The Trade Act of 2002: Summary of Provisions, Part I

 
Introduction and Summary
On August 1, 2002, the Senate approved HR 3009 - the Trade Act of 2002, which had been favorably voted on by the House the week before. The chairman of the Ways and Means Committee, Bill Thomas, welcomed the legislation, stating that "the House and the Senate came together to create a bipartisan trade agreement that places the United States back in the global trade market." The act was signed into law by President Bush the next day.

The new law grants Trade Promotion Authority to the president, which means that the administration has the power to negotiate trade agreements in consultation with Congress but limits Congress to an up or down vote on the agreements, thus taking away any power to amend or change them. It extends help to workers who lost their jobs to trade-related circumstances and provides for a tax credit for health insurance. The law also includes trade benefits for Andean (ATPA), Caribbean/Central American (CBERA) and African (AGOA) countries by expanding existing preferential trade regimes. Finally, it renews the Generalized System of Preferences, which has existed for decades as a preferential trade regime for qualifying developing countries.

The Trade Act is divided into five divisions and will be summarized in a series of three articles on this web site. Below is the first summary article on Division A.

Division A - Trade Adjustment Assistance
Title I - Trade Adjustment Assistance Program (TAA) was first provided to workers by the Trade Act of 1974. The current law extends the dates for providing assistance to September 30, 2007. Subtitle A allows groups of workers to solicit assistance from their state governor, who must then inform and assist the Secretary of Labor. The Secretary will immediately publish in the Federal Register that the request is under investigation. Workers, including farm workers, will be entitled to receive benefits if they face loss of work due to imports or if the employer has moved production to a country which has an FTA with the United States, or if the country is a beneficiary of the ATPA, CBERA or AGOA. The Secretary's certification process is reduced from 60 to 40 days.

The act grants secondary worker benefits for upstream workers (suppliers of components and/or parts) and downstream workers (users of a firm's output) affected by trade agreements with Canada and Mexico. TAA benefits are given to farmers unless they qualify for benefits under the Farm Bill. They may even receive benefits beyond September 2007 as long as they are entitled to them.

Time periods are fixed for workers to enroll in training as well as the criteria for the Secretary to use to waive such training, revoke a waiver or authorize a state to issue one. The number of weeks that benefits may be received is extended to 120 weeks for training and the amount of money allocated to this purpose is increased to $220 million. Employers are authorized to be reimbursed for up to 50% of wages for on-the-job and customized training of employees.

Job search expenses are authorized for within 365 days of separation. A relocation allowance is also provided. Special assistance is provided to older workers (over 50), who are entitled to up to 50% of their former wages when moving to a new job and also to a tax credit for health insurance.

Subtitle C of Title I provides for assistance to agricultural commodity producers. The Secretary of Agriculture may certify groups of producers as eligible for benefits under the law if certain criteria are met. If the International Trade Commission begins a study of an agricultural commodity, the Secretary must begin a study as well and upon completion inform agricultural groups of their eligibility for employment assistance, training and relocation allowances, and information on how to petition for these benefits.

The law establishes criteria for eligibility and procedures for the Secretary to follow. Income limits and caps ($10,000) are set as well as means to recover funds paid based on fraudulent petitions or overpayments. The Department of Agriculture is allocated $90 million annually for these programs. The Secretary of Commerce is mandated to perform a study in one year to determine if fishermen should be eligible for similar assistance.

Title II provides for a tax credit for individuals of up to 65% of the cost of their health insurance premiums with an eligible health insurance provider while they and their families are eligible for TAA, and certified as such, under the law. It also applies to workers covered by the Pension Benefit Guarantee Board. This section also explains the limitations and qualifications for coverage.

This section amends the Public Health Services Act to allow the Secretary to encourage states that do not already have them to create "qualified high-risk pools." It also provides funds for promotion and matching funds for operation - $20 million in 2002 and $40 million in 2003 and 2004. No pre-existing health condition limits are imposed. The Secretary must make a determination within 15 days of receiving an application from a state or entity.

Title III of the bill, the Customs Border Security Act of 2002, includes a Customs Reauthorization. Chapter 1 of this section provides for authorization of appropriations for drug enforcement, non-commercial and commercial operations, and air and marine interdiction. It also appropriates $308 million for each fiscal year for the Automated Commercial Environment computer system. The Commissioner of Customs must report to the Committee on Ways and Means that the ACE system is being implemented effectively and meets the modernization requirements of the NAFTA implementation act. Air and marine interdiction also receive appropriations. Congress grants $90.2 million for anti-terrorism and illicit drug detection equipment and expenses on the Mexican and Canadian borders and Florida Gulf Coast ports.

To enhance security at the Mexican border, the US Customs Service (USCS) stationed there is to receive portable and fixed truck X-ray systems, contraband detection kits, ultraviolet contraband inspection units, Treasury enforcement communications systems, remote watch camera surveillance systems, radios, weigh-in-motion units, narcotics detectors and other equipment. Appropriations are made to cover the acquisition of these materials along with a smaller quantity for the US-Canada border, as well as for the Florida Gulf Coast ports. Ten million dollars is authorized and appropriated to counter child pornography/exploitation through establishment of the Child Cyber Smuggling Center in the USCS.

The Customs Commissioner is charged with conducting a study to determine if USCS personnel are receiving proper training to ensure correct handling of the financial auditing of importers. Appropriations are provided for a cost accounting system for expenses incurred in operations. Studies are also commissioned for speeding up the rulings process by the USCS and determining the appropriateness of the amount charged for various USCS user fees and inspection of express courier service facilities. Appropriations are authorized for a pay increase for certain USCS personnel.

Chapter 4 of Title III establishes anti-terrorism provisions to protect official US personnel that act in good faith. The Secretary of the Treasury is granted certain special powers to relocate personnel, offices, etc. when a national emergency is declared. The Secretary is also mandated to create an electronic monitoring system of cargo and to improve other reporting systems. All waterborne cargo leaving a US port is subject to new documentation requirements, the unloading of undocumented cargo is prohibited, seizure of such cargo is allowed and penalties are set.

The Secretary of the Treasury is required to set up a joint task force to evaluate and certify secure transportation systems. Once implemented, the Secretary will submit a report to Congress on the effectiveness of the systems and any alternatives that would improve security. The USCS is authorized to search outbound USPS mail for compliance with USCS regulations if it weighs 16 ounces or more, even if it is sealed against inspection. However, correspondence may not be read unless a search warrant has been granted. Appropriations are authorized for the re-establishment of USCS operations in New York City.

Chapter 5 refers to textile transshipment provisions and authorizes the GAO to audit the USCS monitoring of such transshipments. In addition, appropriations are authorized for textile transshipment enforcement operations. This chapter also authorizes the implementation of the African Growth and Opportunity Act.

Subtitle B appropriates $33.1 million for the Office of the United States Trade Representative and two new positions in the legislative affairs office. Subtitle C authorizes $54 million (2003) for the US International Trade Commission, and Subtitle D increases the value of foreign purchased goods ($800) that returning US citizens may bring back into the US without paying duties. Regulatory audit procedures are established for handling overpayment of USCS duties and fees. Provision is made to set up an electronic system for the deposit and later payment of estimated duties and fees importers must pay to the USCS.