I 
108TH CONGRESS 
1ST SESSION H. R. 2267
To extend certain trade benefits to countries of the greater Middle East. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 22, 2003
Mr. SMITH of Washington (for himself and Mr. DOOLEY of California) intro-
duced the following bill; which was referred to the Committee on Ways 
and Means 
A BILL 
To extend certain trade benefits to countries of the greater 
Middle East.
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 ‘‘Middle East Trade 
and Engagement Act of 2003’’. 
SEC. 2. FINDINGS. 
Congress finds that—
(1) it is in the mutual interest of the United 
States and the countries of the greater Middle East
to promote stable and sustainable growth and devel-
opment throughout the greater Middle East; 
(2) Congress views democratization and eco-
nomic progress in the countries of the greater Mid-
dle East as important elements of a policy to ad-
dress terrorism and endemic instability; 
(3) free trade relationships are not a substitute 
for, but a complement to, necessary political and 
economic reforms that lead to political liberalization 
and economic freedom; 
(4) the countries of the greater Middle East 
have enormous economic potential and are of endur-
ing political significance to the United States; 
(5) despite their economic potential, the coun-
tries of the greater Middle East are experiencing 
deepening poverty, slow job creation, and a declining 
share of world trade and investment, while at the 
same time experiencing population growth rates 
among the highest in the world; 
(6) these economic conditions are in part the 
result of barriers to trade and investment, a failure 
to engage fully in the global trading system, lack of 
participation in the World Trade Organization, and, 
often, a lack of economic diversification and over-re-
liance on the energy sector;
(7) offering the countries of the greater Middle 
East enhanced trade preferences will encourage 
higher levels of trade and direct investment and help 
bring those countries more fully into the global trad-
ing system; 
(8) higher levels of trade and investment and 
greater involvement in the global trading system can 
lead to increased economic development, which can 
in turn lead to more jobs for people in the countries 
of the greater Middle East; and 
(9) encouraging the reciprocal reduction of 
trade and investment barriers in the greater Middle 
East will enhance the benefits of trade and invest-
ment for all the countries in the greater Middle East 
as well as enhance commercial and political ties be-
tween the United States and the greater Middle 
East. 
SEC. 3. STATEMENT OF POLICY. 
Congress supports—
(1) encouraging increased trade and investment 
between the United States and the countries of the 
greater Middle East and among the countries of the 
greater Middle East; 
(2) reducing tariff and nontariff barriers and 
other obstacles to trade between the United States
SEC. 4. DESIGNATION OF ELIGIBLE COUNTRIES. 
(a) IN GENERAL.—The President is authorized to 
designate any country listed in subsection (c) as a bene-
ficiary country if the President determines that the coun-
try—
(1) has established, or is making continual 
progress toward establishing—
(A) a market-based economy that protects 
private property rights, incorporates an open 
rules-based trading system, and minimizes gov-
ernment interference in the economy through 
measures such as price controls, subsidies, and 
government ownership of economic assets; 
(B) the rule of law and the right to due 
process, a fair trial, and equal protection under 
the law; 
(C) political pluralism, a climate free of 
political intimidation and restrictions on peace-
ful political activity, and democratic elections 
that meet international standards of fairness, 
transparency, and participation; 
(D) the elimination of barriers to United 
States trade and investment, including by—
(i) providing national treatment and 
measures to create an environment condu-
cive to domestic and foreign investment;
(ii) protecting intellectual property; 
and 
(iii) resolving bilateral trade and in-
vestment disputes; 
(E) economic policies that reduce poverty, 
increase the availability of health care and edu-
cational opportunities, expand physical infra-
structure, promote the development of private 
enterprise, and encourage the formation of cap-
ital markets through micro-credit or other pro-
grams; 
(F) a system to combat corruption and 
bribery, such as signing and implementing the 
OECD Convention on Combating Bribery of 
Foreign Public Officials in International Busi-
ness Transactions; 
(G) protection of internationally recognized 
worker rights, including the right of association, 
the right to organize and bargain collectively, a 
prohibition on the use of any form of forced or 
compulsory labor, a minimum age for the em-
ployment of children, and acceptable conditions 
of work; and 
(H) policies that provide a high level of en-
vironmental protection;
(2) does not engage in activities that undermine 
United States national security or foreign policy in-
terests, and supports a peaceful resolution of the 
Israeli-Palestinian conflict; 
(3) is a signatory of the United Nations Dec-
laration of Human Rights, does not engage in gross 
violations 
of 
internationally 
recognized 
human 
rights, and is making continuing and verifiable 
progress on the protection of internationally recog-
nized human rights, including freedom of speech and 
press, freedom of peaceful assembly and association, 
and freedom of religion; 
(4) is not listed by the United States Depart-
ment of State as a state sponsor of terrorism and 
cooperates fully in international efforts to combat 
terrorism; 
(5) does not participate in the primary, sec-
ondary, or tertiary economic boycott of Israel; and 
(6) otherwise meets the eligibility criteria set 
forth in section 502(b)(2) of the Trade Act of 1974 
(19 
U.S.C. 
