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 112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    112-238

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



 
   UNITED STATES-PANAMA TRADE PROMOTION AGREEMENT IMPLEMENTATION ACT

                                _______
                                

October 6, 2011.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

            Mr. Camp, from the Committee on Ways and Means, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 3079]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 3079) to implement the United States-Panama Trade 
Promotion Agreement, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
  I. Summary and Background...........................................2
        A. Purpose and Summary...................................     2
        B. Background............................................     2
        C. Legislative History...................................     6
 II. Section-by-Section Summary.......................................7
        A. Title I: Approval and General Provisions..............     7
        B. Title II: Customs Provisions..........................    10
        C. Title III: Relief from Imports........................    16
        D. Title IV: Miscellaneous...............................    20
        E. Title V: Offsets......................................    21
III. Votes of the Committee..........................................22
 IV. Budget Effects of the Bill......................................22
        A. Committee Estimate of Budgetary Effects...............    22
        B. Statement Regarding New Budget Authority and Tax 
          Expenditures Budget Authority..........................    23
        C. Cost Estimate Prepared by the Congressional Budget 
          Office.................................................    23
        D. Macroeconomic Impact Analysis.........................    29
  V. Other Matters to be Discussed Under the Rules of the House of 
     Representatives.................................................29
        A. Committee Oversight Findings and Recommendations......    29
        B. Statement of General Performance Goals and Objectives.    29
        C. Information Relating to Unfunded Mandates.............    30
        D. Applicability of House Rule XXI 5(b)..................    30
        E. Tax Complexity Analysis...............................    30
        F. Congressional Earmarks, Limited Tax Benefits, and 
          Limited Tariff Benefits................................    30
 VI. Changes in Existing Law Made by the Bill, as Reported...........30
VII. Additional Views................................................36

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    H.R. 3079 would implement the agreement establishing a free 
trade area between the United States and Panama.

                             B. Background


The United States-Panama Trade Promotion Agreement

    The United States-Panama Trade Promotion Agreement 
(hereinafter the ``Agreement'') was signed on June 28, 2007. 
The Agreement covers all agricultural and industrial sectors, 
provides for greatly expanded market access for U.S. services, 
contains robust protections for U.S. intellectual property 
rights holders, and includes strong labor and environment 
provisions. The Committee believes that the Agreement meets the 
objectives and priorities set forth in the Bipartisan Trade 
Promotion Authority Act of 2002 (``TPA''). Moreover, the 
agreement reflects the May 10, 2007 agreement between 
Congressional leaders and the last Administration regarding 
labor, environment, intellectual property, investment, 
government procurement, and port security (``May 10 
agreement'').
    U.S. industrial goods currently face an average tariff of 7 
percent in Panama, with some tariffs as high as 81 percent. 
Conversely, almost all Panamanian exports enter the United 
States duty free due to low U.S. tariffs and U.S. trade 
preference programs. The Agreement would transition the U.S.-
Panama trading relationship from one-way preferences to full 
partnership and reciprocal commitments, helping U.S. exporters 
gain greater access to the Panamanian market, one of the 
fastest growing in Latin America. The International Trade 
Commissions (``ITC'') estimates that U.S. exports to Panama for 
certain sectors would increase up to 145 percent.
    The following are key sectoral benefits and aspects of the 
Agreement:
    Agriculture: U.S. agriculture exports to Panama currently 
face an average tariff of 15 percent, whereas more than 99 
percent of Panamanian agricultural exports to the United States 
enter duty-free. The Agreement would remedy this by making more 
than half of current U.S. farm exports to Panama by value duty-
free immediately upon implementation, including U.S. exports of 
pork, rice, soybeans, cotton, wheat, and most fresh fruit. The 
Agreement would also address key non-tariff barriers. For 
example, Panama would recognize the equivalence of the U.S. 
food safety system for meat, poultry, and processed foods and 
would provide access for all U.S. beef and beef products 
consistent with international norms.
    Manufacturing: The Agreement would significantly lower both 
tariff and non-tariff barriers to U.S. exports of manufactured 
goods. Upon implementation, over 87 percent of U.S. exports of 
consumer and industrial products to Panama would immediately 
become duty-free, with remaining tariffs phased out over ten 
years. Key U.S. export sectors that would receive immediate 
duty-free treatment include aircraft, construction equipment, 
and medical and scientific equipment. As a result, the ITC 
estimates significant gains in U.S. exports in key sectors and 
products. For example, the ITC estimates that exports of cars 
and light trucks would increase by 43 percent. Similarly, 
exports of appliances, HVAC equipment, and parts would increase 
between 9 and 20 percent. Per the Agreement, Panama has also 
reaffirmed its commitment to fulfill its obligations under the 
WTO Information Technology Agreement, which would further open 
Panama's market to U.S. high-tech exports. The Agreement would 
provide U.S. firms with lower tariff barriers than major 
competitors from countries that do not have trade agreements 
with Panama in effect.
    Services: The services sector accounts for nearly 78 
percent of Panama's GDP, making improved market access for U.S. 
services critical. The Agreement would provide U.S. service 
firms with market access, national treatment, and regulatory 
transparency exceeding that afforded by the WTO General 
Agreement on Services. Under the Agreement, the United States 
would receive access to key services markets, including retail 
trade, financial services, and professional services. For 
example, the agreement would end the current Panamanian 
restriction allowing only Panamanian nationals to provide 
professional services. In addition, the Agreement would ban the 
current requirement of having to open a subsidiary in Panama to 
do business in Panama. U.S. service providers that establish a 
local presence in Panama would benefit from strong investor 
protections included in the Agreement. In addition, the 
Agreement would lift the cap on foreign direct investment in 
multi-brand retail in Panama. Overall, the opening of Panama's 
services market would allow U.S. service providers to benefit 
in the region, as well as Panama, because Panama is considered 
a prime logistical hub for the whole of Latin America.
    Government Procurement and Canal Expansion: The government 
procurement provisions of the Agreement are essential to 
guaranteeing non-discriminatory access for U.S. goods, 
services, and suppliers to the Panamanian central and regional 
governments, as well as to significant government enterprises, 
including the Panama Canal Authority, particularly because 
Panama is not a member of the WTO Government Procurement 
Agreement. The procurement provisions would grant U.S. entities 
greater access and protection than they currently have. The 
Canal expansion now underway is expected to double capacity 
with a third lane and a new set of locks. The expansion will 
total $5.25 billion in new contract opportunities. In addition 
to the Canal expansion, upcoming procurement opportunities in 
Panama are expected to be between $1.5 billion and $2.3 
billion.
    Intellectual Property Rights: Under the Agreement, Panama 
would adopt higher and extended standards for the protection of 
intellectual property rights, such as copyrights, patents, 
trademarks and trade secrets. The Agreement also provides 
enhanced means for enforcing those rights. Under the Agreement, 
each partner country would be required to grant national 
treatment to nationals of the other, and all laws, regulations, 
procedures and final judicial decisions would need to be be in 
writing and published or made publicly available. The Agreement 
would lengthen terms for copyright protection, cover electronic 
and digital media, and increase enforcement to go beyond the 
WTO Agreement on Trade-Related Aspects of Intellectual Property 
Rights. Both parties would be obliged to provide appropriate 
civil and criminal remedies for willful violators of 
intellectual property rights.
    Textile and Apparel: Many U.S. textiles and apparel 
products meeting the Agreement's rules of origin would 
immediately become duty-free and quota-free when exported to 
Panama. The Agreement's rules of origin are generally based on 
the ``yarn forward'' standard. A ``de minimis'' provision would 
allow limited amounts of specified third-country content to go 
into U.S. and Panamanian apparel, giving producers in both 
countries needed flexibility. The Agreement would allow the use 
of ``short supply'' fabrics, yarns, and fibers (that is, 
fabrics, yarns, and fibers not made in Panama or the United 
States that have been determined not to be commercially 
available in either country) as inputs. The Parties agreed to a 
list of short supply fabrics, yarns, and fibers, and the 
Agreement includes a process for adding more.
    Customs cooperation commitments between the United States 
and Panama would allow for verification of claims of origin or 
preferential treatment, and denial of preferential treatment or 
entry if claims cannot be verified. A special textile safeguard 
would provide for temporary tariff relief if imports under the 
Agreement prove to cause or threaten serious damage to U.S. 
producers.
    Investment: The Agreement would ensure a stable legal 
framework for U.S. investors operating in Panama. All forms of 
investment would be protected under the Agreement, including 
enterprises, debt, concessions and similar contracts, and 
intellectual property. With very few exceptions, U.S. investors 
would be treated as well as Panamanian investors in the 
establishment, acquisition, and operation of investments in 
Panama.
    The Agreement draws from U.S. legal principles and 
practices to provide U.S. investors in Panama with a basic set 
of substantive and procedural protections that Panamanian 
investors currently enjoy under the U.S. legal system. These 
include due process protections and the right to receive fair 
market value for property in the event of an expropriation. The 
Agreement includes recourse to an investor-state dispute 
settlement mechanism for certain types of claims.
    In the preamble, the Parties agree that ``foreign investors 
are not hereby accorded greater substantive rights with respect 
to investment protections than domestic investors under 
domestic law where, as in the United States, protections of 
investor rights under domestic law equal or exceed those set 
forth in this Agreement.'' This provision reflects one of the 
negotiating objectives of TPA to ensure ``that foreign 
investors in the United States are not accorded greater 
substantive rights with respect to investment protections than 
United States investors in the United States.''
    Labor: The labor chapter of the Agreement includes the 
obligation that the Parties adopt and effectively enforce the 
five core international labor rights as stated in the 1998 
International Labor Organization Declaration on Fundamental 
Principles and Rights at Work. The Agreement would also require 
each country to enforce its own existing laws concerning 
acceptable conditions of work with respect to minimum wages, 
hours of work, and occupational safety and health. The 
obligations under the labor chapter would be subject to the 
same dispute settlement mechanisms and enforcement mechanisms 
as obligations in other chapters of the Agreement. Neither 
Party would be permitted to waive or otherwise derogate from 
its laws that implement this obligation in a manner affecting 
trade or investment between the Parties. Procedural guarantees 
in the Agreement would ensure that workers and employers have 
fair, equitable, and transparent access to labor tribunals or 
courts. The Committee notes that Panama has shown a strong 
commitment to the protection of labor rights for Panamanian 
workers. Panama has made more than a dozen changes to its Labor 
Code since 2009. It recently passed legislation addressing 
worker rights in export processing zones, collective bargaining 
issues in companies under two years of age, and collective 
bargaining and temporary worker issues in its Baru District.
    Environment: The Agreement would commit the Parties to 
effectively enforce their own domestic environmental laws and 
adopt, maintain, and implement laws and all other measures to 
fulfill obligations under covered multilateral environmental 
agreements. The Agreement also includes a fully enforceable, 
binding commitment that would prohibit the Parties from 
lowering environmental standards in the future in a manner 
affecting trade or investment. The Agreement would promote a 
comprehensive approach to environmental protection by 
encouraging voluntary, market-based mechanisms to protect the 
environment and by providing procedural guarantees that ensure 
fair, equitable and transparent proceedings for the 
administration and enforcement of environmental laws. The 
Agreement would call for a public submissions process with an 
independent secretariat for environmental matters to ensure 
that views of civil society are appropriately considered. All 
obligations in the environment chapter would be subject to the 
same dispute settlement procedures and enforcement mechanisms 
as obligations in other chapters of the Agreement.
    Tax Transparency: The Committee notes Panama's significant 
steps to address concerns raised by certain critics that the 
country has tax transparency issues, although these steps are 
distinct from the Agreement. Panama and the United States now 
have an operational Tax Information Exchange Agreement 
(``TIEA'') in force. Signed in November 2010, the TIEA was 
touted by Treasury Secretary Geithner as an agreement that 
``usher[s] in a new era of openness and transparency for tax 
information between the United States and Panama.'' Panama 
ratified the TIEA in April and had already passed the necessary 
implementing legislation. Moreover, the OECD has recently added 
Panama to the list of those countries, including the United 
States, that meet internationally agreed upon tax standards. 
The OECD Secretary General praised Panama's efforts, stating 
that ``Panama has worked hard to achieve this milestone, making 
remarkable strides toward complying with the international 
standards in a very short time.''

