘(II) participate in negotiations toward the

completion of the FTAA or another free trade

agreement.

‘‘(ii) The extent to which the country provides protection of intellectual property rights consistent with or

greater than the protection afforded under the Agreement on Trade-Related Aspects of Intellectual Property

Rights described in section 101(d)(15) of the Uruguay

Round Agreements Act.

36

‘‘(iii) The extent to which the country provides

internationally recognized worker rights, including—

‘‘(I) the right of association,

‘‘(II) the right to organize and bargain collectively,

‘‘(III) a prohibition on the use of any form of

forced or compulsory labor,

‘‘(IV) a minimum age for the employment of

children, and

‘‘(V) acceptable conditions of work with respect

to minimum wages, hours of work, and occupational safety and health;

‘‘(iv) Whether the country has implemented its commitments to eliminate the worst forms of child labor,

as defined in section 507(6) of the Trade Act of 1974.

‘‘(v) The extent to which the country has met the

counter-narcotics certification criteria set forth in section 490 of the Foreign Assistance Act of 1961 (22

U.S.C. 2291j) for eligibility for United States assistance.

‘‘(vi) The extent to which the country has taken

steps to become a party to and implements the InterAmerican Convention Against Corruption.

‘‘(vii) The extent to which the country—

‘‘(I) applies transparent, nondiscriminatory,

and competitive procedures in government procurement equivalent to those contained in the Agreement on Government Procurement described in section 101(d)(17) of the Uruguay Round Agreements

Act; and

‘‘(II) contributes to efforts in international fora

to develop and implement international rules in

transparency in government procurement.

‘‘(C) CBTPA ORIGINATING GOOD.—

‘‘(i) IN GENERAL.—The term ‘CBTPA originating

good’ means a good that meets the rules of origin for

a good set forth in chapter 4 of the NAFTA as implemented pursuant to United States law.

‘‘(ii) APPLICATION OF CHAPTER 4.—In applying

chapter 4 of the NAFTA with respect to a CBTPA beneficiary country for purposes of this subsection—

‘‘(I) no country other than the United States

and a CBTPA beneficiary country may be treated

as being a party to the NAFTA;

‘‘(II) any reference to trade between the United

States and Mexico shall be deemed to refer to trade

between the United States and a CBTPA beneficiary country;

‘‘(III) any reference to a party shall be deemed

to refer to a CBTPA beneficiary country or the

United States; and

‘‘(IV) any reference to parties shall be deemed

to refer to any combination of CBTPA beneficiary

countries or to the United States and 1 or more

37

CBTPA beneficiary countries (or any combination

thereof).

‘‘(D) TRANSITION PERIOD.—The term ‘transition period’

means, with respect to a CBTPA beneficiary country, the

period that begins on October 1, 2000, and ends on the earlier of—

‘‘(i) September 30, 2008, or

‘‘(ii) the date on which the FTAA or another free

trade agreement that makes substantial progress in

achieving the negotiating objectives set forth in

108(b)(5) of Public Law 103–182 (19 U.S.C. 3317(b)(5))

enters into force with respect to the United States and

the CBTPA beneficiary country.

‘‘(E) CBTPA.—The term ‘CBTPA’ means the United

States-Caribbean Basin Trade Partnership Act.

‘‘(F) FTAA.—The term ‘FTAA’ means the Free Trade

Area of the Americas.’’.

(b) DETERMINATION REGARDING RETENTION OF DESIGNATION.—

Section 212(e) of the Caribbean Basin Economic Recovery Act (19

U.S.C. 2702(e)) is amended—

(1) in paragraph (1)—

(A) by redesignating subparagraphs (A) and (B) as

clauses (i) and (ii), respectively;

(B) by inserting ‘‘(A)’’ after ‘‘(1)’’; and

(C) by adding at the end the following:

‘‘(B) The President may, after the requirements of subsection

(a)(2) and paragraph (2) have been met—

‘‘(i) withdraw or suspend the designation of any country as

a CBTPA beneficiary country, or

‘‘(ii) withdraw, suspend, or limit the application of preferential treatment under section 213(b) (2) and (3) to any article

of any country,

if, after such designation, the President determines that, as a result

of changed circumstances, the performance of such country is not

satisfactory under the criteria set forth in section 213(b)(5)(B).’’; and

(2) by adding after paragraph (2) the following new paragraph:

‘‘(3) If preferential treatment under section 213(b) (2) and (3) is

withdrawn, suspended, or limited with respect to a CBTPA beneficiary country, such country shall not be deemed to be a ‘party’ for

the purposes of applying section 213(b)(5)(C) to imports of articles

for which preferential treatment has been withdrawn, suspended, or

limited with respect to such country.’’.

(c) REPORTING REQUIREMENTS.—

(1) Section 212(f) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702(f)) is amended to read as follows:

‘‘(f) REPORTING REQUIREMENTS.—

‘‘(1) IN GENERAL.—Not later than December 31, 2001, and

every 2 years thereafter during the period this title is in effect,

the United States Trade Representative shall submit to Congress a report regarding the operation of this title, including—

‘‘(A) with respect to subsections (b) and (c), the results

of a general review of beneficiary countries based on the

considerations described in such subsections; and

38

‘‘(B) the performance of each beneficiary country or

CBTPA beneficiary country, as the case may be, under the

criteria set forth in section 213(b)(5)(B).

‘‘(2) PUBLIC COMMENT.—Before submitting the report described in paragraph (1), the United States Trade Representative shall publish a notice in the Federal Register requesting

public comments on whether beneficiary countries are meeting

the criteria listed in section 213(b)(5)(B).’’.

(2) Section 203(f) of the Andean Trade Preference Act (19

U.S.C. 3202(f)) is amended—

(A) by striking ‘‘TRIENNIAL REPORT’’ in the heading

and inserting ‘‘REPORT’’; and

(B) by striking ‘‘On or before’’ and all that follows

through ‘‘enactment of this title’’ and inserting ‘‘Not later

than January 31, 2001’’.

(d) INTERNATIONAL TRADE COMMISSION REPORTS.—

(1) Section 215(a) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2704(a)) is amended to read as follows:

‘‘(a) REPORTING REQUIREMENT.—

‘‘(1) IN GENERAL.—The United States International Trade

Commission (in this section referred to as the ‘Commission’)

shall submit to Congress and the President biennial reports regarding the economic impact of this title on United States industries and consumers and on the economy of the beneficiary

countries.

‘‘(2) FIRST REPORT.—The first report shall be submitted not

later than September 30, 2001.

‘‘(3) TREATMENT OF PUERTO RICO, ETC.—For purposes of

this section, industries in the Commonwealth of Puerto Rico

and the insular possessions of the United States are considered

to be United States industries.’’.

(2) Section 206(a) of the Andean Trade Preference Act (19

U.S.C. 3204(a)) is amended to read as follows:

‘‘(a) REPORTING REQUIREMENTS.—

‘‘(1) IN GENERAL.—The United States International Trade

Commission (in this section referred to as the ‘Commission’)

shall submit to Congress and the President biennial reports regarding the economic impact of this title on United States industries and consumers, and, in conjunction with other agencies, the effectiveness of this title in promoting drug-related crop

eradication and crop substitution efforts of the beneficiary countries.

‘‘(2) SUBMISSION.—During the period that this title is in effect, the report required by paragraph (1) shall be submitted on

December 31 of each year that the report required by section

215 of the Caribbean Basin Economic Recovery Act is not submitted.

‘‘(3) TREATMENT OF PUERTO RICO, ETC.—For purposes of

this section, industries in the Commonwealth of Puerto Rico

and the insular possessions of the United States are considered

to be United States industries.’’.

(e) TECHNICAL AND CONFORMING AMENDMENTS.—

(1) IN GENERAL.—

39

(A) Section 211 of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2701) is amended by inserting ‘‘(or

other preferential treatment)’’ after ‘‘treatment’’.

(B) Section 213(a)(1) of the Caribbean Basin Economic

Recovery Act (19 U.S.C. 2703(a)(1)) is amended by inserting

‘‘and except as provided in subsection (b) (2) and (3),’’ after

‘‘Tax Reform Act of 1986,’’.

(2) DEFINITIONS.—Section 212(a)(1) of the Caribbean Basin

Economic Recovery Act (19 U.S.C. 2702(a)(1)) is amended by

adding at the end the following new subparagraphs:

‘‘(D) The term ‘NAFTA’ means the North American

Free Trade Agreement entered into between the United

States, Mexico, and Canada on December 17, 1992.

‘‘(E) The terms ‘WTO’ and ‘WTO member’ have the

meanings given those terms in section 2 of the Uruguay

Round Agreements Act (19 U.S.C. 3501).’’.

SEC. 214. DUTY-FREE TREATMENT FOR CERTAIN BEVERAGES MADE

WITH CARIBBEAN RUM.

Section 213(a) of the Caribbean Basin Economic Recovery Act

(19 U.S.C. 2703(a)) is amended—

(1) in paragraph (5), by striking ‘‘chapter’’ and inserting

‘‘title’’; and

(2) by adding at the end the following new paragraph:

‘‘(6) Notwithstanding paragraph (1), the duty-free treatment

provided under this title shall apply to liqueurs and spirituous beverages produced in the territory of Canada from rum if—

‘‘(A) such rum is the growth, product, or manufacture of a

beneficiary country or of the Virgin Islands of the United

States;

‘‘(B) such rum is imported directly from a beneficiary country or the Virgin Islands of the United States into the territory

of Canada, and such liqueurs and spirituous beverages are imported directly from the territory of Canada into the customs

territory of the United States;

‘‘(C) when imported into the customs territory of the United

States, such liqueurs and spirituous beverages are classified in

subheading 2208.90 or 2208.40 of the HTS; and

‘‘(D) such rum accounts for at least 90 percent by volume

of the alcoholic content of such liqueurs and spirituous beverages.’’.

SEC. 215. MEETINGS OF TRADE MINISTERS AND USTR.

(a) SCHEDULE OF MEETINGS.—The President shall take the necessary steps to convene a meeting with the trade ministers of the

CBTPA beneficiary countries in order to establish a schedule of regular meetings, to commence as soon as is practicable, of the trade

ministers and the Trade Representative, for the purpose set forth in

subsection (b).

(b) PURPOSE.—The purpose of the meetings scheduled under

subsection (a) is to reach agreement between the United States and

CBTPA beneficiary countries on the likely timing and procedures for

initiating negotiations for CBTPA beneficiary countries to enter into

mutually advantageous free trade agreements with the United

States that contain provisions comparable to those in the NAFTA

40

and would make substantial progress in achieving the negotiating

objectives set forth in section 108(b)(5) of Public Law 103–182 (19

U.S.C. 3317(b)(5)).

(c) DEFINITION.—In this section, the term ‘‘CBTPA beneficiary

country’’ has the meaning given that term in section 213(b)(5)(B) of

the Caribbean Basin Economic Recovery Act.

TITLE III—NORMAL TRADE RELATIONS

SEC. 301. NORMAL TRADE RELATIONS FOR ALBANIA.

(a) FINDINGS.—Congress makes the following findings:

(1) Albania has been found to be in full compliance with

the freedom of emigration requirements under title IV of the

Trade Act of 1974.

(2) Since its emergence from communism, Albania has

made progress toward democratic rule and the creation of a

free-market economy.

(3) Albania has concluded a bilateral investment treaty

with the United States.

(4) Albania has demonstrated a strong desire to build a

friendly relationship with the United States and has been very

cooperative with NATO and the international community during and after the Kosova crisis.

(5) The extension of unconditional normal trade relations

treatment to the products of Albania will enable the United

States to avail itself of all rights under the World Trade Organization with respect to Albania when that country becomes a

member of the World Trade Organization.

(b) TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE

ACT OF 1974 TO ALBANIA.—

(1) PRESIDENTIAL DETERMINATIONS AND EXTENSIONS OF

NONDISCRIMINATORY TREATMENT.—Notwithstanding any provision of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.),

the President may—

(A) determine that such title should no longer apply to

Albania; and

(B) after making a determination under subparagraph

(A) with respect to Albania, proclaim the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of that country.

(2) TERMINATION OF APPLICATION OF TITLE IV.—On or after

the effective date of the extension under paragraph (1)(B) of

nondiscriminatory treatment to the products of Albania, title IV

of the Trade Act of 1974 shall cease to apply to that country.

SEC. 302. NORMAL TRADE RELATIONS FOR KYRGYZSTAN.

(a) FINDINGS.—Congress makes the following findings:

(1) Kyrgyzstan has been found to be in full compliance with

the freedom of emigration requirements under title IV of the

Trade Act of 1974.

(2) Since its independence from the Soviet Union in 1991,

Kyrgyzstan has made great progress toward democratic rule

and toward creating a free-market economic system.

41

(3) Kyrgyzstan concluded a bilateral investment treaty with

the United States in 1994.

(4) Kyrgyzstan has demonstrated a strong desire to build a

friendly and cooperative relationship with the United States.

(5) The extension of unconditional normal trade relations

treatment to the products of Kyrgyzstan will enable the United

States to avail itself of all rights under the World Trade Organization with respect to Kyrgyzstan.

(b) TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE

ACT OF 1974 TO KYRGYZSTAN.— (1) PRESIDENTIAL DETERMINATIONS AND EXTENSIONS OF

NONDISCRIMINATORY TREATMENT.—Notwithstanding any provision of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.),

the President may—

(A) determine that such title should no longer apply to

Kyrgyzstan; and

(B) after making a determination under subparagraph

(A) with respect to Kyrgyzstan, proclaim the extension of

nondiscriminatory treatment (normal trade relations treatment) to the products of that country.

(2) TERMINATION OF APPLICATION OF TITLE IV.—On or after

the effective date of the extension under paragraph (1)(B) of

nondiscriminatory treatment to the products of Kyrgyzstan, title

IV of the Trade Act of 1974 shall cease to apply to that country.

TITLE IV—OTHER TRADE PROVISIONS

SEC. 401. REPORT ON EMPLOYMENT AND TRADE ADJUSTMENT ASSISTANCE.

(a) IN GENERAL.—Not later than 9 months after the date of enactment of this section, the Comptroller General of the United States

shall submit to Congress a report regarding the efficiency and effectiveness of Federal and State coordination of employment and retraining activities associated with the following programs and legislation:

(1) Trade adjustment assistance (including NAFTA trade

adjustment assistance) provided for under title II of the Trade

Act of 1974.

(2) The Job Training Partnership Act.

(3) The Workforce Investment Act of 1998.

(4) Unemployment insurance.

(b) PERIOD COVERED.—The report shall cover the activities involved in the programs and legislation listed in subsection (a) from

January 1, 1994, to December 31, 1999.

(c) DATA AND RECOMMENDATIONS.—The report shall at a minimum include specific data and recommendations regarding—

(1) the compatibility of program requirements related to the

employment and retraining of dislocated workers in the United

States, with particular emphasis on the trade adjustment assistance programs provided for under title II of the Trade Act

of 1974;

(2) the compatibility of application procedures related to the

employment and retraining of dislocated workers in the United

States;

42

(3) the capacity of the programs in addressing foreign trade

and the transfer of production to other countries on workers in

the United States measured in terms of loss of employment and

wages;

(4) the capacity of the programs in addressing foreign trade

and the transfer of production to other countries on secondary

workers in the United States measured in terms of loss of employment and wages;

(5) how the impact of foreign trade and the transfer of production to other countries would have changed the number of

beneficiaries covered under the trade adjustment assistance program if the trade adjustment assistance program covered secondary workers in the United States; and

(6) the effectiveness of the programs described in subsection

(a) in achieving reemployment of United States workers and

maintaining wage levels of United States workers who have

been dislocated as a result of foreign trade and the transfer of

production to other countries.

SEC. 402. TRADE ADJUSTMENT ASSISTANCE.

(a) CERTIFICATION OF ELIGIBILITY FOR WORKERS REQUIRED FOR

DECOMMISSIONING OR CLOSURE OF FACILITY.—

(1) IN GENERAL.—Notwithstanding any other provision of

law or any decision by the Secretary of Labor denying certification or eligibility for certification for adjustment assistance

under title II of the Trade Act of 1974, a qualified worker described in paragraph (2) shall be certified by the Secretary as

eligible to apply for adjustment assistance under such title II.

(2) QUALIFIED WORKER.—For purposes of this subsection, a

‘‘qualified worker’’ means a worker who—

(A) was determined to be covered under Trade Adjustment Assistance Certification TA–W–28,438; and

(B) was necessary for the decommissioning or closure of

a nuclear power facility.

(b) EFFECTIVE DATE.—The amendment made by this section

shall take effect on the date of enactment of this Act.

SEC. 403. RELIQUIDATION OF CERTAIN NUCLEAR FUEL ASSEMBLIES.

(a) IN GENERAL.—Notwithstanding section 514 of the Tariff Act

of 1930 (19 U.S.C. 1514) or any other provision of law, upon proper

request filed with the Secretary of the Treasury not later than 90

days after the date of enactment of this Act, the Secretary shall—

(1) reliquidate as free of duty the entries listed in subsection (b); and

(2) refund any duties paid with respect to such entries as

shown on Customs Service Collection Receipt Number

527006753.

(b) ENTRIES.—The entries referred to in subsection (a) are as

follows:

Entry number Date of entry

062–2320014–5 ..................................... January 16, 1996

062–2320085–5 ..................................... February 13, 1996

839–4030989–7 ..................................... November 25, 1996

839–4031053–1 ..................................... December 2, 1996

839–4031591–0 ..................................... January 21, 1997.

43

SEC. 404. REPORTS TO THE FINANCE AND WAYS AND MEANS COMMITTEES.

(a) REPORTS REGARDING INITIATIVES TO UPDATE THE INTERNATIONAL MONETARY FUND.—Section 607 of the Foreign Operations, Export Financing, and Related Appropriations Act, 1999 (as

contained in section 101(d) of division A of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999)

(Public Law 105–277; 112 Stat. 2681–224), relating to international

financial programs and reform, is amended—

(1) by inserting ‘‘Finance,’’ after ‘‘Foreign Relations,’’; and

(2) by inserting ‘‘, Ways and Means,’’ before ‘‘and Banking

and Financial Services’’.

(b) REPORTS ON FINANCIAL STABILIZATION PROGRAMS.—Section

1704(b) of the International Financial Institutions Act (22 U.S.C.

262r–3(b)) is amended to read as follows:

‘‘(b) TIMING.—Not later than March 15, 1999, and semiannually thereafter, the Secretary of the Treasury shall submit to the

Committees on Banking and Financial Services, Ways and Means,

and International Relations of the House of Representatives and the

Committees on Finance, Foreign Relations, and Banking, Housing,

and Urban Affairs of the Senate a report on the matters described

in subsection (a).’’.

(c) ANNUAL REPORT ON THE STATE OF THE INTERNATIONAL FINANCIAL SYSTEM, IMF REFORM, AND COMPLIANCE WITH IMF

AGREEMENTS.—Section 1705(a) of the International Financial Institutions Act (22 U.S.C. 262r–4(a)) is amended by striking ‘‘Committee on Banking and Financial Services of the House of Representatives and the Committee on Foreign Relations of the Senate’’

and inserting ‘‘Committees on Banking and Financial Services and

on Ways and Means of the House of Representatives and the Committees on Finance and on Foreign Relations of the Senate’’.

(d) AUDITS OF THE IMF.—Section 1706(a) of the International

Financial Institutions Act (22 U.S.C. 262r–5(a)) is amended by

striking ‘‘Committee on Banking and Financial Services of the

House of Representatives and the Committee on Foreign Relations

of the Senate’’ and inserting ‘‘Committees on Banking and Financial

Services and on Ways and Means of the House of Representatives

and the Committees on Finance and on Foreign Relations of the

Senate’’.

(e) REPORT ON PROTECTION OF BORDERS AGAINST DRUG TRAFFIC.—Section 629 of the Treasury and General Government Appropriations Act, 1999 (as contained in section 101(h) of division A of

the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999) (Public Law 105–277; 112 Stat. 2681–522), relating to general provisions, is amended by adding at the end the

following new paragraph:

‘‘(3) For purposes of paragraph (1), the term ‘appropriate congressional committees’ includes the Committee on Finance of the

Senate and the Committee on Ways and Means of the House of Representatives.’’.

SEC. 405. CLARIFICATION OF SECTION 334 OF THE URUGUAY ROUND

AGREEMENTS ACT.

(a) IN GENERAL.—Section 334(b)(2) of the Uruguay Round

Agreements Act (19 U.S.C. 3592(b)(2)) is amended—

44

(1) by redesignating subparagraphs (A) and (B) as clauses

(i) and (ii), respectively;

(2) in the matter preceding clause (i) (as redesignated), by

striking ‘‘Notwithstanding paragraph (1)(D)’’ and inserting ‘‘(A)

Notwithstanding paragraph (1)(D) and except as provided in

subparagraphs (B) and (C)’’; and

(3) by adding at the end the following:

‘‘(B) Notwithstanding paragraph (1)(C), fabric classified

under the HTS as of silk, cotton, man-made fiber, or vegetable

fiber shall be considered to originate in, and be the growth,

product, or manufacture of, the country, territory, or possession

in which the fabric is both dyed and printed when accompanied

by 2 or more of the following finishing operations: bleaching,

shrinking, fulling, napping, decating, permanent stiffening,

weighting, permanent embossing, or moireing.

‘‘(C) Notwithstanding paragraph (1)(D), goods classified

under HTS heading 6117.10, 6213.00, 6214.00, 6302.22,

6302.29, 6302.52, 6302.53, 6302.59, 6302.92, 6302.93, 6302.99,

6303.92, 6303.99, 6304.19, 6304.93, 6304.99, 9404.90.85, or

9404.90.95, except for goods classified under such headings as

of cotton or of wool or consisting of fiber blends containing 16

percent or more by weight of cotton, shall be considered to originate in, and be the growth, product, or manufacture of, the

country, territory, or possession in which the fabric is both dyed

and printed when accompanied by 2 or more of the following

finishing operations: bleaching, shrinking, fulling, napping,

decating, permanent stiffening, weighting, permanent embossing, or moireing.’’.

(b) EFFECTIVE DATE.—The amendments made by this section

apply to goods entered, or withdrawn from warehouse for consumption, on or after the date of enactment of this Act.

SEC. 406. CHIEF AGRICULTURAL NEGOTIATOR.

Section 141 of the Trade Act of 1974 (19 U.S.C. 2171) is

amended—

(1) by amending subsection (b)(2) to read as follows:

‘‘(2) There shall be in the Office three Deputy United States

Trade Representatives and one Chief Agricultural Negotiator

who shall be appointed by the President, by and with the advice

and consent of the Senate. As an exercise of the rulemaking

power of the Senate, any nomination of a Deputy United States

Trade Representative or the Chief Agricultural Negotiator submitted to the Senate for its advice and consent, and referred to

a committee, shall be referred to the Committee on Finance.

Each Deputy United States Trade Representative and the Chief

Agricultural Negotiator shall hold office at the pleasure of the

President and shall have the rank of Ambassador.’’; and

(2) in subsection (c), by adding at the end the following new

paragraph:

‘‘(5) The principal function of the Chief Agricultural Negotiator shall be to conduct trade negotiations and to enforce

trade agreements relating to United States agricultural products and services. The Chief Agricultural Negotiator shall be a

vigorous advocate on behalf of United States agricultural interests. The Chief Agricultural Negotiator shall perform such other

45

functions as the United States Trade Representative may direct.’’.

SEC. 407. REVISION OF RETALIATION LIST OR OTHER REMEDIAL ACTION.

Section 306(b)(2) of the Trade Act of 1974 (19 U.S.C. 2416(b)(2))

is amended—

(1) by striking ‘‘If the’’ and inserting the following:

‘‘(A) FAILURE TO IMPLEMENT RECOMMENDATION.—If

the’’; and

(2) by adding at the end the following:

‘‘(B) REVISION OF RETALIATION LIST AND ACTION.— ‘‘(i) IN GENERAL.—Except as provided in clause (ii),

in the event that the United States initiates a retaliation list or takes any other action described in section

301(c)(1) (A) or (B) against the goods of a foreign country or countries because of the failure of such country

or countries to implement the recommendation made

pursuant to a dispute settlement proceeding under the

World Trade Organization, the Trade Representative

shall periodically revise the list or action to affect other

goods of the country or countries that have failed to implement the recommendation.

‘‘(ii) EXCEPTION.—The Trade Representative is not

required to revise the retaliation list or the action described in clause (i) with respect to a country, if—

‘‘(I) the Trade Representative determines that

implementation of a recommendation made pursuant to a dispute settlement proceeding described in

clause (i) by the country is imminent; or

‘‘(II) the Trade Representative together with

the petitioner involved in the initial investigation

under this chapter (or if no petition was filed, the

affected United States industry) agree that it is unnecessary to revise the retaliation list.

‘‘(C) SCHEDULE FOR REVISING LIST OR ACTION.—The

Trade Representative shall, 120 days after the date the retaliation list or other section 301(a) action is first taken,

and every 180 days thereafter, review the list or action

taken and revise, in whole or in part, the list or action to

affect other goods of the subject country or countries.

‘‘(D) STANDARDS FOR REVISING LIST OR ACTION.—In revising any list or action against a country or countries

under this subsection, the Trade Representative shall act in

a manner that is most likely to result in the country or

countries implementing the recommendations adopted in

the dispute settlement proceeding or in achieving a mutually satisfactory solution to the issue that gave rise to the

dispute settlement proceeding. The Trade Representative

shall consult with the petitioner, if any, involved in the initial investigation under this chapter.

‘‘(E) RETALIATION LIST.—The term ‘retaliation list’

means the list of products of a foreign country or countries

that have failed to comply with the report of the panel or

Appellate Body of the WTO and with respect to which the

46

Trade Representative is imposing duties above the level

that would otherwise be imposed under the Harmonized

Tariff Schedule of the United States.

‘‘(F) REQUIREMENT TO INCLUDE RECIPROCAL GOODS ON

RETALIATION LIST.—The Trade Representative shall include

on the retaliation list, and on any revised lists, reciprocal

goods of the industries affected by the failure of the foreign

country or countries to implement the recommendation

made pursuant to a dispute settlement proceeding under

the World Trade Organization, except in cases where existing retaliation and its corresponding preliminary retaliation list do not already meet this requirement.’’.

SEC. 408. REPORT ON TRADE ADJUSTMENT ASSISTANCE FOR AGRICULTURAL COMMODITY PRODUCERS.

(a) IN GENERAL.—Not later than 4 months after the date of enactment of this Act, the Secretary of Labor, in consultation with the

Secretary of Agriculture and the Secretary of Commerce, shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report

that—

(1) examines the applicability to agricultural commodity

producers of trade adjustment assistance programs established

under title II of the Trade Act of 1974; and

(2) sets forth recommendations to improve the operation of

those programs as the programs apply to agricultural commodity producers or to establish a new trade adjustment assistance program for agricultural commodity producers.

(b) CONTENTS.—In preparing the report required by subsection

(a), the Secretary of Labor shall—

(1) assess the degree to which the existing trade adjustment

assistance programs address the adverse effects on agricultural

commodity producers due to price suppression caused by increased imports of like or directly competitive agricultural commodities; and

(2) examine the effectiveness of the program benefits authorized under subchapter B of chapter 2 and chapter 3 of title II

of the Trade Act of 1974 in remedying the adverse effects, including price suppression, caused by increased imports of like

or directly competitive agricultural commodities.

(c) DEFINITIONS.—In this section:

(1) AGRICULTURAL COMMODITY.—The term ‘‘agricultural

commodity’’ means any agricultural commodity, including livestock, fish or harvested seafood in its raw or natural state.

(2) AGRICULTURAL COMMODITY PRODUCER.—The term ‘‘agricultural commodity producer’’ means any person who is engaged in the production and sale of an agricultural commodity

in the United States and who owns or shares the ownership

and risk of loss of the agricultural commodity.

SEC. 409. AGRICULTURAL TRADE NEGOTIATING OBJECTIVES AND

CONSULTATIONS WITH CONGRESS.

(a) FINDINGS.—Congress finds that—

(1) United States agriculture contributes positively to the

United States balance of trade and United States agricultural

exports support in excess of 1,000,000 United States jobs;

47

(2) United States agriculture competes successfully worldwide despite the fact that United States producers are at a competitive disadvantage because of the trade distorting support

and subsidy practices of other countries and despite the fact

that significant tariff and nontariff barriers exist to United

States exports; and

(3) a successful conclusion of the current World Trade Organization agricultural negotiations is critically important to

the United States agricultural sector.

(b) OBJECTIVES.—The agricultural trade negotiating objectives

of the United States with respect to the current World Trade Organization agricultural negotiations include as matters of the highest

priority—

(1) the expeditious elimination of all export subsidies

worldwide while maintaining bona fide food aid and preserving

United States market development and export credit programs

that allow the United States to compete with other foreign export promotion efforts;

(2) leveling the playing field for United States producers of

agricultural products by eliminating blue box subsidies and

disciplining domestic supports in a way that forces producers to

face world prices on all production in excess of domestic food

security needs while allowing the preservation of nontrade distorting programs to support family farms and rural communities;

(3) the elimination of state trading enterprises or the adoption of rigorous disciplines that ensure operational transparency, competition, and the end of discriminatory pricing

practices, including policies supporting cross-subsidization and

price undercutting in export markets;

(4) affirming that the World Trade Organization Agreement

on the Application of Sanitary and Phytosanitary Measures applies to new technologies, including biotechnology, and that labeling requirements to allow consumers to make choices regarding biotechnology products or other regulatory requirements

may not be used as disguised barriers to trade;

(5) increasing opportunities for United States exports of agricultural products by reducing tariffs to the same levels that

exist in the United States or to lower levels and by eliminating

all nontariff barriers, including—

(A) restrictive or trade distorting practices, including

those that adversely impact perishable or cyclical products;

(B) restrictive rules in the administration of tariff-rate

quotas; and

(C) other barriers to agriculture trade, including unjustified restrictions or commercial requirements affecting

new technologies, including biotechnology;

(6) eliminating government policies that create price-depressing surpluses; and

(7) strengthening dispute settlement procedures to ensure

prompt compliance by foreign governments with their World

Trade Organization obligations including commitments not to

maintain unjustified restrictions on United States exports.

