Imposes an additional duty of 27.5 percent on Chinese goods imported into the United States unless the President submits a certification to Congress that the People's Republic of China (PRC) is no longer manipulating the rate of exchange and is complying with accepted market-based trading policies.
Directs the Secretary of the Treasury to negotiate with the PRC to ensure a process that leads to a market-based system of currency valuation.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 295 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 295
To authorize appropriate action if the negotiations with the People's
Republic of China regarding China's undervalued currency are not
successful.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 3, 2005
Mr. Schumer (for himself, Mr. Graham, Mr. Bunning, Mr. Durbin, Mr.
Reid, Mr. Kohl, Mrs. Dole, Ms. Stabenow, Mr. Dodd, Mr. Levin, Mrs.
Clinton, Mr. Bayh, and Mr. DeWine) introduced the following bill; which
was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To authorize appropriate action if the negotiations with the People's
Republic of China regarding China's undervalued currency are not
successful.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. NEGOTIATIONS REGARDING CURRENCY VALUATION.
(a) Findings.--Congress makes the following findings:
(1) The currency of the People's Republic of China, known
as the yuan or renminbi, is artificially pegged at a level
significantly below its market value. Economists estimate the
yuan to be undervalued by between 15 percent and 40 percent or
an average of 27.5 percent.
(2) The undervaluation of the yuan provides the People's
Republic of China with a significant trade advantage by making
exports less expensive for foreign consumers and by making
foreign products more expensive for Chinese consumers. The
effective result is a significant subsidization of China's
exports and a virtual tariff on foreign imports.
(3) The Government of the People's Republic of China has
intervened in the foreign exchange markets to hold the value of
the yuan within an artificial trading range. China's foreign
reserves are estimated to be over $609,900,000,000 as of
January 12, 2005, and have increased by over $206,700,000,000
in the last 12 months.
(4) China's undervalued currency, China's trade advantage
from that undervaluation, and the Chinese Government's
intervention in the value of its currency violates the spirit
and letter of the world trading system of which the People's
Republic of China is now a member.
(5) The Government of the People's Republic of China has
failed to promptly address concerns or to provide a definitive
timetable for resolution of these concerns raised by the United
States and the international community regarding the value of
its currency.
(6) Article XXI of the GATT 1994 (as defined in section
2(1)(B) of the Uruguay Round Agreements Act (19 U.S.C.
3501(1)(B))) allows a member of the World Trade Organization to
take any action which it considers necessary for the protection
of its essential security interests. Protecting the United
States manufacturing sector is essential to the interests of
the United States.
(b) Negotiations and Certification Regarding the Currency Valuation
Policy of the People's Republic of China.--
(1) In general.--Notwithstanding the provisions of title I
of Public Law 106-286 (19 U.S.C. 2431 note), on and after the
date that is 180 days after the date of enactment of this Act,
unless a certification described in paragraph (2) has been made
to Congress, in addition to any other duty, there shall be
imposed a rate of duty of 27.5 percent ad valorem on any
article that is the growth, product, or manufacture of the
People's Republic of China, imported directly or indirectly
into the United States.
(2) Certification.--The certification described in this
paragraph means a certification by the President to Congress
that the People's Republic of China is no longer acquiring
foreign exchange reserves to prevent the appreciation of the
rate of exchange between its currency and the United States
dollar for purposes of gaining an unfair competitive advantage
in international trade. The certification shall also include a
determination that the currency of the People's Republic of
China has undergone a substantial upward revaluation placing it
at or near its fair market value.
(3) Alternative certification.--If the President certifies
to Congress 180 days after the date of enactment of this Act
that the People's Republic of China has made a good faith
effort to revalue its currency upward placing it at or near its
fair market value, the President may delay the imposition of
the tariffs described in paragraph (1) for an additional 180
days. If at the end of the 180-day period the President
determines that China has developed and started actual
implementation of a plan to revalue its currency, the President
may delay imposition of the tariffs for an additional 12
months, so that the People's Republic of China shall have time
to implement the plan.
(4) Negotiations.--Beginning on the date of enactment of
this Act, the Secretary of the Treasury, in consultation with
the United States Trade Representative, shall begin
negotiations with the People's Republic of China to ensure that
the People's Republic of China adopts a process that leads to a
substantial upward currency revaluation within 180 days after
the date of enactment of this Act. Because various Asian
governments have also been acquiring substantial foreign
exchange reserves in an effort to prevent appreciation of their
currencies for purposes of gaining an unfair competitive
advantage in international trade, and because the People's
Republic of China has concerns about the value of those
currencies, the Secretary shall also seek to convene a
multilateral summit to discuss exchange rates with
representatives of various Asian governments and other
interested parties, including representatives of other G-7
nations.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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