Obama and Clinton vow to get tough with China

PITTSBURGH (Reuters) - Democratic presidential rivals Barack Obama and Hillary Clinton courted industrial workers in Pennsylvania on Monday with promises to crack down on Chinese trade and currency policies they said were hurting U.S. companies.

In separate appearances at a manufacturing forum, the two candidates said Republican President George W. Bush had been a bystander while China took advantage of unfair trade practices.

Obama, an Illinois senator, said as president he would threaten to limit Chinese access to the U.S. market as a bargaining tool to force Beijing to quit manipulating its currency.

"What we need to do is just be better bargainers and say 'Look, here's the bottom line: You guys keep on manipulating your currency, we are going to start shutting off access to some of our markets,'" Obama told the Alliance for American Manufacturing forum in Pittsburgh.

Clinton proposed a series of steps to strengthen U.S. trade enforcement and crack down on Chinese trade policies that she said were driving up the trade deficit.

"When they violate trade rules they should be held accountable," said Clinton, a New York senator. "We have done so much over the last seven years to advantage China to our detriment."

Obama and Clinton are contending for the Democratic nomination to face Republican John McCain in November's presidential election.

Both Democrats have emphasized efforts to protect U.S. jobs ahead of their April 22 showdown in Pennsylvania, the next battleground in the race and a state hard-hit by the loss of manufacturing jobs.

OBAMA: BUSH A 'PATSY'

The two Democrats told the crowd of steelworkers and other industrial union members that Bush had failed to protect U.S. jobs. Obama said Bush, whose administration has opposed attempts by the U.S. Congress to pass legislation to force China to revalue its currency, was a tough-talking "patsy" on trade negotiations.

"America and the world can benefit from trade with China. But trade with China will only be good for you if China itself plays by the rules and acts as a positive force for balanced world growth," said Obama, who drew a stronger ovation from the labor crowd than Clinton.

Clinton said she would aggressively use World Trade Organization mechanisms to challenge unfair trading practices, take steps to crack down on piracy issues and move to provide relief to U.S. companies hurt by surges of Chinese imports.

"We can't rely on the whims of the Bush administration to support U.S. manufacturers," she said.

"That's why I'm calling for changing our laws to send China and other non-market economies a simple message: If you subsidize your exports and hurt our manufacturing, you'll pay the price," she said.

Trade issues have been in the spotlight in the Democratic race as Obama and Clinton have appealed for labor backing by promising to renegotiate the unpopular North American Free Trade Agreement and to oppose the Colombia Free Trade Agreement.

Advisers to both candidates landed in trade controversies. An Obama adviser reportedly told the Canadian government the Illinois senator did not mean his NAFTA talk, while top Clinton strategist Mark Penn was demoted for working on behalf of the Colombian government to promote the trade pact.

A union member noted Clinton's husband, former President Bill Clinton, had signed off on NAFTA without fixing environmental and labor provisions that angered some unions. He asked whether Clinton was going to trick unions again.

"As smart as my husband is, he does make mistakes," she said.

(Additional reporting by Caren Bohan and Paul Eckert; Editing by Bill Trott)

(To read more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http:blogs.reuters.com/trail08/)