The World Trade Organization ruled Tuesday that China was unfairly protecting its domestic manufacturers by limiting the export of nine raw materials that are used widely in the steel, aluminum and chemical industries.

We wrote about this

and originally here:

Today, the WTO panel  ruled for the United States, European Union and Mexico,  all of whom had filed complaints against China  using export duties and quotas to drive up the prices they pay for raw materials such as coke, bauxite and zinc.

The panel rejected China’s argument that its export limits were needed to “protect its environment,” and said those export restrictions should be removed.

The WTO panel concluded that “China’s export duties were inconsistent with the commitments that China had agreed to” when it joined the trade organization in 2001.

This is an important development for our industry which uses vast quantities of raw materials  such as steel aluminum, and brass.

But it is also an important bellwether for the Chinese export restrictions of rare earth metals.

Round 2 coming up…

Photo credit

(compiled from press reports and Michelle Applebaum Commentary.)

The World Trade Organization has agreed to investigate whether China’s export duties on nine commodities that are used as raw materials for various basic industries ( including aluminum and steel) provide a trade-distorting competitive advantage to Chinese producers.
Resource hoarding protects high cost low efficiency producers.
The investigation was prompted by complaints from the US, the EU, and Mexico that Chinese export restrictions were discriminatory and violated WTO rules. The Chinese government defended the tariffs saying they are intended to inhibit overproduction and emissions as well as conserve scarce natural resources.
Read Steel Industry Analyst  Michelle  Applebaum’s  update on this hoarding dispute here.
Our original post  from November 4, 2009, explaining this dispute can be found here.