WTO Panel Rules in Favor of US in China Rare Earth Metal Dispute, Says USTR
A World Trade Organization (WTO) settlement panel found Chinese export restraints on two rare earth metals, tungsten and molybdenum, violate WTO agreements, U.S. Trade Representative (USTR) Michael Froman announced on March 26. The panel ruled in favor of the U.S. in the dispute, the Office of the USTR said in a press release. The WTO website has not yet published the ruling. U.S. companies import the rare earth metals to use as inputs for hybrid car batteries, wind turbines, energy-efficient lighting, steel, advanced electronics, automobiles, petroleum and chemicals, USTR said.
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“China’s decision to promote its own industry and discriminate against U.S. companies has caused U.S. manufacturers to pay as much as three times more than what their Chinese competitors pay for the exact same rare earths,” said Froman in the release. “We hope this will discourage further breaches of WTO rules that hurt American manufacturers. This victory shows that we stand prepared to take action whenever necessary to protect the high-quality middle class American jobs that trade supports.” The Chinese export restraints on the rare earth metals include export duties, export quotas and export quota administration requirements, said USTR. The ruling may be appealed within 60 days, according to WTO rules.
Senate Finance committee Chairman Ron Wyden, D-Ore., praised the ruling. “The World Trade Organization’s decision sends a strong message to China that its mercantilist trade restrictions on rare earth elements have no place in the 21st Century,” said Wyden. “To compete in the global, high-tech economy for decades to come -- and secure the jobs that come with it -- the United States also needs to develop a stable rare earths supply chain here in America, which is why Sen. Murkowski and I have introduced legislation to do just that.” Wyden, Sen. Lisa Murkowski, R-Alaska, and other lawmakers introduced The Critical Minerals Policy Act of 2013 in October (here).
The ruling may help to bring manufacturing back to the U.S., said Leo Gerard, president of the United Steelworkers, in a statement (here). "Some industrial customers had to pay inflated prices for those products," said Gerard. "Others relocated their plants to China that relied on supplies of rare earths for producing products like electrical lighting. China achieved its intended goal of moving production out of the United States and into China."