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[House Report 106-755]
[From the U.S. Government Publishing Office]

106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-755

======================================================================

 
  DISAPPROVAL OF NORMAL TRADE RELATIONS FOR THE PEOPLE'S REPUBLIC OF 
                                 CHINA

                                _______
                                

 July 18, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                             ADVERSE REPORT

                      [To accompany H.J. Res. 103]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
joint resolution (H.J. Res. 103) disapproving the extension of 
the waiver authority contained in section 402(c) of the Trade 
Act of 1974 with respect to the People's Republic of China, 
having considered the same, report unfavorably thereon without 
amendment and recommend that the joint resolution do not pass.

                                CONTENTS

                                                                   Page
 I. Introduction......................................................2
        A. Purpose and Summary...................................     2
        B. Background............................................     2
        C. Legislative History...................................     6
II. Explanation of Resolution.........................................6
III.Votes of the Committee............................................8

IV. Budget Effects....................................................8
        A. Committee Estimate of Budgetary Effects...............     8
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures.........................................     8
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................     8
 V. Other Matters to be Discussed Under the Rules of the House.......11
        A. Committee Oversight Findings and Recommendations......    11
        B. Summary of Findings and Recommendations of the 
            committee on Government Reform and Oversight.........    11
        C. Constitutional Authority Statement....................    11

                            I. INTRODUCTION

                         A. Purpose and Summary

    H.J. Res. 103 would disapprove the extension of normal 
trade relations (NTR status) to the products of the People's 
Republic of China.

                             B. Background

    Prior to 1951, the United States extended 
nondiscriminatory, or unconditional most-favored-nation (MFN) 
treatment, now referred to as normal trade relations (NTR),\1\ 
to all of its trading partners in accordance with obligations 
undertaken when the United States joined the General Agreement 
on Tariffs and Trade (GATT) in 1948. However, the Trade 
Agreements Extension Act of 1951 directed the President to 
withdraw or suspend the MFN status of the Soviet Union and all 
countries under the domination of Communism. As implemented, 
this directive was applied to all then-existing communist 
countries except Yugoslavia. Poland's MFN status was restored 
by Presidential directive in 1960.
---------------------------------------------------------------------------
    \1\ Legislation to replace the term ``most-favored-nation'' (MFN) 
in United States statutes with the term ``normal trade relations'' 
(NTR) was enacted into law as part of the Internal Revenue Service 
Restructuring and Reform Act of 1998, P.L. 105-206.
---------------------------------------------------------------------------
    Title IV of the Trade Act of 1974, which includes the so-
called ``Jackson-Vanik amendment,'' represented a 
liberalization of the 1951 law. Title IV authorizes the 
extension of normal trade relations treatment to nonmarket 
economies which both meet freedom-of-emigration requirements 
and conclude a commercial agreement with the United States. 
Title IV also authorizes the President to waive the freedom-of-
emigration requirements of that title and to extend NTR status 
to a nonmarket economy country if he determines that doing so 
will substantially promote the freedom-of-emigration 
objectives. The President's waiver authority under Title IV 
expires at midnight on July 2 of each year. It may be extended 
on an annual basis upon a Presidential determination and report 
to Congress that such extension will substantially promote the 
freedom-of-emigration objectives of the 1974 Trade Act.
    In the case of the People's Republic of China, a bilateral 
commercial agreement, as required by the Jackson-Vanik 
amendment, was concluded on July 7, 1979, and has remained in 
force since that time. NTR was first granted to China on 
February 1, 1980, and has been renewed annually since then on 
the basis of Presidential waivers. On June 2, 2000, the 
President formally transmitted to the Congress his 
recommendation to waive the 1974 Trade Act's freedom-of-
emigration requirements and to thereby extend China's NTR 
status for an additional year, during the period of July 3, 
2000, through July 2, 2001.
    The President's waiver authority continues in effect unless 
disapproved by the Congress--either generally or with respect 
to a specific country--within 60 calendar days of the 
expiration of the existing authority. Under Title IV amendments 
adopted as part of the Customs and Trade Act of 1990, 
disapproval takes the form of a joint resolution disapproving 
the extension of Presidential authority to waive the 1974 Trade 
Act's freedom-of-emigration requirements. Under the 1990 
amendments, Congress may consider any veto message before the 
later of the end of the 60-day period or within 15 legislative 
days. The disapproval resolution is highly privileged, thus 
generally guaranteeing a vote in the House if it is introduced.
    If both chambers of Congress do not pass a resolution of 
disapproval within 60 calendar days following the July 3, 2000, 
expiration of the existing waiver authority, China's NTR status 
is automatically renewed through July 2, 2001. House Joint 
Resolution 103 was introduced by Representative Rohrabacher on 
June 23, 2000. The resolution provides for disapproval of 
extension of the waiver authority recommended by the President 
on June 2, 2000, with respect to China for the period beginning 
July 3, 2000.

