Two chambers, and two majorities that want a currency rule in any TPP deal

Posted by mmcmullan on 09/24/2013

It’s a lovely day here in Washington, DC and this morning brought some heartening news: 60 Senators have signed their names to a letter that asks the administration officials to address currency manipulation in the Trans-Pacific Partnership (TPP) trade negotiations.

So that’s pretty cool; that makes majorities in both chambers of Congress that want a rule to deal with currency manipulation in the TPP (230 House members signed a similar letter back in June). But in the end, will such a rule make it in?

No, probably not. It’s telling that just two weeks ago, Treasury Secretary Jack Lew and Michael Froman, the United States Trade Representative, met with a key House committee to talk about their currency concerns and made no firm commitments to do anything about them. Could be they’re afraid that using TPP as a vehicle to address currency manipulation (like they should) would scuttle negotiations that are already not going well, despite President Obama’s stated goal of a signed agreement by the end of the year. That’s the concern of some groups that support the deal, reports the Hill.

But we at the Alliance for American Manufacturing (AAM) would be fine with that. No, really. As AAM President Scott Paul put it in an opinion while it was still only rumored that Japan was going to join the TPP talks, we’re all for trade … just not trade at any cost:

So far, the Administration's response to these real concerns has been inadequate. Relying on goodwill and promises from our trading partners shouldn't be enough to pass muster. Either binding commitments – subject to a withdrawal of trade benefits – must be included in the TPP, or the agreement should be shelved.

AAM’s ManufactureThis blog has laid out the case often as to exactly why currency manipulation is such a damaging move by some of our biggest trading partners. Countries that do it (like China and Japan) are able to boost their exports into the U.S. market while taxing American goods entering their own. It’s one of the reasons we run absurd trade deficits with these countries. Our trade deficit with China is cartoonishly big, and the deficit with Japan is terrible, too.

You don’t often find bipartisan consensus on anything in Washington, but who woulda thought? Addressing currency manipulation is one of them.

So here’s a moment to seize. President Obama: Please don’t let American manufacturing workers to get worked over by another trade agreement that allows currency manipulation by the other signees – cheating, effectively – to slide. A TPP deal that doesn’t include a currency rule isn’t going to help your stuck-in-the-mud campaign pledge to create 1 million new manufacturing jobs by the end of your second term. If anything, it’s gonna hurt it by adding to the trade deficit. We need to bring down those trade deficits, addressing currency manipulation would do so, and majorities in Congress think now’s a good time to do it.

Also of note: The buzz about currency manipulation and the TPP deal isn't the only currency discussion going on in Washington. A bill in the House of Representatives – H.R. 1276, the Currency Reform for Fair Trade Act – is making its way around the Hill and picking up co-sponsors. It would add currency manipulation to the list of offenses around which American businesses could build trade cases. Has your rep signed on yet? Check out AAM's interactive map. And if not, send them a letter asking them why.

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