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Study On The International Legal Issues Of Currency Manipulation

Posted on:2007-07-12Degree:MasterType:Thesis
Country:ChinaCandidate:T LuFull Text:PDF
GTID:2166360185953547Subject:Law
Abstract/Summary:PDF Full Text Request
Exchange rate, the value of the money of one country compared to that of another country, has a great impact on the global economic activities. Under the International Monetary Fund Agreement ("IMF Agreement"), each member country is entitled to choose exchange rate arrangements and to determine as well as manage the exchange rate of the currency. In the meantime, each IMF member also agrees to comply with the IMF obligations, among which is to avoid manipulating exchange rates to prevent effective balance-of-payments adjustment or to gain an unfair competitive advantage over other countries. Nevertheless, both the IMF Agreement and the resolutions of IMF Executive Board fail to render a clear definition of"currency manipulation".The Chinese currency, Renminbi ("RMB") has become the subject of controversy since 2003. China was accused of manipulating the exchange rate by fixing its value in US dollars. A free market value for the RMB has been discouraged, thereby violating the World Trade Organization ("WTO") rules. In the United States, representatives from the small business communities such as the Fair Currency Alliance, Coalition for a Sound Dollar urged American government to terminate China's most-favored-nation treatment and challenge China's fixed currency exchange rate at WTO.However, what exactly constitutes exchange rate manipulation? Which results are justified? And like in any other international dispute, who shall exercise authority and give binding judgment to the parties concerned? What is the relationship between currency manipulation and subsidies? Would Chinese exchange rate system be regarded as currency manipulation? Could the RMB be challenged at WTO as a subsidy? There has not been much discussion concerning these questions.This dissertation focuses on these and related issues of currency manipulation. Besides the preface and conclusion, it is composed of four chapters as follows:Chapter One first reviews the exchange rate regime among different countries. Secondly, the chapter elaborates the stipulations concerning the currency manipulation under the IMF Agreement and IMF Executive Board resolutions. After that, the author tries to make a definition of"currency manipulation"by explaining the four elements. This chapter is aimed to give readers a preliminary and comprehensive understanding of currency manipulation.Chapter Two discusses the jurisdiction of currency manipulation by clarifying relevant international customs, IMF and WTO rules. It finally analyzes the feasibility of winning a lawsuit at WTO regarding the currency manipulation.Chapter Three expounds on the relationship between currency manipulation and subsidies. In this part, the author first turns to an overview of subsidies and countervailing measures. Then, the author sets forth the definition and classification of subsides in the Subsides and Countervailing Measures Agreement. An empirical analysis is also made in this chapter in light of some typical cases on the currency subsidy issues of Non-Market Economies.Being the keystone of the dissertation, Chapter Four starts with a brief introduction of RMB evolution progress, and expounds on the relationship between RMB and currency manipulation afterwards. Based on the above analysis, the author advances to explain the possibility of challenging RMB at WTO as a subsidy. A summary conclusion on the RMB exchange rate regime is set out at the end together with certain specific recommendations.
Keywords/Search Tags:Currency Manipulation, Jurisdiction, Subsidies, Exchange Rate of Renminbi
PDF Full Text Request
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