Automobile manufacturers in the United States have been accusing Japan of manipulating currency to make exports cheaper and imports more expensive, in addition to employing non-tariff barriers to stop United States automobiles outside Japan. However, Japan refutes both allegations, and Ben Bernanke, Federal Reserve Chairman, also said earlier that Japan’s central bank is not manipulating its currency.
Senators ask to address currency manipulation
Yesterday, raising the concern, a group of 60 United States senators asked President Obama to look into the foreign currency manipulation in the Trans-Pacific Partnership (TPP) trade talks. The group, headed by senators Debbie Stabenow, D-Lansing and Lindsey Graham, R-S.C, urged the government to incorporate the issue of currency valuation in the 12 nation trade talks that will be held to decide upon forming the second largest free trade zone in the world, says a report from DetroitNews.
“Currency manipulation can negate or greatly reduce the benefits of a free trade agreement and may have a devastating impact on American companies and workers,” they wrote to Treasury Secretary Jack Lew and U.S. Trade Representative Mike Froman. Further, they noted that free trade agreement will enhance the trade, but will fail in resolving the currency manipulation, which can give birth to unfair trade and therefore harm the economy of the United States further.
Currency manipulation a hurdle for U.S. auto industry
Matt Blunt, president of American Automotive Policy Council, the trade group representing Detroit’s Big Three, said that the letter given to the United State government, which has the backing of senators, has made it clear that tough and enforceable currency disciplines are the topmost priority of the law makers who will give approval to all trade agreements negotiated by the administration
He added that Congress has produced the letter s few days before the APEC summit, which is due next month when President Obama will meet the premiers of 11 countries connected with TPP negotiations. Blunt also said that the auto industry is one of the leading export industries in the United States, and they are looking forward to a two-way trade. He said that the currency manipulation is a hurdle for trading in the 21st century and should be checked.
In the past, United States automakers and the United Auto Workers union have jointly made efforts to shut down Japan from the trade agreement. They are concerned that if the United States pauses the tariff on Japanese imports, then Japanese competitors will get a significant advantage that could trigger thousands of auto job losses in the United States.