[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2942 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 2942

To provide for identification of misaligned currency, require action to 
           correct the misalignment, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 28, 2007

Mr. Ryan of Ohio (for himself and Mr. Hunter) introduced the following 
  bill; which was referred to the Committee on Ways and Means, and in 
 addition to the Committees on Financial Services and Foreign Affairs, 
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 concerned

_______________________________________________________________________

                                 A BILL


 
To provide for identification of misaligned currency, require action to 
           correct the misalignment, 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 AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Currency Reform 
for Fair Trade Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
     TITLE I--REMEDIES TO ADDRESS IMPORTS SUBJECT TO FUNDAMENTALLY 
                         MISALIGNED CURRENCIES

Sec. 101. Findings.
Sec. 102. Application of countervailing duties to nonmarket economy 
                            countries.
Sec. 103. Clarification to address fundamental misalignment of a 
                            currency under title VII of the Tariff Act 
                            of 1930.
         TITLE II--INTERNATIONAL MONETARY AND FINANCIAL POLICY

Sec. 201. Definitions.
Sec. 202. Findings.
Sec. 203. Report on international monetary policy and currency exchange 
                            rates.
Sec. 204. Identification of fundamentally misaligned currencies.
Sec. 205. Negotiations and consultations.
Sec. 206. Actions with respect to countries with fundamentally 
                            misaligned currencies designated for 
                            priority action.
Sec. 207. Actions with respect to countries that persistently fail to 
                            eliminate fundamentally misaligned 
                            currencies designated for priority action.
Sec. 208. International financial institution governance arrangements.
Sec. 209. Advisory Committee on International Exchange Rate Policy.
Sec. 210. Repeal of the Exchange Rates and International Economic 
                            Policy Coordination Act of 1988.

     TITLE I--REMEDIES TO ADDRESS IMPORTS SUBJECT TO FUNDAMENTALLY 
                         MISALIGNED CURRENCIES

SEC. 101. FINDINGS.

    Congress makes the following findings:
            (1) The economy and national security of the United States 
        are critically dependent upon a vibrant manufacturing and 
        agricultural base.
            (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.
            (3) The International Monetary Fund, the Group of Eight (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 concrete action to 
        redress such misalignments and imbalances.
            (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.
            (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.
            (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 China.
            (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.
            (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.
            (B) These obligations are most prominently set forth in--
                    (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));
                    (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)); 
                and
                    (iii) Articles IV and VIII of the International 
                Monetary Fund's Articles of Agreement.
            (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.

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

    (a) In General.--Paragraph (1) of section 701(a) of the Tariff Act 
of 1930 (19 U.S.C. 1671(a)) is amended by inserting ``(including a 
nonmarket economy country)'' after ``country'' each place it appears.
    (b) Use of Alternate Methodologies.--Subparagraph (E) of section 
771(5) of the Tariff Act of 1930 (19 U.S.C. 1677(5)) 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.''.
    (c) Adjustments for Export Price and Constructed Export Price.--
Subparagraph (C) of section 772(c)(1) of the Tariff Act of 1930 (19 
U.S.C. 1677a(c)(1)) 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''.
    (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.
    (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.

SEC. 103. CLARIFICATION TO ADDRESS FUNDAMENTAL MISALIGNMENT OF A 
              CURRENCY UNDER TITLE VII OF THE TARIFF ACT OF 1930.

