I

104TH CONGRESS

1ST SESSION H. R. 465

To ensure that the Caribbean Basin Initiative is not adversely affected by

the implementation of the North American Free Trade Agreement and

to authorize entry into free trade agreements between the United States

and certain Caribbean Basin countries.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 11, 1995

Mr. GIBBONS introduced the following bill; which was referred to the

Committee on Ways and Means

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 authorize entry

into free trade agreements 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,

3 SECTION 1. SHORT TITLE.

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

5 Trade Agreements Act’’.
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1 SEC. 2. CONGRESSIONAL FINDINGS.

2 The Congress finds that the continuation and

3 strengthening of the commitment of the United States, as

4 expressed by the enactment of the Caribbean Basin Eco5 nomic Recovery Act and the Caribbean Basin Economic

6 Recovery Expansion Act of 1990, to the successful devel7 opment of the Caribbean region requires the enactment

8 of provisions—

9 (1) to encourage the continuation of structural

10 reform efforts by Caribbean countries toward market

11 economies and trade liberalization;

12 (2) to preserve existing economic advantages

13 under the Caribbean Basin Initiative program and

14 avoid the potential diversion of investment from ben15 eficiary countries under the program to Mexico as a

16 result of the North American Free Trade Agree17 ment;

18 (3) to maintain and increase trade benefits

19 under the Caribbean Basin Initiative program in

20 order to promote further economic development and

21 political stability in beneficiary countries and to ex22 pand United States export opportunities in the Car23 ibbean region; and

24 (4) to encourage and create further economic

25 integration in the Western Hemisphere through free

26 trade arrangements that provide United States busi-
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1 ness and labor reciprocal benefits through the re2 moval of barriers to trade and investment in goods

3 and services on a mutually advantageous basis.

4 TITLE I—RELATIONSHIP OF

5 NAFTA IMPLEMENTATION TO

6 THE OPERATION OF THE CAR7 IBBEAN BASIN INITIATIVE

8 SEC. 101. TEMPORARY PROVISIONS TO PROVIDE NAFTA

9 PARITY TO BENEFICIARY COUNTRY ECONO10 MIES.

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

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

13 2703(b)) is amended to read as follows:

14 ‘‘(b) IMPORT-SENSITIVE ARTICLES.—

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

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

17 this title does not apply to—

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

19 subject to textile agreements;

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

21 of the effective date of this title as eligible arti22 cles for the purpose of the generalized system

23 of preferences under title V of the Trade Act of

24 1974;
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1 ‘‘(C) tuna, prepared or preserved in any

2 manner, in airtight containers;

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

4 from petroleum, provided for in headings 2709

5 and 2710 of the Harmonized Tariff Schedule of

6 the United States;

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

8 cases, bracelets and straps), of whatever type

9 including, but not limited to, mechanical, quartz

10 digital or quartz analog, if such watches or

11 watch parts contain any material which is the

12 product of any country with respect to which

13 HTS column 2 rates of duty apply; or

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

15 duty apply under subsection (h).

16 ‘‘(2) NAFTA TRANSITION PERIOD TREATMENT

17 OF CERTAIN TEXTILE AND APPAREL ARTICLES.—

18 ‘‘(A) EQUIVALENT TARIFF AND QUOTA

19 TREATMENT.—During the transition period—

20 ‘‘(i) the tariff treatment accorded at

21 any time to any textile or apparel article

22 that originates in the territory of a bene23 ficiary country shall be identical to the tar24 iff treatment that is accorded during such

25 time under section 2 of the Annex to a like
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1 article that originates in the territory of

2 Mexico and is imported into the United

3 States;

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

5 title shall apply to any textile or apparel

6 article of a beneficiary country that is im7 ported into the United States and that—

8 ‘‘(I) meets the same require9 ments (other than assembly in Mex10 ico) as those specified in Appendix 2.4

11 of the Annex (relating to goods as12 sembled from fabric wholly formed

13 and cut in the United States) for the

14 duty free entry of a like article assem15 bled in Mexico; or

16 ‘‘(II) is identified under subpara17 graph (C) as a handloomed, hand18 made, or folklore article of such coun19 try and is certified as such by the

20 competent authority of such country;

21 and

22 ‘‘(iii) no quantitative restriction or

23 consultation level may be applied to the

24 importation into the United States of any

25 textile or apparel article that—
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1 ‘‘(I) originates in the territory of

2 a beneficiary country,

3 ‘‘(II) meets the same require4 ments (other than assembly in Mex5 ico) as those specified in Appendix

6 3.1.B.10 of the Annex (relating to

7 goods assembled from fabric wholly

8 formed and cut in the United States)

9 for the exemption of a like article as10 sembled in Mexico from United States

11 quantitative restrictions and consulta12 tion levels, or

13 ‘‘(III) qualifies for duty-free

14 treatment under clause (ii)(II).

