Wall Street Journal: "TPA Bill Needs Enforceable Currency Manipulation Ban"

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Regarding your editorial “Trade Poison Pill” (April 22) which criticizes any enforceable actions against other countries manipulating their currency to distort trade: My top priority is to find new ways to strengthen our economy and create more good-paying jobs for Ohio workers.

[by Senator Rob Portman | April 23, 2015 |WSJ Opinion]

I agree with the Journal that one important way to jump-start the historically weak economic recovery we are experiencing is to expand export markets for U.S. workers, farmers and service providers. If we are to return to robust economic growth, we’ll need to get back in the business of knocking down trade barriers and selling more products stamped “Made in America” by negotiating new export-opening agreements for the first time in seven years.

These new agreements should seek to level the playing field so American workers can fairly compete. One way other countries have distorted trade and tilted the playing field against us is by intervening in currency markets to manipulate their currency, making their exports to us less expensive and our exports to them more expensive.

The Trade Promotion Authority bill working its way through Congress calls on the administration to address currency manipulation in pending trade negotiations. I would like the bill to give stronger guidance by urging the administration to push for rules against currency manipulation that can actually be enforced. Trade agreements are effective because they are enforceable.

The Journal has consistently opposed trade-distorting subsidies. Rooting out subsidies has been a core part of U.S. trade policy for many decades. Subsidies can take many forms, including currency manipulation. I don’t know anyone who does not, in principle, object to currency manipulation on the grounds that it acts like a broad-based subsidy and thereby distorts trade.

I agree there is a critical distinction between currency manipulation and legitimate monetary policy and that countries should not be constrained in their macroeconomic policy. That is why my amendment specifically distinguishes between the two, using established IMF principles that nearly every country has agreed to abide by to determine when intervention occurs.

My amendment also provides discretion on the specific response, and simply calls on the administration to establish enforceable rules to combat the offensive and trade-distorting deliberate manipulation of currency exchange rates for the purpose of subsidizing exports.

My amendment addresses a problem everyone acknowledges exists and provides more support for trade, something I thought the Journal was eager to see.

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