    (a) Fundamental and Actionable Misalignment of a Currency.--Section 
771 of the Tariff Act of 1930 (19 U.S.C. 1677) is amended by adding at 
the end the following:
            ``(37) Fundamental and actionable misalignment of a 
        currency.--
                    ``(A) In general.--The term `fundamental and 
                actionable misalignment' means the situation in which 
                an exporting country's prevailing real effective 
                exchange rate is undervalued relative to the exporting 
                country's equilibrium real effective exchange rate, and 
                the administering authority determines that--
                            ``(i) the amount of the undervaluation 
                        exceeds 5 percent and has consistently exceeded 
                        5 percent on average in the 18-month period 
                        preceding the date of the calculation of the 
                        amount of the undervaluation; and
                            ``(ii) the undervaluation is the result 
                        of--
                                    ``(I) protracted, large-scale 
                                intervention in the currency exchange 
                                markets;
                                    ``(II) excessive reserve 
                                accumulation;
                                    ``(III) restrictions on, or 
                                incentives for, the inflow or outflow 
                                of capital, that is inconsistent with 
                                the goal of achieving currency 
                                convertibility; or
                                    ``(IV) any other policy or action 
                                by the country that issues the 
                                currency.
                    ``(B) Calculation of undervaluation.--In 
                calculating the amount of an undervaluation described 
                in subparagraph (A), the administering authority 
                shall--
                            ``(i) rely upon data that are publicly 
                        available, reliable, and compiled and 
                        maintained by the International Monetary Fund 
                        or, if the International Monetary Fund cannot 
                        provide such data, by other international 
                        organizations or by national governments;
                            ``(ii) use inflation-adjusted, trade-
                        weighted exchange rates; and
                            ``(iii) use the simple average of the 
                        macroeconomic-balance approach, the reduced-
                        form-real-exchange-rate approach, and the 
                        purchasing-power-parity approach.
                    ``(C) Methodologies defined.--For purposes of 
                subparagraph (B)(iii)--
                            ``(i) the term `macroeconomic-balance 
                        approach' means a methodology under which the 
                        level of exchange rate misalignment is defined 
                        as the change in the real effective exchange 
                        rate needed to achieve equilibrium in the 
                        balance of payments;
                            ``(ii) the term `reduced-form-real-
                        exchange-rate approach' means a methodology 
                        under which the level of exchange rate 
                        misalignment is defined as the difference 
                        between the observed real effective exchange 
                        rate and the real exchange rate predicted by an 
                        econometric model using explanatory variables, 
                        including measures of the rate of productivity 
                        growth, terms of trade, and net foreign asset 
                        position; and
                            ``(iii) the term `purchasing-power-parity 
                        approach' means a methodology under which the 
                        level of exchange rate misalignment is defined 
                        as the difference between the observed real 
                        exchange rate and the real exchange rate that 
                        would equalize prices for a basket of goods 
                        across countries, once prices have been 
                        converted into a common currency.
                    ``(D) Real effective exchange rate defined.--For 
                purposes of this paragraph, the term `real effective 
                exchange rate' means an inflation-adjusted, trade-
                weighted exchange rate.''.
    (b) Amendments to Definition of Countervailable Subsidy.--
            (1) Financial contribution.--Paragraph (5)(D) of such 
        section is amended--
                    (A) by striking ``The term'' and inserting ``(i) 
                The term'';
                    (B) by redesignating clauses (i) through (iv) as 
                subclauses (I) through (IV), respectively; and
                    (C) by adding at the end the following new clause:
                    ``(ii) A currency that is in fundamental and 
                actionable misalignment (as defined in paragraph (37)) 
                shall constitute a financial contribution for purposes 
                of this subparagraph.''.
            (2) Benefit conferred.--Paragraph (5)(E) of such section, 
        as amended by section 101(b) of this Act, is further amended--
                    (A) in clause (iii), by striking ``and'' at the 
                end;
                    (B) in clause (iv), by striking the period at the 
                end and inserting ``, and''; and
                    (C) by inserting after clause (iv) the following 
                new clause:
                            ``(v) in the case of currency that is in 
                        fundamental and actionable misalignment (as 
                        defined in paragraph (37)), if the price of 
                        exported goods in United States dollars is less 
                        than what the price of such goods would be 
                        without the misalignment.''.
            (3) Specificity.--Paragraph (5A) of such section is amended 
        by adding at the end the following new sentence:
        ``For purposes of this paragraph, a currency that is in 
        fundamental and actionable misalignment (as such term is 
        defined in paragraph (37)) shall be deemed to be specific.''.
    (c) Clarification Under Antidumping Law.--
            (1) In general.--For purposes of an antidumping 
        investigation or review under title VII of the Tariff Act of 
        1930 (19 U.S.C. 1671 et seq.), the administering authority 
        shall ensure a fair comparison of the export price or the 
        constructed export price with the normal value by adjusting the 
        price used to establish export price or constructed export 
        price to offset any fundamental and actionable misalignment of 
        the currency of the exporting country.
            (2) Definitions.--For purposes of paragraph (1)--
                    (A) the term ``administering authority'' has the 
                meaning given the term in paragraph (1) of section 771 
                of the Tariff Act of 1930; and
                    (B) the term ``fundamental and actionable 
                misalignment'' has the meaning given the term in 
                paragraph (37) of such section (as added by subsection 
                (a)).
            (3) Adjustments for export price and constructed export 
        price.--Paragraph (2) of section 772(c) of the Tariff Act of 
        1930 (19 U.S.C. 1677a(c)) is amended--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by striking the period at 
                the end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) the amount of any fundamental and actionable 
                misalignment (as defined in section 771(37)).''.
    (d) Amendments to Definition of Nonmarket Economy Country.--
Subparagraph (B) of section 771(18) of the Tariff Act of 1930 (19 
U.S.C. 1677(18)) is amended--
            (1) in clause (v), by striking ``and'' at the end;
            (2) by redesignating clause (vi) as clause (vii); and
            (3) by inserting after clause (v) the following new clause:
                            ``(vi) whether in the view of the 
                        administering authority the currency of the 
                        foreign country is in fundamental and 
                        actionable misalignment (as defined in 
                        paragraph (37)), and''.
    (e) Application to 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 (19 U.S.C. 3438), the 
amendments made by this section shall apply with respect to goods from 
Canada and Mexico.