Procedures of the Trade Act of 2002

    H.R. 3079 is being considered by Congress under the 
procedures of the Bipartisan Trade Promotion Authority Act of 
2002, included in the Trade Act of 2002. Pursuant to these 
requirements, the President is required to provide written 
notice to Congress of the President's intention to enter into 
the negotiations. Throughout the negotiating process, and prior 
to entering into an agreement, the President is required to 
consult with Congress regarding the ongoing negotiations.
    The President must notify Congress of his intent to enter 
into a trade agreement at least 90 calendar days before the 
agreement is signed. Within 60 days after entering into the 
Agreement, the President must submit to Congress a description 
of those changes to existing laws that the President considers 
would be required to bring the United States into compliance 
with the Agreement. After entering into the Agreement, the 
President must also submit to Congress the formal legal text of 
the agreement, draft implementing legislation, a statement of 
administrative action proposed to implement the Agreement, and 
other related supporting information as required under section 
2105(a) of the Trade Act of 2002.
    Following submission of these documents, the implementing 
bill is introduced, by request, by the Majority Leader and the 
Minority Leader in each chamber. The House then has up to 60 
legislative days to consider implementing legislation for the 
Agreement, and the Senate has up to an additional 30 
legislative days. No amendments to the legislation are allowed 
under TPA requirements.

                         C. Legislative History

    On November 18, 2003, the United States Trade 
Representative (``USTR'') formally notified the Congress of its 
intention to initiate negotiation of a trade agreement with 
Panama. Negotiations on a trade agreement between the United 
States and Panama began on April 25, 2004. On March 30, 2007, 
the President notified the Congress of his intention to enter 
into a trade agreement with Panama. On June 28, 2007, then-U.S. 
Trade Representative Susan Schwab and Panamanian Minister of 
Commerce and Industry Alejandro Ferrer signed the United 
States-Panama Trade Promotion Agreement. Panama's National 
Assembly approved the agreement on July 11, 2007. On August 24, 
2007, the USTR transmitted to Congress a description of the 
changes to existing U.S. laws required to comply with the 
Agreement.

Legislative hearings

    On January 25, 2011, the Committee on Ways and Means held a 
hearing on the Panama trade agreement, as well as the U.S-
Colombia Trade Promotion Agreement and the U.S.-Korea Free 
Trade Agreement. The Trade Subcommittee of the Committee on 
Ways and Means then held a hearing on the Panama trade 
agreement on March 30, 2011.

Committee action

    On July 7, 2011, the Committee on Ways and Means considered 
in an informal mark-up session draft legislation to implement 
the Agreement and a statement of administrative action. The 
Committee approved the draft legislation by a vote of 22-15, 
after agreeing to an amendment in the nature of a substitute 
offered by Chairman Camp.
    On October 3, 2011, President Obama transmitted the United 
States-Panama Trade Promotion Agreement, a legislative proposal 
to implement the agreement, a Statement of Administrative 
Action and supporting documents to Congress. On the same day, 
H.R. 3079, a bill to implement the United States-Panama Trade 
Promotion Agreement, was introduced by Majority Leader Eric 
Cantor (R-VA), by request, for himself and Rep. Jim McDermott 
(D-WA). H.R. 3079 was then referred to the Committee on Ways 
and Means.
    On October 5, 2011, Committee on Ways and Means formally 
met to consider H.R. 3079. The Committee ordered H.R. 3079 
favorably reported to the House of Representatives by a vote of 
32-3, without amendment. Under the procedures of TPA, no 
amendments are permitted after introduction.

                     II. SECTION-BY-SECTION SUMMARY


                Title I: Approval and General Provisions


SECTIONS 1-3: SHORT TITLE, TABLE OF CONTENTS, PURPOSES, AND DEFINITIONS

Present law

    No provision.

Explanation of provision

    Section 2 sets forth the purposes of the implementing act 
(``Act''), which include approving and implementing the 
Agreement.

Reason for change

    The provision makes clear that the bill implements and 
approves the Agreement.

               SECTION 101: APPROVAL AND ENTRY INTO FORCE

Present law

    No provision.

Explanation of provision

    Section 101 states that Congress approves the Agreement and 
the Statement of Administrative Action. The Agreement enters 
into force when the President determines that Panama is in 
compliance with all provisions that take effect on the date of 
entry into force of the Agreement and exchanges notes with the 
Government of Panama providing for entry into force on or after 
January 1, 2012.

Reason for change

    Approval of the Agreement and the Statement of 
Administrative Action is required under the procedures of 
section 2103(b)(3) of Trade Act of 2002.

 SECTION 102: RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE 
                                  LAW

Present law

    No provision.

Explanation of provision

    Section 102(a) provides that U.S. law prevails in the case 
of a conflict with the Agreement. Section 102(b) provides that 
only the United States is entitled to bring a court action 
challenging a state law as being invalid on grounds of 
inconsistency with the Agreement. Section 102(c) states that 
there is no private cause of action or defense under the 
Agreement and no person other than the United States may 
challenge a federal or state law in court as being inconsistent 
with the Agreement.

Reason for change

    The provision addresses the operation of the Agreement 
relative to federal and state law, as well as private remedies. 
Section 102 is necessary to make clear that no provision of the 
Agreement will be given effect if it is inconsistent with 
federal law and that entry into force of the Agreement creates 
no new private remedy.

 SECTION 103: IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE 
                        AND INITIAL REGULATIONS

Present law

    No provision.

Explanation of provision

    Section 103(a) provides that, after the date of enactment, 
the President may proclaim such actions, and other U.S. 
government officers may issue such regulations, as are 
necessary to ensure the appropriate implementation of any 
provision of the Act that is to take effect on the date of 
entry into force of the Agreement. The effective date of such 
actions and regulations may not be earlier than the date of 
entry into force of the Agreement. Where proclaimed actions are 
not subject to consultation and layover requirements under the 
Act, proclamations generally may not take effect earlier than 
15 days after their publication.
    Section 103(b) establishes that regulations necessary or 
appropriate to carry out actions under the Act and Statement of 
Administrative Action must, to the maximum extent feasible, be 
issued within one year of entry into force of the Agreement or, 
where a provision takes effect on a date after which the 
Agreement enters into force, within one year of the effective 
date of the provision.

Reason for change

    Section 103 provides for the issuance of regulations. The 
Committee strongly believes that regulations should be issued 
in a timely manner to provide maximum clarity to parties 
claiming benefits under the Agreement. The Committee notes, 
further, that the Statement of Administrative Action commits 
each agency that will be issuing regulations to provide a 
report to Congress if it cannot issue regulations within one 
year of the Agreement's entry into force and that such report 
must be submitted at least 30 days prior to the end of the one-
year period.

      SECTION 104: CONSULTATION AND LAYOVER FOR PROCLAIMED ACTIONS

Present law

    No provision.

Explanation of provision

    Section 104 establishes requirements for proclamation of 
actions that are subject to consultation and layover provisions 
under the Act. The President may proclaim such action only 
after: (1) obtaining advice from the International Trade 
Commission and the appropriate private sector advisory 
committees; (2) submitting a report to the Ways and Means and 
Finance Committees concerning the reasons for the action; and 
(3) providing for a 60-day layover period (starting after the 
President has both obtained the required advice and provided 
the required report). The proposed action cannot take effect 
until after the expiration of the 60-day period and after the 
President has consulted with the Ways and Means and Finance 
Committees regarding the proposed action.

Reason for change

    The bill gives the President certain proclamation authority 
but requires extensive consultation with Congress before such 
authority may be exercised. The Committee believes that such 
consultation is an essential component of the delegation of 
authority to the President and expects that such consultations 
will be conducted in a thorough and timely manner.

