I

104TH CONGRESS

2D SESSION H. R. 3987

To establish an Emergency Commission To End the Trade Deficit.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 2, 1996

Ms. KAPTUR introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To establish an Emergency Commission To End the Trade

Deficit.

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 ‘‘End the Trade Deficit

5 Act’’.

6 SEC. 2. FINDINGS.

7 The Congress makes the following findings:

8 (1) The United States has had 2 decades of

9 consecutive annual merchandise trade deficits, total10 ing $1,793,100,000,000.
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1 (2) In 1995, the United States had the largest

2 negative trade balance in its history. Economic fore3 casters estimate that the 1995 trade deficit of

4 $174,556,000,000 may be topped by new records in

5 the next few years.

6 (3) Private economic forecasts now project that

7 the trade deficit will nearly double within the next

8 10 to 15 years.

9 (4) The positive net international asset position

10 that the United States built up over 100 years was

11 eliminated in the 1980s. The United States today

12 has become the world’s largest debtor nation, with a

13 net debt of over three-quarters of a trillion dollars.

14 (5) Together with the record trade deficit this

15 past year, the value of the United States dollar fell

16 to its weakest level in history. This devaluation re17 flects an erosion of the United States sovereignty

18 and economy.

19 (6) The United States trade deficit is character20 ized by large bilateral trade imbalances with a hand21 ful of countries. Six countries (Japan, China, Can22 ada, Mexico, Germany, and Taiwan) comprise 94

23 percent of the United States trade deficit. Japan

24 and China account for over one-half of the United

25 States trade deficit.
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1 (7) Today the United States trade deficit pri2 marily consists of high technology and manufactured

3 items. Automobiles, office machines, electronic

4 goods, and telecommunications equipment now com5 prise nearly three-fourths of the trade deficit. Im6 ports of manufactured goods have increased from 11

7 percent of the United States manufacturing gross

8 domestic product in 1970 to over 50 percent in

9 1995.

10 (8) While the United States has one of the

11 most open borders and economies in the world, the

12 United States faces significant trade barriers with

13 its trading partners. Current overall trade balances

14 do not reflect the actual competitiveness or produc15 tivity of the United States economy. Reciprocal mar16 ket access remains an elusive goal as documented in

17 the annual reports of the United States Trade Rep18 resentative.

19 (9) Since the last comprehensive review of na20 tional trade and investment policies was conducted

21 by a Presidential commission in 1970, there have

22 been massive worldwide economic and political

23 changes which have profoundly affected world trad24 ing relationships. The cold war has ended. It is no

25 longer necessary or prudent for United States trade
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1 policy to be a residual of United States foreign pol2 icy. Globalization together with the increased mobil3 ity of capital and technology is reshaping both com4 parative and competitive trade advantages among

5 nations.

6 (10) The United States is once again at a criti7 cal juncture in trade policy development. The per8 sistent growth of the United States trade deficit

9 must be reversed. The causes and consequences of

10 the trade deficit must be identified and a plan must

11 be developed to eliminate the trade deficit within the

12 next 10 years.

13 SEC. 3. ESTABLISHMENT OF COMMISSION.

14 (a) ESTABLISHMENT.—There is established a com15 mission to be known as the Emergency Commission To

16 End the Trade Deficit (hereafter in this Act referred to

17 as the ‘‘Commission’’).

18 (b) PURPOSE.—The purpose of the Commission is to

19 develop a trade policy plan to eliminate the United States

20 merchandise trade deficit by the year 2006 and to develop

21 a competitive trade policy for the 21st century. The plan

22 shall include strategies necessary to achieve a balance of

23 trade that fully reflects the competitiveness and productiv24 ity of the United States and also improves the standard

25 of living of United States citizens.
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1 (c) MEMBERSHIP OF COMMISSION.—

2 (1) COMPOSITION.—The Commission shall be

3 composed of 11 members of whom—

4 (A) 3 shall be appointed by the President;

5 (B) 1 Senator and 1 other person shall be

6 appointed by the President pro tempore of the

7 Senate upon the recommendation of the major8 ity leader of the Senate;

9 (C) 1 Senator and 1 other person shall be

10 appointed by the President pro tempore of the

11 Senate upon the recommendation of the minor12 ity leader of the Senate;

13 (D) 1 Member of the House of Representa14 tives and 1 other person shall be appointed by

15 the Speaker of the House of Representatives;

16 and

17 (E) 1 Member of the House of Representa18 tives and 1 other person shall be appointed by

19 the minority leader of the House of Representa20 tives.

