Western Hemisphere Nearshoring Act

To decrease dependency on People’s Republic of China manufacturing and decrease migration due to lost regional economic opportunities. 1. Short title This Act may be cited as the Western Hemisphere Nearshoring Act 2. Findings Congress finds the following: (1) Our neighbors in the Western Hemisphere play a vital role in ensuring peace, security, and democracy. (2) Instability and lack of economic opportunities in the region are major drivers of migration in violation of the Immigration and Nationality Act. (3) According to the United States Census Bureau, in 2021 the United States exported $174.62 billion worth of goods to Central and South America, and imported $121 billion. (4) The United States is a net exporter with Central and South America. (5) Economic growth and development of the Western Hemisphere brings essential strength and stability to the region. (6) There is significant opportunity to expand the free flow of goods and services in the Western Hemisphere. (7) Closer relations among the Americas through free trade agreements and trade liberalization would encourage further economic development and stability in the region. (8) The United States should exercise its influence to encourage privatization, free markets, and economic cooperation in the region. (9) Countries in the region should combat corruption, strengthen the rule of law, reduce bureaucratic red tape, streamline permitting, and embrace free market principles to encourage further private sector investment. (10) With cooperation from the United States, regional countries must take serious steps to curb migration in violation of the Immigration and Nationality Act. (11) The Western Hemisphere has supply chains that are vulnerable due to their over dependence on the People’s Republic of China. (12) Free trade and expanded commercial ties between the United States and Western Hemisphere partners will foster economic and commercial cooperation, increase investment opportunities, decrease migration in violation of the Immigration and Nationality Act, reduce our dependence on the People’s Republic of China, and create jobs for American workers. 3. Use of United States International Development Finance Corporation funds to finance moving expenses and necessary workforce development costs incurred by companies moving from the People’s Republic of China to Latin America or the Caribbean (a) Use of funds (1) In general The United States International Development Finance Corporation, in coordination with relevant Federal agencies (including the United States Trade and Development Agency, the Export-Import Bank of the United States, the United States Army Corps of Engineers, and the United States Agency for International Development) and the United States Executive Directors of relevant international financial institutions (including the World Bank Group, the Inter-American Development Bank, and the International Monetary Fund), shall use not less than 10 percent of the amounts made available to provide financing under section 1421 of the Better Utilization of Investments Leading to Development Act of 2018 ( 22 U.S.C. 9621 (2) Availability of unused amounts If the DFC does not use the entire amount described in paragraph (1) for a fiscal year described in such paragraph, such amount shall, to the maximum extent practicable, be made available to the DFC for the next fiscal year to carry out this section or other DFC programs for Latin American or Caribbean countries. (3) Interest rate described The interest rate described in this paragraph is— (A) the Federal funds rate; or (B) the interest rate that is determined by reducing by not less than 1/2 whichever is the lesser. (b) No negative effects on employment in the United States The DFC shall not provide assistance under this section unless the Secretary of Commerce has determined that the provision of the assistance would not result in a negative effect on employment in the United States. (c) Disposition of unused assistance A corporation to which financing is made under this section shall remit to the DFC any portion of the assistance that is not expended within a period of time after the date the financing is made that is determined by the DFC on a case-by-case basis. (d) Conditions on provision of loans The DFC— (1) may provide loans under this section to a corporation only if the loans are commercially viable, as determined by the DFC; and (2) shall determine an appropriate amount of time for repayment of loans under this section to a corporation. (e) Plan Not later than 180 days after the date of the enactment of this Act, the DFC shall develop and submit to the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate a plan to streamline the provision of assistance under this section, including to expedite the approval process for the provision of such assistance. 4. Authority to provide duty-free treatment for goods and services of companies moving from the People’s Republic of China to Latin America or the Caribbean (a) In general Notwithstanding any other provision of law, the President shall proclaim duty-free treatment (or other preferential treatment) for any good or service made or produced in a Latin American or Caribbean country by a qualified corporation that has received assistance under section 3, subject to such terms and conditions as the President determines to be appropriate. (b) Regulations The President shall prescribe such regulations as may be necessary to carry out this section. (c) Effective period (1) In general Subsection (a) shall apply with respect to a good or service made or produced in a Latin American or Caribbean country by a corporation for the 15-year period beginning on the date on which the corporation begins operations in such country. (2) Rule of construction Nothing in this section may be construed to affect duty-free treatment (or other preferential treatment) for any good or service made or produced in a Latin American or Caribbean country by a qualified corporation after the 15-year period described in paragraph (1) if goods and services from such country are otherwise generally eligible for duty-free treatment (or other preferential treatment). 