On Tuesday, President Obama highlighted a case the United States has just filed in the WTO against China’s policy of restricting the export of “rare earth’ minerals. In a case joined by Japan and the European Union, the administration argues that China’s policy violates WTO rules against export restrictions designed to drive up the price of critical materials used by American and other foreign companies while lowering prices paid for those same materials by Chinese companies.
In a statement at the White House, the president said:
The United States, Japan, and the EU are right to complain. In fact, access to global materials at global prices is just what the foreign-trade zones program is about. Just as the Chinese government should not make critical materials more expensive for U.S. producers through export restraints, our own government should not make critical materials, such as titanium and silicon metal, more expensive through high tariffs.
A major benefit of locating within an FTZ is that U.S. companies are able to reduce or eliminate tariffs on imported materials and supplies so they can compete on a more equal basis with their foreign competitors. This raises the incentives for “building those products right here in America.” We urge the administration to continue a two-pronged strategy of reducing artificial export constraints abroad on critical inputs while reducing import constraints here in the United States through a robust FTZ program as championed by the NAFTZ.