Order Code RL32698
CRS Report for Congress
Received through the CRS Web
Trade Legislation in the 108th Congress
Updated December 30, 2004
name redacted
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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Trade Legislation in the 108th Congress
Summary
When the 108th Congress convened in January 2003, few observers predicted
that trade would be a top legislative concern. Congress, just six months earlier, had
passed by a narrow margin the Trade Act of 2002 (P.L. 107-210), the first major
piece of trade legislation in almost a decade. Nevertheless, trade remained a top-
level domestic and foreign policy issue in 2003 and 2004.
The 108th Congress completed work on a number of major trade bills. Most
notably, bills to implement free trade agreements (FTAs) with Chile, Singapore,
Australia, and Morocco, and to enhance trade benefits for the countries of Sub-
Saharan Africa were passed and signed by the President. Legislation repealing an
export tax benefit long ruled a violation of U.S. World Trade Organization (WTO)
obligations passed, thereby moving the European Union closer to ending sanctions
on $4 billion of U.S. exports. In addition, Congress passed a miscellaneous tariff
bill that eliminated or suspended tariffs on hundreds of products and repealed the
1916 Antidumping Act, which also had been ruled a violation of WTO provisions.
The implementing bills for the four FTAs were passed by wide margins,
running contrary to predictions of some observers that Congress was turning
protectionist or anti-trade. All agreements received strong backing from the business
community, but encountered resistance from organized labor. They eventually will
eliminate tariffs on almost all traded goods, cover trade in services, and provide
enhanced protection for intellectual property rights. While the overall effects of any
of the agreements on the U.S. economy are expected to be minimal, each agreement
provides U.S. exporters and investors with additional market openings and
opportunities.
Protection for the U.S. steel industry was a prominent concern of the 108th
Congress. In 2003, many Members supported the steel industry’s efforts to persuade
President Bush to extend the import restraint regime he had imposed in 2002, while
others supported steel-consuming industries’ efforts to roll back the import restraints.
The more globalized U.S. economy contributed to rising concerns in Congress about
whether U.S. companies were increasingly “offshoring” or relocating service sector
jobs to low-wage developing countries, as well as to generalized anxiety about job
losses associated with China’s growing trade prowess and its policy of pegging its
currency to the dollar.
Congress also engaged in an intensive debate generated by growing consumer
interest in purchasing more affordable prescription drugs from abroad. The issue
was addressed in elements of three bills introduced in the Senate and one bill which
passed the House in 2003.
A number of export policy issues were also the subject of legislative activity in
the 108th Congress. While policies that promote exports through financing and
efforts to open foreign markets attracted a limited amount of legislative activity, the
restrictive component of export policy, particularly economic sanctions targeting
Burma, Cuba, and Syria, received more attention. This report will not be updated.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Trade Agreements and WTO Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FTA Implementing Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
WTO Compliance Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
FSC/ETI Export Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1916 Antidumping Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Byrd Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Congressional Support for the WTO . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Import-Related Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Jobs and Import Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
“Offshoring” of Service Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
China Trade Challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Trade and Tariff Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
AGOA Acceleration Act of 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Miscellaneous Tariff Bill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Importing Prescription Drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Export-Related Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Export Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Economic Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Export Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Implications for the 109th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Appendix A. Major Trade Legislation Introduced in the 108th Congress . . . . . . 21
Appendix B. Trade-Related Hearings in the108th Congress . . . . . . . . . . . . . . . . 40
House of Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Senate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
List of Tables
Table 1. Trade Agreements Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 2. WTO Dispute Settlement Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Table 3. Trade and Tariff Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 4. Permanent Normal Trade Relations Status . . . . . . . . . . . . . . . . . . . . . . 26
Table 5. Importing Prescription Drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Table 6. Trade Remedy Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Table 7. Other Issues in Import Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Table 8. China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Table 9. “Offshoring” Service Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Table 10. Export Promotion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Table 11. Trade Sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Table 12. Export Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

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Trade Legislation in the 108th Congress
Introduction
U.S. trade policy encompasses a wide array of government policies and laws
that affect trade negotiations, the world trading system, imports, and exports.
Negotiations to liberalize trade flows are intended to make the U.S. economy more
efficient and productive. The rules of the world trading system are designed to
facilitate trade flows by providing a stable and predictable environment. Policies
affecting imports through the lowering or raising of tariffs or other barriers determine
the relative openness of the U.S. market to goods and services produced abroad.
Export policies both increase and restrict the sales and opportunities of specific
companies and industries.
Trade policies affect jobs, profits, and investment decisions in the United States
and abroad. In the process, some workers and companies gain or lose more than
others, thereby increasing the political stakes embedded in the decisions.
The 108th Congress completed work on a number of major trade bills. Most
notably, bills to implement free trade agreements with Chile, Singapore Australia,
and Morocco and to enhance trade benefits for the countries of Sub-Saharan Africa
were passed and signed by the President. Legislation repealing an export tax benefit
long ruled a violation of U.S. World Trade Organization obligations passed, thereby
moving the EU closer to ending sanctions on $4 billion of U.S. exports. In addition,
Congress passed a miscellaneous tariff bill that eliminated or suspended tariffs on
hundreds of products and repealed the 1916 Antidumping Act which also was ruled
in violation of WTO rules.
This report provides information and analysis of the major trade bills considered
by the 108th Congress in three parts. The first section provides an overview of major
trade legislation acted on in the 108th Congress, including some issues that may be
carried over or taken up in 2005. For purposes of analysis, congressional trade
policymaking is divided into the categories of trade agreements and WTO rules,
import-related legislation, and export-related legislation. This section draws heavily
from CRS reports on the myriad trade issues discussed. Readers who seek a full
discussion of any particular issue are encouraged to consult these CRS reports and
authors cited.
The second section (Appendix A) provides in tabular form a more detailed
breakdown of the majority of trade bills introduced and acted on in the 108th
Congress. The bills are divided into twelve categories: (1) trade agreements, (2)
World Trade Organization dispute settlement issues, (3) trade and tariff preferences,
(4) permanent normal trade relations status, (5) importation of prescription drugs,

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(6) “offshoring” of service jobs, (7) trade remedy laws, (8) China, (9) other issues in
import policy, (10) export promotion, (11) trade sanctions, and (12) export controls.
A list of congressional trade-related hearings is provided in Appendix B. This
section illustrates another dimension of congressional interest in trade issues and the
numerous committees that play a role in oversight.
It can be noted that Congress influences trade policy in a number of ways
beyond the bills that are discussed in this report. The most common are through floor
statements and letters sent to the administration that urge a certain course of action,
as well as through warnings that specific legislation will be introduced to resolve
problems that are not being adequately addressed in negotiations, regulations, or
executive actions. In addition to warning the administration, Congress often sends
messages directly to U.S. trading partners. Some prominent examples of this form
of trade policymaking from the 108th Congress follow:1
! A group of House Republicans, led by House Speaker Hastert, urged
President Bush in a January 29, 2003 letter to initiate a WTO dispute
settlement case against the European Union’s biotechnology
moratorium. On March 5, 2003, Senate Finance Committee
Chairman Charles Grassley expressed his dissatisfaction with the
Administration’s decision to delay initiating the WTO case. On
August 7, 2003, the Bush Administration initiated a WTO dispute
settlement complaint over the moratorium.
! A group of 70 Senators signed a February 4, 2003 letter to President
Bush that strongly supported the continued operation of the
Continued Dumping and Subsidy Offset Act, better known as the
Byrd Amendment, despite an adverse WTO ruling. The letter
subsequently has been cited widely as evidence that congressional
sentiment is broadly anti-repeal.
! House Republicans from textile states met with trade officials from
the Bush Administration on February 7, 2003 in an effort to
persuade the Administration to impose safeguard restrictions on
Chinese apparel imports as soon as possible. In October and
November 2004, the Administration did impose restrictions on
selected apparel items under a special China safeguards provision.
! Nineteen senators in an April 4, 2003 letter urged President Bush to
begin negotiations with New Zealand on the establishment of a free
trade agreement as soon as possible. To date, New Zealand is still
under consideration as a potential free trade partner.
! House Ways and Means Chairman Bill Thomas requested the
International Trade Commission to prepare a report on the Section
201 steel safeguard’s impact on U.S. steel users, along with the
1 Information is gleaned from various editions of Inside U.S. Trade.

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ITC’s mid-term review of the impact of import restraints on the
domestic steel industry. Senate Finance Committee Chairman
Charles Grassley said on April 4, 2003 that he supports the Thomas
request. The report was prepared and its determinations were cited
widely in the 2003 debate over the efficacy of lifting the import
restraints.
! Concurrent resolutions were introduced in the House and Senate in
March 2004 in an effort to convince the Administration to keep auto
tariffs out of the FTA negotiations with Thailand. The negotiations
currently are still in a preliminary stage.
Trade Agreements and WTO Rules
When the 108th Congress convened in January 2003, few observers predicted
that trade would be a top legislative concern. Congress, just six months earlier, had
narrowly passed, in a contentious vote, the Trade Act of 2002 (P.L.107-210), the first
major piece of trade legislation in almost a decade. This comprehensive trade bill
ended eight years of stalemate over whether to re-authorize fast-track authority, now
called trade promotion authority (TPA). Trade promotion authority allows the
President to submit to Congress legislation implementing new trade agreements
under special legislative procedures that limit debate, prohibit amendments, and
require an up or down vote.2 The Trade Act of 2002 also renewed trade preference
programs for Andean and African countries, as well as the U.S. Generalized System
of Preferences.3 In addition, it mandated tighter congressional oversight of trade
negotiations by requiring the president to report all potential trade agreements to
Congress 180 days before they were signed and provide an explanation of why any
changes to existing trade laws would be necessary.4
Contrary to some expectations, trade remained a top-level domestic and foreign
policy issue in 2003 and 2004. Part of the reason is that the Bush Administration used
the TPA to promote an ambitious trade negotiating agenda. By early 2003 the
administration was actively promoting global negotiations in the WTO (the Doha
Agenda), working towards a Free Trade Area of the Americas (FTAA), completing
free trade agreements with Chile and Singapore, and beginning five new sets of FTA
negotiations (Morocco and five Central American countries in January 2003,
Australia in March, five members of the South African customs union in June, and
Bahrain in August), and proposing a regional trade strategy to deepen U.S. trade and
economic relationships in Southeast Asia and the Middle East.5
2 CRS Report RL31844, Trade Promotion Authority (Fast-Track Authority for Trade
Agreements): Background and Developments in the 107th Congress, by (name redacted).
3 CRS Report 97-389, Generalized System of Preferences, by (name redacted).
4 CRS Report RL31974, Trade Agreements: Requirements for Presidential Consultations,
Notices, and Reports to Congress Regarding Negotiations, by (name redacted).
5 CRS Issue Brief IB10123, Trade Negotiations in the 108th Congress, by (name redacted)
and (name redacted).

