To amend the Trade Act of 1974 and the Sherman Act to address foreign private and joint public-private market access barriers that harm United States trade, and to amend the Trade Act of 1974 to address the failure of foreign governments to cooperate in the provision of information relating to certain investigations.

July 15, 2003

Mr. LEVIN introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on the Judiciary, 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

To amend the Trade Act of 1974 and the Sherman Act to address foreign private and joint public-private market access barriers that harm United States trade, and to amend the Trade Act of 1974 to address the failure of foreign governments to cooperate in the provision of information relating to certain investigations.

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 `Trade Enhancement Act of 2003'.

SEC. 2. FINDINGS.

The Congress makes the following findings:

(1) Recent financial crises affecting key trading partners show that the health of the international economic system depends on open, competitive markets.

(2) Resolution of these financial crises, which tend to arise in relatively closed markets, depends on structural reform.

(3) Restrictive foreign government policies, private restraints, and collaborative public-private barriers perpetuate an unacceptably large United States trade deficit which is now once again growing sharply.

(4) More broadly, import barriers in major foreign markets injure United States industries by restricting United States exports, by creating profit sanctuaries which serve as platforms for injurious dumping, and by causing shipments from third countries to be diverted to the United States market.

(5) The agreements adopted by the World Trade Organization do not currently provide a basis to address sophisticated methods of blocking market access and effective competition in a foreign market, particularly the growing number of joint public-private market access barriers, including nontransparent forms of regulation, which impose a substantial burden on United States and world commerce.

(6) Partially as a result of changes effected by the agreements adopted by the World Trade Organization, section 301 of the Trade Act of 1974 does not currently address private and joint public-private market access barriers as effectively as it should.

(7)(A) The limitations of the investigative abilities of the United States Trade Representative were highlighted in the investigation conducted under section 301 of the Trade Act of 1974 of the wheat trade practices of the Canadian Wheat Board.

(B) In the case referred to in subparagraph (A), the Trade Representative concluded that not only did Canada grant the Canadian Wheat Board (CWB) `special monopoly rights and privileges which disadvantage United States wheat farmers', but the CWB also `refused to provide USTR certain necessary information' for the section 301 investigation.

TITLE I--FOREIGN PRIVATE AND PUBLIC-PRIVATE MARKET ACCESS BARRIERS

SEC. 101. AMENDMENTS TO SECTION 301(d) OF THE TRADE ACT OF 1974.

(a) UNJUSTIFIABLE ACTS, POLICIES, AND PRACTICES- Section 301(d)(4)(A) of the Trade Act of 1974 (19 U.S.C. 2411(d)(4)(A)) is amended to read as follows:

`(4)(A) An act, policy, or practice is unjustifiable if the act, policy, or practice--

`(i) is in violation of, or inconsistent with, the international legal rights of the United States; or

`(ii) constitutes fostering by a foreign government of systematic anticompetitive activities by persons or among persons in one or more foreign countries that have the effect of restricting, on a basis that is inconsistent with commercial considerations, access of United States goods or services to a foreign market or diverting foreign goods or services toward the United States market.'.

(b) UNREASONABLE ACTS, POLICIES, AND PRACTICES- Section 301(d)(3)(B)(i)(IV) of the Trade Act of 1974 (19 U.S.C. 2411(d)(3)(B)(i)(IV)) is amended to read as follows:

`(IV) market opportunities, including the toleration by a foreign government of systematic anticompetitive activities by persons or among persons in one or more foreign countries that have the effect of restricting, on a basis that is inconsistent with commercial considerations, access of United States goods or services to a foreign market or diverting foreign goods or services toward the United States market.'.

SEC. 102. AMENDMENTS TO SECTION 304 OF THE TRADE ACT OF 1974.

