109TH CONGRESS 

1ST SESSION H. R. 3283

AN ACT

To enhance resources to enforce United States 

trade rights. 

109TH CONGRESS 

1ST SESSION H. R. 3283

AN ACT

To enhance resources to enforce United States trade rights.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘United States Trade 

3 Rights Enforcement Act’’. 

4 SEC. 2. SENSE OF CONGRESS. 

5 It is the sense of Congress that—

6 (1) United States producers that believe they 

7 are injured by subsidized imports from nonmarket 

8 economy countries have not been able to obtain relief 

9 through countervailing duty actions because the De10 partment of Commerce has declined to make coun11 tervailing duty determinations for nonmarket econ12 omy countries in part because it lacks explicit legal 

13 authority to do so; 

14 (2) explicitly making the countervailing duty 

15 law under subtitle A of title VII of the Tariff Act 

16 of 1930 (19 U.S.C. 1671 et seq.) applicable to ac17 tions by nonmarket economy countries would give 

18 United States producers access to import relief 

19 measures that directly target government subsidies; 

20 (3) the Bureau of Customs and Border Protec21 tion of the Department of Homeland Security has 

22 encountered particular problems in collecting coun23 tervailing and antidumping duties from new shippers 

24 who default on their bonding obligations; 

25 (4) this behavior may detract from the ability 

26 of United States companies to recover from competi-
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1 tion found to be unfair under international trade 

2 laws; 

3 (5) accordingly, it is appropriate, for a test pe4 riod, to suspend the availability of bonds for new 

5 shippers and instead require cash deposits; 

6 (6) more analysis and assessment is needed to 

7 determine the appropriate policy to respond to this 

8 and other problems experienced in the collection of 

9 duties and the impact that policy changes could have 

10 on legitimate United States trade and United States 

11 trade obligations; 

12 (7) given the developments in the ongoing 

13 World Trade Organization (WTO) negotiations re14 lating to trade remedies, Congress reiterates its re15 solve as expressed in House Concurrent Resolution 

16 262 (107th Congress), which was overwhelmingly 

17 approved by the House of Representatives on No18 vember 7, 2001, by a vote of 410 to 4; 

19 (8) the United States Trade Representative 

20 should monitor compliance by United States trading 

21 partners with their trade obligations and systemati22 cally identify areas of noncompliance; 

23 (9) the United States Trade Representative 

24 should then aggressively resolve noncompliance 
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1 through consultations with United States trading 

2 partners; 

3 (10) however, should efforts to resolve disputes 

4 through consultation fail, the United States Trade 

5 Representative should vigorously pursue United 

6 States rights through dispute settlement in every 

7 available forum; 

8 (11) given the huge growth in trade with the 

9 People’s Republic of China, its impact on the United 

10 States economy, and the complaints voiced by many 

11 United States interests that China is not complying 

12 with its international trade obligations, the United 

13 States Trade Representative should place particular 

14 emphasis on identifying and resolving disputes with 

15 China that limit United States exports, particularly 

16 concerning compliance with obligations relating to 

17 intellectual property rights and enforcement, tariff 

18 and nontariff barriers, subsidies, technical barriers 

19 to trade, sanitary and phytosanitary issues, non20 market-based industrial policies, distribution rights, 

21 and regulatory transparency; 

22 (12) in addition, the United States Trade Rep23 resentative should place particular emphasis on 

24 trade barriers imposed by Japan, specifically the 

25 Japanese trade ban on United States beef without 
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1 scientific justification, the Japanese sanitary and 

2 phytosanitary restrictions on United States agricul3 tural products, Japanese policies on pharmaceutical 

4 and medical device reference pricing, insurance 

5 cross-subsidization, and privatization in a variety of 

6 sectors that discriminate against United States com7 panies; 

8 (13) the fixed exchange rate that the People’s 

9 Republic of China has maintained until recently has 

10 been a substantial distortion to world markets, 

11 blocking the price mechanism, impeding adjustment 

12 of international imbalances, and serving as a source 

13 of large and increasing risk to the Chinese economy; 

14 (14) such behavior has effectively prevented 

15 market forces from operating efficiently in the Peo16 ple’s Republic of China, distorting world trade; 

17 (15) in a welcome move, the People’s Republic 

18 of China has now begun to move to a more flexible 

19 exchange rate, and it should continue to so move to 

20 a market-based exchange rate as soon as possible; 

21 (16) in light of this recent positive development, 

22 the Secretary of Treasury should provide to Con23 gress a periodic assessment of the mechanism adopt24 ed by the Chinese Government to relate its currency 

