For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32698 ------------------------------------------------------------------------------ Order Code RL32698 CRS Report for Congress Received through the CRS Web Trade Legislation in the 108th Congress Updated December 30, 2004 Raymond J. Ahearn Specialist in International Trade and Finance Foreign Affairs, Defense, and Trade Division Congressional Research Service ~ The Library of Congress Trade Legislation in the 108th Congress Summary When the 108th Congress convened in January 2003, few observers predicted that trade would be a top legislative concern. Congress, just six months earlier, had passed by a narrow margin the Trade Act of 2002 (P.L. 107-210), the first major piece of trade legislation in almost a decade. Nevertheless, trade remained a top- level domestic and foreign policy issue in 2003 and 2004. The 108th Congress completed work on a number of major trade bills. Most notably, bills to implement free trade agreements (FTAs) with Chile, Singapore, Australia, and Morocco, and to enhance trade benefits for the countries of Sub- Saharan Africa were passed and signed by the President. Legislation repealing an export tax benefit long ruled a violation of U.S. World Trade Organization (WTO) obligations passed, thereby moving the European Union closer to ending sanctions on $4 billion of U.S. exports. In addition, Congress passed a miscellaneous tariff bill that eliminated or suspended tariffs on hundreds of products and repealed the 1916 Antidumping Act, which also had been ruled a violation of WTO provisions. The implementing bills for the four FTAs were passed by wide margins, running contrary to predictions of some observers that Congress was turning protectionist or anti-trade. All agreements received strong backing from the business community, but encountered resistance from organized labor. They eventually will eliminate tariffs on almost all traded goods, cover trade in services, and provide enhanced protection for intellectual property rights. While the overall effects of any of the agreements on the U.S. economy are expected to be minimal, each agreement provides U.S. exporters and investors with additional market openings and opportunities. Protection for the U.S. steel industry was a prominent concern of the 108th Congress. In 2003, many Members supported the steel industry's efforts to persuade President Bush to extend the import restraint regime he had imposed in 2002, while others supported steel-consuming industries' efforts to roll back the import restraints. The more globalized U.S. economy contributed to rising concerns in Congress about whether U.S. companies were increasingly "offshoring" or relocating service sector jobs to low-wage developing countries, as well as to generalized anxiety about job losses associated with China's growing trade prowess and its policy of pegging its currency to the dollar. Congress also engaged in an intensive debate generated by growing consumer interest in purchasing more affordable prescription drugs from abroad. The issue was addressed in elements of three bills introduced in the Senate and one bill which passed the House in 2003. A number of export policy issues were also the subject of legislative activity in the 108th Congress. While policies that promote exports through financing and efforts to open foreign markets attracted a limited amount of legislative activity, the restrictive component of export policy, particularly economic sanctions targeting Burma, Cuba, and Syria, received more attention. This report will not be updated. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Trade Agreements and WTO Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 FTA Implementing Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 WTO Compliance Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 FSC/ETI Export Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 1916 Antidumping Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Byrd Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Congressional Support for the WTO . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Import-Related Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Jobs and Import Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 "Offshoring" of Service Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 China Trade Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Trade and Tariff Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 AGOA Acceleration Act of 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Miscellaneous Tariff Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Importing Prescription Drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Export-Related Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Export Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Economic Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Export Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Implications for the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Appendix A. Major Trade Legislation Introduced in the 108th Congress . . . . . . 21 Appendix B. Trade-Related Hearings in the108th Congress . . . . . . . . . . . . . . . . 40 House of Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Senate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 List of Tables Table 1. Trade Agreements Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Table 2. WTO Dispute Settlement Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Table 3. Trade and Tariff Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Table 4. Permanent Normal Trade Relations Status . . . . . . . . . . . . . . . . . . . . . . 26 Table 5. Importing Prescription Drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Table 6. Trade Remedy Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Table 7. Other Issues in Import Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Table 8. China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Table 9. "Offshoring" Service Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Table 10. Export Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Table 11. Trade Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Table 12. Export Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Trade Legislation in the 108th Congress Introduction U.S. trade policy encompasses a wide array of government policies and laws that affect trade negotiations, the world trading system, imports, and exports. Negotiations to liberalize trade flows are intended to make the U.S. economy more efficient and productive. The rules of the world trading system are designed to facilitate trade flows by providing a stable and predictable environment. Policies affecting imports through the lowering or raising of tariffs or other barriers determine the relative openness of the U.S. market to goods and services produced abroad. Export policies both increase and restrict the sales and opportunities of specific companies and industries. Trade policies affect jobs, profits, and investment decisions in the United States and abroad. In the process, some workers and companies gain or lose more than others, thereby increasing the political stakes embedded in the decisions. The 108th Congress completed work on a number of major trade bills. Most notably, bills to implement free trade agreements with Chile, Singapore Australia, and Morocco and to enhance trade benefits for the countries of Sub-Saharan Africa were passed and signed by the President. Legislation repealing an export tax benefit long ruled a violation of U.S. World Trade Organization obligations passed, thereby moving the EU closer to ending sanctions on $4 billion of U.S. exports. In addition, Congress passed a miscellaneous tariff bill that eliminated or suspended tariffs on hundreds of products and repealed the 1916 Antidumping Act which also was ruled in violation of WTO rules. This report provides information and analysis of the major trade bills considered by the 108th Congress in three parts. The first section provides an overview of major trade legislation acted on in the 108th Congress, including some issues that may be carried over or taken up in 2005. For purposes of analysis, congressional trade policymaking is divided into the categories of trade agreements and WTO rules, import-related legislation, and export-related legislation. This section draws heavily from CRS reports on the myriad trade issues discussed. Readers who seek a full discussion of any particular issue are encouraged to consult these CRS reports and authors cited. The second section (Appendix A) provides in tabular form a more detailed breakdown of the majority of trade bills introduced and acted on in the 108th Congress. The bills are divided into twelve categories: (1) trade agreements, (2) World Trade Organization dispute settlement issues, (3) trade and tariff preferences, (4) permanent normal trade relations status, (5) importation of prescription drugs, CRS-2 (6) "offshoring" of service jobs, (7) trade remedy laws, (8) China, (9) other issues in import policy, (10) export promotion, (11) trade sanctions, and (12) export controls. A list of congressional trade-related hearings is provided in Appendix B. This section illustrates another dimension of congressional interest in trade issues and the numerous committees that play a role in oversight. It can be noted that Congress influences trade policy in a number of ways beyond the bills that are discussed in this report. The most common are through floor statements and letters sent to the administration that urge a certain course of action, as well as through warnings that specific legislation will be introduced to resolve problems that are not being adequately addressed in negotiations, regulations, or executive actions. In addition to warning the administration, Congress often sends messages directly to U.S. trading partners. Some prominent examples of this form of trade policymaking from the 108th Congress follow:1 ! A group of House Republicans, led by House Speaker Hastert, urged President Bush in a January 29, 2003 letter to initiate a WTO dispute settlement case against the European Union's biotechnology moratorium. On March 5, 2003, Senate Finance Committee Chairman Charles Grassley expressed his dissatisfaction with the Administration's decision to delay initiating the WTO case. On August 7, 2003, the Bush Administration initiated a WTO dispute settlement complaint over the moratorium. ! A group of 70 Senators signed a February 4, 2003 letter to President Bush that strongly supported the continued operation of the Continued Dumping and Subsidy Offset Act, better known as the Byrd Amendment, despite an adverse WTO ruling. The letter subsequently has been cited widely as evidence that congressional sentiment is broadly anti-repeal. ! House Republicans from textile states met with trade officials from the Bush Administration on February 7, 2003 in an effort to persuade the Administration to impose safeguard restrictions on Chinese apparel imports as soon as possible. In October and November 2004, the Administration did impose restrictions on selected apparel items under a special China safeguards provision. ! Nineteen senators in an April 4, 2003 letter urged President Bush to begin negotiations with New Zealand on the establishment of a free trade agreement as soon as possible. To date, New Zealand is still under consideration as a potential free trade partner. ! House Ways and Means Chairman Bill Thomas requested the International Trade Commission to prepare a report on the Section 201 steel safeguard's impact on U.S. steel users, along with the 1 Information is gleaned from various editions of Inside U.S. Trade. CRS-3 ITC's mid-term review of the impact of import restraints on the domestic steel industry. Senate Finance Committee Chairman Charles Grassley said on April 4, 2003 that he supports the Thomas request. The report was prepared and its determinations were cited widely in the 2003 debate over the efficacy of lifting the import restraints. ! Concurrent resolutions were introduced in the House and Senate in March 2004 in an effort to convince the Administration to keep auto tariffs out of the FTA negotiations with Thailand. The negotiations currently are still in a preliminary stage. Trade Agreements and WTO Rules When the 108th Congress convened in January 2003, few observers predicted that trade would be a top legislative concern. Congress, just six months earlier, had narrowly passed, in a contentious vote, the Trade Act of 2002 (P.L.107-210), the first major piece of trade legislation in almost a decade. This comprehensive trade bill ended eight years of stalemate over whether to re-authorize fast-track authority, now called trade promotion authority (TPA). Trade promotion authority allows the President to submit to Congress legislation implementing new trade agreements under special legislative procedures that limit debate, prohibit amendments, and require an up or down vote.2 The Trade Act of 2002 also renewed trade preference programs for Andean and African countries, as well as the U.S. Generalized System of Preferences.3 In addition, it mandated tighter congressional oversight of trade negotiations by requiring the president to report all potential trade agreements to Congress 180 days before they were signed and provide an explanation of why any changes to existing trade laws would be necessary.4 Contrary to some expectations, trade remained a top-level domestic and foreign policy issue in 2003 and 2004. Part of the reason is that the Bush Administration used the TPA to promote an ambitious trade negotiating agenda. By early 2003 the administration was actively promoting global negotiations in the WTO (the Doha Agenda), working towards a Free Trade Area of the Americas (FTAA), completing free trade agreements with Chile and Singapore, and beginning five new sets of FTA negotiations (Morocco and five Central American countries in January 2003, Australia in March, five members of the South African customs union in June, and Bahrain in August), and proposing a regional trade strategy to deepen U.S. trade and economic relationships in Southeast Asia and the Middle East.5 2 CRS Report RL31844, Trade Promotion Authority (Fast-Track Authority for Trade Agreements): Background and Developments in the 107th Congress, by Lenore Sek. 3 CRS Report 97-389, Generalized System of Preferences, by William H. Cooper. 