I
105TH CONGRESS
1ST SESSION
H. R. 2651
To establish an Emergency Commission To End the Trade Deficit.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 9, 1997
Mr. DEFAZIO (for himself, Mr. FILNER, Ms. KAPTUR, Mr. BONIOR, Mr. LI-
PINSKI, Mr. MILLER of California, Mr. SANDERS, Mr. DELLUMS, Mr.
STARK, Mr. PASCRELL, Mr. TIERNEY, Mr. COSTELLO, Mr. HINCHEY,
Ms. SLAUGHTER, Mr. BROWN of Ohio, Mr. ABERCROMBIE, Mr. EVANS,
Ms. WATERS, Mr. STUPAK, Mr. PALLONE, Mr. BALDACCI, Mr.
DELAHUNT, and Ms. DELAURO) introduced the following bill; which was
referred to the Committee on Ways and Means
A BILL
To establish an Emergency Commission To End the Trade
Deficit.
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 ‘‘End the Trade Deficit
Act’’.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) The United States has had 21 years of con-
secutive annual merchandise trade deficits, totaling
$1,980,717,000,000.
(2) In 1996, the United States had the largest
negative trade balance in its history, amounting to
$187,617,000,000. It is the third consecutive year in
which the trade deficit has set a new record. Eco-
nomic forecasts anticipate continued growth in the
trade deficit in the next few years.
(3) Private economic forecasts now project that
the trade deficit will nearly double within the next
10 to 15 years.
(4) The positive net international asset position
that the United States built up over 100 years was
eliminated in the 1980s. The United States today
has become the world’s largest debtor nation, with a
net debt of more than $774,000,000,000.
(5) In recent times, the trade deficit has re-
tarded growth in the Nation’s gross domestic prod-
uct, increased the costs of servicing higher net for-
eign debt, and made the United States more depend-
ent on international financial considerations.
(6) The United States merchandise trade deficit
is characterized by large bilateral trade imbalances
with a handful of countries. Six countries (Japan,
China, Canada, Mexico, Germany, and Taiwan) ac-
counted for 92 percent of the United States trade
deficit in goods in 1996. Japan and China accounted
for one-half of the trade deficit.
(7) Today the United States trade deficit pri-
marily consists of high-value manufactured items.
Automobiles, office machines, electronic goods, and
telecommunications equipment now comprise nearly
three-fourths of the trade deficit. The United States
imports more cars from Mexico than it exports to
the rest of the world. Imports of manufactured
goods as a percentage of the United States manufac-
turing gross domestic product have risen from 11
percent in 1970 to more than 50 percent last year.
(8) While the United States has one of the
most open borders and economies in the world, the
United States faces significant tariff and nontariff
trade barriers with its trading partners. Current
overall trade balances do not reflect the actual com-
petitiveness or productivity of the United States
economy. Instead, they demonstrate the underlying
structural nature of the trade deficits. Full recip-
rocal market access remains an elusive goal as docu-
mented in the annual reports of the United States
Trade Representative.
(9) Since the last comprehensive review of na-
tional trade and investment policies was conducted
by a Presidential commission in 1970, there have
been massive worldwide economic and political
changes which have profoundly affected world trad-
ing relationships. The cold war has ended. It is no
longer necessary or prudent for United States trade
policy to be a residual of United States foreign pol-
icy. Globalization, the increased mobility of capital
and technology, the growth of transnational corpora-
tions, and the outsourcing of production across na-
tional boundaries, are reshaping both the compara-
tive and competitive trade advantages among na-
tions.
(10) The United States is once again at a criti-
cal juncture in trade policy development. The struc-
tural nature of the United States trade deficit and
its persistent growth must be reversed. The causes
and consequences of the trade deficit must be docu-
mented and a plan must be developed to eliminate
the merchandise trade deficit within the next 10
years.
SEC. 3. ESTABLISHMENT OF COMMISSION.
(a) ESTABLISHMENT.—There is established a com-
mission to be known as the Emergency Commission To
End the Trade Deficit (hereafter in this Act referred to
as the ‘‘Commission’’).
