I
103D CONGRESS
2D SESSION
H. R. 4586
To renew and improve the operation of title V of the Trade Act of 1974
(relating to the Generalized System of Preferences).
IN THE HOUSE OF REPRESENTATIVES
JUNE 16, 1994
Mr. BROWN of California (for himself and Mr. LAFALCE) introduced the
following bill; which was referred to the Committee on Ways and Means
A BILL
To renew and improve the operation of title V of the Trade
Act of 1974 (relating to the Generalized System of Pref-
erences).
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘GSP Renewal and Re-
form Act of 1994’’.
SEC. 2. AUTHORITY TO EXTEND PREFERENCES.
Section 501 of the Trade Act of 1974 (19 U.S.C.
2461) is amended—
(1) by striking out the matter preceding para-
graph (1) and inserting the following:
‘‘The United States Trade Representative may pro-
vide duty-free treatment for any eligible article from any
beneficiary developing country in accordance with the pro-
visions of this title. In designating any such articles, the
Trade Representative shall have due regard for—’’;
(2) by amending paragraph (1)—
(A) by inserting ‘‘sustainable’’ before ‘‘eco-
nomic development’’, and
(B) by adding ‘‘and improvement of living
standards of their peoples’’ before the period;
and
(3) by inserting ‘‘, including United States
workers,’’ after ‘‘United States producers’’ in para-
graph (3).
SEC. 3. BENEFICIARY DEVELOPING COUNTRIES.
Section 502 of the Trade Act of 1974 (19 U.S.C.
2462) is amended as follows:
(1) Subsection (a) is amended to read as fol-
lows:
‘‘(a) DESIGNATION BY PRESIDENT.—The President
may only issue an Executive order or Presidential procla-
mation designating a country as a beneficiary developing
country for purposes of this title after the Trade Rep-
resentative has certified to the President in writing that
such country meets all of the requirements for beneficiary
developing country status provided for in subsections (b)
and (c). Before the President designates any country as
a beneficiary developing country for purposes of this title,
the President shall—
‘‘(1) notify the Congress of the intention to
make such a designation; and
‘‘(2) submit to the Congress a copy of the cer-
tification of the Trade Representative.’’.
(2) Subsection (b) is amended—
(A) by inserting after ‘‘(b)’’ the following
‘‘COUNTRIES
INELIGIBLE
FOR
DESIGNA-
TION.—’’;
(B) by striking out ‘‘Union of Soviet So-
cialist Republics’’ and inserting ‘‘Common-
wealth of Independent States member states’’;
(C) by inserting ‘‘, in violation of inter-
national law,’’ after ‘‘has’’ in each of subpara-
graphs (A), (B), and (C) of paragraph (4);
(D) by striking out ‘‘and’’ at the end of
paragraph (6);
(E) by striking out paragraph (7) and in-
serting the following:
‘‘(7) during any period in which a free trade
area agreement is in force between such country and
the United States; except that this paragraph shall
not apply until the 2nd anniversary of the date of
the enactment of this paragraph in the case of any
country with respect to which there is in force, on
such date of enactment, a free trade area agreement
between it and the United States;
‘‘(8) if such country fails to comply with inter-
nationally recognized worker rights; and
‘‘(9) if such country has not adopted laws to
promote internationally recognized environmental
standards in that country or has adopted such laws
but is not enforcing them.’’; and
(F) by inserting before the period at the
end of the last sentence of each subsection the
following: ‘‘; except that such designation shall
not prevent any country’s removal from eligi-
bility under section 504 at any time after 1
year after the date of the President’s designa-
tion of the country as a beneficiary developing
country.
(3) Subsection (c) is amended—
(A) by inserting ‘‘FACTORS REQUIRED FOR
DESIGNATION AS A BENEFICIARY DEVELOPING
COUNTRY.—’’ after ‘‘(c)’’; and
(B) by amending paragraph (7) and add-
ing paragraph (8) to read as follows:
‘‘(7) whether or not such country is in compli-
ance with internationally recognized worker rights;
and
‘‘(8) whether or not the country has adopted
and is enforcing laws to promote internationally rec-
ognized environmental standards in that country.’’.
(4) Subsections (d) and (e) are repealed.
(5) The following new subsection is added after
subsection (c):
‘‘(d) DEFINITIONS.—For purposes of this title:
‘‘(1) The term ‘Trade Representative’ means
the United States Trade Representative.
