February 5, 2015 / 4:11 PM / in 4 years

U.S. Treasury's Lew says wary of currency provisions in trade deals

U.S. Treasury Secretary Jack Lew testifies on U.S. President Barack Obama's Fiscal Year 2016 U.S. Government Budget proposal before a House Ways and Means Committee hearing on Capitol Hill in Washington February 3, 2015. REUTERS/Jim Bourg

WASHINGTON (Reuters) - The Obama administration is wary of attaching currency provisions to trade agreements because this might take away some of the tools Washington currently uses to press its currency agenda, the U.S. Treasury secretary said on Thursday.

In an appearance before the Senate Finance Committee, Treasury Secretary Jack Lew said this could inadvertently hurt Washington’s ability to pressure countries that weaken the currency to help their exports.

“The challenge in the context of a trade agreement is how to address the issue in a way that helps and doesn’t hurt,” Lew told lawmakers. “I would be concerned that the effectiveness we have dealing through the existing channels could be diminished in some ways if some approaches were taken.”

The administration is under pressure from some lawmakers to insist in potential trade deals that other countries pledge not to manipulate their currencies. Addressing currency concerns could be key to winning lawmakers’ support for a bill to fast-track trade agreements through Congress.

The United States is in talks with Asia-Pacific countries to reach a trade deal known as the Trans-Pacific Partnership.

Lew also said central banks, including the Bank of Japan and the Bank of England, were not engaging in unfair currency practices by asset purchase programs.

Reporting by Jason Lange, editing by G Crosse and Chizu Nomiyama

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