[House Report 109-187]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-187

======================================================================
 
 PROVIDING FOR CONSIDERATION OF H.R. 3283, UNITED STATES TRADE RIGHTS 
                            ENFORCEMENT ACT

                                _______
                                

   July 26, 2005.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

    Mr. Putnam, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 387]

    The Committee on Rules, having had under consideration 
House Resolution 387, by a record vote of 9 to 4, report the 
same to the House with the recommendation that the resolution 
be adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of H.R. 3283, 
the United States Trade Rights Enforcement Act, under a closed 
rule. The rule provides one hour of debate in the House equally 
divided and controlled by the chairman and ranking minority 
member of the Committee on Ways and Means. The rule waives all 
points of order against consideration of the bill. The rule 
provides that the amendment in the nature of a substitute 
printed in this report shall be considered as adopted.
    Finally, the rule provides one motion to recommit with or 
without instructions.

                         EXPLANATION OF WAIVERS

    The Rules Committee is not aware of any points of order 
against consideration of the bill. The waiver of all points of 
order against consideration of the bill is prophylactic in 
nature.

                            COMMITTEE VOTES

    Pursuant to clause 3(b) of House rule XIII the results of 
each record vote on an amendment or motion to report, together 
with the names of those voting for and against, are printed 
below:

Rules Committee record vote No. 112

    Date: July 26, 2005.
    Measure: H.R. 3283, United States Trade Rights Enforcement 
Act.
    Motion by: Mrs. Slaughter.
    Summary of motion: To report an open rule.
    Results: Defeated 4 to 9.
    Vote by Members: Diaz-Balart--Nay; Hastings (WA)--Nay; 
Sessions--Nay; Putnam--Nay; Capito--Nay; Cole--Nay; Bishop--
Nay; Gingrey--Nay; Slaughter--Yea; McGovern--Yea; Hastings 
(FL)--Yea; Matsui--Yea; Dreier--Nay.

Rules Committee record vote No. 113

    Date: July 26, 2005.
    Measure: H.R. 3283, United States Trade Rights Enforcement 
Act.
    Motion by: Mr. McGovern.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Mr. Ryan of 
Ohio, which provides U.S. domestic industries with the option 
of pursuing relief from foreign government manipulation of 
currency values and other subsidies. Injured industries could 
seek relief under the U.S. countervailing-duty statute or the 
China-specific market-disruption statute. Each of these 
alternatives is meant to address as quickly and as effectively 
as possible the harm to U.S. manufacturers and producers of 
agricultural goods and is intended to do so in a manner that is 
consistent with the international legal obligations of the 
United States at the WTO and the IMF.
    Results: Defeated 4 to 9.
    Vote by Members: Diaz-Balart--Nay; Hastings (WA)--Nay; 
Sessions--Nay; Putnam--Nay; Capito--Nay; Cole--Nay; Bishop--
Nay; Gingrey--Nay; Slaughter--Yea; McGovern--Yea; Hastings 
(FL)--Yea; Matsui--Yea; Dreier--Nay.

Rules Committee record vote No. 114

    Date: July 26, 2005.
    Measure: H.R. 3283, United States Trade Rights Enforcement 
Act.
    Motion by: Mr. Hastings of Florida.
    Summary of motion: To make in order and provide the 
appropriate waivers for the amendment offered by Mr. Cardin, 
which clarifies current U.S. law to ensure that the 
countervailing duty law can be applied to non-market economics 
to provide a remedy for U.S. workers, farmers, and businesses 
injured by subsidized exports from China.
    Results: Defeated 4 to 9.
    Vote by Members: Diaz-Balart--Nay; Hastings (WA)--Nay; 
Sessions--Nay; Putnam--Nay; Capito--Nay; Cole--Nay; Bishop--
Nay; Gingrey--Nay; Slaughter--Yea; McGovern--Yea; Hastings 
(FL)--Yea; Matsui--Yea; Dreier--Nay.

Rules Committee record vote No. 115

    Date: July 26, 2005.
    Measure: H.R. 3283, United States Trade Rights Enforcement 
Act.
    Motion by: Mr. Lincoln Diaz-Balart.
    Summary of motion: To report the rule.
    Results: Agreed to 9 to 4.
    Vote by Members: Diaz-Balart--Yea; Hastings (WA)--Yea; 
Sessions--Yea; Putnam--Yea; Capito--Yea; Cole--Yea; Bishop--
Yea; Gingrey--Yea; Slaughter--Nay; McGovern--Nay; Hastings 
(FL)--Nay; Matsui--Nay; Dreier--Yea.

