Union: China going green ‘illegally’

Published Thursday, 9th September 2010

China might have overtaken the US’ lead as the world’s top carbon dioxide emitter fair and square, but it’s achieved its position as a leader in green technologies through a host of unfair and illegal trade practices, according to a complaint filed today by the United Steelworkers (USW) union.

With some 850,000 members, the USW is not only the largest industrial union in North America but it’s also one with a uniquely vested interest in green energy. The organisation says its workers are involved in nearly every facet of alternative and renewable energy equipment production, from nuclear energy to the manufacture of turbines for wind energy.

And, according to the 5,800-page petition it filed today with the Office of the United States Trade Representative, the USW also says its workers’ role in helping develop green energy for the US is being threatened by Chinese policies that violate trade laws.

“Right now, China is taking every possible step — many of them illegal under international trade laws — to ensure that it will control that sector,” said Leo W. Gerard, International President of the USW. “America can’t afford to cede more of its manufacturing base to China.”

Gerard added, “It’s a national priority to reduce our dependence on foreign energy supplies. But if all we do is exchange our dependence on foreign oil for a dependence on Chinese alternative and renewable energy production equipment, we will have traded away our nation’s energy, economic and job security.”

The petition specifies five areas of concern regarding Chinese policies:

Restrictions on access to critical materials;
Performance requirements for investors;
Discrimination against foreign firms and goods;
Prohibited export subsidies and prohibited domestic content subsidies; and
Trade distorting domestic subsidies.

The first concern — restrictions on access to critical materials — has generated considerable attention from various circles recently. Those materials — rare earth elements — are vital for everything from electric car batteries to wind turbines … and China produces more than 90 per cent of the world’s supplies. In fact, as the USW points out, “The US currently produces no rare earth raw materials at all. Its last processing facility for such materials was purchased by the Chinese and its equipment shipped to China years ago.”

The Office of the United States Trade Representative has 45 days to decide whether to take action on the USW petition. The union plans to work with the administration during that time to make its case and seek support from officials. One sensitive issue to be discussed will include US business concerns regarding possible retaliation or retribution by China over trade issues. In fact, the USW actually submitted two petitions: a public version and a confidential one that contains specific information about cleantech companies that fear a backlash from Chinese authorities and business interests.

This isn’t the first time Uncle Sam and The Middle Kingdom have found themselves at odds over energy and “green cred,” and likely won’t be the last. Nor are the two countries likely to disentangle each other, however contentious their relationship might become. For example, China might be the ascending economic — and greenhouse gas — powerhouse, but that’s largely due to all the carbon emissions developed countries like the US have “outsourced” there by buying cheap goods made in China and shipping manufacturing operations overseas. China has also taken to emulating the US’ historic approach toward natural resources by buying en masse stakes in foreign energy companies and farmland. It also holds bargaining chips in the form of US treasury securities — the most held by any country.

All of which suggests that China and the US will increasingly find themselves sparring over more than one kind of green as we move into the second decade of the 21st century. Which type of green — and which side — wins could prove an interesting, if uncomfortable matter to settle.

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