Sens. Stabenow, Graham urge tougher trade enforcement

David Shepardson
Detroit News Washington Bureau

Washington – — Two senators on Tuesday unveiled legislation to crack down on unfair trade practices they argue have cost thousands of manufacturing jobs.

Sens. Debbie Stabenow, D-Lansing, and Lindsey Graham, R-S.C., who co-chair the Senate Manufacturing Caucus, introduced legislation that would make the Interagency Trade Enforcement Center permanent and responsible for coordinating the enforcement powers of multiple federal agencies, and would create a chief trade enforcement officer to lead the center.

The move comes as the pair and other members of Congress are pushing the Obama administration to make a crackdown on currency manipulation part of the Trans-Pacific Partnership free-trade talks with 11 other Asian nations. The Obama administration — which is sending top officials this week to Congress to brief members behind closed doors — has steadfastly refused to raise issues about currency.

“Every time another country breaks the rules, manufacturing jobs at home take a hit,” said Stabenow. “This bill will help crack down on countries that are breaking the rules, which will ensure our businesses and workers can fairly compete.”

Graham said “when others break the rules, they should be held accountable. Through the years, America’s manufacturing economy has been hurt by illegal trade barriers and shady practices. Americans welcome competition. I have no doubt that as unfair trade practices are eliminated and barriers are removed, America will continue to compete and have even more success in the international marketplace.”

The Trade Enforcement Act would make permanent the Interagency Trade Enforcement Center, which was created in 2012 to improve the effectiveness of U.S. challenges against unfair trade practices by coordinating the resources of various federal agencies.

The senators cited the role of the center after the World Trade Organization ruled in May that China violated WTO rules by imposing extra duties on American cars and SUVs. In August, a WTO panel found in favor of the United States in a dispute challenging Argentina’s widespread restriction on importing U.S. goods. This measure could potentially affect billions of dollars in energy exports, electronics and machinery, pharmaceuticals, medical devices, motor vehicles and vehicle parts.

China’s duties, or tariffs, which ranged as high as 21.5 percent, affected an estimated $5.1 billion worth of U.S. auto exports in 2013, and were applied to models such as the Jeep Grand Cherokee, Buick Enclave, Cadillac Escalade and many others.

The duties helped prod U.S. automakers to build more vehicles in China and import fewer from the United States. China eliminated the duties in December 2013 after experts said it was likely they would lose the case. China originally imposed the duties in response to actions by the Obama administration in 2009 to block China from dumping low-cost tires in the U.S.

In December 2011, China began imposing both duties on imports of American-made automobiles. The duties ranged from 2 percent to 21.5 percent. Specific products affected by the duties are American-made cars and SUVs with engine displacements of 2.5 liters or larger. China imposed the higher duties on imports of SUVs produced by General Motors Co. and Chrysler Group LLC, expressly because of the U.S. government bailouts they received in 2008 and 2009 by the Bush and Obama administrations.

GM received a $49.5 billion government bailout and Chrysler received $12.5 billion. Ford, which did not import vehicles to China from the U.S. during the investigation period, did not receive a bailout and therefore was never subject to the higher duties.

U.S. automakers, which have billions of dollars in investments in China and growing sales there, are reluctant to criticize China or their joint venture partners in China.

The administration has repeatedly challenged China’s actions in the auto and auto parts sector, including a separate challenge in September 2012 of more than $1 billion in subsidies by China on auto parts and automobiles.

Chinese auto-parts imports to the United States have grown 700 percent during the past decade, and China’s share of U.S. auto-parts imports rose to more than 10 percent of all U.S. imports, from 2 percent.