II
Calendar No. 381
109th CONGRESS
2d Session
S. 2467
IN THE SENATE OF THE UNITED STATES
March 28, 2006
Mr. Grassley (for himself, Mr. Baucus, Mr. DeMint, Ms. Stabenow, Mr. Lugar, Mr. Levin, Mr. Santorum, Mr. Craig, Mr. Chafee, Mr. Crapo, and Mrs. Dole) introduced the following bill; which was read the first time
March 29, 2006
Read the second time and placed on the calendar
A BILL
To enhance and improve the trade relations of the United States by strengthening United States trade enforcement efforts and encouraging United States trading partners to adhere to the rules and norms of international trade, and for other purposes.
Short title
This Act may be cited as
the United States Trade Enhancement
Act of 2006
.
Enforcement provisions
Suspension of new shipper review provision
Suspension of the availability of bonds to new shippers
Clause (iii) of section 751(a)(2)(B) of the Tariff Act of 1930 (19 U.S.C. 1675(a)(2)(B)(iii)) shall not be effective during the period beginning on April 1, 2006, and ending on June 30, 2009.
Report on the impact of the suspension
Not later than December 31, 2008, the Secretary of the Treasury, in consultation with the Secretary of Commerce, the United States Trade Representative, and the Secretary of Homeland Security, shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report containing—
recommendations on whether the suspension of section 751(a)(2)(B)(iii) of the Tariff Act of 1930 should be extended beyond the date provided in subsection (a); and
an assessment of the effectiveness of any administrative measure that was implemented to address the difficulties that necessitated the suspension under subsection (a), including—
any problem in the collection of antidumping duties on imports from new shippers; and
any burden imposed on legitimate trade and commerce by the suspension of bonds to new shippers.
Report on collection problems and analysis of proposed solutions
Report
Not later than 180 days after the date of the enactment of this Act, the Secretary of the Treasury, in consultation with the Secretary of Homeland Security and the Secretary of Commerce, shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report describing—
any major problem experienced in the collection of duties during the 4 most recent fiscal years for which data are available, including any fraudulent activity intended to avoid payment of duties; and
an estimate of the total amount of duties that were uncollected during the most recent fiscal year for which data are available, including, with respect to each product, a description of why the duties were uncollected.
Recommendations
The report shall include—
recommendations on any additional action needed to address problems related to the collection of duties; and
for each recommendation—
an analysis of how the recommendation would address the specific problem; and
an assessment of the impact that implementing the recommendation would have on international trade and commerce (including any additional costs imposed on United States businesses).
Trade enforcement personnel
Deputy United States Trade Representatives; General Counsel
Section 141(b)(2) of the Trade Act of 1974 (19 U.S.C. 2171(b)(2)) is amended to read as follows:
There shall be in the Office three Deputy United States Trade Representatives, 1 Chief Agricultural Negotiator, and 1 General Counsel. The 3 Deputy United States Trade Representatives, the Chief Agricultural Negotiator, and the General Counsel, shall be appointed by the President, by and with the advice and consent of the Senate. As an exercise of the rulemaking authority of the Senate, any nomination of a Deputy United States Trade Representative, the Chief Agricultural Negotiator, or the General Counsel, submitted to the Senate for its advice and consent, and referred to a committee, shall be referred to the Committee on Finance. Each Deputy United States Trade Representative, the Chief Agricultural Negotiator, and the General Counsel, shall hold office at the pleasure of the President. Each Deputy United States Trade Representative and the Chief Agricultural Negotiator shall have the rank of Ambassador.
.
Functions of position
Section 141(c) of the Trade Act of 1974 (19 U.S.C. 2171(c)) is amended—
by moving paragraph (5) 2 ems to the left; and
by adding at the end the following new paragraph:
A principal function of the General Counsel shall be to ensure that United States trading partners comply with obligations assumed under trade agreements to which the United States is a party. The General Counsel shall assist the United States Trade Representative in investigating and prosecuting disputes pursuant to trade agreements to which the United States is a party, including before the World Trade Organization, and shall assist the United States Trade Representative in carrying out the Trade Representative's functions under subsection (d). The General Counsel shall make recommendations with respect to the administration of United States trade laws relating to foreign government barriers to United States goods, services, investment, and intellectual property, and with respect to government procurement and other trade matters. The General Counsel shall perform such other functions as the Trade Representative may direct.
.
