By Former Governor of Missouri Matt Blunt, President of the American Automotive Policy Council
The fate of the Trans-Pacific Partnership (TPP) may be decided over the next few months, possibly even before the end of the year. TPP has the potential to be the most important trade pact since NAFTA and could create thousands of jobs in the United States, boosting exports and the overall economy. Regrettably, these benefits are in jeopardy unless the agreement includes strong and enforceable currency disciplines.
From an automotive perspective, currency manipulation both subsidizes our competitors’ exports to the US and around the world, and puts US exports at an equal cost disadvantage. The Peterson Institute estimates that foreign currency manipulation has resulted in a loss of 1-5 million jobs in the United States, and an increase of between $200-500 million in the US trade deficit.
Japan has a long history of intervening in its currency markets to sustain its export-driven economy. Japan’s inclusion in the TPP makes it vital that the TPP include a strong and enforceable currency discipline.
There is growing support for addressing this 21st century trade barrier. A broad, bipartisan majority of the US Congress has called for strict currency manipulation rules in the TPP. One letter signed by 230 US House members and another signed by 60 US Senators called for a high standard agreement that includes strong and enforceable currency disciplines. As a broad swath of America’s elected officials have acknowledged, trade is key to our future economic growth, but it needs to be done right.
Everyone agrees, the Trans-Pacific Partnership could be an economic boon throughout the Pacific Rim. However, the negotiating members must ensure that currency manipulation rules are in place and enforced. Otherwise, years of work and negotiations will not deliver on the economic growth that will benefit us all.