I

104TH CONGRESS

2D SESSION H. R. 3654

To ensure the competitiveness of the United States textile and apparel

industry.

IN THE HOUSE OF REPRESENTATIVES

JUNE 13, 1996

Mr. SPRATT (for himself, Mr. COBLE, Mr. PAYNE of Virginia, Mr. BURR, Mr.

COLLINS of Georgia, Mr. RANGEL, Mr. ROGERS, Mr. CARDIN, Mr. NEAL

of Massachusetts, Mr. COYNE, Mr. FORD, Mr. LEWIS of Georgia, Mr.

LEVIN, Mr. MATSUI, Mr. HUNTER, Mr. FLANAGAN, Mr. BAKER of California, Mr. CHAMBLISS, Mr. BROWDER, Mr. FRANK of Massachusetts,

Mr. HEFNER, Mr. QUILLEN, Ms. KAPTUR, Mr. SPENCE, Mr. MONTGOMERY, Mr. LEWIS of Kentucky, Mr. GRAHAM, Mr. DEAL of Georgia, Mr.

FUNDERBURK, Mr. JONES, Mr. CLYBURN, Mr. WATT of North Carolina,

Mr. BALLENGER, Mr. HEINEMAN, Mr. RAHALL, Mr. ANDREWS, Mr.

THOMPSON, Mr. ROSE, Mr. PETERSON of Minnesota, Mr. SISISKY, Mr.

GORDON, Mr. MCHALE, Mr. HOLDEN, Mr. BISHOP, Mr. BOUCHER, Mr.

WOLF, Mr. CRAMER, Mr. ENGEL, Mr. CONDIT, Mr. STENHOLM, Mr.

REED, Mr. WHITFIELD, Mr. HALL of Texas, Mr. INGLIS of South Carolina, Mr. NADLER, Mr. DEFAZIO, Mr. MILLER of California, Mrs.

MYRICK, Mrs. CLAYTON, Mr. STUPAK, Mr. NORWOOD, Ms. JACKSON-LEE

of Texas, Mr. KINGSTON, Mr. LINDER, Mr. TANNER, Ms. SLAUGHTER,

and Ms. DANNER) introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To ensure the competitiveness of the United States textile

and apparel industry.

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

2 This Act may be cited as the ‘‘Textile and Apparel

3 Global Competitiveness Act of 1996’’.

4 SEC. 2. FINDINGS.

5 The Congress finds that—

6 (1) the textile and apparel industry is a key

7 part of the United States manufacturing base and

8 the third largest manufacturing sector in the United

9 States economy;

10 (2) textile and apparel facilities are often lo11 cated in economically sensitive regions;

12 (3) the industry has demonstrated an ability to

13 compete in the global economy where market access

14 is available;

15 (4) the domestic textile and apparel industry

16 has committed significant resources to be competi17 tive and productive;

18 (5) workers in the industry make the highest

19 quality textile and apparel goods in the world and

20 are the world’s most productive;

21 (6) the industry is preparing to compete in the

22 world market without the protection of import

23 quotas authorized by the Multifiber Arrangement;

24 and
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1 (7) United States trade policy should be ori2 ented toward expanding exports and ensuring that

3 United States trade laws are vigorously enforced.

4 (8) The Committee for the Implementation of

5 Textile Agreements, the Office of Textiles, Apparel,

6 and Consumer Goods of the Department of Com7 merce, and the Ambassador for Textiles and Apparel

8 in the Office of the United States Trade Representa9 tive—

10 (A) play central and indispensable roles in

11 administering the laws governing trade in tex12 tile and apparel goods;

13 (B) have diligently carried out laws en14 acted by the Congress and under powers dele15 gated to them by the President; and

16 (C) have acted in accordance with United

17 States and international law.

18 SEC. 3. MARKET ACCESS FOR U.S. TEXTILE AND APPAREL

19 PRODUCTS.

20 (a) ACCESSION PROTOCOLS.—In any case in which

21 the United States negotiates a protocol for accession of

22 a country to the World Trade Organization, the Trade

23 Representative shall negotiate for inclusion in that proto24 col, in addition to any other provisions, the following:
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1 (1) Provisions for effective market access to

2 that country’s domestic markets for textile and ap3 parel products of the United States.

4 (2) Provisions allowing the suspension or rev5 ocation of the provisions of paragraph 14 (relating

6 to increasing import levels based on growth rates) of

7 the Agreement on Textiles and Clothing if the Unit8 ed States determines that the country has failed to

9 enforce the provisions referred to in paragraph (1).

10 (b) BILATERAL AGREEMENTS WITH COUNTRIES

11 THAT ARE NOT WTO MEMBERS.—In any case in which

12 the United States negotiates a textile agreement with a

13 country that is not a WTO member, including any agree14 ment negotiated pursuant to section 5 of this Act, the

15 Trade Representative shall negotiate for inclusion in that

16 textile agreement, in addition to any other provisions, the

17 following:

18 (1) Provisions for effective market access to

19 that country’s domestic markets for textile and ap20 parel products of the United States.

