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                                                       Calendar No. 295
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-126

======================================================================



 
                 ANDEAN TRADE PREFERENCE EXPANSION ACT

                                _______
                                

               December 14, 2001.--Ordered to be printed

                                _______
                                

   Mr. Baucus, from the Committee on Finance, submitted the following

                              R E P O R T

                        [To accompany H.R. 3009]

    The Committee on Finance, to which was referred the bill 
(H.R. 3009) to extend the Andean Trade Preference Act, to grant 
additional trade benefits under the Act, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill (as amended) do 
pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Andean Trade Preference Expansion 
Act''.

                    TITLE I--ANDEAN TRADE PREFERENCE

SEC. 101. FINDINGS.

  Congress makes the following findings:
          (1) Since the Andean Trade Preference Act was enacted in 
        1991, it has had a positive impact on United States trade with 
        Bolivia, Colombia, Ecuador, and Peru. Two-way trade has 
        doubled, with the United States serving as the leading source 
        of imports and leading export market for each of the Andean 
        beneficiary countries. This has resulted in increased jobs and 
        expanded export opportunities in both the United States and the 
        Andean region.
          (2) The Andean Trade Preference Act has been a key element in 
        the United States counternarcotics strategy in the Andean 
        region, promoting export diversification and broad-based 
        economic development that provides sustainable economic 
        alternatives to drug-crop production, strengthening the 
        legitimate economies of Andean countries and creating viable 
        alternatives to illicit trade in coca.
          (3) Notwithstanding the success of the Andean Trade 
        Preference Act, the Andean region remains threatened by 
        political and economic instability and fragility, vulnerable to 
        the consequences of the drug war and fierce global competition 
        for its legitimate trade.
          (4) The continuing instability in the Andean region poses a 
        threat to the security interests of the United States and the 
        world. This problem has been partially addressed through 
        foreign aid, such as Plan Colombia, enacted by Congress in 
        2000. However, foreign aid alone is not sufficient. Enhancement 
        of legitimate trade with the United States provides an 
        alternative means for reviving and stabilizing the economies in 
        the Andean region.
          (5) The Andean Trade Preference Act constitutes a tangible 
        commitment by the United States to the promotion of prosperity, 
        stability, and democracy in the beneficiary countries.
          (6) Renewal and enhancement of the Andean Trade Preference 
        Act will bolster the confidence of domestic private enterprise 
        and foreign investors in the economic prospects of the region, 
        ensuring that legitimate private enterprise can be the engine 
        of economic development and political stability in the region.
          (7) Each of the Andean beneficiary countries is committed to 
        conclude negotiation of a Free Trade Area of the Americas by 
        the year 2005, as a means of enhancing the economic security of 
        the region.
          (8) Temporarily enhancing trade benefits for Andean 
        beneficiaries countries will promote the growth of free 
        enterprise and economic opportunity in these countries and 
        serve the security interests of the United States, the region, 
        and the world.

SEC. 102. TEMPORARY PROVISIONS.

  (a) In General.--Section 204(b) of the Andean Trade Preference Act 
(19 U.S.C. 3203(b)) is amended to read as follows:
  (b) Import-Sensitive Articles.--
          (1) In general.--Subject to paragraphs (2) through (5), the 
        duty-free treatment provided under this title does not apply 
        to--
                  (A) textile and apparel articles which were not 
                eligible articles for purposes of this title on January 
                1, 1994, as this title was in effect on that date;
                  (B) footwear not designated at the time of the 
                effective date of this title as eligible articles for 
                the purpose of the generalized system of preferences 
                under title V of the Trade Act of 1974;
                  (C) tuna, prepared or preserved in any manner, in 
                airtight containers;
                  (D) petroleum, or any product derived from petroleum, 
                provided for in headings 2709 and 2710 of the HTS;
                  (E) watches and watch parts (including cases, 
                bracelets, and straps), of whatever type including, but 
                not limited to, mechanical, quartz digital, or quartz 
                analog, if such watches or watch parts contain any 
                material which is the product of any country with 
                respect to which HTS column 2 rates of duty apply;
                  (F) articles to which reduced rates of duty apply 
                under subsection (c);
                  (G) sugars, syrups, and sugar containing products 
                subject to tariff-rate quotas; or
                  (H) rum and tafia classified in subheading 2208.40 of 
                the HTS.
          (2) Transition period treatment of certain textile and 
        apparel articles.--
                  (A) Articles covered.--During the transition period, 
                the preferential treatment described in subparagraph 
                (B) shall apply to the following articles:
                          (i) Apparel articles assembled from products 
                        of the united states and atpea beneficiary 
                        countries or products not available in 
                        commercial quantities.--Apparel articles sewn 
                        or otherwise assembled in 1 or more ATPEA 
                        beneficiary countries, or the United States, or 
                        both, exclusively from any one or any 
                        combination of the following:
                                  (I) Fabrics or fabric components 
                                formed, or components knit-to-shape, in 
                                the United States, from yarns wholly 
                                formed in the United States (including 
                                fabrics not formed from yarns, if such 
                                fabrics are classifiable under heading 
                                5602 or 5603 of the HTS and are formed 
                                in the United States), provided that 
                                apparel articles sewn or otherwise 
                                assembled from materials described in 
                                this subclause are assembled with 
                                thread formed in the United States.
                                  (II) Fabric components knit-to-shape 
                                in the United States from yarns wholly 
                                formed in the United States and fabric 
                                components knit-to-shape in 1 or more 
                                ATPEA beneficiary countries from yarns 
                                wholly formed in the United States.
                                  (III) Fabrics or fabric components 
                                formed or components knit-to-shape, in 
                                1 or more ATPEA beneficiary countries, 
                                from yarns wholly formed in 1 or more 
                                ATPEA beneficiary countries, if such 
                                fabrics (including fabrics not formed 
                                from yarns, if such fabrics are 
                                classifiable under heading 5602 or 5603 
                                of the HTS and are formed in 1 or more 
                                ATPEA beneficiary countries) or 
                                components are in chief weight of 
                                llama, alpaca, or vicuna.
                                  (IV) Fabrics or yarns that are not 
                                formed in the United States or in 1 or 
                                more ATPEA beneficiary countries, to 
                                the extent that apparel articles of 
                                such fabrics or yarns would be eligible 
                                for preferential treatment, without 
                                regard to the source of the fabrics or 
                                yarns, under Annex 401 of the NAFTA.
                          (ii) Knit-to-shape apparel articles.--Apparel 
                        articles knit-to-shape (other than socks 
                        provided for in heading 6115 of the HTS) in 1 
                        or more ATPEA beneficiary countries from yarns 
                        wholly formed in the United States.
                          (iii) Regional fabric.--
                                  (I) General rule.--Knit apparel 
                                articles wholly assembled in 1 or more 
                                ATPEA beneficiary countries exclusively 
                                from fabric formed, or fabric 
                                components formed, or components knit-
                                to-shape, or any combination thereof, 
                                in 1 or more ATPEA beneficiary 
                                countries from yarns wholly formed in 
                                the United States, in an amount not 
                                exceeding the amount set forth in 
                                subclause (II).
                                  (II) Limitation.--The amount referred 
                                to in subclause (I) is 70,000,000 
                                square meter equivalents during the 1-
                                year period beginning on March 1, 2002, 
                                increased by 16 percent, compounded 
                                annually, in each succeeding 1-year 
                                period through February 28, 2006.
                          (iv) Certain other apparel articles.--
                                  (I) General rule.--Subject to 
                                subclause (II), any apparel article 
                                classifiable under subheading 6212.10 
                                of the HTS, if the article is both cut 
                                and sewn or otherwise assembled in the 
                                United States, or one or more of the 
                                ATPEA beneficiary countries, or both.
                                  (II) Limitation.--During the 1-year 
                                period beginning on March 1, 2003, and 
                                during each of the 2 succeeding 1-year 
                                periods, apparel articles described in 
                                subclause (I) of a producer or an 
                                entity controlling production shall be 
                                eligible for preferential treatment 
                                under subparagraph (B) only if the 
                                aggregate cost of fabric components 
                                formed in the United States that are 
                                used in the production of all such 
                                articles of that producer or entity 
                                that are entered during the preceding 
                                1-year period is at least 75 percent of 
                                the aggregate declared customs value of 
                                the fabric contained in all such 
                                articles of that producer or entity 
                                that are entered during the preceding 
                                1-year period.
                                  (III) Development of procedure to 
                                ensure compliance.--The United States 
                                Customs Service shall develop and 
                                implement methods and procedures to 
                                ensure ongoing compliance with the 
                                requirement set forth in subclause 
                                (II). If the Customs Service finds that 
                                a producer or an entity controlling 
                                production has not satisfied such 
                                requirement in a 1-year period, then 
                                apparel articles described in subclause 
                                (I) of that producer or entity shall be 
                                ineligible for preferential treatment 
                                under subparagraph (B) during any 
                                succeeding 1-year period until the 
                                aggregate cost of fabric components 
                                formed in the United States used in the 
                                production of such articles of that 
                                producer or entity that are entered 
                                during the preceding 1-year period is 
                                at least 85 percent of the aggregate 
                                declared customs value of the fabric 
                                contained in all such articles of that 
                                producer or entity that are entered 
                                during the preceding 1-year period.
                          (v) Apparel articles assembled from fabrics 
                        or yarn not widely available in commercial 
                        quantities.--At the request of any interested 
                        party, the President is authorized to proclaim 
                        additional fabrics and yarn as eligible for 
                        preferential treatment under clause (i)(IV) 
                        if--
                                  (I) the President determines that 
                                such fabrics or yarn cannot be supplied 
                                by the domestic industry in commercial 
                                quantities in a timely manner;
                                  (II) the President has obtained 
                                advice regarding the proposed action 
                                from the appropriate advisory committee 
                                established under section 135 of the 
                                Trade Act of 1974 (19 U.S.C. 2155) and 
                                the United States International Trade 
                                Commission;
                                  (III) within 60 days after the 
                                request, the President has submitted a 
                                report to the Committee on Ways and 
                                Means of the House of Representatives 
                                and the Committee on Finance of the 
                                Senate that sets forth the action 
                                proposed to be proclaimed and the 
                                reasons for such actions, and the 
                                advice obtained under subclause (II);
                                  (IV) a period of 60 calendar days, 
                                beginning with the first day on which 
                                the President has met the requirements 
                                of subclause (III), has expired; and
                                  (V) the President has consulted with 
                                such committees regarding the proposed 
                                action during the period referred to in 
                                subclause (III).
                          (vi) Handloomed, handmade, and folklore 
                        articles.--A handloomed, handmade, or folklore 
                        article of an ATPEA beneficiary country 
                        identified under subparagraph (C) that is 
                        certified as such by the competent authority of 
                        such beneficiary country.
                          (vii) Special rules.--
                                  (I) Exception for findings and 
                                trimmings.--(aa) An article otherwise 
                                eligible for preferential treatment 
                                under this paragraph shall not be 
                                ineligible for such treatment because 
                                the article contains findings or 
                                trimmings of foreign origin, if such 
                                findings and trimmings do not exceed 25 
                                percent of the cost of the components 
                                of the assembled product. Examples of 
                                findings and trimmings are sewing 
                                thread, hooks and eyes, snaps, buttons, 
                                `bow buds', decorative lace, trim, 
                                elastic strips, zippers, including 
                                zipper tapes and labels, and other 
                                similar products. Elastic strips are 
                                considered findings or trimmings only 
                                if they are each less than 1 inch in 
                                width and are used in the production of 
                                brassieres.
                                  (bb) In the case of an article 
                                described in clause (i)(I) of this 
                                subparagraph, sewing thread shall not 
                                be treated as findings or trimmings 
                                under this subclause.
                                  (II) Certain interlinings.--(aa) An 
                                article otherwise eligible for 
                                preferential treatment under this 
                                paragraph shall not be ineligible for 
                                such treatment because the article 
                                contains certain interlinings of 
                                foreign origin, if the value of such 
                                interlinings (and any findings and 
                                trimmings) does not exceed 25 percent 
                                of the cost of the components of the 
                                assembled article.
                                  (bb) Interlinings eligible for the 
                                treatment described in division (aa) 
                                include only a chest type plate, `hymo' 
                                piece, or `sleeve header', of woven or 
                                weft-inserted warp knit construction 
                                and of coarse animal hair or man-made 
                                filaments.
                                  (cc) The treatment described in this 
                                subclause shall terminate if the 
                                President makes a determination that 
                                United States manufacturers are 
                                producing such interlinings in the 
                                United States in commercial quantities.
                                  (III) De minimis rule.--An article 
                                that would otherwise be ineligible for 
                                preferential treatment under this 
                                paragraph because the article contains 
                                yarns not wholly formed in the United 
                                States or in 1 or more ATPEA 
                                beneficiary countries shall not be 
                                ineligible for such treatment if the 
                                total weight of all such yarns is not 
                                more than 7 percent of the total weight 
                                of the good. Notwithstanding the 
                                preceding sentence, an apparel article 
                                containing elastomeric yarns shall be 
                                eligible for preferential treatment 
                                under this paragraph only if such yarns 
                                are wholly formed in the United States.
                                  (IV) Special origin rule.--An article 
                                otherwise eligible for preferential 
                                treatment under clause (i) of this 
                                subparagraph shall not be ineligible 
                                for such treatment because the article 
                                contains nylon filament yarn (other 
                                than elastomeric yarn) that is 
                                classifiable under subheading 
                                5402.10.30, 5402.10.60, 5402.31.30, 
                                5402.31.60, 5402.32.30, 5402.32.60, 
                                5402.41.10, 5402.41.90, 5402.51.00, or 
                                5402.61.00 of the HTS duty-free from a 
                                country that is a party to an agreement 
                                with the United States establishing a 
                                free trade area, which entered into 
                                force before January 1, 1995.
                                  (V) Clarification of certain knit 
                                apparel articles.--Notwithstanding any 
                                other provision of law, an article 
                                otherwise eligible for preferential 
                                treatment under clause (iii)(I) of this 
                                subparagraph, shall not be ineligible 
                                for such treatment because the article, 
                                or a component thereof, contains fabric 
                                formed in the United States from yarns 
                                wholly formed in the United States.
                          (viii) Textile luggage.--Textile luggage--
                                  (I) assembled in an ATPEA beneficiary 
                                country from fabric wholly formed and 
                                cut in the United States, from yarns 
                                wholly formed in the United States, 
                                that is entered under subheading 
                                9802.00.80 of the HTS; or
                                  (II) assembled from fabric cut in an 
                                ATPEA beneficiary country from fabric 
                                wholly formed in the United States from 
                                yarns wholly formed in the United 
                                States.
                  (B) Preferential treatment.--Except as provided in 
                subparagraph (E), during the transition period, the 
                articles to which subparagraph (A) applies shall enter 
                the United States free of duty and free of any 
                quantitative restrictions, limitations, or consultation 
                levels.
                  (C) Handloomed, handmade, and folklore articles.--For 
                purposes of subparagraph (A)(vi), the President shall 
                consult with representatives of the ATPEA beneficiary 
                countries concerned for the purpose of identifying 
                particular textile and apparel goods that are mutually 
                agreed upon as being handloomed, handmade, or folklore 
                goods of a kind described in section 2.3(a), (b), or 
                (c) of the Annex or Appendix 3.1.B.11 of the Annex.
                  (D) Penalties for transshipments.--
                          (i) Penalties for exporters.--If the 
                        President determines, based on sufficient 
                        evidence, that an exporter has engaged in 
                        transshipment with respect to textile or 
                        apparel articles from an ATPEA beneficiary 
                        country, then the President shall deny all 
                        benefits under this title to such exporter, and 
                        any successor of such exporter, for a period of 
                        2 years.
                          (ii) Penalties for countries.--Whenever the 
                        President finds, based on sufficient evidence, 
                        that transshipment has occurred, the President 
                        shall request that the ATPEA beneficiary 
                        country or countries through whose territory 
                        the transshipment has occurred take all 
                        necessary and appropriate actions to prevent 
                        such transshipment. If the President determines 
                        that a country is not taking such actions, the 
                        President shall reduce the quantities of 
                        textile and apparel articles that may be 
                        imported into the United States from such 
                        country by the quantity of the transshipped 
                        articles multiplied by 3, to the extent 
                        consistent with the obligations of the United 
                        States under the WTO.
                          (iii) Transshipment described.--Transshipment 
                        within the meaning of this subparagraph has 
                        occurred when preferential treatment under 
                        subparagraph (B) has been claimed for a textile 
                        or apparel article on the basis of material 
                        false information concerning the country of 
                        origin, manufacture, processing, or assembly of 
                        the article or any of its components. For 
                        purposes of this clause, false information is 
                        material if disclosure of the true information 
                        would mean or would have meant that the article 
                        is or was ineligible for preferential treatment 
                        under subparagraph (B).
                  (E) Bilateral emergency actions.--
                          (i) In general.--The President may take 
                        bilateral emergency tariff actions of a kind 
                        described in section 4 of the Annex with 
                        respect to any apparel article imported from an 
                        ATPEA beneficiary country if the application of 
                        tariff treatment under subparagraph (B) to such 
                        article results in conditions that would be 
                        cause for the taking of such actions under such 
                        section 4 with respect to a like article 
                        described in the same 8-digit subheading of the 
                        HTS that is imported from Mexico.
                          (ii) Rules relating to bilateral emergency 
                        action.--For purposes of applying bilateral 
                        emergency action under this subparagraph--
                                  (I) the requirements of paragraph (5) 
                                of section 4 of the Annex (relating to 
                                providing compensation) shall not 
                                apply;
                                  (II) the term `transition period' in 
                                section 4 of the Annex shall have the 
                                meaning given that term in paragraph 
                                (5)(D) of this subsection; and
                                  (III) the requirements to consult 
                                specified in section 4 of the Annex 
                                shall be treated as satisfied if the 
                                President requests consultations with 
                                the ATPEA beneficiary country in 
                                question and the country does not agree 
                                to consult within the time period 
                                specified under section 4.
          (3) Transition period treatment of certain other articles 
        originating in beneficiary countries.--
                  (A) Equivalent tariff treatment.--
                          (i) In general.--Subject to clause (ii), the 
                        tariff treatment accorded at any time during 
                        the transition period to any article referred 
                        to in any of subparagraphs (B), (D) through 
                        (F), or (H) of paragraph (1) that is an ATPEA 
                        originating good shall be identical to the 
                        tariff treatment that is accorded at such time 
                        under Annex 302.2 of the NAFTA to an article 
                        described in the same 8-digit subheading of the 
                        HTS that is a good of Mexico and is imported 
                        into the United States.
                          (ii) Exception.--Clause (i) does not apply to 
                        any article accorded duty-free treatment under 
                        U.S. Note 2(b) to subchapter II of chapter 98 
                        of the HTS.
                  (B) Relationship to subsection (c) duty reductions.--
                If at any time during the transition period the rate of 
                duty that would (but for action taken under 
                subparagraph (A)(i) in regard to such period) apply 
                with respect to any article under subsection (c) is a 
                rate of duty that is lower than the rate of duty 
                resulting from such action, then such lower rate of 
                duty shall be applied for the purposes of implementing 
                such action.
                  (C) Special rule for sugars, syrups, and sugar 
                containing products.--Duty-free treatment under this 
                Act shall not be extended to sugars, syrups, and sugar-
                containing products subject to over-quota duty rates 
                under applicable tariff-rate quotas.
                  (D) Special rule for certain tuna products.--
                          (i) In general.--The President may proclaim 
                        duty-free treatment under this Act for tuna 
                        that is harvested by United States vessels or 
                        ATPEA beneficiary country vessels, and is 
                        prepared or preserved in any manner, in 
                        airtight containers in an ATPEA beneficiary 
                        country. Such duty-free treatment may be 
                        proclaimed in any calendar year for a quantity 
                        of such tuna that does not exceed 20 percent of 
                        the domestic United States tuna pack in the 
                        preceding calendar year. As used in the 
                        preceding sentence, the term `tuna pack' means 
                        tuna pack as defined by the National Marine 
                        Fisheries Service of the United States 
                        Department of Commerce for purposes of 
                        subheading 1604.14.20 of the HTS as in effect 
                        on the date of enactment of the Andean Trade 
                        Preference Expansion Act.
                          (ii) United States vessel.--For purposes of 
                        this subparagraph, a `United States vessel' is 
                        a vessel having a certificate of documentation 
                        with a fishery endorsement under chapter 121 of 
                        title 46, United States Code.
                          (iii) ATPEA vessel.--For purposes of this 
                        subparagraph, an `ATPEA vessel' is a vessel--
                                  (I) which is registered or recorded 
                                in an ATPEA beneficiary country;
                                  (II) which sails under the flag of an 
                                ATPEA beneficiary country;
                                  (III) which is at least 75 percent 
                                owned by nationals of an ATPEA 
                                beneficiary country or by a company 
                                having its principal place of business 
                                in an ATPEA beneficiary country, of 
                                which the manager or managers, chairman 
                                of the board of directors or of the 
                                supervisory board, and the majority of 
                                the members of such boards are 
                                nationals of an ATPEA beneficiary 
                                country and of which, in the case of a 
                                company, at least 50 percent of the 
                                capital is owned by an ATPEA 
                                beneficiary country or by public bodies 
                                or nationals of an ATPEA beneficiary 
                                country;
                                  (IV) of which the master and officers 
                                are nationals of an ATPEA beneficiary 
                                country; and
                                  (V) of which at least 75 percent of 
                                the crew are nationals of an ATPEA 
                                beneficiary country.
          (4) Customs procedures.--
                  (A) In general.--
                          (i) Regulations.--Any importer that claims 
                        preferential treatment under paragraph (2) or 
                        (3) shall comply with customs procedures 
                        similar in all material respects to the 
                        requirements of Article 502(1) of the NAFTA as 
                        implemented pursuant to United States law, in 
                        accordance with regulations promulgated by the 
                        Secretary of the Treasury.
                          (ii) Determination.--
                                  (I) In general.--In order to qualify 
                                for the preferential treatment under 
                                paragraph (2) or (3) and for a 
                                Certificate of Origin to be valid with 
                                respect to any article for which such 
                                treatment is claimed, there shall be in 
                                effect a determination by the President 
                                that each country described in 
                                subclause (II)--
                                          (aa) has implemented and 
                                        follows; or
                                          (bb) is making substantial 
                                        progress toward implementing 
                                        and following,
                                procedures and requirements similar in 
                                all material respects to the relevant 
                                procedures and requirements under 
                                chapter 5 of the NAFTA.
                                  (II) Country described.--A country is 
                                described in this subclause if it is an 
                                ATPEA beneficiary country--
                                          (aa) from which the article 
                                        is exported; or
                                          (bb) in which materials used 
                                        in the production of the 
                                        article originate or in which 
                                        the article or such materials 
                                        undergo production that 
                                        contributes to a claim that the 
                                        article is eligible for 
                                        preferential treatment under 
                                        paragraph (2) or (3).
                  (B) Certificate of origin.--The Certificate of Origin 
                that otherwise would be required pursuant to the 
                provisions of subparagraph (A) shall not be required in 
                the case of an article imported under paragraph (2) or 
                (3) if such Certificate of Origin would not be required 
                under Article 503 of the NAFTA (as implemented pursuant 
                to United States law), if the article were imported 
                from Mexico.
                  (C) Report by ustr on cooperation of other countries 
                concerning circumvention.--The United States 
                Commissioner of Customs shall conduct a study analyzing 
                the extent to which each ATPEA beneficiary country--
                          (i) has cooperated fully with the United 
                        States, consistent with its domestic laws and 
                        procedures, in instances of circumvention or 
                        alleged circumvention of existing quotas on 
                        imports of textile and apparel goods, to 
                        establish necessary relevant facts in the 
                        places of import, export, and, where 
                        applicable, transshipment, including 
                        investigation of circumvention practices, 
                        exchanges of documents, correspondence, 
                        reports, and other relevant information, to the 
                        extent such information is available;
                          (ii) has taken appropriate measures, 
                        consistent with its domestic laws and 
                        procedures, against exporters and importers 
                        involved in instances of false declaration 
                        concerning fiber content, quantities, 
                        description, classification, or origin of 
                        textile and apparel goods; and
                          (iii) has penalized the individuals and 
                        entities involved in any such circumvention, 
                        consistent with its domestic laws and 
                        procedures, and has worked closely to seek the 
                        cooperation of any third country to prevent 
                        such circumvention from taking place in that 
                        third country.
                The Trade Representative shall submit to Congress, not 
                later than October 1, 2002, a report on the study 
                conducted under this subparagraph.
          (5) Definitions and special rules.--For purposes of this 
        subsection--
                  (A) Annex.--The term ``the Annex'' means Annex 300-B 
                of the NAFTA.
                  (B) ATPEA beneficiary country.--The term ``ATPEA 
                beneficiary country'' means any ``beneficiary 
                country'', as defined in section 203(a)(1) of this 
                title, which the President designates as an ATPEA 
                beneficiary country, taking into account the criteria 
                contained in subsections (c) and (d) of section 203 and 
                other appropriate criteria, including the following:
                          (i) Whether the beneficiary country has 
                        demonstrated a commitment to--
                                  (I) undertake its obligations under 
                                the WTO, including those agreements 
                                listed in section 101(d) of the Uruguay 
                                Round Agreements Act, on or ahead of 
                                schedule; and
                                  (II) participate in negotiations 
                                toward the completion of the FTAA or 
                                another free trade agreement.
                          (ii) The extent to which the country provides 
                        protection of intellectual property rights 
                        consistent with or greater than the protection 
                        afforded under the Agreement on Trade-Related 
                        Aspects of Intellectual Property Rights 
                        described in section 101(d)(15) of the Uruguay 
                        Round Agreements Act.
                          (iii) The extent to which the country 
                        provides internationally recognized worker 
                        rights, including--
                                  (I) the right of association;
                                  (II) the right to organize and 
                                bargain collectively;
                                  (III) a prohibition on the use of any 
                                form of forced or compulsory labor;
                                  (IV) a minimum age for the employment 
                                of children; and
                                  (V) acceptable conditions of work 
                                with respect to minimum wages, hours of 
                                work, and occupational safety and 
                                health;
                          (iv) Whether the country has implemented its 
                        commitments to eliminate the worst forms of 
                        child labor, as defined in section 507(6) of 
                        the Trade Act of 1974.
                          (v) The extent to which the country has met 
                        the counter-narcotics certification criteria 
                        set forth in section 490 of the Foreign 
                        Assistance Act of 1961 (22 U.S.C. 2291j) for 
                        eligibility for United States assistance.
                          (vi) The extent to which the country has 
                        taken steps to become a party to and implements 
                        the Inter-American Convention Against 
                        Corruption.
                          (vii) The extent to which the country--
                                  (I) applies transparent, 
                                nondiscriminatory, and competitive 
                                procedures in government procurement 
                                equivalent to those contained in the 
                                Agreement on Government Procurement 
                                described in section 101(d)(17) of the 
                                Uruguay Round Agreements Act; and
                                  (II) contributes to efforts in 
                                international fora to develop and 
                                implement international rules in 
                                transparency in government procurement.
                  (C) ATPEA originating good.--
                          (i) In general.--The term ``ATPEA originating 
                        good'' means a good that meets the rules of 
                        origin for a good set forth in chapter 4 of the 
                        NAFTA as implemented pursuant to United States 
                        law.
                          (ii) Application of chapter 4.--In applying 
                        chapter 4 of the NAFTA with respect to an ATPEA 
                        beneficiary country for purposes of this 
                        subsection--
                                  (I) no country other than the United 
                                States and an ATPEA beneficiary country 
                                may be treated as being a party to the 
                                NAFTA;
                                  (II) any reference to trade between 
                                the United States and Mexico shall be 
                                deemed to refer to trade between the 
                                United States and an ATPEA beneficiary 
                                country;
                                  (III) any reference to a party shall 
                                be deemed to refer to an ATPEA 
                                beneficiary country or the United 
                                States; and
                                  (IV) any reference to parties shall 
                                be deemed to refer to any combination 
                                of ATPEA beneficiary countries or to 
                                the United States and one or more ATPEA 
                                beneficiary countries (or any 
                                combination thereof ).
                  (D) Transition period.--The term ``transition 
                period'' means, with respect to an ATPEA beneficiary 
                country, the period that begins on the date of 
                enactment, and ends on the earlier of--
                          (i) February 28, 2006; or
                          (ii) the date on which the FTAA or another 
                        free trade agreement that makes substantial 
                        progress in achieving the negotiating 
                        objectives set forth in section 108(b)(5) of 
                        Public Law 103-182 (19 U.S.C. 3317(b)(5)) 
                        enters into force with respect to the United 
                        States and the ATPEA beneficiary country.
                  (E) ATPEA.--The term ``ATPEA'' means the Andean Trade 
                Preference Expansion Act.
                  (F) FTAA.--The term ``FTAA'' means the Free Trade 
                Area of the Americas.
  (b) Determination Regarding Retention of Designation.--Section 203(e) 
of the Andean Trade Preference Act (19 U.S.C. 3202(e)) is amended--
          (1) in paragraph (1)--
                  (A) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively;
                  (B) by inserting ``(A)'' after ``(1)''; and
                  (C) by adding at the end the following:
  (B) The President may, after the requirements of paragraph (2) have 
been met--
          (i) withdraw or suspend the designation of any country as an 
        ATPEA beneficiary country; or
          (ii) withdraw, suspend, or limit the application of 
        preferential treatment under section 204(b) (2) and (3) to any 
        article of any country, if, after such designation, the 
        President determines that, as a result of changed 
        circumstances, the performance of such country is not 
        satisfactory under the criteria set forth in section 
        204(b)(5)(B).''; and
          (2) by adding after paragraph (2) the following new 
        paragraph:
  (3) If preferential treatment under section 204(b)(2) and (3) is 
withdrawn, suspended, or limited with respect to an ATPEA beneficiary 
country, such country shall not be deemed to be a `party' for the 
purposes of applying section 204(b)(5)(C) to imports of articles for 
which preferential treatment has been withdrawn, suspended, or limited 
with respect to such country.
  (c) Reporting Requirements.--Section 203(f) of the Andean Trade 
Preference Act (19 U.S.C. 3202(f)) is amended to read as follows:
  (f) Reporting Requirements.--
          (1) In general.--Not later than December 31, 2002, and every 
        2 years thereafter during the period this title is in effect, 
        the United States Trade Representative shall submit to Congress 
        a report regarding the operation of this title, including--
                  (A) with respect to subsections (c) and (d), the 
                results of a general review of beneficiary countries 
                based on the considerations described in such 
                subsections; and
                  (B) the performance of each beneficiary country or 
                ATPEA beneficiary country, as the case may be, under 
                the criteria set forth in section 204(b)(5)(B).
          (2) Public comment.--Before submitting the report described 
        in paragraph (1), the United States Trade Representative shall 
        publish a notice in the Federal Register requesting public 
        comments on whether beneficiary countries are meeting the 
        criteria listed in section 204(b)(5)(B).
  (d) Conforming Amendments.--
          (1) In general.--
                  (A) Section 202 of the Andean Trade Preference Act 
                (19 U.S.C. 3201) is amended by inserting ``(or other 
                preferential treatment)'' after ``treatment''.
                  (B) Section 204(a)(1) of the Andean Trade Preference 
                Act (19 U.S.C. 3203(a)(1)) is amended by inserting 
                ``(or otherwise provided for)'' after ``eligibility''.
                  (C) Section 204(a)(1) of the Andean Trade Preference 
                Act (19 U.S.C. 3203(a)(1)) is amended by inserting 
                ``(or preferential treatment)'' after ``duty-free 
                treatment''.
          (2) Definitions.--Section 203(a) of the Andean Trade 
        Preference Act (19 U.S.C. 3202(a)) is amended by adding at the 
        end the following new paragraphs:
          (4) The term ``NAFTA'' means the North American Free Trade 
        Agreement entered into between the United States, Mexico, and 
        Canada on December 17, 1992.
          (5) The terms ``WTO'' and ``WTO member'' have the meanings 
        given those terms in section 2 of the Uruguay Round Agreements 
        Act (19 U.S.C. 3501).''.

