In 2009, the US requested WTO dispute settlement consultations with China regarding export restraints maintained by China on various forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc.

The European Union and Mexico made separate complaints and were later joined by Argentina, Brazil, Canada, Chile, Colombia, Ecuador, India, Japan, Korea, Norway, Saudi Arabia, Chinese Taipei and Turkey as third parties in the dispute.

In July, the panel found the export duties and export quotas China maintained were a breach of WTO rules and China failed to justify those measures as legitimate conservation measures, environmental protection measures or short-supply measures.

The panel also found China’s imposition of minimum export price, export licensing and export quota administration requirements on those materials, as well as China’s failure to publish certain measures related to these requirements, was inconsistent with WTO rules.

China appealed certain aspects of the panel’s report in August but the Appellate Body yesterday rejected the appeal.

“Today’s report is a tremendous victory for the United States – particularly its manufacturers and workers,” US Trade Representative Ron Kirk said.

“The Obama administration will continue to ensure that China and every other country play by the rules so that US workers and companies can compete and succeed on a level playing field.”

European Union Trade Commissioner Karel De Gucht said the ruling could be extended to rare earths.

"China now must comply by removing these export restrictions swiftly and furthermore, I expect China to bring its overall export regime – including for rare earths – in line with WTO rules,” De Gucht said.

This story first appeared on ILN's sister publication MiningNews.net.