         TITLE II--INTERNATIONAL MONETARY AND FINANCIAL POLICY

SEC. 201. DEFINITIONS.

    In this title:
            (1) Administering authority.--The term ``administering 
        authority'' has the meaning given the term in section 771(1) of 
        the Tariff Act of 1930.
            (2) Fundamental misalignment of a currency.--
                    (A) In general.--The term ``fundamental 
                misalignment'' means the situation in which a country's 
                prevailing real effective exchange rate is undervalued 
                relative to the country's equilibrium real effective 
                exchange rate, and the Secretary determines that the 
                amount of the undervaluation exceeds 5 percent and has 
                consistently exceeded 5 percent in the 18-month period 
                preceding the date of the calculation of the amount of 
                the undervaluation.
                    (B) Calculation of undervaluation.--In calculating 
                the amount of an undervaluation described in 
                subparagraph (A), the Secretary shall--
                            (i) rely upon data that are publicly 
                        available, reliable, and compiled and 
                        maintained by the International Monetary Fund 
                        or, if the International Monetary Fund cannot 
                        provide such data, by other international 
                        organizations or by national governments;
                            (ii) use inflation-adjusted, trade-weighted 
                        exchange rates; and
                            (iii) use the macroeconomic-balance 
                        approach, the reduced-form-real-exchange-rate 
                        approach, and the purchasing-power-parity 
                        approach.
                    (C) Methodologies defined.--For purposes of 
                subparagraph (B)(iii)--
                            (i) the term ``macroeconomic-balance 
                        approach'' means a methodology under which the 
                        level of exchange rate misalignment is defined 
                        as the change in the real effective exchange 
                        rate needed to achieve equilibrium in the 
                        balance of payments;
                            (ii) the term ``reduced-form-real-exchange-
                        rate approach'' means a methodology under which 
                        the level of exchange rate misalignment is 
                        defined as the difference between the observed 
                        real effective exchange rate and the real 
                        exchange rate predicted by an econometric model 
                        using explanatory variables, including measures 
                        of the rate of productivity growth, terms of 
                        trade, and net foreign asset position; and
                            (iii) the term ``purchasing-power-parity 
                        approach'' means a methodology under which the 
                        level of exchange rate misalignment is defined 
                        as the difference between the observed real 
                        exchange rate and the real exchange rate that 
                        would equalize prices for a basket of goods 
                        across countries, once prices have been 
                        converted into a common currency.
            (3) Fundamentally misaligned currency.--The term 
        ``fundamentally misaligned currency'' means a foreign currency 
        that is in fundamental misalignment.
            (4) Real effective exchange rate.--The term ``real 
        effective exchange rate'' means an inflation-adjusted, trade-
        weighted exchange rate.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.

