China's Predatory, Protectionist Practice the Target
Please note the links to supportive material at end
(Pittsburgh) - Leo W. Gerard, International President of the United Steelworkers (USW), issued this statement today:
We're here today to issue a call to action to support and defend America's auto parts sector from China's predatory, protectionist and illegal trade practices. This is a fight for good, family-supportive jobs and the economic vitality of communities all across this country. It's time to stand up to China and say: enough is enough. You've taken enough of our jobs.
The Obama Administration's leadership in combining government assistance to General Motors (GM) and Chrysler and policies like 'Cash for Clunkers' helped the auto assembly sector weather the economic crisis. Government action, coupled with the ingenuity, dedication and hard efforts of the workers has helped stabilize and revitalize this important sector of our economy.
Unfortunately, the success of America's auto assemblers has not translated into the same level of success for the hundreds of thousands of workers directly employed making the parts and components for those companies. As the assembly side of the industry has started to return to prosperity, employment in the parts sector has not fared as well and imports of parts - too many of them unfairly traded -- has grown exponentially.
Auto parts are produced all across America - by carpet weavers who make the floor mats to the tire builders who supply the tires to the brake specialists and hundreds of thousands of other workers who supply components to the industry. Millions more benefit from the jobs and economic activity created in this sector as well.
These are jobs and an industry worth fighting for. Some 350,000 Steelworkers make products that can end up in an auto - steel, rubber, aluminum, plastics and other products. The health of the sector is vital, as is the assembly of vehicles here in this country.
Since China joined the World Trade Organization, exports of its auto parts to the U.S. has skyrocketed by almost 900 percent, causing a deficit estimated to have exceeded $10 billion last year. That deficit is growing at more than twice the rate as the deficit with other countries. Left unchecked, at current growth rates, the deficit will top $100 billion by 2020.
During this time, U.S. employment in the sector has declined by 45 percent - a loss of almost 400,000 jobs. Three-quarters of all auto sector jobs are workers making parts. And, every one of those direct jobs in the auto parts sector supports as many as five other jobs in the community, making it one of the top job-generating sectors in the country.
The continued rise of parts imports isn't simply a result of ‘competitive' factors, but is a consequence of ‘anticompetitive' factors as well. Like in many other industries, China's government is targeting this sector with a combination of predatory, protectionist and illegal practices designed to advance its own interests at the expense of others. This is not an unsubstantiated accusation. They've put this in writing, in their most recent Five-Year Plan, developed by the Chinese Communist Party and carried out at all levels of their country.
Our union members work hard and play by the rules. They don't expect handouts, but they do expect that their government will help fight for their jobs when others break the rules. And, that's just what China's government is doing. But, let me be clear: China's workers also work hard and deserve our respect. They did not create this problem; it's a result of their government's policies. Indeed, Chinese workers have been demanding greater rights and want their own standard of living to rise. We want that as well. With fair rules, properly enforced, we can all succeed.
China subsidizes their producers with cheap inputs, but also in the sale of their products all across the globe. They require that our companies transfer key technologies to help accelerate their development. China requires that our companies create joint ventures with their producers, helping to teach them to become world-class producers. They require that, for key products like new energy vehicles, that to sell there, you have to produce there. This list of policies and efforts to promote their interests, at the expense of ours, goes on and on and creates a competitive juggernaut.
Last year the Chinese people bought almost 18 million cars, but the government would only allow about 100,000 of our vehicles into their market and only allowed us to sell about $1 billion of auto parts that go into those 18 million vehicles. Like in so many other sectors, it's a one-way street.
In past years, we have proudly filed numerous cases to combat foreign unfair trade practices and the government has partnered with us to pursue our rights. Now we're looking to the government to devote the resources necessary to take this case forward. We commend President Obama for launching the Interagency Trade Enforcement Unit and look forward to working with them to determine how best to protect our rights in this area as well. China has a plan. Our country needs to have a response and the President has made clear that trade enforcement is one of his highest priorities.
This effort is a test. A test of whether we're willing to tell China that our relationship is mature enough that we cannot only cooperate where it's vital, but disagree where we must. A test of whether our laws are up to the task of leveling the playing field. It will also test whether companies, communities and workers across the country will come together and let China know that we live up to the rules and we expect them to as well.
More work is needed to pursue this case, but we can't afford to let China continue its unfair trade practices. This is a call to action.
This Administration has done more to enforce America's trade laws than has occurred in the past 20 years. But, we've only scratched the surface. Now is the time to act, to build on the evidence we're outlining today and make it clear that this is a sector we don't intend to let them steal from us.
The USW represents 850,000 workers in North America employed in many industries that include metals, rubber, chemicals, paper, oil refining and the service and public sectors. For more information: http://www.usw.org/.
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China's Trade Violations Contribute to Loss of More Than 400,000 Jobs in U.S. Auto Supply Chain, Reports Conclude (http://assets.usw.org/releases/china-trade/AAM-auto-parts-National-release-SC-Jan-30-2012.pdf)
The Attack on the American Auto Parts Industry (http://assets.usw.org/releases/china-trade/Auto-Parts-White-Paper-Final.pdf)
Statement by UAW President Bob King on loss of auto supply jobs (http://assets.usw.org/releases/china-trade/UAW-Statement-on-Loss-of-Auto-Supply-Jobs-FINAL-1-30-12.pdf)
Chinese Government Support In The Auto And Auto Parts Sectors Threatens U.S. Jobs And Industrial Base (http://assets.usw.org/releases/china-trade/Final-SS-Press-Release.pdf)
The Attack on the American Auto Parts Industry (http://assets.usw.org/releases/china-trade/Field-Auto-Parts-Presentation-Final.pdf)
Subsidies to Chinese auto-parts industry puts U.S. auto-parts jobs at risk, two new EPI studies find (http://assets.usw.org/releases/china-trade/FINAL-EPI-auto-parts-press-release.pdf)