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Obama says China trade practices harm American auto parts workers

Updated 11:35 a.m. EDT : President Barack Obama threw down the gauntlet against China on Monday, accusing the country of unfair trade practices that "harm working men and women."

"And today, my administration is launching new action against China - this one against illegal subsidies that encourage companies to ship auto parts manufacturing jobs overseas," Obama said in advance excerpts of a campaign speech he plans to give in Ohio, the heart of auto parts manufacturing in the United States.

"Those subsidies directly harm working men and women on the assembly line in Ohio and Michigan and across the Midwest. It's not right; it's against the rules; and we will not let it stand," said Obama, who has faced criticism from his Republican rival Mitt Romney over not being tough enough against China on trade.

Earlier Monday, The United States Trade Representative's office annnounced a request for dispute settlement consultations at the World Trade Organization with China about auto parts. The trade representative Ron Kirk said the subsidies give an unfair advantage to Chinese auto parts exporters which compete with producers based in the U.S. and other countries.

"We insist upon having a level playing field on which our world-class manufacturers can compete. Today we are continuing to make it clear to our trading partners that we will fight to support each job here at home that this sector supports,” Ambassador Kirk said.

Fifty days ahead of the presidential elections, Obama's speech also takes a swipe at Romney, accusing him of not supporting actions that the administration has taken against China trade practices.

"You can talk a good game, or you can play one - and my experience has been waking up every single day doing everything I can to give American workers a fair shot in the global economy," Obama said.

Quoting an unnamed administration official, The New York Times reported Monday that the domestic auto parts industry lost about half of its jobs from 2001 to 2010. The official said imports of Chinese auto parts grew by seven-fold over the same time period. The official asked to remain anonymous because of White House policy against discussing a new policy before it is announced officially.

But some of the jobs losses could have been due to a shrinking economy and lower demand for autos (which has since begun to pick up). Some may have been due to automation too.

Panasonic, Canon shutter China factories amid protests 

The U.S. Trade Representative's office said it was also taking the next step in a separate World Trade Organization case it launched in June against Chinese duties on U.S. auto exports.

The USTR's announcement came not long after China filed a complaint at the WTO Monday to challenge a new U.S. law on "countervailing duties," or tariffs intended to combat export-promoting subsidies.

The complaint potentially affects close to 30 products that have previously been targeted by U.S. duties, a trade official familiar with the case said. 

States that have lost the most jobs to China

The complaint was aimed at a U.S. law passed in March which allowed the United States to apply countervailing measures to Chinese exports retrospectively.

Commerce Ministry spokesman Shen Danyang said China hoped the United States could "correct its mistaken policy and appropriately resolve China's concerns".

In a brief statement on the initial filing by China, the WTO said the products included steel, tires, magnets, chemicals, kitchen appliances, wood flooring and wind towers. China will file a full complaint with more details in the next few days.

Under WTO rules, China's filing of the complaint has set the clock ticking on a 60-day period during which the United States can try to settle the dispute in bilateral talks. After that, China could ask the WTO to adjudicate.

Reuters contributed to this report.

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