WT/DS394/R
WT/DS395/R
WT/DS398/R
Page 1
Organization
WT/DS394/R
WT/DS395/R
WT/DS398/R
5 July 2011
(11-3179)
Original: English
CHINA – MEASURES RELATED TO THE EXPORTATION OF VARIOUS RAW MATERIALS
Reports of the Panel
WT/DS394/R
WT/DS395/R
WT/DS398/R
Page 1
TABLE OF CONTENTS
Page
I.INTRODUCTION
A.Complaints of the United States, the European Union and Mexico
B.Establishment and Composition of the Panel
C.process for the Preliminary ruling on the Panel's terms of reference with respect to the Measures and Products at issue
II.FACTUAL ASPECTS
A.Background
B.Products at issue
C.Measures at issue
D.additional legal instruments identified by China
III.PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
A.Complainants
1.The United States and Mexico
2.The European Union
B.China
IV.ARGUMENTS OF THE PARTIES
V.ARGUMENTS OF THE THIRD PARTIES
VI.Interim review
A.The Descriptive Part of the Report
B.Issues relating to The Panel's terms of reference
C.Export Duties
D.Applicability of GATT ArticleXX to Violation of Paragraph11.3 of China's Accession Protocol
E.Export Quotas
F.China's defences to the application of export restrictions
G.Export Quota Allocation and Administration
H.Export Licensing
I.Minimum Export Prices
J.Conclusions and recommendations
VII.Findings
A.Issues relating to the panel's terms of reference
1.Preliminary rulings
2.Additional legislative instruments enacted by China during the Panel process
3.Whether the European Union's claims under ArticleX:1 and ArticleX:3(a) of the GATT1994 regarding China's administration of its export licensing system fall outside the Panel's terms of reference because they were not identified in the European Union's Panel Request
B.Export Duties
1.China's application of export duties
2.Whether export duties on bauxite, coke, fluorspar, magnesium, manganese, silicon metal, zinc and yellow phosphorus are inconsistent with Paragraph11.3 of China's Accession Protocol
(a)Export duties on "yellow phosphorous" (HS 2804.7010)
(b)Export duties on bauxite, including "refractory clay" (HS 2508.3000), "aluminium ores and concentrates" (HS 2606.0000) and "aluminium ash residues" (HS2620.4000)
(c)Export duties on "coke" (HS 2704.0010)
(d)Export duties on fluorspar, including "met-spar" (HS 2529.2100) and "acid-spar" (HS2529.2200)
(e)Export duties on magnesium, including "magnesium metal" (HS 8104.1100), "unwrought magnesium" (HS8104.1900), and "magnesium waste and scrap" (HS 8104.2000)
(f)Export duties on manganese, including "manganese ores and concentrates" (HS 2602.0000) and "unwrought manganese waste and scrap" (HS 8111.00.10) and "unwrought manganese powder" (HS 8111.0010)
(g)Export duties on "silicon metal" (HS 2804.6900)
(h)Export duties on zinc, including "zinc waste and scrap" (HS 7902.0000), "hard zinc spelter" (HS 2620.1100), and "other zinc ash and residues" (HS 2620.1900)
3.Whether China failed to consult pursuant to the Note to Annex 6 to China's Accession Protocol
4.Summary
5.Whether export duties on bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, and zinc are justified pursuant to ArticleXX of the GATT1994
(a)Whether ArticleXX of the GATT1994 is available as a defence to a claim under Paragraph11.3 of China's Accession Protocol
(i)WTO Members' Accession Protocols are integral parts of the WTO Agreement
(ii)The availability of ArticleXX of the GATT1994 for violations of Paragraph11.3 of China's Accession Protocol
Interpretation of Paragraph11.3 of China's Accession Protocol
Ordinary meaning
Context provided by other provisions of China's Working Party Report
Context provided by other provisions of the WTO Agreement
