A bipartisan group of senators and representatives unveiled legislation Tuesday to clamp down on countries—like China—that cheat trade law by manipulating their currency. That cheating has cost millions of U.S. manufacturing jobs and is a major reason for the massive U.S. trade deficit.
Sen. Sherrod Brown (D-Ohio), one of the sponsors of the Currency Undervaluation Investigation Act, pointed to the Obama administration’s current negotiations over the Trans-Pacific Partnership (TPP) and said:
Instead of addressing our growing trade deficit, we’re pursuing trade deals with countries that manipulate their currency. Foreign companies that don’t play by the rules are actively trying to undermine the effectiveness of our trade laws.
Currency manipulation allows countries such as China to devalue their currency, artificially making China's goods less expensive and America's products more expensive. This is a major contributing factor in our lopsided trade relationship with China and the resulting job losses and wage suppression.
Who benefits from currency manipulation? Global corporations who ship jobs overseas to take advantage of the currency exchange rates but fail to pay workers living wages.
AFL-CIO President Richard Trumka said the currency manipulation legislation is an important piece in addressing unfair trade, but more should be done.
Currency manipulation has cost America as many as 5 million jobs, devastating many manufacturing communities. As a result, there continues to be strong bipartisan support for currency legislation in both the House and Senate. However, legislation by itself is not enough. We need to ensure that there are also strong, enforceable currency mechanisms in trade agreements that the U.S. negotiates—especially the Trans-Pacific Partnership, which includes countries that have engaged in such manipulation to boost exports.
The administration is seeking Fast Track approval for the TPP limits debate and prohibits amendments and improvements to the bill and doesn't give the public the opportunity to influence the process. Click here to read how TPP has been negotiated in secret and here for “10 Facts About Fast Track.”