CHINA has declined to accept the
establishment of WTO Dispute Settlement Body requested by the United States, the
European Union and Japan regarding its measures related to the exportation of
rare earths, tungsten and molybdenum.
The United States, the European Union and Japan
told the DSB they were, respectively, requesting the establishment of a panel as
their consultations with China had failed to resolve their concerns.
The United States said because of China’s position
as a leading global producer of these materials, China’s export restraint
measures gave China the ability to significantly affect global supply and
pricing. It said that the materials at issue are key inputs in the production of
a wide range of important products, such as hybrid car batteries, wind turbines,
automobiles and advanced electronics. It added that the export restraints
appeared to be inconsistent with the General Agreement on Tariffs and Trade
(GATT) 1994 and China’s Protocol of Accession.
The European Union said China’s export
restrictions significantly distort the market and create competitive advantages
for the Chinese manufacturing industry to the detriment of foreign competitors.
It said these policies put pressure on foreign producers to move their
operations and technologies to China. It recognized environmental protection and
sustainable resource management as legitimate aims but strongly believed that
export restrictions are not the appropriate tools to promote these aims.
Japan said that the materials at issue are used by
its industry in the production of various final products, such as catalysts and
polishing media. China’s export restrictions have caused a short supply of the
materials in the international market and significant price differences between
China’s domestic market and export market. It said that Japanese manufacturers
have faced difficulty in purchasing the materials from China, putting them at a
disadvantageous position with their Chinese counterparts.
China said that its policies in question are aimed
at protecting natural resources and achieving sustainable economic development.
It said it was puzzled by the complainants’ initiation of the panel process as
it has no intention of protecting its domestic industry through means that would
distort trade. It added that at the present meeting, it was not in a position to
accept the establishment of a panel.
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