China

Summary

A representative's views on China is based on the country's human rights violations, the US trade relations with China, and how the representative views China's currency policies. In determining a representative's stance, the following items are addressed.

  • Trade relations with Chinarnrn
    • Does the representative believe that China should have most favored nation trading status
    • How does the representative propose dealing with the US trade deficit with China
  • Chinese Currency Manipulationrnrn
    • Does the representative believe that China manipulates it's currency
    • How does the representative propose dealing with that manipulation
  • Intellectual Property Violationsrnrn
    • How would the representative deal with China's intellectual property violations
  • Human Rights Violationsrnrn
    • How does the representative propose dealing with China's human rights violations 
  • Taiwanrnrn
    • Does the representative believe that the US should be involved with China-Taiwan relations
  • Tibetrnrn
    • What should US policy be towards Tibet and should be engage in talks with the Dalai Lama

  

Legislation

Trade Normalization with China Offical Summary Bill Text
Currency Reform and Fair Trade Act of 2010 Offical Summary Bill Text
Currency Exchange Rate Oversight Reform Act of 2011 Offical Summary Bill Text

 

Trade Normalization

In May of 2000, the House passed an extension on normalized trade with China (Summary, Text). The Senate passed the legislation in September of 2000, but only after numerous resolutions expressing the sense of the senate on numerous subjects related to China. Most of these votes were nearly unanimous.

The legislation had a number of items included in addition to continuing normal trade relation status with China. The legislation addressed China's inclusion into the World Trade Organization (WTO), trade compliance rules for China, provisions to prevent slave labor goods, and the future inclusion of Taiwan into the WTO.

 

Currency Reform for Fair Trade Act

In 2010, the House passed the Currency Reform for Fair Trade Act (Summary, Text). Despite passing the House 348-79, the act was not addressed in the Senate. The summary for the legislation is shown below.

Currency Reform for Fair Trade Act - (Sec. 2) Amends the Tariff Act of 1930 to include as a "countervailable subsidy" requiring action under a countervailing duty or antidumping duty proceeding the benefit conferred on merchandise imported into the United States from foreign countries with fundamentally undervalued currency.

Defines "benefit conferred," in cases where the currency of a foreign country is exchanged for foreign currency (i.e., U.S. dollars) obtained from export transactions, as the difference between:

  • the amount of currency provided by a foreign country in which the subject merchandise is produced;
  • the amount of currency such country would have provided if the real effective exchange rate of its currency were not fundamentally undervalued.

Declares that the fact that such a subsidy is also provided in circumstances not involving export shall not, for that reason alone, mean it cannot be considered export contingent and actionable under a countervailing duty and antidumping duty proceeding.

Requires the administering authority to determine that the currency of a foreign country is fundamentally undervalued if for an 18-month period:

  • the government of the country engages in protracted, large-scale intervention in one or more foreign exchange markets;
  • the country's real effective exchange rate is undervalued by at least 5%;
  • the country has experienced significant and persistent global current account surpluses;
  • the country's government has foreign asset reserves exceeding the amount necessary to repay all its debt obligations falling due within the coming 12 months, 20% percent of the country's money supply, and the value of the country's imports during the previous 4 months.

Requires the use, for calculating a country's "real effective exchange rate undervaluation," of certain guidelines of the Consultative Group on Exchange Rate Issues of the International Monetary Fund (IMF) or, if those guidelines are not available, generally accepted economic and econometric techniques and methodologies. Requires the use, also, of inflation-adjusted, trade-weighted exchange rates.

(Sec. 3) Directs the Comptroller General to report to Congress on the implementation of this Act.

 

Visit with the Dalai Lama

On July 16, 2011 President Obama met with the Dalai Lama at the White House. Although the Chinese government loudly denounced the meeting which was held in the map room and not in the Oval Office. A spokesman for the Chinese foreign ministry said the following about the meeting.

By allowing the Dalai Lama to visit the U.S. and arranging the top leader to meet him, the United States has seriously violated basic principles of international relations and its own repeated solemn pledges, and harmed Sino-U.S. relations," Ma's statement said. "China therefore expresses its strong indignation and firm opposition."

