II 

109TH CONGRESS 

1ST SESSION S. 191 

To extend certain trade preferences to certain least-developed countries, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 26, 2005 

Mr. SMITH (for himself, Mrs. FEINSTEIN, Mr. BAUCUS, and Mr. SANTORUM) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To extend certain trade preferences to certain least-developed 

countries, and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tariff Relief Assist5 ance for Developing Economies Act of 2005’’ or as the 

6 ‘‘TRADE Act of 2005’’. 

7 SEC. 2. FINDINGS. 

8 Congress finds the following: 

9 (1) It is in the mutual interest of the United 

10 States and the least-developed countries to promote 
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1 stable and sustainable economic growth and develop2 ment. 

3 (2) Trade and investment are powerful eco4 nomic tools and a country may use trade and invest5 ment to reduce poverty and raise the standard of liv6 ing in that country. 

7 (3) A country that is open to trade may in8 crease its economic growth. 

9 (4) Twenty-five percent of the world’s popu10 lation survives on less than one dollar per day. 

11 (5) Unemployment rates in least-developed 

12 countries are extremely high, including unemploy13 ment rates in some countries of up to 70 percent. 

14 (6) Trade and investment often lead to employ15 ment opportunities and often help alleviate poverty. 

16 (7) Least-developed countries have a particular 

17 challenge in meeting the economic requirements and 

18 competitiveness of globalization and international 

19 markets. 

20 (8) The United States has recognized the bene21 fits of trade to least-developed countries by enacting 

22 the Generalized System of Preferences and trade 

23 benefits for developing countries in the Caribbean, 

24 Andean, and sub-Saharan African regions of the 

25 world. 
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1 (9) The challenges of the global trading envi2 ronment for least-developed countries are even great3 er given the end of the Multi-Fiber Arrangement in 

4 2005, and certain least-developed countries, includ5 ing Bangladesh, Cambodia, and Nepal, are particu6 larly vulnerable to the changes that will result from 

7 the end of that Arrangement. 

8 (10) Responding to the needs of least-developed 

9 countries would be consistent with other United 

10 States trade objectives, including encouraging for11 ward progress on the WTO Doha Development 

12 Round. 

13 (11) Enhanced trade with the Muslim least-de14 veloped countries, including Yemen, Afghanistan, 

15 and Bangladesh, is consistent with other United 

16 States objectives of encouraging a strong private 

17 sector and individual economic empowerment in 

18 those countries. 

19 (12) Offering least-developed countries en20 hanced trade preferences will encourage both higher 

21 levels of trade and direct investment in support of 

22 positive economic and political developments 

23 throughout the region and the world. 

24 (13) Encouraging the reciprocal reduction of 

25 trade and investment barriers will enhance the bene-
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1 fits of trade and investment as well as enhance com2 mercial and political ties between the United States 

3 and the beneficiary countries. 

4 (14) Economic opportunity and engagement in 

5 the global trading system together with support for 

6 democratic institutions and a respect for human 

7 rights are mutually-reinforcing objectives and key 

8 elements of a policy to confront and defeat global 

9 terrorism. 

10 (15) A powerful earthquake and tsunami struck 

11 in the Indian Ocean on December 26, 2004. 

12 (16) The destruction caused by the tsunami in 

13 Sri Lanka was devastating and included the loss of 

14 an estimated 30,000 people and physical damage 

15 that will cost an amount equal to 6.5 percent of an16 nual economy of Sri Lanka to repair. 

17 (17) The effects of lost businesses and recon18 struction costs caused by the tsunami damage will 

19 result in a drop in the economic growth of Sri 

20 Lanka. 

21 (18) Senate Resolution 4, 109th Congress, 

22 agreed to January 4, 2005, expressed the support of 

23 the Senate for the long-term commitment and en24 gagement of the United States to provide financial 

25 aid and other forms of direct and indirect assistance 
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1 to the countries and peoples of the region impacted 

2 by the earthquake and the tsunami. 

