{ "id": "R43242", "type": "CRS Report", "typeId": "REPORTS", "number": "R43242", "active": true, "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department", "versions": [ { "source": "EveryCRSReport.com", "id": 582284, "date": "2018-06-22", "retrieved": "2018-06-27T13:26:50.710163", "title": "Debates over Exchange Rates: Overview and Issues for Congress", "summary": "Exchange rates are among the most important prices in the global economy. They affect the price of every country\u2019s imports and exports, as well as the value of every overseas investment. Over the past decade, some Members of Congress have been concerned that foreign countries are using exchange rate policies to gain an unfair trade advantage against other countries, or \u201cmanipulating\u201d their currencies. Congressional concerns have focused on China\u2019s foreign exchange interventions over the past decade to weaken its currency against the U.S. dollar, although concerns have also been raised about a number of other countries pursuing similar policies. \nAt the heart of disagreements is whether or not countries are using policies to undermine free markets and intentionally push down the value of their currency. A weak currency makes exports cheaper to foreigners, which can lead to higher exports and job creation in the export sector. There can also be implications for other countries. From the U.S. perspective, U.S exporters and U.S. firms producing import-sensitive goods may find it harder to compete in global markets. However, U.S. consumers and U.S. businesses that rely on inputs from abroad may benefit when other countries have weak currencies, because imports may become less expensive. When foreign countries intervene in foreign exchange markets, it may also help lower U.S. borrowing costs.\nThrough the International Monetary Fund (IMF), countries have committed to avoiding currency manipulation. There are also provisions in U.S. law to address currency manipulation by other countries. The IMF has never cited a country for currency manipulation, and the U.S. Department of the Treasury has not done so since it last cited China in 1994. There are differing views on why. Some argue that countries have not engaged in policies that violate international commitments on exchange rates or triggered provisions in U.S. law relating to currency manipulation. Others argue that currency manipulation has occurred, but the provisions do not effectively respond to exchange rate disputes.\nLegislation in the 114th Congress\nThe 114th Congress responded to concerns about currency manipulation through Trade Promotion Authority (TPA) and customs legislation. TPA legislation signed into law in June 2015 (P.L. 114-26) included, for the first time, principal negotiating objectives addressing currency manipulation in trade agreements. Currency manipulation was also addressed in the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125). It enhanced Treasury reporting and bilateral engagement on exchange rate issues, and led to the creation of a new Treasury \u201cmonitoring list\u201d on currency manipulation.\nRecent Developments\nDuring the 2016 presidential campaign, combatting currency manipulation, particularly by China, was a key issue for Donald Trump. Since assuming office, President Trump has continued to express concerns about the exchange rate policies of other countries, although the Treasury Department has not formally labeled a country as a currency manipulator. In the renegotiation of the North American Free Trade Agreement (NAFTA), the Trump Administration has identified combatting currency manipulation as a negotiating objective. In March 2018, the Administration announced that, through negotiating modifications to the U.S.-South Korea Free Trade Agreement (KORUS FTA), the Treasury Department was finalizing a side agreement on currency with South Korea.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43242", "sha1": "89bda759eb1e415202bee968f39fc9e3fa7f9575", "filename": "files/20180622_R43242_89bda759eb1e415202bee968f39fc9e3fa7f9575.html", "images": { "/products/Getimages/?directory=R/html/R43242_files&id=/1.png": "files/20180622_R43242_images_ef46c0b591bb1ee5c6fbb624b5357c731dec83b1.png", "/products/Getimages/?directory=R/html/R43242_files&id=/3.png": "files/20180622_R43242_images_ea597cd8b776d318bd52a583cd29914a84b76403.png", "/products/Getimages/?directory=R/html/R43242_files&id=/2.png": "files/20180622_R43242_images_86a94ae0292ecb12cca90b66ed0c4b71875bb56d.png", "/products/Getimages/?directory=R/html/R43242_files&id=/0.png": "files/20180622_R43242_images_631fbe01aada490712a85338135ce4e6ba54f064.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43242", "sha1": "b14cad161c15698270c78d86f6383f85baf5bab6", "filename": "files/20180622_R43242_b14cad161c15698270c78d86f6383f85baf5bab6.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4911, "name": "East Asia & Pacific" }, { "source": "IBCList", "id": 4923, "name": "International Financial Markets" } ] }, { "source": "EveryCRSReport.com", "id": 451016, "date": "2016-03-22", "retrieved": "2016-03-24T16:49:02.999492", "title": "Current Debates over Exchange Rates: Overview and Issues for Congress", "summary": "Exchange rates are among the most important prices in the global economy. They affect the price of every country\u2019s imports and exports, as well as the value of every overseas investment. Over the past decade, some Members of Congress have been concerned that foreign countries are using exchange rate policies to gain an unfair trade advantage against other countries, or \u201cmanipulating\u201d their currencies. Congressional concerns have focused on China\u2019s foreign exchange interventions over the past decade to weaken its currency against the U.S. dollar, although concerns have also been raised about a number of other countries pursuing similar policies. \nAt the heart of disagreements is whether or not countries are using policies to undermine free markets and intentionally push down the value of their currency. A weak currency makes exports cheaper to foreigners, which can lead to higher exports and job creation in the export sector. There can also be implications for other countries. From the U.S. perspective, U.S exporters and U.S. firms producing import-sensitive goods may find it harder to compete in global markets. However, U.S. consumers and U.S. businesses that rely on inputs from abroad may benefit when other countries have weak currencies, because imports may become less expensive. When foreign countries intervene in foreign exchange markets, it may also help lower U.S. borrowing costs.