I

103D CONGRESS

1ST SESSION H. R. 1403

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 HOUSE OF REPRESENTATIVES

MARCH 18, 1993

Mr. GIBBONS (for himself, Mr. PICKLE, Mr. CRANE, and Mr. RANGEL) introduced the following bill; which was referred jointly to the Committees on

Ways and Means and Rules

JUNE 23, 1993

Additional sponsors: Ms. MCKINNEY and Mr. MFUME

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,
2

•HR 1403 SC

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Caribbean Basin Free

3 Trade Agreements Act’’.

4 SEC. 2. CONGRESSIONAL FINDINGS.

5 The Congress finds that the continuation and

6 strengthening of the commitment of the United States, as

7 expressed by the enactment of the Caribbean Basin Eco8 nomic Recovery Act and the Caribbean Basin Economic

9 Recovery Expansion Act of 1990, to the successful devel10 opment of the Caribbean region requires the enactment

11 of provisions—

12 (1) to encourage the continuation of structural

13 reform efforts by Caribbean countries toward market

14 economies and trade liberalization;

15 (2) to preserve existing economic advantages

16 under the Caribbean Basin Initiative program and

17 avoid the potential diversion of investment from ben18 eficiary countries under the program to Mexico as a

19 result of the North American Free Trade Agree20 ment;

21 (3) to maintain and increase trade benefits

22 under the Caribbean Basin Initiative program in

23 order to promote further economic development and

24 political stability in beneficiary countries and to ex25 pand United States export opportunities in the Car26 ibbean region; and
3

•HR 1403 SC

1 (4) to encourage and create further economic

2 integration in the Western Hemisphere through free

3 trade arrangements that provide United States busi4 ness and labor reciprocal benefits through the re5 moval of barriers to trade and investment in goods

6 and services on a mutually advantageous basis.

7 TITLE I—RELATIONSHIP OF

8 NAFTA IMPLEMENTATION TO

9 THE OPERATION OF THE CAR10 IBBEAN BASIN INITIATIVE

11 SEC. 101. TEMPORARY PROVISIONS TO PROVIDE NAFTA

12 PARITY TO BENEFICIARY COUNTRY ECONO13 MIES.

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

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

16 2703(b)) is amended to read as follows:

17 ‘‘(b) IMPORT-SENSITIVE ARTICLES.—

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

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

20 this title does not apply to—

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

22 subject to textile agreements;

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

24 of the effective date of this title as eligible arti25 cles for the purpose of the generalized system
4

•HR 1403 SC

1 of preferences under title V of the Trade Act of

2 1974;

3 ‘‘(C) tuna, prepared or preserved in any

4 manner, in airtight containers;

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

6 from petroleum, provided for in headings 2709

7 and 2710 of the Harmonized Tariff Schedule of

8 the United States;

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

10 cases, bracelets and straps), of whatever type

11 including, but not limited to, mechanical, quartz

12 digital or quartz analog, if such watches or

13 watch parts contain any material which is the

14 product of any country with respect to which

15 HTS column 2 rates of duty apply; or

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

17 duty apply under subsection (h).

18 ‘‘(2) NAFTA TRANSITION PERIOD TREATMENT

19 OF CERTAIN TEXTILE AND APPAREL ARTICLES.—

20 ‘‘(A) EQUIVALENT TARIFF AND QUOTA

21 TREATMENT.—During the transition period—

22 ‘‘(i) the tariff treatment accorded at

23 any time to any textile or apparel article

24 that originates in the territory of a bene25 ficiary country shall be identical to the tar-
5

•HR 1403 SC

1 iff treatment that is accorded during such

2 time under section 2 of the Annex to a like

3 article that originates in the territory of

4 Mexico and is imported into the United

5 States;

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

7 title shall apply to any textile or apparel

8 article of a beneficiary country that is im9 ported into the United States and that—

10 ‘‘(I) meets the same require11 ments (other than assembly in Mex12 ico) as those specified in Appendix 2.4

13 of the Annex (relating to goods as14 sembled from fabric wholly formed

15 and cut in the United States) for the

16 duty free entry of a like article assem17 bled in Mexico; or

18 ‘‘(II) is identified under subpara19 graph (C) as a handloomed, hand20 made, or folklore article of such coun21 try and is certified as such by the

22 competent authority of such country;

23 and

24 ‘‘(iii) no quantitative restriction or

25 consultation level may be applied to the
6

•HR 1403 SC

1 importation into the United States of any

2 textile or apparel article that—

3 ‘‘(I) originates in the territory of

4 a beneficiary country,

5 ‘‘(II) meets the same require6 ments (other than assembly in Mex7 ico) as those specified in Appendix

8 3.1.B.10 of the Annex (relating to

9 goods assembled from fabric wholly

10 formed and cut in the United States)

11 for the exemption of a like article as12 sembled in Mexico from United States

13 quantitative restrictions and consulta14 tion levels, or

15 ‘‘(III) qualifies for duty-free

16 treatment under clause (ii)(II).

