[PEN-L:28618] international regulatory arbitrage

["Ian Murray" <seamus2001@xxxxxxxxx>]

http://thomas.loc.gov/cgi-bin/query/C?c107:./temp/~c1076KqCKI

HR 3005 EH
107th CONGRESS
1st Session
H. R. 3005
AN ACT
To extend trade authorities procedures with respect to reciprocal trade agreements.


SEC. 2. TRADE NEGOTIATING OBJECTIVES.

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(b) PRINCIPAL TRADE NEGOTIATING OBJECTIVES-

(1) TRADE BARRIERS AND DISTORTIONS- The principal negotiating objectives of the United States
regarding trade barriers and other trade distortions are--

(A) to expand competitive market opportunities for United States exports and to obtain fairer and
more open conditions of trade by reducing or eliminating tariff and nontariff barriers and policies
and practices of foreign governments directly related to trade that decrease market opportunities
for United States exports or otherwise distort United States trade; and

(B) to obtain reciprocal tariff and nontariff barrier elimination agreements, with particular
attention to those tariff categories covered in section 111(b) of the Uruguay Round Agreements Act
(19 U.S.C. 3521(b)).

(2) TRADE IN SERVICES- The principal negotiating objective of the United States regarding trade in
services is to reduce or eliminate barriers to international trade in services, including regulatory
and other barriers that deny national treatment and market access or unreasonably restrict the
establishment or operations of service suppliers.

(3) FOREIGN INVESTMENT- The principal negotiating objective of the United States regarding foreign
investment is to reduce or eliminate artificial or trade-distorting barriers to trade-related
foreign investment and, recognizing that United States law on the whole provides a high level of
protection for investment, consistent with or greater than the level required by international law,
to secure for investors important rights comparable to those that would be available under United
States legal principles and practice, by--

(A) reducing or eliminating exceptions to the principle of national treatment;

(B) freeing the transfer of funds relating to investments;

(C) reducing or eliminating performance requirements, forced technology transfers, and other
unreasonable barriers to the establishment and operation of investments;

(D) seeking to establish standards for expropriation and compensation for expropriation, consistent
with United States legal principles and practice;

(E) providing meaningful procedures for resolving investment disputes;

(F) seeking to improve mechanisms used to resolve disputes between an investor and a government
through--

(i) mechanisms to eliminate frivolous claims; and

(ii) procedures to ensure the efficient selection of arbitrators and the expeditious disposition of
claims;

(G) providing an appellate or similar review mechanism to correct manifestly erroneous
interpretations of law; and

(H) ensuring the fullest measure of transparency in the dispute settlement mechanism, to the extent
consistent with the need to protect information that is classified or business confidential, by--

(i) ensuring that all requests for dispute settlement are promptly made public;

(ii) ensuring that--

(I) all proceedings, submissions, findings, and decisions are promptly made public;

(II) all hearings are open to the public; and

(iii) establishing a mechanism for acceptance of amicus curiae submissions from businesses, unions,
and nongovernmental organizations.

(4) INTELLECTUAL PROPERTY- The principal negotiating objectives of the United States regarding
trade-related intellectual property are--

(A) to further promote adequate and effective protection of intellectual property rights, including
through--

(i)(I) ensuring accelerated and full implementation of the Agreement on Trade-Related Aspects of
Intellectual Property Rights referred to in section 101(d)(15) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(15)), particularly with respect to meeting enforcement obligations under that
agreement; and

(II) ensuring that the provisions of any multilateral or bilateral trade agreement governing
intellectual property rights that is entered into by the United States reflect a standard of
protection similar to that found in United States law;

(ii) providing strong protection for new and emerging technologies and new methods of transmitting
and distributing products embodying intellectual property;

(iii) preventing or eliminating discrimination with respect to matters affecting the availability,
acquisition, scope, maintenance, use, and enforcement of intellectual property rights;

