UPDATE 3-China loses trade dispute over rare earth exports
(New throughout, adds background, comment from EU Trade Commissioner De Gucht, details on companies affected)
By Tom Miles and Krista Hughes
GENEVA/WASHINGTON, March 26 (Reuters) - China has lost a dispute at the World Trade Organization over limits on rare earth and metals exports, handing Europe and the United States a victory over what they see as Beijing's unfair trade practices.
"Today's ruling by the WTO on rare earth shows that no one country can hoard its raw materials from the global market place at the expense of its other WTO partners," said EU Trade Commissioner Karel De Gucht.
China produces more than 90 percent of the world's rare earths, key elements in defence industry components and modern technology from iPhones and disk drives to wind turbines.
China imposed strict rare earth export quotas in 2010, saying it was trying to curtail pollution and preserve resources.
Prices of the prized commodities soared by hundreds of percent, and the United States, European Union and Japan complained that the export restrictions gave Chinese companies an unfair competitive edge. China said limits on exports of rare earths, as well as the metals tungsten and molybdenum, were needed to prevent over-mining.
Any of the parties in the case can appeal within 60 days.
The United States said the export limits allowed China to artificially increase world prices for raw materials crucial to make products like hybrid car batteries, wind turbines and energy-efficient lighting, while artificially lowering prices for Chinese producers. Continued...