SEC. 202. FINDINGS.

    Congress makes the following findings:
            (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.
            (2) Exchange rates among major trading nations are 
        occasionally manipulated or fundamentally misaligned due to 
        direct or indirect governmental intervention in the exchange 
        market.
            (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.
            (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.
            (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.
            (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.
            (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.
            (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.

SEC. 203. REPORT ON INTERNATIONAL MONETARY POLICY AND CURRENCY EXCHANGE 
              RATES.

    (a) Reports Required.--
            (1) In general.--Not later than March 15 and September 15 
        of each calendar year, the Secretary, after consulting with the 
        Chairman of the Board of Governors of the Federal Reserve 
        System and the Advisory Committee on International Exchange 
        Rate Policy, shall submit to Congress, a written report on 
        international monetary policy and currency exchange rates.
            (2) Consultations.--On or before March 30 and September 30 
        of each year, the Secretary shall appear, if requested, before 
        the Committee on Banking, Housing, and Urban Affairs and the 
        Committee on Finance of the Senate and the Committee on 
        Financial Services and the Committee on Ways and Means of the 
        House of Representatives to provide testimony on the reports 
        submitted pursuant to paragraph (1).
    (b) Content of Reports.--Each report submitted under subsection (a) 
shall contain--
            (1) an analysis of currency market developments and the 
        relationship between the United States dollar and the 
        currencies of major economies and trading partners of the 
        United States;
            (2) a review of the economic and monetary policies of major 
        economies and trading partners of the United States, and an 
        evaluation of how such policies impact currency exchange rates;
            (3) a description of any currency intervention by the 
        United States or other major economies or trading partners of 
        the United States, or other actions undertaken to adjust the 
        actual exchange rate relative to the United States dollar;
            (4) an evaluation of the domestic and global factors that 
        underlie the conditions in the currency markets, including--
                    (A) monetary and financial conditions;
                    (B) accumulation of foreign assets;
                    (C) macroeconomic trends;
                    (D) trends in current and financial account 
                balances;
                    (E) the size, composition, and growth of 
                international capital flows;
                    (F) the impact of the external sector on economic 
                growth;
                    (G) the size and growth of external indebtedness;
                    (H) trends in the net level of international 
                investment; and
                    (I) capital controls, trade, and exchange 
                restrictions;
            (5) a list of currencies designated as fundamentally 
        misaligned currencies pursuant to section 204(a)(2), and a 
        description of any economic models or methodologies used to 
        establish the list;
            (6) a list of currencies designated for priority action 
        pursuant to section 204(a)(3);
            (7) a description of any consultations conducted or other 
        steps taken pursuant to section 205, 206, or 207; and
            (8) a description of any determination made pursuant to 
        section 208(a).
    (c) Consultations.--The Secretary shall consult with the Chairman 
of the Board of Governors of the Federal Reserve System and the 
Advisory Committee on International Exchange Rate Policy with respect 
to the preparation of each report required under subsection (a). Any 
comments provided by the Chairman of the Board of Governors of the 
Federal Reserve System or the Advisory Committee on International 
Exchange Rate Policy 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 to Congress after 
taking into account all such comments received.

