U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

i

68–271 CC

" ! COMMITTEE PRINT 106TH CONGRESS

2d Session

WMCP:

2000

106–15

SUBCOMMITTEE ON TRADE

OF THE

COMMITTEE ON WAYS AND MEANS

U.S. HOUSE OF REPRESENTATIVES

WRITTEN COMMENTS

ON

H.R. 4782, EXTENDING

UNCONDITIONAL NORMAL TRADE

RELATIONS TO GEORGIA

JULY 11, 2000

Printed for the use of the Committee on Ways and Means by its staff

ii

COMMITTEE ON WAYS AND MEANS

BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois

BILL THOMAS, California

E. CLAY SHAW, JR., Florida

NANCY L. JOHNSON, Connecticut

AMO HOUGHTON, New York

WALLY HERGER, California

JIM MCCRERY, Louisiana

DAVE CAMP, Michigan

JIM RAMSTAD, Minnesota

JIM NUSSLE, Iowa

SAM JOHNSON, Texas

JENNIFER DUNN, Washington

MAC COLLINS, Georgia

ROB PORTMAN, Ohio

PHILIP S. ENGLISH, Pennsylvania

WES WATKINS, Oklahoma

J.D. HAYWORTH, Arizona

JERRY WELLER, Illinois

KENNY HULSHOF, Missouri

SCOTT MCINNIS, Colorado

RON LEWIS, Kentucky

MARK FOLEY, Florida

CHARLES B. RANGEL, New York

FORTNEY PETE STARK, California

ROBERT T. MATSUI, California

WILLIAM J. COYNE, Pennsylvania

SANDER M. LEVIN, Michigan

BENJAMIN L. CARDIN, Maryland

JIM MCDERMOTT, Washington

GERALD D. KLECZKA, Wisconsin

JOHN LEWIS, Georgia

RICHARD E. NEAL, Massachusetts

MICHAEL R. MCNULTY, New York

WILLIAM J. JEFFERSON, Louisiana

JOHN S. TANNER, Tennessee

XAVIER BECERRA, California

KAREN L. THURMAN, Florida

LLOYD DOGGETT, Texas

A.L. SINGLETON, Chief of Staff

JANICE MAYS, Minority Chief Counsel

SUBCOMMITTEE ON TRADE

PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California

E. CLAY SHAW, JR., Florida

AMO HOUGHTON, New York

DAVE CAMP, Michigan

JIM RAMSTAD, Minnesota

JENNIFER DUNN, Washington

WALLY HERGER, California

JIM NUSSLE, Iowa

SANDER M. LEVIN, Michigan

CHARLES B. RANGEL, New York

RICHARD E. NEAL, Massachusetts

MICHAEL R. MCNULTY, New York

WILLIAM J. JEFFERSON, Louisiana

XAVIER BECERRA, California

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records

of the Committee on Ways and Means are also published in electronic form. The printed

record of written comments remains the official version. Because electronic submissions

are used to prepare both printed and electronic versions of the hearing/written comments

record, the process of converting between various electronic formats may introduce unintentional

errors or omissions. Such occurrences are inherent in the current publication process and

should diminish as the process is further refined.

iii

C O N T E N T S

Page

Advisory of June 30, 2000, announcing request for written comments on

H.R. 4782, Extending Unconditional Normal Trade Relations to Georgia ...... 1

H.R. 4782:

Atlantic Council of the United States, Roger Kirk, letter ............................. 3

Distilled Spirits Council of the United States, Mark T. Baker, letter ......... 4

JBC International, James B. Clawson, letter ................................................ 4

Marlowe Wines & Spirits, LLC, Larchmont, NY, Richard Garfinkel, letter ................................................................................................................... 5

NCSJ, Advocates on behalf of Jews in Russia, Ukraine, the Baltic States

and Eurasia, statement ................................................................................ 6

(1)

ADVISORY

FROM THE COMMITTEE ON WAYS AND MEAN

Subcommittee on Trade

FOR IMMEDIATE RELEASE Contact: (202) 225–6649

June 30, 2000

No. TR–22

Crane Announces Request for Written Comments

on H.R. 4782, Extending Unconditional Normal

Trade Relations to Georgia

Congressman Philip M. Crane (R–IL), Chairman, Subcommittee on Trade of the

Committee on Ways and Means, today announced that the Subcommittee is requesting written public comments for the record from all parties interested in H.R. 4782,

a bill to provide for the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of the Republic of Georgia (Georgia).

