U.S. requests WTO panel to rule on China raw materials restrictions

13:29, November 05, 2009      

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The United States requested the World Trade Organization (WTO) on Wednesday to establish a dispute settlement panel to rule on China's export restraints on raw materials. But Chinese officials insist that they are consistent with WTO rules.

The materials at issue are: bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus, and zinc, key inputs for numerous downstream products in the steel, aluminum, and chemical sectors across the globe.

The Office of the United States Trade Representative (USTR) said in a statement that the raw materials are "critical to U.S. manufacturers and workers."

The USTR also said that the European Union and Mexico are joining the United States in requesting the establishment of a WTO dispute settlement panel regarding this matter.

The U.S. and the European Union requested formal consultations with China at the WTO on June 23, 2009, and Mexico filed its consultations request on August 21, 2009.

"We believe the restraints at issue in this dispute significantly distort the international market and provide preferential conditions for Chinese industries that use these raw materials," said Debbie Mesloh, a USTR spokeswoman.

"Working together with the European Union and Mexico, we tried to resolve this issue through consultations, but did not succeed. At this point, therefore, we need to move forward with the next step in the WTO dispute settlement process," Mesloh stated. "We remain open to working with China to find a mutually agreeable solution to our concerns."

But the Chinese Ministry of Commerce defended China's export policies, saying they are consistent with WTO rules.

The chief aim of China's export policies is to protect the environment and conserve natural resources, said an official with the Ministry of Commerce in June.

China has been keeping communication and contact with the U.S. and the EU over China's policy on raw material exports, the official said, adding that China will properly deal with the consultation request in accordance with WTO dispute settlement procedures.

According to the procedures, China, the U.S., the EU and Mexico have 60 days to try to resolve their dispute through consultations. If consultations fail, the U.S., the EU and Mexico could ask for a WTO panel to investigate and rule on this dispute.

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