Representatives from participating countries recently wrapped up the initial round of negotiations. Specific terms are now being made public, sparking debate as officials attempt to gain support for the agreement.
“The TPP is a trade agreement with 11 countries in the Asia-Pacific, including Canada and Mexico that will eliminate over 18,000 taxes various countries put on Made-in-America products,” the Obama Administration said in a statement.
Some US automakers do not feel that simple tariff eliminations will go far enough to truly level the playing field. Echoing past sentiment, critics argue that any trade deal must include protections against currency manipulation to be effective.
“Within the U.S. Congress, there is bipartisan consensus that currency manipulation needs to be meaningfully addressed,” Ford said in a statement published by the Detroit Free Press. “This summer, U.S. lawmakers took unprecedented action to set a clear negotiating objective for addressing currency manipulation in all future trade deals. The TPP fails to meet that test.”
Ford did not provide specific examples of currency manipulation, however US automakers are believed to be particularly concerned over artificial currency devaluation in Asian countries. Hyundai and Kia early this forecast a significant slowdown in sales growth, primarily due to the ongoing backward slide of Japan’s Yen. A weak local currency potentially gives Japanese automakers a competitive edge, giving made-in-Japan cars a price advantage in the global market. Imports are also discouraged, as cars made in other countries become comparatively more expensive for Japanese buyers.
Legislators have called for independent legislation to address threats posed by currency manipulation. One proposal included an enforcement provision that would give the Commerce Department authority to implement tariffs to negate the advantage of such manipulation, though it is unclear if such a system would violate tariff-reduction terms of the TPP.
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