UPDATE 3-EU and WTO seeking solution over China rare earths

* German economy minister says rare earths becoming scarce

* EU monitoring situation

* WTO’s Lamy says global trade agreement needed

(Updates with new details in pars 5-8, 19-21)

By Juliane von Reppert-Bismarck

BERLIN, Oct 26 (BestGrowthStock) – The World Trade Organisation and
the EU said on Tuesday they were seeking a solution to German
concerns about reported Chinese restrictions on exports of rare
earths used to make many high-tech products.

At a conference in Berlin, where the German government
warned of the severe impact of the scarcity of the 17 minerals
with magnetic, luminescent and other properties, the EU said it
was watching China’s actions for possible legal implications.

Frank Hoffmeister, a top aide of European trade chief Karel
De Gucht, was asked at the seminar whether the EU planned legal
action against China over the reported export restrictions.

“It is clear we are monitoring the situation quite closely.
We need to have clear facts,” he answered.
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Please double-click on links below for graphics showing:
– Facts on rare earth metals: http://link.reuters.com/bam39p
– Rare earth metals prices vs. gold: http://r.reuters.com/vyg32q
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The EU called on the Organisation for Economic Cooperation
and Development to draw up rules securing raw materials trade.

“The OECD has proved to be an effective forum in which to
explore and potentially enlarge pluri-lateral disciplines in the
raw materials field,” said Hoffmeister.

“Raw materials have become a geopolitical issue,” German
industry federation chief Hans-Peter Keitel said. “We need to
integrate ourselves into an international raw materials policy.”

The head of the WTO, Pascal Lamy, prescribed a completion of
stalled global trade talks as a way of eliminating uncertainty
about access to scarce raw materials.

Lamy said the Doha round — deadlocked since 2008 — would
set clear rules on the transport, sustainable exploitation and
tariffs of raw materials, and avert global political tensions.

“A completion of the Doha Round will serve as a stepping
stone towards better international trade rules in resource
sectors,” Lamy told the conference.

Germany’s electronics industry has said the market for rare
earths, used to manufacture a range of high-tech products, had
become “critical” due to reported restrictions on exports from
China, which produces 97 percent of the world’s supply.

The country’s dominance of rare earths used in high-tech
products has drawn growing international attention after reports
that the government has been choking off shipments, possibly for
political reasons.

ECONOMIC, SECURITY CONCERNS

Beijing has denied any plans to cut export quotas of the
minerals used to make cars, computers, cell phones and other
high-technology products. Washington has called it a potential
threat to the U.S. economy and national security.

China’s media has accused Western countries of making
unreasonable demands over the cheap supply of rare earths.

German Economy Minister Rainer Bruederle said his country
was “severely affected when it comes to energy resources and …
rare earths which are growing scarce”.

“When speculation is rife, you lose the foundation in the
economy,” he said. “And that is detrimental for the producing
industries. Pricing frameworks must remain on our agenda.”

Germany, which depends on raw materials from abroad to power
its export-driven economy, this month announced a government
strategy to secure access to crucial raw materials and called on
countries to address the issue together at international talks.

German companies such as ThyssenKrupp said action was needed
to secure scarce resources in China, Central Asia and Africa.

“We do not have time to discuss endlessly what to do, we
have to act now,” said Edwin Eichler, head of ThyssenKrupp Steel
Europe, adding it is time to enter Russian and Central Asian
markets. “We have to go there, we have to bring our knowledge,
and maybe we will find some new resources there.”

Chinese representatives were not present on any of the panel
discussions in Berlin, though the hosts said an official from
the Chinese embassy had been invited.

Turning to efforts to address trade imbalances, Bruederle
said Berlin was ready for a “frank dialogue” with the United
States, but he rebuffed a proposal by U.S. Treasury Secretary
Timothy Geithner for a 4 percent limit on trade imbalances.

(Writing by Brian Rohan; editing by Stephen Brown)

UPDATE 3-EU and WTO seeking solution over China rare earths