President Barack Obama has served notice that the US is fed up with China’s trade and currency practices, turning up the heat on America’s biggest economic rival.
“Enough’s enough,” Obama said bluntly at a closing news conference of the Asia-Pacific Economic Cooperation (Apec) summit on Sunday, where he scored a significant breakthrough in his push to create a pan-Pacific free trade zone and promote green technologies.
Using some of his toughest language yet against China, Obama, a day after face-to-face talks with President Hu Jintao, demanded that China stop “gaming” the international system and create a level playing field for US and other foreign businesses.
“We’re going to continue to be firm that China operate by the same rules as everyone else,” Obama told reporters after hosting the 21-nation Apec summit in his native Honolulu. “We don’t want them taking advantage of the United States.”
China shot back that it refused to abide by international economic rules that it had no part in writing.
“First we have to know whose rules we are talking about,” Pang Sen, a deputy director-general at China’s Foreign Ministry said.
“If the rules are made collectively through agreement and China is a part of it, then China will abide by them. If rules are decided by one or even several countries, China does not have the obligation to abide by that.”
Free trade zone ‘absolutely critical’
Obama declared US engagement in the Asia-Pacific region as “absolutely critical” to America’s prosperity. By harnessing the potential for expanded trade with the world’s fastest-growing region, Obama hopes he can create US jobs to help him through a tough reelection fight in 2012.
Obama’s drive toward a pan-Pacific free trade zone — the signature US achievement of the summit — got a boost when Canada, Mexico and Japan said they were interested in joining talks now under way among nine countries, and they agreed to complete the detailed framework in 2012.
The Philippines was discussing the matter, US officials said.
The Trans-Pacific Partnership adds momentum to Obama’s pledge to double US exports, made more urgent by the virtual collapse of the Doha round of trade talks. A free trade zone in the region would outstrip the market size of the European Union.
Yet there was little promise of immediate economic dividends as such trade deals often take years to take effect.
Obama is seeking to assure allies of a US “pivot” as China flexes its economic and military muscles in Asia and beyond. But leaders may doubt whether Washington can avoid being distracted by economic woes at home and foreign policy priorities like Afghanistan, Pakistan and Iran.
Even as Obama issued the veiled threat of further punitive action against China, it was unclear how much of his tough rhetoric was, at least in part, political posturing aimed at economically weary US voters who will decide next November whether to give him a second term.
Obama insisted that China allow its currency to rise faster in value, saying it was being kept artificially low and was hurting American companies and jobs. He said China, which often presents itself as a developing country, is now “grown up” and should act that way in global economic affairs.
The sharp words between the US and China contrasted with the unified front that Asia-Pacific leaders sought to present with a pledge to bolster their economies and lower trade barriers in an effort to shield against the fallout from Europe’s debt crisis.
The members of Apec, which accounts for more than half of the world’s economic output, said they had agreed on ways to counter “significant downside risks” to the world economy.
That followed an appeal by Obama, seeking to reassert US leadership to counter China’s growing influence around the Pacific Rim, for a commitment to expand trade opportunities as an antidote to Europe’s fiscal woes. — Reuters