Compensation; effective date
In general
Section 5315 of title 5, United States Code, is amended by adding at the end the following new item:
General
Counsel of the Office of the United States Trade
Representative.
.
Effective date
The amendment made by this subsection shall take effect on the date that an individual nominated by the President to the position of General Counsel of the Office of the United States Trade Representative is confirmed by the United States Senate.
Continuation in office
The individual serving as General Counsel in the Office of the United States Trade Representative on the day before the date of the enactment of this Act may serve in the General Counsel position established pursuant to subsection (a) as Acting General Counsel until the date that an individual nominated to such position by the President is confirmed by the United States Senate.
Trade enforcement working group
Not later than 90 days after the date of the enactment of this Act, the United States Trade Representative shall establish an interagency Trade Enforcement Working Group.
Chairperson
The Trade Enforcement Working Group shall be chaired by the General Counsel of the Office of the United States Trade Representative and shall include the Assistant Secretary for Market Access and Compliance in the Department of Commerce, as well as other appropriate representatives from the Department of Commerce, and the Departments of State, Treasury, and Agriculture, and such other departments and agencies as the Trade Representative considers appropriate.
Duties
The Trade Enforcement Working Group shall assist the General Counsel of the Office of the United States Trade Representative in carrying out the principal functions described in section 141(c)(6) of the Trade Act of 1974.
Identification of trade enforcement priorities
In general
Section 310 of the Trade Act of 1974 (19 U.S.C. 2420) is amended to read as follows:
Identification of trade enforcement priorities
Identification and annual report
On or before the date that is 90 days after the date that the report required by section 181(b) is due to be submitted each calendar year, the United States Trade Representative shall—
identify the trade enforcement priorities of the United States;
identify trade enforcement actions undertaken by the United States during the preceding year and provide an assessment of the impact such trade enforcement actions have had in addressing foreign trade barriers;
determine the priority foreign country trade practices on which the Trade Representative will focus the trade enforcement efforts of the United States; and
submit to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a written report on the priorities, actions, and assessments required by paragraphs (1) and (2), as well as a nonconfidential summary of the determination required by paragraph (3), and cause such report and summary to be published in the Federal Register.
Factors To consider
In reaching the determination required by subsection (a)(3), the Trade Representative shall take into account all relevant factors, including—
the economic significance of any potential inconsistency between an obligation assumed by a foreign government pursuant to a trade agreement to which the United States is a party, and the policies or practices of such foreign government;
the major barriers and trade distorting practices described in the National Trade Estimate Report required under section 181(b);
the findings in other relevant reports addressing international trade and investment prepared by the United States Trade Representative during the 12 months preceding the date on which the report required by subsection (a)(4) is due to be submitted;
the implications of a foreign government's procurement plans and policies;
the international competitive position and export potential of United States products and services; and
the extent to which United States intellectual property rights are being infringed upon.
Consultation prior to report
Not later than 45 days before the date on which the report required by subsection (a)(4) is due to be submitted, the General Counsel of the Office of the United States Trade Representative shall—
appear before an open session of the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives to receive congressional input on the determination and assessment required by subsection (a)(3); and
provide an opportunity (after giving not less than 30 days notice) for the presentation of views by interested persons with respect to the determination and assessment required by subsection (a)(3), including a public hearing if requested by any interested person.
Consultation after report
Not later than 30 days after the date on which the report required by subsection (a)(4) is due to be submitted each calendar year, the General Counsel of the Office of the United States Trade Representative shall appear before closed sessions of the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives to brief each committee on the determination required by subsection (a)(3).
.
Conforming amendment
The table of contents for the Trade Act of 1974 is amended by striking the item relating to section 310, and inserting the following new item:
.
Technical amendments
Section 141(e) of the Trade Act of 1974 (19 U.S.C. 2171(e)) is amended—
in paragraph (1),
by striking 5314
and inserting 5315
; and
in paragraph (2),
by striking the maximum rate of pay for grade GS–18, as provided in
section 5332
and inserting the maximum rate of pay for level IV
of the Executive Schedule, as provided in section 5315
.
International monetary and financial policy
Short title
This title may be cited
as the International Monetary and
Financial Policy Cooperation Act of 2006
.