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CRS-4
The Administration’s strategy of pursuing multiple trade initiatives, dubbed
“competitive liberalization,” holds that simultaneous multilateral, regional, and
bilateral trade negotiations reinforce and catalyze one another. However, when the
Doha Round of the World Trade Organization stalled at Cancun in September 20036
and the regional Free Trade Area of the Americas incurred a comparable fate at the
November 2003 Summit of the Americas in Miami 7, much of the Administration’s
attention turned towards completing ongoing FTAs and initiating new ones with
three Andean countries (Colombia, Ecuador, and Peru), the Dominican Republic,
Panama, and Thailand.8
While Congress supported the Administration’s overall competitive
liberalization strategy, a few Members did question the choice of FTA partners on
the grounds that commercial considerations were being given short shrift. Senator
Max Baucus, Ranking Senate Finance Committee member, for example, reportedly
publically maintained that the Administration’s strategy of picking FTA partners is
“mostly motivated by abstract foreign policy concerns” rather than pursuing the
greatest market opportunities.9
FTA Implementing Legislation
Possible criticism of the choice of FTA partners notwithstanding, the 108th
Congress approved implementing legislation for all four FTAs the Administration
sent to Capital Hill for consideration: for the Chile and Singapore FTA’s in July
2003;10 for the Moroccan FTA in July 2004; and for the Australian FTA in August
2004.11
The implementing bills were passed by wide margins, running contrary to
predictions of some observers that Congress was turning protectionist or anti-trade.12
6 CRS Report RL32060, World Trade Organization Negotiations: The Doha Development
Agenda, by (name redacted).
7 CRS Report RL20864, A Free Trade Area of the Americas: Status of Negotiations and
Major Policy Issues, by (name redacted).
8 CRS Report RL32540, The Proposed U.S.-Panama Free Trade Agreement, by (nam
e redacted), and CRS Report RL32314, U.S.-Thailand Free Trade Negotiations, by (name r
edacted) and (name redacted).
9 Inside U.S. Trade, “Baucus Says Business Afraid to Criticize USTR FTA Strategy,” July
16, 2004.
10 CRS Report RL31144, The U.S.-Chile Free Trade Agreement: Economic and Trade
Policy Issues, by (name redacted), and CRS Report RL31789, The U.S.-Singapore Free Trade
Agreement, by (name redacted).
11 CRS Report RS21464, Morocco-U.S. Free Trade Agreement, by (name redacted), and
CRS Report RL32375, The U.S.-Australia Free Trade Agreement: Provisions and
Implications, by (name redacted).
12 The House passed the U.S.-Chile Implementation Act by a vote of 270-156, the U.S.-
Singapore Free Trade Implementation Act by a vote of 272-155, the Moroccan Free Trade
Implementation Act by a vote of 323-99, and the Australian Free Trade Implementation Act
by a vote of 314-109. Senate votes on these agreements were respectively 66-31, 66-32, 85-

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All four agreements received strong backing from the business community, but not
from organized labor. The FTAs eventually will eliminate tariffs on almost all
traded goods, liberalize trade in services, and provide enhanced protection for
intellectual property rights. While the overall effects of any of the agreements on the
U.S. economy are expected to be minimal, each agreement provides U.S. exporters
and investors with additional market openings and opportunities.13
These FTAs are also significant because they are the first agreements considered
by Congress under the fast-track procedures authorized in the Trade Act of 2002.
Other precedents include the fact that the Chile FTA was the first such agreement
with a South American country; Singapore was the first such agreement with an
Asian country; the Australian agreement was the first FTA between the United States
and a developed country since the U.S.-Canada Free Trade Agreement in 1988; and
the Morocco FTA forms part of the Administration’s long-term effort to establish
a Middle East Free Trade Area.
Extant opposition and controversy to the FTAs was concentrated mostly on
labor and immigration issues in the case of Chile and Singapore, and on agricultural
and pharmaceutical trade issues in the case of Australia. The labor provisions
contained in the Chile and Singapore agreements were criticized by some Members
(mostly House Democrats) on the grounds that basic worker rights obligations such
as freedom of association, the right to form unions and bargain collectively, and
limitations on child labor were not subject to as rigorous a dispute settlement process
as was provided in the U.S.-Jordan FTA.14
While the salience of the treatment of labor rights in the Chile and Singapore
FTAs may have been tempered by these countries’ relatively strong labor rights laws
and records, the issue is likely to be much more divisive in congressional
consideration of the U.S.-Central American FTA (CAFTA), which the
Administration concluded in December 2003. CAFTA reportedly is opposed by
many more Members, some of whom say it does not go far enough in promoting
stronger labor laws and enforcement in the region. Faced also with opposition from
sugar and textile interests, the Bush Administration decided not to send
implementing legislation to Congress this year, but a battle over the implementation
legislation can be expected in the 109th Congress.15
Immigration provisions were also controversial in the Chile and Singapore
FTAs. Both agreements created separate categories of entry for citizens of each
country to engage in a wide range of business and investment activities on a
temporary basis, that is, as non-immigrants. These FTA provisions on the temporary
13, and 80-16.
13 CRS Report RL31356, Free Trade Agreements: Impact on U.S. Trade and Implications
for U.S. Trade Policy, by (name redacted).
14 CRS Report RS20968, Jordan-U.S. Free Trade Agreement: Labor Issues, by (name red
acted).
15 CRS Report RL31870, The U.S.-Central America Free Trade Agreement (CAFTA):
Challenges for Sub-Regional Integration, by (name redacted).

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CRS-6
entry of business personnel and professional workers raised concerns among many
in Congress, who have jurisdiction over immigration, that the USTR negotiated these
provisions without any authority or direction from Congress. The Bush
Administration countered that the temporary entry of professionals falls within TPA
objectives regarding the opening of foreign country markets for U.S. services and
investment, in particular reduction or elimination of barriers that restrict the
operations of service suppliers or the establishment or operations of investments.16
Agricultural issues were among the most difficult issues in the consideration
of the Australian FTA. In the end each side acceded to very sensitive demands of the
other in order to bring the negotiations to a close. This meant that Australia acceded
to the U.S. objective not to liberalize trade in sugar and to only a gradual opening of
dairy and beef, while the U.S. acceded to Australia’s position on maintaining
monopolies for the export of wheat, barley, and rice.17 A number of Members of
Congress, however, were highly critical of the sugar exclusion, arguing that the
exclusion of any product or industry should not be repeated in future FTAs.18
Trade and the health care policies of foreign trading partners became an issue
for the first time in the negotiation of the Australian FTA. During these negotiations,
the United States complained that the way the Australian government subsidizes the
costs for pharmaceuticals may disadvantage a number of newer, innovative drugs
produced in the United States. The issue exposed fundamental differences between
the U.S. and Australian healthcare systems and how each treats costs of
pharmaceutical products borne by their citizens.19 In congressional consideration of
the agreement, this issue was widely debated, perhaps foreshadowing U.S. trade
policy efforts to confront foreign price controls on pharmaceutical products.
WTO Compliance Legislation
As an international organization intended to ensure that trade between countries
flows more easily, predictably, and freely, the World Trade Organization (WTO)
serves as a forum for international trade negotiations and the settlement of disputes.
The Dispute Settlement Understanding or DSU provides the procedures to settle
disputes and is key to the enforcement of U.S. rights under the WTO.20
16 CRS Report RL30498, Immigration: Legislative Issues on Nonimmigrant Professional
Specialty (H-1B) Workers, by Ruth Ellen Wassem.
17 CRS Report RL32375, The U.S.-Australia Free Trade Agreement: Provisions and
Implications, by (name redacted), and CRSebagr78,
Agriculture in the Australia-U.S.
Free Trade Agreement, by (name redacted).
18 The House Report (108-597) on the U.S.-Australian Free Trade Agreement provides that
the “Committee [Ways and Means] notes with particular disappointment the exclusion of
sugar liberalization in the FTA and expects that this omission will not be reflected in future
FTAs brought before the Committee.”
19 CRS Report RL32375, by (name redacted).
20 CRS Report 98-928, The World Trade Organization: Background and Issues, by (name
redacted).

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Since the DSU became effective in 1995, the United States has been heavily
involved as both a complainant and defendant in slightly more than half of the 300-
plus cases filed. As a complainant, the U.S. has used the DSU to ensure that U.S.
exporters receive open access and fair treatment in foreign markets. As a defendant,
some U.S. practices or laws have been found to be inconsistent with our WTO
obligations. A WTO Member found to have enacted an inconsistent measure is
expected to bring its laws into compliance promptly, but is also granted a reasonable
period of time to do so if immediate action is impracticable. While the member
country is usually expected to withdraw the offending measure, compensation and
temporary retaliation are available to the prevailing party as alternative remedies if
the member has not complied by the established deadline.21
Although the United States has complied with adverse rulings in several past
WTO disputes, there are some outstanding cases in which WTO rulings have not yet
been implemented. Among these cases, the 108th Congress inherited several disputes
where compliance required legislative action. The most prominent cases involved
a U.S. export tax benefit, the Extraterritorial Income Tax Exclusion (ETI), and its
predecessor — the Foreign Sales Corporation (FSC); the 1916 Antidumping Act; and
the Continued Dumping and Subsidy Offset Act of 2002 (CDSOA), also known as
the Byrd Amendment.22
FSC/ETI Export Benefit. The U.S. tax code’s Foreign Sales Corporation
(FSC) provisions provided a tax benefit for U.S. exporters. But in 1997 the European
Union (EU) filed a complaint before the WTO that the provision was an unacceptable
export subsidy. The WTO upheld the complaint, and to avoid retaliatory tariffs,
Congress in 2000 replaced the FSC with a new export benefit, the “extraterritorial
income” (ETI) provisions. The EU again complained to the WTO that the ETI benefit
was also an export subsidy, and the WTO again backed the EU charge. While the
EU indicated it would not impose retaliatory tariffs as long as the Congress was
making progress on achieving WTO compliance, it began imposing punitive tariffs
on $4 billion of U.S. exports, beginning at 5%, on March 1, 2004 and increasing by
1 percentage point each month thereafter.23
After considering repeal legislation for more than two years, the Congress
replaced the export subsidy with an assortment of new corporate tax breaks that may
be acceptable under WTO rules. The House and Senate approved a conference
agreement on the legislation in October 2004 (P.L.108-357).24 As a result of the
repeal, the EU is expected to lift the sanctions effective January 1, 2005 although its
21 CRS Report RS21763, WTO Dispute Settlement: Stages and Pending U.S. Activity Before
the Dispute Settlement Body, by (name redacted).
22 CRS Report RL32014, WTO Dispute Settlement: Status of Compliance in Pending Cases,
by (name redacted).
23 CRS Report RS20746, Export Tax Benefits and the WTO: The Extraterritorial Income
Exclusion and Foreign Sales Corporations, by David L. Brumbaugh, and CRS Report
RS21742, European Trade Retaliation: The FSC-ETI Case, by (name redacted).
24 CRS Report RL32652, The 2004 Corporate Tax and FSC/ETI Bill: The American Jobs
Creation Act of 2004, by David L. Brumbaugh.

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trade officials have complained to the WTO that the statute’s grandfathering
provisions may be WTO violations.
1916 Antidumping Act. The 1916 Antidumping Act allows U.S. parties to
sue foreign producers or importers in federal court if they dump their products with
the intent to injure a U.S. producer, and awards treble damages in successful cases.
While this statute has been seldom used, suits were brought against European and
Japanese steel producers in the 1990s. Subsequently, the EU and Japan challenged
the law in the DSU. In 2002, the DSU determined that the law violated U.S. WTO
obligations because it provided remedies for dumping in excess of the antidumping
duties and other price measures that are permitted under the WTO’s Antidumping
Agreement.25
In response to this ruling, the conference report of the miscellaneous tariff bill
included a provision that repeals the 1916 Antidumping Act prospectively. The
legislation, however, does not appear to affect pending cases filed under the law. It
is, thus, uncertain whether this form of repeal will end all WTO litigation on the
statute, particularly due to Japan’s continuing insistence that the repeal end all current
court proceedings.26
Byrd Amendment. The third high profile compliance case involved the Byrd
Amendment, which requires annual disbursement of antidumping and countervailing
duties to petitioners and interested parties (instead of to the U.S. Treasury) in the
underlying trade remedy proceedings. A WTO panel in 2002 ruled that the CDSOA
violates WTO obligations, in part because it provides an extra protection to industries
already benefitting from imposition of dumping and countervailing duty orders.
When Congress did not comply with eliminating or changing the act to conform
to WTO obligations by the year-end 2003 deadline, a WTO arbitrator was appointed
and in August 2004 ruled that eight complaining countries could impose retaliatory
duties on U.S. exports in a given amount. The WTO on November 26, 2004
authorized seven of the countries to retaliate, but no restrictions on U.S. exports have
been imposed to date.
Unlike the ETI case, there does not appear to be a congressional consensus in
favor of repeal. While the Bush Administration proposed repeal of the CDSOA in
its FY2004 and FY2005 budgets and repeal legislation was introduced in 108th
Congress, predominant congressional sentiment appears to be against repeal. For
example, 70 Senators in 2003 wrote President Bush urging negotiations with U.S.
trading partners aimed at recognizing a right to disburse antidumping and
countervailing duties in the manner prescribed by the statute “prior to any attempt to
change our laws.” In addition, the Consolidated Appropriations Act of 2004
(P.L.108-199), included a directive to the United States Trade Representative to
initiate WTO negotiations aimed at allowing such disbursements. The United States
25 CRS Report RL32014, pp. 15-19.
26 Inside U.S. Trade, “Japan Insists 1916 Repeal Must End Pending Cases, Quiet on
Retaliation,” October 22, 2004.

