HR 782 IHCommentsClose CommentsPermalink

To amend title VII of the Tariff Act of 1930 to provide that exchange-rate misalignment by any foreign nation is a countervailable export subsidy, to amend the Exchange Rates and International Economic Policy Coordination Act of 1988 to clarify the definition of manipulation with respect to currency, and for other purposes.CommentsClose CommentsPermalink

January 31, 2007

Mr. RYAN of Ohio (for himself, Mr. HUNTER, Ms. SLAUGHTER, Mr. ALTMIRE, Mr. DEFAZIO, Ms. DELAURO, Mr. DOYLE, Mr. EHLERS, Ms. FOXX, Mr. GERLACH, Mr. HAYES, Mr. HOLT, Mr. KILDEE, Mr. LIPINSKI, Mr. MANZULLO, Mr. MCGOVERN, Mr. MCHUGH, Mr. MEEK of Florida, Mr. MICHAUD, Mrs. MILLER of Michigan, Mr. MOLLOHAN, Mrs. MYRICK, Mr. NORWOOD, Mr. RENZI, Mr. ROHRABACHER, Mr. SAXTON, Ms. SCHAKOWSKY, Mr. SENSENBRENNER, Mr. SOUDER, Mr. SPACE, Ms. SUTTON, Mr. WALZ of Minnesota, and Mr. WILSON of South Carolina) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Financial Services, Foreign Affairs, and Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedCommentsClose CommentsPermalink

To amend title VII of the Tariff Act of 1930 to provide that exchange-rate misalignment by any foreign nation is a countervailable export subsidy, to amend the Exchange Rates and International Economic Policy Coordination Act of 1988 to clarify the definition of manipulation with respect to currency, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Fair Currency Act of 2007'.CommentsClose CommentsPermalink

TITLE I--SUBSIDIES AND PRODUCT-SPECIFIC SAFEGUARD MECHANISM

SEC. 101. FINDINGS.

Congress makes the following findings:CommentsClose CommentsPermalink





(1) The economy and national security of the United States are critically dependent upon a vibrant manufacturing and agricultural base.CommentsClose CommentsPermalink





(2) The good health of United States manufacturing and agriculture requires, among other things, unfettered access to open markets abroad and fairly traded raw materials and products in accord with the international legal principles and agreements of the World Trade Organization and the International Monetary Fund.CommentsClose CommentsPermalink





(3) The International Monetary Fund, the G-8, and other international organizations have repeatedly noted that exchange-rate misalignment can cause imbalances in the international trading system that could ultimately undercut the stability of the system, but have taken no action to redress such misalignments and imbalances.CommentsClose CommentsPermalink





(4) Since 1994, the People's Republic of China and other countries have repeatedly intervened in currency markets and taken measures that have significantly misaligned the values of their currencies against the United States dollar and other currencies.CommentsClose CommentsPermalink





(5) This policy by the People's Republic of China, for example, has resulted in substantial undervaluation of the renminbi, by up to 40 percent or more.CommentsClose CommentsPermalink





(6) Evidence of this undervaluation can be found in the large and growing annual trade surpluses of the People's Republic of China; substantially expanding foreign direct investment in China; and the rapidly increasing aggregate amount of foreign currency reserves that are held by the People's Republic of China.CommentsClose CommentsPermalink





(7) Undervaluation by the People's Republic of China and by other countries acts as both a subsidy for their exports and as a nontariff barrier against imports into their territories, to the serious detriment of United States manufacturing and agriculture.CommentsClose CommentsPermalink





(8)(A) As members of both the World Trade Organization and the International Monetary Fund, the People's Republic of China and other countries have assumed a series of international legal obligations to eliminate all subsidies for exports and to facilitate international trade by fostering a monetary system that does not tend to produce erratic disruptions, that does not prevent effective balance-of-payments adjustment, and that does not gain unfair competitive advantage.CommentsClose CommentsPermalink





(B) These obligations are most prominently set forth in--CommentsClose CommentsPermalink





(i) Articles VI, XV, and XVI of the GATT 1994 (as defined in section 2(1)(B) of the Uruguay Round Agreements Act (19 U.S.C. 3501(1)(B));CommentsClose CommentsPermalink





