[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2610 Reported in Senate (RS)]
Calendar No. 630
108th CONGRESS
2d Session
S. 2610
To implement the United States-Australia Free Trade Agreement.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 6, 2004
Mr. Grassley (for himself, Mr. Baucus, and Mr. Frist) (by request)
introduced the following bill; which was read twice and referred to the
Committee on Finance pursuant to section (b)(3) of Public Law 107-210
July 14, 2004
Reported by Mr. Grassley, without amendment
_______________________________________________________________________
A BILL
To implement the United States-Australia Free Trade Agreement.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``United States-
Australia Free Trade Agreement Implementation Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT
Sec. 101. Approval and entry into force of the Agreement.
Sec. 102. Relationship of the Agreement to United States and State law.
Sec. 103. Implementing actions in anticipation of entry into force and
initial regulations.
Sec. 104. Consultation and layover provisions for, and effective date
of, proclaimed actions.
Sec. 105. Administration of dispute settlement proceedings.
Sec. 106. Effective dates; effect of termination.
TITLE II--CUSTOMS PROVISIONS
Sec. 201. Tariff modifications.
Sec. 202. Additional duties on certain agricultural goods.
Sec. 203. Rules of origin.
Sec. 204. Customs user fees.
Sec. 205. Disclosure of incorrect information.
Sec. 206. Enforcement relating to trade in textile and apparel goods.
Sec. 207. Regulations.
TITLE III--RELIEF FROM IMPORTS
Sec. 301. Definitions.
Subtitle A--Relief From Imports Benefiting From the Agreement
Sec. 311. Commencing of action for relief.
Sec. 312. Commission action on petition.
Sec. 313. Provision of relief.
Sec. 314. Termination of relief authority.
Sec. 315. Compensation authority.
Sec. 316. Confidential business information.
Subtitle B--Textile and Apparel Safeguard Measures
Sec. 321. Commencement of action for relief.
Sec. 322. Determination and provision of relief.
Sec. 323. Period of relief.
Sec. 324. Articles exempt from relief.
Sec. 325. Rate after termination of import relief.
Sec. 326. Termination of relief authority.
Sec. 327. Compensation authority.
Sec. 328. Business confidential information.
Subtitle C--Cases Under Title II of the Trade Act of 1974
Sec. 331. Findings and action on goods from Australia.
TITLE IV--PROCUREMENT
Sec. 401. Eligible products.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to approve and implement the Free Trade Agreement
between the United States and Australia, entered into under the
authority of section 2103(b) of the Bipartisan Trade Promotion
Authority Act of 2002 (19 U.S.C. 3803(b));
(2) to strengthen and develop economic relations between
the United States and Australia for their mutual benefit;
(3) to establish free trade between the 2 nations through
the reduction and elimination of barriers to trade in goods and
services and to investment; and
(4) to lay the foundation for further cooperation to expand
and enhance the benefits of such Agreement.
SEC. 3. DEFINITIONS.
In this Act:
(1) Agreement.--The term ``Agreement'' means the United
States-Australia Free Trade Agreement approved by Congress
under section 101(a)(1).
(2) HTS.--The term ``HTS'' means the Harmonized Tariff
Schedule of the United States.
(3) Textile or apparel good.--The term ``textile or apparel
good'' means a good listed in the Annex to the Agreement on
Textiles and Clothing referred to in section 101(d)(4) of the
Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).
TITLE I--APPROVAL OF, AND GENERAL PROVISIONS RELATING TO, THE AGREEMENT
SEC. 101. APPROVAL AND ENTRY INTO FORCE OF THE AGREEMENT.
(a) Approval of Agreement and Statement of Administrative Action.--
Pursuant to section 2105 of the Bipartisan Trade Promotion Authority
Act of 2002 (19 U.S.C. 3805) and section 151 of the Trade Act of 1974
(19 U.S.C. 2191), Congress approves--
(1) the United States-Australia Free Trade Agreement
entered into on May 18, 2004, with the Government of Australia
and submitted to Congress on _____, 2004; and
(2) the statement of administrative action proposed to
implement the Agreement that was submitted to Congress on
______, 2004.
(b) Conditions for Entry Into Force of the Agreement.--At such time
as the President determines that Australia has taken measures necessary
to bring it into compliance with those provisions of the Agreement that
are to take effect on the date on which the Agreement enters into
force, the President is authorized to exchange notes with the
Government of Australia providing for the entry into force, on or after
January 1, 2005, of the Agreement with respect to the United States.
SEC. 102. RELATIONSHIP OF THE AGREEMENT TO UNITED STATES AND STATE LAW.
(a) Relationship of Agreement to United States Law.--
(1) United states law to prevail in conflict.--No provision
of the Agreement, nor the application of any such provision to
any person or circumstance, which is inconsistent with any law
of the United States shall have effect.
(2) Construction.--Nothing in this Act shall be construed--
(A) to amend or modify any law of the United
States, or
(B) to limit any authority conferred under any law
of the United States,
unless specifically provided for in this Act.
(b) Relationship of Agreement to State Law.--
(1) Legal challenge.--No State law, or the application
thereof, may be declared invalid as to any person or
circumstance on the ground that the provision or application is
inconsistent with the Agreement, except in an action brought by
the United States for the purpose of declaring such law or application
invalid.
(2) Definition of state law.--For purposes of this
subsection, the term ``State law'' includes--
(A) any law of a political subdivision of a State;
and
(B) any State law regulating or taxing the business
of insurance.
(c) Effect of Agreement With Respect to Private Remedies.--No
person other than the United States--
(1) shall have any cause of action or defense under the
Agreement or by virtue of congressional approval thereof; or
(2) may challenge, in any action brought under any
provision of law, any action or inaction by any department,
agency, or other instrumentality of the United States, any
State, or any political subdivision of a State, on the ground
that such action or inaction is inconsistent with the
Agreement.
SEC. 103. IMPLEMENTING ACTIONS IN ANTICIPATION OF ENTRY INTO FORCE AND
INITIAL REGULATIONS.
(a) Implementing Actions.--
(1) Proclamation authority.--After the date of the
enactment of this Act--
(A) the President may proclaim such actions, and
(B) other appropriate officers of the United States
Government may issue such regulations,
as may be necessary to ensure that any provision of this Act,
or amendment made by this Act, that takes effect on the date
the Agreement enters into force is appropriately implemented on
such date, but no such proclamation or regulation may have an
effective date earlier than the date on which the Agreement
enters into force.
(2) Effective date of certain proclaimed actions.--Any
action proclaimed by the President under the authority of this
Act that is not subject to the consultation and layover
provisions under section 104, may not take effect before the
15th day after the date on which the text of the proclamation
is published in the Federal Register.
(3) Waiver of 15-day restriction.--The 15-day restriction
in paragraph (2) on the taking effect of proclaimed actions is
waived to the extent that the application of such restriction
would prevent the taking effect on the date the Agreement
enters into force of any action proclaimed under this section.
(b) Initial Regulations.--Initial regulations necessary or
appropriate to carry out the actions required by or authorized under
this Act or proposed in the statement of administrative action
submitted under section 101(a)(2) to implement the Agreement shall, to
the maximum extent feasible, be issued within 1 year after the date on
which the Agreement enters into force. In the case of any implementing
action that takes effect on a date after the date on which the
Agreement enters into force, initial regulations to carry out that
action shall, to the maximum extent feasible, be issued within 1 year
after such effective date.
SEC. 104. CONSULTATION AND LAYOVER PROVISIONS FOR, AND EFFECTIVE DATE
OF, PROCLAIMED ACTIONS.
If a provision of this Act provides that the implementation of an
action by the President by proclamation is subject to the consultation
and layover requirements of this section, such action may be proclaimed
only if--
(1) the President has obtained advice regarding the
proposed action from--
(A) the appropriate advisory committees established
under section 135 of the Trade Act of 1974 (19 U.S.C.
2155); and
(B) the United States International Trade
Commission;
(2) the President has submitted a report to the Committee
on Finance of the Senate and the Committee on Ways and Means of
the House of Representatives that sets forth--
(A) the action proposed to be proclaimed and the
reasons therefor; and
(B) the advice obtained under paragraph (1);
(3) a period of 60 calendar days, beginning on the first
day on which the requirements set forth in paragraphs (1) and
(2) have been met has expired; and
(4) the President has consulted with such Committees
regarding the proposed action during the period referred to in
paragraph (3).
SEC. 105. ADMINISTRATION OF DISPUTE SETTLEMENT PROCEEDINGS.
(a) Establishment or Designation of Office.--The President is
authorized to establish or designate within the Department of Commerce
an office that shall be responsible for providing administrative
assistance to panels established under chapter 21 of the Agreement. The
office may not be considered to be an agency for purposes of section
552 of title 5, United States Code.
