WTO Says Chinese Restrictions on Raw Materials Break Rules

Under World Trade Organization rules, countries engaged in global trade can’t suddenly turn protectionist. The WTO agreed with a 2009 complaint from the US, Mexico and Europe that ”Chinese quotas, export duties and license requirements put in place a discriminatory system for the sale overseas of industrial raw materials widely used in the steel, aluminum and chemicals industries,” reports Stephen Castle for the New York Times. The WTO rejected the argument that “restrictions were motivated by a desire to protect the environment and prevent a critical shortage of the materials.” Supply disruptions raise prices. The nine raw materials – magnesium, manganese, yellow phosphorous, coke, zinc, fluorspar, silicon carbide, silicon metal and bauxite are used for making autos, electronics, medicines and appliances. The case reveals the globe’s dependence on Chinese exports. Trade officials anticipate the ruling predicts how the WTO could decide about China’s 2010 decision to reduce supply of rare earth materials. – Yale Global