By Lewis Crofts - 9th May 2004
Brussels has given Beijing until Friday to sort out its exports of coke – vital for steel makers – or face action in the international trade courts.
Despite Sino-EU talks last week, Brussels is unhappy with China limiting exports of the vital raw material and has given diplomats an ultimatum.
The argument centres on the astronomic prices charged by Beijing for licences needed by firms wanting to export.
“The prices of licences have gone up, making the price of coke go up,” said an EU official.
The price of coke on the world market has gone up five-fold since the beginning of the year.
China also runs a system of quotas and despite being “willing to increase quotas from 1.5 million tonnes to 2.5 million”, this is not enough for Europe’s manufacturers.
“They must address the export restriction and need to remove export licences,” continued the official.
“We don’t see on what grounds they can maintain their restriction.”
“China can’t justify its export restrictions on WTO grounds.”
Chinese exports account for about 30 per cent of European consumption.
Beijing claims that it needs more and more coke for its booming domestic industries.
Europe has so far steered clear of action against China, preferring a brand of “quieter diplomacy” not adopted by the US which has already opened a dispute with China.
But with Beijing releasing only ten per cent of its coke production onto the international market, Europe feels it is being crippled.
“The actual supply falls short of what we need now,” said a Brussels trade diplomat.
“We just want the supply we were getting last year.”
If Beijing does not comply with the EU’s wishes then Brussels will initiate a dispute proceeding at the World Trade Organisation in Geneva.
This will trigger a couple of months of bilateral negotiations which may lead to an investigative panel to rule on the legality of the restrictions.
Have your say...
Please enter your comments below.