Aid for Trade Act of 1993

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Aid for Trade Act of 1993''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) the end of the Cold War affords the United States the 
        opportunity to reevaluate its foreign assistance priorities;
            (2) the United States must leverage its foreign assistance 
        program, in a humane and balanced way, to enhance American 
        economic competitiveness and to build long-term commercial 
        relationships with recipient countries;
            (3) notwithstanding an agreement by member nations of the 
        Organization for Economic Cooperation and Development (OECD) to 
        restrict the practice of tied aid, America's economic 
        competitors are skillfully using their foreign assistance 
        programs to expand markets for their goods;
            (4) at the same time, only 35 cents of the foreign aid 
        dollar were spent on American goods in 1989, while in 1991, 70 
        percent of United States Economic Support Fund assistance was 
        provided as cash; and
            (5) the Agency for International Development has not 
        responded adequately to the need to use foreign assistance to 
        develop long-term commercial relationships.

SEC. 3. TRADE AND DEVELOPMENT AGENCY.

    (a) Authority To Finance Capital Projects.--Section 661(a) of the 
Foreign Assistance Act of 1961 (22 U.S.C. 2421(a)) is amended by 
inserting ``, including capital projects'' after ``development projects 
in developing and middle-income countries''.
    (b) Funding.--Section 661(f) of such Act (22 U.S.C. 2421(f)) is 
amended by adding at the end the following new paragraph:
    ``(3) Of the amounts authorized to be appropriated by part I of 
this Act other than chapter 1 (relating to development assistance), by 
chapter 4 of part II of this Act, or by section 201(b) of the Support 
for East European Democracy (SEED) Act of 1989, there is authorized to 
be available $435,000,000 for fiscal year 1994 to carry out this 
section.''.
    (c) Definition.--Section 661 of such Act is amended by adding at 
the end the following new subsection:
    ``(g) Definition.--The term `capital project' means a project 
involving the construction, expansion, alteration of, or the 
acquisition of equipment for, a physical facility or physical 
infrastructure, including related engineering design (concept and 
detail) and other services, the procurement of equipment (including any 
related services), and feasibility studies or similar engineering and 
economic services.''.

SEC. 4. LIMITS ON CASH TRANSFERS.

    (a) Limitation.--For each of the following fiscal years, cash 
transfers shall not represent more than the corresponding percentage of 
Economic Support Funds:
            (1) For fiscal year 1994, 50 percent.
            (2) For fiscal year 1995, 45 percent.
            (3) For fiscal year 1996, 40 percent.
            (4) For fiscal year 1997, 35 percent.
            (5) For fiscal year 1998, 30 percent.
    (b) Definitions.--For purposes of this section--
            (1) the term ``cash transfers'' means Economic Support Fund 
        assistance provided as cash payments which are not used for the 
        purchase of United States goods and services or the repayment 
        of debt owed to the United States Treasury; and
            (2) the term ``Economic Support Funds'' means assistance 
        under chapter 4 of part II of the Foreign Assistance Act of 
        1961.

SEC. 5. PROCUREMENT REQUIREMENTS.

    (a) Procurement.--Section 604 of the Foreign Assistance Act of 1961 
is amended to read as follows:

``SEC. 604. PROCUREMENT.

