I
104TH CONGRESS
1ST SESSION
H. R. 465
To ensure that the Caribbean Basin Initiative is not adversely affected by
the implementation of the North American Free Trade Agreement and
to authorize entry into free trade agreements between the United States
and certain Caribbean Basin countries.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 11, 1995
Mr. GIBBONS introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To ensure that the Caribbean Basin Initiative is not ad-
versely affected by the implementation of the North
American Free Trade Agreement and to authorize entry
into free trade agreements between the United States
and certain Caribbean Basin countries.
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 ‘‘Caribbean Basin Free
Trade Agreements Act’’.
HR 465 IH
SEC. 2. CONGRESSIONAL FINDINGS.
The Congress finds that the continuation and
strengthening of the commitment of the United States, as
expressed by the enactment of the Caribbean Basin Eco-
nomic Recovery Act and the Caribbean Basin Economic
Recovery Expansion Act of 1990, to the successful devel-
opment of the Caribbean region requires the enactment
of provisions—
(1) to encourage the continuation of structural
reform efforts by Caribbean countries toward market
economies and trade liberalization;
(2) to preserve existing economic advantages
under the Caribbean Basin Initiative program and
avoid the potential diversion of investment from ben-
eficiary countries under the program to Mexico as a
result of the North American Free Trade Agree-
ment;
(3) to maintain and increase trade benefits
under the Caribbean Basin Initiative program in
order to promote further economic development and
political stability in beneficiary countries and to ex-
pand United States export opportunities in the Car-
ibbean region; and
(4) to encourage and create further economic
integration in the Western Hemisphere through free
trade arrangements that provide United States busi-
HR 465 IH
ness and labor reciprocal benefits through the re-
moval of barriers to trade and investment in goods
and services on a mutually advantageous basis.
TITLE 
I—RELATIONSHIP 
OF
NAFTA IMPLEMENTATION TO
THE OPERATION OF THE CAR-
IBBEAN BASIN INITIATIVE
SEC. 101. TEMPORARY PROVISIONS TO PROVIDE NAFTA
PARITY TO BENEFICIARY COUNTRY ECONO-
MIES.
(a) TEMPORARY PROVISIONS.—Section 213(b) of the
Caribbean Basin Economic Recovery Act (19 U.S.C.
2703(b)) is amended to read as follows:
‘‘(b) IMPORT-SENSITIVE ARTICLES.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2)
through (5), the duty-free treatment provided under
this title does not apply to—
‘‘(A) textile and apparel articles which are
subject to textile agreements;
‘‘(B) footwear not designated at the time
of the effective date of this title as eligible arti-
cles for the purpose of the generalized system
of preferences under title V of the Trade Act of
1974;
HR 465 IH
‘‘(C) tuna, prepared or preserved in any
manner, in airtight containers;
‘‘(D) petroleum, or any product derived
from petroleum, provided for in headings 2709
and 2710 of the Harmonized Tariff Schedule of
the United States;
‘‘(E) watches and watch parts (including
cases, bracelets and straps), of whatever type
including, but not limited to, mechanical, quartz
digital or quartz analog, if such watches or
watch parts contain any material which is the
product of any country with respect to which
HTS column 2 rates of duty apply; or
‘‘(F) articles to which reduced rates of
duty apply under subsection (h).