(a) DETERMINATION REGARDING PRIVATE ANTI-COMPETITIVE CONDUCT- Section 304(a)(1) of the Trade Act of 1974 (19 U.S.C. 2414(a)(1)) is amended by striking subparagraph (B) and inserting the following:

`(B) if the determination made under subparagraph (A) is affirmative--

`(i) determine what action, if any, the Trade Representative should take under subsection (a) or (b) of section 301; and

`(ii) further determine whether there is reason to believe that the conduct of the foreign country that is the subject of the determination under subparagraph (A) involves anticompetitive conduct engaged in by any natural or corporate person or persons.'.

(b) REFERRAL TO ATTORNEY GENERAL- Section 304 of the Trade Act of 1974 is amended by redesignating subsection (c) as subsection (d) and inserting after subsection (b) the following:

`(c) REFERRAL TO ATTORNEY GENERAL- If the determination under subsection (a)(1)(B)(ii) is affirmative, the Trade Representative shall refer the matter to the Attorney General for investigation into whether the practices at issue constitute violations of the Sherman Act (15 U.S.C. 1-7).'.

SEC. 103. TRANSITION RULE; OUTSTANDING DETERMINATIONS BY TRADE REPRESENTATIVE.

(a) TREATMENT OF PREEXISTING DETERMINATIONS- The United States Trade Representative shall have the authority to determine, with respect to any affirmative determination made before the enactment of this Act by the Trade Representative under section 304 of the Trade Act of 1974 (19 U.S.C. 2414)--

(1) whether the determination identifies a burden or restriction on United States commerce that has not been eliminated; and

(2) whether the determination identifies acts, policies, or practices that are still in existence and that involve anticompetitive conduct engaged in by any natural or corporate person or persons.

(b) TIMING- The Trade Representative shall make the determinations described in subsection (a) not later than 120 days after--

(1) a request therefor is made by the original petitioner or its legal successor-in-interest; or

(2) publication in the Federal Register of a notice announcing the Trade Representative's intent to review a prior determination on the Trade Representative's own initiative, during which time the Trade Representative shall--

(A) give interested parties an opportunity to comment on all matters to be covered by the determinations; and

(B) if the Trade Representative has reason to believe that the original determination identifies acts, policies, or practices that are still in existence and that involve anticompetitive conduct engaged in by any natural or corporate person or persons, refer the matter to the Attorney General pursuant to section 304(c) of the Trade Act of 1974, as amended by this Act.

SEC. 104. AMENDMENTS TO THE SHERMAN ACT.

The Sherman Act (15 U.S.C. 1-7) is amended by inserting after section 7 the following:

`SEC. 7A. PROCEDURES FOLLOWING REFERRAL FROM TRADE REPRESENTATIVE.

`(a) INVESTIGATION BY ATTORNEY GENERAL- Upon referral of a matter from the United States Trade Representative under section 304(c) of the Trade Act of 1974, the Attorney General shall commence an investigation into whether the matter involves a violation of this Act.

`(b) ACTION FOLLOWING INVESTIGATION-

`(1) DETERMINATION BY ATTORNEY GENERAL- At the conclusion of the investigation required by subsection (a), the Attorney General shall determine whether there is reason to believe that a person or persons have violated or are violating any of the provisions of this Act.

`(2) TIMING OF DETERMINATION- (A) Subject to subparagraph (B), the Attorney General shall make the determination required under paragraph (1) on or before the date that is 180 days after the date on which the matter was referred by the Trade Representative to the Attorney General.

`(B) If the Attorney General determines that complex or complicated issues are involved in the investigation that require additional time, the Attorney General shall publish in the Federal Register notice of such determination and shall make the determination required under paragraph (1) with respect to such investigation by no later than the date that is 270 days after the date on which the matter was referred by the Trade Representative to the Attorney General.

