China's Restrictions on Commodities Violate Trade Rules: WTO

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The Appellate Body of the World Trade Organization (WTO) gave its final report in which it confirmed that the restrictions imposed by China on the export of various commodities are in violation of international trade rules within the WTO framework and are not justifiable as environmental measures or for the preservation of natural resources.

With the decision, the Asian country will be forced to eliminate or adjust its measures, otherwise it may face trade sanctions by these three countries. As a result, the Secretariat of Economy reiterated its commitment to vigorously fight any international trade practice that does not strictly adhere to international provisions and which affects or puts Mexican products and services at a disadvantage.

The controversy surrounds the various restrictions China imposes on the export of products (coke,  bauxite, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc) used in the production of steel, aluminum and some chemicals, through the application of tariffs, quotas and export permits, and a minimum price system.

Relevant Aspects of the Decision:

WTO recommendations have implications on measures which are replaced annually. China cannot justify the imposition of export tariffs as an environmental measure.

It rejects the interpretation issues that China has suggested in order to evade its obligations in the WTO.

It confirms that the tariffs and quotas which restrict the export of raw materials are in violation of the WTO.