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HR 1942 IH

To encourage the establishment of free trade areas between the United States and certain Pacific Rim countries.

May 26, 1999

Mr. CRANE (for himself, Mr. DREIER, Mrs. JOHNSON of Connecticut, and Ms. DUNN) introduced the following bill; which was referred to the Committee on Ways and Means

To encourage the establishment of free trade areas between the United States and certain Pacific Rim countries.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. FINDINGS.

The Congress makes the following findings:

(1) Free trade agreements improve the income and prosperity of the citizens of participating countries because open markets increase competition, eliminate inefficiencies, and result in lower costs to manufacturers and consumers.

(2) The 21 member economies of APEC represent over half of world production and almost half of global trade. In November of 1994, leaders of members economies of APEC declared their commitment to achieving `free and open trade' in the region by the year 2020 in the case of developing countries and 2010 in the case of developed countries.

(3) Continued economic growth through the creation of new opportunities for trade and investment, and the economic and political stability resulting from diminishing the proclivity of governments to establish and maintain tariff and nontariff trade barriers, is vital to the strategic and economic interests of the United States in the Pacific Rim region.

(4) The financial crisis affecting Asia, and associated macroeconomic factors, have resulted in a severe disruption of the pattern of rapid United States export growth that was the dominant pattern of United States trade with the region during the years 1989-1997.

(5) At a difficult time in the world economy, which is increasing pressures on countries to turn inward and adopt protectionist policies, free trade agreement negotiations provide additional leverage to achieve market opening measures for United States goods and services.

(6) Many countries in the region, including New Zealand, Australia, and Singapore, are long-time allies of the United States in working to increase economic growth through trade liberalization, both in the World Trade Organization and in APEC.

(7) Building closer ties and coordinating with countries whose interests are largely friendly to the United States will have immense payoffs as the trade negotiations to achieve trade liberalization described in paragraph (6) proceed early in the next century.

(8) In particular, the United States must continue to promote its interests in the Asia-Pacific region through an aggressive short- and long-term trade and investment negotiating agenda.

(9) Bilateral trade agreement negotiations have been shown to exert constructive influence on multilateral and regional trade negotiations. Typically, bilateral trade talks enlarge common areas of agreement on trade disciplines that can then be advanced more successfully in the context of a larger negotiation, among additional trading partners.

(10) Trade and investment disputes between the United States and Pacific Rim countries could be more effectively resolved in the context of mutually agreed-upon disciplines and dispute settlement mechanisms rather than issue-by-issue confrontations under section 301 of the Trade Act of 1974 or other trade remedy laws.

(11) By providing a firm foundation for enhanced cooperation, free trade agreements between the United States and Pacific Rim countries, whose economies are becoming increasingly complementary and interdependent, will help ensure mutually beneficial economic and political relations.

(12) Free trade agreements, by enhancing market access and the understanding of United States firms with respect to competing effectively in Pacific Rim markets, will thereby assist in stabilizing the bilateral trade balance between the United States and countries in the Pacific Rim.

SEC. 2. UNITED STATES TRADE POLICY WITH ELIGIBLE PACIFIC RIM COUNTRIES.

It shall be the policy of the United States to seek the elimination of tariff and nontariff barriers and to achieve more open, equitable, and reciprocal market access through the negotiation of bilateral free trade agreements

with eligible Pacific Rim countries. These nontariff barriers include--

(1) regulatory and other barriers that deny national treatment and the right of establishment for trade in services;

(2) denial of national treatment to foreign direct investment;

(3) lack of adequate protection for copyrights, patents, trademarks, semiconductor chips, layout designs, trade secrets, and other forms of intellectual property;

(4) arbitrary and discriminatory sanitary, phytosanitary, or technical standards;

(5) government measures such as price controls, reference pricing, and unreasonable restrictions on listings for government-established formularies which deny full market access for United States products; and

(6) unfair or trade-distorting activities of State trading enterprises and other administrative mechanisms.

SEC. 3. PRENEGOTIATION CONSULTATIONS.

(a) PRELIMINARY CONSULTATIONS- Within 60 days after the date of the enactment of this Act, the President shall identify, and initiate preliminary consultations with the government of, each eligible Pacific Rim country.

