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The European Union (EU) and the US have demanded the World Trade Organisation to annul the export restrictions endorsed by China on raw materials used by the steel, aluminium and chemicals industries.
This decision, for urging WTO to come up with an amicable settlement, was adopted by US & EU after the issue remained unresolved even after holding amicable dialogues in Geneva.
Mexico supported the EU and US move.
"China's restrictions on raw materials continue to distort competition and increase global prices, making conditions for our companies even more difficult in this economic climate," said EU Trade Commissioner Catherine Ashton.
"I regret that the formal consultation process and significant EU engagement on this issue has not led to an amicable solution which would have been our preferred course of action," Ashton said.
China has imposed restrictions on the export of nine critical ingredients of steel, aluminium and chemicals production.
The EU and the US argue that this is giving Chinese companies an unfair advantage over their foreign competitors.
The items which have been restricted by China are quotas, export duties and minimum export prices on raw materials like yellow phosphorous, bauxite, magnesium, silicon and zinc. Some of these resources are difficult to find outside China, EU officials say.
Wednesday's move focuses on a first batch of measures and products.
However, "the EU's concerns are not limited to these measures and further legal action cannot be ruled out if these concerns are not effectively addressed”, said the officials.
China is the EU's second trading partner after the US and the biggest source of EU imports.