Findings
Congress finds as follows:
Section 3004 of the Omnibus Trade and Competitiveness Act of 1988 (22 U.S.C. 5304) requires the Secretary of the Treasury to undertake multilateral or bilateral negotiations with countries that have material global current account surpluses and have significant bilateral trade surpluses with the United States if the Secretary considers that such a country is manipulating its currency for purposes of preventing effective balance of payments adjustment or gaining unfair competitive advantage in international trade.
The global economy has changed dramatically since 1988, with increased capital account openness, a sharp increase in the flow of funds internationally, and an ever growing number of emerging market economies becoming systemically important to the global flow of goods, services, and capital. In addition, practices such as the maintenance of multiple currency regimes have become rare.
As a result of the evolutionary changes in the international monetary and financial system, the 1988 concept of currency manipulation appears increasingly dated.
While some degree of surpluses and deficits in payments balances may be expected, particularly in response to increasing economic globalization, large and growing imbalances raise concerns of possible disruption to financial markets. In part, such imbalances often reflect exchange rate policies that foster fundamental misalignment of currencies.
Currencies in fundamental misalignment can seriously impair the ability of international markets to adjust appropriately to global capital and trade flows, threatening trade flows and causing economic harm to the United States.
The effects of a fundamentally misaligned currency may be so harmful that it is essential to correct the fundamental misalignment without regard to the purpose of any policy that contributed to the misalignment.
Article IV of the International Monetary Fund Articles of Agreement states that in order to facilitate the exchange of goods, services, and capital among countries, to sustain sound economic growth, and to foster financial and economic stability, each member of the International Monetary Fund shall avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members.
The failure of a government to acknowledge a fundamental misalignment of its currency or to take steps to correct such a fundamental misalignment, either through inaction or mere token action, is a form of exchange rate manipulation and is inconsistent with that government's obligations under Article IV of the International Monetary Fund Articles of Agreement.
Definitions
In this title:
Secretary
The term Secretary means the Secretary of the Treasury.
Fundamental misalignment
The term fundamental misalignment means a material sustained disparity between the observed levels of an effective exchange rate for a currency and the corresponding levels of an effective exchange rate for that currency that would be consistent with fundamental macroeconomic conditions based on a generally accepted economic rationale.
Effective exchange rate
The term effective exchange rate means a weighted average of bilateral exchange rates, expressed in either nominal or real terms.
Generally accepted economic rationale
The term generally accepted economic rationale means an explanation drawn on widely recognized macroeconomic theory for which there is a significant degree of empirical support.
Repeal of the Exchange Rates and International Economic Policy Coordination Act of 1988
Subtitle A of title III of the Omnibus Trade and Competitiveness Act of 1988 (22 U.S.C. 5301–5306) is repealed.
Advisory Committee on International Monetary and Financial Policy
Establishment
In general
The President shall establish an Advisory Committee on
International Monetary and Financial Policy (in this title referred to as the
Committee
) to advise the Secretary in the preparation of an
annual report to Congress on International Economic Policy and Currency
Exchange Rates (described in section 206) and to otherwise advise the President
with respect to international monetary and financial policy and the impact of
the policy on the economy of the United States.
Membership
The Committee shall be comprised of no more than 7 individuals drawn from outside of the Federal Government. Members of the Committee shall be recommended by the Secretary on the basis of their objectivity and demonstrated expertise in finance, economics, or currency exchange, and appointed by the President for a term of 4 years or until the Committee expires. An individual may be reappointed to the Committee for additional terms. Appointments to the Committee shall be made without regard to political affiliation.
Duration of Committee
The Committee shall terminate on the date that is 4 years after the date of the enactment of this Act unless renewed by the President pursuant to section 14 of the Federal Advisory Committee Act (5 U.S.C. App.) for a subsequent 4-year period. The President may continue to renew the Committee for successive 4-year periods by taking appropriate action prior to the date on which the Committee would otherwise terminate.
Public meetings
The Committee shall hold at least 1 public meeting each year for the purpose of accepting public comments. The Committee shall also meet as needed at the call of the Secretary or at the call of two-thirds of the members of the Committee.
Chairperson
The Committee shall elect from among its members a chairperson for a term of 4 years or until the Committee terminates. A chairperson of the Committee may be reelected chairperson but is ineligible to serve consecutive terms as chairperson.
Staff
The Secretary shall make available to the Committee such staff, information, personnel, administrative services, and assistance as the Committee may reasonably require to carry out its activities.
Application of Federal Advisory Committee Act
In general
The provisions of the Federal Advisory Committee Act (5 U.S.C. App.) apply to the Committee.