25 to a basket of foreign currencies and the degree to 
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1 which the application of this mechanism moves the 

2 currency closer to a market-based representation of 

3 its value; 

4 (17) in addition, Japan’s policy of intervening 

5 to influence the value of its currency and its prolific 

6 barriers to trade create distortions that disadvantage 

7 United States exporters; 

8 (18) this adverse impact is magnified by Ja9 pan’s role in the global marketplace, combined with 

10 its chronic surplus, weak economy, deflationary 

11 economy, low growth rate, and lack of consumer 

12 spending; and 

13 (19) accordingly, the United States Trade Rep14 resentative should have additional resources in the 

15 Office of the General Counsel, the Office of Moni16 toring and Enforcement, the Office of China Affairs, 

17 and the Office of Japan, Korea, and APEC Affairs 

18 to address a variety of needs that will best enable 

19 United States companies, farmers, and workers to 

20 benefits from the trade agreements to which the 

21 United States has around the world. 

22 SEC. 3. APPLICATION OF COUNTERVAILING DUTIES TO 

23 NONMARKET ECONOMY COUNTRIES. 

24 (a) AMENDMENTS.—
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1 (1) COUNTERVAILING DUTIES IMPOSED.—Sec2 tion 701(a)(1) of the Tariff Act of 1930 (19 U.S.C. 

3 1671(a)(1)) is amended by inserting ‘‘(including a 

4 nonmarket economy country)’’ after ‘‘country’’ each 

5 place it appears. 

6 (2) DEFINITION OF COUNTERVAILABLE SUB7 SIDY.—Section 771(5)(E) of such Act (19 U.S.C. 

8 1677(5)(E)) is amended by adding at the end the 

9 following new sentences: ‘‘With respect to the Peo10 ple’s Republic of China, if the administering author11 ity encounters special difficulties in calculating the 

12 amount of a benefit under clause (i), (ii), (iii), or 

13 (iv) of this subparagraph, the administering author14 ity may use methodologies for identifying and meas15 uring the subsidy benefit which take into account 

16 the possibility that prevailing terms and conditions 

17 in China may not always be available as appropriate 

18 benchmarks. When applying such methodologies, 

19 where practicable, the administering authority 

20 should adjust such prevailing terms and conditions 

21 before considering the use of terms and conditions 

22 prevailing outside China.’’. 

23 (b) PROHIBITION ON DOUBLE COUNTING.—In apply24 ing section 701(a)(1) of the Tariff Act of 1930, as amend25 ed by subsection (a), to a class or kind of merchandise 
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1 of a nonmarket economy country, the administering au2 thority shall ensure that—

3 (1) any countervailable subsidy is not double 

4 counted in an antidumping order under section 731 

5 of such Act (19 U.S.C. 1673) on the same class or 

6 kind of merchandise of the country; and 

7 (2) the application of section 701(a)(1) of such 

8 Act is consistent with the international obligations of 

9 the United States. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 subsection (a) apply to any petition filed under section 702 

12 of the Tariff Act of 1930 (19 U.S.C. 1671a) on or after 

13 30 days after the date of the enactment of this Act, and 

14 the provisions contained in subsection (b) apply to any 

15 subsequent determination made under section 733, 735, 

16 or 751 of such Act (19 U.S.C. 1673b, 1673d, or 1675). 

17 SEC. 4. NEW SHIPPER REVIEW AMENDMENT. 

18 (a) SUSPENSION OF THE AVAILABILITY OF BONDS

19 TO NEW SHIPPERS.—Clause (iii) of section 751(a)(2)(B) 

20 of the Tariff Act of 1930 (19 U.S.C. 1675(a)(2)(B)(iii)) 

21 shall not be effective during the 3-year period beginning 

22 on the date of the enactment of this Act. 

23 (b) REPORT ON THE IMPACT OF THE SUSPENSION.—

24 Not later than 2 years after the date of the enactment 

25 of this Act, the Secretary of the Treasury, in consultation 
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1 with the Secretary of Commerce, the United States Trade 

2 Representative, and the Secretary of Homeland Security, 

3 shall submit to the Committee on Finance of the Senate 

4 and the Committee on Ways and Means of the House of 

5 Representatives a report containing—

6 (1) recommendations on whether the suspension 

7 of the effectiveness of section 751(a)(2)(B)(iii) of 

8 the Tariff Act of 1930 should be extended beyond 

9 the date provided in subsection (a) of this section; 

10 and 

11 (2) assessments of the effectiveness of any ad12 ministrative measures that have been implemented 

13 to address the difficulties giving rise to the suspen14 sion under subsection (a) of this section, including—

15 (A) problems in assuring the collection of 

16 antidumping duties on imports from new ship17 pers; and 

18 (B) burdens imposed on legitimate trade 

19 and commerce by the suspension of availability 

20 of bonds to new shippers by reason of the sus21 pension under subsection (a). 

