[House Report 106-632]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-632

======================================================================



 
  PERMANENT NORMAL TRADE RELATIONS WITH THE PEOPLE'S REPUBLIC OF CHINA

                                _______
                                

  May 22, 2000.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Archer, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 4444]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 4444) to authorize extension of nondiscriminatory 
treatment (normal trade relations treatment) to the People's 
Republic of China, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
  I. Introduction.....................................................8
        A. Purpose and Summary...................................     8
        B. Background............................................     9
        C. Legislative History...................................    12
 II. Explanation of the Resolution...................................13
III. Votes of the Committee..........................................19
 IV. Budget Effect...................................................21
        A. Committee Estimate of Budgetary Effects...............    21
        B. Statement Regarding New Budget Authority and Tax 
            Expenditures.........................................    21
        C. Cost Estimate Prepared by the Congressional Budget 
            Office...............................................    21
  V. Other Matters to be Discussed Under the Rules of the House......23
        A. Committee Oversight Findings and Recommendations......    23
        B. Summary of Findings and Recommendations of the 
            Committee on Government Reform and Oversight.........    23
        C. Constitutional Authority Statement....................    24
 VI. Change in Existing Laws.........................................24
VII. Additional Views................................................35

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. TERMINATION OF APPLICATION OF CHAPTER 1 OF TITLE IV OF THE 
                    TRADE ACT OF 1974 TO THE PEOPLE'S REPUBLIC OF 
                    CHINA.

  (a) Presidential Determinations and Extension of Nondiscriminatory 
Treatment.--Notwithstanding any provision of chapter 1 of title IV of 
the Trade Act of 1974 (19 U.S.C. 2431 et seq.), as designated by 
section 3(a)(2) of this Act, the President may--
          (1) determine that such chapter should no longer apply to the 
        People's Republic of China; and
          (2) after making a determination under paragraph (1) with 
        respect to the People's Republic of China, proclaim the 
        extension of nondiscriminatory treatment (normal trade 
        relations treatment) to the products of that country.
  (b) Accession of the People's Republic of China to the World Trade 
Organization.--Prior to making the determination provided for in 
subsection (a)(1) and pursuant to the provisions of section 122 of the 
Uruguay Round Agreements Act (19 U.S.C. 3532), the President shall 
transmit a report to Congress certifying that the terms and conditions 
for the accession of the People's Republic of China to the World Trade 
Organization are at least equivalent to those agreed between the United 
States and the People's Republic of China on November 15, 1999.

SEC. 2. EFFECTIVE DATE.

  (a) Effective Date of Nondiscriminatory Treatment.--The extension of 
nondiscriminatory treatment pursuant to section 1(a)(1) shall be 
effective no earlier than the effective date of the accession of the 
People's Republic of China to the World Trade Organization.
  (b) Termination of Applicability of Title IV.--On and after the 
effective date under subsection (a) of the extension of 
nondiscriminatory treatment to the products of the People's Republic of 
China, chapter 1 of title IV of the Trade Act of 1974 (as designated by 
section 3(a)(2) of this Act) shall cease to apply to that country.

SEC. 3. RELIEF FROM MARKET DISRUPTION.

  (a) In General.--Title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
seq.) is amended--
          (1) in the title heading, by striking ``CURRENTLY'';
          (2) by inserting before section 401 the following:

       ``CHAPTER 1--TRADE RELATIONS WITH CERTAIN COUNTRIES''; and

          (3) by adding at the end the following new chapter:

``CHAPTER 2--RELIEF FROM MARKET DISRUPTION TO INDUSTRIES AND DIVERSION 
                  OF TRADE TO THE UNITED STATES MARKET

``SEC. 421. ACTION TO ADDRESS MARKET DISRUPTION.

  ``(a) Presidential Action.--If a product of the People's Republic of 
China is being imported into the United States in such increased 
quantities or under such conditions as to cause or threaten to cause 
market disruption to the domestic producers of a like or directly 
competitive product, the President shall, in accordance with the 
provisions of this section, proclaim increased duties or other import 
restrictions with respect to such product, to the extent and for such 
period as the President considers necessary to prevent or remedy the 
market disruption.
  ``(b) Initiation of an Investigation.--(1) Upon the filing of a 
petition by an entity described in section 202(a) of the Trade Act of 
1974 (19 U.S.C. 2252(a)), upon the request of the President or the 
United States Trade Representative (in this subtitle referred to as the 
`Trade Representative'), upon resolution of either the Committee on 
Ways and Means of the House of Representatives, or the Committee on 
Finance of the Senate (in this subtitle referred to as the 
`Committees') or on its own motion, the United States International 
Trade Commission (in this subtitle referred to as the `Commission') 
shall promptly make an investigation to determine whether products of 
the People's Republic of China are being imported into the United 
States in such increased quantities or under such conditions as to 
cause or threaten to cause market disruption to the domestic producers 
of like or directly competitive products.
  ``(2) The limitations on investigations set forth in section 
202(h)(1) of the Trade Act of 1974 (19 U.S.C. 2252(h)(1)) shall apply 
to investigations conducted under this section.
  ``(3) The provisions of subsections (a)(8) and (i) of section 202 of 
the Trade Act of 1974 (19 U.S.C. 2252(a)(8) and (i)), relating to 
treatment of confidential business information, shall apply to 
investigations conducted under this section.
  ``(4) Whenever a petition is filed, or a request or resolution is 
received, under this subsection, the Commission shall transmit a copy 
thereof to the President, the Trade Representative, the Committee on 
Ways and Means of the House of Representatives, and the Committee of 
Finance of the Senate, except that in the case of confidential business 
information, the copy may include only nonconfidential summaries of 
such information.
  ``(5) The Commission shall publish notice of the commencement of any 
proceeding under this subsection in the Federal Register and shall, 
within a reasonable time thereafter, hold public hearings at which the 
Commission shall afford interested parties an opportunity to be 
present, to present evidence, to respond to the presentations of other 
parties, and otherwise to be heard.
  ``(c) Market Disruption.--(1) For purposes of this section, market 
disruption exists whenever imports of an article like or directly 
competitive with an article produced by a domestic industry are 
increasing rapidly, either absolutely or relatively, so as to be a 
significant cause of material injury, or threat of material injury, to 
the domestic industry.
  ``(2) For purposes of paragraph (1), the term `significant cause' 
refers to a cause which contributes significantly to the material 
injury of the domestic industry, but need not be equal to or greater 
than any other cause.
  ``(d) Factors in Determination.--In determining whether market 
disruption exists, the Commission shall consider objective factors, 
including--
          ``(1) the volume of imports of the product which is the 
        subject of the investigation;
          ``(2) the effect of imports of such product on prices in the 
        United States for like or directly competitive articles; and
          ``(3) the effect of imports of such product on the domestic 
        industry producing like or directly competitive articles.
The presence or absence of any factor under paragraph (1), (2), or (3) 
is not necessarily dispositive of whether market disruption exists.
  ``(e) Time for Commission Determinations.--The Commission shall make 
and transmit to the President and the Trade Representative its 
determination under subsection (b)(1) at the earliest practicable time, 
but in no case later than 60 days (or 90 days in the case of a petition 
requesting relief under subsection (i)) after the date on which the 
petition is filed, the request or resolution is received, or the motion 
is adopted, under subsection (b). If the Commissioners voting are 
equally divided with respect to its determination, then the 
determination agreed upon by either group of Commissioners may be 
considered by the President and the Trade Representative as the 
determination of the Commission.
  ``(f) Recommendations of Commission on Proposed Remedies.--If the 
Commission makes an affirmative determination under subsection (b), or 
a determination which the President or the Trade Representative may 
consider as affirmative under subsection (e), the Commission shall 
propose the amount of increase in, or imposition of, any duty or other 
import restrictions necessary to prevent or remedy the market 
disruption. Only those members of the Commission who agreed to the 
affirmative determination under subsection (b) are eligible to vote on 
the proposed action to prevent or remedy market disruption. Members of 
the Commission who did not agree to the affirmative determination may 
submit, in the report required under subsection (g), separate views 
regarding what action, if any, should be taken to prevent or remedy 
market disruption.
  ``(g) Report by Commission.--(1) Not later than 20 days after a 
determination under subsection (b) is made, the Commission shall submit 
a report to the President and the Trade Representative.
  ``(2) The Commission shall include in the report required under 
paragraph (1) the following:
          ``(A) The determination made under subsection (b) and an 
        explanation of the basis for the determination.
          ``(B) If the determination under subsection (b) is 
        affirmative, or may be considered by the President or the Trade 
        Representative as affirmative under subsection (e), the 
        recommendations of the Commission on proposed remedies under 
        subsection (f) and an explanation of the basis for each 
        recommendation.
          ``(C) Any dissenting or separate views by members of the 
        Commission regarding the determination and any recommendation 
        referred to in subparagraphs (A) and (B).
          ``(D) A description of--
                  ``(i) the short- and long-term effects that 
                implementation of the action recommended under 
                subsection (f) is likely to have on the petitioning 
                domestic industry, on other domestic industries, and on 
                consumers; and
                  ``(ii) the short- and long-term effects of not taking 
                the recommended action on the petitioning domestic 
                industry, its workers, and the communities where 
                production facilities of such industry are located, and 
                on other domestic industries.
  ``(3) The Commission, after submitting a report to the President 
under paragraph (1), shall promptly make it available to the public 
(but shall not include confidential business information) and cause a 
summary thereof to be published in the Federal Register.
  ``(h) Opportunity To Present Views and Evidence on Proposed Measure 
and Recommendation to the President.--(1) Within 20 days after receipt 
of the Commission's report under subsection (g) (or 15 days in the case 
of an affirmative preliminary determination under subsection 
(i)(1)(B)), the Trade Representative shall publish in the Federal 
Register notice of any measure proposed by the Trade Representative to 
be taken pursuant to subsection (a) and of the opportunity, including a 
public hearing, if requested, for importers, exporters, and other 
interested parties to submit their views and evidence on the 
appropriateness of the proposed measure and whether it would be in the 
public interest.
  ``(2) Within 55 days after receipt of the report under subsection (g) 
(or 35 days in the case of an affirmative preliminary determination 
under subsection (i)(1)(B)), the Trade Representative, taking into 
account the views and evidence received under paragraph (1) on the 
measure proposed by the Trade Representative, shall make a 
recommendation to the President concerning what action, if any, to take 
to prevent or remedy the market disruption.
  ``(i) Critical Circumstances.--(1) When a petition filed under 
subsection (b) alleges that critical circumstances exist and requests 
that provisional relief be provided under this subsection with respect 
to the product identified in the petition, the Commission shall, not 
later than 45 days after the petition containing the request is filed--
          ``(A) determine whether delay in taking action under this 
        section would cause damage to the relevant domestic industry 
        which would be difficult to repair; and
          ``(B) if the determination under subparagraph (A) is 
        affirmative, make a preliminary determination of whether 
        imports of the product which is the subject of the 
        investigation have caused or threatened to cause market 
        disruption.
If the Commissioners voting are equally divided with respect to either 
of its determinations, then the determination agreed upon by either 
group of Commissioners may be considered by the President and the Trade 
Representative as the determination of the Commission.
  ``(2) On the date on which the Commission completes its 
determinations under paragraph (1), the Commission shall transmit a 
report on the determinations to the President and the Trade 
Representative, including the reasons for its determinations. If the 
determinations under paragraph (1) are affirmative, or may be 
considered by the President or the Trade Representative as affirmative 
under paragraph (1), the Commission shall include in its report its 
recommendations on proposed provisional measures to be taken to prevent 
or remedy the market disruption. Only those members of the Commission 
who agreed to the affirmative determinations under paragraph (1) are 
eligible to vote on the proposed provisional measures to prevent or 
remedy market disruption. Members of the Commission who did not agree 
to the affirmative determinations may submit, in the report, dissenting 
or separate views regarding the determination and any recommendation of 
provisional measures referred to in this paragraph.
  ``(3) If the determinations under paragraph (1) are affirmative, or 
may be considered by the President or the Trade Representative as 
affirmative under paragraph (1), the Trade Representative shall, within 
10 days after receipt of the Commission's report, determine the amount 
or extent of provisional relief that is necessary to prevent or remedy 
the market disruption and shall provide a recommendation to the 
President on what provisional measures, if any, to take.
  ``(4)(A) The President shall determine whether to provide provisional 
relief and proclaim such relief, if any, within 10 days after receipt 
of the recommendation from the Trade Representative.
  ``(B) Such relief may take the form of--
          ``(i) the imposition of or increase in any duty;
          ``(ii) any modification, or imposition of any quantitative 
        restriction on the importation of an article into the United 
        States; or
          ``(iii) any combination of actions under clauses (i) and 
        (ii).
  ``(C) Any provisional action proclaimed by the President pursuant to 
a determination of critical circumstances shall remain in effect not 
more than 200 days.
  ``(D) Provisional relief shall cease to apply upon the effective date 
of relief proclaimed under subsection (a), upon a decision by the 
President not to provide such relief, or upon a negative determination 
by the Commission under subsection (b).
  ``(j) Agreements With the People's Republic of China.--(1) The Trade 
Representative is authorized to enter into agreements for the People's 
Republic of China to take such action as necessary to prevent or remedy 
market disruption, and should seek to conclude such agreements before 
the expiration of the 60-dayconsultation period provided for under the 
product-specific safeguard provision of the Protocol of Accession of 
the People's Republic of China to the WTO, which shall commence not 
later than 5 days after the Trade Representative receives an 
affirmative determination provided for in subsection (e) or a 
determination which the Trade Representative considers to be an 
affirmative determination pursuant to subsection (e).
  ``(2) If no agreement is reached with the People's Republic of China 
pursuant to consultations under paragraph (1), or if the President 
determines than an agreement reached pursuant to such consultations is 
not preventing or remedying the market disruption at issue, the 
President shall provide import relief in accordance with subsection 
(a).
  ``(k) Standard for Presidential Action.--(1) Within 15 days after 
receipt of a recommendation from the Trade Representative under 
subsection (h) on the appropriate action, if any, to take to prevent or 
remedy the market disruption, the President shall provide import relief 
for such industry pursuant to subsection (a), unless the President 
determines that provision of such relief is not in the national 
economic interest of the United States or, in extraordinary cases, that 
the taking of action pursuant to subsection (a) would cause serious 
harm to the national security of the United States.
  ``(2) The President may determine under paragraph (1) that providing 
import relief is not in the national economic interest of the United 
States only if the President finds that the taking of such action would 
have an adverse impact on the United States economy clearly greater 
than the benefits of such action.
  ``(l) Publication of Decision and Reports.--(1) The President's 
decision, including the reasons therefor and the scope and duration of 
any action taken, shall be published in the Federal Register.
  ``(2) The Commission shall promptly make public any report 
transmitted under this section, but shall not make public any 
information which the Commission determines to be confidential, and 
shall publish notice of such report in the Federal Register.
  ``(m) Effective Date of Relief.--Import relief under this section 
shall take effect not later than 15 days after the President's 
determination to provide such relief.
  ``(n) Modifications of Relief.--(1) At any time after the end of the 
6-month period beginning on the date on which relief under subsection 
(m) first takes effect, the President may request that the Commission 
provide a report on the probable effect of the modification, reduction, 
or termination of the relief provided on the relevant industry. The 
Commission shall transmit such report to the President within 60 days 
of the request.
  ``(2) The President may, after receiving a report from the Commission 
under paragraph (1), take such action to modify, reduce, or terminate 
relief that the President determines is necessary to continue to 
prevent or remedy the market disruption at issue.
  ``(3) Upon the granting of relief under subsection (k), the 
Commission shall collect such data as is necessary to allow it to 
respond rapidly to a request by the President under paragraph (1).
  ``(o) Extension of Action.--(1) Upon request of the President, or 
upon petition on behalf of the industry concerned filed with the 
Commission not earlier than the date which is 9 months, and not later 
than the date which is 6 months, before the date any relief provided 
under subsection (k) is to terminate, the Commission shall investigate 
to determine whether action under this section continues to be 
necessary to prevent or remedy market disruption.
  ``(2) The Commission shall publish notice of the commencement of any 
proceeding under this subsection in the Federal Register and shall, 
within a reasonable time thereafter, hold a public hearing at which the 
Commission shall afford interested parties and consumers an opportunity 
to be present, to present evidence, and to respond to the presentations 
of other parties and consumers, and otherwise to be heard.
  ``(3) The Commission shall transmit to the President a report on its 
investigation and determination under this subsection not later than 60 
days before the action under subsection (m) is to terminate.
  ``(4) The President, after receiving an affirmative determination 
from the Commission under paragraph (3), may extend the effective 
period of any action under this section if the President determines 
that the action continues to be necessary to prevent or remedy the 
market disruption.

