Bloomberg News

EU Challenges China’s Rare-Earth Export Restrictions at WTO

March 13, 2012

The European Union joined the U.S. and Japan in challenging China’s export restrictions on raw materials including 17 rare earths used in high-tech products, tungsten and molybdenum.

“China’s restrictions on rare earths and other products violate international trade rules and must be removed,” EU Trade Commissioner Karel De Gucht said today in an e-mailed statement. “These measures hurt our producers and consumers in the EU and across the world, including manufacturers of pioneering hi-tech and ‘green’ business applications.”

De Gucht said that despite the World Trade Organization’s “clear ruling” in a previous dispute over raw materials, “China has made no attempt to remove the other export restrictions. This leaves us no choice but to challenge China’s export regime again to ensure fair access for our businesses to these materials.”

The U.S. will file a complaint at the WTO today, deepening a trade dispute between the world’s two largest economies. President Barack Obama will personally announce the action, an administration official said yesterday in Washington, speaking on condition of anonymity ahead of the White House statement.

The move adds to pressure the U.S. is piling on China in an election year, with Obama calling for efforts to help balance the trade deficit it has with the Asian nation and allow the Chinese currency to appreciate. China produces at least 90 percent of the world’s rare earths, used in Boeing Co. (BA) helicopter blades and Toyota Motor Corp. hybrid cars, and has curbed output and exports since 2009 to conserve mining resources and protect the environment.

To contact the reporter on this story: Jurjen van de Pol in Brussels at jvandepol@bloomberg.net

To contact the editor responsible for this story: James Ludden at jludden@bloomberg.net


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