Currency became a hot topic of debate on Capitol Hill in the past two days as US lawmakers considered moving forward President Barack Obama’s ambitious trade agenda by passing the so-called fast-track legislation.
The fast-track legislation, formally known as trade promotion authority (TPA), empowers the president to negotiate trade deals and then present them to Congress for up-or-down votes, with no amendments allowed, Xinhua reported.
If the legislation is passed by Congress, it will give US trading partners the confidence they need to put their best offers on the table and help the Obama administration conclude the ongoing Trans-Pacific Partnership (TPP) free trade talks, which are nearing completion after more than five years of negotiations.
Republicans who are now in control of both chambers of Congress have indicated that they are willing to grant the president the fast-track authority, but he faces stiff opposition from liberal Democrats and activists from labor unions, who are skeptical that trade deals have hurt US workers and increased income inequality.
The House Ways and Means Committee on Thursday approved the TPA legislation, with 25 votes in favor and 13 against votes, and only two of the panel’s 15 Democrats favored the legislation, highlighting the difficulty Obama still has with winning support within his own party.
A bipartisan group of lawmakers is ramping up pressure on the Obama administration to introduce enforceable provisions against currency manipulation into the TPA and trade agreements, arguing that addressing currency concerns could help boost US export competitiveness and pave the way for passage of TPA and trade agreements through Congress.
Currency Manipulation
“Adding currency language that is enforceable will actually pick up votes,” said Senator Debbie Stabenow, a Democrat from the state of Michigan, who on Wednesday offered an amendment addressing currency manipulation to the TPA legislation together with Republican Senator of Rob Portman from the state of Ohio.
“Without strong currency enforcement, it will not have my vote, “ said Stabenow, who represents US auto manufactures’ interests, worried about sharp depreciation of Japanese yen and fierce competition from Japanese auto makers.
But other lawmakers and the Obama administration have warned that it would be “counter-productive” to include enforceable currency provisions in trade agreements, as it could derail the president’s trade agenda.
“Given the deep reservations held by our trading partners, seeking enforceable currency provisions would likely derail the conclusion of the TPP,” US Treasury Secretary Jacob Lew told the House Ways and Means Committee Wednesday.
In a letter to high-ranking lawmakers Tuesday, Lew said consultation with other TPP countries showed that “they will not support the introduction of enforceable currency provisions in the context of trade agreements, and specifically, the TPP.”