``SEC. 422. ACTION IN RESPONSE TO TRADE DIVERSION.

  ``(a) Monitoring by Customs Service.--In any case in which a WTO 
member other than the United States requests consultations with the 
People's Republic of China under the product-specific safeguard 
provision of the Protocol of Accession of the People's Republic of 
China to the World Trade Organization, the Trade Representative shall 
inform the United States Customs Service, which shall monitor imports 
into the United States of those products of Chinese origin that are the 
subject of the consultation request. Data from such monitoring shall 
promptly be made available to the Commission upon request by the 
Commission.
  ``(b) Initiation of Investigation.--(1) Upon the filing of a petition 
by an entity described in section 202(a) of the Trade Act of 1974, upon 
the request of the President or the Trade Representative, upon 
resolution of either of the Committees, or on its own motion, the 
Commission shall promptly make an investigation to determine whether an 
action described in subsection (c) has caused, or threatens to cause, a 
significant diversion of trade into the domestic market of the United 
States.
  ``(2) The Commission shall publish notice of the commencement of any 
proceeding under this subsection in the Federal Register and shall, 
within a reasonable time thereafter, hold public hearings at which the 
Commission shall afford interested parties an opportunity to be 
present, to present evidence, to respond to the presentations of other 
parties, and otherwise to be heard.
  ``(3) The provisions of subsections (a)(8) and (i) of section 202 of 
the Trade Act of 1974 (19 U.S.C. 2252(a)(8) and (i)), relating to 
treatment of confidential business information, shall apply to 
investigations conducted under this section.
  ``(c) Actions Described.--An action is described in this subsection 
if it is an action--
          ``(1) by the People's Republic of China to prevent or remedy 
        market disruption in a WTO member other than the United States;
          ``(2) by a WTO member other than the United States to 
        withdraw concessions under the WTO Agreement or otherwise to 
        limit imports to prevent or remedy market disruption;
          ``(3) by a WTO member other than the United States to apply a 
        provisional safeguard within the meaning of the product-
        specific safeguard provision of the Protocol of Accession of 
        the People's Republic of China to the WTO; or
          ``(4) any combination of actions described in paragraphs (1) 
        through (3).
  ``(d) Basis for Determination of Significant Diversion.--(1) In 
determining whether significant diversion or the threat thereof exists 
for purposes of this section, the Commission shall take into account, 
to the extent such evidence is reasonably available--
          ``(A) the monitoring conducted under subsection (a);
          ``(B) the actual or imminent increase in United States market 
        share held by such imports from the People's Republic of China;
          ``(C) the actual or imminent increase in volume of such 
        imports into the United States;
          ``(D) the nature and extent of the action taken or proposed 
        by the WTO member concerned;
          ``(E) the extent of exports from the People's Republic of 
        China to that WTO member and to the United States;
          ``(F) the actual or imminent changes in exports to that WTO 
        member due to the action taken or proposed;
          ``(G) the actual or imminent diversion of exports from the 
        People's Republic of China to countries other than the United 
        States;
          ``(H) cyclical or seasonal trends in import volumes into the 
        United States of the products at issue; and
          ``(I) conditions of demand and supply in the United States 
        market for the products at issue.
The presence or absence of any factor under any of subparagraphs (A) 
through (I) is not necessarily dispositive of whether a significant 
diversion of trade or the threat thereof exists.
  ``(2) For purposes of making its determination, the Commission shall 
examine changes in imports into the United States from the People's 
Republic of China since the time that the WTO member commenced the 
investigation that led to a request for consultations described in 
subsection (a).
  ``(3) If more than 1 action by a WTO member or WTO members against a 
particular product is identified in the petition, request, or 
resolution under subsection (b) or during the investigation, the 
Commission may cumulatively assess the actual or likely effects of such 
actions jointly in determining whether a significant diversion of trade 
or threat thereof exists.
  ``(e) Commission Determination; Agreement Authority.--(1) The 
Commission shall make and transmit to the President and the Trade 
Representative its determination under subsection (b) at the earliest 
practicable time, but in no case later than 45 days after the date on 
which the petition is filed, the request orresolution is received, or 
the motion is adopted, under subsection (b). If the Commissioners 
voting are equally divided with respect to its determination, then the 
determination agreed upon by either group of Commissioners may be 
considered by the President and the Trade Representative as the 
determination of the Commission.
  ``(2) The Trade Representative is authorized to enter into agreements 
with the People's Republic of China or the other WTO members concerned 
to take such action as necessary to prevent or remedy significant trade 
diversion or threat thereof into the domestic market of the United 
States, and should seek to conclude such agreements before the 
expiration of the 60-day consultation period provided for under the 
product-specific safeguard provision of the Protocol of Accession of 
the People's Republic of China to the WTO, which shall commence not 
later than 5 days after the Trade Representative receives an 
affirmative determination provided for in paragraph (1) or a 
determination which the Trade Representative considers to be an 
affirmative determination pursuant to paragraph (1).
  ``(3) Report by Commission.--
          ``(A) Not later than 10 days after a determination under 
        subsection (b), is made, the Commission shall transmit a report 
        to the President and the Trade Representative.
          ``(B) The Commission shall include in the report required 
        under subparagraph (A) the following:
                  ``(i) The determination made under subsection (b) and 
                an explanation of the basis for the determination.
                  ``(ii) If the determination under subsection (b) is 
                affirmative, or may be considered by the President or 
                the Trade Representative as affirmative under 
                subsection (e)(1), the recommendations of the 
                Commission on increased tariffs or other import 
                restrictions to be imposed to prevent or remedy the 
                trade diversion or threat thereof, and explanations of 
                the bases for such recommendations. Only those members 
                of the Commission who agreed to the affirmative 
                determination under subsection (b) are eligible to vote 
                on the proposed action to prevent or remedy the trade 
                diversion or threat thereof.
                  ``(iii) Any dissenting or separate views by members 
                of the Commission regarding the determination and any 
                recommendation referred to in clauses (i) and (ii).
                  ``(iv) A description of--
                          ``(I) the short- and long-term effects that 
                        implementation of the action recommended under 
                        clause (ii) is likely to have on the 
                        petitioning domestic industry, on other 
                        domestic industries, and on consumers; and
                          ``(II) the short- and long-term effects of 
                        not taking the recommended action on the 
                        petitioning domestic industry, its workers and 
                        the communities where production facilities of 
                        such industry are located, and on other 
                        domestic industries.
          ``(C) The Commission, after submitting a report to the 
        President under subparagraph (A), shall promptly make it 
        available to the public (with the exception of confidential 
        business information) and cause a summary thereof to be 
        published in the Federal Register.
  ``(f) Public Comment.--If consultations fail to lead to an agreement 
with the People's Republic of China or the WTO member concerned within 
60 days, the Trade Representative shall promptly publish notice in the 
Federal Register of any proposed action to prevent or remedy the trade 
diversion, and provide an opportunity for interested persons to present 
views and evidence on whether the proposed action is in the public 
interest.
  ``(g) Recommendation to the President.--Within 20 days after the end 
of consultations pursuant to subsection (e), the Trade Representative 
shall make a recommendation to the President on what action, if any, 
should be taken to prevent or remedy the trade diversion or threat 
thereof.
  ``(h) Presidential Action.--Within 20 days after receipt of the 
recommendation from the Trade Representative, the President shall 
determine what action to take to prevent or remedy the trade diversion 
or threat thereof.
  ``(i) Duration of Action.--Action taken under subsection (h) shall be 
terminated not later than 30 days after expiration of the action taken 
by the WTO member or members involved against imports from the People's 
Republic of China.
  ``(j) Review of Circumstances.--(1) The Commission shall review the 
continued need for action taken under subsection (h) if the WTO member 
or members involved notify the Committee on Safeguards of the WTO of 
any modification in the action taken by them against the People's 
Republic of China pursuant to consultation referred to in subsection 
(a). The Commission shall, not later than 60 days after such 
notification, determine whether a significant diversion of trade 
continues to exist and report its determination to the President. The 
President shall determine, within 15 days after receiving the 
Commission's report, whether to modify, withdraw, or keep in place the 
action taken under subsection (h).

