The US, EU and Mexico have just (2 hours ago) jointly made a formal request to the WTO for a dispute-settlement panel to address China’s export restraints on a number of raw materials of interest to our precision machining industry. Bloomberg coverage here.
Raw materials such as
- coke ( used in steel),
- zinc (used in brass),
- bauxite (aluminum ore),
- fluorspar (steelmaking slag conditioner),
- manganese (steelmaking ingredient),
- silicon metal (steelmaking deoxidizer),
- silicon carbide (desulfurizer)
These are among the materials listed in the filing. These are important (essential!) ingredients into the steel and metallic raw materials our industry consumes. We remember reading about this as an emerging concern in June in the Globe and Mail.
The economic issue is that this “resource hoarding” results in artificially lowered cost for these raw materials in China and in effect becomes a subsidy for those manufacturing operations that China deems “strategic.” While at the same time making these materials more difficult (and Expensive) to obtain for non Chinese companies.
“Peace” according to Ambrose Bierce, in The Devil’s Dictionary, “in international affairs is a period of cheating between two periods of fighting.” I think that this is a particularly useful perspective in this situation.
“Diplomacy,” according to my 8th grade History teacher, Mrs. Abernathy, “is war by other means.”
Our industry, the EU, Mexico, and the United States- all of us are certainly looking forward to some diplomatic success.
The panel is expected to be convened Nov. 19th.
Steel loading Photo via Globe and Mail originally Shanghai Reuters.
Earth photo credit: NASA.