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Outside the Circle News

Obama Challenges China

Mitt Romney, the Republican presidential nominee, has repeatedly called out the Obama administration on its lack of action in the Chinese trade and currency policies.

“President Obama has spent 43 months failing to confront China’s unfair trade prices. I will not wait until the last months of my presidency to stand up to China, or do so only when votes are at stake,” Romney stated, according to The New York Times.

Obama responded, saying that Romney was responsible for sending jobs to China during his period of mass outsourcing while at Bain Capital. He also announced on Monday, Sept. 17 that he would be making a trade case at the World Trade Organization against Beijing, China about unfair subsidies for car and auto parts exports. The trade case accuses China of providing approximately $1 billion of subsidies in the past two years.

Seemingly in response, China’s commerce ministry almost immediately announced on its website that it would be filing a World Trade Organization case against the United States on the grounds of unfair penalty tariffs in anti-subsidy cases.

Some people say that this trade case was a strategic move on Obama’s part, since the states most affected, such as Michigan, Wisconsin, and Ohio, are of crucial importance for the upcoming election. However, it can take up to a year and a half for cases going through the World Trade Organization to be decided.

Ohio has been strongly affected by China’s subsidies in the form of job losses. The auto industry accounts for 12.4 percent of jobs in Ohio, and employment in the auto parts profession has dropped by nearly 50 percent since 2001, while imports from China increased sevenfold. However, China cannot be completely to blame, with car sales dropping, and automation increasing.


United States Pairs Up with Japan

It was announced on Monday, Sept. 17 that the United States has reached an agreement with Japan about deploying a second advanced missile-defense radar on Japanese soil.

According to The New York Times, US Defense Secretary Leon Panetta travelled from Tokyo to Beijing, in order to meet with China’s leadership, including Xi Jinping, the country’s expected next president.

While in Tokyo, Panetta stressed the importance of having an antimissile radar system in order to strengthen the American-Japanese alliance, as well as to help protect Japan from a potential surprise attack by North Korea. He continued, “The purpose of this is to enhance our ability to defend Japan.”

“It is also designed to help forward-deployed U.S. forces, and it also will be effective in protecting the United States homeland from the North Korean ballistic missile threat.”

Chinese officials, however, believe that the missile defense system was aimed at their country, and would help the Japanese resistance against China’s territorial claims on the Diaoyu/Senkaku Islands.

According to The New York Times, Shi Yinhong, a professor of international studies at Renmin University in Beijing, said, “The joint missile defense system objectively encourages Japan to keep an aggressive position in the Diaoyu Islands dispute, which sends China a very negative message.”

However, Panetta continues to state that the United States will not take a side in the territorial island debate between China and Japan.


Shell Suspends Arctic Drilling

Shell Oil announced on Monday, Sept. 17 that it would need to postpone the completion of its wells in the Alaskan Arctic until 2013.

The delay was caused by a testing accident that severely damaged a spill containment dome. In the past six years, Shell has spent over $4.5 billion on the project.

The accident further reinforces thoughts that if Shell cannot control its containment equipment in simple testing conditions, it will not be able to stop an unexpected leak when the equipment is subjected to the Arctic’s ice flows and fierce winds. However, they are continuing in their efforts after support from the Obama administration.

Shell has experienced difficulties in the past with equipment problems and constant sea ice. The president of Shell Oil, Marvin Odum, said, “It’s a disappointment that this particular system is not ready yet. We’ve made the call that we are better off not drilling in hydrocarbons this year.”

Shell’s parent company, Royal Dutch Shell, has experienced multiple failures of major projects in the past three years. In 2010, the BP oil spill occurred in the Gulf of Mexico, thwarting Royal Dutch Shell’s attempts at winning regulatory approval.

In 2011, an inability to get final approval for an air quality permit also caused a major delay. This year, the company finally had all of its necessary approvals, but still cannot drill.

The dome test accident occurred Saturday evening in the Puget Sound, when the Arctic Challenger, a containment barge, was being tested. Other problems plague the containment barge, such as electrical malfunctions. The dome was carried on the Arctic Challenger the night of the accident.

There was a mechanical device on the dome that supposedly malfunctioned as it was being entered into the water. One possible explanation is that gas had become trapped in the dome, causing premature rocking and rising. Another is that a submarine robot may have become tangled in the dome’s anchor lines.

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