Text: H.R.5578 — 102nd Congress (1991-1992)All Information (Except Text)

There is one version of the bill.

Text available as:

Shown Here:
Introduced in House

 
 
HR 5578 IH
102d CONGRESS
2d Session
 H. R. 5578
To assure fair international trade in motor vehicles.
IN THE HOUSE OF REPRESENTATIVES
July 8, 1992
Mr. GUARINI (for himself, Mr. LAFALCE, and Ms. KAPTUR) introduced the
following bill; which was referred to the Committee on Ways and Means
A BILL
To assure fair international trade in motor vehicles.
  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 `Automotive Trade Equity Act of 1992'.
SEC. 2. FINDINGS AND PURPOSE.
  (a) FINDINGS- The Congress finds that--
  (1) Japan's share of the European Community market for motor vehicles
  currently is 10.1 percent and that Japan and the European Community have
  negotiated an understanding which limits Japanese producers' penetration
  of the European Community motor vehicle market to a maximum of 16 percent
  by 1999;
  (2) the understanding referred to in paragraph (1) also includes an agreement
  that Japanese motor vehicle manufacturers located in the European Community
  will increase their use of motor vehicles parts produced in the Community
  from 60 to 80 percent;
  (3) Japan's share of the United States motor vehicle market is currently
  30 percent, and no limits currently apply to growth in that market share;
  (4) Japanese motor vehicle manufacturers located in the United States buy
  only 15 percent of their parts from non-Japanese affiliated companies; and
  (5) the Japan-European Community understanding has established a world
  standard for determining Japan's fair market share in a country's motor
  vehicle market and use of domestically produced parts.
  (b) PURPOSE- The purpose of this Act is to provide Japanese motor vehicle
  manufacturers access to the United States market on a basis that is
  equivalent to the degree of access granted to such manufacturers in the
  European Community market under the European Community-Japan understanding
  on motor vehicles.
SEC. 3. DEFINITIONS.
  For purposes of this Act:
  (1) MOTOR VEHICLES AND MOTOR VEHICLE PARTS-
  (A) The term `motor vehicle' means any article of a kind described in
  heading 8703 or 8704 of the Harmonized Tariff Schedule of the United States.
  (B) The term `motor vehicle parts' means articles of a kind described in
  the following provisions of the Harmonized Tariff Schedule of the United
  States if suitable for use in the manufacture or repair of motor vehicles:
  (i) Subheadings 8407.31.00 through 8407.34.20 (relating to spark-ignition
  reciprocating or rotary internal combustion piston engines).
  (ii) Subheading 8408.20 (relating to the compression-ignition internal
  combustion engines).
  (iii) Subheading 8409 (relating to parts suitable for use solely or
  principally with engines described in subparagraphs (A) and (B)).
  (iv) Subheading 8483 (relating to transmission shafts and related parts).
  (v) Subheadings 8706.00.10 and 8706.00.15 (relating to chassis fitted
  with engines).
  (vi) Heading 8707 (relating to motor vehicle bodies).
  (vii) Heading 8708 (relating to bumpers, brakes and servo brakes, gear boxes,
  drive axles, non driving axles, road wheels, suspension shock absorbers,
  radiators, mufflers and exhaust pipes, clutches, steering wheels, steering
  columns, steering boxes, and other parts and accessories of motor vehicles).
The Secretary shall by regulation include as motor vehicle parts such other
articles (described by classification under such Harmonized Tariff Schedule)
that the Secretary considers appropriate for the purposes of this Act.
  (C)(i) A motor vehicle shall be treated as being a foreign motor vehicle
  for purposes of this Act if--
  (I) the motor vehicle is a product of Japan;
  (II) the motor vehicle is treated as a product of Japan under clause (ii); or
  (III) the motor vehicle is produced by a transplanted vehicle manufacturer.
  (ii) The Secretary of the Treasury shall also treat as motor vehicles that
  are products of Japan those motor vehicles manufactured in a foreign country
  (other than Japan) with respect to which the Secretary finds that--
  (I) the vehicles were manufactured in such foreign country by a related
  source, and
  (II) motor vehicle parts that were produced by, or purchased or otherwise
  obtained (directly or indirectly) from, related sources constitute 50
  percent or more of the export value of the vehicles.
  (2) VEHICLE AND PARTS MANUFACTURERS-
  (A) DOMESTIC PARTS MANUFACTURER- The term `domestic parts manufacturer'
  means a manufacturer of motor vehicle parts that--