     SECTION 105: ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS

Present law

    No provision.

Explanation of provision

    Section 105 authorizes the President to establish an office 
within the Department of Commerce responsible for providing 
administrative assistance to dispute settlement panels that are 
established under the Agreement. The section also authorizes 
appropriations of up to $150,000 for the establishment and 
operation of the office and to pay the U.S. share of expenses 
of the panels.

Reason for change

    Dispute settlement procedures and panels are necessary to 
ensure that disputes over compliance with Agreement provisions 
can be resolved effectively. The authorization is necessary for 
the Commerce Department to provide administrative assistance to 
panels.

                   SECTION 106: ARBITRATION OF CLAIMS

Present law

    No provision.

Explanation of provision

    Section 106 authorizes the United States to resolve certain 
claims covered by the Investor-State Dispute Settlement 
Procedures set forth in the Agreement.

Reason for change

    This provision is necessary to meet U.S. obligations under 
Section B of Chapter 10 of the Agreement.

          SECTION 107: EFFECTIVE DATES; EFFECT OF TERMINATION

Present law

    No provision.

Explanation of provision

    Section 107 provides that, with the exception of Sections 1 
through 3 and Titles I and V of the Act, which take effect on 
the date of enactment of the Act, the effective date of the Act 
is the date that the Agreement enters into force with respect 
to the United States. Amendments made to U.S. law by Sections 
204, 205, 207, and 401 of the Act take effect on the date of 
enactment of the Act but apply with respect to Panama on the 
date on which the Agreement enters into force. Other than Title 
V, the provisions of the Act terminate on the date on which the 
Agreement terminates.

Reason for change

    Section 107 implements provisions of the Agreement relating 
to the effective date and date of termination of the Act.

                      Title II: Customs Provisions


                   SECTION 201: TARIFF MODIFICATIONS

Present law

    No provision.

Explanation of provision

    Section 201(a) provides the President with the authority to 
proclaim tariff modifications necessary or appropriate to carry 
out the Agreement and requires the President to terminate 
Panama's designation as a beneficiary developing country for 
the purpose of the Generalized System of Preferences (``GSP'') 
program and as a beneficiary country for the purposes of the 
Caribbean Basin Economic Recovery Act (``CBERA''), with certain 
exceptions, as of the date that the Agreement enters into 
force.
    Section 201(b) gives the President the authority, subject 
to consultation and layover, to proclaim further tariff 
modifications necessary or appropriate to maintain the general 
level of reciprocal and mutually advantageous concessions with 
respect to Panama provided for by the Agreement.
    Section 201(c) allows the President, for any goods for 
which the base rate under the Agreement is a specific or 
compound rate of duty, to substitute for the base rate an 
equivalent ad valorem rate to carry out the tariff 
modifications in subsections (a) and (b) of Section 201.
    Section 201(d) directs the President, when implementing 
tariff rate quotas under the Agreement, to ensure that imports 
of agricultural goods do not disrupt the orderly marketing of 
commodities in the United States.

Reason for change

    The provision is necessary to ensure United States 
compliance with the market access provisions of the Agreement. 
The Committee expects the President to comply with the letter 
and spirit of the consultation and layover provisions of this 
Act in carrying out section 201(b).

      SECTION 202: ADDITIONAL DUTIES ON CERTAIN AGRICULTURAL GOODS

Present law

    No provision.

Explanation of provision

    Section 202 implements the agricultural safeguard 
provisions of Article 3.17 and Annex 3.17 of the Agreement. 
Section 202(b) directs the Secretary of the Treasury 
(``Secretary'') to assess an additional duty in any year when 
the volume of imports to the United States of a ``safeguard 
good'' exceeds the trigger level for the good in that calendar 
year as set forth in the Schedule of the United States to Annex 
3.17 of the Agreement. The additional duty is calculated as a 
specified percentage of the difference between the Normal Trade 
Relations (``NTR'' or ``MFN'') rate of duty and the duty set 
out in the Schedule of the United States to Annex 3.3 of the 
Agreement. The sum of the duties assessed under the 
agricultural safeguard and the applicable rate of duty in the 
U.S. Schedule may not exceed the NTR (MFN) rate of duty. No 
additional duty may be applied on a good if, at the time of 
entry, the good is subject to a safeguard measure under the 
procedures set out in Subtitle A of Title III of the Act or 
under the safeguard procedures set out in Chapter 1 of Title II 
of the Trade Act of 1974 (the ``Section 201'' global 
safeguard). The additional duties remain in effect only until 
the end of the calendar year in which they are imposed.

Reason for change

    This provision implements commitments made in the Agreement 
relating to agricultural safeguards. Such safeguards provide 
temporary relief to farmers in the United States who face a 
surge in certain agricultural imports following entry into 
force of the Agreement.

                      SECTION 203: RULES OF ORIGIN

Present law

    No provision.

Explanation of provision

    Section 203 codifies the rules of origin set out in Chapter 
4 of the Agreement. Section 203(b) establishes three basic ways 
for a Panamanian good to qualify as an ``originating good'' and 
therefore to be eligible for preferential tariff treatment when 
it is imported into the United States. A good is an originating 
good if: (1) it is ``wholly obtained or produced entirely in 
the territory of Panama, the United States, or both''; (2) it 
is produced entirely in the United States, Panama, or both and 
any materials used to produce the good that are not themselves 
originating goods are transformed in such a way as to cause 
their tariff classification to change or the good otherwise 
meets regional value-content and other requirements, as 
specified in Annex 4.1 of the Agreement; or (3) it is produced 
entirely in the territory of Panama, the United States, or both 
exclusively from originating materials.
    Under the rules in Chapter 4 and Annex 4.1 of the 
Agreement, an apparel product must generally meet a tariff 
shift rule that effectively imposes a ``yarn forward'' 
requirement. Thus, to qualify as an originating good imported 
into the United States from Panama, an apparel product must 
have been cut (or knit to shape) and sewn or otherwise 
assembled in Panama, the United States, or both from yarn, or 
fabric made from yarn, that originates in Panama, the United 
States, or both.
    Section 203(o)(2) provides authority for the President to 
add fabrics, yarns, or fibers to a list of products that are 
unavailable in commercial quantities in a timely manner, and 
such products are treated as if they originate in Panama, 
regardless of their actual origin, when used as inputs in the 
production of textile or apparel goods. Section 203(o)(4) 
provides a process by which the President may modify that list 
at the request of interested entities, defined as Panama and 
potential and actual suppliers and purchasers of textile or 
apparel goods.
    The remainder of Section 203 sets forth more detailed rules 
for determining whether a good meets the Agreement's 
requirements under the second method of qualifying as an 
originating good. These include rules pertaining to de minimis 
quantities of non-originating materials that do not undergo a 
tariff transformation, transformation by regional content, and 
alternative methods for calculating regional value-content. 
Other provisions in Section 203 address valuation of materials; 
determination of the originating or non-originating status of 
fungible goods and materials; and treatment of accessories, 
spare parts and tools, packaging materials, indirect materials, 
and goods put up in sets. Section 203(l) specifies that goods 
that undergo further production or other operations outside 
Panama or the United States (with certain exceptions) or do not 
remain under the control of the customs authorities of such 
other countries do not qualify as originating goods.

Reason for change

    This provision implements the commitments made in the 
Agreement with respect to rules of origin applying to imports 
from Panama. Rules of origin are needed to confine Agreement 
benefits, such as tariff cuts, to Panamanian goods and to 
prevent third-country goods from being transshipped through 
Panama and claiming benefits under the Agreement.

                     SECTION 204: CUSTOMS USER FEES

Present law

    Section 13031(a) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (``COBRA''), at 19 U.S.C. 58c(a), 
authorizes the Secretary of the Treasury to collect a 
merchandise processing fee for formal and informal entries of 
merchandise into the United States (``Merchandise Processing 
Fee''). Section 13031(b) of COBRA exempts from the Merchandise 
Processing Fee all originating goods under each of the trade 
agreements currently in force between the United States and 
other countries.

Explanation of provision

    Section 204 implements the U.S. commitments under Article 
3.10.4 of the Agreement to eliminate the Merchandise Processing 
Fee on originating goods under the Agreement. In accordance 
with U.S. obligations under the General Agreement on Tariffs 
and Trade 1994, the provision also prohibits use of funds in 
the Customs User Fee Account to provide services related to 
entry of originating goods.

Reason for change

    As with other trade agreements, the Agreement eliminates 
the Merchandise Processing Fee on qualifying goods from Panama. 
Other customs user fees remain in place. Section 204 is 
necessary to ensure United States compliance with the user fee 
elimination provisions of the Agreement. The Committee expects 
that the President, in his yearly budget request, will take 
into account the need for funds to pay expenses for entries 
under the Agreement given that Merchandise Processing Fee funds 
will not be available.

SECTION 205: DISCLOSURE OF INCORRECT INFORMATION; FALSE CERTIFICATIONS 
           OF ORIGIN; DENIAL OF PREFERENTIAL TARIFF TREATMENT

Present law

    No provision.

Explanation of provision

    Section 205 implements Articles 4.16.3 and 4.20.5 of the 
Agreement. Section 205(a) prohibits the imposition of a penalty 
upon importers who make an invalid claim for preferential 
tariff treatment under the Agreement if the importer acts 
promptly and voluntarily to correct the error and pays any 
duties owed on the good in question. The provision also makes 
it unlawful for a person to falsely certify, by fraud, gross 
negligence, or negligence, that a good exported from the United 
States is an originating good. However, the provision prohibits 
the imposition of a penalty if the exporter or producer 
promptly and voluntarily provides notice of the incorrect 
information to every person to whom a certification was issued.
    Section 205(b) provides that if U.S. authorities find that 
an importer, exporter or producer has engaged in a pattern of 
conduct of providing false or unsupported representations, the 
authorities may suspend preferential treatment with respect to 
identical goods covered by subsequent representations made by 
that importer, exporter, or producer, until U.S. authorities 
have determined that its representations are accurate.

