03/14/2012, 00.00
CHINA - US - EU - JAPAN
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Washington, Brussels and Tokyo against Beijing over 'rare earths'

For the first time, the United States, the European Union and Japan jointly file a case against China for its restrictions on rare earths, which are essential elements in electronics.

Beijing (AsiaNews/Agencies) - The fight over rare earths continues unabated. For the first time, the United States, the European Union and Japan have jointly filed a case against China at the World Trade Organisation (WTO) for restricting access to such minerals.

Washington is leading the charge. At a White House press conference, US President Barack Obama accused China of breaking agreed trade rules by imposing limits on rare earths exports.

Rare earths are 17 elements that are essential in the manufacture of many electronic goods. China provides 95 per cent of supplies in a market that is worth hundreds of billions of dollars.

These elements go into computers, flat screens, mobile phones, digital cameras, fibre optics, catalysts and everything that needs a high performance hard-drive.

In their case, United States, the European Union and Japan argue that China's policy is unfairly penalising non-Chinese companies.

We "will keep working every single day to give American workers and American businesses a fair shot in the global economy," Mr Obama.

"China's restrictions on rare earths and other products violate international trade rules and must be removed," EU Trade Commissioner Karel De Gucht said.

These restrictions have caused the price of rare earths to double. In some cases, costs are three to four times as much on export markets as they are for Chinese companies at home.

Such a policy clearly favours the delocalisation of production from the West to China.

This year, China cut export quotas to 30,000 tonnes when demand is expected to be around 50-60,000.

Even though the mainland holds 35 per cent of known reserves, it monopolises the market with 97 per cent of supplies.

So far, China has justified its action by saying that it wants to protect its reserves from overexploitation, an odd claim since Beijing has been less interested in reducing gas emissions and slowing deforestation.

Now the parties have 60 days to settle the matter; otherwise, the WTO will have to evaluate the claims, which could expose China to countervailing measures.

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