I 
115TH CONGRESS 
2D SESSION 
H. R. 6636 
To promote United States-Mongolia trade by authorizing duty-free treatment 
for certain imports from Mongolia, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 26, 2018 
Mr. YOHO (for himself, Ms. TITUS, Mr. YOUNG of Alaska, Mr. MEADOWS, Mr. 
FITZPATRICK, Ms. STEFANIK, Mr. POLIS, Mr. PRICE of North Carolina, 
Mr. KEATING, and Mr. EVANS) introduced the following bill; which was 
referred to the Committee on Ways and Means 
A BILL 
To promote United States-Mongolia trade by authorizing 
duty-free treatment for certain imports from Mongolia, 
and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Mongolia Third Neigh-
bor Trade Act’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) In 1992, Mongolia adopted a constitution 
establishing a parliamentary democracy, becoming 
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the only nation in Asia to transition from com-
munism to democracy. Mongolia shares land borders 
with only the Russian Federation and the People’s 
Republic of China, nations which the U.S. national 
security strategy states ‘‘want to shape a world anti-
thetical to U.S. values and interests.’’ With a large 
land area and a population of only 3 million, Mon-
golia is the world’s most sparsely populated country, 
and Mongolia’s sovereignty is thought be at risk 
from the overwhelming influence of its much larger 
and more populous neighbors. 
(2) Mongolia has shown its commitment to a 
‘‘third neighbor’’ relationship with the United States 
by sending troops to support U.S. combat operations 
in Iraq and Afghanistan, and has a strong record of 
troop contributions to international peacekeeping 
missions. Mongolia’s success as a democracy, stra-
tegic location, sovereignty, territorial integrity, and 
ability to pursue an independent foreign policy are 
highly relevant to the national security of the United 
States. 
(3) Mongolia describes the United States as its 
most important ‘‘third neighbor,’’ but U.S.-Mongolia 
trade is substantially lower than many other bilat-
eral trading relationships, and trade has declined in 
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recent years. Total trade in 2012 measured $707 
million, but in 2017 the United States exported only 
$82.2 million in goods to Mongolia, and imported 
only $9.4 million in goods from Mongolia. 
(4) The cashmere trade is particularly impor-
tant to Mongolia’s economy, but while Mongolia pro-
duces over a third of the world’s raw cashmere, it 
produces few finished cashmere products. Most Mon-
golian raw cashmere is exported to China, and the 
United States buys nearly all of its cashmere prod-
ucts from China. Preferential treatment for United 
States imports of certain Mongolian products, in-
cluding cashmere products, would benefit the United 
States by facilitating increased trade with Mongolia 
and reducing U.S. imports of Chinese cashmere 
products. 
(5) Preferential treatment for United States 
imports of such Mongolian products would benefit 
Mongolia by reducing Mongolia’s economic depend-
ence on China and promoting the development of 
Mongolia’s garment industry. Experts have ex-
pressed concern that Mongolia is unduly economi-
cally reliant on China, with more than 80 percent of 
Mongolia’s exports flowing to China annually, large-
ly from extractive industries. Industry leaders believe 
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that China’s trade practices hinder the diversifica-
tion of Mongolia’s economy and the emergence of a 
domestic Mongolian garment industry, because Chi-
nese buyers only purchase raw Mongolian cashmere, 
not finished garments. 
(6) The development of Mongolia’s garment in-
dustry would also promote women’s employment and 
empowerment. Women have historically participated 
in Mongolia’s garment industry at high rates, and 
the garment industry has historically provided safe 
and stable employment for women in Mongolia. 
SEC. 3. DUTY-FREE TREATMENT FOR CERTAIN IMPORTS 
FROM MONGOLIA. 
(a) IN GENERAL.—The President is authorized to 
provide duty-free treatment for any article described in 
subsection (b) that is imported directly from Mongolia into 
the customs territory of the United States. 