(c) CONSULTATION WITH CONGRESSIONAL COMMITTEES.—

48

(1) CONSULTATION BEFORE OFFER MADE.—In developing

and before submitting an initial or revised negotiating proposal

that would reduce United States tariffs on agricultural products or require a change in United States agricultural law, the

United States Trade Representative shall consult with the Committee on Agriculture, Nutrition, and Forestry and the Committee on Finance of the Senate and the Committee on Agriculture and the Committee on Ways and Means of the House of

Representatives.

(2) CONSULTATION WITH CONGRESSIONAL TRADE ADVISERS.—Prior to and during the course of current negotiations on

agricultural trade, the United States Trade Representative shall

consult closely with the congressional trade advisers.

(3) CONSULTATION BEFORE AGREEMENT INITIALED.—Not

less than 48 hours before initialing an agreement reached as

part of current World Trade Organization agricultural negotiations, the United States Trade Representative shall consult

closely with the committees referred to in paragraph (1)

regarding—

(A) the details of the agreement;

(B) the potential impact of the agreement on United

States agricultural producers; and

(C) any changes in United States law necessary to implement the agreement.

(4) DISCLOSURE OF COMMITMENTS.—Any agreement or

other understanding addressing agricultural trade with a foreign government or governments (whether oral or in writing)

that relates to a trade agreement with respect to which Congress must enact implementing legislation and that is not disclosed to Congress before legislation implementing that agreement is introduced in either House of Congress shall not be considered to be part of the agreement approved by Congress and

shall have no force and effect under United States law or in any

dispute settlement body.

(d) SENSE OF CONGRESS.—It is the sense of Congress that—

(1) granting the President trade negotiating authority is essential to the successful conclusion of the new round of World

Trade Organization agricultural negotiations;

(2) reaching a successful agreement on agriculture should

be the top priority of United States negotiators; and

(3) if by the conclusion of the negotiations, the primary agricultural competitors of the United States do not agree to reduce their trade distorting domestic supports and eliminate export subsidies in accordance with the negotiating objectives expressed in this section, the United States should take steps to

increase the leverage of United States negotiators and level the

playing field for United States producers.

SEC. 410. ENTRY PROCEDURES FOR FOREIGN TRADE ZONE OPERATIONS.

(a) IN GENERAL.—Section 484 of the Tariff Act of 1930 (19

U.S.C. 1484) is amended by adding at the end the following new

subsection:

‘‘(i) SPECIAL RULE FOR FOREIGN TRADE ZONE OPERATIONS.—

49

‘‘(1) IN GENERAL.—Notwithstanding any other provision of

law and except as provided in paragraph (3), all merchandise

(including merchandise of different classes, types, and categories), withdrawn from a foreign trade zone during any 7-day

period, shall, at the option of the operator or user of the zone,

be the subject of a single estimated entry or release filed on or

before the first day of the 7-day period in which the merchandise is to be withdrawn from the zone. The estimated entry or

release shall be treated as a single entry and a single release

of merchandise for purposes of section 13031(a)(9)(A) of the

Consolidated Omnibus Budget Reconciliation Act of 1985 (19

U.S.C. 58c(a)(9)(A)) and all fee exclusions and limitations of

such section 13031 shall apply, including the maximum and

minimum fee amounts provided for under subsection (b)(8)(A)(i)

of such section. The entry summary for the estimated entry or

release shall cover only the merchandise actually withdrawn

from the foreign trade zone during the 7-day period.

‘‘(2) OTHER REQUIREMENTS.—The Secretary of the Treasury

may require that the operator or user of the zone—

‘‘(A) use an electronic data interchange approved by the

Customs Service—

‘‘(i) to file the entries described in paragraph (1);

and

‘‘(ii) to pay the applicable duties, fees, and taxes

with respect to the entries; and

‘‘(B) satisfy the Customs Service that accounting, transportation, and other controls over the merchandise are adequate to protect the revenue and meet the requirements of

other Federal agencies.

‘‘(3) EXCEPTION.—The provisions of paragraph (1) shall not

apply to merchandise the entry of which is prohibited by law

or merchandise for which the filing of an entry summary is required before the merchandise is released from customs custody.

‘‘(4) FOREIGN TRADE ZONE; ZONE.—In this subsection, the

terms ‘foreign trade zone’ and ‘zone’ mean a zone established

pursuant to the Act of June 18, 1934, commonly known as the

Foreign Trade Zones Act (19 U.S.C. 81a et seq.).’’.

(b) EFFECTIVE DATE.—The amendment made by this section

shall take effect on the date that is 60 days after the date of enactment of this Act.

SEC. 411. GOODS MADE WITH FORCED OR INDENTURED CHILD LABOR.

(a) IN GENERAL.—Section 307 of the Tariff Act of 1930 (19

U.S.C. 1307) is amended by adding at the end the following new

sentence: ‘‘For purposes of this section, the term ‘forced labor or/and

indentured labor’ includes forced or indentured child labor.’’.

(b) EFFECTIVE DATE.—The amendment made by this section

shall take effect on the date of enactment of this Act.

SEC. 412. WORST FORMS OF CHILD LABOR.

(a) IN GENERAL.—Section 502(b)(2) of the Trade Act of 1974 (19

U.S.C. 2462(b)(2) is amended—

(1) by inserting after subparagraph (G) the following new

subparagraph:

50

‘‘(H) Such country has not implemented its commitments to eliminate the worst forms of child labor.’’; and

(2) in the flush paragraph at the end, by striking ‘‘and (G)’’

and inserting ‘‘(G), and (H) (to the extent described in section

507(6)(A), (B), and (C))’’.

(b) DEFINITION OF WORST FORMS OF CHILD LABOR.—Section

507 of the Trade Act of 1974 (19 U.S.C. 2467) is amended by adding at the end the following new paragraph:

‘‘(6) WORST FORMS OF CHILD LABOR.—The term ‘worst forms

of child labor’ means—

‘‘(A) all forms of slavery or practices similar to slavery,

such as the sale or trafficking of children, debt bondage

and serfdom, or forced or compulsory labor, including

forced or compulsory recruitment of children for use in

armed conflict;

‘‘(B) the use, procuring, or offering of a child for prostitution, for the production of pornography or for pornographic purposes;

‘‘(C) the use, procuring, or offering of a child for illicit

activities in particular for the production and trafficking of

drugs; and

‘‘(D) work which, by its nature or the circumstances in

which it is carried out, is likely to harm the health, safety,

or morals of children.

The work referred to in subparagraph (D) shall be determined

by the laws, regulations, or competent authority of the beneficiary developing country involved.’’.

(c) ANNUAL REPORT.—Section 504 of the Trade Act of 1974 (19

U.S.C. 2464) is amended by inserting ‘‘, including the findings of

the Secretary of Labor with respect to the beneficiary country’s implementation of its international commitments to eliminate the

worst forms of child labor’’ before the end period.

TITLE V—IMPORTS OF CERTAIN WOOL

ARTICLES

SEC. 501. TEMPORARY DUTY REDUCTIONS.

(a) CERTAIN WORSTED WOOL FABRICS WITH AVERAGE FIBER DIAMETERS GREATER THAN 18.5 MICRON.—

(1) IN GENERAL.—Subchapter II of chapter 99 of the Harmonized Tariff Schedule of the United States is amended by inserting in numerical sequence the following new heading:

51

‘‘ 9902.51.11 Fabrics, of worsted

wool, with average

fiber diameters

greater than 18.5

micron, all the

foregoing certified

by the importer as

suitable for use in

making suits, suittype jackets, or

trousers (provided

for in subheadings

5111.11.70,

5111.19.60,

5112.11.20, or

5112.19.90) ........... 19.3% No change No change On or before

12/31/2003 ’’.

(2) STAGED RATE REDUCTIONS.—Any staged rate reduction

of a rate of duty set forth in subheading 6203.31.00 of the Harmonized Tariff Schedule of the United States that is proclaimed

by the President shall also apply to the corresponding rate

of duty set forth in heading 9902.51.11 of such Schedule, as added

by paragraph (1).

(b) CERTAIN WORSTED WOOL FABRICS WITH AVERAGE FIBER DIAMETERS OF 18.5 MICRON OR LESS.—

(1) IN GENERAL.—Subchapter II of chapter 99 of the Harmonized Tariff Schedule of the United States is amended by inserting in numerical sequence the following new heading:

‘‘ 9902.51.12 Fabrics, of worsted

wool, with average

fiber diameters of

18.5 micron or

less, all the foregoing certified by

the importer as

suitable for use in

making suits, suittype jackets, or

trousers (provided

for in subheadings

5111.11.70,

5111.19.60,

5112.11.20, or

5112.19.90) ........... 6% No change No change On or before

12/31/2003 ’’.

(2) EQUALIZATION WITH CANADIAN DUTY RATES.—The President is authorized to proclaim a reduction in the rate of duty

applicable to imports of worsted wool fabrics classified under

subheading 9902.51.12 of the Harmonized Tariff Schedule of

the United States, as added by paragraph (1), that is necessary

to equalize such rate of duty with the most favored nation rate

of duty applicable to imports of worsted wool fabrics of the kind

described in such subheading imported into Canada.

(c) DEFINITIONS.—The U.S. Notes to subchapter II of chapter 99

of the Harmonized Tariff Schedule of the United States are amended by adding at the end the following:

‘‘13. For purposes of headings 9902.51.11 and 9902.51.12, the

term ‘suit’ has the meaning given such term under note 3(a) of chapter 62 for purposes of headings 6203 and 6204.

52

‘‘14. For purposes of headings 9902.51.11 and 9902.51.12, the

term ‘making’ means cut and sewn in the United States.’’.

(d) LIMITATION ON QUANTITY OF IMPORTS.—The U.S. Notes to

subchapter II of chapter 99 of the Harmonized Tariff Schedule of

the United States, as amended by subsection (c), are further amended by adding at the end the following:

‘‘15. The aggregate quantity of worsted wool fabrics entered

under heading 9902.51.11 from January 1 to December 31 of each

year, inclusive, shall be limited to 2,500,000 square meter equivalents, or such other quantity proclaimed by the President pursuant

to section 504(b)(3) of the Trade and Development Act of 2000.

‘‘16. The aggregate quantity of worsted wool fabrics entered

under subheading 9902.51.12 from January 1 to December 31 of

each year, inclusive, shall be limited to 1,500,000 square meter

equivalents, or such other quantity proclaimed by the President pursuant to section 504(b)(3) of the Trade and Development Act of

2000.’’.

(e) ALLOCATION OF TARIFF-RATE QUOTAS.—In implementing the

limitation on the quantity of imports of worsted wool fabrics under

headings 9902.51.11 and 9902.51.12 of the Harmonized Tariff

Schedule of the United States, as required by U.S. Notes 15 and 16

of subchapter II of chapter 99 of such Schedule, respectively, for the

entry, or withdrawal from warehouse for consumption, the President, consistent with United States international obligations, shall

take such action as determined appropriate by the President to ensure that such fabrics are fairly allocated to persons (including

firms, corporations, or other legal entities) who cut and sew men’s

and boys’ worsted wool suits and suit-like jackets and trousers in

the United States and who apply for an allocation based on the

amount of such suits cut and sewn during the prior calendar year.

(f) EFFECTIVE DATE.—The amendments made by this section

apply with respect to goods entered, or withdrawn from warehouse

for consumption, on or after January 1, 2001.

SEC. 502. TEMPORARY DUTY SUSPENSIONS.

(a) WOOL YARN WITH AVERAGE FIBER DIAMETERS OF 18.5 MI- CRON OR LESS.—Subchapter II of chapter 99 of the Harmonized

Tariff Schedule of the United States is amended by inserting in numerical sequence the following new heading:

‘‘ 9902.51.13 Yarn, of combed

wool, not put up

for retail sale, containing 85 percent

or more by weight

of wool, of 64’s

and linen worsted

wool count wool

yarn formed with

wool fibers having

diameters of 18.5

micron or less

(provided for in

subheading

5107.10.00) ........... Free No change No change On or before

12/31/2003 ’’.

(b) WOOL FIBER AND WOOL TOP WITH AVERAGE DIAMETERS OF

18.5 MICRON OR LESS.—Subchapter II of chapter 99 of the HarVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00052 Fmt 6659 Sfmt 6603 E:\HR\OC\A606HR.027 pfrm02 PsN: A606HR
53

monized Tariff Schedule of the United States is amended by inserting in numerical sequence the following new heading:

‘‘ 9902.51.14 Wool fiber, waste,

garnetted stock,

combed wool, or

wool top, having

average fiber diameters of 18.5

micron or less

(provided for in

subheadings

5101.11, 5101.19,

5101.21, 5101.29,

5101.30, 5103.10,

5103.20, 5104.00,

5105.21, or

5105.29) ................ Free No change No change On or before

12/31/2003 ’’.

(c) EFFECTIVE DATE.—The amendments made by this section

apply with respect to goods entered, or withdrawn from warehouse

for consumption, on or after January 1, 2001.

SEC. 503. SEPARATE TARIFF LINE TREATMENT FOR WOOL YARN AND

MEN’S OR BOYS’ SUITS AND SUIT-TYPE JACKETS AND

TROUSERS OF WORSTED WOOL FABRIC.

(a) SEPARATE TARIFF LINE TREATMENT.—The President shall

proclaim 8-digit tariff categories, without changes in existing duty

rates, in chapters 51 and 62 of the Harmonized Tariff Schedule of

the United States in order to provide separate tariff treatment for—

(1) wool yarn made of wool fiber with an average fiber diameter of 18.5 micron or less, and wool fabrics made from

yarns with an average fiber diameter of 18.5 micron or less;

and

(2) men’s or boys’ suits, suit-type jackets and trousers of

worsted wool fabric, made of wool yarn having an average diameter of 18.5 micron or less.

(b) CONFORMING CHANGES.—The President is authorized to

make conforming changes in headings 9902.51.11, 9902.51.12,

9902.51.13, and 9902.51.14 of the Harmonized Tariff Schedule of

the United States to take into account the new permanent tariff categories proclaimed under subsection (a).

SEC. 504. MONITORING OF MARKET CONDITIONS AND AUTHORITY TO

MODIFY TARIFF REDUCTIONS.

(a) MONITORING OF MARKET CONDITIONS.—Beginning on the

date of the enactment of this Act, the President shall monitor market conditions in the United States, including domestic demand, domestic supply, and increases in domestic production, of worsted

wool fabrics and their components in the market for—

(1) men’s or boys’ worsted wool suits, suit-type jackets, and

trousers;

(2) worsted wool fabric and yarn used in the manufacture

of such suits, jackets and trousers; and

(3) wool used in the production of such fabrics and yarn.

(b) AUTHORITY TO MODIFY LIMITATION ON QUANTITY OF WORSTED WOOL FABRICS SUBJECT TO TARIFF REDUCTION.—

(1) IN GENERAL.—The President shall, on an annual basis,

consider requests made by United States manufacturers of apVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00053 Fmt 6659 Sfmt 6603 E:\HR\OC\A606HR.027 pfrm02 PsN: A606HR
54

parel products made of worsted wool fabrics described in subsection (a) to modify the limitation on the quantity of imports

of worsted wool fabrics under headings 9902.51.11 and

9902.51.12 of the Harmonized Tariff Schedule of the United

States, as required by U.S. Notes 15 and 16 of subchapter II

of chapter 99 of such Schedule, respectively.

(2) CONSIDERATION OF CERTAIN MARKET CONDITIONS.—In

determining whether to modify the limitation on the quantity of

imports of worsted wool fabrics described in paragraph (1), the

President shall consider the following United States market

conditions:

(A) Increases or decreases in sales of the domesticallyproduced worsted wool fabrics described in subsection (a).

(B) Increases or decreases in domestic production of

such fabrics.

(C) Increases or decreases in domestic production and

consumption of the apparel items described in subsection

(a).

(D) The ability of domestic producers of worsted wool

fabrics described in subsection (a) to meet the needs of domestic manufacturers of the apparel items described in subsection (a) in terms of quantity and ability to meet market

demands for the apparel items.

(E) Evidence that domestic manufacturers of worsted

wool fabrics have lost sales due to the temporary duty reductions on certain worsted wool fabrics under headings

9902.51.11 and 9902.51.12 of the Harmonized Tariff

Schedule of the United States (as added by subsections (a)

and (b) of section 501).

(F) Evidence that domestic manufacturers of apparel

items described in subsection (a) have lost sales due to the

inability to purchase adequate supplies of worsted wool fabrics on a cost competitive basis.

(G) Price per square meter of imports and domestic

sales of worsted wool fabrics.

(3) MODIFICATION OF LIMITATION ON QUANTITY OF FABRICS.—

(A) IN GENERAL.—If the President determines that the

limitation on the quantity of imports of worsted wool fabrics under headings 9902.51.11 and 9902.51.12 of the Harmonized Tariff Schedule of the United States should be

modified, the President shall proclaim such changes to U.S.

Note 15 or 16 to subchapter II of chapter 99 of such Schedule (as added by section 501(d)), as the President determines to be appropriate.

(B) ADDITIONAL REQUIREMENT.—In any calendar year,

any modification of the limitation on the quantity of imports of worsted wool fabrics under headings 9902.51.11

and 9902.51.12 of the Harmonized Tariff Schedule of the

United States shall not exceed—

(A) 1,000,000 square meter equivalents for worsted

wool fabrics under heading 9902.51.11; and

(B) 1,000,000 square meter equivalents for worsted

wool fabrics under heading 9902.51.12.

55

(c) IMPLEMENTATION.—The President shall issue regulations

necessary to implement the provisions of this section.

SEC. 505. REFUND OF DUTIES PAID ON IMPORTS OF CERTAIN WOOL

ARTICLES.

(a) WORSTED WOOL FABRICS.—In each of the calendar years

2000, 2001, and 2002, a manufacturer of men’s or boys’ suits, suittype jackets, or trousers (not a broker or other individual acting on

behalf of the manufacturer to process the import) of imported worsted wool fabrics of the kind described in heading 9902.51.11 or

9902.51.12 of the Harmonized Tariff Schedule of the United States

shall be eligible for a refund of duties paid on entries of such fabrics

in each such calendar year in an amount equal to one-third of the

amount of duties paid by the importer on such worsted wool fabrics

(without regard to micron level) imported in calendar year 1999.

(b) WOOL YARN.—In each of the calendar years 2000, 2001, and

2002, a manufacturer of worsted wool fabrics who imports wool

yarn of the kind described in heading 9902.51.13 of the Harmonized

Tariff Schedule of the United States shall be eligible for a refund

of duties paid on entries of such wool yarn in each such calendar

year in an amount equal to one-third of the amount of duties paid

by the manufacturer on such wool yarn (without regard to micron

level) imported in calendar year 1999.

(c) WOOL FIBER AND WOOL TOP.—In each of the calendar years

2000, 2001, and 2002, a manufacturer of wool yarn or wool fabric

who imports wool fiber or wool top of the kind described in heading

9902.51.14 of the Harmonized Tariff Schedule of the United States

shall be eligible for a refund of duties paid on entries of such wool

fiber in each such calendar year in an amount equal to one-third

of the amount of duties paid by the manufacturer on such wool fiber

(without regard to micron level) imported in calendar year 1999.

(d) PROPER IDENTIFICATION AND APPROPRIATE CLAIM.—Any

person applying for a rebate under this section shall properly identify and make appropriate claim for each entry involved.

SEC. 506. WOOL RESEARCH, DEVELOPMENT, AND PROMOTION TRUST

FUND.

(a) ESTABLISHMENT.—There is hereby established within the

Treasury of the United States a trust fund to be known as the Wool

Research, Development, and Promotion Trust Fund (hereinafter in

this section referred to as the ‘‘Trust Fund’’), consisting of such

amounts as may be transferred to the Trust Fund under subsection

(b)(1) and any amounts as may be credited to the Trust Fund under

subsection (c)(2).

(b) TRANSFER OF AMOUNTS.—

(1) IN GENERAL.—The Secretary of the Treasury shall

transfer to the Trust Fund out of the general fund of the Treasury of the United States amounts determined by the Secretary

of the Treasury to be equivalent to the amounts received into

such general fund that are attributable to the duty received on

articles under chapters 51 and 52 of the Harmonized Tariff

Schedule of the United States, subject to the limitation in paragraph (2).

(2) LIMITATION.—The Secretary shall not transfer more

than $2,250,000 to the Trust Fund in any fiscal year.

56

(3) TRANSFERS BASED ON ESTIMATES.—The amounts required to be transferred under paragraph (1) shall be transferred at least quarterly from the general fund of the Treasury

of the United States to the Trust Fund on the basis of estimates

made by the Secretary of the Treasury of the amounts referred

to in paragraph (1) that are received into the Treasury. Proper

adjustments shall be made in the amounts subsequently transferred to the extent prior estimates were in excess of, or less

than, the amounts required to be transferred.

(c) INVESTMENT OF TRUST FUND.—

(1) IN GENERAL.—It shall be the duty of the Secretary of the

Treasury to invest such portion of the Trust Fund as is not, in

the Secretary’s judgment, required to meet current withdrawals.

Such investments may be made only in interest-bearing obligations of the United States or in obligations guaranteed as to

both principal and interest by the United States. For such purpose, such obligations may be acquired on original issue at the

issue price or by purchase of outstanding obligations at the

market price. Any obligation acquired by the Trust Fund may

be sold by the Secretary of the Treasury at the market price.

(2) INTEREST AND PROCEEDS FROM SALE OR REDEMPTION OF

OBLIGATIONS.—The interest on, and the proceeds from the sale

or redemption of, any obligations held in the Trust Fund shall

be credited to and form a part of the Trust Fund.

(d) AVAILABILITY OF AMOUNTS FROM TRUST FUND.—From

amounts available in the Trust Fund (including any amounts not

obligated in previous fiscal years), the Secretary of Agriculture is

authorized to provide grants to a nationally-recognized council established for the development of the United States wool market for

the following purposes:

(1) Assist United States wool producers to improve the

quality of wool produced in the United States, including to improve wool production methods.

(2) Disseminate information on improvements described in

paragraph (1) to United States wool producers generally.

(3) Assist United States wool producers in the development

and promotion of the wool market.

(e) REPORTS TO CONGRESS.—The Secretary of the Treasury, in

consultation with the Secretary of Agriculture, shall prepare and

submit to Congress an annual report on the financial condition and

the results of the operations of the Trust Fund, including a description of the use of amounts of grants provided under subsection (d),

during the preceding fiscal year and on its expected condition and

operations during the next fiscal year.

(f) SUNSET PROVISION.—Effective January 1, 2004, the Trust

Fund shall be abolished and all amounts in the Trust Fund on such

date shall be transferred to the general fund of the Treasury of the

United States.

57

TITLE VI—REVENUE PROVISIONS

SEC. 601. APPLICATION OF DENIAL OF FOREIGN TAX CREDIT REGARDING TRADE AND INVESTMENT WITH RESPECT TO CERTAIN

FOREIGN COUNTRIES.

(a) IN GENERAL.—Section 901(j) of the Internal Revenue Code

of 1986 (relating to denial of foreign tax credit, etc., regarding trade

and investment with respect to certain foreign countries) is amended

by adding at the end the following new paragraph:

‘‘(5) WAIVER OF DENIAL.—

‘‘(A) IN GENERAL.—Paragraph (1) shall not apply with

respect to taxes paid or accrued to a country if the

President—

‘‘(i) determines that a waiver of the application of

such paragraph is in the national interest of the

United States and will expand trade and investment

opportunities for United States companies in such

country, and

‘‘(ii) reports such waiver under subparagraph (B).

‘‘(B) REPORT.—Not less than 30 days before the date on

which a waiver is granted under this paragraph, the President shall report to Congress—

‘‘(i) the intention to grant such waiver, and

‘‘(ii) the reason for the determination under subparagraph (A)(i).’’.

(b) EFFECTIVE DATE.—The amendment made by this section

shall apply on or after February 1, 2001.

SEC. 602. ACCELERATION OF COVER OVER PAYMENTS TO PUERTO

RICO AND VIRGIN ISLANDS.

(a) INITIAL PAYMENT.—Section 512(b) of the Ticket to Work and

Work Incentives Improvement Act of 1999 is amended—

(1) by striking ‘‘October 1, 2000,’’ in the matter preceding

paragraph (1) and inserting ‘‘the first day of the month within

which the date of enactment of the Trade and Development Act

of 2000 occurs,’’, and

(2) by striking paragraph (2) and inserting the following

new paragraph:

‘‘(2) SECOND TRANSFER OF INCREMENTAL INCREASE IN

COVER OVER ATTRIBUTABLE TO PERIODS BEFORE RESUMPTION OF

REGULAR PAYMENTS.—The Secretary of the Treasury shall

transfer on the first payment date after the date of enactment

of the Trade and Development Act of 2000 an amount equal to

the excess of—

‘‘(A) the amount of such increase otherwise required to

be covered over after June 30, 1999, and before the first day

of the month within which such date of enactment occurs,

over

‘‘(B) the amount of the transfer described in paragraph

(1).’’.

(b) CLARIFICATION OF DISPOSITION OF TAXES TO VIRGIN ISLANDS.—So much of paragraph (3) of section 7652(b) of the Internal

Revenue Code of 1986 (relating to Virgin Islands) as precedes subparagraph (B) thereof is amended to read as follows:

58

‘‘(3) DISPOSITION OF INTERNAL REVENUE COLLECTIONS.—

The Secretary shall determine the amount of all taxes imposed

by, and collected under the internal revenue laws of the United

States on articles produced in the Virgin Islands and transported to the United States. The amount so determined less 1

percent and less the estimated amount of refunds or credits

shall be subject to disposition as follows:

‘‘(A) The payment of an estimated amount shall be

made to the government of the Virgin Islands before the

commencement of each fiscal year as set forth in section

4(c)(2) of the Act entitled ‘An Act to authorize appropriations for certain insular areas of the United States, and for

other purposes’, approved August 18, 1978 (48 U.S.C.

1645), as in effect on the date of enactment of the Trade

and Development Act of 2000. The payment so made shall

constitute a separate fund in the treasury of the Virgin Islands and may be expended as the legislature may determine.’’.

(c) RESOLUTION OF STATUTORY CONFLICT.—Section 7652 of the

Internal Revenue Code of 1986 (relating to shipments to the United

States) is amended by adding at the end the following new subsection:

‘‘(h) MANNER OF COVER OVER OF TAX MUST BE DERIVED FROM

THIS TITLE.—No amount shall be covered into the treasury of Puerto Rico or the Virgin Islands with respect to taxes for which cover

over is provided under this section unless made in the manner specified in this section without regard to—

‘‘(1) any provision of law which is not contained in this title

or in a revenue Act, and

‘‘(2) whether such provision of law is a subsequently enacted provision or directly or indirectly seeks to waive the application of this subsection.’’.

(d) EFFECTIVE DATE.—The amendments made by this section

shall apply with respect to transfers or payments made after the

date of enactment of this Act.

59

And the Senate agree to the same.

That the House recede from its disagreement to the amendment of the Senate to the title of the bill and agree to the same.

From the Committee on International Relations, for consideration of the House bill and the Senate amendment,

and modifications committed to conference:

BENJAMIN A. GILMAN,

EDWARD R. ROYCE,

SAM GEJDENSON,

From the Committee on Ways and Means, for consideration of the House bill and the Senate amendment, and

modifications committed to conference:

BILL ARCHER,

PHIL CRANE,

CHARLES B. RANGEL,

As additional conferees, for consideration of the House bill

and the Senate amendment, and modifications committed

to conference:

AMO HOUGHTON,

JOE HOEFFEL,

Managers on the Part of the House.

W.V. ROTH, Jr.,

CHUCK GRASSLEY,

TRENT LOTT,

DANIEL P. MOYNIHAN,

MAX BAUCUS,

JOE BIDEN,

Managers on the Part of the Senate.

(61)

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF

CONFERENCE

The managers on the part of the House and the Senate at the

conference on the disagreeing votes of the two Houses on the

amendments of the Senate to the bill (H.R. 434), to authorize a

new trade and investment policy for sub-Sahara Africa, submit the

following joint statement to the House and the Senate in explanation of the effect of the action agreed upon by the managers and

recommended in the accompanying conference report:

The Senate amendment to the text of the bill struck all of the

House bill after the enacting clause and inserted a substitute text.

The House recedes from its disagreement to the amendment of

the Senate with an amendment that is a substitute for the House

bill and the Senate amendment. The differences between the House

bill, the Senate amendment, and the substitute agreed to in conference are noted below, except for clerical corrections, conforming

changes made necessary by agreements reached by the conferees,

and minor drafting and clerical changes.

TITLE I—EXTENSION OF CERTAIN TRADE BENEFITS TO

SUB-SAHARAN AFRICA

SUBTITLE A—TRADE POLICY FOR SUB-SAHARAN AFRICA

SEC. 101. SHORT TITLE

Present law

No provision.

House bill

Section 1 of the House bill states that this Act may be cited

as the ‘‘African Growth and Opportunity Act.’’

Senate amendment

Section 101 of the Senate amendment states that this title may

be cited as the ‘‘African Growth and Opportunity Act.’’

Conference agreement

The conference agreement provides that title I of the bill may

be referred to as the African Growth and Opportunity Act.

SEC. 102. FINDINGS

Present law

No provision.

62

House bill

In section 2 of the House bill, Congress finds that it is in the

mutual economic interest of the United States and countries of subSaharan Africa to promote stable and sustainable economic growth

and development in sub-Saharan Africa and that sustained economic growth in sub-Saharan Africa depends in large measure

upon the development of a receptive environment for trade and investment. To that end, the United States seeks to facilitate marketled economic growth in, and thereby the social and economic development of, countries in sub-Saharan Africa. In particular, the

United States seeks to assist sub-Saharan African countries, and

the private sector in those countries, to achieve economic self-reliance by:

(1) strengthening and expanding the private sector in subSaharan Africa, especially women owned businesses;

(2) encouraging increased trade and investment between

the U.S. and sub-Saharan Africa;

(3) reducing tariff and nontariff barriers and other trade

obstacles;

(4) expanding U.S. assistance to sub-Saharan Africa’s regional integration efforts;

(5) negotiating free trade areas;

(6) establishing a United States-Sub-Saharan Africa Trade

and Investment Partnership;

(7) focusing on countries committed to accountable government, economic reform, and the eradication of poverty;

(8) establishing a United States-Sub Saharan Africa Economic Cooperation Forum; and

(9) continuing to support development assistance for countries in sub-Saharan Africa attempting to build civil societies.

