EU, US 'preparing WTO action against China'

(BRUSSELS) - The European Union and the United States are preparing to launch joint WTO action against China over Chinese restrictions on exporting raw materials, an EU source said on Thursday.

"The European Union is currently getting something ready with the United States," the source said on condition of anonymity.

Brussels and Washington aimed to formally seek consultations on June 22, the first step in opening a case before the World Trade Organisation.

The source said the move concerned about 20 raw materials that resource-hungry China was restricting its companies from exporting in breach of its commitments when it joined the WTO in 2001.

The materials include tungsten, copper, bauxite, antimony, yellow phosporous, magnesium carbonate, molybdenum, rare earths and indium.

"These are products that are on the Chinese market where there are export restrictions in the form of quotas and tariffs," the source said.

Last week, US Trade Representative Ron Kirk said Washington wanted to move more aggressively to resolve trade frictions with China, warning that it would not hesitate to drag the Asian giant to the WTO.

While the EU and China are major trade partners, tensions have also been on the rise, especially with Europe opening a growing number of anti-dumping cases against Chinese industries ranging from candle-makers to screws and bolts.