China defends export limits against US and EU
June 25, 2009
By Bloomberg
China's government will contest complaints to the World Trade Organisation (WTO) from the EU and the US that the nation unfairly limits exports of raw materials such as magnesium, coke and zinc.
The policy aimed to protect the environment and natural resources, and "is in accordance with WTO rules", the Ministry of Commerce said yesterday.
The EU and the US, which lodged their third joint complaint against China on Tuesday, allege that the nation's export taxes keep material costs lower for domestic steel and manufacturing companies.
China called yesterday for a WTO probe of US restrictions on poultry imports.
The WTO's former chief, Mike Moore, warned that the world was in "dangerous waters" as protectionism grew.
US trade representative Ron Kirk said on Tuesday: "China's policies on these raw materials put a giant thumb on the scale in favour of Chinese producers. It's our job to make sure we remove that thumb."
Chinese officials have complained about Buy American rules imposed on government spending by Congress, and moves to restrict US imports of Chinese tyres and steel pipes.
This month China reiterated its own rules favouring local suppliers for government projects.
The raw materials complaint accuses China of using taxes or quotas to discourage the export of bauxite, coke, magnesium, silicon metal and zinc.
"Many of the materials cited, such as bauxite, coke and zinc, are very important resources for China and its manufacturing industry," said Judy Zhu, a commodities analyst at Standard Chartered in Shanghai. "China imports bauxite and coke to meet demand, and uses export duties to keep these resources at home."
China is either a major supplier or the only source of the materials at issue, according to the EU.
China is the biggest source of US imports, and the EU's second-largest trading partner.
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