Secretary of State Hillary Clinton, in an economic speech Friday, called for a level playing field in world trade while lamenting what she said were efforts by China to "game" the global trading system to its advantage. She appealed for an end to partisan paralysis in Washington over economic policy.
In her speech to the New York Economic Club, Clinton said advancement of trade and investment should be a bigger part of U.S. diplomacy. But the address, and a subsequent question-and-answer session, included some of the sharpest Obama administration criticism to date over Chinese trade policy.
The secretary said China, by deliberately holding down the value of its currency to boost exports, has piled up the largest trading surplus in world history to the detriment not only of the United States but other major economies.
"It is not only distorting the market, it is not only making our exports more expensive, it is now beginning to impact on other countries as well. So it is not the United States alone saying: China needs to rebalance this artificial policy of depreciation which is good for their exporters, which disadvantages their own people in many ways,” she said.
Clinton spoke sympathetically of legislation approved by the Senate earlier this week threatening higher tariffs against China if the currency imbalance continues.
The secretary downplayed fears by some opponents of the measure, the fate of which is uncertain in the House of Representatives, that it would trigger a trade war.
“I don’t think there’s anything wrong with standing up and asserting ourselves. And I don’t see that leading into the kind of protectionism that you rightly warn about from the 1930s," she said. "The Obama administration has said about the Schumer bill in the Senate that anything we would do needs to be consistent with our international obligations including WTO obligations. But we also don’t want to be taken advantage of.”
Clinton said she has been confronted on recent foreign trips with concern by allies about the impasse on deficit-cutting efforts in Washington that caused a near-default on bond debt by the U.S. government two months ago.
“I think we are at a standstill in that debate here at home and I deeply regret that, because I don’t think we have the time to be so caught up in our own political arguments,” she said.
The secretary said the U.S. political parties and business community need to rebuild a “team-America spirit” and cannot afford, in her words, to “remain paralyzed by ideology and partisanship.”