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Obama Acts to Halt Unfair China Trade in Auto Industry

Ford photo used by permission

The Obama administration today announced that it will take action against unfair trade practices by China in auto part exports to the United States and tariff barriers against the import of American-made cars to China. Meanwhile, over the weekend, the Boston Globe detailed Mitt Romney’s business and personal investments in Chinese manufacturing companies.

AFL-CIO President Richard Trumka says the administration’s action is:

Good news, not just for workers who rely on the auto industry, but for the entire American economy.

The Obama White House is launching an enforcement action against China at the World Trade Organization (WTO) for illegally subsidizing exports in its autos and auto parts sectors, a practice that is putting U.S. auto parts manufacturers and some 800,000 American workers at a competitive disadvantage and that is encouraging the outsourcing of auto parts production to China. Says Trumka:

With today’s action, the president is forcefully addressing the Chinese government’s predatory policies in the auto and auto parts sector, as well as demonstrating the administration’s willingness to self-initiate unfair trade cases where needed.

United Steelworkers (USW) President Leo Gerard says today’s action “[m]akes clear the president’s commitment to enforcing U.S. trade laws and fighting for American workers.”

In March, Obama formed the Interagency Trade Enforcement Center (ITEC) to more aggressively review trade violations, and today’s announcement is the latest in a series of enforcement actions the administration has taken to ensure that China complies with its WTO commitments. Says Trumka:

President Obama understands that allowing America’s manufacturing sector to grow and thrive is essential to a healthy and sustainable economy, and that is why this administration has brought twice the number of trade cases against China as the previous administration.

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.

However he says, "Much more needs to be done to reform our trading system and enforce our trade laws vigorously and consistently."

Romney, on the other hand, according to the Boston Globe, was “in charge of Bain Capital when the firm invested millions in a company that manufactured household appliances using cheaper labor in Dongguan, China.”

Romney also has between $500,000 and $1 million invested in a Bain Capital fund that has been used to purchase shares of GOME, a Chinese electronics company, according to the financial disclosure form Romney filed in June. That company—in which Bain has been one of the largest outside shareholders—is being sued by Microsoft Corp. for selling computers with pirated versions of its Windows and Office software.

The Globe also published a video of Romney at a high-dollar fundraiser that shows the Republican presidential candidate telling contributors and potential donors:

When I was back in my private-sector days, we went to China to buy a factory there....It employed about 20,000 people. And they were almost all young women between the ages of about 18 and 22 or 23. They were saving for potentially becoming married, and they work at these huge factories.

Romney said the women were packed into dormitories, 12 per room in bunk beds, and only earned a “pittance.”

Read "Romney Rips Obama on China Despite Investments." 

Gerard notes, “The fight for fair trade is going to be a key issue in this year’s elections.”

Fighting for fair trade doesn’t mean talking tough one day, but shipping jobs overseas the next. Today’s actions make clear whose side the president is on.

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