(iv) ensuring that standards of protection and enforcement keep pace with technological
developments, and in particular ensuring that rightholders have the legal and technological means to
control the use of their works through the Internet and other global communication media, and to
prevent the unauthorized use of their works; and

(v) providing strong enforcement of intellectual property rights, including through accessible,
expeditious, and effective civil, administrative, and criminal enforcement mechanisms; and

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(8) REGULATORY PRACTICES- The principal negotiating objectives of the United States regarding the
use of government regulation or other practices by foreign governments to provide a competitive
advantage to their domestic producers, service providers, or investors and thereby reduce market
access for United States goods, services, and investments are--

(A) to achieve increased transparency and opportunity for the participation of affected parties in
the development of regulations;

(B) to require that proposed regulations be based on sound science, cost-benefit analysis, risk
assessment, or other objective evidence;

(C) to establish consultative mechanisms among parties to trade agreements to promote increased
transparency in developing guidelines,
rules, regulations, and laws for government procurement and other regulatory regimes; and

(D) to achieve the elimination of government measures such as price controls and reference pricing
which deny full market access for United States products.

(10) RECIPROCAL TRADE IN AGRICULTURE- (A) The principal negotiating objective of the United States
with respect to agriculture is to obtain competitive opportunities for United States exports of
agricultural commodities in foreign markets substantially equivalent to the competitive
opportunities afforded foreign exports in United States markets and to achieve fairer and more open
conditions of trade in bulk, specialty crop, and value-added commodities by--

(i) reducing or eliminating, by a date certain, tariffs or other charges that decrease market
opportunities for United States exports--

(I) giving priority to those products that are subject to significantly higher tariffs or subsidy
regimes of major producing countries; and

(II) providing reasonable adjustment periods for United States import-sensitive products, in close
consultation with the Congress on such products before initiating tariff reduction negotiations;

(ii) reducing tariffs to levels that are the same as or lower than those in the United States;

(iii) reducing or eliminating subsidies that decrease market opportunities for United States exports
or unfairly distort agriculture markets to the detriment of the United States;

(iv) allowing the preservation of programs that support family farms and rural communities but do
not distort trade;

(v) developing disciplines for domestic support programs, so that production that is in excess of
domestic food security needs is sold at world prices;

(vi) eliminating Government policies that create price-depressing surpluses;

(vii) eliminating state trading enterprises whenever possible;

(viii) developing, strengthening, and clarifying rules and effective dispute settlement mechanisms
to eliminate practices that unfairly decrease United States market access opportunities or distort
agricultural markets to the detriment of the United States, particularly with respect to
import-sensitive products, including--

(I) unfair or trade-distorting activities of state trading enterprises and other administrative
mechanisms, with emphasis on requiring price transparency in the operation of state trading
enterprises and such other mechanisms in order to end cross subsidization, price discrimination, and
price undercutting;

(II) unjustified trade restrictions or commercial requirements, such as labeling, that affect new
technologies, including biotechnology;

(III) unjustified sanitary or phytosanitary restrictions, including those not based on scientific
principles in contravention of the Uruguay Round Agreements;

(IV) other unjustified technical barriers to trade; and

(V) restrictive rules in the administration of tariff rate quotas;

(ix) eliminating practices that adversely affect trade in perishable or cyclical products, while
improving import relief mechanisms to recognize the unique characteristics of perishable and
cyclical agriculture;

(x) ensuring that the use of import relief mechanisms for perishable and cyclical agriculture are as
accessible and timely to growers in the United States as those mechanisms that are used by other
countries;

(xi) taking into account whether a party to the negotiations has failed to adhere to the provisions
of already existing trade agreements with the United States or has circumvented obligations under
those agreements;

(xii) taking into account whether a product is subject to market distortions by reason of a failure
of a major producing country to adhere to the provisions of already existing trade agreements with
the United States or by the circumvention by that country of its obligations under those agreements;

(xiii) otherwise ensuring that countries that accede to the World Trade Organization have made
meaningful market liberalization commitments in agriculture;

(xiv) taking into account the impact that agreements covering agriculture to which the United States
is a party, including the North American Free Trade Agreement, have on the United States
agricultural industry; and

(xv) maintaining bona fide food assistance programs and preserving United States market development
and export credit programs.

