Congressman Bill Owens applauded a recent move by U.S. Trade Representative Ron Kirk to challenge China's unfair export restraints on rare earths and other industrial materials. Kirk announced this week that the United States has requested consultations with China at the World Trade Organization (WTO) regarding this global market manipulation. This is the first step in a recent WTO dispute settlement process stemming from a January ruling that China is distorting international trade "through dozens of export policies it maintains" for nine different industrial minerals.
"This move sends another strong and clear message that we will not stand idly by as the Chinese government continues to manipulate global prices and undercut America's manufacturing sector," said Owens. "We must continue to ratchet up the pressure on China to value its currency and exports fairly."
Consultations are the first step in the WTO dispute settlement process, and parties are encouraged to agree to a solution at this stage. Under WTO rules, if the matter is not resolved through consultations within 60 days, the United States may request the establishment of a WTO dispute settlement panel. The European Union and Japan also requested WTO consultations with China on this matter today.
Materials like tungsten and molybdenum are major ingredients in a majority of U.S. made products and manufacturing sectors, including steel, lighting equipment, wind turbines, hybrid car batteries, advanced electronics, automobiles, petroleum, and various chemicals. China is responsible for more than 95 percent of the world's production of rare earths, which are key components in the high-tech manufacturing sector.
The Economic Policy Institute (EPI) estimates that if China revalued the Yuan by 28.5%, U.S. GDP growth would support 1.6 million U.S. jobs. If other Asian countries followed suit, a total of 2.2 million jobs could be created. The EPI study further estimates that nearly 2.8 million Americans have lost their jobs in the past decade due to the nation's trade deficit with China.