China Clean-Energy Aid to Draw U.S. Trade Complaint

The United Steelworkers union said it will file a trade complaint with the U.S. government against renewable-energy products from China, urging investigation of subsidies and preferences given by that nation.

The case “reveals five major areas of protectionist and predatory practices utilized by the Chinese to develop their green sector at the expense of production and job creation here in the U.S.,” the American union said in a statement, indicating specifics will be provided later today.

The complaint that China is doing too much to help its companies expand their clean-energy sales contrasts with international efforts to encourage renewable energy and reduce greenhouse-gas emissions in order to curb global warming. Nations including the U.S. and China plan to meet in Cancun. Mexico at the end of November to renew climate-change talks. Legislation to limit carbon emissions and set requirements for the use of renewable energy have stalled in the U.S. Senate.

The union’s filing will be made to the U.S. Trade Representative’s office. The Obama administration will have 45 days to decide if it will investigate the petition under U.S. law.

WTO Rules

China’s actions are in line with World Trade Organization rules and were taken in an effort to tackle climate change by spurring development of clean energy technologies, said a press official with the Chinese Ministry of Commerce, who declined to be identified because of the agency’s rules.

The United Steelworkers announced a deal last month with A- Power Energy Generation Systems Ltd., based in Shenyang, China, and Shenyang Power Group in which they would buy about 50,000 tons of steel to be produced in American steel mills to supply production for a Texas wind farm. At the time, Leo Gerard, the union’s president, said its threat of trade actions helped push the Chinese companies into the deal.

Asia makes more than half the world’s wind and solar energy equipment and is widening its lead. China invested $34.5 billion in low-carbon energy technologies last year, according to Bloomberg New Energy Finance. The U.S. spent $18.6 billion.

China may spend about 5 trillion yuan ($738 billion) in the next decade developing cleaner sources of energy to reduce emissions from burning oil and coal, Jiang Bing, head of the National Energy Administration’s planning and development department, said in July.

Attractive Markets

Ernst & Young said this week that China overtook the U.S. for the first time to lead a quarterly index compiled by the accounting firm of the most attractive countries for renewable energy projects.

A U.S. Energy Department report released Aug. 4 found that a growing share of wind-turbine equipment is being supplied domestically, as companies from the U.S. and abroad seek to minimize transportation costs and currency risks. U.S. content increased to about 60 percent in 2009 from about 50 percent the previous year, the department found.

A wind turbine contains about 8,000 parts, and many of those may not be made in the U.S.

The case the Steelworkers are filing will be made under Section 301 of U.S. trade law, which authorizes the government to investigate foreign barriers to exports. Unlike cases targeting imports into the U.S., Section 301 cases aren’t aimed at raising tariffs.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net.

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