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The applicability of GATT Article XX to China’s WTO Accession Protocol in the Appellate Body Report of the China-Raw Materials case: suggestions for a different interpretative approach

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Abstract

On 30 January 2012, the Appellate Body handed down a long awaited ruling in the dispute brought by the US, the EU and Mexico against several export restrictions imposed by China on raw materials. The three Appellate Members concluded inter alia that there is no basis in China’s Accession Protocol to allow the application of GATT Article XX to Paragraph 11.3, the WTO-plus provision of the Accession Protocol requiring Beijing to eliminate export duties. While such AB interpretative result seriously runs the risk of creating a highly controversial and irrational aspect of the multilateral trade system, also difficult to reconcile with the principle of permanent sovereignty over natural resources, the present essay proposes a different coordinated reading between Paragraph 11.3 of the China’s Accession Protocol and the GATT general exceptions’ clause, with the aim of indicating a hermeneutic outcome in harmony with the principle of sustainable development enshrined in the Preamble of the WTO Agreement.

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Notes

  1. Appellate Body Report, China—Measures Related to the Exportation of Various Raw Materials (China-Raw Materials), WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R, adopted 22 February 2012.

  2. Vienna Convention on the Law of Treaties, done at Vienna, 23 May 1969, in UNTS, Vol. 1155, p. 331.

  3. WT/L/432, Protocol on the Accession of the People’s Republic of China, 23 November 2001. Cfr. also WT/MIN(01)/3, Report of the Working Party on the Accession of China, 10 November 2001.

  4. For a comparative analysis of WTO-plus obligations concerning exports accepted by the new 25 WTO Members see Karapinar 2012, especially at pp. 15–19.

  5. Cfr. Matsushita et al. 2006, p. 11.

  6. Medvedkov 2001, at p. 48.

  7. According to such provision “[t]here shall be a General Council composed of representatives of all the Members, which shall meet as appropriate. In the intervals between meetings of the Ministerial Conference [which has to meet at least once every 2 years], its functions shall be conducted by the General Council.”.

  8. “Decisions on accession shall be taken by the Ministerial Conference. The Ministerial Conference shall approve the agreement on the terms of accession by a two-thirds majority of the Members of the WTO” (Article XII, para. 2, of the WTO Agreement). It is nevertheless to be stressed that until now all the decisions concerning accessions to the WTO have been adopted by consensus. In fact, already in a 1995 Decision, the WTO General Council clarified that the “best effort” obligation enshrined in Article IX, para. 1, of the WTO Agreement -concerning the duty to meaningfully explore the possibility to approve an act by consensus before resorting to a majority vote- is to be observed also with reference to accessions to the multilateral trade system. See Decision-Making Procedures Under Articles IX and XII of the WTO Agreement—Statement by the Chairman as Agreed by the General Council on 15 November 1995, WT/L/93, 24 November 1995.

  9. On these procedural aspects see WTO, How to Become a Member of the WTO, available at http://www.wto.org/english/thewto_e/acc_e/acces_e.htm (accessed on April 20, 2012); Stoll 2011, paragraph B.3 “Membership and Accession.”

  10. This is in sharp contrast with the previous GATT 1947. Experts observed that in the pre-WTO system accession arrangements were balanced instruments, capable of defining a set of rights and obligations for acceding countries similar to those undertaken by the incumbent GATT Members. See Curzon 1965, pp. 35–36, quoted by Charnovitz 2008, at pp. 858 and 865. During the last days of the old system, the GATT Council even identified the following principle, in order to guide both the GATT Secretariat and governments in handling the requests of applicant countries: “accession negotiations should be limited to issues related to GATT rights and obligations including market access to the applicant country or territory.” See WTO, Guide to GATT Law and Practice, Vol. 2, Article XXXIII—Accession, Geneva, 1995, pp. 1017–1029, at p. 1020.

  11. On the complex discipline of accession to the WTO and accession protocols see Cattaneo and Primo Braga 2009.

  12. See WTO Note, China’s Accession to the WTO and Its Relationship to the Chinese Taipei Accession and to Hong Kong and Macau, China, March 2001.

  13. For a complete overview of China-specific obligations under the WTO Accession Protocol see Lardy 2002, Qin 2003, Qin 2010.

