mandelson prepares to fight chinese export taxes alongside usa
29 September 2008

Peter Mandelson, the European Trade Commissioner, will give warning today that China's actions mean that the world economy is under threat from a new wave of quotas and taxes on trade in vital commodities. In a speech to industry leaders in Brussels, Mr Mandelson is expected to say that Europe will take legal action to enforce the commitments over export taxes made by China on its accession to the World Trade Organisation (WTO).

According to Mr Mandelson, export taxes “drive up world prices and cut off supplies of raw materials. Beggar-thy-neighbour export restrictions invite a cycle of retaliation that is as economically counter-productive as it is politically hard to resist.” Through the WTO, the United States is preparing a legal challenge to Chinese taxes and restriction on exports of raw materials used in the steel industry, notably coking coal.

Mr Mandelson will hint that the European Union is likely to support the Americans: “I certainly cannot rule out that the EU would use the WTO in the same way to enforce Chinese commitments. Countries that use export duties to subsidise domestic industries and subsequently dump products on European markets must also expect to attract the scrutiny of our trade defence system.”

Carl Mortished, http://business.timesonline.co.uk