H.R. 4444

    In response to significant progress in China's negotiations 
to accede to the World Trade Organization, the House approved 
H.R. 4444, a bill to authorize extension of nondiscriminatory 
treatment (normal trade relations treatment) to the People's 
Republic of China, and to establish a framework for relations 
between the United States and the People's Republic of China. 
H.R. 4444, which was approved by the House on May 24, 2000 by a 
vote of (237-197) amends Title IV of the Trade Act of 1974 to 
remove the People's Republic of China (China) from the list of 
countries subject to this provision upon the accession of China 
to the WTO and upon certification by the President that the 
final terms of accession are at least equivalent to the terms 
of the November 15, 1999 bilateral agreement between the United 
States and the People's Republic of China.
    In addition to granting the President the authority to 
remove China from application of Jackson-Vanik, H.R. 4444 also: 
(1) establishes a Congressional-Executive Commission to monitor 
China's progress on human rights, worker rights, and 
enforcement of its WTO agreements; (2) includes trade 
enhancement provisions, including a safeguard mechanism to 
protect U.S. industry and workers from unexpected import surges 
from China; (3) authorizes additional funds to monitor China's 
adherence to WTO commitments, and requires annual reports on 
China's compliance with its WTO commitments; (4) provides 
technical assistance in developing the rule of law in 
commercial and labor markets, as well as democracy-building in 
China; (5) establishes a task force on prison labor imports; 
and(6) expresses a sense of the Congress that Taiwan should 
enter the WTO at the same General Council session as China. At the time 
H.R. 4444 is signed into law, the annual review of China's NTR status 
will no longer be necessary upon China's accession to the WTO. However, 
until that time, it remains necessary for the Committee to consider 
H.J. Res 103 according to the privileged procedures set out in Title IV 
of the Trade Act 1974.

China's negotiations to join the World Trade Organization

    China applied for accession to the General Agreement on 
Tariffs and Trade (GATT) in July 1986, and work has proceeded 
in the China Working Party since that time to negotiate the 
conditions upon which China will enter the GATT, and since 
January 1, 1995, the World Trade Organization (WTO).
    Article XII of the Agreement Establishing the WTO states 
that any State or separate customs territory may accede to the 
WTO ``on terms to be agreed between it and the WTO.'' In 
practice, any WTO applicant must negotiate terms for membership 
in the WTO in the form of a Protocol of Accession. Through the 
operation of a Working Party, the United States and other WTO 
members have an opportunity to review the trade regimes of 
applicants to ensure that they are capable of implementing WTO 
obligations. In parallel with the Working Party's efforts, the 
United States and other interested member governments conduct 
separate negotiations with the applicant. These bilateral 
negotiations are aimed at achieving specific concessions and 
commitments on tariff levels, agricultural market access, and 
trade in services.
    On April 8, 1999, following the summit meeting between 
Chinese Premier Zhu Rongji and President Clinton, Ambassador 
Barshefsky announced that U.S. and Chinese negotiators secured 
``broad progress toward an expansive bilateral market access 
agreement,'' which would provide extensive market openings for 
U.S. agriculture, manufactured products, and services along 
with Chinese commitments to adopt WTO rules relating to such 
issues as technology transfer and offsets, subsidies, product 
safeguards, and State enterprises. The Administration, however, 
declined to sign the agreement at that time.