SEC. 103. TERMINATION.

  Section 208(b) of the Andean Trade Preference Act (19 U.S.C. 3206(b)) 
is amended to read as follows:
  ``(b) Termination of Preferential Treatment.--No preferential duty 
treatment extended to beneficiary countries under this Act shall remain 
in effect after February 28, 2006.

                TITLE II--MISCELLANEOUS TRADE PROVISIONS

SEC. 201. WOOL PROVISIONS.

  (a) Short Title.--This section may be cited as the ``Wool 
Manufacturer Payment Clarification and Technical Corrections Act''.
  (b) Clarification of Temporary Duty Suspension.--Heading 9902.51.13 
of the Harmonized Tariff Schedule of the United States is amended by 
inserting ``average'' before ``diameters''.
  (c) Payments to Manufacturers of Certain Wool Products.--
          (1) Payments.--Section 505 of the Trade and Development Act 
        of 2000 (Public Law 106-200; 114 Stat. 303) is amended as 
        follows:
                  (A) Subsection (a) is amended--
                          (i) by striking ``In each of the calendar 
                        years'' and inserting ``For each of the 
                        calendar years''; and
                          (ii) by striking ``for a refund of duties'' 
                        and all that follows through the end of the 
                        subsection and inserting ``for a payment equal 
                        to an amount determined pursuant to subsection 
                        (d)(1).
                  (B) Subsection (b) is amended to read as follows:
  (b) Wool Yarn.--
          (1) Importing manufacturers.--For each of the calendar years 
        2000, 2001, and 2002, a manufacturer of worsted wool fabrics 
        who imports wool yarn of the kind described in heading 
        9902.51.13 of the Harmonized Tariff Schedule of the United 
        States shall be eligible for a payment equal to an amount 
        determined pursuant to subsection (d)(2).
          (2) Nonimporting manufacturers.--For each of the calendar 
        years 2001 and 2002, any other manufacturer of worsted wool 
        fabrics of imported wool yarn of the kind described in heading 
        9902.51.13 of the Harmonized Tariff Schedule of the United 
        States shall be eligible for a payment equal to an amount 
        determined pursuant to subsection (d)(2).
                  (C) Subsection (c) is amended to read as follows:
  (c) Wool Fiber and Wool Top.--
          (1) Importing manufacturers.--For each of the calendar years 
        2000, 2001, and 2002, a manufacturer of wool yarn or wool 
        fabric who imports wool fiber or wool top of the kind described 
        in heading 9902.51.14 of the Harmonized Tariff Schedule of the 
        United States shall be eligible for a payment equal to an 
        amount determined pursuant to subsection (d)(3).
          (2) Nonimporting manufacturers.--For each of the calendar 
        years 2001 and 2002, any other manufacturer of wool yarn or 
        wool fabric of imported wool fiber or wool top of the kind 
        described in heading 9902.51.14 of the Harmonized Tariff 
        Schedule of the United States shall be eligible for a payment 
        equal to an amount determined pursuant to subsection (d)(3).
                  (D) Section 505 is further amended by striking 
                subsection (d) and inserting the following new 
                subsections:
  (d) Amount of Annual Payments to Manufacturers.--
          (1) Manufacturers of men's suits, etc. of imported worsted 
        wool fabrics.--
                  (A) Eligible to receive more than $5,000.--Each 
                annual payment to manufacturers described in subsection 
                (a) who, according to the records of the Customs 
                Service as of September 11, 2001, are eligible to 
                receive more than $5,000 for each of the calendar years 
                2000, 2001, and 2002, shall be in an amount equal to 
                one-third of the amount determined by multiplying 
                $30,124,000 by a fraction--
                          (i) the numerator of which is the amount 
                        attributable to the duties paid on eligible 
                        wool products imported in calendar year 1999 by 
                        the manufacturer making the claim, and
                          (ii) the denominator of which is the total 
                        amount attributable to the duties paid on 
                        eligible wool products imported in calendar 
                        year 1999 by all the manufacturers described in 
                        subsection (a) who, according to the records of 
                        the Customs Service as of September 11, 2001, 
                        are eligible to receive more than $5,000 for 
                        each such calendar year under this section as 
                        it was in effect on that date.
                  (B) Eligible wool products.--For purposes of 
                subparagraph (A), the term `eligible wool products' 
                refers to imported worsted wool fabrics described in 
                subsection (a).
                  (C) Others.--All manufacturers described in 
                subsection (a), other than the manufacturer's to which 
                subparagraph (A) applies, shall each receive an annual 
                payment in an amount equal to one-third of the amount 
                determined by dividing $1,665,000 by the number of all 
                such other manufacturers.
          (2) Manufacturers of worsted wool fabrics of imported wool 
        yarn.--
                  (A) Importing manufacturers.--Each annual payment to 
                an importing manufacturer described in subsection 
                (b)(1) shall be in an amount equal to one-third of the 
                amount determined by multiplying $2,202,000 by a 
                fraction--
                          (i) the numerator of which is the amount 
                        attributable to the duties paid on eligible 
                        wool products imported in calendar year 1999 by 
                        the importing manufacturer making the claim, 
                        and
                          (ii) the denominator of which is the total 
                        amount attributable to the duties paid on 
                        eligible wool products imported in calendar 
                        year 1999 by all the importing manufacturers 
                        described in subsection (b)(1).
                  (B) Eligible wool products.--For purposes of 
                subparagraph (A), the term ``eligible wool products'' 
                refers to imported wool yarn described in subsection 
                (b)(1).
                  (C) Nonimporting manufacturers.--Each annual payment 
                to a nonimporting manufacturer described in subsection 
                (b)(2) shall be in an amount equal to one-half of the 
                amount determined by multiplying $141,000 by a 
                fraction--
                          (i) the numerator of which is the amount 
                        attributable to the purchases of imported 
                        eligible wool products in calendar year 1999 by 
                        the nonimporting manufacturer making the claim, 
                        and
                          (ii) the denominator of which is the total 
                        amount attributable to the purchases of 
                        imported eligible wool products in calendar 
                        year 1999 by all the nonimporting manufacturers 
                        described in subsection (b)(2).
          (3) Manufacturers of wool yarn or wool fabric of imported 
        wool fiber or wool top.--
                  (A) Importing manufacturers.--Each annual payment to 
                an importing manufacturer described in subsection 
                (c)(1) shall be in an amount equal to one-third of the 
                amount determined by multiplying $1,522,000 by a 
                fraction--
                          (i) the numerator of which is the amount 
                        attributable to the duties paid on eligible 
                        wool products imported in calendar year 1999 by 
                        the importing manufacturer making the claim, 
                        and
                          (ii) the denominator of which is the total 
                        amount attributable to the duties paid on 
                        eligible wool products imported in calendar 
                        year 1999 by all the importing manufacturers 
                        described in subsection (c)(1).
                  (B) Eligible wool products.--For purposes of 
                subparagraph (A), the term ``eligible wool products'' 
                refers to imported wool fiber or wool top described in 
                subsection (c)(1).
                  (C) Nonimporting manufacturers.--Each annual payment 
                to a nonimporting manufacturer described in subsection 
                (c)(2) shall be in an amount equal to one-half of the 
                amount determined by multiplying $597,000 by a 
                fraction--
                          (i) the numerator of which is the amount 
                        attributable to the purchases of imported 
                        eligible wool products in calendar year 1999 by 
                        the nonimporting manufacturer making the claim, 
                        and
                          (ii) the denominator of which is the amount 
                        attributable to the purchases of imported 
                        eligible wool products in calendar year 1999 by 
                        all the nonimporting manufacturers described in 
                        subsection (c)(2).
          (4) Letters of intent.--Except for the nonimporting 
        manufacturers described in subsections (b)(2) and (c)(2) who 
        may make claims under this section by virtue of the enactment 
        of the Wool Manufacturer Payment Clarification and Technical 
        Corrections Act, only manufacturers who, according to the 
        records of the Customs Service, filed with the Customs Service 
        before September 11, 2001, letters of intent to establish 
        eligibility to be claimants are eligible to make a claim for a 
        payment under this section.
          (5) Amount attributable to purchases by nonimporting 
        manufacturers.--
                  (A) Amount attributable.--For purposes of paragraphs 
                (2)(C) and (3)(C), the amount attributable to the 
                purchases of imported eligible wool products in 
                calendar year 1999 by a nonimporting manufacturer shall 
                be the amount the nonimporting manufacturer paid for 
                eligible wool products in calendar year 1999, as 
                evidenced by invoices. The nonimporting manufacturer 
                shall make such calculation and submit the resulting 
                amount to the Customs Service, within 45 days after the 
                date of enactment of the Wool Manufacturer Payment 
                Clarification and Technical Corrections Act, in a 
                signed affidavit that attests that the information 
                contained therein is true and accurate to the best of 
                the affiant's belief and knowledge. The nonimporting 
                manufacturer shall retain the records upon which the 
                calculation is based for a period of five years 
                beginning on the date the affidavit is submitted to the 
                Customs Service.
                  (B) Eligible wool product.--For purposes of 
                subparagraph (A)--
                          (i) the eligible wool product for 
                        nonimporting manufacturers of worsted wool 
                        fabrics is wool yarn of the kind described in 
                        heading 9902.51.13 of the Harmonized Tariff 
                        Schedule of the United States purchased in 
                        calendar year 1999; and
                          (ii) the eligible wool products for 
                        nonimporting manufacturers of wool yarn or wool 
                        fabric are wool fiber or wool top of the kind 
                        described in heading 9902.51.14 of such 
                        Schedule purchased in calendar year 1999.
          (6) Amount attributable to duties paid.--For purposes of 
        paragraphs (1), (2)(A), and (3)(A), the amount attributable to 
        the duties paid by a manufacturer shall be the amount shown on 
        the records of the Customs Service as of September 11, 2001, 
        under this section as then in effect.
          (7) Schedule of payments; reallocations.--
                  (A) Schedule.--Of the payments described in 
                paragraphs (1), (2)(A), and (3)(A), the Customs Service 
                shall make the first installment on or before December 
                31, 2001, the second installment on or before April 15, 
                2002, and the third installment on or before April 15, 
                2003. Of the payments described in paragraphs (2)(C) 
                and (3)(C), the Customs Service shall make the first 
                installment on or before April 15, 2002, and the second 
                installment on or before April 15, 2003.
                  (B) Reallocations.--In the event that a manufacturer 
                that would have received payment under subparagraph (A) 
                or (C) of paragraph (1), (2), or (3) ceases to be 
                qualified for such payment as such a manufacturer, the 
                amounts otherwise payable to the remaining 
                manufacturers under such subparagraph shall be 
                increased on a pro rata basis by the amount of the 
                payment such manufacturer would have received.
          (8) Reference.--For purposes of paragraphs (1)(A) and (6), 
        the `records of the Customs Service as of September 11, 2001' 
        are the records of the Wool Duty Unit of the Customs Service on 
        September 11, 2001, as adjusted by the Customs Service to the 
        extent necessary to carry out this section. The amounts so 
        adjusted are not subject to administrative or judicial review.
  (e) Affidavits by Manufacturers.--
          (1) Affidavit Required.--A manufacturer may not receive a 
        payment under this section for calendar year 2000, 2001, or 
        2002, as the case may be, unless that manufacturer has 
        submitted to the Customs Service for that calendar year a 
        signed affidavit that attests that, during that calendar year, 
        the affiant was a manufacturer in the United States described 
        in subsection (a), (b), or (c).
          (2) Timing.--An affidavit under paragraph (1) shall be 
        valid--
                  (A) in the case of a manufacturer described in 
                paragraph (1), (2)(A), or (3)(A) of subsection (d) 
                filing a claim for a payment for calendar year 2000, 
                only if the affidavit is postmarked no later than 15 
                days after the date of enactment of the Wool 
                Manufacturer Payment Clarification and Technical 
                Corrections Act; and
                  (B) in the case of a claim for a payment for calendar 
                year 2001 or 2002, only if the affidavit is postmarked 
                no later than March 1, 2002, or March 1, 2003, 
                respectively.
  (f) Offsets.--Notwithstanding any other provision of this section, 
any amount otherwise payable under subsection (d) to a manufacturer in 
calendar year 2001 and, where applicable, in calendar years 2002 and 
2003, shall be reduced by the amount of any payment received by that 
manufacturer under this section before the enactment of the Wool 
Manufacturer Payment Clarification and Technical Corrections Act.
  (g) Definition.--For purposes of this section, the manufacturer is 
the party that owns--
          (1) imported worsted wool fabric, of the kind described in 
        heading 9902.51.11 or 9902.51.12 of the Harmonized Tariff 
        Schedule of the United States, at the time the fabric is cut 
        and sewn in the United States into men's or boys' suits, suit-
        type jackets, or trousers;
          (2) imported wool yarn, of the kind described in heading 
        9902.51.13 of such Schedule, at the time the yarn is processed 
        in the United States into worsted wool fabric; or
          (3) imported wool fiber or wool top, of the kind described in 
        heading 9902.51.14 of such Schedule, at the time the wool fiber 
        or wool top is processed in the United States into wool yarn.
          (2) Funding.--There is authorized to be appropriated and is 
        appropriated, out of amounts in the General Fund of the 
        Treasury not otherwise appropriated, $36,251,000 to carry out 
        the amendments made by paragraph (1).

