WORLD TRADE  
ORGANIZATION   
WT/DS394/R 
WT/DS395/R 
WT/DS398/R 
5 July 2011 
 (11-3179) 
 Original: English 
            
 
     
 
CHINA – MEASURES RELATE D TO THE EXPORTATION 
OF VARIOUS RAW MATERIALS 
 
 
Reports of the Panel  
 
     WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page i 
  
  TABLE OF CONTENTS 
Page 
I.  INTRODUCTION .................................................................................................................. .. 1 
A.  COMPLAINTS OF THE UNITED STATES , THE EUROPEAN UNION AND MEXICO  ........................... 1  
B.  ESTABLISHMENT AND COMPOSITION OF THE PANEL  .................................................................. 1  
C.  PROCESS FOR THE PRELIMINARY RULING ON THE PANEL 'S TERMS OF REFERENCE 
WITH RESPECT TO THE MEASURES AND PRODUCTS AT ISSUE  ..................................................... 2  
II.  FACTUAL ASPECTS .............................................................................................................. 3 
A.  BACKGROUND  ............................................................................................................................. 3 
B.  PRODUCTS AT ISSUE  .................................................................................................................... 3  
C.  MEASURES AT ISSUE  ................................................................................................................... 5  
D.  ADDITIONAL LEGAL INSTRUME NTS IDENTIFIED BY CHINA  ......................................................... 7  
III. PARTIES' REQUESTS FOR FIND INGS AND RECOMMENDATIONS......................... 8  
A.  COMPLAINANTS  .......................................................................................................................... 9  
1.  The United States and Mexico ................................................................................................. 9 
2.  The European Union............................................................................................................. .. 13 
B.  CHINA  .............................................................................................................................. .......... 17 
IV.  ARGUMENTS OF THE PARTIES ...................................................................................... 18  
V.  ARGUMENTS OF THE THIRD PARTIES ........................................................................ 18  
VI.  INTERIM REVIEW ............................................................................................................... 18 
A.  THE DESCRIPTIVE PART OF THE REPORT  .................................................................................. 18  
B.  ISSUES RELATING TO THE PANEL 'S TERMS OF REFERENCE  ....................................................... 19  
C.  EXPORT DUTIES  ........................................................................................................................ 19  
D.  APPLICABILITY OF GATT  ARTICLE  XX  TO VIOLATION OF PARAGRAPH  11.3  OF 
CHINA 'S ACCESSION PROTOCOL  ............................................................................................... 20  
E.  EXPORT QUOTAS  ....................................................................................................................... 20  
F.  CHINA 'S DEFENCES TO THE APPLICAT ION OF EXPORT RESTRICTIONS  ....................................... 21  
G.  EXPORT QUOTA ALLOCATION AND ADMINISTRATION  ............................................................. 24  
H.  EXPORT LICENSING  ................................................................................................................... 25  
I.  MINIMUM EXPORT PRICES  ........................................................................................................ 28  
J.  CONCLUSIONS AND RECOMMENDATIONS  ................................................................................. 28  
VII. FINDINGS ...................................................................................................................... ......... 28 
A.  ISSUES RELATING TO THE PANEL 'S TERMS OF REFERENCE  ........................................................ 28  
1.  Preliminary rulings ........................................................................................................... ...... 28 
2.  Additional legislative instruments enacted by China during the Panel process ............... 30  WT/DS394/R 
WT/DS395/R WT/DS398/R 
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  3.  Whether the European Union's claims under Article X:1 and Article X:3(a) of 
the GATT 1994 regarding China's administration of its export licensing system fall outside the Panel's terms of reference because they were not identified in the 
European Union's Panel Request .......................................................................................... 38  
B.  E
XPORT DUTIES  ........................................................................................................................ 41  
1.  China's application of export duties ...................................................................................... 42  
2.  Whether export duties on bauxite, coke, fluorspar, magnesium, manganese, 
silicon metal, zinc and yellow phosphoru s are inconsistent with Paragraph 11.3 
of China's Accession Protocol ................................................................................................ 43 
(a)  Export duties on "yellow phosphorous" (HS 2804.7010) ......................................................... 44  
(b)  Export duties on bauxite, including "refractory clay" (HS 2508.3000), "aluminium 
ores and concentrates" (HS 2606.0000) and "aluminium ash residues" (HS 2620.4000) ................................................................................................................ ......... 44 
(c)  Export duties on "coke" (HS 2704.0010) .................................................................................. 45  
(d)  Export duties on fluorspar, including "met-spar" (HS 2529.2100) and "acid-spar" 
(HS 2529.2200) ................................................................................................................ ......... 46 
(e)  Export duties on  magnesium, including "magnesium metal" (HS 8104.1100), 
"unwrought magnesium" (HS 8104.1900), and "magnesium waste and scrap" (HS 8104.2000) .................................................................................................................... ............ 46  
(f)  Export duties on manganese, including "m anganese ores and concentrates" (HS 
2602.0000) and "unwrought manganese waste and scrap" (HS 8111.00.10) and 
"unwrought manganese po wder" (HS 8111.0010).................................................................... 47  
(g)  Export duties on "silicon me tal" (HS 2804.6900) ..................................................................... 48  
(h)  Export duties on zinc, including "zinc waste and scrap" (HS 7902.0000), "hard zinc 
spelter" (HS 2620.1100), and "other zinc  ash and residues" (HS 2620.1900) .......................... 48  
3.  Whether China failed to consult pursuant to the Note to Annex 6 to China's 
Accession Protocol ............................................................................................................ ...... 49 
4.  Summary ....................................................................................................................... ........... 49  
5.  Whether export duties on bauxite, coke, fluorspar, magnesium, manganese, 
silicon carbide, and zinc are justified pursuant to Article XX of the GATT 1994 ............ 50  
(a)  Whether Article XX of the GATT 1994 is av ailable as a defence to a claim under 
Paragraph 11.3 of China's Accession Protocol ......................................................................... 50  
(i)  WTO Members' Accession Protocols are in tegral parts of the WTO Agreement ..................... 51  
(ii)  The availability of Article XX of the GATT 1994 for violations of Paragraph 11.3 of 
China's Accession Protocol .................................................................................................... .. 52 
Interpretation of Paragraph 11.3 of  China's Accession Protocol ............................................................. 53  
Ordinary meaning .............................................................................................................. .............. 53  
Context provided by other provisions  of China's Workin g Party Report......................................... 54  
Context provided by other provis ions of the WTO Agreement ....................................................... 57  
(iii) Conclusions ................................................................................................................... ............ 59   WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
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  C.  E
XPORT QUOTAS  ....................................................................................................................... 59  
1.  Whether the European Union properly identified the measures subject to its 
Article XI:1 and Working Party Report claims on bauxite, fluorspar, silicon 
carbide and zinc .............................................................................................................. ........ 60 
2.  China's export quota regime .................................................................................................. 62 
(a)  Quotas allocated directly for coke and zinc .............................................................................. 63  
(i)  2009 zinc export quota allocation .............................................................................................  64 
(ii)  2009 coke export quota allocation ............................................................................................ 64 
Application requirements for Chinese an d foreign-invested  enterprises ................................................. 64  
2009 Coke quota am ounts ....................................................................................................... ................ 65  
(b)  Bauxite, fluorspar and silicon carbide quotas allocated through bidding ................................. 66  
(i)  The quota-bidding app lication process..................................................................................... 67  
(ii)  Determining the bid-winners for bauxite , fluorspar and silicon carbide ................................. 69  
(iii) 2009 quota amounts for bauxite, fl uorspar and silicon carbide ............................................... 70  
3.  Whether export quotas applied to bauxite,  coke, fluorspar, silicon carbide, and 
zinc are inconsistent with Arti cle XI:1 of the GATT 1994 .................................................. 70  
(a)  Export quotas on bauxite, including "refractory clay" (HS No. 2508.3000) and 
"aluminium ores and concentrates" (HS No. 2606.0000) ......................................................... 75  
(b)  Export quotas on fluorspar, including "met -spar" (HS 2529.2100), and "acid-spar" 
(HS 2529.2200) ................................................................................................................ ......... 75 
(c)  Export quotas on silicon carbide, including s ilicon carbide and crude silicon carbide ............ 76  
(d)  Export quotas on coke (HS 2704.0010) .................................................................................... 76  
(e)  Export quotas on zinc, including "zinc ores and concentrates excluding gray feed 
grade zinc oxide" (HS 2608.0000 ex) and  "gray feed grade zinc oxide" 
(HS 2608.0000 ex) ............................................................................................................. ....... 77 
4.  Summary ....................................................................................................................... ........... 77  
D.  CHINA 'S DEFENCES TO THE APPLICAT ION OF EXPORT RESTRICTIONS  ....................................... 77  
1.  Whether the export quota applied to refractory-grade bauxite is justified 
pursuant to Article XI:2 (a) of the GATT 1994 ..................................................................... 81  
(a)  The ordinary meaning of Article  XI:2(a) of the GATT 1994 ................................................... 83  
(i)  Prohibitions or restrictions "temporar ily applied" under Article XI:2(a) ................................ 83  
(ii)  "Essential" products under GATT Article XI:2(a) .................................................................... 85  
(iii) Export prohibitions or restrictions applied to "prevent or relieve a critical shortage" 
of essential products ......................................................................................................... ........ 91 
(iv)  Preliminary conclusions on interpretation of Article XI:2(a)................................................... 96  
(b)  Whether China's export quota on refractory-grade bauxite is temporarily applied to 
prevent or relieve a critical s hortage of an essential product .................................................... 96  WT/DS394/R 
WT/DS395/R WT/DS398/R 
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  (i)  The parties' views on the applicability of Article XI:2(a) to the circumstances in 
China ......................................................................................................................... ................ 96  
Whether refractory-grade bauxite is an  "essential" produc t  to China ..................................................... 96  
Whether a "critical shortage" of refract ory-grade bauxite ex ists in China .............................................. 99  
Whether the export quota applied to bauxite  is applied on a temporary basis ....................................... 103  
(ii)  The Panel's assessment of th e situation in China ................................................................... 104  
(c)  Summary ....................................................................................................................... .......... 107  
2.  Whether the export duties and export  quotas applied to refractory-grade 
bauxite and fluorspar are justified pursuant to Article XX(g) of the GATT 1994 ......... 107  
(a)  Interpretation of Article XX(g) of the GATT 1994 ................................................................ 108  
(i)  "Relating to the conservation of exhaustible natural resources"............................................ 109  
"Relate to co nservation" ...................................................................................................... .................. 110  
"Conserva tion" ................................................................................................................ ...................... 111  
(ii)  "if such measures are made effective in  conjunction with restrictions on domestic 
production or consumption" ................................................................................................... 114 
Restrictions  on domestic productio n or consumption ........................................................................... 115  
Effective in conj unction with ................................................................................................. ............... 116  
Requirement of even-handedness ................................................................................................ .......... 117  
(b)  Whether export quotas applied to refractor y-grade bauxite and export duties applied 
to fluorspar (met-spar and acid-spar) are ju stified pursuant to Article XX(g) of the 
GATT 1994 ..................................................................................................................... ........ 119 
(i)  Whether China's its export quota on refra ctory-grade bauxite and export duty on 
fluorspar relate to the conservation of an exhaustible natural resource ................................ 120  
(ii)  Whether China's quota on refractory-grade bauxite and its export duty on fluorspar 
are made effective in conjunction with  restrictions on domestic production or 
consumption ................................................................................................................... ......... 125  
Are the domestic measures invoked by China restrictive on domestic production or 
consumption? .................................................................................................................. ...................... 125  
Are the export restric tions even-handed? ...................................................................................... ........ 131 
(c)  Summary ....................................................................................................................... .......... 132  
3.  Whether the export duties and export quotas applied to "scrap" products 
(magnesium scrap, manganese scrap and zinc scrap) and on EPRs (coke, 
magnesium metal, manganese metal and silicon carbide) are justified pursuant to Article XX(b) of the GATT 1994 ..................................................................................... 133  
(a)  Interpretation of Article XX(b) of the GATT 1994 ................................................................ 134  
(i)  Whether the measure falls w ithin the range of policies designed to protect human, 
animal or plant life or health ................................................................................................ .. 135 
(ii)  The importance of the interest s or values at issue .................................................................. 136  
(iii) The contribution of the measure to the objective pursued ...................................................... 136   WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
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  (iv)  The trade restrictiveness of the measure................................................................................. 137  
(v)  Availability of WTO-consistent or less tr ade restrictive alternative measures ....................... 137  
(b)  Export restrictions on EPRs ................................................................................................... . 138 
(i)  Whether the objectives of the measures a re the protection of health and the 
environment ................................................................................................................... ......... 139  
(ii)  Whether the measures contribute materially to  the goal of protecting the health of the 
Chinese population ............................................................................................................ ..... 145 
Whether China has discharged its burden of proof that export restrictions on EPR products are 
currently making a material contribution to the stated objective .......................................................... 147  
Whether China has discharged its burden of proving that export restrictions on EPRs are apt to  
make a material contribution to the stated objective in  the future ......................................................... 15 1 
Whether export restrictions on raw material s necessarily promote higher growth ........................ 151  
Whether the EKC holds for China an d the products at issue ......................................................... 153  
(iii) Trade restrictiveness of the measure ...................................................................................... 154  
(iv)  Availability of WTO-consistent or less tr ade-restrictive alternative measures ...................... 155  
Investment in more environmenta lly friendly tech nologies  .................................................................. 157  
Recycling of consumer goods ................................................................................................... ............ 158  
Increasing environm ental standards ............................................................................................ .......... 159  
Investing in infrastructure necessary to facilitate recyc ling of scrap ..................................................... 16 0 
Stimulating greater local demand for scra p without discouragin g local supply .................................... 160  
Introduction of production restric tions or pollution controls .................................................................  160 
(v)  Conclusions on the necessity of the measure for EPRs........................................................... 164  
(c)  Whether export duties applied to zinc scr ap, magnesium scrap and manganese scrap 
are justified pursuant to Article XX(b) of the GATT 1994 .................................................... 164  
(i)  Contribution of the measure ...................................................................................................  165 
Whether China has discharged its burden of proof that export duties are currently  making a 
material contribution to  the stated  objective ................................................................................. ......... 165 
Whether China has discharged its burden of proof that export duties are apt to  make a material 
contribution in the future to the stated  objec tive ............................................................................ ....... 167 
(ii)  Availability of WTO-consistent or les tr ade restrictive alternative measures ........................ 168  
(d)  Conclusions on the necessity of the measure pursuant to Article XX(b) of the 
GATT 1994 ..................................................................................................................... ........ 168 
4.  Summary of the Panel's findings on China's invocation of Articles XI:2(a), 
XX(b) and XX(g) of the GATT 1994 ................................................................................... 169  
5.  Whether China's export quotas on certai n forms of bauxite, coke, fluorspar, 
silicon carbide and zinc are inconsis tent with Paragraph 1.2 of China's 
Accession Protocol and Paragraphs 162 and 165 of China's Working Party 
Report ........................................................................................................................ ............ 169  
E.  EXPORT QUOTA ALLOCATION AND ADMINISTRATION  ........................................................... 171  WT/DS394/R 
WT/DS395/R WT/DS398/R 
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  1.  Whether requirements to demonstrat e prior export performance and a 
minimum capital requirement to obta in a quota allocation contravenes 
Paragraphs 1.2, 5.1 and 5.2 of China's Accession Protocol, read in combination 
with Paragraphs 83 and 84 of China's Working Party Report ........................................ 173  
(a)  China's "trading rights" commitments .................................................................................... 174  
(b)  Whether China's prior export perform ance and minimum registered capital 
requirements are inconsistent with Para graphs 1.2 and 5.1 of China's Accession 
Protocol, read in combination with Para graphs 83 and 84 of China's Working Party 
Report. ....................................................................................................................... .............. 176  
(c)  Whether China's prior export performance requi rement is inconsistent with paragraph 
5.2 of China's Accession Protocol and Pa ragraphs 84(a) and 84(b) of China's 
Working Party Report .......................................................................................................... ... 179 
(d)  Summary ....................................................................................................................... .......... 181  
2.  Whether China's administration of its export quotas allocated directly through 
the assessment of quota applicants' opera tion/business management capacity is 
inconsistent with Article X:3(a) of the GATT 1994 ........................................................... 181  
(a)  The requirements of Article X:3(a) ......................................................................................... 18 2 
(i)  The meaning of "administer" in Article X:3(a) ....................................................................... 183  
(ii)  The meaning of "uniform", "im partial" and "reasonable" ..................................................... 184  
(b)  The meaning of Article X:3(a) ................................................................................................ 185 
(c)  The nature of the European Union's challenge ....................................................................... 187  
(d)  Whether the operation capacity criterion appli es to any of the products at issue ................... 188  
(i)  Non-uniform, partial and unreasonable adminis tration of the operation capacity 
criterion ..................................................................................................................... ............. 190  
Reasonable admi nistra tion ..................................................................................................... ............... 193  
Uniform admi nistra tion ........................................................................................................ ................. 194  
Impartial admi nistra tion ...................................................................................................... .................. 195  
(ii)  Conclusion .................................................................................................................... .......... 196  
3.  Whether China's administration of its export quotas through the involvment of 
the CCCMC is inconsistent with Article X:3(a) of the GATT 1994 ................................. 196  
(a)  The nature of the United States ' and Mexico's challenges ...................................................... 196  
(b)  Partial and unreasonabl e administration ................................................................................. 196  
(i)  Impartial admi nistration ...................................................................................................... ... 199 
(ii)  Reasonable admi nistration .....................................................................................................  202 
(iii) Conclusion .................................................................................................................... .......... 205  
4.  Whether China's failure to publish the total amount and procedure for the 
allocation of zinc export quotas is inconsistent with Article X:1 of the 
GATT 1994 ..................................................................................................................... ....... 205  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
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  5.  Whether China's allocation of quotas on bauxite, fluorspar and silicon carbide 
based on the bid-winning price is inconsistent with Article VIII:1(a) of the GATT 1994 and Paragraph 11.3 of Ch ina's Accession Protocol ...................................... 206  
(a)  The allocation of export quotas through a quota bidding process .......................................... 208  
(b)  Whether China's allocation of quotas on ba uxite, fluorspar and silicon carbide based 
on the bid-winning price is inconsistent w ith Article VIII:1(a) of the GATT 1994 ............... 208  
(i)  The ordinary meaning of the terms "fees" or "charges" in Article VIII:1(a) .......................... 209  
The meaning of the term s "fees" and "charges" ................................................................................. ... 209 
The terms "fees" and "charges" in the cont ext of other terms in Article VIII and the 
WTO Agreement ................................................................................................................. .................. 210  
Other interpreta tive elements ................................................................................................. ............... 213  
Preliminary conclusions: The ordinary meaning of  "fees" and "charges" in Article VIII:1(a) of 
the GATT  1994 ................................................................................................................. .................... 214  
(ii)  Whether the bid-winning price constitutes a fee or charge within the meaning of 
Article VIII:1(a) of  the GATT 1994 ........................................................................................ 214  
(iii) Conclusions on the complainants' Article VIII:1(a) claim ..................................................... 216  
(c)  Whether China's allocation of quotas on ba uxite, fluorspar and silicon carbide based 
on the bid-winning price is inconsistent w ith Paragraph 11.3 and Annex 6 of China's 
Accession Protocol............................................................................................................. ..... 217 
(d)  Summary ....................................................................................................................... .......... 218  
F.  EXPORT LICENSING  ................................................................................................................. 218  
1.  The operation of China's export licensing system .............................................................. 222  
2.  Whether China's export licensing system  on certain forms of bauxite, coke, 
fluorspar, manganese, silicon carbide and zinc is inconsistent with Article XI:1 
of the GATT 1994............................................................................................................... ... 225 
(a)  "Non-automatic" or "discretionary" export licensing under Article XI:1 of the 
GATT 1994 ..................................................................................................................... ........ 226 
(i)  Import and export licensing under Artic le XI:1 of the GATT 1994 ........................................ 227  
(ii)  Discretionary licensing requirements ..................................................................................... 229  
(b)  China's export licensing system for the forms of bauxite, coke, fluorspar, manganese, 
silicon carbide and zinc ...................................................................................................... ..... 230 
(c)  Summary ....................................................................................................................... .......... 238  
3.  Whether China's export licensing system  on certain forms of bauxite, coke, 
fluorspar, manganese, silicon carbide and zinc is inconsistent with Paragraph 1.2 of China's Accession Protocol and Par agraphs 162 and 165 of China's Working 
Party Report .................................................................................................................. ........ 238 
4.  Whether China's export licensing system  on certain forms of bauxite, coke, 
fluorspar, manganese, silicon carbide and zinc is inconsistent with paragraph 1.2 and 5.1 of China's Accession Protocol and paragraphs 83 and 84 of China's 
Working Party Report ..........................................................................................................  241 
G.  M
INIMUM EXPORT PRICES  ...................................................................................................... 243  WT/DS394/R 
WT/DS395/R WT/DS398/R 
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  1.  MEP-related measures within the Panel's terms of reference .......................................... 244  
2.  Whether China enforced a coordinated MEP requirement on exporters of 
bauxite, coke, fluorspar, magnesium, s ilicon carbide, yellow phosphorus and 
zinc at the time of the Panel's establishment ...................................................................... 247  
(a)  Whether the measures at issue may be subject to WTO dispute settlement ........................... 248  
(b)  Whether China requires exporters to coordinate minimum export prices on exports of 
bauxite, coke, fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc .............. 250  
(i)  Whether China through the CCCMC coordinates export prices ............................................ 250  
(ii)  Whether China enforces an MEP require ment through penalties imposed on 
exporters and licensing entities and the use of the PVC procedure ....................................... 254  
Penalties on exporters ........................................................................................................ .................... 254  
Penalties on export licen ce issuing au thoritie s ............................................................................... ....... 256 
Application of the PVC export  clearance process to exporter s of yellow pho sphorus .......................... 258  
(c)  Conclusions on whether China imposes an M EP requirement on exporters of bauxite 
coke, fluorspar, magnesium, silicon carbi de, yellow phosphorus and zinc ............................ 262  
3.  Whether a requirement to export at a coordinated minimum export price 
constitutes a restriction on exportation that is inconsistent with Article XI:1 of 
the GATT 1994 ................................................................................................................. ..... 263 
4.  Whether China's administration of th e minimum export price requirement 
through the PVC procedure as it appli es to yellow phosphorus is inconsistent 
with China's obligations under Article X:3(a) of the GATT 1994 .................................... 267  
5.  Whether China's has failed to publish measures through which China 
administers its alleged minimum price re quirement inconsistently with China's 
obligations under Article X:1 of the GATT 1994 ............................................................... 267  
6.  Summary ....................................................................................................................... ......... 270  
VIII. CONCLUSIONS AND RECOMMENDATIONS .............................................................. 271  
A.  COMPLAINT BY THE UNITED STATES (DS394) ....................................................................... 272  
1.  Conclusions ................................................................................................................... ......... 272  
2.  Nullification and impairment ............................................................................................... 27 4 
3.  Recommenda tions ............................................................................................................... .. 274 
B.  COMPLAINT BY THE EUROPEAN UNION (DS395) ................................................................... 275  
1.  Conclusions ................................................................................................................... ......... 275  
2.  Nullification and impairment ............................................................................................... 27 7 
3.  Recommenda tions ............................................................................................................... .. 277 
C.  COMPLAINT BY MEXICO (DS398) ........................................................................................... 279  
1.  Conclusions ................................................................................................................... ......... 279  
2.  Nullification and impairment ............................................................................................... 28 1 
3.  Recommenda tions ............................................................................................................... .. 281  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
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  ANNEX A 
 
SUBMISSIONS OF THE UNITED STATES 
 
CONTENTS PAGE 
A-1 Executive Summary of the first writte n submission of the United States A-2 
A-2 Executive Summary of the open ing oral statement of the complainants at the first 
substantive meeting A-9 
A-3 Closing oral statement of the United Stat es at the first substantive meeting A-13 
A-4 Executive Summary of the second written submission of the United States A-16 
A-5 Executive Summary of the opening oral statement of the United States at the 
second substantive meeting A-23 
A-6 Closing oral statement of the United Stat es at the second substantive meeting A-27 
 
 
ANNEX B 
 
SUBMISSIONS OF THE EUROPEAN UNION 
 
CONTENTS PAGE 
B-1 Executive Summary of the first writte n submission of the European Union B-2 
B-2 Opening oral statement of the European Union at the first substantive meeting B-6 
B-3 Closing oral statement of the European Union at the first substantive meeting B-11 
B-4 Executive Summary of the second writte n submission of the European Union B-12 
B-5 Executive Summary of the opening and clos ing oral statements of the European 
Union at the second substantive meeting B-16 
 
 
ANNEX C 
 
SUBMISSIONS OF THE MEXICO 
  
CONTENTS PAGE 
C-1 Executive Summary of the firs t written submission of Mexico C-2 
C-2 Additional opening oral statement of Mexico at the first substantive meeting C-9 
C-3 Closing oral statement of Mexico at the first substantive meeting C-10 
C-4 Executive Summary of the second written submission of Mexico C-11 
C-5 Opening oral statement of Mexico at the second substantive meeting C-18 
C-6 Closing oral statement of Mexico at the second substantive meeting C-24 
 
 WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page x 
  
  ANNEX D 
 
SUBMISSIONS OF CHINA 
 
CONTENTS PAGE 
D-1 Executive Summary of the first written submission of China D-2 
D-2 Executive Summary of the open ing oral statement of China at the first substantive 
meeting D-12 
D-3 Executive summary of the clos ing oral statement of Chin a at the first substantive 
meeting D-18 
D-4 Executive Summary of the second written submission of China D-23 
D-5 Executive Summary of the opening oral  statement of China at the second 
substantive meeting D-34 
D-6 Executive summary of the closing oral statement of  China at the second 
substantive meeting D-40 
 
 
ANNEX E 
 
SUBMISSIONS OF THE THIRD PARTIES 
 
CONTENTS PAGE 
E-1 Executive Summary of the third party submission of Argentina E-2 
E-2 Executive Summary of the oral statement of Brazil at the first substantive meeting E-5 
E-3 Executive Summary of written submissi on and oral statement of Canada E-7 
E-4 Third party submission of Chile E-9 
E-5 Executive Summary of the third party submission of Colombia E-11 
E-6 Oral statement of Ecuador at the first substantive meeting E-14 
E-7 Oral statement of India at th e first substantive meeting  E-16 
E-8 Executive Summary of written submi ssion and oral statement of Japan E-18 
E-9 Executive Summary of the third party submission of Korea E-21 
E-10 Executive Summary of the third party submission of Saudi Arabia E-24 
E-11 Executive Summary of the third party submission of Turkey E-27 
 
 
ANNEX F 
 
PRELIMINARY RULING 
 
CONTENTS PAGE 
F-1 First phase of Preliminary Ruling F-2 
F-2 Second phase of Preliminary Ruling F-13  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
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  TABLE OF WTO CASES CITED IN THESE REPORTS 
 
Short Title Full Case Title and Citation 
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of 
Footwear , WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, 515 
Argentina – Footwear (EC) Panel Report, Argentina – Safeguard Measures on Imports of Footwear , 
WT/DS121/R, adopted 12 January 2000, as modified by Appellate Body Report WT/DS121/AB/R, DSR 2000:II, 575 
Argentina – Hides and 
Leather Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and 
Import of Finished Leather , WT/DS155/R and Corr.1, adopted 16 February 
2001, DSR 2001:V, 1779 
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon , 
WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327 
Australia – Salmon Panel Report, Australia – Measures Affecting Importation of Salmon , 
WT/DS18/R and Corr.1, adopted 6 November 1998, as modified by Appellate 
Body Report WT/DS18/AB/R, DSR 1998:VIII, 3407 
Brazil – Aircraft Appellate Body Report, Brazil – Export Financing Programme for Aircraft , 
WT/DS46/AB/R, adopted 20 August 1999, DSR 1999:III, 1161 
Brazil – Aircraft Panel Report, Brazil – Export Financing Programme for Aircraft , WT/DS46/R, 
adopted 20 August 1999, as modified by Appellate Body Report 
WT/DS46/AB/R, DSR 1999:III, 1221 
Brazil – Desiccated Coconut Appellate Body Report, Brazil – Measures Affecting Desiccated Coconut , 
WT/DS22/AB/R, adopted 20 March 1997, DSR 1997:I, 167 
Brazil – Desiccated Coconut Panel Report, Brazil – Measures Affecting Desiccated Coconut , WT/DS22/R, 
adopted 20 March 1997, upheld by Appellate Body Report WT/DS22/AB/R, 
DSR 1997:I, 189 
Brazil – Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded 
Tyres , WT/DS332/AB/R, adopted 17 D ecember 2007, DSR 2007:IV, 1527 
Brazil – Retreaded Tyres Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/R, adopted 17 December 2007, as modified by Appellate Body Report WT/DS332/AB/R, DSR 2007:V, 1649 
Canada – Continued 
Suspension Panel Report, Canada – Continued Suspension of Obligations in the EC – 
Hormones Dispute , WT/DS321/R, adopted 14 November 2008, as modified by 
Appellate Body Report WT/DS321/AB/R 
Canada – Dairy Appellate Body Report, Canada – Measures Affecting the Importation of Milk 
and the Exportation of Dairy Products , WT/DS103/AB/R, WT/DS113/AB/R 
and Corr.1, adopted 27 October 1999, DSR 1999:V, 2057 
Canada – Dairy Panel Report, Canada – Measures Affecting the Importation of Milk and the 
Exportation of Dairy Products , WT/DS103/R, WT/DS113/R, adopted 27 
October 1999, as modified by Appellate Body Report WT/DS103/AB/R, 
WT/DS113/AB/R, DSR 1999:VI, 2097 
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to 
Certain Agricultural Products , WT/DS207/R, adopted 23 October 2002, as 
modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, 3127 
Chile – Swordfish Chile – Measures Affecting the Transit and Importation of Swordfish 
(WT/DS193) WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xii 
  
  Short Title Full Case Title and Citation 
China – Auto Parts Appellate Body Reports, China – Measures Affecting Imports of Automobile 
Parts , WT/DS339/AB/R, WT /DS340/AB/R, WT/DS342/AB/R, adopted  
12 January 2009 
China – Auto Parts Panel Reports, China – Measures Affecting Imports of Automobile Parts , 
WT/DS339/R, WT/DS340/R, WT/DS342/R and Add.1 and Add.2, adopted  12 January 2009, upheld (WT/DS339/R) and as modified (WT/DS340/R, 
WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R, 
WT/DS340/AB/R, WT/DS342/AB/R 
China – Publications and Audiovisual Products Appellate Body Report, China –  Measures Affecting Trading Rights and 
Distribution Services for Certain Publications and Audiovisual Entertainment 
Products , WT/DS363/AB/R, adopted 19 January 2010 
China – Publications and 
Audiovisual Products Panel Report, China –  Measures Affecting Trading Rights and Distribution 
Services for Certain Publications and Audiovisual Entertainment Products , 
WT/DS363/R and Corr.1, adopted 19 January 2010, as modified by Appellate 
Body Report WT/DS363/AB/R 
Colombia – Ports of Entry Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry , 
WT/DS366/R and Corr.1, adopted 20 May 2009 
Dominican Republic – Import and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the 
Importation and Internal Sale of Cigarettes , WT/DS302/AB/R, adopted  
19 May 2005, DSR 2005:XV, 7367 
Dominican Republic – Import 
and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the 
Importation and Internal Sale of Cigarettes , WT/DS302/AB/R, adopted  
19 May 2005, DSR 2005:XV, 7367 
EC – Approval and Marketing 
of Biotech Products Panel Report, European Communities – Measures Affecting the Approval and 
Marketing of Biotech Products , WT/DS291/R, WT/DS292/R, WT/DS293/R, 
Add.1 to Add.9, and Corr.1, adopted 21 November 2006, DSR 2006:III-VIII, 
847 
EC – Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos 
and Asbestos-Containing Products , WT/DS135/AB/R, adopted  
5 April 2001, DSR 2001:VII, 3243 
EC – Asbestos Panel Report, European Communities – Measures Affecting Asbestos and 
Asbestos-Containing Products , WT/DS135/R and Add.1, adopted 5 April 2001, 
as modified by Appellate Body Report WT/DS135/AB/R, DSR 2001:VIII, 3305 
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas , WT/DS27/AB/R, adopted 25 September 
1997, DSR 1997:II, 591 
EC – Bananas III (US) Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas, Complaint by the United States , WT/DS27/R/USA, 
adopted 25 September 1997, as modified by Appellate Body Report 
WT/DS27/AB/R, DSR 1997:II, 943 
EC – Bananas III 
(Article 21.5 – Ecuador II) / EC – Bananas III 
(Article 21.5 – US) Appellate Body Reports, European Communities – Regime for the Importation, 
Sale and Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by Ecuador, WT/DS27/AB/RW2/ECU, a dopted 11 December 2008, and Corr.1 
/ European Communities – Regime for the Importation, Sale and Distribution of 
Bananas – Recourse to Article 21.5  of the DSU by the United States, 
WT/DS27/AB/RW/USA and Corr.1 , adopted 22 December 2008  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xiii 
  
  Short Title Full Case Title and Citation 
EC – Computer Equipment Appellate Body Report, European Communities – Customs Classification of 
Certain Computer Equipment , WT/DS62/AB/R, WT/DS67/AB/R, 
WT/DS68/AB/R, adopted 22 June 1998, DSR 1998:V, 1851 
EC – Chicken Cuts Appellate Body Report, European  Communities – Customs Classification of 
Frozen Boneless Chicken Cuts , WT/DS269/AB/R, WT/DS286/AB/R, adopted 
27 September 2005, and Corr.1, DSR 2005:XIX, 9157 
EC – Chicken Cuts (Brazil) Panel Report, European  Communities – Customs Classification of Frozen 
Boneless Chicken Cuts, Complaint by Brazil , WT/DS269/R, adopted 27 
September 2005, as modified by Appellate Body Report WT/DS269/AB/R, WT/DS286/AB/R, DSR 2005:XIX, 9295 
EC – Chicken Cuts (Thailand) Panel Report, European  Communities – Customs Classification of Frozen 
Boneless Chicken Cuts, Complaint by Thailand , WT/DS286/R, adopted  
27 September 2005, as modified by Appellate Body Report WT/DS269/AB/R, WT/DS286/AB/R, DSR 2005:XX, 9721 
EC – Computer Equipment Appellate Body Report, European Communities – Customs Classification of 
Certain Computer Equipment , WT/DS62/AB/R, WT/DS67/AB/R, 
WT/DS68/AB/R, adopted 22 June 1998, DSR 1998:V, 1851 
EC – Computer Equipment Panel Report, European Communities – Customs Classification of Certain 
Computer Equipment , WT/DS62/R, WT/DS67/R, WT/DS68/R, adopted  
22 June 1998, as modified by Appellate Body Report WT/DS62/AB/R, 
WT/DS67/AB/R, WT/DS68/AB/R, DSR 1998:V, 1891 
EC – Export Subsidies on Sugar Appellate Body Report, European Communities – Export Subsidies on Sugar , 
WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, adopted 19 May 2005, 
DSR 2005:XIII, 6365 
EC – Export Subsidies on 
Sugar (Australia) Panel Report, European Communities – Export Subsidies on Sugar, Complaint 
by Australia , WT/DS265/R, adopted 19 May 2005, as modified by Appellate 
Body Report WT/DS265/AB/R, WT /DS266/AB/R, WT/DS283/AB/R, DSR 
2005:XIII, 6499 
EC – Export Subsidies on Sugar (Brazil) Panel Report, European Communities – Export Subsidies on Sugar, Complaint 
by Brazil , WT/DS266/R, adopted 19 May 2005, as modified by Appellate Body 
Report WT/DS265/AB/ R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 
2005:XIV, 6793 
EC – Export Subsidies on Sugar (Thailand) Panel Report, European Communities – Export Subsidies on Sugar, Complaint 
by Thailand , WT/DS283/R, adopted 19 May 2005, as modified by Appellate 
Body Report WT/DS265/AB/R, WT /DS266/AB/R, WT/DS283/AB/R, DSR 
2005:XIV, 7071 
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, 
DSR 1998:I, 135 
EC – Hormones (Canada) Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), 
Complaint by Canada , WT/DS48/R/CAN, adopted 13 February 1998, as 
modified by Appellate Body Report WT/DS26/AB/R, WT/DS48/AB/R, DSR 
1998:II, 235 
EC – Hormones (US) Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), 
Complaint by the United States , WT/DS26/R/USA, adopted  
13 February 1998, as modified by Appellate Body Report WT/DS26/AB/R, 
WT/DS48/AB/R, DSR 1998:III, 699 WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xiv 
  
  Short Title Full Case Title and Citation 
EC – IT Products Panel Report, European Communities and its member States – Tariff Treatment 
of Certain Information Technology Products , WT/DS375/R, WT/DS376/R, 
WT/DS377/R, adopted 21 September 2010 
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed 
Salmon from Norway , WT/DS337/R, adopted 15 January 2008, and Corr.1, 
DSR 2008:I, 3 
EC – Sardines Appellate Body Report, European Communities – Trade Description of 
Sardines , WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII, 3359 
EC – Sardines Panel Report, European Communities – Trade Description of Sardines , 
WT/DS231/R and Corr.1, adopted 23 October 2002, as modified by Appellate Body Report WT/DS231/AB/R, DSR 2002:VIII, 3451 
EC – Selected Customs 
Matters Appellate Body Report, European Communities – Selected Customs Matters , 
WT/DS315/AB/R, adop ted 11 December 2006,  DSR 2006:IX, 3791 
EC – Selected Customs 
Matters Panel Report, European Communities – Selected Customs Matters , 
WT/DS315/R, adopted 11 December 2006, as modified by Appellate Body Report WT/DS315/AB/R, DSR 2006:IX-X, 3915 
EC – Scallops (Canada) Panel Report, European Communities – Trade Description of Scallops – 
Request by Canada , WT/DS7/R, 5 August 1996, unadopted, DSR 1996:I, 89 
EC – Scallops (Peru and 
Chile) Panel Report, European Communities – Trade Description of Scallops – 
Requests by Peru  and Chile , WT/DS12/R, WT/DS14/R, 5 August 1996, 
unadopted, DSR 1996:I, 93 
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting 
of Tariff Preferences to Developing Countries , WT/DS246/AB/R, adopted 20 
April 2004, DSR 2004:III, 925 
EC – Tariff Preferences Panel Report, European Communities – Conditions for the Granting of Tariff 
Preferences to Developing Countries , WT/DS246/R, adopted 20 April 2004, as 
modified by Appellate Body Report WT/DS/246/AB/R, DSR 2004:III, 1009 
India – Additional Import Duties Appellate Body Report, India – Additional and Extra-Additional Duties on 
Imports from the United States , WT/DS360/AB/R, adopted 17 November 2008 
India – Additional Import 
Duties Panel Report, India – Additional and Extra-Add itional Duties on Imports from 
the United States , WT/DS360/R, adopted 17 November 2008, as reversed by 
Appellate Body Report WT/DS360/AB/R 
India – Autos Appellate Body Report, India – Measures Affecting the Automotive Sector , 
WT/DS146/AB/R, WT/DS175/AB/R, adopted 5 April 2002, DSR 2002:V, 1821 
India – Autos Panel Report, India – Measures Affecting the Automotive Sector , WT/DS146/R, 
WT/DS175/R and Corr.1, adopted 5 April 2002, DSR 2002:V, 1827 
India – Patents (US) Appellate Body Report, India – Patent Protection for Pharmaceutical and 
Agricultural Chemical Products , WT/DS50/AB/R, adopted 16 January 1998, 
DSR 1998:I, 9 
India – Patents (US) Panel Report, India – Patent Protection for Pharmaceutical and Agricultural 
Chemical Products, Complaint by the United States , WT/DS50/R, adopted  
16 January 1998, as modified by Appellate Body Report WT/DS50/AB/R, DSR 1998:I, 41  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xv 
  
  Short Title Full Case Title and Citation 
India – Quantitative 
Restrictions Appellate Body Report, India – Quantitative Restrictions on Imports of 
Agricultural, Textile and Industrial Products , WT/DS90/AB/R, adopted  
22 September 1999, DSR 1999:IV, 1763 
India – Quantitative Restrictions Panel Report, India – Quantitative Restrictions on Imports of Agricultural, 
Textile and Industrial Products , WT/DS90/R, adopted 22 September 1999, 
upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, 1799 
Japan – Alcoholic  
Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages, 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, 
DSR 1996:I, 97 
Japan – Alcoholic  Beverages II Panel Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/R, WT/DS10/R, 
WT/DS11/R, adopted 1 November 1996, as modified by Appellate Body Report 
WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, DSR 1996:I, 125 
Japan – DRAMs (Korea) Appellate Body Report, Japan – Countervailing Duties on Dynamic Random 
Access Memories from Korea , WT/DS336/AB/R and Corr.1, adopted  
17 December 2007, DSR 2007:VII, 2703 
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and 
Paper , WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, 1179 
Japan – Quotas on Laver Panel Report, Japan – Import Quotas on Dried Laver and Seasoned Laver , 
WT/DS323/R, 1 February 2006, unadopted 
Korea – Alcoholic Beverages Appellate Body Report, Korea – Taxes on Alcoholic Beverages , 
WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, 3 
Korea – Alcoholic Beverages Panel Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/R, 
WT/DS84/R, adopted 17 February 1999, as modified by Appellate Body Report 
WT/DS75/AB/R, WT/DS84/AB/R, DSR 1999:I, 44 
Korea – Dairy Appellate Body Report, Korea – Definitive Safeguard Measure on Imports of 
Certain Dairy Products , WT/DS98/AB/R, adopted 12 January 2000, DSR 
2000:I, 3 
Korea – Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain 
Dairy Products , WT/DS98/R and Corr.1, adopted 12 January 2000, as modified 
by Appellate Body Report WT/DS98/AB/R, DSR 2000:I, 49 
Korea – Various Measures on 
Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled 
and Frozen Beef , WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 
2001, DSR 2001:I, 5 
Korea – Various Measures on 
Beef Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen 
Beef, WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as modified by 
Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, DSR 2001:I, 59 
Mexico – Anti-Dumping Measures on Rice Appellate Body Report, Mexico – Definitive Anti-Dump ing Measures on Beef 
and Rice, Complaint with Respect to Rice , WT/DS295/AB/R, adopted  
20 December 2005, DSR 2005:XXII, 10853 
Mexico – Anti-Dumping 
Measures on Rice Panel Report, Mexico – Definitive Anti-Dumping Me asures on Beef and Rice, 
Complaint with Respect to Rice , WT/DS295/R, adopted 20 December 2005,  
as modified by Appellate Body Report WT/DS295/AB/R, DSR 2005:XXIII, 
11007 WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xvi 
  
  Short Title Full Case Title and Citation 
Mexico – Corn Syrup 
(Article 21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose 
Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU  by the United States , WT/DS132/AB/RW, adopted 21 November 2001, 
DSR 2001:XIII, 6675 
Thailand – Cigarettes 
(Philippines) Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the 
Philippines , WT/DS371/R, circulated to WTO Members 15 November 2010 
[adoption/appeal pending] 
Turkey – Rice Panel Report, Turkey – Measures Affecting the Importation of Rice , 
WT/DS334/R, adopted 22 October 2007, DSR 2007:VI, 2151 
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , 
WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, 3779 
US – Carbon Steel Panel Report, United States – Countervailing Duties on Certain 
Corrosion-Resistant Carbon Steel Flat Products from Germany , WT/DS213/R 
and Corr.1, adopted 19 December 2002, as modified by Appellate Body Report 
WT/DS213/AB/R, DSR 2002:IX, 3833 
US – Certain EC Products Appellate Body Report, United States – Import Measures on Certain Products 
from the European Communities , WT/DS165/AB/R, adopted 10 January 2001, 
DSR 2001:I, 373 
US – Certain EC Products Panel Report, United States – Import Measures on Certain Products from the 
European Communities , WT/DS165/R and Add.1, adopted 10 January 2001, as 
modified by Appellate Body Report WT/DS165/AB/R, DSR 2001:II, 413 
US – Continued Suspension Appellate Body Report, United States – Continued Suspension of Obligations in 
the EC – Hormones Dispute , WT/DS320/AB/R, adopted 14 November 2008, 
DSR 2008:X, 3507 
US – Continued Suspension Panel Report, United States – Continued Suspension of Obligations in the EC – 
Hormones Dispute , WT/DS320/R, adopted 14 November 2008, as modified by 
Appellate Body Report WT/DS320/AB/R, DSR 2008:XI, 3891 
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application of 
Zeroing Methodology , WT/DS350/AB/R, adopted 19 February 2009 
US – Continued Zeroing Panel Report, United States – Continued Existence and Application of Zeroing 
Methodology , WT/DS350/R, adopted 19 February 2009, as modified as 
Appellate Body Report WT/DS350/AB/R 
US – Corrosion-Resistant 
Steel Sunset Review Appellate Body Report, United States – Sunset R eview of Anti-Dumping Duties 
on Corrosion-Resistant Carbon Steel Flat Products from Japan , 
WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, 3  
US – Corrosion-Resistant 
Steel Sunset Review Panel Report, United States – Sunset Review of Anti-Dumping Duties on 
Corrosion-Resistant Carbon Steel Flat Products from Japan , WT/DS244/R, 
adopted 9 January 2004, as modified by Appellate Body Report WTDS244/AB/R, DSR 2004:I, 85  
US – Countervailing 
Measures on Certain EC 
Products (Article 21.5 – EC) Panel Report, United States – Countervailing Measures Concerning Certain 
Products from the European Communities – Recourse to Article 21.5 of the 
DSU by the European Communities , WT/DS212/RW, adopted 27 September 
2005, DSR 2005:XVIII, 8950  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xvii 
  
  Short Title Full Case Title and Citation 
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R, adopted 20 April 
2005, DSR 2005:XII, 5663 (Corr.1, DSR 2006:XII, 5475) 
US – Gambling Panel Report, United States – Measures Affecting the Cross-Border Supply of 
Gambling and Betting Services , WT/DS285/R, adopted 20 April 2005, as 
modified by Appellate Body Report WT/DS285/AB/R, DSR 2005:XII, 5797 
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3 
US – Gasoline Panel Report, United States – Standards for Reformulated and Conventional 
Gasoline , WT/DS2/R, adopted 20 May 1996, as modified by Appellate Body 
Report WT/DS2/AB/ R, DSR 1996:I, 29 
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of 
Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia , 
WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, 4051 
US – Line Pipe Panel Report, United States – Definitive Safeguard Measures on Imports of 
Circular Welded Carbon Quality Line Pipe from Korea , WT/DS202/R, adopted 
8 March 2002, as modified by Appellate Body Report WT/DS202/AB/, DSR 2002:IV, 1473 
US – Oil Country Tubular 
Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping 
Measures on Oil Country Tubular Goods from Argentina , WT/DS268/AB/R, 
adopted 17 December 2004, DSR 2004:VII, 3257 
US – Oil Country Tubular Goods Sunset Reviews Panel Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil 
Country Tubular Goods from Argentina , WT/DS268/R and Corr.1, adopted 17 
December 2004, as modified by Appellate  Body Report W/DS/268/AB/R, DSR 
2004:VIII, 3421 
US – Offset Act 
(Byrd Amendment) Appellate Body Report, United States – Continued Dumping and Subsidy Offset 
Act of 2000 , WT/DS217/AB/R, WT/DS234/AB/R, adopted 27 January 2003, 
DSR 2003:I, 375 
US – Offset Act (Byrd Amendment) Panel Report, United States – Continued Dumping and Subsidy Offset Act of 
2000 , WT/DS217/R, WT/DS234/R, adopted 27 January 2003, as modified by 
Appellate Body Report WT/DS217/AB/R, WT/DS234/AB/R, DSR 2003:II, 489 
US – Poultry (China) Panel Report, United States – Certain Measures Affecting Imports of Poultry 
from China , WT/DS392/R, adopted 25 October 2010 
US – Section 211 
Appropriations Act Appellate Body Report, United States – Section 211 Omnibus Appropriations 
Act of 1998 , WT/DS176/AB/R, adopted 1 February 2002, DSR 2002:II, 589 
US – Section 211 
Appropriations Act Panel Report, United States – Section 211 Omnibus Appropriations Act of 1998 , 
WT/DS176/R, adopted 1 February 2002, as modified by Appellate Body Report 
WT/DS176/AB/R, DSR 2002:II, 683 
US – Section 301 Trade Act Panel Report, United States – Sections 301-310 of the Trade Act of 1974 , 
WT/DS152/R, adopted 27 January 2000, DSR 2000:II, 815 
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrimp Products , WT/DS58/AB/R, adopted 6 November 1998, DSR 
1998:VII, 2755 WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xviii 
  
  Short Title Full Case Title and Citation 
US – Shrimp Panel Report, United States – Import Prohibition of Certain Shrimp and Shrimp 
Products , WT/DS58/R and Corr.1, adopted 6 November 1998, as modified by 
Appellate Body Report WT/DS58/AB/R, DSR 1998:VII, 2821 
US – Shrimp (Article 21.5 – Malaysia) Appellate Body Report, United States – Import Prohibition of Certain Shrimp 
and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia , 
WT/DS58/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6481 
US – Shrimp (Thailand) / 
US – Customs Bond Directive Appellate Body Report, United States – Measures Relating to Shrimp from 
Thailand / United States – Customs Bond Directive for Merchandise Subject to 
Anti-Dumping/Countervailing Duties , WT/DS343/AB/R / WT/DS345/AB/R, 
adopted 1 August 2008, DSR 2008:VII, 2385 / DSR 2008:VIII, 2773 
US – Shrimp (Thailand) Panel Report, United States – Measures Relating to Shrimp from Thailand , 
WT/DS343/R, adopted 1 August 2008, as modified by Appellate Body Report 
WT/DS343/AB/R / WT/DS345/AB/R, DSR 2008:VII, 2539 
US – Shrimp (Ecuador) Panel Report, United States – Anti-Dumping Measure on Shrimp from Ecuador , 
WT/DS335/R, adopted on 20 February 2007, DSR 2007:II, 425 
US – Shrimp (Viet Nam) United States – Anti-Dumping Measures on certain Shrimp from Viet 
Nam(WT/DS404) 
US – Softwood Lumber IV Appellate Body Report, United States – Final Countervailing Duty 
Determination with Respect to Certain Softwood Lumber from Canada , 
WT/DS257/AB/R, adopted 17 February 2004, DSR 2004:II, 571 
US – Softwood Lumber IV Panel Report, United States – Final Countervailing Duty Determination with 
Respect to Certain Softwood Lumber from Canada , WT/DS257/R and Corr.1, 
adopted 17 February 2004, as modified by Appellate Body Report 
WT/DS257/AB/R, DSR 2004:II, 641  
US – Softwood Lumber V Panel Report, United States – Final Dumping Determination on Softwood 
Lumber from Canada , WT/DS264/R, adopted 31 August 2004, as modified by 
Appellate Body Report WT/DS264/AB/R, DSR 2004:V, 1937 
US – Softwood Lumber III Panel Report, United States – Preliminary Determinations with Respect to 
Certain Softwood Lumber from Canada , WT/DS236/R, adopted 1 November 
2002, DSR 2002:IX, 3597 
US – Stainless Steel (Mexico) Appellate Body Report, United States – Final Anti-Dumping Measures on 
Stainless Steel from Mexico , WT/DS344/AB/R, adopted 20 May 2008, DSR 
2008:II, 513 
US – Stainless Steel (Mexico) Panel Report, United States – Final Anti-Dumping Measures on Stainless Steel 
from Mexico , WT/DS344/R, adopted 20 May 2008, as modified by Appellate 
Body Report WT/DS344/AB/R, DSR 2008:II, 599 
US – Steel Safeguards Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Certain Steel Products , WT/DS248/AB/R, WT/DS249/AB/R, 
WT/DS251/AB/R, WT/DS252/AB/R, WT /DS253/AB/R, WT/DS254/AB/R, 
WT/DS258/AB/R, WT/DS259/AB/R, adopted 10 December 2003, DSR 
2003:VII, 3117  
US – Tuna II (Mexico) United States – Measures Concerning the Importation, Marketing and Sale of 
Tuna and Tuna Products ( WT/DS381) 
US – Tyres (China) Panel Report, United States – Measures Affecting Imports of Certain Passenger 
Vehicle and Light Truck Tyres from China , WT/DS399/R, circulated to WTO 
Members 13 December 2010 [appeal/adoption pending]  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xix 
  
  Short Title Full Case Title and Citation 
US – Underwear Appellate Body Report, United States – Restrictions on Imports of Cotton and 
Man-made Fibre Underwear , WT/DS24/AB/R, adopted 25 February 1997, 
DSR 1997:I, 11 
US – Underwear Panel Report, United States – Restrictions on Imports of Cotton and Man-made 
Fibre Underwear , WT/DS24/R, adopted 25 February 1997, as modified by 
Appellate Body Report WT/DS24/AB/R, DSR 1997:I, 31 
US – Upland Cotton Appellate Body Report, United States – Subsidies on Upland Cotton , 
WT/DS267/AB/R, adopted 21 March 2005, DSR 2005:I, 3 
US – Upland Cotton Panel Report, United States – Subsidies on Upland Cotton , WT/DS267/R, 
Corr.1, and Add.1 to Add.3, adopted 21 March 2005, as modified by Appellate Body Report WT/DS267/AB/R, DSR 2005:II, 299 
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on 
Imports of Wheat Gluten from the European Communities , WT/DS166/AB/R, 
adopted 19 January 2001, DSR 2001:II, 717 
US – Wheat Gluten Panel Report, United States – Definitive Safeguard Measures on Imports of 
Wheat Gluten from the European Communities , WT/DS166/R, adopted  
19 January 2001, as modified by Appellate Body Report WT/DS166/AB/R, 
DSR 2001:III, 779 
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven 
Wool Shirts and Blouses from India , WT/DS33/AB/R, adopted 23 May 1997, 
and Corr.1, DSR 1997:I, 323 
US – Wool Shirts and Blouses Panel Report, United States – Measure Affecting Imports of Woven Wool Shirts 
and Blouses from India , WT/DS33/R, adopted 23 May 1997, upheld by 
Appellate Body Report WT/DS33/AB/R, DSR 1997:I, 343 
US – Zeroing (Japan)  (Article 21.5 – Japan) Appellate Body Report, United States – Measures Relating to Zeroing and 
Sunset Reviews – Recourse to Article 21.5 of the DSU by Japan , 
WT/DS322/AB/RW, adopted 31 August 2009 
 
 
GATT DISPUTE SETTLEMENT AND WORKING PARTY REPORTS 
 
Short Title  Full Case Title and Citation  
Canada – FIRA  GATT Panel Report, Canada – Administration of the Foreign Investment 
Review Act , L/5504, adopted 7 February 1984, BISD 30S/140 
Canada – Herring and 
Salmon  GATT Panel Report, Canada – Measures Affecting Exports of Unprocessed 
Herring and Salmon , L/6268, adopted 22 March 1988, BISD 35S/98 
Canada – Ice Cream and 
Yoghurt  GATT Panel Report, Canada – Import Restrictions on Ice Cream and Yoghurt , 
L/6568, adopted 5 December 1989, BISD 36S/68 
EEC – Dessert Apples  GATT Panel Report, European Economic Community – Restrictions on Imports 
of Dessert Apples – Complaint by Chile , L/6491, adopted 22 June 1989, 
BISD 36S/93 
EEC – Import Restrictions  GATT Panel Report, EEC – Quantitative Restrictions Against Imports of 
Certain Products from Hong Kong , L/5511, adopted 12 July 1983, 
BISD 30S/129 WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xx 
  
  Short Title  Full Case Title and Citation  
EEC – Minimum Import 
Prices  GATT Panel Report, EEC – Programme of Minimum Import Prices, Licences 
and Surety Deposits for Certain Processed Fruits and Vegetables , L/4687, 
adopted 18 October 1978, BISD 25S/68 
EEC – Oilseeds I  GATT Panel Report, European Economic Community – Payments and 
Subsidies Paid to Processors and Producers of Oilseeds and Related Animal-Feed Proteins , L/6627, adopted 25 January 1990, BISD 37S/86 
France – Import Restrictions  GATT Panel Report, French Import Restrictions , L/1921, adopted 
14 November 1962, BISD 11S/94 (See also BISD 11S/55) 
Japan – Agricultural 
Products I  GATT Panel Report, Japan – Restrictions on Imports of Certain Agricultural 
Products , L/6253, adopted 2 March 1988, BISD 35S/163 
Japan – Semi-Conductors  GATT Panel Report, Japan – Trade in Semi-Conductors , L/6309, adopted 
4 May 1988, BISD 35S/116 
US – Customs User Fee  GATT Panel Report, United States – Customs User Fee , L/6264, adopted 
2 February 1988, BISD 35S/245 
US – MFN Footwear  GATT Panel Report, United States – Denial of Most-Favoured-Nation 
Treatment as to Non-Rubber Footwear from Brazil,  DS18/R, adopted 
19 June 1992, BISD 39S/128 
US – Sugar  GATT Panel Report, United States Restrictions on Imports of Sugar , L/6514, 
adopted 22 June 1989, BISD 36S/331 
US – Sugar Quota  GATT Panel Report, United States – Imports of Sugar from Nicaragua , L/5607, 
adopted 13 March 1984, BISD 31S/67 
US – Sugar Waiver  GATT Panel Report, United States – Restrictions on the Importation of Sugar 
and Sugar-Containing Products Applied under the 1955 Waiver and under the 
Headnote to the Schedule of Tariff Concessions , L/6631, adopted 
7 November 1990, BISD 37S/228 
US – Tuna (Mexico)  GATT Panel Report, United States – Restrictions on Imports of Tuna , DS21/R, 
DS21/R, 3 September 1991, unadopted, BISD 39S/155 
US – Tuna (EEC)  GATT Panel Report, United States – Restrictions on Imports of Tuna , DS29/R, 
16 June 1994, unadopted 
 
 
 
  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xxi 
  
  ABBREVIATIONS OF MEASURES, EVIDENCE, AND OTHER INSTRUMENTS 
REFERRED TO IN THIS RULING
1 
  
Short Titles Full Titles 
"system of self-discipline" "system of self-discipline" (No Exhibits) 
1994 CCCMC Charter Charter of the China Chamber of Commerce of Metals, Minerals and 
Chemicals Importers and Exporters (1994) (Exhibit JE-86, No Chinese Exhibit) 
1996 Circular on Printing and Issuing the Provisions on the Administration of Export 
License 1996 Circular on the Printing and Issuing the Certain Provisions on the 
Administration of Export License Wai Jing Mao Guan Fa (1995) No. 760, promulgated by MOFTEC on 2 January 1996 (Exhibit CHN-451, No Joint 
Exhibit) 
1998 Price Coordination 
Circular MOFTEC Circular on Strengthening the Job in the Coordination of Export 
Commodities (1998) (Exhibit JE-110, No Chinese Exhibit) 
2001 CCCMC Charter Charter of the China Chamber of Commerce of Metals, Minerals and 
Chemicals Importers and Exporters (2001) (Exhibits JE-87, CHN-16) 
2001 Export License Administration Provisions Provisions on the Administration of Export Licenses, Order No. 9, 
promulgated by MOFTEC on 20 Decem ber 2001 (Exhibit CHN-359, No 
Joint Exhibit) 
2002 PVC Notice 2002 Notice for the Adjustment of the Catalogue of Export Products Subject 
to Price Review by Customs (Ministry of Foreign Trade and Economic Cooperation and the General Administration of Customs, waijingmaomaofa (2002) No. 187, May 1, 2002) (Exhibit JE-121, No Chinese Exhibit) 
2004 Export Licence Administration Measures Measures for the Administration of Lice nse for Export of Goods, Order No. 
28, promulgated by MOFCOM on 10 December 2004 (Exhibit CHN-360, 
No Joint Exhibit ) 
2004 PVC Notice Notice Regarding the Trial Administration of 36 Types of Products such as 
Citric Acid (Ministry of Commerce an d General Administration of Customs, 
Notice (2003) No. 36, November 29, 2003) (Exhibits JE-122, CHN-364) 
2006 Adjust of Interim Tariff 
Rates of Certain Import and 
Export Commodities "State will Adjust Interim Tariff Rates of Certain Import and Export 
Commodities" (27 October 2006) (Exhibit CHN-452, No Joint Exhibit) 
2007 Adjust of Tariff Rates from June 1 to Control the 
Export of High-Energy 
Consumption Products "State Will Adjust Tariff Rates from June 1 to Control the Export of High-
Energy Consumption Products" (22 May 2007) (Exhibit CHN-453, No Joint 
Exhibit) 
2007 Plan for Energy 
Conservation and Pollutant Discharge Reduction 2007 General Work Plan for Energy Conservation and Pollutant Discharge 
Reduction, Guo Fa [2007] No. 15 (Exhibit CHN-145, No Joint Exhibit) 
2008 Arrangement for Energy Conservation and Pollutant Discharge Reduction Circular on the General Office of the State Council on Printing and 
Distributing the 2008 Work Arrangement for Energy Conservation and Pollutant Discharge Reduction Guo Ban Fa (2008) No. 80, promulgated by the State Council on 15 July 2008 (Exhibit CHN-287, No Joint Exhibit) 
2008 Export Licence Administration Measures Measures for the Administration of Licen ce for the Export of Goods (Order 
of the Ministry of Commerce (2008) No. 11, July 1, 2008) (Exhibits JE-74, 
CHN-342) 
                                                      
1 When the relevant exhibits were submitted by the co mplainants and by China, this has been indicated. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xxii 
  
  Short Titles Full Titles 
2008 Export Licensing 
Working Rules Working Rules on Issuing Export Licences (Ministry of Commerce, 
shangpeifa (2008) No. 398, October 9, 2008) (Exhibits JE-97, CHN-344) 
2008 Notice Ceasing the Work of PVC for Export Contract of 9 Types of Commodities Notice Regarding Ceasing the Work of  Price Verification and Chop for 
Export Contract of 9 Types of Commodities including Glyphosate, issued by the CCCMC on 9 January 2008 (Exhibit CHN-352, No Joint Exhibit ) 
2008 PVC Notice Communication (Ministry of Commerce and General Administration of 
Customs (2008) No. 33, May 26, 2008) (Exhibits JE-125, CHN-2) 
2009 Adjustment and Revitalization of the Steel 
Industry 2009 Blueprint for the Adjustment and Revitalization of the Steel Industry 
(promulgated by the General Office of the State Council on 20 March 2009) 
(Exhibits JE-9, CHN-258) 
2009 Announcement of 
Second Bidding Round for 
Talc and Silicon Carbide Announcement on the Second Invitation for the Bidding of Select Industrial 
Product Export Quotas in 2009 (Committee for the Invitation for bid for 
Export Commodity Quotas, September 16, 2009) (Exhibit JE-132, No 
Chinese Exhibit) 
2009 Arrangement for Energy Conservation and Pollutant Discharge Reduction Circular of the General Office of the State Council on Printing and 
Distributing the 2009 Work Arrangement for Energy Conservation and Pollutant Discharge Reduction, Guo Ban Fa (2009) No. 48, promulgated by 
the State Council on 19 July 2009 (Exhibit CHN-288, No Joint Exhibit ) 
2009 Coke Export Quota 
Application Procedures 2009 Coke Export Quota Declaration Conditions and Declaration Procedures 
(Ministry of Commerce, Notice (2008) No. 76, October 13, 2008) (Exhibits 
JE-85, CHN-308) 
2009 Export Licensing 
Catalogue  Notice "2009 Export Licensing Management Commodities List" (Ministry of 
Commerce and General Administration of Customs, Notice (2008) No. 100, 
January 1, 2009) (Exhibits JE-22, CHN-6) 
2009 Export Quota Amounts Notice Regarding 2009 Export Quota Amounts for Agricultural and 
Industrial Products (Ministry of Commerce, Notice (2008) No. 83, January 
1, 2009) (Exhibit JE-79, No Chinese Exhibit) 
2009 First Batch Coke Export 
Quotas  Notice Regarding Passing Down the 2009 First Batch Regular Trade Coke 
Export Quota (Ministry of Commerce, shangmaohan (2008) No. 140, 
January 1, 2009) (Exhibit JE-80, No Chinese Exhibit) 
2009 First Batch Coke Export 
Quotas for FIEs Ministry of Commerce Notice to Fore ign-Invested Enterprises Regarding 
Amounts for the 2009 Industrial Products Export Quotas (2008) No. 92, 
January 1, 2009 (Exhibit JE-82, No Chinese Exhibit) 
2009 First Round Bauxite Bidding Procedures Quotas of Bauxite of 2009 (Committee for the Invitation for bid for Export 
Commodity Quotas, December 10, 2008) (Exhibit JE-94, No Chinese 
Exhibit) 
2009 First Round Export Quota Bidding Announcement Announcement of Ministry of Commerce on Matters regarding the First 
Bidding for Export Quotas of Industrial Products in 2009 (Ministry of Commerce, Announcement (2008) No. 85, October 30, 2008) (Exhibits JE-90, CHN-309) 
2009 First Round Fluorspar Bidding Procedures Quotas of Fluorspar Lump (Powder) of 2009 (Committee for the Invitation 
for bid for Export Commodity Quotas, December 10, 2008) (Exhibits JE-93, 
No Chinese Exhibit) 
2009 First Round Silicon Carbide Bidding Procedures Quotas of Silicon Carbide of 2009 (Committee for the Invitation for bid for 
Export Commodity Quotas, December 10, 2008) (Exhibit JE-95, No Chinese 
Exhibit) 
2009 Further Adjust of Import and Export Tariffs "State will further adjust customs import and export tariffs as of January 1, 
2009" (17 December 2008) (Exhibit CHN-100, No Joint Exhibit)  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xxiii 
  
