Tuesday September 15, 04:03 AM
Obama warns China he will stick up for trade rules
By Stephen Collinson
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WASHINGTON (AFP) - President Barack Obama warned Monday he would fight tenaciously for America's trade rights, after a row over US tariffs on Chinese tires threatened to sour the mood ahead of next week's G20 summit.
But the president dismissed fears of a trade war and aides rejected the idea that the spat, over US duties of 35 percent on Chinese tire imports, could harm wider diplomatic relations that both sides appear keen to improve.
As China complained to the World Trade Organization in Geneva about the decision, Obama rejected arguments that his move amounted to blatant protectionism, during a key economic speech in New York.
"Make no mistake, this administration is committed to pursuing expanded trade and new trade agreements," Obama said at historic Federal Hall on Wall Street.
"It is absolutely essential to our economic future."
"But no trading system will work if we fail to enforce our trade agreements, those that have already been signed.
"So when, as happened this weekend, we invoke provisions of existing agreements, we do so not to be provocative or to promote self-defeating protectionism, we do so because enforcing trade agreements is part and parcel of maintaining an open and free trading system."
Obama slapped the duties on imports of tires for cars and light trucks for a period of three years on Friday, amid warnings that a surge in the Chinese-made goods had cost 5,000 American jobs.
Later Monday, in an interview with Bloomberg Television, Obama insisted that the row would not escalate out of control.
"We're not going to see a trade war. I think that there are some tensions around this, no doubt about it. But my message is very simple: We have rules on the books."
The president meanwhile told CNBC that he was "not surprised" China was upset, but pointed out that Washington had a "huge economic relationship with China" and a "strong strategic relationship."
White House spokesman Robert Gibbs also attempted to scotch the idea that the dispute could harm wider Sino (Xetra: 576550 - news) -US relations, which Obama and his foreign policy team have conspicuously sought to cultivate.
"I'd point out that we have strong relationships throughout the world where you time to time have disagreements about trade actions," said Gibbs aboard Air Force One.
"It's nothing new with Europe. It's nothing new with other countries.
"I don't see (that) a dispute like this will cause something that causes countries like the United States and China to get off track in things that are very important in terms of global matters."
Obama is due to host Chinese President Hu Jintao, among other leaders of the world's most powerful developed and developing nations, at next week's G20 summit in Pittsburgh, Pennsylvania.
He is also due to travel to China on an official visit in November.
Washington has praised China for its efforts to deal with North Korea's nuclear challenge, and also sees Beijing, one of five veto-wielding permanent members of the UN Security Council, as a key player on the Iranian nuclear showdown.
Analysts warned Monday that the tire dispute may be just the first instance of inevitable trade frictions between the Obama administration and China.
One effect of the dispute emerging ahead of the summit, however, is that it addresses a thorny political problem for Obama as he welcomes world leaders to Pittsburgh, a deprived industrial city in the recession-starved US heartland.
China, by appealing to the WTO may also be to some extent seeking to ensure the issue does not emerge as a major impediment to Sino-US relations at the summit.
"It's either an indication that they believe they will prevail at the WTO or a very strong effort to take the subject off the table for the G20," said Russell Leigh Moses, a Beijing-based political analyst.
"It's in some ways a brilliant move because it takes it away from the G20 and... has the added benefit of steering both leaders away from embarrassment on the eve of the G20."
In its complaint to the WTO, China accused Washington of breaking world trade rules.
"The United States has adopted protective measures against Chinese tires shipped to the United States," said Chinese commerce ministry spokesman Yao Jian.
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