S 2115 IS

To ensure adequate monitoring of the commitments made by the People's Republic of China in its accession to the World Trade Organization and to create new procedures to ensure compliance with those commitments.

February 29, 2000

Mr. BAUCUS (for himself, Mr. MURKOWSKI, Mr. BINGAMAN, Mr. AKAKA, Mr. WYDEN, and Mr. DORGAN) introduced the following bill; which was read twice and referred to the Committee on Finance

To ensure adequate monitoring of the commitments made by the People's Republic of China in its accession to the World Trade Organization and to create new procedures to ensure compliance with those commitments.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `China-World Trade Organization Compliance Act'.

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) On November 15, 1999, the United States Trade Representative announced the completion of a bilateral agreement with the People's Republic of China regarding accession of the People's Republic of China to the World Trade Organization.

(2) Congress must grant the People's Republic of China permanent normal trade relations status in order for the United States to receive all the benefits of China's accession to the World Trade Organization.

(3) The People's Republic of China has been a centrally planned, nonmarket economy since its founding in 1949.

(4) In 1978, the People's Republic of China initiated the first in a series of economic reforms and has made some meaningful and desirable progress in opening up its economy to imports, exports, and investment.

(5) Granting permanent normal trade relations to China would help cement the economic reforms that have taken place thus far and would help those Chinese leaders who are committed to economic reform to institutionalize these reforms.

(6) Despite these reforms, the People's Republic of China is still largely a nonmarket economy and the People's Republic of China is still a long way from meeting international standards of transparency, legal accountability, reliability of statistics, and uniform application of law.

(7) The viability and credibility of the World Trade Organization and the health of the world trading system require that the People's Republic of China adheres fully to the bilateral and multilateral commitments it makes during the accession process.

(8) Current trade monitoring and enforcement mechanisms within the United States Government and within the World Trade Organization are not designed to take account of the unique Chinese economic structure.

(9) The General Accounting Office has reported that even simple recordkeeping of agreements in various executive agencies is inadequate and incomplete.

(10) It is necessary to establish new mechanisms, both within the executive branch and within Congress, to ensure adequate and continual monitoring and enforcement of China's commitments at the World Trade Organization.

(11) The opaque features of the Chinese economy, the nonuniform implementation of Chinese Government economic policies, the decentralized nature of Chinese Government economic management, and the new nature of Chinese Government commitments under the World Trade Organization, make it necessary to create a comprehensive, multiagency effort to monitor China's compliance with its commitments.

(12) Various Federal agencies should be tasked with different aspects of monitoring China's compliance with its commitments.

SEC. 3. MONITORING.

(a) PLAN-

(1) IN GENERAL- Not later than 90 days after the date that the People's Republic of China accedes to the World Trade Organization, the President shall submit a detailed plan to Congress for monitoring the People's Republic of China's compliance with the commitments it makes as part of that accession.

(2) CONTENT OF PLAN- The plan described in paragraph (1) shall--

(A) include specific assignments to Federal agencies with respect to monitoring China's compliance; and

(B) provide for a mechanism to assure public participation in evaluating China's compliance with its commitments.

(3) ESTIMATE OF COSTS FOR MONITORING ACTIVITIES- The President shall submit to Congress, as part of the plan described in paragraph (1), an estimate of the cost for conducting the monitoring activities required under this Act.

(4) ANNUAL UPDATES- The President shall annually submit to Congress an updated and revised plan as part of the President's report to Congress described in section 4.

(b) GAO SURVEY AND REPORT-

(1) IN GENERAL- In order to determine the degree to which the People's Republic of China is complying with its World Trade Organization commitments and to obtain information about any problems encountered by United States businesses, the Comptroller General of the United States shall survey annually the 50 United States companies doing the most business with the People's Republic of China in each of the following categories:

(A) Exporting nonagricultural goods.

(B) Exporting agricultural goods.

(C) Exporting or providing services.

(D) Investing.

(E) Importing goods.

(2) REPORT- The Comptroller General shall submit a report to Congress on the results of the survey described in paragraph (1).

(c) REPORT BY ITC- The International Trade Commission shall report annually to Congress on United States-China bilateral export and import statistics, including, to the extent practicable, reconciling any differences in United States-source and Chinese-source data.

SEC. 4. REPORT ON COMPLIANCE.

