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105TH CONGRESS
1ST SESSION
H. R. 2629
To establish objectives for negotiating and procedures for implementing
certain trade agreements.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 7, 1997
Mr. MATSUI (for himself, Mr. TANNER, Mr. BERMAN, Mr. MORAN of Virginia,
and Mr. DAVIS of Florida) introduced the following bill; which was re-
ferred to the Committee 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 committee concerned
A BILL
To establish objectives for negotiating and procedures for
implementing certain trade agreements.
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 ‘‘Reciprocal Trade
Agreements Act of 1997’’.
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SEC. 2. TRADE NEGOTIATING OBJECTIVES OF THE UNITED
STATES.
(a) STATEMENT OF PURPOSES.—The purposes of
this Act are to achieve, through trade agreements afford-
ing mutual benefits—
(1) more open, equitable, and reciprocal market
access for United States goods, services, and invest-
ment;
(2) the reduction or elimination of barriers and
other trade-distorting policies and practices;
(3) a more effective system of international
trading disciplines and procedures; and
(4) economic growth, higher living standards,
and full employment in the United States, and eco-
nomic growth and development among United States
trading partners.
(b) PRINCIPAL TRADE NEGOTIATING OBJECTIVES.—
The principal trade negotiating objectives of the United
States for agreements subject to the provisions of section
3 include the following:
(1) REDUCTION
OF
BARRIERS
TO
TRADE
IN
GOODS.—The principal negotiating objective of the
United States regarding barriers to trade in goods
is to obtain competitive opportunities for United
States exports in foreign markets substantially
equivalent to the opportunities afforded foreign ex-
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ports to United States markets, including the reduc-
tion or elimination of tariff and nontariff trade bar-
riers, including—
(A) tariff and nontariff disparities remain-
ing from previous rounds of multilateral trade
negotiations that have put United States ex-
ports at a competitive disadvantage in world
markets;
(B) measures identified in the annual re-
port prepared under section 181 of the Trade
Act of 1974 (19 U.S.C. 2241); and
(C) tariff elimination for products identi-
fied in section 111(b) of the Uruguay Round
Agreements Act (19 U.S.C. 3521(b)) and the
accompanying Statement of Administrative Ac-
tion related to that section.
(2) TRADE IN SERVICES.—
(A) The principal negotiating objectives of
the United States regarding trade in services
are—
(i) to reduce or eliminate barriers to,
or other distortions of, international trade
in services, including regulatory and other
barriers that deny national treatment or
unreasonably restrict the establishment
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and operation of service suppliers in for-
eign markets; and
(ii) to develop internationally agreed
rules, including dispute settlement proce-
dures, that—
(I) are consistent with the com-
mercial policies of the United States,
and
(II) will reduce or eliminate such
barriers or distortions, and help en-
sure fair, equitable opportunities for
foreign markets.
(B) In pursuing the negotiating objectives
described in subparagraph (A), United States
negotiators shall take into account legitimate
United States domestic objectives, including
protection of legitimate health, safety, essential
security, environmental, consumer, and employ-
ment opportunity interests. The preceding sen-
tence shall not be construed to authorize any
modification of United States law.
(3) FOREIGN INVESTMENT.—
(A) The principal negotiating objectives of
the United States regarding foreign investment
are—
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(i) to reduce or eliminate artificial or
trade-distorting barriers to foreign invest-
ment, to expand the principle of national
treatment, and to reduce unreasonable bar-
riers to establishment; and
(ii) to develop internationally agreed
rules through the negotiation of investment
agreements, including dispute settlement
procedures, that—
(I) will help ensure a free flow of
foreign investment, and
(II) will reduce or eliminate the
trade distortive effects of certain
trade-related investment measures.
(B) In pursuing the negotiating objectives
described in subparagraph (A), United States
negotiators shall take into account legitimate
United States domestic objectives, including
protection of legitimate health, safety, essential
security, environmental, consumer, and employ-
ment opportunity interests. The preceding sen-
tence shall not be construed to authorize any
modification of United States law.
