WTO takes on China’s rare earth exports controls

   The United States on Wednesday asked the World Trade Organization to establish a dispute settlement panel to decide U.S. claims regarding China’s export restraints on rare earths, tungsten and molybdenum.
   The European Union and Japan have also requested similar WTO panels.
   “These materials are key inputs in a multitude of U.S. manufacturing sectors and American-made products, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals,” said U.S. Trade Representative Ron Kirk, in a statement. “It is vital that U.S. workers and manufacturers obtain the fair and equal access to raw materials like rare earths that China specifically agreed to when it joined the WTO.”
   Earlier this year, the United States won a landmark WTO challenge against China’s export restraints on nine other industrial inputs. Although China argued in the case that its export restraints could be justified as conservation or environmental protection measures, the WTO concluded otherwise.
   “Once again, despite China’s characterizations, its export restraint measures on rare earths, tungsten and molybdenum appear to be part of a troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers at the expense of foreign manufacturers. Specifically, because of China’s position as a leading global producer of these materials, its export restraint measures give China the ability significantly to affect global supply and pricing,” the Office of the U.S. Trade Representative said. “These measures can provide important advantages to China’s downstream producers, to the detriment of their U.S. and other foreign counterparts. These measures also can create substantial pressure on foreign producers to move their operations, jobs and technologies to China.”
   The United States, European Union and Japan requested formal consultations with China on March 13. The parties held consultations on April 25-26, without resolution of the matter.