`(3) ACTION IF DETERMINATION AFFIRMATIVE- If the determination under paragraph (1) is affirmative, the Attorney General shall--

`(A) commence an action in a district court of the United States seeking injunctive relief and any other relief that a court may deem just against the person or persons believed to have violated or be violating any of the provisions of this Act, by issuing a complaint and causing it to be served upon such person or persons; or

`(B) submit a report to the Committees on Ways and Means and on the Judiciary of the House of Representatives and the Committees on Finance and on the Judiciary of the Senate, setting forth reasons for declining to commence an action against the person or persons who the Attorney General has reason to believe have violated or are violating any of the provisions of this Act. Reasons for declining to commence an action may include--

`(i) such person or persons have ceased the conduct believed to have violated any of the provisions of this Act and have entered into an agreement with the Attorney General whereby they commit to refrain from such conduct in the future;

`(ii) the foreign country or countries in which such person or persons reside have undertaken enforcement action which, in the judgment of the Attorney General, is likely to lead to cessation of the conduct believed to have violated any of the provisions of this Act;

`(iii) it is impossible to obtain personal jurisdiction over such person or persons consistent with the requirement of

due process under the United States Constitution; or

`(iv) in the interests of comity, such action should not be commenced, taking into account--

`(I) the relative significance to the alleged violation of conduct within the United States, as compared to conduct abroad;

`(II) the nationality of the persons involved in or affected by the conduct;

`(III) the presence or absence of a purpose to affect United States consumers, markets, or exporters;

`(IV) the relative significance and foreseeability of the effects of the conduct on the United States as compared to the effects abroad;

`(V) the existence of reasonable expectations that would be furthered or defeated by the action;

`(VI) the degree of conflict with foreign law or articulated foreign economic policies;

`(VII) the extent to which the enforcement activities of another country with respect to the same persons, including remedies resulting from those activities, may be affected; and

`(VIII) the effectiveness of enforcement by foreign countries as compared to enforcement action by the United States.

The Attorney General shall submit the report under subparagraph (B) referred to no later than the date that is 30 days after the date on which the Attorney General makes the determination required under paragraph (1).

`(4) ACTION IF DETERMINATION NEGATIVE- If the determination under paragraph (1) is negative, the Attorney General shall submit a report to the Committees on Ways and Means and on the Judiciary of the House of Representatives and the Committees on Finance and on the Judiciary of the Senate explaining why the Attorney General reached that determination. The report referred to in the preceding sentence shall be submitted no later than the date that is 30 days after the date on which the Attorney General makes the determination required under paragraph (1).'.

TITLE II--ADVERSE INFERENCES BY TRADE REPRESENTATIVE

SEC. 201. ADVERSE INFERENCE WARRANTED.

(a) IN GENERAL- Chapter 1 of title III of the Trade Act of 1974 is amended by adding at the end the following:

`SEC. 311. ADVERSE INFERENCES.

`(a) DETERMINATIONS UNDER SECTION 304- In making a determination under section 304, if the Trade Representative determines that the foreign government has failed to cooperate by not acting to the best of its ability to--

`(1) comply with a reasonable request for information, or

`(2) require a party within its jurisdiction to comply with a reasonable request for information,

then, in reaching the applicable determination, the Trade Representative may use an inference that is adverse to the interests of the foreign government, if there is a reasonable basis for the inference. Such adverse inference may include reliance on information from other United States Government agencies and departments, and from interested persons.

`(b) DETERMINATIONS UNDER SECTION 304(a)(1)(B)(ii)- In making a determination under section 304(a)(1)(B)(ii), if the Trade Representative determines that a foreign person has failed to cooperate by not acting to the best of its ability to comply with a reasonable request for information, then, in reaching the applicable determination, the Trade Representative may use an inference that is adverse to the interests of the foreign person, if there is a reasonable basis for the inference. Such adverse inference may include reliance on information from other United States Government agencies and departments, and from interested persons.'.

(b) CONFORMING AMENDMENT- The table of contents for the Trade Act of 1974 is amended by adding after the item relating to section 310 the following new item:

`Sec. 311. Adverse inferences.'.

END