29656: Sprague (Comment) H.R. 6406 (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: J.Sprague



The roll call vote for this bill is available at http://
clerk.house.gov/evs/2006/roll539.xml

Various policy requirements are attached to these trade preferences.
Haiti has one of the lowest rates of public employment in the world
so it is disturbing to see (i) under (d) Eligibility Requirements.
Would the few public education facilities and national cooperatives
left be considered an "interference" to the market-based economy?
Note the following:

"`(1) IN GENERAL- Haiti shall be eligible for preferential treatment
under this section if the President determines and certifies to
Congress that Haiti--
`(A) has established, or is making continual progress toward
establishing--
`(i) a market-based economy that protects private property rights,
incorporates an open rules-based trading system, and minimizes
government interference in the economy through measures such as price
controls, subsidies, and government ownership of economic assets;"










H.R.6406

To modify temporarily certain rates of duty and make other technical
amendments to the trade laws, to extend certain trade preference
programs, and for other purposes. (Introduced in House)





TITLE V--HAITI



SEC. 5001. SHORT TITLE.

This title may be cited as the `Haitian Hemispheric Opportunity
through Partnership Encouragement Act of 2006' .
SEC. 5002. TRADE BENEFITS FOR HAITI.

(a) In General- The Caribbean Basin Economic Recovery Act (19 U.S.C.
2701 et seq.) is amended by inserting after section 213 the following
new section:
`SEC. 213A. SPECIAL RULES FOR HAITI.