The U.S.-China WTO agreement

    The United States-China Bilateral Trade Agreement was 
eventually finalized on November 15, 1999, in Beijing. In this 
historic agreement China committed upon accession to:
     Phase-in of full trading and distribution rights 
(including the ability to provide services auxiliary to 
distribution) for almost all products for U.S. firms throughout 
China.
     Cut average tariffs for U.S. priority agricultural 
products (e.g., beef, grapes, wine, cheese, poultry, and pork) 
from 31.5% to 14.5% by 2004. Overall industrial tariffs would 
fall from an average of 24.6% to 9.4% by 2005 (tariffs on U.S. 
``priority products,'' such as wood, paper, chemicals, and 
capital and medical equipment would fall even further). Tariffs 
on information technology products, such as computers, 
semiconductors, and telecommunications equipment, would be cut 
from an average level of 13.3% to zero by 2005.
     Establish a tariff-rate quota system for imports 
of agricultural bulk commodities (such as wheat, corn, cotton, 
barley, and rice), i.e., imports up to a specified quota level 
would be assessed a much higher tariff rate. Private trade in 
agricultural products will be permitted for the first time.
     Phase out quotas and other quantitative 
restrictions (some upon accession, many within two years, and 
most within five years). Quota levels for many products would 
expand by 15% each year until the elimination of the quota.
     Eliminate export subsidies on agricultural 
products and SPS restrictions that are not scientifically-
based.
     Provide access to service sectors (many of which 
are currently closed to foreign firms), including distribution, 
telecommunications, insurance, banking, securities, and 
professional services (including legal, accountancy, taxation, 
management consultancy, architecture, engineering, urban 
planning, medical and dental, and computer-related services). 
China would expand (over various transitional periods) the 
scope of allowed services and gradually remove geographical 
restrictions on foreign service providers. The amount of 
permitted foreign ownership in service industries would vary 
(and in some cases expand over time) from sector to sector.
     Reduce restrictions on auto trade. Tariffs on 
autos would fall from 80-100% to 25% (tariffs on auto parts 
reduced to an average rate of 10%) by 2006. Auto quotas would 
be eliminated by 2005. U.S. financial firms would be allowed to 
provide financing for the purchase of cars in China.
     Provide fair treatment for foreign firms operating 
in China by removing government rules requiring technology 
transfer, local content, and export performance conditions.
     Provide that Chinese state-owned and state-
invested firms make purchases and sales based on commercial 
considerations and give U.S. firms the opportunity to 
competefor sales on a non-discriminatory basis.
     Accept the use by the United States of certain 
antidumping provisions (over a transitory period) and to permit 
the use of certain safeguard measures to respond to possible 
surges in imports from China that might cause or threaten to 
cause market disruption to a U.S. industry (over transitory 
periods).
    U.S. firms would also benefit from China's trade agreements 
with the other WTO countries that have concluded bilateral 
agreements with China, including the two WTO members that are 
still negotiating with China if they have obtained or are able 
to obtain benefits beyond what the United States was able to 
achieve. In addition, the WTO working party is expected to set 
additional requirements on China's WTO accession (such as rules 
on subsidies) that would also benefit U.S. firms. \2\
---------------------------------------------------------------------------
    \2\ CRS memo, U.S. Interests in China's Accession to the World 
Trade Organization: Arguments in Favor of Accession, May 2, 2000.
---------------------------------------------------------------------------
    In response to progress achieved in China's WTO commitments 
represented by the bilateral agreement with the United States, 
President Clinton announced that he would work with other WTO 
member countries to gain China's entry in the WTO as soon as 
possible, and on March 8, 2000, he transmitted to Congress a 
request for legislation to terminate the application of Title 
IV of the Trade Act of 1974 to China and to extend Normal Trade 
Relations (NTR) treatment to products from China upon its 
accession to the WTO.
    The Agreement represents a crucial step in China's WTO 
accession process. Another significant step occurred on May 19, 
2000, when the European Union also completed an agreement with 
China on terms of accession. Other steps that remain ahead 
include the conclusion of bilateral negotiations with a handful 
of other WTO members, such as Mexico, as well as the 
multilateral negotiations on China's accession protocol. China 
then must complete its domestic process for implementing the 
country's WTO commitments. Accession takes effect thirty days 
after China deposits its instruments of ratification.