21 (2) QUALIFICATIONS OF MEMBERS.—

22 (A) PRESIDENTIAL APPOINTMENTS.—Of

23 the persons appointed under paragraph (1)(A),

24 not more than 1 may be an officer, employee,

25 or paid consultant of the executive branch.
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1 (B) OTHER APPOINTMENTS.—Persons who

2 are not Members of Congress, appointed under

3 subparagraph (B), (C), (D), or (E) of para4 graph (1), shall be persons who—

5 (i) are experts in economics, distin6 guished academics, environmentalists, jour7 nalists, State or local government officials,

8 or have other pertinent qualifications or

9 experience; and

10 (ii) are not officers or employees of

11 the United States.

12 (C) OTHER CONSIDERATIONS.—In appoint13 ing Commission members, every effort shall be

14 made to ensure that the members—

15 (i) are representative of a broad cross16 section of economic and trade perspectives

17 within the United States; and

18 (ii) provide fresh insights to achieving

19 a trade deficit reduction plan.

20 (d) PERIOD OF APPOINTMENT; VACANCIES.—

21 (1) IN GENERAL.—Members shall be appointed

22 not later than 60 days after the date of the enact23 ment of this Act and the appointment shall be for

24 the life of the Commission.
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1 (2) VACANCIES.—Any vacancy in the Commis2 sion shall not affect its powers, but shall be filled in

3 the same manner as the original appointment.

4 (e) INITIAL MEETING.—Not later than 30 days after

5 the date on which all members of the Commission have

6 been appointed, the Commission shall hold its first meet7 ing.

8 (f) MEETINGS.—The Commission shall meet at the

9 call of the Chairperson.

10 (g) CHAIRPERSON AND VICE CHAIRPERSON.—The

11 members of the Commission shall elect a chairperson and

12 vice chairperson from among the members of the Commis13 sion.

14 (h) QUORUM.—A majority of the members of the

15 Commission shall constitute a quorum for the transaction

16 of business.

17 (i) VOTING.—Each member of the Commission shall

18 be entitled to 1 vote, which shall be equal to the vote of

19 every other member of the Commission.

20 SEC. 4. DUTIES OF THE COMMISSION.

21 (a) IN GENERAL.—The Commission shall be respon22 sible for developing a comprehensive trade policy plan, by

23 examining the economic policies, trade, tax, and invest24 ment laws, and other legal incentives and restrictions that

25 are relevant to reducing the United States trade deficit.
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1 (b) RECOMMENDATIONS.—The Commission shall ex2 amine and make recommendations to the Congress and

3 the President on the following:

4 (1) The manner in which the Government of

5 the United States establishes and administers the

6 Nation’s fundamental trade policies and objectives,

7 including—

8 (A) the relationship of the merchandise

9 trade balance to the overall well-being of the

10 United States economy and in particular the

11 impact the trade balance has on wages and em12 ployment in various sectors of the United

13 States economy;

14 (B) the relationship of United States for15 eign policy objectives to trade policy and the ex16 tent to which foreign policy considerations re17 ceive a priority over trade objectives;

18 (C) the extent to which United States

19 monetary policies and the need for foreign cap20 ital to finance the current account deficit influ21 ence trade objectives;

22 (D) the coordination, allocation, and ac23 countability of trade responsibilities among

24 Federal agencies; and
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1 (E) the methods for improving and en2 hancing systematic congressional review of for3 eign policy and trade policy as part of a plan

4 to establish a coordinated set of national eco5 nomic priorities.

6 (2) The causes and consequences of both the

7 overall trade deficit and specific bilateral trade defi8 cits, including—

9 (A) identification and quantification of the

10 macroeconomic, sectoral, and bilateral trade

11 factors contributing to the United States trade

12 deficit with various countries;

13 (B) identification and quantification of the

14 impact of the trade deficit on the domestic

15 economy, industrial base, manufacturing capac16 ity, number and quality of jobs, productivity,

17 wages, health, safety, and environmental stand18 ards, and the United States standard of living;

19 (C) identification and quantification of in20 dividual industrial, manufacturing, and produc21 tion sectors, and intraindustry and

22 intracompany transactions which contribute to

23 or are impacted by United States trade deficits;

24 (D) a review of the adequacy of the cur25 rent collection and reporting of trade data, and
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1 the identification and development of additional

2 data bases and economic measurements that

3 may be needed to properly quantify the factors

4 described in subparagraphs (A), (B), and (C);

5 (E) the extent to which United States tax

6 laws, such as income deferral, contribute to the

7 movement of manufacturing facilities and jobs

8 to foreign locations;

9 (F) the relationship that tariff and non10 tariff barriers have to trade deficits and the ex11 tent to which trade deficits have become struc12 tural;

13 (G) the extent to which there is reciprocal

14 market access in each country with which the

15 United States has a persistent and substantial

16 bilateral trade deficit; and

17 (H) the role of transhipments on bilateral

18 trade, including foreign imports and exports,

19 with special attention to transhipments under

20 the North American Free Trade Agreement.

