II

106TH CONGRESS

1ST SESSION S. 566

To amend the Agricultural Trade Act of 1978 to exempt agricultural commodities, livestock, and value-added products from unilateral economic sanctions, to prepare for future bilateral and multilateral trade negotiations

affecting United States agriculture, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 8, 1999

Mr. LUGAR introduced the following bill; which was read twice and referred

to the Committee on Agriculture, Nutrition, and Forestry

A BILL

To amend the Agricultural Trade Act of 1978 to exempt

agricultural commodities, livestock, and value-added

products from unilateral economic sanctions, to prepare

for future bilateral and multilateral trade negotiations

affecting United States agriculture, 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 ‘‘Agricultural Trade

5 Freedom Act’’.
2

•S 566 IS

1 SEC. 2. DEFINITIONS.

2 In this Act, the terms ‘‘agricultural commodity’’ and

3 ‘‘United States agricultural commodity’’ have the mean4 ings given the terms in section 102 of the Agricultural

5 Trade Act of 1978 (7 U.S.C. 5602).

6 SEC. 3. AGRICULTURAL COMMODITIES, LIVESTOCK, AND

7 PRODUCTS EXEMPT FROM SANCTIONS.

8 Title IV of the Agricultural Trade Act of 1978 (7

9 U.S.C. 5661 et seq.) is amended by adding at the end

10 the following:

11 ‘‘SEC. 418. AGRICULTURAL COMMODITIES, LIVESTOCK, AND

12 PRODUCTS EXEMPT FROM SANCTIONS.

13 ‘‘(a) DEFINITIONS.—In this section:

14 ‘‘(1) CURRENT SANCTION.—The term ‘current

15 sanction’ means a unilateral economic sanction that

16 is in effect on the date of enactment of the Agricul17 tural Trade Freedom Act.

18 ‘‘(2) NEW SANCTION.—The term ‘new sanction’

19 means a unilateral economic sanction that becomes

20 effective after the date of enactment of that Act.

21 ‘‘(3) UNILATERAL ECONOMIC SANCTION.—The

22 term ‘unilateral economic sanction’ means any prohi23 bition, restriction, or condition on economic activity,

24 including economic assistance, with respect to a for25 eign country or foreign entity that is imposed by the

26 United States for reasons of foreign policy or na-
3

•S 566 IS

1 tional security, except in a case in which the United

2 States imposes the measure pursuant to a multilat3 eral regime and the other members of that regime

4 have agreed to impose substantially equivalent meas5 ures.

6 ‘‘(b) EXEMPTION.—

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

8 and (3) and notwithstanding any other provision of

9 law, agricultural commodities made available as a re10 sult of commercial sales shall be exempt from a uni11 lateral economic sanction imposed by the United

12 States on another country.

13 ‘‘(2) EXCLUSIONS.—Paragraph (1) shall not

14 apply to agricultural commodities made available as

15 a result of programs carried out under—

16 ‘‘(A) the Agricultural Trade Development

17 and Assistance Act of 1954 (7 U.S.C. 1691 et

18 seq.);

19 ‘‘(B) section 416 of the Agricultural Act of

20 1949 (7 U.S.C. 1431);

21 ‘‘(C) the Food for Progress Act of 1985 (7

22 U.S.C. 1736o); or

23 ‘‘(D) the Agricultural Trade Act of 1978

24 (7 U.S.C. 5601 et seq.).
4

•S 566 IS

1 ‘‘(3) DETERMINATION BY PRESIDENT.—If the

2 President determines that the exemption provided

3 under paragraph (1) should not apply to a unilateral

4 economic sanction for reasons of foreign policy or

5 national security, the President may include the ag6 ricultural commodities made available as a result of

7 the activities described in paragraph (1) in the uni8 lateral economic sanction.

9 ‘‘(c) CURRENT SANCTIONS.—

10 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

11 the exemption under subsection (b)(1) shall apply to

12 a current sanction.