``SEC. 423. REGULATIONS; TERMINATION OF PROVISION.

  ``(a) To Carry Out Restrictions and Monitoring.--The President shall 
by regulation provide for the efficient and fair administration of any 
restriction proclaimed pursuant to the subtitle and to provide for 
effective monitoring of imports under section 422(a).
  ``(b) To Carry Out Agreements.--To carry out an agreement concluded 
pursuant to consultations under section 421(j) or 422(e)(2), the 
President is authorized to prescribe regulations governing the entry or 
withdrawal from warehouse of articles covered by such agreement.
  ``(c) Termination Date.--This subtitle and any regulations issued 
under this subtitle shall cease to be effective 12 years after the date 
of entry into force of the Protocol of Accession of the People's 
Republic of China to the WTO.''.
  (b) Conforming Amendment.--The table of contents of the Trade Act of 
1974 is amended--
          (1) in the item relating to title IV, by striking 
        ``CURRENTLY'';
          (2) by inserting before the item relating to section 401 the 
        following:

       ``Chapter 1--Trade Relations With Certain Countries''; and

          (3) by adding after the item relating to section 409 the 
        following:

``Chapter 2--Relief From Market Disruption to Industries and Diversion 
                  of Trade to the United States Market

``Sec. 421. Action to address market disruption.
``Sec. 422. Action in response to trade diversion.
``Sec. 423. Regulations; termination of provision.''.

SEC. 4. AMENDMENT TO SECTION 123 OF THE TRADE ACT OF 1974--COMPENSATION 

                    AUTHORITY.

  Section 123(a)(1) of the Trade Act of 1974 (19 U.S.C. 2133(a)(1)) is 
amended by inserting after ``title III'' the following; ``, or under 
chapter 2 of title IV of the Trade Act of 1974''.

                            I. INTRODUCTION


                         A. Purpose and Summary

    H.R. 4444 amends Title IV of the Trade Act of 1974 to 
remove the People's Republic of China (China) from the list of 
countries subject to this provision upon the accession of China 
to the World Trade Organization and upon certification by the 
President that the final terms of accession are at least 
equivalent to the terms of the November 15, 1999 bilateral 
agreement between the United States and the People's Republic 
of China.

                             B. Background


The Jackson-Vanik amendment

    At present, China's trade status is subject to the Jackson-
Vanik amendment to Title IV of the Trade Act of 1974, the 
provisions of law governing the most-favored-nation (MFN) trade 
status, now referred to as normal trade relations 
(NTR),1 of nonmarket economy countries ineligible 
for MFN treatment as of the enactment of the Trade Act.
---------------------------------------------------------------------------
    \1\ Legislation to replace the term ``most-favored-nation'' (MFN) 
in United States statutes with the term ``normal trade relations'' 
(NTR) was enacted into law as part of the Internal Revenue Service 
Restructuring and Reform Act of 1998, P.L. 105-206.
---------------------------------------------------------------------------
    Prior to 1951, the United States extended 
nondiscriminatory, or unconditional NTR treatment to all of its 
trading partners in accordance with obligations undertaken when 
the United States joined the General Agreement on Tariffs and 
Trade (GATT) in 1948. However, the Trade Agreements Extension 
Act of 1951 directed the President to withdraw or suspend the 
NTR status of the Soviet Union and all countries under the 
domination of Communism. As implemented, this directive was 
applied to all then-existing communist countries except 
Yugoslavia. Poland's NTR status was restored by Presidential 
directive in 1960.
    Title IV of the Trade Act of 1974, which includes the so-
called ``Jackson-Vanik amendment,'' represented a 
liberalization of the 1951 law. Title IV authorizes the 
extension of normal trade relations treatment to nonmarket 
economies which both meet freedom-of-emigration requirements 
and conclude a commercial agreement with the United States. 
Title IV also authorizes the President to waive the freedom-of-
emigration requirements of that title and to extend NTR status 
to a nonmarket economy country if he determines that doing so 
will substantially promote the freedom-of-emigration 
objectives. The President's waiver authority for China under 
Title IV expires at midnight on July 2 of each year. It may be 
extended on an annual basis upon a Presidential determination 
and report to Congress that such extension will substantially 
promote the freedom-of-emigration objectives of the 1974 Trade 
Act.
    In the case of China, a bilateral commercial agreement, as 
required by the Jackson-Vanik amendment, was concluded on July 
7, 1979, entered into force February 1, 1980, and has remained 
in force since that time. The President first proclaimed NTR 
treatment for Chinese products in 1980, and that treatment has 
been renewed annually since then on the basis of Presidential 
waivers. Most recently, on June 3, 1999, the President formally 
transmitted to the Congress his recommendation to waive the 
1974 Trade Act's freedom-of-emigration requirements and to 
thereby extend China's NTR status for an additional year, 
during the period of July 3, 1999, through July 2, 2000.
    Under the Jackson-Vanik amendment, the President's waiver 
authority continues in effect unless disapproved by the 
Congress--either generally or with respect to a specific 
country--within 60 calendar days of the expiration of the 
existing authority. (Absent a change in law, the President's 
waiver for the period July 3, 2000, through July 2, 2001, is 
due on June 3, 2000.) Under Title IV amendments adopted as part 
of the Customs and Trade Act of 1990, disapproval takes the 
form of a joint resolution disapproving the extension of 
Presidential authority to waive the 1974 Trade Act's freedom-
of-emigration requirements. Under the 1990 amendments, Congress 
may consider any veto message before the later of the end of 
the 60-day period or within 15 legislative days. The 
disapproval resolution is highly privileged, thus generally 
guaranteeing a vote in the House if it is introduced.
    If both chambers of Congress do not pass a resolution of 
disapproval within 60 calendar days following the expiration of 
the existing waiver authority, China's NTR status is 
automatically renewed.
    In the years since 1980, when China conditionally regained 
its NTR status, all legislative attempts at revoking it or 
subjecting it to additional conditions have been unsuccessful. 
For example, in 1995, during the first session of the 104th 
Congress, H.J. Res. 96, a joint resolution to disapprove 
renewal of China's waiver, was tabled in the House, thereby 
precluding any further disapproval action. During the next four 
years resolutions of disapproval failed in the House. In 1996, 
H.J. Res. 182 was defeated by a vote of (141-286). In 1997, 
H.J. Res. 79 was defeated by a vote of (173-259). In 1998, H.J. 
Res. 121 was defeated by a vote of (166-264). In 1999, H.J. 
Res. 57 was defeated by a vote of (170-260).

China's negotiations to join the World Trade Organization

    China applied for accession to the General Agreement on 
Tariffs and Trade (GATT) in July 1986, and work has proceeded 
in the China Working Party since that time to negotiate the 
conditions upon which China will enter the GATT, and since 
January 1, 1995, the World Trade Organization (WTO).
    Article XII of the Agreement Establishing the WTO states 
that any State or separate customs territory may accede to the 
WTO ``on terms to be agreed between it and the WTO.'' In 
practice, any WTO applicant must negotiate terms for membership 
in the WTO in the form of a Protocol of Accession. Through the 
operation of a Working Party, the United States and other WTO 
membershave an opportunity to review the trade regimes of 
applicants to ensure that they are capable of implementing WTO 
obligations. In parallel with the Working Party's efforts, the United 
States and other interested member governments conduct separate 
negotiations with the applicant. These bilateral negotiations are aimed 
at achieving specific concessions and commitments on tariff levels, 
agricultural market access, and trade in services.
    On April 8, 1999, following the summit meeting between 
Chinese Premier Zhu Rongji and President Clinton, Ambassador 
Barshefsky announced that U.S. and Chinese negotiators secured 
``broad progress toward an expansive bilateral market access 
agreement,'' which would provide extensive market openings for 
U.S. agriculture, manufactured products, and services along 
with Chinese commitments to adopt WTO rules relating to such 
issues as technology transfer and offsets, subsidies, product 
safeguards, and State enterprises. The Administration, however, 
declined to sign the agreement at that time.

The U.S.-China WTO Agreement

    The United States-China Bilateral Trade Agreement was 
eventually finalized on November 15, 1999, in Beijing. In this 
historic agreement China committed upon accession to:
     Phase-in of full trading and distribution rights 
(including the ability to provide services auxiliary to 
distribution) for almost all products for U.S. firms throughout 
China.
     Cut average tariffs for U.S. priority agricultural 
products (e.g., beef, grapes, wine, cheese, poultry, and pork) 
from 31.5% to 14.5% by 2004. Overall industrial tariffs would 
fall from an average of 24.6% to 9.4% by 2005 (tariffs on U.S. 
``priority products,'' such as wood, paper, chemicals, and 
capital and medical equipment would fall even further). Tariffs 
on information technology products, such as computers, 
semiconductors, and telecommunications equipment, would be cut 
from an average level of 13.3% to zero by 2005.
     Establish a tariff-rate quota system for imports 
of agricultural bulk commodities (such as wheat, corn, cotton, 
barley, and rice), i.e., imports up to a specified quota level 
would be assessed a much higher tariff rate. Private trade in 
agricultural products will be permitted for the first time.
     Phase out quotas and other quantitative 
restrictions (some upon accession, many within two years, and 
most within five years). Quota levels for many products would 
expand by 15% each year until the elimination of the quota.
     Eliminate export subsidies on agricultural 
products and SPS restrictions that are not scientifically-
based.
     Provide access to service sectors (many of which 
are currently closed to foreign firms), including distribution, 
telecommunications, insurance, banking, securities, and 
professional services (including legal, accountancy, taxation, 
management consultancy, architecture, engineering, urban 
planning, medical and dental, and computer-related services). 
China would expand (over various transitional periods) the 
scope of allowed services and gradually remove geographical 
restrictions on foreign service providers. The amount of 
permitted foreign ownership in service industries would vary 
(and in some cases expand over time) from sector to sector.
     Reduce restrictions on auto trade. Tariffs on 
autos would fall from 80-100% to 25% (tariffs on auto parts 
reduced to an average rate of 10%) by 2006. Auto quotas would 
be eliminated by 2005. U.S. financial firms would be allowed to 
provide financing for the purchase of cars in China.
     Provide fair treatment for foreign firms operating 
in China by removing government rules requiring technology 
transfer, local content, and export performance conditions.
     Provide that Chinese state-owned and state-
invested firms make purchases and sales based on commercial 
considerations and give U.S. firms the opportunity to compete 
for sales on a non-discriminatory basis.
     Accept the use by the United States of certain 
antidumping provisions (over a transitory period) and to permit 
the use of certain safeguard measures to respond to possible 
surges in imports from China that might cause or threaten to 
cause market disruption to a U.S. industry (over transitory 
periods).
    U.S. firms would also benefit from China's trade agreements 
with the other WTO countries that have concluded bilateral 
agreements with China and those six WTO members that are still 
negotiating with China if they have obtained or are able to 
obtain benefits beyond what the United States was able to 
achieve. In addition, the WTO working party is expected to set 
additional requirements on China's WTO accession (such as rules 
on subsidies) that would also benefit U.S. firms.2
---------------------------------------------------------------------------
    \2\ CRS memo, U.S. Interests in China's Accession to the World 
Trade Organization: Arguments in Favor of Accession, May 2, 2000.
---------------------------------------------------------------------------
    In response to progress achieved in China's WTO commitments 
represented by the bilateral agreement with the United States, 
President Clinton announced that he would work with other WTO 
member countries to gain China's entry in the WTO as soon as 
possible, and on March 8, 2000, he transmitted to Congress a 
request for legislation to terminate the application of Title 
IV of the Trade Act of 1974 to China and to extend Normal Trade 
Relations (NTR) treatment to products from China.
    The Agreement represents a crucial step in China's WTO 
accession process. Another significant step occurred on May 19, 
2000, when the European Union also completed an agreement with 
China on terms of accession. Other steps that remain ahead 
include the conclusion of bilateral negotiations with a handful 
of other WTO members, such as Mexico, as well as the 
multilateral negotiations on China's accession protocol. China 
then must complete its domestic process for implementing the 
country's WTO commitments. Accession takes effect thirty days 
after China deposits its instruments of ratification.

