WTO tells China to drop restrictions on rare earths exports

The World Trade Organization (WTO) ruled Wednesday against China in a case brought by Japan, the U.S. and Europe that challenged the nation’s restrictions on exports of rare-earth metals, tungsten and molybdenum.

The ruling, not yet confirmed by the WTO, would be the second time that Beijing’s use of export quotas and tariffs as an industrial policy tool has been successfully challenged.

The official complaint was filed in 2010, after increasing tensions between China and Japan highlighted Beijing’s control of international trade in rare earths minerals, which have high-tech and military applications.

China, which is responsible for more than 95% of the global supply of rare earths, is expected to appeal the WTO’s latest decision, reports WSJ.com.

“I think we will appeal, and we will win, or at least get some adjustment time,” Mei Xinyu, a policy analyst with the commerce ministry, wrote in an email to the WSJ. “If we fail, we may remove the export quota policies, but use other methods to control.”

International prices of rare earths have soared due to China's export control.