4 CRS Report RL31974, Trade Agreements: Requirements for Presidential Consultations, Notices, and Reports to Congress Regarding Negotiations, by Vladimir N. Pregelj. 5 CRS Issue Brief IB10123, Trade Negotiations in the 108th Congress, by Ian F. Fergusson and Lenore Sek. CRS-4 The Administration's strategy of pursuing multiple trade initiatives, dubbed "competitive liberalization," holds that simultaneous multilateral, regional, and bilateral trade negotiations reinforce and catalyze one another. However, when the Doha Round of the World Trade Organization stalled at Cancun in September 20036 and the regional Free Trade Area of the Americas incurred a comparable fate at the November 2003 Summit of the Americas in Miami 7, much of the Administration's attention turned towards completing ongoing FTAs and initiating new ones with three Andean countries (Colombia, Ecuador, and Peru), the Dominican Republic, Panama, and Thailand.8 While Congress supported the Administration's overall competitive liberalization strategy, a few Members did question the choice of FTA partners on the grounds that commercial considerations were being given short shrift. Senator Max Baucus, Ranking Senate Finance Committee member, for example, reportedly publically maintained that the Administration's strategy of picking FTA partners is "mostly motivated by abstract foreign policy concerns" rather than pursuing the greatest market opportunities.9 FTA Implementing Legislation Possible criticism of the choice of FTA partners notwithstanding, the 108th Congress approved implementing legislation for all four FTAs the Administration sent to Capital Hill for consideration: for the Chile and Singapore FTA's in July 2003;10 for the Moroccan FTA in July 2004; and for the Australian FTA in August 2004.11 The implementing bills were passed by wide margins, running contrary to predictions of some observers that Congress was turning protectionist or anti-trade.12 6 CRS Report RL32060, World Trade Organization Negotiations: The Doha Development Agenda, by Lenore Sek. 7 CRS Report RL20864, A Free Trade Area of the Americas: Status of Negotiations and Major Policy Issues, by J.F. Hornbeck. 8 CRS Report RL32540, The Proposed U.S.-Panama Free Trade Agreement, by J.F. Hornbeck, and CRS Report RL32314, U.S.-Thailand Free Trade Negotiations, by Raymond J. Ahearn and Wayne M. Morrison. 9 Inside U.S. Trade, "Baucus Says Business Afraid to Criticize USTR FTA Strategy," July 16, 2004. 10 CRS Report RL31144, The U.S.-Chile Free Trade Agreement: Economic and Trade Policy Issues, by J.F. Hornbeck, and CRS Report RL31789, The U.S.-Singapore Free Trade Agreement, by Dick K. Nanto. 11 CRS Report RS21464, Morocco-U.S. Free Trade Agreement, by Raymond J. Ahearn, and CRS Report RL32375, The U.S.-Australia Free Trade Agreement: Provisions and Implications, by William H. Cooper. 12 The House passed the U.S.-Chile Implementation Act by a vote of 270-156, the U.S.- Singapore Free Trade Implementation Act by a vote of 272-155, the Moroccan Free Trade Implementation Act by a vote of 323-99, and the Australian Free Trade Implementation Act by a vote of 314-109. Senate votes on these agreements were respectively 66-31, 66-32, 85- CRS-5 All four agreements received strong backing from the business community, but not from organized labor. The FTAs eventually will eliminate tariffs on almost all traded goods, liberalize trade in services, and provide enhanced protection for intellectual property rights. While the overall effects of any of the agreements on the U.S. economy are expected to be minimal, each agreement provides U.S. exporters and investors with additional market openings and opportunities.13 These FTAs are also significant because they are the first agreements considered by Congress under the fast-track procedures authorized in the Trade Act of 2002. Other precedents include the fact that the Chile FTA was the first such agreement with a South American country; Singapore was the first such agreement with an Asian country; the Australian agreement was the first FTA between the United States and a developed country since the U.S.-Canada Free Trade Agreement in 1988; and the Morocco FTA forms part of the Administration's long-term effort to establish a Middle East Free Trade Area. Extant opposition and controversy to the FTAs was concentrated mostly on labor and immigration issues in the case of Chile and Singapore, and on agricultural and pharmaceutical trade issues in the case of Australia. The labor provisions contained in the Chile and Singapore agreements were criticized by some Members (mostly House Democrats) on the grounds that basic worker rights obligations such as freedom of association, the right to form unions and bargain collectively, and limitations on child labor were not subject to as rigorous a dispute settlement process as was provided in the U.S.-Jordan FTA.14 While the salience of the treatment of labor rights in the Chile and Singapore FTAs may have been tempered by these countries' relatively strong labor rights laws and records, the issue is likely to be much more divisive in congressional consideration of the U.S.-Central American FTA (CAFTA), which the Administration concluded in December 2003. CAFTA reportedly is opposed by many more Members, some of whom say it does not go far enough in promoting stronger labor laws and enforcement in the region. Faced also with opposition from sugar and textile interests, the Bush Administration decided not to send implementing legislation to Congress this year, but a battle over the implementation legislation can be expected in the 109th Congress.15 Immigration provisions were also controversial in the Chile and Singapore FTAs. Both agreements created separate categories of entry for citizens of each country to engage in a wide range of business and investment activities on a temporary basis, that is, as non-immigrants. These FTA provisions on the temporary 13, and 80-16. 13 CRS Report RL31356, Free Trade Agreements: Impact on U.S. Trade and Implications for U.S. Trade Policy, by William H. Cooper. 14 CRS Report RS20968, Jordan-U.S. Free Trade Agreement: Labor Issues, by Mary Jane Bolle. 15 CRS Report RL31870, The U.S.-Central America Free Trade Agreement (CAFTA): Challenges for Sub-Regional Integration, by J.F. Hornbeck. CRS-6 entry of business personnel and professional workers raised concerns among many in Congress, who have jurisdiction over immigration, that the USTR negotiated these provisions without any authority or direction from Congress. The Bush Administration countered that the temporary entry of professionals falls within TPA objectives regarding the opening of foreign country markets for U.S. services and investment, in particular reduction or elimination of barriers that restrict the operations of service suppliers or the establishment or operations of investments.16 Agricultural issues were among the most difficult issues in the consideration of the Australian FTA. In the end each side acceded to very sensitive demands of the other in order to bring the negotiations to a close. This meant that Australia acceded to the U.S. objective not to liberalize trade in sugar and to only a gradual opening of dairy and beef, while the U.S. acceded to Australia's position on maintaining monopolies for the export of wheat, barley, and rice.17 A number of Members of Congress, however, were highly critical of the sugar exclusion, arguing that the exclusion of any product or industry should not be repeated in future FTAs.18 Trade and the health care policies of foreign trading partners became an issue for the first time in the negotiation of the Australian FTA. During these negotiations, the United States complained that the way the Australian government subsidizes the costs for pharmaceuticals may disadvantage a number of newer, innovative drugs produced in the United States. The issue exposed fundamental differences between the U.S. and Australian healthcare systems and how each treats costs of pharmaceutical products borne by their citizens.19 In congressional consideration of the agreement, this issue was widely debated, perhaps foreshadowing U.S. trade policy efforts to confront foreign price controls on pharmaceutical products. WTO Compliance Legislation As an international organization intended to ensure that trade between countries flows more easily, predictably, and freely, the World Trade Organization (WTO) serves as a forum for international trade negotiations and the settlement of disputes. The Dispute Settlement Understanding or DSU provides the procedures to settle disputes and is key to the enforcement of U.S. rights under the WTO.20 16 CRS Report RL30498, Immigration: Legislative Issues on Nonimmigrant Professional Specialty (H-1B) Workers, by Ruth Ellen Wassem. 17 CRS Report RL32375, The U.S.-Australia Free Trade Agreement: Provisions and Implications, by William H. Cooper, and CRSebagr78, Agriculture in the Australia-U.S. Free Trade Agreement, by Remy Jurenas. 18 The House Report (108-597) on the U.S.-Australian Free Trade Agreement provides that the "Committee [Ways and Means] notes with particular disappointment the exclusion of sugar liberalization in the FTA and expects that this omission will not be reflected in future FTAs brought before the Committee." 19 CRS Report RL32375, by William H. Cooper. 20 CRS Report 98-928, The World Trade Organization: Background and Issues, by Lenore Sek. CRS-7 Since the DSU became effective in 1995, the United States has been heavily involved as both a complainant and defendant in slightly more than half of the 300- plus cases filed. As a complainant, the U.S. has used the DSU to ensure that U.S. exporters receive open access and fair treatment in foreign markets. As a defendant, some U.S. practices or laws have been found to be inconsistent with our WTO obligations. A WTO Member found to have enacted an inconsistent measure is expected to bring its laws into compliance promptly, but is also granted a reasonable period of time to do so if immediate action is impracticable. While the member country is usually expected to withdraw the offending measure, compensation and temporary retaliation are available to the prevailing party as alternative remedies if the member has not complied by the established deadline.21 Although the United States has complied with adverse rulings in several past WTO disputes, there are some outstanding cases in which WTO rulings have not yet been implemented. Among these cases, the 108th Congress inherited several disputes where compliance required legislative action. The most prominent cases involved a U.S. export tax benefit, the Extraterritorial Income Tax Exclusion (ETI), and its predecessor -- the Foreign Sales Corporation (FSC); the 1916 Antidumping Act; and the Continued Dumping and Subsidy Offset Act of 2002 (CDSOA), also known as the Byrd Amendment.22 FSC/ETI Export Benefit. The U.S. tax code's Foreign Sales Corporation (FSC) provisions provided a tax benefit for U.S. exporters. But in 1997 the European Union (EU) filed a complaint before the WTO that the provision was an unacceptable export subsidy. The WTO upheld the complaint, and to avoid retaliatory tariffs, Congress in 2000 replaced the FSC with a new export benefit, the "extraterritorial income" (ETI) provisions. The EU again complained to the WTO that the ETI benefit was also an export subsidy, and the WTO again backed the EU charge. While the EU indicated it would not impose retaliatory tariffs as long as the Congress was making progress on achieving WTO compliance, it began imposing punitive tariffs on $4 billion of U.S. exports, beginning at 5%, on March 1, 2004 and increasing by 1 percentage point each month thereafter.23 After considering repeal legislation for more than two years, the Congress replaced the export subsidy with an assortment of new corporate tax breaks that may be acceptable under WTO rules. The House and Senate approved a conference agreement on the legislation in October 2004 (P.L.108-357).24 As a result of the repeal, the EU is expected to lift the sanctions effective January 1, 2005 although its 21 CRS Report RS21763, WTO Dispute Settlement: Stages and Pending U.S. Activity Before the Dispute Settlement Body, by Todd B. Tatelman. 