China Scraps Rare Earths Export Quota After WTO Ruling

20/05/2015 12:00 - 494 Views

China on Wednesday told the World Trade Organization that it had scrapped a quota system limiting exports of rare earth minerals after complaints by the US, EU and Japan.

China told WTO members that it had taken measures on January 1 and May 1 this year after losing a WTO case in 2014. It had been given time until May 2 to implement the changes.

The restrictions were imposed in 2011 as China tried to develop its own industry for 17 metals such as tungsten which are vital for the manufacture of many high technology products including cellphones, batteries for hybrid cars and wind turbines.

China is a leading player in rare earths and holds 90% of the global market share despite having only 23% of the world's reserves.

The case follows complaints lodged in 2012 by the United States, the European Union and Japan that the system was designed to gain market advantage for domestic producers with cheaper access to the raw materials.

Japan on Wednesday said it would closely monitor China, which has twice lost the case at the WTO.

Under the new guidelines, rare earth minerals will still require an export license in China but the amount that can be sold abroad will no longer be covered by a quota.

The United States on Wednesday hailed the Chinese move but expressed concern that the license regime could turn into de facto quotas.

Source: IndustryWeek