((a)) ** Mandatory action**
((1)) If the United States Trade Representative determines under that—
((A)) the rights of the United States under any trade agreement are being denied; or
((B)) an act, policy, or practice of a foreign country—
((i)) violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement, or
((ii)) is unjustifiable and burdens or restricts United States commerce;
((2)) The Trade Representative is not required to take action under paragraph (1) in any case in which—
((A)) the Dispute Settlement Body (as defined in ) has adopted a report, or a ruling issued under the formal dispute settlement proceeding provided under any other trade agreement finds, that—
((i)) the rights of the United States under a trade agreement are not being denied, or
((ii)) the act, policy, or practice—
((I)) is not a violation of, or inconsistent with, the rights of the United States, or
((II)) does not deny, nullify, or impair benefits to the United States under any trade agreement; or
((B)) the Trade Representative finds that—
((i)) the foreign country is taking satisfactory measures to grant the rights of the United States under a trade agreement,
((ii)) the foreign country has—
((I)) agreed to eliminate or phase out the act, policy, or practice, or
((II)) agreed to an imminent solution to the burden or restriction on United States commerce that is satisfactory to the Trade Representative,
((iii)) it is impossible for the foreign country to achieve the results described in clause (i) or (ii), as appropriate, but the foreign country agrees to provide to the United States compensatory trade benefits that are satisfactory to the Trade Representative,
((iv)) in extraordinary cases, where the taking of action under this subsection would have an adverse impact on the United States economy substantially out of proportion to the benefits of such action, taking into account the impact of not taking such action on the credibility of the provisions of this subchapter, or
((v)) the taking of action under this subsection would cause serious harm to the national security of the United States.
((3)) Any action taken under paragraph (1) to eliminate an act, policy, or practice shall be devised so as to affect goods or services of the foreign country in an amount that is equivalent in value to the burden or restriction being imposed by that country on United States commerce.
((b)) ** Discretionary action** If the Trade Representative determines under that—
((1)) an act, policy, or practice of a foreign country is unreasonable or discriminatory and burdens or restricts United States commerce, and
((2)) action by the United States is appropriate, the Trade Representative shall take all appropriate and feasible action authorized under subsection (c), subject to the specific direction, if any, of the President regarding any such action, and all other appropriate and feasible action within the power of the President that the President may direct the Trade Representative to take under this subsection, to obtain the elimination of that act, policy, or practice. Actions may be taken that are within the power of the President with respect to trade in any goods or services, or with respect to any other area of pertinent relations with the foreign country.
((c)) ** Scope of authority**
((1)) For purposes of carrying out the provisions of subsection (a) or (b) or , the Trade Representative is authorized to—
((A)) suspend, withdraw, or prevent the application of, benefits of trade agreement concessions to carry out a trade agreement with the foreign country referred to in such subsection;
((B)) impose duties or other import restrictions on the goods of, and, notwithstanding any other provision of law, fees or restrictions on the services of, such foreign country for such time as the Trade Representative determines appropriate;
((C)) in a case in which the act, policy, or practice also fails to meet the eligibility criteria for receiving duty-free treatment under subsections (b) and (c) of , subsections (b) and (c) of , or subsections (c) and (d) of , withdraw, limit, or suspend such treatment under such provisions, notwithstanding the provisions of subsection (a)(3) of this section; or
((D)) enter into binding agreements with such foreign country that commit such foreign country to—
((i)) eliminate, or phase out, the act, policy, or practice that is the subject of the action to be taken under subsection (a) or (b),
((ii)) eliminate any burden or restriction on United States commerce resulting from such act, policy, or practice, or
((iii)) provide the United States with compensatory trade benefits that—
((I)) are satisfactory to the Trade Representative, and
((II)) meet the requirements of paragraph (4).
((2))
((A)) Notwithstanding any other provision of law governing any service sector access authorization, and in addition to the authority conferred in paragraph (1), the Trade Representative may, for purposes of carrying out the provisions of subsection (a) or (b)—
((i)) restrict, in the manner and to the extent the Trade Representative determines appropriate, the terms and conditions of any such authorization, or
((ii)) deny the issuance of any such authorization.
((B)) Actions described in subparagraph (A) may only be taken under this section with respect to service sector access authorizations granted, or applications therefor pending, on or after the date on which—
((i)) a petition is filed under , or
((ii)) a determination to initiate an investigation is made by the Trade Representative under .
((C)) Before the Trade Representative takes any action under this section involving the imposition of fees or other restrictions on the services of a foreign country, the Trade Representative shall, if the services involved are subject to regulation by any agency of the Federal Government or of any State, consult, as appropriate, with the head of the agency concerned.
((3)) The actions the Trade Representative is authorized to take under subsection (a) or (b) may be taken against any goods or economic sector—
((A)) on a nondiscriminatory basis or solely against the foreign country described in such subsection, and
((B)) without regard to whether or not such goods or economic sector were involved in the act, policy, or practice that is the subject of such action.
((4)) Any trade agreement described in paragraph (1)(D)(iii) shall provide compensatory trade benefits that benefit the economic sector which includes the domestic industry that would benefit from the elimination of the act, policy, or practice that is the subject of the action to be taken under subsection (a) or (b), or benefit the economic sector as closely related as possible to such economic sector, unless—
((A)) the provision of such trade benefits is not feasible, or
((B)) trade benefits that benefit any other economic sector would be more satisfactory than such trade benefits.
((5)) If the Trade Representative determines that actions to be taken under subsection (a) or (b) are to be in the form of import restrictions, the Trade Representative shall—
((A)) give preference to the imposition of duties over the imposition of other import restrictions, and
((B)) if an import restriction other than a duty is imposed, consider substituting, on an incremental basis, an equivalent duty for such other import restriction.
