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Obama Administration Files Trade Case Against China With The World Trade Organization

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U.S. files WTO case against China over exports

The Associated Press

Tuesday, June 23, 2009

WASHINGTON — The Obama administration has filed its first trade case against China with the World Trade Organization, accusing the Asian power of restricting exports of certain raw materials to give Chinese manufacturers “unfair advantages.â€

Trade Representative Ron Kirk says the U.S. is “deeply troubled at what appears to be a conscious policy to create unfair advantages for Chinese industries†by restricting exports of raw ingredients used in steel, aluminum and chemicals.

Mr. Kirk says “dialogue†was the preferred method to settle the dispute, but that China has not changed its policies despite the U.S. raising the issue repeatedly.

The European Union also requested formal WTO action with China on the issue.

Full article:

http://www.globeinvestor.com/servlet/story...to0623/GIStory/

Edited by MOP

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Meh.

Do you digging and research before jumping to conclusions...

China, US restart defense talks in Beijing

China and the United States resumed high-level defense talks today in Beijing, the first of its kind between the nations for 18 months, to seek ways to cooperate on various issues.

The delegations will exchange opinions on maritime disputes, Taiwan issues and nuclear disarmament at the 10th Defense Consultative Talks (DCT), a military source who attends the talks told China Daily.

The two-day sessions are attended by a US delegation led by Michele Flournoy, the undersecretary for policy with the US Department of Defense, and a Chinese delegation led by Lieutenant General Ma Xiaotian, deputy chief of the general staff of the People's Liberation Army.

"There are many areas for cooperation, despite disagreements," the source said yesterday on condition of anonymity. "Both sides have the same need for cooperation."

The source said issues at the two-day dialogue will likely include the Korean Peninsula, the Taiwan Straits and Afghanistan.

The talks are held at the headquarters of the PLA Central Military Commission, the Chinese army's top command.

The last DCT session was in Washington 18 months ago.

Military exchanges were frozen until February, after the Bush administration announced plans to sell $6.5 billion in arms to Taiwan.

Tao Wenzhao, an expert on US studies at the Chinese Academy of Social Sciences, said disagreements will persist in military ties, but: "The Obama administration has the tone of not letting disagreements affect the cooperation in common interests."

Chinese and US naval vessels have had several confrontations since early March. The latest incident saw a Chinese submarine damage an underwater sonar array towed by the US destroyer USS John S. McCain on June 11 in the South China Sea. Both sides played down the collision and said it may have been an "accident".

Experts said Sino-US disputes at sea tend to arise because of differing interpretations of the "freedoms of navigation and overflight in an exclusive economic zone (EEZ)". The US insists freedom of navigation includes its current activities in China's EEZ.

Neither China nor the US will likely compromise their positions on the maritime standoffs between Chinese naval vessels and US survey ships, said a Beijing-based researcher with the National Defense University.

"The Chinese military will stand firm on the disputes and be serious about bilateral cooperation," said the researcher, who asked not to be named.

An unnamed senior official from the US Department of Defense confirmed the sides will address the confrontations, but said cooperation with China is "on the upswing".

"The contacts and the dialogue that goes on in these visits will help transparency by clarifying intentions, clarifying world views, clarifying strategies," the official said.

"China hopes to make concerted efforts with the United States to ensure positive results from the talks," the Chinese Ministry of National Defense said in a statement yesterday.

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Iran becomes China’s biggest oil supplier

BEIJING : Iran overtake Saudi Arabia as the biggest supplier of crude oil to China in the month of May.

According to data revealed by the Chinese customs authorities, Iran shipped 3.088 million tons of crude oil in May.

Iran recorded a growth of 88 percent y-o-y in its crude oil shipments to China, while Saudi Arabia, the biggest crude oil supplier till date saw its exports falling by 15.5 percent from that a year ago to 2.76 million tons.

Analysts aver that this could be due to the increasing imports of heavy grade crude oil, which Saudi Arabia has not been able to supply due to the OEPC led cuts, while others attribute this as a one time affair which may not repeat itself.

