II

103D CONGRESS

1ST SESSION S. 1155

To ensure that the Caribbean Basin Initiative is not adversely affected by

the implementation of the North American Free Trade Agreement and

to apply ‘‘fast track’’ approval procedures to free trade agreements

entered into between the United States and certain Caribbean Basin

countries.

IN THE SENATE OF THE UNITED STATES

JUNE 24 (legislative day, JUNE 22), 1993

Mr. GRAHAM (for himself, Mr. DURENBERGER, and Mr. MACK) introduced the

following bill; which was read twice and referred to the Committee on Finance

A BILL

To ensure that the Caribbean Basin Initiative is not adversely affected by the implementation of the North

American Free Trade Agreement and to apply ‘‘fast

track’’ approval procedures to free trade agreements entered into between the United States and certain Caribbean Basin countries.

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 ‘‘Caribbean Basin Free

5 Trade Agreements Act’’.
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1 SEC. 2. CONGRESSIONAL FINDINGS.

2 The Congress finds that the continuation and

3 strengthening of the commitment of the United States, as

4 expressed by the enactment of the Caribbean Basin Eco5 nomic Recovery Act and the Caribbean Basin Economic

6 Recovery Expansion Act of 1990, to the successful devel7 opment of the Caribbean region requires the enactment

8 of provisions—

9 (1) to encourage the continuation of structural

10 reform efforts by Caribbean countries toward market

11 economies and trade liberalization;

12 (2) to preserve existing economic advantages

13 under the Caribbean Basin Initiative program and

14 avoid the potential diversion of investment from ben15 eficiary countries under the program to Mexico as a

16 result of the North American Free Trade Agree17 ment;

18 (3) to maintain and increase trade benefits

19 under the Caribbean Basin Initiative program in

20 order to promote further economic development and

21 political stability in beneficiary countries and to ex22 pand United States export opportunities in the Car23 ibbean region; and

24 (4) to encourage and create further economic

25 integration in the Western Hemisphere through free

26 trade arrangements that provide United States busi-
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1 ness and labor reciprocal benefits through the re2 moval of barriers to trade and investment in goods

3 and services on a mutually advantageous basis.

4 TITLE I—RELATIONSHIP OF

5 NAFTA IMPLEMENTATION TO

6 THE OPERATION OF THE CAR7 IBBEAN BASIN INITIATIVE

8 SEC. 101. TEMPORARY PROVISIONS TO PROVIDE NAFTA

9 PARITY TO BENEFICIARY COUNTRY ECONO10 MIES.

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

12 Caribbean Basin Economic Recovery Act (19 U.S.C.

13 2703(b)) is amended to read as follows:

14 ‘‘(b) IMPORT-SENSITIVE ARTICLES.—

15 ‘‘(1) IN GENERAL.—Subject to paragraphs (2)

16 through (5), the duty-free treatment provided under

17 this title does not apply to—

18 ‘‘(A) textile and apparel articles which are

19 subject to textile agreements;

20 ‘‘(B) footwear not designated at the time

21 of the effective date of this title as eligible arti22 cles for the purpose of the generalized system

23 of preferences under title V of the Trade Act of

24 1974;
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1 ‘‘(C) tuna, prepared or preserved in any

2 manner, in airtight containers;

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

4 from petroleum, provided for in headings 2709

5 and 2710 of the Harmonized Tariff Schedule of

6 the United States;

7 ‘‘(E) watches and watch parts (including

8 cases, bracelets and straps), of whatever type

9 including, but not limited to, mechanical, quartz

10 digital or quartz analog, if such watches or

11 watch parts contain any material which is the

12 product of any country with respect to which

13 HTS column 2 rates of duty apply; or

14 ‘‘(F) articles to which reduced rates of

15 duty apply under subsection (h).

