Beijing blocks WTO arbitration in rare earths dispute
By Lénaïc Vaudin d’Imécourt | Wednesday 11 July 2012
China has blocked requests by the EU, Japan and the US to establish a World Trade Organisation (WTO) dispute settlement panel regarding its restrictions of rare earths, tungsten and molybdenum exports, the WTO announced, on 10 July. A second request – that China will this time not be able to dodge – will be filed on 23 July at the next meeting of the WTO’s Dispute Settlement Body.
The EU filed a legal complaint against Beijing in March, challenging its export restrictions on rare earths, 17 highly valuable metals used in the manufacturing of high-tech products, from hybrid vehicles to computers and mobiles. But China, which said it was “not in a position to accept the establishment of a panel,” has been arguing that the policies being challenged by the EU are aimed at protecting natural resources, achieving sustainable economic development and protecting the environment. China said it was “puzzled by the complainants’ initiation of the panel process as it has no intention of protecting its domestic industry through means that would distort trade,” the WTO noted in a statement. China is the world’s first producer of these metallic minerals, supplying over 95% of global demand.
In a similar case in which China claimed it was restricting exports of eight raw materials on environmental grounds, the WTO’s Appellate Body found in January that the Asian state was breaking global trade rules, giving an unfair advantage to domestic companies.
China’s attempt to defer the establishment of a WTO panel is a “normal procedure,” part of the “legal games,” an EU source told
Europolitics. It is “simply a delaying tactic” for China to prepare its legal response, the source added. n