Republican Mitt Romney's plan to designate China for currencymanipulation would be a huge mistake and draw retaliation from the country'snew leaders, an Obama campaign adviser said Wednesday. A Romney adviser saidthe U.S. shouldn't be paralyzed by fears of a trade war.
Jeff Bader, a former top Obama aide on Asia policy, said it was"astonishing" that the Republican wanted to take the step on hisfirst day in office, before meeting with the new guard in Beijing, which beginsits own power transition two days after the Nov. 6 U.S. election.
"They will be new leaders and they will not be in a passive or submissivemood for threats and being backed into corners," Bader said at a Chinapolicy debate with Romney campaign adviser Aaron Friedberg at John HopkinsUniversity in Washington.
Friedberg, an international affairs professor at Princeton University, saidthe designation would put China on notice that the U.S. was ready to act on arange of trade violations that Obama has failed to address, including Chineseexport subsidies and intellectual property theft.
He said the designation would be followed by negotiations, and if necessary,imposition of so-called countervailing duties on some products, on a slidingscale.
"China is more dependent on the United States than we are onthem," Friedberg said.
China has been a testy issue in the tightly fought election campaign as thecandidates vie to show they would help U.S. workers hit by the migration ofmanufacturing jobs abroad. The U.S. has long accused China of undervaluing itscurrency to keep its products cheap, hurting U.S. exports.
Bader said the renminbi is still undervalued but has appreciated by about 30percent since Beijing began a managed float of the currency in 2005.
The Romney adviser welcomed Obama's increased focus on Asia but said the approachhas been inconsistent and ineffective, leaving allies uncertain about U.S.staying power.
Bader and Friedberg were like-minded on many aspects of U.S. policy to theregion — traditionally an area of broad agreement between Democrats andRepublicans — including the need to engage China and its military. They agreedthe conduct of China in handling its maritime territorial disputes in SouthChina Sea would be a test of whether the Asian power's rise would be peacefulor not.
"So far it has chosen to use coercion," Friedberg said.
He said that despite reduced tensions across the Taiwan Strait, a longtimeregional flashpoint, the situation remained unpredictable. He said Romneysupported sales of new F-16 fighter jets that Taiwan requested. Fearing backlashfrom Beijing, Obama opted in 2011 only to upgrade the self-governing island'sexisting fleet of F-16s.
Bader conceded that efforts to get China to pressure its ally North Koreaover its nuclear program had mixed results. He said in a second term, Obamawouldn't be afraid of direct talks with Pyongyang leading to resumption of astalled six-nation dialogue. But it would require preconditions, including amoratorium on North Korean nuclear and missile tests, and halting uraniumenrichment.
Friedberg advocated tighter financial sanctions, saying more pressure wasneeded before negotiations with North Korea could yield results. He likened itsgovernment to a criminal organization financed by the drug trade,counterfeiting and illicit arms sales.