‘‘(2) The term ‘country’ means any foreign
country, any overseas dependent territory or posses-
sion of a foreign country, or the Trust Territory of
the Pacific Islands, and includes any designated ex-
port processing zone or any other subdivision within
that country. In the case of an association of coun-
tries which is a free trade area or customs union, or
which is contributing to comprehensive regional eco-
nomic integration among its members through ap-
propriate means, including, but not limited to, the
reduction of duties, the President may by Executive
order or Presidential proclamation provide that all
members of such association other than members
which are barred from designation under subsection
(b) shall be treated as 1 country for purposes of this
title.
‘‘(3) The term ‘beneficiary developing country’
means any country with respect to which there is in
effect an Executive order or Presidential proclama-
tion by the President of the United States designat-
ing country as a beneficiary developing country for
purposes of this title.
‘‘(4) The term ‘internationally recognized work-
er rights’ includes—
‘‘(A) the right of association;
‘‘(B) the right to organize and bargain col-
lectively;
‘‘(C) a prohibition on the use of any form
of forced or compulsory labor;
‘‘(D) a prohibition on discrimination based
on race, sex, or religion in hiring, compensation,
promotion or any other term or condition of
employment;
‘‘(E) provision for occupational safety and
health for all workers; and
‘‘(F) acceptable minimum standards with
respect to wages, hours of work, and the age at
which children may be employed.
In determining whether a country has complied with
internationally recognized worker rights, the Trade
Representative shall—
‘‘(i) require a country to comply with each
of the factors listed in subparagraphs (A)
through (F) and shall also apply recognized
international standards, including provisions
applicable to workers in international human
rights instruments and International Labor Or-
ganization Conventions;
‘‘(ii) take into account the laws and regula-
tions of a country, as well as the implementa-
tion and enforcement of those laws and regula-
tions, in determining whether each of the fac-
tors has been complied with; and
‘‘(iii) take into account the findings of
human rights commissions and courts, the an-
nual Human Rights Report of the Department
of State, reports of nongovernmental organiza-
tions, the application of worker rights provi-
sions of other United States laws, worker rights
provisions in voluntary codes of conduct or
other agreements affecting workers, employers
and governments, worker rights provisions in
collective 
bargaining 
agreements 
between
transnational employers and groups of workers,
and the opinions of scholars in the fields of
labor law, comparative labor law, and inter-
national labor law and human rights law.
With respect to the factor set forth in subparagraph
(F), once a country has established acceptable mini-
mum standards, which may take into account the
country’s level of economic development, the country
must continue to make progress and improve the
minimums, commensurate, with its economic devel-
opment. With respect to all of the other factors, the
country must be in complete compliance with inter-
national standards, regardless of its level of eco-
nomic development.
‘‘(5) The term ‘interested persons’ includes, but
is not limited to, domestic firms and workers, rep-
resentatives of workers, both domestic and foreign,
representatives of consumer interests, and represent-
atives of any group that has an interest in promot-
ing respect for internationally recognized worker
rights, or internationally recognized environmental
standards without regard to any showing of an eco-
nomic or other injury.’’.
‘‘(6) The term ‘internationally recognized envi-
ronmental standards’ includes—
‘‘(A) mitigation of global climate change;
‘‘(B) reduction in the consumption and
production of ozone-depleting substances;
‘‘(C) reduction in ship pollution of the
oceans from such source as oil, noxious bulk liq-
uids, hazardous freight, sewage, and garbage;
‘‘(D) ban on international ocean dumping
of high-level radioactive waste, chemical warfare
agents, and hazardous substances;
‘‘(E) 
government 
control 
of 
the
transboundary movement of hazardous waste
materials and their disposal for the purpose of
reducing global pollution on account of such
materials;
‘‘(F) preservation of endangered species;
‘‘(G) conservation of biological diversity;
‘‘(H) promotion of biodiversity; and
‘‘(I) preparation of oil-spill contingency
plans.’’.
SEC. 4. ELIGIBLE ARTICLES.
Section 503 of the Trade Act of 1974 (19 U.S.C.
