China Violated Global Trade Rules on Rare Earths Exports – WTO
By Esther Tanquintic-Misa | March 27, 2014 1:38 PM EST
The World Trade Organization has ruled on a case lodged against China, saying the latter's restrictions of its rare earths exports violated global trade rules.
China Opposes Release of WTO’s Rare Earths Report Favouring US, Japan and EU (Reuters)
The complaint was lodged two years ago by the U.S. The European Union and Japan later joined in. All three economic superpowers asserted the unlawful exports restrictions artificially raised the prices of rare earths for other countries and gave preferable pricing to Chinese manufacturers.
Rare earths are 17 elements, including lanthanum, tungsten, neodymium and molybdenum, that are highly essential for the manufacture of high tech gadgets and armaments.
China imposed three distinct types of restrictions on the export of rare earths, tungsten, and molybdenum, according to the WTO.
- it imposed duties (taxes) on the export of various forms of those materials
- it imposed an export quota on the amount of those materials that can be exported in a given period;
- it imposed certain limitations on the enterprises permitted to export the materials.
Moreover, China also imposed quantitative limits (quotas) on the amount of rare earths, tungsten, and molybdenum that can be exported in a given period.
But China argued the restrictions were necessary to preserve its exhaustible natural resources, as well as reduce pollution caused by mining.
A panel created by the WTO pursuant to the request of the U.S. in June 2012 had stated that it found China's export quotas were designed to achieve industrial policy goals rather than conservation.
"Conservation does not allow Members to adopt measures to control the international market for a natural resource, which is what the challenged export quotas were, in the view of the Panel, designed to do," the WTO report said.
The report also said it found that the challenged export quotas do not work together with measures restricting domestic Chinese use of rare earths, tungsten, and molybdenum.
"After examining the various domestic measures that China claimed restricted domestic access to rare earths, tungsten, and molybdenum, the Panel concluded 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."
All three economic superpowers lauded the WTO report.
The EU, while saying it does not contests China's right to impose environmental and conservation policies, it did say that "the sovereign right of a country over its natural resources does not allow it to control international markets or the global distribution of raw materials."
The panel's report on China's export restraints may be adopted or appealed within 60 days.
"I think China will definitely appeal because the WTO ruling is unfair," an official at the Chinese Society for Rare Earths told Financial Times.
To report problems or to leave feedback about this article, e-mail:
To contact the editor, e-mail:
Most Popular Slideshows
- Real Life ‘Frozen’: Snow Overwhelms The US, Kills 7; More To Come (Pictures)
- ‘The Walking Dead’ Season 5, Episode 8 Spoilers: Daryl Dixon Is Set To Burn The Place Down in ‘Coda’
- Angelina Jolie, Brad Pitt in Sydney for ‘Unbroken’ Red Carpet Premiere [PHOTOS]
- G20 Summit Awkward Moments: Putin Yawns, Mystery Bubbles Appear, F18 Drama Ensues
Join the Conversation
- Air Canada Expands Vancouver Boeing 787 Dreamliners To Beijing, Seoul, Shanghai, Tokyo-Narita Routes
- Travel Alert: Frequent Flyer Tie-Up Between Virgin Australia, South African Airways Enhanced
- Canada Consumer Alert: Tim Hortons Prices Of Coffee, Sandwiches To Go Up Effective Nov 26
- Travel Alert: New Delta Air Lines Airbuses Could Be Seen In Australia Soon
- Product Recall: Graco Recalls Baby Strollers in Canada, U.S. Due To Amputation Risks
- Walmart Early Price Matching Special Event On Nov. 21, 2014 Matches Its Competitors' Black Friday 2014 Prices And Includes Exclusive Deals For Samsung LED HDTVs And iPad Air 2 [WATCH VIDEO]
- US Plane Flying Over Russian Skies Spotted; Vladimir Putin Ready For 'Practical Cooperation' With US
- Walmart Pre-Black Friday 2014 Sale On Nov. 21, 2014 Includes Discounts On The 'NBA 2K15' For PS4 And The 'Skylanders Trap Team’ Starter Kit [WATCH VIDEO]
- Alleged 'Microsoft Lumia 1030' Front Panel Leaked With Capacitive Buttons; 'Xbox One' Owners To Get Free Goodies On Anniversary
- Black Friday 2014 Sale: Top Deals On Game Consoles Xbox One, PS4, Nintendo Wii U And More
- Nexus 6 Release Date And Price Under AT&T, T-Mobile And Sprint Listed
- Cold War 2: Russia, China And North Korea’s Blacklisted Company Fortify Alliance -- Reports