[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2260 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2260

  To provide conditions for renewing nondiscriminatory (most-favored-
         nation) treatment for the People's Republic of China.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                 July 1 (legislative day, June 7), 1994

Mr. Mitchell (for himself, Mr. Leahy, Mr. Wellstone, Mr. Feingold, Mr. 
  Kennedy, Mr. DeConcini, Mr. Metzenbaum, Mr. Sarbanes, Mr. Mack, Mr. 
  Levin, and Mr. Helms) introduced the following bill; which was read 
             twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To provide conditions for renewing nondiscriminatory (most-favored-
         nation) treatment for the People's Republic of China.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``United States-China Act of 1994''.

SEC. 2. FINDINGS AND POLICY.

    (a) Findings.--The Congress makes the following findings:
            (1) In Executive Order 12850, dated May 28, 1993, the 
        President established conditions for renewing most-favored-
        nation treatment for the People's Republic of China in 1994.
            (2) The Executive order requires that in recommending the 
        extension of most-favored-nation trade status to the People's 
        Republic of China for the 12-month period beginning July 3, 
        1994, the Secretary of State shall not recommend extension 
        unless the Secretary determines that such extension 
        substantially promotes the freedom of emigration objectives 
        contained in section 402 of the Trade Act of 1974 (19 U.S.C. 
        2432) and that China is complying with the 1992 bilateral 
        agreement between the United States and China concerning export 
        to the United States of products made with prison labor.
            (3) The Executive order further requires that in making the 
        recommendation, the Secretary of State shall determine if China 
        has made overall significant progress with respect to--
                    (A) taking steps to begin adhering to the Universal 
                Declaration of Human Rights;
                    (B) releasing and providing an acceptable 
                accounting for Chinese citizens imprisoned or detained 
                for the nonviolent expression of their political and 
                religious beliefs, including such expressions of 
                beliefs in connection with the Democracy Wall and 
                Tiananmen Square movements;
                    (C) ensuring humane treatment of prisoners, and 
                allowing access to prisons by international 
                humanitarian and human rights organizations;
                    (D protecting Tibet's distinctive religious and 
                cultural heritage; and
                    (E) permitting international radio and television 
                broadcasts into China.
            (4) The Executive order requires the executive branch to 
        resolutely pursue all legislative and executive actions to 
        ensure that China abides by its commitments to follow fair, 
        nondiscriminatory trade practices in dealing with United States 
        businesses and adheres to the Nuclear Nonproliferation Treaty, 
        the Missile Technology Control Regime guidelines and 
        parameters, and other nonproliferation commitments.
            (5) The Government of the People's Republic of China, a 
        member of the United Nations Security Council obligated to 
        respect and uphold the United Nations charter and Universal 
        Declaration of Human Rights, has over the past year made less 
        than significant progress on human rights. The People's 
        Republic of China has released only a few prominent political 
        prisoners and continues to violate internationally recognized 
        standards of human rights by arbitrary arrests and detention of 
        persons for the nonviolent expression of their political and 
        religious beliefs.
            (6) The Government of the People's Republic of China has 
        not allowed humanitarian and human rights organizations access 
        to prisons.
            (7) The Government of the People's Republic of China has 
        refused to meet with the Dalai Lama, or his representative, to 
        discuss the protection of Tibet's distinctive religious and 
        cultural heritage.
            (8) It continues to be the policy and practice of the 
        Government of the People's Republic of China to control all 
        trade unions and suppress and harass members of the independent 
        labor union movement.
            (9) The Government of the People's Republic of China 
        continues to restrict the activities of accredited journalists 
        and Voice of America broadcasts.
            (10) The People's Republic of China's defense industrial 
        trading companies and the People's Liberation Army engage in 
        lucrative trade relations with the United States and operate 
        lucrative commercial businesses within the United States. Trade 
        with and investments in the defense industrial trading 
        companies and the People's Liberation Army are contrary to the 
        national security interests of the United States.
            (11) The President has conducted an intensive high-level 
        dialogue with the Government of the People's Republic of China, 
        including meeting with the President of China, in an effort to 
        encourage that government to make significant progress toward 
        meeting the standards contained in the Executive order for 
        continuation of most-favored-nation treatment.
            (12) The Government of the People's Republic of China has 
        not made overall significant progress with respect to the 
        standards contained in the President's Executive Order 12850, 
        dated May 28, 1993.
    (b) Policy.--It is the policy of the Congress that, since the 
President has recommended the continuation of the waiver under section 
402(d) of the Trade Act of 1974 for the People's Republic of China for 
the 12-month period beginning July 3, 1994, such waiver shall not 
provide for extension of nondiscriminatory trade treatment to goods 
that are produced, manufactured, or exported by the People's Liberation 
Army or Chinese defense industrial trading companies or to nonqualified 
goods that are produced, manufactured, or exported by state-owned 
enterprises of the People's Republic of China.

