China's export restrictions on raw materials illegal: WTO

GENEVA: The World Trade Organisation ruled Tuesday that China's export restrictions on raw materials are illegal, upholding complaints by the United States, the European Union and Mexico against the Asian giant.

"The panel, therefore, recommends that the Dispute Settlement Body requests China to bring its measures into conformity with its WTO obligations," the ruling said. The complainants had taken issue with export quotas and duties imposed by Beijing on raw materials including bauxite, coking coal, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc.

All are key inputs for numerous products in the steel, aluminium and chemical sectors. China is a leading producer of these raw materials and restrictions quickly led to protests.

The complainants also pointed out that in its accession to the WTO; China had agreed to remove all export duties except for a few products but even for these limited products, Beijing had committed to not apply any export quotas.

Arbitrators backed these points, saying that China failed to keep to its accession commitments in imposing quotas and duties. The WTO ruling comes amid an international uproar over China's moves to tighten its grip over rare earths, highly coveted minerals used in high-tech products.

China has cited environmental concerns and domestic demand for slashing its exports, leading to sky-high prices.

Copyright AFP (Agence France-Presse), 2010