[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H. Con. Res. 285 Introduced in House (IH)]






108th CONGRESS
  1st Session
H. CON. RES. 285

Expressing the concern of the Congress regarding the detrimental impact 
on the United States economy of the manipulation by foreign governments 
                          of their currencies.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 17, 2003

 Mr. Manzullo (for himself, Mr. Stenholm, Mr. Rogers of Michigan, Mr. 
Hill, Mr. Green of Wisconsin, and Mr. Hinojosa) submitted the following 
concurrent resolution; which was referred to the Committee on Ways and 
                                 Means

_______________________________________________________________________

                         CONCURRENT RESOLUTION


 
Expressing the concern of the Congress regarding the detrimental impact 
on the United States economy of the manipulation by foreign governments 
                          of their currencies.

Whereas manufacturing is critical to the health of the United States economy, 
        generating high quality products, personal opportunity, careers, wealth, 
        high standards of living, and economic growth that together enable the 
        American Dream;
Whereas the manufacturing sector faces the most intense global competition in 
        United States history, making it impossible for many firms to operate 
        profitably and earn a return on capital invested, even as manufacturing 
        costs continue to increase for many reasons, including governmental 
        actions;
Whereas in July 2000 the manufacturing sector slipped into recession and since 
        has lost 2,700,000 high paying manufacturing jobs, while the rest of the 
        economy has actually added 623,000 jobs;
Whereas industrial trade experts estimate that at least half of these 
        manufacturing job losses have been due to adverse trade movements, 
        principally due to the effects of an overvalued United States dollar;
Whereas exports of United States manufactured goods have fallen by 
        $100,000,000,000 from their peak in 2000, and account for up to 40 
        percent of the total decline in production and jobs;
Whereas manufacturing remains the most trade sensitive sector of the United 
        States economy, with one sixth of all United States manufacturing jobs, 
        and almost one quarter in durable goods production, attributable to 
        exported products;
Whereas the primary objective of the international monetary system should be to 
        facilitate international trade and investment by helping to ensure that 
        exchange rates realistically reflect the relative level of prices and 
        costs in different countries, and that they be flexible enough to 
        respond to changes, over time, in such relationships;
Whereas currency manipulation by the People's Republic of China, Japan, South 
        Korea, and Taiwan, the major Asian trading partners of the United 
        States, has contributed significantly to the loss of United States 
        manufacturing jobs since July 2000;
Whereas these 4 countries hold, in the aggregate, $1,210,000,000,000 of currency 
        reserves, half of which have been bought since 1999;
Whereas currency manipulation effectively subsidizes all exports to the United 
        States, and places additional de facto tariffs on all imports of goods 
        and services from the United States;
Whereas in its 2003 annual report, the globally respected Bank of International 
        Settlements criticized those currency practices of Asian countries that 
        seek to maintain large trade surpluses;
Whereas the International Monetary Fund has also criticized the buildup of Asian 
        currency reserves as destabilizing and advocated a floating exchange 
        rate for the People's Republic of China;
Whereas for decades the International Monetary Fund and the General Agreement on 
        Tariffs and Trade have proscribed trade-distorting currency 
        manipulation;
Whereas Article IV, Section 1(iii) of the Articles of Agreement of the 
        International Monetary Fund cautions members to ``avoid manipulating 
        exchange rates . . . in order . . . to gain an unfair competitive 
        advantage over other members'', and a related provision defines 
        manipulation to include ``protracted large-scale intervention in one 
        direction in the exchange market'';
Whereas Article XV of the General Agreement on Tariffs and Trade 1994 (as 
        defined in section 2 of the Uruguay Round Agreements Act), which is 
        binding on members of the World Trade Organization, states that members 
        ``shall not by exchange rate action frustrate the intent of the 
        provisions of this Agreement'', and the objective of that Agreement, as 
        stated in broad terms in its preamble, is ``entering into reciprocal and 
        mutually advantageous arrangements directed to the substantial reduction 
        of tariffs and other barriers to trade and to the elimination of 
        discriminatory treatment in international commerce'';
Whereas China has been manipulating the value of its currency by pegging its 
        exchange rate to the United States dollar;
Whereas China has refused to make any changes to its currency peg;
Whereas United States manufacturers doing business in China continue to face 
        other market barriers and unfair trade practices, including high 
        tariffs, subsidies, technical trade restrictions, counterfeiting, tied 
