USTR Launches 301 Investigation of China's Green Trade Technology Practices
The Office of the U.S. Trade Representative announced on October 15, 2010 that the U.S. has initiated an investigation under Section 301 of the 1974 Trade Act with respect to acts, policies and practices of the Government of China affecting trade and investment in green technologies.
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(The International Trade Administration states that Section 301 is the principal statutory authority under which the U.S. may impose trade sanctions on foreign countries that either violate trade agreements or engage in other unfair trade practices. Section 301 proceedings can either be initiated by petition or self-initiated by USTR.)
Investigation Initiated in Response to United Steelworker’s Petition
The investigation has been initiated in response to a petition filed by the United Steelworkers on September 9, 2010. (See ITT’s Online Archives or 09/10/10 news, 10091015, for BP summary.)
The petition alleged that China employs a wide range of World Trade Organization (WTO)-inconsistent policies that protect and unfairly support its domestic producers of wind and solar energy products, advanced batteries and energy-efficient vehicles, among other products, as China seeks to become the dominant global supplier of these products.
According to the petition, these policies include export restraints, prohibited subsidies, discrimination against foreign companies and imported goods, technology transfer requirements, and domestic subsidies causing serious prejudice to U.S. interests. The petition further alleges that China’s policies have caused the annual U.S. trade deficit in green-technology goods with China to increase substantially since China joined the WTO, making China the top contributor to the U.S. global trade deficit in the sector.
Will Take 90 Days to Verify/Improve Petition, Take Supported Claims to WTO
In light of the number and diversity of the acts, policies, and practices covered by the petition, and after consulting with the petitioner, USTR has decided to delay for up to 90 days the request for consultations with the Government of China for the purpose of verifying and improving the petition.1 During this period, USTR will seek information and advice from the petitioner and advisory committees and take into account public comments submitted in response to a Federal Register notice.
USTR Kirk states, “For those allegations that are supported by sufficient evidence and that can effectively be addressed through WTO dispute settlement, we will vigorously pursue the enforcement of our rights through WTO litigation.”
Because the issues covered in the China-Green Technology investigation involve U.S. rights under the WTO Agreement, any consultation request will be made under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and unless consultations result in a mutually acceptable resolution, the U.S. Trade Representative will request the establishment of a WTO panel under the DSU.
Kirk Says Green Technology of Vital Interest to U.S., Future Jobs
USTR Kirk says that this is a vitally important sector for the U.S. as green technology will be an engine for the jobs of the future.
House Majority Leader Says Action Needed to Ensure Level Playing Field
After the announcement, House Majority Leader Hoyer (D) released a statement applauding USTR’s action, stating it is a necessary step to ensure that U.S. workers, manufacturers, and businesses in the clean energy sector are competing on a level playing field.
1Under the Section 301 statute, USTR may request consultations with the foreign country concerned at the time an investigation is initiated. The statute also provides, however, that the USTR, after consulting with the petitioner, may delay for up to 90 days any request for consultations for the purpose of verifying or improving the petition.