The American Automotive Policy Council, which represents U.S. carmakers Chrysler, Ford and General Motors has aligned itself with a bipartisan coalition of lawmakers pushing to crack down on so-called currency cheats and ensure that the TransPacific Partnership Agreement (TPP) includes strict new currency rules.
Fearing increased competition from Japan, U.S. automakers have stated they will oppose the ambitious trade deal without strong currency rules. The American firms have in the past accused Japan of suppressing the value of its currency to give exports, particularly in the auto sector, a competitive boost. Despite a slight rally so far this year, the Yen is predicted to once again continue weakening relative to the U.S. dollar.
In a speech yesterday at the auto show in Washington, D.C., Ziad Ojakli, Ford Motor Company’s group vice president for government and community relations called on lawmakers include enforceable rules against currency manipulation – which he referred to as “the 21st-century trade barrier” – in any new trade legislation.
“To help build the case for free trade, we are urging the U.S. to secure strong and enforceable rules prohibiting currency manipulation in any trade deals or legislation,” Ojakli said. “In other words, we agree with bipartisan majorities in Congress that say let’s enforce the international currency rules that every country has already agreed to.” In the last session, over half of the U.S. Congress signed letters calling for tough TPP currency provisions, including 199 current House members and 50 current Senators.
Led by Michigan Senator Debbie Stabenow, lawmakers from both parties are said to be working on a bill that could be a further complication to the Obama administration’s efforts to obtain the trade promotion authority that would enable it to fast-track conclusion of the TTP negotiations after nearly five years of discussions.
Another Michigan legislator, Rep. Sander Levin, the top Democrat on the House Ways and Means Committee, is also working to introduce similar new legislation that would penalize countries for artificially suppressing currency values. The proposed law would mirror past efforts to curtail the practice by imposing antidumping and countervailing duties on imports of countries accused of doing so, Levin said.