SUMMARY OF AMENDMENT IN THE NATURE OF A SUBSTITUTE TO BE CONSIDERED AS 
                                ADOPTED

    (Summary provided by the amendment sponsor.)
    Thomas: Makes the following changes to the underlying bill: 
Section 2, updates resolution language to include reference to 
the new exchange rate mechanism recently adopted by Chinese 
government; Section 3, makes technical correction to add 
``where practicable,'' to language regarding third country 
information in conformance with China's WTO accession protocol; 
Section 4, makes technical correction to change reporting 
reference to international trade ``obligations'' rather than 
``laws''; Section 6, adds House Financial Services and Senate 
Banking Committees as recipients of the supplemental currency 
report and adds a requirement for Secretary of the Treasury to 
analyze in the report the new exchange rate mechanism recently 
adopted by Chinese government; Section 7, adds sense of the 
Congress language that the USTR should identify a Chief 
Enforcement Officer; Section 8, makes a technical correction to 
change reference to ITC's report of China's ``macroeconomic'' 
policies to simply ``economic'' policies, and to add reference 
to the ``service'' industry in the ITC analysis.

  TEXT OF AMENDMENT IN THE NATURE OF A SUBSTITUTE TO BE CONSIDERED AS 
                                ADOPTED

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``United States Trade Rights 
Enforcement Act''.

SEC. 2. SENSE OF CONGRESS.

  It is the sense of Congress that--
          (1) United States producers that believe they are 
        injured by subsidized imports from nonmarket economy 
        countries have not been able to obtain relief through 
        countervailing duty actions because the Department of 
        Commerce has declined to make countervailing duty 
        determinations for nonmarket economy countries in part 
        because it lacks explicit legal authority to do so;
          (2) explicitly making the countervailing duty law 
        under subtitle A of title VII of the Tariff Act of 1930 
        (19 U.S.C. 1671 et seq.) applicable to actions by 
        nonmarket economy countries would give United States 
        producers access to import relief measures that 
        directly target government subsidies;
          (3) the Bureau of Customs and Border Protection of 
        the Department of Homeland Security has encountered 
        particular problems in collecting countervailing and 
        antidumping duties from new shippers who default on 
        their bonding obligations;
          (4) this behavior may detract from the ability of 
        United States companies to recover from competition 
        found to be unfair under international trade laws;
          (5) accordingly, it is appropriate, for a test 
        period, to suspend the availability of bonds for new 
        shippers and instead require cash deposits;
          (6) more analysis and assessment is needed to 
        determine the appropriate policy to respond to this and 
        other problems experienced in the collection of duties 
        and the impact that policy changes could have on 
        legitimate United States trade and United States trade 
        obligations;
          (7) given the developments in the ongoing World Trade 
        Organization (WTO) negotiations relating to trade 
        remedies, Congress reiterates its resolve as expressed 
        in House Concurrent Resolution 262 (107th Congress), 
        which was overwhelmingly approved by the House of 
        Representatives on November 7, 2001, by a vote of 410 
        to 4;
          (8) the United States Trade Representative should 
        monitor compliance by United States trading partners 
        with their trade obligations and systematically 
        identify areas of noncompliance;
          (9) the United States Trade Representative should 
        then aggressively resolve noncompliance through 
        consultations with United States trading partners;
          (10) however, should efforts to resolve disputes 
        through consultation fail, the United States Trade 
        Representative should vigorously pursue United States 
        rights through dispute settlement in every available 
        forum;
          (11) given the huge growth in trade with the People's 
        Republic of China, its impact on the United States 
        economy, and the complaints voiced by many United 
        States interests that China is not complying with its 
        international trade obligations, the United States 
        Trade Representative should place particular emphasis 
        on identifying and resolving disputes with China that 
        limit United States exports, particularly concerning 
        compliance with obligations relating to intellectual 
        property rights and enforcement, tariff and nontariff 
        barriers, subsidies, technical barriers to trade, 
        sanitary and phytosanitary issues, nonmarket-based 
        industrial policies, distribution rights, and 
        regulatory transparency;
          (12) in addition, the United States Trade 
        Representative should place particular emphasis on 
        trade barriers imposed by Japan, specifically the 
        Japanese trade ban on United States beef without 
        scientific justification, the Japanese sanitary and 
        phytosanitary restrictions on United States 
        agricultural products, Japanese policies on 
        pharmaceutical and medical device reference pricing, 
        insurance cross-subsidization, and privatization in a 
        variety of sectors that discriminate against United 
        States companies;
          (13) the fixed exchange rate that the People's 
        Republic of China has maintained until recently has 
        been a substantial distortion to world markets, 
        blocking the price mechanism, impeding adjustment of 
        international imbalances, and serving as a source of 
        large and increasing risk to the Chinese economy;
          (14) such behavior has effectively prevented market 
        forces from operating efficiently in the People's 
        Republic of China, distorting world trade;
          (15) in a welcome move, the People's Republic of 
        China has now begun to move to a more flexible exchange 
        rate, and it should continue to so move to a market-
        based exchange rate as soon as possible;
          (16) in light of this recent positive development, 
        the Secretary of Treasury should provide to Congress a 
        periodic assessment of the mechanism adopted by the 
        Chinese Government to relate its currency to a basket 
        of foreign currencies and the degree to which the 
        application of this mechanism moves the currency closer 
        to a market-based representation of its value;
          (17) in addition, Japan's policy of intervening to 
        influence the value of its currency and its prolific 
        barriers to trade create distortions that disadvantage 
        United States exporters;
          (18) this adverse impact is magnified by Japan's role 
        in the global marketplace, combined with its chronic 
        surplus, weak economy, deflationary economy, low growth 
        rate, and lack of consumer spending; and
          (19) accordingly, the United States Trade 
        Representative should have additional resources in the 
        Office of the General Counsel, the Office of Monitoring 
        and Enforcement, the Office of China Affairs, and the 
        Office of Japan, Korea, and APEC Affairs to address a 
        variety of needs that will best enable United States 
        companies, farmers, and workers to benefits from the 
        trade agreements to which the United States has around 
        the world.

