Rare Earths and the WTO: Tougher case than it looks Ifri-CIGS Op-Ed Series, 28 March 2012
Deepening their partnership, Ifri and the Canon Institute for Global Studies (CIGS) are launching a series of op-eds, written both by Ifri and CIGS experts. This new series aims at providing the European and Asian public with original and different visions on the rapidly evolving international affairs.
The European Union, the United States and Japan have finally decided to take their case on China’s rare earth export policies to the WTO. China stands accused of violating the terms of its WTO accession agreement by limiting exports of rare earths and driving an artificial wedge between prices in China and prices abroad – in essence using its resource advantage to shelter nascent high-tech industries and even to coerce the transfer of foreign expertise. Beijing, meanwhile, argues that this is a purely internal matter motivated by the need to impose environmental restrictions on a highly polluting industry. Uncontrolled production practices have indeed wrought havoc on local environments and human health in rare earth producing regions. The Chinese authorities argue that export permits and higher prices for rare earths are needed to allow industries to adapt to higher production standards – export tariffs and quotas being a useful tool in China’s eye.