US lawmakers call on Obama administration to act on China trade

Washington (Platts)--25Oct2011/226 pm EDT/1826 GMT

US House lawmakers on both sides of the aisle Tuesday blasted the Obama administration for failing to take a strong enough stand on trade issues with China, including Beijing's clean-energy subsidies.

In a hearing of the House Ways and Means Committee, Democrats and Republicans took aim at two senior Obama administration trade officials, saying the administration had done too little to level the playing field. The committee is responsible for overseeing trade matters.

"Where is the enforcement?" said Representative Jim McDermott, a Washington Democrat.

"They have a dragon that goes out, made out of paper, everybody waves it around, and fire crackers go off. You remind me of that," he said. "Jumping around meaning nothing, with a bunch of firecrackers over in the bushes, but nothing is going on."

The criticisms came from Republicans on the panel as well.

"You believe that you all have the tools necessary to deal with this administratively interacting with the [World Trade Organization], why aren't you moving quicker?" said Pat Tiberi, an Ohio Republican.

The hearing touched on a range of trade issue with China, including subsidy disputes, US complaints over Chinese currency valuation and the Chinese enforcement of intellectual property rights.

The hearing comes a week after a group of seven US solar manufacturers formally petitioned the US International Trade Commission and the Department of Commerce to impose duties on Chinese-made crystalline polysilicon solar cells and panels. The companies charged that the Chinese government provides illegal subsidies to the country's domestic solar manufacturers.

A Chinese company warned that if the US imposes duties it could start a trade war.

Lael Brainard, the Department of Treasury's under secretary of international affairs, said the administration was taking action.

"When engagement proves insufficient, this administration will continue to be more aggressive than any of its predecessors in using all appropriate tools to address the particular problem, such as going after China's unfair trade practices by taking China to the WTO and vigorously applying US trade remedy laws," Brainard said.

The US Trade Representative has successfully challenged China before the WTO, forcing Beijing in June to halt certain subsidies to its domestic wind-energy industry. In addition, USTR earlier this month warned it may take action over its charge that China had failed to report 40 clean-energy subsidies to WTO, as it is required.

Deputy US Trade Representative Demetrios Marantis pointed to those actions as evidence that the administration was actively taking action to bring China to account.

"We also brought China to the WTO to answer for prohibited wind-power equipment subsidies worth hundreds of millions of dollars, which China has now terminated," Marantis said.

However, Marantis acknowledged that the task would be difficult.

"We see our significant challenges for what they are, and we know that we have steep and difficult road ahead," he said.

--Derek Sands, derek_sands@platts.com

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