Ways and Means Majority Staff Shoots Down Currency Legislation
Foreign currency manipulation is harming U.S. competitiveness and limiting export growth, but legislation introduced on Capitol Hill in recent days to confront manipulation through countervailing duties is “unproductive,” said the House Ways and Means Committee Republicans, led by chairman Paul Ryan, R-Wis., in a Feb. 12 briefing on the issue (here). Both the House and Senate introduced bipartisan bills on Feb. 10 designed to hit back against currency manipulation through hiking CVD duties on U.S. imports (see 1502120014).
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Should those bills become law, they would likely spur other countries to retaliate through imposing unilateral duties on U.S. goods, said the briefing. Foreign countries would also be in a position to challenge U.S. monetary policy if the U.S. attacks other government positions on currency, the briefing added. Ways and Means ranking member Sandy Levin, D-Mich., refuted that argument recently, saying the Treasury Department is safe from challenge (see 1502090017).
The last Trade Promotion Authority bill to surface in Congress urged the Office of the U.S. Trade Representative to negotiate trade agreements with countries that have market-based currencies, and that language is beneficial, said the briefing. “That’s why enacting trade legislation like TPA with a thoughtful approach toward currency manipulation is so critical,” it said. “Currency manipulation is a legitimate threat, but our response must be one that advances, rather than undermines, our trade agenda and our economy.” Stricter rules on currency manipulators, including the CVD measures, are poised to “derail” Trans-Pacific Partnership negotiations, the briefing said.