[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1586 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1586

 To authorize appropriate action if the negotiations with the People's 
 Republic of China regarding China's undervalued currency and currency 
                    manipulation are not successful.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 5, 2003

   Mr. Schumer (for himself, Mr. Bunning, Mrs. Dole, Mr. Durbin, Mr. 
Graham of South Carolina, and Mr. Bayh) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To authorize appropriate action if the negotiations with the People's 
 Republic of China regarding China's undervalued currency and currency 
                    manipulation are not successful.

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

SECTION 1. FINDINGS.

    Congress makes the following findings:
            (1) The currency of the People's Republic of China, the 
        yuan, is artificially pegged at a level significantly below its 
        market value. Economists estimate the yuan to be undervalued by 
        between 15 percent and 40 percent or an average of 27.5 
        percent.
            (2) The undervaluation of the yuan makes exports from the 
        People's Republic of China less expensive for foreign consumers 
        and makes foreign products more expensive for Chinese 
        consumers. The effective result is a significant subsidization 
        of China's exports and a virtual tariff on foreign imports, 
        leading the People's Republic of China to enjoy significant 
        trade surpluses with its international trading partners. The 
        United States trade deficit with China has widened from 
        $57,000,000,000 in 1998 to $103,000,000,000 in 2002, resulting 
        in an aggregate deficit with China of over $396,000,000,000 for 
        that 5-year period.
            (3) China's undervalued currency and the United States 
        trade deficit with the People's Republic of China is 
        contributing to significant United States job losses and 
        harming United States businesses. In particular the United 
        States manufacturing sector has lost over 2,600,000 jobs since 
        March 2001, which accounts for approximately 90 percent of the 
        total United States job losses.
            (4) The Government of the People's Republic of China has 
        intervened in the foreign exchange markets to hold the value of 
        the yuan within an artificial trading range. China's foreign 
        reserves are estimated to be over $345,000,000,000 as of June 
        2003, and have increased at a level higher than that of any 
        other country.
            (5) China's undervalued currency and the Chinese 
        Government's intervention in the value of its currency violates 
        the spirit and letter of the world trading system of which the 
        People's Republic of China is now a member.
            (6) The Government of the People's Republic of China has 
        failed to promptly address concerns raised by the United States 
        and the international community regarding the value of its 
        currency.
            (7) Article XXI of the GATT 1994 (as defined in section 
        2(1)(B) of the Uruguay Round Agreements Act (19 U.S.C. 
        3501(1)(B)) allows a member of the World Trade Organization to 
        take any action which it considers necessary for the protection 
        of its essential security interests. Protecting the United 
        States manufacturing sector is essential to the interests of 
        the United States.

SEC. 2. NEGOTIATIONS AND CERTIFICATION REGARDING THE CURRENCY VALUATION 
              POLICY OF THE PEOPLE'S REPUBLIC OF CHINA.

    (a) In General.--Notwithstanding the provisions of title I of 
Public Law 106-286 (19 U.S.C. 2431 note), on and after the date that is 
180 days after the date of enactment of this Act, unless a 
certification described in subsection (b) has been made to Congress, in 
addition to any other duty, there shall be imposed a rate of duty of 
27.5 percent ad valorem on any article that is the growth, product, or 
manufacture of the People's Republic of China, imported directly or 
indirectly into the United States.
    (b) Certification.--The certification described in this subsection 
means a certification by the President to Congress that the People's 
Republic of China is no longer manipulating the rate of exchange 
between its currency and the United States dollar for purposes of 
preventing an effective balance of payments and gaining an unfair 
competitive advantage in international trade. The certification shall 
also include a determination that the currency of the People's Republic 
of China is valued in accordance with accepted market-based trading 
policies.
    (c) Negotiations.--Beginning on the date of enactment of this Act, 
the Secretary of the Treasury, in consultation with the United States 
Trade Representative, shall begin negotiations with the People's 
Republic of China to ensure that the People's Republic of China adopts 
a process that leads to a market-based system of currency valuation.
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