Voting on NTR for China Again in 2001, and Past Congressional Decisions

Voting on NTR for China Again in 2001, and Past Congressional Decisions

Order Code RS20691
Updated July 17, 2001
CRS Report for Congress
Received through the CRS Web
Voting on NTR for China Again in 2001, and
Past Congressional Decisions
Kerry Dumbaugh
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division
Summary
Since 1990, Congress has faced an annual, contentious decision on whether, and
under what conditions, to renew normal trade relations (NTR) status with China for
another year. This annual exercise occurred because under U.S. law, China’s NTR status
is temporary, and the President has to recommend its renewal each year by June 3. In
2000, the 106th Congress considered and passed H.R. 4444 (P.L. 106-286), which would
eliminate the annual NTR renewal process and grant permanent NTR to China. But this
Act only grants permanent NTR to China once it joins the World Trade Organization.
Since this has not yet happened, President Bush on June 1, 2001, was compelled to
recommend another temporary extension of China’s NTR status for one year in order for
it to continue uninterrupted. The NTR renewal is subject to enactment of a joint
resolution of disapproval by Congress. Such a joint resolution, H.J.Res. 50, was
introduced on June 5, 2001, by Representative Dana Rohrabacher. The Ways and Means
Trade Subcommittee reported the resolution adversely on July 12, 2001, and the House
rejected the resolution on July 18, 2001, by a vote of 259-169.
Background: Congressional Actions, 1989-2000
Since 1989, the U.S. policy debate over China’s most-favored-nation (MFN) status
(renamed “normal trade relations,” or NTR, under U.S. law in 1998) has undergone
several transformations. The issue was essentially irrelevant in the 1980s, when annual
extension of MFN to China was nearly automatic. In 1989, the year of the Tiananmen
Square crackdown, no resolution was even introduced that would have disapproved or put
further conditions on China’s MFN status eligibility. But by 1990, Congress and the Bush
Administration were clashing repeatedly over the direction of post-Tiananmen China
policy. Administration officials often blamed Congress for being “obstructionist” and
“partisan,” while Members of Congress often criticized the President for ignoring
congressional initiatives and being too accommodating toward Beijing. Much of this
debate was carried out through the annual process of renewing China’s MFN status.
The MFN debate reached a zenith in the 102nd Congress, with the House passing joint
resolutions disapproving MFN for China in both 1991 and 1992. (The Senate has never
Congressional Research Service ˜ The Library of Congress

CRS-2
passed a relevant joint resolution of disapproval.) The primary focus of the debate during
these years, however, was not whether to deny MFN status for China altogether, but
whether to place new human rights conditions on China’s MFN eligibility. In both
sessions, the House and Senate jointly passed legislation that would have done the latter.
Both times, President Bush vetoed the legislation, and while the House voted in both cases
to override, the Senate did not have the votes to do so in either instance.
In 1993, newly elected President Bill Clinton announced he would link China’s MFN
status to human rights progress beginning in 1994. Although the President reversed
himself in 1994, his 1993 decision appears to have been a pivotal catalyst in the declining
importance of MFN status as a tool with which to influence China policy. Since 1993,
neither the House nor the Senate has passed legislation to deny or further restrict China’s
MFN trade status. Instead, Members have turned to legislative alternatives, most of which
have focused on more specific directions for U.S. policy and more targeted sanctions on
China’s activities.1 These alternatives have included legislation concerning prison
conditions in China and prison labor exports; coercive abortion practices; religious
freedom; China’s missile proliferation activities; Radio Free Asia broadcasting; China’s
participation in multilateral institutions; allegations of Chinese espionage against the
United States; and the activities of China’s military and intelligence services. The 105th
Congress was particularly active, considering a package of legislation in those areas.2
House versus Senate Actions. Throughout the past decade, the House was the
more active body in considering legislation affecting China’s MFN/NTR status. The
House voted on joint resolutions disapproving China’s MFN/NTR status ten times in the
last ten years – every year since 1990 – and three times voted in favor of disapproving
China’s MFN status (in 1990, 1991, and 1992). The House also was the more active body
on “alternative” measures relating in some way to China’s trade status, voting in favor of
six such measures (as opposed to two for the Senate) over the past decade. The Senate,
on the other hand, has never taken a recorded vote on a joint resolution of disapproval for
China’s MFN/NTR status. In fact, the Senate considered joint resolutions of disapproval
only once in the past ten years: on July 18, 1991, by unanimous consent, the Senate
elected to postpone consideration of both the House and Senate joint resolutions on that
subject. But the Senate is on record twice with what may be seen as symbolic “test votes”
of Senate sentiment on China’s MFN/NTR status: in a recorded vote in 1997, the Senate
rejected a non-binding amendment to a Foreign Operations Appropriations bill which
stated that China’s MFN status should be revoked; and in a recorded vote in 1999, the
Senate rejected a motion to discharge the Senate Finance Committee from consideration
of a joint resolution of disapproval. (See the table that follows.)
1 In the 104th Congress, the House passed H.R. 2058, the “China Policy Act of 1995,” and H.Res.
461, legislation concerning congressional hearings on China. Neither restricted China’s trade
status.
2 See CRS Report RL30350, China and the 105th Congress: Policy Issues and Legislation, 1997-
1998. On July 22, 1998, the 105th Congress also passed legislation (P.L. 105-206) which replaced
the term “most-favored-nation” in certain U.S. statutes with the term “normal trade relations,” or
NTR . This is now how this trade status is referred to in the United States, although the rest of the
international community still refers to this status as MFN.

