WTO or ruling China's default on rare earths will expand exports

According to foreign media reports, in the US, Japan and Europe Rare Earth litigation caused by China's rare earth export restrictions, the World Trade Organization (WTO) has basically recognized the US, Japan and Europe's claims, and issued a tentative judgment to the relevant countries to determine China's violation. The promise of joining the WTO in 2001 means that China will lose the first trial in the rare earth lawsuit.

According to the report, the WTO believes that rare earth is an indispensable material for the development of high-end industries, and China's export restrictions and export taxes are in violation of China's commitment to China's accession to the WTO in 2001. It is reported that when China joined the WTO, it promised to impose export tax on only 84 products with tax numbers, and rare earths are not included.

The rare earth lawsuit began on March 13 last year and was led by the United States. It was also the first time Japan initiated a direct trade lawsuit against China. The United States, Japan and Europe believe that China's restrictions on rare earth exports and the imposition of export taxes on rare earths violate the commitments and have an impact on high-end industries in various countries. China insists that the adoption of environmental protection policies has led to a decline in exports.

After the United States, Japan and Europe filed a lawsuit, including Chinese experts, they basically believed that China’s chances of winning the case were extremely small. Li Chenggang, director of the Department of Law and Law of the Ministry of Commerce, believed that China had “substantially no room” in this lawsuit. Because China argues that it is environmentally friendly, the United States, Japan and Europe have proposed a variety of alternative methods, including resource taxation and production reduction. Just doing so will increase the price of raw materials in China's domestic market, rather than just affecting export prices, which the Chinese government does not want to see.

According to Japanese media reports, the report of the WTO expert group equivalent to the first-instance ruling will be released in mid-November, and it can basically be concluded that China will lose the first-instance ruling. If the report is dissatisfied with the expert group, China can appeal to the WTO High Commission, and the High Commission report will be the final ruling.

Tu Xinquan said that when the United States, Japan and Europe initiated the rare earth lawsuit, there were already US, European and Mexican allegations that China restricted the export of nine raw materials widely used in the steel, aluminum and chemical industries. The WTO ruled that China lost the lawsuit, so China’s lawsuit against rare earth The hope of winning the case is not great.

Tu Xinquan said that at present, the WTO only issued a tentative judgment notice to the relevant countries. There is still a period of time from the final ruling, but there is no chance of winning the case. In the future, China will have to stop collecting rare earth export tax, but export quotas may still be won. .

According to reports, the WTO in principle requires the removal of export restrictions, but provides two exemptions: “measures necessary to protect the lives or health of people, animals and plants” and “measures related to the protection of available natural resources,” The measures are implemented together with restrictions on domestic production or consumption."

Tu Xinquan said that China's rare earth industry meets most of the above regulations, but the export quotas are not consistent with the domestic consumption. Therefore, under the WTO framework, China can request to continue to retain rare earth export quotas while expanding quotas to domestic consumption. A consistent level.

Because in the past, a large number of export quotas of enterprises have not been used up, Tu Xinquan believes that even if the export quotas are expanded, it will not affect China's rare earth industry. The protection of domestic rare earth resources needs to be designed in taxation and other aspects.

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