Automakers group presses for currency provisions in trade deals

An automakers’ business group said Thursday that a new Treasury Department currency report underscores the need to tackle the issue in pending trade agreements.

Matt Blunt, president of the American Automotive Policy Council, made the argument that Treasury’s recent report to Congress, which put five countries on a currency watch list, adds to the wealth of evidence that the Trans-Pacific Partnership (TPP), along with other trade deals, must include enforceable rules that crack down on exchange rate manipulation.

{mosads}“While some will see this watch list as a serious warning, others unfortunately may choose to ignore it,” Blunt said.

He said a high-ranking Japanese official announced that the new Treasury report wouldn’t spur his country to change its currency practices. 

“These dismissive comments echo those of Japan officials shortly after the Trans-Pacific Partnership currency forum was announced at the conclusion of the TPP negotiations last year,” Blunt said.

The Treasury said last week that it will closely watch and assess the currency practices of China, Japan, Korea, Taiwan and Germany. Only Japan is part of the 12-nation TPP. 

The new framework to assess global currency practices was implemented under a customs enforcement law signed by President Obama earlier this year.

No nations met the three standards for more enhanced monitoring or to be labeled as a currency manipulator.

The TPP includes a side agreement that requires the trading partners to meet on currency issues and move to resolve problems, but it doesn’t punish violators. 

The Peterson Institute for International Economics, which more than three years ago developed a framework for deterring currency manipulation that was embraced by a majority in Congress, said last year that the TPP’s side agreement meets congressional requirements. 

But the TPP’s currency plan hasn’t calmed the concerns of some lawmakers, many in the manufacturing-heavy Rust Belt, or among companies like global auto giant Ford. 

“Currency is the 21st century trade barrier, and it must be addressed in TPP,” said Ziad Ojakli, Ford’s group vice president of government and community relations, earlier this year.

For several years, Blunt worked with bipartisan groups of House and Senate lawmakers as well as with business leaders and labor unions to build support around the Peterson Institute’s framework and pitched it to the Obama administration.

But Obama and Treasury Secretary Jack Lew argued that adding currency provisions to trade deals would further complicate already difficult negotiations.

Instead, the Obama administration has preferred a diplomatic approach, working with problem countries like China on moving the yuan to a market-driven exchange rate.

China’s trade practices has been at the center of trade attacks made by presumptive Republican nominee Donald Trump.

There were several bipartisan attempts in the Senate last summer to add stronger currency provisions to a trade promotion authority measure. But those efforts failed amid White House opposition.