  14. WT/MIN(01)/3, Report of the Working Party on the Accession of China, 10 November 2001, para. 334.

  15. See WT/L/432, Protocol on the Accession of the People’s Republic of China, 23 November 2001, Paragraph 2(C).

  16. Cfr. Paragraph 7.3 of China’s Accession Protocol: “[w]ithout prejudice to the relevant provisions of this Protocol, China shall ensure that … any other means of approval for … investment by national and sub–national authorities, is not conditioned on: whether competing domestic suppliers of such products exist; or performance requirements of any kind, such as local content, offsets, the transfer of technology, export performance or the conduct of research and development in China”; and Paragraph 203 of the Working Party Report: “[t]he allocation, permission or rights for … investment would not be conditional upon performance requirements set by national or sub-national authorities, or subject to secondary conditions covering, for example, the conduct of research, the provision of offsets or other forms of industrial compensation including specified types or volumes of business opportunities, the use of local inputs or the transfer of technology. Permission to invest … would be granted without regard to the existence of competing Chinese domestic suppliers. Consistent with its obligations under the WTO Agreement and the Draft Protocol, the freedom of contract of enterprises would be respected by China.”

  17. On this WTO-plus obligation see Crosby 2008.

  18. On the various policy objectives of export restrictions see Korinek and Kim 2011.

  19. Matsushita 2011, at p. 273.

  20. See the arguments brought by Canada in Panel Report, US—Measures Treating Export Restrictions as Subsidies (US—Export Restrictions), WT/DS194/R, adopted 29 June 2001.

  21. See China—Measures Related to the Exportation of Various Raw Materials, WT/DS394 (complaint by the United States), WT/DS395 (complaint by the European Union), and WT/DS398 (complaint by Mexico).

  22. GATT Article XX establishes, in relevant parts, that “[s]ubject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: … (b) necessary to protect human, animal or plant life or health; … (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption.” On GATT Article XX as applied in the case-law of the WTO Appellate Body see Baroncini 2010.

  23. Panel Report, China—Measures Related to the Exportation of Various Raw Materials (China-Raw Materials), WT/DS394/R and Corr.1, WT/DS395/R and Corr.1, WT/DS398/R and Corr.1, adopted 22 February 2012 as modified by Appellate Body Report (WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R), para. 7.508.

  24. Panel Report, China-Raw Materials, para. 7.364.

  25. Panel Report, China-Raw Materials, para. 7.356.

  26. Panel Report, China-Raw Materials, para. 7.158.

  27. Appellate Body Report, China-Raw Materials, para. 28.

  28. “The WTO Agreement to which China accedes shall be the WTO Agreement as rectified, amended or otherwise modified by such legal instruments as may have entered into force before the date of accession. This Protocol, which shall include the commitments referred to in paragraph 342 of the Working Party Report, shall be an integral part of the WTO Agreement.” Paragraph 1.2 of China’s Accession Protocol, emphasis added. See also the WTO Standard Accession Protocol reported in Technical Note on the Accession Process, Note by the Secretariat—Addendum, WT/ACC/10/Rev.4/Add.1, 25 May 2010, at p. 4.

  29. On these aspects see Qin 2010.

  30. Appellate Body Report, Brazil—Measures Affecting Desiccated Coconut (Brazil—Desiccated Coconut), WT/DS22/AB/R, adopted 20 March 1997, para. 38.

  31. Qin 2011, at p. 294.

  32. China—Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (China—Publications and Audiovisual Products), WT/DS363. On this dispute see, inter alia, Conconi and Pauwelyn 2011; D’Alterio 2010; Delimatsis 2011; Diebold 2007; Gao 2007; Mangin 2010; Du Ming 2010; Neuwirth 2010; Pauwelyn 2010; Piérola 2010; Qin 2011; Roessler 2011; Shi and Chen 2011; Voon 2009; Voon 2010; Wu 2010.

  33. On the factual aspects of this controversy see Panel Report, China—Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (China—Publications and Audiovisual Products), WT/DS363/R, adopted 19 January 2010 as modified by Appellate Body Report WT/DS363/AB/R, paras. 2.1.–3.3.

