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[House Report 107-176]
[From the U.S. Government Publishing Office]

107th Congress                                            Rept. 107-176
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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

 
        UNITED STATES-JORDAN FREE TRADE AREA IMPLEMENTATION ACT

                                _______
                                

 July 31, 2001.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Thomas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 2603]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Ways and Means, to whom was referred the 
bill (H.R. 2603) to implement the agreement establishing a 
United States-Jordan free trade area, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Introduction.....................................................8
        A.  Purpose and Summary..................................     8
        B.  Background...........................................     8
        C.  Legislative History..................................    10
 II. Explanation of the Bill.........................................11
III. Vote of the Committee...........................................14
 IV. Budget Effects..................................................14
        A. Committee Estimate of Budgetary Effects...............    14
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures.........................................    14
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................    15
  V. Other Matters to be Discussed Under the Rules of the House......16
        A. Committee Oversight Findings and Recommendations......    16
        B. Summary of Findings and Recommendations of the 
            Committee on Government Reform and Oversight.........    17
        C. Constitutional Authority Statement....................    17
 VI. Changes in Existing Law Made by the Bill, as Reported...........17
VII. Additional Views................................................18
VIII.Committee Correspondence........................................25

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``United States-Jordan Free Trade Area 
Implementation Act''.

SEC. 2. PURPOSES.

  The purposes of this Act are--
          (1) to implement the agreement between the United States and 
        Jordan establishing a free trade area;
          (2) to strengthen and develop the economic relations between 
        the United States and Jordan for their mutual benefit; and
          (3) to establish free trade between the 2 nations through the 
        removal of trade barriers.

SEC. 3. DEFINITIONS.

  For purposes of this Act:
          (1) Agreement.--The term ``Agreement'' means the Agreement 
        between the United States of America and the Hashemite Kingdom 
        of Jordan on the Establishment of a Free Trade Area, entered 
        into on October 24, 2000.
          (2) HTS.--The term ``HTS'' means the Harmonized Tariff 
        Schedule of the United States.

             TITLE I--TARIFF MODIFICATIONS; RULES OF ORIGIN

SEC. 101. TARIFF MODIFICATIONS.

  (a) Tariff Modifications Provided for in the Agreement.--The 
President may proclaim--
          (1) such modifications or continuation of any duty,
          (2) such continuation of duty-free or excise treatment, or
          (3) such additional duties,
as the President determines to be necessary or appropriate to carry out 
article 2.1 of the Agreement and the schedule of duty reductions with 
respect to Jordan set out in Annex 2.1 of the Agreement.
  (b) Other Tariff Modifications.--The President may proclaim--
          (1) such modifications or continuation of any duty,
          (2) such continuation of duty-free or excise treatment, or
          (3) such additional duties,
as the President determines to be necessary or appropriate to maintain 
the general level of reciprocal and mutually advantageous concessions 
with respect to Jordan provided for by the Agreement.

SEC. 102. RULES OF ORIGIN.

  (a) In General.--
          (1) Eligible articles.--
                  (A) In general.--The reduction or elimination of any 
                duty imposed on any article by the United States 
                provided for in the Agreement shall apply only if--
                          (i) that article is imported directly from 
                        Jordan into the customs territory of the United 
                        States; and
                          (ii) that article--
                                  (I) is wholly the growth, product, or 
                                manufacture of Jordan; or
                                  (II) is a new or different article of 
                                commerce that has been grown, produced, 
                                or manufactured in Jordan and meets the 
                                requirements of subparagraph (B).
                  (B) Requirements.--
                          (i) General rule.--The requirements of this 
                        subparagraph are that with respect to an 
                        article described in subparagraph (A)(ii)(II), 
                        the sum of--
                                  (I) the cost or value of the 
                                materials produced in Jordan, plus
                                  (II) the direct costs of processing 
                                operations performed in Jordan,
                        is not less than 35 percent of the appraised 
                        value of such article at the time it is 
                        entered.
                          (ii) Materials produced in united states.--If 
                        the cost or value of materials produced in the 
                        customs territory of the United States is 
                        included with respect to an article to which 
                        this paragraph applies, an amount not to exceed 
                        15 percent of the appraised value of the 
                        article at the time it is entered that is 
                        attributable to such United States cost or 
                        value may be applied toward determining the 
                        percentage referred to in clause (i).
          (2) Exclusions.--No article may be considered to meet the 
        requirements of paragraph (1)(A) by virtue of having merely 
        undergone--
                  (A) simple combining or packaging operations; or
                  (B) mere dilution with water or mere dilution with 
                another substance that does not materially alter the 
                characteristics of the article.
  (b) Direct Costs of Processing Operations.--
          (1) In general.--As used in this section, the term ``direct 
        costs of processing operations'' includes, but is not limited 
        to--
                  (A) all actual labor costs involved in the growth, 
                production, manufacture, or assembly of the specific 
                merchandise, including fringe benefits, on-the-job 
                training, and the cost of engineering, supervisory, 
                quality control, and similar personnel; and
                  (B) dies, molds, tooling, and depreciation on 
                machinery and equipment which are allocable to the 
                specific merchandise.
          (2) Excluded costs.--The term ``direct costs of processing 
        operations'' does not include costs which are not directly 
        attributable to the merchandise concerned, or are not costs of 
        manufacturing the product, such as--
                  (A) profit; and
                  (B) general expenses of doing business which are 
                either not allocable to the specific merchandise or are 
                not related to the growth, production, manufacture, or 
                assembly of the merchandise, such as administrative 
                salaries, casualty and liability insurance, 
                advertising, and salesmen's salaries, commissions, or 
                expenses.
  (c) Textile and Apparel Articles.--
          (1) In general.--A textile or apparel article imported 
        directly from Jordan into the customs territory of the United 
        States shall be considered to meet the requirements of 
        paragraph (1)(A) of subsection (a) only if--
                  (A) the article is wholly obtained or produced in 
                Jordan;
                  (B) the article is a yarn, thread, twine, cordage, 
                rope, cable, or braiding, and--
                          (i) the constituent staple fibers are spun in 
                        Jordan, or
                          (ii) the continuous filament is extruded in 
                        Jordan;
                  (C) the article is a fabric, including a fabric 
                classified under chapter 59 of the HTS, and the 
                constituent fibers, filaments, or yarns are woven, 
                knitted, needled, tufted, felted, entangled, or 
                transformed by any other fabric-making process in 
                Jordan; or
                  (D) the article is any other textile or apparel 
                article that is wholly assembled in Jordan from its 
                component pieces.
          (2) Definition.--For purposes of paragraph (1), an article is 
        ``wholly obtained or produced in Jordan'' if it is wholly the 
        growth, product, or manufacture of Jordan.
          (3) Special rules.--
                  (A) Certain made-up articles, textile articles in the 
                piece, and certain other textiles and textile 
                articles.--Notwithstanding paragraph (1)(D) and except 
                as provided in subparagraphs (C) and (D) of this 
                paragraph, subparagraph (A), (B), or (C) of paragraph 
                (1), as appropriate, shall determine whether a good 
                that is classified under one of the following headings 
                or subheadings of the HTS shall be considered to meet 
                the requirements of paragraph (1)(A) of subsection (a): 
                5609, 5807, 5811, 6209.20.50.40, 6213, 6214, 6301, 
                6302, 6304, 6305, 6306, 6307.10, 6307.90, 6308, and 
                9404.90.
                  (B) Certain knit-to-shape textiles and textile 
                articles.--Notwithstanding paragraph (1)(D) and except 
                as provided in subparagraphs (C) and (D) of this 
                paragraph, a textile or apparel article which is knit-
                to-shape in Jordan shall be considered to meet the 
                requirements of paragraph (1)(A) of subsection (a).
                  (C) Certain dyed and printed textiles and textile 
                articles.--Notwithstanding paragraph (1)(D), a good 
                classified under 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 of the HTS, except 
                for a good classified under any such heading as of 
                cotton or of wool or consisting of fiber blends 
                containing 16 percent or more by weight of cotton, 
                shall be considered to meet the requirements of 
                paragraph (1)(A) of subsection (a) if the fabric in the 
                good is both dyed and printed in Jordan, and such 
                dyeing and printing is accompanied by 2 or more of the 
                following finishing operations: bleaching, shrinking, 
                fulling, napping, decating, permanent stiffening, 
                weighting, permanent embossing, or moireing.
                  (D) Fabrics of silk, cotton, manmade fiber or 
                vegetable fiber.-- Notwithstanding paragraph (1)(C), a 
                fabric classified under the HTS as of silk, cotton, 
                man-made fiber, or vegetable fiber shall be considered 
                to meet the requirements of paragraph (1)(A) of 
                subsection (a) if the fabric is both dyed and printed 
                in Jordan, and such dyeing and printing is accompanied 
                by 2 or more of the following finishing operations: 
                bleaching, shrinking, fulling, napping, decating, 
                permanent stiffening, weighting, permanent embossing, 
                or moireing.
          (4) Multicountry rule.--If the origin of a textile or apparel 
        article cannot be determined under paragraph (1) or (3), then 
        that article shall be considered to meet the requirements of 
        paragraph (1)(A) of subsection (a) if--
                  (A) the most important assembly or manufacturing 
                process occurs in Jordan; or
                  (B) if the applicability of paragraph (1)(A) of 
                subsection (a) cannot be determined under subparagraph 
                (A), the last important assembly or manufacturing 
                occurs in Jordan.
  (d) Exclusion.--A good shall not be considered to meet the 
requirements of paragraph (1)(A) of subsection (a) if the good--
          (1) is imported into Jordan, and, at the time of importation, 
        would be classified under heading 0805 of the HTS; and
          (2) is processed in Jordan into a good classified under any 
        of subheadings 2009.11 through 2009.30 of the HTS.
  (e) Regulations.--The Secretary of the Treasury, after consultation 
with the United States Trade Representative, shall prescribe such 
regulations as may be necessary to carry out this section.

