Uncategorized — March 13, 2012 at 8:35 am

Obama administration goes after China for unfair trade of rare earth metals (Updated with transcript)


It IS a matter of national security, actually

The Obama administration announced this morning that it is requesting a “consultation” with China with the World Trade Organization over unfair export restraints on rare earth metals, as well tungsten and molybdenum, materials used in a wide array of electronics including the burgeoning industry of electric vehicle batteries.

U.S. Trade Representative Ron Kirk announced today that the United States has requested consultations with the People’s Republic of China at the World Trade Organization (WTO) concerning China’s unfair export restraints on rare earths, as well as tungsten and molybdenum. These materials are key inputs in a multitude of U.S made-products and American manufacturing sectors, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum, and chemicals.

Consultations are the first step in the WTO dispute settlement process, and parties are encouraged to agree to a solution at this stage. Under WTO rules, if the matter is not resolved through consultations within 60 days, the United States may request the establishment of a WTO dispute settlement panel. The European Union and Japan also requested WTO consultations with China on this matter today.

“America’s workers and manufacturers are being hurt in both established and budding industrial sectors by these policies. 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,” said Ambassador Kirk. “The launch of this case against China today, along with the President’s creation of the Interagency Trade Enforcement Center, reflects the Obama Administration’s commitment to make all of our trading partners play by the rules. We will continue fighting for a level playing field for American workers and manufacturers in order to grow our economy, and ensure open markets for products made in America.”

The United States recently won a WTO challenge against China’s export restraints on nine other industrial inputs. China’s export restraint measures on rare earths, tungsten, and molybdenum appear to be part of the same troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers…

In all, China’s export restraints on the materials at issue in this dispute cover more than 100 tariff codes. China also imposes harmful export duties on rare earths, tungsten, and molybdenum.

This is part of continuing effort by the Obama administration to level the playing field for American businesses and American workers. The President will be delivering a statement later today and I will update with a transcript when it becomes available. President Obama’s comments from the Rose Garden this morning are after the jump.

[Image credit: Chris Savage | Eclectablog]

President Obama’s comments from the Rose Garden just before lunch today:

THE PRESIDENT: Good morning, everybody. Before I make an announcement about our efforts to stand up for U.S. businesses and U.S. workers, I’d like to say a few words about the situation in Afghanistan.

Over the weekend, as many of you know, there was a tragic incident in which a number of Afghan civilians were killed. What I’ve made to President Karzai when I spoke to him is that the United States takes this as seriously as if it was our own citizens and our own children who were murdered. We’re heartbroken over the loss of innocent life. The killing of innocent civilians is outrageous and it’s unacceptable. It’s not who we are as a country, and it does not represent our military.

And for that reason, I’ve directed the Pentagon to make sure that we spare no effort in conducting a full investigation. I can assure the American people and the Afghan people that we will follow the facts wherever they lead us, and we will make sure that anybody who was involved is held fully accountable with the full force of the law.

Yesterday, I met with General Allen and Ambassador Crocker, who were here in Washington, and I’ve extraordinary confidence in them and in the many Americans who are serving in Afghanistan and who have made extraordinary sacrifices to be there. Today I’ll be meeting with Prime Minister Cameron, who is part of our broad coalition serving in Afghanistan, and we’ll have an opportunity to consult about the way forward as we prepare for the NATO summit in Chicago later this spring.

So make no mistake, we have a strategy that will allow us to responsibly wind down this war. We’re steadily transitioning to the Afghans who are moving into the lead, and that’s going to allow us to bring our troops home. Already we’re scheduled to remove 23,000 troops by the end of this summer, followed by — following the 10,000 that we withdrew last year. And meanwhile, we will continue the work of devastating al Qaeda’s leadership and denying them a safe haven.

There’s no question that we face a difficult challenge in Afghanistan, but I am confident that we can continue the work of meeting our objectives, protecting our country and responsibly bringing this war to a close.

Now, one of the things that I talked about during the State of the Union address was making America more competitive in the global economy. The good news is that we have the best workers and the best businesses in the world. They turn out the best products. And when the playing field is level, they’ll always be able to compete and succeed against every other country on Earth.

But the key is to make sure that the playing field is level. And frankly, sometimes it’s not. I will always try to work our differences through with other countries. We prefer dialogue. That’s especially true when it comes to key trading partners like China. We’ve got a constructive economic relationship with China, and whenever possible, we are committed to working with them to addressing our concerns. But when it is necessary, I will take action if our workers and our businesses are being subjected to unfair practices.

Since I took office, we’ve brought trade cases against China at nearly twice the rate as the last administration, and these actions are making a difference. For example, we halted an unfair surge in Chinese tires, which has helped put over 1,000 American workers back on the job. But we haven’t stopped there.

Two weeks ago, I created a Trade Enforcement Unit to aggressively investigate any unfair trade practices taking place anywhere in the world. And as they ramp up their efforts, our competitors should be on notice: You will not get away with skirting the rules. When we can, we will rally support from our allies. And when it makes sense to act on our own, we will.

I just signed a bill to help American companies that are facing unfair foreign competition. These companies employ tens of thousands of Americans in nearly 40 states. Because of subsidies from foreign governments, some of their foreign competitors are selling products at an artificially low price. That needs to stop.

This morning, we’re taking an additional step forward. We’re bringing a new trade case against China — and we’re being joined by Japan and some of our European allies. This case involves something called rare earth materials, which are used by American manufacturers to make high-tech products like advanced batteries that power everything from hybrid cars to cell phones.

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. 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.

Being able to manufacture advanced batteries and hybrid cars in America is too important for us to stand by and do nothing. 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. So our administration will bring this case against China today, and we will keep working every single day to give American workers and American businesses a fair shot in the global economy.

We’re going to make sure that this isn’t a country that’s just known for what we consume. America needs to get back to doing what it’s always done best — a country that builds and sells products all over the world that are stamped with the proud words: “Made in America.” That’s how we create good, middle-class jobs at home, and that’s how we’re going to create an economy that’s built to last.

Thank you very much, everybody.