The Regulation Of WTO On The International Trade Of Natural Resource Products And China’s Due Positions

NATURAL resource products (NRP), namely fuel products, mineral products,fishery products and forestry products are the foundation for the survival anddevelopment of mankind. The international trade of NRP is essentially an integralpart of international trade and economy. The rule-based system of WTO regulates theinternational trade of NRP, which reversely influences and shapes the evolvement ofWTO rules. The international trade of NRP is of its own uniqueness, therefore, it isnecessary to select and systematically present those rules specifically relevant andapplicable to the international trade of NRP out of the complex general rules of WTOon the trade of goods. It is also necessary to thoroughly understand those rules andtheir application in order to clarify the whole picture of WTO’s regulation on theinternational trade of NRP. This bears a great importance for China, which is one ofthe top traders of NRP in the world and has encountered with several trade disputes over NRP in recent years. The meaning and value of choosing this topic both intheory and practice can be reflected by the deficiency of the existing research in thisfield.Chapter1of this thesis is named as “The political economy of the internationaltrade of NRP”. The uneven geographical distribution and exhaustibility of naturalresources determine the features of the international trade of NRP and the specificeffects and meanings of states’ regulating behaviours towards the international tradeof NRP. The “Public Choice Theory” in political economy well manifests the“self-seeking” nature of states’ regulating behaviours. Just like individual behaviours,state behaviours would show varieties of irrationality which causes the “governmentfailure”, such as adopting the unilateral “beggar-thy-neighbour” policy for achievingthe largest trade rents or the optimal terms of trade, prioritizing the needs of certaininterest groups in international trade over the welfare of broader social members,derogating far-reaching non-trade values for pursuing short-term trade and economicprofits and trade-related corruptions. Therefore, states’ regulating behavioursthemselves must be regulated and corrected. This has been put into practice by WTO, which aims to regulate its Members’ regulating behaviours on trade.The political economy of the international trade of NRP can be employed toillustrate the fundamental reason why states are willing to be regulated by WTO. Inthe international trade of NRP, both exporting and importing countries are driven byself-seeking motives. On the other hand, due to their common dependency on theinternational trade of NRP, both exporting and importing countries have to curb theirself-seeking urges. The international trade of NRP cannot be a “zero-sum game” forany country, and no country wants to swallow the bitter pill resulted from a viciouscircle of trade retaliations owing to beggar-thy-neighbour policies. So the realisticchoice for every country is to act according to the collective game rules and makemutual compromises and concessions. The WTO system is exactly the way of doingso.Following the illumination of the political economy of the international trade ofNRP, Chapter2“The regulation of WTO on the international trade of NRP: theselection and analysis of rules” portrays and explicates the whole picture of WTO’sregulation on the international trade of NRP. In general, WTO rules on the trade of goods are all applicable to NRP. Nevertheless, some of those rules are particularlyrelevant and applicable to the international trade of NRP as well as to related issues.Such rules touch upon several major aspects of WTO rules on the trade of goods,including the non-discrimination treatment, import and export restrictions, the transitof goods, and non-tariff barriers. The rules relating to export duties, subsidies andtransit are especially noteworthy. Those are the issues highly focused upon in the“Doha Round” negotiation over the topic of NRP. WTO’s current regulation on theinternational trade of NRP is insufficient due to three asymmetries: the asymmetrybetween import regulation and export regulation, the asymmetry between trademeasure regulation and domestic measure regulation, and the asymmetry betweenMember regulation and non-Member regulation. However, WTO’s regulation is stillindispensible to the international trade of NRP. The “insufficiency” problem pointsout the direction of improving WTO’s regulation. In addition to WTO rules, severalprinciples, rules or mechanisms of international law can also be applied to theinternational trade of NRP, such as the principle of permanent sovereignty overnatural resources, international commodity agreements and multilateral environmental agreements. Along with WTO rules, they constitute the regulation ofinternational law on the international trade of NRP. But the coordination betweenWTO rules and non-WTO rules still leaves much to be reinforced.The title for Chapter3is “The regulation of WTO on the international trade ofNRP: treaty interpretation and the application of rules”. No rule can be real or haveeffect unless it is applied. WTO rules could be applied through Members’ voluntarycompliance. In addition, WTO rules could also be applied by WTO’s DisputeSettlement Body (DSB) to resolve disputes. Based on the jurisprudence of the DSB,this chapter analyzes the application and interpretation of Article XX “GeneralExceptions” of the GATT1994, which closely interrelates with the international tradeof NRP. This thesis makes every effort to cast away the “provision-measurematching” mode of thinking in previous research on Article XX, and meanwhileaddresses the general rules of treaty interpretation established by the DSB and the“principle of effectiveness” in treaty interpretation as well as their application ininterpreting WTO rules, especially Article XX. By analyzing six items of Article XXwhich could be applied to the international trade of NRP, this thesis shows the common applicable scope for those items and elaborates the issue of their effectiveinterpretation. This thesis contends that compared with the interpretation of certainitems, the applicability and the effective interpretation of Article XX as a whole forman issue at a more profound level, which immediately determines the limits andeffects of WTO’s regulation on the international trade of NRP.Chapter4is with the title of “Examining the particularity of WTO’s regulationon the international trade of fuel products”. The international trade of NRP is ofmultiple values, so WTO’s regulation on it needs to respect and encompass thosevalues. This is particularly exhibited within WTO’s regulation on the internationaltrade of fuel products. Since the international trade of fuel products is concerned withissues like energy security and climate change, which fundamentally affect states’interests in international relations, it is neither possible nor appropriate for WTO todisregard those issues when regulating the international trade of fuel products. Thischapter focuses on an institutional thinking of WTO’s regulation on the internationaltrade of fuel products, and concludes that WTO is indeed the right platform foradvancing the solution of issues involving environment, energy and climate change that are correlated with the international trade of NRP. However, WTO is not the“sole” platform. WTO has to cooperate and coordinate with other relevantinternational or regional organizations or mechanisms to realize the proper andeffective regulation on the international trade of NRP. This will contribute to solvingthe aforementioned issues and promoting the sustainable development of theinternational trade of NRP.Chapter5“From China–Raw Materials to China–Rare Earths: China’s duepositions on the international trade of NRP” begins with analyzing two recent WTOdisputes over NRP both concerning China, and demonstrates that on one hand theDSB could be wrong, and its mistakes in treaty interpretation and findings in China–Raw Materials have impaired China’s WTO rights; on the other hand, China needs toenhance its ability in reading and utilizing WTO rules. Under the WTO system, onlythrough its own efforts could China defend its sovereign rights over natural resourcesand its interests of sustainable development. China should identify and employ thoseinternational rules that are compatible with its actual circumstances. Meanwhile,China should actively take a part in reforming or improving current international rules according to its own needs, as well as in making new international rules concerningboth its own vital interests and the common interests of humankind. In sum, under theregulation of international law on the international trade of NRP, China should makeinternational rules and their institutional application serve for its needs and interests.