                     TITLE II--RELIEF FROM IMPORTS

                     Subtitle A--General Provisions

SEC. 201. DEFINITIONS.

  As used in this title:
          (1) Commission.--The term ``Commission'' means the United 
        States International Trade Commission.
          (2) Jordanian article.--The term ``Jordanian article'' means 
        an article that qualifies for reduction or elimination of a 
        duty under section 102.

     Subtitle B--Relief From Imports Benefiting From The Agreement

SEC. 211. COMMENCING OF ACTION FOR RELIEF.

  (a) Filing of Petition.--
          (1) In general.--A petition requesting action under this 
        subtitle for the purpose of adjusting to the obligations of the 
        United States under the Agreement may be filed with the 
        Commission by an entity, including a trade association, firm, 
        certified or recognized union, or group of workers that is 
        representative of an industry. The Commission shall transmit a 
        copy of any petition filed under this subsection to the United 
        States Trade Representative.
          (2) Provisional relief.--An entity filing a petition under 
        this subsection may request that provisional relief be provided 
        as if the petition had been filed under section 202(a) of the 
        Trade Act of 1974.
          (3) Critical circumstances.--Any allegation that critical 
        circumstances exist shall be included in the petition.
  (b) Investigation and Determination.--
          (1) In general.--Upon the filing of a petition under 
        subsection (a), the Commission, unless subsection (d) applies, 
        shall promptly initiate an investigation to determine whether, 
        as a result of the reduction or elimination of a duty provided 
        for under the Agreement, a Jordanian article is being imported 
        into the United States in such increased quantities, in 
        absolute terms or relative to domestic production, and under 
        such conditions that imports of the Jordanian article alone 
        constitute a substantial cause of serious injury or threat 
        thereof to the domestic industry producing an article that is 
        like, or directly competitive with, the imported article.
          (2) Causation.--For purposes of this subtitle, a Jordanian 
        article is being imported into the United States in increased 
        quantities as a result of the reduction or elimination of a 
        duty provided for under the Agreement if the reduction or 
        elimination is a cause that contributes significantly to the 
        increase in imports. Such cause need not be equal to or greater 
        than any other cause.
  (c) Applicable Provisions.--The following provisions of section 202 
of the Trade Act of 1974 (19 U.S.C. 2252) apply with respect to any 
investigation initiated under subsection (b):
          (1) Paragraphs (1)(B) and (3) of subsection (b).
          (2) Subsection (c).
          (3) Subsection (d).
  (d) Articles Exempt From Investigation.--No investigation may be 
initiated under this section with respect to any Jordanian article if 
import relief has been provided under this subtitle with respect to 
that article.

SEC. 212. COMMISSION ACTION ON PETITION.

  (a) Determination.--By no later than 120 days (180 days if critical 
circumstances have been alleged) after the date on which an 
investigation is initiated under section 211(b) with respect to a 
petition, the Commission shall make the determination required under 
that section.
  (b) Additional Finding and Recommendation if Determination 
Affirmative.--If the determination made by the Commission under 
subsection (a) with respect to imports of an article is affirmative, 
the Commission shall find, and recommend to the President in the report 
required under subsection (c), the amount of import relief that is 
necessary to remedy or prevent the injury found by the Commission in 
the determination and to facilitate the efforts of the domestic 
industry to make a positive adjustment to import competition. The 
import relief recommended by the Commission under this subsection shall 
be limited to that described in section 213(c).
  (c) Report to President.--No later than the date that is 30 days 
after the date on which a determination is made under subsection (a) 
with respect to an investigation, the Commission shall submit to the 
President a report that shall include--
          (1) a statement of the basis for the determination;
          (2) dissenting and separate views; and
          (3) any finding made under subsection (b) regarding import 
        relief.
  (d) Public Notice.--Upon submitting a report to the President under 
subsection (c), the Commission shall promptly make public such report 
(with the exception of information which the Commission determines to 
be confidential) and shall cause a summary thereof to be published in 
the Federal Register.
  (e) Applicable Provisions.--For purposes of this subtitle, the 
provisions of paragraphs (1), (2), and (3) of section 330(d) of the 
Tariff Act of 1930 (19 U.S.C. 1330(d)) shall be applied with respect to 
determinations and findings made under this section as if such 
determinations and findings were made under section 202 of the Trade 
Act of 1974 (19 U.S.C. 2252).

