Earlier this month, the United Steelworkers Union filed a 5,800 page petition against China through the office of the U.S. Trade Representative, claiming violations of the World Trade Organization rule on green technology. According to the Wall Street Journal, the major complaint is that:
Beijing unfairly subsidizes and protects its green-tech industries to the detriment of American companies and their union-represented employees. The filing falls under Section 301 of U.S. trade law, which would effectively force USTR [US Trade Representative] to take China to court at the World Trade Organization if the Administration accepts the union's complaint.
The WSJ concedes that the union's allegations are not "necessarily crazy...Beijing does offer a lot of support to its green-tech industry, and some of its regulations probably run afoul of its WTO obligations."
The Obama Administration has 45 days to decide whether to let the case proceed. That deadline happens to be October 24, on the eve of the congressional midterm. The timing creates, what the WSJ calls a ""big trade-politics headache for Mr. Obama."
If the Administration rejects the petition, President Obama will irritate a key Democratic constituency right before an election. If the White House lets the case go forward, it risks upsetting whatever delicate balance officials are trying to strike in the broader U.S.-China relationship.
The politicians have not been as muted as the Administration. TheStreet quoted Senator Christopher J. Dodd (D-Conn.): "There is no question that the economic and trade policies of China represent clear roadblocks to our recovery...China does basically whatever it wants, while we grow weaker and they grow stronger." The petition created by the United Steelworkers Union is also at odds with other American businesses. If President Obama supports the petition it could be detrimental to American companies. According to TheStreet, "While the United Steelworkers are enraged at China's trade practices, green energy companies have been quiet on the issue. Whether it is a U.S. solar company... or a U.S. company tied to the wind energy sector..., it is not clear that playing hardball with China is the way forward."
Seeming to reflect the uncertainty of how the petition will play out, the solar trade organization Solar Energy Industries Association (SEIA) said that it "takes this issue seriously and is closely following the review process"--whatever that means. SEIA did state the obvious that:
Regardless of the outcome of this petition, it is clear that U.S. domestic clean-energy policies need to be strengthened. We have fallen behind European and Asian nations and need to develop strong and stable clean energy policies that stimulate the U.S. solar market, address financing challenges, expand domestic manufacturing, grow domestic jobs and increase clean energy exports... We shouldn't let other nations take the lead in an industry that the U.S. invented. This issue is a reminder that it's now time to reclaim our leadership position in the global clean energy economy.