15 ‘‘(B) NAFTA TRANSITION PERIOD TREAT16 MENT OF NONORIGINATING TEXTILE AND AP17 PAREL ARTICLES.—

18 ‘‘(i) PREFERENTIAL TARIFF TREAT19 MENT.—Subject to clause (ii), the United

20 States Trade Representative may place in

21 effect at any time during the transition pe22 riod with respect to any textile or apparel

23 article that—

24 ‘‘(I) is a product of a beneficiary

25 country; but
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1 ‘‘(II) does not qualify as a good

2 that originates in the territory of that

3 country;

4 tariff treatment that is identical to the

5 preferential tariff treatment that is ac6 corded during such time under Appendix

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

8 a product of Mexico and imported into the

9 United States.

10 ‘‘(ii) PRIOR CONSULTATION.—The

11 United States Trade Representative may

12 implement the preferential tariff treatment

13 described in clause (i) only after consulta14 tion with representatives of the United

15 States textile and apparel industry and

16 other interested parties regarding—

17 ‘‘(I) the specific articles to which

18 such treatment will be extended,

19 ‘‘(II) the annual quantity levels

20 to be applied under such treatment

21 and any adjustment to such levels,

22 ‘‘(III) the allocation of such an23 nual quantities among the beneficiary

24 countries that export the articles con25 cerned to the Untied States, and
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1 ‘‘(IV) any other applicable provi2 sion.

3 ‘‘(iii) ADJUSTMENT OF CERTAIN BI4 LATERAL TEXTILE AGREEMENTS.—The

5 United States Trade Representatives shall

6 undertake negotiations for purposes of

7 seeking appropriate reductions in the

8 quantities of textile and apparel articles

9 that are permitted to be imported into the

10 United States under bilateral agreements

11 with beneficiary countries in order to re12 flect the quantities of textile and apparel

13 articles of each respective country that are

14 exempt from quota treatment by reason of

15 paragraph (2)(A)(iii).

16 ‘‘(C) HANDLOOMED, HANDMADE, AND

17 FOLKLORE ARTICLES.—For purposes of sub18 paragraph (A), the United States Trade Rep19 resentative shall consult with representatives of

20 the beneficiary country for the purpose of iden21 tifying particular textile and apparel goods that

22 are mutually agreed upon as being handloomed,

23 handmade, or folklore goods of a kind described

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

25 3.1.B.11 of the Annex.
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1 ‘‘(D) BILATERAL EMERGENCY ACTIONS.—

2 The President may take—

3 ‘‘(i) bilateral emergency tariff actions

4 of a kind described in section 4 of the

5 Annex with respect to any textile or ap6 parel article imported from a beneficiary

7 country if the application of tariff treat8 ment under subparagraph (A) to such arti9 cle results in conditions that would be

10 cause for the taking of such actions under

11 such section 4 with respect to a like article

12 that is a product of Mexico; or

13 ‘‘(ii) bilateral emergency quantitative

14 restriction actions of a kind described in

15 section 5 of the Annex with respect to im16 ports of any textile or apparel article de17 scribed in subparagraph (B)(i) (I) and (II)

18 if the importation of such article into the

19 United States results in conditions that

20 would be cause for the taking of such ac21 tions under such section 5 with respect to

22 a like article that is a product of Mexico.

23 ‘‘(3) NAFTA TRANSITION PERIOD TREATMENT

24 OF CERTAIN OTHER ARTICLES ORIGINATING IN BEN25 EFICIARY COUNTRIES.—
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1 ‘‘(A) EQUIVALENT TARIFF TREATMENT.—

2 ‘‘(i) IN GENERAL.—Subject to clause

3 (ii), the tariff treatment accorded at any

4 time during the transition period to any

5 article referred to in any of subparagraphs

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

7 originates in the territory of a beneficiary

8 country shall be identical to the tariff

9 treatment that is accorded during such

10 time under Annex 302.2 of the NAFTA to

11 a like article that originates in the terri12 tory of Mexico and is imported into the

13 United States. Such articles shall be sub14 ject to the provisions for emergency action

15 under chapter 8 of part two of the NAFTA

16 to the same extent as if such articles were

17 imported from Mexico.

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

19 apply to any article accorded duty-free

20 treatment under U.S. Note 2(b) to sub21 chapter II of chapter 98 of the Har22 monized Tariff Schedule of the United

23 States.

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

25 DUTY REDUCTIONS.—If at any time during the
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1 transition period the rate of duty that would

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

3 in regard to such period) apply with respect to

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

5 duty that is lower than the rate of duty result6 ing from such action, then such lower rate of

7 duty shall be applied for the purposes of imple8 menting such action.

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

10 of chapter 5 of part two of the NAFTA regarding

11 customs procedures apply to importations under

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

13 countries.

14 ‘‘(5) DEFINITIONS.—As used in this sub15 section—

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

17 300–B of the NAFTA.

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

19 American Free Trade Agreement entered into

20 between the United States, Mexico, and Canada

21 on December 17, 1992.