SEC. 213. PROVISION OF RELIEF.

  (a) In General.--No later than the date that is 30 days after the 
date on which the President receives the report of the Commission 
containing an affirmative determination of the Commission under section 
212(a), the President shall provide relief from imports of the article 
that is the subject of such determination to the extent that the 
President determines necessary to prevent or remedy the injury found by 
the Commission and to facilitate the efforts of the domestic industry 
to make a positive adjustment to import competition, unless the 
President determines that the provision of such relief is not in the 
national economic interest of the United States or, in extraordinary 
circumstances, that the provision of such relief would cause serious 
harm to the national security of the United States.
  (b) National Economic Interest.--The President may determine under 
subsection (a) that providing import relief is not in the national 
economic interest of the United States only if the President finds that 
taking such action would have an adverse impact on the United States 
economy clearly greater than the benefits of taking such action.
  (c) Nature of Relief.--The import relief (including provisional 
relief) that the President is authorized to provide under this subtitle 
with respect to imports of an article is--
          (1) the suspension of any further reduction provided for 
        under the United States Schedule to Annex 2.1 of the Agreement 
        in the duty imposed on that article;
          (2) an increase in the rate of duty imposed on such article 
        to a level that does not exceed the lesser of--
                  (A) the column 1 general rate of duty imposed under 
                the HTS on like articles at the time the import relief 
                is provided; or
                  (B) the column 1 general rate of duty imposed under 
                the HTS on like articles on the day before the date on 
                which the Agreement enters into force; or
          (3) in the case of a duty applied on a seasonal basis to that 
        article, an increase in the rate of duty imposed on the article 
        to a level that does not exceed the column 1 general rate of 
        duty imposed under the HTS on the article for the corresponding 
        season occurring immediately before the date on which the 
        Agreement enters into force.
  (d) Period of Relief.--The import relief that the President is 
authorized to provide under this section may not exceed 4 years.
  (e) Rate After Termination of Import Relief.--When import relief 
under this subtitle is terminated with respect to an article--
          (1) the rate of duty on that article after such termination 
        and on or before December 31 of the year in which termination 
        occurs shall be the rate that, according to the United States 
        Schedule to Annex 2.1 of the Agreement for the staged 
        elimination of the tariff, would have been in effect 1 year 
        after the initiation of the import relief action under section 
        211; and
          (2) the tariff treatment for that article after December 31 
        of the year in which termination occurs shall be, at the 
        discretion of the President, either--
                  (A) the rate of duty conforming to the applicable 
                rate set out in the United States Schedule to Annex 
                2.1; or
                  (B) the rate of duty resulting from the elimination 
                of the tariff in equal annual stages ending on the date 
                set out in the United States Schedule to Annex 2.1 for 
                the elimination of the tariff.

SEC. 214. TERMINATION OF RELIEF AUTHORITY.

  (a) General Rule.--Except as provided in subsection (b), no import 
relief may be provided under this subtitle after the date that is 15 
years after the date on which the Agreement enters into force.
  (b) Exception.--Import relief may be provided under this subtitle in 
the case of a Jordanian article after the date on which such relief 
would, but for this subsection, terminate under subsection (a), but 
only if the Government of Jordan consents to such provision.

SEC. 215. COMPENSATION AUTHORITY.

  For purposes of section 123 of the Trade Act of 1974 (19 U.S.C. 
2133), any import relief provided by the President under section 213 
shall be treated as action taken under chapter 1 of title II of such 
Act.

SEC. 216. SUBMISSION OF PETITIONS.

  A petition for import relief may be submitted to the Commission 
under--
          (1) this subtitle;
          (2) chapter 1 of title II of the Trade Act of 1974; or
          (3) under both this subtitle and such chapter 1 at the same 
        time, in which case the Commission shall consider such 
        petitions jointly.

       Subtitle C--Cases Under Title II Of The Trade Act of 1974

SEC. 221. FINDINGS AND ACTION ON JORDANIAN IMPORTS.

  (a) Effect of Imports.--If, in any investigation initiated under 
chapter 1 of title II of the Trade Act of 1974, the Commission makes an 
affirmative determination (or a determination which the President may 
treat as an affirmative determination under such chapter by reason of 
section 330(d) of the Tariff Act of 1930), the Commission shall also 
find (and report to the President at the time such injury determination 
is submitted to the President) whether imports of the article from 
Jordan are a substantial cause of serious injury or threat thereof.
  (b) Presidential Action Regarding Jordanian Imports.--In determining 
the nature and extent of action to be taken under chapter 1 of title II 
of the Trade Act of 1974, the President shall determine whether imports 
from Jordan are a substantial cause of the serious injury found by the 
Commission and, if such determination is in the negative, may exclude 
from such action imports from Jordan.

SEC. 222. TECHNICAL AMENDMENT.

  Section 202(a)(8) of the Trade Act of 1974 (19 U.S.C. 2252(a)(8)) is 
amended in the first sentence--
          (1) by striking ``and part 1'' and inserting ``, part 1''; 
        and
          (2) by inserting before the period at the end ``, and title 
        II of the United States-Jordan Free Trade Area Implementation 
        Act''.

                       TITLE III--TEMPORARY ENTRY

SEC. 301. NONIMMIGRANT TRADERS AND INVESTORS.

  Upon the basis of reciprocity secured by the Agreement, an alien who 
is a national of Jordan (and any spouse or child (as defined in section 
101(b)(1) of the Immigration and Nationality Act (8 U.S.C. 1101(b)(1)) 
of the alien, if accompanying or following to join the alien) shall be 
considered as entitled to enter the United States under and in 
pursuance of the provisions of the Agreement as a nonimmigrant 
described in section 101(a)(15)(E) of the Immigration and Nationality 
Act (8 U.S.C. 1101(a)(15)(E)), if the entry is solely for a purpose 
described in clause (i) or (ii) of such section and the alien is 
otherwise admissible to the United States as such a nonimmigrant.

                      TITLE IV--GENERAL PROVISIONS

SEC. 401. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE LAW.

