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Obama sure US, China can avoid trade war

Washington, September 15, 2009

President Barack Obama said on Monday he was "absolutely" certain the United States and China could avoid a trade war in a dispute over Chinese tyre imports that has stoked tensions between the two countries.

Obama spoke after China responded swiftly to the Obama administration's announcement on Friday of safeguard duties on tyre imports from China, saying on Monday it would request World Trade Organization consultations over the US move.

"If we don't enforce the rules that are contained in our trade agreements, then it's very hard to have credibility," Obama told CNBC television.

The United States imposed the higher duties in response to a petition filed by the United Steelworkers union earlier this year. It said a tripling of Chinese tyre imports from 2004 to 2008 had cost more than 5,000 US jobs.

The US announcement has threatened to cast a shadow over a summit of the Group of 20 major and developing economies to be hosted by Obama in Pittsburgh next week.

"Here's a situation where China entered into the WTO. It had rules contained in that accession that said that, in fact, if there is a big surge like this, there is a surge breaker," Obama said.

"We have exercised it. I'm not surprised that China's upset about it. But keep in mind we have a huge economic relationship with China," he added. But I just want to make sure that if we actually have rules written down, they mean something."    

Asked whether he was confident a trade war can be avoided, Obama said: "Absolutely. I think it's in China's interest and our interest and the world's interest to avoid protectionism, particularly just as world trade is starting to bounce back from the huge decline that we have seen in the last year." - Reuters




Tags: China | Obama | Tyre | trade war |

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