Brussels, 05/07/2011 (Agence Europe) - As expected, the World Trade Organisation (WTO) has backed a case jointly brought by the United States, Mexico and EU against restrictions imposed by China on exports of raw materials. This, Trade Commissioner Karel De Gucht says, is a “strong signal” to Beijing as contention over rare earths grows.
Along the lines of its preliminary verdict on stakeholders issued in April, the WTO ruled in favour of the complainants on Tuesday 5 July, considering the unilateral measures taken by China to restrict its exports of nine raw materials as being incompatible with WTO rules. The WTO's condemnation concerns export restrictions applied by China on key raw materials such as bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbine, yellow phosphorous and zinc. The United States, Mexico and the EU had together filed a complaint with the WTO in 2009 against Chinese export restrictions on essential raw materials for many intermediary products in the steel, non-ferrous metals and chemicals industries.
Although the complaint does not concern export restrictions for 17 minerals known as rare earths, which are essential for the manufacture of high-tech products such as flat screens, mobile phones, lasers and hybrid cars, of which China holds 35% of accessible reserves and 97% of the global market, and on which it decided to reduce by 35% its export quotas during the first half of 2011, Karel De Gucht states that the WTO verdict “sends a strong signal” to Beijing “to refrain from imposing unfair restrictions to trade and takes us one step closer to a level playing field for raw materials. (…) Furthermore in the light of this result, China should ensure free and fair access to rare earth supplies”.
The parties involved have 60 days to appeal the decision. (E.H./transl.jl)