WTO Appellate Body rules against Chinese restrictions on access to rare earths and other raw materials (E.C.)

European Commission, Press release, Brussels, 7 August 2014:

The Appellate Body of the World Trade Organisation (WTO) today ruled in the EU’s favour. It confirmed the findings made by a Panel in March 2014 that China’s export restrictions on rare earth, as well as tungsten and molybdenum, are in breach of WTO rules. Backing the claims of the EU and its co-complainants, the US and Japan, the WTO found that China’s export duties and quotas were not justified for reasons of environmental protection or conservation policy.

EU Trade Commissioner Karel de Gucht qualified the ruling as “another milestone in the EU’s efforts to ensure fair access to much-needed raw materials for its industries”. “This ruling sends a clear signal that export restrictions cannot be used to protect or promote domestic industries at the expense of foreign competitors. I now look forward to China swiftly bringing its export regime in line with international rules, as it did with other raw materials under the previous WTO ruling,” Commissioner said. 

In 2012, China lost another WTO case, brought jointly by the EU, US and Mexico, on export restrictions on raw materials. It subsequently lifted those restrictions. However, it did not lift similar measures, export quotas and duties, applying to other raw materials, such as tungsten, molybdenum and rare earths. The EU and its co-complainants were therefore left with no option but to use the WTO’s dispute settlement mechanism again. 

China has argued that its export restrictions on rare earths are part of its conservation policy. But the WTO’s position today is clear: export restrictions cannot be imposed to conserve exhaustible natural resources if the domestic production or consumption of the same raw materials is not restricted at the same time for the same purpose.

Neither the complainants nor the panel contest China’s right to put in place conservation policies. However, as the WTO clarified, the sovereign right of a country over its natural resources does not allow it to control international markets or the global distribution of raw materials. A WTO Member may decide on the level or pace at which it uses its resources but once raw materials have been extracted, they are subject to WTO trade rules. The extracting country cannot impose restrictions only on foreign users. 

Background

The raw materials involved in this case are several rare earths, as well as tungsten and molybdenum. They have a wide range of uses in hi-tech and green goods, automotive and machinery manufacturing, chemicals, steel and non-ferrous metal industries.

Chinese export restrictions have been mainly export duties or export quotas, as well as additional requirements and procedures for exporters. They create serious disadvantages for foreign industries by artificially increasing China’s export prices and driving up world prices. Such restrictions also artificially lower China’s domestic prices for raw materials. As they increase domestic supplies. This gives China’s local industries a competitive advantage and puts pressure on foreign producers to move their operations and technologies to China.

The EU, together with the US and Japan, launched a WTO dispute settlement case in March 2012. Initial consultations with China did not bring an amicable solution. As a result, the WTO set up a panel in June 2012. The Panel report was issued on 26 March 2014 and was full victory for the EU and its co-complainants. China appealed the report on 25 April 2014. The reports will be adopted by the WTO Dispute Settlement Body within 30 days and China will have to comply with the ruling immediately or within a reasonable period of time that it can request for implementation..................http://europa.eu/rapid/press-release_IP-14-912_en.htm?locale=en

7/8/14

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Related:

• WTO confirms China’s export restrictions on rare earths and other raw materials incompatible with WTO rules. -European Commission(26/3/14)

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• China verlängert Produktionsstopp für Seltene Erden 

• Μάχη ΕΕ-Κίνας για τα ορυκτά της Γροιλανδίας

• Ο ορυκτός πλούτος δεν «ανεξαρτητοποιεί» τη Γροιλανδία, λένε επιστήμονες

• ΚΙΝΑ: Το γεωπολιτικό παιχνίδι με τις «σπάνιες γαίες»

• Σπάνιες Γαίες και εφαρμογές

• Οι σπάνιες γαίες και ο ρόλος της Κίνας

China, EU reach deal on solar panel dispute

BRUSSELS, July 27 (Xinhua) -- The China Chamber of Commerce for Import and Export of Machinery and Electronic Products and the European Commission have reached a deal to resolve a dispute involving solar panels.
"After weeks of intensive talks, I can announce today that I am satisfied with the offer of a price undertaking submitted by China's solar panel exporters," EU Trade Commissioner Karel De Gucht said in a statement, referring to an agreement for a minimum price for China's imports.
"We found an amicable solution ... that will lead to a new market equilibrium at sustainable prices," De Gucht said.

