China Asserts Rare Earths Export Policy Inspite WTO Ruling

China is not keen to give up the fight in justifying its rare earths export policy recently thumbed down by the World Trade Organization.

China is also set not to give in to pressure from developed nations to loosen export restrictions on its rare earths exports and are ready to face a deluge of counter petitions, an officer of the Ministry of Commerce said in a report

"We are ready for it," Yu Fang, deputy director of the department of treaty and law under the ministry, told China Daily News.

China had lost the dispute appeal lodged before the WTO appellate court regarding its export duties and quotas on rare earths exports.

The WTO's appeals court upheld the earlier decision hat export limitations by China on nine raw materials, including zinc, coke and magnesium, through quotas and tariffs broke WTO rules.

Ms Yu said although she is disappointed with the ruling in general, he noted "the result is better than we expected as the WTO still supports many of our arguments."

China is still affirming its interpretation of the WTO ruling saying some technical changes are only asked for and it does not completely favour the petitions filed by the European Union and United States.

In 2009, the EU, US and Mexico filed a petition before the WTO claiming that "China's export restrictions on raw materials, rare earths, discriminated against foreign manufacturers and has given unfair advantage to Chinese producers."

The WTO, however, ruled that out of the 17 elements, only 9 of the rare earths elements including zinc, coke and magnesium, were found to have quotas and tariffs that are against China's commitments to the trade organization.

China is the largest producer of rare earths and controls 95 percent of global supplies. Rare earths are a group of 17 elements used in industries like hybrid cars and other technological gadgets that use highly sensitive magnets.

"The decision of the appellate body is a huge victory for the US," Michael Silver, chief executive of American Elements, a US-based rare earths processor, was quoted as saying by Reuters. "It confirms the existence of the two-tiered price structure that has caused so much concern."

Responding to the WTO ruling, EU Trade Commissioner Karel De Gucht said that "China now must comply by removing these export restrictions swiftly and furthermore I expect China to bring its overall export regime - including for rare earths - in line with WTO rules".

The ruling is "a tremendous victory for the US - particularly its manufacturers and workers", US Trade Representative Ron Kirk said in a statement.