Reuters: Regulatory News: UPDATE 2-U.S. Sen. Schumer: use CNOOC oil bid to fix trade issues

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UPDATE 2-U.S. Sen. Schumer: use CNOOC oil bid to fix trade issues Jul 27th 2012, 17:30 Fri Jul 27, 2012 1:30pm EDT * U.S. approval of bid should come with conditions-Schumer * Suggests China must agree to resolve complex trade issues * "We should not let this window of opportunity pass us by" By Roberta Rampton WASHINGTON, July 27 (Reuters) - Senator Charles Schumer said on Friday that the Obama administration should use a bid by China's state-run CNOOC for Canadian oil company Nexen Inc as leverage to fix long-standing trade and investment issues with China. Schumer, who has made criticism of China's economic policies a hallmark of his career, has argued that China fixes the value of its currency too low, creating unfair trading conditions. He said in a statement that he does not object to CNOOC's $15.1 billion deal on its merits. But in a letter to Treasury Secretary Timothy Geithner, Schumer suggested the United States should try to further its trade agenda when it reviews the $15.1 billion deal. "It is rare that we have so much leverage to exert upon China. We should not let this window of opportunity pass us by," Schumer said in the statement. CNOOC has asked the Committee on Foreign Investment in the United States (CFIUS), chaired by Geithner, to review the deal because Nexen has about 10 percent of its assets in the U.S. Gulf of Mexico. CFIUS is an inter-agency committee that reviews foreign takeovers of U.S. assets for national security concerns. "At some point, we have to put our foot down over China's refusal to play by the rules of free trade," said Schumer, who is the Senate's No. 3 Democrat. Schumer suggested several "concrete steps" China should be required to take for CNOOC's bid to gain approval from CFIUS, which is chaired by Geithner - all of them complex. China should join a government procurement agreement, simplify its review system for foreign investments, step up enforcement of intellectual property infringements, and require its provincial and municipal governments to make certain reforms as a condition for U.S. approval of the takeover, Schumer said. By law, the Treasury Department cannot comment on CFIUS reviews, a spokeswoman said. Schumer was among the most vocal critics in Congress of a proposed 2005 merger between CNOOC and the oil company Unocal, which was withdrawn under pressure. He also been vocal in complaining about tainted juice imports from China. So far, the CNOOC-Nexen deal has not shown signs of producing a reaction in Washington anywhere near the Unocal controversy. Canadian Prime Minister Stephen Harper has said his government would study the bid closely, and that there should be no assumptions about whether or not it will receive approval. Link this Share this Digg this Email Reprints

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