        trade, violations of intellectual property rights, and nonmarket-based 
        industrial policies that limit United States exports and increase import 
        competition;
Whereas the International Monetary Fund has advised China to adopt a more 
        flexible exchange rate policy, and has judged that such a change would 
        not have serious adverse consequences for that country;
Whereas China's current dollar accumulations now exceed $350,000,000,000 and are 
        growing at the rate of $120,000,000,000 each year--an amount that 
        approximates China's trade surplus with the Unites States;
Whereas China is engaged in massive currency intervention, through huge 
        purchases of United States dollars, to keep the yuan from appreciating, 
        despite large trade surpluses and investment inflows;
Whereas this intervention has maintained the Chinese yuan at its artificially 
        low 1994 value--which by some estimates is 40 percent below its market 
        value; and
Whereas the magnitude of the distorting effects are clear: unless addressed 
        immediately, China's currency manipulation and unfair trading practices 
        could further weaken the manufacturing sector in the United States and 
        spawn (1) massive United States trade deficits, and (2) calls for 
        protectionism, which would undermine the global economy: Now, therefore, 
        be it
    Resolved by the House of Representatives (the Senate concurring), 
That--
            (1) the Congress declares that manufacturing is an industry 
        critical to the future well-being and national security of the 
        United States and, therefore, the United States Government 
        should make greater efforts to promote innovation, reduce 
        manufacturing costs, and level the international playing field 
        for this sector;
            (2) the Congress believes that the clear intention of the 
        manipulation by Asian countries of their currencies is to 
        increase exports and restrict imports, that is, to introduce an 
        artificial element that assures that there will not be a level 
        playing field for international trade;
            (3) the Congress further believes that the manipulation by 
        the People's Republic of China of its currency violates Article 
        XV (4) of the General Agreement on Tariffs and Trade 1994 (as 
        defined in section 2 of the Uruguay Round Agreements Act), and 
        is unjustifiable and unreasonable, and burdens and restricts 
        United States commerce, under section 301 of the Trade Act of 
        1974;
            (4) in order to help achieve greater equity in competitive 
        conditions and international trade practices, the Congress 
        calls on the President--
                    (A) to vigorously enforce United States laws that 
                provide remedies to counteract the unfair foreign 
                practice of currency manipulation; and
                    (B) to encourage the harmonization of an 
                international exchange rate policy of freely floating 
                exchange rates based on market forces, where government 
                currency intervention is kept to a minimum;
            (5) the executive branch should take steps that enable the 
        dollar and other major currencies to move toward their 
        equilibrium rates by correcting market imperfections, 
        countering foreign currency manipulation, and seeking 
        cooperation among major countries in taking appropriate 
        coordinated actions;
            (6) the Congress commends the recent actions and statements 
        by the President and the Secretary of the Treasury that have 
        delivered a strong message from the United States Government 
        that the United States expects its trading partners to treat 
        the people, producers, workers, farmers, and manufacturers of 
        the United States fairly;
            (7) the Congress believes that--
                    (A) the currency of a country should be controlled 
                by the market and should reflect the true values of the 
                economy of that country; and
                    (B) the management of currencies at unnatural rates 
                distorts markets and encourages protectionism;
            (8) the Congress has directed the General Accounting Office 
        to undertake an ongoing review of currency manipulation 
        practices worldwide and their impact on the agriculture and 
        manufacturing sectors in the United States;
            (9) the Secretary of the Treasury should ensure that each 
        semiannual report due to the Congress on international economic 
        and exchange rate policies addresses the full range of currency 
        manipulation practices of foreign governments;
            (10) the Congress strongly urges the United States Trade 
        Representative to take action under section 301 of the Trade 
        Act of 1974 to combat unfair currency manipulation practices in 
        order to protect United States commerce and to gain access to 
        foreign markets for United States goods and services, should 
        negotiations fail to produce meaningful results; and
            (11) the Congress encourages the President to review all 
        other tools to level the playing field with respect to currency 
        manipulation.
                                 <all>