22 (c) REPORT ON COLLECTION PROBLEMS AND ANAL23 YSIS OF PROPOSED SOLUTIONS.—

24 (1) REPORT.—Not later than 90 days after the 

25 date of the enactment of this Act, the Secretary of 
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1 the Treasury, in consultation with the Commissioner 

2 of the Bureau of Customs and Border Protection 

3 and the Secretary of Commerce, shall submit to the 

4 Committee on Ways and Means of the House of 

5 Representatives and the Committee on Finance of 

6 the Senate a report describing the major problems 

7 experienced in the collection of duties, including 

8 fraudulent activities intended to avoid payment of 

9 duties, with an estimate of the total amount of un10 collected duties for the previous fiscal year and a 

11 breakdown across product lines describing the rea12 sons duties were uncollected. 

13 (2) RECOMMENDATIONS.—The report shall 

14 make recommendations on additional actions to ad15 dress remaining problems related to duty collections 

16 and, for each recommendation, provide an analysis 

17 of how the recommendation would address the spe18 cific problem or problems cited and the impact that 

19 implementing the recommendation would have on 

20 international trade and commerce (including any ad21 ditional costs imposed on United States businesses 

22 and whether the implementation of the revision is 

23 likely to violate any international trade obligations). 
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1 SEC. 5. COMPREHENSIVE MONITORING OF COMPLIANCE BY 

2 THE PEOPLE’S REPUBLIC OF CHINA WITH ITS 

3 INTERNATIONAL TRADE OBLIGATIONS. 

4 (a) INTELLECTUAL PROPERTY RIGHTS COMPLI5 ANCE.—

6 (1) IN GENERAL.—In accordance with the 

7 terms of the Agreement of WTO Accession for the 

8 People’s Republic of China, subsequent agreements 

9 by Chinese authorities through the U.S.-China Joint 

10 Commission on Commerce and Trade (JCCT), and 

11 other obligations by Chinese officials related to its 

12 trade obligations, the United States Trade Rep13 resentative and the Secretary of Commerce shall un14 dertake to ensure that the Government of the Peo15 ple’s Republic China has taken the following steps: 

16 (A) The Chinese Government has increased 

17 the number of civil and criminal prosecutions of 

18 intellectual property rights violators by the end 

19 of 2005 to a level that significantly decreases 

20 the current amount of infringing products for 

21 sale within China. 

22 (B) China’s Supreme People’s Court, Su23 preme People’s Procuratorate, and Ministry of 

24 Public Security have issued draft guidelines for 

25 public comment to ensure the timely referral of 
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1 intellectual property rights violations from ad2 ministrative bodies to criminal prosecution. 

3 (C) The Chinese Ministry of Public Secu4 rity and the General Administration of Customs 

5 have issued regulations to ensure the timely 

6 transfer of intellectual property rights cases for 

7 criminal investigation. 

8 (D) The Chinese Ministry of Public Secu9 rity has established a leading group responsible 

10 for overall research, planning, and coordination 

11 of all intellectual property rights criminal en12 forcement to ensure a focused and coordinated 

13 nationwide enforcement effort. 

14 (E) The Chinese Government has estab15 lished a bilateral intellectual property rights law 

16 enforcement working group in cooperation with 

17 the United States whose members will cooper18 ate on enforcement activities to reduce cross19 border infringing activities. 

20 (F) The Chinese Government has aggres21 sively countered movie piracy by dedicating en22 forcement teams to pursue enforcement actions 

23 against pirates and has regularly instructed en24 forcement authorities nationwide that copies of 

25 films and audio-visual products still in censor-
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1 ship or import review or otherwise not yet au2 thorized for distribution are deemed pirated and 

3 subject to enhanced enforcement. 

4 (G) By the end of 2005, the Chinese Gov5 ernment has completed its legalization program 

6 to ensure that all central, provincial, and local 

7 government offices are using only licensed soft8 ware and by the end of 2006 has extended the 

9 program to enterprises (including state-owned 

10 enterprises). 

11 (H) The Chinese Government, having de12 clared that software end-user piracy is consid13 ered to constitute ‘‘harm to the public interest’’ 

14 and as such will be subject to administrative 

15 penalties nationwide, has initiated civil and 

16 criminal prosecutions of software end-user vio17 lators. 

