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The Applicability of Environmental Protection Exceptions to WTO-Plus Obligations: In View of the China – Raw Materials and China – Rare Earths Cases

Published online by Cambridge University Press:  24 January 2014

LIU YING
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Abstract

Recently, two disputes involving China's WTO-plus obligations have attracted great attention: China – Raw Materials and China – Rare Earths. In China – Raw Materials, China resorted to WTO environmental protection exceptions to justify its violation of the export duty elimination obligation outlined in paragraph 11.3 of the Protocol on the Accession of the People's Republic of China, which is clearly a WTO-plus obligation. However, China's recourse was rejected by the panel and then by the Appellate Body, as will probably happen in China – Rare Earths. This article looks into the interpretation and finding of the applicability matter in the DSB reports in China – Raw Materials and further discusses the general applicability issue of environmental protection exceptions to the violation of WTO-plus obligations. As rebuttal to the DSB reports, this article argues that omissions or silence in paragraph 11.3 do not necessarily mean rights waiver, especially when the right involved is the essential right to justify the violation pursuant to environmental protection exceptions provided in Article XX(b) and (g) of the GATT. Also, it is illogical to refer to GATT generally when the WTO-plus obligation in paragraph 11.3 does not have any corresponding rules in GATT. More generally, with consideration of the nature of the environmental protection exceptions in Article XX and the conclusion process of the Protocol, as well as with consideration of the sustainable development objective of the WTO and the politically sensitive matters concerned in China – Raw Materials, China should not be deprived of the right to defend its violation of the export duty obligation in China – Raw Materials. Although the discussion in this article is mainly based on China's WTO-plus obligations, its reasoning may also be extensively applied to that of other acceding members if suitable.

Keywords

Chinanatural resourcesWTO-plus obligationsenvironmental protection
Type
INTERNATIONAL LAW AND PRACTICE
Information
Leiden Journal of International Law , Volume 27 , Issue 1 , March 2014 , pp. 113 - 139
Copyright
Copyright © Foundation of the Leiden Journal of International Law 2014 

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References

1 According to Article XII of the Marrakesh Agreement Establishing the World Trade Organization (the WTO Agreement) and customary practices, WTO incumbent members have broad mandate to negotiate the terms of entry with acceding members. However, as the WTO Secretariat observed, ‘Perhaps the most striking thing about WTO Article XII is its brevity. It gives no guidance on the “terms to be agreed”, these being left to negotiations between the WTO members and the applicant. Nor does it lay down any procedures to be used for negotiating these terms, these being left to the individual Working Parties to agree’; see WTO Secretariat, Technical Note on the Accession Process (Secretariat Note), WT/ACC/7/Rev.2, 1 November 2000, at 6–7. The brevity is the root of the great varieties in accession protocols and their content. For detailed discussion about China's prolonged accession process, see Bhala, R., ‘Enter the Dragon: An Essay on China's WTO Accession Saga’, (2000) 15 American University International Law Review 1469Google Scholar, at 1480–1530.

2 The Protocol consists of eleven pages of concessions, nine annexes, and is in total 103 pages, while the WPR consists of 343 paragraphs, part of which are integrated into the Protocol. Paragraph 1.2 of the Protocol clearly provides, ‘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’. Therefore, all the commitments in the Protocol and those commitments contained in the paragraphs referred to in paragraph 342 of the WPR are binding concessions and commitments on China in the same way as are those obligations in the WTO covered Agreements.

3 For example, commitments to accord national treatment to foreign investors and foreign-invested enterprises in respect of all factors and conditions of production and sales, commitments to allow special safeguard measures against Chinese textiles and clothing, commitments to allow other members to take China as a non-market economy in anti-dumping and countervailing investigations, etc.

4 The term ‘WTO-plus obligation’ is used by the WTO Secretariat in WTO official documents, e.g. Technical Note on the Accession Process; see WTO Secretariat, Secretariat Note on Accession, WT/ACC/7/Rev.2, 1 November 2000, at 6. For a detailed introduction to the major WTO-plus obligations China undertakes in the Protocol and the WPR, see Qin, J. Y., ‘“WTO-Plus” Obligations and Their Implications for the World Trade Organization Legal System: An Appraisal of the China Accession Protocol’, (2003) 37 (3)Journal of World Trade 483Google Scholar, at 491–509. Now the term ‘WTO-plus obligation’ is also widely used in academic articles.