Reason for change

    This provision is necessary to implement commitments in the 
Agreement relating to application of penalties for submission 
of false information or certifications by importers, exporters, 
and producers.

                 SECTION 206: RELIQUIDATION OF ENTRIES

Present law

    No provision.

Explanation of provision

    Section 206 implements Article 4.16.5 of the Agreement and 
provides authority for U.S. Customs and Border Protection 
(``CBP'') to reliquidate an entry to refund any excess duties 
(including any Merchandise Processing Fees) paid on a good 
qualifying under the rules of origin for which no claim for 
preferential tariff treatment was made at the time of 
importation if the importer so requests within one year after 
the date of importation.

Reason for change

    Article 4.16.5 of the Agreement anticipates that private 
parties may err in claiming preferential benefits under the 
Agreement and provides a one-year period for parties to make 
such claims for preferential tariff treatment even if the entry 
of the goods at issue has already been liquidated, i.e., 
legally finalized by customs officials. Section 206 is 
necessary to ensure United States compliance with Article 
4.16.5.

                SECTION 207: RECORDKEEPING REQUIREMENTS

Present law

    No provision.

Explanation of provision

    Section 207 implements Article 4.19 of the Agreement. The 
provision requires any person who completes and issues a 
certificate of origin under Article 4.15 of the Agreement for a 
good exported from the United States to maintain, for a period 
of five years after the date of certification, specified 
documents demonstrating that the good qualifies as originating.

Reason for change

    Section 207 is necessary to ensure United States compliance 
with the recordkeeping requirement provisions in Article 4.19 
of the Agreement.

 SECTION 208: ENFORCEMENT RELATING TO TRADE IN TEXTILE OR APPAREL GOODS

Present law

    No provision.

Explanation of provision

    Section 208 implements the customs cooperation and 
verification of origin provisions in Article 3.21 of the 
Agreement. Under Article 3.21, the United States may request 
the Government of Panama to conduct a verification of whether a 
claim of origin for a textile or apparel good is accurate or a 
particular exporter or producer is complying with applicable 
customs laws, regulations, and procedures regarding trade in 
textile or apparel goods. Section 208(a) provides that the 
President may direct the Secretary to take ``appropriate 
action'' while such a verification is being conducted. 
``Appropriate action'' may include (i) suspending preferential 
tariff treatment for textile or apparel goods that the person 
subject to the verification has produced or exported if the 
Secretary determines that there is insufficient information to 
sustain a claim for such treatment; (ii) denying preferential 
tariff treatment to such goods if the Secretary determines that 
a person has provided incorrect information to support a claim 
for such treatment; (iii) detaining such goods if the Secretary 
determines that there is not enough information to determine 
their country of origin; and (iv) denying entry to such goods 
if the Secretary determines that a person has provided 
erroneous information on their origin.
    Under Section 208(c), the President may also direct the 
Secretary to take ``appropriate action'' after a verification 
has been completed. Such action may include (i) denying 
preferential tariff treatment to textile or apparel goods that 
the person subject to the verification has exported or produced 
if the Secretary determines that there is insufficient 
information to support a claim for such treatment or determines 
that a person has provided incorrect information to support a 
claim for such treatment; and (ii) denying entry to such goods 
if the Secretary determines that a person has provided 
incorrect information regarding their origin or that there is 
insufficient information to determine their origin. Unless the 
President sets an earlier date, any such action may remain in 
place until the Secretary obtains enough information to decide 
whether the exporter or producer that was subject to the 
verification is complying with applicable customs rules or 
whether a claim that the goods qualify for preferential tariff 
treatment or originate in an Agreement country is accurate.
    Under Section 208(e), the Secretary may publish the name of 
a person that the Secretary has determined (i) is engaged in 
intentional circumvention of applicable laws, regulations, or 
procedures affecting trade in textile or apparel goods; or (ii) 
has failed to demonstrate that it produces, or is capable of 
producing, textile or apparel goods that are the subject of a 
verification.

Reason for change

    To avoid textile transshipment, special textile enforcement 
provisions have been included in the Agreement. Section 208 is 
necessary to authorize these enforcement mechanisms for use by 
U.S. authorities.

                        SECTION 209: REGULATIONS

Present law

    No provision.

Explanation of provision

    Section 209 directs the Secretary to prescribe regulations 
necessary to carry out the tariff-related provisions of the 
Act, including the rules of origin and customs user fee 
provisions.

Reason for change

    Because the Act involves lengthy and complex implementation 
procedures by customs officials, this provision is necessary to 
authorize the Secretary of Treasury to carry out provisions of 
the Act through regulations. No such regulations may take 
effect before the Agreement enters into force.

                     Title III: Relief From Imports


                        SECTION 301: DEFINITIONS

Present law

    No provision.

Explanation of provision

    Section 301 defines ``Panamanian article'' and ``Panamanian 
textile or apparel article,'' which are key terms for Title III 
of the Act.

Reason for change

    This provision clarifies the scope of the provisions in 
Title III.

     Subtitle A: Relief From Imports Benefiting From the Agreement


                            SECTIONS 311-316

Present law

    No provision.

Explanation of provisions

    Subtitle A to Title III of the Act (Sections 311 to 316) 
authorizes the President, after an investigation and 
affirmative determination by the ITC, to impose certain import 
relief measures when, as a result of the reduction or 
elimination of a duty under the Agreement, a Panamanian product 
is being imported into the United States in such increased 
quantities and under such conditions as to be a substantial 
cause of serious injury or threat of serious injury to the 
domestic industry.
    Section 311 provides for the filing of petitions with the 
ITC and for the ITC to conduct safeguard investigations under 
Subtitle A. Section 311(a) provides that a petition requesting 
a safeguard action may be filed by an entity that is 
``representative of an industry.'' As under Section 202(a)(1) 
of the Trade Act of 1974, a trade association, firm, certified 
or recognized union, or a group of workers can be considered 
such an entity. Section 311(b) sets out the standard to be used 
by the ITC in undertaking an investigation and making a 
determination in safeguard proceedings under Subtitle A of 
Title III of the Act.
    Section 311(c) provides that certain provisions of Section 
202 of the Trade Act of 1974 also apply with respect to 
investigations initiated under Section 311(b), including 
provisions defining ``substantial cause'' and listing factors 
to be taken into account in making safeguard determinations.
    Section 311(d) exempts from investigation under this 
section Panamanian articles with respect to which relief has 
previously been provided under Subtitle A of Title III of the 
Act.
    Section 312 requires the ITC to make a determination not 
later than 120 days after the date on which the Section 311 
investigation is initiated. Under Sections 312(b) and (c), if 
the ITC makes an affirmative determination, it must find and 
recommend to the President the amount of import relief that is 
necessary to remedy or prevent serious injury and to facilitate 
the efforts of the domestic industry to make a positive 
adjustment to import competition. Section 312(d) directs the 
ITC to submit a report to the President regarding the 
determination no later than 30 days after the determination is 
made. Section 312(e) requires the ITC to make this report 
public and to publish a summary of it in the Federal Register.
    Section 313(a) provides that the President, within 30 days 
of receiving a report from the ITC under Section 312, must 
provide import relief to the extent that the President 
determines is necessary to remedy or prevent the injury found 
by the ITC and to facilitate the efforts of the domestic 
industry to make a positive adjustment to import competition. 
Under Section 313(b), the President is not required to provide 
import relief if the relief will not provide greater economic 
and social benefits than costs.
    Section 313(c) sets forth the nature of the relief that the 
President may provide. The President may take action in the 
form of a suspension of further reductions in the rate of duty 
to be applied to the articles in question, or in the form of an 
increase in the rate of duty on the articles in question to a 
level that does not exceed the lesser of the existing NTR (MFN) 
rate or the NTR (MFN) rate of duty that was imposed on the day 
before the Agreement entered into force. Under Section 
313(c)(2), if the relief the President provides has duration 
greater than one year, the relief must be subject to 
progressive liberalization at regular intervals over the course 
of its application.
    Section 313(d) provides that the President may provide 
import relief for up to four years. If the initial period of 
import relief is less than four years, this period may be 
extended to a maximum aggregate period of four years if, after 
an investigation by the ITC and receipt of an ITC report, the 
President determines that import relief continues to be 
necessary and there is evidence that the industry is making a 
positive adjustment to import competition. The ITC must conduct 
an investigation on these issues if, within a specified period 
before the relief terminates, a concerned industry files a 
petition requesting an investigation. The ITC must issue a 
report on its investigation to the President no later than 60 
days before the termination of the import relief.
    Section 313(e) specifies that upon the termination of 
import relief, the rate of duty for the remainder of the 
calendar year is the rate that was scheduled to have been in 
effect one year after the initial provision of import relief. 
In the calendar year that follows the year of termination of 
import relief, the President may either apply the rate of duty 
set out in the relevant U.S. Schedule to the Agreement or 
eliminate the duty in equal annual stages until the end of the 
scheduled phase-out period.
    Section 313(f) exempts from relief any article that is (i) 
subject to import relief under the global safeguard provisions 
in U.S. law (Chapter 1 of Title II of the Trade Act of 1974); 
(ii) subject to import relief under Subtitle B of Title III of 
the Act (Sections 321 to 328); or (iii) subject to additional 
duties as an agricultural good under Section 202(b).
    Section 314 provides that no relief may be provided under 
Subtitle A to Title III of the Act after ten years from the 
date the Agreement enters into force, unless the scheduled 
tariff phase-out period for the article under the Agreement is 
greater than ten years, in which case relief may not be 
provided for that article after the scheduled phase-out period 
ends.
    Section 315 authorizes the President to provide 
compensation to Panama consistent with Article 8.5 of the 
Agreement if relief is ordered.
    Section 316 provides for the treatment of confidential 
business information submitted to the ITC in the course of 
investigations conducted under Title III of the Act.

