Text: H.R.4101 — 111th Congress (2009-2010)All Information (Except Text)

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Introduced in House (11/18/2009)


111th CONGRESS
1st Session
H. R. 4101


To amend the African Growth and Opportunity Act and the Trade Act of 1974 to provide improved duty-free treatment for certain articles from certain least-developed countries, and for other purposes.


IN THE HOUSE OF REPRESENTATIVES

November 18, 2009

Mr. McDermott introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To amend the African Growth and Opportunity Act and the Trade Act of 1974 to provide improved duty-free treatment for certain articles from 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 and table of contents.

(a) Short title.—This Act may be cited as the “New Partnership for Trade Development Act of 2009”.

(b) Table of contents.—The table of contents for this Act is as follows:


Sec. 1. Short title and table of contents.

Sec. 2. Expanded benefits and alternative rule of origin for articles of sub-Saharan African countries.

Sec. 3. Expanded benefits and rule of origin for articles of other least-developed beneficiary countries.

Sec. 4. Review of import-restricted articles under Generalized System of Preferences.

Sec. 5. Factors affecting country designation under Generalized System of Preferences.

Sec. 6. Rule of origin under Generalized System of Preferences.

Sec. 7. Extension of Generalized System of Preferences.

Sec. 8. Office of Trade and Competitiveness for Least Developed and African Countries.

SEC. 2. Expanded benefits and alternative rule of origin for articles of sub-Saharan African countries.

(a) In general.—The African Growth and Opportunity Act (19 U.S.C. 3701 et seq.) is amended by inserting after section 112 the following new section:

“SEC. 112A. Expanded benefits and alternative rule of origin for articles of sub-Saharan African countries.

“(a) Duty-Free treatment.—The President shall, subject to section 503(b) of the Trade Act of 1974 (19 U.S.C. 2463(b)), provide duty-free treatment in accordance with this section for all articles from qualified beneficiary sub-Saharan African countries designated under subsection (b), and such articles shall not be subject to any quantitative limitation.

“(b) Designated countries.—The President shall designate as a qualified beneficiary sub-Saharan African country for purposes of this section any country that is designated as an eligible sub-Saharan African country under section 104 of this Act.

“(c) Rule of origin.—The rule of origin requirements described in section 503(a)(2) of the Trade Act of 1974 (19 U.S.C. 2463(a)(2)) shall apply with respect to a determination to provide duty-free treatment under this section to any article from a qualified beneficiary sub-Saharan African country designated under subsection (b) to the same extent and in the same manner as the rule of origin requirements described in such section 503(a)(2) apply with respect to a determination to provide duty-free treatment under title V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.) to any article from a beneficiary developing country.

“(d) Termination.—

“(1) IN GENERAL.—The preferential treatment under this section shall terminate—

“(A) at the close of December 31, 2015; or

“(B) except as provided in paragraph (2), if the President makes a determination and certification to Congress that there is a successful conclusion to the World Trade Organization’s Doha Development Agenda Round of Negotiations on or before the date specified in subparagraph (A), at the close of December 31, 2019.

“(2) EXCEPTION.—The preferential treatment under this section shall apply with respect to all articles from a qualified beneficiary sub-Saharan African country designated under subsection (b) after December 31, 2019, as follows:

“(A) For the 5-year period beginning on January 1, 2020, such country is determined by the Economic and Social Council of the United Nations to be ‘Least Developed’, as of March 31, 2019.

“(B) For each successive 5-year period thereafter, such country is determined by the Economic and Social Council of the United Nations to be ‘Least Developed’, as of March 31 of the last year of the preceding 5-year period.”.

(b) Lesser developed countries.—Section 112(c)(1) of the African Growth and Opportunity Act (19 U.S.C. 3721(c)(1)) is amended—

(1) in the heading, by striking “September 30, 2012” and inserting “September 30, 2015”;

(2) in subparagraph (A), by striking “September 30, 2012” and inserting “September 30, 2015”; and

(3) in subparagraph (B)(ii), by striking “September 30, 2012” and inserting “September 30, 2015”.

(c) Effective date; transition rule.—

(1) EFFECTIVE DATE.—The amendments made by subsection (a) and (b) take effect on the date of the enactment of this Act.