Exception
Except for the annual public meeting required under subsection (c), meetings of the Committee shall be exempt from the requirements of subsections (a) and (b) of sections 10 and 11 of the Federal Advisory Committee Act (relating to open meetings, public notice, public participation, and public availability of documents), whenever and to the extent it is determined by the President or the Secretary that such meetings will be concerned with matters the disclosure of which would seriously compromise the development by the United States Government of international monetary and financial policy.
Reporting requirements
Reports required
In general
The Secretary, after consulting with the Chairman of the Board of Governors of the Federal Reserve System and the Committee, shall submit to Congress, on or before October 15 of each year, a written report on international economic policy and currency exchange rates.
Interim report
The Secretary, after consulting with the Chairman of the Board of Governors of the Federal Reserve System and the Committee, shall submit to Congress, on or before April 15 of each year, a written report on interim developments with respect to international economic policy and currency exchange rates.
Contents of report
Each report submitted under subsection (a) shall contain—
an analysis of currency market developments and the relationship between the United States dollar and the currencies of major economies and United States trading partners;
a review of the economic and financial policies of major economies and United States trading partners and an evaluation of how such policies impact currency exchange rates;
a description of any currency intervention by the United States or other major economies or United States trading partners, or other actions undertaken to adjust the actual exchange rate of the dollar;
an evaluation of the factors that underlie conditions in the currency markets, including—
monetary and financial conditions;
foreign exchange reserve accumulation;
macroeconomic trends;
trends in current and financial account balances;
the size, composition, and growth of international capital flows;
the impact of the external sector on economic growth;
the size and growth of external indebtedness;
trends in the net level of international investment; and
capital controls, trade, and exchange restrictions;
a list of currencies of the major economies or economic areas that are in fundamental misalignment (as defined in section 203(2)), and a description of any economic models or methodologies used to establish the list;
a description of any reason or circumstance that accounts for why each currency identified under paragraph (5) is in fundamental misalignment based on a generally accepted economic rationale;
a list of each currency identified under paragraph (5) for which the fundamental misalignment causes, or contributes to, a material adverse impact on the economy of the United States, including a description of any reason or circumstance that explains why the fundamental misalignment is not accounted for under paragraph (6); and
the results of any prior consultations conducted or other steps taken pursuant to section 207.
Development of report
The Secretary shall consult with the Chairman of the Board of Governors of the Federal Reserve System and the Committee with respect to the preparation of each report required under subsection (a). Any comments provided by the Chairman of the Board of Governors of the Federal Reserve System and the Committee shall be submitted to the Secretary not later than the date that is 15 days before the date each report is due under subsection (a). The Secretary shall submit the report after taking into account all comments received.
Subsequent actions
Negotiations and consultations
With respect to each currency identified under section 206(b)(7), the Secretary shall—
seek to enter into bilateral consultations with the government responsible for the currency in order to facilitate the adoption of appropriate policies to eliminate the fundamental misalignment;
seek the advice of the International Monetary Fund with respect to the Secretary's findings in the report submitted to Congress under section 206; and
encourage other governments, whether bilaterally or in appropriate multinational fora, to join the United States in seeking the adoption of appropriate policies by such government to eliminate the fundamental misalignment.
Additional action
In general
If, not later than 60 days after the date on which a currency is identified under section 206(b)(7), the government responsible for such currency fails to enter into bilateral consultations with the United States in order to facilitate the adoption of appropriate policies to eliminate the fundamental misalignment, the following shall apply until a notification described in paragraph (2) is provided to Congress:
The Overseas Private Investment Corporation shall not approve any new financing (including insurance, reinsurance, or guarantee) with respect to a project located within the territory governed by such government.
The Secretary shall instruct the United States Executive Director at each multilateral bank to oppose the approval of any new financing (including loans, other credits, insurance, reinsurance, or guarantee) to such government or for a project within the territory governed by such government.
The United States shall request that the International Monetary Fund engage in discussions with such government, including through special consultations, if appropriate, in order to facilitate the adoption of appropriate policies to eliminate the fundamental misalignment.
Notification
The Secretary shall promptly notify Congress when bilateral consultations are initiated with a government pursuant to this subsection, and shall cause such notice to be published in the Federal Register.