`(a) DEFINITIONS- In this section:
`(1) APPLICABLE 1-YEAR PERIOD-
`(A) IN GENERAL- The term `applicable 1-year period' means each of
the 1-year periods described in subparagraphs (B) through (F).
`(B) INITIAL APPLICABLE 1-YEAR PERIOD- The term `initial applicable 1-
year period' means the 1-year period beginning on the date of the
enactment of the Haitian Hemispheric Opportunity through Partnership
Encouragement Act of 2006.
`(C) SECOND APPLICABLE 1-YEAR PERIOD- The term `second applicable 1-
year period' means the 1-year period beginning on the day after the
last day of the initial applicable 1-year period.
`(D) THIRD APPLICABLE 1-YEAR PERIOD- The term `third applicable 1-
year period' means the 1-year period beginning on the day after the
last day of the second applicable 1-year period.
`(E) FOURTH APPLICABLE 1-YEAR PERIOD- The term `fourth applicable 1-
year period' means the 1-year period beginning on the day after the
last day of the third applicable 1-year period.
`(F) FIFTH APPLICABLE 1-YEAR PERIOD- The term `fifth applicable 1-
year period' means the 1-year period beginning on the day after the
last day of the fourth applicable 1-year period.
`(2) ENTER; ENTRY- The terms `enter' and `entry' refer to the entry,
or withdrawal from warehouse for consumption, in the customs
territory of the United States.
`(b) Apparel Articles-
`(1) IN GENERAL- In addition to any other preferential treatment
under this title, apparel articles described in paragraph (2) of a
producer or entity controlling production that are imported directly
from Haiti shall enter the United States free of duty during an
applicable 1-year period, subject to the limitations set forth in
paragraphs (2) and (3), if Haiti has met the requirements of
subsections (d) and (e).
`(2) Apparel articles described-
`(A) IN GENERAL- In any applicable 1-year period, apparel articles
described in this paragraph are apparel articles that are wholly
assembled, or are knit-to-shape, in Haiti from any combination of
fabrics, fabric components, components knit-to-shape, and yarns, only
if, for each entry in the applicable 1-year period, the sum of--
`(i) the cost or value of the materials produced in Haiti or one or
more countries described in subparagraph (C), or any combination
thereof, plus
`(ii) the direct costs of processing operations (as defined in
section 213(a)(3)) performed in Haiti or one or more countries
described in subparagraph (C), or any combination thereof,
is not less than the applicable percentage (as defined in
subparagraph (E)(i)) of the declared customs value of such apparel
articles.
`(B) DEDUCTIONS- In calculating cost or value under subparagraph (A)
(i), there shall be deducted the cost or value of--
`(i) any foreign materials that are used in the production of the
apparel articles in Haiti; and
`(ii) any foreign materials that are used in the production of the
materials described in subparagraph (A)(i).
`(C) COUNTRIES DESCRIBED- The countries referred to in subparagraph
(A) are the following:
`(i) The United States.
`(ii) Any country that is a party to a free trade agreement with the
United States that is in effect on the date of the enactment of the
Haitian Hemispheric Opportunity through Partnership Encouragement Act
of 2006, or that enters into force under the Bipartisan Trade
Promotion Authority Act of 2002 (19 U.S.C. 3801 et seq.).
`(iii) Any country designated as a beneficiary country under section
213(b)(5)(B) of this Act.
`(iv) Any country designated as a beneficiary country under section
506A(a)(1) of the Trade Act of 1974 (19 U.S.C. 2466a(a)(1)), if a
finding has been made by the President or the President's designee,
and published in the Federal Register, that the country has satisfied
the requirements of section 113 of the African Growth and Opportunity
Act (19 U.S.C. 3722).
`(v) Any country designated as a beneficiary country under section 204
(b)(6)(B) of the Andean Trade Preference Act (19 U.S.C. 3203(b)(6)(B)).
`(D) ANNUAL AGGREGATION-
`(i) INITIAL APPLICABLE 1-YEAR PERIOD- In the initial applicable 1-
year period, the requirements under subparagraph (A) relating to
applicable percentage may also be met for articles of a producer or
an entity controlling production that enter during the initial
applicable 1-year period by aggregating--
`(I) the cost or value of materials under clause (i) of subparagraph
(A), and
`(II) the direct costs of processing operations under clause (ii) of
subparagraph (A),
of all apparel articles of that producer or entity controlling
production that are wholly assembled, or are knit-to-shape, in Haiti
and are entered during the initial applicable 1-year period.
`(ii) OTHER APPLICABLE 1-YEAR PERIODS- In each of the second, third,
fourth, and fifth applicable 1-year periods, the requirements under
subparagraph (A) relating to applicable percentage may also be met
for articles of a producer or an entity controlling production that
enter during the applicable 1-year period by aggregating--
`(I) the cost or value of materials under clause (i) of subparagraph
(A), and
`(II) the direct costs of processing operations under clause (ii) of
subparagraph (A),
of all apparel articles of that producer or entity controlling
