The EU trade chief said 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.

“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,” European Trade Commissioner Karel De Gucht told Reuters in an interview.

“It’s better to come to a negotiated agreement whereby the interim is covered by clear arrangements ... instead of getting into a fight.”

De Gucht said 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 recognises China as a market economy.

“We are focusing more and more on subsidisation ... They subsidise nearly everything,” he said. “We are going to become much more precise in reacting to that kind of practice.”

But 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.

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 (a border tax) could end up in a trade war. I’m certainly not in favour of this,” he said.

The EU executive Commission has no current plans to draft such a tariff, but might have to reconsider if other major trading or economic blocs took such a step, De Gucht said. (Reuters)