TRADE ENHANCEMENT ACT OF 1985

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP87M01152R001101400027-1
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 8
• Document Creation Date: December 27, 2016
• Document Release Date: December 7, 2010
• Sequence Number: 27
• Publication Date: November 20, 1985
• Content Type: REGULATION

The Trade Enhancement Act is a major bipartisan attempt to
formulate a comprehensive approach to national trade policy and
address major trade problems. It does so by setting out measures
designed to ensure systematic enforcement of existing trade laws
against foreign unfair practices; expand trade through market
liberalization; promote meaningful adjustment by import-damaged
industries to new competitive conditions; and address misalignment of
the dollar, developing country debt, and disincentives to U. S.
exports.
Title I, Statement of National Trade Policy.
Title II, Unfair Foreign Trade Practices. Title focuses on removing
barriers to U. S. exports. Would require initiation of more cases
against foreign barriers ("Section 301"); establish mandatory dead-
lines for retaliation against uncorrected violations (generally,
15 months); and expand the definition of unfair practices to include
certain "targeting" policies.
Title III, Serious Injury Due to Imports. Title would expand the
options available to the President for relief of domestic industries
damaged by imports. Existing options of quotas, tariffs, or adjust-
ment assistance would be expanded to include accelerated anti-dumping
cases, multilateral agreements on excess capacity and depressed
prices, limited antitrust exemptions, and financial assistance.
Title would encourage positive adjustment by domestic industries
by limiting Presidential discretion in cases where ITC has approved
an industry-labor adjustment plan. In such cases, the President
would grant relief at least equivalent to that recommended by ITC
unless Congress approves lesser relief or no relief.
Title IV, New Trade Round Authority. Title establishes specific
congressional objectives for a new round of trade negotiations;
extends for five years authority for 'fast-track' consideration of
trade agreements; provides that fast-track consideration of proposed
agreements be approved by the Senate Finance and House Ways and Means
Committees. (Fast-track authority provides for up-or-down vote
within 90 days, without amendment, on act implementing a trade
agreement.)
Title V, Exchange Rates, Developing Country Debt. Title commits
U. S. to coordination of monetary and fiscal policies with the G-5
nations (Britain, Federal Republic of Germany, Japan, France) and to
coordination of central bank participation in currency markets.
Requires President to open negotiations with G-5 nations within six
months on functions of international monetary system and to enhance
coordination of national economic policies. Establishes Strategic
Exchange Reserve for Treasury, Federal Reserve interventions.
Title makes additional financing available to developing nations
through increases in loan guarantee authority of Ex-Im Bank and World
Bank loan leverage, at no additional budgetary cost to U. S.
Additional funds would be conditioned on developing country removal
of trade barriers.
Title VI, Generalized System of Preferences (GSP). Title reforms GSP
eligibility provisions, requires that advanced developing countries
(such as Hong Kong, Korea, Taiwan) be graduated from GSP within two
years. Graduation will be based on per capita income and export
capability.
Title VII, Non-market Economy Dumping. Title sets up a mechanism to
combat "dumping' by non-market economies and defines NME dumping on
the basis of the average U. S. import price.
-- more --
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 Trade Enhancement Act
First, last add
Title VIII, Intellectual Property Rights. This title liberalizes
standards for complaints of infringement on patents, trademarks and
copyrights, strengthens penalties for violation of intellectual
property rights by other nations, expands patent law protection
available to agricultural chemicals and holders of process patents.
Title IX, Export Expansion. This title authorizes a $300 million
"war chest" sought by the President to counter foreign export credit
subsidies; revises Foreign Corrupt Practices Act on terms previously
approved by Senate; increases ambassadorial and Foreign Commercial
Service responsibilities to assist U. S. exporters; expands data
collection, dissemination programs of Commerce Department.
Title X, National Security Revisions. Sets 90-day deadline for
action by President on Commerce Secretary's recommendations in
Section 232 cases (imports threatening national security). Secre-
tary's recommendation takes effect in the absence of action by
President.
Attachment: Outline, Trade Enhancement Act
 Outline of Legislation
(*) I. Statement of National Trade Policy
(*) II. Measures to Eliminate Barriers and Distortions (301)
(*) III. Section 201 Reform (Revive Escape Clause)
(*) IIIa.- Threat of Injury (201/301 Admts. Related to Targeting)
(*) IV. New Round Authority (Linked to Negotiating Objectives)
(*)
V.
Measures Related to Exchange Rates and Debt
Chapter 1 -- Exchange Rates
Chapter 2 -- LDC Debt
(*)
VI.
GSP Graduation
(*)
VII.
Non-Market Economy Dumping
VIII.
