(6) For more than 40 years, United States 
businesses have complained of border tax inequity 
and, since 1968, prior United States Administra-
tions and Congresses have sought to resolve it. 
(7) Congress has repeatedly recognized the 
prejudicial effect of the disparate treatment of bor-
der taxes with respect to goods and has directed the 
United States to seek a negotiated solution: 
(A) In passing the Trade Act of 1974 (19 
U.S.C. 2101 et seq.), Congress sought ‘‘revision 
of GATT articles with respect to the treatment 
of border adjustments for international taxes to 
redress the disadvantage to countries relying 
primarily on direct rather than indirect taxes 
for revenue needs.’’. 
(B) In section 1101(b)(16) of the Omnibus 
Trade and Competitiveness Act of 1988 (19 
U.S.C. 2901(b)(16)) and section 2102(b)(15) of 
Bipartisan Trade Promotion Authority Act of 
2002 (19 U.S.C. 3802(b)(15)), Congress de-
clared that a principal trade negotiating objec-
tive of the United States is to obtain a revision 
of WTO rules with respect to the treatment of 
border taxes in order to redress the disadvan-
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tage to countries relying primarily on direct 
taxes for revenue rather than indirect taxes. 
(8) The disparate treatment of border taxes is 
arbitrary, inequitable, causes economic distortions 
based only on the type of tax system used by a coun-
try, and is a primary obstacle to more balanced 
trade relations between the United States and its 
major trading partners. 
(b) DECLARATIONS OF POLICY.—Congress declares 
the following: 
(1) It is critically necessary that the issue of 
border taxes be addressed and resolved during cur-
rent or future WTO negotiations. 
(2) If such WTO negotiations fail to achieve the 
United States trade negotiating objective of revising 
WTO rules with respect to the treatment of border 
taxes in order to redress the disadvantage to coun-
tries relying primarily on direct taxes for revenue 
rather than indirect taxes, then effective action 
through legislation is warranted given the massive 
and inequitable distortions to trade that United 
States agricultural producers, manufacturers, and 
service providers face as a result of border taxes. 
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SEC. 3. REPORT ON RESULTS OF WTO NEGOTIATIONS TO 
REVISE WTO RULES REGARDING BORDER 
TAXES. 
(a) REPORT REQUIRED.—Not later than 60 days 
after the completion of WTO negotiations, or by January 
1, 2013, whichever occurs first, the United States Trade 
Representative shall submit to Congress a report certi-
fying whether or not each of the United States trade nego-
tiating objectives regarding border tax treatment, as speci-
fied in subsection (b), has been met as a result of such 
negotiations. 
(b) U.S. TRADE NEGOTIATING OBJECTIVES RE-
GARDING BORDER TAX TREATMENT SPECIFIED.—The 
United States trade negotiating objectives regarding bor-
der tax treatment specified in this subsection are the fol-
lowing: 
(1) With respect to trade in goods, the revision 
of WTO rules with respect to the treatment of bor-
der adjustments for internal taxes to redress the dis-
advantage to countries relying primarily on direct 
taxes for revenue rather than indirect taxes, as pro-
vided for in section 2102(b)(15) of Bipartisan Trade 
Promotion Authority Act of 2002 (19 U.S.C. 
3802(b)(15)). 
(2) With respect to trade in services— 
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(A) the elimination of the disadvantage in 
trade in services that exists for countries rely-
ing primarily on direct taxes that are not ad-
justed at the border rather than indirect taxes 
that are adjusted at the border; and 
(B) the revision of WTO rules regarding 
trade in services to ensure that such rules do 
not result in disparate treatment of border ad-
justments for internal taxes based on the direct 
or indirect nature of such taxes. 
(c) DEFINITION.—In this section, the terms ‘‘WTO 
negotiations’’ and ‘‘negotiations’’ mean any World Trade 
Organization negotiations that may result in revisions to 
WTO rules to meet the United States trade negotiating 
objectives regarding border tax treatment, as specified in 
subsection (b). 
SEC. 4. TAX ON IMPORTS FROM FOREIGN COUNTRIES WITH 
AN INDIRECT TAX SYSTEM. 
(a) IN GENERAL.—Subtitle D of the Internal Rev-
enue Code (26 U.S.C. 4461 et seq.) is amended by adding 
at the end the following new subchapter: 
‘‘Subchapter E—Tax on Imports From For-
eign Countries With An Indirect Tax Sys-
tem 
‘‘Sec. 4491. Imposition of tax. 
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‘‘SEC. 4491. IMPOSITION OF TAX. 
‘‘(a) GENERAL RULE.—There is hereby imposed a 
tax on imports of goods and services from any foreign 
country that employs an indirect tax system and grants 
rebates of indirect taxes paid on goods or services exported 
from that country. 
‘‘(b) AMOUNT OF TAX.—The amount of the tax im-
posed by subsection (a) on an imported good or service 
shall be an amount equal to the excess of— 
‘‘(1) the indirect taxes that are rebated or not 
paid on the good or service upon its export, over 
‘‘(2) any indirect taxes imposed on the good or 
service at the border of the United States. 
‘‘(c) LIABILITY AND TIME OF IMPOSITION OF TAX.— 
‘‘(1) LIABILITY.—The tax imposed by sub-
section (a) on a good or service shall be paid by the 
importer of such good or service. 
‘‘(2) TIME OF IMPOSITION.—The tax imposed 
by subsection (a) shall be imposed on imports at the 
time of entry. 
‘‘(d) PERIOD OF APPLICABILITY.—The tax imposed 
by subsection (a) shall apply during the period beginning 
as prescribed in section 6(a)(1) of the Border Tax Equity 
Act of 2011 and ending on the date on which the United 
States Trade Representative certifies to Congress that the 
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