US lawmakers seek to tackle currency cheating with trade bill

[WASHINGTON] A bipartisan group of US lawmakers will unveil legislation on Tuesday aimed at stopping trading partners from manipulating their exchange rates to gain a competitive edge amid a wider debate over using trade deals to punish currency cheats.

Democratic Senators Sherrod Brown, Debbie Stabenow and Charles Schumer will be joined by Republicans Jeff Sessions and Lindsey Graham in presenting the measure.

The legislation, which is similar to bills introduced in previous years, would treat currency undervaluation in a similar way to subsidies provided by foreign governments and allow US companies to seek compensatory duties on imported goods.

It will also set out consequences for countries that fail to adopt appropriate policies to eliminate currency misalignment, according to a joint statement from the senators.

An identical bill is planned for introduction in the House of Representatives by Democrats Sander Levin and Tim Ryan and Republicans Tim Murphy and Mo Brooks.

Many lawmakers are also keen to write rules against currency manipulation into free trade agreements such as the Trans-Pacific Partnership. The 12-nation TPP includes Japan, whose currency has depreciated about a third against the US dollar over the last three years.

But the Obama administration is wary of attaching currency provisions to trade agreements. Negotiators hope to wrap up talks on the TPP within months.

REUTERS