3 (19) Duty preferences that assist Sri Lanka in 

4 the United States market will help Sri Lanka re5 build and overcome the economic destruction caused 

6 by the tsunami. 

7 SEC. 3. AUTHORITY TO DESIGNATE; ELIGIBILITY REQUIRE8 MENTS. 

9 (a) AUTHORITY TO DESIGNATE.— 

10 (1) In general.—Notwithstanding any other 

11 provision of law, the President is authorized to des12 ignate a TRADE ACT of 2005 country as a bene13 ficiary TRADE Act of 2005 country eligible for ben14 efits described in section 4— 

15 (A) if the President determines that the 

16 country meets the requirements set forth in sec17 tion 104 of the African Growth and Oppor18 tunity Act (19 U.S.C. 3703); and 

19 (B) subject to the authority granted to the 

20 President under subsections (a), (d), and (e) of 

21 section 502 of the Trade Act of 1974 (19 U.S. 

22 C. 2462 (a), (d), and (e)), if the country other23 wise meets the eligibility criteria set forth in 

24 such section 502. 
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1 (2) APPLICATION OF SECTION 104.—Section 

2 104 of the African Growth and Opportunity Act 

3 shall be applied for purposes of paragraph (1) by 

4 substituting ‘‘TRADE Act of 2005 country’’ for 

5 ‘‘sub-Saharan African country’’ each place it ap6 pears. 

7 (b) COUNTRIES ELIGIBLE FOR DESIGNATION.—For 

8 purposes of this Act, the term ‘‘TRADE Act of 2005 coun9 try’’ refers to the following or their successor political enti10 ties: 

11 (1) Afghanistan. 

12 (2) Bangladesh. 

13 (3) Bhutan. 

14 (4) Cambodia. 

15 (5) Kiribati. 

16 (6) Lao People’s Democratic Republic. 

17 (7) Maldives. 

18 (8) Nepal. 

19 (9) Samoa. 

20 (10) Solomon Islands. 

21 (11) Timor-Leste (East Timor). 

22 (12) Tuvalu. 

23 (13) Vanuatu. 

24 (14) Yemen. 
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1 (c) SRI LANKA ECONOMIC EMERGENCY SUPPORT.— 

2 For purposes of this Act, the President may also designate 

3 Sri Lanka as beneficiary TRADE Act of 2005 country eli4 gible for benefits described in section 4. 

5 SEC. 4. TRADE ENHANCEMENT. 

6 (a) BENEFITS DESCRIBED.—The benefits described 

7 in this section are as follows: 

8 (1) PREFERENTIAL TARIFF TREATMENT FOR

9 CERTAIN ARTICLES.— 

10 (A) IN GENERAL.—The President may 

11 provide duty-free treatment for any article de12 scribed in section 503(b)(1) (B) through (G) of 

13 the Trade Act of 1974 (19 U.S.C.2463(b)(1) 

14 (B) through (G)) that is the growth, product, 

15 or manufacture of a beneficiary TRADE Act of 

16 2005 country described, if, after receiving the 

17 advice of the International Trade Commission 

18 in accordance with section 503(e) of the Trade 

19 Act of 1974, the President determines that 

20 such article is not import-sensitive in the con21 text of imports from beneficiary TRADE Act of 

22 2005 countries. 

23 (B) RULES OF ORIGIN.—The duty-free 

24 treatment provided under subparagraph (A) 

25 shall apply to any article described in that para-
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1 graph that meets the requirements of section 

2 503(a)(2) of the Trade Act of 1974, except 

3 that— 

4 (i) if the cost or value of materials 

5 produced in the customs territory of the 

6 United States is included with respect to 

7 that article, an amount not to exceed 15 

8 percent of the appraised value of the arti9 cle at the time it is entered that is attrib10 uted to such United States cost or value 

11 may be applied toward determining the 

12 percentage referred to in subparagraph (A) 

13 of section 503(a)(2) of the Trade Act of 

14 1974; and 

15 (ii) the cost or value of the materials 

16 included with respect to that article that 

17 are produced in one or more beneficiary 

18 TRADE Act of 2005 countries or former 

19 beneficiary TRADE Act of 2005 countries 

20 shall be applied in determining such per21 centage. 