 

Summary

S 1619 is the Currency Exchange Rate Oversight Reform Act of 2011. The legislation does not discuss China specifically, but it does deal with currency manipulation and is clearly intended for China.

On October 6, 2011 the US Senate passed the Currency Exchange Rate Oversight Reform Act of 2011. While the legislation does not mention China or the Yuan, it is clearly intended to address China's manipulation of it's currency. The legislation establishes three steps to be taken in relation to possible currency manipulation. The first is the generation of a report by the Secretary of the Treasury that would identify any countries that may be actively manipulating the value of their currency to benefit trade balances or other sections of their economy. After that, the legislaiton addresses immediate action to be taken against countries identified as currency manipulators, and actions against countries that continue to refuse to correct manipulation practices.

Immediate remedies include the involvement of the IMF and the OPIC, and the correction of the price used to establish export price or constructed export price. If countries refuse to address the problem within a year of being identified as a currency manipulator, the IMF is involved and the US will consider involvement in international currency markets.

 

Written Report

The legislation would require that the Secretary of the Treasury make written reports twice a year to Congress concerning possible currency manipulation. Specifically, the legislation calls for the report to 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—rnrn
    1. (A) monetary and financial conditions;
    2. (B) accumulation of foreign assets;
    3. (C) macroeconomic trends;
    4. (D) trends in current and financial account balances;
    5. (E) the size, composition, and growth of international capital flows;
    6. (F) the impact of the external sector on economic growth;
    7. (G) the size and growth of external indebtedness;
    8. (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 4(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 4(a)(3).
  7. An identification of the nominal value associated with the medium-term equilibrium exchange rate, relative to the United States dollar, for each currency listed under paragraph (6).
  8. A description of any consultations conducted or other steps taken pursuant to section 5, 6, or 7, including any actions taken to eliminate the fundamental misalignment.
  9. A description of any determination made pursuant to section (a).

 

Classification Currency Manipulators

Pursuant to that report, the Secretary will look at currencies of countries that have significant bilateral trade flows with the United States and designate fundamentally misaligned currencies. Among these countries and currencies, the Secretary will designate certain currencies for "priority action" if the country is doing the following:

  • engaging in protracted large-scale intervention in the currency exchange market, particularly if accompanied by partial or full sterilization;
  • engaging in excessive and prolonged official or quasi-official accumulation of foreign exchange reserves and other foreign assets, for balance of payments purposes;
  • 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
  • pursuing any other policy or action that, in the view of the Secretary, warrants designation for priority action.

 

Short Term Actions

Once the currency manipulators are identified, an immediate action of bilateral talks is called for between the US and the identified country. If the offending country has not adopted policies to address the currency misalignment within 90 days, a number of actions will be taken.

First, the administering authority will adjust the price used to establish export price or constructed export price to reflect the fundamental misalignment of the currency of the exporting country.

Second, the Managing Director of the International Monetary Fund will consult with the offending 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. The Director will also formally report the results of the consultations to the Executive Board of the International Monetary Fund within 180 days of the date of such request.

Finally, the Overseas Private Investment Corporation (OPIC) shall not approve any new financing (including insurance, reinsurance, or guarantee) with respect to a project located within the country.

 

Long Term Actions

If the offending country has not addressed the currency manipulation within 360 days, the Secretary of the Treasury will notify Congress and two actions may be taken. First, 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. Second, the Secretary will consult with the Board of Governors of the Federal Reserve System to consider undertaking remedial intervention in international currency markets.

 

Vote

S 1619 was passed through the Senate on October 6, 2011. It received the support of most of the Democrats and a portion of the Republicans.

 

Legislation

112TH CONGRESS 1ST SESSION S. 1619 AN ACT 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. This Act may be cited as the ‘‘Currency Exchange Rate Oversight Reform Act of 2011’’.

SEC. 2. DEFINITIONS.

In this Act: (1) ADMINISTERING AUTHORITY.—The term ‘‘administering authority’’ means the authority referred to in section 771(1) of the Tariff Act of 1930 (19 U.S.C. 1677(1)).

(2) AGREEMENT ON GOVERNMENT PROCUREMENT.—The term ‘‘Agreement on Government Procurement’’ means the agreement referred to in section 101(d)(17) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(17)).

