US, EU File Trade Complaints Against China

The U.S. and the European Union yesterday filed complaints with the World Trade Organization against China over restrictions on the export of raw minerals.

U.S. Trade Representative Ron Kirk told a news conference, “It is a violation of world trade rules for China, which supplies major natural minerals to the world, to restrict their exports,” adding Washington has filed a complaint with the trade body.

The complaint is the first of its kind filed by the Obama administration against China.

The EU Executive Committee also said, “China has violated WTO rules by restricting export of raw minerals through a quota system, a hike in export tax, and a minimum price requirement.”

The EU and the U.S. cited bauxite, coke, magnesium, manganese, silicon metal and zinc in their complaints.

Kirk said, “The Chinese government’s move to restrict export of raw materials gives chemical, steel and aluminum manufacturers in that country a huge competitive advantage.”

EU Trade Commissioner Catherine Ashton also said, “The Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn.”

The U.S. and the EU said that when China joined the WTO in 2001, it pledged to remove these restrictions but has instead restricted exports of raw materials needed for the production of steel, semiconductors and aircraft.

In Beijing, the Chinese Commerce Ministry denied the allegation, saying, “The export restrictions on major raw materials have been taken to help protect the environment, and does not violate WTO rules.”

The ministry said Beijing will respond to the complaints according to the dispute settlement procedures of the trade body.

A steel industry source in China said, “Certain natural minerals cause environmental pollution, as they could generate carbon dioxide in the course of processing for export,” adding, “But, restricting exports of natural materials that are mainly produced in China is a natural measure required by the country to protect domestic industries amid the economic crisis.”

In an apparent retaliatory move, Beijing asked the WTO to investigate Washington’s ban on Chinese poultry imports. Following the 2004 outbreak of avian influenza, the two countries imposed bans on poultry imports in both nations.

China said it lifted the ban but the U.S. has yet to.

The Wall Street Journal said the two complaints filed separately by the EU and the U.S. highlight the importance of the dispute, adding the complaints mark a departure from past allegations by the U.S. and other countries that China is flooding foreign markets with its exports.

bonhong@donga.com