13 ‘‘(2) PRESIDENTIAL REVIEW.—Not later than

14 90 days after the date of enactment of the Agricul15 tural Trade Freedom Act, the President shall review

16 each current sanction to determine whether the ex17 emption under subsection (b)(1) should apply to the

18 current sanction.

19 ‘‘(3) APPLICATION.—The exemption under sub20 section (b)(1) shall apply to a current sanction be21 ginning on the date that is 180 days after the date

22 of enactment of the Agricultural Trade Freedom Act

23 unless the President determines that the exemption

24 should not apply to the current sanction for reasons

25 of foreign policy or national security.
5

•S 566 IS

1 ‘‘(d) REPORT.—

2 ‘‘(1) IN GENERAL.—If the President determines

3 that the exemption under subsection (b)(2) or (c)(2)

4 should not apply to a unilateral economic sanction,

5 the President shall submit a report to the Commit6 tee on Agriculture of the House of Representatives

7 and the Committee on Agriculture, Nutrition, and

8 Forestry of the Senate—

9 ‘‘(A) in the case of a current sanction, not

10 later than 15 days after the date of the deter11 mination under subsection (c)(2); and

12 ‘‘(B) in the case of a new sanction, on the

13 date of the imposition of the new sanction.

14 ‘‘(2) CONTENTS OF REPORT.—The report shall

15 contain—

16 ‘‘(A) an explanation of the foreign policy

17 or national security reasons for which the ex18 emption should not apply to the unilateral eco19 nomic sanction; and

20 ‘‘(B) an assessment by the Secretary—

21 ‘‘(i) regarding export sales—

22 ‘‘(I) in the case of a current

23 sanction, whether markets in the

24 sanctioned country or countries

25 present a substantial trade oppor-
6

•S 566 IS

1 tunity for export sales of a United

2 States agricultural commodity; or

3 ‘‘(II) in the case of a new sanc4 tion, the extent to which any country

5 or countries to be sanctioned or likely

6 to be sanctioned are markets that ac7 counted for, during the preceding cal8 endar year, more than 3 percent of

9 export sales of a United States agri10 cultural commodity;

11 ‘‘(ii) regarding the effect on United

12 States agricultural commodities—

13 ‘‘(I) in the case of a current

14 sanction, the potential for export sales

15 of United States agricultural commod16 ities in the sanctioned country or

17 countries; and

18 ‘‘(II) in the case of a new sanc19 tion, the likelihood that exports of

20 United States agricultural commod21 ities will be affected by the new sanc22 tion or by retaliation by any country

23 to be sanctioned or likely to be sanc24 tioned, including a description of spe25 cific United States agricultural com-
7

•S 566 IS

1 modities that are most likely to be af2 fected;

3 ‘‘(iii) regarding the income of agricul4 tural producers—

5 ‘‘(I) in the case of a current

6 sanction, the potential for increasing

7 the income of producers of the United

8 States agricultural commodities in9 volved; and

10 ‘‘(II) in the case of a new sanc11 tion, the likely effect on incomes of

12 producers of the agricultural commod13 ities involved;

14 ‘‘(iv) regarding displacement of

15 United States suppliers—

16 ‘‘(I) in the case of a current

17 sanction, the potential for increased

18 competition for United States suppli19 ers of the agricultural commodity in

20 countries that are not subject to the

21 current sanction; and

22 ‘‘(II) in the case of a new sanc23 tion, the extent to which the new

24 sanction would permit foreign suppli-
8

•S 566 IS

1 ers to replace United States suppliers;

2 and

3 ‘‘(v) regarding the reputation of

4 United States agricultural producers as re5 liable suppliers—

6 ‘‘(I) in the case of a current

7 sanction, whether removing the sanc8 tion would increase the reputation of

9 United States producers as reliable

10 suppliers of agricultural commodities

11 in general, and of specific agricultural

12 commodities identified by the Sec13 retary; and

14 ‘‘(II) in the case of a new sanc15 tion, the likely effect of the proposed

16 sanction on the reputation of United

17 States producers as reliable suppliers

18 of agricultural commodities in general,

19 and of specific agricultural commod20 ities identified by the Secretary.’’.

