EU gets tough on export restraints

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Sep 2008

The European Union (EU) will threaten to file more trade complaints and overhaul free-trade deals to fight export duties on raw materials such as wood and textiles by governments, including that of China. Export restrictions, which have multiplied in recent years because of surging raw materials prices, discourage companies from being more productive and competitive. Such curbs drive up world prices and eventually choke off supplies of raw materials.

“Export restrictions invite a cycle of retaliation that is as economically counterproductive as it is politically hard to resist,” EU Trade Commissioner Peter Mandelson was to tell European industry leaders in Brussels yesterday. “We now count at least 450 export restrictions on raw materials across the global economy, and I am absolutely certain this is an underestimate.”
These include a 50% export tariff on Russian scrap aluminum that has all but wiped out trade in the metal, and export duties of as much as 40% on raw hides and skins from Argentina. India taxes iron ore shipments at 50 rupees ($1,06) a ton while China recently imposed a duty of 120% on yellow phosphorous and boosted export taxes on coke to 40%.
Raw materials represent about a sixth of the costs of manufactured goods in the EU. That can climb to as much as a third or more in industries such as plastics, paper and chemicals, Mandelson would say.

Source: Business Day