and foreign-based companies operating in 
China, the Chinese regulatory environ-
ment, including specific regulations and 
overall regulatory transparency, and other 
Chinese industrial and financial policies. In 
addition, the analysis shall examine the 
specific 
competitive 
conditions 
facing 
United States producers in key industries, 
products, and sectors, potentially including 
computer and telecommunications hard-
ware, textiles, grains, cotton, and financial 
services. 
(iii) An examination of the role and 
importance of intellectual property rights 
issues, such as patents, copyrights, and li-
censing, in specific industries in China, in-
cluding the pharmaceutical industry, the 
software industry, and the entertainment 
industry. 
(iv) An analysis of the effects on glob-
al commodity markets of China’s growing 
demand for energy and raw materials. 
(v) An examination of whether or not 
increased United States imports from 
China reflect displacement of United
States imports from third countries or 
United States domestic production, and 
the role of intermediate and value-added 
goods processing in China’s pattern of 
trade. 
(2) REPORT.—Not later than one year after the 
date of the enactment of this Act, the United States 
International Trade Commission shall submit to the 
Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of 
the Senate a report that contains the results of the 
study carried out under paragraph (1). 
SEC. 9. SENSE OF CONGRESS REGARDING EXPANSION OF 
MEMBERSHIP IN THE AGREEMENT ON GOV-
ERNMENT PROCUREMENT OF THE WTO. 
(a) FINDINGS.—Congress finds the following: 
(1) Nondiscriminatory, procompetitive, merit- 
based, and technology-neutral procurement of goods 
and services is essential so that governments can ac-
quire the best goods to meet their needs for the best 
value. 
(2) The Agreement on Government Procure-
ment (GPA) of the World Trade Organization 
(WTO) provides a multilateral framework of rights 
and obligations founded on such principles.
(3) The United States is a member of the GPA, 
along with Canada, the European Union (including 
its 25 member States: Austria, Belgium, Cyprus, the 
Czech 
Republic, 
Denmark, 
Estonia, 
Finland, 
France, Germany, Greece, Hungary, Ireland, Italy, 
Latvia, Lithuania, Luxemburg, Malta, the Nether-
lands, Poland, Portugal, Slovak Republic, Slovenia, 
Spain, Sweden, and the United Kingdom), Hong 
Kong, Iceland, Israel, Japan, Korea, Liechtenstein, 
the Netherlands with respect to Aruba, Norway, 
Singapore, and Switzerland. 
(4) Albania, Bulgaria, Georgia, Jordan, the 
Kyrgyz Republic, Moldova, Oman, Panama, and Tai-
wan are currently negotiating to accede to the GPA. 
(5) The People’s Republic of China joined the 
WTO in December 2001, signaling to the inter-
national community its commitment to greater open-
ness. 
(6) When China joined the WTO, it committed, 
in its protocol of accession, to negotiate entry into 
the GPA ‘‘as soon as possible’’. 
(7) More than 3 years after its entry into the 
WTO, China has not commenced negotiations to join 
the GPA.
(8) Recent legal developments in China illus-
trate the importance and urgency of expanding 
membership in the GPA. 
(9) In 2002, China enacted a law on govern-
ment procurement that incorporates preferences for 
domestic goods and services. 
(10) The first sector for which the Chinese 
Government has sought to implement the new gov-
ernment procurement law is computer software. 
(11) In March 2005 the Chinese Government 
released draft regulations governing the procurement 
of computer software. 
(12) The draft regulations require that non- 
Chinese software companies meet conditions relating 
to outsourcing of software development work to 
China, technology transfer, and similar require-
ments, in order to be eligible to participate in the 
Chinese Government market. 
(13) As a result of the proposed regulations, it 
appears likely that a very substantial amount of 
American software will be excluded from the govern-
ment procurement process in China. The draft soft-
ware regulations threatened to close off a market 
with a potential value of more than $8 billion to 
United States firms.
(14) United States software companies have 
made a substantial commitment to the Chinese mar-
ket and have made a substantial contribution to the 
development of China’s software industry. 
(15) The outright exclusion of substantial 
amounts of software not of Chinese origin that is 
apparently contemplated in the regulations is out of 
step with domestic preferences that exist in the pro-
curement laws and practices of other WTO member 
countries, including the United States. 
(16) The draft regulations do not adhere to the 
principles 
of 
nondiscriminatory, 
procompetitive, 
merit-based, and technology-neutral procurement 
embodied in the GPA. 
(17) The software piracy rate in China has 
never fallen below 90 percent over the past 10 years. 
(18) Chinese Government entities represent a 
very significant portion of the software market in 
China that is not dominated by piracy. 
(19) The combined effect of rampant software 
piracy and the proposed discriminatory government 
procurement regulations will be a nearly impen-
etrable barrier to market access for the United 
States software industry in China.
(20) The United States trade deficit with China 
in 2004 was $162,000,000,000, the highest with any 
economy in the world, and a 12.4 percent increase 
over 2003. 
(21) China’s Premier, Wen Jiabao, has com-
mitted to rectify this serious imbalance by increasing 
China’s imports of goods and services from the 
United States. 
(22) The proposed software procurement regu-
lations that were described by the Chinese Govern-
ment in November 2004 incorporate policies that are 
fully at odds with Premier Wen’s commitment to in-
crease China’s imports from the United States, and 
will add significantly to the trade imbalance between 
the United States and China. 
(23) Once it is fully implemented, the discrimi-
natory aspects of China’s government procurement 
law will apply to all goods and services that the gov-
ernment procures. 
(24) Other developing countries may follow the 
lead of China. 
(25) In July 2005, senior officials of the Chi-
nese Government announced at the U.S.-China Joint 
Committee on Commerce and Trade that China 
would accelerate its efforts to join the GPA and to-
ward this end will initiate technical consultations 
with other WTO member countries and accordingly 
delay issuing draft regulations on software procure-
ment, as it further considers public comments and 
makes revisions in light of WTO rules. 
(b) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) the Government of the United States should 
strive to expand membership in the Agreement on 
Government Procurement of the World Trade Orga-
nization (WTO); 
(2) the Government of the United States should 
ensure that the Government of the People’s Republic 
of China meets its WTO obligations as recently af-
firmed through its commitment in July 2005 
through the U.S.-China Joint Committee on Com-
merce and Trade, to join the WTO Agreement on 
Government Procurement. 
(3) the Government of the United States should 
seek a commitment from the Government of the 
People’s Republic of China to maintain its suspen-
sion of the implementation of its law on government 
procurement, pending the conclusion of negotiations 
to accede to the Agreement on Government Procure-
ment of the WTO;
(4) the Government of the United States should 
seek commitments from the Government of the Peo-
ple’s Republic of China and other countries that are 
not yet members of the Agreement on Government 
Procurement of the WTO to implement the prin-
ciples of openness, transparency, fair competition 
based on merit, nondiscrimination, and account-
ability in their government procurement as embodied 
in that agreement; and 
(5) the President should direct all appropriate 
officials of the United States to raise these concerns 
with appropriate officials of the People’s Republic of 
China and other trading partners. 
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