(What's Left of) the Economy, currency manipulation, easing, fast track, G20, Jack Lew, Michael Froman, monetary policy, Obama, TPA, TPP, Trade, Trade Promotion Authority, Trans-Pacific Partnership, Treasury Department, U.S. Trade Representative
If President Obama’s request for fast track trade negotiating authority and his proposed Trans-Pacific Partnership (TPP) trade deals are indeed in trouble in Congress over currency manipulation, he should blame his own administration’s deserved lack of credibility on this critical issue. In recent weeks, overwhelming evidence for two major falsehoods has emerged.
First, Treasury Secretary Jack Lew recently stated that the administration is “working with [Congress] to figure out if there is something that can be accomplished in the context of our trade agreements that is consistent with our overall strategy of bilateral and multilateral engagement.” Yet the president himself reportedly told a January gathering of House Democrats that “adding currency rules into the TPP would be too complicated and could sink the talks, which are nearing completion.”
Second, the Treasury’s own role in handling currency manipulation seems to have been badly misrepresented. U.S. Trade Representative Michael Froman has often told Congress – and most recently in late January – that Lew “had the lead in currency issues ‘at this point’ and was raising them bilaterally and in international groups such as the Group of Seven and the International Monetary Fund.”
But the Treasury Secretary had his latest chance in international groups and clearly punted. Despite Lew’s participation, last week’s meeting of G20 finance ministers and central bank chiefs in Turkey wound up issuing a communique that repeated a pledge to “stick to our previous exchange rate commitments and will resist protectionism” but that also strongly endorsed the kinds of recent monetary easing policies that inevitably have depreciated currencies.
In fact, on the eve of the G20 meeting, a “senior Treasury official” told the Financial Times that “The fact that the European Central Bank, and others around the world, have moved aggressively to loosen monetary policy was broadly positive, even if it helped fuel renewed concerns over “’currency misalignments.’”
Before another step is taken by any U.S. official or legislator on trade deals or trade promotion authority, these glaring inconsistencies need to be cleared up – under oath. If they’re not, some formal perjury investigations should be able to get the job done.