IB 
Union Calendar No. 171 
109TH CONGRESS 
1ST SESSION H. R. 4340 
[Report No. 109–318] 
To implement the United States-Bahrain Free Trade Agreement. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 16, 2005 
Mr. BLUNT (for himself and Mr. RANGEL) (both by request) introduced the 
following bill; which was referred to the Committee on Ways and Means 
DECEMBER 6, 2005 
Committed to the Committee of the Whole House on the State of the Union 
and ordered to be printed 
A BILL 
To implement the United States-Bahrain Free Trade 
Agreement. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘United States-Bahrain Free Trade Agreement Imple-
mentation Act’’.
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Purposes. 
Sec. 3. Definitions. 
TITLE I—APPROVAL OF, AND GENERAL PROVISIONS RELATING 
TO, THE AGREEMENT 
Sec. 101. Approval and entry into force of the Agreement. 
Sec. 102. Relationship of the agreement to United States and State law. 
Sec. 103. Implementing actions in anticipation of entry into force and initial 
regulations. 
Sec. 104. Consultation and layover provisions for, and effective date of, pro-
claimed actions. 
Sec. 105. Administration of dispute settlement proceedings. 
Sec. 106. Effective dates; effect of termination. 
TITLE II—CUSTOMS PROVISIONS 
Sec. 201. Tariff modifications. 
Sec. 202. Rules of origin. 
Sec. 203. Customs user fees. 
Sec. 204. Enforcement relating to trade in textile and apparel goods. 
Sec. 205. Regulations. 
TITLE III—RELIEF FROM IMPORTS 
Sec. 301. Definitions. 
Subtitle A—Relief From Imports Benefiting From the Agreement 
Sec. 311. Commencing of action for relief. 
Sec. 312. Commission action on petition. 
Sec. 313. Provision of relief. 
Sec. 314. Termination of relief authority. 
Sec. 315. Compensation authority. 
Sec. 316. Confidential business information. 
Subtitle B—Textile and Apparel Safeguard Measures 
Sec. 321. Commencement of action for relief. 
Sec. 322. Determination and provision of relief. 
Sec. 323. Period of relief. 
Sec. 324. Articles exempt from relief. 
Sec. 325. Rate after termination of import relief. 
Sec. 326. Termination of relief authority. 
Sec. 327. Compensation authority. 
Sec. 328. Confidential business information. 
TITLE IV—PROCUREMENT 
Sec. 401. Eligible products.
SEC. 2. PURPOSES. 
The purposes of this Act are— 
(1) to approve and implement the Free Trade 
Agreement between the United States and Bahrain 
entered into under the authority of section 2103(b) 
of the Bipartisan Trade Promotion Authority Act of 
2002 (19 U.S.C. 3803(b)); 
(2) to strengthen and develop economic rela-
tions between the United States and Bahrain for 
their mutual benefit; 
(3) to establish free trade between the 2 nations 
through the reduction and elimination of barriers to 
trade in goods and services; and 
(4) to lay the foundation for further coopera-
tion to expand and enhance the benefits of such 
Agreement. 
SEC. 3. DEFINITIONS. 
In this Act: 
(1) 
AGREEMENT.—The 
term 
‘‘Agreement’’ 
means the United States-Bahrain Free Trade Agree-
ment approved by Congress under section 101(a)(1). 
(2) HTS.—The term ‘‘HTS’’ means the Har-
monized Tariff Schedule of the United States. 
(3) TEXTILE
OR
APPAREL
GOOD.—The term 
‘‘textile or apparel good’’ means a good listed in the 
Annex to the Agreement on Textiles and Clothing
referred to in section 101(d)(4) of the Uruguay 
Round Agreements Act (19 U.S.C. 3511(d)(4)). 
TITLE 
I—APPROVAL 
OF, 
AND 
GENERAL 
PROVISIONS 
RE-
LATING TO, THE AGREEMENT 
SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE 
AGREEMENT. 