SEC. 3. APPLICATION OF COUNTERVAILING DUTIES TO NONMARKET ECONOMY 
                    COUNTRIES.

  (a) Amendments.--
          (1) Countervailing duties imposed.--Section 701(a)(1) 
        of the Tariff Act of 1930 (19 U.S.C. 1671(a)(1)) is 
        amended by inserting ``(including a nonmarket economy 
        country)'' after ``country'' each place it appears.
          (2) Definition of countervailable subsidy.--Section 
        771(5)(E) of such Act (19 U.S.C. 1677(5)(E)) is amended 
        by adding at the end the following new sentences: 
        ``With respect to the People's Republic of China, if 
        the administering authority encounters special 
        difficulties in calculating the amount of a benefit 
        under clause (i), (ii), (iii), or (iv) of this 
        subparagraph, the administering authority may use 
        methodologies for identifying and measuring the subsidy 
        benefit which take into account the possibility that 
        prevailing terms and conditions in China may not always 
        be available as appropriate benchmarks. When applying 
        such methodologies, where practicable, the 
        administering authority should adjust such prevailing 
        terms and conditions before considering the use of 
        terms and conditions prevailing outside China.''.
  (b) Prohibition on Double Counting.--In applying section 
701(a)(1) of the Tariff Act of 1930, as amended by subsection 
(a), to a class or kind of merchandise of a nonmarket economy 
country, the administering authority shall ensure that--
          (1) any countervailable subsidy is not double counted 
        in an antidumping order under section 731 of such Act 
        (19 U.S.C. 1673) on the same class or kind of 
        merchandise of the country; and
          (2) the application of section 701(a)(1) of such Act 
        is consistent with the international obligations of the 
        United States.
  (c) Effective Date.--The amendments made by subsection (a) 
apply to any petition filed under section 702 of the Tariff Act 
of 1930 (19 U.S.C. 1671a) on or after 30 days after the date of 
the enactment of this Act, and the provisions contained in 
subsection (b) apply to any subsequent determination made under 
section 733, 735, or 751 of such Act (19 U.S.C. 1673b, 1673d, 
or 1675).

SEC. 4. NEW SHIPPER REVIEW AMENDMENT.

  (a) Suspension of the Availability of Bonds to New 
Shippers.--Clause (iii) of section 751(a)(2)(B) of the Tariff 
Act of 1930 (19 U.S.C. 1675(a)(2)(B)(iii)) shall not be 
effective during the 3-year period beginning on the date of the 
enactment of this Act.
  (b) Report on the Impact of the Suspension.--Not later than 2 
years after the date of the enactment of this Act, the 
Secretary of the Treasury, in consultation with the Secretary 
of Commerce, the United States Trade Representative, and the 
Secretary of Homeland Security, shall submit to the Committee 
on Finance of the Senate and the Committee on Ways and Means of 
the House of Representatives a report containing--
          (1) recommendations on whether the suspension of the 
        effectiveness of section 751(a)(2)(B)(iii) of the 
        Tariff Act of 1930 should be extended beyond the date 
        provided in subsection (a) of this section; and
          (2) assessments of the effectiveness of any 
        administrative measures that have been implemented to 
        address the difficulties giving rise to the suspension 
        under subsection (a) of this section, including--
                  (A) problems in assuring the collection of 
                antidumping duties on imports from new 
                shippers; and
                  (B) burdens imposed on legitimate trade and 
                commerce by the suspension of availability of 
                bonds to new shippers by reason of the 
                suspension under subsection (a).
  (c) Report on Collection Problems and Analysis of Proposed 
Solutions.--
          (1) Report.--Not later than 90 days after the date of 
        the enactment of this Act, the Secretary of the 
        Treasury, in consultation with the Commissioner of the 
        Bureau of Customs and Border Protection and the 
        Secretary of Commerce, shall submit to the Committee on 
        Ways and Means of the House of Representatives and the 
        Committee on Finance of the Senate a report describing 
        the major problems experienced in the collection of 
        duties, including fraudulent activities intended to 
        avoid payment of duties, with an estimate of the total 
        amount of uncollected duties for the previous fiscal 
        year and a breakdown across product lines describing 
        the reasons duties were uncollected.
          (2) Recommendations.--The report shall make 
        recommendations on additional actions to address 
        remaining problems related to duty collections and, for 
        each recommendation, provide an analysis of how the 
        recommendation would address the specific problem or 
        problems cited and the impact that implementing the 
        recommendation would have on international trade and 
        commerce (including any additional costs imposed on 
        United States businesses and whether the implementation 
        of the revision is likely to violate any international 
        trade obligations).

