The Obama Administration was joined by Japan and the European Union on Tuesday in an unusual unified challenge to China’s trade practices. The U.S. Trade Representative Ron Kirk says China has unfairly restricted the export of rare earths, key ingredients for hybrid and electric car batteries, energy efficient light bulbs, as well wind turbine construction. The U.S. asked for a consultation with the World Trade Organization over the issue.
“America’s workers and manufacturers are being hurt in both established and budding industrial sectors by these policies,” said Ambassador Kirk in a release issued by the White House. “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.”
The White House says China’s restrictions create an unfair advantage for Chinese producers, which could harm domestic industrial production of green technology and force some factories to move overseas. The Obama Administration has made green technology a focal point for new job creation. China mines 97 percent of the world’s supply of rare earths, which are not necessarily rare but costly to extract. Rare earths are 17 metals responsible for making technology smaller, more efficient and portable. They are also used in oil and gas drills.
Popular Mechanics has a great explanation of how four of these rare earths have become essential to modern living.
China’s state media said today that the challenge could create a backlash, threatening relations between the two countries. The Chinese say they limit exports due to environmental concerns, and comply with all WTO requirements. For more on the environmental impact of rare earth mining in China, check out this report from PBS Newshour.
According to WTO rules, the countries have 60 days to settle the dispute on their own before going before a settlement panel.