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US, EU, and Japan file trade complaint against China's rare earth metals export rules

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The US, Japan, and the European Union have filed a trade complaint with the World Trade Organization over China's stringent export regulations on rare earth metals.

Rare Earth Minearls
Rare Earth Minearls

The US, Japan, and the European Union have banded together in an effort to break China's seemingly monopolistic control over the rare earth metals market. The three governments filed a complaint with the World Trade Organization, claiming China has been tightening restrictions on exports and hoarding metals for companies within its own borders. Rare earth metals are an integral part of producing advanced technology and consumer electronics, and the nation's export quotas have caused prices to skyrocket for non-Chinese companies.

For the uninitiated, rare earth metals are 17 elements that possess unique magnetic or phosphorescent properties, which have helped allow for significant advancements in technology over the past two decades. The elements aren't actually that rare, but typically exist only in small deposits, making them expensive to mine. In addition to this, refining the mined metals is both costly and environmentally hazardous. China's cheap labor and lax environmental protection laws are often cited as reasons the nation has risen to upwards of 95 percent of rare earth metals production, while only possessing a third of the world's supply.

The US, Japan, and the EU have requested a meeting with China at the WTO to attempt to resolve the export matter. If the two sides can't come to an agreement, the WTO will issue a ruling. Historically, the organization has ruled against countries that limit the export of competitive materials. However, this isn't the first time China has flexed its muscle to control the rare earths market, and the Chinese government responded to the complaint by saying it would defend its stance.

If there's a positive to take away from this dispute, it's that other mining companies around the world, including in the US, have started a push to break China's monopoly over rare earth metal; production from other nations is expected to match China's by 2020.