SEC. 5. COMPREHENSIVE MONITORING OF COMPLIANCE BY THE PEOPLE'S REPUBLIC 
                    OF CHINA WITH ITS INTERNATIONAL TRADE OBLIGATIONS.

  (a) Intellectual Property Rights Compliance.--
          (1) In general.--In accordance with the terms of the 
        Agreement of WTO Accession for the People's Republic of 
        China, subsequent agreements by Chinese authorities 
        through the U.S.-China Joint Commission on Commerce and 
        Trade (JCCT), and other obligations by Chinese 
        officials related to its trade obligations, the United 
        States Trade Representative and the Secretary of 
        Commerce shall undertake to ensure that the Government 
        of the People's Republic China has taken the following 
        steps:
                  (A) The Chinese Government has increased the 
                number of civil and criminal prosecutions of 
                intellectual property rights violators by the 
                end of 2005 to a level that significantly 
                decreases the current amount of infringing 
                products for sale within China.
                  (B) China's Supreme People's Court, Supreme 
                People's Procuratorate, and Ministry of Public 
                Security have issued draft guidelines for 
                public comment to ensure the timely referral of 
                intellectual property rights violations from 
                administrative bodies to criminal prosecution.
                  (C) The Chinese Ministry of Public Security 
                and the General Administration of Customs have 
                issued regulations to ensure the timely 
                transfer of intellectual property rights cases 
                for criminal investigation.
                  (D) The Chinese Ministry of Public Security 
                has established a leading group responsible for 
                overall research, planning, and coordination of 
                all intellectual property rights criminal 
                enforcement to ensure a focused and coordinated 
                nationwide enforcement effort.
                  (E) The Chinese Government has established a 
                bilateral intellectual property rights law 
                enforcement working group in cooperation with 
                the United States whose members will cooperate 
                on enforcement activities to reduce cross-
                border infringing activities.
                  (F) The Chinese Government has aggressively 
                countered movie piracy by dedicating 
                enforcement teams to pursue enforcement actions 
                against pirates and has regularly instructed 
                enforcement authorities nationwide that copies 
                of films and audio-visual products still in 
                censorship or import review or otherwise not 
                yet authorized for distribution are deemed 
                pirated and subject to enhanced enforcement.
                  (G) By the end of 2005, the Chinese 
                Government has completed its legalization 
                program to ensure that all central, provincial, 
                and local government offices are using only 
                licensed software and by the end of 2006 has 
                extended the program to enterprises (including 
                state-owned enterprises).
                  (H) The Chinese Government, having declared 
                that software end-user piracy is considered to 
                constitute ``harm to the public interest'' and 
                as such will be subject to administrative 
                penalties nationwide, has initiated civil and 
                criminal prosecutions of software end-user 
                violators.
                  (I) The Chinese Government has appointed an 
                Intellectual Property Rights Ombudsman at the 
                Chinese Embassy in Washington, D.C., to serve 
                as the point of contact for United States 
                companies, particularly small- and medium-sized 
                businesses, seeking to secure and enforce their 
                intellectual property rights in China or 
                experiencing intellectual property rights 
                problems in China.
                  (J) The relevant Chinese agencies, including 
                the Ministry of Commerce, the China Trademark 
                Office, the State Intellectual Property Office, 
                and the National Copyright Administration of 
                China have significantly improved intellectual 
                property rights enforcement at trade shows and 
                issued new regulations to achieve this goal.
                  (K) Not later than June 30, 2006, the Chinese 
                State Council has submitted to the National 
                People's Congress the legislative package 
                needed for China to accede to the World 
                Intellectual Property Organization (WIPO) 
                Internet treaties.
                  (L) The Chinese Government has taken steps to 
                enforce intellectual property right laws 
                against Internet piracy, including through 
                enforcement at Internet cafes.
                  (M) The Chinese Government, having confirmed 
                that the criminal penalty thresholds in the 
                2004 Judicial Interpretation are applicable to 
                sound recordings, has instituted civil and 
                criminal prosecutions against such violators.
                  (N) The Chinese Government has initiated 
                civil and criminal prosecutions against 
                exporters of infringing recordings.
          (2) Dispute settlement proceedings in wto.--If the 
        President determines that the People's Republic of 
        China has not met each of the obligations described in 
        subparagraphs (A) through (N) of paragraph (1) or taken 
        steps that result in significant improvements in 
        protection of intellectual property rights in 
        accordance with its trade obligations, then the 
        President shall assign such resources as are necessary 
        to collect evidence of such trade agreement violations 
        for use in dispute settlement proceedings against China 
        in the World Trade Organization.
  (b) Access for Exports of United States Goods.--In accordance 
with the terms of the Agreement of WTO Accession for the 
People's Republic of China, subsequent agreements by Chinese 
