China Scarce Resources Export Restrictions And WTO Exception Rules Apply

With the enhancing of economic power and transforming of development mode of China,the Chinese government underlines the natural environment protection and strategicnatural resource conservation greatly. Series of measures and policies were taken inorder to control the rare resource development and exportation. As a side effect, thesemeasures and policies cause a price increase of related material in the global market,which irritates developed counties such as Japan, US and EU. In2009, the United Statesalong with EU resorted to the WTO DSB to challenge certain measures taken by Chinarelating to the exportation of various raw materials. After a fruitless consultation, and thePanel’s verdict and finally the Appellate Body’s re-examination, the report of theAppellate Body is not in favour of China, major reason of which is that the WTO-plusobligation committed by China when accessing imposed strict limitation on China’sreference to the general exception of GATT1994Article20.Short after the Raw Material case was settled, the United States, allying with EU andJapan complained to DSB against China’s measures upon exportation of rare earth,tungsten and molybdenum.23th Jul2012,the WTO DSB decided to establish a panel forthis case. The domestic scholars generally look upon the case as in disadvantage due tothe adverse impact of the Raw Material case. In the Raw Material case, four categories ofmeasures were challenged by the complaints and found inconsistent with China’s WTOobligation, which are, export quota, export duty, export licensing and Minimum ExportPrice system (MEP). While in the Rare Earth case, all categories of measures of RawMaterial case were in dispute except MEP. Such similarity may contribute to a duplicatedresult. The author is aimed to clarify the application effect priority between the WTO CoveredAgreements and the China Accession Protocol by analysing the law application of theRaw Material case. With the rules of international law interpretation as a useful tool, theauthor unscrambles the violation of China’s measures against relevant provisions andthus provides advice to the Rare Earth case remaining open and other trade disputes maycome up as well as how to keep balance of free trade and environment protection byskillfully practice the WTO rules.