Thursday, 22 March 2012 16:16

Nearly 200 Congressmen and Senators Write in Opposition to China’s Auto Parts Practices

On March 16, a group of 188 U.S. lawmakers led by U.S. Senator Debbie Stabenow (D-MI) urged President Obama to crack down on “predatory” Chinese pricing practices, which they said are threatening the U.S. auto parts industry and could cost the U.S. more than a million jobs.

“We cannot wait until further damage is done,” the nearly 200 members of the House and Senate— including all the Democratic members of the House Ways and Means Committee—said in a letter to President Obama. “Seventy-five percent of the jobs in the automotive sector are in auto parts, and these jobs are at risk in every state in the nation.”

The Congressional letter encourages Presidential action against Chinese predatory trade practices in this sector to be one of the “first and highest priorities” of his Administration’s recently created Interagency Trade Enforcement Center. The lawmakers praised the administration’s creation of the Interagency Trade Enforcement Center to promote a more coordinated effort, which they say will provide the United States additional resources to examine China’s and other nations’  trade violations. This effort, unlike any that have taken place in recent memory, asks the Administration to further investigate the barriers that China has adopted and initiate appropriate action to level the playing field.

The complaint is supported by the United Steel Workers. “Most trade cases are filed by the private sector after substantial injury has occurred. China’s practices in this sector have already caused harm, but the goal is also to alter its policies before the complete decimation of our domestic industry. In these critical economic times, we must take every appropriate action to address unfair trade practices by foreign countries,” said USW President, Leo Gerard.

This letter follows action by the United Steelworkers (USW) and others to identify broad sets of practices utilized by China to protect its auto parts sector to the disadvantage of its competitors. The Congressional letter ratifies USW concerns and calls for immediate action. The USW represents about 850,000 workers in the United States and Canada in a wide variety of industries, ranging from glass making to mining, paper, steel, tire and rubber and other manufacturing environments.

The United Steelworkers (USW) says that America’s auto parts sector continues to be threatened by unfairly traded auto parts imports from China and its policies that exclude US products from their markets. The USW lauds the 188 members of Congress who signed the Congressional letter, demonstrating broad political support behind intentions to stop China’s protectionist, predatory and illegal trade practices.

The lawmakers included many from the auto manufacturing states of the upper Midwest, which will likely be important in Obama’s bid for re-election in November.

They said China uses a “vast array of policies” to give its auto parts producers an unfair trade advantage.

Those include Chinese limits on imports of foreign auto parts and subsidies that drive down the prices auto parts that are made in China, the lawmakers said.

“These tactics are working. Chinese auto parts exports are rapidly growing and have increased almost 900 percent since 2000,” the lawmakers said.

The appeal follows Obama’s recent decision to establish an interagency task force to boost U.S. enforcement of trade agreements. The lawmakers urged Obama “to use all existing authorities” to protect the U.S. auto parts sector, but did not outline a particular course of action.

Advocates have said the administration’s options include bringing a case at the World Trade Organization or initiating an action under U.S. trade remedy laws that would lead to duties or other restrictions on imports from China.

The USW also filed a petition with the US government alleging that the Chinese government unfairly favors, through subsidies and other trade measures, its domestic manufacturers of “green” goods like solar panels and wind turbines.  The petition was filed under a section of US trade law—Section 301 of the Trade Act of 1974—that was once a strong protectionist weapon but has basically gone dormant since the advent of the World Trade Organization.

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