Legislative Update: China, Trade Measure Review, Foreign Investment, Natural Gas
China. The Fair Trade with China Enforcement Act (S. 2826, introduced May 10 by Sen. Rubio, R-Fla.) would (1) direct the Department of Commerce to use its export control authority to prohibit the sale or transfer of intellectual property sensitive to the industries identified in Beijing’s “Made in China 2025” strategy, (2) increase taxes on multinational corporations’ income earned in China at a rate similar to the lost value of IP and technology stolen by China, (3) tax China on its investments in the U.S., including its holdings of the national debt, (4) prepare duties on, and impose Chinese investor shareholder caps on U.S. companies producing, goods targeted by the “Made in China 2025” plan, and (5) prohibit the federal government, or subsidiaries/contractors, from purchasing telecommunications equipment or services from Chinese companies Huawei and ZTE.
Trade Measure Review. The Trade Authority Protection Act (H.R. 5760, introduced May 10 by Rep. Kind, D-Wis.) would create a Congressional Review Act-style process allowing Congress the opportunity to evaluate, and in some cases reject, trade agreements and proceedings by the executive branch (e.g., import restrictions, tariffs, etc.). Specifically, this bill would require the president to submit a report to Congress for all trade authorities delegated to him by Congress. This report would require not only a description of the proposal but also an economic impact study on both the proposal and any and all anticipated retaliatory actions. Congress would then have 60 days to consider the action and an expedited process for passing a resolution of disapproval to nullify the action.
Foreign Investment. The Senate Banking Committee has released a discussion draft of an amendment to S. 2098, the Foreign Investment Risk Review Modernization Act, which seeks to modernize and strengthen the process by which the Committee on Foreign Investment in the United States reviews acquisitions, mergers, and other foreign investments in the U.S. for national security risks. The full committee will mark up the bill May 22.
According to information released by the committee, the draft amended bill would leverage the “natural jurisdiction and authorities of the CFIUS process with those of the U.S. and multilateral export control regimes to review certain inbound and outbound transactions that may involve acquisitions of emerging critical or foundational technologies to the detriment of the U.S. national security.” Specific provisions include (1) expanding the definition of covered transactions that CFIUS can review, (2) listing several new factors for CFIUS to consider in its national security evaluations, (3) updating and harmonizing the existing “critical technologies” definition with a list of newly-identified emerging and foundational technologies key to U.S. national security, (4) extending the initial CFIUS review process from 30 to 45 days but also providing for an abbreviated process for simpler cases, (5) strengthening requirements for the use of mitigation agreements, and (6) authorizing the Commerce Department to establish controls on the newly-identified emerging and foundational technologies.
Natural Gas Exports. The Senate reported May 10 the Small Scale LNG Access Act (S. 1981, introduced Oct. 18 by Sen. Cassidy, R-La.), which would expedite approval of exports of natural gas equal to or less than 51.1 billion cubic feet per year. Such exports, which largely go to markets in the Caribbean, Central America, and South America, would be deemed consistent with the public interest and granted without modification or delay.
Drug Imports. H.R. 5752 (introduced May 10 by Rep. Blackburn, R-Tenn.) would amend the Federal Food, Drug, and Cosmetic Act with respect to the importation of certain drugs.