§2464. Limitations on preferential treatment

(a) Withdrawal, suspension, or limitation of duty-free treatment; reporting requirements

(1) The President may withdraw, suspend, or limit the application of the duty-free treatment accorded under section 2461 of this title with respect to any article or with respect to any country; except that no rate of duty may be established in respect of any article pursuant to this section other than the rate which would apply but for this subchapter. In taking any action under this subsection, the President shall consider the factors set forth in sections 2461 and 2462(c) of this title.

(2) The President shall, as necessary, advise the Congress and, by no later than January 4, 1988, submit to the Congress a report on the application of sections 2461 and 2462(c) of this title, and the actions the President has taken to withdraw, to suspend, or to limit the application of duty-free treatment with respect to any country which has failed to adequately take the actions described in section 2462(c) of this title.

(b) Withdrawal or suspension of designation as beneficiary developing country

The President shall, after complying with the requirements of section 2462(a)(2) of this title, withdraw or suspend the designation of any country as a beneficiary developing country if, after such designation, he determines that as the result of changed circumstances such country would be barred from designation as a beneficiary developing country under section 2462(b) of this title. Such country shall cease to be a beneficiary developing country on the day on which the President issues an Executive order or Presidential proclamation revoking his designation of such country under section 2462 of this title.

(c) Beneficiary developing country; determinations, treatment, reviews, etc.

(1) Subject to paragraphs (2) through (7) and subsection (d) of this section, whenever the President determines that any country-

(A) has exported (directly or indirectly) to the United States during a calendar year a quantity of an eligible article having an appraised value in excess of an amount which bears the same ratio to $25,000,000 as the gross national product of the United States for the preceding calendar year (as determined by the Department of Commerce) bears to the gross national product of the United States for calendar year 1974; or

(B) has exported (either directly or indirectly) to the United States a quantity of any eligible article equal to or exceeding 50 percent of the appraised value of the total imports of such article into the United States during any calendar year;

then, not later than July 1 of the next calendar year, such country shall not be treated as a beneficiary developing country with respect to such article.

(2)(A) Not later than January 4, 1987, and periodically therafter,¹ the President shall conduct a general review of eligible articles based on the considerations described in section 2461 or 2462(c) of this title.

(B) If, after any review under subparagraph (A), the President determines that this subparagraph should apply because a beneficiary developing country has demonstrated a sufficient degree of competitiveness (relative to other beneficiary developing countries) with respect to any eligible article, then paragraph (1) shall be applied to such country with respect to such article by substituting-

(i) "1984" for "1974" in subparagraph (A), and

(ii) "25 percent" for "50 percent" in subparagraph (B).

(3)(A) Not earlier than January 4, 1987, the President may waive the application of this subsection with respect to any eligible article of any beneficiary developing country if, before July 1 of the calendar year beginning after the calendar year for which a determination described in paragraph (1) was made with respect to such eligible article, the President-

(i) receives the advice of the International Trade Commission on whether any industry in the United States is likely to be adversely affected by such waiver,

(ii) determines, based on the considerations described in sections 2461 and 2462(c) of this title and the advice described in clause (i), that such waiver is in the national economic interest of the United States, and

(iii) publishes the determination described in clause (ii) in the Federal Register.

(B) In making any determination under subparagraph (A), the President shall give great weight to-

(i) the extent to which the beneficiary developing country has assured the United States that such country will provide equitable and reasonable access to the markets and basic commodity resources of such country, and

(ii) the extent to which such country provides adequate and effective means under its law for foreign nationals to secure, to exercise, and to enforce exclusive rights in intellectual property, including patent, trademark, and copyright rights.

(C) Any waiver granted pursuant to this paragraph shall remain in effect until the President determines that such waiver is no longer warranted due to changed circumstances.

(D)(i) The President may not exercise the waiver authority provided under subparagraph (A) with respect to a quantity of eligible articles entered in any calendar year which exceeds an aggregate value equal to 30 percent of the total value of all articles which entered duty-free under this subchapter during the preceding calendar year.

(ii) The President may not exercise the waiver authority provided under subparagraph (A) with respect to a quantity of eligible articles entered during any calendar year beginning after 1986 the aggregate value of which exceeds 15 percent of the total value of all articles that have entered duty-free under this subchapter during the preceding calendar year from those beneficiary developing countries which for the preceding calendar year-

(I) had a per capita gross national product (calculated on the basis of the best available information, including that of the World Bank) of $5,000 or more; or

(II) had exported (either directly or indirectly) to the United States a quantity of articles that was duty-free under this subchapter that had an appraised value of more than 10 percent of the total imports of all articles that entered duty-free under this subchapter during that year.

