The European Union has followed the US lead in initiating World Trade Organization dispute proceedings against China over export duties on a slew of raw materials.
The EU said China is violating WTO rules with restrictions on exports of key materials such as graphite, cobalt, chromium and magnesia which help Chinese industry at the expense of European companies and consumers.
“We can not sit on our hands seeing our producers and consumers being hit by unfair trading practices”, EU Trade Commissioner Cecilia Malmstroem said on Tuesday in Brussels. The EU’s executive took legal action in 2012 and 2014 over similar issues. Should both sides fail to reach an agreement within 60 days, the commission could ask the WTO to set up a panel to rule on the legality of the Chinese export restrictions. In a July 19 announcement, the WTO said the European Union “claims China imposes export duties on certain raw materials (various forms of antimony, chromium, cobalt, copper, graphite, lead, magnesia, talc, tantalum and tin)”.
U.S. Trade Representative Michael Froman has said China’s duties imposed higher costs on U.S. manufacturers of the materials, used in aerospace, autos, electronics and chemicals, while Chinese competitors did not have to pay the costs, encouraging companies to locate production in China.
Formal consultations between the two sides at the WTO will be conducted in parallel to a similar procedure initiated by the US, the European Commission, the EU’s executive arm, said in a statement.