5. Additional conditions on receipt of assistance under section 3 and duty-free treatment (or other preferential treatment) under section 4 (a) In general The appropriate Federal agency may not provide assistance under section 3 or duty-free treatment (or other preferential treatment) under section 4 to a corporation unless— (1) the agency determines that the corporation will create jobs in the Latin American or Caribbean country to which it moves operations in numbers determined by the agency to be commensurate with the assistance provided; (2) the corporation makes a binding commitment to the agency that on and after the date the assistance is provided— (A) the corporation will not come under the ownership or control of the Government of the People’s Republic of China or the Chinese Communist Party, the Government of the Russian Federation, or any other foreign adversary; and (B) the corporation will not have its headquarters in the People’s Republic of China, the Russian Federation, or any other foreign adversary; (3) within 2 years after the date described in paragraph (2), and subject to an additional extension as determined appropriate by the agency, all assets of the corporation with respect to which the assistance is provided will have been moved from the People’s Republic of China to a Latin American or Caribbean country; and (4) the corporation retains all assets of the corporation with respect to which the assistance is provided in a Latin American or Caribbean country after the date described in paragraph (2) or the last day of the extension described in paragraph (3), as the case may be. (b) Compliance determinations (1) In general The appropriate Federal agency, in coordination with the Department of State, shall make all determinations regarding compliance with the provisions of subsection (a). (2) Non-compliance actions A qualified corporation that has received assistance under section 3 or duty-free treatment (or other preferential treatment) under section 4 that is subsequently determined by the appropriate Federal agency not to be in compliance with the provisions of subsection (a) shall be subject to the following actions: (A) Any good or service made or produced in a Latin American or Caribbean country by the corporation (other than a good or service made or produced in a free trade zone or which is subject to benefits under a free trade agreement) shall not be eligible for duty-free treatment (or other preferential treatment) under section 4. (B) The appropriate Federal agency shall adjust the interest rate on any loan to be provided by the agency to the corporation to the prevailing market interest rate. (c) Appropriate Federal agency defined In this section, the term appropriate Federal agency (1) with respect to actions relating to assistance under section 3, the DFC; and (2) with respect to actions relating to duty-free treatment (or other preferential treatment) under section 4, the United States Trade Representative. 6. Expenses paid for with tariffs collected from the People’s Republic of China (a) Establishment of trust fund There is established in the Treasury of the United States a trust fund consisting of such amounts as are appropriated to such trust fund under subsection (b). (b) Appropriations to trust fund There are hereby appropriated to such trust fund amounts equivalent to the tariffs collected by the United States on goods manufactured in the People’s Republic of China. (c) Appropriations from trust fund There are hereby appropriated from such trust fund to the General Fund of the Treasury amounts equivalent to the reduction in revenue to such General Fund by reason assistance provided by the DFC under this Act. (d) Timing of transfers, etc Rules similar to the rules of section 9601 7. Amendments to the BUILD Act of 2018 (a) Statement of policy Section 1411 of the Better Utilization of Investments Leading to Development Act of 2018 ( 22 U.S.C. 9611 (1) in paragraph (7), by striking and (2) in paragraph (8), by striking the period at the end and inserting a semicolon; and (3) by adding at the end the following: (9) to further United States economic growth by prioritizing United States-owned businesses in providing support under title II; and (10) to further United States national security by prioritizing the production of goods in critical industries, as determined by the Corporation, in consultation with the Department of Homeland Security. . (b) Prohibition on support for state-Owned enterprises (1) In general Title V of the Better Utilization of Investments Leading to Development Act of 2018 ( 22 U.S.C. 9671 et seq. 1455. Prohibition on support for entities owned or controlled by foreign governments (a) In general Except as provided in subsection (b), the Corporation is prohibited from providing support under title II for an entity owned or controlled by a foreign government. (b) Exception (1) In general The Corporation may provide feasibility studies and technical assistance under title II for an entity owned or controlled by a foreign government that is not a foreign adversary. (2) Foreign adversary defined In this subsection, the term foreign adversary . (2) Clerical amendment The table of contents for the FAA Reauthorization Act of 2018 ( 49 U.S.C. 40101 Sec. 1455. Prohibition on support for entities owned or controlled by foreign governments. . 