By Elvina Nawaguna and Krista Hughes
WASHINGTON Jan 9 American automakers on
Thursday pushed for rules against currency manipulation to be
included in an ambitious trade pact being negotiated between the
United States and 11 other Pacific Rim countries.
The American Automotive Policy Council, which represents
Chrysler, Ford and General Motors, said
participating nations should commit to not manipulating their
exchange rates to gain an unfair competitive advantage.
U.S. automakers worry that Japanese competitors may gain an
edge in the American market, especially if existing trade
restrictions are loosened under the Trans-Pacific Partnership
(TPP), which negotiators hope to finalize in coming months.
"Even the most promising trade pacts can be undermined by
currency manipulation," Matt Blunt, president of the council,
told reporters on a conference call. "The final TPP agreement
must include strong and enforceable currency disciplines that
allow markets and not government intervention to set exchange
The council's proposal would require TPP countries to be
transparent with information that includes their foreign
exchange holdings and interventions to purchase foreign assets.
If a TPP member is found breaching the currency rules, the
automakers' proposal would allow member countries to suspend the
tariff benefits of the offending country for at least a year.
The group said its proposal would not impede any TPP country
from having an independent monetary policy, and would not
prevent central banks from pursuing the bond-buying stimulus
programs that have been employed in the United States and Japan.
Those programs have been criticized from some quarters for
Countries negotiating the TPP include Mexico, Chile,
Canada, Australia and Malaysia, along with Japan and the United
States. A final deal would establish a free-trade bloc
stretching across a region that makes up nearly 40 percent of
the global economy and is populated by about 800 million people.
The new demands add further challenges to the massive trade
deal that the Obama administration had aimed to finalize before
the end of last year.
Some legislators, including Republican Senator Lindsey
Graham of South Carolina and Sander Levin, the top Democrat on
the House Ways and Means Committee, have said they would reject
a TPP deal that did not include a currency manipulation clause.
TPP negotiators failed to reach an agreement after a
four-day meeting in Singapore in December, remaining grid locked
over issues like intellectual property, agricultural tariffs and
The Obama administration has also sought Trade Promotion
Authority to allow it to speed up trade deals through Congress.
Details of a bill to give the White House such fast-tracking
power, seen as crucial to the success of the TPP talks, are due
to be announced later on Thursday and are also expected to
include a section on currency manipulation.