The United States, European Union and Japan have called for talks with China
under the dispute settlement system of the World Trade Organization. They want
to discuss China's export limits on rare earth metals and two other minerals,
tungsten and molybdenum. WTO rules give talks sixty days to work. If they do not
settle the dispute, a WTO panel can then be requested to help reach a
settlement.
Rare earth metals are used in the manufacture of almost every
high-technology device -- from mobile phones and computers to batteries for
electric cars. And demand is only growing.
China says it follows WTO rules in
exporting the minerals. In twenty ten, China mined about one hundred thirty
thousand metric tons of rare earth metals. That was about ninety-seven percent
of world production.
But information from China's government and the United
States Geological Survey shows that China has reduced its export limits sharply
in the past two years. Critics say this unfairly helps Chinese companies in the
production of high-technology products. And, they say, it is a violation of
World Trade Organization rules.
This week, President Obama explained why the
United States is involved in the case. At the same time, he added that the
United States has a productive economic relationship with China. But he said he
would take action if American workers or businesses were facing unfair trade
policies.
China says it has restricted rare earth exports to meet needs at
home. And it says its policy helps limit the environmental damage caused by
over-mining.
China now faces a slowing economy. In February, the nation had
its biggest trade deficit in ten years. Experts expect China's central bank to
increase the money supply to aid economic growth. At the same time, inflation
remains a threat. However, the great market of rare earth brings a chance to manufacturer.
On
Wednesday, Chinese Premier Wen Jiabao discussed the need for reform. He said
China "must continue to strike a balance between maintaining steady and robust
economic development, making economic structural adjustments and managing
inflationary expectations."