  Short Titles Full Titles 
2009 Graded Export Licensing 
Entities  Catalogue Announcement of the Ministry of Commerce Issuing the "2009 Graded 
Licence-Issuing List of Commodities Subject to Export Licence Administration" (Ministry of Commerce, Notice (2008) No. 124, January 1, 
2009) (Exhibit JE-96, No Chinese Exhibit) 
2009 Second Batch Coke 
Export Quota  Notice Regarding Passing Down the 2009 Second Batch Regular Trade Coke 
Export Quota (Ministry of Commerce, shangmaohan (2009) No. 60, issued 
June 29, 2009) (Exhibits JE-81, CHN-338) 
2009 Second Batch Coke 
Export Quotas for FIEs Notice Regarding Passing Down the 2009 Second Batch Regular Trade Coke 
and Rare Earth Export Quota Amounts for Foreign-Invested Enterprises 
(Ministry of Commerce, shangzihan (2009) No. 73, September 8, 2009) 
(Exhibit JE-83, No Chinese Exhibit) 
2009 Second Round Export Quota Bidding Announcement Announcement of Ministry of Comm erce on the Notice for the Second 
Invitation for the Bidding for Industrial Product Export Quotas in 2009 (Ministry of Commerce, Announcement (2009) No. 42, June 8, 2009) 
(Exhibits JE-91, CHN-310) 
2009 Second Round Silicon 
Carbide Bidding Procedures Quotas of Silicon Carbide of 2009, Second Round (Committee for the 
Invitation for bid for Export Commodity Quotas, September 16, 2009) 
(Exhibit JE-131, No Chinese Exhibit) 
2009 Tariff Implementation 
Program Notice Regarding the 2009 Tariff Implementation Program (State Council 
Tariff Policy Commission, shuiweihui (2008) No. 40, January 1, 2009) 
(Exhibit JE-21, No Chinese Exhibit) 
2010 Abolition of Price 
Review of Export 
Commodities  2010 Circular of the Ministry of Commerce and the General Administration 
of Customs on Abolishing Two Documents Regarding Price Review of 
Export Commodities by Customs Shang Fa Fa (2010) No. 321, promulgated 
by MOFCOM and the General Administration of Customs on 16 August 2010 (Exhibit CHN-434, No Joint Exhibit) 
2010 Amendment of Measures for Administration of Licensing Entities   2010 Decision of the Ministry of Commerce on Amending the Measures for 
the Administration of the Organs for Issuing the Licenses of Import and Export Commodities (Order No. 3, promulgated by MOFCOM on 12 
September 2010) (Exhibit CHN-449, No Joint Exhibit) 
2010 Application 
Qualifications and Procedures 
for Export Quota of Coke Public Notice on 2010 Application Qualifications and Application 
Procedures for Export Quota of Coke, Notice No. 95, promulgated by 
MOFCOM on 6 November 2009 (Exhibit CHN-317, No Joint Exhibit) 
2010 CCCMC Charter 2010 Charter of the China Chamber of  Commerce of Metals, Minerals and 
Chemicals Importers and Exporters, approved on 29 April 2010 (Exhibit 
CHN-314, No Joint Exhibit) 
2010 Export Licensing Catalogue 2010 Catalogue of Goods Subject to Export Licensing Administration, 
Notice No. 125 of 2009, promulgated by MOFCOM and the General Administration of Customs on 25 Decem ber 2009 (Exhibit CHN-7, No Joint 
Exhibit) 
2010 Export Quota Amounts Notice on Announcement of the 2010 Export Quota Amounts for 
Agricultural and Industrial Products, Notice No. 88 of 2009, promulgated by MOFCOM on 29 October 2009 (Exhibit CHN-8, No Joint Exhibit) 
2010 First-Batch Bidding Qualifications for Export Quotas of Industrial Products Public Notice on Qualifications of Bidding Enterprises in the 2010 First-
Batch Bidding for Export Quotas of Cert ain Industrial Pro ducts (Notice No. 
100, promulgated by MOFCOM on 18 November 2009) (Exhibit CHN-311, 
No Joint Exhibit) WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xxiv 
  
  Short Titles Full Titles 
2010 First-Batch Export Quota 
Bidding of Bauxite 
 Public Notice on 2010 First-Batch Export Quota Bidding of Bauxite 
(promulgated by the Bidding Commi ttee on 16 December 2009) (Exhibit 
CHN-284, No Joint Exhibit) 
2010 First-Batch Export Quota Bidding of Silicon Carbide Public Notice on 2010 First-Batch Export Quota Bidding of Silicon Carbide 
(Committee for the Invitation for bid for Export Commodity Quotas, on 
December 16, 2009, with regard to the announcement on the invitation for 
the bidding of Silicon Carbide (Exhibit CHN-560, No Joint Exhibit) 
2010 First-Batch Export Quota of Coke Public Notice of the Ministry of Comm erce on Passing Down the 2010 First-
Batch Export Quota of Coke under Regular Trade (Shang Mao Han [2009] No. 144, prom ulgated by MOFCOM on 29 December 2009) (Exhibit CHN-
318, No Joint Exhibit) 
2010 First Batch Coke Export Quota for FIEs MOFCOM Notice on the First Batch of 2010 Coke export quotas for 
enterprises with foreign investment, International Trade Division of the 
Department of Commerce, Shanxi Province, March 9, 2010 (Exhibit JE-129) 
2010 First-Batch Export 
Quotas of Industrial Products 
for FIEs Circular of the Ministry of Commerce on Passing Down the 2010 First-Batch 
Export Quotas of Industrial Products for Foreign Invested Enterprises (Shang 
Mao Han [2010] No. 106, promulgated by the Ministry of Commerce on 23 
February 2010) (Exhibit JE-128, CHN-552) 
2010 Graded Export Licensing Entities Catalogue 2010 Graded License-Issuing Catalogue of Goods Subject to Export 
Licensing Administration (Notice No 132, promulgated by MOFCOM on 10 December 2009) (Exhibit CHN-34 3, No Joint Exhibit) 
2010 List of Enterprises 
Subject to Elimination of Outdated Capacity in Industry Sector Announcement of the 2010 List of Enterprises Subject to Elimination of 
Outdated capacity in Industry Sector  Gong Chan Ye (2010) No. 111, Public 
Announcement of the Ministry of Industry and Information Technology of the People's Republic of China on 5 August 2010 (Exhibit CHN-446, No 
Joint Exhibit) 
2010 Measures to Control the 
Extraction and Production of 
Refractory-grade Bauxite and 
Fluorspar 2010 Circular of the General Offi ce of the State Council on Taking 
Comprehensive Measures to Control the Extraction and Production of 
Refractory-grade Bauxite and Fluorspar (Guo Ban Fan [2010] No. 1, 
promulgated by the General Office of the State Council on 2 January 2010 (Exhibits JE-167, CHN-87) 
2010 Public Notice on Fluorspar Standards 2010 Public Notice on Fluorspar Industry Entrance Standards, Gong Lian 
Yuan (2010) No. 87, promulgated by various government ministries and agencies on 24 February 2010 (Exhibit CHN-96, No Joint Exhibit) 
2010 Public Notice on Refractory-Grade Bauxite 
Standards 2010 Public Notice on Refractory- Grade Bauxite (High Alumina Bauxite) 
Industry Entrance Standards, Gong Lian Yuan (2010) No. 86, promulgated 
by various government ministries and agencies on 22 February 2010 (Exhibit 
CHN-275, No Joint Exhibit) 
2010 Quota of High-alumina refractory-Grade Bauxite and Fluorspar Circular on Passing Down the Controlling Quota of the 2010 Total 
Production Quantity of High-alumi na refractory-Grade Bauxite and 
Fluorspar (Gong Xin Bu Yuan Han [2010] No. 244), promulgated by the Ministry of industry and Information Technology on 19 May 2010 (Exhibits 
JE-169, CHN-98) 
2010 Quota on Extraction of 
High-alumina Bauxite Ores 
and Fluorspar Ores Circular of the Ministry of Land and Resources on Passing Down the 2010 
Controlling Quota of Total Extraction Quantity of High-alumina Bauxite 
Ores and Fluorspar Ores (Guo Tu Zi Han [2010] No. 187), promulgated by 
the Ministry of Land and Resources on 20 April 2010 (Exhibits JE-168, CHN-97)  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xxv 
  
  Short Titles Full Titles 
2010 Recommendations of 
Quotas on Extraction of High- Alumina Bauxite and 
Fluorspar Analysis and Recommendation Report on the 2010 Controlling Quota of 
Total Extraction Quantity of High- Alumina Bauxite and Fluorspar, issued by the Department of minerals Exploitation Administration of the Ministry 
of Land and Resources on 24 March 2010 (Exhibits JE-166, CHN-86) 
2010 Second-Batch Bidding 
Qualifications and Review for 
Export Quotas Public Notice on Qualifications and Initial Review for the 2010 Second- 
Batch Bidding for Export Quotas of Industrial Products, Notice No. 32, 
promulgated by MOFCOM on 25 May 2010 (Exhibit CHN-307, No Joint 
Exhibit) 
2010 Tariff Implementation Plan Circular of the State Council Ta riff Commission on the 2010 Tariff 
Implementation Plan (Shui Wei Hui [2009] No. 28, promulgated by the Customs Tariff Commission of the State Council on 8 December 2009) 
(Exhibit CHN-5, No Joint Exhibit) 
Adjustment and Revitalization Plan for Non- Ferrous Industry Adjustment and Revitalization Plan for Non- Ferrous Industry, promulgated 
by the State Council (Exhibits JE-13, CHN-99) 
Adjustment of Export Tariffs Circular  Circular of the State Council Tari ff Commission on the Adjustment of 
Export Tariffs on Certain Commodities (Shui Wei Hui [2009] No. 6, promulgated by the Customs Tariff Commission of the State Council on 19 
June 2009 (Exhibit CHN-1, No Joint Exhibit) 
Administration of Collection 
of the Mineral Resources 
Compensation Fees Provisions on the Administration of Collection of the Mineral Resources 
Compensation Fees, Order No. 150, promulgated by the State Council on 24 
February 1994 (Exhibit CHN-92, No Joint Exhibit) 
Administration of Registration 
of Mining of Mineral 
Resources Measures for the Administration of Registration of Mining of Mineral 
Resources, Order No. 241, promulgated by the state Council on 12 February 
1998 (Exhibit CHN-93, No Joint Exhibit) 
Announcement of Publishing 
the Catalogue of High- Energy 
Consumption 
Electromechanical Equipment  Announcement of Publishing the Catalogue of Outdated High- Energy 
Consumption Electromechanical E quipment (Products) Subject to 
Elimination (First Batch), Gong Jie (2009) No. 67, promulgated by the 
Ministry of Industry and Informa tion Technology on 4 December 2009 
(Exhibit CHN-478, No Joint Exhibit) 
Announcement on Printing Working Rules on Issuing Export Licenses Announcement Regarding Printing "Working Rules on Issuing Export 
Licenses" (Ministry of Commerce, shangpeifa (2008) No. 398, October 9, 2008)  
Assessment on Application of Export Quota Administration 
to Bauxite in 2010 Assessment on Relevant Issues Regarding Continued Application of Export 
Quota Administration to Bauxite in 2010, prepared by the Department of 
Foreign Trade of MOFCOM (Exhibit CHN-283, No Joint Exhibit) 
Assessment on Application of 
Export Quota Administration 
to Silicon Carbide in 2010 Assessment on Relevant Issues Regarding Continued Application of Export 
Quota Administration to Silicon Carbide in 2010, prepared by the 
Department of Foreign Trade of MOFCOM (Exhibit CHN-286, No Joint 
Exhibit) 
Bauxite Branch Charter CCCMC Bauxite Branch Ch arter (Exhibit JE-112, No Chinese Exhibit) 
CCCMC Bauxite Branch 
Coordination Measures CCCMC Bauxite Branch Coordination Measures (Exhibit JE-108, No 
Chinese Exhibit) 
CCCMC Branch-Specific Coordination Measures CCCMC Branch-Specific Coordination Measures 
CCCMC Export Coordination 
Measures CCCMC Export Coordination Measures (Exhibit JE-107, No Chinese 
Exhibit) WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xxvi 
  
  Short Titles Full Titles 
CCCMC PVC Rules Notice Regarding Rules for Contract Declaration for Chemicals-Related 
Verification and Stamp Products (China Chamber of Commerce of Metals, Minerals and Chemicals Importers an d Exporters Petroleum and Chemicals 
Products Department, 30 December 2003) (Exhibit JE-127, No Chinese 
Exhibit) 
CCCMC Resolution on Abolition of Coordination and Administration of Export Commodities Resolution of the Fifth Standing Committee of the CCCMC on Abolishing 
Certain Documents Including Measures of the CCCMC on the Coordination and Administration of Export Commodities (28 June 2010) (Exhibit CHN-4, No Joint Exhibit) 
Charter of the China Coking Industry Association Charter of the China Coking Industry Association (Exhibit) 
Circular of Second Batch of 
Trial Works on the Construction of Recycling 
System for Regenerated 
Resources Circular of the General Office of the Ministry of Commerce on Organizing 
to Carry out the Second Batch of Trial Works on the Construction of Recycling System for Regenerated Resources (Shang Shang Mao Zi (2009) 
No. 53) (Exhibit CHN-527, No Joint Exhibit) 
Circular of the Catalogue of 
Enterprises Income Tax Preference for Environmental, Conservation, Energy and 
Water Conservation, and Safe 
Production Equipments Circular of the Ministry of Finance and the State Administration of Taxation 
on the Relevant Issues Concerning the Implementation of the Catalogue of Enterprise Income Tax Preference Sp ecialized Environmental Protection 
Equipments, the Catalogue of Enterp rise Income Tax Preference for 
Specialized Environmental Protecti on Equipments, the Catalogue of 
Enterprise Income Tax Preference for Specialized Energy and Water 
Conservation Equipments and the Catalogue of Enterprises Income Tax 
Preference for Specialized Safe Productio n Equipments (Cai Shui (2008) No. 
48, promulgated by the Ministry of Finance and the State Administration of Taxation on 23 September 2008 (Exhibit CHN-477, No Joint Exhibit) 
Circular on Distribution of Export Quota Bidding Implementation Rules Circular of the Ministry of Foreign Trade and Economic Cooperation on 
Distribution of the "Implementation Rules of Export Quota Bidding for Industrial Products" (Ministry of Foreign Trade and Economic cooperation, 
issued on November 8, 2001) 
Circular on Further 
Strengthening the Checks on 
Clean Production of Key 
Enterprises Circular of the Ministry of Environmental Protection on Further 
Strengthening the Checks on Clean Production of Key Enterprises (Huan Fa 
(2008) No. 60, promulgated by the Ministry of Environmental Protection on 
1 July 2008 (Exhibit CHN-475, No Joint Exhibit) 
Circular on Implementation Plans and Measures regarding Energy Conservation and 
Pollutant Discharge Reduction Circular of the State Council on Approving and Forwarding Implementation 
Plans and Measures for Statistics, Monitoring and Examination on Energy Conservation and Pollutant Discharge Reduction (Guo Fa (2007) No. 36), 
promulgated by the State Council on 17 November 2007 (Exhibit CHN-467, 
No Joint Exhibit) 
Circular on Organizing the Recycled Economy Demonstration Trials Circular on Organizing and Carrying out the Recycled Economy 
Demonstration Trials (Second Batch), Fa Gai Huan Zi (2007) No. 3420, 
promulgated on 13 December 2007 (E xhibit CHN-468, No Joint Exhibit) 
Circular on Strengthening and 
Regulating the Administration of New Projects Circular of the State Council on Strengthening and Regulating the 
Administration on Commencement of New Projects (Guo Ban Fa (2007) No. 64, promulgated by the General Office of the State Council on 17 November 2007 (Exhibit CHN-469, No Joint Exhibit) 
Circular on Strengthening the Elimination of Outdated Capacity Circular of the State Council on Further Strengthening the Elimination of 
Outdated Capacity, Guo Fa (2010) No. 7, promulgated by the State Council on 6 February 2010 (Exhibit CHN-479, No Joint Exhibit)  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xxvii 
  
  Short Titles Full Titles 
Circular on the Application for 
the Construction of Recycling System  Circular of the General Office of the Ministry of Finance and the General 
Office of the Ministry of Commerce on Relevant Issues Regarding the organization of the Application for the Construction of Recycling System for 
Regenerated Resources, 2010, No. 63 (Exhibit CHN-528, No Joint Exhibit) 
Circular on the Measures to 
Control the Export of EPR 
products Circular on the Measures to Co ntrol the Export of High-energy-
consumption, High-pollution, and Resources-based Products Fa Gai Jing 
Mao (2005) No. 1482, promulgated by the NDRC, Ministry of Finance, 
MOFCOM, Ministry of Land and Resources, General Administration of Customs, State Administration of Taxation, State Environmental Protection 
Administration on 28 July 2005 (Exhibit CHN-444, No Joint Exhibit) 
Circular on Trial Works on the 
Construction of Recycling 
System for Regenerated 
Resources Circular on Organizing to Carry out the Trial Works on the Construction of 
Recycling System for Regenerated Resources (Shang Gai Zi 2006) No. 22 
(Exhibit CHN-526, No Joint Exhibit) 
Coking Industry Entrance 
Rules Coking Industry Entrance Rules, Chuan Ye [2008] No. 15, promulgated by 
MIIT on 13 December 2008 (Exhibit CHN-192, No Joint Exhibit) 
Customs Export Price Review Rules Notice of the Rules on Price Reviews of Export Products by the Customs, 
(Ministry of Foreign Trade and Econ omic Cooperation guanzonghanzi No. 
21, 1997) (No exhibit) 
Customs Law Customs Law of the People's Republic of China (adopted at the 19th 
Meeting of the Standing Committee of the Sixth National People's Congress on January 22, 1987, amended July 8, 2000) (Exhibits JE-68, CHN-14) 
Customs Export Price Review Coordinating Rules Rules for Coordination with Respect to Customs Price Review of Export 
Products, (Ministry of Foreign Trade and Economic Cooperation guanzonghanzi No. 21, 1997) (No exhibit) 
Development Policies for the Iron and Steel Industry Development Policies for the Iron and Steel Industry (Exhibit JE-18, No 
Chinese Exhibit) 
Eleventh Five-Year Plan for Environmental Protection 
(2006-2010) The National Eleventh Five-Year Plan  for Environmental Protection (2006-
2010), Guo Fa [2007] No. 37, promulgated by the State Council on 22 
November 2007 (Exhibit CHN-123, No Joint Exhibit) 
Energy Conservation Law of the President of the People's Republic of China, promulgated by the 
National People's Congress Standing Committee on 28 October 2007 
(Exhibit CHN-272, No Joint Exhibit) 
Energy Consumption Caps on Coke Energy Consumption Caps per Unit of Product for Coke (Exhibit CHN-470, 
No Joint Exhibit) 
Energy Consumption Caps on 
Ferro-alloys Energy Consumption Caps per Unit of Product for Ferro-alloys (Exhibit 
CHN-473, No Joint Exhibit) 
Energy Consumption Caps on Magnesium Energy Consumption Caps per Unit of Product for Magnesium Smelting 
Enterprises (Exhibit CHN-471, No Joint Exhibit ) 
Energy Consumption Caps Zinc Smelting Energy Consumption Caps per Unit of Product for Zinc Smelting Enterprises 
(Exhibit CHN-472, No Joint Exhibit) 
Environmental Protection Law Environmental Protection Law of the People's Republic of China, Order No. 
22 of the President of the People's Republic of China, promulgated by the 
National People's Congress Standi ng Committee on 26 December 1989 
(Exhibit CHN-88, No Joint Exhibit) WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xxviii 
  
  Short Titles Full Titles 
Export Price Penalties 
Regulations Interim Regulations of the Ministry of Foreign Trade and Economic 
Cooperation on Punishment for Conduct at Exporting at Lower-than-Normal Price (Ministry of Foreign Trade and Economic Cooperation, March 20, 
1996) (Exhibits JE-113, CHN-350) 
Export Quota Administration 
Measures Measures for the Administration of Export Commodities Quotas (Order of 
the Ministry of Foreign Trade and Economic Cooperation No. 12, adopted at 
the 9th ministerial office meeting of the  Ministry of Foreign Trade and 
Economic Cooperation of 2001  January 1, 2002) (Exhibits JE-76, CHN-312) 
Export Quota Bidding Implementation Rules Implementation Rules of Export Quota Bidding for Industrial Products 
(Ministry of Foreign Trade and Economic Cooperation, November 8, 2001) (Exhibits JE-78, CHN-305) 
Export Quota Bidding Measures Measures of Quota Bidding for Export Commodities (Decree of the Ministry 
of Foreign Trade and Economic Cooperation No. 11, adopted at the 9th 
ministerial office meeting of the Mini stry of Foreign Trade and Economic 
Cooperation  January 1, 2002) (Exhibits JE-77, CHN-304) 
Foreign Trade Law Foreign Trade Law of the People's Republic of China (adopted at the 8th 
Session of the Standing Committee of the Tenth National People's Congress on April 6, 2004,  on July 1, 2004) (Exhibits JE-72, CHN-151) 
Further Adjust of Import and Export Tariffs of 2008 "State will Further Adjust Customs Import and Export Tariffs as of 2008" 21 
December 2007 (Exhibit CHN-14 6, No Joint Exhibit) 
Guidance for Enhancing the 
Management of Raw Materials 
Industries Guidance for Enhancing the Management of Raw Materials Industries 
(Exhibit JE-10, No Chinese Exhibit) 
Guidelines of the Eleventh Five-Year Plan for National 
Economic and Social 
Development Guidelines of the Eleventh  Five-Year Plan for National Economic and Social 
Development, approved by the Fourth Session of the Tenth National People's 
Congress on 14 March 2006 (Exhibit CHN-144, No Joint Exhibit) 
Guiding Opinions on 
Strengthening the Recycling for Regenerated Resources Guiding Opinions on Strengthening the Recycling for Regenerated 
Resources (Exhibit CHN-525, No Joint Exhibit) 
Law on Environmental Impact Assessments Law of the People's Republic of China on Environmental Impact 
Assessments, Order No. 77 of the President of the People's Republic of China, promulgated by the National People's Congress Standing Committee 
on 28 October 2002 (Exhibit CHN-276, No Joint Exhibit) 
Law on Promoting Clean 
Production Law of the People's Republic of China on Promoting Clean Production, 
Order No. 72 of the President of the People's Republic of China, 
promulgated on 29 June 2002 (Exhibit CHN-271, No Joint Exhibit) 
Law on Renewable Energies Law of the People's Republic of China on Renewable Energies, Order No. 23 
of the President of the People's Republic of China, promulgated by the 
National People's Congress Standi ng Committee on 26 December 2009 
(Exhibit CHN-273, No Joint Exhibit) 
Law on the Prevention and Control of Atmospheric Pollution Law of the People's Republic of China on the Prevention and Control of 
Atmospheric Pollution, Order No. 87 of the President of the People's Republic of China, promulgated by the National People's Congress Standing Committee on 29 April 2000 (Exhibit CHN-268, No Joint Exhibit)  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xxix 
  
  Short Titles Full Titles 
Law on the Prevention and 
Control of Environmental Pollution by Solid Wastes Law of the People's Republic of China on the Prevention and Control of 
Environmental Pollution by Solid Wastes, Order No.31 of the President of the People's Republic of China, promulgated by the National People's 
Congress Standing Committee on 29 D ecember 2004 (Exhibit CHN-270, No 
Joint Exhibit) 
Law on the Prevention and Control of Water Pollution Law of the People's Republic of China on the Prevention and Control of 
Water Pollution, Order No. 87 of the President of the People's Republic of China, promulgated by the National People's Congress Standing Committee on 28 February 2008 (Exhibit CHN-269, No Joint Exhibit) 
Law on the Promotion of Recycle Economy Law of the People's Republic of China on the Promotion of Recycle 
Economy, Order No. 4 of the President of the People's Republic of China, promulgated by the National People's Congress Standing Committee on 29 
August 2008 (Exhibit CHN-101, No Joint Exhibit) 
Measures for Administration 
of Licensing Entities Measures for the Administration of th e Organs for Issuing the Licences of 
Import and Export Commodities (Ministry of Foreign Trade and Economic Cooperation, waijingmaopeiguanhanzi (1999) No. 68, September 21, 1999) (Exhibits JE-75, CHN-358) 
Measures for Administration of Trade Social Organizations Measures for the Administration over Foreign Trade and Economic Social 
Organizations (Ministry of Foreign Trade and Economic Cooperation, February 26, 1991) (Exhibits JE-101, CHN-313) 
Measures for the Administration of the Rates for Pollutant Discharge Fees Measures for the Administration of the Levying Rates for Pollutant 
Discharge Fees, Order No. 31, promulgated by various government ministries and agencies on 28 February 2003 (Exhibit CHN-278, No Joint 
Exhibit) 
Medium and Long Term 
Energy Conservation Plan Medium and Long Term Energy Conservation Plan, Fa Gai Huan Zi [2004] 
No. 2505, promulgated by the NDRC on 10 November 2004 (Exhibit CHN-
105, No Joint Exhibit) 
Mineral Resources Law Mineral Resources Law of the People's Republic of China, Order No. 74 of 
the President of the People's Republic of China, promulgated by the National 
People's Congress Standing Committee on 29 August 1996 (Exhibit CHN-
78, No Joint Exhibit) 
National Mineral Resources Plan National Mineral Resources Plan, promulgated by the Ministry of Land and 
Resources on 11 April 2001 (Exhibit JE-17, CHN-94) 
National Mineral Resources 
Plan (2008-2015) Notice of the Ministry of Land and Resources on Promulgating and 
Implementing the National Mineral Resources Plan (2008-2015), Guo Tu Zi 
Fa [2008] No. 309, issued by the Ministry of Land and Resources on 31 December 2008 (Exhibit CHN- 80, No Joint Exhibit) 
Notice Adjusting the Mineral 
Resource Tax Rates on High-Alumina Bauxite and 
Fluorspar Notice of the Ministry of Finance and the General Administration of 
Taxation on Adjusting the Applicable Tax Rates of the Mineral Resource Taxes on High- Alumina Bauxite and Fluorspar, promulgated by the 
Ministry of Finance and the General Administration, promulgated by the 
Ministry of Finance and the General Administration of Taxation on 11 May 2010 (Exhibit CHN-90, No Joint Exhibit) 
Notice of Opinions of Authorities on the Integration of Exploitation of Mineral 
Resources Notice of the General Office of the State Council on Forwarding the 
Opinions of the Ministry of Land and Resources and other Authorities on the Integration of Exploitation of Mineral Resources, Guo Ban Fa (2006) No. 
108, promulgated by the General Office of the State Council on 31 
December 2006 (Exhibit CHN- 95, No Joint Exhibit) WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xxx 
  
  Short Titles Full Titles 
Notice on Ceasing the 
Administration of PVC for the Export of Towels Notice Regarding the Chamber of Commerce of Textile's Ceasing the 
Administration of Price Verification and Chop for the Export of Towels, issued by the CCCMMCIE on 2 June 2008 (Exhibit CHN-353, No Joint 
Exhibit) 
Notice on Ceasing the Work 
of PVC for Export 
Commodities Notice Regarding Ceasing the Work of  Price Verification and Chop for 
Export Commodities, issued by the CCCIEMEP on 2 June 2008 (Exhibit 
CHN-426, No Joint Exhibit) 
Notice on the Implementation 
of the Catalogue  of 
Enterprises Tax Preferences 
for Integrated Utilization of Resources Notice of the Ministry of Finance and the State Administration of Taxation 
on Relevant Issues Concerning the Implementation of the Catalogue of 
Enterprises Income Tax Preferences fo r Integrated Utilization of Resources 
(Cai Shui (2008) No. 47, promulgated by the Ministry of Finance, the State Administration of Taxation, the State Development and Reform Commission 
on 23 September 2008) (Exhibit CHN-476, No Joint Exhibit) 
Online PVC Instructions Online Verification and Certification Operating Steps (China Chamber of 
Commerce of Metals, Minerals and Chemicals Importers and Exporters) (Exhibit JE-123, No Chinese Exhibit) 
Opinions of the State Council on Further Accelerating the Recycle Economy Several Opinions of the State Counc il on Further Accelerating the Recycle 
Economy (Guo Fa (2005) No. 22) (Exhibit CHN-523, No Joint Exhibit) 
Order No. 2 of 2010 of MOFCOM Order No. 2 of 2010 (promulgated by MOFCOM on 12 September 2010) 
(Exhibit CHN-448, No Joint Exhibit) 
Policies and Actions for Addressing Climate Change China's Policies and Actions for Addressing Climate Change, promulgated 
by the State Council on 29 October 2008 (Exhibit CHN-420, No Joint 
Exhibit) 
Pollutant Discharge Standards Pollutant Discharge Standards implemented in China in relation to the 
Products at Issue (Exhibit CHN-484, No Joint Exhibit)  
Program of Action for Sustainable Development in China Program of Action for Sustainable Deve lopment in China in the Early 21st 
Century, Guo Fa [2003] No. 3, issued by the State Council on 14 January 2003 (Exhibit CHN-82, No Joint Exhibit) 
Provisional Regulations on Resource Tax Provisional Regulations of the People's Republic of China on Resource Tax, 
Order No. 139, promulgated by the State Council on 25 December 1993 (Exhibit CHN-89, No Joint Exhibit) 
Provisional Rules on Export PVC Provisional Rules on Export Price Verification and Chop for Key Products 
Subject to Price Review (Ministry of Foreign Trade and Economic 
Cooperation guanzonghanzi No. 21, 1997) (No exhibit) 
Quota & License 
Administrative Bureau's Statement on the Issuance of Export License Statement on Relevant Matters Regard ing the Issuance of Export License(by 
the Quota & License Administrative Bureau of MOFCOM (20 July 2010) (Exhibit CHN-345, No Joint Exhibit) 
Quota and License Administrative Bureau's Further Statement on Relevant 
Matters Regarding the 
Issuance of Export License Further Statement on Relevant Matters Regarding the Issuance of Export 
License (by the Quota and License Ad ministrative Bureau of MOFCOM (11 
November 2010) (Exhibit CHN-529, No Joint Exhibit)  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page xxxi 
  
  Short Titles Full Titles 
Regulation on Import and 
Export Administration Regulation of the People's Republic of China on the Administration of the 
Import and Export of Goods (passed at the forty-sixth executive meeting of the State Council on October 31, 2001, January 1, 2002) (Exhibits JE-73, 
CHN-152) 
Regulations for Personnel 
Management of Chambers of 
Commerce Notice Regarding Printing and Distribution of Several Regulations for 
Personnel Management of Chambers of Commerce for Importers and 
Exporters (Ministry of Foreign Trade and Economic Cooperation, September 
23, 1994) (Exhibits JE-102, CHN-315) 
Regulations for the Administration of the Pollutant Discharge Fees Regulations for the Administration of the Charging and Use of Pollutant 
Discharge Fees, Order No. 369 promulgated by the State Council on 2 January 2003 (Exhibit CHN-279, No Joint Exhibit) 
Regulations of the Environmental Protection of Construction Projects Regulations on the Administration of Environmental Protection of 
Construction Projects, State Council Order No. 253, promulgated by the State Council on 29 November 1998 (Exhibit CHN-277, No Joint Exhibit ) 
Regulations on Import and Export Duties Regulations of the People's Republic of China on Import and Export Duties 
(Order of the State Council (2003) No. 392, adopted at the 26th executive meeting of the State Council on October 29, 2003, January 1, 2004) 
(Exhibits JE-67, CHN-13) 
Rules for Coordination of 
Customs Price Review Rules for Coordination with Respect to Customs Price Review of Export 
Products (Ministry of Foreign Trade and Economic Cooperation 
guanzonghanzi No. 21, 1997) (No Exhibits) 
Rules for Implementation of 
Regulations on Resource Tax Detailed Rules for the Implementation of the Provisional Regulations of the 
People's Republic of China on Resource Tax, Cai Fa [1993] No. 43, 
promulgated by the Ministry of Fi nance on 30 December 1993 (Exhibit 
CHN-91, No Joint Exhibit) 
Rules on Price Reviews of Export Products Notice on the Rules on Price Reviews of Export Products by the Customs 
(Ministry of Foreign Trade and Econ omic Cooperation guanzonghanzi No. 
21, 1997) (No Exhibits) 
Rules on the Administration of License Certificates Rules on the Administration of import and Export License Certificates 
(Ministry of Foreign Trade and Economic Cooperation, waijingmaopeizi (1999) No. 87, December 6, 1999) 
State Council Decision on Reform of the Foreign Trade System Decision of the State Council on Vari ous Questions on the Further Reform 
and Improvement of the Foreign Trade System (State Council, guofa (1990) No. 70, January 1, 1991) (Exhibit JE-99, No Chinese Exhibit) 
Various Provisions on the Strengthening of Export Product Coordination and 
Management Notice on the Issuance of "Various Provisions on the Strengthening of 
Export Product Coordination and Management" (Ministry of Foreign Trade Economic Relations and Trade, jinfchufa (1991) No. 52, February 22, 1991) 
(Exhibit JE-100, No Chinese Exhibit) 
 WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page xxxii 
  
  TABLE OF ABBREVIATIONS 
 
Abbreviations Description 
Accession Protocol Protocol on the Accession of the People's Republic of China 
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on 
Tariffs and Trade 1994 
BOP Understanding Understanding on the Balance-of-Payments Provisions of the General 
Agreement on Tariffs and Trade 1994 
CCCMC China Chamber of Commerce of Metals Minerals & Chemicals Importers & 
Exporters 
China People's Republic of China 
Complainants European Union, Mexico, and the United States 
DSB Dispute Settlement Body 
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes 
EKC Environmental Kuznets Curve 
EPR products Energy-intensive, highly-polluting, resource-based products 
EU European Union 
GATT 1994 General Agreement on Tariffs and Trade 1994 
Import Licensing Agreement Agreemen t on Import Licensing Procedures 
MEP Minimum export price 
MOFCOM Ministry of Commerce of the People's Republic of China  
MOFTEC Ministry of Trade and Economic Cooperation 
SCM Agreement Agreement on Subsidies and Countervailing Measures 
US United States 
US NRC United States National Research Council 
Working Party Report Report of the Working Party on the Accession of China 
WTO World Trade Organization 
WTO Agreement Agreement Establishi ng the World Trade Organization  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 1 
  
  I. INTRODUCTION 
A. C
OMPLAINTS OF THE UNITED STATES , THE EUROPEAN UNION AND MEXICO  
1.1 On 23 June 2009, the United States and the European Communities2 and on 21 August 2009, 
Mexico, each requested consultations with the People's Republic of China ("China")3, pursuant to 
Article 1 and Article 4 of the Understanding on Rules and Proce dures Governing the Settlement of 
Disputes ("DSU") and Article XXII of the General Agreement on Tariffs and Trade 1994 
("GATT 1994") with respect to China's restraints  on the export from China of various forms of 
bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus, 
and zinc.  
1.2 On 4 November 2009, the United States, the European Communities and Mexico requested 
the Dispute Settlement Body ("DSB") to establish a panel pursuant to Article 6 of the DSU.   
B. ESTABLISHMENT AND COMPOSITION OF THE PANEL  
1.3 At its meeting of 21 December 2009, the DS B established a single panel pursuant to the 
requests of the United States in document WT/D S394/7, the European Communities in document 
WT/DS395/7 and Mexico in document WT/DS398/6, in  accordance with Article 9.1 of the DSU.  At 
that meeting, the parties agreed that the Panel shoul d have standard terms of reference.  The terms of 
reference are, therefore, the following: 
"To examine, in the light of the relevant provisions of the covered agreements cited 
by the parties to the dispute, the matter referred to the DSB by the United States in 
document WT/DS394/7, the European Communities in document WT/DS395/7 and 
Mexico in document WT/DS398/6, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements." 
1.4 On 19 March 2010, the United States, the European Union and Mexico requested the 
Director-General to determine the composition of th e panel, pursuant to Article 8.7 of the DSU.  
1.5 On 29 March 2010, the Director-General acco rdingly composed the Panel as follows: 
 Chairman: Mr Elbio Rosselli 
  Members: Ms Dell Higgie    Mr Nugroho Wisnumurti 
 
1.6 Argentina, Brazil, Canada, Chile, Colombia, Ec uador, the European Union (with respect to 
WT/DS394 and WT/DS398), India, Japan, Korea, Mexico (with respect to WT/DS394 and WT/DS395), Norway, Chinese Taipei, Turkey, the Ki ngdom of Saudi Arabia and the United States 
(with respect to WT/DS395 and WT/DS398) reserv ed their rights to participate in the Panel 
proceedings as third parties.  
                                                      
2 On 1 December 2009, the Treaty of Lisbon amendi ng the Treaty on European Union and the Treaty 
establishing the European Commun ity (done at Lisbon, 13 December  2007) entered into force. On 
29 November 2009, the WTO received a Verbal Note (WT /L/779) from the Council of  the European Union and 
the Commission of the European Communities stating that, by virtue of the Treaty of Lisbon, as of 
1 December 2009, the European Union replaces and succeeds the European Community. 
3 WT/DS394/1, WT/DS395/1 and WT/DS398/1. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 2 
  
  1.7 Following the first substantive meeting with th e parties,  Japan on 17 September 2010, and 
Canada on 20 September 2010,  requested the Panel to  grant them enhanced third-party rights in order 
to participate in the second substantive meeting of the Panel with the parties.  In a letter dated 24 
September 2010, the Panel informed Japan and Cana da that it had declined to accept their requests. 
The Panel informed these third parties that, inter alia,  granting enhanced third-party rights at this 
stage of the proceedings would lead to delays an d would have an important impact on the Panel's 
timetable. 
1.8 The Panel met with the parties on 31 August and 2 September 2010 and 22 to 
23 November 2010.  It met with the third parties on 1 September 2010. 
1.9 The Panel issued the descriptive part of its repor ts to parties and third parties on 20 December 
2010.  The Panel issued the interim panel reports  to the parties on 18 February 2011. The Panel 
submitted its final reports to the parties on 1 April 2011.  The Panel Reports were circulated to WTO 
Members on [  ]. 
C. 
PROCESS FOR THE PRELIMINARY RULING ON THE PANEL 'S TERMS OF REFERENCE WITH 
RESPECT TO THE MEASURES AND PRODUCTS AT ISSUE  
1.10 At the DSB meeting of 21 December 2009, China informed the DSB of its intention to seek a 
preliminary ruling on the adequacy of the complain ants' requests for the establishment of a panel and 
their consistency with the requirements of Article 6.2 of the DSU.4   
1.11 On 30 March 2010, China filed a request for a preliminary ruling.5 The complainants 
submitted a joint response to China's request.6  The parties were invited to comment on each others' 
written argumentation; China commented on the comp lainants' submission on 23 April 2010.  The 
Panel invited the third parties to comment on China' s request and on the complainants' joint response.  
On 23 April 2010, Korea and Japan submitted written submissions on the preliminary ruling request. 
On 29 April 2010, the Panel held a hearing with the parties, as well as a separate session with the third 
parties on China's request.  During this session with th e third parties, Japan and Korea delivered oral 
statements. On the same date, the Panel sent written questions to the parties.7  The parties responded 
to the Panel's questions on 3 May 20108 and submitted comments on each other's responses on 
5 May 2010.9 
1.12 The Panel issued its preliminary ruling to the parties on 7 May 2010.10  In its communication 
to the parties, the Panel informed the parties of its  intention to rule on China's request in two phases.  
The Panel addressed, in a first phase, those issues th at it considered were relevant to the Panel's 
jurisdiction that could not be clarified by the par ties' subsequent first written submissions or at any 
other stage during this panel process.  
                                                      
4 WT/DSB/M/277, para. 74. 
5 Communication from China to the Panel:  China's request for a preliminary ruling pursuant to 
Article 6.2 of the DSU, 30 March 2010. 
6 Joint Communication from the United States, European Union, and Mexico to the Request for a 
Preliminary Ruling submitted by China, 21 April 2010. 
7 Communication from the Panel to the parties: 29 April 2010.  The Panel informed the parties during 
the hearing of its intention to provide written questions.  The parties did not object. 
8 Communication from China to the Panel and Joint Communication from the United States, 
European Union, and Mexico to the Panel: 3 May 2010. 
9 Communication from China to the Panel and Joint Communication from the United States, 
European Union, and Mexico to the Panel: 5 May 2010. 
10 Communication from the Panel to the parties and third parties: 7 May 2010.  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 3 
  
  1.13 The first phase of the preliminary ruling, which was circulated as WTO document 
WT/DS394/9, WT/DS395/9 and WT/DS398/9, is attached  to these reports as an annex (see List of 
Annexes, pages ix and x).  The Panel issued the second phase of its preliminary ruling to the parties 
on 1 October 2010.  This second phase was not initially circulated at the request of the United States 
and Mexico.
11  Following consultation with the parties, the second phase of the preliminary ruling was 
circulated only to the third parties. The second phase of the Panel's preliminary ruling is attached to 
these reports as an annex (see List of Annexes, pages ix and x).   
II. FACTUAL ASPECTS 
A. BACKGROUND  
2.1 This dispute concerns China's use of certain export restraints on the exportation of certain 
forms of bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow 
phosphorus and zinc (the "raw materials").12  The complainants identify the following as four types of 
restraints that China imposes on the exportation of these raw materials: (1) export duties; (2) export 
quotas; (3) export licensing; and (4) minimum export price requirements. The complainants challenge 
the existence of these restraints as well as aspect s of the allocation and administration of export 
quotas, export licences and minimum export pri ces, and the alleged non-publication of certain 
measures.  
B. PRODUCTS AT ISSUE  
2.2 The various forms of the nine raw materials at issue either occur naturally or have undergone 
initial processing.  The following chart identifies the particular raw materials at issue in this dispute 
by category, product name, product name short form, 2009 Chinese HS Number13, and 2009 Chinese 
Commodity Codes.14  This chart takes into account the par ties' submissions, responses to questions 
and the Panel's preliminary ruling (discu ssed in paragraphs 1.10 to 1.13 above). 
Raw Material 
Category Product Name Product Name 
Short Form Chinese 
HS No. Chinese 
Customs 
Commodity 
Code 
Bauxite Refractory-grade clay Refractory-grade 
clay 2508.3000 2508.30.00.00 
Aluminium ores and concentrates Aluminium ores 
and concentrates  
2606.0000 2606.00.00.00 
Ash and residues primarily containing 
aluminium Aluminium ash 
and residues 2620.4000 N/A 
Coke Coke and semi-coke made from coal 
whether or not agglomerated Coke 2704.0010 2704.00.10.00 
Fluorspar Fluorspar containing, by weight  
97% calcium fluoride Met-spar 2529.2100 2529.21.00.00 
Fluorspar containing, by weight > 
97% calcium fluoride Acid-spar 2529.2200 2529.22.00.00 
                                                      
11 Communication from the United States, dated 12 October 2010; Communication from Mexico, dated 
21 October 2010.  See also Communications from Chin a, dated 13 October 2010 and 15 October 2010 opposing 
this request. 
12 These raw materials are discussed in further detail in paragraph 2.2 below.  See also Exhibit JE-4. 
13 See 2009 Tariff Implementation Program, Table 7 (Exhibit JE-21). 
14 See 2009 Export Licensing List Notice, Appendix (Exhibit JE-22). WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 4 
  
  Raw Material 
Category Product Name Product Name 
Short Form Chinese 
HS No. Chinese 
Customs 
Commodity 
Code 
Magnesium Magnesium containing, by weight, at 
least 99.8% magnesium Magnesium 
metal 8104.1100 N/A 
Other unwrought magnesium Unwrought 
magnesium 8104.1900 N/A 
Magnesium waste and scrap Magnesium 
waste and scrap 8104.2000 N/A 
Manganese Manganese ores and concentrates, 
including ferromanganese ores and 
concentrates containing more than 
20% manganese by dry weight Manganese ores 
and concentrates 2602.0000 N/A 
Unwrought manganese; manganese 
waste and scrap; powder Manganese metal 8111.0010 8111.00.10.10 
(unwrought 
waste & scrap) 
   8111.00.10.90 
(unwrought; 
powder) 
Silicon Carbide Silicon carbide Silicon carbide N/A 2849.20.00.00 
Crude silicon carbide (of which the 
silicon carbide content is greater than 
15% by weight) Crude silicon 
carbide N/A 3824.90.99.10 
Silicon Metal Silicon containing by weight less than 
99.99% silicon Silicon metal 2804.6900 N/A 
Yellow 
Phosphorus Yellow phosphorus (white 
phosphorus) Yellow 
phosphorus 2804.7010 N/A 
Zinc Zinc ores and concentrates (excluding 
gray feed zinc oxide containing more 
than 80% zinc oxide) Zinc ores and 
concentrates 
excluding gray 
feed grade zinc oxide 2608.0000 
ex 2608.00.00.90 
Gray feed zinc oxide containing more 
than 80% zinc oxide Gray feed grade 
zinc oxide 2608.0000 
ex 2608.00.00.01 
Unwrought zinc containing by weight 
99.995% or more zinc Unwrought  
99.995% zinc 7901.1110 7901.11.10.00 
Unwrought zinc containing by weight 
99.99% or more but less than 99.995% zinc Unwrought 
99.99% < zinc content 
99.995% zinc 7901.1190 7901.11.90.00 
Unwrought zinc containing by weight 
less than 99.99% zinc Unwrought < 
99.99% zinc 7901.1200 7901.12.00.00 
Unwrought zinc alloys Unwrought zinc 
alloys 7901.2000 7901.20.00.00 
Zinc waste and scrap Zinc waste and 
scrap 7902.0000 N/A 
Hard zinc ash and residues Hard zinc spelter 2620.1100 N/A 
Other zinc ash and residues Other zinc ash 
and residues 2620.1900 N/A 
  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 5 
  
  C. M
EASURES AT ISSUE  
2.3 The United States, the European Union and Mexico collectively identified 40 specific 
measures in their Panel Requests15 in connection with their claims concerning export duties, export 
quotas, export licensing requirements and minimum export price requirements.  These include 
measures concerning the imposition of these restraints, as well as aspects of the allocation, administration and the alleged non-publication of cer tain measures.  In response to questions from the 
Panel following the first and second substantive m eetings, the complainants narrowed down the 
measures for which they request rulings and recommendations.
16   
2.4 The complainants identify the fo llowing measures in their requ ests for establishment of the 
Panel:17 
(a) The imposition of export duties:  
 Customs Law  
 Regulations on Import and Export Duties 
 2009 Tariff Implementation Program  
 Foreign Trade Law 
 Regulations on Import and Export Duties 
 2008 Export License Administration Measures 
 Export Quota Bidding Measures 
 Export Quota Bidding Implementation Rules 
 2009 Export Quota Amounts 
 2009 Export Licensing Catalogue 
 2009 First Round Export Quota Bidding Announcement 
 2009 Second Round Export Quota Bidding Announcement 
 Circular on Distribution of Export Quota Bidding Implementation Rules 
 2009 First Round Fluorspar Bidding Procedures 
 2009 First Round Bauxite Bidding Procedures 
 2009 First Round Silicon Carbide Bidding Procedures 
 2009 Announcement of Second Bidding Round for Talc and Silicon Carbide 
 2009 Second Round Silicon Carbide Bidding Procedures 
 2010 Export Quota Amounts 
(b) The imposition of export quotas: 
                                                      
15 WT/DS394/7, WT/DS395/7, WT/DS398/6. 
16 See complainants' responses to Panel question No. 1 following the first substantive meeting and 
complainants' responses to Panel question No. 2, following the second substantive meeting. 
17 The full titles of the measures referred to below can be found on pages xxi-xxxi. The Panel's terms of 
reference were subsequently modified either at the request  of the parties or as a result of the Panel's rulings and 
findings. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 6 
  
   Foreign Trade Law  
 Regulation on Import and Export Administration 
 2008 Export License Administration Measures 
 Export Quota Administration Measures 
 Export Quota Bidding Measures  
 Measures for Administration of Licensing Entities 
 Export Quota Bidding Implementation Rules 
 2008 Export Licensing Working Rules 
 Rules on the Administration of License Certificates 
 2009 Export Quota Amounts 
 2009 First Batch Coke Export Quotas 
 2009 Coke Export Quota Application Procedure 
 2009 Export Licensing Catalogue 
 2009 Graded Export Licensing Entities Catalogue 
 Announcement on Printing Working Rules on Issuing Export Licenses 
 2009 First Round Export Quota Bidding Announcement 
 2009 Second Round Export Quota Bidding Announcement 
 Circular on Distribution of Export Quota Bidding Implementation Rules 
 2009 First Round Fluorspar Bidding Procedures 
 2009 First Round Bauxite Bidding Procedures 
 2009 First Round Silicon Carbide Bidding Procedures 
 2009 Announcement of Second Bidding Round for Talc and Silicon Carbide 
 2009 Second Round Silicon Carbide Bidding Procedures 
 2009 Second Batch Coke Export Quotas for FIEs 
 2010 Export Quota Amounts 
(c) Additional restraints imposed on exportation: 
 Foreign Trade Law 
 Regulations on Import and Export Duties 
 2008 Export License Administration Measures 
 Export Quota Administration Measures 
 Export Quota Bidding Measures 
 Measures for Administration of Licensing Entities 
 2008 Export Licensing Working Rules Division 
 Rules on the Administration of License Certificates  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 7 
  
   Export Quota Bidding Implementation Rules 
 2009 Export Quota Amounts 
 2009 First Batch Coke Export Quotas 
 2009 Coke Export Quota Application Procedure 
 2009 Export Licensing Catalogue 
 Licensing Entities Catalogue 
 Announcement on Printing Working Rules on Issuing Export Licenses 
 2009 First Round Export Quota Bidding Announcement 
 2009 Second Round Export Quota Bidding Announcement 
 Circular on Distribution of Export Quota Bidding Implementation Rules 
 2009 First Round Fluorspar Bidding Procedures 
 2009 First Round Bauxite Bidding Procedures 
 2009 First Round Silicon Carbide Bidding Procedures 
 2009 Announcement of Second Bidding Round for Talc and Silicon Carbide 
 2009 Second Round Silicon Carbide Bidding Procedures 
 2009 Second Batch Coke Export Quota for FIEs 
 2010 Export Quota Amounts 
 1994 CCCMC Charter 
 2001 CCCMC Charter 
 Charter of the China Coking Industry Association 
 Measures for Administration of Trade Social Organizations 
 Regulations for Personnel Manageme nt of Chambers of Commerce 
 Export Price Penalties Regulations 
 CCCMC PVC Rules 
 Online PVC Instructions 
 Rules for Coordination of Customs Price Review 
 Rules on Price Review of Export Products 
 Various Provisions on th e Strengthening of Expor t Product Coordination and 
Management 
 State Council Decision on Reform of the Foreign Trade System 
D. ADDITIONAL LEGAL INSTRUME NTS IDENTIFIED BY CHINA18 
2.5 China has identified various measures that it cons iders relevant to the Panel's assessment.  
                                                      
18 The full title of the measures referred to below can be found on pages xxi–xxxi. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 8 
  
  (a) The imposition of export duties:  
 2010 Tariff Implementation Plan 
(b) The imposition of export quotas: 
 2010 Catalogue 
 2010 Export Quota Amounts for Agricultural and Industrial Products  
 Application of Export Quota Administration to Bauxite in 2010 
 2010 First-Batch Export Quota Bidding of Bauxite  
 Qualifications and Review for the 2010 Second- Batch Bidding for Export 
Quotas 
 Qualifications for the 2010 First-Batch  Bidding for Export Quotas of 
Industrial Products  
 2010 Application Qualific ations and Procedures for Export Quota of Coke 
 2010 First-Batch Export Quota of Coke  
 2010 Catalogue of Goods Subject to Export Licensing Administration 
 2010 First-Batch Export Quotas of In dustrial Products for Foreign Invested 
Enterprises  
 Public Notice on 2010 First-Batch Expo rt Quota Bidding of Silicon Carbide  
(c) The administration and allocation of export quotas: 
 2010 Catalogue 
 2010 Export Quota Amounts for Agricultural and Industrial Products  
 2010 First-Batch Export Quota Bidding of Bauxite 
 Qualifications and Review for the 2010 Second- Batch Bidding for Export 
Quotas 
 Qualifications for the 2010 First-Batch  Bidding for Export Quotas of 
Industrial Products 
 2010 CCCMC Charter 
 2010 Application Qualific ations and Procedures for Export Quota of Coke  
 2010 First-Batch Export Quota of Coke  
 2010 Catalogue of Goods Subject to Export Licensing Administration  
 2010 First-Batch Export Quotas of In dustrial Products for Foreign Invested 
Enterprises 
 Public Notice on 2010 First-Batch Expo rt Quota Bidding of Silicon Carbide  
III. PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS 
3.1
 The parties' requests for findings and recommenda tions as set out below, take into account the 
parties' first written submissions as well their resp onses to Panel question No.1 following the second 
substantive meeting.  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 9 
  
  A. C
OMPLAINANTS  
1. The United States and Mexico 
3.2 The United States and Mexico request that the Panel make findings and recommendations 
with respect to the following measures: 
 
The United States' and Mexico's claims Measures i.e., Legal Instruments 
Export Duties19 
The application of temporary export duties to 
bauxite, coke, fluorspar, magnesium, manganese, silicon metal, and zinc, is 
inconsistent with Paragraph 11.3 of China's 
Accession Protocol. 
The application of speci al export duties to 
yellow phosphorus, is inconsistent with Paragraph 11.3 of China's Accession Protocol. Customs Law (Articles 2, 9, 23) 
Export Quota Administration Measures (Articles 2, 4, 9, 
11)
2009 Tariff Implementation Program

Export Quotas20 
The application of export quotas to bauxite, 
coke, fluorspar and silicon carbide and the 
application of an export prohibition on zinc is 
inconsistent with Article XI:1 of the GATT 1994, and with Paragraph 1.2 of China's 
Accession Protocol and Paragraphs 162 and 165 
of China's Working Party Report. 
 Foreign Trade Law (Articles 2, 14-19, 34, 61, 63, 64) 
Regulation on Import and Export Administration  
(Articles 4, 35-41, 43, 44, 64-66) 
2008 Export Licence Administration Measures 2008 Export Licensing Working Rules Export Quota Administration Measures Export Quota Bidding Measures Export Quota Bidding Implementation Rules 
2009 Export Quota Amounts 
2009 First Batch Coke Export Quotas 2009 Second Batch Coke Export Quota 2009 First Batch Coke Export Quotas for FIEs 2009 Coke Export Quota Application Procedure 2009 Export Licensing Catalogue 2009 Graded Export Licensing Entities  Catalogue  2009 First Round Export Quota Bidding Announcement 
2009 Second Round Export Quota Bidding 
Announcement 
2009 First Round Fluors par Bidding Procedures 
2009 First Round Bauxite Bidding Procedures 2009 First Round Silicon Carbide Bidding Procedures 
2009 Announcement of Second Bidding Round for Talc 
and Silicon Carbide 
2009 Second Round Silicon Carbide Bidding Procedures 2009 Second Batch Coke Export Quotas for FIEs 
                                                      
19 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-5. 
20 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-6. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 10 
  
  The United States' and Mexico's claims Measures i.e., Legal Instruments 
Export Quotas: Application Conditions21 
The requirements to demonstrate minimum 
export performance and fulfil a minimum 
capital requirement to obtain a coke quota, are 
inconsistent with Paragraphs 1.2 and 5.1 of China's Accession Protocol and Paragraphs 83 
and 84 of China's Working Party Report. 
 The requirements to demonstrate prior export 
performance and minimum export capital 
requirements to obtain a quota for exportation of bauxite, fluorspar and silicon carbide are 
inconsistent with Paragraphs 1.2 and 5.1 of 
China's Accession Protocol and Paragraphs 83 
and 84 of China's Working Party Report. 
 Foreign Trade Law (Articles 2, 14-19,  34, 61, 63, 64)  
Regulation on Import and Export Administration 
(Articles 4, 35-41, 43, 44, 64-66)  
2009 Export Quota Amounts Export Quota Administration Measures 2009 Export Licensing Catalogue 2009 Graded Export Licensing Entities  Catalogue 2008 Export Licence Administration Measures 2008 Export Licensing Working Rules 2009 Coke Export Quota Application Procedure 2009 First Batch Coke Export Quotas  2009 Second Batch Coke Export Quota  
2009 First Batch Coke Export Quotas for FIEs 
2009 Second Batch Coke Export Quotas for FIEs 
 Export Quota Bidding Measures 
Export Quota Bidding Implementation Rules 2009 First Round Export Quota Bidding Announcement 
2009 Second Round Export Quota Bidding 
Announcement 
2009 First Round Fluors par Bidding Procedures 
2009 First Round Bauxite Bidding Procedures 2009 First Round Silicon Carbide Bidding Procedures 
2009 Announcement of Second Bidding Round for Talc 
and Silicon Carbide 
2009 Second Round Silicon Carbide Bidding Procedures 1994 CCCMC Charter 2001 CCCMC Charter 
Export Quotas:  Administration22 
The involvement of the CCCMC in determining 
whether an applicant satisfies the requisite 
conditions for the bauxite, coke, fluorspar and 
silicon carbide export quotas constitutes partial and unreasonable administration in 
contravention of Article X:3(a) of the 
GATT 1994. Foreign Trade Law (Articles 2, 14-19, 34, 61, 63, 64)  
Regulation on Import and Export Administration  
(Articles 4, 35-41, 43, 44, 64-66)  
2008 Export Licence Administration Measures 2008 Export Licensing Working Rules 
2009 Export Licensing Catalogue 
2009 Graded Export Licensing Entities  Catalogue 2009 Export Quota Amounts 2009 Coke Export Quota Application Procedure 2009 First Batch Coke Export Quotas  2009 Second Batch Coke Export Quota  2009 First Batch Coke Export Quotas for FIEs 2009 Second Batch Coke Export Quotas for FIEs 2009 Coke Export Quota Application Procedure 
                                                      
21 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-6. 
22 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-6.  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 11 
  
  The United States' and Mexico's claims Measures i.e., Legal Instruments 
1994 CCCMC Charter 
2001 CCCMC Charter 
 Export Quota Bidding Measures 
Export Quota Bidding Implementation Rules 2009 First Round Export Quota Bidding Announcement 
2009 Second Round Export Quota Bidding 
Announcement 
2009 First Round Fluors par Bidding Procedures 
2009 First Round Bauxite Bidding Procedures 2009 First Round Silicon Carbide Bidding Procedures 
2009 Announcement of Second Bidding Round for Talc 
and Silicon Carbide 
2009 Second Round Silicon Carbide Bidding Procedures 
Export Quota Bid Winning Fee23 
The requirement for an exporter applicant to 
pay a bid-winning price for the right to export 
bauxite, fluorspar and silicon carbide is 
inconsistent with Article VIII:1(a) of the GATT 1994 and with Paragraph 11.3 of China's 
Accession Protocol. 
 Foreign Trade Law  (Articles 2, 14-19, 34, 61, 63, 64)  
Regulation on Import and Export Administration 
(Articles 4, 35-41, 43, 44, 64-66)  
2008 Export Licence Administration Measures 2008 Export Licensing Working Rules Export Quota Bidding Measures Export Quota Bidding Implementation Rules 2009 Export Quota Amounts 2009 Export Licensing Catalogue 2009 Graded Export Licensing Entities  Catalogue 2009 First Round Export Quota Bidding Announcement 
2009 Second Round Export Quota Bidding 
Announcement 
2009 First Round Fluors par Bidding Procedures 
2009 First Round Bauxite Bidding Procedures 2009 First Round Silicon Carbide Bidding Procedures 
2009 Announcement of Second Bidding Round for Talc 
and Silicon Carbide 
2009 Second Round Silicon Carbide Bidding Procedures 
1994 CCCMC Charter 2001 CCCMC Charter  
                                                      
23 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-6. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 12 
  
  The United States' and Mexico's claims Measures i.e., Legal Instruments 
Export Licensing 
The authorization granted to MOFCOM to 
impose various conditions on the exportation of 
bauxite, coke, fluorspar, manganese, silicon 
carbide and zinc including the quantities of the products that can be exported, the price of 
products that can be exported, qualifications 
that exporters must possess in order to export, or any other conditions is inconsistent with 
Article XI:1 of the GATT 1994, and with 
Paragraph 1.2 of China's Accession Protocol and Paragraphs 162 and 165 of China's Working 
Party Report. Foreign Trade Law (Articles 2, 14-19, 34, 61, 63, 64)  
Regulation on Import and Export Administration 
(Articles 4, 35-41, 43, 44, 64-66)  
2008 Export Licence Administration Measures Measures for Administration of Licensing Entities 2008 Export Licensing Working Rules 2009 Graded Export Licensing Entities  Catalogue 2009 Export Licensing Catalogue 
Minimum Export Pricing24:  Imposition of an MEP Requirement  
The imposition of a minimum export price 
requirement on exporters of bauxite, coke, fluorspar, magnesium, silicon carbide, yellow 
phosphorus and zinc is inconsistent with 
Article XI:1 of the GATT 1994. Measures for Administration of Trade Social 
Organizations  (Articles 2,8, 14, 16, 21)  
Regulations for Personnel Management of Chambers of 
Commerce (Articles 4, 8, 13, 17)  
1994 CCCMC Charter 
2001 CCCMC Charter Export Price Penalties Regulations Measures for Administration of Licensing Entities Rules for Coordination of Customs Price Review Customs Export Price Review Rules Provisional Rules on Export PVC CCCMC PVC Rules Online PVC Instructions CCCMC Export Coordination Measures CCCMC Bauxite Branch Coordination Measures Bauxite Branch Charter "System of self-discipline " 
Minimum Export Pricing:  Admini stration of the MEP Requirement 
The use of the Price Verification and Chop 
procedure to administer yellow phosphorus 
exports by the CCCMC is inconsistent with 
Article X:3(a) of the GATT 1994. Measures for Administration of Trade Social 
Organizations 
Regulations for Personnel Management of Chambers of 
Commerce 
1994 CCCMC Charter 
2001 CCCMC Charter Customs Export Price Review Rules Customs Export Price Review Coordinating Rules  Provisional Rules on Export PVC Online PVC Instructions 
Minimum Export Pricing:  Publication of the MEP requirement 
The failure to publish certain measures 
providing rules and details on how the CCCMC  coordinates export prices is inconsistent with 
Article X:1 of the GATT 1994. CCCMC PVC Rules 
CCCMC Branch-Specific Coordination Measures 
Customs Export Price Review Rules 
                                                      
24 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-7.  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 13 
  
  The United States' and Mexico's claims Measures i.e., Legal Instruments 
 Customs Export Price Review Coordinating Rules  
Provisional Rules on Export PVC 
 
2. The European Union 
3.3 The European Union requests that the Panel make the following findings:  
 
The European Union's claim Measures i.e., Legal Instruments 
Export Duties25 
The application of temporary export duties to 
bauxite, coke, fluorspar, magnesium, manganese, silicon metal, and zinc is inconsistent with Paragraph 11.3 of China's 
Accession Protocol. 
The application of speci al export duties to 
yellow phosphorus is inconsistent with Paragraph 11.3 of China's Accession Protocol. Customs Law (Articles 2, 3, 53, 55, 60)

Export Quota Administration Measures (Articles 4, 9, 
11, 36, 37) 
2009 Tariff Implementation Program 
Export Quotas26 
The application of export quotas to bauxite, 
coke, fluorspar and silicon carbide and the 
application of an export prohibition on zinc is inconsistent with Article XI:1 of the 
GATT 1994, and with Paragraph 1.2 of China's 
Accession Protocol and Paragraphs 162 and 
165 of China's Working Party Report. 
 The failure to publish the total amount and 
procedure for the allocation of a zinc export 
quota is inconsistent with Article X:1 of the GATT 1994. Foreign Trade Law (Articles 19, 61)  
Regulation on Import and Export Administration 
(Articles 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 64, 65, 
66, 67, 70)  
Export Quota Administration Measures  (Articles 4, 9, 
11, 17, 18, 19, 20, 21, 22, 23, 25, 26, 31)  
Export Quota Bidding Measures (Articles 3, 8, 9, 10, 
11, 13, 14, 16) 
Export Quota Bidding Implementation Rules (Articles 2, 
3, 4, 5, 6)  
2009 Export Licensing Catalogue 2009 Coke Export Quota Application Procedure 2010 First Batch Coke Export Quota for FIEs 2009 First Batch Coke Export Quotas  2009 Second Batch Coke Export Quota  2009 First Batch Coke Export Quotas for FIEs 2009 Second Batch Coke Export Quotas for FIEs 2009 First Round Export Quota Bidding Announcement 
2009 Second Round Export Quota Bidding 
Announcement 
2009 Export Quota Amounts 
2009 First Round Bauxite Bidding Procedures 
2009 Announcement of Second Bidding Round for Talc 
and Silicon Carbide 
2009 First Round Silicon Carbide Bidding Procedures 
2009 Second Round Silicon Carbide Bidding 
                                                      
25 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-5. 
26 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-6. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 14 
  
  The European Union's claim Measures i.e., Legal Instruments 
Procedures 
2009 First Round Fluors par Bidding Procedures 
Export Quotas:  Allocation27 
The requirement that exporter applicants 
demonstrate "certain levels of volumes exported or supplied for export" in order to 
have the right to participate in coke quota 
allocation procedures is inconsistent with Paragraph 1.2 of China's Accession Protocol, in 
combination with Paragraph 83(a) of China's 
Working Party Report, as well as paragraphs 5.1 and 1.2 of China's Accession Protocol, in 
combination with Paragraph 83(d) of China's 
Working Party Report.  
The requirement that fo reign enterprises and 
individual exporter applicants demonstrate "certain levels of volumes exported or supplied 
for export" in order to have the right to 
participate in coke quota allocation procedures, is inconsistent with Paragraph 5.2 of China's  
Accession Protocol, and Paragraph 1.2 of 
China's Accession Protocol, in combination with Paragraphs 84(a) and 84(b) of China's 
Working Party Report. 
 
