Obama says China ‘gaming’ world trade

He stops short of endorsing the currency bill:

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 U.S. Senate aimed at pressing Beijing to revalue the yuan.

The legislation, which calls for U.S. 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 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 U.S. economy.

“Currency manipulation is one example of it,” he said. Obama, who faces a tough bid for re-election next year, did not say whether he would sign or veto the legislation if it reached his desk. Both the Senate and the House of Representatives would have to approve the measure first. “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.

“I don’t want a situation where we’re just passing laws that are symbolic knowing that they’re probably not going to be upheld by the World Trade Organization,” he said. The authors of the bipartisan Currency Exchange Rate Oversight Reform Act insist the bill complies with WTO rules.

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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 notes that the yuan has risen 30 percent against the 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.

Supporters say that decision, which required a super-majority of 60, virtually guarantees Senate approval, but the bill faces stronger opposition in the House where it may never face a vote. Reuters