I
105TH CONGRESS
1ST SESSION
H. R. 78
To assess the impact of the NAFTA, to require further negotiations of
certain provisions of the NAFTA, to establish a commission to review
the dispute settlement reports of the World Trade Organization, and
for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 7, 1997
Mr. REGULA introduced the following bill; which was referred to the Commit-
tee on Ways and Means, and in addition to the Committee on Rules, for
a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To assess the impact of the NAFTA, to require further
negotiations of certain provisions of the NAFTA, to es-
tablish a commission to review the dispute settlement
reports of the World Trade Organization, and for other
purposes.
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 ‘‘NAFTA Renegotiation
and WTO Dispute Settlement Review Commission Act’’.
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TITLE I—NAFTA RENEGOTIATION ACT
SEC. 101. FINDINGS.
The Congress makes the following findings:
(1) EXPANDED MARKETS.—One of the purposes
of the NAFTA, as stated in the preamble, is to ‘‘cre-
ate an expanded and secure market’’ for goods and
services. Instead, the NAFTA has resulted in a spi-
raling trade deficit with Mexico and Canada that ex-
ceeded $30,000,000,000 in 1995; and that had
reached $30,000,000,000 at the end of the third
quarter of 1996.
(2) CURRENCY
STABILITY.—One of the pur-
poses of the NAFTA is to ‘‘ensure a predictable
commercial framework for business planning and in-
vestment’’. However, the NAFTA contains no safe-
guards to minimize the negative economic impacts of
severe shifts in currency exchange rates among the
NAFTA parties. To protect its own economy the
United States has sought to bolster the Mexican
peso which has been supported by $30,000,000,000
in loans.
(3) NAFTA TO BE RENEGOTIATED.—Based on
the experience with the NAFTA since its implemen-
tation, it has become evident that further negotia-
tion is required to resolve fundamental inadequacies
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within the NAFTA with respect to trade balances
and currency differentials.
SEC. 102. RENEGOTIATION OF THE NAFTA.
(a) IN GENERAL.—The President is authorized and
directed to confer with the Governments of Canada and
Mexico and to renegotiate the terms of the NAFTA as
described in this subsection by July 31, 1998:
(1) RENEGOTIATION
OF
NAFTA
TO
CORRECT
TRADE DEFICITS.—The President is authorized and
directed to confer with the Governments of Canada
and Mexico and to renegotiate the terms of the
NAFTA to provide for implementation of emergency
adjustments of tariffs, quotas, and other measures
to stabilize the flow of trade among the NAFTA
parties when the United States has an annual deficit
in trade of goods and services with another NAFTA
party that exceeds 10 percent of the United States
exports to that party.
(2) RENEGOTIATE
THE
NAFTA
TO
CORRECT
CURRENCY DISTORTIONS.—The President is author-
ized and directed to confer with the Governments of
Canada and Mexico and to renegotiate the terms of
the NAFTA to provide for the implementation of
emergency adjustments of tariffs, quotas, and other
measures to mitigate the adverse effects of rapid or
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substantial changes in exchange rates between the
United States dollar and the currency of another
NAFTA party.
SEC. 103. REPORTS ASSESSING THE IMPACT OF NAFTA ON
JOBS AND THE ENVIRONMENT.
(a) IN GENERAL.—The Secretary of Commerce and
the Administrator of the Environmental Protection Agen-
cy are authorized and directed to conduct the studies as
described in this subsection and submit them to the Con-
gress by December 31, 1997.
(1) REPORT
ON
DOMESTIC
MANUFACTURING
AND JOBS.—The Secretary of Commerce, after con-
sultation with the appropriate government agencies,
shall determine the levels of exports of United States
manufactured goods to the NAFTA parties and im-
ports of manufactured goods from NAFTA parties,
and the number of jobs that have resulted from in-
creased exports of manufactured goods to NAFTA
parties and the loss of jobs that have resulted from
increased imports of manufactured goods from
NAFTA parties since January 1, 1994.
(2) REPORT RELATING TO HEALTH AND ENVI-
RONMENTAL
IMPACTS
OF
NAFTA.—The Adminis-
trator of the Environmental Protection Agency, in
consultation with the Secretarial for the NAFTA
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Commission on Environmental Cooperation, shall
conduct investigations on whether pollution and
health hazards have worsened since January 1, 1994
and report to the Congress on the outcomes of the
Administration’s investigations on pollution and
health hazards in and around the United States-
Mexico border zone since the implementation of the
NAFTA. The report shall include—
(A) a description and status report of all
industrial site cleanup and environmental im-
provement projects begun in the border zone
since January 1, 1994; and
(B) information on the incidence of air and
water pollution since January 1, 1990, and the
causes, levels, and types of pollution which have
occurred.
