October 15, 2010

At Senator Gillibrand’s Urging, USTR To Investigate China’s Unfair Green Technology Trade Practices

Feds Will Have 90 Days To Formally Investigate The Claims And Propose Corrective Action

Washington, DC – At U.S. Senator Kirsten Gillibrand’s urging, the U.S. Trade Representative (USTR) will investigate alleged practices by the Chinese government that protect Chinese producers of renewable and alternative energy products – including wind turbines, solar panels, next generation batteries and energy efficient vehicles. Last month, the United Steelworkers (USW) filed a petition to the asserting that China has provided more than $200 billion in subsidies and support to their local firms in violation of their World Trade Organization (WTO) agreements. Senator Gillibrand immediately called on the USTR in investigate these practices and not allow China to grant its producers an unfair upper hand. The USTR will have 90 days for formally investigate the claims and propose corrective action.

“We must make sure that America’s renewable energy producers and manufacturers are on a level playing field with their Chinese counterparts,” said Senator Gillibrand. “New York is poised to seize tremendous economic opportunity in the renewable energy sector. However, we must ensure that American manufacturers and innovators are on a level playing field.  We cannot allow other countries to corner the market through unfair and illegal trade practices. I am pleased that the USTR will investigate these practices and urge them to take strong action to enforce our trade agreements to protect New York jobs.”

China has been accused by many observers of providing export subsidies for Chinese alternative energy firms and placing export restrictions on key components and resources needed by companies around the globe to develop green technologies.

America’s trade balance has shifted from a surplus in high-tech goods during the 1990s to a deficit of over $135 billion today. Currently, more than 70 percent of the components of clean energy systems are produced outside the U.S. China spends $51 million a day on clean energy manufacturing, using unfair subsidies and discriminatory tactics.

The USW petition lists a number of steps China has taken a number of steps that have the effect of unfairly damaging U.S. producers of clean energy technologies in favor of their Chinese counterparts.  Many of these actions appear to be violations of China’s accession agreements to the WTO and WTO membership rules. The petition allegations include that China is illegally blocking foreign access to green energy materials of production, providing subsidies for Chinese exports, reducing clean energy imports, and demanding foreign investors hand over trade secrets. 

For example, China effectively requires foreign firms seeking to engage in joint investment ventures in China to transfer technology to their domestic partners. This potentially undermines years of American investments in research into clean energy technology and makes America less competitive. Recent news reports have identified additional subsidies and benefits granted to Chinese exporters of green products, from exceptionally low interest loans to access to low-cost land in prime areas.