(ii) the Agreement on Subsidies and Countervailing Measures (as described in section 101(d)(12) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(12)); andCommentsClose CommentsPermalink





(iii) Articles IV and VIII of the International Monetary Fund's Articles of Agreement.CommentsClose CommentsPermalink





(9) Under the foregoing circumstances, it is consistent with the international legal obligations of the People's Republic of China and similarly situated countries and with the corresponding international legal rights of the United States to amend relevant United States trade laws to make explicit that exchange-rate misalignment by any country is actionable as a countervailable export subsidy.CommentsClose CommentsPermalink

SEC. 102. APPLICATION OF COUNTERVAILING DUTIES TO NONMARKET ECONOMY COUNTRIES.

(a) In General- Section 701(a)(1) of the Tariff Act of 1930 (19 U.S.C. 1671(a)(1)) is amended by inserting `(including a nonmarket economy country)' after `country' each place it appears.CommentsClose CommentsPermalink





(b) Use of Alternate Methodologies- Section 771(5)(E) of the Tariff Act of 1930 (19 U.S.C. 1677(5)(E)) is amended by adding at the end the following: `With respect to a nonmarket economy country, for purposes of identifying and measuring a subsidy benefit described in clause (i), (ii), (iii), or (iv), or otherwise conferred upon a recipient, the administering authority shall use methodologies that take into account the possibility that prevailing terms and conditions in that country might not be available or might themselves be inappropriate benchmarks due to market distortions. In such circumstances, unless it is demonstrated that the nonmarket economy country's prevailing terms and conditions practicably can be adjusted to serve as appropriate benchmarks, the administering authority shall use as benchmarks appropriate terms and conditions prevailing outside the nonmarket economy country. When the party in possession of the information necessary to identify and measure the benefit of a subsidy does not timely and completely submit that information for the record, the administering authority shall use for that purpose the facts otherwise available and shall, as warranted, draw adverse inferences.'.CommentsClose CommentsPermalink





(c) Adjustments For Export Price and Constructed Export Price- Section 772(c)(1)(C) of the Tariff Act of 1930 (19 U.S.C. 1677a(c)(1)(C)) is amended by inserting before the end comma the following: `, whether the subject merchandise is from a country with a market economy, a nonmarket economy, or a combination thereof'.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by subsections (a), (b), and (c) apply with respect to a countervailing duty proceeding initiated under subtitle A of title VII of the Tariff Act of 1930 before, on, or after the date of enactment of this Act.CommentsClose CommentsPermalink





(e) Antidumping Provisions Not Affected- The amendments made by subsections (a), (b), and (c) shall not affect the status of a country as a nonmarket economy country for the purposes of any matter relating to antidumping duties under the Tariff Act of 1930.CommentsClose CommentsPermalink

SEC. 103. CLARIFICATION TO INCLUDE EXCHANGE-RATE MISALIGNMENT AS A COUNTERVAILABLE SUBSIDY UNDER TITLE VII OF THE TARIFF ACT OF 1930.

(a) Amendments to Definition of Countervailable Subsidy-CommentsClose CommentsPermalink





(1) FINANCIAL CONTRIBUTION- Section 771(5)(D) of the Tariff Act of 1930 (19 U.S.C. 1677(5)(D)) is amended--CommentsClose CommentsPermalink





(A) by redesignating clauses (i) through (iv) as subclauses (I) through (IV), respectively;CommentsClose CommentsPermalink





(B) by striking `The term' and inserting `(i) The term'; andCommentsClose CommentsPermalink





(C) by adding at the end the following:CommentsClose CommentsPermalink





`(ii) Exchange-rate misalignment (as defined in paragraph (5C)) constitutes a financial contribution within the meaning of subclauses (I) and (III) of clause (i).'.CommentsClose CommentsPermalink





(2) BENEFIT CONFERRED- Section 771(5)(E) of the Tariff Act of 1930 (19 U.S.C. 1677(5)(E)) is amended--CommentsClose CommentsPermalink





(A) in clause (iii), by striking `, and' and inserting a comma;CommentsClose CommentsPermalink





(B) in clause (iv), by striking the period at the end and inserting `, and'; andCommentsClose CommentsPermalink





(C) by inserting after clause (iv) the following new clause:CommentsClose CommentsPermalink





