II

103D CONGRESS

1ST SESSION S. 1034

To provide that the President may not extend to the People’s Republic

of China renewal of nondiscriminatory (most-favored-nation) treatment

beginning July 3, 1994, unless the President determines that the People’s

Republic of China is not manipulating its currency to prevent effective

balance of payments adjustments or to gain an unfair competitive advantage in trade.

IN THE SENATE OF THE UNITED STATES

MAY 26 (legislative day, APRIL 19), 1993

Mr. RIEGLE introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To provide that the President may not extend to the People’s

Republic of China renewal of nondiscriminatory (mostfavored-nation) treatment beginning July 3, 1994, unless

the President determines that the People’s Republic of

China is not manipulating its currency to prevent effective balance of payments adjustments or to gain an unfair competitive advantage in trade.

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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•S 1034 IS

1 SECTION 1. LIMITATION ON EXTENSION OF RENEWAL OF

2 MOST-FAVORED-NATION STATUS TO THE

3 PEOPLE’S REPUBLIC OF CHINA.

4 (a) FINDINGS.—The Congress finds that—

5 (1) section 3004 of the Exchange Rates and

6 International Economic Policy Coordination Act of

7 1988 (22 U.S.C. 5304) directed the Secretary of the

8 Treasury to analyze on an annual basis the exchange

9 rate policies of foreign countries to determine wheth10 er they are manipulating their currency to prevent

11 effective balance of payments adjustments or to gain

12 an unfair competitive advantage in trade;

13 (2) the Secretary of the Treasury is required

14 under section 3005 of such Act (22 U.S.C. 5305) to

15 submit annual reports (with semi-annual updates)

16 on international economic policy, including exchange

17 rate policy;

18 (3) the Secretary of the Treasury, in reports

19 submitted to the Congress in May 1992, December

20 1992, and May 1993, has determined that the Peo21 ple’s Republic of China is manipulating its exchange

22 rate in violation of such section 3004;

23 (4) the Secretary of the Treasury in the report

24 of May 1993 has determined that the bilateral trade

25 surplus of the People’s Republic of China with the

26 United States continues to grow at a rapid pace and
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1 has increased from $10,000,000,000 in 1990 to

2 $13,000,000,000 in 1991 to $18,000,000,000 in

3 1992, and could increase to over $20,000,000,000 in

4 1993; and

5 (5) the Secretary of the Treasury has engaged

6 in unsuccessful negotiations to get the People’s Re7 public of China to stop the manipulation of its ex8 change rate.

9 (b) LIMITATION ON WAIVER.—

10 (1) IN GENERAL.—Notwithstanding any other

11 provision of law, the President may not recommend

12 continuation of a waiver for the 12-month period be13 ginning July 3, 1994, under section 402(d) of the

14 Trade Act of 1974 for the People’s Republic of

15 China, unless the President reports in the document

16 required to be submitted by that section that the

17 President has made the determination described in

18 paragraph (2).

19 (2) DETERMINATION.—The determination de20 scribed in this paragraph is a determination by the

21 President, based on the analyses and reports of the

22 Secretary of the Treasury conducted pursuant to

23 sections 3004 and 3005 of the Exchange Rates and

24 International Economic Policy Coordination Act of

25 1988 (22 U.S.C. 5304 and 5305), that the Govern-
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1 ment of the People’s Republic of China has ceased

2 manipulating the rate of exchange between its cur3 rency and the United States dollar for the purpose

4 of preventing effective balance of payment adjust5 ments or gaining an unfair competitive advantage in

6 its trade with the United States.

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