For other versions of this document, see http://wikileaks.org/wiki/CRS-97-957 ------------------------------------------------------------------------------ 97-957 A CRS Report for Congress Received through the CRS Web Fast-Track Trade Negotiating Authority: A Comparison of 105th Congress Legislative Proposals Updated September 15, 1998 Jeanne J. Grimmett Legislative Attorney American Law Division Congressional Research Service ~ The Library of Congress ABSTRACT This report provides a side-by-side comparison of H.R. 2621 and S. 2400, as reported, 105th Congress bills that would provide the President with trade negotiating authority and accord certain resulting agreements and implementing bills expedited -- or "fast-track" -- legislative consideration. Fast-Track Trade Negotiating Authority: A Comparison of 105th Congress Legislative Proposals Summary This report provides a side-by-side comparison of H.R. 2621 and S. 2400, as reported, 105th Congress bills that would provide the President with trade negotiating authority and accord certain resulting agreements and implementing bills expedited -- or "fast-track" -- legislative consideration. In September 1997 the President requested that a new fast-track statute be enacted, given that authorities in the Omnibus Trade and Competitiveness Act of 1988 (OTCA) had expired. OTCA provisions were last used to approve and implement the GATT Uruguay Round agreements. H.R. 2621 was reported by the House Ways and Means Committee October 23, 1997 (H.Rept. 105-341, Part I). A planned House vote was postponed November 10, with no further floor action taken. The Senate Finance Committee reported a fast-track bill (S. 1269) October 8, 1997 (S.Rept. 105-102). It was debated in November and returned to the Senate calendar February 26, 1998. On July 31, the Committee reported S. 2400, the Trade and Tariff Act of 1998, an original bill containing fast-track provisions that are essentially the same as those found in S. 1269 (S.Rept. 105-280). Floor action has been anticipated in both Houses. The House and Senate bills contain the same basic elements contained in the OTCA: a list of general and specific negotiating objectives; a temporary (but extendable) grant of authority to the President to enter into tariff and nontariff agreements and to implement tariff agreements by proclamation; a requirement that nontariff barrier agreements be approved and implemented by statute; a provision that any such statute will be accorded expedited legislative treatment provided the President abide by certain statutory notification and consultation requirements; procedural provisions for extending the general availability of fast-track procedures to a given date, as well as for prohibiting their use for specific trade agreements; incorporation of the fast-track procedures set forth in § 151 of the Trade Act of 1974; and a provision that the procedural provisions of the bill are an exercise of Congress' constitutional rulemaking authority and are subject to change by rule. Differences from the OTCA include the addition of labor and environmental aims as either principal U.S. negotiating objectives or new "international economic policy objectives," limitations on what may be included in legislation for which fast-track procedures are available, and additional requirements placed on the President to notify and consult with Congress during the trade agreements process. Among the ways in which the bills differ are: a greater number of negotiating objectives in the Senate bill; additional attention to agriculture in the House bill; different emphases in each as to labor and environmental issues; committee pre-negotiation disapproval in the Senate bill; broader notification and consultation requirements in the Senate bill with respect to tariff agreements; and some differences in how provisions that may be contained in implementing legislation are characterized. Each bill would extend current trade adjustment assistance (TAA) programs for workers and firms and the NAFTA worker adjustment assistance program for two years (i.e., until 2000), with the House bill mandating a GAO study on TAA programs. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Side-by-Side Comparison of H.R. 2621 and S. 2400 (Title II) . . . . . . . . . . . . . . 6 Fast-Track Trade Negotiating Authority: A Comparison of 105th Congress Legislative Proposals Introduction This report provides a side-by-side comparison of H.R. 2621 and S. 2400, as reported, 105th Congress bills that would provide the President with trade negotiating authority and accord certain resulting agreements and implementing bills expedited -- or "fast-track"-- legislative consideration. The President requested in September 1997 that a new fast-track statute be enacted (and submitted his own bill on the matter), given the expiration of authorities in the Omnibus Trade and Competitiveness Act of 1988 (OTCA), P.L. 101-418, Title I. The OTCA provisions were last used to approve and implement the GATT Uruguay Round agreements in the Uruguay Agreements Act of 1994, P.L. 103-465. The House Ways and Means Committee reported H.R. 2621, the Reciprocal Trade Agreements Authorities Act of 1997, with amendments, October 23, 1997 (H.Rept. 105-341, Part I). The bill was placed on the Union Calendar November 4, but a planned House vote was postponed November 10.1 There has been no further floor action on the bill to date. A Senate fast-track bill, S. 1269, was reported by the Senate Finance Committee October 8, 1997 (S.Rept. 105-102). The bill was the subject of several days of floor debate in November 1997 and was returned to the Senate calendar February 26, 1998.2 In June, the Speaker of the House stated that fast-track trade legislation would be on the House agenda later in the year.3 On July 31, the Senate Finance Committee reported S. 2400, the Trade and Tariff Act of 1998, an original bill containing fast-track provisions essentially the same as those found in S. 1269 (S.Rept. 105-280). S. 2400's fast-track provisions are contained in Title II of the bill, which has the short title, "Reciprocal Trade Agreements Act of 1998." Floor action on fast-track legislation has been anticipated in both Houses. The House and Senate bills contain the same basic elements contained in the OTCA: a list of general and specific negotiating objectives; a temporary (but extendable) grant of authority to the President to enter into tariff and nontariff 1 "House puts off trade vote after Clinton seeks delay to corral votes," AP, November 10, 1997, available in LEXIS, NEWS Library, CURNWS File. 2 144 Cong. Rec. D130 (daily ed. February 26, 1998). 