The Commissioner said the next step for him is to table this offer for approval by the European Commission.
Further details of the legal acts concerning the undertaking arrangement can only be released following their adoption by the Commission.
The Chinese Ministry of Commerce, meanwhile, said China welcomes the deal which "showcased pragmatic and flexible attitudes from both sides and the wisdom to resolve the issue."
According to the Ministry of Commerce spokesman Shen Danyang, resolving the trade dispute is conducive to an open, cooperative, stable and sustainable economic and trade relationship between China and the EU.
He added that China is willing to further promote exchanges and cooperation with the EU side in the photovoltaic industry field.
Chinese solar panel production quadrupled between 2009 and 2011 to more than the entire global demand, and the Commission accused China of dumping its solar panels at below the cost of production in Europe.
The European Commission on June 4 decided to impose provisional anti-dumping duties on imports of solar panels, cells and wafers from China.
Starting from June 6, EU imports of Chinese solar products was subject to a punitive duty of 11.8 percent until August 6, from when on, the duty would have been raised to 47.6 percent if the two sides could not sort out the dispute through negotiations.
http://english.cntv.cn
27/7/13
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Failed referendum leaves Bulgaria without nuclear future

A referendum on nuclear energy in Bulgaria failed due to low turnout, and the country's ruling party has confirmed it will not build a new nuclear plant. Critics warn that without nuclear energy, Bulgaria may become a third-world country in 20 years.
The referendum, which was supposed to determine the future course of nuclear energy in Bulgaria, has been officially declared invalid: The final voter turnout was about 20 percent, far less than the required 60 percent.
Nearly 61 percent of voters who participated in Sunday’s referendum approved of building the nuclear plant.
Bulgarian Prime Minister Boiko Borisov confirmed that his ruling center-right GERB party would not resume construction on a nuclear power plant in Belene.

In March 2012, the GERB party scrapped the 2,000-megawatt nuclear plant project, which had been under construction by Russia's Atomstroyexport since 2008. The Bulgarian government said that the country could no longer afford the plant’s 6.4-billion euro price tag.
During the negotiations that preceded the cancellation, GERB attempted to bring an American or European contractor on to the project. Bulgaria also demanded that the price be lowered to less than 5 billion euro, which Atomstroyexport refused to do. A breakdown in negotiations led to the termination of the project.
Following the failure of the project, the opposition Socialist party called for a referendum on the Belene plant. Though the government supported the referendum, Prime Minister Borisov urged Bulgarians to vote against the project.
“The question [of the referendum] was put pretty vaguely, no one explained to an average voter the particulars of nuclear energy,” Krasimira Ilieva of the Bulgarian Nuclear Society told RT.
Bulgarian Socialist MP Peter Kurumbashev said the plant would eventually have justified the expense. Kurumbashev told RT that the cost of the nuclear plant proposed by Atomstroyexport is good, when compared to the costs of similar nuclear plants proposed for construction in neighboring Turkey.
“It takes 12-14 years to pay back the money, whereas [the] life of this type of reactors is 60 years. So, in the next 44 years you’re just ‘printing’ money,” he said, adding that the referendum had become too politicized and unclear.
Kurumbashev said that negative campaign continued throughout the entirety of the referendum. The ruling party even said there was no need for referendum at all, “which is a very interesting statement on the part of [a] democracy,” he said.
The Socialist Party of Bulgaria announced plans to revive the project if they win the 2013 elections.
Bulgaria currently operates only one nuclear power plant in Kozloduy, about 200 kilometers from the capital Sofia, which went online in 1974. At its peak production, the plant’s six reactors delivered over 45 percent of Bulgaria’s electricity. The EU ordered four of the reactors to be shut down over safety concerns.

A general view shows the Kozloduy Nuclear Power Plant, some 200 km (124 miles) north of Sofia. (Reuters / Oleg Popov)

 

