WASHINGTON, D.C.— After U.S. Sen. Sherrod Brown (D-OH) led 188 Members of Congress in urging the Obama Administration to confront China’s predatory practices that put Ohio auto parts jobs at risk, President Barack Obama will announce today on a visit to Ohio that the U.S. Trade Representative (USTR) will file a new WTO case against China challenging Chinese subsidies to exporters of autos and auto parts.  The Administration will request an International Trade Commission (ITC) investigation of Chinese auto parts imports.

China’s cheating in the auto parts trade places more than 1.6 million American jobs at risk, according to new reports that were recently unveiled. Since the U.S. established permanent normal trade relations with China and China joined the World Trade Organization in 2001, the United States’ deficit with China on auto parts trade has increased nearly tenfold, from $1.03 billion in 2001 to $9.95 billion in 2011.

“We can’t allow the gains made by American automakers—who depend on Ohio parts suppliers and workers—to be undercut by Chinese cheating,” Brown said. “With the auto industry on the rebound in Ohio—thanks in large part to the rescue plan—we must work aggressively to protect these good-paying manufacturing jobs. Saving Ohio auto jobs requires enforcing our trade laws, especially as China ramps up subsidies in strategic industries like auto parts. Ohio’s manufacturing industry is at risk of faltering if we allow China to continue to cheat and break trade laws. This announcement is the type of proactive approach we need to preserve Ohio and America’s auto parts sector.”

In a March 2012 letter to President Obama, Brown—who was joined by U.S. Sens. Debbie Stabenow (D-MI), Robert P. Casey, Jr. (D-PA), and U.S. Rep. Sander Levin (D-MI) in leading the Members of Congress on the letter—urged the Administration to use the recently-established Interagency Trade Enforcement Center to address China’s predatory policies in auto parts. President Obama established the new trade enforcement unit on February 28th to combat other nations’ violations of trade rules.

In their letter, the Members said: “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…. 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.”

According to a 2010 study by the Center for Automotive Research, more than 792,000 Ohio jobs depend on the auto industry; this figure includes 120,285 direct employment (people employed directly by auto industry: 39,685 by automakers and 80,600 by parts suppliers); 276,330 indirect employment (jobs indirectly employed by automakers or parts suppliers: 167,891 by automakers and 108,439 by parts suppliers); and 395,981 spin-off employment (expenditure-induced employment resulting from spending by direct and intermediate employees; 221,018 by automakers and 174,963 by suppliers). A 2011 study by the Center for Automotive Research found that 164,654 jobs in 2009 would have been lost in Ohio if the auto industry had not been rescued.

In January 2012, Brown also joined the United Autoworkers and the Center for Automotive Research (CAR) to unveil new data outlining employment projections for Ohio’s auto industry. He noted that the U.S.-China auto parts deficit grew to $10.2 billion in 2011.

Brown is the author of the Currency Exchange and Oversight Reform Act, legislation that represents the biggest bipartisan jobs bill—at no cost to U.S. taxpayers—passed by the Senate last year. The full text of the March 2012 letter is below.

 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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