[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3269 Introduced in House (IH)]






108th CONGRESS
  1st Session
                                H. R. 3269

     To require certain actions to be taken against countries that 
          manipulate their currencies, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 8, 2003

 Mr. Dingell introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
     To require certain actions to be taken against countries that 
          manipulate their currencies, 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 Manipulation Prevention 
Act''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
            (1) The growth of the United States economy over the last 
        century has largely been a function of the success of the 
        manufacturing sector. 30 percent of the economic growth during 
        the 1990s was attributable to manufacturing.
            (2) Manufacturers conduct 60 percent of all research and 
        development for new products and technologies in the United 
        States. Manufacturing jobs also provide 26 percent higher wages 
        than jobs in the service sector.
            (3) Since July 2000, more than 2,700,000 jobs have been 
        lost in the manufacturing sector. That accounts for more than 
        90 percent of the jobs lost during the economic downturn.
            (4) One of the difficulties faced by United States 
        manufacturers in providing jobs is their disadvantage in 
        competing against low cost foreign products.
            (5) The low cost of products produced abroad can be caused 
        by the intervention of governments of other countries in the 
        currency markets in order to maintain their own currencies at 
        artificially low valuations.
            (6) This practice, in effect, subsidizes the exports of 
        those countries while erecting a cost barrier to goods imported 
        into those countries.
            (7) United States trading partners, such as the People's 
        Republic of China, Japan, South Korea, and Taiwan have amassed 
        more than $1,200,000,000,000 in foreign currency reserves, the 
        vast majority of which are United States dollars. In 
        particular, the intervention by the People's Republic of China 
        in the currency market has led to an undervaluation of the 
        renminbi by as much as 40 percent. This creates a 40 percent 
        subsidy for goods of that country.
            (8) The United States trade deficit with China increased 
        from $57,000,000,000 in 1998 to $103,000,000,000 in 2002.
            (9) The United States has the right and power to redress 
        unfair competitive practices in international trade that 
        involve currency manipulation.
            (10) Section 3004 of the Omnibus Trade and Competitiveness 
        Act of 1988 (22 U.S.C. 5304) requires the Secretary of the 
        Treasury to undertake multilateral or bilateral negotiations if 
        it is found that a country is manipulating its currency, and 
        Article IV of the Articles of Agreement of the International 
        Monetary Fund prohibits currency manipulation.
            (11) Article XV of the GATT 1994, as defined in section 2 
        of the Uruguay Round Agreements Act (19 U.S.C. 3501), and the 
        Agreement on Subsidies and Countervailing Measures referred to 
        in section 101(d)(12) of that Act (19 U.S.C. 3511(12)) both 
        suggest that currency manipulation in order to gain an unfair 
        trading advantage would violate the intent of those agreements.

SEC. 3. TRADE NEGOTIATING OBJECTIVE.

    Section 2102(b) of the Trade Act of 2002 (19 U.S.C. 3802(b)) is 
amended by adding at the end the following:
            ``(18) Exchange rate policy.--The principal negotiating 
        objective of the United States with respect to currency 
        exchange rates is to ensure that governmental intervention in 
        currency markets to stabilize short-term disruptive market 
        conditions is of limited duration and is carried out in 
        consultation with countries with major economies.''.

SEC. 4. REPORT ON CURRENCY MANIPULATION.

    The Secretary of Commerce shall, not later than 6 months after the 
date of the enactment of this Act, and not later than the end of each 
6-month period thereafter, submit to the Congress, the President, the 
United States Trade Representative, and the Secretary of the Treasury, 
a report--
            (1) describing actions by foreign governments to manipulate 
        the currencies of their countries in order to increase exports 
        from those countries to the United States or to limit imports 
        of United States products into those countries, and describing 
        the extent of such currency manipulation;
            (2) analyzing whether, and to what extent--
                    (A) currency manipulation described under paragraph 
                (1) affects the manufacturing sector in the United 
                States; and
                    (B) reduction of the manipulation and of the 
                accumulation of United States dollars by foreign 
                governments might affect United States monetary policy; 
                and
            (3) setting forth all remedies against such currency 
        manipulation that are available under applicable trade 
        agreements and international institutions such as the World 
        Trade Organization and the International Monetary Fund.

SEC. 5. PROCEEDINGS.

    (a) Action by the President.--In any case in which the Secretary of 
Commerce, in a report under section 4, identities a government of a 
foreign country that is manipulating the currency of that country, the 
President, within 45 days after the report is issued, shall initiate 
negotiations with that country for the purpose of ending the currency 
manipulation. If the President, within 45 days after the report under 
section 4 is issued, is unable to reach an agreement with that country 
to end the currency manipulation, the President shall take the 
necessary steps to initiate proceedings under the applicable trade 
agreements or under the auspices of the World Trade Organization or 
other applicable international institutions, and under applicable 
United States law, including section 301 of the Trade Act of 1974, 
against that country on account of that currency manipulation.
    (b) Compensation.--
            (1) In general.--In the course of, or in addition to, 
        action taken under paragraph (1) with respect to a country, the 
        President shall seek compensation from that country equivalent 
        to the damages incurred by United States manufacturers and 
        other adversely affected parties in the United States on 
        account of the currency manipulation of that country. The 
        President is not required to seek such compensation if he 
        determines that to do so would not be in the national interests 
        of the United States.
            (2) Report if compensation not sought.--In any case in 
        which the President does not seek compensation under paragraph 
        (1), the President shall transmit to the Committee on Energy 
        and Commerce and the Committee on Ways and Means of the House 
        of Representatives, and to the Committee on Commerce, Science 
        and Transportation and the Committee on Finance of the Senate a 
        detailed explanation of the President's determination of 
        national interest.

SEC. 6. CURRENCY MANIPULATION DEFINED.

    In this Act, the term ``currency manipulation'' means--
            (1) manipulation of exchange rates by a country in order to 
        gain an unfair competitive advantage as stated in Article IV of 
        the Articles of Agreement of the International Monetary Fund;
            (2) sustained currency intervention by a country in one 
        direction, through mandatory foreign exchange sales at a 
        country's central bank at a fixed exchange rate; or
            (3) other mechanisms used by a country to maintain its 
        currency at at fixed exchange rate relative to the currency [of 
        another country].
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