Senate amendment

In section 102 of the Senate amendment, Congress finds that:

(1) it is in the mutual interest of the United States and the

countries of sub-Saharan Africa to promote stable and sustainable economic growth and development in sub-Saharan Africa;

(2) the 48 countries of sub-Saharan Africa form a region

richly endowed with both natural and human resources;

(3) sub-Saharan Africa represents a region of enormous

economic potential and of enduring political significance to the

United States;

(4) the region has experienced a rise in both economic development and political freedom as countries in sub-Saharan

Africa have taken steps toward liberalizing their economies

and encouraged broader participation in the political process;

(5) the countries of sub-Saharan Africa have made

progress toward regional economic integration that can have

positive benefits for the region;

(6) despite those gains, the per capita income in sub-Saharan Africa averages less than $500 annually;

(7) U.S. foreign direct investment in the region has fallen

in recent years and the sub-Saharan African region receives

only minor inflows of direct investment from around the world;

63

(8) trade between the United States and sub-Saharan Africa remains, apart from the import of oil, an insignificant part

of total U.S. trade;

(9) trade and investment, as the American experience has

shown, can represent powerful tools both for economic development and for building a stable political environment in which

political freedom can flourish;

(10) increased trade and investment flows have the greatest impact in an economic environment in which trading partners eliminate barriers to trade and capital flows and encourage the development of a vibrant private sector that offers individual African citizens the freedom to expand their economic

opportunities and provide for their families;

(11) offering the countries of sub-Saharan Africa enhanced

trade preferences will encourage both higher levels of trade

and direct investment in support of the positive economic and

political developments under way throughout the region; and

(12) encouraging the reciprocal reduction of trade and investment barriers in Africa will enhance the benefits of trade

and investment for the region as well as enhance commercial

and political ties between the United States and sub-Saharan

Africa.

Conference agreement

The House recedes to the Senate except to delete certain findings related to the decline in foreign direct investment in sub-Saharan Africa and the low levels of U.S. trade with sub-Saharan Africa. In addition, the conference agreement clarifies the findings related to the political and economic development.

SEC. 103. STATEMENT OF POLICY

Present law

No provision.

House bill

In section 3 of the House bill, Congress supports economic selfreliance for sub-Saharan African countries, particularly those committed to economic and political reform; market incentives and private sector growth; the eradication of poverty; and the importance

of women to economic growth and development.

Senate amendment

Section 103 of the Senate amendment states the support of the

Congress for:

(1) encouraging increased trade and investment between

the United States and sub-Saharan Africa;

(2) reducing tariff and nontariff barriers and other obstacles to sub-Saharan African and U.S. trade;

(3) expanding U.S. assistance to sub-Saharan Africa’s regional integration efforts;

(4) negotiating reciprocal and mutually beneficial trade

agreements, including the possibility of establishing free trade

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areas that serve the interests of both the United States and

countries in sub-Saharan Africa;

(5) focusing on countries committed to accountable government, economic reform, and the eradication of poverty;

(6) strengthening and expanding the private sector in subSaharan Africa;

(7) supporting the development of civil societies and political freedom in sub-Saharan Africa; and

(8) establishing a United States-Sub-Saharan African Economic Cooperation Forum.

In section 717 of the Senate amendment, Congress makes the

following:

(1) Corruption and bribery of public officials is a major

problem in many African countries and represents a serious

threat to the development of a functioning domestic private

sector, to United States business and trade interests, and to

prospects for democracy and good governance in African countries.

(2) Of the 17 countries in sub-Saharan Africa rated by the

international watchdog group, Transparency International, as

part of the 1998 Corruption Perception Index, 13 ranked in the

bottom half.

(3) The Organization for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign

Public Officials in International Business Transactions, which

has been signed by all 29 members of the OECD plus Argentina, Brazil, Bulgaria, Chile, and the Slovak Republic and

which entered into force on February 15, 1999, represents a

significant step in the elimination of bribery and corruption in

international commerce.

(4) As a party to the OECD Convention on Combating

Bribery of Foreign Public Officials in International Business

Transactions, the United States should encourage the highest

standards possible with respect to bribery and corruption.

Section 717 of the Senate amendment expresses the sense of

Congress that the United States should encourage at every opportunity the accession of sub-Saharan African countries, as defined in

section 104, to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Conference agreement

The House recedes to the Senate with the addition of language

from the House bill related to the importance of small businesses

and women owned enterprises in strengthening and expanding the

private sector in sub-Saharan Africa. In addition, the conference

agreement includes a new policy statement, based on section 717

of the Senate bill, expressing Congressional support for the accession of countries in sub-Saharan Africa to the Convention on Combating Bribery of Foreign Public Officials in International Business

Transactions of the Organization for Economic Cooperation and Development.

65

SEC. 104. ELIGIBILITY REQUIREMENTS

Present law

Title V of the Trade Act of 1974 grants authority to the President under the Generalized System of Preferences (GSP) program

to provide duty-free treatment on imports of eligible articles from

beneficiary developing countries (BDC), which meet specific eligibility criteria.

House bill

Section 4 of the House bill states that a sub-Saharan African

country shall be eligible to participate in programs, projects, or activities, or receive assistance or other benefits under this Act if the

President determines that the country does not engage in gross violations of internationally recognized human rights and has established, or is making continual progress toward establishing, a market economy, such as the establishment and enforcement of appropriate policies relating to:

(1) promoting free movement of goods and services between the United States and sub-Saharan Africa and among

countries in sub-Saharan Africa;

(2) promoting the expansion of the production base and the

transformation of commodities and nontraditional products for

export through joint venture projects between African and foreign investors;

(3) trade issues, such as the protection of intellectual property rights, improvements in standards, testing, labeling and

certification, and government procurement;

(4) the protection of property rights, such as protection

against expropriation and a functioning and fair judicial system;

(5) the protection of internationally recognized worker

rights, including the right of association, the right to organize

and bargain collectively, a prohibition on the use of any form

of forced or compulsory labor, a minimum age for the employment of children, and acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health;

(6) appropriate fiscal systems, such as reducing high import and corporate taxes, controlling government consumption,

participation in bilateral investment treaties, and the harmonization of such treaties to avoid double taxation;

(7) foreign investment issues, such as the provision of national treatment for foreign investors, removing restrictions on

investment, and other measures to create an environment conducive to domestic and foreign investment;

(8) supporting the growth of regional markets within a free

trade area framework;

(9) governance issues, such as eliminating government corruption, minimizing government intervention in the market

such as price controls and subsidies, and streamlining the business license process;

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(10) supporting the growth of the private sector, in particular by promoting the emergence of a new generation of African entrepreneurs;

(11) encouraging the private ownership of government-controlled economic enterprises through divestiture programs; and

(12) observing the rule of law, including equal protection

under the law and the right to due process and a fair trial.

In determining whether a sub-Saharan African country is eligible under this section, the President shall take into account the following factors:

(1) an expression by a country of its desire to be an eligible

country;

(2) the extent to which a country has made substantial

progress toward reducing tariff levels, binding its tariffs in the

World Trade Organization (WTO) and assuming meaningful

binding obligations in other sectors of trade, and eliminating

nontariff barriers to trade;

(3) whether such country, if not already a member of the

WTO, is actively pursuing membership in that organization;

(4) the extent to which such country has a recognizable

commitment to reducing poverty, increasing the availability of

health care and educational opportunities, the expansion of

physical infrastructure in a manner designed to maximize accessibility, increased access to market and credit facilities for

small farmers and producers, and improved economic opportunities for women as entrepreneurs and employees, and promoting and enabling the formation of capital to support the establishment and operation of micro-enterprises; and

(5) whether or not such country engages in activities that

undermine U.S. national security or foreign policy interests.

The President shall monitor and review the progress of sub-Saharan African countries in order to determine their current or potential eligibility to participate in this Act. Such determinations

shall be based on quantitative factors to the fullest extent possible

and shall be included in the annual report requested by section 15

of this Act.

A sub-Saharan African country that has not made continual

progress in meeting the requirements with which it is not in compliance shall be ineligible to participate in programs, projects, or

activities, or receive assistance or other benefits, under this Act.

Senate amendment

Section 111 of the Senate amendment amends title V of the

Trade Act of 1974 by inserting after section 506 a new section 506A

on the ‘‘Designation of sub-Saharan African countries for certain

benefits.’’

Notwithstanding any other provision of law, the President is

authorized to designate a sub-Saharan African country eligible for

the enhanced GSP benefits, if the President determines that the

country:

(A) has established, or is making continual progress toward establishing:

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(i) a market-based economy, where private property

rights are protected and the principles of an open, rulesbased trading system are observed;

(ii) a democratic society, where the rule of law, political freedom, participatory democracy, and the right to due

process and a fair trial are observed;

(iii) an open trading system through the elimination of

barriers to United States trade and investment and the

resolution of bilateral trade and investment disputes;

(iv) economic policies to reduce poverty, increase the

availability of health care and educational opportunities,

expand physical infrastructure, and promote the establishment of private enterprise; and

(v) a system to combat corruption and bribery, such as

signing the Convention on Combating Bribery of Foreign

Public Officials in International Business Transactions;

(B) does not engage in gross violations of internationally

recognized human rights or provide support for acts of international terrorism and cooperates in international efforts to

eliminate human rights violations and terrorist activities; and

(C) subject to the authority granted to the President under

the GSP program, otherwise satisfies the GSP eligibility criteria.

The President shall monitor and review the progress of each

sub-Saharan African country in meeting these eligibility requirements described in paragraph 1 in order to determine the current

or potential eligibility of each country to be designated as a beneficiary sub-Saharan African country. The President shall include

the reasons for the determinations in the annual report required by

section 115 of this title.

If the President determines that a beneficiary sub-Saharan African country is not making continual progress in meeting the eligibility requirements, the President shall terminate the designation

of that country as a beneficiary sub-Saharan African country for

purposes of this section, effective January 1 of the year following

the year in which such determination is made.

Conference agreement

The conference agreement authorizes the President to designate a sub-Saharan African country that meets the eligibility criteria as eligible for the economic development related provisions in

subtitle C. The eligibility criteria as in effect on the date of enactment apply to the trade benefits through an amendment to the

Trade Act of 1974 included in subtitle B.

The eligibility criteria as contained in the conference report reflect the Senate provisions, with the addition of criteria from the

House bill on the protection of internationally recognized worker

rights and the prohibition on the designation of countries as eligible under this Act that engage in activities that undermine U.S.

national security or foreign policy interests. In addition, the conference agreement incorporates elements from the House bill on

the provision of national treatment and measures to create an environment conducive to domestic and foreign investment; minimizing

government interference in the economy through price controls,

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subsidies, and government ownership of economic assets; the protection of intellectual property; and the importance of micro-credit

to the formation of capital markets.

The section also stipulates that the President shall terminate

the eligibility for preferential treatment under this Act for any subSaharan African country that is making continual progress in

meeting the eligibility requirements.

The eligibility criteria are designed to identify sub-Saharan

countries that are creating a climate conducive to greater levels of

trade and investment, and with which the U.S. can build a growing

economic partnership. While this section is designed to afford flexibility in this identification, and while the conferees have no target

number of participants, it is clear that several sub-Saharan African

countries unfortunately have in place policies that would not qualify them from accessing the benefits of the bill. These are sub-Saharan African countries that discourage trade and investment. The

conferees note that the eligibility criteria are similar to those

USAID uses to allocate development assistance among African

countries.

The conferees urge the President to make determinations regarding country eligibility as soon as practicable.

SEC. 105. UNITED STATES-SUB-SAHARAN AFRICA TRADE AND ECONOMIC

COOPERATION FORUM

Present law

No provision.

House bill

Section 5 of the House bill requires the President to convene

annual high-level meetings between appropriate officials of the

U.S. government and the governments of sub-Saharan African

countries in order to foster closer economic ties. Not later than 12

months after enactment, the section requires the President, after

consulting with Congress and the governments concerned, shall establish a United States-Sub-Saharan Africa Trade and Economic

Cooperation Forum.

In creating the Forum, the President shall:

(1) direct the Secretaries of Commerce, the Treasury,

State, and the United States Trade Representative (USTR) to

host the first annual meeting with their counterparts from eligible sub-Saharan African countries, the Secretary General of

the Organization of African Unity, and government officials

from other appropriate countries in Africa to discuss expanding

trade and investment relations between the United States and

sub-Saharan Africa and the implementation of this Act;

(2) in consultation with Congress, encourage U.S. non-governmental organizations (NGOs) and representatives of the

private sector to host annual meetings with their respective

counterparts from sub-Saharan Africa in conjunction with the

annual meetings of the Forum; and

(3) to the extent practicable, meet with the heads of government of eligible sub-Saharan African countries no less than

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once every 2 years. The first meeting should take place not

later than 12 months after enactment.

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

the United States Information Agency shall disseminate regularly,

through multiple media, economic information in support of the

free market economic reforms described in this Act.

The provision authorizes such sums as may be necessary to

carry out this section. None of the funds authorized under this section may be used to create or support any NGO for the purpose of

expanding or facilitating trade between the United States and subSaharan Africa.

Senate amendment

Section 113 of the Senate amendment requires the President

to convene annual meetings between senior officials of the U.S.

Government and officials of the governments of sub-Saharan African countries in order to foster close economic ties between the

United States and sub-Saharan Africa. Not later than 12 months

after the date of enactment, the President, after consulting with

the officials of interested sub-Saharan African governments, shall

establish a United States-Sub-Saharan African Trade and Economic Cooperation Forum.

In creating the Forum, the President shall:

(1) direct the Secretaries of Commerce, the Treasury,

State, and the USTR to invite their counterparts from interested sub-Saharan African governments and representatives of

appropriate regional organizations to participate in the first

annual meeting to discuss expanding trade and investment relations between the United States and sub-Saharan Africa;

(2) in consultation with Congress, invite U.S. NGOs and

private sector representatives to host meetings with their respective counterparts from sub-Saharan Africa in conjunction

with meetings of the Forum to discuss expanding trade and investment relations between the United States and sub-Saharan Africa;

(3) as soon as practicable after enactment, meet with the

heads of the governments of interested sub-Saharan African

countries for the purpose of discussing the issues described in

paragraph 1.

In selecting issues of common interest to the United StatesSub-Saharan African Trade and Economic Cooperation Forum, section 706 of the Senate amendment requires the President to instruct the U.S. delegates to the Forum to promote a review by the

Forum of the HIV/AIDS epidemic in each sub-Saharan African

country and the effect of the HIV/AIDS epidemic on human and social development in each country.

Conference agreement

In order to expand U.S. trade and investment relations with

sub-Saharan Africa and achieve the goals of the Act, the conferees

believe that it is important to foster a regular dialogue between

U.S. government officials and their counterparts from sub-Saharan

African countries. Therefore, the legislation establishes a yearly

forum at the Ministerial level to facilitate these discussions. The

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conferees also believe that it would help to promote the goals of

this Act if the President, to the extent practicable, met with the

heads of state of sub-Saharan African governments not less than

once every two years.

With respect to the countries eligible to participate in the

Forum and the heads of state meeting to discuss expanding trade

and investment relations between the United States and sub-Saharan Africa and the implementation of this title, the Senate recedes

to the House with a modification to permit participation by countries that the President determines are taking substantial positive

steps towards meeting the eligibility requirements set forth in section 104 of the Act (as well as countries that are found eligible

under section 104). The conferees expect the Administration to interpret this provision narrowly to allow as Forum participants only

those countries that are undertaking substantial, positive reforms,

although they may not satisfy all of the eligibility requirements. In

addition, the conference agreement directs the Administration to

invite to the Forum appropriate representatives of sub-Saharan African regional organizations, and government officials from other

appropriate countries in sub-Saharan Africa.

In addition, the conference agreement requires the President to

encourage NGOs and representatives of the private sector to host

annual meetings with their respective counterparts from sub-Saharan Africa in conjunction with the annual meetings of the Forum.

The conferees observe that there is no precedent of using taxpayer

funds to facilitate such meetings in conjunction with other multilateral fora and do not intend that taxpayer funds should be used in

this instance.

The conference agreement updates the reference to the United

States Information Agency from the House bill to the United States

Information Service.

The conference agreement also includes the language from section 706 of the Senate amendment requiring the President to direct

the U.S. delegates at the Forum to promote a review by the Forum

on the HIV/AIDS epidemic in sub-Saharan Africa and the effect of

the HIV/AIDS epidemic on the economic development of each country in sub-Saharan Africa.

SEC. 106. REPORTING REQUIREMENT

Present law

Section 134(b) of the Uruguay Round Agreements Act requires

the President to submit five annual reports to Congress on his

‘‘Comprehensive Trade and Development Policy for Countries in Africa.’’ The President’s fifth and final report was submitted in January 2000.

House bill

Section 15 of the House bill requires the President to submit

to Congress, not later than 1 year after enactment and for 6 years

thereafter, a comprehensive report on the trade and investment

policy of the United States for sub-Saharan Africa, and on the implementation of this Act. The last report required by section 134(b)

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of the Uruguay Round Agreements Act shall be consolidated and

submitted with the first report required by this section.

Senate amendment

Section 115 of the Senate amendment requires the President

to submit a report to Congress on the implementation of this title

not later than 1 year after the date of enactment of this Act, and

annually thereafter for 4 years.

Conference agreement

The conference agreement reflects House language requiring

annual Presidential reports for 8 years on the trade and investment policy of the United States toward sub-Saharan Africa and on

the implementation of this title, but strikes the language on the

consolidation of the final report required by the Uruguay Round

Agreements Act. This report was submitted to Congress in January

2000.

SEC. 107. SUB-SAHARAN AFRICA DEFINED

Present law

No provision.

House bill

Section 16 of the House bill defines the terms ‘‘sub-Saharan Africa’’, ‘‘sub-Saharan African country’’, ‘‘country in sub-Saharan Africa’’, and ‘‘countries in sub-Saharan Africa’’ for the purposes of this

Act as referring to the following or any successor political entities:

Republic of Angola (Angola), Republic of Botswana (Botswana),

Republic of Burundi (Burundi), Republic of Cape Verde (Cape

Verde), Republic of Chad (Chad), Democratic Republic of Congo,

Republic of the Congo (Congo), Republic of Djibouti (Djibouti),

State of Eritrea (Eritrea), Gabonese Republic (Gabon), Republic of

Ghana (Ghana), Republic of Guinea-Bissau (Guinea-Bissau), Kingdom of Lesotho (Lesotho), Republic of Madagascar (Madagascar),

Republic of Mali (Mali), Republic of Mauritius (Mauritius), Republic of Namibia (Namibia), Federal Republic of Nigeria (Nigeria),

Democratic Republic of Sao Tome and Principe (Sao Tome and

Principe), Republic of Sierra Leone (Sierra Leone), Somalia, Kingdom of Swaziland (Swaziland), Republic of Togo (Togo), Republic of

Zimbabwe (Zimbabwe), Republic of Benin (Benin), Burkina Faso

(Burkina), Republic of Cameroon (Cameroon), Central African Republic, Federal Islamic Republic of the Comoros (Comoros), Republic of Cote d’Ivoire (Cote d’Ivoire), Republic of Equatorial Guinea

(Equatorial Guinea), Ethiopia, Republic of the Gambia (Gambia),

Republic of Guinea (Guinea), Republic of Kenya (Kenya), Republic

of Liberia (Liberia), Republic of Malawi (Malawi), Islamic Republic

of Mauritania (Mauritania), Republic of Mozambique (Mozambique), Republic of Niger (Niger), Republic of Rwanda (Rwanda),

Republic of Senegal (Senegal), Republic of Seychelles (Seychelles),

Republic of South Africa (South Africa), Republic of Sudan (Sudan),

United Republic of Tanzania (Tanzania), Republic of Uganda

(Uganda), Republic of Zambia (Zambia).

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Senate amendment

Section 104 of the Senate amendment is identical to the House

bill provision except for the exclusion of the language applying the

definition to any successor political entities.

Conference agreement

The conference agreement includes the language from the

House bill permitting the designation of successor political entities

of the countries listed for benefits under this title. In addition, the

conference agreement arranges the list of countries in alphabetical

order.

SUBTITLE B—TRADE PROVISIONS

SEC. 111. ELIGIBILITY FOR CERTAIN BENEFITS

Present law

Title V of the Trade Act of 1974, as amended, grants authority

to the President to provide duty-free treatment on imports of eligible articles from beneficiary developing countries (BDC). Under section 503(a)(1), the President may not designate any article as GSP

eligible within the following categories:

(1) textiles and apparel articles which were not eligible articles for purposes of this title on January 1, 1994;

(2) watches, except watches entered after June 30, 1989

that the President determines will not cause material injury to

watch or watch band, strap, or bracelet manufacturing and assembly operations in the United States or U.S. insular possessions;

(3) import-sensitive electronic articles;

(4) import-sensitive steel articles;

(5) footwear, handbags, luggage, flat goods, work gloves,

and leather wearing apparel which were not GSP eligible articles on January 1, 1995;

(6) import-sensitive semimanufactured and manufactured

glass products; and,

(7) any other articles the President determines to be import-sensitive in the context of GSP.

Under section 502(a)(2), the President is authorized to designate any article that is the growth, product, or manufacture of

a least developed developing country (LDDC) as an eligible article

with respect to imports from LDDCs, if the President determines

such article is not import-sensitive in the context of imports from

LDDCs. This authority does not apply to statutorily exempt articles

listed under paragraphs (1), (2), and (5) above.

Under section 503(b)(3), no quantity of an agricultural product

subject to a tariff-rate quota that exceeds the in-quota quantity is

eligible for duty-free treatment.

Under section 503(c)(2)(D), whenever the President determines

that exports by any BDC to the United States of a GSP eligible article (1) exceed a dollar limit of $75 million a year (a number which

was set in 1996 and is indexed to increase by $5 million annually),

or (2) equal or exceed a 50 percent share of the total value of U.S.

73

imports of the article, then, not later than July 1 of the next year,

such country is not treated as a BDC with respect to such article.

Under section 503(c)(2)(A), GSP duty-free treatment applies to

any eligible article which is the growth, product or manufacture of

a BDC if: (1) that article is imported directly from a BDC into the

U.S. customs territory; and, (2) the sum of (a) the cost or value of

the materials produced in the BDC or member countries in an association which is treated as one BDC, plus (b) the direct costs of

processing operations performed in such BDC or member countries

is not less than 35 percent of the value of the article.

Under section 505, no duty-free treatment shall remain in effect after September 30, 2001.

House bill

In order to receive extended and enhanced GSP benefits under

the House bill, sub-Saharan African countries must meet all of the

criteria in current law regarding designation of beneficiary developing countries and also the eligibility requirements set forth in

section 4 of H.R. 434. The existing statutory GSP designation criteria include internationally recognized worker rights, intellectual

property rights, compensation for property expropriation, and market access. Section 8(a) of the House bill amends section 503(a)(1)

of the Trade Act of 1974 to authorize the President to grant dutyfree GSP treatment for products from eligible African GSP beneficiary countries that are currently excluded from the GSP program, if, after receiving advice from the International Trade Commission, he determines that imports of these products are not import sensitive in the context of imports from sub-Saharan African

countries. Opportunities for public comment would be provided in

making this determination.

The House bill does not change the rule of origin requirements

under current law for GSP duty-free treatment on any currently eligible or any additional products, including textiles and apparel.

With respect to the second required test of value content, section 8(b) of the House bill amends section 503(a)(2) of the Trade

Act of 1974 to allow up to 15 percent of the total value of the article from U.S.-made materials to count toward the 35 percent local

value requirement for duty-free entry under the GSP program. In

order to encourage regional economic integration in Africa, the bill

provides that the minimum 35 percent local value content may be

cumulated in any eligible sub-Saharan African country.

Section 8(c) amends section 503(c)(2)(D) of the Trade Act of

1974 to stipulate that the competitive need limits do not apply to

imports from eligible countries in sub-Saharan Africa.

Section 8(d) amends section 505 of the Trade Act of 1974 to extend the GSP program until June 30, 2009, for eligible countries

in sub-Saharan Africa.

Section 8(f) establishes July 1, 1999 as the effective date for

the amendments made to the GSP program for sub-Saharan Africa.

Senate amendment

Section 111 of the Senate amendment creates a new section

506A in the Trade Act of 1974, authorizing the President to provide

duty-free treatment for imports from beneficiary sub-Saharan AfriVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00073 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.038 pfrm02 PsN: A606HR
74

can countries of any item, other than textiles or apparel products

or textile luggage, that is designated as import sensitive under section 503(b)(1) of title V of the Trade Act of 1974. A beneficiary subSaharan African country is defined as those that meet the eligibility criteria under GSP and the criteria added under the new section 506A of the Trade Act of 1974. The general rules of origin governing duty-free entry under the GSP program would continue to

apply, except that, in determining whether products are eligible for

the enhanced benefits of the bill, up to 15 percent of the appraised

value of the article at the time of importation may be derived from

materials produced in the United States. In addition, under the

new section 506A, the value of materials produced in any beneficiary sub-Saharan African country may be applied in determining

whether the product meets the applicable rules of origin for purposes of determining the eligibility of an article to receive the dutyfree treatment provided by this section. Section 111 also amends

section 503(c)(2)(D) to waive permanently the competitive need limits that would otherwise apply to beneficiary sub-Saharan African

countries.

The new section 506A established by section 111 of the Senate

amendment also requires the President to monitor, and report annually to Congress, on the progress the sub-Saharan African countries have made in meeting the three categories of eligibility criteria set forth. The new section 506A requires the President to terminate the designation of a country as a beneficiary sub-Saharan

African country if that country is not making continual progress in

meeting the eligibility requirements. Any such termination would

be effective on January 1 of the year following the year in which

the determination is made that the eligibility criteria are no longer

met.

Section 111 of the Senate amendment sets as a termination

date for the duty-free treatment provided by this title as September

30, 2006. It further includes a clerical amendment to the table of

contents in title V of the Trade Act of 1974 and sets the effective

date for this title as October 1, 1999.

Conference agreement

The House recedes to the Senate on the creation of a new section 506A in the Trade Act of 1974 for the ‘‘Designation of Sub-Saharan African Countries for Certain Benefits.’’ The provision incorporates the eligibility requirements in section 107 as in effect on

the date of enactment, as well as the eligibility requirements in the

GSP program, for countries to receive the enhanced trade benefits

under subtitle B.

SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL

Present law

At present, textile and apparel articles are ineligible for dutyfree treatment under the GSP program. Normal trade relations tariff rates apply to imports of textile and apparel articles into the

United States from sub-Saharan Africa. Currently, only two countries in sub-Saharan Africa, Kenya and Mauritius, are subject to

75

quantitative restrictions on the levels of textile and apparel articles

that they can export to the United States.

House bill

Section 4 of the House bill provides duty-free treatment under

the GSP program to textile and apparel articles from eligible subSaharan African countries. Textile and apparel products eligible for

duty-free and quota-free treatment must be substantially transformed in sub-Saharan Africa as determined by the ‘‘BreauxCardin’’ rules of origin enacted into law in 1994 (section 334 of P.L.

103–465). The rule of origin remains that articles must be the

growth, product, or manufacture of an eligible country and also

contain a minimum 35 percent local value. As under present law,

processes such as simple combining, packaging, or dilution would

not constitute substantial transformation to qualify an article for

trade benefits under this program. The article must also be directly

imported from a beneficiary country.

Section 7(b) of the House bill expresses the sense of Congress

that:

(1) It would be to the mutual benefit of the countries in

sub-Saharan Africa and the United States to ensure that the

commitments of the World Trade Organization are faithfully

implemented in each of the member countries;

(2) Reform of trade policies in sub-Saharan Africa with the

objective of removing structural impediments to trade can assist the countries of the region in achieving greater diversification of textile and apparel export commodities and products

and export markets; and

(3) The President should support textile and apparel trade

reform in sub-Saharan Africa by providing technical assistance

and encouraging business-to-business contacts with the region.

Section 7(c)(1) provides that, pursuant to the WTO Agreement

on Textiles and Clothing, the United States shall eliminate the existing quotas on textile and apparel exports to the United States

from Kenya and Mauritius within 30 days after these countries

adopt an efficient visa system to guard against unlawful transshipment of textile and apparel goods and the use of counterfeit

documents. The provision requires the Customs Service to provide

technical assistance to Kenya and Mauritius in the development

and implementation of visa systems.

Section 7(c)(2) requires the President to continue the existing

no quota policy for other countries in sub-Saharan Africa.

Section 7(d)(1) states that the President should ensure that

any sub-Saharan African country that intends to export textile and

apparel goods to the United States: (1) has in place an effective

visa system to guard against unlawful transshipment of textile and

apparel goods and the use of counterfeit documents; and (2) will cooperate fully with the United States to address and take action

necessary to prevent circumvention, as provided in Article 5 of the

WTO Agreement on Textiles and Clothing.

Senate amendment

Section 112 of the Senate amendment provides beneficiary subSaharan African countries (as designated under the new section

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506A of the Trade Act of 1974 created by the Senate amendment)

with duty-free and quota-free access to the U.S. market for certain

textiles and apparel products. In order to receive these benefits, a

beneficiary sub-Saharan African country must (1) adopt an effective and efficient visa system to guard against unlawful transshipment of textile and apparel products and the use of counterfeit

documents; and (2) enact legislation or regulations that would permit the U.S. Customs Service to investigate thoroughly allegations

of transshipment through such country. Section 112 directs the

U.S. Customs Service to provide technical assistance to the beneficiary sub-Saharan African countries in complying with these two

requirements.

The benefits under section 112 of the Senate amendment are

available only for the following textile and apparel products:

(1) Apparel articles assembled in beneficiary sub-Saharan

African countries from fabrics wholly formed and cut in the

United States, from yarns wholly formed in the United States;

(2) Apparel articles cut and assembled in beneficiary subSaharan African countries from fabric wholly formed in the

United States from yarns wholly formed in the United States,

and assembled with thread formed in the United States; and

(3) Handloomed, handmade and folklore articles, that have

been certified as such by the competent authority in the beneficiary sub-Saharan African country.

The Senate intends that this new program of textile and apparel benefits will be administered in a manner consistent with the

regulations that apply under the ‘‘Special Access Program’’ for textile and apparel articles from Caribbean and Andean Trade Preference Act countries, as described in 63 Fed. Reg. 16474–16476

(April 3, 1998). Thus, the requirement that products must be assembled from fabric formed in the United States applies to all textile components of the assembled products, including linings and

pocketing, subject to the exceptions that currently apply under the

‘‘Special Access Program.’’

Section 112 also includes a safeguard measure, authorizing the

President to impose appropriate remedies, including restrictions on

or the removal of quota-free and duty-free treatment, in the event

that imports of textile and apparel articles from a beneficiary subSaharan African country are being imported in such increased

quantities as to cause serious damage, or actual threat of such

damage, under the WTO Agreement on Textile and Clothing.

