ing information ((a) an explanation of how the bill and proposed administrative action will change or affect existing law; and (b) a statement asserting that the agreement makes progress in achieving applicable purposes, policies, and objectives; the reasons the agreement makes such progress and why and to what extent it does not achieve other purposes, policies, and objectives; how the agreement serves the interests of U.S. commerce; why the implementing bill and proposed administrative action are required or appropriate to carry out the agreement; efforts made by the President to obtain international exchange rate equilibrium and any effect the agreement may have regarding increased monetary stability; and the extent, if any, to which each foreign party to the agreement maintains non-commercial state trading enterprises that may adversely affect, nullify, or impair the benefits to the United States under the agreement and how the agreement applies to or affects purchases and sales by such enterprises).

There is no statutory time limit for submission of the agreement and draft bill after entry into the agreement. The timetable is worked out between the Congressional leadership and the Administration to accommodate the need for committees of jurisdiction to have adequate opportunity to develop an acceptable draft bill text while also ensuring expeditious formal action on the actual implementing legislation.

4. The implementing bill is introduced in both Houses of Congress on the same day it is submitted by the President and referred to the committees of jurisdiction. The committees have 45 legislative days in which to report the bill; they are discharged automatically from further consideration after that period.

5. Each House votes on the bill within 15 legislative days after the measure has been received from the committees. A motion in the House to proceed to consideration of the implementing bill is privileged and not debatable. Amendments are not in order.

No amendments to the implementing bill are in order in either the House or the Senate once the bill has been introduced; the committee and floor actions in the House and Senate consist of "up or down" votes on the bill as introduced. The total maximum period for Congressional consideration from date of introduction is 60 legislative days if the bill is not a revenue measure. Since the Senate must act on a House-passed revenue bill, the maximum period for Congressional consideration of a revenue implementing bill from date of introduction is 90 legislative days (15 additional days for Senate committee action on the House-passed measure and 15 additional days for Senate floor action). After the legislation is signed by the President, the agreement goes into effect under the terms of the agreement and the implementing bill.

Special "fast track" procedures also apply to implementation of changes in existing trade agreements, including certain specified provisions in the U.S. bilateral trade agreements with Israel and Canada. Section 3(c) of the Trade Agreements Act of 1979 16 re

16 Public Law 96-39, approved July 26, 1979, 19 U.S.C. 2504.

quires the President to submit a draft bill and statement of any administrative action to the Congress whenever he determines it is necessary or appropriate to amend, repeal, or enact a statute to implement any requirement, amendment, or recommendation concerning an agreement. Procedures and requirements similar to sections 1102(d) and 1103 of the 1988 Act and 151-154 of the 1974 Act apply, except the President is required to consult at least 30 days, rather than 90 days, in advance with the House Committee on Ways and Means and the Senate Committee on Finance and any other committees of jurisdiction on the subject matter and implementation.

Although statutory, the legislative procedures were enacted as an exercise of the rulemaking powers of each House of Congress, and are part of each House's rules. The procedures may be changed in the same manner as any other rules.

The purpose of the approval process is to preserve the constitutional role and fulfill the legislative responsibility of the Congress with respect to agreements which often involve substantial changes in domestic laws. The consultation and notification requirements prior to entry into an agreement and introduction of an implementing bill ensure that Congressional views and recommendations with respect to provisions of the proposed agreement and possible changes in U.S. law or administrative practice are fully taken into account and any problems resolved in advance of formal Congressional action. At the same time, the procedure ensures certain and expeditious action on the results of the negotiation and on the implementing bill with no amendments.

Section 1103(c) of the 1988 Act instituted a "reverse fast track" procedure that terminates the application of that special procedure for the approval of trade agreements if both the Committee on Ways and Means and the Committee on Rules in the House and the Committee on Finance in the Senate report, and both the House and Senate separately pass, resolutions of disapproval within any 60 legislative day period. The basis for the disapproval must be failure or refusal of the U.S. Trade Representative (USTR) to consult with the Congress on trade negotiations and trade agreements as set forth in the consultation requirements. The "fast track" procedure applies to floor consideration of the resolution, which is nonamendable.

