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Export restrictions in Chinese–European raw materials trade to end? Conclusions from the WTO Panel Appellate Body Report in the China: Raw Materials case

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Abstract

Research objective

This article analyzes the consequences of the Dispute Settlement Body decision from February 22, 2012 in the WTO Raw Materials case approving the WTO Panel Report of July 2011 as modified by the Appellate Body Report of January 30, 2012 for future raw materials policies.

Structure

It will be examined whether the indefinite rules of WTO law in the interpretation of the underlying principles of the Panel Report and the Appellate Body Report provide a basis to oppose export restrictions effectively. The initial reaction is that China will have to revise its export policy concerning certain raw materials as a consequence of the 2012 DSB decision. However, the Reports and its remarks provide justifications and suggest that PRC export restrictions are consistent with WTO law, which could give rise for a reconsideration of export policy in Europe.

Conclusion

It will be shown that the European Commodity and Raw Materials Strategy 2011 could serve as an appropriate starting point.

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Notes

  1. WTO, Panel Report, China—measures related to the exportation of various raw materials (China—raw materials), WT/DS394R (USA); WT/DS395R (European Communities); WT/DS398R (Mexico). Strictly speaking, the report consists of three separate reports on each of the complaints (“US Panel Report”, “EU Panel Report”, and “Mexico Panel Report”). However, pursuant to a joint request of the US and Mexico, the Panel established in accordance with Article 9.1. DSU for all three complaints issued its findings in form of a single document containing three reports, with common descriptive and analytical sections, but separate conclusions and recommendations for each complaining party. The following remarks refer to the common parts of the “reports” and use as reference document WT/DS394R, WT/DS395R or WT/DS398R (in the following “the report”).

  2. Panel Report WT/DS395R, p. 277 para 8.15.

  3. WT/DS394/AB/R; WT/DS395/AB/R; WT/DS398/AB/R of 30 January 2012.

  4. WT/DS431/1; WT/DS432/1; WT/DS433/1 of 15 March 2012.

  5. Carel de Gucht, Press release, Dispute settlement Brussels, 5 July 2011.

  6. Carel de Gucht, Press release, Dispute settlement Brussels, 5 July 2011.

  7. Panel Report, WT/DS395R, summary of the key findings, p. 3.

  8. Panel Report WT/DS395R, summary of the key findings, p. 3.

  9. Approved by the Doha Ministerial Conference, WT/L/432.

  10. WT/DS395/R, pp. 276, 277 para 8.12.

  11. See Panel Report WT/DS395R, pp. 275–277 and Appellate Body Report WT/DS395/AB/R, p. EU-145. In the following only the Panel Report is referred to.

  12. See Panel Report WT/DS394R, WT/DS395R, WT/DS398R, pp. 43 ff. paras 7.64 ff.

  13. See Panel Report WT/DS394R, WT/DS395R, WT/DS398R, pp. 50 ff. paras 7.107 ff.

  14. Panel Report WT/DS394R, WT/DS395R, WT/DS398R, p. 59 para 7.159.

  15. Appellate Body Report, United States—measure affecting imports of woven wool shirts and blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, 323, p. 337.

  16. Panel Report WT/DS394R, WT/DS395R, WT/DS398R, p. 107 para 7.355.

  17. Appellate Body Report, United States—standards for reformulated and conventional gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3, p. 20.

  18. Panel Report WT/DS394R, WT/DS395R, WT/DS398R, p. 131 para 7.464.

  19. Panel Report WT/DS394R, WT/DS395R, WT/DS398R, pp. 225 ff. para 7.891 ff.

  20. i.e. the 2010 measures.

  21. Panel Report WT/DS394R, WT/DS395R, WT/DS398R, p. 132 para 7.466.

  22. Appellate Body Report, WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R, p. 143 para 361.

  23. Appellate Body Report, WT/DS394/AB/R, WT/DS395/AB/R, WT/DS398/AB/R, p. 143 para 360.

  24. Panel Report WT/DS394R, WT/DS395R, WT/DS398R, p. 162 para 7.583.

  25. Panel Report WT/DS394R, WT/DS395R, WT/DS398R, p. 164 para 7.588.

  26. See Schorkopf (2008), p. 244 who remarks that it was also directed against the anticompetitive private cartels of the 1920s and 30s.

  27. See Art. 57(f) Havana Charter. With regard to Chapter VI of the Charter on commodities see Krappel (1975), pp. 26ff.

  28. Cf. Appendix of Art. XX lit. h GATT 1994.

  29. Cf. “Principles and Objectives” of Article XXXVI in Part VI: Trade and Development.

  30. Cf. Schorkopf (2007), pp. 93 ff.

  31. Cf. Art. XX lit. h GATT 1994.

  32. Cf. IOSCO, Task Force on Commodity Futures, Report to the G20 (final report) March 2009 as well as Reports June 2010 and Nov. 2010; Hennicke et al. (2010), pp. 63 ff.

  33. European Commission, Directorate-General for Trade, Raw materials policy, 2009, annual report, para 3.

  34. European Commission, Critical raw materials for the EU, Report of the Ad-hoc Working Group on defining critical raw materials, 2010, pp. 14–23; Angerer et al. (2009), pp. 9 ff.

  35. Cf. for instance, Least-developed countries' proposal on rules of origin of 10 February 2011, http://docsonline.wto.org/GEN_highLightParent.asp?qu=&doc=D%3A%2FDDFDOCUMENTS%2FT%2FTN%2FAG%2FGEN20R1.DOC.HTM.

