| On23June2009the United States (US) and the European Union (EU) filed a complaint through the WTO and requested consultation with China on use of export restrictions relating to China's exports of various raw materials. Two months later, Mexico made a similar request. The US, EU and Mexico accused China of using quantitative restrictions on exports, export levies, minimum export pricing system and contract review systems. As required by WTO rules China failed to publicise its specific export requirements and measures. WTO experts hearing the case made a preliminary determination, determining that parts of China's export restrictions are inconsistent with the relevant commitments under GATT1994rules and China's protocol of accession to the WTO.The case of "China-Measures Related to the Exportation of Various Raw Materials (DS394/395/398)" accrued in the historic background of economic globalization. trade globalization and the international financial crisis. This is the first case relating to the export restrictions of natural resources between China and United States, after President Obama took office. and therefore is an issue of great interest to the international community. Apart from the introduction and conclusion this paper consists of the following sections:The first part of this paper looks at the concept of raw materials and influence in international trade. In the complaint documents of US, EU and Mexico, as well as the panel's report the nine raw materials in the case are defined as "raw material" however China's written statement defines them as "natural resource". The paper theorises the distinctive scope of the definition of "raw materials" and "natural resources". In order to illustrate the importance of raw materials the paper discusses the characteristics of raw materials, the broad use. non-renewable, environment-related. uneven distribution, and regional price volatility. Raw materials are unique which make them important in international trade and are protected by both domestic law and international law. The protection of raw materials has been incorporated into national and environmental sovereignty.The second part of this paper discusses the WTO rules relating to restrictions on export of raw materials and examines a country's right to export restrictions by the international rules. WTO rules contain "rules of general crimination of quantitative restrictions". However, under some exceptional circumstances members of WTO can be allowed to take measures on export restriction. In the document of "China's Protocol to the accession", China made a commitment regarding export restrictions on certain products. After analysing the importance of raw materials and the general rules of restrictions on exports, this paper explains the applicable conditions of GATT Article20(b) and20(g) and the specific measures regarding export restrictions WTO members can take.In the third part, the law and practice of raw material export restrictions in some other countries. It is necessary China studies laws and practices of other countries, as well as improving knowledge of the WTO provisions on export restrictions. Therefore in this section the strategy of raw materials in EU and US are discussed as well as some developing countries which benefit from export restrictions. In order to access cheap raw materials from developing countries, the EU introduced the "Raw materials Initiative", which listed the strategic materials critical to its economic development. EU is also making a big push to negotiate a range of free trade agreement with some countries and organizations. requiring them to liberalise trade with the EU. Although there is no list of US strategic raw materials, it has launched a series of bills to revive rare earths and raw materials. On the contrast, some developing countries levy export restriction on raw materials in order to develop domestic industries or to protect natural resources and the environment. The benefits of export taxes that Argentina, Kenya and Mongolia impose are also examined.The final part, laws and practice of restrictions on exports of raw materials in China begins with the specific measures taken by China on export restriction of nine raw materials in the dispute. Then it compares these measures with Foreign Trade law of the People's Republic and with WTO rules respectively.In the case of "China-Measures Related to the Exportation of Various Raw Materials (DS394/395/398)", although the WTO ruled that some of restrictions on exports of raw materials violated international law. reasons to appeal are explored. On the other hand, China needs to learn mistakes made in this case and to adjust its resources development strategy and improve China's legal system on natural resources. |
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