22 CRS Report RL32014, WTO Dispute Settlement: Status of Compliance in Pending Cases, by Jeanne J. Grimmett. 23 CRS Report RS20746, Export Tax Benefits and the WTO: The Extraterritorial Income Exclusion and Foreign Sales Corporations, by David L. Brumbaugh, and CRS Report RS21742, European Trade Retaliation: The FSC-ETI Case, by Raymond J. Ahearn. 24 CRS Report RL32652, The 2004 Corporate Tax and FSC/ETI Bill: The American Jobs Creation Act of 2004, by David L. Brumbaugh. CRS-8 trade officials have complained to the WTO that the statute's grandfathering provisions may be WTO violations. 1916 Antidumping Act. The 1916 Antidumping Act allows U.S. parties to sue foreign producers or importers in federal court if they dump their products with the intent to injure a U.S. producer, and awards treble damages in successful cases. While this statute has been seldom used, suits were brought against European and Japanese steel producers in the 1990s. Subsequently, the EU and Japan challenged the law in the DSU. In 2002, the DSU determined that the law violated U.S. WTO obligations because it provided remedies for dumping in excess of the antidumping duties and other price measures that are permitted under the WTO's Antidumping Agreement.25 In response to this ruling, the conference report of the miscellaneous tariff bill included a provision that repeals the 1916 Antidumping Act prospectively. The legislation, however, does not appear to affect pending cases filed under the law. It is, thus, uncertain whether this form of repeal will end all WTO litigation on the statute, particularly due to Japan's continuing insistence that the repeal end all current court proceedings.26 Byrd Amendment. The third high profile compliance case involved the Byrd Amendment, which requires annual disbursement of antidumping and countervailing duties to petitioners and interested parties (instead of to the U.S. Treasury) in the underlying trade remedy proceedings. A WTO panel in 2002 ruled that the CDSOA violates WTO obligations, in part because it provides an extra protection to industries already benefitting from imposition of dumping and countervailing duty orders. When Congress did not comply with eliminating or changing the act to conform to WTO obligations by the year-end 2003 deadline, a WTO arbitrator was appointed and in August 2004 ruled that eight complaining countries could impose retaliatory duties on U.S. exports in a given amount. The WTO on November 26, 2004 authorized seven of the countries to retaliate, but no restrictions on U.S. exports have been imposed to date. Unlike the ETI case, there does not appear to be a congressional consensus in favor of repeal. While the Bush Administration proposed repeal of the CDSOA in its FY2004 and FY2005 budgets and repeal legislation was introduced in 108th Congress, predominant congressional sentiment appears to be against repeal. For example, 70 Senators in 2003 wrote President Bush urging negotiations with U.S. trading partners aimed at recognizing a right to disburse antidumping and countervailing duties in the manner prescribed by the statute "prior to any attempt to change our laws." In addition, the Consolidated Appropriations Act of 2004 (P.L.108-199), included a directive to the United States Trade Representative to initiate WTO negotiations aimed at allowing such disbursements. The United States 25 CRS Report RL32014, pp. 15-19. 26 Inside U.S. Trade, "Japan Insists 1916 Repeal Must End Pending Cases, Quiet on Retaliation," October 22, 2004. CRS-9 submitted such a proposal as part of the Doha Round of negotiations on April 26, 2004.27 Congressional Support for the WTO. The ETI and CDSOA disputes illustrate tension in congressional views towards the WTO. Some Members of Congress have charged that some of the WTO dispute settlement rulings infringe on U.S. sovereignty by undermining domestic tax and trade remedy laws. Bush Administration trade officials have expressed concerns that some of the panel rulings go too far in determining how WTO members should comply with adverse rulings. Others believe that the U.S. should not implement the adverse rulings until the EU fully lifts its moratorium on biotechnology approvals. Supporters of the WTO dispute resolution process argue that the United States was the chief proponent of creating a stronger and more binding dispute settlement process. They also claim that the system works in keeping markets open to U.S. exports, and that complaints only arise when the system chips away at some of the vestiges of U.S. protection. Were the United States or other leading WTO members to ignore WTO findings, they argue that the dispute resolution process could be severely weakened. Congress' mixed views on the WTO could affect consideration of a resolution withdrawing the United States from the Agreement establishing the World Trade Organization. Section 125 of the Uruguay Round Agreements Act (the law that implemented changes negotiated in the last round of multilateral trade negotiations) permits any Member of Congress to introduce such a resolution within 90 days after the Administration submits a report analyzing the costs and benefits of U.S. participation in the WTO. By statute the Administration is required to submit this report to Congress by March 1, 2005. While such a resolution may not attract majority support in either house, it could serve as a focal point for debate on outstanding bilateral trade disputes that are being settled under the aegis of the WTO. Import-Related Legislation U.S. policies affecting imports tend to be shaped largely by a mixture of economic principles and practical political considerations. Unanticipated events and broader foreign policy considerations also serve to influence the development of specific policies from year to year.28 The case for maintaining a relatively open market for the purchase of foreign goods and services rests on the view that imports provide multiple economic benefits. For consumers, imports provide goods that are often available at lower prices or simply not produced in the United States. Foreign goods also can benefit U.S. 27 CRS Report RL32014, WTO Dispute Settlement: Status of U.S. Compliance in Pending Cases, by Jeanne J. Grimmett. 28 For full discussion, see Cohen, Stephen D., Joel R. Paul, and Robert A. Becker. Fundamentals of U.S. Foreign Trade Policy. Westview Press, 2003. CRS-10 companies by providing needed inputs at lower prices and by encouraging cost- cutting and innovation.29 Decisions to deviate from the economic rationale for maintaining relatively open policies towards imports usually rest on practical political considerations. Although consumers and many producers benefit from having access to imported goods and services, some workers can lose their jobs and some companies can go out of business due to rapid increases in imports that compete head-to-head with domestic production. To address displacement, international as well as domestic rules have been established to provide temporary relief to those hurt or injured by import competition. These rules also stipulate various measures or barriers governments may employ, depending in large part on whether the import competition being curbed is considered "fair" or "unfair."30 U.S. government policies that affect the relative receptivity or openness of the U.S. market to imports are also affected from year to year by unanticipated events. The large and growing U.S. merchandise trade deficit, for example, may increase demands for protection from import competition as the number of companies and workers hurt by imports increases relative to those helped by exports. When the increase in the trade deficit is being accounted for disproportionately by one country, much more scrutiny is likely to be given to that country's trading practices.31 Foreign policy objectives can also affect import policies. Efforts, for example, to forge closer economic and political ties with specific regions or countries can lead to more open or less restrictive policies via the extension of preferential access to the U.S. market. Congressional actions in 2003 and 2004 reflected the interaction of these cross- cutting pressures in five legislative categories: (1) protection of American workers and industry from import competition; (2) offshoring or outsourcing of service jobs; (3) trade with China, (4) extension of tariff preferences generally, as well as for specific regions/countries, and (5) importation of prescription drugs. Jobs and Import Competition As trade's share of U.S. production (exports and imports of goods and services as a percent of GDP) has risen from around 9% in the early 1960s to around 24% today, more firms, communities, and workers benefit as well as are hurt by trade. Because the benefits of trade are diffused across the economy and the costs are concentrated and localized, groups hurt by trade are often much more concerned and active about the development of U.S. trade policies. As a result, numerous Members of Congress are often under intense pressure to respond to demands for protection 29 CRS Report RL32059, Trade, Trade Barriers, and Trade Deficits: Implications for U.S. Economic Welfare, by Craig K. Elwell. 30 CRS Report RL32371, Trade Remedies: A Primer, by Vivian C. Jones. 31 CRS Report RL31032, The U.S. Trade Deficit: Causes, Consequences, and Cures, by Craig Elwell. CRS-11 from import competition as the number of companies and workers hurt by imports increases. Protection for the U.S. steel industry was a prominent concern of many members of Congress in the 108th Congress. Many Members in 2003 actively supported the steel industry's efforts to persuade President Bush to extend the import restraint regime he had imposed in March 2002, while others supported steel-consuming industries' efforts to roll back the import restraints.32 A large number of Members also worked to insure that U.S. anti-dumping and countervailing duty laws are not weakened in the on-going Doha multilateral negotiations. At a time of increasing competition, a rising trade deficit, and greater openness to foreign products than ever before, such trade remedy tariffs are viewed by some as the only viable form of protection for U.S. domestically-based producers. While not acted on, several bills designed to strengthen these laws were introduced.33 Other industries such as sugar, beef, and dairy lobbied Congress for exclusion from various FTAs the Administration was negotiating. While some of these industries were successful, a number of Members actively lobbied the Administration to adopt a policy of no product or industry exclusions in FTAs. The textile and apparel and steel industries backed efforts in the House to strengthen and expand both the "Buy American" and "Berry" provisions in the FY2004 and 2005 Department of Defense (DOD) authorization and appropriations bills. The Buy American Act is the major domestic preference statute governing procurement by the federal government by providing a preference for American goods in government purchases. The Berry Amendment is a more specific Buy American-type provision that requires the DOD to give preference to domestically produced, manufactured, or home grown products, notably food, clothing, fabrics, and speciality metals.34 In the 108th Congress, Representative Duncan Hunter, Chairman of the House Armed Services Committee sought to expand the scope of Buy America and establish reciprocity in defense trade, especially by restricting the practice of off-sets. The Bush Administration, large defense contractors and key members of the Senate Armed Services Committee opposed the House effort to expand these provisions, and for the most part, were successful.35 With the elimination of global quotas on textile and apparel products beginning in January 2005, U.S. producers, workers, and retailers are expecting a flood of 32 CRS Report RL31748, The American Steel Industry: A Changing Profile, by Stephen Cooney. 