SEC. 202. CEILING FANS.

  (a) In General.--Notwithstanding any other provision of law, ceiling 
fans classified under subheading 8414.51.00 of the Harmonized Tariff 
Schedule of the United States imported from Thailand shall enter duty-
free and without any quantitative limitations, if duty-free treatment 
under title V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.) would 
have applied to such entry had the competitive need limitation been 
waived under section 503(d) of such Act.
  (b) Applicability.--The provisions of this section shall apply to 
ceiling fans described in subsection (a) that are entered, or withdrawn 
from warehouse for consumption--
          (1) on or after the date that is 15 days after the date of 
        enactment of this Act; and
          (2) before July 30, 2002.

SEC. 203. CERTAIN STEAM OR OTHER VAPOR GENERATING BOILERS USED IN 
                    NUCLEAR FACILITIES.

  (a) In General.--Subheading 9902.84.02 of the Harmonized Tariff 
Schedule of the United States is amended--
          (1) by striking ``4.9%'' and inserting ``Free''; and
          (2) by striking ``12/31/2003'' and inserting ``12/31/2006''.
  (b) Effective Date.--The amendments made by subsection (a) shall 
apply to goods entered, or withdrawn from warehouse for consumption, on 
or after January 1, 2002.

                               I. SUMMARY

    H.R. 3009 extends and expands a trade preference program 
for four beneficiary countries--Bolivia, Colombia, Ecuador and 
Peru--established in 1991 and expired on December 4, 2001. The 
Andean Trade Preference Act (19 U.S.C. Sec. Sec. 3201-06) 
(``ATPA'') provides duty-free treatment for most products that 
are the growth, product, or manufacture of any of the four ATPA 
beneficiary countries and that are imported directly into the 
customs territory of the United States. The present bill 
extends the ATPA through February 28, 2006 and expands the 
program by giving duty-free or reduced-duty treatment to most 
products currently excluded from ATPA.
    Additionally, the bill contains three miscellaneous 
provisions. The first establishes a procedure for importers of 
certain wool products to obtain refunds of duties paid in 
calendar year 1999. The second waives quantitative restrictions 
on ceiling fans imported from Thailand eligible for duty-free 
treatment under the Generalized System of Preferences. The 
third provides duty-free treatment for steam or other vapor 
generating boilers used in nuclear facilities, imported into 
the United States from January 1, 2002 through December 31, 
2006.

                        II. GENERAL EXPLANATION


                             A. Current Law

    The ATPA was enacted in 1991 as Title II of Public Law 
Number 102-182. It is codified at 19 U.S.C. Sec. Sec. 3201-06. 
The ATPA in its current form expired on December 4, 2001. A 
measure to continue the ATPA in its current form for six months 
(through June 4, 2002) was included in section 502 of H.R. 3090 
as reported in the Senate by the Committee on Finance on 
November 9, 2001.
    Under the ATPA, most categories of goods that are the 
growth, product or manufacture of Bolivia, Colombia, Ecuador, 
and Peru receive duty-free treatment when imported directly 
into the customs territory of the United States. The ATPA grew 
out of a commitment that President Bush made at the February 
1990 Cartagena Drug Summit to provide economic benefits to the 
four listed Andean countries as part of an effort to reduce 
illegal drug production and trafficking in those countries. By 
promoting legitimate economic activity in the beneficiary 
countries, ATPA was designed to displace investment and 
employment in illegitimate sectors.
    For a good to qualify as the growth, product or manufacture 
of an ATPA beneficiary country or countries, the value of 
materials produced in a beneficiary country or countries, plus 
the direct cost of processing operations performed in such 
country or countries must equal not less than 35 percent of the 
appraised value of the good upon entry into the customs 
territory of the United States. The statute provides that 
materials produced in beneficiary countries under the Caribbean 
Basin Economic Recovery Act, as well as operations performed in 
those countries, may contribute towards this 35 percent 
threshold. Materials produced in the Commonwealth of Puerto 
Rico and the United States Virgin Islands, as well as 
operations performed in those territories, also may contribute 
toward the threshold. Finally, up to 15 percent of the 35 
percent threshold may consist of materials produced in the 
customs territory of the United States (excluding Puerto Rico).
    Under the ATPA as expired on December 4, 2001, certain 
categories of goods are treated as import-sensitive and, 
therefore, are excluded from duty-free treatment on importation 
into the United States. These excluded categories are: (1) 
textile and apparel articles which are subject to textile 
agreements; (2) certain footwear; (3) tuna, prepared or 
preserved in any manner, in airtight containers; (4) petroleum 
and petroleum products; (5) certain watches and watch parts; 
(6) certain handbags, luggage, flat goods, work gloves, and 
leather apparel; (7) certain sugars, syrups and molasses; and 
(8) rum and tafia. Further, the articles in category (6) in the 
latter list of exceptions are subject to reduced (though not 
zero) duty rates.
    In order to qualify for ATPA benefits, each of the four 
countries must be designated by the President as a 
``beneficiary country.'' To attain that designation, each of 
the countries must meet certain mandatory criteria, as follows: 
(1) the country cannot be a communist country; (2) the country 
cannot have taken measures the effect of which is to 
nationalize, expropriate or otherwise seize ownership or 
control of property owned by U.S. citizens or companies, absent 
the provision of prompt, adequate and effective compensation; 
(3) the country must act in good faith to recognize as binding 
and to enforce arbitral awards in favor of U.S. citizens and 
companies; (4) the country cannot give trade preferences to 
developed countries that have a significant adverse effect on 
U.S. commerce; (5) the country must provide adequate and 
effective protection of intellectual property rights; (6) the 
country must be signatory to a treaty, convention, protocol or 
other agreement regarding the extradition of U.S. citizens; and 
(7) the country must be taking steps to afford internationally 
recognized worker rights to workers in the country.
    Of the foregoing criteria, items (1), (2), (3), (5), and 
(7) can be waived for a given country, if the President 
determines and reports to Congress that doing so is in the 
national economic or security interest of the United States.
    Additionally, the ATPA sets forth certain discretionary 
criteria for the President to take into account in deciding 
whether to designate any of the four listed countries as 
beneficiary countries. These criteria are: (1) the country's 
expressed desire to be so designated; (2) economic conditions 
in the country; (3) the country's assurances to the United 
States of equitable and reasonable access to its markets and to 
basic commodity resources; (4) the country's compliance with 
the rules of the World Trade Organization; (5) the degree to 
which the country uses export subsidies or imposes local 
content requirements which distort trade; (6) the degree to 
which the country's trade policies are contributing to regional 
revitalization; (7) the degree to which the country is helping 
its own economic development; (8) whether the country is taking 
steps to protect internationally recognized worker rights; (9) 
the extent to which the country's laws give foreign nationals 
adequate and effective means to secure, exercise, and enforce 
intellectual property rights; (10) the extent to which the 
country prohibits broadcast of U.S. copyrighted material 
without the copyright owner's express consent; (11) whether the 
country is certified as cooperating in anti-narcotics 
trafficking efforts; and (12) the extent to which the country 
is prepared to cooperate with the United States in 
administering the ATPA.
    By presidential proclamations, Colombia and Bolivia have 
been designated as ATPA beneficiary countries since July 22, 
1992. Ecuador has been designated an ATPA beneficiary country 
since April 30, 1993. And, Peru has been designated an ATPA 
beneficiary country since August 31, 1993.
    The ATPA further authorizes the President to withdraw or 
suspend a country's beneficiary country status, or to withdraw, 
suspend, or limit benefits with respect to particular articles, 
as a result of changed circumstances. Such actions may be taken 
only after public notice and an opportunity for comment and a 
public hearing have been provided. Further, the President may 
suspend duty-free treatment under the ATPA pursuant to action 
taken under either the general safeguard provision of the Trade 
Act of 1974 (chapter 1 of title II of such Act) (i.e., when 
increased imports of a good, regardless of origin, are causing 
or threatening serious injury to a U.S. producer of like or 
directly competitive goods), or section 232 of the Trade 
Expansion Act of 1962 (i.e., when it is determined that goods 
are being imported in such quantities or under such 
circumstances as to threaten to impair national security).

                           B. Impact of ATPA

    The ATPA required the United States International Trade 
Commission (``the ITC'') to submit to Congress annual reports 
on the operation of the ATPA, including its impact on U.S. 
industries and consumers. In its most recent report (Andean 
Trade Preference Act: Impact on U.S. Industries and Consumers 
and on Drug Crop Eradication and Crop Substitution, Inv. No. 
332-352, USITC Pub. 3385 (Sep. 2000)) (``ITC Report''), the ITC 
found that the overall impact of ``ATPA-exclusive'' imports 
(i.e., imports not also eligible for preferences under other 
programs, primarily the Generalized System of Preferences 
(``GSP'')) on the U.S. economy and consumers was negligible in 
1999. ITC Report at i.\1\ However, the ITC also identified 
``potentially significant effects on domestic industries 
producing asparagus; chrysanthemums, carnations, anthuriums, 
and orchids; and fresh-cut roses.'' Id. The ITC found the 
program to have had ``a small but positive effect on the 
economies of the ATPA beneficiaries'' and ``a slight but 
positive effect on drug-crop eradication.'' Id.
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    \1\ The ITC found that $1.75 billion in goods entered the United 
States under ATPA in 1999. Of these imports, about $0.9 billion could 
not have received tariff preferences under any program other than ATPA.
---------------------------------------------------------------------------
    Based upon United States Department of Commerce statistics, 
the United States imported $11.1 billion in goods from ATPA 
beneficiary countries in 2000, which represented a 13.1 percent 
increase over 1999 import levels. These imports represented 0.9 
percent of total imports into the United States in 2000. 
Imports from ATPA beneficiary countries represented about 0.97 
percent of total imports into the United States in 1999.
    In 2000, imports from ATPA beneficiary countries entering 
duty-free exclusively under the ATPA program totaled $1.312 
billion. This represented 11.8 percent of total imports from 
ATPA beneficiary countries, and 0.1 percent of total imports 
into the United States from all sources. Total imports entered 
under ATPA in 2000 (including imports that entered at reduced 
rates of duty and imports that could have entered duty-free 
under other programs) amounted to $1.981 billion, representing 
17.8 percent of imports from ATPA beneficiary countries. Walker 
Pollard, ``Renewal and Expansion of ATPA Could Enhance 
Effectiveness of the Program,'' International Economic Review, 
USITC Pub. 3442 at 20 (July/August 2001) (estimate of ITC staff 
from official statistics of the U.S. Department of Commerce).
    In 1999, imports from ATPA beneficiary countries entering 
duty-free exclusively under the ATPA program totaled $939 
million, representing 9.6 percent of total imports from ATPA 
beneficiary countries, and 0.09 percent of total imports into 
the United States from all sources. Total imports entered under 
ATPA in 1999 (including imports that entered at reduced rates 
of duty and imports that could have entered duty-free under 
other programs) amounted to $1.75 billion, representing 17.8 
percent of imports from the ATPA beneficiary countries. ITC 
Report at 34.
    Primary imports from ATPA beneficiary countries have tended 
to be: petroleum products (not eligible for ATPA benefits); 
precious metals, stones, and jewelry; coffee; fresh or dried 
bananas; and shrimp. In 1999, almost 60 percent of imports from 
ATPA beneficiary countries came from Colombia. Imports from 
Peru and Ecuador represented 19 percent each of total imports 
from ATPA beneficiary countries. Imports from Bolivia 
represented 2.3 percent of total imports from ATPA beneficiary 
countries.
    Primary imports receiving duty-free treatment exclusively 
under ATPA have tended to include fresh cut flowers (mostly 
from Colombia); copper cathodes (mostly from Peru); precious 
metals, gemstones, and jewelry; pigments (mostly from 
Colombia); processed tuna other than tuna in airtight 
containers (mostly from Ecuador); zinc products (from Peru); 
and asparagus (from Peru).
    The ITC Report identified certain sectors that have 
benefitted from new investment in the Andean region and that 
might lead to increased exports under the ATPA program. These 
sectors are pigments, sugar cane, candy, gold jewelry, and 
fruit. ITC Report at viii.
    The U.S. trade deficit with the ATPA beneficiary countries 
in 2000 was $4.8 billion, up from $3.6 billion in 1999. The 
2000 deficit represented $11.1 billion in imports and $6.3 
billion in exports, compared with $9.8 billion in imports and 
$6.3 billion in exports in 1999. 1999 was the first year since 
1996 in which the United States had a trade deficit with the 
ATPA beneficiary countries. The trade deficit in 2000 was the 
largest trade deficit the United States has had with these 
countries collectively since the program began. According to 
the ITC, the size of the deficit is attributable, in part, to a 
strong dollar and economic difficulties in the Andean region. 
Notably, U.S. exports of aircraft, motor vehicles and 
electrical machinery to the Andean region dropped by about 40 
percent in 1999. Id. at 7.
    On the subject of drug eradication, the ITC Report found 
that

        [i]ndustries that produce ATPA-related goods provide 
        alternative development opportunities, and although 
        ATPA-related investment has flourished in regions where 
        there is no presence of illicit crops, the program 
        indirectly provides new sources of employment for 
        workers that may otherwise turn to illicit crop-
        producing activities.

Id. at 73-74.
    The report concluded that ``[a]lthough it is difficult to 
illustrate the positive impact of ATPA other than anecdotally, 
the success of eradication and alternative development efforts 
in the Andean region appears to be spreading.'' Id. at 74.
    The ATPA also required the Secretary of Labor to report 
annually to Congress on the impact of ATPA on U.S. labor. The 
most recent such report (based on year 2000 data) reached the 
following conclusion:

          Preferential tariff treatment under the ATPA does not 
        appear to have had an adverse impact on, or have 
        constituted a significant threat to, U.S. employment. 
        While declines in production and possibly employment in 
        some sectors of the cut flower industry (standard 
        carnations, standard and pompon chrysanthemums, and 
        roses) may have been affected to some extent by the 
        tariff preferences granted under the ATPA program, 
        other factors may also have contributed to these 
        production and employment declines.

U.S. Dept. of Labor, Trade and Employment Effects of the Andean 
Trade Preference Act at i (Nov. 2001).

