April 5, 2014
Trade Group Rules Against China in Rare Earths Dispute. The World Trade Organization (WTO) has ruled against China in a trade dispute over rare earth elements (REE) as well as tungsten and molybdenum, the group announced on 26 March. The European Union, Japan, and the United States brought trade cases against China in March 2012 concerning alleged unfair export restraints on the materials (see Eos, 93(13), 134–135, doi:10.1029/2012EO130002).
WTO ruled against China on issues related to export duties, export quotas, and trading rights of the materials. In looking at export quotas, for example, a WTO panel found that “the overall effect of the foreign and domestic restrictions is to encourage domestic extraction and secure preferential use of those materials by Chinese manufacturers.”
In response to the ruling, U.S. Trade Representative Michael Froman said, “China’s decision to promote its own industry and discriminate against U.S. companies has caused U.S. manufacturers to pay as much as three times more than what their Chinese competitors pay for the exact same rare earths. WTO rules prohibit this kind of discriminatory export restraint, and this win today, along with our win 2 years ago in an earlier case, demonstrates that clearly.”
A statement by the European Commission pronounced that “the verdict is clear: Export restrictions cannot be imposed supposedly to conserve exhaustible natural resources if domestic use of the same raw materials is not limited for the same purpose.” China has 60 days from the date of the ruling to file an appeal. Rare earths are 17 chemically similar metallic elements that are widely used in many
high-technology applications; tungsten and molybdenum also are important materials used in industrial production. China has about 37 % of the world’s reserves of REEs and accounts for more than 95 % of the world’s production of REEs, according to the British Geological Survey.