[ti:Limits on Rare Earth Exports Get China in Trade Dispute] [ar:June Simms] [al:Economics Report] [by:www.51voa.com] [00:00.00]This is the VOA Special English Economics Report. [00:04.94]The United States, European Union and Japan [00:09.70]have called for talks with China [00:12.69]under the dispute settlement system [00:15.69]of the World Trade Organization. [00:18.08]They want to discuss China's export limits [00:21.53]on rare earth metals and two other minerals, [00:25.06]tungsten and molybdenum. [00:27.61]WTO rules give talks sixty days to work. [00:32.51]If they do not settle the dispute, [00:35.61]a WTO panel can then be requested [00:39.04]to help reach a settlement. [00:41.53]Rare earth metals are used in the manufacture [00:45.97]of almost every high-technology device [00:49.61]-- from mobile phones and computers [00:52.03]to batteries for electric cars. [00:55.39]And demand is only growing. [00:58.24]China says it follows WTO rules in exporting the minerals. [01:05.24]In twenty ten, China mined about one hundred [01:09.08]thirty thousand metric tons of rare earth metals. [01:13.22]That was about ninety-seven percent of world production. [01:18.00]But information from China's government [01:21.39]and the United States Geological Survey shows [01:25.68]that China has reduced its export limits [01:29.55]sharply in the past two years. [01:32.00]Critics say this unfairly helps Chinese companies [01:37.53]in the production of high-technology products. [01:41.54]And, they say, it is a violation [01:45.28]of World Trade Organization rules. [01:48.32]This week, President Obama explained [01:52.16]why the United States is involved in the case. [01:56.24]BARACK OBAMA: "This case involves something [01:58.03]called rare earth materials, [02:00.14]which are used by American manufacturers [02:01.88]to make high-tech products like advanced batteries [02:04.72]that power everything from hybrid cars to cell phones. [02:07.74]We want our companies building those products [02:11.39]right here in America. [02:12.58]But to do that American manufacturers [02:14.72]need to have access to rare earth materials, [02:17.31]which China supplies. [02:18.86]Now, if China would simply let the market work on its own, [02:22.46]we'd have no objections. [02:24.00]But their policies currently [02:26.10]are preventing that from happening, [02:27.54]and they go against the very rules that China agreed to follow." [02:31.53]President Obama added that the United States [02:35.18]has a productive economic relationship with China. [02:38.93]But he said he would take action if American workers [02:43.37]or businesses were facing unfair trade policies. [02:47.86]China says it has restricted rare earth exports [02:52.40]to meet needs at home. [02:54.15]And it says its policy helps limit the environmental damage [03:00.40]caused by over-mining. [03:02.65]China now faces a slowing economy. [03:06.30]In February, [03:08.64]the nation had its biggest trade deficit in ten years. [03:13.00]Experts expect China's central bank [03:16.68]to increase the money supply to aid economic growth. [03:20.92]At the same time, inflation remains a threat. [03:25.28]On Wednesday, Chinese Premier Wen Jiabao [03:30.37]discussed the need for reform. [03:32.76]He said China "must continue to strike a balance [03:37.55]between maintaining steady and robust economic development, [03:42.69]making economic structural adjustments [03:46.09]and managing inflationary expectations." [03:50.72]And that's the VOA Special English Economics Report. [03:55.46]I'm June Simms.