authorities through the U.S.-China Joint Commission on Commerce 
and Trade (JCCT), and other obligations by Chinese officials 
related to its trade obligations, the United States Trade 
Representative and the Secretary of Commerce shall undertake to 
ensure that the Government of the People's Republic of China 
has taken the following steps:
          (1) China has taken steps to ensure that United 
        States products can be freely distributed in China, 
        including by approving a significant backlog of 
        distribution license applications and by preparing a 
        regulatory guide for businesses seeking to acquire 
        distribution rights that expands on the guidelines 
        announced in April 2005.
          (2) Chinese officials have permitted all enterprises 
        in China, including those located in bonded zones, to 
        acquire licenses to distribute goods throughout China.
          (3) The Chinese Government has submitted regulations 
        on management of direct selling to the Chinese State 
        Council for review and taken any additional steps 
        necessary to provide a legal basis for United States 
        direct sales firms to sell United States goods directly 
        to households in China.
          (4) The Chinese Government has issued final 
        regulations on direct selling, including with respect 
        to distribution of imported goods and fixed location 
        requirements.
  (c) Access for Exports of United States Services.--In 
accordance with the terms of the Agreement of WTO Accession for 
the People's Republic of China, subsequent agreements by 
Chinese authorities through the U.S.-China Joint Commission on 
Commerce and Trade (JCCT), and other obligations by Chinese 
officials related to its trade obligations, the United States 
Trade Representative and the Secretary of Commerce shall 
undertake to ensure that the Government of the People's 
Republic of China has taken the following steps:
          (1) The Chinese Government has convened a meeting of 
        the U.S.-China Insurance Dialogue before the end of 
        2005 to discuss regulatory concerns and barriers to 
        further liberalization of the sector.
          (2) The Chinese Government has made senior level 
        officials available to meet under the JCCT Information 
        Technology Working Group to discuss capitalization 
        requirements, resale services, and other issues as 
        agreed to by the two sides.
  (d) Access for United States Agriculture.--In accordance with 
the terms of the Agreement of WTO Accession for the People's 
Republic of China, subsequent agreements by Chinese authorities 
through the U.S.-China Joint Commission on Commerce and Trade 
(JCCT), and other obligations by Chinese officials related to 
its trade obligations, the United States Trade Representative 
and the Secretary of Agriculture shall undertake to ensure that 
the Government of the People's Republic of China has taken the 
following steps:
          (1) China has completed the regulatory approval 
        process for a United States-produced corn biotech 
        variety.
          (2) China's Administration of Quality Supervision, 
        Inspection and Quarantine has implemented the 2005 
        Memorandum of Understanding between the United States 
        and China designed to facilitate cooperation on animal 
        and plant health safety issues and improve efforts to 
        expand United States access to China's markets for 
        agricultural commodities.
  (e) Accounting of Chinese Subsidies.--In accordance with the 
terms of the Agreement of WTO Accession for the People's 
Republic of China, subsequent agreements by Chinese authorities 
through the U.S.-China Joint Commission on Commerce and Trade 
(JCCT), and other obligations by Chinese officials related to 
its trade obligations, the United States Trade Representative 
and the Secretary of Commerce shall undertake to ensure that 
the Government of the People's Republic of China has provided a 
detailed accounting of its subsidies to the World Trade 
Organization by the end of 2005.
  (f) Reports.--
          (1) Biannual report.--Not later than six months after 
        the date of the enactment of this Act, and every six 
        months thereafter, the President should transmit to the 
        Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance of the 
        Senate a report that contains--
                  (A) a description of the specific steps taken 
                by the Government of the People's Republic of 
                China to meet its obligations described in 
                subsections (a) through (e) of this section 
                (other than obligations described in 
                subsections (a)(1)(A) and (G), (b)(1), (c)(1), 
                and (e));
                  (B) an analysis of the extent to which 
                Chinese officials are attempting in good faith 
                to meet such obligations; and
                  (C) a description of the actions, if any, the 
                President will take to obtain compliance by 
                China if the President determines that the 
                Chinese Government is failing to meet such 
                obligations, including pursuing United States 
                rights under the dispute settlement provisions 
                of the World Trade Organization, as 
                appropriate.
          (2) Monthly report.--Not later than 30 days after the 
        date of the enactment of this Act, and every 30 days 
        thereafter, the President should transmit to the 
        Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance of the 
        Senate a report that contains--
                  (A) a description of the specific steps taken 
                by the Government of the People's Republic of 
                China to meet its obligations described in 
                subsections (a)(1)(A) and (G), (b)(1), (c)(1), 
                and (e);
                  (B) an analysis of the extent to which 
                Chinese officials are attempting in good faith 
                to meet such obligations; and
                  (C) a description of the actions, if any, the 
                President will take to obtain compliance by 
                China if the President determines that the 
                Chinese Government is failing to meet such 
                obligations, including pursuing United States 
                rights under the dispute settlement provisions 
                of the World Trade Organization, as 
                appropriate.

