| HR 3009 IH
107th CONGRESS
1st Session
H. R. 3009
To extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
October 3, 2001
Mr. CRANE (for himself and Mr. THOMAS) introduced the following bill;
which was referred to the Committee on Ways and Means
A BILL
To extend the Andean Trade Preference Act, to grant additional trade
benefits under that Act, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Andean Trade Promotion and Drug
Eradication Act'.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) Since the Andean Trade Preference Act was enacted in 1991, it
has had a positive impact on United States trade with Bolivia,
Colombia, Ecuador, and Peru. Two-way trade has doubled, with the
United States serving as the leading source of imports and leading
export market for each of the Andean beneficiary countries. This has
resulted in increased jobs and expanded export opportunities in both
the United States and the Andean region.
(2) The Andean Trade Preference Act has been a key element in the
United States counternarcotics strategy in the Andean region,
promoting export diversification and broad-based economic
development that provides sustainable economic alternatives to
drug-crop production, strengthening the legitimate economies of
Andean countries and creating viable alternatives to illicit trade
in coca.
(3) Notwithstanding the success of the Andean Trade Preference Act,
the Andean region remains threatened by political and economic
instability and fragility, vulnerable to the consequences of the
drug war and fierce global competition for its legitimate trade.
(4) The continuing instability in the Andean region poses a threat
to the security interests of the United States and the world. This
problem has been partially addressed through foreign aid, such as
Plan Colombia, enacted by Congress in 2000. However, foreign aid
alone is not sufficient. Enhancement of legitimate trade with the
United States provides an alternative means for reviving and
stabilizing the economies in the Andean region.
(5) The Andean Trade Preference Act constitutes a tangible
commitment by the United States to the promotion of prosperity,
stability, and democracy in the beneficiary countries.
(6) Renewal and enhancement of the Andean Trade Preference Act will
bolster the confidence of domestic private enterprise and foreign
investors in the economic prospects of the region, ensuring that
legitimate private enterprise can be the engine of economic
development and political stability in the region.
(7) Each of the Andean beneficiary countries is committed to
conclude negotiation of a Free Trade Area of the Americas by the
year 2005, as a means of enhancing the economic security of the
region.
(8) Temporarily enhancing trade benefits for Andean beneficiary
countries will promote the growth of free enterprise and economic
opportunity in these countries and serve the security interests of
the United States, the region, and the world.
SEC. 3. ARTICLES ELIGIBLE FOR PREFERENTIAL TREATMENT.
(a) ELIGIBILITY OF CERTAIN ARTICLES- Section 204 of the Andean Trade
Preference Act (19 U.S.C. 3203) is amended--
(1) by striking subsection (c) and redesignating subsections (d)
through (g) as subsections (c) through (f), respectively; and
(2) by amending subsection (b) to read as follows:
`(b) EXCEPTIONS AND SPECIAL RULES-
`(1) CERTAIN ARTICLES THAT ARE NOT IMPORT-SENSITIVE- The President
may proclaim duty-free treatment under this title for any of the
following articles only if the article is the product of an ATPEA
beneficiary country and only if the President determines that the
article is not import-sensitive in the context of imports from ATPEA
beneficiary countries:
`(A) Footwear not designated at the time of the effective date of
this Act as eligible for the purpose of the generalized system of
preferences under title V of the Trade Act of 1974.
`(B) Petroleum, or any product derived from petroleum, provided
for in headings 2709 and 2710 of the HTS.
`(C) 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.
`(D) Sugars, syrups, and molasses classified in subheadings
1701.11.03, 1701.12.02, 1701.99.02, 1702.90.32, 1806.10.42, and
2106.90.12 of the HTS.
`(E) Handbags, luggage, flat goods, work gloves, and leather
wearing apparel that--
`(i) are the product of an ATPEA beneficiary country; and
`(ii) were not designated on August 5, 1983, as eligible
articles for purposes of the generalized system of preferences
under title V of the Trade Act of 1974.
`(2) EXCLUSIONS- Duty-free treatment under this title may not be
extended to--
`(B) rum and tafia classified in subheading 2208.40.00 of the HTS.