3 "Gingrich Says Fast Track, Funding for IMF on Fall Agenda," National Journal's Congress Daily, June 25, 1998, available in LEXIS, NEWS Library, CURNWS File. CRS-2 agreements and to implement tariff agreements by proclamation; a requirement that nontariff barrier agreements be approved and implemented by statute; a provision that any such statute will be accorded expedited legislative treatment provided the President abide by certain statutory notification and consultation requirements; procedural provisions for extending the general availability of fast-track procedures to a given date, as well as for prohibiting their use for specific trade agreements; incorporation by reference of the fast-track procedures contained in section 151 of the Trade Act of 1974; and a provision that the procedural provisions of the bill are an exercise of Congress' constitutional rulemaking authority and are subject to change by rule. Within this basic structure, however, the bills differ from the OTCA in a variety of ways, many of these restricting the availability of fast-track procedures. Among these: ! they incorporate certain labor and environmental aims as principal negotiating objectives, as separate "international economic policy objectives" that complement the trade agreements process, or as both ! they limit the use of fast-track procedures to agreements meeting principal negotiating objectives and prevent the use of these procedures to modify U.S. law where international economic policy objective are implicated ! they further define (and limit) the elements of implementing legislation that may be considered under fast-track procedures, refining the Trade Act's language allowing provisions in an implementing bill that are "necessary or appropriate" to implement an agreement ! they require the President, between the time he notifies Congress of his intent to enter into an agreement and his submission of an implementing bill, to submit to Congress an assessment of which changes in U.S. law will be required as a result of the agreement ! they prescribe additional Executive Branch consultations during the pre- negotiating and negotiating phases of the trade agreements process. The bills also differ from each other in a number of respects, including negotiating objectives, pre-negotiation committee disapproval, their formulation of provisions that may be included in implementing legislation, and other points. For example: ! though the bills share negotiating objectives in a number of areas (e.g., trade barriers, trade in services, foreign investment, intellectual property, agriculture, and the use of foreign governmental regulations in certain trade-distorting ways), the Senate bill contains most of the principal negotiating objectives set forth in the OTCA (though updating some of them), while the House bill contains fewer (though also updated) objectives ! the House bill contains guidance for negotiators regarding domestic policy aims (e.g., health and safety) applicable to all principal negotiating objectives, CRS-3 while the Senate bill contains similar language applicable only to negotiations on services and investment and refers to these aims as being "legitimate" (the latter limited approach was taken by the OTCA) ! the House pays additional attention to agriculture in requiring special pre- negotiation consultations on the matter, placing concern over import-sensitive items within negotiating objectives, and creating a Special Agricultural Negotiator within the Office of the United States Trade Representative (USTR) ! while each bill would seek, as a principal negotiating objective, to prevent foreign governments from lowering regulatory standards to gain competitive advantage, the breadth of foreign measures to be addressed in negotiations differs: the House bill refers to the waiving of or derogation from existing environmental, health, safety, or labor measures, while the Senate bill refers to the use of foreign government regulations and other government measures generally for this end and includes within this broad category the specific actions and regulatory areas mentioned the House bill (each bill specifically refers to child labor, however)(note also that House bill titles this section "Labor, Environment and Other Matters," while the Senate bill labels its similar section, "Regulatory Competition") ! each of the sections containing these regulatory objectives contains different provisos, the House bill focusing on its meaning for foreign law, the Senate bill on its meaning for U.S. law ! the bills differ in emphasis as to their "international economic policy objectives," with the Senate bill treating them as supportive of the trade agreements process and the House bill providing that the President should ensure that U.S. trade agreements "complement and reinforce" these other policy goals ! with respect to U.S. worldwide advancement of labor standards as an "international economic policy objective," the Senate bill is more specific than the House bill as to the U.S. mandate in the International Labor Organization (ILO), a forum in which this global action may take place: the Senate bill provides that the U.S. objective is to seek the establishment of an ILO mechanism for the systematic examination and reporting on the promotion and enforcement by ILO members with respect to specifically named worker rights, while the House bill provides for working within the ILO to encourage the observance and enforcement of core labor standards (each specifically refers, however to a prohibition on exploitative child labor) ! only the Senate bill provides for two-committee disapproval of the use of fast- track procedures for a specific nontariff barrier agreement, a procedure that was available in the OTCA for free trade area negotiations authorized in the Act ! the Senate bill contains additional provisions for notification of and consultation with Congress with respect to tariff agreements CRS-4 ! while each bill requires that trade agreements addressing both tariff and nontariff barriers must reduce, eliminate, or prohibit duties, trade barriers, or other distortions, the bills differ in the negotiating objectives that must be met in any such agreements: the House bill provides that the agreements may make progress toward any of the negotiating objectives set forth in the bill, while the Senate bill limits these agreements to those making progress toward meeting principal negotiating objectives.4 ! the bills differ somewhat in characterizing what may be included in an implementing bill subject to fast-track procedures: the Senate bill requires that the bill must approve a trade agreement that achieves one of the principal negotiating objectives of the bill, while the House bill requires that the agreement simply be one that is entered into under its authority for such agreements; while each refers to implementing provisions as being "necessary," the House bill relates this requirement to provision that are "directly related" to principal trade negotiating objectives; while the House bill allows provisions that define and clarify, or provisions that are related to, the operation or effect of the provisions of the trade agreement, the Senate bill allows provisions that are "otherwise related to the enforcement, and adjustment to the effects of such agreement and are directly related to trade"; the House bill additionally allows provisions for adjustment assistance to workers and firms adversely affected by trade in general (each allows for provisions necessitated by budget law). 