Dear Secretary Geithner and Ambassador Kirk:
As the United States continues to pursue new free trade agreements, it will be critical to address with equal vigor the trade-distorting effects of both tariff and non-tariff measures. Currency manipulation to gain an unfair competitive advantage is among the most trade-distorting practices utilized today as some countries seek to support their exports and curb imports through the deliberate and willful weakening of their currencies. To this end, we strongly recommend that the United States government pursue, as a leading priority, inclusion of strong currency disciplines in all future U.S. free trade agreements, including the Trans-Pacific Partnership (TPP) agreement.
Currency is the medium in which trade occurs, and exchange rates can be as important a determinant of trade outcomes as the qualities of the goods or services themselves. In the context of a free trade agreement, currency manipulation can negate the trade liberalizing effects of tariff
It is already settled U.S. policy to oppose the competitive devaluation of currency to promote exports and employment. At a recent G-20 meeting, the United States sought a commitment from other governments “to refrain from exchange rate policies designed to achieve competitive advantage by either weakening their currency or preventing appreciation of an undervalued currency.”