(a) APPROVAL OF AGREEMENT AND STATEMENT OF 
ADMINISTRATIVE ACTION.—Pursuant to section 2105 of 
the Bipartisan Trade Promotion Authority Act of 2002 
(19 U.S.C. 3805) and section 151 of the Trade Act of 
1974 (19 U.S.C. 2191), Congress approves— 
(1) the United States-Bahrain Free Trade 
Agreement entered into on September 14, 2004, 
with Bahrain and submitted to Congress on Novem-
ber 16, 2005; and 
(2) the statement of administrative action pro-
posed to implement the Agreement that was sub-
mitted to Congress on November 16, 2005. 
(b) CONDITIONS FOR ENTRY INTO FORCE OF THE 
AGREEMENT.—At such time as the President determines 
that Bahrain has taken measures necessary to bring it 
into compliance with those provisions of the Agreement 
that are to take effect on the date on which the Agreement 
enters into force, the President is authorized to exchange
notes with the Government of Bahrain providing for the 
entry into force, on or after January 1, 2006, of the 
Agreement with respect to the United States. 
SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED 
STATES AND STATE LAW. 
(a) RELATIONSHIP
OF AGREEMENT
TO UNITED 
STATES LAW.— 
(1) UNITED STATES LAW TO PREVAIL IN CON-
FLICT.—No provision of the Agreement, nor the ap-
plication of any such provision to any person or cir-
cumstance, which is inconsistent with any law of the 
United States shall have effect. 
(2) CONSTRUCTION.—Nothing in this Act shall 
be construed— 
(A) to amend or modify any law of the 
United States; or 
(B) to limit any authority conferred under 
any law of the United States, 
unless specifically provided for in this Act. 
(b) RELATIONSHIP
OF
AGREEMENT
TO
STATE 
LAW.— 
(1) LEGAL CHALLENGE.—No State law, or the 
application thereof, may be declared invalid as to 
any person or circumstance on the ground that the 
provision or application is inconsistent with the
Agreement, except in an action brought by the 
United States for the purpose of declaring such law 
or application invalid. 
(2) DEFINITION OF STATE LAW.—For purposes 
of this subsection, the term ‘‘State law’’ includes— 
(A) any law of a political subdivision of a 
State; and 
(B) any State law regulating or taxing the 
business of insurance. 
(c) EFFECT OF AGREEMENT WITH RESPECT TO PRI-
VATE REMEDIES.—No person other than the United 
States— 
(1) shall have any cause of action or defense 
under the Agreement or by virtue of congressional 
approval thereof; or 
(2) may challenge, in any action brought under 
any provision of law, any action or inaction by any 
department, agency, or other instrumentality of the 
United States, any State, or any political subdivision 
of a State, on the ground that such action or inac-
tion is inconsistent with the Agreement. 
SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF 
ENTRY INTO FORCE AND INITIAL REGULA-
TIONS. 
(a) IMPLEMENTING ACTIONS.—
(1) PROCLAMATION
AUTHORITY.—After the 
date of the enactment of this Act— 
(A) the President may proclaim such ac-
tions, and 
(B) other appropriate officers of the 
United States Government may issue such reg-
ulations, 
as may be necessary to ensure that any provision of 
this Act, or amendment made by this Act, that takes 
effect on the date on which the Agreement enters 
into force is appropriately implemented on such 
date, but no such proclamation or regulation may 
have an effective date earlier than the date on which 
the Agreement enters into force. 
(2) EFFECTIVE DATE OF CERTAIN PROCLAIMED 
ACTIONS.—Any action proclaimed by the President 
under the authority of this Act that is not subject 
to the consultation and layover provisions under sec-
tion 104 may not take effect before the 15th day 
after the date on which the text of the proclamation 
is published in the Federal Register. 
(3) WAIVER OF 15-DAY RESTRICTION.—The 15- 
day restriction in paragraph (2) on the taking effect 
of proclaimed actions is waived to the extent that 
the application of such restriction would prevent the
taking effect on the date on which the Agreement 
enters into force of any action proclaimed under this 
section. 