Conference agreement

The conference agreement provides preferential treatment to

certain apparel articles imported from beneficiary sub-Saharan

countries meeting the transhipment requirements set forth in section 113.

Duty-free and quota-free treatment is provided for the following apparel articles:

(1) apparel articles assembled in one or more beneficiary

sub-Saharan African countries from fabrics wholly formed and

cut in the United States, from yarns wholly formed in the

United States;

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(2) apparel articles cut and assembled or knit-to-shape in

one or more beneficiary sub-Saharan African countries from

fabrics or yarns wholly formed and cut in the United States,

from yarns wholly formed in the United States and assembled

with thread formed in the United States;

(3) knit-to-shape sweaters made from cashmere and fine

merino wool;

(4) apparel articles wholly assembled in one or more beneficiary sub-Saharan countries from fabrics not available in

commercial quantities in the United States (e.g., those fabrics

and yarns identified in Annex 401 of the NAFTA, which include fine count cotton knitted fabrics for certain apparel,

linen, silk, cotton velveteen, fine wale corduroy, Harris Tweed,

certain woven fabrics made with animal hairs, certain lightweight, high thread count poly-cotton woven fabrics, and certain lightweight, high thread count broadwoven fabrics used in

the production of men’s and boy’s shirts); and

(5) certified handloomed, handmade and folklore articles.

Certain other apparel articles would be free of duties and of

quantitative restrictions up to a specified level of imports. The cap

on preferential treatment is 1.5% of total U.S. apparel imports (in

square meter equivalents) for the first year of the bill, growing in

equal increments in each of the seven succeeding one-year periods,

to a maximum of 3.5% of U.S. apparel imports in the last year of

the bill. The following apparel articles are eligible for preferential

treatment under this cap:

(1) for the first four years of the bill, apparel articles wholly assembled in one or more lesser developed beneficiary subSaharan African countries (defined as beneficiary sub-Saharan

African countries with a 1998 per capita GNP of less than

$1,500), without regard to the origin of the fabric; and

(2) apparel articles wholly assembled in one or more beneficiary sub-Saharan African countries from fabric wholly

formed in one or more beneficiary countries from yarn originating either in the United States or in one or more beneficiary sub-Saharan African countries (the country of origin of

the yarn is to be determined by the rules of origin set forth in

section 334 of the Uruguay Round Agreements Act).

The conferees intend that the Secretary of Commerce shall determine and publish in the Federal Register in a timely manner on

an annual basis the level of apparel imports (in square meter

equivalents) eligible for duty-free treatment under the cap described above for each one year period. The conferees recognize

that special program indicators will be necessary to identify apparel articles qualifying for duty-free treatment under the cap. In

addition, in order to evaluate the trade liberalizing benefits provided under section 112 of the bill, the conferees encourage special

program indicators to be created for all apparel articles covered by

the bill.

The bill also provides that import relief in the form of a tariff

snapback shall be provided if the Secretary determines that an article qualifying for duty-free treatment under the cap from a single

beneficiary sub-Saharan African country is being imported in such

increased quantities and under such conditions as to cause ‘‘serious

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damage, or threat thereof’’ to the domestic industry producing the

like or directly competitive article. The conference agreement directs the Secretary of Commerce to conduct inquiries under this

section. Under authority delegated by Executive Order 11651, the

Committee for the Implementation of Textile Agreements currently

supervises the implementation of U.S. bilateral textile and apparel

agreements, including making determinations of market disruption

due to textile and apparel imports.

Under the bill, the Secretary of Commerce will initiate an inquiry to determine whether import relief is warranted if there has

been a surge in imports under the cap from a single beneficiary

sub-Saharan African country based on import data. The Secretary

of Commerce shall initiate an inquiry upon written request by an

interested party, when such request is supported by sufficient evidence. The conferees intend the inquiry into whether import relief

is warranted to be open and transparent. Key elements for ensuring an open and transparent process include notice of initiation, opportunity for a hearing open to interested parties (if requested), opportunity for written submissions and responses, and a written,

published determination setting forth the reasoning that justifies

the determination. The conferees intend the Secretary of Commerce

to consider all relevant information received from interested parties. Furthermore, the conferees intend that when the Secretary of

Commerce relies on information that is not publicly available, that

information should be, to the extent practicable, corroborated with

reasonably available information.

For purposes of this section, the term ‘‘interested party’’ means

any producer of a like or directly competitive article, a certified

union or recognized union or group of workers which is representative of an industry engaged in the manufacture, production or sale

in the United States of a like or directly competitive article, a trade

or business association representing producers or sellers of like or

directly competitive articles, producers engaged in the production

of essential inputs for like or directly competitive articles, a certified union or group of workers which is representative of an industry engaged in the manufacture, production or sale of essential

inputs for the like or directly competitive article, or a trade or business association representing companies engaged in the manufacture, production or sale of such essential inputs.

The conference agreement also authorizes the President to proclaim duty-free and quota-free treatment for fabrics and yarns not

available in the United States, in addition to those fabrics and

yarns already listed in Annex 401 of the NAFTA. Any interested

party may request the President to consider such treatment for additional fabrics and yarns. The requesting party will bear the burden of demonstrating that a change is warranted by providing sufficient evidence. The President must make a determination within

60 calendar days of receiving a request from an interested party.

The Senate recedes to the House on the elimination of existing

quotas on textile and apparel articles imported into the United

States from Kenya and Mauritius.

With regards to findings and trimmings, the conference agreement states that an article eligible for preferential treatment under

section 112 of the bill shall not be ineligible for such treatment beVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00078 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.041 pfrm02 PsN: A606HR
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cause the article contains findings or trimmings of foreign origin,

if such findings and trimmings do not exceed 25 percent of the cost

of the components of the assembled article. For most apparel imports, findings and trimmings include sewing thread, hooks and

eyes, snaps, buttons, ‘‘bow buds’’, decorative lace trim, elastic

strips, and zippers, including zipper tapes, labels, and certain elastic strips. However, for apparel articles cut and assembled in one

or more beneficiary sub-Saharan African countries from fabrics

wholly formed and cut in the United States, from yarns wholly

formed in the United States, sewing thread is not included in the

findings or trimmings exception.

The conference agreement also provides that certain interlinings are eligible for treatment as findings and trimmings. The

treatment of interlinings above shall be terminated if the President

determines that U.S. manufacturers are providing such interlinings

in the United States in commercial quantities.

The conference agreement further provides that an article otherwise eligible for preferential treatment under section 112 shall

not be ineligible for such treatment because the article contains fibers or yarns not wholly formed in the United States or 1 or more

beneficiary sub-Saharan African countries if the total weight of all

such fibers and yarns is not more than 7 percent of the total weight

of the article.

SEC. 113. PROTECTIONS AGAINST TRANSSHIPMENT

Present law

The Tariff Act of 1930, as amended, provides for civil monetary

penalties for unlawful transshipment. These include penalties

under section 1592 for up to a maximum of the domestic value of

the imported merchandise or eight times the loss of revenue, as

well as denial of entry, redelivery or liquidated damages for failure

to redeliver the merchandise determined to be inaccurately represented. In addition, an importer may be liable for criminal penalties, including imprisonment for up to five years, under section

1001 of title 18 of the United States Code for making false statements on import documentation.

House bill

Section 7(c)(1) provides that, pursuant to the WTO Agreement

on Textiles and Clothing, the United States shall eliminate the existing quotas on textile and apparel exports to the United States

from Kenya and Mauritius within 30 days after these countries

adopt an efficient visa system to guard against unlawful transshipment of textile and apparel goods and the use of counterfeit

documents. The provision requires the Customs Service to provide

technical assistance to Kenya and Mauritius in the development

and implementation of visa systems.

Section 7(c)(2) requires the President to: (1) continue the existing no quota policy for other countries in sub-Saharan Africa; and

(2) submit a report to Congress by March 31 of each year concerning the growth in textiles and apparel exports to the United

States from countries in sub-Saharan Africa in order to protect

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United States consumers, workers, and textile manufacturers from

economic injury due to the no quota policy.

Section 7(d)(1) states that the President should ensure that

any sub-Saharan African country that intends to export textile and

apparel goods to the United States: (1) has in place an effective

visa system to guard against unlawful transshipment of textile and

apparel goods and the use of counterfeit documents; and (2) will cooperate fully with the United States to address and take action

necessary to prevent circumvention, as provided in Article 5 of the

WTO Agreement on Textiles and Clothing.

Section 7(d)(2) requires the President to impose penalties by

denying an exporter, or any of its successors, duty-free treatment

under this section for textile and apparel articles for a period of

two years if the President determines, based on sufficient evidence,

that the exporter has willfully falsified information regarding the

country of origin, manufacture, processing, or assembly of a textile

or apparel article for which duty-free treatment under the GSP

program is claimed.

Section 7(d)(3) underscores that all provisions of the laws, regulations, and procedures of the United States relating to the denial

of entry of articles or penalties against individuals or entities for

engaging in illegal transshipment, fraud, or other violations of the

customs laws shall apply to imports from sub-Saharan countries.

In order to facilitate close monitoring by the Administration

and expanded oversight by the Committee, section 7(d)(4) requires

that the Customs Service submit to the Congress, by not later than

March 31 of each year, a report on the effectiveness of visa systems

required of Kenya and Mauritius and other countries that intend

to export textiles and apparel products to the United States, and

on measures taken by countries in sub-Saharan Africa to prevent

circumvention as described in Article 5 of the WTO Agreement on

Textiles and Clothing.

Senate amendment

Section 112(a) of the Senate amendment provides that the

preferential treatment accorded to imports of textiles and apparel

shall only be extended to beneficiary sub-Saharan African countries

that adopt an efficient visa system to guard against transshipment

and the use of counterfeit documents, and enact legislation or promulgate regulations to permit transshipment investigations by the

U.S. Customs Service.

Section 112(d) directs the Customs Service to provide technical

assistance to the beneficiary sub-Saharan African countries for the

implementation of these requirements.

Section 112 of the Senate amendment also provides that if an

exporter is found to have engaged in transshipment with respect to

textile or apparel products from a beneficiary sub-Saharan African

country, the President must deny all benefits under section 112

and 111 to such exporter, any successor of such exporter, and any

other entity owned or operated by the principal of the exporter for

a period of five years.

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Conference agreement

The conference agreement includes provisions from both the

House and Senate bills, as well as several additional elements intended to prevent the transshipment of textile and apparel articles

from sub-Saharan Africa.

Section 113(a) sets forth the following requirements that beneficiary sub-Saharan countries must satisfy before preferential tariff

treatment is extended to the covered textile and apparel articles

pursuant to section 112(a):

The country has adopted an effective visa system, domestic

laws, and enforcement procedures to prevent unlawful transshipment of the covered articles and the use of counterfeit documents relating to the entry of the articles into the United

States. An effective visa system should require documentation

supporting the country of origin such as production records, information relating to the place of production, the number and

identification of the types of machinery used in the production,

the number of employees employed in production, and certification from both the manufacturer and exporter. The conferees

also expect that countries adopt and implement domestic laws

and procedures consistent with Article 5 of the WTO Agreement on Textiles and Clothing, which obligates countries to establish the necessary legal provisions and/or administrative

procedures to address and take action against circumvention.

The country has adopted legislation or regulations to permit verification of information by the U.S. Customs Service.

Such laws or regulations should be clear and unambiguous.

The country agrees to report on a timely basis export and

import information requested by U.S. Customs. This requirement is not intended to unnecessarily burden beneficiary countries and specifically requires that the requested information

be consistent with the manner in which the country keeps

those records.

The country cooperates fully with the Customs Service to

prevent circumvention and transshipment as provided in Article 5 of the Agreement on Textiles and Clothing. Article 5 of

that Agreement establishes that cooperation will include: (1)

investigation of circumvention practices; (2) exchange of documents, correspondence, reports, and other relevant information

to the extent available; and (3) facilitation of plant visits and

contacts. The conferees also intend cooperation and action to

include the following: suspending or denying export visas to

manufacturers/exporters suspected of transshipping; sharing

trade data with the U.S. Customs Service (including import

data relating to textile and apparel); performing factory visits

in order to verify production (including verification of the commodity produced, the quota category and volume); providing information to U.S. Customs on actions taken by the country relating to production verification, the identity of factories and/

or companies suspected of illegal transshipment, further investigation or administrative action, the names of open and producing factories and the types of goods produced, and the

names of closed factories; and executing a memorandum of understanding with the United States establishing the commitVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00081 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.042 pfrm02 PsN: A606HR
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ment of the beneficiary sub-Saharan country to self-policing

and sharing enforcement results (including border searches, results of factory verification visits, and administrative penalties

assessed against factories and exporters). The United States

fully expects that beneficiary sub-Saharan countries will take

action against circumvention and implement the cooperation

principles in Article 5 of the Agreement, including denial of

entry into the beneficiary sub-Saharan country of merchandise

suspected of transshipment. The United States will vigorously

enforce its rights to deny entry and/or adjust quota charges to

reflect the true origin of the transshipped goods.

The country agrees to report on a timely basis, at the request of the Customs Service, documentation establishing the

country of origin of covered articles.

Section 113(b)(1) also requires that importers comply with requirements similar in all material respects to the requirements regarding Certificates of Origin contained in Article 502.1 of the

North American Free Trade Agreement (NAFTA) for a similar importation from Mexico, and section 113(b)(2) sets forth the exceptions where a certificate of origin is not required.

The conferees believe that transshipment is a serious violation

of U.S. laws and undermines the benefits that would otherwise accrue to the beneficiary sub-Saharan African countries. Section

113(b)(3) of the conference agreement incorporates the penalty provisions from the Senate amendment denying for a period of five

years all benefits provided under section 112 of this bill to the exporter, any successor of such exporter, and any other entity owned

or operated by the principal of the exporter if the President determines, based on sufficient evidence, that an exporter has engaged

in transshipment as defined in paragraph 4 of this section.

Section 113(b)(4) incorporates the definition of transshipment

from the Senate amendment. Transshipment is defined to have occurred when preferential treatment for a textile or apparel product

has been claimed on the basis of material false information concerning the country of origin, manufacture, processing, or assembly

of the article or any of its components. False information is material if disclosure of the true information would mean or would have

meant that the article is or was ineligible for preferential treatment.

Section 113(b)(5) incorporates the House provision requiring

the U.S. Customs Service to monitor and report to Congress (on an

annual basis beginning no later than March 31) on the effectiveness of the visa systems and measures taken to deter circumvention as described in the Article 5 of the Agreement on Textiles and

Clothing.

The conferees also believe that it is important for the U.S. Customs Service to make available technical assistance in preventing

transshipment to interested sub-Saharan African countries. Section

113(c) directs U.S. Customs Service to provide technical assistance

to beneficiary sub-Saharan countries for the implementation of an

effective visa system and domestic laws. Section 113(c) also requires the Customs Service to provide assistance in training subSaharan African officials in anti-transshipment enforcement and to

the extent feasible, assist such countries in developing and adoptVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00082 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.043 pfrm02 PsN: A606HR
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ing an electronic visa system (ELVIS). The conferees expect that

the U.S. Customs Service will provide model laws, regulations, and

enforcement procedures and training seminars to beneficiary subSaharan countries requesting such assistance.

Finally, the conferees believe that it is critical to provide the

Customs Service with additional resources in order to provide technical assistance to sub-Saharan countries as well as for increased

transshipment enforcement. Section 113(d) of the conference agreement authorizes $5,894,913.00 for this purpose. The conferees expect the U.S. Customs Service to utilize these resources as follows:

Hiring of import specialists to be assigned to selected U.S.

ports, strategically placed teams, and the Headquarters textile

program, to administer the program and provide oversight;

Hiring of inspectors and investigators (Special Agents) to

be assigned to selected ports, and to Headquarters textiles program to coordinate and ensure implementation of Textile Production Verification Team results;

Hiring of international trade specialists to be assigned at

Headquarters to work on illegal textile transshipment policy

issues, and to the Strategic Trade Center in New York to work

on targeting and risk assessment for illegal transshipment;

Increased office space for additional personnel in Hong

Kong;

Hiring of auditors for internal control and document reviews to audit importers to ensure that they are not engaging

in textile and apparel transshipment;

Additional travel funds to be used for deployment of additional textile production verification teams (‘‘jump teams’’) to

sub-Saharan countries as required under the bill and as warranted, based on U.S. Customs risk analysis of suspected illegal textile transshipment;

Internal training for Customs personnel; and

Training of foreign counterparts in risk management analytical techniques and for teaching factory inspection techniques, including training in effective border examination, factory inspection techniques, audit reviews skills, and model

laws and regulations; and for outreach to the U.S. Importing

Community for voluntary compliance programs and troubleshooting.

The U.S. Customs Service has estimated that its current enforcement against textile and apparel transshipment from sub-Saharan Africa has resulted in over 90% compliance. The conferees

believe that the additional resources of $5,594,913.00, used as described above, will enable the U.S. Customs Service to continue,

and even increase, this compliance rate after passage of this bill

because the U.S. Customs Service will have more resources to continually review, expand, and modify its current practice of transshipment enforcement. The current practices include the use of

jump-teams, informants, collection of production information, monitoring and analyzing imports trends, and the use of lists designating persons and companies found to be engaged in transshipping (‘‘592A,’’ ‘‘592B,’’ and the Administrative List containing

the names of convicted foreign factories and foreign factories that

have had administrative penalties assessed against them). The

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U.S. Customs Service will also use information available from private sector groups that monitor trade production activities in assessing risk factors and enforcing transshipment.

SEC. 114. TERMINATION

Present law

The Generalized System of Preferences (GSP) program is authorized through September 30, 2001.

House bill

Section 8 of the House bill establishes the effective dates of the

GSP program and the amendments made by this Act as July 1,

1999 through June 30, 2009 for eligible countries in sub-Saharan

Africa.

Senate amendment

Section 111 of the Senate amendment extends the regular GSP

program for countries in sub-Saharan Africa through September

30, 2006 and establishes October 1, 1999, as the effective date for

the enhanced GSP benefits set forth in this section with an expiration date of September 30, 2006.

Conference agreement

The Conference agreement creates a new section 506C in the

Trade Act of 1974 extending the regular GSP and enhanced dutyfree treatment provided to beneficiary sub-Saharan African countries through September 30, 2008.

SEC. 115. CLERICAL AMENDMENTS

Present law

Title V of the Trade Act of 1974 authorizes the President to extend duty-free treatment to eligible imports from beneficiary developing countries in accordance with the provisions of the title. The

table of contents for the Trade Act of 1974 lists the sections contained in each title.

House bill

No provision.

Senate amendment

Section 111 of the Senate amendment amends the table of contents for title V of the Trade Act of 1974 by inserting after the item

relating to section 505 the following new items:

506A. Designation of sub-Saharan African countries for certain

benefits.

506B. Termination of benefits for sub-Saharan African countries.

Conference agreement

The House recedes to the Senate. The conference agreement

also adds a listing for ‘‘Protections against transshipment’’ as a

new section 506B in the table of contents and redesignating the

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section on ‘‘Termination of benefits for sub-Saharan African countries’’ as a new section 506C.

SEC. 116. FREE TRADE AGREEMENTS WITH SUB-SAHARAN AFRICAN

COUNTRIES

Present law

No provision.

House bill

In section 6 of the House bill, Congress declares that a United

States-Sub-Saharan Africa Free Trade Area should be established,

or free trade agreements entered into, to serve as the catalyst for

increasing trade between the United States and sub-Saharan Africa, and increasing private sector development in sub-Saharan Africa.

To this end, section 6 requires the President, taking into account the provisions of the treaty establishing the African Economic Community and the willingness of the governments of subSaharan African countries to engage in negotiations, to develop a

plan for entering into one or more trade agreements with eligible

sub-Saharan African countries in order to establish a United

States-Sub-Saharan Africa Free Trade Area. The plan shall include

the following:

(1) the specific objectives of the United States with respect

to the establishment of the free trade area and a suggested

timetable;

(2) the benefits to both the United States and sub-Saharan

Africa with respect to the free trade area;

(3) a mutually agreed-upon timetable for establishing a

free trade area;

(4) the implications for and the role of regional and subregional organizations in sub-Saharan Africa;

(5) subject matter anticipated to be covered and U.S. laws,

programs, and policies, as well as the laws of participating eligible African countries and existing economic cooperation and

trade agreements that may be affected; and

(6) procedures to ensure adequate consultation with Congress and the private sector during the negotiations, consultation with the Congress regarding all matters relating to implementing of the agreement(s), approval by the Congress of the

agreement(s), and adequate consultations with the relevant African governments and African regional and subregional intergovernmental organizations during the negotiations of the

agreement(s).

Not later than 12 months after the date of enactment, the

President shall prepare and transmit to Congress a report on the

plan developed.

Senate amendment

Section 114 of the Senate amendment requires the President

to examine the feasibility of negotiating a free trade agreement (or

agreements) with interested sub-Saharan African countries.

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Not later than 12 months after the date of enactment of this

Act, the President shall submit a report to the Senate Finance

Committee and the House Ways and Means Committee regarding

the feasibility of negotiating such agreement (or agreements). If the

President determines that the negotiation of any such free trade

agreement is feasible, the President shall provide a detailed plan

for such negotiation that outlines the objectives, timing, any potential benefits to the United States and sub-Saharan Africa, and the

likely economic impact of any such agreement.

Conference agreement

By eliminating the barriers that currently exist to developing

stronger, mutually beneficial trade and investment relations between the United States and sub-Saharan Africa, the conferees believe that the negotiation of one or more free trade agreements

would serve an important catalyst in the economic development of

sub-Saharan Africa.

The Senate recedes to the House, with a modification to state

that the negotiation of free trade agreements, rather than the establishment of a Free Trade Area, with interested countries in subSaharan Africa, is an important catalyst for increasing trade between the United States and sub-Saharan Africa and increasing

private sector development in sub-Saharan Africa.

Consistent with this policy objective, the conference agreement

requires the President to prepare and transmit to Congress a plan

for the purpose of negotiating and entering into one or more trade

agreements with interested eligible sub-Saharan African countries.

The plan shall include the specific objectives of the United States

with respect to the negotiations and a suggested timetable, the

benefits to both the United States and the relevant sub-Saharan

African countries, a mutually agreed upon timetable for the President’s report should also include procedures to ensure adequate

consultation with Congress and the private sector during the negotiations, consultation with Congress regarding all matters relating

to implementation of the free trade agreements, approval by Congress of the agreements, and adequate consultation with the relevant African governments and regional and sub-regional intergovernmental organizations during the negotiations.

The conference agreement also clarifies that the President’s report should include procedures to ensure adequate consultation

with Congress and the private sector during the negotiations, consultation with Congress regarding all matters relating to implementation of free trade agreements, approval by Congress of the

agreements, and adequate consultation with the relevant African

governments, and regional and sub-regional intergovernmental organizations during the negotiations.

SEC. 117. ASSISTANT UNITED STATES TRADE REPRESENTATIVE FOR

AFRICAN AFFAIRS

Present law

Section 141 of the Trade Act of 1974 established within the Executive Office of the President the office of the United States Trade

87

Representative (USTR). The President is directed to appoint a person to head the office and to serve as USTR.

House bill

Section 13 of the House bill expresses the sense of Congress

that the position of Assistant United States Trade Representative

(AUSTR) for African Affairs is integral to the U.S. commitment to

increasing U.S.-sub-Saharan African trade and investment.

The provision requires the President to maintain a position of

AUSTR for African Affairs within the Office of USTR to direct and

coordinate interagency activities on U.S.-Africa trade policy and investment matters and serve as: (1) a primary point of contact in

the executive branch for persons engaged in trade between the U.S.

and sub-Saharan Africa; and (2) the chief advisor to the USTR on

issues of trade with Africa.

The President shall ensure that the AUSTR for African Affairs

has adequate funding and staff to carry out the duties described in

this section.

Senate amendment

No provision.

Conference agreement

The Senate recedes to the House with a modification. The

modification expresses the Sense of Congress that the position of

AUSTR should be maintained and is integral to strengthening

U.S.-sub-Saharan African trade and economic relations.

The conferees note that since the Office on African American

Affairs was created in 1998, the United States has signed several

significant trade agreements with sub-Saharan Africa, including a

Bilateral Trade and Investment Treaty with Mozambique, and

Trade and Investment Framework Agreements with South Africa

and Ghana.

The conference agreement reflects the conferees’ opinion that

the AUSTR for African Affairs should: (1) act as a senior negotiator

with sub-Saharan African countries; (2) take a lead role in designating participants in the U.S.-sub-Saharan African Economic and

Cooperation Forum; (3) take a lead role in designating sub-Saharan

African countries as beneficiary countries; and (4) take a lead role

in administering and implementing the trade provisions of this Act.

SUBTITLE C—ECONOMIC DEVELOPMENT RELATED ISSUES

SEC. 121. SENSE OF CONGRESS REGARDING COMPREHENSIVE DEBT

RELIEF FOR THE WORLD’S POOREST COUNTRIES

Present law

In FY 2000, Congress supported U.S.-led efforts to enhance the

Heavily Indebted Poor Countries (HIPC) Initiative by funding

roughly one-third of the direct costs to the United States, as well

as authorizing the use of IMF internal resources, including earnings on investments of profits of sales of IMF gold, for HIPC debt

relief (Consolidated Appropriations Act for FY 2000 H.R. 3194; P.L.

106–113).

88

House bill

Section 9 of the House bill expresses the sense of the Congress

that the Secretary of the Treasury should instruct the United

States Executive Directors of the International Bank for Reconstruction and Development, the International Monetary Fund, and

the African Development Bank to use the voice and votes of the Executive Directors to encourage vigorously their respective institutions to develop enhanced mechanisms which further the following

goals in eligible countries in sub-Saharan Africa:

(1) Strengthening and expanding the private sector, especially among women-owned businesses.

(2) Reducing tariffs, nontariff barriers, and other trade obstacles, and increasing economic integration.

(3) Supporting countries committed to accountable government, economic reform, the eradication of poverty, and the

building of civil societies.

(4) Supporting deep debt reduction at the earliest possible

date with the greatest amount of relief for eligible poorest

countries under the ‘‘Heavily Indebted Poor Countries’’ (HIPC)

debt initiative.

It is the sense of the Congress that relief provided to countries

in sub-Saharan Africa that qualify for the HIPC debt initiative

should be made primarily through grants rather than through extended-term debt, and that interim relief or interim financing

should be provided for eligible countries that establish a strong

record of macroeconomic reform.

Senate amendment

In Section 714 of the Senate amendment, Congress makes the

following findings:

(1) The burden of external debt has become a major impediment to economic growth and poverty reduction in many of

the world’s poorest countries.

(2) Until recently, the United States Government and

other official creditors sought to address this problem by rescheduling loans and in some cases providing limited debt reduction.

(3) Despite such efforts, the cumulative debt of many of

the world’s poorest countries continued to grow beyond their

capacity to repay.

(4) In 1997, the Group of Seven, the World Bank, and the

International Monetary Fund adopted the HIPC Initiative, a

commitment by the international community that all multilateral and bilateral creditors, acting in a coordinated and concerted fashion, would reduce poor country debt to a sustainable

level.

(5) The HIPC Initiative is currently undergoing reforms to

address concerns raised about country conditionality, the

amount of debt forgiven, and the allocation of savings realized

through the debt forgiveness program to ensure that the Initiative accomplishes the goals of economic growth and poverty alleviation in the world’s poorest countries.

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(6) Recently, the President requested Congress to provide

additional resources for bilateral debt forgiveness and additional United States contributions to the HIPC Trust Fund.

Section 714 expresses the sense of Congress that:

(1) Congress and the President should work together, without undue delay and in concert with the international community, to make comprehensive debt relief available to the world’s

poorest countries in a manner that promotes economic growth

and poverty alleviation;

(2) this program of bilateral and multilateral debt relief

should be designed to strengthen and expand the private sector, encourage increased trade and investment, support the development of free markets, and promote broad-scale economic

growth in beneficiary countries;

(3) this program of debt relief should also support the

adoption of policies to alleviate poverty and to ensure that benefits are shared widely among the population, such as through

initiatives to advance education, improve health, combat AIDS,

and promote clean water and environmental protection;

(4) these debt relief agreements should be designed and

implemented in a transparent manner and with the broad participation of the citizenry of the debtor country and should ensure that country circumstances are adequately taken into account;

(5) no country should receive the benefits of debt relief if

that country does not cooperate with the United States on terrorism or narcotics enforcement, is a gross violator of the

human rights of its citizens, or is engaged in conflict or spends

excessively on its military; and

(6) in order to prevent adverse impact on a key industry

in many developing countries, the International Monetary

Fund must mobilize its own resources for providing debt relief

to eligible countries without allowing gold to reach the open

market, or otherwise adversely affecting the market price of

gold.

Conference agreement

The House recedes to the Senate with minor technical modifications.

SEC. 122. EXECUTIVE BRANCH INITIATIVES

Present law

No provision.

House bill

In section 10 of the House bill Congress recognizes that the

stated policy of the executive branch in 1997, the ‘‘Partnership for

Growth and Opportunity in Africa’’ initiative, is a step toward the

establishment of a comprehensive trade and development policy for

sub-Saharan Africa. It is the sense of the Congress that this Partnership is a companion to the policy goals set forth in this Act.

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Section 10 provides that in addition to continuing bilateral and

multilateral economic and development assistance, the President

shall target technical assistance toward:

(1) developing relationships between United States firms

and firms in sub-Saharan Africa through a variety of business

associations and networks;

(2) providing assistance to the governments of sub-Saharan African countries to:

(A) liberalize trade and promote exports;

(B) bring their legal regimes into compliance with the

standards of the WTO in conjunction with membership in

that Organization;

(C) make financial and fiscal reforms; and

(D) promote greater agribusiness linkages;

(3) addressing such critical agricultural policy issues as

market liberalization, agricultural export development, and agribusiness investment in processing and transporting agricultural commodities;

(4) increasing the number of reverse trade missions to

growth-oriented countries in sub-Saharan Africa;

(5) increasing trade in services; and

(6) encouraging greater sub-Saharan participation in future negotiations in the WTO on services and making further

commitments in their schedules to the General Agreement on

Trade in Services in order to encourage the removal of tariff

and nontariff barriers.

Senate amendment

No provision.

Conference agreement

The Senate recedes to the House.