`(A) IN GENERAL- Apparel articles that are imported directly into
the customs territory of the United States from an ATPEA
beneficiary country shall enter the United States free of duty and
free of any quantitative restrictions, limitations, or
consultation levels, but only if such articles are described in
subparagraph (B).
`(B) COVERED ARTICLES- The apparel articles referred to in
subparagraph (A) are the following:
`(i) APPAREL ARTICLES ASSEMBLED FROM PRODUCTS OF THE UNITED
STATES AND ATPEA BENEFICIARY COUNTRIES OR PRODUCTS NOT AVAILABLE
IN COMMERCIAL QUANTITIES- Apparel articles sewn or otherwise
assembled in 1 or more ATPEA beneficiary countries exclusively
from any one or any combination of the following:
`(I) Fabrics or fabric components formed, or components
knit-to-shape, in the United States (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are formed in the United
States).
`(II) Fabrics or fabric components formed, or components
knit-to-shape, in 1 or more ATPEA beneficiary countries, from
yarns formed in 1 or more ATPEA beneficiary countries, if such
fabrics (including fabrics not formed from yarns, if such
fabrics are classifiable under heading 5602 or 5603 of the HTS
and are formed in 1 or more ATPEA beneficiary countries) are
in chief weight of llama, or alpaca.
`(III) Fabrics or yarns, without regard to where they are
formed, if such fabrics or yarns are classifiable under
headings of the HTS from which a change in tariff
classification is allowed under the applicable rules for the
good under General Note 12(t) of the HTS (except for goods
classifiable under heading 6212.10 of the HTS), without regard
to whether the components of such yarns or fabrics determine
the tariff classification of the apparel article, except that
if such yarns or fabrics are used to produce knit-to-shape
components, the components must be knit-to-shape in the United
States or in 1 or more ATPEA beneficiary countries.
`(ii) ADDITIONAL FABRICS- At the request of any interested
party, the President is authorized to proclaim additional
fabrics and yarns as eligible for preferential treatment under
clause (i)(III) if--
`(I) the President determines that such fabrics or yarns
cannot be supplied by the domestic industry in commercial
quantities in a timely manner;
`(II) the President has obtained advice regarding the proposed
action from the appropriate advisory committee established
under section 135 of the Trade Act of 1974 (19 U.S.C. 2155)
and the United States International Trade Commission;
`(III) within 60 days after the request, the President has
submitted a report to the Committee on Ways and Means of the
House of Representatives and the Committee on Finance of the
Senate that sets forth the action proposed to be proclaimed
and the reasons for such action, and the advice obtained under
subclause (II);
`(IV) a period of 60 calendar days, beginning with the first
day on which the President has met the requirements of
subclause (III), has expired; and
`(V) the President has consulted with such committees
regarding the proposed action during the period referred to in
subclause (III).
`(iii) APPAREL ARTICLES ASSEMBLED IN 1 OR MORE ATPEA BENEFICIARY
COUNTRIES FROM REGIONAL FABRICS OR REGIONAL COMPONENTS- (I)
Subject to the limitation set forth in subclause (II), apparel
articles sewn or otherwise assembled in 1 or more ATPEA
beneficiary countries from fabrics or from fabric components
formed or from components knit-to-shape, in 1 or more ATPEA
beneficiary countries, from yarns formed in the United States or
in 1 or more ATPEA beneficiary countries (including fabrics not
formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are formed in 1 or more
ATPEA beneficiary countries), whether or not the apparel
articles are also made from any of the fabrics, fabric
components formed, or components knit-to-shape described in
clause (i).
`(II) The preferential treatment referred to in subclause (I)
shall be extended in the 1-year period beginning December 1,
2001, and in each of the 5 succeeding 1-year periods, to imports
of apparel articles in an amount not to exceed the applicable
percentage of the aggregate square meter equivalents of all
apparel articles imported into the United States in the
preceding 12-month period for which data are available.
`(III) For purposes of subclause (II), the term `applicable
percentage' means 3 percent for the 1-year period beginning
December 1, 2001, increased in each of the 5 succeeding 1-year
periods by equal increments, so that for the period beginning
December 1, 2005, the applicable percentage does not exceed 6
percent.