(b) Authorization of Appropriations.--There are authorized to be
appropriated for each fiscal year after fiscal year 2004 to the
Department of Commerce such sums as may be necessary for the
establishment and operations of the office under subsection (a) and for
the payment of the United States share of the expenses of panels
established under chapter 21 of the Agreement.
SEC. 106. EFFECTIVE DATES; EFFECT OF TERMINATION.
(a) Effective Dates.--Except as provided in subsection (b), the
provisions of this Act and the amendments made by this Act take effect
on the date on which the Agreement enters into force.
(b) Exceptions.--Sections 1 through 3 and this title take effect on
the date of the enactment of this Act.
(c) Termination of the Agreement.--On the date on which the
Agreement terminates, the provisions of this Act (other than this
subsection) and the amendments made by this Act shall cease to be
effective.
TITLE II--CUSTOMS PROVISIONS
SEC. 201. TARIFF MODIFICATIONS.
(a) Tariff Modifications Provided for in the Agreement.--The
President may proclaim--
(1) such modifications or continuation of any duty,
(2) such continuation of duty-free or excise treatment, or
(3) such additional duties,
as the President determines to be necessary or appropriate to carry out
or apply articles 2.3, 2.5, and 2.6, and Annex 2-B of the Agreement.
(b) Other Tariff Modifications.--Subject to the consultation and
layover provisions of section 104, the President may proclaim--
(1) such modifications or continuation of any duty,
(2) such modifications as the United States may agree to
with Australia regarding the staging of any duty treatment set
forth in Annex 2-B of the Agreement,
(3) such continuation of duty-free or excise treatment, or
(4) such additional duties,
as the President determines to be necessary or appropriate to maintain
the general level of reciprocal and mutually advantageous concessions
with respect to Australia provided for by the Agreement.
(c) Conversion to Ad Valorem Rates.--For purposes of subsections
(a) and (b), with respect to any good for which the base rate in the
Schedule of the United States to Annex 2-B of the Agreement is a
specific or compound rate of duty, the President may substitute for the
base rate an ad valorem rate that the President determines to be
equivalent to the base rate.
SEC. 202. ADDITIONAL DUTIES ON CERTAIN AGRICULTURAL GOODS.
(a) General Provisions.--
(1) Applicability of subsection.--This subsection applies
to additional duties assessed under subsections (b), (c), and
(d).
(2) Applicable ntr (mfn) rate of duty.--For purposes of
subsections (b), (c), and (d), the term ``applicable NTR (MFN)
rate of duty'' means, with respect to a safeguard good, a rate
of duty that is the lesser of--
(A) the column 1 general rate of duty that would
have been imposed under the HTS on the same safeguard
good entered, without a claim for preferential
treatment, at the time the additional duty is imposed
under subsection (b), (c), or (d), as the case may be;
or
(B) the column 1 general rate of duty that would
have been imposed under the HTS on the same safeguard
good entered, without a claim for preferential
treatment, on December 31, 2004.
(3) Schedule rate of duty.--For purposes of subsections (b)
and (c), the term ``schedule rate of duty'' means, with respect
to a safeguard good, the rate of duty for that good set out in
the Schedule of the United States to Annex 2-B of the
Agreement.
(4) Safeguard good.--In this subsection, the term
``safeguard good'' means--
(A) a horticulture safeguard good described
subsection (b)(1)(B); or
(B) a beef safeguard good described in subsection
(c)(1) or subsection (d)(1)(A).
(5) Exceptions.--No additional duty shall be assessed on a
good under subsection (b), (c), or (d) if, at the time of
entry, the good is subject to import relief under--
(A) subtitle A of title III of this Act; or
(B) chapter 1 of title II of the Trade Act of 1974
(19 U.S.C. 2251 et seq.).
(6) Termination.--The assessment of an additional duty on a
good under subsection (b) or (c), whichever is applicable,
shall cease to apply to that good on the date on which duty-
free treatment must be provided to that good under the Schedule
of the United States to Annex 2-B of the Agreement.
(7) Notice.--Not later than 60 days after the date on which
the Secretary of the Treasury assesses an additional duty on a
good under subsection (b), (c), or (d), the Secretary shall
notify the Government of Australia in writing of such action
and shall provide to that Government data supporting the
assessment of the additional duty.
(b) Additional Duties on Horticulture Safeguard Goods.--
(1) Definitions.--In this subsection:
(A) F.O.B.--The term ``F.O.B.'' means free on
board, regardless of the mode of transportation, at the
point of direct shipment by the seller to the buyer.
(B) Horticulture safeguard good.--The term
``horticulture safeguard good'' means a good--
(i) that qualifies as an originating good
under section 203;
(ii) that is included in the United States
Horticulture Safeguard List set forth in Annex
3-A of the Agreement; and
(iii) for which a claim for preferential
treatment under the Agreement has been made.
(C) Unit import price.--The ``unit import price''
of a good means the price of the good determined on the
basis of the F.O.B. import price of the good, expressed
in either dollars per kilogram or dollars per liter,
whichever unit of measure is indicated for the good in
the United States Horticulture Safeguard List set forth
in Annex 3-A of the Agreement.
(D) Trigger price.--The ``trigger price'' for a
good is the trigger price indicated for that good in
the United States Horticulture Safeguard List set forth
in Annex 3-A of the Agreement or any amendment thereto.
(2) Additional duties.--In addition to any duty proclaimed
under subsection (a) or (b) of section 201, and subject to
subsection (a) of this section, the Secretary of the Treasury
shall assess a duty on a horticulture safeguard good, in the
amount determined under paragraph (3), if the Secretary determines that
the unit import price of the good when it enters the United States is
less than the trigger price for that good.
(3) Calculation of additional duty.--The additional duty
assessed under this subsection on a horticulture safeguard good
shall be an amount determined in accordance with the following
table:
If the excess of the trigger price The additional duty is an amount equal to:
over the unit import price is:
Not more than 10 percent of the 0.
trigger price........................
More than 10 percent but not more than 30 percent of the excess of the applicable NTR (MFN) rate of duty
40 percent of the trigger price...... over the schedule rate of duty.
More than 40 percent but not more than 50 percent of such excess.
60 percent of the trigger price......
More than 60 percent but not more than 70 percent of such excess.
75 percent of the trigger price......
More than 75 percent of the trigger 100 percent of such excess.
price................................
(c) Additional Duties on Beef Safeguard Goods Based on Quantity of
Imports.--
(1) Definition.--In this subsection, the term ``beef
safeguard good'' means a good--
(A) that qualifies as an originating good under
section 203;
(B) that is listed in paragraph 3 of Annex I of the
General Notes to the Schedule of the United States to
Annex 2-B of the Agreement; and
(C) for which a claim for preferential treatment
under the Agreement has been made.
(2) Additional duties.--In addition to any duty proclaimed
under subsection (a) or (b) of section 201, and subject to
subsection (a) of this section and paragraphs (4) and (5) of
this subsection, the Secretary of the Treasury shall assess a
duty, in the amount determined under paragraph (3), on a beef
safeguard good imported into the United States in a calendar
year if the Secretary determines that, prior to such
importation, the total volume of beef safeguard goods imported
into the United States in that calendar year is equal to or
greater than 110 percent of the volume set out for beef
safeguard goods in the corresponding year in the table
contained in paragraph 3(a) of Annex I of the General Notes to
the Schedule of the United States to Annex 2-B of the
Agreement. For purposes of this subsection, the years 1 through
19 set out in the table contained in paragraph 3(a) of such
Annex I correspond to the calendar years 2005 through 2023.
(3) Calculation of additional duty.--The additional duty on
a beef safeguard good under this subsection shall be an amount
equal to 75 percent of the excess of the applicable NTR (MFN)
rate of duty over the schedule rate of duty.
(4) Waiver.--
(A) In general.--The United States Trade
Representative is authorized to waive the application
of this subsection, if the Trade Representative
determines that extraordinary market conditions
demonstrate that the waiver would be in the national
interest of the United States, after the requirements
of subparagraph (B) are met.
(B) Notice and consultations.--Promptly after
receiving a request for a waiver of this subsection,
the Trade Representative shall notify the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate, and may make the
determination provided for in subparagraph (A) only
after consulting with--
(i) appropriate private sector advisory
committees established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155); and
(ii) the Committee on Ways and Means of the
House of Representatives and the Committee on
Finance of the Senate regarding--
(I) the reasons supporting the
determination to grant the waiver; and
(II) the proposed scope and
duration of the waiver.
(C) Notification of the secretary of the
treasury and publication.--Upon granting a
waiver under this paragraph, the Trade
Representative shall promptly notify the
Secretary of the Treasury of the period in
which the waiver will be in effect, and shall
publish notice of the waiver in the Federal
Register.
(5) Effective dates.--This subsection takes effect on
January 1, 2013, and shall not be effective after December 31,
2022.