Specific Foreign Trade Barriers

Section 181 of the Trade Act of 1974,17 added by section 303 of the Trade and Tariff Act of 1984, requires an annual report on foreign trade barriers and their impact, known as the National Trade Estimates report. The USTR, through the interagency trade mechanism, must identify, analyze, and estimate the impact on U.S. commerce of foreign acts, policies, and practices which constitute significant barriers to or distortions of U.S. exports of goods or services and U.S. foreign direct investment. The report must also include information on any action taken, or reasons for no action taken, such as under section 301 or negotiations or consultations

17 Public Law 93-618, 19 U.S.C. 2241 note.

with foreign governments, to eliminate any measure identified. The report is submitted to the appropriate committees of the House and to the Senate Committee on Finance.

Section 182 of the Trade Act of 1974,18 as added by section 1303 of the 1988 Act, requires the USTR to identify priority foreign countries that deny adequate and effective protection or fair and equitable market access for U.S. intellectual property rights, for purposes of action under section 301 (see further description under chapter 2.)

TELECOMMUNICATIONS TRADE

The Telecommunications Trade Act of 1988, sections 1371-1382 of the Omnibus Trade and Competitiveness Act of 1988, provides specific trade negotiating authority and remedies to address the lack of foreign market openness in telecommunications trade. The Telecommunications Act requires the U.S. Trade Representative to investigate and designate foreign priority countries, taking into account acts, policies, and practices that deny mutually advantageous market opportunities to U.S. telecommunications exporters and their subsidiaries. Countries may be added or deleted from the list of designated countries at any time.

The President is required to negotiate with the priority countries, drawing from a list of general and specific negotiating objectives, for the purpose of entering into bilateral or multilateral agreements that provide mutually advantageous market opportunities. If no agreement is reached, the Act requires the President to take whatever authorized actions are appropriate and most likely to achieve the general negotiating objectives, as defined by the specific objectives established by the President. The actions authorized are broadly similar to authorities available to the USTR under section 301 of the Trade Act of 1974, as amended.

The Telecommunications Trade Act requires the USTR to conduct annual reviews to determine if a country has violated a telecommunications trade agreement or otherwise denies mutually advantageous market opportunities. In the case of an affirmative determination, it shall be treated as a trade agreement violation under section 301 of the Trade Act of 1974, as amended. In general, that section requires that in cases involving foreign violations of trade agreements or other "unjustifiable" practices, the USTR must take retaliatory action in an amount equivalent in value to the foreign burden or restriction on U.S. commerce. Certain waivers are available to the USTR, under which no retaliation is required.

Negotiating authority is provided concomitant with the general trade agreement authority provided in the Omnibus Trade and Competitiveness Act of 1988 (i.e., until 1993). Compensation authority also is provided, in the event that action is taken that violates U.S. obligations under the GATT.

18 Public Law 93-618, 19 U.S.C. 2242.

Background and current status

The Telecommunications Trade Act was intended to address the imbalance in market access for telecommunications goods and services between the United States and other countries that arose from increased deregulation of the U.S. market and court-ordered divestiture by American Telephone and Telegraph (AT&T) of its local operating companies on January 1, 1984. These actions resulted in a U.S. market virtually devoid of barriers to the entry of foreign competitors. At the same time, however, major foreign markets were characterized by strict government regulations, procurement policies, standards, and other practices that resulted in limited competitive opportunities for U.S. and other foreign firms in those markets. Although the period authorized for telecommunications trade negotiations is coterminus with multilateral trade negotiating authority in the 1988 Act, the separate negotiating authority is designed to permit increased flexibility in negotiating agreements in telecommunications trade. It permits the USTR to focus on priority countries whose barriers or practices pose the greatest impediment to market access by U.S. telecommunications firms and to tailor the negotiating priorities to address the specific circumstances in each country.