    ``(a) Statement of Policy.--It shall be the policy of the United 
States--
            ``(1) to give preference to the procurement of commodities 
        and services from the United States in foreign assistance 
        programs using funds authorized to be appropriated by this Act; 
        and
            ``(2) to the extent that United States suppliers, 
        contractors and goods are eligible for procurements financed by 
        such donor or lender countries, to permit suppliers, 
        contractors and goods of other donor or lender countries to 
        compete for United States Government-financed procurements.
    ``(b) Limitations on Procurement Outside the United States.--
            ``(1) In general.--Funds made available for assistance 
        under this Act may be used by the President for procurement 
        only in the United States, the recipient country, or developing 
        countries, except as provided otherwise in this subsection. For 
        purposes of this section, the term `developing countries' shall 
        not include advanced developing countries.
            ``(2) Other procurement.--The provisions of paragraph (1) 
        shall be applicable except where it is determined that--
                    ``(A) the provision of such assistance requires 
                commodities or services of a type that are not produced 
                in and available for purchase in any country described 
                in paragraph (1); or
                    ``(B) procurement in such other country is 
                essential--
                            ``(i) to meet emergency situations; or
                            ``(ii) to promote efficiency in the use of 
                        United States foreign assistance resources, 
                        including to avoid impairment of foreign 
                        assistance objectives, where such other country 
                        permits United States firms to compete for the 
                        procurement of similar commodities and services 
                        under its foreign assistance programs.
                    ``(C) Delegation of authority.--With respect to 
                determinations made by the agency primarily responsible 
                for administering Part I (the `agency'), the authority 
                to make determinations under subparagraph (B) shall--
                            ``(i) in the case of paragraph (2)(B)(i), 
                        not be delegated below the level of Mission 
                        Director, country representative or, with 
                        respect to determinations made in Washington, 
                        the responsible Assistant Administrator, as 
                        appropriate; and
                            ``(ii) in the case of paragraph (2)(B)(ii) 
                        with respect to procurement transactions 
                        exceeding $100,000, not be delegated below the 
                        level of Assistant Administrator and, where 
                        such procurement is at or below that amount, 
                        below the level of Mission Director or country 
                        representative.
            ``(3) Procurement of motor vehicles.--
                    ``(A) In general.--None of the funds (including 
                commodity import program assistance) made available to 
                carry out this Act shall be used to finance the 
                purchase, sale, long-term lease, exchange, or guaranty 
                of a sale of motor vehicles unless such motor vehicles 
                are manufactured in the United States.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                where a determination is made that--
                            ``(i) motor vehicles cannot be manufactured 
                        in the United States to meet demands when time 
                        is of the essence;
                            ``(ii) there is a projected lack of 
                        adequate spare parts and service facilities for 
                        United States manufactured vehicles, based on 
                        information provided by the Buy-America 
                        Advocate; or
                            ``(iii) there are no United States 
                        manufacturers for export of the particular type 
                        of vehicle needed.
                    ``(C) Determination.--With respect to 
                determinations made by the agency under subparagraph 
                (B), such determinations shall be in writing and, in 
                the case of a determination to procure in excess of 10 
                vehicles per project or in excess of 5 vehicles for use 
                by a field mission, shall be made at a level not lower 
                than the Assistant Administrator of such agency.
            ``(4) Price limitation.--No funds made available under this 
        Act may be used for the purchase in bulk of any commodities at 
        prices higher than the market price prevailing in the United 
        States at the time of purchase, adjusted for differences in the 
        cost of transportation to destination, quality, and terms of 
        payment.
            ``(5) Agriculture commodities.--
                    ``(A) In general.--In providing for the procurement 
                of any agricultural commodity or product available for 
                disposition under the Agricultural Trade Development 
                and Assistance Act of 1954 for transfer by grant under 
                this Act to any recipient country in accordance with 
                its requirements, the President shall, insofar as 
                practicable and when in furtherance of the purposes of 
                this Act, authorize the procurement of such 
                agricultural commodity only within the United States 
                except to the extent that such agricultural commodity 
                is not available in the United States in sufficient 
                quantities to supply emergency requirements of 
                recipients under this Act.
                    ``(B) Limitation.--No funds made available under 
                this Act may be used for the procurement of any 
                agricultural commodity or product thereof outside the 
                United States when the domestic price of such commodity 
                is less than parity, unless the commodity to be 
                financed could not reasonably be produced in the United 
                States in fulfillment of the objectives of a particular 
                assistance program under which such commodity 
                procurement is to be financed.
            ``(6) Construction and engineering services.--Funds made 
        available under this Act may be made available for the 
        procurement of construction or engineering services from 
        advanced developing countries eligible under the Geographic 
        Code 941 which have attained a competitive capability in 
        international markets for construction services only if such 
        country--
                    ``(A) is receiving direct economic assistance under 
                chapter 1 of part I or chapter 4 of part II of this 
                Act, and
                    ``(B) has its own foreign assistance programs which 
                finance the procurement of construction or engineering 
                services and permits United States firms to compete for 
                those services.
            ``(7) Marine insurance.--In providing assistance in the 
        procurement of commodities in the United States, United States 
        dollars shall be made available for marine insurance on such 
        commodities where such insurance is placed on a competitive 
        basis in accordance with normal trade practice prevailing prior 
        to the outbreak of World War II. In the event a participating 
        country, by statute, decree, rule, or regulation, discriminates 
        against any marine insurance company authorized to do business 
        in any State of the United States, then commodities which are 
        purchased with funds provided under this Act and which are 
        destined for such country shall be insured in the United States 
        against marine risk with a company or companies authorized to 
        do a marine insurance business in any State of the United 
        States.
    ``(c) Non-Project Assistance.--
            ``(1) Commodity import programs.--None of the funds made 
        available to carry out chapters 1 and 10 of part I and chapter 
        4 of part II of this Act may be used under any commodity import 
        program to make any payment to a supplier unless the supplier 
        has certified to the agency such information as such agency 
        shall by regulation prescribe, including but not limited to, a 
        description of the commodity supplied by the supplier, its 
        condition, and its source and origin, and on the basis of such 
        information such agency shall have approved such commodity as 
        eligible and suitable for financing under this Act.
            ``(2) Certain cash transfer programs.--
                    ``(A) Restrictions on use of funds.--Funds made 
                available under cash transfers or similar programs 
                pursuant to chapters 1 and 10 of part I and chapter 4 
                of part II of this Act shall not be used to finance 
                directly or indirectly, commodity import transactions 
                unless such transactions meet agency requirements for 
                United States source, origin, and nationality.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                where the proposed use of such funds to directly or 
                indirectly finance transactions from countries other 
                than the United States is approved by the responsible 
                Assistant Administrator or higher-level official of the 
                agency.
    ``(d) Annual Report.--The Administrator of the agency shall submit 
an annual procurement report to Congress which--
            ``(1) details procurement by the agency of United States 
        commodities and services during the preceding reporting period;
            ``(2) compares Buy-America procurement for the same period 
        of the preceding year;
            ``(3) contains data for all agency activities that reflect 
        the percentages of commodities and services financed by the 
        agency that are of United States source or origin;
            ``(4) analyzes mission or bureau programs to identify 
        shortfalls in performance in meeting Buy-America requirements 
        contained in law and regulations; and
            ``(5) identifies remedial action to overcome such 
        shortfalls.''.
    (b) Buy-America Advocate.--Part III of the Foreign Assistance Act 
of 1961 is amended by inserting after section 604 (as amended by this 
section) the following new section:

``SEC. 604A. BUY-AMERICA ADVOCATE.

    ``(a) Designation of Functions.--The Administrator of the agency 
primarily responsible for administering part I shall designate within 
the agency a Buy-America Advocate for the purpose of fostering the 
participation of United States business in the development process. The 
Buy-America Advocate shall be a senior career employee of the agency 
and shall have experience in commodity import transactions and private 
enterprise activities. The Advocate shall report directly to the 
Administrator with respect to the responsibilities described in 
subsection (b).
    ``(b) Responsibilities of the Buy-America Advocate.--The Buy-
America Advocate shall have such responsibilities and duties as the 
Administrator shall determine including, in conjunction with other 
agency offices as appropriate--
            ``(1) to have access to and the authority to review all 
        documentation involving procurement activities of the agency;
            ``(2) to have full access to technical services and 
        information involving procurement activities, particularly the 
        procurement of commodities and the entering into of contracts, 
        including all information provided under the Buy America 
        Reporting System (BARS) or any successor system to BARS;
            ``(3) to review all programs involving cash transfers to 
        determine whether a commodity import program would accomplish 
        the same policy objectives as the cash transfer; any 
        disagreement with a determination by the Buy-America Advocate 
        that the same policy objectives can be accomplished by a 
        commodity import program shall, as appropriate, be resolved by 
        the Administrator;
            ``(4) to receive and review all waiver actions approved at 
        the level of Assistant Administrator and, based on that review, 
        to recommend to the Administrator, as appropriate, any actions 
        which may be necessary to ensure that Buy America procurement 
        opportunities are maximized;
            ``(5) to develop and support general outreach activities 
        with the United States business community, including procedures 
        whereby interested United States contractors and suppliers can 
        be apprised of, and encouraged to participate in, prospective 
        procurement actions under this Act;
            ``(6) to coordinate its efforts with agency officials who 
        perform duties in the area of trade and investment promotion 
        and information; and
            ``(7) to assist in the preparation of the report required 
        in section 604(d).
    ``(c) Support.--The Administrator shall ensure that the Buy-America 
Advocate is assisted by qualified staff and receives such other 
support, including access to all procurement documentation of the 
Agency, as may be necessary to carry out the responsibilities specified 
in this section.''.
    (c) Repeals.--Sections 496(n)(4) and 636(i) of the Foreign 
Assistance Act of 1961 are repealed.

SEC. 6. OECD AGREEMENT.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, the Secretary of the Treasury shall submit a 
report to Congress on the agreement of the Organization for Economic 
Cooperation and Development (OECD) to restrict tied aid practices.
    (b) Content of Report.--The report required by subsection (a) shall 
include--
            (1) the intentions and history of the agreement;
            (2) a review of efforts by other signatory nations to 
        circumvent the OECD agreement;
            (3) an assessment of whether the OECD agreement is 
        enforceable;
            (4) an estimate of the value of ongoing tied aid projects; 
        and
            (5) a recommendation on whether the United States should 
        reopen negotiations.

                                 

S 722 IS----2

Summary: Aid for Trade Act of 1993 - Amends the Foreign Assistance Act of 1961 to earmark foreign assistance funds for Trade and Development Agency projects in developing and middle-income countries. 
Limits the percentage of Economic Support Fund assistance to be used for cash transfers in FY 1994 through 1998. 
Declares that it is U.S. policy to give preference to the procurement of U.S. commodities and services in foreign assistance programs. 
Expands, and revises the authority to make, exceptions to a prohibition on the use of foreign assistance funds to procure motor vehicles that are not manufactured in the United States.  (Currently, the President is authorized to waive the prohibition in special circumstances.) 
Bars the use of foreign assistance funds made available under cash transfers to finance commodity import transactions unless such transactions meet agency requirements for U.S.  source, origin, and nationality (or unless such use is officially approved). 
Designates a Buy-America Advocate within the agency primarily responsible for administering development assistance under the Foreign Assistance Act of 1961. 
Directs the Secretary of the Treasury to report to the Congress on the agreement of the Organization of Economic Cooperation and Development to restrict tied aid practices.