Treasury Secretary Jack Lew highlighted on Monday the importance of U.S. engagement in the Pacific Rim with the goal of boosting demand and rebalancing global growth.
Lew will spend this week traveling around the Asia-Pacific region, stopping in several nations that are a part of the 12-nation Trans-Pacific Partnership (TPP) trade talks.
{mosads}”I am here in Asia this week to deepen our cooperation to increase demand, provide shared benefits throughout the global economy and level the playing field for our workers and businesses,” he wrote in a Wall Street Journal op-ed on Monday.
He called the TPP “the cornerstone of our shared growth agenda” and said it is envisioned as a “living agreement” that other Asia-Pacific economies can eventually join.
Lew will meet with government and business leaders in Tokyo on Tuesday, Singapore on Wednesday, Malaysia and Vietnam on Thursday and Beijing on Friday, Treasury Department officials said last week.
“With emerging economies playing an increasingly large role in the global economy, we must move away from a pattern of global growth that is built on the U.S. being the world’s importer,” he wrote.
In Japan, where Prime Minister Shinzo Abe has promised three arrows of reform, Lew is expected to discuss the nation’s need to strengthen domestic demand, avoid a reliance on exports and continue to respect G-7 and G-20 commitments not to target exchange rates.
“Structural reforms and a carefully calibrated fiscal adjustment will be key to supporting the ongoing recovery in demand so that Japan can realize lasting growth,” Lew wrote.
The United States and Japan are engaged in parallel negotiations over the TPP agreement with the result of those talks — designed to pry open Japan’s market to more U.S. goods and services — being included in any final trade deal.
Obama administration officials said an agreement will provide better access to decades-long issues that need to be addressed in Japan.
Leaders from the TPP nations, which include Malaysia, Japan, Vietnam and Singapore, said at a Bali summit last month that the goal is to complete an agreement by the end of the year.
Lew said that as the global economy continues its recovery, “it is all the more important for Asia’s surplus economies to draw on domestic sources for growth and move toward greater exchange rate flexibility.”
Exchange rates will be a big topic of conversation throughout Lew’s swing around the region. A majority of lawmakers in Congress have urged U.S. trade officials to include currency provisions in the TPP deal designed to protect against manipulation.
“China needs to move more quickly to a market-determined exchange rate and more open access to its markets,” he wrote.
Lew will be in China following the completion of that nation’s third plenum.
“We and the world will be watching closely this week as the Chinese leadership announces its new plan for reforms,” he wrote.
China’s economy is shifting to one more focused on domestic consumption and away from an exports.
“These efforts are imperative to sustain strong growth in the medium term,” he wrote.
There are some signs of progress in China’s willingness to make changes, including a commitment from Beijing to pursue a high-standard bilateral investment treaty with the United States.
He specifically mentioned that the Shanghai Free Trade Zone pilot program could lead to more open investment.
Some U.S. business leaders in China have said the new trade zone could be a first step to Beijing joining the TPP.
As the rest of the world’s economies improve, Lew touted better growth in the United States as well as adjustments made by many nations in the Asia Pacific to ensure that their economies will be more resilient in case of another global financial crisis.
“Now, we need to build on these strengths and deepen our ties with the most dynamic region in the world,” he said.