5 WTO-minus provisions are used to describe those provisions in the Protocol which allow other WTO members to deviate from standard WTO rules and specifically cover China on certain issues, such as special safeguards, non-market economy status in anti-dumping and countervailing investigations, special quotas against textile and clothing products, and so on. Strictly speaking, WTO-minus provisions are different from WTO-plus provisions. WTO-minus provisions do not impose extra obligations on China like WTO-plus provisions do, but only put China in a less favourable position when certain rules of WTO covered agreements are applied. Therefore, the discussion of availability of environmental protection exceptions rarely relates to WTO-minus provisions, because WTO-minus rights are often made use of by other WTO members and there are no extra obligations involved. This article thus only analyses the availability issue of environmental protection exceptions in the General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services (GATS) to China's WTO-plus obligations. And if the availability issue indeed involves WTO-minus provisions in future, the reasoning and conclusions of this article can also be extended to WTO-minus provisions in the Protocol, because the nature of WTO-minus provisions and WTO-plus provisions are both specific commitments in the Protocol, separate from the GATT and the GATS.

6 Detailed information is available at www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm (visited 17 February 2013).

7 There are a number of contributory factors to this incompleteness, such as China's lack of WTO regime knowledge and negotiation capacity, asymmetrical information settings, the unpredictable effect of specific terms and commitments, unforeseen contingencies, and so on. Also see S. Schropp, Trade Policy Flexibility and Enforcement in the World Trade Organization: A Law and Economics Analysis (2009), at 1–2.

8 These words are borrowed from former US President Clinton; see ibid. The Protocol indeed contains a large number of special provisions that elaborate, expand, modify, or even deviate from rules in existing WTO covered agreements and it concerns quite a few unique and fundamental aspects of China's trade governance regime, so it is cited very frequently in cases against China. See Manjiao, C., ‘China's Participation in WTO Dispute Settlement over the Past Decade: Experiences and Impacts’, (2012) 15 (1)Journal of International Economic Law 29CrossRefGoogle Scholar, at 32.

9 China – Measures Related to the Exportation of Various Raw Materials (China – Raw Materials), DS394/395/398.

10 China – Measures Related to the Exportation of Rare Earths Tungsten, and Molybdenum (China – Rare Earths), DS431/432/433.

11 Besides Arts. VIII, VIII:1, VIII:4, X, X:1, X:3, XI, and XI:1 of the GATT 1994 and Paras. 1.2, 5.1, 5.2, 8.2, and 11.3 of the Protocol which are referred to by the complainants in China – Raw Materials, complainants in China – Rare Earths additionally refer to Art. VII of the GATT 1994 and para. 7.2 of the Protocol.

12 The term ‘Rare Earths Age’ was used by the US National Research Council due to the worldwide exponentially expanded application of rare earths on the one hand and the ensuing international trade block of rare earths on the other hand; see National Research Council, Minerals, Critical Minerals, and the U.S. Economy (2008), at 19.

13 For example, Art. XX(b) and Art. XX(g) of GATT, Art. XIV(b) of GATS, Art. XXVII of TRIPS Agreement, Art. V(2)(c) of SCM Agreements, and the preambles to TBT and SPS agreements.

14 Qin, J. Y., ‘The Challenge of Interpreting “WTO-Plus” Provisions’, (2010) 44 (1)Journal of World Trade 127Google Scholar.

15 Appellate Report China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, adopted 19 January 2010, DS363.

16 Qin, J. Y., ‘Pushing the Limits of Global Governance: Trading Rights, Censorship and WTO Jurisprudence: A Commentary on the China – Publications Case’, (2011) 10 Chinese Journal of International Law 271CrossRefGoogle Scholar.

17 Qin, J. Y., ‘The Predicament of China's “WTO-Plus” Obligation to Eliminate Export Duties: A Commentary on the China – Raw Materials Case’, (2012) 11 Chinese Journal of International Law 237CrossRefGoogle Scholar.

