China rejects call for WTO panel on export limits

China rejected calls on Thursday at the World Trade Organisation for a panel to investigate its restrictions on exports of raw materials.

But under WTO rules, China will not be able to block a second request for the panel, sought by the United States, the European Union and Mexico, and it is likely to go ahead at the next meeting of the WTO's dispute settlement body on Dec. 21.

The three trading powers argue that China's export constraints on materials used to produce steel, aluminium and chemicals drive up world prices for the inputs, giving Chinese producers an unfair advantage.

They decided earlier this month to seek the panel after consultations under WTO rules to solve the dispute had failed.

"These restraints not only limit the availability of these raw materials, but also increase the cost of these raw materials to U.S. and other producers outside of China, while providing an artificial cost advantage to downstream industries within China," the United States told the WTO's dispute body.

China justifies the restraints with the need to protect the environment and conserve exhaustible natural resources.

It said the limits were under review and it wanted to consult further with the three plaintiffs on them.

The WTO set up panels in two other disputes on the second request by plaintiffs.

One involves complaints raised by Canada and Mexico about U.S. country of origin labelling (COOL) rules for meat, which the two say are hurting their livestock industries.

The second responds to a U.S. complaint that an EU ban on imports of U.S. poultry because of European concerns that poultry treated with antimicrobial chlorine rinses are unsafe is unscientific and protectionist.

WTO panels are supposed to circulate their findings to the parties after six months, and publish them three months later, but appeals and subsequent legal manoeuvrings can draw out the process for many years.

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