China Unfairly Limits Export of Raw Materials, WTO Affirms

Article excerpt

The World Trade Organization has affirmed that China unfairly limited exports of nine raw materials to protect domestic manufacturers.

A WTO appeals body largely sided with the United States, European Union and Mexico in a dispute over Chinese materials used widely in the steel, aluminum and chemical industries.

The complainants allege China drives up prices for raw materials by setting export duties and quotas on them.

The ruling Monday affects exports of certain forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorous and zinc, the Associated Press reported.

Manganese, for example, is an essential component of steelmaking. The United States produces none.

China, which had argued its export limits protect the environment, must now "bring its export duty and export quota measures into conformity with its WTO obligations," the organization ruled.

Though not covered by this decision, the Tribune-Review has reported how China has also come under criticism for its limitations on exports of rare earth elements that are critical to the manufacture of magnets used in computers and cell phones, hybrid cars and smart missiles. The Chinese control some 97 percent of the world`s rare earth materials and critics contend it is withholding the materials to drive up prices or obtain access to important technology in return.

Washington has filed six WTO cases since President Barack Obama took office in January 2009, five of them against China. Former President George W. Bush brought seven cases against China in his two terms, though China was not yet a member of the WTO for most of his first year in office.

The U.S. trade deficit with China is expected to have hit a record of about $300 billion in 2011. Obama has set a target of doubling total U.S. exports between 2010 and 2015.

U.S. trade officials say their main complaints against China are barriers to its agricultural and services markets, discriminatory industrial policies and weak intellectual property rights protection.

China has complained about anti-dumping duties applied to its exports to the United States and about restrictions on Chinese companies seeking to invest in U. …