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AFL-CIO President Richard Trumka made the following statement after China’s latest currency manipulation:
China’s recent currency devaluation – to 4.4% over the past three days – provides further confirmation that the failure to include enforceable currency disciplines in the TPP leaves a gaping hole in U.S. trade policy.
China’s currency manipulation lowers the wages of Chinese workers and lowers manufacturing costs in China, creating an unfair trade advantage that has already cost millions of American jobs and closed thousands of American factories. This latest move, which will act as a tax on our exports and a subsidy for Chinese imports, further exacerbates the existing problem.
Japan, Singapore, and Malaysia are part of the proposed TPP club and they all have a history of egregious currency manipulation. Now, China’s actions risk triggering another round of currency devaluations among these and other TPP countries that will come at the expense of American workers.
The failure to address currency manipulation and undervaluation, not just by China, has been a major cause of the US trade deficit and manufacturing decline. It has turned trade agreements into trade tragedies and made the trade deficit a major drag on economic recovery.
Our existing currency policy has failed. This devaluation undoes four years of progress in rebalancing China’s unfair currency advantage. Relying on China’s good will regarding its exchange rate is a dangerous folly that leaves the U.S. economy and working families exposed.
These developments highlight the importance of insisting that the accession of new entrants to the TPP—should the TPP be concluded and enacted into law—be subject to approval by Congress. And now is the time for the Administration to insist upon currency rules in the TPP that can and will be enforced through trade sanctions. Such rules would also bind China should it ever join such a pact, and those rules could then become a global template for putting an end to the scourge of currency manipulation and undervaluation.
Contact: Carolyn Bobb (202) 637-5018