Council conclusions on EU strategy on China (18/07/2016)
The European Union launched
today a third case against China's restrictions on export of raw
materials essential for European industries.
Following the successful
legal actions in 2012 and 2014 on similar measures, this time the EU is
focusing on restrictions concerning graphite, cobalt, copper, lead,
chromium, magnesia, talcum, tantalum, tin, antimony and indium.
"We cannot sit on our
hands seeing our producers and consumers being hit by unfair trading
practices. The past two WTO rulings on Chinese export restrictions have
been crystal clear - these measures are against international trade
rules. As we do not see China advancing to remove them all, we must take
legal action," said EU Trade Commissioner Cecilia Malmström.
China currently imposes a set
of export restrictions, including export duties and export quotas that
limit access to these products for companies outside China. These
measures have distorted the market and favoured Chinese industry at the
expense of companies and consumers in the EU, in violation of general
WTO rules and also of China's specific commitments from the time of its
accession to the WTO. Also, their alleged aim to support an
environmentally friendly and sustainable production of raw materials
could be achieved more effectively with other measures, without negative
impact on trade.
The formal consultations
between the EU and China – the first step in the WTO dispute settlement -
will be conducted in parallel to a similar procedure initiated by the
US. In absence of a satisfactory solution within 60 days, the EU may
request the WTO to set up a panel to rule on the compatibility of
China's measures with WTO rules.
Raw materials subject to the case include graphite, cobalt, copper, lead, chromium, magnesia, talcum, tantalum, tin, antimony and indium. Some of them (in bold) are among the twenty raw materials identified in 2013 as critical to Europe’s economy and essential to maintaining and improving our quality of life.
China’s total exports of
these products are worth around €1.2 billion, one sixth of which comes
into Europe. A first analysis suggests that removing the export duties
imposed by China could allow an additional supply of these raw materials
to the EU economy worth around €19 million, i.e. an increase of 9.2%.
However, the real increase of China’s supplies to the EU is likely to be
much higher if the other instruments that China is currently using to
restrict its exports were also removed.
Types of restrictions
China applies export duties
to various forms of antimony, chromium, cobalt, copper, graphite, lead,
magnesite, magnesia, talc, tantalum, and tin. Quantitative restrictions,
such as export quotas, are applied to antimony, indium, magnesia, talc,
Raw materials concerned
Graphite is one of three pure
forms of carbon and is used in a wide range of industry applications,
in particular in refractory materials as well for lubricants,
steelmaking, metal casting and brake linings.
China is the world’s dominant
producer accounting for two thirds of world supply. EU is dependent on
imports for 95% of its consumption. Approximately half of EU imports of
graphite come from China.
Cobalt is used in chemical
compounds for a wide range of industrial applications. Rechargeable
batteries consume the largest proportion of cobalt. The demand for
cobalt is expected to increase due to the emerging use of cobalt in some
rechargeable batteries for electric vehicle applications and biotech
Cobalt is mainly produced as a
by-product from copper and nickel. Half of the mine production is done
in DRC and there is hardly any production in the EU. China has limited
reserves and mine production of cobalt but has secured many life-of-mine
or long-term contracts with third countries' mine operators that allow
it to be the world’s leading producer of refined cobalt.
Copper is the best electrical
conductor after silver and is used in the production of
energy-efficient power circuits. As it is also corrosion resistant,
ductile and malleable, its main application is in all types of wiring;
from electric energy supply from the power plant to the wall socket,
through motor windings for electrical motors, to connectors in
While the vast majority of
copper reserves are found in the Americas (Chile, USA, Peru and Mexico),
there is some production in the EU, mainly in Poland. Two thirds of EU
imports come from Latin American countries. In turn China accounts for
approximately 10% of world mined production of copper which is mainly
used for domestic consumption.
The lead-acid battery
industry is the main sector using lead. Other applications include
ammunition, glass, heat stabilizer in plastics and resins, metal
finishing, electronics, sheet, bulk metal, and pigments.
China accounts for about half
of the world's mine production of lead. Lead is also mined in the EU,
mainly in Poland, Sweden, Greece and Bulgaria. Russia is the EU main
source of imports.
Chromium finds its main
applications in the steel industry, in particular for the production of
stainless steel production. South Africa is the main world producer of
mined chromium and shares with Kazakhstan the largest global reserves.
South Africa is also by far the main source of EU imports, with some
quantities imported from Turkey. As the largest global stainless steel
producer, China is the leading chromium-consuming and
Magnesia including magnesite
Magnesite is mainly used in
the production of magnesia, in the form of caustic calcined magnesite,
dead burned magnesite and fused magnesia. Dead burned magnesite and
fused magnesia are predominantly used in the refractory industry;
caustic calcined magnesite is mostly used in chemical-based applications
such as fertilisers and livestock feed, pulp and paper, iron and steel
making, hydrometallurgy and waste water treatment.
China holds 70% of the global
mined production of magnesite. There is some production of magnesite in
the EU (Spain, Slovakia, Austria and Greece). The EU is nevertheless
import dependent for magnesia, imported mainly from China and Turkey.
In Europe, the largest
applications of talc are plastics and paints consuming together about
50% of the total talc consumption. Further end-uses are represented by
paper, agricultural applications, and the manufacturing of ceramics,
rubber, food, cosmetics and pharmaceuticals.
China is the largest global
producer of talc with about 30% of the world production. There is some
significant production in the EU as well, covering about 80% of the EU
domestic consumption. Imports into the EU mainly come from Pakistan and
Tantalum is used in the
production of electrical components (including those used in mobile
phones, computers, videogame consoles), aircraft engines and surgical
Rwanda, the Democratic
Republic of Congo and Brazil were the leading producers for tantalum
worldwide in 2015. China, while not a major tantalum producer, imposes
an export duty on tantalum waste and scrap, which is the measure subject
of this case.
Tin main application is in
alloys of tin and lead used as solders for electric circuits found in
the majority of electronic appliances. Tin is also used in the packaging
industry as well as in chemical applications.
Mining in five countries
(China, Indonesia, Burma, Peru and Bolivia) accounts for 80% of the
total world tin production. Of these five, China is the world’s leading
tin producer, with 37% of world production and the world's main tin ores
importer. There is hardly any tin production in the EU, except for
limited quantity in Portugal.
Most antimony is used in form
of antimony trioxide, mainly for flame-retardants for plastics and
other products. Especially modern aircraft industry uses antimony
trioxide as a fire retardant. Other applications include batteries,
plastics, glass, semiconductors and alloys.
Antimony is mined in 15
countries, but mine production is concentrated very heavily in China
(78% of the world total). There is no current mining of antimony in the
EU. Turkey and Bolivia are the main EU sources of imported antimony
The major use of indium is as
indium-tin oxide in flat panel devices including flat screen computer
monitors, LCD smart phones, televisions and notebooks. Other
applications are in alloys and solders, solar panels, light emitting
diodes and laser diodes.
Indium is a by-product of
other mining and refining operations, mainly of zinc as well as lead,
copper and tin minerals. China accounts for half of refined indium
production. While production takes place in some EU Member States
(Belgium, Germany, Italy, the Netherlands and the UK), the EU is also a