Obama Acts to Investigate U.S. - China Trade Absurdity

10/16/2010 03:49 pm ET | Updated May 25, 2011
  • Scott Paul President, Alliance for American Manufacturing

All praise from here for President Obama's courageous decision Friday to proceed with an investigation of China's opportunistic and illegal trade practices in the clean energy sector. Those of us dedicated to supporting U.S. workers, U.S. jobs and U.S. manufacturing owe him an enormous debt of gratitude.

The Administration deserves a tremendous amount of credit for considering this case on its merits, rather than letting some overarching philosophy dictate the outcome. Demonstrating a willingness to challenge China's cheating could make a huge difference for American workers and businesses in the clean energy manufacturing sector. And if the Administration's efforts with China are successful, the ultimate result will be more American jobs.

Friday's decision, announced by United States Trade Representative Ron Kirk, was in response to a United Steelworkers (USW) Section 301 unfair trade complaint against China. In his announcement, Kirk said, "We take the USW's claims very seriously, and we are vigorously investigating them." He said his office would use the next 90 days - the time period called for under World Trade Organization (WTO) laws - to investigate the practices detailed in the USW petition.

The Steelworkers - one of our stakeholders - stepped up to the plate while many others have been reluctant to do so in the face of Chinese pressure. Here was the union's reaction Friday.

This week's trade numbers sure helped drive home the fact of the absurdity of our trading relationship with China: a record-breaking $28 billion trade deficit with China driving a total August deficit of $46.3 billion.

China did not get to this superior position by playing on a level playing field, and the USW's petition, a 5,800 page report, details the more than 80 Chinese laws, regulations and practices that are designed to crush clean energy manufacturing and other green technology in the U.S. As the August numbers help show, China's plan is working. China has set prices to undercut the U.S. and other competitors, set discriminatory technology laws and regulations, demanded that foreign companies transfer valuable technology, and has provided massive subsidies to Chinese companies, causing serious damage to U.S. interests.

The numbers also help put in perspective how futile U.S. clean energy plans and proposals will be unless China adheres to international trade laws.

The Brookings Institution, American Enterprise Institute and the Breakthrough Institute issued a joint report this week calling on the government to invest $25 billion a year in "military procurement, R&D, and a new network of university-private sector innovation hubs to create an energy revolution."

That's all fine, but just comparing the numbers - a trade deficit of $28 billion a month versus a proposed U.S. investment of $25 billion a year - shows the futility of the effort until the U.S. regains balance in its trading relationship with China.

As I wrote in November 2009, "American voters have a visceral response to jobs shipped overseas, a trend that Obama said he would address as a candidate. Less than a year out from the mid-term elections, this looms as a major political problem, as well as an economic one."

That mid-term election is a lot closer now and until today the fundamentals had not changed. The president's decision to stand up against China's highly aggressive and illegal trade practices is a huge win for American workers, and he deserves our hearty thanks.

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