18 (I) The Chinese Government has appointed 

19 an Intellectual Property Rights Ombudsman at 

20 the Chinese Embassy in Washington, D.C., to 

21 serve as the point of contact for United States 

22 companies, particularly small- and medium23 sized businesses, seeking to secure and enforce 

24 their intellectual property rights in China or ex-
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1 periencing intellectual property rights problems 

2 in China. 

3 (J) The relevant Chinese agencies, includ4 ing the Ministry of Commerce, the China 

5 Trademark Office, the State Intellectual Prop6 erty Office, and the National Copyright Admin7 istration of China have significantly improved 

8 intellectual property rights enforcement at trade 

9 shows and issued new regulations to achieve 

10 this goal. 

11 (K) Not later than June 30, 2006, the 

12 Chinese State Council has submitted to the Na13 tional People’s Congress the legislative package 

14 needed for China to accede to the World Intel15 lectual Property Organization (WIPO) Internet 

16 treaties. 

17 (L) The Chinese Government has taken 

18 steps to enforce intellectual property right laws 

19 against Internet piracy, including through en20 forcement at Internet cafes. 

21 (M) The Chinese Government, having con22 firmed that the criminal penalty thresholds in 

23 the 2004 Judicial Interpretation are applicable 

24 to sound recordings, has instituted civil and 

25 criminal prosecutions against such violators. 
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1 (N) The Chinese Government has initiated 

2 civil and criminal prosecutions against exporters 

3 of infringing recordings. 

4 (2) DISPUTE SETTLEMENT PROCEEDINGS IN

5 WTO.—If the President determines that the People’s 

6 Republic of China has not met each of the obliga7 tions described in subparagraphs (A) through (N) of 

8 paragraph (1) or taken steps that result in signifi9 cant improvements in protection of intellectual prop10 erty rights in accordance with its trade obligations, 

11 then the President shall assign such resources as are 

12 necessary to collect evidence of such trade agreement 

13 violations for use in dispute settlement proceedings 

14 against China in the World Trade Organization. 

15 (b) ACCESS FOR EXPORTS OF UNITED STATES

16 GOODS.—In accordance with the terms of the Agreement 

17 of WTO Accession for the People’s Republic of China, sub18 sequent agreements by Chinese authorities through the 

19 U.S.-China Joint Commission on Commerce and Trade 

20 (JCCT), and other obligations by Chinese officials related 

21 to its trade obligations, the United States Trade Rep22 resentative and the Secretary of Commerce shall under23 take to ensure that the Government of the People’s Re24 public of China has taken the following steps: 
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1 (1) China has taken steps to ensure that United 

2 States products can be freely distributed in China, 

3 including by approving a significant backlog of dis4 tribution license applications and by preparing a reg5 ulatory guide for businesses seeking to acquire dis6 tribution rights that expands on the guidelines an7 nounced in April 2005. 

8 (2) Chinese officials have permitted all enter9 prises in China, including those located in bonded 

10 zones, to acquire licenses to distribute goods 

11 throughout China. 

12 (3) The Chinese Government has submitted 

13 regulations on management of direct selling to the 

14 Chinese State Council for review and taken any ad15 ditional steps necessary to provide a legal basis for 

16 United States direct sales firms to sell United States 

17 goods directly to households in China. 

18 (4) The Chinese Government has issued final 

19 regulations on direct selling, including with respect 

20 to distribution of imported goods and fixed location 

21 requirements. 

22 (c) ACCESS FOR EXPORTS OF UNITED STATES SERV23 ICES.—In accordance with the terms of the Agreement of 

24 WTO Accession for the People’s Republic of China, subse25 quent agreements by Chinese authorities through the 
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1 U.S.-China Joint Commission on Commerce and Trade 

2 (JCCT), and other obligations by Chinese officials related 

3 to its trade obligations, the United States Trade Rep4 resentative and the Secretary of Commerce shall under5 take to ensure that the Government of the People’s Re6 public of China has taken the following steps: 

7 (1) The Chinese Government has convened a 

8 meeting of the U.S.-China Insurance Dialogue be9 fore the end of 2005 to discuss regulatory concerns 

10 and barriers to further liberalization of the sector. 

11 (2) The Chinese Government has made senior 

12 level officials available to meet under the JCCT In13 formation Technology Working Group to discuss 

14 capitalization requirements, resale services, and 

15 other issues as agreed to by the two sides. 