33 CRS Report RL30461, Trade Remedy Law Reform in the 108th Congress, by William H. Cooper. 34 CRS Report 97 -- 765A, The Buy American Act: Requiring Government Procurements to Come from Domestic Sources, by John Luckey. 35 CRS Report RL31236, The Berry Amendment: Requiring Defense Procurement To Come From Domestic Sources, by Valerie Bailey Grasso. CRS-12 imports, especially from China. Many Members of Congress are expected to urge the Bush Administration to impose import restraints in order to ensure a less disruptive adjustment process. Other legislative proposals are also likely to be considered.36 Legislation dealing with more prescriptive country-of-origin labeling requirements for certain food products was also considered in the 108th Congress. The House Agriculture Committee approved on July 21, 2004 a bill (H.R. 4576) to make country-of-origin labeling (COOL) requirements for certain food products voluntary. Previous legislation (the 2002 farm bill as modified by FY2004 agricultural appropriation bill (P.L. 108-199) had established a mandatory labeling program for fresh produce, red meats, and peanuts starting September 30, 2006 and for seafood starting September 30, 2004. The 108th Congress adjourned without change in this position. Some lawmakers support a mandatory program as a health and safety issue and others counter that COOL is a marketing issue and should be voluntary.37 "Offshoring" of Service Jobs A new wrinkle brought about by globalization was growing alarm about whether U.S. multinationals were increasingly "offshoring" or relocating service sector jobs to low-wage countries such as India and China. The Economic Report of the President, released by the Council of Economic Advisors in February 2004, set off a heated debate by calling "offshoring" a "good thing for the economy in the long run." The report added that "offshoring" was just a new way of doing international trade as the information and communications revolution enables companies to out- source a wider array of services, ranging from routine call center work to higher- value software programming, medical diagnosis, and research and analytical activities. Many Members of Congress, anxious that "offshoring" might lead to a reduction in U.S. output and a corresponding loss of jobs amidst an economic recovery with unusually low job creation, were openly critical of the report. Some responded by offering amendments that would prohibit government agencies from outsourcing work abroad. Some called for an examination of the U.S. tax code to determine if U.S. tax policy encourages "offshoring." Others called for improving the data the government collects on "offshoring" so that policymakers can obtain a more accurate understanding of this phenomenon. Still other proposals addressed the dislocation faced by workers in the services sector through amendments to Trade Adjustment Assistance Program that would give service workers such as software programmers the same extended unemployment insurance and retraining benefits established for trade-impacted manufacturing workers.38 36 CRS Report RS20889, Textile and Apparel Quota Phaseout: Some Economic Implications, by Bernard A. Gelb. 37 CRS Report 97-508, Country-of-Origin Labeling for Foods, by Geoffrey S. Becker. 38 CRS Report RL32292, Offshoring (a.k.a. Offshore Outsourcing) and Job Insecurity Among U.S. Workers, by Linda Levine. CRS-13 While much of the debate about outsourcing died down after the presidential primary season ended, the flurry of concern does point up underlying anxiety about globalization's impact on jobs, particularly during a 3-4 year period where the economy has lost an estimated 2.4 million manufacturing jobs.39 China Trade Challenge Anxiety about job losses to foreign competitors also focused substantially on China. Public and congressional concerns, prompted in part by a large and growing bilateral trade deficit, pointed directly to China's increasing ability to manufacture an array of products that could displace U.S. workers in industries ranging from textiles and apparel to auto parts and advanced technology goods. In response, several bills were introduced to pressure China to eliminate the pegging of its currency to the dollar -- a policy deemed by many as currency manipulation designed, in part, to keep China's exports valued at artificially low prices.40 In addition, many Members pressured the Administration to take strong action enforcing trade remedy laws in the area of textiles and apparel. With the scheduled lifting of all import quotas on textiles and apparel on January 1, 2005, U.S. companies and labor unions representing textile and apparel workers have been petitioning the Administration to provide import protection before disruption occurs.41 While the Administration has imposed some safeguards on certain textile products, it is under pressure from some in Congress to do more. Many analysts have predicted that China could capture as much as 70 percent of the American textile and apparel market over the next two years.42 Taking a harder line towards China, however, may endanger other U.S. interests. U.S. exports to China are also rising sharply, making China the sixth largest export market for U.S. products. A sizeable portion of U.S. imports from China (some estimates are as high as 40%) also are accounted for by U.S. companies that are producing in China. In addition, China's central bank helps finance the U.S. trade deficit by investing its growing reserves of U.S. dollars in U.S. government securities. This puts U.S. policymakers in the difficult position of pressuring a country that has become an important source of capital for the U.S. economy.43 Trade and Tariff Preferences The 108th Congress acted on a number of proposals to change U.S. trade and tariff preferences for certain countries and products. Measures that extend and 39 CRS Report RS21883, Outsourcing and Insourcing Jobs in the U.S. Economy: An Overview of Evidence Based on Foreign Investment Data, by James K. Jackson. 40 CRS Report RS21625, China's Currency Peg: A Summary of the Economic Issues, by Wayne M. Morrison and Marc Labonte. 41 CRS Report RL32168, Safeguards on Textile and Apparel Imports from China, by Vivian C. Jones. 42 CRS Report RL31723, Textile and Apparel Trade Issues, by Bernard A. Gelb. 43 CRS Issue Brief IB91121, China-U.S. Trade Issues, by Wayne M. Morrison. CRS-14 enlarge tariff preferences for a number of sub-Saharan African countries, that temporarily suspend duties on several hundred products, and that extend normal trade relations status to Laos and Armenia were approved. In addition, legislation that would establish tariff preferences for various Middle Eastern countries and for Haiti was considered.44 AGOA Acceleration Act of 2004. Legislation to amend the African Growth and Opportunity Act (AGOA) of 2000 (Title I, P.L. 106-200) passed the House and Senate in June 2004 and was signed by President Bush on July 13, 2004 (P.L. 108-274). AGOA seeks to spur economic development and help integrate Africa into the world trading system by granting trade preferences (duty-free and quota free access to the U.S. market for selective products) and other benefits (such as technical assistance) to Sub-Saharan African countries that meet certain criteria relating to market reform and human rights. The AGOA Acceleration Act of 2004 extends the AGOA program to 2015, as well as amends several existing provisions in order to spur investment in beneficiary countries.45 By extending the preference program to 2015, supporters hope to expand gains for the beneficiary countries (37 of the 48 Sub-Saharan countries are currently eligible for benefits) by improving the stability of the investment climate in Africa. The AGOA Acceleration Act of 2004 also extends to 2007 a rule allowing beneficiary lesser developed countries to receive preferential treatment on apparel exports regardless of the country of origin of the fabric and yarn, and seeks to improve African agricultural market access to the United States by providing assistance to African countries to enable them to meet U.S. technical agricultural standards. Support for approval was spearheaded by a number of Members of Congress, a coalition of business groups, religious groups and a number of non- governmental organizations focused on poverty reduction. Miscellaneous Tariff Bill. Since about 1981, each Congress has considered a miscellaneous tariff suspension and technical corrections bill designed to grant temporary duty reductions on certain products, and to make technical corrections to certain trade laws. Products deemed eligible by the relevant congressional committees for duty suspension or reduction in this manner are generally non- controversial (roughly 90% are chemicals) because they are not produced in the United States, or are produced overseas by a U.S. multinational corporation and are imported into the United States by a corporation for its own domestic use. Congressional rationale for gaining these reductions is that (1) they enable U.S. manufacturers to reduce costs thus making the downstream production industries more competitive, (2) they do not jeopardize any domestic manufacturer and (3) they 44 CRS Report RL32638, Middle East Free Trade Area: Progress Report, by Mary Jane Bolle, and CRS Report RS21839, Haitian Textile Industry: Impact of Proposed Trade Assistance, by Bernard A. Gelb. 45 CRS Report RS21772, AGOA III: Amendment to the African Growth and Opportunity Act, by Danielle Langton. CRS-15 do not represent a substantial loss of tariff revenue (duty suspension bills are targeted to cost $5,000,000 or less for each year they are in force).46 The 108th Congress approved a miscellaneous tariff act(P.L. 108-429) in a November 2004 post-election session. The bill (H.R. 1047) had been held up in 2003 by opposition from one Senator concerned about textiles trade and in 2004 by two Senators opposed to providing Laos with permanent normal trading relations status. The act temporarily reduces or eliminates duties on approximately 400 products, mainly chemicals, and grants normal trade relations status to Armenia and Laos. For Laos, the change will reduce tariffs on its exports to the United States from an average level of 45% to roughly 2.5%.47 The act also provides additional textile trade benefits to Mauritius and includes a provision repealing the 1916 Antidumping Act. Importing Prescription Drugs The 108th Congress engaged in an intense debate generated by rising prices for prescription drugs. As prices have risen, so too has consumer interest in purchasing more affordable medications from abroad where prices are estimated to be anywhere from 35% -55% lower. These price disparities have encouraged U.S. consumers -- two million by one Canadian estimate - , as well as growing numbers of state and local governments, to attempt to import comparable medications from abroad to realize savings.48 However, under current law, only the manufacturer of a prescription drug may legally bring it into the United States. U.S. pharmacists and wholesalers are only allowed to do so if the Secretary of Health and Human Services (HHS) first certifies that those drugs would be safe and that the program significantly reduced drug costs to U.S. consumers. Because, at this writing, HHS has never taken this step, consumers, pharmacists, and wholesalers are prohibited from importing prescription drugs.49 This issue was addressed in elements of three bills introduced in the Senate and one bill which passed the House in 2003 (H.R. 2427). All four would allow 46 CRS Report RS21406, Tariff Modifications: Miscellaneous Duty Suspension Bills, by Vivian C. Jones. 47 CRS Report 96-663, Country Applicability of the U.S. Normal Trade Relations (Most Favored Nation) Status, by Vladimir N. Pregelj, and CRS Report RS20931, Laos: Background and U.S. Relations, by Thomas Lum. 48 CRS Report RL32511, Importing Prescription Drugs: Objectives, Options, and Outlook, by Susan Thaul and Donna U. Vogt. See also CRS Report RL32191, Prescription Drug Importation and Internet Sales: An Overview, by Jody Feder. 