BACKGROUND:

At present, the trade status of Georgia is subject to the Jackson-Vanik amendment to Title IV of the Trade Act of 1974 (P.L. 93–618), the provision of law governing the extension of NTR to nonmarket economy countries ineligible for such status as of the enactment of the Trade Act. A country subject to this provision may

gain conditional NTR, including NTR tariff treatment, only by complying with the

freedom-of-emigration criteria under the Trade Act and by concluding a bilateral

commercial agreement with the United States providing for reciprocal nondiscriminatory treatment. The extension of NTR is also subject to congressional approval.

The Trade Act authorizes the President to waive the requirements for full compliance of the emigration criteria with respect to a particular country if he determines

that such a waiver will substantially promote the freedom-of-emigration provisions

and if he has received assurance that the emigration practices of the country will

lead substantially to the achievement of those objectives.

On June 1, 1990, the United States concluded a bilateral trade agreement with

the Soviet Union, which was approved by Congress in a joint resolution signed into

law on December 9, 1991 (P.L. 102–197). In Proclamation 6352 of October 9, 1991,

the President proclaimed that this agreement had entered into force and nondiscriminatory treatment would be extended to the products of the Soviet Union.

Subsequently, the Soviet Union was succeeded by 12 independent states including

Georgia.

On May 6, 1992, the President determined that a Jackson-Vanik waiver for Georgia would substantially promote achievement of the freedom-of-emigration criteria

in the statute. This determination was followed on June 3, 1992, by Executive Order

12908, under which the Georgia’s Jackson-Vanik waiver entered into force. NTR

was extended to Georgia effective August 13, 1993, following an exchange of diploVerDate 20-JUL-2000 10:24 Dec 13, 2000 Jkt 060010 PO 00000 Frm 00005 Fmt 6633 Sfmt 6621 K:\HEARINGS\68271.TXT WAYS1 PsN: WAYS1
2

matic notes applying the provisions of the United States-Soviet Union agreement to

Georgia in a new bilateral agreement.

On June 3, 1997, the President determined that Georgia was in full compliance

with the Jackson-Vanik freedom-of-emigration criteria. This determination removed

the need for future waivers to continue NTR, although Georgia’s trade status remains subject to the terms of the Jackson-Vanik amendment.

Pursuant to section 122 of the Uruguay Round Agreements Act (P.L. 103–465),

requiring congressional consultation prior to country accessions to the World Trade

Organization (WTO), the United States Trade Representative transmitted detailed

materials to the Committee on Ways and Means on September 7, 1999, on the pending accession of Georgia to the WTO. Because the United States has not extended

unconditional NTR to Georgia as a result of the application of the Jackson-Vanik

amendment, the United States had to invoke the non-application clause of the WTO

(Article XIII) at the WTO General Council meeting on Georgia’s accession on September 30, 1999, meaning that the United States would not apply the WTO Agreements to Georgia upon that country’s accession to the WTO. Georgia formally became a member of the WTO on June 14, 2000.

On June 29, 2000, Chairman Crane introduced H.R. 4782, authorizing the President to determine that the Jackson-Vanik amendment should no longer apply to the

Republic of Georgia and after making such a determination to proclaim the extension of nondiscriminatory treatment to the products of that country. If the bill were

to become law, the United States would be able to extend unconditional NTR to

Georgia, and all rights and obligations under the WTO agreed to by the two countries would apply. Similar legislation, S. 2141, was introduced in the Senate by Senator Sam Brownback (R–KS) on March 2, 2000.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

Any person or organization wishing to submit a written statement for the printed

record should submit six (6) single-spaced copies of their statement, along with an

IBM compatible 3.5-inch diskette in WordPerfect or MS Word format, with their

name, address, and comments date noted on label, by the close of business, Tuesday,

July 11, 2000, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S.