  (a) Relationship of Agreement to United States Law.--
          (1) United states law to prevail in conflict.--No provision 
        of the Agreement, nor the application of any such provision to 
        any person or circumstance, that is inconsistent with any law 
        of the United States shall have effect.
          (2) Construction.--Nothing in this Act shall be construed--
                  (A) to amend or modify any law of the United States, 
                or
                  (B) to limit any authority conferred under any law of 
                the United States,
        unless specifically provided for in this Act.
  (b) Relationship of Agreement to State Law.--
          (1) Legal challenge.--No State law, or the application 
        thereof, may be declared invalid as to any person or 
        circumstance on the ground that the provision or application is 
        inconsistent with the Agreement, except in an action brought by 
        the United States for the purpose of declaring such law or 
        application invalid.
          (2) Definition of state law.--For purposes of this 
        subsection, the term ``State law'' includes--
                  (A) any law of a political subdivision of a State; 
                and
                  (B) any State law regulating or taxing the business 
                of insurance.
  (c) Effect of Agreement With Respect to Private Remedies.--No person 
other than the United States--
          (1) shall have any cause of action or defense under the 
        Agreement; or
          (2) may challenge, in any action brought under any provision 
        of law, any action or inaction by any department, agency, or 
        other instrumentality of the United States, any State, or any 
        political subdivision of a State on the ground that such action 
        or inaction is inconsistent with the Agreement.

SEC. 402. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for each fiscal year after 
fiscal year 2001 to the Department of Commerce not more than $100,000 
for the payment of the United States share of the expenses incurred in 
dispute settlement proceedings under article 17 of the Agreement.

SEC. 403. IMPLEMENTING REGULATIONS.

  After the date of enactment of this Act--
          (1) the President may proclaim such actions, and
          (2) other appropriate officers of the United States may issue 
        such regulations,
as may be necessary to ensure that any provision of this Act, or 
amendment made by this Act, that takes effect on the date the Agreement 
enters into force is appropriately implemented on such date, but no 
such proclamation or regulation may have an effective date earlier than 
the date the Agreement enters into force.

SEC. 404. EFFECTIVE DATES; EFFECT OF TERMINATION.

  (a) Effective Dates.--Except as provided in subsection (b), the 
provisions of this Act and the amendments made by this Act take effect 
on the date the Agreement enters into force.
  (b) Exceptions.--Sections 1 through 3 and this title take effect on 
the date of the enactment of this Act.
  (c) Termination of the Agreement.--On the date on which the Agreement 
ceases to be in force, the provisions of this Act (other than this 
subsection) and the amendments made by this Act, shall cease to be 
effective.

                            I. INTRODUCTION

                         A. Purpose and Summary

    H.R. 2603 would implement the agreement establishing a free 
trade area between the United States and the Hashemite Kingdom 
of Jordan.

                             B. Background

    The United States-Jordan Free Trade Agreement (FTA), signed 
on October 24, 2000, is the first FTA with an Arab nation and 
is the culmination of many years of increasing U.S.-Jordanian 
economic integration. The agreement also reflects Jordan's 
commitment to the Middle East peace process, as evidenced by 
its participation in the 1994 Washington Declaration, which 
terminated the state of belligerency between Jordan and Israel.
    Enhancing United State-Jordanian economic integration will 
strengthen our bilateral relations, express the United States' 
appreciation for Jordan's role in the Middle East peace process 
and in cooperating in international counter-terrorism 
activities, promote economic growth in the Middle East, improve 
the region's stability and security, and help Jordan's efforts 
to promote economic reform and liberalization. It also signals 
to Jordan's neighbors in the Middle East the benefits to 
maintaining peace.
    On July 23, 2001, United States Trade Representative Robert 
Zoellick and Jordanian Ambassador Marwan Muasher, exchanged 
formal and official letters which discussed the implementation 
of the agreement's dispute settlement procedures. In the 
letters, both countries state their intention not to apply the 
agreement's dispute settlement enforcement procedures in a 
manner that results in blocking trade. The letters also state 
that bilateral consultations and other procedures (i.e., 
alternative mechanisms) would be appropriate measures that will 
help secure compliance without recourse to traditional trade 
sanctions.
    It is this significant exchange of letters that lays the 
ground work for moving forward legislation implementing the 
agreement.

Current U.S.-Jordan tariff treatment under GSP

    In 1975, President Gerald Ford designated Jordan as a 
beneficiary of duty-free treatment on eligible imports under 
the U.S. Generalized System of Preferences (GSP). GSP duty-free 
imports from Jordan totaled $10.3 million in 2000, or about 14 
percent of U.S. imports from Jordan.

Qualifying industrial zones

    In 1996, the Congress took a major step to widening trade 
with Jordan when it passed H.R. 3074, West Bank and Gaza Strip 
Free Trade Benefits (P.L. 104-234). This legislation, inter 
alia, expanded the scope of the U.S.-Israel Free Trade 
Agreement as it extended duty-free treatment to products from 
qualifying industrial zones (QIZs) between Israel and Jordan 
and between Israel and Egypt. QIZs are designed to further 
Arab-Israeli economic and social cooperation by providing duty-
free access to the U.S. market for goods produced with certain 
levels of Israeli, Jordanian, Egyptian, or Palestinian content. 
Since 1996, the U.S. Trade Representative has designated ten 
QIZs in Jordan. The first Jordanian QIZ, established in 1998, 
has grown from 1,800 employees and eight firms to more than 
7,000 employees and 50 firms.
    Progress continued in 1997, when the United States and 
Jordan signed a bilateral investment treaty. This event was a 
reflection of Jordan's efforts to transform its economy, 
including streamlining its investment and customs procedures, 
creating tax and investment incentives, and reducing tariffs. A 
follow-up Trade and Investment Framework was signed between the 
two countries in 1999.

Jordan's accession to the WTO

    Another significant step toward an FTA occurred in April 
2000, when, after four years of negotiations, Jordan acceded to 
the World Trade Organization (WTO). To become a WTO member, 
Jordan had to make numerous difficult changes to its trade 
regime. Jordan's accession activities included implementing in 
its laws all obligations related to WTO Agreements, i.e., 
Trade-Related Aspects of Intellectual Property Rights (TRIPs), 
Customs Valuation, Import Licensing Procedures, Technical 
Barriers to Trade (TBT), and Sanitary and Phytosanitary 
Measures (SPS).
    Jordan also committed to eliminating agricultural and 
industrial export subsidies, and agreed to zero or very low 
tariffs on all chemical products under the Chemical 
Harmonization Program. For agricultural tariffs, Jordan agreed 
to limit most agricultural tariff peaks to 30 to 35 percent, to 
bind or reduce tariff rates on U.S. agricultural priorities to 
15 percent or lower, and to join the zero-duty initiative on 
oilseeds and oilseed products. In the industrial sector, 
Jordan's tariff bindings ranged from zero to twenty percent. 
The services section of Jordan's accession protocol is very 
comprehensive, including financial, telecommunications, and 
professional services. Since Jordan requested a limited 
transition period, most of Jordan's commitments were fully 
implemented upon Jordan's accession.