`(v) in the case of exchange-rate misalignment (as defined in paragraph (5C)), if the price of exported goods in United States dollars is less than what the price of such goods would be without the exchange-rate misalignment.'.CommentsClose CommentsPermalink





(3) SPECIFICITY- Section 771(5A)(B) of the Tariff Act of 1930 (19 U.S.C. 1677(5A)(B)) is amended by inserting before the period at the end the following: `, such as exchange-rate misalignment (as defined in paragraph (5C))'.CommentsClose CommentsPermalink





(b) Definition of Exchange-Rate Misalignment- Section 771 of the Tariff Act of 1930 (19 U.S.C. 1677) is amended by inserting after paragraph (5B) the following new paragraph:CommentsClose CommentsPermalink





`(5C) EXCHANGE-RATE MISALIGNMENT-CommentsClose CommentsPermalink





`(A) IN GENERAL- For purposes of paragraphs (5) and (5A), the term `exchange-rate misalignment' means an undervaluation of a foreign currency as a result of protracted large-scale intervention by or at the direction of a governmental authority in the exchange market. Such undervaluation shall be found when the observed exchange rate for a foreign currency is below the exchange rate that could reasonably be expected for that foreign currency absent the intervention.CommentsClose CommentsPermalink





`(B) FACTORS- In determining whether exchange-rate misalignment is occurring and a benefit thereby is conferred, the administering authority in each case--CommentsClose CommentsPermalink





`(i) shall consider the exporting country's--CommentsClose CommentsPermalink





`(I) bilateral balance-of-trade surplus or deficit with the United States;CommentsClose CommentsPermalink





`(II) balance-of-trade surplus or deficit with its other trading partners individually and in the aggregate;CommentsClose CommentsPermalink





`(III) foreign direct investment in its territory;CommentsClose CommentsPermalink





`(IV) currency-specific and aggregate amounts of foreign currency reserves; andCommentsClose CommentsPermalink





`(V) mechanisms employed to maintain its currency at an undervalued exchange rate relative to another currency and, particularly, the nature, duration, and monetary expenditures of those mechanisms;CommentsClose CommentsPermalink





`(ii) may consider such other economic factors as are relevant; andCommentsClose CommentsPermalink





`(iii) shall measure the trade surpluses or deficits described in subclauses (I) and (II) of clause (i) with reference to the trade data reported by the United States and the other trading partners of the exporting country, unless such trade data are not available or are demonstrably inaccurate, in which case the exporting country's trade data may be relied upon if shown to be sufficiently accurate and trustworthy.CommentsClose CommentsPermalink





`(C) COMPUTATION- In quantifying exchange-rate misalignment, the administering authority shall develop and apply an objective methodology that is consistent with widely recognized macroeconomic theory and shall rely upon governmentally published and other publicly available and reliable data.CommentsClose CommentsPermalink





`(D) TYPE OF ECONOMY- An authority found to be engaged in exchange-rate misalignment may have either a market economy or a nonmarket economy or a combination thereof.'.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section apply with respect to a countervailing duty proceeding initiated under subtitle A of title VII of the Tariff Act of 1930 before, on, or after the date of enactment of this Act.CommentsClose CommentsPermalink

SEC. 104. CLARIFICATION TO INCLUDE EXCHANGE-RATE MISALIGNMENT BY THE PEOPLE'S REPUBLIC OF CHINA AS A CONDITION TO BE CONSIDERED WITH RESPECT TO MARKET DISRUPTION UNDER CHAPTER 2 OF TITLE IV OF THE TRADE ACT OF 1974.

(a) Market Disruption-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 421(c) of the Trade Act of 1974 (19 U.S.C. 2451(c)) is amended by adding at the end the following new paragraphs:CommentsClose CommentsPermalink





`(3) For purposes of this section, the term `under such conditions' includes exchange-rate misalignment (as defined in paragraph (4)).CommentsClose CommentsPermalink





`(4)(A) For purposes of this section, the term `exchange-rate misalignment' means an undervaluation of the renminbi as a result of protracted large-scale intervention by or at the direction of the Government of the People's Republic of China in the exchange market. Such undervaluation shall be found when the observed exchange rate for the renminbi is below the exchange rate that could reasonably be expected for the renminbi absent the intervention.CommentsClose CommentsPermalink





