ACTION
FROM THE COMMITTEE ON WAYS AND MEANS

Thomas Announces Committee Action on H.R. 2739, the “United States-Singapore Free Trade Agreement Implementation Act,” and H.R. 2738, the “United States-Chile Free Trade Agreement Implementation Act”

Congressman Bill Thomas (R-CA), Chairman of the Committee on Ways and Means, today announced that on Thursday, July 17, 2003, the Committee favorably reported  H.R. 2739, the “United States-Singapore Free Trade Agreement Implementation Act,” without amendment by a recorded vote of 32-5 and H.R. 2738, the “United States-Chile Free Trade Agreement Implementation Act,” without amendment by a recorded vote of 33-5.

The President transmitted the legislation to Congress on July 15, 2003, under the procedures of the Bipartisan Trade Promotion Authority of 2002.  Under the terms of that Act, the legislation is nonamendable once it has been transmitted.  To consider possible amendments, the Committee held an informal markup on July 10 of draft legislation, and the Committee informally approved both bills by voice vote. 

DESCRIPTION OF H.R. 2739 AS APPROVED:

•  Title I of the bill would provide the general Congressional approval of the Agreement and procedures for the President to follow in order to execute his authority to implement the Agreement such as consultation with Congress, layover, and advice from advisory committees.

• Title II would provide authority for the President to proclaim tariff modifications to carry out the Agreement and would set out the rules of origin for goods to qualify for preferential treatment.  In particular, the Agreement would call for a “yarn forward” requirement for textile and apparel goods. 

• There is a unique rule of origin provision that would deem certain goods (identified in Annex 3B of the Agreement) to be considered of Singaporean origin when transshipped through Singapore to the United States.  These goods would be referred to as Integrated Sourcing Initiative (ISI) goods and would be predominantly information technology-related.  They already enter the United States duty free regardless of source, so the impact of the provision would be to streamline customs procedures and would eliminate the merchandise processing fee.  No goods could be added to the ISI list without future Congressional approval. 

• Other provisions in the bill would provide for the exemption from the Customs merchandise processing fee for Singapore goods and enforcement authority to prevent circumvention of textile or apparel requirements.

• Title III would provide a temporary mechanism to impose import relief when increased quantities of Singapore imports are a substantial cause of serious injury or threat of serious injury to the domestic industry.  Another provision would provide a special safeguard relief procedure for textile and apparel imports cases.  Finally, when conducting a global safeguard action under Section 201 of the Trade Act of 1974, the President would be able to exclude Singapore imports if they are not a substantial cause of the serious injury or threat to the industry. 

DESCRIPTION OF H.R. 2738 AS APPROVED:

• The Chile implementing bill is similar to the Singapore implementing bill except that it would: (1) eliminate beneficiary status for Chile under the Generalized System of Preferences, (2) contain a safeguard for agricultural products whose import price is less than the trigger price set in the Agreement, and (3) would phase out drawback for Chilean goods over a 3-year period beginning in 8 years. 

• The Chile legislation does not contain two items that are included in the Singapore bill: (1) the Integrated Sourcing Initiative, and (2) the discretionary exclusion from the global safeguard of Title II of the Trade Act of 1974.