21 (3) The relationship of United States trade

22 deficits to both comparative and competitive trade

23 advantages within the global economy, including—

24 (A) a systematic analysis of the United

25 States trade patterns with different trading
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1 partners, to what extent the trade patterns are

2 based on comparative and competitive trade ad3 vantages, and how the trade advantages relate

4 to the goods that are exported to and imported

5 from various trading partners;

6 (B) the extent to which the increased mo7 bility of capital and technology has changed

8 both comparative and competitive trade advan9 tages;

10 (C) identification and quantification of

11 goods imported into the United States which

12 are produced by child and forced labor, or

13 under social and environmental conditions that

14 do not comply with United States law;

15 (D) the impact that labor standards (in16 cluding the ability of labor to organize, bargain

17 collectively, and exercise human rights) have on

18 world trade;

19 (E) the impact that currency exchange

20 rates and the manipulation of exchange rates

21 have on world trade and trade deficits;

22 (F) the effect that offset and technology

23 transfer agreements have on the long-term com24 petitiveness of the United States manufacturing

25 sectors; and
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1 (G) the extent to which international

2 agreements impact on United States competi3 tiveness.

4 (4) The flow of investments both into and out

5 of the United States, including—

6 (A) the impact such investments have on

7 the United States trade deficit and living stand8 ards of United States production workers;

9 (B) the impact such investments have on

10 United States labor, community, environmental,

11 health, and safety standards;

12 (C) the identification and quantification of

13 domestic plant closures and the movement of

14 such plants to foreign locations for production

15 of goods for the United States market;

16 (D) the effect of investment flows on

17 wages in countries with developed economies

18 and on countries of the former Soviet Union;

19 and

20 (E) the effect of barriers to United States

21 foreign direct investment in developed and de22 veloping nations, particularly nations with

23 which the United States has a trade deficit.

24 (5) Evaluation of current policies and sugges25 tions for alternative strategies for the United States
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1 to systematically reduce the trade deficit and im2 prove the economic well-being of United States citi3 zens, including suggestions for—

4 (A) the development of bilateral and multi5 lateral trade relationships based on market ac6 cess reciprocity;

7 (B) the retention of manufacturing, agri8 cultural, and production sectors in the United

9 States which are vital to the economy and secu10 rity of the United States;

11 (C) the discouragement of the expatriation

12 of United States plants, jobs, and production to

13 nations that have achieved competitive advan14 tages by permitting lower wages or lower

15 health, safety, and environmental standards, or

16 by imposing requirements with respect to in17 vestment, performance, or other obligations;

18 (D) methods by which the United States

19 can effectively compete in a global economy

20 while improving the labor, social, and environ21 mental standards of its trading partners, par22 ticularly developing nations;

23 (E) methods by which the United States

24 can respond to substantial shifts or manipula-
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1 tion of currency exchange rates which distort

2 trade relationships;

3 (F) methods for overcoming and offsetting

4 trade barriers which are either not subject to or

5 otherwise inadequately addressed by the World

6 Trade Organization or other multilateral ar7 rangements;

8 (G) specific strategies for achieving im9 proved trade balances with those nations that

10 the United States has significant, persistent

11 sectoral or bilateral trade deficits, including

12 Japan, China, Canada, Mexico, Germany, and

13 Taiwan;

14 (H) methods for the United States to re15 spond to the particular needs and cir16 cumstances of developing and developed nations

17 in a manner that is mutually beneficial; and

18 (I) changes that may be required to cur19 rent trade agreements and organizations to

20 allow the United States to pursue and nurture

21 economic growth for its manufacturing, agri22 culture, and other production sectors in a man23 ner that insures improved compensation and

24 quality of life for United States citizens.
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1 SEC. 5. FINAL REPORT; CONGRESSIONAL HEARINGS.

2 (a) FINAL REPORT.—

3 (1) IN GENERAL.—Not later than 16 months

4 after the date of the enactment of this Act, the

5 Commission shall submit to the President and the

6 Congress a final report which contains—

7 (A) the findings and conclusions of the

8 Commission described in section 4;

9 (B) a detailed plan for reducing both the

10 overall trade deficit and specific bilateral trade

11 deficits; and

12 (C) any recommendations for administra13 tive and legislative actions necessary to achieve

14 such reductions.

