US prefers dialogue with China over disputes

WASHINGTON - The United States prefers dialogue with China to settle trade disputes, US President Barack Obama said here on Tuesday, right after his administration filed a complaint with the World Trade Organization (WTO) over China's rare earth export quotas.

To ensure a level playing field for American businesses and workers, the United States would always try to work through its differences with other countries, Obama said at a press conference in the White House. "We prefer dialogue. That's especially true when it comes to key trading partners like China."

"We've got a constructive economic relationship with China, and whenever possible we are committed to working with them to address our concerns," Obama added.

Obama's comments came immediately after the Unites States filed a trade complaint on Tuesday morning with the WTO over China's export quotas on rare earth, tungsten and molybdenum, claiming the restriction has limited its access to those minerals.

The US move was joined by the European Union and Japan. The three trading powers claimed that China's export restriction gives itself a competitive edge while hurting producers and consumers in other parts of the world.

The filings request dispute settlement consultations with China, the first step in handling a WTO complaint. The dispute could be transmitted to a WTO panel for a ruling should no agreement be reached in 60 days.

While confirming that it has received the request for dispute settlement, the Chinese Ministry of Commerce said on Tuesday in a statement posted on its website that it will properly deal with the issue.

Earlier in the day, Chinese Minister of Industry and Information Technology Miao Wei said that the Chinese side would prepare to defend itself if a complaint was filed with the WTO.

Miao said that China's rare earth export policy is drawn up out of concern for environmental protection and sustainable utilization of resources. Some rare earth metals would last only 20 years if China does not stop excessive mining, Miao added.

Also on Tuesday, Obama signed into law a controversial bill that allows his government to impose countervailing duties (CVDs) on imports from China, Vietnam and other so-called "non-market economy countries."

The move is widely seen as yet another display of US trade protectionism as the country seeks to improve export competitiveness and create more jobs at home. Observers call it a "short-sighted approach" that could also hurt the interest of many American businesses and consumers.

For its part, the Chinese government has repeatedly urged the United States to honor its commitment against protectionism and help maintain a free, open and just international trade environment.