The World Trade Organization (WTO) judged that some Chinese raw materials exports had violated the global trade rules on export tariffs and quotas, according to a report released on Wednesday.

The WTO said China's limits on export rare-earth metals, molybdenum and tungsten are inconsistent with its obligations in the organization. It also ruled against Beijing's export quotas on the materials and its move to restrict their trade.

China's Ministry of Commerce reacted with regret to the WTO ruling. The legal department of the MOC replied that the ministry is evaluating the report and adopting measures in accordance with WTO dispute settlement protocols.

Rare earths are in great demand for their use in smartphones and other gadgets, and China is the biggest global supplier, providing over 90 percent of the world's rare earth production.

Over the past decade the demand for rare earths has increased three-fold to nearly 125,000 metric tons a year. According to some estimates, the figure could cross 200,000 tons this year.

However, there have been concerns that mining rare earths results in severe environmental damage.

In a response to the reporting, the MOC said the government has enhanced management of resource products which are high-polluting and high-energy consuming.

"This meets the requirement of protecting such resources that can be exhausted and environment in China, and also contributes to the global sustainable development," said an unidentified official with the ministry, quoted by Xinhua News Agency.

The Chinese side considers these measures tally with goals of sustainable development advocated by the WTO and are conducive to the coordinated development of resources, environment and human beings, said the official.

Meanwhile, the panel recognized China's comprehensive resource and environment conservation measures taken for the products at issue, and rejected EU's claim that the “export performance” requirement imposed by the Chinese government on enterprises applying for molybdenum export quotas discriminated foreign enterprises.

The Chinese side will keep enhancing its management of resource products under the WTO rules to preserve fair competition, the official added.

The WTO report was a response to accusations made in March of 2012 by the United States, European Union and Japan and the organization formed a dispute settlement panel in July of 2012.

Related

• WTO rules China's export measures on rare earth inconsistent with its rules
• China's rare earth profits fall

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