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(4) INTELLECTUAL PROPERTY.—The principal
negotiating objectives of the United States regarding
intellectual property are—
(A) to further promote adequate and effec-
tive protection of intellectual property rights,
by—
(i) seeking the enactment and effec-
tive enforcement by foreign countries of
laws that—
(I) recognize and adequately pro-
tect intellectual property, including
copyrights, patents, trademarks, semi-
conductor chip layout designs, and
trade secrets, and
(II) provide protection against
unfair competition;
(ii) accelerating and ensuring the full
implementation of the Agreement on
Trade-Related 
Aspects 
of 
Intellectual
Property Rights referred to in section
101(d)(15) of the Uruguay Round Agree-
ments Act (19 U.S.C. 3511(d)(15)), and
achieving improvements in the standards
of that Agreement;
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(ii) dispute settlement provisions and
enforcement procedures,
is without prejudice to other complementary ini-
tiatives undertaken in other international orga-
nizations.
(5) AGRICULTURE.—The principal negotiating
objectives of the United States with respect to agri-
culture are, in addition to those set forth in section
1123(b) of the Food Security Act of 1985 (7 U.S.C.
1736r(b)), to achieve, on an expedited basis to the
maximum extent feasible, more open and fair condi-
tions of trade in agricultural commodities by—
(A) developing, strengthening, and clarify-
ing rules for agricultural trade, including dis-
ciplines on restrictive or trade-distorting import
and export practices such as those that would
impact perishable or cyclical products;
(B) increasing United States agricultural
exports by eliminating barriers to trade (includ-
ing transparent and nontransparent barriers)
and reducing or eliminating the subsidization of
agricultural production consistent with the
United States policy of agricultural stabilization
in cyclical and unpredictable markets;
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(C) creating a free and more open world
agricultural trading system by resolving ques-
tions pertaining to export and other trade-dis-
torting subsidies, market pricing, and market
access;
(D) eliminating or reducing substantially
other specific constraints to fair trade and more
open market access, such as tariffs, quotas, and
other nontariff practices; and
(E) developing, strengthening, and clarify-
ing rules that address practices that unfairly
decrease United States market access opportu-
nities or distort agricultural markets to the det-
riment of the United States, including—
(i) unfair or trade-distorting activities
of state trading enterprises and other ad-
ministrative mechanisms, including lack of
price transparency;
(ii) unjustified restrictions or commer-
cial requirements affecting new tech-
nologies, including biotechnology;
(iii) 
unjustified 
sanitary 
or
phytosanitary restrictions;
(iv) other unjustified technical bar-
riers to trade; and
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(v) restrictive rules in the administra-
tion of tariff-rate quotas.
(6) UNFAIR TRADE PRACTICES.—The principal
negotiating objectives of the United States with re-
spect to unfair trade practices are—
(A) to enhance the operation and effective-
ness of the relevant Uruguay Round Agree-
ments and any other agreements designed to
define, deter, discourage the persistent use of,
and otherwise discipline, unfair trade practices
having adverse trade effects, including forms of
subsidy and dumping not adequately dis-
ciplined, such as resource input subsidies, diver-
sionary dumping, dumped or subsidized inputs,
third country dumping, circumvention of anti-
dumping or countervailing duty orders, and ex-
port targeting practices; and
(B) to obtain the enforcement of WTO
rules against—
(i) trade-distorting practices of state
trading enterprises, and
(ii) the acts, practices, or policies of
any foreign government which, as a prac-
tical matter, unreasonably require that—
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(I) substantial direct investment
in the foreign country be made,
(II) intellectual property be li-
censed to the foreign country or to
any firm of the foreign country, or
(III) other collateral concessions
be made,
as a condition for the importation of any
product or service of the United States
into the foreign country or as a condition
for carrying on business in the foreign
country.
(7) SAFEGUARDS.—The principal negotiating
objectives of the United States regarding safeguards
are—
(A) to improve and expand rules and pro-
cedures covering safeguard measures;
(B) to ensure that safeguard measures
are—
(i) transparent,
(ii) temporary,
(iii) degressive, and
(iv) subject to review and termination
when no longer necessary to remedy injury
and to facilitate adjustment; and
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(C) to require notification of, and to mon-
itor the use by, WTO members of import relief
actions for their domestic industries.
(8) IMPROVEMENT OF THE WTO AND MULTI-
LATERAL TRADE AGREEMENTS.—The principal ne-
gotiating objectives of the United States regarding
the improvement of the WTO and other multilateral
trade agreements are—
(A) to improve the operation and extend
the coverage of the WTO and such agreements
to products, sectors, and conditions of trade not
adequately covered; and
(B) to expand country participation in par-
ticular agreements, where appropriate.