(b) ARTICLE DESCRIBED.— 
(1) IN GENERAL.—An article is described in 
this subsection if— 
(A) the article is the growth, product, or 
manufacture of Mongolia; 
(B) the article is classified under chapter 
51, 57, 60, 61, 62, 63, or 94 of the Har-
monized Tariff Schedule of the United States; 
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(C)(i) the article is an apparel or textile 
article made of fabrics or fibers containing not 
less than 23 percent by weight of cashmere; or 
(ii) the sum of the cost or value of cash-
mere components of the article is not less than 
51 percent of the appraised value of the article 
at the time it is entered; 
(D) in the case of an article that is a tex-
tile or apparel article, the yarn and fabric used 
to manufacture the article are produced in 
Mongolia; 
(E) the sum of the cost or value of the ma-
terials produced in, and the direct costs of proc-
essing operations performed in, Mongolia or the 
customs territory of the United States is not 
less than 35 percent of the appraised value of 
the article at the time it is entered; and 
(F) the President determines that the arti-
cle is not import-sensitive, after receiving the 
advice of the United States International Trade 
Commission in accordance with section 503(e) 
of the Trade Act of 1974 (19 U.S.C. 2463(e)). 
(2) EXCLUSIONS.—An article shall not be treat-
ed as the growth, product, or manufacture of Mon-
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golia for purposes of paragraph (1)(A) by virtue of 
having merely undergone— 
(A) simple combining or packaging oper-
ations; or 
(B) mere dilution with water or mere dilu-
tion with another substance that does not mate-
rially alter the characteristics of the article. 
(c) VERIFICATION
WITH
RESPECT
TO
TRANS-
SHIPMENT FOR TEXTILE AND APPAREL ARTICLES.— 
(1) IN GENERAL.—Not later than April 1, July 
1, October 1, and January 1 of each year, the Com-
missioner of U.S. Customs and Border Protection 
shall verify that textile and apparel articles imported 
from Mongolia to which duty-free treatment is ex-
tended under this Act are not being unlawfully 
transshipped into the United States. 
(2) REPORT TO PRESIDENT.—If the Commis-
sioner determines pursuant to paragraph (1) that 
textile and apparel articles imported from Mongolia 
to which duty-free treatment is extended under this 
Act are being unlawfully transshipped into the 
United States, the Commissioner shall report that 
determination to the President. 
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(d) ELIGIBILITY REQUIREMENTS.—Duty-free treat-
ment may be provided under this Act only if the President 
determines and certifies to Congress that— 
(1) Mongolia meets the requirements set forth 
in paragraphs (1), (2), and (3) of section 104(a) of 
the African Growth and Opportunity Act (19 U.S.C. 
3703(a)); and 
(2) after taking into account the factors set 
forth in paragraphs (1) through (7) of subsection (c) 
of section 502 of the Trade Act of 1974 (19 U.S.C. 
2462), Mongolia meets the eligibility requirements of 
such section 502. 
(e) WITHDRAWAL, SUSPENSION, OR LIMITATION OF 
PREFERENTIAL
TREATMENT; MANDATORY
GRADUA-
TION.—The provisions of subsections (d) and (e) of sec-
tion 502 of the Trade Act of 1974 (19 U.S.C. 2462) shall 
apply with respect to Mongolia to the same extent and 
in the same manner as such provisions apply with respect 
to beneficiary developing countries under title V of that 
Act (19 U.S.C. 2461 et seq.). 
(f) TERMINATION OF DUTY-FREE TREATMENT.—No 
duty-free treatment extended under this Act shall remain 
in effect after December 31, 2025. 
(g) DEFINITIONS.—In this section: 
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(1) CUSTOMS
TERRITORY
OF
THE
UNITED 
STATES.—The term ‘‘customs territory of the United 
States’’ has the meaning given the term in General 
Note 2 of the Harmonized Tariff Schedule of the 
United States. 
(2) CASHMERE.—The term ‘‘cashmere’’ means 
fine hair obtained from a cashmere goat (capra 
hircus laniger). 
SEC. 4. BRIEFING REQUIREMENT. 
(a) IN GENERAL.—Not later than one year after the 
date of the enactment of this Act, and periodically there-
after, the President shall monitor, review, and provide a 
briefing to the appropriate congressional committees on— 
(1) the implementation of this Act; 
(2) compliance of Mongolia with the eligibility 
requirements described in section 3(d); and 
(3) the trade and investment policy of the 
United States with respect to Mongolia. 
(b) APPROPRIATE
CONGRESSIONAL
COMMITTEES 
DEFINED.—In this section, the term ‘‘appropriate con-
gressional committees’’ means— 
(1) the Committee on Ways and Means and the 
Committee on Foreign Affairs of the House of Rep-
resentatives; and 
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(2) the Committee on Finance and the Com-
mittee on Foreign Relations of the Senate. 
Æ 
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