21 (2) Provisions that recognize the right of the

22 United States to pursue remedies under United

23 States law, including section 301 of the Trade Act

24 of 1974, to respond to the denial of market access

25 described in paragraph (1).
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1 (c) REVIEW OF TEXTILE AGREEMENTS.—The Trade

2 Representative shall take into account the compliance of

3 countries with the provisions negotiated under subsections

4 (a) and (b) in identifying countries for purposes of section

5 183 of the Trade Act of 1974, as added by subsection

6 (d) of this section.

7 (d) PRIORITY FOREIGN COUNTRIES.—

8 (1) IN GENERAL.—Chapter 8 of title I of the

9 Trade Act of 1974 (19 U.S.C. 2241 and following)

10 is amended by adding at the end the following new

11 section:

12 ‘‘SEC. 183. IDENTIFICATION OF COUNTRIES THAT DENY

13 MARKET ACCESS FOR TEXTILE AND APPAREL

14 PRODUCTS.

15 ‘‘(a) IN GENERAL.—By no later than the date that

16 is 30 days after the date on which the annual report is

17 submitted to congressional committees under section

18 181(b), the United States Trade Representative (hereafter

19 referred to as the ‘Trade Representative’) shall identify—

20 ‘‘(1) those foreign countries that deny fair and

21 equitable market access to United States persons

22 that produce or sell textile or apparel products, and

23 ‘‘(2) those foreign countries identified under

24 paragraph (1) that are determined by the Trade

25 Representative to be priority foreign countries.
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1 ‘‘(b) SPECIAL RULES FOR IDENTIFICATIONS.—In

2 identifying priority foreign countries under subsection (a),

3 the following shall apply:

4 ‘‘(1) In identifying priority foreign countries

5 under subsection (a)(2), the Trade Representative

6 shall identify only those foreign countries—

7 ‘‘(A) that have the most onerous or egre8 gious acts, policies, or practices that deny fair

9 and equitable market access to United States

10 persons that sell or produce textile or apparel

11 products,

12 ‘‘(B) whose acts, policies, or practices de13 scribed in subparagraph (A) have the greatest

14 adverse impact (actual or potential) on the rel15 evant United States products, and

16 ‘‘(C) that are not—

17 ‘‘(i) entering into good faith negotia18 tions, or

19 ‘‘(ii) making significant progress in

20 bilateral or multilateral negotiations,

21 to provide adequate and effective market access

22 for textile and apparel products of the United

23 States.

24 ‘‘(2) In identifying foreign countries under sub25 section (a)(2), the Trade Representative shall—
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1 ‘‘(A) consult with the Chair of the Com2 mittee for the Implementation of Textile Agree3 ments and other appropriate officers of the

4 Federal Government, and

5 ‘‘(B) take into account information from

6 such sources as may be available to the Trade

7 Representative and such information as may be

8 submitted to the Trade Representative in re9 ports submitted under section 181(b) and peti10 tions submitted under section 302.

11 ‘‘(3) The Trade Representative may identify a

12 foreign country under subsection (a)(1) only if the

13 Trade Representative finds that there is a factual

14 basis for the denial of fair and equitable market ac15 cess as a result of the violation of international law

16 or an international agreement, or the existence of

17 barriers referred to in subsection (d)(1).

18 ‘‘(4) In identifying foreign countries under

19 paragraphs (1) and (2) of subsection (a), the Trade

20 Representative shall take into account—

21 ‘‘(A) the history of market access laws and

22 practices of the foreign country, including any

23 previous identification under subsection (a)(2);

24 and
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1 ‘‘(B) the history of efforts of the United

2 States, and the response of the foreign country,

3 to achieve fair and equitable market access for

4 textile and apparel products.

5 ‘‘(c) REVOCATIONS AND ADDITIONAL IDENTIFICA6 TIONS.—

7 ‘‘(1) IN GENERAL.—The Trade Representative

8 may at any time—

9 ‘‘(A) revoke the identification of any for10 eign country as a priority foreign country under

11 this section, or

12 ‘‘(B) identify a foreign country as a prior13 ity foreign country under this section,

14 if information available to the Trade Representative

15 indicates that such action is appropriate.

16 ‘‘(2) REPORTS TO CONGRESS.—The Trade Rep17 resentative shall include in the semiannual report

18 submitted to the Congress under section 309(3) a

19 detailed explanation of the identification of any for20 eign country as a priority foreign country under this

21 section.

