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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."
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.
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.
Uganda. All we need is to create some kind of bogeyman there that we can "go after", then we can march in our military and...well, you know the rest of the story.
So what's the fair price for Windows 7 Ultimate? Or Adobe CS 5?
"The average reporter we talk to is 27 years old......They literally know nothing." - Ben Rhodes
I see you have no idea of the meaning of the word capitalism.
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.
Football Odds
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.
If a nation expects to be ignorant and free, in a state of civilization, it expects what never was and never will be-T J
You.. me.. playground after class. Bring your rare earths and your cheap labor or you're toast.
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 batteries made in Japan. Multimeter's made in Korea. A really old power strip from Mexico. And that's about it.
Seems like the pro-China internet brigade has been set loose on this article.
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 appropriate power plant).
So if you like the magnets in your tiny headphones, tell the Greenies to rationalise their argument and we might be able to get back on track.
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 Rumsfield will never face international war tribunals for authorizing the same tortures that we executed Japanese commanders for proscribing:
http://www.cbsnews.com/2100-250_162-3554687.html
-I'm just sayin'
Who do they think they are, using free market strategies with their resources?
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.
/severe/ environmental issues.
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
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.
Like all pain, suffering is a signal that something isn't right
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).
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.
For some reason, this "Related Link," from almost exactly two years ago (March 16 2010), is missing from this submission:
US Sits On Supply of Rare, Tech-Crucial Minerals
The relevant part is this (emphasis added):
"China supplies most of the rare earth minerals found in technologies such as hybrid cars, wind turbines, computer hard drives, and cell phones, but the US has its own largely untapped reserves that could safeguard future tech innovation. Those reserves include deposits of both 'light' and 'heavy' rare earths... 'There is already a shortage, because there are companies that already can't get enough material,' said Jim Hedrick, a former USGS rare earth specialist who recently retired. 'No one [in the US] wants to be first to jump into the market because of the cost of building a separation plant,' Hedrick explained. ... [S]uch a plant requires thousands of stainless steel tanks holding different chemical solutions to separate out all the individual rare earths. The upfront costs seem daunting. Hedrick estimated that opening just one mine and building a new separation plant might cost anywhere from $500 million to $1 billion and would require a minimum of eight years. [But the CEO of a rare earth supply company said] 'From what I see, security of supply is going to be more important than the prices.'"
If the complainants had realize the "security of supply" is real, we'd already be 1/4 of the way (2 of 8 years) to having productive plants.
Instead these countries took the easy and cheap path, namely: foolishly trusting communists to uphold their part of an agreement.
What one fool can do, another can. (Ancient Simian Proverb)
Congratulations, you've won the most irrelevant troll award for this thread!
...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 seeing is an eventuality. Eventually China is going to wise up and realize they are going through a very valuable resource at an unsustainable rate.
Better known as 318230.
I don't know why everyone cowtows to China's economic might.
US economy alone is far bigger than China. US, EU, and JP combined is many times larger, not to mention the rest of the world, which is rather significant increase again (think South America, Canada, India, Russia, SE Asia, Australia).
And yet they act like this, they undervalue their currency, have rampant intellectual property infringment, etc. which US and other countries seem to ignore for some fear of upsetting China.
Seriously, the resources are on Chinese territory they can do with it as they please.
What will be interesting will be if the main sources of Rare Earths are in some of the places the aren't really Chinese territory, but ones that China 'acquired'. To wit, Tibet. Will the west then have a cause to get China out of there for *cough* humanitarian reasons?
Meanwhile Tibetans are setting themselves on fire to protest the occupation. Ok it's not the best way of protesting but you've got to be fairly committed to do that.
"The greatest lesson in life is to know that even fools are right sometimes" - Winston Churchill
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.
Have you got your LWN subscription yet?
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
Muchas Gracias, Señor Edward Snowden !
You claim Obama authorized waterboarding. Care to supply a citation?
Very recently President Obama said waterboarding is wrong, is torture and he was glad that practice was ended. Read here where President Obama banned waterboarding in January 2009.
your comment is a bizarre combination of fenqing jingoism and ignorant american 'viewing china as a mystery' viewpoint. who's pushing china around? they just need to play fair. yeah it was bullying china when we gave them a permanent un security council seat despite doing fuck-all in WWII. honestly it just shows what you're thinking...sort of like a demon-hunting preacher who, surprise, finds demons everywhere.
If the US/EU/Japan shut down trade with China, who do you think that hurts the most?
The US wouldn't have been able to buy enough either. There's a difference between a monopoly supply and simply not having enough helium for the job.
Add to it the fact that there hasn't been any thorough mapping of locations where they can be found so they can literally be under your doorstep at home.
If builders built buildings the way programmers wrote programs, then the first woodpecker would destroy civilization.
Take your anarchist rants back to middle school.
Because if the people who do produce them voluntarily seek membership of the WTO, you don't have to.
"Cursed is he who rises early in the morning..." Isiah 5:11
China bans rare earth exports, US places a high tariff on Chinese imports except rare earth metals. As a very large importer of Chinese goods, this problem won't take very long to resolve.
it doesn't exist in the real world
I have heard that there are plenty of rare earths in the US, only the extraction of which is very dirty in the pollute the heck out of your environment kind of way, and that the US is more than happy to buy their stock from China and let them poison their own country. (and of course the environmental concerns would raise the costs to make the US option not feasible)