AFL-CIO: Use Pacific trade deal to crack down on currency manipulation
The AFL-CIO on Tuesday called on the White House to include tough currency manipulation provisions in a sweeping trade agreement.
Given the recent drops in China’s currency, the Trans-Pacific Partnership (TPP) needs enforceable rules that can halt the practice by countries seeking a global trading advantage by lowering the value of their currency, the labor union said.
The AFL-CIO argues that currency manipulation costs U.S. jobs, citing a report from the Economic Policy Institute that found ending the practice could create 5.8 million new jobs in the United States.
{mosads}“The U.S. failure to address currency manipulation and undervaluation, and not only in China, has been a major cause of the U.S. manufacturing decline and trade deficit, which now stands at $508 billion for 2014,” wrote William Samuel, director of the AFL-CIO’s government affairs department in a letter to congressional lawmakers.
“Existing currency policy has failed,” he wrote. “This most recent devaluation undoes four years of progress toward rebalancing China’s unfair currency advantage and demonstrates that relying on China’s good will regarding its exchange rate is a dangerous and unsustainable folly.”
Last week, China’s currency dropped 4.4 percent, with Chinese officials defending the move to align the yuan’s value with market-driven forces.
Samuel also noted that Japan, Malaysia and Singapore — three of the 12 nations negotiating the TPP — all have histories of of currency manipulation.
“China’s devaluation could certainly prompt them to follow suit,” he wrote.
Last week, AFL-CIO President Richard Trumka made a similar plea for U.S. trade officials to press the currency issue.
Several congressional lawmakers said last week that they probably will renew legislative efforts to crack down on currency manipulation when they return to Washington next month.
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