(d) Additional Duties on Beef Safeguard Goods Based on Price.--
(1) Definitions.--In this subsection:
(A) Beef safeguard good.--The term ``beef safeguard
good'' means a good--
(i) that qualifies as an originating good
under section 203;
(ii) that is classified under subheading
0201.10.50, 0201.20.80, 0201.30.80, 0202.10.50,
0202.20.80, or 0202.30.80 of the HTS; and
(iii) for which a claim for preferential
treatment under the Agreement has been made.
(B) Calendar quarter.--
(i) In general.--The term ``calendar
quarter'' means any 3-month period beginning on
January 1, April 1, July 1, or October 1 of a
calendar year.
(ii) First calendar quarter.--The term
``first calendar quarter'' means the calendar
quarter beginning on January 1.
(iii) Second calendar quarter.--The term
``second calendar quarter'' means the calendar
quarter beginning on April 1.
(iv) Third calendar quarter.--The term
``third calendar quarter'' means the calendar
quarter beginning on July 1.
(v) Fourth calendar quarter.--The term
``fourth calendar quarter'' means the calendar
quarter beginning on October 1.
(C) Monthly average index price.--The term
``monthly average index price'' means the simple
average, as determined by the Secretary of Agriculture,
for a calendar month of the daily average index prices
for Wholesale Boxed Beef Cut-Out Value Select 1-3
Central U.S. 600-750 lbs., or its equivalent, as such
simple average is reported by the Agricultural
Marketing Service of the Department of Agriculture in
Report LM-XB459 or any equivalent report.
(D) 24-month trigger price.--The term ``24-month
trigger price'' means, with respect to any calendar
month, the average of the monthly average index prices
for the 24 preceding calendar months, multiplied by
0.935.
(2) Additional duties.--In addition to any duty proclaimed
under subsection (a) or (b) of section 201, and subject to
subsection (a) of this section and paragraphs (4) through (6)
of this subsection, the Secretary of the Treasury shall assess
a duty, in the amount determined under paragraph (3), on a beef
safeguard good imported into the United States if--
(A)(i) the good is imported in the first calendar
quarter, second calendar quarter, or third calendar
quarter of a calendar year; and
(ii) the monthly average index price, in any 2
calendar months of the preceding calendar quarter, is
less than the 24-month trigger price; or
(B)(i) the good is imported in the fourth calendar
quarter of a calendar year; and
(ii)(I) the monthly average index price, in any 2
calendar months of the preceding calendar quarter, is
less than the 24-month trigger price; or
(II) the monthly average index price, in any of the
4 calendar months preceding January 1 of the succeeding
calendar year, is less than the 24-month trigger price.
(3) Calculation of additional duty.--The additional duty on
a beef safeguard good under this subsection shall be an amount
equal to 65 percent of the applicable NTR (MFN) rate of duty
for that good.
(4) Limitation.--An additional duty shall be assessed under
this subsection on a beef safeguard good imported into the
United States in a calendar year only if, prior to the
importation of that good, the total quantity of beef safeguard
goods imported into the United States in that calendar year is
equal to or greater than the sum of--
(A) the quantity of goods of Australia eligible to
enter the United States in that year specified in
Additional United States Note 3 to Chapter 2 of the
HTS; and
(B)(i) in 2023, 70,420 metric tons; or
(ii) in 2024, and in each year thereafter, a
quantity that is 0.6 percent greater than the quantity
provided for in the preceding year under this
subparagraph.
(5) Waiver.--
(A) In general.--The United States Trade
Representative is authorized to waive the application
of this subsection, if the Trade Representative
determines that extraordinary market conditions
demonstrate that the waiver would be in the national
interest of the United States, after the requirements
of subparagraph (B) are met.
(B) Notice and consultations.--Promptly after
receiving a request for a waiver of this subsection,
the Trade Representative shall notify the Committee on
Ways and Means of the House of Representatives and the
Committee on Finance of the Senate, and may make the
determination provided for in subparagraph (A) only
after consulting with--
(i) appropriate private sector advisory
committees established under section 135 of the
Trade Act of 1974 (19 U.S.C. 2155); and
(ii) the Committee on Ways and Means of the
House of Representatives and the Committee on
Finance of the Senate regarding--
(I) the reasons supporting the
determination to grant the waiver; and
(II) the proposed scope and
duration of the waiver.
(C) Notification of the secretary of the
treasury and publication.--Upon granting a
waiver under this paragraph, the Trade
Representative shall promptly notify the
Secretary of the Treasury of the period in
which the waiver will be in effect, and shall
publish notice of the waiver in the Federal
Register.
(6) Effective date.--This subsection takes effect on
January 1, 2023.
SEC. 203. RULES OF ORIGIN.
(a) Application and Interpretation.--In this section:
(1) Tariff classification.--The basis for any tariff
classification is the HTS.
(2) Reference to hts.--Whenever in this section there is a
reference to a heading or subheading, such reference shall be a
reference to a heading or subheading of the HTS.
(3) Cost or value.--Any cost or value referred to in this
section shall be recorded and maintained in accordance with the
generally accepted accounting principles applicable in the
territory of the country in which the good is produced (whether
Australia or the United States).
(b) Originating Goods.--For purposes of this Act and for purposes
of implementing the preferential treatment provided for under the
Agreement, a good is an originating good if--
(1) the good is a good wholly obtained or produced entirely
in the territory of Australia, the United States, or both;
(2) the good--
(A) is produced entirely in the territory of
Australia, the United States, or both, and--
(i) each of the nonoriginating materials
used in the production of the good undergoes an
applicable change in tariff classification
specified in Annex 4-A or Annex 5-A of the
Agreement;
(ii) the good otherwise satisfies any
applicable regional value-content requirement
referred to in Annex 5-A of the Agreement; or
(iii) the good meets any other requirements
specified in Annex 4-A or Annex 5-A of the
Agreement; and
(B) the good satisfies all other applicable
requirements of this section;
(3) the good is produced entirely in the territory of
Australia, the United States, or both, exclusively from
materials described in paragraph (1) or (2); or
(4) the good otherwise qualifies as an originating good
under this section.
(c) De Minimis Amounts of Nonoriginating Materials.--
(1) In general.--Except as provided in paragraphs (2) and
(3), a good that does not undergo a change in tariff
classification pursuant to Annex 5-A of the Agreement is an
originating good if--
(A) the value of all nonoriginating materials
that--
(i) are used in the production of the good,
and
(ii) do not undergo the required change in
tariff classification,
does not exceed 10 percent of the adjusted value of the
good;
(B) the good meets all other applicable
requirements of this section; and
(C) the value of such nonoriginating materials is
included in the value of nonoriginating materials for
any applicable regional value-content requirement for
the good.
(2) Exceptions.--Paragraph (1) does not apply to the
following:
(A) A nonoriginating material provided for in
chapter 4 of the HTS or in subheading 1901.90 that is
used in the production of a good provided for in
chapter 4 of the HTS.
(B) A nonoriginating material provided for in
chapter 4 of the HTS or in subheading 1901.90 that is
used in the production of a good provided for in
subheading 1901.10, 1901.20, or 1901.90, heading 2105,
or subheading 2106.90, 2202.90, or 2309.90.
(C) A nonoriginating material provided for in
heading 0805 or any of subheadings 2009.11 through
2009.39 that is used in the production of a good
provided for in any of subheadings 2009.11 through
2009.39, or in subheading 2106.90 or 2202.90.
(D) A nonoriginating material provided for in
chapter 15 of the HTS that is used in the production of
a good provided for in any of headings 1501.00.00
through 1508, or in heading 1512, 1514, or 1515.
(E) A nonoriginating material provided for in
heading 1701 that is used in the production of a good
provided for in any of headings 1701 through 1703.
(F) A nonoriginating material provided for in
chapter 17 of the HTS or heading 1805.00.00 that is
used in the production of a good provided for in
subheading 1806.10.
(G) A nonoriginating material provided for in any
of headings 2203 through 2208 that is used in the
production of a good provided for in heading 2207 or
2208.
(H) A nonoriginating material used in the
production of a good provided for in any of chapters 1
through 21 of the HTS unless the nonoriginating
material is provided for in a different subheading than
the good for which origin is being determined under
this section.
(3) Textile and apparel goods.--
(A) In general.--Except as provided in subparagraph
(B), a textile or apparel good that is not an
originating good because certain fibers or yarns used
in the production of the component of the good that
determines the tariff classification of the good do not
undergo an applicable change in tariff classification
set out in Annex 4-A of the Agreement shall be
considered to be an originating good if the total
weight of all such fibers or yarns in that component is
not more than 7 percent of the total weight of that
component.
(B) Certain textile or apparel goods.--A textile or
apparel good containing elastomeric yarns in the
component of the good that determines the tariff
classification of the good shall be considered to be an
originating good only if such yarns are wholly formed
in the territory of Australia or the United States.
(C) Yarn, fabric, or fiber.--For purposes of this
paragraph, in the case of a textile or apparel good
that is a yarn, fabric, or group of fibers, the term
``component of the good that determines the tariff
classification of the good'' means all of the fibers in
the yarn, fabric, or group of fibers.
