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China disputes US, EU export charge

CHINA'S export policies are in compliance with World Trade Organization rules, the Ministry of Commerce said yesterday in response to a complaint by the United States and the European Union that the country is restricting overseas sales of raw materials.

"The export restrictions on some industrial materials aim to protect the environment and natural resources. They are in accordance with WTO rules," Xinhua news agency quoted the ministry as saying.

China said it will participate in a consultation process required under WTO rules.

According to the organization's dispute settlement mechanism, China, the US and the EU will have a 60-day period to consult. If no solution results, the plaintiffs can move to establish a WTO panel for a formal ruling.

The US and EU filed their WTO complaint against China on Tuesday, saying the country should reduce its export tariffs and raise quotas on key materials, including bauxite, coke, magnesium, manganese, silicon carbide, silicon metal, zinc and yellow phosphorus.

The materials are used in the production of steel, cars, microchips, planes and other products.

The US and EU said China's export restrictions keep material costs lower for domestic manufacturers and create unfair advantages for them, hurting foreign competitors.

US Trade Representative Ron Kirk said China has been urged to lift the restrictions for two years without result.

"China's policies on these raw materials put a giant thumb on the scale in favor of Chinese producers," Kirk complained on Tuesday.

Some industry experts said yesterday the charges from Washington and Brussels are unreasonable.

"It is groundless to ask China to reduce tariffs or raise quotas as the WTO rules say only that countries can't restrict imports," said Zhou Shijian of the World Trade Organization Studies.

"The rules do not apply to exports, and nobody can ask others to sell natural resources at low prices," Zhou said.

Zhao Jinping, an expert with the State Council, told Xinhua, "Export restrictions on these materials are in accordance with China's aim to establish an environmentally friendly and energy-saving society."

He said Western countries should not complain about China's export policies while asking China to reduce emissions and save energy.

China has tried to increase overseas sales of some chemicals. The country announced on Monday that it will reduce the export tax on nearly 100 categories types of goods, including yellow phosphorous.

Xue Jun, a trade analyst at Changjiang Securities Co, said such disputes may further batter the already vulnerable global trade sector.

"Countries should be very careful to take actions like this as world trade could deteriorate due to the tension," Xue said.

The World Bank estimated that global trade volume will plunge 9.7 percent this year.

China's exports fell 26.4 percent in May from a year earlier to US$88.8 billion, the biggest drop in at least 14 years.

The country's trade volume fell 25.9 percent on an annual basis last month.


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