(3) COUNTRY.—The term ‘‘country’’ means a foreign country, dependent territory, or possession of a foreign country, and may include an association of 2 or more foreign countries, dependent territories, or possessions of countries into a customs union outside the United States.

(4) EXPORTING COUNTRY.—The term ‘‘exporting country’’ means the country in which the subject merchandise is produced or manufactured.

(5) FUNDAMENTAL MISALIGNMENT.—The term ‘‘fundamental misalignment’’ means a significant and sustained undervaluation of the prevailing real effective exchange rate, adjusted for cyclical and transitory factors, from its medium-term equilibrium level.

(6) FUNDAMENTALLY MISALIGNED CURRENCY.—The term ‘‘fundamentally misaligned currency’’ means a foreign currency that is in fundamental misalignment.

(7) REAL EFFECTIVE EXCHANGE RATE.—The term ‘‘real effective exchange rate’’ means a weighted average of bilateral exchange rates, expressed in price-adjusted terms.

(8) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Treasury.

(9) STERILIZATION.—The term ‘‘sterilization’’ means domestic monetary operations taken to neutralize the monetary impact of increases in reserves associated with intervention in the currency exchange market.

(10) SUBJECT MERCHANDISE.—The term ‘‘subject merchandise’’ means the merchandise subject to an antidumping investigation, review, suspension agreement, or order referred to in section 771(25) of the Tariff Act of 1930 (19 U.S.C. 1677(25)).

(11) WTO AGREEMENT.—The term ‘‘WTO Agreement’’ means the agreement referred to in section (9) of the Uruguay Round Agreements Act  U.S.C. 3501(9)).

 

SEC. 3. REPORT ON INTERNATIONAL MONETARY POLICY AND CURRENCY EXCHANGE RATES.

(a) REPORTS REQUIRED.—

(1) IN GENERAL.—Not later than March 7 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 and make public, a written report on international monetary policy and currency exchange rates.

(2) CONSULTATIONS.—On or before March 15 and September 30 of each calendar 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 the following:

(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 currencymarkets, 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 4(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 4(a)(3).

(7) An identification of the nominal value associated with the medium-term equilibrium exchange rate, relative to the United States dollar, for each currency listed under paragraph (6).

(8) A description of any consultations conducted or other steps taken pursuant to section 5, 6, or 7, including any actions taken to eliminate the fundamental misalignment.

(9) A description of any determination made pursuant to section 9(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 comments received from the Chairman and the Advisory Committee.

 

SEC. 4. IDENTIFICATION OF FUNDAMENTALLY MISALIGNED CURRENCIES.

(a) IDENTIFICATION.—

(1) IN GENERAL.—The Secretary shall analyze on a semiannual basis the prevailing real effective exchange rates of foreign currencies.

(2) DESIGNATION OF FUNDAMENTALLY MISALIGNED CURRENCIES.—With respect to the currencies of countries that have significant bilateral trade flows with the United States, and currencies that are otherwise significant to the operation, stability, or orderly development of regional or global capital markets, the Secretary shall determine whether any such currency 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, particularly if accompanied by partial or full sterilization;

(B) engaging in excessive and prolonged official or quasi-official accumulation of foreign exchange reserves and other foreign assets, for balance of payments purposes;

(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) and the data and reasoning underlying such designations in each report required by section 3.

 

SEC. 5. NEGOTIATIONS AND CONSULTATIONS.

(a) IN GENERAL.—Upon designation of a currency pursuant to section 4(a)(2), the Secretary shall seek to consult bilaterally 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 4(a)(3), the Secretary shall, in addition to seeking to consult with a country pursuant to 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 3(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. 6. FAILURE TO ADOPT APPROPRIATE POLICIES

(a) IN GENERAL.—Not later than 90 days after the date on which a currency is designated for priority action pursuant to section 4(a)(3), the Secretary shall determine whether the country that issues such currency has adopted appropriate policies, and taken identifiable action, to eliminate the fundamental misalignment. The Secretary shall promptly notify Congress of such determination and publish notice of the determination in the Federal Register. If the Secretary determines that the country that issues such currency has failed to adopt appropriate policies, or take identifiable action, to eliminate the fundamental misalignment, the following shall apply with respect to the country until a notification described in section 7(b) is published in the Federal Register:

(1) ADJUSTMENT UNDER ANTIDUMPING LAW.— For purposes of an antidumping investigation under subtitle B of title VII of the Tariff Act of 1930 (19 U.S.C. 1673 et seq.), or a review under subtitle C of such Act (19 U.S.C. 1675 et seq.), the following shall apply:

(A) IN GENERAL.—The administering authority shall ensure a fair comparison between the export price and the normal value by adjusting the price used to establish export price or constructed export price to reflect the fundamental misalignment of the currency of the exporting country.