`(B) In determining whether exchange-rate misalignment is occurring, the Commission in each case--CommentsClose CommentsPermalink





`(i) shall consider the People's Republic of China's--CommentsClose CommentsPermalink





`(I) bilateral balance-of-trade surplus or deficit with the United States;CommentsClose CommentsPermalink





`(II) balance-of-trade surplus or deficit with its other trading partners individually and in the aggregate;CommentsClose CommentsPermalink





`(III) foreign-direct investment in its territory;CommentsClose CommentsPermalink





`(IV) currency-specific and aggregate amounts of foreign currency reserves; andCommentsClose CommentsPermalink





`(V) mechanisms employed to maintain its currency at an undervalued exchange rate relative to another currency and, particularly, the nature, duration, and monetary expenditures of those mechanisms;CommentsClose CommentsPermalink





`(ii) may consider such other economic factors as are relevant; andCommentsClose CommentsPermalink





`(iii) shall measure the trade surpluses or deficits described in subclauses (I) and (II) of clause (i) with reference to the trade data reported by the United States and the other trading partners of the People's Republic of China, unless such trade data are not available or are demonstrably inaccurate, in which case the trade data of the People's Republic of China may be relied upon if shown to be sufficiently accurate and trustworthy.CommentsClose CommentsPermalink





`(C) COMPUTATION- In quantifying exchange-rate misalignment, the Commission shall develop and apply an objective methodology that is consistent with widely recognized macroeconomic theory and shall rely upon governmentally published and other publicly available and reliable data.'.CommentsClose CommentsPermalink





(b) Critical Circumstances- Section 421(i)(1) of the Trade Act of 1974 (19 U.S.C. 2451(i)(1)) is amended by inserting after subparagraph (B) the following:CommentsClose CommentsPermalink





`If the petition alleges and reasonably documents that exchange-rate misalignment is occurring, such exchange-rate misalignment shall be considered as a factor weighing in favor of affirmative findings in subparagraphs (A) and (B).'.CommentsClose CommentsPermalink





(c) Standard for Presidential Action- Section 421(k)(2) of the Trade Act of 1974 (19 U.S.C. 2451(k)(2)) is amended by adding at the end the following new sentence: `If the Commission makes an affirmative determination that exchange-rate misalignment is occurring, the President shall consider such exchange-rate misalignment as a factor weighing in favor of providing import relief in accordance with subsection (a).'.CommentsClose CommentsPermalink





(d) Modifications of Relief- Section 421(n)(2) of the Trade Act of 1974 (19 U.S.C. 2451(n)(2)) is amended by adding at the end the following new sentence: `If the Commission affirmatively determines that exchange-rate misalignment is occurring, the Commission and the President shall consider such exchange-rate misalignment as a factor weighing in favor of finding that continuation of relief is necessary to prevent or remedy the market disruption at issue.'.CommentsClose CommentsPermalink





(e) Extension of Action- Section 421(o) of the Trade Act of 1974 (19 U.S.C. 2451(o)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (1), by adding at the end the following new sentence: `If the Commission makes an affirmative determination that exchange-rate misalignment is occurring, the Commission shall consider such exchange-rate misalignment as a factor weighing in favor of finding that an extension of the period of relief is necessary to prevent or remedy the market disruption at issue.'; andCommentsClose CommentsPermalink





(2) in paragraph (4), by adding at the end the following new sentence: `If the Commission makes an affirmative determination that exchange-rate misalignment is occurring, the President shall consider such exchange-rate misalignment as a factor weighing in favor of finding that an extension of the period of relief is necessary to prevent or remedy the market disruption at issue.'.CommentsClose CommentsPermalink





(f) Effective Date- The amendments made by this section apply with respect to an investigation initiated under chapter 2 of title IV of the Trade Act of 1974 before, on, or after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 105. PROHIBITION ON PROCUREMENT BY THE DEPARTMENT OF DEFENSE OF CERTAIN DEFENSE ARTICLES IMPORTED FROM THE PEOPLE'S REPUBLIC OF CHINA.

