Big 3 unite in bid to end trade row with China

THE European Union, the United States and Japan have formally asked the World Trade Organisation to settle a dispute with China over its restriction on exports of raw materials, including rare earth elements critical to electronics makers.

The dispute is one of several between Beijing and leading economies before the WTO, but the first to be jointly filed by the EU, US and Japan.

The move comes as America gears up for presidential elections in November, with Democrat president Barack Obama being accused by Republicans of failing to play tough with China.

Speaking yesterday, Mr Obama said China would not be allowed to continue “skirting the rules”. He said: “If China would simply let the market work on its own, we’d have no objection.

“But their policies are preventing that from happening. And they go against the very rules that China agreed to follow.”

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,” Mr De Gucht said. Beijing said the export curbs were motivated by environmental concerns and said it would defend itself.

Though dependent on the outside world for raw materials such as iron and coal, China accounts for about 97 per cent of world output of the 17 rare earth metals used to make mobile phones, disk drives, wind turbines and electric cars.

China’s industry minister Miao Wei said the quotas did not amount to protectionism. “We feel sorry for their decision to complain to the WTO. Meantime, we are preparing to defend ourselves.”