Japan, U.S., EU Win Rare Earth Dispute with China

Geneva, March 26 (Jiji Press)--The World Trade Organization said Wednesday that China's curbs on rare earth exports violate global trade rules. A WTO dispute settlement panel fully backed a joint complaint from Japan, the United States and the European Union, urging China to take corrective measures. The case was Japan's first complaint against China at the WTO. China can file an appeal with the Appellate Body, the WTO's top court, within 60 days. In its report, the panel said that China's restrictions on exports of rare earths, tungsten and molybdenum violate its pledge to abolish export duties, made when the country joined the WTO in 2001. The report also said the restrictions do not amount to export volume quotas, which are allowed when they are intended to preserve natural resources. China had claimed that its export curbs do not violate WTO rules because they are designed to protect natural resources and the environment. Starting in 1999, China imposed export restrictions on the rare earth minerals needed for making high-tech products. The country effectively suspended its rare earth exports to Japan after a Chinese fishing ship collided with Japan Coast Guard vessels off the Senkaku Islands, the East China Sea islands controlled by Tokyo but also claimed by Beijing, in 2010. After China refused to lift the curbs, Japan, the United States and the EU jointly filed the complaint with the WTO in March 2012. END