Lew to Urge Japan, China to Cut Current Account Surpluses
U.S. Treasury Secretary Jacob J. Lew will urge Asian nations to continue lowering current-account surpluses when he visits the region next week, Treasury officials said.
Lew, who is traveling to Japan, China, Singapore, Malaysia and Vietnam starting Nov. 12, also will discuss the importance of countries allowing financial markets to determine their exchange rates and that they refrain from using currencies for competitive purposes, according to the officials, who requested anonymity as a condition for briefing reporters.
Lew’s second visit to Asia this year is part of the Obama administration’s effort to improve economic ties with the region and prevent trading partners from manipulating their currencies to promote exports. Lew will also seek to advance talks on the Trans-Pacific Partnership agreement that would create a 12-nation trade bloc.
Lew will reaffirm President Barack Obama’s commitment to finish negotiations by the end of this year, the Treasury officials said today.
The Treasury secretary will reiterate the need for China to move closer to a market-determined exchange rate as emphasized in the department’s Oct. 30 currency report, one of the officials said. The yuan is “significantly undervalued,” the Treasury said in its twice-yearly review of currencies and economic policies, in which it declined to name China or any major trading partner a currency manipulator.
In Japan, Lew will reiterate that Prime Minister Shinzo Abe’s government needs to move ahead with structural changes to the economy to increase incomes and raise domestic demand, one of the Treasury officials said. Japan also should pursue fiscal consolidation in the medium term, the official said.
Abe, is attempting to revitalize his nation’s economy through a program of monetary easing, fiscal stimulus, and structural reforms -- the so-called three arrows of a strategy known as Abenomics.
Lew will raise so-called illicit finance issues surrounding North Korea and Iran, one of the officials said. The Treasury secretary will discuss ways countries can increase pressure on North Korea to persuade it to abandon nuclear and ballistic missile programs.
Lew will emphasize that sanctions have given Iran an incentive to negotiate in a serious and substantive manner, the official said. He will also tell his counterparts it’s essential that they continue to enforce sanctions and remain vigilant against any efforts by Iran to evade them.
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