Intellectual Property Rights
(*) Chapter 1 -- Amendments to Section 337
Chapter 2 -- Amendments to Other Statutes
IX. Export-Related Measures
Chapter 1 -- Export Credit Subsidy *War Chest'
Chapter 2 -- Amendments to FCPA
(*) Chapter 3 -- Export Promotion Measures
(*) X. Revision of Section 232/National Security Measures
* -- Introduced as SEPARATE bill (as well as part of overall)
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Summary of Titles. Trade Enhancement Act
I. STATEMENT OF NATIONAL TRADE POLICY
II. FOREIGN BARRIERS TO U. S. EXPORTS
Amendments to Sections 181/301 of the Trade Act of 1974:
1. Require annual self-initiation of several Section 301 cases
based on National Trade Estimates inventory of foreign barriers.
Cases should focus on the most onerous foreign barriers and
represent a substantial amount of U. S. trade.
2. Transfer Section 301 authority to USTR to enhance leverage of
negotiators and depoliticize self-initiation.
3. Require retaliation in 15-18 months for all Section 301 cases
in the absence of
(a) a GATT ruling against the U. S.;
(b) a settlement to offset or eliminate the barrier; or
(c) a subsequent USTR determination that the barrier is not
actionable under Section 301.
4. USTR is authorized to terminate or modify the retaliation
(and, if necessary, provide compensation) if
(a) the GATT subsequently finds it to be a violation of U.
S. obligations; or
(b) the foreign practice is subsequently eliminated or
reduced.
[**5. Add to Section 301 causes of action relating to "targeting'
including anti-competitive practices; infant industry protection;
export subsidies to third markets; diversion of trade into the U.
S. market; or combinations thereof. Foreign practices that
threaten to burden or restrict U. S. commerce in the future would
also be actionable.**]
6. Add retaliatory options including withdrawal of Generalized
System of Preferences (GSP) benefits and offsetting settlements
(that satisfy the petitioner and the affected industry.)
7. Require automatic termination of any retaliatory measure after
7 years unless the petitioner objects. If the petitioner wants
retaliation continued, the USTR could substitute a new measure to
(a) increase the pressure on the foreign country or (b) relieve
the consumer impact of the old measure.
Amendments to Section 201 of the Trade Act of 1974:
1. Enhance presidential (as opposed to International Trade
Commission) remedy options beyond tariffs, quotas and trade
adjustment assistance (TAA) to include:
-- limited anti-trust exemptions
multilateral solutions (eg, to deal with world excess
capacity/depressed commodity prices, targeting, etc.)
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 accelerated anti-dumping/countervailing duty cases
fast-track financial/other assistance
[**2. Enhance "threat of injury" language to deal with targeting
and targeted imports.**]
3. Provide petitioners with the option of developing an
adjustment plan (to be agreed between labor and management, with
government acting in an advisory capacity).
4. In addition to an injury determination and remedy
recommendation, the ITC would have to determine whether the
adjustment plan could reasonably be expected to result in
sufficient adjustment by the industry to be competitive (in the
absence of import relief) at the end of the relief period. If
the ITC so determines, the President's discretion on provision of
relief would be limited, whereby
-- the President would have to provide relief recommended
by the ITC or relief substantially equivalent to it (in the
form of tariffs, quotas or TAA) unless
-- he gets fast-track Congressional approval for a remedy
less than that recommended by the ITC -- including no
remedy. (Congress would act on the President's proposal
within 60 days. If Congress does not approve his proposal,
the ITC remedy would go into effect.)
5. If the ITC finds "no injury" or determines that the adjustment
plan is inadequate (all interested parties, including government,
would be permitted to comment on the plan), the President could
provide or decline to provide import relief, as under current
law.
6. If the industry is found by the President not to be in
compliance with adjustment plan commitments, he may withdraw
import relief at any time.
IIIa. THREAT OF INJURY FROM FOREIGN TARGETING PRACTICES
A. Amendments to Section 301 marked [**] on Page 2
B. Amendments to Section 201 marked [**] on Page 3
IV. AUTHORITY FOR A NEW ROUND OP TRADE NEGOTIATIONS
A. Authority for 5 years, beginning January 1988, for the
President to use legislative fast-track procedures to implement
multilateral or bilateral tariff and non-tariff trade agreements.