22 (2) TEXTILE AND APPAREL ARTICLES.— 

23 (A) IN GENERAL.—The preferential treat24 ment relating to textile and apparel articles de25 scribed in section 112 (a) and (b) (1) and (2) 
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1 of the African Growth and Opportunity Act (19 

2 U.S.C. 3721 (a) and (b) (1) and (2)) shall 

3 apply to textile and apparel articles imported 

4 directly into the customs territory of the United 

5 States from a beneficiary TRADE Act of 2005 

6 country and such section shall be applied for 

7 purposes of this subparagraph by substituting 

8 ‘‘TRADE Act of 2005 country’’ and ‘‘TRADE 

9 Act of 2005 countries’’ for ‘‘sub-Saharan Afri10 can country’’ and ‘‘sub-Saharan African coun11 tries’’, respectively, each place such terms ap12 pear. 

13 (B) APPAREL ARTICLES ASSEMBLED FROM

14 REGIONAL AND OTHER FABRIC.—In applying 

15 such section 112, apparel articles wholly assem16 bled in one or more beneficiary TRADE Act of 

17 2005 countries or former beneficiary TRADE 

18 Act of 2005 countries, or both, from fabric 

19 wholly formed in one or more beneficiary 

20 TRADE Act of 2005 countries or former bene21 ficiary TRADE Act of 2005 countries, or both, 

22 from yarn originating either in the United 

23 States or one or more beneficiary TRADE Act 

24 of 2005 countries or former beneficiary 

25 TRADE Act of 2005 countries, or both (includ-
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1 ing fabrics not formed from yarns, if such fab2 rics are classifiable under heading 5602 or 

3 5603 of the Harmonized Tariff Schedule of the 

4 United States and are wholly formed and cut in 

5 the United States, one or more beneficiary 

6 TRADE Act of 2005 countries or former bene7 ficiary TRADE Act of 2005 countries, or any 

8 combination thereof), whether or not the ap9 parel articles are also made from any of the 

10 fabrics, fabric components formed, or compo11 nents knit-to-shape described in section 112(b) 

12 (1) or (2) of the African Growth and Oppor13 tunity Act (unless the apparel articles are made 

14 exclusively from any of the fabrics, fabric com15 ponents formed, or components knit-to-shape 

16 described in such section 112(b) (1) or (2) sub17 ject to the following: 

18 (i) LIMITATIONS ON BENEFITS.— 

19 (I) IN GENERAL.—Preferential 

20 treatment under this subparagraph 

21 shall be extended in the 1-year period 

22 beginning January 1, 2005, and in 

23 each of the succeeding 10 1-year peri24 ods, to imports of apparel articles de25 scribed in this subparagraph in an 
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1 amount not to exceed the applicable 

2 percentage of the aggregate square 

3 meter equivalents of all apparel arti4 cles imported into the United States in 

5 the preceding 12-month period for 

6 which data are available. 

7 (II) APPLICABLE PERCENT8 AGE.—For purposes of this clause, the 

9 term ‘‘applicable percentage’’ means 

10 11 percent for the 1-year period be11 ginning January 1, 2005, increased in 

12 each of the 10 succeeding 1-year pe13 riod by equal increments, so that for 

14 the period beginning January 1, 2014, 

15 the applicable percentage does not ex16 ceed 14 percent. 

17 (ii) SPECIAL RULE.— 

18 (I) IN GENERAL.—Subject to 

19 clause (i), preferential treatment de20 scribed in this subparagraph shall be 

21 extended through December 31, 2011, 

22 for apparel articles wholly assembled 

23 in one or more beneficiary TRADE 

24 Act of 2005 countries or former bene25 ficiary TRADE Act of 2005 countries, 
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1 or both, regardless of the country of 

2 origin of the yarn or fabric used to 

3 make such articles. 

