LEAD: WTO upholds ruling against China in raw materials dispute

Jan 30, 2012, 17:39 GMT

Geneva - China lost a dispute over its export restrictions on key raw materials at the World Trade Organization (WTO) on Monday, as the body upheld a ruling that could give other countries greater access to rare commodities.

China appealed last year's ruling by a WTO panel that had decided in favour of the European Union, the United States and Mexico, who complained that Beijing's restrictions on exports of materials such as magnesium, silicon metal and zinc were driving up prices and giving an advantage to Chinese producers.

'The Appellate Body upheld the panel's recommendation that China bring its export duty and export quota measures into conformity with its WTO obligations,' the organization said.

Some of the disputed raw materials can be found only in China and are essential for the automotive, electronics and pharmaceutical sectors, among others.

'Today's report is a tremendous victory for the United States - particularly its manufacturers and workers,' US Trade Representative Ron Kirk said.

EU Trade Commissioner Karel De Gucht said: 'This final ruling is a great success in our efforts to ensure fair access to the much-needed raw materials for EU industry.'

China said it 'respects the rulings of the WTO, and will apply reasonable policies to administer resource products in accordance with the WTO rules, so as to realize sustainable development.'

It had argued that the measures, including quotas and duties, were implemented to protect the environment, the health of its people, and the limited supplies of its natural resources.

At issue are not only commodity prices, but also jobs. China's restrictions put pressure on foreign manufacturers to move production to China, according to the US administration.

Several countries, including Brazil, India, Japan, Saudi Arabia and Turkey, had joined the three-party complaint.

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