Failure To adopt changes
In general
Not later than 180 days after the date on which a currency is identified under section 206(b)(7), the Secretary shall determine whether the government responsible for such currency has failed to adopt appropriate policies to eliminate the fundamental misalignment, and shall promptly report such determination to Congress. If the Secretary determines that the government responsible for such currency has failed to adopt appropriate policies to eliminate the fundamental misalignment, the following shall apply until a notification described in paragraph (2) is provided to Congress:
The Overseas Private Investment Corporation shall not approve any new financing (including insurance, reinsurance, or guarantee) with respect to a project located within the territory governed by such government.
The Secretary shall instruct the United States Executive Director at each multilateral bank to oppose the approval of any new financing (including loans, other credits, insurance, reinsurance, or guarantee) to such government or for a project within the territory governed by such government.
The United States shall inform the Managing Director of the International Monetary Fund of the failure of such government to address a fundamental misalignment of its currency that is causing a material adverse impact on the economy of the United States, and shall request that the Managing Director of the International Monetary Fund consult with such government regarding the observance of the government's obligations under Article IV of the International Monetary Fund Articles of Agreement, including through special consultations, if necessary, and formally report the results of such consultations to the Executive Board of the International Monetary Fund within 180 days of the date of such request.
Notification
The Secretary shall promptly notify Congress when such government adopts appropriate policies to eliminate the fundamental misalignment, and shall cause such notice to be published in the Federal Register.
Waiver
The President may waive any action provided for under this subsection if the President determines that it is in the vital economic interest of the United States to do so. The President shall promptly notify Congress of such determination (and the reasons for the determination) and shall cause such notice to be published in the Federal Register.
International financial institution governance arrangements
Initial review
Notwithstanding any other provision of law, before the United States approves a proposed change in the governance arrangement of any international financial institution, as defined in section 1701(c)(2) of the International Financial Institutions Act (22 U.S.C. 262r(c)(2)), the Secretary shall determine whether any member of the international financial institution that would benefit from the proposed change, in the form of increased voting shares or representation, has a currency that is in fundamental misalignment, and if so, whether the fundamental misalignment causes or contributes to a material adverse impact on the economy of the United States. The determination shall be reported to Congress.
Subsequent action
The United States shall oppose any proposed change in the governance arrangement of any international financial institution (as defined in subsection (a)), if the Secretary renders an affirmative determination pursuant to subsection (a).
Further action
The United States shall continue to oppose any proposed change in the governance arrangement of an international financial institution, pursuant to subsection (b), until the Secretary determines and reports to Congress that the currency of each member of the international financial institution that would benefit from the proposed change, in the form of increased voting shares or representation, is not in fundamental misalignment.
Nonmarket economy status
In general
Paragraph (18)(B)(vi)
of section 771 of the Tariff Act of 1930 (19 U.S.C. 1677(18)(B)(vi)) is amended
by inserting before the end period the following: , including whether
the currency of the foreign country has been identified pursuant to section
206(b)(7) of the International Monetary and Financial Policy Cooperation Act of
2006 in any written report required by section 206(a) of such Act during the
24-month period immediately preceding the month during which the administering
authority seeks to revoke a determination that such foreign country is a
nonmarket economy country
.
Termination
The amendment made by this section shall be in effect during the 10-year period beginning on the date of the enactment of this Act.
Additional Assistant Secretary
In general
Additional Assistant Secretary
Section 5315 of title 5, United States Code,
is amended by striking (8)
in the item relating to Assistant
Secretaries of the Treasury, and inserting (9)
.
Duties and responsibilities
In designating the duties, responsibilities, and title of the Assistant Secretary of the Treasury established pursuant to paragraph (1), the Secretary may redesignate, in whole or in part, the duties, responsibilities, and title of any position of Assistant Secretary of the Treasury in existence on the day before the date of the enactment of this Act.
Continuation in office
The individual serving as Assistant Secretary for International Affairs in the Office of International Affairs of the Department of the Treasury on the day before the date of the enactment of this Act may serve in any position designated or redesignated pursuant to subsection (a) until the date a person nominated to such position by the President is confirmed by the United States Senate.
Authorization of appropriations
Office of the United States Trade Representative
Section 141(g)(1)(A) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)(A)) is amended by striking clauses (i) and (ii) and inserting the following:
$47,800,000 for fiscal year 2007.
$49,700,000 for fiscal year 2008.
.
March 29, 2006
Read the second time and placed on the calendar