EU sets new deadline in coke row with China

The European Commission said Monday it hoped to resolve a dispute with China over cooking coal by the end of this week, but warned it will otherwise take the case to the World Trade Organisation.
A spokeswoman for EU Trade Commissioner Pascal Lamy, who had already extended an initial deadline to strike a deal earlier this month, said talks were continuing with Chinese authorities.
"We have agreed ... that we should be able to find a solution by Friday 28th May," spokeswoman Arancha Gonzalez told reporters, adding that both the European Union and Beijing hope to meet this target.
But she warned: "If this is not the case we both know there is no other alternative than to take the case to the WTO."
The 25-nation EU says Beijing has broken trade law by restricting exports of coke, a key raw material for steel-makers, thereby reducing global supplies and forcing up world prices to dizzying heights.
If the EU does seek WTO intervention in the case it would mark the bloc's first legal action against China since the country joined the Geneva-based body in 2001. In a first step, the bloc would demand the WTO set up a dispute panel to rule on whether the EU has the right to impose retaliatory trade measures.
China began capping coal export quotas this year to preserve supplies for its booming steel and power industries, mainly hitting exports to Europe and Japan.
China's cooking coal industry has warned that the removal of export quotas would be "disastrous" for Chinese producers.
Abandoning the export quotas would cause a sharp fall in prices and trigger a price war among local coke makers, the Xinhua news agency said, citing the Chamber of Commerce of Metals, Mineral and Chemicals Importers and Exporters. China's government has cut the 2004 coke export quota to nine million tons from 12 million tons last year but the European Union has asked China to remove the quotas completely.
According to Chinese press reports Monday, Beijing has scrapped tax rebates for coke exports and suspended approvals for new coke plants amid concerns over excessive investment in the industry.