WT/DS432/9  
WT/DS433/9  
 
30 April 2014  
(14-2646)  Page: 1/3  
  Original: English  
 
 CHINA – MEASURES RELATED TO THE EXPORTATION OF  
RARE EARTHS, TUNGSTEN, AND MOLYBDENUM  
NOTIFICATION OF AN APPEAL BY CHINA 
UNDER ARTICLE 16.4 AND ARTICLE 17 OF THE UNDERSTANDING ON RULES 
AND PROCEDURES GOVERNING THE SE TTLEMENT OF DISPUTES (DSU),  
AND UNDER RULE 20(1) OF THE WORKING PROCEDURES FOR APPELLATE REVIEW 
The following notification, dated 25 April 2014, from  the Delegation of the People's Republic of 
China, is being circulated to Members. 
_______________ 
 
1. Pursuant to Articles 16.4 and 17 of the Understanding on Rules and Procedures Governing 
the Settlement of Disputes  ("DSU") and Rule 20 of the Working Procedures for Appellate Review 
(WT/AB/WP/6, 16 August 2010) (" Working Procedures "), the People's Republic of China ("China") 
hereby notifies the Dispute Settlement Body ("DSB") of its decision to appeal certain issues of law 
and legal interpretations in the Panel Reports in China – Measures Related to the Exportation of 
Rare Earths, Tungsten, and Molybdenum  (WT/DS432, WT/DS433 ) ("Panel Reports"). 
I. APPEAL OF THE PANEL'S INTERPRE TATION OF ARTICLE XII:1 OF THE MARRAKESH 
AGREEMENT ESTABLISHING TH E WORLD TRADE ORGANIZATION , READ IN 
CONJUNCTION WITH PARAGRAPH 1.2,  SECOND SENTENCE, OF CHINA'S ACCESSION 
PROTOCOL  
2. China seeks review by the Appellate Body of the Panel's interpretation of Article XII:1 of the 
Marrakesh Agreement Establishing the World Trade Organization (the " Marrakesh Agreement "), 
read in conjunction with the second sentence of Paragraph 1.2 of China's Accession  Protocol .1  
3. The Panel's interpretation is in error, inter alia , because: 
 the Panel failed to give effective meaning to the second sentence of Article XII:1 which 
does not merely prescribe that newly acceding Members may not pick and choose among 
the various covered agreements but have to accept the WTO legal framework as a single 
undertaking; 
 the Panel failed properly to read Article XII:1 of the Marrakesh Agreement  together with 
the second sentence of Paragraph 1.2 of China's Accession Protocol ; 
 the Panel erred in interpreting the terms contained in the second sentence of 
Paragraph 1.2 of China's Accession Protocol ; 
 the Panel unduly found that the words "shall be an integral part of the WTO Agreement" 
in the second sentence of Paragraph 1.2 of China's Accession Protocol  leads to the 
conclusion that China's Accession Protocol  i s  t h e r e b y  m a d e  a n  i n t e g r a l  p a r t  o f  t h e  
Marrakesh Agreement  excluding  the multilateral trade agreements annexed thereto. 
4. Accordingly, China requests that the Appellate Body reverse the Panel's findings in 
paragraphs 7.80, 7.89 and 7.93 of the Panel Reports in this regard. 
                                               
