The Mar-a-Lago Accord is a modern take on the 1985 Plaza Accord, with a focus on devaluing the US dollar to revive manufacturing, increase exports, and manage fiscal debt.
Key Elements of the Mar-a-Lago Accord:
- Security & Market Access: The US offers military protection & trade benefits to G7, Middle East, and Latin America.
- Coordinated Dollar Depreciation: Partner nations intervene in currency markets to weaken the US dollar and boost US manufacturing competitiveness.
- Debt Management via Century Bonds: Existing US government debt would be swapped for ultra-long-term Treasury bonds (100-year maturity), reducing short-term fiscal pressure.
Comparison with the Plaza Accord (1985):
- The Plaza Accord was a coordinated intervention by the US, Japan, West Germany, France, and the UK to devalue the dollar and correct trade imbalances.
- Outcome: It helped US exporters, but also led to Japan’s asset bubble, which later collapsed in the 1990s.
(Source: Indian Express)