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EU takes WTO action vs China on raw materials

BRUSSELS, June 23 (Reuters) - The European Union will take action with the United States at the World Trade Organisation over Chinese export restrictions on around 10 industrial raw materials, the European Commission said on Tuesday.

The Commission -- which oversees trade for the 27-nation bloc -- said it would formally seek consultations with Beijing at the global trade watchdog, confirming a Reuters story from earlier this month.

If these talks fail, the next step would be to request a WTO panel to hear the complaint, further damaging Washington's and Brussels' brittle economic and political relations with Beijing.

"The Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn," EU Trade Commissioner Catherine Ashton said in a statement.

"I hope that we can find an amicable solution to this issue through the consultation process," she said. The EU and the United States say China has continued to restrict exports of raw materials used in steel, microchips, planes and other products despite Beijing's pledge to eliminate export taxes and charges when it joined the WTO in 2001. The materials covered by the case include yellow phosphorous, bauxite, coke, fluorspar, magnesium rare earths, silicon and zinc.

RISING DISPUTES

Trade disputes between Brussels and Beijing are on the rise since the EU's trade deficit with China has ballooned. The EU has imposed a number of anti-dumping tariffs on imports of Chinese goods ranging from shoes to steel products.

EU exports to China rose to 78 billion euros ($106 billion) in 2008 from 26 billion euros in 2000, while imports from China rose to 248 billion euros from 75 billion euros over the same period.

EU member states backed the move at a meeting of national trade officials earlier this month.

European and U.S. steelmakers accuse China of giving its own steel companies an unfair advantage by restricting exports of coke and other materials used to make steel.

European industry also has objected to what it calls China's use of export curbs to drive down domestic raw material costs at the expense of foreign producers.

Europe's chemical sector is particularly unhappy with Beijing's decision last year to impose a 120 percent tax on exports of yellow phosphorous.

Phosphorus is crucial for the chemical industry and is used in many products including fire extinguishers and detergents.

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Hey MOP - have you got the link for this?

Ooops. Forgot.

http://www.globeinvestor.com/servlet/story...to0623/GIStory/

Updated Version

U.S. files WTO case against China over exports

The Associated Press

Tuesday, June 23, 2009

WASHINGTON — The Obama administration on Tuesday filed its first unfair trade case against China before the World Trade Organization, accusing the Asian power of restricting exports of key raw materials needed for the production of steel, aluminum and other products.

U.S. Trade Representative Ron Kirk said at a news conference that the U.S. is “deeply troubled at what appears to be a conscious policy to create unfair advantages for Chinese industries.â€

The European Union also filed its own case on the matter, setting the stage for what could be a key showdown among the world's major trading countries.

The materials at issue include coke, bauxite, magnesium and silicon metal, the U.S. complaint notes. The U.S. and EU complaints say China's export restrictions give its companies an unfair edge over their foreign rivals by giving them access to cheaper materials, despite WTO rules against export curbs.

“The Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn,†EU Trade Commissioner Catherine Ashton said in a statement.

Both Ms. Ashton and Mr. Kirk expressed hope the issue could be resolved during a 60-day negotiating period. But if that doesn't happen, Mr. Kirk said the U.S. will go forward with a WTO case because of the issue's importance to American companies and workers.

“Dialogue is our preferred course of action, but despite raising this issue with China repeatedly, China has not changed its policies,†Mr. Kirk said. “We are committed to enforcing our rights using all of the resources at our disposal, including the WTO.â€

The American Iron and Steel Institute –whose members include Nucor Corp. and United States Steel Corp. – the United Steel Workers and other industry groups released a joint statement praising the administration's decision to pursue a WTO case against China.

“When China joined the WTO in 2001, it committed to removing these restrictions,†the groups said, calling the barriers on the export of raw materials and minerals “just another way in which China favours its domestic manufacturing industries at the expense of the rest of the world.â€

The U.S. complaint contends that China maintains a number of measures that restrain the export of raw materials for products for which it is the world's largest producer or near the top, such as coke, a key ingredient in steel production.

