2010-26401. Initiation of Section 302 Investigation and Request for Public Comment: China-Acts, Policies and Practices Affecting Trade and Investment in Green Technology

AGENCY:

Office of the United States Trade Representative.

ACTION:

Notice of initiation of investigation and request for public comment.

SUMMARY:

The United States Trade Representative (“Trade Representative”) has initiated an investigation under section 302(a) of the Trade Act of 1974, as amended (“Trade Act”), with respect to acts, policies, and practices of the People's Republic of China (China) affecting trade and investment in green technology. The Trade Representative has initiated the investigation in response to a petition filed on September 9, 2010, and the investigation will cover the acts, policies, and practices identified in the petition. The investigation will consider whether these acts, policies, and practices deny U.S. rights or benefits under the GATT 1994, under the Agreement on Subsidies and Countervailing Measures (“SCM Agreement”), and under China's Protocol of Accession to the WTO. USTR invites written comments from the public on the matters covered in the investigation.

DATES:

The Trade Representative initiated this investigation on October 15, 2010. Written comments are due on or before 5 p.m. on November 15, 2010. Any request for a public hearing must be made no later than 5 p.m. on November 1, 2010.

ADDRESSES:

Non-confidential comments (as explained below) should be submitted electronically via the Internet at www.regulations.gov, docket number USTR-2010-0028. If you are unable to provide submissions by www.regulations.gov, please contact Sandy McKinzy at [phone] to arrange for an alternative method of transmission. If (as explained below) the comments contain confidential information, the person wishing to submit such comments should contact Sandy McKinzy at [phone].

FOR FURTHER INFORMATION CONTACT:

Eric Garfinkel, Chief Counsel for China Trade, [phone], Terry McCartin, [phone], Deputy Assistant USTR for China Affairs, [phone], or Jean Kemp, Director, Steel Trade Policy, [phone] for questions concerning the issues in the investigation; William Busis, Deputy Assistant USTR for Monitoring and Enforcement and Chair of the Section 301 Committee, [phone], for questions concerning procedures under Section 301; or Gwendolyn Diggs, Staff Assistant to the Section 301 Committee, [phone], for questions concerning procedures for filing submissions in response to this notice.

SUPPLEMENTARY INFORMATION:

A. USW Petition

On September 9, 2010, the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO CLC filed a petition under Section 302 of the Trade Act addressed to China's acts, policies, and practices affecting trade and investment in green technologies. The text of the petition has been posted on http://www.ustr.gov,, under “Enforcement.”

The petition defines products of green technology “as products used to produce renewable energy or reduce the emissions associated with the production and use of energy. These are the products necessary to produce energy from wind, solar, biomass, geothermal, hydro, and nuclear resources, products to enable the production of energy from coal with fewer greenhouse gas emissions, and products that consume less energy or alternative sources of energy, such as energy-efficient vehicles and energy-efficient lighting.” The petition also covers “a wide range of upstream inputs to green technology products.”

The petition alleges that China “employs a wide range of policies to stimulate and protect its domestic producers of green technology, from wind and solar energy products to advanced batteries and energy-efficient vehicles,” enabling China to become the dominant global supplier of a number of green technologies. The petition alleges that China's acts, policies, and practices in the area of green technology violate China's WTO commitments under the GATT 1994, under the Subsidies and Countervailing Measures Agreement (“SCM Agreement”), and under China's Protocol of Accession to the WTO. These acts, policies, and practices are export restraints such as export duties and export quotas on rare earth minerals, tungsten, and antimony; allegedly prohibited subsidies that are contingent on export performance, or on the use of domestic over imported goods, affecting a variety of products, including wind turbines; discrimination against foreign companies and goods, including with respect to wind and solar power projects; technology transfer as a requirement for approval of foreign investments in China; and domestic subsidy programs that are allegedly causing serious prejudice to U.S. interests, including subsidies supporting renewable energy industries.

The petition alleges that the acts, policies, and, practices covered in the petition, in aggregate, have caused the annual U.S. trade deficit with China in green technology goods to increase by more than two billion dollars since China joined the WTO. The petition alleges that U.S. exports to China in the sector have grown only modestly, while U.S. imports from China in the sector are nearly five times higher than they were in 2001. As a result, the petition alleges, China is now the top contributor to the U.S. global trade deficit in the sector.