SEC. 3. LIMITATIONS ON EXTENSION OF NONDISCRIMINATORY TREATMENT.

    (a) In General.--Notwithstanding any other provision of law--
            (1) if nondiscriminatory treatment is not granted to the 
        People's Republic of China by reason of the enactment into law 
        of a disapproval resolution described in subsection (b)(1), 
        nondiscriminatory treatment shall--
                    (A) continue to apply to any good that is produced 
                or manufactured by a person that is not a state-owned 
                enterprise of the People's Republic of China, but
                    (B) not apply to any good that is produced, 
                manufactured, or exported by a state-owned enterprise 
                of the People's Republic of China,
            (2) if nondiscriminatory treatment is granted to the 
        People's Republic of China for the 12-month period beginning on 
        July 3, 1994, such nondiscriminatory treatment shall not apply 
        to--
                    (A) any good that is produced, manufactured, or 
                exported by the People's Liberation Army or a Chinese 
                defense industrial trading company, or
                    (B) any nonqualified good that is produced, 
                manufactured, or exported by a state-owned enterprise 
                of the People's Republic of China, and
            (3) if nondiscriminatory treatment is or is not granted to 
        the People's Republic of China, the Secretary of the Treasury 
        should consult with leaders of American businesses having 
        significant trade with or investment in the People's Republic 
        of China, to encourage them to adopt a voluntary code of 
        conduct that--
                    (A) follows internationally recognized human rights 
                principles,
                    (B) ensures that the employment of Chinese citizens 
                is not discriminatory in terms of sex, ethnic origin, 
                or political belief,
                    (C) ensures that no convict, forced, or indentured 
                labor is knowingly used,
                    (D) recognizes the rights of workers to freely 
                organize and bargain collectively, and
                    (E) discourages mandatory political indoctrination 
                on business premises.
    (b) Disapproval Resolution.--
            (1) In general.--For purposes of this section, the term 
        ``resolution'' means only a joint resolution of the two Houses 
        of Congress, the matter after the resolving clause of which is 
        as follows: ``That the Congress does not approve the extension 
        of the authority contained in section 402(c) of the Trade Act 
        of 1974 recommended by the President to the Congress on 
        ______________________ with respect to the People's Republic of 
        China because the Congress does not agree that the People's 
        Republic of China has met the standards described in the 
        President's Executive Order 12850, dated May 28, 1993.'', with 
        the blank space being filled with the appropriate date.
            (2) Applicable rules.--The provisions of sections 153 
        (other than paragraphs (3) and (4) of subsection (b)) and 
        402(d)(2) (as modified by this subsection) of the Trade Act of 
        1974 shall apply to a resolution described in paragraph (1).
    (c) Determination of State-Owned Enterprises and Chinese Defense 
Industrial Trading Companies.--
            (1) In general.--Subject to paragraphs (2) and (3), not 
        later than 90 days after the date of the enactment of this Act, 
        the Secretary of the Treasury shall determine which persons are 
        state-owned enterprises of the People's Republic of China and 
        which persons are Chinese defense industrial trading companies 
        for purposes of this Act. The Secretary shall publish a list of 
        such persons in the Federal Register.
            (2) Public hearing.--
                    (A) General rule.--Before making the determination 
                and publishing the list required by paragraph (1), the 
                Secretary of the Treasury shall hold a public hearing 
                for the purpose of receiving oral and written testimony 
                regarding the persons to be included on the list.
                    (B) Additions and deletions.--The Secretary of the 
                Treasury may add or delete persons from the list based 
                on information available to the Secretary or upon 
                receipt of a request containing sufficient information 
                to take such action.
            (3) Definitions and special rules.--For purposes of making 
        the determination required by paragraph (1), the following 
        definitions apply:
                    (A) Chinese defense industrial trading company.--
                The term ``Chinese defense industrial trading 
                company''--
                            (i) means a person that is--
                                    (I) engaged in manufacturing, 
                                producing, or exporting, and
                                    (II) affiliated with or owned, 
                                controlled, or subsidized by the 
                                People's Liberation Army, and
                            (ii) includes any person identified in the 
                        United States Defense Intelligence Agency 
                        publication numbered VP-1920-271-90, dated 
                        September 1990.
                    (B) People's liberation army.--The term ``People's 
                Liberation Army'' means any branch or division of the 
                land, naval, or air military service or the police of 
                the Government of the People's Republic of China.
                    (C) State-owned enterprise of the people's republic 
                of china.--(i) The term ``state-owned enterprise of the 
                People's Republic of China'' means a person who is 
                affiliated with or wholly owned, controlled, or 
                subsidized by the Government of the People's Republic 
                of China and whose means of production, products, and 
                revenues are owned or controlled by a central or 
