The United States, Europe and Japan joined forces on Tuesday against China's restrictions on exports of rare earth minerals that are critical to production of advanced technology and clean energy goods expected to provide the jobs of the future.
"We want our companies building those products right here in America. But to do that, American manufacturers need to have access to rare earth materials which China supplies," President Barack Obama said at the White House. "Now, if China would simply let the market work on its own, we'd have no objections. But their policies currently are preventing that from happening and they go against the very rules that China agreed to follow," Obama said.
He cast the decision to take action with the European Union and Japan at the World Trade Organisation as part of stepped-up US effort to make sure countries play by global trade rules. "Our competitors should be on notice. They will not get away with skirting the rules," Obama said.
Obama, a Democrat, has been toughening his stance on Chinese trade practices amid criticism from his Republican rivals that his administration has not been strict enough with Beijing, as he girds for his re-election fight for the White House this November. He also on Tuesday signed a bipartisan bill that restores the US ability to impose countervailing, or anti-subsidy, duties on goods from China and other "non-market economies" after a court ruling struck the practice down.
The rare earths dispute is one of several between Beijing and the other three economic powers, as Chinese industry remoulds the world economic order. The dispute is the first to be jointly filed by the European Union, the United States and Japan. Though dependent on the outside world for vast qualities of industrial inputs such as iron and coal, China accounts for about 97 percent of world output of the 17 rare earth metals. They are crucial for the defence, electronics and renewable-energy industries and are used in a range of products such as mobile phones, disk drives, wind turbines and electric cars.
"China continues to make its export restraints more restrictive, resulting in massive distortions and harmful disruptions in supply chains for these materials throughout the global marketplace," US Trade Representative Ron Kirk said. The action over China's export curbs involving rare earths, as well as tungsten and molybdenum, begins a 60-day process for the two sides to try to resolve the dispute.
If unsuccessful, the next step would be for the United States, the European Union and Japan to ask the WTO to establish a dispute-settlement panel to decide the case, which with appeals could take as long as two years. "China's restrictions on rare earths and other products violate international trade rules and must be removed," European Union Trade Commissioner Karel De Gucht said in a statement.
"These measures hurt our producers and consumers in the EU and across the world, including manufacturers of pioneering hi-tech and 'green' business applications." Beijing said the export curbs are necessary to control environmental problems caused by rare earth mining and to preserve supplies of an exhaustible natural resource.
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