49 CRS Report RL32271, Importation of Prescription Drugs Provisions in P.L. 108-173, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, by Susan Thaul and Donna U. Vogt. CRS-16 commercial and personal-use imports and replace the need for certification by the HHS Secretary with different ways to ensure safety and effectiveness.50 The Bush Administration has generally opposed the legislation, asserting that it cannot vouch for the safety and effectiveness of imported drugs that come from unregistered and uninspected facilities in foreign countries. The administration has also asserted that allowing drug imports, at least in the case of Canada, would do little to solve the underlying problem. This is not only because Canada does not have enough drugs to supply the U.S. market, but also because U.S. drug companies would probably respond to such a move by reducing shipments to Canada for importation to the United States. At the same time, President Bush stated in October 2004 in the second presidential debate that his administration was carefully studying the issues to see if the government could ensure the safety of imported drugs in other ways. Export-Related Legislation U.S. export policy usually entails a contradictory mix of policies that both promotes as well as restricts exports. Export promotion efforts are touted on the basis of their contribution to job creation and a healthy economy. Export promotion advocates commonly emphasize the number of jobs associated with the production of goods for export and that they tend to be higher-wage and higher-skilled jobs than average. The United States tends to promote or expand exports through the provision of subsidized trade financing, insurance, and guarantees to potential customers of U.S. goods, through efforts to reduce trade barriers that restrict access of U.S. exports to foreign markets, and through provision of trade information and counseling. In contrast to export promotion efforts, a variety of sanctions, restrictions, and controls are placed on U.S. exports to achieve a wide variety of foreign policy and national security goals. The basic framework for restricting or controlling most commercial dual-use exports is the Export Administration Act (EAA) of 1979. The EAA has been employed to control goods and technology whose sales and use abroad could be detrimental to U.S. national security. In addition, trade and other economic sanctions have been used to promote the protection of human rights, and to punish certain countries for objectionable behavior (for example, state-sponsored terrorism, military aggression, and proliferation). Exporters whose economic interests are adversely affected by the imposition of export controls or trade sanctions have repeatedly attempted to lessen their utilization as a policy option, particularly where the controls or sanctions are imposed unilaterally. Export controls, while disproportionately affecting some sectors, account for 1-2% of U.S. exports. Some of these export policy issues were the subject of legislative activity in the th 108 Congress. U.S. export promotion efforts attracted a limited amount of legislation in the areas of export financing and market access. The restrictive component of export policy was the subject of considerably more legislative activity, 50 CRS Report RL32568, Senate Prescription Drug Importation Legislation: A Side-by-Side Comparison of Current Law, S. 2307, S. 2328, and S. 2493, by Susan Thaul and Donna U. Vogt. CRS-17 particularly regarding economic sanctions and the countries of Belarus, Burma, Cuba, and Syria. Export Promotion Currently, over a dozen federal agencies promote U.S. exports directly or indirectly. The U.S. Department of Agriculture and the Export-Import Bank are the main agencies promoting U.S. exports through the provision of subsidized financing, insurance, and guarantees. Other agencies such as the Overseas Private Investment Corporation (OPIC), the Department of Commerce, and the Trade and Development Agency undertake activities that can indirectly facilitate U.S. exports. By providing financing, investment insurance and other services for U.S. investors in 144 developing countries, OPIC can help promote economic growth that stimulates demand for U.S. exports. The Office of the U.S. Trade Representative by negotiating reductions in foreign trade barriers also has the capacity to indirectly facilitate U.S. exports. Recently, these activities have not been controversial, although some Members of Congress argue that funding for export promotion activities represent corporate welfare and should be cut back or abolished. Nevertheless, Congress approved FY2005 requests from the Bush Administration for increases in federal spending on export promotion and extended the operating authority of OPIC through FY2007 (P.L. 108-158). Several bills designed to help trade officials negotiate better access to foreign markets were introduced; none were acted on. Economic Sanctions The objective of expanding U.S. exports collides with a variety of sanctions, restrictions, and controls placed on U.S. exports. As in the past, the use of trade to promote foreign policy objectives was an important part of congressional activity in 2003 and 2004. Unilateral trade sanctions were one tool utilized in legislation that became law to deal with oppressive or rogue regimes in Burma, Syria and Belarus. A trade-financing sanction imposed against Libya was lifted and numerous provisions affecting U.S. trade sanctions towards Cuba were the subject of considerable congressional activity. In May 2003, Congress reacted to the Burmese junta's crackdown on democratic opposition by passing the Burmese Freedom and Democracy Act of 2003 (P.L. 108- 61). The act bans imports from Burma and affects mainly textiles and garments. The ban is to remain in effect until the President certifies to Congress that the Burmese government has made major progress in ending human rights violations and in taking steps towards the establishment of a more democratic government.51 In the fall of 2003, Congress passed the Syria Accountability Act and Lebanese Sovereignty Restoration Act (P.L. 108-175). The act imposes additional sanctions 51 CRS Report RS20749, Burma-U.S. Relations, by Larry Niksch. The Burmese Freedom and Democracy Act of 2003 was extended by the 108th Congress with enactment of H.J.Res. 97 as P.L. 108-272. CRS-18 against Syria unless it halts support for terrorism and international terrorist groups, among other activities. On May 11, 2004, President Bush implemented the provisions of P.L. 108-175 by banning the export of military and dual use items, the export of all items except food and medicines, and Syrian aircraft landing or overflight rights in the United States. However, Libya remains on the terrorist list pursuant to sec. 6(j) of the Export Administration Act of 1979.52 Congressional concerns about human rights abuses in Belarus culminated in the passage of sanctions legislation in the fall of 2004. The Belarus Democracy Act, which became law (P.L.108-347) on October 20, 2004, mandates a variety of sanctions on Belarus. These include prohibitions on strategic exports, financial assistance, and a sense of the Congress that the United States should oppose multilateral assistance to Belarus. These restrictions are to remain in place until Belarus meets specific democratic and human rights criteria.53 Due to the thaw in U.S.-Libya relations brought about by Libya's renunciation of weapons of mass destruction and payment to families who lost relatives in the downing of Pan Am 103, some U.S. sanctions have been relaxed. The Consolidated Appropriations Act of 2005 (P.L. 108-447) authorized the president to lift the ban on Export-Import Bank financing of U.S. exports to Libya. The act left in place the current ban on OPIC activities in Libya.54 Since the early 1960s, U.S. policy toward Cuba has consisted largely of isolating this communist state through comprehensive economic sanctions. While there appears to be broad agreement in Congress on bringing democracy to the island, Congress remains divided on how to achieve that objective. In the 108th Congress, several FY2005 appropriations measures -- Commerce, Justice, and State; Agriculture; and Transportation/Treasury -- contained provisions that would have eased Cuba sanctions. The Bush Administration had threatened to veto bills if they contained provisions weakening Cuba sanctions. Ultimately, all the Cuba provisions easing sanctions were stripped out of the FY2005 omnibus appropriations measure (P.L. 108-447; H.Rept. 108-792). (The omnibus bill also contains several other trade provisions, including one that requires Mexican and Canadian trucks to comply with U.S. safety rules and another that outlines priorities for a U.S. council designed to combat intellectual property violations). As in past Congresses, numerous free- standing bills were also introduced to either tighten or weaken the Cuba sanctions regime, but no action was taken on these measures.55 52 CRS Issue Brief IB92075, Syria: U.S. Relations and Bilateral Issues, by Alfred B. Prados. 53 CRS Report RL32534, Berlarus: Background and U.S. Policy Concerns, by Steven Woehrel. 54 BNA International Trade Reporter, "Congress Authorizes President to Lift Ban on Ex-IM Bank Programs for Libya," November 25, 2004. 55 CRS Report RL31740, Cuba: Issues for the 108th Congress, by Mark P. Sullivan; CRS Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances, by Mark P. Sullivan; and CRS Issue Brief IB10061, Exempting Food and Agricultural Products from U.S. Economic Sanctions: Status and Implementation, by Remy Jurenas. CRS-19 Export Controls In the 108th Congress, legislation (H.R. 55) was again introduced, but not acted on, to rewrite and reauthorize the Export Administration of 1979 (EAA). The EAA provides the statutory authority for export controls on sensitive dual-use goods and technologies, items that have both civilian and military applications including those items that can contribute to the proliferation of nuclear, biological and chemical weaponry. For many years now, efforts to renew the act have been complicated by continued tension between national security and commercial concerns. Some observers contend that current export controls hurt U.S. business by subjecting technology exports to what they consider a cumbersome and ineffective licensing process that costs sales and loses markets to overseas competitors. Others maintain that current controls are not strong enough to prevent the spread of dual-use technologies to adversaries or potential proliferators, and that the EAA legislation, as introduced in the 108th Congress, would further weaken the system. Congressional interest in EAA reform has been heightened by questions about the efficacy of export controls in the fight against terrorism.56 Implications for the 109th Congress The 109th Congress can be expected to face a trade agenda that will be at least as extensive as the 108th Congress. Much of the legislation that died in committee may be re-introduced in the 109th Congress to address persisting challenges and problems affecting trade negotiations, WTO rules, imports, and exports. New legislation may also be introduced to deal with statutory requirements and changes in the U.S. political and economic landscape. Early in 2005, President Bush is expected to request that his authority to negotiate trade agreements under expedited congressional approval (trade promotion authority) be extended for two years beyond its June 30, 2005 expiration date. The extension would happen automatically unless either chamber passes a resolution of disapproval. In addition, the President is expected to send to Congress legislation to implement the U.S. free trade agreement with Bahrain early in the first session and may also send legislation to implement the FTA with five Central American countries (CAFTA) and possibly the Dominican Republic if a dispute over a recent tax placed on high fructose syrup drinks can be resolved. The Bush Administration will likely complete FTA negotiations with several other countries and launch negotiations with still others this year. Before the end of its first session, the 109th Congress will face a decision on whether to introduce and act on a joint resolution to disapprove continued U.S. 56 CRS Report RL31832, The Export Administration Act: Evolution, Provisions, and Debate, by Ian F. Fergusson. CRS-20 participation in the WTO. Furthermore, the 109th Congress may consider whether to comply with a WTO dispute resolution against the "Byrd Amendment," especially if U.S. exports become subject to retaliatory tariffs. Anxiety about job losses from foreign competition and the growing U.S. trade deficit are also likely to focus considerable congressional attention on China's trading practices, including its undervalued currency. Congress again may consider legislation that allows an easing of longstanding restrictions on the importation of prescription drugs. In addition, if history is a guide, Congress again may consider sanctions legislation to target and affect the behavior of rogue or oppressive states. CRS-21 Appendix A. Major Trade Legislation Introduced in the 108th Congress57 Table 1. Trade Agreements Legislation Legislation House Senate Final Action U.S.