Obama against cur­rency pro­vi­sion in trade bill

The China Post - - WORLD BUSINESS -

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.

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