Despite today’s visit with Chinese official, Obama pushes for agency that could advance trade war

Source: John McArdle • E&E • Posted: Tuesday, February 14, 2012

A group of U.S. solar manufactures is hoping that President Obama will use a high-profile meeting with Chinese Vice President Xi Jinping at the White House tomorrow to defuse an escalating renewable energy trade war between the two countries.

But if that is the president’s intent, he certainly didn’t signal it today when he released a 2013 budget proposal that includes $26 million for a new Interagency Trade Enforcement Center. The new body, which will be known as ITEC and funded in large part through the Department of Commerce’s International Trade Administration, is expected to be the centerpiece of an effort by the Obama administration to take a tough new stance when it comes to investigating unfair trade practices.

A release from Commerce today on its 2013 budget priorities specifically names China as a target for ITEC’s future efforts.

The center “will significantly enhance the Administration’s capabilities to aggressively challenge unfair trade practices around the world, including in China,” the release says. “ITEC will represent a more aggressive ‘whole-of-government’ approach to addressing unfair trade practices, and will serve as the primary forum within the federal government for executive departments and agencies to coordinate enforcement of international and domestic trade rules.”

Obama first called for the new trade enforcement center in his State of the Union address last month, and he also used that speech to specifically call out the Chinese (Greenwire, Jan. 25).

The new budget line for ITEC comes three days after the U.S. International Trade Commission made a preliminary ruling that illegally subsidized Chinese and Vietnamese wind tower exports and illegal Chinese dumping practices have harmed the United States’ domestic wind tower industry. The unanimous ruling opens the door for the Department of Commerce to move forward with a case that could eventually impose tariffs on Chinese and Vietnamese wind towers.

That investigation is taking place at the same time that the Commerce Department and ITC are investigating complaints from a handful of U.S. solar manufacturers that China is illegally subsidizing and dumping solar panels on the U.S. market.

Adding to concern about a possible trade war is the fact that the Chinese government has responded by launching its own probe targeting U.S. subsidies and government policies in the solar, wind and hydroelectric sectors.

A bipartisan group of congressional leaders has voiced its support for the solar panel complaint, which is being spearheaded by the U.S. arm of the German-owned company SolarWorld. But a group of about 150 U.S. and Chinese panel makers and smaller U.S. solar installers has said the complaint could create a full-blown trade war in the renewable market.

The group, which calls itself the Coalition for Affordable Solar Energy (CASE), believes that new tariffs could stifle the growth of solar power in the United States and end up costing tens of thousands of U.S. jobs while protecting a few solar manufacturers that have had trouble competing in the solar market (Greenwire, Jan. 30).

Today, the CEOs of 45 of CASE’s American members signed a letter urging Obama to use his visit with Xi to let cooler heads prevail during a “crucial time” in the development of the solar industry.

“We are hopeful that you and Vice President Xi will discuss the mutual interests that America and China have in regard to expanding the use of solar technology,” the CEOs wrote. “This is especially important in light of the potential for a mutually destructive trade war as both nations consider tariffs and duties on each other’s imports of solar technology. We believe that you and Vice President Xi have a unique opportunity to avoid such a trade war and find agreement that benefits the solar industries in both countries.”

SolarWorld USA spokesman Ben Santarris said today that there is no reason why anyone would want to stop the “fair and open investigation” that is being conducted by Commerce and ITC.

“There’s no conceivable rationale for preventing experienced federal agency professionals from conducting their careful investigations and letting them proceed to whatever conclusions the evidence leads them,” Santarris said.

He added that Xi’s visit is a chance for the White House to “insist that the Chinese government and its industries hold to the requirements as well as enjoy the benefits of membership” in the World Trade Organization.