TWN Info Service on WTO and Trade Issues (July11/08)
WTO ruling sets off reactions in
Beijing, 8 Jul (Chee Yoke Ling*) -- The World Trade Organisation (WTO) dispute panel ruling against China's export restraints over several raw materials used for manufacturing high technology products has triggered a spate of reactions in the country.
An official statement was posted on the website of the Ministry of Commerce and the China Mission to the WTO in Geneva issued an English version to journalists on the day of the ruling (5 July) stating its "regret" at the WTO dispute panel's decision.
It said that for the purpose of protecting the environment and exhaustible natural resources, the Chinese government in recent years has reinforced its administration on certain resource products, especially the high pollution, high-energy consuming and resource-dependent products.
The statement also noted that the panel had made
findings in favour of
[The dispute concerns
[The complainants (the
[According to the panel ruling,
[The panel said that the situation created by China's Accession Protocol provision taken in isolation may be perceived as imbalanced, but went on to say that it can find no legal basis in the Protocol or otherwise to interpret it as permitting resort to Article XX of the GATT 1994.
[Among the exceptions permitted in Article XX are trade restraining measures "necessary to protect human, animal or plant life or health" and "relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption." For details of the panel ruling, see SUNS#7185 dated 7 July 2011.]
According to a Xinhua news report (6 July), Zhao Jinping, Deputy Chief of the Division of Foreign Economics of the State Council Development Research Centre, said that the ruling not only poses tremendous challenges for China's export of primary materials, but also disturbs China's effort to reduce greenhouse gas emissions and other major pollutants, and consequently influences global environmental changes.
He said that the elimination of "backward"
production capacity inevitably reduces export of related products; this
is not "resource protectionism" as alleged by outsiders, but
is a necessary control measure that the government takes for an economic
and development paradigm shift. It is beneficial for improving environmental
Zhao also said that the EU and US cannot ask
Another comment by Professor Tu Xinquan, Deputy
Dean of the
Tu said when
Professor Zhao Zhongxiu, from the
He believes that if the Chinese government thoroughly
adjusts its rare earth-related policy, and makes sure of the consistency
between domestic and foreign policy, then it should be reasonable if
Chinese companies reduce exports based on market incentives. In the
past year, there has been considerable discussion within
In anticipation of the WTO ruling, the Wall Street Journal (WSJ) on 5 July had stated that the WTO decision will help steelmakers and other industrial producers (outside China), but, more importantly, will set a precedent for the US and the EU to file another complaint against China over its quotas on the export of rare-earth materials, 17 minerals used in the high-tech industry.
The WSJ cited US and EU trade officials as saying that the WTO victory will pave the way for a case on rare earths, and quoted EU trade commissioner Karel De Gucht's speech at a recent conference on raw materials in Brussels that the raw-materials case "will considerably strengthen the position of the European Union" for a case on rare earths.
(Rare earth minerals are necessary for many industrial
As the source of a considerable part of the world's
supplies of important minerals demanded by high technology and strategic
industries, pressures on
(* With inputs from Xu Chengcheng.) +