SEC. 6. REPORTS ON CURRENCY MANIPULATION BY FOREIGN COUNTRIES.

  (a) Report on Currency Manipulation.--Not later than 60 days 
after the date of the enactment of this Act, the Secretary of 
the Treasury shall submit to the appropriate congressional 
committees a report that--
          (1) defines currency manipulation;
          (2) describes actions of foreign countries that will 
        be considered to be currency manipulation; and
          (3) describes how statutory provisions addressing 
        currency manipulation by trading partners of the United 
        States contained in, and relating to, section 40 of the 
        Bretton Woods Agreements Act (22 U.S.C. 286y) and 
        sections 3004 and 3005 of the Exchange Rates and 
        International Economic Policy Coordination Act of 1988 
        (22 U.S.C. 5304 and 5305) can be better clarified 
        administratively to provide for improved and more 
        predictable evaluation.
  (b) Report on Actions by China.--
          (1) In general.--In light of the recent positive 
        announcement by the Government of the People's Republic 
        of China with respect to increased exchange rate 
        flexibility, the Secretary of the Treasury shall submit 
        to the appropriate congressional committees a report 
        that examines the mechanism adopted by the Chinese 
        Government to relate its currency to a basket of 
        foreign currencies and the degree to which the 
        application of this mechanism moves the currency closer 
        to a market-based representation of its value.
          (2) Deadline.-- The initial report required by this 
        subsection shall be submitted to the appropriate 
        congressional committees not later than 180 days after 
        the date of the enactment of this Act and subsequent 
        reports shall be included in the report required under 
        section 3005 of the Exchange Rates and International 
        Economic Policy Coordination Act of 1988 (22 U.S.C. 
        5305).
  (c) Definition.--In this section, the term ``appropriate 
congressional committees'' means--
          (1) the Committee on Ways and Means and the Committee 
        on Financial Services of the House of Representatives; 
        and
          (2) the Committee on Finance and the Committee on 
        Banking, Housing, and Urban Affairs of the Senate

SEC. 7. AUTHORIZATION OF APPROPRIATIONS FOR THE OFFICE OF THE UNITED 
                    STATES TRADE REPRESENTATIVE.

  (a) Authorization of Appropriations.--
          (1) In general.--Section 141(g)(1)(A) of the Trade 
        Act of 1974 (19 U.S.C. 2171(g)(1)(A)) is amended by 
        striking clauses (i) and (ii) and inserting the 
        following:
          ``(i) $44,779,000 for fiscal year 2006.
          ``(ii) $47,018,000 for fiscal year 2007.''.
          (2) Rule of construction.--The amendment made by 
        paragraph (1) shall not be construed to affect the 
        availability of funds appropriated pursuant to section 
        141(g)(1)(A) of the Trade Act of 1974 before the date 
        of the enactment of this Act.
  (b) Authorization of Appropriations for the Office of the 
General Counsel and Certain Other Offices.--There are 
authorized to be appropriated to the Office of the United 
States Trade Representative for the appointment of additional 
staff in or enhanced activities by the Office of the General 
Counsel, the Office of Monitoring and Enforcement, the Office 
of China Affairs, and the Office of Japan, Korea, and APEC 
Affairs--
          (1) $4,000,000 for fiscal year 2006; and
          (2) $4,000,000 for fiscal year 2007.
  (c) Sense of Congress.--It is the sense of the Congress that 
the enforcement of United States rights and of obligations of 
United States trading partners under trade agreements has 
gained such significance that the United States Trade 
Representative should determine which of its current positions 
is most responsible for carrying out these important 
enforcement duties and should assign that position, in addition 
to any other title, the title of Chief Enforcement Officer.

SEC. 8. AUTHORIZATION OF APPROPRIATIONS FOR THE UNITED STATES 
                    INTERNATIONAL TRADE COMMISSION.

