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Report Finds Currency Reform Would Create Millions of Jobs
YOUNGSTOWN, Ohio -- A report issued by the Economic Policy Institute argues that cracking down on countries that artificially devalue their currency could lead to millions of new jobs in the United States within three years.
U.S. Sen. Sherrod Brown, D-Ohio, used the new report as a basis for a conference call with reporters Wednesday as he urged support for his legislation that would treat currency manipulation as a violation of U.S. trade law.
"A quarter million Ohio jobs could be created if we can eliminate currency manipulation by next year," the senator said. The report found that should foreign currency reform become trade law, it could lead to the creation of between 2.3 million and 5.8 million jobs in the United States within three years.
For Ohio, some 75,000 of the new jobs created would be in manufacturing, Brown notes, while the state's gross domestic product would increase by $17 billion, improving municipal government coffers up to $3.7 billion. Such measures would also result in Ohio's unemployment rate dropping by 3%.
Brown released Ohio county-by-county data that shows how American jobs have been lost to overseas competition between 2005 and 2012. The findings are based on the number of recipients of the federal Trade Adjustment Assistance program.
Trumbull County, for example, recorded the second-highest number of jobs lost in the state with 5,952. Mahoning County fared much better, with just 326 lost jobs, and Columbiana County saw 511 applicants receive TAA benefits.
"It's the most important policy change for U.S. workers," Brown says, citing the report's findings.
Brown's legislation, The Currency Exchange Rate Oversight Reform Act, would treat currency manipulation as an unfair subsidy. He and other members of Congress say that countries such as China, Japan, Singapore and Malaysia artificially reduce the value of their currencies in order to lower the costs of products being shipped and sold to the United States.
This, Brown says, creates an unfair trade advantage for these importers and undercuts American manufacturers producing the same products for sale in this country.
Under Brown's bill, countries found to be artificially devaluing their currency could face trade penalties and sanctions.
Joining Brown on the call were U.S. Rep. Sander Levin of Michigan, D-9, and the report's author, Robert Scott.
Scott says that ending currency manipulation would reduce the U.S. trade deficit by $200 billion to $500 billion a year within three years and increase the U.S. GDP between $288 billion and $720 billion a year.
"It would create jobs in every state in the country," he says.
Sen. Levin says that the report demonstrates the major impact currency manipulation has on businesses and their workers. "When we negotiate these trade agreements, there has to be a provision related to currency manipulation," he says.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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