‘‘(2) NAFTA TRANSITION PERIOD TREATMENT
OF CERTAIN TEXTILE AND APPAREL ARTICLES.—
‘‘(A) EQUIVALENT
TARIFF
AND
QUOTA
TREATMENT.—During the transition period—
‘‘(i) the tariff treatment accorded at
any time to any textile or apparel article
that originates in the territory of a bene-
ficiary country shall be identical to the tar-
iff treatment that is accorded during such
time under section 2 of the Annex to a like
HR 465 IH
article that originates in the territory of
Mexico and is imported into the United
States;
‘‘(ii) duty-free treatment under this
title shall apply to any textile or apparel
article of a beneficiary country that is im-
ported into the United States and that—
‘‘(I) meets the same require-
ments (other than assembly in Mex-
ico) as those specified in Appendix 2.4
of the Annex (relating to goods as-
sembled from fabric wholly formed
and cut in the United States) for the
duty free entry of a like article assem-
bled in Mexico; or
‘‘(II) is identified under subpara-
graph (C) as a handloomed, hand-
made, or folklore article of such coun-
try and is certified as such by the
competent authority of such country;
and
‘‘(iii) no quantitative restriction or
consultation level may be applied to the
importation into the United States of any
textile or apparel article that—
HR 465 IH
‘‘(I) originates in the territory of
a beneficiary country,
‘‘(II) meets the same require-
ments (other than assembly in Mex-
ico) as those specified in Appendix
3.1.B.10 of the Annex (relating to
goods assembled from fabric wholly
formed and cut in the United States)
for the exemption of a like article as-
sembled in Mexico from United States
quantitative restrictions and consulta-
tion levels, or
‘‘(III) 
qualifies 
for 
duty-free
treatment under clause (ii)(II).
‘‘(B) NAFTA TRANSITION PERIOD TREAT-
MENT OF NONORIGINATING TEXTILE AND AP-
PAREL ARTICLES.—
‘‘(i) PREFERENTIAL
TARIFF
TREAT-
MENT.—Subject to clause (ii), the United
States Trade Representative may place in
effect at any time during the transition pe-
riod with respect to any textile or apparel
article that—
‘‘(I) is a product of a beneficiary
country; but
HR 465 IH
‘‘(II) does not qualify as a good
that originates in the territory of that
country;
tariff treatment that is identical to the
preferential tariff treatment that is ac-
corded during such time under Appendix
6.B of the Annex to a like article that is
a product of Mexico and imported into the
United States.
‘‘(ii) 
PRIOR
CONSULTATION.—The
United States Trade Representative may
implement the preferential tariff treatment
described in clause (i) only after consulta-
tion with representatives of the United
States textile and apparel industry and
other interested parties regarding—
‘‘(I) the specific articles to which
such treatment will be extended,
‘‘(II) the annual quantity levels
to be applied under such treatment
and any adjustment to such levels,
‘‘(III) the allocation of such an-
nual quantities among the beneficiary
countries that export the articles con-
cerned to the Untied States, and
HR 465 IH
‘‘(IV) any other applicable provi-
sion.
‘‘(iii) ADJUSTMENT
OF
CERTAIN
BI-
LATERAL
TEXTILE
AGREEMENTS.—The
United States Trade Representatives shall
undertake negotiations for purposes of
seeking appropriate reductions in the
quantities of textile and apparel articles
that are permitted to be imported into the
United States under bilateral agreements
with beneficiary countries in order to re-
flect the quantities of textile and apparel
articles of each respective country that are
exempt from quota treatment by reason of
paragraph (2)(A)(iii).
‘‘(C) 
HANDLOOMED, 
HANDMADE, 
AND
FOLKLORE
ARTICLES.—For purposes of sub-
paragraph (A), the United States Trade Rep-
resentative shall consult with representatives of
the beneficiary country for the purpose of iden-
tifying particular textile and apparel goods that
are mutually agreed upon as being handloomed,
handmade, or folklore goods of a kind described
in section 2.3 (a), (b), or (c) or Appendix
3.1.B.11 of the Annex.
HR 465 IH
‘‘(D) BILATERAL EMERGENCY ACTIONS.—
The President may take—
‘‘(i) bilateral emergency tariff actions
of a kind described in section 4 of the
Annex with respect to any textile or ap-
parel article imported from a beneficiary
country if the application of tariff treat-
ment under subparagraph (A) to such arti-
cle results in conditions that would be
cause for the taking of such actions under
such section 4 with respect to a like article
that is a product of Mexico; or
‘‘(ii) bilateral emergency quantitative
restriction actions of a kind described in
section 5 of the Annex with respect to im-
ports of any textile or apparel article de-
scribed in subparagraph (B)(i) (I) and (II)
if the importation of such article into the
United States results in conditions that
would be cause for the taking of such ac-
tions under such section 5 with respect to
a like article that is a product of Mexico.
