To require certain actions to be taken against countries that manipulate their currencies, and for other purposes.

Summary: Currency Manipulation Prevention Act - Amends the Trade Act of 2002 to state that the principal negotiating objective of the United States with respect to currency exchange rates is to ensure that governmental intervention in currency markets is of limited duration and is carried out in consultation with countries with major trading partners.

Directs the Secretary of Commerce to submit biannual reports: (1) describing actions by foreign governments to manipulate their currencies to increase their exports and to limit imports from the United States; (2) analyzing the impact of such currency manipulation on the U.S. manufacturing sector and on U.S. monetary policy; and (3) setting forth remedies against such currency manipulation.

Directs the President to: (1) negotiate with any country identified by the Secretary of Commerce as engaging in currency manipulation to end such practice; and (2) seek compensation from such country (if in the national interest) for the damages incurred by U.S. manufacturers.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Currency Manipulation Prevention 
Act''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) Products produced in a foreign country can be produced 
        or assembled with lower input costs through the intervention by 
        the government of that country in international currency 
        markets, in order to maintain its own currency at artificially 
        low valuations.
            (2) This practice, in effect, subsidizes the exports of 
        such a country while erecting a cost barrier to goods imported 
        into that country.
            (3) The United States has the authority under current law 
        to redress practices by other countries that decrease market 
        opportunities for United States exports or otherwise distort 
        trade, including currency manipulation.
            (4) Misalignments in currency caused by government policies 
        intended to maintain an unfair trade advantage nullify and 
        impair trade concessions.
            (5) 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.
            (6) 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.
            (7) Article XV of the GATT 1994 and the Agreement on 
        Subsidies and Countervailing Measures both suggest that 
        currency manipulation in order to gain an unfair trading 
        advantage would violate the intent of those agreements.
            (8) Sections 301 through 309 of the Trade Act of 1974 
        provide 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.
            (9) Section 3004 of the Omnibus Trade and Competitiveness 
        Act of 1988 (22 U.S.C. 5304) requires the Secretary of the 
        Treasury to undertake multilateral or bilateral negotiations if 
        it is found that a country is manipulating its currency, and 
        Article IV of the Articles of Agreement of the International 
        Monetary Fund prohibits currency manipulation.

SEC. 3. TRADE NEGOTIATING OBJECTIVE.

    Section 2102(b) of the Trade Act of 2002 (19 U.S.C. 3802(b)) is 
amended by adding at the end the following:
            ``(18) Exchange rate policy.--The principal negotiating 
        objective of the United States with respect to currency 
        exchange rates is to ensure that governmental intervention in 
        currency markets to stabilize short-term disruptive market 
        conditions is of limited duration and is carried out in 
        consultation with countries with major trading partners.''.

SEC. 4. REPORT ON CURRENCY MANIPULATION.

    The Secretary of Commerce shall, not later than 6 months after the 
date of the enactment of this Act, and not later than the end of each 
6-month period thereafter, submit to the Congress, the President, the 
United States Trade Representative, and the Secretary of the Treasury, 
a report--
            (1) describing actions by foreign governments to manipulate 
        the currencies of their countries in order to increase exports 
        from those countries to the United States or to limit imports 
        of United States products into those countries, and describing 
        the extent of such currency manipulation;
            (2) analyzing whether, and to what extent--
                    (A) currency manipulation described under paragraph 
                (1) affects the manufacturing sector in the United 
                States; and
                    (B) reduction of the manipulation and of the 
                accumulation of United States dollars by foreign 
                governments might affect United States monetary policy; 
                and
            (3) setting forth all remedies against such currency 
        manipulation that are available under applicable trade 
        agreements and international institutions such as the World 
        Trade Organization and the International Monetary Fund.

SEC. 5. PROCEEDINGS.

    (a) Action by the President.--In any case in which the Secretary of 
Commerce, in a report under section 3, identities a government of a 
foreign country that is manipulating the currency of that country, the 
President, within 45 days after the report is issued, shall initiate 
negotiations with that country for the purpose of ending the currency 
manipulation. If the President, within 90 days after the report under 
section 3 is issued, is unable to reach an agreement with that country 
to end the currency manipulation, the President shall take the 
necessary steps to initiate proceedings under the applicable trade 
agreements or under the auspices of the World Trade Organization or 
other applicable international institutions, and under applicable 
United States law, including section 301 of the Trade Act of 1974, 
against that country on account of that currency manipulation.
    (b) Compensation.--
            (1) In general.--In the course of, or in addition to, 
        action taken under subsection (a) with respect to a country, 
        the President shall seek compensation from that country 
        equivalent to the damages incurred by United States 
        manufacturers and other adversely affected parties in the 
        United States on account of the currency manipulation of that 
        country. The President is not required to seek such 
        compensation if he determines that to do so would not be in the 
        national interests of the United States.
            (2) Report if compensation not sought.--In any case in 
        which the President does not seek compensation under paragraph 
        (1), the President shall transmit to the Committee on Energy 
        and Commerce and the Committee on Ways and Means of the House 
        of Representatives, and to the Committee on Commerce, Science 
        and Transportation and the Committee on Finance of the Senate, 
        a detailed explanation of the President's determination of 
        national interest.

SEC. 6. DEFINITIONS.

    In this Act----
            (1) Currency manipulation.--The term ``currency 
        manipulation'' means--
                    (A) manipulation of exchange rates by a country in 
                order to gain an unfair competitive advantage as stated 
                in Article IV of the Articles of Agreement of the 
                International Monetary Fund;
                    (B) sustained currency intervention by a country in 
                one direction, through mandatory foreign exchange sales 
                at a country's central bank at a fixed exchange rate;
                    (C) protracted, large scale intervention in global 
                currency markets in one direction, by buying or selling 
                United States dollars, to weaken or strengthen a 
                currency; or
                    (D) other mechanisms used by a country to maintain 
                its currency at at fixed exchange rate relative to the 
                currency of another country.
            (2) GATT 1994.--The term ``GATT 1994'' has the meaning 
        given that term in section 2 of the Uruguay Round Agreements 
        Act (19 U.S.C. 3501).
            (3) Agreement on subsidies and countervailing measures.--
        The term ``Agreement on Subsidies and Countervailing Measures'' 
        means the Agreement on Subsidies and Countervailing Measures 
        referred to in section 101(d)(12) of the Uruguay Round 
        Agreements Act (19 U.S.C. 3511(12)).