Currency Manipulation and the TPP

In the days since the text of the Trans Pacific Partnership was release, I and many others have been scouring the text looking for what's new? Apart from the scale of the TPP as a regional trade agreement, it doesn't appear to be the case that there's been much dramatic innovation.... with one big exception; a side agreement on currency manipulation.

Currency manipulation has become an important, polarizing, and misunderstood political issue in recent years. In Tuesday night's Fox Business News GOP Debate, for instance, Donald Trump railed against China's alleged manipulation of the Yuan and celebrated the inclusion of currency provisions in connection with the TPP. Senator Rand Paul then pointedly reminded Trump that China wasn't part of the TPP.

But how well does anyone understand what currency manipulation really is, why the issue has become a political football, or what the TPP Side Agreement actually proposes? In this post, I'll try and offer an answer or two, but along the way suggest that one of the reasons for the confusion is that the definition of currency manipulation (for political purposes, especially) is in the eye of the beholder.

Ken Taylor, 1934-2015

The Academy Award winning film "Argo" was on television the other night and I was again reminded of the drama that unfolded in the aftermath of the Iranian Revolution and the hostage crisis at the U.S. Embassy in Tehran in the 444 days between November 4, 1979 and January 20, 1981.

"Argo" was certainly entertaining, but it was also a disappointingly U.S.-centric tale of an elaborate ruse to smuggle six American hostages out of Iran. "Argo" only makes the briefest of mentions of what is known in Canada as the "Canadian Caper." The fact is, Ken Taylor and the entire Canadian diplomatic mission in Tehran played a far riskier and important role than "Argo" gives credit for.

Ken Taylor died October 15.

Elephants vs. Donkeys in 2016 May be a Lopsided Affair.....

There are exactly 365 Days to Election Day!!!!  Just getting warmed up, too.

When the governor's mansion in Kentucky was won by a Republican last week, many were taken by surprise. Perhaps they shouldn't have been. I began writing a post about the grim political landscape faced by Democrats in this cycle, and the disappearance of moderates in either political party. While it's certainly the case that Hillary Clinton's remarkable week of successes in the middle of October has given new life to her campaign and lifted the spirits of many Democrats around the country, that enthusiasm seems misplaced if you begin looking at races for anything other than President. While the GOP frequently looks like it's in a state of perpetual civil war, Republicans have lots of reasons to be feeling pretty good about themselves heading into next year.

TPP Text is Out, But Has it Already Been Approved?

It's out! The text of the Trans Pacific Partnership has been released. A Titanic fight over Congressional approval now begins in the heat of a presidential election campaign.

• I've linked the Full Draft text here.
• The Washington Post has a solid story on the early alignment of some of the politics. 
• The Obama Administration has also rolled out a new TPP web-site for distributing information (the Administration's view, of course) about the agreement.

I predict the TPP will be approved. In some ways approval is already baked into the process. It will be close, and put a lot of crass populism on display, but it may already be 2/3 of the way toward being approved.

As I noted in my last post on the TPP, there are a number of pressures pointing in favor of approving this deal, many of which have little to do with the economic merits of trade liberalization. Out of curiosity, I went back and looked at each of the last several Fast Track votes in Congress to see how close things have actually been. Recent votes have been nail-biters, but unless there's something in the text no one has foreseen, the TPP has basically already been approved.  Institutionally, Fast Track itself is a big piece of the puzzle. But in the case of the TPP, so do the Republican majorities behind the one piece of Obama's agenda they seem to like.