The U.S. Treasury Department has only ever named three nations to its list of currency manipulators, China, Taiwan and Korea. Future financial black magic could make a deal already disadvantageous to the American economy even worse.

Limited gains by the agricultural sector projected by the U.S. International Trade Commission (USITC), as well as projected losses by almost every other form of goods would be exacerbated by potential currency manipulation.

Reports from Public Citizen show that Korea’s currency, the won, is undervalued by up to 50 percent compared to the dollar, creating a simultaneous 50 percent export subsidy and import tariff. A further devaluation similar to what Mexico did following the ratification of NAFTA is entirely possible, and the current form of the trade agreement does nothing to prevent this.

Chapter 13 of the agreement specifically focuses on banning the regulation or restriction of any form of financial activity, whether it be buying dollars and U.S. debt to undervalue a currency, or even issuing derivatives, credit default swaps and other financial instruments that caused the market collapse in the U.S. in 2008.

The proponents of the deal also fail to consider that despite an increase in exports, the overwhelmingly larger increase in imports would widen the U.S. trade deficit and result in a loss of 159,000 jobs during the next seven years, according to the USITC.

If signed, the Korean Free Trade Agreement would be the largest since NAFTA, meaning it would do more damage to the economy than any agreement since NAFTA.

“After seeing the repeated damage to the U.S. economy with China’s accession to the World Trade Organization – and Mexico under NAFTA – of the undervaluation of currencies to gain trade advantages, why in the world would the U.S. enter into a trade agreement with another country if the agreement doesn’t have some way of disciplining currency manipulation,” Lori Wallach, director of Public Citizen’s Global Trade Watch said.

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