Today, Congressman Mike Michaud praised a move by the U.S. Trade Representative (USTR) initiating enforcement actions against China over the subsidies it's providing to its auto and auto parts sectors. In March, 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.
"The job impact in Maine and across the country is significant, and it's why I've been pushing this issue for months," said Michaud. "The health of our auto sector is critical to domestic manufacturing overall, and I'm pleased this action against China is being taken. Trade only works when those involved play by the rules. China is once again trying to game the system just like they did with our paper industry. We were able to combat that threat, and I'm hopeful this action today will lead to similar results that help protect Maine jobs and level the international playing field."
According to an announcement issued by the USTR, the United States has requested dispute settlement consultations with the Government of China at the World Trade Organization (WTO) concerning China's 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. China's program appears to provide export subsidies that are prohibited under WTO rules because they severely distort trade. The subsidies provide an unfair advantage to auto and auto parts manufacturers located in China, which are in competition with producers located in the United States and other countries. Based on publicly available documents, "export bases" made at least $1 billion in subsidies available to auto and auto-parts exporters in China during the years 2009 through 2011.
In February, Michaud wrote a letter to the president urging him to take action against $3 billion in duties placed by China on exports of U.S.-made automobiles. In July, the administration took initial action on this issue and announced today that it will request that the WTO form a dispute settlement panel to consider the case.