  (a) Authorization of Appropriations.--Section 330(e)(2)(A) of 
the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)(A)) is amended by 
striking clauses (i) and (ii) and inserting the following:
          ``(i) $62,752,000 for fiscal year 2006.
          ``(ii) $65,890,000 for fiscal year 2007.''.
  (b) Rule of Construction.--The amendment made by subsection 
(a) shall not be construed to affect the availability of funds 
appropriated pursuant to section section 330(e)(2)(A) of the 
Tariff Act of 1930 before the date of the enactment of this 
Act.
  (c) Study and Report on Trade and Economic Relations With 
China.--
          (1) Study.--
                  (A) In general.--The United States 
                International Trade Commission shall carry out 
                a comprehensive study on trade and economic 
                relations between the United States and the 
                People's Republic of China which addresses 
                China's economic policies, including its 
                exchange rate policy, the competitiveness of 
                its industries, the composition and nature of 
                its trade patterns, and other elements 
                impacting the United States trade account, 
                industry, competitiveness, and employment.
                  (B) Requirements.--In carrying out the study 
                under subparagraph (A), the United States 
                International Trade Commission shall undertake 
                the following:
                          (i) An analysis of the United States 
                        trade and investment relationship with 
                        China, with a focus on the United 
                        States-China trade balance and trends 
                        affecting particular industries, 
                        products, and sectors in agriculture, 
                        manufacturing, and services. The 
                        analysis shall provide context for 
                        understanding the U.S.-China trade and 
                        investment relationship, by including 
                        information regarding China's economic 
                        relationships with third countries and 
                        China's changing policy regime and 
                        business environment. The analysis 
                        shall include a focus on United States-
                        China trade in goods and services, 
                        United States direct investment in 
                        China, China's foreign direct 
                        investment in the United States, and 
                        the relationship between trade and 
                        investment. The analysis shall make 
                        adjustments, where possible, for 
                        merchandise passed through Hong Kong.
                          (ii) An analysis of the competitive 
                        conditions in China affecting United 
                        States exports and United States direct 
                        investment. The analysis shall take 
                        into account, to the extent feasible, 
                        significant factors including tariffs 
                        and non-tariff measures, competition 
                        from Chinese domestic firms and 
                        foreign-based companies operating in 
                        China, the Chinese regulatory 
                        environment, including specific 
                        regulations and overall regulatory 
                        transparency, and other Chinese 
                        industrial and financial policies. In 
                        addition, the analysis shall examine 
                        the specific competitive conditions 
                        facing United States producers in key 
                        industries, products, services, and 
                        sectors, potentially including computer 
                        and telecommunications hardware, 
                        textiles, grains, cotton, and financial 
                        services based on trade and investment 
                        flows.
                          (iii) An examination of the role and 
                        importance of intellectual property 
                        rights issues, such as patents, 
                        copyrights, and licensing, in specific 
                        industries in China, including the 
                        pharmaceutical industry, the software 
                        industry, and the entertainment 
                        industry.
                          (iv) An analysis of the effects on 
                        global commodity markets of China's 
                        growing demand for energy and raw 
                        materials.
                          (v) An examination of whether or not 
                        increased United States imports from 
                        China reflect displacement of United 
                        States imports from third countries or 
                        United States domestic production, and 
                        the role of intermediate and value-
                        added goods processing in China's 
                        pattern of trade.
          (2) Report.--Not later than one year after the date 
        of the enactment of this Act, the United States 
        International Trade Commission shall submit to the 
        Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance of the 
        Senate a report that contains the results of the study 
        carried out under paragraph (1).

SEC. 9. SENSE OF CONGRESS REGARDING EXPANSION OF MEMBERSHIP IN THE 
                    AGREEMENT ON GOVERNMENT PROCUREMENT OF THE WTO.