Reason for change

    Sections 311 to 316 establish a mechanism for providing 
temporary import relief where a U.S. industry experiences 
serious injury or threat of serious injury by reason of 
increased import competition from Panama resulting from 
reduction or elimination of a duty under the Agreement. The 
Committee notes that the President is not required to provide 
relief if the relief will not provide greater economic and 
social benefits than costs. The Committee intends that 
administration of this safeguard be consistent with U.S. 
obligations under Section A of Chapter Eight (Trade Remedies) 
of the Agreement.

           Subtitle B: Textile and Apparel Safeguard Measures


                            SECTIONS 321-328

Present law

    No provision.

Explanation of provisions

    Subtitle B of Title III of the Act (Sections 321 to 328) 
authorizes the President to impose certain import relief 
measures when he determines that, as a result of the 
elimination or reduction of a duty provided under the 
Agreement, a Panamanian textile or apparel article is being 
imported into the United States in such increased quantities, 
in absolute terms or relative to the domestic market for that 
article, and under such conditions as to cause serious damage, 
or actual threat thereof, to the domestic industry.
    Section 321 provides that an interested party may file a 
request with the President for safeguard relief under Subtitle 
B of Title III of the Act. The President must review the 
request and determine whether to commence consideration of the 
request. Under Section 321(b), if the President determines that 
the request contains information necessary to warrant 
consideration on the merits, the President must publish notice 
in the Federal Register stating that the request will be 
considered and seeking public comments on the request.
    Section 322(a) provides that the President shall determine, 
pursuant to a request by an interested party, whether, as a 
result of the elimination or reduction of a duty provided under 
the Agreement, a Panamanian textile or apparel article is being 
imported into the United States in such increased quantities, 
in absolute terms or relative to the domestic market for that 
article, and under such conditions as to cause serious damage, 
or actual threat thereof, to a domestic industry producing an 
article that is like, or directly competitive with, the 
imported article. The President must make this determination 
within 30 days after the completion of consultations held 
pursuant to Article 3.24.4 of the Agreement.
    Section 322(b) sets forth the relief that the President may 
provide, which is an increase in the rate of duty on the 
articles in question to a level that does not exceed the lesser 
of the existing NTR (MFN) rate or the NTR (MFN) rate of duty 
that was imposed on the day before the Agreement entered into 
force.
    Section 323 of the Act provides that the period of relief 
shall be no longer than three years. If the initial period of 
import relief is less than three years, this period may be 
extended to a maximum aggregate period of three years if the 
President determines that continuation is necessary to remedy 
or prevent serious damage and to facilitate adjustment by the 
domestic industry to import competition and there is evidence 
the industry is making a positive adjustment to import 
competition.
    Section 324 provides that relief may not be granted to an 
article under this subtitle if relief has previously been 
granted under this subtitle for that article, or the article is 
subject to import relief under Subtitle A of Title III of the 
Act or under Chapter 1 of Title II of the Trade Act of 1974.
    Under Section 325, after a safeguard expires, the rate of 
duty on the article that had been subject to the safeguard 
shall be the rate that would have been in effect at that time, 
but for the safeguard action.
    Section 326 provides that the authority to provide 
safeguard relief under Subtitle B to Title III of the Act 
expires five years after the date on which the Agreement enters 
into force.
    Section 327 authorizes the President to provide 
compensation to Panama if relief is ordered.
    Section 328 provides for the treatment of confidential 
business information received by the President in connection 
with an investigation or determination under Subtitle B to 
Title III of the Act.

Reason for change

    Sections 321 to 328 implement the commitments under the 
Agreement relating to textile and apparel safeguard measures. 
The Committee intends that the provisions of Subtitle B of 
Title III of the Act be administered in a manner that is 
transparent and that will serve as an example to our trading 
partners. For example, in addition to publishing a summary of 
the request for safeguard relief, the Committee notes that the 
President plans to make available the full text of the request, 
subject to the protection of business confidential data, on the 
website of the Department of Commerce, International Trade 
Administration. In addition, the Committee encourages the 
President promptly to issue regulations on procedures for 
requesting such safeguard measures, for making determinations 
under Section 322(a), and for providing relief under Section 
322(b).

       Subtitle C: Cases Under Title II of the Trade Act of 1974


         SECTION 331: FINDINGS AND ACTION ON GOODS FROM PANAMA

Present law

    No provision.

Explanation of provision

    Section 331(a) provides that if the ITC makes an 
affirmative determination or a determination that the President 
may consider to be an affirmative determination in a global 
safeguard investigation under Section 202(b) of the Trade Act 
of 1974, the ITC must find and report to the President whether 
Panamanian imports of the article that qualify as originating 
goods under the Agreement are a substantial cause of serious 
injury or threat thereof. Under Section 331(b), if the ITC 
makes a negative finding under Section 331(a), the President 
may exclude any imports that are covered by the ITC's finding 
from the global safeguard action.

Reason for change

    This provision implements commitments under the Agreement 
relating to treatment of Panamanian imports in global safeguard 
investigations under Section 202(b) of the Trade Act of 1974.

                        Title IV: Miscellaneous


                     SECTION 401: ELIGIBLE PRODUCTS

Present law

    U.S. procurement law (such as the Buy American Act of 1933 
and the Buy American Act of 1988) limits procurement from 
certain foreign suppliers of goods and services in favor of 
U.S. providers of goods and services. Most discriminatory 
purchasing provisions are waived if the United States is a 
party to a bilateral or multilateral procurement agreement, 
such as the WTO Agreement on Government Procurement, or a 
bilateral or multilateral trade agreement that includes 
provisions on procurement.

Explanation of provision

    Section 401 implements Chapter 9 of the Agreement and 
amends the definition of ``eligible product'' in Section 
308(4)(A) of the Trade Agreements Act of 1979. As amended, 
Section 308(4)(A) provides that an ``eligible product'' means a 
product or service of Panama that is covered under the 
Agreement for procurement by the United States.

Reason for change

    This provision implements U.S. commitments under Chapter 9 
of the Agreement (Government Procurement).

 SECTION 402: MODIFICATION TO THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT

Present law

    Panama is currently a beneficiary under the Caribbean Basin 
Economic Recovery Act (``CBERA''). As such, goods from Panama 
receive preferential trade treatment when entering the United 
States subject to various requirements.

Explanation of provision

    Section 402 of the bill amends the CBERA in light of the 
fact that the President will withdraw Panama's status as a 
CBERA beneficiary country on the date that the Agreement takes 
effect.

Reason for change

    This provision amends section 212(b) of the CBERA to delete 
Panama from the list of countries that the President may 
designate as beneficiary countries.

                            Title V: Offsets


                     SECTION 501: CUSTOMS USER FEES

Present law

    Section 13031 of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (``COBRA'') authorizes the Secretary 
of the Treasury to collect certain service fees. Section 412 of 
the Homeland Security Act of 2002 authorized the Secretary of 
the Treasury to delegate such authority to the Secretary of 
Homeland Security. Provided for under 19 U.S.C. 58c(a)(1)-(8), 
these fees include: processing fees for air and sea passengers, 
commercial trucks, rail cars, private aircraft and vessels, 
commercial vessels, dutiable mail packages, barges and bulk 
carriers, and Customs broker permits. COBRA has been amended on 
several occasions. The current authorization for the collection 
of the passenger and conveyance processing fees is through 
January 14, 2020.

Explanation of provision

    Section 501 extends the passenger and conveyance processing 
fees authorized under Section 13031 of the COBRA through 
September 30, 2021.

Reason for change

    The Committee believes it is appropriate to extend the 
passenger and conveyance processing fees authorized under COBRA 
for budgetary offset purposes.

       SECTION 502: TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES

Present law

    In general, corporations are required to make quarterly 
estimated tax payments of their income tax liability. For a 
corporation whose taxable year is a calendar year, these 
estimated tax payments must be made by April 15, June 15, 
September 15, and December 15.

Explanation of provision

    For corporations with assets of at least $1 billion, the 
provision increases the amount of the required installment of 
estimated tax otherwise due in July, August, or September 2012 
and 2016 by 0.25 of such amount (determined without regard to 
any increase in such amount not contained in the Internal 
Revenue Code). The next required installment is reduced 
accordingly.

Reason for change

    The Committee believes it is appropriate to adjust the 
corporate estimated tax payments for budgetary offset purposes.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the vote of the Committee on Ways and Means in its 
consideration of the bill, H.R. 3079.

                       Motion To Report the Bill

    The bill, H.R. 3079, was ordered favorably reported by a 
rollcall vote of 32 yeas to 3 nays (with a quorum being 
present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
         Representative             Yea       Nay     Present     Representative      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Camp.......................        X   ........  .........  Mr. Levin........        X   ........  .........
Mr. Herger.....................        X   ........  .........  Mr. Rangel.......        X   ........  .........
Mr. Johnson....................        X   ........  .........  Mr. Stark........  ........        X   .........
Mr. Brady......................        X   ........  .........  Mr. McDermott....        X   ........  .........
Mr. Ryan.......................        X   ........  .........  Mr. Lewis........  ........        X   .........
Mr. Nunes......................        X   ........  .........  Mr. Neal.........        X   ........  .........
Mr. Tiberi.....................        X   ........  .........  Mr. Becerra......        X   ........  .........
Mr. Davis......................        X   ........  .........  Mr. Doggett......  ........  ........
Mr. Reichert...................        X   ........  .........  Mr. Thompson.....        X   ........  .........
Mr. Boustany...................        X   ........  .........  Mr. Larson.......  ........  ........
Mr. Roskam.....................        X   ........  .........  Mr. Blumenauer...        X   ........  .........
Mr. Gerlach....................        X   ........  .........  Mr. Kind.........        X   ........  .........
Mr. Price......................        X   ........  .........  Mr. Pascrell.....        X   ........  .........
Mr. Buchanan...................        X   ........  .........  Ms. Berkley......  ........        X   .........
Mr. Smith......................        X   ........  .........  Mr. Crowley......        X   ........  .........
Mr. Schock.....................        X   ........  .........
Ms. Jenkins....................        X   ........  .........
Mr. Paulsen....................        X   ........  .........
Mr. Berg.......................        X   ........  .........
Ms. Black......................        X   ........  .........
Mr. Reed.......................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of this bill, H.R. 3079, 
as reported: The Committee agrees with the estimate prepared by 
the Congressional Budget Office (CBO) which is included below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with subdivision 3(c)(2) of rule XIII of the 
Rules of the House of Representatives, the Committee states 
that the provisions of H.R. 3079 would reduce customs duty 
receipts due to lower tariffs imposed on goods from Panama.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by CBO, the following report prepared by CBO is 
provided:

                                     U.S. Congress,
                               Congressional Budget Office,
                                   Washington, DC, October 5, 2011.
Hon. Dave Camp,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3079, the United 
States-Panama Trade Promotion Agreement.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kalyani 
Parthasarathy.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                          Director.
    Enclosure.