                provincial government authority. A person shall be 
                considered to be state-owned if--
                            (I) the person's assets are primarily owned 
                        by a central or provincial government 
                        authority;
                            (II) a substantial proportion of the 
                        person's profits are required to be submitted 
                        to a central or provincial government 
                        authority;
                            (III) the person's production, purchases of 
                        inputs, and sales of output, in whole or in 
                        part, are subject to state, sectoral, or 
                        regional plans; or
                            (IV) a license issued by a government 
                        authority classifies the person as state-owned.
                    (ii) Any person that--
                            (I) is a qualified foreign joint venture or 
                        is licensed by a governmental authority as a 
                        collective, cooperative, or private enterprise; 
                        or
                            (II) is wholly owned by a foreign person,
                shall not be considered to be state-owned.
                    (D) Qualified foreign joint venture.--The term 
                ``qualified foreign joint venture'' means any person--
                            (i) which is registered and licensed in the 
                        agency or department of the Government of the 
                        People's Republic of China concerned with 
                        foreign economic relations and trade as an 
                        equity, cooperative, contractual joint venture, 
                        or joint stock company with foreign investment;
                            (ii) in which the foreign investor partner 
                        and a person of the People's Republic of China 
                        share profits and losses and jointly manage the 
                        venture;
                            (iii) in which the foreign investor partner 
                        holds or controls at least 25 percent of the 
                        investment and the foreign investor partner is 
                        not substantially owned or controlled by a 
                        state-owned enterprise of the People's Republic 
                        of China;
                            (iv) in which the foreign investor partner 
                        is not a person of a country the government of 
                        which the Secretary of State has determined 
                        under section 6(j) of the Export Administration 
                        Act of 1979 (50 U.S.C. App. 2405(j)) to have 
                        repeatedly provided support for acts of 
                        international terrorism; and
                            (v) which does not use state-owned 
                        enterprises of the People's Republic of China 
                        to export its goods or services.
                    (E) Person.--The term ``person'' means a natural 
                person, corporation, partnership, enterprise, 
                instrumentality, agency, or other entity.
                    (F) Foreign investor partner.--The term ``foreign 
                investor partner'' means--
                            (i) a natural person who is not a citizen 
                        of the People's Republic of China; and
                            (ii) a corporation, partnership, 
                        instrumentality, enterprise, agency, or other 
                        entity that is organized under the laws of a 
                        country other than the People's Republic of 
                        China and 50 percent or more of the outstanding 
                        capital stock or beneficial interest of such 
                        entity is owned (directly or indirectly) by 
                        natural persons who are not citizens of the 
                        People's Republic of China.
                    (G) Nonqualified good.--The term ``nonqualified 
                good'' means a good to which chapter 39, 44, 48, 61, 
                62, 64, 70, 73, 84, 93, or 94 of the Harmonized Tariff 
                Schedule of the United States applies.
                    (H) Convict, forced, or indentured labor.--The term 
                ``convict, forced, or indentured labor'' has the 
                meaning given such term by section 307 of the Tariff 
                Act of 1930 (19 U.S.C. 1307).
                    (I) Violations of internationally recognized 
                standards of human rights.--The term ``violations of 
                internationally recognized standards of human rights'' 
                includes but is not limited to, torture, cruel, 
                inhuman, or degrading treatment or punishment, 
                prolonged detention without charges and trial, causing 
                the disappearance of persons by abduction and 
                clandestine detention of those persons, secret judicial 
                proceedings, and other flagrant denial of the right to 
                life, liberty, or the security of any person.
                    (J) Missile technology control regime.--The term 
                ``Missile Technology Control Regime'' means the 
                agreement, as amended, between the United States, the 
                United Kingdom, the Federal Republic of Germany, 
                France, Italy, Canada, and Japan, announced on April 
                16, 1987, to restrict sensitive missile-relevant 
                transfers based on an annex of missile equipment and 
                technology.
    (d) Semiannual Reports.--The Secretary of the Treasury shall, not 
later than 6 months after the date of the enactment of this Act, and 
the end of each 6-month period occurring thereafter, report to the 
Congress on the efforts of the executive branch to carry out subsection 
(c). The Secretary may include in the report a request for additional 
authority, if necessary, to carry out subsection (c). In addition, the 
report shall include information regarding the efforts of the executive 
branch to carry out subsection (a)(3).

