Targeting China, Obama launches unit to probe unfair trade practices

Source: John McArdle • E&E • Posted: Thursday, January 26, 2012

The petitioners in a pair of ongoing federal cases involving imported Chinese renewable energy products today cheered the tough stance President Obama took on unfair Chinese trade practices during his State of the Union address last night.

“I will not stand by when our competitors don’t play by the rules,” Obama said last night. “We’ve brought trade cases against China at nearly twice the rate as the last administration — and it’s made a difference.”

But, Obama said, the United States needs to do more to ensure a level playing field. “It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidized,” he said.

To address the problem, Obama said he would be creating a new Trade Enforcement Unit that would be charged with investigating unfair trade practices. The president specifically singled out China as a likely target of those probes.

“We’re pleased that the president recognized the pervasive unfair trade problems that exist with China that affect a variety of industries including the producers of products for the green energy industry,” said Alan Price, a lawyer with the D.C. law firm Wiley Rein.

Price is representing a coalition of four U.S. wind tower manufacturers who last month brought antidumping and countervailing duty complaints against China before the U.S. International Trade Commission and Department of Commerce.

“China has targeted the green energy industry and a number of other strategic industries, and it’s important that the United States act to protect domestic jobs,” Price said. “We look forward to working with the administration and Congress in addressing these problems.”

The investigations over wind tower imports launched by the federal government this month come as a group of U.S. solar manufacturers has called for new import duties to be placed on cheap Chinese solar panels.

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 — and ITC and Commerce are also investigating the issue to decide whether to institute such tariffs.

This morning, the coalition that filed the complaint charged that China has stepped up its export of solar panels and modules to the United States in an attempt to move as much product as possible into the country ahead of Commerce’s tariff decision next month.

SolarWorld and its allies initiated their case in October, and if Commerce chooses to impose duties, they could retroactively apply to imports dating from mid-November onward.

Using Customs and Border Protection statistics, the group estimates that China has increased its export of solar panels by 110 percent since July 2011. The group pointed to one Chinese manufacturer who is a respondent in the ongoing trade investigations, whose exports surged 76 percent in November, compared with October.

Tim Brightbill, a lawyer for the coalition of solar manufacturers who also works at Wiley Rein, applauded the Obama administration today for its effort to bring more World Trade Organization cases against China, saying those efforts have helped level the playing field. But he also said there is more that a body like the new Trade Enforcement Unit could accomplish.

“Unfortunately those WTO cases also take a lot of effort both by government and the private industry,” Brightbill said. “Hopefully this enforcement group can find creative ways of using the WTO process and the multilateral process to enforce our trade laws and to hold China and other countries accountable for trade law violations.”

Looming trade war?

As the solar and wind tower investigations move forward, the Chinese government has responded by launching its own probe targeting U.S. subsidies and government policies in the solar, wind and hydroelectric sectors.

In the wake of the moves and escalating rhetoric by the two governments, several renewable energy industry executives have increasingly voiced concern about the potential of a full-blown trade war in the renewable market.

Kevin Lapidus, general counsel for SunEdison, a Belmont, Calif.-based solar project developer, said today that he hopes the solar industry does not get swept up in the larger issue of U.S. trade relations with China.

Lapidus, who serves as a spokesman for a coalition of solar manufactures who have joined together to oppose the SolarWorld complaint, said the solar industry needs to be judged on its own merits. Lapidus’ group, the Coalition for Affordable Solar Energy, has said SolarWorld brought its complaint to serve the company’s own interests and not those of the larger U.S. solar manufacturing sector.

In that sense, he said, he welcomes the Commerce investigation because he believes the facts will show that new tariffs won’t help the industry grow.

“This is an industry that’s doing well on its own,” Lapidus said. “Not only are we adding jobs [in the United States] but we are exporting. In 2010 we exported $5.6 billion of goods. Our industry is growing, we don’t need SolarWorld’s so-called tariff or tax or intervention.”

Lapidus said CASE is working to encourage the Obama administration to engage in a negotiated resolution with the Chinese government and with industry participants as a way to resolve the solar trade case.