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

23 means any article referred to in paragraph

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

25 the Annex.
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1 ‘‘(D) The term ‘transition period’ means,

2 with respect to a beneficiary country, the period

3 that begins on the date of the enactment of the

4 Caribbean Basin Free Trade Agreements Act

5 and ends on the earlier of—

6 ‘‘(i) the date that is the 3rd anniver7 sary of such date of enactment, or

8 ‘‘(ii) the date on which—

9 ‘‘(I) there enters into force with

10 respect to the United States a trade

11 agreement entered into under the au12 thority of section 202(a) of the Carib13 bean Basin Free Trade Agreements

14 Act and to which the beneficiary coun15 try is a party, or

16 ‘‘(II) the beneficiary country ac17 cedes to the NAFTA.

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

19 originated in the territory of a beneficiary coun20 try if the article meets the rules of origin for

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

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

23 applying such chapter 4 or Appendix 6.A with

24 respect to a beneficiary country for purposes of

25 this subsection, no countries other than the
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1 United States and beneficiary countries may be

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

3 (b) CONFORMING AMENDMENTS.—The Caribbean

4 Basin Economic Recovery Act is further amended—

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

6 as follows:

7 ‘‘(B) withdraw, suspend, or limit the appli8 cation of the duty-free treatment under this

9 subtitle, and the tariff and preferential tariff

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

11 any article of any country,’’; and

12 (2) by inserting ‘‘and except as provided in sec13 tion 213(b) (2) and (3),’’ after ‘‘Tax Reform Act of

14 1986,’’ in section 213(a)(1).

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

16 BENEFICIARY COUNTRIES.

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

18 the implementation of the North American Free Trade

19 Agreement has on the access of beneficiary countries

20 under the Caribbean Basin Economic Recovery Act to the

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

22 If the President considers that the implementation of the

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

24 manner the access of such countries to the United States

25 market, the President shall promptly—
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1 (1) take such actions, after consulting with in2 terested parties and with the appropriate committees

3 of the House of Representatives and the Senate; or

4 (2) propose to the Congress such legislative ac5 tions;

6 as may be necessary or appropriate to ameliorate such ad7 verse effect.

8 TITLE II—CARIBBEAN BASIN

9 FREE TRADE AGREEMENTS

10 SEC. 201. TRADE AGREEMENT FEASIBILITY AND OBJEC11 TIVES.

12 As soon as practicable, the United States Trade Rep13 resentative shall determine the desirability and feasibility

14 of, and a likely timetable for, any country that is a bene15 ficiary country for purposes of the Caribbean Basin Eco16 nomic Recovery Act, or a group of such beneficiary coun17 tries, either—

18 (1) acceding to—

19 (A) the North American Free Trade

20 Agreement pursuant to Article 2204 of such

21 Agreement, and

22 (B) as appropriate, supplemental agree23 ments pertaining to environmental, labor, and

24 import issues; or
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1 (2) entering into comprehensive bilateral or

2 multilateral agreements with the United States that

3 contain provisions that—

4 (A) are comparable to the provisions of the

5 North American Free Trade Agreement and, as

6 appropriate, to the provisions of supplemental

7 agreements pertaining to environmental, labor,

8 and import issues, and

9 (B) will achieve the applicable purposes,

10 policies, and objectives set forth in section 212

11 (b) and (c) of the Caribbean Basin Economic

12 Recovery Act and section 1101 of the Omnibus

13 Trade and Competitiveness Act of 1988.

14 The United States Trade Representative shall consult with

15 the Committee on Ways and Means of the House of Rep16 resentatives and the Committee on Finance of the Senate

17 regarding the determinations made under this section.

18 SEC. 202. TRADE AGREEMENT NEGOTIATING AUTHORITY.

19 (a) IN GENERAL.—

20 (1) AUTHORITY TO ENTER INTO AGREE21 MENTS.—The President may enter into trade agree22 ments with one or more beneficiary countries under

23 the Caribbean Basin Economic Recovery Act provid24 ing for the elimination or reduction of any duty im25 posed by the United States and for the reduction or
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1 elimination of barriers to, or other distortions of, the

2 international trade of the beneficiary countries or

3 the United States, if each such agreement would

4 comply with section 201.

5 (2) LIMITATION.—Notwithstanding any other

6 provision of law, no trade benefit shall be extended

7 to any country by reason of the extension of any

8 trade benefit to another country under a trade

9 agreement entered into under paragraph (1) with

10 such other country.

11 (b) CONSULTATION WITH CONGRESS BEFORE

12 AGREEMENTS ENTERED INTO.—

13 (1) Before the President enters into any trade

14 agreement under subsection (a), the President shall

15 consult with—

16 (A) the Committee on Ways and Means of

17 the House of Representatives and the Commit18 tee on Finance of the Senate; and

19 (B) each other committee of the House

20 and the Senate, and each joint committee of the

21 Congress, which has jurisdiction over legislation

22 involving subject matters which would be af23 fected by the trade agreement.

24 (2) The consultation under paragraph (1) shall

25 include—
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1 (A) the nature of the agreement;

2 (B) how and to what extent the agreement

3 will achieve the applicable purposes, policies,

4 and objectives of this title; and

5 (C) all matters relating to the implementa6 tion of the agreement.

7 (3) If it is proposed to implement two or more

8 trade agreements in a single implementing bill, the

9 consultation under paragraph (1) shall include the

10 desirability and feasibility of such proposed imple11 mentation.

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