(2) TRANSITION RULE.—During the period beginning on the date of the enactment of this Act and ending at the close of September 30, 2015, any article to which section 112A of the African Growth and Opportunity Act (as added by subsection (a) of this section) applies may be entered, at the option of the importer, pursuant to—

(A) section 112A of the African Growth and Opportunity Act; or

(B) section 503 or 506A of the Trade Act of 1974 or section 112 of the African Growth and Opportunity Act, as the case may be.

(d) Repeal.—Effective October 1, 2015, section 112 of the African Growth and Opportunity Act (19 U.S.C. 3721) is repealed.

(e) Clerical amendments.—

(1) IN GENERAL.—The table of contents for the Trade and Development Act of 2000 is amended by inserting after the item relating to section 112 the following:


“112A. Expanded benefits and alternative rule of origin for articles of sub-Saharan African countries.”.

(2) REPEALS.—Effective October 1, 2015, the item relating to section 112 of the African Growth and Opportunity Act (19 U.S.C. 3721) in the table of contents for that Act is repealed.

SEC. 3. Expanded benefits and rule of origin for articles of other least-developed beneficiary countries.

(a) In general.—Title V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.) is amended by inserting after section 506B the following new section:

“SEC. 506C. Expanded benefits and rule of origin for articles of other least-developed beneficiary countries.

“(a) Duty-Free treatment.—The President shall, subject to section 503(b), provide duty-free treatment in accordance with this section for all articles from qualified least-developed beneficiary countries designated under subsection (b), and such articles shall not be subject to any quantitative limitation.

“(b) Designated countries.—The President shall designate as a qualified beneficiary country for purposes of this section any country that meets the following requirements:

“(1) For the period beginning on the date of the enactment of this section and ending at the close of December 31, 2014, the country is determined by the Economic and Social Council of the United Nations to be ‘Least Developed’, as of March 31, 2009. For the period beginning on January 1, 2015, and ending at the close of December 31, 2019, the country is determined by the Economic and Social Council of the United Nations to be ‘Least Developed’, as of March 31, 2014.

“(2) The country is not eligible for designation as an eligible sub-Saharan African country under section 104 of the African Growth and Opportunity Act because the country is not listed under section 107 of that Act, but otherwise meets the requirements of such section 104.

“(3) The country otherwise meets the eligibility criteria set forth in section 502, subject to the authority granted to the President under subsections (a), (d), and (e) of such section.

“(c) Rule of origin.—The rule of origin requirements described in section 503(a)(2) shall apply with respect to a determination to provide duty-free treatment under this section to any article from a qualified least-developed beneficiary country designated under subsection (b) to the same extent and in the same manner as the rule of origin requirements described in such section 503(a)(2) apply with respect to a determination to provide duty-free treatment under this title to any article from a beneficiary developing country.

“(d) Adjustment rule for duty-Free treatment for articles of significant apparel suppliers.—

“(1) IN GENERAL.—In each applicable 1-year period, in the case of an article described in paragraph (2) that is the growth, product, or manufacture of a qualified least-developed beneficiary country that is a significant apparel supplier, the preferential treatment under subsection (a) shall be limited to 50 percent of the aggregate square meter equivalent of the combined product categories of such products that entered from that country in calendar year 2007.

“(2) ARTICLES.—The articles referred to in paragraph (1) are the following:

“(A) Men’s and boys’ trousers, breeches, and shorts made with cotton or manmade fibers (textile and apparel category numbers 347 and 647).

“(B) Women’s and girls’ trousers, slacks, breeches, and shorts made with cotton or man-made fibers (textile and apparel category numbers 348 and 648).

“(C) Men’s and boys’ knit shirts made from cotton or man-made fibers (textile and apparel category numbers 338 and 638).

“(D) Women’s and girls’ knit shirts and blouses made from cotton or man-made fibers (textile and apparel category numbers 339 and 639).

“(E) Men’s and boys’ shirts, not knit, made from cotton or man-made fibers (textile and apparel category numbers 340 and 640).

“(F) Women’s and girls’ shirts and blouses, non-knit, made from cotton or man-made fibers (textile and apparel category numbers 341 and 641).

