(5) the Republic of China on Taiwan (hereafter
in this Act referred to as ‘‘Taiwan’’) has applied for
membership in the WTO as the separate customs
territory of Taiwan, Penghu, Kinmen, and Matsu,
and its application is under review by a Working
Party appointed under Article XXXIII of the GATT
1994 (as defined in section 2 of the Uruguay Round
Agreements Act (19 U.S.C. 3501));
(6) Taiwan has a free market economy that has
existed for more than 3 decades, and is currently the
14th largest trading nation in the world;
(7) Taiwan has a gross national product that is
the world’s 20th largest, its foreign exchange re-
serves are among the largest in the world, and it has
become the world’s 7th largest foreign investor;
(8) Taiwan is the 7th largest trading partner of
the United States and its purchases of United States
exports are more than 50 percent greater than those
of the People’s Republic of China;
(9) Taiwan has already agreed to reduce the
tariff level of many products, and to eliminate other
nontariff barriers;
(10) the United States and Taiwan have en-
joyed a longstanding and uninterrupted friendship,
which has only increased in light of the remarkable
economic development and political liberalization in
Taiwan in recent years;
(11) Taiwan reached an historic turning point
in the development of Chinese democracy on March
23, 1996, when it conducted the first competitive,
free, fair, direct, and popular election of a head of
state in over 4,000 years of recorded Chinese his-
tory, leading to Lee Teng-hui’s inauguration as
President on May 20, 1996;
(12) for the past century the United States has
promoted democracy and economic freedom through-
out the world, and the evolution of Taiwan is an
outstanding example of the success of that policy;
(13) Taiwan’s accession to the WTO is impor-
tant to the United States because it is the largest
importer of United States goods that is not already
a member of the WTO, and because Taiwan’s entry
into the WTO would promote significant new market
opportunities for United States exporters and inves-
tors;
(14) notwithstanding these circumstances, the
People’s Republic of China has sought to block the
admission of Taiwan to the WTO until its own ac-
cession to membership;
(15) notwithstanding this opposition, Taiwan is
ready for, and meets the criteria for, admission to
the WTO;
(16) the People’s Republic of China, in contrast
to Taiwan, has applied for membership in the WTO
not as a developed nation, but rather as a developing
nation, so that it would be relieved of the obligations
to reduce its tariffs and eliminate its subsidies for
government-controlled industries, even after its ad-
mission to the WTO;
(17) in contrast to Taiwan, the Communist gov-
ernment of the People’s Republic of China maintains
strict government controls over most trade within its
territory, restricts and often outlaws free market
competition, and denies legal and regulatory protec-
tions for property rights, all in ways that are incom-
patible with WTO principles;
(18) the Communist government of the People’s
Republic of China maintains an intricate system of
restrictive and punitive tariff and nontariff adminis-
trative controls to implement its centrally-planned
industrial and trade policies, with tariffs on foreign
goods, such as automobiles, as high as 150 percent,
even though the People’s Republic of China has
made commitments in the Memorandum of Under-
standing on market access it signed with the United
States on October 10, 1992, and reaffirmed in
March of 1995, to reform significant parts of its im-
port regime;
(19) the People’s Republic of China’s failure to
implement its March 11, 1995, agreement with the
United States to curtail piracy of products protected
by intellectual property rights, including music, vid-
eos, books, software, has prompted a United States
threat to impose trade sanctions proportionate to an
estimated loss of $2,300,000,000 to the United
States economy in 1995 that the piracy has caused;
(20) representatives of the People’s Republic of
China’s two leading state-owned arms exporting
companies, Poly Technologies and Norinco, were ar-
rested by Federal law enforcement officers for smug-
gling into the United States 2,000 AK–47 rifles in-
tended for sale to gangs;
(21) illegal activities such as these should be
taken into account in formulating trade policy with
respect to any country;
(22) the Communist government of the People’s
Republic of China continues to use direct and indi-
rect government subsidies to unfairly advantage its
own exports in contravention of market principles;
(23) as a consequence of these practices, the
People’s Republic China is not ready for, and does
not meet the criteria for, admission to the WTO ei-
ther as a developed nation or a developing nation;
and
(24) inasmuch as Taiwan can easily meet and
exceed all of the requirements for admission to the
WTO, while the People’s Republic of China has long
enjoyed most-favored-nation trading status with the
United States notwithstanding its failure to meet the
criteria for WTO membership, the People’s Republic
of China should continue to enjoy most-favored-na-
tion trading status with the United States only if
Taiwan is admitted to the WTO at the earliest prac-
ticable date.
SEC. 2. CONTINGENT EXTENSION OF NONDISCRIMINATORY
TRADE TREATMENT TO THE PEOPLE’S RE-
PUBLIC OF CHINA.
Notwithstanding any other provision of law, non-
discriminatory treatment (most-favored-nation treatment)
may apply to the products of the People’s Republic of
China after March 1, 1997, if and only if, as of that date,
Taiwan has been admitted to the WTO as a separate cus-
toms territory and the People’s Republic of China has not