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CRS-9
submitted such a proposal as part of the Doha Round of negotiations on April 26,
2004.27
Congressional Support for the WTO. The ETI and CDSOA disputes
illustrate tension in congressional views towards the WTO. Some Members of
Congress have charged that some of the WTO dispute settlement rulings infringe on
U.S. sovereignty by undermining domestic tax and trade remedy laws. Bush
Administration trade officials have expressed concerns that some of the panel rulings
go too far in determining how WTO members should comply with adverse rulings.
Others believe that the U.S. should not implement the adverse rulings until the EU
fully lifts its moratorium on biotechnology approvals.
Supporters of the WTO dispute resolution process argue that the United States
was the chief proponent of creating a stronger and more binding dispute settlement
process. They also claim that the system works in keeping markets open to U.S.
exports, and that complaints only arise when the system chips away at some of the
vestiges of U.S. protection. Were the United States or other leading WTO members
to ignore WTO findings, they argue that the dispute resolution process could be
severely weakened.
Congress’ mixed views on the WTO could affect consideration of a resolution
withdrawing the United States from the Agreement establishing the World Trade
Organization. Section 125 of the Uruguay Round Agreements Act (the law that
implemented changes negotiated in the last round of multilateral trade negotiations)
permits any Member of Congress to introduce such a resolution within 90 days after
the Administration submits a report analyzing the costs and benefits of U.S.
participation in the WTO. By statute the Administration is required to submit this
report to Congress by March 1, 2005. While such a resolution may not attract
majority support in either house, it could serve as a focal point for debate on
outstanding bilateral trade disputes that are being settled under the aegis of the WTO.
Import-Related Legislation
U.S. policies affecting imports tend to be shaped largely by a mixture of
economic principles and practical political considerations. Unanticipated events and
broader foreign policy considerations also serve to influence the development of
specific policies from year to year.28
The case for maintaining a relatively open market for the purchase of foreign
goods and services rests on the view that imports provide multiple economic benefits.
For consumers, imports provide goods that are often available at lower prices or
simply not produced in the United States. Foreign goods also can benefit U.S.
27 CRS Report RL32014, WTO Dispute Settlement: Status of U.S. Compliance in Pending
Cases, by (name redacted).
28 For full discussion, see Cohen, Stephen D., Joel R. Paul, and Robert A. Becker.
Fundamentals of U.S. Foreign Trade Policy. Westview Press, 2003.

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CRS-10
companies by providing needed inputs at lower prices and by encouraging cost-
cutting and innovation.29
Decisions to deviate from the economic rationale for maintaining relatively
open policies towards imports usually rest on practical political considerations.
Although consumers and many producers benefit from having access to imported
goods and services, some workers can lose their jobs and some companies can go out
of business due to rapid increases in imports that compete head-to-head with
domestic production. To address displacement, international as well as domestic
rules have been established to provide temporary relief to those hurt or injured by
import competition. These rules also stipulate various measures or barriers
governments may employ, depending in large part on whether the import competition
being curbed is considered “fair” or “unfair.”30
U.S. government policies that affect the relative receptivity or openness of the
U.S. market to imports are also affected from year to year by unanticipated events.
The large and growing U.S. merchandise trade deficit, for example, may increase
demands for protection from import competition as the number of companies and
workers hurt by imports increases relative to those helped by exports. When the
increase in the trade deficit is being accounted for disproportionately by one country,
much more scrutiny is likely to be given to that country’s trading practices.31
Foreign policy objectives can also affect import policies. Efforts, for example,
to forge closer economic and political ties with specific regions or countries can lead
to more open or less restrictive policies via the extension of preferential access to the
U.S. market.
Congressional actions in 2003 and 2004 reflected the interaction of these cross-
cutting pressures in five legislative categories: (1) protection of American workers
and industry from import competition; (2) offshoring or outsourcing of service jobs;
(3) trade with China, (4) extension of tariff preferences generally, as well as for
specific regions/countries, and (5) importation of prescription drugs.
Jobs and Import Competition
As trade’s share of U.S. production (exports and imports of goods and services
as a percent of GDP) has risen from around 9% in the early 1960s to around 24%
today, more firms, communities, and workers benefit as well as are hurt by trade.
Because the benefits of trade are diffused across the economy and the costs are
concentrated and localized, groups hurt by trade are often much more concerned and
active about the development of U.S. trade policies. As a result, numerous Members
of Congress are often under intense pressure to respond to demands for protection
29 CRS Report RL32059, Trade, Trade Barriers, and Trade Deficits: Implications for U.S.
Economic Welfare, by (name redacted).
30 CRS Report RL32371, Trade Remedies: A Primer, by (name redacted).
31 CRS Report RL31032, The U.S. Trade Deficit: Causes, Consequences, and Cures, by
Craig Elwell.

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CRS-11
from import competition as the number of companies and workers hurt by imports
increases.
Protection for the U.S. steel industry was a prominent concern of many members
of Congress in the 108th Congress. Many Members in 2003 actively supported the
steel industry’s efforts to persuade President Bush to extend the import restraint
regime he had imposed in March 2002, while others supported steel-consuming
industries’ efforts to roll back the import restraints.32 A large number of Members
also worked to insure that U.S. anti-dumping and countervailing duty laws are not
weakened in the on-going Doha multilateral negotiations. At a time of increasing
competition, a rising trade deficit, and greater openness to foreign products than ever
before, such trade remedy tariffs are viewed by some as the only viable form of
protection for U.S. domestically-based producers. While not acted on, several bills
designed to strengthen these laws were introduced.33
Other industries such as sugar, beef, and dairy lobbied Congress for exclusion
from various FTAs the Administration was negotiating. While some of these
industries were successful, a number of Members actively lobbied the Administration
to adopt a policy of no product or industry exclusions in FTAs.
The textile and apparel and steel industries backed efforts in the House to
strengthen and expand both the “Buy American” and “Berry” provisions in the
FY2004 and 2005 Department of Defense (DOD) authorization and appropriations
bills. The Buy American Act is the major domestic preference statute governing
procurement by the federal government by providing a preference for American
goods in government purchases. The Berry Amendment is a more specific Buy
American-type provision that requires the DOD to give preference to domestically
produced, manufactured, or home grown products, notably food, clothing, fabrics,
and speciality metals.34
In the 108th Congress, Representative Duncan Hunter, Chairman of the House
Armed Services Committee sought to expand the scope of Buy America and establish
reciprocity in defense trade, especially by restricting the practice of off-sets. The
Bush Administration, large defense contractors and key members of the Senate
Armed Services Committee opposed the House effort to expand these provisions, and
for the most part, were successful.35
With the elimination of global quotas on textile and apparel products beginning
in January 2005, U.S. producers, workers, and retailers are expecting a flood of
32 CRS Report RL31748, The American Steel Industry: A Changing Profile, by Stephen
Cooney.
33 CRS Report RL30461, Trade Remedy Law Reform in the 108th Congress, by (name reda
cted).
34 CRS Report 97 — 765A, The Buy American Act: Requiring Government Procurements
to Come from Domestic Sources, by John Luckey.
35 CRS Report RL31236, The Berry Amendment: Requiring Defense Procurement To Come
From Domestic Sources, by (name redacted).

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CRS-12
imports, especially from China. Many Members of Congress are expected to urge
the Bush Administration to impose import restraints in order to ensure a less
disruptive adjustment process. Other legislative proposals are also likely to be
considered.36
Legislation dealing with more prescriptive country-of-origin labeling
requirements for certain food products was also considered in the 108th Congress.
The House Agriculture Committee approved on July 21, 2004 a bill (H.R. 4576) to
make country-of-origin labeling (COOL) requirements for certain food products
voluntary. Previous legislation (the 2002 farm bill as modified by FY2004
agricultural appropriation bill (P.L. 108-199) had established a mandatory labeling
program for fresh produce, red meats, and peanuts starting September 30, 2006 and
for seafood starting September 30, 2004. The 108th Congress adjourned without
change in this position. Some lawmakers support a mandatory program as a health
and safety issue and others counter that COOL is a marketing issue and should be
voluntary.37
“Offshoring” of Service Jobs
A new wrinkle brought about by globalization was growing alarm about whether
U.S. multinationals were increasingly “offshoring” or relocating service sector jobs
to low-wage countries such as India and China. The Economic Report of the
President, released by the Council of Economic Advisors in February 2004, set off
a heated debate by calling “offshoring” a “good thing for the economy in the long
run.” The report added that “offshoring” was just a new way of doing international
trade as the information and communications revolution enables companies to out-
source a wider array of services, ranging from routine call center work to higher-
value software programming, medical diagnosis, and research and analytical
activities.
Many Members of Congress, anxious that “offshoring” might lead to a
reduction in U.S. output and a corresponding loss of jobs amidst an economic
recovery with unusually low job creation, were openly critical of the report. Some
responded by offering amendments that would prohibit government agencies from
outsourcing work abroad. Some called for an examination of the U.S. tax code to
determine if U.S. tax policy encourages “offshoring.” Others called for improving
the data the government collects on “offshoring” so that policymakers can obtain a
more accurate understanding of this phenomenon. Still other proposals addressed the
dislocation faced by workers in the services sector through amendments to Trade
Adjustment Assistance Program that would give service workers such as software
programmers the same extended unemployment insurance and retraining benefits
established for trade-impacted manufacturing workers.38
36 CRS Report RS20889, Textile and Apparel Quota Phaseout: Some Economic
Implications, by (name redacted).
37 CRS Report 97-508, Country-of-Origin Labeling for Foods, by (name redacted).
38 CRS Report RL32292, Offshoring (a.k.a. Offshore Outsourcing) and Job Insecurity
Among U.S. Workers, by (name redacted).

