EU And US Prepare Raw Materials WTO Complaint Against China

by Ulrika Lomas, Tax-News.com, Brussels

16 June 2009

The European Union and the US are preparing to make a formal complaint to the World Trade Organisation over Chinese export tariffs and quotas in respect of up to 20 categories of raw material - mainly metals and chemicals. In recent months, the EU has filed anti-dumping complaints against China over products ranging from footwear to steel fasteners.

Materials included in the complaint are likely to be yellow phosphorous, antimony, bauxite, coke, fluorspar, indium, magnesium carbonate, molybdenum, rare earths, silicon, talc, tin, tungsten and zinc. The EU has been complaining directly to China for almost two years over the export tariffs and the chemical sector is especially upset with a 120% export tariff on yellow phosphorous. Phosphorus is crucial for the chemical industry and is used in many products including fire extinguishers and detergents. China had agreed to reduce export taxes and quotas on raw materials when it joined the WTO in 2001.

In 2008, the European Commission in Brussels issued a warning that shortages of some minerals were threatening the competitiveness of European industry and suggested "reinforcing the dialogue" with China and Russia, which was taken to mean WTO action.

Consultative talks are expected to be held on June 22, and in the absence of progress, the request for a WTO panel to hear the complaint should follow soon after.

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