EU, US, and Japan challenge China at WTO over rare earth quotas

Rare earths are critical for the production of many high-tech products. Beijing has set quotas on the export of the minerals. Now a joint case by the EU, U.S. and Japan is being filed with the WTO challenging the quotas. The joint filing by the three is not only rare but the first so far!

The group argues that China which produces 95 per cent plus of the global supply is pushing up prices. China replies that it is enforcing quotas to limit environmental damage through excessive mining. Apparently China suddenly has a laudable interest in the environment! A Chinese foreign ministry spokesperson said:"We think the policy is in line with WTO rules,""Exports have been stable. China will continue to export, and will manage rare earths based on WTO rules," he said.

The 17 rare earth metals are used in many electrical and renewable energy devices. Critics claim that prices are kept low in China whereas quotas make the earths more expensive for foreign competitors.

Ivor Shago chair of mining services at Rare Earths Global said that the U.S. should have decided itself to produce rare earths many years ago."They took a deliberate decision about 20 years ago not to develop [rare earth mining] and instead to buy the completed products,""Because of the deliberate decision that was taken, in China we have developed skills and expertise that the others do not have." Nevertheless it remains to be seen whether China is taking advantage of that fact in contravention of WTO rules. For more see this BBC article.