A Positive Step in the USMCA: Countering Currency Manipulation



C. Fred Bergsten | Peterson Institute for International Economics

President Donald Trump touts the historic nature of his new trade agreement with Mexico and Canada (USMCA). He is correct in one respect: It is the first trade agreement in history to directly address an issue that has aroused opposition to such agreements in the past—currency manipulation by trading partners. The United States has long sought to deter manipulation of the foreign exchange markets by partner countries seeking to gain trade advantages. The practice has triggered political backlash against trade agreements and against globalization more broadly.

The currency chapter in the USMCA is unlikely to affect Mexico or Canada, as neither has been a currency manipulator and both run global current account deficits in any event. But it could become an important template for later deals with other countries…

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