CRS-3
Table 1. Congressional Consideration of MFN for China: 1989-1999
Disapproval
Year
Final Status
Alternate bills
Final Status
Res.
1989
None
—
None
—
1990
H.J.Res. 647
Passed House 10/18 (247-174)
H.R. 4939
Passed House 10/28 (384-30)
1991
H.J.Res. 263
Passed House 7/10 (223-204)
H.R. 2212
Passed House 7/10 (313-112)
Senate Postponed 7/18,
Unanimous Consent
Conference Report H.Rept. 102-392 passed House 11/27
(409-21)
S.J.Res. 153
Senate Postponed 7/18,
S. 1367
Passed H.R. 2212 in lieu 7/18 (55-44)
Unanimous Consent
1992
H.J.Res. 502
Passed House 7/21 (258-135)
H.R. 2212
Conference Report H.Rept. 102-392 passed Senate 2/25 (59-39)
Vetoed by President 3/2
House override vote 3/11 (357-61)
Senate override vote 3/18 (60-38) - veto sustained
H.R. 5318
Passed House 7/21 (339-62)
H.R. 5318 vetoed by President, 9/28
Senate amended with text of S. 2808,
House override vote 9/30 (345-74)
passed by voice vote, 9/14
Senate override vote 10/1 (59-40) - veto sustained
S. 2808
House passed Senate version 9/22, voice
vote
1993
H.J.Res. 208
House rejected 6/8 (105-318)
H.R. 1835
No action
S. 806
1994
H.J.Res. 373
House rejected 8/9 (75-356)
H.R. 4590
Amended to impose no conditions, then passed House 6/8 (280-152)
1995
H.J.Res. 96
House tabled 7/20 (321-107)
H.R. 2058
Passed House 7/20 (416-10)
S.J.Res. 37
—
1996
H.J.Res. 182
House rejected 6/27 (141-286)
H.Res. 461
Passed House 6/27 (411-7)
S.J.Res. 56
—
1997
H.J.Res. 79
House rejected 6/24 (173-259)
—
—
S.J.Res. 31
—
*(S.Amdt. 890 expressed the sense of the Senate that China’s MFN status should be revoked. It was
S.Amdt. 890*
Senate rejected 7/16 (22-77)
offered as non-binding language to S. 955, the FY1998 Foreign Operations Appropriations bill.)
1998
H.J.Res. 121
House rejected 7/22 (166-264)
—
—
1999
H.J.Res. 57
House rejected 7/27 (170-260)
__
__
S.J.Res. 27
Senate rejected motion to
—
—
discharge committee 7/20 (12-87)
2000
H.J.Res. 103
House rejected 7/18 (147-281)
H.R. 4444
House passed 5/24 (237-197)
Signed by President on October 10, 2000, as P.L. 106-
286, giving China Permanent NTR upon accession to
—
—
S. 2277
Senate passed H.R. 4444 on 9/19 (85-
WTO
13)