(B) SALES SUBJECT TO ADJUSTMENT.— The adjustment described in subparagraph (A) shall apply with respect to subject merchandise sold on or after the date that is 30 days after the date the currency of the exporting country is designated for priority action pursuant to section 4(a)(3).

(2) FEDERAL PROCUREMENT.—(A) IN GENERAL.—The President shall prohibit the procurement by the Federal Government of products or services from the country.

(B) EXCEPTION.—The prohibition provided for in subparagraph (A) shall not apply with respect to a country that is a party to the Agreement on Government Procurement.

(3) REQUEST FOR IMF ACTION.—The United States shall inform the Managing Director of the International Monetary Fund of the failure of the country to adopt appropriate policies, or to take identifiable action, to eliminate the fundamental misalignment, and the actions the country is engaging in that are identified in section 4(a)(3), and shall request that the Managing Director of the International Monetary Fund—

(A) 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 (B) 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.

(4) 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 the country.

(5) MULTILATERAL BANK FINANCING.—

(A) IN GENERAL.—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 the country or for a project located within the country.

(B) MULTILATERAL BANK.—The term ‘‘multilateral bank’’ includes each of the international financial institutions described in section 1701(c)(2) of the International Financial Institutions Act (22 U.S.C. 262r).

(b) WAIVER.—

(1) IN GENERAL.—The President may waive any action provided for under subsection (a) if the President determines that— (A) taking such action would cause serious harm to the national security of the United States; or (B) it is in the vital economic interest of the United States to do so and taking such action would have an adverse impact on the United States economy greater than the benefits of such action.

(2) NOTIFICATION.—The President shall promptly notify Congress of a determination under paragraph (1) (and the reasons for the determination, if made under paragraph (1)(B)) and shall publish notice of the determination (and the reasons for the determination, if made under paragraph (1)(B)) 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 3 after the date of such action or determination.

 

SEC. 7. PERSISTENT FAILURE TO ADOPT APPROPRIATE POLICIES.

(a) PERSISTENT FAILURE TO ADOPT APPROPRIATE POLICIES.—Not later than 360 days after the date on which a currency is designated for priority action pursuant to section 4(a)(3), the Secretary shall determine whether the country that issues such currency has adopted appropriate policies, and taken identifiable action, to eliminatethe 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 adopt appropriate policies, or take identifiable action, to eliminate the fundamental misalignment, in addition to the actions described in section 6(a), 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. In doing so, the Secretary shall consider the impact of such intervention on domestic economic growth and stability, including the impact on interest rates.

(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 4(a)(3) adopts appropriate policies, or takes identifiable action, to eliminate the fundamental misalignment, and publish notice of the action of that country in the Federal Register.

(c) WAIVER.—

(1) IN GENERAL.—The President may waive any action provided for under this section, or extend any waiver provided for under section 6(b), if the President determines that—

(A) taking such action would cause serious harm to the national security of the United States; or

(B) it is in the vital economic interest of the United States to do so, and that taking such action would have an adverse impact on the United States economy substantially out of proportion to the benefits of such action.

(2) NOTIFICATION.—The President shall promptly notify Congress of a determination under paragraph (1) (and the reasons for the determination, if made under paragraph (1)(B)) and shall publish notice of the determination (and the reasons for the determination, if made under paragraph (1)(B)) in the Federal Register.

(d) DISAPPROVAL OF WAIVER.—If the President waives an action pursuant to subsection (c)(1)(B), or extends a waiver provided for under section 6(b)(1)(B), the waiver shall cease to have effect upon the enactment of a resolution of disapproval described in section 8(a)(2).

(e) REPORTS.—The Secretary shall describe any action or determination pursuant to subsection (a), (b), or (c) in the first semiannual report required by section 3 after the date of such action or determination.

