Wednesday, March 14, 2012

The EU, US and Japan joined forces against China

GENEVA - The EU, US and Japan joined forces against China by taking a so-called "rare earths" trade dispute, critical to high-tech industries, to the World Trade Organization on Tuesday.

"I can confirm that we have received a joint complaint on the rare earth question from the United States, European Union and Japan," a WTO spokesman told AFP.

China is the world's biggest producer of rare earths -- 17 elements critical to the making of high-tech products from iPods to missiles -- and its moves to control Chinese production and exports have raised a global outcry.

In Washington, US Trade Representative Ron Kirk said that the United States had laid a complaint, commenting that China "continued to make its export restraints more restrictive, resulting in massive distortions and harmful disruptions in supply chains for these materials throughout the global marketplace."

He said: "Because China is a top global producer for these key inputs, its harmful policies artificially increase prices for the inputs outside of China while lowering prices in China."

A short time earlier, the European Union announced it was joining the US and Japan in making the complaint, formally requesting "dispute settlement consultations" with China at the World Trade Organization, the first step in any bid to settle trade disputes.

It is the second EU challenge over Chinese trade in raw materials at the WTO, after the Geneva-based body earlier this year found China to have restricted exports of raw materials such as bauxite, zinc or magnesium.

Details from the complaint on rare earths have still not been made public.

"China's restrictions on rare earths and other products violate international trade rules and must be removed," EU Trade Commissioner Karel De Gucht said in a statement announcing the challenge.

"Despite the clear ruling of the WTO in our first dispute on raw materials, China has made no attempt to remove the other export restrictions," said De Gucht.

"This leaves us no choice but to challenge China's export regime again to ensure fair access for our businesses to these materials," he added.

Earlier on Tuesday, Beijing defended its restrictions on exports, saying that they complied with WTO rules and cited concerns about the environment.

"Based on environmental protection and in order to achieve sustainable development, China carries out management policies over the export of rare earths," foreign ministry spokesman Liu Weimin said.

"We believe such measures comply with WTO rules."

Critics say Beijing's strategy is aimed at driving up global prices of the metals and forcing foreign firms to relocate to the country to access them.

But Beijing says the restrictions are necessary to conserve the highly sought-after natural resource, limit harm to the environment from excessive mining and meet domestic demand.

View the original article here

Source From Channel News Asia

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