The European Union and the US on Tuesday launched WTO action against China, accusing it of restricting raw materials exports to feed its domestic market, the EU commission announced.

In Washington, US trade representative Ron Kirk accused China of pursuing a “troubling” industrial policy. The two Western powers requested for World Trade Organisation (WTO) dispute settlement consultations with China regarding Beijing’s export restraints on numerous important raw materials.

“China’s measures appear to be part of a troubling industrial policy aimed at providing substantial competitive advantages for the Chinese industries using these inputs,” Kirk told reporters in Washington.

European industries have raised concerns for a number of years on such export restrictions — quotas, export duties and minimum export prices — which China applies on key raw materials, including yellow phosphorous, bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide and zinc. Some of these resources cannot be found elsewhere, said the European Commission, the EU’s executive arm.

“The EU has today requested WTO consultations with China regarding China’s export restrictions on a number of key raw materials, which it considers are in clear breach of international trade rules,” the commission said in a statement. “The EU has raised the issue with China repeatedly over the past years without success.”

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

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