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US - WTO Ruling Will Enforce Ban on Chinese Export Taxes

A World Trade Organization (WTO) appellate body has upheld a ban on Chinese export duties for certain raw materials, including a variety of resources used in the metalcasting process.

The raw materials subject to the export restraints are various forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc. China is a leading producer of each of the raw materials.

The ruling is in response to a complaint regarding China’s export practices initially lodged almost three years ago. During the summer of 2009, the U.S. and several other countries argued the use of export restraints by China creates scarcity and causes higher raw materials prices in global markets. The complainants said the restraints also provide Chinese domestic industry with an advantage by way of a sufficient supply and lower and more stable prices.

According to a summary report of its decision, WTO sided with the complainant countries and China must bring its export duty and export quota measures into conformity with its obligations to the organization.

“Upon its accession to the WTO, China undertook to eliminate all export duties, except for a number of products listed in an Annex to its Protocol of Accession,” WTO said in its report. “In this protocol, China also committed not to apply export quotas (restrictions on the amount that can be exported).”

Conflicting reports have been released in the wake of the ruling regarding the effect the decision will have on other Chinese export materials, such as rare earth elements.

Sourced from Steeguru.com

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