H.Doc.105-6 DEVELOPMENTS CONCERNING THE NATIONAL EMERGENCY WITH RESPECT TO ...

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105th Congress, 1st Session - - - - - - - - - - -  House Document 105-5


 
       AMENDMENTS TO THE GENERALIZED SYSTEM OF PREFERENCES (GSP)

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

   HIS DETERMINATION THAT MALAYSIA SHOULD BE GRADUATED FROM THE GSP 
PROGRAM BECAUSE IT IS SUFFICIENTLY ADVANCED IN ECONOMIC DEVELOPMENT AND 
IMPROVED IN TRADE COMPETITIVENESS, ALSO OTHER DETERMINATIONS--RECEIVED 
    IN THE UNITED STATES HOUSE OF REPRESENTATIVES OCTOBER 17, 1996, 
                       PURSUANT TO 19 U.S.C. 2462

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


   January 7, 1997.--Referred to the Committee on Ways and Means and 
                         ordered to be printed


                                           The White House,
                                      Washington, October 17, 1996.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: The Generalized System of Preferences 
(GSP) program offers duty-free treatment to specified products 
that are imported from designated developing countries. The 
program is authorized by title V of the Trade Act of 1974, as 
amended.
    Pursuant to title V, I have determined that Malaysia should 
be graduated from the GSP program because it is sufficiently 
advanced in economic development and improved in trade 
competitiveness. I have also determined that certain products 
from Pakistan should be suspended from duty-free treatment 
under the GSP program because it is not making sufficient 
progress in protecting basic labor rights. In addition, I have 
determined that Botswana and Western Samoa should be deleted 
from the list of least-developed beneficiary developing 
countries and Angola, Ethiopia, Madagascar, Zaire, and Zambia 
should be added to that last. Finally, I have determined that 
Cyprus, Aruba, Macau, the Netherlands Antilles, Greenland, and 
the Cayman Islands meet the definition of ``high income'' 
country as defined by the statistics of the International Bank 
for Reconstruction and Development and are subject to mandatory 
graduation.
    The action regarding Malaysia and designation of least-
developed beneficiary developing countries is effective January 
1, 1997. The action against Pakistan is retroactive to July 1, 
1996. The mandatory graduation of high income countries is 
effective January 1, 1998.
    This notice is submitted in accordance with the 
requirements of title V of the Trade Act of 1974.
            Sincerely,
                                                William J. Clinton.