A U.S. fact sheet said “a prime example of the highly distortive effects of China's export restraints†was its decision to limit exports of coke from 336 million metric tons in 2008, down to current annual exports of only 12 million metric tons.

Before the export controls were imposed, China accounted for about 60 per cent of global coke production.

© The Globe and Mail

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Look, America does NOT want China or anybody else trading paper for resources.

That is supposed to be their trick.

The EU is just along for the ride, but in reality, they need China, as do the Yanks.

Both the EU and America are being pushed aside as China offers a better partnership to resource nations as they can actually offer something more than tyranny in trade.

Get used to it.

Sure there will be sabre rattling, but that's all it will be.

Follow the money.

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Oh, and don't forget this important fact:

BP: China overtakes OECD countries with demand for energy

LONDON: The world economy in general during 2008 saw both great highs and great lows, but the year was also remarkable for another reason; less dramatic, but, arguably, just as profound in its implications for the long term. For the first time ever, according to the 2009 BP Statistical Review of World Energy, the developing world led by China leapfrogged OECD nations in the consumption of primary energy.

At the launch of the review in London, BP chief executive Tony Hayward said, "The center of gravity of the global energy markets has tilted sharply and irreversibly towards the emerging nations of the world, especially China.

"This is not a temporary phenomenon, but one that I believe will only increase still more over time. It will continue to affect prices and bring with it new challenges over economic growth, energy security and climate change. This shift will bring volatility in the short term. But I have no doubt that the diversity and flexibility of modern energy markets will continue to ensure that energy supplies continue to reach consumers efficiently and without interruption."

BP chief economist Christof Ruehl said that in spite of the dramatic gyrations in the world economy and energy prices, the review data showed how well those markets had served energy security during the year. "Allowing markets to continue to function freely and without interference remains key to managing the inevitable ups and downs in prices as we go forward," he said.

The review reports remaining proved oil reserves of 1.258 billion barrels, excluding Canadian oil sands, which is enough for 42 years at 2008 production rates. On the same basis, reserves of gas are sufficient for 60 years and coal for 122 years.

Reflecting the extremes of the world economy across 2008, strong growth followed by sharp decline, the review shows that overall primary energy consumption nudged up just 1.4 percent, the smallest rise since 2001. China alone accounted for almost three quarters of the rise, with most of the balance coming from the wider Asia-Pacific region.

In the developed world, energy consumption fell by 1.3 percent, with demand in the USA seeing the steepest single year decline since 1982, a drop of 2.8 percent.

In 2008 the average price of dated Brent crude oil rose to US$97.26 a barrel, 34 percent up on the previous year and the seventh consecutive annual rise. However, the annual average masked huge variations across 2008. The price began the year at just below US$100 a barrel, peaked at US$144 in early July and fell dramatically to less than US$40 at year-end, the fall a consequence of higher OPEC production and rapid slow-downs in consumption in the second half.

Over the year, global oil consumption fell by 0.6 percent, or 420,000 b/d; the first decline since 1993 and the largest drop for 27 years. This included a steep fall in demand of 1.5 million barrels a day from the developed OECD countries - their third consecutive year of decline - and slower growth in demand (up just 1.1 million barrels a day) from outside the OECD.

Despite overall lower demand, average oil production rose 0.4 percent, or 380,000 barrels a day, driven largely by OPEC production increases. Despite cuts late in the year, average OPEC oil output actually rose by almost 1 million barrels a day, or 2.7 percent. This all came from the Middle East with daily production from Saudi Arabia up 400,000 barrels and from Iraq up 280,000 barrels.

Production outside OPEC recorded the steepest decline since 1992, falling by 1.4 percent, or 601,000 b/d, with output from the OECD countries falling four percent, or 750,000 b/d, driven by declines in North America and Europe. The single largest decline came from Mexico, where production fell 310,000 b/d. Russian production fell for the first time since 1998, by 90,000 b/d. UK oil production fell 94,000 b/d, or 6.3 percent, to the lowest level for 30 years.