 

SEC. 8. CONGRESSIONAL DISAPPROVAL OF WAIVER.

(a) RESOLUTION OF DISAPPROVAL.—

(1) INTRODUCTION.—If a resolution of disapproval is introduced in the House of Representatives or the Senate during the 90-day period (not counting any day which is excluded under section154(b)(1) of the Trade Act of 1974 (19 U.S.C. 2194(b)(1))), beginning on the date on which the President first notifies Congress of a determination to waive action with respect to a country pursuant to section 7(c)(1)(B), that resolution of disapproval shall be considered in accordance with this subsection.

(2) RESOLUTION OF DISAPPROVAL.—In this subsection, the term ‘‘resolution of disapproval’’ means only a joint resolution of the two Houses of the Congress, the sole matter after the resolving clause of which is as follows: ‘‘That Congress does not approve the determination of the President under lllllllllll 22 of the Currency Exchange Rate Oversight Reform Act of 2011 with espect to llllll24 , of which Congress was notified on with the first blank space being filled section 7(c)(1)(B) or section 6(b)(1)(B), whichever is applicable, the second blank space being filled with the name of the appropriate country, and the third blank space being filled with the appropriate date.

(3) PROCEDURES FOR CONSIDERING RESOLUTIONS.—

(A) INTRODUCTION AND REFERRAL.—Resolutions of disapproval— (i) in the House of Representatives— (I) may be introduced by any Member of the House;

(II) shall be referred to the Committee on Financial Services and, in addition, to the Committee on Rules; and

(III) may not be amended by either Committee; and(ii) in the Senate—

(I) may be introduced by any Member of the Senate;

(II) shall be referred to the Committee on Banking, Housing, and Urban Affairs; and (III) may not be amended.

(B) COMMITTEE DISCHARGE AND FLOOR CONSIDERATION.—The provisions of subsections (c) through (f) of section 152 of the Trade Act of 1974 (other than paragraph (3) of such subsection (f)) (19 U.S.C. 2192 (c) through (f)) (relating to committee discharge and floor consideration of certain resolutions in the House and Senate) apply to a resolution of disapproval under this section to the same extent as such subsections apply to joint resolutions under such section 152.

(b) RULES OF HOUSE OF REPRESENTATIVES AND SENATE.—This section is enacted by Congress— (1) as an exercise of the rulemaking power of the House of Representatives and the Senate, respectively, and as such is deemed a part of the rules of each House, respectively, and the rules provided for in this section 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 provided for in this section (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.

 

SEC. 9. 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 4(a)(3) in the most recent report required by section 3. 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 (described 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 4(a)(3).


SEC. 10. ADJUSTMENT FOR FUNDAMENTALLY MISALIGNED CURRENCY DESIGNATED FOR PRIORITY ACTION.

(a) IN GENERAL.—Subsection (c)(2) of section 772 of the Tariff Act of 1930 (19 U.S.C. 1677a(c)(2)) is amended—

(1) by striking ‘‘and’’ at the end of subparagraph (A);

(2) by striking the period at the end of subparagraph (B) and inserting ‘‘, and’’; and (3) by adding at the end the following:

‘‘(C) if required by section 6(a)(1) of the Currency Exchange Rate Oversight Reform Act of 2011, the percentage by which the domestic currency of the producer or exporter is undervalued in relation to the United States dollar as determined under section 771(37).’’.

(b) CALCULATION METHODOLOGY.—Section 771 of the Tariff Act of 1930 (19 U.S.C. 1677) is amended by adding at the end the following:

‘‘(37) PERCENTAGE UNDERVALUATION.—The administering authority shall determine the percentage by which the domestic currency of the producer or exporter is undervalued in relation to the United States dollar by comparing the nominal value associated with the medium-term equilibrium exchange rate of the domestic currency of the producer or exporter, identified by the Secretary pursuant to section 3(b)(7) of the Currency Exchange Rate Oversight Reform Act of 2011, to the official daily exchange rate identified by the administering authority.’’.

 

SEC. 11. CURRENCY UNDERVALUATION UNDER COUNTERVAILING DUTY LAW.

