article: SECTION 1. SHORT TITLE. This Act may be cited as the ``United States-Japan Trade Equalizing Act of 1993''. TITLE I--FINDINGS AND DEFINITIONS SEC. 101. FINDINGS, PURPOSE, AND DISCLAIMERS. (a) Findings.--The Congress makes the following findings: (1) The United States trade deficit with Japan has increased substantially over the past decade. In 1991, the United States trade deficit with Japan was $43,400,000,000. The trade deficit increased by 14 percent in 1 year, to over $49,400,000,000 by the end of 1992. (2) The traditional domestic motor vehicle and motor vehicle parts sector directly employs more than 1 million workers and indirectly employs several million more. The workers are skilled, hard working, productive, capable, and proud of their work. The workers and their employers have achieved great improvements in quality, performance, fuel economy, safety, and design of domestic motor vehicles. (3) The domestic motor vehicle and motor vehicle parts sector directly and indirectly accounts for about 12 percent of our gross national product and generates more than $200,000,000,000 a year in revenue. (4) The domestic motor vehicle and motor vehicle parts sector is a major consumer of steel, glass, textiles, rubber, aluminum, machine tools, chemicals, electronics, and other important products. (5) Recognizing the competitive pressures facing the motor vehicle industry, Japan has operated under a voluntary export restraint arrangement since 1981 that has not been recognized or enforced by the United States Government. (6) Since 1986 the United States Government has engaged, with little result, in a negotiating process with the Government of Japan to obtain fair access to the markets of that nation for United States producers of motor vehicle parts and manufacturers of motor vehicles. (7) Despite these negotiating efforts, in 1992 the United States posted a $49,400,000,000 trade deficit with Japan of which over $30,000,000,000 was accounted for by the automotive sector deficit ($9,800,000,000 of which was attributable to motor vehicle parts), and there is little evidence that the Japanese Government is seriously trying to eliminate such deficits which are detrimental to the United States economy and jobs. (8) In addition to transplant assembly facilities in the United States that are owned or controlled by Japanese persons, motor vehicles and motor vehicle parts are being imported from Japan into the United States in such increased quantities and under such conditions as to cause, or threaten to cause, serious injury to domestic manufacturers of like or directly competitive products and to the domestic workers producing such products. (9) In the last 5 years, transplant assembly facilities in the United States that are owned or controlled by persons from Japan have not shifted significantly their procurement to traditional United States producers of motor vehicle parts, as illustrated by the fact that-- (A) the United States automotive parts trade deficit with Japan grew between 1985 and 1990 at an annual average rate of 17 percent and totaled $9,800,000,000 in 1992; and (B) only 12.5 percent of the customs value of vehicles manufactured in such transplant facilities in the United States is based on parts produced by traditional United States motor vehicle parts producers, while 35.1 percent of such value is based on imports from Japan and 32.4 percent of such value is based on purchases from Japanese-affiliated parts producers located in the United States. (10) The pattern of procurement described in paragraph (9) has contributed significantly to the overall United States merchandise trade deficit with Japan. (11) The continuation of current procurement practices by automobile companies owned or controlled by persons from Japan and the increased production of vehicles by transplant facilities in the United States is projected to result in a 110 percent (or $21,990,000,000) increase in the United States motor vehicle parts trade deficit by 1994. (12) Aftermarket parts are likely to account for 50 percent of the motor vehicle parts trade deficit with Japan by 1994 because transplant facilities are not purchasing sufficient quantities of original equipment from United States suppliers. (13) Traditional United States motor vehicle parts manufacturers are particularly underrepresented in the production of motor vehicles produced by transplant facilities in the United States in the following 3 major, high value-added vehicle systems: (A) Engines. (B) Transmissions. (C) Body structures. (14) In the 1991 National Trade Estimates Report, the United States Trade Representative listed ``close and durable relationships'' between Japanese motor vehicle makers and suppliers as a barrier to United States motor vehicle parts sales in Japan. (15) The market share of Japanese motor vehicle manufacturers in the European Community is currently 10 percent while their market share in the United States is about 35 percent. (16) The European Community has negotiated an understanding with the Government of Japan limiting the market share of motor vehicles produced by Japanese motor vehicle manufacturing companies both in Japan and in the European Community to less than 16 percent until the year 2000. (17) The home market for motor vehicles and motor vehicle parts in Japan remains largely closed to all foreign manufacturers whose combined market share equals no more than 3 percent. (18) Japan's nontariff market barriers include onerous inspection and certification systems that discriminate against foreign-made motor vehicles and motor vehicle parts, a tax system that discriminates against foreign-made products, closed distribution systems and dealer networks, and government- tolerated ``Keiretsu'' relationships involving motor vehicle and motor vehicle parts manufacturers and dealers. At the same time, Japanese firms enjoy open markets in the United States with no limitations or discrimination. (b) Purpose.