                         C. Legislative History

Committee action

    House Joint Resolution 103 was introduced on June 23, 2000, 
by Representative Rohrabacher (R-CA) and was referred to the 
Committee on Ways and Means. On July 13, 2000, the Committee 
ordered House Joint Resolution 103 reported adversely without 
amendment to the House by voice vote, with a quorum present.

Legislative hearing

    The Committee considered the issue of whether to normalize 
trade relations with China and to remove China from Title IV of 
the Trade Act of 1974 in the context of the debate surrounding 
permanent NTR and China's imminent membership in the World 
Trade Organization. In hearings held on February 16, April 12, 
and May 3, 2000, Members of Congress, a governor, and 
representatives from business, labor, human rights, and 
religious groups expressed their views regarding U.S.-China 
trade relations. At the May 3 hearing, four cabinet members 
appeared in favor of normalizing trade relations with China.

                   II. EXPLANATION OF THE RESOLUTION

Present law

    Title IV of the Trade Act of 1974, as amended by the 
Customs and Trade Act of 1990 (Public Law 101-382), sets forth 
three requirements relating to freedom of emigration which must 
be met, or waived by the President, in order for a nonmarket 
economy country to be granted NTR. Title IV also requires that 
a bilateral commercial agreement that provides for 
nondiscriminatory, NTR status remain in force between the 
United States and the nonmarket economy country receiving NTR 
status. Title IV also sets forth minimum provisions that must 
be included in such an agreement.
    An annual Presidential recommendation under section 402(d) 
for a 12-month extension of authority to waive the Jackson-
Vanik freedom-of-emigration requirements--either generally or 
for specific countries--may be disapproved through passage by 
Congress of a joint resolution of disapproval within 60 
calendar days after the expiration of the previous waiver 
authority. Congress may override a Presidential veto within the 
later of the end of the 60 calendar day period for initial 
passage or 15 legislative days.

Explanation of the resolution

    House Joint Resolution 103 states that the Congress does 
not approve the extension of the waiver authority contained in 
section 402(c) of the Trade Act of 1974, recommended by the 
President to the Congress on June 2, 2000, with respect to the 
People's Republic of China.