production that are wholly assembled, or are knit-to-shape, in Haiti
and are entered during the preceding applicable 1-year period.
`(iii) DEDUCTIONS- In calculating cost or value under clause (i)(I)
or (ii)(I), there shall be deducted the cost or value of--
`(I) any foreign materials that are used in the production of the
apparel articles in Haiti; and
`(II) any foreign materials that are used in the production of the
materials described in clause (i)(I) or (ii)(I) (as the case may be).
`(iv) INCLUSION IN CALCULATION OF OTHER ARTICLES RECEIVING
PREFERENTIAL TREATMENT- (I) The entry of a woven apparel article
receiving preferential treatment under paragraph (4) is not included
in an annual aggregation under clause (i) or (ii).
`(II) Entries of articles receiving preferential treatment under
paragraph (5) are not included in an annual aggregation under clause
(i) or (ii) unless the producer or entity controlling production
elects, at the time the annual aggregation calculation is made, to
include such entries in such aggregation.
`(III) Entries of apparel articles that receive preferential
treatment under any provision of law other than this subsection or
are subject to the `General' column 1 rate of duty under the HTS are
not included in an annual aggregation under clause (i) or (ii) unless
the producer or entity controlling production elects, at the time the
annual aggregation calculation is made, to include such entries in
such aggregation.
`(E) DEFINITIONS- In this paragraph:
`(i) APPLICABLE PERCENTAGE- The term `applicable percentage' means--
`(I) 50 percent or more during the initial applicable 1-year period,
the second applicable 1-year period, and the third applicable 1-year
period;
`(II) 55 percent or more during the fourth applicable 1-year period; and
`(III) 60 percent or more during the fifth applicable 1-year period.
`(ii) FOREIGN MATERIAL- The term `foreign material' means a material
produced in a country other than Haiti or any country described in
subparagraph (C).
`(F) DEVELOPMENT OF PROCEDURE TO ENSURE COMPLIANCE-
`(i) IN GENERAL- The Bureau of Customs and Border Protection of the
Department of Homeland Security shall develop and implement methods
and procedures to ensure ongoing compliance with the requirements set
forth in subparagraphs (A) and (D).
`(ii) NONCOMPLIANCE- If the Bureau of Customs and Border Protection
finds that a producer or an entity controlling production has not
satisfied such requirements in any applicable 1-year period, either
for individual entries entered pursuant to subparagraph (A) or for
entries entered in aggregate pursuant to subparagraph (D), then
apparel articles described in subparagraph (A) of that producer or
entity shall be ineligible for preferential treatment under paragraph
(1) during any succeeding applicable 1-year period until--
`(I) the cost or value of materials under clause (i) of subparagraph
(A), plus
`(II) the direct costs of processing operations under clause (ii) of
subparagraph (A),
of that producer or entity controlling production, is not less than
the applicable percentage under subparagraph (E)(i), plus 10 percent,
of the aggregate declared customs value of all apparel articles of
that producer or entity controlling production that are wholly
assembled, or are knit-to-shape, in Haiti and are entered during the
preceding applicable 1-year period.
`(iii) RETROACTIVE APPLICATION OF DUTY-FREE TREATMENT- If--
`(I) a producer or an entity controlling production is ineligible for
preferential treatment under paragraph (1) in an applicable 1-year
period because that producer or entity controlling production did not
satisfy the requirements of subparagraph (A) or (D), and
`(II) that producer or entity controlling production satisfies the
requirements of clause (ii) of this subparagraph in that applicable 1-
year period,
then, notwithstanding section 514 of the Tariff Act of 1930 (19
U.S.C. 1514) or any other provision of law, upon proper request filed
with the Bureau of Customs and Border Protection before the 90th day
after the Bureau of Customs and Border Protection determines that
subclause (II) applies, the entry of any articles--
`(aa) that was made during that applicable 1-year period, and
`(bb) with respect to which there would have been preferential
treatment under paragraph (1) if the producer or entity controlling
production had satisfied the requirements in subparagraph (A) or (D)
(as the case may be),
shall be liquidated or reliquidated as though such preferential
treatment under paragraph (1) applied to such entry.
`(G) FABRICS NOT AVAILABLE IN COMMERCIAL QUANTITIES-
`(i) IN GENERAL- For purposes of determining the applicable
percentage under subparagraph (A) or (D), there may be included in
that percentage--
`(I) the cost of fabrics or yarns to the extent that apparel articles
of such fabrics or yarns would be eligible for preferential
treatment, without regard to the source of the fabrics or yarns,
under Annex 401 of the NAFTA; and
`(II) the cost of fabrics or yarns that are designated as not being
available in commercial quantities for purposes of--
`(aa) section 213(b)(2)(A)(v) of this Act,

