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US, EU, Japan Complain To WTO Over China's Rare Earth Ban 218

Posted by Soulskill
from the mommmm-he-won't-share-his-toys dept.
eldavojohn writes "China's rare earth monopoly has resulted in a shortage as China blocks their export and the rest of the world resumes their operations. Now, in a first-ever joint filing from three members of the World Trade Organization, Japan, the EU and the U.S. are not sitting idly by as China repeatedly ignores the WTO's orders to export rare earth metals and raw materials at a fair price to other countries. China claims the embargoes are in place to protect its environment, while Obama denounces China as being unfair and not playing by the rules of the WTO. In 2009, the WTO released a report (PDF) that explained how actions like China's hurt trade partners."
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US, EU, Japan Complain To WTO Over China's Rare Earth Ban

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  • Bogus article (Score:5, Insightful)

    by samantha (68231) * on Tuesday March 13, 2012 @05:33PM (#39345267) Homepage

    First of all, the WTO has no means to order any country to sell anything at what it determines is a "fair price". Second, China does not have a monopoly on rare earths. They exist is many many countries. Those countries may not be actively pursuing them and exporting them to the same degree but that is not China's fault.

    • Re: (Score:2, Insightful)

      by LordLimecat (1103839)

      At the same time, the Chinese claim that theyre doing it "for the planet" takes some serious chutzpah. I laughed a little when I read that.

      • Re:Bogus article (Score:5, Interesting)

        by vga_init (589198) on Tuesday March 13, 2012 @05:46PM (#39345447) Journal

        Even though it's probably not the real reason (they just want to keep the materials for themselves, obviously, which is the smart thing to do), but in politics it's often advantageous to use your opponent's rhetoric--they risk making themselves look bad if they disagree with something they themselves said earlier.

        • It all boils down to election posturing

          Obama accuses China of not selling the rare earth "at fair price" while in California there is a large rare earth mine still remain closed

          • by Anthony Mouse (1927662) on Tuesday March 13, 2012 @10:28PM (#39348215)

            in California there is a large rare earth mine still remain closed

            Check again. [molycorp.com]

          • Sorry, taco, but you have ZERO clue of what you are talking about this. Not only is california pass re-opened, but molycorp is working hard to bring back magnet manufacturing. They just bought a canadian company to grab some of the market that China stole by dumping on the market and then once they owned it, restricting exports ILLEGALLY.

            This is not about posturing. In fact, I am guessing that it was EU and Japan that dragged us into this. Though I am also guessing that more will pop up. In particular, I
      • Re:Bogus article (Score:5, Insightful)

        by cpu6502 (1960974) on Tuesday March 13, 2012 @05:48PM (#39345473)

        Funny? I thought we are supposed to protect the environment. I guess they mean OUR environment, not China's.

        For 200+ years China was bullied by western powers. Now they have the upperhand with the resources AND the money. LOL. It's like watching the second collapse of Rome unfold (We're probably at year 400 in the timeline). Strong enough to raise an army but not strong enough for a real war. EU/US influence is shrinking.

        • Re:Bogus article (Score:5, Insightful)

          by TheRaven64 (641858) on Tuesday March 13, 2012 @05:59PM (#39345611) Journal

          Uh, what? China isn't shutting down mines, it's increasing mining, it's just making sure that the output from the mining goes to factories in China (which have lower environmental standards than in most of the rest of the industrial world, which is a big part of the reason why companies can manufacture cheaply there) rather than being sent abroad. Although they'll quite happily send them to factories producing goods for export.

          If anything, reducing rare earth exports increases pollution in China.

        • Slightly delusional (Score:5, Interesting)

          by microbox (704317) on Tuesday March 13, 2012 @06:17PM (#39345827)

          For 200+ years China was bullied by western powers

          This is true. And then China proved itself to be the equal bully of Victorian era European powers.

          You are right about the declining influence of the USA and the EU. I suspect, however, that China will not rise above, but will trace a similar arc as the soviet union did. In many ways, the Chinese miracle reflects the decade-long double-digit growth of the soviet union. And likewise, both countries have serious internal problems, including /severe/ environmental issues.

          I do believe that the chinese leadership will not sit idly by on these environmental issues, and their environmental policy looks bizarre to outsiders. I suspect they are drawing down on the possibility of future technical solutions which they are now investing in. But the future of industrial china has not yet been written.

          btw, the USA, France, Britain, Germany, Japan, Russia and China are probably the only countries that can sustain a significant war. There may be a dearth of political will within the USA, France, Britain, German and Japan -- but if the will is ever galvonised, make no mistake, they could prosecute a real war anywhere on the planet.