(b) MINISTERIAL MEETING- If preliminary consultations indicate that the establishment of a free trade area between the United States and an eligible Pacific Rim country is potentially feasible and desirable, the President shall, within 60 days after the preliminary consultations are completed, request a meeting at the ministerial level with the government of that country to consider the conditions under which formal negotiations regarding a free trade agreement could be commenced.

(c) ITC ADVICE- Within 6 months after the end of each ministerial meeting held under subsection (b) with the government of an eligible Pacific Rim country, the United States International Trade Commission shall advise the President regarding the probable economic effects of providing duty-free treatment for such articles that are products of that country on industries in the United States producing like or directly competitive articles and on consumers in the United States.

SEC. 4. MINISTERIAL MEETING RECOMMENDATIONS.

At each ministerial meeting convened pursuant to section 3(b), the President shall recommend the establishment of a council comprised of appropriate public and private sector officials from the respective countries. The functions of the council are--

(1) to review and analyze the aspects of the existing bilateral relationship as they relate to the negotiation of a free trade agreement, including--

(A) trade and investment practices and impediments;

(B) differences in customs laws and procedures;

(C) the harmonization of trade statistics and other economic data; and

(D) the status of bilateral disputes and exchange of information on disputed practices; and

(2) within 6 months after its establishment, to issue a report on the overall bilateral relationship and the prospects for a successful negotiation of a free trade agreement that addresses the possible benefits and adverse effects of concluding a free trade agreement and examines the types of dispute settlement mechanisms that would be appropriate to effectively resolve bilateral trade problems.

SEC. 5. PRESIDENTIAL DETERMINATION REGARDING THE FEASIBILITY AND DESIRABILITY OF NEGOTIATING FREE TRADE AGREEMENTS WITH ELIGIBLE COUNTRIES.

(a) DETERMINATION AND REPORT- Not later than 6 months after receiving any report prepared by a bilateral council established under section 4, the President, after receiving advice from the Advisory Committee for Trade Policy Negotiations established under section 135(b) of the Trade Act of 1974, and taking into account--

(1) the policy set forth in section 2, and

(2) the advice of the International Trade Commission under section 3(c),

shall make a determination on the feasibility and desirability of commencing formal negotiations regarding a free trade agreement with an eligible Pacific Rim country or countries to which the report relates, and shall submit a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives on that determination.

(b) FACTORS IN MAKING DETERMINATION- In making a determination on the feasibility and desirability of establishing a free trade area between the United States and an eligible country, the President shall consider whether that country--

(1) is a member of the World Trade Organization;

(2) has expressed an interest in negotiating a bilateral free trade agreement with the United States;

(3) has pursued substantive trade liberalization and undertaken structural economic reforms in order to achieve an economy governed by market forces, fiscal restraint, and international trade disciplines and, as a result, has achieved a largely open economy;

(4) has demonstrated a broad affinity for United States trade policy objectives and initiatives;

(5) is an active participant in preparations of the General Council of the World Trade Organization for the 3d Ministerial Conference of the World Trade Organization which will be held in the United States from November 30 to December 3, 1999, and has demonstrated a commitment to United States objectives with respect to an accelerated negotiating round of the World Trade Organization;

(6) is working consistently to eliminate export performance requirements or local content requirements;

(7) seeks the harmonization of domestic and international standards in a manner that ensures transparency and nondiscrimination among the member economies of APEC;

(8) is increasing the economic opportunities available to small- and medium-sized businesses through deregulation;

(9) is working consistently to eliminate barriers to trade in services;

(10) provides national treatment for foreign direct investment;

(11) is working consistently to accommodate market access objectives of the United States;

(12) is working constructively to resolve trade disputes with the United States and displays a clear intent to continue to do so;

(13) is a country whose bilateral trade relationship with the United States will benefit from improved dispute settlement mechanisms; and

(14) is a country whose market for products and services of the United States will be significantly enhanced by eliminating substantially all tariff and nontariff barriers and structural impediments to trade.

SEC. 6. CONSULTATIONS WITH CONGRESSIONAL COMMITTEES.

The President shall consult with the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate on a regular basis with respect to the implementation of each of the provisions of this Act.

SEC. 7. ELIGIBLE PACIFIC RIM COUNTRIES.

As used in this Act:

(1) APEC- The term `APEC' means the Asian Pacific Economic Cooperation Forum.

(2) ELIGIBLE PACIFIC RIM COUNTRY- The term `eligible Pacific Rim country' means any country that is a WTO member (as defined in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501) and is a member economy of APEC.

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