(d) Accumulation.--
(1) Originating materials used in production of goods of
other country.--Originating materials from the territory of
Australia or the United States that are used in the production
of a good in the territory of the other country shall be
considered to originate in the territory of the other country.
(2) Multiple procedures.--A good that is produced in the
territory of Australia, the United States, or both, by 1 or
more producers, is an originating good if the good satisfies
the requirements of subsection (b) and all other applicable
requirements of this section.
(e) Regional Value-Content.--
(1) In general.--For purposes of subsection (b)(2), the
regional value-content of a good referred to in Annex 5-A of
the Agreement, except for goods to which paragraph (4) applies,
shall be calculated by the importer, exporter, or producer of
the good, on the basis of the build-down method described in
paragraph (2) or the build-up method described in paragraph
(3).
(2) Build-down method.--
(A) In general.--The regional value-content of a
good may be calculated on the basis of the following
build-down method:
av-vnm
rvc = -------- <greek-e> 100
av
(B) Definitions.--In subparagraph (A):
(i) RVC.--The term ``RVC'' means the
regional value-content of the good, expressed
as a percentage.
(ii) AV.--The term ``AV'' means the
adjusted value of the good.
(iii) VNM.--The term ``VNM'' means the
value of nonoriginating materials that are
acquired and used by the producer in the
production of the good, but does not include
the value of a material that is self-produced.
(3) Build-up method.--
(A) In general.--The regional value-content of a
good may be calculated on the basis of the following
build-up method:
vom
rvc = -------- <greek-e> 100
av
(B) Definitions.--In subparagraph (A):
(i) RVC.--The term ``RVC'' means the
regional value-content of the good, expressed
as a percentage.
(ii) AV.--The term ``AV'' means the
adjusted value of the good.
(iii) VOM.--The term ``VOM'' means the
value of originating materials that are
acquired or self-produced, and used by the
producer in the production of the good.
(4) Special rule for certain automotive goods.--
(A) In general.--For purposes of subsection (b)(2),
the regional value-content of an automotive good
referred to in Annex 5-A of the Agreement shall be
calculated by the importer, exporter, or producer of
the good, on the basis of the following net cost
method:
nc-vnm
rvc = -------- <greek-e> 100
nc
(B) Definitions.--In subparagraph (A):
(i) Automotive good.--The term ``automotive
good'' means a good provided for in any of
subheadings 8407.31 through 8407.34, subheading
8408.20, heading 8409, or in any of headings
8701 through 8708.
(ii) RVC.--The term ``RVC'' means the
regional value-content of the automotive good,
expressed as a percentage.
(iii) NC.--The term ``NC'' means the net
cost of the automotive good.
(iv) VNM.--The term ``VNM'' means the value
of nonoriginating materials that are acquired
and used by the producer in the production of
the automotive good, but does not include the
value of a material that is self-produced.
(C) Motor vehicles.--
(i) Basis of calculation.--For purposes of
determining the regional value-content under
subparagraph (A) for an automotive good that is
a motor vehicle provided for in any of headings
8701 through 8705, an importer, exporter, or
producer may average the amounts calculated
under the formula contained in subparagraph
(A), over the producer's fiscal year--
(I) with respect to all motor
vehicles in any one of the categories
described in clause (ii); or
(II) with respect to all motor
vehicles in any such category that are
exported to the territory of the United
States or Australia.
(ii) Categories.--A category is described
in this clause if it--
(I) is the same model line of motor
vehicles, is in the same class of
vehicles, and is produced in the same
plant in the territory of Australia or
the United States, as the good
described in clause (i) for which
regional value-content is being
calculated;
(II) is the same class of motor
vehicles, and is produced in the same
plant in the territory of Australia or
the United States, as the good
described in clause (i) for which
regional value-content is being
calculated; or
(III) is the same model line of
motor vehicles produced in either the
territory of Australia or the United
States, as the good described in clause
(i) for which regional value-content is
being calculated.
(D) Other automotive goods.--For purposes of
determining the regional value-content under
subparagraph (A) for automotive goods provided for in
any of subheadings 8407.31 through 8407.34, in
subheading 8408.20, or in heading 8409, 8706, 8707, or
8708, that are produced in the same plant, an importer,
exporter, or producer may--
(i) average the amounts calculated under
the formula contained in subparagraph (A)
over--
(I) the fiscal year of the motor
vehicle producer to whom the automotive
goods are sold,
(II) any quarter or month, or
(III) its own fiscal year,
if the goods were produced during the fiscal
year, quarter, or month that is the basis for
the calculation;
(ii) determine the average referred to in
clause (i) separately for such goods sold to
one or more motor vehicle producers; or
(iii) make a separate determination under
clause (i) or (ii) for automotive goods that
are exported to the territory of the United
States or Australia.
(E) Calculating net cost.--Consistent with the
provisions regarding allocation of costs set out in
generally accepted accounting principles, the net cost
of the automotive good under subparagraph (B) shall be
calculated by--
(i) calculating the total cost incurred
with respect to all goods produced by the
producer of the automotive good, subtracting
any sales promotion, marketing and after-sales
service costs, royalties, shipping and packing
costs, and nonallowable interest costs that are
included in the total cost of all such goods,
and then reasonably allocating the resulting
net cost of those goods to the automotive good;
(ii) calculating the total cost incurred
with respect to all goods produced by that
producer, reasonably allocating the total cost
to the automotive good, and then subtracting
any sales promotion, marketing and after-sales
service costs, royalties, shipping and packing
costs, and nonallowable interest costs that are
included in the portion of the total cost
allocated to the automotive good; or
(iii) reasonably allocating each cost that
forms part of the total cost incurred with
respect to the automotive good so that the
aggregate of these costs does not include any
sales promotion, marketing and after-sales
service costs, royalties, shipping and packing
costs, or nonallowable interest costs.
(f) Value of Materials.--
(1) In general.--For the purpose of calculating the
regional value-content of a good under subsection (e), and for
purposes of applying the de minimis rules under subsection (c),
the value of a material is--
(A) in the case of a material that is imported by
the producer of the good, the adjusted value of the
material;
(B) in the case of a material acquired in the
territory in which the good is produced, the value,
determined in accordance with Articles 1 through 8,
article 15, and the corresponding interpretive notes of
the Agreement on Implementation of Article VII of the
General Agreement on Tariffs and Trade 1994 referred to
in section 101(d)(8) of the Uruguay Round Agreements
Act, as set forth in regulations promulgated by the
Secretary of the Treasury providing for the application
of such Articles in the absence of an importation; or
(C) in the case of a material that is self-
produced, the sum of--
(i) all expenses incurred in the production
of the material, including general expenses;
and
(ii) an amount for profit equivalent to the
profit added in the normal course of trade.
(2) Further adjustments to the value of materials.--
(A) Originating material.--The following expenses,
if not included in the value of an originating material
calculated under paragraph (1), may be added to the
value of the originating material:
(i) The costs of freight, insurance,
packing, and all other costs incurred in
transporting the material within or between the
territory of Australia, the United States, or
both, to the location of the producer.
(ii) Duties, taxes, and customs brokerage
fees on the material paid in the territory of
Australia, the United States, or both, other
than duties or taxes that are waived, refunded,
refundable, or otherwise recoverable, including
credit against duty or tax paid or payable.
(iii) The cost of waste and spoilage
resulting from the use of the material in the
production of the good, less the value of
renewable scrap or byproducts.
(B) Nonoriginating material.--The following
expenses, if included in the value of a nonoriginating
material calculated under paragraph (1), may be
deducted from the value of the nonoriginating material:
(i) The costs of freight, insurance,
packing, and all other costs incurred in
transporting the material within or between the
territory of Australia, the United States, or
both, to the location of the producer.
(ii) Duties, taxes, and customs brokerage
fees on the material paid in the territory of
Australia, the United States, or both, other
than duties or taxes that are waived, refunded,
refundable, or otherwise recoverable, including
credit against duty or tax paid or payable.
(iii) The cost of waste and spoilage
resulting from the use of the material in the
production of the good, less the value of
renewable scrap or byproducts.
(iv) The cost of processing incurred in the
territory of Australia, the United States, or
both, in the production of the nonoriginating
material.
(v) The cost of originating materials used
in the production of the nonoriginating
material in the territory of Australia, the
United States, or both.
(g) Accessories, Spare Parts, or Tools.--
(1) In general.--Subject to paragraph (2), accessories,
spare parts, or tools delivered with a good that form part of
the good's standard accessories, spare parts, or tools shall--
(A) be treated as originating goods if the good is
an originating good; and
(B) be disregarded in determining whether all the
nonoriginating materials used in the production of the
good undergo the applicable change in tariff
classification set out in Annex 5-A of the Agreement.
