U.S. Senator Debbie Stabenow today led 188 Members of Congress in urging President Obama to confront China's predatory practices that harm American auto parts manufacturers and cost Michigan jobs. A new report released in January showed that through a number of violations of international trade rules, China has increased the number of auto parts it imports into the United States by 900% since 2000.
In a letter to President Obama, Members of both the House and Senate urged the Administration to use the Interagency Trade Enforcement Center President Obama recently established to address China's predatory policies in auto parts. President Obama established the new trade enforcement unit on February 28th to combat other nations' violations of trade rules. Senator Stabenow had introduced legislation to create such a unit for years.
In the letter, Members said: "We are writing to express serious concern about China's unfair practices in the auto parts sector, and to encourage your Administration to use all existing authority under the law to preserve and protect U.S. production and jobs.... Given its importance, the Administration's vigilance in addressing China's harmful policies now, while we can still change this one-way street in trade, is essential. American companies and workers can compete anywhere when the playing field is level."
While Stabenow was the lead author of today's letter in the Senate, Congressman Sandy Levin, also of Michigan, led the letter in the House.
Full text of the Stabenow letter is below.
March 16, 2012
President Barack Obama
The White House
Dear Mr. President:
We are writing to express serious concern about China's unfair practices in the auto parts sector, and to encourage your Administration to use all existing authority under the law to preserve and protect U.S. production and jobs.
Recently released reports have highlighted the vast array of policies China's government uses to advantage its producers, such as limiting our exports to their market, subsidizing their exports to ours, and assisting their producers to the disadvantage of ours. The Chinese Government also imposes restraints on the export of key raw materials needed for the production of parts. In that regard, the United States recently won a major decision challenging some of those restraints at the World Trade Organization. We must build on this victory and begin addressing other restraints on materials, including those critical to the production of autos and auto parts. China also coerces U.S. companies in China to transfer their technologies to Chinese partners.
These tactics are working. Chinese auto parts exports are rapidly growing and have increased almost 900 percent since 2000. An unfortunate result of China's predatory and protectionist policies in the auto parts sector has been to begin to sever the traditional link between auto assemblers, parts producers, and aftermarket producers. Thus, while our nation's auto producers are recovering, the auto parts sector faces serious challenges.
We cannot wait until further damage is done. China has signaled its commitment to continue this approach in its recently released twelfth Five-Year Plan and other government directives. To level the playing field for U.S manufacturers and their workers, we must develop and implement a much more assertive and comprehensive strategy. Your announcement of the Interagency Trade Enforcement Center to promote a more coordinated, effective response to China's unfair trade practices is a major step toward such strategy. Addressing Chinese predatory policies in auto parts should be one of the Enforcement Center's first and highest priorities.
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. China has virtually closed its market to our auto parts exports and continues to take actions to further limit access. Given its importance, the Administration's vigilance in addressing China's harmful policies now, while we can still change this one-way street in trade, is essential. American companies and workers can compete anywhere when the playing field is level.