--The purpose of this Act is to decrease the merchandise trade deficit of the United States with Japan by providing for a staged merchandise trade deficit reduction over a 5-year period. (c) Congressional Disclaimers.--It is the intent of Congress that this Act shall not be deemed to modify or amend the terms or conditions of any international treaty, convention, or agreement that may be applicable to motor vehicles and motor vehicle parts and to which the United States, on the date of the enactment of this Act, is a party, including, but not limited to, the terms or conditions of any such treaty, convention, or agreement which provide for the resolution of conflicts between the parties thereto. Nothing in this Act shall be construed (1) to confer jurisdiction upon any court of the United States to consider and resolve such conflicts, or (2) to alter or amend any law existing on the date of the enactment of this Act which may confer such jurisdiction in such courts. SEC. 102. DEFINITIONS. For purposes of this Act: (1) Motor vehicle and motor vehicle parts.-- (A) The term ``motor vehicle'' means any article of a kind described in heading 8703 or 8704 of the Harmonized Tariff Schedule of the United States. (B) The term ``motor vehicle parts'' means any article of a kind described in the following provisions of the Harmonized Tariff Schedule of the United States if suitable for use in the manufacture or repair of motor vehicles: (i) Subheadings 8407.31.00 through 8407.34.20 (relating to spark-ignition reciprocating or rotary internal combustion piston engines). (ii) Subheading 8408.20 (relating to the compression-ignition internal combustion engines). (iii) Subheading 8409 (relating to parts suitable for use solely or principally with engines described in clauses (i) and (ii)). (iv) Subheading 8483 (relating to transmission shafts and related parts). (v) Subheadings 8706.00.10 and 8706.00.15 (relating to chassis fitted with engines). (vi) Heading 8707 (relating to motor vehicle bodies). (vii) Heading 8708 (relating to bumpers, brakes and servo brakes, gear boxes, drive axles, nondriving axles, road wheels, suspension shock absorbers, radiators, mufflers and exhaust pipes, clutches, steering wheels, steering columns, steering boxes, and other parts and accessories of motor vehicles). The Secretary shall by regulation include as motor vehicle parts such other articles (described by classification under such Harmonized Tariff Schedule) that the Secretary considers appropriate for the purposes of this Act. (C)(i) The term ``Japanese motor vehicle'' means a motor vehicle which is the product of Japan. (ii) The term ``Japanese motor vehicle part'' means a motor vehicle part which is the product of Japan. (2) Entered.--The term ``entered'' means entered, or withdrawn from warehouse for consumption, in the customs territory of the United States. (3) Import restriction implementation period.--The term ``import restriction implementation period'' means a calendar year which-- (A) occurs after 1994 and before calendar year 2001, and (B) follows a calendar year with respect to which the Secretary finds, under section 201(b), that the trade deficit reduction target was not met. (4) Interstate sale.--The term ``interstate sale'' means sale or distribution in the interstate commerce of the United States. (5) Baseline deficit.--(A) The term ``baseline deficit'' means the average monthly merchandise trade deficit, as computed by the Secretary, of the United States with Japan during calendar year 1993. (B) In computing merchandise trade deficits under this section, the value of bilateral trade between the United States and Japan in-- (i) crude petroleum; and (ii) nonmonetary gold; shall not be included. (6) Secretary.--The term ``Secretary'' means the Secretary of Commerce. (7) Trade representative.--The term ``Trade Representative'' means the United States Trade Representative. TITLE II--MERCHANDISE TRADE DEFICIT REDUCTION SEC. 201. STAGED TRADE DEFICIT REDUCTION. (a) Trade Deficit Reduction Targets.-- (1) In general.--The trade deficit reduction target for each of the calendar years listed below is an average monthly merchandise trade deficit of the United States with Japan during such year that does not exceed an amount that equals the applicable percentage of the baseline deficit that appears opposite such year: Calendar year Applicable percentage of baseline deficit 1994.......................................... 80 percent 1995.......................................... 60 percent 1996.......................................... 40 percent 1997.......................................... 20 percent 1998.......................................... 0 percent (2) Special rule for 1998.