(2) Conditions.--Paragraph (1) shall apply only if--
(A) the accessories, spare parts, or tools are not
invoiced separately from the good;
(B) the quantities and value of the accessories,
spare parts, or tools are customary for the good; and
(C) if the good is subject to a regional value-
content requirement, the value of the accessories,
spare parts, or tools is taken into account as
originating or nonoriginating materials, as the case
may be, in calculating the regional value-content of
the good.
(h) Fungible Goods and Materials.--
(1) In general.--
(A) Claim for preferential treatment.--A person
claiming that a fungible good or fungible material is
an originating good may base the claim either on the
physical segregation of the fungible good or fungible
material or by using an inventory management method
with respect to the fungible good or fungible material.
(B) Inventory management method.--In this
subsection, the term ``inventory management method''
means--
(i) averaging;
(ii) ``last-in, first-out'';
(iii) ``first-in, first-out''; or
(iv) any other method--
(I) recognized in the generally
accepted accounting principles of the
country in which the production is
performed (whether Australia or the
United States); or
(II) otherwise accepted by that
country.
(2) Election of inventory method.--A person selecting an
inventory management method under paragraph (1) for a
particular fungible good or fungible material shall continue to
use that method for that fungible good or fungible material
throughout the fiscal year of that person.
(i) Packaging Materials and Containers for Retail Sale.--Packaging
materials and containers in which a good is packaged for retail sale,
if classified with the good, shall be disregarded in determining
whether all the nonoriginating materials used in the production of the
good undergo the applicable change in tariff classification set out in
Annex 4-A or Annex 5-A of the Agreement, and, if the good is subject to
a regional value-content requirement, the value of such packaging
materials and containers shall be taken into account as originating or
nonoriginating materials, as the case may be, in calculating the
regional value-content of the good.
(j) Packing Materials and Containers for Shipment.--Packing
materials and containers for shipment shall be disregarded in
determining whether--
(1) the nonoriginating materials used in the production of
a good undergo the applicable change in tariff classification
set out in Annex 4-A or Annex 5-A of the Agreement; and
(2) the good satisfies a regional value-content
requirement.
(k) Indirect Materials.--An indirect material shall be treated as
an originating material without regard to where it is produced, and its
value shall be the cost registered in the accounting records of the
producer of the good.
(l) Third Country Operations.--A good that has undergone production
necessary to qualify as an originating good under subsection (b) shall
not be considered to be an originating good if, subsequent to that
production, the good undergoes further production or any other
operation outside the territory of Australia or the United States,
other than unloading, reloading, or any other operation necessary to
preserve the good in good condition or to transport the good to the
territory of Australia or the United States.
(m) Textile and Apparel Goods Classifiable as Goods Put Up in
Sets.--Notwithstanding the rules set forth in Annex 4-A of the
Agreement, textile or apparel goods classifiable as goods put up in
sets for retail sale as provided for in General Rule of Interpretation
3 of the HTS shall not be considered to be originating goods unless
each of the goods in the set is an originating good or the total value
of the nonoriginating goods in the set does not exceed 10 percent of
the value of the set determined for purposes of assessing customs
duties.
(n) Definitions.--In this section:
(1) Adjusted value.--The term ``adjusted value'' means the
value determined under Articles 1 through 8, Article 15, and
the corresponding interpretive notes of the Agreement on
Implementation of Article VII of the General Agreement on
Tariffs and Trade 1994 referred to in section 101(d)(8) of the
Uruguay Round Agreements Act, adjusted to exclude any costs,
charges, or expenses incurred for transportation, insurance,
and related services incident to the international shipment of
the good from the country of exportation to the place of
importation.
(2) Class of motor vehicles.--The term ``class of motor
vehicles'' means any one of the following categories of motor
vehicles:
(A) Motor vehicles provided for in subheading
8701.20, 8704.10, 8704.22, 8704.23, 8704.32, or
8704.90, or heading 8705 or 8706, or motor vehicles for
the transport of 16 or more persons provided for in
subheading 8702.10 or 8702.90.
(B) Motor vehicles provided for in subheading
8701.10 or any of subheadings 8701.30 through 8701.90.
(C) Motor vehicles for the transport of 15 or fewer
persons provided for in subheading 8702.10 or 8702.90,
or motor vehicles provided for in subheading 8704.21 or
8704.31.
(D) Motor vehicles provided for in any of
subheadings 8703.21 through 8703.90.
(3) Fungible good or fungible material.--The term
``fungible good'' or ``fungible material'' means a good or
material, as the case may be, that is interchangeable with
another good or material for commercial purposes and the
properties of which are essentially identical to such other
good or material.
(4) Generally accepted accounting principles.--The term
``generally accepted accounting principles'' means the
recognized consensus or substantial authoritative support in
the territory of Australia or the United States, as the case
may be, with respect to the recording of revenues, expenses,
costs, assets, and liabilities, the disclosure of information,
and the preparation of financial statements. These standards
may encompass broad guidelines of general application as well
as detailed standards, practices, and procedures.
(5) Good wholly obtained or produced entirely in the
territory of australia, the united states, or both.--The term
``good wholly obtained or produced entirely in the territory of
Australia, the United States, or both'' means--
(A) a mineral good extracted in the territory of
Australia, the United States, or both;
(B) a vegetable good, as such goods are provided
for in the HTS, harvested in the territory of
Australia, the United States, or both;
(C) a live animal born and raised in the territory
of Australia, the United States, or both;
(D) a good obtained from hunting, trapping,
fishing, or aquaculture conducted in the territory of
Australia, the United States, or both;
(E) a good (fish, shellfish, and other marine life)
taken from the sea by vessels registered or recorded
with Australia or the United States and flying the flag
of that country;
(F) a good produced exclusively from products
referred to in subparagraph (E) on board factory ships
registered or recorded with Australia or the United
States and flying the flag of that country;
(G) a good taken by Australia or the United States
or a person of Australia or the United States from the
seabed or beneath the seabed outside territorial
waters, if Australia or the United States has rights to
exploit such seabed;
(H) a good taken from outer space, if such good is
obtained by Australia or the United States or a person
of Australia or the United States and not processed in
the territory of a country other than Australia or the
United States;
(I) waste and scrap derived from--
(i) production in the territory of
Australia, the United States, or both; or
(ii) used goods collected in the territory
of Australia, the United States, or both, if
such goods are fit only for the recovery of raw
materials;
(J) a recovered good derived in the territory of
Australia or the United States from goods that have
passed their life expectancy, or are no longer usable
due to defects, and utilized in the territory of that
country in the production of remanufactured goods; or
(K) a good produced in the territory of Australia,
the United States, or both, exclusively--
(i) from goods referred to in any of
subparagraphs (A) through (I), or
(ii) from the derivatives of goods referred
to in clause (i),
at any stage of production.
(6) Indirect material.--The term ``indirect material''
means a good used in the production, testing, or inspection of
a good but not physically incorporated into the good, or a good
used in the maintenance of buildings or the operation of
equipment associated with the production of a good, including--
(A) fuel and energy;
(B) tools, dies, and molds;
(C) spare parts and materials used in the
maintenance of equipment or buildings;
(D) lubricants, greases, compounding materials, and
other materials used in production or used to operate
equipment or buildings;
(E) gloves, glasses, footwear, clothing, safety
equipment, and supplies;
(F) equipment, devices, and supplies used for
testing or inspecting the good;
(G) catalysts and solvents; and
(H) any other goods that are not incorporated into
the good but the use of which in the production of the
good can reasonably be demonstrated to be a part of
that production.
(7) Material.--The term ``material'' means a good that is
used in the production of another good.
(8) Material that is self-produced.--The term ``material
that is self-produced'' means an originating material that is
produced by a producer of a good and used in the production of
that good.
(9) Model line.--The term ``model line'' means a group of
motor vehicles having the same platform or model name.
(10) Nonallowable interest costs.--The term ``nonallowable
interest costs'' means interest costs incurred by a producer
that exceed 700 basis points above the applicable official
interest rate for comparable maturities of the country (whether
Australia or the United States).
(11) Nonoriginating material.--The term ``nonoriginating
material'' means a material that does not qualify as
originating under this section.
(12) Preferential treatment.--The term ``preferential
treatment'' means the customs duty rate, and the treatment
under article 2.12 of the Agreement, that are applicable to an
originating good pursuant to the Agreement.
(13) Producer.--The term ``producer'' means a person who
engages in the production of a good in the territory of
Australia or the United States.
(14) Production.--The term ``production'' means growing,
raising, mining, harvesting, fishing, trapping, hunting,
manufacturing, processing, assembling, or disassembling a good.
(15) Reasonably allocate.--The term ``reasonably allocate''
means to apportion in a manner that would be appropriate under
generally accepted accounting principles.
(16) Recovered goods.--The term ``recovered goods'' means
materials in the form of individual parts that result from--
(A) the complete disassembly of goods which have
passed their life expectancy, or are no longer usable
due to defects, into individual parts; and
(B) the cleaning, inspecting, or testing, or other
processing that is necessary for improvement to sound
working condition of such individual parts.
