II 

116TH CONGRESS 

1ST SESSION S. 1188 

To promote United States-Mongolia trade by authorizing duty-free treatment 

for certain imports from Mongolia, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 11, 2019 

Mr. CARDIN (for himself, Mr. SULLIVAN, Mr. LEAHY, Mr. GARDNER, Mr. 

WHITEHOUSE, and Mr. PERDUE) introduced the following bill; which was 

read twice and referred to the Committee on Finance 

A BILL 

To promote United States-Mongolia trade by authorizing 

duty-free treatment for certain imports from Mongolia, 

and for other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Mongolia Third Neigh5 bor Trade Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) In 1992, Mongolia adopted a constitution 

9 establishing a parliamentary democracy, becoming 


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1 the only country in Asia to transition from com2 munism to democracy. Mongolia shares land borders 

3 with only the Russian Federation and the People’s 

4 Republic of China. With a large land area and a 

5 population of only 3,000,000, Mongolia is the 

6 world’s most sparsely populated country, and Mon7 golia’s sovereignty is thought to be at risk from the 

8 overwhelming influence of its much larger and more 

9 populous neighbors. 

10 (2) Mongolia has shown its commitment to a 

11 ‘‘third neighbor’’ relationship with the United States 

12 by sending troops to support United States combat 

13 operations in Iraq and Afghanistan, and has a 

14 strong record of troop contributions to international 

15 peacekeeping missions. Mongolia’s success as a de16 mocracy, strategic location, sovereignty, territorial 

17 integrity, and ability to pursue an independent for18 eign policy are highly relevant to the national secu19 rity of the United States. 

20 (3) Mongolia describes the United States as its 

21 most important ‘‘third neighbor’’, but trade between 

22 the United States and Mongolia is substantially 

23 lower than in many other bilateral trading relation24 ships, and trade has declined in recent years. Total 

25 trade between the United States and Mongolia in 


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1 2012 was valued at approximately $707,000,000, 

2 but in 2017 the United States exported only 

3 $82,200,000 in goods to Mongolia and imported only 

4 $9,400,000 in goods from Mongolia. 

5 (4) After mining, agriculture is the second most 

6 important sector contributing to the economy of 

7 Mongolia. The livestock sector accounts for 87 per8 cent of agricultural production in Mongolia and employs around 1 9 ⁄3 of the working population. 

10 (5) Since the 1940s, the annual mean air tem11 perature in Mongolia has risen at 3 times the global 

12 rate. Average precipitation is declining and extreme 

13 weather disasters are more frequent, posing acute 

14 challenges for livestock herding in the country. In 

15 2017, an estimated 700,000 animals of the country’s 

16 livestock population were killed due to the post17 drought extreme winter phenomenon known as 

18 ‘‘dzud’’. This phenomenon is unique to Mongolia and 

19 has increased in frequency and severity in recent 

20 years, causing a rise in livestock mortality and di21 minishing livelihoods for herders, which has led to 

22 widespread rural poverty and a contraction in the 

23 national economy. 

24 (6) Mongolia would greatly benefit from pref25 erential treatment for imports into the United States 


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1 of certain Mongolian products. Such preferential 

2 treatment would help address some of the economic 

3 impacts of the dzuds. 

4 (7) The cashmere trade is particularly impor5 tant to the economy of Mongolia, but while Mongolia 

produces more than 1 6 ⁄3 of the world’s raw cashmere, 

7 it produces few finished cashmere products. Most 

8 Mongolian raw cashmere is exported to the People’s 

9 Republic of China, and the United States buys near10 ly all of its cashmere products from the People’s Re11 public of China. Preferential treatment for imports 

12 into the United States of certain Mongolian prod13 ucts, including cashmere products, would benefit the 

14 United States by facilitating increased trade with 

15 Mongolia. 

16 (8) The development of the garment industry in 

17 Mongolia would also promote women’s employment 

18 and empowerment. Women have historically partici19 pated in the garment industry in Mongolia at high 

20 rates, and that industry has historically provided 

21 safe and stable employment for women in Mongolia. 

22 (9) In developing and expanding the cashmere 

23 industry in Mongolia, it is critical for Mongolia to 

24 take steps to ensure the protection of its grasslands 

25 and prevent overgrazing of cashmere goats. 


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1 (10) Preferential treatment for imports into the 

2 United States of Mongolian products would benefit 

3 Mongolia at this critical time. 

4 SEC. 3. DUTY-FREE TREATMENT FOR CERTAIN IMPORTS 

5 FROM MONGOLIA. 

6 (a) IN GENERAL.—Subject to subsection (c), the 

7 President may provide duty-free treatment for any article 

8 described in subsection (b) that is imported directly from 

9 Mongolia into the customs territory of the United States. 

10 (b) ARTICLE DESCRIBED.— 

11 (1) IN GENERAL.—An article is described in 

12 this subsection if— 

13 (A) the article is the growth, product, or 

14 manufacture of Mongolia; 

15 (B) the article is classified under chapter 

16 51, 57, 60, 61, 62, 63, or 94 of the Har17 monized Tariff Schedule of the United States; 

