US, EU, and Japan Request WTO Dispute Settlement Panel in China Rare Earths Case

June 27, 2012

On June 27, 2012, U.S. Trade Representative (USTR) Ron Kirk announced that the United States, the European Union and Japan, have each requested the establishment of a World Trade Organization (WTO) dispute settlement panel to decide claims regarding China’s unfair export restraints on rare earths, tungsten and molybdenum. The three countries called for a special meeting of the WTO Dispute Settlement Body to be held on July 10, 2012, to consider their requests. The materials involved in the dispute are used as inputs in a variety of products and manufacturing sectors, including hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum, and chemicals. According to the Office of the United States Trade Representative, China imposes several different types of export restraints on these materials, including export duties, export quotas, export pricing requirements and related export procedures and requirements.

On March 13, 2012, the United States, the European Union and Japan, requested formal consultations with China regarding China’s export restrictions on various forms of rare earths, as well as tungsten and molybdenum. The consultations were held on April 25-26, 2012, but did not result in resolution of the matter. Furthermore, on June 20, 2012, China issued a White Paper in which its State Council indicated that China intends to maintain its rare earth export restrictions.

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