H.R. 3079--United States-Panama Trade Promotion Agreement 
        Implementation Act

    Summary: H.R. 3079 would approve the trade promotion 
agreement between the government of the United States and the 
government of Panama that was signed on June 28, 2007. It would 
provide for tariff reductions and other changes in law related 
to implementation of the agreement. In addition, the bill would 
extend user fees collected by Customs and Border Protection 
(CBP) that expire under current law. The bill also would shift 
some corporate income tax payments between fiscal years.
    The Congressional Budget Office (CBO) and the staff of the 
Joint Committee on Taxation (JCT) estimate that enacting H.R. 
3079 would increase revenues by $118 million in 2012 but would 
reduce revenues by $6 million over the 2012-2021 period. CBO 
estimates that enacting H.R. 3079 would increase direct 
spending by $1 million in 2012 but would decrease direct 
spending by $8 million over the 2012-2021 period. Thus, the net 
impact of those effects is an estimated reduction in deficits 
of $2 million over the 2012-2021 period. Pay-as-you-go 
procedures apply because enacting the legislation would affect 
direct spending and revenues.
    Further, CBO estimates that implementing the legislation 
would cost $4 million over the 2012-2016 period, assuming the 
availability of appropriated funds.
    CBO has determined that the nontax provisions of H.R. 3079 
contain no intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.
    CBO has determined that the nontax provisions of the bill 
contain private-sector mandates with costs that would fall 
below the annual threshold established in UMRA for private-
sector mandates ($142 million in 2011, adjusted annually for 
inflation).
    JCT has determined that the tax provision of H.R. 3079 
contains no intergovernmental or private-sector mandates as 
defined in UMRA.
    Estimated cost to the federal government: The estimated 
budgetary impact of H.R. 3079 is shown in the following table. 
The costs of this legislation fall within budget functions 150 
(international affairs), 370 (commerce and housing credit), 750 
(administration of justice), and 800 (general government).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        By fiscal year, in millions of dollars--
                               -------------------------------------------------------------------------------------------------------------------------
                                  2012      2013      2014      2015      2016      2017      2018      2019      2020      2021    2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   CHANGES IN REVENUES

Preferential Trade Agreement..         *         *         *         *        -1        -1        -1        -1        -1        -2         -2         -6
Corporate Payment Shift.......       118      -118         0         0       172      -172         0         0         0         0        172          0
    Estimated Revenues........       118      -118         *         *       171      -173        -1        -1        -1        -2        170         -6

                                                              CHANGES IN DIRECT SPENDING\a\

Extend Customs User Fees:
    Estimated Budget Authority         0         0         0         0         0         0         0         0         0       -16          0        -16
    Estimated Outlays.........         0         0         0         0         0         0         0         0         0       -16          0        -16
Exemption from Merchandise
 Processing Fee:
    Estimated Budget Authority         1         1         1         1         1         1         1         1         0         0          5          8
    Estimated Outlays.........         1         1         1         1         1         1         1         1         0         0          5          8
    Total Direct Spending:\a\
        Estimated Budget               1         1         1         1         1         1         1         1         0       -16          5         -8
         Authority............
        Estimated Outlays.....         1         1         1         1         1         1         1         1         0       -16          5         -8

                                NET INCREASE OR DECREASE (-) IN THE DEFICIT FROM CHANGES IN DIRECT SPENDING AND REVENUES

Impact on Deficit.............      -117       119         1         1      -170       174         2         2         1       -14       -165        -2
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\In addition, CBO estimates that implementing the provisions of H.R. 3079 would have a discretionary cost of $4 million over the 2012-2016 period,
  assuming appropriation of the necessary amounts.
Notes: Components may not sum to totals because of rounding; *Indicates a loss of revenue less than $500,000.
Sources: Congressional Budget Office and the staff of the Joint Committee on Taxation.

    Basis of estimate: For the purposes of this estimate, CBO 
assumes that H.R. 3079 will be enacted early in fiscal year 
2012.

                                REVENUES

    Under the United States-Panama trade promotion agreement, 
tariffs on U.S. imports from Panama would be phased out over 
time. The tariffs would be phased out for individual products 
at varying rates, ranging from immediate elimination on the 
date the agreement enters into force to gradual elimination 
over 10 or more years. According to the U.S. International 
Trade Commission, the United States collected about $240,000 in 
customs duties in 2010 on $380 million of imports from Panama. 
However, since 1983, imports to the United States from Panama 
have been subject to reduced tariff rates in accordance with 
the Caribbean Basin Initiative (CBI), which was expanded in 
legislation enacted in 2000, and is scheduled to expire on 
September 30, 2020. The CBI overlaps to a large extent with the 
trade promotion agreement that would be implemented by this 
bill. As a result, enacting the bill would effectively replace 
trade preferences under the CBI for Panama until 2021, while 
also lowering tariff rates not covered by the CBI.
    Based on expected imports from Panama, CBO estimates that 
implementing the tariff schedule outlined in the U.S.-Panama 
trade promotion agreement would reduce revenues by less than 
$500,000 in 2012 and by $6 million over the 2012-2021 period, 
net of income and payroll tax offsets.
    This estimate includes the effects of increased imports 
from Panama that would result from the reduced prices of 
imported products in the United States, reflecting the lower 
tariff rates. It is likely that some of the increase in U.S. 
imports from Panama would displace imports from other 
countries. In the absence of specific data on the extent of 
this substitution effect, CBO assumes that an amount equal to 
one-half of the increase in U.S. imports from Panama would 
displace imports from other countries.
    H.R. 3079 also would shift payments of corporate estimated 
taxes between fiscal years 2012 and 2013 and between fiscal 
years 2016 and 2017. For corporations with at least $1 billion 
in assets, the bill would increase the portion of corporate 
estimated payments due from July through September in both 2012 
and 2016. JCT estimates that those changes would increase 
revenues by $118 million in 2012 and decrease them by $118 
million in 2013, and would increase revenues by $172 million in 
2016 and decrease them by $172 million in 2017.

                            DIRECT SPENDING

    Under current law, certain fees (known as COBRA fees, which 
were established in the Consolidated Omnibus Budget 
Reconciliation Act of 1985) collected by CBP will expire in 
January 2020. The bill would permit CBP to collect those fees 
from September 1, 2021, to September 30, 2021. CBO estimates 
that this change would increase offsetting receipts (a credit 
against direct spending) by $16 million in 2021.
    In addition, the bill would exempt imports from Panama from 
merchandise processing fees. CBO estimates that this would 
reduce offsetting receipts by $8 million over the 2012-2021 
period.

                   SPENDING SUBJECT TO APPROPRIATION

    Implementing provisions of H.R. 3079 would increase the 
costs of several agencies affected by the bill including:
           The Department of Commerce to provide 
        administrative support for dispute-settlement panels 
        established in the agreement;
           The International Trade Commission to 
        conduct investigations, if petitioned, into whether 
        Panamanian imports might threaten or cause serious 
        injury to domestic competitors; and
           The Department of the Treasury and the 
        United States Trade Representative to establish 
        regulations to carry out provisions of the agreement.
    Based on information from the agencies, CBO estimates that 
those activities would cost $4 million over the 2012-2016 
period, assuming appropriation of the necessary amounts.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

           CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 3079 AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON WAYS AND MEANS ON OCTOBER 5, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        By fiscal year, in millions of dollars--
                               -------------------------------------------------------------------------------------------------------------------------
                                  2012      2013      2014      2015      2016      2017      2018      2019      2020      2021    2012-2016  2012-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       NET INCREASE OR DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact      -117       119         1         1      -170       174         2         2         1       -14       -165         -2
Memorandum:
    Changes in Revenues.......       118      -118         0         0       171      -173        -1        -1        -1        -2        170         -6
    Changes in Outlays........         1         1         1         1         1         1         1         1         0       -16          5         -8
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments: 
CBO has determined that the nontax provisions of H.R. 3079 
contain no intergovernmental mandates as defined in UMRA, and 
would impose no costs on state, local, or tribal governments. 
JCT has determined that the tax provision of H.R. 3079 contains 
no intergovernmental mandates as defined in UMRA.
    Estimated impact on the private sector: CBO has determined 
that the nontax provisions of H.R. 3079 would impose private-
sector mandates, as defined in UMRA, by extending the customs 
user fees and by enforcing new recordkeeping requirements on 
exporters of goods to Panama. CBO estimates that the aggregate 
costs of those mandates would not exceed the annual threshold 
established in UMRA for private-sector mandates ($142 million 
in 2011, adjusted annually for inflation). JCT has determined 
that the tax provision of H.R. 3079 contains no private-sector 
mandates as defined in UMRA.
    Estimate prepared by: Federal Revenues: Kalyani 
Parthasarathy. Federal Spending: Sunita D'Monte, Mark 
Grabowicz, Matthew Pickford, and Susan Willie. Impact on State, 
Local, and Tribal Governments: Lisa Ramirez-Branum. Impact on 
the Private Sector: Marin Randall.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis. Frank Sammartino, Assistant Director for 
Tax Analysis.

