WASHINGTON, D.C. — Today, U.S. Sen. Sherrod Brown (D-OH) called on the Administration to protect American citizens, including its workers and businesses, in major trade deals like the Trans-Pacific Partnership (TTP). During the Senate Finance Committee’s hearing on “President Obama’s 2014 Trade Policy Agenda,” Brown urged United States Trade Representative Michael Froman to include protections against currency manipulation in TPP and to address “investor state” provisions which would allow Big Tobacco to circumvent public health and safety laws.
“Congress cannot support trade deals like the TPP unless Americans and their jobs are protected from unfair trade practices,” Brown said. “As our trade deficit continues to widen, we need to level the playing field for our manufacturers and workers. We can create millions of jobs—without adding a dime to the deficit—by cracking down on currency manipulators. We must also address so-called ‘investor state’ provisions which would allow multinational corporations—like Big Tobacco companies—to use trade law to undermine public health laws. We know that Big Tobacco will use every tool at its disposal to replace the 480,000 customers it loses every year to tobacco related deaths.”
In September 2013, Brown wrote to Froman, citing the need to crack down on currency manipulators like Japan when they unfairly undervalue their currency to give their exports an unfair price advantage over American manufactured goods. In February 2014, Brown unveiled a new report by the Economic Policy Institute (EPI) which showed that cracking down on currency manipulation could reduce the U.S. trade deficit by as much as $500 billion within three years, increase GDP by as much as $720 billion, and create as many as 5.8 million American jobs—all while reducing the federal budget by as much as $266 billion. The report concluded that, “ending currency manipulation is the best available tool for stimulating demand for domestic output and ending the hangover of excess unemployment from the Great Recession.”
Further, a December 2012 report by the Peterson Institute for International Economics concluded that currency manipulation by foreign governments had cost the U.S. from one million to five million jobs and increased the U.S. trade deficit by $200 billion to $500 billion per year. Brown is the author of bipartisan legislation, the Currency Exchange Rate Oversight Reform Act, which would counter this harm by using U.S. trade law to provide consequences to countries that fail to adopt appropriate policies to eliminate currency misalignment—all without adding a dime to the federal budget.
Brown also expressed his concern that the TPP includes “investor state” provisions that would allow multinational corporations—like Big Tobacco companies—to use the trade agreement to undermine public health efforts. Every year, 443,000 people are killed as a result of tobacco use in the United States alone. Accordingly, the TPP should explicitly recognize the unique health and regulatory status of tobacco products and ensure that TPP nations are able to fully implement and enforce tobacco control legislation like the Family Smoking Prevention and Tobacco Control Act of 2009.
The TPP is a proposed trade agreement that currently includes the United States, Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Canada, Mexico, and Japan. Congress has the constitutional authority to set the terms of trade and commerce with foreign nations.
Brown’s September 2013 letter to Froman can be read in its entirety below:
September 23, 2013
Secretary Jack Lew Ambassador Michael Froman
Department of the Treasury Office of the United States Trade Representative
1500 Pennsylvania Avenue N.W. 600 17th Street N.W.
Washington, D.C. 20220 Washington, D.C. 20508
Dear Secretary Lew and Ambassador Froman:
We agree with the Administration’s stated goal that the Trans-Pacific Partnership (TPP) has “high standards worthy of a 21st century trade agreement.” To achieve this, however, we think it is necessary to address one of the 21st century’s most serious trade problems: foreign currency manipulation.
Currency is the medium through which trade occurs and exchange rates determine its comparative value. It is as important to trade outcomes as is the quality of the goods or services traded. Currency manipulation can negate or greatly reduce the benefits of a free trade agreement and may have a devastating impact on American companies and workers.
A study by the Peterson Institute for International Economics found that foreign currency manipulation has already cost between one and five million American jobs. A free trade agreement purporting to increase trade, but failing to address foreign currency manipulation, could lead to a permanent unfair trade relationship that further harms the United States economy.
As the United States negotiates TPP and all future free trade agreements, we ask that you include strong and enforceable foreign currency manipulation disciplines to ensure these agreements meet the “high standards” our country, America’s companies, and America’s workers deserve.