In June 2008, the European Union (EU) and the United States (US) announced the beginning of World Trade Organisation (WTO) consultations with China regarding certain export restrictions, such as quotas and export duties, imposed by China on key raw materials, i.e. various forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorous and zinc. The EU and US complained that these measures were in breach of China's WTO obligations and of specific commitments that China had undertaken as part of its WTO Accession Protocol. They argued that the restrictions had led to increased global prices and distorted competition between Chinese and non-Chinese companies. Moreover, some of these substances could be found only in China. The main industry sectors affected by the measures were the chemical, steel and aluminium industries, representing about 4 per cent of the EU’s industrial activity, according to data submitted by the European Commission.
As no amicable solution to these export restrictions has been found, on 4 November 2009 the EU requested the establishment of a dispute settlement panel at the WTO. Similar requests were made by the US and Mexico.
The request for a panel must first be considered by the Dispute Settlement Body. If the request is accepted the panel will be established at the latest during the following Dispute Settlement Body meeting, currently scheduled for 19 November.