Reasons for committee action

    The Committee has long supported a policy of engagement 
with China and hasconsistently rejected annual legislation to 
revoke normal trade relations, or nondiscriminatory trade treatment, 
which it sees as the cornerstone of that policy. Members believe that 
normalizing trade relations with China by graduating it from the annual 
review process established under the Jackson-Vanik amendment, a Cold 
War trade statute, is appropriate. Specifically, the Committee believes 
that increased trade, together with other tools of active engagement, 
enables the United States to influence the growth of democratic and 
market-oriented policies in China in a manner which will improve 
respect for fundamental human rights and encourage political reform.
    The Committee continues to view with deep concern 
widespread human rights abuses carried out by the Government of 
China against Catholic priests and bishops, Protestant pastors, 
Tibetan Buddhist clergy, and pro-democracy activists. The 
Committee is also concerned about China's continued suppression 
of labor rights. Nevertheless, the Committee is concerned that 
rejecting the President's recommendation to graduate China from 
the Jackson-Vanik amendment may be interpreted by the Chinese 
as an antagonistic act that would undermine U.S. leverage to 
bring about change in China, while at the same time sacrificing 
the interests of U.S. exporters, workers, and consumers.
    The House demonstrated a commitment to the policy of 
engagement with China earlier this year when on May 24, 2000 it 
voted (237-197) to approve H.R. 4444, which would remove China 
from Title IV of the Trade Act of 1974 upon its accession to 
the World Trade Organization. This action was taken in response 
to China's pending accession to the WTO and the completion of 
the Bilateral Trade Agreement between the United States and 
China on November 15, 1999. At the time H.R. 4444 is signed 
into law, the annual review of China's NTR status will no 
longer be necessary upon China's accession. However, until that 
time, it remains necessary for the Committee to consider the 
annual disapproval resolution (if such a resolution is 
introduced) according to the privileged procedures set out in 
Title IV of the Trade Act 1974. Ending the annual consideration 
of NTR status for China and granting permanent NTR will allow 
U.S. farmers and businesses to benefit from China's WTO 
commitments once China becomes a full member of the WTO.
    Withdrawing NTR for China would also have a serious adverse 
effect on Hong Kong and Taiwan due to the high levels of trade 
and investment between Hong Kong and China and between Taiwan 
and China. By severely disrupting trade in the region, 
terminating NTR would harm U.S. efforts to address economic 
instability in Asia and risk prompting currency devaluations, 
similar to those that occurred in 1997 and 1998. Failing to 
grant NTR treatment at this time would forfeit the market 
access concessions made by the Chinese in the Bilateral Trade 
Agreement and those that will be included in China's pending 
accession to the World Trade Organization. If fully 
implemented, these commitments would represent substantial new 
opportunities for United States exports to and investment in 
China. Terminating NTR would jeopardize efforts to bring China 
into the WTO.
    Finally, the Committee believes that revoking China's NTR 
status as of July 3 of this year would constitute too blunt a 
sanction and would work against U.S. Government efforts to 
bring China into the global community of civilized nations. 
Rejecting annual NTR in light of the House's recent approval of 
legislation to remove China from Title IV and grant permanent 
NTR would send conflicting signals as to U.S. policy with 
respect to China. While the United States has many serious 
problems with China, the Committee believes areas of U.S.-Sino 
disagreement are best addressed through expanding U.S. contact 
with China and maintaining strong and effective mechanisms to 
press China to continue to reform.

                       III. VOTE OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of the joint resolution, H.J. Res. 103.

                       motion to report the bill

    The joint resolution, H.J. Res. 103, was ordered adversely 
reported by a voice vote, with a quorum being present.

                           IV. BUDGET EFFECTS

               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of this resolution, 
House Joint Resolution 103 as reported: The Committee agrees 
with the estimate prepared by CBO which is included below.

    B. Statement Regarding New Budget Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that 
enactment of H.J. Res. 103 would increase customs duty receipts 
due to higher tariffs imposed on goods from China.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the Congressional Budget Office, the following 
report prepared by CBO is provided.
                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 18, 2000.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.J. Res. 103, 
disapproving the extension of nondiscriminatory treatment to 
the products of the People's Republic of China.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Hester 
Grippando and Erin Whitaker (for revenues) and Lauren Marks 
(for private-sector mandates).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.J. Res. 103--Disapproving the extension of nondiscriminatory 
        treatment to the products of the People's Republic of China

    Summary: Under the Trade Act of 1974, nondiscriminatory 
trade relations may not be conferred on a country with a 
nonmarket economy if that country maintains restrictive 
emigration policies. However, the President may waive this 
prohibition on an annual basis if he certifies that doing so 
would promote freedom of emigration in that country. On June 2, 
2000, President Clinton transmitted to Congress his intention 
to waive the prohibition with respect to the People's Republic 
of China for a year, beginning July 3, 2000. H.J. Res. 103 
would disapprove the President's extension of this waiver. CBO 
estimates that denying nondiscriminatory tariff treatment to 
the People's Republic of China would increase revenues by $520 
million over the fiscal year 2000-2001 period. Since adopting 
this resolution would affect receipts, pay-as-you-go procedures 
would apply.
    The bill contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) and would not affect 
the budgets of state, local, or tribal governments. H.J. Res. 
103 would impose a private-sector mandate on importers of 
Chinese goods that would be subject to higher tariffs. CBO 
estimates that the increased costs in tariffs to importers 
would total $425 million in fiscal year 2001, exceeding the 
threshold for private-sector mandates ($109 million in 2000, 
adjusted annually for inflation) estimated in UMRA.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.J. Res. 103 is shown in the following 
table.

