China appeals raw materials WTO case

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China has appealed a World Trade Organisation ruling against its export policies on raw materials, the Ministry of Commerce said, in a move which could have implications for its rare earth exports.

The decision, posted to the ministry's website late on Wednesday (31 August), made good on its promise to appeal the case before the trade body's 2 September deadline.

In July, a WTO legal panel dismissed China's claim that its system of export duties and quotas on raw materials – used in the production of steel, electronics and medicines – served to protect its environment and scarce resources.

The WTO's July ruling applies to elements including bauxite, coking coal, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc, all key industrial materials.

That ruling was a victory for the United States, the European Union and Mexico, which took China to the WTO in 2009, saying export restrictions on these raw materials discriminated against foreign manufacturers and gave an unfair advantage to domestic producers.

The decision was also seen as a potential precedent against China's stance on its exports of 17 rare earth minerals, of which China produces about 97% of the world's supplies.

China has cut exports of rare earths to the dismay of importers, which use the minerals in producing high-tech products and defence applications.

The WTO appellate body is required to make a decision within three months of China's appeal.

EURACTIV with Reuters

Both the European Commission and EU ministers have supported plans to ensure that industries get better access to raw materials, as competition for access to commodities such as rare metals becomes fiercer with globalisation.

Of particular concern to Europeans are Rare Earth Elements (REE), a series of metals and elements used to manufacture high-tech products such as wind turbines, electronic consumer goods, nanotechnologies, batteries for electric cars and various military applications.

According to the EU, China is the largest provider of rare earths, with 97% of world production. But since 2005 it has dramatically reduced export quotas on a number of rare metals (down from 60,000 tons in 2006 to 14,500 tons in 2011) and is mulling a full export ban as of 2015.

In a joint effort with the United States and Mexico, the EU took action against China in June 2009, initiating a WTO dispute settlement case for restricting exports of industrial raw materials.

  • 1 Dec. 2011: Deadline for WTO to conclude its report.

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