news

Congressional opposition to a potential foreign trade agreement in the Pacific is ballooning over the absence of a provision that would prevent member countries from engaging in a form of economic gamesmanship known as currency manipulation.

As negotiations between the 12 countries in the Trans-Pacific Partnership have drawn nearer to a conclusion, Democrats have resisted giving the Obama administration so-called “fast-track” authority, under which Congress would be left with just an up-or-down vote on the agreement on which it had no input.

Democrats have traditionally been skeptical of trade agreements that would lower barriers to foreign imports and, they say, disadvantage American workers. But they are being joined by some Republicans, who were broadly in favor of granting the trade authority and who now say they may hold off on their approval unless the TPP includes language specifically dealing with currency manipulation.

According to the Peterson Institute for International Economics, as many as 5 million U.S. jobs were lost over the past decade as countries such as China and Japan kept the prices of their own exports down by lowering the value of their currencies relative to the U.S. dollar.

Rep. Debbie Dingell, D-Mich., said the auto industry in her state has been directly hit, to the tune of thousands of jobs, thanks to these practices. By some estimates, she said, each Japanese car imported to the U.S. results in an $8,000 “export subsidy” – so much that Japanese automaker Toyota Motor Corp. made more last year off currency than Ford Motor Co. did in its worldwide sales.

“When do you see the auto industry and the unions together” on an issue, she asked. “It is singularly the issue I am hearing about most when I am home over the weekend.

Bipartisan legislation introduced in both the Senate and House on Tuesday would require the Department of Commerce to investigate instances in which a country has artificially deflated the value of its currency in order to make their exports to the U.S. cheaper. Commerce already has the authority to open these investigations and impose duties to offset those export subsidies, but often declines to do so.

Click here to read the full story.