16 (d) ACCESS FOR UNITED STATES AGRICULTURE.—

17 In accordance with the terms of the Agreement of WTO 

18 Accession for the People’s Republic of China, subsequent 

19 agreements by Chinese authorities through the U.S.-China 

20 Joint Commission on Commerce and Trade (JCCT), and 

21 other obligations by Chinese officials related to its trade 

22 obligations, the United States Trade Representative and 

23 the Secretary of Agriculture shall undertake to ensure that 

24 the Government of the People’s Republic of China has 

25 taken the following steps: 
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1 (1) China has completed the regulatory ap2 proval process for a United States-produced corn 

3 biotech variety. 

4 (2) China’s Administration of Quality Super5 vision, Inspection and Quarantine has implemented 

6 the 2005 Memorandum of Understanding between 

7 the United States and China designed to facilitate 

8 cooperation on animal and plant health safety issues 

9 and improve efforts to expand United States access 

10 to China’s markets for agricultural commodities. 

11 (e) ACCOUNTING OF CHINESE SUBSIDIES.—In ac12 cordance with the terms of the Agreement of WTO Acces13 sion for the People’s Republic of China, subsequent agree14 ments by Chinese authorities through the U.S.-China 

15 Joint Commission on Commerce and Trade (JCCT), and 

16 other obligations by Chinese officials related to its trade 

17 obligations, the United States Trade Representative and 

18 the Secretary of Commerce shall undertake to ensure that 

19 the Government of the People’s Republic of China has pro20 vided a detailed accounting of its subsidies to the World 

21 Trade Organization by the end of 2005. 

22 (f) REPORTS.—

23 (1) BIANNUAL REPORT.—Not later than six 

24 months after the date of the enactment of this Act, 

25 and every six months thereafter, the President 
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1 should transmit to the Committee on Ways and 

2 Means of the House of Representatives and the 

3 Committee on Finance of the Senate a report that 

4 contains—

5 (A) a description of the specific steps 

6 taken by the Government of the People’s Re7 public of China to meet its obligations described 

8 in subsections (a) through (e) of this section 

9 (other than obligations described in subsections 

10 (a)(1)(A) and (G), (b)(1), (c)(1), and (e)); 

11 (B) an analysis of the extent to which Chi12 nese officials are attempting in good faith to 

13 meet such obligations; and 

14 (C) a description of the actions, if any, the 

15 President will take to obtain compliance by 

16 China if the President determines that the Chi17 nese Government is failing to meet such obliga18 tions, including pursuing United States rights 

19 under the dispute settlement provisions of the 

20 World Trade Organization, as appropriate. 

21 (2) MONTHLY REPORT.—Not later than 30 

22 days after the date of the enactment of this Act, and 

23 every 30 days thereafter, the President should trans24 mit to the Committee on Ways and Means of the 
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1 House of Representatives and the Committee on Fi2 nance of the Senate a report that contains—

3 (A) a description of the specific steps 

4 taken by the Government of the People’s Re5 public of China to meet its obligations described 

6 in subsections (a)(1)(A) and (G), (b)(1), (c)(1), 

7 and (e); 

8 (B) an analysis of the extent to which Chi9 nese officials are attempting in good faith to 

10 meet such obligations; and 

11 (C) a description of the actions, if any, the 

12 President will take to obtain compliance by 

13 China if the President determines that the Chi14 nese Government is failing to meet such obliga15 tions, including pursuing United States rights 

16 under the dispute settlement provisions of the 

17 World Trade Organization, as appropriate. 

18 SEC. 6. REPORTS ON CURRENCY MANIPULATION BY FOR19 EIGN COUNTRIES. 

20 (a) REPORT ON CURRENCY MANIPULATION.—Not 

21 later than 60 days after the date of the enactment of this 

22 Act, the Secretary of the Treasury shall submit to the ap23 propriate congressional committees a report that—

24 (1) defines currency manipulation; 
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1 (2) describes actions of foreign countries that 

2 will be considered to be currency manipulation; and 

3 (3) describes how statutory provisions address4 ing currency manipulation by trading partners of the 

5 United States contained in, and relating to, section 

6 40 of the Bretton Woods Agreements Act (22 

7 U.S.C. 286y) and sections 3004 and 3005 of the Ex8 change Rates and International Economic Policy Co9 ordination Act of 1988 (22 U.S.C. 5304 and 5305) 

10 can be better clarified administratively to provide for 

11 improved and more predictable evaluation. 

12 (b) REPORT ON ACTIONS BY CHINA.—

13 (1) IN GENERAL.—In light of the recent posi14 tive announcement by the Government of the Peo15 ple’s Republic of China with respect to increased ex16 change rate flexibility, the Secretary of the Treasury 

17 shall submit to the appropriate congressional com18 mittees a report that examines the mechanism 

19 adopted by the Chinese Government to relate its cur20 rency to a basket of foreign currencies and the de21 gree to which the application of this mechanism 

22 moves the currency closer to a market-based rep23 resentation of its value. 