United States-Jordan Free Trade Agreement

    Negotiations for a United States-Jordan FTA began in June 
2000 and were concluded on October 24, 2000, when U.S. Trade 
Representative Charlene Barshefsky and Jordanian Deputy Prime 
Minister Mohammed Halaiqah signed the agreement. President 
Clinton transmitted the agreement to the Congress on January 6, 
2001 (H. Doc. 107-15). The Jordanian parliament ratified the 
agreement in May 2001. The agreement is comprehensive, 
including:
    --A ten-year transitional period to phase out almost all 
duties, leading to near-duty-free trade between the United 
States and Jordan.
    --Rights and obligations for the protection of intellectual 
property that complement and exceed those available under the 
WTO Agreement on Trade-Related Aspects of Intellectual Property 
Rights, such as the requirement that each country set its 
statutory maximum fines for infringements high enough to deter 
potential infringers.
    --A first-ever bilateral commitment regarding e-commerce. 
Both countries have agreed to seek to refrain from imposing 
customs duties on electronic transmissions, or instituting 
unnecessary barriers to market access for digitized products or 
for services delivered electronically. The e-commerce 
commitment is linked to the FTA's services commitments, which 
together should stimulate investment in new technologies and 
networks.
    --Specific commitments to opening markets in the services 
sector, including business, communications, construction and 
engineering, distribution, education, environment, finance, 
health, tourism, recreation, and transportation.
    --Commitments by both countries to enforce their current 
environmental and labor laws, and affirms the commitment by 
both countries to the International Labor Organization's core 
labor standards.
    The agreement does not include an investment chapter, since 
those issues were addressed in the 1997 Bilateral Investment 
Treaty.
    Finally, as noted above, an official exchange of letters 
between the governments clarifies their intent not to resort to 
the use of trade sanctions to enforce the agreement.

                         C. Legislative History

Committee action

    The Subcommittee on Trade met with His Majesty King 
Abdullah II of Jordan on June 6, 2000, to discuss bilateral 
relations, Jordan's accession to the WTO, and the potential 
free trade agreement then under consideration by the President. 
On April 4, 2001, the King met with the Full Committee to 
discuss implementation of the recently concluded free trade 
agreement.
    On January 6, 2001, President Clinton transmitted the 
United States-Jordan Free Trade Agreement and a related 
legislative proposal to the Congress.
    On April 14, 2001, Mr. Levin, et al., introduced H.R. 1484, 
to implement the U.S.-Jordan Free Trade Agreement. The bill was 
referred to the Committee on Ways and Means and no further 
action was taken.
    H.R. 2603, the United States-Jordan Free Trade Area 
Implementation Act, was introduced on July 24, 2001, by 
Representative Thomas and was referred to the Committee on Ways 
and Means and the Committee on the Judiciary.

Legislative hearing

    None.

                      II. EXPLANATION OF THE BILL

             Title I--Tariff Modifications; Rules of Origin

                   SECTION 101. TARIFF MODIFICATIONS

Present law

    No provision.

Explanation of the provision

    Section 101 authorizes the President to proclaim the duty 
reductions set out in the U.S. tariff schedule annexed to the 
Agreement. The text of section 101 is based on section 4 of the 
United States-Israel Free Trade Area Implementation Act (19 
U.S.C. 2112 note).
    Section 101 empowers the President to: (1) modify or 
continue any duty; (2) keep in place duty-free or excise 
treatment; or (3) impose any additional duties, that the 
President determines to be necessary to carry out the duty 
reductions called for under the Agreement. Section 101 also 
authorizes the President to maintain the general level of 
reciprocal and mutually advantageous concessions with respect 
to Jordan provided for by the Agreement.

Reasons for the provision

    The provision implements the duty reduction commitments 
made in the United States-Jordan Free Trade Agreement.

                      SECTION 102. RULES OF ORIGIN

Present law

    No provision.

Explanation of the provision

    Section 102 codifies the rules of origin set out in Annex 
2.2 of the agreement. The language of this section is modeled 
after section 402 of the Trade and Tariff Act of 1984 (19 
U.S.C. 2112 note), which establishes origin rules for goods 
imported from Israel under the United States-Israel Free Trade 
Agreement.
    However, in addition, section 102 prescribes specific 
origin rules for textile and apparel products, consistent with 
those set out in paragraph 9 of Annex 2.2 of the Agreement, and 
in section 334 of P.L. 103-465, the Uruguay Round Agreements 
Act (the so-called ``Breaux-Cardin'' rule.) For apparel 
products, this rule means that the place of assembly will 
generally determine origin of the product. A textile product 
will be considered to originate where the fabric is knit or 
woven.

Reasons for the provision

    The provision implements the commitments made in the United 
States-Jordan Free Trade Agreement with respect to rules of 
origin applying to imports from Jordan.

                     Title II--Relief From Imports

Present law

    No provision.

Explanation of the provision

    The bilateral safeguard provisions established in Article 
10 of the Agreement are closely modeled on those included in 
the NAFTA and embodied in U.S. law through sections 301-307 of 
the North American Free Trade Agreement Implementation Act 
(``NAFTA Act'') (19 U.S.C. 3351-3357). Sections 201-207 of the 
proposed FTA implementing bill are based on the NAFTA 
legislation, with minor variations to reflect the specific 
provisions of Article 10. The standards and procedures 
established in the proposed legislation parallel those of both 
the NAFTA Act and sections 201-204 of the Trade Act of 1974 (19 
U.S.C. 2251-2254), which establish procedures for global 
safeguards investigations and import relief under U.S. law. In 
particular, the President may decide not to provide relief 
under section 213 of the proposed FTA implementing bill if he 
determines that such action is not in the national economic 
interest or would harm U.S. national security. The Committee 
expects that the President would take into account all of the 
factors set forth in Section 203(a)(2) of the Trade Act of 1974 
in reaching this determination.
    In brief, sections 201-207 authorize the President, after 
an investigation and affirmative determination by the U.S. 
International Trade Commission (``Commission'') to impose 
specified import relief when, as a result of the reduction or 
elimination of a duty under the Agreement, a Jordanian-origin 
product is being imported into the United States in such 
increased quantities and under such conditions as to be a 
substantial cause of serious injury or threat of serious injury 
to the domestic industry.
    When the President imposes global safeguards relief under 
chapter 1 of title II of the Trade Act of 1974, section 208 
authorizes the President to exclude imports from Jordan if he 
determines that those imports are not a substantial cause of 
the serious injury, or threat of serious injury (as determined 
by the Commission).

Reasons for the provision

    The provision implements the safeguards portion of the 
United States-Jordan Free Trade Agreement to ensure that 
industries in the United States that may be experiencing a 
surge in import competition from Jordan have access to a 
safeguard procedure that would offer a temporary period of 
relief from the increased imports.

                       Title III--Temporary Entry

            SECTION 301. NONIMMIGRANT TRADERS AND INVESTORS

Present law

    No provision.

Explanation of the provision

    Section 301, in the jurisdiction of the Committee on the 
Judiciary, makes Jordanian nationals eligible for temporary 
entry into the United States as traders and investors. This 
section implements the agreement's visa provisions, as set out 
in Article 8 of the FTA. The trade and investor category 
provides for admission under requirements identical to those 
governing admission under the Immigration and Nationality Act 
(8 U.S.C. 1101 et seq.), which permits entry to undertake 
substantial trade in goods or services and to develop and 
direct investment operations.