22 ‘‘(d) DEFINITIONS.—For the purposes of this sec23 tion—

24 ‘‘(1) a foreign country denies fair and equitable

25 market access if the foreign country effectively de-
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1 nies access for textile or apparel products of the

2 United States through the use of laws, procedures,

3 practices, or regulations which—

4 ‘‘(A) violate provisions of international law

5 or international agreements to which both the

6 United States and the foreign country are par7 ties, or

8 ‘‘(B) constitute discriminatory nontariff

9 trade barriers;

10 ‘‘(2) a foreign country may be determined to

11 deny fair and equitable market access for textile or

12 apparel products, notwithstanding the fact that the

13 foreign country may be in compliance with the spe14 cific obligations of the Agreement on Textiles and

15 Clothing referred to in section 101(d)(4) of the Uru16 guay Round Agreements Act; and

17 ‘‘(3) fair and equitable market access is not

18 demonstrated only by access for those textile and ap19 parel products that are subsequently reexported to

20 the United States as finished textile or apparel prod21 ucts.

22 ‘‘(e) PUBLICATION.—The Trade Representative shall

23 publish in the Federal Register a list of foreign countries

24 identified under subsection (a) and shall make such revi-
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1 sions to the list as may be required by reason of action

2 under subsection (c).’’.

3 (2) CONFORMING AMENDMENT.—The table of

4 contents for the Trade Act of 1974 is amended by

5 inserting after the item relating to section 182 the

6 following new item:

‘‘Sec. 183. Identification of countries that deny market access for textile and

apparel products.’’.

7 (3) TITLE III ACTION.—Section 302(b)(2)(A) of

8 the Trade Act of 1974 (19 U.S.C. 2412(b)(2)(A)) is

9 amended by inserting ‘‘or section 183(a)(2)’’ after

10 ‘‘182(a)(2)’’.

11 SEC. 4. TEXTILE GLOBAL COMPETITIVENESS RESEARCH

12 FUND.

13 (a) ESTABLISHMENT.—There is established in the

14 United States Treasury a Textile Global Competitiveness

15 Research Fund (hereafter in this Act referred to as the

16 ‘‘Fund’’).

17 (b) USE OF FUND.—Amounts in the Fund shall be

18 available, in accordance with subsection (c)—

19 (1) to the Office of Textiles, Apparel, and

20 Consumer Goods of the Department of Commerce,

21 which is authorized to use such amounts to provide

22 funds for—

23 (A) the American Textile Partnership

24 (commonly referred to as ‘‘AMTEX’’);
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1 (B) the Textile/Clothing Technology Center

2 (commonly referred to as ‘‘TC2’’); and

3 (C) the National Textile Center (commonly

4 referred to as ‘‘NTC’’);

5 (2) for adjustment assistance for firms in the

6 textile and apparel industry under chapter 3 of title

7 II of the Trade Act of 1974 (19 U.S.C. 2341 and

8 following); and

9 (3) to the Customs Service for the enforcement

10 of laws governing trade in textile and apparel goods.

11 (c) FUNDING.—

12 (1) DEPOSITS.—There shall be deposited in the

13 Fund in each fiscal year the amount by which—

14 (A) the amounts collected in fines by virtue

15 of the amendments made by section 9 exceed

16 (B) the total amount collected under those

17 provisions of law amended by section 9 during

18 the fiscal year ending before the enactment of

19 this Act, as such amount is adjusted under

20 paragraph (2).

21 (2) ADJUSTMENT.—(A) The amount referred to

22 in paragraph (1)(B) shall be increased in each fiscal

23 year following the fiscal year described in paragraph

24 (1)(B) by the cost-of-living adjustment for the most

25 recent calendar year.
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1 (B) For purposes of subparagraph (A), the

2 cost-of-living adjustment for any calendar year is the

3 percentage (if any) by which—

4 (i) the CPI for the preceding calendar

5 year, exceeds

6 (ii) the CPI for the calendar year ending

7 before the enactment of this Act.

8 (C) For purposes of subparagraph (B), the CPI

9 for any calendar year is the average of the

10 Consumer Price Index as of the close of the 12-

11 month period ending on August 31 of such calendar

12 year.

13 (D) For purposes of subparagraph (C), the

14 term ‘‘Consumer Price Index’’ means the last

15 Consumer Price Index for all-urban consumers pub16 lished by the Department of Labor.

17 (3) ALLOCATIONS.—(A) 25 percent of the

18 amounts deposited in the Funds in each fiscal year

19 shall be made available to the Customs Service

20 under subsection (b)(3).

21 (B) Subject to subparagraph (C), amounts re22 maining in the Fund after the deduction is made

23 under subparagraph (A) shall be made available in

24 each fiscal year to each program referred to in para25 graphs (1) and (2) of subsection (b) based on the
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1 proportion that the amounts otherwise available to

2 such program during the preceding fiscal year bears

3 to the amounts otherwise available to all such pro4 grams during the preceding fiscal year.

5 (C) Amounts made available under subpara6 graph (A) for adjustment assistance for firms under

7 subsection (b)(2) may not exceed $2,000,000 in any

8 fiscal year.