(17) Remanufactured good.--The term ``remanufactured good''
means an industrial good that is assembled in the territory of
Australia or the United States, that is classified under
chapter 84, 85, or 87 of the HTS or heading 9026, 9031, or
9032, other than a good classified under heading 8418 or 8516
or any of headings 8701 through 8706, and that--
(A) is entirely or partially comprised of recovered
goods;
(B) has a similar life expectancy to, and meets the
same performance standards as, a like good that is new;
and
(C) enjoys a factory warranty similar to a like
good that is new.
(18) Total cost.--The term ``total cost'' means all product
costs, period costs, and other costs for a good incurred in the
territory of Australia, the United States, or both.
(19) Used.--The term ``used'' means used or consumed in the
production of goods.
(o) Presidential Proclamation Authority.--
(1) In general.--The President is authorized to proclaim,
as part of the HTS--
(A) the provisions set out in Annex 4-A and Annex
5-A of the Agreement; and
(B) any additional subordinate category necessary
to carry out this title consistent with the Agreement.
(2) Modifications.--
(A) In general.--Subject to the consultation and
layover provisions of section 104, the President may
proclaim modifications to the provisions proclaimed
under the authority of paragraph (1)(A), other than
provisions of chapters 50 through 63 of the HTS, as
included in Annex 4-A of the Agreement.
(B) Additional proclamations.--Notwithstanding
subparagraph (A), and subject to the consultation and
layover provisions of section 104, the President may
proclaim--
(i) modifications to the provisions
proclaimed under the authority of paragraph
(1)(A) as are necessary to implement an
agreement with Australia pursuant to article
4.2.5 of the Agreement; and
(ii) before the end of the 1-year period
beginning on the date of the enactment of this
Act, modifications to correct any
typographical, clerical, or other
nonsubstantive technical error regarding the
provisions of chapters 50 through 63 of the
HTS, as included in Annex 4-A of the Agreement.
SEC. 204. CUSTOMS USER FEES.
Section 13031(b) of the Consolidated Omnibus Budget Reconciliation
Act of 1985 (19 U.S.C. 58c(b)) is amended by adding after paragraph
(13) the following:
``(14) No fee may be charged under subsection (a) (9) or (10) with
respect to goods that qualify as originating goods under section 203 of
the United States-Australia Free Trade Agreement Implementation Act.
Any service for which an exemption from such fee is provided by reason
of this paragraph may not be funded with money contained in the Customs
User Fee Account.''.
SEC. 205. DISCLOSURE OF INCORRECT INFORMATION.
Section 592(c) of the Tariff Act of 1930 (19 U.S.C. 1592(c)) is
amended--
(1) by redesignating paragraph (8) as paragraph (9); and
(2) by inserting after paragraph (7) the following new
paragraph:
``(8) Prior disclosure regarding claims under the united
states-australia free trade agreement.--
``(A) In general.--An importer shall not be subject
to penalties under subsection (a) for making an
incorrect claim that a good qualifies as an originating
good under section 203 of the United States-Australia
Free Trade Agreement Implementation Act if the
importer, in accordance with regulations issued by the
Secretary of the Treasury, voluntarily and promptly
makes a corrected declaration and pays any duties
owing.
``(B) Time periods for making corrections.--In the
regulations referred to in subparagraph (A), the
Secretary of the Treasury is authorized to prescribe
time periods for making a corrected declaration and
paying duties owing under subparagraph (A), if such
periods are not shorter than 1 year following the date
on which the importer makes the incorrect claim.''.
SEC. 206. ENFORCEMENT RELATING TO TRADE IN TEXTILE AND APPAREL GOODS.
(a) Action During Verification.--
(1) In general.--If the Secretary of the Treasury requests
the Government of Australia to conduct a verification pursuant
to article 4.3 of the Agreement for purposes of making a
determination under paragraph (2), the President may direct the
Secretary to take appropriate action described in subsection
(b) while the verification is being conducted.
(2) Determination.--A determination under this paragraph is
a determination--
(A) that an exporter or producer in Australia is
complying with applicable customs laws, regulations,
procedures, requirements, or practices affecting trade
in textile or apparel goods; or
(B) that a claim that a textile or apparel good
exported or produced by such exporter or producer--
(i) qualifies as an originating good under
section 203 of this Act; or
(ii) is a good of Australia,
is accurate.
(b) Appropriate Action Described.--Appropriate action under
subsection (a)(1) includes--
(1) suspension of liquidation of the entry of any textile
or apparel good exported or produced by the person that is the
subject of a verification under subsection (a)(1) regarding
compliance described in subsection (a)(2)(A), in a case in
which the request for verification was based on a reasonable
suspicion of unlawful activity related to such goods; and
(2) suspension of liquidation of the entry of a textile or
apparel good for which a claim has been made that is the
subject of a verification under subsection (a)(1) regarding a
claim described in subsection (a)(2)(B).
(c) Action When Information is Insufficient.--If the Secretary of
the Treasury determines that the information obtained within 12 months
after making a request for a verification under subsection (a)(1) is
insufficient to make a determination under subsection (a)(2), the
President may direct the Secretary to take appropriate action described
in subsection (d) until such time as the Secretary receives information
sufficient to make a determination under subsection (a)(2) or until
such earlier date as the President may direct.
(d) Appropriate Action Described.--Appropriate action referred to
in subsection (c) includes--
(1) publication of the name and address of the person that
is the subject of the verification;
(2) denial of preferential tariff treatment under the
Agreement to--
(A) any textile or apparel good exported or
produced by the person that is the subject of a
verification under subsection (a)(1) regarding
compliance described in subsection (a)(2)(A); or
(B) a textile or apparel good for which a claim has
been made that is the subject of a verification under
subsection (a)(1) regarding a claim described in
subsection (a)(2)(B); and
(3) denial of entry into the United States of--
(A) any textile or apparel good exported or
produced by the person that is the subject of a
verification under subsection (a)(1) regarding
compliance described in subsection (a)(2)(A); or
(B) a textile or apparel good for which a claim has
been made that is the subject of a verification under
subsection (a)(1) regarding a claim described in
subsection (a)(2)(B).
SEC. 207. REGULATIONS.
The Secretary of the Treasury shall prescribe such regulations as
may be necessary to carry out--
(1) subsections (a) through (n) of section 203 and section
204;
(2) amendments to existing law made by the sections
referred to in paragraph (1); and
(3) proclamations issued under section 203(o).
TITLE III--RELIEF FROM IMPORTS
SEC. 301. DEFINITIONS.
As used in this title:
(1) Australian article.--The term ``Australian article''
means an article that qualifies as an originating good under
section 203(b) of this Act.
(2) Australian textile or apparel article.--The term
``Australian textile or apparel article'' means an article--
(A) that is listed in the Annex to the Agreement on
Textiles and Clothing referred to in section 101(d)(4)
of the Uruguay Round Agreements Act (19 U.S.C.
3511(d)(4)); and
(B) that is an Australian article.
(3) Commission.--The term ``Commission'' means the United
States International Trade Commission.
Subtitle A--Relief From Imports Benefiting From the Agreement
SEC. 311. COMMENCING OF ACTION FOR RELIEF.
(a) Filing of Petition.--
(1) In general.--A petition requesting action under this
subtitle for the purpose of adjusting to the obligations of the
United States under the Agreement may be filed with the
Commission by an entity, including a trade association, firm,
certified or recognized union, or group of workers, that is
representative of an industry. The Commission shall transmit a
copy of any petition filed under this subsection to the United
States Trade Representative.
(2) Provisional relief.--An entity filing a petition under
this subsection may request that provisional relief be provided
as if the petition had been filed under section 202(a) of the
Trade Act of 1974 (19 U.S.C. 2252(a)).
(3) Critical circumstances.--Any allegation that critical
circumstances exist shall be included in the petition.
(b) Investigation and Determination.--Upon the filing of a petition
under subsection (a), the Commission, unless subsection (d) applies,
shall promptly initiate an investigation to determine whether, as a
result of the reduction or elimination of a duty provided for under the
Agreement, an Australian article is being imported into the United
States in such increased quantities, in absolute terms or relative to
domestic production, and under such conditions that imports of the
Australian article constitute a substantial cause of serious injury or
threat thereof to the domestic industry producing an article that is
like, or directly competitive with, the imported article.
(c) Applicable Provisions.--The following provisions of section 202
of the Trade Act of 1974 (19 U.S.C. 2252) apply with respect to any
investigation initiated under subsection (b):
(1) Paragraphs (1)(B) and (3) of subsection (b).
(2) Subsection (c).
(3) Subsection (d).
(4) Subsection (i).
(d) Articles Exempt From Investigation.--No investigation may be
initiated under this section with respect to any Australian article if,
after the date on which the Agreement enters into force, import relief
has been provided with respect to that Australian article under this
subtitle.
SEC. 312. COMMISSION ACTION ON PETITION.
