Published On: Sun, Oct 14th, 2018

Mnuchin says U.S. will seek currency provision in trade deal with Japan, others

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NUSA DUA, Indonesia (Reuters) – U.S. Treasury Secretary Steven Mnuchin said on Saturday Washington would like to include a provision to deter currency manipulation in future trade deals, including with Japan.

United States Secretary of the Treasury Steven Mnuchin speaks during an interview with Reuters at the International Monetary Fund – World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. REUTERS/Johannes P. Christo

The remark drew concern in Japan, where local media ran front-page stories in a sign of attention on whether Washington could criticize as currency manipulation any future attempts by Tokyo to keep sharp yen rises in check.

Mnuchin told reporters the United States would like to incorporate, in future trade agreements, a provision it applied to the renegotiation of NAFTA that deters members from currency manipulation.

“Our objective would be that the currency issues … We’d like to include (them) in future trade agreements. With everybody. I’m not singling out Japan on that,” Mnuchin said on Saturday, when asked whether the United States will discuss currencies in trade negotiations with Japan.

“We haven’t had specific conversations on that. We obviously continually have conversations with my counterparts about currency. But that is the model we’d like to incorporate going forward,” he said on the sidelines of the annual International Monetary Fund and World Bank meetings in Indonesia.

Japan’s Economy Minister Toshimitsu Motegi, who oversees trade talks with the United States, said on Sunday he had so far made no discussions on currencies with his counterpart, U.S. Trade Representative Robert Lighthizer.

“If discussions on this subject become necessary, they will be made by the finance ministers of both countries,” Motegi said in a television program, in response to Mnuchin’s remark.

Mnuchin has also taken a swipe at China for recent declines in the yuan, a sign Washington could make currency a central part of future trade negotiations.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed in September to start trade talks in an arrangement that, for now, protects Japanese automakers from further tariffs.

Along with fears of being slapped with higher tariffs on auto exports, Japan worries about having its hands tied on addressing sharp yen rises that hurt its export-reliant economy.

Trump in the past has criticized the Bank of Japan’s ultra-easy monetary policy, saying it was aimed at weakening the yen, a claim the central bank dismisses.

Additional reporting by Kazuhiko Tamaki in Tokyo; Editing by Muralikumar Anantharaman

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