Mandelson Laments Global Boom In Export Taxes On Raw Materials

by Ulrika Lomas, Tax-News.com, Brussels

29 September 2008

EU Trade Commissioner Peter Mandelson has said that European trade policy will take a tougher line in tackling an explosion of export duties and other restrictions on raw materials among the EU's trading partners.

Speaking to representatives of European industry and member states in Brussels, Mandelson said that recent rises in commodity prices had also produced a proliferation of dozens of new export taxes and other restrictions on raw material exports in the global economy. He said that ensuring access for European manufacturers to the raw materials on which they are critically dependent would now be a key priority of EU trade policy.

Mandelson said that sixty years of progressive openness in import markets for goods was being eroded by a boom in export duties for raw materials.

The European Commission now counts at least 450 export restrictions on raw materials in the global economy. They cover products including metals, wood, leather, ceramics, chemicals, textiles and skins. They exist in key markets for raw materials such as China, Russia, Ukraine, Brazil and Argentina. Europe imports between 70-80% of its primary resources.

Mandelson said that resource nationalism risked politicising and distorting trade in raw materials at precisely the time when sharply rising global demand required a fair, efficient and transparent market.

"The next phase of globalisation will be defined by pressure for access to basic resources… I believe one of the biggest challenges we face at the global level is managing that race to mutual benefit," the Trade Commissioner noted.

Mandelson said that the EU would aim to negotiate prohibitions on raw materials restrictions in all ongoing EU Free Trade Agreements and bilateral WTO accession agreements. The EU would also be willing to use the WTO litigation system to enforce commitments on export restrictions for raw materials made by China during its WTO accession.

He added that the EU would seek to build support globally for more open trade in raw materials, noting that proponents of export taxes have resisted any general restrictions at the WTO level on their use.

The EU plans to make open raw materials trade a priority of the EU's strategic High Level Mechanism process with China. However, Mandelson warned that the bloc would not hesitate to use trade defence measures such as anti-dumping duties on countries that used export restrictions to subsidise local producers and then dumped subsidised goods on European markets.

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