EU asks WTO to act on China rare earths

Michael Carroll
01 Feb 2012

The European Union is urging the World Trade Organization (WTO) to probe China’s control of rare earths, after the trade body ruled the state infringes global trade rules covering other raw materials.

The WTO yesterday rejected an appeal from China over claims the country restricts exports of materials including bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. The WTO ruled that China is failing to live up to promises to eliminate export duties on the majority of those materials, made when the country joined the trade body.

While the case didn’t specifically mention rare earths, European lawmakers say the ruling should now form the bedrock of a case examining those elements.

"China now must comply by removing these export restrictions swiftly and furthermore, I expect China to bring its overall export regime – including for rare earths - in line with WTO rules,” European Union trade commissioner Karel De Gucht states.

Rare earths are key components in high-tech products including precision instruments, hybrid cars, missiles, mobile phones and networks. Despite the name, the elements aren’t scarce. Rather they are typically hard to mine, which increases their value. Adding to that pressure is China’s pricing model. The country raised taxes on rare earth production last year, a move that followed threats to cut its exports of the materials in 2010.

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