WTO rules China's export measures on rare earth inconsistent with rules

The World Trade Organization (WTO) ruled on Wednesday that China had acted inconsistently with WTO rules with regard to the export measures imposed on the rare earth materials.

In regard of the dispute case which was brought against China by the European Union (EU), Japan and the United States in 2012 to WTO, the panel report, circulated Wednesday afternoon, said that China's export duty, export quota, and export quota administration and allocation measures imposed on rare earths, tungsten and molybdenum products were inconsistent with the WTO rules and China's Accession Protocol.

Meanwhile, the panel recognized China's comprehensive resource and environment conservation measures taken for the products at issue, and rejected EU's claim that the "export performance" requirement imposed by Chinese government on enterprises applying for molybdenum export quotas discriminated foreign enterprises.

The head of the Department of Treaty and Law in the Chinese Ministry of Commerce (MOFCOM) said in a statement that China welcomed the panel's ruling in regard of the "export performance" and regretted on its ruling over the measures taken by China over the exportation of rare earth materials.

The head pointed out that facing increasing resource and environment pressure, Chinese government has been reinforcing and improving its comprehensive regulation on high-polluting, high-energy-consuming and resource-consuming products in recent years, in an effort to respond to the needs to conserve exhaustible natural resources and protect environment.

It manifested China's endeavor to maintain global sustainable development, and China believed that these regulatory measures were perfectly consistent with the objective of sustainable development promoted by the WTO and contributed to the coordinated development of resources, environment and human beings, as highlighted by the head.

The head further stated that China would continue to strengthen its regulation on resource products in a WTO-consistent manner and maintain fair competition, and noted that China was currently assessing the panel report and would follow the WTO dispute settlement procedures to settle this dispute.

The EU, Japan and the U.S. teamed up to bring a joint case in March 2012 to the WTO over China's measures related to the exportation of rare earths, tungsten and molybdenum, having claimed that the restriction has limited other countries' access to those minerals and gave China a competitive advantage while hurting producers and consumers in other parts of the world.

The three trading powers required to establish a panel to probe into this dispute in June 2012, which was established a month later by WTO's Dispute Settlement Body (DSB).

Rare earths, a class of 17 mineral elements, are one of the most sought-after metals for their vital roles in green technologies like wind turbines and electric car batteries, and of particular concern, in military sectors.

Statistics showed that China, with its reserve accounting for some 23 percent of the global total, supplies over 90 percent of the world's market demand.