Stabenow, Peters Call on Administration to Support Strong Currency Language in U.S. –South Korea Free Trade Agreement

U.S. Senators Debbie Stabenow and Gary Peters today called on the Administration to support strong enforceable currency provisions in the U.S.-South Korea Free Trade Agreement (KORUS) negotiations, and to provide them with the details of what was included as part of the final deal reached last March.  The Senators’ letter follows updates to the KORUS agreement that were sent to Congress earlier this week but did not include any information about the currency language.

“We remain concerned about South Korea’s history of intervening in its currency markets and its recent actions. These concerns were acknowledged by Ambassador Lighthizer during testimony to the Senate Finance Committee in March of this year,” wrote the lawmakers. “In addition, in April, the U.S. Department of Treasury included South Korea on its monitoring list for additional scrutiny in its foreign exchange report because it continues to engage in concerning interventions in its currency markets.”

“The President vowed to take an aggressive approach on currency issues,” the lawmakers continued. “You both have reiterated your support for negotiating enforceable currency measures as part of U.S. free trade agreements. American workers continue to suffer when foreign competitors manipulate their currency to gain a competitive advantage.

The full text of the letter may be found below.

September 7, 2018

Dear Secretary Mnuchin and Ambassador Lighthizer:

We are writing to reiterate our strong support for enforceable currency measures to be a priority for this Administration and to request additional information about currency-related language within the U.S.-South Korea Free Trade Agreement (KORUS) negotiations. An agreement that would prevent currency manipulation and includes strong enforcement mechanisms would send a strong message to countries that have manipulated their currencies, and would serve as a positive step toward the inclusion of similar measures in future trade agreements.

In March, the United States announced updates to KORUS, and on Monday, September 3 those amendments were transmitted to Congress. What was not included was any language or update related to the currency agreement that was also announced as part of the final deal reached in March. Specifically, at that time, the White House issued a statement reporting that “the Treasury Department is finalizing an understanding with South Korea to avoid practices that provide an unfair competitive advantage” and that “[t]he provisions of the understanding include strong commitments on exchange rate practices, robust transparency and reporting, and a mechanism for accountability.”

We request that you confirm the existence of this understanding, provide an estimated date on when Congress can expect to see agreed text reflecting the understanding, and an overview of the “mechanism for accountability” it contains.

We remain concerned about South Korea’s history of intervening in its currency markets and its recent actions. These concerns were acknowledged by Ambassador Lighthizer during testimony to the Senate Finance Committee in March of this year. In addition, in April, the U.S. Department of Treasury included South Korea on its monitoring list for additional scrutiny in its foreign exchange report because it continues to engage in concerning interventions in its currency markets.

The President vowed to take an aggressive approach on currency issues. You both have reiterated your support for negotiating enforceable currency measures as part of U.S. free trade agreements. American workers continue to suffer when foreign competitors manipulate their currency to gain a competitive advantage.

Thank you for your consideration of our requests for information. We look forward to continuing to work with you on this important issue.