18 DeMedeiros, J. F., ‘Case Comment: China's Export Restraints Found to Be Inconsistent with Its Obligations as a Member of the World Trade Organization’, (2012) 35 Suffolk Transnational Law Review 203Google Scholar.

19 Keating, S. B. and Bhala, R., ‘When Are Rare Earths Raw Materials? Emerging GATT–WTO Jurisprudence on Export Restraints’, (2013) 19 (1)International Trade Law and Regulation 1Google Scholar; Matsushita, M., ‘Export Controls of Natural Resources and the WTO/GATT Disciplines, (2011) 6 Asian Journal of WTO and International Health Law and Policy 281Google Scholar.

20 Gu, B., ‘Mineral Export Restraints and Sustainable Development: Are Rare Earths Testing the WTO's Loopholes?’, (2011) 14 (4)Journal of International Economic Law 765CrossRefGoogle Scholar.

21 Jebe, R., Mayer, D., and Lee, Y., ‘China's Export Restrictions of Raw Materials and Rare Earths: A New Balance between Free Trade and Environmental Protection?’, (2012) 44 George Washington International Law Review 579Google Scholar.

22 The first Appellate Body report of the WTO made a timely proclamation for the purposes of the interpretation of WTO Agreements that the ‘general rule of interpretation (Art. 31 of the VCLT) has attained the status of a rule of customary or general international law’; see Appellate Report United States – Standards for Reformulated and Conventional Gasoline, adopted 20 May 1996, WT/DS2/AB/R, at 15–16. All of the following Panel and Appellate Body reports follow this general rule in their interpretation.

23 Not long after introducing Art. 31 into the interpretation toolkit, the Appellate Body announced in Japan – Alcohol that ‘Article 32 of the Vienna Convention, dealing with the role of supplementary means of interpretation, has also attained the same status [of customary or general international law]’, see Appellate Reports Japan – Taxes on Alcoholic Beverages, adopted 1 November 1996, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, at 9. Though not used very often, there are still cases in which the Panel and the Appellate Body use negotiation history to confirm or complement meaning resulting from the preliminary interpretation. For example, in Appellate Body United States – Import Prohibition of Certain Shrimp and Shrimp Products, adopted 6 November 1998, WT/DS58/AB/R, the Appellate Body referred to the negotiating history of Article XX to confirm its interpretation on the function of the chapeau in accordance with Article 32, at para. 157.

24 Mercurio, B. and Tyagi, M., ‘Treaty Interpretation in WTO Dispute Settlement: The Outstanding Question of the Legality of Local Working Requirements’, (2010) 19 (2)Minnesota Journal of International Law 275Google Scholar, at 298–9.

25 The introductory clause of para. 5.1 of the Protocol provides ‘without prejudice to China's right to regulate trade in a manner consistent with the WTO Agreement’. The Appellate Body interpreted this clause to mean that the justifications of Art. XX of the GATT were incorporated into para. 5.1 by way of reference and China consequently could rely on this incorporation to invoke Art. XX as a defence for a violation of para. 5.1. See Appellate Report China – Publications and Audiovisual Products, adopted 19 January 2010 WT/DS363/AB/R, at Para. 230.

26 Panel Reports China – Raw Materials, circulated 5 July 2011, WT/DS394/R, WT/DS395/R and WT/DS398/R, at para. 7.124.

27 Ibid., at para. 7.129.

28 The Appellate Body upheld almost all the reasoning of the Panel, except for the interpretation of ‘exceptional circumstances’ in Annex 6; see Appellate Reports China – Raw Materials, adopted 22 February 2012, WT/DS394/AB/R, WT/DS395/AB/R and WT/DS398/AB/R, at paras. 278–291.

29 See, China's Second Written Submission, at paras. 165–166.

30 Para. 170 provides that ‘upon accession, China would ensure that its laws and regulations relating to all fees, charges or taxes levied on imports and exports would be in full conformity with its WTO obligations, including Articles I, III:2 and 4, and XI:1 of the GATT 1994’.