The Belene nuclear plant was intended to replace the four reactors of Kozloduy plant that were taken offline.
Kozloduy’s two operational 1,000-megawatt reactors, designed by the Soviet Union, were modernized in 2005 and 2006 to meet EU safety demands. They will be operable until 2027 and 2032 respectively, at which point Bulgaria will no longer generate nuclear energy.
Some analysts believe that losing atomic power could lead Bulgaria to disaster. “If Bulgaria keeps using only the two reactors that it already has, it will soon find itself out of power as their service time is running out,” Krasimira Ilieva warned.
Ilieva told RT that alternative sources of power have proven too expensive for Bulgaria, and that “We’ve lost out on the economic assets over the past years… Losing nuclear energy would turn us into a third-world state completely.”
So far, only one country in Europe, Lithuania, has given up nuclear energy following EU demands to shut down Soviet-built nuclear power plants. The Ignalinskaya nuclear power plant was shut down on December 31, 2009; Lithuana is still searching for an investor to construct a new one.
Lithuania also does not have the capability to safely dispose of the Ignalinskaya plant’s radioactive waste and thousands of tons of scrap metal, which is also partially radioactive. The country now imports up to 65 percent of its electricity, the Litovsky Courrier website reported.
.rt.com
31/01/13
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Η έρευνα της ευρωπαϊκής αντιμονοπωλιακής επιτροπής για την Gazprom στοχεύει μόνο στην μείωση των τιμών του ρωσικού αερίου

Η έρευνα της αντιμονοπωλιακής επιτροπής της κομισιόν για τα συμβόλαια της Gazprom προσπαθεί να πετύχει μείωση των συμβαλλόμενων τιμών για το ρωσικό αέριο, δήλωσε  ο Διευθυντής  Οικονομικής Συνεργασίας του ρωσικού Υπουργείου Εξωτερικών Τμήματος, Αλέξανδρος Γκορμπάν.Την θεωρεί σαν μια συνηθισμένη διαδικασία των ευρωπαϊκών οργάνων και μάλλον ασήμαντη.

Τέτοιου είδους ενέργειες από διάφορα ευρωπαϊκά όργανα συμβαίνουν συνεχώς. Για να ενισχύσει την επιχειρηματολογία του ο Ρώσος αξιωματούχος αναφέρθηκε στην περίπτωση της Microsoft που έκλεισε σε πρόστιμα δισεκατομμυρίων.


Σύμφωνα με τον ίδιο, ο ισχυρισμός της κομισιον, ότι η Ρωσία χρησιμοποιεί το αέριο για την επίτευξη πολιτικών στόχων, αναιρείται από την ίδια την πραγματικότητα διότι συμβατικός όρος των συμβολαίων είναι υπέρογκες αποζημιώσεις από την Gazprom σε περίπτωση διακοπής της παράδοσης/τροφοδοσίας αερίου. 
1/1/13
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ΣΧΕΤΙΚΑ:

• Gazprom probed by EU over alleged unfair competition

• Putin προς Barroso: «Είσαι ένοχος»

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• Συμφωνίες με Gazprom με τη συμμετοχή της Κομισιόν;

  
  
  • [1] Europe’s antitrust inquiry into Gazprom seeks to beat down gas contract price - MFA
  
  The European Commission’s antitrust inquiry into the Russian company Gazprom seeks to beat down the contract price for Russian fuel, said Director of the Russian Foreign Ministry’s Economic Cooperation Department, Alexander Gorban, in a statement. He referred to the proceedings as rather trivial.
  
  
  This kind of thing occurs in Europe continually. To prove his point, the diplomat cited the recent investigation into Microsoft, which ended in fines running into billions.
  
  When commenting on western beliefs that Russia is using its gas lever to attain political objectives, Gorban said that this was impossible to do in practical terms.
  
  The currently effective contracts provide for exorbitant penalties if gas deliveries come to a halt.
  
  Voice of Russia, Interfax
• .ruvr.ru
• 1/1/13

Gazprom gets a boost from Asia as EU sales decline | EurActiv

Russian gas export monopoly Gazprom reported sales declines in Europe and its home market, showing the importance of its strategy to expand into Asia.

Gazprom's sales of gas to Europe and other countries fell 0.5% to 416 billion roubles (€10.2 billion) in the first six months of the year, while sales to Russia fell 10% to 120 billion roubles (€3 billion), according to the company's second-quarter results on Friday.

