Clinton says ‘confident’ of deal on US debt crisis

Democrats and Republicans have been sparring over a measure to raise the $14.3 trillion US debt ceiling © AFP/Pool Saul Loeb

AFP

HONG KONG (AFP) – US Secretary of State Hillary Clinton said on Monday she was confident lawmakers would reach a deal to avert a debt default, as she addressed business leaders in Hong Kong.

“The political wrangling in Washington is intense right now,” she said towards the end of an Asian tour, while the White House and top lawmakers scrambled to avert a disastrous default on the country’s debt.

“I am confident that Congress will do the right thing and secure a deal on the debt ceiling and work with President (Barack) Obama to take steps to improve our long-term fiscal outlook,” the top US diplomat said.

Democrats and Republicans have been sparring over a measure to raise the $14.3 trillion US debt ceiling, allowing Washington to pay its bills past an August 2 deadline, while cutting $2.7 trillion in spending over 10 years.

Obama has warned of economic “Armageddon” if talks fail, sparking a debt default — though analysts said they believed an agreement would be reached.

Markets in Asia fell Monday although losses were muted on expectations of an eventual deal.

Clinton also urged Asian nations to embrace “open, free, transparent and fair competition”, as Beijing and Washington continue to lock horns over their increasing economic integration.

The top US diplomat called for “rigorous reforms” in global trade rules, adding that some countries were “making short-term gains” by ignoring them.

The United States has led calls for China to boost the value of its currency, the yuan, which critics say is artificially undervalued to make China’s exports cheaper.

“The US believes that these (fair trade) principles should apply to us — and to all,” she said.

Clinton later visited the southern Chinese boom town of Shenzhen, considered the heartland of the country’s industrial machine, for talks with Dai Bingguo, who holds the powerful position of state councillor.

Earlier Monday, Clinton met with Hong Kong’s Chief Executive Donald Tsang and the city’s legislators, as she neared the end of a tour in which she has weighed in on North Korean denuclearisation talks and South China Sea tensions.

She was at a series of meetings last week on the Indonesian island of Bali culminating in the Association of Southeast Asian Nations Regional Forum security dialogue.

Clinton said she had invited a top North Korean envoy to New York for “exploratory talks” on the possible resumption of six-party negotiations on denuclearisation.

That revelation came after envoys from North and South Korea held unexpected discussions Friday in Bali.

Clinton said she was “encouraged” by the talks, but warned that the US was not ready to offer new concessions to re-start the stalled negotiations.

A senior official travelling with Clinton on Monday echoed her caution.

“Those who are suggesting we are on the fast track to the resumption of six-party talks, we need to see many more indications from the North Koreans before we reach that point,” the official said.

Another Clinton aide said in Shenzhen that Washington wanted to be sure “China tells North Korea of our determination to see real progress from Pyongyang” on restarting talks.

The six-nation talks involve the two Koreas, China, the United States, Japan and Russia. The last round ended in a stalemate in December 2008.

Clinton also said rising tensions in the South China Sea threatened regional peace, warning against the use of force in an area believed to be rich in oil and gas deposits — and one of Asia’s potential military flashpoints.

The Philippines, China, Vietnam, Malaysia, Taiwan and Brunei claim all or part of the South China Sea.

The Philippines and Vietnam have accused China of harassing oil exploration vessels, shooting or beating up their fisherman, and placing territorial markers on islets in the sea.

© AFP — Published at Activist Post with license