EU Gives China Ultimatum Over Coke Export Restrictions

The European Union has given China five days to abolish its contentious export restrictions on coking coal, a key raw material for steelmaking, or face a World Trade Organization (WTO) challenge. The ultimatum comes as the Commission, led by Trade Commissioner Pascal Lamy, has repeatedly warned China that the restrictions violate WTO rules. China's curbs on coke exports, which mainly affect Japan and the EU, have contributed to a significant increase in global prices. The European steel industry has complained that the restrictions have driven up prices from $79 a tonne two years ago to $350 in the first quarter of 2004.

Key Takeaways:

• The European Union has given China a five-day ultimatum to abolish export restrictions on coking coal, or face a WTO challenge.
• China's restrictions on coke exports mainly affect Japan and the EU, and have driven up global prices from $79 a tonne to $350 in the first quarter of 2004.
• The European steel industry has complained that the restrictions have artificially inflated prices, making it difficult for EU producers to compete.
• The Commission, led by Trade Commissioner Pascal Lamy, has repeatedly warned China that the restrictions violate WTO rules.
• The move marks an important shift in EU-China trade relations, with the EU adopting a more assertive stance on trade issues.
• China's response to the ultimatum will be closely watched, as the Chinese leadership has sought to avoid trade disputes with major trading partners and investors.
• The EU is also concerned about other trade issues with China, including trade barriers affecting European construction and car companies, as well as the theft of intellectual property rights.

Statistics:

• Global price of coking coal: $79 a tonne (two years ago) to $350 in the first quarter of 2004.
• Percentage of China's annual coke production shippable abroad: less than 10% last year.
• Location of countries affected by China's coke export restrictions: mainly Japan and the EU.

Sources:

• "EU gives China five days to scrap coke export curbs", FT.com (no date specified).
• European Commission (no date specified).
• World Trade Organization (no date specified).