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Treasury chief calls for currency provision in trade deal with Japan

WASHINGTON — U.S. Treasury Secretary Steven Mnuchin on Saturday called for the inclusion of a provision to prevent competitive currency devaluations into a trade agreement with Japan.

 

Speaking to reporters before the two governments start bilateral trade negotiations Monday, Mnuchin said he expects Tokyo and Washington to look into a “broad agenda” in reflection of their “broad economic relationship.”

 

Mnuchin said the United States has “good ongoing discussions with Japan on currency,” and that Washington wants to ensure there is transparency and that countries do not manipulate their currency for the purpose of competitive advantage.

 

“We want to make sure whatever trade agreements there are, that there are currency provisions that reflect that in the agreement, similar to” the revised North America Free Trade Agreement involving Canada and Mexico, as well as a trade deal under negotiation between the United States and China, he said.

 

However, Japanese officials have said they have no plans to include a currency provision in a Japan-U.S. trade deal, partly because such a move could affect monetary policy run by the Bank of Japan.

 

Speaking on the sidelines of spring meetings of the World Bank and the International Monetary Fund, Mnuchin indicated the United States is unlikely to push Japan for export restraint on automobiles by setting quotas.

 

“It’s not my understanding that there have been any quota demands that have been made or have been decided, or anything else,” he said. “I have not heard of any such demands going into this.”

 

In the first round of trade talks, to be held Monday and Tuesday in Washington, Japan’s economic revitalization minister Toshimitsu Motegi and U.S. Trade Representative Robert Lighthizer are expected to discuss the scope of their future negotiations, rather than focus on specifics.

 

While the United States is calling for a comprehensive pact that would cover a range of areas such as goods, services, investment and currency, Japan is insisting the two governments aim for a trade agreement on goods only.

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