House of Representatives, 1102 Longworth House Office Building, Washington, D.C.

20515.

FORMATTING REQUIREMENTS:

Each statement presented for printing to the Committee by a witness, any written statement

or exhibit submitted for the printed record or any written comments in response to a request

for written comments must conform to the guidelines listed below. Any statement or exhibit not

in compliance with these guidelines will not be printed, but will be maintained in the Committee

files for review and use by the Committee.

1. All statements and any accompanying exhibits for printing must be submitted on an IBM

compatible 3.5-inch diskette in WordPerfect or MS Word format, typed in single space and may

not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee

will rely on electronic submissions for printing the official hearing record.

2. Copies of whole documents submitted as exhibit material will not be accepted for printing.

Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material

not meeting these specifications will be maintained in the Committee files for review and use

by the Committee.

3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments

by the Committee, must include on his statement or submission a list of all clients, persons,

or organizations on whose behalf the witness appears.

4. A supplemental sheet must accompany each statement listing the name, company, address,

telephone and fax numbers where the witness or the designated representative may be reached.

This supplemental sheet will not be included in the printed record.

The above restrictions and limitations apply only to material being submitted for printing.

Statements and exhibits or supplementary material submitted solely for distribution to the

Members, the press, and the public during the course of a public hearing may be submitted in

other forms.

3

Note: All Committee advisories and news releases are available on the World

Wide Web at ‘‘http://waysandmeans.house.gov’’.

f

July 7, 2000

The Honorable Philip M. Crane

Chairman

Ways and Means Sub-Committee on Trade

1104 Longworth House Office Building

Washington, DC 20515–6354

Dear Mr. Chairman:

Thank you for asking me to submit comments concerning extension of unconditional Normal Trade Relations (NTR) to the Republic of Georgia. While I write in

my personal capacity, I have been Chair of the Atlantic Council’s Balkan Task Force

since its inception in 1996 and a Vice Chair of its Board. I have also participated

actively in the Council’s work on Russia and the Newly Independent States.

I strongly support extension of unconditional NTR to the Republic of Georgia. By

any account, Georgia has long since meet the freedom-of-emigration criteria set

forth in Jackson-Vanik and has long since met other criteria established in the

Trade Act of 1974. Georgia was first determined to have met these criteria in 1992

by Executive Order 12908, leading to the extension of provisional NTR in 1993.

Georgia formally became a member of the World Trade Organization on June 14,

2000. While Georgia still has room for improvement, it has made strong progress

on issues related to the treatment of minorities and the development of democratic

governmental and market economy institutions.

Georgia’s integration into the world economy ranks among important foreign policy interests of the United States in the region. The inability of the United States

to engage Georgia fully due to the limitations established by Jackson-Vanik limits

U.S. policy and influence throughout the region. Officials within the U.S. Department of State strongly support the extension of NTR to Georgia, point to Georgia

as a ‘‘positive example’’ and see Georgia as the best case for NTR in the region.

Extension of nondiscriminatory treatment to Georgia will effectively enhance bilateral relations between Georgia and the United States as well as U.S. relations

with the whole region. Such extension will also allow the United States to take full

advantage of the rights and obligations agreed to under the Uruguay Round Agreements of the WTO so far as they relate to Georgia.

In addition, Georgia’s participation in the WTO will, by increasing interaction

with other nations by Georgian officials and their superiors in government and the

legislature, help Georgia become a fully contributing member of the community of

democratic, market economy nations, something which is of interest to the United

States as well as Georgia.

In short, I urge the Congress to act to extend unconditional NTR to the Republic

of Georgia as this is in the interest of the United States.