4 It is unclear from the House bill whether agreements authorized under § 103 that met "international economic policy objectives" set forth in § 102(c) could be approved under fast- track procedures where no change in statute was necessary. Section 102(c) does not authorize the use of fast-track procedures "to modify United States law." Were mere approval of an agreement to be considered such a modification, the use of fast track procedures to approve such an agreement would seemingly be precluded. The House bill also provides that provisions of law necessary for the operation or implementation of U.S. rights or obligations under § 103(b) agreements generally may only be included in an implementing bill subject to fast-track procedures if these provisions are directly related to the bill's principal trade negotiating objectives (see § 103(b)(3)(B)). In the past, Congress made all changes to domestic law that it viewed were needed to implement the agreements within the implementing legislation and included in it a provision that denies domestic effect to provisions of agreements approved in the legislation that conflict with federal law. See, e.g., Uruguay Round Agreements Act (URAA), P.L. 103-465, § 102(a). As explained in the House Ways and Means Committee report on the URAA: "This treatment is ... consistent with the Congressional view that necessary changes in Federal statutes should be specifically enacted, not preempted by international agreements. Since the Uruguay Round agreements as approved by the Congress, or any subsequent amendment to those agreements, are not self-executing, any dispute settlement findings that a U.S. statute is inconsistent, with an agreement also cannot be implemented except by legislation approved by the Congress unless consistent implementation is permissible under the terms of the statute." H.Rept. 103-826, Pt. 1, at 25. Note also that S. 2400 requires the President, before an agreement is entered into, to notify Congress as to whether the agreement includes subject matter for which supplemental implementing legislation may be required which is not subject to fast-track procedures (see § 2004(b)(2)(C)). CRS-5 S. 2400 essentially restates the fast-track provisions of S. 1269, with the following modifications: (1) it revises a provision regarding workers' rights by naming a specific Declaration of the International Labor Organization (ILO) that should be effectively implemented within the ILO (§ 2002(c)(1)(C)(ii)); (2) it requires that the International Trade Commission submit an assessment of the economic impact of any resulting trade agreements no later than 90 days after they have been entered into (§ 2004(e)); and (3) it adds agreements resulting from negotiations to achieve a free trade area of the Americas to the list of trade agreements exempted from the pre- negotiation notice and consultation requirements of the bill (§ 2006(a)(4)). As this report is based on the text of the reported bills, it should be added that legislative history may provide further interpretation and clarification of the bills' provisions. The side-by-side comparison of the H.R. 2621 and Title II of S. 2400 begins on the following page. CRS-6 Side-by-Side Comparison of H.R. 2621 and S. 2400 (Title II) H.R. 2621, as reported (H.R. Rept. 105-341, Part I) S. 2400, Title II, as reported (S.Rept. 105-280) Short title Reciprocal Trade Agreements Authorities Act of 1997 Reciprocal Trade Agreements Act of 1998 [§ 101] [§ 2001] Trade negotiating States four "overall negotiating objectives" for agreements Provides that the purposes of the Act are to achieve, objectives subject to § 103 of the bill: through trade agreements affording mutual benefits, the (general) following: ! to obtain more open, equitable, and reciprocal market access ! more open, equitable, and reciprocal market access for U.S. goods, services, and investment ! to obtain the reduction or elimination of barriers and distortions that are directly related to trade and that ! the reduction or elimination of barriers and other decrease market opportunities for U.S. exports or trade-distorting policies and practices otherwise distort U.S. trade ! a more effective system of international trading ! to further strengthen the system of international disciplines and procedures trading disciplines and procedures, including dispute settlement ! economic growth, higher living standards, and full employment in the U.S., and economic growth and ! to foster economic growth, raise living standards, development among U.S. trading partners and promote full employment in the U.S. and to [§ 2002(a)] enhance the global economy [§ 102(a)] CRS-7 Trade negotiating Lists 8 principal trade negotiating objectives: Lists 15 principal negotiating objectives for agreements objectives (principal) subject to provisions of sec. 3 of bill: ! trade barriers and distortions ! trade in services ! reduction of barriers to trade in goods ! foreign investment ! trade in services ! intellectual property ! foreign investment ! transparency ! intellectual property ! reciprocal trade in agriculture ! agriculture ! labor, the environment, and other matters ! unfair trade practices ! WTO extended negotiations [§ 102(b)] ! safeguards ! improvement of the WTO and multilateral trade negotiation agreements ! dispute settlement ! transparency ! developing countries ! current account surpluses ! access to high technology ! border taxes ! regulatory competition [§ 2002(b)] -- Trade barriers Objectives are: Objective is to obtain competitive opportunities for U.S. exports in foreign markets substantially equivalent to the ! to expand competitive market opportunities for U.S. opportunities afforded foreign exports to U.S. markets, exports and to obtain fairer and more open including the reduction or elimination of tariff and conditions of trade by reduction or eliminating tariff nontariff trade barriers, including -- and nontariff barriers and policies and practices of foreign governments directly related to trade that ! tariff and nontariff disparities remaining from decrease market opportunities for U.S. exports or previous rounds of multilateral tariff negotiations otherwise distort U.S. trade that have put U.S. exports at a competitive disadvantage in world markets ! to obtain reciprocal tariff and nontariff barrier elimination agreements, with particular attention to ! measures identified in USTR's annual "National those tariff categories covered in § 11(b) of the Trade Estimate" Uruguay Round Agreements Act (URAA) ! (i.e., products covered in certain extended Uruguay ! tariff elimination for those products identified in § Round negotiations) [§ 102(b)(1)] 111(b) of URAA and accompanying Statement