A bipartisan group of senators called Tuesday for more aggressive currency provisions in a Pacific nation trade deal, citing alarm at the Chinese devaluation that has contributed to market volatility worldwide.
Noting that China’s 4 percent devaluation of its currency has led other Asian countries to weaken their currencies, the senators wrote to the Obama administration that they “do not expect these devaluations to be the last, even in the near-term.”
In a letter sent to Trade Representative Michael Froman and U.S. Treasury Secretary Jack Lew, seven senators wrote that they “fear these recent currency interventions could lead to a pattern of competitive devaluation within the Asia-Pacific that could hurt U.S. workers and exports for years to come.”
The senators signing the letter included representatives of Rust Belt states with manufacturers exposed to currency movements, including Ohio’s Sherrod Brown, a Democrat, Rob Portman, a Republican and former trade representative, and Michigan’s Debbie Stabenow, a Democrat.
Republicans Chuck Grassley of Iowa, Richard Burr of North Carolina, Jeff Sessions of Alabama, and presidential contender Lindsey Graham of South Carolina also signed the letter.
Many senators of states exposed to competition from overseas in manufacturing have long sought a tougher U.S. stance on China’s management of its currency. A currency amendment in the legislation setting the terms for negotiations over the Paficic trade deal narrowly failed this spring, garnering 48 votes in the Senate.
Concerns about currency manipulation have grown this year, as the dollar has strengthened significantly as China has adjusted its exchange rate and loosened monetary policy.
Now, the senators want the currency provision addressed as part of the talks among the 12 nations over the proposed deal, known as the Trans-Pacific Partnership.
“Recent comments by foreign TPP negotiators to Senate staff members suggest very little progress has been made on this issue,” they wrote. “We would appreciate your perspective as to the impact these devaluations are having on U.S. workers and your efforts to address them in the continuing TPP negotiations.”
Lew in recent weeks has struck a tougher tone on China’s management of its currency, pledging to hold them “accountable” for their actions.