(b) INITIAL REGULATIONS.—Initial regulations nec-
essary or appropriate to carry out the actions required by 
or authorized under this Act or proposed in the statement 
of 
administrative 
action 
submitted 
under 
section 
101(a)(2) to implement the Agreement shall, to the max-
imum extent feasible, be issued within 1 year after the 
date on which the Agreement enters into force. In the case 
of any implementing action that takes effect on a date 
after the date on which the Agreement enters into force, 
initial regulations to carry out that action shall, to the 
maximum extent feasible, be issued within 1 year after 
such effective date. 
SEC. 104. CONSULTATION AND LAYOVER PROVISIONS FOR, 
AND EFFECTIVE DATE OF, PROCLAIMED AC-
TIONS. 
If a provision of this Act provides that the implemen-
tation of an action by the President by proclamation is 
subject to the consultation and layover requirements of 
this section, such action may be proclaimed only if— 
(1) the President has obtained advice regarding 
the proposed action from—
(A) the appropriate advisory committees 
established under section 135 of the Trade Act 
of 1974 (19 U.S.C. 2155); and 
(B) the United States International Trade 
Commission; 
(2) the President has submitted to the Com-
mittee on Finance of the Senate and the Committee 
on Ways and Means of the House of Representatives 
a report that sets forth— 
(A) the action proposed to be proclaimed 
and the reasons therefor; and 
(B) the advice obtained under paragraph 
(1); 
(3) a period of 60 calendar days, beginning on 
the first day on which the requirements set forth in 
paragraphs (1) and (2) have been met has expired; 
and 
(4) the President has consulted with the Com-
mittees referred to in paragraph (2) regarding the 
proposed action during the period referred to in 
paragraph (3). 
SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PRO-
CEEDINGS. 
(a) ESTABLISHMENT OR DESIGNATION OF OFFICE.— 
The President is authorized to establish or designate with-
in the Department of Commerce an office that shall be 
responsible for providing administrative assistance to pan-
els established under chapter 19 of the Agreement. The 
office may not be considered to be an agency for purposes 
of section 552 of title 5, United States Code. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated for each fiscal year after 
fiscal year 2005 to the Department of Commerce such 
sums as may be necessary for the establishment and oper-
ations of the office established or designated under sub-
section (a) and for the payment of the United States share 
of the expenses of panels established under chapter 19 of 
the Agreement. 
SEC. 106. EFFECTIVE DATES; EFFECT OF TERMINATION. 
(a) EFFECTIVE DATES.—Except as provided in sub-
section (b), the provisions of this Act and the amendments 
made by this Act take effect on the date on which the 
Agreement enters into force. 
(b) EXCEPTIONS.—Sections 1 through 3 and this 
title take effect on the date of the enactment of this Act. 
(c) TERMINATION
OF
THE AGREEMENT.—On the 
date on which the Agreement terminates, the provisions 
of this Act (other than this subsection) and the amend-
ments made by this Act shall cease to be effective.
TITLE II—CUSTOMS PROVISIONS 
SEC. 201. TARIFF MODIFICATIONS. 
(a) TARIFF MODIFICATIONS PROVIDED FOR IN THE 
AGREEMENT.— 
(1) PROCLAMATION
AUTHORITY.—The Presi-
dent may proclaim— 
(A) such modifications or continuation of 
any duty, 
(B) such continuation of duty-free or ex-
cise treatment, or 
(C) such additional duties, 
as the President determines to be necessary or ap-
propriate to carry out or apply articles 2.3, 2.5, 2.6, 
3.2.8, and 3.2.9, and Annex 2–B of the Agreement. 
(2) EFFECT ON BAHRAINI GSP STATUS.—Not-
withstanding section 502(a)(1) of the Trade Act of 
1974 (19 U.S.C. 2462(a)(1)), the President shall, on 
the date on which the Agreement enters into force, 
terminate the designation of Bahrain as a bene-
ficiary developing country for purposes of title V of 
the Trade Act of 1974 (19 U.S.C. 2461 et seq.). 