SEC. 123. OVERSEAS PRIVATE INVESTMENT CORPORATION INITIATIVES

Present law

Title IV of Part I of the Foreign Assistance Act of 1961, as

amended (Public Law 87–195), established the Overseas Private Investment Corporation (OPIC), a Board of Directors for the Corporation, consisting of 15 members, and authorized the corporation to

create equity funds.

House bill

Section 11 of the House bill expresses the sense of the Congress that OPIC should use its current authorities to initiate an equity fund or funds in support of projects in the countries in subSaharan Africa, in addition to the existing equity fund for sub-Saharan Africa created by the Corporation. The provision specifies

how each fund should be structured, capitalized and implemented.

Section 12 of the bill amends Section 233 of the Foreign Assistance Act of 1961 to direct the OPIC Board to form an advisory committee to develop and implement policies, programs and financial

instruments with respect to sub-Saharan Africa. It directs the advisory committee to make recommendations to the Board on how the

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Corporation can facilitate greater support by the United States for

trade and investment with and in sub-Saharan Africa. And it also

provides for the termination of the committee four years after the

date of enactment and for a report on the steps that the Board has

taken to implement the committee’s recommendations six months

after the date of enactment and annually thereafter for the next

four years.

Senate bill

No provision.

Conference agreement

The Senate recedes to the House with a slightly modified provision changing the name of the advisory committee to the investment advisory council. In addition, the conference agreement specifies that the OPIC Board shall take measures to increase the loan,

guarantee and insurance programs, and financial commitments of

the corporation in sub-Saharan Africa, including through the use of

an investment advisory council to assist the Board in developing

and implementing programs and policies for sub-Saharan Africa.

SEC. 124. EXPORT-IMPORT BANK INITIATIVES

Present law

The Export-Import Bank is advised by a sub-Saharan Africa

Advisory Committee (SAAC) on the expansion of its activities in

sub-Saharan Africa.

House bill

Section 12(b) of the House bill would establish a SAAC for the

Bank.

Senate amendment

No provision.

Conference agreement

The conference agreement strikes section 12(b) of the House

bill in its entirety, since an advisory committee was created previously by the Export-Import Bank Reauthorization Act of 1997

(P.L. 105–121). Instead, the conference agreement expresses the

sense of Congress that the Export-Import Bank should continue to

take measures to promote the expansion of the Bank’s commitments in sub-Saharan Africa. The conference provision also commends the SAAC for aiding the Bank in doubling the number of

sub-Saharan African countries in which the Bank is open, and by

increasing by tenfold the Bank’s support for sales to sub-Saharan

Africa from fiscal year 1998 to fiscal year 1999.

SEC. 125. EXPANSION OF THE UNITED STATES AND FOREIGN

COMMERCIAL SERVICE IN SUB-SAHARAN AFRICA

Present law

No provision.

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House bill

Section 14 of the House bill would make a number of findings

regarding the Service’s presence in sub-Saharan Africa and direct

the Service to expand its presence in that region. It also would require the Service to identify new market opportunities and barriers

thereto, and to make efforts to facilitate U.S. entry into those markets, with an annual report on such efforts to Congress.

Senate amendment

No provision.

Conference agreement

The conference agreement adopts a modified version of the

House provision that directs the International Trade Administration (ITA), rather than the Service, to carry out the market entry

and barrier identifications and make those identifications publicly

available. The ITA, which already undertakes trade-related research efforts, is better suited to carrying out this initiative.

SEC. 126. DONATION OF AIR TRAFFIC CONTROL EQUIPMENT TO

ELIGIBLE SUB-SAHARAN AFRICAN COUNTRIES

Present law

No provision.

House bill

Section 16 of the House bill expresses the sense of the Congress that, to the extent appropriate, the U.S. Government should

make every effort to donate to governments of sub-Saharan African

countries (determined to be eligible under section 4 of this Act) air

traffic control equipment that is no longer in use, including appropriate related reimbursable technical assistance.

Senate amendment

No provision.

Conference agreement

The Senate recedes to the House.

SEC. 127. ADDITIONAL AUTHORITIES AND INCREASED FLEXIBILITY TO

PROVIDE ASSISTANCE UNDER THE DEVELOPMENT FUND FOR AFRICA

Present law

Section 496 of Chapter 10 of the Foreign Assistance Act of

1961 established the Development Fund for Africa (DFA) to promote the participation of Africans in long term sustainable development. Title V of the International Security and Cooperation Act of

1981 established the African Development Foundation (ADF) in

order to provide assistance aimed at promoting economic opportunities and community development in Africa.

House bill

Section 17 of the House bill expresses the sense of Congress

that sustained economic growth in sub-Saharan Africa depends in

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large measure upon the development of a receptive environment for

trade and investment, and that to achieve this objective the United

States Agency for International Development should continue to

support programs which help to create this environment. Investments in human resources, development, and implementation of

free market policies, including policies to liberalize agricultural

markets and improve food security, and the support for the rule of

law and democratic governance should continue to be encouraged

and enhanced on a bilateral and regional basis.

In section 17 of the House bill, Congress makes the following

declarations:

(1) The DFA established under chapter 10 of part I of the

Foreign Assistance Act of 1961 (22 U.S.C. 2293 et seq.) has

been an effective tool in providing development assistance to

sub-Saharan Africa since 1988.

(2) The DFA will complement the other provisions of this

Act and lay a foundation for increased trade and investment

opportunities between the United States and sub-Saharan Africa.

(3) Assistance provided through the Development Fund for

Africa will continue to support programs and activities that

promote the long term economic development of sub-Saharan

Africa, such as programs and activities relating to the following:

(A) Strengthening primary and vocational education

systems, especially the acquisition of middle-level technical

skills for operating modern private businesses and the introduction of college level business education, including the

study of international business, finance, and stock exchanges.

(B) Strengthening health care systems.

(C) Supporting democratization, good governance and

civil society and conflict resolution efforts.

(D) Increasing food security by promoting the expansion of agricultural and agriculture-based industrial production and productivity and increasing real incomes for

poor individuals.

(E) Promoting an enabling environment for private

sector-led growth through sustained economic reform, privatization programs, and market-led economic activities.

(F) Promoting decentralization and local participation

in the development process, especially linking the rural

production sectors and the industrial and market centers

throughout Africa.

(G) Increasing the technical and managerial capacity

of sub-Saharan African individuals to manage the economy

of sub-Saharan Africa.

(H) Ensuring sustainable economic growth through environmental protection.

(4) The ADF has a unique congressional mandate to empower the poor to participate fully in development and to increase opportunities for gainful employment, poverty alleviation, and more equitable income distribution in sub-Saharan

Africa. The ADF has worked successfully to enhance the role

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of women as agents of change, strengthen the informal sector

with an emphasis on supporting micro and small sized enterprises, indigenous technologies, and mobilizing local financing.

The ADF should develop and implement strategies for promoting participation in the socioeconomic development process

of grassroots and informal sector groups such as nongovernmental organizations, cooperatives, artisans, and traders into

the programs and initiatives established under this Act.

In addition, section 17 of the House bill amends section 496(h)

of the Foreign Assistance Act of 1961 (22 U.S.C. 2293(h)) by:

(A) redesignating paragraph (3) as paragraph (4); and

(B) inserting after paragraph (2) the following:

(3) Democratization and conflict resolution capabilities.—

Assistance under this section may also include program

assistance—

(A) to promote democratization, good governance, and

strong civil societies in sub-Saharan Africa; and

(B) to strengthen conflict resolution capabilities of governmental, intergovernmental, and nongovernmental entities in sub-Saharan Africa.

Section 496(h)(4) of such Act, as amended by paragraph (1), is

further amended by striking paragraphs (1) and (2) in the first sentence and inserting paragraphs (1), (2), and (3).

Senate amendment

No provision.

Conference agreement

The Senate recedes to the House.

SEC. 128. ASSISTANCE FROM UNITED STATES PRIVATE SECTOR TO

PREVENT AND REDUCE HIV/AIDS IN SUB-SAHARAN AFRICA

Present law

No provision.

House bill

Section 18 of the House bill expresses the sense of Congress

that U.S. businesses should be encouraged to provide assistance to

sub-Saharan African countries to prevent and reduce the incidence

of HIV/AIDS in sub-Saharan Africa. In providing such assistance,

U.S. businesses should be encouraged to consider the establishment

of an HIV/AIDS Response Fund in order to provide for coordination

among such businesses in the collection and distribution of the assistance to sub-Saharan African countries.

Senate amendment

No provision.

Conference agreement

The Senate recedes to the House.

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SEC. 129. SENSE OF THE CONGRESS RELATING TO HIV/AIDS CRISIS IN

SUB-SAHARAN AFRICA

Present law

No provision.

House bill

In section 19 of the House bill, Congress finds that:

(1) Sustained economic development in sub-Saharan Africa

depends in large measure upon successful trade with and foreign assistance to the countries of sub-Saharan Africa.

(2) The HIV/AIDS crisis has reached epidemic proportions

in sub-Saharan Africa, where more than 21,000,000 men,

women, and children are infected with HIV.

(3) 83 percent of the estimated 11,700,000 deaths from

HIV/AIDS worldwide have been in sub-Saharan Africa.

(4) The HIV/AIDS crisis in sub-Saharan Africa is weakening the structure of families and societies.

(5)(A) The HIV/AIDS crisis threatens the future of the

workforce in sub-Saharan Africa.

(B) Studies show that HIV/AIDS in sub-Saharan Africa

most severely affects individuals between the ages of 15 and

49—the age group that provides the most support for the

economies of sub-Saharan African countries.

(6) Clear evidence demonstrates the HIV/AIDS is destructive to the economies of sub-Saharan African countries.

(7) Sustained economic development is critical to creating

the public and private sector resources in sub-Saharan Africa

necessary to fight the HIV/AIDS epidemic.

Section 19 of the House bill expresses the sense of Congress

that:

(1) addressing the HIV/AIDS crisis in sub-Saharan Africa

should be a central component of U.S. foreign policy with respect to sub-Saharan Africa;

(2) significant progress needs to be made in preventing and

treating HIV/AIDS in sub-Saharan Africa in order to sustain

a mutually beneficial trade relationship between the United

States and sub-Saharan African countries; and

(3) the HIV/AIDS crisis in sub-Saharan Africa is a global

threat that merits further attention through greatly expanded

public, private, and joint public-private efforts, and through appropriate U.S. legislation.

Senate amendment

No provision.

Conference agreement

The Senate recedes to the House.

SEC. 130. STUDY ON IMPROVING AFRICAN AGRICULTURAL PRACTICES

Present law

No provision.

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House bill

No provision.

Senate amendment

Section 716 of the Senate amendment authorizes the USDA, in

consultation with the American Land Grant Colleges and Universities and not-for-profit international organization, to conduct a

two-year study on ways to improve the flow of American farming

techniques and practices to African farmers. The study conducted

by the USDA shall include an examination of ways of improving or

utilizing:

(1) knowledge of insect and sanitation procedures;

(2) modern farming and soil conservation techniques;

(3) modern farming equipment (including maintaining the

equipment);

(4) marketing crop yields to prospective purchasers; and

(5) crop maximization practices.

The study shall be submitted to the Committee on Agriculture,

Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives not later than September

30, 2001.

The USDA is encouraged to consult with American Land Grant

Colleges and not-for-profit international organizations that have

firsthand knowledge of current African farming practices. There is authorized to be appropriated $2,000,000 to conduct

the study.

Conference agreement

The House recedes to the Senate, with a modification to delete

the authorization of funds.

SEC. 131. SENSE OF THE CONGRESS REGARDING EFFORTS TO COMBAT

DESERTIFICATION IN AFRICAN AND OTHER COUNTRIES

Present law

No provision.

House bill

No provision.

Senate amendment

In section 718 of the Senate amendment, Congress finds that:

(1) desertification affects approximately one-sixth of the

world’s population and one-quarter of total land area;

(2) over 1,000,000 hectacres of Africa are affected by

desertification;

(3) dryland degradation is an underlying cause of recurrent famine in Africa;

(4) the United Nations Environmental Programme estimates that desertification costs the world $42,000,000,000 a

year, not including incalculable costs in human suffering; and

(5) the United States can strengthen its partnership

throughout Africa and other nations affected by desertification,

help alleviate social economic crises caused by misuse of natVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00096 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.051 pfrm02 PsN: A606HR
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ural resources, and reduce dependence on foreign aid, by taking a leading role to combat desertification.

Section 718 of the Senate amendment expresses of the sense

of the Senate that the United States should expeditiously work

with the international community, particularly Africa and other

nations affected by desertification to:

(1) strengthen international cooperation to combat

desertification;

(2) promote the development of national and regional

strategies to address desertification and increase public awareness of this serious problem and its effects;

(3) develop and implement national action programs that

identify the causes of desertification and measures to address

it; and

(4) recognize the essential role of local governments and

nongovernmental organizations in developing and implementing measures to address desertification.

Conference agreement

The House recedes to the Senate with a technical modification

to express the sense of the Congress instead of the sense of the

Senate.

TITLE II—TRADE BENEFITS FOR CARIBBEAN BASIN

SUBTITLE A—TRADE POLICY FOR CARIBBEAN BASIN COUNTRIES

SEC. 201. SHORT TITLE

Present law

No provision.

House bill

No provision, but Section 1 of H.R. 984, as approved by the

Committee on Ways and Means, provides that the subtitle may be

cited as the Caribbean and Central America Relief and Economic

Stabilization Act (CCARES).

Senate amendment

Section 201 of the Senate bill provides that the subtitle may

be cited as the Caribbean Basin Trade Enhancement Act (CBTEA).

Conference agreement

The Title of the Act is the Caribbean Basin Trade Partnership

Act.

SEC. 202. FINDINGS AND POLICY

Present law

The Caribbean Basin Initiative (CBI) program was established

by the Caribbean Basin Economic Recovery Act (CBERA), which

was enacted on August 5, 1983. This legislation authorized the

President to grant duty-free treatment to imports of eligible articles from designated Caribbean countries. The basic purpose of the

CBI program, as originally proposed by President Ronald Reagan,

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was to respond to an economic crisis in the Caribbean by encouraging industrial development primarily through preferential access

to the U.S. market. The goal was to promote political and social

stability in a strategically important region. CBI trade benefits

were made permanent in 1990.

House bill

No provision, however Section 2 of H.R. 984, as approved by

the Committee on Ways and Means makes Congressional findings

relating to the damage caused to the Caribbean Basin region by

Hurricanes Mitch and George and states that United States assistance to the region should focus on, in addition to the short-term

disaster assistance, long-term solutions for a successful economic

recovery of Central America and the Caribbean. Finally the findings state that the Caribbean Basin Economic Recovery Act has

represented a permanent and successful commitment by the United

States to encourage the development of strong democratic governments and revitalized economies in neighboring countries in the

Caribbean Basin.

Section 102 of H.R. 984, as approved by the Committee on

Ways and Means, states that it is, therefore, the policy of the

United States to: (1) offer Caribbean Basin beneficiary countries

tariff and quota treatment equivalent to that accorded to products

of NAFTA countries, and to seek the accession of these partnership

countries to NAFTA or a free trade agreement comparable to

NAFTA at the earliest possible date, with the goal of achieving full

NAFTA participation by all Caribbean countries by January 1,

2005; and (2) assure that the domestic textile and apparel industry

remains competitive in the global marketplace by encouraging the

formation and expansion of ‘‘partnerships’’ between the textile and

apparel industry of the United States and the textile and apparel

industry of various countries located in the Western Hemisphere.

Senate amendment

The Senate bill contains similar Congressional findings.

Section 202(b) of the Senate bill states that it is the policy of

the United States to: (1) offer Caribbean Basin beneficiary countries willing to prepare to become a party to the FTAA or a comparable trade agreement, tariff treatment essentially equivalent to

that accorded to products of NAFTA countries for certain products

not currently eligible for duty-free treatment under the CBERA;

and (2) seek the participation of Caribbean Basin beneficiary countries in the FTAA or a trade agreement comparable to the FTAA

at the earliest possible date, with the goal of achieving full participation in such an agreement not later than 2005.

Conference agreement

The findings contained in section 2 of the conference agreement set out the underlying rationale for expansion of the CBI program. This section describes the conferees’ agreement that the U.S.

response to the devastation caused by Hurricanes Mitch and

Georges should include, in addition to short-term disaster assistance, a long-term mechanism to promote economic recovery in Central America and the Caribbean. Based on the successful record of

99

the Caribbean Basin Initiative, the Conferees believe that economic

recovery will be achieved most effectively by enhancing the region’s

opportunities to expand its international trade with important

trading partners such as the United States.

The success of the CBI program indicates that increasing international trade with the CBI region will also promote the growth of

United States exports, decrease illegal immigration, and improve

regional cooperation in efforts to fight drug trafficking. Finally, the

conferees intend that this bill foster increased opportunities for

U.S. companies in the textile and apparel sector to expand co-production arrangements with countries in the CBI region, thereby

sustaining and preserving manufacturing operations in the United

States that would otherwise be relocated to the Far East.

SEC. 203. DEFINITIONS

Section 3 defines several terms used in the bill.

SUBTITLE B—TRADE BENEFITS FOR CARIBBEAN BASIN COUNTRIES

SEC. 211. TEMPORARY PROVISIONS TO PROVIDE ADDITIONAL TRADE

BENEFITS TO CERTAIN BENEFICIARY COUNTRIES

Present law

Under the CBERA, imports from CBI beneficiary countries, except for certain products that are statutorily excluded, are granted

duty-free treatment, subject to specific eligibility requirements.

Statutorily excluded articles are ineligible for duty-free treatment

under the CBI. These excluded products are: textile and apparel articles that are subject to textile agreements, canned tuna, petroleum and petroleum products, footwear, handbags, luggage, flat

goods, work gloves, and leather-wearing apparel. Also excluded are

certain watches and watch products.

Under NAFTA, imports of these products from Mexico (excluded from CBI and listed above) receive either declining tariff or

duty-free and quota-free treatment. Chapter Four of NAFTA establishes rules of origin for identifying goods that are to be treated as

‘‘originating in the territories of NAFTA parties’’ and are therefore

eligible for preferential treatment accorded to originating goods

under NAFTA, including reduced duties and duty-free and quotafree treatment.

House bill

No provision, however section 104 of the H.R. 984 amends section 213(b) of the CBERA to provide tariff and quota treatment on

imports from CBI beneficiary countries of excluded articles that is

identical to tariff and quota treatment accorded like articles imported from Mexico under NAFTA during a temporary period ending on the date that either NAFTA accession or a reciprocal free

trade agreement enters into force with the partnership country, or

on the fifth anniversary of the temporary treatment, whichever is

earlier.

Section 104 of the bill provides that NAFTA tariff and quota

treatment would apply to CBI articles that meet NAFTA rules of

origin (treating the United States and CBI beneficiary countries as

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‘‘parties’’ under the agreement for this purpose). Customs procedures applicable to exporters under NAFTA also must be met for

partnership countries to qualify for parity treatment. Imports of articles currently excluded under CBI, which do not meet the conditions of NAFTA parity, would continue to be excluded from the CBI

program.

Senate amendment

The Senate bill applies NAFTA tariff treatment to all excluded

products, with the exception of textiles and apparel which are

treated separately as described below.

Conference agreement

NAFTA tariff treatment applies to goods excluded from CBI,

except to textiles and apparel. More specifically, for imports of

canned tuna, petroleum and petroleum products, footwear, handbags, luggage, flat goods, work gloves, and leather-wearing apparel,

the conference agreement provides an immediate reduction in tariffs equal to the preference Mexican products enjoy under NAFTA.

The applicable duty paid by importers on such goods would be

equal to the duty applicable to the same goods if entered from Mexico. In order for their products to qualify for the preferences afforded under this Act, whether applied to textiles and apparel or

other products, the beneficiary country must comply with customs

procedures equivalent to those required under the NAFTA.

TREATMENT OF TEXTILE AND APPAREL IMPORTS FROM CARIBBEAN

COUNTRIES AND MEXICO

A. GAL PROGRAM AND ‘‘807’’ TARIFF TREATMENT

Present law

The ‘‘Special Access Program for Textiles,’’ established by regulation in February 1986, provides flexible Guaranteed Access Levels (GALs) to the United States market for textile or apparel and

‘‘made up’’ textile product categories (not fabric, yarn, or other textile products) assembled in CBI countries from fabrics wholly

formed and cut in the United States, under bilateral agreements.

GALs (also known as ‘‘807A’’) are separate limits from (and usually

significantly higher than) standard quota levels, and are generally

increased upon request of the exporting country.

Imports under item 9802.00.80 of the U.S. Harmonized Tariff

Schedule (HTS) (previously item 807), which are assembled abroad

from U.S.-fabricated components, including apparel assembled in

Caribbean countries from fabric cut in the United States, are assessed duty only on the value-added abroad. Under NAFTA, Mexico

receives duty-free and quota-free treatment on articles assembled

from U.S.-formed and cut fabric.

Certain textile and apparel articles from major supplying CBI

countries are subject to import quotas under bilateral agreements

negotiated on a product-category basis under authority of section

204 of the Agricultural Act of 1956 and in accordance with the

Uruguay Round Agreement on Textiles and Clothing. Articles

under quota may be assembled from U.S. and/or foreign components.

101

House bill

No provision, but under section 104 of H.R. 984, as approved

by the Committee on Ways and Means, imports of textile and apparel articles from CBI partnership countries that meet NAFTA

rules of origin would receive tariff treatment equivalent to such

goods originating in Mexico and would enter quota-free. Under

H.R. 984, there would be no change in the treatment of non-originating textile products currently subject to import quotas under bilateral and multilateral textile agreements.

Section 104 of H.R. 984 eliminates import restraint levels and

duties on textile and apparel articles: (1) assembled in a partnership country from fabrics wholly formed and cut in the United

States from yarns formed in the United States; (2) cut and assembled in a partnership country from fabrics wholly formed in the

United States, from yarns wholly formed in the United States; (3)

knit-to-shape in a partnership country from yarns wholly formed in

the United States; or (4) made in a partnership country from fabric

knit in a partnership country from yarn wholly formed in the

United States. Hand-made, hand-loomed and folklore articles of the

region also qualify for duty-free and quota-free treatment.

Senate amendment

The Senate bill provides no preferential treatment for textile

products, with the exception of certain hand-made, hand-loomed

and folklore articles and certain textile luggage. With respect to apparel products, duty-free, quota-free treatment applies to those

products listed below. Section 101 of the Senate bill would extend

immediate duty-free and quota-free treatment to the following apparel products:

(1) apparel articles assembled in an eligible CBI beneficiary country from U.S. fabrics wholly formed from U.S. yarns

and cut in the United States that would enter the United

States under Harmonized Tariff Schedule (HTS) item number

9802.00.80 (a provision that otherwise allows an importer to

pay duty solely on the value-added abroad when U.S. components are shipped abroad for assembly and re-imported into

the United States);

(2) apparel articles entered under chapters 61 and 62 of

the HTS where they would have qualified for HTS 9802.00.80

treatment but for the fact that the articles were subjected to

certain types of washing and finishing;

(3) apparel articles cut and assembled in the eligible CBI

country from U.S. fabric formed from U.S. yarn and sewn in

the Caribbean with U.S. thread;

(4) handloomed, handmade and folklore articles originating

in the CBI beneficiary country;

(5) textile luggage assembled in an eligible CBI beneficiary

country from U.S. fabrics wholly formed from U.S. yarns and

cut in the United States that would enter the United States

under Harmonized Tariff Schedule (HTS) item number

9802.00.80; and

(6) textile luggage cut and assembled in the eligible CBI

country from U.S. fabric formed from U.S. yarn and sewn in

the Caribbean with U.S. thread.

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The Senate intends that this new program of textile and apparel benefits will be administered in a manner consistent with the

regulations that apply under the ‘‘Special Access Program’’ for textile and apparel articles from Caribbean and Andean Trade Preference Act countries, as described in 63 Fed. Reg. 16474–16476

(April 3, 1998). Thus, the requirement that products must be assembled from fabric formed in the United States applies to all textile components of the assembled products, including linings and

pocketing, subject to the exceptions that currently apply under the

‘‘Special Access Program.’’

Conference agreement

The House recedes with an amendment that provides dutyfree, quota-free treatment to the following apparel products:

(1) apparel articles assembled in a CBTPA country from

fabrics wholly formed and cut in the United States, from yarns

wholly formed in the United States that are (I) entered under

subheading 9802.00.80 of the HTS or (II) entered under chapter 61 or 62 of the HTS, if, after such assembly, the articles

would have qualified for entry under subheading 9802.00.80

but for the fact that the articles were embroidered or subjected

to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, screen printing,

or other similar processes;

(2) apparel articles cut in a CBTPA beneficiary country

from fabric wholly formed in the United States from yarns

wholly formed in the United States, if such articles are assembled in such country with thread formed in the United States;

(3) certain apparel articles knit-to-shape (other than socks

provided for in heading 6115 of the HTS) in a CBTPA beneficiary country from yarns wholly formed in the United States,

and knit apparel articles (other than certain T-shirts, as described below) cut and wholly assembled in one or more

CBTPA beneficiary countries from fabric formed in one or more

CBTPA beneficiary countries or the United States from yarns

wholly formed in the United States, in an amount not to exceed 250 million square meter equivalents (SMEs) during the

1-year period beginning on October 1, 2000. That amount will

increase by 16 percent, compounded annually, in each succeeding 1-year period through September 30, 2004. In each 1-

year period thereafter through September 30, 2008, the

amount will be the amount that was in effect for the 1-year period ending on September 30, 2004, or such other amount as

may be provided by law. For T-shirts, other then underwear Tshirts, the amount eligible for duty-free, quota-free treatment

is 4.2 million dozen during the 1-year period beginning on October 1, 2000. That amount will be increased by 16 percent,

compounded annually, in each succeeding 1-year period

through September 30, 2004 and thereafter will be the amount

in effect for the period ending on September 30, 2004, or such

other amount as may be provided by law. The conference

agreement provides that it is the sense of Congress that the

Congress should determine, based on the record of expansion

of exports from the United States as a result of the preferential

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treatment of articles under this provision, the percentage by

which the amounts referred to above with respect to knit-toshape articles and T-shirts should be compounded for the oneyear periods occurring after the period ending on September

30, 2004;

(4) certain brassieres, subject to the requirements set forth

in the Act;

(5) certain articles assembled from fibers, yarns or fabric

not widely available in commercial quantities, with reference

to the relevant provisions of the NAFTA; the conference agreement also authorizes the President to extend duty-free and

quota-free treatment to certain other fibers, fabrics and yarns.

Any interested party may submit to the President a request for

extension of benefits to fibers, fabrics and yarns not available.

The requesting party will bear the burden of demonstrating

that a change is warranted by providing sufficient evidence.

The President must make a determination within 60 calendar

days of receiving a request from an interested party;

(6) certain handloomed, handmade and folklore articles;

and

(7) certain textile luggage, as described in the legislation.

The conference agreement establishes certain special rules:

(1) Findings and trimmings.—Articles otherwise eligible

for preferential treatment shall not be ineligible for such treatment because the article contains findings or trimmings of foreign origin, if such findings and trimmings do not exceed 25

percent of the cost of the components of the assembled product.

However, sewing thread shall not be treated as a finding or

trimming for purposes of apparel articles cut in a CBTPA beneficiary country from fabric wholly formed in the United States

from yarns wholly formed in the United States, where preferential treatment is contingent upon assembly with thread

formed in the United States

(2) Interlinings.—Articles otherwise eligible for preferential treatment shall not be ineligible for such treatment

because the articles contain certain interlinings, as described

in the legislation, of foreign origin, if the value of such interlinings (and any findings and trimmings) does not exceed 25

percent of the cost of the components of the assembled articles.

This rule will not apply if the President determines that

United States manufacturers are producing such interlinings

in the United States in commercial quantities;

(3) De Minimis.—An article otherwise ineligible for preferential treatment because the article contains fibers or yarns

not wholly formed in the United States or in 1 or more beneficiary countries shall not be ineligible for such treatment if

the total weight of all such fibers or yarns is not more than 7

percent of the total weight of the good. However, in order for

an apparel article containing elastomeric yarns to be eligible

for preferential treatment, such yarns must be wholly formed

in the United States.

The conferees agree that offering trade benefits to CBI

countries for certain apparel products would be a valuable

mechanism to promote long-term economic growth by enhancVerDate 20-MAR-2000 18:13 May 06, 2000 Jkt 079006 PO 00000 Frm 00103 Fmt 6601 Sfmt 6602 E:\HR\OC\A606HR.056 pfrm11 PsN: A606HR
104

ing the region’s opportunities to expand trade with the United

States. At the same time, the conferees believe these provisions

would promote growth of U.S. exports and the use of U.S. fabric, yarn and cotton.

(4) Special Origin Rule.—An article otherwise eligible for

preferential treatment shall not be ineligible for such treatment because the article contains nylon filament yarn (other

than elastomeric yarn), if entered under certain tariff headings

from a country that is a party to an agreement with the United

States establishing a free trade area, which entered into force

before January 1, 1995. The House position would have encompassed these articles. The Senate rule of origin would have

precluded eligibility. The Senate recedes.

B. TRADE PREFERENCE LEVELS (TPLS)

Present law

Appendix 6(B) of NAFTA provides a limited exception to

NAFTA rules of origin for textile and apparel goods. The exception

takes the form of Tariff Preference Levels (TPLs), under which specific quantities of goods from each NAFTA country that do not meet

NAFTA ‘‘yarn-forward’’ rules of origin will nonetheless be accorded

NAFTA preferential tariff rates. Imports of such goods that exceed

these quantities will be subject to Normal Trade Relations (NTR)

duty rates. Under NAFTA, TPLs are available for three broad categories of products: (1) cotton or man-made apparel; (2) wool apparel; and, (3) goods entered under subheading 9802.00.80 of the

HTS.

House bill

No provision. But Section 104(2)(B)(i) of H.R. 984, as passed by

the Committee on Ways and Means authorizes USTR to establish

TPLs for Caribbean textile and apparel products which are similar

to those established for Mexican textile and apparel products in

NAFTA. After consulting with the domestic industry and other interested parties, USTR is authorized to establish TPLs in the following categories at specified levels: not more than 45,000,000

square meter equivalents of cotton or man-made fiber apparel; not

more 1,500,000 square meter equivalents of wool apparel; and, not

more than 25,000,000 square meter equivalents of goods entered

under subheading 9802.00.80 of the HTS.

Senate amendment

No provision.

Conference agreement

No provision.

