This week, a trade war that was supposed to tear the world of high-tech manufacturing apart ended peacefully, quietly and with few casualties.
China announced plans that would comply with a World Trade Organisation decision from last year by removing export quotas and other restrictions on rare earth elements, the minerals used widely in the manufacture of electronics, computers and cars. It was another success for the US, which has not only chalked up impressive wins against China in the WTO’s dispute settlement process but also (by no means a given) often succeeded in getting Beijing to implement the decisions.
So, a big victory for global governance? Sort of. In reality, it was the free market as much as trade rules that did for China’s attempt to corner global commerce in rare earths. Moreover, in a rather choice irony, Chinese companies employed the very tricks that they use to sidestep trade restrictions by other governments to sabotage the export quotas set by their own.