SEC. 204. IDENTIFICATION OF FUNDAMENTALLY MISALIGNED CURRENCIES.

    (a) Identification.--
            (1) In general.--The Secretary shall analyze on a 
        semiannual basis the prevailing real exchange rates between the 
        United States dollar and foreign currencies.
            (2) Designation of fundamentally misaligned currencies.--As 
        a result of the analysis conducted under paragraph (1), the 
        Secretary shall identify any foreign currency that is in 
        fundamental misalignment and shall designate such currency as a 
        fundamentally misaligned currency.
            (3) Designation of currencies for priority action.--The 
        Secretary shall designate a currency identified under paragraph 
        (2) for priority action if the country that issues such 
        currency is--
                    (A) engaging in protracted large-scale intervention 
                in the currency exchange market;
                    (B) engaging in excessive reserve accumulation;
                    (C) introducing or substantially modifying for 
                balance of payments purposes a restriction on, or 
                incentive for, the inflow or outflow of capital, that 
                is inconsistent with the goal of achieving full 
                currency convertibility; or
                    (D) pursuing any other policy or action that, in 
                the view of the Secretary, warrants designation for 
                priority action.
    (b) Reports.--The Secretary shall include a list of any foreign 
currency designated under paragraph (2) or (3) of subsection (a) in 
each report required by section 203.

SEC. 205. NEGOTIATIONS AND CONSULTATIONS.

    (a) In General.--Upon designation of a currency pursuant to section 
204(a)(2), the Secretary shall seek bilateral consultations with the 
country that issues such currency in order to facilitate the adoption 
of appropriate policies to address the fundamental misalignment.
    (b) Consultations Involving Currencies Designated for Priority 
Action.--With respect to each currency designated for priority action 
pursuant to section 204(a)(3), the Secretary shall, in addition to the 
consultations with the country described in subsection (a)--
            (1) seek the advice of the International Monetary Fund with 
        respect to the Secretary's findings in the report submitted to 
        Congress pursuant to section 203(a); and
            (2) encourage other governments, whether bilaterally or in 
        appropriate multinational fora, to join the United States in 
        seeking the adoption of appropriate policies by the country 
        described in subsection (a) to eliminate the fundamental 
        misalignment.

SEC. 206. ACTIONS WITH RESPECT TO COUNTRIES WITH FUNDAMENTALLY 
              MISALIGNED CURRENCIES DESIGNATED FOR PRIORITY ACTION.

    (a) Request for IMF Action.--The United States shall inform the 
Managing Director of the International Monetary Fund of the failure of 
a country that issues a currency designated for priority action 
pursuant to section 204(a)(3) and shall request that the Managing 
Director of the International Monetary Fund--
            (1) consult with such country regarding the observance of 
        the country's obligations under article IV of the International 
        Monetary Fund Articles of Agreement, including through special 
        consultations, if necessary; and
            (2) formally report the results of such consultations to 
        the Executive Board of the International Monetary Fund within 
        180 days of the date of such request.
    (b) OPIC Financing.--The Overseas Private Investment Corporation 
shall not approve any new financing (including insurance, reinsurance, 
or guarantee) with respect to a project located within a country that 
issues a currency designated for priority action pursuant to section 
204(a)(3).
    (c) Multilateral Bank Financing.--The Secretary shall instruct the 
United States Executive Director at each multilateral bank to oppose 
the approval of any new financing (including loans, other credits, 
insurance, reinsurance, or guarantee) to the government of a country, 
or for a project located within a country, that issues a currency 
designated for priority action pursuant to section 204(a)(3).
    (d) Reports.--The Secretary shall describe any action or 
determination pursuant to subsections (a) through (c) in the first 
semiannual report required by section 203 after the date of such action 
or determination.

