Data provided by McGregor BFA
All data is delayed
Loading...
See More

China braces for rare earths WTO case

Mar 13 2012 12:17 Reuters

Related Articles

Canadians, Chinese in SA rare earth deal

China's rare earths cutback raises ire

China defends cutbacks on rare earths

China pares back rare earths exports

China denies rare earth 'cartel'

Rareco delivers surprise bonus

 

Beijing - China is preparing to defend itself should the United States and other countries take its rare earth export restrictions to the World Trade Organisation (WTO), state news agency Xinhua on Tuesday cited a government minister as saying.

“We feel sorry for their decision to complain to the WTO,” Minister of Industry and Information Technology Miao Wei told Xinhua.

“In the meantime, we are actively preparing to defend ourselves and will explain the case if they bring the complaint against us.”

The European Union, United States and Japan formally asked the WTO on Tuesday to settle a dispute with China over Beijing’s restriction on exports of raw materials, including rare earth elements critical to major industries.

The EU’s trade chief, Karel De Gucht, said the three trading powers were making the dispute settlement request, the first step before filing a full trade case, following a successful EU challenge at the WTO on similar restrictions earlier this year.

“China’s restrictions on rare earths and other products violate international trade rules and must be removed,” De Gucht said.

“These measures hurt our producers and consumers in the EU and across the world, including manufacturers of pioneering hi-tech and ’green’ business applications.”

China accounts for about 97% of the world’s output of the 17 rare earth metals, which are crucial for global electronics production and the defence and renewable-energy industries. They are also used in a wide range of consumer products, from cellphones to electric cars.

The dispute is one of several between Beijing and the world’s other three largest economic powers, as China’s rise changes the world economic order. It is the first case to be jointly filed by the EU, United States and Japan with the WTO, an EU official said.

De Gucht said during a recent visit to Hong Kong that China needed to be sensitive to perceptions that its huge economy is a threat in Europe. The cost to EU businesses of China’s export restrictions runs into the billions of euros, officials say.

Trade between the EU and China has boomed in recent years, reaching almost €400bn in 2010, but EU complaints against Chinese dumping range from the shoe industry to steel fasteners. De Gucht has in the past complained that China subsidises “nearly everything”, making it hard to compete.

An EU decision to make all airlines using EU airports pay for carbon emissions has brought threats of retaliation from China, as well as from the United States and Russia.

Critics complain it is a tax, which infringes sovereignty. The EU said it is not a tax because it is based on buying and selling allowances on a market, and airlines can avoid costs by finding other ways to offset their emissions.

Japan has been worried about supply of rare earths, especially after fears that China held back shipments of rare earths as punishment after the territorial dispute last year.

US President Barack Obama is currently toughening his stance on China trade ahead of November’s presidential election. He recently created a new interagency trade enforcement centre, which is expected to be up and running in the coming months and whose primary focus is to make sure China honours WTO rules.

Obama administration officials also have been considering a WTO complaint against anti-dumping and countervailing duties that China imposed late last year on US auto exports.

Beijing’s restrictions on exports of the valuable minerals became a flash point in 2010, when China halted rare earth shipments to Japan during a diplomatic dispute.

The United States and the EU have long been expected to file a WTO case against China’s rare earth mineral export curbs, but appeared to be awaiting the outcome of a separate case against Beijing’s exports on a long list of other raw materials.

That dispute was finally decided in favour of the United States, EU and Mexico in January after China lost an appeal to keep its raw material export curbs. Beijing has not yet announced how it intends to comply with the January ruling.

 


 
wto  |  rare earths
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

Don't be voting cattle, warns Tutu

Archbishop Emeritus Desmond Tutu has warned South Africans to think carefully before they cast their ballots on 7 May.

 
 

Latest elections multimedia

11 Julius Malema quotes you'll never forget
DA won't get 30% - Zille
The EFF's ad was banned, see why
Why Jack Parow wants you to vote on 7 May

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...