(iii)Conclusions
C.Export Quotas
1.Whether the European Union properly identified the measures subject to its ArticleXI:1 and Working Party Report claims on bauxite, fluorspar, silicon carbide and zinc
2.China's export quota regime
(a)Quotas allocated directly for coke and zinc
(i)2009 zinc export quota allocation
(ii)2009 coke export quota allocation
Application requirements for Chinese and foreign-invested enterprises
2009 Coke quota amounts
(b)Bauxite, fluorspar and silicon carbide quotas allocated through bidding
(i)The quota-bidding application process
(ii)Determining the bid-winners for bauxite, fluorspar and silicon carbide
(iii)2009 quota amounts for bauxite, fluorspar and silicon carbide
3.Whether export quotas applied to bauxite, coke, fluorspar, silicon carbide, and zinc are inconsistent with ArticleXI:1 of the GATT1994
(a)Export quotas on bauxite, including "refractory clay" (HS No. 2508.3000) and "aluminium ores and concentrates" (HS No. 2606.0000)
(b)Export quotas on fluorspar, including "met-spar" (HS 2529.2100), and "acid-spar" (HS2529.2200)
(c)Export quotas on silicon carbide, including silicon carbide and crude silicon carbide
(d)Export quotas on coke (HS 2704.0010)
(e)Export quotas on zinc, including "zinc ores and concentrates excluding gray feed grade zinc oxide" (HS 2608.0000 ex) and "gray feed grade zinc oxide" (HS2608.0000 ex)
4.Summary
D.China's defences to the application of export restrictions
1.Whether the export quota applied to refractory-grade bauxite is justified pursuant to ArticleXI:2(a) of the GATT1994
(a)The ordinary meaning of ArticleXI:2(a) of the GATT1994
(i)Prohibitions or restrictions "temporarily applied" under ArticleXI:2(a)
(ii)"Essential" products under GATT ArticleXI:2(a)
(iii)Export prohibitions or restrictions applied to "prevent or relieve a critical shortage" of essential products
(iv)Preliminary conclusions on interpretation of ArticleXI:2(a)
(b)Whether China's export quota on refractory-grade bauxite is temporarily applied to prevent or relieve a critical shortage of an essential product
(i)The parties' views on the applicability of ArticleXI:2(a) to the circumstances in China
Whether refractory-grade bauxite is an "essential" product to China
Whether a "critical shortage" of refractory-grade bauxite exists in China
Whether the export quota applied to bauxite is applied on a temporary basis
(ii)The Panel's assessment of the situation in China
(c)Summary
2.Whether the export duties and export quotas applied to refractory-grade bauxite and fluorspar are justified pursuant to ArticleXX(g) of the GATT1994
(a)Interpretation of ArticleXX(g) of the GATT1994
(i)"Relating to the conservation of exhaustible natural resources"
"Relate to conservation"
"Conservation"
(ii)"if such measures are made effective in conjunction with restrictions on domestic production or consumption"
Restrictions on domestic production or consumption
Effective in conjunction with
Requirement of even-handedness
(b)Whether export quotas applied to refractory-grade bauxite and export duties applied to fluorspar (met-spar and acid-spar) are justified pursuant to ArticleXX(g) of the GATT1994
(i)Whether China's its export quota on refractory-grade bauxite and export duty on fluorspar relate to the conservation of an exhaustible natural resource
(ii)Whether China's quota on refractory-grade bauxite and its export duty on fluorspar are made effective in conjunction with restrictions on domestic production or consumption
Are the domestic measures invoked by China restrictive on domestic production or consumption?
Are the export restrictions even-handed?
