Industry News

USTR Initiates Green Trade Investigation

10/27/2010


On October 20, 2010 the U.S. Trade Representative (USTR) initiated an investigation under section 302(a) of the Trade Act of 1974, as amended, with respect to acts, policies, and practices of the People’s Republic of China affecting trade and investment in green technology (75 FR 202). The USTR acted in response to a 301 petition filed by the United Steel Workers Union (USW)  and the USTR investigation is expected to cover the acts, policies, and practices identified in the petition.

The USW petition defines products of green technology “as products used to produce renewable energy or reduce the emissions associated with the production and use of energy. These are the products necessary to produce energy from wind, solar, biomass, geothermal, hydro, and nuclear resources, products that consume less energy or alternative sources of energy, such as energy-efficient vehicles and energy-efficient lighting.”

The USW petition alleges that China “employs a wide range of polices to stimulate and protect its domestic producers of green technology” and that China’s acts, policies, and practices in the area of green technology violate China’s WTO commitments. These acts, policies, and practices include export restraints, duties, and quotas on rare earth minerals, tungsten, and antimony as well as prohibited subsidies. Under China’s Protocol of Accession to the WTO, it is only supposed to tax or limit exports from a list of specific raw materials.

The USTR is not alone in its concern over China’s policies and practices regarding rare earth minerals. EU members have also indicated concern over China’s rare earth policies, and the EU has called on the Organization for Economic Cooperation and Development (OECD) to draw up rules securing raw materials trade.

Ron Kirk, the U.S. Trade Representative, decided to delay consultations with China for up to ninety days to allow his staff time to verify and improve the petition. This also allows the Obama Administration not to be distracted by the issue during a series of important bilateral and multilateral negotiations involving China that are planned for the next three months. Unless the eventual consultations reach a mutually agreeable solution, the USTR will likely request the establishment of a WTO panel.

The USTR has invited interested persons to submit written comments concerning the issues covered in this investigation by November 15, 2010.  For more information on how to submit a comment, please contact a Barnes Richardson attorney.