16 ‘‘(2) NAFTA TRANSITION PERIOD TREATMENT

17 OF CERTAIN TEXTILE AND APPAREL ARTICLES.—

18 ‘‘(A) EQUIVALENT TARIFF AND QUOTA

19 TREATMENT.—During the transition period—

20 ‘‘(i) the tariff treatment accorded at

21 any time to any textile or apparel article

22 that originates in the territory of a bene23 ficiary country shall be identical to the tar24 iff treatment that is accorded during such

25 time under section 2 of the Annex to a like
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1 article that originates in the territory of

2 Mexico and is imported into the United

3 States;

4 ‘‘(ii) duty-free treatment under this

5 title shall apply to any textile or apparel

6 article of a beneficiary country that is im7 ported into the United States and that—

8 ‘‘(I) meets the same require9 ments (other than assembly in Mex10 ico) as those specified in Appendix 2.4

11 of the Annex (relating to goods as12 sembled from fabric wholly formed

13 and cut in the United States) for the

14 duty free entry of a like article assem15 bled in Mexico; or

16 ‘‘(II) is identified under subpara17 graph (C) as a handloomed, hand18 made, or folklore article of such coun19 try and is certified as such by the

20 competent authority of such country;

21 and

22 ‘‘(iii) no quantitative restriction or

23 consultation level may be applied to the

24 importation into the United States of any

25 textile or apparel article that—
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1 ‘‘(I) originates in the territory of

2 a beneficiary country,

3 ‘‘(II) meets the same require4 ments (other than assembly in Mex5 ico) as those specified in Appendix

6 3.1.B.10 of the Annex (relating to

7 goods assembled from fabric wholly

8 formed and cut in the United States)

9 for the exemption of a like article as10 sembled in Mexico from United States

11 quantitative restrictions and consulta12 tion levels, or

13 ‘‘(III) qualifies for duty-free

14 treatment under clause (ii)(II).

15 ‘‘(B) NAFTA TRANSITION PERIOD TREAT16 MENT OF NONORIGINATING TEXTILE AND AP17 PAREL ARTICLES.—

18 ‘‘(i) PREFERENTIAL TARIFF TREAT19 MENT.—Subject to clause (ii), the United

20 States Trade Representative may place in

21 effect at any time during the transition pe22 riod with respect to any textile or apparel

23 article that—

24 ‘‘(I) is a product of a beneficiary

25 country; but
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1 ‘‘(II) does not qualify as a good

2 that originates in the territory of that

3 country;

4 tariff treatment that is identical to the

5 preferential tariff treatment that is ac6 corded during such time under Appendix

7 6.B of the Annex to a like article that is

8 a product of Mexico and imported into the

9 United States.

10 ‘‘(ii) PRIOR CONSULTATION.—The

11 United States Trade Representative may

12 implement the preferential tariff treatment

13 described in clause (i) only after consulta14 tion with representatives of the United

15 States textile and apparel industry and

16 other interested parties regarding—

17 ‘‘(I) the specific articles to which

18 such treatment will be extended,

19 ‘‘(II) the annual quantity levels

20 to be applied under such treatment

21 and any adjustment to such levels,

22 ‘‘(III) the allocation of such an23 nual quantities among the beneficiary

24 countries that export the articles con25 cerned to the United States, and
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1 ‘‘(IV) any other applicable provi2 sion.

3 ‘‘(iii) ADJUSTMENT OF CERTAIN BI4 LATERAL TEXTILE AGREEMENTS.—The

5 United States Trade Representative shall

6 undertake negotiations for purposes of

7 seeking appropriate reductions in the

8 quantities of textile and apparel articles

9 that are permitted to be imported into the

10 United States under bilateral agreements

11 with beneficiary countries in order to re12 flect the quantities of textile and apparel

13 articles of each respective country that are

14 exempt from quota treatment by reason of

15 paragraph (2)(A)(iii).