(c)Summary
3.Whether the export duties and export quotas applied to "scrap" products (magnesium scrap, manganese scrap and zinc scrap) and on EPRs (coke, magnesium metal, manganese metal and silicon carbide) are justified pursuant to ArticleXX(b) of the GATT1994
(a)Interpretation of ArticleXX(b) of the GATT1994
(i)Whether the measure falls within the range of policies designed to protect human, animal or plant life or health
(ii)The importance of the interests or values at issue
(iii)The contribution of the measure to the objective pursued
(iv)The trade restrictiveness of the measure
(v)Availability of WTO-consistent or less trade restrictive alternative measures
(b)Export restrictions on EPRs
(i)Whether the objectives of the measures are the protection of health and the environment
(ii)Whether the measures contribute materially to the goal of protecting the health of the Chinese population
Whether China has discharged its burden of proof that export restrictions on EPR products are currently making a material contribution to the stated objective
Whether China has discharged its burden of proving that export restrictions on EPRs are apt to make a material contribution to the stated objective in the future
Whether export restrictions on raw materials necessarily promote higher growth
Whether the EKC holds for China and the products at issue
(iii)Trade restrictiveness of the measure
(iv)Availability of WTO-consistent or less trade-restrictive alternative measures
Investment in more environmentally friendly technologies
Recycling of consumer goods
Increasing environmental standards
Investing in infrastructure necessary to facilitate recycling of scrap
Stimulating greater local demand for scrap without discouraging local supply
Introduction of production restrictions or pollution controls
(v)Conclusions on the necessity of the measure for EPRs
(c)Whether export duties applied to zinc scrap, magnesium scrap and manganese scrap are justified pursuant to ArticleXX(b) of the GATT1994
(i)Contribution of the measure
Whether China has discharged its burden of proof that export duties are currently making a material contribution to the stated objective
Whether China has discharged its burden of proof that export duties are apt to make a material contribution in the future to the stated objective
(ii)Availability of WTO-consistent or les trade restrictive alternative measures
(d)Conclusions on the necessity of the measure pursuant to ArticleXX(b) of the GATT1994
4.Summary of the Panel's findings on China's invocation of Articles XI:2(a), XX(b) and XX(g) of the GATT1994
5.Whether China's export quotas on certain forms of bauxite, coke, fluorspar, silicon carbide and zinc are inconsistent with Paragraph1.2 of China's Accession Protocol and Paragraphs 162 and 165 of China's Working Party Report
E.Export Quota Allocation and Administration
1.Whether requirements to demonstrate prior export performance and a minimum capital requirement to obtain a quota allocation contravenes Paragraphs 1.2, 5.1 and 5.2 of China's Accession Protocol, read in combination with Paragraphs 83 and 84 of China's Working Party Report
(a)China's "trading rights" commitments
(b)Whether China's prior export performance and minimum registered capital requirements are inconsistent with Paragraphs 1.2 and 5.1 of China's Accession Protocol, read in combination with Paragraphs 83 and 84 of China's Working Party Report.
(c)Whether China's prior export performance requirement is inconsistent with paragraph 5.2 of China's Accession Protocol and Paragraphs 84(a) and 84(b) of China's Working Party Report
(d)Summary
2.Whether China's administration of its export quotas allocated directly through the assessment of quota applicants' operation/business management capacity is inconsistent with ArticleX:3(a) of the GATT1994
(a)The requirements of ArticleX:3(a)
(i)The meaning of "administer" in ArticleX:3(a)
(ii)The meaning of "uniform", "impartial" and "reasonable"
(b)The meaning of ArticleX:3(a)
(c)The nature of the European Union's challenge
(d)Whether the operation capacity criterion applies to any of the products at issue
(i)Non-uniform, partial and unreasonable administration of the operation capacity criterion
Reasonable administration
Uniform administration
Impartial administration
(ii)Conclusion
