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Obama: U.S., Partners File Trade Case Against China
March 14, 2012

By MacKenzie C. Babb
IIP Staff Writer

Three men, one speaking at a podium microphone
President Obama, accompanied by Commerce Secretary John Bryson, left, and U.S. Trade Representative Ron Kirk, speaks about the trade case at the White House.

The United States, the European Union and Japan are filing a case against China for violating international trade rules by unfairly limiting exports of rare earth minerals, a key component in high-tech products manufactured around the world. They requested consultations with the Chinese government through the World Trade Organization March 13, a first step toward asking for a dispute resolution.

“We’ve got a constructive economic relationship with China and, whenever possible, we are committed to working with them to address our concerns,” President Obama said in announcing the new trade case from the White House.

“We prefer dialogue,” Obama said. “But when it is necessary, I will take action if our workers and our businesses are being subjected to unfair practices.”

China holds at least 95 percent of the rare earth minerals in dispute, which senior Obama administration officials say are critical to the production of clean-energy technologies such as hybrid car batteries, wind turbines and energy-efficient lighting.

“We’ve got to take control of our energy future, and we can’t let that energy industry take root in some other country because they were allowed to break the rules,” Obama said.

Administration officials said the minerals are also used to manufacture steel, advanced electronics, automobiles and petroleum products in countries around the world.

Obama said that for these sectors to continue to produce, businesses need access to rare earth minerals supplied by China.

“Now if China would simply let the market work on its own, we’d have no objections,” Obama said. “But their policies currently are preventing that from happening, and they go against the very rules that China agreed to follow” as a member of the World Trade Organization.

By limiting exports of rare earth minerals, senior administration officials said, Beijing has given Chinese companies an unfair advantage in the production of high-technology products. One official said this export restraint has resulted in harmful disruptions in supply chains around the world.

The case is Obama’s latest in a series of measures cracking down on trade enforcement. The president said he recently signed a bill to help American companies facing unfair foreign competition.

“Because of subsidies from foreign governments, some of their foreign competitors are selling products at an artificially low price,” Obama said. “That needs to stop.”

He said that when the playing field is level, American workers and businesses will “always be able to compete and succeed.”

“But the key is to make sure the playing field is level, and, frankly, sometimes it’s not,” Obama said.

In February, the president created the Interagency Trade Enforcement Center to investigate unfair international trade practices.

“Our competitors should be on notice: You will not get away with skirting the rules,” Obama said.

The president pledged to continue working to give all workers and businesses a fair shot at success in the global economy.