The Japanese Prime Minister visits DC in the middle of a contentious trade debate.
Despite Tuesday's White House state dinner, which showcased the budding romance between the U.S and Japan through haikus and R&B lyrics, things aren’t as uncomfortably affectionate as they may appear. Underlying and ongoing dishonesty in Japan’s currency policy constitutes a betrayal of our close alliance. There is certainly no love lost between Abe and the 896,600 Americans who lost their jobs due to Japanese currency manipulation in 2013 alone, according to a recent Economic Policy Institute (EPI) report.
It is abundantly evident that a strong currency creates difficulty for exports to remain competitive against cheaper rivals. The United States has seen an increasing value in the dollar due to a resurgent economy founded on hard working Americans rebuilding after a devastating recession. We cannot evade the value of our currency as it reflects the value of our nation, our products, and our workforce. However, the depreciation of other currencies (particularly in Japan) has been coordinated with purpose and intent. It is nothing less than a deliberate attempt to undermine the progress that our economy has made and to undercut our manufacturers.
The following conclusions of EPI’s report on Japanese currency manipulation must be addressed earnestly and immediately. Eliminating currency manipulation could:
- Reduce the U.S. global trade deficit by between $200 billion and $500 billion each year;
- Increase overall GDP by between $288 billion and $720 billion every year; and
- Create between 2.3 million and 5.8 million U.S. jobs.
In recognition of these facts, the pomp and festivities of the White House seem misguided. We need frank discussion on the topic of currency manipulation, not frivolous ceremonies. We need the presence of American workers and manufacturers, not celebrity guests. What detached fantasy world is the White House living in? Every day that passes without proper foreign-exchange value enforcement further erodes the progress we have made and restrains our economic development.
Let’s unleash America’s potential by unburdening our export industry. Let’s reward honest and equitable trade policy. Let’s take action on Japan’s currency manipulation with enforceable provisions in the Trans-Pacific Partnership. When it comes to garnering a strong alliance with the U.S. while still pursuing unethical trade policies, Mr. Abe cannot have his cake and eat it too… unlike at the state dinner.