Action on Chinese auto parts could help over 2,000 Mainers

By U.S. Rep. Mike Michaud
(D-Maine)
    It seems a week doesn’t go by without learning about a new way that China is skirting international law to boost their industries to the detriment of ours here in the United States. We saw it happen to our paper industry in Maine, and now it’s impacting thousands of jobs in our state’s auto parts sector.
    Recently released reports have highlighted the vast array of policies China’s government uses to advantage its producers, such as limiting our exports to their market, subsidizing their exports, and assisting their producers to the disadvantage of ours. The Chinese government also imposes restraints on the export of key raw materials needed for the production of auto parts. In that regard, the U.S. recently won a major decision challenging some of those restraints at the World Trade Organization. But we must build on this victory and begin addressing other restraints on materials, including those critical to the production of autos and auto parts. China also coerces U.S. companies in China to transfer their technologies to Chinese partners.
    Unfortunately, these tactics are working.
    Chinese auto parts exports are rapidly growing and have increased almost 900 percent since 2000. An unfortunate result of China’s predatory and protectionist policies in the auto parts sector has been the breaking of the traditional link between auto assemblers, parts producers, and aftermarket producers. So, while our nation’s automakers are recovering, the auto parts sector faces serious challenges.
    We cannot wait until further damage is done. China has signaled its commitment to continue this approach in their government directives. To level the playing field for U.S manufacturers and their workers, we must develop and implement a much more assertive and comprehensive strategy.
    The President’s recent announcement of the Interagency Trade Enforcement Center to promote a more coordinated, effective response to China’s unfair trade practices was a major step in the right direction. Addressing Chinese predatory policies in auto parts should be one of the enforcement center’s first and highest priorities. That’s why I sent a letter signed by 154 of my colleagues to the President on March 16th urging him to do just that.
    The stakes couldn’t be higher for many Maine workers. According to a January report by the Economic Policy Institute, the U.S. auto parts industry directly or indirectly supports 2,077 jobs in Maine. Nationally, seventy-five percent of the jobs in the automotive sector are in auto parts, and these jobs are at risk in every state. In fact, 1.6 million U.S. jobs could be at risk if China’s practices are not curtailed.
    China has virtually closed its market to our auto parts exports and continues to take actions to further limit access. Given its importance, the Administration needs to address China’s harmful policies now while we still have an opportunity to change this one-way street in trade.
    Our companies and workers can compete anywhere when the playing field is level. The U.S. government now needs to do everything it can to make sure that’s the case.