31 Panel Reports China – Raw Materials, circulated 5 July 2011, WT/DS394/R, WT/DS395/R, and WT/DS398/R, at para. 7.143–5.

32 Ibid., at para. 7.146.

33 Appellate Reports China – Raw Materials, adopted 22 February 2012, WT/DS394/AB/R, WT/DS395/AB/R, and WT/DS398/AB/R, at paras. 293–298.

34 Para. 11.1 provides that ‘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’, while para. 11.2 provides 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’.

35 Panel Reports China – Raw Materials, circulated 5 July 2011, WT/DS394/R, WT/DS395/R, and WT/DS398/R, at para. 7.138.

36 Para. 11.3 deals with export duties and charges which arise exclusively from the Protocol, while paras. 11.1 and 11.2 deal with customs fees or charges and internal taxes and charges which are import measures also regulated by the GATT.

37 Appellate Reports China – Raw Materials, adopted 22 February 2012, WT/DS394/AB/R, WT/DS395/AB/R, and WT/DS398/AB/R, at para. 292.

38 China's Appellant Submission, at para. 208.

39 Appellate Reports China – Raw Materials, adopted 22 February 2012, WT/DS394/AB/R, WT/DS395/AB/R, and WT/DS398/AB/R, at para. 305.

40 United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China, DS379.

41 Art. 19.4 provides, ‘No countervailing duty shall be levied on any imported product in excess of the amount of the subsidy found to exist, calculated in terms of subsidization per unit of the subsidized and exported product’.

42 Art. 6.5 provides, ‘No product of the territory of any contracting party imported into the territory of any other contracting party shall be subject to both anti-dumping and countervailing duties to compensate for the same situation of dumping or export subsidization’.

43 Panel Report United States – Anti-Dumping and Countervailing Duties, circulated 22 October 2010, WT/DS379/R, at paras. 14.107–14.120.

44 Appellate Report United States – Anti-Dumping and Countervailing Duties, adopted 25 March 2011, WT/DS379/AB/R, at para. 567.

45 The Appellate Body cited another Appellate Body Report in this point, see Appellate Reports Canada – Certain Measures Affecting the Automotive Industry, adopted 19 June 2000, WT/DS139/AB/R, WT/DS142/AB/R, at para. 138.

46 Appellate Reports European Communities – Measures Concerning Meat and Meat Products, adopted 13 February 1998, WT/DS26/AB/R, WT/DS48/AB/R, at para. 70.

47 This interpretative reasoning to interpret limitations to sovereignty narrowly in case of doubt is traditionally called restrictive interpretation, or, more descriptively, restrictive interpretation in favour of state sovereignty; see I. Brownlie, Principles of Public International Law (2008), at 635.

48 The Panel stated, ‘it is reasonable under these circumstances to assume that, were GATT Art. XX intended to apply to Paragraph 11.3 of China's Accession Protocol, language would have been inserted to suggest this relationship’, which assumed that the omission led to the waiver of the right to have recourse to GATT Art. XX. See Panel Reports China – Raw Materials, circulated 5 July 2011, WT/DS394/R, WT/DS395/R, and WT/DS398/R, at para. 7.154.

49 See Jennings, R. and Watts, A. (eds.), Oppenheims’ International Law, Vol. 1 (1992)Google Scholar, at 1278. To further explain the application of the principle of in dubio mitius, R. Jennings and A. Watts state,

If the meaning of a term is ambiguous, that meaning is to be preferred which is less onerous to the party assuming an obligation, or which interferes less with the territorial and personal supremacy of a party, or which involves less general restrictions upon the parties.

50 R. Gardiner, Treaty Interpretation (2008), at 145.

51 Appellate Report China – Publications and Audiovisual Products, adopted 19 January 2010 WT/DS363/AB/R, at paras. 222–223. Some scholars read it as that exceptions set out in Art. XX are ‘inherently’ available to members to justify a derogation of a WTO obligation, and further arrive at the conclusion that the availability of such policy exceptions can only be contracted away by explicit treaty provisions rather than mere silence. See Pauwelyn, J., ‘Squaring Free Trade in Culture with Chinese Censorship: The WTO Appellate Body Report in China – Audiovisuals’, (2010) 11 (1)Melbourne Journal of International Law 119Google Scholar, at 128–33; Qin, supra note 16, at 293–4.