“(G) Men’s and boys’ coats made from cotton or man-made fibers (textile and apparel category numbers 333, 334, 633, 634, and 643).

“(H) Women’s and girls’ coats made from cotton or man-made fibers (textile and apparel category numbers 335, 635, and 644).

“(3) ALTERNATIVE ADJUSTMENT RULE FOR SIGNIFICANT APPAREL SUPPLIERS.—

“(A) IN GENERAL.—If a qualified least-developed beneficiary country that is a significant apparel supplier qualifies under subparagraph (B) for the integration incentive for a fiscal year after fiscal year 2010, then the quantitative limitation under paragraph (1) for that calendar year shall be increased by 10 percentage points over the quantitative limitation that applied to that country in the preceding fiscal year.

“(B) INTEGRATION INCENTIVE.—A significant apparel supplier qualifies for the integration incentive if not less than 50 percent of the aggregate square meter equivalents of the articles listed in paragraph (2)(A) that entered from that country in the preceding fiscal year are composed of yarns or fabrics or components made of yarns or fabrics that originate in beneficiary developing countries under this title or are in countries that are party to a free trade agreement with the United States.

“(C) REPORT.—The International Trade Commission shall submit to Congress annually by December 31 of each year a report on the aggregate textile and apparel imports of each qualified least-developed beneficiary country that is a significant apparel supplier from each country that is ‘Least Developed’ (as determined by the Economic and Social Council of the United Nations) and publish such report in the Federal Register.

“(4) DEFINITIONS.—In this subsection:

“(A) APPLICABLE 1-YEAR PERIOD.—The term ‘applicable 1-year period’ means the 1-year period beginning January 1, 2010, and each 1-year period thereafter until December 31, 2019.

“(B) SIGNIFICANT APPAREL SUPPLIER.—The term ‘significant apparel supplier’ means a qualified least-developed beneficiary country from which total apparel imports in a calendar year exceed 2 percent of the aggregate square meter equivalents of all apparel imports in such year.

“(C) TEXTILE AND APPAREL CATEGORY NUMBER.—The term ‘textile and apparel category number’ means the number assigned under the U.S. Textile and Apparel Category System of the Office of Textiles and Apparel of the Department of Commerce, as listed in the Harmonized Tariff Schedule of the United States under the applicable heading or subheading (as in effect on September 1, 2007).

“(5) TERMINATION.—The adjustment rule provisions of this subsection shall terminate—

“(A) at the close of December 31, 2015; or

“(B) if the President makes a determination and certification to Congress in accordance with subsection (e)(1)(B), at the close of December 31, 2019.

“(e) Termination.—

“(1) IN GENERAL.—The preferential treatment under this section shall terminate—

“(A) at the close of December 31, 2015; or

“(B) except as provided in paragraph (2), if the President makes a determination and certification to Congress that there is a successful conclusion to the World Trade Organization’s Doha Development Agenda Round of Negotiations on or before the date specified in subparagraph (A), at the close of December 31, 2019.

“(2) EXCEPTION.—The preferential treatment under this section shall apply with respect to all articles from a qualified least-developed beneficiary country designated under subsection (b) after December 31, 2019, as follows:

“(A) For the 5-year period beginning on January 1, 2020, such country is determined by the Economic and Social Council of the United Nations to be ‘Least Developed’, as of March 31, 2019.

“(B) For each successive 5-year period thereafter, such country is determined by the Economic and Social Council of the United Nations to be ‘Least Developed’, as of March 31 of the last year of the preceding 5-year period.”.

(b) Clerical amendment.—The table of contents for the Trade Act of 1974 is amended by inserting after the item relating to section 506B the following:


“506C. Expanded benefits and rule of origin for articles of other least-developed beneficiary countries.”.

SEC. 4. Review of import-restricted articles under Generalized System of Preferences.

(a) Trade and Development Review Panel.—

(1) IN GENERAL.—The President shall establish a Trade and Development Review Panel (in this section referred to as the “Panel”).

(2) MEMBERSHIP.—The Panel shall be comprised of not more than ten members, including the heads of the United States Agency for International Development, the Department of State, the United States Trade Representative, the International Trade Commission, and such other individuals selected pursuant to paragraph (3).