CRS-4
China and PNTR: Congressional Action
Several proposals were considered by the 106th Congress pertinent to China’s future
trade status. On March 8, 2000, President Clinton submitted to Congress a proposal to
terminate the application of Title IV of the Trade Act of 1974 to China upon China’s
accession to the World Trade Organization (WTO). In effect, the proposal granted
permanent NTR status to China rather than subjecting that status to annual renewal, giving
China the same trade status the United States gives to all but a handful of other countries,
without any annual review process or restrictions applying. Subsequently, the chairmen of
the relevant House and Senate committees – Representative Bill Archer of the House
Ways and Means Committee, and Senator William Roth of the Senate Finance Committee
– introduced legislation encompassing the President’s request (H.R. 4444 and S. 2277,
respectively).
Since current U.S. law continued to apply absent congressional enactment of
permanent NTR (PNTR), China’s NTR status was scheduled to expire on July 3, 2000.
For this reason, President Clinton, on June 2, 2000, had to recommend another temporary
extension of China’s NTR status for one year. In response to the President’s
recommendation, Representative Dana Rohrabacher introduced a joint resolution
disapproving the one-year extension, H.J.Res. 103. The House rejected it on July 18,
2000, making Senate consideration moot.
House Consideration, H.R. 4444 (Archer). As introduced on May 15, 2000,
H.R. 4444 was a simple restatement of the President’s March 8, 2000 proposal to extend
PNTR to China upon its accession to the WTO. Since then, however, the bill has been
substantially expanded and amended to include other provisions. In mark-up on May 17,
2000, the Ways and Means Committee adopted an amendment to the bill to include
detailed “import surge” protections, giving the President authority to increase duties on
selected Chinese products if their importation increased to such an extent as to threaten
market disruption to U.S. producers. This “anti-surge” language was originally part of a
comprehensive legislative proposal, crafted by Representatives Doug Bereuter and Sander
Levin, that was designed to enhance the PNTR bill’s prospects. The Bereuter/Levin
proposal (so-called “parallel legislation”) was first announced on May 9, 2000 and further
refined in subsequent days to address continuing concerns of House leaders. In its final
version, Bereuter/Levin proposed establishing a more comprehensive China/PNTR
framework for China’s WTO accession that would address human rights and other issues
of concern to U.S. policymakers. In mark-up, the House Ways and Means Committee
adopted an amendment to H.R. 4444 containing only the anti-surge language of the
Bereuter/Levin proposal. The Committee then reported the amended H.R. 4444 favorably
by the substantial margin of 34-4 (H.Rept. 106-632).3
On May 23, 2000, the full House amended H.R. 4444 further by adding the rest of
the Bereuter/Levin language. That change was made possible under a special procedure
by the House Rules Committee, in which adoption of the rule (H.Res. 510) automatically
3 “...the Committee is concerned that rejecting the president’s recommendation to graduate China
from the Jackson-Vanik amendment...would undermine U.S. leverage to bring about change in
China, while at the same time sacrificing the interests of U.S. exporters, workers, and consumers.”
House Ways and Means Committee Report to H.R. 4444, H.Rept. 106-632.

CRS-5
amended H.R. 4444 with the language of the Bereuter/Levin proposal. (The full House
adopted the rule by a vote of 294-136.) As further amended by the House, then, H.R.
4444 establishes a Congressional-Executive Commission on China to monitor human
rights, labor standards, religious freedom, and rule-of-law progress in China; requires
continual review of and reporting on China’s compliance with its WTO obligations;
establishes a task force on prohibiting prison labor imports; urges that Taiwan’s accession
to WTO be considered immediately after China’s; and authorizes $99 million in FY2001
for additional news broadcasts into China. The House passed the amended H.R. 4444 on
May 24, 2000, by a vote of 237-197.
Senate Consideration, H.R. 4444/S. 2277 (Roth). As with the House bill, the
Senate PNTR bill introduced on March 23, 2000 (S. 2277) was identical to the President’s
March 8, 2000 proposal to extend PNTR to China upon WTO accession. The Senate
Finance Committee marked up the Senate bill on May 17, 2000 – the same day the House
Ways and Means Committee considered its version – and favorably reported a clean bill
by a vote of 19-1 (S.Rept. 106-305). No amendments were considered. In the weeks
following that, however, Senate consideration became more problematic.
First, with time
running short in the 106th Congress, Senate leaders elected to focus on the House-passed
bill, H.R. 4444, since Senate passage of the House bill (without amendment) would avoid
the delay and further controversy of a conference committee. After invoking cloture on
July 27, 2000 (by a vote of 86-12), the Senate resumed consideration of H.R. 4444 when
it reconvened after the August recess. On September 7, the Senate voted (92-5) to
proceed to consideration of the bill.
Although the Administration and the bill’s proponents had advocated straightforward
passage of a clean H.R. 4444, a number of Senators sponsored amendments to the bill on
a range of human rights and other issues. On September 7, 2000, the Senate rejected 3
such amendments: a Hollings amendment relating to the terms of China’s WTO accession
(rejected 13-81); a Byrd amendment regarding export of clean energy technology to China
(rejected 31-65); and a Wellstone amendment on religious freedom in China (rejected 28-
69). The Senate also rejected all additional amendments.
The bill’s supporters were most concerned about possible consideration of S. 2645,
the “China Non-Proliferation Act,”introduced on May 25, 2000 by Senators Fred
Thompson and Robert Torricelli.4 As introduced, the Thompson/Torricelli bill would have
established annual presidential review of China’s nuclear non-proliferation record, and
would have required the President to take action – including suspension of U.S. exports
to suspect Chinese companies – should he determine that nuclear-related transfers have
occurred. Administration officials negotiated with the bill’s sponsors in an effort to make
changes in the legislation (in part by expanding the countries covered under the bill), and
the bill’s sponsors accommodated many of these concerns. On September 13, 2000,
however, the Senate voted 65-32 to table a Thompson amendment to H.R. 4444 relating
to non-proliferation. This cleared the way for final passage of H.R. 4444 on September
19, 2000, by a vote of 83-15. The President signed the bill into law the same day it was
presented to him, on October 10, 2000 (P.L. 106-286).
4 A similar bill, H.R. 4829, was introduced July 13, 2000, by Representative Ben Gilman.

