House Passes China Trade Enforcement Bill

The House had previously failed to pass H.R. 3283 under a suspension of the rules, which required a two-thirds majority for passage. (See ITT's Online Archives or 07/27/05 news, 05072799 1, for BP summary.)

(Although the House has passed H.R. 3283, it is not in effect. Generally, in order for a bill to be implemented, identical versions of that bill must be passed by both the House and Senate and then the bill must be approved (enacted) by the President.)

The following are highlights of H.R. 3283 as passed by the House, with the amendments adopted by the House prior to passage noted. H.R. 3283 would:

a. authorize application of U.S. countervailing duty law to nonmarket economies such as China;

b. suspend for three years the availability of bonds for new shippers in antidumping (AD) cases and instead require cash deposits and require a report on whether this suspension should be extended beyond the three-year period, etc.;

c. amend the definition of countervailing duty so it states that, with respect to China, if the administering authority encounters special difficulties in calculating the amount of a subsidy benefit under 19 USC 1677(5)(E), such 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, H.R. 3283 states that, where practicable, the administering authority should adjust such prevailing terms and conditions before using the terms and conditions prevailing outside China;

(When the House amended H.R. 3283, it added the words "where practicable." According to a July 27, 2005 Textile Development Memo from the U.S. Association of Importers of Textiles and Apparel (USA-ITA), this amendment added a caveat so that third country data should be used "where practicable," which may increase the likelihood that the Commerce Department will use third country data rather than trying to adjust Chinese data.)

d. in applying the countervailing statute to nonmarket economy countries, ensure that there is no double counting of CV subsidies in AD orders, etc.;

e. require a report on duty collection problems, including fraudulent activities intended to avoid payment of duties, and analysis of proposed solutions;

f. require comprehensive monitoring of China's compliance with its obligations regarding intellectual property rights, market access for U.S. goods, services, and agriculture, and accounting of Chinese subsidies; require either biannual or monthly reports to Congress on China's compliance with such obligations; and require, if the President determines that China has not met all of the specified intellectual property rights obligations, the collection of evidence of such violations for use in a World Trade Organization (WTO) dispute settlement proceedings;

g. require the Administration to provide Congress with reports on currency manipulation by foreign countries;

h. authorize specific fiscal year (FY) 2006 and 2007 appropriations for the Office of the U.S. Trade Representative and the International Trade Commission (ITC);

i. require the ITC to carry out a comprehensive study on trade and economic relations between the U.S. and China; and

j. express the sense of Congress that the USTR should determine which of its current positions is most responsible for carrying out trade enforcement duties and assign that position, in addition to any other title, the title of Chief Enforcement Officer.

(This provision (j) was a new addition to the amended version of H.R. 3283.)

(See ITT's Online Archives or 07/21/05 news, 05072105, for BP summary of H.R. 3283 as introduced in the House.)

H.R. 3283, as amended and passed by the House, available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h3283eh.txt.pdf.