  34. “1. Without prejudice to China's right to regulate trade in a manner consistent with the WTO Agreement, China shall progressively liberalize the availability and scope of the right to trade, so that, within 3 years after accession, all enterprises in China shall have the right to trade in all goods throughout the customs territory of China, except for those goods listed in Annex 2A which continue to be subject to state trading in accordance with this Protocol. Such right to trade shall be the right to import and export goods. All such goods shall be accorded national treatment under Article III of the GATT 1994, especially paragraph 4 thereof, in respect of their internal sale, offering for sale, purchase, transportation, distribution or use, including their direct access to end-users. For those goods listed in Annex 2B, China shall phase out limitation on the grant of trading rights pursuant to the schedule in that Annex. China shall complete all necessary legislative procedures to implement these provisions during the transition period. 2. Except as otherwise provided for in this Protocol, all foreign individuals and enterprises, including those not invested or registered in China, shall be accorded treatment no less favourable than that accorded to enterprises in China with respect to the right to trade.” Paragraph 5 (Right To Trade) of China’s Accession Protocol.

  35. “The representative of China … confirmed that within 3 years after accession, all enterprises in China would be granted the right to trade. Foreign-invested enterprises would not be required to establish in a particular form or as a separate entity to engage in importing and exporting nor would new business licence encompassing distribution be required to engage in importing and exporting.” Paragraph 83(d) of China’s Accession Working Party Report.

  36. “The representative of China reconfirmed that China would eliminate its system of examination and approval of trading rights within 3 years after accession. At that time, China would permit all enterprises in China and foreign enterprises and individuals, including sole proprietorships of other WTO Members, to export and import all goods (except for the share of products listed in Annex 2A to the Draft Protocol reserved for importation and exportation by state trading enterprises) throughout the customs territory of China. Such right, however, did not permit importers to distribute goods within China. Providing distribution services would be done in accordance with China's Schedule of Specific Commitments under the GATS.” Paragraph 84(a) of China’s Accession Working Party Report.

  37. “With respect to the grant of trading rights to foreign enterprises and individuals, including sole proprietorships of other WTO members, the representative of China confirmed that such rights would be granted in a non-discriminatory and non-discretionary way. He further confirmed that any requirements for obtaining trading rights would be for customs and fiscal purposes only and would not constitute a barrier to trade. The representative of China emphasized that foreign enterprises and individuals with trading rights had to comply with all WTO-consistent requirements related to importing and exporting, such as those concerning import licensing, TBT and SPS, but confirmed that requirements relating to minimum capital and prior experience would not apply.” Paragraph 84(b) of China’s Accession Working Party Report.

  38. Pursuant to which “[s]ubject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: (a) necessary to protect public morals.”

  39. Appellate Body Report, China—Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (China—Publications and Audiovisual Products), WT/DS363/AB/R, adopted 19 January 2010, para. 231.

  40. Panel Report, China—Publications and Audiovisual Products, para. 4.434.

  41. Panel Report, China—Publications and Audiovisual Products, para. 4.435.

  42. Panel Report, China—Publications and Audiovisual Products, para. 7.739.

  43. Appellate Body Report, China—Publications and Audiovisual Products, para. 218.

  44. Ibid.

  45. Appellate Body Report, China—Publications and Audiovisual Products, para. 222.

  46. Ibid.

  47. Ibid.

  48. Appellate Body Report, China—Publications and Audiovisual Products, para. 223.

  49. Ibid.

  50. Appellate Body Report, China—Publications and Audiovisual Products, para. 229.

  51. Appellate Body Report, China—Publications and Audiovisual Products, para. 230.

  52. Appellate Body Report, China—Publications and Audiovisual Products, para. 233.

  53. The constant prominence reserved to the text of the provisions to interpret determined the regular reliance of WTO panels and the Appellate Body on dictionary definitions of the legal expressions to clarify. Nevertheless, recently the WTO judiciary has also underlined that “dictionaries are a ‘useful starting point’ … for the analysis of ‘ordinary meaning’ of a treaty term, but they are not necessarily dispositive. The ordinary meaning of a treaty term must be ascertained according to the particular circumstances of each case. Importantly, the ordinary meaning of a treaty term must be seen in the light of the intention of the parties ‘as expressed in the words used by them against the light of the surrounding circumstances’” (Appellate Body Report, European Communities—Customs Classification of Frozen Boneless Chicken Cuts (EC—Chicken Cuts), WT/DS269/AB/R, WT/DS 286/AB/R, adopted 27 September 2005, para. 175, emphasis added). On the textualist approach of the WTO panels and the Appellate Body see Abi-Saab (2006).

