China Says Its Limits on Raw-Material Exports Meet WTO Rules

BEIJING, June 24 -- China's government said that its limits on exports of raw materials such as magnesium, coke and zinc are in line with World Trade Organization rules, rejecting complaints from the European Union and the U.S.

    "China believes the relevant policy is in accordance with WTO rules," the Ministry of Commerce said in a faxed statement today. "The main purpose of China's export policy is to protect the environment and natural resources."

    In their third joint complaint against the Asian nation, the world's two largest economies argued that China is unfairly using export taxes to keep material costs lower for domestic steel and manufacturing companies, hurting foreign competitors.

    "China's policies on these raw materials put a giant thumb on the scale in favor of Chinese producers," U.S. Trade Representative Ron Kirktold reporters in Washington yesterday. "It's our job to make sure we remove that thumb."

    China is the largest source of U.S. imports, and the Asian nation is the EU's second-largest trading partner. The case is the first WTO complaint brought by the Obama administration, which came to office this year vowing to take a harder line against trade barriers, especially in China.

    China will "properly resolve the negotiation request based on WTO dispute resolution procedures," the commerce ministry said in the statement.

    The global recession is increasing calls by industries worldwide for protection, and Chinese officials have already complained about Buy American rules imposed on government spending by Congress, and moves to restrict U.S. imports of Chinese tires and steel pipes.

    The complaint, filed in Geneva yesterday, accuses China of using taxes or quotas to discourage the export of certain metals or chemicals. The materials listed in the complaint are bauxite, coke, yellow phosphorous, magnesium, silicon metal and zinc. China is either a major supplier or the only source of those materials, according to the EU.

    (Source: Bloomberg)