China hoards while Honda circumvents with recycling.
Wayne Gerdes -
CleanMPG - June 28, 2012
2012 Honda Civic Hybrid – $24,200 to start while sporting a 44 mpgUS city/highway/combined rating. Rare Earths in its motors and possibly its Li-Ion pack could be used to create future Civic Hybrids someday.
Yesterday the United States, EU and Japan requested the establishment of a World Trade Organization (WTO) dispute settlement panel to decide U.S. claims regarding China’s unfair export restraints on rare earths, tungsten and molybdenum. The European Union and Japan have also requested the establishment of panels on this matter, U.S. Trade Representative and Ambassador Ron Kirk announced yesterday.
Ron Kirk is a member of President Obama’s Cabinet and serves as the President's principal trade advisor, negotiator, and spokesperson on trade issues.
Earlier this year, the United States won a landmark WTO challenge against China’s export restraints on nine other industrial inputs. Although China argued in that case that its export restraints could be justified as conservation or environmental protection measures, the WTO concluded otherwise.
Once again, despite China’s characterizations, its export restraint measures on rare earths, tungsten and molybdenum appear to be part of a troubling industrial policy aimed at providing substantial competitive advantages for Chinese manufacturers at the expense of foreign manufacturers. Specifically, because of China’s position as a leading global producer of these materials, its export restraint measures give China the ability significantly to affect global supply and pricing. These measures can provide important advantages to China’s downstream producers, to the detriment of their U.S. and other foreign counterparts. These measures also can create substantial pressure on foreign producers to move their operations, jobs and technologies to China.
The United States, the European Union and Japan requested formal consultations with China on March 13, 2012. The parties held consultations on April 25-26, 2012, without resolution of the matter.
China Trade Restrictions Revealed
China imposes export restraints which include both export duties and quotas on rare earths, tungsten and molybdenum, as well as many intermediate products processed from these raw materials. In all, China’s export restraints on the materials at issue in this dispute cover approximately 100 tariff codes.
With respect to the harmful export duties that China imposes on rare earths, tungsten and molybdenum, China committed as part of the terms of its WTO accession to eliminate export duties for all products other than those listed in a specific annex. The export duties the United States is challenging are imposed on products not listed in that annex. The WTO recently confirmed in the China – Measures Related to the Exportation of Various Raw Materials dispute that China cannot justify its imposition of such export duties under the exceptions provided in Article XX of the General Agreement on Tariffs and Trade 1994 (GATT 1994).
The trade-distorting export quotas that China imposes on rare earths, tungsten and molybdenum, as well as the other export restrictions imposed through related export requirements, appear to be inconsistent with Article XI:1 of the GATT 1994, which generally prohibits these types of restrictions on exports. In addition, rules and requirements that China imposes in the administration of these export quotas also appear to run afoul of commitments set forth in China's WTO Accession Protocol not to restrict the right to export goods.
Honda Responds with Action
Honda will begin reusing Rare Earth metals extracted from used NiMH batteries before the end of the year.
Rare Earth’s – If You Cannot Buy It, Recycle It! It has been extracting rare earth metals from used nickel-metal hydride batteries at the plant of Japan Metals & Chemicals Co., Ltd. from April of this year and last week announced plans to begin reusing the extracted metals before the end of the year.
Honda will pursue the recycling of precious resources by reusing extracted rare earth metals not only for NiMH batteries but also for use in a wide range of parts.
Another cute Honda idea is to use any residual voltage from the used batteries as regenerative voltage for the disassembly process.
In addition, Honda is continuing its focus on recycling rare earth metals extracted from a variety of used parts including hybrid motors and Li-Ion batteries in addition to NiMH batteries.
Honda has long been committed to the 3R (reduce, reuse, recycle) approach. The company said it collects and recycles bumpers that were removed from vehicles as a raw material, sells functional used parts as reusable parts, recycling and reselling used oil filters, etc.
In a prepared statement, Honda said it will continue strengthening its network which links to the reuse and recycling of resources in the effort to reduce the environmental footprint of the mobility society as a whole.
In this case, if the pricing gets high enough due to onerous trade restrictions, maybe they can recycle enough to meet their own needs?
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