(a) INVESTIGATION OR REVIEW.—Subsection (c) of section 702 of the Tariff Act of 1930 (19 U.S.C. 1671a(c)) is amended by adding at the end the following:

‘‘(6) CURRENCY UNDERVALUATION.—For purposes of a countervailing duty investigation under this subtitle where the determinations under clauses (i) and (ii) of paragraph (1)(A) are affirmative, or a review under subtitle C of this title, the following shall apply:

‘‘(A) IN GENERAL.—The administering authority shall initiate an investigation to determine whether currency undervaluation by the government of a country or any public entity within the territory of a country is providing, directly or indirectly, a countervailable subsidy as described in section 771(5), if—

‘‘(i) a petition filed by an interested party (described in subparagraph (C), (D), (E), (F), or (G) of section 771(9)) alleges the elements necessary for the imposition of the duty imposed by section 701(a); and ‘‘(ii) the petition is accompanied by information reasonably available to the petitioner supporting those allegations.

‘‘(B) DESIGNATION OF FUNDAMENTALLY MISALIGNED CURRENCY FOR PRIORITY ACTION.—Upon designation of a currency as a fundamentally misaligned currency for priority action pursuant to section 4(a)(3) of the Currency Exchange Rate Oversight Reform Act of 2011, the administering authority shall initiate an investigation to determine whether the coun try that issues such currency is providing, directly or indirectly, a countervailable subsidy as defined in section 771(5), if—

‘‘(i) a petition filed by an interested party (described in subparagraph (C), (D), (E), (F), or (G) of section 771(9)) alleges the elements necessary for the imposition of the duty imposed by section 701(a); and ‘‘(ii) the petition is accompanied by information reasonably available to the petitioner supporting those allegations.’’.

(b) BENEFIT CALCULATION METHODOLOGY.—Section 771 of the Tariff Act of 1930 (19 U.S.C. 1677), as amended by section 10(b), is further amended by adding at the end the following:

‘‘(38) CURRENCY UNDERVALUATION BENEFIT.—For purposes of a countervailing duty investigation under subtitle A of this title, or a review under subtitle C of this title, the following shall apply:

‘‘(A) IN GENERAL.—If the administering authority determines to investigate whether currency undervaluation is a countervailable subsidy as defined in section 771(5), the administering authority shall determine whether there is a benefit to the recipient and measure such benefit by comparing the simple average of the real exchange rates derived from application of the macroeconomic-balance approach and the equilibrium-real-exchange-rate approach to the official daily exchange rate identified by the administering authority. The administering authority shall rely upon data that are publicly available, reliable, and compiled and maintained by the International Monetary Fund or the World Bank, or other international organizations or national governments if International Monetary Fund or World Bank data is not available.

‘‘(B) DESIGNATION OF FUNDAMENTALLY MISALIGNED CURRENCY FOR PRIORITY ACTION.—In the case of designation of a currency as a fundamentally misaligned currency for priority action pursuant to section 4(a)(3) of the Currency Exchange Rate Oversight Reform Act of 2011, the administering authority shall determine whether there is a benefit to the recipient and measure such benefit by comparing the nominal value associated with the medium-term equilibrium exchange rate of the currency of the exporting country, identified by the Secretary pursuant to section 3(b)(7) of such Act, to the official daily exchange rate identified by the administering authority.

‘‘(C) DEFINITIONS.—

‘‘(i) MACROECONOMIC-BALANCE APPROACH.—The term ‘macroeconomic-balance approach’ means a methodology under which the level of undervaluation of the real effective exchange rate of the exporting country’s currency is defined as the change in the real effective exchange rate needed to achieve equilibrium in the exporting country’s balance of payments, as such methodology is described in the guidelines of the International Monetary Fund’s Consultative Group on Exchange Rate Issues, if available.

‘‘(ii) EQUILIBRIUM-REAL-EXCHANGE RATE APPROACH.—The term ‘equilibrium real-exchange-rate approach’ means a methodology under which the level of undervaluation of the real effective exchange rate of the exporting country’s currency is defined as the difference between the observed real effective exchange rate and the real effective exchange rate, as such methodology is described in the guidelines of the International Monetary Fund’s Consultative Group on Exchange Rate Issues, if available.