3.Whether China's administration of its export quotas through the involvment of the CCCMC is inconsistent with ArticleX:3(a) of the GATT1994
(a)The nature of the United States' and Mexico's challenges
(b)Partial and unreasonable administration
(i)Impartial administration
(ii)Reasonable administration
(iii)Conclusion
4.Whether China's failure to publish the total amount and procedure for the allocation of zinc export quotas is inconsistent with ArticleX:1 of the GATT1994
5.Whether China's allocation of quotas on bauxite, fluorspar and silicon carbide based on the bid-winning price is inconsistent with ArticleVIII:1(a) of the GATT1994 and Paragraph11.3 of China's Accession Protocol
(a)The allocation of export quotas through a quota bidding process
(b)Whether China's allocation of quotas on bauxite, fluorspar and silicon carbide based on the bid-winning price is inconsistent with ArticleVIII:1(a) of the GATT1994
(i)The ordinary meaning of the terms "fees" or "charges" in ArticleVIII:1(a)
The meaning of the terms "fees" and "charges"
The terms "fees" and "charges" in the context of other terms in ArticleVIII and the WTOAgreement
Other interpretative elements
Preliminary conclusions: The ordinary meaning of "fees" and "charges" in ArticleVIII:1(a) of the GATT1994
(ii)Whether the bid-winning price constitutes a fee or charge within the meaning of ArticleVIII:1(a) of the GATT1994
(iii)Conclusions on the complainants' ArticleVIII:1(a) claim
(c)Whether China's allocation of quotas on bauxite, fluorspar and silicon carbide based on the bid-winning price is inconsistent with Paragraph11.3 and Annex 6 of China's Accession Protocol
(d)Summary
F.Export Licensing
1.The operation of China's export licensing system
2.Whether China's export licensing system on certain forms of bauxite, coke, fluorspar, manganese, silicon carbide and zinc is inconsistent with ArticleXI:1 of the GATT1994
(a)"Non-automatic" or "discretionary" export licensing under ArticleXI:1 of the GATT1994
(i)Import and export licensing under ArticleXI:1 of the GATT1994
(ii)Discretionary licensing requirements
(b)China's export licensing system for the forms of bauxite, coke, fluorspar, manganese, silicon carbide and zinc
(c)Summary
3.Whether China's export licensing system on certain forms of bauxite, coke, fluorspar, manganese, silicon carbide and zinc is inconsistent with Paragraph1.2 of China's Accession Protocol and Paragraphs 162 and 165 of China's Working Party Report
4.Whether China's export licensing system on certain forms of bauxite, coke, fluorspar, manganese, silicon carbide and zinc is inconsistent with paragraph 1.2 and 5.1 of China's Accession Protocol and paragraphs 83 and 84 of China's Working Party Report
G.Minimum Export Prices
1.MEP-related measures within the Panel's terms of reference
2.Whether China enforced a coordinated MEP requirement on exporters of bauxite, coke, fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc at the time of the Panel's establishment
(a)Whether the measures at issue may be subject to WTO dispute settlement
(b)Whether China requires exporters to coordinate minimum export prices on exports of bauxite, coke, fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc
(i)Whether China through the CCCMC coordinates export prices
(ii)Whether China enforces an MEP requirement through penalties imposed on exporters and licensing entities and the use of the PVC procedure
Penalties on exporters
Penalties on export licence issuing authorities
Application of the PVC export clearance process to exporters of yellow phosphorus
(c)Conclusions on whether China imposes an MEP requirement on exporters of bauxite coke, fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc
3.Whether a requirement to export at a coordinated minimum export price constitutes a restriction on exportation that is inconsistent with ArticleXI:1 of the GATT1994
4.Whether China's administration of the minimum export price requirement through the PVC procedure as it applies to yellow phosphorus is inconsistent with China's obligations under ArticleX:3(a) of the GATT1994
5.Whether China's has failed to publish measures through which China administers its alleged minimum price requirement inconsistently with China's obligations under ArticleX:1 of the GATT1994
6.Summary
VIII.Conclusions and recommendations
A.Complaint by the United States (DS394)
