I

104TH CONGRESS

2D SESSION S. 1918

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 4, 1996

Referred to the Committee on Ways and Means

AN ACT

To amend trade laws and related provisions to clarify the

designation of normal trade relations.

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. FINDINGS AND POLICY.

2 (a) FINDINGS.—The Congress makes the following

3 findings:

4 (1) Since the 18th century, the principle of

5 nondiscrimination among countries with which the

6 United States has trade relations, commonly re7 ferred to as ‘‘most-favored-nation’’ treatment, has

8 been a cornerstone of United States trade policy.

9 (2) Although the principle remains firmly in

10 place as a fundamental concept in United States

11 trade relations, the term ‘‘most-favored-nation’’ is a

12 misnomer which has led to public misunderstanding.

13 (3) It is neither the purpose nor the effect of

14 the most-favored-nation principle to treat any coun15 try as ‘‘most favored’’. To the contrary, the principle

16 reflects the intention to confer on a country the

17 same trade benefits that are conferred on any other

18 country, that is, the intention not to discriminate

19 among trading partners.

20 (4) The term ‘‘normal trade relations’’ is a

21 more accurate description of the principle of non22 discrimination as it applies to the tariffs applicable

23 generally to imports from United States trading

24 partners, that is, the general rates of duty set forth

25 in column 1 of the Harmonized Tariff Schedule of

26 the United States.
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1 (b) POLICY.—It is the sense of the Congress that—

2 (1) the language used in United States laws,

3 treaties, agreements, executive orders, directives,

4 and regulations should more clearly and accurately

5 reflect the underlying principles of United States

6 trade policy; and

7 (2) accordingly, the term ‘‘normal trade rela8 tions’’ should, where appropriate, be substituted for

9 the term ‘‘most-favored-nation’’.

10 SEC. 2. CHANGE IN TERMINOLOGY.

11 (a) TRADE EXPANSION ACT OF 1962.—The heading

12 for section 251 of the Trade Expansion Act of 1962 (19

13 U.S.C. 1881) is amended to read as follows: ‘‘NORMAL

14 TRADE RELATIONS’’.

15 (b) TRADE ACT OF 1974.—(1) Section 402 of the

16 Trade Act of 1974 (19 U.S.C. 2432) is amended by strik17 ing ‘‘(most-favored-nation treatment)’’ each place it ap18 pears and inserting ‘‘(normal trade relations)’’.

19 (2) Section 601(9) of the Trade Act of 1974 (19

20 U.S.C. 2481(9)) is amended by striking ‘‘most-favored-na21 tion treatment’’ and inserting ‘‘trade treatment based on

22 normal trade relations (known under international law as

23 most-favored-nation treatment)’’.

24 (c) CFTA.—Section 302(a)(3)(C) of the United

25 States Canada Free-Trade Agreement Implementation
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1 Act of 1988 (19 U.S.C. 2112 note) is amended by striking

2 ‘‘the most-favored-nation rate of duty’’ each place it ap3 pears and inserting ‘‘the general subcolumn of the column

4 1 rate of duty set forth in the Harmonized Tariff Schedule

5 of the United States’’.

6 (d) NAFTA.—Section 202(n) of the North American

7 Free Trade Agreement Implementation Act (19 U.S.C.

8 3332(n)) is amended by striking ‘‘most-favored-nation’’.

9 (e) SEED ACT.—Section 2(c)(11) of the Support for

10 East European Democracy (SEED) Act of 1989 (22

11 U.S.C. 5401(c)(11)) is amended—

12 (1) by striking ‘‘(commonly referred to as ‘most

13 favored nation status’)’’, and

14 (2) by striking ‘‘MOST FAVORED NATION

15 TRADE STATUS’’ in the heading and inserting

16 ‘‘NORMAL TRADE RELATIONS’’.

17 (f) UNITED STATES-HONG KONG POLICY ACT OF

18 1992.—Section 103(4) of the United States-Hong Kong

19 Policy Act of 1992 (22 U.S.C. 5713(4)) is amended by

20 striking ‘‘(commonly referred to as ‘most-favored-nation

21 status’)’’.

22 SEC. 3. SAVINGS PROVISIONS.

23 Nothing in this Act shall affect the meaning of any

24 provision of law, Executive order, Presidential proclama25 tion, rule, regulation, delegation of authority, other docu-
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1 ment, or treaty or other international agreement of the

2 United States relating to the principle of ‘‘most-favored3 nation’’ (or ‘‘most favored nation’’) treatment. Any Execu4 tive order, Presidential proclamation, rule, regulation, del5 egation of authority, other document, or treaty or other

6 international agreement of the United States that has

7 been issued, made, granted, or allowed to become effective

8 and that is in effect on the effective date of this Act, or

9 was to become effective on or after the effective date of

10 this Act, shall continue in effect according to its terms

11 until modified, terminated, superseded, set aside, or re12 voked in accordance with law.

Passed the Senate September 10, 1996.

Attest: GARY SISCO,

Secretary.