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New Task Force on China Trade Expected to be Announced Soon by White House

Friday, January 13, 2012
Sandler, Travis & Rosenberg Trade Report

Press reports indicate that President Obama is likely to announce as soon as his State of the Union address this month the creation of a new interagency task force primarily designed to enforce trade rules with respect to China. The task force will reportedly be headed by Deputy National Security Advisor for International Economic Affairs Mike Froman, and participants are expected to include the departments of Commerce, Energy and the Treasury as well as the Office of the U.S. Trade Representative. While The Wall Street Journal states that details are “still being worked out,” an Inside US Trade article states that only options that comply with World Trade Organization rules will be considered. The article notes that possible measures include a new WTO case against the value of China’s currency, despite the fact that the administration has consistently refused to name China a currency manipulator, or the self-initiation of new antidumping and/or countervailing duty proceedings by the Commerce Department, although the latter appears to have precluded by a recent appeals court decision.

Whether the forthcoming task force is anything more than election year politicking or will yield any kind of substantive change to U.S. policy on trade with China remains to be seen. In a Jan. 11 blog post published by the journal Foreign Policy, former U.S. trade official Clyde Prestowitz drew a parallel between the new China task force and a similar group targeting unfair trade practices that he led in the mid-1980s. Then, as now, the U.S. economy was struggling with persistent unemployment and foreign competition as national elections loomed. Prestowitz said that his panel identified European Union subsidies to Airbus as a “a beautiful target” for enforcement action but that this idea was summarily dismissed due to national security concerns, specifically the need to maintain cohesion with European allies against the Soviet Union. Given Washington’s current need for Beijing’s cooperation on a number of national security concerns around the world, he concluded, a similar outcome this time may be foreseen.

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