Senators press Obama trade chief on China concerns

WASHINGTON (Reuters) - Senators pressed President Barack Obama's top trade official on Wednesday for action on a number of Chinese trade issues they said have endangered U.S. consumers and jobs.

Senator Bill Nelson, a Florida Democrat, urged Trade Representative Ron Kirk to demand China pay for damage and health problems caused by contaminated Chinese-made drywall.

"You've got thousands of homeowners, who, through no fault of their own, are financially in a deep hole as a result of having bought a house that they now can't live in or they live in at the peril to their own health," Nelson said at a Senate Finance Committee hearing on Obama's trade agenda.

"The government in China has to be responsible because they're the ones who allowed that defective product to be exported ... We need the U.S. government slamming its fist on the table in dealing with the Chinese," Nelson said.

The U.S. Consumer Product Safety Commission is leading a team of federal and state agencies in investigating thousands of complaints about homes containing Chinese-made drywall.

Homeowners have complained of a rotten egg smell, sickness, failed appliances and corroded wires and pipes caused by the drywall. Much of it was imported to rebuild homes destroyed in Florida, Louisiana and other southern states after a series of devastating hurricanes, Nelson said.

ADMINISTRATION CRAFTING CHINA PLAN

Kirk acknowledged Nelson's concerns and in response to other questions said the Obama administration was working across several agencies to develop a "holistic approach" toward dealing with China trade.

Officials from the White House's National Economic Council and the National Security Council are working together to shape a broader approach to trade relations with China and enhance chances for making progress, he said.

"So that you don't just have USTR (United States Trade Representative) working in one silo, State Department in one silo, and Treasury. We're trying to come up with a holistic approach to address China on a number of issues," Kirk said.

He told the panel the United States and China would hold their next Strategic and Economic Dialogue meeting in early May in Beijing, although Treasury officials said later no date had been set for the annual bilateral meeting.

The U.S. side at the meeting is headed jointly by Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton. The first session was held in July in Washington, and the plan is to alternate meetings between capitals.

Kirk also heard Wyoming Republican Senator Mike Enzi's concerns about the impact of Chinese export tax rebates on his state's soda ash producers.

He urged the Obama administration to assemble a coalition of countries to challenge Beijing on the issue.

Senator Ron Wyden, an Oregon Democrat, lashed out at Beijing for "indigenous innovation" policies that he said threatened to deprive U.S. companies operating in China of important patent and other intellectual property protections.

"This is a policy that is intolerable ... We must send the strongest possible message, draw the line in the sand that we are not going to say you can actively discriminate against American intellectual property," Wyden said.

(Reporting by Doug Palmer, additional reporting by Glenn Somerville; Editing by Andrew Hay)