US Senator Charles Schumer, Democrat-New York, on Friday asked the Obama administration to withhold approval of the proposed takeover of Canadian independent producer Nexen by the China National Offshore Oil Company until China takes steps to open itself to more foreign investment.
Approval by the US of the deal is needed because Nexen has operations in the US Gulf of Mexico. CNOOC announced its deal to buy Nexen for $15.1 billion on Monday.
"It is rare that we have so much leverage to exert upon China," Schumer said in a statement. "We should not let this window of opportunity pass us by. At some point, we have to put our foot down over China's refusal to play by the rules of free trade," Schumer said.
Schumer wrote to US Treasury Secretary Timothy Geithner, who chairs the government's Committee on Foreign Investment in the United States. He said the US should block the deal until China's government "has made tangible, enforceable commitments to ensure US companies reciprocal treatment."
Schumer said he is in favor of the CNOOC-Nexen deal, as well as further investment by China in the US. He urged Geithner to use this opportunity to force China to take concrete steps based on an earlier commitment to open its economy to foreign investment.
"I believe approval of the CNOOC-Nexen transaction should be a test of these reciprocal commitments, and that concrete progress must be made by both sides simultaneously," Schumer wrote.