\nThrough the International Monetary Fund (IMF), countries have committed to avoiding currency manipulation. There are also provisions in U.S. law to address currency manipulation by other countries. The IMF has never cited a country for currency manipulation, and the U.S. Department of the Treasury has not done so since it last cited China in 1994. There are differing views on why. Some argue that countries have not engaged in policies that violate international commitments on exchange rates or triggered provisions in U.S. law relating to currency manipulation. Others argue that currency manipulation has occurred, but that estimating a currency\u2019s \u201cequilibrium\u201d value is complicated and that the provisions do not effectively respond to exchange rate disputes.\nRecent Legislative Activity\nThe 114th Congress has responded to concerns about currency manipulation through Trade Promotion Authority (TPA) and customs legislation. TPA legislation signed into law in June 2015 (P.L. 114-26) includes, for the first time, principal negotiating objectives addressing currency manipulation. Largely in response to the TPA legislation, monetary authorities from the 12 TPP countries negotiated and released in November 2015 a joint declaration to addresses unfair currency practices. The declaration reaffirms commitments to avoid currency manipulation, requires greater transparency and reporting on currency interventions and other key indicators, and establishes regular dialogue among TPP members on exchange rates. It would take effect should TPP enter into force.\nCurrency manipulation was also addressed in the Trade Facilitation and Trade Enforcement Act of 2015 (P.L. 114-125). The law outlines provisions to enhance Treasury reporting and bilateral engagement on exchange rate issues. It does not include language from an earlier Senate version of the bill, which would have applied countervailing duties on imports from countries that manipulate their currency (similar to the proposals in H.R. 820 and S. 433). Neither the side agreement to TPP nor the customs legislation includes enforceable provisions on currency, for which some Members had advocated.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R43242", "sha1": "eb0c99edc4af90c6d238b9ec4c01ec94db24ed52", "filename": "files/20160322_R43242_eb0c99edc4af90c6d238b9ec4c01ec94db24ed52.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R43242", "sha1": "3b4f66fd3c1c65dedd5bd2d6b7c73228dc2c0f5b", "filename": "files/20160322_R43242_3b4f66fd3c1c65dedd5bd2d6b7c73228dc2c0f5b.pdf", "images": null } ], "topics": [ { "source": "IBCList", "id": 278, "name": "China, Taiwan, and Mongolia" }, { "source": "IBCList", "id": 3290, "name": "International Financial Institutions and Policies" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc795550/", "id": "R43242_2015Sep17", "date": "2015-09-17", "retrieved": "2016-01-13T14:26:20", "title": "Current Debates over Exchange Rates: Overview and Issues for Congress", "summary": "This report provides information on current debates over exchange rates in the global economy. It offers an overview of how exchange rates work; analyzes specific disagreements and debates; and examines existing frameworks for potentially addressing currency disputes. It also lays out some policy options available to Congress, should Members want to take action on exchange rate issues.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20150917_R43242_3621ddc63bfd05c476f5f658f8af0a5f02e48e13.pdf" }, { "format": "HTML", "filename": "files/20150917_R43242_3621ddc63bfd05c476f5f658f8af0a5f02e48e13.html" } ], "topics": [ { "source": "LIV", "id": "International finance", "name": "International finance" }, { "source": "LIV", "id": "Foreign exchange rates", "name": "Foreign exchange rates" }, { "source": "LIV", "id": "Foreign exchange", "name": "Foreign exchange" }, { "source": "LIV", "id": "Money", "name": "Money" }, { "source": "LIV", "id": "Congress", "name": "Congress" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc627010/", "id": "R43242_2015May07", "date": "2015-05-07", "retrieved": "2015-06-15T14:46:40", "title": "Current Debates over Exchange Rates: Overview and Issues for Congress", "summary": "This report provides information on current debates over exchange rates in the global economy. It offers an overview of how exchange rates work; analyzes specific disagreements and debates; and examines existing frameworks for potentially addressing currency disputes. It also lays out some policy options available to Congress, should Members want to take action on exchange rate issues.", "type": "CRS Report", "typeId": "REPORT", "active": false, "formats": [ { "format": "PDF", "filename": "files/20150507_R43242_1f666bf71e66fa895f2d152b55523979c625c312.pdf" }, { "format": "HTML", "filename": "files/20150507_R43242_1f666bf71e66fa895f2d152b55523979c625c312.html" } ], "topics": [ { "source": "LIV", "id": "International finance", "name": "International finance" }, { "source": "LIV", "id": "Foreign exchange rates", "name": "Foreign exchange rates" }, { "source": "LIV", "id": "Foreign investments", "name": "Foreign investments" }, { "source": "LIV", "id": "Money", "name": "Money" } ] }, { "source": "University of North Texas Libraries Government Documents Department", "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc267799/", "id": "R43242_2013Nov12", "date": "2013-11-12", "retrieved": "2013-12-03T12:16:12", "title": "Current Debates over Exchange Rates: Overview and Issues for Congress", "summary": "This report provides information on current debates over exchange rates in the global economy. It offers an overview of how exchange rates work; analyzes specific disagreements and debates; and examines existing frameworks for potentially addressing currency disputes. 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