[WPRT 105-12]
[From the U.S. Government Publishing Office]


105th Congress                                                    WMCP:
2nd Session                 COMMITTEE PRINT                      105-12
_______________________________________________________________________

                                     


                         SUBCOMMITTEE ON TRADE

                                 OF THE

                      COMMITTEE ON WAYS AND MEANS

                     U.S. HOUSE OF REPRESENTATIVES

                               __________

                            WRITTEN COMMENTS

                                   ON
 
     THE EXTENSION OF NORMAL TRADE RELATIONS TO THE KYRGYZ REPUBLIC






                                     
[GRAPHIC] [TIFF OMITTED] CONGRESS.#13

                                     
                           FEBRUARY 10, 1999

  Printed for the use of the Committee on Ways and Means by its staff








                      COMMITTEE ON WAYS AND MEANS

                      BILL ARCHER, Texas, Chairman

PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
BILL THOMAS, California              FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida           ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut        BARBARA B. KENNELLY, Connecticut
JIM BUNNING, Kentucky                WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania      KAREN L. THURMAN, Florida
JOHN ENSIGN, Nevada
JON CHRISTENSEN, Nebraska
WES WATKINS, Oklahoma
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri

                     A.L. Singleton, Chief of Staff

                  Janice Mays, Minority Chief Counsel

                                 ______

                         Subcommittee on Trade

                  PHILIP M. CRANE, Illinois, Chairman

BILL THOMAS, California              ROBERT T. MATSUI, California
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
AMO HOUGHTON, New York               RICHARD E. NEAL, Massachusetts
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington            WILLIAM J. JEFFERSON, Louisiana
WALLY HERGER, California
JIM NUSSLE, Iowa


Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Ways and Means are also published 
in electronic form. The printed hearing record remains the official 
version. Because electronic submissions are used to prepare both 
printed and electronic versions of the hearing record, the process of 
converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________

                                                                   Page

Advisory of October 7, 1998, announcing request for written 
  comments on the extension of normal trade relations to the 
  Kyrgyz Republic................................................     1

                                 ______

American Council for International Education, Dan E. Davidson, 
  statement......................................................     3
North American-Kyrgyz Business Council, Falls Church, VA, Anne B. 
  Pendleton, letter..............................................     5
      

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                         SUBCOMMITTEE ON TRADE

                                                CONTACT: (202) 225-6649
FOR IMMEDIATE RELEASE

October 7, 1998

No. TR-31

                  Crane Announces Request for Written

                  Comments on the Extension of Normal

                 Trade Relations to the Kyrgyz Republic

    Congressman Philip M. Crane (R-IL), Chairman, Subcommittee on Trade 
of the Committee on Ways and Means, today announced that the 
Subcommittee is requesting written public comments for the record from 
all parties interested on the extension of unconditional normal trade 
relations (NTR) to the Kyrgyz Republic.
      

BACKGROUND:

      
    At present, the trade status of the Kyrgyz Republic is subject to 
the Jackson-Vanik amendment to Title IV of the Trade Act of 1974 (P.L. 
93-618), the provision of law governing the extension of NTR to 
nonmarket economy countries ineligible for such status as of the 
enactment of the Trade Act. A country subject to this provision may 
gain NTR, including NTR tariff treatment, only by complying with the 
freedom-of-emigration criteria under the Trade Act and by concluding a 
bilateral commercial agreement with the United States providing for 
reciprocal nondiscriminatory treatment. The extension of NTR is also 
subject to Congressional approval. The Trade Act authorizes the 
President to waive the requirements for full compliance with respect to 
a particular country if he determines that such a waiver will 
substantially promote the freedom-of-emigration provisions and if he 
has received assurances that the emigration practices of the country 
will lead substantially to the achievement of those objectives.
      
