US Accuses China of Illegally Subsidizing Wind Industry

The US took the first step in filing a trade case against China at the World Trade Organization (WTO), because China has given several hundred million dollars in grants requiring that only China-made wind components be used in wind manufacturing.

The US says China is illegally subsidizing wind equipment production. The grants were given in 2008 under China’s Special Fund for Wind Power Manufacturing. A 60-day period has begun during which China and the US will attempt to resolve the disagreement.

"These subsidies effectively operate as a barrier to U.S. exports to China," said Ron Kirk, U.S. Trade Representative in a statement.

In September, the United Steelworkers filed a petition accusing China of violating WTO rules by subsidizing exports of clean energy equipment.

Chinese President Hu Jintao is expected to meet President Obama in Washington DC in about a month to discuss, among other things, how China and the US can work together on  clean energy job creation.

"The United States cannot replace its dependence on foreign oil with a dependence on clean energy technology made in China," said Senator Sherrod Brown (D-OH). "American manufactures need a level playing field."

By asking for WTO talks, the United States begins a 60-day period for the two countries to resolve the disagreement through consultation. If those efforts fail, the United States could ask for a WTO dispute settlement panel to hear its complaint.

Over 70% of components for clean energy systems are produced outside the U.S. Senator Brown wants to bolster US production of these components and make Ohio the Silicon Valley of Clean Energy Manufacturing.

In May, Sen. Brown introduced legislation that would expand and improve the Advanced Energy Manufacturing Tax Credit (48C) program, but it wasn’t included in the final Tax Bill.