  (a) Findings.--Congress finds the following:
          (1) Nondiscriminatory, procompetitive, merit-based, 
        and technology-neutral procurement of goods and 
        services is essential so that governments can acquire 
        the best goods to meet their needs for the best value.
          (2) The Agreement on Government Procurement (GPA) of 
        the World Trade Organization (WTO) provides a 
        multilateral framework of rights and obligations 
        founded on such principles.
          (3) The United States is a member of the GPA, along 
        with Canada, the European Union (including its 25 
        member States: Austria, Belgium, Cyprus, the Czech 
        Republic, Denmark, Estonia, Finland, France, Germany, 
        Greece, Hungary, Ireland, Italy, Latvia, Lithuania, 
        Luxemburg, Malta, the Netherlands, Poland, Portugal, 
        Slovak Republic, Slovenia, Spain, Sweden, and the 
        United Kingdom), Hong Kong, Iceland, Israel, Japan, 
        Korea, Liechtenstein, the Netherlands with respect to 
        Aruba, Norway, Singapore, and Switzerland.
          (4) Albania, Bulgaria, Georgia, Jordan, the Kyrgyz 
        Republic, Moldova, Oman, Panama, and Taiwan are 
        currently negotiating to accede to the GPA.
          (5) The People's Republic of China joined the WTO in 
        December 2001, signaling to the international community 
        its commitment to greater openness.
          (6) When China joined the WTO, it committed, in its 
        protocol of accession, to negotiate entry into the GPA 
        ``as soon as possible''.
          (7) More than 3 years after its entry into the WTO, 
        China has not commenced negotiations to join the GPA.
          (8) Recent legal developments in China illustrate the 
        importance and urgency of expanding membership in the 
        GPA.
          (9) In 2002, China enacted a law on government 
        procurement that incorporates preferences for domestic 
        goods and services.
          (10) The first sector for which the Chinese 
        Government has sought to implement the new government 
        procurement law is computer software.
          (11) In March 2005 the Chinese Government released 
        draft regulations governing the procurement of computer 
        software.
          (12) The draft regulations require that non-Chinese 
        software companies meet conditions relating to 
        outsourcing of software development work to China, 
        technology transfer, and similar requirements, in order 
        to be eligible to participate in the Chinese Government 
        market.
          (13) As a result of the proposed regulations, it 
        appears likely that a very substantial amount of 
        American software will be excluded from the government 
        procurement process in China. The draft software 
        regulations threatened to close off a market with a 
        potential value of more than $8 billion to United 
        States firms.
          (14) United States software companies have made a 
        substantial commitment to the Chinese market and have 
        made a substantial contribution to the development of 
        China's software industry.
          (15) The outright exclusion of substantial amounts of 
        software not of Chinese origin that is apparently 
        contemplated in the regulations is out of step with 
        domestic preferences that exist in the procurement laws 
        and practices of other WTO member countries, including 
        the United States.
          (16) The draft regulations do not adhere to the 
        principles of nondiscriminatory, procompetitive, merit-
        based, and technology-neutral procurement embodied in 
        the GPA.
          (17) The software piracy rate in China has never 
        fallen below 90 percent over the past 10 years.
          (18) Chinese Government entities represent a very 
        significant portion of the software market in China 
        that is not dominated by piracy.
          (19) The combined effect of rampant software piracy 
        and the proposed discriminatory government procurement 
        regulations will be a nearly impenetrable barrier to 
        market access for the United States software industry 
        in China.
          (20) The United States trade deficit with China in 
        2004 was $162,000,000,000, the highest with any economy 
        in the world, and a 12.4 percent increase over 2003.
          (21) China's Premier, Wen Jiabao, has committed to 
        rectify this serious imbalance by increasing China's 
        imports of goods and services from the United States.
          (22) The proposed software procurement regulations 
        that were described by the Chinese Government in 
        November 2004 incorporate policies that are fully at 
        odds with Premier Wen's commitment to increase China's 
        imports from the United States, and will add 
        significantly to the trade imbalance between the United 
        States and China.
          (23) Once it is fully implemented, the discriminatory 
        aspects of China's government procurement law will 
        apply to all goods and services that the government 
        procures.
          (24) Other developing countries may follow the lead 
        of China.
          (25) In July 2005, senior officials of the Chinese 
        Government announced at the U.S.-China Joint Committee 
        on Commerce and Trade that China would accelerate its 
        efforts to join the GPA and toward this end will 
        initiate technical consultations with other WTO member 
        countries and accordingly delay issuing draft 
        regulations on software procurement, as it further 
        considers public comments and makes revisions in light 
        of WTO rules.
  (b) Sense of Congress.--It is the sense of Congress that--
          (1) the Government of the United States should strive 
        to expand membership in the Agreement on Government 
        Procurement of the World Trade Organization (WTO);
          (2) the Government of the United States should ensure 
        that the Government of the People's Republic of China 
        meets its WTO obligations as recently affirmed through 
        its commitment in July 2005 through the U.S.-China 
        Joint Committee on Commerce and Trade, to join the WTO 
        Agreement on Government Procurement.
          (3) the Government of the United States should seek a 
        commitment from the Government of the People's Republic 
        of China to maintain its suspension of the 
        implementation of its law on government procurement, 
        pending the conclusion of negotiations to accede to the 
        Agreement on Government Procurement of the WTO;
          (4) the Government of the United States should seek 
        commitments from the Government of the People's 
        Republic of China and other countries that are not yet 
        members of the Agreement on Government Procurement of 
        the WTO to implement the principles of openness, 
        transparency, fair competition based on merit, 
        nondiscrimination, and accountability in their 
        government procurement as embodied in that agreement; 
        and
          (5) the President should direct all appropriate 
        officials of the United States to raise these concerns 
        with appropriate officials of the People's Republic of 
        China and other trading partners.

                                  
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