20111008 Obama accuses China of ‘gaming’ worldwide trade

Obama accuses China of ‘gaming’ worldwide trade

Reuters, Washington

US President Barack Obama accused China on Thursday of “gaming” international trade by keeping its currency weak, but was cautious about a bill before the US Senate aimed at pressing Beijing to revalue the yuan.

The legislation, which calls for US tariffs on imports from countries with deliberately undervalued currencies, will head toward a final Senate vote on Tuesday after efforts to bring action to a close faltered on Thursday.

Obama stopped short of explicitly backing the legislation and he restated concerns that any measure must comply with global trade rules.

Still, in his toughest language on China to date, the US president echoed the sponsors of the bill.

The measure, which has drawn warnings from Beijing that it could trigger a trade war, is still widely expected to pass.

“China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States,” Obama told a news conference focused on his bid to revive a weak US economy. “Currency manipulation is one example of it.”

“My main concern ... is whatever tools we put in place, let’s make sure that these are tools that can actually work, that they’re consistent with our international treaties and obligations,” Obama said.

The authors of the bipartisan currency exchange rate oversight reform act insist the bill complies with WTO rules.

Many economists say China holds down the value of its yuan currency to give its exporters an edge in global markets.

China says it is committed to gradual currency reform and says that the yuan has risen 30 percent against the US dollar since 2005.

The Senate voted 62-38 on Thursday to curtail debate and send the bill toward a final vote in that chamber, following a dispute between Republicans and Democrats over which amendments would be considered.

During his news conference, Obama touted his administration’s record on pursuing cases against China at the WTO.

He also said that he had taken great pains to stabilize ties with Beijing that have been dogged by disputes over trade, human rights and US arms sales to Taiwan.