WASHINGTON – The Trump administration has told senators it is considering adding rules barring currency manipulation to the North American Free Trade Agreement, according to congressional aides, a departure from past U.S. policy that could set a precedent for other trade deals.
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U.S. Trade Representative Robert Lighthizer said in a Senate meeting Wednesday that he is looking at currency rules as a part of planned renegotiation of Nafta, the 23-year-old trade agreement that connects the U.S. economy with Canada's and Mexico's, the aides said.
An administration official confirmed the U.S. is looking at some sort of currency disciplines but didn't say whether the rules would be binding and enforceable through Nafta's dispute-settlement procedures.
Canada and Mexico haven't been the focus of U.S. criticism over currency, but adding currency rules to Nafta could set a precedent for including them in future negotiations with Asian trading partners.
Currency rules weren't in a previous draft of the administration's Nafta negotiating blueprint plan reviewed by The Wall Street Journal in March.
In the last two years, critics of U.S. trade policy have generated opposition to Washington's trade agreements by saying China and other countries manipulate their currencies in ways that have a bigger effect on their export competitiveness than tariff levels set by trade deals.
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The Obama administration didn't include enforceable currency rules in the Trans-Pacific Partnership, the 12-nation deal that Congress never ratified and President Donald Trump exited in January. At the time, U.S. officials said trading partners were opposed to the rules, and some worried such guidelines, even if carefully tailored, could tie the hands of U.S. monetary policy in the future.
Instead, the TPP countries agreed to nonbinding guidelines and transparency procedures outside the agreement.
Mr. Lighthizer is set to attend a gathering of Asian leaders in coming days in Vietnam. The Trump administration is seen as unlikely to revive the TPP but could pursue bilateral talks -- including possible currency provisions -- with individual countries that were in the bloc.
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(END) Dow Jones Newswires
May 17, 2017 12:26 ET (16:26 GMT)