SEC. 4. PRESIDENTIAL WAIVER.

    The President may waive the application of any condition or 
prohibition imposed on any person pursuant to this Act, if the 
President determines and reports to the Congress that the continued 
imposition of the condition or prohibition would have a serious adverse 
effect on the vital national security interests of the United States.

SEC. 5. REPORT BY THE PRESIDENT.

    If the President recommends in 1995 that the waiver referred to in 
section 2 be continued for the People's Republic of China, the 
President shall state in the document required to be submitted to the 
Congress by section 402(d) of the Trade Act of 1974, the extent to 
which the Government of the People's Republic of China has made 
progress during the period covered by the document, with respect to--
            (1) adhering to the provisions of the Universal Declaration 
        of Human Rights,
            (2) ceasing the exportation to the United States of 
        products made with convict, force, or indentured labor,
            (3) ceasing unfair and discriminatory trade practices which 
        restrict and unreasonably burden American business, and
            (4) adhering to the guidelines and parameters of the 
        Missile Technology Control Regime, the controls adopted by the 
        Nuclear Suppliers Group, and the controls adopted by the 
        Australia Group.

SEC. 6. SANCTIONS BY OTHER COUNTRIES.

    If the President decides not to seek a continuation of a waiver in 
1995 for the People's Republic of China under section 402(d) of the 
Trade Act of 1974, the President shall, during the 30-day period 
beginning on the date that the President would have recommended to the 
Congress that such a waiver be continued, undertake efforts to ensure 
that members of the General Agreement on Tariffs and Trade take a 
similar action with respect to the People's Republic of China.
                                 <all>
S 2260 IS----2