The requirement that exporter applicants 
demonstrate certain minimum capital requirement in order to have the right to export 
coke is inconsistent with Paragraphs 5.1 and 1.2 
of China's Accession Protocol, in combination with Paragraphs 83(b), 83(d) and 84(a) of 
China's Working Party Report.  2009 Coke Export Quota Application Procedure 
The requirement that exporter applicants 
demonstrate "certain levels of volumes 
exported or supplied for export" in order to have the right to participate in  bauxite, silicon 
carbide and fluorspar quota bidding procedures 
is inconsistent with Paragraph 1.2 of China's Accession Protocol, in combination with 
Paragraph 83(a) of China's Working Party 
Report, as well as Paragraphs 5.1 and 1.2 of China's Accession Protocol, in combination 
with Paragraph 83(d) of China's Working Party 
Report.  
The requirement that fo reign enterprises and 
individual exporter applicants demonstrate "certain levels of volumes exported or supplied 
for export" in order to have the right to 
participate in  bauxite, silicon carbide and Export Quota Bidding Measures (Article 11) 
Export Quota Bidding Implementation Rules  (Article 6)  
2009 First Round Export Quota Bidding Announcement 
2009 Second Round Export Quota Bidding 
Announcement 
                                                      
27 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-6.  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 15 
  
  The European Union's claim Measures i.e., Legal Instruments 
fluorspar quota bidding procedures is 
inconsistent with Paragraph 5.2 of China's 
Accession Protocol and Paragraph 1.2 of 
China's Accession Protocol, in combination 
with Paragraphs 84(a) and 84(b) of China's Working Party Report. 
 
The requirement that exporter applicants demonstrate certain minimum capital 
requirement in order to have the right to export 
bauxite, silicon carbide and fluorspar is inconsistent with Paragraphs 5.1 and 1.2 of 
China's Accession Protocol, in combination 
with Paragraphs 83(b), 83(d) and 84(a) of China's Working Party Report. 
Export Quotas:  Administ ration of export quota direct allocation system 
The requirement to consider, inter alia , an 
applicant's "business management/operation 
capacity" in determining whether to allocate "directly" export quotas to a particular exporter 
applicant, and the amount to be allocated to that 
exporter applicant is inconsistent with Article X:3(a) of the GATT 1994. Export Quota Administration Measures  (Article 19) 
Export Quotas:  Publication of Export Quotas 
Failure to publish the export quota for zinc ores 
and concentrates.  Export Quota Administration Measures  (Article 9, 11)  
Export Licensing:  Non- Automatic Export Licences28 
China's non-automatic export licences on 
bauxite, coke, fluorspar, manganese, silicon 
carbide are inconsistent w ith Article XI:1 of the 
GATT and with Paragraph 1.2 of China's Accession Protocol, in combination with 
Paragraphs 162 and 165 of China's Working 
Party Report.  Foreign Trade Law (Articles 19, 61)  
Regulation on Import and Export Administration 
(Articles 33, 35, 43)  
2008 Export License Administration Measures (Articles 
3, 4, 5, 9, 10, 11, 19, 20, 21, 22, 28, 30, 31)  
2008 Export Licensing Working Rules (Articles 5, 6, 8, 
9, 10, 17, 18, 19)  
Measures for Administration of Licensing Entities 
(Article 4) 
2009 Graded Export Licensing Entities  Catalogue  2009 Export Licensing Catalogue 
China's non-automatic export licences on 
bauxite, coke, fluorspar, manganese, silicon 
carbide Inconsistent with Paragraph 5.1 and Paragraph 1.2 of China's Accession Protocol in 
combination with Paragraphs 83 and 84 of 
China's Working Party Report. Foreign Trade Law (Articles 19, 61)  
Regulation on Import and Export Administration 
(Articles 33, 35, 43)  
2008 Export License Administration Measures (Articles 
3, 4, 5, 9, 10, 11, 19, 20, 21, 22, 28, 30, 31)  
2008 Export Licensing Working Rules (Articles 5, 6, 8, 
9, 10, 17, 18, 19)  
Measures for Administration of Licensing Entities 
(Article 4) 
2009 Graded Export Licensing Entities  Catalogue  
2009 Export Licensing Catalogue 
                                                      
28 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-6. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 16 
  
  The European Union's claim Measures i.e., Legal Instruments 
Export Licensing:  Publication of  Export Licensing Requirements 
Alternatively to the claim under Paragraph 5.1 
and Paragraph 1.2 of China's Accession Protocol, in combination with Paragraphs 83(d), 84(a) and 84(b) of China's Working 
Party Report, the failure to publish the 
definition and list of "other materials required by China's Ministry of Commerce", or 
"documents of approval issued by the Ministry 
of Commerce", or the failure to publish the definition and method of verification of the 
"business qualifications" that applicants must 
have in order to be allocated an export licence 
for certain forms of bauxite, coke, fluorspar, 
manganese, silicon carbide and zinc, or to determine the amount to be exported, is 
inconsistent with Article X:1 of the 
GATT 1994. Measures for the Administration of Export Licences 
(Article 5) 
Working Rules on Issuing Export Licenses (Articles 5 
and 8) 
Export Licensing:  Administration  of Export Licensing Requirements 
Alternatively, to the claim under Paragraph 5.1 
and Paragraph 1.2 of China's Accession Protocol, in combination with Paragraphs 83(d), 84(a) and 84(b) of China's Working 
Party Report the absence of a definition and list 
of "other materials required  by China's Ministry of Commerce" or limit on the 
discretion to require such materials, as well as 
the absence of a definition of "documents of approval issued by the Ministry of Commerce" 
or limit on the discretion to issue such 
additional "documents of approval" is inconsistent with the requirements of uniform, 
impartial and reasonable administration within 
the meaning of Article X:3(a) of the 
GATT 1994. Measures for the Administration of Export Licences 
Working Rules on Issuing Export Licenses 
Minimum Export Pricing: 29  Imposition of an MEP Requirement 
The imposition of a minimum export price 
requirement on exporters of bauxite, coke, 
fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc is inconsistent with 
Article XI:1 of the GATT 1994 Measures for Administration of Trade Social 
Organizations  (Articles 2,8, 14, 16, 21)  
Regulations for Personnel Management of Chambers of 
Commerce (Articles 4, 8, 13, 17)  
1994 CCCMC Charter 
2001 CCCMC Charter Export Price Penalties Regulations Measures for Administration of Licensing Entities Rules for Coordination of Customs Price Review Rules on Price Reviews of Export Products Provisional Rules on Export PVC  CCCMC PVC Rules 
                                                      
29 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-7.  WT/DS394/R 
 WT/DS395/R 
 WT/DS398/R 
 Page 17 
  
  The European Union's claim Measures i.e., Legal Instruments 
Online PVC Instructions 
CCCMC Export Coordination Measures CCCMC Bauxite Branch Coordination Measures 
Bauxite Branch Charter 
"System of self-discipline" 
Minimum Export Pricing:  Admini stration of the MEP Requirement 
The use of the Price Verification and Chop 
procedure to administer yellow phosphorus 
exports by the CCCMC is inconsistent with Article X:3(a) of the GATT 1994. Measures for Administration of Trade Social 
Organizations 
Regulations for Personnel Management of Chambers of 
Commerce 
1994 CCCMC Charter 
2001 CCCMC Charter Customs Export Price Review Rules Customs Export Price Review Coordinating Rules  Provisional Rules on Export PVC Online PVC Instructions 
Minimum Export Pricing:  Publication of the MEP Requirement 
The failure to publish certain measures 
providing rules and details on how the CCCMC  coordinates export prices is inconsistent with 
Article X:1 of the GATT 1994. 
 CCCMC PVC Rules 
CCCMC Branch-Specific Coordination Measures Customs Export Price Review Rules Customs Export Price Review Coordinating Rules  Provisional Rules on Export PVC 
 
3.4 The European Union requests, pursuant to Article  19.1 of the DSU, the Panel to recommend 
that China bring its measures into conformity with the GATT 1994 and China's Accession Protocol. 
B. CHINA  
3.5 China requests that the Panel reject certain of the complainants' claims listed in Section III of 
the complainants' Panel Requests, to the extent they  are properly included with in the Panel's terms of 
reference and to find that:30   
(a) The application of temporary export duties a pplied to fluorspar are justified pursuant 
to Article XX(g) of the GATT 1994; and the application of temporary export duties to non-ferrous metal scrap of zinc, magnesium  metal, and manganese metal, and to 
coke, magnesium metal and manganese metal are justified pursuant to Article XX(b) 
of the GATT 1994.   
(b) That the export quota applied to refractor y-grade bauxite is justified pursuant to 
Article XI:2(a) of the GATT 1994, or is ot herwise justified pursuant to Article XX(g) 
of the GATT 1994.  
(c) The export quotas applied to coke and s ilicon carbide are justified pursuant to 
Article XX(b) of the GATT 1994.  
                                                      
30 China's first written submission, para. 873. WT/DS394/R 
WT/DS395/R WT/DS398/R 
Page 18 
  
  IV. ARGUMENTS OF THE PARTIES 
4.1 The arguments of the United States, the European  Union, Mexico and China as set out in the 
executive summaries of their submissions provided to  the Panel are attached to these Reports as an 
addendum (see List of Annexes, pages ix and x). 
V. ARGUMENTS OF TH E THIRD PARTIES 
5.1 Argentina, Brazil, Canada, Chile, Colombia, Ec uador, India, Japan, Korea, Norway, Chinese 
Taipei, Turkey and Saudi Arabia reserved their third- party's rights to participate in the three disputes.  
The European Union (with respect to WT/DS394 and WT/DS398), Mexico (with respect to 
WT/DS394 and WT/DS395), and the United States (with respect to WT/DS395 and WT/DS398) 
reserved their third-party rights to particip ate in the indicated Panel proceedings.  
5.2 Chile, India and Ecuador did not present written submissions, and Argentina, and Turkey did 
not submit oral statements to the Panel.  The ar guments of Brazil, Canada, Colombia, Japan, Korea, 
and Saudi Arabia are set out in their written subm issions and oral statements. Finally, Norway, 
Chinese Taipei, the European Un ion (with respect to WT/DS394 and WT/DS398), Mexico (with 
respect to WT/DS394 and WT/DS395), and the Un ited States (with respect to WT/DS395 and 
WT/DS398), did not present either written submissi ons or oral statements to the Panel.  The 
arguments of the third parties, as set out in th eir submissions, or executive summaries thereof, 
provided to the Panel, are attached to these Reports as an addendum. 
VI. INTERIM REVIEW 
6.1 On 18 February 2011, the Panel issued its Inte rim Reports to the parties. On 4 March 2011, 
the United States, the European Union, Mexico, an d China submitted written requests for review of 
precise aspects of the Interim Reports pursuant to Article 15.2 of the DSU.  On 18 March 2011, the 
United States, the European Union, Mexico, a nd China submitted written comments on each other's 
requests for interim review. No party request ed an additional meeting with the Panel. 
6.2 The numbering of paragraphs and footnotes in the Final Reports has changed from the Interim 
Reports.  The text below refers to the paragra ph and footnote numbers in the Interim Reports 
regarding which the parties requested review.  The parties submitted several editorial revisions as well 
as other linguistic changes, which were not contested by the other parties; the Panel also made minor 
editorial and non-substantive consequential changes as a result of other adjustments.  Such editorial, 
minor and non-substantial changes we re made to paragraphs 7.2, 7. 4, 7.60, 7.63, 7.68, 7.79, 7.80, 
7.82, 7.83, 7.85, 7.86, 7.88, 7.89, 7.90, 7.91, 7.96, 7.97, 7.102, 7.124, 7.151, 7.195, 7.221, 7.224, 
7.227, 7.229, 7.231, 7.232, 7.233, 7.234, 7.246, 7.327 7.345, 7.352, 7.375, 7.376, 7.383, 7.389, 7.394, 7.404, 7.407, 7.415, 7.455, 7.456, 7.457, 7.459, 7.4 63, 7.464, 7.468, 7.469, 7.471, 7.495, 7.504, 7.505, 
7.508, 7.512, 7.516, 7.518, 7.585, 7.588, 7.594, 7.5 99, 7.616, 7.623, 7.754, 7.781, 7.783, 7.860, 7.878, 
7.879, 7.880, 7.965, and 7.1011; and footnotes 54, 524, 525, 526, 527, 546, 680, 1091, 1206, 1232, 
1233 and 1234 .  The Panel has also corrected typographical and other non-substantive errors 
throughout the Report, including those identified by the parties, which are not referred to specifically below.  In order to facilitate understanding of the interim review  comments and changes made, the 
following section is structured to follow th e organization of the Reports themselves. 
A. T
HE DESCRIPTIVE PART OF THE REPORT  
6.3 China requested minor changes to the Descriptiv e Part.  The Panel adjusted paragraphs 1.9, 
1.13 and  footnotes 11, 2.2 and 3.5 accordingly.  WT/DS394/R 
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  B. I
SSUES RELATING TO THE PANEL 'S TERMS OF REFERENCE  
6.4 Regarding paragraphs 7.6, 7.21, 7.24, 7.53, and 7.228 , China argues that the Interim Reports 
reflect an "inaccurate" description of China's pos ition in the dispute regarding the appropriate 
treatment of 2009 measures.  According to China, a "proper description" of China's argument would 
reflect its position that "while the Panel could ma ke findings regarding the 2009 measures, it was not 
entitled to make recommendations." China suggests inter alia  that the Panel substitute the language 
used in the paragraphs at issue with: "[a]lthough China accepted that the Panel could make findings 
regarding the 2009 measures, it defended that the Pa nel could not formulate recommendations".  The 
United States and Mexico disagree with China's re quest and submit that the Panel's description of 
China's position is generally correct.  The European Un ion also submits that the Panel's description of 
its position on the 2009-2010 measures issue is inaccu rate as it never requested the Panel to exclude 
from its terms of reference "amendment or replace ment" of the 2009 measures.  China disagrees with 
the European Union's request and submits that th e Panel's description of the European Union's 
position is generally correct. Finally, the parties also disagree on how the Panel should characterize 
the situation of China with respect to its 2009 an d 2010 measures including in paragraphs 7:26, 7.32, 
7.74. 
6.5 To ensure the most comprehensive description of the parties' arguments on this issue, the 
Panel has adjusted the relevant paragraphs of  its Panel Reports acco rdingly and expanded its 
references to the parties' submissions, including in paragraphs 7.5, 7.6, 7.7, 7.21, 7.24, 7.26, 7.30, 
7.31, 7.32, 7.33, 7.53, 7.56, 7.74 and 7.228. 
C. EXPORT DUTIES  
6.6 Regarding paragraphs 7.70, 7.71, 7.79, 8.2(d), 8.9(d) and  8.16(d), China and the complainants 
disagree as to the conclusion the Panel should reac h with respect to China's measure imposing an 
export duty on yellow phosphorus. 
6.7 The Panel has therefore adjusted its language to  make clear that the relevant Chinese measure 
imposing an export tariff on yellow phosphorus at the time of the Panel's establishment did not 
include the special duty, which was removed by the Adjustment of Export Tariffs Circular.  Thus, at 
the time of the Panel's establishment, yellow phosph orous was subject to the regular export duty of 
20%, which is consistent with the maximum rate lis ted in Annex 6 of China's Accession Protocol and 
therefore consistent with China's WTO obligations .  The Panel makes no findings with respect to 
China's 2009 Tariff Implementation Program  measure, (that is challenged by the complainants) which 
applied a special duty rate on yellow phosphorus  but which was removed before the Panel's 
establishment.   
6.8 The United States and Mexico request the Panel to refer to yellow phosphorus "special duty" 
in paragraph  7.63, to state "as of 21 December" instead of "on 21 December" in paragraphs. 7.79, 
7.82, 7.85, 7.88, 7.93, and 7.96, and to add that th e Panel's conclusions in pa ragraphs 7.80, 7.83, 7.86 
and 7.97 on export duties claims for which China invokes an Article XX justification could only be 
"provisional". These requests were not contested. The Panel adjusted these paragraphs accordingly. 
6.9 Finally, China suggests changes to paragraph 7.73 where the Panel states that China had 
removed its export duties on bauxite as of 1 January; the United States disagreed in part.  The Panel 
adjusted the paragraph to meet the concerns raised by both parties. WT/DS394/R 
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  D. A
PPLICABILITY OF GATT  ARTICLE  XX  TO VIOLATION OF PARAGRAPH  11.3  OF CHINA 'S 
ACCESSION PROTOCOL  
6.10 Regarding paragraph 7.120, China requested clar ification of the manner in which its argument 
is presented with respect to the applicability of  GATT Article XX to violations of its Accession 
Protocol. The complainants also requested minor clarif ications with respect to the text in paragraphs 
7.141, 7.142, 7.144 and 7.147, which China did not oppose.  The Panel adjusted those paragraphs accordingly and made conseque ntial changes to paragraphs  7.106, 7.107, 7.109, 7.110, 7.111, 7.112, 
7.113, 7.121, 7.122, 7.125 and 7.126 to m eet the concerns raised by both parties. 
6.11 The European Union, regarding paragraph 7. 136, and all the complainants regarding 
paragraph 7.140 , and the United States and Mexico, with respect to paragraphs 7.150, 7.153 and 
7.158, requested certain deletions and clarifica tions and suggested changes that were opposed by 
China.  With a view to ensuring clarity in the Pa nel's explanation that the exceptions contained in 
GATT Article XX are not available to export duties commitments included in China's Accession 
Protocol, a number of consequential changes we re introduced into paragraphs 7.139 to 7.152 . 
6.12 Regarding paragraph 7.160, the complainants requested that the Panel refrain from any 
comment on the nature and extent of China's ac cession commitments.  Chin a opposed this request.  
The Panel revised slightly the text of this paragraph. 
E. E
XPORT QUOTAS  
6.13 China requested a series of minor modifications and clarifications to the Panel's description of 
its export quota regime, including in paragraphs 7. 172, 7.174, 7.179, 7.183, 7.185, 7.192 and footnote 
265, 7.195, 7.200,7.214, 7.219 to 7.223, 7.227 and 7.764.  The complainants did not oppose those requests, so the Panel adjust ed its description accordingly. 
6.14 Regarding paragraph 7.175, China requests th e Panel to clarify that, under Chinese law, 
administrative authorities such as MOFCOM may only impose administrative sanctions, but not 
criminal sanctions, for unlawful exportation of goods s ubject to restriction, or for forging or altering 
import or export licences, quota certificates, or other documents. The United States and Mexico request the Panel not to revise this paragraph to re fer only to administrative sanctions, but instead, to 
replace the term "MOFCOM" with "China".   Th e Panel adjusted this paragraph accordingly. 
6.15 Regarding paragraph 7.180, China requests the Panel to clarify that China does not require 
enterprises that seek to receive a zinc quota share for the first ti me to meet a prescribed quota 
utilization rate or return unused annual quotas. The European Union objects to China's request.  The 
Panel has modified the paragraph. 
6.16 Regarding paragraph 7.189 and footnote 258 , China requests the Panel to refer to the group of 
relevant administrative provisions governing export licences, and not to an undefined "regulations on 
administration of export licenses". The United States and Mexico object to China's request.  
Consequently, the Panel has updated the relevant paragraph to refer to the appropriate measures (the 
2008 Export License Administration Measures) , and the footnote to refer to the 2001 Export License 
Administration Provisions , the 2004 Export License Administration Measures , and the 2008 Export 
License Administration Measures . 
6.17 Regarding paragraphs 7.219 to 7.223, China re quests the Panel to remove the reference on 
export quotas in respect of provisions that, in its view, do not "confer" or "relate to" "the authority to 
impose an export quota on the products at issue".  The complainants object to China's request and 
submit that the measures identified by the Panel ope rate together to establish China's export quota for  WT/DS394/R 
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  each identified product, including measures im posing an export licensing framework and quota 
administration measures, such as those relating to the operation of the quota bidding process.  As stated in paragraph 7.218 of the Interim Reports, the Panel considers that findings on such measures 
are necessary so that annually re newed measures do not evade WTO dispute settlement review merely 
through their expiration during the Panel proceedings.  In light of this view, the Panel declines to 
make the changes proposed by China.  The Panel has modified the text of paragraph 7.218 of the Interim Reports to clarify its position co ncerning the measures discussed above.   
F. C
HINA 'S DEFENCES TO THE APPLICAT ION OF EXPORT RESTRICTIONS  
6.18 Regarding paragraph 7.244, China requests the Panel to modify and expand its reference to 
China's submissions when describi ng the chemical and physical characteristics of refractory-grade 
bauxite.  China contends that the complainants ha ve also defined the product in the same manner.  
The European Union submits that it never defined or  described refractory grade bauxite in the context 
of this dispute, but has only take n note of China's definition and d escription, and therefore objects to 
China's request to indicate that the European Union defined the product in the same manner.  In 
addition, the European Union requests the Panel not attribute to the European Union the content of 
Exhibit CHN-126, entitled "Report of the Ad-hoc Working Group on Defining Critical Raw Materials".  The United States and Mexico did not comment on China's proposed change. 
6.19 The Panel has taken into account China's requ est. The Panel has also taken note of the 
European Union's concern with attributing statem ents made in Exhibit CHN-126 to the European 
Union.  Finally, the Panel has reflected China's request to expand reference to its submissions. 
6.20 Regarding paragraph  7.247, the European Union requests th e Panel to delete the last sentence 
that reads: "In any event, Article XI:2(a) by its  terms must be viewed through the prism of the 
Member applying the restriction".  The European Uni on states that the meaning of this sentence is not 
clear. China objects to the European Union's re quest.  The United States and Mexico did not 
comment.  The Panel considers that the statement referred to by the European Union is clear.  
Accordingly, the Panel retains this language. 
6.21 Regarding paragraph 7.271, China requests the Panel to include a description of the 
complainants' objection to the use of Article XXXVI of the GATT 1994 as relevant context for 
interpreting Article XI:2(a).  China requests in partic ular that the Panel refer to comments made in the 
United States' response to Panel questions and closing statement at the first substantive meeting.  The 
European Union submits that it has never argue d that Article XXXVI of the GATT 1994 does not 
apply to China and the United States and Mexico di d not comment.  The Panel adjusted the relevant 
language.   
6.22 Regarding paragraph  7.276, the European Union requests the Panel to remove the discussion 
of Article XXI of the GATT 1994, stating that Article XXI is not at issue in the present dispute, nor 
has it been discussed by the parties to the dispute. China objects to the European Union's request.     
Accordingly, the Panel retains the language. 
6.23 Regarding footnote 452, the European Union requests the Panel to rephrase its discussion to 
reflect the European Union's argument made in connection with Article XX(i) of the GATT 1994.  The European Union argues that it referred to this pr ovision to show that China's interpretation of the 
term "essential product" was too broad, but did not argue that inputs can never be "essential products" 
under Article XX(i). China objects to the European Un ion's request.  The Panel has modified the text 
of the footnote to paraphrase more closely the Euro pean Union's argument in  paragraph 192 of its 
second written submission, without modifying the Panel's conclusion. WT/DS394/R 
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  6.24 Regarding paragraph 7.280, the European Uni on requests the Panel to remove the last 
sentence of the paragraph, arguing that this sentence places emphasis on the notion of "critical shortage", while the remainder of the paragra ph addresses the notion of "essential products".  China 
submits that the request can better be addressed by modifying rather than deleting the sentence 
through removal of the reference to "shortages".  The Panel considers the modification proposed by 
China clarifies the sentence in re lation to the rest of the paragr aph, and accordingly modified the 
relevant language. 
6.25 Regarding paragraph 7.281, the European Union requests the Panel to modify the text to 
indicate that no agreement was reached on the conditi ons that should be met in order to determine 
whether a good is "essential" within the meaning of Article XI:2(a), including products for use by a 
downstream industry.  The European Union request s the Panel to conclude that the discussion on 
merino sheep does not meet the conditions for the application of Article 31(2)(a) of the Vienna 
Convention in relation to the de finition of the terms "essential products".  China objects to the 
European Union's request to modify the final tw o sentences of the discussion.  The Panel considers 
that paragraph 7.281  as formulated correctly reflects the Panel's view on the relevance to its 
interpretation of the discussions.  Nevertheless, the Panel has incorporated a footnote to clarify its 
views. 
6.26 Regarding paragraph 7.344, China requests the Panel to add an additional element to its 
assessment of the complexity of determining a subs titute for refractory-grade bauxite by referring not 
only to the complexity in switching from one material  to the next, but also in switching from one 
supplier  to the next.  The European Union objects to China's proposed change, submitting that Exhibit 
CHN-126 does not express the view of the European Union or the arguments in this dispute.  The European Union further submits that there is no evidence on record to support the conclusion that 
changing the type of material used for refractory applications would necessarily entail a change in  
supplier. 
6.27 The Panel notes that China's proposed modifica tion is based on a statement it made in the 
second substantive meeting of the Panel in light of  Exhibit CHN-511, not Exhibit CHN-126 as raised 
by the European Union when commenting on China' s requested change.  Unlike Exhibit CHN-126, 
Exhibit CHN-511 does not include any disclaimer that the report does not represent the views of the 
Commission.  Exhibit CHN-511, however, calls attention to the time and costs involved with 
switching suppliers.  Accordingly, the Panel consider s it appropriate to reflect the requested change.  
In doing so, the Panel does not consider that Chin a's proposal requires reaching the conclusion that 
changing the type of material used would necessarily  entail a change in supplier.  For clarity, the 
Panel has included the statement "and potentially, from one supplier to the next" and relevant citation. 
6.28 Regarding paragraph 7.351, the European Union requests the Panel to remove the last two 
sentences of paragraph 7.351 addressing the remaini ng life span of the good at issue and capacity or 
reserve that may be developed.  The European Union argues that these sentences address the factual 
situation of whether there is currently a "shortage" in the availability of the good, and not the question 
of whether China faces a "critical shortage" within the meaning of Article XI:2(a) of the GATT 1994.  
China objects to deleting the final two sentences of the paragraph.  In addition, China requests the 
Panel to reflect its response to the complainan ts' assertion that refractory-grade bauxite has a 
remaining lifespan of 91 years, instead of 16 years.  China also requests the Pa nel to provide a citation 
to its argument that lifespan reserve estimates coul d not change due to advances in reserve detection 
or extraction techniques.  The complainants do not  object to China's request to add references. 
6.29 The Panel declines to make the change requested  by the European Union. In the absence of 
objection, the Panel refers to China's response in its second oral statement.    WT/DS394/R 
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  6.30 Regarding paragraph 7.352, China requests the Pa nel to explain its statement that China has 
not provided specific evidence that there are "new" barriers to investment that have disrupted the 
availability of refractory-grade bauxite.  The Europ ean Union submits that the word "new" should be 
replaced with "now".  The Panel revised the sentence by removing the word "new". 
6.31 All parties make comments on the Panel's use of the terms "ba uxite" and "refractory bauxite" 
and high-alumina clay.  The Panel understands that China's export restriction applies to bauxite while 
China's justifications pursuant to GATT Article XI.2(a) and GATT Article XX(g) are limited to 
refractory-grade bauxite (referred to interchang eably as high-alumina clay), which comprises some 
75% of Customs Commodity Code 2508.3000.00.  Therefore the Panel adjusted language in 
paragraphs 7.238, 7.239, 7.323, 7.324,  7.416 and its footnote 625, and 7.612,  accordingly. 
6.32 With respect to paragraphs 7.375, 7.376 and 7.38 3, the complainants challenge the Panel's use 
of the Appellate Body jurisprudence under GATT Artic le XX(b) when referring to a "comprehensive 
policy comprising a multiplicity of interacting m easures", for justifications made pursuant to 
paragraph (g) of Article XX.  The complainants' re quest was contested by China.  The Panel made 
minor changes to the relevant paragr aphs in order to ensure clarity.  
6.33 In paragraph 7.381 and its footnote 588, China wants the Panel to add references to its 
arguments that WTO Members' actions over their natural resource-based products must in no case 
interfere with their sovereignty ove r natural resources.  It asks the Panel to emphasize the need for 
developing countries to make optimum use of their resources for their development, as they deem 
appropriate, including the processing of their raw ma terials.  China also asks the Panel to introduce 
references to Mexico's prior statement to that e ffect.  The complainants oppose all these requests by 
China.  With a view to ensuring that China's arguments are fully reflected, the Panel adjusted 
paragraph 7.356, 7.381 and footnote 588.  
6.34 The United States and Mexico request clarificat ion of the Panels' definition of the term 
"conservation" in paragraph 7.372 and its footnote 575.  China in part contests this request.  The Panel 
adjusted the language. On that occasion the Panel has also clarify the term "restricton" in paragraph 
7.394 on restriction. 
6.35 With respect to paragraphs 7.389, 7.390 and 7.459 , China requests the Panel to modify the 
description of its arguments and that of the Eur opean Union with respect to the even-handedness 
requirement of paragraph (g) of Article XX.  The European Unon contests. The Panel revised slightly 
the description of both parties's arguments. 
6.36 With respect to paragraph 7.429, China requests de letion of this paragraph, which refers to an 
author who has argued that export restrictions can ha ve the same effect as a subsidy.  The European 
Union opposes any such change and the United States and Mexico suggest adding a precision.  The Panel modified the language accordingly and added a footnote to clarify that it was not referring to a 
subsidy within the meaning of the SCM Agreement.   
6.37 The United States and Mexico request for consiste ncy considerations that the Panel refer to 
"WTO-consistent" alternatives and not to "less-trad e restrictive" alternatives.  China opposes this 
change.  The Panel notes that the Appellate  Body uses both expressions interchangeably.  
Nonetheless, the Panel adjusted pa ragraph 7.491, 7.5 63, 7.588 and the titles before paragraphs 7.488, 
7.559, 7.563. and 7.609. 
6.38 With respect to paragraphs 7.457  and 7.465 , the complainants raise objections to the Panel's 
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  as to the Panel's comments on the new efforts by Ch ina and reflected in some of China's new 2010 
measures.  China opposes such changes.  The Panel introduced minor linguistic changes.   
6.39 The European Union requests various revisions of paragraphs that refer to the Panel's 
assessment of the evidence put forw ard by the parties in the context of China's defence under GATT 
Article XX(b).  With respect to paragraph 7.51 2, the European Union requests deletion of this 
paragraph whereas China opposes any deletion.  With respect to paragraphs 7.537 on the evidence 
submitted for EPRs, and to 7.514 (and the related para graph 7.525) dealing with the impact of the use 
of export restrictions on growth and pollution, the European Union requests deletion or rephrasing of 
certain phrases.  China opposes this request. This is also the case w ith regard to paragraphs 7.518, 
7.528  and 7.537.   
6.40 With respect to paragraph 7.600 , the United States and Mexico request the Panel to include a 
reference to their argument that secondary productio n of manganese metal is not feasible and did not 
occur.  China contests this and requests a reference be inserted to its evidence in this regard.  The 
Panel adjusted all of these paragraphs. 
G. E
XPORT QUOTA ALLOCATION AND ADMINISTRATION  
6.41 Regarding paragraph 7.632, China requests the Panel to modify its description of China's 
defence regarding claims under Article X:1 with respect to publication of the zinc quota.  The European Union comments that the current text acc urately reflects the arguments advanced by the 
European Union and China and that there is no need  for modification. The Panel notes that paragraph 
7.632 is in the nature of a brief outline of the complainants' export quota allocation and administration 
claims and, consequently, will not include all the parties' arguments. However, the Panel agrees to 
make additions to the text as proposed by China.  
6.42 Regarding paragraph 7.769, China states that the first sentence of paragraph 7.769 may 
suggest that the translation of the Chinese term in to "operation capacity" is disputed by the European 
Union.  The European Union considers that the cu rrent text does not need to be amended.  The 
European Union continues that the preceding para graph introduces the European Union's claim and 
the use of the term "business management cap acity" and that paragraph 7.679 presents China's 
response and its use of the altern ative term "operation capacity". 
6.43 The Panel considers that when read together  with paragraph 7.678, paragraph 7.679 makes 
clear that China disputes the translation of this phr ase by the European Union.  The Panel also refers 
to footnote 1047 to paragraph 7.717 wherein it described th e use of this term by the parties.  As this is 
the first substantive discussion by the Panel of the operation capacity criterion, this seems the most 
appropriate place for the footnote referred to above.  The Panel agrees with China that there was no 
dispute as to the correct translation, but declines to  make the modification requested by China for the 
stated reason.  
6.44 Regarding paragraph 7.701, the European Union suggests that the Panel's description of the 
panel report in Argentina – Hides and Leather  may be confusing.  It proposes a description of that 
report which refers to the panel in that case finding a violation of Article X:3(a) on the basis that the 
disputed administration "caused prejudice to traders" .  China asks the Panel to reject the European 
Union's request, explaining that China has not been able to identify a passag e in the report reflecting 
the standard asserted by the European Union. 
6.45 The Panel has decided to maintain th e description of the panel report in Argentina – Hides 
and Leather  in light of the fact that it has been unable to find a reference in Argentina – Hides and 
Leather  to the description proposed by the European Union.    WT/DS394/R 
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  6.46 Regarding paragraph 7.727, China asks the Pane l to amend this paragraph to reflect its 
argument that a complainant must show that a measure "necessarily leads to" WTO-inconsistent 
administration. The European Union considers that Ch ina's suggestion is not justified, stating that the 
Panel has already considered China's interpretation of  the phrase "necessarily leads to" and rejected it.  
The European Union notes that in paragraph 7.72 7, the Panel discusses other aspects of China's 
arguments and that there is no need to make any re ference to the issue of "n ecessarily leads to" as this 
has already been resolved. 
6.47 The Panel agrees to modify the final sentence of  paragraph 7.727 so as to reflect the aspect of 
its arguments requested by China, but it does so without deleting the phrase proposed by China. 
6.48 Regarding paragraph 7.770, China asks the Panel to amend the list of measures as relevant to 
the administration of China's export quotas, in particular, the CCCMC's involvement.  The United States and Mexico submit that the measures identif ied operate together to establish China's export 
quota regime, including the administration of quotas, and argue that China's contentions are not 
supported by the record in the dispute.  The Panel has modified paragraph 7.770  and made 
consequential changes to paragraphs 7.771 and 7.77 2 to reflect that the measures listed in paragraph 
7.770 have been submitted by the United States and Mexico. 
6.49 Regarding paragraphs 7.816 to 7. 838 and 7.845, China requests the Panel to insert text to 
distinguish between what it describes as the "scope" and the "content" of application of Article VIII:1(a).  Specifically, China asks the pa nel to include the phrase "imposed on or in 
connection with importation or exportation" in certain  locations (in paragraphs 7.829, 7.830, 7.831, 
7.838, and 7.845) as ell as additional text.  China cont ends that the Panel means that Article VIII:1(a) 
applies solely to fees and charges imposed on or in connection with importation or exportation, and 
prohibits such fees and charge only insofar as they are not limited to the approximate costs of services 
rendered.  The complainants do not object to this change.  The Panel has included China's requested 
changes to paragraphs 7.829, 7.830, 7.831, 7.838, and 7.845 to clarify its analysis. 
6.50 Regarding paragraph 7.856, China requests the Panel to both revise the structure of the 
paragraph and provide greater detail concerning its me thod of interpretation and the application of its 
interpretation to conclude that the bid-winning pri ce is not a "charge applied to exporters" within the 
meaning of Paragraph 11.3 of China's Accession Pr otocol.  China requests the Panel to address the 
interpretation of Paragraph 11.3 and application of this interpretation separately, and to expand upon 
analysis and application of its interpretation.  Th e United States and Mexico object to China's request 
for the Panel to provide further detail regarding its  interpretation of Paragr aph 11.3 and consequent 
assessment of the complainants' claim.   
6.51 The Panel explained that it would interpret Pa ragraph 11.3 of China's Accession Protocol in 
accordance with the general rule of  treaty interpretation as codified  in Article 31 of the Vienna 
Convention, and therefore sees no reason to furt her expand upon its approach.  The Panel has 
included a cross-reference to its considerati on of the term "charge" in paragraph 7.819 .   
H. E
XPORT LICENSING  
6.52 Regarding paragraph  7.860, the United States requests the Panel to distinguish between 
products that are subject to export quota administra tion and those that are subject only to licensing 
requirements.  China does not object to this change .  The Panel has incorporated the United States' 
requested change.   
6.53 Regarding paragraphs 7.884 a nd 7.927, China requests the Panel to include a description of 
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  asks the Panel to include the additional description that the 2008 Export Licensing Working Rules  are 
"an internal guide for the personnel of the license-is suing authorities on how to apply the applicable 
laws and regulations",  with citation.   
6.54 The United States and Mexico submit that the final sentence of paragraph 7.927 sets out 
China's arguments on the role and function of the 2008 Export Licensing Working Rules  and should 
not be relocated.  They submit that paragraph 7.884 sets forth undisputed facts relating to the 
operation of China's export licensing system.  The Un ited States and Mexico do not however object to 
China's request to amend the text of this sentence. 
6.55 The Panel has included additional description of the 2008 Working Rules on Issuing Export 
Licenses , but considers it inappropriate to move  the description to paragraph 7.884. 
6.56 Regarding paragraph  7.906, the United States requests the Panel to state that export 
restrictions under Articles XI, XIII, XVIII, XIX,  XX and XXI could be implemented through a 
licensing regime, as opposed necessarily being impl emented through such regime.  China does not 
object to the change, but requests that the second sente nce of this paragraph be revised to substitute 
"may" for "would necessarily", and to refer to a licen sing regime as an example.  Accordingly, the 
Panel has reflected the parties' requests. 
6.57 Regarding paragraph  7.907, China requests the Panel to  include an additional sentence 
referring to its argument that "there is no reason to assume that" the drafters intended to exclude 
contextual guidance from the Import Licensing Agreement for the purposes of interpreting 
Article XI:1.  The European Unio n requests the Panel to reject Ch ina's proposed changes, submitting 
that the current paragraph accurately represents th e relevant views.  The Panel considers China's 
views on the relevance of the Import Licensing Agreement  as context for interpretation of Article XI:1 
are adequately reflected in the first sentence of paragraph 7.907, and therefore declines China's 
request to modify the text.  The Panel has include d the additional reference proposed by China at the 
end of the first sentence to paragraph 7.907. 
6.58 Regarding footnote 1290, the European Union requ ests the Panel to refer to Exhibit JE-73, the 
Regulation on Import and Export Administration .  China does not object to this change, but asks the 
Panel to also refer to Exhibit CHN-152 and its translation of the Regulation on Import and Export 
Administration  in footnotes 1290, 1291 and 1292.  The Panel has incorporated the requested changes. 
6.59 Regarding paragraph 7.927, China requests the Panel to clarify the phrase "goods subject to 
quota licence administration" either by replacing it with the phrase "goods subject to quotas directly 
allocated", or by adding a footnote to clarify th e meaning of the phrase.  The complainants do not 
object to this change.  The Panel has incorporated the requested change.   
6.60 Regarding paragraph 7.928 and f ootnote 1309, China requests the Panel to revise the first and 
second sentences to reflect that Article 11(7) of the Measures for the Administration of Licenses for 
the Export of Goods  applies solely to goods that are not subject to a quota, and that the 2010 Export 
Licensing Catalogue includes a notation that export licences for unwrought zinc and manganese will 
be "applied for and granted" upon presenta tion of an export contract in the 2010 
Catalogue, which 
constitutes an "approval" by MOFCOM under Article 11(7). 
6.61 The European Union submits that the current paragraph accurately presents China's view, and 
therefore objects to the change.  The European Un ion further submits that it is not clear how the 2010 
Export Licensing Catalogue  can be understood as an "approval within the meaning of Article 11(7)".  WT/DS394/R 
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  6.62 The Panel has incorporated the changes to the paragraph given that the requested modification 
reflects China's arguments as presented to the Panel.  In addition, the Panel has clarified references to 
aspects of the complainants ' claims concerning goods that are not subject to a quota in paragraphs 
7.883, 7.884, 7.925, 7.929, 7.941, 7.944, 7.948 and 7.950. 
6.63 Regarding paragraph 7.930, the European Union requests the Panel to ha rmonize its reference 
to the Measures for the Administration of Export Licenses .  China does not object to this change.  The 
Panel has incorporated the requested change. 
6.64 Regarding paragraph 7.934, China requests the Panel to delete the paragraph or otherwise 
modify what China describes as an "incomplet e and inaccurate" characterization of China's 
notification to the Market Access Committee of au tomatic and non-automatic licensing rules.  China 
submits that statements made on licensing requireme nts in place amount to an "inference" made by 
the complainants.  In addition, China argues there is  no basis to conclude that any measure notified to 
the Committee and characterized as "quantitative rest rictions" was in reference to the "licensing 
requirement" as opposed to the export quota itself.  Fi nally, China submits that the notification to the 
Market Access Committee does not constitute an independent assessment of whether the measures are 
inconsistent with Article XI:1.  The European Union agrees with China's proposed deletion.  The 
United States and Mexico did not comment. 
6.65 The Panel has removed the second sentence of  paragraph 7.934 given that the Panel's 
discussion does not depend on China's 2008 notificati on to the Committee on Market Access.  The 
Panel has retained the first sentence of paragraph 7. 934 and merged it with the subsequent paragraph. 
6.66 Regarding paragraph 7.936, the European Uni on requests the Panel to remove the language 
"including for numerous reasons similar to tho se sets out in GATT Articles XX and XXI", arguing 
that these provisions as reflected in  Chinese law are not at issue in the present dispute.  China objects 
to the suggest change.  The Panel has re tained its reference to this provision. 
6.67 Regarding paragraph 7.967, the European Union requests the Panel to modify the text to 
conclude that none of the underlying measures impl emented through the export licences at issue is 
justified by any provision of the GATT, and ther efore the export licences are inconsistent with 
Paragraph 1.2 of China's Accession Protocol and Pa ragraph 162 of China's Working Party Report.  
The European Union submits that, pursuant to th ese provisions, China cannot impose a requirement to 
obtain an export licences unless there is justificat ion for imposing the export licence under some 
provision of the GATT 1994.  The European Union c ontends that China has not argued that there is 
some GATT provision that justifies the imposition of its export licences.  Therefore, the European Union considers China's export licences are also in consistent with Paragraph 162 of the Working 
Party Report. 
6.68 China submits that the European Union did not argue that Paragraph 162 requires the repeal 
of "all" export licences unless they can be justified un til its final submission, and that this is a new 
position and fundamentally changes the nature of the European Union's claim.  China objects to this 
change on due process grounds.  In the event the Pa nel were to forgo the exercise of judicial 
economy, as requested by the European Union, Chin a requests the Panel to find that the European 
Union has failed to make a prima facie case of inconsistency. 
6.69
 In light of the European Union's request, the Panel has added language explaining the 
complainants' claims under Paragraphs 162 and 165 as concerns China's export licensing requirements 
at issue.  The Panel does not agree with the request  of the European Union to reverse its decision in 
respect of certain aspects of the complainants' clai ms and considers that such a request goes beyond 
the scope of Article 15.2 of the DSU.   WT/DS394/R 
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  I. M
INIMUM EXPORT PRICES  
6.70 Regarding paragraph 7.1020, the European Uni on requests the Panel to delete the words "at 
least until 28 July 2010" and requests the Panel to refe r to the date of establishment of the Panel.   
6.71 China objects to the European Union's request.  China submits that the Panel reached its 
finding that China had the authority to coordinate export prices until the formal repeal of measures in 
28 July 2010.  China submits that this finding in paragraph 7.1030 addresses the separate question of 
whether China enforces an MEP requirement thr ough penalties imposed on exporters and licensing 
entities, and does not justify making the change. 
6.72 The Panel declines to make the change request ed by the European Union.  The Panel's 
reference to 28 July 2010 reflects evidence provide d by China of the formal repeal of measures 
authorizing the coordination of export prices in 2010 (the CCCMC Resolution on Abolition of 
Coordination and Administration of Export Commodities ).  The Panel's acknowledgement of this date 
does not affect the Panel's conclusion that China ha d in place a system to coordinate export prices at 
the time of the Panel's establishment.  For consistency, the Panel has also amended paragraphs 7.1030 
and 7.1045 to refer to the date 12 Septembe r 2010, when China formally repealed the Export Price 
Penalties Regulations  and Article 40(3) of the Measures for Administration of Licensing Entities by 
Order No. 2 of 2010 of MOFCOM .  These changes do not affect the Panel's conclusion that China had 
in place a system to impose penalties on exporters a nd licensing entities at the time of the Panel's 
establishment. 
6.73 Regarding paragraph  7.1038 , which discusses the repeal by resolution of the CCCMC Bauxite 
Branch Coordination Measures  on 28 July 2010 and China's argument that the measure was declared 
inapplicable on 9 January 2008, the United States requ ests the Panel to cross refer to its explanation 
that the CCCMC Bauxite Branch Coordination Measures  remained "on the books" at the time of the 
Panel's establishment.  China does not object to th is change.  The Panel has included a footnote to 
indicate its earlier discussion on the status of  CCCMC Bauxite Branch Coordination Measures. 
J. CONCLUSIONS AND RECOMMENDATIONS  
6.74 Regarding paragraph 8.1, the United States a nd Mexico request the Panel to format its 
conclusions and recommendations such that conclu sions and recommendations for each dispute are 
set out on separate pages, with each page bearing only  the report symbol relating to that dispute.  The 
Panel has incorporated the requested change. 
VII. FINDINGS 
A. ISSUES RELATING TO THE PANEL 'S TERMS OF REFERENCE  
1. Preliminary rulings 
7.1 This dispute raises several issues affecting the competence and the terms of reference of the 
Panel.  The Panel recalls that it issued two sets of preliminary rulings concerned, inter alia,  with 
aspects of its terms of reference.   As noted, the fi rst phase of the preliminary ruling was issued to the 
parties on 7 May 2010 and circulated on 18 May. Th e Panel issued the second phase of its preliminary 
ruling to the parties on 1 October 2010.  At the request of the United States and Mexico, this second phase was circulated only to the third-par ties but not to the entire WTO Membership.
31  These 
                                                      
31 Communication from the United States, dated 12 October 2010; Communication from Mexico, dated 
21 October 2010.  See also Communications from China, dated 13 October 2010 and 15 October 2010.  WT/DS394/R 
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  preliminary rulings are an integral part of the presen t findings and are attached to the Panel Reports as 
an annex (see List of Annexes, pages ii and iii). 
7.2 The Panel made the following rulings in the first phase of its preliminary ruling dated 
7 May 2010: 
(a) The Panel's terms of reference are limited to those measures explicitly identified by 
bullet points in each of the three sections  of the complainants' Panel Requests. 
(b) Of these measures, the term "related measures"  referred to in the last bullet point in 
each of the listed measures is too broad and unspecific a term and therefore falls 
outside the Panel's terms of reference. 
(c) The Panel's terms of reference are not limite d to those products falling under the tariff 
lines described in footnotes one to nine of the Panel Requests; rather, these tariff lines 
are only indicative of the broad scope of the challenge.   
(d) The Panel Requests include the two corrected tariff lines regarding zinc. 
(e) The complainants' claims under paragraph 34 2 of the Report of the Working Party on 
the Accession of China fall outside the Panel's terms of reference. 
(f) The Panel will not consider the preliminary ruling submitted by the complainants in a 
separate, ongoing panel proceeding. 
(g) Until it has examined the Complainants' firs t written submissions and in order to 
preserve fully China's ability to defend itself, the Panel decides to reserve its decision 
on: 
(i) Whether the Complainants' Panel Request s sufficiently identify the measures 
at issue and the products possibly affected by such measures.  
(ii) Whether the Complainants' Panel Requests provide for a summary of the 
legal basis of the complaint suffici ent to present the problem clearly. 
7.3 The Panel made the following additional rulings in the second phase of its preliminary ruling 
dated 1 October 2010, after assessing the first written submissions of the complainants: 
(a) Sections I, II and III of the complainan ts' Panel Requests sufficiently identify the 
products concerned by the challenged measures.   
(b) The complainants' Panel Requests, as clar ified by their first submissions, provide 
sufficient connection between the measures listed in Section III and the listed claims 
of violations, with the exception of the European Union's publication claim 
concerning coke quotas.   
(c) The Panel's terms of reference with respect  to claims relating to China's alleged 
coordination of minimum export prices are limited to assessing the WTO compatibility of the following six measures th at were identified in the complainants' 
Panel Requests: (i) Measures for Administration of Trade Social Organizations
32; 
                                                      
32 Exhibits CHN-313, JE-101. WT/DS394/R 
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  (ii) Regulations for Personnel Manageme nt of Chambers of Commerce
33; (iii) 1994 
CCCMC Charter34; (iv) 2001 CCCMC Charter35; (v) Export Price Penalties 
Regulations36; and (vi) Measures for Administration of Licensing Entities .37 
7.4 Other issues relating to the Panel's terms of re ference are addressed by the Panel throughout 
the Panel Reports.  When necessary, the Panel ruled on such matters in the relevant section of the 
finings of its Panel Reports. 
2. Additional legislative instruments enacted by China during the Panel process 
7.5 During this Panel process  that is, between the date of the Panel's establishment on 
21 December 2009 and the date parties submitted co mments on parties' responses to questions posed 
by the Panel on 15 December 2010  China enacted 109 legislative instruments in areas relevant to 
this dispute.  Several of the measures challenge d by the complainants expired during the Panel 
process and some of the 2009 measures were replaced  in 2010 with different provisions.  The parties 
disagree as to whether the Panel should consider the 2010 measures.  Several of the 2010 laws and 
regulations that were put in place, according to Ch ina, in the context of its economic, development, 
environment and health policies, are discussed in the section of our Reports dealing with China's 
defence under Articles XX(b) and XX(g). 
7.6 China makes a general point in respect of all claims that the Panel should not consider the 
2009 measures invoked by the complainants in sup port of their claims where those measures have 
been replaced by 2010 measures.  Several of the measures challenged by the complainants are annual 
measures. China submits that it would serve no purpo se for the Panel to rule on annual measures that 
have ceased to exist since they no longer violate WTO obligations  or nullify or impair benefits.38  
Although China also noted that panels can ma ke findings regarding an expired measure39, the overall 
thrust of China's arguments throughout the proceed ings was that the Panel should not review or 
examine the 2009 measures.  China presented no defen ce or justification for the export restraints 
imposed by the 2009 annual measures that were not im posed by the 2010 annual measures.  In its first 
submission China explicitly stated, "China's submission addresses the new [2010] measures, and not the expired [2009] measures."
40  This is the case, for example, with the Notice Regarding the 2009 
Tariff Implementation Program , which was replaced by the 2010 Notice Regarding the Tariff 
Implementation Program .  For China, the Panel should base its  consideration of the complainants' 
claims against certain export duties on the 2010 Notice  and should not consider the 2009 Notice .41   
                                                      
33 Exhibits CHN-315, JE-102. 
34 Exhibit JE-86. 
35 Exhibits CHN-16, JE-87. 
36 Exhibits CHN-350, JE-113. 
37 Exhibits CHN-358, JE-75. 
38 See for instance China's first wr itten submission paras 49-51, 56, 62, 64 and 67; see also China's 
second written submission, section II entitled "Panel Sh ould Rule on the 2010 Measures To resolve the 
Disputes, and Should Not Rule on the 2009 Measure" and para. 12, "In sum, the prompt and positive resolution 
of this dispute calls for the Panel to address the 2010 measures, and not the 2009 measures." 
39 See China's first written submission, para. 52. 
40 China's first written submission, para 70.  See Chin a's response to Panel question No.2 following the 
second substantive meeting, para. 9 ("For this reason, China makes arguments and defences regarding the 2010 
export duties and export quotas"). 
41 This is the case for export duties on bauxite, fo r example.  The complainan ts claim that in 2009, 
when this Panel was established, China maintained expo rt duties on bauxite. China's contention is that as of 
1 January 2010, it no longer maintains export duties on bauxite and hence China does not seek to justify the 
export duties that it imposed on bauxite  during 2009, or on 21 December 2009 – the date of establishment of  WT/DS394/R 
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  7.7 For the complainants, the Pane l's competence should be derived from the legal situation 
prevailing on the date of the establishment of the Pa nel, namely 21 December 2009.   They maintain 
that the Panel is obliged to make findings a nd recommendations on the invoked 2009 measures, even 
if they have ceased to exist during the panel pro cess.  They also argue that the Panel should not 
consider the claims as addressing the 2010 measures.   According to the comp lainants, the measures 
invoked in the context of China's defence under GATT Article XX form part of China's evidence and 
should be evaluated as evidence, but not as measures per se .  
7.8 The Panel will consider first whether its WT O consistency assessments and related findings 
and recommendations should be based on the meas ures in force at the time of the Panel's 
establishment or rather on replacement measures enacte d during this Panel process.  This analysis will 
be carried out bearing in mind that after 21 Decemb er 2009 and during this Panel process, some of the 
2009 annual measures ceased to exis t and were replaced by 2010 a nnual measures that remained in 
force until 15 December 2010 when the parties f iled their last submissions with the Panel. 
7.9 The Panel recalls that it was established on 21 December 2009.
 42  This is the date the DSB 
mandated the Panel to examine the claims of th e United States, the European Union and Mexico 
relating to a series of measures taken by China and identified in the complainants' Panel Requests.   
7.10 Article 7 of the DSU provides that panels sha ll have standard terms of reference unless the 
parties agree otherwise.  These standard terms of refe rence are to examine in the light of the relevant 
provisions the matter referred to the DSB by the co mplainant in the request for establishment and to 
make such findings as will assist the DSB in making recommendations.  This Panel has been 
established with standard terms of reference.43  A panel's terms of reference are important because 
they set the parameters of the panel's jurisdicti on and define which specific measures must be the 
object of findings and recommendations pursuant to Artic les 11, 12.7 and 19 of the DSU.  Article 7 of 
the DSU provides that a panel's terms of referen ce are based on the complainant's panel Request.  
7.11 A panel request must comply with Article 6 of the DSU, which sets out conditions for 
establishment of panels.  WTO panels and the Appe llate Body have clarified the requirements of 
Article 6.2 of the DSU, stating that the require ment that a panel request identify the "specific 
measures at issue", implies that "the measures included in a panel's terms of reference must be measures that are in existence at the ti me of the establishment of the panel".
44   
7.12 Some panel requests, such as those of the compla inants in this dispute, include a phrase that  
broadens a panel's terms of re ference by adding to measures specifically listed the following 
measures: "any amendments or extensions; related measures; replacement measures; renewal measures; and implementing measures". This phrase h as been interpreted as authorising a panel to 
consider within its terms of reference measures enacted after  the panel's establishment. 
7.13 In Chile – Price Band System , for instance, where the panel's terms of reference included a 
similar phrase, the Appellate Body concluded that th e panel in that case had the authority to examine 
a legal instrument enacted after the establishment of  the panel because that particular instrument 
amended a measure identified in the Panel Request  but the amendment did not change the "essence" 
                                                                                                                                                                     
this Panel.  China asserts that since 2010, it has not imposed a tariff duty on any of the three forms of bauxite at 
issue: refractory-grade bauxite (2508.3000), aluminium ores and concentrates (2606.0000) and aluminium ash 
and residues (2620.4000), and that the Panel should make findings and recommendations on China's 2010 
measure only. (China's first written submission, para. 84). 
42 WT/DSB/M/277 (Minutes of the Dispute Settlement Body). 
43 WT/DSB/M/277 (Minutes of the Dispute Settlement Body). 
44 Appellate Boy Reports, EC – Chicken Cuts , para.156 and EC – Selected Customs Matters , para. 184. WT/DS394/R 
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  of the identified measure.
45  The Appellate Body explained th at it did not "condone a practice of 
amending measures during dispute settlement proceedings  if such changes are made with a view to 
shielding a measure from scrutiny by a panel or by [the Appellate Body]".46  It observed that "the 
demands of due process are such that a complaining party should not have to  adjust its pleadings 
throughout dispute settlement proceedings in orde r to deal with a disputed measure as a 'moving 
target'.  If the terms of reference in a dispute ar e broad enough to include amendments to a measure – 
as they are in this case – and if it is necessary to consider an  amendment in order to secure a positive 
solution to the dispute – as it is here – then it is appropriate to consider the measure as amended in 
coming to a decision in a dispute."47  The Appellate Body did not consider that including the amended 
measure within the panel's terms of reference raised due process issues in that case.48 
7.14 The recent panel in EC – IT Products  addressed the issue of measures updated annually; in 
that dispute, the Panel Request referred to cer tain measures as well as to amendments thereto.49  One 
of the measures had been updated on at least one occasion during the panel proceedings.  Specifically, 
the panel considered an annex to a 1987 regulati on, which had been amende d annually to update the 
European Union's domestic tariff nomenclature.  Th e panel considered its terms of reference were 
broad enough to address not only the version in force at  the time of the panel's establishment, but also 
subsequent versions of the regulation, as amended.  Under the particular facts of that case, the panel 
determined that the subsequent  versions did not change the essence  of the original measure.50  The 
panel in EC – IT Products thus applied the approach taken in the Chile – Price Band System  dispute, 
where the Appellate Body concluded that the measur e at issue should include the amendment at issue 
"because that law amends [the original measure] without changing its essence."51  That panel also 
reasoned that to include such measures within the panel's terms of reference would prevent changing 
measures from evading review.52   
7.15 The Panel observes that the complainants' Panel Re quests in this dispute refer, in addition to 
the measures specifically identified, to "any amendm ents or extensions; rela ted measures; replacement 
measures; renewal measures; and implementing measures".  Thus, a priori  this Panel has the 
authority53 to consider within its terms of referenc e amendments and replacement measures adopted 
after the Panel's establishment.  In other words, th e Panel is entitled to examine measures that existed 
                                                      
45 Appellate Body Report, Chile – Price Band System , para. 139; see also para. 135: "First of all, we 
note that Argentina's request for the es tablishment of a panel refers to the measure in issue as the price band 
system "under Law 18.525, as amended by Law 18.591 and subsequently by Law 19.546,  as well as the 
regulations and complementary provisions  and/or amendments "  (emphasis added).  Such  amendments ,  in our 
view, include Law 19.772.  The broad scope of the Panel Request suggests that Argentina intended the request 
to cover the measure even as amended.  Thus, we conclude that Law 19.772 falls within the Panel's terms of 
reference." 
46 Appellate Body Report, Chile – Price Band System , para. 144. 
47 Appellate Body Report, Chile – Price Band System , para. 144. 
48 Panel report, India – Additional Import Duties , para. 7.63, the panel determined that the two 
measures examined (CN 32/2003 and CN 82/2007) had oppo site legal effect. While the first measure specified 
the tax rates of additional duties applicable to certain products, the second one exempted those same products 
from such duty rates. Thus, the panel observed that both the legal and practical effects resulting from the old 
measure and the new one were substantially different, thus  of a different essence.  Under the circumstances, the 
panel considered that ruling on the old measure could contribute to securing a positive solution to the dispute, 
whereas ruling on the new measure (that modified importantly the original one) would not do so. 
49 WT/DS375/R, WT/DS376/R, WT/DS377/R  
50 Panel Report, EC – IT Products, paras. 7.141, 7.142, and 7.146. 
51 Appellate Body Report, Chile-Price Band System,  paras. 136-139. 
52 Panel Report, EC – IT Products, paras. 7.141, 7.142, and 7.146.   
53 The Panel recalls that the complainants requested the Panel only to consider the original 2009 
measures and should abstain from making any findings on the WTO consistency of the 2010 measures.  WT/DS394/R 
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  at the time of its establishment as well as measures that came into effect after that date if they are of 
the same essence  as the original ones that formed the b asis of the Panel's terms of reference.
54  
7.16 In the Panel's view, this approach original ly developed in connection with amendments 
enacted after a panel's establishment should also ap ply to replacement measures that are of the same 
essence as original measures specifically identified in the Panel Request.  The Appellate Body's 
rationale for including amendments of the same e ssence applies equally to replacement measures so 
that replacement measures of the same essence should also be assessed by  a panel in order to secure a 
positive solution to a dispute.  
7.17 The Panel turns now to consider the issue in this case concerning annual and replacement 
measures.  China's legislative system for the imposition of duties comprises a basic framework 
legislation, an implementation re gulation and annual measures that set the level of duty for specific 
products.55  For quotas, there is also a basic framework legislation and an impl ementation regulation, 
then a set of regulations applicable to the rele vant allocation system – direct allocation or quota 
bidding – and finally a set of measures (of varying duration, from a few months to a year or 
indefinite) that determine the level of quotas for specific products.56  The question before us is 
whether, if a new annual measure corrects the WTO inconsistency of the measure it replaces, the new 
measure can be said to be of the same essence and he nce, fall within our terms of reference.  In our 
view, the WTO consistency of a measure is necessarily  relevant to its "essence", at the very least in 
the context of WTO dispute settlement procedures.  If a new measure appears to be WTO consistent, 
while the original was not, the ne w measure takes on a different character in the context of WTO 
dispute settlement and cannot be said to be of the "s ame essence".  In such a situation, enlarging the 
Panel's terms of reference to include replacement measures having a different essence would run counter to DSU Articles 6.2 and 7, which circumscribe the task of a panel in a particular case, and to 
the tenets of due process referred to above. 
7.18 Applying this conclusion to the case before us , to include within our terms of reference 
measures that are not of the same essence as the re lated 2009 measures would, in our view, not be 
legally justifiable.  Moreover, a respondent would not know from one day to the next what the case is 
that it has to meet.  This is particularly important  where, as in this dispute, numerous measures came 
into existence during the course of a panel proceeding. 
7.19 In sum, the date of a panel's establishment is critical in deciding which measures may be 
included in a panel's terms of reference.  As noted  earlier, a panel's terms of reference prescribe which 
specific measures will be the object of findings and recommendations by the panel.  Generally, 
therefore, a panel will make findings and recomme ndations on existing measures specially listed in 
the complainant's Panel Request.  In some circ umstances, a panel's jurisdiction may extend to 
measures adopted after the panel's establishment, pr ovided the request for establishment of the panel 
refers to amendments or replacement measures and such measures are of the same essence.  
                                                      
54 The panels in EC – Bananas III  and Japan – Film  explained that the inclusion of such a phrase in a 
panel request can serve to adequately identify measures for the purposes of Ar ticle 6.2, even if a measure is not 
explicitly listed in the panel request (Panel Report, EC – Bananas III,  paras. 7.22-7.27 and Panel Report, Japan- 
Film , paras. 10.8-10.9).  The Appellate Body also ruled that broad terms of reference could include replacement 
or amended measures so long as they were sufficiently linked and discernable in the complainants' panel request 
and fall within the "gist" of what is at issue (Appellate Body Report, Chile - Price Band System , para. 139 and 
US – Continued Zeroing , paras. 235 and 236). 
55 The complainants' Panel Requests identified meas ures comprising China' s system for applying 
export duties, see para 3.2 and 3.3 above, and this system is further described in paras. 7.59-7.63 below. 
56 The complainants' Panel Requests identified meas ures comprising China' s system for applying 
export quotas, see paras. 3.2 and 3.3 above, and this syst em is further described in paras. 7.172-7.201 below. WT/DS394/R 
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  7.20 The enquiry into our terms of reference does not end here, however, because the situation 
before us involves an additional factor.  Our te rms of reference do include  "any amendments or 
extensions; replacement measures; renewal measures; and implementing measures".  Indeed in the 
first stage of our preliminary ruling, we decided that we would consider all measures listed in the 
complainants' Panel Requests as well as measu res covered by the phrase "any amendments or 
extensions; replacement measures; renewal measures; and implementing measures".
57  Consequently, 
it is clear that the Panel has the authority to include within its te rms of reference amendments or 
replacement measures of the 2009 measures challenged by the complainants. 
7.21 Following the issuance of our preliminary ruling, parties submitted their second written 
submissions responding to each other's first written submissions.  In their responses to China's first submission in which China requested the Panel to  rule only on the 2010 measures and not on the 2009 
measures
58, the complainants asked the Panel to make findings only on the 2009 original measures. 
The complainants specifically requested the Pane l not to make findings or recommendations on the 
legal instruments taking effect on 1 January 2010.59  According to the United States and Mexico, 
China's 2010 measures "changed the essence" of the legal instruments that were in effect at the time 
of the Panel's establishment60, and examining them creates a "moving target" that would permit China 
to shield its measures from review.61  The European Union expressly stated that "it agrees with the 
views expressed by the United States and Mexico in their opening statement".62 When referring to the 
restrictions on bauxite, it stated that the 2009 measur e on bauxite is the measure that was in force at 
the time of the Panel's establishment and that should be examined by the Panel.63  Furthermore, the 
Panel requested the complainants to list clearly all m easures relevant to this dispute for which they are 
seeking "recommendations" from the Panel within the meaning of Article 19.1 of the DSU.64  In their 
responses to this question, Mexico and the United States requested the Panel to make findings and 
recommendations only with respect to measures in force during 2009.65  The European Union 
answered similarly66, with the exception of only one measure in force in 2010.67  
7.22  In the Panel's view, the complainants when requesting the Panel not to make any findings 
and recommendations on any of the 2010 measures invoked by China, are in fact narrowing the 
Panel's terms of reference during the course of these proceedings.   
                                                      
