Asian Devaluations Show Need to Tackle Currency in TPP, Says Bipartisan Group of Senators
Recent moves by several Asian countries signal there may be a growing “pattern of competitive devaluation” in the Asia-Pacific region, and the U.S. should therefore include “meaningful and concrete” currency measures in the Trans-Pacific Partnership, said a bipartisan group of seven senators in a Sept. 15 letter (here) to U.S. Trade Representative Michael Froman and Treasury Secretary Jack Lew.
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The Chinese intervened in mid-August to devalue the renminbi by roughly four percent against the dollar (see 1508130010). That led Vietnam, a TPP partner, to intervene (see 1508220001). “We do not expect these devaluations to be the last, even in the near-term,” said the letter, spearheaded by Sens. Sherrod Brown, D-Ohio, and Rob Portman, R-Ohio. “Currency issues must be addressed seriously, aggressively, and promptly. Recent comments by foreign TPP negotiators to Senate staff members suggest very little progress has been made on this issue.” The AFL-CIO also recently said the interventions illustrate the need to tackle currency in TPP, but trade experts have said those rules will likely be unenforceable (see 1508180058).
Currency is on the docket in Customs Reauthorization conference, as well (see 1507070066). The Senate tacked a measure onto its customs bill that would force the Commerce Department to impose countervailing duties on imports from currency manipulators. Sens. Debbie Stabenow, D-Mich., Chuck Grassley, R-Iowa, Lindsay Graham, R-S.C., Richard Burr, R-N.C., and Jeff Sessions, R-Ala., signed onto the Sept. 15 letter behind Brown and Portman.