The National Farmers Union (NFU) wants Congress to take action on currency manipulation. In a Huffington Post guest column, NFU President Roger Johnson makes the case there needs to be enforceable language against the practice in all trade deals moving forward, including the Trans-Pacific Partnership (TPP).
“Currency manipulation has become our trade competitors’ favorite maneuver for skirting massive trade deals as soon as they sign them, and it’s about to happen again,” notes Johnson. “Before these trade deals become effective, some of our trading partners devalue their currency, immediately reducing the cost of their goods to us and everyone else, and increasing the cost of our goods to them.”
Johnson explains that while politicians on both sides of the aisle rally behind trade agreements because of claims that they will reduce or remove tariffs and export subsidies, large regional pacts, like the TPP, are also about setting fair rules for trade.
A significant portion of the TPP, for example, pertains to non-tariff barriers and includes chapters on the environment, labor rights and intellectual property. “Currency manipulation should be included as its own chapter since it is one of the most fundamental non-tariff barriers to trade. Unfortunately for the TPP, that is not the case,” he says.
Johnson said currency manipulation in past trade deals is keeping the U.S. from getting a fair shake in these deals. He pointed specifically to the case of Vietnam – one of the participating countries in TPP – which devalued its currency in response to a major devaluation by China earlier this summer. He said others are doing it as well, and there’s nothing to stop even more countries from doing the same.