52 Similar expressions can easily be found in the Panel Reports and the Appellate Body Reports, such as Panel Reports China – Raw Materials, circulated 5 July 2011, WT/DS394/R, WT/DS395/R, and WT/DS398/R, at para. 7.138; Appellate Reports China – Raw Materials, adopted 22 February 2012, WT/DS394/AB/R, WT/DS395/AB/R and WT/DS398/AB/R, at paras. 292–298.

53 Principally, WTO members are not required to eliminate export duties. See M. Matsushita, T. J. Schoenbaum, and P. C. Mavroidis, The World Trade Organization: Law, Practice, and Policy (2006), at 593–4.

54 Typically, GATT Art. I and Art. VIII are on the application and administration of customs fees or charges, while GATT Art. III is on the application and administration of internal taxes and charges. Besides, there are still more articles related to these obligations in the GATT.

55 Appellate Reports China – Raw Materials, adopted 22 February 2012, WT/DS394/AB/R, WT/DS395/AB/R, and WT/DS398/AB/R, at para. 289.

56 Paras. 164 and 165 are mainly concerned with the export licence which is provided in Arts. VIII, XI, and XIII of the GATT.

57 See supra note 2.

58 Current WTO covered agreements do not impose the obligation of export duty elimination on members. In the Doha Round, members have also deleted export duties from non-agriculture market access negotiation. See the Negotiating Group on Market Access, ‘Fourth Revision of Draft Modalities for Non-Agricultural Market Access’, 6 December 2008, TN/MA/W/103/Rev.3, www.wto.org/english/tratop_e/markacc_e/namachairtxt_dec08_e.doc (visited 16 October 2012).

59 As the Appellate Body stated, ‘We see the obligations assumed by China in respect of trading rights, which relate to traders, and the obligations imposed on all WTO members in respect of their regulation of trade in goods, as closely intertwined’. See Appellate Report China – Publications and Audiovisual Products, adopted 19 January 2010, WT/DS363/AB/R, at para. 226.

60 Para. 80 of the WPR.

61 There is another view which takes this general reference text in para. 5.1 as a logical error. It states, ‘since State trading monopolies are permitted under the GATT, China's right to maintain such monopolies is necessarily prejudiced by its trading rights commitments’, so it is illogical to stipulate ‘without prejudice to China's right to regulate trade in a manner consistent with the WTO Agreement’. See Qin, supra note 16, at 296–7.

62 As para. 292 of the Appellate Report reads

that China's obligation to eliminate export duties arises exclusively from China's Accession Protocol, and not from the GATT 1994, we consider it reasonable to assume that, had there been a common intention to provide access to Article XX of the GATT 1994 in this respect, language to that effect would have been included in para. 11.3 or elsewhere in China's Accession Protocol.

63 Appellate Reports China – Raw Materials, adopted 22 February 2012, WT/DS394/AB/R, WT/DS395/AB/R, and WT/DS398/AB/R, at para. 305.

64 See Qin, supra note 17, at 231.

65 This inherent power stems from sovereignty, which is also affirmed by the DSB. See Appellate Report China – Publications and Audiovisual Products, adopted 19 January 2010 WT/DS363/AB/R, at para. 222.

66 The concept of ‘sustainable development’ has been generally accepted as integrating economic and social development and environmental protection. See G. Handl, ‘Sustainable Development: General Rules versus Specific Obligations’, in W. Lang (eds), Sustainable Development and International Law (1995), 35. Also see World Commission on Environment and Development, Our Common Future (1987), at 43.

67 See N. Goldstein, Globalization and Free Trade (2007), at 8–11.

68 The fourth paragraph of the preamble to Agreement Establishing the World Trade Organization.

69 The DSB reports on China – Raw Materials were adopted on 22 February 2012, while the consultation was initiated on 13 March 2012.

70 Qin, supra note 17, at 239.

71 Gu, supra note 20, at 765–8.

72 Pruzin, D., ‘WTO Director-General Appoints Panelists to Rule on China Rare Earths Complaints’, (2012) 29 International Trade ReporterGoogle Scholar, at 1584.