(a) Copy of Petition, Request, or Resolution To Be Transmitted to the Secretary of Defense- Section 421(b)(4) of the Trade Act of 1974 (19 U.S.C. 2451(b)(4)) is amended by inserting `, the Secretary of Defense' after `, the Trade Representative'.CommentsClose CommentsPermalink





(b) Determination of Secretary of Defense- Section 421(b) of the Trade Act of 1974 (19 U.S.C. 2451(b)) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





`(6) Not later than 15 days after the date on which an investigation is initiated under this subsection, the Secretary of Defense shall submit to the Commission a report in writing which contains the determination of the Secretary as to whether or not the articles of the People's Republic of China that are the subject of the investigation are like or directly competitive with articles produced by a domestic industry that are critical to the defense industrial base of the United States.'.CommentsClose CommentsPermalink





(c) Prohibition on Procurement by the Department of Defense of Certain Defense Articles-CommentsClose CommentsPermalink





(1) PROHIBITION- If the United States International Trade Commission makes an affirmative determination under section 421(b) of the Trade Act of 1974 (19 U.S.C. 2451(b)), or a determination which the President or the United States Trade Representative may consider as affirmative under section 421(e) of such Act (19 U.S.C. 2451(e)), with respect to articles of the People's Republic of China that the Secretary of Defense has determined are like or directly competitive with articles produced by a domestic industry that are critical to the defense industrial base of the United States, the Secretary of Defense may not procure, directly or indirectly, such articles of the People's Republic of China.CommentsClose CommentsPermalink





(2) WAIVER- The President may waive the application of the prohibition contained in paragraph (1) on a case-by-case basis if the President determines and certifies to Congress that it is in the national security interests of the United States to do so.CommentsClose CommentsPermalink

SEC. 106. APPLICATION TO GOODS FROM CANADA AND MEXICO.

Pursuant to article 1902 of the North American Free Trade Agreement and section 408 of the North American Free Trade Agreement Implementation Act of 1993 (19 U.S.C. 3438), the amendments made by sections 102, 103, and 206 of this Act shall apply to goods from Canada and Mexico.CommentsClose CommentsPermalink

TITLE II--INTERNATIONAL MONETARY AND FINANCIAL POLICY

SEC. 201. FINDINGS.

Congress makes the following findings:CommentsClose CommentsPermalink





(1) Since the Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5302(3)) was enacted the global economy has changed dramatically, with increased capital account openness, a sharp increase in the flow of funds internationally, and an ever growing number of emerging market economies becoming systemically important to the global flow of goods, services, and capital. In addition, practices such as the maintenance of multiple currency regimes have become rare.CommentsClose CommentsPermalink





(2) Exchange rates among major trading nations are occasionally manipulated or fundamentally misaligned due to direct or indirect governmental intervention in the exchange market.CommentsClose CommentsPermalink





(3) A major focus of national economic policy should be a market-driven exchange rate for the United States dollar at a level consistent with a sustainable balance in the United States current account.CommentsClose CommentsPermalink





(4) While some degree of surpluses and deficits in payments balances may be expected, particularly in response to increasing economic globalization, large and growing imbalances raise concerns of possible disruption to financial markets. In part, such imbalances often reflect exchange rate policies that foster fundamental misalignment of currencies.CommentsClose CommentsPermalink





(5) Currencies in fundamental misalignment can seriously impair the ability of international markets to adjust appropriately to global capital and trade flows, distorting trade flows and causing economic harm to the United States.CommentsClose CommentsPermalink





(6) The effects of a fundamentally misaligned currency may be so harmful that it is essential to correct the fundamental misalignment without regard to the purpose of any policy that contributed to the misalignment.CommentsClose CommentsPermalink





(7) In the interests of facilitating the exchange of goods, services, and capital among countries, sustaining sound economic growth, and fostering financial and economic stability, Article IV of the International Monetary Fund's Articles of Agreement obligates each member of the International Monetary Fund to avoid manipulating exchange rates in order to prevent effective balance of payments adjustments or to gain an unfair competitive advantage over other members.CommentsClose CommentsPermalink





(8) The failure of a government to acknowledge a fundamental misalignment of its currency or to take timely and effective steps to correct such a fundamental misalignment, either through inaction or mere token action, is a form of exchange rate manipulation and is inconsistent with that government's obligations under Article IV of the International Monetary Fund's Articles of Agreement.CommentsClose CommentsPermalink

SEC. 202. AMENDMENTS TO DEFINITIONS.