((6)) Any action taken by the Trade Representative under this section with respect to export targeting shall, to the extent possible, reflect the full benefit level of the export targeting to the beneficiary over the period during which the action taken has an effect.
((d)) ** Definitions and special rules** For purposes of this subchapter—
((1)) The term “commerce” includes, but is not limited to—
((A)) services (including transfers of information) associated with international trade, whether or not such services are related to specific goods, and
((B)) foreign direct investment by United States persons with implications for trade in goods or services.
((2)) An act, policy, or practice of a foreign country that burdens or restricts United States commerce may include the provision, directly or indirectly, by that foreign country of subsidies for the construction of vessels used in the commercial transportation by water of goods between foreign countries and the United States.
((3))
((A)) An act, policy, or practice is unreasonable if the act, policy, or practice, while not necessarily in violation of, or inconsistent with, the international legal rights of the United States, is otherwise unfair and inequitable.
((B)) Acts, policies, and practices that are unreasonable include, but are not limited to, any act, policy, or practice, or any combination of acts, policies, or practices, which—
((i)) denies fair and equitable—
((I)) opportunities for the establishment of an enterprise,
((II)) provision of adequate and effective protection of intellectual property rights notwithstanding the fact that the foreign country may be in compliance with the specific obligations of the Agreement on Trade-Related Aspects of Intellectual Property Rights referred to in ,
((III)) nondiscriminatory market access opportunities for United States persons that rely upon intellectual property protection, or
((IV)) market opportunities, including the toleration by a foreign government of systematic anticompetitive activities by enterprises or among enterprises in the foreign country that have the effect of restricting, on a basis that is inconsistent with commercial considerations, access of United States goods or services to a foreign market,
((ii)) constitutes export targeting,
((iii)) constitutes a persistent pattern of conduct that—
((I)) denies workers the right of association,
((II)) denies workers the right to organize and bargain collectively,
((III)) permits any form of forced or compulsory labor,
((IV)) fails to provide a minimum age for the employment of children, or
((V)) fails to provide standards for minimum wages, hours of work, and occupational safety and health of workers, or
((iv)) constitutes a persistent pattern of conduct by the government of a foreign country under which that government fails to effectively enforce commitments under agreements to which the foreign country and the United States are parties, including with respect to trade in goods, trade in services, trade in agriculture, foreign investment, intellectual property, digital trade in goods and services and cross-border data flows, regulatory practices, state-owned and state-controlled enterprises, localization barriers to trade, labor and the environment, anticorruption, trade remedy laws, textiles, and commercial partnerships.
((C))
((i)) Acts, policies, and practices of a foreign country described in subparagraph (B)(iii) shall not be treated as being unreasonable if the Trade Representative determines that—
((I)) the foreign country has taken, or is taking, actions that demonstrate a significant and tangible overall advancement in providing throughout the foreign country (including any designated zone within the foreign country) the rights and other standards described in the subclauses of subparagraph (B)(iii), or
((II)) such acts, policies, and practices are not inconsistent with the level of economic development of the foreign country.
((ii)) The Trade Representative shall publish in the Federal Register any determination made under clause (i), together with a description of the facts on which such determination is based.
((D)) For purposes of determining whether any act, policy, or practice is unreasonable, reciprocal opportunities in the United States for foreign nationals and firms shall be taken into account, to the extent appropriate.
((E)) The term “export targeting” means any government plan or scheme consisting of a combination of coordinated actions (whether carried out severally or jointly) that are bestowed on a specific enterprise, industry, or group thereof, the effect of which is to assist the enterprise, industry, or group to become more competitive in the export of a class or kind of merchandise.
((F))
((i)) For the purposes of subparagraph (B)(i)(II), adequate and effective protection of intellectual property rights includes adequate and effective means under the laws of the foreign country for persons who are not citizens or nationals of such country to secure, exercise, and enforce rights and enjoy commercial benefits relating to patents, trademarks, copyrights and related rights, mask works, trade secrets, and plant breeder’s rights.
((ii)) For purposes of subparagraph (B)(i)(IV), the denial of fair and equitable nondiscriminatory market access opportunities includes restrictions on market access related to the use, exploitation, or enjoyment of commercial benefits derived from exercising intellectual property rights in protected works or fixations or products embodying protected works.
((4))
((A)) An act, policy, or practice is unjustifiable if the act, policy, or practice is in violation of, or inconsistent with, the international legal rights of the United States.
((B)) Acts, policies, and practices that are unjustifiable include, but are not limited to, any act, policy, or practice described in subparagraph (A) which denies national or most-favored-nation treatment or the right of establishment or protection of intellectual property rights.
((5)) Acts, policies, and practices that are discriminatory include, when appropriate, any act, policy, and practice which denies national or most-favored-nation treatment to United States goods, services, or investment.
((6)) The term “service sector access authorization” means any license, permit, order, or other authorization, issued under the authority of Federal law, that permits a foreign supplier of services access to the United States market in a service sector concerned.
((7)) The term “foreign country” includes any foreign instrumentality. Any possession or territory of a foreign country that is administered separately for customs purposes shall be treated as a separate foreign country.
((8)) The term “Trade Representative” means the United States Trade Representative.
((9)) The term “interested persons”, only for purposes of sections 2412(a)(4)(B), 2414(b)(1)(A), 2416(c)(2), and 2417(a)(2) of this title, includes, but is not limited to, domestic firms and workers, representatives of consumer interests, United States product exporters, and any industrial user of any goods or services that may be affected by actions taken under subsection (a) or (b).