`(bb) section 112(b)(5) of the African Growth and Opportunity Act,

`(cc) section 204(b)(3)(B)(i)(III) or (ii) of the Andean Trade
Preference Act, or

`(dd) any other provision, relating to determining whether a textile
or apparel article is an originating good eligible for preferential
treatment, of a law that implements a free trade agreement that
enters into force under the Bipartisan Trade Promotion Authority Act
of 2002,

without regard to the source of the fabrics or yarns.
`(ii) REMOVAL OF DESIGNATION OF FABRICS OR YARNS NOT AVAILABLE IN
COMMERCIAL QUANTITIES- If the President determines that--
`(I) any fabric or yarn described in clause (i)(I) was determined to
be eligible for preferential treatment, or
`(II) any fabric or yarn described in clause (i)(II) was designated
as not being available in commercial quantities,
on the basis of fraud, the President is authorized to remove the
eligibility or designation (as the case may be) of that fabric or
yarn with respect to articles entered after such removal.
`(3) Quantitative limitations- The preferential treatment described
in paragraph (1) shall be extended, during each of the applicable 1-
year periods set forth in the following table, to not more than the
corresponding percentage of the aggregate square meter equivalents of
all apparel articles imported into the United States in the most
recent 12-month period for which data are available:
------------------------------------------------------------------------
---

------------------------------------------------------------------------
---

  `During
the:

the corresponding percentage is:

  `initial applicable 1-year period 1
percent.

  `second applicable 1-year period  1.25
percent.

  `third applicable 1-year period   1.5
percent.

  `fourth applicable 1-year period  1.75
percent.

  `fifth applicable 1-year period   2
percent.