  54. MOFCOM Spokesman Talked on the WTO Ruling on China Publishing Market Access Appeal, 24 December 2009, available at http://english.mofcom.gov.cn/aarticle/newsrelease/policyreleasing/200912/20091206694156.html, accessed in May 2012.

  55. Wu (2010), at p. 428.

  56. Qin (2011), at p. 293.

  57. Pauwelyn (2010), para. IV.B.

  58. See Conconi and Pauwelyn (2011), at pp. 103 ff.

  59. Appellate Body Report, China—Publications and Audiovisual Products, para. 230.

  60. Qin (2011), at p. 294.

  61. See Paragraph 1.2 of China’s Accession Protocol and Appellate Body Report, China-Raw Materials, para. 278.

  62. Appellate Body Report, China-Raw Materials, para. 291.

  63. Appellate Body Report, China-Raw Materials, para. 284.

  64. Pursuant to which “China shall ensure that customs fees or charges applied or administered by national or sub-national authorities, shall be in conformity with the GATT 1994” (emphasis added).

  65. In this passage the Accession Protocol states that “China shall ensure that internal taxes and charges, including value-added taxes, applied or administered by national or sub-national authorities shall be in conformity with the GATT 1994” (emphasis added).

  66. Appellate Body Report, China-Raw Materials, para. 293.

  67. Ibid.

  68. Emphasis added.

  69. Paragraph 155 of China’s Accession Working Party Report.

  70. Paragraph 156 of China’s Accession Working Party Report.

  71. Appellate Body Report, China-Raw Materials, para. 299.

  72. “All exceptions under GATT 1994 shall apply, as appropriate, to the provisions of this Agreement.” Article 3 of the TRIMS Agreement, devoted to the “Exceptions” to the obligations concerning investment measures related to trade in goods.

  73. Appellate Body Report, China-Raw Materials, para. 303.

  74. Appellate Body Report, China-Raw Materials, para. 304.

  75. Appellate Body Report, China-Raw Materials, para. 306, emphasis in the original.

  76. Ibid.

  77. Ibid.

  78. Qin 2012a, at p. 10.

  79. Matsushita 2011, at p. 287.

  80. See, with reference to the applicability of GATT Article XX to the SCM Agreement, Howse 2010, at p. 17.

  81. Emphasis added.

  82. Appellate Body Report, China-Raw Materials, footnote 558. On the GATT modifications of Schedules see Hoda 2001, pp. 11 ff.; and, with reference also to GATS Schedules cfr. Van den Bossche 2008, pp. 401–428, and 490–493. The presentation of the discipline concerning the Schedules of WTO Members is also relevant to have a clear picture of these very technical multilateral trade aspects: see Current Situation of Schedules of WTO Members, available at http://www.wto.org/english/tratop_e/schedules_e/goods_schedules_table_e.htm, accessed in May 2012.

  83. “The CONTRACTING PARTIES may, at any time, in special circumstances, authorize … a contracting party to enter into negotiations for modification or withdrawal of a concession included in the appropriate Schedule annexed to this Agreement.” GATT Article XXVIII:4.

  84. “On the first day of each three-year period, the first period beginning on 1 January 1958 (or on the first day of any other period … that may be specified by the CONTRACTING PARTIES by two-thirds of the votes cast) a contracting party (hereafter in this Article referred to as the ‘applicant contracting party’) may, by negotiation and agreement with any contracting party with which such concession was initially negotiated and with any other contracting party determined by the CONTRACTING PARTIES to have a principal supplying interest … (which two preceding categories of contracting parties, together with the applicant contracting party, are in this Article hereinafter referred to as the ‘contracting parties primarily concerned’), and subject to consultation with any other contracting party determined by the CONTRACTING PARTIES to have a substantial interest … in such concession, modify or withdraw a concession … included in the appropriate schedule annexed to this Agreement.” GATT Article XXVIII:1.

  85. Currently, while paragraph 4 of GATT Article XXVIII has been maintained, WTO Members prefer to modify their Schedules under paragraph 5 of the same provision, allowing more relaxed conditions for changing their Schedules’ commitments provided they make an ad hoc reservation in this sense, and are ready to accept mirroring initiatives by those WTO Members with which they initially negotiated the concessions they intend to change.

