Ford Motor Co. (F) said it will oppose the Trans-Pacific Partnership if the trade agreement doesn’t limit a country’s ability to manipulate its currency.
The proposed pact “is not likely to generate any net benefits for American manufacturers if it does not address the critical issue of currency manipulation,” Joe Hinrichs, Ford’s president of the Americas, said in a Feb. 6 speech at the Chicago Auto Show.
U.S. automakers, led by Dearborn, Michigan-based Ford, have accused Japan of weakening the value of the yen to benefit its auto industry -- something Japanese leaders deny. The benefits of a weakened yen were reflected this week in Toyota Motor Corp. (7203)’s third-quarter earnings, which showed operating profit from its home country of Japan surged 20-fold to 331.3 billion yen.
“When Toyota comes out and says half their profits are due to currency exchange of the yen, that’s a big deal,” Hinrichs said to reporters in Chicago.
The yen last year weakened against every major currency, except for the South African rand, helping boost earnings for Japanese exporters and fueling a 56 percent rally in the Nikkei, the index’s biggest surge since 1972.
The U.S. and 11 Pacific Rim nations are seeking to complete work on the Trans-Pacific Partnership agreement in coming months.
Ford, the largest U.S. exporter of automobiles and nation’s second-biggest automaker, said strong trade partnerships are needed to maintain its U.S. exports that have grown 50 percent since 2009, when auto-industry sales reached a 27-year low. The company shipped more than 370,000 vehicles from the U.S. last year.
Hinrichs said he is optimistic that the auto industry’s long-held concern about possible currency manipulation is being heard by Congress, which would have to approve any agreement.
“What’s different this time is a majority of the House and 60 Senators signed a letter to the president saying strong currency language needs to be in the trade agreement or they’re not going to approve it,” Hinrichs said.
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