                    D. Macroeconomic Impact Analysis

    In compliance with clause 3(h)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made by the Joint Committee on Taxation with respect to the 
provisions of the bill amending the Internal Revenue Code of 
1986: the effects of the tax provisions of the bill on economic 
activity are so small as to be incalculable within the context 
of a model of the aggregate economy.

   V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE OF 
                            REPRESENTATIVES


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee concluded that it is appropriate and timely to 
consider H.R. 3079, as reported. In addition, the legislation 
is governed by procedures of the Bipartisan Trade Promotion 
Authority Act of 2002.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the performance goals and 
objectives of the part of this legislation that authorizes 
funding are for (a) the payment of the U.S. share of the 
expenses incurred in dispute settlement proceedings established 
under Chapter 20 of the U.S.-Panama Trade Promotion Agreement 
and (b) the establishment and operation of an office within the 
Department of Commerce responsible for providing assistance to 
the panels in such proceedings.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (P.L. 104-4). The 
Committee has determined that the revenue provisions of the 
bill do not impose a Federal mandate on the private sector. The 
Committee has determined that the revenue provisions of the 
bill do not impose a Federal intergovernmental mandate on 
State, local, or tribal governments.

                D. Applicability of House Rule XXI 5(b)

    Clause 5(b) of rule XXI of the Rules of the House of 
Representatives provides, in part that, ``A bill or joint 
resolution, amendment, or conference report carrying a Federal 
income tax increase may not be considered as passed or agreed 
to unless so determined by a vote of not less than three-fifths 
of the Members voting, a quorum being present.'' The Committee 
has carefully reviewed the sections of the bill and states that 
the bill does not involve any Federal income tax rate increases 
within the meaning of the rule.

                       E. Tax Complexity Analysis

    The Joint Committee on Taxation, in consultation with the 
Internal Revenue Service and the Department of the Treasury, 
will provide a tax complexity analysis to Members of the 
Committee as soon as practicable after the report is filed.

  F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

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


         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, 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):

SECTION 13031 OF THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT OF 
                                  1985

          * * * * * * *

SEC. 13031.   FEES FOR CERTAIN CUSTOMS SERVICES.

  (a) * * *
  (b) Limitations on Fees.--(1) * * *
          * * * * * * *
  (21) No fee may be charged under subsection (a)(9) or (10) 
with respect to goods that qualify as originating goods under 
section 203 of the United States-Panama Trade Promotion 
Agreement Implementation Act. Any service for which an 
exemption from such fee is provided by reason of this paragraph 
may not be funded with money contained in the Customs User Fee 
Account.

           *       *       *       *       *       *       *

  (j) Effective Dates.--(1) * * *

           *       *       *       *       *       *       *

  (3)(A) * * *

           *       *       *       *       *       *       *

  (D) Notwithstanding subparagraph (B)(i), fees may be charged 
under paragraphs (1) through (8) of subsection (a) during the 
period beginning on September 1, 2021, and ending on September 
30, 2021.

           *       *       *       *       *       *       *

                              ----------                              


TARIFF ACT OF 1930

           *       *       *       *       *       *       *


TITLE IV--ADMINISTRATIVE PROVISIONS

           *       *       *       *       *       *       *


Part III--Ascertainment, Collection, and Recovery of Duties

           *       *       *       *       *       *       *


SEC. 508.   RECORDKEEPING.

  (a) * * *

           *       *       *       *       *       *       *

  (k) Certifications of Origin for Goods Exported Under the 
United States-Panama Trade Promotion Agreement.--
          (1) Definitions.--In this subsection:
                  (A) Records and supporting documents.--The 
                term ``records and supporting documents'' 
                means, with respect to an exported good under 
                paragraph (2), records and documents related to 
                the origin of the good, including--
                          (i) the purchase, cost, and value of, 
                        and payment for, the good;
                          (ii) the purchase, cost, and value 
                        of, and payment for, all materials, 
                        including indirect materials, used in 
                        the production of the good; and
                          (iii) the production of the good in 
                        the form in which it was exported.
                  (B) Panama tpa certification of origin.--The 
                term ``Panama TPA certification of origin'' 
                means the certification established under 
                article 4.15 of the United States-Panama Trade 
                Promotion Agreement that a good qualifies as an 
                originating good under such Agreement.
          (2) Exports to panama.--Any person who completes and 
        issues a Panama TPA certification of origin for a good 
        exported from the United States shall make, keep, and, 
        pursuant to rules and regulations promulgated by the 
        Secretary of the Treasury, render for examination and 
        inspection all records and supporting documents related 
        to the origin of the good (including the certification 
        or copies thereof).
          (3) Retention period.--The person who issues a Panama 
        TPA certification of origin shall keep the records and 
        supporting documents relating to that certification of 
        origin for a period of at least 5 years after the date 
        on which the certification is issued.

           *       *       *       *       *       *       *


SEC. 514.   PROTEST AGAINST DECISIONS OF THE CUSTOMS SERVICE.

  (a) * * *

           *       *       *       *       *       *       *

  (l) Denial of Preferential Tariff Treatment Under the United 
States-Panama Trade Promotion Agreement.--If U.S. Customs and 
Border Protection or U.S. Immigration and Customs Enforcement 
of the Department of Homeland Security finds indications of a 
pattern of conduct by an importer, exporter, or producer of 
false or unsupported representations that goods qualify under 
the rules of origin provided for in section 203 of the United 
States-Panama Trade Promotion Agreement Implementation Act, 
U.S. Customs and Border Protection, in accordance with 
regulations issued by the Secretary of the Treasury, may 
suspend preferential tariff treatment under the United States-
Panama Trade Promotion Agreement to entries of identical goods 
covered by subsequent representations by that importer, 
exporter, or producer until U.S. Customs and Border Protection 
determines that representations of that person are in 
conformity with such section 203.

           *       *       *       *       *       *       *


SEC. 520.   REFUNDS AND ERRORS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Goods Qualifying Under Free Trade Agreement Rules of 
Origin.--Notwithstanding the fact that a valid protest was not 
filed, the Customs Service may, in accordance with regulations 
prescribed by the Secretary, reliquidate an entry to refund any 
excess duties (including any merchandise processing fees) paid 
on a good qualifying under the rules of origin set out in 
section 202 of the North American Free Trade Agreement 
Implementation Act, section 202 of the United States-Chile Free 
Trade Agreement Implementation Act, section 203 of the 
Dominican Republic-Central America-United States Free Trade 
Agreement Implementation Act, section 202 of the United States-
Oman Free Trade Agreement Implementation Act, [or] section 203 
of the United States-Peru Trade Promotion Agreement 
Implementation Act [for which], or section 203 of the United 
States-Panama Trade Promotion Agreement Implementation Act for 
which no claim for preferential tariff treatment was made at 
the time of importation if the importer, within 1 year after 
the date of importation, files, in accordance with those 
regulations, a claim that includes--
          (1) * * *

           *       *       *       *       *       *       *


Part V--Enforcement Provisions

           *       *       *       *       *       *       *


SEC. 592.   PENALTIES FOR FRAUD, GROSS NEGLIGENCE, AND NEGLIGENCE.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Maximum Penalties.--
          (1) * * *

           *       *       *       *       *       *       *

          (13) Prior disclosure regarding claims under the 
        united states-panama trade promotion agreement.--An 
        importer shall not be subject to penalties under 
        subsection (a) for making an incorrect claim that a 
        good qualifies as an originating good under section 203 
        of the United States-Panama Trade Promotion Agreement 
        Implementation Act if the importer, in accordance with 
        regulations issued by the Secretary of the Treasury, 
        promptly and voluntarily makes a corrected declaration 
        and pays any duties owing with respect to that good.

           *       *       *       *       *       *       *

  (l) False Certifications of Origin Under the United States-
Panama Trade Promotion Agreement.--
          (1) In general.--Subject to paragraph (2), it is 
        unlawful for any person to certify falsely, by fraud, 
        gross negligence, or negligence, in a Panama TPA 
        certification of origin (as defined in section 508 of 
        this Act) that a good exported from the United States 
        qualifies as an originating good under the rules of 
        origin provided for in section 203 of the United 
        States-Panama Trade Promotion Agreement Implementation 
        Act. The procedures and penalties of this section that 
        apply to a violation of subsection (a) also apply to a 
        violation of this subsection.
          (2) Prompt and voluntary disclosure of incorrect 
        information.--No penalty shall be imposed under this 
        subsection if, promptly after an exporter or producer 
        that issued a Panama TPA certification of origin has 
        reason to believe that such certification contains or 
        is based on incorrect information, the exporter or 
        producer voluntarily provides written notice of such 
        incorrect information to every person to whom the 
        certification was issued.
          (3) Exception.--A person shall not be considered to 
        have violated paragraph (1) if--
                  (A) the information was correct at the time 
                it was provided in a Panama TPA certification 
                of origin but was later rendered incorrect due 
                to a change in circumstances; and
                  (B) the person promptly and voluntarily 
                provides written notice of the change in 
                circumstances to all persons to whom the person 
                provided the certification.

           *       *       *       *       *       *       *

                              ----------                              


TRADE ACT OF 1974

           *       *       *       *       *       *       *


       TITLE II--RELIEF FROM INJURY CAUSED BY IMPORT COMPETITION

CHAPTER 1--POSITIVE ADJUSTMENT BY INDUSTRIES INJURED BY IMPORTS

           *       *       *       *       *       *       *


SEC. 202.   INVESTIGATIONS, DETERMINATIONS, AND RECOMMENDATIONS BY 
                    COMMISSION.