          • by rtb61 (674572)

            What miracle, straight up western corporate greed and the government of China treating it's own citizens like disposable assets.

            So western corporations were happy to access a disposable labour market, make goods really cheap and then sell them at grossly inflated prices with the double benefit of crippling labour markets and gutting the middle class to maximise profits for the 1% and fuck everyone else.

            The autocratic leaders of the government of China who own a piece of the action were content to enric

        • Re: (Score:3, Insightful)

          by Xeranar (2029624)

          I normally try and refrain from this sort of idiotic banter running rampant in slashdot because most are IT people and get their sense of world politics from regular news sources and rarely take the time to read government research. As it stands China without a major development still lacks major resources for most things. They have rare earth elements which is awesome, but so do the US and Russia (along with various other places). We choose not to exploit them for cost mainly. If rare earth keeps incre

          • by TheSync (5291)

            As it stands China without a major development still lacks major resources for most things.

            China now has a trade deficit [reuters.com] with the rest of the world. Part of that is due to copper prices, also increases in soybean imports.

            • Re:Bogus article (Score:4, Interesting)

              by ILongForDarkness (1134931) on Tuesday March 13, 2012 @07:08PM (#39346293)

              and the cost of dog meat too I assume. Australia for example is mining like crazy just to keep China going. Presumably chinese companies are mining China like crazy too. So two huge land masses funneling production to mainly one. Chinese companies are also buying up canadian resource companies like crazy too. All the resources funnel into the country building stuff which for the most part is China.

              The WTO can be upset about it but how about making the US export strategic assets they don't want to give away? Say Iran wants to buy a few nukes. NK wants some fighter planes etc. Every country decides what is in their best interest and I don't think WTO can do anything to make China share things they want to keep to themselves. Worst case scenario they would just create unofficial mines like Iran's nuke program and deny it to death and claim all their mines have been closed.

              • by sFurbo (1361249)

                The WTO can be upset about it but how about making the US export strategic assets they don't want to give away? Say Iran wants to buy a few nukes. NK wants some fighter planes etc.

                I would guess nukes and fighter jets are not covered by WTO agreements.

                Every country decides what is in their best interest and I don't think WTO can do anything to make China share things they want to keep to themselves.

                Protectionism is bad for everyone in the long run*, so we have made the WTO disincentivise countries from doing that. The WTO can not force China to do anything, but they can allow other countries to enforce import taxes on goods from China. If the import taxes are high enough, I am sure China would comply. The question is: Will the western countries enforce import taxes, or are China to big a trade partner?

                * It is only a good idea if

                • Protectionism can be bad in a purely economical sense but still done for strategic interests. For example the US could have decided that the ability to make TVs was of critical importance since it is used by everyone including military planners etc. But alas they didn't and so as far as I recall there is no TV manufacturer still building sets in the US. People get cheaper sets and in theory the employees move on to the segment of the local economy that the US is competitive. Unfortunately the segment of the

          • by cpu6502 (1960974)

            >>> over the course of the last 230+ years we've managed to pay off our debt several times.

            Several times?

            Try once. Way back in the 1820s under the Madison and Jeffersonian-Democrats. Hardly something to brag about in the modern age. We have a candidate now (Paul) who is promising to pay off the debt starting in year 2 of his presidency, but the voters don't want him. They want the other guys who continue to put forward budgets that will add close to 1 trillion year-after-year.

            The political will

        • If the US/EU/Japan shut down trade with China, who do you think that hurts the most?

        • And yet, China is mining more than what they did 5 years ago. IOW, they lied.
      • It is my understanding that the WTO takes claims of the form "We are interfereing with trade because it suits our strategic interest, dumbass." Very badly. Their job is trade, not your strategic interest. However, when they were formed, there was a limited list of exceptions baked in, under which trade embargos and other market manipulations would be considered to be other sorts of policies with incidental effects on trade.

        This is why everybody who goes to the WTO either goes to complain that somebody is
      • Re:Bogus article (Score:5, Insightful)

        by Ihmhi (1206036) <i_have_mental_health_issues@yahoo.com> on Wednesday March 14, 2012 @12:21AM (#39349055)

        In other news, DeBeers are sitting on large stockpiles of diamonds in order to "protect the war-torn orphans".

        Nope, not about artificially high prices at all. Nope.

      • by flyneye (84093)

        For the planet, for small business and for justice we can just turn it into a boycott and make the * marts and Target quit selling us plastic Chinese crap.
        Thats probably at least 80% of their exports to us( on would almost believe). They can come off their rare earth or drown in their own happy meal toys.

