Obama Files a Complaint Over China

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PublicationThe New York Times

AuthorBy Mark Landler

Dato — Mars 13, 2012

Nettsted — www.nytimes.com

WASHINGTON — If there was ever any doubt about the political salience of China in an election year, it was erased Tuesday, when President Obama stepped before cameras in the White House Rose Garden to announce a procedural move in a long-running trade dispute with China over rare earth metals.

Mr. Obama said that the United States was lodging a formal “request for consultations” with China at the World Trade Organization, the first step toward filing a legal case against the Chinese government over its ostensible hoarding of metals that are used to manufacture a range of sophisticated technology products.

The United States is being joined in its request by the European Union and Japan. But the timing of the announcement about an incremental development —when prices of rare earth metals have declined and on the day of Republican primaries in Mississippi and Alabama — raised questions about the White House’s political calculations.

Given China’s robust defense of its trade policies and the several years that any legal challenge would drag on, trade analysts and industry experts said the filing might be too late to make much of difference.

“It’s probably more political at this stage of the game,” said Karl A. Gschneider Jr., a professor and expert in rare earth metals at Iowa State University. “But it’s still important that we do it.”

Mr. Obama put the rare earth dispute in the context of his drive to restore American manufacturing, create more middle-class jobs and improve the nation’s competitiveness in industries like advanced batteries and hybrid vehicles. By hindering the shipment of metals used in these industries, han sa, China was jeopardizing the ability of the United States to compete in the global economy.

“We want our companies building those products right here in America,"Mr. Obama said. “But to do that, American manufacturers need to have access to rare earth materials, which China supplies.”

“If China would simply let the market work on its own, we’d have no objections,” he added. “But their policies currently are preventing that from happening, and they go against the very rules that China agreed to follow.”

For Mr. Obama, turning a spotlight on China in an election year carries risks and rewards. While it will help him with labor unions and in battleground states like Michigan and Ohio, analysts said, it could also sow future conflicts with Beijing, if the trade frictions spill into other parts of the relationship.

Administration officials said Mr. Obama would strike a balance. He welcomed China’s vice president and likely future leader, Xi Jinping, to Washington last month, they noted. And they said he would seek a constructive relationship with China, even as he prodded it to abide by international trade standards.

China has become a popular bogeyman on the campaign trail, with Republican candidates like Mitt Romney accusing Mr. Obama of not doing enough to protect American workers. Mr. Romney said China was guilty of stealing American technology and hacking into its computers, and he has pledged to declare Beijing a currency manipulator on his first day in the Oval Office.

Mr. Obama defended his record against China, noting that his administration had brought trade cases against Beijing at twice the rate of the Bush administration. He cited a case against China’s shipment of tires, which he claimed had resulted in the restoration of more than a thousand American jobs.

Rare earth metals are used to make products ranging from advanced batteries and wind turbines to smart bombs.

Kina, which has a near-monopoly on these materials, has used export taxes and other quotas to slow shipments of them to Japan and the West, forcing some foreign companies to relocate factories to China.

China’s actions had caused prices for these metals to skyrocket, Professor Gschneider said, and though prices have declined about 30 percent from their peak levels, they are still inflated. Prices, he added, were only part of the problem; China is simply holding back some of the metals.

The administration was applauded by Senator Sherrod Brown, a Democrat from Ohio, who has called for tougher action against China on trade as well as its currency. “Rare earth hoarding is one of the many illegal trade practices that China employs to tilt the playing field in its own favor,"Sa han. “Enough is enough.”

But some Democrats said the White House needed to do more. Senator Charles E. Schumer of New York, another Democratic critic of China, said the Treasury secretary, Timothy F. Geithner, should urge the World Bank to block financing of Chinese mining projects, and the Interior Department to block such projects in the United States.

“There are faster ways to assert leverage on China than relying on the W.T.O., which could take years to resolve the case,"Mr. Schumer said in a statement.

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We are a nonprofit advocacy group led by American farmers – narrowly focused, issue specific – as we support free trade and agricultural biotechnology.

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