The WTO has ruled in favour of EU regarding that a series of export restrictions such as quotas, requirements for special permits and imposed minimum export prices are contrary to WTO rules. China must therefore remove all unjustified restrictive measures on raw materials. And this is good news, according to DI Director of International Market Policy, Peter Thagesen.
Victory for a freer market
- The verdict is a victory for a freer market for raw materials. China is both a major manufacturer and consumer of raw materials and therefore it is important and a significant step that their practice up till now has been made illegal, says Peter Thagesen.
The deficiency of raw materials threatens growth and employment
He points out that EU is one of the largest importers of the specific raw materials that are directly specified in this WTO-case.
- Without these raw materials the EU countries are potentially facing cut-offs in supply or higher prices and this threatens both economic growth and employment, states the DI Director of International Market Policy.
An important principled verdict
The global demand for industrial raw materials has been on the rise due to high growth and urbanization in growth countries and because of industrial technological changes such as clean technology, electric vehicles, electronics and development in optics. Chinese restrictions on trade in raw materials have furthermore distorted trade on global markets which is detrimental to industrial customers.
- This shows how essential it is that we through WTO are able to pressure China to change practice. And it is for this reason that the verdict is so important for Danish companies. A concrete problem is solved and simultaneously other countries are warned against imposing restrictions, Peter Thagesen points out.