Section 3006 of the Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5306) is amended by adding at the end the following:CommentsClose CommentsPermalink





`(3) FUNDAMENTAL MISALIGNMENT- The term `fundamental misalignment' means a material sustained disparity between the observed levels of an effective exchange rate for a currency and the corresponding levels of an effective exchange rate for that currency that would be consistent with fundamental macroeconomic conditions based on a generally accepted economic rationale.CommentsClose CommentsPermalink





`(4) EFFECTIVE EXCHANGE RATE- The term `effective exchange rate' means a weighted average of bilateral exchange rates, expressed in either nominal or real terms.CommentsClose CommentsPermalink





`(5) GENERALLY ACCEPTED ECONOMIC RATIONALE- The term `generally accepted economic rationale' means an explanation drawn on widely recognized macroeconomic theory for which there is a significant degree of empirical support.'.CommentsClose CommentsPermalink

SEC. 203. BILATERAL NEGOTIATIONS.

Section 3004(b) of the Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5304(b)) is amended to read as follows:CommentsClose CommentsPermalink





`(b) Bilateral Negotiations-CommentsClose CommentsPermalink





`(1) IN GENERAL- The Secretary of the Treasury shall analyze on an annual basis the exchange rate policies of foreign countries, in consultation with the International Monetary Fund, and consider whether countries--CommentsClose CommentsPermalink





`(A) manipulate the rate of exchange between their currency and the United States dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade; orCommentsClose CommentsPermalink





`(B) have a currency that is in fundamental misalignment.CommentsClose CommentsPermalink





`(2) AFFIRMATIVE DETERMINATION- If the Secretary considers that such manipulation or fundamental misalignment is occurring with respect to countries that--CommentsClose CommentsPermalink





`(A) have material global current account surpluses; orCommentsClose CommentsPermalink





`(B) have significant bilateral trade surpluses with the United States,CommentsClose CommentsPermalink





the Secretary of the Treasury shall take action to initiate negotiations with such foreign countries on an expedited basis, in the International Monetary Fund or bilaterally, for the purpose of ensuring that such countries regularly and promptly adjust the rate of exchange between their currencies and the United States dollar to permit effective balance of payments adjustments and to eliminate the unfair advantage.CommentsClose CommentsPermalink





`(3) EXCEPTION- The Secretary shall not be required to initiate negotiations if the Secretary determines that such negotiations would have a serious detrimental impact on vital national economic and security interests. The Secretary shall inform the chairman and the ranking minority member of the Committee on Banking, Housing, and Urban Affairs of the Senate and of the Committee on Financial Services of the House of Representatives of the Secretary's determination.'.CommentsClose CommentsPermalink

SEC. 204. REPORTING REQUIREMENTS.

Section 3005 of the Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5305) is amended to read as follows:CommentsClose CommentsPermalink

`SEC. 3005. REPORTING REQUIREMENTS.

`(a) Reports Required-CommentsClose CommentsPermalink





`(1) IN GENERAL- The Secretary, after consulting with the Chairman of the Board, shall submit to Congress, on or before October 15 of each year, a written report on international economic policy and currency exchange rates.CommentsClose CommentsPermalink





`(2) INTERIM REPORT- The Secretary, after consulting with the Chairman of the Board, shall submit to Congress, on or before April 15 of each year, a written report on interim developments with respect to international economic policy and currency exchange rates.CommentsClose CommentsPermalink





`(b) Contents of Reports- Each report submitted under subsection (a) shall contain--CommentsClose CommentsPermalink





`(1) an analysis of currency market developments and the relationship between the United States dollar and the currencies of major economies and United States trading partners;CommentsClose CommentsPermalink





`(2) a review of the economic and financial policies of major economies and United States trading partners and an evaluation of the impact that such policies have on currency exchange rates;CommentsClose CommentsPermalink





`(3) a description of any currency intervention by the United States or other major economies or United States trading partners, or other actions undertaken to adjust the actual exchange rate of the dollar;CommentsClose CommentsPermalink





`(4) an evaluation of the factors that underlie conditions in the currency markets, including--CommentsClose CommentsPermalink





`(A) monetary and financial conditions;CommentsClose CommentsPermalink





`(B) foreign exchange reserve accumulation;CommentsClose CommentsPermalink





`(C) macroeconomic trends;CommentsClose CommentsPermalink





`(D) trends in current and financial account balances;CommentsClose CommentsPermalink