    On April 13, 1992, the President determined that a waiver for the 
Kyrgyz Republic from the Jackson-Vanik freedom-of-emigration criteria 
would substantially promote the emigration objectives of the Trade Act. 
This determination was followed on April 16, 1992, by Executive Order 
12802 under which the President's waiver determination entered into 
force. NTR, then most-favored-nation (MFN) treatment, was first 
extended to the Kyrgyz Republic effective August 21, 1992, following 
the country's ratification of the provisions in the bilateral trade 
agreement concluded on May 18, 1992, between the United States and the 
Kyrgyz Republic. Previously, Congress approved the United States-Soviet 
Union agreement in a joint resolution signed into law on December 9, 
1991 (P.L. 102-197). No further Congressional action was required to 
approve the extension of NTR to the Kyrgyz Republic because the 
agreement ratified by that country in 1992 reflected only technical 
changes in the previously approved original agreement with the Soviet 
Union.
      
    NTR with the Kyrgyz Republic continued in effect under Presidential 
waivers in subsequent years. On December 5, 1997, the President 
determined that the Kyrgyz Republic was in full compliance with the 
Jackson-Vanik freedom-of-emigration criteria.
      
    Pursuant to section 122 of the Uruguay Round Agreements Act (P.L. 
103-465) requiring Congressional consultation prior to country 
accessions to the World Trade Organization (WTO), the United States 
Trade Representative transmitted detailed materials to the Committee on 
Ways and Means on September 24, 1998, on the pending accession of the 
Kyrgyz Republic to the WTO. On October 14, 1998, the WTO Working Party 
on the Accession of the Kyrgyz Republic is scheduled to hold its final 
meeting to approve the protocol package and the invitation to the 
Kyrgyz Republic to become a member of the WTO. Because the United 
States has not extended unconditional NTR status to the Kyrgyz 
Republic, as a result of application of the Jackson-Vanik amendment to 
that country, the United States must invoke the non-application clause 
of the WTO (Article XXXV), meaning that it will not be able to apply 
the WTO Agreemeets to the Kyrgyz Republic after its accession to the 
WTO.
      
    On September 22, 1998, Rep. Gerald Solomon (R-NY) introduced 
legislation, H.R. 4606, authorizing the President to determine that the 
Jackson-Vanik amendment should no longer apply with respect to the 
Kyrgyz Republic. If the bill were to become law, the United States 
would be able to extend NTR to the Kyrgyz Republic, and all rights and 
obligations under the WTO agreed to by the two countries would apply.
      
    In 1997, U.S. exports to the Kyrgyz Republic in 1997 totaled $28.4 
million, while U.S. imports in return totaled $2.4 million. Top U.S. 
exports to the Kyrgyz Republic last year included cereals, machinery, 
inorganic chemicals and rare earth metals, and fats and oils. Leading 
U.S. imports from the Kyrgyz Republic in 1997 included inorganic 
chemicals and rare earth metals, base metals, and machinery.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Any person or organization wishing to submit a written statement 
for the printed record should submit six (6) single-spaced copies of 
their statement, along with an IBM compatible 3.5-inch diskette in 
WordPerfect 5.1 format, with their name, address, and comments date 
noted on label, by the close of business, Friday, November 6, 1998, to 
A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House 
of Representatives, 1102 Longworth House Office Building, Washington, 
D.C. 20515.
      

FORMATTING REQUIREMENTS:

      
    Each statement presented for printing to the Committee by a 
witness, any written statement or exhibit submitted for the printed 
record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or 
exhibit not in compliance with these guidelines will not be printed, 
but will be maintained in the Committee files for review and use by the 
Committee.
      
    1. All statements and any accompanying exhibits for printing must 
be submitted on an IBM compatible 3.5-inch diskette in WordPerfect 5.1 
format, typed in single space and may not exceed a total of 10 pages 
including attachments. Witnesses are advised that the Committee will 
rely on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. A witness appearing at a public hearing, or submitting a 
statement for the record of a public hearing, or submitting written 
comments in response to a published request for comments by the 
Committee, must include on his statement or submission a list of all 
clients, persons, or organizations on whose behalf the witness appears.
      
