Critz Praises the U.S. WTO Challenge to China's Unfair Export Subsidies on Auto and Auto Parts

Press Release

Congressman Mark S. Critz (PA-12) praised the decision today by the Obama Administration and the U.S. Trade Representative to challenge China's unfair export subsidies to its auto and auto parts manufacturers at the World Trade Organization (WTO).

"China's unfair auto and auto parts subsidies disadvantage American workers and manufacturers, and these illegal practices must be stopped immediately," said Congressman Critz. "We must stand up for the nearly 800,000 American workers in our auto and auto parts manufacturing sector, and fight to ensure that they have a level playing field on which to compete globally."

In March 2012, Congressman Critz and other Members of Congress urged the Obama Administration to move forward with an auto parts trade enforcement action. The group of lawmakers expressed "serious concern about China's unfair practices in the auto parts sector," and encouraged the Administration "to use all existing authority under the law to preserve and protect U.S. production and jobs."

China has designated certain municipalities to be auto and auto parts "export bases" through which it provides funds and support to auto and auto parts manufacturers on the basis of their export performance. The auto and auto parts "export bases" use central and local government funds to provide a variety of export-contingent subsidies to auto and auto parts exporters such as grants, tax preferences and interest rate subsidies, in apparent violation of Article 3.1(a) of the WTO Agreement on Subsidies and Countervailing Measures. 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 2010, the United States challenged China's local-content subsidies to its wind power equipment manufacturers, resulting in China's revocation of the subsidy program. In three separate WTO disputes initiated between 2009 and 2011, the United States is challenging unfairly imposed duties China places on, U.S. automobiles; U.S. steel products; and U.S. poultry products. Earlier this year, the United States successfully concluded a challenge to China's export restraints on key industrial raw materials and, in March, launched a dispute against China's export restraints on "rare earths," a class of raw materials used in high-tech and clean-energy products.

"In addition to this and other WTO challenges, Congress must do its part to strengthen American manufacturing and create jobs," added Congressman Critz. "Immediately passing the Currency Reform for Fair Trade Act (H.R. 639), which will hold countries like China accountable for currency manipulation, will create up to 2.25 million new jobs and reduce our budget deficit by over $70 billion per year. It's time for Republican leaders to stop blocking this legislation and to help level the playing field for American workers and businesses."

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