(3) OTHER MEMBERS.—The President shall select members of the Panel (other than the heads of the agencies referred to in paragraph (2)), from among individuals of the general public with substantive expertise in the matters to be carried out by the Panel, after consultation with the Chairman and Ranking Member of the Committees on Ways and Means and Foreign Affairs of the House of Representatives and the Committees on Finance and Foreign Relations of the Senate.

(4) CHAIRPERSONS.—The Panel shall be co-chaired by the United States Trade Representative and the Administrator of the United States Agency for International Development.

(5) DUTIES.—

(A) IN GENERAL.—The Panel shall carry out the duties described in subparagraph (C) of section 503(d)(1) of the Trade Act of 1974 (19 U.S.C. 2463(d)(1)), as amended by subsection (b)(1) of this section.

(B) METHODOLOGY.—The Panel shall employ procedures that provide a maximum amount of transparency into the decisionmaking process of the Panel, and to the extent practicable establish quantitative benchmarks that are used for decisionmaking purposes.

(6) TERMS.—Members shall serve five-year terms and may be reappointed.

(7) COOPERATION.—The Panel, at its request, is authorized to request and obtain information and analysis from any Federal department or agency.

(b) Recommendations to the President.—Section 503(d) of the Trade Act of 1974 (19 U.S.C. 2463(d)) is amended—

(1) in paragraph (1)—

(A) in subparagraph (B), by striking “and” at the end;

(B) by redesignating subparagraph (C) as subparagraph (E);

(C) by inserting after subparagraph (B) the following new subparagraphs:

“(C) receives the advice of the Trade and Development Review Panel established in accordance with section 4(a) of the New Partnership for Trade Development Act on whether denying such waiver would improve the development, with an emphasis on job creation, in beneficiary developing countries with lower indicators of development, as determined by the President,

“(D) determines, based on the advice described in subparagraph (C), that denying such waiver is in the national economic interest of the United States or in the economic interest of such other beneficiary developing countries, and”; and

(D) in subparagraph (E), as redesignated pursuant to subparagraph (B) of this paragraph, by striking “subparagraph (B)” and inserting “subparagraphs (B) and (D)”;

(2) by striking paragraph (4); and

(3) by redesignating paragraph (5) as paragraph (4).

(c) Designation of articles as eligible for preferential treatment.—Section 503(b) of the Trade Act of 1974 (19 U.S.C. 2463(b)) is amended—

(1) in paragraph (1), by striking “The President” and inserting “Except as provided in paragraph (5), the President”;

(2) in paragraph (3), by striking “No quantity” and inserting “Except as provided in paragraph (5), no quantity”; and

(3) by adding at the end the following new paragraph:

“(5) DESIGNATION OF ARTICLES AS ELIGIBLE FOR PREFERENTIAL TREATMENT.—

“(A) IN GENERAL.—The President may designate an article described in paragraph (1) or (3) as an eligible article under subsection (a) if the article meets the requirements of subparagraph (B).

“(B) REQUIREMENTS.—An article meets the requirements of this subparagraph if the Secretary of Commerce and the International Trade Commission determine, not later than three years after the date of the enactment of this paragraph, that—

“(i) the application of duty-free treatment under this title to the article would not cause or threaten to cause material harm to a United States producer of the same or a like article or to a United States supplier of inputs or components to the same or a like article; and

“(ii) not applying such duty-free treatment to the article would cause or threaten to cause material harm to producers of the article in any of the countries described in clauses (i) through (iv) of subparagraph (A).”.

SEC. 5. Factors affecting country designation under Generalized System of Preferences.

(a) In general.—Section 502(c) of the Trade Act of 1974 (19 U.S.C. 2462(c)) is amended—

(1) in paragraph (6)(B), by striking “and” at the end;

(2) in paragraph (7), by striking the period at the end and inserting “; and”; and

(3) by adding at the end the following new paragraph:

“(8) with respect to a country that is designated as ‘Upper Middle-Income’ by the International Bank for Reconstruction and Development and the International Development Association or that has a gross national income of at least $1,000,000,000,000, the extent to which such country provides meaningful preferential market access to articles from countries that are ‘Least Developed’ (as determined by the Economic and Social Council of the United Nations) or are designated as an eligible sub-Saharan African country under section 104 of the African Growth and Opportunity Act.”.