of Administrative Action [§ 2002(b)(1)] CRS-8 -- Trade in services Objective is to reduce or eliminate barriers to international Objectives are: trade in services, including regulatory and other barriers that deny national treatment or unreasonably restrict the ! to reduce or eliminate barriers to, or other establishment or operations of service suppliers distortions of, international trade in services, [§ 102(b)(2)] including regulatory and other barriers that deny or unreasonably restrict the establishment and operation of service suppliers in foreign markets ! to develop internationally agreed rules, including dispute settlement procedures, which are consistent with U.S. commercial policies and will reduce or eliminate such barriers, or other distortions, and help ensure fair, equitable opportunities for foreign markets [§ 2002(b)(2)(A)] Compare guidance for negotiators in all principal U.S. negotiators to take into account legitimate U.S. negotiating areas set forth in § 102(d)(1)(below) domestic objectives, including protection of legitimate health, safety, essential security, environmental, consumer, and employment opportunity interests [§ 2002(b)(2)(B)] Above guidance "shall not be construed to authorize any modification of United States law" [§ 2002(b)(2)(B)] CRS-9 - Foreign investment Objective is to reduce or eliminate artificial or trade- Objectives are: distorting barriers to trade related foreign investment by: ! to reduce or eliminate artificial or trade-distorting ! reducing or eliminating exceptions to the national barriers to foreign investment treatment principle ! to expand the principle of national treatment ! freeing the transfer of funds relating to investment ! to reduce unreasonable barriers to establishment ! reducing or eliminating performance requirements and other unreasonable barriers to the establishment ! to develop internationally agreed rules through the and operation of investments negotiation of investment agreements, including dispute settlement procedures, which will help ! seeking to establish standards for expropriation and ensure a free flow of investment, and will reduce or compensation for expropriation, consistent with U.S. eliminate the trade distortive effects of certain legal principals and practices trade-related investment measures [§ 2002(b)(3)(A)] ! providing meaningful procedures for resolving investment disputes [§ 102(b)(3)] Same negotiating guidance and statutory construction as for negotiations on trade in services [§ 2002(b)(3)(B)] Compare guidance for negotiators in all principal negotiating areas set forth in § 102(d)(1)(below). CRS-10 -- Intellectual property Objectives for "trade-related" intellectual property are: Objectives regarding intellectual property are: (1) to further promote adequate and effective protection of (1) to further promote adequate and effective protection of intellectual property rights (IPR), including through: IPR, by: ! [no provision regarding changes in foreign law] ! seeking enactment and effective enforcement of foreign intellectual property laws ! ensuring accelerated and full implementation of ! accelerating and ensuring full implementation of TRIPS Agreement (particularly regarding U.S. TRIPS Agreement and achieving improvements in industries whose products are subject to lengthiest its standards developing country transition periods) and ensuring that any new multilateral or bilateral agreements embody IP protections as strong as those in NAFTA ! new technologies: same as House bill ! providing strong protection for new and emerging technologies and new methods of transmitting and distributing products embodying intellectual property ! discrimination: same as House bill ! preventing or eliminating discrimination with respect to matters affecting the availability, acquisition, scope, maintenance, use and enforcement of IPR ! enforcement of IPR: same as House bill ! providing strong enforcement of IPR, (2) to secure fair, equitable and non-discriminatory market (2) to secure fair, equitable and non-discriminatory market access opportunities for U.S. persons that rely upon IPR access opportunities for U.S. persons that rely upon IPR (no definition of "U.S. person" in bill) ("U.S. person" defined in § 109 of bill) [§ 102(b)(4)] (3) to recognize that inclusion in WTO of IPR disciplines and dispute settlement is without prejudice to other No provision in House bill regarding recognition of other complementary international initiatives [§ 2002(b)(4)] international initiatives. [Sec. 102(B)(4)][Sec. 102(b)(4)(C) No provision in House bill regarding recognition of other international initiatives CRS-11 --Transparency Objective is to obtain broader application of principle of Objective is to obtain broader application of principle of transparency through: transparency through: ! increased and more timely public access to ! increased public access to information regarding information regarding trade issues and activities of trade issues international trade institutions ! clarification of costs and benefits of trade policy ! increased openness of dispute settlement actions proceedings, including under the WTO [§ 102(b)(5)] ! observance of open and equitable procedures of U.S. trading partners and within the WTO No provision in House bill regarding transparency of costs [§ 2002(b)(10)] and benefits of trade policy actions. CRS-12 -- Agriculture Objective is to obtain competitive opportunities for U.S. Objectives, along with those in § 1123(b) of Food Security exports in foreign markets substantially equivalent to those Act of 1985 (7 USC § 1736r(b)), are to achieve, on afforded by the U.S. and to achieve fairer and more open expedited basis as feasible, more open and fair conditions condition of trade in bulk and value-added commodities by: of trade in agricultural commodities by: ! reducing or eliminating tariffs and charges that ! improving disciplines for agricultural trade, decrease U.S. market opportunities (focus on high including disciplines on restrictive or trade- tariffs or subsidy regimes of major producing distorting import and export practices such as those countries; provide reasonable adjustment periods for that would impact perishable or cyclical products import-sensitive products; consult with Congress before negotiating on import-sensitive items) ! increasing U.S. agricultural exports by eliminating trade barriers and reducing or eliminating the ! reducing or eliminating subsidies that decrease U.S. subsidization of agricultural production consistent market opportunities or unfairly distort markets with U.S. policy of agricultural stabilization in cyclical and unpredictable markets ! improving disciplines and dispute settlement mechanisms to eliminate practices that unfairly ! creating a free and more open agricultural trading decrease U.S. market access opportunities or distort system by resolving questions pertaining to export markets, particularly with respect to import-sensitive and