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S 1677 IS

To amend the Exchange Rates and International Economic Coordination Act of 1988 and for other purposes.

June 21, 2007

Mr. DODD (for himself, Mr. SHELBY, Mr. BAYH, Mr. BUNNING, Mr. CARPER, Mr. BROWN, Mr. CASEY, and Ms. STABENOW) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To amend the Exchange Rates and International Economic Coordination Act of 1988 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 `Currency Reform and Financial Markets Access Act of 2007'.

TITLE I--EXCHANGE RATES AND INTERNATIONAL ECONOMIC POLICY COORDINATION ACT OF 1988

SEC. 101. STATEMENT OF POLICY.

Section 3003 of the Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5303) is amended--

(1) by striking `and' at the end of paragraph (3);

(2) by striking the period at the end of paragraph (4) and inserting a semicolon; and

(3) by adding at the end the following:

`(5) the United States, and other major industrialized countries, should, where appropriate, work together, through bilateral and multilateral discussions and international economic institutions, to ensure that the rate of exchange of the currencies of the major trading nations and the United States dollar--

`(A) reflect economic fundamentals and market forces; and

`(B) contribute to the growth and balance of the international economy; and

`(6) the United States should take all appropriate and necessary measures to ensure that the major trading partners of the United States are not engaged in hidden or unfair subsidies through management of their currency or international exchange rates.'.

SEC. 102. FAIR CURRENCY.

(a) In General- 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:

`(b) Bilateral Negotiations-

`(1) ANALYSIS- 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 any country, regardless of intent, manipulates the rate of exchange between its currency and the United States dollar in a manner that--

`(A) prevents effective balance of payments adjustments;

`(B) gains an unfair competitive advantage in international trade; or

`(C) results in an accumulation of substantial dollar currency reserves.

`(2) DETERMINATION- The Secretary shall make an affirmative determination that a country is manipulating its currency and take the action described in paragraphs (3), (4), and (5) with respect to any country the Secretary considers is manipulating its currency as described in paragraph (1), if that country--

`(A) has a material global current account surplus;

`(B) has significant bilateral trade surpluses with the United States; and

`(C) has engaged in prolonged one-way intervention in the currency markets.

`(3) ACTION-

`(A) IN GENERAL- In the case of any country with respect to which the Secretary makes an affirmative determination under paragraph (2), the Secretary shall, not later than 30 days after the determination is made, establish a plan of action to remedy the currency manipulation, and submit a report regarding that plan, to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives.

`(B) BENCHMARKS- The report described in subparagraph (A) shall include specific benchmarks and timeframes for correcting the currency manipulation.

`(4) INITIAL NEGOTIATIONS- The Secretary shall initiate, on an expedited basis, bilateral negotiations with each country with respect to which an affirmative determination is made under paragraph (2) for the purpose of ensuring that the country regularly and promptly adjusts the rate of exchange between its currency and the United States dollar to permit effective balance of payment adjustments and to eliminate the unfair competitive advantage.

`(5) COORDINATION WITH THE INTERNATIONAL MONETARY FUND- The Secretary, within 30 days of the determination made under paragraph (2), shall instruct the Executive Director to the International Monetary Fund to use the voice and vote of the United States, including requesting consultations under Article IV of the Articles of Agreement of the International Monetary Fund, for the purpose of ensuring that each country with respect to which an affirmative determination is made under paragraph (2) regularly and promptly adjusts the rate of exchange between its currency and the United States dollar to permit effective balance of payments adjustments and to eliminate the unfair competitive advantage in trade.

`(6) FOLLOW-UP REPORT- Not later than 300 days after an affirmative determination is made under paragraph (2), if the country with respect to which the affirmative determination is made continues to manipulate the rate of exchange between its currency and the United States dollar and the benchmarks in the report required under paragraph (3) have not been met, the Secretary shall initiate action pursuant to the Understanding on Rules and Procedures Governing the Settlement of Disputes annexed to the WTO Agreement to address the country's currency manipulation and violations of the country's obligations under article XV of GATT 1994.

`(7) EXCEPTION- The Secretary is not required to initiate action in any case in which the President determines that the action will have a serious detrimental impact on the vital economic and security interests of the United States. If the President makes a determination under the preceding sentence, the President 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 President's determination.'.

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

`(3) GATT 1994- The term `GATT 1994' has the meaning given such term in section 2(1)(B) of the Uruguay Round Agreements Act (19 U.S.C. 3501(1)(B)).

`(4) WTO AGREEMENT- The term `WTO Agreement' means the Agreement Establishing the World Trade Organization entered into on April 15, 1994.'.

SEC. 103. REPORTING REQUIREMENTS.

