The Compliance Of China’s Export Restrictions On Rare Earths With WTO Rules

Rare earths are critical raw materials for high-tech products and the national defense industry. It is estimated that China’s rare earths reserves could be exhausted in15-20years. Therefore, it is imperative for China to protect its rare earths, In order to achieve this goal China implemented a serious of rare earths export restriction measures including export quotas and export duties. Regarding China’s rare earths export restrictions, US, EU, Japan filed a WTO complaint against China in September2012.To find out whether China’s export restrictions on rare earths are in compliance with WTO rules, this thesis makes an analysis of related WTO rules, related cased settled by WTO Dispute Settlement Body and specific measures taken by China to restrict the exportation of rare earths. This thesis also provides several suggestions on how to modify China’s export restriction measures if China’s export restrictions on rare earths were found to be in violation of WTO rules. This thesis is organized in the following four parts.The first part briefly introduces the concept of rare earths and features of rare earths, provides· basic information concerning China’s rare earths reserves and rare earths exportation, and analyzes the reason that caused this rare earths dispute.The second part analyzes previous cases and tries to find out the requirements that shall be satisfied in order to apply GATT1994Article XI, GATT1994Article XX (b), GATT1994Article XX (g) and the chapeau of GATT1994Article XX. Then this chapter examines China’s export restrictions on rare earths with these requirements.The third part explores whether GATT1994Article XX can be applied to China’s rare earths export duties by analyzing the relationship between GATT1994Article XX and Paragraph11.3of the Protocol on the Accession of WTO of the PRC, comparing China-Raw Materials case with China°-Audiovisuals case and analyzing the separate opinion by one panelist in China-Rare Earths case.The fourth part provides several suggestions regarding improving China’s Export Restrictions on Rare Earths based on the research above, including (a) to improve China’s domestic laws and regulations concerning foreign trade, natural resources and environmental protection according to WTO rules;(b) to learn from foreign countries regarding their protection of domestic valuable natural resources;(c) to settle the dispute through other alternative dispute resolutions especially through a diplomatic way.