Sincerely,

ROGER KIRK

Former Ambassador to Romania

Chair, Balkan Task Force of the

Atlantic Council of the United States

f

4

DISCUS

WASHINGTON, DC 20005

July 10, 2000

The Honorable Philip M. Crane

Chairman

Subcommittee on Trade

Committee on Ways and Means

U.S. House of Representatives

Washington, DC 20515

RE: HR 4782, Extension of Unconditional Normal Trade Relations to the Republic

of Georgia

Dear Mr. Chairman:

On behalf of the Distilled Spirits Council of the United States (DISCUS), I am

writing to express our strong support for the extension of unconditional normal

trade relations (NTR) to the Republic of Georgia. DISCUS is the national trade association representing U.S. producers, marketers, and exporters of distilled spirits

products. On October 15, 1999, DISCUS submitted comments to the Subcommittee

on Trade in support of extending NTR to Georgia and several other ex-Soviet states.

Since that time, Georgia has formally acceded to the World Trade Organization,

making the extension of NTR even more urgent if the United States is to benefit

from Georgia’s participation in the rules-based trading system.

During the negotiation of Georgia’s WTO accession agreement, DISCUS worked

closely with officials from the Office of the U.S. Trade Representative (USTR) to secure improved terms of access to the Georgian market. USTR negotiators succeeded

in striking an agreement with Georgia that would involve a substantial reduction

of tariffs on imported distilled spirits, with a final rate of 1.5 ECU per liter of pure

alcohol. In addition, the accession terms require that Georgia provide the full range

of protection for trademarks and geographical indications, as required by the WTO

Agreement on Trade Related Intellectual Property (TRIPs), immediately upon accession.

The extension of unconditional NTR will create the stable trading environment

necessary to enable U.S. distillers to take full advantage of Georgia’s accession to

the WTO. In the absence of extending NTR to Georgia, U.S. companies will not

enjoy the favorable terms that USTR steadfastly negotiated as part of Georgia’s

WTO accession agreement, and our exporters will be placed at a competitive disadvantage vis-à-vis firms of other WTO members who are prepared to fully

apply the WTO to Georgia.

For these reasons, we strongly support the extension of unconditional normal

trade relations to Georgia.

Sincerely,

MARK T. BAKER

Vice President,

f

International Trade

Mr. A.L. Singleton

Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Building

Washington, DC 20515

Re: Request for Written Comments on H.R. 4782

Dear Mr. Singleton:

This statement is filed on behalf of JBC International (JBC). JBC appreciates the

opportunity to comment on H.R. 4782 to extend normal trade relations treatment

(NTR) to the Republic of Georgia (Georgia). JBC supports H.R. 4782, which will extend unconditional NTR to Georgia and will terminate the application of Title IV

of the Trade Act of 1974 to Georgia.

Introduction

5

JBC International is an international business-consulting firm that provides strategies to expand, increase, and protect the international business of corporations.

JBC provides strategic advice to companies and governments on such international

trade issues as intellectual property rights, customs automation, classification and

valuation issues, and tariff regimes. Our clients are Fortune 500 multinational corporations with offices and manufacturing facilities in more than a hundred countries

worldwide. Members of our firm sit on a number of international trade-related committees and councils and have a decades long involvement with the issues and implications of international trade.

Support for Unconditional NTR with Georgia

JBC supports the granting of unconditional NTR to Georgia for multiple reasons.

First, the passage of this bill will allow the United States to apply the World Trade

Organization (WTO) Agreement to Georgia, including all the accompanying rights

and obligations under the treaty. Such obligations include abiding by the internationally recognized WTO dispute settlement mechanisms. These mechanisms encourage fair trade and enable U.S. companies to compete on a level playing field.

They also foster the rule of law in member countries. In this regard, U.S. companies can look forward to greater intellectual property protection than has been historically provided in the states of the former Soviet Union.

