WTO China's Rare Earth Export Management System Of Compliance

General Agreement on Tariffs and Trade is the cornerstone of multilateral trade.The objective of GATT is to prohibit trade barrier and establish free trade, thereforeimprove the living standards of all citizens by allocating resources among the members.GATT included five types of trade barriers, which are duty, custom procedures,quantitative restriction, state trading and subsidies. WTO and GATT both prohibit orlimit the use of quantitative restriction. However, with considering the unbalanceddevelopment among members, GATT allows its members to apply quantitativerestrictions under certain circumstances which is regulated in Article20of GATT, andthe application of Article20is the key issue to be discussed in this paper.China—Measures Related to the Exportation of Rare Earths is a case followsChina—Measures Related to the Exportation of Various Raw Materials, whichbrought against China on the rare resources. The WTO has not settled current rareearth case so far, this paper will make assumptions on the perspective complaints andpossible arguments China will adopt in the rare earth case based on the findings thatthe panel and the appellant body made in the raw material case, The study on theproper application of exceptions to GATT rules is helpful for China to protect itsinterest in the world trade.To this end, this paper is organized as follows: Section I is the foreword whichintroduces the background and objective of this paper. Section II introduces the twocases mentioned above. Section III includes a summary of current legal instrumentidentifying export restrictions which China applies. Analyzes the complaints aboutfour types of export restriction brought in the rare earth case, which are Export Duty,Export Licenses, Export Quota, and Administration and Allocation of Export Quotas.Conclude perspective findings the Panel will make based on what the panel andappellant body concludes in the raw material case. Section IV describes the WTO rulesinvolved in the rare earth case including exceptions to the principle of “GeneralElimination of Quantitative Restrictions” and the rules of application. Conclude theChina’s eligibility to invoke exceptions Article20(b) or (g) of the GATT1994whichare to protect the life and health of human being and animals, or made effective inconjunction with restrictions on domestic production or consumption to maintain theexhaustible natural resources, therefore to justify measures found to be inconsistent with WTO rules. And also describes the argument China may present based on theWTO infant industry protection clause regulated in Article18. Section V includes thesuggestions how to protect the rare earth resources and the alternatives to the exportrestrictions current applied. Section VI makes the summary of this paper.