‘‘(3) NAFTA TRANSITION PERIOD TREATMENT
OF CERTAIN OTHER ARTICLES ORIGINATING IN BEN-
EFICIARY COUNTRIES.—
HR 465 IH
‘‘(A) EQUIVALENT TARIFF TREATMENT.—
‘‘(i) IN GENERAL.—Subject to clause
(ii), the tariff treatment accorded at any
time during the transition period to any
article referred to in any of subparagraphs
(B) through (F) of paragraph (1) that
originates in the territory of a beneficiary
country shall be identical to the tariff
treatment that is accorded during such
time under Annex 302.2 of the NAFTA to
a like article that originates in the terri-
tory of Mexico and is imported into the
United States. Such articles shall be sub-
ject to the provisions for emergency action
under chapter 8 of part two of the NAFTA
to the same extent as if such articles were
imported from Mexico.
‘‘(ii) EXCEPTION.—Clause (i) does not
apply to any article accorded duty-free
treatment under U.S. Note 2(b) to sub-
chapter II of chapter 98 of the Har-
monized Tariff Schedule of the United
States.
‘‘(B) RELATIONSHIP TO SUBSECTION (h)
DUTY REDUCTIONS.—If at any time during the
HR 465 IH
transition period the rate of duty that would
(but for action taken under subparagraph (A)(i)
in regard to such period) apply with respect to
any article under subsection (h) is a rate of
duty that is lower than the rate of duty result-
ing from such action, then such lower rate of
duty shall be applied for the purposes of imple-
menting such action.
‘‘(4) CUSTOMS
PROCEDURES.—The provisions
of chapter 5 of part two of the NAFTA regarding
customs procedures apply to importations under
paragraphs (2) and (3) of articles from beneficiary
countries.
‘‘(5) DEFINITIONS.—As used in this sub-
section—
‘‘(A) The term ‘the Annex’ means Annex
300–B of the NAFTA.
‘‘(B) The term ‘NAFTA’ means the North
American Free Trade Agreement entered into
between the United States, Mexico, and Canada
on December 17, 1992.
‘‘(C) The term ‘textile or apparel article’
means any article referred to in paragraph
(1)(A) that is a good listed in Appendix 1.1 of
the Annex.
HR 465 IH
‘‘(D) The term ‘transition period’ means,
with respect to a beneficiary country, the period
that begins on the date of the enactment of the
Caribbean Basin Free Trade Agreements Act
and ends on the earlier of—
‘‘(i) the date that is the 3rd anniver-
sary of such date of enactment, or
‘‘(ii) the date on which—
‘‘(I) there enters into force with
respect to the United States a trade
agreement entered into under the au-
thority of section 202(a) of the Carib-
bean Basin Free Trade Agreements
Act and to which the beneficiary coun-
try is a party, or
‘‘(II) the beneficiary country ac-
cedes to the NAFTA.
‘‘(E) An article shall be treated as having
originated in the territory of a beneficiary coun-
try if the article meets the rules of origin for
a good set forth in chapter 4 of part two of the
NAFTA or in Appendix 6.A of the Annex. In
applying such chapter 4 or Appendix 6.A with
respect to a beneficiary country for purposes of
this subsection, no countries other than the
HR 465 IH
United States and beneficiary countries may be
treated as being Parties to the NAFTA.’’.
(b) CONFORMING AMENDMENTS.—The Caribbean
Basin Economic Recovery Act is further amended—
(1) by amending section 212(e)(1)(B) to read
as follows:
‘‘(B) withdraw, suspend, or limit the appli-
cation of the duty-free treatment under this
subtitle, and the tariff and preferential tariff
treatment under section 213(b) (2) and (3), to
any article of any country,’’; and
(2) by inserting ‘‘and except as provided in sec-
tion 213(b) (2) and (3),’’ after ‘‘Tax Reform Act of
1986,’’ in section 213(a)(1).
