China accused over unfair trade

The US and European Union (EU) have filed complaints that China is unfairly limiting its raw material exports.

In the trade cases filed with the World Trade Organization (WTO) the US and EU said China was giving its domestic industry access to cheap materials.

China said it was meeting its WTO obligations and would contest the case.

The case may be the first of many between the world’s largest nations as countries have sought to protect their industries amid the global recession.

The cases concern the export of materials such as coke used to make steel, for which it is one of the largest producers, as well as bauxite and magnesium.

Consultation period

“The United States believes that China is unfairly restricting exports of raw materials,” US Trade Representative Ron Kirk said.

“These actions are hurting American steel, aluminium and chemical manufacturers, among other industries, that desperately need these material to make their products.”

Mr Kirk said the US had decided to pursue a WTO case after two years of talks between the Chinese and the previous administration of former President George W Bush had failed to reach a resolution.

China responded that its goal was to “protect the environment and natural resources, and the Chinese side considers the relevant policy to be compliant with WTO regulations”.

China has also responded by launching a complaint over a US ban on the imports of Chinese poultry, which has been in place since the bird flu scare in 2004.

The US and EU complaints now trigger a 60-day consultation period. If the dispute is still not resolved, they can formally request a hearing panel, which could hear the case for up to a year.

If they win, the US and EU would then be given the go-ahead by the WTO to impose economic sanctions on China. –BBC News