Letter to His Excellency Zhang Yesui, Chinese Ambassador

Letter

Your Excellency,

It was a pleasure to meet you earlier this year. I am writing to follow up on our conversation regarding issues such as the lack of adequate exports of rare earth elements, where I had hoped to see improved cooperation between our countries.

This month, the World Trade Organization (WTO) dispute settlement panel found that export restraints imposed by China on certain raw materials are inconsistent with China's WTO obligations. Only a few weeks after this WTO decision, China released its new annual quotas for rare earth exports without significantly altering these limits, thus making further disputes over Chinese export restraints likely. As you know, last year's quota was at a significantly reduced level from previous years. This is deeply disappointing and harmful to the interests of both of our countries, as well as the global community at large.

Last year, I had written to you regarding my concerns that China's rare earths policies would stifle renewable and alternative energy production and violate China's WTO obligations. I am concerned that China's recently released export quotas on rare earths reveal a misunderstanding of the seriousness of the broader concerns of the countries that brought the export restraint case to the WTO. Although the WTO case did not directly address China's export restraints on rare earth elements, the underlying decision is widely viewed as applicable to China's policies in this area as well.

I believe that China and the United States stand to mutually benefit from future clean technology

collaboration that is undertaken fairly and in good faith. However, as the exporter of more than 90 percent of rare earth metals by weight, China's export restrictions stifle these opportunities. China's quotas, and the reported leveraging of its supply monopoly to force companies to shift production to China, have the potential to unfairly undermine the competitiveness of U.S. companies and to undermine the benefit of years of American investment in the research and development of innumerable green technologies.

I hope that the government of the Peoples' Republic of China will reexamine its rare earth export policies and work with the United States, WTO, and other members of the international community to ensure that we maintain a level playing field as we work collaboratively to develop more efficient and environmentally sustainable mining methods, better recycling technologies and new alternatives to rare earth elements.

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