US, EU, Japan challenge China over minerals trade

The United States, the European Union and Japan filed complaints Tuesday with the World Trade Organization charging that China is limiting its export of rare earths, minerals that are vital to the production of technology components.

China has a stranglehold on the global supply of 17 rare earth minerals that are essential for making high-tech goods including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights, and camera lenses.

But China has cut its export quotas of these minerals over the past several years to cope with growing demand at home, though the government also cites environmental concerns as the reason for the restrictions.

U.S. industry officials suggest it is an unfair trade practice, against rules established by the WTO, a group that includes China as a member.

EU Trade Commissioner Karel De Gucht said China’s export quotas and export duties give Chinese companies an unfair competitive advantage, and must be removed.

“These measures hurt our producers and consumers in the EU and across the world,” De Gucht said.

President Barack Obama planned to announced the U.S.’ filing of a complaint from the White House on Tuesday. The fresh action is part of Obama’s broader effort to crack down on what his administration sees as unfair trading practices by China. Senior administration officials said Beijing’s export restrictions give Chinese companies a competitive advantage by providing them access to more of these rare materials at a cheaper price, while forcing U.S. companies to manage with a smaller, more costly supply.

The three separate but coordinated filings with the WTO formally request dispute settlement consultation, which is the first step in a WTO complaint. If no resolution is found after 60 days, the dispute can be transmitted to a WTO Panel for a ruling payday advance lender. At the end of the process, depending on the outcome, sanctions against China are possible.

In addition to rare earths, the complaints cover tungsten, a very hard metal, and molybdenum, a metallic element used in making different types of steel as well as in other industries.

Anticipating the complaints, China earlier on Tuesday defended its curbs on production of rare earths as an environmental measure.

Global manufacturers that depend on Chinese supplies were alarmed by Beijing’s decision in 2009 to limit exports while it built up an industry to produce lightweight magnets and other goods that use them. China has about 30 percent of rare earths deposits but accounts for 97 percent of the world’s production.

China needs to limit environmental damage and conserve scarce resources, said a Chinese foreign ministry spokesman, Liu Weimin.

“We think the policy is in line with WTO rules,” Liu said at a briefing.

The complaints filed Tuesday follow an earlier EU challenge to China at the WTO on restrictions on other raw materials. Earlier this year, the WTO ruled that export restrictions on those other material were incompatible with the rules of the global trade organization, of which China is a member.

But EU officials said Chain has made no move to comply with the earlier ruling.

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Joe McDonald in Beijing and Julie Pace in Washington contributed to this report.

Don Melvin can be reached at http://twitter.com/Don_Melvin

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Volkswagen targeting revenue rise in 2012

Volkswagen AG, Europe’s biggest carmaker by sales, is targeting a further increase in deliveries and revenues in 2012, as it reported a a big drop in net earnings for the fourth quarter of last year.

Volkswagen, which overtook Japan’s Toyota last year to become the world’s second biggest car company by total deliveries behind General Motors, said Monday that it earned euro2.16 billion ($2.8 billion) in the October-December period. That compared with a hefty euro3.2 billion in the final quarter of 2010.

The company said revenues rose by a quarter to euro43.06 billion from euro34.33 billion. Volkswagen’s operating profit slipped to euro2.29 billion from euro2.32 billion. For the whole year, Volkswagen earned euro15.41 billion, more than doubling the previous year’s figures. Revenues rose 26 percent to euro159.34 billion.

The full-year figures had been widely anticipated in the markets. Last month, Volkswagen said earnings in 2011 were boosted by accounting factors related to the company’s stalled takeover of Porsche.

Volkswagen sold nearly 8.3 million vehicles last year, a 14.7 percent rise from the previous year’s figure of 7.2 million that put it ahead of Toyota. It was the first time Volkswagen had topped 8 million.

The company also said it expects to increase deliveries again in 2012, helped by new models across the group, which includes brands such as SEAT, Bentley, Lamborghini, and Skoda. It also said it expects higher revenue, though it gave no precise figure.

Volkswagen said its goal for operating profit is to match last year’s euro11.27 billion.

It added that cost management will be important because “positive effects from the attractive model range and strong competitive position will be offset in part by increasingly stiff competition in a challenging market environment, especially in certain European countries.”

Volkswagen shares were 0.9 percent lower at euro141.50 in Frankfurt trading.

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Economy adds 227K jobs, jobless rate unchanged

U.S. employers added 227,000 jobs in February to complete three of the best months of hiring since the recession began. The unemployment rate was unchanged, largely because more people streamed into the work force.

The Labor Department said Friday that the unemployment rate stayed at 8.3 percent last month, the lowest in three years.

And hiring in January and December was better than first thought. The government revised those figures to show 61,000 an additional jobs.

The economy has now generated an average of 245,000 jobs in the past three months. The only stretch better since the recession began was in early 2010.

That bodes well for President Barack Obama’s re-election chances, although he’s still likely to face the highest unemployment rate of any post-war president.

Last month’s hiring was broad-based and in both high-paying and lower-paying industries. Manufacturing, mining, and professional services, such as accounting, all added jobs.

Nearly a half-million people began looking for work last month, and most found jobs, the report said. That’s a sign of growing optimism in the job market, as many people who had given up on looking for work come off the sidelines to search for jobs.

That also counters a troubling trend: a key reason why the unemployment rate has dropped since last year is that many out-of-work people have stopped looking for work. Only people without jobs who are actively seeking one are counted as unemployed.

A sustained rise in the number of people looking for jobs would be a good sign, even if it pushed up the unemployment rate payday lenders.

Friday’s report comes as a host of data points to an improving economy and job market. Weekly applications for unemployment benefits have fallen about 14 percent in six months. Though they ticked up last week, average applications remain near a four-year low.

