09 May 2000
Text: Rep. Levin Releases Draft Legislation on China Commission
(Commission would monitor compliance on rule of law issues) (2830)
Representative Sander Levin (Democrat of Michigan) released May 8 the
narrative of draft legislation that would be "part of the framework
for bringing China into the World Trade Organization (WTO)."
His idea is to set up a commission, similar to the Commission on
Security and Cooperation in Europe (CSCE), that would monitor China's
compliance with respect to labor market issues, rule of law issues,
and human rights.
Those issues have kept a significant part of the Democratic Party from
endorsing the Clinton Administration's plan to grant China permanent
Normal Trade Relations (NTR) status.
The vote in the Senate and House of Representatives on permanent NTR
status for China requires ending the application of Title IV of the
Trade Act of 1974 to China. It is scheduled for later this month.
Levin's proposed legislation to create a China Commission is separate
from the vote on permanent NTR.
The China Commission, Levin said, would be "an effective mechanism for
maintaining pressure on China with respect to labor market issues,
rule of law issues, and human rights."
The proposed commission would have 23 members, five appointed by the
President, and nine each by the Senate and the House of
Representatives.
Following is the text of the narrative of the draft legislation:
(begin text)
NARRATIVE OF DRAFT LEGISLATION FOR CHINA/PNTR FRAMEWORK
I. Congressional-Executive Commission on China
Proposal: As part of the framework for bringing China into the WTO,
the proposal will establish a Congressional-Executive Commission on
China. The Commission will consist of nine Members of each House, plus
five Presidential appointees.
The Commission will have three pillars within its scope. The first
pillar will be monitoring human rights in China (including religious
freedoms). The second pillar will be monitoring overall aspects of
labor market issues in China. The third pillar will be monitoring and
encouraging the development of rule-of-law and democracy-building in
China.
The Commission will submit to Congress and to the President an annual
report of its findings, including as appropriate WTO-consistent
recommendations for legislative and/or executive action. It will also
maintain lists of victims of human rights abuses in China. Finally,
the Commission will respond to information requests from individual
Members of Congress.
The model for this Commission is the Commission on Security and
Cooperation in Europe, a Congressional-Executive entity established in
1976 to monitor compliance by other countries with the provisions of
the Helsinki Final Act.
The CSCE experience indicates that a China Commission will be an
effective mechanism for maintaining pressure on China with respect to
labor market issues, rule of law issues, and human rights.
From its creation in 1976 to the end of the Cold War, the CSCE was one
of several important instruments for championing human rights,
democracy and rule of law in the countries of the former Soviet bloc.
Since the Cold War, the CSCE has monitored elections in former Soviet
bloc countries.
The strengths that the CSCE has exhibited include the following:
-- It has pulled together large amounts of information related to
human rights, regional security, and other issues, analyzed that
information, and communicated it to the Administration, Congress, and
the public in a manner that generally is considered impartial and
authoritative. Its credibility with the Administration and Congress
has given the CSCE a good deal of influence in shaping policy on
issues within its areas of expertise.
-- The CSCE has become a reliable liaison between the U.S. Government
and dissidents, human rights leaders, intellectuals and other citizens
of the countries that it monitors.
-- The CSCE has drawn attention to particular cases of human rights
violations. During the worst days of Soviet bloc repression, the
Commission brought cases to the attention of governments in the Soviet
bloc and worked to resolve them.
Based on the CSCE experience, there are several reasons to expect that
a China Commission will be an effective means of maintaining scrutiny
and pressure on China in the areas of human rights (including
religious freedom), worker rights, and rule of law:
-- First, a bipartisan standing Commission will institutionalize
Congressional examination of measures by the Government of China that
affect U.S. interests. Commitment to this task will be permanent and
concentrated, as opposed to sporadic and diffuse, as has been the case
under current law (i.e., annual reviews).
-- Second, the Commission will become an effective base from which to
mobilize support for particular improvements in China's policies and
practices. For instance, if the Commission spotlights particularly
egregious conduct by the Government of China, it will be able to rally
a bipartisan consensus for pressing China to change its conduct more
easily than an individual Member of Congress would otherwise be able
to do.
-- Third, as Chinese citizens gain greater access to the outside world
through the Internet and other modes of communication, the Commission
will become an important conduit between Chinese citizens, on the one
hand, and the U.S. Government and public, on the other. For instance,
victims of human rights abuses in China and their advocates in the NGO
community will be able to communicate directly with the Commission.
