Power Plays

The United States Trade Representatives’ (USTR) office has taken up the cause of the United Steel Workers (USW) complaint against Chinese subsidies to the clean and renewable energy sector. The USW is an 850,000-member strong labor organization in the United States that believes China is unfairly subsidizing its cleantech export industries. Energy-related American jobs the union believes China is sapping include manufacturers that make the steel for wind turbine towers and nuclear reactors, and glassworkers who make solar panels and various kinds of incandescent and halogen light bulbs, which are manufactured in China then exported to the United States, according to the New York Times. The Union wants the United States government to take the complaint to the World Trade Organization (WTO), to end what it sees is an unfair international trade practice.

The USTR is obligated to render a decision within 45 of receiving the complaint, and may extend the deadline if it sees fit. However, it would not behoove the Obama administration to delay, because it’s an election year at state and regional levels in America, and the USW is a big supporter of the Democratic Party. The USW is a political force to be reckoned with. And the Democratic Party wants to show it is doing all it can to support a major constituency in the run-up to the elections in November.

China’s intimidating economic growth makes an outstanding target for both Republicans and Democrats, both of which promise that by reigning in Chinese subsidies jobs will return to America. The reality, though, is that at this juncture in the transformation of both economies national policy is everything. With the world still reeling from the greatest global economic calamity since the Great Depression, the Obama administration has to recognize that an economy built on the dysfunctional domestic real estate and financial sectors requires dramatic restructuring. A national energy policy with long-term goals vis a vis the Space Program of the 1970s and 1980s provides just the sort of focus government and industry could use to generate the opportunities and training programs unions like the USW are clamoring for. America’s blind spot, however, is in the adoption of a national policy of any kind – it smacks of the sort of big government Republicans demonize and Democrats are embarrassed about. In reality, national energy policy in the 21^st century is about gearing a country and its people toward meeting challenges that include dwindling natural resources and increasing amounts of waste and pollution. The Land of Plenty can no longer remain insulated from problems the entire world shares.

The Chinese leadership realizes the challenges confronting its country’s future. It also realizes that to meet the tests ahead a fragmented and fractious private sector is not large enough or well enough mobilized to overcome such epic challenges. China – unlike the United States – also considers energy independence a matter of national security. “The emerging energy stimulus is really driven by energy security and by climate change,” Mr. Zhou Xizhou, associate director at IHS Cera in Beijing, told the Financial Times. “In many cases these two goals align,” he continued. “Renewables are indigenous. They do not depend on a foreign country – a war in Africa will not disrupt your supply.”

However, instead of suing the U.S. government to mobilize the economy to actually take a lead in cleantech production and consumption, the USW and the congressmen that support them would prefer to make political hay out of China’s efforts to address issues that may one day mean the difference between its modernizing society surviving or imploding. The USW’s complaint, as well, misses the mark in restructuring American manufacturing to become competitive in a globally strategic sector.

Nevertheless, even if the USW’s complaint makes it to the WTO and the WTO in a year or two rules against China on the case, China will have already morphed its domestic market into a premiere buyer of just the sort of equipment the USW feels it should have a stake in. Jump-starting domestic consumption of clean energy production will blunt any WTO judgment against China, as complaints are aimed at trade between countries, not within countries. The USW – and perhaps even American manufacturers in general – may then find barriers to entering the Chinese marketplace in cleantech even higher than before.

So, in the end, China will have saved its manufacturers of cleantech anyway. And America’s job market will remain moribund, its shot at developing a national clean energy policy spent through wasteful political expediencies.