— Reuters picWASHINGTON, July 18 — The US Trade Representative’s office said yesterday it is seeking a provision to deter currency manipulation as part of its renegotiation of the North American Free trade agreement, a move that would set a precedent in a US trade deal. In a much-anticipated document sent to lawmakers ahead of talks expected next month, U.S. Trade Representative Robert Lighthizer said the Trump administration aimed to reduce the U.S. trade deficit by improving access for U.S. goods exported to Canada and Mexico, the two countries in NAFTA besides the United States. In a letter to lawmakers setting out negotiating objectives, USTR Robert Lighthizer said that the pact should, “through an appropriate mechanism, ensure that the Nafta countries avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage.”

Neither Canada or Mexico is currently on a US Treasury a “watch list” for possible currency manipulation. READ MORE: NAFTA and the US - An explainer

While Canada and Mexico are not considered currency manipulators, the reference in the list of objectives could set a template for future trade deals such as a pending negotiation to modify a five-year-old US-South Korea free trade deal. NAFTA has quadrupled trade among the three countries, surpassing US$1 trillion in 2015, but the U.S. trade deficit with Mexico exceeded US$63 billion last year.
Robert Lighthizer sends a document to U.S. lawmakers outlining the Trump Administration's priorities for renegotiating NAFTA, including lower trade deficits and efforts to deter currency manipulation.