We 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.
Portman, the former U.S. Trade Representative, said the following in a press release last week after a meeting with United Auto Workers and management at Ford’s Sharonville Transmission Plant:
“On a level playing field, American auto workers can go toe-to-toe with anybody and win. Sometimes, that leads some of our competitors to try and cheat to get ahead. I heard those concerns from the auto workers I met with today,” Portman said following the meeting. “I’m convinced that exports are vital to the health of the auto industry, but we have to hold other countries accountable when they skirt trade rules. And that includes countries that manipulate their currency to disadvantage American workers. We need to make sure that our trade negotiators take these currency issues seriously as they seek to lower barriers to American exports.”
In early September I had the opportunity to meet with U.S. Rep. Mike Turner’s district director, Kelly Greers. Accompanied by two Dayton-area small business owners involved in local manufacturing, our trio thanked Turner for his past support of more rational trade policies and asked for his support in pushing the anti-currency manipulation agenda regarding TPP. If OFU hears more from Turner on these issues, I’ll let members know.
A final note on trade. I don’t work on these issues on a daily basis and chances are neither do you. Although agriculture in the U.S. (and Ohio) fares better than nearly every other industry in terms of trade balances, there are parochial reasons (if that’s what you need to be concerned about macroeconomic issues) for family farmers to monitor trade issues. JBS, a Brazilian company, now owns the third-largest U.S. meatpacker. Although their operations are conducted from Greeley, CO as JBS USA, their deal to buy Swift & Company in 2007 made them a huge player in U.S. agriculture. Just recently, the largest pork processor in the world, Smithfield Foods, an American company based in Virginia was purchased by Shuanghui, a Chinese company. Federal officials rubber-stamped the deal making it the largest Chinese takeover of an American company in history. Tyson Foods, reportedly wants to ship partially processed poultry to China, further process it – and send it back to the U.S. (How those economics work without cutting some corners on quality or food safety is beyond me.)
As it was summed up to me by Michael Stumo, CEO of the Coalition for a Prosperous America, when it comes to the economic issues that affect American workers, farmers and manufacturers, trade should have the same standing in policy debates as monetary policy (the Fed) and fiscal policy (federal budget issues).
July was the last reported month so far this year for the federal government’s measuring of monthly U.S. trade deficit. For July, it was -$39.1 billion.