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.”

Last week, China defended its moves to restrict exports of some raw materials, saying it was acting to protect the environment. “Taxing exports of some high energy-consuming and pollutant goods is to improve the world’s trade environment and China’s export structure, and to further enhance environmental protection measures,” Chinese commerce ministry spokesman Yao Jian had said.

In its accession to the WTO, China agreed to restrict the number of products subject to export tariffs, the EU Commission said. “These restrictions appear to be in violation not only of general WTO rules, but also of specific commitments that China signed up to as part of the WTO Accession Protocol,” it added.