EU QUERIES WTO PANEL ON CHINA EXPORT RESTRICTIONS ON KEY RAW MATERIALS

BY TENGKU NOOR SHAMSIAH TENGKU ABDULLAH

KUALA LUMPUR, Nov 6 (Bernama) -- The European Union has sought explanation
from the World Trade Organisation (WTO) panel on Chinese export restrictions on
a number of key raw materials which it considers a clear breach of international
trade rules.

The EU has raised the issue with China repeatedly, including through formal
WTO consultations, but without success.

" It has now turned to the WTO dispute settlement process to ensure
China's compliance with international obligations.

The United States and Mexico also called for a panel on the same issue
today," said EU Trade Commissioner Catherine Ashton in a statement e-mailed to
BERNAMA Friday.

She said: " China's restrictions on raw materials continue to distort
competition and increase global prices, making conditions for our companies even
more difficult in this economic climate.

" I regret that the formal consultation process and significant EU
engagement on this issue has not led to an amicable solution which would have
been our preferred course of action," she said.

European industries have raised concerns over a number of years on export
restrictions -- quotas, export duties and minimum export prices -- which China
imposes on key raw materials such as yellow phosphorous, bauxite, coke,
fluorspar, magnesium, manganese, silicon metal, silicon carbide and zinc.

Some of these resources cannot be found elsewhere.

Restrictions on raw materials give Chinese companies an unfair advantage as
downstream industries in China have access to cheaper materials than their
competitors outside China.

The chemical, steel and non-ferrous metal industries as well as their
downstream clients are the main sectors concern.

The EU considers these restrictions are in violation not only of general
WTO rules but also of specific commitments that China signed up as part of
the WTO Accession Protocol.

The protocol sets out either prohibitions against the use of export duties
or strict caps on a limited number of products and discipline the use of export
licensing and binding minimum export prices.

The EU's concerns are not limited to the restrictions merely as further
legal action cannot be ruled out if these concerns are not effectively
addressed.

The EU asked for a formal WTO consultations on June 23 but the discussions
did not lead to an amicable solution.
-- BERNAMA