The U.S. could create from 620,000 to 1.3 million manufacturing jobs by eliminating currency manipulation and taking a series of coordinated policy steps, according to a new report from the Economic Policy Institute.

The EPI report called currency manipulation “one of the most important causes of growing U.S. trade deficits, and of unemployment and slow economic growth in the United States and Europe.” It charges that currency manipulation “distorts international trade flows by artificially lowering the cost of U.S. imports and raising the cost of U.S. exports.”

According to the report, the U.S. could reduce its trade deficit by $190 billion to $400 billion over three years by ending currency manipulation. This action would reduce the national unemployment rate by between 1.0 and 2.1%. It would create between 2.2 and 4.7 million jobs overall and shrink the federal deficit by between $78.8 billion and $165.8 billion, the report claims.

From January through November of 2012, the U.S. trade deficit in manufactured goods was $633.76 billion. The overall trade gap in November was $48.7 billion.

“This report shows that Congress is obsessed with the wrong deficit,” said Scott Paul, president of the Alliance for American Manufacturing. “To grow jobs and boost the economy, we must eliminate the trade deficit. Ending currency manipulation will get us part of the way there, but we also need a smart manufacturing policy, one that focuses on innovation, public investment, skills, and trade enforcement.”