I 112th CONGRESS 1st Session H. R. 2271 IN THE HOUSE OF REPRESENTATIVES June 22, 2011 Mr. Royce (for himself and Mr. Connolly of Virginia) introduced the following bill; which was referred to the Committee on Oversight and Government Reform A BILL To prohibit the awarding of contracts by the Federal Government to Chinese entities until the People’s Republic of China signs the WTO Agreement on Government Procurement.

1.

Findings

Congress finds the following: (1)The Agreement on Government Procurement (GPA) is a plurilateral agreement among 41 members of the World Trade Organization (WTO) that provides reciprocal market access for certain government procurement projects. (2)Members of the GPA submit schedules containing lists of covered government entities, as well as goods and services that are open to bidding by firms of the other GPA members. (3)The People’s Republic of China became an official observer of the GPA committee in February 2002, and formally applied for GPA membership in December 2007, when it submitted its first offer. (4)The United States, along with several other major GPA parties, deemed China’s accession bid unacceptable. (5)China submitted a follow-up bid to join the GPA on July 9, 2010, that was viewed as an improvement from its previous offer, but was ultimately unacceptable to all GPA members, in part because the Chinese offer excluded purchases by local and provincial governments as well as state-owned enterprises. (6)Chinese entities continue to be awarded United States Government contracts, despite not being a party to the GPA. (7)Concerns remain over China’s alleged discriminatory procurement practices and policies against foreign firms. (8)China estimated its public procurement market at $110,000,000,000 in 2009. (9)The United States Department of Commerce estimated the Chinese public procurement market could be as high as $200,000,000,000 or more in its report entitled Doing Business in China, 2011 Country Commercial Guide for United States Companies. (10)The European Chamber of Commerce’s report, Public Procurement in China: European Business Experiences Competing for Public Contracts in China found that China’s overall public procurement market could be worth over 7 trillion RMB. FIEs (Foreign Invested Enterprise) competing for this market face numerous significant non-market challenges. (11)Congress urges the Chinese Government to end these discriminatory practices against United States businesses.

2.

Prohibition on Government contracts

(a)

Prohibition

No department or agency of the United States may enter into any contract with any Chinese entity for the procurement of goods or services until the Peoples Republic of China becomes a signatory to the Agreement on Government Procurement. (b)

Definitions

In this section: (1)

Agreement on government procurement

The term Agreement on Government Procurement means the Agreement on Government Procurement referred to in section 101(d)(17) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(17). (2)

Chinese entity

The term Chinese entity means any entity— (A)which is located in the People’s Republic of China; and (B)the majority of the equity or other ownership interests of which are owned or controlled by the Government of the People’s Republic of China or by Chinese nationals.

3.

Effective date

Section 2 applies to contracts entered into on or after the date of the enactment of this Act.