WTO Ruling: China Restricted Mineral Exports to its Advantage
The World Trade Organisation (WTO) said on Monday that China violated global trade regulations when it restricted the shipments of nine materials that were crucial in the production activities of steel, aluminium and chemical industries in a number of nations.
The latest ruling upheld the WTO's earlier decision in July 2010, which found that China had deliberately manipulated the export of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorous and zinc.
According to Agence France Presse (AFP), the materials were being used for producing medicines, fridges and beverage cans - industries that have heavy presence in the United States, Mexico and the European Union.
The three entities filed the case against China, which last year gained the position as the world's second biggest economy.
According to the latest WTO ruling, China had jacked up the export prices of the nine materials and required international buyers to abide by its export duties, shipment caps and licensing requirements.
Those measures, the WTO said, have been found to favour China's own industries.
As member of the international trade body, the WTO told China that with the new ruling, the country "bring its export duty and export quota measures into conformity with its WTO obligations."
In a statement, China's WTO mission in Geneva called the new development as deeply regrettable but assured that it will abide by the ruling and "apply reasonable policies to administer products."
The Chinese mission reiterated that Beijing's trade policies were chiefly to protect the country's interest and in the case of the nine materials, to protect the environment.
"China takes the view that the WTO rules ... allow a member to take necessary means to realise its policy objectives such as protection of the exhaustible resources and the environment," AFP reported the Chinese mission as saying.
The United States hailed the WTO decision as "a tremendous victory for the United States, particularly its manufacturers and workers."
"Today's decision ensures that core manufacturing industries in this country can get the materials they need to produce and compete on a level playing field," U.S. Trade Representative Ron Kirk said on Monday.
Also, the European Union called the WTO ruling as the success of international efforts that will provide EU industries materials they need to compete in equal terms.
"It sends a clear signal that such measures cannot be used as a protectionist tool to boost domestic industry at the expense of foreign competition," EU trade commissioner Karel De Gucht said in a statement.