[WASHINGTON] senators on Wednesday backed tough rules against currency manipulation by trading partners as part of a package of trade bills key to sealing a Pacific trade pact.
The rules backed would punish currency cheating with import duties, despite warnings from the US Treasury that such a move could open the door to retaliation against the United States.
A separate provision, approved unanimously by the Senate Finance Committee, opens the door to restricting government purchases from nations deemed to be manipulating their currencies or even blocking them from future trade deals.
That change is supported by the Obama administration.
The changes were approved as part of a trade enforcement bill accompanying broader legislation to fast-track trade deals through Congress without allowing lawmakers to amend them.
A committee vote on that legislation, which the White House sees as critical to concluding the 12-nation Trans-Pacific Partnership, was expected later on Wednesday.
The Senate committee also approved an extension of aid to workers who lose their jobs due to trade, which Democrats insisted move in parallel with the so-called fast track legislation, which also lets lawmakers set negotiating objectives.
Manipulating currencies to deliberately weaken them can give nations an unfair advantage in export markets because a weaker currency makes goods cheaper overseas.
The US Treasury, which issues a semi-annual currency review, has repeatedly stopped short of labeling China a currency manipulator, despite complaints from many US lawmakers and companies that the country undervalues the yuan.
The White House sees the TPP as a counterweight to China's influence in the Asia-Pacific region and has warned that the Asian giant will set the rules for trade if the United States does not move ahead with the TPP.