The Troubles of TPP

August 26, 2015 – By #South Dakota Farmer UnionWhat’s that old cliche? “Fool me once shame on you, fool me twice shame on…me.” Or maybe it’s “the definition of insanity is doing the same thing over and over expecting different results.” Regardless of which saying you prefer, the message remains the same.

In life, we must learn from our mistakes. This lesson seems to be lost on those in our nation’s capital pushing for the passage of the Trans Pacific Partnership (TPP). Throughout the debate on the Trade Promotion Authority (TPA) legislation, groups like South Dakota Farmers Union urged members of Congress to consider the serious ramifications of currency manipulation in potential trade agreements like TPP. Specifically, SDFU and other groups strongly advocated for the inclusion of provisions within TPA legislation that would prohibit the practice of currency manipulation.

Unfortunately, TPA passed both houses without such a provision. So how does a country manipulate its currency? Economist Fred Bergsten states that currency manipulation “occurs when countries sell their own currencies in the foreign exchange markets, usually against dollars, to keep their exchange rates weak and the dollar strong.” In laymen’s terms, countries devalue their currency to make their exports cheaper to sell and foreign imports more expensive to buy.

While the concept is somewhat complex, it is by no means new in regard to international trade. It has been noted that over 20 countries have engaged in currency manipulation over the past decade. Previous manipulation transgressions have cost the U.S. several million jobs and have contributed to the roughly $500 billion trade deficit. Yet here we are as of August 25, 2015 engaged in the TPP “free” trade negotiations. These negotiations include certain countries accused of currency manipulation as recently as last week. Not to mention that both Canada and Mexico have been included in the potential agreement despite the fact that both countries our threatening the U.S. with $3.8 billion dollars in unjustified and unfounded retaliation over the consumer friendly and rancher approved country of origin labeling law.

So despite these most recent events and transgressions, and despite the historical failures of previous trade agreements, it seems unlikely that the necessary steps will be taken to protect the American economy and more importantly the American people. Remember, “if you lie with the dogs you’ll wake up with fleas.”

---

Last Modified: 08/26/2015 2:43:55 pm MDT