Currency Harmonization Initiative through Neutralizing Action Act of 2003 - Directs the Secretary of the Treasury to annually analyze the exchange rate policies of the People's Republic of China, and to impose additional tariffs, if necessary, to equalize any currency manipulations.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1758 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 1758
To require the Secretary of the Treasury to analyze and report on the
exchange rate policies of the People's Republic of China, and to
require that additional tariffs be imposed on products of that country
on the basis of the rate of manipulation by that country of the rate of
exchange between the currency of that country and the United States
dollar.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 20, 2003
Mr. Voinovich (for himself and Mr. DeWine) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To require the Secretary of the Treasury to analyze and report on the
exchange rate policies of the People's Republic of China, and to
require that additional tariffs be imposed on products of that country
on the basis of the rate of manipulation by that country of the rate of
exchange between the currency of that country and the United States
dollar.
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 Harmonization Initiative
through Neutralizing Action Act of 2003''.
SEC. 2. FINDINGS.
(a) Findings.--The Congress finds as follows:
(1) The benefit of trade concessions can be adversely
affected by misalignments in currency.
(2) Misalignments in currency caused by government policies
intended to maintain an unfair trade advantage nullify and
impair trade concessions.
(3) Under article XV of the GATT 1994, a country is
considered to be manipulating its currency to obtain an unfair
trade advantage if--
(A) its currency manipulation has a subsidy-like
effect;
(B) its currency manipulation constitutes a
nullification and impairment of the benefits of the
GATT 1994; or
(C) its currency manipulation results in a
contravention of the intention of the GATT 1994.
(4) The International Monetary Fund also prohibits the use
of currency manipulation as a method of gaining unfair trade
advantage. The International Monetary Fund defines such
manipulation as large-scale and protracted intervention in one
direction to gain an unfair trade advantage.
(5) Sections 301 through 309 of the Trade Act of 1974
contain the authority under United States law to take
retaliatory action, including import restrictions, to enforce
the rights of the United States against any unjustifiable,
unreasonable, or discriminatory practice or policy of a country
that burdens or restricts United States commerce.
(6) In 2002, the United States trade deficit with the
People's Republic of China exceeded $103,000,000,000, the
largest bilateral trade deficit in the world. Based on the
first four months of 2003, the United States trade deficit with
the People's Republic of China is estimated to reach more than
$120,000,000,000 in 2003.
(7) United States imports from the People's Republic of
China have been growing at more than twice the rate of United
States exports to that country.
(8) The People's Republic of China is accumulating foreign
currency reserves, mostly United States dollars, at a rate of
more than $6,000,000,000 per month; this intervention has kept
the Chinese renminbi (RMB) from appreciating despite large
trade surpluses and investment flows. China's total foreign
currency reserves currently stand at almost $300,000,000,000.
(9) The People's Republic of China has kept its currency
pegged at approximately 8.3 RMB to the dollar since 1994.
(10) The large and growing trade surplus of the People's
Republic of China with the United States strongly suggests that
the RMB is undervalued against the dollar. Recently, economists
have estimated that the RMB is undervalued against the United
States dollar by as much as 40 percent.
(11) Import tariffs of the People's Republic of China
currently average about 15 percent. Assuming the recent
estimates of Chinese RMB undervaluation against the dollar are
correct, the effect of a free and open currency market would be
more than twice as large as the effect of eliminating every
tariff that the People's Republic of China imposes on United
States goods.
(12) In the long run, revaluation of the RMB by the
Government of the People's Republic of China would mitigate the
ever increasing United States trade deficit with that country.
(13) The President should formally initiate action against
the People's Republic of China, on account of the manipulation
of its currency, pursuant to article XV of the GATT 1994, the
rules of the International Monetary Fund, and sections 301
through 309 of the Trade Act of 1974.
(b) Definition.--In this section the term ``GATT 1994'' has the
meaning given that term in section 2 of the Uruguay Round Agreements
Act (19 U.S.C. 3501).
SEC. 3. ANALYSIS OF AND REPORT ON EXCHANGE RATE POLICIES OF CHINA.
(a) Analysis.--The Secretary of the Treasury shall, upon the
enactment of this Act and annually thereafter, analyze the exchange
rate policies of the People's Republic of China in order to determine
whether that country manipulates the rate of exchange between the
currency of that country and the United States dollar for purposes of
preventing effective balance of payments adjustments or gaining an
unfair competitive advantage in international trade.
(b) Computation of Rate of Manipulation.--If the Secretary of the
Treasury makes an affirmative determination under subsection (a), the
Secretary shall compute the rate of manipulation against the dollar in
the form of a percentage.
(c) Reports to Congress.--The Secretary of the Treasury shall
submit to the Committee on Ways and Means of the House of
Representatives and to the Committee on Finance of the Senate a report
on the Secretary's analysis and findings under subsection (a), and any
rate computed under subsection (b). The report shall be submitted--
(1) with respect to the analysis conducted upon the
enactment of this Act, not later than 60 days after the date of
the enactment of this Act; and
(2) with respect to each subsequent analysis, at the end of
each 1-year period thereafter.
SEC. 4. ADDITIONAL TARIFFS.
(a) Additional Tariff.--In any case in which a report of the
Secretary of the Treasury submitted under section 3(c) includes a rate
of manipulation under section 3(b), the Secretary shall, not later than
30 days after the report is submitted, impose on all products of China
that enter the customs territory of the United States, in addition to
any duty that otherwise applies, a tariff equal to the applicable
percentage of the appraised value of the product at the time of entry.
For purposes of this subsection, the ``applicable percentage'' is the
percentage equal to the rate of manipulation.
(b) Annual Modification.--Any tariff imposed under subsection (a)
shall be modified annually to the extent necessary to comply with the
most recent report of the Secretary of the Treasury under section 3(c).
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S12889)
Read twice and referred to the Committee on Finance.
Sponsor introductory remarks on measure. (CR S8186-8188)
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