2163) is amended as follows:
(1) Subsection (a) is amended—
(A) by inserting ‘‘LISTS OF ARTICLES TO
BE CONSIDERED FOR DESIGNATION.—’’ after
‘‘(a)’’,
(B) by striking out ‘‘President’’ each place
it appears and inserting ‘‘Trade Representa-
tive’’,
(C) by striking out ‘‘he’’ and inserting
‘‘the Trade Representative’’, and
(D) by striking out ‘‘Executive order or
Presidential proclamation’’ and inserting ‘‘pub-
lishing a list of such articles in the Federal
Register’’.
(2) Subsection (b) is amended—
(A) by inserting ‘‘DUTY FREE TREAT-
MENT
FOR
ELIGIBLE
ARTICLES.—’’ after
‘‘(b)’’, and
(B) by striking out ‘‘Secretary of the
Treasury, after consultation with the United
States Trade Representative,’’ and inserting
‘‘Trade Representative’’.
(3) Subsection (c) is amended—
(A) by inserting ‘‘ARTICLES NOT ELIGI-
BLE
FOR DESIGNATION
AS ELIGIBLE ARTI-
CLES.—’’ after ‘‘(c)’’, and
(B) by adding at the end the following new
paragraph:
‘‘(3) No article shall be an eligible article for purposes
of this title from any country where such article has been
made under conditions that violate internationally recog-
nized worker rights.’’.
SEC. 5. LIMITATIONS ON PREFERENTIAL TREATMENT.
Section 504 of the Trade Act of 1974 (19 U.S.C.
2164) is amended as follows:
(1) Subsections (a) and (b) are amended to
read as follows:
‘‘(a) WITHDRAWAL, SUSPENSION, OR LIMITATION OF
DUTY-FREE TREATMENT OF ELIGIBLE ARTICLES.—The
Trade Representative may withdraw, suspend, or limit the
application of the duty-free treatment accorded under sec-
tion 501 with respect to any article generally or with re-
spect to exports of any article from a particular country
or countries; except that no rate of duty may be estab-
lished in respect of any article pursuant to this section
other than the rate which would apply but for this title.
In taking any action under this subsection, the Trade Rep-
resentative shall consider the factors set forth in sections
501, 502(c), and 503, and must withdraw or suspend
duty-free treatment for any article that no longer meets
the requirements of section 503(b) and (c).
‘‘(b) WITHDRAWAL OR SUSPENSION OF DESIGNA-
TION AS BENEFICIARY DEVELOPING COUNTRY.—The des-
ignation of a country as a beneficiary developing country
under this title shall be withdrawn or suspended if, after
any investigation initiated under subsection (c), a decision
is issued that the country is no longer in complete compli-
ance with the prerequisites contained in section 502(b) for
designation as a beneficiary developing country. Such
country shall cease to be a beneficiary developing country
on the day on which the Trade Representative issues the
decision under subsection (c). The Trade Representative
shall promptly publish the text of any such decision in the
Federal Register and shall submit a copy of the decision
to the Congress. Within 30 days after the date of publica-
tion of the decision under the preceding sentence, the
President shall issue an Executive order or Presidential
proclamation revoking the designation of such country
under section 502.’’.
(2) Subsections (c), (d), (e), and (f) are redesig-
nated as subsections (d), (e), (f), and (g), respec-
tively.
(3) The following new subsection is added after
subsection (b):
‘‘(c) PETITIONS; INVESTIGATIONS; JUDICIAL RE-
VIEW.—
‘‘(1) PETITIONS.—
‘‘(A) Any interested person may at any
time file a petition with the Trade Representa-
tive requesting that action be taken under sub-
section (a) or (b) and setting forth the allega-
tions in support of the request. Petitions alleg-
ing the failure to comply with internationally
recognized worker rights may seek—
‘‘(i) the removal of articles from the
list of eligible articles with respect to one
or more countries or industry or industries
within a country or countries under sub-
section (a);
‘‘(ii) the withdrawal of the designation
as a beneficiary developing country of one
or more countries under subsection (b); or
‘‘(iii) action under both clauses (i)
and (ii).
‘‘(B) The Trade Representative shall re-
view the allegations in any petition filed under
subsection (a) and, not later than 45 days after
the date on which the Trade Representative re-
ceives the petition, shall initiate an investigation
unless the petition is dismissed under para-
graph (C).