                         C. Legislative History


Committee action

    H.R. 4444 was introduced on May 15, 2000, by request, by 
Representatives Archer, Crane, Matsui and Tanner and was 
referred to the Committee on Ways and Means. On May 17, 2000, 
the Committee ordered favorably reported H.R. 4444 to the House 
of Representatives, with an amendment in the nature of a 
substitute, by a recorded vote of 34-4. The substitute 
contained the provision granting the President the authority to 
proclaim permanent Normal Trade Relations to China at the time 
of its accession to the WTO, as noted above, and codifying the 
special import surge mechanism.

Legislative hearing

    On February 16, 2000, the Committee on Ways and Means held 
a hearing on the bilateral trade agreement between the United 
States and China and on the pending accessions of China and 
Taiwan to the World Trade Organization (WTO). The Committee 
held a hearing devoted in part to China's WTO accession on 
April 12, 2000. On May 3, 2000, the Ways and Means Committee 
held a hearing on China's accession to the WTO. At these 
hearings, Members of Congress, a governor, and representatives 
from business, labor, human rights and religious groups 
expressed their views regarding U.S.-China trade relations. At 
the May 3 hearing, four cabinet members appeared in favor of 
legislation to normalize trade relations with China.

                      II. EXPLANATION OF THE BILL


                            Sections 1 and 2

Present law

    Title IV of the Trade Act of 1974, as amended by the 
Customs and Trade Act of 1990 (Public Law 101-382), sets forth 
three requirements relating to freedom of emigration which must 
be met, or waived by the President, in order for a nonmarket 
economy country to be granted NTR. Title IV also requires that 
a bilateral commercial agreement that provides for 
nondiscriminatory, NTR status remain in force between the 
United States and the nonmarket economy country receiving NTR 
status. Finally, Title IV sets forth minimum provisions that 
must be included in such an agreement.
    As described above, an annual Presidential recommendation 
under section 402(d) for a 12-month extension of authority to 
waive the Jackson-Vanik freedom-of-emigration requirements--
either generally or for specific countries--may be disapproved 
through passage by Congress of a joint resolution of 
disapproval within 60 calendar days after the expiration of the 
previous waiver authority. Congress may override a Presidential 
veto within the later of the end of the 60 calendar day period 
for initial passage or 15 legislative days after the veto.
    Before China joins the WTO, section 1106 of the Omnibus 
Trade and Competitiveness Act of 1988 (P.L. 103-465) requires 
the President to make certain determinations about China's 
state trading enterprises. Specifically, the President must 
decide: (1) whether China's state trading enterprises account 
for a significant share of either China's exports or China's 
goods that are subject to competition from goods imported into 
China; and (2) whether these enterprises adversely affect U.S. 
foreign trade or the U.S. economy. If both determinations are 
affirmative, the WTO agreement cannot apply between the United 
States and China until either China enters into an agreement 
that addresses the operations of state trading enterprises, or 
legislation is enacted approving application of the WTO 
agreement to China.

Explanation of the provision

    The provision grants the President the authority to 
determine that newly designated Chapter I of Title IV of the 
Trade Act of 1974 no longer applies to China after he makes a 
determination and transmits a report to Congress certifying 
that the terms and conditions for accession of China to the WTO 
are at least equivalent to those agreed to between the United 
States and China on November 15, 1999, in the bilateral market 
access agreement.
    The Administration has stated that it believes that the 
terms of China's accession to the WTO, and in particular the 
November 1999 bilateral trade agreement, will adequately 
address China's state trading enterprises, and the Committee 
expects the President to certify this as part of the report 
required under section (1)(b).

Reasons for change

    The Committee has long supported a policy of engagement 
with China and has consistently rejected annual legislation to 
revoke normal trade relations, or nondiscriminatory trade 
treatment, which it sees as the cornerstone of that policy. 
Members believe that normalizing trade relations with China by 
graduating it from the annual review process established under 
the Jackson-Vanik amendment, a Cold War trade statute, is 
appropriate. Specifically, the Committee believes that 
increased trade, together with other tools of active 
engagement, enables the United States to influence the growth 
ofdemocratic and market-oriented policies in China in a manner 
which will improve respect for fundamental human rights and encourage 
political reform.
    The Committee continues to view with deep concern 
widespread human rights abuses carried out by the Government of 
China against Catholic priests and bishops, Protestant pastors, 
Tibetan Buddhist clergy, and pro-democracy activists. 
Nevertheless, the Committee is concerned that rejecting the 
President's recommendation to graduate China from the Jackson-
Vanik amendment may be interpreted by the Chinese as an 
antagonistic act that would undermine U.S. leverage to bring 
about change in China, while at the same time sacrificing the 
interests of U.S. exporters, workers, and consumers.
    Rejecting the President's proposal would also have a 
serious adverse effect on Hong Kong and Taiwan due to the high 
levels of trade and investment between Hong Kong and China and 
between Taiwan and China. By severely disrupting trade in the 
region, terminating NTR would harm U.S. efforts to address 
economic instability in Asia and risk prompting currency 
devaluations, similar to those that occurred in 1997 and 1998. 
Failing to grant NTR treatment at this time would forfeit the 
market access concessions made by the Chinese in the Bilateral 
Trade Agreement and those that will be included in China's 
pending accession to the World Trade Organization. If fully 
implemented, these commitments would represent substantial new 
opportunities for United States exports to, and investment in 
China. Finally, the Committee believes that revoking China's 
NTR, or failing to renew China's annual NTR status as of July 3 
of this year, would constitute a dangerously blunt sanction 
that would work against U.S. Government efforts to bring China 
into the global community of civilized nations. While the 
United States has many serious problems with China, the 
Committee believes areas of U.S.-Sino disagreement are best 
addressed through expanding U.S. contact with China and 
maintaining strong and effective mechanisms to press China to 
continue to reform.
    The Committee recognizes that Congressional approval of 
permanent normal trade relations (NTR) pursuant to H.R. 4444 is 
not necessary for China to accede to the WTO. However, in order 
for American businesses, farmers, and workers to be guaranteed 
an opportunity to benefit from the trade concessions and better 
compete in China's markets, China's name must be removed from 
Title IV of the Trade Act of 1974, the so-called Jackson-Vanik 
amendment, which provides for an annual review of China's trade 
status based on freedom of emigration.
    Otherwise, the United States would be in violation of 
Article I of the GATT, which requires the extension of 
``unconditional'' most favored nation (or NTR) status, and 
subject to trade sanctions. If the United States does not 
remove the conditions imposed by Jackson-Vanik, the United 
States would have to invoke the non-application clause of the 
GATT, meaning that China would be able to withhold benefits of 
the 1999 bilateral agreement from the United States. At the 
same time the Committee recognizes that the Bilateral Trade 
Agreement involves one-way trade concessions on the part of 
China and requires no reductions in U.S. tariffs on U.S. 
imports of Chinese products.
    The Committee agrees with Ambassador Barshefsky that the 
argument, put forward by some opponents of H.R. 4444, that the 
1979 U.S.-China Trade Agreement, combined with commitments to 
other WTO Members, would provide the United States with 
benefits similar to what will be available to the United States 
under the 1999 Bilateral Trade Agreement is ``legally 
unsustainable.'' In a letter to Ranking Member Rangel dated 
March 8, 2000, she wrote, ``While the 1979 Agreement may 
provide the basis for the United States to claim certain 
limited benefits, relying on the 1979 Agreement would deprive 
the United States of virtually all market access negotiated for 
services, critical elements necessary for meaningful market 
access for goods, key provisions negotiated to safeguard 
against injurious imports, as well as other special rules, 
commitments and vital enforcement rights. The rights conferred 
by the 1979 Agreement would leave U.S. interests across all 
sectors at a substantial competitive disadvantage with foreign 
interests that would enjoy the full benefits of China's WTO 
membership.'' Concurring with this analysis, the Committee 
strongly believes that if the United States was forced to 
invoke the WTO's non-application clause (in the event Congress 
fails to pass H.R. 4444) China would have no obligation to 
grant the United States all the same trade benefits it will 
grant to other WTO members. Finally, the Committee also notes 
that absent passage of H.R. 4444, the United States would be 
forced to address Chinese trade barriers without recourse to 
the WTO's binding dispute settlement mechanism.
    In evaluating whether the substantial market access 
concessions represented by the bilateral trade agreement met 
U.S. trade negotiating objectives, the Committee relied on a 
comprehensive hearing record, extensive consultations with the 
Administration, as well as the results of a classified report 
by the General Accounting Office (GAO) that was requested by 
Trade Subcommittee Chairman Crane on May 5, 1997.
    In a derestricted report released in May 2000, the GAO 
determined that China has agreed to ``take most of the specific 
actions originally considered necessary to achieve United 
States objectives.'' The GAO report supports the Committee's 
conclusion that the bilateral trade agreement, combined with 
substantial progress in the multilateral negotiations, will 
greatly benefit the commercial interests of United States 
firms, workers, and farmers in the new century.

                               Section 3

Present law

    Section 406 of the Trade Act of 1974 authorizes the 
President to provide temporary import relief in the form of 
increased tariffs or quotas if imports from Communist countries 
are causing market disruption. Market disruption exists when 
imports of an article, like or directly competitive with an 
article produced by a domestic industry, are increasing, either 
relatively or absolutely, so as to be a significant cause of 
material injury, or threat thereof, to such domestic industry.
    A petition for relief may be filed with the ITC by workers 
or firms in the domestic industry. The ITC must determine, 
within three months, whether imports of an article produced in 
a Communistcountry are causing market disruption. If the ITC 
finds that market disruption exists, it must also recommend to the 
President relief in the form of tariffs or quantitative restrictions to 
prevent or remedy such market disruption.
    Upon receiving the ITC report containing its findings and 
recommendations, the President has 60 days to take action. The 
President must provide import relief unless he determines that 
such relief is not in the national economic interest of the 
United States.
    Section 406(c) authorizes the President, prior to an ITC 
determination, to take temporary emergency action with respect 
to imports from a Communist country whenever he finds that 
there are reasonable grounds to believe there is market 
disruption. When taking such action, the President must also 
request the Commission to conduct an investigation under 
section 406(a). Any emergency relief ceases to apply on the day 
the Commission makes a negative finding or on the effective 
date of action by the President following an affirmative ITC 
finding.
    On November 15, 1999, Ambassador Barshefsky announced the 
successful completion of bilateral talks on China's accession 
to the World Trade Organization (WTO). Along with market access 
commitments that will provide market openings for U.S. exports 
to China, the Chinese government agreed to WTO Protocol 
language outlining a product-specific safeguard that is 
available to WTO members.

