Japan has joined the United States and the European Union in filing a complaint with the World Trade Organization over China's restrictions on its exports of rare earths — which are indispensable in the production of such high-tech products such as hybrid and electric cars, air conditioners and smartphones. This is the first time that Japan has brought a trade dispute with China to the WTO.
In the past, Japan refrained from taking such action fearing that it would create friction in bilateral business and diplomatic relations with China. Japan relies on China for most of its rare earths. The government's action this time is understandable because rare earths are important to Japan's manufacturing industry and China has made no visible effort to improve the situation. It is hoped that the WTO proceedings to resolve the dispute will go smoothly.
China's position is that it is restricting mining and exports of rare earths to protect the environment and that its actions are in accordance with WTO rules. It also says that since China's deposits of rare earths account for only 36.4 percent of the global deposits, the current practice of producing 90 percent of world supply is not sustainable. Japan should pursue dialogue with China outside the WTO proceedings as well with the aim of facilitating a timely resolution to the dispute.