News From USW: USW Cites Today's China Commission Findings: Subsidies Continue to Harm U.S. Manufacturers

PITTSBURGH--News From USW: Five years after the U.S. Congress granted Permanent Normal Trade Relations (PNTR) status to the Peoples Republic of China, it continues massive subsidies to its own industries that harm U.S. manufacturers, United Steelworkers President Leo. W. Gerard said today.

The 2006 annual report of the U.S.-China Economic and Security Review Commission released today provides further evidence that China has been seriously inconsistent in meeting the obligations it incurred upon its entry into the World Trade Organization.

“Anywhere you look, by almost any measure, the U.S.-China relationship is moving in the wrong direction,” Gerard said. “And there is no better evidence than at Goodyear, where 15,000 of our members have been forced out on strike by a company that has announced it plans to increase its tire imports ten-fold from Communist China, where workers are routinely oppressed.”

The Commission, charged by Congress to evaluate the national security implications of bilateral trade between the U.S. and China, found that China’s adherence to its many WTO obligations is spotty at best.

As part of its centralized industrial policy, China continues to use a wide range of subsidies to encourage the manufacture of goods for export and to secure foreign investment in its manufacturing sector, the report found.

Failure to enforce intellectual property rights is another particularly egregious example of China’s noncompliance with WTO rules, the report said. China fails to protect copyrights, inventions, brands, and trade secrets.

Gerard applauded a Commission recommendation that Congress urge the U.S. Trade Representative to press ahead aggressively with a WTO case against China for its failures to enforce property rights.

“Our manufacturers here at home are finding it harder and harder to compete against an economic system in China that is built on oppressed workers, subsidized inputs and capital, stolen intellectual property and other unfair advantages,” Gerard said.

China’s trade relationship with the United States is becoming increasingly imbalanced. China this year is expected to export $284.9 billion worth of goods to the United States, up from $243.4 billion in 2005. Total U.S. exports to China were $41.8 billion in 2005 and an estimated $56 billion this year.

China, meanwhile, has not accepted the mantle of responsible leadership that Congress expected when it ended the annual Most Favored Nation debate by awarding China PNTR status, allowing entry into the WTO, the report found.

It was expected that China would, among other things, adhere to the rules of a rules-based trading system, open its markets to American exporters, investors, businesses and farmers, become a member of the community of nations that promotes democratic government and human dignity and promote peace and stability in the world.

“Ending the annual Most Favored Nation debate was touted as a path to greater openness, democracy and freedom in China. The record proves the emptiness of these claims,” said Commission member George Becker, a retired USW international president.

Becker said China’s communist leaders continue to hold their citizens’ rights hostage to the leadership’s desire to maintain and increase power by governing virtually every aspect of their daily lives including child bearing, religious observation and Internet use. More than 30,000 Internet cops review electronic communications and email of China’s citizens.

“Workers’ rights are controlled with an iron fist,” Becker said. “Even in rapidly expanding areas where labor demand has increased, the ability of workers to fully share in the fruits of their labor is almost nonexistent.”

The complete U.S.-China commission 2006 annual report can be accessed at: www.uscc.gov/.