other trade-distorting subsidies, market pricing, products (specified practices listed below) and market access ! improving import relief mechanisms to recognize the ! eliminating and reducing substantially other specific unique characteristics of perishable agriculture constraints to fair trade and more open market access, such as tariff, quotas and other tariff ! taking into account whether a negotiating country practices has adhered to existing trade obligations owed the U.S. ! improving disciplines that address practices that unfairly decrease US. market access opportunities ! taking into account whether a product is subject to or distort markets (specific practices listed below) distortions because of failure of a major producing [§ 2002(b)(5)] country to adhere to existing trade obligations owed the U.S. ! CRS-13 -- Agriculture (cont.) ! otherwise ensuring that WTO countries have made meaningful market liberalization commitments in agriculture [§ 102(b)(6)] -- Agriculture: foreign Bill lists the following practices as those for which Bill lists the following as practices for which improved trade distorting improved disciplines and dispute settlement are needed: disciplines are needed: practices to be addressed in ! unfair or trade-distorting activities of state trading ! unfair or trade-distorting activities of state trading negotiations enterprises and other administrative mechanisms, enterprises and other administrative mechanisms with emphasis on requiring price transparency in the including promoting price transparency operation of state trading enterprises and such other mechanisms ! unjustified trade restriction or commercial ! new technologies: same as House bill requirements affecting new technologies, including biotechnology ! unjustified sanitary or phytosanitary (S&P) ! unjustified S&P restrictions (no reference to restrictions, including those not based on scientific Uruguay Round as in House bill) principles in contravention of Uruguay Round agreements ! other unjustified technical barriers to trade (TBTs) ! TBTs: same as House bill ! restrictive rules in the administration of tariff-rate ! tariff-rate quotas: same as House bill quotas [§ 102(b)(6)(C)(i)-(v)] [§ 2002(b)(5)(F)(i)-(v)] CRS-14 -- Labor, environment, Titled "Labor, the Environment, and Other Matters" Titled "Regulatory Competition" competition Negotiating objective is to address following aspects of Negotiating objectives regarding the use of government foreign government policies and practices regarding the regulation or other practices by foreign governments to above-named topics "that are directly related to trade": obtain a competitive advantage to their domestic producers, service providers, or investors, and thereby reduce market access of U.S. goods, services, and investment, are: ! to ensure that foreign labor, environmental, health or safety policies and practices do not arbitrarily or ! to ensure that government regulation and other unjustifiably discriminate or serve as disguised government practices do not unfairly discriminate barriers to trade against U.S. goods, services, or investment ! to ensure that foreign governments do not derogate from or waive existing domestic environmental, ! to prevent the use of foreign government regulation health, safety or labor measures, including measures and other government practices, including the that deter exploitative child labor, as an lowering of, or derogation from, existing labor encouragement to gain competitive advantage in (including child labor), health and safety, or international trade or investment environmental standards, for the purpose of attracting investment or inhibiting U.S. exports ! Proviso for subparagraph addressing derogation from existing foreign measures: "Nothing in this ! Proviso for subsection addressing prevention of subparagraph is intended to address changes to a regulatory incentives: "Nothing in subparagraph (b) country's laws that are consistent with sound shall be construed to authorize inclusion in an macroeconomic development" [§ 102(b)(7)] implementing bill, or in an agreement subject to an implementing bill, provisions that would restrict the autonomy of the United States in these areas" [§ 2002(b)(15)] -- WTO extended WTO negotiations in financial services, civil aircraft and No provision negotiations rules of origin to be guided by those listed in URAA for these areas [§ 102(b)(8)] CRS-15 International economic President should take into account the relationship between Provides that it is U.S. policy to reinforce the trade policy objectives trade agreements and other important priorities of the U.S. agreements process by four means: (IEPOS): environment, and seek to ensure that U.S. trade agreements complement labor, intellectual and reinforce other policy goals; states four U.S. priorities: ! expanding the production of goods and trade in property, currency goods in services to ensure the optimal use of the markets ! seeking to ensure that trade and environmental world's resources, while seeking to protect and policies are mutually supportive [§ 102(c)(1)(A)] preserve the environment and to enhance the international means for doing so [§ 2002(c)(1)(D)] ! seeking to preserve the environment and enhance the international means for doing so, while optimizing ! promoting respect for workers' rights by: (i) the use of the world's resources [§ 102(c)(1)(B)] reviewing the relationship between workers' rights and the operation of international trading systems ! promoting respect for worker rights and the rights and specific trade arrangements; and (ii) seeking of children and an understanding of the relationship effective implementation in the ILO of the between trade and worker rights; particularly by Declaration on Fundamental Principles and Rights working with the International Labor Organization at Work and its monitoring mechanism to ensure (ILO) to encourage the observance of core labor the systematic examination of and reporting on the standards, including the prohibition on exploitative extent to which ILO members promote and enforce child labor [§ 102(c)(1)(C)] the freedom of association, the right to organize and bargain collectively, and prohibitions on the use ! supplementing and strengthening standards for of forced labor, exploitative child labor, and protection of intellectual property (IPR) under discrimination in employment [§ 2002(c)(1)(C)] conventions administered by international organizations other than the WTO, expanding these ! expanding IPR protection (same language as House conventions to cover new and emerging bill) [§ 2002(c)(1)(B)] technologies, and eliminating discrimination and unreasonable exceptions or preconditions to such ! fostering stability in currency markets by developing protection [§ 102(c)(1)(D)] mechanisms to assure greater coordination and cooperation between trade and monetary systems House bill does not include provision on international and institutions so as to protect