Pacific Trade-Deal Nations Commit to Refrain From Currency Warsby
TPP countries echo G-20 vow to avoid competitive devaluation
U.S. automakers have called for enforceable provisions
The dozen countries that signed the Trans-Pacific Partnership have committed to refrain from competitive currency devaluations and be transparent about their exchange-rate policies, the U.S. said.
Negotiators for Pacific Rim nations including the U.S., Japan, Australia and Vietnam agreed last month to the deal, which would cut trade barriers on items ranging from cars to rice. It requires ratification by Congress.
The countries have pledged to “avoid unfair currency practices and refrain from competitive devaluation,” according to a fact sheet provided by the U.S. Treasury Department on a joint declaration that accompanies the deal. The language echoes a statement by Group of 20 finance ministers and central bankers at a meeting in Turkey in September.
The TPP nations have also promised to publish economic data that shine light on their exchange-rate policies, including foreign-exchange reserves and intervention in currency markets. Senior officials from each country will meet at least once a year to consult on exchange-rate policy, and will produce an annual report on the meetings.
U.S. automakers and steel producers had sought enforceable currency provisions as part of the agreement. Democratic presidential candidate Hillary Clinton cited inadequate safeguards against currency manipulation in opposing the deal last month.
The Treasury said the declaration addresses the main negotiating objectives on currency that Congress included in a June law granting President Barack Obama the authority to submit trade agreements to lawmakers for an expedited, up-or-down vote without amendments.
The currency declaration will rely on multilateral engagement and public pressure to enforce the commitments and transparency, a Treasury official said Wednesday. Countries that seek to join the TPP in the future will be required to join the currency declaration, the official said, briefing reporters on condition of anonymity.
Ford Motor Co. criticized the latest currency language, saying that it “does nothing to change the status quo.”
“It falls outside of TPP, and it fails to include dispute settlement mechanisms to ensure global rules prohibiting currency manipulation are enforced,” Ford said in an e-mailed statement.
The other TPP countries are Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru,
and Singapore. The provisions in the currency declaration indicate that Vietnam, Singapore and Malaysia will be increasing disclosures of their foreign-exchange data such as interventions, the U.S. official said.