On Monday the United States filed a complaint with the World Trade Organization against China for its alleged use of unfair subsidies to boost exports from its auto industry.
China gave over $1 billion to its auto part and motor vehicle sectors from 2009 to 2011, which US authorities say has given those exporters an unfair advantage in foreign markets. The program provides considerable subsidies to auto and auto parts producers located in specific regions, called “export bases.” The US argues that these subsidies violate WTO trade regulations because they severely distort trade, especially for producers in the US that compete directly with Chinese auto companies.
“The Obama administration is committed to protecting the rights of nearly 800,000 American workers in our $350 billion auto and auto parts manufacturing sector,” said Ambassador Ron Kirk. “We insist upon having a level playing field on which our world-class manufacturers can compete.”
The US has recently spearheaded a series of WTO enforcement actions against China, including disputes regarding automobiles, poultry products, steel and “rare earths,” a key component in many high-tech industries. The upcoming elections look to place more pressure on the Obama administration to seem tough on China, against Mitt Romney’s pledges to forge free trade pacts and label China a currency manipulator.