8. Trade negotiating authority (a) In general The United States Trade Representative shall take action to initiate negotiations to obtain trade agreements with each Latin American or Caribbean country that as of the date of the enactment of this Act is not a party to a free trade agreement with the United States if the country meets the conditions described in subsection (b) are met. (b) Conditions described The conditions described in this subsection are the following: (1) The country is taking steps to reduce migration in violation of the Immigration and Nationality Act. (2) The country is taking steps to reduce economic dependence on the People’s Republic of China. (3) The country allows Taiwan to establish and maintain a commercial office in the country. 9. Agreements for cooperation pursuant to section 123 of the Atomic Energy Act of 1954 (a) In general The President is authorized to take action to initiate negotiations with Latin American and Caribbean countries to obtain agreements for cooperation pursuant to section 123 of the Atomic Energy Act of 1954 ( 42 U.S.C. 2153 (1) the President determines that such sales will not threaten the national security of the United States; and (2) the countries or qualified corporations, as the case may be, meet the conditions described in paragraphs (1), (2), and (3) of section 8(b). (b) Technical assistance and expertise The Administrator of the United States Agency for International Development, in consultation with the Secretary of Energy and the DFC, may provide technical assistance and expertise in electrical grid and energy efficiency improvements related to sales under subsection (a), as appropriate. 10. Temporary increased expensing for relocating manufacturing from the People’s Republic of China to a Latin American or Caribbean country (a) In general For purposes of section 168(k) (1) such property shall be treated as qualified property (within the meaning of such section), (2) the applicable percentage otherwise determined under section 168(k)(6) of such Code with respect to such property shall be 75 percent, and (3) paragraph (8) of such section shall not apply. (b) Qualified relocated manufacturing property For purposes of this section— (1) In general The term qualified relocated manufacturing property (A) placed in service in a Latin American or Caribbean country by a qualified manufacturer, and (B) is acquired by such qualified manufacturer in connection with a qualified relocation of manufacturing. (2) Qualified relocation of manufacturing (A) In general The term qualified relocation of manufacturing (B) Relocation of property not required For purposes of subparagraph (A), manufacturing shall not fail to be treated as relocated merely because property used in such manufacturing was not relocated. (C) Relocation of not less than equivalent productive capacity required For purposes of subparagraph (A), manufacturing shall not be treated as relocated unless the property manufactured in a Latin American or Caribbean country is substantially identical to the property previously manufactured in the People’s Republic of China and the increase in the units of production of such property in a Latin American or Caribbean country by the qualified manufacturer is not less than the reduction in the units of production of such property by such qualified manufacturer in the People’s Republic of China. (c) Qualified manufacturer For purposes of this section, the term qualified manufacturer (1) which is engaged in the trade or business of manufacturing any tangible personal property, (2) with respect to which the Secretary of the Treasury (or the Secretary’s delegate) has made the determination described in section 5(a)(1), and (3) which has entered into a binding agreement with such Secretary (or such delegate) to meet the requirements of section 5(a)(2) which is enforceable under terms similar to the terms of section 5(b). 11. Definitions In this Act: (1) DFC The term DFC (2) Qualified corporation The term qualified corporation (3) Qualified moving costs defined The term qualified moving costs (A) the costs of moving inventory, equipment, and supplies from the People’s Republic of China to a Latin American or Caribbean country; and (B) the costs of workforce development and construction of facilities. (4) Latin American or Caribbean country; Western Hemisphere (A) In general The terms Latin American or Caribbean country Western Hemisphere (i) mean a country in the Caribbean Sea, South America, or Central America, and Mexico; and (ii) except as provided in subparagraph (B), do not include Cuba or Venezuela. (B) Exception The term Latin American or Caribbean country (i) the government of such country— (I) has held free and fair presidential and legislative elections, as determined by independent international observers, and subsequent elections are scheduled; (II) respects and upholds human rights; (III) is taking significant steps to privatize its economy and institute a free market; (IV) permits the international community to provide humanitarian, governance, and economic development assistance; (V) has freed all unlawfully detained United States citizens, legal permanent residents, and political prisoners; and (VI) has expelled all security services from foreign adversaries from the country; and (ii) the prior authorities of such country have renounced their illegitimate claim to power. (5) Federal funds rate The term Federal funds rate

Summary: Western Hemisphere Nearshoring Act This bill provides assistance for corporations to move operations from China to countries in Latin America or the Caribbean and addresses related issues. For example, the bill requires the U.S. International Development Finance Corporation to provide financing and other assistance to eligible corporations for costs associated with such a move. Tariffs collected for goods manufactured in China shall be used to pay for such assistance. The President may provide preferential treatment, including duty-free treatment, for goods produced in a Latin American or Caribbean country by a corporation that received relocation assistance under this bill.