(Image Source: Lance Atchinson/Jeff Wilson)

 

BY VICTORIA CRAIG

 

The United States plans is filing a formal complaint with the World Trade Organization over Chinese restrictions on rare earth metal exports. San Francisco’s KNTV explains those metals are critical to the American economy because they’re used in high-tech devices like hybrid car batteries, cell phones, and computers.

 

“The Chinese, which own the biggest rare earth mines in the world say they will reduce the amount of rare earth production. This has the high-tech industry and the Obama administration very, very concerned.”

 

China produces 97 percent of the rare earth minerals on the market. But it only has about 30 percent of the world’s supply. The Washington Post explains this isn’t the first time China’s tried to restrict global trade of its rare earth metal monopoly.

 

“...other countries, including the U.S., Canada and Australia, stopped mining more than a decade ago, because the price of the Chinese-produced rare earths was cheaper. … Global buyers were rattled in 2009 when the Beijing government announced it was setting a quota on rare-earths exports, ostensibly to protect the environment and stop over-mining.”

 

But one MSNBC contributor says it’s time the U.S. gets tough on China. He explains how the nation’s new restrictions are in clear violation of WTO regulations.

 

“Rare earth minerals are crucial to a lot of new energy sources. And the Chinese have said you can have our rare earth minerals, but you have to come to China and set up your plants here to use them.”

 

But Chinese authorities claim their restrictions are in line with WTO regulations — and they’ve done nothing wrong. CNN has China’s position.

 

“The Beijing position has been that these curbs are in line with their new broader environmental policies to reign in some of the environmental damage that’s caused by rare earth mining.”

 

China’s official news agency ran a commentary calling the U.S.’s stance “rash and unfair” and likely to hurt trade relations. But an Obama administration official said China’s export restrictions result in a higher cost for American firms that use those materials, giving Chinese companies an unfair advantage. Bloomberg explains.

 

“Rare-earth prices soared in 2010 after China imposed a quota on exports. Prices began to tumble last year after customers sought lower-cost alternatives. China shipped only 60 percent of its export quota last year...Demand for rare earths may rebound following a 25 percent slump in prices this year, benefiting producers of the metals.”

 

The Wall Street Journal says the U.S.’s beef with China doesn’t make much of a difference — calling Beijing’s attempts to control the rare earth industry futile.

 

“The irony for China is that the restrictions on exports haven't done much to entice the higher value added parts of the rare earth value chain to locate on the mainland. What they have done instead is provide trade rivals a case against China in the WTO. For President Barack Obama, an anti-China trade case in a tough election year could be a rare prize indeed.”

 

Both the European Union and Japan join the U.S. in the formal WTO complaint. After the complaint is filed, China will have 10 days to respond with its side of the story. 

U.S. Files Complaint Over Restrictions On Rare Earth Metals

by Charlie McKeague
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Transcript
Mar 13, 2012

U.S. Files Complaint Over Restrictions On Rare Earth Metals

 

(Image Source: Lance Atchinson/Jeff Wilson)

 

BY VICTORIA CRAIG

 

The United States plans is filing a formal complaint with the World Trade Organization over Chinese restrictions on rare earth metal exports. San Francisco’s KNTV explains those metals are critical to the American economy because they’re used in high-tech devices like hybrid car batteries, cell phones, and computers.

 

“The Chinese, which own the biggest rare earth mines in the world say they will reduce the amount of rare earth production. This has the high-tech industry and the Obama administration very, very concerned.”

 

China produces 97 percent of the rare earth minerals on the market. But it only has about 30 percent of the world’s supply. The Washington Post explains this isn’t the first time China’s tried to restrict global trade of its rare earth metal monopoly.

 

“...other countries, including the U.S., Canada and Australia, stopped mining more than a decade ago, because the price of the Chinese-produced rare earths was cheaper. … Global buyers were rattled in 2009 when the Beijing government announced it was setting a quota on rare-earths exports, ostensibly to protect the environment and stop over-mining.”

 

But one MSNBC contributor says it’s time the U.S. gets tough on China. He explains how the nation’s new restrictions are in clear violation of WTO regulations.

 

“Rare earth minerals are crucial to a lot of new energy sources. And the Chinese have said you can have our rare earth minerals, but you have to come to China and set up your plants here to use them.”

 

But Chinese authorities claim their restrictions are in line with WTO regulations — and they’ve done nothing wrong. CNN has China’s position.

 

“The Beijing position has been that these curbs are in line with their new broader environmental policies to reign in some of the environmental damage that’s caused by rare earth mining.”

 

China’s official news agency ran a commentary calling the U.S.’s stance “rash and unfair” and likely to hurt trade relations. But an Obama administration official said China’s export restrictions result in a higher cost for American firms that use those materials, giving Chinese companies an unfair advantage. Bloomberg explains.

 

“Rare-earth prices soared in 2010 after China imposed a quota on exports. Prices began to tumble last year after customers sought lower-cost alternatives. China shipped only 60 percent of its export quota last year...Demand for rare earths may rebound following a 25 percent slump in prices this year, benefiting producers of the metals.”

 

The Wall Street Journal says the U.S.’s beef with China doesn’t make much of a difference — calling Beijing’s attempts to control the rare earth industry futile.

 

“The irony for China is that the restrictions on exports haven't done much to entice the higher value added parts of the rare earth value chain to locate on the mainland. What they have done instead is provide trade rivals a case against China in the WTO. For President Barack Obama, an anti-China trade case in a tough election year could be a rare prize indeed.”

 

Both the European Union and Japan join the U.S. in the formal WTO complaint. After the complaint is filed, China will have 10 days to respond with its side of the story. 

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