Senator Stabenow Urges Top Officials to Address Currency Manipulation in International Trade Agreement

U.S. Senator Debbie Stabenow, Co-Chair of the Senate Manufacturing Caucus, today reiterated her commitment to hold countries accountable for engaging in unfair trade practices, which eliminate manufacturing jobs in Michigan. In a bipartisan letter to United States Trade Representative Michael Froman and Treasury Secretary Jack Lew, Senator Stabenow and her colleagues called on officials negotiating the Trans-Pacific Partnership to recognize the disastrous effects currency manipulation has on Michigan businesses, workers and jobs. The Trans-Pacific Partnership is a multi-national trade agreement currently being negotiated among the United States and 12 countries within the Pacific Rim. This letter comes after several Asian-Pacific countries began devaluing their currencies last month.

The letter reads in part: "As you know, we have long been concerned about currency issues, which directly impact the competitiveness of workers in our states and across the country. However, recently China devalued its currency by over 4 percent. In response to China's actions, Vietnam devalued its currency nearly 1 percent and Korea has since done the same. We do not expect these devaluations to be the last, even in the near-term. We fear these recent currency interventions could lead to a pattern of competitive devaluation within the Asia-Pacific that could hurt US workers and exports for years to come. Therefore, it is extremely important that TPP addresses currency issues in meaningful and concrete ways."

China, which is one of America's largest trading partners, has been devaluing its currency for years. A strong U.S. dollar against a weak foreign currency - particularly one that is artificially weak due to government manipulation - causes foreign products like appliances to be cheaper in Michigan and for Michigan products to be more expensive in countries that manipulate their currencies. When currencies are weak, companies in Michigan make less money while the cost of manufacturing goods goes up.

For years, Senator Stabenow has led the fight to toughen enforcement of existing trade agreements and hold other countries accountable for artificially undervaluing their currency. In May, she fought to include an amendment in the Trade Promotion Authority (TPA) that would add clear language to require that any future trade deals must include enforceable currency provisions. She is also the lead cosponsor of the Currency Undervaluation Investigation Act, which would require the U.S. government to penalize countries that intentionally devalue their currencies to make their own goods artificially cheap. Earlier this month, the White House called on Congress to send President Obama a currency enforcement bill. Currency manipulation is the most significant 21st century trade barrier that American manufacturers face today and has resulted in the loss of as many as five million jobs in the United States. Addressing this unfair practice could create hundreds of thousands of jobs in Michigan alone.

The letter was signed by Senators Rob Portman (R-OH), Sherrod Brown (D-OH), Chuck Grassley (R-IA), Richard Burr (R-NC), Jeff Sessions (R-AL), and Lindsey Graham (R-SC).

The full letter to United States Trade Representative Michael Froman and Treasury Secretary Jack Lew follows.

Dear Ambassador Froman and Secretary Lew,

We would appreciate you updating us on the efforts to address currency issues in the Trans-Pacific Partnership (TPP).

As you know, we have long been concerned about currency issues, which directly impact the competitiveness of workers in our states and across the country. However, recently China devalued its currency by over 4 percent. In response to China's actions, Vietnam devalued its currency nearly 1 percent and Korea has since done the same. We do not expect these devaluations to be the last, even in the near-term. We fear these recent currency interventions could lead to a pattern of competitive devaluation within the Asia-Pacific that could hurt US workers and exports for years to come. Therefore, it is extremely important that TPP addresses currency issues in meaningful and concrete ways.

Further, as China's recent devaluation demonstrated, these interventions can have significant and immediate global economic impacts. Thus, 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. We would appreciate your perspective as to the impact these devaluations are having on US workers and your efforts to address them in the continuing TPP negotiations.

Thank you for your attention to this issue.