73 See www.cs-re.org.cn/modules.php?name=News&file=article&sid=320 (visited 19 August 2012).

74 See J. Korinek and J. Kim, ‘Export Restrictions On Strategic Raw Materials and Their Impact on Trade and Global Supply’ (2009) OECD Trade Policy Working Paper No. 95, at 19–20, www.wto.org/english/res_e/publications_e/wtr10_forum_e/wtr10_oecd2_e.pdf (visited 19 August 2012).

75 See www.mofcom.gov.cn/aarticle/ae/ah/201011/20101107247803.html (visited 19 August 2012).

76 The Ministry of Commerce of China (MOFCOM), ‘China's Rare Earths Reserve Will Be Used up in 20 Years’, news.xinhuanet.com/mil/2010–10/17/c_12668271.htm (visited 19 August 2012).

77 MOFCOM, ‘Ten Rare Metals Are Put into Consideration for Strategic Stockpiles’, www.mofcom.gov.cn/aarticle/o/dh/201011/20101107226067.html (visited 20 August 2012).

78 See United States Department of Energy, ‘Critical Materials Strategy’, www.energy.gov/news/documents/criticalmaterialsstrategy.pdf (visited 20 August 2012), at 32.

79 Many documents declare this resources conservation objective. For example, the Ministry of Land and Resources has expressly stated in its notifications that the purpose of planned mining is to conserve and to reasonably use China's superior resources.

80 The United States, once the world's leading rare-earths producer, now rarely mines rare earths, largely because of environmental and cost concerns. See ‘“Rare Earths” Fears Spur US Review’, Financial Times, www.ft.com/cms/s/0/0fdd6c48-c990–11df-b3d6–00144feab49a.html#axzz18WR9D8wL (visited 20 August 2012).

81 See business.sohu.com/20120420/n341085748.shtml (visited 20 August 2012).

82 Regulations clearly state their objective of human, animal, and plant life health protection in their preambles. See, e.g., the Circular Regarding Promotion of Sustainable and Healthy Development of Rare Earths Industries (State Council (2011)12) and the National Standards Regarding Emissions of Rare Earths Industrial Pollutants (Ministry of Environmental Protection of China (2011)5).

83 There are quite a few new legal documents and policies on domestic rare earths mining, production, and supply restrictions. See, e.g., State Council, ‘Situation and Policies of China's Rare Earth Industry’ (June 2012); Accession Requirements for Rare Earths Industry (Ministry of Industry and Information Technology (2012) 33).

84 See Jebe, Mayer, and Lee, supra note 21, at 637–8. For example, there are continuous environmental inspections on rare-earths producers, along with mineral exploitation regulating campaigns, to ensure the effectiveness of those restrictions.

85 See GATT Doc. E/PC/T/A/PV/25 (1947), at 29.

86 Qin, supra note 14, at 158.

87 About one-third of members of the WTO imposed export duties on some products, including the United States and Canada. See C. Barfield, ‘How to Address the Issue of Measures Restricting Exports of Raw Materials’, trade.ec.europa.eu/doclib/docs/2008/october/tradoc_140944.pdf (visited 27 February 2013).

88 The Appellate Report reads, ‘whether China may, in the absence of a specific claim of inconsistency with the GATT 1994, justify its measure under Article XX of the GATT 1994 must in each case depend on the relationship between the measure found to be inconsistent with China's trading rights commitments, on one hand, and China's regulation of trade in goods, on the other hand’; see Appellate Report China – Publications and Audiovisual Products, adopted 19 January 2010 WT/DS363/AB/R, at para. 229.

89 This approach is also set in China – Publications and Audiovisual Products by the Appellate Body; see Appellate Report China – Publications and Audiovisual Products, adopted 19 January 2010 WT/DS363/AB/R, at para. 230.

90 See, eg, GATT Doc. E/PC/T/A/PV/25 (1947), at 29–30; GATT Doc. E/PC/T/A/PV/30 (1947), at 6; GATT Doc. E/PC/T/C.II/QR/PV/5 (1946), at 79.

