NFU Calls Out Potential TPP Trade Partner for Currency Manipulation

NFU: Currency Manipulation Again Being Used by Potential TPP Partner to Gain Unfair Advantage Over U.S. Farmers and Ranchers

nfulogo-featNational Farmers Union President Roger Johnson today again urged the administration to ensure that the final Trans-Pacific Partnership (TPP) agreement include strong language against currency manipulation, which has been used recently by two of our trading partners- and consistently by other potential signatories of the TPP – to gain the edge on America’s farmers and ranchers.

“The devaluation of Vietnam’s currency this week and China’s last week underscores that mercantilism is alive and well around the world,” said Johnson. “Congress and the administration should take note that while many nations claim to be willing to drop blatant barriers in the name of free trade, they’re busy erecting new barriers on the side.”

Vietnam is a planned signatory onto the TPP, and will benefit from the elimination of trade barriers by many countries – like the U.S. – where it hopes to gain market share.

“The U.S. needs to prioritize meaningful measures to address currency manipulation with our trading partners,” said Johnson, who urged the administration to be wide-eyed and cautious moving forward with TPP negotiations. “Any major trade agreement that doesn’t have strong and enforceable language against currency manipulation isn’t worth the paper it’s written on,” said Johnson.

Johnson pointed out that currency manipulation is the most significant contributor to the massive U.S. trade deficit, which exceeded $505 billion in 2014.

“The trade deficit keeps growing because everyone seems to be watching out for their own best interests but the U.S.,” said Johnson. “The overall U.S. trade deficit is a 3 percent drag yearly on our national Gross Domestic Product and is robbing rural America and domestic agriculture of its potentially bright future” said Johnson.

 “If the TPP is signed without strong provisions against currency manipulation, that deficit will just continue to grow,” he said.

Portman signals support for currency manipulation protections in trade agreement

FILE: GOP Sen. Rob Portman Supports Gay MarriageWe learned Friday that U.S. Sen. Rob Portman, R-OH, has signed onto a letter to federal trade officials asking for currency manipulation protections in U.S. trade negotiations such as the Trans-Pacific Partnership.

The Ohio Farmers Union and National Farmers Union are supporters of the Coalition for a Prosperous America a coalition of manufacturing, agricultural, worker, consumer and citizen interests working at the grassroots to reshape U.S. trade policy that is based on roughly balanced trade among nations without surrendering sovereignty, damaging the environment or compromising food safety. CPA has been working to gain Portman’s and other federal legislators’ support for measures to reduce currency manipulation by other countries. Ohio Farmers Union past-President Joe Logan serves on the CPA Board of Directors Executive Committee. John Hansen, president of the Nebraska Farmers Union is also a member of the CPA board.

Currency manipulation is an important component of turning around the U.S. negative trade balance. Nations like China and Japan purposefully lower the value of their national currencies making products produced in their countries essentially discounted on world markets versus those manufactured in the United States. Ending currency manipulation around the world will not cure the U.S. trade problem on its own, but it is a reversible competitive disadvantage for U.S. manufacturers and farmers that can be solved if Congress and the Obama Administration were to make it a priority.

The Trans-Pacific Partnership is a proposed free trade agreement among among the United States, Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It would cover nearly all goods and services sectors. The Peterson Economic Institute lists Japan, Malaysia and Singapore as nations currently manipulating their currencies from the TPP partners.

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Krugman adds voice to Senate consideration of currency manipulation bill

Last week on this blog we ran a release from the National Farmers Union which urged the U.S. Senate to adopt legislation that hold currency manipulators, like China, accountable. Today, Nobel Laureate and New York Times columnist Paul Krugman devoted his column to this issue. Read the excerpt below and visit the NYT to read the entire column.

Ask yourself: Why is it so hard to restore full employment? It’s true that the housing bubble has popped, and consumers are saving more than they did a few years ago. But once upon a time America was able to achieve full employment without a housing bubble and with savings rates even higher than we have now. What changed?

The answer is that we used to run much smaller trade deficits. A return to economic health would look much more achievable if we weren’t spending $500 billion more each year on imported goods and services than foreigners spent on our exports.

To get our trade deficit down, however, we need to make American products more competitive, which in practice means that we need the dollar’s value to fall in terms of other currencies. Yes, some people will shriek about “debasing” the dollar. But sensible policy makers have long known that sometimes a weaker currency means a stronger economy, and have acted on that knowledge. Switzerland, for example, has intervened massively to keep the franc from getting too strong against the euro. Israel has intervened even more forcefully to weaken the shekel. …

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NFU: Senate bill must pass to make trade agreements more fair

Bill would help protect U.S. manufacturing & agriculture from currency manipulation by foreign governments

WASHINGTON (Sept. 30, 2011) – National Farmers Union President Roger Johnson sent a letter to U.S. Senate Leadership today urging them to pass S. 1619, the Currency Exchange Rate Oversight Reform Act of 2011. The bill would give the U.S. Treasury the authority to enforce existing currency manipulation laws with countries that trade with the U.S.

“The Currency Exchange Rate Oversight Reform Act is a comprehensive piece of legislation that uses U.S. trade law to counter the economic harm caused to U.S. farmers, ranchers and manufacturers due to currency manipulation,” said Johnson. “In addition to its 19 cosponsors, S. 1619 is supported by a broad coalition of farm, labor and manufacturing trade organizations and businesses.”

Unbalanced trade agreements have negative effects on the economy. They exacerbate our current trade deficit and cause job losses, which would be damaging to an already fragile economy.

“Before our trade can truly be fair, we need to ensure that all countries are playing by the same rules,” said Johnson. “For example, after signing the North American Free Trade Agreement, Mexico devalued its currency, wiping out most of the gains U.S. industries achieved in the agreement. This action set a precedent for our other trading partners, which continues today. As our country’s economic downturn continues, we cannot afford to continue to ignore the impact illegal currency manipulation has on the U.S. economy.”