- Mar 17, 2010
Report: Detroit automakers head to Congress to talk Japanese, Korean currency manipulation
We can't even pretend to know the first thing about currency manipulation, so we won't bother trying to explain how artificially depreciated currency can help imports into the U.S. market. But American manufacturing groups have long accused the governments of China, Japan and South Korea of manipulating their currency to gain an bigger foothold in the U.S. market, and domestic automakers say Japan and South Korea in particular have been artificially depreciating their currency for years. Earlier this month, The American Automotive Policy Council, which represents General Motors, Ford and Chrysler, met with Obama Administration auto task force head Ron Bloom about the manipulation of the Japanese yen and Korean won, and now the AAPC is talking with members of Congress.
A report from The Detroit News shows that Japan added $56 billion to a "currency interventions fund" last week – a fund that apparently has a substantial cash reserve. Further, Japanese Finance Minister Naoto Kan told the Japanese Diet that his government is ready to manipulate currency by depreciating the yen. The AAPC claims that the actions of the Japanese and Korean governments put American manufacturing jobs at risk, adding:
"American auto companies will consider intervention in foreign exchange rate markets by the Japanese government that weakens the yen as unfair competition directed at the American automotive market and American workers as the industry begins to recover from the economic recession."
The DetNews claims representatives from the Japanese government were not available to comment on the group's claims. For its part, AAPC says that the goal of meeting with Congress is action:
"we urge you to make clear to the governments of Japan and Korea that the U.S. Congress considers such interventions unacceptable and that any decision to proceed with or continue such interventionist policies will be strongly and directly challenged by the United States in defense of fairness and American jobs."
Another area of concern for the AAPC is what they allege is the inherently closed nature of Asian auto markets. The Organization for Economic Co-Operation and Development claims that the two countries are currently the most closed out of the 30 markets with auto industries. The ECOD also notes that domestic automakers in those countries account for 95.5 percent of all auto sales.
[Source: The Detroit News]