- The Washington Times - Sunday, November 13, 2011

A U.S.-backed initiative to create a Pacific free-trade bloc to counter China’s economic power gained momentum at an international summit Sunday when Canada and Mexico said they want to join the fledgling partnership.

Canadian Prime Minister Stephen Harper said his country needs Asia as a market for its energy exports and that the pact-in-progress would be “an important priority of this government going forward.”

The development bolstered the efforts of President Obama, who pushed for the agreement during the annual Asia-Pacific Economic Cooperation summit in Hawaii. Japan, the world’s third-biggest economy, already said it would join the nine nations already involved in talks on what is known as the Trans-Pacific Partnership.

Earlier at the two-day summit, Mr. Obama, under pressure at home to create more jobs, tried to talk tough with Chinese President Hu Jintao about China’s monetary and trade policies. But there was little outward evidence that Mr. Hu got the message.

Hosting the event in Honolulu, Mr. Obama said China must adhere to international trade rules and stop infringing upon U.S. intellectual-property rights.

“What I have said since I first came into office — and what we’ve exhibited in terms of our interactions with the Chinese — is, we want you to play by the rules,” Mr. Obama said at a meeting of business leaders. “And currency is probably a good example.”

The U.S. wants China to allow its currency, the yuan, to appreciate in value freely according to market forces. U.S. officials argue that China’s practice of keeping the yuan artificially low costs the U.S. jobs and contributes to a trade imbalance.

Mr. Obama also said China is playing fast and loose with property rights.

“For an economy like the United States — where our biggest competitive advantage is our knowledge, our innovation, our patents, our copyrights — for us not to get the kind of protection we need in a large marketplace like China is not acceptable,” Mr. Obama said.

The two presidents met for private talks at APEC that were described as “very frank.” Mr. Obama told Mr. Hu that Americans were “growing increasingly impatient and frustrated with the pace of change,” senior White House aide Michael Froman told reporters.

Mr. Obama is under pressure from lawmakers and Republican presidential contenders to take steps to persuade China to loosen its monetary policy. Former Massachusetts Gov. Mitt Romney has said China is violating international trade rules and that he would issue an executive order as president labeling China a currency manipulator.

“If you are not willing to stand up to China, you are going to get run over by China,” Mr. Romney said at a recent Republican debate.

In public, Mr. Hu appeared unmoved by Mr. Obama’s appeals to play fair in international trade. When Mr. Obama spoke, the Chinese leader rarely looked his counterpart in the eyes.

Mr. Hu said yuan exchange rates are not to blame for the U.S. trade deficit and weak job market, and those problems wouldn’t be resolved even by a big rise in the Chinese currency, the state-run Xinhua News Agency reported Sunday.

Mr. Hu said the U.S. could help solve its own problems by relaxing export restrictions and making it easier for Chinese businesses to invest in the U.S., Xinhua reported.

Mr. Obama is “holding a pretty weak hand” with the Chinese, said Dean Cheng, fellow at the Asian Studies Center at the conservative-leaning Heritage Foundation in Washington.

“The real concern [among the Chinese] has to do with our debt and our deficits,” Mr. Cheng said. “This administration has no plans whatsoever to deal with deficits.”

But Mr. Obama’s rhetoric is important because it might “convince the Asia-Pacific neighborhood that America is willing to speak clearly to the Chinese and make a commitment to Asia,” said Ernest Z. Bower, director of the Southeast Asia Program at the Center for Strategic and International Studies in Washington.

“The Chinese have to take notice,” Mr. Bower said.

Mr. Obama said at one point the U.S. is “rooting for China to grow” because it will aid in the growth of U.S. exports. And he said the U.S. has been “lazy” in its pursuit of trade opportunities in recent years.

“We’ve been a little bit lazy over the last couple of decades,” Mr. Obama said. “We’ve kind of taken for granted — ‘Well, people would want to come here’ — and we aren’t out there hungry, selling America and trying to attract new businesses into America.”

While international trade and national security were the main topics at the conference, there were still reminders for Mr. Obama of domestic politics. As he arrived at the summit site Sunday morning, about 20 people greeted his motorcade holding up pieces of paper that spelled “Cain,” a promotion for Republican presidential candidate Herman Cain.

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