‘‘(C) The Trade Representative may deter-
mine not to initiate an investigation with re-
spect to a petition only upon issuing a finding
that the petition is frivolous. This finding shall
be made without regard to whether similar alle-
gations were made in a previously reviewed pe-
tition and shall focus exclusively on whether the
facts alleged in a petition, if true, would fail to
establish a prima facie case for noncompliance
with this Act. Only if the facts alleged in a peti-
tion, if true, fail to make out a prima facie
case, or if a petition contains only conclusory
allegations with no allegation of supporting
facts, shall a petition be dismissed as frivolous.
If the Trade Representative does find a petition
to be frivolous, the Trade Representative shall
issue a written decision indicating the specific
reasons therefor and shall publish notice of the
determination, together with a summary of such
reasons, in the Federal Register. A copy of the
decision shall be sent to the petitioner and shall
be made available for public review.
‘‘(D) The Trade Representative may con-
stitute one or more special committees to review
petitions under investigation and make written
recommendations with respect to each petition.
The written recommendations shall be available
to the public. The members of the special com-
mittees may be drawn from other agencies with-
in the executive branch, and each member shall
have the necessary expertise relevant to the is-
sues raised in any petitions to be considered.
The Trade Representative, any Deputy Trade
Representative, or other designee of the Trade
Representative shall be the chair of any special
committee constituted under this section. Any
special committee that reviews a petition con-
taining allegations of worker rights violations
shall include at least one member designated by
the Deputy Undersecretary for International
Labor Affairs of the Department of Labor, and
at least one member designated by the Assist-
ant Secretary of State for Human Rights.
‘‘(E)(i) The investigation of a petition con-
ducted under this subsection shall commence
with the Trade Representative publishing a
summary of the petition in the Federal Reg-
ister, along with a request for any person to
submit information relevant to the petition. Fol-
lowing publication, the Trade Representative
shall conduct an independent investigation and
gather information from all available sources.
As part of the review process, the Trade Rep-
resentative shall, as soon as practicable, and in
no event later than 90 days following the filing
of the petition, provide opportunity for the pres-
entation of information concerning the issues,
including a public hearing if requested in the
petition.
‘‘(ii) With respect to any petition alleging
a violation of internationally recognized worker
rights, the Trade Representative shall consult
with the Secretary of Labor as to whether such
violations have occurred or are occurring. The
Secretary of Labor shall provide the Trade Rep-
resentative with a written recommendation re-
garding the disposition of the allegations that
shall be entered in the record of the investiga-
tion. The Trade Representative, or any member
of any special committee constituted under sub-
paragraph (D), may also seek advice from ex-
perts in the field of human rights and worker
rights. The advice may be in writing or taken
as oral testimony at a public hearing and shall
be entered in the record of the investigation.
‘‘(F) After completion of the investigation,
and in no event later than 270 days following
the date the petition was filed, the Trade Rep-
resentative shall issue a decision whether to
grant the relief requested in the petition. The
decision must be in writing and clearly ref-
erence the issues presented, the factual findings
regarding the allegations, and the standard ap-
plied in determining whether the facts as found
required action under subsection (a) or (b). A
copy of the decision shall be provided to the pe-
titioner, any other party that submitted infor-
mation relevant to the petition and be made
available for public review. A summary of the
decision shall be published in the Federal Reg-
ister.
‘‘(2) INITIATION OF INVESTIGATION BY MEANS
OTHER THAN PETITION.—If the Trade Representa-
tive determines that an investigation should be initi-
ated with respect to any matter in order to deter-
mine whether the matter requires action under sub-
section (a) or (b), the Trade Representative shall
publish such determination in the Federal Register
and shall initiate such investigation using the proce-
dures of paragraphs (1) (E) and (F).
‘‘(3) PROMULGATION
OF
REGULATIONS.—The
Trade Representative shall promulgate regulations
to implement this subsection. The regulations may
include procedures for the creation of special com-
mittees under paragraph (1)(D); coordinating inves-
tigations with other agencies; consolidating multiple
petitions concerning the same article, country, or in-
dustry; and holding hearings on similar petitions at
the same time in order to efficiently gather informa-
tion. Until such regulations are promulgated, any
current regulations in 15 CFR part 2007 that are
not inconsistent with any provision of this title may
be utilized.
