Obama proposes group to investigate unfair trade practices

President Obama wants to create a new trade enforcement agency to investigate unfair trade practices, especially between the United States and China. 

The announcement during Tuesday's State of the Union address comes as lawmakers and business groups pressure the Obama administration to crack down on China's currency, intellectual property and indigenous innovation issues they say give one of the world's fastest growing economies an unfair international trade advantage. 

"There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders," Obama said.

"And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing finance or new markets like Russia," he said. 

"Our workers are the most productive on Earth, and if the playing field is level, I promise you – America will always win."

The US-China Business Council (USCBC), an organization representing nearly 240 U.S. companies doing business with China, welcomed the call for greater attention to the trade relationship. 

"We look forward to hearing more details about how this new initiative will be structured and look forward to working together to bring benefit to our economy, companies, workers and farmers," said USCBC President John Frisbie. 

“Few issues loom as large on America's economic and foreign policy agendas as our relationship with China," he said. 

"This is the defining global strategic issue for the United States going forward."

U.S. trade officials have several options when confronting China about questionable policies — the Obama administration has sent its top officials such as U.S. Trade Representative Ron Kirk and Treasury Secretary Timothy Geithner to talk to Chinese officials about accelerating the value of the yuan as well as other issues such as intellectual property infringement. 

The U.S. also can and has used legal tools — such as anti-dumping investigations and WTO cases.

"We’ve brought trade cases against China at nearly twice the rate as the last administration and it’s made a difference," Obama said. 

The group supports Obama's plan to “put American companies on even footing with export financing that will level playing field with Chinese companies in third country markets."

"This is an extremely important proposal that should be quickly and forcefully implemented," Frisbie said. 

While Obama argued that workers have jobs because of tariffs put on certain Chinese tires in response to that nation's import taxes, Frisbie said the group disagrees that tariffs on imports of low-end Chinese tires have had any positive effect on U.S. jobs or the economy, because American companies user higher quality products.  

“More engagement with China on the issues that matter to American companies and workers is better than less — especially with a keener, well-coordinated focus on commercial relations and business development, as President Obama has called for," he said. 

Republicans and Democrats have pushed for U.S. officials to look into Chinese trade practices including House Ways and Means Chairman Dave Camp (R-Mich.) and ranking member Sander Levin (D-Mich.).

"A speech alone won't change policy, but it can lay the groundwork," said Scott Paul, executive director, the Alliance for American Manufacturing.

"We look forward to working with the White House as it cracks down on China's cheating, which is stealing jobs and jeopardizing our economic future."

Paul suggested that Congress pass a bipartisan bill to stop China's currency manipulation along with a package of manufacturing tax incentives for innovation, insourcing, training and domestic capital investments.

U.S. trade officials are headed to China next month to discuss a broad spectrum of issues as Congress ramps ups efforts to crack down on policies they argue are hurting American businesses.

Trade advocates are urging caution in passing any sweeping measures that could put China on the defensive and consider retaliation, such as lowering prices for products headed to the United States.