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US Trade Representative Will Investigate China’s Greentech Policies

Could this be a prelude to the Treasury Department’s actions? The US Trade Representative, Ron Kirk, just launched an investigation into China’s green technology investment and trade policies. The United Steelworkers petitioned the Obama Administration for an investigation into these policies in September, after revealing that China illegally subsidizes local exporters of green tech, among other abuses like limiting exports of certain raw materials used in manufacturing green tech like solar panels, forcing foreign companies to settle and manufacture in China. This has created a widening trade gap with China.

In his statement, Kirk takes the claims of the USW seriously:

“The USW has raised issues covering a wide array of Chinese government policies affecting trade and investment in green technologies. This is a vitally important sector for the United States. Green technology will be an engine for the jobs of the future, and this Administration is committed to ensuring a level playing field for American workers, businesses and green technology entrepreneurs,” said Ambassador Kirk.

“We take the USW’s claims very seriously, and we are vigorously investigating them. In light of the large number of allegations and the extensive documentation accompanying them, I have asked my staff to utilize the 90-day period allowed by statute to thoroughly examine and verify the USW’s claims. For those allegations that are supported by sufficient evidence and that can effectively be addressed through WTO dispute settlement, we will vigorously pursue the enforcement of our rights through WTO litigation.”

This is essentially the first step to filing a formal complaint with the WTO. Under Section 301 of the Trade Act of 1974, any member nation of the WTO can file a claim on policies that violate trade agreements. Basically, Kirk is using a 90-day period to investigate the steelworker claim before submitting it to the WTO.

The Director of the Alliance for American Manufacturing, Scott Paul, reacted by saying that “The Obama Administration deserves a tremendous amount of credit for considering this case on its merits, rather than letting some overarching philosophy dictate the outcome. We could not be more pleased.” They see it as a way to create more American jobs by leveling the playing field in green technology manufacturing. And a situation where countries play by their own set of rules in global trade will just cause a race to the bottom that results in bad outcomes for workers and consumers.

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David Dayen

David Dayen