                         C. Action in Committee

    On March 13, 2001, Senator Graham introduced a bill (S. 
525) to extend and expand ATPA. That bill was co-sponsored by 
Senators Biden, Breaux, DeWine, Dodd, Hagel, Kyl, Landrieu, 
Lieberman, Lugar, McCain, Murkowski, Nelson of Florida, Nelson 
of Nebraska, Specter and Thompson. The bill as introduced would 
extend ATPA through September 30, 2005. Its approach to 
expansion of ATPA was largely modeled on the expansion of the 
Caribbean Basin Initiative, enacted in 2000 as Title II of the 
Trade and Development Act of 2000 (Pub. L. No. 106-200).
    S. 525 would extend tariff preferences to most of the 
products excluded from such treatment under current law. For 
most currently excluded products other than apparel, the 
preference consists of a reduction of rate of duty to the rate 
currently imposed on like products from Mexico, with continued 
reductions on the schedule that applies to like products from 
Mexico. For apparel, the preference consists of duty-free 
treatment, subject to certain limitations. With limited 
exceptions, apparel eligible for duty-free treatment under the 
bill must be made from yarns wholly formed in the United 
States. The yarns, in turn, may be knit or woven into fabric in 
either the United States or the beneficiary countries. However, 
the bill places a limit on the quantity of apparel made from 
fabric knit in the beneficiary countries that can be imported 
into the United States duty-free. (Apparel made from fabric 
woven in the beneficiary countries is not eligible for duty-
free treatment under the bill as introduced.)

                               1. Hearing

    On August 3, 2001, the Subcommittee on International Trade 
of the Committee on Finance held a hearing on expansion of the 
Andean Trade Preference Act. The Subcommittee heard testimony 
from Congressman Phil Crane; Deputy U.S. Trade Representative 
Peter Allgeier; Under Secretary of State for Economic, Business 
and Agricultural Affairs, Alan P. Larson; President of ARC 
International, Paul Arcia; President of Dole Fresh Fruit 
International, Richard Harrah; Executive Vice President of the 
American Textile Manufacturers Institute, Carlos Moore; General 
Manager (Retired) of Heinz International, K. Ward Rodgers; and 
Vice President for Law of Defenders of Wildlife, William Snape 
III. Additionally, the Subcommittee received written 
submissions from ATPA beneficiary country governments, trade 
associations, and other interested parties.
    The witnesses generally expressed support for extension and 
expansion of ATPA, although there were some differences over 
which products should be included in the expanded program. 
Ambassador Allgeier observed that, over the past decade, ATPA 
has successfully promoted economic diversification, but that 
about 40 percent of exports from ATPA beneficiary countries 
still face duty upon importation into the United States. He 
urged developing the broadest possible product coverage for a 
renewed ATPA, taking the unique features of the ATPA 
beneficiary country economies into account. Ambassador Allgeier 
further emphasized that a renewed and expanded ATPA should be a 
bridge to integrating the Andean countries into a Free Trade 
Area of the Americas.
    Under Secretary Larson emphasized that the leaders 
currently in place in the Andean countries are committed to 
reforming their economic and political institutions. He 
observed that a renewed and expanded ATPA would bolster their 
efforts.
    Private sector witnesses (as well as statements submitted 
by beneficiary country governments and industry groups) 
underscored the successes of the current ATPA and the likely 
benefits that would flow from its renewal and enhancement. For 
example, Mr. Harrah described the case of fresh cut flowers, 
which have received duty-free treatment under the current ATPA. 
He testified that Dole, through its subsidiary, owns and 
operates 23 flower farms in Colombia and Ecuador, employing 
11,133 workers in Colombia and 1,028 workers in Ecuador. He 
observed that intense competition would make these operations 
difficult to sustain, absent continued duty-free treatment for 
fresh cut flowers.
    Mr. Arcia, whose company ARC International has apparel-
making operations in Colombia, testified that he began losing 
customer orders after enactment last year of the Caribbean 
Basin Trade Preferences Act, which provided duty-free treatment 
to certain apparel products from the Caribbean and Central 
America. Mr. Arcia urged that ATPA be enhanced in order to 
reduce this disparity. He added that, given the structure of 
the apparel industry in the Andean countries, it would not be 
economically meaningful to extend duty preferences to apparel 
made from U.S. fabric only. Due to factors such as higher 
labor, transportation, and security costs, he testified that 
ATPA enhancement should include duty-free treatment for apparel 
made from fabric produced in the ATPA beneficiary countries 
themselves.
    This view was opposed by Mr. Moore of the American Textile 
Manufacturers Institute. Mr. Moore testified that the question 
of whether to include textile and apparel in an enhanced ATPA 
should be viewed in the context of increasing competitive 
pressure on the U.S. textile industry, due to currency 
devaluations in Asia since 1997. He stated that the U.S. 
industry is in crisis, with textile mills closing and jobs 
being cut at an accelerating pace. Mr. Moore stated that a 
duty-free benefit to the Andean countries that includes apparel 
made from regional fabrics and yarns would exacerbate the 
crisis in the U.S. industry.
    Other interested parties drew the International Trade 
Subcommittee's attention to other U.S. industries that are 
concerned about the impact of continued or enhanced duty-free 
treatment to products from the ATPA beneficiary countries. For 
example, the American Farm Bureau Federation submitted a 
statement describing the displacement of U.S. asparagus 
production by increasing imports of asparagus from Peru (which 
enters the United States duty-free under the current ATPA).
    Finally, the Subcommittee heard testimony and received 
statements on the subject of whether to extend trade 
preferences to tuna in airtight containers, a product excluded 
from duty-free treatment under current law. As Mr. Rodgers, 
former General Manager of Heinz North America (owner of the 
Starkist brand of tuna) testified, this question is of 
particular importance to Ecuador. Mr. Rodgers testified that 
Starkist hopes to expand production of its pouched tuna product 
in Ecuador, while continuing to operate tuna processing 
facilities in the U.S. Territory of American Samoa at full 
capacity. He observed that, without duty-free treatment, it 
would be difficult for tuna from Ecuador to compete with tuna 
from Thailand.
    However, other statements submitted for the record differed 
with Mr. Rogers' testimony concerning the likely impact on U.S. 
tuna production of granting duty-free treatment to processed 
tuna from Ecuador. In particular, a statement by Mr. 
Christopher Lischewski, President of Bumble Bee Seafoods, 
argued that ``[g]ranting special duty privileges to Ecuador and 
other Andean nations will divert tuna canning operations away 
from these U.S. plants [in Puerto Rico, California, and 
American Samoa] and result in the loss of thousands of American 
jobs.''

                               2. Markup

    On November 16, 2001, the Senate received from the House of 
Representatives a bill to expand the ATPA (H.R. 3009). That 
bill was referred to the Committee on Finance, which held a 
markup on November 29, 2001. The Committee's mark consisted of 
an amendment in the nature of a substitute to H.R. 3009, 
offered by the Chairman. The amendment in the nature of a 
substitute contained the substance of S. 525, with some 
modifications. In particular, the different categories of 
apparel articles eligible for duty-free treatment were re-
organized to more closely reflect the organization in the bill 
as adopted by the House, and sugars, syrups, and sugar-
containing products subject to over-quota duty rates under 
tariff-rate quotas were excluded from preferential treatment.
    Additionally, the Chairman's amendment in the nature of a 
substitute included a non-ATPA provision related to refunds of 
certain duties charged on imports of wool products in calendar 
year 1999. The refunds at issue originally were provided for in 
section 505 of the Trade and Development Act of 2000 (Pub. L. 
No. 106-200). However, certain documents filed by interested 
parties in connection with that provision were lost in the 
September 11, 2001 attack on the World Trade Center in New 
York, New York. The provision in the Chairman's amendment in 
the nature of a substitute was designed to ensure that parties 
seeking the refunds at issue would not be prejudiced by the 
loss of documents in the September 11 attacks.
    During the markup, three other amendments were adopted by 
the Committee. The first amendment would restrict the quantity 
of tuna in airtight containers eligible for duty-free treatment 
under the expanded ATPA. Further, this amendment would 
condition the trade preference for tuna in airtight containers 
on the tuna's having been harvested by either United States 
vessels or beneficiary country vessels. The amendment defines 
the nationality of a vessel in terms of criteria including 
ownership and crew membership.
    The second amendment adopted by the Committee would waive, 
through July 30, 2002, certain quantitative restrictions on 
duty-free imports of ceiling fans from Thailand. The third 
amendment adopted by the Committee would suspend duties imposed 
on certain steam or other vapor generating boilers used in 
nuclear facilities, for a period from January 1, 2002 through 
December 31, 2006.
    The Chairman's amendment in the nature of a substitute, as 
amended, was adopted by the Committee by voice vote.

                        III. THE COMMITTEE BILL


Section 1. Short title

                              PRESENT LAW

    No provision.

                        EXPLANATION OF PROVISION

    Section 1 provides that the Act may be cited as the 
``Andean Trade Preference Expansion Act.''

                           REASONS FOR CHANGE

    The provision assigns a short-hand title to the bill for 
ease of reference.

                    TITLE I--ANDEAN TRADE PREFERENCE


Section 101. Findings

                              PRESENT LAW

    No provision.

                        EXPLANATION OF PROVISION

    Section 101 contains eight findings of the Congress that 
form the basis for expanding the Andean Trade Preference Act. 
These findings may be summarized as follows:
    (1) Since its enactment in 1991, the ATPA has had a 
mutually beneficial trade impact on the United States and the 
beneficiary countries, leading to increased jobs and export 
opportunities in both the United States and the beneficiary 
countries.
    (2) By promoting legitimate economic development in the 
beneficiary countries, ATPA has contributed significantly to 
counter-narcotics efforts by the United States.
    (3) Notwithstanding the success of ATPA, the beneficiary 
countries remain vulnerable to political and economic 
instability, dangers of the war on drugs, and more intense 
economic competition from other countries.
    (4) Instability in the Andean region threatens the security 
of the United States. This threat is only partially alleviated 
by foreign aid.
    (5) The ATPA represents a tangible commitment by the United 
States to the promotion of prosperity, stability and democracy 
in the beneficiary countries.
    (6) Renewal and expansion of ATPA will support private 
enterprises' decisions to invest in the Andean region, which 
will help to solidify economic and political stability in the 
region.
    (7) Each of the ATPA beneficiary countries is committed to 
establishing a Free Trade Area of the Americas (``FTAA'') by 
2005, as a means of enhancing economic security in the region.
    (8) A temporary enhancement of trade benefits to the ATPA 
countries will stimulate economic activity and thereby support 
the security interests of the United States, the region, and 
the world.

                           REASONS FOR CHANGE

    The Andean Trade Preference Act (19 U.S.C. Sec. Sec. 3201-
06) (``ATPA'') was enacted in 1991 as Title II of Public Law 
Number 102-182, and expired on December 4, 2001. The findings 
of Congress in section 101 of the present bill lay a foundation 
for extending and enhancing trade benefits under ATPA. They 
make the case that ATPA has been largely successful at 
promoting development in the Andean region and encouraging the 
beneficiary countries to shift from drug production and 
trafficking to legitimate economic activities. The program has 
been important not only to the countries themselves, but also 
to the United States, which has benefitted from the economic 
activity generated by ATPA, as well as from the improvement in 
regional stability that ATPA has helped to bring about.
    The success of the program over the past decade is 
precisely the reason not to let it lapse now. Indeed, a number 
of factors that have arisen since 1991 support an expansion of 
ATPA. These factors include intensified economic competition 
from the rest of the world, due to a steady lowering of tariffs 
and other trade barriers and a proliferation of other trade 
preference programs.
    Factors supporting enhancement also include continued 
political and economic instability within the beneficiary 
countries. For example, in a statement submitted to the 
Subcommittee on International Trade at its August 3, 2001 
hearing, representatives of the Government of Colombia 
explained that unemployment in that country has reached an 
unprecedented 20 percent, and coffee, an important staple of 
the national economy, has reached its lowest price in decades. 
Similarly, representatives of the Government of Bolivia 
explained, ``In a country where there is chronic under-
employment and 70% of its population live with less than US$2 a 
day, increased unemployment has resulted in massive social 
unrest, which if unchecked is likely to threaten democracy and 
the rule of law.''
    Because ATPA enhancement should give a boost to growth in 
the beneficiary countries and help to stabilize the economies 
of those countries, it is as much a matter of promoting the 
security interests of the United States as it is a matter of 
preserving and building upon the success of the first ten years 
in helping the region to develop.

Section 102. Temporary provisions

            General rule

                              PRESENT LAW

    The ATPA authorizes the President to proclaim duty-free 
treatment for all eligible articles from any beneficiary 
country in accordance with the provisions of that Act. Under 
the ATPA, Bolivia, Ecuador, Colombia and Peru may be designated 
as beneficiary countries, provided that they meet certain 
eligibility criteria. Under the law as expired on December 4, 
2001, they had been so designated, pursuant to presidential 
proclamations issued in 1992 and 1993.
    Section 204 of the ATPA (19 U.S.C. Sec. 3203) defines an 
eligible article as an article that, subject to certain 
exceptions, (1) is the growth, product, or manufacture of a 
beneficiary country, (2) is imported directly from a 
beneficiary country, and (3) meets certain quantitative 
criteria with respect to materials from and processing 
performed in the beneficiary country.
    Section 204(b) of the ATPA expressly excludes from the 
class of eligible articles eight categories of products, as 
follows:
          (1) textile and apparel articles which are subject to 
        textile agreements;
          (2) certain footwear;
          (3) tuna, prepared or preserved in any manner, in 
        airtight containers;
          (4) petroleum and petroleum products;
          (5) certain watches and watch parts;
          (6) certain handbags, luggage, flat goods, work 
        gloves, and leather apparel;
          (7) certain sugars, syrups and molasses; and
          (8) rum and tafia.
    Further, section 204(c) of the ATPA provides for reductions 
(but not elimination) of duty rates on imports of certain 
handbags, luggage, flat goods, work gloves, and leather apparel 
imported from the ATPA beneficiary countries.

                        EXPLANATION OF PROVISION

    Section 102 of the bill replaces the list of excluded 
products under section 204(b) of the current ATPA with a new 
provision that extends duty preferences to most of those 
products. The new preferences take the form of exceptions to 
the general rule that the excluded products are not eligible 
for duty-free treatment.
    The enhanced preferences are made available to ``ATPEA 
beneficiary countries.'' As discussed below, paragraph (5) of 
section 204(b) of the ATPA as amended by the present bill 
defines ATPEA beneficiary countries as those countries 
previously designated by the President as ``beneficiary 
countries'' (i.e., Bolivia, Colombia, Ecuador, and Peru) which 
subsequently are designated by the President as ``ATPEA 
beneficiary countries,'' based on the President's consideration 
of additional eligibility criteria.
    In the event that the President did not designate a current 
``beneficiary country'' as an ``ATPEA beneficiary country,'' 
that country would remain eligible for ATPA benefits under the 
law as expired on December 4, 2001, but would not be eligible 
for the enhanced benefits provided under the present bill.

                           REASONS FOR CHANGE

    As explained above, the view of the Committee is that 
renewing and enhancing the ATPA to provide duty preferences to 
products excluded under current law will serve several 
important policy purposes. It is expected that enhancement of 
the program will spur further development and diversification 
in the Andean region, cultivate an environment hospitable to 
increased investment by private enterprises, encourage the 
elimination of illegitimate economic activity, and promote 
regional stability.
            Transition period treatment of certain textile and apparel 
                    articles

                              PRESENT LAW

    Under the ATPA, textile and apparel articles generally are 
excluded from duty-free treatment.

                        EXPLANATION OF PROVISION

    Paragraph (2) of section 204(b) of the ATPA as amended by 
section 102 of the present bill extends duty-free treatment to 
certain textile and apparel articles from ATPEA beneficiary 
countries. The provision divides articles eligible for this 
treatment into several different categories and limits duty-
free treatment to a period defined as the ``transition 
period.'' The transition period is defined in paragraph (5) of 
section 204(b) of the ATPA as amended to be the period from 
enactment of the present bill through the earlier of February 
28, 2006 or establishment of a FTAA.
    In general, the different categories of textile and apparel 
articles eligible for duty-free treatment are defined according 
to the origin of the yarn and fabric from which the articles 
are made. Under the first category, apparel sewn or otherwise 
assembled in one or more ATPEA beneficiary countries is 
eligible for duty-free treatment if it is made exclusively from 
one or a combination of several sub-categories of components, 
as follows:
          (1) United States fabric, fabric components, or knit-
        to-shape components, made from yarns wholly formed in 
        the United States;
          (2) A combination of both United States and ATPEA 
        beneficiary country components knit-to-shape from yarns 
        wholly formed in the United States;
          (3) ATPEA beneficiary country fabric, fabric 
        components, or knit-to-shape components, made from 
        yarns wholly formed in one or more ATPEA beneficiary 
        countries, if the constituent fibers are primarily 
        llama, alpaca, or vicuna hair; and
          (4) Fabrics or yarns, regardless of origin, if such 
        fabrics or yarns have been deemed, under the North 
        American Free Trade Agreement, not to be widely 
        available in commercial quantities in the United 
        States. A separate provision of section 204(b) of the 
        ATPA as amended by the present bill sets forth a 
        process for interested parties to petition the 
        President for inclusion of additional yarns and fabrics 
        in the ``short supply'' list. This process includes 
        obtaining advice from the United States International 
        Trade Commission and industry advisory groups, and 
        consultation with the Committee on Finance of the 
        Senate and the Committee on Ways and Means of the House 
        of Representatives.
    An example of an article eligible for duty-free treatment 
under this first category would be a shirt sewn in an ATPEA 
beneficiary country from fabric formed in the United States 
from yarns wholly formed in the United States. Another example 
would be a shirt sewn in an ATPEA beneficiary country from a 
combination of U.S. fabric made from U.S. yarns and fabrics 
from a foreign country, other than an ATPEA beneficiary, 
determined to be in short supply in the United States.
    A second category of apparel articles eligible for duty-
free treatment is apparel articles knit-to-shape (except socks) 
in one or more ATPEA beneficiary countries from yarns wholly 
formed in the United States. To qualify under this category, 
the entire article must be knit-to-shape--as opposed to being 
assembled from components that are themselves knit-to-shape.
    A third category of apparel articles eligible for duty-free 
treatment is apparel articles wholly assembled in one or more 
ATPEA beneficiary countries from fabric or fabric components 
knit, or components knit-to-shape in one or more ATPEA 
beneficiary countries from yarns wholly formed in the United 
States. The quantity of apparel eligible for this benefit is 
subject to an annual cap. The cap is set at 70 million square 
meter equivalents for the one-year period beginning March 1, 
2002. The cap will increase by 16 percent, compounded annually, 
in each succeeding one-year period, through February 28, 2006.
    Thus, the cap applied to this category in each year 
following enactment will be as follows:
          70 million square meter equivalents (``SME'') in the 
        year beginning March 1, 2002;
          81.2 million SME in the year beginning March 1, 2003;
          94.19 million SME in the year beginning March 1, 
        2004; and 109.26 million SME in the year beginning 
        March 1, 2005.
    By way of comparison, in the 12-month period ending in 
September 2001, the United States imported approximately 151.2 
million SME worth of apparel products from the Andean region. 
That number includes apparel entered under the so-called ``807 
program,'' meaning that the apparel is made from fabric cut 
(and possibly, though not necessarily, formed) in the United 
States. Total non-807 imports from the Andean region during the 
same period were 107.4 million SME. Thus, under the present 
bill, the initial cap on the third category of apparel articles 
represents slightly less than half of total apparel imports 
from the Andean region over the past year, and slightly more 
than half of total non-807 apparel imports from the Andean 
region during that period.
    A separate provision makes clear that goods otherwise 
qualifying under the latter category will not be disqualified 
if they happen to contain United States fabric made from United 
States yarn.
    A fourth category of apparel eligible for duty-free 
treatment under the present bill is brassieres that are cut or 
sewn, or otherwise assembled, in one or more ATPEA beneficiary 
countries, or in such countries and the United States. This 
separate category requires that, in the aggregate, brassieres 
manufactured by a given producer claiming duty-free treatment 
for such products contain certain quantities of United States 
fabric. The provision contains special rules for determining 
whether producers meet this aggregate requirement.
    A fifth category of textile and apparel eligible for duty-
free treatment is handloomed, handmade, and folklore articles. 
To qualify under this category, the government of an ATPEA 
beneficiary country must certify particular products as 
handloomed, handmade, or folklore in nature, following 
consultations with the President.
    A final category of textile and apparel goods eligible for 
duty-free treatment is textile luggage assembled in an ATPEA 
beneficiary country from fabric and yarns formed in the United 
States.
    In addition to the foregoing categories, the bill sets 
forth special rules for determining whether particular textile 
and apparel articles qualify for duty-free treatment. For 
example, the bill provides that an apparel article otherwise 
eligible for duty-free treatment will not be disqualified 
simply because it contains zippers, snaps, lace or other 
``findings and trimmings'' of non-U.S., non-ATPEA beneficiary 
country origin, as long as such findings and trimmings do not 
make up more than 25 percent of the cost of the components of 
the assembled product. A similar rule exists for certain 
garment interlinings. Other special rules make clear that an 
otherwise qualifying garment will not be disqualified from 
duty-free treatment simply because it contains de minimis 
quantities of non-U.S., non-ATPEA country yarns, or because it 
contains certain yarns from countries with which the United 
States has free trade agreements.