In February 1989, the USTR (acting on behalf of the President) initiated telecommunications talks with the European Community (EC) and Korea, based on information received during a six-month consultation period with the private sector and Congress. The initial term for those negotiations was 18 months from the date of enactment (August 1988). At the end of the 18-month period in February 1990, the USTR extended the negotiations for an additional one-year term, based on a finding that substantial progress had been made and that further progress was likely if the negotiations were continued. In February 1991, the USTR once again used the discretion provided in the Act to extend the negotiations with the EC and Korea for an additional year, on the basis of past and expected progress in the talks.

The most recent one-year extension is the last that is authorized under the Telecommunications Trade Act. If an agreement with each priority country which achieves the U.S. negotiating objectives is not reached by the end of that one-year period, the Presi.. that are approdent must take "whatever actions authorized

priate and most likely to achieve" the negotiating objectives. In taking such action, the President is directed first to take those actions which most directly affect trade in telecommunications products and services of the priority foreign country, unless he determines that action against other economic sectors would be more effective in achieving the negotiating objectives.

TRADE IN WINE

The Wine Equity and Export Expansion Act of 1984, title IX of the Tariff and Trade Act of 1984,19 requires the U.S. Trade Representative to designate major wine trading countries which are potentially significant markets for U.S. wine and which maintain

19 Public Law 98-573, title IX, approved October 30, 1984.

tariff and nontariff barriers to, or other distortions of, U.S. wine trade. The President must direct the USTR to consult with each country to seek the reduction or elimination of these barriers or distortions.

The President was also required to submit a report on each country to the House Committee on Ways and Means and the Senate Committee on Finance by November 30, 1985, containing: (1) a description of each trade barrier; (2) an assessment of whether each barrier is subject to an existing trade agreement; (3) action proposed or taken to reduce or eliminate the barriers, including action under the Trade Act of 1974; (4) reasons for not taking action; and (5) recommendations to Congress on any additional authority or action considered necessary and appropriate. Section 1125 of the Omnibus Trade and Competitiveness Act of 1988 20 required that the President update each of these major wine trading country reports and submit them to the two committees by September 23, 1989. Each report must contain: (1) a description of each tariff or nontariff barrier to trade in U.S. wine of that country on which the USTR has carried out consultations since the first report; (2) the status of these consultations; (3) and information, explanations, and recommendations based on developments since the first report. If the President determines that action is appropriate to respond to any unfair tariff or nontariff barrier on U.S. wine, he must take all appropriate and feasible action under the Trade Act of 1974. The President is also encouraged to initiate a wine export promotion program in cooperation with winery representatives.

Most-Favored-Nation Treatment

Nondiscriminatory treatment of trading partners has been a basic element of international trade for several centuries, although its scope and application has changed as the complexity of trade among the nations has increased. Such treatment and the principle underlying it usually are referred to as the "most-favored-nation' (MFN) treatment or prinicple. MFN has its origin in international commercial agreements, whereby the signatories extend to each other treatment in trade matters which is no less favorable than that accorded to a nation which is the "most favored" in this respect. The effect of such treatment is that all countries to which it applies are "the most favored" ones; hence, all are treated equally. In the context of U.S. tariff legislation, MFN treatment means that the products of a country given such treatment are subject to lower rates of duty (found in column 1 of the Harmonized Tariff Schedule (HTS) of the United States), which have resulted from various rounds of reciprocal tariff negotiations. Products from countries not eligible for MFN treatment under U.S. law are subject to higher rates of duty (found in column 2 of the HTS), which are essentially the rates of duty enacted by the Tariff Act of 1930.

Prior to 1934, the United States accorded MFN treatment of its trading partners reciprocally only within the scope of commercial agreements containing an MFN clause. Section 350 of the Tariff Act of 1930, as added by the Trade Agreements Act of 1934, in

20 Public Law 100-418, 19 U.S.C. 2804 rate.