Obama against currency provision in trade bill
U.S. President Barack Obama’s administration on Tuesday came out strongly against his own Democratic Party’s proposals to curb currency manipulation as part of a sweeping Pacific trade pact Washington is negotiating with 11 nations.
While the White House reiterated its support for a recent deal that gives President Barack Obama “fast-track” authority to sign freetrade agreements without interference from the U.S. Congress, some members of his party seek to attach measures that would add enforceable currency manipulation rules.
Such an addition is backed by the largest U.S. labor union organization.
But in a letter to senior lawmakers, Treasury Secretary Jacob Lew said that while the administration strongly supports steps to end currency manipulation, “seeking enforceable currency provisions would likely derail the conclusion of the TPP (Trans-Pacific Partnership) given the deep reservations held by our trading partners.”
“We have a serious concern that in any trade negotiation other countries would insist that an enforceable currency provision be designed so it could be used to challenge legitimate U.S. monetary policy, an outcome we would find unacceptable,” Lew added.
Supporters of the currency provisions, particularly those whose states have a heavy auto-manufacturing base, argue that currency manipulation has led to the loss of millions of jobs.
“Currency manipulation is the mother of all trade barriers,” Michigan congresswoman Debbie Dingell said after the deal on trade promotion authority was announced last week.
Some Democratic and Republican lawmakers, as well as organized labor, oppose the fast-track authority — the first since 2007 — that would give Congress an up-ordown vote on upcoming free-trade agreements without the chance to provide input on the negotiations.
It still needs to pass both chambers of Congress and earn a presidential signature.
Richard Trumka, head of the AFL-CIO which represents 12.5 million American workers, warned Congress would “give away” crucial leverage on negotiating better deals for U.S. companies and workers by approving trade promotion authority without enforceable currency provisions.
“If we eliminate currency manipulation, we have the chance to gain almost six million jobs,” Trumka told the Senate Finance Committee, which holds a vote on the trade bill Wednesday.
Democrats have expressed skepticism about the Trans-Pacific Partnership because it would lower barriers to foreign imports and might disadvantage American workers.
Many also decry the economic gamesmanship of adminstrations like mainland China, which has long been accused of manipulating its currency in order to boost exports.
And while the mainland is not in the TPP, Trumka says accord members Japan, Malaysia and Singapore are also seen as currency manipulators.
Schumer said he was “disappointed” in Obama’s efforts to rein in yuan action and suggested Congress come together to pressure Beijing through trade legislation.