9 (d) ANNUAL REPORT TO CONGRESS.—The Secretary

10 of Commerce shall submit to the Congress, not later than

11 April 1 of each year, a report on the contribution to the

12 United States economy of the domestic textile and apparel

13 industry.

14 SEC. 5. TEXTILE AND APPAREL QUOTA LEVELS.

15 (a) FOR COUNTRIES THAT ARE NOT WTO MEMBERS

16 AND DO NOT HAVE TEXTILE AGREEMENTS WITH THE

17 UNITED STATES.—

18 (1) IF EXPORTS TO THE UNITED STATES EX19 CEED $100,000,000 ANNUALLY OR ARE CREATING SE20 RIOUS DAMAGE OR ACTUAL THREAT THEREOF.—The

21 Trade Representative shall take the necessary steps

22 to negotiate an agreement, in accordance with para23 graph (2), between the United States and any coun24 try that—
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1 (A) is not a WTO member and is not a

2 country to which section 3(a) applies,

3 (B) is not a party to a textile agreement

4 with the United States, and

5 (C) whose exports to the United States of

6 textile and apparel goods are valued at more

7 than $100,000,000 in the most recent 12-

8 month period ending on the last day of the pre9 ceding month, or are creating serious damage

10 or actual threat thereof to the domestic indus11 try in the United States in any textile category

12 established by CITA.

13 (2) CONTENTS OF AGREEMENTS.—It is the

14 sense of the Congress that an agreement negotiated

15 with a country under paragraph (1) should establish

16 maximum amounts of textile and apparel products of

17 that country that may be imported into the United

18 States that do not exceed—

19 (A) in the first 12-month period that the

20 agreement is in effect, an increase of more than

21 8 percent of the total volume in square meter

22 equivalents of all textile and apparel products of

23 that country imported in the 12-month period

24 ending on the date the negotiations began; and
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1 (B) in each subsequent 12-month period

2 that the agreement is in effect, an increase of

3 more than the percentage of growth in the do4 mestic market in the United States for all tex5 tile and apparel products in the preceding 12-

6 month period.

7 (3) INCLUSION OF OTHER PROVISIONS.—Those

8 provisions required to be included in an agreement

9 under section 3(b) may be included in the agreement

10 negotiated under this subsection.

11 (4) DETERMINATIONS OF SERIOUS DAMAGE OR

12 ACTUAL THREAT THEREOF.—CITA shall make the

13 determinations of serious damage or actual threat

14 thereof referred to in paragraph (2), using the cri15 teria set forth in paragraph 3 of Article 6 of the

16 Agreement on Textiles and Clothing.

17 (b) FOR COUNTRIES THAT ARE NOT WTO MEMBERS

18 AND HAVE TEXTILE AGREEMENTS WITH THE UNITED

19 STATES.—In the case of a country that is not a WTO

20 member but is a party to a textile agreement with the

21 United States, the Trade Representative shall take the

22 necessary steps to negotiate a textile agreement to go into

23 effect when the current agreement expires, that allows im24 ports of textile and apparel products of that country, dur25 ing each 12-month period that the agreement is in effect,
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1 to increase by not more than the percentage of growth

2 in the domestic market in the United States for all textile

3 and apparel products in the preceding 12-month period.

4 (c) FOR COUNTRIES THAT ARE ACCEDING TO THE

5 WTO.—In any case in which the United States negotiates

6 a protocol for accession to the WTO under section 3(a),

7 the Trade Representative shall negotiate for inclusion in

8 that protocol provisions that require that the 10-year pe9 riod provided in the Agreement on Textiles and Clothing

10 for phasing out of quotas under that Agreement begin,

11 with respect to that country, on the day on which that

12 country accedes to the WTO.

13 SEC. 6. CIRCUMVENTION OF TEXTILE AGREEMENTS.

14 (a) POLICY FOR COUNTRIES THAT ARE NOT WTO

15 MEMBERS.—In the case of any country that is not a WTO

16 member and—

17 (1) is negotiating a protocol with the United

18 States for that country’s accession to the World

19 Trade Organization,

20 (2) is a party to a bilateral agreement with the

21 United States that governs imports into the United

22 States of textile and apparel products of that coun23 try, or

24 (3) is a country with which the United States

25 is negotiating an agreement under section 5(a),
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1 the Trade Representative shall ensure that the protocol

2 under paragraph (1), a subsequent agreement to replace

3 the agreement under paragraph (2) when it expires, or

4 the agreement described in paragraph (3), as the case may

5 be, provides for a reduction in the quantity of textile and

6 apparel goods of that country that may be imported into

7 the United States if CITA determines that the agreement

8 is being circumvented and that no, or inadequate meas9 ures, are being applied by that country to take action

10 against such circumvention. Any determination by CITA

11 under the preceding sentence shall be made in accordance

12 with the standards set forth in section 8.