16 ‘‘(C) HANDLOOMED, HANDMADE, AND

17 FOLKLORE ARTICLES.—For purposes of sub18 paragraph (A), the United States Trade Rep19 resentative shall consult with representatives of

20 the beneficiary country for the purpose of iden21 tifying particular textile and apparel goods that

22 are mutually agreed upon as being handloomed,

23 handmade, or folklore goods of a kind described

24 in section 2.3(a), (b), or (c) or Appendix

25 3.1.B.11 of the Annex.
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1 ‘‘(D) BILATERAL EMERGENCY ACTIONS.—

2 The President may take—

3 ‘‘(i) bilateral emergency tariff actions

4 of a kind described in section 4 of the

5 Annex with respect to any textile or ap6 parel article imported from a beneficiary

7 country if the application of tariff treat8 ment under subparagraph (A) to such arti9 cle results in conditions that would be

10 cause for the taking of such actions under

11 such section 4 with respect to a like article

12 that is a product of Mexico; or

13 ‘‘(ii) bilateral emergency quantitative

14 restriction actions of a kind described in

15 section 5 of the Annex with respect to im16 ports of any textile or apparel article de17 scribed in subparagraph (B)(i)(I) and (II)

18 if the importation of such article into the

19 United States results in conditions that

20 would be cause for the taking of such ac21 tions under such section 5 with respect to

22 a like article that is a product of Mexico.

23 ‘‘(3) NAFTA TRANSITION PERIOD TREATMENT

24 OF CERTAIN OTHER ARTICLES ORIGINATING IN BEN25 EFICIARY COUNTRIES.—
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1 ‘‘(A) EQUIVALENT TARIFF TREATMENT.—

2 ‘‘(i) IN GENERAL.—Subject to clause

3 (ii), the tariff treatment accorded at any

4 time during the transition period to any

5 article referred to in any of subparagraphs

6 (B) through (F) of paragraph (1) that

7 originates in the territory of a beneficiary

8 country shall be identical to the tariff

9 treatment that is accorded during such

10 time under Annex 302.2 of the NAFTA to

11 a like article that originates in the terri12 tory of Mexico and is imported into the

13 United States. Such articles shall be sub14 ject to the provisions for emergency action

15 under chapter 8 of part two of the NAFTA

16 to the same extent as if such articles were

17 imported from Mexico.

18 ‘‘(ii) EXCEPTION.—Clause (i) does not

19 apply to any article accorded duty-free

20 treatment under U.S. Note 2(b) to sub21 chapter II of chapter 98 of the Har22 monized Tariff Schedule of the United

23 States.

24 ‘‘(B) RELATIONSHIP TO SUBSECTION (h)

25 DUTY REDUCTIONS.—If at any time during the
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1 transition period the rate of duty that would

2 (but for action taken under subparagraph (A)(i)

3 in regard to such period) apply with respect to

4 any article under subsection (h) is a rate of

5 duty that is lower than the rate of duty result6 ing from such action, then such lower rate of

7 duty shall be applied for the purposes of imple8 menting such action.

9 ‘‘(4) CUSTOMS PROCEDURES.—The provisions

10 of chapter 5 of part two of the NAFTA regarding

11 customs procedures apply to importations under

12 paragraphs (2) and (3) of articles from beneficiary

13 countries.

14 ‘‘(5) DEFINITIONS.—As used in this sub15 section—

16 ‘‘(A) The term ‘the Annex’ means Annex

17 300–B of the NAFTA.

18 ‘‘(B) The term ‘NAFTA’ means the North

19 American Free Trade Agreement entered into

20 between the United States, Mexico, and Canada

21 on December 17, 1992.

22 ‘‘(C) The term ‘textile or apparel article’

23 means any article referred to in paragraph

24 (1)(A) that is a good listed in Appendix 1.1 of

25 the Annex.
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1 ‘‘(D) The term ‘transition period’ means,

2 with respect to a beneficiary country, the period

3 that begins on the date that the NAFTA enters

4 into force with respect to the United States,

5 and ends on the earlier of—

6 ‘‘(i) the date that is the 3rd anniver7 sary of the date on which the NAFTA en8 ters into force; or

9 ‘‘(ii) the date on which—

10 ‘‘(I) there enters into force with

11 respect to the United States a trade

12 agreement entered into under the au13 thority of section 202(a) of the Carib14 bean Basin Free Trade Agreements

15 Act and to which the beneficiary coun16 try is a party, or

17 ‘‘(II) the beneficiary country ac18 cedes to the NAFTA.

