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U.S. eyeing currency clause for NAFTA to protect against fluctuating exchange rates

A currency clause could be added to NAFTA to protect against fluctuating exchange rates.
A currency clause could be added to NAFTA to protect against fluctuating exchange rates. THE CANADIAN PRESS/Paul Chiasson

The Trump administration’s top trade officials are considering seeking a currency clause in the renegotiation of the North American Free Trade Agreement (NAFTA) that could serve as a model for future trade deals, U.S. Senator Ron Wyden said on Wednesday.

READ MORE: Donald Trump says back-to-back trade calls from Canada, Mexico ‘an amazing thing’

Speaking to reporters after a meeting between senators and U.S. Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross, Wyden said the officials made clear that addressing currency issues was an objective.

A currency clause can be added to a contract to avoid problems of payment caused by exchange rate fluctuations. Such a clause will fix an exchange rate for a given transaction covered by the contract.

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U.S. President Donald Trump has talked tough on trade deals, walking away from the Trans-Pacific Partnership (TPP) and calling NAFTA the “worst trade deal maybe ever signed anywhere.”

An official announcement regarding NAFTA renegotiations could come as soon as next week, triggering talks by late August.

— Reporting by David Lawder Editing by W Simon. With files from Global News.