    4. A supplemental sheet must accompany each statement listing the 
name, company, address, telephone and fax numbers where the witness or 
the designated representative may be reached. This supplemental sheet 
will not be included in the printed record.
      
    The above restrictions and limitations apply only to material being 
submitted for printing. Statements and exhibits or supplementary 
material submitted solely for distribution to the Members, the press, 
and the public during the course of a public hearing may be submitted 
in other forms.
      

    Note: All Committee advisories and news releases are available on 
the World Wide Web at `HTTP://WWW.HOUSE.GOV/WAYS__MEANS/'.
      

      

                                

Statement of American Council for International Education: ACTR/ACCELS

    In response to the request for comments from the Ways and 
Means Trade Subcommittee regarding contemplated normalization 
of U.S. trade relations with the Kyrgyz Republic, I am pleased 
to submit this written statement on behalf of the American 
Council for International Education: ACTR/ACCELS. I am Dan E. 
Davidson, President of the American Councils, and professor of 
Russian and second language acquisition at Bryn Mawr College.
    The American Councils supports the required congressional 
action necessary to extend normal trade relations (NTR) to the 
Kyrgyz Republic, as contemplated in H.R. 4606, introduced 
September 22, 1998, by Rep. Solomon. This support is based on 
three considerations: (1) that the Kyrgyz Republic is expected 
to be admitted to the World Trade Organization (WTO) as the 
first of the 12 republics of the former Soviet Union to be so 
admitted; (2) that the Kyrgyz Republic's efforts at both 
economic reform and democratization have demonstrated a strong 
and abiding commitment to join the ranks of full and free 
democratic, open market-based societies; and (3) that NTR 
status for the Kyrgyz Republic will be a significant and 
meaningful expression of American support for this country's 
successful efforts at reform that will signal both positive 
assurance to the Kyrgyz government and people, and a strong 
incentive for their neighbors in Central Asia to follow the 
Kyrgyz example.
    Because the American Councils is an international education 
and exchange organization, our interest in free and 
unrestricted trade is based on our pursuit of open and 
unrestricted interchange between and among nations based on the 
belief that such interchange builds mutual understanding and 
peaceful relations. Truly free trade and open markets depend on 
free societies, and vice versa. Consequently, while we are not 
directly involved in significant commerce with Kyrgyzstan, our 
ability to succeed in this and other countries of the former 
Soviet Union is necessarily tied to their long-term trading 
relations with the United States.
    Furthermore, the American Councils has been engaged with 
education and training activities, underwritten by both the 
U.S. and Kyrgyz governments, and by private interests, that are 
intended to foster free trade, develop democratic institutions, 
and spur economic and political reform. We conduct a series of 
exchange programs involving students at all levels, teachers, 
scholars, and others in order to produce these results. We have 
had a U.S. presence in Bishkek since 1993--making us one of the 
first U.S. NGOs to be present in-country. We maintain a staff 
of U.S. expatriate and local employees in the capital and in 
Osh to conduct these programs. A list of the programs we 
conduct is attached at the end of this statement.

                        Kyrgyz Admission to WTO

    With the anticipated admission of the Kyrgyz Republic to 
the WTO, the United States faces the prospect of being unable 
to apply the WTO agreements to its trade with Kyrgyzstan, 
absent congressional action to permit NTR. Leaving aside the 
issues involving the relative size of U.S. trade with 
Kyrgyzstan and its impact in that country, there remains the 
need to be able to behave as a full partner with the Kyrgyz 
republic in our official and unofficial contacts. Symmetry in 
bilateral relations is a key element of successful U.S. 
engagement in this region. To have an anomaly--absent some 
overriding U.S. foreign policy concern--in trade relations with 
Kyrgyzstan related to WTO/NTR would be at least uncomfortable 
for both parties and likely would undermine the considerable 
positive influence that the U.S. government hopes to continue 
in this region. From my perspective as a champion of strong, 
friendly relations with Kyrgyzstan, admission to WTO should 
mean that this country has earned the privilege of 
``graduating'' to NTR.

