Trade complaint names China

The United States and European Union accused China of unfair-trade practices on Tuesday, saying the Chinese government was restricting exports of raw materials to give manufacturers in that country a competitive advantage.

The U.S. trade representative, Ron Kirk, said China had imposed quotas, export duties and other costs on raw materials used in the production of steel, chemicals and aluminum. In effect, he said, China was putting its thumb on the scale and giving Chinese manufacturers an unfair edge.

"Trade has to be fair," Kirk said at a news conference in Washington. "If you're going to do business with the United States, you're going to have to play by the rules."

He said that restrictions on exports of bauxite, zinc, yellow phosphorus and other raw goods make it more expensive for manufacturers to produce finished goods and threatened thousands of jobs in industries already rocked by the global recession.

The U.S. and European Union filed complaints with the World Trade Organization, the first step in what could be a years-long process of trying to resolve grievances against China.

"The Chinese restrictions on raw material distort competition and increase global prices, making things even more difficult for our companies in this economic downturn," the European Union's trade commissioner, Catherine Ashton, said in a statement.

In announcing the complaints, trade representatives from either side of the Atlantic said they had filed requests for formal consultations with China, and hoped to work out the disagreement before taking it further within the World Trade Organization.

The formal complaint came after years of talks among China, the United States and European Union over Chinese trade practices went nowhere.

Since China joined the World Trade Organization in 2001, it has filed four complaints against the United States, and has been the subject of seven complaints by the United States and two by the European Union.

China is one of the United States' largest trading partners and is the largest foreign holder of U.S. debt. But trade between the two countries has tumbled since the financial crisis erupted.

China's export-heavy economy has stumbled amid a global downturn that has sapped demand for Chinese-made electronics, clothing and other consumer products.

Earlier this month, the Chinese government reported that exports fell 26.4 percent in May from a year earlier. On Monday, in a possible effort to blunt the trade complaints, China announced that it would cut or eliminated export taxes on some metals, steel wire, fertilizer, soybeans and wheat.