Currency Reform for Fair Trade Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Currency Reform for Fair Trade 
Act''.

SEC. 2. CLARIFICATION REGARDING DEFINITION OF COUNTERVAILABLE SUBSIDY.

    (a) Benefit Conferred.--Section 771(5)(E) of the Tariff Act of 1930 
(19 U.S.C. 1677(5)(E)) is amended--
            (1) in clause (iii), by striking ``and'' at the end;
            (2) in clause (iv), by striking the period at the end and 
        inserting ``, and''; and
            (3) by inserting after clause (iv) the following new 
        clause:
                            ``(v) in the case in which the currency of 
                        a country in which the subject merchandise is 
                        produced is exchanged for foreign currency 
                        obtained from export transactions, and the 
                        currency of such country is a fundamentally 
                        undervalued currency, as defined in paragraph 
                        (37), the difference between the amount of the 
                        currency of such country provided and the 
                        amount of the currency of such country that 
                        would have been provided if the real effective 
                        exchange rate of the currency of such country 
                        were not undervalued, as determined pursuant to 
                        paragraph (38).''.
    (b) Export Subsidy.--Section 771(5A)(B) of the Tariff Act of 1930 
(19 U.S.C. 1677(5A)(B)) is amended by adding at the end the following 
new sentence: ``In the case of a subsidy relating to a fundamentally 
undervalued currency, the fact that the subsidy may also be provided in 
circumstances not involving export shall not, for that reason alone, 
mean that the subsidy cannot be considered contingent upon export 
performance.''.
    (c) Definition of Fundamentally Undervalued Currency.--Section 771 
of the Tariff Act of 1930 (19 U.S.C. 1677) is amended by adding at the 
end the following new paragraph:
            ``(37) Fundamentally undervalued currency.--The 
        administering authority shall determine that the currency of a 
        country in which the subject merchandise is produced is a 
        `fundamentally undervalued currency' if--
                    ``(A) the government of the country (including any 
                public entity within the territory of the country) 
                engages in protracted, large-scale intervention in one 
                or more foreign exchange markets during part or all of 
                the 18-month period that represents the most recent 18 
                months for which the information required under 
                paragraph (38) is reasonably available, but that does 
                not include any period of time later than the final 
                month in the period of investigation or the period of 
                review, as applicable;
                    ``(B) the real effective exchange rate of the 
                currency is undervalued by at least 5 percent, on 
                average and as calculated under paragraph (38), 
                relative to the equilibrium real effective exchange 
                rate for the country's currency during the 18-month 
                period;
                    ``(C) during the 18-month period, the country has 
                experienced significant and persistent global current 
                account surpluses; and
                    ``(D) during the 18-month period, the foreign asset 
                reserves held by the government of the country exceed--
                            ``(i) the amount necessary to repay all 
                        debt obligations of the government falling due 
                        within the coming 12 months;
                            ``(ii) 20 percent of the country's money 
                        supply, using standard measures of M2; and
                            ``(iii) the value of the country's imports 
                        during the previous 4 months.''.
    (d) Definition of Real Effective Exchange Rate Undervaluation.--
Section 771 of the Tariff Act of 1930 (19 U.S.C. 1677), as amended by 
subsection (c) of this section, is further amended by adding at the end 
the following new paragraph:
            ``(38) Real effective exchange rate undervaluation.--The 
        calculation of real effective exchange rate undervaluation, for 
        purposes of paragraph (5)(E)(v) and paragraph (37), shall--
                    ``(A)(i) rely upon, and where appropriate be the 
                simple average of, the results yielded from application 
                of the approaches described in the guidelines of the 
                International Monetary Fund's Consultative Group on 
                Exchange Rate Issues; or
                    ``(ii) if the guidelines of the International 
                Monetary Fund's Consultative Group on Exchange Rate 
                Issues are not available, be based on generally 
                accepted economic and econometric techniques and 
                methodologies to measure the level of undervaluation;
                    ``(B) rely upon data that are publicly available, 
                reliable, and compiled and maintained by the 
                International Monetary Fund or, if the International 
                Monetary Fund cannot provide the data, by other 
                international organizations or by national governments; 
                and
                    ``(C) use inflation-adjusted, trade-weighted 
                exchange rates.''.

SEC. 3. REPORT ON IMPLEMENTATION OF ACT.

    (a) In General.--Not later than 9 months after the date of the 
enactment of this Act, the Comptroller General of the United States 
shall submit to Congress a report on the implementation of the 
amendments made by this Act.
    (b) Matters To Be Included.--The report required by subsection (a) 
shall include a description of the extent to which United States 
industries that have been materially injured by reason of imports of 
subject merchandise produced in foreign countries with fundamentally 
undervalued currencies have received relief under title VII of the 
Tariff Act of 1930 (19 U.S.C. 1671 et seq.), as amended by this Act.

SEC. 4. APPLICATION TO GOODS FROM CANADA AND MEXICO.

    Pursuant to article 1902 of the North American Free Trade Agreement 
and section 408 of the North American Free Trade Agreement 
Implementation Act of 1993 (19 U.S.C. 3438), the amendments made by 
section 2 of this Act shall apply to goods from Canada and Mexico.

Summary: Currency Reform for Fair Trade Act   Amends the Tariff Act of 1930 to include as a &quot;countervailable subsidy&quot; requiring action under a countervailing duty or antidumping duty proceeding the benefit conferred on merchandise imported into the United States from foreign countries with fundamentally undervalued currency. Defines &quot;benefit conferred,&quot; in cases where the currency of a foreign country is exchanged for foreign currency (i.e., U.S. dollars) obtained from export transactions, as the difference between: (1) the amount of currency provided by a foreign country in which the subject merchandise is produced, and (2) the amount of currency such country would have provided if the real effective exchange rate of its currency were not fundamentally undervalued. Declares that the fact that such a subsidy is also provided in circumstances not involving export shall not, for that reason alone, mean it cannot be considered export contingent and actionable under a countervailing duty and antidumping duty proceeding. Requires the administering authority to determine that the currency of a foreign country is fundamentally undervalued if for an 18-month period: (1) the government of the country engages in protracted, large-scale intervention in one or more foreign exchange markets; (2) the country's real effective exchange rate is undervalued by at least 5%; (3) the country has experienced significant and persistent global current account surpluses; and (4) the country's government has foreign asset reserves exceeding the amount necessary to repay all its debt obligations falling due within the coming 12 months, 20% percent of the country's money supply, and the value of the country's imports during the previous 4 months. Requires the use, for calculating a country's &quot;real effective exchange rate undervaluation,&quot; of certain guidelines of the Consultative Group on Exchange Rate Issues of the International Monetary Fund or, if those guidelines are not available, generally accepted economic and econometric techniques and methodologies. Requires the use, also, of inflation-adjusted, trade-weighted exchange rates. Applies the amendments made by this Act to goods from Canada and Mexico.