(9) DISPUTE SETTLEMENT.—The principal ne-
gotiating objectives of the United States with respect
to dispute settlement are—
(A) to provide for effective and expeditious
dispute settlement mechanisms and procedures
in any trade agreement entered into under this
authority; and
(B) to ensure that such mechanisms within
the WTO and agreements concluded under the
auspices of the WTO provide for more effective
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and expeditious resolution of disputes and en-
able better enforcement of United States rights.
(10) TRANSPARENCY.—The principal negotiat-
ing objective of the United States regarding trans-
parency is to obtain broader application of the prin-
ciple of transparency through increased public access
to information regarding trade issues, clarification of
the costs and benefits of trade policy actions, and
the observance of open and equitable procedures by
United States trading partners and within the WTO.
(11) DEVELOPING COUNTRIES.—The principal
negotiating objectives of the United States regarding
developing countries are—
(A) to ensure that developing countries
promote economic development by assuming the
fullest possible measure of responsibility for
achieving and maintaining an open inter-
national trading system by providing reciprocal
benefits and assuming equivalent obligations
with respect to their import and export prac-
tices; and
(B) to establish procedures for reducing
nonreciprocal trade benefits for the more ad-
vanced developing countries.
•HR 2629 IH1S
(12) CURRENT
ACCOUNT
SURPLUSES.—The
principal negotiating objective of the United States
regarding current account surpluses is to promote
policies to address large and persistent global cur-
rent account imbalances of countries (including im-
balances which threaten the stability of the inter-
national trading system), by imposing greater re-
sponsibility on such countries to undertake policy
changes aimed at restoring current account equi-
librium through expedited implementation of trade
agreements where feasible and appropriate.
(13) ACCESS TO HIGH TECHNOLOGY.—
(A) The principal negotiating objective of
the United States regarding access to high
technology is to obtain the elimination or reduc-
tion of foreign barriers to, and acts, policies, or
practices by foreign governments which limit,
equitable access by United States persons to
foreign-developed technology, including barriers,
acts, policies, or practices which have the effect
of—
(i) restricting the participation of
United States persons in government-sup-
ported research and development projects;
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(ii) denying equitable access by Unit-
ed States persons to government-held pat-
ents;
(iii) requiring the approval of govern-
ment entities, or imposing other forms of
government intervention, as a condition of
granting licenses to United States persons
by foreign persons (other than approval
which may be necessary for national secu-
rity purposes to control the export of criti-
cal military technology); and
(iv) otherwise denying equitable access
by United States persons to foreign-devel-
oped technology or contributing to the in-
equitable flow of technology between the
United States and its trading partners.
(B) In pursuing the negotiating objective
described in subparagraph (A), the United
States negotiators shall take into account Unit-
ed States Government policies in licensing or
otherwise making available to foreign persons
technology and other information developed by
United States laboratories.
(14) BORDER TAXES.—The principal negotiat-
ing objective of the United States regarding border
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taxes is, within the WTO, to obtain a revision of the
treatment of border adjustments for internal taxes
in order to redress the disadvantage to countries
that rely primarily on direct taxes rather than indi-
rect taxes for revenue.
(15) REGULATORY
COMPETITION.—The prin-
cipal trade negotiating objectives of the United
States regarding the use of government regulation or
other practices by foreign governments to provide a
competitive advantage to their domestic producers,
service providers, or investors and thereby reduce
market access for United States goods, services, and
investment are—
(A) to ensure that government regulation
and other government practices do not unfairly
discriminate against United States goods, serv-
ices, or investment; and
(B) to prevent the use of foreign govern-
ment regulation and other government prac-
tices, including the lowering of, or derogation
from, existing labor (including child labor),
health and safety, or environmental standards,
for the purpose of attracting investment or in-
hibiting United States exports.
•HR 2629 IH1S
Nothing in subparagraph (B) shall be construed to
authorize in an implementing bill, or in an agree-
ment subject to an implementing bill, the inclusion
of provisions that would restrict the autonomy of the
United States in these areas.
