Business

Business groups support amendment on currency manipulation

by Vicki Needham - 05/20/15 3:48 PM ET

About three dozen business groups expressed support Wednesday for a bipartisan amendment they say would strengthen currency manipulation provisions without jeopardizing the completion of pending trade agreements.

The 37 mostly agriculture-focused groups said the proposal crafted by Senate Finance Committee leaders in conjunction with the Obama administration tries to tackle the issue of market-determined exchange rates that could work as part of global trade agreements.

{mosads}“This proposal reflects a careful balance of interests and an awareness of the conflicts that can arise when trade policy mechanisms are used to address monetary policy challenges,” the groups wrote in a letter to the Senate.

“It would also allow flexibility for U.S. negotiators to shape a first-time currency provision that parties to the Trans-Pacific Partnership (TPP) and other trade agreements may be willing to accept,” they wrote.

The amendment by Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Sen. Ron Wyden (Ore.), the panel’s top Democrat, is being offered to trade promotion authority, or fast-track, legislation.

The Senate is aiming to complete fast-track before leaving for the Memorial Day recess.

The Hatch-Wyden amendment gives negotiators a broader set of tools to use for addressing unfair currency practices.

The proposal complies with International Monetary Fund and World Trade Organization obligations.

Many lawmakers in both chambers are insisting on adding provisions into the trade deals that crack down on currency manipulation.

But finding a solution that the White House and the U.S. trading partners could broadly accept has been a struggle up until now.

Another currency amendment drawn up by Sens. Rob Portman (R-Ohio) and Debbie Stabenow (D-Mich.), which would need only 51 votes to pass the Senate, has drawn a veto threat from the White House.

Treasury Secretary Jack Lew said Tuesday the Portman-Stabenow language would likely doom TPP talks and possibly make it more difficult for the Federal Reserve to make adjustments to monetary policy.

“There’s no question overreaching currency enforcement provisions can put the health of the American economy at risk — raising the likelihood of trade or currency wars and constraining the nation’s ability to set its own monetary policy,” Hatch said on the Senate floor.

Tags Orrin Hatch Ron Wyden