57 See para. 20 of the first phase of the Panel's preliminary ruling dated 7 May 2010 (Annex J).  
58 China's first written submission, para. 50-52, 63-7 0; China's closing oral statement at the first 
substantive meeting, paras 14, 15, 18, and 19: China's second written submission, paras 7, 16, and 18; China's 
opening oral statement at the seco nd substantive meeting, para. 3. 
59 United States' second written submission, paras. 3 35-340; United States' opening oral statement at 
the first substantive meeting, paras. 38-52; Mexi co's second written submission, paras. 340-345. 
60 United States' second written submission, para. 3 38; Mexico's second written submission, para. 343. 
61 United States' second written submission, para s. 341-343: Mexico's second written submission, 
paras. 346- 348. 
62 European Union's opening oral statement at the sec ond substantive meeting, para.2 together with the 
United States' opening oral statement at the second su bstantive meeting, para 109; Mexico's opening oral 
statement at the second su bstantive meeting, para.2. 
63 European Union's second written submissions paras 18-21. 
64 Panel question No. 2 following the first substantive meeting; Panel question No. 1 following the 
second substantive meeting. 
65 United States' response to Panel question No. 2 following the first substantive meeting, United 
States' response to Panel question No. 1 following the second substantive meeting; Mexico's response to Panel 
question No. 2 following the first substantive meeting, Mexico's response to Panel question No. 1 following the 
second substantive meeting. 
66 European Union's response to Panel question No. 2 following the first substantive meeting, European 
Union's response to Panel question No. 1 following the second substantive meeting. 
67 2010 First Batch Coke Export Quota for FIEs (JE-129) para. 7.165.  WT/DS394/R 
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  7.23 As noted above, a complainant's Panel Request determines the scope of a panel's terms of 
reference.  It is for complainants to decide what cl aims they present to a panel.  By the same logic, a 
complainant can unilaterally withdraw a claim, or the complaint in its entirety, or seek to settle a 
particular dispute.  On numerous occasions, pa nels have not examined claims abandoned by 
complainants in the course of panel proceedings.  I ndeed this Panel in its pr eliminary ruling noted that 
the complainants had abandoned their claims con cerning Paragraph 342 of China's Working Party 
report and ruled that it would not examine such claims.
68    
7.24 As noted earlier, several of the measures relating to export duties and export quotas are 
annual measures that are replaced at least once a year.  In light of the fact that the complainants have 
withdrawn the Panel's authority to consider claims related to those replacement  measures, the Panel is 
not able to agree with China's request to ma ke findings only on the 2010 replacement measures and 
not on the expired 2009 measures.69 China is seeking to defend a different set of claims than the 
complainants have authorised the Panel to consider.  China's arguments seek to  turn the principle of 
due process on its head; although a defendant should  not have to defend a "moving target" of claims, 
there is nothing unfair in a complainant reducing,  as opposed to enlarging, the case the defendant has 
to meet.  The Panel will, therefore, make findi ngs only on the 2009 measures that fall within the 
Panel's original terms of reference. 
7.25 That is not to say that the Panel will not have regard to the 2010 measures at all.  As noted 
above, these measures have been discussed in the context of China's defence under GATT 
Article XX.  The Panel will consider these measur es in as far as they form part of the evidence 
submitted by China.70 
7.26  The Panel turns now to decide whether it will make recommendations  on the 2009 measures. 
Panels and the Appellate Body have declined to make "recommendations"71 on measures that have 
ceased to exist at the time the recommendations are made.   
7.27 In US – Certain EC Products , the panel made a recommendation on an expired measure. The 
Appellate Body, in reviewing that decision, noted that a panel's mandate to make recommendations is 
found in Article 19.1 of the DSU, which foresees onl y one type of recommendation, namely, that a 
Member bring its measure into conformity with a covered agreement. The Appellate Body concluded 
that measures cannot be brought into co nformity if they have ceased to exist.72  It is worth noting that, 
in that dispute, the measure at issue had expired before the Panel was established. 
7.28 Several panels have declined  to make recommendations on e xpired measures. For instance, 
the panel in US – Stainless Steel (Mexico) established that when a party has already abandoned the 
WTO-inconsistent practice (zeroi ng), a panel should refrain from making recommendations, even if it 
finds the measure to be inconsistent with a party's WTO obligations.73  I n  EC –  Trademarks and 
Geographic Indications , the panel noted that it could not make  recommendations on measures that no 
                                                      
68 First phase of the preliminary ruling WT/DS394/9, WT/DS395/9 and WT/DS398/9. 
69 See for instance China's first wr itten submission paras. 49-51, 56, 62, 64, and 67; see also China's 
second written submission, section II entitled "Panel Sh ould Rule on the 2010 Measures To resolve the 
Disputes, and Should Not Rule on the 2009 Measure" and para. 12, "In sum, the prompt and positive resolution 
of this dispute calls for the Panel to address the 2010 measures, and not the 2009 measures." 
70 China – Publications and Audiovisual Products , para. 177; China - Auto Parts , para. 225; US - 
Section 211 Appropriations Act , para. 105; India - Patents (US) , paras. 65. 
71 Pursuant to Article 19 of the DSU, when a pane l concludes that a measure is inconsistent with a 
covered agreement, it shall recommend that the Member bring its measure into conformity with that agreement.   
72 Appellate Body Report, US – Certain EC Products , para. 81. 
73 Panel Report on US – Stainless Steel (Mexico ), para. 7.50. WT/DS394/R 
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  longer existed.
74  In US – Poultry (China) , the panel considered it appropriate to make findings  on an 
expired measure, but recognized that it would not be appropriate to make recommendations  pursuant 
to Article 19 of the DSU  with respect to a WTO-inconsistent measure that had been repealed and that 
had ceased to have legal effect.75    
7.29 Nonetheless, as the panel in US – Stainless Steel (Mexico)  correctly noted, there is no specific 
provision in the DSU that addresses whether a WTO panel may or may not make findings or 
recommendations on a measure that has expired afte r the panel's establishment. It noted that in 
previous cases panels have made such  determinations on a case-by-case basis.76   
7.30 More recently, in US – Continued Zeroing , the Appellate Body determined that measures that 
are "alleged to be ongoing, with prospective app lication and a life potentially stretching into the 
future"77 can be subject to WTO dispute settlement.  In that case, the European Union sought a 
remedy related to measures that had not come into e ffect at the time of the panel's establishment.  The 
panel found that the particular measure fell outside its terms of reference, reasoning that it could not 
make findings on events that may occur in the futu re.  The Appellate Body disagreed with the panel 
on that matter.  Although the measure in the zeroing  dispute was different from the measures at issue 
in the present dispute, this Panel sees some relevance in the Appellate Body's ruling in that case.  This 
Panel must decide how to address the WTO consiste ncy of annual measures, i.e., measures that will 
expire within a year, although "prospective appli cation" remains likely through annual replacement 
measures.  The Panel bears in mind that it must opera te to ensure that the dispute settlement system 
functions efficiently in resolving disputes.78 
7.31 In light of the above, the Panel has concluded that  it has some discretion to decide how to take 
into account a measure covered by its terms of refe rence that has ceased to exist at the end of the 
panel proceedings.79  The Panel must of course bear in mind that the complainants have requested the 
Panel not to make findings  on any of the 2010 measures - even those of the same essence as the 
original 2009 measures – notwithstanding the fact that  the Panel's original te rms of reference included 
amendments and replacement measur es.  Nevertheless, the Panel does not consider that it can entirely 
set aside the 2010 measures from consideration.  As noted above, they have been discussed, inter alia , 
in the context of China's defences under GATT Article  XX and we will have regard to them in that 
context.  Moreover, we will necessarily need to examine them to consider whether the expired 
measures have a prospective application in  the form of annually renewed measures. 
                                                      
74 Panel Report, EC – Trademarks and Geographic Indications , para. 7.14. 
75 Panel Report, US – Poultry , para. 7.56, citing the following cases: Appellate Body Report, US – 
Certain EC Products , para. 81; Appellate Body Report, US – Upland Cotton , para. 272; and Appellate Body 
Report, EC – Bananas III (Article 21.5 – Ecuador II),  para. 271. 
76 Panel Report, US-Stainless Steel (Mexico ), para. 7.48, citing the fo llowing cases: Panel Report, 
Indonesia – Autos , para. 14.9; Panel Report, India – Autos , paras. 7.26- 7.29; Panel Report , Dominican Republic 
– Import and Sale of Cigarettes , paras. 7.340-7.344; Panel Report, EC – Approval and Marketing of Biotech 
Products , paras. 7.1303-7.1312. 
77 Appellate Body Report, US – Continued Suspension , paras. 170-171. Panel Report, US – Poultry 
(China)  where the Panel declined to issu e recommendations to the United States  not to repeat the measure found 
to be inconsistent. 
78 For instance, in its second written submission Chin a argues that the prompt and positive resolution of 
this dispute calls for the Panel to addr ess the 2010 measures, and not the 2009  measures.  China insisted that the 
measures that are the source of the di spute today are the 2010 measures a nd the Panel would fail to resolve the 
dispute if it ruled only on the 2009 measures.  The comp lainants argued that the logi c of China's approach, if 
accepted, would still fail to resolve th e dispute because the Panel's findi ngs and recommendations would likely 
not be adopted until sometime in 2011 when the 2010 m easures are no longer in effect (complainants' joint 
opening oral statement at the first substantive meeting, para. 45). 
79 Appellate Body Report, EC – Bananas III  (Article 21.5 – Ecuador II), para. 270. This line of 
reasoning was also followed in the Panel Report, China – Publications and Audiovisual Products , para. 7.452.  WT/DS394/R 
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  7.32 The Panel recalls that several measures on whic h the complainants' claims are based have 
expired, ceased to exist, or were amended after the Panel's establishment on 21 December 2009.  As 
noted earlier, China enacted more than 100 legislativ e instruments in areas relevant to this dispute 
during the course of these proceedings.  As further discussed in these findings, some of the new 2010 
measures would appear not to be WTO-inconsiste nt, although the equivalent 2009 measures were 
inconsistent.   
7.33 In light of our analysis and conclusions above, the Panel has determined that its approach will 
be the following:  
(a) The Panel will make findings  on the WTO consistency of original measures included 
in its terms of reference.  In light of the request by the complainants that the Panel not 
make any findings  on any amendments or replacement measures, the Panel will only 
make findings on 2009 measures and the Panel will not make findings on 2010 
measures. 
(b) In situations where a 2010 replacement measure appears to correct the WTO 
inconsistency of the original 2009 measure – in whole or in part (and therefore is 
considered not to have the same essence, in whole or in part, as the expired measure) 
– the Panel will decline to make findings  or recommendations  on the 2010 measure, 
as it falls outside its terms of reference.  However, in order to make a determination 
on whether the new measure is of the same essence as the expired measure, and hence 
imbues the expired measure with ongoing effect  or prospective application, the Panel 
will necessarily have to determine (without making a formal finding) whether the WTO inconsistency is no longe r present in the new measure.
80   
(c) Nonetheless, with a view to ensuring th at annually renewed measures do not evade 
review by virtue of their annual nature – an d relying on the Appellate Body ruling in 
US-Continued Zeroing  where the Appellate Body recognized the possibility for a 
panel to make a ruling on measures that ha ve a "prospective application and a life 
potentially stretching into the future" – the Panel will make findings  with respect to 
the series of measures comprised of the relevant framework legislation, the 
implementing regulation(s), other applicable laws and the specific measure imposing export duties or export quotas in force at the date of the Panel's establishment. 
(d) With respect to recommendations , generally the Panel will not make 
recommendations on any original measure or  on any measure no longer in existence 
(or part thereof) on 15 December 2010, unless th ere is clear evidence that the measure 
has ongoing effect. 
(e) In situations where the claim is based on an annual measure, as is the case with 
measures imposing export duties and with so me of the measures relating to export 
quotas, the Panel will make recommendations  with respect to the series of measures 
comprised of the relevant framework legi slation, the implementing regulation(s), 
other applicable laws and the specific measure imposing export duties or export 
quotas in force at the date of the Panel's establishment. 
                                                      
80 This determination could be relevant in the context of an eventual panel process reviewing China's 
implementation of the recommendations of  this Panel on such a measure(s). WT/DS394/R 
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  3. Whether the European Union's claims under Article X:1 and Article X:3(a) of the 
GATT 1994 regarding China's administration of  its export licensing system fall outside 
the Panel's terms of reference because they we re not identified in the European Union's 
Panel Request 
7.34 The European Union claims that China's administration of its export licensing system is 
inconsistent with Article X:1 and Article X:3(a) of the GATT 1994.  These are alternative claims to 
the European Union's claim that China's export licen ces are inconsistent with Article XI of the GATT 
and with Paragraphs 5.1 and 1.2 of China's Accessi on Protocol, in combina tion with Paragraphs 83, 
84, 162 and 165 of the Working Party Report.
81  Specifically, the European Union considers that 
China's failure to publish sufficient definitions and explanations on the interpretation of certain terms 
i.e "other documents", "management qualifications" a nd "documents of approval"  is inconsistent with 
GATT Article X:1.82 The European Union also considers that  the administration of China's licensing 
system is based on a "nexus of [of] vague and opaque provisions and requirements [which] fails to 
satisfy the conditions of 'uniform, impartial and r easonable', within the meaning of Article X(3)a of 
the GATT."83 
7.35 China responds that to the extent that the Eur opean Union considers that the requirements for 
export licence applicants to provide documents an d furnish evidence of their qualification to do 
business are in and of themselves non-uniform, partial, and unreasonable, it has not stated a claim concerning the administration  of China's export licensing regime that is cognizable under 
Article X:3(a).
84  China further submits that even were the Panel to consider that the European 
Union's claim against China's export licensing syst em involves a claim against an "administrative 
process"85 leading to an administrative decision concer ning the allocation of direct quotas, the claim 
fails for lack of evidence.86   
7.36 In its comments on the complainants' responses to  the questions posed by the Panel following 
the first substantive meeting, China requests the Pa nel to find that the European Union's claims under 
Articles X:1 and X:3(a) regarding export licensing fall outside the Panel's terms of reference, because the European Union failed to include these claim in its Panel Request.
87 
7.37 In response to a question from the Panel concer ning this request, the European Union asks the 
Panel to reject China's request a nd to find that its Panel Request: (i) identifies the measures at issue; 
and (ii) provides a brief summary of the legal basi s of the complaint sufficient to present the problem 
clearly, as required by Article 6.2 of the DSU.88 
7.38 Section III of the request addresses concerns regarding additional restraints imposed on 
exportation.  Narrative paragraph one of Section III describes in general terms the additional restraints 
that the European Union alleges that China imposes: 
"China imposes other restraints on the exportation of the materials, administers its 
measures in a manner that is not unifor m, impartial, and reasonable, imposes 
                                                      
81 European Union's first written submission, para. 21. 
82 European Union's first written submission, paras. 341, and 347-349. 
83 European Union's first written submission, para. 351. 
84 China's first written submission, para. 826. 
85 See the discussion on administrative processes in para. 7.689. 
86 China's first written submission, para. 828. 
87 China's comments on the complainants' responses to Panel question No. 2 following the first 
substantive meeting, paras. 42-46. 
88 European Union's response to Panel question No. 56 following the second substantive meeting, 
para. 76.  WT/DS394/R 
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  excessive fees and formalities on exportation, and does not publish certain measures 
pertaining to requirements, restri ctions, or prohibitions on exports" 
7.39 The subsequent paragraphs of Section III provi de specific information on the details of the 
European Union's request.   
7.40 Narrative paragraphs two, three, and six of Sec tion III state that China's administration of its 
quota and alleged MEP regimes are "not uniform, impartial and reasonabl e", thereby advancing 
claims of inconsistent administ ration under GATT Article X:3(a). 
7.41 In narrative paragraph 4, the European Union claims that China "does not publish the amount 
for the export quota for zinc or any conditions or procedures for applying entities to qualify to export 
zinc", thereby presenting a claim concerning non-pub lication under Article X:1.  A similar statement 
appears in narrative paragraph 6, thus stating a cl aim of alleged non-publication under Article X:1 in 
relation to an alleged MEP requirement.   
7.42 The fifth narrative paragraph, which relates to  the European Union's concerns regarding 
China's export licensing regime, reads, in its entirety: 
"In addition, China restricts the exportation of bauxite, coke, fluorspar, manganese, 
silicon carbide, and zinc by subjecting these materials to non-automatic licensing.  China imposes the non-automatic export licen sing for bauxite, coke, fluorspar, silicon 
carbide, and zinc in connection with the administration of the export quotas discussed in Section I, as an additional restraint on the exportation of those materials." 
7.43 Following the list of legal instruments that the European Union alleges the disputed Chinese 
measures are reflected in, Section III co ncludes with the following statement: 
"The European Communities considers that these measures are inconsistent with 
Article VIII:1 and VIII:4, Article X:1 and X:3(a), and Article XI:1 of the GATT 1994 
and paragraphs 2(A)2, 5.1, 5.2 and 8.2 of Part I of the Accession Protocol, as well as 
China's obligations under the provisions of paragraph 1.2 of Part I of the Accession 
Protocol, which incorporates commitments in paragraphs 83, 84, 162, and 165 of the 
Working Party Report." 
7.44 Narrative paragraphs 2, 3, 4 and 6 do not, on their face, indicate that  the European Union 
intended to make claims concerning WTO-inconsis tent publication or administration of China's 
export licensing regime under Articles X:1 and X:3(a).  Nor, on its face, does narrative paragraph 5 
indicate that the EU is making a claim of non-uni form, unreasonable or partial administration of 
China's export licensing system.  Similarly there is no  indication that the European Union is intending 
to pursue a claim relating to the non-publication of definitions and explanations on the interpretation 
of certain terms.  However, the European Union asserts that its claims relating to China's export 
licences are found through the combined reading of th ree sub-paragraphs: the first, the fifth and the 
last of Section III, together with the list of the rele vant legal instruments.  It states, "Such combined 
reading shows that the European Union has satisfi ed the conditions of Article 6.2 of the DSU in 
relation to its export licenses' claims."
89 
7.45 The question for the Panel is whether a combin ed reading of these paragraphs is indeed 
sufficient to satisfy the conditions of Article 6.2 of the DSU as the European Union claims. 
                                                      
89 European Union's response to Panel question No. 56 following the second substantive meeting, 
para. 78. WT/DS394/R 
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  7.46 The Panel first recalls its preliminary ruling wher ein it considered the European Union's claim 
under Article X:1 of the GATT 1994 concerning non-publi cation of the coke quota.  In its ruling, the 
Panel took note of the "specific language" used by  the European Union in narrative paragraph 4 of 
Section III.
90  The Panel then continued that the inclusi on by the European Union of the reference to 
the zinc quota in the Panel Request demonstrated th at "the European Union was aware of, as well as 
capable of identifying the measures which had no t been published".  The Panel continued that 
"considering the omission of the coke quota from th e text of the Panel Request as a whole, it was 
reasonable for China to infer that the exclusion of the coke quota from Section III of the Panel 
Request was deliberate".91 
7.47 The Panel continues to bear in mind this findi ng in considering the Eu ropean Union's claims 
regarding the licensing system under Article X:1 and Article X.3(a). 
7.48 In the Panel's view, the European Union used specific language in narrative paragraphs 4 and 
6 concerning a failure to publish the zinc quota and certain alleged MEP -related requirements. 
However, the European Union excluded any reference to a failure to publish from narrative paragraph 
5 of Section III concerning export licensing measures.   Likewise, the Europ ean Union used specific 
language in narrative paragr aphs 2, 3, and 6 referring to "uni form", "impartial" and "reasonable".  
However the European Union excluded such  reference from narrative paragraph 5. 
7.49 The principle of expressio unius est exclusio alterius  referred to by the Panel in rejecting the 
European Union's claim regarding non-publication of  the coke quota would seem highly relevant in 
this situation. Consequently, the European Union' s decision to include "specific language" in relation 
to Articles X:1and X:3(a) in narrative paragraphs 2, 3, 4 and 6, concerning quota measures and 
alleged MEP-related requirements, as opposed to its  decision to exclude that "specific language" from 
paragraph 5, concerning export licen sing-related measures, should be given its proper meaning.  To 
recall, the Panel agrees with the panel on  China – Publications and Audiovisual Products  that "to 
express or include one thing implies the exclusion of the other". 
7.50 The European Union asserts that  its claims are found through a "combined reading" of the 
first, the fifth and the last narrative  paragraphs toge ther with the list of the relevant legal instruments 
in its Panel Request.  The Panel disagrees with th is assertion.  The first narrative paragraph is a 
general introductory paragraph and the last paragra ph is in the way of a concluding paragraph listing 
the provisions with which the measures are allegedly in consistent.  It is the other narrative paragraphs 
that served to inform China of the nature of  the case it had to defend.  These other narrative 
paragraphs, specifically narrative pa ragraph 5, did not inform China that the European Union would 
be claiming that China's licensing system was inconsis tent with Article X:1 and Article X:3(a) of the 
GATT 1994. 
7.51 Given the specific language of the European Un ion's Panel Request, the Panel finds that the 
European Union has not brought its claims con cerning China's licensing sy stem under Articles X:1 
and X:3(a) of the GATT 1994. 
                                                      
90 Preliminary Ruling of 1 October 2010, para. 74 (annex F). 
91 Preliminary Ruling of 1 October 2010, para. 75 (annex F). See also footnote 10 of para. 75 wherein 
the Panel noted that the "panel on China – Publications and Audiovisual Products  referred to the general legal 
canon of construction expressio unius est exclusio alterius  in assessing the decision by the complainant to 
exclude a particular provision from the text of its panel request.  That panel noted that the canon of construction 
holds that to express or include one thing implies the exclusion of the other or of the alternative (see Panel 
Report on China – Publications and Audiovisual Products , para. 7.60, referring to Black's Law Dictionary,  8th 
ed., B.A. Garner (ed) (West Group 2004), p. 620); also Ia n Brownlie, Principles of Public International Law, 6th  
ed. (2003) p. 602, 604.  The Panel finds this principle re levant to its assessment of the European Union's failure 
to reference the coke quota in its Panel Request in this dispute."  WT/DS394/R 
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  B. E
XPORT DUTIES  
7.52 The complainants claim that China imposes duties on bauxite, coke, fluorspar, magnesium, 
manganese, silicon metal, ye llow phosphorous, and zinc92 at the time of the Panel's establishment on 
21 December 2009 that are inconsistent with Chin a's obligations in Paragraph 11.3 of China's 
Accession Protocol and its Annex 6.  The complain ants allege that these export duties are imposed 
pursuant to China's Customs Law93, Regulations on Import and Export Duties94, and 2009 Tariff 
Implementation Program .95  
7.53 China invokes general and specific defences against the export duties claims. As noted earlier, 
China's general argument is that the Panel shoul d not consider the 2009 measures invoked by the 
complainants in support of their claims when t hose measures have been re placed by 2010 measures.96  
China acknowledges the existence of certain export duties in place in 2009 but argues that the Panel 
should consider only the 2010 measures.97  As noted earlier, the complainants explicitly narrowed 
down the Panel's terms of reference to a considera tion of the WTO consistency of the 2009 measures.  
Therefore, we will make findings only on the 2009 measures. 
7.54 For one specific product identified as yellow phosphorous, China argues that contrary to the 
complainants' assertion, the export duty in force as of  21 December 2009 was not in excess of the rate 
allowed in Annex 6 of its Protocol of Accession, and thus was WTO consistent. 
7.55 With respect to some of the products, Chin a acknowledges the existence of certain export 
duties imposed pursuant to 2010 measures, as well as their inconsistency with China's Protocol of 
Accession, and does not offer any justification for them.98  China requests the Panel to consider only 
2010 measures, even those for which it offers no justification.99  
7.56 In the previous section of these Panel Reports , the Panel reached the conclusion that, as a 
general matter, its terms of reference are limited to measures that were in force on 21 December 2009 
– the date of the establishment of this Panel. The Panel also determined that upon the request of the 
complainants, the Panel will not assess the WTO consis tency of any 2010 replacement measure even 
if they are of the same essence as the measures in force on 21 December 2009.  We shall be guided by 
this principle when examining the export duti es claims for each of the products concerned. 
7.57 For certain of the raw materials not included in  Annex 6 of its Protocol of Accession, China 
does not attempt to justify the imposition of expo rt duties. In those cases, the duties result in a 
violation of Article 11.3 of China's Protocol of Accession, which establishes the obligation to 
eliminate all taxes and charges applied to exports of  products not listed in Annex 6 of its Protocol, nor 
                                                      
92 The specific forms of the raw materials subject to the complainants' claims are identified in Exhibit 
JE-5 and para. 2.2 of the Descriptive Part to these Reports. 
93 Customs Law , (Exhibits CHN-14, JE-68). 
94 Regulations on Import and Export Duties , (Exhibit CHN-13, JE-67). 
95 2009 Tariff Implementation Program , (Exhibit JE-21). 
96 See for instance China's first wr itten submission paras 49-51, 56, 62, 64 and 67; see also China's 
second written submission, section II entitled "Panel Sh ould Rule on the 2010 Measures To resolve the 
Disputes, and Should Not Rule on the 2009 Measure" and para. 12, "In sum, the prompt and positive resolution 
of this dispute calls for the Panel to address the 2010 measures, and not the 2009 measures." 
97 See China's first written submission, para. 49-5 1, 56, 62, 64 and 67; China's second written 
submission, Section II entitiled "The Panel should rule on the 2010 Measures To resolve the Disputes, and 
Should not Rule on the 2009 Measures"; and para. 12 "In sum, the prompt and positive resolution of this disute 
call the Panel to address the 2010 m easures and not the 209 measures." 
98 See China's response to Panel question No. 4 following the first substantive meeting, para. 26. 
99 See China, first written submission, paras. 69, 70 , and second written submission, paras. 6-18.   WT/DS394/R 
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  applied in conformity with the provisions of Ar ticle VIII of the GATT 1994.  For certain other raw 
materials, China raises a defence under Article XX(b) or XX(g) of the GATT 1994. 
7.58 The Panel will consider the complainants' claims  below. Before doing so, however, the Panel 
considers it helpful to set out the operation of Ch ina's export duty system for the raw materials at 
issue. 
1. China's application of export duties 
7.59 In 2009, China imposed export duties on various forms of bauxite, coke, fluorspar, 
magnesium, manganese, silicon metal, yellow phos phorous, and zinc. China's legal framework 
regarding the imposition of export duties is described below. 
7.60 China maintains basic framework legislation authorizing the imposition of export duties.  This 
comprises the following measures: (i) Customs Law
100, and (ii) Regulations on Import and Export 
Duties .101  In addition, China publish es a specific annual measure setting out an export duty with 
respect to certain products.  In December 2008, China published the 2009 Tariff Implementation 
Program  which took effect on 1 January 2009. 
7.61 According to China's basic legal framework on export duties, Customs is responsible for 
supervision and control over departures from the Customs territory, as well as for collecting customs 
duties on articles permitted to leave the territory.102  The Tariff Commission is responsible for making 
adjustments to tariff items, and tariff rates.103  The Customs Law  and the Regulations on Import and 
Export Duties  provide that the declaration and payment of  tariffs on exports may be completed by the 
exporters104 within a specific time-period; in case of late payment, several penalties and sanctions 
would apply.105 
7.62 The 2009 Tariff Implementation Program sets out specific export duty rates applicable to 
certain products during a given year.  During 20 09, China imposed export duties on bauxite, coke, 
fluorspar, magnesium, manganese, silicon metal, yellow phosphorous, and zinc pursuant to the 2009 
Tariff Implementation Program .106  From 1 January 2010, China imposed export duties pursuant to 
the 2010 Tariff Implementation Program .107 
7.63 There is also a fourth measure, relevant to the complainants' claim on export duties.  The  
Adjustment of Export Tariffs Circular108 removed the special export duty on yellow phosphorous, 
from 1 July 2009. 
                                                      
100 Customs Law (Exhibit CHN-14, JE-68). 
101 Regulations on Import and Export Duties (Exhibit CHN-13, JE-67). 
102 Article 2, and 53 of the Customs Law , and Article 2 of the Regulations on Import and Export Duties 
(Exhibit JE-67, CHN-13). 
103 Article 4 of the Regulations on Import and Export Duties (Exhibit JE-67, CHN-13). 
104 Article 9 of the Customs Law (Exhibit JE-68, CHN-14). 
105 Article 60 of the Customs Law (Exhibit JE-68, CHN-14), Articles 9, and 37 of the Regulations on 
Import and Export Duties (Exhibit JE-67, CHN-13). 
106 2009 Tariff Implementation Program (Exhibit JE-21). 
107 2010 Tariff Implementation Plan (CHN-5). 
108 Adjustment of Export Tariffs Circular (CHN-1).  WT/DS394/R 
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  2. Whether export duties on bauxite, coke, fluorspar, magnesium, manganese, silicon 
metal, zinc and yellow phosphorus are incons istent with Paragraph 11.3 of China's 
Accession Protocol 
7.64 The second sentence of Paragraph 1.2 of China's Accession Protocol states that provisions of 
the Protocol are "an integral part of the WTO Agreement".  Thus, the provisions of the Accession 
Protocol are enforceable in WTO dispute settlement proceedings pursuant to Article 1.1 of the DSU.  
This is consistent with the approach taken by panels and the Appellate Body.
109 
7.65 Paragraph 11.3 of China's Accession Protocol110 contains specific obligations with respect to 
export duties and provides that: 
"China shall eliminate all taxes and char ges applied to exports unless specifically 
provided for in Annex 6 of this Protocol or applied in conformity with the provisions 
of Article VIII of the GATT 1994." 
7.66 Annex 6 of China's Accession Protocol111, entitled "Products Subject to Export Duty", lists 84 
different products, each identified by an eight-digit HS (Harmonized System) number, and product 
description.  The Note to Annex 6 states that:  
"China confirmed that the tariff levels in cluded in this Annex are maximum levels 
which will not be exceeded.  China confirmed furthermore that it would not increase the presently applied rates, except unde r exceptional circumstances.  If such 
circumstances occurred, China would cons ult with affected members prior to 
increasing applied tariffs with a view to  finding a mutually acceptable solution." 
7.67 Generally, the complainants claim that the e xport duties imposed by China on the exportation 
of the relevant raw materials cannot be justifie d by either of the exceptions mentioned in 
Paragraph 11.3 quoted above. They submit that, except for yellow phosphorus, the relevant raw 
materials at issue are not included in Annex 6 of  China's Accession Protocol. The complainants add 
that such duties are not covered by Article VIII of  the GATT 1994 which, in any case, is not invoked 
by China to justify such export duties.
112  
7.68 The Panel considers that an analysis of the WTO consistency of the 2009 Tariff 
Implementation Program must also involve an analysis of the Customs Law  and the Regulations on 
Import and Export Duties .  This is not to say that individually each of those measures would  
necessarily be WTO-inconsistent; rather, when they operate in concert to result in WTO-inconsistent 
duties, it is then that they would become prima facie  WTO-inconsistent.  It is only by examining these 
three measures as they work in concert that th e Panel can reach a final determination on the 
complainants' export duty claims. The Panel consid ers that findings on the measures acting in concert 
is necessary so that annually renewed measures do not evade WTO dispute settlement review merely 
through their expiration during the Panel proceedings. 
                                                      
109 See Panel and Appellate Body reports, China – Auto Parts  and China – Publications and 
Audiovisual Products . 
110 China's Accession Protocol to the WTO, WT/L/432 (Exhibit JE-2). 
111 China's Accession Protocol to the WTO WT/L/432, p. 93 (Exhibit JE-2). 
112 The United States and Mexico clai m that China's export du ties are inconsistent with Article VIII of 
the GATT 1994; the Panel considers those claims in Section VII.B of these Panel Reports. WT/DS394/R 
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  (a) Export duties on "yellow phosphorous" (HS 2804.7010) 
7.69 The complainants challenge the export duty imposed on yellow phosphorus (HS 2804.7010).  
They submit that China committed, pursuant to Ar ticle 11.3 and Annex 6 of its Accession Protocol, 
not to exceed an export duty rate maximum level of 20% on yellow phosphorous.  According to the 
complainants, China imposes a "regular" ad valorem export duty rate of 20% on yellow phosphorus.  
From 1 January 2009, in addition to this regular export duty, they argue that China imposed a 
"special" export duty rate of 50% on yellow phosphorus pursuant to the 2009 Tariff Implementation 
Program .
113  
7.70 China claims that the Adjustment of Export Tariffs Circular terminated the special export duty 
rate of 50% from 1 July 2009 – before the date of establishment of this Panel. Therefore, according to 
China, at the time of the Panel's establishment, China maintained a total export duty of 20% on yellow 
phosphorous, consistent with its obligat ion under the Protocol of Accession.114  China requests the 
Panel to make no findings on the 2009 Tariff Implementation Program115, in respect of yellow 
phosphorus.116  
7.71 The Panel agrees with China that the Adjustment of Export Tariffs removed the special export 
duty rate as of 1 July 2009, before the date of est ablishment of this Panel.  Furthermore, the Panel 
notes that this measure was duly published.117  Therefore, on 21 December 2009, yellow phosphorous 
was subject to the regular export duty of 20%, wh ich does not exceed the maximum rate listed in 
Annex 6 of China's Accession Protocol and is ther efore consistent with China's WTO obligations.118  
Accordingly, the Panel concludes that the provision of the 2009 Tariff Implementation Program119 
applicable to yellow phosphorus that was in force at the time of the Panel's establishment is not 
inconsistent with China's WTO obligations. The Pa nel makes no findings with respect to previous 
measure – actually challenged by the complainants  – that removed the special duty of 50% imposed 
on yellow phosphorus before the Panel's establishment.120  
(b) Export duties on bauxite, including "refractor y clay" (HS 2508.3000), "aluminium ores and 
concentrates" (HS 2606.0000) and "aluminium ash residues" (HS 2620.4000) 
7.72 The complainants claim that from 1 January 200 9, China imposed an export duty rate at the 
level of 15% on refractory clay (HS 2508.3000)121 and on "aluminium ores and concentrates "(HS 
2606.0000)122, and an export duty at the level of 10% on "aluminium ash residues" (HS  
2620.4000).123  The complainants add that none of the thr ee categories of bauxite referred to above are 
listed in Annex 6 of China's WTO Accession Protocol  and that the duties cannot be justified under 
Article VIII of the GATT 1994. 
                                                      
113 2009 Tariff Implementation Program (Exhibit JE-21). 
114 See China's first written submission, para. 56. 
115 2009 Tariff Implementation Program (Exhibit JE-21). 
116 The Panel notes that the Adjustment of Export Tariffs Circular (CHN-1) removed the special duty of 
50% imposed on  yellow phosphorus.   
117 See China's response to Panel question No. 8 following  the second substantive meeting, para. 27. 
118 See China's response to Panel question No. 4 following the second substantive meeting, para. 25. 
119 2009 Tariff Implementation Program  (Exhibit JE-21). 
120 The Adjustment of Export Tariffs Circular (CHN-1) removed the special duty of 50% imposed on 
yellow phosphorus.   
121 2009 Tariff Implementation Program  (Exhibit JE-21), Section II(2). 
122 2009 Tariff Implementation Program  (Exhibit JE-21), Section II(2). 
123 2009 Tariff Implementation Program  (Exhibit JE-21).  WT/DS394/R 
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  7.73 China asserts that the 2010 Tariff Implementation Program
124 removed the duties as of 1 
January 2010.125  China argues that the Panel should consider only the 2010 measure on bauxite and 
hence the Panel should conclude that China does not  maintain WTO-inconsistent export duties on the 
three categories of bauxite at issue.  
7.74 The Panel recalls its earlier decision that its terms of reference are limited to measures in 
force at the time of its establishment on 21 D ecember 2009 and that, at the request of the 
complainants, it will not make findings on any 2 010.  The Panel notes, however, that China's 2010 
Tariff Implementation Program  does not maintain an export duty on any category of bauxite.  
7.75 The three categories of bauxite at issue are not listed in Annex 6 of China's Accession 
Protocol.  Moreover, China does not invoke Article VIII to justify any of the export duties challenged 
by the complainants.  China does not contest that it imposed such export duties on bauxite on 21 December 2009.   
7.76 The Panel finds that the series of measures, made up of the Customs Law  
126, Regulations on 
Import and Export Duties127, and 2009 Tariff Implementation Program128 when operating in concert, 
results in the imposition of export duties on different  forms of bauxite, which is inconsistent with 
Paragraph 11.3 of China's Accessi on Protocol.  This is not to sa y that individually each of those 
measures is necessarily WTO-inconsistent; rather, wh en they operate in concert to result in WTO-
inconsistent duties, it is then that they become prima facie  WTO-inconsistent.  The Panel recalls 
WTO jurisprudence that "a prima facie  case is one which, in the absence of effective refutation by the 
defending party, requires a panel, as a matter of law,  to rule in favour of the complaining party".129   
7.77 The Panel finds, therefore, that, with respect  to its export duty on bauxite, China has acted 
inconsistently with its WTO obligations. 
(c) Export duties on "coke" (HS 2704.0010)  
7.78 The complainants claim that China imposed a temporary export duty at the level of 40% on 
coke and semi-coke (HS 2704.0 010) from 1 January  2009.130  They add that "coke" is not listed in 
Annex 6 of China's Accession Protocol and that the duties cannot be justified by Article VIII of the 
GATT 1994.  
7.79 China does not contest that it imposed this duty on 21 December 2009.  China does not 
invoke Article VIII and reiterates its  position with respect to the 2010 measures.  In addition, China 
claims that its export duties as applied to coke are justified pursuant to Article XX(b) of the 
GATT 1994.131 
7.80 The Panel notes that coke is not listed in Anne x 6 of China's Accession Protocol.  The Panel 
finds that the series of measures, made up of the Customs Law  132, Regulations on Import and Export 
Duties133, and 2009 Tariff Implementation Program134 when operating in concert, result in the 
                                                      
124 2010 Tariff Implementation Plan  (Exhibit CHN-5). 
125 China's first written submission, para. 84. 
126 Customs Law (Exhibit CHN-14, JE-68). 
127 Regulations on Import and Export Duties (Exhibits CHN-13, JE-67). 
128 2009 Tariff Implementation Program , (Exhibit JE-21). 
129 Appellate Body Report, EC – Hormones , para. 104. 
130 2009 Tariff Implementation Program , (Exhibit JE-21). 
131 China's first written submission, paras. 197, 199. 
132 Customs Law (Exhibit CHN-14, JE-68). 
133 Regulations on Import and Export Duties (Exhibits CHN-13, JE-67). WT/DS394/R 
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  imposition of export duties on coke wh ich is inconsistent with Para graph 11.3 of China's Accession 
Protocol.  This is not to say that individually each of those measures is necessarily WTO-inconsistent; 
rather, when they operate in concert to result in WT O-inconsistent duties, it is then that they become 
prima facie  WTO-inconsistent.   
7.81 The Panel provisionally finds, therefore, that China has acted inconsistently with its WTO 
obligations.  The Panel will consider below China's defence that the application of export duties to 
coke is justified pursuant to GATT Article XX(b).   
(d) Export duties on fluorspar, including "met-spar" (HS 2529.2100) and "acid-spar" 
(HS 2529.2200)  
7.82 The complainants claim that China imposed a temporary export duty at the level of 15% on 
"met-spar" (HS 2529.2100), and on "acid-spar " (HS 2529.2200) as from the January 1, 2009.
135  They 
add that these forms of fluorspar are not listed in Annex 6 of China's Accession Protocol and the duties cannot be justified by Article VIII of the GATT 1994.  
7.83 China does not contest that it imposed these du ties as of 21 December 2009. China does not 
invoke Article VIII and reiterates its  position with respect to the 2010 measures.  In addition, China 
claims that its export duties are justified pursuant to Article XX(g) of the GATT 1994.   
7.84 The Panel notes that these forms of fluorspar ar e not listed in Annex 6 of China's Accession 
Protocol.  The Panel finds that the series of measures, made up of the Customs Law  
136, Regulations 
on Import and Export Duties137, and 2009 Tariff Implementation Program138 when operating in 
concert, result in the imposition of export duti es on fluorspar which is inconsistent with 
Paragraph 11.3 of China's Accession Protocol. This is not to say that individually each of those 
measures is necessarily WTO-inconsistent; rather, wh en they operate in concert to result in WTO-
inconsistent duties, it is then that they become prima facie  WTO-inconsistent.   
7.85 The Panel provisionally finds, therefore, that China has acted inconsistently with its WTO 
obligations.  The Panel will consider below China's defence that the application of export duties to 
fluorspar is justified pursuant to GATT Article XX(g).   
(e) Export duties on  magnesium, including "ma gnesium metal" (HS 8104.1100), "unwrought 
magnesium" (HS 8104.1900), and "magnesium waste and scrap" (HS 8104.2000) 
7.86 The complainants claim that China imposed a temporary export duty at the level of 10% on 
"magnesium metal" (HS 8104.1100), "unwroug ht magnesium" (HS 8104.1900) and "magnesium 
waste and scrap" (HS 8104.2000) from 1 January 2009.139  They add that these forms of magnesium 
are not listed in Annex 6 of China's Accession Prot ocol and that the duty cannot be justified by 
Article VIII of the GATT 1994.  
7.87 China does not contest that it imposed these du ties as of 21 December 2009.  China does not 
invoke Article VIII and reiterates its position with re spect to the 2010 measures.  In addition, China it 
claims that its export duties as applied to these forms of magnesium are justified pursuant to 
Article XX(b) of the GATT 1994.   
                                                                                                                                                                     
134 2009 Tariff Implementation Program , (Exhibit JE-21). 
135 2009 Tariff Implementation Program , (Exhibit JE-21). 
136 Customs Law (Exhibit CHN-14, JE-68). 
137 Regulations on Import and Export Duties (Exhibits CHN-13, JE-67). 
138 2009 Tariff Implementation Program , (Exhibit JE-21). 
139 2009 Tariff Implementation Program , (Exhibit JE-21).  WT/DS394/R 
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  7.88 The Panel notes that these forms of magnesium are not listed in Annex 6 of China's Accession 
Protocol.  The Panel finds that the series of measures, made up of the Customs Law  
140, Regulations 
on Import and Export Duties141, and 2009 Tariff Implementation Program142 when operating in 
concert, result in the imposition of export duti es on magnesium which is inconsistent with 
Paragraph 11.3 of China's Accessi on Protocol.  This is not to sa y that individually each of those 
measures is necessarily WTO-inconsistent; rather, wh en they operate in concert to result in WTO-
inconsistent duties, it is then that they become prima facie  WTO-inconsistent.   
7.89 The Panel provisionally finds, therefore, that China has acted inconsistently with its WTO 
obligations.  The Panel will consider below China's defence that the application of export duties to 
magnesium is justified pursuant to GATT Article XX(b).   
(f) Export duties on manganese, including "manga nese ores and concentrates" (HS 2602.0000) 
and "unwrought manganese waste and scrap" (HS 8111.00.10) and "unwrought manganese powder" (HS 8111.0010) 
7.90 The complainants claim that China imposed a temporary export duty at the level of 15% on 
"manganese ores and concentrates" (HS No. 2602.0000)  and a temporary export duty at the level of 
20%  on "unwrought manganese waste and scrap " (HS 8111.00.10) and "unwrought manganese 
powder" (HS 8111.0010) from 1 January 2009.
143  They add that these materials are not listed in 
Annex 6 of China's Accession Protocol and that the duties cannot be justified by Article VIII of the 
GATT 1994. 
7.91 China does not contest that it imposed such duty as of 21 December 2009.  China does not 
invoke Article VIII with respect to manganese and reiterates its position with respect to the 2010 
measures.  In addition, China claims that its e xport duties as applied to unwrought manganese waste 
and scrap and unwrought manganese powder are justified pursuant to Article XX(b) of the 
GATT 1994.144  
7.92 The Panel notes that these forms of manganese are not listed in Annex 6 of China's Accession 
Protocol.  The Panel finds that the series of measures, made up of the Customs Law  145, Regulations 
on Import and Export Duties146, and 2009 Tariff Implementation Program147 when operating in 
concert, result in the imposition of export on tho se forms of manganese which is inconsistent with 
Paragraph 11.3 of China's Accessi on Protocol.  This is not to sa y that individually each of those 
measures is necessarily WTO-inconsistent; rather, wh en they operate in concert to result in WTO-
inconsistent duties, it is then that they become prima facie  WTO-inconsistent.   
7.93 With respect to unwrought manganese wast e and scrap and unwrought manganese powder, 
the Panel finds, provisionally, that China has acted inconsistently with its WTO obligations and  will 
consider below China's defence that the applica tion of export duties is justified pursuant to GATT 
Article XX(b).  
                                                      
140 Customs Law (Exhibit CHN-14, JE-68). 
141 Regulations on Import and Export Duties (Exhibits CHN-13, JE-67). 
142 2009 Tariff Implementation Program , (Exhibit JE-21). 
143 2009 Tariff Implementation Program , (Exhibit JE-21). 
144 China's response to Panel question  No. 4 following the first substantive meeting. 
145 Customs Law (Exhibit CHN-14, JE-68). 
146 Regulations on Import and Export Duties (Exhibits CHN-13, JE-67). 
147 2009 Tariff Implementation Program , (Exhibit JE-21). WT/DS394/R 
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  7.94 With respect duties on manganese ores and concen trates the Panel recalls WTO jurisprudence 
that "a prima facie  case is one which, in the absence of eff ective refutation by the defending party, 
requires a panel, as a matter of law, to rule in favour of the complaining party".
148   
(g) Export duties on "silicon metal" (HS 2804.6900) 
7.95 The complainants claim that China imposed a temporary export duty at the level of 15% on 
silicon metal (HS 2804.6900)  from 1 January  2009.149  They add that "silicon metal" is not listed in 
Annex 6 of China's Accession Protocol and that the duties cannot be justified under Article VIII of the 
GATT 1994. 
7.96 China does not contest that it imposed this duty as of 21 December 2009.  China does not 
invoke Article VIII and reiterates its position with respect to the 2010 measures.  China does not attempt to justify the export duty rate that it imposed on silicon metal during 2009.
150   
7.97 The Panel notes that silicon metal is not one of the products listed in Annex 6 of China's 
Accession Protocol.  The Panel finds that the series of measures, made up of the Customs Law  151, 
Regulations on Import and Export Duties152, and 2009 Tariff Implementation Program153 when 
operating in concert, result in the imposition of ex port duties on silicon metal which is inconsistent 
with Paragraph 11.3 of China's Accession Protocol.  This is not to say that individually each of those 
measures is necessarily WTO-inconsistent; rather, wh en they operate in concert to result in WTO-
inconsistent duties, it is then that they become prima facie  WTO-inconsistent.   
7.98 The Panel finds, therefore, that China has acted inconsistently with its WTO obligations.  The 
Panel recalls WTO jurisprudence that "a prima facie  case is one which, in the absence of effective 
refutation by the defending party, requires a panel, as a matter of law, to rule in favour of the 
complaining party".154   
(h) Export duties on zinc, including "zinc waste a nd scrap" (HS 7902.0000), "hard zinc spelter" 
(HS 2620.1100), and "other zinc ash and residues" (HS 2620.1900)   
7.99 The complainants claim that from 1 January 20 09, China imposed temporary export duties at 
a rate of 10% on "zinc waste and scrap" (HS 7902.0000)155, "hard zinc spelter" (HS 2620.1100) 156, 
and "other zinc ash and residues" (HS 2620.1900).157  They add that the three forms of zinc are not 
listed in Annex 6 of China's Accession Protocol and th at the duties cannot be justified by Article VIII 
of the GATT 1994. 
7.100  China does not contest that it imposed these du ties as of 21 December 2009.  China does not 
invoke Article VIII and reiterates its position on the 2010 measures.  In addition, China claims that its 
export duties applied to these forms of zinc are justif ied pursuant to Article XX(b) of the GATT 1994.   
                                                      
148 Appellate Body Report, EC – Hormones , para. 104. 
149 2009 Tariff Implementation Program , (Exhibit JE-21). 
150 See China's response to Panel question No. 4 following the first substantive meeting. 
151 Customs Law (Exhibit CHN-14, JE-68). 
152 Regulations on Import and Export Duties (Exhibits CHN-13, JE-67). 
153 2009 Tariff Implementation Program , (Exhibit JE-21). 
154 Appellate Body Report, EC – Hormones , para. 104. 
155 2009 Tariff Implementation Program , (Exhibit JE-21). 
156 2009 Tariff Implementation Program , (Exhibit JE-21), Section II(2). 
157 2009 Tariff Implementation Program , (Exhibit JE-21), Section II(2).  WT/DS394/R 
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  7.101  The Panel notes that these forms of zinc are not listed in Annex 6 of China's Accession 
Protocol.  The Panel finds that the series of measures, made up of the Customs Law  
158, Regulations 
on Import and Export Duties159, and 2009 Tariff Implementation Program160 when operating in 
concert, result in the imposition of export duties on zinc which is inconsistent  with Paragraph 11.3 of 
China's Accession Protocol.  This is not to say that  individually each of those measures is necessarily 
WTO-inconsistent; rather, when they operate in c oncert to result in WTO-inconsistent duties, it is 
then that they become prima facie  WTO-inconsistent.  The Panel provi sionally finds, therefore, that 
China has acted inconsistently with its WTO oblig ations.  The Panel will consider below China's 
defence that the application of export duties to zi nc is justified pursuant to GATT Article XX(b).   
3. Whether China failed to consult pursuant to the Note to Annex 6 to China's Accession 
Protocol 
7.102   In its first written submission, the European Union claims161 that China has violated the 
obligation under Annex 6 to Chin a's Accession Protocol to consult "with other affected WTO 
Members prior to the imposition of the export du ties imposed on bauxite, coke, fluorspar, magnesium, 
manganese, silicon metal and zinc.162  China acknowledges that it failed to consult pursuant to the 
Note to Annex 6.163 
7.103  The Panel recalls that the Note to Anne x 6 of China's Accession Protocol states: 
"China confirmed that the tariff levels in cluded in this Annex are maximum levels 
which will not be exceeded. China confirmed furthermore that it would not increase 
the presently applied rates, except under exceptional circumstances. If such 
circumstances occurred, China would cons ult with affected members prior to 
increasing applied tariffs with a view to  finding a mutually acceptable solution." 
7.104  Pursuant to this requirement, and in light of  China's admission, the Panel concludes that 
China has in fact failed to consult with other a ffected WTO Members prior to the imposition of the 
export duties imposed on bauxite, coke, fluorspar, magnesium, manganese, silicon metal and zinc, in 
violation of its obligations under A nnex 6 to China's Accession Protocol. 
4. Summary 
7.105  For each of these products (bauxite, coke, fl uorspar, magnesium, manganese, silicon metal 
and zinc164), the series of measures operating in concert has resulted in the imposition of export duties 
that are inconsistent with China's obligations unde r Paragraph 11.3 of China's Accession Protocol.  It 
is only by examining these three measures as they wo rk in concert that the Panel concluded that it 
could reach a final determination on the complain ants' export duty claims.  The Panel did not reach 
the conclusion that individually each of those measures is necessarily  WTO-inconsistent; rather, when 
they operate in concert to result in WTO-incons istent duties, it is then that they become prima facie  
                                                      
158 Customs Law (Exhibit CHN-14, JE-68). 
159 Regulations on Import and Export Duties (Exhibits CHN-13, JE-67). 
160 2009 Tariff Implementation Program , (Exhibit JE-21). 
161 European Union's first written submission, paras. 254, 258, 262, 266, 270, 274, 278, 286, 290, 294, 
298, 302, 306 and 310. 
162 The specific forms of the bauxite, coke, fluorspar, magnesium, manganese, silicon metal and zinc 
subject to the European Union's claims  are identified in Exhibit JE-5 and para. 2.2 of the Descriptive Part to 
these Reports. 
163 China's first written submission, para. 92. 
164 The specific forms of the raw materials subject to the complainants' claims are identified in Exhibit 
JE-5 and para. 2.2 of the Descriptive Part to these Reports. WT/DS394/R 
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  WTO-inconsistent.  The Panel recalls its view th at findings on the measures acting in concert is 
necessary so that annually renewed measures do not  evade WTO dispute settlement review merely 
through their expiration during the Panel proceedi ngs.  The Panel does not make any findings on the 
complainants' claims relating to yellow phos phorus for the reasons mentioned above.
165  The Panel 
further concludes that China did not consult wi th other affected WTO Members prior to the 
imposition of the export duties imposed on bauxite , coke, fluorspar, magnesium, manganese, silicon 
metal and zinc, contrary to its obligations  under Annex 6 to China's Accession Protocol. 
7.106  The Panel will consider below China's defence that  its export duty applied to fluorspar may be 
justified pursuant to Article XX(g) of the GATT 1994.   The Panel will also consider China's defence 
that its export duties applied to coke, magnesium, zinc and certain forms of manganese (unwrought 
manganese waste and scrap and unwrought manga nese powder) may be justified pursuant to 
Article XX(b) of the GATT 1994. 
5. Whether export duties on bauxite, coke, fluorspar, magnesium, manganese, silicon 
carbide, and zinc are justified pursuant to Article XX of the GATT 1994 
7.107  The Panel determined above that the applica tion of temporary export duties to non-ferrous 
metal scrap of zinc, magnesium metal, and ma nganese metal; to coke, magnesium metal and 
manganese metal; and to fluorspar, is  inconsistent with Paragraph 11 .3 of China's Accession Protocol. 
7.108  China argues that temporary export duties a pplied to non-ferrous metal scrap of zinc, 
magnesium metal, and manganese metal; and to co ke, magnesium metal and manganese metal, are 
justified pursuant to Article XX(b).  In addition,  China argues that temporary duties applied to 
fluorspar are justified pursuant to Article XX(g).  As  a threshold matter, the complainants argue that 
China is not entitled to resort to the defences of Article XX to justify export duties that are 
inconsistent with Paragraph 11.3 of China's Access ion Protocol.  Accordingly, they argue that China 
cannot justify the application of such duties to these  raw materials.  The complainants further argue 
that were the Panel to conclude that Article XX  may be invoked as a defence to violations of 
Paragraph 11.3 of China's Accession Protocol, China failed to demonstrate that the application of 
duties to these raw materials is justified pur suant to Article XX(b) or Article XX(g). 
7.109  The Panel will first assess whether China is en titled to invoke the defences provided for in 
Article XX for violations of Paragraph 11.3 of its Accession Protocol.  If the provisions of Article XX 
are available to China, the Panel will then cons ider whether China has demonstrated that the 
application of duties to these raw materials is jus tified pursuant to Article XX(b) or Article XX(g). 
(a) Whether Article XX of the GATT 1994 is available as a defence to a claim under 
Paragraph 11.3 of China's Accession Protocol 
7.110  China argues that Paragraph 11.3 of its Acces sion Protocol and the reference to exceptional 
circumstances in Annex 6 support China's rights to i nvoke the defences of Article XX.  For China, 
Article XX may be used to justify the application of export duties to non-ferrous metal scrap of zinc, 
magnesium metal, and manganese metal; to coke , magnesium metal and manganese metal; and to 
fluorspar.  For China, the wording of Paragraph 11. 3 of the Accession Protoc ol and of Paragraph 170 
of the Working Party Report support the interpreta tion that China's Accession Protocol as a whole, 
together with the covered agreements  forming the WTO Single Undertaking166, provide China with 
                                                      
165 See para. 7.71. 
166 China's second written submission, para. 155.  WT/DS394/R 
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  the right to invoke GATT Article XX justificati ons for its export duties inconsistent with its 
Accession Protocol.
167     
7.111  The complainants argue that China is not entitle d to resort to the defences of Article XX to 
justify export duties inconsistent with Paragra ph 11.3 of China's Accession Protocol.  For the 
complainants, this is clear from the wording of Paragraph 11.3 of the A ccession Protocol and the 
related provisions of the Working Party Report.  They argue that the defences of Article XX are 
available only for GATT violations, or when Article  XX justifications have been incorporated by 
reference into the relevant pa rt of another WTO agreement.168  WTO Members' Accession Protocols 
are integral parts of the WTO Agreement 
(i) WTO Members' Accession Protocols are integral parts of the WTO Agreement 
7.112  Accession to the WTO is achieved through nego tiation with other WTO Members. Pursuant 
to Article XII of the Marrakesh Agreement, accessions  take place "on terms to be agreed" between the 
acceding Member and the WTO membership.  Mo st accession processes take several years to 
complete and lead to detailed negotiated provision s.  The terms of each WTO Member's accession are 
set out in its Accession Protocol and accompanying  Working Party Report.  The negotiated agreement 
between the WTO membership and the acceding Memb er results in a delicate balance of rights and 
obligations, which are reflected in the specifi c wording of each commitment set out in these 
documents. Ultimately, the acceding Member and the WTO membership recognize that the 
intensively negotiated content of an accession pack age is the "entry fee" to the WTO system. 
7.113  WTO Members' accession protocols are considered to form integral parts of the WTO 
Agreement.  For example, Paragraph 1.2 of Pa rt I of China's Accession Protocol provides: 
"The WTO Agreement to which China acced es shall be the WTO Agreement as 
rectified, amended or otherwise modified  by such legal instruments as may have 
entered into force before the date of accessi on. This Protocol, which shall include the 
commitments referred to in paragra ph 342 of the Working Party Report, shall be an 
integral part of the WTO Agreement ." (italics added) 
7.114  In this dispute, as with previous disputes concerned with China's Accession Protocol, all 
parties agree that China's Accession Protocol form s an integral part of the WTO Agreement.  
Moreover, all parties agree that WTO Members can  initiate WTO dispute settlement proceedings on 
the basis of a claim of violation of China's Accession Protocol.169  Finally, all parties agree that 
commitments included in the related Working Part y Report, and incorporated into the Accession 
Protocol by cross-reference, are binding a nd enforceable through WTO dispute settlement 
proceedings.   
                                                      
167 China's second written submission, para. 166. 
168 European Union's second written submission, para s. 219, and 220; United States' first written 
submission, para. 13; Mexico's first written submission, para  16.  The European Union suggests that the fact that 
GATT Article XX cannot serve as a jus tification for violations outside GA TT has most recently been confirmed 
by the Panel in US – Poultry (China), European Union's second written submission, para. 226. 
169 This was recognized in China – Auto Parts , adopted on 15 December 2008 and in China – 
Publications and Audiovisual Products , adopted on 19 January 2010 when both panels and Appellate Body 
assessed claims based on China's Accession Protocol. WT/DS394/R 
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  7.115  Accordingly, the Panel will interpret the provisi ons of China's Accession Protocol – like those 
of the WTO covered agreements – in accordance with  the customary rules of interpretation of public 
international law, including those codified in Articles 31, 32 and 33 of the Vienna Convention .
170   
(ii) The availability of Article XX of the GATT 1994 for violations of Paragraph 11.3 of China's 
Accession Protocol 
7.116  The availability of the defences provided for in Article XX of the GATT 1994 raises 
questions on the legal status of accession protocols within the WTO Agreement, and the relationship 
between different instruments within the WTO legal a nd institutional system, and in particular in this 
dispute, between Paragraph 11.3 of China's Access ion Protocol and the other components of the WTO 
Agreement.  
7.117  The Appellate Body has interpreted China's Accession Protocol on two previous occasions171,  
once dealing with the availability of Article XX as a defence to justify a violation of China's 
Accession Protocol.172  In China – Publications and Audiovisual Products , China invoked Article XX 
of the GATT 1994 to justify a violation of Paragr aph 5.1 of its Accession Protocol dealing with 
trading rights.  In its assessment, the Appellate  Body did not discuss the systemic relationship 
between provisions of China's Accession Protocol  and those of the GATT 1994, within the WTO 
Agreement.  The Appellate Body instead focussed on  the text of the relevant provisions of the 
Protocol, including an examination of the meaning of the particular terms at issue, as well as the 
surrounding context and overall structure of the Accession Protocol.173 
7.118  Paragraph 5.1 of China's Accession Protocol provides: 
"Without prejudice to China's right to regulate trade in a manner consistent with the 
WTO Agreement, China shall progressively liberalize the availability and scope of 
the right to trade, so that, within three years after accession, all enterprises in China 
shall have the right to trade in all goods throughout the customs territory of China, 
except for those goods listed in Annex 2A which continue to be subject to state 
trading in accordance with this Protocol..." 
7.119  The Appellate Body interpreted the language contained in the introductory clause of 
Paragraph 5.1 of China's Accession Protocol – "without prejudice to China's right to regulate trade in 
a manner consistent with the WTO Agreement" – to mean that the justifications of Article XX of the 
GATT 1994 were incorporated, by way of reference, into the Protocol and this formed a constituent 
part of this specific accession commitment. Conse quently, China could rely on this incorporation to 
invoke Article XX as a defence for a violation of Article 5.1 of its Accession Protocol.174 Ultimately, 
the Appellate Body rejected China's Article XX de fence because the conditions set out in Article XX, 
as incorporated into this specific ac cession commitment, had not been met.175   
7.120  In the present dispute, the Panel is not d ealing with Paragraph 5.1 of China's Accession 
Protocol;  rather the Panel must interpret the alt ogether different language f ound in Paragraph 11.3 of 
                                                      
170 The Vienna Convention on the Law of Treaties , done at Vienna, 23 May 1969, 1155 UNTS 331;  
8 International Legal Materials 679. 
171 Appellate Body Reports, China – Publications and Audiovisual Products , and China – Auto Parts . 
172 Appellate Body Report on China – Publications and Audiovisual Products ; Panel Report on China 
– Publications and Audiovisual Products.  
173 Appellate Body Report on China – Publications and Audiovisual Products , para. 217. 
174 Appellate Body Report on China – Publications and Audiovisual Products , para. 230. 
175 Ibid., para. 337.  WT/DS394/R 
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  China's Accession Protocol in order to determine whether GATT Article XX defences are available to 
justify violations of Paragraph 11.3 of China's Accession Protocol.    
Interpretation of Paragraph 11.3 of China's Accession Protocol 
Ordinary meaning 
7.121  Paragraph 11.3 of China's Accession Protocol provides: 
"China shall eliminate all taxes and char ges applied to exports unless specifically 
provided for in Annex 6 of this Protocol or  applied in conformity with the provisions 
of Article VIII of the GATT 1994." 
7.122  For the Panel, the ordinary meaning of the terms "s hall eliminate" is that China, at the time of 
the conclusion of its Accession Protocol, was mainta ining export duties. The complainants report that  
at the time of its accession to the WTO, Ch ina maintained export duties on 58 products.176  Annex 6 
of China's Accession Protocol lists 84 products on wh ich some export duties were possible.  At the 
time of China's accession to the WTO, WTO Memb ers and China agreed that China would not 
maintain any export tariff taxes and charges, ex cept on those 84 products and within the maximum 
levels provided in Annex 6, or if such char ges could be justified under GATT Article VIII. 
7.123  In Annex 6, at the end of this list of 84 pr oducts for which maximum duty rates are provided, 
the following paragraph appears: 
"China confirmed that the tariff levels in cluded in this Annex are maximum levels 
which will not be exceeded. China confirmed furthermore that it would not increase 
the presently applied rates, except under exceptional circumstances. If such 
circumstances occurred, China would cons ult with affected members prior to 
increasing applied tariffs with a view to  finding a mutually acceptable solution." 
7.124  The Panel notes that Paragraph 11.3 of Chin a's Accession Protocol does not include any 
express reference to Article XX of the GATT 1994, or to provisions of the GATT 1994 more 
generally.  Moreover, Paragraph 11. 3 does not include an introductory  clause such as that found in 
Paragraph 5.1, which refers gene rally to "without prejudice to China's rights to regulate trade in a 
manner consistent with the WTO Ag reement".  As noted above, in China – Publications and 
Audiovisual Products , the Appellate Body interpreted this introductory clause to mean that the 
provisions of Article XX are available, by way of  incorporation, as a defence to violations of 
Paragraph 5.1 of China's Accession Protocol. 
7.125  China argues that Paragraph 11.3 and the referen ce to "exceptional circumstances" in Annex 6 
support China's right to invoke the defences of GATT Article XX.  The complainants argue that the 
wording of Paragraph 11.3 is clear and does not  include any reference to GATT Article XX.  
7.126  The Panel notes that Paragraph 11.3 of China's Accession Protocol refers to a specific set of 
exceptions: those covered by Annex 6 and those covered by GATT Article VIII.  Paragraph 11.3 
generally prohibits the use of export duties unless  those duties are applied to products expressly set 
out in Annex 6.  Annex 6 provides maximum expor t duty rates for listed products and states that:  
                                                      
