Froman sees China economic slowdown a potential boost to reformFroman sees China economic slowdown a potential boost to reformFroman sees China economic slowdown a potential boost to reform


With broad negotiations underway, the new U.S. trade representative Michael Froman inherits a complex agenda. (Carolyn Kaster/AP)

Economic tensions emerging in China should push the new government to more quickly open the country’s economy and make other changes advocated by the United States, incoming U.S. Trade Representative Michael Froman said Friday.

China’s new leaders are “focused on a concern that the Chinese economy might be slowing and what types of reforms they might need to pursue,” Froman said. Many of those changes, including a gradual liberalization of the financial sector and trying to boost the spending power of Chinese families, “would have positive implications for bilateral economic relations” and U.S. trade, Froman said following his swearing in to the ambassador-level job.

His comments come amid concern about possible slowing growth and financial-sector trouble in China spilling over to the global economy, which is poorly positioned to absorb a big shock.

Sparring about economic issues reached a high pitch between the two countries during last year’s presidential election but has ebbed as President Obama and new Chinese leader Xi Jinping forge a relationship.

Froman said the United States would continue filing enforcement actions against China as needed — none have been brought at the World Trade Organization since the election — but added that economic forces, from rising wages to slowing global demand for its exports, are probably pushing the country toward changes long advocated by the United States and others.

Froman’s shift from the White House, where he served on the National Security Council as Obama’s adviser on international economic issues, puts him in charge of what has become a newly intricate set of issues.

Free-trade talks between the United States and Europe will start next month while such talks are underway between the United States and a dozen Asian and Pacific rim countries, including Japan, Canada and Mexico. Separate talks, coordinated out of the U.S. mission to the WTO in Geneva, aim to open global trade in services, expand the list of freely traded technology products, and do away with cumbersome customs and procedures that complicate the flow of goods.

Beyond China, the administration has been sparring openly with India over that country’s trade policies, been critical of Brazil, and is worried in general that the major developing nations are slowing progress toward a more open world economy.

On their own, any of those issues would be difficult to resolve.

Coming to a head simultaneously, “these are the biggest trade negotiations we’ve had in a long time,” said Bill Reinsch, president of the National Foreign Trade Council. Calling Froman a “good closer” who helped complete deals with South Korea, Colombia and Panama in Obama’s first term, ­Reinsch and other trade experts said he still faces a difficult task.

He brings a breadth of international experience from years in the Clinton administration, and in his previous White House job, he helped put much of Obama’s evolving trade strategy in motion. It is an approach driven by its own geopolitical logic that the United States and Europe, between them, could weight world trading rules in favor of industries important to job creation in the developed world; ringing China with nations aligned to those rules could change how the world’s second-largest economy does business; and with the WTO all but dead as a forum for trade negotiations, the United States could create global momentum for trade liberalization on its own.

Making it happen, however, means landing those agreements not just with trading partners but with a U.S. Congress that has become fractured to the point of stalemate and in an environment where extended high unemployment has produced skepticism about whether free trade produces more jobs than it destroys.

Froman’s nomination to the trade post was widely applauded in the business community and easily cleared the Senate. But a coalition of new House Democrats said this month they would oppose giving Obama new “fast track” authority to amend trade agreements — instead approved only by a yes-or-no congressional vote — because of concerns about “jobs sent offshore because of unfair trade agreements.”

Approval of fast-track legislation is considered necessary for future trade agreements to get through Congress since it insulates them from delaying tactics or amendments that would have to be negotiated with other nations.

Froman said the administration has “no particular deadline in mind” for introducing a fast-track law. But he said it remains committed to finishing the transpacific partnership talks by the end of this year and concluding a transatlantic agreement in 2014.

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