  86. See the statement of the Representative of the United Kingdom reported in GATT/IC/SR.40, Intersessional Committee—Summary Record of the Meeting Held at the Palais des Nations, Geneva, on 9 and 10 July 1958, 21 July 1958, at p. 4.

  87. Ibid.

  88. See the statement of the Representative of Australia reported in GATT/IC/SR.47, Intersessional Committee—Summary Record of the Meeting Held at the Palais des Nations, Geneva, on 20 April 1960 (Subject Discussed: Article XXVIII:4—Requests by Australia (GATT/AIR/190(SECRET) and GATT/AIR/191(SECRET)), 29 April 1960, at p. 1. On the GATT 1947 practice concerning Article XXVIII:4 renegotiations see also GATT/IC/SR.25, Intersessional Committee—Summary Record of the Meeting Held at the Palais des Nations, Geneva, 9 May 1956 (Subjects Discussed: 1. Request by the United Kingdom for Authority to Renegotiate Four Items in Schedules XIX; 2. Request by the United States for Authority to Renegotiate One Item in Schedule XX), 22 May 1956; GATT/IC/SR.40, Intersessional Committee—Summary Record of the Meeting Held at the Palais des Nations, Geneva, on 9 and 10 July 1958 (Subjects Discussed: Requests by Australia and the United States for Authority to Enter inyo Re-negotiations), 21 July 1958; GATT/IC/SR.43, Intersessional Committee—Summary Record of the Meeting Held at the Palais des Nations, Geneva, on 11 February 1959, 17 February 1959; GATT/IC/SR.46, Intersessional Committee—Summary Record of the Meeting Held at the Palais des Nations, Geneva, on 14 March 1960 (Subject Discussed: Article XXVIII:4—Request by Australia (GATT/AIR/182 (SECRET)), 22 March 1960; GATT/IC/SR.48, Intersessional Committee—Summary Record of the Meeting Held at the Palais des Nations, Geneva, on 26 April 1960 (Subject Discussed: Article XXVIII:4—Request by Australia (GATT/AIR/193 (SECRET)), 6 May 1960; GATT/C/M/2, Minutes of Special Meeting Held at the Palais des Nations, Geneva on Thursday, 5 January 1961 (Subjects Discussed: 1. United States Request for Authority to Renegotiate under Article XXVIII:4; 2. Canadian Request for Authority to Renegotiate under Article XXVIII:4), 16 January 1961; GATT/C/M/22, Minutes of Meeting Held at the Palais des Nations, Geneva, on 25 September 1964 (Subjects Discussed: 1. Australian Schedule—Request under Article XXVIII:4; 2. New Zealand Schedule—Request under Article XXVIII:4), 12 October 1964; GATT/L/6326, Article XXVIII:4 Renegotiations—Schedules LXXXI—Morocco, 22 April 1988.

  89. It is remarked here that the procedures for renegotiations under Article XXVIII of the GATT 1994 are still those adopted in 1980 under the GATT 1947 system. See GATT/C/113, Procedures for Negotiations under Article XXVIII—Guidelines Proposed by the Committee on Tariff Concessions, GATT Council 10 November 1980, and GATT/C/113/Corr.1, Procedures for Negotiations under Article XXVIII—Guidelines Proposed by the Committee on Tariff Concessions–Corrigendum, GATT Council 10 November 1980.

  90. The confidentiality still distinguishing contemporary modifications and/or withdrawals under GATT Article XXVIII has to be likewise respected. See Sect. 1 of the 1980 Procedures for Negotiations under Article XXVIII (GATT/C/113): “[a] contracting party intending to negotiate for the modification or withdrawal of concessions in accordance with the procedures of Article XXVIII, paragraph 1 -which are also applicable to negotiations under paragraph 5 of that Article- should transmit a notification to that effect to the secretariat which will distribute the notification to all other contracting parties in a secret document … In the case of negotiations under paragraph 4 of Article XXVIII the request for authority to enter into negotiations should be transmitted to the secretariat to be circulated in a secret document and included in the agenda of the next meeting of the Council” (emphasis added).

  91. See Gardiner 2008, at pp. 147 ff.

  92. Dörr 2012a, at p. 548.

  93. See Villiger 2011, at p. 109.

  94. See Qin 2012b, at p. 6.

  95. Appellate Body Report, Argentina—Safeguard Measures on Imports of Footwear (Argentina—Footwear (EC)), WT/DS121/AB/R, adopted 12 January 2000, para. 88.

