Long story short, the US is trying to get China to appreciate its currency, and is looking for other nations to back it up so it doesn't look like American bellyaching. Allies are in short supply, because India and Brazil prefer dealing with China mano-a-mano and the EU is too caught up being European to really care.
The the first of two things I thought were interesting is the above quoted 'irony'. I don't think China particularly minds having a greater domestic market, because that means less reliance on the American and EU markets, and therefore greater bargaining power. What I do think is that they want to limit the growth of their middle class in an effort to retain power over their populace (as seen with the shut-out of the Nobel Peace Prize. A weak currency is only as strong as the use they put it to, and is not an end in itself, as Drezner seems to be implying.
The second is the failure of international organizations designed to deal with these trade disputes. China is the new kid on the block, and it really seems like everyone from investors to NGO's are going out of their way to allow China to save/keep face (Norway not withstanding). Why is this? Much of the purpose of the G20 and WTO is to allow for a system of formal complaints to be brought and judged. If we have a formal system, why opt for the informal route? as is seeming the case.