The Computer & Communications Industry Association welcomes the President’s decision to directly confront China on the issue of rare earth minerals.  The request for consultations is the first step in bringing a trade case at the World Trade Organization (WTO).

China imposes various export restrictions on these minerals, which are used to manufacture high-tech products such as advanced electronics.  Such restrictions, including export quotas and export duties, artificially increase prices for high-tech manufacturers outside China to the advantage of domestic Chinese manufacturers in violation of their international commitments.  In addition, these policies seek to coerce foreign manufacturers to locate their production in China, leading to technology transfers.

CCIA believes that China’s export restrictions are part of a continuing pattern of flouting trade rules to achieve commercial advantage over foreign competitors.  China uses social morals to attempt to justify its Internet censorship of foreign sites while domestic sites carry the same banned content.  Similarly, China uses environmental protection as a pretext for its rare earth minerals policy yet insists on an approach discriminating against foreign entities.

With China accounting for more than 90 percent of the current rare earth mineral supply, it is imperative in this era of global supply chains that China be prevented from extorting from global tech companies in violation of international trade rules.  Previous success in holding China accountable on its discriminatory practices has always needed concerted action with like-minded allies, and we are encouraged that the European Union and Japan are joining the U.S. in this action as well.

The following statement can be attributed to Computer & Communications Industry Association President & CEO Ed Black:

“CCIA believes that the unimpeded operation of global supply chains, whether it be goods, services or the free flow of information, is a prerequisite for 21st century trade, and we applaud our government’s efforts in pursuing this goal.

“Obama’s action represents a good first step in dealing with China’s unfair competitive practices, but more needs to be done.  Besides flouting international commitments and impeding access to the materials needed to build the high-tech gadgets of tomorrow, China also restricts the medium that makes these gadgets valuable – the Internet.  A comprehensive trade action plan to address China’s unfair attempts to hinder foreign companies in the fast-evolving high-tech space must also address China’s rampant and unjustified Internet restrictions.”

 

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