Reuters quoted the EU trade chief as saying that he would press China for assurances on rare earth supplies in talks next month though there was no conclusive evidence Chinese limits on such exports had hit European industry.

The European Union is struggling to secure supplies of rare earth minerals, which are used in the production of high tech goods and defence products and has said it could take legal action against China for cutting down on exports.

Mr Karel De Gucht European Trade Commissioner said that if need be, we will certainly go to the WTO but up to now there is no conclusive evidence that our European businesses are hampered by this. It's better to come to a negotiated agreement whereby the interim is covered by clear arrangements instead of getting into a fight.

Mr De Gucht said that Europe was paying close attention to Chinese state subsidies as the EU looks for new ways of deal with cheap imports that hurt its producers. Chinese imports are set to boom in 2016 when the EU recognizes China as a market economy. We are focusing more and more on subsidization. They subsidize nearly everything. We are going to become much more precise in reacting to that kind of practice.

Mr De Gucht rejected calls for an EU import tax on goods made under less stringent environmental conditions than in the EU, saying that would pose the risk of multiple legal suits.

He said that France and Germany have said a green border tax is critical for securing the competitiveness of EU producers burdened by environmental rules that add to their costs. I fear very much that could end up in a trade war. I'm certainly not in favor of this.

(Sourced from Reuters)