                         Kyrgyz Reform Efforts

    While the economic reform and democratization that has been 
undertaken by Kyrgyzstan are not yet complete, the Kyrgyz have 
demonstrated a strong and abiding commitment to join the ranks 
of democratic, open-market nations. From the American Councils' 
perspective, I see this most clearly in both this country's 
enthusiastic embracing of U.S. assistance efforts, especially 
in the realm of human capacity development, and in their pro-
active efforts to duplicate and mimic education and training 
programs as a central component of their plans to reform their 
economy and build a vital private sector. Nowhere is this more 
vividly apparent than the Kyrgyz Republic's Kadry XXI Veka 
Presidential Scholarship Program, which the American Councils 
administers on their behalf. This program supports mostly 
undergraduate transfer students studying for degrees at U.S. 
institutions in fields ranging from business to journalism. 
These students are competitively identified for educational 
opportunities in the United States and targeted for jobs in the 
private sector and government that will serve the reform 
objectives of Kyrgyzstan. In a similar vein, the American 
Councils has administered a small exchange program for 
undergraduates supported through a Western mining company in 
support of that company's corporate development in Kyrgyzstan. 
Both of these programs are modeled in part on highly successful 
undergraduate and graduate exchange programs underwritten by 
the U.S. government through the U.S. Information Agency, which 
the American Councils administers.
    Throughout all of these exchange program activities, the 
Kyrgyz have demonstrated a working commitment to free and open 
movement for participants in these programs. In conducting 
open, merit-based competitions which produce participants from 
varied regional and ethnic backgrounds, whose political and 
religious beliefs are not necessarily those of the 
government's, the American Councils has consistently been able 
to secure passports and exit visas for Kyrgyz citizens, and has 
not experienced any pattern of official obstruction to 
participation in these programs that periodically occurs in 
other countries of this region. Indeed, it is my considered 
opinion that Kyrgyzstan has the most liberal orientation toward 
emigration and travel of any country in the former Soviet 
Union. In this regard, Kyrgyzstan would appear to have met the 
spirit of the Jackson-Vanik amendment.

            NTR Status as an American Expression of Support

    The Kyrgyz Republic's success at reform ought to be 
acknowledged through NTR as an affirmative expression of U.S. 
support for their efforts. Such an action would signal both 
positive American assurance to the Kyrgyz government and 
people, and a strong incentive for their neighbors in Central 
Asia to follow the Kyrgyz example. Relationships with the 
political leadership and citizens of Central Asian countries 
are viewed in such a way that the absence of reciprocity in the 
context of NTR is potentially an embarrassment for both 
countries. U.S. policy toward this country (and all countries 
of the former Soviet Union) has been built in large part on the 
premise that if one reforms one's economy and political 
structure to meet Western standards, the reformers will be 
rewarded as full partners in the international arena. U.S. 
extension of NTR will be seen as the appropriate response from 
our country, especially in the absence of any documented 
difficulties regarding the underlying concerns that drove the 
enactment of the Jackson-Vanik amendment to Title IV of the 
1974 Trade Act.
    I hope Congress will support the granting of NTR to 
Kyrgyzstan. I trust the American Councils experience in working 
in this country and with this region will give this 
Subcommittee confidence that this action is appropriate and 
consistent with our nation's trade policies and U.S. efforts to 
foster free and open societies. I appreciate the opportunity to 
present this written statement.