  96. Appellate Body Report, Argentina—Footwear (EC), para. 81.

  97. Appellate Body Report, China-Raw Materials, para. 293, emphasis added.

  98. See Qin 2012b, at p. 6, emphasis added.

  99. Appellate Body Report, United States—Continued Existence and Application of Zeroing Methodology (US—Continued Zeroing), WT/DS350/AB/R, adopted 19 February 2009, para. 268; see also para. 273.

  100. On the interpretation of silence in the WTO Agreements see Van Damme 2009, pp. 110 ff.

  101. Appellate Body Report, United States—Restrictions on Imports of Cotton and Man-made Fibre Underwear (US—Underwear), WT/DS24/AB/R, adopted 25 February 1997, para. 42.

  102. Appellate Body Report, United States—Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany (US—Carbon Steel), WT/DS213/AB/R and Corr.1, adopted 19 December 2002, para. 65.

  103. Brown v. Stott [2003] 1 AC 681 at 703 (UK, Privy Council), quoted by Gardiner 2008, at p. 147, and Qin 2012b, at pp. 5–6.

  104. For this aspect see also Schloemann 2011.

  105. See the Preamble of the WTO Agreement.

  106. The WTO Appellate Body has defined sustainable development as a concept that “has been generally accepted as integrating economic and social development and environmental protection” (Appellate Body Report, United States—Import Prohibition of Certain Shrimp and Shrimp Products (US—Shrimp), WT/DS58/AB/R, adopted 6 November 1998, footnote 107). For another very effective description of the tridimensional character of sustainable development see the formula expressed at paragraph 6 of the Copenhagen Declaration on Social Development, adopted at the 1995 World Summit for Social Development: “[w]e are deeply convinced that economic development, social development and environmental protection are interdependent and mutually reinforcing components of sustainable development, which is the framework for our efforts to achieve a higher quality of life for all people” (Copenhagen Declaration on Social Development, available at http://actrav.itcilo.org/actrav-english/telearn/global/ilo/law/wssd.htm, accessed on April 2012). Finally, attention should be reserved to what stated by the International Law Association (ILA) in the New Delhi Declaration on sustainable development, where such Association has expressed “the view that the objective of sustainable development involves a comprehensive and integrated approach to economic, social and political processes, which aims at the sustainable use of natural resources of the Earth and the protection of the environment on which nature and human life as well as social and economic development depend and which seeks to realize the right of all human beings to an adequate living standard on the basis of their active, free and meaningful participation in development and in the fair distribution of benefits resulting therefrom, with due regard to the needs and interests of future generations” (ILA New Delhi Declaration of Principles of International Law Relating to Sustainable Development, 2 April 2001, in International Environmental Agreements: Politics, Law and Economics, 2002, pp. 211–216, at p. 212). On the principle of sustainable development see in the doctrine Beyerlin 2009; Cosbey 2009; Francioni 2007; Sampson 2005; Sampson 2008; Schrijver 2007; Van Calster 2008.

  107. On this principle cfr. Schrijver 2008; Zambrano 2009. The customary nature of the principle of permanent sovereignty over natural resources has also been asserted by the International Court of Justice: see ICJ, Case Concerning Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Uganda), Judgment of 19 December 2005, in ICJ Reports, 2005, p. 168, para. 244.

  108. On the principle of systemic integration and the Vienna Convention on the law of Treaties see, inter alia, French 2006; Linderfalk 2008; McLachlan 2005.

  109. “International law is a legal system. Its rules and principles (i.e. its norms) act in relation to and should be interpreted against the background of other rules and principles. As a legal system, international law is not a random collection of such norms.” A/CN/.4/L.702, Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law (Conclusions), Report of the Study Group of the International Law Commission, 18 July 2006, para. 1.

  110. Villiger 2005. For a further analysis on the application of the principle of systemic integration in the ECHR system see Karl 2011, at pp. 356 ff.