4 (II) COUNTRY LIMITATIONS.— 

5 (aa) SMALL SUPPLIERS.—If 

6 during the preceding 1-year pe7 riod beginning on January 1 for 

8 which data are available, imports 

9 from a beneficiary TRADE Act 

10 of 2005 country are less than 1 

11 percent of the aggregate square 

12 meter equivalents of all apparel 

13 articles imported into the United 

14 States during such period, such 

15 imports may increase to an 

16 amount that is equal to not more 

17 than 1.5 percent of the aggregate 

18 square meter equivalents of all 

19 apparel articles imported into the 

20 United States during such pe21 riod. 

22 (bb) OTHER SUPPLIERS.—If 

23 during the preceding 1-year pe24 riod beginning on January 1 for 

25 which data are available, imports 
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1 from a beneficiary TRADE Act 

2 of 2005 country are at least 1 

3 percent of the aggregate square 

4 meter equivalents of all apparel 

5 articles imported into the United 

6 States during such period, such 

7 imports may increase, during 

8 each subsequent 12-month pe9 riod, by an amount that is equal 

10 to not more than one-third of 1 

11 percent of the aggregate square 

12 meter equivalents of all apparel 

13 articles imported into the United 

14 States. 

15 (cc) AGGREGATE COUNTRY

16 LIMIT.—In no case may the ag17 gregate quantity of textile and 

18 apparel articles imported into the 

19 United States under this sub20 paragraph exceed the applicable 

21 percentage set forth in clause (i). 

22 (C) OTHER RESTRICTIONS.—The provi23 sions of section 112(b) (3)(C), (4), (5), (6), and 

24 (7), and (d), and section 113 of the African 

25 Growth and Opportunity Act (19 U.S.3721(b) 
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1 (3)(C), (4), (5), (6), and (7), and (d), and 

2 3722) shall apply with respect to the pref3 erential treatment extended under this Act to a 

4 beneficiary TRADE Act of 2005 country by 

5 substituting ‘‘TRADE Act of 2005 country’’ for 

6 ‘‘sub-Saharan African country’’ and ‘‘TRADE 

7 Act of 2005 countries’’ and ‘‘former TRADE 

8 Act of 2005 countries’’ for ‘‘sub-Saharan Afri9 can countries’’ wherever appropriate. 

10 SEC. 5. REPORTING REQUIREMENT. 

11 The President shall monitor, review, and report to 

12 Congress, not later than 1 year after the date of enact13 ment of this Act, and annually thereafter, on the imple14 mentation of this Act and on the trade and investment 

15 policy of the United States with respect to the TRADE 

16 Act of 2005 countries. 

17 SEC. 6. DEFINITIONS. 

18 In this Act: 

19 (1) BENEFICIARY TRADE ACT OF 2005 COUN20 TRY.—The term ‘‘beneficiary TRADE Act of 2005 

21 country’’ means a country listed in subsection (b) or 

22 (c) of section 3 that the President has determined 

23 is eligible for preferential treatment under this Act. 

24 (2) FORMER TRADE ACT OF 2005 COUNTRY.— 

25 The term ‘‘former TRADE Act of 2005 country’’ 
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1 means a country that, after being designated as a 

2 beneficiary TRADE Act of 2005 country under this 

3 Act, ceased to be designated as such a country by 

4 reason of its entering into a free trade agreement 

5 with the United States. 

6 SEC. 7. TERMINATION OF PREFERENTIAL TREATMENT. 

7 No duty-free treatment or other preferential treat8 ment extended to a beneficiary TRADE Act of 2005 coun9 try under this Act shall remain in effect after December 

10 31, 2014. 

11 SEC. 8. EFFECTIVE DATE. 

12 The provisions of this Act shall take effect on Janu13 ary 1, 2005. 

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