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

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."

Comments

Bogus article

[samantha]

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:Bogus article

[headhot]

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:Bogus article

[headhot]

No its not, its because of dumping and market manipulation.

Re:Bogus article

[cpu6502]

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

[TheRaven64]

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.

Re:Bogus article

[Rakshasa-sensei]

WTO rulings are enforced through trade tariffs.

Damn, what is this naive "they can't enforce any ruling, free markets yeah!!!" thing all over these comments? Don't you guys know shit about global (free) trade?

That all the major trading partners of China have gone to the WTO, an unprecedented event, it means that a ruling (which will clearly be against China) will mean that a number of Chinese export industries get hit with tariffs at a level sufficient to redress the perceived losses. And considering the impact such REM restrictions have all the way down high-tech manufacturing chains it won't be a small sum.

And yes, this _IS_ free markets, free markets where some things like military and high-tech trade can be limited. However other things are not allowed to be restricted, cause that's what collectively got agreed upon by the people who compromise the free market. Add some quotes to 'free market' if it doesn't fit your ideologically pure interpretation.

Also, China will be fucked even more if the same group decides to go to the WTO over the weak Yuan. The rest of the world will obviously also be fucked, but they might decide they're less fucked than status quo.

Re:Bogus article

[dgatwood]

You see that as evil. Most see it as proper application of the free market. We see this all the time. Companies sell *under* cost, to bring in sales. For places like retail stores, they'll sell particular items at a loss, to make a higher profit on others. Look at places like Best Buy. They'll sell some electronics at or under cost, but sell you cables for 1000% over cost.

The problem is that if everybody played by those rules, you'd end up with a bunch of monopolies and nothing else.

The largest company would dump products at a ridiculously low price until the last competitor died, then crank prices up. As that monopoly became entrenched, they would get significantly lower prices on components than any new competitor could get because of their volume. At that point, it would be nearly impossible for anyone else to enter the market unless they were already a huge company that could weather the inevitable dumping campaign by the monopolist.

Any market that allows such unfair competition can only have one end result, and that is a permanent one-company market. The company wins, but everybody else loses. So yes, I see that as evil. When you cross the line from "I want to be the best" to "I want to destroy the competition so that I'll be the only seller", you're squarely in evil territory, no matter how you try to spin it. (Mind you, I'm not saying it's never acceptable to want to destroy a competitor, but it's never acceptable to want to destroy all of your competitors.)

Re:Bogus article

[Ihmhi]

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.

This is what happens...

[ravenspear]

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.

Re:This is what happens...

[jd]

Did I say China was working on a level playing field? Nooooooooooo. Now, go take your cookies and milk then go back to kindergarten until you learn to read.

For the rest of you, a level playing field means you do NOT hand someone the ball and then complain that you've no balls. (Take that as you will.) A level playing field means that you demand of yourself no less responsibility than you demand of others.

A level playing field ALSO demands that ALL sides play by the rules. You know Boeing and Airbus have both been found guilty of getting illegal subsidies, right? That this isn't new and that both blocs have known for over a decade that what they were doing was indeed illegal? Sorry, I have difficulty feeling sympathy for people who are equally corrupt and criminal. Sympathy for the devil is easier to stomach than sympathy for the corporations. It also has a catchier tune.

The US ITAR regulations banning the export of computer systems to China that can - and are - used by US corporations to cut costs -- you think that's a level playing field? When NASA made it possible to turn a pile of PCs into a supercomputer, the software was banned. (Those old enough will remember Slashdot helping smuggle the software to Canada.) Sure, they relented later, but only because they had no choice. The cat was already out of the bag and ripping people's limbs off - as cats formerly in bags tend to do.

The US has been in trade wars with the EU, seeking to cripple EU industries via restricted exports.

Sorry, but the moment the US did that to Europe, it LOST all rights to complain when others do the same to it. Remember, the US may have relented but it never apologized and never changed its attitudes. It grudgingly tolerated obedience to the law, but we all know perfectly well that it will violate that law every chance it has to gain an edge.

As, indeed, it did in the 90s, when the US Government's signals intelligence passed confidential internal documents from Airbus to Boeing. The US Government, involved in industrial espionage in order to profiteer.

A level playing field is where ALL such activity is banned, where ALL such activity leads to more than a gentle slap on the wrist but serious economic consequences, and where ALL countries are required to participate fairly, openly and (above all) honestly. THAT is a level playing field.

Re:Hate the game not the player

[Anonymous Coward]

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.

Re:only about the env. when it's your backyard

[Daniel Phillips]

The ONLY reason why rare earth minerals are dominated by China is because no other country is willing sacrifice the environment to extract these minerals.

Wrong, it is because China's ore deposits are more highly concentrated than any other, by a very wide margin.

From my vantage point, China has every right to restrict this trade to protect its environment.

I don't know about your argument (which seems wildly far fetched to me) but do know that subsidizing domestic industry with favorable pricing of raw materials is, in general, not allowed by the WTO.

Re:Make China the bogeyman

[Anthony Mouse]

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

Check again.