The importance of the Steelworkers' recent steps

The United Steelworkers this week filed a petition with the US Trade Representative "identifying a broad array of Chinese policies and practices that threaten the future of America’s alternative and renewable energy sector."

According to a USW statement:

The 5,800-page submission identifies five major areas of protectionist and predatory practices utilized by the Chinese to develop their green sector at the expense of production and job creation here in the U.S. Under the law, the Obama Administration has 45 days from the date of filing to determine whether to accept the petition for further action. This will put the Administration’s decision date on or before Oct. 24.

“Green jobs are key to our future,” said Leo W. Gerard, International President of the USW. “Right now, China is taking every possible step – many of them illegal under international trade laws – to ensure that it will control that sector. America can’t afford to cede more of its manufacturing base to China.

“It’s a national priority to reduce our dependence on foreign energy supplies. But if all we do is exchange our dependence on foreign oil for a dependence on Chinese alternative and renewable energy production equipment, we will have traded away our nation’s energy, economic and job security.”

See the full complaint here.

In a statement, Sept. 10, AFL-CIO President Richard Trumka expressed support for the USW petition:

It is time for the U.S. government to put an end to the unfair trade practices by countries like China that undermine the push for good jobs and clean energy investment. The AFL-CIO applauds the action by the United Steelworkers in filing a comprehensive clean energy trade case against the Chinese government. The predatory trade practices of the Chinese government have consistently violated the rules they promised to follow upon joining the World Trade Organization. Their actions have directly led to massive outsourcing and unrelenting trade deficits that have cost millions of American workers their jobs.

These charges, in addition to an ongoing campaign by the U.S. labor movement generally for new approaches to how China values its currency, came on the heels of an historic agreement in August between the USW and two Chinese-based companies to build wind farms in Texas using components made by unionized workers in America:

Last week the United Steelworkers union (USW) announced important agreements with two Chinese clean energy companies. The Chinese companies, A-Power Energy Generation Systems Ltd. and Shenyang Power Group, are world leaders in clean power generation.

The historic agreement states that the "USW will guide and work collaboratively on all aspects of the companies' U.S. market strategies including manufacturing, assembly, component sourcing, distribution and wind energy project development."

The agreement involves building one of the largest U.S. wind farms ever, in Texas. The steelworkers estimate that the massive 650 megawatt wind farm will use 50,000 tons of steel, to be made in the U.S.

The extraordinary agreement insures a large percentage of the wind farm components will be made by union workers in America. Under the agreement the Chinese companies will build a state of the art wind turbine plant in Nevada with an ongoing domestic supply chain. And further, the agreement includes the promise of company neutrality in union organizing drives connected to the project.

"We will work with A-Power and SPG to create long-term, good-paying, green American jobs," said USW International President Leo Gerard. "The USW is committed to building a strong domestic supply chain that will be key to the future of America's global renewable energy leadership."

My two cents, for what they're worth:

I strongly support Leo Gerard recent discussions of the issue of "economic patriotism" and it is clear that reaching the agreement with Chinese companies to create clean energy jobs here is huge and important thing. Both American workers and these companies will reap big rewards.

Some will say the USW petition goes too far because it targets China as a sort of economic enemy of the U.S., and that the rhetoric in the USW statement about the Chinese trying to "control" the clean energy industry is over-heated.

And they would have a point. U.S. global dominance – through economic, political, but mostly violent military pressure – of traditional dirty energy, like oil has forced developing economies like China's (and India's) have to seek alternatives. It seems only natural – not particularly greedy or power hungry as implied in some possible interpretations of the language of the USW statement – that China would try to develop its clean energy sector as swiftly as possible. And it is the nature of capitalism that cutthroat competition will benefit some at the expense of others.

Overheated rhetoric about other countries can often turn into waves of hate when used demagogically. One need only look at the carefully crafted Islamphobia generated by right-wing media and Republican Party officials over the past few months for an example.

I am convinced that neither USW leaders nor labor movement leaders generally would use the issue demagogically to inspire hate, but right-wing political leaders and pundits do and will and may co-opt the kind of rhetoric in the USW to further their own divisive causes.

Beyond this issue, however, another important consideration is that this petition, as well as the push for new currency values, is not primarily aimed at China-as-enemy. USW has no direct power to make U.S. policy with China or to impose rules on that country.

The petition is aimed at forcing the U.S. government to restructure its relationship with China, as evidenced by the statement's implied referral to the tricky position the step puts the Obama administration in.

The petition pressures the U.S. government to adopt an even more serious position with regard to developing the clean energy industry here (and as has been pointed elsewhere the Obama administration's efforts in this regard have been far more serious than any previous presidency).

Often, for those of us who favor dramatic changes in energy policy in order to address global climate change, the "global" part causes us to abstract the issue from the very specific needs of local communities. For example, some denounce developing economies for not moving fast enough to adopt clean energy alternatives, when of course those countries have few options. Others will also denounce developing countries for taking steps to protect themselves from bigger and more aggressive economies like the U.S. And still others will ignore the very special and very real needs of workers even in the developed economies for jobs when capital has organized their communities to be overly dependent on a single economic resource, like coal, for example, in West Virginia.

In this case, the Steelworkers are trying to address the specific needs of the members of the union and workers in the sector it seeks to organize. That is for new job creation. And the union is doing this in a responsible way: 1) it seeks to build itself by creating political pressure to develop a domestic clean energy sector that helps the U.S. as a whole shift from dirty energy to energy usage with a smaller carbon footprint 2) it has taking a number of very important steps to build positive and meaningful international relationships, only one of which was described above.

I think the ball is the Obama administration's court. It may not be in a position to demand much from China as that country holds some $843 billion in U.S. debt instruments. One important step for the U.S. to change this imbalance, however, is to develop its own exporting sector, i.e. building a manufacturing, clean energy or otherwise, that exports goods; not the current dynamic in which manufactures export themselves seeking countries with lower wages and benefits in order to make higher profits.

Some important alternatives to current U.S.-China policy:

1) reduce military-related tensions with China
2) create conditions for more cooperative energy projects between entities from the two countries
3) open serious negotiations over currency issues that highlight the specific needs of each country and seek mutually beneficial compromises

Alternatives to domestic policy that may impact U.S.-China policy:

1) Fight for and win new infrastructure investments in domestic clean energy manufacturing
2) Seek to create rules and guidelines for these investments to benefit companies that keep the work in the U.S.
3) Close existing tax loopholes that benefit companies looking to make an easy buck elsewhere
4) Swing the political/economic pendulum much further away from dirty energy

Any other ideas?

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