-Chile FTA. Legislation (H.R. House passed the U.S.-Chile Senate passed the companion bill on President Bush signed the bill into 2738) to implement the U.S.-Chile Implementation Act (H.R. 2738) on July 31, 2003 by a vote of 66-31. law (P.L.108-77) on September 3, Free Trade Agreement. July 24, 2003 by a vote of 270-156. 2003, and the agreement went into effect on January 1, 2004. U.S.-Singapore FTA. Legislation House passed the U.S.-Singapore Senate passed the companion bill on President Bush signed the bill into (H.R. 2739) to implement the U.S.- Implementation Act (H.R. 2739) on July 31, 2003 by a vote of 66-32 . law (P.L. 108-78) on September 3, Singapore Free Trade Agreement. July 24, 2003 by a vote of 272-155. 2003, and the agreement went into effect on January 1, 2004. U.S.-Australian FTA. Legislation House passed the U.S.-Australian Senate passed the companion bill on President Bush signed the bill into (H.R. 4759) to implement the U.S.- Free Trade Agreement July 15, 2004 by a vote of 80-16. law (P.L.108-286) on August 3, Australian free trade agreement. Implementation Act (H.R. 4759) on 2004. Implementation anticipated on July 14, 2004 by a vote of 314-109. January 1, 2005. U.S.-Morocco FTA. Legislation House passed H.R. 4842 on July 22, Senate passed the companion bill on President Bush signed the bill into (H.R. 4842 and S. 2677) to 2004 by a vote of 323-99. July 21, 2004 by a vote of 85-13. law (P.L.108-302) on August 17, implement to implement the U.S.- 2004. Implementation anticipated on Morocco free trade agreement. January 1, 2005. 57 Prepared by Richard Giles II, Congressional Fellow, Foreign Affairs, Defense, and Trade Division. CRS-22 Table 2. WTO Dispute Settlement Legislation Legislation House Senate Final Action Tax legislation (H.R. 4520, S. 1637) H.R. 4520 (Thomas) was introduced S. 1637 (Grassley/Baucus), was Conference report (H.Rept. 108-755) that would repeal the Extraterritorial June 4, 2004, reported as amended by introduced September 18, 2003, and filed on October 7, 2004 and bill was Income Tax Exclusion Act, ruled an the House Ways and Means reported November 7, 2003 (S.Rept. signed by the President on October illegal export subsidy by the WTO, Committee June 16, 2004 (H.Rept. 108-192), passed the Senate in 22, 2004 (P.L. 108-357). and replace it with a mix of tax relief 108-548, Part I), and passed the amended form May 11, 2004. for domestic manufacturing and the House June 17, 2004. overseas operations of U.S. multinationals. Legislation (H.R. 3933, S. 1299) to H.R. 3933 (Ramstad/Crane), S. 1299 (Snowe), introduced June 19, Repeal bills died in committee. In the repeal the Continued Dumping and introduced March 10, 2004, would 2003, would repeal the CDSOA, and WTO, seven of the countries party to Subsidy Offset Act of 2000, also repeal the CDSOA and transfer all direct the Secretary of Commerce to this complaint were authorized on known as the Byrd Amendment, amounts remaining in CDSOA provide financial and technical November 26, 2004 to impose which requires the distribution of special accounts to the Treasury. assistance to communities retaliatory of U.S. exports. No anti-dumping and countervailing determined to be "negatively retaliation imposed to date. duties to petitioners and interested impacted by trade." parties in underlying trade remedy cases. WTO ruled that the United States must repeal or modify the law by December 27, 2003. Legislation (H.R. 1073 and S. 1155) H.R. 1073 (Sensenbrenner), which S. 1080 (Hatch/Leahy), which would Conference report of the to repeal the Antidumping Act of would repeal the act but not affect repeal the act but would apply Miscellaneous Tariff Act (H.Rept. 1916. This act, which creates a current legislation, was introduced retrospectively, was introduced May 108-771) contains a provision that private right of action and criminal May 19, 2003 and reported on 19, 2003. S. 1155 (Grassley), which repeals the 1916 act prospectively; penalties against dumping, was found February 6, 2004 (H.Rept. 108-415). would repeal the act but not apply to P.L. 108-429 signed December 3, by the WTO on August 28, 2000 to current legislation, was introduced 2004. be in violation of the WTO May 23, 2003. Antidumping Agreement. CRS-23 Legislation House Senate Final Action Legislation (H.R. 188, H.R. 1698, H.R. 1988 (Serrano) and H.R. 1698 S. 403 (Baucus) would repeal section Bills died in committee. H.R. 2494, H.R. 4225, S. 403, S. would repeal section 211 in 211 in connection with removal of 2002, and S. 2373) to repeal section connection with removal of the U.S. the U.S. trade embargo of Cuba. S. 211 of the Omnibus Appropriations trade embargo of Cuba. H.R. 2494 2002 (Baucus/Craig) is identical to Act of 1998. This case involves a (Rangel) would repeal section 211 H.R. 2494 and S. 2373 (Domenici) is trademark exclusion involving and make other changes in U.S. law identical to H.R. 4225. property confiscated by the Cuba. regarding trademarks with Cuba. H.R. 4225 (Smith) would amend section 211 and extend its prohibition on judicial recognition of trademark rights to rights asserted by nationals of all countries. Legislation ( S. 1258) to create a H.R. 2365 (English) was introduced S. 1258 (Bayh) was introduced on Bills died in committee. special commission to review dispute on June 5, 2003. Cosponsors: 17. June 12, 2003. Referred to Finance findings by the WTO that were Referred to the Ways and Means Committee on June 12, 2003. adverse to U.S. law. If the Subcommittee on Trade on June 12, commission found that the WTO 2003. acted improperly three times within a five-year period, the administration would be required to propose changes in WTO Dispute Settlement procedures. H.R. 2365 establishes a Congressional Advisory Commission to review all WTO panel findings that are adverse to the U.S. position. CRS-24 Table 3. Trade and Tariff Preferences Legislation House Senate Final Action AGOA III. Legislation to extend H.R. 4103 (Thomas) passed the S. 2529 (Grassley), identical to H.R. AGOA III signed into law (P.L. 108- and amend trade preferences and House by voice vote on June 14, 4103, passed the Senate on June 24, 274) on July 13, 2004. other benefits for Sub-Saharan 2004. 2004 by voice vote, obviating the African countries. need for a conference. S. 1900 (Lugar) was introduced on November 20, 2003. Miscellaneous Trade and Technical H.R. 1047 (Crane) passed the House S. 671 (Grassley), passed the Senate Conference Report (H.Rept. 108-771) Correction Act of 2003. The bill on March 5, 2003 by a vote of 415- on March 4, 2004 in lieu of S. 671 filed on October 8, 2004 and renews already expired duty 11. with an amendment by unanimous approved by the House on October 8, suspensions and includes new duty consent. 2004 and the Senate on November suspensions for approximately 400 19, 2004. Signed into law (P.L.108- products, many specialty chemicals 429) on December 3, 2004. and other items that are not made in the United States but that are used by U.S. manufacturers, as well as other trade provisions. Haiti Trade Preferences. H.R. 4889 (Shaw) was introduced on S. 2261 (DeWine) was introduced on Bills died in committee. Legislation introduced in the second July 21, 2004. Cosponsors:11. March 30, 2004. Cosponsors: 18. session (S. 2261 and H.R. 4889) Referred to Ways and Means Passed the Senate on July 16, 2004 would increase duty-free access to Committee. Ways and Means Trade with an amendment by unanimous the U.S. market for Haitian apparel Subcommittee held a hearing consent. products. Two identical bills September 22, 2004 on H.R. 4889. introduced in the first session (H.R. 1031 and S. 489) were more restrictive with regard to country of origin rules for sourcing eligible fabric. CRS-25 Legislation House Senate Final Action Middle East Trade Preferences. H.R. 2267 (Adam Smith) was S. 1121 (Baucus) was introduced on Bills died in committee. Legislation (H.R. 2267, H.R. introduced May 22, 2003, and May 22, 2003 and referred on May 2467and S. 1121) to authorize certain referred on June 6, 2003 to Ways and 22, 2003 to Finance Committee. trade benefits to countries of the Means Subcommittee on Trade. H.R. Cosponsors: 5. Finance Committee greater Middle East. 2467 (Adam Smith) was introduced held a hearing on S. 1121 on March on June 12, 2003 and referred on 10, 2004. June 19, 2003 to Ways and Means Subcommittee on Trade. CRS-26 Table 4. Permanent Normal Trade Relations Status Legislation House Senate Final Action Armenia. Legislation (H.R. 528 and H.R. 528 (Knollenberg) was S. 1557 (McConnell) was introduced Provision added in conference report S. 1557) to authorize the extension of introduced on February 4, 2003. on August 1, 2003. Cosponsors: 23. to H.R. 1047 which was agreed to by nondiscriminatory treatment (normal Cosponsors: 13. Referred on Referred to Finance Committee on the House on October 8, 2004 and by trade relations treatment) to the February 6, 2003 to Ways and Means August 1, 2003. the Senate on November 19, 2004. products of Armenia. Trade Subcommittee. Signed into law (P.L. 108-429) on December 8, 2004. Laos. Legislation (H.R. 3195, H.R. H.R. 1031 (McCollum) introduced on S. 2200 (Baucus) introduced on Provision added in conference report 3943, and S. 2200) to extend normal February 27, 2003. Cosponsors: 4. March 11, 2004. Cosponsors: 2. to H.R. 1047 which was agreed to by trade relations treatment to the Referred on September 30, 2003 to Referred on March 11, 2004 to the House on October 8, 2004 and by products of Laos. Legislation (S. Ways and Means Subcommittee on Finance Committee. the Senate on November 19, 2004. 3000) to postpone the extension of Trade H.R. 3943 (Crane) introduced S. 3000 (Coleman) was introduced on Signed into law (P.L. 108-429) on normal trade relations to the products on March 11, 2004. Cosponsors: 11. November 18, 2004. Cosponsors: 3. December 3, 2004. of Laos. Referred on March 11, 2004 to the Referred on November 18, 2004 to Ways and Means Committee. the Committee on Finance. Russia. Legislation (H.R. 1224, S. H.R. 1224 (Rangel) introduced on S. 580 (Lugar) introduced March 10, Bills died in committee. 580, S. 624) to authorize the March 12, 2003. Cosponsors: 3. 2003. Cosponsors: 4. Referred on extension of non-discriminatory Referred on March 12, 2003 to March 10, 2003 to Finance treatment (normal trade relations Committees on Ways and Means, Committee. treatment) to the products of the International Relations, and Rules. S. 624 (Baucus) introduced March Russian Federation. 13, 2003. Cosponsors: 1. Referred to Finance Committee on March 13, 2003. CRS-27 Legislation House Senate Final Action Ukraine. Legislation (H.R. 3906, H.R. 3906 (Miller, C.) was S. 2205 (Levin) was introduced on Bills died in committee. H.R. 3958, H.R. 4619, S. 2205) to introduced on March 3, 2004. March 11, 2004. Referred on March authorize the extension of Referred on March 4, 2004 to Ways 11, 2004 to Finance Committee. nondiscriminatory treatment and Means Committee. (permanent normal trade relations H.R. 3958 (Levin) was introduced treatment) to the products of Ukraine. on March 11, 2004. Referred on March 11, 2004 to the Ways and Means, International Relations, and Rules Committees. H.R. 4619 (Gerlach) was introduced on June 18, 2004. Referred on June 18, 2004 to Ways and Means Committee. CRS-28 Table 5. Importing Prescription Drugs Legislation House Senate Final Action H.R. 2427 (Gutknecht), the H.R. 2427 (Gutknecht) passed House Related bills: S. 1781, S. 2137. Received in the Senate, but no action Pharmaceutical Market Access Act of (243-186) on July 25, 2003, without taken. 2003. A bill to authorize the amendment. Sent to the Senate. Secretary of Health and Human Services to promulgate regulations for the reimportation of prescription drugs, and for other purposes. S. 2307 the Reliable Entry for S. 2307 (Grassley) introduced on Bill died in committee. Medicines at Everyday Discounts April 8, 2004. Referred on April 8, through Importation with Effective 2004 to Finance Committee. Safeguards (REMEDIES) Act of 2004. A bill to amend the Federal Food, Drug, and Cosmetic Act with respect to the importation of prescription drugs by importers, and by individuals for personal use, and for other purposes. S. 2328, the Pharmaceutical Market S. 2328 (Dorgan) introduced on April Bill died in committee. Access and Drug Safety Act of 2004. 