2462(b)(2)), 
other 
than 
section 
502(b)(2)(B). 
(b) CONTINUING COMPLIANCE.—If the President de-
termines that a designated beneficiary country no longer 
meets the requirements described in subsection (a), the
President shall terminate the designation of the country 
made pursuant to subsection (a) and inform Congress of 
the President’s determination and the reasons therefor. 
(c) COUNTRIES ELIGIBLE FOR DESIGNATION.—In 
designating countries as beneficiary countries under this 
Act, the President shall consider only the following coun-
tries of the greater Middle East or their successor political 
entities: 
(1) Afghanistan. 
(2) Algeria. 
(3) Azerbaijan. 
(4) Bahrain. 
(5) Bangladesh. 
(6) Egypt. 
(7) Iraq. 
(8) Kuwait. 
(9) Lebanon. 
(10) Morocco. 
(11) Oman. 
(12) Pakistan. 
(13) Qatar. 
(14) Saudi Arabia. 
(15) Tunisia. 
(16) Turkey. 
(17) United Arab Emirates.
(18) Yemen. 
(d) THE PALESTINIAN AUTHORITY.—The President 
is also authorized to designate the Palestinian Authority 
or its successor political entity as a beneficiary political 
entity which, if so designated, shall be accorded benefits 
under this Act as if it were a beneficiary country, if the 
President determines that the Palestinian Authority—
(1) satisfies the conditions of subsection (a) (1) 
and (2); 
(2) does not participate in acts of terrorism, 
and takes active measures to combat terrorism; 
(3) cooperates fully in international efforts to 
combat terrorism; 
(4) does not engage in gross violations of inter-
nationally recognized human rights, and is making 
continuing and verifiable progress on the protection 
of internationally recognized human rights, including 
freedom of speech and the press, freedom of peaceful 
assembly and association, and freedom of religion; 
and 
(5) accepts Israel’s right to exist in peace with-
in secure borders. 
SEC. 5. DESIGNATION OF ELIGIBLE ARTICLES. 
(a) ELIGIBLE ARTICLES.—Except as provided in sec-
tions 503(b)(2) and (3) of the Trade Act of 1974 (19
U.S.C. 2463(b)(2) and (3)), the President is authorized 
to designate articles as eligible for duty-free treatment 
from all beneficiary countries for purposes of this Act by 
Executive order or Presidential proclamation after receiv-
ing the advice of the International Trade Commission in 
accordance with subsection (c). 
(b) RULES OF ORIGIN.—
(1) GENERAL RULE.—The duty-free treatment 
provided under this Act shall apply to any eligible 
article which is the growth, product, or manufacture 
of 1 or more beneficiary countries if—
(A) that article is imported directly from a 
beneficiary country into the customs territory of 
the United States; and 
(B) the sum of—
(i) the cost or value of the materials 
produced in 1 or more beneficiary coun-
tries, plus
(ii) the direct cost of processing oper-
ations performed in such beneficiary coun-
try or countries, 
is not less than 35 percent of the appraised 
value of such article at the time it is entered. 
(2) ADDITIONAL COUNTRIES.—For purposes of 
the rules of origin in paragraph (1) and the regula-
tions prescribed pursuant to paragraph (4), the term 
‘‘beneficiary country’’ includes Israel and Jordan. 