`(iv) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES- A handloomed,
handmade, or folklore article of an ATPEA beneficiary country
identified under subparagraph (C) that is certified as such by
the competent authority of such beneficiary country.
`(I) EXCEPTION FOR FINDINGS AND TRIMMINGS- An article
otherwise eligible for preferential treatment under this
paragraph shall not be ineligible for such treatment because
the article contains findings or trimmings of foreign origin,
if such findings and trimmings do not exceed 25 percent of the
cost of the components of the assembled product. Examples of
findings and trimmings are sewing thread, hooks and eyes,
snaps, buttons, `bow buds', decorative lace, trim, elastic
strips, zippers, including zipper tapes and labels, and other
similar products.
`(II) CERTAIN INTERLINING- (aa) An article otherwise eligible
for preferential treatment under this paragraph shall not be
ineligible for such treatment because the article contains
certain interlinings of foreign origin, if the value of such
interlinings (and any findings and trimmings) does not exceed
25 percent of the cost of the components of the assembled
article.
`(bb) Interlinings eligible for the treatment described in
division (aa) include only a chest type plate, `hymo' piece,
or `sleeve header', of woven or weft-inserted warp knit
construction and of coarse animal hair or man-made filaments.
`(cc) The treatment described in this subclause shall
terminate if the President makes a determination that United
States manufacturers are producing such interlinings in the
United States in commercial quantities.
`(III) DE MINIMIS RULE- An article that would otherwise be
ineligible for preferential treatment under this subparagraph
because the article contains fibers or yarns not wholly formed
in the United States or in one or more ATPEA beneficiary
countries shall not be ineligible for such treatment if the
total weight of all such fibers or yarns is not more than 7
percent of the total weight of the good.
`(C) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES- For purposes of
subparagraph (B)(iv), the President shall consult with
representatives of the ATPEA beneficiary countries concerned for
the purpose of identifying 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)
of the Annex or Appendix 3.1.B.11 of the Annex.
`(D) PENALTIES FOR TRANSSHIPMENT-
`(i) PENALTIES FOR EXPORTERS- If the President determines, based
on sufficient evidence, that an exporter has engaged in
transshipment with respect to apparel articles from an ATPEA
beneficiary country, then the President shall deny all benefits
under this title to such exporter, and any successor of such
exporter, for a period of 2 years.
`(ii) PENALTIES FOR COUNTRIES- Whenever the President finds,
based on
sufficient evidence, that transshipment has occurred, the President
shall request that the ATPEA beneficiary country or countries through
whose territory the transshipment has occurred take all necessary and
appropriate actions to prevent such transshipment. If the President
determines that a country is not taking such actions, the President
shall reduce the quantities of apparel articles that may be imported
into the United States from such country by the quantity of the
transshipped articles multiplied by 3, to the extent consistent with the
obligations of the United States under the WTO.
`(iii) TRANSSHIPMENT DESCRIBED- Transshipment within the meaning
of this subparagraph has occurred when preferential treatment
under subparagraph (A) has been claimed for an apparel article
on the basis of material false information concerning the
country of origin, manufacture, processing, or assembly of the
article or any of its components. For purposes of this clause,
false information is material if disclosure of the true
information would mean or would have meant that the article is
or was ineligible for preferential treatment under subparagraph
(A).
`(E) BILATERAL EMERGENCY ACTIONS-
`(i) IN GENERAL- The President may take bilateral emergency
tariff actions of a kind described in section 4 of the Annex
with respect to any apparel article imported from an ATPEA
beneficiary country if the application of tariff treatment under
subparagraph (A) to such article results in conditions that
would be cause for the taking of such actions under such section
4 with respect to a like article described in the same 8-digit
subheading of the HTS that is imported from Mexico.
`(ii) RULES RELATING TO BILATERAL EMERGENCY ACTION- For purposes
of applying bilateral emergency action under this subparagraph--
`(I) the requirements of paragraph (5) of section 4 of the
Annex (relating to providing compensation) shall not apply;
`(II) the term `transition period' in section 4 of the Annex
shall mean the period ending December 31, 2006; and
`(III) the requirements to consult specified in section 4 of
the Annex shall be treated as satisfied if the President
requests consultations with the ATPEA beneficiary country in
question and the country does not agree to consult within the
time period specified under section 4.
