Stepping
up trade pressure on China in an election year, the Obama administration
took the first step with the World Trade Organization in trying to force
the Chinese to halt their export restrictions of rare earths — minerals
that are vital to such products as hybrid vehicles and smartphones.
The
move by the
United States
was joined by the European Union and
Japan
but was seen by analysts as having relatively little economic punch
because of the long delay in bringing the matter to the WTO.
In
announcing the action, President Obama cast it as a fight to defend
America
's manufacturing and energy security.
"We've
got to take control of our energy future, and we cannot let that energy
industry take root in some other country because they were allowed to
break the rules," Obama told reporters in the White House Rose
Garden.
China
dominates the globe's mining and processing of rare
earth metals, which also are used for wind turbines and other green
technologies. The Chinese have argued that these export quotas are aimed
at protecting the country's resources and environment, and are in
accordance with WTO rules.
"It
is rash and unfair for the
United States
to put forward a lawsuit against
China
before the WTO," the official New China News Agency said in a
commentary. "In [the] face of such unreasonable and unfair charges,
China
will make no hesitation in defending its legitimate rights in trade
disputes."
China
's Foreign Ministry spokesman Liu Weimin said at a
regular press briefing Tuesday that "
China
hopes other countries can shoulder responsibility for supplies and can
find alternative resources."
U.S.
officials allege that Chinese export duties, quotas
and other practices to control the production and supply of these minerals
have artificially increased prices outside of
China
and created pressure on
U.S.
and other foreign companies to move operations, jobs and technologies to
China
.
Analysts
said
Washington
has a strong case against
China
, noting that the
U.S.
recently won a WTO complaint against similar Chinese export restraints on
nine other industrial components.
But
Nicholas Lardy, a
China
expert at the Peterson Institute for International Economics, viewed the
request with the WTO on rare earths as a little late. The price of rare
earths, he said, has come down recently as the global market has been
adjusting to
China
's control of these minerals.
American
and other foreign companies have ramped up their production of rare
earths, and some makers of goods using rare earths have moved some
operations to
China
to source supplies.
"We
should have done this a long time ago," Lardy said, speculating that
the
U.S.
may have waited as it sought cooperation from
Japan
and the EU.
The
U.S.
request for consultations is the first step in proceedings that could lead
to a full legal case and the establishment of a WTO dispute settlement
panel, if the matter isn't resolved through talks within 60 days.
China
has a good record of making changes when pressed by
strong WTO cases, and advisors to the president said they thought the
problem could be resolved over the next 60 days.
White
House officials said they believe that they have demonstrated they are
serious about pursuing alleged unfair trade practices and that this will
put pressure on
China
to try to work things out over the next two months.
Obama
has taken heat from Republican opponents, including presidential candidate
Mitt Romney, for being too soft on
China
. Sensitive to such criticisms ahead of his reelection effort, Obama said
Tuesday that he had brought trade cases against
China
at a rate nearly twice that of the George W. Bush administration.
Obama
cited his success in halting a surge in imports of cheaper Chinese tires.
The administration said its effort protected the jobs of more than 1,000
American tire workers — something that some
U.S.
business groups dispute.
Two
weeks ago, the president set up a Trade Enforcement Unit and charged it
with aggressively rooting out unfair trade practices around the world,
fulfilling a pledge he made during the State of the Union address in which
he singled out
China
as a potential target.
Obama
said Tuesday that he wasn't looking to pick a fight with
China
, saying he preferred dialogue. "But when it is necessary," he
said, "I will take action if our workers and our businesses are being
subjected to unfair practices."
Source: Los Angeles Times |