China is by far the world’s biggest supplier (97%) of the 17 rare earth metallic elements that are essential to produce iPhones, wind turbines, electric cars, robots working assembly lines, precision-guided missiles and a host of other items. China sits on a large portion of the world’s known reserves and has maintained almost total dominance over supplies in recent years. There is currently no rare earth mining going on in the European Union and Japan, which rely almost 100% on Chinese imports of rare earths.
On 13 March 2012, Japan, European Union and the United States requested consultations via WTO with China with respect to its restrictions on the export of various forms of rare earths, tungsten and molybdenum.
These restrictions include export duties, export quotas, minimum export price requirements, export licensing requirements and additional requirements and procedures in connection with the administration of the quantitative restrictions. In September 2009, China announced plans to reduce its export quota to 35,000 tons per year in 2010–2015, ostensibly to conserve scarce resources and protect the environment but China announced further export quotas in July 2011 by capping total production at 93,800 tonnes. Furthermore, in September 2011, China announced the halt in production of three of its eight major rare earth mines, responsible for almost 40% of China’s total rare earth production.
The Essay on Rare Earth Element
Lanthanum is a crucial rare earth element to our modern economy because it plays an integral component in modern technologies such as: laptop computers, electric automobiles, and hand-held electronic devices such as cellular phones. Lanthanum basically acts as a battery source to the above devices modern technologies. Lanthanum is also make glass and lastly to reduce the level of phosphates in ...
The Appellate Body of the World Trade Organisation (WTO) had confirmed the findings made by a Panel in July 2011 that China’s export restrictions on several industrial raw materials are in breach of WTO rules. The WTO found that China’s export restrictions are not justified for reasons of environmental protection or conservation policy Such monopolist restrictions have damaged industries in other countries and forced producers of rare earth products to relocate their operations to China. Japan, EU and the US claim in the complaint that Beijing is using quotas and caps to stifle exports to the benefit of its domestic industries and that state funds were reportedly being used to stockpile the metal to support and artificially hike prices.
China has counter claimed that rampant over mining has caused untold ecological damage and that it no longer wants to pay the environmental costs of supplying the vast bulk of the world’s rare earths. Despite the significance of China’s actions, most analysts argue that the shortage of rare earths will be a temporary phenomenon, because the rising prices for rare earth elements will encourage others to enter the market, leading to increased supply.
The US, for example, has 13% of the world’s known rare-earth reserves, and could re-enter the production and refining business. China’s efforts to exert price leverage are unintentionally driving a revival of global rare earths production and, over time, China will likely be just one of many global suppliers. China’s efforts to monopolise the sector are bound to backfire because such high-handed measures have prompted the rest of the world to formulate alternate strategies.
Content: Analyzing demand-supply and export-import data for rare earth metals. Prices and Usage of Rare Earth Elements Benefits of this policy to China and harmful effects for US, japan, EU Pros and Cons of Monopolist and Protectionist Policies How quota’s, restrictions, production capping are affecting global trade? Solutions/Alternatives/Recommendation (What can US, Japan, Eu do?)
The Essay on China And The World Trade Organization
"The China WTO agreement is good for the United States, it s good for China, it s good for the world economy." - Bill Clinton (US, China reach , 2.) China has negotiated membership into the World Trade Organization and its predecessor since 1986. It is the largest trading nation still outside the system, with trade last year worth more than 300 billion dollars and until it joins the World Trade ...
SOURCES: WTO Reuters Wall Street Journal NY Times Paul Krugman Op-Ed “Rare and Foolish” Congressional Research Service Report: “China’s Rare Earth Industry and Export Regime: Economic and Trade Implications for the United States” East Asia Forum Europa.eu Other research papers by independent organizations/economists
