The WTO Rules against China on Measures Limiting Export of Rare Earths

31-03-2014

On 26 March 2014, the World Trade Organisation (WTO) circulated a report on the dispute about China’s rules on the exports of rare earths. The dispute had been initiated by complaints from the EU and Japan, with another 16 countries participating as third parties in the proceedings. In the report, a WTO dispute settlement panel concluded that Beijing had breached international trade rules by applying restrictions on its exports of various forms of rare earths, tungsten and molybdenum. Rare earths are a set of strategic minerals necessary to produce modern smartphones, cameras and hybrid cars. The WTO ruling is not definitive, and China has 60 days to appeal. It is, however, unlikely that the organisation’s Appellate Body will reverse the decision taken by the dispute settlement panel. If Beijing does not comply, this may pave the way to imposing retaliatory measures against products exported by China.

On 26 March 2014, the World Trade Organisation (WTO) circulated a report on the dispute about China’s rules on the exports of rare earths. The dispute had been initiated by complaints from the EU and Japan, with another 16 countries participating as third parties in the proceedings. In the report, a WTO dispute settlement panel concluded that Beijing had breached international trade rules by applying restrictions on its exports of various forms of rare earths, tungsten and molybdenum. Rare earths are a set of strategic minerals necessary to produce modern smartphones, cameras and hybrid cars. The WTO ruling is not definitive, and China has 60 days to appeal. It is, however, unlikely that the organisation’s Appellate Body will reverse the decision taken by the dispute settlement panel. If Beijing does not comply, this may pave the way to imposing retaliatory measures against products exported by China.