(b) OTHER TARIFF MODIFICATIONS.—Subject to the 
consultation and layover provisions of section 104, the 
President may proclaim—
(1) such modifications or continuation of any 
duty, 
(2) such modifications as the United States 
may agree to with Bahrain regarding the staging of 
any duty treatment set forth in Annex 2–B of the 
Agreement, 
(3) such continuation of duty-free or excise 
treatment, or 
(4) such additional duties, 
as the President determines to be necessary or appropriate 
to maintain the general level of reciprocal and mutually 
advantageous concessions with respect to Bahrain pro-
vided for by the Agreement. 
(c) CONVERSION TO AD VALOREM RATES.—For pur-
poses of subsections (a) and (b), with respect to any good 
for which the base rate in the Tariff Schedule of the 
United States to Annex 2–B of the Agreement is a specific 
or compound rate of duty, the President may substitute 
for the base rate an ad valorem rate that the President 
determines to be equivalent to the base rate. 
SEC. 202. RULES OF ORIGIN. 
(a) APPLICATION
AND INTERPRETATION.—In this 
section: 
(1) TARIFF
CLASSIFICATION.—The basis for 
any tariff classification is the HTS.
(2) REFERENCE
TO
HTS.—Whenever in this 
section there is a reference to a heading or sub-
heading, such reference shall be a reference to a 
heading or subheading of the HTS. 
(b) ORIGINATING GOODS.— 
(1) IN
GENERAL.—For purposes of this Act 
and for purposes of implementing the preferential 
tariff treatment provided for under the Agreement, 
a good is an originating good if— 
(A) the good is imported directly— 
(i) from the territory of Bahrain into 
the territory of the United States; or 
(ii) from the territory of the United 
States into the territory of Bahrain; and 
(B)(i) the good is a good wholly the 
growth, product, or manufacture of Bahrain or 
the United States, or both; 
(ii) the good (other than a good to which 
clause (iii) applies) is a new or different article 
of commerce that has been grown, produced, or 
manufactured in Bahrain or the United States, 
or both, and meets the requirements of para-
graph (2); or 
(iii)(I) the good is a good covered by 
Annex 3–A or 4–A of the Agreement;
(II)(aa) each of the nonoriginating mate-
rials used in the production of the good under-
goes an applicable change in tariff classification 
specified in such Annex as a result of produc-
tion occurring entirely in the territory of Bah-
rain or the United States, or both; or 
(bb) the good otherwise satisfies the re-
quirements specified in such Annex; and 
(III) the good satisfies all other applicable 
requirements of this section. 
(2) REQUIREMENTS.—A good described in 
paragraph (1)(B)(ii) is an originating good only if 
the sum of— 
(A) the value of each material produced in 
the territory of Bahrain or the United States, 
or both, and 
(B) the direct costs of processing oper-
ations performed in the territory of Bahrain or 
the United States, or both, 
is not less than 35 percent of the appraised value of 
the good at the time the good is entered into the ter-
ritory of the United States. 
(c) CUMULATION.— 
(1) ORIGINATING GOOD OR MATERIAL INCOR-
PORATED
INTO
GOODS
OF
OTHER
COUNTRY.—An
originating good, or a material produced in the terri-
tory of Bahrain or the United States, or both, that 
is incorporated into a good in the territory of the 
other country shall be considered to originate in the 
territory of the other country. 
(2) MULTIPLE
PRODUCERS.—A good that is 
grown, produced, or manufactured in the territory of 
Bahrain or the United States, or both, by 1 or more 
producers, is an originating good if the good satis-
fies the requirements of subsection (b) and all other 
applicable requirements of this section. 
(d) VALUE OF MATERIALS.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the value of a material produced in the 
territory of Bahrain or the United States, or both, 
includes the following: 
(A) The price actually paid or payable for 
the material by the producer of the good. 
(B) The freight, insurance, packing, and 
all other costs incurred in transporting the ma-
terial to the producer’s plant, if such costs are 
not included in the price referred to in subpara-
graph (A). 