-- Fourth, the Commission will be a strong, effective, and unique
point of contact on China issues between Congress and the
Administration. Thus, as in the case of the CSCE, the Commission will
be used to highlight for the Administration issues of particular
concern to Congress. This will assist the Administration in deploying
its diplomatic and other foreign policy tools most effectively.
II. Legislating the China Product-Specific, Anti-Surge Safeguard
Background: The November 1999 Agreement between the United States and
China contains a product-specific safeguard, which will be included in
China's protocol of accession to the WTO. The safeguard permits the
United States and other WTO Members to provide relief to domestic
industries and workers, "where products of Chinese origin are being
imported into the territory of any WTO Member 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."
This special anti-surge safeguard will apply to China for a period of
12 years following China's accession to the WTO.
The China safeguard contains lower causation and injury standards than
ordinarily would apply between WTO Members. According to the
U.S.-China Agreement, 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." By contrast, under the U.S. law that
applies to other WTO Members (section 201 of the Trade Act of 1974),
the relevant inquiry is whether goods are being imported into the
United States "in such increased quantities as to be a substantial
cause of serious injury."
Issue: There is a need to spell out how the anti-surge safeguard in
the U.S.-China Agreement will be implemented as a matter of U.S. law.
Therefore, Congress should develop and write into law a procedure for
U.S. industries and workers to seek and obtain relief under the China
product-specific safeguard.
Proposal: Under the proposed legislation, 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 & Means Committee or Senate Finance Committee.
Within 60 days after receipt of the petition or request/motion, the
ITC would make a determination as to whether the subject imports are
causing or threatening market disruption. If the ITC determination is
affirmative, the President would be required to request consultations
with the Government of China. This would start a 60-day consultation
period, as required by the U.S.-China Agreement.
Twenty days after the ITC made an affirmative determination with
respect to market disruption (i.e., 80 days after receipt of the
petition or request/motion), the ITC would make a recommendation of
actions necessary to prevent or remedy the market disruption. Twenty
days later, the U.S. Trade Representative would publish a notice of
proposed action, seeking comments on the appropriateness of the
proposed action and whether it would be in the public interest. An
opportunity for hearing on that action would also be provided.
If the United States and China are unable to reach agreement within
the consultation period, then the President will 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.
The entire period from petition (or request/motion) to proclamation of
relief would be 150 days.
The proposal will make clear the standards for application of
Presidential discretion in providing relief to injured industries and
workers. If the ITC makes an affirmative determination on market
disruption, there will 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 substantially out of proportion to the benefits of such
action, or that such action would cause serious harm to the national
security of the United States.
The proposal also will 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 preliminary determination on market disruption and
critical circumstances on an abbreviated schedule. After receiving an
affirmative preliminary ITC determination, the President would be
required to determine whether to provide such relief on a similarly
abbreviated schedule.
Finally, the proposal will 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.
Under the proposal, if another WTO Member requests consultations with
China under the product-specific safeguard, the U.S. Customs Service
would begin monitoring imports of subject products into the United
States. If, on the basis of this monitoring or other credible
evidence, it is determined that an action by another WTO Member
threatens or causes significant trade diversion, the USTR will 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 USTR will
publish notice of proposed action and provide an opportunity for the
public to provide evidence and views on the proposed action. After
receiving such views, the President shall determine, within 20 days,
what action, if any, to take to prevent or remedy the trade diversion.
III. Continuing Oversight of China's Compliance With WTO Obligations
A. Annual Report on China's Compliance With WTO Obligations
Proposal: This provision will require the U.S. Trade Representative to
issue an annual report on China's compliance with WTO obligations. The
report will cover compliance by the People's Republic of China with
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.
The report's contents will be more comprehensive than the China
section in USTR's National Trade Estimate Report on Foreign Trade
Barriers. The report will be a complete analysis of Chinese compliance
with the implementation of obligations. By highlighting where China is
meeting obligations and where it is falling short, the report will be
a guide to where and how to commit enforcement resources.
B. Annual WTO Review of China's Compliance With WTO Obligations
Proposal: In negotiating China's Protocol of Accession, the
Administration will press for a mechanism for reviewing China's
compliance with WTO obligations on an annual basis.