18 (C)(i) the article is an apparel or textile 

19 article made of fabrics or fibers containing not 

20 less than 23 percent by weight of cashmere; or 

21 (ii) the sum of the cost or value of cash22 mere components of the article is not less than 

23 51 percent of the appraised value of the article 

24 at the time it is entered; 


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1 (D) in the case of an article that is a tex2 tile or apparel article— 

3 (i) the yarn and fabric used to manu4 facture the article are wholly produced in 

5 Mongolia; and 

6 (ii) the article is wholly formed and 

7 cut, or its components are wholly knit-to8 shape, in Mongolia; 

9 (E) the sum of the cost or value of the ma10 terials produced in, and the direct costs of proc11 essing operations performed in, Mongolia or the 

12 customs territory of the United States is not 

13 less than 50 percent of the appraised value of 

14 the article at the time it is entered; and 

15 (F) the President determines that the arti16 cle is not import-sensitive, after receiving the 

17 advice of the United States International Trade 

18 Commission in accordance with section 503(e) 

19 of the Trade Act of 1974 (19 U.S.C. 2463(e)). 

20 (2) EXCLUSIONS.—An article shall not be treat21 ed as the growth, product, or manufacture of Mon22 golia for purposes of paragraph (1)(A) by virtue of 

23 having merely undergone— 

24 (A) simple combining or packaging oper25 ations; or 


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1 (B) mere dilution with water or mere dilu2 tion with another substance that does not mate3 rially alter the characteristics of the article. 

4 (c) ELIGIBILITY REQUIREMENTS.—Duty-free treat5 ment may not be provided under this section unless the 

6 President determines and certifies to Congress that— 

7 (1) Mongolia meets each of the requirements 

8 set forth in— 

9 (A) paragraphs (1), (2), and (3) of section 

10 104(a) of the African Growth and Opportunity 

11 Act (19 U.S.C. 3703(a)); and 

12 (B) subparagraphs (A) through (F) of sec13 tion 113(a)(1) of such Act (19 U.S.C. 

14 3722(a)(1)); 

15 (2) Mongolia has effectively enforced environ16 mental laws, regulations, or other measures and ful17 filled its obligations under international agreements 

18 relating to the environment, including as such obli19 gations relate to public health; and 

20 (3) after taking into account the factors set 

21 forth in paragraphs (1) through (7) of subsection (c) 

22 of section 502 of the Trade Act of 1974 (19 U.S.C. 

23 2462), Mongolia meets the eligibility requirements of 

24 such section 502. 


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1 (d) VERIFICATION WITH RESPECT TO TRANS2 SHIPMENT FOR TEXTILE AND APPAREL ARTICLES.— 

3 (1) IN GENERAL.—Not later than January 1 of 

4 each year, the Commissioner of U.S. Customs and 

5 Border Protection shall verify that textile and ap6 parel articles imported from Mongolia to which duty7 free treatment is extended under this section are not 

8 being unlawfully transshipped into the United 

9 States. 

10 (2) REPORT TO PRESIDENT AND CONGRESS.— 

11 If the Commissioner determines pursuant to para12 graph (1) that textile and apparel articles described 

13 in that paragraph are being unlawfully transshipped 

14 into the United States, the Commissioner shall re15 port that determination to the President and the ap16 propriate congressional committees. 

17 (e) WITHDRAWAL, SUSPENSION, OR LIMITATION OF

18 PREFERENTIAL TREATMENT AND MANDATORY GRADUA19 TION.—The provisions of subsections (d) and (e) of sec20 tion 502 of the Trade Act of 1974 (19 U.S.C. 2462) shall 

21 apply with respect to Mongolia to the same extent and 

22 in the same manner as such provisions apply with respect 

23 to beneficiary developing countries under title V of that 

24 Act (19 U.S.C. 2461 et seq.). 


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1 (f) TERMINATION OF DUTY-FREE TREATMENT.—No 

2 duty-free treatment extended under this section shall re3 main in effect after December 31, 2025. 

4 (g) DEFINITIONS.—In this section: 

5 (1) CASHMERE.—The term ‘‘cashmere’’ means 

6 fine hair obtained from a cashmere goat (capra 

7 hircus laniger). 

8 (2) CUSTOMS TERRITORY OF THE UNITED

9 STATES.—The term ‘‘customs territory of the United 

10 States’’ has the meaning given the term in General 

11 Note 2 of the Harmonized Tariff Schedule of the 

12 United States. 

13 SEC. 4. BRIEFING REQUIREMENT. 

14 Not later than one year after the date of the enact15 ment of this Act, and annually thereafter, the President 

16 shall monitor, review, and provide a briefing to the appro17 priate congressional committees on— 

18 (1) the implementation of section 3; 

19 (2) compliance of Mongolia with the eligibility 

20 requirements described in section 3(c); and 

21 (3) the trade and investment policy of the 

22 United States with respect to Mongolia. 


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1 SEC. 5. APPROPRIATE CONGRESSIONAL COMMITTEES DE2 FINED. 

3 In this Act, the term ‘‘appropriate congressional com4 mittees’’ means— 

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

6 Committee on Foreign Affairs of the House of Rep7 resentatives; and 

8 (2) the Committee on Finance and the Com9 mittee on Foreign Relations of the Senate. 

Æ 


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