13 (b) DEFINITIONS.—For purposes of this section, a

14 reduction in a country’s textile and apparel quotas is a

15 reduction in quantitative limitations otherwise applicable

16 to imports into the United States of that country’s textile

17 and apparel products that is equal to—

18 (1) the quantity of the goods involved in the

19 circumvention if the circumvention is the first within

20 the most recent 36-month period;

21 (2) twice the quantity of goods involved in the

22 circumvention if the circumvention is the second in

23 the most recent 36-month period; or
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1 (3) three times the quantity of goods involved

2 in the circumvention if the circumvention is the

3 third or more in the most recent 36-month period.

4 (c) POLICY FOR WTO MEMBERS.—In any case in

5 which a WTO member is found by CITA to have cir6 cumvented the Agreement on Textiles and Clothing or any

7 other textile agreement, CITA shall pursue the maximum

8 penalty consistent with the WTO.

9 SEC. 7. CUSTOMS ENFORCEMENT ACTION.

10 (a) SHARING OF CUSTOMS INFORMATION WITH

11 CITA.—The Customs Service shall, upon initiating an in12 vestigation relating to a violation of the laws of the United

13 States governing international trade in textile and apparel

14 goods, inform CITA of the investigation in any case in

15 which the alleged violation, if true, would constitute a cir16 cumvention of any textile agreement. In any such case,

17 the Customs Service shall provide to CITA—

18 (1) all information CITA requests that is rel19 evant to the alleged violation and required in order

20 for CITA to pursue a charge against the quotas on

21 imports of textile and apparel products of that coun22 try as a result of the violation; and

23 (2) notification, at least every 30 days until the

24 investigation is referred to the Department of Jus-
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1 tice or the Customs Service closes the investigation,

2 of the progress of the investigation.

3 (b) FACTORS IN PROCEEDING WITH CHARGES

4 AGAINST QUOTAS.—In deciding whether to pursue a

5 charge described in subsection (a) as a result of an alleged

6 violation described in subsection (a), CITA, in addition to

7 any other relevant factors which CITA may consider, shall

8 weigh the impact of proceeding with such charge on poten9 tial prosecutions or civil penalties and future enforcement

10 of textile agreements, and shall consider the amount of

11 the alleged violation, the probability of successful criminal

12 prosecution, the degree of compliance by the true country

13 of origin with textile agreements, and the damage the al14 leged violation would inflict on the domestic textile and

15 apparel industry.

16 (c) DECISION NOT TO PURSUE A CHARGE.—In any

17 case in which CITA decides under subsection (b) not to

18 pursue a charge, the Customs Service shall, as long as

19 that decision is in effect, report to CITA, in lieu of the

20 reports under subsection (a)(2)—

21 (1) at least once every 6 months from the date

22 on which the Customs Service initiated the case, on

23 the status of the investigation; and
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1 (2) within 10 business days after the Customs

2 Service obtains new information or evidence materi3 ally relevant to the alleged violation.

4 (d) STANDING NOT PROVIDED.—Nothing in this Act

5 shall be construed to provide standing in any court or ad6 ministrative proceeding for legal action against the United

7 States arising from actions taken in carrying out the laws

8 governing trade in textile or apparel goods.

9 (e) REFERRAL OF CASES TO DEPARTMENT OF JUS10 TICE.—In any case in which—

11 (1) the Customs Service refers an alleged viola12 tion described in subsection (a) to the Department

13 of Justice for prosecution, and

14 (2) no indictment has been brought in the case

15 within 6 months after the referral,

16 the Attorney General shall provide to CITA all informa17 tion relevant to imposing a charge against the quotas on

18 imports of textile and apparel products of the country con19 cerned as a result of the violation. CITA may extend the

20 6-month period referred to in paragraph (2) if requested

21 to do so by the Attorney General.

22 (f) DISCLOSURE OF CERTAIN CONFIDENTIAL INFOR23 MATION NOT REQUIRED.—Nothing in this section shall

24 be construed to require the disclosure by the Customs

25 Service or the Department of Justice of confidential infor-
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1 mation relevant to possible imposition of criminal or civil

2 penalties when that information is not relevant to the im3 position of a charge by CITA against the quotas on im4 ports of textile and apparel products of a country.

5 (g) INITIATION OF INVESTIGATIONS.—

6 (1) BASIS FOR INITIATION.—Subject to para7 graph (2), whenever the Customs Service receives

8 credible evidence that circumvention of a textile

9 agreement has occurred, the Customs Service shall

10 initiate an investigation, to which a customs officer

11 shall be assigned, to determine if such circumvention

12 has occurred, unless such evidence is directly related

13 to an open investigation commenced prior to the re14 ceipt of such evidence.

15 (2) WAIVER.—The head of the Division of Tex16 tile Enforcement established under section 10 may

17 determine not to initiate an investigation under

18 paragraph (1) if he or she transmits to CITA a re19 port setting forth the reasons for that determination.