  (a) Petitions and Adjustment Plans.--
          (1) * * *

           *       *       *       *       *       *       *

          (8) The procedures concerning the release of 
        confidential business information set forth in section 
        332(g) of the Tariff Act of 1930 shall apply with 
        respect to information received by the Commission in 
        the course of investigations conducted under this 
        chapter, part 1 of title III of the North American Free 
        Trade Agreement Implementation Act, title II of the 
        United States-Jordan Free Trade Area Implementation 
        Act, title III of the United States-Chile Free Trade 
        Agreement Implementation Act, title III of the United 
        States-Singapore Free Trade Agreement Implementation 
        Act, title III of the United States-Australia Free 
        Trade Agreement Implementation Act, title III of the 
        United States-Morocco Free Trade Agreement 
        Implementation Act, title III of the Dominican 
        Republic-Central America-United States Free Trade 
        Agreement Implementation Act, title III of the United 
        States-Bahrain Free Trade Agreement Implementation Act, 
        title III of the United States-Oman Free Trade 
        Agreement Implementation Act, [and] title III of the 
        United States-Peru Trade Promotion Agreement 
        Implementation Act, and title III of the United States-
        Panama Trade Promotion Agreement Implementation Act. 
        The Commission may request that parties providing 
        confidential business information furnish 
        nonconfidential summaries thereof or, if such parties 
        indicate that the information in the submission cannot 
        be summarized, the reasons why a summary cannot be 
        provided. If the Commission finds that a request for 
        confidentiality is not warranted and if the party 
        concerned is either unwilling to make the information 
        public or to authorize its disclosure in generalized or 
        summarized form, the Commission may disregard the 
        submission.

           *       *       *       *       *       *       *

                              ----------                              


TRADE AGREEMENTS ACT OF 1979

           *       *       *       *       *       *       *


TITLE III--GOVERNMENT PROCUREMENT

           *       *       *       *       *       *       *


SEC. 308.   DEFINITIONS.

   As used in this title--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Eligible products.--
                  (A) In general.--The term ``eligible 
                product'' means, with respect to any foreign 
                country or instrumentality that is--
                          (i) * * *

           *       *       *       *       *       *       *

                          (x) a party to the United States-
                        Panama Trade Promotion Agreement, a 
                        product or service of that country or 
                        instrumentality which is covered under 
                        that agreement for procurement by the 
                        United States.

           *       *       *       *       *       *       *

                              ----------                              


CARIBBEAN BASIN ECONOMIC RECOVERY ACT

           *       *       *       *       *       *       *


TITLE II--CARIBBEAN BASIN INITIATIVE

           *       *       *       *       *       *       *


Subtitle A--Duty-Free Treatment

           *       *       *       *       *       *       *


SEC. 212.   BENEFICIARY COUNTRY.

  (a) * * *
  (b) In designating countries as ``beneficiary countries'' 
under this title the President shall consider only the 
following countries and territories or successor political 
entities:

Anguilla
Antigua and Barbuda
Bahamas, The
Barbados
Belize
Costa Rica
Dominica
Dominican Republic
El Salvador
Grenada
Guatemala
Guyana
Haiti
Honduras
Jamaica
Nicaragua
[Panama]
Saint Lucia
Saint Vincent and the Grenadines
Suriname
Trinidad and Tobago
Cayman Islands
Montserrat
Netherlands Antilles
Saint Christopher-Nevis
Turks and Caicos Islands
Virgin Islands, British
  

In addition, the President shall not designate any country a 
beneficiary country under this title--
          (1) * * *

           *       *       *       *       *       *       *


                         VII. ADDITIONAL VIEWS

    We support the United States-Panama Trade Promotion 
Agreement. The Agreement is the product of our work over many 
years to better ensure that U.S. trade policy reflects American 
values and shapes globalization to spread its benefits more 
broadly. We write these additional views to describe how this 
Agreement achieves those objectives and to put this Agreement 
in its broader context.

                       THE AGREEMENT WITH PANAMA

    On May 10, 2007, we won a major breakthrough to change U.S. 
trade policy. We insisted that this Agreement, and others like 
it, be renegotiated to: (1) require our Panama to comply with 
international labor standards, fully enforceable through the 
Agreement's normal dispute settlement mechanism; (2) require 
Panama to comply with key mutually-accepted international 
environmental agreements, again fully enforceable through 
dispute settlement; (3) help to ensure that poor patients in 
Panama have access to affordable medicines; (4) allow U.S. 
government agencies to base government procurement decisions on 
compliance with core labor standards; (5) make clear that 
nothing in the agreement should be interpreted to provide 
foreign investors greater rights than U.S. investors have under 
U.S. law; and (6) make clear that the United States has the 
non-challengeable authority to prevent foreign companies from 
operating in U.S. ports, based on national security concerns.
    We then worked with the Obama Administration to ensure that 
Panama addressed a variety of deficiencies in Panama's labor 
laws--in particular, those laws related to the right of unions 
to organize and collectively bargain. In April of this year, 
Panama's President signed into law the last remaining changes 
needed to bring Panama's laws into compliance with the labor 
obligations of the agreement.
    We also pressed for Panama to sign and implement a tax 
information exchange agreement (``TIEA'') with the United 
States. For six years, the last Administration tried but failed 
to conclude a TIEA with Panama. But, once the Agreement was 
conditioned on the conclusion of the TIEA, Panama was persuaded 
to sign, ratify and fully implement the TIEA. According to the 
Economist Intelligence Unit, Panama's ratification ``marks the 
most significant step to date on the road to ending over four 
decades of virtually water-tight banking secrecy laws.''\1\ In 
July, the OECD officially removed Panama from its ``grey list'' 
of tax havens.\2\
---------------------------------------------------------------------------
    \1\Economist Intelligence Unit, ``Tax Deal Lifts FTA's Chances,'' 
May 23, 2011.
    \2\http://www.oecd/org/dataoecd/50/0/43606256.pdf.
---------------------------------------------------------------------------
    This Agreement also provides a more balanced approach to 
ensuring that the rights of U.S. investors are protected while 
preserving the rights of governments to protect legitimate 
public welfare objectives. Early arbitral decisions under the 
investor-state dispute settlement mechanism of the North 
American Free Trade Agreement demonstrated the need for 
improvements in this regard. Thus, unlike NAFTA's investment 
chapter, the investment chapter of the Panama Agreement: (1) 
clarifies that regulations that protect legitimate public-
welfare objectives, such as public health, safety, and the 
environment, generally are not considered expropriations; (2) 
provides for the expeditious dismissal of frivolous investor 
claims; (3) provides for transparency in the arbitration 
process; (4) provides for input in the arbitration process from 
environmental groups and other non-governmental organizations; 
and (5) clarifies that the agreement does not provide foreign 
investors greater substantive rights than U.S. investors have 
under U.S. law. The Agreement also limits so-called ``minimum 
standard'' investor claims (e.g., regarding ``fair and 
equitable treatment'' of investors) and provides a mechanism 
for the governments to agree to dispose of investor claims.
    The United States has consistently maintained a trade 
surplus with Panama for over 20 years ($5.7 billion in 2010), 
and the trade agreement is widely expected to increase that 
surplus.

                  THE AGREEMENT IN ITS BROADER CONTEXT

    The May 10 components that are included in the Panama FTA 
are, without question, some of the most forward-looking 
provisions in U.S. trade agreements. While more work can be 
done to ensure that our trade agreements reflect our values and 
interests, those components are a critical basis to the 
successful conclusion of any future bilateral or regional trade 
agreement. New agreements also should address new challenges, 
such as unfair competition from, and distortions caused by, 
state-owned and state-supported enterprises.
    Moreover, it is important to recognize that the May 10 
Changes were just one part of our vision for a ``new trade 
policy for America.'' In March 2007, House Democrats coalesced 
around a number of initiatives to improve U.S. trade policy, 
including in areas that eventually were reflected in the May 10 
Changes. Beyond those changes, initiatives included the need 
to: (1) strengthen the enforcement of trade agreements and U.S. 
trade laws (in particular, by addressing massive Chinese 
subsidies and violations of intellectual property rights; 
eliminating currency manipulation; and by addressing non-tariff 
barriers that limit U.S. exports); (2) strengthen American 
competitiveness, including through worker retraining, education 
and health care improvements, and community revitalization 
programs; and (3) foster development in the poorest countries 
of the world.
    Some progress has been made on these initiatives. For 
example, the 2009 reforms to Trade Adjustment Assistance (TAA) 
dramatically improved the program, including by covering 
service workers and many more manufacturing workers, increasing 
training funding and mandating counseling to ensure appropriate 
training, promoting on-the-job, part-time and longer-term 
training, and by increasing the TAA health coverage tax credit. 
We now have agreement to extend the program, which the new 
Majority allowed to expire in February. And while modifications 
have been made, both the integrity of the program and the major 
2009 improvements are preserved. And the Affordable Care Act of 
2010 will make the United States more competitive by reining in 
health care costs.
    But much more needs to be done, particularly with respect 
to enforcement and global trade imbalances. For example, Fred 
Bergsten, the Director of the Peterson Institute for 
International Economics recently described China's currency 
manipulation as ``by far the largest protectionist measure 
adopted by any country since the Second World War--and probably 
in all of history.'' Eliminating currency misalignments (caused 
in large part by China's currency manipulation) is expected to 
improve the U.S. current account position by $200 billion to 
$250 billion annually and produce at least a million good jobs, 
mainly in manufacturing. Years of ``quiet diplomacy'' to 
address this issue have produced only meager results. And more 
tools and resources are needed to address the many trade-
distorting policies of our trading partners, including China's 
massive subsidies and other industrial policies in key sectors 
such as clean energy. Those policies have been allowed to 
persist even as important incentives for our companies like the 
Section 48C Advanced Manufacturing Credit have lapsed due to 
Republican opposition.
    In addition to leveling the playing field, more must be 
done to invest in American competitiveness and to create 
American jobs. For example, last month, the President submitted 
the American Jobs Act to Congress. Among other things, the bill 
would help to rebuild and modernize American schools and put 
teachers laid off by State budget cuts back to work. It would 
make needed investments in our nation's infrastructure to 
create jobs today and lay the foundation for future growth. 
Enactment of the President's American Jobs Act will help to 
promote American competitiveness in the global economy.
                                   Sander M. Levin.
                                   Jim McDermott.
                                   Xavier Becerra.
                                   John B. Larson.
                                   Richard E. Neal.
                                   Mike Thompson.
                                   Earl Blumenauer.
                                   Charles B. Rangel.