* USTR Kirk to select director of new interagency team
* Unit will draw on resources from across government
* Reports raise alarm on China's industrial policies
* No new trade cases announced on Tuesday
By Doug Palmer
WASHINGTON, Feb 28 President Barack Obama,
following through on a promise to beef up enforcement of trade
agreements, on Tuesday signed an executive order creating a new
government team to make sure China and others play by the rules.
"American workers are the best workers on Earth, and when
the playing field is level, I promise you - America will always
win," Obama said in a speech to the United Auto Workers, whose
help he will need in hotly contested states like Ohio and
Michigan to win re-election in November.
The new interagency unit will "bring the full resources of
the federal government to bear to investigate and counter unfair
trade practices around the world, including by countries like
China," Obama said.
The move comes as Obama has faced criticism from Republican
presidential candidate Mitt Romney over his handling of China
and as the U.S. trade deficit with the world's second-largest
economy has soared to a record $295.5 billion in 2011.
In addition, two new reports on Tuesday raise concerns about
state-supported competition from China and call for the United
States to take a variety of steps to respond.
Obama first outlined his plan to create a new Interagency
Trade Enforcement Unit (ITEC) in his annual State of the Union
speech last month to Congress.
He took particular aim at China, which he accused of
lavishing subsidies on its companies and not doing enough to
stop counterfeiting of American goods.
The White House plans to spend $26 million dollars to hire
50 to 60 people to staff the new team, which will also draw on
existing resources at the departments of Agriculture, Homeland
Security, Justice, State and Treasury as well as the
government's intelligence agencies.
The Obama administration has filed six cases at the World
Trade Organization since taking office, or an average of two per
year. Five of the cases have been against China.
Former President George W. Bush's administration averaged
about three WTO cases per year between 2001 to 2009.
The executive order directs U.S. Trade Representative Ron
Kirk to select a director to lead the new unit, with a deputy
director chosen by U.S. Commerce Secretary John Bryson.
"In a matter of just 90 days, we will hire leadership and
core staff ... and we will put them to work on the toughest
cases," Bryson said.
'ENOUGH IS ENOUGH'
Kirk said the new team would focus on "the most commercially
significant challenges" that U.S. companies face but did not
identify any new cases that the administration could bring
against China or other trading partners.
He touted a case against Chinese export restrictions on raw
materials the administration has already won at the WTO and said
with additional resources the new trade unit will "be better
able to shine the spotlight on trade practices that distort
markets and inhibit U.S. exports."
Romney, who has struggled recently to hold onto his
front-runner status in Republican presidential primaries, has
criticized Obama for not doing more to "crack down on China for
stealing jobs" and promised to get tough with China over its
currency practices if elected president.
The Information Technology & Innovation Foundation, a
Washington think tank, in a new report on Tuesday accused China
of using currency manipulation, subsidies, tariffs, forced
technology transfers, export restrictions, standard setting and
other policies to gain an "absolute advantage" for its companies
in a wide array of industries.
"While virtually all governments have crafted economic
development policies to boost competitive advantage, China has
developed the most comprehensive set of policies, with most of
them violating the spirit, if not the letter of the law of the
WTO," the report said. "It's time to say 'enough is enough.'"
It recommended overcoming the concern many companies have
that filing a WTO case will trigger Chinese retaliation "by
making it national policy that USTR will bring cases whenever
U.S. interests are being hurt through trade rule violations,
even if U.S. companies don't want them to proceed."
It also called for a tax credit to help companies pay for
WTO cases and urged the United States to "build a global
free-trade coalition" with the European Union, Canada,
Australia, Japan and others to push back against China.
A second report by the office of Democratic Senator Ron
Wyden warned that the United States is "losing the environmental
goods economy to China" because of Beijing's aggressive push to
promote its wind, solar and other renewable technology sectors.
"The (global trading) system breaks down when the world's
participants fail to abide by its rules. That is especially true
when the country that appears to be breaking the rules has the
world's second-largest economy," Wyden's office said.
Along with tougher enforcement of trade agreements, the
United States needs vigorous government polices to support
production of environmentally friendly goods, the report said.