Aaron Fobes, Julia Lawless (202)224-4515
A Smart Approach to Curbing Currency Manipulation
Hatch-Wyden Amendment Strengthens America’s Ability to Respond to Changing Economies
American job creators and workers can compete and win in today’s 21st century global economy as long as there is a level playing field. That’s why mercantilist trade practices, like currency manipulation, deserve serious attention and must be tackled with a smart approach.
There’s no question overreaching currency enforcement provisions can put the health of the American economy at risk – raising the likelihood of trade or currency wars and constraining the nation’s ability to set its own monetary policy.
Even more, such policies could derail America’s efforts to bring home high-standard trade agreements that will support better, higher-paying jobs.
As Treasury Secretary Jack Lew said in a recent letter regarding our international trading partners’ views on unworkable currency provisions, “They fear an approach that could ultimately block their central banks from applying appropriate monetary tools to maintain economic stability, and to respond when they, like our Federal Reserve Board, need to address macroeconomic challenges that threaten their domestic, and sometimes the global, economy.”
If the Trade Promotion Authority (TPA) legislation that is being debated in the Senate this week contains unworkable currency provisions, Secretary Lew has recommended the president veto the bill.
That’s why the Hatch-Wyden currency amendment (#1411) takes a different approach, a better approach, a smarter approach:
- Preserves Integrity of International Trade Agreements: The Hatch-Wyden amendment poses no threat to trade deals, like the Trans-Pacific Partnership (TPP).
- Increases Accountability: The Hatch-Wyden amendment directs the administration to make trading partners accountable for currency practices.
- Sets Out Effective Tools: The Hatch-Wyden amendment directs negotiators to use the most effective tools achievable, such as enforceable rules, transparency, reporting, monitoring, and cooperative mechanisms to address unfair currency practices.
- Prevents Likelihood of Currency Wars: The Hatch-Wyden amendment poses no threat to the independence of Federal Reserve monetary policy, or the autonomy of the U.S. Treasury in setting U.S. exchange-rate policy.
- Broad Bipartisan Support: The Hatch-Wyden amendment has garnered strong supported by the administration, along with a host of agricultural and business groups who understand the economic benefits of new export opportunities.
Bottom Line: The Hatch-Wyden amendment provides a smart approach that allows America to effectively address the challenges of currency manipulation while also preserving the nation’s ability to secure strong, high standard trade agreements that will benefit American farmers, ranchers, and job creators here at home.
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