(a) Determination.--Not later than 120 days (180 days if critical
circumstances have been alleged) after the date on which an
investigation is initiated under section 311(b) with respect to a
petition, the Commission shall make the determination required under
that section.
(b) Applicable Provisions.--For purposes of this subtitle, the
provisions of paragraphs (1), (2), and (3) of section 330(d) of the
Tariff Act of 1930 (19 U.S.C. 1330(d) (1), (2), and (3)) shall be
applied with respect to determinations and findings made under this
section as if such determinations and findings were made under section
202 of the Trade Act of 1974 (19 U.S.C. 2252).
(c) Additional Finding and Recommendation If Determination
Affirmative.--If the determination made by the Commission under
subsection (a) with respect to imports of an article is affirmative, or
if the President may consider a determination of the Commission to be
an affirmative determination as provided for under paragraph (1) of
section 330(d) of the Tariff Act of 1930) (19 U.S.C. 1330(d)), the
Commission shall find, and recommend to the President in the report
required under subsection (d), the amount of import relief that is
necessary to remedy or prevent the injury found by the Commission in
the determination and to facilitate the efforts of the domestic
industry to make a positive adjustment to import competition. The
import relief recommended by the Commission under this subsection shall
be limited to that described in section 313(c). Only those members of
the Commission who voted in the affirmative under subsection (a) are
eligible to vote on the proposed action to remedy or prevent the injury
found by the Commission. Members of the Commission who did not vote in
the affirmative may submit, in the report required under subsection
(d), separate views regarding what action, if any, should be taken to
remedy or prevent the injury.
(d) Report to President.--Not later than the date that is 30 days
after the date on which a determination is made under subsection (a)
with respect to an investigation, the Commission shall submit to the
President a report that includes--
(1) the determination made under subsection (a) and an
explanation of the basis for the determination;
(2) if the determination under subsection (a) is
affirmative, any findings and recommendations for import relief
made under subsection (c) and an explanation of the basis for
each recommendation; and
(3) any dissenting or separate views by members of the
Commission regarding the determination and recommendation
referred to in paragraphs (1) and (2).
(e) Public Notice.--Upon submitting a report to the President under
subsection (d), the Commission shall promptly make public such report
(with the exception of information which the Commission determines to
be confidential) and shall cause a summary thereof to be published in
the Federal Register.
SEC. 313. PROVISION OF RELIEF.
(a) In General.--Not later than the date that is 30 days after the
date on which the President receives the report of the Commission in
which the Commission's determination under section 312(a) is
affirmative, or which contains a determination under section 312(a)
that the President considers to be affirmative under paragraph (1) of
section 330(d) of the Tariff Act of 1930 (19 U.S.C. 1330(d)(1)), the
President, subject to subsection (b), shall provide relief from imports
of the article that is the subject of such determination to the extent
that the President determines necessary to remedy or prevent the injury
found by the Commission and to facilitate the efforts of the domestic
industry to make a positive adjustment to import competition.
(b) Exception.--The President is not required to provide import
relief under this section if the President determines that the
provision of the import relief will not provide greater economic and
social benefits than costs.
(c) Nature of Relief.--
(1) In general.--The import relief (including provisional
relief) that the President is authorized to provide under this
section with respect to imports of an article is as follows:
(A) The suspension of any further reduction
provided for under Annex 2-B of the Agreement in the
duty imposed on such article.
(B) An increase in the rate of duty imposed on such
article to a level that does not exceed the lesser of--
(i) the column 1 general rate of duty
imposed under the HTS on like articles at the
time the import relief is provided; or
(ii) the column 1 general rate of duty
imposed under the HTS on like articles on the
day before the date on which the Agreement
enters into force.
(C) In the case of a duty applied on a seasonal
basis to such article, an increase in the rate of duty
imposed on the article to a level that does not exceed
the lesser of--
(i) the column 1 general rate of duty
imposed under the HTS on like articles for the
immediately preceding corresponding season; or
(ii) the column 1 general rate of duty
imposed under the HTS on like articles on the
day before the date on which the Agreement
enters into force.
(2) Progressive liberalization.--If the period for which
import relief is provided under this section is greater than 1
year, the President shall provide for the progressive
liberalization (described in article 9.2.7 of the Agreement) of
such relief at regular intervals during the period in which the
relief is in effect.
(d) Period of Relief.--
(1) In general.--Subject to paragraph (2), any import
relief that the President provides under this section may not
be in effect for more than 2 years.
(2) Extension.--
(A) In general.--Subject to subparagraph (C), the
President, after receiving an affirmative determination
from the Commission under subparagraph (B), may extend
the effective period of any import relief provided
under this section if the President determines that--
(i) the import relief continues to be
necessary to remedy or prevent serious injury
and to facilitate adjustment by the domestic
industry to import competition; and
(ii) there is evidence that the industry is
making a positive adjustment to import
competition.
(B) Action by commission.--(i) Upon a petition on
behalf of the industry concerned that is filed with the
Commission not earlier than the date which is 9 months,
and not later than the date which is 6 months, before
the date any action taken under subsection (a) is to
terminate, the Commission shall conduct an
investigation to determine whether action under this
section continues to be necessary to remedy or prevent
serious injury and whether there is evidence that the
industry is making a positive adjustment to import
competition.
(ii) The Commission shall publish notice of the
commencement of any proceeding under this subparagraph
in the Federal Register and shall, within a reasonable
time thereafter, hold a public hearing at which the
Commission shall afford interested parties and
consumers an opportunity to be present, to present
evidence, and to respond to the presentations of other
parties and consumers, and otherwise to be heard.
(iii) The Commission shall transmit to the
President a report on its investigation and
determination under this subparagraph not later than 60
days before the action under subsection (a) is to
terminate, unless the President specifies a different
date.
(C) Period of import relief.--Any import relief
provided under this section, including any extensions
thereof, may not, in the aggregate, be in effect for
more than 4 years.
(e) Rate After Termination of Import Relief.--When import relief
under this section is terminated with respect to an article--
(1) the rate of duty on that article after such termination
and on or before December 31 of the year in which such
termination occurs shall be the rate that, according to the
Schedule of the United States to Annex 2-B of the Agreement for
the staged elimination of the tariff, would have been in effect
1 year after the provision of relief under subsection (a); and
(2) the rate of duty for that article after December 31 of
the year in which termination occurs shall be, at the
discretion of the President, either--
(A) the applicable NTR (MFN) rate of duty for that
article set out in the Schedule of the United States to
Annex 2-B of the Agreement; or
(B) the rate of duty resulting from the elimination
of the tariff in equal annual stages ending on the date
set out in the Schedule of the United States to Annex
2-B of the Agreement for the elimination of the tariff.
(f) Articles Exempt From Relief.--No import relief may be provided
under this section on any article that--
(1) is subject to--
(A) import relief under subtitle B; or
(B) an assessment of additional duty under
subsection (b), (c), or (d) of section 202; or
(2) has been subject to import relief under this subtitle
after the date on which the Agreement enters into force.
SEC. 314. TERMINATION OF RELIEF AUTHORITY.
(a) General Rule.--Subject to subsection (b), no import relief may
be provided under this subtitle after the date that is 10 years after
the date on which the Agreement enters into force.
(b) Exception.--If an article for which relief is provided under
this subtitle is an article for which the period for tariff
elimination, set out in the Schedule of the United States to Annex 2-B
of the Agreement, is greater than 10 years, no relief under this
subtitle may be provided for that article after the date on which such
period ends.
(c) Presidential Determination.--Import relief may be provided
under this subtitle in the case of an Australian article after the date
on which such relief would, but for this subsection, terminate under
subsection (a) or (b), if the President determines that Australia has
consented to such relief.
SEC. 315. COMPENSATION AUTHORITY.
For purposes of section 123 of the Trade Act of 1974 (19 U.S.C.
2133), any import relief provided by the President under section 313
shall be treated as action taken under chapter 1 of title II of such
Act.
SEC. 316. CONFIDENTIAL BUSINESS INFORMATION.
Section 202(a)(8) of the Trade Act of 1974 (19 U.S.C. 2252(a)(8))
is amended in the first sentence--
(1) by striking ``and''; and
(2) by inserting before the period at the end
``, and title III of the United States-Australia Free Trade
Agreement Implementation Act''.
Subtitle B--Textile and Apparel Safeguard Measures
SEC. 321. COMMENCEMENT OF ACTION FOR RELIEF.
(a) In General.--A request under this subtitle for the purpose of
adjusting to the obligations of the United States under the Agreement
may be filed with the President by an interested party. Upon the filing
of a request, the President shall review the request to determine, from
information presented in the request, whether to commence consideration
of the request.
(b) Allegation of Critical Circumstances.--An interested party
filing a request under this section may--
(1) allege that critical circumstances exist such that
delay in the provision of relief would cause damage that would
be difficult to repair; and
(2) based on such allegation, request that relief be
provided on a provisional basis.