The American Councils for International Education: ACTR/ACCELS 
is a private, not-for-profit educational association and 
exchange organization devoted to improving education, 
professional training, and research within and about the 
Russian-speaking world, including both the Russian Federation 
and the many scores of non-Russian cultures and populations 
inhabiting the regions of central and eastern Europe and 
Eurasia. The organization, its governing boards, and members 
are strongly committed to the principle that an international 
perspective in scholarship and education contributes to the 
development of new critical frames of reference and strengthens 
conceptual and methodological approaches in many disciplines. 
Recognizing the importance of high levels of target language 
and cultural competence of both U.S. and foreign nationals to 
the normalization of U.S. relations with the countries of the 
region, the American Councils provides special support for 
regional language research and training, textbook development 
for Russian and the other languages of the region, the teaching 
of English as a foreign language, faculty and curriculum 
development, and in-country immersion programs as the historic 
and core mission of the organization.
    The American Councils administers more than 20 academic 
exchange and training programs in virtually all fields; 
provides educational advising and academic testing services 
throughout the NIS; organizes conferences and seminars in the 
United States and abroad for its membership, exchangees, 
exchange alumni and their professional groups; and engages an 
increasingly large number of professional educators and 
university administrators in programs designed to improve 
communication among educational, research, and professional 
communities in the NIS and the United States.
    The American Councils was formed in 1974 at a conference 
hosted at the Massachusetts Institute of Technology as the 
American Council for Teachers of Russian.
    For more information about the American Councils, please 
contact Carl A. Herrin, Director of Government Relations, at 
1776 Massachusetts Avenue, N.W., Suite 700, Washington, DC 
20036; telephone (202) 833-7522; or consult the American 
Councils web site at www.actr.org.
      

                                

Appendix: Selected American Councils Programs in Kyrgyzstan

    ACTR NIS Regional Language Program \1\
    ACTR Research Scholar Program \1\
    FSA Future Leaders Exchange Program (FLEX) \2\
    FSA Undergraduate Exchange Program \2\
    Edmund S. Muskie and FSA Graduate Fellowship Programs \2\
    FSA Awards for Excellence in Teaching Exchange Program \2\
    Regional Scholar Exchange Program \2\
    Kadry XXI Veka Presidential Scholarship Program \3\
    Kumtor Scholarship Program


    \1\ Program for Americans studying abroad.
    \2\ Program supported with U.S. Government funds.
    \3\ Program supported with Kyrgyz Republic funds.
      

                                

             The North American-Kyrgyz Business Council    
                               Falls Church, Virginia 22042
                                                   November 2, 1998

The Honorable Philip M. Crane
Chairman, Subcommittee on Trade
Committee on Ways and Means
U.S. House of Representatives
1102 Longworth House Office Building
Washington, D.C. 20515

    Dear Representative Crane:

    The North American-Kyrgyz Business Council is a not-for-profit 
association of 41 U.S. and Canadian businesses engaged in investment in 
and trade with the Kyrgyz Republic. We submit this letter on behalf of 
the Council and in connection with your pending consideration of the 
proposed extension of unconditional normal trade relations (NTR) with 
the Kyrgyz Republic.
    Kyrgyzstan is the first nation of the Commonwealth of Independent 
States to become a member of the World Trade Organization. This 
confirms what the members of our organization have appreciated for the 
past several years: following implementation of a successful 
privatization and market economic reform program, a free market system 
has been created in Kyrgyzstan. This fact alone would warrant extension 
of NTR.
    The Kyrgyz Republic has established an exemplary record in its 
transition towards a democratic society. The country saw significant 
out-migration of its ethnically Russian population in 1992-1996, but 
the last year has seen this trend reverse as Russian migrants return to 
Kyrgyzstan. This is strong evidence of the hospitable environment the 
country offers its ethnic minorities as well as evidence of the 
country's extremely liberal emigration and in-migration policies. 
Kyrgyzstan has also fostered a positive environment for NGO 
organizations, including those geared to the protection of human and 
civil rights and the rights of minority groups. All of this strongly 
suggests that the country fulfulls the key critria of the Jackson-
Vannick amendment.
    We would be pleased to offer testimonial and other support for the 
proposed extension of NTR at an appropriate juncture.

            Most sincerely,
                                          Anne B. Pendleton
                                                 Executive Director

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