Decision Upholds U.S. Sect. 421 Passenger & Light Truck Tire Case
WASHINGTON, Sept. 5, 2011 /PRNewswire-USNewswire/ -- The World Trade Organization (WTO) today released the decision of its Appellate Body, upholding President Obama's decision to provide relief for American tire industry workers under Section 421 of U.S. trade law against surging imports from China of passenger and light truck tires following a petition filed by the United Steelworkers (USW) in 2009.
USW President Leo W. Gerard reacted to the WTO decision, saying, "Today's ruling by the WTO Appellate Body comes as good news for America's workers on Labor Day. The WTO reaffirmed that President Obama's decision to stand up for America's workers against the flood of passenger and light truck tire imports from China were legal and justified.
"Since relief was granted by the President, the law has had its intended effect," Gerard said. "Investments in U.S. tire manufacturing are up, jobs have been created and our companies are shipping more tires to consumers. While we still need to accelerate our nation's economic recovery, the economic benefits of the trade relief are clear and indisputable."
He added further: "President Obama and the USTR need to be commended for using America's trade laws as they were intended, and fighting China's claims before the WTO. This represents an important victory for America's workers and the resulting benefits for passenger and light truck tire producers operating here. It should signal that enforcing our trade laws is a vital part of an economic program to revitalize the economy and strengthen manufacturing."
The WTO decision is also an early anniversary present, Gerard said, explaining Sept. 11 marks the second anniversary of the President's 2009 decision. Section 421 was added by Congress as an amendment to the U.S. Trade Act of 1974, implementing a special safeguard for workers and industry in China's Protocol of Accession to the WTO.
The tariffs were placed in each of three years by the President after public hearings before the U.S. International Trade Commission (ITC) in response to a petition filed in April 2009 by the USW on behalf of its members employed in tire plants throughout the country. Chinese tire imports were shown to have surged to record levels in the five years prior to the filing of the petition, causing significant market disruption.
The tariffs continue to have restraining effects on Chinese tire imports. In 2010, Chinese tire imports were 34 percent lower compared to 2008, the year before the USW filed its petition. And imports were down another 12 percent in the first six months of 2011, compared to the same period in 2010.
Currently, the industry and its workers have experienced significant improvement in terms of production and sales of tires in the U.S. market. Companies such as Goodyear Tire and Rubber and Cooper Tire have reported significantly higher sales revenues for the second quarter of 2011, compared to the second quarter of 2010.
In response to these improved market conditions, the industry has invested significantly in new capacity. Bridgestone-Firestone announced last month that it was investing $135 million to create 120 jobs in a plant in Aiken County, SC. Cooper Tire invested some $30 million in its Findlay, Oh. plant in 2010, and Continental Tire completed a $224 million expansion of its plant in Mt. Vernon, Ill. Continental Tire has just started work on a new green field tire plant.
The USW acknowledged that some manufacturers have failed to take full advantage of the improved environment for domestic tire manufacturing following import relief, citing at least one company that decided to close a productive facility, but overall the re-investments and expansions have demonstrated import relief is working.
According to the USW and tire industry reports, U.S. companies are hiring. In a public fact sheet, Michelin employs nearly 300 more workers in their U.S. plants producing passenger car and light truck tires in 2010, compared to 2008.
U.S. government statistics also show that employment in the overall tire industry, which had declined by more than 25 percent between January 2005 and September 2009, has stabilized significantly since President Obama imposed the Section 421 tariffs nearly two years ago.
In sum, the tariffs not only stemmed the hemorrhaging of jobs and investment that the flood of Chinese imports caused – they helped the industry regain its footing, retool, and expand, providing a rare bright spot in our struggling economy.
The USW said Section 421 relief continues to provide important benefits to workers employed in the U.S. passenger car and light truck tire industry. The union strongly believes improvements will continue as the market enters the third year of the special tariffs.
More about the USW Section 421 trade case filing is available at: www.usw.org/. The WTO Appellate Body's full report can be found at: http://www.wto.org/english/news_e/news11_e/399abr_e.htm/.
SOURCE United Steelworkers (USW)