2. EFFECTIVE DATE AND TERMINATION OF TEMPORARY TREATMENT

Present law

CBI trade benefits were made permanent in 1990.

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House bill

No provision, however under section 104, of H.R. 984 a temporary transitional period would begin upon date of enactment and

end on the date that either NAFTA accession or a reciprocal free

trade agreement enters into force with the partnership country, or

on December 31, 2004, whichever is earlier.

Senate amendment

The Senate bill establishes a temporary transitional period of

51 months beginning on October 1, 2000, and ending on December

31, 2004.

Conference agreement

The Conference agreement establishes a transition period that

begins on October 1, 2000 and ends on the earlier of September 30,

2008, or the date on which the Free Trade Area of the Americas

or another free trade agreement as described in the legislation enters into force with respect to the United States and the CBTPA

beneficiary country.

3. DESIGNATION CRITERIA

Present law

In determining whether to designate any country as a CBI

beneficiary country, the President must take into account 7 mandatory and 11 discretionary criteria, which are listed in section 212

of the CBERA:

(1) whether the country is a Communist country;

(2) whether the country has nationalized, expropriated, or

otherwise seized ownership or control of U.S. property (including intellectual property), unless he determines that prompt,

adequate, and effective compensation has been or is being

made, or good faith negotiations to provide such compensation

are in progress, or the country is otherwise taking steps to discharge its international obligations, or a dispute over compensation has been submitted to arbitration;

(3) whether the country fails to act in good faith in recognizing as binding or in enforcing arbitral awards in favor of

U.S. citizens;

(4) whether the country affords ‘‘reverse’’ preferences to developed countries and whether such treatment has or is likely

to have a significant adverse effect on U.S. commerce;

(5) whether a government-owned entity in the country engages in the broadcast of copyrighted material belonging to

U.S. copyright owners without their express consent or the

country fails to work toward the provision of adequate and effective intellectual property rights;

(6) whether the country is a signatory to an agreement regarding the extradition of U.S. citizens;

(7) whether the country has or is taking steps to afford

internationally recognized worker rights to workers in the

country;

(8) an expression by the country of its desire to be designated;

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(9) the economic conditions in the country, its living standards, and any other appropriate economic factors;

(10) the extent to which the country has assured the

United States it will provide equitable and reasonable access

to its markets and basic commodity resources;

(11) the degree to which the country follows accepted rules

of international trade under the World Trade Organization;

(12) the degree to which the country uses export subsidies

or imposes export performance or local content requirements

which distort international trade;

(13) the degree to which the trade policies of the country

are contributing to the revitalization of the region;

(14) the degree to which the country is undertaking selfhelp measures to protect its own economic development;

(15) the extent to which the country provides under its law

adequate and effective means for foreign nationals to secure,

exercise, and enforce exclusive intellectual property rights;

(16) the extent to which the country prohibits its nationals

from engaging in the broadcast of copyrighted material belonging to U.S. copyright owners without their express consent;

and

(17) the extent to which the country is prepared to cooperate with the United States in the administration of the Act.

Under the CBERA, the President is prohibited from designating a country a beneficiary country if any of criteria (1)–(7)

apply to that country, subject to waiver, if the President determines that country designation will be in the U.S. national economic or security interest. The waiver does not apply to criteria (4)

and (6). Criteria (8)–(18) are discretionary. Under the CBERA, criteria on (7) is included as both mandatory and discretionary.

House bill

No provision, however H.R. 984, as approved by the Committee

on Ways and Means, makes no change in country designation criteria established in the CBERA.

Senate amendment

Under the Senate bill, eligibility for the new trade benefits is

left to the discretion of the President, but the proposal would provide specific guidance as to the criteria the President should apply

in making that determination. The starting point under the Senate

bill is compliance with the eligibility criteria set out in the original

CBERA. The Senate bill would add certain trade-related criteria,

such as the extent to which the beneficiary country fully implements the various Uruguay Round agreements, whether the beneficiary country affords adequate intellectual property protection

and protection to U.S. investors, and the extent to which the country applies internationally accepted rules on government procurement and customs valuation.

This section of the Senate bill also adds other criteria that reflect important U.S. initiatives. They include, among others, the extent to which the country has become a party to and implements

the Inter-American Convention Against Corruption, is or becomes

a party to a convention regarding the extradition of its nationals,

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satisfies the criteria for counter-narcotics certification under section 490 of the Foreign Assistance Act of 1961, and provides internationally recognized worker rights.

Conference agreement

The conference agreement provides that the President, in designating a country as eligible for the enhanced CBTPA benefits,

shall take into account the existing eligibility criteria established

under CBERA, as well as other appropriate criteria, including

whether a country has demonstrated a commitment to undertake

its WTO obligations and participate in negotiations toward the

completion of the FTAA or comparable trade agreement, the extent

to which the country provides intellectual property protection consistent with or greater than that afforded under the Agreement on

Trade-Related Aspects of Intellectual Property Rights, the extent to

which the country provides internationally recognized worker

rights, whether the country has implemented its commitments to

eliminate the worst forms of child labor, the extent to which a

country has taken steps to become a party to and implement the

Inter-American Convention Against Corruption, and the extent to

which the country applies transparent, nondiscriminatory and competitive procedures in government procurement equivalent to those

included in the WTO Agreement on Government Procurement and

otherwise contributes to efforts in international fora to develop and

implement international rules in transparency in government procurement.

In evaluating a potential beneficiary’s compliance with its

WTO obligations, the conferees expect the President to take account of the extent to which the country follows the rules on customs valuation set forth in the WTO Customs Valuation Agreement. With respect to intellectual property protection, it is the intention of the conferees that the President will also take into account the extent to which potential beneficiary countries are providing or taking steps to provide protection of intellectual property

rights comparable to the protections provided to the United States

in bilateral intellectual property agreements.

In evaluating a potential beneficiary’s performance with respect to the existing eligibility criteria under CBERA, the conferees

expect that the President will take into account, in evaluating a potential beneficiary’s performance with respect to subsections (b)(2)

and (c)(5) of section 212 of CBERA, the extent that beneficiary

countries are providing or taking steps to provide protection of investment and investors comparable to the protection provided to

the United States in bilateral investment treaties. And with respect to evaluating a potential beneficiary’s performance with respect to subsection (c)(3) of CBERA relating to market access, the

conferees intend that the President shall take into account the extent to which the country provides the United States and other

WTO members nondiscriminatory, equitable, and reasonable market access with respect to the products that will receive the enhanced benefits provided under the CBTPA.

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4. GENERAL REVIEW OF COUNTRIES

Present law

Section 212(f) of the CBERA requires the President to submit

to the Congress every three years a complete report regarding the

operation of the CBI program, including the results of a general review of beneficiary countries.

House bill

No provision, however section 104 of H.R. 984 amends section

212(f) of the CBERA to provide that the next review take place one

year after the effective date of H.R. 984 and subsequent reviews

occur at three year intervals thereafter. The bill requires the President to report to Congress on a triennial basis regarding the benefits accorded under the terms of H.R. 984. The review will be based

on the 18 eligibility criteria listed in section 212 of the CBERA, as

further interpreted by the bill. These criteria address such issues

as intellectual property protection, investment protection, market

access, worker rights, cooperation in administering the program,

and the degree to which the country follows accepted rules of international trade provided for under the World Trade Organization.

The President may determine, based on the review, whether to

withdraw, suspend, or limit new parity benefits. Existing authority

in the CBERA would continue to withdraw, suspend, or limit current benefits at any time based on the criteria under existing laws.

Senate amendment

No provision.

Conference Agreement

No provision.

5. SAFEGUARDS

Present law

The import relief procedures and authorities under sections

201–204 of the Trade Act of 1974 apply to imports from CBI beneficiary countries, as they do to imports from other countries. If CBI

imports cause serious injury, or threat of such injury, to the domestic industry producing a like or directly competitive article, section

213(e) of the CBERA authorizes the President to suspend CBI

duty-free treatment and proclaim a rate of duty or other relief

measures.

Under NAFTA, the United States may invoke a special safeguard provision at any time during the tariff phase-out period if a

NAFTA-origin textile or apparel good is being imported in such increased quantities and under such conditions as to cause ‘‘serious

damage, or actual threat thereof,’’ to a domestic industry producing

a like or directly competitive good. The President is authorized to

either suspend further duty reductions or increase the rate of duty

to the NTR rate for up to three years. The NAFTA also provides

for a ‘‘quantitative restriction’’ safeguard, which the United States

or Mexico may invoke against ‘‘non-originating’’ textile or apparel

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goods, using the standard of ‘‘serious damage, or actual threat

thereof.’’

House bill

Under H.R. 984, normal safeguard authorities under CBERA

would apply to imports of all products except textiles and apparel.

The NAFTA equivalent safeguard authorities would apply to imports of textile and apparel products from CBI countries, except

that, under the bill, the United States, if it applied a safeguard action, would not be obligated to provide equivalent trade liberalizing

compensation to the exporting country.

Senate amendment

Identical provision except that the Senate bill does not provide

a ‘‘quantitative restriction’’ safeguard.

Conference agreement

Senate provision.

6. TERMINATION OR WITHDRAWAL OF BENEFITS

Present law

The President may withdraw or suspend designation of any

beneficiary country or withdraw, suspend, or limit the application

of duty-free treatment to any article from any country if he determines that, as a result of changed circumstances, the country is not

meeting criteria set forth in the statute for beneficiary country designation. The President must publish at least 30-days advance notice of the proposed action. The U.S. Trade Representative shall accept written public comments and hold a public hearing on the proposed action.

House bill

No provision. But under H.R. 984, all country designation criteria apply as under the CBERA. The President may withdraw,

suspend, or limit the application of duty-free or preferential quota

treatment to any article if he determines the country or the product, based on changed circumstances, should be barred from eligibility. The bill makes no change in the President’s authority to

withdraw, suspend, or limit current benefits under the CBERA at

any time.

Senate amendment

The Senate bill provides that the President may withdraw or

suspend the designation of a CBERA beneficiary country or withdraw, suspend, or limit duty-free treatment if, as a result of

changed circumstances, the country no longer satisfies the mandatory eligibility criteria or fails adequately to meet one or more of

the discriminatory criteria.

The Senate bill also provides that the President may withdraw

or suspend the designation of CBTEA beneficiary country or

CBTEA benefits if the President determines that, as result of

changed circumstances, the country’s performance is not satisfactory under the CBTEA eligibility criteria.

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Conference agreement

The Conference Agreement merges the House and Senate provisions. The Conferees believe that it is appropriate to retain broad

authority for the President to withdraw, suspend, or limit benefits

under the CBERA and to provide similar authority for the President with respect to the new trade benefits under the bill.

D. CUSTOMS PROCEDURES AND PENALTIES FOR TRANSSHIPMENT

Present law

Under the NAFTA, Parties to the Agreement must observe

Customs procedures and documentation requirements, which are

established in Chapter 5 of NAFTA. Requirements regarding Certificates of Origin for imports receiving preferential tariffs are detailed in Article 502.1 of NAFTA.

House bill

No provision, but H.R. 984, as approved by the Committee on

Ways and Means, requires the Secretary of the Treasury to prescribe regulations that require, as a condition of entry, that any importer of record claiming preferential tariff treatment for textile

and apparel products under the bill must comply with requirements similar in all material respects to the requirements regarding Certificates of Origin contained in Article 502.1 of NAFTA, for

a similar importation from Mexico. In addition, if an exporter is determined under the laws of the United States to have engaged in

illegal transshipment of textile or apparel products from a partnership country, then the President shall deny all benefits under the

bill to such exporter, and to any successors of such exporter, for a

period of 2 years.

No provision. H.R. 984 requires the Commissioner of Customs

to conduct a study analyzing the extent to which each partnership

country has: (1) cooperated with the United States in instances of

circumvention or alleged circumvention of existing quotas on imports of textile and apparel products; and (2) has taken appropriate

measures consistent with its laws and domestic procedures to prevent transshipment and circumvention from taking place.

Senate amendment

The Senate bill provides that if the President determines that

an exporter has engaged in transshipment with respect to textile

and apparel products from a beneficiary country, the President

shall deny all enhanced benefits to such exporter and any successor

for a period of 2 years. In cases where the President has requested

a beneficiary country to take action to prevent transshipment and

the country has failed to do so, the President shall reduce the

quantities of textile and apparel articles that may be imported into

the U.S. from that country by three times the quantity of articles

transshipped.

Conference agreement

The Conference Agreement merges the House and Senate provisions, but clarifies that the President may only ‘‘triple-charge’’

quotas to the extent that such action is consistent with WTO rules.

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The conferees believe these transshipment provisions will address

concerns that increasing trade with the Caribbean Basin region

could result in illegal transshipment of textile and apparel products

through the region.

F. DUTY-FREE TREATMENT FOR CERTAIN BEVERAGES

MADE WITH CARIBBEAN RUM

Present law

Rum and beverages made with rum are eligible for duty-free

entry into the United States both under the CBI program and

NAFTA, provided that they meet the CBI or NAFTA rules of origin

and other requirements. When Caribbean rum is processed in Canada into a rum beverage and the beverage is exported from Canada

into the United States, it is not eligible for duty-free treatment

under either the CBI or NAFTA. Specifically, the beverage is ineligible for duty-free treatment under CBI, because it is not shipped

directly from a beneficiary country to the United States as the CBI

rules require. The beverage does not qualify for NAFTA duty-free

treatment, because the processing in Canada is not sufficient to

qualify it as a NAFTA ‘‘originating good.’’

House bill

No provision, however section 106 of H.R. 984, as approved by

the Committee on Ways and Means, amends the CBERA to accord

duty-free treatment to certain beverages imported from Canada if:

(1) the rum is the growth, product, or manufacture of a beneficiary

country or the U.S. Virgin Islands; (2) the rum is imported directly

into Canada, and the beverages made from it are imported directly

from Canada into the United States; and (3) the rum accounts for

at least 90 percent by volume of the alcoholic content of the beverages. This provision would ensure that certain rum beverages

that originate in the CBI, but which are processed in Canada, are

not denied duty-free treatment under the CBERA.

Senate amendment

No provision.

Conference agreement

Adopt provisions from H.R. 984.

G. MEETING OF CARIBBEAN TRADE MINISTERS AND USTR

Present law

No provision.

House bill

No provision, however section 107 of H.R. 984, as approved by

the Committee on Ways and Means directs the President to convene a meeting with the trade ministers of CBI partnership countries in order to establish a schedule of regular meetings, to commence as soon as practicable, of the trade ministers and USTR.

The purpose of the meetings is to advance consultations between

the United States and partnership countries concerning the likely

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timing and procedures for initiating negotiations for partnership

countries to: (1) accede to NAFTA; or (2) enter into comprehensive,

mutually advantageous trade agreements with the United States

that contain comparable provisions to NAFTA, and would make

substantial progress in achieving the negotiation objectives listed

in Section 108(b)(5) of Public Law 103–182. This provision is intended to encourage the United States Trade Representative to expand efforts to increase trade with countries in the Caribbean

Basin region.

Senate amendment

No provision.

Conference agreement

Adopt provision of H.R. 984, with minor amendments.

TITLE III—NORMAL TRADE RELATIONS

SEC. 301. PERMANENT NORMAL TRADE RELATIONS FOR ALBANIA

Present law

Albania’s trade status is currently governed by title IV of the

Trade Act of 1974, as amended by the Customs and Trade Act of

1990 (title IV). Section 402 of title IV (also known as the JacksonVanik amendment) sets forth requirements relating to freedom of

emigration, which must be met or waived by the President in order

for the President to grant nondiscriminatory normal trade relations

(NTR) status to non-market economy countries. Title IV also requires that a trade agreement remain in force between the United

States and a non-market economy country receiving NTR status

and sets forth minimum provisions which must be included in such

agreement.

Albania, which was first granted NTR status in 1992, was

found to be in full compliance with the Jackson-Vanik freedom of

emigration requirements on December 5, 1997. Since then, NTR

has been granted to Albania subject to semiannual review and disapproval by a Joint Resolution of Congress.

House bill

No provision.

Senate amendment

Section 701 of the Senate amendment authorizes the President

to determine that title IV should no longer apply to Albania and

to proclaim permanent normal trade relations (PNTR) for Albania.

Application of title IV shall terminate with respect to Albania on

the effective date of the President’s extension of PNTR.

Conference agreement

The House recedes to the Senate.

The conferees note that Albania has concluded a bilateral investment treaty with the United States and been very cooperative

with NATO and the international community during and after the

Kosova crisis. Albania is also currently negotiating to join the

World Trade Organization.

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SEC. 302. PERMANENT NORMAL TRADING RELATIONS FOR KYRGYZSTAN

Present law

Kyrgyzstan’s NTR status is currently governed by title IV of

the Trade Act of 1974, as amended by the Customs and Trade Act

of 1990 (title IV). Section 402 of title IV (also known as the Jackson-Vanik amendment) sets forth requirements relating to freedom

of emigration, which must be met or waived by the President in

order for the President to grant nondiscriminatory normal trade relations (NTR) status to non-market economy countries. Title IV

also requires that a trade agreement remain in force between the

United States and a non-market-economy country receiving NTR

status and sets forth minimum provisions which must be included

in such agreement.

Kyrgyzstan, which was granted NTR in 1992, was found to be

in full compliance with the Jackson-Vanik freedom of emigration

requirements on December 5, 1997. Since then, NTR has been

granted to Kyrgyzstan subject to semiannual review, and disapproval by a Joint Resolution of Congress.

Kyrgyzstan joined the World Trade Organization (WTO) on December 20, 1998, and the United States was forced to invoke Article XIII of the Agreement Establishing the World Trade Organization, which allows the United States to withhold application of the

WTO Agreements with respect to Kyrgyzstan until the United

States extends it permanent normal trade relations status.

House bill

No provision.

Senate amendment

Section 702 of the Senate amendment authorizes the President

to determine that title IV should no longer apply to Kyrgyzstan

and to proclaim PNTR for Kyrgyzstan. Application of title IV shall

terminate with respect to Kyrgyzstan on the effective date of the

President’s extension of PNTR.

Conference agreement

The House recedes to the Senate.

The conferees recognize that title IV of the Trade Act of 1974

has promoted the right to emigrate. Since the dissolution of the Soviet Union, minority groups have secured the return of communal

properties confiscated during the Soviet period, thereby facilitating

the reemergence of communal organizations and participation in

domestic affairs. Based upon the report on compliance with title IV,

the conferees conclude that Kyrgyzstan is in compliance with the

emigration provisions of title IV and should be graduated from title

IV, thereby permitting the extension of permanent normal trade relations to Kyrgyzstan.

With respect to national minorities, the conferees note that the

member states of the Organization for Security and Cooperation in

Europe (OSCE), including the former USSR and its successor

states, have committed to ‘‘adopt, where necessary, special measures for the purpose of ensuring to persons belonging to national

114

minorities full equality . . . individually as well as in community

with other members of their group.’’

The conferees note that Kyrgyzstan is the first former Soviet

state to be graduated from Jackson-Vanik and expect that the

graduation of other successor states to the former Soviet Union will

be contingent upon a thorough public assessment of their laws and

policies regarding emigration.

TITLE IV—OTHER TRADE PROVISIONS

SEC. 401. REPORT ON EMPLOYMENT AND TAA

Present law

Title II of the Trade Act of 1974, as amended, authorizes three

trade adjustment assistance (TAA) programs for the purpose of providing assistance to individual workers and firms that are adversely affected by import competition. Those programs are: the

general TAA program for workers, which provides training and income support for workers adversely affected by import competition;

the TAA program for firms, which provides technical assistance to

qualifying firms; and the North American Free Trade Agreement

Act (NAFTA) transitional adjustment assistance program which

provides training and income support for workers who may be adversely impacted by imports from or production shifts to Canada

and/or Mexico.

House bill

No provision.

Senate amendment

Section 703 of the Senate amendment requires GAO to submit

a report to Congress within 9 months after the date of enactment

offering specific data and recommendations concerning the effectiveness and efficiency of inter-agency and federal-state coordination of a number of worker training programs, including the general TAA program for workers, the NAFTA Transitional Adjustment Assistance program, the Workforce Investment Act of 1998

and the federal unemployment insurance program. GAO would be

required to examine the compatibility of the existing worker retraining/compensation programs, the effects of foreign trade and

shifts in production on workers in the United States and the impact that the trade effects and production shifts have had on ‘‘secondary’’ workers, i.e., those whose jobs are affected indirectly by

import competition because their customers were adversely affected

by imports or production shifts. The amendment responds to the

concern that there are conflicting requirements in the worker retraining programs, including eligibility requirements and the benefits available. It also aims at establishing an objective assessment

of the impact of imports and production shifts on job loss in the

United States.

Conference agreement

The House recedes to the Senate.

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SEC. 402. TRADE ADJUSTMENT ASSISTANCE

Present law

Title II of the Trade Act of 1974, as amended, authorizes three

trade adjustment assistance (TAA) programs for the purpose of providing assistance to individual workers and firms that are adversely affected by import competition. Those programs are: the

general TAA program for workers, which provides training and income support for workers adversely affected by import competition;

the TAA program for firms, which provides technical assistance to

qualifying firms; and the North American Free Trade Agreement

Act (NAFTA) transitional adjustment assistance program which

provides training and income support for workers who may be adversely impacted by imports from or production shifts to Canada

and/or Mexico. Under the general TAA program for workers, a

worker must be certified by the Secretary of Labor as eligible for

benefits before applying for the assistance. A worker is not eligible

for benefits, however, if they have applied for such assistance after

the expiration of the 2-year period beginning with the worker’s initial certification for benefits by the Secretary of Labor.

House bill

No provision.

Senate amendment

Section 704 of the Senate amendment provides that a group of

workers who will lose their jobs at a nuclear power plant in Oregon

that is closing would be eligible for TAA benefits, notwithstanding

the fact that their original eligibility for TAA benefits, as determined by the Labor Department, expired more than two years ago.

In 1993, the Department of Labor certified workers at a nuclear

power plant near Portland, Oregon, as eligible for TAA benefits as

a result of increased competition from imports of electricity from

British Columbia. The plant was slated to be shut down and has

been going through the decommissioning process since that time.

Because of the length of time it takes to decommission a nuclear

power plant, a number of workers kept their jobs for several years

and would otherwise be ineligible for TAA benefits because of the

expiration of the initial certification. This provision would reinstate

their eligibility for TAA.

Conference agreement

The House recedes to the Senate.

SEC. 403. RELIQUIDATION OF CERTAIN NUCLEAR FUEL ASSEMBLIES

Present law

Nuclear fuel rods containing fuel elements are classifiable

under Harmonized Tariff System (HTS) subheading 8401.30.00,

which provides for ‘‘fuel elements (cartridges), non-irradiated, and

parts thereof.’’ Prior to the adoption of the HTS in 1989, these fuel

elements were classifiable in a separate duty free provision under

the Tariff Schedules of the United States Annotated (TSUSA).

116

House bill

No provision.

Senate amendment

Section 708 authorizes the Secretary of the Treasury, upon a

proper request filed no later than 90 days after the enactment of

the Act, to reliquidate as free of duty five identified entries of nuclear fuel assemblies, and refund duties paid on each identified

entry, including duties paid on October 4, 1994, referenced in Customs Service Collection Receipt Number 527006753.

Conference agreement

The House recedes to the Senate, with an amendment to correct a date of entry.

SEC. 404. REPORTS TO THE FINANCE AND WAYS AND MEANS

COMMITTEES

Present law

Section 607 of the Foreign Operations, Export Financing, and

Related Appropriations Act, 1999 (as contained in section 101(d) of

division A of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999) (112 Stat. 2681–224) directs the

Administration to report to certain Congressional Committees on

various issues. Among these were a certification by the Treasury

Secretary and the Chairman of the Federal Reserve Board that the

International Monetary Fund is requiring borrowers to liberalize

restrictions on trade in goods and services, consistent with the

terms of all international trade agreements of which the borrowing

country is a signatory. The Secretary of the Treasury is also directed to periodically report on the progress of efforts to reform the

architecture of the international monetary system, with a focus on

minimizing disruptions in patterns of trade.

Section 1704(b) of the International Financial Institutions Act

(22 U.S.C. 262r–3(b)) requires the Secretary of the Treasury to report to certain Congressional Committees semiannually on financial stabilization programs led by the IMF in connection with financing from the Exchange Stabilization Fund. The reports are to

include a description of the degree to which recipient countries are

ensuring that no government subsidies or tax privileges will be provided to bail out individual corporations, particularly in the semiconductor, steel, and paper industries. Also, the report is to include

a description of the trade policies of the countries involved, including any unfair trade practices or adverse effects of the trade policies on the U.S.

Section 1705(a) of the International Financial Institutions Act

(22 U.S.C. 262r–5(a)) requires the Secretary of the Treasury to report to certain Congressional committees annually on the state of

the international financial system.

Section 1706(a) of the International Financial Institutions Act

(22 U.S.C. 262r–5(a)) requires the Comptroller General to report to

certain Congressional committees on the trade policies of IMF borrower countries.

117

Section 629 of the Treasury and General Government Appropriations Act, 1999 requires the Administration to report to certain

Congressional committees on the protection of United States borders against drug traffic.

Although each of these reports is required to address international trade issues, none are specifically directed to the Senate

Finance or House Ways and Means Committees.

House bill

No provision.

Senate amendment

Sec. 710 of the Senate amendment includes the Finance and

Ways and Means Committees among those Congressional Committees receiving the certifications and reports on international trade

and international economic issues which are otherwise mandated

by section 607 of the Foreign Operations, Export Financing, and

Related Appropriations Act, 1999 (Pub. L. 105–277; 112 Stat.

2681–224); section 1704(b) of the International Financial Institutions Act (22 U.S.C. 262r–3(b)); section 1705(a) of the International

Financial Institutions Act (22 U.S.C. 262r–5(a)); section 1706(a) of

the International Financial Institutions Act (22 U.S.C. 262r–5(a));

section 629 of the Treasury and General Government Appropriations Act, 1999.

Conference agreement

The House recedes to the Senate.

SEC. 405. CLARIFICATION OF SECTION 334 OF THE URUGUAY ROUND

AGREEMENTS ACT

Present law

Section 334 of the Uruguay Round Agreements Act (URAA)

(P.L. 103–465) (1994), commonly referred to as the Breaux-Cardin

rules of origin for textile and apparel, directed the Secretary of the

Treasury to prescribe rules for determining the origin of textile and

apparel products. Under those new rules, fabrics and certain products (such as scarves and handkerchiefs) derive their origin in the

country where the fabric is woven or knitted (notwithstanding any

further processing such as dyeing and printing). In addition, the

country of origin of any other textile or apparel product is the country in which the textile or apparel product is wholly assembled.

Under the multicountry rule, origin is conferred in the country in

which the most important assembly or manufacturing process occurs, or if origin cannot be determined in this manner, origin is

conferred in the last country in which important assembly or manufacturing occurs.

House bill

No provision.

Senate amendment

Section 711 would reinstate the rules of origin that existed

prior to URAA for certain products. Specifically, the amendment

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would confer origin as the country in which dyeing, printing, and

two or more finishing operations were done on fabrics classified

under the HTS as of silk, cotton, man-made, and vegetable fibers.

This rule would also apply to various products classified in 18 identified HTS subheadings (mostly flat products) except for goods

made from cotton, wool, or fiber blends containing 16 percent or

more of cotton.

Conference agreement

The House recedes to the Senate.

Prior to the Breaux-Cardin enactment, the rules of origin permitted the processes of dyeing and printing to confer origin when

accompanied by two or more finishing operations for certain products. Under the new regulations prescribed by the Secretary of the

Treasury, certain fabrics, silk handkerchiefs and scarves were considered to originate where the base fabric was knit and woven, notwithstanding any further processing.

In May 1997, the European Union (EU) requested consultations in the World Trade Organization (WTO) with the United

States, charging that the changes to the rules of origin made by

URAA violated United States obligations under a number of agreements: the Agreement on Textiles and Clothing, the Agreement on

Rules of Origin, the Agreement on Technical Barriers to Trade, and

the General Agreement on Tariffs and Trade. A number of countries requested third-party participation in the dispute. A ‘‘processverbal’’ was concluded between the two countries in July 1997,

which was later amended. Formal consultations were held in January 1999.

In August 1999, the United States and the EU agreed to settle

the dispute. A second ‘‘process-verbal’’ concluded between the two

countries obligates the U.S. Administration to submit legislation

which, as described above, amends the rule-of-origin requirements

in section 334 of the URAA in order to allow dyeing, printing, and

two or more finishing operations to confer origin on certain fabrics

and goods. In particular, this dyeing and printing rule would apply

to fabrics classified under the Harmonized Tariff Schedule (HTS)

as silk, cotton, man-made, and vegetable fibers. The rule would

also apply to the various products classified in 18 specific subheadings of the HTS listed in the bill, except for goods made from

cotton, wool, or fiber blends containing 16 percent or more of cotton.

SEC. 406. CHIEF AGRICULTURAL NEGOTIATOR

Present law

Currently, a special Trade Negotiator with the rank of Ambassador serves as the Chief Negotiator for agricultural trade in the

Office of the United States Trade Representative. The position is

not established in statute.

House bill

No provision.

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Senate amendment

Section 712 amends section 141 of the Trade Act of 1974 ((19

U.S.C.) 2171) to establish in statute within the Office of the United

States Trade Representative a Chief Agricultural Negotiator with

the rank of Ambassador who shall be appointed by the President,

by and with the advice and consent of the Senate. As an exercise

of the rulemaking power of the Senate, any nomination of a Deputy

United States Trade Representative or the Chief Agricultural Negotiator submitted to the Senate for its advice and consent, and referred to a committee, shall be referred to the Committee on Finance.

The principal function of the Chief Agricultural Negotiator

shall be to conduct trade negotiations, enforce trade agreements relating to United States agricultural products and service, and be a

vigorous advocate on behalf of United States agricultural interests.

Conference agreement

The House recedes to the Senate.

SEC. 407. REVISION OF RETALIATION LIST OR OTHER REMEDIAL ACTION

Present law

No provision.

House bill

No provision.

Senate amendment

Section 713 of the Senate amendment amends the Trade Act

of 1974 to require the United States Trade Representative (USTR)

to make periodic revisions of retaliation lists 120 days from the

date the retaliation list is made and every 180 days thereafter. The

purpose of this provision is to facilitate efforts by the USTR to enforce the rights of the United States in instances where another

World Trade Organization (WTO) member fails to comply with the

results of a dispute settlement proceeding.