Given the early stages of development of a free market and rule of law
in China, it is necessary that China be given special scrutiny within
the WTO. Paired with the annual report by the USTR (described in the
immediately preceding section), there will be two mechanisms to ensure
strong oversight of China's trade record.
IV. Task Force on Prohibition of Importation of Products of Forced or
Prison Labor
Proposal: The import of goods made by forced or prison labor into the
United States is prohibited by U.S. law (section 307 of the Tariff Act
of 1930), consistent with the GATT 1994. Article XX of the GATT allows
countries to take action without retaliation to prohibit import of
goods made by prison labor. The proposed provision will instruct the
President to establish an interagency task force, chaired by the
Secretary of the Treasury or his designee, to monitor and promote
effective enforcement of this prohibition, including compliance by
Chinese and other foreign exporters. The task force will include
officers and employees from the Departments of Treasury, Commerce,
Labor, and other agencies. The task force will coordinate closely with
the U.S. Customs Service to promote maximum effectiveness of Customs
enforcement of Section 307 of the Tariff Act of 1930 in the following
specific areas:
1) investigations of allegations of forced or prison labor imports;
2) working with the Chinese government and other foreign governments
to arrange visit to suspected prison labor facilities;
3) providing technical assistance to China and other foreign
governments to ensure that forced or prison labor goods are not
imported into the U.S.;
4) monitoring U.S. ports for forced or prison labor goods; and
5) engaging in any other activities necessary to stringently enforce
section 307 of the Tariff Act of 1930.
The task force will strengthen the ability of the U.S. Government to
stop imports of goods made by forced or prison labor. The members of
the task force will work with the Chinese Government and other foreign
governments to ensure that this prohibition is strictly enforced.
V. Monitoring and Enforcement of Foreign Government Compliance With
Trade Agreements
Proposal: This provision calls for additional resources to be
allocated to the Departments of Commerce, Agriculture, and State, and
to the Office of the U.S. Trade Representative to strengthen the
ability of the United States to monitor and enforce Chinese and other
foreign government compliance with trade agreements. The provision
will include resources to promote the following activities, among
others:
1) staffing to monitor China's compliance with the WTO Agreements;
2) defend U.S. safeguard, antidumping, and countervailing duty
measures and U.S. policy to maintain strong trade remedies;
3) enforce U.S. trade laws, including import monitoring, subsidy
enforcement, and prompt antidumping and countervailing duty
investigations under Title VII of the Tariff Act of 1930;
4) create a Trade Law Technical Assistance Center to assist small and
medium sized businesses, workers, and unions with preparation of
petitions seeking remedies for alleged violations of trade laws;
5) create an Overseas Compliance Program, that will monitor compliance
with international trade obligations by foreign governments;
6) commit additional funds to investigate, prosecute and defend cases
before the WTO and NAFTA tribunals;
7) commit funds and resources to analyze the impact of trade on the
economy of the United States;
8) increase legal and technical expertise in areas covered by trade
agreements and U.S. trade law, including food safety and
biotechnology.
The wide-ranging provisions will substantially increase the ability of
the U.S. Government to monitor and enforce Chinese and other foreign
government obligations in international trade agreements. In addition
to calling for funds for enforcement, the framework calls for legal
and technical assistance for companies and workers pursuing
antidumping and countervailing remedies.
VI. Technical Assistance to Develop Rule of Law in Commercial and
Labor Markets in China
Proposal: This proposal calls for the allocation of resources to the
Departments of Commerce, State, and Labor to provide training and
technical assistance in China for purposes of developing the rule of
law with respect to commercial and labor market standards. The
Departments will establish programs to assist China in bringing its
laws into compliance with international requirements, including WTO
rules and ILO conventions, and in developing processes to enforce the
rule of law.
Program staff will attempt to develop programs with legislators,
administrators, judges, lawyers, businesses, and workers in China to:
help to draft laws and regulations; conduct seminars and workshops on
effective administration and enforcement; support the establishment of
law journals and other publications to promote discussion of legal
issues; and facilitate educational and worker exchanges between the
United States and China. Program staff will coordinate their efforts
with international organizations, such as the ILO, WTO, and
international financial institutions, and non-governmental
organizations pursuing similar objectives.
VII. Accession of Taiwan to WTO
Proposal: This provision will express the sense of the Congress that
the WTO General Council should approve both the PRC's accession and
Taiwan's accession at the same General Council session.
May 8, 2000
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://uninfo.state.gov)
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