Explanation of the provision

    Section 3 created a new chapter of Title IV which 
implements the anti-surge mechanism established under the U.S.-
China Bilateral Trade Agreement. This is intended to replace 
section 406 of the Trade Act of 1974, which would no longer 
apply to China as the result of section 1 of this Act.
    The safeguard would permit the United States to provide 
relief to domestic industries and workers where products of 
Chinese origin are being imported in such increased quantities 
and under such conditions as to cause or threaten to cause 
market disruption to the domestic producers as a whole of like 
or directly competitive products. The relief is to be imposed 
only to the extent and for such period as the President 
considers necessary to prevent or remedy the market disruption. 
Procedures are modeled after Section 406, with certain 
modifications to conform to language of the bilateral trade 
agreement. U.S. industries or workers claiming injury due to 
import surges from China would file a petition with the U.S. 
International Trade Commission (ITC) or the ITC would initiate 
an investigation at the request of the President or on motion 
of the House Ways and Means Committee or the Senate Finance 
Committee. According to the U.S.-China Agreement and under the 
bill, market disruption occurs when subject imports ``are 
increasing rapidly, either absolutely or relatively, so as to 
be a significant cause of material injury or threat of material 
injury to the domestic industry.''
    In determining whether market disruption exists the 
Commission shall consider objective factors, including: (1) the 
volume of imports of the product which is subject to the 
investigation; (2) the effect of imports of such product on 
prices in the United States of like or directly competitive 
article, and (3) the effect of imports of such product on the 
domestic industry producing like or directly competitive 
articles. The presence or absence of any factor listed in 
paragraph (1), (2), and (3) is not necessarily dispositive of 
whether market disruption exists. In addition, the Committee 
intends that the Commission, in determining whether imports 
from China contribute significantly to the material injury to 
the domestic industry, shall examine factors other than such 
imports which may be a cause of the material injury.
    Within 60 days after receipt of the petition, request or 
motion (90 days, where the petitioner alleges critical 
circumstances), the ITC would make a determination as to 
whether the subject imports are causing or threatening market 
disruption.
    Twenty days after the ITC makes an affirmative 
determination with respect to market disruption, the ITC would 
issue a report to the President and to the United States Trade 
Representative (USTR) setting forth the reasons for its 
determination and recommendation(s) of actions necessary to 
prevent or remedy market disruption. Twenty days later the USTR 
would publish a notice of proposed action, seeking views and 
evidence on the appropriateness of the proposed action and 
whether it would be in the public interest. The bill also 
requires that the USTR hold a hearing on the proposed action.
    If the ITC determination is affirmative with respect to 
market disruption, the President would be required to request 
consultations with the People's Republic of China to remedy the 
market disruption. If the United States and China are unable to 
reach agreement within the sixty day consultation period 
established in the bilateral agreement and the bill, then the 
President would be required to decide what action, if any, to 
take within 25 days after the end of consultations. Any relief 
proclaimed would become effective in 15 days. If the President 
determines that an agreement with China concluded under this 
section is not preventing or remedying the market disruption at 
issue, then the President is to initiate new consultations and 
proceedings under this section. However, if China is not 
complying with the terms of the agreement entered into under 
the November 15 Bilateral Agreement, then the President shall 
promptly provide relief consistent with the terms of that 
Bilateral Agreement.
    The entire period from petition to proclamation of relief 
would be 150 days, which is identical to the duration under 
section 406 of the Trade Act.
    The bill establishes clear standards for the application of 
Presidential discretion in providing relief to injured 
industries and workers. If the ITC makes an affirmative 
determination on market disruption, there would be a 
presumption in favor of providing relief. That presumption can 
be overcome only if the President finds that providing relief 
would have an adverse impact on the United States economy 
clearly greater than the benefits of such action, or, in 
extraordinary cases, that such action would cause serious harm 
to the national security of the United States.
    The provision also sets forth authority to the President to 
modify, reduce or terminate relief, as well as monitoring of 
relief by the Commission and an opportunity for the President 
to request a reportfrom the Commission on the probable effects 
of such modification, termination, or reduction. Finally, the provision 
allows for extension of relief under certain circumstances.
    The bill would also authorize the President to provide a 
provisional safeguard in cases where ``delay would cause damage 
which it would be difficult to repair,'' as permitted under the 
U.S.-China Agreement. If such circumstances are alleged, the 
ITC would be required to make a determination on critical 
circumstances and a preliminary determination on market 
disruption within 45 days of receipt of the petition, request, 
or motion. If those determinations are affirmative, President 
would be required to determine whether to provide such 
provisional relief within 20 days.
    Finally, the bill would implement a provision in the U.S.-
China Agreement concerning trade diversion. That provision 
addresses circumstances in which a safeguard applied by a third 
country with respect to Chinese goods ``causes or threatens to 
cause significant diversions of trade'' into the United States. 
If, on the basis of the monitoring results provided by the 
Customs Service and other reasonably available relevant 
evidence, the ITC determines that an action by another WTO 
Member threatens or causes significant trade diversion, the 
USTR would request consultations with China and/or the Member 
imposing the safeguard. If, as provided in the Agreement, 
consultations fail to lead to an agreement to address the trade 
diversion within 60 days, the President shall determine, within 
40 days after consultations end, what action, if any, to take 
to prevent or remedy the trade diversion. The total time from 
petition to relief under the trade diversion provision would be 
150 days.
    Section 442(d)(2) as added by this Act would require the 
Commission to examine changes in imports into the United States 
from the People's Republic of China since the time that the WTO 
Member commenced the investigation that led to a request for 
consultations. The Committee recognizes that there may be 
instances in which a WTO Member may not announce an 
investigation prior to requesting consultations with China. In 
such instances, the Commission should examine data from the 
time of the WTO Member's notification to the WTO of a request 
for consultations with China.
    The product-specific safeguard is available for 12 years 
after China's accession to the WTO.

Reasons for change

    The Committee intends administration of the product 
specific safeguard to be consistent with the U.S.-China 
Bilateral Trade Agreement and with U.S. obligations under the 
WTO. This is a temporary, extraordinary trade remedy 
specifically designed to address concerns about potential 
increased import competition from China in the future.

Effective date

    The extension of non-discriminatory treatment to the 
products of China shall be effective no earlier than the 
effective date of the accession of this country to the World 
Trade Organization.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statements are made 
concerning the votes of the Committee on Ways and Means in its 
consideration of the bill, H.R. 4444.

                       MOTION TO REPORT THE BILL

    The bill, H.R. 4444, as amended, was ordered favorably 
reported by a rollcall vote of 34 yeas to 4 nays (with a quorum 
being present). The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present    Representatives      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Archer.....................        X   ........  .........  Mr. Rangel.......        X   ........  .........
Mr. Crane......................        X   ........  .........  Mr. Stark........  ........        X   .........
Mr. Thomas.....................        X   ........  .........  Mr. Matsui.......        X   ........  .........
Mr. Shaw.......................        X   ........  .........  Mr. Coyne........  ........        X   .........
Mrs. Johnson...................        X   ........  .........  Mr. Levin........        X   ........  .........
Mr. Houghton...................        X   ........  .........  Mr. Cardin.......        X   ........  .........
Mr. Herger.....................        X   ........  .........  Mr. McDermott....        X   ........  .........
Mr. McCrery....................        X   ........  .........  Mr. Kleczka......  ........        X   .........
Mr. Camp.......................        X   ........  .........  Mr. Lewis (GA)...  ........        X   .........
Mr. Ramstad....................        X   ........  .........  Mr. Neal.........        X   ........  .........
Mr. Nussle.....................        X   ........  .........  Mr. McNulty......  ........  ........  .........
Mr. Johnson....................        X   ........  .........  Mr. Jefferson....        X   ........  .........
Ms. Dunn.......................        X   ........  .........  Mr. Tanner.......        X   ........  .........
Mr. Collins....................        X   ........  .........  Mr. Becerra......        X   ........  .........
Mr. Portman....................        X   ........  .........  Mrs. Thurman.....        X   ........  .........
Mr. English....................        X   ........  .........  Mr. Doggett......        X   ........  .........
Mr. Watkins....................        X   ........  .........
Mr. Hayworth...................        X   ........  .........
Mr. Weller.....................        X   ........  .........
Mr. Hulshof....................        X   ........  .........
Mr. McInnis....................        X   ........  .........
Mr. Lewis (KY).................        X   ........  .........
Mr. Foley......................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

                          votes on amendments

    Rollcall votes were conducted on the following amendments 
to the Chairman's amendment in the nature of a substitute.
    An amendment by Mr. Stark, providing that the extension of 
nondiscriminatory treatment pursuant to section 1(a)(1) would 
not become effective unless Taiwan accedes to the World Trade 
Organization on the same day as, or before, the effective date 
of the accession of the People's Republic of China to the World 
Trade Organization, was defeated by a rollcall vote of 10 yeas 
to 28 nays. The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present    Representatives      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Archer.....................  ........        X   .........  Mr. Rangel.......  ........        X   .........
Mr. Crane......................  ........        X   .........  Mr. Stark........        X   ........  .........
Mr. Thomas.....................  ........        X   .........  Mr. Matsui.......  ........        X   .........
Mr. Shaw.......................  ........        X   .........  Mr. Coyne........        X   ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Levin........  ........        X   .........
Mr. Houghton...................  ........        X   .........  Mr. Cardin.......        X   ........  .........
Mr. Herger.....................  ........  ........  .........  Mr. McDermott....  ........        X   .........
Mr. McCrery....................  ........        X   .........  Mr. Kleczka......        X   ........  .........
Mr. Camp.......................  ........        X   .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Ramstad....................  ........        X   .........  Mr. Neal.........  ........        X   .........
Mr. Nussle.....................  ........        X   .........  Mr. McNulty......        X   ........  .........
Mr. Johnson....................  ........        X   .........  Mr. Jefferson....        X   ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Tanner.......  ........        X   .........
Mr. Collins....................  ........        X   .........  Mr. Becerra......        X   ........  .........
Mr. Portman....................  ........        X   .........  Mrs. Thurman.....        X   ........  .........
Mr. English....................  ........        X   .........  Mr. Doggett......        X   ........  .........
Mr. Watkins....................  ........        X   .........
Mr. Hayworth...................  ........        X   .........
Mr. Weller.....................  ........        X   .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Stark, providing that the extension of 
nondiscriminatory treatment would not become effective until 
the United States and the People's Republic of China have 
signed an agreement providing for the exemption of a 
Presidential order banning the importation of munitions, 
principally guns and ammunition from China, was defeated by a 
rollcall vote of 6 yeas to 16 nays.
    The vote was as follows:

----------------------------------------------------------------------------------------------------------------
        Representatives             Yea       Nay     Present    Representatives      Yea       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Archer.....................  ........        X   .........  Mr. Rangel.......  ........        X   .........
Mr. Crane......................  ........  ........  .........  Mr. Stark........        X   ........  .........
Mr. Thomas.....................  ........        X   .........  Mr. Matsui.......  ........        X   .........
Mr. Shaw.......................  ........        X   .........  Mr. Coyne........  ........  ........  .........
Mrs. Johnson...................  ........        X   .........  Mr. Levin........  ........        X   .........
Mr. Houghton...................  ........  ........  .........  Mr. Cardin.......        X   ........  .........
Mr. Herger.....................  ........        X   .........  Mr. McDermott....        X   ........  .........
Mr. McCrery....................  ........  ........  .........  Mr. Kleczka......        X   ........  .........
Mr. Camp.......................  ........  ........  .........  Mr. Lewis (GA)...        X   ........  .........
Mr. Ramstad....................  ........  ........  .........  Mr. Neal.........  ........  ........  .........
Mr. Nussle.....................  ........  ........  .........  Mr. McNulty......  ........  ........  .........
Mr. Johnson....................  ........        X   .........  Mr. Jefferson....        X   ........  .........
Ms. Dunn.......................  ........        X   .........  Mr. Tanner.......  ........  ........  .........
Mr. Collins....................  ........  ........  .........  Mr. Becerra......  ........  ........  .........
Mr. Portman....................  ........  ........  .........  Mrs. Thurman.....  ........  ........  .........
Mr. English....................  ........        X   .........  Mr. Doggett......  ........  ........  .........
Mr. Watkins....................  ........  ........  .........
Mr. Hayworth...................  ........        X   .........
Mr. Weller.....................  ........  ........  .........
Mr. Hulshof....................  ........        X   .........
Mr. McInnis....................  ........        X   .........
Mr. Lewis (KY).................  ........        X   .........
Mr. Foley......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

                           IV. BUDGET EFFECTS


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d)(2) of rule XIII of the Rules 
of the House of Representatives, the following statement is 
made concerning the effects on the budget of this resolution, 
H.R. 4444 as reported: The Committee agrees with the estimate 
prepared by CBO which is included below.