(B)(i) Before commencing negotiations with respect to agriculture, the United States Trade
Representative, in consultation with the Congress, shall seek to develop a position on the treatment
of seasonal and perishable agricultural products to be employed in the negotiations in order to
develop an international consensus on the treatment of seasonal or perishable agricultural products
in investigations relating to dumping and safeguards and in any other relevant area.

(ii) During any negotiations on agricultural subsidies, the United States Trade Representative shall
seek to establish the common base year for calculating the Aggregated Measurement of Support (as
defined in the Agreement on Agriculture) as the end of each country's Uruguay Round implementation
period, as reported in each country's Uruguay Round market access schedule.

(iii) The negotiating objective provided in subparagraph (A) applies with respect to agricultural
matters to be addressed in any trade agreement entered into under section 3(a) or (b), including any
trade agreement entered into under section 3(a) or (b) that provides for accession to a trade
agreement to which the United States is already a party, such as the North American Free Trade
Agreement and the United States-Canada Free Trade Agreement.

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(12) DISPUTE SETTLEMENT AND ENFORCEMENT- The principal negotiating objectives of the United States
with respect to dispute settlement and enforcement of trade agreements are--

(A) to seek provisions in trade agreements providing for resolution of disputes between governments
under those trade agreements in an effective, timely, transparent, equitable, and reasoned manner,
requiring determinations based on facts and the principles of the agreements, with the goal of
increasing compliance with the agreements;

(B) to seek to strengthen the capacity of the Trade Policy Review Mechanism of the World Trade
Organization to review compliance with commitments;

(C) to seek provisions encouraging the early identification and settlement of disputes through
consultation;

(D) to seek provisions to encourage the provision of trade-expanding compensation if a party to a
dispute under the agreement does not come into compliance with its obligations under the agreement;

(E) to seek provisions to impose a penalty upon a party to a dispute under the agreement that--

(i) encourages compliance with the obligations of the agreement;

(ii) is appropriate to the parties, nature, subject matter, and scope of the violation; and

(iii) has the aim of not adversely affecting parties or interests not party to the dispute while
maintaining the effectiveness of the enforcement mechanism; and

(F) to seek provisions that treat United States principal negotiating objectives equally with
respect to--

(i) the ability to resort to dispute settlement under the applicable agreement;

(ii) the availability of equivalent dispute settlement procedures; and

(iii) the availability of equivalent remedies.

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(9) preserve the ability of the United States to enforce rigorously its trade laws, including the
antidumping and countervailing duty laws, and avoid agreements which lessen the effectiveness of
domestic and international disciplines on unfair trade, especially dumping and subsidies, in order
to ensure that United States workers, agricultural producers, and firms can compete fully on fair
terms and enjoy the benefits of reciprocal trade concessions;

(10) continue to promote consideration of multilateral environmental agreements and consult with
parties to such agreements regarding the consistency of any such agreement that includes trade
measures with existing environmental exceptions under Article XX of the GATT 1994;

(11) report to the Committee on Ways and Means of the House of Representatives and the Committee on
Finance of the Senate, not later than 12 months after the imposition of a penalty or remedy by the
United States permitted by a trade agreement to which this Act applies, on the effectiveness of the
penalty or remedy applied under United States law in enforcing United States rights under the trade
agreement; and

(12) seek to establish consultative mechanisms among parties to trade agreements to examine the
trade consequences of significant and unanticipated currency movements and to scrutinize whether a
foreign government engaged in a pattern of manipulating its currency to promote a competitive
advantage in international trade.

The report under paragraph (11) shall address whether the penalty or remedy was effective in
changing the behavior of the targeted party and whether the penalty or remedy had any adverse impact
on parties or interests not party to the dispute.

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