[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6636 Introduced in House (IH)]
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115th CONGRESS
2d Session
H. R. 6636
To promote United States-Mongolia trade by authorizing duty-free
treatment for certain imports from Mongolia, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 26, 2018
Mr. Yoho (for himself, Ms. Titus, Mr. Young of Alaska, Mr. Meadows, Mr.
Fitzpatrick, Ms. Stefanik, Mr. Polis, Mr. Price of North Carolina, Mr.
Keating, and Mr. Evans) introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To promote United States-Mongolia trade by authorizing duty-free
treatment for certain imports from Mongolia, and for other purposes.
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 ``Mongolia Third Neighbor Trade Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) In 1992, Mongolia adopted a constitution establishing a
parliamentary democracy, becoming the only nation in Asia to
transition from communism to democracy. Mongolia shares land
borders with only the Russian Federation and the People's
Republic of China, nations which the U.S. national security
strategy states ``want to shape a world antithetical to U.S.
values and interests.'' With a large land area and a population
of only 3 million, Mongolia is the world's most sparsely
populated country, and Mongolia's sovereignty is thought be at
risk from the overwhelming influence of its much larger and
more populous neighbors.
(2) Mongolia has shown its commitment to a ``third
neighbor'' relationship with the United States by sending
troops to support U.S. combat operations in Iraq and
Afghanistan, and has a strong record of troop contributions to
international peacekeeping missions. Mongolia's success as a
democracy, strategic location, sovereignty, territorial
integrity, and ability to pursue an independent foreign policy
are highly relevant to the national security of the United
States.
(3) Mongolia describes the United States as its most
important ``third neighbor,'' but U.S.-Mongolia trade is
substantially lower than many other bilateral trading
relationships, and trade has declined in recent years. Total
trade in 2012 measured $707 million, but in 2017 the United
States exported only $82.2 million in goods to Mongolia, and
imported only $9.4 million in goods from Mongolia.
(4) The cashmere trade is particularly important to
Mongolia's economy, but while Mongolia produces over a third of
the world's raw cashmere, it produces few finished cashmere
products. Most Mongolian raw cashmere is exported to China, and
the United States buys nearly all of its cashmere products from
China. Preferential treatment for United States imports of
certain Mongolian products, including cashmere products, would
benefit the United States by facilitating increased trade with
Mongolia and reducing U.S. imports of Chinese cashmere
products.
(5) Preferential treatment for United States imports of
such Mongolian products would benefit Mongolia by reducing
Mongolia's economic dependence on China and promoting the
development of Mongolia's garment industry. Experts have
expressed concern that Mongolia is unduly economically reliant
on China, with more than 80 percent of Mongolia's exports
flowing to China annually, largely from extractive industries.
Industry leaders believe that China's trade practices hinder
the diversification of Mongolia's economy and the emergence of
a domestic Mongolian garment industry, because Chinese buyers
only purchase raw Mongolian cashmere, not finished garments.
(6) The development of Mongolia's garment industry would
also promote women's employment and empowerment. Women have
historically participated in Mongolia's garment industry at
high rates, and the garment industry has historically provided
safe and stable employment for women in Mongolia.
SEC. 3. DUTY-FREE TREATMENT FOR CERTAIN IMPORTS FROM MONGOLIA.
(a) In General.--The President is authorized to provide duty-free
treatment for any article described in subsection (b) that is imported
directly from Mongolia into the customs territory of the United States.
(b) Article Described.--
(1) In general.--An article is described in this subsection
if--
(A) the article is the growth, product, or
manufacture of Mongolia;
(B) the article is classified under chapter 51, 57,
60, 61, 62, 63, or 94 of the Harmonized Tariff Schedule
of the United States;
(C)(i) the article is an apparel or textile article
made of fabrics or fibers containing not less than 23
percent by weight of cashmere; or
(ii) the sum of the cost or value of cashmere
components of the article is not less than 51 percent
of the appraised value of the article at the time it is
entered;
(D) in the case of an article that is a textile or
apparel article, the yarn and fabric used to
manufacture the article are produced in Mongolia;
(E) the sum of the cost or value of the materials
produced in, and the direct costs of processing
operations performed in, Mongolia or the customs
territory of the United States is not less than 35
percent of the appraised value of the article at the
time it is entered; and
(F) the President determines that the article is
not import-sensitive, after receiving the advice of the
United States International Trade Commission in
accordance with section 503(e) of the Trade Act of 1974
(19 U.S.C. 2463(e)).
(2) Exclusions.--An article shall not be treated as the
growth, product, or manufacture of Mongolia for purposes of
paragraph (1)(A) by virtue of having merely undergone--
(A) simple combining or packaging operations; or
(B) mere dilution with water or mere dilution with
another substance that does not materially alter the
characteristics of the article.
(c) Verification With Respect to Transshipment for Textile and
Apparel Articles.--
(1) In general.--Not later than April 1, July 1, October 1,
and January 1 of each year, the Commissioner of U.S. Customs
and Border Protection shall verify that textile and apparel
articles imported from Mongolia to which duty-free treatment is
extended under this Act are not being unlawfully transshipped
into the United States.
(2) Report to president.--If the Commissioner determines
pursuant to paragraph (1) that textile and apparel articles
imported from Mongolia to which duty-free treatment is extended
under this Act are being unlawfully transshipped into the
United States, the Commissioner shall report that determination
to the President.
(d) Eligibility Requirements.--Duty-free treatment may be provided
under this Act only if the President determines and certifies to
Congress that--
(1) Mongolia meets the requirements set forth in paragraphs
(1), (2), and (3) of section 104(a) of the African Growth and
Opportunity Act (19 U.S.C. 3703(a)); and
(2) after taking into account the factors set forth in
paragraphs (1) through (7) of subsection (c) of section 502 of
the Trade Act of 1974 (19 U.S.C. 2462), Mongolia meets the
eligibility requirements of such section 502.
(e) Withdrawal, Suspension, or Limitation of Preferential
Treatment; Mandatory Graduation.--The provisions of subsections (d) and
(e) of section 502 of the Trade Act of 1974 (19 U.S.C. 2462) shall
apply with respect to Mongolia to the same extent and in the same
manner as such provisions apply with respect to beneficiary developing
countries under title V of that Act (19 U.S.C. 2461 et seq.).
(f) Termination of Duty-Free Treatment.--No duty-free treatment
extended under this Act shall remain in effect after December 31, 2025.
(g) Definitions.--In this section:
(1) Customs territory of the united states.--The term
``customs territory of the United States'' has the meaning
given the term in General Note 2 of the Harmonized Tariff
Schedule of the United States.
(2) Cashmere.--The term ``cashmere'' means fine hair
obtained from a cashmere goat (capra hircus laniger).
SEC. 4. BRIEFING REQUIREMENT.
(a) In General.--Not later than one year after the date of the
enactment of this Act, and periodically thereafter, the President shall
monitor, review, and provide a briefing to the appropriate
congressional committees on--
(1) the implementation of this Act;
(2) compliance of Mongolia with the eligibility
requirements described in section 3(d); and
(3) the trade and investment policy of the United States
with respect to Mongolia.
(b) Appropriate Congressional Committees Defined.--In this section,
the term ``appropriate congressional committees'' means--
(1) the Committee on Ways and Means and the Committee on
Foreign Affairs of the House of Representatives; and
(2) the Committee on Finance and the Committee on Foreign
Relations of the Senate.
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