against trade currency markets contained in Senate bill. consequences of dramatic and unanticipated currency movements [§ 2002(c)(1)(A)] Section 102(c) may not be construed to authorize the use of sec. 103 trade authorities procedures (i.e., fast track legislative procedures) to modify U.S. law [Sec. 102 (c)(2)] CRS-16 Restriction on use of Nothing in subsection addressing international economic Same as House bill [§ 2002(c)(2)] fast track procedures to policy objectives may be construed to authorize the use of implement agreements fast track legislative procedures to modify U.S. law involving IEPOS [§ 102(c)(2)] Guidance for In pursuing principal negotiating objectives, U.S. Similar provision attached to principal negotiating negotiators: preserving negotiators shall take into account U.S. domestic objectives in services and investment only (see above) domestic objectives objectives, including the protection of health and safety, essential security, environmental, consumer, and employment opportunity interests, and their related law and regulations [§ 102(d)(1)] Guidance for Requires USTR, during course of negotiations: Similar provision regarding congressional trade advisors in negotiators: § 2004(d), but excludes language on preservation of trade consultations with ! to consult closely and regularly with congressional laws, etc., and additionally specifies that consultation must Congress/preserve trade advisers on trade policy take place immediately prior to initialing an agreement rigorous enforcement of trade laws/avoid ! to preserve ability of U.S. to enforce rigorously its weakening of trade trade laws (including antidumping and countervailing disciplines duty laws) and avoid agreements which lessen effectiveness of international and domestic disciplines on unfair trade, especially dumping and subsidies, in order to ensure that U.S. workers, agricultural producers, and firms can compete fully on fair terms and enjoy benefits of reciprocal trade concessions [§ 102(d)(2)] Uruguay Round In determining whether to enter into negotiations with a No provision performance particular country, President must take into account extent to which it has adhered to, or accelerated its implementation of, Uruguay Round obligations [§ 102(e)] CRS-17 Trade agreement Whenever the President determines that one or more Same as House bill, except for notification requirement authority: tariff barrier existing foreign or U.S. duties or other import restrictions [§ 2003(a)] agreements are unduly burdening or restricting U.S. foreign trade and that the purposes, policies, and objectives of the Act will be Senate bill contains notification and consultation promoted thereby, the President may enter into trade provisions for tariff agreements in § 2004(a)-(b)(below), agreements with foreign countries before October 1, 2001 both prior to negotiations and prior to entry into (extendable to October 1, 2005) [§ 103(a)(1)(A)] agreement President must notify Congress of intent to enter into a tariff agreement [§ 103(a)(1)] Grants the President authority to proclaim tariffs he determines are "required or appropriate" to carry out the agreement, within a statutorily-defined range and subject to certain other restrictions [§ 103(a)(1)(B), (2)-(4)] . Duty reductions or increases that do not fall within the President's proclamation authority may only take effect if they are enacted in an implementing bill [§ 103(a)(5)] CRS-18 -- Other tariff Grants the President additional tariff proclamation authority Grants the President additional proclamation authority, proclamation authority if the U.S. agrees to duty modifications or staged rate with the following differences: reductions in a negotiation for the reciprocal elimination or harmonization of duties under WTO auspices or as part of ! regarding WTO negotiations, modification or an interim agreement leading to the formation of a regional staged rate reduction must be agreed to in free-trade area; authority subject to statutory consultation negotiations for the elimination or harmonization of and layover requirements [§ 103(a)(6)] duties on a reciprocal basis within the same tariff categories Note: This authority is similar to the additional proclamation authority granted the President in § 111(b) of ! authority limited to dates for which trade agreement the Uruguay Round Agreements Act (URAA), but extends authorities are provided in the bill (i.e., before it to interim agreements leading to the formation of a October 1, 2001, or, if extended, before October 1, regional free-trade area. Both the House and Senate bills 2005) provide that the tariff agreement and proclamation authority contained in each does not affect the operation of ! President must notify and consult with Congress § 111(b) of the URAA (See H.R. 2621, § 103(a)(7); S. under § 2004(a) 2400, § 2003(a)(7)). ! modifications or reductions may be proclaimed only with respect to articles included in President's notification [§ 2003(a)(6)] See note in adjoining column regarding similar authority in Uruguay Round Agreements Act. CRS-19 Trade agreement Whenever the President determines that -- Generally same as House bill [§ 2003(b)(1)(A)] authority: tariff and non-tariff barrier (1) one or more existing foreign or U.S. duties or any agreements other import restriction, or any other barrier to, or other distortion of international trade, unduly burdens or restricts U.S. foreign trade or adversely affects the U.S. economy, or (2) the imposition of any such barrier or distortion is likely to have such an outcome, and that the purposes, policies, and objectives of the Act will be promoted, the President may enter into trade agreements, as described in the bill, before October 1, 2001 (extendable to October 1, 2005) [§ 103(b)(1)(A),(C)] -- Description of trade Agreements entered into under the section must provide for Same as House bill [§ 2003(b)(1)(B)] agreements that may be entered into under this (1) the reduction or elimination of such a duty, restriction, Note: Agreements covered by or governed by this section authority barrier, or other distortion, or will subsequently be referred to in this table as "§ 2003(b) agreements." (2) the prohibition of, or limitation of, such a barrier or other distortion ) [§ 103(b)(1)(B)] Note: Agreements covered by or governed by this section will subsequently be referred to in this table as "§ 103(b) agreements." -- Conditions Section 103(b) agreements may be entered into under this Section 2003(b) agreements may be entered into only if: section only if: ! they make progress in meeting the negotiating ! they make progress in meeting the negotiating objectives set forth in § 2(b)(i.e. "principal objectives set forth in § 102 negotiating objectives" only) ! the President notifies and consults with Congress as ! the President notifies and consults with Congress as required under § 104 of the Act [§ 103(b)(2)] required under § 2004 of the Act [§ 2003(b)(2)] CRS-20 Bills qualifying