[CTC] Two on currency...

Tue Apr 28 08:07:22 PDT 2015

Two articles below…

http://blogs.rollcall.com/wgdb/new-front-opens-in-fast-track-trade-fight/?dcz <http://blogs.rollcall.com/wgdb/new-front-opens-in-fast-track-trade-fight/?dcz>=

New Front Opens in ‘Fast-Track’ Trade Fight

Roll Call
By Neils Lesniewski
April 28, 2015

There’s no shortage of liberal opposition to President Barack Obama on the Trans-Pacific Partnership, but a more serious threat to the administration’s pro-trade alliance with Republicans might come from those who want to tackle the perpetually thorny issue of currency manipulation.

Sen. Rob Portman <http://www.rollcall.com/members/373.html> intends to bring an amendment to the floor as part of the “fast-track” debate that would make it a “principal negotiating objective” under TPA to create enforceable rules to combat unfair currency practices. It was voted down at the committee level, 11-15.

As a former U.S. trade representative under President George W. Bush, the Ohio Republican is among the Senate’s most experienced voices on trade policy, and he has consistently backed free trade. But while his stand is to be expected of a senator representing a large manufacturing state, it has put him at odds with his GOP allies on many other issues, as well as with the Obama Treasury Department.

Treasury Secretary Jacob J. Lew, in an April 21 letter to Finance Chairman Orrin G. Hatch <http://www.rollcall.com/members/493.html>, R-Utah, warned that including such language in the bill to revive Trade Promotion Authority would be problematic to the Asia-Pacific free trade agreement known as the TPP.

“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. Seeking enforceable currency provisions would likely derail the conclusion of the TPP given the deep reservations held by our trading partners,” Lew wrote. “As such, any amendment to 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.”

Responding to critics at the markup, Portman has argued stronger currency protections are essential.

“This is not about derailing anything or making it harder to pass anything, it’s about how to make it easier. It’s about how to be able to say with a straight face to the people who we’re hired by, ‘This is going to be good for you, for your families, for your ability to get ahead in life,'” Portman said.

And Portman’s many allies include Sen. Charles E. Schumer <http://www.rollcall.com/members/371.html>, the powerful New York Democrat.

Schumer, who appears a lock to become the Democrats’ next party leader in the Senate, was among the bipartisan supporters of Portman’s amendment, which could resurface on the floor as early as next week. He helped lead past efforts to crack down on currency actions by China, including a 2011 effort that received 63 “yes” votes.

“Here, I would just argue to my colleagues that we have to change the way we do trade agreements. I believe that we should do trade agreements, and I certainly believe in the administration’s goal of weening these nations away from China and putting them more in … our economic world,” Schumer said. “That’s a very appealing rationale, but it can’t come at the expense of doing things that are so untoward and so harmful to American workers.”

Schumer last week at the Finance Committee markup won approval, 18-8, of an amendment to block the Commerce Department from avoiding currency manipulation cases. While Schumer’s offering came on a sidecar to the main TPA legislation, Hatch nonetheless said Schumer was able to “smother” him on the currency issue.

Schumer has long been a leader of a bipartisan group championing legislation to target currency manipulation, with particularly biting criticism of China, and he might be expected to throw significant weight behind efforts to force the administration’s hand in this case.

Obama has been increasingly vocal in responding to fellow Democrats critical of his trade agenda, including during an MSNBC appearance, and there’s expected to be a full push against currency language or anything else that could hamstring trade deal efforts.

In a weekend letter, Democratic Sens. Sherrod Brown <http://www.rollcall.com/members/384.html> of Ohio and Elizabeth Warren <http://www.rollcall.com/members/46463.html> of Massachusetts responded by pushing back against Obama calling some critiques “dishonest.” But that wasn’t their only message for the president.

“Fast track, as currently written, would preclude Congress from amending or filibustering any trade agreement to this Congress or any future Congress — potentially through 2021. If passed, this legislation would grease the skids for approval of any additional trade agreements that might be advanced through the next two presidencies,” Brown and Warren wrote. “While we hope that future Presidents and future Congresses share our values, no one knows who will be using this authority once you leave office.”

