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Many of the world's electronics contain tiny amounts of rare earth elements. And much of the world's supply of these minerals are found in China. But China has come under fire for restricting the amounts of rare earths it's exporting... as part of its agreement as a member of the World Trade Organization. And the pressure is mounting.
On Thursday EU trade chief Karel De Gucht called for China to change its policy on rare earths after meeting with his Chinese counterpart, Commerce Minister Chen Deming.
China is where some 97 percent of rare earths are found. They're crucial to global electronics, defense and renewable energy industries.
Chinese authorities angered trading partners by slashing rare earth export quotas by 35 percent for the first half of 2011.
That move choked off global supplies. Last week the World Trade Organization ruled that China breached trade law by curbing exports of eight raw materials.
Shortly after the meeting, China issued a new quota of rare earth exports for this year... making up for previous cuts... bringing China's total export quotas for the year to 30,184 tons, down slightly from 30,258 tons in 2010.
EU trade chief Karel De Gucht says it's too little, too late.
[Karel De Gucht, EU Trade Commissioner]:
"What industry needs is predictability. If they publish today the figures for the second semester, it's certainly not too early... it's rather too late. So, they should do that more in advance."
In its raw materials ruling, the WTO panel said China's domestic policies fell short of demonstrating that its export duties on the materials.
But De Gucht says he's confident that a negotiated solution will be achieved.