Sec. 2. Findings; sense of Congress
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Congress makes the following findings: The United States grants normal trade relations status to every country in the world except for Belarus, Cuba, North Korea, and the Russian Federation. Merchandise originating from a country that is a beneficiary of normal trade relations status is subject to duties at the rates set forth in column 1 of the Harmonized Tariff Schedule of the United States (in this Act referred to as the HTS ). Merchandise originating from a country that is not a beneficiary of normal trade relations status is subject to duties at the rates set forth in column 2 of the HTS.
The United States Schedule of Concessions on goods to the World Trade Organization lists rates of duty the United States is expected to extend to all other members of the World Trade Organization. As of the date of the enactment of this Act, the rates of duty under the United States Schedule of Concessions on goods, on a simple average basis, are the lowest among all members of the World Trade Organization, at 3.4 percent. The duty concessions in the United States Schedule of Concessions align with the duties set forth in column 1 of the HTS.
The People's Republic of China was granted normal trade relations status in February 1980, pursuant to title IV of the Trade Act of 1974 ( 19 U.S.C. 2431 et seq. ), making merchandise from the People's Republic of China eligible for the duties set forth in column 1 of the HTS. From 1980 until 2001, the People's Republic of China’s normal trade relations status was subject to compliance with freedom-of-emigration requirements under section 402 of the Trade Act of 1974 ( 19 U.S.C. 2432 ) (commonly referred to as the Jackson-Vanik amendment ).
In 2001, Public Law 106–286 (114 Stat. 880) was passed to make permanent the People's Republic of China’s normal trade relations status. Entries under section 321 of the Tariff Act of 1930 ( 19 U.S.C. 1321 ) became an avenue of commerce by way of regulation, when in 1994 the Department of the Treasury and the Customs Service issued an interim rule expanding the class of persons deemed eligible to make informal entries under that section, and exempted shipments by those persons from the requirement to file an entry summary.
In both litigation challenging the interim rule and comments on the final rule published the following year, customs brokers warned that the Customs Service was abrogating its responsibility to enforce laws, but their warnings were not heeded. In 2018, following an investigation under title III of the Trade Act of 1974 ( 19 U.S.C. 2411 et seq. ) into the theft of intellectual property by the People's Republic of China, additional duties affecting approximately one-third of exports from the People's Republic of China to the United States were imposed.
On January 15, 2020, the United States and the People's Republic of China signed the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic Of China, which required structural reforms and other changes to the economic and trade regime of the People's Republic of China. The People's Republic of China, however, did not comply with the agreement. In December 2022, the United States-China Economic and Security Review Commission’s 2022 Annual Report asserted as follows:
After many years of attempting to engage China and persuade it to abandon its distortive trade practices, it is clear this approach has not been successful. The United States has an opportunity to develop a new strategy based on building resilience against China’s state capitalism and blunting its harmful effects rather than seeking to change it. With the WTO unable to introduce meaningful new rules and procedures, the United States can pursue approaches that advance its own national interests as well as cooperate with like-minded partners. .
The Commission’s 2022 Annual Report recommended that the Administration prepare a report to assess China’s compliance with the terms and conditions of the 1999 Agreement on Market Access between the People’s Republic of China and the United States of America . The Commission recommended that [i]f the report concludes that China has failed to comply with the provisions agreed to for its accession to the WTO, Congress should consider legislation to immediately suspend China’s Permanent Normal Trade Relations
(PNTR)treatment . In February 2023, the Office of the United States Trade Representative released a report entitled 2022 Report to Congress on China’s WTO Compliance . In releasing that report, United States Trade Representative Katherine Tai noted, More than 20 years after it acceded to the WTO, China still embraces a state-led economic and trade approach that runs counter to the open, market-oriented principles endorsed by all members of the organization. China’s approach makes it an outlier and continues to cause serious harm to workers and businesses in the United States and around the world. . Since the entry of the People's Republic of China into the WTO, the United States has lost tens of thousands of factories, millions of manufacturing jobs, and trillions of dollars of intellectual property. The United States now suffers chronic annual trade deficits that exceed $1,000,000,000,000, primarily driven by the predatory trade practices of the People’s Republic of China. There is no mechanism in the Agreement establishing the World Trade Organization, nor any of the annexed agreements, to suspend or expel a member government that has flouted the principles and norms underpinning the Agreement. The accession of advanced economies governed by autocratic, anti-American governments to the World Trade Organization has enriched those governments while destabilizing international relations. The ability of the United States to act in concert with allies and partners to strengthen resilient supply chains free of reliance on or interference from adversarial, autocratic governments is hampered by the United States Schedule of Concessions on goods as currently expressed. It is the sense of Congress that— continued treatment of the People's Republic of China as a beneficiary of normal trade relations status poses an unacceptable threat to national security and undermines efforts to promote resilient supply chains and economic integration with allies of the United States; and the United States Schedule of Concessions on goods to the World Trade Organization should be modified to accommodate the duty rates set forth in column 2 of the HTS, so that the United States may deny normal trade relations status to another member of the World Trade Organization as warranted without breaching the duty concessions enumerated in the United States Schedule of Concessions.
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- Pub. L. 106-286
- 114 Stat. 880
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Sec. 2
Findings; sense of Congress
Pub. L.Pub. L. 106-286
Stat.114 Stat. 880
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