Thursday, October 14, 2010

Trade Officials Ponder China’s Rare Earth Stance

(New York Times – Keith Bradsher)

As a three-week-long Chinese suspension in exports of crucial minerals to Japan continues, American and Japanese trade officials have been considering whether to file cases against China at the World Trade Organization.

Trade lawyers say an embargo case could be brought to the WTO, although they said it might be a hard case to win because China has not acknowledged the halt in exports through any documents or public statements.

Coincidentally, Obama administration trade officials had been quietly meeting for months with executives and lawyers from a range of American industries that use rare earth elements, long before China halted shipments to Japan on Sept. 21, according to trade lawyers and Congressional and industry officials.

Many of those American industries are unhappy that China has been reducing its rare earth export quotas since 2006 and has imposed steep taxes on the exports, said Jeff Green, a Washington lobbyist for rare earth users. The export restrictions have given a competitive advantage to manufacturers in China that use rare earths to make their products, while putting foreign rivals at a disadvantage, according to a little-noticed WTO study last June. Read more here.