  111. On the interpretation of WTO Agreements against the background of other international law see Van Damme 2009, at pp. 355 ff. See also the considerations expressed by the Study Group of the International Law Commission on the fragmentation of international law with specific reference to WTO adjudicators: “when elucidating the content of the relevant rights and obligations, WTO bodies must situate those rights and obligations within the overall context of general international law (including the relevant environmental and human rights treaties).” In fact, while it is true that “[t]he jurisdiction of most international tribunals is limited to particular types of disputes or disputes arising under particular treaties (…) [a] limited jurisdiction does not, however, imply a limitation of the scope of the law applicable in the interpretation and application of those treaties,” with the consequence that “WTO covered treaties are creations of and constantly interact with other norms of international law.” A/CN.4/L.682, Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law, Report of the Study Group of the International Law Commission, Finalized by Martti Koskenniemi, 13 April 2006, paras. 170 and 45.

  112. UN General Assembly, Right to Exploit Freely Natural Wealth and Resources, 21 December 1952, A/RES/626.

  113. UN General Assembly, Permanent Sovereignty Over Natural Resources, 14 December 1962, A/RES/1803, para. 1.

  114. UN General Assembly, Declaration on the Establishment of a New International Economic Order, 1 May 1974, A/RES/S-6/3201, para. 4(e).

  115. See Articles 1.2 of the UN Covenant on Civil and Political Rights and of the UN Covenant on Economic, Social and Cultural Rights.

  116. See UN General Assembly, Charter of Economic Rights and Duties of States, 12 December 1974, A/RES/29/3281, Article 7.

  117. For the consequences of international agreements and soft law documents regarding conservation, preservation and sustainability issues on the principle of permanent sovereignty over natural resources see Beyerlin and Holzer 2009.

  118. See UN General Assembly, Permanent Sovereignty Over Natural Resources, 14 December 1962, A/RES/1803, para. 11 of the Preamble; UN General Assembly, Declaration on the Establishment of a New International Economic Order, 1 May 1974, A/RES/S-6/3201, para. 4(e); UN General Assembly, Charter of Economic Rights and Duties of States, 12 December 1974, A/RES/29/3281, Article 1.

  119. See Schrijver 1997, at p. 264.

  120. To use the words of George Abi-Saab, former member of the Appellate Body, “sovereignty is the rule and can be exercised at any time … limitations are the exception and cannot be permanent, but limited in scope and time.” Abi-Saab 1984, quoted in Schrijver 1997, at p. 263.

  121. On this provision of the 1969 Vienna Convention on the Law of Treaties see Le Bouthillier 2011; Dörr 2012b; Linderfalk 2007, at pp. 235 ff.; Sbolci 2011; Villiger 2009a, at pp. 125 ff; Villiger 2011.

  122. Qin 2010, at p. 140.

  123. Villiger 2009b, at p. 445.

  124. Sinclair 1984, at p. 141.

  125. Qin 2012b, at p. 8.

  126. Document A/5809, Report of the International Law Commission Covering the Work of its Sixteenth Session, 11 May–24 July 1964, in YILC, 1964, vol. II, at p. 204; Document A/CN.4/186 and Add.1–7, Sixth Report on the Law of Treaties, by Sir Humphrey Waldock, Special Rapporteur, in YILC, 1966, Vol. II, p. 98.

  127. Yassen 1976, at pp. 52 and 80.

  128. Starting from 2005, there are official WTO records documenting the thorny interpretative issue of the applicability of GATT Article XX to China’s Accession Protocol. For instance, within the WTO Committee on Market Access and in front of the WTO Council for trade in goods, the United States asked China to explain how Beijing intended to have recourse to GATT Article XX, as the Chinese representative claimed that Zhōngguó had the right to restrict the importation or exportation of products to protect public morals, public interest and national security, quoting the general exceptions clause of the General Agreement. See G/MA/W/78, Committee on Market Access, China's Transitional Review Mechanism—Communication from the United States, 15 September 2006, para. 1; G/C/W/560, Transitional Review Mechanism Pursuant to Paragraph 18 of the Protocol on the Accession of the People's Republic of China (“China”)—Questions From the United States to China, 6 November 2006, para. 4.

  129. “The representative of Viet Nam confirmed that Viet Nam would apply export duties, export fees and charges, as well as internal regulations and taxes applied on or in connection with exportation in conformity with the GATT 1994” (WT/ACC/VNM/48, Accession of Viet Nam—Report of the Working Party on the Accession of Viet Nam, 27 October 2006, para. 260); “[t]he representative of Ukraine confirmed that … Ukraine would reduce export duties in accordance with the binding schedule contained in Table 20(b). He also confirmed that, as regards these products, Ukraine would not increase export duties, nor apply other measures having an equivalent effect, unless justified under the exceptions of the GATT 1994” (WT/ACC/UKR/152, Report of the Working Party on the Accession of Ukraine to the World Trade Organization, 25 January 2008, para. 240); “[t]he Russian Federation undertakes not to increase export duties, or to reduce or to eliminate them, in accordance with the following schedule, and not to reintroduce or increase them beyond the levels indicated in this schedule, except in accordance with the provisions with GATT 1994” (GATT Schedule CLXV, The Russian Federation, Introductory Note).

