I

106TH CONGRESS

1ST SESSION H. R. 1942

To encourage the establishment of free trade areas between the United States

and certain Pacific Rim countries.

IN THE HOUSE OF REPRESENTATIVES

MAY 26, 1999

Mr. CRANE (for himself, Mr. DREIER, Mrs. JOHNSON of Connecticut, and Ms.

DUNN) introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To encourage the establishment of free trade areas between

the United States and certain Pacific Rim 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. FINDINGS.

4 The Congress makes the following findings:

5 (1) Free trade agreements improve the income

6 and prosperity of the citizens of participating coun7 tries because open markets increase competition,

8 eliminate inefficiencies, and result in lower costs to

9 manufacturers and consumers.
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1 (2) The 21 member economies of APEC rep2 resent over half of world production and almost half

3 of global trade. In November of 1994, leaders of

4 members economies of APEC declared their commit5 ment to achieving ‘‘free and open trade’’ in the re6 gion by the year 2020 in the case of developing

7 countries and 2010 in the case of developed coun8 tries.

9 (3) Continued economic growth through the

10 creation of new opportunities for trade and invest11 ment, and the economic and political stability result12 ing from diminishing the proclivity of governments

13 to establish and maintain tariff and nontariff trade

14 barriers, is vital to the strategic and economic inter15 ests of the United States in the Pacific Rim region.

16 (4) The financial crisis affecting Asia, and asso17 ciated macroeconomic factors, have resulted in a se18 vere disruption of the pattern of rapid United States

19 export growth that was the dominant pattern of

20 United States trade with the region during the years

21 1989–1997.

22 (5) At a difficult time in the world economy,

23 which is increasing pressures on countries to turn

24 inward and adopt protectionist policies, free trade

25 agreement negotiations provide additional leverage
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1 to achieve market opening measures for United

2 States goods and services.

3 (6) Many countries in the region, including

4 New Zealand, Australia, and Singapore, are long5 time allies of the United States in working to in6 crease economic growth through trade liberalization,

7 both in the World Trade Organization and in APEC.

8 (7) Building closer ties and coordinating with

9 countries whose interests are largely friendly to the

10 United States will have immense payoffs as the

11 trade negotiations to achieve trade liberalization de12 scribed in paragraph (6) proceed early in the next

13 century.

14 (8) In particular, the United States must con15 tinue to promote its interests in the Asia-Pacific re16 gion through an aggressive short- and long-term

17 trade and investment negotiating agenda.

18 (9) Bilateral trade agreement negotiations have

19 been shown to exert constructive influence on multi20 lateral and regional trade negotiations. Typically, bi21 lateral trade talks enlarge common areas of agree22 ment on trade disciplines that can then be advanced

23 more successfully in the context of a larger negotia24 tion, among additional trading partners.
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1 (10) Trade and investment disputes between

2 the United States and Pacific Rim countries could

3 be more effectively resolved in the context of mutu4 ally agreed-upon disciplines and dispute settlement

5 mechanisms rather than issue-by-issue confronta6 tions under section 301 of the Trade Act of 1974 or

7 other trade remedy laws.

8 (11) By providing a firm foundation for en9 hanced cooperation, free trade agreements between

10 the United States and Pacific Rim countries, whose

11 economies are becoming increasingly complementary

12 and interdependent, will help ensure mutually bene13 ficial economic and political relations.

14 (12) Free trade agreements, by enhancing mar15 ket access and the understanding of United States

16 firms with respect to competing effectively in Pacific

17 Rim markets, will thereby assist in stabilizing the bi18 lateral trade balance between the United States and

19 countries in the Pacific Rim.

20 SEC. 2. UNITED STATES TRADE POLICY WITH ELIGIBLE PA21 CIFIC RIM COUNTRIES.

22 It shall be the policy of the United States to seek

23 the elimination of tariff and nontariff barriers and to

24 achieve more open, equitable, and reciprocal market access

25 through the negotiation of bilateral free trade agreements
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1 with eligible Pacific Rim countries. These nontariff bar2 riers include—

3 (1) regulatory and other barriers that deny na4 tional treatment and the right of establishment for

5 trade in services;

6 (2) denial of national treatment to foreign di7 rect investment;

8 (3) lack of adequate protection for copyrights,

9 patents, trademarks, semiconductor chips, layout de10 signs, trade secrets, and other forms of intellectual

11 property;

12 (4) arbitrary and discriminatory sanitary,

13 phytosanitary, or technical standards;

14 (5) government measures such as price controls,

15 reference pricing, and unreasonable restrictions on

16 listings for government-established formularies

17 which deny full market access for United States

18 products; and

19 (6) unfair or trade-distorting activities of State

20 trading enterprises and other administrative mecha21 nisms.

22 SEC. 3. PRENEGOTIATION CONSULTATIONS.

23 (a) PRELIMINARY CONSULTATIONS.—Within 60 days

24 after the date of the enactment of this Act, the President
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1 shall identify, and initiate preliminary consultations with

2 the government of, each eligible Pacific Rim country.

3 (b) MINISTERIAL MEETING.—If preliminary con4 sultations indicate that the establishment of a free trade

5 area between the United States and an eligible Pacific

6 Rim country is potentially feasible and desirable, the

7 President shall, within 60 days after the preliminary con8 sultations are completed, request a meeting at the ministe9 rial level with the government of that country to consider

10 the conditions under which formal negotiations regarding

11 a free trade agreement could be commenced.

