II 

112TH CONGRESS 

1ST SESSION S. 328 

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. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 14, 2011 

Mr. BROWN of Ohio (for himself and Ms. SNOWE) introduced the following 

bill; which was read twice and referred to the Committee on Finance 

A BILL 

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, 

3 SECTION 1. SHORT TITLE. 

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

5 Fair Trade Act’’. 

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1 SEC. 2. CLARIFICATION REGARDING DEFINITION OF 

2 COUNTERVAILABLE SUBSIDY. 

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

4 the Tariff Act of 1930 (19 U.S.C. 1677(5)(E)) is amend5 ed— 

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

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

8 end and inserting ‘‘, and’’; and 

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

10 new clause: 

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

12 of a country in which the subject merchan13 dise is produced is exchanged for foreign 

14 currency obtained from export trans15 actions, and the currency of such country 

16 is a fundamentally undervalued currency, 

17 as defined in paragraph (37), the dif18 ference between the amount of the cur19 rency of such country provided and the 

20 amount of the currency of such country 

21 that would have been provided if the real 

22 effective exchange rate of the currency of 

23 such country were not undervalued, as de24 termined pursuant to paragraph (38).’’. 

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

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

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

2 case of a subsidy relating to a fundamentally undervalued 

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

4 in circumstances not involving export shall not, for that 

5 reason alone, mean that the subsidy cannot be considered 

6 contingent upon export performance.’’. 

7 (c) DEFINITION OF FUNDAMENTALLY UNDER8 VALUED CURRENCY.—Section 771 of the Tariff Act of 

9 1930 (19 U.S.C. 1677) is amended by adding at the end 

10 the following new paragraph: 

11 ‘‘(37) FUNDAMENTALLY UNDERVALUED CUR12 RENCY.—The administering authority shall deter13 mine that the currency of a country in which the 

14 subject merchandise is produced is a ‘fundamentally 

15 undervalued currency’ if— 

16 ‘‘(A) the government of the country (in17 cluding any public entity within the territory of 

18 the country) engages in protracted, large-scale 

19 intervention in one or more foreign exchange 

20 markets during part or all of the 18-month pe21 riod that represents the most recent 18 months 

22 for which the information required under para23 graph (38) is reasonably available, but that 

24 does not include any period of time later than 

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1 the final month in the period of investigation or 

2 the period of review, as applicable; 

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

4 currency is undervalued by at least 5 percent, 

5 on average and as calculated under paragraph 

6 (38), relative to the equilibrium real effective 

7 exchange rate for the country’s currency during 

8 the 18-month period; 

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

10 country has experienced significant and per11 sistent global current account surpluses; and 

12 ‘‘(D) during the 18-month period, the for13 eign asset reserves held by the government of 

14 the country exceed— 

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

16 debt obligations of the government falling 

17 due within the coming 12 months; 

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

19 money supply, using standard measures of 

20 M2; and 

21 ‘‘(iii) the value of the country’s im22 ports during the previous 4 months.’’. 

23 (d) DEFINITION OF REAL EFFECTIVE EXCHANGE

24 RATE UNDERVALUATION.—Section 771 of the Tariff Act 

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

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

2 the following new paragraph: 

3 ‘‘(38) REAL EFFECTIVE EXCHANGE RATE

4 UNDERVALUATION.—The calculation of real effective 

5 exchange rate undervaluation, for purposes of para6 graph (5)(E)(v) and paragraph (37), shall— 

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

8 be the simple average of, the results yielded 

9 from application of the approaches described in 

10 the guidelines of the International Monetary 

11 Fund’s Consultative Group on Exchange Rate 

12 Issues; or 

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

14 Monetary Fund’s Consultative Group on Ex15 change Rate Issues are not available, be based 

16 on generally accepted economic and econometric 

17 techniques and methodologies to measure the 

18 level of undervaluation; 

19 ‘‘(B) rely upon data that are publicly avail20 able, reliable, and compiled and maintained by 

21 the International Monetary Fund or, if the 

22 International Monetary Fund cannot provide 

23 the data, by other international organizations or 

24 by national governments; and 

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

2 exchange rates.’’. 

3 SEC. 3. REPORT ON IMPLEMENTATION OF ACT. 

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

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

6 of the United States shall submit to Congress a report 

7 on the implementation of the amendments made by this 

8 Act. 

9 (b) MATTERS TO BE INCLUDED.—The report re10 quired by subsection (a) shall include a description of the 

11 extent to which United States industries that have been 

12 materially injured by reason of imports of subject mer13 chandise produced in foreign countries with fundamentally 

14 undervalued currencies have received relief under title VII 

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

16 amended by this Act. 

17 SEC. 4. APPLICATION TO GOODS FROM CANADA AND MEX18 ICO. 

19 Pursuant to article 1902 of the North American Free 

20 Trade Agreement and section 408 of the North American 

21 Free Trade Agreement Implementation Act of 1993 (19 

22 U.S.C. 3438), the amendments made by section 2 of this 

23 Act shall apply to goods from Canada and Mexico. 

Æ 

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