111TH CONGRESS 

2D SESSION H. R. 2378 

AN ACT 

To amend title VII of the Tariff Act of 1930 to clarify 

that countervailing duties may be imposed to address 

subsidies relating to a fundamentally undervalued currency of any foreign country. 

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

2 This Act may be cited as the ‘‘Currency Reform for 

3 Fair Trade Act’’. 

4 SEC. 2. CLARIFICATION REGARDING DEFINITION OF 

5 COUNTERVAILABLE SUBSIDY. 

6 (a) BENEFIT CONFERRED.—Section 771(5)(E) of 

7 the Tariff Act of 1930 (19 U.S.C. 1677(5)(E)) is amend8 ed— 

9 (1) in clause (iii), by striking ‘‘and’’ at the end; 

10 (2) in clause (iv), by striking the period at the 

11 end and inserting ‘‘, and’’; and 

12 (3) by inserting after clause (iv) the following 

13 new clause: 

14 ‘‘(v) in the case in which the currency 

15 of a country in which the subject merchan16 dise is produced is exchanged for foreign 

17 currency obtained from export trans18 actions, and the currency of such country 

19 is a fundamentally undervalued currency, 

20 as defined in paragraph (37), the dif21 ference between the amount of the cur22 rency of such country provided and the 

23 amount of the currency of such country 

24 that would have been provided if the real 

25 effective exchange rate of the currency of 
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1 such country were not undervalued, as de2 termined pursuant to paragraph (38).’’. 

3 (b) EXPORT SUBSIDY.—Section 771(5A)(B) of the 

4 Tariff Act of 1930 (19 U.S.C. 1677(5A)(B)) is amended 

5 by adding at the end the following new sentence: ‘‘In the 

6 case of a subsidy relating to a fundamentally undervalued 

7 currency, the fact that the subsidy may also be provided 

8 in circumstances not involving export shall not, for that 

9 reason alone, mean that the subsidy cannot be considered 

10 contingent upon export performance.’’. 

11 (c) DEFINITION OF FUNDAMENTALLY UNDER12 VALUED CURRENCY.—Section 771 of the Tariff Act of 

13 1930 (19 U.S.C. 1677) is amended by adding at the end 

14 the following new paragraph: 

15 ‘‘(37) FUNDAMENTALLY UNDERVALUED CUR16 RENCY.—The administering authority shall deter17 mine that the currency of a country in which the 

18 subject merchandise is produced is a ‘fundamentally 

19 undervalued currency’ if— 

20 ‘‘(A) the government of the country (in21 cluding any public entity within the territory of 

22 the country) engages in protracted, large-scale 

23 intervention in one or more foreign exchange 

24 markets during part or all of the 18-month pe25 riod that represents the most recent 18 months 
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1 for which the information required under para2 graph (38) is reasonably available, but that 

3 does not include any period of time later than 

4 the final month in the period of investigation or 

5 the period of review, as applicable; 

6 ‘‘(B) the real effective exchange rate of the 

7 currency is undervalued by at least 5 percent, 

8 on average and as calculated under paragraph 

9 (38), relative to the equilibrium real effective 

10 exchange rate for the country’s currency during 

11 the 18-month period; 

12 ‘‘(C) during the 18-month period, the 

13 country has experienced significant and per14 sistent global current account surpluses; and 

15 ‘‘(D) during the 18-month period, the for16 eign asset reserves held by the government of 

17 the country exceed— 

18 ‘‘(i) the amount necessary to repay all 

19 debt obligations of the government falling 

20 due within the coming 12 months; 

21 ‘‘(ii) 20 percent of the country’s 

22 money supply, using standard measures of 

23 M2; and 

24 ‘‘(iii) the value of the country’s im25 ports during the previous 4 months.’’. 
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1 (d) DEFINITION OF REAL EFFECTIVE EXCHANGE

2 RATE UNDERVALUATION.—Section 771 of the Tariff Act 

3 of 1930 (19 U.S.C. 1677), as amended by subsection (c) 

4 of this section, is further amended by adding at the end 

5 the following new paragraph: 

6 ‘‘(38) REAL EFFECTIVE EXCHANGE RATE

7 UNDERVALUATION.—The calculation of real effective 

8 exchange rate undervaluation, for purposes of para9 graph (5)(E)(v) and paragraph (37), shall— 

10 ‘‘(A)(i) rely upon, and where appropriate 

11 be the simple average of, the results yielded 

12 from application of the approaches described in 

13 the guidelines of the International Monetary 

14 Fund’s Consultative Group on Exchange Rate 

15 Issues; or 

16 ‘‘(ii) if the guidelines of the International 

17 Monetary Fund’s Consultative Group on Ex18 change Rate Issues are not available, be based 

19 on generally accepted economic and econometric 

20 techniques and methodologies to measure the 

21 level of undervaluation; 

22 ‘‘(B) rely upon data that are publicly avail23 able, reliable, and compiled and maintained by 

24 the International Monetary Fund or, if the 

25 International Monetary Fund cannot provide 
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1 the data, by other international organizations or 

2 by national governments; and 

3 ‘‘(C) use inflation-adjusted, trade-weighted 

4 exchange rates.’’. 

5 SEC. 3. REPORT ON IMPLEMENTATION OF ACT. 

6 (a) IN GENERAL.—Not later than 9 months after the 

7 date of the enactment of this Act, the Comptroller General 

8 of the United States shall submit to Congress a report 

9 on the implementation of the amendments made by this 

10 Act. 

11 (b) MATTERS TO BE INCLUDED.—The report re12 quired by subsection (a) shall include a description of the 

13 extent to which United States industries that have been 

14 materially injured by reason of imports of subject mer15 chandise produced in foreign countries with fundamentally 

16 undervalued currencies have received relief under title VII 

17 of the Tariff Act of 1930 (19 U.S.C. 1671 et seq.), as 

18 amended by this Act. 

Passed the House of Representatives September 29, 

2010. 

Attest: 

Clerk. 

111TH CONGRESS 

2D SESSION H. R. 2378 

AN ACT 

To amend title VII of the Tariff Act of 1930 to 

undervalued currency of any foreign country. to address subsidies relating to a fundamentally clarify that countervailing duties may be imposed