(3) EXCLUSIONS.—An article shall not be treat-
ed as the growth, product, or manufacture of a ben-
eficiary country by virtue of having merely under-
gone—
(A) simple combining or packaging oper-
ations; or 
(B) mere dilution with water or mere dilu-
tion with another substance that does not mate-
rially alter the characteristics of the article. 
(4) REGULATIONS.—The Secretary of the 
Treasury, after consulting with the United States 
Trade Representative, shall prescribe such regula-
tions as may be necessary to carry out this sub-
section, including, but not limited to, regulations 
providing that, in order to be eligible for duty-free 
treatment under this Act, an article—
(A) must be wholly the growth, product, or 
manufacture of 1 or more beneficiary countries, 
including Israel and Jordan; or 
(B) must be a new or different article of 
commerce which has been grown, produced, or 
manufactured in 1 or more beneficiary coun-
tries, including Israel and Jordan.
(c) INTERNATIONAL TRADE COMMISSION ADVICE.—
Before designating an article as an eligible article under 
subsection (a), the President shall publish in the Federal 
Register and furnish the International Trade Commission 
with a list of articles that may be considered for designa-
tion as eligible articles for purposes of this Act. The Presi-
dent shall comply with the provisions of sections 131, 132, 
133, and 134 of the Trade Act of 1974 as if an action 
under this Act were an action taken under section 123 
of the Trade Act of 1974 to carry out a trade agreement 
entered into under section 123. 
SEC. 6. UNITED STATES-MIDDLE EAST TRADE AND ECO-
NOMIC COOPERATION FORUM. 
(a) DECLARATION OF POLICY.—The President shall 
convene annual high-level meetings among appropriate of-
ficials of the United States Government, officials of the 
governments of eligible beneficiary countries, and officials 
of the Governments of Israel and Jordan in order to foster 
close economic ties between the United States and the 
countries of the greater Middle East. 
(b) ESTABLISHMENT.—Not later than 12 months 
after the date of enactment of this Act, the President, 
after consulting with Congress and the governments con-
cerned, shall establish a United States-Middle East Trade
and Economic Cooperation Forum (in this section referred 
to as the ‘‘Forum’’). 
(c) REQUIREMENTS.—In creating the Forum, the 
President shall meet the following requirements: 
(1) The President shall direct the Secretary of 
Commerce, the Secretary of the Treasury, the Sec-
retary of State, and the United States Trade Rep-
resentative to host the first annual meeting with 
their counterparts from the governments of des-
ignated beneficiary countries, and those countries 
and political entities listed in section 4(c) and (d) 
that the President determines are taking substantial 
positive steps toward meeting the eligibility require-
ments in section 4. The purpose of the meeting shall 
be to discuss expanding trade and investment rela-
tions between the United States and the countries of 
the greater Middle East and the implementation of 
this Act including encouraging joint ventures be-
tween small and large businesses. The President 
shall also direct the Secretaries and the United 
States Trade Representative to invite to the meeting 
representatives from appropriate organizations and 
government officials from countries and political en-
tities in the greater Middle East.
(2)(A) The President, in consultation with Con-
gress, shall encourage United States nongovern-
mental organizations to host annual meetings with 
nongovernmental organizations from the countries 
and political entities of the greater Middle East in 
conjunction with the annual meetings of the Forum 
for the purpose of discussing the issues described in 
paragraph (1). 
(B) The President, in consultation with Con-
gress, shall encourage United States representatives 
of the private sector to host annual meetings with 
representatives of the private sector from the coun-
tries and political entities of the greater Middle East 
in conjunction with the annual meetings of the 
Forum for the purpose of discussing the issues de-
scribed in paragraph (1). 
(3) The President shall, to the extent prac-
ticable, meet with the heads of governments of des-
ignated beneficiary countries, and those countries 
and political entities listed in section 4(c) and (d) 
that the President determines are taking substantial 
positive steps toward meeting the eligibility require-
ments in section 4, not less than once every 2 years 
for the purpose of discussing the issues described in 
paragraph (1). The first such meeting should take
place not later than 12 months after the date of en-
actment of this Act. 