    B. Statement Regarding New Budget Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that 
enactment of H.R. 4444 would affect revenues, but CBO has no 
basis for estimating the magnitude of this effect.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the Congressional Budget Office, the following 
report prepared by CBO is provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 22, 2000.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4444, a bill to 
authorize the extension of nondiscriminatory treatment (normal 
trade relations treatment) to the People's Republic of China.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Hester 
Grippando (for revenues), and Sunita D'Monte (for spending 
subject to appropriation).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 4444--A bill to authorize the extension of nondiscriminatory 
        treatment (normal trade relations treatment) to the People's 
        Republic of China

    Summary: H.R. 4444 would allow the President to grant 
permanent Normal Trade Relations (PNTR) status to the People's 
Republic of China (China). H.R. 4444 would become effective no 
earlier than the date of the accession of the People's Republic 
of China to the World Trade Organization (WTO). CBO concludes 
that enactment of the bill would likely increase revenues, but 
CBO has no basis for estimating the revenue impact of granting 
the President such authority. CBO estimates that implementing 
H.R. 4444 would cost $1 million a year, subject to the 
availability of appropriate funds. Since enacting H.R. 4444 
would affect revenues, pay-as-you-go procedures would apply.
    H.R. 4444 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA) and would not affect 
the budgets of state, local, or tribal governments. By 
broadening the conditions under which the U.S. government could 
impose trade restrictions on Chinese goods, the bill could 
impose a private-sector mandate on importers of Chinese goods 
if those conditions are met. However, CBO has no basis for 
estimating the cost of this mandate.

Estimated cost to the Federal Government

            Revenues
    H.R. 4444 would remove China from the list of countries 
under Title IV of the Trade Act of 1974 (the Jackson-Vanik 
amendment). The Jackson-Vanik amendment sets forth freedom-of-
emigration criteria which must be met or waived by the 
President and a bilateral trade agreement must be in place in 
order for a non-market economy to be granted normal trade 
relations (NTR) status. A waiver of the Jackson-Vanik amendment 
by the Presidentis subject to disapproval by the United States 
Congress. Removing China from the Jackson-Vanik amendment would allow 
the President to grant PNTR to China.
    CBO estimates that in itself, granting PNTR treatment to 
China would have no impact on receipts relative to its revenue 
baseline. The People's Republic of China has received NTR, 
renewed annually on the basis of a Presidential waiver of the 
Jackson-Vanik amendment, since February 1, 1980. CBO's revenue 
baseline assumes that the People's Republic of China will 
continue to receive NTR status.
    Granting China PNTR status could have an effect on receipts 
by allowing the United States to trade with China under the 
WTO, if and when China should enter the WTO. On November 15, 
1999, the President negotiated a bilateral trade agreement with 
China intended to govern the conditions under which the United 
States and China would trade once China enters the WTO. H.R. 
4444 would require that the President certify that the final 
terms of China's accession into the WTO are equivalent to that 
agreement. Without legislation enabling the President to grant 
PNTR to China, the United States would not be able to trade 
with China under the WTO.
    Imports of textile and apparel products from China are 
currently subject to quotas. If the United States were to trade 
with China under the WTO, these quotas would be liberalized. 
Imports of textile and apparel products from China would likely 
increase. CBO expects that increased imports from China would 
be partly offset by decreased imports from other countries. The 
increase in imports could also be offset by a provision in H.R. 
4444 that would allow the President to place increased duties 
or other restrictions on Chinese imports if it is determined 
that such imports cause or threaten to cause market disruption 
to domestic producers. The result of these changes would be an 
increase in collections of tariff revenues. However, because of 
the complexity of the world market, undetermined issues facing 
if, how, and when China would join the WTO, and administrative 
mechanisms that could potentially be employed to alter the 
China's quota under the WTO, CBO has no basis to determine what 
the magnitude of such an effect would be.
            Spending subject to appropriation
    H.R. 4444 would require the International Trade Commission 
(ITC) to investigate and report on petitions filed with it 
alleging that China has engaged in either market disruption or 
trade diversion. Based on information from ITC, CBO estimates 
that this bill would increase spending subject to appropriation 
by $1 million a year.
    Estimated impact on state, local, and tribal governments: 
H.R. 4444 contains no intergovernmental mandates as defined in 
UMRA and would not affect the budgets of state, local, or 
tribal governments.
    Estimated impact on the private sector: The bill would 
broaden the conditions under which the U.S. government could 
impose trade restrictions on imports of Chinese goods that are 
found to seriously harm or threaten domestic production of 
competing or similar goods. Certain trade restrictions that 
could result from this bill--such as increased duties, or quota 
limits more restrictive than under current law--would impose 
mandates on importers of affected items. Those restrictions 
would impose costs on the private sector, but CBO cannot 
predict whether such market conditions would be found or, if 
found, the incidence of trade restrictions resulting from the 
new conditions defined in this bill. Thus, CBO has no basis for 
estimating the direct costs of the mandate.
    Estimate prepared by: Federal revenues: Hester Grippando; 
Federal spending: Sunita D'Monte; and impact on the private 
sector: Patrice Gordon.
    Estimated approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis. G. Thomas Woodward, Assistant 
Director for Tax Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives (relating to oversight findings), 
the Committee, based on public hearing testimony and 
information from the Administration, concluded that it is 
appropriate and timely to enact the provisions included in the 
bill as reported.

    B. Summary of Findings and Recommendations of the Committee on 
                    Government Reform and Oversight

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, no oversight findings or 
recommendations have been submitted to the Committee by the 
Committee on Government Reform and Oversight with respect to 
the subject matter contained in H.R. 4444.

                 C. Constitutional Authority Statement

    With respect to clause 3(d)(1) of rule XIII of the Rules of 
the House of Representatives, relating to Constitutional 
Authority, the Committee states that the Committee's action in 
reporting the bill is derived from Article 1 of the 
Constitution, Section 8 (``The Congress shall have power to lay 
and collect taxes, duties, imposts and excises, to pay the 
debts and to provide for * * * the general Welfare of the 
United States.'')

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

TRADE ACT OF 1974

           *       *       *       *       *       *       *



                            TABLE OF CONTENTS

                TITLE I--NEGOTIATING AND OTHER AUTHORITY

     * * * * * * *

   TITLE IV--TRADE RELATIONS WITH COUNTRIES NOT [CURRENTLY] RECEIVING 
                       NONDISCRIMINATORY TREATMENT

            Chapter 1--Trade Relations With Certain Countries

Sec. 401.  Exception of the products of certain countries or areas.
     * * * * * * *

Chapter 2--Relief From Market Disruption to Industries and Diversion of 
                    Trade to the United States Market

Sec. 421. Action to address market disruption.
Sec. 422. Action in response to trade diversion.
Sec. 423. Regulations; termination of provision.

           *       *       *       *       *       *       *


TITLE I--NEGOTIATING AND OTHER AUTHORITY

           *       *       *       *       *       *       *


CHAPTER 2--OTHER AUTHORITY

           *       *       *       *       *       *       *


SEC. 123. COMPENSATION AUTHORITY.

  (a) Whenever--
          (1) any action taken under chapter 1 of title II or 
        chapter 1 of title III, or under chapter 2 of title IV 
        of the Trade Act of 1974; or

           *       *       *       *       *       *       *


  TITLE IV--TRADE RELATIONS WITH COUNTRIES NOT [CURRENTLY] RECEIVING 
                      NONDISCRIMINATORY TREATMENT

           CHAPTER 1--TRADE RELATIONS WITH CERTAIN COUNTRIES

SEC. 401. EXCEPTION OF THE PRODUCTS OF CERTAIN COUNTRIES OR AREAS.

  Except as otherwise provided in this title, the President 
shall continue to deny nondiscriminatory treatment to the 
products of any country, the products of which were not 
eligible for the rates set forth in rate column numbered 1 of 
the Tariff Schedules of the United States on the date of the 
enactment of this Act.

           *       *       *       *       *       *       *


CHAPTER 2--RELIEF FROM MARKET DISRUPTION TO INDUSTRIES AND DIVERSION OF 
                   TRADE TO THE UNITED STATES MARKET

SEC. 421. ACTION TO ADDRESS MARKET DISRUPTION.

