GENEVA/WASHINGTON — China has lost a dispute at the World Trade Organization over restrictions on its exports of rare earth exports, handing Europe and the United States a victory over what they see as Beijing’s unfair trade practices.
EU Trade Commissioner Karel De Gucht:
“Today’s ruling by the WTO on rare earth shows that no one country can hoard its raw materials from the global market place at the expense of its other WTO partners.”
China produces more than 90 percent of the world’s rare earths, key elements in defense industry components and modern technology from iPhones and hard drives to wind turbines.
China imposed strict rare export quotas in 2010, saying it was trying to curtail pollution and preserve resources.
Prices of the prized commodities soared by hundreds of percent, and the United States, European Union and Japan complained that the export restrictions gave Chinese companies an unfair competitive edge. Limits on exports of rare earths, as well as the metals tungsten and molybdenum, were needed to prevent over-mining, according to China.
Any of the parties in this case can appeal within 60 days.
The export limits allowed China to artificially increase world prices for raw materials crucial to make products like hybrid car batteries, wind turbines and energy-efficient lighting, while artificially lowering prices for Chinese producers.
U.S. Trade Representative Michael Froman in a statement:
“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.”