(b) Benchmarks and public transparency.—In making a determination of whether or not to designate a country as a beneficiary developing country under section 502 of the Trade Act of 1974, or as an eligible sub-Saharan African country under section 104 of the African Growth and Opportunity Act, the President shall establish and publish in the Federal Register clear and consistent benchmarks that will be used to determine the basis of eligibility for a country at issue, as well as a timeline for regular reviews. The President shall also implement procedures to ensure that the analysis and decisionmaking behind any such determination is transparent to the public.

(c) Effective date.—The amendments made by subsection (a) shall apply with respect to the designation of a country as a “beneficiary developing country” under title V of the Trade Act of 1974 on or after the date of the enactment of this Act.

SEC. 6. Rule of origin under Generalized System of Preferences.

(a) In general.—Paragraph (2) of section 503(a) of the Trade Act of 1974 (19 U.S.C. 2463(a) is amended to read as follows:

“(2) RULE OF ORIGIN.—

“(A) IN GENERAL.—The duty-free treatment provided under this title shall apply to any article that is the growth, product, or manufacture of a beneficiary developing country if—

“(i) the article is imported directly from such country into the customs territory of the United States; and

“(ii) the sum of—

“(I) the cost or value of the materials produced in 1 or more beneficiary developing countries, plus

“(II) the direct costs of processing operations performed in 1 or more beneficiary developing countries,

is not less than 35 percent of the appraised value of the article at the time it is entered.

“(B) DETERMINATION OF PERCENTAGE.—For purposes of determining the percentage referred to in subparagraph (A)(ii)—

“(i) with respect to a textile or apparel article, the cost or value of materials produced in a beneficiary developing country includes the full value of any material, regardless of the origin of the material, if the material is both cut (or knit to shape) and sewn or otherwise assembled into such article in one or more beneficiary developing countries; and

“(ii) the term ‘beneficiary developing country’ includes the Commonwealth of Puerto Rico and the United States Virgin Islands. If the cost or value of materials produced in the customs territory of the United States (other than the Commonwealth of Puerto Rico) is included with respect to an article to which this paragraph applies, 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)(ii).

“(C) EXCLUSIONS.—An article shall not be treated as the growth, product, or manufacture of a beneficiary developing country by virtue of having merely undergone—

“(i) simple combining or packaging operations; or

“(ii) mere dilution with water or mere dilution with another substance that does not materially alter the characteristics of the article.

“(D) SETS.—Notwithstanding the other provisions of this paragraph, textile or apparel articles classifiable under General Rule of Interpretation 3 of the Harmonized Schedule of the United States as articles put up in sets for retail sale shall not be eligible for duty-free treatment under this title unless each of the articles in the set is an eligible article for purposes of this title or the total value of the ineligible articles in the set does not exceed ten percent of the appraised value of the set.

“(E) DEFINITIONS.—In this subsection:

“(i) DIRECT COSTS OF PROCESSING OPERATIONS.—The term ‘direct costs of processing operations’—

“(I) includes—

“(aa) all actual labor costs involved in the growth, production, manufacture, or assembly of the article concerned, including fringe benefits, on-the-job training, and the cost of engineering, supervisory, quality control, and similar personnel; and

“(bb) dies, molds, tooling, and depreciation on machinery and equipment that are allocable to the article; and

“(II) does not include costs that are not directly attributable to the article concerned or are not costs of manufacturing the article, such as—

“(aa) profit; and

“(bb) general expenses of doing business that are either not allocable to the article or are not related to the growth, production, manufacture, or assembly of the article, such as administrative salaries, casualty and liability insurance, advertising, interest, and salaries, commissions, or expenses of sales personnel.

“(ii) TEXTILE OR APPAREL ARTICLE.—The term ‘textile or apparel article’ means any article classifiable under any of the following provisions of the Harmonized Tariff Schedule of the United States:

“(I) Chapters 50 through 63.

“(II) Headings 6501, 6502, 6503, or 6504.