(d) DISSEMINATION OF INFORMATION BY USIS.—In 
order to assist in carrying out the purposes of the Forum, 
the United States Information Service shall disseminate 
regularly, through multiple media, economic information 
in support of the free market economic reforms described 
in this Act. 
SEC. 7. FREE TRADE AGREEMENTS WITH COUNTRIES OR 
POLITICAL ENTITIES IN THE GREATER MID-
DLE EAST. 
(a) DECLARATION OF POLICY.—Congress declares 
that bilateral free trade agreements should be negotiated, 
where feasible, with interested countries or political enti-
ties in the greater Middle East, in order to serve as the 
catalyst for increasing trade between the United States 
and the greater Middle East and increasing private sector 
investment in the greater Middle East. 
(b) ELIGIBILITY.—Any country or political entity 
that desires to negotiate a bilateral free trade agreement
with the United States shall be a member of the World 
Trade Organization or be working diligently toward mem-
bership and shall satisfy the criteria in section 4(a) of this 
Act. 
(c) PLAN REQUIREMENT.—
(1) IN GENERAL.—The President, taking into 
account the willingness of the governments of the 
beneficiary countries to engage in negotiations to 
enter into free trade agreements, shall develop a 
plan for the purpose of negotiating and entering into 
1 or more trade agreements with interested bene-
ficiary countries. 
(2) ELEMENTS OF PLAN.—The plan shall in-
clude the following: 
(A) The specific objectives of the United 
States with respect to negotiations described in 
paragraph (1) and a suggested timetable for 
achieving those objectives. 
(B) The benefits to both the United States 
and the relevant beneficiary countries with re-
spect to the applicable free trade agreement or 
agreements. 
(C) A mutually agreed-upon timetable for 
the negotiations. 
(D) Subject matter anticipated to be cov-
ered by the negotiations and United States 
laws, programs, and policies, as well as the laws 
of participating eligible countries of the greater 
Middle East and existing bilateral and multilat-
eral and economic cooperation and trade agree-
ments, that may be affected by the agreement 
or agreements. 
(E) Procedures to ensure the following: 
(i) Adequate consultation with Con-
gress and the private sector during the ne-
gotiations. 
(ii) Consultation with Congress re-
garding all matters relating to implementa-
tion of the agreement or agreements. 
(iii) Approval by Congress of the 
agreement or agreements. 
(iv) Adequate consultations with the 
relevant governments of the greater Middle 
East during the negotiation of the agree-
ment or agreements. 
(d) REPORTING REQUIREMENT.—Not later than 12 
months after the date of enactment of this Act, the Presi-
dent shall prepare and transmit to Congress a report con-
taining the plan developed pursuant to subsection (c). 
SEC. 8. REPORTING REQUIREMENT. 
(a) IN GENERAL.—The President shall monitor, re-
view, and prepare a report annually on the progress of 
each country and political entity listed in section 4(c) and 
(d) in meeting the requirements described in section 4(a) 
in order to determine the current or potential eligibility
of each country or political entity to be designated as a 
beneficiary country under this Act. The report shall also 
include a comprehensive discussion of the implementation 
of this Act and an analysis of the trade and investment 
policy of the United States with respect to the countries 
and political entities listed in section 4(c) and (d). To the 
extent that any subject matter required by the report is 
included in another report submitted by the President, the 
report required by this section may reference the other re-
port. 
(b) TIME FOR SUBMITTING REPORT.—The President 
shall submit the report described in subsection (a) to Con-
gress not later than 1 year after the date of enactment 
of this Act, and annually thereafter through 2011. 
SEC. 9. PRESERVATION OF BENEFITS OF UNITED STATES-
ISRAEL AND UNITED STATES-JORDAN FREE 
TRADE AGREEMENTS. 
Nothing in this Act shall be deemed to nullify or im-
pair any right or benefit accorded either to Israel or to 
Jordan under the existing trade agreements with the 
United States.
SEC. 10. TERMINATION OF PREFERENTIAL TREATMENT. 
No duty-free treatment or other preferential treat-
ment extended to beneficiary countries under this Act 
shall remain in effect after December 31, 2011.
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