(c) Publication of Request.--If the President determines that the
request under subsection (a) provides the information necessary for the
request to be considered, the President shall cause to be published in
the Federal Register a notice of commencement of consideration of the
request, and notice seeking public comments regarding the request. The
notice shall include a summary of the request and the dates by which
comments and rebuttals must be received.
SEC. 322. DETERMINATION AND PROVISION OF RELIEF.
(a) Determination.--
(1) In general.--If a positive determination is made under
section 321(c), the President shall determine whether, as a
result of the reduction or elimination of a duty under the
Agreement, an Australian textile or apparel article is being
imported into the United States in such increased quantities,
in absolute terms or relative to the domestic market for that
article, and under such conditions as to cause serious damage,
or actual threat thereof, to a domestic industry producing an
article that is like, or directly competitive with, the
imported article.
(2) Serious damage.--In making a determination under
paragraph (1), the President--
(A) shall examine the effect of increased imports
on the domestic industry, as reflected in changes in
such relevant economic factors as output, productivity,
utilization of capacity, inventories, market share,
exports, wages, employment, domestic prices, profits,
and investment, none of which is necessarily decisive;
and
(B) shall not consider changes in technology or
consumer preference as factors supporting a
determination of serious damage or actual threat
thereof.
(b) Provision of Relief.--
(1) In general.--If a determination under subsection (a) is
affirmative, the President may provide relief from imports of
the article that is the subject of such determination, as
described in paragraph (2), to the extent that the President
determines necessary to remedy or prevent the serious damage
and to facilitate adjustment by the domestic industry to import
competition.
(2) Nature of relief.--The relief that the President is
authorized to provide under this subsection with respect to
imports of an article is an increase in the rate of duty
imposed on the article to a level that does not exceed the
lesser of--
(A) the column 1 general rate of duty imposed under
the HTS on like articles at the time the import relief
is provided; or
(B) the column 1 general rate of duty imposed under
the HTS on like articles on the day before the date on
which the Agreement enters into force.
(c) Critical Circumstances.--
(1) Presidential determination.--When a request filed under
section 321(a) contains an allegation of critical circumstances
and a request for provisional relief under section 321(b), the
President shall, not later than 60 days after the request is
filed, determine, on the basis of available information,
whether--
(A) there is clear evidence that--
(i) imports from Australia have increased
as the result of the reduction or elimination
of a customs duty under the Agreement; and
(ii) such imports are causing serious
damage, or actual threat thereof, to the
domestic industry producing an article like or
directly competitive with the imported article;
and
(B) delay in taking action under this subtitle
would cause damage to that industry that would be
difficult to repair.
(2) Extent of provisional relief.--If the determinations
under subparagraphs (A) and (B) of paragraph (1) are
affirmative, the President shall determine the extent of
provisional relief that is necessary to remedy or prevent the
serious damage. The nature of the provisional relief available
shall be the relief described in subsection (b)(2). Within 30
days after making affirmative determinations under
subparagraphs (A) and (B) of paragraph (1), the President, if
the President considers provisional relief to be warranted,
shall provide, for a period not to exceed 200 days, such
provisional relief that the President considers necessary to
remedy or prevent the serious damage.
(3) Suspension of liquidation.--If provisional relief is
provided under paragraph (2), the President shall order the
suspension of liquidation of all imported articles subject to
the affirmative determinations under subparagraphs (A) and (B)
of paragraph (1) that are entered, or withdrawn from warehouse
for consumption, on or after the date of the determinations.
(4) Termination of provisional relief.--
(A) In general.--Any provisional relief implemented
under this subsection with respect to an imported
article shall terminate on the day on which--
(i) the President makes a negative
determination under subsection (a) regarding
serious damage or actual threat thereof by
imports of such article;
(ii) action described in subsection (b)
takes effect with respect to such article;
(iii) a decision by the President not to
take any action under subsection (b) with
respect to such article becomes final; or
(iv) the President determines that, because
of changed circumstances, such relief is no
longer warranted.
(B) Suspension of liquidation.--Any suspension of
liquidation ordered under paragraph (3) with respect to
an imported article shall terminate on the day on which
provisional relief is terminated under subparagraph (A)
with respect to the article.
(C) Rates of duty.--If an increase in, or the
imposition of, a duty that is provided under subsection
(b) on an imported article is different from a duty
increase or imposition that was provided for such an
article under this subsection, then the entry of any
such article for which liquidation was suspended under
paragraph (3) shall be liquidated at whichever of such
rates of duty is lower.
(D) Rate of duty if provisional relief.--If
provisional relief is provided under this subsection
with respect to an imported article and neither a duty
increase nor a duty imposition is provided under
subsection (b) for such article, the entry of any such
article for which liquidation was suspended under
paragraph (3) shall be liquidated at the rate of duty
that applied before the provisional relief was
provided.
SEC. 323. PERIOD OF RELIEF.
(a) In General.--Subject to subsection (b), the import relief that
the President provides under subsections (b) and (c) of section 322 may
not, in the aggregate, be in effect for more than 2 years.
(b) Extension.--
(1) In general.--Subject to paragraph (2), the President
may extend the effective period of any import relief provided
under this subtitle for a period of not more than 2 years, if
the President determines that--
(A) the import relief continues to be necessary to
remedy or prevent serious damage and to facilitate
adjustment by the domestic industry to import
competition; and
(B) there is evidence that the industry is making a
positive adjustment to import competition.
(2) Limitation.--Any relief provided under this subtitle,
including any extensions thereof, may not, in the aggregate, be
in effect for more than 4 years.
SEC. 324. ARTICLES EXEMPT FROM RELIEF.
The President may not provide import relief under this subtitle
with respect to any article if--
(1) import relief previously has been provided under this
subtitle with respect to that article; or
(2) the article is subject to import relief under--
(A) subtitle A; or
(B) chapter 1 of title II of the Trade Act of 1974
(19 U.S.C. 2251 et seq.).
SEC. 325. RATE AFTER TERMINATION OF IMPORT RELIEF.
When import relief under this subtitle is terminated with respect
to an article, the rate of duty on that article shall be the rate that
would have been in effect, but for the provision of such relief, on the
date the relief terminates.
SEC. 326. TERMINATION OF RELIEF AUTHORITY.
No import relief may be provided under this subtitle with respect
to any article after the date that is 10 years after the date on which
duties on the article are eliminated pursuant to the Agreement.
SEC. 327. COMPENSATION AUTHORITY.
For purposes of section 123 of the Trade Act of 1974 (19 U.S.C.
2133), any import relief provided by the President under this subtitle
shall be treated as action taken under chapter 1 of title II of such
Act.
SEC. 328. BUSINESS CONFIDENTIAL INFORMATION.
The President may not release information which is submitted in a
proceeding under this subtitle and which the President considers to be
confidential business information unless the party submitting the
confidential business information had notice, at the time of
submission, that such information would be released, or such party
subsequently consents to the release of the information. To the extent
a party submits confidential business information to the President in a
proceeding under this subtitle, the party also shall submit a
nonconfidential version of the information, in which the confidential
business information is summarized or, if necessary, deleted.
Subtitle C--Cases Under Title II of the Trade Act of 1974
SEC. 331. FINDINGS AND ACTION ON GOODS FROM AUSTRALIA.
(a) Effect of Imports.--If, in any investigation initiated under
chapter 1 of title II of the Trade Act of 1974 (19 U.S.C. 2251 et
seq.), the Commission makes an affirmative determination (or a
determination which the President may treat as an affirmative
determination under such chapter by reason of section 330(d) of the
Tariff Act of 1930), the Commission shall also find (and report to the
President at the time such injury determination is submitted to the
President) whether imports of the article from Australia are a
substantial cause of serious injury or threat thereof.
(b) Presidential Determination Regarding Australian Imports.--In
determining the nature and extent of action to be taken under chapter 1
of title II of the Trade Act of 1974, the President shall determine
whether imports from Australia are a substantial cause of the serious
injury or threat thereof found by the Commission and, if such
determination is in the negative, may exclude from such action imports
from Australia.
TITLE IV--PROCUREMENT
SEC. 401. ELIGIBLE PRODUCTS.
Section 308(4)(A) of the Trade Agreements Act of 1979 (19 U.S.C.
2518(4)(A)) is amended--
(1) by striking ``or'' at the end of clause (i);
(2) by striking the period at the end of clause (ii) and
inserting ``; or''; and
(3) by adding at the end the following new clause:
``(iii) a party to a free trade agreement
that entered into force with respect to the
United States after December 31, 2003, and
before January 2, 2005, a product or service of
that country or instrumentality which is
covered under the free trade agreement for
procurement by the United States.''.
Calendar No. 630
108th CONGRESS
2d Session
S. 2610
_______________________________________________________________________
A BILL
To implement the United States-Australia Free Trade Agreement.
_______________________________________________________________________
June 14, 2004
Reported without amendment