1.Conclusions
2.Nullification and impairment
3.Recommendations
B.Complaint by the European Union (DS395)
1.Conclusions
2.Nullification and impairment
3.Recommendations
C.Complaint by Mexico (DS398)
1.Conclusions
2.Nullification and impairment
3.Recommendations
ANNEX A
SUBMISSIONS OF THE UNITED STATES
CONTENTS / PAGEA-1 / Executive Summary of the first written submission of the United States / A-2
A-2 / Executive Summary of the opening oral statement of the complainants at the first substantive meeting / A-9
A-3 / Closing oral statement of the United States at the first substantive meeting / A-13
A-4 / Executive Summary of the second written submission of the United States / A-16
A-5 / Executive Summary of the opening oral statement of the United Statesat the second substantive meeting / A-23
A-6 / Closing oral statement of the United States at the second substantive meeting / A-27
ANNEX B
SUBMISSIONS OF THE EUROPEAN UNION
CONTENTS / PAGEB-1 / Executive Summary of the first written submission of the European Union / B-2
B-2 / Opening oral statement of the European Union at the first substantive meeting / B-6
B-3 / Closing oral statement of the European Union at the first substantive meeting / B-11
B-4 / Executive Summary of the second written submission of the European Union / B-12
B-5 / Executive Summary of the opening and closing oral statements of the European Union at the second substantive meeting / B-16
ANNEX C
SUBMISSIONS OF THE MEXICO
CONTENTS / PAGEC-1 / Executive Summary of the first written submission of Mexico / C-2
C-2 / Additional opening oral statement of Mexico at the first substantive meeting / C-9
C-3 / Closing oral statement of Mexico at the first substantive meeting / C-10
C-4 / Executive Summary of the second written submission of Mexico / C-11
C-5 / Opening oral statement of Mexicoat the second substantive meeting / C-18
C-6 / Closing oral statement of Mexicoat the second substantive meeting / C-24
ANNEX D
SUBMISSIONS OF CHINA
CONTENTS / PAGED-1 / Executive Summary of the first written submission of China / D-2
D-2 / Executive Summary of the opening oral statement of Chinaat the first substantive meeting / D-12
D-3 / Executive summary of the closing oral statement of China at the first substantive meeting / D-18
D-4 / Executive Summary of the second written submission of China / D-23
D-5 / Executive Summary of the opening oral statement of Chinaat the second substantive meeting / D-34
D-6 / Executive summary of the closing oral statement of China at the second substantive meeting / D-40
ANNEX E
SUBMISSIONS OF THE THIRD PARTIES
CONTENTS / PAGEE-1 / Executive Summary of the third party submission of Argentina / E-2
E-2 / Executive Summary of the oral statement of Brazilat the first substantive meeting / E-5
E-3 / Executive Summary of written submission and oral statement of Canada / E-7
E-4 / Third party submission of Chile / E-9
E-5 / Executive Summary of the third party submission of Colombia / E-11
E-6 / Oral statement of Ecuador at the first substantive meeting / E-14
E-7 / Oral statement of India at the first substantive meeting / E-16
E-8 / Executive Summary of written submission and oral statement of Japan / E-18
E-9 / Executive Summary of the third party submission of Korea / E-21
E-10 / Executive Summary of the third party submission of Saudi Arabia / E-24
E-11 / Executive Summary of the third party submission of Turkey / E-27
ANNEX F
PRELIMINARY RULING
CONTENTS / PAGEF-1 / First phase of Preliminary Ruling / F-2
F-2 / Second phase of Preliminary Ruling / F-13
WT/DS394/R
WT/DS395/R
WT/DS398/R
Page 1
TABLE OF WTO CASES CITED IN THESE REPORTS
Short Title / Full Case Title and CitationArgentina – Footwear (EC) / Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515
Argentina – Footwear (EC) / Panel Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body Report WT/DS121/AB/R, DSR 2000:II, 575
Argentina – Hides and Leather / Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and Import of Finished Leather, WT/DS155/R and Corr.1, adopted 16 February 2001, DSR 2001:V, 1779
Australia – Salmon / Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327
Australia – Salmon / Panel Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/R and Corr.1, adopted 6 November 1998, as modified by Appellate Body Report WT/DS18/AB/R, DSR 1998:VIII, 3407