US hypocrisy

Updated: 2012-03-28 08:04

(China Daily)

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The Barack Obama administration's lawsuit with EU and Japan against China's restrictions on exports of rare earths shows the administrations' hypocrisy, says an article on Forbes website. Excerpts below:

The United States and others are telling China that it must sell more of what is endemic to China. The hypocrisy here is impressive, particularly considering the myriad restrictions the US government puts on the exploration for and mining of, nearly everything.

What the Obama administration is doing here is the equivalent of China going to the WTO with a lawsuit demanding that the US open up more of Alaska and other oil rich locales controlled by the US, not to mention reduce the various regulations controlling the mining of other commodities that the US is rich in. If the Chinese were to do so, there's no telling what the negative reaction would be from the US political class, not to mention its citizenry.

It must be asked why rare earths are presently so expensive. It's arguable that a major factor in some being dear has to do with a dollar that has plunged over the last 11 years in concert with rising commodities prices across the board.

Furthermore, the lawsuit makes no sense from a basic economics perspective. That's the case because once a commodity reaches the market, there's no accounting for its final destination. Beijing doesn't have much control over rare-earths producers in China, and roughly 40 percent of exports to Japan "weren't registered with Chinese customs authorities". Translated, rare earths from China are one way or the other exiting the country, and once they do, the US, along with everyone else, has access to them at whatever the prevailing market price may be.

Just as every oil producing country on earth could "embargo" the US with zero impact on the access to their oil, so long as rare earths are exiting China, US producers will be able to purchase them in the marketplace in the same way they buy other commodities.

(China Daily 03/28/2012 page9)