Obama adviser pans China currency threat by RomneyBy Matthew Pennington
WASHINGTON — Republican Mitt Romney’s plan to designate China for currency manipulation would be a huge mistake and draw retaliation from the country’s new leaders, an Obama campaign adviser said Wednesday. A Romney adviser said the U.S. shouldn’t be paralyzed by fears of a trade war.
Jeff Bader, a former top Obama aide on Asia policy, said it was “astonishing” that the Republican wanted to take the step on his first day in office, before meeting with the new guard in Beijing, which begins its own power transition two days after the Nov. 6 U.S. election.
“They will be new leaders and they will not be in a passive or submissive mood for threats and being backed into corners,” Bader said at a China policy debate with Romney campaign adviser Aaron Friedberg at John Hopkins University in Washington.
Friedberg, an international affairs professor at Princeton University, said the designation would put China on notice that the U.S. was ready to act on a range of trade violations that Obama has failed to address, including Chinese export subsidies and intellectual property theft.
He said the designation would be followed by negotiations, and if necessary, imposition of so-called countervailing duties on some products, on a sliding scale.
“China is more dependent on the United States than we are on them,” Friedberg said.
China has been a testy issue in the tightly fought election campaign as the candidates vie to show they would help U.S. workers hit by the migration of manufacturing jobs abroad. The U.S. has long accused China of undervaluing its currency to keep its products cheap, hurting U.S. exports.
Bader said the renminbi is still undervalued but has appreciated by about 30 percent since Beijing began a managed float of the currency in 2005.
The Romney adviser welcomed Obama’s increased focus on Asia but said the approach has been inconsistent and ineffective, leaving allies uncertain about U.S. staying power.
Bader and Friedberg were like-minded on many aspects of U.S. policy to the region — traditionally an area of broad agreement between Democrats and Republicans — including the need to engage China and its military. They agreed the conduct of China in handling its maritime territorial disputes in South China Sea would be a test of whether the Asian power’s rise would be peaceful or not.
“So far it has chosen to use coercion,” Friedberg said.
He said that despite reduced tensions across the Taiwan Strait, a longtime regional flashpoint, the situation remained unpredictable. He said Romney supported sales of new F-16 fighter jets that Taiwan requested. Fearing backlash from Beijing, Obama opted in 2011 only to upgrade the self-governing island’s existing fleet of F-16s.
Bader conceded that efforts to get China to pressure its ally North Korea over its nuclear program had mixed results. He said in a second term, Obama wouldn’t be afraid of direct talks with Pyongyang leading to resumption of a stalled six-nation dialogue. But it would require preconditions, including a moratorium on North Korean nuclear and missile tests, and halting uranium enrichment.
Friedberg advocated tighter financial sanctions, saying more pressure was needed before negotiations with North Korea could yield results. He likened its government to a criminal organization financed by the drug trade, counterfeiting and illicit arms sales.