Peters Presses New Fed Chair Janet Yellen on Japanese Currency Manipulation02/11/14
Washington – Today, during a U.S. House Financial Services Committee hearing, U.S. Representative Gary Peters questioned new Federal Reserve Chair Janet Yellen on how Japan’s currency manipulation has affected the U.S. economy and what impact Japan’s actions are having on ongoing trade negotiations. Peters has expressed serious concerns with the Trans-Pacific Partnership (TPP) negotiations that could open U.S. markets without requiring fair trade practices from Japan.
Peters asked: “Chair Yellen, first I would like to congratulate you on your historic nomination and confirmation as Fed Chair and thank you for appearing before us today. Just last week, new data came out showing that two years after the Korea-U.S. free trade agreement (KORUS) went into effect, we have a record trade deficit with Korea. In fact, our trade deficit with Korea has increased 56% since 2011 – the year before KORUS took effect. Without question, this hurts American manufacturers and American workers. Congress cannot ignore the impact of trade pacts on the middle class. I voted against KORUS, and I oppose granting fast track authority for the Trans Pacific Partnership unless it includes a strong, enforceable mechanism to address currency manipulation. I have serious concerns that Japan has been included in the TPP while maintaining the world’s most-closed auto market and having a history of currency manipulation. The yen recently hit a five year low against the dollar, and today’s Monetary Policy Report notes that the ‘dollar has appreciated sharply against the Japanese yen since October.’ It is estimated that the recent fall in the yen puts roughly $2,000 per export vehicle into the pockets of Japan's three biggest automakers. I don’t need to tell you that every country has a right to conduct sound monetary policy, but in our increasingly interconnected global economy, monetary policy facilitating the direct manipulation of currency cannot be tolerated. While it can be argued that Japan's current ‘Abe-nomics’ policies are not direct intervention, they are unsustainable. When Japan can no longer continue these policies, we will inevitably see a reversion to direct currency interventions – the policy they've traditionally used, including as recently as late 2011.”
Click HERE to view the full questioning and to see Chair Yellen’s response.
Peters is a Member of the U.S. House Financial Services Committee and is the Co-Chair of the Congressional Auto Caucus. He opposes any TPP agreement that does not address currency manipulation or reduce or eliminate tariffs on Japanese autos without opening Japanese markets. He recently asked U.S. Treasury Secretary Lew about the AAPC’s recommendations to address currency manipulation in the TPP agreement. In July 2013, he questioned then Federal Reserve Chairman Ben Bernanke on how Japan’s currency manipulation is affecting the U.S. economy and economic recovery at a House Financial Services Committee hearing.