China loses WTO appeal over raw materials exports

The World Trade Organisation's appeals body has upheld a ruling that China restricted exports of certain raw materials to protect its domestic manufacturers.

China had appealed a WTO ruling in July that it broke global trade rules.

The US, Europe, and Mexico argued that China's export block on such things as magnesium and bauxite drove up prices.

But China had argued that its export limits on nine raw materials were needed to protect the environment.

In a statement the appeals body said China must now "bring its export duty and export quota measures into conformity with its WTO obligations".

The issue has caused tension between China and some of its major trading partners.

In a statement, US Trade Representative Ron Kirk called the ruling "a tremendous victory for the US... particularly its manufacturers and workers".

While the case requires China to comply, the EU "continues to be deeply troubled by China's use of export restrictions'' for other rare earth and industrial raw materials, the European Commission said in a statement.

But China's WTO mission in Geneva said it "deeply regrets'' that the appeals body upheld major parts of the earlier ruling's conclusions.

However, China said it would abide by the organisation's findings.