(C) The cost of waste or spoilage resulting 
from the use of the material in the growth, pro-
duction, or manufacture of the good, less the 
value of recoverable scrap. 
(D) Taxes or customs duties imposed on 
the material by Bahrain or the United States, 
or both, if the taxes or customs duties are not 
remitted upon exportation from the territory of 
Bahrain or the United States, as the case may 
be. 
(2) EXCEPTION.—If the relationship between 
the producer of a good and the seller of a material 
influenced the price actually paid or payable for the 
material, or if there is no price actually paid or pay-
able by the producer for the material, the value of 
the material produced in the territory of Bahrain or 
the United States, or both, includes the following: 
(A) All expenses incurred in the growth, 
production, or manufacture of the material, in-
cluding general expenses. 
(B) A reasonable amount for profit. 
(C) Freight, insurance, packing, and all 
other costs incurred in transporting the mate-
rial to the producer’s plant. 
(e) PACKAGING AND PACKING MATERIALS AND CON-
TAINERS FOR RETAIL SALE AND FOR SHIPMENT.—Pack-
aging and packing materials and containers for retail sale
and shipment shall be disregarded in determining whether 
a good qualifies as an originating good, except to the ex-
tent that the value of such packaging and packing mate-
rials and containers has been included in meeting the re-
quirements set forth in subsection (b)(2). 
(f) INDIRECT MATERIALS.—Indirect materials shall 
be disregarded in determining whether a good qualifies as 
an originating good, except that the cost of such indirect 
materials may be included in meeting the requirements set 
forth in subsection (b)(2). 
(g) TRANSIT AND TRANSSHIPMENT.—A good shall 
not be considered to meet the requirement of subsection 
(b)(1)(A) if, after exportation from the territory of Bah-
rain or the United States, the good undergoes production, 
manufacturing, or any other operation outside the terri-
tory of Bahrain or the United States, other than unload-
ing, reloading, or any other operation necessary to pre-
serve the good in good condition or to transport the good 
to the territory of Bahrain or the United States. 
(h) TEXTILE AND APPAREL GOODS.— 
(1) DE MINIMIS AMOUNTS OF NONORIGINATING 
MATERIALS.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), a textile or apparel good 
that is not an originating good because certain
fibers or yarns used in the production of the 
component of the good that determines the tar-
iff classification of the good do not undergo an 
applicable change in tariff classification set out 
in Annex 3–A of the Agreement shall be consid-
ered to be an originating good if the total 
weight of all such fibers or yarns in that com-
ponent is not more than 7 percent of the total 
weight of that component. 
(B) 
CERTAIN
TEXTILE
OR
APPAREL 
GOODS.—A textile or apparel good containing 
elastomeric yarns in the component of the good 
that determines the tariff classification of the 
good shall be considered to be an originating 
good only if such yarns are wholly formed in 
the territory of Bahrain or the United States. 
(C) YARN, FABRIC, OR
GROUP
OF
FI-
BERS.—For purposes of this paragraph, in the 
case of a textile or apparel good that is a yarn, 
fabric, or group of fibers, the term ‘‘component 
of the good that determines the tariff classifica-
tion of the good’’ means all of the fibers in the 
yarn, fabric, or group of fibers. 
(2) GOODS
PUT
UP
IN
SETS
FOR
RETAIL 
SALE.—Notwithstanding the rules set forth in Annex
3–A of the Agreement, textile or apparel goods clas-
sifiable as goods put up in sets for retail sale as pro-
vided for in General Rule of Interpretation 3 of the 
HTS shall not be considered to be originating goods 
unless each of the goods in the set is an originating 
good or the total value of the nonoriginating goods 
in the set does not exceed 10 percent of the value 
of the set determined for purposes of assessing cus-
toms duties. 
