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Senators Stabenow and Levin Urge U.S. Trade Ambassador to Stop China from Discriminating against American Clean Energy Vehicles

China’s “New Energy Vehicles” plan will harm American companies and workers, cost Michigan jobs

Friday, Apr 29, 2011

Michigan Senators Debbie Stabenow and Carl Levin today sent a letter to U.S. Trade Representative Ambassador Ron Kirk urging him to demand that China play by the rules and not implement another illegal trade policy that would cost our country jobs. China has drafted new regulations that, if implemented, would give its companies an unfair trade advantage by shutting out American automakers from the Chinese market.

"These new regulations appear to represent another attempt to illegally gain an unfair advantage over the U.S. automobile industry that will cost our country jobs," said Senators Stabenow and Levin. "The United States must respond strongly to stand up for American businesses and working families."

A full copy of the letter is included below:

April 28, 2011
Ambassador Ron Kirk
United States Trade Representative
600 17th Street NW
Washington, DC 20508

Dear Ambassador Kirk,

We are writing in regards to new Chinese attempts to discriminate against American companies and workers. In its latest National Trade Estimate (NTE), your office highlighted a new Chinese trade barrier that is designed to prevent U.S. automakers from accessing the Chinese market. According to the NTE, China is in the process of drafting new regulations as part of its New Energy Vehicles (NEV) plan, which seeks to advance hybrid and battery electric vehicle production in China.

USTR reports that draft regulations associated with the NEV would require automakers that want to manufacture electric vehicles in China to develop a "mastery level" of proficiency in vehicle parts, such as batteries, motors, and control systems. Furthermore, according to USTR, China is planning to require that foreign automakers enter into joint ventures with a Chinese manufacturer and may mandate the transfer of intellectual property rights for key NEV technologies to a Chinese company.

These regulations, if implemented, would have the effect of requiring that hybrid and electric vehicle parts production occurs in China in order to access the country's large domestic market. The draft regulations would also continue China's longstanding policies that make the transfer of American intellectual property to Chinese firms a precondition of doing business in China.

In contrast, the United States opens its doors to non-U.S. companies without such restrictions. Our home state of Michigan has over a thousand foreign companies who do business here. To sell in our market, the U.S. does not require the transfer of these companies' intellectual property to U.S. firms. We must insist that China play by the same rules.

We thank you for highlighting this serious new trade barrier in the National Trade Estimate. Please continue your efforts to demand that China not implement these discriminatory practices. If China does implement these practices, USTR must use all its available resources-including possible legal action at the World Trade Organization-to end China's discrimination.

We are concerned that these draft regulations continue China's long history of breaking international trade rules. In 2008, the WTO ruled that China was illegally discriminating against U.S. automobile parts. These new draft regulations appear to represent another attempt to illegally gain an unfair advantage over the U.S. automobile industry that will cost our country jobs. The United States must respond strongly to stand up for American businesses and working families.

Sincerely,
Senator Debbie Stabenow
Senator Carl Levin

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