The US, the European Union (EU), and Japan have taken China to task for restricting the trade of rare earth minerals. In a statement on fair trade, President Obama said that the US was bringing a trade case against China, aided by Japan and the US's European allies.
Obama couched the action with the World Trade Organization (WTO) in terms of America's manufacturing robustness, or rather, in terms of its lack of robustness, because rare earth materials are needed by US manufacturers to produce a variety of technology-based products, such as batteries for cell phones and hybrid cars.
President Obama announces a World Trade Organization action to enforce U.S. trade rights with China regarding rare earths and other materials, March 13, 2012. (Source: Official White House photo by Pete Souza)
"We want our companies building those products right here in America," said Obama. "But to do that, American manufacturers need to have access to rare earth materials -- which China supplies. Now, if China would simply let the market work on its own, we’d have no objections. But their policies currently are preventing that from happening. And they go against the very rules that China agreed to follow. Being able to manufacture advanced batteries and hybrid cars in America is too important for us to stand by and do nothing. We've got to take control of our energy future, and we can’t let that energy industry take root in some other country because they were allowed to break the rules."
The nearly identical requests for consultation from all three entities formally initiate a dispute within the WTO. The disputes are followed by consultations, which are discussions under the WTO's dispute settlement system. The expectation is that the parties will find a solution without having to resort to litigation. But if consultations fail to resolve the dispute after 60 days, the initiators of the complaint may request a panel's judgment.
Rob, you're sure right about difficulty in occupying the country by US and Soviet forces. But the problem is, there's no overall economy for the dollars to go into: there are tribes and powerful individuals/families within those tribes. Some of them, most likely those already in power, very likely the ones we don't like, will manage to get the dollars, assuming there are any left after all the mercenaries and whatnot forces we send over there have taken their pickings first. There's no particular reason to think that similar sociopolitical-economic structures (to sub-Saharan Africa or portions of the Middle East like Iraq and our involvement with them) will produce different results.
Yes, you're right about Afghanistan, Ann, which is probably part of the reason the Soviets and the U.S. have had so much trouble occupying the country. I would think that the dollars would still go into the economy in one way or another, but maybe not.
Rob, thanks for the info. You're right, that looks promising. However, it's not going to do the country much good overall because Afghanistan isn't really a country, in the sense of a state. It's a collection of people with different ethnic and linguistic origins living mostly in nomadic tribes at conflict with each other, and without any overall unifying sense of statehood. If the main European invasion of North America had been by Vikings or Celts in the years 500-1000 AD, we might have had a sociologically and technologically similar situation here, among native and European-born tribes in conflict with each other.
Some American officials have estimated the Afghan rare earth deposits are worth up to one trillion dollars. So it is significant. That should have some impact on the country's economy even it it goes to just a few.
Dave, I agree with you about the unlikelihood that Afghanistani residents will benefit from this discovery. My references to chess and and poker concerned relations between the governments of the US and China, which are actual nations with a sense of statehood and longstanding central governments, regardless of what we may think of them. That description does not fit Afghanistan in the least: politically and sociologically it is much more like many sub-Saharan African "nations."
Rob, thanks for that info about the discovery of rare earth minerals in Afghanistan. Given the long history of outside intervention in that country, I find it difficult to believe that the people who live there will benefit from this discovery.
I understand your point, Dave. In some of these under developed countries, it is a small number who actually benefit. With the Congo, there is at least a movement among developed countries to avoid the use of "conflict materials." Though I have to say, I'm not sure how well the effort is succeeding.
That's pretty good, Ann. I like your differentiation. To further complicate the world of rare earth minerals, a huge supply has been discovered in southern Afghanistan. Geologists estimate Afghanistan has enough rare earths to supply the world's need for 10 years:
Rob, now I'm thinking that the relationships, which are complex, resemble chess sometimes and poker at others, and in both cases, military strategies or tactics. Over the long haul I suspect it's more like chess: you can see your opponent's "hand" (pieces on the board) and guess at their strategy while formulating your own (like war). At the tactical level, I think it's more like poker: you don't know what resources your opponent has for this next confrontation (battle) or what tactics they will use, so you rely more on bluff.
I think your observation is very interesting about government and industry re who's playing which game.
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