176 The United States and Mexico submit that at th e time of China's accession, China maintained export 
duties on 58 products while, at the time these panel proceedings were initiated, China was maintaining export 
duties on 350 products.  This allegation is not contested by China. United States' first written submission, 
paras. 1-3 and Mexico's first written submission, paras. 1-2. WT/DS394/R 
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  "China confirmed that the tariff levels in cluded in this Annex are maximum levels 
which will not be exceeded.  China confirmed furthermore that it would not increase presently applied rates except under exceptional circumstances."
177   
It then contains a list of 84 products fo r which maximum export duty rates are stated. 
7.127  In the Panel's view, the ordinary meaning of these two sentences of Annex 6 is very clear.  
The use of the term "maximum levels" sets a de finitive ceiling in excess of which China may not 
impose export duties.  Furthermore, the second sente nce makes clear that any increase in the export 
duty rates applied at the time of the conclusion of China's Accession Protocol could be effected only 
in exceptional circumstances following consultations with affected Members.   
7.128  The second exception in Paragraph 11.3 refers to "t axes and charges . . . applied in conformity 
with the provisions of Article VIII of the GATT 1994".  In the Panel's view, this phrase makes it clear that China and the WTO Members decided that Chin a would not maintain any export duties, taxes or 
charges (additional to those provided for in Annex 6) unless  they were imposed consistently with 
Article VIII.   
7.129  The Panel recalls that Article VIII allows WTO Members to impose, at the border, a variety 
of fees or charges provided that they are limite d in amount to the approximate costs of services 
rendered and that they are imposed on or in conn ection with importation or exportation.  As such, 
Article VIII is clearly intended to govern fees and charges imposed in particular circumstances.  The 
Panel can find no general exception in the language of Paragraph 11.3 that would authorize China to 
maintain export duties other than in circumstances described in Annex 6 or in Article VIII of the 
GATT 1994. Notably, the language in  Paragraph 11.3 expressly refers to Article VIII, but leaves out 
reference to other provisions of the GATT 1994, such as Article XX.
178  In contrast to the language of 
Paragraph 5.1 of the Accession Protoc ol before the Appellate Body in China – Publications and 
Audiovisual Products , there is no general reference to the WTO Agreement or even to the 
GATT 1994.  While it would have been possible to  include a reference to the GATT 1994 or to 
Article XX, WTO Members evidently decided not  to do so. The deliberate choice of language 
providing for exceptions in Paragraph 11.3, together  with the omission of general references to the 
WTO Agreement or to the GATT 1994, suggest to us that the WTO Members and China did not 
intend to incorporate into Paragraph 11.3 the defences set out in Article XX of the GATT 1994. 
Context provided by other provisions of China's Working Party Report 
7.130  China argues that its position that Paragraph 11.3 of its Accession Protoc ol allows it to invoke 
the justifications of Article XX is confirmed by th e provisions of Paragraph 170 of its Working Party 
Report, which it regards as context.179   The complainants disagree. 
7.131  Paragraph 170 falls under the Section D of Ch ina's Working Party Report, which is entitled 
"Internal Policies Affecting Foreign Trade in G oods", subsection (1) is entitled "Taxes and Charges 
Levied on Imports and Exports".  Paragraph 170 provides: 
"[U]pon accession, China would ensure that its laws and regulati ons 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..." 
                                                      
177 Exhibit JE-2). 
178 The Panel recalls the doctrine expressio unius est exclusio alterius  see footnote 91 above. 
179 China's second written submission, paras. 165 and 166.  WT/DS394/R 
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  7.132  According to China, the use of the term "inc luding" makes clear that the list of provisions 
cited in Paragraph 170 is not e xhaustive – it refers to all goods-re lated obligations assumed under the 
WTO covered agreements, including the ri ghts and obligations of GATT Article XX.
180   
7.133  China submits that the language in Paragraph 5. 1 of its Accession Protocol – which authorizes 
recourse to Article XX – "is very sim ilar to the language in Paragraph 170".181  China notes the 
finding by the Appellate Body in China – Publications and Audiovisual Products  that "[t]he reference 
in the introductory clause to 'consistent with the WT O Agreement' constrains the exercise of [China's] 
regulatory power such that Ch ina's regulatory measures must be shown to conform to WTO 
disciplines".182  For China, "the Appellate Body's unwitti ng phrasing shows that the relevant language 
in Paragraph 5.1 and Paragraph 170 is synonymous  and not, as the complainants allege, fundamentally 
different."183  Therefore, China suggests, if Paragraph 5.1 includes the flexibilities of Article XX, so 
does Paragraph 170 of the Working Party Report.   
7.134  In addition, China argues that the DSU provides contextual support for the view that, under 
Paragraph 170, an export duty is "in full conform ity with WTO obligations" when it complies with 
Article XX of the GATT 1994.  Pointing to the la nguage in Paragraph 170, China notes that it is 
universally accepted that, under the DSU, a Member  may bring its measures fully into conformity 
with its WTO obligations by taking action to ensure  that its measures comply with GATT Article XX.  
Thus, a measure that complies with the obligations in Article XX must be regarded as being "in full 
conformity with WTO obligations ", as required by Paragraph 170.184   
7.135  The complainants argue that the explicit language of Paragraph 11.3 of the Accession 
Protocol and the parallel provisions  of Paragraphs 155 and 156 of China's Working Party Report that 
prohibit the use of export duties except in accord ance with Annex 6 and Article VIII, belie this 
interpretation. 
7.136  Before considering the provisions of China's Wo rking Party Report invoked by the parties, 
the Panel considers it useful to recall first the word ing of the sub-paragraphs 11.1 and 11.2 of China's 
Accession Protocol, which provide: 
"1. 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. 
2. China shall ensure that internal taxes and charges, including value-added 
taxes, applied or administered by nationa l or sub-national authorities shall be in 
conformity with the GATT 1994."   
7.137  As noted above, China emphasizes the phrase "in full conformity with its WTO obligations" 
contained in Paragraph 170 of the Working Party Report.  For China, this phrase, which is similar to 
the introductory phrase of paragraph 5.1 of Chin a's Accession Protocol, incorporates the flexibilities 
of GATT Article XX.   
7.138  The Panel observes that the phrase "in conform ity with the GATT 1994" does not appear in 
Paragraph 11.3.  Nor do the words "[w]ithout prejudice to China's right to regulate trade in a manner consistent with the WTO Agreement" appear in that paragraph.  However, it does appear in 
                                                      
180 China's second written submission, para. 166. 
181 China's opening oral stat ement at the second substantive meeting, para. 176. 
182 Appellate Body Report, China – Publications and Audiovisual Products , para. 222. 
183 China's opening oral stat ement at the second substantive meeting, para. 177. 
184 China's opening oral statemen t at the second substantive meeting, paras. 177, and 178. WT/DS394/R 
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  Paragraphs 11.1 and 11.2, quoted above.  In the Pa nel's view, this differenc e in wording between the 
three sequential sub-paragraphs is evidence of  a deliberate choice made by China and the WTO 
Members in setting out China's rights and obligations and it must be given effect and respected.  In 
addition, the fact that Paragraph 11.3 does not include the language "in conformity with WTO 
obligations" (which appears in Paragraphs 11.1 and 11.2) can only be understood to reflect agreement 
at the time of China's accession th at since China's export duties co mmitments arose exclusively from 
China's Accession Protocol, Article XX woul d not apply to such commitments.   
7.139  Moreover, the Panel does not see how the language  of Paragraph 5.1 of China's Accession 
Protocol can be equated with the language of Para graph 11.3 of the Accession Protocol or with the 
wording of Paragraph 170 of China's Working Party Report.  To use China's expression, the Panel is 
of the view that the language of Paragraph 5.1 is  not "synonymous" or even similar to that of 
Paragraph 11.3 of the Accession Protocol or  Paragraph 170 of the Working Party Report. 
7.140  If China and WTO Members wanted the defences  of GATT Article XX to be available to 
violations of China's export duty commitments, they could have said so in Paragraph 11.3 or 
elsewhere in China's Accession Protocol.
185  In addition, China and the WTO Members could have 
agreed that China's export duty commitments were an  integral part of China's commitments under the 
GATT 1994.  For instance, WTO Members could have  done this by incorporating China's export 
duties commitments into China's GATT 1994 Schedul e.  If China's export duties commitments were 
part of China's GATT 1994 Schedule, the genera l defences of Article XX of the GATT 1994 would 
be available to justify potential violations.  Howeve r, this is not what China and WTO Members chose 
to do.    
7.141  The Panel notes, in particular, that Para graph 170 does not refer to China's specific 
obligations on export duties; it refers to "cha rges and taxes levied on imports and exports".  
Paragraph 170 is permissible and authorises China to use such charges or tax es so long as they respect 
Articles I, III:2 and III:4 and XI:1 of GATT 199 4.  Thus Paragraph 170 essentially repeats the 
commitments existing under certain GATT rules.  The ma tter at issue in this dispute, and governed by 
Paragraph 11.3, is different; it is  concerned with duties and taxes that are imposed only on exports, 
and that are specifically prohibited under Paragraph 11.3 of the Accession Protocol186 and not 
regulated by the GATT 1994 .  In the Panel's view, Paragraph 170 of  the Working Party Report neither 
explicitly nor implicitly refers to any exceptions  or GATT 1994 flexibilities in relation to the 
prohibition on China to use export duties as prescribed by Paragraph 11.3 of the Accession Protocol.  
7.142  Paragraph 342 of China's Working Party Repor t takes note of commitments undertaken by 
China that are reproduced in Paragraph 170 of the Working Party Report.187  Thus the provisions of 
Paragraph 170 of the Working Party Report, like tho se of Paragraph 11.3 of the Protocol, are binding 
on China but impose different obligations: Paragr aph 170 deals with domestic taxes imposed on 
imports and exports and that must respect the specif ic rules of the GATT, wh ile Paragraph 11.3 deals 
with an obligation that does not otherwise exist in the GATT 1994: namely the prohibition on the use 
of export duties.    
                                                      
185 As discussed, the WTO Members and China did ma ke such a reference to the availability of GATT 
Article XX to justify export quotas. 
186 The Panel notes that five other WTO Members have commitments in their Accession Protocols and 
Working Party Reports regarding export duties: Croatia , Kingdom of Saudi Arabia Latvia, Mongolia, Ukraine, 
Vietnam. 
187 Paragraphs 155 and 156 are not listed in Paragraph 342 of the Working Party Report, which is itself 
explicitly mentioned in Article 1. 2 of China's Acces sion Protocol.  WT/DS394/R 
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  7.143  This interpretation is confirme d by Paragraphs 155 and 156 of China's Working Party Report, 
which deal explicitly with the specific commitments undertaken by  China with respect to the 
elimination of export duties.  The Panel recalls that Paragraphs 155 and 1 56 fall under Section C of 
China's Working Party Report, entitled "Export Regul ations".  Subsection C(1), under which these 
two provisions fall, is entitled "Customs Tariffs, F ees and Charges for Services Rendered, Application 
of Internal Taxes to Exports".   
7.144  The Panel recalls, first, the importance of the provisions of the Working Party Report have in 
shedding light on the interpretation to be given to related provisions of the Working Party Report or 
China's Accession Protocol. 
7.145  Paragraph 155 of China's Working Party Report has the same content as Paragraph 11.3 of 
China's Accession Protocol, providing that "taxes and charges should be eliminated unless applied in 
conformity with GATT Article VIII or listed in A nnex 6 to the Draft Protocol".  Paragraph 156 
provides: "China noted that the majority of prod ucts were free of export duty, although 84 items, 
including tungsten ore, ferrosilicon and some alum inium products, were subj ect to export duties".  
There is no reference, explicit or implicit, to th e availability of Article XX defences for such 
commitments.  Although they do not form part of the explicit commitme nts covered by China's 
Accession Protocol, the provisions of Paragraphs  155 and 156 of China's Working Party Report are 
part of the legal context of Paragraph 11.3 of China's Accession Protocol and articulate clearly the 
concerns of WTO Members at the time with respect to China's use of export duties.   
7.146  When those prohibitions on the use of export duties were negotiated, the WTO Members and 
China could have made reference to the defences of GATT Article XX - the way they did, for 
instance, concerning the use of quantitative rest rictions in Paragraphs 164 and 165 of China's 
Working Party Report - but the WTO Members and China evidently decided not to do so. 
7.147  The Panel fails to see how Paragraph 170 of Ch ina's Working Party Report can be interpreted 
to mean that the defences of Article XX are avai lable for China to justify violations of specific 
commitments on export duties.  This view is reinfo rced by the fact that China and the WTO Members 
did make explicit reference to exceptions when they intended to incorporate them.  For the Panel, the 
clear meaning of Paragraph 11.3, which deals explici tly with export taxes and charges, is not altered 
by Paragraph 170 of China's Working Party Report or by any other provisions of China's Accession 
Protocol. 
7.148  In sum, the Panel does not find in China's Wo rking Party Report any explicit or implicit 
provision that would allow China to invoke the general exceptions of Article XX of the GATT 1994 
to justify violations of Paragraph 11.3 of its Accession Protocol.   
Context provided by other provisions of the WTO Agreement 
7.149  The Panel has also considered whether ot her provisions of the GATT 1994 could support 
China's proposition that Article XX of the GATT 1994 should be available as a defence to the 
application of export duties in excess of commitme nts undertaken in Paragraph 11.3 (and Annex 6) of 
its Accession Protocol. WT/DS394/R 
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  7.150  The Panel observes that there are no gene ral umbrella exception in the Marrakesh 
Agreement.
188  Each WTO agreement provides its own set of exceptions or flexibilities applicable to 
the specific obligations found in each covered agreement. 
7.151  Other provisions of the GATT 1994 may be releva nt to export duties, but none of them 
contains disciplines applicable to export duties similar to those include d in Paragraph 11.3 of China's 
Accession Protocol and none of th em refer to GATT Article XX.   
7.152  This brings us to the issue of whether Artic le XX of the GATT 1994 can be invoked to justify 
a violation of a provision falling outside the GATT 1994.    
7.153  The Panel notes that Article XX provides that "not hing in this Agreemen t should be construed 
to prevent the adoption or enforc ement ... of [certain] measures...:" A priori , the reference to this 
"Agreement" suggests that the exceptions therein relate only to the GATT 1994, and not to other 
agreements.  On occasion, WTO Members have incor porated, by cross-reference, the provisions of 
Article XX of the GATT 1994 into other covered agre ements.  This was done, for example, with the 
TRIMs Agreement, which explicitly incorporates the ri ght to invoke the justifications of Article XX 
of the GATT 1994.  In the Panel's view, the legal basis for applying Article XX exceptions to TRIMs 
obligations is the text of the incorporation of the TRIMs Agreement, not the text of Article XX of the 
GATT 1994.  Other WTO agreements include their ow n exceptions.  For example, general exceptions 
are provided for in Article XIV of the GATS for GATS violations.  Other covered agreements, like 
TRIPS, the TBT or the SPS agreements, include  their own flexibilities and exceptions.   
7.154  In the Panel's view, it is reasonable under th ese circumstances to assume that, were GATT 
Article XX intended to apply to Paragraph 11.3 of  China's Accession Protocol, language would have 
been inserted to suggest this relationship.  Ho wever, as noted above, no such language is found in 
Paragraph 11.3 of  China's Accession Protocol.   
7.155  According to China, its right to apply expor t duties is found in the text of the covered 
agreements read as a whole . For China, the covered agreements affirm the inherent and sovereign 
right of every WTO Member to regulate trade, described by the Appellate Body in China – 
Publications and Audiovisual Products  as "an inherent power enjoyed by a Member government", 
rather than a "right bestowed by  international treaties such as the WTO Agreement ".189  According to 
China, the text of Paragraph 11.3 of its Accession Protocol shows that WTO Members, in imposing an 
obligation on China to forego export duties in certain circumstances, did not exclude the inherent right 
to regulate trade.190 
7.156  The Panel agrees with China that WTO Members have an inherent a nd sovereign right to 
regulate trade.191  WTO Members and China have exercised this right, inter alia , in negotiating and 
ratifying the WTO Agreement.  Chin a has exercised its inherent and sovereign right to regulate trade 
in negotiating, among other actions, the terms of its accession into the WTO.  
7.157  To the Panel, the implication of China's argumen t is that because it has an inherent right to 
regulate trade, this right prevails over WTO rules inte nded to govern the exercise of that right.  In the 
Panel's view, it is China's sovereign right to regulat e trade that enabled it to negotiate and agree with 
the provisions of Paragraph 11.3 of its Accession Prot ocol.  Thus, there is no contradiction between 
                                                      
188 For instance the Marrakesh Agreement contains  voting rules that are applicable to all WTO 
agreements but there is no "general exception" applicab le to all WTO agreements. 
189 China's second written submission, para. 162. 
190 China's second written submission, para. 164. 
191 China's second written submission, para. 162.  WT/DS394/R 
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  China's sovereign right to regulate trade, the rights acquired, and the commitments undertaken by 
China that are contained in its Accession Protocol, in cluding in its Paragraph 11.3.  On the contrary, 
China's Accession Protocol and its various rights  and obligations, are the ultimate expression of 
China's sovereignty.  
(iii) Conclusions 
7.158  For the Panel, the wording and the context of  Paragraph 11.3 precludes the possibility for 
China to invoke the defence of Article XX of the GATT 1994 for violations of the obligations contained in Paragraph 11.3 of China's Accession Protocol. 
7.159  For the foregoing reasons, the Panel concludes that there is no basis in China's Accession 
Protocol to allow the application of Article XX of the GATT 1994 to China's obligations in 
Paragraph 11.3 of the Accession Protocol.  To allow such exceptions to justify a violation when no 
exception was apparently envisaged or provided for,  would change the conten t and alter the careful 
balance achieved in the negotiation of China's Ac cession Protocol.  It would thus undermine the 
predictability and legal security of the international trading system. 
7.160  The Panel is mindful that excluding the applicability of Article XX justifications from the 
obligations contained in Paragraph 11.3 means that China is in a position unlike that of most other 
WTO Members who are not prohibited from using e xport duties, either via the terms of their 
respective accession protocols or their membership to the WTO at the time of its inception.  
However, based on the text before us, the Panel ca n only assume that this was the intention of China 
and the WTO Members when negotiating China's Acce ssion Protocol.  The situation created by this 
provision taken in isolation ma y be perceived as imbalanced
192, but the Panel can find no legal basis 
in the Protocol or otherwise to interpret Para graph 11.3 of China's Accession Protocol as permitting 
resort to Article XX of the GATT 1994. 
C. EXPORT QUOTAS  
7.161  The complainants allege that China's export quotas as applied to bauxite, coke, fluorspar, 
silicon carbide and zinc are inconsistent  with Article XI:1 of the GATT 1994.193  F o r  z i n c ,  i n  
particular, the complainants claim that China did not publish a 2009 quota level or any application procedures for interested enterprises, which effectively amounts to a ban, or zero quota, on zinc.   The complainants submit that these export quotas are also  inconsistent with Paragraph 1.2 of China's 
Accession Protocol and Paragraphs  162 and 165 of China's Working Party Report. The European 
Union further claims that China's e xport quota maintained on coke under the 2010 First Batch Coke 
Export Quota for FIEs  (foreign-invested enterprises) is in consistent with Ch ina's obligations.
194  
7.162  China requests the Panel to reject the complain ants' claims.  First, China submits that the 
Panel should reject the European Union's claim because the European Union did not sufficiently 
identify the measures in its submissions. In any event, China requests the Panel to reject the 
complainants' claims for failing to demonstrate that Article XI:1 applies to the export quotas.  China 
also submits that in order to demonstrate inconsis tency with Article XI:1, the complainants have the 
burden to demonstrate that the cond itions of Article XI:2(a) are not met. Finally, China argues that the 
                                                      
192 Another panel was also asked to interpret China's Accession Protocol and reached a similar 
conclusion, i.e. that it was not for it to "recalibrate what WTO Members has agreed to in the negotiation that led 
to the accession of China to  the WTO":  Panel Report, US – Tyres (China) , para. 7.10. 
193 The specific forms of the raw materials subject to  complainants' claims are identified in Exhibit 
JE-6 and in para. 2.2 of the Descriptive Part of these Reports. 
194 2010 First Batch Coke Export Quota for FIEs  (Exhibit JE-129). WT/DS394/R 
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  Panel should only consider the complainants' claims  in respect of measures in place in 2010.  China 
argues that the 2010 measures replaced those identifie d by the complainants in their Panel Requests 
and submissions and that they should form the focu s of the Panel's analysis. Under the 2010 measures, 
China submits that fluorspar is not subject to an export quota.   
7.163  To the extent the Panel were to find the expor t quotas to be inconsistent with Article XI:1, 
China submits that the export quota applied to refr actory-grade bauxite is not inconsistent with 
Article XI:1 because the export quota is temporarily a pplied to prevent or relieve critical shortages of 
refractory-grade bauxite within the meaning of Article XI:2(a).  In the alternative, China submits that 
the export quota applied to refractory-grade bauxite  is justified pursuant to Article XX(g) of the 
GATT 1994.  China also argues that export quotas app lied to coke and silicon carbide are justified 
pursuant to Article XX(b) of the GATT 1994.   
7.164  If the Panel were to find the export quotas to be  inconsistent with Article XI:1 and not 
justified pursuant to Article XX(g) or XX(b), Chin a requests the Panel to exercise judicial economy 
with respect to the complainan ts' claims under Paragraphs 162 and 165 of China's Working Party 
Report.  China argues these provisions contain obligations that are "duplicative of" those under Article XI:1. 
7.165  As a preliminary matter, the Panel recalls its fi nding in paragraph 7.33 a bove that, in general, 
measures that were in force when  the Panel was established on 21 December 2009 form the basis of 
its terms of reference.
195  The Panel notes the European Union's identification of the 2010 First Batch 
Coke Export Quota for FIEs196.  Because the 2010 First Batch Coke Export Quota for FIEs  was not 
yet in force on 21 December 2009, the Panel considers th at it is outside its terms of reference.  In 
addition, China submits that the Panel should not consider the complainants ' claim in respect of 
fluorspar because the 2010 measures do not impose a quot a.  At the request of the complainants, the 
Panel will only assess the WTO consistency of the 2009 measures while taking note that the 2010 
measures do not set a quota for fluorspar.197    
7.166  Before proceeding to consider the complain ants' claims, the Panel will assess whether the 
European Union failed to identify th e measures subject to its claims.  Thereafter, the Panel sets out the 
operation of China's measures as they pertain to  export quotas.  In the event the measures are 
determined to be inconsistent with China's obliga tions, the Panel will consider China's defences as 
applicable to bauxite, coke and silicon carbide. 
1. Whether the European Union properly identified the measures subject to its 
Article XI:1 and Working Party Report claims  on bauxite, fluorspar, silicon carbide and 
zinc  
7.167  In its first written submission, China argues th at the European Union fails to identify the 
Chinese measures at issue in devel oping arguments asserting that export quotas are inconsistent with 
GATT Article XI:1.  It argues that the identifica tion of twenty measures does not suffice to provide 
the necessary "degree of specificity required to enable the Panel to make sufficiently specific 
findings" and make recommendations pursuant to Article 19.1 of the DSU.198 
                                                      
195 The Panel observes, however, that its decision to  assess the complainants' claims here does not 
foreclose the possibility of considering 2010 measures in other contexts. 
196 2010 First Batch Coke Export Quota for FIEs  (Exhibit JE-129). 
197 See section VII.A above. 
198 China's second written submission, para. 27.  WT/DS394/R 
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  7.168  China submits that the European Union solely identifies China's Foreign Trade Law
199 and 
Regulation on Import and Export Administration200, neither of which subjects any of the Raw 
Materials at issue to an export quota.  China observes that the Europ ean Union identifies the 2009 
Export Licensing Catalogue201  in relation to its claim on the allocation  of the export quota applied to 
coke, but not in respect of its Article XI:1 or Working Party Report claims concerning the imposition 
of quotas.  Accordingly, it argues that the European  Union has not established its claims in respect of 
the raw materials at issue , and asks the Panel to reject those claims.202 
7.169  The European Union argues that the challenged measures are "the export quotas on the 
relevant Raw Materials".203  The European Union submits that th e relevant measures are identified in  
paragraphs 197 and 199 of its firs t written submission and that the measures are discussed in the 
footnotes of its first written submission, in particular  footnotes in the Facts section of its first written 
submission, and in the subsections for each raw material subject to an export quota.204  In addition, the 
European Union submits Table 1 in response to  a question from the Panel, which identifies 20 
measures that relate to its quota-related claims.  Through these measures, the European Union submits 
that the Panel can make precise recommendations. 
7.170  The Panel notes that the Facts section of th e European Union's first written submission 
contains references to particular provisi ons of Chinese measures, including China's Foreign Trade 
Law,205 China's Regulation on Import and Export Administration206, Export Quota Administration 
Measures207, Export Quota Bidding Measures208, various Notices on export quotas for coke and zinc, 
and various announcements concer ning quota bidding for bauxite, silic on carbide and fluorspar.  The 
European Union has specified the precise amounts fo r quotas in 2009, whether allocated directly or 
through bidding, for the raw materials at issue.209  The European Union also included the above 
measures in its response to questions from the Panel in the context of the first and second substantive 
meetings.210  
7.171  As discussed in further detail below, the Pane l considers the European Union's identification 
of these provisions sufficient to enable the Panel to make specific findings and recommendations pursuant to Article 19.1 of the DSU. Accordingly,  the Panel will consider the European Union's 
claims below, as well as those of the United States and Mexico. 
                                                      
199 Exhibits CHN-151, JE-72. 
200 Exhibits CHN-152, JE-73. 
201 Exhibits CHN-6, JE-22. 
202 China's first written submission, paras. 346-348. 
203 European Union's comments on China's response to Panel question No. 7 following the first 
substantive meeting, para. 7. 
204 European Union's opening oral statement at the first substantive meeting, paras. 26-28; European 
Union's second written submission, paras. 35-38. 
205 Exhibits CHN-151, JE-72. 
206 Exhibits CHN-152, JE-73. 
207 Exhibits CHN-312, JE-76. 
208 Exhibits CHN-304, JE-77. 
209 European Union's first written submission, paras. 70, 87-88, 105-108, 109-112, and 113-115. 
210 European Union's response to Panel question No. 2 following the first substantive meeting; 
European Union's response to Panel's question No. 2 following the second substantive meeting. WT/DS394/R 
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  2. China's export quota regime 
7.172  China's Foreign Trade Law  confers the authority to restrict or prohibit the exportation of 
goods through export quotas
211 and subjects those goods to an export quota administration.212  China 
may restrict or prohibit exportation in pursuance of certain specific objectives, such as protecting 
human life or health, or forbidding the export of resources that are exhaustible.213 
7.173  Under China's Foreign Trade Law , MOFCOM is responsible for the centralized 
administration of all export quotas for China.214  MOFCOM, in collaboration with Customs, is 
responsible for "formulating, adjusting, and pub lishing" the catalogue listing all goods subject to 
export quotas.215   MOFCOM also determines and announces the total amount of the annual export 
quota for each product covered by the relevant measure by 31 October of the previous year.216   
7.174  Applications to receive an allocation of an export quota must be submitted between 1 and 15 
November.217 China allocates quotas either directly or through a quota bidding system.218  A decision 
on allocation must be issued within 30 days from the date of submission of the application and no 
later than 15 December of the year of application.219  Enterprises that are approved to export under the 
quotas are issued a certificate of quota.  After obtai ning a certificate of quota, the exporter applies for 
the export licence, which must be issued by the re levant authority within three working days of 
receiving the application.220  The exporter then seeks export clearance from Customs by presenting the 
export quota licence to Customs for declaration and examination.221 
7.175  China may also impose administrative or crimin al sanctions for the unlawful exportation of 
goods subject to restriction, or for forging or altering import or export licences, quota certificates, or 
other documents.222  Under China's Regulation on Import and Export Administration223, the holder of 
an export quota may be subject to administrative san ction for failure to return the unused quotas by 31 
October of the year for which th e export quotas have been issued224; or for exporting without 
permission, exceeding the quantitative limitations, or  buying or selling quota certificates or other 
                                                      
211 Foreign Trade Law , Articles 2, 14, 16-17, 19 (Exhibits CHN-151, JE-72); Regulation on Import and 
Export Administration , Article 4 (Exhibits CHN-152, JE-73). 
212 Regulation on Import and Export Administration , Article 36 (Exhibits CHN-152, JE-73); Export 
Quota Administration Measures , Article 1 (Exhibits CHN-312, JE-76). 
213 Foreign Trade Law , Articles 16, and 17 (Exhibits CHN-151, JE-72). 
214 Foreign Trade Law , Article 19 (Exhibits CHN-151, JE-72). 
215 Foreign Trade Law , Article 18 (Exhibits CHN-151, JE-72), Regulation on Import and Export 
Administration , Article 37-39 (Exhibits CHN-152, JE-73). 
216 Regulation on Import and Export Administration , Article 38 (Exhibits CHN-152, JE-73); Export 
Quota Administration Measures , Articles 9-11 (Exhibits CHN-312, JE-76). 
217 Regulation on Import and Export Administration , Article 38 (Exhibits CHN-152 JE-73). 
218 Regulation on Import and Export Administration , Article 39 (Exhibits CHN-152, JE-73). 
219 Regulation on Import and Export Administration , Article 40 (Exhibits CHN-152, JE-73). 
220 Measures for the Administration of License for the Export of Goods , Article 19 (Exhibit CHN-342); 
Working Rules on Issuing Export Licenses , Article 10 (Exhibit CHN-344); Regulations of the People's Republic 
of China on the Administration of the Import and Export of Goods (Exhibit CHN-152); Statement on Relevant 
Matters Regarding the Issuance of Export License , by the Quota and License Administrative Bureau of 
MOFCOM (20 July 2010) (Exhibit CHN-345).   
221 Measures for the Administration of Export Commodities Quotas , Article 25 (Exhibit CHN-312). 
222 Foreign Trade Law , Articles 34, 61, 63, 64 (Exhibit JE-72); Regulation on Import and Export 
Administration , Articles 64, 65 (Exhibit JE-73); Export Quota Measures , Article 26 (Exhibit JE-76). 
223 Exhibits CHN-152, JE-73. 
224 Regulation on Import and Export Administration , Article 42 (Exhibits JE-73, and CHN-152).  WT/DS394/R 
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  documents without approval.
225 Sanctions include revocation of th e business licence for foreign trade 
or reduction in allocation of quotas and possible criminal punishment.226  Quota administering 
authorities that distribute quotas exceeding their authority may also be subject to sanction.227 
7.176  On 10 December 2008, MOFCOM and Customs published the  2009 Export Licensing 
Catalogue228 announcing those goods subject to restriction for 2009.  This 2009 Export Licensing 
Catalogue identifies bauxite, coke, fluorspar, silicon car bide, and zinc among those goods subject to 
restriction.  Export quotas on coke and zinc are to be allocated directly229, while export quotas on 
bauxite, fluorspar, and silicon carbide are to  be allocated through a bidding system.230   
(a) Quotas allocated directly for coke and zinc 
7.177  Under China's Export Quota Administration Measures , MOFCOM determines the total quota 
amount for quotas allocated directly quota based on: (i) the needs of guaranteeing the safety of the 
national economy; (ii) the needs of protecting the limited domestic resources; (iii) development 
planning, objectives and policies of the State on the relevant industries; and (iv) demands on the 
international and domestic markets, and the production and sales status.231 China's Export Quota 
Administration Measures  apply to the direct allocation of zinc , but expressly exclude from its scope of 
application the quota on coke.232  China's Export Quota Administration Measures do not apply to 
foreign-invested enterprises interested in a pplying for an allocation of the zinc quota.233   
7.178  Only enterprises that have the "license or qua lification for import and export management and 
whose economic activities did not violate laws and re gulations in the most recent three years" may 
apply for a quota.234  Enterprises are required to submit their applications for export quotas to 
MOFCOM directly, or to the relevant local authorities, for review.235  MOFCOM then distributes the 
quotas to enterprises directly or distributes quotas to  local administrative authorities, which further 
distribute the quotas to the enterprises.236  In directly allocating quotas, MOFCOM and the local 
administrative authorities are directed to take into  consideration: (i) the export performance of the 
particular good; (ii) the utilization rate of the export quota; (iii) the business management/operation 
capacity of the applicant; and (iv) the "produc tion scale and resources status of the applicant 
enterprise or area" during the previous three years.237 
7.179  The export quotas allocated to enterprises may be adjusted by MOFCOM under the following 
circumstances: (i) major changes in the internationa l market; (ii) major changes in domestic resources; 
                                                      
225 Regulation on Import and Export Administration , Articles 64, 65, 66, 67 and 70 (Exhibit JE-73, 
CHN-152). 
226 Regulation on Import and Export Administration , Articles 64, 65, 66, 67 and 70 (Exhibit JE-73, 
CHN-152). 
227 Export Quota Administration Measures , Article 29 (Exhibit JE-76); Export Quota Bidding 
Measures , Article 36 (Exhibit JE-77); Export Quota Bidding Implementation Rules , Article 32 (Exhibit JE-78). 
228 Exhibits CHN-6, JE-22. 
229  2009 Export Licensing Catalogue , Article I(1) (Exhibits CHN-6, JE-22). 
230  2009 Export Licensing Catalogue , Article I(2) (Exhibits CHN-6, JE-22). 
231 Export Quota Measures , Article 10 (Exhibit CHN-151, JE-76). MOFCOM may also adjust the 
annual quota amount by Septembe r 30 of the preceding year.   
232 Export Quota Administration Measures , Article 4 (Exhibits CHN-312, JE-76). Article 4 indicates 
that the Export Quota Administration Measures  do not apply to the commodities listed in its appendix.  Products 
listed in the appendix include coke. 
233 Export Quota Administration Measures , Article 31 (Exhibits CHN-312, JE-76). 
234 Export Quota Administration Measures , Article 13 (Exhibits CHN-312, JE-76). 
235 Export Quota Administration Measures , Article 14 (Exhibits CHN-312, JE-76). 
236 Export Quota Administration Measures , Article 17 (Exhibits CHN-312, JE-76). 
237 Export Quota Administration Measures , Article 19 (Exhibits CHN-312 JE-76). WT/DS394/R 
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  or (iii) "obvious imbalances in the quot a-use-pace" between enterprises or areas.
238  To that end, the 
Export Quota Administration Measures  direct the local administra tive authorities to inspect the 
utilization rate of export quotas and, where prescrib ed utilization rate requirements are not met, to 
redistribute quota amounts.239 
(i) 2009 zinc export quota allocation 
7.180  Enterprises that have received a zinc quota share must meet a prescribed quota utilization rate 
or return unused annual quotas, which are reallocated the following year.240  MOFCOM and local 
administrative authorities may rea llocate the unused and returned e xport quotas to other enterprises 
within their respective areas.241  If the local administrative authorities fail either to return or use the 
quotas by the end of the year, MOFTEC may deduct a corresponding amount from their quotas for the following year.
242  Successful enterprises that have been awarded a quota certificate must apply to the 
relevant licence-issuing authority and satisfy app licable procedures for inspection and release with 
Customs.243  MOFCOM did not publish a quota amount in relation to zinc in 2009. 
(ii) 2009 coke export quota allocation 
7.181  China requires enterprises to apply in October of the preceding year to receive a coke quota 
allocation.  China requires enterprises to satisfy certain  criteria in order to be eligible to receive an 
allocation under the quota.  MOFCOM has differe nt application processes for Chinese enterprises and 
for foreign-invested enterprises.244 
Application requirements for Chinese and foreign-invested enterprises 
7.182  The 2009 Coke Export Quota Application Procedure245 requires that Chinese production 
enterprises satisfy certain criteria to  be eligible to receive an allo cation under the quota.  An applicant 
must be registered pursuant to national legisl ation on economic, industria l and trade management 
administration, qualify for import and export operations  or proceed with the registration as a foreign 
trade operator, and qualify as an independent legal pe rson.  An applicant must have supplied at least 
250,000 metric tonnes of coke for export in 2008 in accordance with certain relevant standards, or 
have exported an average yearly volume of at l east 200,000 metric tonnes of coke during the period 
2005-07.  In addition, an applicant must comply  with national standards in force and possess ISO 
9000 certification, comply with national and local governments' relevant re gulations including those 
relating to employment and enviro nmental standards, and demonstr ate a record of no legal or 
regulatory infringements.246  In addition to the requirements applicable to Chinese production 
companies, Chinese trading companie s must also demonstrate that they have supplied an average 
volume of at least 400,000 metric tonnes of coke  for export during the period 2005-07.  Trading 
companies are also required to have a registered capital of at least RMB 50 million.247 
                                                      
238 Export Quota Administration Measures , Article 20 (Exhibits CHN-312, JE-76). 
239 Export Quota Administration Measures , Article 21 (Exhibits CHN-312, JE-76). 
240 Export Quota Administration Measures , Article 21 (Exhibits CHN-312, JE-76). 
241 Export Quota Administration Measures , Article 22 (Exhibits CHN-312, JE-76). 
242 Export Quota Administration Measures , Article 23 (Exhibits CHN-312, JE-76,). 
243 Export Quota Administration Measures , Article 25 (Exhibits CHN-312, JE-76). 
244 See opening paragraph of 2009 Coke Export Quota Application Procedure  (Exhibits CHN-308, 
JE-85). 
245 Exhibits CHN-308, JE-85. 
246  2009 Coke Export Quota Application Procedures , Section I(1) (Exhibits CHN-308, JE-85). 
247  2009 Coke Export Quota Application Procedures , Section I(1) (Exhibits CHN-308, JE-85).  WT/DS394/R 
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  7.183  Chinese enterprises applying to export coke under the quota must submit the following 
documents: (i) business licence, registered Foreign Trade Operator Registration Form or the PRC Import and Export Enterprise Qualification Certif icate and the Customs number and Identification 
number; (ii) ISO 9000 quality management system ce rtificate; and (iii) supporting documents issued 
by the labour and social insurance administration c onfirming the enterprise's participation in certain 
social programs.  New Chinese en terprises that apply for a coke export quota are required to submit 
the aforementioned documents covering the previ ous three years, while enterprises that have 
previously been allocated a portion of a coke export quota must submit documents covering only the 
preceding  year.
248   
7.184  Foreign-invested enterprises seeking to expor t coke are required to satisfy the above 
application and eligibility criteria as well as meet additional requirements.249  The 2009 First Batch 
Coke Export Quotas for FIEs , and the 2009 Second Batch Coke Export Quotas for FIEs  state that if 
necessary, the local authorities and MOFCOM shoul d re-examine the "export scale" of foreign-
invested enterprises as set fo rth in their applications.250 The application procedures do not appear to 
have been published for 2009.  However, Chin a has published coke export quota application 
procedures for foreign-invested enterprises in 2010.   The 2010 measures make  reference to China's 
authorities examining the applicants prior exports for foreign-invested enterprises.251  
7.185  Chinese enterprises applying to export coke must submit their applications to MOFCOM and 
the CCCMC, either directly, or through local authorit ies that in turn submit applications to MOFCOM 
and the CCCMC.252  T h e  2009 Coke Export Quota Application Procedures  specifically direct the 
CCCMC to review and evaluate the applications of enterprises seeking to export under the quota.253 
The CCCMC is a membership organization whose me mbers must be legally listed and registered 
entities engaged in the import and export, or other trade-related activities, of metals, minerals, and 
chemicals in China.254  After receiving applications, the CCCMC in conjunction with the China 
Coking Industry Association, formulates and se nds its opinion to MOFCOM regarding whether 
applicant enterprises have satisfied  the requisite eligibility criteria.255  MOFCOM then decides which 
companies are qualified for coke export quotas and publishes the list of all companies.256 
2009 Coke quota amounts 
7.186  MOFCOM did not publish an export quota amount for coke in advance in 2009, but instead 
announced that certain "batches" of the coke e xport quota were allocated throughout the year to 
specific Chinese and foreign-invested enterprises.257  On 26 December 2008, China allocated an initial 
                                                      
248  2009 Coke Export Quota Application Procedures , Article III (Exhibits CHN-308, JE-85). 
249 2009 Coke Export Quota Application Procedures  (Exhibits CHN-308, JE-85). 
250 2009 First Batch Coke Export Quota for FIEs  (Exhibit JE-82); 2009 Second Batch Coke Export 
Quota for FIEs  (Exhibit JE-83). 
251 Allocation of 2010 First Batch Coke Export Quotas for FIEs  (Exhibits CHN-552, JE-128); First 
Batch of 2010 Coke Export Quotas for FIEs  (Exhibit JE-129); Allocation of 2010 First Batch Coke Export 
Quotas for FIEs (Exhibits CHN-552, JE-128). 
252  2009 Coke Export Quota Application Procedure , Article II (Exhibit CHN-308, JE-85). 
253 2009 Coke Export Quota Application Procedure , Article II (Exhibit CHN-308, JE-85). 
254  2001 CCCMC Charter , Article 8 (Exhibits CHN-16, JE-87). For additional details regarding the 
CCCMC, see Section III.G. 
255 2009 Coke Export Quota Application Procedures , Article II (Exhibits CHN-308, JE-85). 
256  2009 Coke Export Quota Application Procedures , Article II (Exhibits CHN-308, JE-85). 
257 2009 First Batch Coke Export Quotas  (Exhibit JE-80); 2009 Second Batch Coke Export Quota  
(Exhibit CHN-338, JE-81); 2009 First Batch Coke Export Quotas for FIEs  (Exhibit JE-82); 2009 Second Batch 
Coke Export Quotas for FIEs  (Exhibit JE-83); 2009 Coke Export Quota Application Procedure  (Exhibits CHN-
308, JE-85). WT/DS394/R 
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  5,780,000 metric tonnes of the coke e xport quota to specific Chinese enterprises
258, and on 29 June 
2009, China allocated an additio nal 6,130,000 metric tonnes.259   On 9 January 2009, China allocated 
an initial 591,000 metric tonnes to  foreign-invested enterprises260, and on 8 September 2009, China 
allocated an additional 591,000 metric tonnes.261  The total amount of coke allocated to Chinese and 
foreign-invested enterprises for export in 2009 was 13,092,000 metric tonnes. 
(b) Bauxite, fluorspar and silicon carbide  quotas allocated through bidding 
7.187  China's Regulation on Import and Export Administration  provides that export "quotas may be 
allocated ... through bidding"262 and that "the administrative departments of export quotas ... shall, on 
the basis of the provisions of the present Regulation,  formulate specific measures of administration to 
lay out clear instructions on the qualifications of the applicants ...".263  The rules and procedures 
governing the quota bidding process are set out in the Export Quota Bidding Measures264, in 
conjunction with the Export Quota Bidding Implementation Rules .265   
7.188  The Export Quota Bidding Measures  define quota bidding as the procedure through which 
"an export enterprise may obtain with certain compensation the quotas", through "voluntary 
bidding."266  The Export Quota Bidding Measures  further provide that goods can be subject to quota 
bidding where: (i) they are "non-renewable, staple -resource-type" goods; (ii) they are "well-positioned 
on the international market and upon the export volume of which the impact of price fluctuation is 
relatively little"; (iii) they are in "oversupply, supplie d in a relatively decentralized way and liable to 
be dumped at low price, thereby giving rise to anti-dumping prosecution in foreign countries"; or (iv) 
they must be the subject of an export quota on the basis of international treaties with other countries 
that "have imposed relevant restrictions."267 
7.189  Article 32 of the Export Quota Bidding Measures provides that after being awarded any 
quota, "an enterprise shall apply to the designated li censing authority for an export licence within the 
quota's validity period."268  The issuance of licen ces is subject to China's 2008 Export License 
Administration Measures .269  
7.190  MOFCOM is responsible for the centralized administration of export quota bidding, for 
determining the types of goods that are subject to  export quota bidding, and for determining the total 
quantity of export quotas to be allocated through bidding.270   
                                                      
258  2009 First Batch Coke Export Quotas  (Exhibit JE-80). 
259  2009 Second Batch Coke Export Quota  (Exhibit CHN-338, JE-81). 
260  2009 First Batch Coke Export Quotas for FIEs  (Exhibit JE-82). 
261  2009 Second Batch Coke Export Quotas for FIEs  (Exhibit JE-83). 
262 Regulation on Import and Export Administration , Article 39 (Exhibit CHN-152, JE-73). 
263 Regulation on Import and Export Administration , Article 44 (Exhibit CHN-152, JE-73). 
264 Export Quota Bidding Measures  (Exhibits CHN-304, JE-77). 
265 Export Quota Bidding Implementation Rules  (Exhibits CHN-305, JE-78). 
266 Export Quota Bidding Measures , Article 2 (Exhibits CHN-304, JE-77). 
267 Export Quota Bidding Measures , Article 6 (Exhibits CHN-304, JE-77). 
268 Export Quota Bidding Measures , Article 32 (Exhibits CHN-304, JE-77); See also Export Quota 
Bidding Implementation Rules , Article 29 (Exhibits CHN-305, JE-78). 
269 Export Quota Bidding Measures, Chapter VII, Article 33 (CHN-304, Exhibit JE-77), 2001  Export 
License Administration Provisions  (Exhibit CHN-359); 2004 Export License Administration Measures  (Exhibit 
CHN-360); See also Export Quota Bidding Implementation Rules , Articles 29-30 (Exhibits CHN-305, JE-78); 
2009 Graded Export Licensing Entities  Catalogue , Articles 1(2), 5)  (Exhibit JE-96). 
270 Export Quota Bidding Measures , Article 3 (Exhibits  CHN-304, JE-77).  WT/DS394/R 
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  7.191  The Export Quota Bidding Measures  provide that MOFCOM is responsible for leading and 
supervising the work of bidding invitati on through the Export Quota Bidding Committee.
271  Under 
the Export Quota Bidding Measures , the Bidding Committee "shall, according to the types of 
commodities subject to bidding, establish the corresponding offices of quota bidding for export 
commodities under the relevant chambers of commerce for import and export," known as Bidding Offices.
272  The Bidding Offices are composed of representatives of the CCCMC, the China 
Association of Enterprises with Foreign Inv estment and the "authority responsible for the 
coordination of the relevant industry."  The head  of the CCCMC also serves as the director of the 
Bidding Offices.273 The Bidding Committee sets a base or minimum bid price and invalidates bid 
prices that are "excessively high and obviously deviate from the law of price".274 The Bidding 
Committee is authorized to set a maximum and minimum quantity that each enterprise may bid.275 
(i) The quota-bidding application process 
7.192  The Bidding Committee handle various responsibilities concerning the application process 
and other bidding-related matters. These include: (i) determining the quantity of the export quotas, the 
bidding mode adopted for each bidding, the number of biddings and the quantity to be distributed under each bidding mode; (ii) determining the plan of quota bidding for each good, take charge of 
opening and evaluating the bids a nd approving the outcome of the bi dding procedure; (iii) publishing 
all necessary notices and announcements; (iv) accep ting the filings submitted by local bidding offices 
on unused quotas that are returned to the Mini stry of Commerce, or quotas that the winning 
companies may assign and transfer to other comp anies; (v) inspecting the collection of security 
deposits and bid-winning prices; and (vi) and determining the qualifica tions that bidders should have, 
verifying the existence of these qualifications and a pproving the list of companies that have the right 
to participate in the bidding procedur e in accordance with these qualifications.
276 
7.193  The relevant regional, municipal, or provi ncial office of MOFCOM is directed to 
preliminarily examine the qualifications of lo cal bidding enterprises and provide the relevant 
materials to the relevant Bidding Office.  The Bi dding Office is then directed to re-examine the 
qualifications of bidding enterprises within the speci fied period and report the outcome of such re-
examination to the Bidding Committe e for examination and approval.277 
7.194  The Export Quota Bidding Measures278, in conjunction with the Export Quota Bidding 
Implementation Rules279, set forth certain general eligibility criteria that bidders must satisfy.  In 
general, in order to participate in the bidding process, both Chinese and foreign-invested enterprises 
                                                      
271 Export Quota Bidding Measures , Article 7 (Exhibits CHN-304, JE-77); Export Quota Bidding 
Implementation Rules , Article 2 (Exhibits CHN-305, JE-78). 
272 Export Quota Bidding Measures , Article 9 (Exhibits CHN-304, JE-77). 
273 Export Quota Bidding Measures , Article 9 (Exhibits CHN-304, JE-77); Export Quota Bidding 
Implementation Rules , Article 4 (Exhibits CHN-305, JE-78). 
274 Export Quota Bidding Measures , Article 16 (Exhibits CHN-304, JE-77); Export Quota Bidding 
Implementation Rules , Article 7 (Exhibits CHN-305, JE-78). 
275 Export Quota Bidding Measures , Article 17 (Exhibits CHN-304, JE-77); Export Quota Bidding 
Implementation Rules  Article 8 (Exhibits CHN-305 JE-78). 
276 Export Quota Bidding Measures , Articles 8 (Exhibits CHN-304, JE-77); Export Quota Bidding 
Implementation Rules , Articles 3 (Exhibits CHN-305, JE-78). 
277 Export Quota Bidding Measures , Article 12 (Exhibits CHN-304, JE-77); See also Export Quota 
Bidding Implementation Rules , Article 15 (Exhibits CHN-305, JE-78); 2009 First Round Export Quota Bidding 
Announcement , Article V(I)1 (Exhibits CHN-309, JE-90); 2009 Second Round Export Quota Bidding 
Announcement , Article IV(2) (Exhibits CHN-310, JE-91). 
278 Exhibits CHN-304, JE-77. 
279 Exhibits CHN-305, JE-78. WT/DS394/R 
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  must be: (i) qualified for engaging in export; (ii) re gistered with the business administration authority; 
(iii) members of the relevant chamber of commerce for import and export (in case of foreign-invested enterprises, members of the China Association of En terprises with Foreign Investment); and (iv) have 
exported or supplied for export volum es of the relevant commodity that "reach[] a certain level."
280  
The Export Quota Bidding Implementation Rules further require that a bidder must "have reached certain levels in terms of registered capital".
281  They also provide that "o ther enterprises that satisfy 
the relevant government requirements and have been approved by MOFCOM may participate in 
public biddings."282  
7.195  MOFCOM sets forth additional criteria that ente rprises were required to satisfy in order to 
qualify to participate in bidding for specific rounds  of bidding for bauxite, fluorspar and silicon 
carbide in 2009.283  Article III(I)i of the 2009 First Round Export Quota Bidding Announcement  
provides that a bidding enterprise must have b een registered with the appropriate government 
department, be qualified for importing and expor ting, and "be an independent legal person".284  Where 
a bidder is a distribution enterprise, the goods procured by it must be supplied by a manufacturing 
enterprise that has satisfied all necessary requirements. Finally, a bidder may not have been involved 
in any violations of "relevan t national laws and regulations" during the preceding three years.285  The 
following additional specific requirements apply: 
(a) In order to participate for the right to export bauxite in 2009, a bidding enterprise 
must: (i) have a registered capital of RMB 5 million; (ii) where the bidder is a trading 
company, have exported an average annual volume of 1,200 metric tonnes in the 
period 2006-2007; and (iii) where the bidder is a manufacturing enterprise, have exported an average annual volume of 500 metric tonnes during the period 2006-07 
or an average annual volume of supply fo r export of 20,000 metric tonnes during 
period 2006-07.  
(b) In order to participate for the right to export fluorspar in 2009, a bidding enterprise 
must: (i) have a registered capital of RM B 5 million; and (ii) have achieved an 
average annual volume of export of 4,000 metric tonnes during the period 2005-07 or have an average annual volume of supply for export of 10,000 metric tonnes during 
the period 2005-07.
286   
(c) In order to participate for the right to export silicon carbide in 2009, a bidding 
enterprise must: (i) have a minimum registered capital of RMB 4 million; (ii) where 
the bidder is a trading company, have achieved an annual average volume of export of 600 metric tonnes during the period 2005-07; (iii) where the bidder is a manufacturing enterprise, have exported an average annual volume of 300 metric 
tonnes during the period 2005-07 or have supplied for export an average annual 
volume of 1,200 metric tonnes during the period 2005-07; and (iv) where the bidder 
is an export enterprise, the average unit e xport price of such commodity must exceed 
$1,300 per metric tonne.
  
                                                      
280 Export Quota Bidding Measures , Article 11, (Exhibits CHN-304, JE-77). 
281 Export Quota Bidding Implementation Rules , Article 6 (I), (Exhib its CHN-305, JE-78). 
282 Export Quota Bidding Implementation Rules , Article 6 (I), (Exhib its CHN-305, JE-78). 
283  2009 First Round Export Quota Bidding Announcement  (Exhibits CHN-309, JE-90); 2009 Second 
Round Export Quota Bidding Announcement  (Exhibits CHN-310, JE-91). 
284  2009 First Round Export Quota Bidding Announcement , Article III(I)(i) (Exhibits CHN-309, 
JE-90). 
285  2009 First Round Export Quota Bidding Announcement , Article III (Exhibits  CHN-309, JE-90). 
286 2009 First Round Bidding Invitation , Article III(II)3 (Exhibits  CHN-309, JE-90).  WT/DS394/R 
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  7.196  The 2009 First Round Export Quota Bidding Announcement
287 also provides a list of 
documents that must be submitted and reviewed by the relevant authority in order to determine 
whether an applicant can participat e in the bidding process.  In particular, applicants must submit a 
Statement of Enterprise Applying for Participation in Bidding, as well as the Statistics of 
Qualifications of Bidding Enterprises.288  Additionally, applicants are required to submit: (i) a balance 
sheet and income statement for the most recently co mpleted financial year, together with an audit 
certificate issued by a certified public accounting firm ; (ii) certificates issued by the competent labour 
and social security departments confirming the ti mely and full payment of all relevant fees and 
premiums to the social security and workers' rights funds; and (iii) for companies producing the raw 
materials, certificates and environmental monitori ng reports confirming their compliance with the 
Chinese environmental and pollution control rules and regulations.289 
7.197  The 2009 Second Round Export Quota Bidding Announcement  states that the eligibility 
criteria for Chinese enterprises can be found in the 2009 First Round Bidding Invitation .290  However, 
the export experience requirements that must be sa tisfied for the second round of bidding are based on 
only one year of exports.291  For bauxite, a bidding enterprise's export volume in 2008 must have 
reached 500 metric tonnes or the volume of supply fo r export in 2008 must have reached 20,000 
metric tonnes.292 For fluorspar, a bidding enterprise's expor t volume in 2008 must have reached 1,000 
metric tonnes or the volume of supply for expor t in 2008 must have reached 10,000 metric tonnes.293  
For silicon carbide, a bidding enterprise's expor t volume in 2008 must have reached 200 metric 
tonnes, or the volume of supply for export  must have reached 1,200 metric tonnes.294   
(ii) Determining the bid-winners for baux ite, fluorspar and silicon carbide 
7.198  In addition to satisfying the eligibility cr iteria set out above and being approved by 
MOFCOM to participate in export quota bidding, an enterprise must also be awarded a portion of the 
export quota as part of the bidding process in order to export.  Any enterprise that wishes to export 
these raw materials must submit a bidding price a nd bidding quantity to China's Bidding Office and 
must apply for an export licence.295  The bidding price represents the amount per metric tonne that a 
bidding enterprise is willing to pay for the right to export.  The bidding quantity is the amount of the relevant material the enterprise seeks to export.  The bidding price and quantity, multiplied together, 
are used to determine the bid-winning price.
296 
7.199  China's Bidding Office then determines based on th e applicable rules the enterprises that will 
receive an allocation (or share) of the export quota based on the submitted bidding price and bidding 
                                                      
287 Exhibits CHN-309, JE-90. 
288 2009 First Round Export Quota Bidding Announcement , Article V(I)3 (Exhibits CHN-309,  JE-90). 
289 2009 First Round Export Quota Bidding Announcement , Article V(I)3 (2) (Exhibits CHN-309, 
JE-90).  See also 2009 Second Round Export Quota Bidding Announcement , Article IV.1(3)(2) (Exhibits 
CHN-310, JE-91). 
290  2009 Second Round Export Quota Bidding Announcement , Article III (Exhibits CHN-310, JE-91). 
291  2009 Second Round Export Quota Bidding Announcement , Article III (Exhibits CHN-310, JE-91). 
292 2009 Second Round Export Quota Bidding Announcement , Article III(6) (Exhibits CHN-310, 
JE-91). 
293 2009 Second Round Export Quota Bidding Announcement , Article III(3) (Exhibits CHN-310, 
JE-91). 
294 2009 Second Round Export Quota Bidding Announcement , Article III(5) (Exhibits CHN-310, 
JE-91). 
295 Export Quota Bidding Measures , Article 14 (Exhibit CHN-304, JE-77); Export Quota Bidding 
Implementation Rules , Articles 20 and 21 (Exhibit CHN-305, JE-78).   
296 Export Quota Bidding Measures , Article 20 (Exhibit CHN-304, JE-77); Export Quota Bidding 
Implementation Rules , Article 14 (Exhibit CHN-305, JE-78). WT/DS394/R 
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  quantity.  China's Bidding Office ranks all bids fro m enterprises in descending order, based on the 
bidding prices that are submitted.
297  The Bidding Office then adds up the bid quantities proposed by 
the bidding enterprises in this descending list until the total quantity bid is equal to the total quantity 
of quota available.   Those enterprises whose bid quantities are included in the total quantity of quota 
available are the winning bidders.298  The winning bidders are thus determined based on the highest 
bid prices.299   
7.200  Enterprises that are awarded a portion of the quota must pay the balance of the bid-winning 
price and a security deposit before applying for an export licence.300  The security deposit may not 
exceed 20% of the total award price.301  An enterprise may pay the fu ll award price where it wishes to 
export the full allocation or a proportionate amount where it wishes to export less than the full 
allocation.  The Bidding Office will refund the corres ponding bid price that has been paid, although it 
will not refund the security deposit.302  An enterprise that is allocated a quota through bidding must 
present a certificate of quota issued by China's Bidding Office when applying for an export licence.303   
Exporting enterprises must present the export licence to China's Customs authorities for declaration 
and examination.304   
(iii) 2009 quota amounts for bauxite, fluorspar and silicon carbide 
7.201  MOFCOM published the 2009 export quota amount s for bauxite as 930,000 metric tonnes, 
fluorspar as 550,000 metric tonnes, and silicon carbide as 216,000 metric tonnes.305  M O F C O M  
determined minimum and maximum bid quantities fo r bauxite, fluorspar and silicon carbide during a 
first round of public bidding for the 2009 export quota, held in December 2008.306  A second 
invitation for public bidding for silicon carbide was held in September 2009.307 
3. Whether export quotas applied to bauxite, co ke, fluorspar, silicon carbide, and zinc are 
inconsistent with Article XI:1 of the GATT 1994 
7.202  The complainants allege that China's export quotas as applied to bauxite, coke, fluorspar, 
silicon carbide, and zinc are incons istent with GATT Article XI:1.  
7.203  China has indicated that its Foreign Trade Law is a "legislative act that delegates (through the 
State Council) to MOFCOM, an executive br anch agency, implementing authority, inter alia  (1) to 
specify the products subject to export quota and ex port licensing requirements, and (2) to adopt 
                                                      
297 Export Quota Bidding Implementation Rules , Article 5 (Exhibit CHN-305, JE-78). 
298 Export Quota Bidding Measures , Article 26 (Exhibits CHN-304, JE-77); Export Quota Bidding 
Implementation Rules , Article 21 (Exhibit CHN-305, JE-78). 2010 First-Batch Export Quota Bidding of 
Bauxite , Article VII (Exhibit CHN-284); Export Quota Bidding Measures  (Exhibit CHN-304, JE-77). 
299 Export Quota Bidding Measures , Article 19 (Exhibits CHN-304, JE-77); Export Quota Bidding 
Implementation Rules , Article 19 (Exhibit CHN-305, JE-78). 
300 Export Quota Bidding Measures , Article 25, 25(2), and 26 (Exhibits CHN-304, JE-77). Export 
Quota Bidding Implementation Rules , Article 20, 20(II), and 21 (Exhibit CHN-305, JE-78). 
301 Export Quota Bidding Implementation Rules , Article 20 (Exhibits CHN-305, JE-78); Export Quota 
Bidding Measures , Article 25 (Exhibit CHN-304, JE-77). 
302 Export Quota Bidding Implementation Rules , Articles 21, and 23 (Exhibit CHN-305, JE-78).   
303 Export Quota Bidding Measures , Articles 32-33 (Exhibits CHN-304, JE-77); Export Quota Bidding 
Implementation Rules  (Exhibit CHN-305, JE-78). 
304 Regulation on Import and Export Administration , Article 41 (Exhibits CHN-153, JE-73). 
305  2009 Export Quota Amounts  (Exhibit JE-79).   
306 2009 First Round Bauxite Bidding Procedures  (Exhibits JE-94); 2009 First Round Fluorspar 
Bidding Procedures  (Exhibit JE-93); 2009 First Round Silicon Carbide Bidding Procedures  (Exhibit JE-95). 
307 2009 Second Round Silicon Carbide Bidding Procedures  (Exhibits JE-131); 2009 Announcement of 
Second Bidding Round for Talc and Silicon Carbide  (Exhibit JE-132).  WT/DS394/R 
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  implementing rules concerning the grant of export licenses".
308  The Appellate Body confirmed that 
"any act or omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings."
309  In light of China's explanati on, and in the absence of any assertion 
that the measures discussed above are not attribut able to China, the Panel will consider these 
measures to be measures of China for purposes of its analysis below. 
7.204  Article XI:1, entitled "General Elimination of Quantitative Restrictions", provides that: 
"No prohibitions or restrictions other than duties, taxes or other charges, whether 
made effective through quotas, import or export licences or other measures, shall be 
instituted or maintained by any contracting party on the importation of any product of 
the territory of any other [Member] or on the exportation or sale for export of any 
product destined for the territory of any other [Member]." 
7.205  In short, Article XI:1 forbids import and export restrictions or prohibitions , including those 
"made effective through ... quotas  ... on the exportation ... of any product."   
7.206  The Appellate Body has not yet been required to  consider the meaning of "restrictions" in 
Article XI:1.  Some panels, however, have done so.  In Colombia – Ports of Entry , after reviewing 
several GATT and WTO cases, the panel concluded th at "restrictions" in the sense contemplated by 
Article XI:1 refers to measures that create uncertain ties and affect investment plans, restrict market 
access for imports, or make importation prohibitively costly.310  The panel in India – Quantitative 
Restrictions  concluded that the scope of the term "restricti on" is "broad" and, in terms of its ordinary 
meaning, is "a limitation on action,  a limiting condition or regulation."311  The panel in India – Autos 
similarly endorsed a broad interpretation of the term "restriction", concluding that Article XI:1 applies 
to conditions that are "limiting" or have  a "limiting effect ... on importation itself".312  Quotas have 
been found to be inconsistent with Article XI:1 on a number of occasions.313  
7.207  The Panel thus understands the obligation imposed  in Article XI:1 is to explicitly forbid 
Members from maintaining a restriction made effective through a prohibition or quota on the 
exportation of any product.  Export quotas are incons istent with Members' obligations by virtue of 
Article XI:1 because they have a restrictive or limiting effect on exportation.    
7.208  It is on this basis that the complainants request  the Panel to conclude that China subjects the 
exportation of bauxite, coke, fluorspar, silicon carbide , and zinc to quotas under the measures at issue 
inconsistently with Article XI:1. 
7.209  China does not contest that any of these pr oducts are subject to quotas under the 2009 
measures.  However, China considers that the comp lainants have failed to establish a violation under 
Article XI:1 of the GATT 1994 because they faile d "to establish China's non-compliance with the 
                                                      
308 China's response to European Union question No. 2, following the first substantive meeting, 
para. 279. 
309 Appellate Body Report, US – Corrosion Resistant Steel  Sunset Reviews , para. 81. 
310 Panel Report, Colombia – Ports of Entry , para. 7.240. 
311 Panel Report, India – Quantitative Restrictions , para. 5.128. 
312 Panel Report, India – Autos , para. 7.270.  Several WTO panels have cited with approval this 
interpretation of the term "restrictions" in Article XI:1:  see Panel Report, Colombia – Ports of Entry , 
paras. 7.233-7.234; Panel Report, Brazil – Retreaded Tyres , para. 7.371; Panel Report, Dominican Republic – 
Import and Sale of Cigarettes , paras. 7.252 and 7.258. 
313 See, e.g., GATT Panel Report, France – Import Restrictions ; GATT Panel Report, Japan – 
Agricultural Products I ; GATT Panel Report US – Sugar ; GATT Panel Report, US – Sugar Waiver . WT/DS394/R 
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  terms of Article XI:2(a) with respect to the export quotas on all of the products at issue."
314  China 
argues that the chapeau to Article XI :2 "links the scope of application of the obligation in Article XI:1 
to the further requirements in Article XI:2(a)-(c)" by  providing that Articles XI:1 shall "not extend to" 
the types of export restriction described in Article XI:2.315  Accordingly, it requests the Panel to reject 
the complainants' claims on the b asis that they failed to demonstrate that the quotas at issue do not 
"fall[] within Articles XI:2(a), (b), or (c)" a nd thereby demonstrate that a violation should apply.316  
China finds support for this in what it asserts wa s the Appellate Body's treatment in similar 
provisions, namely Article 27.2 of the SCM Agreem ent and GATT Articles II:1(a) and II:1(b) of the 
GATT 1994 in India – Additional Import Duties .317 
7.210  The complainants reject this view, arguing that the Appellate Body made clear in US – Wool 
Shirts and Blouses that the provisions under Article XI:2 are "affirmative defences" and that the 
burden is therefore on the respondent – and not the co mplainant – to demonstrate that Article XI:2 is 
somehow applicable.318 China characterizes the Appellate Body 's statement as "obiter" and no longer 
applicable in light of an evolving "taxonomy" adopted by the Appellate Body.319  
7.211  The Panel finds itself at odds with China's view that the Appellate Body statement in US – 
Wools Shirts and Blouses  regarding Article XI:2 is not app licable to the matter at hand.  The 
Appellate Body was clear in its statement on the operation of Article XI:2(c)(i), stating: 
"Articles XX and XI:(2)(c)(i) are limited exceptions from obligations under certain 
other provisions of the GATT 1994, not pos itive rules establishing obligations in 
themselves. They are in the nature of affi rmative defences. It is only reasonable that 
the burden of establishing such a defence should rest on the party asserting it".320 
7.212  The Panel sees no basis to conclude that the logi c applicable to Article XI:2(c)(i) would not 
apply as well to the separate subparagraph, Article  XI:2(a), which falls under the same chapeau 
paragraph.  In addition, as the European Union al so points out, China's interpretation would suggest 
that a complainant might need to demonstrate that other GATT provisions, such as GATT Articles 
XII, XVIII, XX or XXI, are also inapplicable.321 
                                                      
