108th CONGRESS
1st Session
S. 1121
To extend certain trade benefits to countries of the greater Middle
East.
IN THE SENATE OF THE UNITED STATES
May 22, 2003
Mr. BAUCUS (for himself and Mr. MCCAIN) introduced the following bill; which
was read twice and referred to the Committee on Finance
A BILL
To extend certain trade benefits to countries of the greater Middle
East.
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 `Middle East Trade and Engagement Act of 2003'.
SEC. 2. FINDINGS.
(1) it is in the mutual interest of the United States and the countries
of the greater Middle East to promote stable and sustainable growth and
development throughout the greater Middle East;
(2) Congress views democratization and economic progress in the countries
of the greater Middle East as important elements of a policy to address
terrorism and endemic instability;
(3) free trade relationships are not a substitute for, but a complement
to, necessary political and economic reforms that lead to political liberalization
and economic freedom;
(4) the countries of the greater Middle East have enormous economic potential
and are of enduring political significance to the United States;
(5) despite their economic potential, the countries of the greater Middle
East are experiencing deepening poverty, slow job creation, and a declining
share of world trade and investment, while at the same time experiencing
population growth rates among the highest in the world;
(6) these economic conditions are in part the result of barriers to trade
and investment, a failure to engage fully in the global trading system,
lack of participation in the World Trade Organization, and, often, a lack
of economic diversification and over-reliance on the energy sector;
(7) offering the countries of the greater Middle East enhanced trade preferences
will encourage higher levels of trade and direct investment and help bring
those countries more fully into the global trading system;
(8) higher levels of trade and investment and greater involvement in the
global trading system can lead to increased economic development, which
can in turn lead to more jobs for people in the countries of the greater
Middle East; and
(9) encouraging the reciprocal reduction of trade and investment barriers
in the greater Middle East will enhance the benefits of trade and investment
for all the countries in the greater Middle East as well as enhance commercial
and political ties between the United States and the greater Middle East.
SEC. 3. STATEMENT OF POLICY.
(1) encouraging increased trade and investment between the United States
and the countries of the greater Middle East and among the countries of
the greater Middle East;
(2) reducing tariff and nontariff barriers and other obstacles to trade
between the United States and the countries of the greater Middle East and
among the countries of the greater Middle East;
(3) strengthening and expanding the private sector and accelerating the
rate of job creation in the countries of the greater Middle East;
(4) focusing on countries committed to the rule of law, economic reform,
political liberalization, respect for human rights, and the eradication
of poverty;
(5) facilitating the development of civil societies and political freedom
in the countries of the greater Middle East;
(6) promoting sustainable development, and protecting and preserving the
environment in a manner consistent with economic development; and
(7) encouraging the countries of the greater Middle East to diversify their
economies, implement domestic economic reforms, open to trade, and adopt
anticorruption measures, including through accession to the Organization
for Economic Cooperation and Development (OECD) Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions.
SEC. 4. DESIGNATION OF ELIGIBLE COUNTRIES.
(a) IN GENERAL- The President is authorized to designate any country listed
in subsection (c) as a beneficiary country if the President determines that
the country--
(1) has established, or is making continual progress toward establishing--
(A) a market-based economy that protects private property rights, incorporates
an open rules-based trading system, and minimizes government interference
in the economy through measures such as price controls, subsidies, and
government ownership of economic assets;
(B) the rule of law and the right to due process, a fair trial, and equal
protection under the law;
(C) political pluralism, a climate free of political intimidation and
restrictions on peaceful political activity, and democratic elections
that meet international standards of fairness, transparency, and participation;
(D) the elimination of barriers to United States trade and investment,
including by--
(i) providing national treatment and measures to create an environment
conducive to domestic and foreign investment;
(ii) protecting intellectual property; and
(iii) resolving bilateral trade and investment disputes;
(E) economic policies that reduce poverty, increase the availability of
health care and educational opportunities, expand physical infrastructure,
promote the development of private enterprise, and encourage the formation
of capital markets through micro-credit or other programs;
(F) a system to combat corruption and bribery, such as signing and implementing
the OECD Convention on Combating Bribery of Foreign Public Officials in
International Business Transactions;
(G) protection of internationally recognized worker rights, including
the right of association, the right to organize and bargain collectively,
a prohibition on the use of any form of forced or compulsory labor, a
minimum age for the employment of children, and acceptable conditions
of work; and
(H) policies that provide a high level of environmental protection;
(2) does not engage in activities that undermine United States national
security or foreign policy interests, and supports a peaceful resolution
of the Israeli-Palestinian conflict;
(3) is a signatory of the United Nations Declaration of Human Rights, does
not engage in gross violations of internationally recognized human rights,
and is making continuing and verifiable progress on the protection of internationally
recognized human rights, including freedom of speech and press, freedom
of peaceful assembly and association, and freedom of religion;
(4) is not listed by the United States Department of State as a state sponsor
of terrorism and cooperates fully in international efforts to combat terrorism;
(5) does not participate in the primary, secondary, or tertiary economic
boycott of Israel; and
(6) otherwise meets the eligibility criteria set forth in section 502(b)(2)
of the Trade Act of 1974 (19 U.S.C. 2462(b)(2)), other than section 502(b)(2)(B).
