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Letter to President Obama - China's Unfair Practices in Auto Industry


Location: Washington, DC

Today, Congressman Joe Donnelly and colleagues sent a letter to President Obama urging him to end the Chinese government's illegal trade practices that harm American auto parts makers. The Chinese government's practices make exports of Chinese auto parts to the U.S. artificially cheap and, as a result, put American auto parts manufacturers at a competitive disadvantage.

"We have to crack down on the Chinese government's unfair practices. In this case, these practices are aimed squarely at the U.S. auto parts industry--an industry that has employed generations of Hoosiers," said Donnelly. "We have the best workforce in the world, so we need to stand up for it and protect it against these illegal trading practices."

Several recent reports show that the Chinese government's trade violations have contributed to the loss of more than 400,000 jobs in the U.S. auto supply chain since 2000. These reports also show that, if left unchecked, these practices would put an additional 1.6 million jobs in danger. The Chinese government's violations have contributed to an increase in the auto parts trade deficit between the U.S. and China by more than 850 percent since 2001. You can read these reports on the website for the Alliance for American Manufacturing (AAM).

U.S. auto-parts products include tires, engines, electrical and electronic equipment, among other things.

The text of Donnelly's and his colleagues' letter to President Obama to protect auto parts manufacturing jobs is below.

March 16, 2012

President Barack Obama
The White House
Washington, D.C.

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.


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