314 China's first written submission, para. 350;  China's second written submission, para. 36. 
315 China's first written submission, para. 353. 
316 China's first written submission, para. 353;  China's second written submission, para. 29. 
317 China's first written submission, paras. 354-357 .  China refers to Article 27.2 of the SCM 
Agreement, which provides that "[t]he prohibition of paragraph 1(a) of Article 3 shall not apply to … other 
developing country Members … subject to compliance with the provisions in paragraph 4".  The Appellate 
Body concluded that the "prohibition of Article 3.1(a)" would only "apply" if the complainant demonstrates 
non-compliance with Article 27.4.  See Appellate Body Report, Brazil - Aircraft , para. 141.  China's first written 
submission, paras. 358-359; referring to Appellate Body Report, India – Additional Import Duties , paras. 153 
and 190.   
318 Complainants' joint opening oral statement at the first substantive meeting, para. 128.  United States' 
second written submission, para. 205; European Union' s second written submission, paras. 42-46; European 
Union's opening oral statement at the second substantive meeting;  Mexico's second written submission, 
para. 210. 
319 China's second written submission, paras. 31-36. 
320 Appellate Body Report, US – Wool Shirts and Blouses , p. 16, DSR 1997:I, 323, at p. 337; see also 
GATT Panel Report, EEC – Dessert Apples , para. 12.3; GATT Panel Report, Canada – Ice Cream and Yoghurt , 
para. 59. 
321 See European Union's second written submission, para. 12. In addition, the Panel considers the 
nature of Article XI:2 is distinct from the positive oblig ations contained in Article 27 of the SCM Agreement, or 
the special relationship that exists between GATT Articles II and III in respect of duties and charges as border 
measures and internal charges.  Like the European Union, the Panel agrees that the particular interpretation of  WT/DS394/R 
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  7.213  Accordingly, the Panel concludes that the burden is on the respondent (China in this case) to 
demonstrate that the conditions of Article XI:2 (a) are met in order to demonstrate that no 
inconsistency arises under Article XI:1.  With this in mind, the Panel will consider below the 
complainants' claims that  China subjects the exportation of ba uxite, coke, fluorspar, silicon carbide 
and zinc to quotas inconsistently w ith its obligations under Article XI:1. 
7.214  As discussed in Section VII.C.2 above, Ch ina maintains measures that when operating 
together give effect to export quotas.  Article 19 of China's Foreign Trade Law , for instance, provides 
that "[China] applies quota and licensing system to the management of goods subject to ... export 
restrictions ...".
322  Article 36 of the Regulation on Import and Export Administration  provides that 
"[g]oods restricted from exportation that are subject to quantitative restrictions by the state are subject to the administration of quotas."
323  The Export Quota  Administration Measures  provide that 
MOFCOM "applies export quota administration with  respect to the commodities restricted from 
export by the State."324  Goods that are subject to restriction pursuant to Article 19 may be subject to 
licensing as "goods restricted from exportation."325  An enterprise must present the quota certificate to 
export licensing authorities to obtain the export licen ce and present such export licence to Customs in 
order to export.326  Administrative and criminal sanctions may be imposed, for instance, for the 
unlawful exportation of goods subject to restricti on without approval, for exceeding quota allocations, 
for failure to return unused quotas, or for bu ying or selling quota certificates without approval.327 
7.215  As discussed in paragraph 7.176 above, Ch ina's MOFCOM in conjunction with Customs 
identifies in a list published annually the goods subject to export quotas.328  China allocates export 
quotas either through direct allocation or a quota bidding system.329  In 2009, MOFCOM and Customs 
published the 2009 Export Licensing Catalogue330, which identifies coke and zinc as products subject 
to export quotas that are allocated directly, and identifies bauxite, fluorspar and silicon carbide as 
products subject to export quotas that are allocated through bidding.331 China's Export Quota 
Administration Measures332 direct MOFCOM to allocate quotas for zinc based on prior export 
performance, quota utilization rate, operation/busine ss management capacity, and the production of 
applicants over prior years, or based on other market factors.333  China's MOFCOM allocates coke 
                                                                                                                                                                     
Article was influenced in India – Additional Import Duties  by the "strong link" between Article II:2(a) and 
Article III:2.  A challenge under Article III:2 should not be allowed to avoid the burden to show that the 
conditions of that provision are met by instead presenting its claim under Article  II:1(b), and then requiring the 
respondent to prove that the charge is actually consistent  with Article III:2 (and ther efore with the exception in 
Article II:2(a)) (See Eur opean Union's second written submission, para. 19).   
322 Export Quota Administration Measures (Exhibits CHN-312, JE-76). 
323 Regulation on Import and Export Administration  (Exhibits CHN-152, JE-73). 
324 Export Quota Administration Measures (Exhibits CHN-312, JE-76). 
325 2008 Export Licence Ad ministration Measures , Article 2 (Exhibits CHN-342, JE-74). 
326 Regulation on Import and Export Administration , Articles 41, 43 (Exhibits CHN-152, JE-73); 
Export Quota Administration Measures , Article 25 (Exhibits CHN-312, JE-76). 
327 Foreign Trade Law , Articles 61, 63 (Exhibits CHN-151, JE-72). 
328 Foreign Trade Law , Article 18 (Exhibits CHN-151, JE-72); Regulations on Import and Export 
Administration , Article 35, 38, 40, 42, 64, 65, 66, 67, 70 (Exhibits CHN-152, JE-73); Export Quota 
Administration Measures , Article 7 (Exhibits CHN-312, JE-76). 
329 Regulation on Import and Export Administration , Article 39 (Exhibits CHN-152, JE-73). 
330 Exhibits CHN-6, JE-22. 
331 2009 Export Licensing Catalogue  (Exhibits CHN-6, JE-22); Regulation on Import and Export 
Administration , Article 35-36 (Exhibits CHN-152, JE-73); Ex port Quota Administration Measures (Exhibits 
CHN-312, JE-76). 
332 Exhibits CHN-312, JE-76. 
333 Export Quota Administration Measures , Articles 9, 11, 14, 17, 18, 19, 20, 21, 22, 23, 25, 26 
(Exhibits CHN-312, JE-76). WT/DS394/R 
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  quotas in batches during the course of the year.
334  Enterprises must comply with the 2009 Coke 
Export Application Procedures  in order to be considered for an allocation.335 China's MOFCOM 
administers the allocation of quotas on bauxite, fluorspar and silicon carbide through a bidding 
system.336 
7.216  In October 2008, MOFCOM published the total 2009 export quota amounts for bauxite, 
fluorspar, and silicon carbide.337  As discussed in paragraph 7.201 above, China imposed an export 
quota of 930,000 tonnes on bauxite, an export quota of  550,000 metric tonnes on fluorspar, and an 
export quota of 216,000 tonnes on silicon carbide.  China did not publish an amount for coke in 
October 2008.  As discussed in paragraph 7.18 6, China published various announcements in 2009 
indicating that the export quota on coke would be distributed to specific enterprises.338 In total, China 
allocated 13,092,000 metric tonnes of c oke pursuant to these announcements. 
7.217  Finally, as discussed in paragraph 7.180 ab ove, China did not publish any quota for the 
exportation of zinc in 2009, nor did it publish in advance procedures for enterprises to apply to be 
allocated a portion of any zinc quota.  Nor were there announcements listing enterprises that had been 
allocated any quantity of zinc for export pursuant to  an export quota.  The complainants submit that 
this failure to publish amounts to an  effective prohibition on exportation.339  China explained that 
when MOFCOM does not "make effect ive" an export quota on zinc, then no zinc can be exported for 
that year.340  In addition, China acknowledged that MOFCOM did not authorize any quota for zinc in 
2010.  China does not assert any defence in connec tion with this failure to set the quota amount.  
Because China did not set a zinc quota for 2009, the Pa nel concludes that China maintained a ban, or 
zero quota, on the exportation of zinc in 2009. 
7.218  The Panel therefore concludes that China, th rough the following series of measures, when 
operating in concert, establishes export quotas on ba uxite, coke, fluorspar, silicon carbide and zinc 
that results in a restriction or prohibition on th e exportation of these produc ts.  The Panel considers 
that findings on the measures acting in concert  including measures imposing an export licensing 
framework and quota administration measures, such as those relating to the operation of the quota 
                                                      
334 2009 First Batch Coke Export Quotas  (Exhibit JE-80); 2009 Second Batch Coke Export Quota  
(Exhibit CHN-338, JE-81); 2009 First Batch Coke Export Quotas for FIEs  (Exhibit JE-82); 2009 Second Batch 
Coke Export Quotas for FIEs   (Exhibit JE-83); 2009 Coke Export Quota Application Procedure  (Exhibits CHN-
308, JE-85). 
335 2009 Coke Export Quota Application Procedure , Sections I and II (Exhibits CHN-308, JE-85); see 
also 2010 First Batch Coke Export Quota for FIEs  (Exhibit JE-129). 
336 Export Quota Bidding Measures , Article 3, 8, 9, 10, 12, 14, 16, 19, 20, 25, 26 (Exhibits CHN-304, 
JE-77); Regulation on Import and Export Administration , Articles 39, 41 44 (Exhibit CHN-152, JE-73); Export 
Quota Bidding Implementation Rules , Article 2, 3, 4, 5, 6, 20, 21, 23 (Exhibits CHN-305, JE-78); 2009 First 
Round Export Quota Bidding Announcement  (Exhibits CHN-309, JE-90); 2009 Second Round Export Quota 
Bidding Announcement  (Exhibits CHN-310, JE-91); 2009 First Round Export Quota Bidding Announcement  
(Exhibit CHN-309, JE-90); 2009 Second Round Export Quota Bidding Announcement   (Exhibits CHN-310, 
JE-91). 
337 2009 Export Quota Amounts  (Exhibit JE-79); Regulation on Import and Export Administration , 
Article 38 (Exhibit CHN-152, JE-73); Export Quota Administration Measures , Articles 9-11 (Exhibits CHN-
312, JE-76). 
338 2009 First Batch Coke Export Quotas  (Exhibit JE-80); 2009 Second Batch Coke Export Quota  
(Exhibits CHN-338, JE-81); 2009 First Batch Coke Export Quotas for FIEs  (Exhibit JE-82); 2009 Second Batch 
Coke Export Quotas for FIEs (Exhibit JE-83). 
339 United States' first written submission, para. 249; European Union's first written submission, 
para. 206; Mexico's first written submission, para. 252. 
340 China's first written submission, paras. 559, 740; China's response to question No. 8 from the 
European Union following the first substantive meeting para. 37.  WT/DS394/R 
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  bidding process  are necessary so that annually renewed measures do not evade WTO dispute 
settlement review merely through their expiration during the Panel proceedings. 
(a) Export quotas on bauxite, including "refractory clay" (HS No. 2508.3000) and "aluminium 
ores and concentrates" (HS No. 2606.0000) 
7.219  China imposed an export quota to these fo rms of bauxite in 2009, pursuant to: Foreign Trade 
Law
341,  Articles 2, 14-19, 34, 61 63, 64; Regulation on Import and Export Administration342, Articles 
4, 35-44, 64, 66; 67 and 70;  Export Quota Bidding Measures  343, Articles 3, 8, 9, 10, 11, 13, 14, 16;  
2008 Export Licence Administration Measures344, Article 25; 2009 Graded Export Licensing Entities  
Catalogue345, Articles 1(2), 5, Attachment; 2008 Export Licensing Working Rules  346; Export Quota 
Bidding Implementation Rules  347, Articles 2-6; 2009 Export Quota Amounts348; 2009 Announcement  
of Second Bidding Round for Talc and Silicon Carbide349; 2009 Export Licensing Catalogue350; 2009 
First Round Export Quota Bidding Announcement351; 2009 Second Round Export Quota Bidding 
Announcement352; and 2009 First Round Bauxite Bidding Procedures .353 
(b) Export quotas on fluorspar, including "met-spar" (HS 2529.2100), and "acid-spar" 
(HS 2529.2200) 
7.220  China imposed an export quota to these forms of fluorspar in 2009 pursuant to: Foreign Trade 
Law354,  Articles 2, 14-19, 34, 61 63, 64; Regulation on Import and Export Administration  355, Articles 
4, 35-44, 64, 66; 67 and 70;  Export Quota Bidding Measures  356, Articles 3, 8, 9, 10, 11, 13, 14, 16;  
2008 Export Licence Administration Measures357, Article 25; 2009 Graded Export Licensing Entities 
Catalogue358, Articles 1(2), 5, Attachment;  2008 Export Licensing Working Rules359; Export Quota 
Bidding Implementation Rules360, Articles 2-6; 2009 Export Quota Amounts361; 2009 Announcement 
of Second Bidding Round for Talc and Silicon Carbide362; 2009 Export Licensing Catalogue363; 2009 
First Round Export Quota Bidding Announcement364; 2009 Second Round Export Quota Bidding 
                                                      
341 Foreign Trade Law  (Exhibits CHN-151, JE-72). 
342 Regulation on Import and Export Administration  (Exhibits CHN-152, JE-73). 
343 Export Quota Bidding Measures  (Exhibits CHN-304, JE-77). 
344 2008 Export Licence Ad ministration Measures  (Exhibits CHN-342, JE-74). 
345 2009 Graded Export Licensing Entities  Catalogue  (Exhibit JE-96). 
346 2008 Export Licensing Working Rules  (Exhibits CHN-344, JE-97). 
347 Export Quota Bidding Implementation Rules  (Exhibits CHN-305, JE-78). 
348 2009 Export Quota Amounts  (Exhibit JE-79). 
349 2009 Announcement of Second Bidding Round for Talc and Silicon Carbide  (Exhibit JE-132). 
350 2009 Export Licensing Catalogue  (Exhibits CHN-6, JE-22). 
351 2009 First Round Export Quota Bidding Announcement  (Exhibits CHN-309, JE-90). 
352 2009 Second Round Export Quota Bidding Announcement  (Exhibits CHN-310, JE-91). 
353 2009 First Round Bauxite Bidding Procedures  (Exhibit JE-94). 
354 Foreign Trade Law  (Exhibits CHN-151, JE-72). 
355 Regulation on Import and Export Administration  (Exhibits CHN-152, JE-73). 
356 Export Quota Bidding Measures  (Exhibits CHN-304, JE-77). 
357 2008 Export Licence Ad ministration Measures  (Exhibits CHN-342, JE-74). 
358 2009 Graded Export Licensing Entities  Catalogue  (Exhibit JE-96). 
359 2008 Export Licensing Working Rules  (Exhibits CHN-344, JE-97). 
360 Export Quota Bidding Implementation Rules  (Exhibits CHN-305, JE-78). 
361 2009 Export Quota Amounts  (Exhibit JE-79). 
362 2009 Announcement of Second Bidding Round for Talc and Silicon Carbide  (Exhibit JE-132). 
363 2009 Export Licensing Catalogue  (Exhibits CHN-6, JE-22). 
364 2009 First Round Export Quota Bidding Announcement  (Exhibits CHN-309, JE-90). WT/DS394/R 
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  Announcement
365; and 2009 First Round Fluorspar Bidding Procedures .366  The Panel notes that in 
2010 China no longer had in place an export quota for fluorspar. 
(c) Export quotas on silicon carbide, including silicon carbide and crude silicon carbide 
7.221  China imposed an export quota to these forms of silicon carbide in 2009, pursuant to:  
Foreign Trade Law367, Articles 2, 14-19, 34, 61 63, 64; Regulation on Import and Export 
Administration  368, Articles 4, 35-44, 64, 66; 67 and 70;  Export Quota Bidding Measures369, Articles 
3, 8, 9, 10, 11, 13, 14, 16;  2008 Export Licence Administration Measures370, Article 25; 2009 Graded 
Export Licensing Entities  Catalogue371, Articles 1(2), 5, Attachment; 2008 Export Licensing Working 
Rules372; Export Quota Bidding Implementation Rules373, Articles 2-6; 2009 Export Quota Amounts374; 
2009 Export Licensing  Catalogue375; 2009 First Round Export Quota Bidding Announcement376; 2009 
Second Round Export Quota Bidding Announcement377; 2009 Second Round Silicon Carbide Bidding 
Procedures378; 2009 First Round Silicon Carbide Bidding Procedures379; and 2009 Announcement of 
Second Bidding Round for Talc and Silicon Carbide .380 
(d) Export quotas on coke (HS 2704.0010)  
7.222  China imposed an export quota to coke in 2009, pursuant to:  Foreign Trade Law381, Articles: 
2, 14-19, 34, 61 63, 64; Regulation on Import and Export Administration  382, Articles 4, 35-44, 64, 66; 
67 and 70; 2008 Export Licence Administration Measures383, Article 25; 2009 Graded Export 
Licensing Entities  Catalogue384, Articles 1(2), Attachment; 2008 Export Licensing Working Rules385; 
2009 Export Licensing Catalogue386; 2009 First Batch Coke Export Quotas387; 2009 Second Batch 
Coke Export Quota388; 2009 First Batch Coke Export Quotas for FIEs389; 2009 Second Batch Coke 
Export Quotas for FIEs390; and 2009 Coke Export Quota Application Procedure .391 
                                                      
365 2009 Second Round Export Quota Bidding Announcement  (Exhibits CHN-310, JE-91). 
366 2009 First Round Fluorspar Bidding Procedures  (Exhibit JE-93). 
367 Foreign Trade Law  (Exhibits CHN-151, JE-72). 
368 Regulation on Import and Export Administration  (Exhibits CHN-152, JE-73). 
369 Export Quota Bidding Measures  (Exhibits CHN-304, JE-77). 
370 2008 Export Licence Admini stration Measures Exhibit  (Exhibit CHN-342, JE-74). 
371 2009 Graded Export Licensing Entities  Catalogue  (Exhibit JE-96). 
372 2008 Export Licensing Working Rules  (Exhibits CHN-344, JE-97). 
373 Export Quota Bidding Implementation Rules  (Exhibits  CHN-305, JE-78). 
374 2009 Export Quota Amounts  (Exhibit JE-79). 
375 2009 Export Licensing Catalogue  (Exhibits CHN-6, JE-22). 
376 2009 First Round Export Quota Bidding Announcement  (Exhibits CHN-309, JE-90). 
377 2009 Second Round Export Quota Bidding Announcement  (Exhibits CHN-310, JE-91). 
378 2009 Second Round Silicon Carbide Bidding Procedures  (Exhibit JE-131). 
379 2009 First Round Silicon Carbide Bidding Procedures  (Exhibit JE-95). 
380 2009 Announcement of Second Bidding Round for Talc and Silicon Carbide  (Exhibit JE-132). 
381 Foreign Trade Law  (Exhibit CHN-151, JE-72). 
382 Regulation on Import and Export Administration  (Exhibits CHN-152, JE-73). 
383 2008 Export Licence Ad ministration Measures  (Exhibits CHN-342, JE-74). 
384 2009 Graded Export Licensing Entities Catalogue  (Exhibit JE-96). 
385 2008 Export Licensing Working Rules  (Exhibits CHN-344, JE-97). 
386 2009 Export Licensing Catalogue  (Exhibit CHN-6, JE-22). 
387 2009 First Batch Coke Export Quotas  (Exhibit JE-80). 
388 2009 Second Batch Coke Export Quota  (Exhibit CHN-338, JE-81). 
389 2009 First Batch Coke Export Quotas for FIEs  (Exhibit JE-82). 
390 2009 Second Batch Coke Export Quotas for FIEs  (Exhibit JE-83). 
391 2009 Coke Export Quota Application Procedure  (Exhibits CHN-308, JE-85).  WT/DS394/R 
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  (e) Export quotas on zinc, including "zinc ores and concentrates excluding gray feed grade zinc 
oxide" (HS 2608.0000 ex) and  "gray feed grade zinc oxide" (HS 2608.0000 ex)   
7.223  China imposed an export prohibition to th ese forms of zinc in 2009, pursuant to: Foreign 
Trade Law
392,  Articles 2, 14-19, 34, 61 63, 64; Regulation on Import and Export Administration393, 
Articles 4, 35-44, 64, 66; 67 and 70; 2008 Export Licence Administration Measures394, Article 25; 
2009 Graded Export Licensing Entities Catalogue395, Articles 1(2), Attachment; 2008 Export 
Licensing Working Rules396; Export Quota Administration Measures397, Articles 4, 9, 11, 17-23, 25, 
26, 31; and 2009 Export Licensing Catalogue .398 
4. Summary 
7.224  For each of these products (bauxite, coke, fluorspar, silicon carbide and zinc399), the series of 
measures operating in concert has resulted in the imposition of a restriction or prohibition on their 
exportation that are  inconsistent with China's obligations un der Article XI:1 of the GATT 1994.  This 
is not to say that individually each of those measur es is WTO-inconsistent; rather, when they operate 
collectively to result in WTO-inconsistent quotas that is not otherwise justified, it is then that they 
become prima facie  WTO-inconsistent.  The Panel recalls its view that findings on the measures 
acting in concert is necessary so that annua lly renewed measures do not evade WTO dispute 
settlement review merely through their expiration during the Panel proceedings. 
7.225  The Panel will consider below whether the export quota applied to refractory-grade bauxite is 
justified within the meaning of Article XI:2(a).  In the alternative, the Panel will consider whether 
China's export quota applied to refractory-grade bauxite  is justified pursuant to Article XX(g) of the 
GATT 1994.  Finally, the Panel will consider wh ether export quotas applie d to coke and silicon 
carbide are justified pursuant to Article XX(b) of the GATT 1994. 
D. CHINA 'S DEFENCES TO THE APPLICAT ION OF EXPORT RESTRICTIONS  
7.226  The Panel has concluded above that, on 21 D ecember 2009, China maintained export duties 
on certain forms of bauxite, coke, fluorspar , magnesium, manganese, silicon metal and zinc400 that are 
inconsistent with Paragraph 11.3  of China's Accession Protocol.401  The Panel also concluded, that on 
21 December 2009 China maintained certain e xport quotas or a prohibition on bauxite, coke, 
fluorspar, silicon carbide and zinc402 that are inconsistent with Article XI:1 of the GATT 1994.403   
                                                      
392 Foreign Trade Law  (Exhibits CHN-151, JE-72). 
393 Regulation on Import and Export Administration  (Exhibits CHN-152, JE-73). 
394 2008 Export Licence Ad ministration Measures  (Exhibits CHN-342, JE-74). 
395 2009 Graded Export Licensing Entities Catalogue  (Exhibit JE-96). 
396 2008 Export Licensing Working Rules  (Exhibits CHN-344, JE-97). 
397 Export Quota Administration Measures  (Exhibits  CHN-312, JE-76). 
398 2009 Export Licensing Catalogue  (Exhibits  CHN-6, JE-22). 
399 The specific forms of the raw materials subject to  complainants' claims are identified in Exhibit 
JE-6 and in paragraph 2.2of the Descriptive Part of these Reports. 
400 The specific forms of the raw materials subject to the complainants' claims are identified in Exhibit 
JE-5 and para. 2.2 of the Descriptive Part to these Reports. 
401 See para. 7.105 above. 
402 The specific forms of the raw materials subject to  complainants' claims are identified in Exhibit 
JE-6 and in para. 2.2 of the Descriptive Part of these Reports. 
403 See para. 7.224 above. WT/DS394/R 
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  7.227  China seeks to justify the application of export duties to particular forms of coke, magnesium, 
manganese (excluding manganese ores and concentrates), and zinc
404 under Article XX(b), and the 
application of export duties to the particular form s of fluorspar pursuant to Article XX(g).  China 
seeks to justify the application of export quotas on refractory-grade bauxite405 under Article XI:2(a) of 
the GATT 1994, or in the alternative, under Artic le XX(g); and its export quotas on coke and silicon 
carbide under Article XX(b).  China does not seek  to justify export duties imposed on bauxite, 
manganese ores and concentrates, or silicon metal, nor  does it seek to justify export quotas applied to 
fluorspar or zinc. 
7.228  China reiterates its position that the Pane l should not consider any 2009 measures406, 
including those imposing export duties and export quotas in 2009.407  China stated its defences 
concern 2010 measures only.408  The Panel decided409 that it will only make findings on China's 2009 
measures and not on any of China's 2010 measures.  Since the 2010 measures for which China offers defences are similar to its 2009 measures, in the inter est of a prompt resolution of disputes, the Panel 
considers it appropriate to examine China's defen ces in the context of its assessment of China's 2009 
measures.
410  In doing so, the Panel recognises China's argument that it terminated its quota on 
fluorspar in 2010, and only seeks to justify the app lication of export duties on fluorspar in 2010.  The 
Panel will examine China's defence under Article XX(g) in respect of the application of export duties 
applied to fluorspar in 2009 only. 
7.229  The Panel has reached the conclusion, in paragraph 7.158, that China cannot invoke 
Article XX of the GATT 1994 to justify export duties  inconsistent with its Accession Protocol.  
However, the complainants have submitted exte nsive argumentation and evidence suggesting that, 
even assuming arguendo  that Article XX were available, China has not demonstrated that its export 
duties can be justified pursuant to Article XX(b) or  (g) of the GATT 1994.  Therefore, in their oral 
and written submissions, all parties have extensively debated the in terpretation and application of 
Articles XX(b) and (g) with respect to th e above-mentioned WTO- inconsistent export duties.    
7.230  The Panel recalls that it determined that it is useful to pursue an arguendo  analysis in order 
not to undermine the parties' right to prompt settleme nt of the dispute. Hence, the Panel will analyse 
and determine, arguendo , whether Article XX(b) could justif y China's WTO-inconsistent export 
duties on various forms of coke, magnesium, manga nese, and zinc; and whether GATT Article XX(g) 
could justify China's WTO-inconsiste nt export duties on fluorspar.   
                                                      
404 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-5 and para. 2.2 of  the Descriptive Part to these Reports. 
405 See Section VII.D. 
406 See China's first written submission, para. 49-5 1, 56, 62, 64 and 67; China's second written 
submission, Section II entitiled "The Panel should rule on the 2010 Measures To resolve the Disputes, and 
Should not Rule on the 2009 Measures"; and para. 12 "In sum, the prompt and positive resolution of this disute 
call the Panel to address the 2010 m easures and not the 209 measures." 
407 See for instance in China's first written submission,  para. 70 "China's submission addresses the new 
[2010] measures, and not the expired [2009] measures".  See China's response to Panel question No.2 following 
the second substantive meeting, para. 9. ("For this reason, China makes arguments and defences regarding the 
2010 export duties and export quotas"). 
408 China's response to Panel question No.2 followi ng the second substantiv e meeting: See China's 
response to Panel question No.2 following the second substantive meeting, para. 9 ("For this reason, China 
makes arguments and defences regarding the 2010 export duties and export quotas"). 
409 See para. 7.33 above. 
410 As noted, China offers no defence to the applica tion of a quota on fluorspar in 2009.  Accordingly, 
the Panel will not consider China's defence in respect of this quota, but only duties applied in 2009.  WT/DS394/R 
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  7.231  The Panel has also decided to follow China's approach in defending collectively its export 
duties and export quotas in the context of its Article XX defence.  In this cont ext, China submits that 
an export duty and an export quota are "functionally equivalent measures" that "have similar effect on 
the volume of export and, hence, inte rnational and domestic supply (...).  Thus, the restrictive effect of 
an export duty may be equal to that  of an export quota, and vice-versa".
411     
7.232  With respect to the order of the Panel's anal ysis, the Panel will follow China's approach in 
making its defence, grouping some arguments under Ar ticle XX(g) and others under Article XX(b).   
7.233  In its first written submission, China de fends its export duties on fluorspar under 
Article XX(g) separately from its defence to its  export quota on refractory-grade bauxite under 
Article XX(g). In its second written submission, Chin a defends its export restrictions on fluorspar 
(duties) and refractory-grade bauxite (quota) under Article XX(g) together.  The Panel will therefore 
address China's defence under Article XX(g) in combin ation, as China did in its second submission.  
The Panel recalls that it will only analyse China's defence to its WTO-inconsistent export duties on 
fluorspar on an arguendo basis. 
7.234  When making its Article XX(b) defence in its second submission, China addresses, first, its 
export restrictions (both in the form of duties and quotas) on what China labels certain "energy-
intensive, highly polluting, resource-based products " ("EPR products").  These include export duties 
on coke, manganese metal, magnesium metals and its export quotas on coke and silicon carbide. 
Second, China addresses its export restrictions in th e form of export duties on scrap forms of zinc, 
manganese and magnesium which it calls the "non-fe rrous metal scrap products" (hereafter called 
"scrap products"). The Panel will consider China's defences under GATT Article XX(b) in that same 
order, recalling that it will analyse China's defenc e to its WTO-inconsistent export duties on EPRs and 
on scrap products on an arguendo basis.  
7.235  In sum, the Panel's order of analysis will be  as follows: the Panel will begin with China's 
Article XI:2(a) defence concerning refractory-grade bauxite, and then turn to  China's invocation of 
Article XX(g) to justify its export quota on refractor y-grade bauxite and its export duties on fluorspar. 
Finally, the Panel will consider China's invocati ons of Article XX(b), first with respect to EPR 
products, and secondly, with respect to scrap products.  
7.236  Finally, China argues that all of its export rest rictions also satisfy the requirements of the 
"chapeau" of Article XX. The Panel will only c onsider China's invocation of the chapeau of 
Article XX, to the extent that the application of an export restriction is justified pursuant to the 
relevant subparagraph of Article  XX, whether (b) or (g).   
7.237  The Panel's understanding of China's measur es of 2009 for which it invokes its defences 
pursuant to Articles XI:2(a), XX(b) and (g) of the GATT 1994 are represented in the chart below. 
                                                      
411 China's response to Panel question No. 19 following the second substantive meeting.  
  WT/DS394/R 
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Raw Material Relevant 
Chin. HS 
Number Relevant 
Chin. 
Comm. 
Code Product Name Short Form Export Duties Export Quotas 
Bauxite 2508.3000 2508300000 "Refractory clay" 
No defence For refractory-grade 
bauxite/high alumina clay: 
Articles XI:2(a)and XX(g). For 
other categories: No defence 
 2606.0000 2606000000 "Aluminium ores and concentrates" No defence 
 2602.4000  "Aluminium ash and residues" No export quota claim 
Coke 2704.0010 2704001000 "Coke" Article XX (b) Article XX (b) 
Fluorspar 2529.2100 2529210000 "Met-spar" Article XX (g) No defence 
 2529.2200 2529220000 "Acid-spar" Article XX (g) No defence 
Magnesium 8104.1100  "Magnesium metal" Article XX (b) 
No export quota claim  8104.1900  "Unwrought magnesium" Article XX (b) 
 8104.2000  "Magnesium waste and scrap" Article XX (b) 
Manganese 2602.0000  "Manganese ores and concentrates" No defence 
No export quota claim  8111.0010 8111001010 "Unwrought manganese waste and scrap" Article XX (b) 
  8111001090 Unwrought manganese; powder Article XX (b) 
Silicon 
Carbide  2849200000 "Silicon carbide" No export duty 
claim Article XX (b) 
  3824909910 "Crude Silicon Carbide" Article XX (b) 
Silicon Metal 2804.6900  "Silicon Metal" No defence 
No export quota claim Yellow 
Phosphorous 2804.7010  "Yellow phosphorous" China claims that 
since July 2009 is 
WTO-consistent 
Zinc 2608.0000 ex 2608000090 "Zinc ores and concentrates excluding gray feed 
grade zinc oxide" 
No export duty 
claim No defence 
 2608.0000 ex 2608000001 "Gray feed grade zinc oxide" No defence 
 7901.1110 7901111000 "Unwrought ≥ 99.995 zinc" 
No export quota claim  7901.1190 7901119000 "Unwrought 99.99 but < zinc content ≤ 99.9995% 
zinc" 
 7901.1200 7901120000 "Unwrought < 99.99% zinc" 
 7901.2000 7901200000 Unwrought zinc alloys 
 7902.0000  "Zinc waste and scrap" Article XX (b) 
 2620.1100  "Hard zinc spelter" Article XX (b) 
 2620.1900  "Other zinc ash and residues" Article XX (b) 
  WT/DS394/R 
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  1. Whether the export quota applied to refract ory-grade bauxite is justified pursuant to 
Article XI:2(a) of the GATT 1994 
7.238  The Panel recalls its conclusion above that China's export quotas of 930,000 metric tonnes 
applied to bauxite in 2009, is in consistent with GATT Article XI:1. 
7.239  China argues that, if the Panel were to conclude  that the complainants have stated a prima 
facie claim under Article XI:1 with respect to the export quota on bauxite, the application of an export 
quota to a subset of bauxite products subject to the export quota is justified because the quota is 
"temporarily applied to prevent or relieve critical shortages of ... other products essential to" China, in 
accordance with Article XI:2(a) of the GATT 1994.
412  The subset of bauxite products subject to 
export quota for which China asserts a defence under Article XI:2(a) of the GATT 1994 is referred to 
by China as "refractory bauxite" or "refractory grad e bauxite" and referred to by the complainants as 
"high alumina clay."  The Panel uses these terms interchangeably to indicate the same subset of 
bauxite classifiable under Customs Commodity Code 2508.3000.00 that is used to produce 
refractories. 
7.240  Article XI:2(a) states: "The provisions of para graph 1 of this Article shall not extend to  ... 
[e]xport prohibitions or restrictions temporarily a pplied to prevent or relieve critical shortages of 
foodstuffs or other products essential to the expor ting contracting party".  Article XI:2(a) of the 
GATT 1994 has not been interpreted previously  by a WTO panel or the Appellate Body. 
7.241  China argues that its export quota is justified because the supply of refractory-grade bauxite 
is, or has the potential to be, restricted by virtue of strong foreign demand, physical exhaustibility, 
and/or domestic regulatory limits on access.   
7.242  China submits that the complainants themselves have recognized that refractory-grade bauxite 
is "essential", "necessary" and "critical" to their economies.413  In addition, China argues that the 
complainants have themselves applied prohibitions and restrictions on products that they deem 
essential for downstream domestic industries, in some cases for periods exceeding 30 - 40 years.414  
7.243  The complainants argue that China has failed to provide a correct or "narrow"415 interpretation 
of the meaning of Article XI:2 and, therefore, it has failed to demonstrate that its export quota on 
refractory grade bauxite is justified pursuant to Artic le XI:2(a).  The complainants argue that China's 
quota is not temporarily applied, that refractory-grad e bauxite is not a product that is essential to 
China, and that the quota is not applied to prevent or relieve a critical shortage of refractory-grade 
bauxite.416  In addition, the complainants argue that exam ples of restrictions or prohibitions applied by 
other WTO Members should not form part of the Panel's analysis.417 
                                                      
412 China's first written submission, para. 342. 
413 See, e.g., China's first written submission, paras. 361-363. 
414 China's first written submission, para. 368.  In par ticular, China refers to "a 43-year-old restriction 
and prohibition on the export of unprocessed timber harv ested from U.S. Federal lands", and the European 
Union's "37-year prohibition and restriction on the expor t of various types of ferrous and non-ferrous metal 
waste and scrap" (China's first written submission, para s. 405-406).  China argues that these examples of 
application of prohibitions or restrictions for lengthy periods of time represent "views concerning the proper 
interpretation of Articles XI:1 and XI:2(a) expressed outside  the context of this litigation", and are "compelling" 
in this dispute as "statements against interest" (China's first written submission, para. 404, emphasis original). 
415 European Union's second written submission, para. 191.   
416 Complainants' joint opening oral statement at the first substantive meeting, paras. 130-131. 
417 Complainants' joint opening oral statement at the first substantive meeting, para. 132. WT/DS394/R 
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  7.244  The Panel notes first that China seeks to justify its export quota on a subset of bauxite, which, 
in the words of China, "is the predominant pr oduct exported under [Chin ese HS number] 2508.3000", 
constituting "approximately 75% of  exports" under that code.
418  China describes this product as 
having certain chemical and physical characteristi cs (such as "stringent physical and chemical 
specifications"419) that distinguish it from other products classified in this same heading.  The 
complainants have taken note of the distin ction between different types of "bauxite".420  China 
describes this product as follows: 
"Chemically, the product has a high aluminium oxide ("Al 2O3") content normally in 
excess of 80%, a low iron oxide ("Fe 2O3") content of less than 2.5%, and few other 
impurities ...  Amongst the most important phys ical characteristics of the product is 
high density, at or higher than 3.25 g/cm3 ...."421 
7.245  In light of this description, the Panel will cons ider China's arguments that the application of 
an export quota is justified pursuant to Article XI:2(a ) in respect of this product only.  As such, any 
conclusions under Article XI:2(a) would ex tend only to this product as described. 
7.246  The Panel additionally recalls that Article 3.2 of  the DSU directs panels to clarify the existing 
provisions of the covered agreements "in accordance with customary rules of interpretation of public 
international law"; these rules include the prin ciples codified in Articles 31, 32 and 33 of the Vienna 
Convention .422  Article 31 of the Vienna Convention  states in particular that "[a] treaty shall be 
interpreted in good faith in accordance with the or dinary meaning to be given to the terms of the 
treaty in their context and in the light of its object and purpose.  
7.247  Before proceeding, the Panel wishes to a ddress China's reference to restrictions or 
prohibitions applied by other WTO Members.  Rega rdless of their duration, the products to which 
they apply, the importance of that product to domest ic downstream users or the degree of shortage of 
that product, the Panel does not consider that m easures applied by other WTO Members are relevant 
to its analysis. Those measures are not in the Panel' s terms of reference, and are not subject to this 
dispute.  Moreover, these measures were not raised in  response to the circumstances before this Panel, 
nor is it clear to the Panel that these restrictions we re put into place with Article XI:2(a) in mind or 
that these restrictions themselves comply with the re quirements of Article XI:2(a).  Even if Members 
considered these measures to be justified pursuant to Article XI:2(a), their application does not 
demonstrate agreement on the meaning of Article XI:2(a).423  In any event, Article XI:2(a) by its 
terms must be viewed through the prism of the Member applying the restriction. 
                                                      
418 China's opening oral statement at the second substantive meeting, para. 92; Exhibit CHN-513. 
419 China's opening oral stat ement at the second substantive meeting, para. 92. 
420 See, e.g., United States' second written submi ssion, paras. 188-200.  China submits, through 
reference to "Critical Raw Materials for the EU: Report of the Ad-hoc working Group on Defining Critical Raw 
Materials" (Exhibit CHN-126), that the European Union defines "the product refractory bauxite in the same 
manner" (see China's Comments on the Interim Reports of the Panel, pare. 104).  The European Union submits 
that this document does not express the views of the European Union (see European Union's Comments dated 
18 March 2011, p. 2).   
421 China's response to Panel question No. 8 following the first substantive meeting, paras. 34-35; 
China's first written submission, paras. 432-434; China' s second written submission, para. 130; China's opening  
oral statement at the second substantive meeting, paras. 113, 136 and 137; see also Report by China on 
Refractory Bauxite, pp 6-8 (Exhibit CHN-10). 
422 Appellate Body Report, US – Gasoline , p. 17, DSR 1996:I, 3, at pp. 15-16; Appellate Body Report, 
India – Patents (US) , para. 45; and Appellate Body Report, US – Shrimp , para. 114. 
423 Under Article 31(3)b of the Vienna Convention , a treaty interpreter ma y take into account the 
subsequent practice in the application of the treaty wh enever such practice estab lishes the agreement of the  WT/DS394/R 
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  7.248  The Panel now turns to consider the terms of  Article XI:2(a) on the basis of relevant 
jurisprudence. 
(a) The ordinary meaning of Article XI:2(a) of the GATT 1994 
7.249  The Panel will review briefly the arguments of the parties when considering the meaning of 
Article XI:2(a) and will then turn to its own anal ysis of the provisions.  As a preliminary matter, 
however, the Panel wishes to address China's argument that the phrase "prohibitions or restrictions" in 
Article XI:2(a) of the GATT 1994 has the same mean ing as the identical phrase used in Article XI:1; 
that is, it covers any "prohibitions or restrictions" that are covered by Article XI:1.
424   
7.250  The Panel agrees with China in this regard a nd observes that the complainants do not dispute 
China's view on this point.  The Panel will now c onsider the remaining principal terms at issue, 
notably the meaning of "temporarily applied", "essential products" and "critical shortage".   
(i) Prohibitions or restrictions "tempor arily applied" under Article XI:2(a) 
7.251  China argues that the term "temporarily" view ed in the immediate context of the term 
"applied", means that the application of an expor t prohibition or restriction must be limited in  time 
and linked to the prevention or relief of a critical  shortage of a produc t essential to the exporting 
Member.425  China submits that this determination must be made on a case-by-case basis, but may 
permit the application of a restriction or prohib ition for an extended period of time, provided the 
measure is regularly reviewed.426  China submits that the time period will be defined in relation to the 
time required to prevent or relieve the critical shortage.427 
7.252  China finds support for its interpretation in a ban that was maintained on merino sheep in 
Australia for over 80 years from 1929 until 2010, including for a stretch of 18 years preceding the GATT 1947 negotiations.  China argues that assurances we re given to Australia that its ban on merino 
sheep would be covered by Article XI:2(a) and this is important in understanding the scope of 
Article XI:2(a).
428 
                                                                                                                                                                     
parties regarding its interpretation.  In Japan – Alcoholic Beverages II , the Appellate Body explained that 
"subsequent practice" within the meaning of Article 31 (3)(b) entails a "...'concordant, common and consistent' 
sequence of acts or pronouncements wh ich is sufficient to establish a dis cernible pattern implying the agreement 
of the parties [to a treaty] regarding its interpretation" (Appellate Body Report, Japan – Alcoholic Beverages II , 
p. 13, DSR 1996:I, 97, at p. 106). 
424 China's first written submission, para. 371. 
425 China's first written submission, para. 373. 
426 China's first written submission, paras. 374-376; Ch ina's second written submission, para. 112.  In 
this latter respect, China refers to the European Union's position that export quotas on copper, aluminium, and 
lead waste, scrap, ash and resi dues were "reviewed annually": see GATT Multilateral Trade Negotiations, 
Inventory of Non-Tariff Measures – Addendum MTN/3B/1-5/Add.9 (23 August 1977), 406.1, p. 3 (Exhibit 
CHN-161). 
427 China's second written submission, para. 112. 
428 China's opening oral stat ement at the first substantive meeting, para 59, referring to U.N. Economic 
and Social Council, Second Session of the Preparator y Committee of the United Nations Conference on Trade 
and Employment, Verbatim Report, Fortieth Meeting of Commission "A" (1) (Articles 25 & 27, 26, 28 & 29), 
Held on Friday 15 August 1947 at 10.30 a.m. in the Palais des Nations, Geneva, E/PC/T/A/PV/40(1) (15 August 
1947), pp. 4-9 (Exhibit CHN- 181) and N. Economic and Social Council,  Third Committee:  Commercial Policy, 
Summary Record of the Thirty-Seventh Meeting, Held on Monday, 16 February 1948 at 3.30 p.m., 
Consideration of the Report of Sub-Committee E (Articles 20 and 22), E/CONF.2/C.3/SR.37 (16 February 
1948), pp. 1 to 3 ( (Exhibit CHN-184). WT/DS394/R 
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  7.253  The complainants reject the view that an export restriction may be applied under 
Article XI:2(a) to situations involving finite r eserves of a particular product or natural resource.
429  In 
their view, the finite availability of a product is in sufficient to constitute a critical shortage.  Given 
that the availability of such a g ood would keep decreasing until the exhaustion of the good's reserves, 
they argue that such a shortage would not be te mporary because after the exhaustion of the reserves 
the shortage of the good would become permanent.  Th ey consider this type of shortage would not be 
apt to be remedied or prevented thro ugh measures of limited time duration.430 
7.254  Third parties Brazil and Canada agree with the complainants' view that a temporary measure 
must have an expiry date, or have as its purpose th e prevention or the relief of a need whose existence 
is limited in time.  Brazil argues that the term "tem porarily applied" is defined as "lasting or meant to 
last for a limited time only; not permanent; made or arranged to supply a passing need".431  Brazil 
considers that situations where the shortage of  products could not be ove rcome, but only managed 
over time, are better addressed under Article XX(g).432  Canada submits that measures may not be 
applied under Article XI:2(a) for an indefinite period, but may only be applied for a fixed time.  It 
notes that, while Article XI:2 is subject to the pa rticular requirements set out in each paragraph, 
Article XX is subject to additional requirements,  specifically, those contained in the chapeau to 
Article XX.433 
7.255  The Panel observes that the ordinary meaning of "temporarily" is "for a time (only)" and 
"during a limited time".434  The term "limited time" means "a ppointed, fixed" and "circumscribed 
within definite limits, bounded, restricted".435  These definitions suggest a fixed time-limit for the 
application of a measure.  Thus, on its face, Article XI:2(a) would appear to justify measures that are 
applied for a limited timeframe to address "criti cal shortages" of "foods tuffs or other products 
essential to the exporting contracting party".   
7.256  As noted above, Article 31 of the Vienna Convention  requires a treaty to be interpreted in 
good faith in accordance with the ordinary meaning to  be given to the terms of the treaty in their 
context and in the light of its object and purpose. The Appellate Body has stressed the importance of 
"read[ing] all applicable provisions of a treaty in a way that gives meaning to all of them, 
                                                      
429 United States' response to Panel question No. 16 following the first substantive meeting; United 
States' second written submission, para. 232; European Union's second writte n submission, para . 214; Mexico's 
second written submission, para. 237. 
430 United States' response to Panel question No. 16 following the first substantive meeting, para. 26; 
United States' second written submission, para. 232; European Union's second written submission, para. 214; 
Mexico's second written submission, para. 237. 
431 Brazil's third party oral statement, para. 6, 9; Shorter Oxford English Dictionary , 5th edn., L. 
Brown (ed.) (Oxford University Press, 2002), Vol. 2, p. 3207. 
432 Brazil's third party oral statement, para. 9. 
433 Canada's third party oral submission, para. 17. 
434 Oxford English Dictionary Online , temporarily , adv. (Exhibit CHN-156).  China notes that the term 
"temporairement ", in French means "à titre temporaire, pour un temps " and " momentanément " (le Grand Robert 
de la langue française online, temporairement  (Exhibit CHN-158)); the term " momentanément " means " d'une 
manière momentanée " and " provisoirement " (le Grand Robert de la langue française online, momentanément  
(Exhibit CHN-159)), or "of temporary nature" and "pr ovisionally".  China notes that the Spanish adverb 
"temporalmente " is defined as " por algún tiempo ", meaning "for some time" (Diccionario de la Lengua 
Española, Real Academia Española, Vigésima Segunda Edición, 2001, " temporalmente ", meaning 2.  The full 
definition reads: adv. m. En el orden de lo temporal y terreno.  2.  adv. t. Por algún tiempo .  This translates as:  
"Adverb of mode: In the sphere of the temporal and terrestrial.  2.  Adverb of time: For some time." (Exhibit 
CHN-160)). 
435 Oxford English Dictionary Online , limited , ppl., a. (Exhibit CHN-157).  WT/DS394/R 
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  harmoniously."
436  Thus, Article XI:2(a) should be inte rpreted taking into consideration other 
provisions. 
7.257  In the Panel's view, an interpretation that Artic le XI:2(a) permits the application of a measure 
for a limited time under limited circumstances would be in harmony with the pr otection that may be 
available to a Member under Article XX(g), which addresses the conservation of exhaustible natural 
resources.  To conclude otherwise would allow Members to resort indistinguishably to either Article XI:2(a) or XX(g) to address the problem  of an exhaustible natural resource.   
7.258  As mentioned above, Article XX(g) incorporat es additional protections in its chapeau to 
ensure that the application of a measure does not r esult in arbitrary or unjus tifiable discrimination or 
amount to a disguised restriction on internationa l trade.  Article XI:2(a) does not impose similar 
limitations on Members' actions.  In the Panel's view, the absence of such safeguards in Article XI:2(a) lends support to our view that a r estriction or ban applied un der Article XI:2(a) must 
be of a limited duration and not indefinite. 
7.259  China makes reference to Australia's applica tion of an export ban on merino sheep for an 
extended period of time in support of its view that measures may be applied under Article XI:2(a) for 
extended periods.  As China notes, Australia's ban on livestock was discussed at the time of negotiating the GATT 1947.  Under Article 32 of the Vienna Convention , a treaty interpreter may 
resort to supplementary means of interpretation, in cluding the preparatory work of the treaty and the 
circumstances of its conclusion, to confirm the meaning of the provision resulting from the 
application of Article 31 of the Vienna Convention , or to determine the meaning of a provision when 
interpretation leaves the meaning ambiguous or obscure  or leads to an absurd or unreasonable result. 
7.260  The Panel does not consider that the meaning of  the term "temporarily" ascribed pursuant to 
an interpretative analysis under Article 31, is ambi guous or obscure and hence, we do not see a need 
to resort to Article 32.
437  Accordingly, the Panel concludes pre liminarily that Article XI:2(a) permits 
the application of restrictions or prohibitions for a limited time to address "critical shortages" of 
"essential products".  The Panel turns next to th e meaning of "essential" products and will thereafter 
examine the term "critical shortages".   
(ii) "Essential" products under GATT Article XI:2(a) 
7.261  China argues that Article XI:2(a) permits an exporting Member to determine those products 
that are "essential" to it when applying restrictions to prevent or relieve critical shortages.  It argues 
that Article XI:2(a) neither precludes nor prescrib es consideration of any particular criterion to 
determine whether a product is "essential for th e exporting [Member]", but will depend on the 
particular circumstances at hand.438  China argues that the term "other products essential to the 
                                                      
436 See Appellate Body Report, Argentina – Footwear (EC) , para. 81 (original emphasis);  see  also 
Appellate Body Reports: Korea – Dairy , para. 81;  US – Gasoline , p. 23, DSR 1996:I, 3, at p. 21;  Japan – 
Alcoholic Beverages II , p. 12, DSR 1996:I, 97, at p. 106;  India – Patents (US) , para. 45. 
437 In any event, the Panel does not consider the ban on Australian merino sheep to be particularly 
helpful in our interpretation for purposes of the case before us.  The negotiating parties' discussion of this ban 
appears to have centred on whether Article XI:2(a) could be used to address questions of shortages in times of 
drought, which is not instructive with respect to the fact s before us.  Moreover, the fact that Australia may have 
kept the measure in place for 80 years (up to today) does  not support the conclusion that the negotiating parties 
foresaw then and therefore agreed that the continued application for such duration would be justified under 
Article XI:2(a). 
438 China's second written submission, paras. 41-47.   WT/DS394/R 
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  exporting [Member]" may include "m inerals, metals, and other basic commodities, as well as initial 
processed downstream products thereof."
439   
7.262  China submits that Article XI:2(a) does not limit  the types of "other products" that may be 
subject to restrictions, except that the products mu st be "essential" to the exporting Member.  China 
submits that the distinction made between "foods tuffs" and "other products" demonstrates that a 
product need not contribute to ensuring food secur ity in order to be essential under Article XI:2.440  
China argues further that the modifier "to the expo rting [Member]" means that the importance of any 
product should be judged in relation to the particular Member conc erned, not necessarily in relation to 
all Members.441  China considers that for a product to be ess ential, it must be "material, important or 
requisite for the exporting Member".442 
7.263  China argues that one may assess th e "essentialness" of a product to a particular Member by 
assessing the quantitative contribution of the product th rough its entire value chain, e.g. by assessing 
the contribution of a product to a Member's gros s domestic product, or to education, healthcare, 
infrastructure, technological progress, or scientific research.443  China also posits that the Preamble of 
the WTO Agreement provides relevant context to interpret the meaning of an "essential" product, 
additionally confirming that a product may be essential to an exporting Member due to its 
contribution to improved education, healthcare, in frastructure, technological progress, or scientific 
research. 
7.264  China finds further support for its interpreta tion of the term "essential products" in the 
Understanding on the Balance-of-Payments Provisi ons of the General Agreement on Tariffs and 
Trade 1994 ("BOP Understanding") and Article XXXV I:5 of the GATT 1994 and its Ad Note.  China 
submits that the  use of the term "essential produc ts" in Article 4 of the BOP Understanding confirms 
that a broad range of products can be considered "essential", wh ether serving "basic consumption" 
needs, or meeting economic needs, su ch as "inputs needed for production".444   
7.265  China argues that Article XXXVI:5 and its Ad No te support the view that Article XI:2(a) may 
be applied to address a product that is important to domestic processing industries.  China submits that 
Article XXXVI:5 shows that the essential nature of  a "primary product" for a developing country may 
derive from the product's role in securing economi c diversification through the development of 
domestic processing industries.  According to Chin a, the customary norm in international law of 
sovereignty over natural resources was developed in  recognition of the "essential" role that natural 
resources play in the progress and development of states that possess those resources.445  C h i n a  
considers that Article XXXVI:5 applies to China in  the same manner as it applies to other Members, 
                                                      
439 China's first written submission, para. 379, fn. 536, referring to Exhibits CHN-16; CHN-52; CHN-
161; CHN-166; CHN-167; CHN-168; CHN-169, CHN-170; CHN-171; CHN-172. 
440 China's second written submission, para. 52. 
441 China's first written submission, para. 383, re ferring to U.N. Economic and Social Council, Second 
Session of the Preparatory Committee of the United Nations Conference on Trade and Employment.  
Commission A: Report of Sub-Committee on Articles 25 and 27  E/PC/T/141 (1 August 1947), p. 2 (Exhibit 
CHN-176); China's opening oral  statement at the first substantive meeting, para. 34. 
442 China's second written submission, para. 50. 
443 China's second written submission, para. 51. 
444 China's first written submission, para. 388; China' s opening oral statement at the first substantive 
meeting, para. 35;  Article 4 of the BOP Understanding  provides:  
"The term 'essential products' shall be understood to mean products which meet basic consumption 
needs or which contribute to the Member's effort to  improve its balance-of-payments situation, such as 
capital goods or inputs needed for production." 
445 China's opening oral statement at the first substan tive meeting, paras. 36-37; China's second written 
submission, paras. 58-59, 72-78.  WT/DS394/R 
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  and that China did not forgo – either through its Accession Protocol or Working Party Report – any 
particular treatment that may accrue to it under this provision as a developing country.
446 
7.266  Finally, China submits that the negotiators' position on Australia's export restrictions on 
merino wool sheep offers context to inform what features can legitimately make an "other product" 
essential, including the value derived from downstream production.447  China submits that the value 
sheep provided to the downstream domestic users in Australia at the time of negotiations is confirmed 
by the Official Yearbook of the Commonwealth of Australia for the years 1946-1947.448  China argues 
that Australia would not have agreed to the draft text of Article XI:2(a) without assurances that it 
could maintain export restrictions on shee p whenever affected by drought conditions. 
7.267  The complainants argue that China's reliance on a broad definition of the term "product" as 
covering a raw material ignores the fact that th e term "essential" serves to limit the scope of 
"products".449 Reading the phrase "other products essential to the exporting Member", the 
complainants argue that the type of products cove red under Article XI:2(a) are "products, other than 
foodstuffs, that are indispensable to or pertaini ng to the essence of the exporting Member".  The 
complainants argue that the inclusion of "foodstuff s" in the scope of the provision is relevant to 
convey the "level of importance of the product" that is contemplated by the provision.450 
7.268  The European Union submits that a broad inte rpretation of the term "essential products" in 
Article XI:2(a) would render othe r provisions of the GATT redundant, specifically Article XX(i).  
The European Union argues that this provision allows export restrictions on domestic materials 
necessary to ensure essential quan tities of such materials to a domestic processing industry, during 
periods when the domestic price of such material s is held below the world price as part of a 
governmental stabilization plan.  Allowing a broad interpretation of Article XI:2(a) would lead 
Members to impose an export restriction even if not covered by Article XX(i).451 
7.269  The complainants criticize China's reliance on Australia's restriction on merino sheep as a 
basis to inform the  interpretation of "essential products".  They argue that negotiators in that 
discussion did not address the meaning of the term "essential", whether merino sheep were essential 
because of their value to downstream industry, on whether the particular circumstances would satisfy 
the meaning of "essential".  The United States subm its that China based its conclusions that the 
"essentialness" of merino sheep derives from thei r value to the downstream industry on a 2009 
                                                      
446 China's second written submission, paras. 66-67. 
447 China's first written submission, paras. 385-387, referring to: U.N. Economic and Social Council, 
Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, 
Verbatim Report, Fortieth Meeting of Commission "A" (1) (Articles 25 & 27, 26, 28 & 29), Held on Friday 15 
August 1947 at 10.30 a.m. in the Palais des Nations, Geneva , E/PC/T/A/PV/40(1) (15 August 1947), pp. 4-9 
(Exhibit CHN-181); Australian Associ ation of Stud Merino Breeders,  "Evolution of the Australian Merino" 
(Exhibit CHN-182); U.N. Economic and Social Council, Second Session of the Preparatory Committee of the 
United Nations Conference on Trade and Employment, Co rrigendum to Verbatim Report of Fortieth Meeting of 
Commission "A" , E/PC/T/A/PV/40(1)Corr.3 (19 August 1947) (Exhibit CHN-183); N. Economic and Social 
Council, Third Committee:  Commercial Po licy, Summary Record of the Th irty-Seventh Meeting, Held on 
Monday, 16 February 1948 at 3.30 p.m., Consideration of the Report of Sub-Committee E (Articles 20 and 22) , 
E/CONF.2/C.3/SR.37 (16 February 1948), pp. 1 to 3 (Exhibit CHN-184).   
448 Chapter XIX Pastoral Production, 1946-1947 Official Yearbook of the Commonwealth of Australia 
pp. 853, 866, 871, 873, 882 (Exhibit CHN-465). 
449 China's opening oral statement at the first substantive meeting, para. 135. 
450 China's opening oral statement at the first substantive meeting, para. 136; United States' second 
written submission, para. 216; Mexico's second written submission, para. 221. 
451 European Union's second written submission, para. 192. WT/DS394/R 
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  industry association document.
452  The United States argues that such a statement made outside of the 
framework of the GATT is not relevant.453 
7.270  The complainants argue that the notion of "essential products" in Article 4 of the BOP 
Understanding does not mean that si mply any "input needed for production" may satisfy the definition 
of "essential products".454  The European Union submits that Articles XII:3(b) and XVIII:10 of the 
GATT 1994 read together with the BOP Understanding  allow Members to remove restrictions to 
prioritize the free importation of more essential products, thereby allowing the importation of goods 
that otherwise would have been subject to an import restriction.455  In contrast, it argues, 
Article XI:2(a) is an exception from the general prohibition of quantitative restrictions, and thus 
allows restrictions on exports; it is  not related to the issue of MFN treatment of other WTO Members.  
Thus, the European Union argues that differences  between the scope of the BOP Understanding and 
the scope of Article XI:2(a) indicate that a comm on definition of essential products "would lead to an 
incoherent application of the GATT."456 
7.271  Finally, the complainants argue that Artic le XXXVI:5 of the GATT 1994 does not support 
China's view of the term "essential products" or th at the term may have a different meaning for 
developing country Members as opposed to other WTO Members.  The United States and Mexico submit that, by virtue of China's Working Party Report, Article XXXVI of the GATT 1994 is not relevant to an assessment of whether China' s measures under discussion are WTO-inconsistent.
457  In 
any event, the complainants maintain that noth ing in Article XXXVI:5 indicates that Article XI 
should be interpreted differently for developing countri es and that such an approach would lead to an 
incoherent interpretation of Article XI, grantin g different rights and obligations to developing 
countries under Article XI.458  The European Union submits that the text of Article XXXVI:5 focuses 
on market access under favourable conditions for go ods as opposed to the imposition of quantitative 
restrictions.459  The European Union submits further that a GATT Secretariat background note 
circulated during the Uruguay Round Negotiations in 1989 does not support China's argument that 
Article XXXVI:5 can be used as context to interpre t Article XI.  The United States argues that China's 
reference to Article XXXVI:5 confirms that China' s application of an export quota on refractory-grade 
bauxite relates to efforts to foster developmen t of the domestic industry and not to conservation.460 
                                                      
452 United States' response to Panel question No. 17, following the first substantive meeting,  para. 32. 
453 United States' second written submission, para. 2 20; Mexico's second written submission, para. 225. 
454 United States' response to Panel question No. 17 following the first substantive meeting, para. 29; 
European Union's second written submission, para. 194; United States' second written submission, para. 218; 
Mexico's second written submission, para. 223. 
455 European Union's opening oral statement at the second substantive meeting, para. 23. 
456 European Union's second written submission, para. 194; European Union's opening oral statement at 
the second substantive meeting, para. 23. 
457 United States' response to Panel question No. 17 following the first substantive meeting of the 
Panel, footnote 58; Mexico's response to Panel question No. 17 following the first substantive meeting of the 
Panel; United States' closing oral statement at the second substantive meeting of the Panel, paras. 7 and 8; 
Mexico's closing oral statement at th e second substantive meeting of the Panel.  The European Union does not 
express a view on whether China qualifies is a developing country or whether China could rely on provisions of 
Part IV of the GATT, including Article XXXVI:5 of the GATT 1994 (European Union's opening oral statement 
at the second substantive meeting, para. 26). 
458 European Union's opening oral statement at the second substantive meeting, para. 27.   
459 European Union's opening oral statement at the second substantive meeting, para. 32. 
460 United States' response to Panel question No. 17, fn. 58 following the first substantive meeting.  WT/DS394/R 
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  7.272  Third party Japan notes that "shortage of crops, etc. in cases such as famine"
461 was 
contemplated at the time of negotiating the original  language of Article XI:2 (a), and that nothing in 
any amendments to the text altered the meaning of that language.462 
7.273  The Panel turns now to examine the meaning of Article XI:2(a).  Under the text of 
Article XI:2(a), products may be "foodstuffs" or "other products".  The term "other products" is 
qualified by the term "essential to the exporting" Member.   
7.274  The term "product" is defined as "a thing genera ted or produced by, or as if by, nature or a 
natural process";  "that which results from the operati on of a cause, or is produced by a particular set 
of circumstances";  "an object produced by a partic ular action or process";  and, "an article or 
substance that is manufactured or refined for sale".463   
7.275  The phrase "essential to" is defined as "affecting the essence of anything; 'material', 
important" "constituting, or forming part of, th e essence of anything", and "absolutely necessary, 
indispensably requisite".464  The phrase "to the exporting" Member appears to have been added to the 
initial draft of Article XI:2(a) to clarify that "t he importance of any prod uct should be judged in 
relation to the particular country concerned".465  Thus, a product may fall within the meaning of 
Article XI:2(a) when it is "important" or "necessary" or "indispensable" to a particular Member.   
7.276  The Panel does not consider that the terms of Article XI:2, nor the statement made in the 
context of negotiating the text of Article XI:2 th at the importance of a pr oduct "should be judged in 
relation to the particular country concerned", mean s that a WTO Member may, on its own, determine 
whether a product is essential to it.  If this were th e case, Article XI:2 could have been drafted in a 
way such as Article XXI(b) of the GATT 1994, whic h states: "Nothing in this Agreement shall be 
construed ... to prevent any contr acting party from taking any action which it considers necessary  for 
the protection of its essential security interests"  (emphasis added).  In the Panel's view, the 
determination of whether a product is "essential" to that Member should take into consideration the 
                                                      
