…. is from the WSJ editorial today “Pacific Trade Protectionists“:
…labor unions and auto companies want the Trans-Pacific Partnership (TPP) to include a ban on “currency manipulation.” Their goal is to check Japan’s monetary easing, which has seen the yen lose about 20% of its value against the dollar over the past year, giving Toyota and other Japanese exporters an allegedly unfair advantage. More than 230 Congressmen and 60 Senators have called for a currency-manipulation clause in the TPP, including Ohio Republican and former U.S. Trade Representative Rob Portman.
But there’s a reason why past trade deals—including those negotiated by Mr. Portman—haven’t addressed currency manipulation: It can’t easily be defined. When does a central bank cross the line from prudently strengthening its foreign reserves to nefariously manipulating its currency? The yen has fallen in the last year, but only after having risen against the dollar by at least as much in recent years. And if the Bank of Japan is a manipulator for its recent quantitative easing, what does that make the Federal Reserve?