  130. Xinhua News et al. 2012.

  131. See Qin 2012a, at p. 28, footnote 135, reporting the press release BNA WTO Reporter, U.S., EU and Mexico Urge China to Lift Export Restrictions in Wake of WTO Ruling, 23 February 2012.

  132. Panel Reports, China-Raw Materials, para. 7.161.

  133. Harris 2012.

  134. Statement of the Chinese Representative at the DSB reported in WTO News Items, DISPUTE SETTLEMENT—Panel Set Up in Steel Case, Reports Adopted on Raw Materials, Footwear and Plastic Bags, 22 February 2012.

  135. China—Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum—Request for consultations by the United States, WT/DS431/1, 15 March 2012; China—Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum—Request for consultations by the European Union, 15 March 2012, WT/DS432/1; China—Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum—Request for consultations by Japan, WT/DS433/1, 15 March 2012. See EU Press Release, EU Challenges China’s Rare Earth Export Restrictions, 13 March 2012.

  136. The reported episode is just one of the many frictions within the dispute between Tokyo and Beijing on the sovereignty over the Diaoyu/Senkaku islands (the Chinese call the islands Diaoyu, while the Japanese use the name Senkaku). On the diplomatic incident of September 2010 see Zhu 2011, at 434–435; Note 2011. More generally, on the territorial dispute between China and Japan on the Diaoyu/Senkaku Islands see Ramos-Mrosovsky 2008.

  137. Japan alone accounts for 50 % of China exports of rare earth elements (REE). For a complete overview of the economic, policy and legal aspects of the rare earths issue see Gu 2011.

  138. Times Topics—Rare Earths, The New York Times, 13 March 2012.

  139. See Bradsher and Clifford 2011; WTO Suit Won’t End China’s Rare Earth Monopoly - Interview to Jeffery Green, The Critical Metals Report, 17 April 2012, available at http://www.theaureport.com/pub/na/13106, accessed on May 2012.

  140. As provided for by Article 3.7 of the DSU, pursuant to which “[t]he aim of the dispute settlement mechanism is to secure a positive solution to a dispute. A solution mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be preferred.” On the importance of diplomatic settlements of WTO controversies see Baroncini 1999.

  141. See the Preamble of the WTO Agreement.

  142. Gu 2011, at 798 ff.

  143. Each WTO Member has to draft and annex to the GATT a Schedule which, up to now, has been composed of four parts: Part I is dedicated to concessions on goods under the most-favoured-nation clause, Part II lists the preferential concessions, Part III records the concessions on non-tariff measures, and Part IV concerns the specific commitments made during the Uruguay Round on domestic support and export subsidies on agricultural products. See Hoda 2001, at 19.

  144. See Qin 2012a, Part IV “Road to Reform.”.

  145. GATT Schedule CLXV—The Russian Federation, Part V—Export Duties, Opening Statement.

  146. With specific reference to rare earths, China owns approximately 37 % of world reserves, while exporting between 95 and 97 % of global supply. Bradsher 2010.

  147. Mattoo and Subramanian 2011, Table 5 and Fig. 5, at 39–40.

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    Elisa Baroncini

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The present essay has been realized within the research project “The Legal Framework of Environmental Protection: EU and China in a Global Perspective,” financed by the China-EU School of Law (Beijing, China), under the direction of Prof. Marina Timoteo. The author is grateful to Professor Joanna Gomula, for her insights and comments, as well as to Wang Lebing, Ph.D. student at the University of Bologna under a cooperation project with the China University of Political Science and Law (CUPL), for his suggestions on Chinese language in the final paragraph of this article.

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Baroncini, E. The applicability of GATT Article XX to China’s WTO Accession Protocol in the Appellate Body Report of the China-Raw Materials case: suggestions for a different interpretative approach. China-EU Law J 1, 1–34 (2013). https://doi.org/10.1007/s12689-012-0010-4

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