                           REASONS FOR CHANGE

    It is the view of the Committee that one of the most 
important enhancements of the current ATPA program is to extend 
duty-free treatment to textile and apparel products from the 
beneficiary countries. This is a sector of commercial 
significance to each of the countries, which is excluded from 
benefits under current law. Further, the beneficiary countries 
presently face and will continue to face increasing competitive 
pressures in this sector. This pressure comes in part from the 
extension last year of duty-free treatment to certain apparel 
imports from the Caribbean and Central America, under the 
Caribbean Basin Initiative (``CBI''). An additional source of 
pressure is the impending elimination, in 2005, of the United 
States' and other countries' quotas on imports of textile and 
apparel products under World Trade Organization (``WTO'') 
rules.
    At the same time, the Committee recognizes that other 
factors counsel the establishment of limits on the quantity of 
apparel made from regional fabric that is eligible for duty-
free treatment. Similar limits were placed on apparel eligible 
for duty-free treatment under the CBI. The Committee does not 
wish to inadvertently undercut the recently conferred benefits 
to the CBI countries by giving a more expansive benefit to the 
ATPEA beneficiary countries. Further, the Committee is aware of 
the import-sensitive nature of apparel made from non-U.S. 
fabric. Concern for the state of the import-competing industry 
in the United States is another reason for limiting the 
quantity of apparel made from regional fabric that is eligible 
for duty-free treatment under the present bill.
            Penalties for transshipment

                              PRESENT LAW

    Under present law, a person who provides materially false 
information to the United States Government, or who fails to 
provide material information required by the United States 
Government, in connection with the importation of goods into 
the United States may be liable for civil and criminal 
penalties. Section 1592 of the Tariff Act of 1930 (19 U.S.C. 
Sec. 1592) sets forth penalties for fraud, gross negligence and 
negligence in connection with importation. More generally, 
section 1001 of the United States Criminal Code (18 U.S.C. 
Sec. 1001) sets forth penalties for knowingly and willfully 
making materially false, fictitious or fraudulent statements or 
representations in any matter within the jurisdiction of the 
United States Government.

                        EXPLANATION OF PROVISION

    In amending section 204(b) of the ATPA, section 102 of the 
present bill provides special penalties for transshipment of 
textile and apparel articles from an ATPEA beneficiary country. 
Transshipment is defined as claiming duty-free treatment for 
textile and apparel imports on the basis of materially false 
information. An exporter found to have engaged in such 
transshipment (or a successor of such exporter) shall be denied 
all benefits under the ATPA for a period of two years.
    The bill further provides penalties for an ATPEA 
beneficiary country that fails to cooperate with the United 
States in efforts to prevent transshipment. Where textile and 
apparel articles from such country are subject to quotas on 
importation into the United States consistent with WTO rules, 
the President must reduce the quantity of such articles that 
may be imported into the United States by three times the 
quantity of transshipped articles, to the extent consistent 
with WTO rules.
    Similar anti-transshipment provisions are contained in the 
Carribean Basin Trade Partnership Act (19 U.S.C. 
Sec. 2703(b)(2)(D)).

                           REASONS FOR CHANGE

    The special anti-transshipment provision for textile and 
apparel articles is designed to serve as an additional 
deterrent, beyond what current law provides, to transshipment 
of these products. An additional deterrent is required in part 
because of the import-sensitivity of the articles at issue.
            Bilateral emergency actions

                              PRESENT LAW

    Under present law, the safeguards provisions contained in 
sections 201 to 204 of the Trade Act of 1974 authorize the 
President to provide relief to domestic industries seriously 
injured or threatened with serious injury by increased imports 
of products like or directly competitive with products produced 
by those industries. Relief may take the form of increased 
tariffs, imposition of quotas, or imposition of tariff-rate 
quotas. Further, the North American Free Trade Agreement 
(``NAFTA'') contains a special safeguard for textile and 
apparel products. Under that provision, relief is available to 
an industry seriously injured or threatened with serious injury 
by increased textile and apparel imports from a NAFTA Party as 
the result of reduction or elimination of a duty pursuant to 
NAFTA. Relief may take the form of suspension of tariff 
reductions or reversion of tariff rates to the lesser of (1) 
most-favored-nation tariff rates on the date relief is 
provided, and (2) most-favored-nation tariff rates on the date 
before NAFTA went into effect. Generally, such relief may 
remain in place for not more than three years.

                        EXPLANATION OF PROVISION

    The bill establishes a textile and apparel safeguard 
provision based on the NAFTA textile and apparel safeguard 
provision. A similar provision is contained in the Caribbean 
Basin Trade Partnership Act (19 U.S.C. Sec. 2703(b)(2)(E)).

                           REASONS FOR CHANGE

    The special safeguard for textile and apparel products is 
intended to help ensure against serious injury (or threat 
thereof) to the U.S. textile and apparel industry as a result 
of the elimination of tariffs on like products imported from 
ATPEA beneficiary countries.
            Articles other than textile and apparel articles

                              PRESENT LAW

    As discussed above, seven categories of goods, in addition 
to textile and apparel articles, are excluded from ATPA 
benefits under current law.

                        EXPLANATION OF PROVISION

    With two exceptions, paragraph (3) of section 204(b) of the 
ATPA as amended by the present bill reduces tariff rates on 
currently excluded products to the rates that apply to like 
products imported into the United States from Mexico. These 
rates will continue to be reduced according to the schedule of 
reductions under NAFTA that apply to like products from Mexico. 
(However, if a lower rate or zero duty would otherwise apply 
under other provisions of U.S. law, then such other rate or 
zero duty will apply.)
    The first exception to the latter provision concerns 
sugars, syrups, and sugar-containing products. Such products 
subject to over-quota duty rates under tariff-rate quotas will 
not receive duty-free treatment.
    The second exception concerns tuna prepared or preserved in 
airtight containers. The bill authorizes the President to 
extend duty-free treatment to imports of such goods up to a 
quantitative cap equal in each calendar year to 20 percent of 
the domestic United States tuna pack in the preceding calendar 
year. The bill further requires that tuna eligible for duty-
free treatment under this provision have been harvested by a 
United States vessel or an ATPEA beneficiary country vessel. 
Designation as a United States or ATPEA vessel is determined by 
factors including country of registry, ownership, and 
nationality of the crew, master, and officers.

                           REASONS FOR CHANGE

    The bill provides benefits with respect to currently 
excluded products from ATPEA beneficiary countries in order to 
expand the development opportunities available to these 
countries. Sugars, syrups and sugar-containing products subject 
to tariff-rate quotas remain on the excluded list, due to the 
import-sensitivity of these products in the United States. For 
similar reasons, the Committee adopted an amendment limiting 
the quantity of tuna in airtight containers eligible for duty-
free treatment. Also of concern to the Committee in the latter 
case was the impact of duty-free tuna imports on the tuna 
canning industry in Puerto Rico and American Samoa.
            Customs procedures

                              PRESENT LAW

    No provision.

                        EXPLANATION OF PROVISION

    Paragraph (4) of section 204(b) of the ATPA as amended by 
section 102 of the present bill contains a requirement that 
ATPEA beneficiary countries maintain customs procedures similar 
to those required under NAFTA, to ensure against transshipment. 
The requirement includes establishment of an ATPEA certificate 
of origin to ensure that products for which duty-free treatment 
is claimed are, in fact, entitled to that treatment. The U.S. 
Commissioner of Customs is required to study, and USTR is 
required to report to Congress, on ATPEA countries' cooperation 
in anti-transshipment efforts. Similar provisions are contained 
in the Caribbean Basin Trade Partnership Act (19 U.S.C. 
Sec. 2703(b)(4)).

                           REASONS FOR CHANGE

    The enhancement of benefits provided for under this bill 
increases the importance of guarding against transshipment. As 
benefits increase, so does the risk of parties claiming those 
benefits for goods that are not, in fact, qualifying goods. The 
customs procedures established under this bill will increase 
the barriers to such circumvention.
            Definitions and special rules

                              PRESENT LAW

    Under present law, a country must be designated by the 
President as a ``beneficiary country'' in order to receive 
trade preferences under ATPA. Only Bolivia, Ecuador, Colombia, 
and Peru can be designated as beneficiary countries.
    To attain that designation, each of the countries must meet 
certain mandatory criteria, as follows: (1) the country cannot 
be a communist country; (2) the country cannot have taken 
measures the effect of which is to nationalize, expropriate or 
otherwise seize ownership or control of property owned by U.S. 
citizens or companies, absent the provision of prompt, adequate 
and effective compensation; (3) the country must act in good 
faith to recognize as binding and to enforce arbitral awards in 
favor or U.S. citizens and companies; (4) the country cannot 
give trade preferences to developed countries that have a 
significant adverse effect on U.S. commerce; (5) the country 
must provide adequate and effective protection of intellectual 
property rights; (6) the country must be signatory to a treaty, 
convention, protocol or other agreement regarding the 
extradition of U.S. citizens; and (7) the country must be 
taking steps to afford internationally recognized worker rights 
to workers in the country.
    Of the foregoing criteria, items (1), (2), (3), (5), and 
(7) can be waived for a given country, if the President 
determines and reports to Congress that doing so is in the 
national economic or security interest of the United States.
    Additionally, the ATPA sets forth certain discretionary 
criteria for the President to take into account in deciding 
whether to designate any of the four listed countries as 
beneficiary countries. These criteria are: (1) the country's 
expressed desire to be so designated; (2) economic conditions 
in the country; (3) the country's assurances to the United 
States of equitable and reasonable access to its markets and to 
basic commodity resources; (4) the country's compliance with 
rules of the World Trade Organization; (5) the degree to which 
the country uses export subsidies or imposes local content 
requirements which distort trade; (6) the degree to which the 
country's trade policies are contributing to regional 
revitalization; (7) the degree to which the country is helping 
its own economic development; (8) whether the country is taking 
steps to protect internationally recognized worker rights; (9) 
the extent to which the country's laws give foreign nationals 
adequate and effective means to secure, exercise, and enforce 
intellectual property rights; (10) the extent to which the 
country prohibits broadcast of copyrighted material without the 
copyright owner's express consent; (11) whether the country is 
certified as cooperating in anti-narcotics trafficking efforts; 
and (12) the extent to which the country is prepared to 
cooperate with the United States in administering the ATPA.
    By presidential proclamations, Colombia and Bolivia have 
been designated as ATPA beneficiary countries since July 22, 
1992. Ecuador has been designated an ATPA beneficiary country 
since April 30, 1993. And, Peru has been designated an ATPA 
beneficiary country since August 31, 1993.

                        EXPLANATION OF PROVISION

    The provision defines terms used in section 204(b) of the 
ATPA as amended by section 102 of the present bill. Among other 
terms, the provision defines ``ATPEA beneficiary country.'' 
Enhanced benefits under the bill are available only to 
countries that have been designated by the President as ATPEA 
beneficiary countries.
    The President may designate only those countries previously 
designated as ``beneficiary countries'' under the ATPA as 
expired on December 4, 2001. In determining whether an ATPA 
beneficiary country should receive the enhanced ATPEA 
beneficiary country designation, the President must take into 
account the mandatory and discretionary factors relevant to the 
basic designation under current law, as well as certain 
additional factors, as follows:
          (1) whether the country has demonstrated a commitment 
        to undertake its obligations in the WTO and to 
        participate in negotiations toward a FTAA;
          (2) the extent to which the country provides 
        protection of intellectual property rights consistent 
        with or greater than that required under the WTO 
        Agreement on Trade-Related Aspects of Intellectual 
        Property Rights;
          (3) the extent to which the country provides 
        internationally recognized worker rights;
          (4) whether the country has implemented its 
        commitment to eliminate the worst forms of child labor;
          (5) the extent to which the country cooperates with 
        the United States in counter-narcotics efforts;
          (6) the extent to which the country has taken steps 
        to become a party to and implement the Inter-American 
        Convention Against Corruption; and
          (7) the extent to which the country applies 
        transparent, non-discriminatory, and competitive 
        procedures in government procurement and contributes to 
        international efforts to enhance transparency in 
        government procurement.

                           REASONS FOR CHANGE

    The Committee is of the view that in enhancing the benefits 
available to beneficiary countries, it is reasonable to enhance 
the eligibility criteria that must be met in order to receive 
the new benefits. Further, it is appropriate at this juncture 
for the President to reexamine the criteria that the countries 
had to meet in order to be designated as beneficiary countries 
in the first place.
    The Committee is particularly concerned about credible 
reports that certain countries have fallen short of the 
standards set forth in key eligibility criteria under current 
law. As discussed above, current law requires a beneficiary 
country to act in good faith in recognizing as binding and in 
enforcing arbitral awards in favor of United States citizens 
and companies. 19 U.S.C. Sec. 3202(c)(3). In at least two 
recent cases that have come to the Committee's attention--one 
involving Nortel Networks and another involving Sithe 
Energies--United States companies (or their foreign affiliates 
or subsidiaries) have prevailed in arbitrations against the 
Government of Colombia. However, rather than pay the arbitral 
awards in these cases, the Government has instituted collateral 
proceedings and undertaken other delaying measures.
    During the November 29, 2001 meeting of the Committee to 
consider the present bill, the Chairman asked Deputy United 
States Trade Representative Peter Allgeier how the Office of 
the United States Trade Representative (``USTR'') intended to 
address this issue in its evaluation of Colombia's eligibility 
for ATPEA beneficiary country status. Ambassador Allgeier 
responded, ``We have raised this with the Colombians. 
Specifically, Ambassador Zoellick and Secretary Evans recently 
wrote to President Pastrana to raise these two cases to his 
attention, and our understanding is that he has instructed his 
officials to look into that and to respond to us how they are 
dealing with that. We certainly seek prompt and proper 
settlement of those arbitral awards.''
    The Committee emphasizes the importance of beneficiary 
countries' honoring arbitral awards in favor of United States 
citizens and companies. The Committee strongly urges the 
Government of Colombia to promptly honor its obligations in the 
Nortel and Sithe Energies matters. The Committee further urges 
USTR to take the handling of these cases into account in 
determining Colombia's eligibility for ATPEA beneficiary 
country status.
    The Committee has similar concerns with respect to 
treatment of U.S. businesses by the Government of Peru. In one 
case brought to the Committee's attention, a U.S. company, STM 
Wireless, was the lowest bidder in an international public 
tender by OSIPTEL, a telecommunications agency of the 
Government of Peru. Although STM Wireless was led to believe 
that it had won the contract, a necessary license subsequently 
was issued to another company, despite a court order 
prohibiting the government agency from withdrawing the contract 
to STM Wireless.
    The Committee is aware of other allegations concerning the 
telecommunications sector in Peru, including a complaint by 
Telinfor, S.A. that a local telephone service provider in Peru 
engaged in misconduct in connection with the establishment of a 
pay-per-call service. Of particular concern in this case are 
allegations of conflicts of interest among the members of the 
panel arbitrating the dispute.
    Another case that has come to the Committee's attention 
concerns the Engelhard company of New Jersey. The Committee 
understands that certain assets of this company were 
confiscated by Peru's tax authority under the government of 
Alberto Fujimori, and that these assets have not been returned 
by the current government. The Committee urges the Government 
of Peru to resolve this matter quickly and fairly.
    The Committee urges USTR to closely examine these matters 
in determining whether Peru should be designated as an ATPEA 
beneficiary country.
    Finally, the Committee notes that, under the present bill, 
among the criteria for ATPEA beneficiary country designation is 
whether the country has demonstrated a commitment to undertake 
its obligations under the WTO. Among countries' obligations 
under the WTO are those set forth in the Agreement on 
Implementation of Article VII of the General Agreement on 
Tariffs and Trade 1994 (``the Customs Valuation Agreement''). 
The Customs Valuation Agreement sets forth rules for 
establishing the value of goods on importation, for purposes of 
assessing duties. The ordinary rule is that the customs value 
of a good is the transaction value--i.e., the price actually 
paid or payable when the good is sold for export--with certain 
adjustments provided for in the Agreement. These rules help to 
ensure that countries do not use customs valuation as a 
disguised trade barrier.
    The Andean Community, including Colombia, sets duties on 
imports of 14 basic agricultural products--such as wheat, corn, 
and soybean oil--according to a variable import duty system, 
known as a ``price band'' system. An additional 147 
commodities, considered substitutes or related products, also 
are subject to the price band system. Under this system, 
maximum, minimum, and reference prices for imports are 
determined administratively as the basis for assessing duties.
    The Committee's view is that the price-band system is non-
transparent and easily manipulated as a measure to reduce 
market access for U.S. and other producers. Ordinarily, it 
would not comport with a country's obligations under the 
Customs Valuation Agreement. As developing countries, the 
participants in the Andean Community price band system were 
given until the year 2000 to phase in their obligations under 
the Customs Valuation Agreement.
    In early 2000, Colombia sought an extension of this 
transition period. In agreeing to an extension, the United 
States obtained from Colombia a commitment to seek to de-link 
wet pet food, the only finished product in the price band 
system, from this system. It is the Committee's expectation 
that, in reviewing the eligibility criteria relating to market 
access and WTO commitments, USTR will insist that Colombia 
implement its WTO commitment to pursue the removal of wet pet 
food from the price band tariff system, and to apply the 20 
percent common external tariff to imported pet food.
    In general, the Committee believes it is important for 
Andean governments to provide transparent and non-
discriminatory regulatory procedures in fulfilling their WTO 
obligations. Unfortunately, the Committee knows of instances 
where regulatory policies in Andean countries are opaque, 
unpredictable, and arbitrarily applied. It is the Committee's 
view that Andean countries that seek trade benefits should 
adopt, implement, and apply transparent and non-discriminatory 
regulatory procedures. The development of such procedures would 
help create regulatory stability in the Andean region, and thus 
provide more certainty to U.S. companies that would like to 
invest in these countries.
            Determination regarding retention of designation

                              PRESENT LAW

    Under section 203(e) of the ATPA, the President may 
withdraw or suspend a country's ``beneficiary country'' 
designation, or withdraw, suspend or limit the application of 
duty-free treatment to particular articles of a beneficiary 
country, due to changed circumstances.

                        EXPLANATION OF PROVISION

    Section 102(b) of the present bill amends section 203(e) of 
the ATPA to provide that the President may withdraw or suspend 
a country's ``ATPEA beneficiary country'' designation, or 
withdraw, suspend, or limit the application of enhanced duty-
free treatment as provided under this bill, due to changed 
circumstances. Specifically, unsatisfactory performance under 
the enhanced eligibility criteria constitutes changed 
circumstances that may lead to withdrawal, suspension, or 
limitation of benefits.

                           REASONS FOR CHANGE

    Section 102(b) establishes a provision for withdrawal, 
suspension or limitation of enhanced benefits that parallels 
the provision for withdrawal, suspension or limitation of basic 
benefits under current law.
            Reporting requirements

                              PRESENT LAW

    Section 203(f) of the ATPA required the President to report 
to Congress every three years on operation of the ATPA.

                        EXPLANATION OF PROVISION

    Section 102(c) of the present bill requires USTR to report 
to Congress by December 31, 2002 and every two years thereafter 
on operation of the enhanced ATPA. The report shall include the 
results of a review of countries' performance under the basic 
eligibility criteria set forth in sections 203(c) and (d) of 
the ATPA and under the enhanced eligibility criteria under 
section 204(b)(5)(B) of the ATPA as added by the present bill. 
Before submitting its report, USTR shall request public 
comments on countries' performance under the enhanced 
eligibility criteria.

