U.S. 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.
Mr. Schumer wrote to Treasury Secretary Timothy Geithner on Friday, saying he does not object to the $15.1-billion (U.S.) deal on its merits, but suggested the government should require China to address some thorny foreign investment and trade issues.
CNOOC has asked the Committee on Foreign Investment in the United States (CFIUS) 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.
“It is rare that we have so much leverage to exert upon China. We should not let this window of opportunity pass us by,” Mr. Schumer, a powerful Democrat in the U.S. Congress, said in a statement.
“At some point, we have to put our foot down over China’s refusal to play by the rules of free trade,” Mr. Schumer said.
Mr. Schumer suggested several “concrete steps” China should be required to take for CNOOC’s bid to gain approval from CFIUS, which is chaired by Mr. 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, Mr. Schumer said.
By law, the Treasury Department cannot comment on CFIUS reviews, a spokeswoman said.