Expert Zone

Straight from the Specialists

The rare earths distraction

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The U.S., EU and Japan are suing China in the World Trade Organisation (WTO), calling Chinese export quotas on rare earth elements an illegal trade practice.

The U.S. will most likely win. But the suit is peripheral to real issues and was brought because the U.S. is unable or unwilling to address the true problems in Sino-American economic relations.

Of the many questionable practices in Chinese trade policy, the rare earths quota is a strange one to pick on. Last year, the quota was barely half-filled; higher prices and expanding supply elsewhere caused demand for Chinese rare earths to plummet.

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