China nearly doubles rare earth export quotas
July 18, 2011 Category Foreign trade, Weekly
Despite protests by the European Union, China has announced new export quota for rare earth elements. It agreed to nearly double the quota for the second half to 15,738 tons for 26 companies, up from 7,976 tons during the same period last year. This put the full-year quota at 30,184 tons, compared with last year’s quota of 30,258 tons. China’s 2010 quota of 30,258 tons was 40% below 2009’s, but customs data showed 39,800 tons were actually exported last year, excluding smuggling. A World Trade Organization (WTO) panel ruled against Chinese export restrictions on other raw materials, such as bauxite and zinc. Officials in Brussels and Washington had hoped that ruling would encourage Beijing to ease similar controls on its rare earth exports. Karel De Gucht, EU Trade Commissioner, expressed optimism that a negotiated solution could be found after a meeting with his Chinese counterpart, Chen Deming, in Beijing. “From the general response they gave me, they indicated that they understand they cannot have a policy for exports different from that for domestic trade,” De Gucht said. While EU officials insist that all options remain on the table, Minister Chen said that he was “not worried” about a possible WTO ruling on rare earths. China’s rare earth exports fell 40% last year to 30,259 tons, according to the European Commission. The WTO ruled on July 5 that export duties China imposed on certain raw materials were inconsistent with the country’s obligations under the WTO’s accession protocol, and that limiting the export quotas out of environmental concerns was not justified. De Gucht said the EU preferred to negotiate a solution with China but the EU would not hesitate to take additional action if a negotiated solution could not be reached. China controls about 90% of the world’s rare-earths supply. It began reducing exports last year.
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