Asians uneasy over Obama trade stance
By JOE McDONALD,AP Business Writer AP - Thursday, November 6
BEIJING - Asian businesspeople and analysts expressed hope Wednesday that U.S. President-elect Barack Obama will tackle the financial crisis with fresh vigor, but they also expressed anxiety over whether Washington will embrace more protectionist trade measures.
"The financial crisis has a great impact on the world. If Obama can reverse the tide, then certainly it's good," said Liao Yi, deputy general manager of CHiNT Electronics Group, one of China's biggest producers of power-transmission equipment.
Most Asian stock markets rose Wednesday, partly on relief that the next U.S. leader was chosen, lifting months of uncertainty. Japan's Nikkei index jumped 4.5 percent to 9,521.24 and Hong Kong's benchmark rose 3.2 percent to 14,840.16.
Still, Kazuo Mizuno, chief economist at Mitsubishi UFJ Securities Co. in Tokyo, cautioned that a new president could not deliver a quick fix for the U.S. financial meltdown, which is dragging on global growth.
"Changing the president is not going to be enough to save the American economy," Mizuno said. "Even the president is not going to be able to change America without help from the world."
Many expressed unease about Obama's pledges to vigorously enforce trade laws and criticism of a pending trade pact with South Korea that he says fails to address an imbalance in auto shipments. The Democrats, traditionally viewed as more protectionist on trade than Republicans, now control the presidency and Congress.
Obama has said he is in favor of free trade agreements if they benefit the United States. He has criticized the one with South Korea, saying it does not adequately address an imbalance in auto trade. South Korean automakers sold 772,482 vehicles in the United States in 2007, while the U.S. sold 6,235 in South Korea, according to industry statistics.
"He appears to be a protectionist," said Chea Mony, president of the Free Trade Union of Workers in Cambodia, which has an export-driven textile industry. "I am quite concerned about that because most of our clothing products are exported to America."
In an Oct. 24 letter to the U.S. National Council of Textile Organizations, Obama pledged "strong enforcement" of trade remedy laws, which can include added tariffs on imports that are deemed to hurt American businesses. Obama said he would include labor and environmental standards in free trade agreements _ a measure that many in Asia view as a possible pretext to shield U.S. companies from foreign competition.
Obama also has said he would pressure China to end what he calls the manipulation of its exchange-rate system. Washington and other trading partners say Beijing's currency, the yuan, is kept undervalued, giving its exporters an unfair price advantage and adding to China's multibillion-dollar trade surplus.
Frank Gong, a Hong Kong-based managing director for JP Morgan Securities, warned of possible conflict if Democrats in Congress try to support American businesses and workers by curbing Asian imports.
"That could mean trade friction and the risk of rising protectionism," Gong said.
Indian outsourcing companies _ accused by critics of stealing U.S. jobs _ have also expressed some apprehensions about an Obama victory. They have been hit by the global financial meltdown because they depend heavily on U.S. financial services firms for a big chunk of their revenue.
The potential for a protectionist backlash is "something we have to factor in," S. Ramadorai, chief executive of Tata Consultancy Services, India's largest software services provider, said shortly before the election. "It's something that comes up every time during elections."
Other analysts said that despite Obama's pre-election comments, he was likely to follow the example of previous U.S. presidents and take a moderate line in office to preserve important trade relations with Asia.
"I'm not worried about what might happen after Obama's win," said Qiang Yongchang, a professor at the Economy Institute at Shanghai's Fudan University. "He may have talked tough, but based on past experience, that's just a tool to win over voters."
AP Business Writers Tomoko Hosaka and Yuri Kageyama in Tokyo, Elaine Kurtenbach in Shanghai, Jeremiah Marquez in Hong Kong and Kelly Olsen in Seoul, Associated Press Writer Ker Munthit in Phnom Penh and AP researcher Bonnie Cao in Beijing contributed to this report.
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