21 SEC. 4. OBJECTIVES FOR AGRICULTURAL NEGOTIATIONS.

22 It is the sense of Congress that the principal agricul23 tural trade negotiating objectives of the United States for

24 future multilateral and bilateral trade negotiations (in25 cluding negotiations involving the World Trade Organiza-
9

•S 566 IS

1 tion) should be to achieve, on an expedited basis and to

2 the maximum extent practicable, more open and fair con3 ditions for trade in agricultural commodities by—

4 (1) developing, strengthening, and clarifying

5 rules for trade in agricultural commodities, including

6 eliminating or reducing restrictive or trade-distorting

7 import and export practices, including—

8 (A) enhancing the operation and effective9 ness of the relevant provisions of the Uruguay

10 Round Agreements designed to define, deter,

11 and discourage the persistent use of unfair

12 trade practices; and

13 (B) enforcing and strengthening rules of

14 the World Trade Organization regarding—

15 (i) trade-distorting practices of state

16 trading enterprises and similar public and

17 private trading enterprises; and

18 (ii) the acts, practices, or policies of a

19 foreign government that unreasonably—

20 (I) require that substantial direct

21 investment in the foreign country be

22 made as a condition for carrying on

23 business in the foreign country;

24 (II) require that intellectual

25 property be licensed to the foreign
10

•S 566 IS

1 country or to any firm of the foreign

2 country; or

3 (III) delay or preclude implemen4 tation of a report of a dispute panel

5 of the World Trade Organization;

6 (2) increasing the export of United States agri7 cultural commodities by eliminating barriers to trade

8 (including transparent and nontransparent barriers);

9 (3) eliminating other specific constraints to fair

10 trade (such as export subsidies, quotas, and other

11 nontariff import barriers and more open market ac12 cess) in foreign markets for United States agricul13 tural commodities;

14 (4) developing, strengthening, and clarifying

15 rules that address practices that unfairly limit

16 United States market access opportunities or distort

17 markets for United States agricultural commodities

18 to the detriment of the United States, including—

19 (A) unfair or trade-distorting activities of

20 state trading enterprises, and similar public and

21 private trading enterprises, that result in inad22 equate price transparency;

23 (B) unjustified restrictions or commercial

24 requirements affecting new technologies, includ25 ing biotechnology;
11

•S 566 IS

1 (C) unjustified sanitary or phytosanitary

2 restrictions; and

3 (D) restrictive rules in the establishment

4 and administration of tariff-rate quotas;

5 (5) ensuring that there are reliable suppliers of

6 agricultural commodities in international commerce

7 by encouraging countries to treat foreign buyers no

8 less favorably than domestic buyers of the commod9 ity or product involved; and

10 (6) eliminating nontariff trade barriers for

11 meeting the food needs of an increasing world popu12 lation through the use of biotechnology by—

13 (A) ensuring market access to United

14 States agricultural commodities derived from

15 biotechnology that is scientifically defensible;

16 (B) opposing the establishment of protec17 tionist trade measures disguised as health

18 standards; and

19 (C) protesting continual delays by other

20 countries in their approval processes.

21 SEC. 5. SALE OR BARTER OF FOOD ASSISTANCE.

22 It is the sense of Congress that the amendments to

23 section 203 of the Agricultural Trade Development and

24 Assistance Act of 1954 (7 U.S.C. 1723) made by section

25 208 of the Federal Agriculture Improvement and Reform
12

•S 566 IS

1 Act of 1996 (Public Law 104–127; 110 Stat. 954) were

2 intended to allow the sale or barter of United States agri3 cultural commodities in connection with United States

4 food assistance only within the recipient country or coun5 tries adjacent to the recipient country, unless—

6 (1) the sale or barter within the recipient coun7 try or adjacent countries is not practicable; and

8 (2) the sale or barter within countries other

9 than the recipient country or adjacent countries will

10 not disrupt commercial markets for the agricultural

11 commodity involved.

