Rare-earth lot of heated discussions of the WTO dispute settled .7 5 March, WTO Panel on EU, U.S., Mexico sued the basis of China to restrict exports of raw materials to make a ruling the case as of now, no official reports of an appeal disputing parties. Strictly that the case is not yet a rare-earth appeal (involving product failure is rare), is a Western attempt to use WTO rules to force open China's exports of rare earths "prelude." truly rare-earth appeal if staged, would be more intense.
Europe charged that China's regulation of bauxite, coke, fluorspar, manganese, magnesium, silicon carbide, silicon metal, phosphorus, zinc exports, in violation of WTO rules and the "Accession Protocol" commitment to take 40 kinds of measures to limit exports, including export taxes, allocation of export quotas, the implementation of an export license, require a minimum export prices, as well as other measures announced is not Argentina, Brazil, Canada, Chile, Colombia, Ecuador, India, Japan, Korea, Norway, China Taiwan, Turkey and Saudi Arabia to participate as third-party complaint.
Ruling, the Chinese general public opinion that China lost, someone complained about unfair decisions, but objectively speaking, this ruling does not touch the fundamental restrictions on Chinese exports, but China and Europe in the WTO arena, an interesting show, there are many wonderful for decision.
Game rules of the game
The first round of China's use of pre-emptive objection to jurisdiction
Litigation began, China has used the WTO panel's jurisdiction pre-emptive Chinese side pointed out that the prosecution did not very clearly set out China's export restrictions, some statements are vague, should not be within the jurisdiction of the Expert Group. More important that, during the proceedings, China has issued 109 export restrictions related to laws and regulations,Annual tariff quotas and permits a change, measures are being sued in 2009, 2010, has failed, the group should hear the new measures in 2010, rather than measures that have been invalidated.
Group because of this move made a difficult, has issued two preliminary ruling, the trial is no longer involved in the prosecution's presentation of products and fuzzy measures, while they refer to previous "Chile-price measures case", "EU electronic case "," U.S. stainless steel case "and concluded that if the 2010 measure, in essence, is different from the 2009 measures, the longer the trial, if there is no material difference in the continued trial.
The second round "of WTO accession protocol," tied the hands of Chinese duel
Export taxes are illegal is that both sides argue the core prosecution, said China's "accession Protocol" is an integral part of WTO rules, according to Article 11, paragraph 3:00 of the Protocol and its Annex VI, China has promised not annex no longer list of products of export taxes, and no longer raise export duties on products listed rate, if you encounter special circumstances must raise taxes or tax rate, China should advance in consultation with other countries to find a mutually acceptable solution.
Protocol can not deny the circumstances, the Chinese refer to "General Agreement on Tariffs and Trade (1994)," Article 20 of the "life and health exception" and "Environmental Protection exception" to refute this opinion in China can argue that China's basic points.
But the prosecution insisted that China "WTO Accession Protocol" has made specific commitments, excluding the two exceptions apply to China. Unfortunately, the group adopted the prosecution's view that although these two exceptions apply to prevent China terms are unfair, but "the Accession Protocol" has been agreed, can not be changed.
Expert Group found not to meet the basic spirit of WTO rules, this is a very bad beginning. "General Agreement on Tariffs and Trade (1994)," Article 20 exceptions is very useful, if in order to protect public morality, life and health, environmental protection and other emergency measures, the use of any WTO member can not comply with WTO rules, trade regulation and many member states is to a successful defense of these terms, if China in the future proceedings because the "WTO accession protocol," can not apply to these exceptions, will likely win greatly reduced.
The third round of the misuse of the burden of proof
Export quota allocation is the second core argument, involving "the General Agreement on Tariffs and Trade (1994)," Article XI, according to which, in addition to customs duties and related costs, the member states can in principle use of quotas, permits, etc. quantitative restrictions on import and export of way, but if the response to the shortage of food and other critical supplies, in order to comply with product classification rules, agricultural and fishery products to the industry to adjust, you can use quotas, licensing, and other measures to limit imports and exports if China can successfully proved that the basic raw material export restrictions in line with the article "but the book terms" (in the provisions of the general principles, while the terms of the provisions of the exceptions) one of the requirements, you can win in the allocation of quotas.
However, China misuse the burden of proof should be for the prosecution to prove that China's export restrictions in line "but the book terms" exception. The Group believes that the burden of proof on the Chinese side, the prosecution did not prove the obligation; Since China did not prove successful is lost.
Meaningful appeal
In addition to a small number of expert product (phosphorus) to exercise "economic action" principle, without trial, theFinally, the vast majority supported the prosecution's appeal, ruling against China. Some people ask, why China did not appeal it?
Far as litigation skills, we can appeal, but in real sense, the appeal of little significance.
Chinese exports of raw materials based on these restrictions, new changes every year, very flexible set of regulatory measures involving more than 100 kinds of laws and regulations and other documents, can be regulated by a variety of ways to achieve the purpose, no need to compete in the proceedings to debate to go.
Regulation on the export of products is a manifestation of national economic sovereignty, although the Panel ruled that China can not refer to "GATT" (1994) Article 20 of the "life and health exception" and "environmental exceptions" to the defense, that the Chinese people's health and who is responsible for environmental issues, the final analysis, the Chinese people themselves. litigation is only the game rules of the game, can affect the exercise of national economic sovereignty, it is difficult to play a decisive role, although in the proceedings fail, China can be other bargaining chips utilization , a package to solve the problem with Europe.
China has in the new export regulations were micro-measures in the adjustment, an appropriate increase in export quotas, European and American comfort in disguise, so as not to further aggravate the conflict, which is an effective international relations buffering. Europe is also very clear, through litigation so that China's full export release is not possible to solve the problem is not the center of the courtroom war of words, but on the negotiating table in peace and friendship.
Action on the case itself, the Chinese lost, or because the "Accession Protocol" commitment is too strict, or because of evidence problems, but based on the limited export of raw materials, the policy will not change, we can not change, Europe has not achieve the purpose of litigation. testing the waters, theEurope will not prove safety of Chinese Rare Earth exports, re-indicted, we will wait and see, but through this action, China also has a warning that if Europe and America for the export of rare earth prosecution, will certainly be more effective defense, who is winning breath.
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