Obama brings new trade case against China for re-election

Discussion in 'China' started by JAYRAM, Mar 17, 2012.

  1. JAYRAM

    JAYRAM 2 STRIKE CORPS Senior Member

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    By Wu Chengliang (People's Daily Overseas Edition)
    16:47, March 15, 2012

    Edited and Translated by People's Daily Online

    On March 12, the Associated Press cited senior Obama administration officials as saying that the United States would bring a new trade case to the World Trade Organization on March 13 along with the European Union and Japan over China’s limits on exports of rare earth minerals.

    The United States asked the WTO to facilitate talks with China over its curtailment of exports of rare earth minerals, according to the officials, who requested anonymity in order to speak ahead of the president. The move is aimed at pressuring China to lift restrictions on exports of rare earth minerals and leveling the playing field for U.S. companies. The senior administration officials said that Beijing’s export restrictions give Chinese companies a competitive advantage by providing them access to more of these rare materials at a cheaper price, while forcing U.S. companies to manage with a smaller, more costly supply. They suggest that it is an unfair trade practice against rules established by the WTO.

    The U.S. economy is recovering slowly, and economic problems have become a major obstacle to Obama’s re-election bid. Obama recently lashed out at China, saying that its economic policies and “unfair trade practices” have hindered U.S. employment and economic growth as well as the development of U.S. companies. In order to win more votes, certain U.S. politicians have politicized China-U.S. trade disputes, and even threatened a trade war with China, causing great concern among far-sighted Americans.

    The move appears to be part of a broader effort by Obama to toughen his stance on trade with China as he seeks re-election in November, according to a Reuters report. He used an executive order last month to create a new inter-agency trade enforcement unit, which is expected to be up and running in the coming months, with China as its primary target.

    The Wall Street Journal said in a commentary that the case can be seen as part of the Obama administration’s stepped-up enforcement of trade rules and business practices in China. During his meeting with visiting Chinese Vice President Xi Jinping, Obama said that the United States welcomes China’s economic growth, but China needs to adhere to international economic and business standards.

    According to the Associated Press, China has 10 days to respond, and must hold talks with the United States, European Union, and Japan within 60 days under the terms of the WTO complaint. If an agreement cannot be reached within that time frame, the United States and its partners could request a formal WTO panel to investigate Chinese practices.

    Obama brings new trade case against China for re-election (2) - People's Daily Online
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    Good show.

    There has to be some system and not a free for all!
     
  4. amoy

    amoy Senior Member Senior Member

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    It's no longer merely a trading issue. In addition to quota China can easily raise duties over export of minerals for environmental damages or expedite industrial consolidation like below -

    China Minmetals takes steps to help rare earth industry consolidate CCTV News - CNTV English

     
  5. nimo_cn

    nimo_cn Senior Member Senior Member

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    When protecting environment in China means higher price for rare minerals, the self-claimed western environmentalists choose to sacrifice Chinese environment.

    I miss the time when they criticised China for lacking environmental awareness.
     
    mylegend and J20! like this.
  6. J20!

    J20! Senior Member Senior Member

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    China produces 92% of the world rae earth, but only has 36% of the world's deposits, it doesnt take a genius to figure out that this isnt sustainable at all. Furthermore rare earth processing actually produces low level nuclear waste, which was one of the chief reason the US CLOSED its mines in the 90's despite the fact that they have sizeable deposits. I also dont understand the EU's and JApan's position considering that export quotas have never been met, with the highest being 77% in 2010.

    Sue the US for closing their mines and leave us alone.. China has forfeited our enviromental health for economic growth for far too long benefiting these three countries, its nice to know we're now in a position to tell them NO! find a new sucker.
     
  7. s002wjh

    s002wjh Senior Member Senior Member

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    i think the arguement was china internal used of rare earth are 1/2 price of the export, which force some company move to china in order to take advantage of the price. if this is the case, europe/japan/US has a resonable arguement, which make the case valid.
     
  8. Ray

    Ray The Chairman Defence Professionals Moderator

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    That is the case.

    This issue has been going on for some time now.
     
  9. Ray

    Ray The Chairman Defence Professionals Moderator

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    As defined by IUPAC, rare earth elements or rare earth metals are a set of seventeen chemical elements in the periodic table, specifically the fifteen lanthanides plus scandium and yttrium. Scandium and yttrium are considered rare earth elements since they tend to occur in the same ore deposits as the lanthanides and exhibit similar chemical properties.

    Despite their name, rare earth elements (with the exception of the radioactive promethium) are relatively plentiful in the Earth's crust, with cerium being the 25th most abundant element at 68 parts per million (similar to copper). However, because of their geochemical properties, rare earth elements are typically dispersed and not often found in concentrated and economically exploitable forms. The few economically exploitable deposits are known as rare earth minerals. It was the very scarcity of these minerals (previously called "earths") that led to the term "rare earth". The first such mineral discovered was gadolinite, a compound of cerium, yttrium, iron, silicon and other elements.

