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 The American Automotive Policy Council, which represents Chrysler,
Ford <F.N> and General Motors <GM.N>, said participating nations
should commit to not manipulating their exchange rates to gain an
unfair competitive advantage.
U.S. automakers worry that Japanese competitors may gain an edge in
the American market, especially if existing trade restrictions are
loosened under the Trans-Pacific Partnership (TPP), which
negotiators hope to finalize in coming months.
"Even the most promising trade pacts can be undermined by currency
manipulation," Matt Blunt, president of the council, told reporters
on a conference call. "The final TPP agreement must include strong
and enforceable currency disciplines that allow markets and not
government intervention to set exchange rates."
The council's proposal would require TPP countries to be transparent
with information that includes their foreign exchange holdings and
interventions to purchase foreign assets.
If a TPP member is found breaching the currency rules, the
automakers' proposal would allow member countries to suspend the
tariff benefits of the offending country for at least a year.
The group said its proposal would not impede any TPP country from
having an independent monetary policy, and would not prevent central
banks from pursuing the bond-buying stimulus programs that have been
employed in the United States and Japan. Those programs have been
criticized from some quarters for weakening currencies.
Countries negotiating the TPP include Mexico, Chile, Canada,
Australia and Malaysia, along with Japan and the United States. A
final deal would establish a free-trade bloc stretching across a
region that makes up nearly 40 percent of the global economy and is
populated by about 800 million people.
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The new demands add further challenges to the massive trade deal
that the Obama administration had aimed to finalize before the end
of last year.
Some legislators, including Republican Senator Lindsey Graham of
South Carolina and Sander Levin, the top Democrat on the House Ways
and Means Committee, have said they would reject a TPP deal that did
not include a currency manipulation clause.
TPP negotiators failed to reach an agreement after a four-day
meeting in Singapore in December, remaining grid locked over issues
like intellectual property, agricultural tariffs and state-owned
enterprises.
The Obama administration has also sought Trade Promotion Authority
to allow it to speed up trade deals through Congress. Details of a
bill to give the White House such fast-tracking power, seen as
crucial to the success of the TPP talks, are due to be announced
later on Thursday and are also expected to include a section on
currency manipulation.
(Editing by Bernadette Baum)
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