  (i) has one or more motor vehicle parts manufacturing facilities located
  within the United States; and
  (ii) either--
  (I) is not a related source,
  (II) is not affiliated with a related source, or
  (III) is affiliated with a related source, but with respect to its production
  of motor vehicle parts in the facilities referred to in clause (i) during
  the most recent full calendar year, utilized materials and components
  produced by, or purchased or otherwise obtained (directly or indirectly)
  from, related sources to an extent not exceeding 25 percent of the total
  value of such production.
  (B) TRANSPLANTED VEHICLE MANUFACTURER- The term `transplanted vehicle
  manufacturer' means a manufacturer of motor vehicles that is a related
  source and--
  (i) has one or more motor vehicle manufacturing facilities located within
  the United States that produce motor vehicles for interstate sale or export,
  or both; and
  (ii) with respect to its production of motor vehicles in the facilities
  referred to in clause (i) during the calendar year immediately preceding
  the transition period, either--
  (I) did not utilize motor vehicle parts produced by domestic parts
  manufacturers; or
  (II) utilized motor vehicle parts produced by domestic parts manufacturers
  that constituted less than 75 percent of the value of all motor vehicle
  parts used in such production.
  (C) TREATMENT OF CANADIAN MOTOR VEHICLE PARTS- The Secretary may, in applying
  clause (ii) of subparagraph (B), treat motor vehicle parts that are articles
  of Canadian origin under the United States-Canada Free-Trade Agreement and
  are used in the motor vehicle production referred to in each such clause
  (ii) as being motor vehicle parts produced by domestic parts manufacturers,
  if such treatment is consistent with the purposes of this Act.
  (3) RELATED SOURCES, OWNERSHIP, AND AFFILIATION-
  (A) RELATED SOURCE- The term `related source' means--
  (i) a natural person who is a citizen of Japan; and
  (ii) a corporation or other legal entity, wherever located, if owned or
  controlled by--
  (I) natural persons who are citizens of Japan, or
  (II) another corporation or other legal entity that is owned or controlled
  by natural persons who are citizens of Japan.
  (B) OWN OR CONTROL- For purposes of this section, the term `own or control'
  means--
  (i) in the case of a corporation, the holding of at least 50 percent
  (by vote or value) of the capital structure of the corporation; and
  (ii) in the case of any other kind of legal entity, the holding of interests
  representing at least 50 percent of the capital structure of the entity.
  (C) AFFILIATED- For purposes of this section, a domestic parts manufacturer
  shall be considered to be  affiliated with a related source if--
  (i) in the case of a domestic parts manufacturer that is a corporation,
  a related source holds at least 2.5 percent but less than 50 percent
  (by vote or value) of the capital structure of the corporation; and
  (ii) in the case of a domestic parts manufacturer that is any other kind
  of legal entity, a related source holds interests representing at least 2.5
  percent, but less than 50 percent, of the capital structure of the entity.
  (4) DOMESTIC CONSUMPTION OF MOTOR VEHICLES- The term `domestic consumption
  of motor vehicles', with respect to a calendar year, means--
  (A) the sum of--
  (i) the aggregate quantity of motor vehicles manufactured within the
  United States during the year (including those manufactured by transplanted
  vehicle manufacturers), and
  (ii) the aggregate quantity of motor vehicles entered during the year;
  reduced by
  (B) the aggregate quantity of motor vehicles manufactured within the United
  States during the year (including those manufactured by transplanted vehicle
  manufacturers) that are exported from the United States during the year.
  (5) ENTERED- The term `entered' means entered, or withdrawn from warehouse
  for consumption, in the customs territory of the United States.
  (6) SECRETARY- The term `Secretary' means the Secretary of the Treasury.
  (7) TRANSITION PERIOD- The term `transition period' means the period
  beginning on January 1, 1993, and ending at the close of December 31, 1999.
  (8) VALUE- The term `value' when applied to--
  (A) materials and components used in production of motor vehicles parts; or
  (B) motor vehicle parts used in the production of motor vehicles;
refers to the cost of such materials, components, or parts to the manufacturer
of such parts or vehicles as determined for purposes of applying the Federal
income tax laws (including, in the case of purchases of materials, components,