91 Discussion in its drafting meetings mainly focused on ‘raw materials’, ‘minerals’, and their products, though biological resources were also mentioned. See GATT Doc. E/PC/T/C.II/QR/PV/5 (1946), at 30, 79; GATT Doc. E/PC/T/A/SR/40(1) (1947).

92 According to this principle, nations have permanent sovereignty to freely dispose of natural resources for domestic economic development. Although a nation may voluntarily undertake international obligations to restrict the exercise of this right, just as Abi-Saab once put it, ‘sovereignty is the rule and can be exercised at any time’ and ‘limitations are the exceptions and cannot be permanent, but limited in scope and time’. See Progressive Development of the Principles and Norms of International Law Relating to the New International Economic Order, UN Doc. A/39/504/Add.I (1984).

93 See Qin, supra note 17, at 232–3.

94 Similar opinion can be found ibid., at 234–5.

95 See, e.g., the WTO Working Party Reports on the Accession of Ukraine and Russia.Ukraine promised to apply export duties only to the goods listed in Table 20(a) and to reduce export duties in accordance with the binding schedule contained in Table 20(b), with an explicit plus reference to exceptions ‘unless justified under the exceptions of the GATT 1994’. See Report of the Working Party on the Accession of Ukraine to the World Trade Organization, WT/ACC/UKR/152, at para. 40. Russia also promised to reduce its export duties according to Table 32 the Working Party on the Accession of Russia to the World Trade Organization. Russia confirmed to apply its export duty commitments ‘in conformity with the WTO Agreement’ and to administer its export tariff rate quotas ‘in a manner that is consistent with the WTO Agreement and in particular the GATT 1994 and the WTO Agreement on Import Licensing Procedures’. See Report of the Working Party on the Accession of Russia to the World Trade Organization, WT/ACC/RUS/70, at para. 638. Russia acceded to the WTO on 16 December 2011, when the China – Raw Materials case had attracted great world intention and China had already been refused recourse to environmental protection exceptions by the Panel on the ground that there was no textual reference to the GATT or the WTO Agreement.

96 See P. Van den Bossche, The Law and Policy of the World Trade Organization: Text, Cases and Materials (2005), at 77–90.

97 In China – Publications and Audiovisual Products, China defended that its restrictions on entities permitted to import publication and audiovisual products were necessary for the government to efficiently carry out its content review and censorship policy and were then necessary to protect public morals, which is one of the general exceptions provided in Article XX (a) of the GATT.

98 China – Raw Materials and China – Rare Earths both involve these sensitive areas.

99 It is clearly shown in trade policy review reports conducted by the WTO Trade Policy Review Body. See, e.g., Secretariat, Trade Policy Review Report 20 July, WT/TPR/S/264/Rev.1.

100 China has implemented all the DSB reports in which China are respondents without any further disputes about implementation, even in those cases concerning politically sensitive measures. See also Kreps, S. E. and Arend, A. C., ‘Why States Follow the Rules: Toward a Positional Theory of Adherence to International Legal Regimes’, (2006) 16 (33)Duke Journal of Comparative & International Law 331Google Scholar, at 383–6.

101 1966 International Covenant on Civil and Political Rights, Arts. 1.2 and 47; 1966 International Covenant on Economic, Social and Cultural Rights, Arts. 1.2 and 25.

102 Hsieh, P. L., ‘China's Development of International Economic Law and WTO Legal Capacity Building’, (2010) 13 (4)Journal of International Economic Law 997CrossRefGoogle Scholar, at 1031.

103 Karapinar, B., ‘China's Export Restriction Policies: Complying with “WTO Plus” or Undermining Multilateralism’, (2011) 10 (3)World Trade Review 389CrossRefGoogle Scholar, at 392–4.

104 J. Korinek and J. Kim, ‘Export Restrictions on Strategic Raw Materials and Their Impact on Trade and Global Supply’, (2009) OECD Trade Policy Working Paper No. 95, www.wto.org/english/res_e/publications_e/wtr10_forum_e/wtr10_oecd2_e.pdf (visited 22 August 2012), at 6.