24 (2) DEADLINE.— The initial report required by 

25 this subsection shall be submitted to the appropriate 
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1 congressional committees not later than 180 days 

2 after the date of the enactment of this Act and sub3 sequent reports shall be included in the report re4 quired under section 3005 of the Exchange Rates 

5 and International Economic Policy Coordination Act 

6 of 1988 (22 U.S.C. 5305). 

7 (c) DEFINITION.—In this section, the term ‘‘appro8 priate congressional committees’’ means—

9 (1) the Committee on Ways and Means and the 

10 Committee on Financial Services of the House of 

11 Representatives; and 

12 (2) the Committee on Finance and the Com13 mittee on Banking, Housing, and Urban Affairs of 

14 the Senate. 

15 SEC. 7. AUTHORIZATION OF APPROPRIATIONS FOR THE OF16 FICE OF THE UNITED STATES TRADE REP17 RESENTATIVE. 

18 (a) AUTHORIZATION OF APPROPRIATIONS.—

19 (1) IN GENERAL.—Section 141(g)(1)(A) of the 

20 Trade Act of 1974 (19 U.S.C. 2171(g)(1)(A)) is 

21 amended by striking clauses (i) and (ii) and insert22 ing the following: 

23 ‘‘(i) $44,779,000 for fiscal year 2006. 

24 ‘‘(ii) $47,018,000 for fiscal year 2007.’’. 
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1 (2) RULE OF CONSTRUCTION.—The amendment 

2 made by paragraph (1) shall not be construed to af3 fect the availability of funds appropriated pursuant 

4 to section 141(g)(1)(A) of the Trade Act of 1974 be5 fore the date of the enactment of this Act. 

6 (b) AUTHORIZATION OF APPROPRIATIONS FOR THE

7 OFFICE OF THE GENERAL COUNSEL AND CERTAIN

8 OTHER OFFICES.—There are authorized to be appro9 priated to the Office of the United States Trade Rep10 resentative for the appointment of additional staff in or 

11 enhanced activities by the Office of the General Counsel, 

12 the Office of Monitoring and Enforcement, the Office of 

13 China Affairs, and the Office of Japan, Korea, and APEC 

14 Affairs—

15 (1) $4,000,000 for fiscal year 2006; and 

16 (2) $4,000,000 for fiscal year 2007. 

17 (c) SENSE OF CONGRESS.—It is the sense of the Con18 gress that the enforcement of United States rights and 

19 of obligations of United States trading partners under 

20 trade agreements has gained such significance that the 

21 United States Trade Representative should determine 

22 which of its current positions is most responsible for car23 rying out these important enforcement duties and should 

24 assign that position, in addition to any other title, the title 

25 of Chief Enforcement Officer. 
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1 SEC. 8. AUTHORIZATION OF APPROPRIATIONS FOR THE 

2 UNITED STATES INTERNATIONAL TRADE 

3 COMMISSION. 

4 (a) AUTHORIZATION OF APPROPRIATIONS.—Section 

5 330(e)(2)(A) of the Tariff Act of 1930 (19 U.S.C. 

6 1330(e)(2)(A)) is amended by striking clauses (i) and (ii) 

7 and inserting the following: 

8 ‘‘(i) $62,752,000 for fiscal year 2006. 

9 ‘‘(ii) $65,890,000 for fiscal year 2007.’’. 

10 (b) RULE OF CONSTRUCTION.—The amendment 

11 made by subsection (a) shall not be construed to affect 

12 the availability of funds appropriated pursuant to section 

13 330(e)(2)(A) of the Tariff Act of 1930 before the date 

14 of the enactment of this Act. 

15 (c) STUDY AND REPORT ON TRADE AND ECONOMIC

16 RELATIONS WITH CHINA.—

17 (1) STUDY.—

18 (A) IN GENERAL.—The United States 

19 International Trade Commission shall carry out 

20 a comprehensive study on trade and economic 

21 relations between the United States and the 

22 People’s Republic of China which addresses 

23 China’s economic policies, including its ex24 change rate policy, the competitiveness of its in25 dustries, the composition and nature of its 

26 trade patterns, and other elements impacting 
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1 the United States trade account, industry, com2 petitiveness, and employment. 