(iii) There shall be counted against the limitations imposed under clauses (i) and (ii) for any calendar year only that quantity of any eligible article of any country that-

(I) entered duty-free under this title during such calendar year; and

(II) is in excess of the quantity of that article that would have been so entered during such calendar year if the 1974 limitation applied under paragraph (1)(A) and the 50 percent limitation applied under paragraph (1)(B).

(4) Except in any case to which paragraph (2)(B) applies, the President may waive the application of this subsection if, before July 1 of the calendar year beginning after the calendar year for which a determination described in paragraph (1) was made, the President determines and publishes in the Federal Register that, with respect to such country-

(A) there has been an historical preferential trade relationship between the United States and such country,

(B) there is a treaty or trade agreement in force covering economic relations between such country and the United States, and

(C) such country does not discriminate against, or impose unjustifiable or unreasonable barriers to, United States commerce.

(5) A country which is no longer treated as a beneficiary developing country with respect to an eligible article by reason of this subsection may be redesignated a beneficiary developing country with respect to such article, subject to the provisions of sections 2461 and 2462 of this title, if imports of such article from such country did not exceed the limitations in paragraph (1) (after application of paragraph (2)) during the preceding calendar year.

(6)(A) This subsection shall not apply to any beneficiary developing country which the President determines, based on the considerations described in sections 2461 and 2462(c) of this title, to be a least-developed beneficiary developing country.

(B) The President shall-

(i) make a determination under subparagraph (A) with respect to each beneficiary developing country before July 4, 1985, and periodically thereafter, and

(ii) notify the Congress at least 60 days before any such determination becomes final.

(7) For purposes of this subsection, the term "country" does not include an association of countries which is treated as one country under section 2462(a)(3) of this title, but does include a country which is a member of any such association.

(d) Domestic non-production of like or directly competitive articles

(1) Subsection (c)(1)(B) of this section (after application of subsection (c)(2) of this section) shall not apply with respect to any eligible article if a like or directly competitive article is not produced in the United States on January 3, 1985.

(2) The President may disregard subsection (c)(1)(B) of this section with respect to any eligible article if the appraised value of the total imports of such article into the United States during the preceding calendar year is not in excess of an amount which bears the same ratio to $5,000,000 as the gross national product of the United States for that calendar year (as determined by the Department of Commerce) bears to the gross national product of the United States for calendar year 1979.

(e) Coffee imported into Puerto Rico

No action pursuant to section 2461 of this title may affect any tariff duty imposed by the Legislature of Puerto Rico pursuant to section 1319 of this title on coffee imported into Puerto Rico.

(f) Per capita gross national product of beneficiary developing country for determination year

(1) If the President determines that the per capita gross national product (calculated on the basis of the best available information, including that of the World Bank) of any beneficiary developing country for any calendar year (hereafter in this subsection referred to as the "determination year") after 1984, exceeds the applicable limit for the determination year-

(A) subsection (c)(1)(B) of this section shall be applied for the 2-year period beginning on July 1 of the calendar year succeeding the determination year by substituting "25 percent" for "50 percent", and

(B) such country shall not be treated as a beneficiary developing country under this subchapter after the close of such 2-year period.

(2)(A) For purposes of this subsection, the term "applicable limit" means the sum of-

(i) $8,500, plus

(ii) 50 percent of the amount determined under subparagraph (B) for the determination year.

(B) The amount determined under this subparagraph for the determination year is an amount equal to-

(i) $8,500, multiplied by

(ii) the percentage determined by dividing-

(I) the excess, if any, of the gross national product of the United States (as determined by the Secretary of Commerce) for the determination year over the gross national product of the United States for 1984, by

(II) the gross national product for 1984.

( Pub. L. 93–618, title V, §504, Jan. 3, 1975, 88 Stat. 2070 ; Pub. L. 96–39, title XI, §§1106(g)(3), 1111(a)(4), July 26, 1979, 93 Stat. 313 , 315; Pub. L. 98–573, title V, §505, Oct. 30, 1984, 98 Stat. 3020 ; Pub. L. 99–47, §8(b)(2), June 11, 1985, 99 Stat. 85 ; Pub. L. 99–514, title XVIII, §1887(a)(6), Oct. 22, 1986, 100 Stat. 2923 .)

Amendments

1986-Subsec. (c)(3)(D)(ii). Pub. L. 99–514 in introductory provisions struck out "from any beneficiary developing country" after "eligible articles entered" and substituted "1986 the aggregate value of which exceeds 15" for "1984 which exceeds 15" and "from those beneficiary developing countries which for the preceding calendar year" for "if for the preceding calendar year such beneficiary developing country".