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CRS-13
While much of the debate about outsourcing died down after the presidential
primary season ended, the flurry of concern does point up underlying anxiety about
globalization’s impact on jobs, particularly during a 3-4 year period where the
economy has lost an estimated 2.4 million manufacturing jobs.39
China Trade Challenge
Anxiety about job losses to foreign competitors also focused substantially on
China. Public and congressional concerns, prompted in part by a large and growing
bilateral trade deficit, pointed directly to China’s increasing ability to manufacture
an array of products that could displace U.S. workers in industries ranging from
textiles and apparel to auto parts and advanced technology goods. In response,
several bills were introduced to pressure China to eliminate the pegging of its
currency to the dollar — a policy deemed by many as currency manipulation
designed, in part, to keep China’s exports valued at artificially low prices.40 In
addition, many Members pressured the Administration to take strong action enforcing
trade remedy laws in the area of textiles and apparel. With the scheduled lifting of
all import quotas on textiles and apparel on January 1, 2005, U.S. companies and
labor unions representing textile and apparel workers have been petitioning the
Administration to provide import protection before disruption occurs.41 While the
Administration has imposed some safeguards on certain textile products, it is under
pressure from some in Congress to do more. Many analysts have predicted that
China could capture as much as 70 percent of the American textile and apparel
market over the next two years.42
Taking a harder line towards China, however, may endanger other U.S. interests.
U.S. exports to China are also rising sharply, making China the sixth largest export
market for U.S. products. A sizeable portion of U.S. imports from China (some
estimates are as high as 40%) also are accounted for by U.S. companies that are
producing in China. In addition, China’s central bank helps finance the U.S. trade
deficit by investing its growing reserves of U.S. dollars in U.S. government
securities. This puts U.S. policymakers in the difficult position of pressuring a
country that has become an important source of capital for the U.S. economy.43
Trade and Tariff Preferences
The 108th Congress acted on a number of proposals to change U.S. trade and
tariff preferences for certain countries and products. Measures that extend and
39 CRS Report RS21883, Outsourcing and Insourcing Jobs in the U.S. Economy: An
Overview of Evidence Based on Foreign Investment Data, by (name redacted).
40 CRS Report RS21625, China’s Currency Peg: A Summary of the Economic Issues, by
(name redacted) and (name redacted).
41 CRS Report RL32168, Safeguards on Textile and Apparel Imports from China, by (name
redacted).
42 CRS Report RL31723, Textile and Apparel Trade Issues, by (name redacted).
43 CRS Issue Brief IB91121, China-U.S. Trade Issues, by (name redacted).

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CRS-14
enlarge tariff preferences for a number of sub-Saharan African countries, that
temporarily suspend duties on several hundred products, and that extend normal trade
relations status to Laos and Armenia were approved. In addition, legislation that
would establish tariff preferences for various Middle Eastern countries and for Haiti
was considered.44
AGOA Acceleration Act of 2004. Legislation to amend the African
Growth and Opportunity Act (AGOA) of 2000 (Title I, P.L. 106-200) passed the
House and Senate in June 2004 and was signed by President Bush on July 13, 2004
(P.L. 108-274). AGOA seeks to spur economic development and help integrate
Africa into the world trading system by granting trade preferences (duty-free and
quota free access to the U.S. market for selective products) and other benefits (such
as technical assistance) to Sub-Saharan African countries that meet certain criteria
relating to market reform and human rights. The AGOA Acceleration Act of 2004
extends the AGOA program to 2015, as well as amends several existing provisions
in order to spur investment in beneficiary countries.45
By extending the preference program to 2015, supporters hope to expand gains
for the beneficiary countries (37 of the 48 Sub-Saharan countries are currently
eligible for benefits) by improving the stability of the investment climate in Africa.
The AGOA Acceleration Act of 2004 also extends to 2007 a rule allowing
beneficiary lesser developed countries to receive preferential treatment on apparel
exports regardless of the country of origin of the fabric and yarn, and seeks to
improve African agricultural market access to the United States by providing
assistance to African countries to enable them to meet U.S. technical agricultural
standards. Support for approval was spearheaded by a number of Members of
Congress, a coalition of business groups, religious groups and a number of non-
governmental organizations focused on poverty reduction.
Miscellaneous Tariff Bill. Since about 1981, each Congress has considered
a miscellaneous tariff suspension and technical corrections bill designed to grant
temporary duty reductions on certain products, and to make technical corrections to
certain trade laws. Products deemed eligible by the relevant congressional
committees for duty suspension or reduction in this manner are generally non-
controversial (roughly 90% are chemicals) because they are not produced in the
United States, or are produced overseas by a U.S. multinational corporation and are
imported into the United States by a corporation for its own domestic use.
Congressional rationale for gaining these reductions is that (1) they enable U.S.
manufacturers to reduce costs thus making the downstream production industries
more competitive, (2) they do not jeopardize any domestic manufacturer and (3) they
44 CRS Report RL32638, Middle East Free Trade Area: Progress Report, by (name red
acted), and CRS Report RS21839, Haitian Textile Industry: Impact of Proposed Trade
Assistance, by (name redacted).
45 CRS Report RS21772, AGOA III: Amendment to the African Growth and Opportunity Act,
by (name redacted).

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CRS-15
do not represent a substantial loss of tariff revenue (duty suspension bills are targeted
to cost $5,000,000 or less for each year they are in force).46
The 108th Congress approved a miscellaneous tariff act(P.L. 108-429) in a
November 2004 post-election session. The bill (H.R. 1047) had been held up in 2003
by opposition from one Senator concerned about textiles trade and in 2004 by two
Senators opposed to providing Laos with permanent normal trading relations status.
The act temporarily reduces or eliminates duties on approximately 400 products,
mainly chemicals, and grants normal trade relations status to Armenia and Laos. For
Laos, the change will reduce tariffs on its exports to the United States from an
average level of 45% to roughly 2.5%.47 The act also provides additional textile trade
benefits to Mauritius and includes a provision repealing the 1916 Antidumping Act.
Importing Prescription Drugs
The 108th Congress engaged in an intense debate generated by rising prices for
prescription drugs. As prices have risen, so too has consumer interest in purchasing
more affordable medications from abroad where prices are estimated to be anywhere
from 35% -55% lower. These price disparities have encouraged U.S. consumers —
two million by one Canadian estimate - , as well as growing numbers of state and
local governments, to attempt to import comparable medications from abroad to
realize savings.48
However, under current law, only the manufacturer of a prescription drug may
legally bring it into the United States. U.S. pharmacists and wholesalers are only
allowed to do so if the Secretary of Health and Human Services (HHS) first certifies
that those drugs would be safe and that the program significantly reduced drug costs
to U.S. consumers. Because, at this writing, HHS has never taken this step,
consumers, pharmacists, and wholesalers are prohibited from importing prescription
drugs.49
This issue was addressed in elements of three bills introduced in the Senate and
one bill which passed the House in 2003 (H.R. 2427). All four would allow
46 CRS Report RS21406, Tariff Modifications: Miscellaneous Duty Suspension Bills, by
(name redacted).
47 CRS Report 96-663, Country Applicability of the U.S. Normal Trade Relations (Most
Favored Nation) Status, by (name redacted), and CRS Report RS20931,
Laos:
Background and U.S. Relations, by (name redacted).
48 CRS Report RL32511, Importing Prescription Drugs: Objectives, Options, and Outlook,
by (name redacted) and (name redacted). See also CRS Report RL32191,
Prescription Drug
Importation and Internet Sales: An Overview, by (name redacted).
49 CRS Report RL32271, Importation of Prescription Drugs Provisions in P.L. 108-173, the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003, by (name redacted)
and (name redacted).

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CRS-16
commercial and personal-use imports and replace the need for certification by the
HHS Secretary with different ways to ensure safety and effectiveness.50
The Bush Administration has generally opposed the legislation, asserting that
it cannot vouch for the safety and effectiveness of imported drugs that come from
unregistered and uninspected facilities in foreign countries. The administration has
also asserted that allowing drug imports, at least in the case of Canada, would do
little to solve the underlying problem. This is not only because Canada does not have
enough drugs to supply the U.S. market, but also because U.S. drug companies would
probably respond to such a move by reducing shipments to Canada for importation
to the United States. At the same time, President Bush stated in October 2004 in the
second presidential debate that his administration was carefully studying the issues
to see if the government could ensure the safety of imported drugs in other ways.
Export-Related Legislation
U.S. export policy usually entails a contradictory mix of policies that both
promotes as well as restricts exports. Export promotion efforts are touted on the
basis of their contribution to job creation and a healthy economy. Export promotion
advocates commonly emphasize the number of jobs associated with the production
of goods for export and that they tend to be higher-wage and higher-skilled jobs than
average. The United States tends to promote or expand exports through the provision
of subsidized trade financing, insurance, and guarantees to potential customers of
U.S. goods, through efforts to reduce trade barriers that restrict access of U.S. exports
to foreign markets, and through provision of trade information and counseling.
In contrast to export promotion efforts, a variety of sanctions, restrictions, and
controls are placed on U.S. exports to achieve a wide variety of foreign policy and
national security goals. The basic framework for restricting or controlling most
commercial dual-use exports is the Export Administration Act (EAA) of 1979. The
EAA has been employed to control goods and technology whose sales and use abroad
could be detrimental to U.S. national security. In addition, trade and other economic
sanctions have been used to promote the protection of human rights, and to punish
certain countries for objectionable behavior (for example, state-sponsored terrorism,
military aggression, and proliferation). Exporters whose economic interests are
adversely affected by the imposition of export controls or trade sanctions have
repeatedly attempted to lessen their utilization as a policy option, particularly where
the controls or sanctions are imposed unilaterally. Export controls, while
disproportionately affecting some sectors, account for 1-2% of U.S. exports.
Some of these export policy issues were the subject of legislative activity in the
108th Congress. U.S. export promotion efforts attracted a limited amount of
legislation in the areas of export financing and market access. The restrictive
component of export policy was the subject of considerably more legislative activity,
50 CRS Report RL32568, Senate Prescription Drug Importation Legislation: A Side-by-Side
Comparison of Current Law, S. 2307, S. 2328, and S. 2493, by (name redacted) and (name re
dacted).

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particularly regarding economic sanctions and the countries of Belarus, Burma, Cuba,
and Syria.
Export Promotion
Currently, over a dozen federal agencies promote U.S. exports directly or
indirectly. The U.S. Department of Agriculture and the Export-Import Bank are the
main agencies promoting U.S. exports through the provision of subsidized financing,
insurance, and guarantees. Other agencies such as the Overseas Private Investment
Corporation (OPIC), the Department of Commerce, and the Trade and Development
Agency undertake activities that can indirectly facilitate U.S. exports. By providing
financing, investment insurance and other services for U.S. investors in 144
developing countries, OPIC can help promote economic growth that stimulates
demand for U.S. exports. The Office of the U.S. Trade Representative by negotiating
reductions in foreign trade barriers also has the capacity to indirectly facilitate U.S.
exports.
Recently, these activities have not been controversial, although some Members
of Congress argue that funding for export promotion activities represent corporate
welfare and should be cut back or abolished. Nevertheless, Congress approved
FY2005 requests from the Bush Administration for increases in federal spending on
export promotion and extended the operating authority of OPIC through FY2007
(P.L. 108-158). Several bills designed to help trade officials negotiate better access
to foreign markets were introduced; none were acted on.
Economic Sanctions
The objective of expanding U.S. exports collides with a variety of sanctions,
restrictions, and controls placed on U.S. exports. As in the past, the use of trade to
promote foreign policy objectives was an important part of congressional activity in
2003 and 2004. Unilateral trade sanctions were one tool utilized in legislation that
became law to deal with oppressive or rogue regimes in Burma, Syria and Belarus.
A trade-financing sanction imposed against Libya was lifted and numerous
provisions affecting U.S. trade sanctions towards Cuba were the subject of
considerable congressional activity.
In May 2003, Congress reacted to the Burmese junta’s crackdown on democratic
opposition by passing the Burmese Freedom and Democracy Act of 2003 (P.L. 108-
61). The act bans imports from Burma and affects mainly textiles and garments. The
ban is to remain in effect until the President certifies to Congress that the Burmese
government has made major progress in ending human rights violations and in taking
steps towards the establishment of a more democratic government.51
In the fall of 2003, Congress passed the Syria Accountability Act and Lebanese
Sovereignty Restoration Act (P.L. 108-175). The act imposes additional sanctions
51 CRS Report RS20749, Burma-U.S. Relations, by Larry Niksch. The Burmese Freedom
and Democracy Act of 2003 was extended by the 108th Congress with enactment of H.J.Res.
97 as P.L. 108-272.

