VII - ARTICLE XI:2(a) OF THE GATT 1994

Summary

308. We turn next to China's appeal of the Panel's finding that China had not demonstrated that its export quota on refractory-grade bauxite was “temporarily applied”, within the meaning of Article XI:2(a) of the GATT 1994, to either prevent or relieve a “critical shortage”. China alleges that the Panel erred in its interpretation and application of Article XI:2(a) of the GATT 1994, and acted inconsistently with Article 11 of the DSU.

The Panel's Findings and Arguments on Appeal

309. The Panel found that China's export quota on refractory-grade bauxite is inconsistent with Article XI:1 of the GATT 1994. China argued that this export quota is a restriction temporarily applied to prevent or relieve a critical shortage of an essential product in the sense of Article XI:2(a) of the GATT 1994 and that it therefore does not fall within the scope of Article XI:1's general prohibition of quantitative restrictions. The Panel determined, however, that China had failed to demonstrate that the export quota applied to refractory-grade bauxite is justified pursuant to Article XI:2(a).598 In reaching this conclusion, the Panel agreed with China that “refractory-grade bauxite is currently ‘essential’ to China, as that term is used in Article XI:2(a)”. The Panel found, however, that China had failed to demonstrate that the export quota was “temporarily applied” within the meaning of Article XI:2(a). The Panel also found that China had failed to demonstrate that there was a “critical shortage” of refractory-grade bauxite in China.