461 EPCT/C.II/36 (30 Oct. 1946) ("Fifth Preparatory Committee Meeting of 30 Oct"), p. 9. 
462 Japan's third party oral statement, para. 14, referring to EPCT/C.II/QR/PV/4 (15 Nov. 1946) 
("Fourth Sub-Committee Meeting of Nov.15"), page. 5. 
463 Oxford English Dictionary Online , product , n. (Exhibit CHN-162).  China also provides definitions 
of terms that appear in the other WTO language versions of Article XI:2(a).  It argues that the definition of the 
French term " produit " and the Spanish term " producto " reveal that an "essentia l" "product" may be a raw 
material, such as a mineral, or a manufactured, processed material (le Grand Robert de la langue française 
online, produit , n.m.;  Exhibit CHN-164:  Diccionario de la Lengua Española, Real Academia Española, 
Vigésima Segunda Edición, 2001, " producir ", meanings 1, 2, 5, and 7 (Exhibit CHN-163)). 
464  le Grand Robert de la Langue Française, essentiel  (Exhibit CHN-174).  Se e, also Complainants' 
joint opening oral statement at the first substantive meeting, para. 136, referring to New Shorter Oxford English 
Dictionary , p. 852 (defining "essential" as "[o]f or pertaining to a thing's essence"; "absolutely indispensable or 
necessary"; "constituting or forming part of a thing's essen ce.")  China notes that the French text uses the term 
"essentiels ", an adjective defined as either " qui est absolument nécessaire ", being a synonym for " indispensable , 
nécessaire , vital, obligatoire ", or " Qui est le plus important ", synonym for " principal, fondamental, primordial .  
Tres important  – incontournable , important " (Oxford English Dictionary Online , essential , a. and n. (Exhibit 
CHN-173)).  China notes that the Spanish text of Article XI:2(a) uses the term " esenciales ", which is defined as 
"Perteneciente o relativo a la esencia .  [...]  2.  Sustancial, principal, notable " (Diccionario de la Lengua 
Española, Real Academia Española, Vigésima Segunda Edición, 2001, " esencial ", meanings 1 and 2 (Exhibit 
CHN-175)).  China submit that this definition is translated  as "Pertaining or relating to the essence.  […]  2.  
Substantive, principal, noteworthy". 
465 U.N. Economic and Social Council, Second Session of the Preparatory Committee of the United 
Nations Conference on Trade and Employment.  Commission A: Report of Sub-Committee on Articles 25 and 27  
E/PC/T/141 (1 August 1947), p. 2 (Exhibit CHN-176). WT/DS394/R 
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  particular circumstances faced by that Member at the time when a Member applies a restriction or 
prohibition under Article XI:2(a).  
7.277  It is not clear from the terms of Article XI:2(a) whether the essentialness of a product should, 
as China suggests, be measured in terms of the si gnificance of a product to a Member's gross domestic 
product, employment, welfare or any other particular  variable.  Nor is it clear from its terms that 
Article XI:2(a) excludes products that may be an  "input" to an important product or industry.
466 
7.278  The parties have debated the use of the term "essential product" in the BOP Understanding.  
That instrument addresses a particular set of circ umstances, namely the use of restrictive import 
measures taken to control the general level of imports when "necessary" to address a "Balance-of-
Payments situation".  Article 4 of the BOP Unde rstanding states: "The term 'essential products' shall 
be understood to mean products which meet basic consumption needs or which contribute to the 
Member's effort to improve its Balance-of-Payment s situation, such as capital goods or inputs needed 
for production."  The BOP Understanding allows Memb ers imposing the restrictions to prioritize the 
free importation of products meeting basic needs as well as those which permit the Member to address 
a balance of payments matter.  We see little assi stance here in determining the meaning of 
Article XI:2(a). 
7.279  The Panel recognizes that parallels may exist between the need to ensure imports for 
consumption needs or to protect the needs of domes tic industry in a balance-of-payments situation, 
and the need to temporarily restrict exports of certa in goods to prevent or relie ve critical shortages of 
foodstuffs or other essential products to domestic industry, for instance.  Nevertheless, Article XI:2(a) 
by its terms is not confined to addressing a balance- of-payments issue.  Its reach includes a potentially 
broad range of situations that may justify the app lication of a restrictive measure.  An assessment of 
whether a product is "essential" under Article XI:2(a ) would, it seems to the Panel, call for a case-by-
case analysis.  Thus, reliance on the notion of  "essential product" as it appears under the BOP 
Understanding to inform an interpretation of "essentia l" in Article XI:2(a) is, in the Panel's view 
inapposite. 
7.280  For the same reason, the Panel considers that  GATT Article XXXVI:5 and its Ad Note does 
not assist the Panel in its interpretation of the me aning of "essential products" in Article XI:2(a).  
Regardless of the particular status of China's development, as the complainants note, neither 
Article XI nor Article XXXVI:5 provide that Article XI should hold a different meaning or be applied 
differently for developing countries.  In other words, it is not clear that a panel should view foodstuffs 
or other products to be more or less "essential" by taking into considera tion the development of a 
given WTO Member. 
7.281  Nor does the Panel find much assistance in the negotiators' agreement that Article XI:2(a) 
would cover Australia's ban on the export on live me rino sheep.  China posits that this demonstrates 
that a product may be essential to a Member because of its importance for domestic processing 
industries.  Even if the Panel were to agree that the drafters' agreement cons titutes context within the 
meaning of Article 31(2)(a) of the Vienna Convention  as an "agreement relating to the treaty which 
                                                      
466 The Panel does not agree with the European Union that if a WTO Member could impose export 
restrictions on any product that it would deem "essential"  for itself under Article XI:2(a), including an input to 
domestic industry or otherwise, would reduce GATT Article XX(i) to redundancy.  The Panel recalls that 
Article XI:2(a) applies where there is a "critical shortage" of an "essential" product to a given WTO Member.  
Article XX(i) applies in cases where "domestic materi als necessary to ensure essential quantities of such 
materials to a domestic processing industry" in in stances where a government "as part of a government 
stabilization plan" hold the price belo w a benchmark world price.  In the Panel's view, the circumstances under 
which each of these provisions apply are very different and hence there meanings are distinct.  WT/DS394/R 
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  was made between all parties in connec tion with the conclusion of the treaty"
467, the Panel does not 
consider China's identification of Australia's restriction on merino sheep particularly useful to the 
Panel's interpretative exercise.468  In the documents submitted to  the Panel, Australia sought 
clarification on whether Article XI:2 would permit  it to apply a ban on sheep exports if a drought 
were to threaten its flocks.  There does not appear  to be any objection to applying Article XI:2(a) in 
such situation.  It appears beyond debate that Aust ralia considered then (and  maintains today) that 
merino sheep are "essential" products.  However, there is no evidence before the Panel that the 
drafters expressly discussed the notion of produc ts for use by the downstream industry, or the 
meaning of "essential" products, when addressing Austra lia's concern with the potential application of 
a ban on the export of merino sheep.   
7.282  Accordingly, the Panel concludes that a produc t may be "essential" within the meaning of 
Article XI:2(a) when it is "important" or "necessary" or  "indispensable" to a particular Member.  This 
may include a product that is an "input" to an important product or industry.  However, the 
determination of whether a particul ar product is "essential" to a Memb er must take into consideration 
the particular circumstances faced by that Member at  the time that a Member applied the restriction.  
(iii) Export prohibitions or restric tions applied to "prevent or relieve a critical shortage" of 
essential products 
7.283  China argues that Article XI:2(a) covers measures adopted "to avoid or prevent the 
occurrence of a critical shortage of essential produc ts", and those adopted "to ease and mitigate the 
negative consequences resulting from a critical shorta ge of essential products, once that shortage has 
occurred".469  China submits that Article XI:2(a) neither precludes nor prescribes consideration of any 
particular criterion to determine whether a "critical shortage exists", but will depend on the particular 
circumstances at hand.470    
7.284  China argues that the term "critical" indicates the degree of "shortage" required.  It argues that 
shortage refers to a deficiency in quantity.  Th e notion of critical refers to something "decisive", 
"crucial" or "grave", that is associated w ith "uncertainty" or "risk" or a "crisis".471  Thus, China 
concludes that a "critical shortage" refers to "a defi ciency in quantity that rises to the level of decisive 
importance or crisis, or that raises  uncertainty or risk of the same".472  In addition, China submits that 
the French text of Article XI:2(a), which uses th e phrase "une situation critique due a une penurie", 
translated as "a serious or grave situation due to a shortage", informs an inte rpreter's consideration as 
to "whether the intensity of consequences resulti ng from a shortage of an essential product rises to the 
level of decisive importance or crisis".473 
7.285  China argues that the verbs "to prevent" and "to re lieve" further inform this interpretation.  It 
suggests that the terms "to prevent" and "to relieve " indicate that "the occurrence or degree of the 
shortage is uncertain and/or poses a risk of severity ", and confirm that Article XI:2(a) is intended to 
provide "pre-emptive action to reduce or avoid altogether the manifestation of the risk".474  T h u s ,  
China considers Article XI:2 may apply where a cr itical shortage is foreseen and not simply in cases 
                                                      
467 China's second written submission, paras. 83-84.    
468 The Panel finds it difficult to regard this discussion amongst negotiators concerning live merino 
sheep as an "agreement relating to the treaty which was made between all parties in connection with the 
conclusion of the treaty" pursuant to Article 31.2(a) of the VCLT. 
469 China's first written submission, para. 399. 
470 China's second written submission, paras. 86.   
471 China's first written submission, paras. 390, 392. 
472 China's second written submission, para. 89.   
473 China's second written submission, para. 90. 
474 China's first written submission, para. 400. WT/DS394/R 
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  of an exogenous shock.
475  In its view, the degree of shortage need not be so extreme that it can only 
be relieved through an export ban.476 
7.286  China considers that a Member's tolerance for risk in the face of a shortage or potential 
shortage is one relevant criterion in assessing whether a "critical shortage" exists within the meaning 
of Article XI:2.  It submits that Members may respond differently to identical levels of risk, but that 
the language of Article XI:2(a) allows for these different  risk levels.  In this respect, China argues that 
Article XI:2(a) operates like the SPS Agreement, l eaving Members with a "margin of appreciation to 
determine their own appropriate level of protection and level of risk tolerance".477 
7.287  China submits that the textual relationship between the phrase "products essential for the 
exporting [Member]" and "critical shortage" provides re levant context, and means that preventative or 
remedial action is allowed to address a critical s hortage of a highly essential product, before such 
action would be allowed to address a similarly cr itical shortage of a moderately essential product.478 
7.288  China argues that the negotiating history supports the conclusion that Article XI:2(a) foresees 
preventive action, and allows a WTO Member to restrict or prohibit exports even if a critical shortage 
has not yet occurred.479  In this respect, China argues that th e drafters decided at a later point to 
include the terms "to prevent", to allow Members to  take such preventative action to avoid critical 
shortages.480   
7.289  The complainants argue that China conflat es the "essentialness" and "critical shortage" 
questions, the effect of which is to read "critical shortage" out of Article XI:2(a).  The complainants 
accept China's definition of "shortage" as referring to "a  deficiency in quantity", but add that the term 
"critical" means "in the nature of or constituting a cris is or of decisive importance".  They read these 
terms together to mean "a deficiency in quantity that  is in the nature of or constituting a crisis or of 
decisive importance".481  Hence they argue that, for a shortage to be "critical", it must rise to "a level 
beyond mere 'relative scarcity'", and that the existence of "supply constr aints", or the exhaustibility of 
a resource, would not suffice to establish the existen ce of a "critical shortage" under Article XI:2(a).482 
7.290  The European Union argues that th e words "critical shortage" must be read within the context 
of the entire provision of Article XI:2(a), such th at a restriction must be "temporarily applied", and 
must be "relieving" the critical shortage, or "pre venting" its occurrence.  In other words, for a 
"shortage" to be "critical" in the sense of Article XI:2(a), the shortage must be, inter alia , temporary, 
i.e., limited in duration.  In this sense, it argues, there should be a point in time when the critical 
shortage would cease to exist and the availability of the good would return to normal.  If there is no 
possibility for the shortage ever to  cease to exist, the European Union submits that it would not be 
possible to "relieve or prevent" it through an expo rt restriction applied only for a limited period of 
time.483   
7.291  The European Union offers examples of what it considers might result in a critical shortage, 
such as an extended drought or wildfires that sev erely decrease the crops of grain or cereal in a 
                                                      
475 China's second written submission, para. 95. 
476 China's second written submission, para. 91.   
477 China's second written submission, para. 100. 
478 China's second written submission, paras. 105. 
479 China's first written submission, paras. 401-402. 
480 China's first written submission, paras. 403.   
481 Complainants' joint opening oral statement at the first substantive meeting, para. 140.   
482 Complainants' joint opening oral statement at the first substantive meeting, para. 141, 143; United 
States' second written submission, para. 230. 
483 European Union's second written submission, paras. 201-202.  WT/DS394/R 
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  particular country, or a mining accident.  The Euro pean Union compares these examples to Australia's 
export restriction on live merino sheep, where the a lleged shortage was "the devastating impact of a 
drought on the stock of Merino sheep" in Australia.
484 
7.292  The complainants argue that statements by  negotiators support the view that export 
restrictions could be "temporarily applied to cope with the consequences of a natural disaster, or to 
maintain year to year domestic stocks sufficient to avoid critical shortages of products ... which are 
subject to alternate annual shortages and surpluses".485  The complainants point to a statement by a 
representative of the United Kingdom that, "if you take out the word 'critical', almost any product that 
is essential will be alleged to have a degree of shor tage and could be brought w ithin the scope of this 
approach".486 
7.293  Finally, the European Union submits, under Ch ina's interpretation, the protections of 
Article XX(g) are made redundant.  In its view, Artic le XX(g) provides for stricter conditions (such as 
caps on domestic production or consumption) that must be met in order to allow derogations from the 
GATT obligations, including Article XI:1.  These der ogations are permitted to protect the reserves of 
exhaustible natural resources, whic h have a limited life span. If China's interpretation of "critical 
shortage" were accepted, according to the European  Union, Article XI:2(a) would allow a Member to 
impose export restrictions even in the absence of caps on domestic production or consumption.  This 
result, reasons the European Union, would pre-empt the application of Article XX(g) in the field of 
export restrictions, and would not be consistent w ith the customary rules of interpretation of public 
international law.487 
7.294  The Panel notes that Article XI:2(a) covers expor t prohibitions or restrictions that either 
"prevent" or "relieve" critical shortages of produc ts essential to the exporting Member.  The verb "to 
prevent" means "to anticipate in action; to act in  advance of", "to act in anticipation of, or in 
preparation for", and also "to preclude the occurrenc e of …;  to render … impracticable or impossible 
by anticipatory action".488  The verb "to relieve" means "to ease or mitigate (pain, distress, or 
difficulty);  to make (a condition) less burdensome", and "to raise out of some trouble, difficulty, or danger; to bring or provide aid or assistance to;  to deliver from something troublesome or 
oppressive".
489 
                                                      
484 European Union's second written submission, fn. 145. 
485 Complainants' joint opening oral statement at the first substantive meeting, para. 141, referring to 
Exhibit CHN-180, para. 19.   
486 Complainants' joint opening oral statement at the first substantive meeting, para. 143, referring to 
Exhibit CHN-181; United States' second written submissi on, para. 231; Mexico's second written submission, 
para. 236. 
487 European Union's second written submission, para. 206. 
488 Oxford English Dictionary Online , prevent , v. (Exhibit CHN-193).  China notes that the French 
term " prévenir " means " empêcher par ses précautions  … d'arriver , de nuire " and " éviter " (le Grand Robert de 
la langue française online, prévenir  (Exhibit CHN-194)), or "prevent through precautions [something] from 
happening, damaging" and "avoid".  It notes that the Spanish term " prevenir " means " prevacer , evitar , estorbar  
o impeder algo ", meaning "to take precautions against, avoid, pose obstacles to, or impede something" 
(Diccionario de la Lengua Española, Real Academia Española, Vigésima Segunda Edición, 2001, " prevenir ", 
meaning 3 (Exhibit CHN-195)). 
489 Oxford English Dictionary Online , relieve , v. (Exhibit CHN-196).  China notes that the French text 
uses the term " remédier ", which is defined as " porter remède à  …" and " attenuer ou supprimer les effet néfastes 
de" (le Grand Robert de la langue française online, remédier , v. (Exhibit CHN-197)), or "helps to cure …" and 
"attenuates or suppresses harmful effects of".  China notes that the Spanish term " remediar " is defined as 
"Poner remedio al daño .  2.  Corregir o enmendar algo .  3.  Socorrer una necesidad o urgencia .  [...]  5 .  Evitar 
que suceda algo de que pueda derivarse algún daño o molestia " (Diccionario de la Lengua Española, Real 
Academia Española, Vigésima Segunda Edición, 2001, " remediar ", meanings 1, 2, 3, and 5.  Grammatical notes WT/DS394/R 
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  7.295  The noun "shortage" means "deficiency in quantity;  the amount by which a sum of money, a 
supply of goods, or the like, is deficient".
490  The adjective "critical" is defined as "of the nature of, or 
constituting, a crisis", "involving suspense or grave fear  as to the issue; attended with uncertainty or 
risk", "of decisive importance in relation to the issu e", and "tending to determine or decide;  decisive, 
crucial".491  In turn, the term "crisis" is defined as "a turning-point, a vitally important or decisive 
stage; a time of trouble, danger or suspense in politics, commerce, etc.".492    
7.296  The meaning of "shortage" as a deficiency in the quantity of goods appears to be common 
ground with the parties and the Panel also considers this  to be its meaning as used in Article XI:2(a).  
In the Panel's view, the term "critical" indicates that  a shortage must be of "decisive importance" or 
"grave", or even rising to the level of a "crisis" or catastrophe.  Article XI:2(a) states that measures in 
the form of restrictions or bans may be used on a temporary basis to either outright "prevent" or 
otherwise "relieve" such a shortage.   
7.297  The Panel is persuaded by the complainants' ar gument that the requirement that measures be 
applied "temporarily" contextually informs the notion of  "critical shortage".  In this sense, as noted by 
the European Union, if there is no possibility for an existing shortage  ever to cease to exist, it will not 
be possible to "relieve or prevent" it through an export restriction applied on a temporary basis.  If a measure were imposed to address a limited reserve of  an exhaustible natural resource, such measure 
would be imposed until the point when the resource is fully depleted.  This temporal focus seems 
consistent with the notion of "critical", defined as "of the nature of, or constituting, a crisis".   
7.298  In the Panel's view, China's interpretation cannot  be correct, for it would have Article XI:2(a) 
duplicate Article XX(g), a result that a proper interp retation of these two provisions would not allow.  
As we have pointed out previously, the WTO Agreemen t must be interpreted in a harmonious way.  If 
Article XI:2(a) were interpreted to permit the long-term application of measures in the nature of 
China's export restrictions on refractory grade baux ite, the import of Article XX(g) would be very 
much undermined, if not rendered redundant.  Thus it is important that effect be given to the 
differences between Article XX(g) and Article XI:2(a). 
                                                                                                                                                                     
omitted (Exhibit CHN-198)).  China argues that this tran slates as "to remedy the da mage.  2.  To correct or 
rectify something.  3.  To bring relie f to a need or urgency.  5.  To a void the taking place of something from 
which some harm or nuisance might derive". 
490 Oxford English Dictionary Online , shortage  (Exhibit CHN-186).  China notes the French term " une 
pénurie " is defined as " manque de ce qui est nécessaire ", or "short of what is necessary", and is considered 
synonymous with " défaut, faute , manque " (le Grand Robert de la langue française online, pénurie , n.f. (Exhibit 
CHN-187)).  It notes that the Spanish term " escasez " is defined as "2.  Poquedad , mengua de algo .  Escasez de 
trigo, de agua ." (Diccionario de la Lengua Española, Real Academia Española, Vigésima Segunda Edición, 
2001, " escasez ", meanings 2 and 3 (Exhibit CHN-188)),  that means "Scarcity, scantness of something". 
491 Oxford English Dictionary Online , critical , adj. (Exhibit CHN-189).  China notes that the Spanish 
adjective " agudo " is defined as " Puntiagudo , punzante , afilado .  [...]  4.  Dicho de un dolor :  Vivo y penetrante .  
5.  Dicho de una enfermedad :  Grave y de no larga duración " (Diccionario de la Lengua Española, Real 
Academia Española, Vigésima Segunda Edición, 2001, " agudo, da ", meanings 1, 4, 5, and 9 (Exhibit CHN-
190)), which can be translated as "that has a narrow poin t, pungent, sharp.  [...]  4.  Of pain:  intense and 
penetrating.  5.  Of an illness:  serious and not long-lasting.".  China notes further that the French text uses a 
different phrase, namely " une situation critique due à une pénurie ".  The adjective " critique " means " dangereux , 
difficile , grave " (le Grand Robert de la langue française online, critique  (Exhibit CHN-191)).  The definition of 
the term " une pénurie " is " manque de ce que est n écessaire a une collectivité " (le Grand Robert de la langue 
française online, pénurie  (Exhibit CHN-184)).  On the basis of these French dictionary definitions, China argues 
that the phrase " une situation critique due à une pénurie " can be translated to mean "a serious or grave situation 
arising due to a shortage".  The French text, thus, sugges ts that the circumstances or situation arising from the 
shortage should be critical. 
492 (Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 1, p. 557.  WT/DS394/R 
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  7.299  It is clear that Article XI:2(a) is intended to  address a different situation from that addressed 
by Article XX(g).  Article XX of the GATT 1994 sets out several "general exceptions" to the 
obligations contained in other provisions of the GA TT (including Article XI:1).  One such exception 
is set out in paragraph (g), which allows Member s to put in place measures contrary to other GATT 
obligations when they relate to the conservation of  exhaustible natural resour ces.  This right is not 
open-ended, however; the measures must be "made effective in conjunction with restrictions on 
domestic production or consumption. "  In addition, the chapeau to  Article XX requires that such 
measures are not applied in a manner which would c onstitute a means of arbitrary or unjustifiable 
discrimination between countries where the same cond itions prevail, or a disguised restriction on 
international trade.    
7.300  Article XI:2(a) authorizes derogation from th e prohibition on export and import restrictions 
under Article XI:1 in order to prevent or relieve cr itical shortages of products essential to the Member 
taking action.  Thus like Article XX(g), Article XI:2(a) operates as an exception, but only with respect 
to the obligations contained in Article XI:1, and not  with respect to GATT obligations more broadly.  
This suggests to us that the reach of Article XI:2 (a) would not be the same as that of Article XX(g); 
they are intended to address different situati ons and thus must mean different things.   
7.301  As with Article XX(g), the right to invoke Article XI:2(a) is circumscribed, but in a much 
different way.  The Panel considers that this differe nce, too, is important in interpreting the scope of 
Article XI:2(a).  Article XI:2(a) is not conf ined to conservation measures and any exceptional 
measures must be "temporarily applied" to addr ess "critical" shortages.  Conservation measures 
tempered by the chapeau of Article XX, which ta kes into account conditions outside the Member 
taking action, and by operating toge ther with domestic restrictions, will necessarily be different from 
temporary measures seeking to address a domestic cr isis or a matter involving "suspense or grave 
fear" in the Member taking action. 
7.302  For the Panel, conflating Article XI:2(a) and Article XX(g) as China appears to do would 
undermine the rights and obligations of Members unde r both provisions.  The benefits and strictures 
of Article XX(g) must not be transposed  to Article XI:2(a), or vice versa.  
7.303  We observe, however, that both measures are exceptions and hence we find instructive the 
words of the Appellate Body in describing the task  of interpreting and applying the limitation in the 
chapeau of Article XX.  The Appellate Body said that it is a:  
"... delicate one of locating and marking out a line of equilibrium between the right of 
a Member to invoke an exception under Article XX and the rights of the other Members under varying substantive provisions  (e.g., Article XI) of the GATT 1994, 
so that neither of the competing rights will cancel out the other and thereby distort 
and nullify or impair the balance of ri ghts and obligations constructed by the 
Members themselves in that Agreement."
493  
7.304  So, too, must the interpreter mark out a balan ce between the right of a Member to invoke the 
exception under Article XI:2(a) and the rights of other Members under Article XI:1 so as not to 
disturb the balance Members constructed between th e two provisions.  The interpreter will be guided 
in marking out the line of equilibrium by the requirement that exceptional measures be "applied 
temporarily" to address "critical" shortages under Article XI.2(a). 
7.305  This is not to say that a Member may never ta ke anticipatory measures within the bounds of 
Article XI:2(a) to "prevent" a "critical shortage" before it occurs.  However, as discussed above, the 
                                                      
493 Appellate Body Report, US – Shrimp , para. 159. WT/DS394/R 
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  Panel disagrees that Article XI:2(a) would permit long-term measures to be imposed to address an 
inevitable depletion of a finite resource.   
(iv) Preliminary conclusions on interpretation of Article XI:2(a) 
7.306  The Panel has concluded above that Article XI:2(a ) permits the application of restrictions or 
prohibitions on a limited basis to address "critical shortages" of "essential products".  The Panel 
further concluded that a product may be "essential" within the meaning of Article XI:2(a) when it is 
"important" or "necessary" or "indispensable" to a particular Member.  This may include a product 
that is an "input" to an important product or i ndustry.  However, the determination of whether a 
particular product is "essential" to a Member must ta ke into consideration the particular circumstances 
faced by that Member at the time a Member applies a restriction or prohibition under Article XI:2(a).  Finally, the Panel concluded that the term "critic al shortage" in Article XI:2(a) refers to those 
situations or events that may be relieved or prevented through the application of measures on a 
temporary, and not indefinite or permanent, basis. 
7.307  With these conclusions in mind, the Panel w ill consider whether China's export quota on 
refractory-grade bauxite is applied in a manner consistent with Article XI:2(a). 
(b) Whether China's export quota on refractory-grade ba uxite is temporarily applied to prevent or 
relieve a critical shortage of an essential product 
7.308  China argues that the export quota that it appli es to refractory-grade bauxite is temporarily 
applied to prevent or relieve a critical shortage of  an essential product to it, and accordingly, its export 
quota is justified pursuant to Article XI:2(a).   
7.309  The Panel recalls that Article XI:2(a) permits the application of temporary restrictions or 
prohibitions on a limited basis to address "critical s hortages" of "essential pr oducts".  The Panel found 
that a product may be "essential" within the meanin g of Article XI:2(a) when it is "important" or 
"necessary" or "indispensable" to a particular Member .  This may include a product that is an "input" 
to an important product or industry, taking into c onsideration the particular circumstances faced by 
that Member.  In addition, the Panel found that the te rm "critical shortage" in Article XI:2(a) refers to 
those situations or events that are "important" or  "grave", or rise to the level of a "crisis" or 
catastrophe, and which may be relieved or preven ted through the application of measures on a 
temporary, but not indefinite or permanent, basi s.  The Panel will assess below whether the export 
quota applied to refractory-grade ba uxite meets these requirements. 
(i) The parties' views on the applicability of Artic le XI:2(a) to the circumstances in China  
Whether refractory-grade bauxite is an "essential" product  to China 
7.310  China offers a number of reasons and evidence in support of its view that refractory-grade 
bauxite is "essential" to China.  Ch ina argues that "[t]he contribution of the product, its 'essentialness' 
or its importance of use, is defined by referen ce to a range of quantitative and qualitative factors, 
including geological, technical, environmenta l, social, economic, and political factors."494   
7.311  China submits that methodology provided by criticality assessments of the United States and 
the European Union, including an evaluation of th e "importance of use and availability" of a given 
product and review of "the net benefits customers receive from using a product" inform what makes a 
                                                      
494 China's first written submission, para. 436.  WT/DS394/R 
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  product essential.
495  China cites a study by the United Stat es National Resource Council, for instance, 
that concludes that bauxite among other materials is "essential, but not critical".496  In addition, China 
refers to a study by the European Union that c onsiders bauxite to be an economically important 
product.497    
7.312  China also submits a study that concludes th at the relative scarcity of refractory-grade 
bauxite, the conservation-related restrictions placed  on extraction of the pr oduct in China, other 
supply constraints, and the importance of the pr oduct's use to the Chinese economy, make the product 
essential to China, and the shortage of the product critical.498  China's study assesses the contribution 
of refractory-grade bauxite in terms of: the annual sales value of refractory-grade bauxite; the annual 
production value of intermediate products such as ir on, steel and cement, the production of which is 
facilitated by refractory-grade bauxite; and the va lue-added contribution to the Chinese economy from 
manufacturing and construction activities th at depend on iron, steel, and cement.499  
7.313  China argues that refractory-grade bauxite is furt her demonstrated to be essential by the fact 
that it is indispensable for the production of iron and steel, as well as of other products such as glass, 
ceramics, and cement.500  China submits that approximately 70% of China's refractory-grade bauxite 
is consumed by its iron and steel industry (as part  of the steel manufacturing process), which produces 
over three times that of the next largest steel producing country, and accounts for over one-third of 
global steel production.501  China argues that it has a "more pressi ng" need for steel-making materials, 
like refractory-grade bauxite, than other countries.502   
                                                      
495 China's first written submission, paras. 435-436, re ferring to U.S. NRC Critical Materials Study, p. 
32 (Exhibit CHN-77). 
496 China's first written submission, paras. 437-439, fn. 639, referring to U.S. NRC Critical Materials 
Study, p. 11 (Exhibit CHN-77). 
497 China's first written submission, para. 440-441, referring to European Commission, DG Enterprise 
and Industry, Report of the Ad-Hoc Working Group on Defining Critical Raw Materials (June 2010), p. 7 
(Exhibit CHN-126); see also European Commission, DG Enterprise and Industry, Report of the Ad-Hoc 
Working Group on Defining Critical Raw Materials (June 2010), p. 24 (Exhibit CHN-126). 
498 China's first written submission, paras. 443-446 , referring to Report by China on Refractory 
Bauxite, p. 37 (Exhibit CHN-10).  China argues that the its Report on Refractory Bauxite is modelled on the 
methodology used in criticality assessments undertaken by the United States and European Union:  China's 
second written submission, para. 123. 
499 Report by China on Refractory Bauxite, p. 20, based on data provided by MIIT and the China Non-
Metallic Minerals Industry Association (Exhibit CHN-10). 
500 China's first written submission, paras. 431-4 34.  China argues that the unique refractory 
characteristics of refractory-grade baux ite "enable it to maintain performan ce at extremely high temperatures – a 
property deriving from its purity level and alumina co ntent", thus making it "particularly suited to make 
refractory bricks, blocks, and tiles for use in blast furn aces, troughs, and ladles used to produce and handle 
molten iron".  Report by China on Refractory Bauxite, pp. 6 and 7, Table 2 (Exhibit CHN-10); see also China's 
second written submission, para. 132. 
501 China's first written submission, para. 447, referr ing to Report by China on Refractory Bauxite, p. 
21, Table 5 (Exhibit CHN-10).  In 2008, domestic consumption of crude steel was 500 million metric tonnes, or 
38% of global steel output.  2009 Blueprint for the Adjustment and Revitalization of the Steel Industry, Section 
I (Exhibit CHN-258); see Exhibit JE-30, p. 13; C.E. Semler, "Refractories", p. 1471 (Exhibit CHN-257); see 
also China's second written submission, para. 133. 
502 China's first written submission, para. 449-450, referring to the Report by China on Refractory 
Bauxite, p. 22 (Exhibit CHN-10).  China notes the compla inants' description of steel as "essential to everyday 
life", "an indispensable material in almost every product we use today", "a universal building material", "an 
ideal material to help meet [the] growing need" for new housing units in developing countries, "critical in the 
energy sector", and "a vital material for transport syst ems". China's first written submission, para. 450, referring 
to Exhibit JE-30, pp. 15 to 17; Report by China on Refractory Bauxite, p. 24, table 5 (Exhibit CHN-10).  See 
also World Bank, Global Economic Prospects: Commodities at the Crossroads 2009, p. 69 (Exhibit CHN-260); WT/DS394/R 
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  7.314  In addition, China argues that refractory-grade ba uxite is essential due to the fact that its use 
in the steel industry contributes to the developmen t of China and "contributes to the creation of 
considerable economic activity in the manufacturing and construction sectors."
503  China argues that 
its effective development requires a stable supply of the basic raw materials, including refractory-
grade bauxite, needed to ensure produc tion.  Development gains, it argues504, are due in part to the 
conscious choice to develop value-added trade, diversify production and exports, and promote a 
higher value-added domestic industry.505  China submits that its iron and steel industry itself now 
employs over 3 million people506 and the total contribution of refractory-grade bauxite to the value 
chain encompassing the immediate sales value of th e product represents "half of China's [gross 
domestic product]".507  China further highlights the contribution of refractory-grade bauxite to 
education, healthcare, infrastructure, technolog ical progress, and scientific research in China.508 
7.315  Finally, China argues that refractory-grade baux ite should be considered essential due to its 
"unique chemical and physical properties"509, and due to the fact that  cost-effective substitutes are not 
"readily available".510 China refers to a report by the Eur opean Commission, stating "[r]efractory 
[b]auxite cannot be substituted, as the mineral composition creates specific properties which cannot 
be reached with other raw materials".511  In addition, China argues th at its bauxite reserves "are 
principally of high quality refractory-grade bauxite", wh ile the majority of deposits in the rest of the 
world are "metallurgical-grade" (containing "insufficient amounts of aluminium oxide ('Al 2O3'), along 
with unacceptably high leve ls of iron oxide ('Fe 2O3')").  China argues that this form of bauxite is 
insufficient for use as a refractory-grade product, and thus is not a substitute.512  China considers the 
fact that demand for refractory-grade bauxite has been so strong in international markets over the 
previous 10 years supports the conclusion that viable substitutes are not realistically available.513 
7.316  The complainants argue that China has not explained why, in order to establish that 
refractory-grade bauxite is essential to a Member, that it is sufficient to demonstrate that the material 
                                                                                                                                                                     
2009 Blueprint for the Adjustment and Revitalization of the Steel Industry, Section I (Exhibit CHN-258); 
Exhibits JE-19, JE-20, JE-30, and JE-35.  Sinosteel Corporation, 2008 Sustainability Report, p. 27 (Exhibit 
CHN-261); Charity work of Bosai Group (Exhibit C HN-262); Ansteel – Sustainability (Exhibit CHN-263); 
Baosteel Group Corporation, 2008 Corporate Social Re sponsibility Report, pp. 14, 19 to 22 (Exhibit CHN-381); 
Exhibit JE-30, p. 12; Exhibit JE-30, pp. 12, 13. 
503 China's second written submission, para. 134. 
504 China's first written submission, para. 456-459, referring to the Guidelines of th e Eleventh Five- 
Year Plan for National Econo mic and Social Development , p. 6 (Exhibit CHN-144); Exhibit JE-8, p. 13; Table 
9.35; China Statistical Yearbo ok 2009 (Exhibit CHN-265). 
505 Exhibit CHN-144:  Guidelines of the Eleventh Five- Year Plan for National Economic and Social 
Development , p. 41;  Exhibit JE-8, p. 17. 
506 China's first written submission, para. 456, referring to Exhibit CHN-264: Table 13.2 China 
Statistical Y earbook 2009. 
507 China's second written submission, para. 134. 
508 China's second written submission, para. 136. 
509 China's second written submission, para. 130. 
510 China's second written submission, para. 131. 
511 China's first written submission, para. 448, referr ing to Report by China on Refractory Bauxite, p. 
22 (Exhibit CHN-10); European Commission, DG Enterprise and Industry, Report of the Ad-Hoc Working 
Group on Defining Critical Raw Materials (June 2010), p. 20 (Exhibit CHN-126). 
512 China's first written submission, para. 432, referring to Report by China on Refractory Bauxite, pp. 
3-9, 32-33 (Exhibit CHN-10); description of the essential features of different forms of bauxite in Industrial 
Minerals & Rocks, p. 227 (Exhibit JE-23); European Commission, DG Enterprise and Industry, Report of the 
Ad-Hoc Working Group on Defining Critical Raw Materials (June 2010), Annex V, pp. 19 (Exhibit CHN-126); 
Exhibit JE-28, p. 10.8 (Table 7). 
513 China's opening oral statement at the second substantive meeting, para. 96; referring to Exhibit 
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  is indispensable for the production of iron and steel, or  other products.  They argue that this line of 
reasoning  would appear to suggest that "any input into large-scale industrial  operations would qualify 
as an essential product under Article XI:2(a)".  They  argue that China similarly does not explain why 
the "need to ensure a 'stable suppl y' of the basic inputs for manufacturing" would determine whether a 
product is essential to the exporting Member.  Under th is view, they argue, any country "seeking to 
grow a particular industry" could deem an inpu t for that product to be an "essential product".
514 
7.317  The United States and Mexico additionally asser t that refractory-grade bauxite is not 
"essential" to China due to the availability of "a num ber of substitutes for [refractory-grade bauxite] in 
the production of refractories for steel production", as set out in Exhibit JE-165.515 
7.318  Finally, the complainants reject the methodolog y employed by the "criticality" assessments of 
the United States and the European Union as relevant to address the requirements of Article XI:2(a).
516 
Whether a "critical shortage" of refr actory-grade bauxite exists in China 
7.319  China maintains that its export quota on refract ory-grade bauxite forms part of a conservation 
plan aimed at extending the reserves of refractory-grade bauxite, but argues that the temporary application of those export restrictions is designed also to prevent and relieve the elements of the 
critical shortage caused by factors other than the products' availability.
517  China submits that the 
application of the export quota serves to relieve th e critical shortage by reserving sufficient supply to 
satisfy domestic demand, and avoids  a more pronounced critical shor tage. Through determination of a 
quota fixed at approximately 40% of domestic pro duction, China submits that its export quota on 
refractory-grade bauxite is "structured"  to prevent or relieve the shortage.518 
7.320  China argues that a "critical shortage" is demons trated in light of the importance in use of a 
particular product in light of its future suppl y, based on geological and physical availability, 
conservation and regulatory measures that affect extraction and processing, the development and use 
of technology, the availability of affordable s ubstitutes, and domestic and international demand for 
refractory-grade bauxite.   
7.321  China argues that the criticality assessments (see paragraph 7.311 above) are useful in 
assessing the criticality of a mineral, or a shortage.  The more essential or important in use a product, 
China argues, and the greater the supply constraints, the more likely it is that a shortage will have 
critical implications for an economy.519  China argues that studies by the United States National 
Resource Council and the European Union compare the importance in use and impact of supply 
restriction with the availability and supply risk, and take into account several factors, including 
geological, technical, environmental, so cial, economic, and political availability.520  China argues that 
                                                      
514 Complainants' joint opening oral statement at the first substantive meeting, para. 134. 
515 United States' second written subm ission, paras. 221-228; Mexi co's second written submission, 
paras. 226-233. 
516 Complainants' joint opening oral statement at the first substantive meeting, para. 132. 
517 China's second written submission, para. 141. 
518 China's second written submission, paras. 145-147. 
519 China's first written submission, paras. 462-463. 
520 China's first written submission, para. 465; referr ing to U.S. NRC Critical Materials Study, pp. 6, 
32, 33 (Exhibit CHN-77); China's fi rst written submission, paras. 466; referring to European Commission, DG 
Enterprise and Industry, Report of the Ad-Hoc Working Group on Defining Critical Raw Materials (June 2010), 
pp. 14 to 21, 24 to 31 (Exhibit CHN-126). WT/DS394/R 
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  its study (see paragraph 7.312 above) relies on similar factors in an assessment  of the criticality of 
refractory-grade bauxite.
521 
7.322  China maintains that refractory- grade bauxite is an exhaustible  natural resource, the limited 
geological availability of which functi ons as a significant supply constraint.522  It posits that its 
reserves of refractory-grade bauxite in 2009 were estim ated at 38.8 million metric tonnes, but that that 
number "has displayed a declining trend in recent years".523  China submits that production of 
refractory-grade bauxite in China in  2009 was 2.4 million metric tonnes524, which at current reserve 
and production rates, suggests a 16-year reser ve life for China's refractory-grade bauxite.525  I n  i t s  
view, the very short remaining life span of this essential and exhaus tible natural resource 
demonstrates the occurrence or risk of a critical shortage.526   
7.323  Moreover, China argues that refractory-grade bauxite cannot be substituted.527  China argues 
that a refractory product is selected "because of th e specific combination of physical, chemical and 
thermal properties:"528  These include the capacity of refractory-grade bauxite to tolerate high 
temperatures, its acidic chemical makeup, its high resistance to abrasion, and high reheat expansion.529  
China dismisses substitutes identified by the compla inants, including brown-fused alumina, Bayer 
route calcined alumina, white fused alumina, gr aphite, silicon carbide, and zirconoium, as either 
"considerably more expensive" than refractory-grade bauxite530, or produced from material similarly 
subject to resource constraints.531  China also submits that there is  an associated cost involved with 
changing suppliers in the event of substituting a material.532 
7.324  Apart from the risk of a physical shortage, China argues that other constraints disrupt the flow 
of refractory-grade bauxite through the value chain, and are relevant to the conclusion that a critical 
shortage of refractory-grade bauxite exists.533  China refers to conservation measures that China 
adopted to manage its raw materials in a sustai nable manner, including extraction and production caps 
                                                      
521 China's first written submission, para. 467; China's opening oral statement at the second substantive 
meeting, para. 151. 
522 China's first written submission, para. 469; referring to Exhibit JE-23, p. 242.  See also Exhibit JE-
23, p. 227:  "premium-grade bauxite ores suitable for us e in these special niche markets have, over time, been 
limited to a few principal sources, such as China a nd Guyana"; European Commission, DG Enterprise and 
Industry, Report of the Ad-Hoc Working Group on Defining Critical Raw Materials (June 2010), pp. 19 and 20 
("The major production of refractory grade bauxite takes place in China w ith a large number of producers.") 
(Exhibit CHN-126). 
523 China's first written submission, para. 472; Repor t by China on Refractory Bauxite, p. 34 (Exhibit 
CHN-10). 
524 Analysis and Recommendation Report on the 2010 Controlling Quota of Total Extraction Quantity 
of High-Alumina Bauxite and Fluorspar (Exhibit CHN-86);  see also Report by China on Refractory Bauxite, p. 
34 (Exhibit CHN-10). 
525 Report by China on Refractory Bauxite, p. 34, (Exhibit CHN-10). 
526 Exhibit CHN-79:  China's Policy on Mineral Resources, p. 4. 
527 China's first written submission, para. 471, refe rring to European Commission, DG Enterprise and 
Industry, Report of the Ad-Hoc Working Group on Defining Critical Raw Materials (June 2010), p. 20 (Exhibit 
CHN-126).  See also Exhibit JE-136. 
528 China's opening oral statement at the second substantive meeting, para. 134, Report by China on 
Refractory Bauxite, pp. 8, 30 (Exhibit CHN-10). 
529 China's opening oral statem ent at the second substantive meeting, paras. 135-140. 
530 China's opening oral statemen t at the second substantive meeting, paras. 143-144, 146. 
531 China's opening oral stat ement at the second substantive meeting, para. 143. 
532 China's opening oral stat ement at the second substantive meeting, para. 148. 
533 China's first written submission, para. 475, referring to D. Shields and S. S ǒlar, "Debating the 
concept of resource scarcity: physical versus socioeconomic" (Exhibit CHN-274); Report by China on 
Refractory Bauxite, pp. 35 and 36 (Exhibit CHN-10).  WT/DS394/R 
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  for refractory-grade bauxite, that affect availability.
534  For instance, China asserts that the total 
amount of refractory-grade bauxite that can be ex tracted in 2010 is limited to 4.5 million metric 
tonnes.535   
7.325  China contends that it imposes a "stringent set of requirements" on mines wishing to extract 
refractory-grade bauxite, and on industries that pro cess it, which have resulted in a critical shortage.  
These include the following: a licence requirement; waste and pollution controls; labour, health and 
safety requirements; entrance requirements relating to "scale, technology, energy conservation, 
reducing consumption and environmental protection,  and eliminating backward production capacity"; 
environmental impact assessment; a mining rights user fee, a mineral resources tax; a compensation 
fee, and pollutant discharge fees.536  China states that it is in the process of closing unsafe or polluting 
mines, and encouraging consolidation in the industry. 
7.326  China argues that significant barriers exist that have created a critical shortage of refractory-
grade bauxite.  China alleges that barriers include the availability and maintenance of infrastructure; 
considerable investments that are needed to  enter the mineral extractive and processing sector537; and 
local or regional communities' acceptance of mining activity.538 
7.327  Finally, China submits that export restrictions on ferrous scrap539, high domestic demand540 
and international demand for refractory-grade bauxite541, and the lack of available refractory-grade 
bauxite with refractory characteristics outside China, contribute to a critical shortage of bauxite.542 
                                                      
534 China's first written submissi on, para. 475, referring to China's Policy on Mineral Resources  
(Exhibit CHN-79) Program of Action for Sustainable Development in China  (Exhibit CHN-82); 2010 Quota on 
Extraction of High-alumina Bauxite Ores and Fluorspar Ores (Exhibit CHN-97); 2010 Quota of High-alumina 
refractory-grade bauxite and fluorspar, Preamble (Exhibit CHN-98). 
535 Exhibit CHN-97:  2010 Quota on Extraction of High-alumina Bauxite Ores and Fluorspar Ores , 
Article I; 2010 Quota of High-alumina refractory-grade bauxite and fluorspar, Article I (Exhibit CHN-98). 
536 China's first written submission, paras. 480-482 , fns. 713-723; Exhibits CHN-93; CHN-78; CHN-
258; CHN-275; CHN-96; CHN-87; CHN-276; CHN-277; CHN-89; CHN-92; CHN-91; CHN-278; CHN-279; 
CHN-95. 
537 China's first written submission, para. 483, referr ing to Report by China on Refractory Bauxite, p. 
36 (Exhibit CHN-10); A. Burke, 'Battle of the bauxite s' Industrial Minerals (July 2005), p. 32 (Exhibit 
CHN-280). 
538 China's first written submission, para. 484, refe rring to World Bank and International Financial 
Corporation, Large Mines and Local Communities: Forging Partnerships, Building Sustainability (2002), pp. iv 
and v (Exhibit CHN-281);  Report by China on Refractory Bauxite, p. 31 (Exhibit CHN-10). 
539 China's first written submission, para. 485,; China's response to Panel question No. 10 following the 
first substantive meeting, para. 50; China's second wr itten submission, para. 141; European Commission, DG 
Enterprise and Industry, Report of the Ad-Hoc Working Group on Defining Critical Raw Materials (June 2010), 
including Annexes (Exhibit CHN-126); GATT, Multilater al Trade Negotiations, Inventory of Non-Tariff 
Measures – Addendum MTN/3B/1-5/Add.7 (18 May 1977), pp. 442.1, 525.1, 537.1, 537 .2, 548.1, 614.1, 615.1, 
615.2, 616.2, 616.7, and 618.1 (p. 2) (emphasi s added) (Exhibit CHN-168); GATT Multilateral Trade 
Negotiations, Inventory of Non-Tariff Measures – Addendum MTN/3B/1-5/Add.9 (23 August 1977), pp. 406.1 
(p. 2), 537.1, 549.1, 615.001, and 616.411 (Exhibit CHN-161); see also China's opening oral statement at the 
second substantive meeting, paras. 75, 99-109. 
540 China's first written submission, para. 491; China' s response to Panel question No. 10 following the 
first substantive meeting, para. 51; China's second writte n submission, para. 140; Report by China on Refractory 
Bauxite, p. 33 (Exhibit CHN-10); World Bank and International Financial Corporation, Large Mines and Local 
Communities: Forging Partnerships, Building Sustainability (2002) (Exhibit CHN-281); Assessment on 
Relevant Issues Regarding Continued Application of Export Quota Administration to Bauxite in 2010 (Exhibit 
CHN-283); see also China's opening or al statement at the second substa ntive meeting, paras. 75, 99-109. 
541 China's first written submission, para. 485;  China's response to Panel question No. 10 following the 
first substantive meeting, paras. 53, 109; China's s econd written submission, para. 140; Report by China on WT/DS394/R 
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  7.328  The complainants argue that China has not establis hed the existence of a "critical shortage" of 
refractory-grade bauxite in China.  The United Stat es argues that China does not provide evidence of 
how these alleged supply constraints in fact limit the supply of refractory-grade bauxite.  The United 
States argues that evidence, including production of refractory materials and steel and expansion of 
exports of these materials, suggests that supply constr aints are not a factor and that a critical shortage 
does not exist.
543 
7.329  The United States additionally contests China's arguments that substitutes do not exist for 
refractory-grade bauxite.  The United States argues that  a wide variety of raw materials can be used as 
refractories in steel production; for instance, it id entifies metallurgical-grade bauxite that undergoes 
the Bayer process; non-metallurgical grade bauxite; magnesia-carbon; alumina-graphite; and zirconia-
graphite.  The United States submit s that these may even have longe r useful lives than refractories 
made directly from refractory-grade bauxite, an d offer a 0.45 per cent increase in the cost of 
producing steel.544 
7.330  In addition, the United States argues that China's estimates of worldwide reserves of 
refractory-grade bauxite are "significantly unders tated".  Based on production in 2003, the United 
States argues that reserves are actually 218 milli on tonnes, and not 39 million, as estimated by 
China.545  The United States argues that China's pr oduction capacity for non-metallurgical-grade 
bauxite suggests a much higher ratio of non-metall urgical-grade bauxite reserves to total bauxite 
reserves, suggesting that China's reserves of non- metallurgical-grade bauxite are set to last 91 
years.546 
7.331  The European Union argues that the limited lif e span of the reserves of a good does not, by 
itself, support a finding of "critical shortage" in the sense of Article XI:2(a).  As noted above, it argues 
that the exhaustion of the natural reserves of a good is not a temporary shortage that can be relieved or 
prevented with temporal measures.   
7.332  In addition, the European Union argues that production caps imposed by China to address the 
limited life span of the reserves of refractory grade bauxite cannot set off a temporal shortage that can 
be relieved or prevented with temporal measures, as  required by Article XI:2(a).  Instead, it argues, 
production caps are part of the broader probl em created by the exhaustibility of a good.547   
                                                                                                                                                                     
Refractory Bauxite, pp. 5 (Exhibit CHN-10); Analysis and Recommendation Report on the 2010 Controlling 
Quota of Total Extraction Quantity of High-Alumina Bauxite and Fluorspar, issued by the Department of 
Minerals Exploitation Administration of the Ministry of Land and Resources on 24 March 2010 (Exhibit CHN-
86); GATT Multilateral Trade Negotiations, Inventor y of Non-Tariff Measures – Addendum MTN/3B/1-
5/Add.9 (23 August 1977) (Exhibit CHN-161);GATT, Mul tilateral Trade Negotiations, Inventory of Non-Tariff 
Measures – Addendum MTN/3B/1-5/Add.7 (18 May 1977) (Exhibit CHN-168); Assessment on Relevant Issues 
Regarding Continued Application of Export Quota Administration to Bauxite in 2010 (Exhibit CHN-283); see 
also China's opening oral statement at the se cond substantive meeting, paras. 75, 99-109. 
542 China's first written submission, para. 486; China' s response to Panel question No. 10 following the 
first substantive meeting, para. 109; China's second written submission, para. 140; Report by China on 
Refractory Bauxite, p. 10 (Exhibit CHN-10 ). A. Burke, 'Battle of the bauxites' Industrial Minerals (July 2005), 
p. 32 (Exhibit CHN-280);  Industrial Minerals, 'Guyana's bauxite boost' Industrial Minerals (21 September 
1999) (Exhibit CHN-482); see also China's opening oral statement at the second substantive meeting, paras. 75, 
99-109. 
543 United States' second written submission, para. 239,  referring to Exhibit JE-165, p. 26, figure 12. 
544 United States' second written subm ission, paras. 221-228, referrin g to Bauxite Report, pp. 3-31 
(Exhibit JE-165). 
545 Exhibit JE-165, p. 23. 
546 United States' second written submission, pa ras. 235, 237, Exhibit JE-165, p. 23. 
547 European Union's second written submission, paras. 208-209.  WT/DS394/R 
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  7.333  Finally, the European Union argues that potential technological and social risks and  
environmental and other regulations  referred to by China do not show that China lacks the technology 
to produce refractory-grade bauxite, or that there ha s been social unrest as alleged by China that has 
reduced the production of the good.  Nor does the Eur opean Union consider ther e is evidence that any 
type of shortage results from the Chinese mining companies' compliance with China's regulatory 
framework.
548   
7.334  For the above reasons, the complainants argue th at China has failed to establish the existence 
of a critical shortage of refractory-grade bauxite su ch that it is entitled to take measures pursuant to 
Article XI:2(a).  The complainants also argue th at China's reliance on "criticality assessments" by the 
United States and the European Union does not addr ess the specific requirements of Article XI:2(a), 
but "analyze certain products and their role in th e economies of the United States and the European 
Union".  They argue that China provides no evidence  that these assessments set out "standard criteria" 
for whether a product is "essential" within the meaning of Article XI:2(a).549 
Whether the export quota applied to ba uxite is applied on a temporary basis 
7.335  China argues that the export quota applied to  refractory-grade bauxite is applied on a 
temporary basis.  As demonstrated by the fact th at MOFCOM determines the quota on an annual basis 
through publication of the Export License Catalogue , and because China publishes biannually notices 
announcing the specific bidding rules for each batch of bauxite.550  China considers that the 
application of an export quota on an annual basis en sures that the period of application is "firmly 
bounded", and enables the exporting Member to se t out the reasons that "warrant the renewed 
application of the export restriction".551 
7.336  In addition, China submits a methodology paper by MOFCOM (Exhibit CHN-283) 
explaining the factors informing the decision to impose an export quota in 2010, and the amount of exports to be authorized under the quota (930,000 metric tonnes).
552  China considers therefore that its 
measures are temporarily applied for the durati on needed to achieve the goals set out in 
Article XI:2(a).  China claims to find support for th is approach in examples of the application of 
prohibitions and restrictions maintained by the United States and the European Union.553 
7.337  The complainants maintain that China has fa iled to demonstrate that its export quota on 
refractory-grade bauxite is "temporarily applied".  The United States notes that there is no evidence that the export quota is applied only so long as n ecessary to prevent or relieve a critical shortage.  
Thus, the complainants consider the qu ota is not appropriately limited in time.
554     
                                                      
548 European Union's second written submission, para. 210. 
549 Complainants' joint opening oral statement at the first substantive meeting, para. 137; United States' 
second written submission, para. 217; Mexi co's second written submission, para. 222. 
550 China's first written submission , paras. 490-491, referring to 2010 Export Licensing Catalogue 
(Exhibit CHN-7); 2010 Export Quota (Exhibit CHN-8); 2010 First-Batch Export Quota Bidding of Bauxite 
(Exhibit CHN-284). 
551 China's opening oral statem ent at the second substantive meeting, paras. 78-79. 
552 China's first written submission, para. 491, referring to Assessment on Relevant Issues Regarding 
Continued Application of Export Quota Administration to Bauxite in 2010 (Exhibit CHN-283). 
553 China's first written submission, para. 492. 
554 Complainants' joint opening oral statement at the first substantive meeting, para. 147; United States' 
second written submission, para. 241; Mexi co's second written submission, para. 246. WT/DS394/R 
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  (ii) The Panel's assessment of the situation in China 
7.338  China has identified a range of quantitative and qualitative factors, including what it describes 
as "geological, technical, environmental, social, economic, and political factors", in seeking to 
demonstrate that the export quota that it applies to refractory-grade bauxite is temporarily applied to 
prevent or relieve a critical shortage of an essential product to China, and accordingly, its export quota 
is justified pursuant to Article XI:2(a).   
7.339  The Panel recalls that Article XI:2(a) permits the application of temporary restrictions or 
prohibitions on a limited basis to address "critical s hortages" of "essential pr oducts".  The Panel found 
that a product may be "essential" within the meanin g of Article XI:2(a) when it is "important" or 
"necessary" or "indispensable" to a particular Member .  This may include a product that is an "input" 
to an important product or industry, taking into c onsideration the particular circumstances faced by 
that Member.  In addition, the Panel found that the te rm "critical shortage" in Article XI:2(a) refers to 
those situations or events that are "of decisive importa nce" or "grave", or rise to the level of a "crisis" 
or catastrophe that may be relieved or prevented through the application of measures on a temporary, 
and not an indefinite or permanent, basis.   
7.340  On the basis of evidence submitted by China, the Panel is persuaded that refractory-grade 
bauxite is currently "essential" to China, as that term is used in Article XI:2(a).  In particular, China 
has presented evidence that demonstrates the importan ce of the use of refractory-grade bauxite as an 
intermediate product in the production of iron and steel (in the sense that bauxite is used in the 
manufacture of kilns, which are themselves u sed in the production of steel, for instance
555), as well as 
other important products to Chin a's domestic and export markets.  As China explains, and the 
complainants do not dispute, China is the leadi ng producer of steel in the world by a significant 
margin.  China submits it produces more than th ree times that of the next largest steel producing 
country, and represents more than one third of worldwide steel production; this is also not 
contested.556  China's steel industry is a primary user  of refractory-grade bauxite;  in fact, the 
complainants recognize that 70% of refractory-grad e bauxite is consumed by China's iron and steel 
industries.557  In addition, it is not disputed that iron a nd steel are themselves important products in the 
manufacturing and construction industr ies, two fundamental sectors that drive China's industry and 
development.  Moreover, China' s steel industry represents a significant source of employment.558   
7.341  In coming to this conclusion, the Panel was mindf ul of the parties' arguments on the question 
of substitutability of refractory- grade bauxite.  The complainants initially asserted that China's 
allegations on the essentialness of refractory-grade ba uxite, and whether a "critical shortage" exists, 
are undermined by the fact that readily availabl e and reasonably available substitutes exist.  The 
complainants identify several substitu tes.  In response in its oral st atement at the second substantive 
meeting of the parties, China explained that these materials should not be considered as substitutes, 
either because of the cost to purchase them559, or due to constraints on their availability.560   
                                                      
555 See Report by China on Refractory Bauxite, pp. 6, 7 (Exhibit CHN-10). 
556 Report by China on Refractory Bauxite, p. 21, Table 5 (Exhibit CHN-10); 2009 Blueprint for the 
Adjustment and Revitalization of the Steel Industry, S ection I (Exhibit CHN-258); see Exhibit JE-30, p. 13; 
C.E. Semler, "Refractories", p. 1471 (Exhibit CHN-257). 
557 See Exhibit JE-165, p. 9. 
558 China's first written submission, para. 456, referring to Exhibit CHN-264: Table 13.2 China 
Statistical Y earbook 2009. 
559 China's opening oral statement at the second substantive meeting, paras. 143-144, 146, discussing 
Bayer-route calcined alumina, white fused alumin a, graphite, silicon carbide and zirconium). 
560 China's opening oral statement at the second substantive meeting, para. 143, discussing brown-fused 
alumina.  WT/DS394/R 
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  7.342  The complainants did not respond to these points. However, in Exhibit JE-165, the 
complainants acknowledged higher costs in choos ing alternatives to refractory-grade bauxite
561, albeit 
at levels lower than those claimed by China.  The complainants submit th at in any event increased 
prices of alternative materials are offset by the incr eased lifespan or performance of those alternatives.   
7.343  In the Panel's view, data submitted by both par ties demonstrate the complexity in determining 
the availability of a substitute.  Both parties agree that price would factor into a decision (including 
the cost of switching to a substitute).  The prope rties of the materials as well as the particular 
application of that material would also fact or into an assessment of substitutability.   
7.344  Even assuming conditions arose that would redu ce the cost of substituting refractory-grade 
bauxite for an alternative, this would not persuade the Panel to a lter its conclusion that refractory-
grade bauxite is an "essential" product to China.  The inherent complexity in assessing substitutability 
reveals that switching from one material to the next , and potentially, from one supplier to the next, is 
not an easy decision.562  Regardless, given the evidence of its significant use in various sectors, it is 
foreseeable that refractory-grade bauxite would cont inue as an important intermediary product to the 
production of steel and would continue to serve as an important driver for the Chinese economy.   
7.345  Before proceeding, the Panel expresses its vi ew that the mere designation of a product as 
essential or the imposition of conservation-related r estrictions imposed on extraction or processing 
should not be relevant to the assessment of whet her a product is "essential" to a Member. A Member 
exercises its own discretion on whether to impose cond itions that affect the availability of a product. 
The conservation-related measures presumably are put  in place because they are necessary to protect 
an essential product; they should not in and of them selves support the conclusion that a product is in 
fact essential. Therefore, the Panel considers that th ese factors should not be taken into consideration. 
Moreover, the systemic implications of deciding " essentialness" based on either the presence or lack 
of regulatory measures is problematic; it would a llow a Member to manufacture "essentialness" when 
none exists.  The Panel wishes to make  clear that it is not in any way suggesting that this is the case 
here.   
7.346  The Panel does not consider China's application of the measure to be "temporarily applied" 
within the meaning of Article XI:2(a) to justif y its imposition under that provision as a measure to 
either prevent or relieve a "critical shortage". 
7.347  The Panel recalls that a "shortage" refers to  a deficiency in the quantity of goods.  The 
product's importance in use, though relevant in an assessment of whether a product is "essential" to a 
Member, and perhaps indicative of future demand fo r a product, does not inform whether a shortage 
currently exists.  China argues that the "supply" of refractory-grade bauxite is affected by the 
following: (i) the remaining reserve lifespan of refra ctory-grade bauxite; (ii) lack of availability of 
refractory-grade bauxite in China and abroad; (iii) lack of cost-affordable substitutes for refractory-
                                                      
561 In his "Report on Refractory Bauxite", Dr. Eugene Thiers states generally: "Some refractory 
products have a higher costs, but offering [sic] superior performance and a longer useful life" (p.28).  Dr. Thiers 
specifically compares the cost of re fractory bauxite on 20 September 2010 (which he contends costs between 
$405/metric tonne to $535/metric tonne) with the price of brown-fused alumina on that date (which he contends 
to cost between $620/metric tonne and $630/metric tonne).  He estimates, assuming the lowest price for 
refractory bauxite and the highest price for brown fused alumina, that it would cost Chinese refractory producers 
$270 million, or 0.0006% of China's gross domestic product.  He estimates an increase in production cost to 
Chinese steel producers of 0.45% (pp. 35-36).  China's response to Dr Thiers' assertions are reflected in 
paragraphs 143 to 147 of China's oral statement at the second substantive meeting of the Panel. 
562 See China's opening statement at the second substantive meeting, para. 148, referring to European 
Commission Directorate-General for Trade, Raw materials policy 2009 annual report , p. 11 (Exhibit CHN-
511). WT/DS394/R 
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  grade bauxite; (iv) restriction arising from other barriers, including conservation, licence, health, 
safety, environmental and other regul atory measures; (v) fees and taxes; (vi) investment barriers; and 
(vii) resistance to mining activities at local and community levels.   
7.348  China has had an export quota in place on expor ts of bauxite classifiable under HS No. 
2508.3000 dating back to at least 2000.
563  China's estimation of a 16-year reserve for bauxite suggests 
that China intends to maintain its measure in place until the exhaustion of remaining reserves (in 
keeping with its contention that it needs to rest rain consumption), or until new technology or 
conditions lessen demand for refractor y-grade bauxite.  In line with th is, China has explained that its 
export quota on refractory-grade bauxite forms part of a conservation plan aimed at extending the 
reserves of refractory-grade bauxite, which is app lied temporarily to relieve the critical shortage 
caused by factors other than the product's availability.564 
7.349  The Panel explained above that if Article XI:2 (a) were interpreted to  permit the long-term 
application of conservation measures, Article XX(g ) would lose its meaning.  Moreover, the Panel 
observed that the permissibility of the menti on of imposing long-term measures related to 
conservation purposes under Article XX(g) is tempered by the requirement to impose measures in conjunction with restrictions on domestic consumpti on or production, and th e additional requirements 
of the chapeau to Article XX.  Article XI:2(a), by contrast, does not require a balancing between 
domestic interests and that of other Members.  Article  XI:2(a) instead imposes different restraints: that 
measures be applied "temporarily" when addr essing a domestic crisis or critical matter. 
7.350  The Panel does not consider that China's rest riction on exports of refractory-grade bauxite, 
which has already been in place fo r at least a decade with no indica tion of when it will be withdrawn 
and every indication that it will remain in place un til the reserves have been depleted, can by any 
definition be considered to be "temporarily applied"  to address a critical shortage within the meaning 
of Article XI:2(a).  On this basis, the Panel concludes that China cannot justify its export quota 
pursuant to Article XI:2(a). 
7.351  The Panel cannot agree with China that it curre ntly faces a "critical shortage" of refractory-
grade bauxite in the sense of Article XI:2(a).  Even  if the Panel were to accept China's claim of a 16-
year remaining reserve lifespan for refractory-grad e bauxite, in the Panel's view, this would not 
demonstrate a situation "of decisive importance" or one that is "grave", rising to the level of a "crisis".  
As noted above, measures under Article XI:2(a) are to  be "temporarily applied" to address a "critical 
shortage"; a measure destined to be in place permanen tly – i.e., for the full 16 years until its object has 
disappeared – seems to suggest it is addressing somethi ng other than a "critical shortage", as that term 
is used in Article XI:2(a).  Moreover, while Ch ina has submitted evidence of  the vital nature of 
bauxite to its economy, it is not clear to the Panel that lifespan reserve estimat es could not change due 
to advances in reserve detection or extraction tec hniques, or that additional capacity could not come 
online within the ensuing 16-years that would a lleviate or eliminate China's concerns about 
availability of refractory-grade bauxite over the long  term.  Moreover, the complainants dispute the 
accuracy of China's estimate, instead alleging that refractory-grade bauxite has a remaining lifespan of 
91 years.
565  China contests the complainants' estim ation of a 91-year remaining lifespan.566 
                                                      
563 China provided evidence of an export quota on Customs Commodity Code 2508.3000, containing 
refractory-grade bauxite, in place sin ce 2006: see China's res ponse to Panel question No. 5 following the first 
substantive meeting, para 27; Exhibit CHN-440.  The complainants submit evidence of an export quota in place 
of products in this Customs Commodity Code since 2000: see Exhibit JE-165, referring to The Economics of 
Bauxite & Alumina, p. 359 (8th ed. 2008). 
564 China's second written submission, para. 141. 
565 United States' second written submission, pa ras. 235, 237, Exhibit JE-165, p. 23. 
566 China's opening oral statem ent at the second substantive meeting, paras. 116-124.  WT/DS394/R 
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  7.352  The Panel rejects the argument that regulat ory environmental or conservation-related 
restrictions imposed by China on the extraction or processing of a product in China should be taken into consideration when assessing whether a "critical shortage" of a product exists.  These include the 
imposition of production caps, or licence, health , safety, environmental and other regulatory 
measures, and fees and taxes.  As discussed in para graph 7.345 above in respect of the essentialness 
of a product, accepting this view would be probl ematic, as it would allow a Member to claim the 
existence of a critical shortage when objectively no ne exists.  In addition, China has not provided 
specific evidence that there are barriers to inv estment or that local or regional communities' 
disapproval has disrupted the availability of refractory-grade bauxite.
567 
7.353  For the foregoing reasons, the Panel concludes that  China has failed to demonstrate that the 
export quota applied to refractory-grade bauxite is justified pursuant to Article XI:2(a) of the 
GATT 1994. 
(c) Summary 
7.354  Article XI:2(a) permits the application of restri ctions or prohibitions "temporarily" to address 
"critical shortages" of "essential products".  The Panel concluded that a product may be "essential" 
within the meaning of Article XI:2(a) when it is "important" or "necessary" or "indispensable" to a 
particular Member.  This may include a product that is an input to an important product or industry.  
The determination of whether a particular product is "essential" to a Member must take into consideration the particular circumstances faced by that Member at the time in which a Member seeks 
to justify a restriction or prohibition under Article XI :2(a).  The Panel concluded that the term "critical 
shortage" in Article XI:2(a) refers to situations or  events that are grave or provoking crises and which 
can be relieved or prevented through the appli cation of measures on a "temporary", and not an 
indefinite or permanent, basis. 
7.355  Bearing these conclusions in mind, the Panel concludes that refractory-grade bauxite is 
"essential" to China. However, the Panel finds that China has not demonstrated that its export quota 
on refractory-grade bauxite is "temporarily applied" within the meaning of Article XI:2(a) to either 
prevent or relieve a "critical shortage". 
2. Whether the export duties and export quota s applied to refractory-grade bauxite and 
fluorspar are justified pursuant to Article XX(g) of the GATT 1994 
7.356  China's defence of its export restrictions on re fractory-grade bauxite and fluorspar is based on 
Article XX(g). China's argument is that refractory- grade bauxite and fluorspar  are exhaustible natural 
resources; they are scarce, are not easily substitutable,  and thus need to be managed and protected.  
China also insisted that nothing should interfere with their sovereignty over such natural resources.
568 
                                                      
