Sec. 711. Enhancement of engagement on currency exchange rate and economic policies with certain major trading partners of the United States
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Not later than 180 days after the date of the enactment of this Act, and not less frequently than once every 180 days thereafter, the Secretary shall submit to the appropriate committees of Congress a report on the macroeconomic and currency exchange rate policies of each country that is a major trading partner of the United States. Each report submitted under paragraph
(1)shall contain— for each country that is a major trading partner of the United States— that country’s bilateral trade balance with the United States; that country’s current account balance as a percentage of its gross domestic product; the change in that country’s current account balance as a percentage of its gross domestic product during the 3-year period preceding the submission of the report; that country’s foreign exchange reserves as a percentage of its short-term debt; and that country’s foreign exchange reserves as a percentage of its gross domestic product; and an enhanced analysis of macroeconomic and exchange rate policies for each country— that is a major trading partner of the United States; the currency of which is persistently and substantially undervalued; that has— a significant bilateral trade surplus with the United States; and a material global current account surplus; and that has engaged in persistent one-sided intervention in the foreign exchange market. Each enhanced analysis under subparagraph (A)(ii) shall include, for each country with respect to which an analysis is made under that subparagraph— a description of developments in the currency markets of that country, including, to the greatest extent feasible, developments with respect to currency interventions; a description of trends in the real effective exchange rate of the currency of that country and in the degree of undervaluation of that currency; an analysis of changes in the capital controls and trade restrictions of that country; and patterns in the reserve accumulation of that country. Except as provided in paragraph (2), the President, through the Secretary, shall commence enhanced bilateral engagement with each country for which an enhanced analysis of macroeconomic and currency exchange rate policies is included in the report submitted under subsection (a), in order to— urge implementation of policies to address the causes of the undervaluation of its currency, its bilateral trade surplus with the United States, and its material global current account surplus, including undervaluation and surpluses relating to exchange rate management; express the concern of the United States with respect to the adverse trade and economic effects of that undervaluation and those surpluses; develop measureable objectives for addressing that undervaluation and those surpluses; and advise that country of the ability of the President to take action under subsection (c). The Secretary may determine not to enhance bilateral engagement with a country under paragraph
(1)for which an enhanced analysis of macroeconomic and exchange rate policies is included in the report submitted under subsection
(a)if the Secretary submits to the appropriate committees of Congress a report that describes how the currency and other macroeconomic policies of that country are addressing the undervaluation and surpluses specified in paragraph (1)(A) with respect to that country, including undervaluation and surpluses relating to exchange rate management. If, on the date that is one year after the commencement of enhanced bilateral engagement by the President with respect to a country under subsection (b)(1), the country has failed to adopt appropriate policies to correct the undervaluation and surpluses described in subsection (b)(1)(A) with respect to that country, the President may take one or more of the following actions: Prohibit the Overseas Private Investment Corporation from approving any new financing (including any insurance, reinsurance, or guarantee) with respect to a project located in that country on and after such date. Except as provided in paragraph (2), and pursuant to paragraph (3), prohibit the Federal Government from procuring, or entering into any contract for the procurement of, goods or services from that country on and after such date. Instruct the United States Executive Director of the International Monetary Fund to use the voice and vote of the United States to call for additional rigorous surveillance of the macroeconomic and exchange rate policies of that country and, as appropriate, formal consultations on findings of currency manipulation. Instruct the United States Trade Representative to take into account, in consultation with the Secretary, in assessing whether to enter into a bilateral or regional trade agreement with that country or to initiate or participate in negotiations with respect to a bilateral or regional trade agreement with that country, the extent to which that country has failed to adopt appropriate policies to correct the undervaluation and surpluses described in subsection (b)(1)(A). The President may not apply a prohibition under paragraph (1)(B) with respect to a country that is a party to the Agreement on Government Procurement or a free trade agreement to which the United States is a party. Before applying a prohibition under paragraph (1)(B), the President shall consult with the Director of the Office of Management and Budget to determine whether such prohibition would subject the taxpayers of the United States to unreasonable cost. The President shall consult with the appropriate committees of Congress with respect to any action the President takes under paragraph (1)(B), including whether the President has consulted as required under subparagraph (A). In this section: The term Agreement on Government Procurement means the agreement referred to in section 101(d)(17) of the Uruguay Round Agreements Act ( 19 U.S.C. 3511(d)(17) ). The term appropriate committees of Congress means— the Committee on Banking, Housing, and Urban Affairs and the Committee on Finance of the Senate; and the Committee on Financial Services and the Committee on Ways and Means of the House of Representatives. The term country means a foreign country, dependent territory, or possession of a foreign country, and may include an association of 2 or more foreign countries, dependent territories, or possessions of countries into a customs union outside the United States. The term real effective exchange rate means a weighted average of bilateral exchange rates, expressed in price-adjusted terms. The term Secretary means the Secretary of the Treasury.