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2000     2001     2002     2003     2004     2005
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES

Estimated revenues........................................       95      425        0        0        0        0
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: Denial of nondiscriminatory trade 
relations to the People's Republic of China would substantially 
increase the tariff rates imposed on its exports to the United 
States. CBO assumes that these higher tariff rates would 
increase U.S. prices and would decrease U.S. demand of goods 
imported from the People's Republic of China. CBO estimates 
that imports from the People's Republic of China would decline 
by more than enough to offset the higher rates, so that the 
U.S. customs duties collections on Chinese imports would fall. 
However, CBO estimates that some of that drop in trade with the 
People's Republic of China would be offset by an increase in 
imports from other countries with normal trade relations 
status. The increase in revenues from this effect would 
outweigh the reduction in revenues from the People's Republic 
of China. Assuming an effective date of August 1, 2000, CBO 
estimates that revenues would increase by $520 million over the 
fiscal year 2000-20001 period. The People's Republic has 
received normal trade relations status through presidential 
proclamation on an annual basis beginning in 1980 and CBO 
assumes there would be a resumption of normal trade relations 
with the People's Republic of China after July 3, 2001.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in governmental receipts that are subject to pay-as-
you-go procedures are shown in the following table. For the 
purposes of enforcing pay-as-you-go procedures, only the 
effects in the current year, the budget year, and the 
succeeding four years are counted.

----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year in millions of dollars--
                                    ----------------------------------------------------------------------------
                                      2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010
----------------------------------------------------------------------------------------------------------------
Changes in outlays.................                                 Not applicable
Changes in receipts................     95    425      0      0      0      0      0      0      0      0      0
----------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments: 
the bill contains no intergovernmental mandates as defined in 
UMRA and would not affect the budgets of state, local, or 
tribal governments.
    Estimated impact on the private sector: H.J. Res. 103 would 
impose a private-sector mandate on importers of Chinese goods 
that would be subject to higher tariffs. CBO estimates that the 
increased costs in tariffs to importers would total $425 
million in fiscal year 2001, exceeding the threshold for 
private-sector mandates ($109 million in 200, adjusted annually 
for inflation) established in UMRA. U.S. consumers of Chinese 
goods would also bear indirect costs if they chose to 
substitute goods from other foreign or domestically produced 
good for Chinese products.
    Previous estimate: On July 12, 1999, CBO transmitted an 
estimate for H.J. Res. 57, disapproving the extension of the 
waiver authority contained in section 402(c) with respect to 
the People's Republic of China, as ordered reported adversely 
by the house Committee on Ways and Means. CBO estimated that 
the resolution would increase revenues by $507 million in 2000.
    On May 22, 2000, CBO prepared estimates for H.R. 4444 and 
S. 2277, bills to authorize extension of nondiscriminatory 
treatment (normal trade relations treatment) to the People's 
Republic of China, as ordered reported by the House Committee 
on Ways and Means and the Senate Committee on Finance, 
respectively. CBO concluded that enactment of these bills would 
likely increase revenues because they would allow the United 
States to trade with China under the World Trade Organization 
(WTO). Under that trading regime, imports of textiles and 
apparel form China would increase because they would be subject 
to less restrictive trade quotas. CBO found it had no basis for 
estimating the revenue impact of granting the President such 
authority.
    Estimate prepared by: Federal costs: Hester Grippando and 
Erin Whitaker; Impact on the private sector: Lauren Marks.
    Estimate approved by: G. Thomas Woodward, Assistant 
Director for Tax Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE

          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee, based on public hearing testimony and 
information from the Administration, believes that revoking 
China's NTR status as of July 3, 2000, would be unwise and 
counterproductive.

    B. Summary of Findings and Recommendations of the Committee on 
                    Government Reform and Oversight

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, no oversight findings or 
recommendations have been submitted to the Committee by the 
Committee on Government Reform and Oversight with respect to 
the subject matter contained in the resolution.

                 C. Constitutional Authority Statement

    With respect to clause 3(d)(1) of rule XIII of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article I of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States * * *'').

                                
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