110th CONGRESS
1st Session
S. 652
To extend certain trade preferences to certain least-developed
countries, and for other purposes.
IN THE SENATE OF THE UNITED STATES
February 15, 2007
Mr. SMITH (for himself, Mrs. FEINSTEIN, Mr. CRAIG, and Mr. SUNUNU) introduced
the following bill; which was read twice and referred to the Committee on
Finance
A BILL
To extend certain trade preferences to certain least-developed
countries, 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 `Tariff Relief Assistance for Developing Economies
Act of 2007' or as the `TRADE Act of 2007'.
SEC. 2. FINDINGS.
Congress finds the following:
(1) It is in the mutual interest of the United States and the least-developed
countries to promote stable and sustainable economic growth and development.
(2) Trade and investment are powerful economic tools and a country may
use trade and investment to reduce poverty and raise the standard of living
in that country.
(3) A country that is open to trade may increase its economic growth.
(4) Twenty-five percent of the world's population survives on less than
one dollar per day.
(5) Unemployment rates in least-developed countries are extremely high,
including unemployment rates in some countries of up to 70 percent.
(6) Trade and investment often lead to employment opportunities and often
help alleviate poverty.
(7) Least-developed countries have a particular challenge in meeting the
economic requirements and competitiveness of globalization and international
markets.
(8) The United States has recognized the benefits of trade to least-developed
countries by enacting the Generalized System of Preferences and trade
benefits for developing countries in the Caribbean, Andean, and sub-Saharan
African regions of the world.
(9) The challenges of the global trading environment for least-developed
countries are even greater given the end of the Multi-Fiber Arrangement
in 2005, and certain least-developed countries, including Bangladesh,
Cambodia, and Nepal, are particularly vulnerable to the changes that will
result from the end of that Arrangement.
(10) Responding to the needs of least-developed countries would be consistent
with other United States trade objectives, including encouraging forward
progress on the WTO Doha Development Round.
(11) Enhanced trade with the Muslim least-developed countries, including
Yemen, Afghanistan, and Bangladesh, is consistent with other United States
objectives of encouraging a strong private sector and individual economic
empowerment in those countries.
(12) Offering least-developed countries enhanced trade preferences will
encourage both higher levels of trade and direct investment in support
of positive economic and political developments throughout the region
and the world.
(13) Encouraging the reciprocal reduction of trade and investment barriers
will enhance the benefits of trade and investment as well as enhance commercial
and political ties between the United States and the beneficiary countries.
(14) Economic opportunity and engagement in the global trading system
together with support for democratic institutions and a respect for human
rights are mutually reinforcing objectives and key elements of a policy
to confront and defeat global terrorism.
(15) A powerful earthquake and tsunami struck in the Indian Ocean on December
26, 2004.
(16) The destruction caused by the tsunami in Sri Lanka was devastating
and included the loss of an estimated 30,000 people and physical damage
that will cost an amount equal to 6.5 percent of the annual economy of
Sri Lanka to repair.
(17) The effects of lost businesses and reconstruction costs caused by
the tsunami damage will result in a drop in the economic growth of Sri
Lanka.
(18) Senate Resolution 4, 109th Congress, agreed to January 4, 2005, expressed
the support of the Senate for the long-term commitment and engagement
of the United States to provide financial aid and other forms of direct
and indirect assistance to the countries and peoples of the region impacted
by the earthquake and the tsunami.
(19) Duty preferences that assist Sri Lanka in the United States market
will help Sri Lanka rebuild and overcome the economic destruction caused
by the tsunami.
SEC. 3. DEFINITIONS.
(1) BENEFICIARY TRADE ACT OF 2007 COUNTRY- The term `beneficiary TRADE
Act of 2007 country' means a country listed in subsection (b) or (c) of
section 4 that the President has determined is eligible for preferential
treatment under this Act.
(2) FORMER TRADE ACT OF 2007 COUNTRY- The term `former TRADE Act of 2007
country' means a country that, after being designated as a beneficiary
TRADE Act of 2007 country under this Act, ceased to be designated as such
a country by reason of its entering into a free trade agreement with the
United States.