  (a) Presidential Action.--If a product of the People's 
Republic of China is being imported into the United States in 
such increased quantities or under such conditions as to cause 
or threaten to cause market disruption to the domestic 
producers of a like or directly competitive product, the 
President shall, in accordance with the provisions of this 
section, proclaim increased duties or other import restrictions 
with respect to such product, to the extent and for such period 
as the President considers necessary to prevent or remedy the 
market disruption.
  (b) Initiation of an Investigation.--(1) Upon the filing of a 
petition by an entity described in section 202(a) of the Trade 
Act of 1974 (19 U.S.C. 2252(a)), upon the request of the 
President or the United States Trade Representative (in this 
subtitle referred to as the ``Trade Representative''), upon 
resolution of either the Committee on Ways and Means of the 
House of Representatives, or the Committee on Finance of the 
Senate (in this subtitle referred to as the ``Committees'') or 
on its own motion, the United States International Trade 
Commission (in this subtitle referred to as the ``Commission'') 
shall promptly make an investigation to determine whether 
products of the People's Republic of China are being imported 
into the United States in such increased quantities or under 
such conditions as to cause or threaten to cause market 
disruption to the domestic producers of like or directly 
competitive products.
  (2) The limitations on investigations set forth in section 
202(h)(1) of the Trade Act of 1974 (19 U.S.C. 2252(h)(1)) shall 
apply to investigations conducted under this section.
  (3) The provisions of subsections (a)(8) and (i) of section 
202 of the Trade Act of 1974 (19 U.S.C. 2252(a)(8) and (i)), 
relating totreatment of confidential business information, 
shall apply to investigations conducted under this section.
  (4) Whenever a petition is filed, or a request or resolution 
is received, under this subsection, the Commission shall 
transmit a copy thereof to the President, the Trade 
Representative, the Committee on Ways and Means of the House of 
Representatives, and the Committee of Finance of the Senate, 
except that in the case of confidential business information, 
the copy may include only nonconfidential summaries of such 
information.
  (5) The Commission shall publish notice of the commencement 
of any proceeding under this subsection in the Federal Register 
and shall, within a reasonable time thereafter, hold public 
hearings at which the Commission shall afford interested 
parties an opportunity to be present, to present evidence, to 
respond to the presentations of other parties, and otherwise to 
be heard.
  (c) Market Disruption.--(1) For purposes of this section, 
market disruption exists whenever imports of an article like or 
directly competitive with an article produced by a domestic 
industry are increasing rapidly, either absolutely or 
relatively, so as to be a significant cause of material injury, 
or threat of material injury, to the domestic industry.
  (2) For purposes of paragraph (1), the term ``significant 
cause'' refers to a cause which contributes significantly to 
the material injury of the domestic industry, but need not be 
equal to or greater than any other cause.
  (d) Factors in Determination.--In determining whether market 
disruption exists, the Commission shall consider objective 
factors, including--
          (1) the volume of imports of the product which is the 
        subject of the investigation;
          (2) the effect of imports of such product on prices 
        in the United States for like or directly competitive 
        articles; and
          (3) the effect of imports of such product on the 
        domestic industry producing like or directly 
        competitive articles.
The presence or absence of any factor under paragraph (1), (2), 
or (3) is not necessarily dispositive of whether market 
disruption exists.
  (e) Time for Commission Determinations.--The Commission shall 
make and transmit to the President and the Trade Representative 
its determination under subsection (b)(1) at the earliest 
practicable time, but in no case later than 60 days (or 90 days 
in the case of a petition requesting relief under subsection 
(i)) after the date on which the petition is filed, the request 
or resolution is received, or the motion is adopted, under 
subsection (b). If the Commissioners voting are equally divided 
with respect to its determination, then the determination 
agreed upon by either group of Commissioners may be considered 
by the President and the Trade Representative as the 
determination of the Commission.
  (f) Recommendations of Commission on Proposed Remedies.--If 
the Commission makes an affirmative determination under 
subsection (b), or a determination which the President or the 
Trade Representative may consider as affirmative under 
subsection (e), the Commission shall propose the amount of 
increase in, or imposition of, any duty or other import 
restrictions necessary to prevent or remedy the market 
disruption. Only those members of the Commission who agreed to 
the affirmative determination under subsection (b) are eligible 
to vote on the proposed action to prevent or remedy market 
disruption. Members of the Commission who did not agree to the 
affirmative determination may submit, in the report required 
under subsection (g), separate views regarding what action, if 
any, should be taken to prevent or remedy market disruption.
  (g) Report by Commission.--(1) Not later than 20 days after a 
determination under subsection (b) is made, the Commission 
shall submit a report to the President and the Trade 
Representative.
  (2) The Commission shall include in the report required under 
paragraph (1) the following:
          (A) The determination made under subsection (b) and 
        an explanation of the basis for the determination.
          (B) If the determination under subsection (b) is 
        affirmative, or may be considered by the President or 
        the Trade Representative as affirmative under 
        subsection (e), the recommendations of the Commission 
        on proposed remedies under subsection (f) and an 
        explanation of the basis for each recommendation.
          (C) Any dissenting or separate views by members of 
        the Commission regarding the determination and any 
        recommendation referred to in subparagraphs (A) and 
        (B).
          (D) A description of--
                  (i) the short- and long-term effects that 
                implementation of the action recommended under 
                subsection (f) is likely to have on the 
                petitioning domestic industry, on other 
                domestic industries, and on consumers; and
                  (ii) the short- and long-term effects of not 
                taking the recommended action on the 
                petitioning domestic industry, its workers, and 
                the communities where production facilities of 
                such industry are located, and on other 
                domestic industries.
  (3) The Commission, after submitting a report to the 
President under paragraph (1), shall promptly make it available 
to the public (but shall not include confidential business 
information) and cause a summary thereof to be published in the 
Federal Register.
  (h) Opportunity To Present Views and Evidence on Proposed 
Measure and Recommendation to the President.--(1) Within 20 
days after receipt of the Commission's report under subsection 
(g) (or 15 days in the case of an affirmative preliminary 
determination under subsection (i)(1)(B)), the Trade 
Representative shall publish in the Federal Register notice of 
any measure proposed by the Trade Representative to be taken 
pursuant to subsection (a) and of the opportunity, including a 
public hearing, if requested, for importers, exporters, and 
other interested parties to submit their views and evidence on 
the appropriateness of the proposed measure and whether it 
would be in the public interest.
  (2) Within 55 days after receipt of the report under 
subsection (g) (or 35 days in the case of an affirmative 
preliminary determination under subsection (i)(1)(B)), the 
Trade Representative, taking into account the views and 
evidence received under paragraph (1) on the measure proposed 
by the Trade Representative, shall make a recommendation to the 
President concerning what action, if any, to take to prevent or 
remedy the market disruption.
  (i) Critical Circumstances.--(1) When a petition filed under 
subsection (b) alleges that critical circumstances exist and 
requests that provisional relief be provided under this 
subsection with respect to the product identified in the 
petition, the Commission shall, not later than 45 days after 
the petition containing the request is filed--
          (A) determine whether delay in taking action under 
        this section would cause damage to the relevant 
        domestic industry which would be difficult to repair; 
        and
          (B) if the determination under subparagraph (A) is 
        affirmative, make a preliminary determination of 
        whether imports of the product which is the subject of 
        the investigation have caused or threatened to cause 
        market disruption.
If the Commissioners voting are equally divided with respect to 
either of its determinations, then the determination agreed 
upon by either group of Commissioners may be considered by the 
President and the Trade Representative as the determination of 
the Commission.
  (2) On the date on which the Commission completes its 
determinations under paragraph (1), the Commission shall 
transmit a report on the determinations to the President and 
the Trade Representative, including the reasons for its 
determinations. If the determinations under paragraph (1) are 
affirmative, or may be considered by the President or the Trade 
Representative as affirmative under paragraph (1), the 
Commission shall include in its report its recommendations on 
proposed provisional measures to be taken to prevent or remedy 
the market disruption. Only those members of the Commission who 
agreed to the affirmative determinations under paragraph (1) 
are eligible to vote on the proposed provisional measures to 
prevent or remedy market disruption. Members of the Commission 
who did not agree to the affirmative determinations may submit, 
in the report, dissenting or separate views regarding the 
determination and any recommendation of provisional measures 
referred to in this paragraph.
  (3) If the determinations under paragraph (1) are 
affirmative, or may be considered by the President or the Trade 
Representative as affirmative under paragraph (1), the Trade 
Representative shall, within 10 days after receipt of the 
Commission's report, determine the amount or extent of 
provisional relief that is necessary to prevent or remedy the 
market disruption and shall provide a recommendation to the 
President on what provisional measures, if any, to take.
  (4)(A) The President shall determine whether to provide 
provisional relief and proclaim such relief, if any, within 10 
days after receipt of the recommendation from the Trade 
Representative.
  (B) Such relief may take the form of--
          (i) the imposition of or increase in any duty;
          (ii) any modification, or imposition of any 
        quantitative restriction on the importation of an 
        article into the United States; or
          (iii) any combination of actions under clauses (i) 
        and (ii).
  (C) Any provisional action proclaimed by the President 
pursuant to a determination of critical circumstances shall 
remain in effect not more than 200 days.
  (D) Provisional relief shall cease to apply upon the 
effective date of relief proclaimed under subsection (a), upon 
a decision by the President not to provide such relief, or upon 
a negative determination by the Commission under subsection 
(b).
  (j) Agreements With the People's Republic of China.--(1) The 
Trade Representative is authorized to enter into agreements for 
the People's Republic of China to take such action as necessary 
to prevent or remedy market disruption, and should seek to 
conclude such agreements before the expiration of the 60-day 
consultation period provided for under the product-specific 
safeguard provision of the Protocol of Accession of the 
People's Republic of China to the WTO, which shall commence not 
1later than 5 days after the Trade Representative receives an 
affirmative determination provided for in subsection (e) or a 
determination which the Trade Representative considers to be an 
affirmative determination pursuant to subsection (e).
  (2) If no agreement is reached with the People's Republic of 
China pursuant to consultations under paragraph (1), or if the 
President determines than an agreement reached pursuant to such 
consultations is not preventing or remedying the market 
disruption at issue, the President shall provide import relief 
in accordance with subsection (a).
  (k) Standard for Presidential Action.--(1) Within 15 days 
after receipt of a recommendation from the Trade Representative 
under subsection (h) on the appropriate action, if any, to take 
to prevent or remedy the market disruption, the President shall 
provide import relief for such industry pursuant to subsection 
(a), unless the President determines that provision of such 
relief is not in the national economic interest of the United 
States or, in extraordinary cases, that the taking of action 
pursuant to subsection (a) would cause serious harm to the 
national security of the United States.
  (2) The President may determine under paragraph (1) that 
providing import relief is not in the national economic 
interest of the United States only if the President finds that 
the taking of such action would have an adverse impact on the 
United States economy clearly greater than the benefits of such 
action.
  (l) Publication of Decision and Reports.--(1) The President's 
decision, including the reasons therefor and the scope and 
duration of any action taken, shall be published in the Federal 
Register.
  (2) The Commission shall promptly make public any report 
transmitted under this section, but shall not make public any 
information which the Commission determines to be confidential, 
and shall publish notice of such report in the Federal 
Register.
  (m) Effective Date of Relief.--Import relief under this 
section shall take effect not later than 15 days after the 
President's determination to provide such relief.
  (n) Modifications of Relief.--(1) At any time after the end 
of the 6-month period beginning on the date on which relief 
under subsection (m) first takes effect, the President may 
request that the Commission provide a report on the probable 
effect of the modification, reduction, or termination of the 
relief provided on the relevant industry. The Commission shall 
transmit such report to the President within 60 days of the 
request.
  (2) The President may, after receiving a report from the 
Commission under paragraph (1), take such action to modify, 
reduce, or terminate relief that the President determines is 
necessary to continue to prevent or remedy the market 
disruption at issue.
  (3) Upon the granting of relief under subsection (k), the 
Commission shall collect such data as is necessary to allow it 
to respond rapidly to a request by the President under 
paragraph (1).
  (o) Extension of Action.--(1) Upon request of the President, 
or upon petition on behalf of the industry concerned filed with 
the Commission not earlier than the date which is 9 months, and 
not later than the date which is 6 months, before the date any 
relief provided under subsection (k) is to terminate, the 
Commission shall investigate to determine whether action under 
this section continues to be necessary to prevent or remedy 
market disruption.
  (2) The Commission shall publish notice of the commencement 
of any proceeding under this subsection in the Federal Register 
and shall, within a reasonable time thereafter, hold a public 
hearing at which the Commission shall afford interested parties 
and consumers an opportunity to be present, to present 
evidence, and to respond to the presentations of other parties 
and consumers, and otherwise to be heard.
  (3) The Commission shall transmit to the President a report 
on its investigation and determination under this subsection 
not later than 60 days before the action under subsection (m) 
is to terminate.
  (4) The President, after receiving an affirmative 
determination from the Commission under paragraph (3), may 
extend the effective period of any action under this section if 
the President determines that the action continues to be 
necessary to prevent or remedy the market disruption.

SEC. 422. ACTION IN RESPONSE TO TRADE DIVERSION.