  36. Cf. Panel Report WT/DS394R, WT/DS395R, WT/DS398R, pp. 18–28.

  37. For the USA cf. National Research Council, Minerals, Critical Minerals and the U.S. Economy, 2008; National Research Council, Managing Materials for a Twenty-first Century Military, 2008; for Germany: Rohstoffstrategie der Bundesregierung, available on: www.bmwi.de; for France: Les métaux stratégiques, Conseil des ministres du 27 avril 2010, available on: www.gouvernement.fr/gouvernement/les-metaux-strategiques; for Finland: Finland´s Minerals Strategy, available on: www.mineraalistrategia.fi/materiaalit/fi_FI/materiaalit.

  38. Cf. Fn. 37.

  39. Communication from the Commission to the European Parliament and the Council, The raw materials initiative—meeting our critical needs for growth and jobs in Europe, COM (2008) 699/F.

  40. COM (2008) 699/F, p. 2.

  41. Curtis (2010); Gregow (2010).

  42. Curtis (2010), p. 4.

  43. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 'Tackling the Challenges in Commodity Markets and on Raw Materials', COM (2011) 25/F.

  44. Cf. Schorkopf (2007), pp. 93ff.

  45. Cf. Osteneck (2012), Art. 207 TFEU para 3. Notwithstanding the exclusive competence of the EU in general, agreements with regard to foreign direct investment will be concluded as joint agreements. Cf. Johannsen (2009); Tietje (2009).

  46. Cf. Weiss (2009), paras 5 ff.

  47. Cf. contributions to the anthology edited by Bleischwitz and Pfeil (2009), Schorkopf (2008), pp. 233 ff., Tiess (2009).

  48. Cf. concerning collapse of talks the news item on the WTO homepage, available on: www.wto.org/english/news_e/news08_e/meet08_summary_29july_e.htm.

  49. Cf. concerning the status of the Doha Development Agenda information available on the WTO homepage: www.wto.org/english/tratop_e/dda_e/dda_e.htm.

  50. Cf. concerning the rejection of the disputed ratification of the Agreements negotiated by the European Union with Central America, Colombia and Peru see the declaration signed by more than 130 Central American, Andean and European organizations, networks, and social movements; available on: http://www.weed-online.org/4643192.html.

  51. Accordingly, in the 2011 Communication of the Commission on commodity strategy it says that: “The challenge is to ensure that commodity and raw materials needs are met in a way which supports wider goals for development in source countries, environmental protection, open trade and stable markets which do not pose risks to the wider economy.”, COM (2011) 25/F, p. 20.

  52. Find in depth information in Auty (1993).

  53. Cf. WTO, Trade Liberalization as a Source of Growth, Note by the Secretariat of 28 June 2005, WT/WGTDF/W/31, paras 23 ff.; UNCTAD, Commodity Policies for Development, Background Note by the Secretariat of 8 December 2005, TD/B/COM.1/75.

  54. Cf. for more in-depth information Pelikahn (1990).

  55. Cf. Weiss (2009), paras 19 ff.

  56. Cf. Weiss (2009), para 25.

  57. Cf. Khan (1979), pp. 83 ff.; Weiss (2009), paras 23, 53.

  58. Cf. Gramlich (1987), pp. 486ff.; Hartwig (1993), pp. 307 ff.

  59. Cf. Weiss (2009), para 24.

  60. See Graf and Paschke (2011).

  61. The term has been introduced by Schorkopf (2008), pp. 255 f. in the sense of a supranational raw materials administration.

  62. Cf. regarding the mentioned principles: www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html; also Rieth (2004), pp. 151 ff.

  63. Cf. on EITI principles and criteria: http://eiti.org/eiti/principles; see also Al Faruque (2006), pp. 66 ff.

  64. Cf. IFC, Annual Report 2010, pp. 84 ff.

  65. Cf. Council Regulation (EC) No 2368/2002 of 20 December 2002, Annex I.

  66. Cf. Saecker and Timmermann (2010), § 1 EnWG paras 10 ff.

  67. On the principle of free trade policy see Osteneck (2012), Art. 207 TFEU paras 27, 36.

  68. The Commodity and Raw Materials Strategy 2011 emphasises the interdependence between of sustainable raw materials exploration and sustainable development, COM (2011) 25/F, pp. 17 ff.

  69. Cf. especially 2.2 of The Commodity and Raw Materials Strategy 2011, COM (2011) 25/F, pp. 7 f.

  70. Cf. the conclusions of the report of the trend-setting research project under the authority of the German Federal Office for Environment: “Rohstoffkonflikte nachhaltig vermeiden”, Teilberichte 1–5, 2011.

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Acknowledgments

The author expresses his appreciation to Daniel Bolm, LL.M. (Rotterdam) for the English translation of the article.

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  1. Fakultät für Rechtswissenschaft, Universität Hamburg, Schlüterstr. 28, 20146, Hamburg, Germany

    Marian Paschke

  2. Institute of Law of the Sea and Maritime Law, University of Hamburg, Hamburg, Germany

    Marian Paschke

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Paschke, M. Export restrictions in Chinese–European raw materials trade to end? Conclusions from the WTO Panel Appellate Body Report in the China: Raw Materials case. China-EU Law J 1, 97–113 (2013). https://doi.org/10.1007/s12689-012-0012-2

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