1. The WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum A Perspective from the U.S. By Terence P. Stewart Law Offices of Stewart and Stewart tstewart@stewartlaw.com

2. The WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum – A Perspective from the U.S. “America’s workers and manufacturers are being hurt in both established and budding industrial sectors by these policies. China continues to make its export restraints more restrictive, resulting in massive distortions and harmful disruptions in supply chains for these materials throughout the global marketplace,” said Ambassador Kirk. USTR Press Release, March 13, 2012

3. The WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum – A Perspective from the U.S. USTR Fact Sheet, March 13, 2012

4. The WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum – A Perspective from the U.S. The United States recently won a WTO challenge against China’s export restraints on nine other industrial inputs. China’s export restraint measures on rare earths, tungsten, and molybdenum appear to be part of the same troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers. China imposes several different types of unfair export restraints on the materials at issue in today’s consultations request, including export duties, export quotas, export pricing requirements as well as related export procedures and requirements. Because China is a top global producer for these key inputs, its harmful policies artificially increase prices for the inputs outside of China while lowering prices in China. This price dynamic creates significant advantages for China’s producers when competing against U.S. producers – both in China’s market and in other markets around the world. The improper export restraints also contribute to creating substantial pressure on U.S. and other non-Chinese downstream producers to move their operations, jobs, and technologies to China. USTR Press Release, March 13, 2012

5. The WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum – A Perspective from the U.S.

6. This is the second case on the same or similar policies as applied to different products. First case, Appellate Body Report on January 31, 2012 finding export duties and export quotas violated WTO obligations Dispute Settlement Body adopted AB Report on February 22, 2012 with recommendations to China to bring its measures into conformity

7. The WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum – A Perspective from the U.S. March 13, 2012 Request for Consultations from the U.S. (with similar requests from the EU and Japan): – Export duties – Quantitative restrictions such as quotas – other restrictions which discriminate against foreign invested entities, including: Fees and formalities Restrictions on the right to export

8. The WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum – A Perspective from the U.S. March 13, 2012 Request for Consultations from the U.S. (with similar requests from the EU and Japan)(cont.): – Other restrictions such as licensing requirements – Minimum export price system, approval of export contracts and export prices – Administration of various export restraints is not uniform, impartial, reasonable or transparent – Also administration through measures that are not published

9. The WTO Case Against China’s Export Restraints on Rare Earths, Tungsten, and Molybdenum – A Perspective from the U.S. Unless China modifies its basic approach to export restraints, there will be more cases in the future. For example, the following products were identified as of concern in a report we released in late January on auto parts in addition to those subject to the new case: – Antimony – Chromium – Cobalt – Copper – Germanium – Graphite – Indium – Nickel – Niobium – Silver – Talc – Tin – Titanium – Vanadium