3 (B) REQUIREMENTS.—In carrying out the 

4 study under subparagraph (A), the United 

5 States International Trade Commission shall 

6 undertake the following: 

7 (i) An analysis of the United States 

8 trade and investment relationship with 

9 China, with a focus on the United States10 China trade balance and trends affecting 

11 particular industries, products, and sectors 

12 in agriculture, manufacturing, and serv13 ices. The analysis shall provide context for 

14 understanding the U.S.-China trade and 

15 investment relationship, by including infor16 mation regarding China’s economic rela17 tionships with third countries and China’s 

18 changing policy regime and business envi19 ronment. The analysis shall include a focus 

20 on United States-China trade in goods and 

21 services, United States direct investment in 

22 China, China’s foreign direct investment in 

23 the United States, and the relationship be24 tween trade and investment. The analysis 
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1 shall make adjustments, where possible, for 

2 merchandise passed through Hong Kong. 

3 (ii) An analysis of the competitive 

4 conditions in China affecting United States 

5 exports and United States direct invest6 ment. The analysis shall take into account, 

7 to the extent feasible, significant factors 

8 including tariffs and non-tariff measures, 

9 competition from Chinese domestic firms 

10 and foreign-based companies operating in 

11 China, the Chinese regulatory environ12 ment, including specific regulations and 

13 overall regulatory transparency, and other 

14 Chinese industrial and financial policies. In 

15 addition, the analysis shall examine the 

16 specific competitive conditions facing 

17 United States producers in key industries, 

18 products, services, and sectors, potentially 

19 including computer and telecommuni20 cations hardware, textiles, grains, cotton, 

21 and financial services based on trade and 

22 investment flows. 

23 (iii) An examination of the role and 

24 importance of intellectual property rights 

25 issues, such as patents, copyrights, and li-
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1 censing, in specific industries in China, in2 cluding the pharmaceutical industry, the 

3 software industry, and the entertainment 

4 industry. 

5 (iv) An analysis of the effects on glob6 al commodity markets of China’s growing 

7 demand for energy and raw materials. 

8 (v) An examination of whether or not 

9 increased United States imports from 

10 China reflect displacement of United 

11 States imports from third countries or 

12 United States domestic production, and 

13 the role of intermediate and value-added 

14 goods processing in China’s pattern of 

15 trade. 

16 (2) REPORT.—Not later than one year after the 

17 date of the enactment of this Act, the United States 

18 International Trade Commission shall submit to the 

19 Committee on Ways and Means of the House of 

20 Representatives and the Committee on Finance of 

21 the Senate a report that contains the results of the 

22 study carried out under paragraph (1). 
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1 SEC. 9. SENSE OF CONGRESS REGARDING EXPANSION OF 

2 MEMBERSHIP IN THE AGREEMENT ON GOV3 ERNMENT PROCUREMENT OF THE WTO. 

4 (a) FINDINGS.—Congress finds the following: 

5 (1) Nondiscriminatory, procompetitive, merit6 based, and technology-neutral procurement of goods 

7 and services is essential so that governments can ac8 quire the best goods to meet their needs for the best 

9 value. 

10 (2) The Agreement on Government Procure11 ment (GPA) of the World Trade Organization 

12 (WTO) provides a multilateral framework of rights 

13 and obligations founded on such principles. 

14 (3) The United States is a member of the GPA, 

15 along with Canada, the European Union (including 

16 its 25 member States: Austria, Belgium, Cyprus, the 

17 Czech Republic, Denmark, Estonia, Finland, 

18 France, Germany, Greece, Hungary, Ireland, Italy, 

19 Latvia, Lithuania, Luxembourg, Malta, the Nether20 lands, Poland, Portugal, Slovak Republic, Slovenia, 

21 Spain, Sweden, and the United Kingdom), Hong 

22 Kong, Iceland, Israel, Japan, Korea, Liechtenstein, 

23 the Netherlands with respect to Aruba, Norway, 

24 Singapore, and Switzerland. 
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1 (4) Albania, Bulgaria, Georgia, Jordan, the 

2 Kyrgyz Republic, Moldova, Oman, Panama, and Tai3 wan are currently negotiating to accede to the GPA. 

4 (5) The People’s Republic of China joined the 

5 WTO in December 2001, signaling to the inter6 national community its commitment to greater open7 ness. 

8 (6) When China joined the WTO, it committed, 

9 in its protocol of accession, to negotiate entry into 

10 the GPA ‘‘as soon as possible’’. 

11 (7) More than 3 years after its entry into the 

12 WTO, China has not commenced negotiations to join 

13 the GPA. 

14 (8) Recent legal developments in China illus15 trate the importance and urgency of expanding 

16 membership in the GPA. 

