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China pilloried over rare earths

March 14, 2012

The European Union, the US and Japan have asked the World Trade Organization (WTO) to settle a dispute with China over its restrictions on raw materials exports and rare earths in particular.

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Image: picture-alliance/dpa

China accounts for about 97 percent of the world's mining of 17 rare earth metals, which are at a premium particularly in the electronics industry, being used in a wide range of consumer products from mobile phones to electric cars.

European Union officials said the cost of China's export restrictions ran into billions of euros (dollars).

"China's restrictions on rare earths and other products violate international trade rules and must be removed," EU Trade Commissioner Karel de Gucht said in a statement. "These measures hurt our producers and consumers in the EU and across the world, including manufacturers of pioneering hi-tech applications," de Gucht added.

Act of revenge?

Japan is worried about Beijing's export restrictions, fearing that China will continue to hold back shipments of rare earths as punishment after a bilateral territorial dispute.

The US for its part has already begun to toughen its stance on trade with China. President Barack Obama created a new interagency trade enforcement center, which is to ratchet up pressure on Beijing to honor WTO rules.

China on Tuesday criticized the move by the EU, the US and Japan. "This may harm mutual trade relations and could therefore backfire," China's state-controlled Xinhua news agency commented, adding that the West's joint action was "premature and unfair."

hg/nk  (Reuters, dpa)