‘US violates spirit of WTO’
4 Oct, 2011 21:21
China has slammed a US Senate debate on ways to punish Beijing for undervaluing its currency and taking away American jobs. China says that the US should abandon protectionism and stop politicizing economic issues.
The proposed bill would allow the government to impose duties on products from countries with specific currencies. China says a trade war could come to a head between the two largest economies should that bill become law. China says the US move "seriously violates the rules of the World Trade Organization and obstructs China-US trade ties." But George Koo, a founder of International Strategic Alliances, a company that develops co-operation between international firms, believes there is no violation of the rules at this point.Koo believes that violation of WTO rules would actually take place only if certain sanctions are put in place following the Senate debate. “So, until that has taken place, it may be a violation of the spirit of the WTO at this point.”He added that there will not be any specific retaliatory action from China following its angry rhetoric unless the US actually turns the Senate resolution into some real sanctions, which is not likely as the US has other motives for the debate.“I think they are seeking to gain political capital by making such a move, and attempting to distract the American public from the real issues of solving the debt crisis, balancing the budget, and strengthening the dollar,” he said.Edward Harrison, a founder of Credit Writedowns news and opinion website dedicated to finance and foreign policy, believes that the US is just threatening to take measures and is not really going to take any.“Clearly the Obama administration does not want to go that far,” he said. “They really would like to have this resolved amicably. And so the legislation itself may have a lot further to go before we see any sort of reaction.”Harrison believes that the reason the topic has been brought up now is to show that the Obama administration and the Fed believe they have done enough in order to create a self-sustained recovery, which is why they need to manufacture reasons why the recovery has stalled.“And therefore the problem must be elsewhere,” he explained. ”The problem must be in Europe, it must be in China, elsewhere. It is not because our policies have failed per se.”