China's response to WTO ruling
China Legally Right in Curbing Rare Earth Exports: Report
Published:Thursday, 7 Jul 2011 | 5:42 AM ET
Chinais well within its rights, legally and morally, to limit rare earthexports, argued an article in Chinese state media on Thursday, daysafter the World Trade Organization ruled against China on its curbs ofraw materials exports.
 |
|
Stringer | AFP | Getty Images
Bulldozer scoop soil containing various rare earth to be loaded on to a ship at a port in Lianyungang, east China's Jiangsu province in September, for export to Japan.
|
ThePeople's Daily, the mouthpiece of China's ruling Communist Party, saidclaims by countries that China's export curbs on the minerals threatenedtheir economic and national security were "groundless."
"It's not that other countries don't have their own supplies, it is just that they have hidden them away," it said.
"China'shandling [of rare earths] does not violate international rules and isnot contrary to its WTO accession promises," the paper said.
TheWTO ruled on Tuesday that China had violated its rules when it curbedexports of coveted raw materials such as bauxite, coke and magnesiumused in the production of steel, electronics and medicines.
Thatruling, initiated by complaints filed by the United States, theEuropean Union and Mexico in 2009, was seen as a possible precedent for afuture case on China's rare earth export quotas.
Inits ruling, the WTO panel said China's domestic policies fell short ofdemonstrating that its export duties on raw materials were to curtailpollution or conserve exhaustible natural resources -- reasons alsooffered for its rare earth quotas.
Chinais widely expected to appeal the ruling. It has taken steps toconsolidate and rein in its polluting rare earths industry, which maybolster its case should rare earth quotas be the target of a similar WTOchallenge.
Thecentral government slashed rare earth export quotas by 35 percent forthe first half of 2011, building on previous quota cuts. That movechoked off global supplies, boosted prices and angered China's tradingpartners.
Chinaproduces 97 percent of the world's supplies of rare earths, a group of17 minerals used in electronics and defence and renewable energyindustries.
Asidefrom reiterating China's stance, the report cited experts whohighlighted United Nations declarations on sovereignty over resourcesand WTO rules that would allow China to make exceptions with its rareearth quotas under trade law.
"Westerncountries cite WTO clauses to criticize China ... but there are alwaysexceptions to the WTO legal provisions," the paper quoted prominentTsinghua University scholar Zhou Shijian as saying.
"Forexample, article 20 of the General Agreement on Tariffs and Tradeexpressly stipulates that contracted parties may, for certain specialpurposes, limit imports and exports," the paper said.
The WTO did not permit those general exceptions on the raw materials decision.
Copyright 2011 Thomson Reuters. Click for restrictions.