      • by Zorpheus (857617)
        They do it to conserve their own environment. They don't do it for the planet, they do it to have a place where they can live and that can feed them in the future. It is a logical consequence of long-term thinking.
        The poisoning of the environment in illegal mining operations is really nothing to joke about.
    • Re:Bogus article (Score:5, Insightful)

      by headhot (137860) on Tuesday March 13, 2012 @05:41PM (#39345387) Homepage

      Other country's rear earth providers all went bankrupt and shut down because China was dumping. Now that they are all gone, China cuts back on supply (for environmental reasons.. right) to drive prices up.

      I think the term is call 'cornering the market.' Except this time its not orange juice, and they pulled it off.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Then start your business extracting rare earth, you will be rich !!!

        • Then start your business extracting rare earth, you will be rich !!!

          Right... because starting a business that handles toxic chemicals, destroys the environment, and involves feeding out of and into a huge industrial complex is a piece of cake... and once you've got it set up, China won't undersell you.

        • Until China dumps again, and then you lose your billion-dollar investments into infrastructure and engineering as demand for your (comparatively) expensive product drops to zero.

      • by TubeSteak (669689)

        Other country's rear earth providers all went bankrupt and shut down because China was dumping. Now that they are all gone, China cuts back on supply (for environmental reasons.. right) to drive prices up.

        I'm not sure you understand what happened.
        The rare earth providers didn't go bankrupt, they got bought by China's mostly-state-owned mining company.

        China cornered the market, but not the way you're suggesting.
        Now china mines and refines almost all the rare earths in the world.
        In the next few years, old mines will be reopened and new refineries will be built in order to break China's monopoly.

    • Re:Bogus article (Score:5, Interesting)

      by retroworks (652802) on Tuesday March 13, 2012 @06:04PM (#39345663) Homepage Journal

      No, it is not a "bogus article", and the WTO is not "ordering any country to sell anything at what it determines" is a fair price. WTO is a free trade agreement. China signed it.

      As such, WTO has rules which parties agree to abide by in return for protection of their own exports. WTO does not charge China with having a monopoly, but with using government rulings (environmental laws) to manipulate markets. There are rules in WTO which allow a country to limit exports of raw materials, but doing so in order to manipulate prices is against WTO rules. China doesn't have to BE in the WTO (Iran is not), and if they don't WANT to abide by the WTO ruling they can leave WTO. Or, they can live with / suffer the sanctions, as others have. But if you are in WTO and use it, you have to play by the rules.

      I'm not anti-China, and the USA deserves WTO sanctions for its agricultural subsidies. But whoever "modded up" this post doesn't understand WTO agreements. If you agree to follow WTO rules, you get unique market access to sell your products, but you also agree to sanctions if you use government to replace tariffs you've agreed not to use with "bogus" traffic laws, pollution laws, registration laws, or other "non-tariff barriers", or cut off the Japanese because you want to take over their electronics markets.

    • USA had the number 1 production and exporting. That is, until reagan convinced the company to share the tech with China. Once they did, then China dumped REE on the global markets esp. on America. Once we shut down California mountain pass, then China suddenly got interested in their environment. The problem though, is that China is producing more REE than EVER before. It is just that they do not export it.

      Thankfully, a company is ramping up with this. Molycorp. I am actually surprised that USA/EU/Japan a
  • by ravenspear (756059) on Tuesday March 13, 2012 @05:39PM (#39345365)

    when you shut down mining and manufacturing in western countries and ship it all to China just because they are cheaper.

    Other countries have these deposits, but they determined they could just buy China's for less money.

    • ...good thing! The mines that were shut down will eventually come back on line when it is profitable to do so again. In the meantime:
      1) Rare earth materials can be purchased cheaper because China was undercutting everyone (even if they were used for manufacturing within china, the goods were still being sold abroad).
      2) Less pollution generated in my home country (USA) because that mining was put on hold.
      3) Non-Chinese resources are preserved and will last longer while China burns through theirs.

      What we're

  • So what's the fair price for Windows 7 Ultimate? Or Adobe CS 5?

    • by Cosgrach (1737088)

      Ummm. Free? No, wait! You pay me and I'll consider installing it.

    • by EzInKy (115248)

      $0, but computing is a hobby for me, not a lifestyle. I enjoy the challenge of making things work. Others might be willing to spend a few bucks for them if they value time over freedom.

  • by Anonymous Coward

    then you gotta surrender your sovereignty.. I think China signed... So there

  • China beat the other capitalists at their own game. By forcing the other players out of the market and then establishing a monopoly. Now they are crying foul because they lost the game? It's their rare earth metals so just pay them what they want or start making your own! You cant just demand that the rules be changed because now you're being screwed, while previously you enjoyed screwing someone else over.
    • by Anonymous Coward on Tuesday March 13, 2012 @06:18PM (#39345839)

      Actually the complaint is that China didn't play the game. They cheated by dumping and are now cheating by restricting exports. Not unexpected from them, but don't claim it's capitalism in action.