Reasons for the provision

    The provision implements the temporary entry portion of the 
United States-Jordan Free Trade Agreement.

                      Title IV--General Provisions

 SECTION 401. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE 
                                  LAW

Present law

    No provision.

Explanation of the provision

    Section 401 establishes the relationship between the 
agreement and U.S. law, as well as state law. With respect to 
Federal law, section 401(a) makes clear that no provision of 
the agreement will be given effect if it is inconsistent with 
Federal law. Section 401(b) sets forth that no state law may be 
declared invalid on the grounds that it conflicts with 
agreement, except in an action brought by the United States for 
such purpose. Section 401(c) states that no private remedy is 
created by the entry into force of the agreement.

Reasons for the provision

    The provision addresses the issue of the operation of the 
agreement relative to Federal and state law, as well as private 
remedies. Section 401 is necessary to make clear that no 
provision of the agreement will be given effect if it is 
inconsistent with Federal law and that entry into force of the 
agreement creates no new private remedy.

              SECTION 402. AUTHORIZATION OF APPROPRIATIONS

Present law

    No provision.

Explanation of the provision

    Section 402 authorizes appropriations to the Department of 
Commerce of the lesser of (1) $100,000 or (2) such sums as may 
be necessary for the payment of the U.S. share of expenses 
incurred in dispute settlement proceedings provided for in 
Article 17 of the Agreement. Any Administration funding 
requests for these functions will be made in accordance with 
established budget formulation procedures and may be less than 
$100,000.

Reasons for the provision

    The provision authorizes adequate funding for U.S. 
participation in the agreement's disputes settlement process.

                SECTION 403. IMPLEMENTATION REGULATIONS

Present law

    No provision.

Explanation of the provision

    Section 403 grants the President proclamation and 
regulatory authority in order to implement this legislation.

Reasons for the provision

    Section 403 gives the President the necessary proclamation 
and regulatory authority to carry out the agreement. No 
proclamation or regulation may take effect before the Agreement 
enters into force.

     SECTION 404. EFFECTIVE DATES AND TERMINATION OF THE AGREEMENT

Present law

    No provision.

Explanation of the provision

    Under sections 404(a)-(b), the legislation takes effect 
when the Agreement enters into force. Section 404(c) provides 
that the implementing bill will no longer apply if the 
Agreement is terminated.

Reasons for the provision

    The provision establishes an effective date for the 
legislation.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on Ways and Means in its 
consideration of the bill H.R. 2603.

                       MOTION TO REPORT THE BILL

    H.R. 2603 was ordered favorably reported, with an amendment 
in the nature of a substitute, by voice vote, with a quorum 
present.

                           IV. BUDGET EFFECTS

               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d)(2) of the rule XIII of the 
Rules of the House of Representatives, the following statement 
is made concerning the effects on the budget of this 
resolution, House Joint Resolution 50 as reported: The 
Committee agrees with the estimate prepared by the 
Congressional Budget Office (CBO) which is included below.

    B. Statement Regarding New Budget Authority and Tax Expenditures

    In compliance with subdivision 3(c)(2) of rule XIII of the 
Rules of the House of Representatives, the Committee states 
that the provisions of H.R. 2603 would reduce customs duty 
receipts due to lower tariffs imposed on goods from Jordan.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the Congressional Budget Office, the following 
report prepared by CBO is provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 30, 2001.
Hon. William ``Bill'' M. Thomas,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2603, a bill to 
implement the agreement establishing a United States-Jordan 
Free Trade Area.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Erin 
Whitaker.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 2603--A bill to implement the agreement establishing a United 
        States-Jordan Free Trade Area

    Summary: H.R. 2603 would approve the agreement between the 
government of the United States and the government of the 
Hashemite Kingdom of Jordan that was entered into on October 
24, 2000. It would provide for tariff reductions and other 
changes in law related to implementation of the agreement, such 
as provisions dealing with dispute settlement and intellectual 
property rights protection. The Congressional Budget Office 
estimates that enacting the bill would reduce revenues by $2 
million in 2002, by $15 million over the 2002-2006 period, and 
by $44 million over the 2002-2011 period. Because enacting H.R. 
2603 would affect receipts, pay-as-you-go procedures would 
apply. CBO has determined that H.R. 2603 contains no private-
sector or intergovernmental mandates as defined in the Unfunded 
Mandates Reform Act (UMRA) and would not affect the budgets of 
state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 2603 is shown in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                               -------------------------------------------------
                                                                  2002      2003      2004      2005      2006
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES

Estimated revenues............................................        -2        -3        -3        -4        -4
----------------------------------------------------------------------------------------------------------------

Basis of estimate

            Revenues
    Under the United States-Jordan agreement, all tariffs on 
U.S. imports from Jordan would be phased out for individual 
products at varying rates according to one of nine different 
timetables ranging from immediate elimination to partial 
elimination over 10 years. One schedule would allow goods to 
enter at current rates of duty until year ten of the agreement, 
at which time such goods would enter duty-free. Based on Census 
Bureau data on imports from Jordan, CBO estimates that the 
reduction of tariff rates would reduce revenues by about $15 
million over the 2002-2006 period, net of income and payroll 
tax offsets. This estimate includes the effects of increased 
imports from Jordan that would result from the reduced prices 
of imported products in the United States--reflecting the lower 
tariff rates--and has been estimated based on the expected 
substitution between U.S. products and imports from Jordan. In 
addition, it is likely that some of the increase in U.S. 
imports from Jordan would displace imports from other 
countries. In the absence of specific data on the extent of 
this substitution effect, CBO assumes that an amount equal to 
one-half of the increase in U.S. imports from Jordan will 
displace imports from other countries.
            Spending subject to appropriation
    H.R. 2603 would authorize the appropriation of $100,000 for 
the Department of Commerce to pay the United States' share of 
the costs of the dispute settlement procedures established by 
the agreement. CBO estimates that implementing this provision 
would cost $100,000, subject to the availability of 
appropriated funds.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up procedures for 
legislation affecting receipts or direct spending. The net 
changes in governmental receipts that aresubject to pay-as-you-
go procedures are shown in the following table. For the purposes of 
enforcing pay-as-you-go procedures, only the effects in the current 
year, the budget year, and the succeeding four years are counted.

----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                      2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2011
----------------------------------------------------------------------------------------------------------------
Changes in receipts................      0     -2     -2     -3     -4     -4     -5     -5     -5     -6     -9
Changes in outlays.................                                 Not applicable
----------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal revenues: Erin Whitaker; 
Federal costs: Ken Johnson; impact on State, local, and tribal 
governments: Scott Marsters; impact on the private sector: 
Lauren Marks.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis; Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee, based upon information from the Administration, 
concluded that it is appropriate and timely to enact the 
provision in the bill as reported.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the performance goals and 
objectives of the part of this legislation that authorizes 
funding are for the payment of the U.S. share of the expenses 
incurred in dispute settlement proceedings established under 
article 17 of the U.S.-Jordan Free Trade Agreement.