(b) CONTINUING COMPLIANCE- If the President determines that a designated beneficiary
country no longer meets the requirements described in subsection (a), the
President shall terminate the designation of the country made pursuant to
subsection (a) and inform Congress of the President's determination and the
reasons therefor.
(c) COUNTRIES ELIGIBLE FOR DESIGNATION- In designating countries as beneficiary
countries under this Act, the President shall consider only the following
countries of the greater Middle East or their successor political entities:
(17) United Arab Emirates.
(d) THE PALESTINIAN AUTHORITY- The President is also authorized to designate
the Palestinian Authority or its successor political entity as a beneficiary
political entity which, if so designated, shall be accorded benefits under
this Act as if it were a beneficiary country, if the President determines
that the Palestinian Authority--
(1) satisfies the conditions of subsection (a) (1) and (2);
(2) does not participate in acts of terrorism, and takes active measures
to combat terrorism;
(3) cooperates fully in international efforts to combat terrorism;
(4) does not engage in gross violations of internationally recognized human
rights, and is making continuing and verifiable progress on the protection
of internationally recognized human rights, including freedom of speech
and the press, freedom of peaceful assembly and association, and freedom
of religion; and
(5) accepts Israel's right to exist in peace within secure borders.
SEC. 5. DESIGNATION OF ELIGIBLE ARTICLES.
(a) ELIGIBLE ARTICLES- Except as provided in sections 503(b)(2) and (3) of
the Trade Act of 1974 (19 U.S.C. 2463(b)(2) and (3)), the President is authorized
to designate articles as eligible for duty-free treatment from all beneficiary
countries for purposes of this Act by Executive order or Presidential proclamation
after receiving the advice of the International Trade Commission in accordance
with subsection (c).
(1) GENERAL RULE- The duty-free treatment provided under this Act shall
apply to any eligible article which is the growth, product, or manufacture
of 1 or more beneficiary countries if--
(A) that article is imported directly from a beneficiary country into
the customs territory of the United States; and
(i) the cost or value of the materials produced in 1 or more beneficiary
countries, plus
(ii) the direct cost of processing operations performed in such beneficiary
country or countries,
is not less than 35 percent of the appraised value of such article at
the time it is entered.
(2) ADDITIONAL COUNTRIES- For purposes of the rules of origin in paragraph
(1) and the regulations prescribed pursuant to paragraph (4), the term `beneficiary
country' includes Israel and Jordan.
(3) EXCLUSIONS- An article shall not be treated as the growth, product,
or manufacture of a beneficiary country by virtue of having merely undergone--
(A) simple combining or packaging operations; or
(B) mere dilution with water or mere dilution with another substance that
does not materially alter the characteristics of the article.
(4) REGULATIONS- The Secretary of the Treasury, after consulting with the
United States Trade Representative, shall prescribe such regulations as
may be necessary to carry out this subsection, including, but not limited
to, regulations providing that, in order to be eligible for duty-free treatment
under this Act, an article--
(A) must be wholly the growth, product, or manufacture of 1 or more beneficiary
countries, including Israel and Jordan; or
(B) must be a new or different article of commerce which has been grown,
produced, or manufactured in 1 or more beneficiary countries, including
Israel and Jordan.
(c) INTERNATIONAL TRADE COMMISSION ADVICE- Before designating an article as
an eligible article under subsection (a), the President shall publish in the
Federal Register and furnish the International Trade Commission with a list
of articles that may be considered for designation as eligible articles for
purposes of this Act. The President shall comply with the provisions of sections
131, 132, 133, and 134 of the Trade Act of 1974 as if an action under this
Act were an action taken under section 123 of the Trade Act of 1974 to carry
out a trade agreement entered into under section 123.
SEC. 6. UNITED STATES-MIDDLE EAST TRADE AND ECONOMIC COOPERATION FORUM.
(a) DECLARATION OF POLICY- The President shall convene annual high-level meetings
among appropriate officials of the United States Government, officials of
the governments of eligible beneficiary countries, and officials of the Governments
of Israel and Jordan in order to foster close economic ties between the United
States and the countries of the greater Middle East.
(b) ESTABLISHMENT- Not later than 12 months after the date of enactment of
this Act, the President, after consulting with Congress and the governments
concerned, shall establish a United States-Middle East Trade and Economic
Cooperation Forum (in this section referred to as the `Forum').
(c) REQUIREMENTS- In creating the Forum, the President shall meet the following
requirements:
(1) The President shall direct the Secretary of Commerce, the Secretary
of the Treasury, the Secretary of State, and the United States Trade Representative
to host the first annual meeting with their counterparts from the governments
of designated beneficiary countries, and those countries and political entities
listed in section 4 (c) and (d) that the President determines are taking
substantial positive steps toward meeting the eligibility requirements in
section 4. The purpose of the meeting shall be to discuss expanding trade
and investment relations between the United States and the countries of
the greater Middle East and the implementation of this Act including encouraging
joint ventures between small and large businesses. The President shall also
direct the Secretaries and the United States Trade Representative to invite
to the meeting representatives from appropriate organizations and government
officials from countries and political entities in the greater Middle East.
