WASHINGTON, Nov 19 (Reuters) - U.S. Trade Representative Michael Froman on Tuesday sidestepped the question of whether concerns about currency manipulation could be included in a U.S. trade pact with 11 Pacific Rim countries that is supposed to be completed by the end of the year.
Previously, 230 U.S. House members and 60 senators had written to the administration to demand that any trade deal ensure that member countries do not engage in unfair currency practices that could hurt the U.S. economy.
Froman said he was also concerned about the issue of currency manipulation, but said it was unclear how it could play into the trade agreement.
“We’re consulting with Congress, we’re consulting with our stakeholders,” he said during a Wall Street Journal conference. “I think we agree on the seriousness of the issue. The question is how” to deal with it, he said.
That issue has come to the fore because of Japan’s decision to join talks on the trade pact, known as the Trans-Pacific Partnership, or TPP. Many U.S. lawmakers believe Japan has driven down the value of its currency to give its exporters an unfair price advantage, particularly in the auto sector.
A massive monetary stimulus program by Japan’s central bank has put downward pressure on the yen this year. But Japanese officials say the purpose of the program is to stimulate Japan’s domestic economy, not to influence its exchange rate. The country has also signed a pledge not to target its currency.
Froman said addressing indirect currency effects is more complicated, since the Federal Reserve is also involved in a massive bond-buying program to prop up the U.S. economy that has also weakened the dollar.
“We have to be careful, I think, how we talk about currency and how we link it to trade rules, because we certainly don’t want to put ourselves in a defensive position as well,” he said.
Froman also reiterated that he was committed to getting the TPP deal completed by the end of the year, despite some recent concerns about its transparency.
Consumer groups complain that the secrecy surrounding the talks limits the voice of regular citizens, in favor of industry.
“I think the transparency issue as a legitimate one,” Froman said, adding that the USTR has given more than 1,000 briefings to lawmakers since the beginning of the TPP negotiations.