SEC. 104. CONSULTATION WITH CONGRESS.
The President shall consult regularly with the Con-
gress regarding the negotiations described in section 102.
The United States Trade Representative shall consult with
the appropriate committees of Congress in the develop-
ment of any technical and conforming amendments that
may be required to carry out the provisions of this Act.
SEC. 105. DEFINITIONS.
As used in this Act:
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(1) NAFTA.—The term ‘‘NAFTA’’ means the
North American Free Trade Agreement entered into
the United States, Canada, and Mexico on December
17, 1992.
(2) NAFTA 
PARTY.—The term ‘‘NAFTA
party’’ means the United States, Canada, or Mexico.
(3) UNITED STATES-MEXICO BORDER ZONE.—
The term ‘‘United States-Mexico border zone’’
means the area that comprises the 12-mile zone on
the Mexican side of the United States-Mexico border
and the counties within any State of the United
States that are contiguous with Mexico.
TITLE II—WTO DISPUTE SETTLEMENT
REVIEW COMMISSION ACT
SEC. 201. CONGRESSIONAL FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress finds the following:
(1) The United States joined the World Trade
Organization as a founding member with the goal of
creating an improved global trading system.
(2) The American people must receive assur-
ances that United States sovereignty will be pro-
tected, and United States interests will be advanced,
within the global trading system which the WTO will
oversee.
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(3) The survival of the new WTO requires the
continuation of both trade liberalization and the
ability to respond effectively to unfair or otherwise
harmful trade practices.
(4) United States support for the WTO de-
pends upon obtaining mutual trade benefits through
the openness of foreign markets and the mainte-
nance of effective United States and WTO remedies
against unfair or otherwise harmful trade practices.
(5) Congress passed the Uruguay Round Agree-
ments Act based upon its understanding that effec-
tive trade remedies would not be eroded. These rem-
edies are essential to continue the process of opening
foreign markets to imports of goods and services and
to prevent harm to American industry and agri-
culture, particularly through foreign dumping and
subsidization.
(6) The continued support of the Congress for
the WTO is dependent upon a WTO dispute settle-
ment system that—
(A) operates in a fair and impartial man-
ner;
(B) does not add to the obligations of or
diminish the rights of the United States under
the Uruguay Round Agreements; and
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(C) does not exceed its authority, scope, or
established standard of review.
(b) PURPOSE.—It is the purpose of this title to pro-
vide for the establishment of the WTO Dispute Settlement
Review Commission to achieve the goals described in sub-
section (a)(6).
SEC. 202. ESTABLISHMENT OF COMMISSION.
(a) ESTABLISHMENT.—There is established a com-
mission to be known as the WTO Dispute Settlement Re-
view Commission (hereafter in this Act referred to as the
‘‘Commission’’).
(b) MEMBERSHIP.—
(1) COMPOSITION.—The Commission shall be
composed of five members all of whom shall be
judges of the Federal judicial circuits and shall be
appointed by the President, after consultation with
the majority leader and minority leader of the House
of Representatives, the majority leader and minority
leader of the Senate, the chairman and ranking
member of the Committee on Ways and Means of
the House of Representatives, and the chairman and
ranking member of the Committee on Finance of the
Senate.
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(2) DATE.—The appointments of the members
of the Commission shall be made no later than 60
days after the date of the enactment of this Act.
(c) PERIOD OF APPOINTMENT; VACANCIES.—
(1) IN GENERAL.—Members of the Commission
first appointed shall each be appointed for a term of
5 years. After the initial 5-year term, three members
of the Commission shall be appointed for terms of
3 years and the remaining two members shall be ap-
pointed for terms of 2 years.
(2) VACANCIES.—
(A) IN
GENERAL.—Any vacancy on the
Commission shall not affect its powers, but
shall be filled in the same manner as the origi-
nal appointment and shall be subject to the
same conditions as the original appointment.
(B) UNEXPIRED
TERM.—An individual
chosen to fill a vacancy shall be appointed for
the unexpired term of the member replaced.
