THE European Union, the United States and Japan yesterday formally asked the World Trade Organization to settle a dispute with China over Chinese government's restriction on exports of raw materials, including rare earth elements critical to electronics makers.
EU trade chief Karel De Gucht said the three trading powers were making a dispute settlement request - the first step before filing a full trade case.
"China's restrictions on rare earths and other products violate international trade rules and must be removed," De Gucht said yesterday.
China said the export curbs were motivated by environmental concerns and said it would defend itself.
China accounts for about 97 percent of world output of the 17 rare earth metals critical in producing items including hybrid cars, weapons, flat-screen TVs, mobile phones, mercury-vapor lights, and camera lenses.
China's Minister of Industry and Information Technology Miao Wei said yesterday the export quotas were not trade protectionism and did not target any specific country.
Miao said China's rare earth export policy is drawn up out of concern for the development of resources and environmental damage. Some rare earth metals would last only 20 years if China does not stop excessive mining, Miao added.
"We feel sorry for their decision to complain to the WTO," he said. "In the meantime, we are actively preparing to defend ourselves."
China has cut its export quotas of rare earth minerals to cope with environmental concerns resulting from mining of the rare earths.
Foreign Ministry spokesman Liu Weimin yesterday defended China's curbs on rare earth production as necessary to limit environmental damage and conserve scarce resources.
"We think the policy is in line with WTO rules," he said.
He rejected complaints that China was limiting exports. "Exports have been stable. China will continue to export, and will manage rare earths based on WTO rules," Liu said.
He noted that China had about 35 percent of rare earth deposits but accounted for more than 90 percent of global production.
"China hopes other countries can shoulder responsibility for supplies and can find alternative resources," he said.
China has 10 days to respond and must hold talks with the US, EU and Japan within 60 days. If an agreement cannot be reached within that time, the US and its partners could request an investigation of Chinese practices.