(2)(A) The President, in consultation with Congress, shall encourage United
States nongovernmental organizations to host annual meetings with nongovernmental
organizations from the countries and political entities of the greater Middle
East in conjunction with the annual meetings of the Forum for the purpose
of discussing the issues described in paragraph (1).
(B) The President, in consultation with Congress, shall encourage United
States representatives of the private sector to host annual meetings with
representatives of the private sector from the countries and political entities
of the greater Middle East in conjunction with the annual meetings of the
Forum for the purpose of discussing the issues described in paragraph (1).
(3) The President shall, to the extent practicable, meet with the heads
of governments of designated beneficiary countries, and those countries
and political entities listed in section 4 (c) and (d) that the President
determines are taking substantial positive steps toward meeting the eligibility
requirements in section 4, not less than once every 2 years for the purpose
of discussing the issues described in paragraph (1). The first such meeting
should take
place not later than 12 months after the date of enactment of this Act.
(d) DISSEMINATION OF INFORMATION BY USIS- In order to assist in carrying out
the purposes of the Forum, the United States Information Service shall disseminate
regularly, through multiple media, economic information in support of the
free market economic reforms described in this Act.
SEC. 7. FREE TRADE AGREEMENTS WITH COUNTRIES OR POLITICAL ENTITIES IN THE
GREATER MIDDLE EAST.
(a) DECLARATION OF POLICY- Congress declares that bilateral free trade agreements
should be negotiated, where feasible, with interested countries or political
entities in the greater Middle East, in order to serve as the catalyst for
increasing trade between the United States and the greater Middle East and
increasing private sector investment in the greater Middle East.
(b) ELIGIBILITY- Any country or political entity that desires to negotiate
a bilateral free trade agreement with the United States shall be a member
of the World Trade Organization or be working diligently toward membership
and shall satisfy the criteria in section 4(a) of this Act.
(1) IN GENERAL- The President, taking into account the willingness of the
governments of the beneficiary countries to engage in negotiations to enter
into free trade agreements, shall develop a plan for the purpose of negotiating
and entering into 1 or more trade agreements with interested beneficiary
countries.
(2) ELEMENTS OF PLAN- The plan shall include the following:
(A) The specific objectives of the United States with respect to negotiations
described in paragraph (1) and a suggested timetable for achieving those
objectives.
(B) The benefits to both the United States and the relevant beneficiary
countries with respect to the applicable free trade agreement or agreements.
(C) A mutually agreed-upon timetable for the negotiations.
(D) Subject matter anticipated to be covered by the negotiations and United
States laws, programs, and policies, as well as the laws of participating
eligible countries of the greater Middle East and existing bilateral and
multilateral and economic cooperation and trade agreements, that may be
affected by the agreement or agreements.
(E) Procedures to ensure the following:
(i) Adequate consultation with Congress and the private sector during
the negotiations.
(ii) Consultation with Congress regarding all matters relating to implementation
of the agreement or agreements.
(iii) Approval by Congress of the agreement or agreements.
(iv) Adequate consultations with the relevant governments of the greater
Middle East during the negotiation of the agreement or agreements.
(d) REPORTING REQUIREMENT- Not later than 12 months after the date of enactment
of this Act, the President shall prepare and transmit to Congress a report
containing the plan developed pursuant to subsection (c).
SEC. 8. REPORTING REQUIREMENT.
(a) IN GENERAL- The President shall monitor, review, and prepare a report
annually on the progress of each country and political entity listed in section
4 (c) and (d) in meeting the requirements described in section 4(a) in order
to determine the current or potential eligibility of each country or political
entity to be designated as a beneficiary country under this Act. The report
shall also include a comprehensive discussion of the implementation of this
Act and an analysis of the trade and investment policy of the United States
with respect to the countries and political entities listed in section 4 (c)
and (d). To the extent that any subject matter required by the report is included
in another report submitted by the President, the report required by this
section may reference the other report.
(b) TIME FOR SUBMITTING REPORT- The President shall submit the report described
in subsection (a) to Congress not later than 1 year after the date of enactment
of this Act, and annually thereafter through 2011.
SEC. 9. PRESERVATION OF BENEFITS OF UNITED STATES-ISRAEL AND UNITED STATES-JORDAN
FREE TRADE AGREEMENTS.
Nothing in this Act shall be deemed to nullify or impair any right or benefit
accorded either to Israel or to Jordan under the existing trade agreements
with the United States.
SEC. 10. TERMINATION OF PREFERENTIAL TREATMENT.
No duty-free treatment or other preferential treatment extended to beneficiary
countries under this Act shall remain in effect after December 31, 2011.
END
