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Obama to tell WTO that China illegally subsidizes auto exports

September 17, 2012|By Michael A. Memoli
  • Workers assemble vans at an auto plant in Qingdao, in eastern China's Shandong province. On Monday, the Obama administration will urge the World Trade Organization to take enforcement action against China, arguing that subsidies put U.S. manufacturers at a competitive disadvantage.
Workers assemble vans at an auto plant in Qingdao, in eastern China's… (Associated Press )

WASHINGTON -- The Obama administration is set to launch a new enforcement action with the World Trade Organization against China on Monday, alleging that the Asian economic giant is putting U.S. manufacturers at a competitive disadvantage by illegally subsidizing exports of autos and auto parts.

The president, blending his roles as candidate and incumbent officeholder, will announce the move at the first of two campaign stops scheduled Monday in Ohio, a state where 1 in 8 jobs is tied directly or indirectly to auto manufacturing.

According to administration officials, who provided details about the case on the condition of anonymity before the formal announcement is made, China has provided at least $1 billion in export-contingent subsidies between 2009 and 2011 in violation of WTO rules and the nation's agreement upon joining the organization in 2001.

The subsidies contribute to the outsourcing of U.S. auto-parts production to China, the officials said.

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The WTO action follows one in July in which the U.S. challenged China for imposing duties on more than $3 billion in American-produced automobiles. The administration is also announcing Monday that it will request that the WTO form a dispute settlement panel to consider that case.

Obama will make the announcement in Cincinnati, before going on to campaign in Columbus. The state's auto manufacturing hub is elsewhere, largely in and around Toledo, where the president campaigned earlier this month. That stop included a Labor Day breakfast with a trio of area auto workers.

The auto industry has featured prominently in the campaign's strategy in Ohio, a quadrennial bellwether in presidential contests and one in which the president's campaign claims an edge with 50 days remaining until the election. An NBC News-Wall Street Journal poll released last week showed Obama leading Republican Mitt Romney in the Buckeye State 50% to 43%.

The trade action also comes a week after Romney's campaign attacked the president in a new campaign ad for “failing American workers” by not labeling China a currency manipulator.

The Obama campaign launched a counter-ad on Friday, according to press reports, that said Romney could not be counted on to be tough on China because companies owned by Bain Capital engaged in outsourcing of jobs there.

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After a quiet weekend in Washington, Obama returns to the campaign trail in earnest this week. On Tuesday, he will raise money in New York and tape an appearance on CBS's “Late Show with David Letterman.”

On Thursday, he travels to Florida, with stops planned in Miami and Tampa. On Friday, he'll campaign in Virginia before making his first campaign stop this year in Wisconsin on Saturday.

Vice President Joe Biden is starting a two-day campaign trip through Iowa on Monday. First Lady Michelle Obama is campaigning in Florida.

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michael.memoli@latimes.com

Twitter: @mikememoli

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