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CRS-18
against Syria unless it halts support for terrorism and international terrorist groups,
among other activities. On May 11, 2004, President Bush implemented the
provisions of P.L. 108-175 by banning the export of military and dual use items, the
export of all items except food and medicines, and Syrian aircraft landing or
overflight rights in the United States. However, Libya remains on the terrorist list
pursuant to sec. 6(j) of the Export Administration Act of 1979.52
Congressional concerns about human rights abuses in Belarus culminated in the
passage of sanctions legislation in the fall of 2004. The Belarus Democracy Act,
which became law (P.L.108-347) on October 20, 2004, mandates a variety of
sanctions on Belarus. These include prohibitions on strategic exports, financial
assistance, and a sense of the Congress that the United States should oppose
multilateral assistance to Belarus. These restrictions are to remain in place until
Belarus meets specific democratic and human rights criteria.53
Due to the thaw in U.S.-Libya relations brought about by Libya’s renunciation
of weapons of mass destruction and payment to families who lost relatives in the
downing of Pan Am 103, some U.S. sanctions have been relaxed. The Consolidated
Appropriations Act of 2005 (P.L. 108-447) authorized the president to lift the ban
on Export-Import Bank financing of U.S. exports to Libya. The act left in place the
current ban on OPIC activities in Libya.54
Since the early 1960s, U.S. policy toward Cuba has consisted largely of isolating
this communist state through comprehensive economic sanctions. While there
appears to be broad agreement in Congress on bringing democracy to the island,
Congress remains divided on how to achieve that objective. In the 108th Congress,
several FY2005 appropriations measures — Commerce, Justice, and State;
Agriculture; and Transportation/Treasury — contained provisions that would have
eased Cuba sanctions. The Bush Administration had threatened to veto bills if they
contained provisions weakening Cuba sanctions. Ultimately, all the Cuba provisions
easing sanctions were stripped out of the FY2005 omnibus appropriations measure
(P.L. 108-447; H.Rept. 108-792). (The omnibus bill also contains several other trade
provisions, including one that requires Mexican and Canadian trucks to comply with
U.S. safety rules and another that outlines priorities for a U.S. council designed to
combat intellectual property violations). As in past Congresses, numerous free-
standing bills were also introduced to either tighten or weaken the Cuba sanctions
regime, but no action was taken on these measures.55
52 CRS Issue Brief IB92075, Syria: U.S. Relations and Bilateral Issues, by (name redacted).
53 CRS Report RL32534, Berlarus: Background and U.S. Policy Concerns, by (name
redacted).
54 BNA International Trade Reporter, “Congress Authorizes President to Lift Ban on Ex-IM
Bank Programs for Libya,” November 25, 2004.
55 CRS Report RL31740, Cuba: Issues for the 108th Congress, by (name redacted); CRS
Report RL31139, Cuba: U.S. Restrictions on Travel and Remittances, by (name redacted);
and CRS Issue Brief IB10061, Exempting Food and Agricultural Products from U.S.
Economic Sanctions: Status and Implementation, by (name redacted).

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Export Controls
In the 108th Congress, legislation (H.R. 55) was again introduced, but not acted
on, to rewrite and reauthorize the Export Administration of 1979 (EAA). The EAA
provides the statutory authority for export controls on sensitive dual-use goods and
technologies, items that have both civilian and military applications including those
items that can contribute to the proliferation of nuclear, biological and chemical
weaponry.
For many years now, efforts to renew the act have been complicated by
continued tension between national security and commercial concerns. Some
observers contend that current export controls hurt U.S. business by subjecting
technology exports to what they consider a cumbersome and ineffective licensing
process that costs sales and loses markets to overseas competitors. Others maintain
that current controls are not strong enough to prevent the spread of dual-use
technologies to adversaries or potential proliferators, and that the EAA legislation,
as introduced in the 108th Congress, would further weaken the system. Congressional
interest in EAA reform has been heightened by questions about the efficacy of export
controls in the fight against terrorism.56
Implications for the 109th Congress
The 109th Congress can be expected to face a trade agenda that will be at least
as extensive as the 108th Congress. Much of the legislation that died in committee
may be re-introduced in the 109th Congress to address persisting challenges and
problems affecting trade negotiations, WTO rules, imports, and exports. New
legislation may also be introduced to deal with statutory requirements and changes
in the U.S. political and economic landscape.
Early in 2005, President Bush is expected to request that his authority to
negotiate trade agreements under expedited congressional approval (trade promotion
authority) be extended for two years beyond its June 30, 2005 expiration date. The
extension would happen automatically unless either chamber passes a resolution of
disapproval. In addition, the President is expected to send to Congress legislation to
implement the U.S. free trade agreement with Bahrain early in the first session and
may also send legislation to implement the FTA with five Central American
countries (CAFTA) and possibly the Dominican Republic if a dispute over a recent
tax placed on high fructose syrup drinks can be resolved. The Bush Administration
will likely complete FTA negotiations with several other countries and launch
negotiations with still others this year.
Before the end of its first session, the 109th Congress will face a decision on
whether to introduce and act on a joint resolution to disapprove continued U.S.
56 CRS Report RL31832, The Export Administration Act: Evolution, Provisions, and Debate,
by (name redacted).

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participation in the WTO. Furthermore, the 109th Congress may consider whether to
comply with a WTO dispute resolution against the “Byrd Amendment,” especially
if U.S. exports become subject to retaliatory tariffs. Anxiety about job losses from
foreign competition and the growing U.S. trade deficit are also likely to focus
considerable congressional attention on China’s trading practices, including its
undervalued currency. Congress again may consider legislation that allows an easing
of longstanding restrictions on the importation of prescription drugs. In addition, if
history is a guide, Congress again may consider sanctions legislation to target and
affect the behavior of rogue or oppressive states.

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CRS-21
Appendix A. Major Trade Legislation Introduced in the 108th Congress57
Table 1. Trade Agreements Legislation
Legislation
House Senate
Final
Action
U.S.-Chile FTA. Legislation (H.R.
House passed the U.S.-Chile
Senate passed the companion bill on
President Bush signed the bill into
2738) to implement the U.S.-Chile
Implementation Act (H.R. 2738) on
July 31, 2003 by a vote of 66-31.
law (P.L.108-77) on September 3,
Free Trade Agreement.
July 24, 2003 by a vote of 270-156.
2003, and the agreement went into
effect on January 1, 2004.
U.S.-Singapore FTA. Legislation
House passed the U.S.-Singapore
Senate passed the companion bill on
President Bush signed the bill into
(H.R. 2739) to implement the U.S.-
Implementation Act (H.R. 2739) on
July 31, 2003 by a vote of 66-32 .
law (P.L. 108-78) on September 3,
Singapore Free Trade Agreement.
July 24, 2003 by a vote of 272-155.
2003, and the agreement went into
effect on January 1, 2004.
U.S.-Australian FTA. Legislation
House passed the U.S.-Australian
Senate passed the companion bill on
President Bush signed the bill into
(H.R. 4759) to implement the U.S.-
Free Trade Agreement
July 15, 2004 by a vote of 80-16.
law (P.L.108-286) on August 3,
Australian free trade agreement.
Implementation Act (H.R. 4759) on
2004. Implementation anticipated on
July 14, 2004 by a vote of 314-109.
January 1, 2005.
U.S.-Morocco FTA. Legislation
House passed H.R. 4842 on July 22,
Senate passed the companion bill on
President Bush signed the bill into
(H.R. 4842 and S. 2677) to
2004 by a vote of 323-99.
July 21, 2004 by a vote of 85-13.
law (P.L.108-302) on August 17,
implement to implement the U.S.-
2004. Implementation anticipated on
Morocco free trade agreement.
January 1, 2005.
57 Prepared by Richard Giles II, Congressional Fellow, Foreign Affairs, Defense, and Trade Division.

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CRS-22
Table 2. WTO Dispute Settlement Legislation
Legislation
House Senate
Final
Action
Tax legislation (H.R. 4520, S. 1637)
H.R. 4520 (Thomas) was introduced
S. 1637 (Grassley/Baucus), was
Conference report (H.Rept. 108-755)
that would repeal the Extraterritorial
June 4, 2004, reported as amended by
introduced September 18, 2003, and
filed on October 7, 2004 and bill was
Income Tax Exclusion Act, ruled an
the House Ways and Means
reported November 7, 2003 (S.Rept.
signed by the President on October
illegal export subsidy by the WTO,
Committee June 16, 2004 (H.Rept.
108-192), passed the Senate in
22, 2004 (P.L. 108-357).
and replace it with a mix of tax relief
108-548, Part I), and passed the
amended form May 11, 2004.
for domestic manufacturing and the
House June 17, 2004.
overseas operations of U.S.
multinationals.
Legislation (H.R. 3933, S. 1299) to
H.R. 3933 (Ramstad/Crane),
S. 1299 (Snowe), introduced June 19,
Repeal bills died in committee. In the
repeal the Continued Dumping and
introduced March 10, 2004, would
2003, would repeal the CDSOA, and
WTO, seven of the countries party to
Subsidy Offset Act of 2000, also
repeal the CDSOA and transfer all
direct the Secretary of Commerce to
this complaint were authorized on
known as the Byrd Amendment,
amounts remaining in CDSOA
provide financial and technical
November 26, 2004 to impose
which requires the distribution of
special accounts to the Treasury.
assistance to communities
retaliatory of U.S. exports. No
anti-dumping and countervailing
determined to be “negatively
retaliation imposed to date.
duties to petitioners and interested
impacted by trade.”
parties in underlying trade remedy
cases. WTO ruled that the United
States must repeal or modify the law
by December 27, 2003.
Legislation (H.R. 1073 and S. 1155)
H.R. 1073 (Sensenbrenner), which
S. 1080 (Hatch/Leahy), which would
Conference report of the
to repeal the Antidumping Act of
would repeal the act but not affect
repeal the act but would apply
Miscellaneous Tariff Act (H.Rept.
1916. This act, which creates a
current legislation, was introduced
retrospectively, was introduced May
108-771) contains a provision that
private right of action and criminal
May 19, 2003 and reported on
19, 2003. S. 1155 (Grassley), which
repeals the 1916 act prospectively;
penalties against dumping, was found
February 6, 2004 (H.Rept. 108-415).
would repeal the act but not apply to
P.L. 108-429 signed December 3,
by the WTO on August 28, 2000 to
current legislation, was introduced
2004.
be in violation of the WTO
May 23, 2003.
Antidumping Agreement.

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CRS-23
Legislation
House Senate
Final
Action
Legislation (H.R. 188, H.R. 1698,
H.R. 1988 (Serrano) and H.R. 1698
S. 403 (Baucus) would repeal section
Bills died in committee.
H.R. 2494, H.R. 4225, S. 403, S.
would repeal section 211 in
211 in connection with removal of
2002, and S. 2373) to repeal section
connection with removal of the U.S.
the U.S. trade embargo of Cuba. S.
211 of the Omnibus Appropriations
trade embargo of Cuba. H.R. 2494
2002 (Baucus/Craig) is identical to
Act of 1998. This case involves a
(Rangel) would repeal section 211
H.R. 2494 and S. 2373 (Domenici) is
trademark exclusion involving
and make other changes in U.S. law
identical to H.R. 4225.
property confiscated by the Cuba.
regarding trademarks with Cuba.
H.R. 4225 (Smith) would amend
section 211 and extend its prohibition
on judicial recognition of trademark
rights to rights asserted by nationals
of all countries.
Legislation ( S. 1258) to create a
H.R. 2365 (English) was introduced
S. 1258 (Bayh) was introduced on
Bills died in committee.
special commission to review dispute
on June 5, 2003. Cosponsors: 17.
June 12, 2003. Referred to Finance
findings by the WTO that were
Referred to the Ways and Means
Committee on June 12, 2003.
adverse to U.S. law. If the
Subcommittee on Trade on June 12,
commission found that the WTO
2003.
acted improperly three times within a
five-year period, the administration
would be required to propose
changes in WTO Dispute Settlement
procedures. H.R. 2365 establishes a
Congressional Advisory Commission
to review all WTO panel findings that
are adverse to the U.S. position.

