Tag Archives: duties

Trouble over Raw Materials Supply from China

The association of German industry BDI has warned that:

“Global, European and national restrictions to commodities are threatening the growth of German industry, which is vital to overcoming the current crisis.”

“We are steering towards a raw materials gap,” said Ulrich Grillo, chairman of the BDI commodities group and chief executive of German zinc producer Grillo-Werke.

BDI complains that China alone has restricted trade with raw materials and semi-finished products with some 373 export duties.

This complaint comes when there’s news about a draft report by China’s Ministry of Industry and Information Technology. The report has called for a total ban on foreign shipments of some rare metals, while introducing export quotas for other rare elements far bellow global needs.

EU, US Take China to WTO over Raw Materials

Both the European Union and the US have requested consultations with China in WTO over export restrictions for raw materials.

According to Catherine Ashton, EU Trade Commissioner: “the Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn. I hope that we can find an amicable solution to this issue through the consultation process.”

Raw materials in question include yellow phosphorous, bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide and zinc.

China says that the restrictions are meant to protect the environment and comply with Chinese trade commitments.

To put this in perspective, read the excellent article by Martin Stürmer: “The International Raw Materials Boom. A Challenge for Multilateral Trade Policy”. The author pays specific attention to the implications of raw materials competition, which caused many wars in the last two centuries, and prompted the beginning of the European integration process. Stürmer thinks that the multilateral world trade system is barely adequate to meet the new challenges arising from increasing raw materials consumption. The author advocates for a recognition of the development policy interests of many producer states.