--For calendar year 1998, the 0 percent trade deficit reduction target shall be treated as having been met if the merchandise trade deficit of the United States with Japan during such year does not exceed-- (A) an amount equal to 5 percent of the value of the aggregate bilateral merchandise trade between the United States and Japan during such year; or (B) $5,000,000,000. (b) Computations.-- (1) In general.--Not later than January 1 following each calendar year listed in subsection (a)(1), the Secretary shall compute whether the trade deficit reduction target for such year was met. (2) Announcement of import restriction implementation period.--If the Secretary finds under paragraph (1) that the trade deficit reduction target specified under subsection (a) for a calendar year was not met, the Secretary shall announce, by publication in the Federal Register, that the import restriction implementation period is in effect beginning on January 1 of the year after the year to which the finding applies. SEC. 202. COMPUTATION OF IMPORT RESTRICTIONS IF TRADE DEFICIT REDUCTION TARGET NOT MET. (a) In General.--On January 1 of the first calendar year (and each calendar year thereafter) for which an import restriction implementation period is in effect, the Secretary shall compute and publish in the Federal Register the quantitative import restrictions for such calendar year. (b) Computation.-- (1) In general.--For purposes of subsection (a), the term ``quantitative import restrictions'' means the aggregate quantity of Japanese motor vehicles and the aggregate quantity of Japanese motor vehicle parts that may be entered into the United States (in accordance with paragraph (2) or (3)) for a calendar year described in subsection (a). (2) First year restrictions.--The aggregate quantity of Japanese motor vehicles and Japanese motor vehicle parts that may be entered into the United States, during the first calendar year for which an import restriction implementation period is in effect, may not exceed the aggregate quantity of such motor vehicles and the aggregate quantity of such motor vehicle parts entered into the United States during 1993, reduced by 20 percent. (3) Subsequent years.--In the case of any calendar year for which an import restriction period is in effect after the first such calendar year, the aggregate quantity of Japanese motor vehicles and Japanese motor vehicle parts that may be entered into the United States shall not exceed the amount of such motor vehicles and motor vehicle parts entered during the most recent preceding calendar year for which an import restriction implementation period was in effect, reduced by 20 percent. (4) Administration.--In order to prevent import surging or to otherwise ensure the efficient administration of this Act, the Secretary may impose temporary quantitative import restrictions on Japanese motor vehicles and Japanese motor vehicle parts entered during the first 3 months of a calendar year in an import restriction implementation period. SEC. 203. REPORTS. Within 30 days after a computation is made under section 201 or 202 with respect to a calendar year, the Secretary shall submit to the Congress a report setting forth the bases of the computation. SEC. 204. SENSE OF CONGRESS REGARDING ACHIEVEMENT OF MERCHANDISE TRADE DEFICIT REDUCTION TARGETS. It is the sense of the Congress that representatives of the United States and Japanese Governments should undertake continuing discussions regarding the means and measures, to be selected by the Japanese Government, to achieve the merchandise trade deficit reduction targets required under section 201(a). During the discussions, the Trade Representative should particularly address market access priorities for United States exports to Japan.
summary: TABLE OF CONTENTS: Title I: Findings and Definitions Title II: Merchandise Trade Deficit Reduction United States-Japan Trade Equalizing Act of 1993 - Title I: Findings and Definitions - Sets forth congressional findings and purposes with respect to access to Japanese markets by U.S. manufacturers of motor vehicles and motor vehicle parts. Title II: Merchandise Trade Deficit Reduction - Sets forth annual merchandise trade deficit reduction targets with respect to Japan's trade deficit with the United States. Requires the Secretary of Commerce to: (1) compute annually whether the target has been met for each year; (2) publish in the Federal Register that the import restriction implementation period is in effect for the year following the year a target has not been met; and (3) compute annually and publish in the Federal Register the quantitative import restrictions for years in which import restrictions are effective. Prohibits the quantity of Japanese motor vehicles and parts that may be entered into the United States in: (1) the first year in which a restriction is in effect from exceeding the quantity of such vehicles and parts entered during 1993, reduced by 20 percent; and (2) subsequent years from exceeding the quantity entered during the most recent year for which a restriction was in effect, reduced by 20 percent. Authorizes the Secretary to impose temporary quantitative import restrictions on such motor vehicles and parts during the first three months of an import restriction implementation period in order to prevent surging. Expresses the sense of the Congress that representatives of the U.S. and Japanese Governments should undertake continuing discussions regarding the measures to be selected by the Japanese Government to achieve the merchandise trade deficit reduction targets.