(b) PURPOSE.—The purpose of the Commission is to
develop a trade policy plan to eliminate the United States
merchandise trade deficit by the year 2007 and to develop
a competitive trade policy for the 21st century. The plan
shall include strategies necessary to achieve a balance of
trade that fully reflects the competitiveness and productiv-
ity of the United States and also improves the standard
of living of United States citizens.
(c) MEMBERSHIP OF COMMISSION.—
(1) COMPOSITION.—The Commission shall be
composed of 11 members of whom—
(A) 3 shall be appointed by the President,
1 of whom shall be appointed to represent labor
interests, 1 of whom shall be appointed to rep-
resent small businesses, and 1 of whom shall be
appointed to represent consumer protection in-
terests;
(B) 1 Senator and 1 other person shall be
appointed by the President pro tempore of the
Senate upon the recommendation of the Major-
ity Leader of the Senate;
(C) 1 Senator and 1 other person shall be
appointed by the President pro tempore of the
Senate upon the recommendation of the Minor-
ity Leader of the Senate;
(D) 1 Member of the House of Representa-
tives and 1 other person shall be appointed by
the Speaker of the House of Representatives;
and
(E) 1 Member of the House of Representa-
tives and 1 other person shall be appointed by
the Minority Leader of the House of Represent-
atives.
(2) QUALIFICATIONS OF MEMBERS.—
(A) PRESIDENTIAL
APPOINTMENTS.—Of
the persons appointed under paragraph (1)(A),
not more than 1 may be an officer, employee,
or paid consultant of the executive branch.
(B) OTHER APPOINTMENTS.—Persons who
are not Members of Congress, appointed under
subparagraph (B), (C), (D), or (E) of para-
graph (1), shall be persons who—
(i) have expertise in economics, inter-
national trade, manufacturing, labor, envi-
ronment, business, or have other pertinent
qualifications or experience; and
(ii) are not officers or employees of
the United States.
(C) OTHER CONSIDERATIONS.—In appoint-
ing Commission members, every effort shall be
made to ensure that the members—
(i) are representative of a broad cross-
section of economic and trade perspectives
within the United States; and
(ii) provide fresh insights to achieving
a trade deficit reduction plan.
(d) PERIOD OF APPOINTMENT; VACANCIES.—
(1) IN GENERAL.—Members shall be appointed
not later than 60 days after the date of enactment
of this Act and the appointment shall be for the life
of the Commission.
(2) VACANCIES.—Any vacancy in the Commis-
sion shall not affect its powers, but shall be filled in
the same manner as the original appointment.
(e) INITIAL MEETING.—Not 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.
(f) MEETINGS.—The Commission shall meet at the
call of the Chairperson.
(g) CHAIRPERSON AND VICE CHAIRPERSON.—The
members of the Commission shall elect a chairperson and
vice chairperson from among the members of the Commis-
sion.
(h) QUORUM.—A majority of the members of the
Commission shall constitute a quorum for the transaction
of business.
(i) VOTING.—Each member of the Commission shall
be entitled to 1 vote, which shall be equal to the vote of
every other member of the Commission.
SEC. 4. DUTIES OF THE COMMISSION.
(a) IN GENERAL.—The Commission shall be respon-
sible for developing a comprehensive trade policy plan, by
examining the economic policies, trade, tax, and invest-
ment laws, and other legal incentives and restrictions that
are relevant to reducing the United States trade deficit.
(b) RECOMMENDATIONS.—The Commission shall ex-
amine and make recommendations to Congress and the
President on the following:
(1) The manner in which the Government of
the United States establishes and administers the
Nation’s fundamental trade policies and objectives,
including—
(A) the relationship of the merchandise
trade balance to the overall well-being of the
United States economy and in particular the
impact the trade balance has on wages and em-
ployment in various sectors of the United
States economy;
(B) the relationship of United States for-
eign policy objectives to trade policy and the ex-
tent to which foreign policy considerations re-
ceive a priority over trade objectives;
(C) the effects the trade deficits in the
areas of manufacturing and technology have on
defense production and innovation capabilities
of the United States;
(D) the extent to which United States
monetary policies and the need for foreign cap-
ital to finance the current account deficit influ-
ence trade objectives;
(E) the coordination, allocation, and ac-
countability of trade responsibilities among
Federal agencies; and
(F) the methods for improving and en-
hancing systematic congressional review of for-
eign policy and trade policy as part of a plan
to establish a coordinated set of national eco-
nomic priorities.
