EU, US, Japan request WTO panel over China rare earth dispute

GENEVA - The European Union, the United States and Japan on Wednesday requested the establishment of a dispute settlement panel at the World Trade Organization over alleged Chinese export restrictions on rare earths, tungsten and molybdenum.

"Despite the very clear WTO ruling earlier this year in the first raw materials case, Beijing has not taken steps to remove these export restrictions. We regret that we are left with no other choice but to solve this through litigation," EU Trade Commissioner Karel De Gucht said in a statement.

"It is vital that US workers and manufacturers obtain the fair and equal access to raw materials like rare earths that China specifically agreed to when it joined the WTO," said US Trade Representative Ron Kirk.

EU, the US and Japan requested a special meeting of the Dispute Settlement Body to be held on July 10 to consider their requests for panels to examine China's exports measures on rare earths, according to the WTO website.

The three countries requested consultations with China on March 13 on the export restrictions of various raw materials including rare earths. Formal consultations were held in April but failed to find a solution.

Requesting a panel is the next step in the WTO dispute settlement process after requesting consultations.

China lost an appeal in the WTO in January after the US, EU and Mexico launched cases over China's export restraints on nine raw materials, including zinc, coke and magnesium.

China has abundant reserves of rare earth metals, a group of 17 elements that are vital for manufacturing an array of high-tech products, including cell phones, wind turbines, electric car batteries and missiles.

The country has supplied more than 90 percent of rare earth products on the global market, but its reserves only account for about one-third of the world's total. Disorderly mining of rare earths has been blamed for environmental damage in rare-earth-rich regions across China.

A white paper published by the Information Office of the State Council, or China's cabinet earlier this month said China would continue to intensify regulations for the rare earth sector while supplying the global market in line with WTO rules.

Stricter environmental standards and protective exploitation policies would be implemented for the rare earth industry, the white paper added.