On Wednesday, payroll provider ADP said businesses added 216,000 employees last month, up from January’s total. The ADP report doesn’t include governments, which have been cutting jobs.

And service companies, which employ most Americans, are expanding at a faster pace, according to a private survey released this week. A gauge of employment shows that service firms are still hiring, particularly in the mining, educational services, and transportation and warehousing industries.

The service sector includes everything from restaurants and hotels to health care firms and financial service companies.

Some companies must hire because they can’t squeeze more output from their current staffs. Last year, worker productivity rose at its slowest pace in nearly 25 years. That means companies will likely have to add staff to meet growing demand.

Other figures point to the same conclusion. The average work week was unchanged at 34.5 hours. That’s close to the pre-recession total and suggests that companies will have to hire more workers as business improves, rather than adding more hours.

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Success in Public-Spending Cuts Turns to Hurdle in Japan Quake Rebuilding - Bloomberg

After years of criticism for public- works spending that rewarded political constituents at the cost of adding debt, Japan succeeded in cutting the largesse in half. Now, that legacy of success is hampering an economic rebound.

Reconstruction bids are going unmet one year after the earthquake that devastated the northeast region, because builders lack resources to fill them. Builders

Oil, gas industry created 9 percent of new U.S. jobs in 2011:WEF

A booming U.S. oil and gas sector was responsible for generating some 9 percent of all new jobs last year, with three indirect jobs for every one directly involved in the industry, a study released on Wednesday found.

The World Economic Forum report, which highlighted the role that the energy industry can play in reviving the global economy, comes during a presidential election year as candidates argue about high U.S. unemployment and energy policy.

The report said the oil and gas industry contributed 37,000 direct jobs in 2011, which led to the creation of an additional 111,000 indirect jobs during the same period. It said the multiplier effect for solar and wind energy were lower during operation, but higher at up to 3.3 times during construction.

“We always suspected that energy had a vital role to play in the economic recovery but we were still surprised when the data uncovered the magnitude of the sector’s multiplier effects,” Roberto Bocca, head of energy Industries at the World Economic Forum, said in a release.

The domestic U.S. oil and gas industry is in the midst of the its biggest boom in a generation, with hydraulic fracturing and horizontal drilling technology unlocking billions of barrels of oil and decades’ worth of natural gas from previously untappable tight coal seam fissures.

That has ignited a political debate between environmentalists who caution against the impact of “fracking” on water supplies and industry supporters who say the shale oil revolution is helping revive the U.S. economy.

The WEF report also said the energy sector’s highly skilled workforce is well-paid compared to other sectors, with compensation per worker about twice the average in Germany, Norway, the United Kingdom and the United States and four times the average in Mexico and South Korea.

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January factory orders fall most in over a year

The services sector expanded at its fastest pace in a year in February, but new orders for factory goods dropped in January, data showed on Monday.

The Institute for Supply Management said its services index rose to 57.3 in February last month from 56.8 in January, besting economists’ expectations for a drop to 56.1.

It was the highest level for the index since February 2011 year in the services sector that accounts for about two-thirds of U.S. economic activity. A reading above 50 indicates expansion for the index.

The gauge of new orders improved to 61.2 from 59.4, while the employment index eased to 55.7 from 57.4.

“It was overall a solid report,” Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York said, pointing specifically to the gain in the forward-looking new orders component.

“At this level of ISM, this is not really changing our view that you’re still looking at around a 2.0 percent year in terms of GDP, but it is holding up and this is certainly what you want to see.”

The prices paid index jumped to 68.4 from 63.5, suggesting that companies could start to be squeezed by higher input costs.

The resilience in the sector’s expansion was in contrast to data from the euro zone’s private sector earlier on Monday that showed Italian and Spanish businesses dragged the currency bloc back into decline last month.

A separate report on Monday showed new orders for U.S. factory goods dropped in January by the most in over a year.

The Commerce Department said orders for manufactured goods fell 1.0 percent, not as much of a drop as the 1.5 percent decline economists were expecting. Still, it was the biggest decline since October 2010.

Financial markets saw little reaction immediately after the data as investors focused on China’s reduced economic growth target.

Both U.S. data points were consistent with an improving economy, said Joe Manimbo, market analyst at Western Union Business Solutions in Washington, D.C.

On factory orders, Manimbo said, “Despite the negative reading it was a little better than expectations and the prior number was upwardly revised, so again I think it’s consistent with the economy headed in the right direction.

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Israeli minister says world cannot protect Israel

Israel’s foreign minister says the international community’s failure to stop the violence in Syria shows it cannot keep Israel safe.

Avigdor Lieberman says the inability of international leaders and aid workers to alleviate “systematic murder of innocent civilians” in Syria “challenges all the promises of the international community that they are responsible for our security.”

Lieberman spoke Sunday on Israel Radio. His comments come as the United States tries to convince Israel to rely on global economic sanctions and diplomacy to stop Iran’s nuclear ambitions before resorting to a military strike.

Israel is worried Iran is developing nuclear weapons that could be used against it. Iran claims it only seeks nuclear reactors for energy and medical research.

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EU Leaders Declare Shift to Growth - Bloomberg

European leaders declared a turning point in the Greece-fueled debt crisis, shifting their focus away from the budget-cutting spree that has dominated two years of rescue operations.

With a second Greek aid package wrapped up and the euro region slipping into recession, the leaders committed to a pro- growth agenda that sits uneasily with a deficit-control treaty that was signed today at the 17th summit since the outbreak of the crisis.

Indian Manufacturing Expands at Close to the Fastest Pace in Eight Months - Bloomberg

India

Krugman: Greece Running Out of Alternatives to Euro Exit - Bloomberg

Nobel-prize winning economist Paul Krugman said Greece is