WTO Rules against Chinese Silicon Export Tariff

The World Trade Organization ruled January 30 that China unfairly restricted exports of several raw materials including silicon metal, requiring China immediately lower related export tariffs and remove relevant export quotas to serve responsibility as a WTO member.

The US, EU and Mexico previously claimed China has been putting domestic manufacturers on unfairly favorable positions with higher raw materials export prices through more tariffs, export quotas and tight control over export licenses.
 

The response from China’s Ministry of Commerce was that, to protect environment and exhaustible resources, China has been during recent years strengthening and continually improving management of resources consuming products, especially those highly polluting, energy and resources consuming products. The ministry said further that WTO rules not only emphasize on free trade but also allow use of necessary measures to protect environment and resources.

If the Chinese government gradually lowers or even remove the 15% silicon metal export tariff, the country’s silicon metal export will expand further, which will in turn inhibit smuggling and protect benefits of trading businesses and silicon metal producers. However, it will also hamper resources protection, energy-saving and emission reduction. If China chooses to keep present export tariff, other countermeasures are expected to be taken.

Supplementary information:
In May 2005, China cancelled its 13% silicon metal export rebate.
In January 2008, China set 10% silicon metal export tariff.
In December 2008, China lifted silicon metal export tariff to 15%.
In January 2011, China kept silicon metal export tariff at 15%.