Facing accusations from Republicans that he’s not tough enough with China over its currency and trade practices, President Obama said Tuesday he is taking a complaint against Beijing to the World Trade Organization “to give American workers and businesses a fair shot in the global economy.”
The U.S. joined the European Union and Japan in asking the WTO to facilitate talks with China over its restrictions on the export of these so-called “rare-earth minerals,” for which China is the dominant international supplier.
The administration wants the WTO to pressure China to end what it says is unjustified export restrictions on raw materials critical to the manufacture of flat-screen televisions, cellphone batteries and other high-tech goods.
“The key is to make sure the playing field is level,” Mr. Obama said in a brief address in the White House Rose Garden. “If China would simply let the market work on its own, we’d have no objections.”
Chinese Foreign Ministry officials rejected the U.S. action, saying the United States and other countries should step up their own domestic production of rare-earth minerals.
Ministry spokesman Liu Weimin defended Beijing’s curbs on rare earth production as necessary to limit environmental damage and conserve scarce resources.
“We think the policy is in line with WTO rules,” Mr. Liu told reporters in Beijing.
The White House rejected suggestions that Mr. Obama joined the complaint following criticisms from Mitt Romney and other prominent Republicans.
Spokesman Jay Carney told reporters Mr. Obama was committed to opening Chinese trade practices “and this is simply part of that effort.”
Saying the materials involved are critical to an economy focused on new sources of energy, Mr. Obama said, “We want our companies building these products right here in America. We’ve got to take control of our energy future.”
Administration officials said the restrictions give Chinese companies a competitive advantage by allowing them to obtain the rare-earth minerals at a lower cost, while U.S. firms must pay more for the raw materials in smaller quantities. China jolted the international market when it briefly halted exports of rare-earth minerals to Japan during a territorial dispute in late 2010.
“America’s workers and manufacturers are being hurt in both established and budding industrial sectors by these policies,” U.S. Trade Representative Ronald Kirk said in a statement. “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.”
Mr. Romney, a former Massachusetts governor and a leading candidate for the Republican presidential nomination, has criticized Mr. Obama for not taking a stronger stand on China. He especially has targeted China for manipulating its currency, saying he would take steps that could lead to trade sanctions against Beijing if he’s elected president.
Under the WTO complaint, China has 10 days to respond and must hold talks with the U.S., EU and Japan within 60 days, but China’s state-run Xinhua News Agency already was warning of a backlash and an escalation of trade tensions as Mr. Obama was announcing his move.