19 ‘‘(E) An article shall be treated as having

20 originated in the territory of a beneficiary coun21 try if the article meets the rules of origin for

22 a good set forth in chapter 4 of part two of the

23 NAFTA or in Appendix 6.A of the Annex. In

24 applying such chapter 4 or Appendix 6.A with

25 respect to a beneficiary country for purposes of
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1 this subsection, no countries other than the

2 United States and beneficiary countries may be

3 treated as being Parties to the NAFTA.’’.

4 (b) CONFORMING AMENDMENTS.—The Caribbean

5 Basin Economic Recovery Act is further amended—

6 (1) by amending section 212(e)(1)(B) to read

7 as follows:

8 ‘‘(B) withdraw, suspend, or limit the appli9 cation of the duty-free treatment under this

10 subtitle, and the tariff and preferential tariff

11 treatment under section 213(b)(2) and (3), to

12 any article of any country,’’; and

13 (2) by inserting ‘‘and except as provided in sec14 tion 213(b)(2) and (3),’’ after ‘‘Tax Reform Act of

15 1986,’’ in section 213(a)(1).

16 TITLE II—CARIBBEAN BASIN

17 FREE TRADE AGREEMENTS

18 SEC. 201. TRADE AGREEMENT FEASIBILITY AND OBJEC19 TIVES.

20 As soon as practicable, the United States Trade Rep21 resentative shall determine the desirability and feasibility

22 of, and a likely timetable for, any country that is a bene23 ficiary country for purposes of the Caribbean Basin Eco24 nomic Recovery Act, or a group of such beneficiary coun25 tries, either—
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1 (1) acceding to—

2 (A) the North American Free Trade

3 Agreement pursuant to Article 2204 of such

4 Agreement, and

5 (B) as appropriate, supplemental agree6 ments pertaining to environmental, labor, and

7 import issues; or

8 (2) entering into comprehensive bilateral or

9 multilateral agreements with the United States that

10 contain provisions that—

11 (A) are comparable to the provisions of the

12 North American Free Trade Agreement and, as

13 appropriate, to the provisions of supplemental

14 agreements pertaining to environmental, labor,

15 and import issues, and

16 (B) will achieve the applicable purposes,

17 policies, and objectives set forth in section

18 212(b) and (c) of the Caribbean Basin Eco19 nomic Recovery Act and section 1101 of the

20 Omnibus Trade and Competitiveness Act of

21 1988.

22 The United States Trade Representative shall consult with

23 the Committee on Ways and Means of the House of Rep24 resentatives and the Committee on Finance of the Senate

25 regarding the determinations made under this section.
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1 SEC. 202. TRADE AGREEMENT NEGOTIATING AUTHORITY.

2 (a) IN GENERAL.—

3 (1) EFFECTIVE PERIOD OF AUTHORITY.—Be4 fore June 1, 1996, the President may enter into

5 trade agreements with one or more beneficiary coun6 tries under the Caribbean Basin Economic Recovery

7 Act providing for the elimination or reduction of any

8 duty imposed by the United States and for the re9 duction or elimination of barriers to, or other distor10 tions of, the international trade of the beneficiary

11 countries or the United States, if each such agree12 ment would comply with section 201(2).

13 (2) LIMITATION.—Notwithstanding any other

14 provision of law, no trade benefit shall be extended

15 to any country by reason of the extension of any

16 trade benefit to another country under a trade

17 agreement entered into under paragraph (1) with

18 such other country.

19 (b) CONSULTATION WITH CONGRESS BEFORE

20 AGREEMENTS ENTERED INTO.—

21 (1) Before the President enters into any trade

22 agreement under subsection (a), the President shall

23 consult with—

24 (A) the Committee on Ways and Means of

25 the House of Representatives and the Commit26 tee on Finance of the Senate; and
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1 (B) each other committee of the House

2 and the Senate, and each joint committee of the

3 Congress, which has jurisdiction over legislation

4 involving subject matters which would be af5 fected by the trade agreement.