             To Amend the Generalized System of Preferences

                              ----------                              


            By the President of the United States of America

                             A Proclamation

    1. Sections 501 (1) and (4) of the Trade Act of 1974, as 
amended (``Trade Act'') (19 U.S.C. 2461 (1) and (4)), provide 
that, in affording duty-free treatment under the Generalized 
System of Preferences (GSP), the President shall have due 
regard for, among other factors, the effect such action will 
have on furthering the economic development of a beneficiary 
developing country and the extent of the beneficiary developing 
country's competitiveness with respect to eligible articles. 
Section 502(c)(2) of the Trade Act (19 U.S.C. 2462(c)(2)) 
provides that, in determining whether to designate any country 
as a beneficiary developing country for purposes of the GSP, 
the President shall take into account various factors, 
including the country's level of economic development, the 
country's per capita gross national product, the living 
standards of its inhabitants, and any other economic factors he 
deems appropriate. Section 502(d) of the Trade Act (19 U.S.C. 
2462(d)) authorizes the President to withdraw, suspend, or 
limit the application of duty-free treatment under the GSP with 
respect to any country after considering the factors set forth 
in sections 501 and 502(c) of the Trade Act. Section 502(f)(2) 
of the Trade Act (19 U.S.C. 2462(f)(2)) requires the President 
to notify the Congress and the affected country, at least 60 
days before termination, of the President's intention to 
terminate the affected country's designation as a beneficiary 
developing country for purposes of the GSP.
    2. Section 502(e) of the Trade Act (19 U.S.C. 2462(e)) 
provides that the President shall terminate the designation of 
a country as a beneficiary developing country if the President 
determines that such country has become a ``high income'' 
country as defined by the official statistics of the 
International Bank for Reconstruction and Development. 
Termination is effective on January 1 of the second year 
following the year in which such determination is made.
    3. Section 502(c)(7) of the Trade Act (19 U.S.C. 
2462(c)(7)) provides that, in determining whether to designate 
any country a beneficiary developing country under this 
section, the President shall take into account whether the 
country has taken or is taking steps to afford internationally 
recognized work rights to workers in the country.
    4. Section 502(a)(1) of the Trade Act (19 U.S.C. 
2462(a)(1)) authorizes the President to designate countries as 
beneficiary developing countries for purposes of the GSP. 
Section 503(c)(2)(F) of the Trade Act (19 U.S.C. 2463(c)(2)(F)) 
authorizes the President to disregard the limitations provided 
in section 503(c)(2)(A)(i)(II) of the Trade Act (19 U.S.C. 
2463(c)(2)(A)(i)(II)) with respect to any eligible article if 
the aggregate appraised value of the imports of such article 
into the United States during the preceding calendar year is de 
minimis.
    5. Section 502(a)(2) of the Trade Act (19 U.S.C. 
2462(a)(2)) authorizes the President to designate any 
beneficiary developing country as a least-developed beneficiary 
developing country for purposes of the GSP based on the 
consideration in section 501 and 502(c) of the Trade Act.
    6. Pursuant to section 502(d) of the Trade Act, and having 
considered the factors set forth in section 501 and 502(c)(2), 
I have determined that Malaysia is sufficiently advanced in 
economic development and improved in trade competitiveness that 
continued preferential treatment under the GSP is not 
warranted, and that it is appropriate to terminate the 
designation of Malaysia as a beneficiary developing country for 
purposes of the GSP effective January 1, 1997. In order to take 
into account the termination of benefits under the GSP for 
articles imported from Malaysia, I have determined that it is 
appropriate to: (i) terminate the designation of Malaysia for 
GSP purposes as a member of the Association of South East Asian 
National (``ASEAN'') and to modify general note 4(a) of the 
Harmonized Tariff Schedule of the United States (``HTS'') to 
reflect such termination, (ii) delete from general note 4(d) of 
the HTS and from pertinent HTS subheadings all references to 
particular products of Malaysia which are currently excluded 
from preferential tariff treatment under the GSP, and (iii) to 
terminate any waivers of the competitive need limits granted to 
Malaysia pursuant to section 503(d) of the Trade Act (19 U.S.C. 
2463(d)).
    7. Pursuant to section 502(e) of the Trade Act, I have 
determined that Cyprus, Aruba, Macau, the Netherlands Antilles, 
Greenland, and the Cayman Islands meet the definition of a 
``high income'' country as defined by the official statistics 
of the International Bank for Reconstruction and Development. 
As a result and pursuant to section 502(e) of the Trade Act, I 
am terminating the preferential treatment under the GSP for 
articles that are currently eligible for such treatment and 
that are imported from Cyprus, Aruba, Macau, the Netherlands 
Antilles, Greenland, and the Cayman Islands effective January 
1, 1998.
    8. Pursuant to section 502(d) of the Trade Act, and having 
considered the factors set forth in sections 501 and 502(c)(7), 
I have determined that it is appropriate to suspend some of 
Pakistan's GSP benefits because of insufficient progress on 
affording workers in that country internationally recognized 
worker rights. In order to reflect the suspension of benefits 
under the GSP for certain articles imported from Pakistan, I 
have determined that it is appropriate to modify general note 
4(d) of the HTS and pertinent HTS subheadings so that Pakistan 
will no longer receive preferential tariff treatment under the 
GSP with respect to certain eligible articles effective July 1, 
1996.
    9. Pursuant to section 502(a)(1) of the Trade Act, I am 
acting to correct the name of Guinea-Bissau and the Republic of 
Yemen in the HTS, beneficiary developing countries previously 
proclaimed. In addition, I have determined that it is 
appropriate to disregard section 503(c)(2)(A)(i)(II) of the 
Trade Act with respect to certain eligible articles from 
certain beneficiary developing countries based on imports for 
calendar year 1994 and to restore preferential treatment under 
the GSP to imports of such articles from such countries.
    10. Pursuant to sections 502(a)(2) and 502(d) of the Trade 
Act, and having considered the factors set forth in sections 
501 and 502(c), I have determined that Botswana and Western 
Samoa should be deleted from the list of least-developed 
beneficiary developing countries and Angola, Ethiopia, 
Madagascar, Zaire, and Zambia should be added.
    11. Section 604 of the Trade Act, as amended (19 U.S.C. 
2483), authorizes the President to embody in the HTS the 
substance of the relevant provisions of that Act, and of other 
Acts affecting import treatment, and actions thereunder.
    Now, therefore, I, William J. Clinton, President of the 
United States of America, acting under the authority vested in 
me by the Constitution and the laws of the United States, 
including but not limited to section 301 of Title 3, United 
States Code, and Title V and section 604 of the Trade Act, do 
proclaim that:
    (1) In order to terminate the designation of Malaysia as a 
beneficiary developing country under the GSP and to modify the 
list of beneficiary developing countries designated as least-
developed beneficiary developing for purposes of the GSP, the 
HTS is modified as provided in Annex I to this proclamation.
    (2) In order to terminate the designation of Cyprus, Aruba, 
Macau, the Netherlands Antilles, Greenland, and the Cayman 
Islands as beneficiary developing countries under the GSP, the 
HTS is modified as provided in Annex II to this proclamation.
    (3) In order to reflect the suspension of benefits under 
the GSP for certain articles imported from Pakistan, the HTS is 
modified as provided in Annex III of this proclamation.
    (4) In order to correct the name of Guinea-Bissau and 
Republic of Yemen and to restore preferential treatment to 
certain eligible articles from certain beneficiary developing 
countries as a result of granting of de minimis waivers to such 
articles, the HTS is modified as provided in Annex to this 
proclamation.
    (5) I delegate to the United States Trade Representative 
the powers granted to me in section 502(f)(2) of the Trade Act 
to notify a country of my intention to terminate that country's 
status as a beneficiary developing country for the purpose of 
the GSP.
    (6) Any provisions of previous proclamation and Executive 
orders inconsistent with the provisions of this proclamation 
are hereby superseded to the extent of such inconsistency.
    (7) The modifications to the HTS made in paragraphs (1) 
through (4) of this proclamation shall be effective with 
respect to articles both: (i) imported on or after January 1, 
1976, and (ii) entered, or withdrawn from warehouse for 
consumption, on or after the date specified in the respective 
Annex.
    In witness whereof, I have hereunto set my hand this 
seventeenth day of October, in the year of our Lord nineteenth 
hundred and ninety-six, and of the Independence of the United 
States of America the two hundred and twenty-first.