Extending NTR to Georgia will also enable the Georgian economy to benefit from

greater bilateral trade flows with the United States. A growing economy will increase the demand for all goods. In 1999, the number of countries trading with

Georgia increased from 54 to 110. Laws such as H.R. 4782 will help U.S. firms to

maintain their competitiveness in Georgia’s increasingly crowded import market by

continuing to extend the trade preferences that U.S. firms have received for most

of the past decade.

Failure to ratify H.R. 4782 would be mean a retrenchment for U.S. companies

doing business in Georgia. Companies would continue without the rights and protections extended to the United States-Georgia trade by the WTO. Other countries

would move quickly to fill the gap. Total international trade flows for Georgia last

year exceeded $800 million. In 1999, Georgia conducted 40% of its foreign trade with

members of the Commonwealth of Independent States, and 22% with European

Union countries. Without equal access to this market, U.S. firms will steadily lose

ground.

H.R. 4782 provides an effective means of incorporating Georgia into the world

trading system. H.R. 4782 also fosters the rule of law and strengthens the Georgian

economy while providing adequate protections to U.S. companies under WTO Agreements. It is important that the United States continues to encourage the Republic

of Georgia as a fellow member of the global economy and that U.S. firms compete

with their European and Asian counterparts on equal terms in the Georgian market. For these reasons, JBC International supports the enactment of H.R. 4782

Submitted by JBC International.

JAMES B. CLAWSON

f

CEO

MARLOWE WINES & SPIRITS, LLC

LARCHMONT, NEW YORK 10538

July 11, 2000

To: A.L. Singleton, Chief of Staff

Committee on Ways and Means

U.S. House of Representatives

1102 Longworth House Office Bldg.

Washington, D.C. 20515

Re: HR.4782

Dear Sir:

We are pleased to introduce ourselves. Our company has been importing Georgian

wines into the United States for the last three years. We represent Georgian Wines

& Spirits Company, Limited here.

Through my travels in Georgia and business contacts established there I have

come across numerous business opportunities for trade developement. Georgia can

become a supplier to the United States of numerous agricultural products including

canned goods. There is also opportunity for various consumer products to be imVerDate 20-JUL-2000 10:24 Dec 13, 2000 Jkt 060010 PO 00000 Frm 00009 Fmt 6633 Sfmt 6621 K:\HEARINGS\68271.TXT WAYS1 PsN: WAYS1
6

ported here from Georgia. However, without favorable (normal) trade relations between the USA and Georgia, the required investment for production in Georgia is

very difficult to justify. Normal trade relations will facilitate financing for these

projects.

If we can provide any additional information, please contact us.

Sincerely yours,

RICHARD GARFINKEL

f

Marlowe Wine & Spirits

Statement of NCSJ Advocates on behalf of Jews in Russia, Ukraine, the

Baltic States & Eurasia

Introduction

NCSJ appreciates the opportunity to share its written comments with the Committee on the extension of Permanent Normal Trade Relations (‘‘PNTR’’) to the Republic of Georgia. NCSJ represents the organized American Jewish community with

respect to Jewish concerns in the successor states to the former Soviet Union. Since

the enactment of the Jackson-Vanik Amendment in 1974, the U.S. Congress and,

in particular, the House Committee on Ways and Means, Trade Subcommittee has

actively sought to protect the rights of minorities in the countries subject to the

Amendment. We believe it is of continuing importance to the Committee to ensure

that the graduation of Georgia, or any other successor state to the former Soviet

Union, reflect this strong and long-standing commitment to the protection of human

rights.

NCSJ has supported, within the legal framework of the Jackson-Vanik Amendment, Presidential determinations to extend PNTR (i.e. Most-Favored Nation

‘‘MFN’’) to certain former Soviet Republics through the exercise of Presidential waivers and Presidential determinations of compliance with the Amendment. It is not

the position of NCSJ that the terms of Jackson-Vanik should apply in perpetuity

to the former republics of the Soviet Union. However, graduation for any successor

state must be conditioned upon the development of a legal structure that guarantees

internationally recognized human rights for its Jewish citizens, and other such minorities, and in so doing, for all nationals of the country. In the absence of a legal

system incorporating such rights into its legal system, provides little certainty that

its citizens will have the right to emigrate guaranteed in law and administrative

practice.

