Burr, Hagan urge action on currency manipulation
By Richard Craver
Winston-Salem Journal, N.C.
McClatchy-Tribune Information Services
Sept. 27–A bipartisan group of 60 U.S. senators is appealing again to the Treasury secretary to address foreign currency manipulation as negotiations proceed on a proposed Trans-Pacific free-trade agreement.
Economists say that most currency manipulation occurs when a country intentionally undervalues its currency to lower costs for companies operating in its territory. The lower value enables the companies to have a pricing advantage on foreign competitors, including those in the United States.
The group’s four-paragraph letter was sent Monday to Secretary Jack Lew and to Michael Froman with the Office of the U.S. Trade Representative.
Potential partnership members are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. Recent Trans-Pacific Partnership talks have involved customs, telecommunications, sanitary issues, technical barriers to trade, cross-border services, electronic commerce and labor.
The effort is being led by Sens. Lindsey Graham, R-S.C., and Debbie Stabenow, D-Mich., co-chairs of the Senate manufacturing caucus. Among the signees are Sens. Richard Burr, R-N.C., and Kay Hagan, D-N.C.
The senators say addressing potential currency manipulation issues is critical to meet “high standards worthy of a 21st century trade agreement.”
Compiled by Mason LinkerCurrency is the medium through which trade occurs and exchange rates determine its comparative value,” the senators wrote. “It is as important to trade outcomes as is the quality of the goods or services traded.
Compiled by Mason LinkerCurrency manipulation can negate or greatly reduce the benefits of a free-trade agreement, and may have a devastating impact on American companies and workers.”
Currency manipulation remains a hot-button import issue, particularly in the furniture, sock and textile industries. Hagan said the state has lost “hundreds of thousands of jobs over the last decade as a result of unfair trade agreements and currency manipulation.”
The senators cited a study by the Peterson Institute for International Economics as determining that foreign currency manipulation has already cost between 1 million and 5 million American jobs.
Compiled by Mason LinkerThere is no point in negotiating a TPP agreement to eliminate import duties if countries are allowed to effectively re-impose those duties by manipulating their currencies,” U.S. Rep. Sander Levin, D-Mich., said in a statement. Members of the U.S. House have made their own currency manipulation of the Obama administration.
Compiled by Mason LinkerWe must continue to oppose an unfair competitive advantage from our trading partners, through legislation and trade agreements,” Levin said.
Advancing a bill focused on currency manipulation in Congress has been challenging.
For example, the Currency Exchange Rate Oversight Reform Act of 2011 drew significant bipartisan support. It instructed the U.S. Commerce Department to consider China’s undervalued currency as an illegal subsidy. With that designation, U.S. companies on a case-by-case basis could seek relief through compensatory penalties against Chinese imports.
However, even though the bill passed the U.S. Senate by a 63-35 vote, it did not come out of a U.S. House committee. A similar bill was introduced in June but has not emerged from a Senate committee.
Currency-manipulation bills tend to face opposition from pro-retail trade groups, such as the U.S. Chamber of Commerce. Those groups say U.S. consumers benefit from lower retail cost for foreign-made products.
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