SEC. 207. ACTIONS WITH RESPECT TO COUNTRIES THAT PERSISTENTLY FAIL TO 
              ELIMINATE FUNDAMENTALLY MISALIGNED CURRENCIES DESIGNATED 
              FOR PRIORITY ACTION.

    (a) Actions Required.--Not later than 360 days after the date on 
which a currency is designated for priority action pursuant to section 
204(a)(3), the Secretary shall determine whether the country that 
issues such currency has eliminated the fundamental misalignment. The 
Secretary shall promptly notify Congress of such determination and 
shall publish notice of the determination in the Federal Register. If 
the Secretary determines that the country that issues such currency has 
failed to eliminate the fundamental misalignment, in addition to the 
application of the provisions of subsections (a) through (c) of section 
206, the following shall apply with respect to the country until a 
notification described in subsection (b) is published in the Federal 
Register:
            (1) Action at the wto.--The United States Trade 
        Representative shall request consultations in the World Trade 
        Organization with the country regarding the consistency of the 
        country's actions with its obligations under the WTO Agreement.
            (2) Remedial intervention.--
                    (A) In general.--The Secretary shall consult with 
                the Board of Governors of the Federal Reserve System to 
                consider undertaking remedial intervention in 
                international currency markets in response to the 
                fundamental misalignment of the currency designated for 
                priority action, and coordinating such intervention 
                with other monetary authorities and the International 
                Monetary Fund.
                    (B) Notice to country.--At the same time the 
                Secretary takes action under subparagraph (A), the 
                Secretary shall notify the country that issues such 
                currency of the consultations under subparagraph (A).
    (b) Notification.--The Secretary shall promptly notify Congress 
when a country that issues a currency designated for priority action 
pursuant to section 204(a)(3) eliminates the fundamental misalignment, 
and publish notice of the action of that country in the Federal 
Register.
    (c) Reports.--The Secretary shall describe any action or 
determination pursuant to subsection (a) or (b) in the first semiannual 
report required by section 203 after the date of such action or 
determination.

SEC. 208. 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 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 was designated a currency for 
priority action pursuant to section 204(a)(3) in the most recent report 
required by section 203. The determination shall be reported to 
Congress.
    (b) Subsequent Action.--The United States shall oppose any proposed 
change in the governance arrangement of the international financial 
institution (as defined in subsection (a)), if the Secretary renders an 
affirmative determination pursuant to subsection (a).
    (c) Further Action.--The United States shall continue to oppose any 
proposed change in the governance arrangement of the international 
financial institution, pursuant to subsection (b), until the Secretary 
determines and reports to Congress that the proposed change would not 
benefit any member of the international financial institution, in the 
form of increased voting shares or representation, that has a currency 
that is designated a currency for priority action pursuant to section 
204(a)(3).

SEC. 209. ADVISORY COMMITTEE ON INTERNATIONAL EXCHANGE RATE POLICY.

