WTO issues panel reports on China’s rare earths exports

Yesterday, a Panel under the WTO issued the dispute panel reports in the case “China – Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum” (DS431, DS432 and DS433/R). The panel sided with the US, the EU and Japan, finding that China’s imposition of export restraints on rare earths, tungsten and molybdenum are in contravention of WTO rules. The challenged measures included export duties and export quotas along with related export quota administration requirements.

The panel found that the China’s measures are inconsistent with Paragraph 11.3 of China’s accession protocol. This obligation meant that China had to eliminate all taxes and charges applied to exports unless specified.

China’s defense attempted to justify the restrictions on the trading rights of enterprises exporting rare earths and molybdenum based on Article XX (G) exceptions relating to conservation of exhaustible natural resources.

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