`(i) REGULATIONS- Any importer that claims preferential
treatment under paragraph (1) or (3) shall comply with customs
procedures similar in all material respects to the requirements
of Article 502(1) of the NAFTA as implemented pursuant to United
States law, in accordance with regulations promulgated by the
Secretary of the Treasury.
`(I) IN GENERAL- In order to qualify for the preferential
treatment under paragraph (1) or (3) and for a Certificate of
Origin to be valid with respect to any article for which such
treatment is claimed, there shall be in effect a determination
by the President that each country described in subclause
(II)--
`(aa) has implemented and follows; or
`(bb) is making substantial progress toward implementing and following,
procedures and requirements similar in all material respects
to the relevant procedures and requirements under chapter 5 of
the NAFTA.
`(II) COUNTRY DESCRIBED- A country is described in this
subclause if it is an ATPEA beneficiary country--
`(aa) from which the article is exported; or
`(bb) in which materials used in the production of the article originate
or in which the article or such materials undergo production that
contributes to a claim that the article is eligible for preferential
treatment under paragraph (1) or (3).
`(B) CERTIFICATE OF ORIGIN- The Certificate of Origin that
otherwise would be required pursuant to the provisions of
subparagraph (A) shall not be required in the case of an article
imported under paragraph (1) or (3) if such Certificate of Origin
would not be required under Article 503 of the NAFTA (as
implemented pursuant to United States law), if the article were
imported from Mexico.
`(5) DEFINITIONS- In this subsection--
`(A) ANNEX- The term `the Annex' means Annex 300-B of the NAFTA.
`(B) ATPEA BENEFICIARY COUNTRY- The term `ATPEA beneficiary
country' means any `beneficiary country', as defined in section
203(a)(1) of this title, which the President designates as an
ATPEA beneficiary country, taking into account the criteria
contained in subsections (b) and (c) of section 203 and other
appropriate criteria, including the following:
`(i) Whether the beneficiary country has demonstrated a
commitment to--
`(I) undertake its obligations under the WTO, including those
agreements listed in section 101(d) of the Uruguay Round
Agreements Act, on or ahead of schedule; and
`(II) participate in negotiations toward the completion of the
FTAA or another free trade agreement.
`(ii) The extent to which the country provides protection of
intellectual property rights consistent with or greater than the
protection afforded under the Agreement on Trade-Related Aspects
of Intellectual Property Rights described in section 101(d)(15)
of the Uruguay Round Agreements Act.
`(iii) The extent to which the country provides internationally
recognized worker rights, including--
`(I) the right of association;
`(II) the right to organize and bargain collectively;
`(III) a prohibition on the use of any form of forced or
compulsory labor;
`(IV) a minimum age for the employment of children; and
`(V) acceptable conditions of work with respect to minimum
wages,
hours of work, and occupational safety and health;
`(iv) Whether the country has implemented its commitments to
eliminate the worst forms of child labor, as defined in section
507(6) of the Trade Act of 1974.
`(v) The extent to which the country has met the
counter-narcotics certification criteria set forth in section
490 of the Foreign Assistance Act of 1961 (22 U.S.C. 2291j) for
eligibility for United States assistance.
`(vi) The extent to which the country has taken steps to become
a party to and implements the Inter-American Convention Against
Corruption.
`(vii) The extent to which the country--
`(I) applies transparent, nondiscriminatory, and competitive
procedures in government procurement equivalent to those
contained in the Agreement on Government Procurement described
in section 101(d)(17) of the Uruguay Round Agreements Act; and
`(II) contributes to efforts in international fora to develop
and implement international rules in transparency in
government procurement.
`(C) NAFTA- The term `NAFTA' means the North American Free Trade
Agreement entered into between the United States, Mexico, and
Canada on December 17, 1992.
`(D) WTO- The term `WTO' has the meaning given that term in
section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501).'.
(b) CONFORMING AMENDMENTS- (1) Section 202 of the Andean Trade
Preference Act (19 U.S.C. 3201) is
amended by inserting `(or other preferential treatment)' after
`treatment'.
(2) Section 204(a) of the Andean Trade Preference Act (19 U.S.C.