(d) INITIAL MEETING.—No later than 30 days after
the date on which all members of the Commission have
been appointed, the Commission shall hold its first meet-
ing.
(e) MEETINGS.—The Commission shall meet at the
call of the Chairman.
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(f) QUORUM.—A majority of the members of the
Commission shall constitute a quorum, but a lesser num-
ber of members may hold hearings.
(g) CHAIRMAN AND VICE CHAIRMAN.—The Commis-
sion shall select a Chairman and Vice Chairman from
among its members.
SEC. 203. DUTIES OF THE COMMISSION.
(a) REVIEW OF WTO DISPUTE SETTLEMENT RE-
PORTS.—
(1) IN
GENERAL.—The Commission shall re-
view—
(A) all reports of dispute settlement panels
or the Appellate Body of the World Trade Or-
ganization in proceedings initiated by other par-
ties to the WTO which are adverse to the Unit-
ed States and which are adopted by the Dispute
Settlement Body, and
(B) upon request of the United States
Trade Representative, and any other report of
a dispute settlement panel or the Appellate
Body which is adopted by the Dispute Settle-
ment Body.
(2) SCOPE OF REVIEW.—In the case of any re-
port described in paragraph (1), the Commission
shall review the report and determine whether—
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(A) the panel or the Appellate Body, as the
case may be, exceeded its authority or its terms
of reference;
(B) the panel or the Appellate Body, as
the case may be, added to the obligations of or
diminished the rights of the United States
under the Uruguay Round Agreement which is
the subject of the report;
(C) the panel or the Appellate Body, as the
case may be, acted arbitrarily or capriciously,
engaged in misconduct, or demonstrably de-
parted from the procedures specified for panels
and the Appellate Body in the applicable Uru-
guay Round Agreement; and
(D) the report of the panel or the Appel-
late Body, as the case may be, deviated from
the applicable standard of review, including in
antidumping, countervailing duty, and other un-
fair trade remedy cases, including the standard
of review set forth in article 17.6 of the Agree-
ment on Implementation of article VI of the
General Agreement on Tariffs and Trade 1994.
(3) AFFIRMATIVE
DETERMINATION.—If the
Commission makes an affirmative determination
with respect to the action of a panel or the Appellate
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Body under subparagraph (A), (B), (C), or (D) of
paragraph (2), the Commission shall determine
whether the action of the panel or Appellate Body
materially affected the outcome of the report of the
panel or Appellate Body.
(b) DETERMINATION; REPORT.—
(1) DETERMINATION.—No later than 120 days
after the date on which a report of a panel or the
Appelate Body described in subsection (a)(1) is
adopted by the Dispute Settlement Body, the Com-
mission shall make a written determination with re-
spect to matters described in subsections (a)(2) and
(a)(3).
(2) REPORTS.—The Commission shall report
the determinations described in paragraph (1) to the
Committee on Ways and Means of the House of
Representatives and the Committee on Finance of
the Senate.
SEC. 204. POWERS OF THE COMMISSION.
(a) HEARINGS.—The Commission may hold such
hearings, sit and act at such times and places, take such
testimony, and receive such evidence as the Commission
considers advisable to carry out the purposes of this Act.
(b) INFORMATION FROM INTERESTED PARTIES AND
FEDERAL AGENCIES.—
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(1) NOTICE OF PANEL OR APPELLATE BODY
REPORT.—The United States Trade Representative
shall advise the Commission no later than 5 days
after the date the Dispute Settlement Body adopts
the report of a panel or the Appellate Body that is
adverse to the United States and shall immediately
publish notice of such advice in the Federal Reg-
ister, along with notice of an opportunity for inter-
ested parties to submit.
(2) SUBMISSIONS AND REQUESTS FOR INFOR-
MATION.—Any interested party may submit com-
ments to the Commission regarding the panel or Ap-
pellate Body report. The Commission may also se-
cure directly from any Federal department or agency
such information as the Commission considers nec-
essary to carry out the provisions of this Act. Upon
request of the Chairman of the Commission, the
head of such department or agency shall furnish
such information to the Commission.
(3) ACCESS TO PANEL AND APPELLATE BODY
DOCUMENTS.—The United States Trade Representa-
tive shall make available to the Commission all sub-
missions and relevant documents relating to the
panel or Appellate Body report, including any infor-
mation contained in such submissions identified by