Over the past three decades, China has been dominating the world’s rare earth export market. According to the statistical information, it has been identified that they catered around 90 percent of the requirements of the world market. However, during the past few years, several reasons have forced the Chinese government to restrict their exports. The results of these restrictions have put the world’s largest rare earth material consumers in trouble. That is the reason why The World Trade Organization, (WTO) has asked China to end these restrictions, at least for a short period of time.
According to a report published by the United Steelworkers Union, China has been supplying all the ingredients that were required in the manufacturing process of wind turbine motors, flat screen television motors, hybrid car batteries and even petroleum. All the leading manufacturers in the world have greatly been affected by these restrictions and they seem to be hopeless since there is no other competitive supplier who can cater this demand.
The World Trade Organization has considered this as a major issue and they have discussed and have come up with the most appropriate solution to reduce the negative effects caused by these new restrictions. This influenced the American President, Barack Obama to bring down a new world trade case. This case provided promising results and the European Union also joined to support the case one year later.
Some of the leading manufacturers have mentioned that they prefer the coming out of new rules. However, they also mentioned that they are looking for an alternative option and they will not be depending on foreign imports for the entire future. Even though they have filed a trade complaint, no other substitute steps have been taken at the moment. As per them, they need to start producing more and more minerals within the next few years in order to promote their security as well as competitiveness.
China has not yet responded to these cases and many experts say that these requests will not be enough to change the mind of Chinese government. In case they don’t change their minds, countries like United States, United Kingdom and Australia have to be prepared to produce their own requirements in rare earth materials.