(c) INTERNATIONAL ECONOMIC POLICY OBJECTIVES
DESIGNED TO REINFORCE
THE TRADE AGREEMENTS
PROCESS.—
(1) IN GENERAL.—It is the policy of the United
States to reinforce the trade agreements process
by—
(A) fostering stability in international cur-
rency markets and developing mechanisms to
assure greater coordination, consistency, and
cooperation between international trade and
monetary systems and institutions in order to
protect against the trade consequences of sig-
nificant and unanticipated currency movements;
(B) 
supplementing 
and 
strengthening
standards for protection of intellectual property
rights under conventions designed to protect
such rights that are administered by inter-
national organizations other than the WTO, ex-
panding the conventions to cover new and
emerging technologies, and eliminating discrimi-
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nation and unreasonable exceptions or pre-
conditions to such protection;
(C) promoting respect for workers’ rights,
by—
(i) reviewing the relationship between
workers’ rights and the operation of inter-
national trading systems and specific trade
arrangements; and
(ii) seeking to establish in the Inter-
national Labor Organization (referred to in
this Act as the ‘‘ILO’’) a mechanism for
the systematic examination of, and report-
ing on, the extent to which ILO members
promote and enforce the freedom of asso-
ciation, the right to organize and bargain
collectively, a prohibition on the use of
forced labor, a prohibition on exploitative
child labor, and a prohibition on discrimi-
nation in employment; and
(D) expanding the production of goods and
trade in goods and services to ensure the opti-
mal use of the world’s resources, while seeking
to protect and preserve the environment and to
enhance the international means for doing so.
•HR 2629 IH1S
(2) APPLICATION
OF
PROCEDURES.—Nothing
in this subsection shall be construed to authorize the
use of the trade agreement approval procedures de-
scribed in section 3 to modify United States law.
SEC. 3. TRADE AGREEMENT NEGOTIATING AUTHORITY.
(a) AGREEMENTS REGARDING TARIFF BARRIERS.—
(1) IN GENERAL.—Whenever the President de-
termines that 1 or more existing duties or other im-
port restrictions of any foreign country or the Unit-
ed States are unduly burdening and restricting the
foreign trade of the United States and that the pur-
poses, policies, and objectives of this Act will be pro-
moted thereby, the President—
(A) may enter into trade agreements with
foreign countries before—
(i) October 1, 2001, or
(ii) October 1, 2005, if the authority
provided by this Act is extended under
subsection (c); and
(B) may, consistent with paragraphs (2)
through (5), proclaim—
(i) such modification or continuance
of any existing duty,
(ii) such continuance of existing duty-
free or excise treatment, or
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(iii) such additional duties,
as the President determines to be required or
appropriate to carry out any such trade agree-
ment.
(2) LIMITATIONS.—No proclamation may be
made under paragraph (1) that—
(A) reduces any rate of duty (other than a
rate of duty that does not exceed 5 percent ad
valorem on the date of enactment of this Act)
to a rate which is less than 50 percent of the
rate of such duty that applies on such date of
enactment;
(B) provides for a reduction of duty on an
article to take effect on a date that is more
than 10 years after the first reduction that is
proclaimed to carry out a trade agreement with
respect to such article; or
(C) increases any rate of duty above the
rate that applied on the date of enactment of
this Act.
(3) AGGREGATE REDUCTION; EXEMPTION FROM
STAGING.—
(A) AGGREGATE REDUCTION.—Except as
provided in subparagraph (B), the aggregate re-
duction in the rate of duty on any article which
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(4) ROUNDING.—If the President determines
that such action will simplify the computation of re-
ductions under paragraph (3), the President may
round an annual reduction by the lesser of—
(A) the difference between the reduction
without regard to this paragraph and the next
lower whole number; or
(B) one-half of 1 percent ad valorem.
(5) OTHER LIMITATIONS.—A rate of duty re-
duction or increase that may not be proclaimed by
reason of paragraph (2) may take effect only if a
provision authorizing such reduction or increase is
included within an implementing bill provided for
under section 5 and that bill is enacted into law.
(6) EXPANDED
TARIFF
PROCLAMATION
AU-
THORITY.—
(A) IN
GENERAL.—Notwithstanding the
provisions of paragraphs (1) through (5), before
October 1, 2001 (or before October 1, 2005, if
the authority provided by this Act is extended
under subsection (c)), and subject to the con-
sultation and layover requirements of section
115 of the Uruguay Round Agreements Act (19
U.S.C. 3524) and the notification and consulta-
tion requirements of section 4(a) of this Act,
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the President may proclaim the modification of
any duty or staged rate reduction of any duty
set forth in Schedule XX, as defined in section
2(5) of the Uruguay Round Agreements Act, if
the United States has agreed to such modifica-
tion or staged rate reduction in a negotiation
for the reciprocal elimination or harmonization
of duties, within the same tariff categories,
under the auspices of the World Trade Organi-
zation or as part of an interim agreement lead-
ing to the formation of a regional free-trade
area.
