Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Friday, March 16, 2012

WTO action on China’s rare-earth quotas makes the right point

The confusingly named substances known as “rare earths” – blame, ultimately, the Sicilian Greek philosopher Empedocles and his theory of the four elements – are a good subject for a World Trade Organization lawsuit. On Tuesday, the United States, the European Union and Japan commenced an action about a Chinese export restriction, though the prices of rare earths are currently falling. China ought to be held to its obligations to comply with the international trading system, and the rare-earths action is the proper way to make that point.

The market has been working to counteract China’s rare-earths export quota. China had obtained its dominant position mostly by low prices, not by any monopoly of rare-earth deposits. In due course, the high prices of Chinese rare-earths exports have lowered demand for them, and encouraged non-Chinese firms to look for, produce and sell more of these commodities themselves – a process in which Canadian companies – Avalon Rare Metals Inc., Great Western Minerals Group Ltd., Neo Material Technologies Inc., Quest Rare Minerals Ltd., among others – are taking an active part.

But China’s rare-earths quota is a direct contradiction of a WTO rule that, as Lawrence Herman of Cassels Brock LLP points out, goes back to the postwar General Agreement on Tariffs and Trade of 1947; if a member-state imposes an export restriction, it must also limit its domestic supply – in China, in this case – so as not to discriminate. In fact, China is keeping its internal rare-earth prices low and its supply correspondingly high – a manifest preference for its own national market.

Since China joined the WTO in 2001, its government has not shown itself to be an arrant scoff-law. The proceeding by the U.S., the EU and Japan, still at a very early stage, may well achieve its salutary purpose.

Original Article
Source: Globe
Author: editorial

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