President Barack Obama will launch a trade suit in WTO against China, alleging unfair trade practices by the Chinese government to benefit its auto industry, a U.S. administration official said on Monday.
Obama, who is campaigning at Ohio, is likely to announce the complaint on Monday. A White House official said, on the condition of anonymity, that the Obama administration will launch a complaint with the World trade Organization (WTO) alleging that China was illegally subsidizing the export of auto and auto-parts causing a competitive disadvantage to the American auto-part manufacturers, Reuters reported.
The country has doled out subsidies worth $2 billion between 2009 and 2011, the Reuters report said.
Presidential candidates Obama and Mitt Romney have accused each other of pro-China and pro-outsourcing foreign policies that move American jobs abroad. The matter is being taken to the WTO since the negotiations held with China to resolve the issue were unsuccessful, the official said.
Romney had attacked Obama last week accusing him of being soft on China on outsourcing. Obama countered the allegations and accused Romney of having investments in Chinese companies and promoting outsourcing while running Bain Capital.
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More than 50,000 residents are employed in the auto industry, a major employment provider, in Ohio. The auto industry here believes that China is unfairly encouraging the outsourcing of auto parts manufacturing to its country from the U.S. and is responsible for the loss of jobs in the state.
Jobs in the U.S. auto parts sector have witnessed a sharp fall as the jobs are being outsourced to Asian countries. According to the Obama administration, U.S. imports of auto parts from China have increased sevenfold.
"The key principle at stake is that China must play by the rules of the global trading system... When it does not, the Obama administration will take action to ensure that American businesses and workers are competing on a level playing field," the official said, according to a Reuters report.
Apart from the fresh case, U.S. will also move the next step in protesting the $3 billion worth duties imposed by the Chinese government on U.S. auto exports. In July, the U.S. had approached WTO against the Chinese duties on U.S. exports.
Ohio is a key swing state in the presidential elections and both the presidential candidates are all out to defend their records on outsourcing and U.S. job security.
Romney has said that he will expose China's unfair trade practices and label the country as a currency manipulator if he wins the election. China is blamed for keeping the value of its currency low to benefit the exporters. Romney has maintained that Obama's pro-outsourcing polices have lead to bankruptcies in the auto sector during the period of financial crisis.
Meanwhile, Obama has reminded the people of the measures he took to bailout the auto industry and Romney's opposition to the bailout package then.
According to the opinion polls, Obama is ahead of Romney in the state but the race is tight as the margins are narrow between the candidates.