20 SEC. 8. STANDARDS OF PROOF.

21 (a) IN GENERAL.—CITA may determine that a coun22 try has circumvented a textile agreement if CITA deter23 mines, after consultations with the country concerned,

24 that there is a substantial likelihood that the circumven25 tion occurred.
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1 (b) FAILURE OF COUNTRY TO COOPERATE.—

2 (1) RELIANCE ON BEST AVAILABLE INFORMA3 TION.—If a country fails to cooperate with CITA in

4 an investigation to determine if a textile agreement

5 has been circumvented, CITA shall base its deter6 mination on the best available information.

7 (2) ACTS CONSTITUTING FAILURE TO COOPER8 ATE.—Acts indicating failure of a country to cooper9 ate under paragraph (1) include, but are not limited

10 to—

11 (A) denying entry of officials of the Cus12 toms Service to investigate violations of, or pro13 mote compliance with, any textile agreement;

14 (B) providing appropriate United States

15 officials with inaccurate or incomplete informa16 tion, including information demonstrating com17 pliance with United States rules of origin for

18 textile and apparel products; and

19 (C) denying appropriate United States offi20 cials access to information or documentation re21 lating to production capacity of, and outward

22 processing done by, manufacturers within the

23 country.
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1 SEC. 9. PENALTIES FOR VIOLATIONS OF CUSTOMS LAWS IN2 VOLVING TEXTILE AND APPAREL GOODS.

3 (a) PENALTIES.—Section 592 of the Tariff Act of

4 1930 (19 U.S.C. 1592) is amended by adding at the end

5 the following:

6 ‘‘(g) PENALTIES INVOLVING TEXTILE AND APPAREL

7 GOODS.—

8 ‘‘(1) FRAUD.—Notwithstanding subsection (c),

9 the civil penalty for a fraudulent violation of sub10 section (a) involving textile and apparel goods—

11 ‘‘(A) shall, subject to subparagraph (B), be

12 double the amount that would otherwise apply

13 under subsection (c)(1); and

14 ‘‘(B) shall be an amount not to exceed 300

15 percent of the declared value in the United

16 States of the merchandise if the violation has

17 the effect of circumventing any quota on textile

18 and apparel goods.

19 ‘‘(2) GROSS NEGLIGENCE.—Notwithstanding

20 subsection (c), the civil penalty for a grossly neg21 ligent violation of subsection (a) involving textile and

22 apparel goods—

23 ‘‘(A) shall, subject to subparagraphs (B)

24 and (C), be double the amount that would oth25 erwise apply under subsection (c)(2);
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1 ‘‘(B) shall, if the violation has the effect of

2 circumventing any quota of the United States

3 on textile and apparel goods, and subject to

4 subparagraph (C), be 200 percent of the de5 clared value of the merchandise; and

6 ‘‘(C) shall, if the violation is a third or

7 subsequent offense occurring within 3 years

8 after another violation under this paragraph, be

9 the penalty for a fraudulent violation under

10 paragraph (1).

11 ‘‘(3) NEGLIGENCE.—Notwithstanding sub12 section (c), the civil penalty for a negligent violation

13 of subsection (a) involving textile and apparel

14 goods—

15 ‘‘(A) shall, subject to subparagraphs (B)

16 and (C), be double the amount that would oth17 erwise apply under subsection (a)(3);

18 ‘‘(B) shall, if the violation has the effect of

19 circumventing any quota of the United States

20 on textile and apparel goods, and subject to

21 subparagraph (C), be 100 percent of the de22 clared value of the merchandise; and

23 ‘‘(C) shall, if the violation is a third or

24 subsequent offense occurring within 3 years

25 after another violation under this paragraph, be
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1 the penalty for a grossly negligent violation

2 under paragraph (2).

3 ‘‘(4) MITIGATION.—In the case of a violation of

4 subsection (a) involving textile and apparel goods—

5 ‘‘(A) paragraph (4) of subsection (c) shall

6 apply only if the disclosure under such sub7 section is made within 180 days after the entry

8 of the goods, and the reference to subsection (c)

9 in that paragraph shall be deemed to refer to

10 paragraph (1), (2), or (3) of this subsection, as

11 the case may be;

12 ‘‘(B) in the case of disclosure made after

13 the end of that 180-day period, the penalty that

14 would apply under paragraph (1), (2), or (3)

15 may be reduced, but to not less than 50 percent

16 of the penalty that would otherwise apply under

17 paragraph (1), (2), or (3); and

18 ‘‘(C) no reduction in penalties may be

19 made in the case of a disclosure of a violation

20 by a person found guilty of 3 prior violations

21 under paragraph (3) or 2 prior violations under

22 paragraph (1) or (2), or both.’’.