Section 3005 of the Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5305) is amended--

(1) in subsection (a)--

(A) by striking `In furtherance' and inserting the following:

`(1) IN GENERAL- In furtherance'; and

(B) by striking the last sentence; and

(2) by adding at the end the following:

`(2) APPEARANCES BEFORE THE CONGRESS- The Secretary shall appear before the Congress at semi-annual hearings to provide testimony on the reports referred to in paragraph (1)--

`(A) before the Committee on Banking, Housing and Urban Affairs of the Senate on or about October 15 of each even numbered calendar year and on or about April 15 of each odd numbered calendar year;

`(B) before the Committee on Financial Services of the House of Representatives on or about April 15 of each even numbered calendar year and on or about October 15 of each odd numbered calendar year; and

`(C) before either Committee referred to in subparagraph (A) or (B), upon request of the Chairman, following the scheduled appearance of the Secretary before the other Committee.'.

SEC. 104. CONGRESSIONAL DETERMINATION OF CURRENCY MANIPULATION.

The Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5301 et seq.) is amended by inserting after section 3004 the following:

`SEC. 3004A. ACTION BASED ON COMMITTEE RESOLUTION.

`(a) In General- In this section, the term `joint resolution' means only a joint resolution introduced in the period beginning on the date on which the report referred to section 3004(b)(3) of the Exchange Rates and International Economic Policy Coordination Act of 1988 is received by the Committee on Banking, Housing and Urban Affairs of the Senate or the Committee on Financial Services of the House of Representatives and ending 60 days thereafter (excluding days either House of Congress is adjourned for more than 3 days during a session of Congress), the matter after the resolving clause of which is as follows: `That Congress disapproves of the determination of the Secretary of the Treasury relating to the finding of currency manipulation as described in section 3004(b) of the Exchange Rates and International Economic Policy Coordination Act of 1988 in the report relating to XXXXXXXX, submitted on XXXXXXXXXXX.', with the first blank space being filled with the name of the country (or countries) to which the determination relates and the second blank space being filled with the date the report was submitted.

`(b) Procedures for Considering Resolutions-

`(1) ORIGINAL RESOLUTIONS- Resolutions of disapproval shall be original resolutions, which--

`(A) in the House of Representatives shall originate from the Committee on Financial Services and, in addition, be referred to the Committee on Rules; and

`(B) in the Senate shall originate from the Committee on Banking, Housing, and Urban Affairs.

`(2) FLOOR CONSIDERATION-

`(A) IN GENERAL- Except as otherwise provided in this section, the provisions of subsections (d) through (f) of section 152 of the Trade Act of 1974 (19 U.S.C. 2192(d) through (f)) (relating to floor consideration of certain resolutions in the House and Senate) apply to a joint resolution of disapproval under this section to the same extent as such subsections apply to joint resolutions under such section 152.

`(B) MODIFICATION OF SECTION 152- Section 152(f) of the Trade Act of 1974 shall be applied--

`(i) by substituting `described in section 3004A of the Exchange Rates and International Economic Policy Coordination Act of 1988' for `described in section 152 or 153(a), whichever is applicable,' in paragraph (2); and

`(ii) by substituting `a joint resolution described in section 3004A of the Exchange Rates and International Economic Policy Coordination Act of 1988' for `a joint resolution described in subsection (a)(2)(B)' in paragraph (3).

`(c) Rules of House of Representatives and Senate- This section is enacted by the Congress--

`(1) as an exercise of the rulemaking power of the House of Representatives and the Senate, respectively, and as such are deemed a part of the rules of each House, respectively, and such procedures supersede other rules only to the extent that they are inconsistent with such other rules; and

`(2) with the full recognition of the constitutional right of either House to change the rules (so far as relating to the procedures of that House) at any time, in the same manner, and to the same extent as any other rule of that House.'.

TITLE II--FINANCIAL REPORTS ACT OF 1988

SEC. 201. SHORT TITLE.

This title may be cited as the `Promoting Market Access for Financial Services Act'.

SEC. 202. REPORT ON FOREIGN TREATMENT OF UNITED STATES FINANCIAL INSTITUTIONS.

The Financial Reports Act of 1988 (22 U.S.C. 5351 et seq.) is amended--

(1) in section 3602--

(A) by striking `quadrennial' and inserting `annual' in the heading;

(B) by striking `not less frequently than every 4 years, beginning December 1, 1990' and inserting `beginning July 1, 2008, and annually thereafter,'; and

(C) by striking `to the Congress' and inserting `to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives';

(2) in section 3603--

(A) by redesignating subsections (b), (c), and (d) as subsections (c), (d), and (e), respectively; and

(B) by inserting after subsection (a), the following:

`(b) Report on SED- The Secretary shall include in the initial report required under section 3602 a summary of the results of the most recent US-China Strategic Economic Dialogue (SED) and the results of the SED as it relates to promoting market access for financial institutions. The reports required under section 3602 shall include a progress report on the implementation of any agreements resulting from the SED, a description of the remaining challenges, if any, in improving market access for financial institutions, and a plan, including benchmarks and timeframes, for dealing with the remaining challenges. Each report shall specifically address issues regarding--

`(1) foreign investment rules;

`(2) the problems of a dual-share stock market;

`(3) the openness of the derivatives market;

`(4) restrictions on foreign bank branching;

`(5) the ability to offer insurance (including innovative products); and

`(6) regulatory and procedural transparency.'.