China May End Rare-Earth Quotas, Export Tariffs, Reuters Reports

China will soon ends tariffs and quotas on exports of rare earths after a World Trade Organization panel found the rules discriminatory, Reuters said, citing a person with direct knowledge of the matter.

Restrictions on on rare earths, tungsten and molybdenum may be canceled next year, followed by export quotas “on other products,” Reuters said, citing an unidentified person in the industry with ties to the government. Calls to the press offices of the Industry and Information Technology Ministry, the Commerce Ministry and the National Development and Reform Commission went unanswered after normal office hours yesterday.

A dispute-settlement panel at the Geneva-based trade arbiter determined in March that China didn’t adequately justify its export duties and quotas on rare earths, tungsten and molybdenum. China, which produces more than 90 percent of the world’s rare-earth minerals, “is currently assessing the panel report and will follow the WTO dispute settlement procedures to settle this dispute,” its Commerce Ministry said in March.

“China is likely to do away with the rare earth export quota after the WTO dispute with trading partners,” Lin Jian, a Hangzhou, China-based mining analyst at Zheshang Securities Co., said in a recent research note to clients. “This won’t have much impact on the global market because the supply exceeds demand in this economy and China hasn’t been using up its export quota.”

China may raise the resource tax on rare earths “significantly,” with an announcement coming in the second half of the year, the Economic Information Daily reported on May 20, citing an unidentified person familiar with the matter.

— With assistance by Alexandra Ho, and Feiwen Rong

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