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Detroit Free Press: Dingell: Currency provisions essential in Asian trade pactDetroit Free Press
Washington, DC,
April 27, 2015
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Debbie Dingell
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. Dingell pushes long-term care measure 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. Click here to read the full story. |