                 C. Constitutional Authority Statement

    With respect to clause 3(d)(1) of rule XIII of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article I of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States * * * '').

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

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                  SECTION 202 OF THE TRADE ACT OF 1974

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

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                         VII. ADDITIONAL VIEWS

    The U.S.-Jordan free trade agreement represents an historic 
document in several respects. First, the agreement makes Jordan 
one of only four countries with whom the United States has 
signed a free trade agreement. Second, the agreement reinforces 
the strong strategic relationship between our countries. Third, 
it reflects the significant progress Jordan has made, as a 
relatively new member of the World Trade Organization (WTO), 
toward bringing its laws and practices into compliance with WTO 
rules in key areas like intellectual property rights and 
services. Fourth, the agreement is noteworthy because the core 
text of the document includes obligations on labor standards 
and the environment. Jordan and the United States have agreed 
that they will not fail to effectively enforce their labor and 
environmental laws in a manner affecting trade. Because the 
laws of Jordan and the United States provide high labor 
standards and environmental protections, this is a meaningful 
commitment. Importantly, the U.S.-Jordan free trade agreement 
accords the labor and environmental provisions equal status to 
all other provisions in the agreement, including with regard to 
dispute settlement and enforcement. Because of its historic 
diplomatic and commercial nature, and because it recognizes the 
concrete links between trade and labor market issues and trade 
and the environment, we support the approval of legislation 
implementing the U.S.-Jordan free trade agreement.
    Although we support passage of the implementing 
legislation, we are disturbed by the precedent set by the 
exchange of letters between the United States Trade 
Representative and the Jordanian Ambassador to the United 
States stating that the two countries do not ``expect or 
intend'' to secure compliance to the provisions in the 
agreement using ``traditional trade sanctions.'' These letters 
do not change the text of the trade agreement and do not 
represent binding commitments under the agreement. However, the 
exchange of letters is troubling for two reasons. First, it 
suggests that the Administration questions the appropriateness 
of trade sanctions as a tool to enforce obligations in trade 
agreements. Trade sanctions have been a traditional tool 
available to secure compliance with obligations in trade 
agreements. We believe it is important that American businesses 
that depend on trade sanctions as an enforcement mechanism to 
protect their intellectual property rights and access to 
foreign markets continue to have the ability to enforce those 
rights using the method that has proven most effective in 
enforcing past trade agreements. Second, the exchange of 
letters suggests that the Administration believes that labor 
and environmental provisions in trade agreements should be 
given second-tier status. Because nearly all the provisions in 
the U.S.-Jordan free trade agreement, except those regarding 
labor and the environment, are currently enforceable within the 
WTO, the Administration's action essentially establishes a two-
tiered system of enforcement--providing for more effective 
enforcement of some provisions, such as those on intellectual 
property, market access, and services, than for those regarding 
labor and the environment. We believe that it is inappropriate 
to deny to provisions related to labor market issues and the 
environment the same dispute resolution processes and remedies 
as provided to provisions regarding other trade issues.

                                   Charles B. Rangel.
                                   Jerry Kleczka.
                                   Michael R. McNulty.
                                   Lloyd Doggett.
                                   Xavier Becerra.
                                   Wm. J. Jefferson.
                                   Earl Pomeroy.
                                   Sander Levin.
                                   Robert T. Matsui.
                                   Richard E. Neal.
                                   Karen L. Thurman.
                                   Jim McDermott.
                                   John Lewis.

                            ADDITIONAL VIEWS

    Committee Democrats just received the draft report and 
requested a change to the sentence that reads: ``It is this 
significant exchange of letters that lays the ground work for 
moving forward legislation implementing the agreement.'' The 
change was not accepted by the Majority. In the view of 
Democrats, the pursuit of this exchange and the exchange itself 
delayed moving forward on legislation implementing this 
important agreement with a vital friend and ally of the United 
States.

                                   Charles B. Rangel.
                                   Sander Levin.

                            ADDITIONAL VIEWS

    This agreement cements a relationship with an important 
ally, encourages international peace efforts, and represents an 
important step forward in addressing environmental and labor 
issues that arise in the course of expanding international 
commerce. This Administration and its allies here in the House 
are fearful of coping with these important considerations 
concerning the environment and working conditions.
    The President, Ambassador Zoellick, and others have made a 
habit recently of condemning as ``isolationist'' those of us 
concerned with the sometime adverse impact of trade on the 
environment--no matter how many trade agreements we may have 
supported in the past. An Administration that this very week 
stands alone and isolated from 178 nations in working to 
resolve the threat of climate change and global warming, an 
Administration that this week stands isolated in rejecting 
seven years of negotiations for a draft protocol to enforce and 
strengthen the 30-year ban on germ warfare, an Administration 
that has announced its intention to unilaterally renounce the 
Anti-Ballistic Missile (ABM) Treaty that has contributed to 
three decades of peace, this is, indeed, an Administration that 
certainly understands what it really means to be 
``isolationist.'' In view of its own misadventures, it is 
little wonder this Administration applies the term 
``isolationist'' so liberally toward those who question its 
outmoded trade policy.
    Without diminishing the truly historic nature of this 
agreement, it should be noted that it was negotiated with a 
trade partner that has a quite small economy and a quite modest 
effect upon our economy. The level of environmental 
consequences stemming from this agreement is wholly different 
from that caused by other agreements, where the trading partner 
involves a country geographically larger, with a higher level 
of trade with the U.S., or even with a greater amount of 
vulnerable natural resources. Nor is this a trade agreement 
with many trade partners like the proposed Free Trade Area of 
the Americas. And because of these factors, many questions were 
not asked concerning Jordan that must be asked and dealt with 
in future trade negotiations.
    This agreement focuses on the countries' enforcement of 
existing environmental and labor laws. In countries with weak 
or no laws, this would not suffice.
    Of particular importance, issues regarding the investor-
state dispute resolution process similar to those raised by 
Chapter 11 of the North American Free Trade Agreement were not 
negotiated here. The basic principle that foreign investors 
should not be accorded more rights than Americans should be 
given particular attention in future trade agreements. Neither 
does the Jordan agreement require consideration of whether 
these and other disputes should be resolved in a manner 
consistent with our democratic guarantees of public notice and 
open hearings, submissions and rulings.
    Much of the environmental and labor language does not 
establish binding obligations. The parties are, for example, 
committed only to ``strive to ensure'' that their domestic 
environmental and labor laws will not be relaxed. The 
``enforcement'' language is weak, e.g.: ``A party shall not 
fail to effectively enforce related laws, through a sustained 
or recurring course of action or inaction, in a manner 
affecting trade between the Parties. * * *''
    The environmental review process for this Agreement 
pursuant to President Clinton's Executive Order and the 
Guidelines implementing it that were published last year were 
also lacking in a number of respects. The Jordan review was 
limited in scope, utilizing a basic econometric assessment of 
domestic environmental impacts rather than a full, robust 
analysis reviewing global impacts. Further, the review did not 
assess the environmental dimensions of commercial or trade 
policies, and how those policies could be improved. Other 
missed opportunities, in particular, include any new 
commitments to protect the coral reefs in the Gulf of Aqaba 
from environmental harm.
    Hence, the Jordan agreement represents a step in the right 
direction, but it should not be mistaken for the successful 
culmination of the journey to establish meaningful and 
enforceable standards on the environment and working conditions 
as essential components in new trade agreements. That this 
Administration and its allies are so fearful of environmental 
and labor provisions as modest as those contained in this 
Jordan agreement, that they delayed for months submitting this 
agreement and, until now, have questioned whether it was in the 
national interest, is further evidence of the danger of pending 
proposals to grant President Bush open-ended, blank check, 
``fast track'' trade negotiating authority.