                           REASONS FOR CHANGE

    The new reporting requirement provided for in the bill is 
designed to facilitate congressional oversight of the enhanced 
ATPA.
            Conforming amendments

                              PRESENT LAW

    No provision.

                        EXPLANATION OF PROVISION

    Section 102(d) of the bill makes certain technical changes 
to the ATPA to conform to the changes described above.

Section 103. Termination

                              PRESENT LAW

    Under present law, duty-free treatment under the ATPA 
terminated 10 years after the date of enactment--that is, on 
December 4, 2001.

                        EXPLANATION OF PROVISION

    Section 103 of the bill amends section 208(b) of the ATPA 
to provide for a termination date of February 28, 2006.

                           REASONS FOR CHANGE

    The termination date in section 103 of the bill is shortly 
after the December 2005 expected date for establishment of a 
FTAA. Terminating the enhanced ATPA on February 28, 2006 will 
facilitate the beneficiary countries' transition to 
participation in the broader FTAA.

                TITLE II--MISCELLANEOUS TRADE PROVISIONS


Section 201. Wool provisions

                              PRESENT LAW

    Title V of the Trade and Development Act of 2000 (Pub. L. 
No. 106-200) included certain tariff relief for the domestic 
tailored clothing and textile industries. The relief was 
largely aimed at reducing the harmful affects of a ``tariff 
inversion''--i.e., a tariff structure that levies higher duties 
on the raw material (such as wool fabric) than on the finished 
goods (such as men's suits). The relief was intended to begin 
redressing an anomaly in NAFTA that has resulted in a greater 
than intended advantage to Canadian exporters of tailored 
clothing. A component of the relief to the U.S. tailored 
clothing and textile industry was a refund of duties paid in 
calendar year 1999, spread out over calendar years 2000, 2001 
and 2002. Pub. L. No. 106-200, Sec. 505.

                        EXPLANATION OF PROVISION

    During its consideration of the present bill, the Committee 
accepted a modification to the Chairman's amendment in the 
nature of a substitute. The modification, entitled the ``Wool 
Manufacturer Payment Clarification and Technical Corrections 
Act,'' amends section 505 of the Trade and Development Act of 
2000. This provision simplifies the process for refunding to 
eligible parties duties paid in 1999. Specifically, it creates 
three special refund pools for each of the affected wool 
articles (fabric, yarn, and fiber and top). Refunds will be 
distributed in three installments--the first by December 31, 
2001, the second by April 15, 2002, and the third by April 15, 
2003. The provision also streamlines the paperwork process, in 
light of the destruction of previously filed claims and 
supporting information in the September 11, 2001 attacks on the 
World Trade Center in New York, New York. Finally, the 
provision identifies all persons eligible for the refunds.

                           REASONS FOR CHANGE

    The tariff refunds authorized by section 505 of the Trade 
and Development Act had not been fully processed when the 
September 11, 2001 attack in New York resulted in the physical 
loss of the initial refund filings made with the Customs 
Service. As of November 29, 2001, the Customs Service was able 
to send refund checks for calendar year 2000 to only one 
textile mill and one apparel company. Other parties eligible 
for refunds likely would experience substantial delays in 
obtaining those refunds, absent legislative relief.

Section 202. Ceiling fans

                              PRESENT LAW

    Under the Generalized System of Preferences (19 U.S.C. 
Sec. Sec. 2461-67) (``GSP'') eligible articles from countries 
designated as beneficiary developing countries may be imported 
into the United States duty-free, up to certain quantitative 
thresholds (known as ``competitive need limitations''). 
Generally, the competitive need limitation for a given article 
is either (1) a quantity, the appraised value of which exceeds 
a statutory threshold (which was $100 million in calendar year 
2001), or (2) a quantity equal to or exceeding 50 percent of 
the appraised value of the total imports of that article into 
the United States during any calendar year. (19 U.S.C. 
Sec. 2463(c)(2)(A)) The President may waive the competitive 
need limitation with respect to a given article based on advice 
from the ITC concerning any adverse effect on a U.S. industry 
and a determination that such a waiver would be in the national 
economic interest. (19 U.S.C. Sec. 2463(d)(1))
    The President has determined that ceiling fans imported 
into the United States from Thailand have passed the applicable 
competitive need limitation. Accordingly, such importations are 
no longer duty-free. It is the Committee's understanding that a 
waiver of the competitive need limitation with respect to 
ceiling fans from Thailand is likely, but that the earliest 
this would happen is the middle of 2002.

                        EXPLANATION OF PROVISION

    Section 202 of the present bill waives the competitive need 
limitation with respect to ceiling fans from Thailand entered, 
or withdrawn from warehouse for consumption, during the period 
beginning 15 days after enactment and ending before July 30, 
2002.

                           REASONS FOR CHANGE

    It is the understanding of the Committee that the President 
is likely to waive the competitive need limitation with respect 
to ceiling fans from Thailand, but that this is unlikely to 
happen until the middle of 2002. Further, it is the Committee's 
understanding that no U.S. industry would be harmed by a waiver 
of the competitive need limitation, and that the waiver would 
benefit certain retailers and consumers in the United States.

Section 203. Certain steam or other vapor generating boilers used in 
        nuclear facilities

                              PRESENT LAW

    Under present law, certain steam or other vapor generating 
boilers used in nuclear facilities imported into the United 
States prior to December 31, 2003 are charged a duty rate of 
4.9 percent ad valorem. This rate took effect pursuant to 
section 1268 of Public Law Number 106-476 (``Tariff Suspension 
and Trade Act of 2000''). Previously, the rate had been 5.2 
percent ad valorem.

                        EXPLANATION OF PROVISION

    Section 203 of the present bill changes the duty rate on 
certain steam or other vapor generating boilers used in nuclear 
facilities to zero for such goods entered, or withdrawn from 
warehouse for consumption, on or after January 1, 2002 and on 
or before December 31, 2006.

                           REASONS FOR CHANGE

    The provision is intended to lower the cost of inputs into 
the operation of nuclear facilities, and thereby lower the cost 
of energy to consumers.

                        IV. CONGRESSIONAL ACTION

    On March 13, 2001, Senator Graham (for himself and others) 
introduced S. 525, a bill to expand trade benefits to certain 
Andean countries, and for other purposes. The bill was read 
twice and referred to the Committee on Finance.
    On August 3, 2001, the Subcommittee on International Trade 
of the Senate Finance Committee held a hearing on expansion of 
the Andean Trade Preference Act.
    On October 3, 2001, Congressman Crane (for himself and 
Congressman Thomas) introduced H.R. 3009, a bill to extend the 
Andean Trade Preference Act, to grant additional trade benefits 
under that Act, and for other purposes. The bill was referred 
to the Committee on Ways and Means. On October 5, 2001, the 
Committee on Ways and Means held a markup and, upon a voice 
vote, ordered reported to the full House an amendment in the 
nature of a substitute to H.R. 3009.
    On November 16, 2001, the House of Representatives agreed 
to H.R. 3009 as amended by a voice vote. The bill was received 
in the Senate that same day and referred to the Committee on 
Finance.
    On November 29, 2001, the Committee on Finance held a 
markup session to consider H.R. 3009. The Chairman offered an 
amendment in the nature of a substitute to H.R. 3009. The 
substance of the amendment in the nature of a substitute was 
the text of S. 525 with certain modifications. Several 
amendments to the amendment in the nature of a substitute were 
accepted by the Committee. The bill as amended was ordered 
favorably reported on the basis of a voice vote, with a quorum 
present, on November 29, 2001.

            V. VOTES OF THE COMMITTEE IN REPORTING THE BILL

    In compliance with paragraph 7(c) of Rule XXVI of the 
Standing Rules of the Senate, the following statements are made 
concerning the roll call votes in the Committee's consideration 
of H.R. 3009.

                      A. Motion to Report the Bill

    H.R. 3009 as amended by the Chairman's amendment in the 
nature of a substitute and as further amended was ordered 
favorably reported by voice vote with a quorum present on 
November 29, 2001.

                         B. Votes on Amendments

    (1) An amendment to provide for the distribution of refunds 
of duties paid in calendar year 1999 on importation of certain 
wool products was included in the Chairman's amendment in the 
nature of a substitute as a modification.
    (2) An amendment by Senator Breaux to limit the quantity of 
tuna in airtight containers from ATPEA beneficiary countries 
eligible for duty-free treatment on entry into the United 
States, and to establish certain other requirements for such 
goods to be eligible for duty-free treatment, passed by a vote 
of 11 ayes and 9 nays.
    Ayes: Baucus, Rockefeller, Daschle (proxy), Breaux, Conrad 
(proxy), Torricelli, Lincoln, Hatch (proxy), Murkowski, Snowe, 
Thomas.
    Nays: Graham, Jeffords, Bingaman, Grassley, Nickles 
(proxy), Gramm, Lott (proxy), Thompson, Kyl.
    (3) An amendment by Senators Kyl and Thompson to extend 
duty-free treatment to certain steam or other vapor generating 
boilers used in nuclear facilities entered into the United 
States, or withdrawn from warehouse for consumption, from 
January 1, 2002 through December 31, 2006 passed by a vote of 
15 ayes and 6 nays.
    Ayes: Conrad (proxy), Graham, Jeffords, Bingaman, 
Torricelli, Lincoln, Grassley, Hatch (proxy), Murkowski, 
Nickles (proxy), Gramm, Lott (proxy), Thompson, Kyl, Thomas.
    Nays: Baucus, Rockefeller, Daschle (proxy), Breaux, Kerry 
(proxy), Snowe.
    (4) An amendment by Senator Thompson to waive, through July 
30, 2002, competitive need limitations on duty-free treatment 
for ceiling fans imported from Thailand was adopted by voice 
vote.

                    VI. BUDGETARY IMPACT OF THE BILL


                A. Budget Authority and Tax Expenditures


                          1. Budget authority

    In accordance with section 308(a)(1) of the Budget Act, the 
Committee states that the Andean Trade Preference Expansion Act 
involves no new or increased budget authority.

                          2. Tax expenditures

    In accordance with section 308(a)(2) of the Budget Act, the 
Committee states that the Andean Trade Preference Expansion Act 
will result in no change in tax expenditures over the period 
fiscal years 2002-2012.

                            B. Cost Estimate

    Due to time constraints, the Congressional Budget Office 
estimate was not included in the report. When received by the 
Committee, it will appear in the Congressional Record at a 
later time.

                VII. REGULATORY IMPACT AND OTHER MATTERS

    In compliance with paragraph 11(b) of Rule XXVI of the 
Standing Rules of the Senate, the Committee states that the 
bill will not significantly regulate any individuals or 
businesses, will not affect the personal privacy of 
individuals, and will result in no significant additional 
paperwork.
    The following information is provided in accordance with 
section 423 of the Unfunded Mandates Reform Act of 1995 (Pub. 
L. No. 104-4). The Committee has reviewed the provisions of 
H.R. 3009 as approved by the Committee on November 29, 2001. In 
accordance with the requirements of Pub. L. No. 104-04, the 
Committee has determined that the bill contains no 
intergovernmental mandates, as defined in the UMRA, and would 
not affect the budgets of state, local or tribal governments.

      VIII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    In compliance with paragraph 12 of Rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

ANDEAN TRADE PREFERENCE ACT

           *       *       *       *       *       *       *


            TITLE II--TRADE PREFERENCE FOR THE ANDEAN REGION

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Andean Trade Preference 
Act''.

SEC. 202. AUTHORITY TO GRANT DUTY-FREE TREATMENT.

    The President may proclaim duty-free treatment (or other 
preferential treatment) for all eligible articles from any 
beneficiary country in accordance with the provisions of this 
title.

SEC. 203. BENEFICIARY COUNTRY.

    (a) Definitions.--For purposes of this title--
          (1) The term ``beneficiary country'' means any 
        country listed in subsection (b)(1) with respect to 
        which there is in effect a proclamation by the 
        President designating such country as a beneficiary 
        country for purposes of this title.
          (2) The term ``entered'' means entered, or withdrawn 
        from warehouse for consumption, in the customs 
        territory of the United States.
          (3) The term ``HTS'' means Harmonized Tariff Schedule 
        of the United States.
          (4) The term ``NAFTA'' means the North American Free 
        Trade Agreement entered into between the United States, 
        Mexico, and Canada on December 17, 1992.
          (5) The terms ``WTO'' and ``WTO member'' have the 
        meanings given those terms in section 2 of the Uruguay 
        Round Agreements Act (19 U.S.C. 3501).

           *       *       *       *       *       *       *

    (e) Withdrawal or Suspension of Designation.--(1)(A) The 
President may--
          [A](i) withdraw or suspend the designation of any 
        country as a beneficiary country, or
          [B](ii) withdraw, suspend, or limit the application 
        of duty-free if, after such designation, the President 
        determines that as a result of changed circumstances 
        such a country should be barred from designation as a 
        beneficiary country.
    (B) The President may, after the requirements of paragraph 
(2) have been met--
          (i) withdraw or suspend the designation of any 
        country as an ATPEA beneficiary country; or
          (ii) withdraw, suspend, or limit the application of 
        preferential treatment under section 204(b) (2) and (3) 
        to any article of any country,
if, after such designation, the President determines that, as a 
result of changed circumstances, the performance of such 
country is not satisfactory under the criteria set forth in 
section 204(b)(5)(B).
    (2)(A) The President shall publish in the Federal Register 
notice of the action the President proposes to take under 
paragraph (1) at least 30 days before taking such action.
    (B) The United States Trade Representative shall, within 
the 30-day period beginning on the date on which the President 
publishes under subparagraph (A) notice of proposed action--
          (i) accept written comments from the public regarding 
        such proposed action.
          (ii) hold a public hearing on such proposed action, 
        and
          (iii) publish in the Federal Register--
                  (I) notice of the time and place of such 
                hearing prior to the hearing, and
                  (II) the time and place at which such written 
                comments will be accepted.
    (3) If preferential treatment under section 204(b) (2) and 
(3) is withdrawn, suspended, or limited with respect to an 
ATPEA beneficiary country, such country shall not be deemed to 
be a ``party'' for the purposes of applying section 
204(b)(5)(C) to imports of articles for which preferential 
treatment has been withdrawn, suspended, or limited with 
respect to such country.
    [(f) Report.--On or before the 3rd, 6th, and 9th 
anniversaries of the date of the enactment of this title, the 
President shall submit to the Congress a complete report 
regarding the operation of this title, including the results of 
a general review of beneficiary countries based on the 
considerations described in subsection (c) and (d). In 
reporting on the considerations described in subsection 
(d)(11), the President shall report any evidence that the crop 
eradication and crop substitution efforts of the beneficiary 
are directly related to the effects of this title.]
    (f) Reporting Requirements.--
          (1) In general.--Not later than December 31, 2002, 
        and every 2 years thereafter during the period this 
        title is in effect, the United States Trade 
        Representative shall submit to Congress a report 
        regarding the operation of this title, including--
                  (A) with respect to subsections (c) and (d), 
                the results of a general review of beneficiary 
                countries based on the considerations described 
                in such subsections; and
                  (B) the performance of each beneficiary 
                country or ATPEA beneficiary country, as the 
                case may be, under the criteria set forth in 
                section 204(b)(5)(B).
          (2) Public comment.--Before submitting the report 
        described in paragraph (1), the United States Trade 
        Representative shall publish a notice in the Federal 
        Register requesting public comments on whether 
        beneficiary countries are meeting the criteria listed 
        in section 204(b)(5)(B).

SEC. 204. ELIGIBLE ARTICLES.

    (a) In General.--(1) Unless otherwise excluded from 
eligibility (or otherwise provided for) by this title, the 
duty-free treatment (or preferential treatment) provided under 
this title shall apply to any article which is the growth, 
product, or manufacture of a beneficiary country if--

