The New York Times reported this week that the United Steelworkers (USW) filed a petition with the USTR (United States Trade Representative) objecting to the extensive subsidies that the Chinese government has offered to its clean tech industry.
As Keith Bradsher has reported, the USW has accused China of violating World Trade Organization (WTO) free trade rules by illegally subsidizing exports of clean energy equipment.
Surprise, surprise, China is promoting its clean tech industry!
As I commented a year ago, China is determined to build a world-class clean tech industry and is using the financial, policy and technological tools at its disposal to realize that goal.
It's time that the U.S took the necessary steps to promote its clean tech industry too, rather than tolerating the continuance of a U.S. clean-tech vacuum that now has become the playing field for an unproductive game of political football.
China subsidizing its manufacturing industry is old news. Last year I assisted the Canadian aluminum extrusion industry as it successfully petitioned the Canadian International Trade Tribunal (CITT) to impose antidumping and anti-subsidy tariffs on the Chinese aluminum extrusion industry, just one of a plethora of anti-subsidy cases that have been pursued against China in recent years.
Of course we should insist that those subsidies that violate China’s commitment under the WTO be eliminated. But we are distracting ourselves from our own responsibilities by pretending that our increasingly lackluster competitiveness in clean-tech is wholly the result of China's unfair trade practices: the U.S. government must act decisively to put in place the necessary policies that will enable our clean-tech industry to prosper here in the U.S. and around the world. Without an effective renewable energy policy that meets head-on the increasingly stiff competition that China’s clean tech industry poses, we are destined to fall further and further behind.
It may be cold comfort for U.S. manufacturers to know that Chinese companies themselves are often disadvantaged by Chinese policy in the clean tech industry. As I will be discussing next week, Beijing is favoring government-controlled clean tech enterprises in its effort to accelerate the development of solar power in China.
While we must remain vigilant in insisting that China plays by the rules of international trade that it has acceded to, we must not allow China’s excessive propensity for subsidizing its industries to obscure our clear failure to put in place the policies that would allow us to effectively compete with China.
Lou Schwartz, a lawyer and China specialist who focuses his work on the energy and metals sectors in the People's Republic of China, is a frequent contributor to Renewable Energy World. Through China Strategies, LLC, Lou provides clients research and analysis, due diligence, merger and acquisition, private equity investment and other support for trade and investment in China's burgeoning energy and metals industries. Lou earned degrees in East Asian Studies from Michigan and Harvard and a J.D. from George Washington University. He can be reached at email@example.com.