17 ‘‘(B) NAFTA TRANSITION PERIOD TREAT18 MENT OF NONORIGINATING TEXTILE AND AP19 PAREL ARTICLES.—

20 ‘‘(i) PREFERENTIAL TARIFF TREAT21 MENT.—Subject to clause (ii), the United

22 States Trade Representative may place in

23 effect at any time during the transition pe24 riod with respect to any textile or apparel

25 article that—
7

•HR 1403 SC

1 ‘‘(I) is a product of a beneficiary

2 country; but

3 ‘‘(II) does not qualify as a good

4 that originates in the territory of that

5 country;

6 tariff treatment that is identical to the

7 preferential tariff treatment that is ac8 corded during such time under Appendix

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

10 a product of Mexico and imported into the

11 United States.

12 ‘‘(ii) PRIOR CONSULTATION.—The

13 United States Trade Representative may

14 implement the preferential tariff treatment

15 described in clause (i) only after consulta16 tion with representatives of the United

17 States textile and apparel industry and

18 other interested parties regarding—

19 ‘‘(I) the specific articles to which

20 such treatment will be extended,

21 ‘‘(II) the annual quantity levels

22 to be applied under such treatment

23 and any adjustment to such levels,

24 ‘‘(III) the allocation of such an25 nual quantities among the beneficiary
8

•HR 1403 SC

1 countries that export the articles con2 cerned to the United States, and

3 ‘‘(IV) any other applicable provi4 sion.

5 ‘‘(iii) ADJUSTMENT OF CERTAIN BI6 LATERAL TEXTILE AGREEMENTS.—The

7 United States Trade Representative shall

8 undertake negotiations for purposes of

9 seeking appropriate reductions in the

10 quantities of textile and apparel articles

11 that are permitted to be imported into the

12 United States under bilateral agreements

13 with beneficiary countries in order to re14 flect the quantities of textile and apparel

15 articles of each respective country that are

16 exempt from quota treatment by reason of

17 paragraph (2)(A)(iii).

18 ‘‘(C) HANDLOOMED, HANDMADE, AND

19 FOLKLORE ARTICLES.—For purposes of sub20 paragraph (A), the United States Trade Rep21 resentative shall consult with representatives of

22 the beneficiary country for the purpose of iden23 tifying particular textile and apparel goods that

24 are mutually agreed upon as being handloomed,

25 handmade, or folklore goods of a kind described
9

•HR 1403 SC

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

2 3.1.B.11 of the Annex.

3 ‘‘(D) BILATERAL EMERGENCY ACTIONS.—

4 The President may take—

5 ‘‘(i) bilateral emergency tariff actions

6 of a kind described in section 4 of the

7 Annex with respect to any textile or ap8 parel article imported from a beneficiary

9 country if the application of tariff treat10 ment under subparagraph (A) to such arti11 cle results in conditions that would be

12 cause for the taking of such actions under

13 such section 4 with respect to a like article

14 that is a product of Mexico; or

15 ‘‘(ii) bilateral emergency quantitative

16 restriction actions of a kind described in

17 section 5 of the Annex with respect to im18 ports of any textile or apparel article de19 scribed in subparagraph (B)(i)(I) and (II)

20 if the importation of such article into the

21 United States results in conditions that

22 would be cause for the taking of such ac23 tions under such section 5 with respect to

24 a like article that is a product of Mexico.
10

•HR 1403 SC

1 ‘‘(3) NAFTA TRANSITION PERIOD TREATMENT

2 OF CERTAIN OTHER ARTICLES ORIGINATING IN BEN3 EFICIARY COUNTRIES.—

4 ‘‘(A) EQUIVALENT TARIFF TREATMENT.—

5 ‘‘(i) IN GENERAL.—Subject to clause

6 (ii), the tariff treatment accorded at any

7 time during the transition period to any

8 article referred to in any of subparagraphs

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

10 originates in the territory of a beneficiary

11 country shall be identical to the tariff

12 treatment that is accorded during such

13 time under Annex 302.2 of the NAFTA to

14 a like article that originates in the terri15 tory of Mexico and is imported into the

16 United States. Such articles shall be sub17 ject to the provisions for emergency action

18 under chapter 8 of part two of the NAFTA

19 to the same extent as if such articles were

20 imported from Mexico.

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

22 apply to any article accorded duty-free

23 treatment under U.S. Note 2(b) to sub24 chapter II of chapter 98 of the Har-
11

•HR 1403 SC

1 monized Tariff Schedule of the United

2 States.

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

4 DUTY REDUCTIONS.—If at any time during the

5 transition period the rate of duty that would

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

7 in regard to such period) apply with respect to

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

9 duty that is lower than the rate of duty result10 ing from such action, then such lower rate of

11 duty shall be applied for the purposes of imple12 menting such action.

