The World Trade Organization (WTO) ruled against export restrictions on raw materials that China’s Commerce Ministry has put up. The WTO panel said on Monday that China had violated global trading rules by stopping the export of bauxite, coke, magnesium, manganese and zinc.
This curb on exports had artificially inflated the rates of these raw materials and given the domestic Chinese companies selling these products an unfair competitive advantage. The ruling of the WTO panel has fuelled hopes that a similar ruling will be made for rare earth metals forcing China to roll back its export restrictions on the crucial elements group.
The 17 elements collectively known as the rare earth elements are used in the renewable energy and high technology electronics sectors. China controls the global market of REEs as it currently produces more than 90% of the world’s supply. Unexpected restrictions on export of the REEs last year led to the prices for REEs rising phenomenally as the global shortage was felt acutely.
However China says that it is prepared to defend its decision said Li Chenggang the head of the ministry’s legal and treaty department. He let it be known that regarding WTO members' possible similar actions over China's rare earth policies, they were ready to respond at any time in line with WTO rules and procedures.
The first ruling on the imposition of export quotas was given by the WTO in July last year. The nation had appealed the ruling two months later and asked for part of the ruling to be struck off. A final ruling will now be made within 30 days in the case.