The US and most of its main economic partners are aggressively negotiating large regional trade agreements. Taken together the Trans Pacific Partnership and the Transatlantic Trade and Investment Partnership could produce the largest trade liberalisation in history. They also aim to become templates for global trade rules for the 21st century.

The US Congress, however, has raised a challenge to the successful completion of this agenda, writing to President Barack Obama to demand that “strong and enforceable” foreign currency manipulation disciplines be included in all trade deals. The bipartisan majorities from both houses are right to make that link. Paul Volcker once noted that trade is more affected by 10 minutes of movements in exchange rates than by 10 years of trade negotiations. Allowing members of free-trade pacts to offset liberalisation through deliberately undervalued currencies can destroy the benefits of those agreements to their partners.

Both congressional letters refer to a study I wrote with Joseph Gagnon. In it we show that intervention in foreign exchange markets by 20 or so countries, to weaken their currencies and boost their trade surpluses, has been averaging almost $1tn annually and shifts at least $500bn of production from deficit to surplus countries every year. This costs the US millions of jobs, weakens the countries of Europe’s periphery and deepens the eurozone crisis. It hits Brazil, India, Mexico and other emerging markets.