Brussels, 24/06/2009 (Agence Europe) - In response to the European Union's demand made on Tuesday 23 June for WTO consultations with China regarding China's export restrictions on a number of key raw materials, China again justified its position using the ecological argument. In a press release from the Chinese department of trade, the country stressed that “this export policy aims, above all, to protect the environment and preserve natural resources. China believes that this policy complies with WTO rules”. China also promises to tackle requests for consultation according to dispute settlement procedure at the WTO. Earlier this month, the same department defended its restrictions under the guise of environmental protection, explaining that “taxing exports of polluting and energy-hungry goods aims to improve the environment through world trade…There is no perfect trade policy: we cannot at the same time take comprehensive environmental measures and request that prices are not affected”.
On Tuesday, the EU and US separately began action against China at the WTO, action which initially includes consultations of a maximum of 60 days with Beijing at the end of which a special group in charge of examining the complaint will be set up if consultations do not achieve anything. Brussels and Washington are targeting restrictive measures adopted by Beijing involving key raw materials, such as yellow phosphorous, bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide and zinc used by the steel, aluminium and chemicals industry. Europeans and Americans have raised concerns about export restrictions - quotas, export duties and minimum export prices, which raise currency levels and distort competition, allowing Chinese companies to benefit from cheaper prices than their competitors. EU Trade Commissioner Catherine Ashton 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”. She explained that these restrictions not only breach WTO rules but also commitments made by China during its WTO accession.
Ms Ashton, nonetheless, is hoping for an “amicable solution”. She criticised the lack of change in Chinese policy in this dossier, despite the repeated appeals from the US government (Ed: and from the European Commission) over the past years. Her US counterpart, Ron Kirk, is also hoping for successful consultations so that lengthy proceedings at the WTO can be avoided. The trade representative did, nevertheless, have some strong words with regard to China, accusing the country of plasticising national preference towards its raw materials for industry: “We are deeply troubled at what appears to be a conscious policy to create unfair advantages for Chinese industry” by making raw materials less expensive for Chinese companies that buy them and finished products less expensive for those that produce them. In WTO rules, such distortion in fair international trade is simply not authorised. In the press release, Kirk insisted that this is not allowed in business and is certainly not appropriate to support the industrial policy of a country: “Now, more than ever we must fight against this kind of domestic favouritism”. (E.H./transl.rh)