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Senators Want Crackdown on Currency Manipulation in Trade Talks

Bipartisan group of Senators suggests currency valuation requirements be considered for Trans-Pacific Partnership and other trade agreements

Published on: Sep 26, 2013

More than half of U.S. Senators this week called on U.S. Trade Representative Michael Froman and Treasury Secretary Jack Lew to address concerns of foreign currency manipulation in ongoing Trans-Pacific Partnership talks.

The Senators say the TPP talks should include enforceable measures against currency manipulation to "ensure a level playing field on global trade" and help create American jobs.

Currency manipulation occurs when countries undervalue their currency, typically boosting exports and contributing to trade imbalances and market access limitations.

"Currency manipulation can negate or greatly reduce the benefits of a free trade agreement and may have a devastating impact on American companies and workers," the group wrote in a Sept. 24 letter.

U.S. Trade Ambassador Froman speaks at the TPP Ministers Meeting in Brunei, August 23, 2013. (USTR Photo)
U.S. Trade Ambassador Froman speaks at the TPP Ministers Meeting in Brunei, August 23, 2013. (USTR Photo)

"Failing to address foreign currency manipulation could lead to a permanent unfair trade relationship that further harms the United States economy," they added.

The group also cited a figure from the Peterson Institute for International Economics, which found that foreign currency manipulation has already cost between one and five American jobs.

A majority of House members in June cited the same figures, highlighting the importance of fair currency policies in trade deals in a letter to President Obama.

In their letter, Representatives said including currency disciplines in the TPP "is consistent with and will bolster our ongoing efforts to respond to these trade-distorting policies."

The Senators' request comes shortly after negotiators representing each of the 12 TPP countries – Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam – wrapped up a week of talks Sept. 21 in Washington, D.C.

According to the Office of the USTR, sanitary and phytosanitary issues – a key concern for U.S. livestock groups – were among the issues discussed.

The next meeting of TPP negotiators is set for Oct. 7-8 in Bali, Indonesia, during the Asia-Pacific Economic Cooperation Leaders Meeting. According to the USTR, the meeting is expected to be an "important milestone" in the TPP process, as leaders will recap decisions made thus far and lay out what still needs to be accomplished.

In a statement last week, Froman indicated that a timeline for TPP negotiation completion is within the year.

More on the TPP:
Doha Dead But Trade Lives On Through TPP Talks
Japan Entry Into TPP Offers Ag Benefits
Dairy, Pork Groups Pleased With Japan's Interest in TPP
TPP Must Include Canada Dairy Provisions, NMPF Says