B. Specific Negotiating Objectives (related primarily to reform
of General Agreement on Tariffs and Trade):
1. Revise GATT dispute settlement process to ensure faster
and more decisive settlements (including key recommendations
from recent GATT advisory panel)
2. Eliminate agricultural export subsidies
3. Define and discipline negative trade effects of certain
practices not covered by GATT, including natural resource
subsidies, targeting, upstream subsidies and downstream
dumping
4. Extend GATT rules to cover services, investment,
intellectual property rights and expand coverage of
Government Procurement Code
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developing countries
6. Revise GATT Balance of Payments Article to better reflect
floating exchange rate system
7. Provide for accelerated implementation of trade
concessions by countries with major trade surpluses
8. Enhance transparency of trade barriers under GATT through
substitution of tariffs for quantitative restrictions
(' retariffication")
9. Increase GATT coordination with the International
Monetary Fund (IMF) and the World Bank in their dealings
with developing country debtors
10. Establish minimum standards for the workplace to
prevent abuses of human rights of workers
C. Require the President to get permission from the Finance and
Ways and Means Committees prior to use of fast-track legislative
implementing authority. Committee approval would be based on the
extent to which the negotiating objectives had been achieved in
agreements or in proposed implementing legislation.
1. Provisions similar to those in the Trade Act of 1974
requiring consultations with Congressional advisors and
private sector advisory committees; public hearings and
advice from the ITC.
2. In addition, the USTR would be required to brief
interested members of Congress on an annual basis during the
negotiations on
-- progress/prospects for achieving specific
negotiating objectives, and
-- demands of other countries on the U. S. (related
to the achievement of U. S. objectives).
V. EXCHANGE RATE MANDATE/LDC DEBT
Chapter 1 -- Exchange Rates
A. Statement of U. S. Policy, including
-- Coordination of monetary and fiscal policies with
the objectives of eliminating imbalances in trade and
capital flows and stabilizing exchange rates, and
-- Coordination of central bank participation
ininternational currency markets.
B. Require the President, within 6 months of enactment, to
enter into negotiations:
-- (With G-5 countries) To improve the functioning of
the international monetary system in light of the
Congressional policy statement;
-- To enhance the role of the G-5 to coordinate
fiscal and monetary policies to provide for policies
that converge on money growth, inflation, fiscal policy
and other economic factors; and
-- To achieve reciprocal investment opportunities.
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C. Provide for the establishment of a Strategic Exch
Reserve for the Treasury and Federal Reserve to mode: S
exchange rate fluctuations.
Chapter 2 -- Developing Country (LDC) Debt
A. Make additional funds available for LDC debtor nations
conditioned on their removal of trade and investment
barriers and the development of private sector growth.
Funding would be made available at no budgetary cost to the
U. S. through:
-- increased Ex-Im Bank loan guarantee authority and
additional leveraging for World Bank loans
(without an increase in subscription by Members)
B. Negotiate termination of the IMF Compensatory Financing
Facility, transferring its assets to the Fund's general
resources.
C. Provide for negotiations through the Organization for
Economic Cooperation and Development (OECD) and the
multilateral development banks to eliminate official
financing for new mining or production facilities for
commodities in oversupply.
VI. GENERALIZED SYSTEM OF PREFERENCES (GSP) GRADUATION
A. Require the President to establish criteria for
graduation of advanced developing countries (such as Hong
Kong, Korea and Taiwan) from the GSP program within 90 days
of enactment.
B. Criteria is to be based on considerations such as per
capita income and demonstrated export capability (in the
absence of preferential tariff treatment.)
C. Require such countries to be graduated from GSP within 2
years of enactment.
-- Establish anti-dumping standard for NMEs based on
average U. S. import price.
Chapter 1 -- Amendments to Section 337
-- Remove injury test from cases under Section 337;
-- Allow owner of intellectual property right to meet
definition of f indpstry?;
-- Enhance penalties for violations of intellectual
property rights.
Chapter 2 -- Amendments to Other Statutes
-- Extend patent term for agricultural chemicals
-- Provide protection against infringement of pr
patents in U. S. courts (S.1543).
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IX. EXPORT-RELATED MEASURES
Chapter 1 -- President's $300 million export credit "war chest'
(S.1763).
Chapter 2 -- Revisions to the Foreign Corrupt Practices Act
(from legislation previously approved by the Senate, S. 430)
Chapter 3 -- Other Export Related Measures
-- Strengthen Foreign Commercial Service and role of
Ambassadors in U. S. export activities;
-- Require trade impact statements for legislation and
major regulatory agency and Executive Branch decisions that
might affect U. S. trade competitiveness;
-- Improve collection and dissemination of information and
data related to trade within the Department of Commerce.
X. NATIONAL SECURITY/REVISIONS TO SECTION 232
A. Place 90-day limit on the President to act on the
Secretary of Commerce's recommendation in these cases. If
the President does not act, the Commerce recommendation
would take effect after 90 days.
B. Transition rule would require immediate action on cases
that have been awaiting a presidential decision for more
than 90 days.
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