    (a) Establishment.--
            (1) In general.--There is established an Advisory Committee 
        on International Exchange Rate Policy (in this section referred 
        to as the ``Committee''). The Committee shall be responsible 
        for--
                    (A) advising the Secretary in the preparation of 
                each report to Congress on international monetary 
                policy and currency exchange rates, provided for in 
                section 203;
                    (B) advising the Congress and the President with 
                respect to--
                            (i) international exchange rates and 
                        financial policies; and
                            (ii) the impact of such policies on the 
                        economy of the United States; and
                    (C) submitting to Congress and publishing in the 
                Federal Register a statement of disagreement if a 
                majority of the members of the Committee disagree 
                with--
                            (i) a determination of the Secretary--
                                    (I) to designate or not to 
                                designate a foreign currency as a 
                                fundamentally misaligned currency 
                                pursuant to section 204(a)(2); or
                                    (II) to designate or not to 
                                designate a foreign currency for 
                                priority action pursuant to section 
                                204(a)(3); or
                            (ii) a determination of the administering 
                        authority under title VII of the Tariff Act of 
                        1930--
                                    (I) to designate or not to 
                                designate a foreign currency as a 
                                currency in fundamental and actionable 
                                misalignment (as such term is defined 
                                in section 771(37) of such Act (as 
                                added by section 103(a) of this Act)); 
                                or
                                    (II) with respect to the amount of 
                                any fundamental and actionable 
                                misalignment of a foreign currency 
                                designated as a currency in fundamental 
                                and actionable misalignment.
            (2) Membership.--
                    (A) In general.--The Committee shall be composed of 
                seven members as follows, none of whom shall be from 
                the Federal Government:
                            (i) Congressional appointees.--
                                    (I) Senate appointees.--Three 
                                persons shall be appointed by the 
                                President pro tempore of the Senate, 
                                upon the recommendation of the Chairmen 
                                and Ranking Members of the Committee on 
                                Banking, Housing, and Urban Affairs and 
                                the Committee on Finance of the Senate.
                                    (II) House appointees.--Three 
                                persons shall be appointed by the 
                                Speaker of the House of Representatives 
                                upon the recommendation of the Chairmen 
                                and Ranking Members of the Committee on 
                                Financial Services and the Committee on 
                                Ways and Means of the House of 
                                Representatives.
                            (ii) Presidential appointee.--One person 
                        shall be appointed by the President.
                    (B) Qualifications.--Persons shall be selected 
                under subparagraph (A) on the basis of their 
                objectivity and demonstrated expertise in finance, 
                economics, or currency exchange.
            (3) Terms.--Members shall be appointed for a term of 4 
        years or until the Committee terminates. An individual may be 
        reappointed to the Committee for additional terms.
            (4) Vacancies.--Any vacancy in the Committee shall not 
        affect its powers, but shall be filled in the same manner as 
        the original appointment.
    (b) Duration of Committee.--The Committee shall terminate on the 
date that is 12 years after the date of the enactment of this Act 
unless renewed by the President pursuant to section 14 of the Federal 
Advisory Committee Act (5 U.S.C. App.) for a subsequent 12-year period. 
The President may continue to renew the Committee for successive 12-
year periods by taking appropriate action prior to the date on which 
the Committee would otherwise terminate.
    (c) Public Meetings.--The Committee shall hold at least two public 
meetings each year for the purpose of accepting public comments. The 
Committee shall also meet as needed at the call of the Secretary or at 
the call of two-thirds of the members of the Committee.
    (d) Chairperson.--The Committee shall elect from among its members 
a chairperson for a term of 4 years or until the Committee terminates. 
A chairperson of the Committee may be reelected chairperson but is 
ineligible to serve consecutive terms as chairperson.
    (e) Staff.--The Secretary shall make available to the Committee 
such staff, information, personnel, administrative services, and 
assistance as the Committee may reasonably require to carry out its 
activities.
    (f) Application of Federal Advisory Committee Act.--
            (1) In general.--The provisions of the Federal Advisory 
        Committee Act (5 U.S.C. App.) shall apply to the Committee.
            (2) Exception.--Except for the annual public meeting 
        required under subsection (c), meetings of the Committee shall 
        be exempt from the requirements of subsections (a) and (b) of 
        sections 10 and 11 of the Federal Advisory Committee Act 
        (relating to open meetings, public notice, public 
        participation, and public availability of documents), whenever 
        and to the extent it is determined by the President or the 
        Secretary that such meetings will be concerned with matters the 
        disclosure of which would seriously compromise the development 
        by the United States Government of monetary and financial 
        policy.

SEC. 210. REPEAL OF THE EXCHANGE RATES AND INTERNATIONAL ECONOMIC 
              POLICY COORDINATION ACT OF 1988.

    The Exchange Rates and International Economic Policy Coordination 
Act of 1988 (22 U.S.C. 5301-5306) is repealed.
                                 <all>