WASHINGTON—The Obama administration on Wednesday requested that the World Trade Organization establish a dispute settlement panel to address export restraints on raw materials from China that the U.S. claims gives Chinese industries an unfair advantage.

This story first appeared in the November 5, 2009 issue of WWD. Subscribe Today.

The administration charges the Chinese restraints include putting caps on the volume of raw materials that can be exported out of China, imposing duties on exports of raw goods and enforcing administrative procedures such as export licensing and price requirements for certain categories.

The U.S. and the European Commission requested formal consultations over the matter in June. Mexico filed a similar request in August. All three countries are party to the request for the WTO settlement panel, according to the U.S. Trade Representative’s Office.

The materials covered by the complaint include bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc. Most of the materials are used to manufacture steel, aluminum and chemical products. Downstream products that use the materials include textile laminates, cosmetics, flame retardants and fiber products.

“Working together with the European Union and Mexico, we tried to resolve this issue through consultations, but did not succeed,” said a USTR spokeswoman. “At this point, therefore, we need to move forward with the next step in the WTO dispute settlement process.”

The raw materials case was the first filed by the Obama administration when it was submitted to the WTO in June. Since then, the U.S. and China have sniped at one another, informally and through official channels, over everything from alleged provincial subsidies for the Chinese textile industry to steep tariffs on imported Chinese tires imposed by the White House in September.

The WTO will consider the panel request at a meeting on Nov. 19.

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