| 来源类型 | Journal Publication
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| 规范类型 | 其他
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| Currency manipulation provisions do not belong in trade agreements |
| Phillip Swagel
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| 发表日期 | 2015-05-12
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| 出版年 | 2015
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| 语种 | 英语
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| 摘要 |
Abstract: Demands for provisions to stop currency manipulation by foreign governments have become central to the congressional debate over proposed trade agreements, including the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership, under negotiation with our economic partners in Asia and Europe. Such provisions would require the U.S. to take action against countries that intervene in currency markets to keep their own currencies weak to obtain a trade advantage. Those calling for action against manipulators argue that the practice leads to a wider U.S. trade deficit, which in turn costs U.S. jobs. This assertion is not correct. Read why the idea of including currency manipulation provisions in trade agreements is misguided.
Introduction:
Demands for provisions to stop currency manipulation by foreign governments have become central to the congressional debate over proposed trade agreements, including the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership, under negotiation with our economic partners in Asia and Europe. Such provisions would require the U.S. to take action against countries that intervene in currency markets to keep their own currencies weak to obtain a trade advantage. Those calling for action against manipulators argue that the practice leads to a wider U.S. trade deficit, which in turn costs U.S. jobs. This assertion is not correct. Other countries do intervene, but this has a variety of effects on the U.S., many of them good. It is true that some firms and workers are hurt, but overall consumer spending and business investment rise and the cost to taxpayers for paying government debt is reduced. Indeed, the most important factors in affecting the U.S. trade balance, job creation and economic growth are to be found here, in the U.S. The idea of including currency manipulation provisions in trade agreements is misguided.
When we have a strong U.S. economy, it is not surprising that the dollar is strong, and likewise that the Yen is weak when the Japanese economy is weak. With a strong U.S. economy, we tend to import a lot and have a large trade deficit — but this is a sign of strength, because it is what happens when we are creating jobs and when the incomes of American families are rising. One way to reduce our trade deficit and have a weak dollar is to have a severe recession. We saw that just after the financial crisis in 2009, and it’s hard to say that was a great period for the U.S. economy. A weak dollar is good for some people — and the idea of adding anti-manipulation provisions in trade agreements is the brainchild of the people who would benefit. That is fine; in our democracy, that is the way advocacy works. But adding these provisions would harm our nation as a whole.
I understand the political appeal of legislation that seems to hit at countries that intervene in currency markets. This feels like we are taking a stand against an unfair trade practice. But in reality, it hurts more than it helps. Currency manipulation is not a trade issue but a macroeconomic one. And while foreign competition has some negative effects on some Americans, on the whole, we gain a lot from trade and financial flows. This includes the sale of our Treasury bonds to foreigners; after all, we have to sell an awful lot of bonds to fund our government. So, the basic premise behind the currency manipulation provisions in trade agreements is faulty.
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| 主题 | Economics
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| 标签 | currency manipulation
; Trade policy
; Trade Promotion Authority
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| URL | https://www.aei.org/research-products/journal-publication/currency-manipulation-provisions-do-not-belong-in-trade-agreements/
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| 来源智库 | American Enterprise Institute (United States)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/209110
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推荐引用方式
GB/T 7714 |
Phillip Swagel. Currency manipulation provisions do not belong in trade agreements. 2015.
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