23 (b) SEIZURE AND FORFEITURE.—Section 596(c)(2)

24 of the Tariff Act of 1930 (19 U.S.C. 15951(c)(2)) is

25 amended—
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1 (1) in subparagraph (E) by striking ‘‘or’’ after

2 the semicolon;

3 (2) in subparagraph (F) by striking the period

4 and inserting ‘‘; or’’; and

5 (3) by inserting after subparagraph (F) the fol6 lowing:

7 ‘‘(G) consists of textile or apparel goods in8 troduced into the United States for entry, tran9 sit, or exportation and

10 ‘‘(i) the merchandise or its container

11 bears false or fraudulent markings with re12 spect to the country of origin; or

13 ‘‘(ii) the merchandise or its container

14 is introduced or attempted to be intro15 duced into the United States by means of,

16 or such introduction or attempt is aided or

17 facilitated by means of, a material false

18 statement, act, or omission.’’.

19 (c) CERTIFICATES OF ORIGIN.—All importations of

20 textile and apparel goods shall be accompanied, in addition

21 to any other documentation required by law, by—

22 (1)(A) the name and address of the manufac23 turer or producer of the goods, and any other infor24 mation with respect to the manufacturer or producer

25 that the Customs Service may require; and
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1 (B) if there is more than one manufacturer or

2 producer, or there is a contractor or subcontractor

3 of the manufacturer or producer with respect to the

4 manufacture or production of the goods, the infor5 mation required under subparagraph (A) with re6 spect to each such manufacturer, producer, contrac7 tor, or subcontractor, including a description of the

8 process performed by each such entity; and

9 (2) a certification by the importer that the im10 porter has used reasonable care to ascertain the true

11 country of origin of the textile and apparel goods

12 and the accuracy of all other information provided

13 on the documentation accompanying the imported

14 goods, as well as a certification of the specific action

15 taken by the importer to demonstrate reasonable

16 care for purposes of this paragraph.

17 Information provided under this subsection shall be suffi18 cient to demonstrate compliance with the United States

19 rules of origin for textile and apparel goods.

20 SEC. 10. DIVISION ON TEXTILE ENFORCEMENT.

21 (a) ESTABLISHMENT.—The Commissioner of Cus22 toms shall, not later than 6 months after the date of the

23 enactment of this Act, establish in the Customs Service

24 a Division on Textile Enforcement (hereafter in this sec25 tion referred to as the ‘‘DTE’’), using existing resources
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1 available to the Customs Service. The head of the DTE

2 shall be an officer of the Customs Service in a position

3 at the level of an Assistant Commissioner of Customs.

4 (b) FUNCTIONS.—The DTE shall be responsible for

5 enforcing all laws of the United States, and all bilateral

6 and multilateral treaties and agreements, governing the

7 importation of textile and apparel goods, that the Customs

8 Service is responsible for enforcing.

9 (c) PERSONNEL.—The Commissioner of Customs

10 shall assign personnel to the DTE who have expertise in

11 textile and apparel goods, including, but not limited to,

12 import specialists, investigators, attorneys, accountants,

13 laboratory technicians, and members of the textile produc14 tion verification teams.

15 (d) SUBDIVISIONS.—The DTE shall establish a sepa16 rate subdivision for each geographic region which is a

17 major source of textile and apparel goods imported into

18 the United States, including a subdivision for each of the

19 following:

20 (1) The Far East.

21 (2) South Asia.

22 (3) South America.

23 (4) Central America and the Caribbean.

24 (5) The Middle East and Africa.

25 (e) ASSIGNMENTS ABROAD.—
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1 (1) TO CERTAIN COUNTRIES.—If permitted by

2 the host country, at least 1 customs officer shall be

3 assigned in each country, other than Canada or

4 Mexico, whose annual exports to the United States

5 of textile and apparel goods equal or exceed

6 500,000,000 square meter equivalents. Each such

7 customs officer shall be responsible only for matters

8 relating to exports to the United States of textile

9 and apparel goods.

10 (2) RESPONSIBILITY OF SECRETARY OF

11 STATE.—The Secretary of State shall take the nec12 essary steps to facilitate the assignment abroad of

13 customs officers under paragraph (1), by seeking to

14 obtain the approval of the foreign governments con15 cerned for such assignments.

16 (f) REPORTS.—

17 (1) REPORTS BY CUSTOMS OFFICERS.—Each

18 customs officer assigned under subsection (e)(1)

19 shall prepare and submit to the Commissioner of

20 Customs, at least monthly, reports summarizing his

21 or her activities, assessing the compliance with appli22 cable textile agreements by the country concerned,

23 and assessing the intellectual property protection

24 provided to textile and apparel goods in that coun25 try.
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1 (2) REPORTS BY DTE.—The DTE shall prepare

2 and submit to the Commissioner an annual report—

3 (A) evaluating the extent of circumvention

4 of textile agreements with the United States,

5 the extent of compliance with the rules of origin

6 of the United States relating to textile and ap7 parel goods, the extent to which countries act in

8 compliance with Article XX of the GATT 1994

9 (as defined in section 2 of the Uruguay Round

10 Agreements Act (19 U.S.C. 3501)) with respect

11 to textile and apparel goods, and the adequacy

12 of intellectual property protection provided to

13 textile and apparel goods; and

14 (B) recommending new methods, if nec15 essary, to address the matters evaluated under

16 subparagraph (A).

