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Senators Introduce Currency Exchange Rate Oversight Reform Act Of 2011

In the Senate, Sherrod Brown, D-Ohio, Charles Schumer, D-N.Y., Lindsey Graham, R-S.C., Olympia Snowe, R-Maine, Debbie Stabenow, D-Mich., Jeff Sessions, R-Ala., Robert Casey, D-Pa., and Richard Burr, R-N.C., have introduced the Currency Exchange Rate Oversight Reform Act of 2011 — a bipartisan legislation intended to stimulate U.S. job creation and investment by discouraging trading partners from illegally undervaluing their currencies to gain an unfair advantage. The legislation combines elements of the Schumer-Graham bill that was passed by the Senate Finance Committee in 2007 with separate legislation introduced this year by Sen. Brown and Snowe that passed the House of Representatives in 2010.

Specifically, the new Senate bill provides a World Trade Organization (WTO)-consistent manner for U.S. companies and workers to petition the U.S. Department of Commerce directly to impose countervailing duties, which would offset injury caused by imports from any country that subsidizes exports of its products by manipulating its currency — particularly China, whose continuing undervaluation of the renminbi to the U.S. dollar is a primary cause of record trade deficits with the United States, according to a new study released by the Economic Policy Institute entitled, "Growing U.S. Trade Deficit With China Cost 2.8 Million Jobs Between 2001 and 2010." Previous efforts to pass currency legislation directed at China have failed because of concerns it could prompt retaliation by the country, which is the biggest holder of U.S. government debt.

In addition, the merged bill includes methods to address the impact of currency misalignment on U.S. manufacturers and employs U.S. trade law to counter that impact; and it penalizes countries that that fail to adopt appropriate policies to eliminate currency misalignment.

Supporters including the Fair Currency Coalition (FCC) are urging the Senate to immediately pass the bill, which the FCC views as a "must have" to maximize the effectiveness of any jobs legislation Congress may consider.

September 27, 2011