Today, Congressman Mike Michaud sent a letter signed by 154 of his colleagues to President Obama urging his administration to use all legal authority at its disposal to address China's unfair trade practices in the auto parts sector. According to a January report by the Economic Policy Institute, the U.S. auto parts industry directly or indirectly supports 2,077 jobs in Maine.
"Given China's track record, I'm not surprised they are illegally boosting their auto parts sector," said Michaud, Chairman of the House Trade Working Group. "Recent reports highlight that they are limiting our exports to their market, subsidizing their exports and engaging in other activities that boost their producers to the disadvantage of ours. This needs to be stopped, and China must be forced to play by international rules. Not doing so could jeopardize Maine jobs and hurt our economic recovery. I strongly urge the Obama Administration to take action."
The White House recently announced the creation of the Interagency Trade Enforcement Center (ITEC), which is designed to promote a more coordinated and effective response to China's predatory trade practices. Michaud and his colleagues are recommending that ITEC be tasked with addressing concerns in the auto parts sector as one its first and highest priorities. In addition to today's action, Michaud is currently working to gather signatures on a letter supporting the full funding of ITEC.
Nationally, China's predatory auto parts policies are having a particularly damaging affect on U.S. jobs, as noted in a January report that found that 1.6 million U.S. jobs could be at risk if China's practices are not curtailed.
The full text of the letter that Michaud and his colleagues sent today can be found below.
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.