3203(a)) is amended--
(A) in paragraph (1), by inserting `(or otherwise provided for)'
after `eligibility'; and
(B) in paragraph (2), by striking `subsection (a)' and inserting
`paragraph (1)'.
SEC. 4. TERMINATION OF PREFERENTIAL TREATMENT.
Section 208 of the Andean Trade Preference Act (19 U.S.C. 3206) is
amended to read as follows:
`SEC. 208. TERMINATION OF PREFERENTIAL TREATMENT.
`No duty-free treatment or other preferential treatment extended to
beneficiary countries under this title shall remain in effect after
December 31, 2006.'.
SEC. 5. TRADE BENEFITS UNDER THE CARIBBEAN BASIN ECONOMIC RECOVERY
ACT.
Section 213(b)(2)(A) of the Carribean Basin Economic Recovery Act (19
U.S.C. 2703(b)(2)(A)) is amended as follows:
(1) Clause (i) is amended by striking the matter preceding subclause
(I) and inserting the following:
`(i) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE CBTPA BENEFICIARY
COUNTRIES- Apparel articles sewn or otherwise assembled in one
or more CBTPA beneficiary countries from fabrics wholly formed
and cut, or from components knit-to-shape, in the United States
from yarns wholly formed in the United States, (including
fabrics not formed from yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS and are wholly formed and
cut in the United States) that are--'.
(2) Clause (ii) is amended to read as follows:
`(ii) APPAREL ARTICLES CUT AND ASSEMBLED IN ONE OR MORE CBTPA
BENEFICIARY COUNTRIES- Apparel articles cut in one or more CBTPA
beneficiary countries from fabric wholly formed in the United
States, or from components knit-to-shape in the United States,
from yarns wholly formed in the United States (including fabrics
not formed from yarns, if such fabrics are classifiable under
heading 5602 or 5603 of the HTS and are wholly formed in the
United States), if such articles are sewn or otherwise assembled
in one or more such countries with thread formed in the United
States.'.
SEC. 6. TRADE BENEFITS UNDER THE AFRICAN GROWTH AND OPPORTUNITY ACT.
Section 112(b) of the African Growth and Opportunity Act (19 U.S.C.
3721(b)) is amended as follows:
(1) Paragraph (1) is amended--
(A) by amending the heading to read as follows:
`(1) APPAREL ARTICLES ASSEMBLED IN ONE OR MORE BENEFICIARY
SUB-SAHARAN AFRICAN COUNTRIES- '; and
(B) by amending the matter preceding subparagraph (A) to read as
follows: `Apparel articles sewn or otherwise assembled in one or
more beneficiary sub-Saharan African countries from fabrics wholly
formed and cut, or from components knit-to-shape, in the United
States from yarns wholly formed in the United States, (including
fabrics not formed from yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS and are wholly formed and
cut in the United States) that are--'.
(2) Paragraph (2) is amended to read as follows:
`(2) APPAREL ARTICLES CUT AND ASSEMBLED IN ONE OR MORE BENEFICIARY
SUB-SAHARAN AFRICAN COUNTRIES- Apparel articles cut in one or more
beneficiary sub-Saharan African countries from fabric wholly formed
in the United States, or from components knit-to-shape in the United
States, from yarns wholly formed in the United States, (including
fabrics not formed from yarns, if such fabrics are classifiable
under heading 5602 or 5603 of the HTS and are wholly formed in the
United States) if such articles are sewn or otherwise assembled in
one or more such countries with thread formed in the United
States.'.
(3) Paragraph (3) is amended--
(A) in the matter preceding subparagraph (A), by inserting `, or
components knit-to-shape,' after `from fabric wholly formed';
(B) in subparagraph (A)(ii)--
(i) by striking `1.5' and inserting `3'; and
(ii) by striking `3.5' and inserting `7'; and
(C) in subparagraph (B), by amending clause (i) to read as
follows:
`(i) IN GENERAL- Subject to subparagraph (A), preferential
treatment under this paragraph shall be extended through
September 30, 2004, for apparel articles wholly assembled or
knit-to-shape and wholly assembled in one or more lesser
developed beneficiary sub-Saharan African countries regardless
of the country of origin of the fabric or the yarn used to make
such articles.'.
END
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