[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6539 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 6539
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
November 30, 2023
Ms. Titus (for herself and Mr. Buchanan) 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 country in Asia to
transition from communism to democracy. Mongolia shares land
borders with only the Russian Federation and the People's
Republic of China. With a large land area and a population of
only 3,255,000, Mongolia is the world's most sparsely populated
country, and its economy is highly dependent on its much larger
and more populous neighbors.
(2) 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 has shown its commitment to a ``third
neighbor'' relationship with the United States by sending
troops to support United States combat operations in Iraq and
Afghanistan, and has a strong record of troop contributions to
international peacekeeping missions, including nearly 900
personnel serving in the United Nations mission in South Sudan
and other missions.
(4) Mongolia describes the United States as its most
important ``third neighbor'', but trade between the United
States and Mongolia is substantially lower than in many of
Mongolia's other bilateral trading relationships, and has
declined in recent years. Total trade between the United States
and Mongolia in 2012 was valued at approximately $707,000,000,
but in 2022 the United States exported only $149,000,000 in
goods to Mongolia and imported only $26,000,000 in goods from
Mongolia.
(5) While the mining industry accounts for more than 80
percent of Mongolia's exports by value and more than 20 percent
of gross domestic product, agriculture, which accounts for
13.25 percent of gross domestic product, is a much larger
source of jobs, employing around a quarter of the working
population. The livestock sector accounts for more than 80
percent of agricultural production in Mongolia.
(6) Since the 1940s, the annual mean air temperature in
Mongolia has risen at 3 times the average global rate. Average
precipitation is declining and extreme weather disasters are
more frequent, posing acute challenges for livestock herding in
the country. In 2017, an estimated 700,000 animals of the
country's livestock population perished due to the post-drought
extreme winter phenomenon known as ``dzud''. This phenomenon
has increased in frequency and severity in recent years,
causing a rise in livestock mortality and diminishing
livelihoods for herders, which has led to widespread rural
poverty and a contraction in the national economy.
(7) Mongolia would greatly benefit from preferential
treatment for imports into the United States of certain
Mongolian products. Such preferential treatment would help
address some of the economic impacts of the dzuds.
(8) The cashmere trade is particularly important to the
economy of Mongolia. While Mongolia produces approximately 40
percent of the world's raw cashmere, it produces few finished
cashmere products. Mongolian raw cashmere is exported to the
People's Republic of China, where it is diluted with other
fibers and labeled as Mongolian. The United States buys nearly
all of its cashmere products from the People's Republic of
China. Preferential treatment for imports into the United
States of certain Mongolian products, including cashmere
products, would benefit the United States by facilitating
increased direct trade with Mongolia for cashmere products
while also supporting the development of value-added cashmere
processing in Mongolia.
(9) The development of the garment industry in Mongolia
would also promote women's employment and empowerment. Women
have historically participated in the garment industry in
Mongolia at high rates, and that industry has historically
provided safe and stable employment for women in Mongolia. The
United Nations has recognized the high numbers of women
deployed as part of Mongolia's contribution to peacekeeping
operations.
(10) In developing and expanding the cashmere industry in
Mongolia, it is critical for Mongolia to take steps to ensure
the protection of its grasslands and prevent overgrazing of
cashmere goats. Since 2018, Mongolia has been working with the
United Nations Development Programme to implement the Mongolian
Sustainable Cashmere Platform. The Platform's objectives aim to
improve cashmere traceability and Mongolia's sustainable
cashmere value chain.
(11) Preferential treatment for imports into the United
States of Mongolian products would benefit Mongolia at this
critical time.
SEC. 3. DUTY-FREE TREATMENT FOR CERTAIN IMPORTS FROM MONGOLIA.
(a) In General.--Subject to subsection (c), the President may
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--
(i) the yarn and fabric used to manufacture
the article are wholly produced in Mongolia;
and
(ii) the article is wholly formed and cut,
or its components are wholly knit-to-shape, 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 50
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 as
described in 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) Eligibility Requirements.--Duty-free treatment may not be
provided under this section unless the President determines and
certifies to Congress that--
(1) Mongolia meets each of the requirements set forth in--
(A) paragraphs (1), (2), and (3) of section 104(a)
of the African Growth and Opportunity Act (19 U.S.C.
3703(a)); and
(B) subparagraphs (A) through (F) of section
113(a)(1) of such Act (19 U.S.C. 3722(a)(1));
(2) Mongolia has effectively enforced environmental laws,
regulations, or other measures and fulfilled its obligations
under international agreements relating to the environment,
including as such obligations relate to public health; and
(3) 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 described in such section 502.
(d) Verification With Respect to Transshipment for Textile and
Apparel Articles.--
(1) In general.--Not later than 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 section are
not being unlawfully transshipped into the United States.
(2) Report to president and congress.--If the Commissioner
determines pursuant to paragraph (1) that textile and apparel
articles described in that paragraph are being unlawfully
transshipped into the United States, the Commissioner shall
report that determination to the President and the appropriate
congressional committees.
(e) Withdrawal, Suspension, or Limitation of Preferential Treatment
and 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, without regard to whether title V of that Act (19
U.S.C. 2461 et seq.) is in effect pursuant to section 505 of that Act
(19 U.S.C. 2465).
(f) Termination of Duty-Free Treatment.--No duty-free treatment
extended under this section shall remain in effect after December 31,
2029.
(g) Definitions.--In this section:
(1) Cashmere.--The term ``cashmere'' means fine hair
obtained from a cashmere goat (capra hircus laniger).
(2) 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.
SEC. 4. BRIEFING REQUIREMENT.
Not later than one year after the date of the enactment of this
Act, and annually thereafter, the President shall monitor, review, and
provide a briefing to the appropriate congressional committees on--
(1) the implementation of section 3;
(2) compliance of Mongolia with the eligibility
requirements described in section 3(c); and
(3) the trade and investment policy of the United States
with respect to Mongolia.
SEC. 5. APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.
In this Act, 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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