SEC. 4. AUTHORITY TO DESIGNATE; ELIGIBILITY REQUIREMENTS.
(a) Authority To Designate-
(1) IN GENERAL- Notwithstanding any other provision of law, the President
is authorized to designate a TRADE Act of 2007 country as a beneficiary
TRADE Act of 2007 country eligible for benefits described in section 5--
(A) if the President determines that the country meets the requirements
set forth in section 104 of the African Growth and Opportunity Act (19
U.S.C. 3703); and
(B) subject to the authority granted to the President under subsections
(a), (d), and (e) of section 502 of the Trade Act of 1974 (19 U.S. C.
2462 (a), (d), and (e)), if the country otherwise meets the eligibility
criteria set forth in such section 502.
(2) APPLICATION OF SECTION 104- Section 104 of the African Growth and
Opportunity Act shall be applied for purposes of paragraph (1) by substituting
`TRADE Act of 2007 country' for `sub-Saharan African country' each place
it appears.
(b) Countries Eligible for Designation- For purposes of this Act, the term
`TRADE Act of 2007 country' refers to the following or their successor political
entities:
(6) Lao People's Democratic Republic.
(11) Timor-Leste (East Timor).
(c) Sri Lanka Economic Emergency Support- For purposes of this Act, the
President may also designate Sri Lanka as a beneficiary TRADE Act of 2007
country eligible for benefits described in section 5.
SEC. 5. TRADE ENHANCEMENT.
(a) Benefits Described- The benefits described in this section are as follows:
(1) PREFERENTIAL TARIFF TREATMENT FOR CERTAIN ARTICLES-
(A) IN GENERAL- The President may provide duty-free treatment for any
article described in section 503(b)(1) (B) through (G) of the Trade
Act of 1974 (19 U.S.C. 2463(b)(1) (B) through (G)) that is the growth,
product, or manufacture of a beneficiary TRADE Act of 2007 country,
if, after receiving the advice of the International Trade Commission
in accordance with section 503(e) of the Trade Act of 1974 (19 U.S.C.
2463(e)), the President determines that such article is not import-sensitive
in the context of imports from beneficiary TRADE Act of 2007 countries.
(B) RULES OF ORIGIN- The duty-free treatment provided under subparagraph
(A) shall apply to any article described in that subparagraph that meets
the requirements of section 503(a)(2) of the Trade Act of 1974 (19 U.S.C.
2463(a)(2)), except that--
(i) if the cost or value of materials produced in the customs territory
of the United States is included with respect to that article, an
amount not to exceed 15 percent of the appraised value of the article
at the time it is entered that is attributed to such United States
cost or value may be applied toward determining the percentage referred
to in subparagraph (A) of section 503(a)(2) of the Trade Act of 1974
(19 U.S.C. 2463(a)(2)); and
(ii) the cost or value of the materials included with respect to that
article that are produced in one or more beneficiary TRADE Act of
2007 countries or former beneficiary TRADE Act of 2007 countries shall
be applied in determining such percentage.
(2) TEXTILE AND APPAREL ARTICLES-
(A) IN GENERAL- The preferential treatment relating to textile and apparel
articles described in section 112 (a) and (b) (1) and (2) of the African
Growth and Opportunity Act (19 U.S.C. 3721 (a) and (b) (1) and (2))
shall apply to textile and apparel articles imported directly into the
customs territory of the United States from a beneficiary TRADE Act
of 2007 country and such section shall be applied for purposes of this
subparagraph by substituting `TRADE Act of 2007 country' and `TRADE
Act of 2007 countries' for `sub-Saharan African country' and `sub-Saharan
African countries', respectively, each place such terms appear.