------------------------------------------------------------------------
---

No preferential treatment shall be provided under paragraph (1) after
the last day of the fifth applicable 1-year period. `(4) SPECIAL RULE
FOR WOVEN APPAREL- In the case of apparel articles classifiable under
chapter 62 of the HTS (other than articles classifiable under
subheading 6212.10 of the HTS), as in effect on the date of the
enactment of the Haitian Hemispheric Opportunity through Partnership
Encouragement Act of 2006, that do not qualify for preferential
treatment under paragraph (1) because they do not meet the percentage
requirements under paragraph (2)(A), (2)(B), or (2)(D), the
preferential treatment under paragraph (1)--
`(A) shall be extended, in addition to the quantities permitted under
paragraph (3) to--
`(i) not more than 50,000,000 square meter equivalents of such
apparel articles for the initial applicable 1-year period;
`(ii) not more than 50,000,000 square meter equivalents of such
apparel articles for the second applicable 1-year period; and
`(iii) not more than 33,500,000 square meter equivalents for the
third applicable 1-year period; and
`(B) may not be extended to such apparel articles after the last day
of the third applicable 1-year period.
`(5) SPECIAL RULE FOR BRASSIERES- The preferential treatment under
paragraph (1) shall, subject to the limitations under paragraph (3),
be extended to any article classifiable under heading 6212.10 of the
HTS, if the article is both cut and sewn or otherwise assembled in
Haiti or the United States, or both, without regard to the source of
the fabric or components from which the article is made, and if Haiti
has met the requirements of subsections (d) and (e).
`(c) SPECIAL RULE FOR CERTAIN WIRE HARNESS AUTOMOTIVE COMPONENTS-
(1) IN GENERAL- Any wire harness automotive component that is the
product or manufacture of Haiti and is imported directly from Haiti
into the customs territory of the United States shall enter the
United States free of duty, during the 5-year period beginning on the
date of the enactment of the Haitian Hemispheric Opportunity through
Partnership Encouragement Act of 2006, if Haiti has met the
requirements of subsection (d) and if the sum of--
`(A) the cost or value of the materials produced in Haiti or one or
more countries described in subsection (b)(2)(C), or any combination
thereof, plus
`(B) the direct costs of processing operations (as defined in section
213(a)(3)) performed in Haiti or the United States, or both,
is not less than 50 percent of the declared customs value of such
wire harness automotive component.
`(2) WIRE HARNESS AUTOMOTIVE COMPONENT- For purposes of this
subsection, the term `wire harness automotive component' means any
article provided for in subheading 8544.30.00 of the HTS, as in
effect on the date of the enactment of the Haitian Hemispheric
Opportunity through Partnership Encouragement Act of 2006.
`(d) Eligibility Requirements-
`(1) IN GENERAL- Haiti shall be eligible for preferential treatment
under this section if the President determines and certifies to
Congress that Haiti--
`(A) has established, or is making continual progress toward
establishing--
`(i) a market-based economy that protects private property rights,
incorporates an open rules-based trading system, and minimizes
government interference in the economy through measures such as price
controls, subsidies, and government ownership of economic assets;
`(ii) the rule of law, political pluralism, and the right to due
process, a fair trial, and equal protection under the law;
`(iii) the elimination of barriers to United States trade and
investment, including by--
`(I) the provision of national treatment and measures to create an
environment conducive to domestic and foreign investment;
`(II) the protection of intellectual property; and
`(III) the resolution of bilateral trade and investment disputes;
`(iv) economic policies to reduce poverty, increase the availability
of health care and educational opportunities, expand physical
infrastructure, promote the development of private enterprise, and
encourage the formation of capital markets through microcredit or
other programs;
`(v) a system to combat corruption and bribery, such as signing and
implementing the Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions; and
`(vi) protection of internationally recognized worker rights,
including the right of association, the right to organize and bargain
collectively, a prohibition on the use of any form of forced or
compulsory labor, a minimum age for the employment of children, and
acceptable conditions of work with respect to minimum wages, hours of
work, and occupational safety and health;
`(B) does not engage in activities that undermine United States
national security or foreign policy interests; and
`(C) does not engage in gross violations of internationally
recognized human rights or provide support for acts of international
terrorism and cooperates in international efforts to eliminate human
rights violations and terrorist activities.
`(2) TIME LIMIT FOR DETERMINATION.- The President shall determine
whether Haiti meets the requirements of paragraph (1) not later than
90 days after the date of the enactment of the Haitian Hemispheric
Opportunity through Partnership Encouragement Act of 2006.
`(3) CONTINUING COMPLIANCE- If the President determines that Haiti is
not making continual progress in meeting the requirements described
in paragraph (1)(A), the President shall terminate the preferential
treatment under this section.
`(e) Conditions Regarding Enforcement of Circumvention-
`(1) IN GENERAL- The preferential treatment under subsection (b)(1)
shall not apply unless the President certifies to Congress that Haiti
is meeting the following conditions:
`(A) Haiti has adopted an effective visa system, domestic laws, and
enforcement procedures applicable to articles described in subsection
(b) to prevent unlawful transshipment of the articles and the use of
counterfeit documents relating to the importation of the articles
into the United States.
`(B) Haiti has enacted legislation or promulgated regulations that
would permit the Bureau of Customs and Border Protection verification
teams to have the access necessary to investigate thoroughly
allegations of transshipment through such country.
`(C) Haiti agrees to report, on a timely basis, at the request of the
Bureau of Customs and Border Protection, on the total exports from
and imports into that country of articles described in subsection
(b), consistent with the manner in which the records are kept by Haiti.
`(D) Haiti agrees to cooperate fully with the United States to
address and take action necessary to prevent circumvention as
provided in Article 5 of the Agreement on Textiles and Clothing.
`(E) Haiti agrees to require all producers and exporters of articles
described in subsection (b) in that country to maintain complete
records of the production and the export of such articles, including
materials used in the production, for at least 5 years after the
production or export (as the case may be).
`(F) Haiti agrees to report, on a timely basis, at the request of the
Bureau of Customs and Border Protection, documentation establishing
the country of origin of articles described in subsection (b) as used
by that country in implementing an effective visa system.
`(2) DEFINITION OF TRANSSHIPMENT- Transshipment within the meaning of
this subsection has occurred when preferential treatment for a
textile or apparel article under this section has been claimed on the
basis of material false information concerning the country of origin,
manufacture, processing, or assembly of the article or any of its
components.