China is preparing to scrap tariffs and quotas on exports of rare earths after a World Trade Organization (WTO) panel found the rules discriminatory, Reuters reported, citing a source with knowledge of the matter.
Export restrictions may be cancelled next year, the report said, adding that if the move goes smoothly, export quotas on other products could also be scrapped at a later stage.
After complaining that global market prices were too low to cover the costs of production, Beijing imposed tough output quotas and export tariffs in 2010 as part of a wider crackdown on the sector. Exporters have paid a tax of 15-25 percent this year.
The measures saw prices jump threefold, but a WTO panel said in March that the tariffs violated trade rules by giving domestic consumers an unfair advantage over foreign competitors, the report noted.
Despite appealing the decision, Beijing expects to have little choice but to accept the ruling and could cancel export restrictions, Reuters cited an industry source as saying.
China accounts for more than 90 percent of global rare earth production, giving it a stranglehold over the supply of 17 elements that are used widely in several high-tech industries.
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