1985-Subsec. (b). Pub. L. 99–47 inserted "or Presidential proclamation" after "Executive order".

1984-Subsec. (a). Pub. L. 98–573, §505(a), designated existing provisions as par. (1) and added par. (2).

Subsec. (c). Pub. L. 98–573, §505(b), amended provisions generally, making changes summarized as follows:

Subsec. (c)(1). Pub. L. 98–573, §505(b), substituted "Subject to paragraphs (2) through (7) and subsection (d) of this section, whenever" for "Whenever" in provisions preceding par. (1), and, in provision following lettered subparagraphs, substituted requirement that, not later than July 1 of the next calendar year, such country shall not be treated as a beneficiary developing country with respect to such article for requirement that not later than 90 days after the close of such calendar year such country would not be treated as a beneficiary developing country with respect to such article unless the President made and published in the Federal Register certain determinations with respect to such country. See subsec. (c)(4).

Subsec. (c)(1)(A). Pub. L. 98–573, §505(b), substituted "year (as determined by the Department of Commerce) bears to the gross national product of the United States for calendar year 1974; or" for "year, as determined by the Department of Commerce, bears to the gross national product of the United States for calender year 1974, or".

Subsec. (c)(1)(B). Pub. L. 98–573, §505(b), substituted "has exported" for "except as provided in subsection (d) of this section, has exported" and substituted a semicolon for the comma after "any calendar year".

Subsec. (c)(2) to (4). Pub. L. 98–573, §505(b), added pars. (2) to (4). Former pars. (2) and (3) redesignated (5) and (7), respectively.

Subsec. (c)(5). Pub. L. 98–573, §505(b), redesignated former par. (2) as (5) and substituted provisions permitting countries formerly treated as beneficiary developing countries to be redesignated as beneficiary developing countries subject to sections 2461 and 2462 of this title if imports of the eligible article from such country did not exceed the limitations in par. (1) (after application of par. (2)) for provisions permitting redesignation of such countries as beneficiary developing countries subject to section 2462 of this title if imports of such article from such country did not exceed the limitations in par. (1).

Subsec. (c)(6). Pub. L. 98–573, §505(b), added par. (6).

Subsec. (c)(7). Pub. L. 98–573, §505(b), redesignated former par (3) as (7).

Subsec. (d)(1). Pub. L. 98–573, §505(b), designated existing first sentence as par. (1) and substituted "Subsection (c)(1)(B) of this section (after application of subsection (c)(2) of this section) shall not apply with respect to any eligible article if a like or directly competitive article is not produced in the United States on January 3, 1985" for "Subsection (c)(1)(B) of this section does not apply with respect to any eligible article if a like or directly competitive article is not produced on January 3, 1975, in the United States".

Subsec. (d)(2). Pub. L. 98–573, §505(b), designated existing second sentence as par. (2) and substituted "$5,000,000 as the gross national product of the United States for that calendar year (as determined by the Department of Commerce) bears to the gross national product of the United States for calendar year 1979" for "$1,000,000 as the gross national product of the United States for that calendar year, as determined by the Department of Commerce, bears to the gross national product of the United States for the calendar year 1979".

Subsec. (f). Pub. L. 98–573, §505(c), added subsec. (f).

1979-Subsec. (c)(1). Pub. L. 96–39, §1106(g)(3), substituted "90 days" and "90th day" for "60 days" and "60th day", respectively, in provisions after subpar. (B).

Subsec. (c)(3). Pub. L. 96–39, §1111(a)(4)(A), added par. (3).

Subsec. (d). Pub. L. 96–39, §1111(a)(4)(B), provided that the President may disregard subsection (c)(1)(B) of this section with respect to any eligible article if the appraised value of the total imports of that article into the United States during the preceding calendar year is not in excess of an amount which bears the same ratio to $1,000,000 as the gross national product of the United States for that calendar year, as determined by the Department of Commerce, bears to the gross national product of the United States for calendar year 1979.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–573 effective Jan. 4, 1985, see section 508 of Pub. L. 98–573, set out as a note under section 2461 of this title.

Effective Date of 1979 Amendment

Amendment by section 1106(g)(3) of Pub. L. 96–39 effective July 26, 1979, see section 1114 of Pub. L. 96–39, set out as an Effective Date note under section 2581 of this title.

Section 1111(b) of Pub. L. 96–39 provided that: "The amendments made by paragraph (4) of subsection (a) [amending this section] shall take effect on April 1, 1980."

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1801–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of Title 26, Internal Revenue Code.

Section Referred to in Other Sections

This section is referred to in sections 1202, 3011 of this title.

¹ So in original. Probably should be "thereafter,".