(Adds comments from lawmakers)
By Krista Hughes
WASHINGTON, Feb 10 (Reuters) - U.S. lawmakers on Tuesday vowed to keep pushing for rules against currency cheating in trade deals as they unveiled bipartisan legislation to stop America’s trading partners from manipulating exchange rates.
The bill comes on top of efforts to include rules against deliberate weakening of currencies in a Pacific trade agreement and in upcoming legislation to fast track trade deals through Congress.
“I believe there is bipartisan opposition to any trade agreement that doesn’t deal with currency,” said Republican Senator Lindsey Graham, a potential 2016 presidential candidate.
Graham joined nine other lawmakers from both parties and both chambers of Congress in introducing legislation putting currency manipulation on a par with export subsidies, meaning it could be offset by import duties.
The top Democrat on the House Ways and Means Committee said it complemented efforts to ensure currency rules are included in the Trans-Pacific Partnership, which the United States is negotiating with 11 trading partners, including Japan.
“The importance of raising this in the legislation and within TPP is to put currency manipulation into the mix of trade negotiations and trade discussions,” Representative Sander Levin told reporters.
Graham, who said he would not support a TPP deal which did not include currency, said there was “growing support” among both parties for a stronger U.S. stand on currencies.
The Obama administration is wary of attaching currency provisions to trade agreements and introducing currency into the TPP talks, which are close to completion, could set back progress.
Republican Senator Rob Portman, a former U.S. trade representative, said he would back the legislation. “Currency affects trade,” he said.
Fred Bergsten, a former U.S. Treasury official, said the bill was unlikely to have much effect on trade flows if enacted but that it was nevertheless important to take a stand. “Currency manipulation is the number one protectionist issue of the 21st century,” he said.
Bergsten and colleagues at the Peterson Institute for International Economics say trading partners’ currency manipulations have widened the U.S. current account deficit by $200 billion to $500 billion per year.
The new bill, which stops short of setting a new test for the U.S. Treasury to determine currency manipulators, is a streamlined version of earlier legislation that failed to clear Congress.
It could end up being attached to fast track legislation. Senate Finance Committee Chairman Orrin Hatch said work was continuing on that bill and he hoped to introduce it in the “near future.” (Reporting by Krista Hughes; Editing by Lisa Von Ahn and Chizu Nomiyama)