SEC. 102. EFFECT OF NAFTA ON SUGAR IMPORTS FROM
BENEFICIARY COUNTRIES.
The President shall monitor the effects, if any, that
the implementation of the North American Free Trade
Agreement has on the access of beneficiary countries
under the Caribbean Basin Economic Recovery Act to the
United States market for sugars, syrups, and molasses.
If the President considers that the implementation of the
Agreement is affecting, or will likely affect, in an adverse
manner the access of such countries to the United States
market, the President shall promptly—
HR 465 IH
(1) take such actions, after consulting with in-
terested parties and with the appropriate committees
of the House of Representatives and the Senate; or
(2) propose to the Congress such legislative ac-
tions;
as may be necessary or appropriate to ameliorate such ad-
verse effect.
TITLE II—CARIBBEAN BASIN
FREE TRADE AGREEMENTS
SEC. 201. TRADE AGREEMENT FEASIBILITY AND OBJEC-
TIVES.
As soon as practicable, the United States Trade Rep-
resentative shall determine the desirability and feasibility
of, and a likely timetable for, any country that is a bene-
ficiary country for purposes of the Caribbean Basin Eco-
nomic Recovery Act, or a group of such beneficiary coun-
tries, either—
(1) acceding to—
(A) the North American Free Trade
Agreement pursuant to Article 2204 of such
Agreement, and
(B) as appropriate, supplemental agree-
ments pertaining to environmental, labor, and
import issues; or
HR 465 IH
(2) entering into comprehensive bilateral or
multilateral agreements with the United States that
contain provisions that—
(A) are comparable to the provisions of the
North American Free Trade Agreement and, as
appropriate, to the provisions of supplemental
agreements pertaining to environmental, labor,
and import issues, and
(B) will achieve the applicable purposes,
policies, and objectives set forth in section 212
(b) and (c) of the Caribbean Basin Economic
Recovery Act and section 1101 of the Omnibus
Trade and Competitiveness Act of 1988.
The United States Trade Representative shall consult with
the Committee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance of the Senate
regarding the determinations made under this section.
SEC. 202. TRADE AGREEMENT NEGOTIATING AUTHORITY.
(a) IN GENERAL.—
(1) AUTHORITY
TO
ENTER
INTO
AGREE-
MENTS.—The President may enter into trade agree-
ments with one or more beneficiary countries under
the Caribbean Basin Economic Recovery Act provid-
ing for the elimination or reduction of any duty im-
posed by the United States and for the reduction or
HR 465 IH
elimination of barriers to, or other distortions of, the
international trade of the beneficiary countries or
the United States, if each such agreement would
comply with section 201.
(2) LIMITATION.—Notwithstanding any other
provision of law, no trade benefit shall be extended
to any country by reason of the extension of any
trade benefit to another country under a trade
agreement entered into under paragraph (1) with
such other country.
(b) CONSULTATION
WITH
CONGRESS
BEFORE
AGREEMENTS ENTERED INTO.—
(1) Before the President enters into any trade
agreement under subsection (a), the President shall
consult with—
(A) the Committee on Ways and Means of
the House of Representatives and the Commit-
tee on Finance of the Senate; and
(B) each other committee of the House
and the Senate, and each joint committee of the
Congress, which has jurisdiction over legislation
involving subject matters which would be af-
fected by the trade agreement.
(2) The consultation under paragraph (1) shall
include—
HR 465 IH
(A) the nature of the agreement;
(B) how and to what extent the agreement
will achieve the applicable purposes, policies,
and objectives of this title; and
(C) all matters relating to the implementa-
tion of the agreement.
(3) If it is proposed to implement two or more
trade agreements in a single implementing bill, the
consultation under paragraph (1) shall include the
desirability and feasibility of such proposed imple-
mentation.
Æ
HR 465 IH——2