Steelworkers Seek Equal Opportunity for America's Green Industry

Leo W. Gerard

America is a great inventor. Think of it: the cotton gin, the airplane, the polio vaccine, the Internet, the laser. And American workers, the people who build the planes and manufacture the medications, are the most productive in the world.

That winning combination should assure America first place in the high-technology industry, including the crucial emerging area of clean-energy manufacturing. But it hasn’t. China has moved ahead.

That is because China violates a wide variety of its World Trade Organization (WTO) obligations. Last week, the United Steelworkers (USW) union filed a 5,800-page lawsuit detailing those violations and demanding remediation. The union is not seeking special deals or favorable treatment. What it wants is an equal opportunity for American scientists, engineers and workers. Equal opportunity for workers and industry in all nations theoretically is the reason WTO regulations exist. The USW wants those regulations enforced.

The case, filed with the U.S. Trade Representative, specifies how China uses illegal land grants, prohibited low-interest loans and other outlawed measures to advance its renewable-energy industries and facilitate export of those products at artificially low prices to places like the United States and Europe.

Like China, the U.S. aids renewable energy. The Recovery Act, for example, contained $80 billion for green-energy development. The American help, however, goes to renewable manufacturers producing for domestic consumption. That does not violate WTO regulations.

China provides hundreds of billions in aid and subsidizes industries that export, a strategy that kills competition internationally and breaks WTO rules. China’s stimulus package contained $216 billion for green-energy development. China has designated another $184 billion for green energy through 2020. And over the past four years, it spent $172 million on research and development.

China also violates international regulations by limiting export of material vital for green technology. China accounts for 93 percent of the world’s production of rare-earth elements like dysprosium and terbium that are essential for green technology. Over the past several years, China has increasingly restricted their export. That practice, illegal under WTO rules, forces some foreign companies to transfer manufacturing to China to gain access to these rare-earth elements.

Then American jobs are lost.

When those corporations move, China routinely – and illegally – mandates they transfer technology to their new Chinese partners. That often means research and development that was financed by U.S. taxpayers benefits China.

Then American investment and technology is lost.

In addition, China undervalues its currency, the renminbi. Significantly. Economists estimate that this manipulation makes Chinese exports to the United States 25 to 40 percent cheaper than they would be otherwise, and, conversely, it artificially raises the cost of U.S. exports to China by 25 to 40 percent. Nobel Prize-winning economist Paul Krugman explains it like this: “The consequences of this policy are also stark and simple: in effect, China is taxing imports while subsidizing exports, feeding a huge trade surplus. . . And in a depressed world economy, any country running an artificial trade surplus is depriving other nations of much-needed sales and jobs.”

Then American vitality is crippled by a massive trade deficit.

The USW appreciates that international trade has lifted millions of Chinese people out of abject poverty. But currency manipulation suppresses the wages of Chinese workers and spends Chinese wealth on massive purchases of U.S. currency instead of programs aiding Chinese people. Fair trade would benefit workers in both China and the United States.

The New York Times has repeatedly pointed out Chinese trade violations. Reporter Keith Bradsher described them at length in a story Sept. 8, titled “On Clean Energy, China Skirts Rules.”

Bradsher itemizes the illegal aid given to one green-energy company, Hunan Sunzone Optoelectronics, a two-year old solar-panel manufacturer that exports nearly 95 percent of its products to Europe and is pushing into the U.S. market with three new sales offices across the country. China’s improper support for Sunzone included turning over land to the company for a third of its market price. And it included government-controlled banks providing low-interest loans that the provincial government has promised to help Sunzone repay. Bradsher notes that this kind of aid in China’s government-controlled economy is typical.

But it means companies trying to manufacture in free-market countries can’t compete.

So they move. BP shut down solar panel manufacturing in Maryland this year and Evergreen Solar announced it would close its Massachusetts plant. Both are moving to China.

These companies aren’t going to file trade cases demanding enforcement of international regulations established to assure equal opportunity. Krugman explained, “In fact, the only organization willing to file a complaint was the steelworkers union. Why? As The Times reported, ‘multinational companies. . . have been wary of filing trade cases, fearing Chinese officials’ reputation for retaliating against joint ventures in their country and potentially denying market access to any company that takes sides against China.’”

The USW had to act to give American workers, scientists and industries the chance they deserve to fairly compete.

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Leo W. Gerard is the International President of the United Steelworkers