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CRS-24
Table 3. Trade and Tariff Preferences
Legislation House
Senate Final
Action
AGOA III. Legislation to extend
H.R. 4103 (Thomas) passed the
S. 2529 (Grassley), identical to H.R.
AGOA III signed into law (P.L. 108-
and amend trade preferences and
House by voice vote on June 14,
4103, passed the Senate on June 24,
274) on July 13, 2004.
other benefits for Sub-Saharan
2004.
2004 by voice vote, obviating the
African countries.
need for a conference. S. 1900
(Lugar) was introduced on November
20, 2003.
Miscellaneous Trade and Technical
H.R. 1047 (Crane) passed the House
S. 671 (Grassley), passed the Senate
Conference Report (H.Rept. 108-771)
Correction Act of 2003. The bill
on March 5, 2003 by a vote of 415-
on March 4, 2004 in lieu of S. 671
filed on October 8, 2004 and
renews already expired duty
11.
with an amendment by unanimous
approved by the House on October 8,
suspensions and includes new duty
consent.
2004 and the Senate on November
suspensions for approximately 400
19, 2004. Signed into law (P.L.108-
products, many specialty chemicals
429) on December 3, 2004.
and other items that are not made in
the United States but that are used by
U.S. manufacturers, as well as other
trade provisions.
Haiti Trade Preferences.
H.R. 4889 (Shaw) was introduced on
S. 2261 (DeWine) was introduced on
Bills died in committee.
Legislation introduced in the second
July 21, 2004. Cosponsors:11.
March 30, 2004. Cosponsors: 18.
session (S. 2261 and H.R. 4889)
Referred to Ways and Means
Passed the Senate on July 16, 2004
would increase duty-free access to
Committee. Ways and Means Trade
with an amendment by unanimous
the U.S. market for Haitian apparel
Subcommittee held a hearing
consent.
products. Two identical bills
September 22, 2004 on H.R. 4889.
introduced in the first session (H.R.
1031 and S. 489) were more
restrictive with regard to country of
origin rules for sourcing eligible
fabric.

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CRS-25
Legislation House
Senate Final
Action
Middle East Trade Preferences.
H.R. 2267 (Adam Smith) was
S. 1121 (Baucus) was introduced on
Bills died in committee.
Legislation (H.R. 2267, H.R.
introduced May 22, 2003, and
May 22, 2003 and referred on May
2467and S. 1121) to authorize certain
referred on June 6, 2003 to Ways and
22, 2003 to Finance Committee.
trade benefits to countries of the
Means Subcommittee on Trade. H.R.
Cosponsors: 5. Finance Committee
greater Middle East.
2467 (Adam Smith) was introduced
held a hearing on S. 1121 on March
on June 12, 2003 and referred on
10, 2004.
June 19, 2003 to Ways and Means
Subcommittee on Trade.

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CRS-26
Table 4. Permanent Normal Trade Relations Status
Legislation
House Senate
Final
Action
Armenia. Legislation (H.R. 528 and
H.R. 528 (Knollenberg) was
S. 1557 (McConnell) was introduced
Provision added in conference report
S. 1557) to authorize the extension of
introduced on February 4, 2003.
on August 1, 2003. Cosponsors: 23.
to H.R. 1047 which was agreed to by
nondiscriminatory treatment (normal
Cosponsors: 13. Referred on
Referred to Finance Committee on
the House on October 8, 2004 and by
trade relations treatment) to the
February 6, 2003 to Ways and Means
August 1, 2003.
the Senate on November 19, 2004.
products of Armenia.
Trade Subcommittee.
Signed into law (P.L. 108-429) on
December 8, 2004.
Laos. Legislation (H.R. 3195, H.R.
H.R. 1031 (McCollum) introduced on
S. 2200 (Baucus) introduced on
Provision added in conference report
3943, and S. 2200) to extend normal
February 27, 2003. Cosponsors: 4.
March 11, 2004. Cosponsors: 2.
to H.R. 1047 which was agreed to by
trade relations treatment to the
Referred on September 30, 2003 to
Referred on March 11, 2004 to
the House on October 8, 2004 and by
products of Laos. Legislation (S.
Ways and Means Subcommittee on
Finance Committee.
the Senate on November 19, 2004.
3000) to postpone the extension of
Trade H.R. 3943 (Crane) introduced
S. 3000 (Coleman) was introduced on
Signed into law (P.L. 108-429) on
normal trade relations to the products
on March 11, 2004. Cosponsors: 11.
November 18, 2004. Cosponsors: 3.
December 3, 2004.
of Laos.
Referred on March 11, 2004 to the
Referred on November 18, 2004 to
Ways and Means Committee.
the Committee on Finance.
Russia. Legislation (H.R. 1224, S.
H.R. 1224 (Rangel) introduced on
S. 580 (Lugar) introduced March 10,
Bills died in committee.
580, S. 624) to authorize the
March 12, 2003. Cosponsors: 3.
2003. Cosponsors: 4. Referred on
extension of non-discriminatory
Referred on March 12, 2003 to
March 10, 2003 to Finance
treatment (normal trade relations
Committees on Ways and Means,
Committee.
treatment) to the products of the
International Relations, and Rules.
S. 624 (Baucus) introduced March
Russian Federation.
13, 2003. Cosponsors: 1. Referred to
Finance Committee on March 13,
2003.

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CRS-27
Legislation
House Senate
Final
Action
Ukraine. Legislation (H.R. 3906,
H.R. 3906 (Miller, C.) was
S. 2205 (Levin) was introduced on
Bills died in committee.
H.R. 3958, H.R. 4619, S. 2205) to
introduced on March 3, 2004.
March 11, 2004. Referred on March
authorize the extension of
Referred on March 4, 2004 to Ways
11, 2004 to Finance Committee.
nondiscriminatory treatment
and Means Committee.
(permanent normal trade relations
H.R. 3958 (Levin) was introduced
treatment) to the products of Ukraine.
on March 11, 2004. Referred on
March 11, 2004 to the Ways and
Means, International Relations, and
Rules Committees.
H.R. 4619 (Gerlach) was introduced
on June 18, 2004. Referred on June
18, 2004 to Ways and Means
Committee.

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CRS-28
Table 5. Importing Prescription Drugs
Legislation
House Senate
Final
Action
H.R. 2427 (Gutknecht), the
H.R. 2427 (Gutknecht) passed House
Related bills: S. 1781, S. 2137.
Received in the Senate, but no action
Pharmaceutical Market Access Act of
(243-186) on July 25, 2003, without
taken.
2003. A bill to authorize the
amendment. Sent to the Senate.
Secretary of Health and Human
Services to promulgate regulations
for the reimportation of prescription
drugs, and for other purposes.
S. 2307 the Reliable Entry for
S. 2307 (Grassley) introduced on
Bill died in committee.
Medicines at Everyday Discounts
April 8, 2004. Referred on April 8,
through Importation with Effective
2004 to Finance Committee.
Safeguards (REMEDIES) Act of
2004. A bill to amend the Federal
Food, Drug, and Cosmetic Act with
respect to the importation of
prescription drugs by importers, and
by individuals for personal use, and
for other purposes.
S. 2328, the Pharmaceutical Market
S. 2328 (Dorgan) introduced on April
Bill died in committee.
Access and Drug Safety Act of 2004.
21, 2004. Cosponsors: 31. Referred
Requires the Secretary of Health and
on April 21, 2004 to Health,
Human Services to promulgate
Education, Labor and Pensions
regulations allowing the importation
Committee and to Judiciary
of prescription drugs by registered
Committee. Judiciary Committee
exporters or importers.
hearing held on July 14, 2004.

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CRS-29
Legislation
House Senate
Final
Action
S. 2493, the Safe Importation of
Related bill H.R. 4923 (Bradley).
S. 2493 (Gregg) introduced on June
Bill died in committee.
Medical Products and Other Rx
2, 2004. Cosponsors: 8. Referred on
Therapies (IMPORT) Act of 2004.
June 2,2004 to Committee on Health,
Amends the Federal Food, Drug, and
Education, Labor, and Pensions.
Cosmetic Act to protect the public
health from the unsafe importation of
prescription drugs from counterfeit
prescription drugs, and for other
purposes.

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CRS-30
Table 6. Trade Remedy Legislation
Legislation
House
Senate
Final Action
Trade Law Reform Act of 2003.
H.R. 2365 (English) was introduced
Bill died in committee.
H.R. 2365 amends the Tariff Act of
June 5, 2003. Cosponsors: 17.
1930 to revise factors that the
Referred on June 12, 2003 to Ways
International Trade Commission
and Means Subcommittee on Trade.
must consider in making material
injury determinations in
countervailing duty and antidumping
proceedings, among other provisions.
Expedited Remedy for Persistent
S. 136 (Lincoln) was introduced
Bill died in committee.
Dumping Act of 2003. S. 136
January 1, 2003. Cosponsors: 5.
amends the Tariff Act of 1930 to
Referred on January 9, 2003 to
provide for an expedited antidumping
Finance Committee.
investigation when imports increase
materially from new suppliers after
an antidumping order has been
issued, and to amend the provision
relating to adjustments to export
price and constructed export price.
S. 219 amends the Tariff Act of 1930
S. 219 (Craig) was introduced
Bill died in committee.
to clarify the adjustments to be made
January 28, 2003. Cosponsors: 13.
in determining export price and
Referred on January 28, 2003 to
constructed export price.
Finance Committee.
A bill (H.R. 3716, S. 2212) that
H.R. 3716 (English) was introduced
S. 2212 (Collins) was introduced on
Bill died in committee.
amends the Tariff Act of 1930 to
January 21, 2004. Cosponsors: 64.
March 12, 2004. Cosponsors: 18.
provide that the provisions relating to
Referred on January 21, 2004 to
Referred on March 12, 2004 to
countervailing duties apply to
Ways and Means Committee.
Finance Committee.
nonmarket economies. Related bill:
(H.R. 2938)

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CRS-31
Table 7. Other Issues in Import Policy
Legislation
House Senate
Final
Action
Buy American Act. HR. 3017
H.R. 3017 (Kilpatrick) was
Bill died in committee.
amends title 49, United States Code,
introduced September 5, 2003.
to clarify certain Buy America
Referred on September 8, 2003 to
provisions. Responding to criticism
House Transportation and
about lax enforcement and too many
Infrastructure Subcommittee on
waivers, H.R. 3017 would modify
Highways.
how the Federal Transit Agency
(FTA) implements certain provisions
of the Buy American Act.
Buy American Act. S. 1480
S. 1480 (Feingold) was introduced on
Bill died in committee.
amends the Buy American Act to
July 29, 2003. Referred on July 29,
increase the requirement for
2003 to Governmental Affairs
American-made content, to tighten
Committee.
waiver provisions, and for other
purposes.
Milk Import Quota. H.R. 1160 and
H.R. 1160 (Sherwood) was
S. 560 (Craig) was introduced on
Bills died in committee.
S. 560) impose tariff-rate quotas on
introduced March 6, 2003.
March 6, 2003. Cosponsors: 36.
certain casein and milk protein
Cosponsors: 199. Referred on March
Referred on March 6, 2003 to the
concentrates.
17, 2003 to House Ways and Means
Finance Committee.
Subcommittee on Trade.
Country of Origin Labeling
H.R. 4576 (Goodlatte) was
No floor action taken.
(COOL). H.R. 4576 establishes a
introduced on June 15, 2004.
voluntary program for the provision
Cosponsors: 31. The House
of country-of-origin labeling
Committee on Agriculture reported
information with respect to certain
by voice vote H.R. 4576 on July 22,
agricultural products.
2004.