6 (2) The consultation under paragraph (1) shall

7 include—

8 (A) the nature of the agreement;

9 (B) how and to what extent the agreement

10 will achieve the applicable purposes, policies,

11 and objectives of this title; and

12 (C) all matters relating to the implementa13 tion of the agreement under section 203.

14 (3) If it is proposed to implement two or more

15 trade agreements in a single implementing bill under

16 section 203(a), the consultation under paragraph (1)

17 shall include the desirability and feasibility of such

18 proposed implementation.

19 SEC. 203. IMPLEMENTATION OF TRADE AGREEMENTS.

20 (a) IN GENERAL.—

21 (1) REQUIREMENTS FOR ENTERING INTO

22 FORCE.—Any agreement entered into under section

23 202(a) shall enter into force with respect to the

24 United States if (and only if)—
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1 (A) the President, at least 90 calendar

2 days before the day on which he enters into the

3 trade agreement, notifies the House of Rep4 resentatives and the Senate of his intention to

5 enter into the agreement, and promptly there6 after publishes notice of such intention in the

7 Federal Register;

8 (B) after entering into the agreement, the

9 President submits a document to the House of

10 Representatives and to the Senate containing a

11 copy of the final legal text of the agreement, to12 gether with—

13 (i) a draft of an implementing bill,

14 (ii) a statement of any administrative

15 action proposed to implement the trade

16 agreement, and

17 (iii) the supporting information de18 scribed in paragraph (2); and

19 (C) the implementing bill is enacted into

20 law.

21 (2) SUPPORTING INFORMATION.—The support22 ing information required under paragraph (1)(B)(iii)

23 consists of—
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1 (A) an explanation as to how the imple2 menting bill and proposed administrative action

3 will change or affect existing law; and

4 (B) a statement—

5 (i) asserting that the agreement

6 makes progress in achieving the agreement

7 requirements set forth in section 201(2)

8 (A) and (B), and

9 (ii) setting forth the reasons of the

10 President regarding—

11 (I) how and to what extent the

12 agreement makes progress in achiev13 ing the agreement requirements set

14 forth in section 201(2) (A) or (B),

15 and why and to what extent the

16 agreement does not achieve other ap17 plicable purposes, policies, and objec18 tives,

19 (II) how the agreement serves

20 the interests of United States com21 merce, and

22 (III) why the implementing bill

23 and proposed administrative action is

24 required or appropriate to carry out

25 the agreement.
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1 (3) APPLICATION.—To ensure that a foreign

2 country which receives benefits under a trade agree3 ment entered into under section 202(a) is subject to

4 the obligations imposed by such agreement, the

5 President shall recommend to Congress in the imple6 menting bill and statement of administrative action

7 submitted with respect to such agreement that the

8 benefits and obligations of such agreement apply

9 solely to the parties to such agreement, if such ap10 plication is consistent with the terms of such agree11 ment. The President may also recommend with re12 spect to any such agreement that the benefits and

13 obligations of such agreement not apply uniformly to

14 all parties to such agreement, if such application is

15 consistent with the terms of such agreement.

16 (b) APPLICATION OF CONGRESSIONAL ‘‘FAST

17 TRACK’’ PROCEDURES TO IMPLEMENTING BILLS.—The

18 provisions of section 151 of the Trade Act of 1974 (19

19 U.S.C. 2191) apply to implementing bills submitted with

20 respect to trade agreements entered into under section

21 202(a) before June 1, 1996.

22 (c) CONFORMING AMENDMENT.—Section 151(b)(1)

23 of the Trade Act of 1974 (19 U.S.C. 2191(b)(1)) is

24 amended by striking out ‘‘or section 1103(a)(1) of the

25 Omnibus Trade and Competitiveness Act of 1988’’ and in-
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1 serting ‘‘, section 1103(a)(1) of the Omnibus Trade and

2 Competitiveness Act of 1988, and section 202(a) of the

3 Caribbean Basin Free Trade Agreements Act’’.

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