Treasury secretaries want currency out of any trade deals

Treasury Secretary Jack Lew on Tuesday joined 10 former department heads in pushing back against congressional efforts to add currency manipulation provisions to pending trade deals.

Lew wrote to congressional leaders arguing that requiring the policy as part of fast-track legislation risks the future of the 12-nation Trans-Pacific Partnership (TPP) agreement and President Obama’s broader trade agenda.

“Seeking enforceable currency provisions would likely derail the conclusion of the TPP given the deep reservations held by our trading partners,” he wrote. 

{mosads}Lew said a similar move by other countries to insist on currency provisions in a trade negotiation would not be looked at favorably by the United States, either.

“As such, any amendment to [trade promotion authority, or TPA] legislation requiring that the administration only seek enforceable currency provisions as a principal negotiating objective would undermine our ability to successfully conclude a TPP negotiation,” Lew wrote.

Sens. Rob Portman (R-Ohio) and Debbie Stabenow (D-Mich.) are expected to offer a currency amendment to the trade promotion authority bill at a Senate Finance Committee markup on Wednesday.

President Obama said several months ago that it would be too complicated to negotiate adding currency provisions to trade deals.

But both Republicans and Democrats have expressed concerns about countries such as China manipulating their currency to give them an edge in the global trade arena, hurting U.S. workers and pushing up the nation’s trade deficit.

Sen. Charles Schumer (D-N.Y.), a longtime vocal proponent of adding currency provisions, is expected to tackle the issue on Wednesday but wouldn’t reveal his strategy to reporters.

During a Tuesday hearing he said that “we need to do more against China.”

Lew has said that the Obama administration is making strides on the issue and shares congressional concerns as it continues to push major economies, like China, to market-determined exchange rates.

Separately, a group of 10 former Treasury secretaries — who served in Republican and Democratic administrations — wrote to congressional leaders suggesting, like Lew, that the “United States should continue to use multilateral and international mechanisms and diplomacy to prevent unfair currency manipulation.”

“We agree that no country should use an undervalued currency to gain an unfair competitive advantage and grow its exports,” they wrote to congressional leaders in a letter obtained by The Hill.

“While the desirability of including currency manipulation in trade agreements can be debated, as a practical matter, it is impossible to get agreement on provisions that subject currency manipulation to trade sanctions in a manner that both the United States and other countries would find acceptable,” they wrote as part of the letter of support for the passage of fast-track authority.

The letter was signed by Timothy Geithner, Henry Paulson Jr., John Snow, Paul O’Neill, Lawrence Summers, Robert Rubin, Nicholas Brady, James Baker III, W. Michael Blumenthal and George Shultz.

Meanwhile, automakers came out in favor of the proposed Portman-Stabenow amendment.

“We continue to work with lawmakers on both sides of the aisle to include strong and enforceable currency manipulation language in all future trade agreements,” said American Automotive Policy Council President Governor Matt Blunt in a statement.

Ziad Ojakli, group vice president for government and community relations with Ford, said “the current language in TPA does not adequately address this critical issue.”

“We believe TPA should direct U.S. negotiators to include strong and enforceable rules that prohibit currency manipulation,” he said.

He said the Portman-Stabenow amendment “would achieve that goal.”