(2) The causes and consequences of both the
overall trade deficit and specific bilateral trade defi-
cits, including—
(A) identification and quantification of the
macroeconomic, sectoral, and bilateral trade
factors contributing to the United States trade
deficit with various countries;
(B) identification and quantification of the
impact of the trade deficit on the domestic
economy, industrial base, manufacturing capac-
ity, number and quality of jobs, productivity,
wages, health, safety, and environmental stand-
ards, and the United States standard of living;
(C) identification and quantification of in-
dividual industrial, manufacturing, and produc-
tion 
sectors, 
and 
intraindustry 
and
intracompany transactions which contribute to
or are impacted by United States trade deficits;
(D) a review of the adequacy of the cur-
rent collection and reporting of trade data, and
the identification and development of additional
data bases and economic measurements that
may be needed to properly quantify the factors
described in subparagraphs (A), (B), and (C);
(E) the relationship that tariff and non-
tariff barriers have to trade deficits and the ex-
tent to which trade deficits have become struc-
tural;
(F) the extent to which there is reciprocal
market access in each country with which the
United States has a persistent and substantial
bilateral trade deficit; and
(G) the role of transhipments on bilateral
trade, including foreign imports and exports,
with special attention to transhipments under
the North American Free Trade Agreement.
(3) The relationship of United States trade
deficits to both comparative and competitive trade
advantages within the global economy, including—
(A) a systematic analysis of the United
States trade patterns with different trading
partners, to what extent the trade patterns are
based on comparative and competitive trade ad-
vantages, and how the trade advantages relate
to the goods that are exported to and imported
from various trading partners;
(B) the extent to which the increased mo-
bility of capital and technology has changed
both comparative and competitive trade advan-
tages;
(C) identification and quantification of
goods imported into the United States which
are produced by child and forced labor, or
under social and environmental conditions that
do not comply with United States law;
(D) the impact that labor standards (in-
cluding the ability of labor to organize, bargain
collectively, and exercise human rights) have on
world trade;
(E) the impact that currency exchange
rates and the manipulation of exchange rates
have on world trade and trade deficits;
(F) the effect that offset and technology
transfer agreements have on the long-term com-
petitiveness of the United States manufacturing
sectors; and
(G) the extent to which international
agreements impact on United States competi-
tiveness.
(4) The flow of investments both into and out
of the United States, including—
(A) the impact such investments have on
the United States trade deficit and living stand-
ards of United States production workers;
(B) the impact such investments have on
United States labor, community, environmental,
health, and safety standards;
(C) the extent to which United States tax
laws, such as income deferral, contribute to the
movement of manufacturing facilities and jobs
to foreign locations;
(D) the identification and quantification of
domestic plant closures and the movement of
such plants to foreign locations for production
of goods for the United States market;
(E) the impact of implied or threatened
plant closings and movement of jobs to foreign
locations on United States wage rates and
working conditions;
(F) the effect of investment flows on wages
in countries with developed economies and on
countries of the former Soviet Union; and
(G) the effect of barriers to United States
foreign direct investment in developed and de-
veloping nations, particularly nations with
which the United States has a trade deficit.
(5) Evaluation of current policies and sugges-
tions for alternative strategies for the United States
to systematically reduce the trade deficit and im-
prove the economic well-being of United States citi-
zens, including suggestions for—
(A) the development of bilateral and multi-
lateral trade relationships based on market ac-
cess reciprocity;
(B) the retention and expansion of United
States manufacturing, agricultural, and tech-
nology sectors, which are vital to the economy
and security of the United States;
(C) the discouragement of the expatriation
of United States plants, jobs, and production to
nations that have achieved competitive advan-
tages by permitting lower wages or lower
health, safety, and environmental standards, or
by imposing requirements with respect to in-
vestment, performance, or other obligations;
(D) methods by which the United States
can effectively compete in a global economy
while improving the labor, social, and environ-
mental standards of its trading partners, par-
ticularly developing nations;
(E) methods by which the United States
can respond to substantial shifts or manipula-
tion of currency exchange rates which distort
trade relationships;
(F) methods for overcoming and offsetting
trade barriers which are either not subject to or
otherwise inadequately addressed by the World
Trade Organization or other multilateral ar-
rangements;
(G) specific strategies for achieving im-
proved trade balances with those nations that
the United States has significant, persistent
sectoral or bilateral trade deficits, including
Japan, China, Canada, Mexico, Germany, and
Taiwan;
(H) methods for the United States to re-
spond to the particular needs and cir-
cumstances of developing and developed nations
in a manner that is mutually beneficial; and
(I) changes that may be required to cur-
rent trade agreements and organizations to
allow the United States to pursue and nurture
economic growth for its manufacturing, agri-
culture, and other production sectors in a man-
ner that insures improved compensation and
quality of life for United States citizens.