‘(iii) REAL EXCHANGE RATES.—The term ‘real exchange rates’ means the bilateral exchange rates derived from converting the trade-weighted multilateral exchange rates yielded by the macroeconomic-balance approach and the equilibrium-real-exchange-rate approach into real bilateral terms.’’.

(c) EXPORT SUBSIDY.—Section 771(5A)(B) of the Tariff Act of 1930 (19 U.S.C. 1677(5A)(B)) is amended by adding at the end the following new sentence: ‘‘The fact that a subsidy may also be provided in circumstances that do not involve export shall not, for that reason alone, mean that the subsidy cannot be considered contingent upon export performance.’’.

(d) EFFECTIVE DATE.—The amendments made by this section apply to countervailing duty investigations initiated under subtitle A of title VII of the Tariff Act of 1930 (19 U.S.C. 1671 et seq.) and reviews initiated under subtitle C of title VII of such Act (19 U.S.C. 1675 et seq.) before, on, or after the date of the enactment of this Act.

 

SEC. 12. NONMARKET ECONOMY STATUS.

Paragraph (18)(B) of section 771 of the Tariff Act of 1930 (19 U.S.C.

1677(18)(B)) is amended— (1) by striking ‘‘and’’ at the end of clause (v); and (2) by redesignating clause (vi) as clause (vii) and inserting after clause (v) the following: ‘‘(vi) whether the currency of the foreign country is designated, or has been designated at any time over the 5 years prior to review of nonmarket economy status, a currency for priority action pursuant to section 4(a)(3) of the Currency Exchange Rate Oversight Reform Act of 2011, and’’.

 

SEC. 13. 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), section 6(a)(1) and the amendments made by sections 10, 11, and 12 shall apply with respect to goods from Canada and Mexico.

 

SEC. 14. 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 3; and

(B) advising 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.

(2) MEMBERSHIP.—

(A) IN GENERAL.—The Committee shall be composed of 9 members as follows, none of whom shall be employees of the Federal Government:

(i) CONGRESSIONAL APPOINTEES.—(I) SENATE APPOINTEES.—Four 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.—Four 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.—Notwithstanding section 14(c) of the Federal Advisory Committee Act (5 U.S.C. App.), the Committee shall terminate on the date that is 4 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 4-year period. The President may continue to renew the Committee for successive 4-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 2 public meetings each year for the purpose of accepting public comments, including comments from small business owners. 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 2 annual public meetings 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. 15. REPEAL OF THE EXCHANGE RATES AND ECONOMIC POLICY COORDINATION ACT OF 1988.

The Exchange Rates and International Economic Policy Coordination Act of 1988 (22 U.S.C. 5301 et seq.) is repealed. Passed the Senate October 11, 2011.

 

Significant Votes

The votes below are shown in a candidates profile on China if that representative was in office to cast a vote. In the Senate, most of the votes came as amendments to the trade normalization legislation with China. In the House, the votes are more scattered over time and are mainly resolutions expressing the sense of the Senate on given issues. There was a 2010 vote in the Senate on legislation to address Chinese currency manipulation.

House Votes on China
YearRoll CallLegislation
2000228To Authorize Extension of Nondiscriminatory Treatment (Normal Trade Relations Treatment) to the Peoples Republic of China
2001255Disapproving Normal Trade Relations for China
2003579Resolution - Trade Agreements
2004374Resolution - Intellectual Property
2005647Resolution - Forced Labor Prisons
200518Resolution - EU and Chinese Embargo
2007850Resolution - Financial Services
2008539China - Human Rights Abuses
2008166Resolution - China and Tibet
2010554Currency Reform for Fair Trade Act

Senate Votes on China
YearRoll CallLegislation
1997184Amendment - China and MFNS
199954Amendment - China and the WTO
1999213Resolution disapproving Normal Trade Relations with China
2000251Normal Trade Relations for the People's Republic of China
2000249Amendment - Congressional-Executive Commission
2000248Amendment - Congressional-Executive Commission
2000246Amendment - Inquiries
2000244Amendment - Business Code of Conduct
2000243Amendment - Forced Abortions
2000241Amendment - Congressional-Executive Commission
2000239Amendment - Human Rights
2000238Amendment - Presidential Certification
2000235Amendment - Clean Energy
2000234Amendment - Religious Freedom
200586Amendment - Chinese Currency
2005192Amendment - Export-Import Bank

 

Additional Legislation

Each year, there are numerous bills introduced that are not voted on in the House or Senate. These bills may be sponsored by numerous people and a representative's co-sponsorship of that legislation gives insight into that person's viewpoints.

