The Office of the U.S. Trade Representative has accepted a United Steelworkers petition and initiated a Section 301 investigation into Chinese policies on trade and investment in environmentally friendly technologies. However, USTR also said it would wait 90 days to determine whether to request dispute settlement consultations on this issue with China at the World Trade Organization. The delay suggests that there is a political dimension to the decision and leaves open the possibility that USTR could ultimately decide not to pursue the matter at all.
According to USTR, the USW petition alleges that China employs a wide range of WTO-inconsistent policies that protect and unfairly support its domestic producers of wind and solar energy products, advanced batteries, energy-efficient vehicles and other products as it seeks to become the dominant global supplier of these goods. These policies allegedly include export restraints, prohibited subsidies, discrimination against foreign companies and imported goods, technology transfer requirements and domestic subsidies causing serious prejudice to U.S. interests. USTR has now agreed to investigate whether these alleged acts, policies and practices deny U.S. rights or benefits under the General Agreement on Tariffs and Trade 1994, the WTO Subsidies and Countervailing Measures Agreement and China’s protocol of accession to the WTO.
There are several points to note about the timing and nature of USTR’s announcement, all of which should be viewed in the context of the upcoming congressional elections and the fact that trade with China has been a major campaign issue with key constituencies. Read more here.