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 measures consistent with the obligations of the United States under the World Trade Organization be taken to offset any disadvantage to United States producers resulting from China's exchange rate policies.

July 22, 2004

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

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 measures consistent with the obligations of the United States under the World Trade Organization be taken to offset any disadvantage to United States producers resulting from China's exchange rate policies.

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 Rate Adjustment and Trade Enforcement Act'.

SEC. 2. ANALYSIS OF AND REPORT ON EXCHANGE RATE POLICIES OF CHINA.

(a) Analysis-

(1) IN GENERAL- 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 maintains the rate of exchange between the currency of that country and the United States dollar in a manner that interferes with effective balance of payments adjustments or confers a competitive advantage in international trade that would not exist if the currency value were set by market forces.

(2) GLOBAL BALANCE OF TRADE- In conducting the analysis under paragraph (1), the Secretary of the Treasury shall determine the global balance of trade of the People's Republic of China and, in making that determination, compare the import and export data for China by country, as reported by the Chinese Government, with the export and import data for China, as reported by the government of each country that is a trading partner of China. In making that determination, the Secretary should take into account reexports to and from China through Hong Kong.

(b) Computation of Rate of Undervaluation- If the Secretary of the Treasury makes an affirmative determination under subsection (a)(1), the Secretary shall compute the rate of undervaluation 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 and the Committee on Energy and Commerce 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.

(d) Relief- In any case in which a report of the Secretary of the Treasury under subsection (c) includes a rate of undervaluation computed under subsection (b), the President shall seek authorization in the World Trade Organization through expedited dispute settlement--

(1) to offset the subsidy inherent in the undervalued currency by the application of across-the-board equivalent tariffs, on the basis of the rate of undervaluation computed under subsection (b), on the importation into the United States of all products of the People's Republic of China; and

(2) to take measures to offset the disadvantage resulting from such undervaluation to exports to the People's Republic of China of goods and services of the United States.

(e) Modifications- To the extent consistent with the obligations of the United States under the World Trade Organization--

(1) any measures imposed under subsection (d) shall be modified annually to the extent necessary to comply with the most recent report of the Secretary of the Treasury under subsection (c); and

(2) the Secretary of the Treasury may modify any measures imposed under subsection (d) or modifications thereto under paragraph (1) 30 days after notifying the Congress of a substantial change in the degree of currency undervaluation by the People's Republic of China.

END