TWN Info Service on WTO and Trade Issues (Dec09/16)
29 December 2009
Third World Network

Dispute panel set on Chinese export measures
Published in SUNS #6840 dated 22 December 2009

Geneva, 21 Dec (Kanaga Raja) -- The WTO Dispute Settlement Body (DSB) on Monday agreed to establish a single panel to rule on measures imposed by China related to the exportation of various raw materials.

Three panel requests were made in respect of this dispute, namely, from  the United States, the European Communities and Mexico.

This was a second-time request and panel establishment was automatic.  Argentina, Colombia, Korea, Canada, Brazil, Ecuador, Japan, Turkey, IndiaChileNorway and Chinese Taipei reserved their third-party rights to the  dispute; so did the US, Mexico, and the European Union in the disputes  raised by the other two.

The dispute is with respect to China's restraints on the exportation from China of various forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, and zinc (referred to as the "materials" in the compliant).

The complaints argued that China subjects the exportation of bauxite,  coke, fluorspar, silicon carbide, and zinc to quantitative restrictions  such as quotas. They also said that China subjects the materials to export  duties. In addition to the export quotas and export duties, China imposes  other restraints on the exportation of the materials, administers its  measures in a manner that is not uniform, impartial, and reasonable,  imposes excessive fees and formalities on exportation, and does not  publish certain measures pertaining to requirements, restrictions, or  prohibitions on exports, said the complainants.

In a statement at the DSB, the US reiterated that it is concerned about  Chinese measures that restrain the exportation of certain raw materials  that are critical to US manufacturing industries. These restraints not  only limit the availability of these raw materials, but also increase the  cost of these raw materials to the US and other producers outside of  China, while providing an artificial cost advantage to downstream  industries within China.

The European Union said that the Chinese export restraints on raw  materials are by no means a recent phenomenon. The restraints were a  problem at the time of China's accession to the WTO and they remain so  today. In expressing disappointment at the requests for panel establishment, China said that such action is not conducive to the  solution of this matter. It voiced certain concerns with the way in which  the three complainants have framed their panel requests. It said that it  will seek a preliminary ruling on the consistency of the requests with  Article 6.2 of the DSU.

In other actions, under the surveillance agenda item in relation to the regime for the importation, sale and distribution of bananas, second recourse to Article 21.5 of the DSU by Ecuador, the European Union in its status report said that it was glad to report that it has reached a historical agreement with Latin American banana suppliers last week.

It said that these agreements provide for final settlement of all current  disputes regarding the EU import  regime for bananas upon certification of  a new EU tariff schedule on bananas. It added that it has now started  internal procedures for the authorization of the signature and provisional  application of the agreement, pending the conclusion of ratification  procedures.

The Chair of the DSB said that this item will be kept on the agenda and will be dealt with at the next meeting of the DSB.

Meanwhile, under other business, Brazil informed the DSB that, on the  basis of complete data related to fiscal year 2008 and calendar year 2008,  obtained from the United States and other sources indicated by the  Arbitrator, the total amount of counter-measures authorized to Brazil would be $829.3 million. On the basis of the same period, the threshold above which Brazil is entitled to take counter-measures in other sectors  and agreements outside trade in goods would be $561 million.  +