21, 2004. Cosponsors: 31. Referred Requires the Secretary of Health and on April 21, 2004 to Health, Human Services to promulgate Education, Labor and Pensions regulations allowing the importation Committee and to Judiciary of prescription drugs by registered Committee. Judiciary Committee exporters or importers. hearing held on July 14, 2004. CRS-29 Legislation House Senate Final Action S. 2493, the Safe Importation of Related bill H.R. 4923 (Bradley). S. 2493 (Gregg) introduced on June Bill died in committee. Medical Products and Other Rx 2, 2004. Cosponsors: 8. Referred on Therapies (IMPORT) Act of 2004. June 2,2004 to Committee on Health, Amends the Federal Food, Drug, and Education, Labor, and Pensions. Cosmetic Act to protect the public health from the unsafe importation of prescription drugs from counterfeit prescription drugs, and for other purposes. CRS-30 Table 6. Trade Remedy Legislation Legislation House Senate Final Action Trade Law Reform Act of 2003. H.R. 2365 (English) was introduced Bill died in committee. H.R. 2365 amends the Tariff Act of June 5, 2003. Cosponsors: 17. 1930 to revise factors that the Referred on June 12, 2003 to Ways International Trade Commission and Means Subcommittee on Trade. must consider in making material injury determinations in countervailing duty and antidumping proceedings, among other provisions. Expedited Remedy for Persistent S. 136 (Lincoln) was introduced Bill died in committee. Dumping Act of 2003. S. 136 January 1, 2003. Cosponsors: 5. amends the Tariff Act of 1930 to Referred on January 9, 2003 to provide for an expedited antidumping Finance Committee. investigation when imports increase materially from new suppliers after an antidumping order has been issued, and to amend the provision relating to adjustments to export price and constructed export price. S. 219 amends the Tariff Act of 1930 S. 219 (Craig) was introduced Bill died in committee. to clarify the adjustments to be made January 28, 2003. Cosponsors: 13. in determining export price and Referred on January 28, 2003 to constructed export price. Finance Committee. A bill (H.R. 3716, S. 2212) that H.R. 3716 (English) was introduced S. 2212 (Collins) was introduced on Bill died in committee. amends the Tariff Act of 1930 to January 21, 2004. Cosponsors: 64. March 12, 2004. Cosponsors: 18. provide that the provisions relating to Referred on January 21, 2004 to Referred on March 12, 2004 to countervailing duties apply to Ways and Means Committee. Finance Committee. nonmarket economies. Related bill: (H.R. 2938) CRS-31 Table 7. Other Issues in Import Policy Legislation House Senate Final Action Buy American Act. HR. 3017 H.R. 3017 (Kilpatrick) was Bill died in committee. amends title 49, United States Code, introduced September 5, 2003. to clarify certain Buy America Referred on September 8, 2003 to provisions. Responding to criticism House Transportation and about lax enforcement and too many Infrastructure Subcommittee on waivers, H.R. 3017 would modify Highways. how the Federal Transit Agency (FTA) implements certain provisions of the Buy American Act. Buy American Act. S. 1480 S. 1480 (Feingold) was introduced on Bill died in committee. amends the Buy American Act to July 29, 2003. Referred on July 29, increase the requirement for 2003 to Governmental Affairs American-made content, to tighten Committee. waiver provisions, and for other purposes. Milk Import Quota. H.R. 1160 and H.R. 1160 (Sherwood) was S. 560 (Craig) was introduced on Bills died in committee. S. 560) impose tariff-rate quotas on introduced March 6, 2003. March 6, 2003. Cosponsors: 36. certain casein and milk protein Cosponsors: 199. Referred on March Referred on March 6, 2003 to the concentrates. 17, 2003 to House Ways and Means Finance Committee. Subcommittee on Trade. Country of Origin Labeling H.R. 4576 (Goodlatte) was No floor action taken. (COOL). H.R. 4576 establishes a introduced on June 15, 2004. voluntary program for the provision Cosponsors: 31. The House of country-of-origin labeling Committee on Agriculture reported information with respect to certain by voice vote H.R. 4576 on July 22, agricultural products. 2004. CRS-32 Legislation House Senate Final Action Several bills (H.R. 3732, H.R. 3993, H.R. 3732 (Rehberg) was introduced S. 2451 (Daschle) was introduced on Bills died in committee. and S. 2451) were introduced to on January 27, 2004. Referred to the May 20, 2004. Cosponsors: 6. Placed accelerate the implementation of the House Committee on Agriculture on on Senate Legislative Calendar on mandatory labeling (COOL) January 29, 2004. May 21, 2004. program. H.R. 3993 (Bono) was introduced on March 18, 2004. Referred to the House Committee on Agriculture on March 18, 2004. CRS-33 Table 8. China Legislation House Senate Final Action Currency peg. A resolution (H.Res. H.Res 414 (English) introduced on H.Res. 414 passed the House on 414) that encourages China to fulfill October 28, 2003. Cosponsors: 47. October 29, 2003 by a 411-1 vote. its commitments under international trade agreements, and establish monetary and financial market reforms. Currency peg. A resolution S.Res. 219 (Graham, L) was S.Res. 219 passed without (S.Res.219) to encourage China to introduced on September 9, 2003. amendment by unanimous consent on establish a market-based valuation of Cosponsors: 16. September 26, 2003. the yuan. Currency peg. Legislation (H.R. H.R. 3058 (English) was introduced S. 1758 (Voinovich) was introduced Bills died in committee. 3058/S. 1758) would require the on September 10, 2003. Cosponsors: on October 10, 2003. Cosponsors: 2. U.S. Secretary of the Treasury to 87. Referred on September 23, 2003 Referred on October 20, 2003 to analyze and report on China's to Ways and Means Subcommittee Committee on Finance. exchange rate policies, and would on Trade. require additional tariffs to be assessed on Chinese products imported into the United States if the Secretary determined that China manipulates its currency. Currency peg. H.R3364/S. 1586 H.R. 3364 (Myrick) was introduced S. 1586 (Schumer) was introduced on Bills died in committee. would impose an additional duty of on October 21, 2003. Cosponsors: 4. September 5, 2003. Cosponsors: 12. 27.5% on Chinese goods imported Referred on October 21, 2003 to Referred on September 5, 2003 to into the United States if China Committee on Ways and Means. Finance Committee. refused to make its currency freely convertible. H.R. 3058/S. 1758, H.R. 3269, H.R. CRS-34 Legislation House Senate Final Action 4896, S.Res. 219, S. 1586/H.R. 3364, and S. 1592) to encourage China to appreciate its artificially undervalued currency in order to make Chinese exports to the U.S. more expensive and U.S. exports to China less expensive. Textiles. Legislation (H.R. 5026) to H.R. 5026 (Levin) introduced on Bill died in committee. require the President to take certain September 8, 2004. Cosponsors: 8 actions to enforce the textiles and Referred to House Committee on apparel safeguard with respect to Ways and Means on September 8, imports from China. 2004. CRS-35 Table 9. "Offshoring" Service Jobs Legislation House Senate Final Action S.Amdt. 2660 to S. 1637. S.Amdt. 2660 (Dodd) was submitted Amendment as modified agreed to in Amendment to the Office of Federal on March 3, 2004. Cosponsors: 5. Senate by 70-26 vote on March 4, Procurement Policy Act to limit the 2004. S. 1637 passed the Senate on offshoring of Federal or state May 11, 2004 by a 92-5 vote. government contracts for the procurement of goods and services. S. 1637 to amend the Internal Revenue Code of 1986 to comply with WTO rulings on the FSC/ETI benefit. (See Title V, Sec. 501 for offshoring language). H.R. 3820 to limit off-shore H.R. 3820 (DeLauro) was introduced Bill died in committee. performance of federal and state on February 24, 2004. Cosponsors: contracts for the procurement of 41. Referred to the House Committee goods and services. on Government Reform. S.Amdt. 3109 to, in part, provide S.Amdt. 3109 (Wyden) was S.Amdt. 3109 to S. 1637 was ruled trade adjustment assistance program submitted on May 3, 2004 as an out of order by the chair after the to service workers. amendment to S. 1637. motion to waive the Budget Act was rejected by a 54-45 vote. Legislation (H.R. 3881, H.R. 3957, H.R. 3881 (Smith) was introduced on S. 2143 (Durbin) was introduced on Bills died in committee. H.R. 4090, H.R. 5030, S. 2143, and March 3, 2004. Cosponsors: 111; February 27, 2004. Cosponsors: 4; S. 2157) to amend the Trade Act of H.R. 3957 (King) was introduced and S. 2157 (Baucus) was introduced 1974 to extend the trade adjustment March 11, 2004; H.R. 4090 (Camp) on March 2, 2004. Cosponsors: 27. assistance program to workers in the was introduced on March 31, 2004. Senate bills referred to Finance service sector. Cosponsors: 10; and H.R. 5030 Committee. (Michaud) introduced on September 8, 2004; House bills referred to Ways and Means Committee. CRS-36 Table 10. Export Promotion Legislation House Senate Final Action OPIC. Legislation extending the Passed House on November 19, Passed Senate on November 14, Signed into law (P.L. 108-158) on operating authority of the Overseas 2003. 2003. December 3, 2003. Private Investment Corporation. Export-Import Bank. Eximbank, the chief U.S. government agency that finances U.S. exports, was reauthorized in 2002 (P.L. 107-189) for four years. Section 301. Legislation to establish H.R. 2579 (Camp) was introduced on S. 1324 (Grassley) was introduced on Bills died in conference. procedures for identifying countries June 24, 2003. Cosponsors: 63. June 24, 2003. Cosponsors: 4. that deny market access for Referred on June 27, 2003 to Ways Referred on June 24, 2003 to Finance agricultural products of the United and Means Trade Subcommittee. Committee. States, and for other purposes. Super 301. Legislation to amend the H.R. 4120 (Rangel) was introduced S. 2372 (Corzine) was introduced on Bills died in committee. Trade Act of 1974 regarding on April 1, 2004. Cosponsors: 5. April 29, 2004. Cosponsors: 6. identifying trade expansion priorities. Referred on April 1, 2004 to Ways Referred on April 29, 2004 to and Means Committee. Finance Committee. S. 2786 (Bayh) was introduced on September 10, 2004. Referred on September 10, 2004 to Finance Committee. CRS-37 Table 11. Trade Sanctions Legislation House Senate Final Action Libya. FY2005 omnibus spending H.R. 4818 passed by House by a vote H.R. 4818 passed the Senate by a P.L. 108-447 was signed by President bill (H.R. 4818) contained a of 344-51 on November 20, 2004. vote of 65-30 on November 20, 2004. Bush on December 8, 2004. provision (Division J, Title I, sec. 113) authorizing the President to lift the current ban on government support for U.S. exports to Libya provided by the Export-Import Bank. Burma. Legislation (H.R. 2330) to H.R. 2330 (Lantos) introduced on H.R. 2330 passed the Senate without Became law (P.L. 108-61) on July sanction the ruling Burmese military June 4, 2003. Cosponsors: 51. amendment on July 16, 2003 by a 28, 2003. H.J.Res. 97 (Lantos) junta, to strengthen Burma's Reported by the Committee on vote of 94-1. renewed the import restrictions democratic forces and support and International Relations on June 17, contained in the Burmese Freedom recognize the National League of 2003 and reported (as amended) by and Democracy Act and became law Democracy as the legitimate the Committee on Judiciary on July (P.L.108-272) on July 7, 2004. representative of the Burmese people, 11, 2003. Passed by the House on and for other purposes. Burmese July 15, 2003 under suspension of the Freedom and Democracy Act bans rules by a vote of 418-2. U.S. imports from Burma affecting mainly textiles and apparel. Ban to remain in effect until the President certifies that progress is being made in eliminating human rights violations. CRS-38 Legislation House Senate Final Action Cuba. Legislation to lift the trade The House-approved version of the The Senate version of the FY2005 Under the threat of presidential veto, embargo against Cuba and to require FY2005 Transportation/Treasury Agriculture appropriations bill, S. none of the provisions easing Cuban congressional renewal of trade appropriations bill, H.R. 5025, had 2803, as reported by the Senate sanctions were included in the restrictions to Cuba. Several FY2005 three provisions that would have Appropriations Committee, had a FY2005 omnibus appropriations appropriations bills -- Commerce, eased Cuban sanctions. provision (Section 776) that would measure (P.L. 108-447, H.R. 4818, Justice and State; Agriculture; and have directed the Secretary of the H.Rept. 108-792.). Transportation/Treasury -- had Treasury to promulgate regulations provisions easing Cuba sanctions. allowing for travel to Cuba under a Numerous free-standing bills were "general license" when it was related also introduced to either tighten or to the commercial sale of agricultural weaken the Cuban sanctions regime, and medical products. but no action was taken. Belarus. Legislation (H.R. 854 and H.R. 854 (Smith) was introduced on S. 700 (Campbell) was introduced on H.R. 854, as amended, became law S. 700) to provide for the promotion February 13, 2003. Referred to the March 25, 2003. Referred to (P.L. 108-347) on October 20, 2004. of democracy, human rights, and rule Committees on International Committee on Foreign Relations. of law in the Republic of Belarus and Relations, Judiciary, and Financial Passed H.R. 854 without amendment for the consolidation and Services. Passed the House on by unanimous consent on October 6, strengthening of Belarus sovereignty October 4, 2004 on motion to 2004. and independence. suspend the rules by voice vote. Syria. Legislation (H.R. 1828/S. H.R. 1828 (Engel) was introduced S.Amdt. 2148 (Lugar) agreed to by H.R. 1828, as amended, became law 982) to halt Syrian support for April 12, 2003. Cosponsors: 297. Voice vote. Passed Senate with an (P.L.108-175 on December 12, 2003. terrorism, end its occupation of Referred on April 12, 2003 to amendment by a 89-4 vote on Lebanon, stop its development of Committee on International November 11, 2003. House agreed to weapons of mass destruction, and for Relations. Reported by the Senate amendment on November 20, other purposes. committee (as amended) on October 2003. 