We would agree with Mr. O'Reilly that this is an area that merits caution. Beyond that, we are not inclined to offer an opinion here, just some further background.
In the Current Bill. The bolding of that phrase is less whimsical than usual. If and when a Trade Promotion Authority bill gets voted on and sent to the President, it may not be the same bill that
Senator Baucus (D-MT),
Senator Hatch (R-UT), and
Representative Camp (R-MI) introduced on January 9. Consider the following:
Senator Max Baucus is no longer chairman of the Senate Finance Committee. This afternoon, by a vote of 96 to 0, his Senate colleagues unanimously approved his nomination as the next U.S. Ambassador to China. (
Congratulations, Mr. Ambassador!)
His successor as Finance Committee chairman will be named soon. We assume this will be Senator
Ron Wyden, a Democrat from Oregon. There is a strong argument for keeping the current bill as is, but Senator Wyden may wish to put his own stamp on it, and there will be many urging him to do so.
In addition, the Ranking Member of the House Ways and Means Committee, Representative
Sander Levin, said on January 9 that he would be introducing his own TPA bill. When he does, it too will become a factor in the fast track debate.
And there will be ample time for all of this to play out because, among other things, the Senate Majority Leader, Senator
Harry Reid (D-NV) has indicated he has no interest in a fast track vote in the near term. With all of those caveats, here is the currency language in the current TPA legislation.
From S.1900 and H.R. 3830
Currency. - The principal negotiating objective of the United States with respect to currency practices is that parties to a trade agreement with the United States avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other parties to the agreement, such as through cooperative mechanisms, enforceable rules, reporting, monitoring, transparency, or other means, as appropriate.
Finally, we'll conclude today's TTALK with two other conversational fragments. Mr. O'Reilly's comments suggest a wide range of things that might be considered currency manipulation. The January 16 exchange between Senator
Robert Menendez (D-NJ) and Mr.
David M. Cote, chairman and CEO of Honeywell International, suggested there are a range of views on just how important it is. This was at the Finance Committee's TPA hearing.
Senator Menendez prefaced his question by citing a recent policy brief on currency manipulation from the Peterson Institute for International Economics. The paper, written by the founder of the Institute,
C. Fred Bergsten, argues for new disciplines in trade agreements and includes the estimate that:
"[T]he U.S. current account deficit has averaged $200 billion to $500 billion per year higher as a result of the manipulation (by all countries, not just those prospectively involved in the TPP.) This translates into a loss of between one and five million US jobs within the environment of continuing high unemployment and shortage of alternative policy instruments to remedy the problem."
As Senator Menendez reads the situation, "Currency manipulation has an impact as great as any provision in the trade bill." And so he asked the panel:
"Wouldn't any true, high standards, 21st Century agreement have to include some type of binding provision on currency manipulation to ensure that benefits from trade that should accrue to the United States are not undermined by a country's effort to artificially weaken its currency?"
In response,
Larry Cohen, the president of the Communications Workers of America, agreed.
Mr. Cote of Honeywell, however,
demurred. Mr. Cote said: "I'm all in favor of a level playing field, in general on everything, because I really do believe that with market access and a level playing field, American companies do a very good job at winning.
"That said, ... while I have to be conscious of currency as I mentioned earlier, [regarding] currency manipulation..., I would be hard pressed to point to a decision I've made or any results in the company that have been impacted by it. So it's not even on my top ten worry list."
To be continued ...