Conference agreement

The House recedes to the Senate. The conferees added language that requires the USTR to include on any retaliation list reciprocal goods of the industries affected by the failure of the World

Trade Organization member to implement the decision of the WTO.

This new provision does not apply when the preliminary or initial

retaliation list does not include any reciprocal goods of the industries affected.

The conferees are of the view that compliance with dispute settlement panel and Appellate Body decisions is essential to the successful operation of the WTO. This objective has been threatened

by non-compliance in some recent cases brought by the United

States—particularly in disputes with the European Union involving

beef and bananas.

It is the view of the Conferees that this provision affirms authority already available to the U.S. Trade Representative under

the Trade Act of 1974. It is further the view of the conferees that

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this provision is consistent with the United States international obligations under the Dispute Settlement Understanding of the WTO,

and that the USTR would retain ample discretion and authority to

ensure that retaliation implemented by the United States remained

within the levels authorized by the WTO. As the provision makes

clear, actions taken by the USTR are intended to be structured

carefully and to effectuate substantial changes that will maximize

the likelihood of compliance by the losing member. The Ways and

Means and Finance Committees will monitor those actions to ensure that changes are made consistent with that intention.

With regard to pending cases in which the United States has

taken retaliatory measures, and in which the initial timetable for

action laid out in the provision has already passed, the conferees

expect that the USTR will undertake the initial action required by

the provision no later than 30 days after the enactment of the law,

and will undertake any subsequently required action every 180

days thereafter. It is also the sense of the conferees that USTR

should vigorously defend the authority granted under the statute

with its trading partners.

SEC. 408. REPORT ON TAA FOR AGRICULTURAL COMMODITY PRODUCERS

Present law

Title II of the Trade Act of 1974, as amended, authorizes three

trade adjustment assistance (TAA) programs for the purpose of providing assistance to individual workers and firms that are adversely affected by import competition. Those programs are: the

general TAA program for workers, which provides training and income support for workers adversely affected by import competition;

the TAA program for firms, which provides technical assistance to

qualifying firms; and the North American Free Trade Agreement

Act (NAFTA) transitional adjustment assistance program which

provides training and income support for workers who may be adversely impacted by imports from or production shifts to Canada

and/or Mexico.

House bill

No provision.

Senate amendment

Section 715 of the Senate amendment requires that the Secretary of Labor, not later than 4 months after enactment of the

provision and in consultation with the Secretary of Agriculture and

Secretary of Commerce, shall submit to the Committee on Ways

and Means of the House of Representatives and the Committee on

Finance of the Senate a report that examines the applicability to

farmers of trade adjustment assistance programs under title II of

the Trade Act of 1974. The report will also set forth recommendations to improve the operation of those programs as they apply to

farmers or to establish a new trade adjustment assistance program

for farmers.

Conference agreement

The House recedes to the Senate.

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SEC. 409. AGRICULTURE TRADE NEGOTIATING OBJECTIVES AND

CONSULTATIONS WITH CONGRESS

Present law

No provision.

House bill

No provision.

Senate amendment

Section 723 of the Senate amendment consists of three sections. The first section lists findings of the Congress. The second

section contains the specific agricultural negotiating objectives of

the United States for the World Trade Organization’s agriculture

negotiations mandated by the Uruguay Round. The third section

mandates consultations with Congress at specific points during the

negotiations.

Conference agreement

The House recedes to the Senate.

SEC. 410. ENTRY PROCEDURES FOR FOREIGN TRADE ZONE OPERATIONS

Present law

Section 484 of the Tariff Act of 1930 (19 U.S.C. 1484) sets forth

the procedures for the entry of merchandise imported into the

United States. Under section 484, the Customs Service has permitted a limited weekly entry procedure for foreign trade zones

(FTZ) since May 12, 1986 (as authorized by T.D. 86–16, 51 Fed.

Reg. 5040). This procedure has been limited to merchandise which

is manufactured or changed into its final form just prior to its

transfer from the zone. Section 637 of the Customs Modernization

Act (included as title VI of the North American Free Trade Agreement Implementation Act, Pub. L. 103–182, 107 Stat. 2057) provided the Customs Service with additional statutory support for the

weekly entry procedure.

House bill

No provision.

Senate amendment

Sec. 302 of the Senate amendment amends Section 484 of the

Tariff Act of 1930 (19 U.S.C. 1484) to allow merchandise withdrawn from a foreign-trade zone during a week (i.e., any 7 calendar

day period) to be the subject of a single entry, at the option of the

zone operator or user. Such an entry is treated under the new provision as a single entry or release of merchandise for purposes of

assessment of the merchandise processing fee of 19 U.S.C.

8c(a)(9)(A) and thus may not be assessed such fee in excess of the

fee limitations provided for under 19 U.S.C. 58c(b)(8)(A)(i). All

other pertinent exceptions and exclusions from the merchandise

processing fee would also apply, as appropriate. The amendment

establishes a new section 19 U.S.C. 1484(a)(3). The provision is self

executing and accordingly does not require the issuance of impleVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00121 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.067 pfrm02 PsN: A606HR
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menting regulations by the Secretary of the Treasury in order for

it to go into effect.

The net effect of the provision is to require Customs to expand

the weekly entry system (which currently is only available to certain manufactured goods) to permit FTZ operators and users to use

a weekly entry system, under certain limitations, if they so choose.

This expanded procedure allows for goods stored in a FTZ for the

purpose of warehouse and distribution to be removed from the zone

under a weekly Customs entry process. This provision would also

mean that the merchandise processing fee (MPF) that Customs collects would be collected on the basis of that single weekly entry at

the same rate applicable to any other single entry of such merchandise into the Customs territory of the United States.

Conference agreement

The House recedes to the Senate.

While the Customs Service issued proposed regulations to expand the weekly entry system (62 Fed. Reg. 12129, March 14,

1997) consistent with Congress’ intent as set out in the Customs

Modernization Act, those regulations were never finalized. The conferees intend the new provision to remedy that failure by requiring

such treatment as a matter of law.

The new provision is not intended to qualify, limit or restrict

any foreign-trade zone weekly entry procedures now in effect. Rather, it is intended to broaden the availability of weekly entry procedures to all zones, including general purpose zones and special purpose subzones, and to all zone operations and processes authorized

by law. Consistent with the Foreign Trade Zones Act, the new procedure is available for merchandise of every description, except

such as is prohibited by law, regardless of whether such merchandise is of the same class, type or category or of different classes,

types, and categories.

The conferees are mindful of the revenue impact of this expanded procedure, but the conferees also believe that, consistent

with the notion of a user fee, the MPF is not a revenue raiser for

Customs expenses, but instead is intended to cover the cost of the

service U.S. Customs provides.

The conferees also believe that the Customs Service pilot procedure to expand the weekly entry filing procedures to activities

other than manufacturing operations is consistent with Congress’

intent relating to periodic entry for weekly entries for merchandise

from general purpose foreign trade zones, as set out in the Mod

Act. Section 637 of the Mod Act, which amended 19 U.S.C. 1484

concerning the entry of merchandise generally, among other things,

provides further statutory support for the weekly entry procedure.

Part 1, page 136 of the Ways and Means NAFTA Implementation

Act Report (103–361) reflects the intent of Congress. The report

states, ‘‘in developing the regulations for periodic entry, the Committee intends that Customs will allow for weekly and monthly entries for merchandise shipments from general purpose foreign trade

zones and subzones.’’

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SEC. 411. GOODS MADE WITH FORCED OR INDENTURED CHILD LABOR

Present law

Section 307 of the Tariff Act of 1930 prohibits the importation

of articles made by convict labor or/and forced labor or/and indentured labor under penal sanctions.

House bill

No provision.

Senate amendment

Section 707 of the Senate bill amends section 307 of the Tariff

Act of 1930 to clarify that the ban on articles made with forced or/

and indentured labor includes those articles made with forced or/

and indentured child labor.

Conference agreement

The House recedes to Senate.

SEC. 412. WORST FORMS OF CHILD LABOR

Present law

No provision.

House bill

No provision.

Senate amendment

Section 722 provides that no benefits under the Act (with respect to the provisions covering sub-Saharan Africa, CBI, or GSP)

shall be granted to countries that fail to meet and effectively enforce the standards established by ILO Convention No. 182 on the

Worst Forms of Child Labor.

Conference agreement

The conference agreement adds a new eligibility criterion to

the Generalized System of Preferences so that the President shall

not designate a country for benefits if it has not implemented its

obligations to eliminate the worst forms of child labor. The conference agreement adopts the GSP program’s standard for purposes

of the eligibility criteria applicable to the additional trade benefits

extended to African beneficiary countries. The conferees intend

that the GSP standard, including the provision with respect to implementation of obligations to eliminate the worst forms of child

labor, apply to eligibility for those additional benefits.

The conferees note the tremendous progress on the elimination

of the worst forms of child labor accomplished in the International

Labor Organization through the unanimous approval of ILO Convention No. 182. The conferees believe that the practices described

in the Convention, as agreed by all ILO members, represent heinous activities that should not be tolerated. For this reason the

conferees are willing for the first time to include an eligibility criterion relating to whether a country has implemented its obligations to eliminate the worst forms of child labor. The conferees recVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00123 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.069 pfrm02 PsN: A606HR
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ognize that the convention represents the international standard

on the worst forms of child labor and have accordingly defined the

worst forms of child labor using the definition in ILO Convention

No. 182.

It is the expectation of the conferees that the beneficiaries of

the Africa, CBI and GSP programs will join the United States in

ratifying ILO Convention No. 182 as soon as possible and promptly

come into compliance with the procedural requirements of that convention including the submission to the ILO of the National Action

Plans required by the convention, the designation of a competent

authority responsible for the implementation of the convention and

the submission of annual reports to the ILO identifying steps taken

to implement the provisions of the convention.

In determining whether a country is complying with the terms

of section 502(b)(2)(G) with respect to GSP (and related provisions

with respect to benefits for sub-Saharan Africa), the conferees intend that the President consider (1) whether the country has adequate laws and regulations proscribing the worst forms of child

labor; (2) whether the country has adequate laws and regulations

for the implementation and enforcement of such measures; (3)

whether the country has established formal institutional mechanisms to investigate and address complaints relating to allegations

of the worst forms of child labor; (4) whether social programs exist

in the country to prevent the engagement of children in the worst

forms of child labor, and to assist with the removal of children engaged in the worst forms of child labor; (5) whether the country has

a comprehensive policy for the elimination of the worst forms of

child labor; and (6) whether the country is making continual

progress toward eliminating the worst forms of child labor.

The conferees intend that the phrase ‘‘work which, by its nature or the circumstances in which it is carried out, is likely to

harm the health, safety or morals of children’’ be defined as provided in Article II of Recommendation No. 190, which accompanies

ILO Convention No. 182. Accordingly, work that is ‘‘likely to harm

the health, safety or morals of children’’ includes work that exposes

children to physical, psychological, or sexual abuse; work underground, under water, at dangerous heights or in confined spaces;

work with dangerous machinery, equipment or tools, or work under

circumstances which involve the manual handling or transport of

heavy loads; work in an unhealthy environment that exposes children to hazardous substances, agents or processes, or to temperatures, noise levels, or vibrations damaging to their health; and

work under particularly difficult conditions such as for long hours,

during the night or under conditions where children are unreasonably confined to the premises of the employer.

The conferees further intend that the phrase ‘‘work which, by

its nature or the circumstances in which it is carried out, is likely

to harm the health, safety or morals of children’’ be interpreted in

a manner consistent with the intent of Article 4 of ILO Convention

No. 182, which states that such work shall be determined by national laws or regulations or by the competent authority in the

country involved. In addition, the conferees intend that the phrase

generally not apply to situations in which children work for their

parents on bona fide family farms or holdings.

125

The conferees expect that the Secretary of Labor, in preparing

the report required under section 504, will invite public comment

to assist in the preparation of his or her findings to be incorporated

in each annual report. The conferees expect that the President, in

making determinations under section 504(d) with respect to the

withdrawal, suspension or limitation of benefits, will take into account the findings of the Secretary of Labor.

TITLE V—IMPORTS OF CERTAIN WOOL ARTICLES

Present law

Under current law, worsted wool fabric imported into the

United States is subject to tariffs of 29.4 percent, whereas apparel

articles made from such fabric, such as men’s suits, may be imported at a tariff rate of 19.3 percent. By applying a higher tariff

to the input product, the tariff schedule provides an incentive for

the importation of the more-labor intensive and higher-value-added

apparel item. That inversion has been compounded by the reduction of tariffs applicable to men’s wool suits under U.S. free trade

agreements, with the effect that U.S. suit-makers face a still more

considerable competitive disadvantage relative to imports of suits

from Canada and Mexico because the difference in tariffs applicable to worsted wool fabric relative to the zero rate of duty paid on

imports of suits is the full 19.3 percent of the tariff applicable to

fabric imported by such manufacturers.

House bill

No provision.

Senate amendment

Section 721 of the Senate amendment expresses the sense of

the Senate that United States trade policy should, taking into account the conditions among U.S. producers, place a priority on the

elimination of tariff inversions that undermine the competitiveness

of United States consuming industries.

Conference agreement

The conferees agree to reduce tariffs on worsted wool fabric intended for use in the manufacture of men’s suits, suit-type jackets,

and trousers in order to limit the tariff inversion U.S. suit-makers

face in the purchase of such fabric. For worsted wool fabric containing greater than or equal to 85 percent wool intended for use

in the suit market made from fiber averaging 18.5 micron or less

in diameter, the applicable tariff would be reduced from the current U.S. rate on such fabric to a level equivalent to the current

Canadian ‘‘most favored nation’’ (‘‘MFN’’) rate applicable to imports

of such fabric, to a quantity equaling 1.5 million square meter

equivalents each year. For worsted wool fabric of the type used in

the manufacture of men’s suits made from fiber greater than 18.5

micron, the applicable tariff would be reduced from the current

U.S. rate on such fabric to the current U.S. rate on worsted wool

suit-type jackets, up to a quantity equaling 2.5 million square

meter equivalents each year. The conference agreement suspends

the current U.S. tariff on worsted wool yarn containing greater

126

than or equal to 85 percent wool of average fiber diameter of 18.5

micron or finer and on wool fiber and wool top made from wool

fiber of an average diameter of 18.5 micron and finer from the current U.S. normal trade relations (NTR) rate to zero.

The conference agreement also authorizes the President to

grant additional tariff relief on wool fabric of up to 1 million square

meter equivalents per year for worsted wool fabric from fiber of

18.5 micron and finer and up to 1 million square meter equivalents

per year for worsted wool fabric from fiber greater than 18.5 micron. Expanding the quantity of fabric to which the tariff reductions would apply would depend each year on the President’s determination with respect to then-current market conditions in the

United States markets for suits, fabric, yarn and fiber. In particular, the President should focus on growth in production and the

relative competitiveness and health of both the suit-making and

fabric manufacturing industries in the United States.

Under the conference agreement, the President is obliged to

monitor market conditions in the United States and, toward that

end, establish statistical suffixes in the Harmonized Tariff Schedule sufficient for the collection of certain data on imports of worsted wool fabric and apparel. The President has residual authority

to reduce the applicable tariffs on imports of worsted wool fabric

in order to take into account any staged reductions in the U.S. tariff rate applicable to worsted wool suits and the Canadian tariff

rate applicable to worsted wool fabric that serve as benchmark

rates under the conference report.

The conference report requires the President or his or her designee to allocate the available tariff relief on worsted wool fabric

among manufacturers of the apparel items identified in the agreement based on historical production. The same principle would

apply to the President’s allocation of other tariff relief provided

under these provisions of the conference agreement.

The conference agreement also provides for the refund of certain duties in each of three succeeding years on imports of worsted

wool fabric used in men’s and boys’ suits, suit-type jackets and

trousers, worsted wool yarn, wool fiber and wool top. In each instance, a U.S. manufacturer of a downstream product would be eligible for a refund of duties currently paid on certain inputs up to

an amount that is one-third of the duties actually paid by such importing U.S. manufacturer on such items in calendar year 1999. In

the case of worsted wool fabric, for example, a U.S. suit-maker

would be eligible to claim a refund during calendar year 2000 for

one-third of the duties paid on such fabric during calendar year

1999. The same refund schedule applies to a fabric-maker’s importation of wool yarn, wool fiber, and wool top.

The conference agreement creates a fund for research and market development for American wool-growers that would assist in

disseminating information that would help the industry improve

the quality of the fiber provided and its production methods. The

conference report sets aside duties collected under the HTS chapter

relating to the products covered by these provisions—wool fiber and

top and worsted wool yarn and fabric up to an amount of $2.25 million per year in each fiscal year from 2000–2003. It is the intent

of the conferees that the United States Department of Agriculture

127

1Treas. Reg. sec. 1.448–2T.

shall designate an experienced cooperator such as the American

Wool Council as the trust fund’s representative for the purposes of

this provision.

The conferees direct the President to determine what mechanisms are available under the North American Free Trade Agreement (NAFTA), the World Trade Organization and U.S. domestic

law to alleviate the serious injury to the U.S. wool suit and fabric

industries as a result of the Canadian wool tariff preference level

under the NAFTA. The President shall recommend that the U.S.

Trade Representative undertake the appropriate steps necessary to

help remedy the adverse effect on this sector’s competitiveness, and

shall report his recommendations to the Committee on Ways and

Means of the House of Representatives and the Senate Committee

on Finance by January 1, 2001.

TITLE VI—REVENUE PROVISIONS

A. LIMITATION ON THE USE OF NON-ACCRUAL EXPERIENCE METHOD

OF ACCOUNTING

(SEC. 21 OF THE HOUSE BILL, SEC. 504 OF THE SENATE AMENDMENT,

AND SEC. 448 OF THE CODE)

Present law

An accrual method taxpayer generally must recognize income

when all the events have occurred that fix the right to receive the

income and the amount of the income can be determined with reasonable accuracy. An accrual method taxpayer may deduct the

amount of any receivable that was previously included in income

that becomes worthless during the year.

Accrual method taxpayers are not required to include in income amounts to be received for the performance of services which,

on the basis of experience, will not be collected (the ‘‘non-accrual

experience method’’). The availability of this method is conditioned

on the taxpayer not charging interest or a penalty for failure to

timely pay the amount charged. The Secretary of the Treasury has

published temporary regulations 1 requiring the use of a formula

comparing receivables not collected to total receivables earned during the testing period in determining the portion of the amount

which, on the basis of experience, will not be collected. The temporary regulations provide that no other method or formula may be

used by a taxpayer in determining the uncollectible amounts under

this subsection.

A cash method taxpayer is not required to include an amount

in income until it is received. A taxpayer generally may not use the

cash method if purchase, production, or sale of merchandise is an

income producing factor. Such taxpayers generally are required to

keep inventories and use an accrual method of accounting. In addition, corporations (and partnerships with corporate partners) generally may not use the cash method of accounting if their average

annual gross receipts exceed $5 million. An exception to this $5

million rule is provided for qualified personal service corporations.

A qualified personal service corporation is a corporation (1) subVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00127 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.071 pfrm02 PsN: A606HR
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2 1999–52 I.R.B. 725.

stantially all of whose activities involve the performance of services

in the fields of health, law, engineering, architecture, accounting,

actuarial science, performing arts or consulting and (2) substantially all of the stock of which is owned by current or former employees performing such services, their estates or heirs. Qualified

personal service corporations are allowed to use the cash method

without regard to whether their average annual gross receipts exceed $5 million.

House bill

The House bill provides that the non-accrual experience method will be available only for amounts to be received for the performance of qualified personal services. Amounts to be received for

the performance of all other services will be subject to the general

rule regarding inclusion in income. Qualified personal services are

personal services in the fields of health, law, engineering, architecture, accounting, actuarial science, performing arts or consulting.

As under present law, the availability of the method is conditioned

on the taxpayer not charging interest or a penalty for failure to

timely pay the amount.

Effective date.—The provision of the House bill is effective for

taxable years ending after the date of enactment. Any change in

the taxpayer’s method of accounting necessitated as a result of the

proposal will be treated as a voluntary change initiated by the taxpayer with the consent of the Secretary of the Treasury. Any required section 481(a) adjustment is to be taken into account over

a period not to exceed four years under principles consistent with

those in Rev. Proc. 99–49.2

Senate amendment

The Senate amendment is the same as the House bill.

Conference agreement

The conference agreement does not include the House bill or

the Senate amendment provision.

B. ADD CERTAIN VACCINES AGAINST STREPTOCOCCUS PNEUMONIAE

TO THE LIST OF TAXABLE VACCINES

(SEC. 22 OF THE HOUSE BILL AND SECS. 4131 AND 4132 OF THE CODE)

Present law

A manufacturer’s excise tax is imposed at the rate of 75 cents

per dose (sec. 4131) on the following vaccines recommended for routine administration to children: diphtheria, pertussis, tetanus, measles, mumps, rubella, polio, HIB (haemophilus influenza type B),

hepatitis B, varicella (chicken pox), and rotavirus gastroenteritis.

In addition, the Ticket to Work and Work Incentives Improvement

Act of 1999 (Pub. L. No. 106–170, December 17, 1999) added any

conjugate vaccine against streptococcus pneumoniae to the list of

taxable vaccines. The tax applied to any vaccine that is a combination of vaccine components equals 75 cents times the number of

components in the combined vaccine.

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3The net proceeds equal the gross loan proceeds less the direct expenses of obtaining the loan.

Amounts equal to net revenues from this excise tax are deposited in the Vaccine Injury Compensation Trust Fund (‘‘Vaccine

Trust Fund’’) to finance compensation awards under the Federal

Vaccine Injury Compensation Program for individuals who suffer

certain injuries following administration of the taxable vaccines.

This program provides a substitute Federal, ‘‘no fault’’ insurance

system for the State-law tort and private liability insurance systems otherwise applicable to vaccine manufacturers and physicians. All persons immunized after September 30, 1988, with covered vaccines must pursue compensation under this Federal program before bringing civil tort actions under State law.

House bill

The House bill would add any conjugate vaccine against streptococcus pneumoniae to the list of taxable vaccines.

Senate amendment

No provision.

Conference agreement

No provision. However, the provision was enacted in the Ticket

to Work and Work Incentives Improvement Act of 1999.

C. MODIFICATION OF INSTALLMENT METHOD AND REPEAL OF

INSTALLMENT METHOD FOR ACCRUAL METHOD TAXPAYERS

(SEC. 501 OF THE SENATE AMENDMENT AND SECS. 453 AND 453A OF

THE CODE)

Present law

The installment method of accounting allows a taxpayer to

defer the recognition of income from the disposition of certain property until payment is received. Sales to customers in the ordinary

course of business are not eligible for the installment method, except for sales of property that is used or produced in the trade or

business of farming and sales of timeshares and residential lots if

an election to pay interest under section 453(l)(2)(B)) is made. The

Ticket to Work and Work Incentives Improvement Act of 1999 prohibits the use of the installment method for a transaction that

would otherwise be required to be reported using the accrual method of accounting, effective for dispositions occurring on or after December 17, 1999.

A pledge rule provides that if an installment obligation is

pledged as security for any indebtedness, the net proceeds 3 of such

indebtedness are treated as a payment on the obligation, triggering

the recognition of income. Actual payments received on the installment obligation subsequent to the receipt of the loan proceeds are

not taken into account until such subsequent payments exceed the

loan proceeds that were treated as payments. The pledge rule does

not apply to sales of property used or produced in the trade or business of farming, to sales of timeshares and residential lots where

the taxpayer elects to pay interest under section 453(l)(2)(B), or to

dispositions where the sales price does not exceed $150,000. The

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Ticket to Work and Work Incentives Improvement Act of 1999 provides that the right to satisfy a loan with an installment obligation

will be treated as a pledge of the installment obligation, effective

for dispositions occurring on or after December 17, 1999.

House bill

No provision.

Senate amendment

The Senate amendment contains provisions prohibiting the use

of the installment method for a transaction that would otherwise

be required to be reported using the accrual method of accounting

and expanding the pledge rule.

Conference agreement

No provision. The provisions in the Senate amendment were

enacted in the Ticket to Work and Work Incentives Improvement

Act of 1999.

D. IMPOSE LIMITATION ON PREFUNDING OF CERTAIN EMPLOYEE

BENEFITS

(SEC. 502 OF THE SENATE AMENDMENT AND SECS. 419A AND 4976 OF

THE CODE)

Present law

Under present law, contributions to a welfare benefit fund generally are deductible when paid, but only to the extent permitted

under the rules of sections 419 and 419A. The amount of an employer’s deduction in any year for contributions to a welfare benefit

fund cannot exceed the fund’s qualified cost for the year minus the

fund’s after-tax income for the year. With certain exceptions, the

term qualified cost means the sum of (1) the amount that would

be deductible for benefits provided during the year if the employer

paid them directly and was on the cash method of accounting, and

(2) within limits, the amount of any addition to a qualified asset

account for the year. A qualified asset account includes any account

consisting of assets set aside for the payment of disability benefits,

medical benefits, supplemental unemployment compensation or

severance pay benefits, or life insurance benefits. The account limit

for a qualified asset account for a taxable year is generally the

amount reasonably and actuarially necessary to fund claims incurred but unpaid (as of the close of the taxable year) for benefits

with respect to which the account is maintained and the administrative costs incurred with respect to those claims. Specific additional reserves are allowed for future provisions of post-retirement

medical and life insurance benefits.

The deduction limits of sections 419 and 419A for contributions

to welfare benefit funds do not apply in the case of certain 10-ormore employer plans. A plan is a 10-or-more employer plan if (1)

more than one employer contributes to it, and (2) no employer is

normally required to contribute more than 10 percent of the total

contributions contributed under the plan by all employers. The exception is not available if the plan maintains experience-rating arrangements with respect to individual employers.

131

If any portion of a welfare benefit fund reverts to the benefit

of an employer, an excise tax equal to 100 percent of the reversion

is imposed on the employer.

House bill

No provision.

Senate amendment

The Senate amendment limits the present-law exception to the

deduction limit for 10-or-more employer plans to plans that provide

only medical benefits, disability benefits, and qualifying group-term

life insurance benefits to plan beneficiaries. The legislative history

provides that it is intended that a plan will not be treated as failing to provide only medical benefits, disability benefits, and qualifying group-term life insurance benefits to plan beneficiaries merely because the plan provides certain de minimis ancillary benefits

in addition to medical, disability, and qualifying group-term life insurance benefits (e.g., accidental death and dismemberment insurance, group-term life insurance coverage for dependents and directors, business travel insurance, and 24-hour accident insurance).

Such ancillary benefits are considered de minimis only if the total

premiums for all such insurance coverages for the year do not exceed 2 percent of the total contributions to the plan for the year

for all employers. Of course, any benefits provided are includible in

income unless expressly excluded under a specific provision under

the Code.

The legislative history also provides that, for purposes of this

provision, qualifying group-term life insurance benefits do not include any arrangements that permit a plan beneficiary to directly

or indirectly access all or part of the account value of any life insurance contract, whether through a policy loan, a partial or complete surrender of the policy, or otherwise. The legislative history

provides that it is intended that qualifying group-term life insurance benefits do not include any arrangement whereby a plan beneficiary may receive a policy without a stated account value that has

the potential to give rise to an account value whether through the

exchange of such policy for another policy that would have an account value or otherwise.

Under the Senate amendment, the 10-or-more employer plan

exception is no longer available with respect to plans that provide

supplemental unemployment compensation, severance pay, or life

insurance (other than qualifying group-term life insurance) benefits. Thus, the generally applicable deduction limits (sections 419

and 419A) apply to plans providing these benefits.

In addition, if any portion of a welfare benefit fund attributable to contributions that are deductible pursuant to the 10-ormore employer exception (and earnings thereon) is used for a purpose other than for providing medical benefits, disability benefits,

or qualifying group-term life insurance benefits to plan beneficiaries such portion is treated as reverting to the benefit of the

employers maintaining the fund and is subject to the imposition of

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4For purposes of the provision, medical benefits, disability benefits, and qualifying group-term

life insurance benefits include de minimus ancillary benefits as described above. 5Section 1234A, as amended by the Taxpayer Relief Act of 1997.

the 100-percent excise tax.4 Thus, for example, cash payments to

employees upon termination of the fund, and loans or other distributions to the employee or employer, would be treated as giving

rise to a reversion that is subject to the excise tax.

The legislative history indicates that no inference is intended

with respect to the validity of any 10-or-more employer arrangement under the provisions of present law.

Effective date.—The Senate amendment is effective with respect to contributions paid or accrued on or after June 9, 1999, in

taxable years ending after such date.

Conference agreement

No provision.

E. TREATMENT OF GAIN FROM CONSTRUCTIVE OWNERSHIP

TRANSACTIONS

(SEC. 503 OF THE SENATE AMENDMENT AND SEC. 1260 OF THE CODE)

Present law

The maximum individual income tax rate on ordinary income

and short-term capital gain is 39.6 percent, while the maximum individual income tax rate on long-term capital gain generally is 20

percent. Long-term capital gain means gain from the sale or exchange of a capital asset held more than one year. For this purpose, gain from the termination of a right with respect to property

which would be a capital asset in the hands of the taxpayer is

treated as capital gain.5

A pass-thru entity (such as a partnership) generally is not subject to Federal income tax. Rather, each owner includes its share

of a pass-thru entity’s income, gain, loss, deduction or credit in its

taxable income. Generally, the character of the item is determined

at the entity level and flows through to the owners.

Investors may enter into forward contracts, notional principal

contracts, and other similar arrangements with respect to property

that provides the investor with the same or similar economic benefits as owning the property directly but with potentially different

tax consequences as to the character and timing of any gain. The

Ticket to Work and Work Incentives Improvement Act of 1999 limits the amount of long-term capital gain a taxpayer can recognize

from certain ‘‘constructive ownership transactions’’ any excess gain

is treated as ordinary income.

House bill

No provision.

Senate amendment

The Senate amendment provision limits the amount of longterm capital gain a taxpayer can recognize from certain constructive ownership transactions with respect to certain financial assets.

133

This provision was enacted in the Ticket to Work and Work Incentives Improvement Act of 1999.

Conference agreement

No provision. However, the provision was enacted in the Ticket

to Work and Work Incentives Improvement Act of 1999.