The trend has continued well into October. Exports to Europe, where the company covers a quarter of the continent's gas needs, fell 8% for the first 10 months of the year, to 113.1 billion cubic metres, according to both a company source and an analyst.
Europe has been the major gas market for Russia and the Soviet Union since it started to export gas by pipeline to West Germany in the 1970s.
But economic and financial woes have eaten into European demand in recent years, and the region's utilities are seeking to lessen their reliance on supplies from Gazprom, whose prices are usually higher than in the spot market.
Gazprom said on Friday that retroactive payments to European customers, who had claimed its prices were too high, exceeded 133 billion roubles (€3.3 billion) in the first half of the year.
The figure exceeds information that Gazprom gave in September that it would repay around €1 billion in the period from April through December and that the bulk would go to top German utility E.ON.
The European Union is investigating claims that Gazprom has been hindering the free flow of gas across the EU and imposing unfair prices by linking the cost of gas to oil prices.
Gazprom said it was analysing information related to the investigation and that it had not recorded a provision for any possible fines.
As Gazprom's problems with Europe persist, Russian President Vladimir Putin has ordered the company to forge close ties with fast-growing Asia Pacific consumers such as China and Japan.
Russia, the world's second-largest producer of natural gas after the United States, has for years tried to secure a deal to sell pipeline gas to China, the world's largest energy consumer. The two countries have failed so far to iron out differences over issues such as price and routes.
"The deal with China would be a great boost for Gazprom," Sergey Vakhrameyev, an analyst with Metropol brokerage, said.
"Prices in China are quite high at the moment, and Gazprom would have benefited from the agreement."

EurActiv.com with Reuters

Gazprom gets a boost from Asia as EU sales decline | EurActiv
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H Gazprom προσανατολίζεται προς Ασία και Ειρηνικό

Η ρωσική Gazprom δέσμευσε πάνω από 29δις € για την ανάπτυξη ενός πεδίου φυσικού αερίου στην Ανατολική Σιβηρία καθώς και για την κατασκευή ενός αγωγού στο λιμάνι του Ειρηνικού Vladivostok, αποσκοπώντας να μειώσει την εξάρτησή της από τις εξαγωγές στην Ευρώπη και να αναπτύξει νέες αγορές στην Ασία.
Ο ρώσος πρόεδρος Vladimir Putin έδωσε εντολή στην Gazprom να αναπτύξει στενές επαφές με τους ταχύτατα αναπτυσσόμενους καταναλωτές της Ασίας και του Ειρηνικού, όπως η Κίνα και η Ιαπωνία, προκειμένου να αντιμετωπιστεί η συνεχώς μειούμενη ζήτηση από την Ευρώπη. ............ΟΙΚΟ ΕΙΔΗΣΕΙΣ (31/10/12)

Gazprom probed by EU over alleged unfair competition

Russia’s gas major Gazprom faces a probe of the European Union over alleged violations of fair competition in the natural gas markets of Central and Eastern Europe.

­The European Commission said it would investigate if Gazprom was hindering the free flow of gas across the EU countries, preventing supply diversification and limiting customer choice of delivery points. The company is also suspected of imposing unfair prices on its customers by linking the price of gas to oil prices.

“Such behavior, if established, may constitute a restriction of competition and lead to higher prices and deterioration of security of supply,” the European Commission said in a statement. “Ultimately, such behavior would harm EU consumers,” it added

If found guilty of violating EU competition rules Gazprom could be fined as much as 10% of annual revenue, or US$1.1-1.4 billion. Gazprom is yet to comment the issue.

European regulators said the probe will look at Gazprom's sales practices in eight European countries including Bulgaria, Estonia, Latvia, Lithuania, Slovakia and others. Russia supplies as much 36% of the EU's natural gas it also accounts for 82% of Poland's gas, 83% for Hungary and 69% for the Czech Republic.

The formal investigation was launched after the European antitrust authorities raided gas companies across Europe, including RWE, E.ON’s Ruhrgas and Hungary units, OMV AG (OMV), last September to uncover information on prices and supplies.

Meanwhile Lithuania’s government last year asked the EU to investigate Gazprom for refusing to cut gas prices. “I can confirm that we have asked the European Commission to look into possible abuse of the European competition rules over unfair pricing and I believe the probe is justified,” Energy Minister Arvydas Sekmokas was quoted as saying by the Baltic News Service.

The EU has been trying to diversify its gas supply after disputes involving Russia and Ukraine – a key transit country for Russian gas to Europe – led to supply disruptions last winter. In a separate move last year, EU authorities adopted new polices such as separating energy production from distribution, aimed at reducing Gazprom’s presence in the market.

The new policy – the so-called third energy package – was criticized by Russian authorities and experts, who say it will increase uncertainty in the European energy market.

Gazprom said it is considering lobbying the European Commission to get an exemption from the third energy package.

News RSS : Today

5/9/12

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• Η Κομισιόν εκφράζει υποψίες "ότι η Gazprom παρεμποδίζει τον ανταγωνισμό στις αγορές φυσικού αερίου"