S. 2485 (107th): Andean Trade Promotion and Drug Eradication Act

107th Congress, 2001–2002. Text as of May 09, 2002 (Placed on Calendar in the Senate).

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S 2485 PCS

Calendar No. 367

107th CONGRESS

2d Session

S. 2485

Entitled the ‘Andean Trade Promotion and Drug Eradication Act’.

IN THE SENATE OF THE UNITED STATES

May 8, 2002

Mr. MCCAIN (for himself, Mr. GRAMM, and Mr. NICKLES) introduced the following bill; which was read the first time

May 9, 2002

Read the second time and placed on the calendar


A BILL

Entitled the ‘Andean Trade Promotion and Drug Eradication Act’.

    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 article described in subparagraph (A), (B), (C), or (D) that is the growth, product, or manufacture of an ATPDEA beneficiary country and that meets the requirements of this section, if the President determines that such article is not import-sensitive in the context of imports from ATPDEA 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) Handbags, luggage, flat goods, work gloves, and leather wearing apparel that 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- Subject to paragraph (3), duty-free treatment under this title may not be extended to--

        ‘(A) textiles and apparel articles which were not eligible articles for purposes of this title on January 1, 1994, as this title was in effect on that date;

        ‘(B) rum and tafia classified in subheading 2208.40 of the HTS; or

        ‘(C) sugars, syrups, and sugar-containing products subject to over-quota duty rates under applicable tariff-rate quotas.

      ‘(3) Apparel articles-

        ‘(A) IN GENERAL- Apparel articles that are imported directly into the customs territory of the United States from an ATPDEA 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 ATPDEA BENEFICIARY COUNTRIES OR PRODUCTS NOT AVAILABLE IN COMMERCIAL QUANTITIES- Apparel articles sewn or otherwise assembled in 1 or more ATPDEA beneficiary countries, or the United States, or both, 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, from yarns formed in the United States or 1 or more ATPDEA 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 the United States).

            ‘(II) Fabrics or fabric components formed or components knit-to-shape, in 1 or more ATPDEA beneficiary countries, from yarns formed in 1 or more ATPDEA beneficiary countries, if such fabrics (including fabrics not formed from yarns, if such fabrics are classified under heading 5602 or 5603 of the HTS and are formed in 1 or more ATPDEA beneficiary countries) or components are in chief weight of llama or alpaca.

            ‘(III) Fabrics or yarn that is not formed in the United States or in one or more ATPDEA beneficiary countries, to the extent that apparel articles of such fabrics or yarn would be eligible for preferential treatment, without regard to the source of the fabrics or yarn, under Annex 401 of the NAFTA.

          ‘(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 ATPDEA 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 ATPDEA beneficiary countries from fabrics or from fabric components formed or from components knit-to-shape, in 1 or more ATPDEA beneficiary countries, from yarns formed in the United States or 1 or more ATPDEA 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 ATPDEA 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 ATPDEA beneficiary country identified under subparagraph (C) that is certified as such by the competent authority of such beneficiary country.

          ‘(v) SPECIAL RULES-

            ‘(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.

            ‘(II) 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 ATPDEA 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 ATPDEA 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 ATPDEA 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 ATPDEA 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 transshiped 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 ATPDEA 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 ATPDEA beneficiary country in question and the country does not agree to consult within the time period specified under section 4.

      ‘(4) CUSTOMS PROCEDURES-

        ‘(A) IN GENERAL-

          ‘(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.

          ‘(ii) DETERMINATION-

            ‘(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 ATPDEA 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) ATPDEA BENEFICIARY COUNTRY- The term ‘ATPDEA beneficiary country’ means any ‘beneficiary country’, as defined in section 203(a)(1) of this title, which the President designates as an ATPDEA beneficiary country, taking into account the criteria contained in subsections (c) and (d) 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.

Calendar No. 367

107th CONGRESS

2d Session

S. 2485

A BILL

Entitled the ‘Andean Trade Promotion and Drug Eradication Act’.


May 9, 2002

Read the second time and placed on the calendar