WTO rules in favors of US against China on rare earths dispute

The United States has welcomed the ruling of the dispute settlement body of World Trade Organization (WTO) against China in its dispute on rare earths, tungsten and molybdenum.
"China's decision to promote its own industry and discriminate against US companies has caused US manufacturers to pay as much as three times more than what their Chinese competitors pay for the exact same rare earths," US Trade Representative (USTR) Mike Froman said.
WTO rules prohibit this kind of discriminatory export restraint and this win today, along with our win 2 years ago in an earlier case, demonstrates that clearly, he said.

Forman expressed hope that this will discourage further breaches of WTO rules that hurt American manufacturers.
The US initiated this WTO dispute in 2012, in cooperation with the European Union (EU) and Japan, after China drastically reduced its export quotas for rare earths and caused a spike in world prices and considerable disruption to the global rare earths market.
The dispute builds on and expands an earlier victory that the US achieved in 2011 challenging China's use of export restraints on a different set of raw material inputs used in the steel, aluminum, and chemicals industries.

Senators Sherrod Brown and Rob Portman applauded the latest WTO ruling.

"Manufacturing is the backbone of the American economy. But in order for our industry to compete, it needs a level playing field. That means holding countries like China accountable when they violate trade policy by hoarding rare earth and other materials.
The World Trade Organization's decision will help protect American businesses and the jobs they support," Brown said.
"China clearly violated WTO rules, and I applaud the US Trade Representative for taking this enforcement action against China's illegal export restrictions of these critically important raw materials," Senator Debbie Stabenow said.
China's export restrictions on rare earth elements hurts American production in a wide range of industries - from hi-tech batteries for advanced technology vehicles, to smart phone batteries to important military technologies, he said.

Stabenow said China now controls production of more than 90 per cent of the world's supply of these rare minerals-and has increasingly been using export controls to reduce the amount available on the world market.
This in turn has sent costs skyrocketing for businesses that manufacture products that require rare earth elements.
China also has policies to prevent foreign companies from mining rare earth elements within its borders, he added.