EU furious at China's rehashed rare earth quota

An EU spokesperson has criticised China’s announcement that it will increase its rare earth quota, labelling it “highly disappointing”.

The world’s largest producer of rare earths – metals used in applications from flatscreens to missiles – has responded to assertions from the World Trade Organisation that it had broken trade rules.

The move came following a ruling by the WTO last week on other raw materials.

China says that its quota for the next sixth months will be up by 97.3 percent, from 7,976 tonnes set for the same period last year to a new quota of 15,738 tonnes. That’s the word from the Ministry of Commerce.

However, the EU has criticised the quota which it says has “no noticeable change in the annual amount of rare earths” that it will actually receive.

EU trade spokesperson John Clancy called the move “highly disappointing” in a statement.

 “A first analysis of China’s rare earth quota announced today shows that there is no noticeable change in the annual amount of rare earth China will allow to be exported to the EU,” Clancy said.

“However, there is a change in number of products covered by the quota: ferro-allows has been added, which in practical terms results in a tightening of a quota as more products need to get hold of the same amount.”

There is a chance that China may well have been cooking the books in a bid to appear like it’s adhering to trade rules

According to statistics TechEye received from John Clancy’s office, the quota is actually down when shown on a yearly scale.

The first tranche of 2011 was 14,446 tonnes, with the second tranche of 15,738 tonnes as announced today by Chinese authorities, meaning an overall figure of 30,184 tonnes.

The annual figure for 2010 was just 30,259 tonnes.

As the new quota included iron alloys containing rare earths, in real terms, the quota was tightened.

A member of John Clancy’s office told TechEye that the EU will seek the removal of the quota altogether, in line with WTO rules.

“We are not very happy as the quota as the amount of rare earths being exported is actually lower,” we are told.

“If you look at the whole year the quota has actually stayed the same, while the inclusion of iron alloys means another third added to the figure.

“We urge China to remove the quota restrictions, which contravene WTO trade rules.

“While it is possible to have restriction for, say, environmental reasons, China is not eligible to do so as it has not reduced its domestic production.”

The EU is now looking at further measures to lift the restrictions completely.

“The action taking place is to raise the issue at all levels. This means at minister level, and we are currently in negotiations with to adhere to the trade laws.

“We are also prepared to takes this to the WTO.”

“However, this essentially means going to court, so we would much rather that China takes more responsibility on the world stage and follows the WTO rules.”