and parts involving related sources, entities owned or controlled by related
sources, or entities affiliated with related sources, determinations based
on the application of the transfer price rules).
SEC. 4. CALCULATIONS REGARDING DOMESTIC CONSUMPTION OF MOTOR VEHICLES AND
FOREIGN MOTOR VEHICLE MARKET PENETRATION.
  (a) ESTIMATIONS OF DOMESTIC CONSUMPTION-
  (1) PRELIMINARY ESTIMATE- Not later than the 30th day before the beginning
  of each calendar year in the transition period, the Secretary shall,
  on the basis of the relevant available information, make a preliminary
  estimate of the domestic consumption of motor vehicles for that year.
  (2) FINAL ESTIMATE- Not later than the 30th day of July of each calendar year
  in the transition period, the Secretary shall, after taking into account the
  latest information available regarding the actual domestic consumption of
  motor vehicles during the year and other relevant available information, make
  a final estimate of the domestic consumption of motor vehicles for that year.
  (b) COMPUTATION OF ALLOWABLE MARKET PENETRATION AMOUNT-
  (1) IN GENERAL- At the respective times that a preliminary estimate and
  a final estimate of the domestic consumption of motor vehicles are made
  under subsection (a) for any calendar year in the transition period, the
  Secretary shall also compute the allowable market penetration amount for
  foreign motor vehicles during that year. The allowable market penetration
  amount for foreign motor vehicles is the product of--
  (A) the preliminary estimate or the final estimate, as the case may be,
  of the domestic consumption of motor vehicles for the year; multiplied by
  (B) the market penetration percentage, listed in paragraph (2), for the year.
  (2) MARKET PENETRATION PERCENTAGE- The market penetration percentage for
  each calendar year in the transition period is as follows:
Calendar year
Market Penetration Percentage
1993
30%
1994
28%
1995
25%
1996
23%
1997
21%
1998
18%
1999
16%
  (c) CALCULATION OF ACTUAL DOMESTIC CONSUMPTION AND MARKET PENETRATION-
  As soon as practicable after the last day in each calendar year in the
  transition period, but not later than the 30th day after such last day,
  the Secretary shall on the basis of the relevant available information
  calculate--
  (1) the actual domestic consumption of motor vehicles during the year; and
  (2) the actual market penetration during the year of foreign motor vehicles,
  which is the sum of--
  (A) the aggregate number of foreign motor vehicles provided for in section
  3(1)(C)(i)(I) and (II) that were entered during the year; and
  (B) the aggregate number of motor vehicles provided for in section
  3(1)(C)(i)(III) that were manufactured during the year, but excluding the
  number of such vehicles that were exported from the United States during
  the year.
SEC. 5. IMPORT LIMITATIONS ON CERTAIN FOREIGN MOTOR VEHICLES.
  (a) IMPORT LIMITATION- The aggregate number of foreign motor vehicles
  provided for in section 3(1)(C)(i)(I) and (II) that may be entered during
  each calendar year in the transition period may not exceed 1,900,000 or
  the number that may result from an adjustment required under subsection (b).
  (b) ADJUSTMENT OF IMPORT LIMITATION AMOUNT- If with respect to any calendar
  year in the transition period the Secretary finds that the sum of--
  (1) the aggregate number of foreign motor vehicles provided for in section
  3(1)(C)(i)(I) and (II) that are entered during the year; plus
  (2) the aggregate number of foreign motor vehicles calculated under section
  4(c)(2)(B) with respect to the year;
exceeds the allowable market penetration amount computed under section 4(b)
for the year on the basis of the final estimate made under section 4(a)(2) for
the year, then the aggregate number for foreign motor vehicles provided for
in section 3(1)(C)(i)(I) and (II) that may be entered during the immediately
succeeding calendar year may not exceed the number obtained by subtracting
the amount of such excess from 1,900,000.
SEC. 6. PUBLICATION OF ESTIMATES, COMPUTATIONS, AND CALCULATIONS.
  Not later than the 30th day after the day on which--
  (1) any preliminary or final estimate of domestic consumption of motor
  vehicles is made under section 4(a);
  (2) any computation of allowable market penetration is made under section
  4(b);
  (3) any calculation of actual domestic consumption of motor vehicles or
  actual market penetration of foreign motor vehicles is made under section
  4(c); or
  (4) any import limitation adjustment computed under section 5(b);
the Secretary shall cause the estimation, computation, or calculation to be
published in the Federal Register.