1 The relevant analysis by the Panel is contai ned in paras. 7.73-7.93 of the Panel Reports. WT/DS432/9 • WT/DS433/9 
 
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  II. APPEAL OF THE PANEL'S FINDINGS THAT CHINA'S EXPORT QUOTAS ON RARE 
EARTHS AND TUNGSTEN DO NOT "RELAT[E] TO" CONSERVATION UNDER ARTICLE XX(G) OF THE GATT 1994 
5. China seeks review by the Appellate Body of th e Panel's findings and conclusions that export 
quotas for rare earths and tungsten do not "relat[e]" to conservation within the meaning of 
subparagraph (g) to Article XX of the GATT 1994 beca use they send a perverse signal to domestic 
users.
2  
6. The Panel's findings are based on errors in the interpretation and application of the "relating 
to" element of subparagraph(g) of Article XX, inter alia , because the Panel: 
 focused on the design structure and archit ecture of China's export quotas to the 
exclusion of evidence regarding the operation of the export quotas together with other 
elements of China's comprehensive conserva tion policy, in circumstances where China 
submitted substantial evidence on the operation of the conservation programme in the marketplace; and 
 required China to show that there is no risk that perverse signals to domestic users might 
offset the positive effect of conser vation signals to foreign users.  
7. In addition, China submits that the Panel acted inconsistently with Article 11 of the DSU in 
relation to these issues by failing to make an objective assessment of the matter, including an 
objective assessment of the facts relating to the existence of "perverse signals" and through providing incoherent reasoning. 
8. Accordingly, China requests the Appellate Body to reverse the Panel's interpretation in 
paragraphs 7.279-7.293 to the extent that this inte rpretation required the Panel to examine solely 
the structure and design of China's export quotas, as well as the Panel's failure to apply the proper 
legal standard and make an objective assessment in paragraphs 7.444, 7.446-7.448, 7.541-7.542, 
7.604, 7.725 and 7.731 of the Panel Reports.  
9. To the extent that these errors taint the Panel's conclusions, in paragraphs 7.600-7.614, 
7.810-7.820, 8.2(c), 8.7(c) and 8.12(c) of the Panel Reports, that China's export quotas on rare 
earths and tungsten cannot be provisionally justified under subparagraph (g) of Article XX of the 
GATT 1994, China requests the Appellate Body also to reverse these findings of the Panel.  
III. APPEAL OF THE PANEL'S FINDINGS TH AT CHINA'S EXPORT QUOTAS ON RARE 
EARTHS, TUNGSTEN AND MOLYBDENUM ARE NOT "MADE EFFECTIVE IN CONJUNCTION 
WITH" DOMESTIC RESTRICTIONS UNDER ARTICLE XX(G) OF THE GATT 1994 
10. China seeks review by the Appellate Body of the Panel's findings and conclusions that 
China's export quotas on rare earths, tungsten and molybdenum are not "made effective in 
conjunction with" domestic restrictions within the meaning of subparagraph (g) of Article XX of the 
GATT 1994.3 
11. The Panel's findings are based on errors in the interpretation and application of the "made 
effective in conjunction with" domestic restrictions element of subparagraph (g) of Article XX 
because the Panel erroneously in terpreted and applied the term "made effective in conjunction 
with" domestic restrictions to mean that the Panel was: 
                                               
2 The relevant Panel findings are contained, inter alia , in Panel Reports, paras. 7.279-7.293, 7.444, 
7.446-7.448, 7.541-7.542, 7.604, 7.725, 7.731. The relevant Panel conclusions are contained, inter alia , in 
Panel Reports, paras. 7.600-7.614, 7.810-7.820, 8.2(c), 8.7(c) and 8.12(c). 
3 The relevant Panel findings are contained, inter alia , in Panel Reports, paras. 7.301, 7.314-7.337, 
7.568 -7.599, 7.792-7.809, and 7.919-7.935. The relevant Pa nel conclusions are contained in Panel Reports, 
paras. 7.600-7.614, 7.810-7.820, 7.936-7.944, 8.2(c), 8.7(c) and 8.12(c). WT/DS432/9 • WT/DS433/9 
 
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   required to engage in a separate and distinct enquiry to determine whether, and find 
that, China "distributes the burden of conservation-related measures between domestic and foreign consumers in a balanced way";
4 "counterbalance[ed]"5 the restrictions on 
domestic and foreign users; or achieved "substantive complementarity"6 between foreign 
and domestic restrictions; and  
 confined to assessing the "objective structure, design and architecture"7 of China's 
regulatory system of conservation measures and it was precluded from having regard to 
"the actual effects which a regulatory system has in the market place",8 in circumstances 
where China submitted substantial evidence  on the operation of the conservation 
programme in the marketplace. 
12. In addition, China submits that the Panel acted inconsistently with Article 11 of the DSU in 
relation to these issues by failing to make an objective assessment of the matter, including an 
objective assessment of the facts, through its lack of objectivity in the treatment of evidence it 
considered relevant; through its inconsistent reasoning in finding that none of the domestic 
measures advanced by China amounts to a "domestic restriction"; and by relying on inconsistent 
reasoning as well as a double standard of proof in comparing the relative burden of China's restrictions on foreign and domestic users. 
13. Accordingly, China requests that the Appellate  Body reverse the Panel's interpretation in 
paragraphs 7.301 and 7.314-7.337 with respect to the Panel's additional enquiry regarding the 
relative burdens borne by domestic and foreign interests under relevant conservation measures, as well as the Panel's failure to apply the proper legal standard and make an objective assessment in 
paragraphs 7.568-7.599, 7.792-7.809, and 7.919-7.935 of the Panel Reports. 
14. To the extent that these errors taint the Panel's conclusions, in paragraphs 7.600-7.614, 
7.810-7.820, 7.936-7.944, 8.2(c), 8.7(c) and 8.12(c ) of the Panel Reports, that China's export 
quotas on rare earths, tungsten and molybdenum cannot be provisionally justified under 
subparagraph (g) of Article XX of the GATT 1994,  China requests the Appellate Body also to 
reverse these findings of the Panel. 
__________  
                                               
4 Panel Reports, para. 7.332. 
5 See, e.g., Panel Reports, para. 7.595. 
6 Panel Reports, para. 7.301. 
7 Panel Reports, para. 7.332. 
8 Panel Reports, para. 7.332.