17 (3) AVAILABILITY OF REPORTS.—Each report

18 submitted under this subsection shall be made avail19 able to appropriate agencies of the executive branch,

20 including the Office of Textiles, Apparel, and

21 Consumer Goods of the Department of Commerce.

22 SEC. 11. WITHDRAWAL OF UNILATERAL TRADE CONCES23 SIONS.

24 (a) WITHDRAWAL OF CONCESSIONS.—In any case in

25 which—
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1 (1) CITA determines that a country—

2 (A) has demonstrated a consistent pattern

3 of circumventing textile agreements with the

4 United States,

5 (B) refuses to cooperate with investigations

6 by the United States of any such alleged cir7 cumvention,

8 (C) fails to provide adequate enforcement

9 of intellectual property rights with respect to

10 textile and apparel goods, or

11 (D) fails to provide fair and equitable mar12 ket access for textile and apparel products of

13 the United States, and

14 (2) the United States extends to the products

15 of that country preferential tariff or quota treatment

16 other than pursuant to a bilateral or multilateral

17 agreement,

18 then such preferential treatment shall be withdrawn from

19 the textile and apparel goods that are products of that

20 country for such period as shall be determined by the

21 Trade Representative, in consultation with CITA.

22 (b) NATIONAL INTEREST WAIVER.—The President

23 may waive the application of subsection (a) with respect

24 to a country if the President determines that the waiver

25 will allow the United States to secure effective commit-
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1 ments from that country to prevent future circumvention

2 of textile agreements with the United States, or is other3 wise in the national interest. The President shall publish

4 any such waiver, and the reasons for the waiver, in the

5 Federal Register.

6 SEC. 12. DEFINITIONS.

7 As used in this Act:

8 (1) AGREEMENT ON TEXTILES AND CLOTH9 ING.—The term ‘‘Agreement on Textiles and Cloth10 ing’’ means the Agreement on Textiles and Clothing

11 referred to in section 101(d)(4) of the Uruguay

12 Round Agreements Act (19 U.S.C. 3511(d)(4)).

13 (2) CIRCUMVENT AND CIRCUMVENTION.—The

14 terms ‘‘circumvent’’ and ‘‘circumvention’’ refer to a

15 situation in which a country—

16 (A) takes no, or inadequate measures to

17 prevent illegal transshipment of goods that is

18 carried out by rerouting, false declaration con19 cerning country or place of origin, falsification

20 of official documents, evasion of United States

21 rules of origin for textile and apparel goods, or

22 any other means; or

23 (B) takes no or inadequate measures to

24 prevent being used as a transit point for the
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1 shipment of goods in violation of an applicable

2 textile agreement.

3 (3) CITA.—The term ‘‘CITA’’ means the Com4 mittee for the Implementation of Textile Agreements

5 established under Executive Order 11651 of March

6 3, 1972 (7 U.S.C. 1854 note), or any successor en7 tity or officer performing functions of that commit8 tee after the enactment of this Act.

9 (4) COUNTRY.—The term ‘‘country’’ includes a

10 separate customs territory, within the meaning of

11 Article XII of the WTO Agreement or other applica12 ble international agreement.

13 (5) CUSTOMS SERVICE.—The term ‘‘Customs

14 Service’’ means the United States Customs Service.

15 (6) MULTIFIBER ARRANGEMENT.—The term

16 ‘‘Multifiber Arrangement’’ means the Arrangement

17 Regarding International Trade in Textiles referred

18 to in Article 1(3) of the Agreement on Textiles and

19 Clothing.

20 (7) TEXTILE AGREEMENT; TEXTILE AGREE21 MENT WITH THE UNITED STATES.—The terms ‘‘tex22 tile agreement’’ and ‘‘textile agreement with the

23 United States’’ mean an agreement relating to tex24 tile and apparel goods that is negotiated under sec25 tion 204 of the Agricultural Act of 1956 (7 U.S.C.
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1 1854), including the Agreement on Textiles and

2 Clothing.

3 (8) TRADE REPRESENTATIVE.—The term

4 ‘‘Trade Representative’’ means the United States

5 Trade Representative.

6 (9) WORLD TRADE ORGANIZATION AND WTO.—

7 The terms ‘‘World Trade Organization’’ and

8 ‘‘WTO’’ mean the organization established pursuant

9 to the WTO Agreement.

10 (10) WTO AGREEMENT.—The term ‘‘WTO

11 Agreement’’ means the Agreement Establishing the

12 World Trade Organization entered into on April 15,

13 1994.

14 (11) WTO MEMBER.—The term ‘‘WTO mem15 ber’’ means a state, or separate customs territory

16 (within the meaning of Article XII of the WTO

17 Agreement).

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