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The Trade Act of 2002: Summary of Provisions, Part II Division B - Bipartisan Trade
Promotion Authority Act
Section 2102 of the Act deals with the Trade Negotiating Objectives of the United States. Regarding trade barriers and distortions, the US seeks to reduce or eliminate tariff and non-tariff barriers and foreign government policies that decrease opportunities for US exports, barriers to trade in services, and trade-distorting barriers to foreign investment (maintaining the principles of national treatment, free transfer of funds, elimination of performance requirements, due process, standards for expropriation, appeals, etc.). With regard to intellectual property, the US seeks to promote adequate protection by: ensuring implementation of the Uruguay Round TRIPS Agreement, especially adequate enforcement; ensuring that any trade agreement governing intellectual property rights provides protections similar to that found in US law and offers strong protection to new technologies; preventing discrimination regarding use, enforcement, etc. of intellectual property rights; ensuring that standards of protection keep pace with technological developments and prevent unauthorized use of authors' works; securing fair market access for US persons that depend on IP protection; and respecting the declaration on the TRIPS agreement and public health reached at the WTO meeting in Doha. Another objective of the act is to broaden transparency in trade by increasing access to information on trade issues and the activities of international trade organizations, including the WTO and other trade forums, and their documentation. Anti-corruption efforts are pursued by exhorting the inclusion in trade agreements of standards and enforcement against any attempt to influence decisions of foreign government officials. The legislation also seeks to ensure that such standards do not place US persons at a competitive disadvantage. A negotiating objective with regard to the WTO and other trade agreements is to expand their coverage "to products, sectors, and conditions of trade not adequately covered" and to expand participation in the Information Technology Agreement. The negotiating objectives regarding regulatory practices are: to prevent the use of government regulations by foreign governments to give advantage to their domestic producers, and to achieve participation of affected parties in the development of regulations; base regulations on good science, analysis and objective evidence; create consultative mechanisms to promote transparency in developing rules and laws for government procurement and regulations; and eliminate price controls and reference pricing. For electronic commerce (EC), the negotiating objectives are: to ensure that current WTO rules and commitments and disciplines are extended to cover this area; that electrically traded goods do not suffer discrimination compared to physically traded goods; that governments refrain from implementing trade-related measures to impede EC; that classification of EC goods ensures liberal trade treatment; that where regulations are necessary they be as supportive of open markets as possible; and that an extension of the WTO moratorium on taxes on electronic transmissions be sought. The main negotiating objectives of the US for agriculture are: to obtain markets for the export of US agricultural commodities by eliminating or reducing tariffs on US exports by a specific date, giving preference to products that have high tariffs or subsidies; preserve support programs for family farms that do not distort trade; eliminate government policies that create price-depressing surpluses; strengthen rules and dispute settlement mechanisms that unfairly decrease US market access (TRQ rules, unnecessarily restrictive sanitary or technical regulations, etc.); and develop an international consensus on treatment of perishable agricultural commodities. Finally, the USTR is asked to establish a common base year for calculating the Aggregated Measurement of Support. US negotiating objectives regarding labor and the environment are: to ensure that parties in trade agreements with the US do not refrain from enforcing labor and environmental laws; give countries the right to exercise discretion in allocating resources in the enforcement of these laws; strengthen the capacity of US trading partners to promote respect for core labor values and protection of the environment; improve market access for US environmental products; and ensure that parties to trade agreements with the US do not use environmental, labor or safety regulations as disguised barriers to trade. In dispute settlement and enforcement, negotiating objectives are: to ensure that trade agreements provide for settling disputes in an equitable, open and factual manner; and strengthen the Trade Policy Review Committee of the WTO and adherence by panels convened under the Dispute Settlements Understanding and Appellate Body to standards set under the Uruguay Round Agreement. The negotiating objectives regarding trade in civil aircraft are embodied in Articles 132 and 135 of the Uruguay Round Agreements. The US seeks to continue to enforce trade remedy laws, avoid any domestic or international weakening of safeguards, and remedy market distortions. One element is revising WTO rules on border taxes to redress the advantage enjoyed by countries that relying on indirect taxes over those using direct taxes. For textile and apparel, the US wants opportunities in foreign markets comparable to those enjoyed by foreigners in the US market. Other objectives of the US are to ensure that foreign countries enforce their own laws prohibiting the worst forms of child labor. To maintain US competitiveness, the president will seek greater cooperation between the WTO and ILO on labor issues. He will also seek to establish consultative mechanisms among parties to trade agreements to avoid the worst abuses of child labor, and to develop standards for the protection of the environment and human health. This will include conducting environmental reviews of future trade and investment agreements and their effect on US labor markets. The Secretary of Labor will investigate and submit a report to Congress on the labor situation and practices of any countries with which the US is negotiating a trade agreement. The US will continue to promote multilateral environmental agreements. The legislation also states that the US should seek to form a consultative mechanism to examine whether some governments are using unanticipated currency movements to gain advantage in trade. The USTR is required to consult with the Congressional Oversight Group and Congressional Committees while engaging in negotiation of a trade agreement, including agricultural committees, for any trade agreement affecting US agriculture. The president must also take into account whether or not a country has implemented its commitments under the Uruguay Round. Section 2103 on Trade Agreements