  (a) Monitoring by Customs Service.--In any case in which a 
WTO member other than the United States requests consultations 
with the People's Republic of China under the product-specific 
safeguard provision of the Protocol of Accession of the 
People's Republic of China to the World Trade Organization, the 
Trade Representative shall inform the United States Customs 
Service, which shall monitor imports into the United States of 
those products of Chinese origin that are the subject of the 
consultation request. Data from such monitoring shall promptly 
be made available to the Commission upon request by the 
Commission.
  (b) Initiation of Investigation.--(1) Upon the filing of a 
petition by an entity described in section 202(a) of the Trade 
Act of 1974, upon the request of the President or the Trade 
Representative, upon resolution of either of the Committees, or 
on its own motion, the Commission shall promptly make an 
investigation to determine whether an action described in 
subsection (c) has caused, or threatens to cause, a significant 
diversion of trade into the domestic market of the United 
States.
  (2) The Commission shall publish notice of the commencement 
of any proceeding under this subsection in the Federal Register 
and shall, within a reasonable time thereafter, hold public 
hearings at which the Commission shall afford interested 
parties an opportunity to be present, to present evidence, to 
respond to the presentations of other parties, and otherwise to 
be heard.
  (3) The provisions of subsections (a)(8) and (i) of section 
202 of the Trade Act of 1974 (19 U.S.C. 2252(a)(8) and (i)), 
relating to treatment of confidential business information, 
shall apply to investigations conducted under this section.
  (c) Actions Described.--An action is described in this 
subsection if it is an action--
          (1) by the People's Republic of China to prevent or 
        remedy market disruption in a WTO member other than the 
        United States;
          (2) by a WTO member other than the United States to 
        withdraw concessions under the WTO Agreement or 
        otherwise to limit imports to prevent or remedy market 
        disruption;
          (3) by a WTO member other than the United States to 
        apply a provisional safeguard within the meaning of the 
        product-specific safeguard provision of the Protocol of 
        Accession of the People's Republic of China to the WTO; 
        or
          (4) any combination of actions described in 
        paragraphs (1) through (3).
  (d) Basis for Determination of Significant Diversion.--(1) In 
determining whether significant diversion or the threat thereof 
exists for purposes of this section, the Commission shall take 
into account, to the extent such evidence is reasonably 
available--
          (A) the monitoring conducted under subsection (a);
          (B) the actual or imminent increase in United States 
        market share held by such imports from the People's 
        Republic of China;
          (C) the actual or imminent increase in volume of such 
        imports into the United States;
          (D) the nature and extent of the action taken or 
        proposed by the WTO member concerned;
          (E) the extent of exports from the People's Republic 
        of China to that WTO member and to the United States;
          (F) the actual or imminent changes in exports to that 
        WTO member due to the action taken or proposed;
          (G) the actual or imminent diversion of exports from 
        the People's Republic of China to countries other than 
        the United States;
          (H) cyclical or seasonal trends in import volumes 
        into the United States of the products at issue; and
          (I) conditions of demand and supply in the United 
        States market for the products at issue.
The presence or absence of any factor under any of 
subparagraphs (A) through (I) is not necessarily dispositive of 
whether a significant diversion of trade or the threat thereof 
exists.
  (2) For purposes of making its determination, the Commission 
shall examine changes in imports into the United States from 
the People's Republic of China since the time that the WTO 
member commenced the investigation that led to a request for 
consultations described in subsection (a).
  (3) If more than 1 action by a WTO member or WTO members 
against a particular product is identified in the petition, 
request, or resolution under subsection (b) or during the 
investigation, the Commission may cumulatively assess the 
actual or likely effects of suchactions jointly in determining 
whether a significant diversion of trade or threat thereof exists.
  (e) Commission Determination; Agreement Authority.--(1) The 
Commission shall make and transmit to the President and the 
Trade Representative its determination under subsection (b) at 
the earliest practicable time, but in no case later than 45 
days after the date on which the petition is filed, the request 
or resolution is received, or the motion is adopted, under 
subsection (b). If the Commissioners voting are equally divided 
with respect to its determination, then the determination 
agreed upon by either group of Commissioners may be considered 
by the President and the Trade Representative as the 
determination of the Commission.
  (2) The Trade Representative is authorized to enter into 
agreements with the People's Republic of China or the other WTO 
members concerned to take such action as necessary to prevent 
or remedy significant trade diversion or threat thereof into 
the domestic market of the United States, and should seek to 
conclude such agreements before the expiration of the 60-day 
consultation period provided for under the product-specific 
safeguard provision of the Protocol of Accession of the 
People's Republic of China to the WTO, which shall commence not 
later than 5 days after the Trade Representative receives an 
affirmative determination provided for in paragraph (1) or a 
determination which the Trade Representative considers to be an 
affirmative determination pursuant to paragraph (1).
  (3) Report by Commission.--
          (A) Not later than 10 days after a determination 
        under subsection (b), is made, the Commission shall 
        transmit a report to the President and the Trade 
        Representative.
          (B) The Commission shall include in the report 
        required under subparagraph (A) the following:
                  (i) The determination made under subsection 
                (b) and an explanation of the basis for the 
                determination.
                  (ii) If the determination under subsection 
                (b) is affirmative, or may be considered by the 
                President or the Trade Representative as 
                affirmative under subsection (e)(1), the 
                recommendations of the Commission on increased 
                tariffs or other import restrictions to be 
                imposed to prevent or remedy the trade 
                diversion or threat thereof, and explanations 
                of the bases for such recommendations. Only 
                those members of the Commission who agreed to 
                the affirmative determination under subsection 
                (b) are eligible to vote on the proposed action 
                to prevent or remedy the trade diversion or 
                threat thereof.
                  (iii) Any dissenting or separate views by 
                members of the Commission regarding the 
                determination and any recommendation referred 
                to in clauses (i) and (ii).
                  (iv) A description of--
                          (I) the short- and long-term effects 
                        that implementation of the action 
                        recommended under clause (ii) is likely 
                        to have on the petitioning domestic 
                        industry, on other domestic industries, 
                        and on consumers; and
                          (II) the short- and long-term effects 
                        of not taking the recommended action on 
                        the petitioning domestic industry, its 
                        workers and the communities where 
                        production facilities of such industry 
                        are located, and on other domestic 
                        industries.
          (C) The Commission, after submitting a report to the 
        President under subparagraph (A), shall promptly make 
        it available to the public (with the exception of 
        confidential business information) and cause a summary 
        thereof to be published in the Federal Register.
  (f) Public Comment.--If consultations fail to lead to an 
agreement with the People's Republic of China or the WTO member 
concerned within 60 days, the Trade Representative shall 
promptly publish notice in the Federal Register of any proposed 
action to prevent or remedy the trade diversion, and provide an 
opportunity for interested persons to present views and 
evidence on whether the proposed action is in the public 
interest.
  (g) Recommendation to the President.--Within 20 days after 
the end of consultations pursuant to subsection (e), the Trade 
Representative shall make a recommendation to the President on 
what action, if any, should be taken to prevent or remedy the 
trade diversion or threat thereof.
  (h) Presidential Action.--Within 20 days after receipt of the 
recommendation from the Trade Representative, the President 
shall determine what action to take to prevent or remedy the 
trade diversion or threat thereof.
  (i) Duration of Action.--Action taken under subsection (h) 
shall be terminated not later than 30 days after expiration of 
the action taken by the WTO member or members involved against 
imports from the People's Republic of China.
  (j) Review of Circumstances.--(1) The Commission shall review 
the continued need for action taken under subsection (h) if the 
WTO member or members involved notify the Committee on 
Safeguards of the WTO of any modification in the action taken 
by them against the People's Republic of China pursuant to 
consultation referred to in subsection (a). The Commission 
shall, not later than 60 days after such notification, 
determine whether a significant diversion of trade continues to 
exist and report its determination to the President. The 
President shall determine, within 15 days after receiving the 
Commission's report, whether to modify, withdraw, or keep in 
place the action taken under subsection (h).

SEC. 423. REGULATIONS; TERMINATION OF PROVISION.

  (a) To Carry Out Restrictions and Monitoring.--The President 
shall by regulation provide for the efficient and fair 
administration of any restriction proclaimed pursuant to the 
subtitle and to provide for effective monitoring of imports 
under section 422(a).
  (b) To Carry Out Agreements.--To carry out an agreement 
concluded pursuant to consultations under section 421(j) or 
422(e)(2), the President is authorized to prescribe regulations 
governing the entry or withdrawal from warehouse of articles 
covered by such agreement.
  (c) Termination Date.--This subtitle and any regulations 
issued under this subtitle shall cease to be effective 12 years 
after the date of entry into force of the Protocol of Accession 
of the People's Republic of China to the WTO.

           *       *       *       *       *       *       *


            VII. ADDITIONAL VIEWS OF CONGRESSMAN PETE STARK

    Mr. Chairman, as one of four Members of the Ways and Means 
Committee to vote against extending permanent most favored 
nation status to China, I feel compelled to explain the reasons 
for my vote.
    First, the Administration missed several opportunities to 
incorporate the concerns of many Members of Congress in the 
bilateral trade agreement it reached with China last November. 
Second, Congressman Levin attempted to address the concerns 
raised by many Members of this Committee with legislation that 
falls short of providing any real protection for labor. And 
then, many Members were told that the human rights and rule-of-
law provisions would be inserted in the bill that reaches the 
House floor. Before voting on final passage, the Committee had 
yet one last opportunity to address concerns I raised at the 
markup regarding Taiwan's accession to the WTO as well as 
President Clinton's 1994 order to ban assault weapon imports 
from China. To no avail, the Committee ignored the very real 
concerns facing our nation in the name of corporate interests 
and free trade. Because the markup bill failed to address all 
of these concerns, I voted not to extend permanent most favored 
nation trade status to China.
    I commend Rep. Levin for attempting to bring the interests 
of labor and trade to common ground. Unfortunately, the import 
surge proposal is essentially a new form of existing 
authorities the Administration currently has, but never fully 
utilizes. The result is a toothless proposal that leaves action 
up to the discretion of the Administration--no change from 
current law. The surge import proposal conditions any action on 
the part of the President to correct a surge in imports from 
China on consultations with China. The PRC has broken every 
bilateral agreement it has with the U.S. and ignored numerous 
memorandums of understanding. The People's Republic of China 
has done nothing to make me believe that it will work with the 
U.S. to correct any import surge or unfair trade practices 
after it accedes to the WTO. After the U.S. consults with 
China, final action on the part of the President is 
discretionary under the Levin proposal. If the President 
believes that action might somehow jeopardize U.S.-Sino 
relations, then the surge will be ignored. This does nothing to 
help the U.S. workers who will face lay-offs due to product-
specific surges from China. The only way for Congress to have 
any type of oversight of our trade laws, and then to enforce 
domestic statute, is to prohibit extension of MFN trade status 
to China.
    Once China enters the WTO, it will actively spearhead 
efforts to block Taiwan's entry in the WTO. I offered an 
amendment that conditions permanent MFN status to China on 
Taiwan's accession to the WTO prior to, or on the same day as 
China. Proponents of permanent MFN claim that this is a false 
fear on the part of PMFN opponents. The Administration assured 
me that China has already verbally agreed to allow Taiwan to 
enter the WTO unimpeded. If they've already agreed, there 
should have been no opposition to putting that agreement in 
statute. However, on May 16, 2000, the very same day I offered 
my amendment, China proved that it will in fact try to block 
Taiwan's entry into the WTO. The PRC lead the charge against 
Taiwan's fourth bid for observer status in the World Health 
Organization (WHO). If China is willing to go to great lengths 
to block Taiwan from the WHO, it is certain to lead a full 
campaign against Taiwan's application for WTO membership. 
Unfortunately, the Ways & Means Committee defeated this 
amendment.
    I also offered an amendment that conditions extension of 
permanent MFN on an additional agreement between the U.S. and 
China on President Clinton's 1994 embargo on arms and 
ammunition imports.
    In 1994, as a condition of granting China annual MFN 
status, President Clinton issued an order that bans the imports 
of assault weapons from China. Under World Trade Organization 
(WTO) rules, the U.S. is required to treat foreign and domestic 
goods identically. The U.S. continues to manufacture and sell 
assault weapons. Clearly, by banning China from selling to the 
U.S. market, but allowing domestic manufacturers to continue 
with business as usual, the U.S. does not treat foreign and 
domestic goods identically.
    This means that once China accedes to the WTO, they will 
have every right as a member to dispute the U.S. ban. And since 
the order does violate WTO rules, the WTO will most likely find 
the U.S. in violation of treating China's assault weapons 
differently from those in the U.S. This would mean that the 
U.S. would have to lift the import ban on China, or ban the 
sale and manufacture of its own assault weapons as well as the 
imports from other countries.
    China accounted for forty-two percent of all rifles 
imported into the U.S. civilian market between 1987 and 1994, 
the year in which President Clinton finally blocked the Chinese 
gun dumping. This flood of Chinese weapons was so great that it 
strongly boosted the overall import of guns to the U.S. Chinese 
rifles and handguns accounted for 15 percent of all firearms 
imported for the civilian market in six of the eight years 
between 1987 and 1994. The import of Chinese guns was 
effectively stopped in 1994 when President Clinton imposed a 
ban as a condition of renewing China's most favored nation 
status.
    If we grant China permanent most favored nation trade 
status, China, not the Members of the 106th Congress, will 
dictate U.S. gun import policy.
    The issues I have mentioned are just a few, of a much 
greater list, of the problems I have with granting China 
permanent MFN status. Until trade agreements incorporate the 
needs of labor, the environment and human rights I will have to 
oppose their cause. The U.S. cannot continue to promote the 
interests of multinational corporations while ignoring the real 
problems faced by the exploited. Labor, the environment and 
human rights are inherent functions of trade. If we don't begin 
to include them in our trade negotiations today, they will 
continue to splinter the U.S. Congress and its desire to 
achieve real global progress.

                                                        Pete Stark.

                                  
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