105 For example, on 28 July 2012, nearly 100,000 citizens of Qidong city (subordinated to Nantong) joined the protest march against the drainage tube project of OJI Paper Group which had already been approved by Nantong municipal government to locate in Qidong.

106 China continuously introduces new measures with the purpose of environmental protection. See M. Schofield, ‘2011 Review: Environment’, (2011) 1105 Tax Journal 21, at 23.

107 For a more detailed discussion on the effect of export duties, see R. Piermartini, ‘The Role of Export Taxes in the Field of Primary Commodities’, www.wto.org/english/res_e/booksp_e/discussion_papers4_e.pdf (visited 22 August 2012).

108 All states, including WTO members, undertake the responsibility to ensure the right to health and life of their nationals and to safeguard a healthy environment in the world today, which is the background for the introduction of Article XX(b) exception. See T. Meron, The Humanization of lnternational Law (2006), at 451.

109 Sykes, A. O., ‘International Law’, in Polinsky, A. M. and Shavell, S. (eds), Handbook of Law and Economics, Vol. 1, (2007)Google Scholar, at 757–68.

110 For more analysis on the observance and breach choice, see Harvard Law Review Association Note, ‘(In)efficient Breach of International Trade Law: The State of the “Free Pass” after China's Rare Earths Export Embargo’, (2011) 125(2) Harvard Law Review 602, at 604.

111 Just as Mike Moore, the director-general of the WTO in 2001, said, ‘With China's Membership, the WTO will take a major step towards becoming a truly world organization. The near-universal acceptance of its rules-based system will serve a pivotal role in underpinning global economic cooperation’. See also Jackson, J. H., ‘The Impact of China's Accession on the WTO’, in Cass, D. Z., Williams, B. G., and Barker, G. (eds.), China and the World Trading System: Entering the New Millennium (2003)Google Scholar, at 24–5.

112 C. Tran, ‘Using GATT, Art. XX to Justify Climate Change Measures in Claims under the WTO Agreements’, (2010) 27 Environmental and Planning Law Journal 346, at 349–54.

113 It comes from Arthur Dunkel's preliminary presentation on 11 June 1992 to 1992 UNCED. See Weiss, E. B., ‘Environment and Trade Partners in Sustainable Development: A Commentary’, (1992) 86 (4)American Journal of International Law 728CrossRefGoogle Scholar, at 728.

114 In late September 2012, United Nations Conference on Trade and Development (UNCTAD) announced a new forum to meet biannually to address increasing disputes involving conflicts between global trade rules and environmental measures adopted at the national level.

115 Lamy, P., ‘The WTO's Contribution to Global Governance’, in Sampson, G. P. (eds), The WTO and Global Governance: Future Directions (2008), 42Google Scholar. An introduction of academic criticism can also be found in Jebe, R., Mayer, D., and Lee, Y., ‘China's Export Restrictions of Raw Materials and Rare Earths: A New Balance between Free Trade and Environmental Protection?’, (2012) 44 George Washington International Law Review 579Google Scholar, at 584–5.

116 P. Milkias, Developing the Global South (2010), at 136–7.

117 Draft Ministerial Declaration, 14 November 2001, WT/MIN(O1)/DEC/W/1, docsonline.wto.org/GEN_viewerwindow.asp?http://docsonline.wto.org:80/DDFDocuments/t/WT/min01/DECW1.doc (visited 26 August 2012), at para. 31.

118 Report by the Chairman of Committee on Trade and Environment in Special Session, Ambassador M. A. J. Teehankee to the Trade Negotiation Committee, 21 April 2011, TN/TE/20, docsonline.wto.org/GEN_viewerwindow.asp? http://docsonline.wto.org:80/DDFDocuments/t/tn/te/20.doc (visited 26 August 2012), at paras. 13–14.

119 Here the term ‘less-than-equal Member’ is borrowed from an article of Xiaohui Wu, see Wu, X., ‘No Longer Outside, Not Yet Equal: Rethinking China's Membership in the World Trade Organization’, (2011) 10 Chinese Journal of International Law 227CrossRefGoogle Scholar, at 239.

120 Here the word ‘sacred’ is borrowed from an article of Julia Yaqin, see Qin, supra note 17, at 234.