F. REQUIRE CONSISTENT TREATMENT AND PROVIDE BASIS ALLOCATION RULES FOR TRANSFERS OF INTANGIBLES IN CERTAIN NONRECOGNITION TRANSACTIONS

(SEC. 505 OF THE SENATE AMENDMENT AND SECS. 351 AND 721 OF THE

CODE)

Present law

Generally, no gain or loss is recognized if one or more persons

transfer property to a corporation solely in exchange for stock in

the corporation and, immediately after the exchange such person or

persons are in control of the corporation. Similarly, no gain or loss

is recognized in the case of a contribution of property in exchange

for a partnership interest. Neither the Internal Revenue Code nor

the regulations provide the meaning of the requirement that a person ‘‘transfer property’’ in exchange for stock (or a partnership interest). The Internal Revenue Service interprets the requirement

consistent with the ‘‘sale or other disposition of property’’ language

in the context of a taxable disposition of property. See, e.g., Rev.

Rul. 69–156, 1969–1 C.B. 101. Thus, a transfer of less than ‘‘all

substantial rights’’ to use property will not qualify as a tax-free exchange and stock received will be treated as payments for the use

of property rather than for the property itself. These amounts are

characterized as ordinary income. However, the Claims Court has

rejected the Service’s position and held that the transfer of a nonexclusive license to use a patent (or any transfer of ‘‘something of

value’’) could be a ‘‘transfer’’ of ‘‘property’’ for purposes of the nonrecognition provision. See E.I. DuPont de Nemours & Co. v. U.S.,

471 F.2d 1211 (Ct. Cl. 1973).

House bill

No provision.

Senate amendment

The Senate amendment treats a transfer of an interest in intangible property constituting less than all of the substantial rights

of the transferor in the property as a transfer of property for purposes of the nonrecognition provisions regarding transfers of property to controlled corporations and partnerships. In the case of a

transfer of less than all of the substantial rights, the transferor is

required to allocate the basis of the intangible between the retained rights and the transferred rights based upon their respective

fair market values.

No inference is intended as to the treatment of these or similar

transactions prior to the effective date.

Effective date.—The provision is effective for transfers on or

after the date of enactment.

134

Conference agreement

No provision.

G. INCREASE ELECTIVE WITHHOLDING RATE FOR NONPERIODIC

DISTRIBUTIONS FROM DEFERRED COMPENSATION PLANS

(SEC. 506 OF THE SENATE AMENDMENT AND SEC. 3405 OF THE CODE)

Present law

Present law provides that income tax withholding is required

on designated distributions from employer deferred compensation

plans (whether or not such plans are tax qualified), individual retirement arrangements (‘‘IRAs’’), and commercial annuities unless

the payee elects not to have withholding apply. A designated distribution does not include any payment (1) that is wages, (2) the

portion of which it is reasonable to believe is not includible in gross

income, (3) that is subject to withholding of tax on nonresident

aliens and foreign corporations (or would be subject to such withholding but for a tax treaty), or (4) that is a dividend paid on certain employer securities (as defined in sec. 404(k)(2)).

Tax is generally withheld on the taxable portion of any periodic

payment as if the payment is wages to the payee. A periodic payment is a designated distribution that is an annuity or similar periodic payment.

In the case of a nonperiodic distribution, tax generally is withheld at a flat 10-percent rate unless the payee makes an election

not to have withholding apply. A nonperiodic distribution is any

distribution that is not a periodic distribution. Under current administrative rules, an individual receiving an nonperiodic distribution can designate an amount to be withheld in addition to the 10-

percent otherwise required to be withheld.

Under present law, in the case of a nonperiodic distribution

that is an eligible rollover distribution, tax is withheld at a 20-percent rate unless the payee elects to have the distribution rolled directly over to an eligible retirement plan (i.e., an IRA, a qualified

plan (sec. 401(a)) that is a defined contribution plan permitting direct deposits of rollover contributions, or a qualified annuity plan

(sec. 403(a)). In general, an eligible rollover distribution includes

any distribution to an employee of all or any portion of the balance

to the credit of the employee in a qualified plan or qualified annuity plan. An eligible rollover distribution does not include any distribution that is part of a series of substantially equal periodic payments made (1) for the life (or life expectancy) of the employee or

for the joint lives (or joint life expectancies) of the employee and

the employee’s designated beneficiary, or (2) over a specified period

of 10 years or more. An eligible rollover distribution also does not

include any distribution required under the minimum distribution

rules of section 401(a)(9), hardship distributions from section

401(k) plans, or the portion of a distribution that is not includible

in income. The payee of an eligible rollover distribution can only

elect not to have withholding apply by making the direct rollover

election.

135

House bill

H. PROVISIONS RELATING TO REAL ESTATE INVESTMENT TRUSTS

(‘‘REITS’’)

(SECS. 610–622 OF THE SENATE AMENDMENT AND SECS. 852, 856, AND

857 OF THE CODE)

Present law

In general, a real estate investment trust (‘‘REIT’’) is an entity

that receives most of its income from passive real estate related investments and that receives pass-through treatment for income

that is distributed to shareholders. If an electing entity meets the

qualifications for REIT status, the portion of its income that is distributed to the investors each year generally is taxed to the investors without being subjected to tax at the REIT level.

A REIT must satisfy a number of tests on a year-by-year basis

that relate to the entity’s: (1) organizational structure; (2) source

of income; (3) nature of assets; and (4) distribution of income.

Under the organizational structure test, except for the first

taxable year for which an entity elects to be a REIT, the beneficial

ownership of the entity must be held by 100 or more persons. Generally, no more than 50 percent of the value of the REIT’s stock

can be owned by five or fewer individuals during the last half of

the taxable year. Certain attribution rules apply in making this determination. No similar rule applies to corporate ownership of a

REIT.

House bill

No provision.

Senate amendment

The Senate amendment contains a number of provisions relating to REITS. These include a provision generally limiting the level

of investment a REIT can have in another entity to 10 percent of

value (or vote), except in the case of taxable REIT subsidiaries, for

which specific rules are provided. The provisions also permit REITs

to own and operate health care facilities under certain circumstances, modify the definition of independent contractor and of

real estate rental income, modify the earnings and profits rules for

REITs and for regulated investment companies (‘‘RICS’’), and modify the estimated tax rules for investors in certain closely held

REITs.

The Senate amendment also imposes an additional requirement for REIT qualification that makes certain controlled entities

ineligible for REIT status and imposes a number of related rules.

Under that provision, except for the first taxable year for which an

entity elects to be a REIT, no one person can own stock of a REIT

possessing 50 percent or more of the combined voting power of all

classes of voting stock or 50 percent or more of the total value of

shares of all classes of stock of the REIT. For purposes of determining a person’s stock ownership, rules similar to attribution

rules for REIT qualification under present law apply (secs.

856(d)(5) and 856(h)(3)). The provision does not apply to ownership

136

by a REIT of 50 percent or more of the stock (vote or value) of another REIT.

An exception applies for a limited period to certain ‘‘incubator

REIT’’. An incubator REIT is a corporation that elects to be treated

as an incubator REIT and that meets all the following other requirements: (1) it has only voting common stock outstanding, (2)

not more than 50 percent of the corporation’s real estate assets

consist of mortgages, (3) from not later than the beginning of the

last half of the second taxable year, at least 10 percent of the corporation’s capital is provided by lenders or equity investors who are

unrelated to the corporation’s largest shareholder, (4) the corporation must annually increase the value of real estate assets by at

least 10 percent, (5) the directors of the corporation must adopt a

resolution setting forth an intent to engage in a going public transaction, and (6) no predecessor entity (including any entity from

which the electing incubator REIT acquired assets in a transaction

in which gain or loss was not recognized in whole or in part) had

elected incubator REIT status.

The new ownership requirement does not apply to an electing

incubator REIT until the end of the REIT’s third taxable year; and

can be extended for an additional two taxable years if the REIT so

elects. However, a REIT cannot elect the additional two-year extension unless the REIT agrees that if it does not engage in a going

public transaction by the end of the extended eligibility period, it

shall pay Federal income taxes for the two years of the extended

period as if it had not made an incubator REIT election and had

ceased to qualify as a REIT for those two taxable years. In such

case, the corporation shall file appropriate amended returns within

3 months of the close of the extended eligibility period. Interest

would be payable, but no substantial underpayment penalties

would apply except in cases where there is a finding that incubator

REIT status was elected for a principal purpose other than as part

of a reasonable plan to engage in a going public transaction. Notification of shareholders and any other person whose tax position

would reasonably be expected to be affected is also required.

If an electing incubator REIT does not elect to extend its initial

2-year extended eligibility period and has not engaged in a going

public transaction by the end of such period, it must satisfy the

new control requirements as of the beginning of its fourth taxable

year (i.e., immediately after the close of the last taxable year of the

two-year initial extension period) or it will be required to notify its

shareholderss and other persons that may be affected by its tax

status, and pay Federal income tax as a corporation that has

ceased to qualify as a REIT at that time.

If the Secretary of the Treasury determines that an incubator

REIT election was filed for a principal purpose other than as part

of a reasonable plan to undertake a going public transaction, an excise tax of $20,000 is imposed on each of the corporation’s directors

for each taxable year for which the election was in effect.

For purposes of determining whether a corporation has met the

requirement that it annually increase the value of its real estate

assets by 10 percent, the following rules shall apply. First, values

shall be based on cost and properly capitalizable expenditures with

no adjustment for depreciation. Second, the test shall be applied by

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6The threshold is $75,000 for married taxpayers filing separately.

comparing the value of assets at the end of the first taxable year

with those at the end of the second taxable year and by similar

successive taxable year comparisons during the eligibility period.

Third, if a corporation fails the 10 percent comparison tests for one

taxable year, it may remedy the failure by increasing the value of

real estate assets by 25 percent in the following taxable year, provided it meets all the other eligibility period requirements in that

following taxable year.

A going public transaction is defined as either (1) a public offering of shares of stock of the incubator REIT, (2) a transaction,

or series of transactions, that result in the incubator REIT stock

being regularly traded on an established securities market (as defined in section 897) and being held by shareholders unrelated to

persons who held such stock before it began to be so regularly traded, or (3) any transaction resulting in ownership of the REIT by

200 or more persons (excluding the largest single shareholder) who

in the aggregate own least 50 percent of the stock of the REIT. Attribution rules apply in determining ownership of stock.

Effective date.—Under the Senate amendment, the provision

denying REIT status to certain controlled entities is effective for

taxable years ending after July 14, 1999. Any entity that elects (or

has elected) REIT status for a taxable year including July 14, 1999,

and which is both a controlled entity and has significant business

assets or activities on such date, will not be subject to the proposal.

Under this rule, a controlled entity with significant business assets

or activities on July 14, 1999, can be grandfathered even if it

makes its first REIT election after that date with its return for the

taxable year including that date.

For purposes of the transition rules, the significant business

assets or activities in place on July 14, 1999, must be real estate

assets and activities of a type that would be qualified real estate

assets and would produce qualified real estate related income for

a REIT.

Conference agreement

No provision. However, the Senate amendment provisions, except for the provision what would have denied REIT status to certain controlled entities, were enacted in the ticket to Work and

Work Incentives Improvement Act of 1999.

I. MODIFICATION OF INDIVIDUAL ESTIMATED TAX SAFE HARBOR

(SEC. 623 OF THE SENATE AMENDMENT AND SEC. 6654 OF THE CODE)

Present law

Under present law, an individual taxpayer generally is subject

to an addition to tax for any underpayment of estimated tax. An

individual generally does not have an underpayment of estimated

tax if he or she makes timely estimated tax payments at least

equal to: (1) 90 percent of the tax shown on the current year’s return or (2) 100 percent of the prior year’s tax. For taxpayers with

a prior year’s AGI above $150,000,6 however the rule that allows

payment of 100 percent of prior year’s tax is modified. Those taxVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00137 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.077 pfrm02 PsN: A606HR
138

7This percentage was enacted in sec. 531 of P.L. 106–170, the Ticket to Work and Work Incentives Improvement Act of 1999 (December 17, 1999).

payers with AGI above $150,000 generally must make estimated

payments based on either (1) 90 percent of the tax shown on the

current year’s return or (2) 110 percent of the prior year’s tax.

For taxpayers with a prior year’s AGI above $150,000, the

prior year’s tax safe harbor is modified for estimated tax payments

made for taxable years 2000 and 2002. For such taxpayers making

estimated tax payments based on prior year’s tax payments must

be made based on 108.6 percent of prior year’s tax for taxable year

2000 7 and 112 percent of prior year’s tax for taxable year 2002.

House bill

No provision.

Senate amendment

The Senate amendment further modifies the safe harbor rule

by providing that taxpayers with prior year’s AGI above $150,000

who make estimated tax payments based on prior year’s tax must

do so based on 106.5 percent of prior year’s tax for estimated tax

payments made for taxable year 2000. Taxpayers with prior year’s

AGI above $150,000 who made estimated tax payments based on

prior year’s tax must do so based on 106 percent of prior year’s tax

for estimated tax payments made for taxable year 2001. All other

years remain as under present law.

Effective date.—The provision is effective for estimated payments made for taxable year beginning after December 31, 1999.

Conference agreement

No provision.

J. PROVIDE WAIVER FROM DENIAL OF FOREIGN TAX CREDITS

(SEC. 724 OF THE SENATE AMENDMENT AND SEC. 901(J) OF THE CODE)

Present law

In general, U.S. persons may credit foreign taxes against U.S.

tax on foreign-source income. The amount of foreign tax credits

that can be claimed in a year is subject to a limitation that prevents taxpayers from using foreign tax credits to offset U.S. tax on

U.S.-source income. Separate limitations are applied to specific categories of income.

Pursuant to special rules applicable to taxes paid to certain

foreign countries, no foreign tax credit is allowed for income, war

profits, or excess profits taxed paid, accrued, or deemed paid to a

country which satisfies specified criteria, to the extent that the

taxes are with respect to income attributable to a period during

which such criteria were satisfied (sec. 901(j)). Section 901(j) applies with respect to any foreign country: (1) the government of

which the United States does not recognize, unless such government is otherwise eligible to purchase defense articles or services

under the Arms Export Control Act, (2) with respect to which the

United States has severed diplomatic relations, (3) with respect to

which the United States has not severed diplomatic relations but

139

8Sec. 952(a)(5).

9 A proof gallon is a liquid gallon consisting of 50 percent alcohol.

does not conduct such relations, or (4) which the Secretary of State

has, pursuant to section 6(j) of the Export Administration Act of

1979, as amended, designated as a foreign country which repeatedly provides support for acts of international terrorisms (a ‘‘section

901(j) foreign country’’). The denial of credits applies to any foreign

country during the period beginning on the later of January 1,

1987, or six months after such country becomes a section 901(j)

country, and ending on the date the Secretary of State certifies to

the Secretary of the Treasury that such country is no longer a section 901(j) country.

Taxes treated as noncreditable under section 901(j) generally

are permitted to be deducted notwithstanding the fact that the taxpayer elects use of the foreign tax credit for the taxable year with

respect to other taxes. In addition, income for which foreign tax

credits are denied generally cannot be sheltered from U.S. tax by

other creditable foreign taxes.

Under the rules of subpart F, U.S. 10-percent shareholders of

a controlled foreign corporation (‘‘CFC’’) are required to include in

income currently certain types of income of the CFC, whether or

not such income is actually distributed currently to the shareholders (referred to as ‘‘subpart F income’’). Subpart F income includes income derived from any foreign country during a period in

which the taxes imposed by that country are denied eligibility for

the foreign tax credit under section 901(j).8

House bill

No provision.

Senate amendment

The Senate amendment provides that section 901(j) no longer

applies with respect to a foreign country if: (1) the President determines that a waiver of the application of section 901(j) to such foreign country is in the national interest of the United States and

will expand trade opportunities for U.S. companies in such foreign

country, and (2) the President reports to the Congress, not less

than 30 days before the waiver is granted, the intention to grant

such a waiver and the reason for such waiver.

Effective date.—The provision is effective on or after February

1, 2001.

Conference agreement

The conference agreement follows the Senate amendment.

K. ACCELERATE RUM EXCISE TAX COVEROVER PAYMENTS TO PUERTO

RICO AND THE U.S. VIRGIN ISLANDS

(SEC. 221 OF THE SENATE AMENDMENT AND SEC. 7652 OF THE CODE)

Present law

A $13.50 per proof gallon 9 excise tax is imposed on distilled

spirits produced in or imported (or brought) into the United States.

The excise tax does not apply to distilled spirits that are exported

140

10The Department of the Interior, which administers the coverover payments for rum imported into the United States from the U.S. Virgin Islands, erroneously authorized full payment

to the Virgin Islands of the increased coverover rate on that rum notwithstanding the statutory

limit on these transfers for periods before October 1, 2000. The Bureau of Alcohol, Tobacco, and

Firearms, which administers the coverover payments for the Virgin Islands’ portion of tax collected on rum imported from other countries, complied with the statutory limit. 11Thus, this provision of the conference agreement applies only to payments to Puerto Rico

and to payments of the Virgin Islands’ portion of tax on rum imported from other countries because the Interior Department erroneously has already paid in full amounts attributable to rum

imported from the Virgin Islands.

from the United States or to distilled spirits that are consumed in

U.S. possessions (e.g., Puerto Rico and the Virgin Islands). The Code provides for coverover (payment) of $13.25 per proof

gallon of the excise tax imposed on rum imported (or brought) into

the United States (without regard to the country of origin) to Puerto Rico and the Virgin Islands during the period July 1, 1999

through December 31, 2001. Effective on January 1, 2002, the

coverover rate is scheduled to return to its permanent level of

$10.50 per proof gallon. The maximum amount attributable to the

increased coverover rate over the permanent rate of $10.50 per

proof gallon that can be paid to Puerto Rico and the Virgin Islands

before October 1, 2000 is $20 million. Payment of this amount was

made on January 3, 2000.10 Any remaining amounts attributable

to the increased coverover rate are to be paid on October 1, 2000.

Amounts covered over to Puerto Rico and the Virgin Islands

are deposited into the treasuries of the two possessions for use as

those possessions determine.

House bill

No provision, but H.R. 984, as reported by the Committee on

Ways and Means, would have provided an increase in the coverover

amount to $13.50 per proof gallon for the period June 30, 1999, and

before October 1, 1999. (The conference report on the Ticket to

Work and Work Incentives Improvement Act of 1999 (Pub. L. No.

106–170, December 17, 1999) subsequently increased the coverover

rate from $10.50 per proof gallon to $13.25 per proof gallon, and

enacted the $20 million limit on transfer of the increased amount

before October 1, 2000. The conference report further indicated

that the special payment rule would be reviewed during consideration of H.R. 434.)

Senate amendment

The Senate amendment is the same as the Ways and Means

Committee-reported provisions of H.R. 984.

Conference agreement

The conference agreement provides that unpaid amounts at- tributable to the increase in the coverover rate to $13.25 per proof

gallon for the period from July 1, 1999 through the last day of the

month prior to the date of enactment will be paid on the first

monthly payment date following the date of enactment.11 With respect to amounts attributable to the period beginning with the

month of the conference agreement’s enactment, payments will be

based on the full $13.25 per proof gallon rate.

The conference agreement further includes two clarifications to

the rules governing coverover payments. First, clarification is proVerDate 27-APR-2000 08:01 May 06, 2000 Jkt 079006 PO 00000 Frm 00140 Fmt 6601 Sfmt 6601 E:\HR\OC\A606HR.079 pfrm02 PsN: A606HR
141

vided that payments to the Virgin Islands with respect to rum imported from that possession are to be made annually in advance

(based on estimates) as is the current administrative practice. Second, the conference agreement clarifies that the Internal Revenue

Code provisions governing coverover payments are the exclusive

authorize authority for making those payments.

Effective date.—The provision is effective on the date of enactment.

TRADE PROVISIONS NOT INCLUDED IN EITHER THE HOUSE OR SENATE

BILL—ACCESS TO HIV/AIDS PHARMACEUTICALS AND MEDICAL TECHNOLOGIES

Present law

The Special 301 provisions of the Trade Act of 1974 require the

President to identify, within 30 days after submission of the annual

National Trade Estimates report to Congress, those foreign countries that deny adequate and effective protection of intellectual

property rights or fair and equitable market access to U.S. persons

that rely upon intellectual property protection, and those countries

determined by USTR to be ‘‘priority foreign countries.’’ The President is to identify as priority countries only those that have the

most onerous or egregious acts, policies, or practices with the greatest adverse impact on the relevant U.S. products, and that are not

entering into good faith negotiations or making significant progress

in bilateral or multilateral negotiations to provide adequate and affective intellectual property rights protection.

House bill

No provision.

Senate amendment

Section 116 of the Senate bill seeks to address the issue of access to HIV/AIDS pharmaceuticals and medical technologies in the

beneficiary countries of sub-Saharan Africa. In subsection (a), Congress finds that since the onset of the worldwide HIV/AIDS epidemic, approximately 34,000,000 people living in sub-Saharan Africa have been infected with the disease. Of those infected, approximately 11,500,000 have died, representing 83 percent of the total

HIV/AIDS-related deaths worldwide. Subsection (b) expresses the

sense of Congress that:

It is in the interest of the United States to take all necessary steps to prevent further spread of infectious disease,

particularly HIV/AIDS;

There is critical need for effective incentives to develop

new pharmaceuticals, vaccines, and therapies to combat the

HIV/AIDS crisis, especially effective global standards for protecting pharmaceutical and medical innovation;

The overriding priority for responding to the crisis on HIV/

AIDS in sub-Saharan Africa should be the development of the

infrastructure necessary to deliver adequate health care services, and of public education to prevent transmission and infection, rather than legal standards issues;

142

Individual countries should have the ability to determine

the availability of pharmaceuticals and health care for their

citizens in general, and particularly with respect to the HIV/

AIDS epidemic.

Subsection (c) prohibits the Administration from seeking,

through negotiation or otherwise, the revocation or revision of any

intellectual property or competition law or policy that regulates

HIV/AIDS pharmaceuticals or medical technologies of a beneficiary

sub-Saharan African country if the law or policy promotes access

to HIV/AIDS pharmaceuticals or medical technologies and the law

or policy of the country provides adequate and effective intellectual

property protection consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights referred to in section

101(d)(15) of the Uruguay Round Agreements Act.

Conference agreement

The Senate recedes to the House.

TRADE ADJUSTMENT ASSISTANCE

Present law

Title II of the Trade Act of 1974, as amended, authorizes three

trade adjustment assistance (TAA) programs for the purpose of providing assistance to individual workers and firms that are adversely affected by import competition. Those programs are: (1) the

general TAA program for workers, which provides training and income support for workers adversely affected by import competition;

(2) the TAA program for firms, which provides technical assistance

to qualifying firms; and (3) the North American Free Trade Agreement (NAFTA) Transitional Adjustment Assistance (NAFTA–TAA)

program for workers (established by the North American Free

Trade Agreement Implementation Act of 1993), which provides

training and income support for workers adversely affected by imports from or production shifts to Canada and/or Mexico.

The authorizations for all three programs expire on September

30, 2001. At the time of the passage of the Senate bill, the authorization for these programs had expired on June 30, 1999.

House bill

No provision.

Senate amendment

Section 401 of the Senate bill reauthorizes each of the three

TAA programs through September 30, 2001. It also caps the

amount of money appropriated for any fiscal year from October 1,

1998 to September 30, 2001 at $30,000,000.

Section 402 of the Senate bill requires the Secretary of Labor

to certify as eligible for benefits under the general TAA program

workers in textile and apparel firms who lose their jobs as a result

of either (1) a decrease in the firm’s sales or production; or (2) a

firm’s plant or facility closure or relocation.

Conference agreement

The Senate recedes to the House.

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TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

Present law

Title II of the Trade Act of 1974, as amended, authorizes three

trade adjustment assistance (TAA) programs for the purpose of providing assistance to individual workers and firms that are adversely affected by import competition. Those programs are: the

general TAA program for workers, which provides training and income support for workers adversely affected by import competition;

the TAA program for firms, which provides technical assistance to

qualifying firms; and the North American Free Trade Agreement

Act (NAFTA) transitional adjustment assistance program which

provides training and income support for workers who may be adversely impacted by imports from or production shifts to Canada

and/or Mexico.

House bill

No provision.

Senate amendment

The Trade Adjustment Assistance for Farmers provision would

create a new TAA program for farmers as Chapter 6 of title II of

the Trade Act of 1974. Under this new program, farmers would be

eligible for cash assistance when commodity prices drop by more

than 20 percent below the average for the previous five year period

and imports contributed importantly to this price drop. When a

commodity meets these criteria, individual farmers would be eligible to receive cash assistance equal to half the difference between

the actual national average price for the year and 80 percent of the

average price in the previous five years (the price trigger level),

provided that the farmer’s income had declined from the previous

year. This assistance was capped at $10,000 per farmer. The program is authorized at $100 million annually and is to be administered by the Department of Agriculture.

REPORT ON DEBT RELIEF

Present law

No provision.

House bill

No provision.

Senate amendment

Section 705 of the Senate amendment requires the President

to submit a report to Congress on the President’s recommendations

for: bilateral debt relief for sub-Saharan African countries; new

loan, credit and guarantee programs for these countries; and the

President’s assessment of how debt relief will affect the ability of

each country to participate fully in the international trading system.

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Conference agreement

The Senate recedes to the House. Section 714 of the Senate

bill, expressing Congress’ support for comprehensive debt relief for

the world’s poorest countries, is included in Title I of the conference

agreement.

SENSE OF SENATE REGARDING FAIR ACCESS TO JAPANESE

TELECOMMUNICATIONS FACILITIES AND SERVICES

Present law

No provision.

House bill

No provision.

Senate amendment

Section 709 of the Senate amendment expresses the Sense of

the Senate that the Administration should pursue efforts to open

the Japanese telecommunications market, particularly to internet

services. This provision notes that despite several bilateral agreements with Japan regarding its telecommunications market, the

Senate remains concerned about Japan’s excessive regulation and

anti-competitive activity in the telecommunications sector. The provision urges the Administration to continue to pursue aggressively

further market opening with Japan as part of the multilateral negotiations that were to be launched at the WTO Ministerial in Seattle (November 30–December 3).

Conference agreement

The Senate recedes to the House.

REPORT ON WTO MINISTERIAL

Present law

No provision.

House bill

No provision.

Senate amendment

Section 709 of the Senate amendment expresses the Sense of

Congress on the importance of the new round of international trade

negotiations that was to be launched at the World Trade Organization (WTO) Ministerial Conference in Seattle, Washington from November 30 to December 3, 1999. Subsection (b) requires that the

United States Trade Representative shall submit a report to Congress regarding any discussions on the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade

1994 (the Antidumping Agreement) and the Agreement on Subsidies and Countervailing Measures during the Seattle Ministerial

Conference.

Conference agreement

The Senate recedes to the House.

145

MARKING OF IMPORTED JEWELRY

Present law

Section 304 of the Tariff Act of 1930 (19 U.S.C. § 1304) requires

that all articles of foreign origin imported into the United States

‘‘shall be marked in a conspicuous place as legibly, indelibly and

permanently as the nature of the article (or container) will permit

a manner to indicate to the ultimate purchaser in the United

States the English name of the country of origin of the article.’’ The

provision authorizes several exceptions to this standard including

where ‘‘such article is incapable of being marked’’ and ‘‘such article

cannot be marked prior to shipment to the United States, except

at an expense economically prohibitive of its importation.’’ 19

U.S.C. § 1304(3) (A), (C). Part 134, Customs Regulations (19 C.F.R.

part 134), implements the country of origin marking requirements

and exceptions of 19 U.S.C. 1304.

The Customs Service has not implemented any specific regulation with respect to costume jewelry. In practice, however, the Customs Service has interpreted the statute and its exceptions to permit articles of costume jewelry to be marked with a hang tag, applied tag, or similar labeling where the article is incapable of being

marked in a more permanent manner or where it is economically

prohibitive to indelibly mark the article.

House bill

No provision.

Senate amendment

Section 720 of the Senate bill directs the U.S. Department of

Treasury to implement regulations, consistent with the existing

statutory framework, with respect to the marking of costume jewelry of foreign origin within one year of the date of enactment of

this bill. These regulations are intended to clarify the existing statutory standard and are to be modeled after the Customs Service’s

regulation with respect to Native American jewelry, codified in 19

C.F.R. § 134.43(c).

The U.S. jewelry industry continues to report, however, that

hang tags and labels on imported costume jewelry that are in place

upon entry into the United States often disappear or are removed

prior to the jewelry’s display or sale. When country-of-origin markings do not appear on imported jewelry or other items offered to

the consumer, it constitutes a violation of federal marking law and

prevents purchasers from being informed about the origin of such

products.

Conference agreement

The Senate recedes to the House.

UNREASONABLE ACTS, POLICIES AND PRACTICES

Present law

Sections 301–310 of the Trade Act of 1974 provides authority

to the United States Trade Representative to enforce U.S. rights

under international trade agreements. Section 301(a) authorizes

146

the Trade Representative to take action to enforce such rights if

the Trade Representative determines that an act, policy, or practice

of a foreign country is unreasonable or discriminatory and burdens

or restricts United States commerce. Section 301(d)(3)(B)(i) defines

unreasonable acts, policies, and practices to include acts which

deny fair and equitable market opportunities, including the toleration by a foreign government of systematic anticompetitive activities by enterprises in the foreign country that have the effect of restricting access of U.S. goods or services in that foreign market or

a third country market.

House bill

No provision.

Senate amendment

Section 725 of the Senate amendment adds language to section

301(d)(3)(B)(i) to define unreasonable acts, policies, and practices

which deny fair and equitable market opportunities as including

predatory pricing, discriminatory pricing, or pricing below the cost

of production if such acts, policies or practices are inconsistent with

commercial practices. This provision also deletes the existing reference to systematic anticompetitive activities.

Conference agreement

The House recedes to the Senate.

From the Committee on International Relations, for consideration of the House bill and the Senate amendment,

and modifications committed to conference:

BENJAMIN A. GILMAN,

EDWARD R. ROYCE,

SAM GEJDENSON,

From the Committee on Ways and Means, for consideration of the House bill and the Senate amendment, and

modifications committed to conference:

BILL ARCHER,

PHIL CRANE,

CHARLES B. RANGEL,

As additional conferees, for consideration of the House bill

and the Senate amendment, and modifications committed

to conference:

AMO HOUGHTON,

JOE HOEFFEL,

Managers on the Part of the House.

W.V. ROTH, Jr.,

CHUCK GRASSLEY,

TRENT LOTT,

DANIEL P. MOYNIHAN,

MAX BAUCUS,

JOE BIDEN,

Managers on the Part of the Senate.

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