(i) DEFINITIONS.—In this section: 
(1) DIRECT
COSTS
OF
PROCESSING
OPER-
ATIONS.— 
(A) IN GENERAL.—The term ‘‘direct costs 
of processing operations’’, with respect to a 
good, includes, to the extent they are includable 
in the appraised value of the good when im-
ported into Bahrain or the United States, as 
the case may be, the following: 
(i) All actual labor costs involved in 
the growth, production, or manufacture of 
the good, including fringe benefits, on-the- 
job training, and the cost of engineering, 
supervisory, quality control, and similar 
personnel.
(ii) Tools, dies, molds, and other indi-
rect materials, and depreciation on ma-
chinery and equipment that are allocable 
to the good. 
(iii) Research, development, design, 
engineering, and blueprint costs, to the ex-
tent that they are allocable to the good. 
(iv) Costs of inspecting and testing 
the good. 
(v) Costs of packaging the good for 
export to the territory of the other country. 
(B) EXCEPTIONS.—The term ‘‘direct costs 
of processing operations’’ does not include costs 
that are not directly attributable to a good or 
are not costs of growth, production, or manu-
facture of the good, such as— 
(i) profit; and 
(ii) general expenses of doing business 
that are either not allocable to the good or 
are not related to the growth, production, 
or manufacture of the good, such as ad-
ministrative salaries, casualty and liability 
insurance, advertising, and sales staff sala-
ries, commissions, or expenses.
(2) GOOD.—The term ‘‘good’’ means any mer-
chandise, product, article, or material. 
(3) GOOD WHOLLY THE GROWTH, PRODUCT, OR 
MANUFACTURE
OF
BAHRAIN
OR
THE
UNITED 
STATES, OR
BOTH.—The term ‘‘good wholly the 
growth, product, or manufacture of Bahrain or the 
United States, or both’’ means— 
(A) a mineral good extracted in the terri-
tory of Bahrain or the United States, or both; 
(B) a vegetable good, as such a good is 
provided for in the HTS, harvested in the terri-
tory of Bahrain or the United States, or both; 
(C) a live animal born and raised in the 
territory of Bahrain or the United States, or 
both; 
(D) a good obtained from live animals 
raised in the territory of Bahrain or the United 
States, or both; 
(E) a good obtained from hunting, trap-
ping, or fishing in the territory of Bahrain or 
the United States, or both; 
(F) a good (fish, shellfish, and other ma-
rine life) taken from the sea by vessels reg-
istered or recorded with Bahrain or the United 
States and flying the flag of that country;
(G) a good produced from goods referred 
to in subparagraph (F) on board factory ships 
registered or recorded with Bahrain or the 
United States and flying the flag of that coun-
try; 
(H) a good taken by Bahrain or the 
United States or a person of Bahrain or the 
United States from the seabed or beneath the 
seabed outside territorial waters, if Bahrain or 
the United States, as the case may be, has 
rights to exploit such seabed; 
(I) a good taken from outer space, if such 
good is obtained by Bahrain or the United 
States or a person of Bahrain or the United 
States and not processed in the territory of a 
country other than Bahrain or the United 
States; 
(J) waste and scrap derived from— 
(i) production or manufacture in the 
territory of Bahrain or the United States, 
or both; or 
(ii) used goods collected in the terri-
tory of Bahrain or the United States, or 
both, if such goods are fit only for the re-
covery of raw materials;
(K) a recovered good derived in the terri-
tory of Bahrain or the United States from used 
goods and utilized in the territory of that coun-
try in the production of remanufactured goods; 
and 
(L) a good produced in the territory of 
Bahrain or the United States, or both, exclu-
sively— 
(i) from goods referred to in subpara-
graphs (A) through (J), or 
(ii) from the derivatives of goods re-
ferred to in clause (i), 
at any stage of production. 
(4) INDIRECT MATERIAL.—The term ‘‘indirect 
material’’ means a good used in the growth, produc-
tion, manufacture, testing, or inspection of a good 
but not physically incorporated into the good, or a 
good used in the maintenance of buildings or the op-
eration of equipment associated with the growth, 
production, or manufacture of a good, including— 
(A) fuel and energy; 
(B) tools, dies, and molds; 
(C) spare parts and materials used in the 
maintenance of equipment and buildings;