I 

108TH CONGRESS 

1ST SESSION H. R. 3269

To require certain actions to be taken against countries that manipulate 

their currencies, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 8, 2003

Mr. DINGELL introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL

To require certain actions to be taken against countries 

that manipulate their currencies, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Currency Manipulation 

5 Prevention Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress makes the following findings: 

8 (1) The growth of the United States economy 

9 over the last century has largely been a function of 

10 the success of the manufacturing sector. 30 percent 
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1 of the economic growth during the 1990s was attrib2 utable to manufacturing. 

3 (2) Manufacturers conduct 60 percent of all re4 search and development for new products and tech5 nologies in the United States. Manufacturing jobs 

6 also provide 26 percent higher wages than jobs in 

7 the service sector. 

8 (3) Since July 2000, more than 2,700,000 jobs 

9 have been lost in the manufacturing sector. That ac10 counts for more than 90 percent of the jobs lost dur11 ing the economic downturn. 

12 (4) One of the difficulties faced by United 

13 States manufacturers in providing jobs is their dis14 advantage in competing against low cost foreign 

15 products. 

16 (5) The low cost of products produced abroad 

17 can be caused by the intervention of governments of 

18 other countries in the currency markets in order to 

19 maintain their own currencies at artificially low 

20 valuations. 

21 (6) This practice, in effect, subsidizes the ex22 ports of those countries while erecting a cost barrier 

23 to goods imported into those countries. 

24 (7) United States trading partners, such as the 

25 People’s Republic of China, Japan, South Korea, 
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1 and Taiwan have amassed more than 

2 $1,200,000,000,000 in foreign currency reserves, the 

3 vast majority of which are United States dollars. In 

4 particular, the intervention by the People’s Republic 

5 of China in the currency market has led to an 

6 undervaluation of the renminbi by as much as 40 

7 percent. This creates a 40 percent subsidy for goods 

8 of that country. 

9 (8) The United States trade deficit with China 

10 increased from $57,000,000,000 in 1998 to 

11 $103,000,000,000 in 2002. 

12 (9) The United States has the right and power 

13 to redress unfair competitive practices in inter14 national trade that involve currency manipulation. 

15 (10) Section 3004 of the Omnibus Trade and 

16 Competitiveness Act of 1988 (22 U.S.C. 5304) re17 quires the Secretary of the Treasury to undertake 

18 multilateral or bilateral negotiations if it is found 

19 that a country is manipulating its currency, and Ar20 ticle IV of the Articles of Agreement of the Inter21 national Monetary Fund prohibits currency manipu22 lation. 

23 (11) Article XV of the GATT 1994, as defined 

24 in section 2 of the Uruguay Round Agreements Act 

25 (19 U.S.C. 3501), and the Agreement on Subsidies 
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1 and Countervailing Measures referred to in section 

2 101(d)(12) of that Act (19 U.S.C. 3511(12)) both 

3 suggest that currency manipulation in order to gain 

4 an unfair trading advantage would violate the intent 

5 of those agreements. 

6 SEC. 3. TRADE NEGOTIATING OBJECTIVE. 

7 Section 2102(b) of the Trade Act of 2002 (19 U.S.C. 

8 3802(b)) is amended by adding at the end the following: 

9 ‘‘(18) EXCHANGE RATE POLICY.—The principal 

10 negotiating objective of the United States with re11 spect to currency exchange rates is to ensure that 

12 governmental intervention in currency markets to 

13 stabilize short-term disruptive market conditions is 

14 of limited duration and is carried out in consultation 

15 with countries with major economies.’’. 

16 SEC. 4. REPORT ON CURRENCY MANIPULATION. 

17 The Secretary of Commerce shall, not later than 6 

18 months after the date of the enactment of this Act, and 

19 not later than the end of each 6-month period thereafter, 

20 submit to the Congress, the President, the United States 

21 Trade Representative, and the Secretary of the Treasury, 

22 a report—

23 (1) describing actions by foreign governments 

24 to manipulate the currencies of their countries in 

25 order to increase exports from those countries to the 
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1 United States or to limit imports of United States 

2 products into those countries, and describing the ex3 tent of such currency manipulation; 

4 (2) analyzing whether, and to what extent—

5 (A) currency manipulation described under 

6 paragraph (1) affects the manufacturing sector 

7 in the United States; and 

8 (B) reduction of the manipulation and of 

9 the accumulation of United States dollars by 

10 foreign governments might affect United States 

11 monetary policy; and 

12 (3) setting forth all remedies against such cur13 rency manipulation that are available under applica14 ble trade agreements and international institutions 

15 such as the World Trade Organization and the 

16 International Monetary Fund. 

17 SEC. 5. PROCEEDINGS. 

18 (a) ACTION BY THE PRESIDENT.—In any case in 

19 which the Secretary of Commerce, in a report under sec20 tion 4, identities a government of a foreign country that 

21 is manipulating the currency of that country, the Presi22 dent, within 45 days after the report is issued, shall ini23 tiate negotiations with that country for the purpose of 

24 ending the currency manipulation. If the President, within 

25 45 days after the report under section 4 is issued, is un-
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1 able to reach an agreement with that country to end the 

2 currency manipulation, the President shall take the nec3 essary steps to initiate proceedings under the applicable 

4 trade agreements or under the auspices of the World 

5 Trade Organization or other applicable international insti6 tutions, and under applicable United States law, including 

7 section 301 of the Trade Act of 1974, against that country 

8 on account of that currency manipulation. 

9 (b) COMPENSATION.—

10 (1) IN GENERAL.—In the course of, or in addi11 tion to, action taken under paragraph (1) with re12 spect to a country, the President shall seek com13 pensation from that country equivalent to the dam14 ages incurred by United States manufacturers and 

15 other adversely affected parties in the United States 

16 on account of the currency manipulation of that 

17 country. The President is not required to seek such 

18 compensation if he determines that to do so would 

19 not be in the national interests of the United States. 

20 (2) REPORT IF COMPENSATION NOT SOUGHT.—

21 In any case in which the President does not seek 

22 compensation under paragraph (1), the President 

23 shall transmit to the Committee on Energy and 

24 Commerce and the Committee on Ways and Means 

25 of the House of Representatives, and to the Com-
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1 mittee on Commerce, Science and Transportation 

2 and the Committee on Finance of the Senate a de3 tailed explanation of the President’s determination 

4 of national interest. 

5 SEC. 6. CURRENCY MANIPULATION DEFINED. 

6 In this Act, the term ‘‘currency manipulation’’ 

7 means—

8 (1) manipulation of exchange rates by a country 

9 in order to gain an unfair competitive advantage as 

10 stated in Article IV of the Articles of Agreement of 

11 the International Monetary Fund; 

12 (2) sustained currency intervention by a coun13 try in one direction, through mandatory foreign ex14 change sales at a country’s central bank at a fixed 

15 exchange rate; or 

16 (3) other mechanisms used by a country to 

17 maintain its currency at at fixed exchange rate rel18 ative to the currency [of another country].

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