President Barack Obama announced his administration's latest World Trade Organization (WTO) case against China at a recent campaign stop in the electorally-important state of Ohio.
"Today my administration is launching new action against China—this one against illegal subsidies that encourage companies to ship auto parts manufacturing jobs overseas," said the president. "Those subsidies directly harm working men and women on the assembly line in Ohio and Michigan and across the Midwest. It's not right; it's against the rules and we will not let it stand."
Ohio has been devastated by job losses related to the nation's automotive sector, making a Cincinnati campaign stop a logical place for the president to announce this latest enforcement action.
Specifically the Administration has requested WTO dispute settlement consultations with the Government of China over their auto and auto parts "export base" subsidy program. Under the program, China provides extensive subsidies to auto and auto parts producers located in designated regions, known as "export bases," that meet export performance requirements. According to the president and trade officials, the program appears to provide subsidies prohibited under WTO rules because they severely distort trade, and provide an unfair advantage to auto and auto parts manufacturers based in China.
"The Obama Administration is committed to protecting the rights of nearly 800,000 American workers in our $350 billion auto and auto parts manufacturing sector. We insist upon having a level playing field on which our world-class manufacturers can compete," said U.S. Trade Representative Ron Kirk. "China expressly agreed to eliminate all export subsidies when it joined the WTO in 2001. China benefits from international trade rules and must in turn live up to its international obligations."
Separately, the U.S. also requested a WTO dispute settlement panel to address China's imposition of antidumping and countervailing duties on more than $3 billion in exports of American-produced automobiles. This marks the second step in a process to resolve the matter following the U.S. request for formal dispute consultations in June, which ultimately failed to resolve anything.
The Administration has brought, and won, a number of cases against China since Obama took office, including on China's export restraints on raw materials and a recent case, settled in favor of the U.S., against China's discrimination against American providers of electronic payment services.
- Jacob Barron, CICP, NACM staff writer