The USA has launched a trade enforcement action against China at the World Trade Organisation (WTO) concerning China’s imposition of export duties on several raw materials. An EU intervention on this WTO challenge has been welcomed by the European Steel Association (EUROFER).
When China joined the WTO in 2001, it agreed to eliminate export restraints on the raw materials concerned, but has failed to meet its commitments in this regard, EUROFER claims.
The raw materials concerned are antimony, cobalt, copper, chromium, graphite, indium, lead, magnesia, talcum, tantalum, and tin. Tin and cobalt in particular are important inputs in some steel production. China’s export duties provide an unfair competitive advantage to that country’s producers at the expense of free and fair international competition.
“We cannot sit on our hands seeing our producers and consumers being hit by unfair trading practices. The past two WTO rulings on Chinese export restrictions have been crystal clear – these measures are against international trade rules. As we do not see China advancing to remove them all, we must take legal action,” said EU Trade Commissioner Cecilia Malmström.
Axel Eggert, director general of EUROFER, said that Chinese export duties and export quotas have had a massive distortionary impact on both US and EU manufacturers. "These industry players rely on access to the strategic resources in order to compete globally," he said.
According to Mr Eggert, it is incumbent upon US and EU policy makers to do what they legally can to prevent international competitors from taking advantage of the world trade system. "The EU and US move is thus both welcome and significant”, he added.
“China's lack of progress on its WTO commitments and its recalcitrance in implementing the necessary reforms is yet more evidence that the country has a long way to go until it can be granted Market Economy Status,” Eggert concluded.