‘‘(4) JUDICIAL REVIEW OF DETERMINATIONS.—
‘‘(A) Except as provided in subparagraph
(B), any final decision dismissing or denying a
petition requesting action under subsection (a)
may be appealed by the petitioner to the United
States Court of Appeals for the Federal Circuit
for review. The decision shall be reviewed as a
final agency action.
‘‘(B) Any final decision dismissing or deny-
ing a petition requesting action under sub-
section (b) may be appealed by the petitioner to
the United States Court of Appeals for the Dis-
trict of Columbia Circuit for review. The deci-
sion shall be reviewed as a final agency action
Notwithstanding any provision of section 1581
of title 28, United States Code, the denial or
dismissal of a combined petition filed under
subsection (c)(1)(A)(iii) may be appealed in its
entirety under this paragraph.’’.
(4) Subsection (d) (as redesignated by para-
graph (2)) is amended—
(A) by striking out ‘‘(d)(1)’’ and all that
follows thereafter in paragraphs (1) and (2)
and inserting the following:
‘‘(d) COMPETITIVE NEED LIMITATIONS.—(1) Subject
to paragraphs (2) through (7) and subsection (e), when-
ever the President determines that—
‘‘(A) any beneficiary developing country—
‘‘(i) has a per capita gross national prod-
uct of not less than $475 and not more than
$1,750, and
‘‘(ii) has exported (directly or indirectly) to
the United States—
‘‘(I) during a calendar year a quantity
of an eligible article having an appraised
value in excess of the applicable competi-
tive need limit amount, or
‘‘(II) a quantity of any eligible article
equal to or exceeding 50 percent of the ap-
praised value of the total imports of such
article into the United States during any
calendar year; or
‘‘(B) any beneficiary developing country—
‘‘(i) has a per capita gross national prod-
uct of not less than $1,750 and not more than
$3,000, and
‘‘(ii) has exported (directly or indirectly) to
the United States—
‘‘(I) during a calendar year a quantity
of an eligible article having an appraised
value in excess of the applicable competi-
tive need limit amount, or
‘‘(II) a quantity of any eligible article
equal to or exceeding 25 percent of the ap-
praised value of the total imports of such
article into the United States during any
calendar year;
then, not later than July 1 of the next calendar year, such
country shall not be treated as a beneficiary developing
country with respect to such article.
‘‘(2)(A) For purposes of paragraph (1), the term
‘competitive need limit amount’ means—
‘‘(i) for calendar year 1993—
‘‘(I) for a beneficiary developing country
referred to in paragraph (1)(A), $75,000,000,
and
‘‘(II) for a beneficiary developing country
referred to in paragraph (1)(B), $35,000,000;
‘‘(ii) for paragraph (1)(A) for each calendar
year after 1993, the competitive need limit amount
is the competitive need limit amount under such
paragraph for the preceding calendar year (herein-
after referred to as the ‘base year’) adjusted—
‘‘(I) upwards by $10,000,000 for each .25
percent by which the United States unemploy-
ment rate (as determined by the Secretary of
Labor) for the base year was lower than the
United States unemployment rate for the year
preceding the base year; or
‘‘(II) downwards by $10,000,000 for each
.25 percent by which the United States unem-
ployment rate for the base year was higher than
the United States unemployment rate for the
year preceding the base year; and
‘‘(iii) for paragraph (1)(B) for each calendar
year after 1993, clause (ii) applies but with
‘$5,000,000’ substituted for ‘$10,000,000’ each
place it appears.
‘‘(B)(i) Not later than January 4, 1994, and periodi-
cally thereafter, the President shall conduct a general re-
view of eligible articles based on the considerations de-
scribed in section 501 or 502(c).
‘‘(ii) If, after any review under clause (i), the Presi-
dent determines that this clause should apply because a
beneficiary developing country has demonstrated for any
calendar year a sufficient degree of competitiveness (rel-
ative to other beneficiary developing countries) with re-
spect to any eligible article, then paragraph (1)(B) (with-
out regard to clause (i)) shall be applied to such country
with respect to such article and in computing the competi-
tive need limit amount under subparagraph (A)(iii) for
purposes of such application such calendar year shall be
treated as being the base year and the competitive need
limit for that base year is $25,000,000.’’;
(B) by striking out ‘‘President’’ each place
it appears and inserting ‘‘Trade Representa-
tive’’;
(C) by amending paragraph (3)(B)—
(i) by striking out ‘‘and’’ at the end of
clause (i),