CRS-6
Action in the 107th Congress
In the aftermath of the collision on April 1, 2001, of a Chinese jet fighter with a U.S.
navy surveillance plane over the South China Sea, the 107th Congress introduced
legislation Congress relating to China’s NTR status. H.R. 1467, introduced on April 4,
2001, by Representative Duncan Hunter, would change U.S. law to prohibit the extension
of normal trade relations to China at any time in the future. H.R. 1497, also introduced
on April 4, 2001, by Representative John Murtha, would revoke the PNTR language
enacted last year in P.L. 106-286, leaving current law on annual extensions in place. On
June 1, 2001, President Bush was compelled to recommend renewal of China’s NTR
status again this year because the PRC has not yet joined the WTO. In response to that
presidential action, on June 5, 2001, Representative Dana Rohrabacher introduced
H.J.Res. 50, a joint resolution disapproving the President’s recommendation. The House
Ways and Means Committee reported the measure adversely on July 12, 2001 (H.Rept.
107-145), and the full House rejected the measure on July 18, 2001, by a vote of 269-159.
Implications
Proponents of PNTR for the PRC claimed that the measure was necessary to help
rationalize the bilateral trade relationship and insulate it to a degree from other
contentious, non trade-related issues. The removal of the annual trade certification would
also bring U.S. trade laws into conformity with WTO agreements; if U.S. trade treatment
of China remained subject to the annual certification, the United States likely would have
to invoke the WTO’s non-application clause (Article XIII) to avoid being found in
violation of WTO rules. In that case, WTO agreements technically would not apply
between the two countries. Finally, China’s actual admission to the WTO is not dependent
on its trade treatment by the United States.
Opponents of granting PNTR to China argued that the measure removed an
important source of U.S. leverage with China (and an important source of congressional
leverage with the White House) at a time when China seemed to have increased its human
rights abuses, its aggressiveness toward Taiwan, and its hostility to the United States.
China should not be rewarded for such activities by having this important U.S. leverage
removed. These same arguments have been used in support of the NTR/PNTR-related
legislation introduced in the 107th Congress.
In a larger sense, the eventual elimination of the annual NTR renewal for China is not
likely to mean that controversies in U.S.-China relations or disagreements among U.S.
policymakers will vanish. On the contrary, controversies and policy battles have increased
on other issues even while the debate over China’s trade status over the past decade has
faded in importance. This suggests that those who are suspicious of Beijing’s intentions
or who argue for a more cautious U.S. approach toward the PRC are likely to continue
efforts to move Congress and the Administration to more specific, more targeted
legislative measures as policy tools. Those who opposed unconditional PNTR for China
will undoubtedly continue to place high priority on policy measures that would assure
Taiwan’s security, protest religious persecution, improve labor rights, help Tibet, and
enforce PRC compliance with trade agreements. This being the case, the U.S. policy
agenda on China is likely to remain fractionalized and complex, more likely to be
characterized by a series of separate and unrelated policy measures rather than an
overarching, cohesive policy framework.