B. Initiation of Investigation

The Trade Representative has determined to initiate an investigation under section 302(a) of the Trade Act with respect to the acts, policies, and practices of China identified in the petition. The investigation will consider whether these acts, policies, and practices deny U.S. rights or benefits under the GATT 1994, under the SCM Agreement, and under China's Protocol of Accession to the WTO.

C. Delay of Request for Consultations

Section 303(a) of the Trade Act provides that on the date on which an investigation is initiated under section 302, the Trade Representative shall request consultations with the foreign country concerned regarding the issues involved in such investigation. Section 303(b) provides that the Trade Representative, after consulting with the petitioner, may delay for up to 90 days any request for consultations under section 303(a) for the purpose of verifying or improving the petition to ensure an adequate basis for consultation. Because the issues covered in the investigation involve U.S. rights under the WTO Agreement, any consultation request will be made under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), and unless consultations result in a mutually acceptable resolution, the Trade Representative will request the establishment of a WTO panel under the DSU.

In light of the number and diversity of the acts, policies, and practices covered by the petition, and after consulting with the petitioner, the Trade Representative has decided to delay for up to 90 days the request for consultations with the Government of China for the purpose of verifying and improving the petition. During the period of delay provided for under section 303(b), the Trade Representative will seek information and advice from the petitioner and the appropriate committees established pursuant to section 135 of the Trade Act. The Trade Representative will take account of this information and advice, as well as the public comments submitted in response to this notice, in improving and verifying the petition during the delay period.

D. Public Comments

Interested persons are invited to submit written comments concerning the issues covered in this investigation, including with respect to: (i) The acts, policies, and practices of China that are the subject of this investigation; (ii) whether these acts, policies, and practices deny U.S. rights or benefits under the WTO Agreement; and (iii) the amount of burden or restriction on U.S. commerce caused by these acts, policies, and practices.

Interested persons may submit public comments electronically to http://www.regulations.gov,, docket number USTR-2010-0028. If you are unable to provide submissions by http://www.regulations.gov,, please contact Sandy McKinzy at [phone] to arrange for an alternative method of transmission.

Interested persons may request a public hearing on these matters. Any request for a public hearing should be made by no later than 5 p.m. on November 1, 2010. In the event a hearing is to be held, USTR will issue a notice specifying the date of the hearing and the procedures for submitting written testimony.

To submit comments via http://www.regulations.gov,, enter docket number USTR-2010-0028 on the home page and click “Search.” The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice by selecting “Notice” under “Document Type.” Click on the reference to this notice, and then click “Submit Comment.” The http://www.regulations.gov site provides the option of submitting comments by filling in a “Type Comment & Upload File” field, or by attaching a document. Given the detailed nature of the comments sought by USTR, interested persons are requested to provide their comments in an attached document. If a document is attached, it is sufficient to type “See attached” in the “Type Comment & Upload File” field.

A submitter requesting that information contained in a comment be treated as confidential business information must certify that such information is business confidential and would not customarily be released to the public by the submitter. Confidential business information must be clearly designated as such and the submission must be marked “BUSINESS CONFIDENTIAL” at the top and bottom of the cover page and each succeeding page. Any comment containing business confidential information must be submitted by fax to Sandy McKinzy at [phone]. A non-confidential summary of the business confidential information must be submitted to http://www.regulations.gov. The non-confidential summary will be placed in the docket and open to public inspection.

USTR may determine that information or advice contained in a comment submitted, other than business confidential information, is nonetheless confidential. If the submitter believes that information or advice may qualify as such, the submitter—

1. Must clearly so designate the information or advice;

2. Must clearly mark the material as “SUBMITTED IN CONFIDENCE” at the top and bottom of the cover page and each succeeding page; and

3. Must provide a non-confidential summary of the information or advice.

Any comment containing confidential information must be submitted by fax to Sandy McKinzy at [phone]. A non-confidential summary of the confidential information must be submitted to http://www.regulations.gov or by fax. The non-confidential summary will be placed in the docket and open to public inspection.

Comments will be placed in the docket and open to public inspection pursuant to 15 CFR 2006.13, except confidential business information exempt from public inspection in accordance with 15 CFR 2006.15 or information determined by USTR to be confidential. Comments open to public inspection may be viewed on http://,www.regulations.gov,, under Docket No. USTR-2010-0028.

William Busis,

Chair, Section 301 Committee.