Senate Bills on China
SessionBill NumberCo-SponsorsBill Title
110S Res 50424Tibet and China
110S 5713Withdrawing normal trade relations with China
110S 28132China Currency Manipulation Act of 2008
110S 37230China and Environmental Issues
110S Con Res 780China and SEC Disclosure
110S Res 50424China and Tibet
109S Res 919Arms Embargo on China
109S 29513Chinese Currency Manipulation
109S 22671Withdrawing Normal Trade Relations
109S Con Res 210Anti-Secession Language
109S Res 599European Arms Embargo
109S Res 919Arms Embargo
109S Res 1421Intellectual Property Rights and China
109S Res 2703Investigate Currency Manipulation
108S 158613Chinese Currency Manipulation
108S Res 21916Market Based Valuation of the Yuan
108S Res 2627Market-Based Currency Manipulation
108S Res 3654China and Tibet
108S Res 4831China and Tibet
105S 13033Economic Normalization
 

House Bills on China
SessionBill NumberCo-SponsorsBill Title
112H R 3754Fix United States Government Contracting Deficit with China Act
111H R 23103United States-China Market Engagement and Export Promotion Act
111H R 531220Reciprocal Government Procurement with China Creates American Jobs Act
111H R 60717Emergency China Trade Act of 2010
111H Res 4414Condemning the People's Republic of China for its socially unacceptable business practices
111H Res 6244Condemning all violent repression by the Government of the People's Republic of China of peaceful Uighur protests.
111H Res 95310Human Rights Resolution
111H Res 16503Release of Chen Guangcheng
110H R 32119Currency Harmonization Initiative through Neutralizing Action Act of 2005
110H R 3883Unfair Chinese Automotive Tariff Equalization Act
110H R 10022China and Currency Manipulation
110H R 19581Withdrawing Normal Trade Relations with China
110H R 32747China Energy Cooperation Act
110H R 327327China Market Engagement and Export Promotion Act
110H R 566818Communist Chinese Olympic Accountability Act
110H R 57770China Democracy Act
110H Con Res 7314Expressing the sense of Congress that the United States should resume normal diplomatic relations with Taiwan (the Republic of China), and for other purposes.
110H Con Res 2201Concerning the response of the United States to forced abortion and the coercive one-child policy in the People's Republic of China, and the resulting "gendercide" of girls in that country.
110H Res 5523Calling on the Government of the People's Republic of China to remove barriers to United States financial services firms doing business in China.
110H Res 82139Prisoners of Conscience
109H R 72871Withdrawing Normal Trade Relations
109H R 1498176Chinese Currency Act of 2005
109H R 157535Chinese Currency Manipulation
109H R 24141Currency Rate Adjustment and Trade Enforcement Act
109H R 300424Currency Harmonization Initiative through Neutralizing Action Act of 2005
109H R 310013East Asia Security Act of 2005
109H R 480825Unfair Chinese Automotive Tariff Equalization Act
109H Con Res 330China Trade Enforcement Resolution
109H Con Res 8360China and Human Rights
109H Con Res 7026China and Taiwan
109H Con Res 2031China and the WTO
109H Con Res 29440China and Prison Camps
109H Con Res 30313China and Intellectual Property
109H Res 436Arms Embargo
109H Res 5711China and Arms Embargo
108H R 8510Trade Accountability Study Act
108H R 30580Currency Harmonization Initiative through Neutralizing Action Act of 2003
108H R 32280Withdrawing normal trade relations with China
108H R 33640China and Currency Manipulation
108H R 49860Currency Rate Adjustment and Trade Enforcement Act
108H Con Res 4402Taiwan Relations
108H Con Res 51211European Arms Embargo
108H Res 5300Human Rights Violations

[1] Website: CNN Article: China: Obama visit with Dalai Lama has 'harmed Sino-U.S. relations' Author: CNN Accessed on: 07/17/2011