SEC. 5. FINAL REPORT; CONGRESSIONAL HEARINGS.
(a) FINAL REPORT.—
(1) IN GENERAL.—Not later than 16 months
after the date of enactment of this Act, the Commis-
sion shall submit to the President and Congress a
final report which contains—
(A) the findings and conclusions of the
Commission described in section 4;
(B) a detailed plan for reducing both the
overall trade deficit and specific bilateral trade
deficits; and
(C) any recommendations for administra-
tive and legislative actions necessary to achieve
such reductions.
(2) SEPARATE
VIEWS.—Any member of the
Commission may submit additional findings and rec-
ommendations as part of the final report.
(b) CONGRESSIONAL HEARINGS.—Not later than 6
months after the final report described in subsection (a)
is submitted, the Committee on Ways and Means of the
House of Representatives and the Committee on Finance
of the Senate shall hold hearings on the report.
SEC. 6. POWERS OF 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
may find advisable to fulfill the requirements of this Act.
The Commission shall hold at least 7 public hearings, 1
or more in Washington, D.C. and 4 in different regions
of the United States.
(b) INFORMATION FROM FEDERAL AGENCIES.—The
Commission may secure directly from any Federal depart-
ment or agency such information as the Commission con-
siders necessary to carry out the provisions of this Act.
Upon request of the Chairperson of the Commission, the
head of such department or agency shall furnish such in-
formation to the Commission.
(c) POSTAL SERVICES.—The Commission may use
the United States mails in the same manner and under
the same conditions as other departments and agencies of
the Federal Government.
SEC. 7. COMMISSION PERSONNEL MATTERS.
(a) COMPENSATION OF MEMBERS.—Each member of
the Commission who is not an officer or employee of the
Federal Government shall be compensated at a rate equal
to the daily equivalent of the annual rate of basic pay pre-
scribed for level IV of the Executive Schedule under sec-
tion 5315 of title 5, United States Code, for each day (in-
cluding travel time) during which such member is engaged
in the performance of the duties of the Commission. All
members of the Commission who are officers or employees
of the United States shall serve without compensation in
tive director and other personnel may not exceed the
rate payable for level V of the Executive Schedule
under section 5316 of such title.
(d) DETAIL
OF GOVERNMENT EMPLOYEES.—Any
Federal Government employee may be detailed to the
Commission without reimbursement, and such detail shall
be without interruption or loss of civil service status or
privilege.
(e) PROCUREMENT OF TEMPORARY AND INTERMIT-
TENT SERVICES.—The Chairperson of the Commission
may procure temporary and intermittent services under
section 3109(b) of title 5, United States Code, at rates
for individuals which do not exceed the daily equivalent
of the annual rate of basic pay prescribed for level V of
the Executive Schedule under section 5316 of such title.
SEC. 8. AUTHORIZATION OF APPROPRIATIONS; GAO AUDIT.
(a) IN GENERAL.—There are authorized to be appro-
priated $2,000,000 to the Commission to carry out the
provisions of this Act.
(b) GAO AUDIT.—Not later than 6 months after ter-
mination of the Commission, the Comptroller General of
the United States shall complete an audit of the financial
books and records of the Commission to determine that
the limitation on expenses has been met, and shall submit
a report on the audit to the President and Congress.
SEC. 9. TERMINATION OF COMMISSION.
The Commission shall cease to exist 30 days after
the date on which the Commission submits the final report
under section 5.
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