On March 26, 2014, the Office of the United States Representative (USTR) issued a press release announcing that the World Trade Organization (WTO) Dispute Settlement Panel ruled that China’s export restraints breach WTO guidelines.

The claim was initially filed by the U.S., Japan, and the European Union (EU) in 2012, as a measure against China’s export restraints and drastically reduced export quotas for rare earths, which led to a spike in global prices. The release explains that, “These types of export restraints can skew the playing field against the United States and other countries in the production and export of downstream products.  They can artificially increase world prices for these raw material inputs while artificially lowering prices for Chinese producers.“

After investigating the circumstances, the WTO panel concluded that China’s export duties and quotas on numerous forms of rare earths, tungsten, and molybdenum constitute a breach of WTO rules and that “China failed to justify those measures as legitimate conservation or environmental protection measures. The panel also found that China’s export quota administration requirements are inconsistent with WTO rules.”

China has to adopt or appeal to the panel report within 60 days of publication.

The press release can be accessed here