17 (9) In 2002, China enacted a law on govern18 ment procurement that incorporates preferences for 

19 domestic goods and services. 

20 (10) The first sector for which the Chinese 

21 Government has sought to implement the new gov22 ernment procurement law is computer software. 

23 (11) In March 2005 the Chinese Government 

24 released draft regulations governing the procurement 

25 of computer software. 
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1 (12) The draft regulations require that non2 Chinese software companies meet conditions relating 

3 to outsourcing of software development work to 

4 China, technology transfer, and similar require5 ments, in order to be eligible to participate in the 

6 Chinese Government market. 

7 (13) As a result of the proposed regulations, it 

8 appears likely that a very substantial amount of 

9 American software will be excluded from the govern10 ment procurement process in China. The draft soft11 ware regulations threatened to close off a market 

12 with a potential value of more than $8 billion to 

13 United States firms. 

14 (14) United States software companies have 

15 made a substantial commitment to the Chinese mar16 ket and have made a substantial contribution to the 

17 development of China’s software industry. 

18 (15) The outright exclusion of substantial 

19 amounts of software not of Chinese origin that is 

20 apparently contemplated in the regulations is out of 

21 step with domestic preferences that exist in the pro22 curement laws and practices of other WTO member 

23 countries, including the United States. 

24 (16) The draft regulations do not adhere to the 

25 principles of nondiscriminatory, procompetitive, 
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1 merit-based, and technology-neutral procurement 

2 embodied in the GPA. 

3 (17) The software piracy rate in China has 

4 never fallen below 90 percent over the past 10 years. 

5 (18) Chinese Government entities represent a 

6 very significant portion of the software market in 

7 China that is not dominated by piracy. 

8 (19) The combined effect of rampant software 

9 piracy and the proposed discriminatory government 

10 procurement regulations will be a nearly impen11 etrable barrier to market access for the United 

12 States software industry in China. 

13 (20) The United States trade deficit with China 

14 in 2004 was $162,000,000,000, the highest with any 

15 economy in the world, and a 12.4 percent increase 

16 over 2003. 

17 (21) China’s Premier, Wen Jiabao, has com18 mitted to rectify this serious imbalance by increasing 

19 China’s imports of goods and services from the 

20 United States. 

21 (22) The proposed software procurement regu22 lations that were described by the Chinese Govern23 ment in November 2004 incorporate policies that are 

24 fully at odds with Premier Wen’s commitment to in25 crease China’s imports from the United States, and 
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1 will add significantly to the trade imbalance between 

2 the United States and China. 

3 (23) Once it is fully implemented, the discrimi4 natory aspects of China’s government procurement 

5 law will apply to all goods and services that the gov6 ernment procures. 

7 (24) Other developing countries may follow the 

8 lead of China. 

9 (25) In July 2005, senior officials of the Chi10 nese Government announced at the U.S.-China Joint 

11 Committee on Commerce and Trade that China 

12 would accelerate its efforts to join the GPA and to13 ward this end will initiate technical consultations 

14 with other WTO member countries and accordingly 

15 delay issuing draft regulations on software procure16 ment, as it further considers public comments and 

17 makes revisions in light of WTO rules. 

18 (b) SENSE OF CONGRESS.—It is the sense of Con19 gress that—

20 (1) the Government of the United States should 

21 strive to expand membership in the Agreement on 

22 Government Procurement of the World Trade Orga23 nization (WTO); 

24 (2) the Government of the United States should 

25 ensure that the Government of the People’s Republic 
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1 of China meets its WTO obligations as recently af2 firmed through its commitment in July 2005 

3 through the U.S.-China Joint Committee on Com4 merce and Trade, to join the WTO Agreement on 

5 Government Procurement; 

6 (3) the Government of the United States should 

7 seek a commitment from the Government of the 

8 People’s Republic of China to maintain its suspen9 sion of the implementation of its law on government 

10 procurement, pending the conclusion of negotiations 

11 to accede to the Agreement on Government Procure12 ment of the WTO; 

13 (4) the Government of the United States should 

14 seek commitments from the Government of the Peo15 ple’s Republic of China and other countries that are 

16 not yet members of the Agreement on Government 

17 Procurement of the WTO to implement the prin18 ciples of openness, transparency, fair competition 

19 based on merit, nondiscrimination, and account20 ability in their government procurement as embodied 

21 in that agreement; and 

22 (5) the President should direct all appropriate 

23 officials of the United States to raise these concerns 
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1 with appropriate officials of the People’s Republic of 

2 China and other trading partners.

Passed the House of Representatives July 27, 2005. 

Attest:

Clerk.