15, 2003. Passed on the house floor on October 15, 2003 by a vote of 398-4. Measure sent to the Senate on October 16, 2003. CRS-39 Table 12. Export Controls Legislation House Senate Final Action Export Administration Act. H.R. 55 (Dreier) introduced January Died in committee. Legislation to rewrite export control 7, 2003. Cosponsors: 2. Referred on laws. January 7, 2003 to Committee on International Relations. Defense Department FY2005 H.R. 4200 (Hunter) introduced on S. 2400 (Warner) introduced on May House-Senate conference agreed to Authorization Bill. H.R. 4200 May 22, 2004. Passed by the House 11, 2004. Passed the Senate on June on October 8, 2004 (H.Rept. 108- contains a number of provisions on May 20, 2004. Conference report 23, 2004. This bill provided waivers 767) requires the Secretary of State, affecting the Arms Export Control (H.Rept. 108-767) filed on October 8, necessary to implement bilateral in consultation with the Defense Act and bilateral exchanges and trade 2004. Conference report agreed to in export control agreements with the Department, to ensure that any in defense items. Some of the the House on October 9, 2004. United Kingdom and Australia, applications for a license to export provisions would make it more which was included in the conference defense articles or services to the difficult to implement bilateral report (H.Rept. 108-767). United Kingdom and Australia are defense export control agreements, "expeditiously processed." Other subject a range of new of goods to provisions from H.R. 4200 that new export licensing requirements, would have made export control and impose new penalties and regime more restrictive were dropped licensing requirements for certain from the conference report. Became defense trade with China. law (P.L. 108-375) on October 28, 2004. CRS-40 Appendix B. Trade-Related Hearings in the 108th Congress58 House of Representatives Committee on Agriculture Agricultural Trade Negotiations, Serial 108-29, May, 19, 2004 and April 28, 2004. Mandatory Country of Origin Labeling, Serial 108-12, June 26, 2003, and Serial 108-17, October 1, 2003. Multilateral and Bilateral Agricultural Trade Negotiations, June 18, 2003. Review of Artificial Barriers to U.S. Agricultural Trade and Foreign Food Assistance, Serial 108-1, March 26, 2003. The Status of the World Trade Organization Negotiations on Agriculture, Serial 108- 5, July 22, 2003, June 18, 2003, and May 21, 2003. Committee on Appropriations Trade Capacity Building, Round Table Discussion, July 21, 2003. Committee on Energy and Commerce South Florida's Access to Affordable Prescription Drugs: Cost and Benefits of Alternative Solutions. Serial 108-9, March 3, 2003. System Overwhelmed: The Avalanche of Imported, Counterfeit, and Unapproved Drugs into the U.S., Serial 108-29, June 24, 2003. U.S.-China Trade: Preparation for the Joint Commission on Commerce and Trade, Serial 108-74, March 31, 2004. Subcommittee on Commerce, Trade, and Consumer Protection, Trade in Services and E-Commerce: The Significance of the Singapore and Chile Free Trade Agreements, Serial 108-19, May 8, 2003. Committee on Financial Services Annual testimony of the Secretary of the Treasury regarding the State of the International Financial System, March 25, 2004. 58 Prepared by Richard Giles II, Congressional Fellow, Foreign Affairs, Defense, and Trade Division. CRS-41 China's Exchange Rate Regime and its Effects on the U.S. Economy, Serial 108-56, October 1, 2003. Opening Trade in Financial Services -- The Chile and Singapore Examples, Serial No. 108-16, April 1, 2003. The US-EU Regulatory Dialogue and its Future, Serial 108-86, May 13, 2004. Domestic and International Subcommittee, Oversight of the Export - Import Bank of the United States, May 6, 2004. Committee on Government Reform Canadian Prescription Drug Importation: Is There A Safety Issue, Serial 108-59, June 12, 2003. International Prescription Drug Parity: Are Americans Being Protected or Gouged, Serial 108-12, April 3, 2003. Committee on International Relations Burmese Freedom and Democracy Act of 2003, Serial 108-22, June 10, 2003. Economic Ties with China, October 21, and October 30, 2003. Enforcement of the Iran-Libya Sanction Act and Increasing Security Threats from Iran, Serial 108-59, June 25, 2003. Intellectual Property Crimes: Are Proceeds from Counterfeited Goods Funding Terrorism, Serial 108-48, July 16, 2003. Overview of U.S. Policy Toward the Western Hemisphere, Serial 108-8, February 27, 2003. Renewing OPIC and Renewing Its Role in Support of Key U.S. Objectives, Serial 108-57, June 10, 2003. Trade Policy toward Sub-Saharan Africa, February 5, 2003. U.S. Priorities in Europe, Serial 108-75, March 3, 2004. Subcommittee-Africa, African Growth and Opportunity Act: Building Trade Capacity, Serial 108-98, May11, 2004. Boosting Africa's Agricultural Trade, Serial 108-30, June 24, 2003. Boosting Africa's Agricultural Trade, Serial 108-30, June 24, 2003. Subcommittee on Asia and the Pacific, U.S. Trade and Commercial Policy in Southeast Asia, Serial 108-37, June 25, 2003. CRS-42 Subcommittee on Europe, Issues Affecting U.S. Political and Economic Relations with Europe, Serial 108-7, March 13, 2003, and Serial 108-34, June 17, 2003. Subcommittee on Western Hemisphere, Closed hearing with Central American Ministers of Trade and Labor, July 13, 2004. Committee on Judiciary Markup of H.R. 2738 (H.Rept. 108-224, part 2), the "U.S.-Chile Free Trade Agreement Implementation Act," H.R. 2739 (H.Rept. 108-225, part 2), and the "U.S.-Singapore Free Trade Agreement Implementation Act," H.R. 49 (H.Rept. 108-234), July 16, 2003. Trademarks Controlled by Companies Seized in the Cuban Revolution, July 13, 2004. Committee on Small Business Challenge to FSC/ETI Rules and the Effect on America's Small Business Owners, Serial 108-14, May 14, 2003. Effect of Foreign Currency Manipulation on Small Manufacturers and Exporters, Serial 108-21, June 25, 2003. Globalization of White-Collar Jobs: Can America Lose These Jobs and Still Prosper, Serial 108-20, June 18, 2003. Offshoring of High-skilled Jobs, Serial 108-42, October 20, 2003. Small Business Exporting and the Southern California Economy, Serial 108-33, August 28, 2003. The WTO's Challenges to the FSC/ETI Rules and the effects on America's Small Business, Serial 108-38, September 10, 2003. US-Chile Free Trade, June12, 2004. Subcommittee on Tax, Finance and Exports, The Chilean Free Trade Agreement: Opening Doors to South American Markets, Serial 108-19, June 12, 2003. Committee on Ways and Means Customs Budget Authorizations and Other Customs Issues, June 17, 2004. Impact of Section 201 Safeguard Action on Certain Steel Products, Serial 108-15, March 26, 2003. Implementation of the United States-Morocco Free Trade Agreement, July 7, 2004. Implementation of the United States-Australia Free Trade Agreement, June 16, 2004. CRS-43 Implementation of U.S. Bilateral Free Trade Agreements with Chile and Singapore, Serial 108-24, June 10, 2003. President Bush's Trade Agenda, Serial 108-12, February 26, 2003, and March 11, 2004. Trade with Sub-Saharan Africa and H.R. 4103, the "AGOA Acceleration Act of 2004," April 29, 2004. United States-China Economic Relations and China's Role in the Global Economy; Serial 108-22, October 31, 2003 and October 30, 2003. Subcommittee on Trade, Haiti Trade Preferences, September 22, 2004. Senate Committee on Agriculture Potential Burdens Associated with the New Country-of-Origin (COOL) Law, Serial 108-96, April 22, 2003. The current situation regarding the discovery of a case of bovine spongiform encephalopathy in a dairy cow in Washington state as it relates to food safety, livestock marketing and international trade, January 27, 2004. Committee on Appropriations International and Domestic Intellectual Property Enforcement, Serial 98-984, April 29, 2004. Committee on Banking, Housing and Urban Affairs Committee Pending Nominations to the Export- Import Bank, December 09, 2003. The National Export Strategy, Serial 108-438, May 21, 2003. Committee on Commerce, Science, and Transportation Cost of Prescription Drugs and Drug Importation, November 20, 2003. Importation of Prescription Drugs, March 11, 2004. Committee on Finance Examination of U.S. Tax Policy and Its Effect on the Domestic and International Competitiveness of U.S.-Based Operations, Serial 108-456, July 8, 2003. International Trade and the U.S. Soda Ash Industry, April 15, 2004. CRS-44 Regarding U.S.-Cuba Economic Relations, September 4, 2003. Review of proposed legislation implementing the U.S.- Singapore Free Trade Agreement, June 17, 2003 and July 10, 2003. Review of proposed legislation implementing the U.S.- Chile Free Trade Agreement, June 17, 2003 and July 10, 2003. Status of the Free Trade Area of the Americas: Negotiations and Preparations for the Miami Ministerial, Serial 108-179, May 13, 2003. The Administration's International Trade Agenda, March 5, 2003 and March 9, 2004 The U.S.-Australia Free Trade Agreement, June 24, 2004 and July 15, 2004. U.S.-Australia and U.S.-Morocco Free Trade Agreement, June 15, 2004. The U.S.-Morocco Free Trade Agreement Implementation Act, July 20, 2004. Unfilled Promises: Mexican Barriers to U.S. Agricultural Exports, September 23, 2003. United States Economic and Trade Policy in the Middle East, March 10,2004. Subcommittee Joint Hearing, International Trade and Health Care, International Trade and Pharmaceuticals, April 27, 2004. Subcommittee on Trade, Status of the Free Trade Area of the America's: Negotiations and Preparations for the Miami Ministerial, May 13, 2003. Committee on Foreign Relations AGOA III: The United States-Africa Partnership Act of 2003, S.Hrg. 108-512, March 25, 2004. Challenges and Accomplishments as the European Union and the United States Promote Trade and Tourism in Terrorist Environments, May 13, 2004. Examining the Effects and Consequences of an Emerging China, Serial 108-58, March 19, 2003. NAFTA: A Ten Years Perspective and Implications for the Future, S.Hrg. 108-593, April 20, 2004. The African Growth and Opportunity Act, S.Hrg. 108-187, June 25, 2003. The Future of U.S. Economic Relationships in the Western Hemisphere, April 20, 2003. The Greater Middle East Initiative: Sea Island and Beyond, June 2, 2004. CRS-45 Trade and Human Rights: The Future of U.S.-Vietnamese Relationship, S.Hrg. 108- 464, February 12, 2004. U.S.-China Relations, Serial 108-265, September 11, 2003. U.S.-China Relationship: Status of Reforms in China, April 22, 2004. U.S.-EU Cooperation on Regulatory Affairs, S.Hrg. 108-330, October 16, 2003. U.S. Relations with a Changing Europe: Differing Views on Technology Issues, Serial 108-188, June 24, 2003. European Affairs Subcommittee, U.S.-EU Travel and Trade Cooperation, May 13, 2004. Committee on Governmental Affairs Fair or Foul: The Challenge of Negotiating, Monitoring and Enforcing U.S. Trade Laws, Serial 108-398, December 9, 2003. Committee on the Judiciary Drug Importation, July 14, 2004. The L-1 Visa and American Interests in the 21st Century Global Economy, S.Hrg. 108-327, July 29, 2003. Proposed United States-Chile and United States-Singapore Free Trade Agreements with Chile and Singapore, S.Hrg.108-301, July 14, 2003. Committee on Small Business and Entrepreneurship Small Business Manufacturing in a Global Market, Field Hearing, Lewiston Maine, October 9, 2003. ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-RL32698