           *       *       *       *       *       *       *

    [(b) Exceptions to Duty-Free Treatment.--The duty free 
treatment provided under this title shall not apply to--
          [(1) textile and apparel articles which are subject 
        to textile agreements;
          [(2) footwear not designated at the time of the 
        effective date of this Act as eligible for the purpose 
        of the generalized system of preferences under title V 
        of the Trade Act of 1974;
          [(3) tuna, prepared or preserved in any manner, in 
        airtight containers;
          [(4) petroleum, or any product derived from 
        petroleum, provided for in headings 2709 and 2710 of 
        the HTS;
          [(5) watches and watch parts (including, but not 
        limited to, mechanical, quartz digital or quartz 
        analog, if such watches or watch parts contain any 
        material which is the product of any country with 
        respect to which HTS column 2 rates of duty apply;
          [(6) articles to which reduced rates of duty apply 
        under subsection (c).
          [(7) sugars, syrups, and molasses classified in 
        subheadings 1701.11.03, 1701.12.02, 1701.99.02, 
        1702.90.32, 1806.10.42, and 2106.90.12 of the HTS; or
          [(8) rum and tafia classified in subheading 
        2208.40.00 of the HTS.]
  (b) Import-Sensitive Articles.--
          (1) In general.--Subject to paragraphs (2) through 
        (5), the duty-free treatment provided under this title 
        does not apply to--
                  ``(A) textile and apparel articles which were 
                not eligible articles for purposes of this 
                title on January 1, 1994, as this title was in 
                effect on that date;
                  (B) footwear not designated at the time of 
                the effective date of this title as eligible 
                articles for the purpose of the generalized 
                system of preferences under title V of the 
                Trade Act of 1974;
                  (C) tuna, prepared or preserved in any 
                manner, in airtight containers;
                  (D) petroleum, or any product derived from 
                petroleum, provided for in headings 2709 and 
                2710 of the HTS;
                  (E) watches and watch parts (including cases, 
                bracelets, and straps), of whatever type 
                including, but not limited to, mechanical, 
                quartz digital, or quartz analog, if such 
                watches or watch parts contain any material 
                which is the product of any country with 
                respect to which HTS column 2 rates of duty 
                apply;
                  (F) articles to which reduced rates of duty 
                apply under subsection (c);
                  (G) sugars, syrups, and sugar containing 
                products subject to tariff-rate quotas; or
                  (H) rum and tafia classified in subheading 
                2208.40 of the HTS.
          (2) Transition period treatment of certain textile 
        and apparel articles.--
                  (A) Articles covered.--During the transition 
                period, the preferential treatment described in 
                subparagraph (B) shall apply to the following 
                articles:
                          (i) Apparel articles assembled from 
                        products of the united states and atpea 
                        beneficiary countries or products not 
                        available in commercial quantities.--
                        Apparel articles sewn or otherwise 
                        assembled in 1 or more ATPEA 
                        beneficiary countries, or the United 
                        States, or both, exclusively from any 
                        one or any combination of the 
                        following:
                                  (I) Fabrics or fabric 
                                components formed, or 
                                components knit-to-shape, in 
                                the United States, from yarns 
                                wholly formed in the United 
                                States (including fabrics not 
                                formed from yarns, if such 
                                fabrics are classifiable under 
                                heading 5602 or 5603 of the HTS 
                                and are formed in the United 
                                States), provided that apparel 
                                articles sewn or otherwise 
                                assembled from materials 
                                described in this subclause are 
                                assembled with thread formed in 
                                the United States.
                                  (II) Fabric components knit-
                                to-shape in the United States 
                                from yarns wholly formed in the 
                                United States and fabric 
                                components knit-to-shape in 1 
                                or more ATPEA beneficiary 
                                countries from yarns wholly 
                                formed in the United States.
                                  (III) Fabrics or fabric 
                                components formed or components 
                                knit-to-shape, in 1 or more 
                                ATPEA beneficiary countries, 
                                from yarns wholly formed in 1 
                                or more ATPEA beneficiary 
                                countries, if such fabrics 
                                (including fabrics not formed 
                                from yarns, if such fabrics are 
                                classifiable under heading 5602 
                                or 5603 of the HTS and are 
                                formed in 1 or more ATPEA 
                                beneficiary countries) or 
                                components are in chief weight 
                                of llama, alpaca, or vicuna.
                                  (IV) Fabrics or yarns that 
                                are not formed in the United 
                                States or in 1 or more ATPEA 
                                beneficiary countries, to the 
                                extent that apparel articles of 
                                such fabrics or yarns would be 
                                eligible for preferential 
                                treatment, without regard to 
                                the source of the fabrics or 
                                yarns, under Annex 401 of the 
                                NAFTA.
                          (ii) Knit-to-shape apparel 
                        articles.--Apparel articles knit-to-
                        shape (other than socks provided for in 
                        heading 6115 of the HTS) in 1 or more 
                        ATPEA beneficiary countries from yarns 
                        wholly formed in the United States.
                          (iii) Regional fabric.--
                                  (I) General rule.--Knit 
                                apparel articles wholly 
                                assembled in 1 or more ATPEA 
                                beneficiary countries 
                                exclusively from fabric formed, 
                                or fabric components formed, or 
                                components knit-to-shape, or 
                                any combination thereof, in 1 
                                or more ATPEA beneficiary 
                                countries from yarns wholly 
                                formed in the United States, in 
                                an amount not exceeding the 
                                amount set forth in subclause 
                                (II).
                                  (II) Limitation.--The amount 
                                referred to in subclause (I) is 
                                70,000,000 square meter 
                                equivalents during the 1-year 
                                period beginning on March 1, 
                                2002, increased by 16 percent, 
                                compounded annually, in each 
                                succeeding 1-year period 
                                through February 28, 2006.
                          (iv) Certain other apparel 
                        articles.--
                                  (I) General rule.--Subject to 
                                subclause (II), any apparel 
                                article classifiable under 
                                subheading 6212.10 of the HTS, 
                                if the article is both cut and 
                                sewn or otherwise assembled in 
                                the United States, or one or 
                                more of the ATPEA beneficiary 
                                countries, or both.
                                  (II) Limitation.--During the 
                                1-year period beginning on 
                                March 1, 2003, and during each 
                                of the 2 succeeding 1-year 
                                periods, apparel articles 
                                described in subclause (I) of a 
                                producer or an entity 
                                controlling production shall be 
                                eligible for preferential 
                                treatment under subparagraph 
                                (B) only if the aggregate cost 
                                of fabric components formed in 
                                the United States that are used 
                                in the production of all such 
                                articles of that producer or 
                                entity that are entered during 
                                the preceding 1-year period is 
                                at least 75 percent of the 
                                aggregate declared customs 
                                value of the fabric contained 
                                in all such articles of that 
                                producer or entity that are 
                                entered during the preceding 1-
                                year period.
                                  (III) Development of 
                                procedure to ensure 
                                compliance.--The United States 
                                Customs Service shall develop 
                                and implement methods and 
                                procedures to ensure ongoing 
                                compliance with the requirement 
                                set forth in subclause (II). If 
                                the Customs Service finds that 
                                a producer or an entity 
                                controlling production has not 
                                satisfied such requirement in a 
                                1-year period, then apparel 
                                articles described in subclause 
                                (I) of that producer or entity 
                                shall be ineligible for 
                                preferential treatment under 
                                subparagraph (B) during any 
                                succeeding 1-year period until 
                                the aggregate cost of fabric 
                                components formed in the United 
                                States used in the production 
                                of such articles of that 
                                producer or entity that are 
                                entered during the preceding 1-
                                year period is at least 85 
                                percent of the aggregate 
                                declared customs value of the 
                                fabric contained in all such 
                                articles of that producer or 
                                entity that are entered during 
                                the preceding 1-year period.
                          (v) Apparel articles assembled from 
                        fabrics or yarn not widely available in 
                        commercial quantities.--At the request 
                        of any interested party, the President 
                        is authorized to proclaim additional 
                        fabrics and yarn as eligible for 
                        preferential treatment under clause 
                        (i)(IV) if--
                                  (I) the President determines 
                                that such fabrics or yarn 
                                cannot be supplied by the 
                                domestic industry in commercial 
                                quantities in a timely manner;
                                  (II) the President has 
                                obtained advice regarding the 
                                proposed action from the 
                                appropriate advisory committee 
                                established under section 135 
                                of the Trade Act of 1974 (19 
                                U.S.C. 2155) and the United 
                                States International Trade 
                                Commission;
                                  (III) within 60 days after 
                                the request, the President has 
                                submitted a report to the 
                                Committee on Ways and Means of 
                                the House of Representatives 
                                and the Committee on Finance of 
                                the Senate that sets forth the 
                                action proposed to be 
                                proclaimed and the reasons for 
                                such actions, and the advice 
                                obtained under subclause (II);
                                  (IV) a period of 60 calendar 
                                days, beginning with the first 
                                day on which the President has 
                                met the requirements of 
                                subclause (III), has expired; 
                                and
                                  (V) the President has 
                                consulted with such committees 
                                regarding the proposed action 
                                during the period referred to 
                                in subclause (III).
                          (vi) Handloomed, handmade, and 
                        folklore articles.--A handloomed, 
                        handmade, or folklore article of an 
                        ATPEA beneficiary country identified 
                        under subparagraph (C) that is 
                        certified as such by the competent 
                        authority of such beneficiary country.
                          (vii) Special rules.--
                                  (I) Exception for findings 
                                and trimmings.--(aa) An article 
                                otherwise eligible for 
                                preferential treatment under 
                                this paragraph shall not be 
                                ineligible for such treatment 
                                because the article contains 
                                findings or trimmings of 
                                foreign origin, if such 
                                findings and trimmings do not 
                                exceed 25 percent of the cost 
                                of the components of the 
                                assembled product. Examples of 
                                findings and trimmings are 
                                sewing thread, hooks and eyes, 
                                snaps, buttons, `bow buds', 
                                decorative lace, trim, elastic 
                                strips, zippers, including 
                                zipper tapes and labels, and 
                                other similar products. Elastic 
                                strips are considered findings 
                                or trimmings only if they are 
                                each less than 1 inch in width 
                                and are used in the production 
                                of brassieres.
                                  (bb) In the case of an 
                                article described in clause 
                                (i)(I) of this subparagraph, 
                                sewing thread shall not be 
                                treated as findings or 
                                trimmings under this subclause.
                                  (II) Certain interlinings.--
                                (aa) An article otherwise 
                                eligible for preferential 
                                treatment under this paragraph 
                                shall not be ineligible for 
                                such treatment because the 
                                article contains certain 
                                interlinings of foreign origin, 
                                if the value of such 
                                interlinings (and any findings 
                                and trimmings) does not exceed 
                                25 percent of the cost of the 
                                components of the assembled 
                                article.
                                  (bb) Interlinings eligible 
                                for the treatment described in 
                                division (aa) include only a 
                                chest type plate, ``hymo'' 
                                piece, or ``sleeve header'', of 
                                woven or weft-inserted warp 
                                knit construction and of coarse 
                                animal hair or man-made 
                                filaments.
                                  (cc) The treatment described 
                                in this subclause shall 
                                terminate if the President 
                                makes a determination that 
                                United States manufacturers are 
                                producing such interlinings in 
                                the United States in commercial 
                                quantities.
                                  (III) De minimis rule.--An 
                                article that would otherwise be 
                                ineligible for preferential 
                                treatment under this paragraph 
                                because the article contains 
                                yarns not wholly formed in the 
                                United States or in 1 or more 
                                ATPEA beneficiary countries 
                                shall not be ineligible for 
                                such treatment if the total 
                                weight of all such yarns is not 
                                more than 7 percent of the 
                                total weight of the good. 
                                Notwithstanding the preceding 
                                sentence, an apparel article 
                                containing elastomeric yarns 
                                shall be eligible for 
                                preferential treatment under 
                                this paragraph only if such 
                                yarns are wholly formed in the 
                                United States.
                                  (IV) Special origin rule.--An 
                                article otherwise eligible for 
                                preferential treatment under 
                                clause (i) of this subparagraph 
                                shall not be ineligible for 
                                such treatment because the 
                                article contains nylon filament 
                                yarn (other than elastomeric 
                                yarn) that is classifiable 
                                under subheading 5402.10.30, 
                                5402.10.60, 5402.31.30, 
                                5402.31.60, 5402.32.30, 
                                5402.32.60, 5402.41.10, 
                                5402.41.90, 5402.51.00, or 
                                5402.61.00 of the HTS duty-free 
                                from a country that is a party 
                                to an agreement with the United 
                                States establishing a free 
                                trade area, which entered into 
                                force before January 1, 1995.
                                  (V) Clarification of certain 
                                knit apparel articles.--
                                Notwithstanding any other 
                                provision of law, an article 
                                otherwise eligible for 
                                preferential treatment under 
                                clause (iii)(I) of this 
                                subparagraph, shall not be 
                                ineligible for such treatment 
                                because the article, or a 
                                component thereof, contains 
                                fabric formed in the United 
                                States from yarns wholly formed 
                                in the United States.
                          (viii) Textile luggage.--Textile 
                        luggage--
                                  (I) assembled in an ATPEA 
                                beneficiary country from fabric 
                                wholly formed and cut in the 
                                United States, from yarns 
                                wholly formed in the United 
                                States, that is entered under 
                                subheading 9802.00.80 of the 
                                HTS; or
                                  (II) assembled from fabric 
                                cut in an ATPEA beneficiary 
                                country from fabric wholly 
                                formed in the United States 
                                from yarns wholly formed in the 
                                United States.
                  (B) Preferential treatment.--Except as 
                provided in subparagraph (E), during the 
                transition period, the articles to which 
                subparagraph (A) applies shall enter the United 
                States free of duty and free of any 
                quantitative restrictions, limitations, or 
                consultation levels.
                  (C) Handloomed, handmade, and folklore 
                articles.--For purposes of subparagraph 
                (A)(vi), the President shall consult with 
                representatives of the ATPEA beneficiary 
                countries concerned for the purpose of 
                identifying particular textile and apparel 
                goods that are mutually agreed upon as being 
                handloomed, handmade, or folklore goods of a 
                kind described in section 2.3(a), (b), or (c) 
                of the Annex or Appendix 3.1.B.11 of the Annex.
                  (D) Penalties for transshipments.--
                          (i) Penalties for exporters.--If the 
                        President determines, based on 
                        sufficient evidence, that an exporter 
                        has engaged in transshipment with 
                        respect to textile or apparel articles 
                        from an ATPEA beneficiary country, then 
                        the President shall deny all benefits 
                        under this title to such exporter, and 
                        any successor of such exporter, for a 
                        period of 2 years.
                          (ii) Penalties for countries.--
                        Whenever the President finds, based on 
                        sufficient evidence, that transshipment 
                        has occurred, the President shall 
                        request that the ATPEA beneficiary 
                        country or countries through whose 
                        territory the transshipment has 
                        occurred take all necessary and 
                        appropriate actions to prevent such 
                        transshipment. If the President 
                        determines that a country is not taking 
                        such actions, the President shall 
                        reduce the quantities of textile and 
                        apparel articles that may be imported 
                        into the United States from such 
                        country by the quantity of the 
                        transshipped articles multiplied by 3, 
                        to the extent consistent with the 
                        obligations of the United States under 
                        the WTO.
                          (iii) Transshipment described.--
                        Transshipment within the meaning of 
                        this subparagraph has occurred when 
                        preferential treatment under 
                        subparagraph (B) has been claimed for a 
                        textile or apparel article on the basis 
                        of material false information 
                        concerning the country of origin, 
                        manufacture, processing, or assembly of 
                        the article or any of its components. 
                        For purposes of this clause, false 
                        information is material if disclosure 
                        of the true information would mean or 
                        would have meant that the article is or 
                        was ineligible for preferential 
                        treatment under subparagraph (B).
                  (E) Bilateral emergency actions.--
                          (i) In general.--The President may 
                        take bilateral emergency tariff actions 
                        of a kind described in section 4 of the 
                        Annex with respect to any apparel 
                        article imported from an ATPEA 
                        beneficiary country if the application 
                        of tariff treatment under subparagraph 
                        (B) to such article results in 
                        conditions that would be cause for the 
                        taking of such actions under such 
                        section 4 with respect to a like 
                        article described in the same 8-digit 
                        subheading of the HTS that is imported 
                        from Mexico.
                          (ii) Rules relating to bilateral 
                        emergency action.--For purposes of 
                        applying bilateral emergency action 
                        under this subparagraph--
                                  (I) the requirements of 
                                paragraph (5) of section 4 of 
                                the Annex (relating to 
                                providing compensation) shall 
                                not apply;
                                  (II) the term ``transition 
                                period'' in section 4 of the 
                                Annex shall have the meaning 
                                given that term in paragraph 
                                (5)(D) of this subsection; and
                                  (III) the requirements to 
                                consult specified in section 4 
                                of the Annex shall be treated 
                                as satisfied if the President 
                                requests consultations with the 
                                ATPEA beneficiary country in 
                                question and the country does 
                                not agree to consult within the 
                                time period specified under 
                                section 4.
          (3) Transition period treatment of certain other 
        articles originating in beneficiary countries.--
                  (A) Equivalent tariff treatment.--
                          (i) In general.--Subject to clause 
                        (ii), the tariff treatment accorded at 
                        any time during the transition period 
                        to any article referred to in any of 
                        subparagraphs (B), (D) through (F), or 
                        (H) of paragraph (1) that is an ATPEA 
                        originating good shall be identical to 
                        the tariff treatment that is accorded 
                        at such time under Annex 302.2 of the 
                        NAFTA to an article described in the 
                        same 8-digit subheading of the HTS that 
                        is a good of Mexico and is imported 
                        into the United States.
                          (ii) Exception.--Clause (i) does not 
                        apply to any article accorded duty-free 
                        treatment under U.S. Note 2(b) to 
                        subchapter II of chapter 98 of the HTS.
                  (B) Relationship to subsection (c) duty 
                reductions.--If at any time during the 
                transition period the rate of duty that would 
                (but for action taken under subparagraph (A)(i) 
                in regard to such period) apply with respect to 
                any article under subsection (c) is a rate of 
                duty that is lower than the rate of duty 
                resulting from such action, then such lower 
                rate of duty shall be applied for the purposes 
                of implementing such action.
                  (C) Special rule for sugars, syrups, and 
                sugar containing products.--Duty-free treatment 
                under this Act shall not be extended to sugars, 
                syrups, and sugar-containing products subject 
                to over-quota duty rates under applicable 
                tariff-rate quotas.
                  (D) Special rule for certain tuna products.--
                          (i) In general.--The President may 
                        proclaim duty-free treatment under this 
                        Act for tuna that is harvested by 
                        United States vessels or ATPEA 
                        beneficiary country vessels, and is 
                        prepared or preserved in any manner, in 
                        airtight containers in an ATPEA 
                        beneficiary country. Such duty-free 
                        treatment may be proclaimed in any 
                        calendar year for a quantity of such 
                        tuna that does not exceed 20 percent of 
                        the domestic United States tuna pack in 
                        the preceding calendar year. As used in 
                        the preceding sentence, the term ``tuna 
                        pack'' means tuna pack as defined by 
                        the National Marine Fisheries Service 
                        of the United States Department of 
                        Commerce in the purposes of subheading 
                        1604.14.20 of the HTS as in effect on 
                        the date of enactment of the Andean 
                        Trade Preference Expansion Act.
                          (ii) United States vessel.--For 
                        purposes of this subparagraph, a 
                        ``United States vessel'' is a vessel 
                        having a certificate of documentation 
                        with a fishery endorsement under 
                        chapter 121 of title 46, United States 
                        Code.
                          (iii) ATPEA vessel.--For purposes of 
                        this subparagraph, an ``ATPEA vessel'' 
                        is a vessel--
                                  (I) which is registered or 
                                recorded in an ATPEA 
                                beneficiary country;
                                  (II) which sails under the 
                                flag of an ATPEA beneficiary 
                                country;
                                  (III) which is at least 75 
                                percent owned by nationals of 
                                an ATPEA beneficiary country or 
                                by a company having its 
                                principal place of business in 
                                an ATPEA beneficiary country, 
                                of which the manager or 
                                managers, chairman of the board 
                                of directors or of the 
                                supervisory board, and the 
                                majority of the members of such 
                                boards are nationals of an 
                                ATPEA beneficiary country and 
                                of which, in the case of a 
                                company, at least 50 percent of 
                                the capital is owned by an 
                                ATPEA beneficiary country or by 
                                public bodies or nationals of 
                                an ATPEA beneficiary country;
                                  (IV) of which the master and 
                                officers are nationals of an 
                                ATPEA beneficiary country; and
                                  (V) of which at least 75 
                                percent of the crew are 
                                nationals of an ATPEA 
                                beneficiary country.
          (4) Customs procedures.--
                  (A) In general.--
                          (i) Regulations.--Any importer that 
                        claims preferential treatment under 
                        paragraph (2) or (3) shall comply with 
                        customs procedures similar in all 
                        material respects to the requirements 
                        of Article 502(1) of the NAFTA as 
                        implemented pursuant to United States 
                        law, in accordance with regulations 
                        promulgated by the Secretary of the 
                        Treasury.
                          (ii) Determination.--
                                  (I) In general.--In order to 
                                qualify for the preferential 
                                treatment under paragraph (2) 
                                or (3) and for a Certificate of 
                                Origin to be valid with respect 
                                to any article for which such 
                                treatment is claimed, there 
                                shall be in effect a 
                                determination by the President 
                                that each country described in 
                                subclause (II)--
                                          (aa) has implemented 
                                        and follows; or
                                          (bb) is making 
                                        substantial progress 
                                        toward implementing and 
                                        following, procedures 
                                        and requirements 
                                        similar in all material 
                                        respects to the 
                                        relevant procedures and 
                                        requirements under 
                                        chapter 5 of the NAFTA.
                                  (II) Country described.--A 
                                country is described in this 
                                subclause if it is an ATPEA 
                                beneficiary country--
                                          (aa) from which the 
                                        article is exported; or
                                          (bb) in which 
                                        materials used in the 
                                        production of the 
                                        article originate or in 
                                        which the article or 
                                        such materials undergo 
                                        production that 
                                        contributes to a claim 
                                        that the article is 
                                        eligible for 
                                        preferential treatment 
                                        under paragraph (2) or 
                                        (3).
                  (B) Certificate of origin.--The Certificate 
                of Origin that otherwise would be required 
                pursuant to the provisions of subparagraph (A) 
                shall not be required in the case of an article 
                imported under paragraph (2) or (3) if such 
                Certificate of Origin would not be required 
                under Article 503 of the NAFTA (as implemented 
                pursuant to United States law), if the article 
                were imported from Mexico.
                  (C) Report by ustr on cooperation of other 
                countries concerning circumvention.--The United 
                States Commissioner of Customs shall conduct a 
                study analyzing the extent to which each ATPEA 
                beneficiary country--
                          (i) has cooperated fully with the 
                        United States, consistent with its 
                        domestic laws and procedures, in 
                        instances of circumvention or alleged 
                        circumvention of existing quotas on 
                        imports of textile and apparel goods, 
                        to establish necessary relevant facts 
                        in the places of import, export, and, 
                        where applicable, transshipment, 
                        including investigation of 
                        circumvention practices, exchanges of 
                        documents, correspondence, reports, and 
                        other relevant information, to the 
                        extent such information is available;
                          (ii) has taken appropriate measures, 
                        consistent with its domestic laws and 
                        procedures, against exporters and 
                        importers involved in instances of 
                        false declaration concerning fiber 
                        content, quantities, description, 
                        classification, or origin of textile 
                        and apparel goods; and
                          (iii) has penalized the individuals 
                        and entities involved in any such 
                        circumvention, consistent with its 
                        domestic laws and procedures, and has 
                        worked closely to seek the cooperation 
                        of any third country to prevent such 
                        circumvention from taking place in that 
                        third country.
                The Trade Representative shall submit to 
                Congress, not later than October 1, 2002, a 
                report on the study conducted under this 
                subparagraph.
          (5) Definitions and special rules.--For purposes of 
        this subsection--
                  (A) Annex.--The term ``the Annex'' means 
                Annex 300-B of the NAFTA.
                  (B) ATPEA beneficiary country.--The term 
                ``ATPEA beneficiary country'' means any 
                ``beneficiary country'', as defined in section 
                203(a)(1) of this title, which the President 
                designates as an ATPEA beneficiary country, 
                taking into account the criteria contained in 
                subsections (c) and (d) of section 203 and 
                other appropriate criteria, including the 
                following:
                          (i) Whether the beneficiary country 
                        has demonstrated a commitment to--
                                  (I) undertake its obligations 
                                under the WTO, including those 
                                agreements listed in section 
                                101(d) of the Uruguay Round 
                                Agreements Act, on or ahead of 
                                schedule; and
                                  (II) participate in 
                                negotiations toward the 
                                completion of the FTAA or 
                                another free trade agreement.
                          (ii) The extent to which the country 
                        provides protection of intellectual 
                        property rights consistent with or 
                        greater than the protection afforded 
                        under the Agreement on Trade-Related 
                        Aspects of Intellectual Property Rights 
                        described in section 101(d)(15) of the 
                        Uruguay Round Agreements Act.
                          (iii) The extent to which the country 
                        provides internationally recognized 
                        worker rights, including--
                                  (I) the right of association;
                                  (II) the right to organize 
                                and bargain collectively;
                                  (III) a prohibition on the 
                                use of any form of forced or 
                                compulsory labor;
                                  (IV) a minimum age for the 
                                employment of children; and
                                  (V) acceptable conditions of 
                                work with respect to minimum 
                                wages, hours of work, and 
                                occupational safety and health;
                          (iv) Whether the country has 
                        implemented its commitments to 
                        eliminate the worst forms of child 
                        labor, as defined in section 507(6) of 
                        the Trade Act of 1974.
                          (v) The extent to which the country 
                        has met the counter-narcotics 
                        certification criteria set forth in 
                        section 490 of the Foreign Assistance 
                        Act of 1961 (22 U.S.C. 2291j) for 
                        eligibility for United States 
                        assistance.
                          (vi) The extent to which the country 
                        has taken steps to become a party to 
                        and implements the Inter-American 
                        Convention Against Corruption.
                          (vii) The extent to which the 
                        country--
                                  (I) applies transparent, 
                                nondiscriminatory, and 
                                competitive procedures in 
                                government procurement 
                                equivalent to those contained 
                                in the Agreement on Government 
                                Procurement described in 
                                section 101(d)(17) of the 
                                Uruguay Round Agreements Act; 
                                and
                                  (II) contributes to efforts 
                                in international fora to 
                                develop and implement 
                                international rules in 
                                transparency in government 
                                procurement.
                  (C) ATPEA originating good.--
                          (i) In general.--The term ``ATPEA 
                        originating good'' means a good that 
                        meets the rules of origin for a good 
                        set forth in chapter 4 of the NAFTA as 
                        implemented pursuant to United States 
                        law.
                          (ii) Application of chapter 4.--In 
                        applying chapter 4 of the NAFTA with 
                        respect to an ATPEA beneficiary country 
                        for purposes of this subsection--
                                  (I) no country other than the 
                                United States and an ATPEA 
                                beneficiary country may be 
                                treated as being a party to the 
                                NAFTA;
                                  (II) any reference to trade 
                                between the United States and 
                                Mexico shall be deemed to refer 
                                to trade between the United 
                                States and an ATPEA beneficiary 
                                country;
                                  (III) any reference to a 
                                party shall be deemed to refer 
                                to an ATPEA beneficiary country 
                                or the United States; and
                                  (IV) any reference to parties 
                                shall be deemed to refer to any 
                                combination of ATPEA 
                                beneficiary countries or to the 
                                United States and one or more 
                                ATPEA beneficiary countries (or 
                                any combination thereof ).
                  (D) Transition period.--The term ``transition 
                period'' means, with respect to an ATPEA 
                beneficiary country, the period that begins on 
                the date of enactment, and ends on the earlier 
                of--
                          (i) February 28, 2006; or
                          (ii) the date on which the FTAA or 
                        another free trade agreement that makes 
                        substantial progress in achieving the 
                        negotiating objectives set forth in 
                        section 108(b)(5) of Public Law 103-182 
                        (19 U.S.C. 3317(b)(5)) enters into 
                        force with respect to the United States 
                        and the ATPEA beneficiary country.
                  (E) ATPEA.--The term ``ATPEA'` means the 
                Andean Trade Preference Expansion Act.
                  (F) FTAA.--The term ``FTAA'' means the Free 
                Trade Area of the Americas.