(B) APPAREL ARTICLES ASSEMBLED FROM REGIONAL AND OTHER FABRIC- In applying
such section 112, apparel articles wholly assembled in one or more beneficiary
TRADE Act of 2007 countries or former beneficiary TRADE Act of 2007
countries, or both, from fabric wholly formed in one or more beneficiary
TRADE Act of 2007 countries or former beneficiary TRADE Act of 2007
countries, or both, from yarn originating either in the United States
or one or more beneficiary TRADE Act of 2007 countries or former beneficiary
TRADE Act of 2007 countries, or both (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or 5603 of
the Harmonized Tariff Schedule of the United States and are wholly formed
and cut in the United States, in one or more beneficiary TRADE Act of
2007 countries or former beneficiary TRADE Act of 2007 countries, or
any combination thereof), whether or not the apparel articles are also
made from any of the fabrics, fabric components formed, or components
knit-to-shape described in section 112(b) (1) or (2) of the African
Growth and Opportunity Act (unless the apparel articles are made exclusively
from any of the fabrics, fabric components formed, or components knit-to-shape
described in such section 112(b) (1) or (2)) subject to the following:
(i) LIMITATIONS ON BENEFITS-
(I) IN GENERAL- Preferential treatment under this subparagraph shall
be extended in the 1-year period beginning January 1, 2007, and
in each of the succeeding 10 1-year periods, to imports of apparel
articles described in this subparagraph 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.
(II) APPLICABLE PERCENTAGE- For purposes of this clause, the term
`applicable percentage' means 11 percent for the 1-year period beginning
January 1, 2007, increased in each of the 10 succeeding 1-year period
by equal increments, so that for the period beginning January 1,
2017 the applicable percentage does not exceed 14 percent.
(I) IN GENERAL- Subject to clause (i), preferential treatment described
in this subparagraph shall be extended through December 31, 2014,
for apparel articles wholly assembled in one or more beneficiary
TRADE Act of 2007 countries or former beneficiary TRADE Act of 2007
countries, or both, regardless of the country of origin of the yarn
or fabric used to make such articles.
(II) COUNTRY LIMITATIONS-
(aa) SMALL SUPPLIERS- If, during the preceding 1-year period beginning
on January 1 for which data are available, imports from a beneficiary TRADE
Act of 2007 country are less than 1 percent of the aggregate square meter
equivalents of all apparel articles imported into the United States during
such period, such imports may increase to an amount that is equal to not
more than 1.5 percent of the aggregate square meter equivalents of all apparel
articles imported into the United States during such period.
(bb) OTHER SUPPLIERS- If during the preceding 1-year period beginning
on January 1 for which data are available, imports from a beneficiary TRADE
Act of 2007 country are at least 1 percent of the aggregate square meter
equivalents of all apparel articles imported into the United States during
such period, such imports may increase, during each subsequent 12-month
period, by an amount that is equal to not more than one-third of 1 percent
of the aggregate square meter equivalents of all apparel articles imported
into the United States.
(cc) AGGREGATE COUNTRY LIMIT- In no case may the aggregate quantity
of textile and apparel articles imported into the United States under this
subparagraph exceed the applicable percentage set forth in clause (i).
(C) TECHNICAL AMENDMENT- Section 6002(a)(2)(B) of the African Investment
Incentive Act of 2006 (Public Law 109-432) is amended by inserting before
`by striking' the following: `in paragraph (3),'.
(D) OTHER RESTRICTIONS- The provisions of section 112(b) (3)(B), (4),
(5), (6), (7), and (8), and (e), and section 113 of the African Growth
and Opportunity Act (19 U.S.C. 3721(b) (3)(B), (4), (5), (6), (7), and
(8), and (e), and 3722) shall apply with respect to the preferential
treatment extended under this Act to a beneficiary TRADE Act of 2007
country by substituting `TRADE Act of 2007 country' for `sub-Saharan
African country' and `TRADE Act of 2007 countries' and `former TRADE
Act of 2007 countries' for `sub-Saharan African countries' wherever
appropriate.
SEC. 6. REPORTING REQUIREMENT.
The President shall monitor, review, and report to Congress, not later than
1 year after the date of enactment of this Act, and annually thereafter,
on the implementation of this Act and on the trade and investment policy
of the United States with respect to the TRADE Act of 2007 countries.
SEC. 7. TERMINATION OF PREFERENTIAL TREATMENT.
No duty-free treatment or other preferential treatment extended to a beneficiary
TRADE Act of 2007 country under this Act shall remain in effect after December
31, 2017.
SEC. 8. EFFECTIVE DATE.
The provisions of this Act shall take effect on January 1, 2007.
END
