U.S. Takes China To WTO Over Trade Case of "Rare Earth" Materials, E.U. And Japan Join Case

Washington, D.C. -

The United States has filed a trade dispute case against China with the WTO over China's increasingly restrictive "rare earth" materials. The European Union, E.U., and Japan have also joins the case with the U.S.

At issue is what the U.S. says is China's unfair limiting of rare earth materials used in high tech devices like smartphones, flat screen TVs, automobiles, medical equipment, weapons and missiles and other important items. The U.S. claims China is hoarding supplies of rare earth for its own gain and to extra unreasonably high prices.

When China last stopped exports of rare earth, prices shot up 900% in some places around the world.

According to the E.U., the trade dispute involved 17 rare earths, including cerium, neodymium and dysprosium as well as tungsten and molybdenum

China produces 97% of the world's supply of rare earth.

"China's restrictions on rare earths and other products violate international trade rules and must be removed," said Karel De Gucht, EU trade commissioner, in a statement. "These measures hurt our producers and consumers in the EU and across the world, including manufacturers."

Ron Kirk, U.S. trade representative, said, "America's workers and manufacturers are being hurt in both established and budding industrial sectors by these policies. China continues to make its export restraints more restrictive, resulting in massive distortions and harmful disruptions in supply chains for these materials throughout the global marketplace."

For its part, China said it put in place restriction on exports of rare earth for environmental reasons.

"China has worked out its own policy on managing rare earths, which is in line with WTO regulations," Liu Weimin, a spokesman for the Chinese Ministry of Foreign Affairs, said at a news conference. "Our policies tackle not only the export of rare earth but also its production and exploration."

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