12 (c) ITC ADVICE.—Within 6 months after the end of

13 each ministerial meeting held under subsection (b) with

14 the government of an eligible Pacific Rim country, the

15 United States International Trade Commission shall ad16 vise the President regarding the probable economic effects

17 of providing duty-free treatment for such articles that are

18 products of that country on industries in the United

19 States producing like or directly competitive articles and

20 on consumers in the United States.

21 SEC. 4. MINISTERIAL MEETING RECOMMENDATIONS.

22 At each ministerial meeting convened pursuant to

23 section 3(b), the President shall recommend the establish24 ment of a council comprised of appropriate public and pri-
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1 vate sector officials from the respective countries. The

2 functions of the council are—

3 (1) to review and analyze the aspects of the ex4 isting bilateral relationship as they relate to the ne5 gotiation of a free trade agreement, including—

6 (A) trade and investment practices and im7 pediments;

8 (B) differences in customs laws and proce9 dures;

10 (C) the harmonization of trade statistics

11 and other economic data; and

12 (D) the status of bilateral disputes and ex13 change of information on disputed practices;

14 and

15 (2) within 6 months after its establishment, to

16 issue a report on the overall bilateral relationship

17 and the prospects for a successful negotiation of a

18 free trade agreement that addresses the possible

19 benefits and adverse effects of concluding a free

20 trade agreement and examines the types of dispute

21 settlement mechanisms that would be appropriate to

22 effectively resolve bilateral trade problems.
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1 SEC. 5. PRESIDENTIAL DETERMINATION REGARDING THE

2 FEASIBILITY AND DESIRABILITY OF NEGOTI3 ATING FREE TRADE AGREEMENTS WITH ELI4 GIBLE COUNTRIES.

5 (a) DETERMINATION AND REPORT.—Not later than

6 6 months after receiving any report prepared by a bilateral

7 council established under section 4, the President, after

8 receiving advice from the Advisory Committee for Trade

9 Policy Negotiations established under section 135(b) of

10 the Trade Act of 1974, and taking into account—

11 (1) the policy set forth in section 2, and

12 (2) the advice of the International Trade Com13 mission under section 3(c),

14 shall make a determination on the feasibility and desir15 ability of commencing formal negotiations regarding a free

16 trade agreement with an eligible Pacific Rim country or

17 countries to which the report relates, and shall submit a

18 report to the Committee on Finance of the Senate and

19 the Committee on Ways and Means of the House of Rep20 resentatives on that determination.

21 (b) FACTORS IN MAKING DETERMINATION.—In mak22 ing a determination on the feasibility and desirability of

23 establishing a free trade area between the United States

24 and an eligible country, the President shall consider

25 whether that country—
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1 (1) is a member of the World Trade Organiza2 tion;

3 (2) has expressed an interest in negotiating a

4 bilateral free trade agreement with the United

5 States;

6 (3) has pursued substantive trade liberalization

7 and undertaken structural economic reforms in

8 order to achieve an economy governed by market

9 forces, fiscal restraint, and international trade dis10 ciplines and, as a result, has achieved a largely open

11 economy;

12 (4) has demonstrated a broad affinity for

13 United States trade policy objectives and initiatives;

14 (5) is an active participant in preparations of

15 the General Council of the World Trade Organiza16 tion for the 3d Ministerial Conference of the World

17 Trade Organization which will be held in the United

18 States from November 30 to December 3, 1999, and

19 has demonstrated a commitment to United States

20 objectives with respect to an accelerated negotiating

21 round of the World Trade Organization;

22 (6) is working consistently to eliminate export

23 performance requirements or local content require24 ments;
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1 (7) seeks the harmonization of domestic and

2 international standards in a manner that ensures

3 transparency and nondiscrimination among the

4 member economies of APEC;

5 (8) is increasing the economic opportunities

6 available to small- and medium-sized businesses

7 through deregulation;

8 (9) is working consistently to eliminate barriers

9 to trade in services;

10 (10) provides national treatment for foreign di11 rect investment;

12 (11) is working consistently to accommodate

13 market access objectives of the United States;

14 (12) is working constructively to resolve trade

15 disputes with the United States and displays a clear

16 intent to continue to do so;

17 (13) is a country whose bilateral trade relation18 ship with the United States will benefit from im19 proved dispute settlement mechanisms; and

20 (14) is a country whose market for products

21 and services of the United States will be signifi22 cantly enhanced by eliminating substantially all tar23 iff and nontariff barriers and structural impedi24 ments to trade.
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1 SEC. 6. CONSULTATIONS WITH CONGRESSIONAL COMMIT2 TEES.

3 The President shall consult with the Committee on

4 Ways and Means of the House of Representatives and the

5 Committee on Finance of the Senate on a regular basis

6 with respect to the implementation of each of the provi7 sions of this Act.

8 SEC. 7. ELIGIBLE PACIFIC RIM COUNTRIES.

9 As used in this Act:

10 (1) APEC.—The term ‘‘APEC’’ means the

11 Asian Pacific Economic Cooperation Forum.

12 (2) ELIGIBLE PACIFIC RIM COUNTRY.—The

13 term ‘‘eligible Pacific Rim country’’ means any

14 country that is a WTO member (as defined in sec15 tion 2 of the Uruguay Round Agreements Act (19

16 U.S.C. 3501) and is a member economy of APEC.

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