`(E) the size and composition of, and changes in, international capital flows;CommentsClose CommentsPermalink





`(F) the impact of the external sector on economic changes;CommentsClose CommentsPermalink





`(G) the size and growth of external indebtedness;CommentsClose CommentsPermalink





`(H) trends in the net level of international investment; andCommentsClose CommentsPermalink





`(I) capital controls, trade, and exchange restrictions;CommentsClose CommentsPermalink





`(5) a list of currencies of the major economies or economic areas that are manipulated or in fundamental misalignment and a description of any economic models or methodologies used to establish the list;CommentsClose CommentsPermalink





`(6) a description of any reason or circumstance that accounts for why each currency identified under paragraph (5) is manipulated or in fundamental misalignment based on a generally accepted economic rationale;CommentsClose CommentsPermalink





`(7) a list of each currency identified under paragraph (5) for which the manipulation or fundamental misalignment causes, or contributes to, a material adverse impact on the economy of the United States, including a description of any reason or circumstance that explains why the manipulation or fundamental misalignment is not accounted for under paragraph (6);CommentsClose CommentsPermalink





`(8) the results of any prior consultations conducted or other steps taken; andCommentsClose CommentsPermalink





`(9)(A) a list of each occasion during the reporting period when the issue of exchange-rate misalignment was raised in a countervailing duty proceeding under subtitle A of title VII of the Tariff Act of 1930 or in an investigation under section 421 of the Trade Act of 1974;CommentsClose CommentsPermalink





`(B) a summary in each such instance of whether or not exchange-rate misalignment was found and the reasoning and data underlying that finding; andCommentsClose CommentsPermalink





`(C) a discussion regarding each affirmative finding of exchange-rate misalignment to consider the circumstances underlying that exchange-rate misalignment and what action appropriately has been or might be taken by the Secretary apart from and in addition to import relief to correct the exchange-rate misalignment.CommentsClose CommentsPermalink





`(c) Development of Reports- The Secretary shall consult with the Chairman of the Board with respect to the preparation of each report required under subsection (a). Any comments provided by the Chairman of the Board shall be submitted to the Secretary not later than the date that is 15 days before the date each report is due under subsection (a). The Secretary shall submit the report after taking into account all comments received.'.CommentsClose CommentsPermalink

SEC. 205. INTERNATIONAL FINANCIAL INSTITUTION GOVERNANCE ARRANGEMENTS.

(a) Initial Review- Notwithstanding any other provision of law, before the United States approves a proposed change in the governance arrangement of any international financial institution, as defined in section 1701(c)(2) of the International Financial Institutions Act (22 U.S.C. 262r(c)(2)), the Secretary of the Treasury shall determine whether any member of the international financial institution that would benefit from the proposed change, in the form of increased voting shares or representation, has a currency that is manipulated or in fundamental misalignment, and if so, whether the manipulation or fundamental misalignment causes or contributes to a material adverse impact on the economy of the United States. The determination shall be reported to Congress.CommentsClose CommentsPermalink





(b) Subsequent Action- The United States shall oppose any proposed change in the governance arrangement of any international financial institution (as defined in subsection (a)) if the Secretary renders an affirmative determination pursuant to subsection (a).CommentsClose CommentsPermalink





(c) Further Action- The United States shall continue to oppose any proposed change in the governance arrangement of an international financial institution, pursuant to subsection (b), until the Secretary determines and reports to Congress that the currency of each member of the international financial institution that would benefit from the proposed change, in the form of increased voting shares or representation, is neither manipulated nor in fundamental misalignment.CommentsClose CommentsPermalink

SEC. 206. NONMARKET ECONOMY STATUS.

Paragraph (18)(B)(vi) of section 771 of the Tariff Act of 1930 (19 U.S.C. 1677(18)(B)(vi)) is amended by inserting before the period at the end the following: `, including whether the currency of the foreign country has been identified pursuant to section 3005(b)(7) of the Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5305(b)(7)) in any written report required by such section 3005(b)(7) during the 24-month period immediately preceding the month during which the administering authority seeks to revoke a determination that such foreign country is a nonmarket economy country'.CommentsClose CommentsPermalink