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CRS-32
Legislation
House Senate
Final
Action
Several bills (H.R. 3732, H.R. 3993,
H.R. 3732 (Rehberg) was introduced
S. 2451 (Daschle) was introduced on
Bills died in committee.
and S. 2451) were introduced to
on January 27, 2004. Referred to the
May 20, 2004. Cosponsors: 6. Placed
accelerate the implementation of the
House Committee on Agriculture on
on Senate Legislative Calendar on
mandatory labeling (COOL)
January 29, 2004.
May 21, 2004.
program.
H.R. 3993 (Bono) was introduced on
March 18, 2004. Referred to the
House Committee on Agriculture on
March 18, 2004.

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CRS-33
Table 8. China
Legislation
House Senate
Final
Action
Currency peg. A resolution (H.Res.
H.Res 414 (English) introduced on
H.Res. 414 passed the House on
414) that encourages China to fulfill
October 28, 2003. Cosponsors: 47.
October 29, 2003 by a 411-1 vote.
its commitments under international
trade agreements, and establish
monetary and financial market
reforms.
Currency peg. A resolution
S.Res. 219 (Graham, L) was
S.Res. 219 passed without
(S.Res.219) to encourage China to
introduced on September 9, 2003.
amendment by unanimous consent on
establish a market-based valuation of
Cosponsors: 16.
September 26, 2003.
the yuan.
Currency peg. Legislation (H.R.
H.R. 3058 (English) was introduced
S. 1758 (Voinovich) was introduced
Bills died in committee.
3058/S. 1758) would require the
on September 10, 2003. Cosponsors:
on October 10, 2003. Cosponsors: 2.
U.S. Secretary of the Treasury to
87. Referred on September 23, 2003
Referred on October 20, 2003 to
analyze and report on China’s
to Ways and Means Subcommittee
Committee on Finance.
exchange rate policies, and would
on Trade.
require additional tariffs to be
assessed on Chinese products
imported into the United States if the
Secretary determined that China
manipulates its currency.
Currency peg. H.R3364/S. 1586
H.R. 3364 (Myrick) was introduced
S. 1586 (Schumer) was introduced on
Bills died in committee.
would impose an additional duty of
on October 21, 2003. Cosponsors: 4.
September 5, 2003. Cosponsors: 12.
27.5% on Chinese goods imported
Referred on October 21, 2003 to
Referred on September 5, 2003 to
into the United States if China
Committee on Ways and Means.
Finance Committee.
refused to make its currency freely
convertible.
H.R. 3058/S. 1758, H.R. 3269, H.R.

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CRS-34
Legislation
House Senate
Final
Action
4896, S.Res. 219, S. 1586/H.R. 3364,
and S. 1592) to encourage China to
appreciate its artificially undervalued
currency in order to make Chinese
exports to the U.S. more expensive
and U.S. exports to China less
expensive.
Textiles. Legislation (H.R. 5026) to
H.R. 5026 (Levin) introduced on
Bill died in committee.
require the President to take certain
September 8, 2004. Cosponsors: 8
actions to enforce the textiles and
Referred to House Committee on
apparel safeguard with respect to
Ways and Means on September 8,
imports from China.
2004.

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CRS-35
Table 9. “Offshoring” Service Jobs
Legislation House
Senate Final
Action
S.Amdt. 2660 to S. 1637.
S.Amdt. 2660 (Dodd) was submitted
Amendment as modified agreed to in
Amendment to the Office of Federal
on March 3, 2004. Cosponsors: 5.
Senate by 70-26 vote on March 4,
Procurement Policy Act to limit the
2004. S. 1637 passed the Senate on
offshoring of Federal or state
May 11, 2004 by a 92-5 vote.
government contracts for the
procurement of goods and services.
S. 1637 to amend the Internal
Revenue Code of 1986 to comply
with WTO rulings on the FSC/ETI
benefit. (See Title V, Sec. 501 for
offshoring language).
H.R. 3820 to limit off-shore
H.R. 3820 (DeLauro) was introduced
Bill died in committee.
performance of federal and state
on February 24, 2004. Cosponsors:
contracts for the procurement of
41. Referred to the House Committee
goods and services.
on Government Reform.
S.Amdt. 3109 to, in part, provide
S.Amdt. 3109 (Wyden) was
S.Amdt. 3109 to S. 1637 was ruled
trade adjustment assistance program
submitted on May 3, 2004 as an
out of order by the chair after the
to service workers.
amendment to S. 1637.
motion to waive the Budget Act was
rejected by a 54-45 vote.
Legislation (H.R. 3881, H.R. 3957,
H.R. 3881 (Smith) was introduced on
S. 2143 (Durbin) was introduced on
Bills died in committee.
H.R. 4090, H.R. 5030, S. 2143, and
March 3, 2004. Cosponsors: 111;
February 27, 2004. Cosponsors: 4;
S. 2157) to amend the Trade Act of
H.R. 3957 (King) was introduced
and S. 2157 (Baucus) was introduced
1974 to extend the trade adjustment
March 11, 2004; H.R. 4090 (Camp)
on March 2, 2004. Cosponsors: 27.
assistance program to workers in the
was introduced on March 31, 2004.
Senate bills referred to Finance
service sector.
Cosponsors: 10; and H.R. 5030
Committee.
(Michaud) introduced on September
8, 2004; House bills referred to Ways
and Means Committee.

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CRS-36
Table 10. Export Promotion
Legislation
House
Senate
Final Action
OPIC. Legislation extending the
Passed House on November 19,
Passed Senate on November 14,
Signed into law (P.L. 108-158) on
operating authority of the Overseas
2003.
2003.
December 3, 2003.
Private Investment Corporation.
Export-Import Bank. Eximbank,
the chief U.S. government agency
that finances U.S. exports, was
reauthorized in 2002 (P.L. 107-189)
for four years.
Section 301. Legislation to establish
H.R. 2579 (Camp) was introduced on
S. 1324 (Grassley) was introduced on
Bills died in conference.
procedures for identifying countries
June 24, 2003. Cosponsors: 63.
June 24, 2003. Cosponsors: 4.
that deny market access for
Referred on June 27, 2003 to Ways
Referred on June 24, 2003 to Finance
agricultural products of the United
and Means Trade Subcommittee.
Committee.
States, and for other purposes.
Super 301. Legislation to amend the
H.R. 4120 (Rangel) was introduced
S. 2372 (Corzine) was introduced on
Bills died in committee.
Trade Act of 1974 regarding
on April 1, 2004. Cosponsors: 5.
April 29, 2004. Cosponsors: 6.
identifying trade expansion priorities.
Referred on April 1, 2004 to Ways
Referred on April 29, 2004 to
and Means Committee.
Finance Committee. S. 2786 (Bayh)
was introduced on September 10,
2004. Referred on September 10,
2004 to Finance Committee.

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CRS-37
Table 11. Trade Sanctions
Legislation
House Senate
Final
Action
Libya. FY2005 omnibus spending
H.R. 4818 passed by House by a vote
H.R. 4818 passed the Senate by a
P.L. 108-447 was signed by President
bill (H.R. 4818) contained a
of 344-51 on November 20, 2004.
vote of 65-30 on November 20, 2004.
Bush on December 8, 2004.
provision (Division J, Title I, sec.
113) authorizing the President to lift
the current ban on government
support for U.S. exports to Libya
provided by the Export-Import Bank.
Burma. Legislation (H.R. 2330) to
H.R. 2330 (Lantos) introduced on
H.R. 2330 passed the Senate without
Became law (P.L. 108-61) on July
sanction the ruling Burmese military
June 4, 2003. Cosponsors: 51.
amendment on July 16, 2003 by a
28, 2003. H.J.Res. 97 (Lantos)
junta, to strengthen Burma’s
Reported by the Committee on
vote of 94-1.
renewed the import restrictions
democratic forces and support and
International Relations on June 17,
contained in the Burmese Freedom
recognize the National League of
2003 and reported (as amended) by
and Democracy Act and became law
Democracy as the legitimate
the Committee on Judiciary on July
(P.L.108-272) on July 7, 2004.
representative of the Burmese people,
11, 2003. Passed by the House on
and for other purposes. Burmese
July 15, 2003 under suspension of the
Freedom and Democracy Act bans
rules by a vote of 418-2.
U.S. imports from Burma affecting
mainly textiles and apparel. Ban to
remain in effect until the President
certifies that progress is being made
in eliminating human rights
violations.

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CRS-38
Legislation
House Senate
Final
Action
Cuba. Legislation to lift the trade
The House-approved version of the
The Senate version of the FY2005
Under the threat of presidential veto,
embargo against Cuba and to require
FY2005 Transportation/Treasury
Agriculture appropriations bill, S.
none of the provisions easing Cuban
congressional renewal of trade
appropriations bill, H.R. 5025, had
2803, as reported by the Senate
sanctions were included in the
restrictions to Cuba. Several FY2005
three provisions that would have
Appropriations Committee, had a
FY2005 omnibus appropriations
appropriations bills — Commerce,
eased Cuban sanctions.
provision (Section 776) that would
measure (P.L. 108-447, H.R. 4818,
Justice and State; Agriculture; and
have directed the Secretary of the
H.Rept. 108-792.).
Transportation/Treasury — had
Treasury to promulgate regulations
provisions easing Cuba sanctions.
allowing for travel to Cuba under a
Numerous free-standing bills were
“general license” when it was related
also introduced to either tighten or
to the commercial sale of agricultural
weaken the Cuban sanctions regime,
and medical products.
but no action was taken.
Belarus. Legislation (H.R. 854 and
H.R. 854 (Smith) was introduced on
S. 700 (Campbell) was introduced on
H.R. 854, as amended, became law
S. 700) to provide for the promotion
February 13, 2003. Referred to the
March 25, 2003. Referred to
(P.L. 108-347) on October 20, 2004.
of democracy, human rights, and rule
Committees on International
Committee on Foreign Relations.
of law in the Republic of Belarus and
Relations, Judiciary, and Financial
Passed H.R. 854 without amendment
for the consolidation and
Services. Passed the House on
by unanimous consent on October 6,
strengthening of Belarus sovereignty
October 4, 2004 on motion to
2004.
and independence.
suspend the rules by voice vote.
Syria. Legislation (H.R. 1828/S.
H.R. 1828 (Engel) was introduced
S.Amdt. 2148 (Lugar) agreed to by
H.R. 1828, as amended, became law
982) to halt Syrian support for
April 12, 2003. Cosponsors: 297.
Voice vote. Passed Senate with an
(P.L.108-175 on December 12, 2003.
terrorism, end its occupation of
Referred on April 12, 2003 to
amendment by a 89-4 vote on
Lebanon, stop its development of
Committee on International
November 11, 2003. House agreed to
weapons of mass destruction, and for
Relations. Reported by the
Senate amendment on November 20,
other purposes.
committee (as amended) on October
2003.
15, 2003. Passed on the house floor
on October 15, 2003 by a vote of
398-4. Measure sent to the Senate on
October 16, 2003.