Gas consumption grew by 2.5 percent, below the 10-year average. Consumption in the USA grew by 0.6 percent as spot prices remained well below oil prices. Elsewhere, only the Middle East saw above-average growth, driven by strong domestic demand. Oil-indexed gas prices in OECD Europe and Asia-Pacific rose more rapidly which, coupled with the recessionary impact, meant that consumption growth was below average.

The largest incremental growth in world gas demand was from China, where consumption rose 15.8 percent. The UK's gas consumption grew by three percent, with gas now supplying 39.9 percent of the UK's total primary energy, which is well above the global average of 24.1 percent.

Globally, gas production rose 3.8 percent, above the 10-year trend of three percent. This was driven strongly by the USA, which recorded its highest ever annual increase in gas production as strong activity in the development of unconventional gas resources raised output by 7.5 percent, which is 10 times the 10-year average growth rate. The second highest increment was from Qatar as pipeline exports to UAE increased. Production rose in Europe overall as increases in Denmark, Netherlands and Norway more than offset falls in the UK and Germany.

For the sixth consecutive year coal remained the fastest growing fuel globally, even though its 3.1 percent growth in consumption was below the 10-year trend. China, which accounts for fully 43 percent of global coal demand, accounted for 85 percent of this growth, with an increase of 6.8 percent. Outside China however, global demand growth was weak, climbing only 0.6 percent, reflecting the fact that coal prices in liberalized markets increased more than for any other fossil fuel. Coal use in the UK fell 7.6 percent to the lowest level for a decade, in part due to fuel switching driven by CO2 prices in the EU emission trading scheme.

Nuclear output fell for the second consecutive year, by 0.7 percent, led by a 10 percent decline in Japanese output as its largest power station remained shut after a 2007 earthquake. Hydroelectric output continued its recent strong performance with growth of 2.8 percent, above the 10-year average for the fourth time in the past five years. However, again, all of the global increase could be accounted for by growth in China, climbing by 20.3 percent, nearly twice the country's 10-year average rate. Hydroelectric generation outside China fell by 0.4 percent.

Renewable energy again grew strongly, albeit from a low base, with wind and solar generating-capacity growing 29.9 percent and 69 percent respectively, both above their 10-year average rate. The USA's wind power generating capacity grew by 49.5 percent, overtaking Germany to have the largest installed wind generating capacity in the world. UK wind generating capacity grew 36.3 percent to 3.3 GW; still, however, accounting for less than three percent of global installed capacity.

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Look, America does NOT want China or anybody else trading paper for resources.

That is supposed to be their trick.

The EU is just along for the ride, but in reality, they need China, as do the Yanks.

Both the EU and America are being pushed aside as China offers a better partnership to resource nations as they can actually offer something more than tyranny in trade.

This seems to be about Chinese limiting its own resource exports, not about them securing third-party resources:

The European Union will take action with the United States at the World Trade Organisation over Chinese export restrictions on around 10 industrial raw materials

If they want the benefits of free trade then they ought to abide by the rules themselves. But I think their instincts tend towards Mercantilism rather than free trade (as this story appears to confirm).

Edited by huw

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If they want the benefits of free trade then they ought to abide by the rules themselves.

And which rules would those be?

Anything like those implied by this "sterling" example perhaps..??

"[The CAP] represents 48% of the EU's budget, €49.8 billion in 2006 (up from €48.5 billion in 2005)"

http://en.wikipedia.org/wiki/Common_Agricultural_Policy

esp..

http://en.wikipedia.org/wiki/Common_Agricu...cism_of_the_CAP

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And which rules would those be?

Anything like those implied by this "sterling" example perhaps..??

"[The CAP] represents 48% of the EU's budget, €49.8 billion in 2006 (up from €48.5 billion in 2005)"

http://en.wikipedia.org/wiki/Common_Agricultural_Policy

esp..

http://en.wikipedia.org/wiki/Common_Agricu...cism_of_the_CAP

Well, we can't have rampant communism floating about in europe, can we?

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