“(III) Subheadings 6406.99 or 6505.90.”.

(b) Effective date.—The amendment made by subsection (a) shall apply with respect to the entry, or withdrawal from warehouse for consumption, of eligible articles from a beneficiary developing country on or after the date of the enactment of this Act.

SEC. 7. Extension of Generalized System of Preferences.

Section 505 of the Trade Act of 1974 (19 U.S.C. 2465) is amended by striking “December 31, 2009” and inserting “December 31, 2019”.

SEC. 8. Office of Trade and Competitiveness for Least Developed and African Countries.

(a) Establishment of office.—

(1) IN GENERAL.—There shall be established within the Executive Office of the President an Office of Trade and Competitiveness for Least Developed and African Countries (hereafter referred to as the “Office”) that will be responsible for planning, developing, and coordinating trade capacity building and private sector competitiveness programs for Least Developed and African countries.

(2) LEAST DEVELOPED AND AFRICAN COUNTRIES DEFINED.—For purposes of this section, the term “Least Developed and African countries” means a qualified beneficiary sub-Saharan African country designated under section 112A of the African Growth and Opportunity Act (as added by section 2 of this Act) or a qualified least-developed beneficiary country designated under section 506C of the Trade Act of 1974 (as added by section 3 of this Act).

(b) Director and staff.—The head of the Office shall be a Director of Trade and Competitiveness for Least Developed and African Countries who shall report to the President. The Director may hire staff with expertise on international development, foreign aid, and international trade. The President shall appoint the Director to be a member of the National Security Council.

(c) Duties.—

(1) IN GENERAL.—Not later than June 30, 2010, and not less often than once every three years thereafter, the Director, in consultation with the heads of appropriate Federal departments and agencies and nongovernmental organizations, donor governments, and private enterprise located within each Least Developed and African country, shall submit to Congress a study on the private sector competitiveness of Least Developed and African countries.

(2) MATTERS TO BE INCLUDED.—The study required under paragraph (1) shall include a detailed description for each Least Developed and African country that identifies the barriers that exist to—

(A) economic growth and poverty reduction, in part through utilization of the tariff preferences;

(B) women fully participating in the formal economy of each such country; and

(C) small farmers, food producers, and small and medium enterprises to expanding their businesses in each such country, in part for the purpose of increasing exports.

(d) Coordinating committee.—The President shall establish a Trade Capacity Coordinating Committee for Least Developed and African Countries (referred to in this section as the “Committee”) for the purpose of coordinating implementation of trade capacity building programs that are carried out by Federal departments and agencies in Least Developed and African countries. The committee shall be composed of the following individuals or their designees:

(1) The Director, who shall serve as the chairperson of the Committee.

(2) The United States Trade Representative.

(3) The Secretaries of Agriculture, Commerce, Treasury, State, and Defense.

(4) The head of any other Federal department or agency that the President determines is appropriate.

(e) Mission.—

(1) IDENTIFICATION AND ASSISTANCE.—The President, acting through the Director and the Committee, shall provide assistance to the Least Developed and African countries to dismantle the barriers identified in the study required under subsection (c).

(2) PURPOSES.—Assistance provided pursuant to paragraph (1) shall assist in the following:

(A) Developing the necessary infrastructure needed to foster commerce, with a focus on regional integration and means to expand value-added production.

(B) Improving labor conditions and enhancing environmental sustainability.

(C) Addressing market barriers such as trade facilitation and storage of goods, and complying with international standards such as sanitary and phytosanitary principles.

(D) Assisting small and medium enterprises to increase the capability and capacity of such enterprises.

(E) Enhancing economic opportunity for individuals facing the greatest economic challenges, such as individuals living in poverty, especially women and small farmers.

(F) Aligning United States activities to synchronize with the activities of nongovernmental organizations, donor governments, and the private enterprise located within the country at issue.

(3) INTERNATIONAL CONSULTATION AND COOPERATION.—The President, acting through the Director and the Committee, shall consult with African and American business persons to fully understand the barriers and opportunities to expanded trade and investment between the United States and Least Developed and African countries. In doing so, the Director should consider establishing a private sector advisory panel that consists of small, medium, and large African and American businesses.