for fast Fast track procedures in § 151 of the Trade Act of 1974 Fast track procedures in § 151 of the Trade Act of 1974 track consideration apply to implementing bills that consist only of: apply to implementing bills that consist only of: ! a provision approving a § 103(b) agreement and ! provisions that approve a § 2003(b) agreement approving the statement of administrative action (if meeting one or more of the § 2002(b) principal any) proposed to implement the agreement negotiating objectives and approving the statement of administrative action (if any) proposed to ! provisions directly related to principal negotiating implement the agreement objectives achieved in the agreement (see § 102(b)), if the provisions are "necessary" for the operation or ! provisions that (1) are "necessary" to implement the implementation of U.S. rights or obligations under agreement or (2) are "otherwise related to the the trade agreement implementation, enforcement, and adjustment to the effects of such agreement and are directly related to ! provisions that "define and clarify, or provisions that trade" are related to," the operation or effect of the agreement's provisions (e.g., provide that U.S. ! provisions necessary for compliance with § 252 of domestic law prevails over a conflicting agreement the Balanced Budget and Emergency Deficit provision) Control Act of 1985 in implementing the agreement [§ 2003(b)(3)] ! provisions to provide adjustment assistance to workers and firms adversely affected by trade Note: Procedures in § 151 of Trade Act of 1974 -- i.e., fast-track legislative procedures -- are referred to in the ! provisions necessary for compliance with § 252 of Senate bill as "trade agreement approval procedures." the Balanced Budget and Emergency Deficit Control These will subsequently be referred to in this table as Act of 1985 in implementing the agreement either "trade agreement approval procedures" or "fast- [§ 103(b)(3)] track procedures." Note: Procedures in § 151 of Trade Act of 1974 -- i.e., fast-track legislative procedures -- are referred to in the House bill as "trade authorities procedures." These will subsequently be referred to in this table as either "trade authorities procedures" or "fast-track procedures." CRS-21 Extending trade Trade authorities procedures apply to implementing bills Same as House bill, but specifies that portion of agreement authorities: submitted with § 103(b) agreements after September 30, President's report to Congress dealing with negotiating congressional 2001 and before October 1, 2005, if, "and only if," the progress is to focus on progress made in negotiations disapproval procedures President requests an extension and neither House of toward achieving items set forth in Act's statement of Congress adopts an extension disapproval resolution before purposes and principal negotiating objectives only (House October 1, 2001 [§ 103(c)] bill specifies progress made toward purposes, policies and objectives of the Act in general, thus including Presidential request must include report to Congress by international economic policy objectives) [§ 2003(c)] July 1, 2001; President must also inform ACTPN, which must also report to Congress; reports may be classified [§ 103(c)(2)-(4)] Notice and consultation For § 103(b) agreements, President must (1) give Congress Same as House bill, but requirements apply both to § before negotiation written notice at least 90 calendar days before initiating 2003(a) tariff agreements as well as to § 2003(b) negotiations and (2) before and after submitting notice, agreements [§ 2004(a)] consult regarding negotiations with the Senate Finance Committee, the House Ways and Means Committee and such other congressional as the President deems appropriate [§ 104(a)(1)] -- Pre-negotiation Separate requirement to consult with House Ways and No provision consultations for Means Committee and Senate Finance Committee and with agreements involving statutory advisory groups before initiating negotiations on trade barriers and matters directly related to § 102(b) negotiating objectives distortions and labor, involving "trade barriers and other distortions" and "labor, environment and other environment, and other matters" regarding the manner in matters. which the negotiations will address the reduction or elimination of specific barriers or foreign government policies or practices [§ 104(a)(2)] CRS-22 -- Pre-negotiation Before initiating negotiations with a country on matters No provision consultation directly related to "reciprocal trade in agriculture," requirement for President must assess whether U.S. tariffs bound in agreements on Uruguay Round are lower than those bound by that agriculture country; must also consider worldwide bound tariffs applied to U.S. products are higher than U.S. tariffs and whether negotiations may address such disparity [§ 104(a)(3)] President must consult with House Ways and Means and Agriculture Committees, and Senate Finance and Agriculture Committees concerning results of assessment, whether it is appropriate for U.S. to agree to further tariff reductions, and how all negotiating objectives will be met [§ 104(a)(3)] Consultation with Before entering into any § 103(b) agreement, the President Generally same as House bill, but applies both to § Congress before must consult with House Ways and Means and Senate 2003(a) tariff agreements and § 2003(b) agreements; also agreements entered into Finance Committees and each other House and Senate some differences and additions as to consultations: (1) committee having jurisdiction over legislation involving instead of the general effect of agreements on existing matters affected by the agreement laws, consultations on implementation must specifically [§ 104(b)(1)] address whether the agreement contains any subject matter for which supplemental implementing legislation may be Scope of consultations includes: required which is not subject to fast-track procedures, and ! nature of agreement (2) consultations must also include"any other agreement" ! how it meets statutory purposes, policies and the President has entered into or intends to enter into with objectives the country or countries involved [§ 2004(b)-(c)] ! implementation of agreement under § 105, including general effect of the agreement on existing laws [§ 104(b)(2)] Advisory committee reports must be provided to the Same as House bill [§ 2004(c)] President, Congress, and the USTR by 30 days after the President notifies the Congress of negotiation or intent to enter into an agreement [§ 104(c)] CRS-23 Consultation before No provision Requires the USTR to consult closely and on timely basis agreements initialed during negotiations (including before agreement is initialed) with congressional trade advisers appointed under 19 U.S.C. § 2211, and with Senate Finance and House Ways and Means Committees [§ 2004(d)] International Trade No provision Requires the President, at least 90 days before entering Commission (ITC) into a § 2003(b) agreement, to provide the ITC with assessment of details of the agreement and to request it to provide an agreements assessment of its likely economic impact on the U.S. economy as a whole and on specific industry sectors; the ITC report is to be submitted to the President and Congress no later than 90 days after President enters into the agreement; in preparing the report, the ITC must review and assess available empirical literature on the agreement [§ 2004(e)] CRS-24 Implementation of Agreements entered into under § 103(b) shall enter into Same as House bill [§ 2005(a)(1)] trade agreements force for the U.S. "if (and only if)": ! the President, at least 90 calendar days before the date of entry into the agreement, notifies the House and Senate of his intention to enter into the agreement, and promptly publishes notice in the Federal Register ! within 60 calendar days after entry, the President submits to the Congress a description of changes to existing laws that the President considers would be required in order to bring the U.S. into compliance with the agreement ! after entering into the agreement, the President submits a copy of the official legal text of the agreement, a draft of an implementing bill, a statement of any administrative action (SAA) proposed to implement the trade agreement, and statutorily required supporting information ! the implementing bill is enacted into law [§ 104(a)] Note: Like the OTCA, the bill does not impose a time limit on when an implementing bill must be submitted; however, the bill would newly require the President to submit a description of probable changes in law between the time he notifies Congress of his intent to enter into the agreement and the time he submits the bill. CRS-25 Reciprocal benefits To avoid free-rider problems, the bill must provide that Provides that such reciprocity provisions be recommended agreement benefits and obligations apply only to parties, it to Congress by the President [§ 2005(a)(3)] such treatment is consistent with the agreement; may also provide that agreement does not apply uniformly to all parties, if consistent with the agreement [§ 105(a)(3)] Limitations on fast- No provision Fast-track procedures do not apply to any implementing track procedures: pre- bill approving an agreement entered into under § 2003(b) negotiation committee if the Senate Finance Committee and the House Ways and disapproval Means Committee disapprove of the negotiations before the close of the 90-calendar day period beginning on the date notice is provided under § 2004(a)(1) with respect to its negotiation [§ 2005(b)(1)] Limitations on fast- Fast-track procedures will not apply to an implementing bill Same as House, but specifies that each House separately track procedures (lack with respect to a trade agreement entered into under sec. agree to the resolution within a 60-day period of notice or 3(b) if, during the 60-day period beginning on the date that [§ 2005(b)(2)] consultation) one House agrees to a procedural disapproval resolution for lack of notice or consultations, the other House separately agrees to the same [§ 105(b)] Exercise of Extension disapproval procedures and procedural Same as House bill, but includes procedure for committee congressional disapproval resolution provisions are enacted as enacted as disapproval [§ 2005(c)] rulemaking exercise of House and Senate rulemaking power and "with full recognition of the constitutional right of either House to change the rules ... at any time, in the same manner, and to the same extent as any other rule of that House" [§ 105(c)] CRS-26 Possible inapplicability Notwithstanding conditions for § 03(b) agreements, the Notwithstanding the bill's provisions requiring notice to of fast-track conditions applicability of fast-track procedures to such agreements Congress of negotiations falling within the scope of the to certain agreements resulting from negotiations begun before enactment of the President's added proclamation authority and the bill's bill is to be determined without regard to pre-negotiation provisions placing conditions on agreements that may be notification requirements in § 104(a); a procedural entered into under § 2003(b), the bill's notification disapproval resolution on the basis of President's failure or requirements do not apply to certain agreements whose refusal to comply with these requirements will not be in negotiations began before enactment; the applicability of order; President must consult with Congress as soon as fast-track procedures is to be determined without regard feasible after enactment [§ 106(b)] to § 2004(a) consultation requirements; a procedural disapproval resolution based on the President's failure or Provision applies to any of the following: refusal to comply with these requirements will not be in order [§ 2006(a)-(b)] ! a WTO information technology agreement entered into under WTO auspices Provision applies to agreements resulting from: ! a WTO financial services agreement entered into ! WTO negotiations on information technology under extended WTO negotiations in this area ! negotiations or work programs initiated pursuant to ! a rules of origin agreement entered into under the a Uruguay Round agreement WTO work program in the area ! negotiations with Chile ! an agreement entered into with Chile [§ 106(a)] ! negotiations to achieve a free trade area of the Americas [§ 2006(a)] Chief agricultural Establishes in the Office of the USTR a Chief Agricultural No provision negotiator Negotiator (appointed by the President with advice and consent of Senate, with rank of Ambassador and serving at the pleasure of the President) having as her or his primary function the conduct of trade negotiations relating to agricultural commodities and other functions as the USTR may direct [§ 107] Conforming Amends various provisions to insert language referring to Same as House bill [§ 2007] amendments the RTAAA of 1997; makes certain sections of the Trade Act of 1974 applicable to agreements entered into and other actions under the RTAAA of 1997 [§ 108] Definitions Defines "United States person," "Uruguay Round Defines "distortion," "trade," "Uruguay Round agreements," "World Trade Organization," and "WTO Agreements," "WTO Agreement," "WTO." and "WTO Agreement" [§ 109] member" (distortion "includes, but is not limited to a subsidy"; trade "includes, but is not limited to ... trade in both goods and services" and "foreign investment by United States persons, especially if such investment has implications for trade in goods and services) [§ 2008]" Trade adjustment Extends trade adjustment assistance programs (TAA) for Same as House bill [§ 3001] assistance workers and firms and the NAFTA adjustment assistance program for two years -- i.e., to the year 2000 [§§ 201-202] Requires the GAO to prepare a report evaluating TAA No provision programs by October 1, 1999 [§ 203] ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-97-957