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SEC. 208. EFFECTIVE DATE AND TERMINATION OF DUTY-FREE TREATMENT.

    (a) Effective Date.--This title shall take effect on the 
date of enactment.
    [(b) Termination of Duty.--No duty-free treatment extended 
to beneficiary countries under this title shall remain in 
effect 10 years after the date of the enactment of this title.]
    (b) Termination of Preferential Treatment.--No preferential 
duty treatment extended to beneficiary countries under this Act 
shall remain in effect after February 28, 2006.

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            HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES

CHAPTER 99--TEMPORARY LEGISLATION; TEMPORARY MODIFICATIONS ESTABLISHED 
     PURSUANT TO TRADE LEGISLATION; ADDITIONAL IMPORT RESTRICTIONS 
ESTABLISHED PURSUANT TO SECTION 22 OF THE AGRICULTURAL ADJUSTMENT ACT, 
AS AMENDED

           *       *       *       *       *       *       *



9902.51.13       \1\           Yarn, of combed   \1\          Free         No change    No change    On or
                                wool, not put                                                         before 12/
                                up for retail                                                         31/2003
                                sale,
                                containing 85
                                percent or more
                                by weight of
                                wool, formed
                                with wool
                                fibers having
                                average
                                diameters of
                                18.5 micron or
                                less (provided
                                for in
                                subheading
                                5107.10.30)....


9902.84.02       \1\           Watertube         \1\          [4.9%] Free  No change    No change    On or
                                boilers with a                                                        before [12/
                                steam                                                                 31/2003]
                                production                                                           12/31/2006
                                exceeding 45 t
                                per hour, for
                                use in nuclear
                                facilities
                                (provided for
                                in subheading
                                8402.11.00)....

                                                                                                     

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TRADE AND DEVELOPMENT ACT OF 2000

           *       *       *       *       *       *       *


TITLE V--IMPORTS OF CERTAIN WOOL ARTICLES

           *       *       *       *       *       *       *


SEC. 505. REFUND OF DUTIES PAID ON IMPORTS OF CERTAIN WOOL ARTICLES.

    (a) Worsted Wool Fabrics.--[In each of the calendar years] 
For each of the calendar years 2000, 2001, and 2002, a 
manufacturer of men's or boys' suits, suit-type jackets, or 
trousers (not a broker or other individual acting on behalf of 
the manufacturer to process the import) of imported worsted 
wool fabrics of the kind described in heading 9902.51.11 or 
9902.51.12 of the Harmonized Tariff Schedule of the United 
States shall be eligible [for a refund of duties paid on 
entries of such fabrics in each such calendar year in an amount 
equal to one-third of the amount of duties paid by the importer 
on such worsted wool fabrics (without regard to micron level) 
imported in calendar year 1999.] for a payment equal to an 
amount determined pursuant to subsection (d)(1).
    [(b) Wool Yarn.--In each of the calendar years 2000, 2001, 
and 2002, a manufacturer of worsted wool fabrics who imports 
wool yarn of the kind described in heading 9902.51.13 of the 
Harmonized Tariff Schedule of the United States shall be 
eligible for a refund of duties paid on entries of such wool 
yarn in each such calendar year in an amount equal to one-third 
of the amount of duties paid by the manufacturer on such wool 
yarn (without regard to micron level) imported in calendar year 
1999.]
    (b) Wool Yarn.--
          (1) Importing manufacturers.--For each of the 
        calendar years 2000, 2001, and 2002, a manufacturer of 
        worsted wool fabrics who imports wool yarn of the kind 
        described in heading 9902.51.13 of the Harmonized 
        Tariff Schedule of the United States shall be eligible 
        for a payment equal to an amount determined pursuant to 
        subsection (d)(2).
          (2) Nonimporting manufacturers.--For each of the 
        calendar years 2001 and 2002, any other manufacturer of 
        worsted wool fabrics of imported wool yarn of the kind 
        described in heading 9902.51.13 of the Harmonized 
        Tariff Schedule of the United States shall be eligible 
        for a payment equal to an amount determined pursuant to 
        subsection (d)(2).
    [(c) Wool Fiber and Wool Top.--In each of the calendar 
years 2000, 1001, and 2002, a manufacturer of wool yarn or wool 
fabric who imports wool fiber or wool top of the kind described 
in heading 9902.51.14 of the Harmonized Tariff Schedule of the 
United States shall be eligible for a refund of duties paid on 
entries of such wool fiber in each such calendar year in an 
amount equal to one-third of the amount of duties paid by the 
manufacturer on such wool fiber (without regard to micron 
level) imported in calendar year 1999.]
    (c) Wool Fiber and Wool Top.--
          (1) Importing manufacturers.--For each of the 
        calendar years 2000, 2001, and 2002, a manufacturer of 
        wool yarn or wool fabric who imports wool fiber or wool 
        top of the kind described in heading 9902.51.14 of the 
        Harmonized Tariff Schedule of the United States shall 
        be eligible for a payment equal to an amount determined 
        pursuant to subsection (d)(3).
          (2) Nonimporting manufacturers.--For each of the 
        calendar years 2001 and 2002, any other manufacturer of 
        wool yarn or wool fabric of imported wool fiber or wool 
        top of the kind described in heading 9902.51.14 of the 
        Harmonized Tariff Schedule of the United States shall 
        be eligible for a payment equal to an amount determined 
        pursuant to subsection (d)(3).
    [(d) Proper Identification and Appropriate Claim.--Any 
person applying for a rebate under this section shall properly 
identify and make appropriate claim to the United States 
Customs Service for each entry involved.]
  (d) Amount of Annual Payments to Manufacturers.--
          (1) Manufacturers of men's suits, etc. of imported 
        worsted wool fabrics.--
                  (A) Eligible to receive more than $5,000.--
                Each annual payment to manufacturers described 
                in subsection (a) who, according to the records 
                of the Customs Service as of September 11, 
                2001, are eligible to receive more than $5,000 
                for each of the calendar years 2000, 2001, and 
                2002, shall be in an amount equal to one-third 
                of the amount determined by multiplying 
                $30,124,000 by a fraction--
                          (i) the numerator of which is the 
                        amount attributable to the duties paid 
                        on eligible wool products imported in 
                        calendar year 1999 by the manufacturer 
                        making the claim, and
                          (ii) the denominator of which is the 
                        total amount attributable to the duties 
                        paid on eligible wool products imported 
                        in calendar year 1999 by all the 
                        manufacturers described in subsection 
                        (a) who, according to the records of 
                        the Customs Service as of September 11, 
                        2001, are eligible to receive more than 
                        $5,000 for each such calendar year 
                        under this section as it was in effect 
                        on that date.
                  (B) Eligible wool products.--For purposes of 
                subparagraph (A), the term ``eligible wool 
                products'' refers to imported worsted wool 
                fabrics described in subsection (a).
                  (C) Others.--All manufacturers described in 
                subsection (a), other than the manufacturer's 
                to which subparagraph (A) applies, shall each 
                receive an annual payment in an amount equal to 
                one-third of the amount determined by dividing 
                $1,665,000 by the number of all such other 
                manufacturers.
          (2) Manufacturers of worsted wool fabrics of imported 
        wool yarn.--
                  (A) Importing manufacturers.--Each annual 
                payment to an importing manufacturer described 
                in subsection (b)(1) shall be in an amount 
                equal to one-third of the amount determined by 
                multiplying $2,202,000 by a fraction--
                          (i) the numerator of which is the 
                        amount attributable to the duties paid 
                        on eligible wool products imported in 
                        calendar year 1999 by the importing 
                        manufacturer making the claim, and
                          (ii) the denominator of which is the 
                        total amount attributable to the duties 
                        paid on eligible wool products imported 
                        in calendar year 1999 by all the 
                        importing manufacturers described in 
                        subsection (b)(1).
                  (B) Eligible wool products.--For purposes of 
                subparagraph (A), the term ``eligible wool 
                products'' refers to imported wool yarn 
                described in subsection (b)(1).
                  (C) Nonimporting manufacturers.--Each annual 
                payment to a nonimporting manufacturer 
                described in subsection (b)(2) shall be in an 
                amount equal to one-half of the amount 
                determined by multiplying $141,000 by a 
                fraction--
                          (i) the numerator of which is the 
                        amount attributable to the purchases of 
                        imported eligible wool products in 
                        calendar year 1999 by the nonimporting 
                        manufacturer making the claim, and
                          (ii) the denominator of which is the 
                        total amount attributable to the 
                        purchases of imported eligible wool 
                        products in calendar year 1999 by all 
                        the nonimporting manufacturers 
                        described in subsection (b)(2).
          (3) Manufacturers of wool yarn or wool fabric of 
        imported wool fiber or wool top.--
                  (A) Importing manufacturers.--Each annual 
                payment to an importing manufacturer described 
                in subsection (c)(1) shall be in an amount 
                equal to one-third of the amount determined by 
                multiplying $1,522,000 by a fraction--
                          (i) the numerator of which is the 
                        amount attributable to the duties paid 
                        on eligible wool products imported in 
                        calendar year 1999 by the importing 
                        manufacturer making the claim, and
                          (ii) the denominator of which is the 
                        total amount attributable to the duties 
                        paid on eligible wool products imported 
                        in calendar year 1999 by all the 
                        importing manufacturers described in 
                        subsection (c)(1).
                  (B) Eligible wool products.--For purposes of 
                subparagraph (A), the term ``eligible wool 
                products'' refers to imported wool fiber or 
                wool top described in subsection (c)(1).
                  (C) Nonimporting manufacturers.--Each annual 
                payment to a nonimporting manufacturer 
                described in subsection (c)(2) shall be in an 
                amount equal to one-half of the amount 
                determined by multiplying $597,000 by a 
                fraction--
                          (i) the numerator of which is the 
                        amount attributable to the purchases of 
                        imported eligible wool products in 
                        calendar year 1999 by the nonimporting 
                        manufacturer making the claim, and
                          (ii) the denominator of which is the 
                        amount attributable to the purchases of 
                        imported eligible wool products in 
                        calendar year 1999 by all the 
                        nonimporting manufacturers described in 
                        subsection (c)(2).
          (4) Letters of intent.--Except for the nonimporting 
        manufacturers described in subsections (b)(2) and 
        (c)(2) who may make claims under this section by virtue 
        of the enactment of the Wool Manufacturer Payment 
        Clarification and Technical Corrections Act, only 
        manufacturers who, according to the records of the 
        Customs Service, filed with the Customs Service before 
        September 11, 2001, letters of intent to establish 
        eligibility to be claimants are eligible to make a 
        claim for a payment under this section.
          (5) Amount attributable to purchases by nonimporting 
        manufacturers.--
                  (A) Amount attributable.--For purposes of 
                paragraphs (2)(C) and (3)(C), the amount 
                attributable to the purchases of imported 
                eligible wool products in calendar year 1999 by 
                a nonimporting manufacturer shall be the amount 
                the nonimporting manufacturer paid for eligible 
                wool products in calendar year 1999, as 
                evidenced by invoices. The nonimporting 
                manufacturer shall make such calculation and 
                submit the resulting amount to the Customs 
                Service, within 45 days after the date of 
                enactment of the Wool Manufacturer Payment 
                Clarification and Technical Corrections Act, in 
                a signed affidavit that attests that the 
                information contained therein is true and 
                accurate to the best of the affiant's belief 
                and knowledge. The nonimporting manufacturer 
                shall retain the records upon which the 
                calculation is based for a period of five years 
                beginning on the date the affidavit is 
                submitted to the Customs Service.
                  (B) Eligible wool product.--For purposes of 
                subparagraph (A)--
                          (i) the eligible wool product for 
                        nonimporting manufacturers of worsted 
                        wool fabrics is wool yarn of the kind 
                        described in heading 9902.51.13 of the 
                        Harmonized Tariff Schedule of the 
                        United States purchased in calendar 
                        year 1999; and
                          (ii) the eligible wool products for 
                        nonimporting manufacturers of wool yarn 
                        or wool fabric are wool fiber or wool 
                        top of the kind described in heading 
                        9902.51.14 of such Schedule purchased 
                        in calendar year 1999.
          (6) Amount attributable to duties paid.--For purposes 
        of paragraphs (1), (2)(A), and (3)(A), the amount 
        attributable to the duties paid by a manufacturer shall 
        be the amount shown on the records of the Customs 
        Service as of September 11, 2001, under this section as 
        then in effect.
          (7) Schedule of payments; reallocations.--
                  (A) Schedule.--Of the payments described in 
                paragraphs (1), (2)(A), and (3)(A), the Customs 
                Service shall make the first installment on or 
                before December 31, 2001, the second 
                installment on or before April 15, 2002, and 
                the third installment on or before April 15, 
                2003. Of the payments described in paragraphs 
                (2)(C) and (3)(C), the Customs Service shall 
                make the first installment on or before April 
                15, 2002, and the second installment on or 
                before April 15, 2003.
                  (B) Reallocations.--In the event that a 
                manufacturer that would have received payment 
                under subparagraph (A) or (C) of paragraph (1), 
                (2), or (3) ceases to be qualified for such 
                payment as such a manufacturer, the amounts 
                otherwise payable to the remaining 
                manufacturers under such subparagraph shall be 
                increased on a pro rata basis by the amount of 
                the payment such manufacturer would have 
                received.
          (8) Reference.--For purposes of paragraphs (1)(A) and 
        (6), the ``records of the Customs Service as of 
        September 11, 2001'' are the records of the Wool Duty 
        Unit of the Customs Service on September 11, 2001, as 
        adjusted by the Customs Service to the extent necessary 
        to carry out this section. The amounts so adjusted are 
        not subject to administrative or judicial review.
  (e) Affidavits by Manufacturers.--
          (1) Affidavit Required.--A manufacturer may not 
        receive a payment under this section for calendar year 
        2000, 2001, or 2002, as the case may be, unless that 
        manufacturer has submitted to the Customs Service for 
        that calendar year a signed affidavit that attests 
        that, during that calendar year, the affiant was a 
        manufacturer in the United States described in 
        subsection (a), (b), or (c).
          (2) Timing.--An affidavit under paragraph (1) shall 
        be valid--
                  (A) in the case of a manufacturer described 
                in paragraph (1), (2)(A), or (3)(A) of 
                subsection (d) filing a claim for a payment for 
                calendar year 2000, only if the affidavit is 
                postmarked no later than 15 days after the date 
                of enactment of the Wool Manufacturer Payment 
                Clarification and Technical Corrections Act; 
                and
                  (B) in the case of a claim for a payment for 
                calendar year 2001 or 2002, only if the 
                affidavit is postmarked no later than March 1, 
                2002, or March 1, 2003, respectively.
  (f) Offsets.--Notwithstanding any other provision of this 
section, any amount otherwise payable under subsection (d) to a 
manufacturer in calendar year 2001 and, where applicable, in 
calendar years 2002 and 2003, shall be reduced by the amount of 
any payment received by that manufacturer under this section 
before the enactment of the Wool Manufacturer Payment 
Clarification and Technical Corrections Act.
  (g) Definition.--For purposes of this section, the 
manufacturer is the party that owns--
          (1) imported worsted wool fabric, of the kind 
        described in heading 9902.51.11 or 9902.51.12 of the 
        Harmonized Tariff Schedule of the United States, at the 
        time the fabric is cut and sewn in the United States 
        into men's or boys' suits, suit-type jackets, or 
        trousers;
          (2) imported wool yarn, of the kind described in 
        heading 9902.51.13 of such Schedule, at the time the 
        yarn is processed in the United States into worsted 
        wool fabric; or
          (3) imported wool fiber or wool top, of the kind 
        described in heading 9902.51.14 of such Schedule, at 
        the time the wool fiber or wool top is processed in the 
        United States into wool yarn.

           *       *       *       *       *       *       *