U.S. Senator Debbie Stabenow, along with a bipartisan group of her colleagues, today unveiled new legislation that will crack down on currency manipulation by Japan, China, and other nations. Currency manipulation costs millions of U.S. jobs and drives up the U.S. trade deficit. The Currency Exchange Rate Oversight Reform Act of 2013 counters the economic harm to American manufacturers and workers caused by currency manipulation, and creates consequences for countries that break international laws against currency manipulation.
A 2013 Economic Policy Institute study showed that addressing currency manipulation would create between 2.2 million and 4.7 million American jobs, increase the U.S. GDP by $225 billion to $473 billion, and shrink the deficit by $78 to $165 billion.
"Currency manipulation translates to lost American jobs and economic hardship for families, especially in states like Michigan," said Senator Stabenow. "Effectively addressing this problem would create American jobs and it wouldn't cost a dime. I've been fighting to stop illegal action by countries like Japan and China on currency manipulation for years, and we are finally seeing more bipartisan support to get this done. It is time to ensure that our businesses and workers are not put at a competitive disadvantage."
This bipartisan legislation to combat currency manipulation is a key provision of Stabenow's American Competitiveness Plan, a set of action steps unveiled in 2011 to ensure U.S. businesses and workers are able to compete on a level playing field and create more jobs in America. Stabenow's plan also included the creation of a trade enforcement unit to hold other countries accountable for illegal trade practices (created by President Obama through executive order in 2012), and legislation stopping the theft of American ideas and technologies.
Similar legislation to stop currency manipulation passed the Senate in 2011 with broad bipartisan support but the House failed to bring the bill up for a vote. Because a new Congress began in 2013, the bill must start the legislative process over and pass the Senate again.
In light of negotiations to include Japan in the Trans-Pacific Partnership free trade agreement, it is even more crucial that legislation is in place to crack down on currency manipulation. Japan has a long history of manipulating its currency, harming American manufacturers, especially in the auto industry. Senator Stabenow has urged that Congress and the Administration not ratify any trade deal with Japan until the country opens its markets and addresses illegal trade practices like currency manipulation.
Manufacturing has played a leading role in the nation's economic recovery, and after a decade of sharp declines, manufacturing added 504,000 jobs between February 2010 and October 2012. However, nations actively participating in illegal currency manipulation slow job growth and threaten existing manufacturing jobs. China's ongoing undervaluation of its currency continues to cause severe economic disruptions and imbalances globally and is taking a huge toll on manufacturers and workers across the United States.
The Currency Exchange Rate Oversight Reform Act of 2013 is cosponsored by Sens. Sherrod Brown, Charles Schumer, Lindsey Graham, Olympia Snowe, Jeff Sessions, Robert Casey, Richard Burr, Sheldon Whitehouse, Jack Reed, Richard Blumenthal, Kent Conrad, Kirsten Gillibrand, Bob Menendez, Kay Hagan, Joe Manchin and Ben Nelson.
The Currency Exchange Rate Oversight Reform Act would:
Lower the threshold under which a country is considered to be in violation of currency rules, and require the administration to act when a country is in violation.
Strengthen consequences for countries in violation, including:
o Forbidding the federal government from procuring goods and services from the country.
o Stopping the Overseas Private Investment Corporation (OPIC) from financing or insuring projects in the country.
o Requesting action through the World Trade Organization and the IMF.
o Imposing import duties on the countries' products.