15 (2) SEPARATE VIEWS.—Any member of the

16 Commission may submit additional findings and rec17 ommendations as part of the final report.

18 (b) CONGRESSIONAL HEARINGS.—Not later than 6

19 months after the final report described in subsection (a)

20 is submitted, the Committee on Ways and Means of the

21 House of Representatives and the Committee on Finance

22 of the Senate shall hold hearings on the report.

23 SEC. 6. POWERS OF COMMISSION.

24 (a) HEARINGS.—The Commission may hold such

25 hearings, sit and act at such times and places, take such

26 testimony, and receive such evidence as the Commission
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1 may find advisable to fulfill the requirements of this Act.

2 The Commission shall hold at least 7 public hearings, 1

3 or more in Washington, D.C. and 4 in different regions

4 of the United States.

5 (b) INFORMATION FROM FEDERAL AGENCIES.—The

6 Commission may secure directly from any Federal depart7 ment or agency such information as the Commission con8 siders necessary to carry out the provisions of this Act.

9 Upon request of the Chairperson of the Commission, the

10 head of such department or agency shall furnish such in11 formation to the Commission.

12 (c) POSTAL SERVICES.—The Commission may use

13 the United States mails in the same manner and under

14 the same conditions as other departments and agencies of

15 the Federal Government.

16 (d) GIFTS.—The Commission may accept, use, and

17 dispose of gifts or donations of services or property.

18 SEC. 7. COMMISSION PERSONNEL MATTERS.

19 (a) COMPENSATION OF MEMBERS.—Each member of

20 the Commission who is not an officer or employee of the

21 Federal Government shall be compensated at a rate equal

22 to the daily equivalent of the annual rate of basic pay pre23 scribed for level IV of the Executive Schedule under sec24 tion 5315 of title 5, United States Code, for each day (in25 cluding travel time) during which such member is engaged
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1 in the performance of the duties of the Commission. All

2 members of the Commission who are officers or employees

3 of the United States shall serve without compensation in

4 addition to that received for their services as officers or

5 employees of the United States.

6 (b) TRAVEL EXPENSES.—The members of the Com7 mission shall be allowed travel expenses, including per

8 diem in lieu of subsistence, at rates authorized for employ9 ees of agencies under subchapter I of chapter 57 of title

10 5, United States Code, while away from their homes or

11 regular places of business in the performance of services

12 for the Commission.

13 (c) STAFF.—

14 (1) IN GENERAL.—The Chairperson of the

15 Commission may, without regard to the civil service

16 laws and regulations, appoint and terminate an exec17 utive director and such other additional personnel as

18 may be necessary to enable the Commission to per19 form its duties. The employment of an executive di20 rector shall be subject to confirmation by the Com21 mission.

22 (2) COMPENSATION.—The Chairperson of the

23 Commission may fix the compensation of the execu24 tive director and other personnel without regard to

25 the provisions of chapter 51 and subchapter III of
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1 chapter 53 of title 5, United States Code, relating

2 to classification of positions and General Schedule

3 pay rates, except that the rate of pay for the execu4 tive director and other personnel may not exceed the

5 rate payable for level V of the Executive Schedule

6 under section 5316 of such title.

7 (d) DETAIL OF GOVERNMENT EMPLOYEES.—Any

8 Federal Government employee may be detailed to the

9 Commission without reimbursement, and such detail shall

10 be without interruption or loss of civil service status or

11 privilege.

12 (e) PROCUREMENT OF TEMPORARY AND INTERMIT13 TENT SERVICES.—The Chairperson of the Commission

14 may procure temporary and intermittent services under

15 section 3109(b) of title 5, United States Code, at rates

16 for individuals which do not exceed the daily equivalent

17 of the annual rate of basic pay prescribed for level V of

18 the Executive Schedule under section 5316 of such title.

19 SEC. 8. AUTHORIZATION OF APPROPRIATIONS; GAO AUDIT.

20 (a) IN GENERAL.—There are authorized to be appro21 priated $2,000,000 to the Commission to carry out the

22 provisions of this Act.

23 (b) GAO AUDIT.—Not later than 6 months after ter24 mination of the Commission, the Comptroller General of

25 the United States shall complete an audit of the financial
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1 books and records of the Commission to determine that

2 the limitation on expenses has been met, and shall submit

3 a report on the audit to the President and the Congress.

4 SEC. 9. TERMINATION OF COMMISSION.

5 The Commission shall cease to exist 30 days after

6 the date on which the Commission submits the final report

7 under section 5.

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