(B) NOTICE REQUIRED.—The modification
or staged rate reduction authorized under sub-
paragraph (A) with respect to any negotiation
initiated after the date of enactment of this Act
may be proclaimed only on articles in tariff cat-
egories with respect to which the President has
provided notice in accordance with section 4(a).
(7) TARIFF MODIFICATIONS UNDER URUGUAY
ROUND
AGREEMENTS
ACT.—Nothing in this sub-
section shall limit the authority provided to the
President under section 111(b) of the Uruguay
Round Agreements Act.
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(b) AGREEMENTS REGARDING TARIFF
AND NON-
TARIFF BARRIERS.—
(1) IN GENERAL.—
(A) DETERMINATION
BY
PRESIDENT.—
Whenever the President determines that—
(i) any duty or other import restric-
tion imposed by any foreign country or the
United States or any other barrier to, or
other distortion of, international trade—
(I) unduly burdens or restricts
the foreign trade of the United States
or adversely affects the United States
economy, or
(II) is likely to result in such a
burden, restriction, or effect, and
(ii) the purposes, policies, and objec-
tives of this Act will be promoted thereby,
the President may, before October 1, 2001 (or
before October 1, 2005, if the authority pro-
vided under this Act is extended under sub-
section (c)) enter into a trade agreement de-
scribed in subparagraph (B).
(B) TRADE
AGREEMENT
DESCRIBED.—A
trade agreement described in this subparagraph
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means an agreement with a foreign country
that provides for—
(i) the reduction or elimination of
such duty, restriction, barrier, or other dis-
tortion; or
(ii) the prohibition of, or limitation on
the imposition of, such barrier or other dis-
tortion.
(2) CONDITIONS.—A trade agreement may be
entered into under this subsection only if—
(A) such agreement makes progress in
meeting the applicable objectives described in
section 2(b); and
(B) the President satisfies the conditions
set forth in section 4 with respect to such
agreement.
(3) BILLS QUALIFYING FOR TRADE AGREEMENT
APPROVAL PROCEDURES.—The provisions of section
151 of the Trade Act of 1974 (in this Act referred
to as ‘‘trade agreement approval procedures’’) apply
to implementing bills submitted with respect to trade
agreements entered into under this subsection, ex-
cept 
that, 
for 
purposes 
of 
applying 
section
151(b)(1), such implementing bills shall contain
only—
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(A) provisions that approve a trade agree-
ment entered into under this subsection that
achieves one or more of the principal negotiat-
ing objectives set forth in section 2(b) and the
statement of administrative action (if any) pro-
posed to implement such trade agreement;
(B) provisions that are—
(i) necessary to implement such agree-
ment; or
(ii) otherwise related to the implemen-
tation, enforcement, and adjustment to the
effects of such trade agreement and are di-
rectly related to trade; and
(C) provisions necessary for purposes of
complying with section 252 of the Balanced
Budget and Emergency Deficit Control Act of
1985 in implementing the applicable trade
agreement.
(c) EXTENSION PROCEDURES.—
(1) IN GENERAL.—Except as provided in sec-
tion 5(b)—
(A) subsections (a) and (b) shall apply
with respect to agreements entered into before
October 1, 2001; and
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(B) subsections (a) and (b) shall be ex-
tended to apply with respect to agreements en-
tered into on or after October 1, 2001, and be-
fore October 1, 2005, if (and only if)—
(i) the President requests such exten-
sion under paragraph (2); and
(ii) neither House of Congress adopts
an extension disapproval resolution under
paragraph (5) before October 1, 2001.
(2) REPORT
TO
CONGRESS
BY
THE
PRESI-
DENT.—If the President is of the opinion that the
authority under subsections (a) and (b) should be
extended, the President shall submit to Congress,
not later than July 1, 2001, a written report that
contains a request for such extension, together
with—
(A) a description of all trade agreements
that have been negotiated under subsections (a)
and (b) and, where applicable, the anticipated
schedule for submitting such agreements to
Congress for approval;
(B) a description of the progress that has
been made in negotiations to achieve the pur-
poses, policies, and objectives set out in section
2 (a) and (b) of this Act, and a statement that