Getting tough with China to save Illinois auto jobs

Fri, 03/09/2012

FROM: Chicago Tribune, March 9, 2012


Getting tough with China to save Illinois auto jobs

By Scott Paul

March 9, 2012

They still don't get it. Every four years, presidential candidates pledge allegiance to American manufacturing and profess a love for "Made in America." But when the going gets tough, no candidate is willing to match this rhetoric with action. In a state where manufacturing still provides good jobs, that's just unacceptable, especially since we now know that nearly 100,000 jobs in the Illinois auto-parts sector are at risk due to China's cheating.

The truth is, the auto sector is just getting back on its feet after a near-death experience. President Barack Obama deserves credit for pursuing a rescue backed by federal loan guarantees. We now see auto assembly factories humming again all over the Midwest.

But the real auto employment — where 75 percent of the jobs exist — is in the auto-parts sector. These are the factories, large and small, that produce aluminum wheels, brake pads and thousands of other parts that go into making an automobile. This sector is under attack from China. We've seen imports of Chinese auto parts surge by 25 percent in the last two years. We've seen our trade deficit in auto parts with China grow nearly 900 percent in just 10 years. Yet no other major auto-producing nation — Germany, Japan, South Korea — has such a trade imbalance; in fact, they export more to China than they import.

China is not penetrating our market the old-fashioned way, by outcompeting us. Instead, Beijing has pumped $27 billion of subsidies into its auto-parts sector, with an additional $10 billion planned. And through policies that have been documented in great detail by our own government and outside investigators, China blocks our exports of autos and auto parts while favoring its own industry, in direct violation of the commitments it made to free markets when it joined the World Trade Organization.

As a result, the linkage between growth in auto-assembly jobs in the U.S. and auto-parts jobs has been broken.

We have a long history of letting these jobs leave — just ask laid-off Illinois factory workers. The state has shed about one-third of its manufacturing jobs over the past decade as our trade deficit with China shot through the roof.

But we are not helpless. There is something we can do to stop the flow of auto-parts jobs to China. Our trade laws are there for a reason — to ensure a level playing field for American workers and businesses. But who can we count on to act?

While Mitt Romney talks a tough game against China and its undervalued currency, he opposed relief for tire workers in America when the industry faced surges of Chinese imports. Rick Santorum thinks Romney's position on China is too strong, and believes tax cuts alone will keep the industry here. Even Obama, who has approved some trade sanctions on China in tires and other sectors, hasn't fully delivered on his promises to get tough, refusing six times to designate China as a currency manipulator.

I hope the candidates will stand up and say they will defend America's auto-parts workers and businesses. And when one becomes president, he should initiate a trade action against China to stop its auto-parts subsidies, open its market and grow jobs here. Nearly 100,000 jobs in Illinois depend on it.

Scott Paul is executive director of the Alliance for American Manufacturing.

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