The Obama administration must insist that US trading partners pledge not to manipulate currencies when negotiating trade deals, the Senate Committee on Finance chairman said on Friday. In a speech laying out his conditions for supporting trade deals, Republican Orrin Hatch said addressing currency concerns was key to winning lawmakers' support for a bill to fast-track trade agreements through Congress, and deals such as the Trans-Pacific Partnership.
"Pretending these concerns don't exist will not suffice," he told the American Enterprise Institute. "The administration must engage much more effectively with Congress on this issue if they want to receive strong support for TPA (trade promotion authority) and any subsequent trade agreements."
Lawmakers from both parties are pushing the US administration to take a stronger stand against trading partners which seek to gain an edge with a weaker currency, which makes their exports cheaper. But President Barack Obama told House Democrats on Thursday that including provisions against currency manipulation in deals currently under negotiation was unworkable, one member of Congress who was in the room said.
The administration is close to sealing a trade pact with 11 Asia-Pacific trading partners, the Trans-Pacific Partnership (TPP), and is also negotiating a deal with the European Union. US Trade Representative Michael Froman said on Tuesday Treasury had the lead on currency issues.
Hatch said he expected that the fundamentals of a TPA bill to be introduced soon would be "substantially the same" as legislation drafted last year, which never progressed to a vote. The bill allows lawmakers to set negotiating objectives for trade deals in exchange for a yes-or-no vote on the final deal, without amendments. Hatch said he would not support any trade deals which did not include strong intellectual property protections.
Other conditions included investor-state dispute settlement provisions; no barriers to digital trade, and the elimination of tariffs on US exports of goods, services and agricultural products. Japan and Canada, partners in the TPP talks, had to accept more US farm exports, he said. "Let me be clear: If Japan, Canada and our other TPP partners are not willing to open their markets to our exports, the final agreement will never receive support in Congress," Hatch said.
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