    These concerns have intensified due to the actions of China, the predominant supplier. Specifically, China has announced regulations on exports and a crackdown on smuggling.[18] On September 1, 2009, China announced plans to reduce its export quota to 35,000 tons per year in 2010–2015, ostensibly to conserve scarce resources and protect the environment.[19] On October 19, 2010 China Daily, citing an unnamed Ministry of Commerce official, reported that China will "further reduce quotas for rare earth exports by 30 percent at most next year to protect the precious metals from over-exploitation".[20] At the end of 2010 China announced that the first round of export quotas in 2011 for rare earths would be 14,446 tons which was a 35% decrease from the previous first round of quotas in 2010.[21] China announced further export quotas on 14 July 2011 for the second half of the year with total allocation at 30,184 tons with total production capped at 93,800 tonnes.[22] In September 2011 China announced the halt in production of three of its eight major rare earth mines, responsible for almost 40% of China's total rare earth production.[23]

    As a result of the increased demand and tightening restrictions on exports of the metals from China, some countries are stockpiling rare earth resources.[24] Searches for alternative sources in Australia, Brazil, Canada, South Africa, Greenland, and the United States are ongoing.[25] Mines in these countries were closed when China undercut world prices in the 1990s, and it will take a few years to restart production as there are many barriers to entry.[18] One example is the Mountain Pass mine in California, which is projected to reopen in 2011.[12][26] Other significant sites under development outside of China include the Nolans Project in Central Australia, the remote Hoidas Lake project in northern Canada,[27] and the Mount Weld project in Australia.[12][26][28] The Hoidas Lake project has the potential to supply about 10% of the $1 billion of REE consumption that occurs in North America every year.[29] Vietnam signed an agreement in October 2010 to supply Japan with rare earths[30] from its northwestern Lai Châu Province.[31]

    Also under consideration for mining are sites such as Thor Lake in the Northwest Territories, various locations in Vietnam,[12][17] and a site in southeast Nebraska in the US, where Quantum Rare Earth Development, a Canadian company, is currently conducting test drilling and economic feasibility studies toward opening a niobium mine.[32] Additionally, a large deposit of rare earth minerals was recently discovered in Kvanefjeld in southern Greenland.[33] Pre-feasibility drilling at this site has confirmed significant quantities of black lujavrite, which contains about 1% rare earth oxides (REO).[34]

    In early 2011, Australian mining company, Lynas, was reported to be "hurrying to finish" a US$230 million rare earth refinery on the eastern coast of Malaysia's industrial port of Kuantan. The plant would refine "slightly radioactive" ore - Lanthanide concentrate from the Mount Weld mine in Australia. The ore would be trucked to Fremantle and transported by container ship to Kuantan. However, the Malaysian authorities confirmed that as of October 2011, Lynas was not given any permit to import any rare earth ore into Malaysia. Within two years, Lynas was said to expect the refinery to be able to meet nearly a third of the world's demand for rare earth materials, not counting China."[35] The Kuantan development brought renewed attention to the Malaysian town of Bukit Merah in Perak, where a rare-earth mine operated by a Mitsubishi Chemical subsidiary, Asian Rare Earth, closed in 1992 and left continuing environmental and health concerns.[36] In mid-2011, after protests, Malaysian government restrictions on the Lynas plant were announced. At that time, citing subscription-only Dow Jones Newswire reports, a Barrons report said the Lynas investment was $730 million, and the projected share of the global market it would fill put at "about a sixth." An independent review was initiated by Malaysian Government and UN and conducted by IAEA between 29 May and 3 June 2011 to address concerns of radioactive hazards. The IAEA team was not able to identify any non-compliance with international radiation safety standards.

    Significant quantities of rare earth oxides are found in tailings accumulated from 50 years of uranium ore, shale and loparite mining at Sillamäe, Estonia.[39] Due to the rising prices of rare earths, extraction of these oxides has become economically viable. The country currently exports around 3,000 tonnes per year, representing around 2% of world production.

    Nuclear reprocessing is another potential source of rare earth or any other elements. Nuclear fission of uranium or plutonium produces a full range of elements, including all their isotopes. However, due to the radioactivity of many of these isotopes, it is unlikely that extracting them from the mixture can be done safely and economically.

    More info on this at:

    Rare earth element - Wikipedia, the free encyclopedia
     
    Last edited: Mar 19, 2012
  10. trackwhack

    trackwhack Tihar Jail Banned

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    Rare Earths are hardly rare. The current situation is a result of cheap supply from China for the last 2 decades. Now that there is supply disruption there will be alternate supply channels set-up. Its a short term issue.
     
  11. nimo_cn

    nimo_cn Senior Member Senior Member

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    There is an old Chinese saying '欲加之罪何患无辞', which translates into 'He who has a mind to beat his dog will easily find his stick', meaning if they are determined to make a case, they will always find the excuses.

    Prices of the rare earth used inside China have always been lower than prices of the rare earth after export, I didn't see they brought any case against China when rare earth was deadly cheap. They just want it as cheap as before, even if it means the devastation of Chinese environment, which is not reasonable at all.

    If they think Chinese rare earth is expensive, try and mine rare earth in America. America has the second largest deposit after China, and the rising price will make it profitable ( I said that because someone suggested Americans closed their mines for economic causes, the fact is Americans sealed their mines because such mining is hazardous to environment)
     
  12. s002wjh

    s002wjh Senior Member Senior Member

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    what make this case valid is because when china got into WTO, they sign document which follow WTO rule, kind like a contract. WTO indicate that a country cannot sell their internal resource much cheaper to domestic market while selling same resource to outside at much higher price. Now, if china withdrawn from WTO, then they can sell whatever the price they see fit. if china want to use the environment arguement, then they can't raise the export price compare to domestic price, both price has to be about the same. these rules are outlined in WTO rules.

    US is currently open up its mining, it was closed in the 90's because chinas low price. it got alot funding from bank last year to re-open its mining, but it take few years before fully production.
     
    Last edited: Mar 20, 2012

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