The president used his weekly address to discuss the issue.

“If I didn’t think this was the right thing to do for working families, I wouldn’t be fighting for it. We’ve spent the past six years trying to rescue the economy, retool the auto industry, and revitalize American manufacturing. And if there were ever an agreement that undercut that progress, or hurt those workers, I wouldn’t sign it,” Obama said. “My entire presidency is about helping working families recover from recession and rebuild for the future.”

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http://www.freep.com/story/opinion/contributors/2015/04/27/trade-deal-currency/26455505/ <http://www.freep.com/story/opinion/contributors/2015/04/27/trade-deal-currency/26455505/>

Currency provisions essential in Asian trade pact

By Debbie Dingell, Detroit Free Press guest writer

After years of hard work, grit, and determination, Michigan's economy is finally coming back.

Manufacturing is in its best stretch of job growth in a decade, unemployment is at its lowest level in eight years, and the auto industry, the backbone of our economy, has come roaring back.

While the economy is growing stronger every day, many people in Michigan still don't feel the success at home or in their pocketbooks, which is why it's imperative we promote policies to help hardworking families get ahead. And a bad trade deal jeopardizes all the shared progress we've made.

With a major trade agreement set to come before Congress, we have an opportunity to level the playing field for the American worker, especially those in the auto sector, and create good jobs here at home.

But instead, last week a House committee began working on a bill that will limit Congress's ability to debate and amend trade agreements under a process known as Fast Track. Regrettably, Fast Track does not allow Congress to conduct the oversight to ensure trade legislation protects our economy and our workers.

And it does nothing to ensure that future trade agreements will stop currency manipulation, the mother of all trade barriers.

When countries artificially weaken their currency, it can dramatically tilt a level playing field and make it difficult for American workers to compete. For example, Japanese automakers now benefit from a yen that has weakened by around 40% during the past two years. This provides up to $8,000 in incremental profit for every vehicle they export to the United States – vehicles that we should be making here in the U.S. instead.

This is not a new problem. Although the Japanese are currently using monetary policy to weaken the yen, they have a long history of also directly intervening in the currency markets. They have intervened unilaterally 376 times in the past two decades. Japan's routine currency manipulation is detrimental to American industries.

And we know, because we have seen the impact on our economy firsthand. Without our trade deficit with Japan, Michigan would have an estimated 56,200 more jobs, according to a report from the Economic Policy Institute. Let me tell you, people feel it.

When we allow governments to intervene in currency markets to subsidize their exports, American workers lose. We don't need a replay of the same failed trade policies to know they don't work, because we've lived them.

A few years ago, the Obama Administration told us that the Korea Free Trade Agreement would help the auto industry. But while U.S. vehicle exports to Korea have increased by about 20,000 since the agreement has been in place, Korean imports to the U.S. have increased by more than 461,000. One contributing factor to this bad outcome is South Korea's manipulation of its currency. Unfortunately, like the Fast Track bill that will soon come before Congress, the Korea Free Trade Agreement did not include enforceable provisions to stop currency manipulation.

By not addressing currency, the Fast Track agreement just means lost jobs and wages for American workers.

I know our workers. They make the best product in the world and they can compete with anyone, anywhere. But they can't compete with the Bank of Japan or the Japanese Government.

We can do better for American workers, and we still have an opportunity. As negotiations on the Trans-Pacific Partnership move forward, negotiators should come to the table and include strong enforceable directives for currency.

Free trade partners must be held to high standards or we will never enjoy free trade. If the TPP is to be the trade template for the future, we should not look away or shy away from addressing the most important trade barrier of the 21st Century – currency manipulation. Anything else would be a missed opportunity to protect the hardworking men and women we represent.

Debbie Dingell, a Democrat from Dearborn, represents Michigan's 12th District in the U.S. House of Representatives. 

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