Terms of Reference

The Jackson-Vanik Amendment in Title IV of the Trade Act of 1974 (P.L. 93–618,

19 U.S.C. 2432) was enacted to ‘‘assure the continued dedication of the United

States to fundamental human rights,’’ and in so doing addressed eliminating barriers to emigration. For all intent and purpose, the application of Jackson-Vanik has

encompassed the observance of internationally recognized human rights including—

but not limited to—the right of emigration. Congress has recognized that JacksonVanik has become an instrument of U.S. policy for assessing certain countries’ observance of basic human rights and the protection of minorities. These principles

are reflected in H.R. 4782.

The recognition of these basic human rights by each of the successor states to the

former Soviet Union is fundamental to the reemergence of Jewish communities and

communal life. Assessing the observance of these rights in the legal and administrative structure is the baseline for determining whether NCSJ can support the extension of unconditional PNTR.

The sole criteria for the extension of PNTR, i.e., graduation of a successor state

from Jackson-Vanik, is whether a successor state has satisfied the human rights

considerations embodied in the Amendment. The accession of a successor state to

the WTO is an insufficient basis for the granting of PNTR. Rather the granting of

PNTR and the conclusion of a bilateral trade agreement should be the consequence

of a successor state adopting and implementing basic human rights, such as the absolute right to emigrate.

The commitment of the U.S. Congress for more than a quarter-century to achieving the objectives envisioned by the Jackson-Vanik Amendment are neither conditioned nor limited by the accession of a successor state to the WTO. In other words,

graduation of any successor state from the terms of Jackson-Vanik must be based

upon an assessment of emigration policies as reflected in law and fact, and, no less

7

importantly, other national policies that affect the status of ethnic and religious minorities, such as the Jewish community. This has been and continues to be the foundation of the Jackson-Vanik Amendment. With rare exception, virtually every Member of Congress has subscribed to this formulation. In joint resolutions, declarations,

letters to officials to the FSU and successor states and in meetings with officials

prior to and following the dissolution of the FSU. In particular, with respect to the

Jewish minority, Congress’ record is unambiguous. Therefore, graduation must be

conditioned upon Congressional consideration of the following standards and conditions:

Unrestricted right of emigration, protection of minority rights, including (legislation to provide protection against incitement to violence against persons or groups

based on various criteria, including religion, e.g.anti-Semitism), and the exercise of

freedom of religion;

The incorporation of human rights standards (including freedom of emigration

and religion) into the country’s constitutional and legal structure, their protection

by the judiciary, and the implementation of administrative practices that do not detract from such rights;

Participation in bilateral and multilateral mechanisms related to the observance

of religious freedom and basic human rights, demonstrating a commitment to these

freedoms and rights.

The government of Georgia has been responsive to concerns of the Jewish community, has accepted and continued its obligations with respect to outstanding issues

of communal property restitution, and has cultivated close relations with the United

States and Israel. The leadership of President Eduard Shevardnadze presents a useful model for other Soviet successor states, but Georgia’s future is not yet guaranteed. Beyond the challenge of developing the next generation of domestic leaders,

instability continues to plague Georgia’s geographic and political life.

Conclusion

NCSJ believes that any legislation to graduate successor states from the JacksonVanik Amendment should acknowledge assurances from the respective governments

regarding freedom of emigration and other human rights. In other words, there

should be an assurance provided to the United States regarding these matters.

NCSJ welcomes the inclusion of language in H.R. 4782 reflecting the commitment

of the United States Congress to advancing the basic rights of minorities in Georgia

and the other Soviet successor states. NCSJ, upon the evaluation of the criteria

identified above has concluded that Georgia has satisfied the criteria for graduation

from the Jackson-Vanik Amendment.

On this basis, NCSJ supports the enactment of H.R. 4782 as introduced.

Æ