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CRS-39
Table 12. Export Controls
Legislation
House Senate Final
Action
Export Administration Act.
H.R. 55 (Dreier) introduced January
Died in committee.
Legislation to rewrite export control
7, 2003. Cosponsors: 2. Referred on
laws.
January 7, 2003 to Committee on
International Relations.
Defense Department FY2005
H.R. 4200 (Hunter) introduced on
S. 2400 (Warner) introduced on May
House-Senate conference agreed to
Authorization Bill. H.R. 4200
May 22, 2004. Passed by the House
11, 2004. Passed the Senate on June
on October 8, 2004 (H.Rept. 108-
contains a number of provisions
on May 20, 2004. Conference report
23, 2004. This bill provided waivers
767) requires the Secretary of State,
affecting the Arms Export Control
(H.Rept. 108-767) filed on October 8,
necessary to implement bilateral
in consultation with the Defense
Act and bilateral exchanges and trade
2004. Conference report agreed to in
export control agreements with the
Department, to ensure that any
in defense items. Some of the
the House on October 9, 2004.
United Kingdom and Australia,
applications for a license to export
provisions would make it more
which was included in the conference
defense articles or services to the
difficult to implement bilateral
report (H.Rept. 108-767).
United Kingdom and Australia are
defense export control agreements,
“expeditiously processed.” Other
subject a range of new of goods to
provisions from H.R. 4200 that
new export licensing requirements,
would have made export control
and impose new penalties and
regime more restrictive were dropped
licensing requirements for certain
from the conference report. Became
defense trade with China.
law (P.L. 108-375) on October 28,
2004.

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CRS-40
Appendix B. Trade-Related Hearings in the
108th Congress58
House of Representatives
Committee on Agriculture
Agricultural Trade Negotiations, Serial 108-29, May, 19, 2004 and April 28, 2004.
Mandatory Country of Origin Labeling, Serial 108-12, June 26, 2003, and Serial
108-17, October 1, 2003.
Multilateral and Bilateral Agricultural Trade Negotiations, June 18, 2003.
Review of Artificial Barriers to U.S. Agricultural Trade and Foreign Food
Assistance, Serial 108-1, March 26, 2003.
The Status of the World Trade Organization Negotiations on Agriculture, Serial 108-
5, July 22, 2003, June 18, 2003, and May 21, 2003.
Committee on Appropriations
Trade Capacity Building, Round Table Discussion, July 21, 2003.
Committee on Energy and Commerce
South Florida’s Access to Affordable Prescription Drugs: Cost and Benefits of
Alternative Solutions. Serial 108-9, March 3, 2003.
System Overwhelmed: The Avalanche of Imported, Counterfeit, and Unapproved
Drugs into the U.S., Serial 108-29, June 24, 2003.
U.S.-China Trade: Preparation for the Joint Commission on Commerce and Trade,
Serial 108-74, March 31, 2004.
Subcommittee on Commerce, Trade, and Consumer Protection, Trade in Services
and E-Commerce: The Significance of the Singapore and Chile Free Trade
Agreements, Serial 108-19, May 8, 2003.
Committee on Financial Services
Annual testimony of the Secretary of the Treasury regarding the State of the
International Financial System, March 25, 2004.
58 Prepared by Richard Giles II, Congressional Fellow, Foreign Affairs, Defense, and Trade
Division.

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CRS-41
China’s Exchange Rate Regime and its Effects on the U.S. Economy, Serial 108-56,
October 1, 2003.

Opening Trade in Financial Services — The Chile and Singapore Examples, Serial
No. 108-16, April 1, 2003.
The US-EU Regulatory Dialogue and its Future, Serial 108-86, May 13, 2004.
Domestic and International Subcommittee, Oversight of the Export - Import Bank of
the United States, May 6, 2004.
Committee on Government Reform
Canadian Prescription Drug Importation: Is There A Safety Issue, Serial 108-59,
June 12, 2003.
International Prescription Drug Parity: Are Americans Being Protected or Gouged,
Serial 108-12, April 3, 2003.
Committee on International Relations
Burmese Freedom and Democracy Act of 2003, Serial 108-22, June 10, 2003.
Economic Ties with China, October 21, and October 30, 2003.
Enforcement of the Iran-Libya Sanction Act and Increasing Security Threats from
Iran, Serial 108-59, June 25, 2003.
Intellectual Property Crimes: Are Proceeds from Counterfeited Goods Funding
Terrorism, Serial 108-48, July 16, 2003.
Overview of U.S. Policy Toward the Western Hemisphere, Serial 108-8, February 27,
2003.
Renewing OPIC and Renewing Its Role in Support of Key U.S. Objectives, Serial
108-57, June 10, 2003.
Trade Policy toward Sub-Saharan Africa, February 5, 2003.
U.S. Priorities in Europe, Serial 108-75, March 3, 2004.
Subcommittee-Africa, African Growth and Opportunity Act: Building Trade
Capacity, Serial 108-98, May11, 2004.
Boosting Africa’s Agricultural Trade, Serial 108-30, June 24, 2003.
Boosting Africa’s Agricultural Trade, Serial 108-30, June 24, 2003.
Subcommittee on Asia and the Pacific, U.S. Trade and Commercial Policy in
Southeast Asia, Serial 108-37, June 25, 2003.

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CRS-42
Subcommittee on Europe, Issues Affecting U.S. Political and Economic Relations
with Europe, Serial 108-7, March 13, 2003, and Serial 108-34, June 17, 2003.
Subcommittee on Western Hemisphere, Closed hearing with Central American
Ministers of Trade and Labor, July 13, 2004.
Committee on Judiciary
Markup of H.R. 2738 (H.Rept. 108-224, part 2), the “U.S.-Chile Free Trade
Agreement Implementation Act,” H.R. 2739 (H.Rept. 108-225, part 2), and the
“U.S.-Singapore Free Trade Agreement Implementation Act,” H.R. 49 (H.Rept.
108-234), July 16, 2003.
Trademarks Controlled by Companies Seized in the Cuban Revolution, July 13,
2004.
Committee on Small Business
Challenge to FSC/ETI Rules and the Effect on America’s Small Business Owners,
Serial 108-14, May 14, 2003.
Effect of Foreign Currency Manipulation on Small Manufacturers and Exporters,
Serial 108-21, June 25, 2003.
Globalization of White-Collar Jobs: Can America Lose These Jobs and Still Prosper,
Serial 108-20, June 18, 2003.
Offshoring of High-skilled Jobs, Serial 108-42, October 20, 2003.
Small Business Exporting and the Southern California Economy, Serial 108-33,
August 28, 2003.
The WTO’s Challenges to the FSC/ETI Rules and the effects on America’s Small
Business, Serial 108-38, September 10, 2003.
US-Chile Free Trade, June12, 2004.
Subcommittee on Tax, Finance and Exports, The Chilean Free Trade Agreement:
Opening Doors to South American Markets, Serial 108-19, June 12, 2003.
Committee on Ways and Means
Customs Budget Authorizations and Other Customs Issues, June 17, 2004.
Impact of Section 201 Safeguard Action on Certain Steel Products, Serial 108-15,
March 26, 2003.

Implementation of the United States-Morocco Free Trade Agreement, July 7, 2004.
Implementation of the United States-Australia Free Trade Agreement, June 16, 2004.

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CRS-43
Implementation of U.S. Bilateral Free Trade Agreements with Chile and Singapore,
Serial 108-24, June 10, 2003.
President Bush’s Trade Agenda, Serial 108-12, February 26, 2003, and March 11,
2004.
Trade with Sub-Saharan Africa and H.R. 4103, the “AGOA Acceleration Act of
2004,” April 29, 2004.
United States-China Economic Relations and China’s Role in the Global Economy;
Serial 108-22, October 31, 2003 and October 30, 2003.
Subcommittee on Trade, Haiti Trade Preferences, September 22, 2004.
Senate
Committee on Agriculture
Potential Burdens Associated with the New Country-of-Origin (COOL) Law, Serial
108-96, April 22, 2003.
The current situation regarding the discovery of a case of bovine spongiform
encephalopathy in a dairy cow in Washington state as it relates to food safety,
livestock marketing and international trade, January 27, 2004.
Committee on Appropriations
International and Domestic Intellectual Property Enforcement, Serial 98-984, April
29, 2004.
Committee on Banking, Housing and Urban Affairs Committee
Pending Nominations to the Export- Import Bank, December 09, 2003.
The National Export Strategy, Serial 108-438, May 21, 2003.
Committee on Commerce, Science, and Transportation
Cost of Prescription Drugs and Drug Importation, November 20, 2003.
Importation of Prescription Drugs, March 11, 2004.
Committee on Finance
Examination of U.S. Tax Policy and Its Effect on the Domestic and International
Competitiveness of U.S.-Based Operations, Serial 108-456, July 8, 2003.
International Trade and the U.S. Soda Ash Industry, April 15, 2004.

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CRS-44
Regarding U.S.-Cuba Economic Relations, September 4, 2003.
Review of proposed legislation implementing the U.S.- Singapore Free Trade
Agreement, June 17, 2003 and July 10, 2003.
Review of proposed legislation implementing the U.S.- Chile Free Trade Agreement,
June 17, 2003 and July 10, 2003.
Status of the Free Trade Area of the Americas: Negotiations and Preparations for
the Miami Ministerial, Serial 108-179, May 13, 2003.
The Administration’s International Trade Agenda, March 5, 2003 and March 9, 2004
The U.S.-Australia Free Trade Agreement, June 24, 2004 and July 15, 2004.
U.S.-Australia and U.S.-Morocco Free Trade Agreement, June 15, 2004.
The U.S.-Morocco Free Trade Agreement Implementation Act, July 20, 2004.
Unfilled Promises: Mexican Barriers to U.S. Agricultural Exports, September 23,
2003.
United States Economic and Trade Policy in the Middle East, March 10,2004.
Subcommittee Joint Hearing, International Trade and Health Care, International
Trade and Pharmaceuticals, April 27, 2004.
Subcommittee on Trade, Status of the Free Trade Area of the America’s:
Negotiations and Preparations for the Miami Ministerial, May 13, 2003.
Committee on Foreign Relations

AGOA III: The United States-Africa Partnership Act of 2003, S.Hrg. 108-512, March
25, 2004.
Challenges and Accomplishments as the European Union and the United States
Promote Trade and Tourism in Terrorist Environments, May 13, 2004.
Examining the Effects and Consequences of an Emerging China, Serial 108-58,
March 19, 2003.
NAFTA: A Ten Years Perspective and Implications for the Future, S.Hrg. 108-593,
April 20, 2004.
The African Growth and Opportunity Act, S.Hrg. 108-187, June 25, 2003.
The Future of U.S. Economic Relationships in the Western Hemisphere, April 20,
2003.
The Greater Middle East Initiative: Sea Island and Beyond, June 2, 2004.

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CRS-45
Trade and Human Rights: The Future of U.S.-Vietnamese Relationship, S.Hrg. 108-
464, February 12, 2004.
U.S.-China Relations, Serial 108-265, September 11, 2003.
U.S.-China Relationship: Status of Reforms in China, April 22, 2004.
U.S.-EU Cooperation on Regulatory Affairs, S.Hrg. 108-330, October 16, 2003.
U.S. Relations with a Changing Europe: Differing Views on Technology Issues,
Serial 108-188, June 24, 2003.
European Affairs Subcommittee, U.S.-EU Travel and Trade Cooperation, May 13,
2004.
Committee on Governmental Affairs
Fair or Foul: The Challenge of Negotiating, Monitoring and Enforcing U.S. Trade
Laws, Serial 108-398, December 9, 2003.
Committee on the Judiciary
Drug Importation, July 14, 2004.
The L-1 Visa and American Interests in the 21st Century Global Economy, S.Hrg.
108-327, July 29, 2003.
Proposed United States-Chile and United States-Singapore Free Trade Agreements
with Chile and Singapore, S.Hrg.108-301, July 14, 2003.
Committee on Small Business and Entrepreneurship
Small Business Manufacturing in a Global Market, Field Hearing, Lewiston Maine,
October 9, 2003.

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