October 15, 2010 / 4:27 PM / 9 years ago

UPDATE 2-US to probe if China clean energy actions WTO-legal

* USTR agrees to investigate United Steelworkers charges

* Comes same day Treasury delays China currency decision

* Democrats say action shows Obama defending American jobs

* Kirk move launches 90-day deadline for further action (Updates throughout)

By Doug Palmer

WASHINGTON, Oct 15 (Reuters) - The U.S. government on Friday agreed to investigate a U.S. labor union’s charges that China subsidizes and protects its green technology producers in violation of global trade rules.

“This is a vitally important sector for the United States,” U.S. Trade Representative Ron Kirk said. “We take the USW’s (United Steelworkers) claims very seriously and we are vigorously investigating them.”

Democratic lawmakers hailed the action as a sign of President Barack Obama’s determination not to let China use unfair trade practices to dominate global production of solar panels, wind turbines and other green technologies.

“While both China and the U.S. must continue to work toward a clean energy future, it is long past due for the Chinese government to play by the rules,” House of Representatives Speaker Nancy Pelosi said.

The decision, unveiled nine days before it was due on Oct. 24, came on the same day as the Treasury Department’s announcement that it was putting off for at least one month a report on whether China is manipulating its currency for an unfair trade advantage. [ID:nN14134313]

Treasury said it was delaying its semi-annual report on foreign exchange rate practices until after a pair of international summits in November to give diplomatic pressure on China more time to achieve results.

SENDING A MESSAGE

Kirk’s announcement should play well in hard-hit industrial states and help Democratic congressional candidates who supported the petition make the case they are fighting to save American jobs.

Democratic seats are at risk in many states ahead of the Nov. 2 midterm elections.

USTR’s decision “sends the message that America is not going to stand by while our jobs get outsourced,” said Leo Gerard, president of the steelworkers union.

“As the election approaches, voters should ask every candidate whether they support a trade policy that creates jobs and wealth here at home or one that ignores China’s unfair and illegal practices,” he said.

The union, which represents 1.2 million active and retired members, filed a formal petition with Kirk’s office in September asking it to investigate China’s “illegal activities” in five green technologies areas.

It accuses China of trying to dominate the global clean-energy sector by showering billions of dollars of subsidies on domestic producers, discriminating against foreign firms and goods, restricting foreign access to critical raw materials and requiring foreign investors to transfer technology.

Kirk said U.S. trade officials would more thoroughly investigate the allegations over the next 90 days and decide whether to ask China for consultations on any particular concern, which is the first step in filing a formal complaint at the World Trade Organization. (Reporting by Doug Palmer; Editing by Xavier Briand)

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