GENEVA (AP) - The
World Trade Organization ruled Wednesday that China has violated
international trade rules with its restrictions on the export of 17 “rare
earths” and two other minerals that have key industrial and high-tech uses.
complaints filed by the United States, the European Union and Japan, the WTO
dispute settlement panel found that China’s restrictions “breach” its
obligations to the world trade body because the country could not properly
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,” said U.S. Trade
Rep. Michael Froman.
The case applies to
17 rare earth minerals which, despite their name, are for the most part
relatively abundant, and are commonly used to make goods including hybrid
cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights and
China accounts for
more than 90 percent of production of rare earth minerals, though it has
only about 30 percent of the deposits of rare earths in the Earth’s crust.
In 2009, it alarmed foreign companies by limiting exports of the rare earths
in an attempt to boost its domestic manufacturing base. Chinese officials
had also expressed the hope that foreign companies which use rare earths
would shift production to China and give technology to local partners.
But the WTO panel
decided that trade in a country’s natural resources, once extracted from the
ground and put onto the market for sale, is subject to WTO rules. The U.S.,
EU and Japan argued that the export restraints artificially increased world
prices for the minerals, while artificially lowering prices for Chinese
In a statement on
the panel’s ruling, the EU’s mission to the WTO said the ruling affects
minerals used as essential components by a wide range of European
industries. And while no one contests China’s right to impose environmental
and conservation policies, EU officials said the panel’s ruling affirms that
“the sovereign right of a country over its natural resources does not allow
it to control international markets or the global distribution of raw
The panel’s report
on China’s export restraints, which include export duties and quotas, may be
adopted or appealed within 60 days. If adopted, the U.S., EU and Japan would
be entitled to retaliate trade-wise if China did not comply with WTO rules.
China’s WTO mission
in Geneva did not immediately respond to a request for comment.