China—Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum
World Trade Organization
WT/DS/421/R, WT/DS/422R, WT/DS/423R (26 March 2014), WT/DS/421/AB/R, WT/DS/422/AB/R, WT/DS/423/AB/R (7 August 2014)
- Written by Eric Miller, JD
Facts
China (defendant) produced the vast majority of the world’s rare earths, which were necessary for the manufacture of various modern technological products. China imposed restrictions on the export of rare earths, including tungsten. The European Union, the United States, and Japan (the complaining states) (plaintiffs) brought a complaint to the World Trade Organization (WTO), arguing that the restrictions enabled domestic Chinese companies to obtain rare earths at lower prices and manufacture rare-earth-containing products at lower prices than were possible for foreign manufacturers. The complaining states argued that this constituted a violation of an accession protocol under which China had agreed to eliminate export duties. China countered that the General Agreement on Tariffs and Trade (GATT) enabled it to take steps for the protection of human health, which applied to restrictions involving rare earths because rare-earth mining caused dangerous levels of pollution. The WTO dispute-resolution panel found that the GATT did not permit China to enact export restrictions that violated the nation’s free-trade commitments. China appealed to the WTO Appellate Body.
Rule of Law
Issue
Holding and Reasoning ()
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