WTO preliminary ruling China's rare earth export restrictions violation quota system or the end

Abstract On March 26th, Geneva time, the World Trade Organization announced the report of the expert group on the export management measures of rare earth, tungsten and molybdenum related products of the United States, the European Union and Japan v. China, and ruled that the export management measures of the products involved in the case were illegal. Industry analysis, following nine raw material cases, I...

On March 26th, Geneva time, the World Trade Organization announced the report of the expert group on the export management measures of rare earth, tungsten and molybdenum related products of the United States, the European Union and Japan v. China, and ruled that the export management measures of the products involved in the case were illegal. According to industry analysis, following the nine kinds of raw materials cases, China's rare earth and other products export restrictions have been arbitrarily violated, which means that China's export quota system for many years may face an end.

According to the report of the expert group, China's export tariffs, export quota management measures and export performance and registered capital requirements for rare earth and molybdenum export enterprises are not in compliance with WTO regulations. The report pointed out that China's export restrictions on rare earths have not been proven to be related to the protection of natural resources, and have not been implemented alongside domestic measures to limit production or consumption.

"China is currently evaluating the report of the expert group's ruling and will properly follow up the case in accordance with the WTO dispute settlement procedures." The head of the Treaty Law Department of the Ministry of Commerce said on the 26th. On the other hand, Chen Zhanheng, deputy secretary-general of China Rare Earth Association, said in an interview that the association is now preparing to study the specific content of the ruling report and evaluate the impact of the ruling on China's rare earth industry and member companies. The next step will be based on the assessment results. Take some countermeasures.

The reporter learned that in accordance with the WTO dispute settlement practice, within 60 days of the issuance of the report of the expert group, China can appeal. After 3 to 4 months, the WTO will issue a final ruling. If the final ruling still believes that China's rare earth export restrictions violate regulations, then China must implement the WTO ruling and amend relevant export restrictions.

"At present, one of the three members of the expert group supports the Chinese proposal, and among the WTO members, there are also many developing country members who support the Chinese position. Russia as a third party also provides relevant evidence to join the negotiations to support this. Position. This is a favorable condition for the Chinese side to appeal in this case." A legal person pointed out that China should actively appeal and seek promising appeals. However, he also said that the chances of completely overthrowing the conclusions of the expert group report are small.

It is worth noting that just five years ago, China had sat in the dock of the WTO for similar cases. In 2009, the United States, the European Union, and Mexico filed control measures on nine kinds of raw materials such as Chinese bauxite, coke, and fluorite to the WTO. On January 31, 2012, the WTO issued a report dismissing China's appeal based on environmental protection or supply shortage on the preliminary ruling, and finally ruled out nine kinds of raw material export restrictions.

"In fact, when the case of material disputes was filed in Europe and the United States, there was already a layout. It was a question for the goal of rare earths." An industry insider pointed out that what really worried him was that the rare earth may be just a cut. The real purpose of the European, American and Japanese countries is to ultimately impact the export management system of China's strategic resources.

According to the "2014 Export License Management Catalogue", there are currently 22 kinds of goods subject to export quota license management in China, and there are 4 kinds of goods subject to export quota bidding, mainly covering agricultural products, coal, crude oil and other energy products, as well as a small amount of colored Metal resources. Previously, following the implementation of the WTO Raw Material Dispute Case, China has cancelled export quota measures for nine raw materials. That is to say, if the products involved in the rare earth case are to abolish the quota management, then the non-ferrous metal field in China will bid farewell to the “quota era”.

In the view of Tu Xinquan, vice president of the China WTO Research Institute of the University of International Business and Economics, this is undoubtedly a challenge to the export quota management system that China has implemented since the 1980s. The most crucial of these is that even if the dust of the rare earth case is settled, there will be other games of strategic resources. Therefore, China must be prepared at the strategic level and reflect on the current measures that may be “giving a handle”.

"In order to reverse the unfavorable situation of the WTO, China's rare earth policy has turned to the production link." A person in charge of the raw materials department of the Ministry of Industry and Information Technology told reporters. In 2012, a number of competent departments including the Ministry of Commerce, the Ministry of Environmental Protection, the Ministry of Industry and Information Technology, and the Ministry of Land and Resources began to frequently “removal” the order of rare earths. Following the State Council's publication of the first white paper on China's Rare Earth Conditions and Policies, the Ministry of Industry and Information Technology immediately launched the management of the rare earth “black industry” chain, and some rare earth mining and production enterprises that did not comply with environmental protection and industrial policies were suspended for production. The long-established rare earth group plan was also released at the beginning of the year.

"We are worried that this defeat is actually a greater degree of sanctions against China's export quota system. After this rule is formed, we will not be able to use it once we discover other rare but disorderly resources. This method is protected," said the person.

He Weiwen, a member of the China WTO Research Association, told the Economic Information Daily that the rule of the rare earth case is more meaningful than the actual one. Because in fact, the supply and demand pattern of rare earth in the international market has changed in the past two years, China’s quota is not enough, but it is not enough. Therefore, even if the rare earth quota is cancelled in the future, it will not have much impact on the market and industry. The key to the management of the rare earth industry is the domestic rectification.

He Weiwen believes that on the one hand, China should step up research on strategic deployment of strategic resource protection; on the other hand, in the face of foreign "active attack" on China's resource products, China should also actively reserve "countermeasures." "For example, it is possible to file a lawsuit against US crude oil or natural gas exports, of course, based on careful study and preparation."

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