Thursday, March 27, 2014

Panel Finds China's Export Restrictions on Rare Earths Violate WTO

WTOYesterday, a World Trade Organization (WTO) dispute resolution panel issued its report in China - Measures Related to the Exportation of Rare Earths, Tungsten and Molybdenum (WT/DS431/R, WT/DS432/R and WT/DS433/R).  The United States brought the original complaint regarding China's export restrictions on materials that are used in the production of electronic goods.  Several other countries either joined in the consultations (Canada, the EU and Japan) or reserved their third party rights. 

China argued that its export restrictions are necessary to protect exhaustible natural resources and to reduce pollution from mining and thus fall within the exceptions to the GATT/WTO Rules contained in GATT Article XX.  Complainants disagreed, arguing that the measures were intended to protect domestic production.

The panel found that China's measures were not justified under Article XX.  Thus, it found that China had violated its obligations under the WTO.  For more details regarding the panel's findings, visit the WTO website here.

Under WTO dispute resolution procedures, China has 60 days to appeal the decision to the WTO Appellate Body.


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