  • by nickmalthus (972450) on Tuesday March 13, 2012 @05:57PM (#39345589)
    I am not a Chinese government fan by any means but as a sovereign country they have an obligation to protect the interests of their citizens above the financial gains of the globalists. Besides, these are the same guys that say the free market solves all problems. As the price of these materials go up alternatives should surface or recycling efficiency should increase.
    • As usual the US (and probably most other countries) believe in the power and relevance of these bodies only when THEY are the ones seeking redress for some wrong.

      For a good look at this compare to the US ignoring NAFTA (even though they were its champions) when US sought tariffs against Canadian companies that they alleged were 'dumping' softwoods even though the terms of NAFTA supported the Canadians.
      http://en.wikipedia.org/wiki/Canada%E2%80%93United_States_softwood_lumber_dispute

      Or how Bush, Cheney and Ru
    • Re:Globalist whining (Score:5, Informative)

      by shutdown -p now (807394) on Tuesday March 13, 2012 @07:16PM (#39346381) Journal

      I am not a Chinese government fan by any means but as a sovereign country they have an obligation to protect the interests of their citizens above the financial gains of the globalists.

      They absolutely do, but they can't do that while still remaining a member of WTO.

    • Unless they are violating their obligations under the WTO charter that they agreed to, which they are. That's what most posters seem to be missing. China previously agreed to a set of conditions upon joining the WTO (their choice) and is now violating them.

      If China doesn't want to be in the WTO, that's fine. But it means that countries like the US aren't under any obligation to follow the WTO rules with regards to China either.

    • by sFurbo (1361249)

      I am not a Chinese government fan by any means but as a sovereign country they have an obligation to protect the interests of their citizens above the financial gains of the globalists.

      Free trade is about doing the best for the citizens, although in an abstract and long-sighted way. Your wage might drop 10% with free trade, but if the average price of all you buy will drop with 20%, you are still better of. There are exceptions, mostly when developing countries need to build their own industries, but most of the time, free trade benefits everyone [wikipedia.org].

  • Shouldn't have let them get a monopoly on something that's so important. This is just one of many ways China has the rest of the world under their thumb and we're going to see a lot more of this in the coming years. From where I'm sitting at my desk, I'd be hard-pressed to lay my eyes on more than 10 things that weren't made in China. My watch (though it was assembled in China so I guess that doesn't count). An old radio scanner (which doesn't work). Metal shears (used to open blister packs). CR2016 b

  • Rare earths (Score:2, Insightful)

    by giorgist (1208992)
    Rare earths are not that rare. The main problem is that they keep bad company, for example Thorium. Now if you mine rare earths in the US, you suddenly end up with thorium which you are no longer allowed to put back where it came from or anywhere else. China is actually storing it with the potential to using it in future nuclear power plants. A single mine for rare earths would have the "side effect" of generating enough thorium to power the whole of the US electrical grid (If we can develop the appropriat
  • by Corporate T00l (244210) on Tuesday March 13, 2012 @06:19PM (#39345845) Journal

    If China were simply limiting the amount of rare earths permitted to be dug out of the ground, there would be no WTO issue. The problem is that this is an export cap which has the potential to create different pricing for rare-earths between domestic and foreign purchasers of these materials.

    Now if you look at mentions of today's prices of rare earths (by googling for "rare earth prices"), as yet, there is no such disparity. The linked WTO article also doesn't directly talk about price disparities between domestic and foreign purchasers. It turns out that global demand for rare earths went down quite a bit last year, and as a result, only about 60% of the export quota was used up (according to this FT article [ft.com]).

    The concern is that as the global economy recovers, if demand is seen to exceed the quota, then a huge price difference between what domestic companies and foreign companies pay will emerge. This would amount to a kind of state subsidy (making prices for domestic producers artificially cheap) and would violate WTO rules.

    The two metrics to watch to determine whether or not the claim of environmental protection vs. economic protectionism would be:

    (1) Domestic rare earth production volume (e.g. in tons) - If slope of this curve continues unchanged, then there really is no environmental effect. If the slope flattens out, then it could be argued that the quota did slow down the pace of mining and did have an environmental consequence

    (2) Domestic (China buyer) vs. Foreign (non-China Buyer) price (e.g. difference $/ton) - If this disparity is big, then there's a stronger case that there is some kind of domestic subsidy occurring, if the disparity is small, then the case that there is a subsidy is weaker.

    This is not really a matter of sovereignty since China is a willing party to the WTO and has volunteered to play by those rules.

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