                                                William J. Clinton.


                                Annex I

    Effective with respect to articles both: (i) imported on or 
after January 1, 1976, and (ii) entered, or withdrawn from 
warehouse for consumption, on or after January 1, 1997.

Section A. Modification in the HTS of an article's preferential tariff 
                        treatment under the GSP

    For the following HTS provisions, the Rates of Duty 1 
Special subcolumn is modified by deleting the symbol ``A*'' and 
inserting an ``A'' in lieu thereof.

4015.11.00               8521.10.90   8528.21.16   9006.53.00           
4418.20.40               8528.12.12   8528.21.19                        
8519.21.00               8528.12.16   8528.21.41                        
8519.99.00               8528.12.36   8528.30.30                        
                                                                        

         Section b. Modifications to general note 4 of the HTS

    (1) General note 4(a) is modified by:
          (a) deleting ``Malaysia'' from the list of 
        independent countries.
          (b) deleting ``Malaysia'' from the list of countries 
        entitled ``Members of the Association of South East 
        Asian Nations (ASEAN) Eligible for GSP except Brunei 
        Durassalam and Singapore''.
          (c) deleting the title ``Members of the Association 
        of South East Asian Nations (ASEAN) Eligible for GSP 
        except Brunei Darussalam and Singapore'' and inserting 
        in lieu thereof ``Members of the Association of South 
        East Asian Nations (ASEAN) Eligible for GSP except 
        Brunei Darussalam, Malaysia and Singapore''.
    (2) General note 4(b) is modified by:
          (a) deleting ``Botswana'' and Western Samoa''.
          (b) adding, in alphabetical order, the following 
        countries: Angola, Ethiopia, Madagascar, Zaire, Zambia.
    (3) General note 4(d) is modified by:
          (a) deleting the following HTS provisions and the 
        countries set out opposite such provisions:

4015.11.00  Malaysia
4418.20.40  Malaysia
8519.21.00  Malaysia
8519.99.00  Malaysia
8521.10.90  Malaysia
8528.12.12  Malaysia
8528.12.16  Malaysia
8528.12.36  Malaysia
8528.21.16  Malaysia
8528.21.19  Malaysia
8528.21.41  Malaysia
8528.30.30  Malaysia
9006.53.00  Malaysia

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