(a) IN GENERAL- Not later than 1 year after the People's Republic of China accedes to the World Trade Organization, and annually thereafter, the United States Trade Representative shall submit a report to Congress on China's compliance with its commitments made in connection with its accession to the World Trade Organization, including both multilateral commitments and any bilateral commitments made to the United States.

(b) PUBLIC PARTICIPATION- In preparing the report described in subsection (a), the United States Trade Representative shall seek public participation by publishing a notice in the Federal Register and holding a public hearing.

(c) CONTENT- The report described in subsection (a) shall include the results of monitoring China's compliance, and the specific conclusions reached by each Federal agency assigned responsibility for monitoring.

SEC. 5. ACTION BY COMMITTEES.

(a) SECTION 301 ACTION-

(1) IN GENERAL- Notwithstanding any other provision of law, the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives, after considering the report described in section 4 and holding hearings on the report--

(A) may, by majority vote of either committee, instruct the United States Trade Representative to take appropriate action pursuant to title III of the Trade Act of 1974 (19 U.S.C. 2411 et seq.), after initiating an investigation under section 301 of such Act to determine under section 304(a)(1) of such Act if--

(i) the rights of the United States under any trade agreement are being denied; or

(ii) an act, policy, or practice of the People's Republic of China--

(I) violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement; or

(II) is unjustifiable and burdens or restricts United States commerce; or

(B) may, by majority vote of both committees, instruct the United States Trade Representative to initiate action before the Dispute Settlement Body (as defined in section 121(5) of the Uruguay Round Agreements Act).

(2) ADVERSE INFERENCE- Section 304(a) of the Trade Act of 1974 (19 U.S.C. 2414(a)) is amended by adding at the end the following new paragraph:

`(5) If the foreign country against which an investigation is initiated under this chapter fails or refuses to cooperate in the investigation, the Trade Representative may draw an inference adverse to the interests of the country for purposes of making an affirmative determination under paragraph (1).'.

(b) INITIATION OF OTHER ACTION-

(1) IN GENERAL- Upon completion of an investigation described in subsection (a)(1)(B), if the United States Trade Representative determines that an act, policy, or practice of the People's Republic

of China) violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement (including the commitments made by the People's Republic of China as part of its accession to the World Trade Organization), the United States Trade Representative shall initiate an action before the Dispute Settlement Body of the World Trade Organization, unless there exists another, more effective action.

(2) CONSULTATION WITH CONGRESS- Before taking the action described in paragraph (1), the United States Trade Representative shall consult with Congress and provide Congress with the reasons for taking or not taking an action.

SEC. 6. SPECIAL WORLD TRADE ORGANIZATION REVIEW OF CHINA.

(a) IN GENERAL- It is the sense of Congress that there should be a special multilateral process at the World Trade Organization for conducting an annual review of the People's Republic of China's compliance with the commitments it makes as part of its accession to the World Trade Organization.

(b) USTR TO PROPOSE EXPANDED WTO REVIEW- The United States Trade Representative is directed to propose that--

(1) as part of the Trade Policy Review Mechanism of the World Trade Organization, a thorough review of China's trade policies be conducted each year;

(2) the Trade Policy Review Mechanism be significantly enhanced and expanded in connection with the review of the People's Republic of China; and

(3) the Trade Policy Review Mechanism of the People's Republic of China include onsite visits and active participation by representatives of World Trade Organization members.

SEC. 7. INSTITUTION-BUILDING IN CHINA.

(a) IN GENERAL- Not later than 90 days after the People's Republic of China accedes to the World Trade Organization, the President shall submit to Congress a plan for providing assistance to China to build the institutions necessary to carry out the obligations China has made as part of its accession to the World Trade Organization. The plan shall include personnel and budget requirements needed to provide assistance.

(b) MECHANISMS FOR PROVIDING ASSISTANCE- It is the sense of Congress that the United States should provide the assistance described in subsection (a) through--

(1) bilateral mechanisms; including nongovernmental organizations under contract to the Federal Government;

(2) if appropriate, multilateral mechanisms through the auspices of the World Trade Organization; and

(3) because United States businesses will be a primary beneficiary of China's compliance, cost-sharing and other cooperative measures with the private sector.

(c) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out the provisions of this section, the lesser of--

(1) $5,000,000 for each fiscal year; or

(2) an amount equal to one-tenth of one percent of the dollar value of the goods and services exported to the People's Republic of China during the fiscal year preceding the fiscal year for which the appropriation is made.

SEC. 8. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this Act other than section 7.

END