12 SEC. 6. SENSE OF CONGRESS REGARDING RELIEF FROM

13 UNFAIR TRADE PRACTICES AFFECTING

14 UNITED STATES AGRICULTURAL COMMOD15 ITIES.

16 (a) FINDINGS.—Congress finds that—

17 (1) often dispute settlement proceedings to re18 solve unfair trade practices of foreign countries that

19 restrict market access of United States agricultural

20 commodities are inadequate, time consuming, and

21 cumbersome; and

22 (2) practices that unfairly limit market access

23 opportunities for United States agricultural com24 modities through export subsidies and import bar25 riers include—
13

•S 566 IS

1 (A) unfair or trade-distorting activities of

2 state trading enterprises, and similar public and

3 private trading enterprises, that result in inad4 equate price transparency;

5 (B) unjustified restrictions or commercial

6 requirements affecting new technologies, includ7 ing biotechnology, that are not scientifically de8 fensible;

9 (C) unjustified sanitary or phytosanitary

10 restrictions;

11 (D) restrictive rules for the establishment

12 and administration of tariff-rate quotas;

13 (E) requirements that substantial direct

14 investment in the foreign country be made as a

15 condition for carrying on business in the foreign

16 country; and

17 (F) requirements that intellectual property

18 be licensed to the foreign country or to any firm

19 of the foreign country.

20 (b) SENSE OF CONGRESS.—It is the sense of Con21 gress that the Secretary of Agriculture should aggressively

22 use the authorities granted to the Secretary under section

23 302 of the Agricultural Trade Act of 1978 (7 U.S.C.

24 5652), which provides the Secretary with the authority to

25 use programs of the Department of Agriculture for the
14

•S 566 IS

1 agricultural commodity involved when there is undue delay

2 in a dispute resolution proceeding of an international

3 trade agreement (such as an agreement administered by

4 the World Trade Organization).

5 SEC. 7. MICRONUTRIENT FORTIFICATION PILOT PROGRAM.

6 Section 415 of the Agricultural Trade Development

7 and Assistance Act of 1954 (7 U.S.C. 1736g–2) is re8 pealed.

9 SEC. 8. TECHNICAL CORRECTIONS.

10 (a) ADMINISTRATIVE PROVISIONS.—Section 216 of

11 the Federal Agriculture Improvement and Reform Act of

12 1996 (Public Law 104–127; 110 Stat. 957) is amended—

13 (1) in paragraph (2), by striking ‘‘subsection

14 (c)’’ and inserting ‘‘subsection (b)’’;

15 (2) in paragraph (3), by striking ‘‘subsection

16 (d)’’ and inserting ‘‘subsection (c)’’;

17 (3) in paragraph (4), by striking ‘‘subsection

18 (g)(2)’’ and inserting ‘‘subsection (f)(2)’’; and

19 (4) in paragraph (5), by striking ‘‘subsection

20 (h)’’ and inserting ‘‘subsection (g)’’.

21 (b) EMERGING MARKETS.—Section 1542(d)(1)(A)(i)

22 of the Food, Agriculture, Conservation, and Trade Act of

23 1990 (Public Law 101–624; 7 U.S.C. 5622 note) is

24 amended by striking ‘‘such democracies’’ and inserting

25 ‘‘the markets’’.
15

•S 566 IS

1 (c) TRADE COMPENSATION AND ASSISTANCE PRO2 GRAMS.—Section 417(a) of the Agricultural Trade Act of

3 1978 (7 U.S.C. 5677(a)) is amended by inserting ‘‘of an

4 agricultural commodity’’ after ‘‘causes exports’’.

5 (d) EFFECTIVE DATE.—The amendments made by

6 this section take effect on April 4, 1996.

Æ