Authority grants the president the authority to negotiate trade agreements until June 1, 2005 (until 2007, if there is an extension), when the objectives of this act to reduce trade barriers can be achieved by extending, reducing or raising duties. Limitations are set such that no duty (except 5% or under) may be reduced by more than 50% or below the Uruguay Round level, or affect any sensitive agricultural product. Other limitations apply. Rounding down is permitted to simplify. Products not produced in the USA may be exempt from these limitations; however, staged reductions and modifications may be agreed to by the president if they are part of a reciprocal duty elimination under the auspices of the WTO negotiations. The president is authorized to enter into agreements to reduce or eliminate distortions of or barriers to trade resulting from non-tariff barriers and tariffs. The same time period for which authority is granted to negotiate these agreements applies - June 1, 2005 or 2007. Such agreements must meet the above mentioned objectives and certain conditions (see below). The president may request an extension to 2007 of trade authority procedures for implementing bills. The Advisory Committee for Trade Policy and Negotiations will submit a report to Congress by May 1, 2005 on progress in negotiations, and a statement of reasons why an extension should be granted (or not). The International Trade Commission (ITC) will submit to Congress by the same date a report with an analysis of the economic impact on the US of any trade agreements implemented between the enactment of this act and a request for extension. The president is authorized to commence negotiations on agreements in any economic area that will further the stated objectives of this act. Section 2104 requires the president to give 90 days notice in writing to Congress of his intention to start a negotiation and its objectives and framework. Consultations with both houses of Congress, as well as with the Congressional Oversight Group established by this act, will continue during the negotiation. When negotiating agreements that affect US agriculture, the president will assess whether the US tariffs on agricultural products bound by the Uruguay Round Agreements are lower than the tariffs bound by the country and world tariff levels for these products, and the assessment will be consulted with Congress. With regard to the FTAA negotiations and those on agriculture under the WTO, the USTR shall identify US exports subject to TRQs (tariff rate quotas) and those for which rates were reduced by no less than 97.5% in the Uruguay Round. USTR must report to Congress whether these exports face unjustified sanitary restrictions, whether further tariff reductions would be justified, and whether the countries in the negotiation maintain export subsidies or other trade distorting policies. The ITC must report on the probable economic effects of any tariff reductions. The president must inform Congress of any negotiations involving trade in fish and engage in ongoing consultations in that area. If the USG is engaged in a negotiation affecting textiles and apparel it must perform an assessment of tariff levels to determine whether further reduction is appropriate. Provision is made for Congress to pass a "procedural disapproval resolution" regarding trade remedy laws stating that an agreement fails to fulfill the objectives of this act. The president must send any agreement with Chile or Singapore to Congress 90 days before it enters into force. Section 2105 deals with the implementation of trade agreements. Trade agreements under this act will only enter into force if: the House and Senate are informed by the president 90 days in advance and he publishes the intention to sign the agreement in the Federal Register; Congress is notified 60 days after entering into the agreement of the changes to existing laws that it will require; the president submits to Congress a copy of the final text, a draft implementation bill and the administrative actions required; and lastly, the implementing bill is enacted into law. Either house of Congress may pass a "procedural disapproval resolution" in cases in which the president does not provide notice or proper consultation. A resolution may be introduced by any member of Congress exactly as worded in the act and may not be amended. By December 31, 2002, the Secretary of Commerce must report to Congress on whether dispute settlement panels and the WTO Appellate Body diminish US rights or increase obligations. Section 2106, Treatment of Certain Trade Agreements for Which Negotiations Have Already Begun, makes specific reference to agreements under the auspices of the WTO, the FTAA negotiations and an agreement with Chile or Singapore. Congressional pre-notification is waived in these cases but Congress must be informed of whether these are new agreements. The consultation requirements of this act apply. Section 2107 states that a Congressional Oversight Group must be convened by Congress within 60 days of enactment of this act. Membership from the House and from the Senate on the COG is set by this section. These members are to be accredited by USTR as official advisors to the negotiating delegation of any trade agreement falling under this act. The COG will be chaired by the chairmen of the House Ways and Means Committee and the Senate Finance Committee. These two, along with the USTR, must develop written guidelines for regular briefings of the COG on the objectives and status of negotiations, access to classified documents, etc.. After concluding an agreement, they must engage in ongoing consultations on compliance with commitments. Section 2108 deals with additional implementation and enforcement requirements which require that the president prepare, for any agreement that is submitted under this act, an implementation and enforcement plan for a trade agreement. This will include border personnel requirements, additional staffing required by federal agencies, impact on state and local governments, and Customs infrastructure requirements. Section 2109 refers to committee staff, which will need to be increased to adequately carry out the additional functions undertaken under this act. Section 2110 on conforming amendments inserts reference to this act into existing trade legislation. Section 2111 refers to a report on the impact of Trade Promotion Authority, which obligates the ITC to prepare an evaluation of the impact on the US economy of the Israel-US FTA, the US-Canada FTA, NAFTA, the Uruguay Round Agreements and the Tokyo Round of Multilateral Trade Negotiations. Section 2112 assigns to the Assistant USTR for Industry and Telecommunications the responsibility to ensure that the interests of small business are considered in any trade negotiation. Finally, Section 2113 deals with definitions of terms used in this act such as; GATT, ILO, WTO, Uruguay Round, Appellate Body, Anti-Dumping Agreement, etc.
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