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

14 of chapter 5 of part two of the NAFTA regarding

15 customs procedures apply to importations under

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

17 countries.

18 ‘‘(5) DEFINITIONS.—As used in this sub19 section—

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

21 300–B of the NAFTA.

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

23 American Free Trade Agreement entered into

24 between the United States, Mexico, and Canada

25 on December 17, 1992.
12

•HR 1403 SC

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

2 means any article referred to in paragraph

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

4 the Annex.

5 ‘‘(D) The term ‘transition period’ means,

6 with respect to a beneficiary country, the period

7 that begins on the date that the NAFTA enters

8 into force with respect to the United States;

9 and ends on the earlier of—

10 ‘‘(i) the date that is the 3rd anniver11 sary of the date on which the NAFTA en12 ters into force; or

13 ‘‘(ii) the date on which—

14 ‘‘(I) there enters into force with

15 respect to the United States a trade

16 agreement entered into under the au17 thority of section 202(a) of the Carib18 bean Basin Free Trade Agreements

19 Act and to which the beneficiary coun20 try is a party, or

21 ‘‘(II) the beneficiary country ac22 cedes to the NAFTA.

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

24 originated in the territory of a beneficiary coun25 try if the article meets the rules of origin for
13

•HR 1403 SC

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

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

3 applying such chapter 4 or Appendix 6.A with

4 respect to a beneficiary country for purposes of

5 this subsection, no countries other than the

6 United States and beneficiary countries may be

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

8 (b) CONFORMING AMENDMENTS.—The Caribbean

9 Basin Economic Recovery Act is further amended—

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

11 as follows:

12 ‘‘(B) withdraw, suspend, or limit the appli13 cation of the duty-free treatment under this

14 subtitle, and the tariff and preferential tariff

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

16 any article of any country,’’; and

17 (2) by inserting ‘‘and except as provided in sec18 tion 213(b)(2) and (3),’’ after ‘‘Tax Reform Act of

19 1986,’’ in section 213(a)(1).

20 SEC. 102. EFFECT OF NAFTA ON SUGAR IMPORTS FROM

21 BENEFICIARY COUNTRIES.

22 The President shall monitor the effects, if any, that

23 the implementation of the North American Free Trade

24 Agreement has on the access of beneficiary countries

25 under the Caribbean Basin Economic Recovery Act to the
14

•HR 1403 SC

1 United States market for sugars, syrups, and molasses.

2 If the President considers that the implementation of the

3 Agreement is affecting, or will likely affect, in an adverse

4 manner the access of such countries to the United States

5 market, the President shall promptly—

6 (1) take such actions, after consulting with in7 terested parties and with the appropriate committees

8 of the House of Representatives and the Senate; or

9 (2) propose to the Congress such legislative ac10 tions;

11 as may be necessary or appropriate to ameliorate such ad12 verse effect.

13 TITLE II—CARIBBEAN BASIN

14 FREE TRADE AGREEMENTS

15 SEC. 201. TRADE AGREEMENT FEASIBILITY AND OBJEC16 TIVES.

17 As soon as practicable, the United States Trade Rep18 resentative shall determine the desirability and feasibility

19 of, and a likely timetable for, any country that is a bene20 ficiary country for purposes of the Caribbean Basin Eco21 nomic Recovery Act, or a group of such beneficiary coun22 tries, either—

23 (1) acceding to—
15

•HR 1403 SC

1 (A) the North American Free Trade

2 Agreement pursuant to Article 2204 of such

3 Agreement, and

4 (B) as appropriate, supplemental agree5 ments pertaining to environmental, labor, and

6 import issues; or

7 (2) entering into comprehensive bilateral or

8 multilateral agreements with the United States that

9 contain provisions that—

10 (A) are comparable to the provisions of the

11 North American Free Trade Agreement and, as

12 appropriate, to the provisions of supplemental

13 agreements pertaining to environmental, labor,

14 and import issues, and

15 (B) will achieve the applicable purposes,

16 policies, and objectives set forth in section

17 212(b) and (c) of the Caribbean Basin Eco18 nomic Recovery Act and section 1101 of the

19 Omnibus Trade and Competitiveness Act of

20 1988.

21 The United States Trade Representative shall consult with

22 the Committee on Ways and Means of the House of Rep23 resentatives and the Committee on Finance of the Senate

24 regarding the determinations made under this section.
16

•HR 1403 SC

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
17

•HR 1403 SC

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)—
18

•HR 1403 SC

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—
19

•HR 1403 SC

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)(A)

8 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), and

15 why and to what extent the agreement

16 does not achieve other applicable pur17 poses, policies, and objectives,

18 (II) how the agreement serves

19 the interests of United States com20 merce, and

21 (III) why the implementing bill

22 and proposed administrative action is

23 required or appropriate to carry out

24 the agreement.
20

•HR 1403 SC

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-
21

•HR 1403 SC

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’’.

Æ

HR 1403 SC——2