                                   Lloyd Doggett.
                                   Robert T. Matsui.
                                   Jim McDermott.
                                   John Lewis.
                                   Karen L. Thurman.

                 ADDITIONAL VIEWS OF HON. KENNY HULSHOF

    To retain our preeminent place in the world, it is 
imperative that the United States remain a global force for 
trade liberalization. Ninety-six percent of the world's 
consumers live outside our borders. A policy that expands 
access to markets abroad is an integral part of any strategy to 
strengthen our domestic economy.
    I applaud the Bush Administration's efforts to secure Trade 
Promotion Authority (TPA) for the President. America's workers 
and farmers are the most efficient and innovative in the world. 
Given the opportunity to compete on a level playing field, our 
nation will prosper. Denying the President TPA puts American 
jobs at risk. Our international competitors are moving forward 
with market access agreements while the United States remains 
on the sidelines. Denying the President TPA is short-sighted. 
It puts us at a competitive disadvantage. Just as I voted to 
give extend TPA to President Clinton, I support giving 
President Bush this negotiating authority.
    I am troubled, however, by proposals to include items 
unrelated to trade such as labor and environment standards in 
the base text of trade agreements. In particular, I am wary of 
the manner in which the Clinton Administration chose to address 
these issues in the U.S.-Jordan bilateral trade agreement. Our 
Chief Executive has a host of tools at his disposal to address 
international labor and environment standards. I fear that the 
U.S.-Jordan agreement negotiated by the previous administration 
sets a troubling standard that could infringe on American 
sovereignty and have the impact of actually curtailing our 
access to foreign markets.
    The exchange of letters between U.S. Trade Representative 
Robert Zoellick and Ambassador Marwan Muasher of Jordan 
partially allays my concerns. The two letters dated July 23 
state the desire of both Jordan and the U.S. to avoid dispute 
resolution actions that result in blocking trade. This 
acknowledgment is a positive development. That being said, I am 
still troubled by the base text of the U.S.-Jordan bilateral 
trade agreement. The way this agreement deals with labor and 
environment standards is not constructive for future trade 
agreements or TPA legislation pending before Congress.
    It is important to recognize the important role Jordan 
plays in the Middle East. Jordan's King Abdullah has played a 
helpful role in promoting peace and stability in the region. 
Jordan's accession to the World Trade Organization and 
increased economic ties to the United States will help promote 
a closer relationship between our two nations and foster 
political and economic stability in the Middle East. This is 
clearly a positive policy objective.
    Thus, it is with reservations that I support passage of 
H.R. 2603. The exchange of letters between the American and 
Jordanian governments combined with the strategic importance of 
Jordan to our long-term foreign policy objectives in the Middle 
East provide unique circumstances that allow me to support the 
bill before the committee. But let me reiterate what I have 
said earlier. The manner in which labor and environment 
standards are addressed in the base text of the U.S.-Jordan 
bilateral trade agreement should not be considered precedent 
for trade legislation considered by this committee in the 
future.

                                                     Kenny Hulshof.

                     VIII. COMMITTEE CORRESPONDENCE

                          House of Representatives,
                                Committee on the Judiciary,
                                     Washington, DC, July 30, 2001.
Hon. William M. Thomas,
Chairman, House Committee on Ways and Means, Longworth HOB, House of 
        Representatives, Washington, DC.
    Dear Bill: Thank you for working with me regarding H.R. 
1484, the ``United States-Jordan Free Trade Areas 
Implementation Act,'' which was referred to the Committee on 
Ways and Means and the Committee on the Judiciary. As you know, 
the Committee on the Judiciary has a jurisdictional interest in 
this legislation, and I appreciate your acknowledgment of that 
jurisdictional interest. Because I understand the desire to 
have this legislation considered expeditiously by the House and 
because the Committee does not have a substantive concern with 
those provisions that fall within its jurisdiction, I do not 
intend to hold a hearing or markup on this legislation.
    In agreeing to waive consideration by our Committee, I 
would expect you to agree that this procedural route should not 
be construed to prejudice the Committee on the Judiciary's 
jurisdictional interest and prerogatives on this or any similar 
legislation and will not be considered as precedent for 
consideration of matters of jurisdictional interest to my 
Committee in the future. The Committee on the Judiciary takes 
this action with the understanding that the Committee's 
jurisdiction over the provisions within the Committee's 
jurisdiction is in no way diminished or altered, and that the 
Committee's right to the appointment of conferees during any 
conference on the bill is preserved. I would also expect your 
support in my request to the Speaker for the appointment of 
conferees from my Committee with respect to matters within the 
jurisdiction of my Committee should a conference with the 
Senate be convened on this or similar legislation.
    Again, thank you for your cooperation on this important 
matter. I would appreciate your including our exchange of 
letters in your Committee's report to accompany H.R. 1484.
            Sincerely,
                               F. James Sensenbrenner, Jr.,
                                                          Chairman.
                                ------                                

                          House of Representatives,
                               Committee on Ways and Means,
                                     Washington, DC, July 30, 2001.
Hon. F. James Sensenbrenner, Jr.,
Chairman, Committee on the Judiciary, House of Representatives, Rayburn 
        House Office Building, Washington, DC.
    Dear Jim: Thank you for your letter regarding H.R. 2603, 
the ``United States-Jordan Free Trade Area Implementation Act 
of 2001.''
    As you have noted, the Committee on Ways and Means ordered 
favorably reported, H.R. 2603, ``United States-Jordan Free 
Trade Area Implementation Act of 2001,'' on Thursday, July 26, 
2001. I appreciate your agreement to expedite the passage of 
this legislation despite containing provisions within your 
Committee's jurisdiction. I acknowledge your decision to forego 
further action on the bill was based on the understanding that 
it will not prejudice the Committee on the Judiciary with 
respect to its jurisdictional prerogatives or the appointment 
of conferees on this or similar legislation.
    Finally, I will include in the Congressional Record a copy 
of our exchange of letters on this matter. Thank you for your 
assistance and cooperation. We look forward to working with you 
in the future.
            Best regards,
                                               Bill Thomas,
                                                          Chairman.

                                  
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