SENATOR COLLINS CALLS ON ADMINISTRATION TO CRACK DOWN ON ILLEGAL SUBSIDIES

                U.S. Senators Susan Collins (R-ME) and Evan Bayh (D-IN) have called on Commerce Secretary Carlos Gutierrez to crack down on illegal subsidies that give industries in China and elsewhere an unfair advantage in international trade.  In a letter, Senators Collins and Bayh, joined by a bipartisan coalition of 21 other Senators, urged the Secretary to apply U.S. anti-subsidy laws to companies in China and other nonmarket countries, arguing that free raw materials, loans that aren’t meant to be repaid and other advantages these governments provide create an unfair advantage in international trade.   “It is essential that American manufacturers, farmers and workers have all the tools at their disposal to deal with unfair trade practices in China,” the Senators wrote in the letter. “China’s trade surplus with the United States continues to explode, fueled in large part by subsidies provided by the Chinese government to favored industries in China. As Chinese exports have grown, the impact of unfair government subsidies on the U.S. economy has increased.”               Currently, U.S. industries have no direct recourse to combat subsidies used by nonmarket economies.  Because these illegal subsidies are indirect—often taking the form of free energy and materials, free or reduced rent or loans that will never be collected—competing U.S. companies rely on international negotiations that can last years, by which time the affected business has often already been severely damaged or destroyed. If current anti-subsidy laws were applied to illegal subsidies instead, the U.S. government could take swifter action, protecting American manufacturing and saving countless American jobs.   “I hear from manufacturers in Maine and across the country whose efforts to compete successfully in the global economy simply cannot overcome the practices of illegal pricing and subsidies of nations such as China,” said Senator Collins.  “Currently, U.S. industries have no direct recourse to combat these unfair practices.  They instead must rely upon government-to-government negotiations or on the dispute settlement processes of international organizations such as the WTO.  While these channels might eventually lead to relief, it usually takes years to see results – and by that time, jobs could already be lost, factories shuttered, and a local industry decimated.”               In 2005, Senators Collins and Bayh introduced the Stopping Overseas Subsidies Act to allow the United States to fully enforce its antisubsidy laws and greatly increase the ability of companies in Indiana, Maine and across the nation to fight unfair trade from overseas.  The SOS Act was submitted as a solution to a federal court decision from 1986 that the Commerce Department says prevents it from applying antisubsidy laws to nonmarket countries such as China, which have since sued the decision to gain an unfair trade advantage. ###