567 China has referred generally to investments that  are needed to operate a mineral extractive and 
processing center, and resistance to mining that may arise at the local, regional or national levels; however, the 
evidence is general in nature: see China's first wr itten submission, paras. 483-484; Report by China on 
Refractory Bauxite, p. 36 (Exhibit CHN-10); World Bank and International Financial Corporation, Large Mines 
and Local Communities: Forging Partnerships, Building Su stainability (2002), pp. iv and v (Exhibit CHN-281). 
568 China's first written submission, para. 126.  See also GATT Multilateral Trade Negotiations, Group 
"Framework", Statement by the Delegation of India  MTN/FR/W/23 (6 April 1979).  Other WTO Members, such 
as Mexico and the European Union, have also stressed the importance of the principle of permanent sovereignty 
over natural resources. Also Exhibit CHN-50:  GATT Trade Negotiations  Committee, Proceedings of the 
Session Held in the International Labour Office, Geneva, 11 and 12 April 1979  MTN/P/5 (9 July 1979), pp. 83-
84;  Exhibit CHN-53:  Protocol for the Accession of Mexico to the General Agreement on Tariffs and Trade 
L/6036 (14 August 1986);  Exhibit CHN-54:  GATT, Negotiating Group on Natural Resource-Based Products, 
Communication from the European Communities  MTN.GNG/NG.3/W/11 (12 February 1988), para. 7.  Exhibit WT/DS394/R 
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  Further, China referred to the need for developing  countries to make optimum use of their resources 
for their development, as they deem appropriate, in cluding the processing of their raw material.  The 
complainants argue that the objective and operation of China's export regime cannot benefit from the 
flexibilities of Article XX and, moreover, that Chin a cannot invoke Article XX(g) to justify export 
duties contrary to its Accession Protocol.
569   
7.357  As explained above, the Panel will now exam ine China's defence following the order of 
analysis used by China in its rebuttal. The Pane l will discuss China's arguments and evidence relating 
to its export quota on refractory-grade bauxite and,  when relevant and appropriate, it will also make 
reference to fluorspar. 
7.358  The Panel will, first, discuss generally the in terpretation of Article XX(g).  The Panel will 
then turn to analyse whether the challenged expo rt restrictions on refractory-grade bauxite and 
fluorspar may be justified under Article XX(g). In  other words, the Panel will examine whether 
China's export restrictions on these two products relate to the conservation  of an exhaustible natural 
resource and whether China's export measures are made effective  in conjunction with  domestic 
restrictions on production or consumption .  
(a) Interpretation of Article XX(g) of the GATT 1994 
7.359  A measure that is inconsistent with oblig ations in the GATT 1994 may nevertheless be 
justified under Article XX. As th e Appellate Body stated in US – Gasoline  and confirmed in Brazil – 
Retreaded Tyres,  in order to be justified under Article XX, "… the measure at issue must not only 
come under one or another of the particular ex ceptions – paragraphs (a) to (j) – listed under 
Article XX; it must also satisfy the requirements imposed by the opening clauses of Article XX.  The 
analysis is, in other words, two tiered: first, provi sional justification by reason of characterization of 
the measure under [the sub-paragraph]; second, further appraisal of the same measure under the 
introductory clauses of Article XX".570 
7.360  The various sub-paragraphs of Article XX la y out the manner in which a Member may adopt 
measures pursuing "legitimate state policies or interests".571  Article XX(g) reads as follows: 
"Subject to [requirements regarding non-discrimination and disguised restriction on 
trade] nothing in this Agreement shall be construed to prevent the adoption or 
enforcement by any contracting party of measures: 
(g) relating to the conservation of exhaus tible natural resources if such measures 
are made effective in conjunction with  restrictions on domestic production or 
consumption". 
7.361  Therefore, in order for a measure to be jus tified under Article XX(g), the measure at issue 
must: (i) "relate to the conservation of an exhaustible  natural resource", and (ii) be "made effective in 
conjunction with restrictions on domestic production or consump tion". The Panel turns now to 
consider the ordinary meaning of the words used in paragraph (g) in their context. 
                                                                                                                                                                     
CHN-51:  GATT Consultative Group of Eighteen, Thirteenth Meeting, Export Restrictions and Charges – Note 
by the Secretariat  CG/18/W/43 (10 October 1980), p. 2. 
569 See China's First written submission, paras 123- 126; China's opening oral statement at the first 
substantive meeting, paras. 26-29. 
570 Appellate Body Report, US – Gasoline , p. 22, DSR 1996:I, 3, at p. 20. 
571 Appellate Body Report, US – Gasoline , p. 17, DSR 1996:I, 3, at p. 16.  WT/DS394/R 
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  (i) "Relating to the conservation of exhaustible natural resources" 
7.362  The first legal benchmark for the consistency of  a measure with Article XX(g) is that the 
measure "relates to the conservation of exhaustible natural resources". 
7.363  In China's view, Article XX(g) includes within its scope the protection of living and non-
living  exhaustible natural resources, such as "raw materials".
572 This is not contested by the 
complainants.  China contends further that the term  "conservation" should be interpreted as the act of 
preserving and maintaining the existing state or number of something, in this case "natural resources" covered by Article XX(g).
573 China argues that Article XX(g) protects its sovereign right to adopt a 
comprehensive and sustainable mineral conservati on policy, taking into account China's social and 
economic development needs.574   
7.364  For China, Article XX(g) must be interprete d in a manner that recognizes a WTO Member's 
"sovereign rights over their own natural resources." China claims that these rights must be exercised 
in the interests of a Member's own social and economic development575, as well as in light of the 
objective of sustainable development as stated in the Preamble to the WTO Agreement. China posits 
that sustainable development requires that ec onomic development and conservation be aligned 
through the effective management of scarce reso urces, as the term "conservation" refers to the 
management of a limited supply of exhaustible natural resources over time. China considers that its 
export restraints "relate to conservation" because th ey are part and parcel of China's measures that 
manage the limited supply of refractory-grade baux ite and fluorspar, which are exhaustible natural 
resources.576 
7.365  The complainants argue that China presents as "context" for the meaning of the term 
"conservation" issues that have absolutely no relevance to the corr ect interpretation of 
Article XX(g).577 According to the complainants, the WTO Preamble cannot be used to exempt a 
WTO Member from complying with the terms of Artic le XX(g) so as to be able to discriminate in 
favour of its own domestic users of raw material s against users in any other WTO Member. The 
European Union recalls that the WTO Preamble calls  for the optimal use of the world's resources, and 
expresses the desire of WTO Members to contribut e to the objectives of the WTO by entering into 
reciprocal and mutually advantageous arrangements di rected at the substantial reduction of tariffs and 
other barriers to trade.578 
7.366  The United States and Mexico argue that China is  incorrect to argue that context confers on 
the word "conservation" the meaning that a Member 's sovereign rights over its natural resources can 
be exercised in the interests of a Member's ow n social and economic development. Article XX(g) 
does not permit WTO Members to deviate from WTO ru les in order to promote and realize their own 
self-interested economic goals.579  
7.367  The complainants also dispute China's interpretation of the principle of sovereignty over 
natural resources. They argue that this principle is  not at issue in this dispute. In their opinion, 
                                                      
572 China's first written submission, para. 101. 
573 China's first written submission, para. 107. 
574 China's first written submission, para. 97. 
575 China's first written submission, paras. 120-130. 
576 China's second written submission, paras. 184-194. 
577 European Union's second written submission, para. 240. 
578 European Union's second written submission, para. 241; United States' opening oral statement at the 
second substantive meeting, para 72. 
579 United States' second written subm ission, paras. 117-118; Mexi co's second written submission, 
paras. 121-122. WT/DS394/R 
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  Article XX(g) does not call into question this sovereign right of all WTO Members. Under 
Article XX(g), what is at issue is whether a Member has satisfied the conditions of that provision when it maintains an otherwise GATT-inconsistent measure affecting trade in its natural resources.
580   
7.368  Finally, the United States and Mexico submit that China's attempt to inco rporate into the term 
"conservation" the notion of exercising rights over natural resources "in the interests of a Member's own social and economic development" seeks to cha nge Article XX(g) into an exception based on a 
WTO Member's desire to create opportunities for gr owth for its downstream processing industries.  
For these complainants, to the extent  that the interests of a Member's downstream industry might form 
the basis for an exception to the GATT 1994 prohibition on export restraints imposed on industrial 
input materials, Article XX (i) could be invoke d so long as certain conditions were respected.
581 
However, China does not invoke Article XX (i) as a justification for its trade-restrictive measures.582 
7.369  In sum, the Panel observes that although the pa rties agree that the products (raw materials) 
covered by the present dispute are exhaustible natu ral resources, they disagree as to whether the 
challenged export restrictions "relate" to a "conser vation" programme. The Panel will move now to an 
interpretation of those terms.  
"Relate to conservation" 
7.370  The Appellate Body in US – Gasoline ruled that a measure was "relate[d] to" conservation if 
there was a substantial relationship between th e export measures and conservation, and "that a 
measure must be ' primarily aimed  at' the conservation of exhaustible natural resources in order to fall 
within the scope of Article XX(g)".583 It further added that a measure that is "merely incidentally or 
inadvertently" aimed at conservation cannot meet th e requirement of "relating to" in Article XX(g).584 
It noted that the phrase "primarily aimed at" was "not  designed as a simple litmus test for inclusion or 
exclusion from Article XX(g)".585  In US – Shrimp , the Appellate Body accepted that sub-paragraph 
(g) referred to measures "primarily aimed at" conservation;586 it also described this relationship as "a 
close and genuine relationship of ends and means"587 that requires an examination of the relationship 
between the general structure and design of a measure and the policy goal it purports to serve.588 The 
Appellate Body has explained that:   
"Article XX (g) requires that the measur e sought to be justified be one which 
"relat[es] to" the conservation of exhaus tible natural resources. In making this 
determination, the treaty interpreter essentia lly looks into the relationship between the 
measure at stake and the legitimate polic y of conserving exhaustible natural 
resources".589 
7.371  The Panel will, therefore, examine and analy se the relationship between, on the one hand, the 
930,000 metric tonnes quota on refractory-grade baux ite, and, on the other hand, 15% export duty on 
                                                      
580 European Union's second written submission, paras. 242, 245; United States' second written 
submission, para. 119; Mexico's s econd written submission, para.123. 
581 United States' second written submission, para. 1 21; Mexico's second written submission, para. 125. 
582 United States' second written submission, para. 1 25; Mexico's second written submission, para. 129. 
583 Appellate Body Report, US – Gasoline , p. 18, DSR 1996:I, 3, at p. 17 (emphasis added). 
584 Appellate Body Report, US – Gasoline , p. 19, DSR 1996:I, 3, at p. 18. 
585 Appellate Body Report, US – Gasoline , p. 19, DSR 1996:I, 3, at p. 17. 
586 Appellate Body Report, US – Shrimp , para. 136. 
587 Appellate Body Report, US – Shrimp , para. 136. 
588 Appellate Body Report, US – Shrimp , para. 137. 
589 Appellate Body Report, US – Shrimp , para. 135. 
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  fluorspar and the goal on which China claims its measures are based – the conservation  of refractory-
grade bauxite and fluorspar. 
"Conservation" 
7.372  The dictionary definition of the noun "conser vation" is "the action of keeping from harm, 
decay, loss or waste; careful preservation.  The preservation of existing conditions.... The preservation of the environment, esp. of natural resources".
590 The verb "conserve" is defined as "Keep from harm, 
decay, or loss esp. with view to later use; preserve  with care. Maintain  (energy etc.) unchanged in 
total quantity according to a conservation law".591  The noun "preservation" is defined as "The action 
or an act of preserving or protecting something; the fact of being preserved".592  To "preserve", is to 
"Keep from harm, injury; take care of, protect...keep  from decay; maintain (a state of things)".593 In 
sum, these dictionary definitions define "conserva tion" as the act of preserving and maintaining the 
existing state of something, in this case "n atural resources" covered by Article XX(g).594 
7.373  Having considered the ordinary meaning of the relevant terms of Article XX(g), we turn to 
their context. Pursuant to Article 31(2) of the Vienna Convention , which makes clear that the context 
of a treaty includes its "text, including its pr eamble and annexes", the Preamble to the WTO 
Agreement forms part of the contex t of Article XX(g). The Preamble's role as relevant context for 
interpreting Article XX(g) was c onfirmed by the Appellate Body in US – Shrimp , where it stated that 
the Preamble gives "colour, texture, and shading to  [the] interpretation of the agreements annexed to 
the WTO Agreement , in this case, the GATT 1994".595  
7.374  The Preamble recognizes that WTO Members' trade relations should: 
"…[allow] for the optimal use of the wo rld's resources in accordance with the 
objective of sustainable development , seeking both to protect and preserve the 
environment and to enhance the means for doi ng so in a manner consistent with their 
respective needs and concerns at different levels of economic development ".596  
                                                      
590 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 1, p. 492. 
591 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 1, p. 493. 
592 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 2333. 
593 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 2333. 
594 Other definitions of the term "conservation" are reflected in international agreements and 
conventions which tend to define the term "conservation" in light of the scope of the agreement or in relation to 
other obligations, meaning the act of preserving and maintaining the existing state of something in this case 
"natural resources".  For instance, the Convention on Biological Diversity defines the "conservation of 
biological diversity" as "the in situ  conservation of ecosystems and natural habitats and the maintenance and 
recovery of viable populations of species in their natural surroundings…". The Preamble to the 1940 Western 
Hemisphere Convention expressed an intention "to protec t representatives of all species and genera of their 
native flora and fauna…over areas exte nsive enough to assure them from b ecoming extinct through any agency 
within man's control". Further, the parties to the Asso ciation of South East Asian Nations (ASEAN) Agreement 
aimed to "ensur[e] the survival and promoting the conservation of all species under their jurisdiction and 
control". The 1979 Bonn Convention defines "conservation status" as "the sum of influences acting on the 
migratory species that may affect its long term distribution and abundance". 
595 Appellate Body Report, US – Shrimp , para. 153. 
596 WTO Agreement, Preamble (emphasis added). WT/DS394/R 
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  7.375  Thus, a proper reading of Article XX(g) in the context of the GATT 1994 should take into 
account the challenge of using and managing resources in a sustainable manner that ensures the protection and conservation of the environment while promoting economic development. As the 
Appellate Body explained, to do so may require "a comprehensive policy comprising a multiplicity of 
interacting measures".
597 
7.376  Pursuing multi-faceted objectives, usually invo lves making policy choices and prioritization; 
the chosen policy depends on, inter alia , the choice of particular economic policy objectives ( e.g., 
employment; income; tax etc.); social policy objectives ( e.g., education; health; etc.); and, 
environmental policy objectives (e.g ., conservation; pollution re duction; waste management; 
recycling; biodiversity preservation).  These different  policy objectives cannot be viewed in isolation; 
they are related facets of an integrated whole. Moreover, the "interacting measures"598 chosen by a 
Member will reflect and integrate these related policy goals. In choosing appropriate conservation 
measures, "WTO Members have a large measure of autonomy to determine their own policies", 
provided that they respect the requirements of, inter alia , Article XX(g).599 
7.377  In our view, the Panel must take into account  in interpreting Article XX(g) principles of 
general international law applicable to WTO Members.600 Article 31(3)(c) of the Vienna Convention 
provides that in interpreting a treaty, there shall be  taken into account together with the context "any 
relevant rules of international law applicable in the relations between the parties".     
7.378  One of the fundamental principles of international law is the principle of state sovereignty, 
denoting the equality of all states in competen ce and independence over their own territories and 
encompassing the right to make laws applicable within their own territories without intrusion from 
other sovereign states. Independent decisions can be  taken with regard to matters including the choice 
of political, economic and social systems. The principle of state sovereignty is also exercised whenever states choose to enter in to an international agreement with other sovereign states.   
7.379  This was first established by the Permanent Court of International Justice (PCIJ) in the case of 
the S.S Wimbledon (1923), where it confirmed that "the right of entering into international 
engagements is an attribute of State sovereignty".
601 This principle was further elaborated in the 
PCIJ's advisory opinion on the Exchange of Greek and Turkish Populations (1925).602 We find 
especially instructive for our purposes the PCIJ's consideration of the principle in the case on 
Jurisdiction of the European Danube Commission between  Galatz and Braila (1927), where the Court 
stated that "restrictions on the exercise of sovere ign rights accepted by treaty by the State concerned 
cannot be considered as an infringement of sovereignty".603 
7.380  An important element of the principle of state sovereignty is the principle of sovereignty over 
natural resources, recognized as a principle of international law604, and allowing states to "freely use 
and exploit their natural wealth and resources wher ever deemed desirable by them for their own 
                                                      
597 Appellate Body Report, Brazil – Retreaded Tyres,  para.151. 
598 Appellate Body Report, Brazil – Retreaded Tyres , para. 151. 
599 Appellate Body Report, US – Gasoline , p. 30, DSR 1996:I, 3, at p. 28. 
600 Panel Report, EC – Approval and Marketing of Biotech Products , para. 7.67. 
601 PCIJ, S.S Wimbledon, p.25. 
602 [1925] Publ. PCIJ , Series B, no 10, p. 21. 
603 Jurisdiction of the European Danube Commission between  Galatz and Braila , [1927] Publ. PCIJ, 
Series B, no 14, p. 36. 
604 Resolution 1803 (XVII), Permanent Sovereignty Over Natural Resources  (14 December 1962) 
(adopted by 87 votes to 2, 12 abstentions).  WT/DS394/R 
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  progress and economic development".
605 The principle of sovereignty over natural resources is 
embodied in a number of international agre ements, including in the Preamble of the Convention on 
Biological Diversity , which "[reaffirms] that States have  sovereign rights over their biological 
resources".606 
7.381  In the Panel's view, consistently with Article 31(3)(c) of the Vienna Convention , our 
interpretation of Article XX(g) should "take into account" the principle of sovereignty over natural 
resources. The principle of sovere ignty over natural resources affords Members the opportunity to use 
their natural resources to promote their own develo pment while regulating the use of these resources 
to ensure sustainable development. Conserva tion and economic development are not necessarily 
mutually exclusive policy goals; they can operate in harmony.  So too can such policy goals operate in 
harmony with WTO obligations, for Members must exercise their sovereignty over natural resources 
consistently with their WTO obligations. In the Pa nel's view, Article XX(g) has been interpreted and 
applied in a manner that respects WTO Members' sovereign rights over their own natural resources.607 
7.382  The Panel observes that the ability to enter into international agreements  such as the WTO 
Agreement  is a quintessential example of the exercise of  sovereignty. In joining the WTO, China 
                                                      
605 U.N. G.A. Resolution 626 (VII), Right to Exploit Freely Natural Wealth and Resources  (21 
December 1952). 
606 The Convention on Biological Diversity , done at Rio de Janeiro, 5 June 1992, 1760 UNTS 79; 31 
International Legal Materials. 
607 Recall for instance, that during the Toky o Round discussions on the adoption of the Understanding 
Regarding Export Restrictions and Charges , GATT contracting parties discussed the importance of the 
sovereignty of States over their natural reso urces. See GATT Multilateral Trade Negotiations, Group 
"Framework", MTN/FR/W/23.  The GATT and the WTO dispute settlement systems have dealt with several 
disputes concerned with natural resources; see for instance; US – Shrimp (Viet Nam)(DS404); US – Tuna II 
(Mexico) (DS381); US – Customs Bond Directive (DS345 and DS343 ); EC – Salmon (Norway)(DS337); US – 
Shrimp (Ecuador)(DS335); Japan – Quotas on Laver(DS323); US – Softwood Lumber VI (DS277); US – 
Softwood Lumber V (DS264); US – Softwood Lumber IV (DS257); EC – Tariff Preferences (DS246); US – 
Softwood Lumber III (DS236); EC – Sardines (DS231); Chile – Swordfish (DS193); Argentina –Hides and 
Leather (DS155); EC – Asbestos (DS135); US – Shrimp (DS58); Brazil – Desiccated Coconut (DS22); 
Australia – Salmon (DS18); EC – Scallops (Peru and Chile) (DS12 and 14); EC – Scallops (Canada) (DS7); US 
– Gasoline (DS2 and 4);  non-established panels, EC — Measures Prohibiting the Importation and Marketing of 
Seal Products (Norway)(DS401); EC — Measures Prohibiting the Importation and Marketing of Seal Products 
(Canada) (DS400);  EC — Certain Measures Prohibiting the Importation and Marketing of Seal Products 
(Canada) (DS369); EC — Definitive Safeguard Measure on Salmon (Norway) (DS328); EC — Definitive 
Safeguard Measure on Salmon (Chile) (DS326); US — Provisional Anti-Dumping Measures on Shrimp from 
Thailand (Thailand) (DS324); Indi a — Anti-Dumping Measures on Cert ain Products from the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu (DS318); US — Reviews of Countervailing Duty on 
Softwood Lumber from Ca nada (DS311); Mexico — Certain Pric ing Measures for Cu stoms Valuation and 
Other Purposes (DS298); India — Import Restrictions Maintained Under the Export and Import Policy 2002-
2007(DS279); US— Provisional Anti-Dumping Measure on Imports of Certain Softwood Lumber from Canada 
(DS247); EC — Generalized System of Preferences (D S242); US— Anti-Dumping Duties on Silicon Metal from 
Brazil (DS239); EC — Measures Affecting Soluble Coffee (DS209); Egypt — Import Prohibition on Canned 
Tuna with Soybean Oil (DS205); Nicaragua — Measures Affecting Imports from Honduras and Colombia 
(DS201); Brazil — Measures on Minimum Import Prices  (DS197); EC — Measures Affecting Differential and 
Favourable Treatment of Coffee (DS154); India — Measures Affecting Customs Duties (DS150); EC — 
Measures Affecting Imports of Wood of Conifers from Canada (DS137); India — Measures Affecting Export of 
Certain Commodities (DS120); Pakistan — Export Measures Affecting Hides and Skins (DS107); Pakistan — 
Export Measures Affecting Hides and Skins (DS107); US— Countervailing Duty Investigation of Imports of 
Salmon from Chile (DS97); US— Import Prohibition of Certain Shrimp and Shrimp Products (DS61); Korea — 
Measures concerning Bottled Water (DS20); Malaysia — Prohibition of Imports of Polyethylene and 
Polypropylene (DS1) . WT/DS394/R 
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  obtained significant commercial and institutional be nefits, including with respect to its natural 
resources. It also committed to ab ide by WTO rights and obligations. 
7.383  Exercising its sovereignty over its own natural resources while respecting the requirements of 
Article XX(g) that China committed to respect, is an  efficient way for China to pursue its own social 
and economic development. These c onsiderations support the view that "a comprehensive policy 
comprising a multiplicity of interacting measures" is an appropriate policy to conserve natural 
resources.
608    
7.384  The Panel refers now, as part of the immediate context of Article XX(g), to the provisions of 
paragraph (i) of Article XX, which deal with situa tions where the exports of domestic materials can be 
restricted to assist the affected domestic industr y. Even in such a situation where a Member is 
explicitly protecting its downstream industry, Article  XX(i) ensures consideration of the interests of 
foreign producers.     
7.385  Article XX(i) provides an exception for measures: 
"involving restrictions on expor ts of domestic materials ne cessary to ensure essential 
quantities of such materials to a domestic processing industry during periods when the domestic price of such materials is held below the world price as part of a governmental stabilization plan; Provided  that such restrictions shall not operate to 
increase the exports of or the protection affo rded to such domestic industry, and shall 
not depart from the provisions of this Ag reement relating to non-discrimination". 
7.386  Article XX(i) provides explicitly that any expor t restrictions on domestic materials cannot be 
imposed to increase the protection of the domestic i ndustry. Hence the restrictions remain subject to 
the core GATT principles of non-discrimination. In  the Panel's view, Article XX(g), which provides 
an exception with respect to "conservation", cannot be  interpreted in such a way as to contradict the 
provisions of Article XX(i), i.e., to allow a Member , with respect to raw materials, to do indirectly 
what paragraph (i) prohibits directly.  In other words, WTO Members cannot rely on Article XX(g) to 
excuse export restrictions adopted in aid of ec onomic development if they operate to increase 
protection of the domestic industry.  
(ii) "if such measures are made effective in c onjunction with restrictions on domestic production 
or consumption" 
7.387  Having reviewed how the requirements of Artic le XX(g) can be interpreted harmoniously 
with the international law principle of State sovere ignty over its natural resources, the Panel continues 
its interpretation of the terms of Article XX(g), i.e ., that such challenged measures are "made effective 
in conjunction with restrictions on domestic production or consumption". 
7.388  China acknowledges that Article XX(g) requi res that the challenged measures be "made 
effective in conjunction with restrictions on domest ic production or consumption". China recalls that 
the jurisprudence has established that this phrase implies a degree of " even-handedness ", but this does 
not mean that actions must affect foreigners  and domestic actors in an identical manner.
609 China 
claims that pursuant to the principle of sove reignty over natural resources, resource-endowed 
countries, including developing countries, can manage  the supply and use of those resources through 
conservation-related measures that foster the sustainable development of their domestic populations.  
                                                      
608 Appellate Body Report, Brazil – Retreaded Tyres , para. 151. 
609 China's first written submission, paras. 149-150.  WT/DS394/R 
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  7.389  According to China, provided that restrictions  are imposed on domestic supply, Article XX(g) 
does not oblige resource-endowed countries to ensure  that the economic development of other user-
countries benefits equally or identically from the exploitation of the resources of resource-endowed 
countries.
610 For China, all parties understand the phrase "m ade effective in conjunction with domestic 
restrictions on production or consumption" to mean that identical treatment of foreign and domestic 
actors is not required. It adds that (i) the Appellate  Body has recognized that no particular distribution 
of the burden is required; and (ii) Article XXXVI:5 and its Ad Note confirm that the burden on 
domestic and foreign supply need not be identi cal because developing countries may pursue economic 
diversification through development of domestic  industries to process primary products. China 
fundamentally disagrees with any suggestion by the Eu ropean Union that Article XX(g) implies that a 
conservation scheme cannot impose a lesser burden on domestic users than on foreign users.  After 
all, says China, the WTO Agreement  is not a commodity-sharing agreement.611 
7.390  The European Union agrees that Article XX(g) does not necessarily require that domestic and 
foreign users of Chinese raw materials are to be tr eated in an identical manner, but it does require 
them to be treated in an even -handed or an equitable manner.612 The European Union believes that 
Article XX(j) of the GATT 1994 provides useful context for interpreting the " even-handedness " 
requirement of Article XX(g).613 Article XX(j) affirms the principle of equitable access that is 
reflected in the requirement in Article XX(g) that  a measure that relates to conservation must be 
"made effective in conjunction with restric tions on domestic produc tion or consumption ".614 
7.391  Likewise, the United States and Mexico mainta in that under Article XX(g), "made effective 
in conjunction with restrictions on domestic producti on or consumption" requires that the challenged 
measure at issue be operative, in force or effectiv e in combination with operative, in force, or 
effective actions or facts that confine or fix defin itely the permitted extent, amount, duration, etc. of 
domestic production or consumption.615 Furthermore, the United States and Mexico argue that the 
interpretation of " even-handedness " advanced by China is incorrect. They contend that the Appellate 
Body's ruling in US – Gasoline , which referred to the boundaries of the even-handed requirement, 
held that a measure would not meet the requirements of the " even-handedness " if it were at the end of 
the spectrum where only foreign interests were being negatively affected and domestic interests suffered no negative impact.
616  
7.392  The complainants insist that the Appellate Body's reasoning in US – Gasoline  does not stand 
for the proposition that China suggests, i.e., th at Article XX(g) permits a Member to impose a 
measure that puts at an advantage its own domestic in terests at the expense of the interests of other 
Members, as long as the measure imposes some level of restriction on domestic supply that is greater 
than nothing.617 
Restrictions  on domestic production or consumption 
7.393  The Panel recalls that a WTO-inconsistent measure may be justified pursuant to 
Article XX(g) if the respondent whose measure is being challenged can demonstrate that its measure 
is made effective in conjunction with restric tions on domestic production or consumption.   
                                                      
610 China's first written submission, para. 153. 
611 China's second written submission, paras. 195-219. 
612 European Union's second written submission, para. 252. 
613 European Union's second written submission, para. 253. 
614 European Union's second written submission, para. 254. 
615 United States' second written submission, para. 1 31; Mexico's second written submission, para. 135. 
616 United States' second written subm ission, paras. 134-136; Mexi co's second written submission, 
paras. 138- 140. 
617 United States' second written submission, para. 1 37; Mexico's second written submission, para. 141. WT/DS394/R 
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  7.394  The term "restriction" is defined as: "A th ing which restricts someone or something, a 
limitation on action, a limiting condition or regulati on" and as "[t]he action or fact of limiting or 
restricting someone or something," specifically  "[d]eliberate limitation of industrial output
618 the 
action or fact of confining or binding the extent, amount, duration, etc. of permitted619 -  in the case of 
Article XX(g) - domestic production or consumption.620  The Panel considers that the ordinary 
meaning of "restriction" is that which has a limiting effect. 
Effective in conjunction with 
7.395  The GATT Panel in Canada – Herring and Salmon  interpreted the meaning of the term 
"effective in conjunction with ":  
"The Panel, similarly, considered that the term 'in conjunction with ' in Article XX (g) 
had to be interpreted in a way that ensures that the scope of possible actions under that provision corresponds to the purpose for which it was included in the General Agreement. A trade measure could therefore in the view of the Panel only be 
considered to be made effective 'in conjunction with' production restrictions if it was 
primarily aimed at rendering effective these restrictions ".
621 
7.396  The ordinary meaning of the term "made effective " was clarified in US – Gasoline where the 
Appellate Body said the phrase means that the challe nged measure is "operative", "in force", or has 
"come into effect".622  In the same appeal, the Appellate Body addressed the meaning of the entire 
clause: 
"Put in a slightly different manner, we be lieve that the clause 'if such measures are 
made effective in conjunction with restricti ons on domestic products or consumption' 
is appropriately read as a requireme nt that the measures concerned impose 
restrictions, not just in respect of impor ted [products], but also with respect to 
domestic [products]".623  
7.397  Therefore, in our view, restrictions on domes tic production or consumption must not only be 
applied jointly with the challenged export restricti ons but, in addition, the purpose of those export 
restrictions must be to ensure the effectiveness of those domestic restrictions.624 
7.398  In the Panel's view, Article XX(g), in requiring th e domestic restrictions to be made effective 
in conjunction with the (challenged) export restricti on, is requiring that both the export restrictions 
and the related domestic restrictions operate at the sa me time. This view is supported by the ordinary 
meaning of the term in conjunction with, which  is "the act or an instance of conjoining: the state of 
being conjoined; occurrence together in time or space".625 The requirement that export and domestic 
restrictions occur together is consistent with  the requirement that the export restriction be  primarily 
                                                      
618 Shorter Oxford English Dictionary , 1st edn., L. Brown (ed.) (Oxford University Press, 1993), 
Vol. 2, p. 2569. 
619 Shorter Oxford English Dictionary , 1st edn., L. Brown (ed.) (Oxford University Press, 1993), 
Vol. 2, p. 2569. 
620 The Panel also referred to the definition of "restr iction" in its determination of GATT Article XI to 
mean " ...'limiting' or have a 'limiting effect' ... ". See, e.g., para. 7.206 above. 
621 GATT Panel Report, Canada – Herring and Salmon , para. 4.6. 
622 Appellate Body Report, US – Gasoline , p. 20, DSR 1996:I, 3, at p. 19. 
623 Appellate Body Report, US – Gasoline , p. 20, DSR 1996:I, 3, at p. 19. 
624 GATT Panel Report, Canada – Herring and Salmon , para. 4.6. 
625 Webster's New Encyclopaedic Dictionary.  WT/DS394/R 
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  aimed at rendering effective  the domestic restriction.
626 Thus it is important for us to have regard to 
the timeframe for China's restrictions on domestic production or consumption. 
7.399  China argues that the provisions of Article XXXVI:5 of the GATT 1994 can be used as legal 
context in the interpretation of Article XX(g). Fo r China GATT Article XXXVI:5 confirms that it is 
entitled to use and conserve its natural resources for itself with a view to diversifying its own 
economy.627  Supporting its steel industry will help China to diversify because the growth of the steel 
industry will stimulate the development of the infrast ructure sector, which, in turn, will spur China's 
overall economic development, indus trialization and diversification.628  The goal would mean that the  
export restrictions would be WTO- legitimate under GATT Article XX(g). 
7.400   The Panel has a certain difficulty in seeing how a reference to the right to diversification set 
out in Article XXXVI:5 can assist it in its interpre tation of Article XX(g). Even assuming that China 
has properly identified an interpretative ambiguity  in Article XX(g), and that Article XXXVI:5 
includes a right to economic diversification – whic h we are not suggesting it does – we cannot agree 
with China that such a right could undermine or even contradict the terms of paragraph (g) that 
require even-handed domestic restrictions on pr oduction or consumption, as discussed below.   
7.401  In any event, the Panel is of the view that Ch ina's claim that its incen tives to the steel industry 
will foster China's diversification through the deve lopment of its infrastructure is not substantiated 
with evidence.  The Panel notes that export restri ctions on refractory-grade bauxite and fluorspar 
support mainly the aluminium and steel industries.  The Panel finds it hard to see how China will 
improve diversification by supporting further develo pment of these sectors, where China is already a 
global leader.629  Moreover, if, as China claims, better in frastructure would enhance diversification, 
the Panel is left wondering how supporting the steel  and aluminium industry (already well developed) 
will improve the quality of China's infrastructure. 
Requirement of even-handedness 
7.402  The Appellate Body emphasized that the term  "if such measures are made effective in 
conjunction with restrictions on domestic production or consumption" imposes "a requirement of 
even-handedness  in the imposition of restrictions ... up on the production or consumption of 
exhaustible natural resources":630 
"There is, of course, no textual basis for requiring identical treatment of domestic and 
imported products. Indeed, where there is id entity of treatment - constituting real, not 
                                                      
626 GATT Panel Report, Canada – Herring and Salmon , para. 4.6. 
627 China's first opening or al statement, para. 24. 
628 China's response to Panel question No. 34 followi ng the second substantive meeting, paras. 157-
159. 
629 The Report on Refractory Bauxite at p. 21 (Exhibit CHN-10) indicates that "China in 2009 produced 
568 million tonnes of steel […] [which amounts to] six and a half times more steel than the world's second 
largest steel producer (Japan)". The same Report, at p.  22, shows that in the la st decade "China's steel 
production grew at an average rate of 19% a year. By comparison, production in the rest of the world did not 
grow at all over the period, with the result that by 2009 China was producing almost half of the world's steel". 
The Report on Fluorspar at p. 18 (Exhibit CHN-9) indicates that "China in 2009 produced 12.85 million tonnes 
of aluminium […] [which amounts to] four times more than the world's second largest aluminium producer 
(Russia)". The same Report, at p. 19, shows that in th e last decade "China's alumin ium production grew at an 
average rate of 20% a year. By co mparison, production in the rest of the world grew at 2% a year".  See also 
United States' comments on China's responses to the Panel questions after the second substantive meeting, 
paras.120 and 121. 
630 Appellate Body Report, US – Gasoline , p. 20-21, DSR 1996:I, 3, at p. 19. WT/DS394/R 
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  merely formal, equality of treatment - it is difficult to see how inconsistency…would 
have arisen in the first place. On the other hand, if no restrictions on domestically 
produced like products are imposed at all, and all limitations are placed upon 
imported products alone , the measure cannot be accep ted as primarily or even 
substantially designed for implementing c onservationist goals. The measure would 
simply be naked discrimination for protecting locally-produced goods".
631 [emphasis 
added] 
7.403  China argues that "Article XXXVI:5 and its Ad Note confirm that Article XX(g) does not 
require identity between the restrictions on dom estic and foreign supply of natural resources"632 and 
"recognizes[s] the objective of achieving economic di versification of developing country economies 
through the development of industr ies to process primary products".633  In particular, China argues 
that export restrictions are needed to support its econo my and to enable it to diversify. In other words, 
a proportionately higher burden on foreigners is justified.  
7.404  The Panel agrees with China that , in interpreting and applying Article XX(g) in relation to 
non-renewable resources, the treaty interpreter may take into account the international law principle 
of sovereignty over natural resources, to the extent relevant to the case at hand. The Panel also agrees 
that resource-endowed countries are entitled to manage the supply and use of those resources through 
conservation-related measures that foster the su stainable development of their domestic economies 
consistently with general intern ational law and WTO law. As long as even-handed restrictions are 
imposed on domestic supply, Article XX(g) does not  oblige resource-endowed countries to ensure 
that the economic development of ot her user-countries benefits identica lly from the exploitation of the 
resources of the endowed countries. 
7.405  The Panel is of the view that China's right to  economic development and its sovereignty over 
its natural resources are not in conflict with Chin a's rights and obligations as a WTO Member. When 
China chose to join the WTO in full exercise of its  sovereignty, China made the concurrent decision 
that its sovereign rights over its natural resources would thereafter be exercised within the parameters 
of the WTO provisions, including those of Article XX(g ). At that time, China was aware of the terms 
of Article XX, as interpreted by the Appellate Body in its Gasoline  and Shrimp  reports, in particular 
with respect to the requirement that restrictions fo r which Article XX(g) is in voked could be justified 
only if they are made effective in conjunctio n with restrictions on domestic production or 
consumption. China's Accession Protocol does not re veal any contrary understanding on the part of 
China or any WTO Members.   
7.406  This is, in fact, the very essence of the conserva tion objective set forth in Article XX(g):  if a 
WTO Member is not taking steps to manage the supply of natural resources domestically, it is not 
entitled to seek the cover of Article XX(g) for th e measures it claims are helping to conserve the 
resource for future generations.  
7.407  Finally, the Panel recalls the findings in Canada – Herring and Salmon634 which related to a 
prohibition of exports of unprocessed herring and salmon by Canada. In US – Gasoline , the Appellate 
Body referred to an earlier GATT dispute and captu red the essence of paragraph (g) of Article XX: 
"This prohibition effectively constituted a ban on purchases of certain unprocessed 
fish by foreign processors and consum ers while imposing no corresponding ban on 
                                                      
631 Appellate Body Report, US – Gasoline , p. 21, DSR 1996:I, 3, at p. 19. 
632 China's second written submission, para. 203. 
633 China's second written submission, para. 203. 
634 GATT Panel Report, Canada – Herring and Salmon , para. 5.1.  WT/DS394/R 
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  purchase of unprocessed fish by domestic processors and consumers.  The 
prohibitions appeared to be designed to pr otect domestic processors by giving them 
exclusive access to fresh fish and at the sa me time denying such raw material to 
foreign processors .  The Panel concluded that th ese export prohibitions were not 
justified by Article XX(g)".
635 
7.408  In sum, paragraph (g) of Article XX can jus tify GATT-inconsistent trade measures if such 
measures along with parallel domestic restrictions aimed at the conservation of natural resources and 
are primarily aimed at rendering effective parallel domestic restrictions operating for the conservation 
of natural resources. A contrario , Article XX(g) cannot be invoked for GATT-inconsistent measures 
whose goal or effects is to insulate domestic producers from foreign competition in the name of 
conservation.  
7.409  Having addressed the interpretation of Article XX (g), the Panel will now proceed to examine 
China's export restrictions on refractory-grade bauxite  and fluorspar to determine whether they can be 
justified pursuant to Article XX(g).  
7.410  Before examining the relevant evidence and ar gumentation of the parties with respect to 
refractory-grade bauxite and fluorspar, the Panel recalls that it is the Member invoking Article XX that bears the burden of proof.
636 Finally, examining a justification under Article XX, as in this 
dispute, requires the Panel to assess much evidence (i ncluding expert evidence). In that context, the 
Panel enjoys a broad margin of discretion - as the trier of the facts - in assessing the value of the 
evidence and the weight to be  ascribed to that evidence.637 At the same time, the Panel must respect 
the standard of review set out in Article 11 of the DSU. 
(b) Whether export quotas applied to refractory-gr ade bauxite and export duties applied to 
fluorspar (met-spar and acid-spar) are justifie d pursuant to Article XX(g) of the GATT 1994 
7.411  China's defence to justify its export restricti ons on refractory-grade bauxite and fluorspar is 
based on the argument that these raw materials are exhaustible natural resources that need to be 
managed and conserved. For China, refractory-gr ade bauxite and fluorspar are essential for its 
sustainable development, as they are a key input in  the production of steel and aluminium. Given that 
China's reserves of these resources  are limited (at the 2009 rate of  extraction, China estimates a 
lifespan of 4.5 years for its fluorspar reserves, and 16 years for its refractory-grade bauxite reserves)
638, China has adopted a variety of measures in  order to manage the supply and use of 
refractory-grade bauxite and fluorspar over time. These measures ensure that these resources provide 
social and economic benefits over a longer period th an would otherwise be the case.  China contends 
that export restrictions on these raw materials are an  integral part of China's conservation strategy. 
                                                      
635 Appellate Body Report, US – Gasoline , footnote 42. 
636 Appellate Body Report, US – Gasoline , pp. 22-23, DSR 1996:I, 3, at p. 21. 
637 Appellate Body Report, US – Wheat Gluten , para. 151.  If it is clear that panels have exclusive 
jurisdiction over the evaluation of factual and expert evid ence, "precisely how much a nd precisely what kind of 
evidence will be required to establish such a presumpt ion will necessarily vary from measure to measure, 
provision to provision, and case to case"  (Appellate Body Report, US – Wool Shirts and Blouses, p. 14, DSR 
1997:I, 323, at p. 335) as "[the Appellate Body] cannot second-guess the Panel in appreciating either the 
evidentiary value of … studies or the consequences, if an y, of alleged defects in [the evidence]". (Appellate 
Body Report, Korea – Alcoholic Beverages , supra , footnote 58, para. 161).  There are, however, no criteria or 
specific standards concerning the credibility and weight that the Panel should ascribe to the different elements of 
evidence.  Criteria such as "balance of probabilities" or "preponderance of evidence" were rejected in favour of 
panels' discretion, a discretion that must nonetheless respect the provisions of Article 11 of the DSU for an 
"objective" assessment of the facts and the law. 
638 Exhibits CHN-86, JE-166. WT/DS394/R 
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  Without these measures, China argues, the burden of China's supply limitations would be borne 
unduly by China's domestic users, which would undermine China's development.
639   
7.412  According to the complainants, the export restrictions on refractory-grade bauxite and 
fluorspar cannot be justified under Article XX(g).  Fi rst, the complainants maintain that there is a 
"complete lack of any relationship" between the e xport restrictions on the materials and the goal of 
their conservation. Rather, they claim there is a close and genuine relati onship between the export 
restrictions and China's economic goals.640 In support of this claim, the complainants adduce evidence 
that while restricting exports of the raw materials,  China does not restrict exports of the downstream 
products produced using the raw materials as inputs.641  For the complainants this is clear evidence 
that China's concern is not conservation.  
7.413  Second, the complainants mainta in that China has not satisfied its burden of proving that the 
export restrictions on refractory-grade bauxite and fluorspar are made effective in conjunction with 
restrictions on domestic production or consumption.   They point out that most of the domestic 
measures China refers to in the course of arguing that it respects  the requirements of Article XX(g) 
have been introduced during the course of these proceedings, and they do not actually limit domestic 
production or consumption of the materials at issue.  
7.414  Third, even if China has proved its measures ar e made effective in conjunction with domestic 
restrictions, albeit put in place during the Panel process, China would still not have shown that it 
satisfies the requirement of even-handedness necessary  pursuant to Article XX(g). This is because, in 
the complainants view, "[i]n order for its measur e to be even-handed […] it seems as though China 
would need to counter-balance the impact of the e xport duty on foreign users with some measures that 
similarly affect domestic users of fluorspar w ithout imposing a 'double' burden on foreign users".642  
Finally, the complainants assert that China's export duty on fluorspar does not satisfy the requirements of the chapeau  of Article XX.  
7.415  In order for the Panel to determine whether China can justify its export quota on refractory-
grade bauxite and its export duties on fluorspar pursu ant to GATT Article XX(g), the Panel will need 
to analyse, first, whether export restrictions on refractory-grade bauxite and fluorspar "relate to the 
conservation" of an exhaustible natural resource.  Secondly, we must consider whether China's export 
measures "are made effective in conjunction with domestic restrictions on production or 
consumption". 
(i) Whether China's its export quota on refracto ry-grade bauxite and export duty on fluorspar 
relate to the conservation of an exhaustible natural resource 
7.416  To begin, the Panel must determine whether China's export quota on refractory-grade bauxite 
and export duty on fluorspar "relate to conservation". Thus we must establish "whether there is a close 
and genuine relationship of  ends and means" between the goal of conservation of refractory-grade 
bauxite and fluorspar, and the means presented by  the applicable export duty and export quota.
643 
                                                      
639 China's first written submission, para. 188. 
640 United States' second written submission, paras. 141 and 251; Mexico's second written submission, 
paras. 145 and 256. 
641 United States' second written submission, para. 142 and 253; Mexico's second written submission, 
paras. 146 and 258. See also Exhibits JE-164, pp.11-13 (for fluorspar) and JE-165, pp. 24-27 (for refractory 
grade bauxite). 
642 United States' second written submission, para. 1 61; Mexico's second written submission, para. 165. 
643 Appellate Body Report,  US – Shrimp , para. 135.  WT/DS394/R 
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  7.417  Specifically, the export restrictions that  China seeks to justify pursuant to GATT 
Article XX(g) are:  
(a) the portion
644 of an export quota of 930,000 metric tonnes on Bauxite in its 
subcategories of "Aluminium ores and c oncentrates" (HS 2606.0000) and Refractory 
Clay (HS 2508.3000) that applies to "refr actory grade bauxite" or "high alumina clay" 
which represents a sub-category of refractory Clay (HS 2508.3000)645; and 
(b) a temporary export duty of 15% on different categories of Fluorspar, including: 
fluorspar containing by weight ≤ 97% calcium fluoride, also referred to as "Met-spar" 
(HS 2529.2100), and fluorspar containing, by weight > 97% calcium fluoride, also 
referred to as "Acid-spar" (HS 2529.2200).  
7.418  To determine whether a challenged export restri ction relates to conservation, a panel should 
examine the text of the measure itself, its design a nd architecture, and its context. First, the Panel 
observes that the measure imposing the export dut y on fluorspar does not refer to the goal of 
conservation646; the measure imposing an export quota on re fractory-grade bauxite does not refer to 
the relationship between the export quota and the goal of conservation.647   
7.419  In its first written submission, with a view to s upporting its claim that its export restrictions 
on refractory-grade bauxite and fluorspar are justifie d pursuant to Article XX(g), China submits that it 
has adopted a "comprehensive set of measur es relating to the conservation of fluorspar"648 and a 
"comprehensive set of measures rela ting to the conservation of bauxite ".649  It continues by referring 
to its 2001 " Mineral Resources Policy ".650 In a document entitled " China's Policy on Mineral 
Resources Information Office of the State Council of December 2003 " which refers to fluorspar 
explicitly, China inter alia  commits to "formulate a unified polic y on the import and export of mineral 
products in accordance with the WTO rules and [China's] commitments in its accession to the 
WTO".651 We note, however, that this policy document re fers for the most part to the economic and 
development gains that China can make through th e exploitation of its mineral resources. The Panel 
cannot find, nor has China pointed to, measures relating to the conservation of refractory-grade bauxite and fluorspar in the evidence China submitte d relating to what it terms its "mineral policy".
 
7.420  To support its claim that the export quota on refr actory-grade bauxite is justified pursuant to 
Article XX(g), China lists 13 measures which, acco rding to China, are relevant for its conservation 
programme on refractory-grade bauxite.  There are equivalent measures in most cases relating to 
fluorspar. Nine of those measures were enacted befo re 2009, and the others in 2010, i.e. after the 
                                                      
644 China submits that such portion (or refractory bauxite) represents approximately 75% of bauxite 
exports under code 2508.3999. China's opening oral statem ent at the second substantiv e meeting, para. 92.  See 
also exhibits CHN-513: table customs data refractory grade bauxite, and calculations. 
645 The specific Chinese measure which sets the 2009 export quotas for bauxite is the " Ministry of 
Commerce Announcement Regarding 2009 Agricultural and Industrial  Products Export Quota Amounts 
(Announcement No. 83 of 2008) " (Exhibit JE-79). (Exhibit JE-181).  Chin a refers to this subset of bauxite as 
"referactry bauxite" and submits that complainants ha ve also used this term (Exhibits CHN-10; CHN-96; 
China's responses of 13 September 2001, paras 32 to  36; China's second written submission, paras 84-93; 
China’s opening oral statement at the second substantive meeting, paras. 84 to 93); see also discussion in 
paras. 7.244 and 7.245 above. 
646 Exhibit JE-21. 
647 Exhibit JE-79. 
648 China's first written submission, para. 156. 
649 China's first written submission, para. 526. 
650 China's first written submission, para. 157-158. 
651 Exhibit CHN-79, p.11; see  also Exhibit CHN-80. WT/DS394/R 
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  Panel's establishment. China asserts that all those measures confirm that its export restrictions on 
refractory-grade bauxite and fluorspar are an integr al part of its conservation programmes within the 
meaning of Article XX(g).  
7.421  The pre-2009 measures invoked by China for refr actory-grade bauxite and fluorspar are the 
same, they are the following: 
(a) Mineral Resources Law
652  of 1986;  
(b) Environmental Protection Law653 of 1989;  
(c) Provisional Regulations on Resource Tax654 of 1994 and Detailed  Rules for the 
Implementation of the Provisional Regulations on Resource Tax655 of 1994;  
(d) Administration of Collection of the Mineral Resources Compensation Fees656 of 1997;  
(e) Administration of Registration of Mining of Mineral Resources657  of 1998 ;  
(f) National Mineral Resources Plan658 of 2001;  
(g) Notice of Opinions of Authorities on the Integration of Exploitation of Mineral 
Resources659 of 2006; and 
(h) National Mineral Resources Plan (2008-2015).660  
7.422  The National Mineral Resources Plan (2008-2015)  (item (h) above) describes China's 
conservation policy in the area of minerals including fluorspar: one of the policy tools mentioned is the restriction of extraction: "Restrict the extracti on of such minerals as ba rite, fluorspar, graphite, 
magnesite, talc and rich phosphorite".
661 However, there is no discussion of a specific "conservation 
policy" for fluorspar or refractory-grade bauxite. Moreover, although the National Mineral Resources 
Plan (2008-2015)  makes reference to fluorspar662, and explicitly refers to the objectives of extraction 
restrictions of this mineral, it is a programmatic doc ument that speaks of future restrictions, but does 
not refer to current restrictions. It makes no reference at all to refractory-grade bauxite. 
7.423  The Notice of Opinions of Authorities on the Integration of Exploitation of Mineral Resources 
(item (g) above) does not specifically refer refract ory-grade bauxite or to fluorspar; essentially it 
provides guidelines to promote the restructuring of the mining sector, with the goal of promoting the 
efficiency of resource extraction.663   
                                                      
652 Exhibit CHN-78. 
653 Exhibit CHN-88. 
654 Exhibit CHN-89. 
655 Exhibit CHN-91. 
656 Exhibit CHN-92. 
657 Exhibit CHN-93. 
658 Exhibits CHN-94, JE-17. 
659 Exhibit CHN-95. 
660 Exhibit CHN-80. 
661 Exhibit CHN-80. 
662 Exhibit CHN-80, pp. 7-8. 
663 Exhibit CHN-95.  WT/DS394/R 
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  7.424  The Administration of Registration of Mining of Mineral Resources (item (e) above) provides 
for monitoring and enforcement of compliance with  licensing requirements by mining enterprises and 
does not refer specifically to refractory-grade bauxite or fluorspar.
664 The National Mineral Resources 
Plan of 2001  (item (f) above) sets forth China's policy objectives for the use of mineral resources 
(emphasizing the importance of efficient use of resources), but, as the Mineral Resources Law  of 1986 
(item (a) above), does not refer to refractory-gra de bauxite or fluorspar conservation programmes.665 
The Environmental Protection Law (item (b) above) provides guidelines to foster environmental 
protection and to introduce environmental standards.666  
7.425  In its first written submission,  China submits excerpts from the 2009 Further Adjust of Import 
and Export Tariffs667, which China describes as ev idence that China's export restrictions on refractory-
grade bauxite and fluorspar were always linked to  the goal of conservation. The United States and 
Mexico take issue with the excerpts a nd cite the document more expansively: 
"In order to effectively bring into play the tariff policy's economic leverage , promote 
the adjustment of economic structure  and the change of economic development mode , 
further increase the import of advanced t echnologies, equipments and key parts and 
components, fulfil the need of domestic economic and social development , promote 
resource saving and environmental protection , and to improve people's standard of 
living, the State will implement relatively low interim import tariff rates on over 670 types of commodities next year . . .".
668 
7.426  The first part of the text identifies economic and development consider ations, while the latter 
part refers to sustainable development consider ations. The document also discusses more generally 
the lowering of import duty rates on products such as coal, fuel oil, epoxide resin, chassis of heavy 
wreckers, and automatic bobbin winders, with a view to "effectively bring into play the tariff policy's 
economic leverage, promote the adjustment of economic structure and the change of economic 
development mode". The Panel has not been able to see how this document confirms that China's 
export quota on refractory-grade bauxite and export duti es on fluorspar were put in place as part of a 
comprehensive conservation prog ramme relevant specifically to refractory-grade bauxite and 
fluorspar. 
7.427  China also argues that export restrictions contribute to its stated objective of conservation  of 
the natural resources at issue because by reducing foreign demand for the resource, they will reduce 
domestic production and, hence, the extraction of the resource.669 Furthermore, the use of export 
restrictions is said to be required because the u se of domestic restrictions on production without 
export restraints would undermine China's sustainable development.670   
7.428  The Panel has some difficulties with China's design ed position. It seems to us that a policy of 
restricting extraction would be more in line with a policy to achieve conservati on than one confined to 
restricting exports. For the purpose of conservation of a resource, it is not relevant whether the 
resource is consumed domestically or abroad; what matters is its pace of extraction. 
                                                      
664 Exhibit CHN-93. 
665 Exhibit CHN-94, JE-17. 
666 Regarding the measures introducing the resources tax and the compensation fee, see paras. 7.442-
7.447 below. For the 2010 measures, see paras. 7.448-7.458 below. 
667 Exhibit CHN-100. 
668 Exhibit CHN-100, para. 3 (emphasis added). 
669 China's first written submission, paras. 156, 164 and 187. 
670 China's first written submission, paras. 187-188 and 520-521. WT/DS394/R 
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  7.429  In light of the evidence submitted to the Panel, it is clear that there is a substantial increase in 
the domestic consumption of fluorspar and refractor y-grade bauxite, while exports do not appear to 
have grown at the same pace. For example, "[f] rom 2000 to 2009, Chinese consumption of fluorspar 
reflected growth of approximately 124%".
671  Starting from 2007, China's annual refractory-grade 
bauxite (ores) and fluorspar extraction steadily incr eases, with fluorspar's extraction registering an 
increment of 60% from 2008 to 2009.672 Moreover, for example "[i]n 2008, although far less fluorspar 
was exported from China in its raw material form th an in 2000, more fluorspar in total was exported 
from China than in 2000 due to the substantial incr ease in exports of downstream products containing 
fluorspar".673  For the Panel, this evidence does not su pport China's claim that it has put in place a 
comprehensive plan to conserve refractory-grade ba uxite and fluorspar given that domestic extraction 
has in fact increased. 
7.430  The Panel is also concerned with the possibility  that export restrictions may have long-term 
negative effects on conservation due to the increased  demand from the downstream sector. An export 
restriction on an exhaustible natural resource, by reducing the domestic price of the materials, works 
in effect as a subsidy674 to the downstream sector675, with the likely result th at the downstream sector 
will demand over time more of these resources than it would have absent the export restriction. This 
could offset the reduction in extraction determined by the export restriction. 
7.431  China argues that the extraction and production cap s that it has in place impede this effect. 
However, given that these caps are set at levels above  the current level of extraction and production of 
these materials, the Panel has difficulty with this proposition.676 
7.432  The Panel also observes that there is no clear  link between the way the duty and the quota are 
set and any conservation objective. China does not provide any evidence or argument to justify the 
use of an export duty on fluorspar, as opposed to a quota on refractory-grade bauxite. To justify the 
use of an export quota in the case of refractory- grade bauxite, China argues that a quota serves to 
ensure constraint in case of a sudden increase of foreign demand. However, China has not provided 
any evidence to suggest anything other than a stable demand for re fractory-grade bauxite. China also 
claims that "[a]t the 2009 rate of extraction, only four and a half years of China's [fluorspar]  reserves 
remain ".677 However, in its response to the Panel's ques tions, China could not provide an explanation 
                                                      
671 Market Research on Fluorspar and Selected Fluorochemicals, October 2010, p. 9 and p. 34 (Exhibit 
JE-164). 
672 Exhibits CHN-83 (for fluorspar ores extraction data) and CHN-369 (for bauxite ores extraction 
data). 
673 United States' second written subm ission, paras. 142-143; Mexi co's second written submission, 
paras. 146-147. The United States and Mexico identify a similar trend in the downstream sector's exports of 
refractory grade bauxite (United States' second written s ubmission, paras. 252 and 254; Mexico's second written 
submission, paras. 257 and 259).     
674 The use of the term "subsidy" herewith does not implicate a legal conclusion under the WTO 
Agreement on Subsidies and Countervailing Duties. 
675 Piermartini, R. (2004). 'The Role of Export Taxes in the Field of Primary Commodities'. World 
Trade Organization, Geneva, Switzerland.  See also Gomez-Sabaini JC (1990) "The role of export taxes" in 
Tanzi, Vito, Ed (1990) Fiscal policy in Open developing economies. International Monetary Fund, Washington 
DC.Devarajan, S, Go D., Schiff M, and Suthiwart-Narueput S., "The Whys an d the Why nots of Export taxation, 
World Bank Policy Research Working papers No 1684 (1996). 
676 United States' second written submission, para. 172; Mexico's second written submission, para. 176; 
United States' opening oral statement at the second substa ntive meeting, paras. 79-82; United States' responses 
to Panel question Nos. 20 and 31 following the second substantive meeting, paras. 14-44 (question No. 20) and 
para. 76 (question No. 31). 
677 China's first written submission, pa ra. 165 (emphasis in original).  WT/DS394/R 
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  as to what impact a 15% duty on fluorspar will have on its lifespan. Nor could China explain how this 
extended lifespan for fluorspar would addr ess its sustainable development concerns.
678 
7.433  Moreover, the Panel notes that China does not make the argument that the 15% export duty 
on fluorspar has the effect of extending in any meani ngful way the lifespan of fluorspar reserves.  In 
fact, China argues that it is the caps on mining and production that restrict the supply of fluorspar, while the export restraints only "manag[e] the re sulting supply" of refractory-grade bauxite and 
fluorspar.
679 According to China itself, if it maintain ed only extraction and processing caps without 
export restraints, it would be "compelled to share [i ts] resources according to nothing more than the 
demands of foreign markets".680 In other words, China acknowledg es that it prefers not to use only 
extraction and processing caps; rather it imposes an export restriction.    
7.434  For the Panel, measures that increase the cost s of refractory-grade bauxite and fluorspar to 
foreign consumers but decrease their costs to domestic users are difficult to reconcile with the goal of 
conserving refractory-grade bauxite and fluorspar. 
7.435  In light of the above, the Panel concludes that China has not met its burden of proving that its 
export quota on refractory-grade bauxite and its export  duty on fluorspar "relate to the conservation" 
of refractory-grade bauxite and fluorspar.  The Pane l will nevertheless continue its examination of the 
challenged measures to determine whether the expor t quota on refractory-grade bauxite and the export 
duty on fluorspar "are made eff ective in conjunction with restric tions on domestic production or 
consumption".681 
(ii) Whether China's quota on refractory-grade baux ite and its export duty on fluorspar are made 
effective in conjunction with restrictions  on domestic production or consumption 
7.436  In reviewing the parties' arguments whether Ch ina's export restrictions on refractory-grade 
bauxite and fluorspar satisfy the Article XX(g) requirement that they are made effective in 
conjunction with restrictions on dom estic production or consumption, the Panel will consider, first, 
the 2009 export measures. Notwithstanding its deci sion to limit its terms of reference to the 2009 
measures, the Panel will nonetheless examine the dom estic measures applied in 2010 and referred to 
by China as evidence that domestic restrictions on consumption and production are being introduced.  
Are the domestic measures invoked by China restrictive on domestic production or 
consumption? 
7.437  As noted earlier, China invokes and refers the Panel to 13 measures that, according to China, 
"restrict[] or burden[] the current exploitation, pr oduction, and use of its own fluorspar [refractory 
grade bauxite]".682  The Panel acknowledges that to the exte nt these measures increase the costs of 
production, they have the potential to reduce extrac tion. However, the Panel must examine whether 
those measures actually restrict or limit domestic production or consumption.  
7.438  The  pre-2009 measures referred to by China to  justify its export quota on refractory-grade 
bauxite, are the following:  
                                                      
678 China's responses to Panel question Nos. 17-18 following the second substantive meeting, 
paras. 47-56. 
679 China's responses to Panel question Nos. 17-18 fo llowing the second substantive meeting, para. 48. 
China makes a similar argument with respect to refr actory grade bauxite (China's first written submission, 
para. 520). 
680 China's responses to Panel question Nos. 17-18 following the second substantive meeting, para. 49. 
681 The Panel does so in order to ensure prompt settlement of the dispute. 
682 China's first written submission para. 168 (for fl uorspar) and 502 (for re fractory grade bauxite). WT/DS394/R 
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  (a) Mineral Resources Law
683 of 1986; 
(b) Environmental Protection Law684  of 1989;  
(c) Provisional Regulations on Resource Tax685 of 1994 and Detailed  Rules for 
Implementation of the Provisional Regulations on Resource Tax686  of 1994;  
(d) Administration of Collection of the Mineral Resources Compensation Fees687 of 1997;  
(e) Administration of Registration of Mining of Mineral Resources688  of 1998;  
(f) National Mineral Resources Plan 689 of 2001;  
(g) Notice of Opinions of Authorities on the Integration of Exploitation of Mineral 
Resource690  of 2006;  
(h) National Mineral Resources Plan (2008-2015).691  
7.439  For fluorspar, the pre-2009 measures invoked by China are the same as those listed above. 
7.440  China claims that "these meas ures […] restrict[…] or burden[…] the current exploitation, 
production and use of its own refract ory-grade bauxite and fluorspar".692 However, five of these 
measures do not specifically refer to refractory-gr ade bauxite or fluorspar. Among the above listed 
measures, there are no specific provisions actuall y setting restrictions on domestic production or 
consumption of refractory-grade bauxite or fluorspar. As previously observed693, the Administration 
of Registration of Mining of Mineral Resources (item (e) above) provides for monitoring and 
enforcement of compliance with licensing requirements by mining enterprises. There is no reference to "restrictions" or other forms of "limitations" in the National Mineral Resources Plan of 2001  (item 
(f) above). The National Mineral Resources Plan (2008-2015) (item (h) above)  refers explicitly to 
refractory-grade bauxite and fluorspar
694 and to the objective of setting extraction restrictions on these 
minerals, but speaks only of eventual or future restri ctions, and does not refer to restrictions that are 
currently in effect. 
7.441  The Environmental Protection Law (item (b) above)  provides guidelines to foster 
environmental protection and to introduce environmental standards; but here again, China has not 
been able to direct the Panel to any provision rela ting to domestic restrictions and export restrictions 
primarily aimed at rendering effective these [domestic] restrictions .695 
                                                      
683 Exhibit CHN-78. 
684 Exhibit CHN-88. 
685 Exhibit CHN-89. 
686 Exhibit CHN-91. 
687 Exhibit CHN-92. 
688 Exhibit CHN-93. 
689 Exhibits CHN-94, JE-17. 
690 Exhibit CHN-95. 
691 Exhibit CHN-80. 
692 China's first written submission, para. 168 (for fluorspar) and 502 (for re fractory grade bauxite). 
693 See para. 7.424. 
694 Exhibit CHN-80, pp. 7-8. 
695 GATT Panel Report, Canada Herring and Salmon , para. 4.6.  WT/DS394/R 
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  7.442  Two of the eight measures do address aspects relating specifically to the production of 
refractory-grade bauxite or fluorspar.   
7.443  China appears to impose a resource tax on en tities exploiting mineral products through the 
Provisional Regulations on Resource Tax
696 and the Rules for the Implementation of Regulations on 
Resource Tax .697 
7.444  According to China, "[t]he objective of the mi neral resources tax […] is to increase extraction 
costs and, hence, prices of the mineral".698 The Panel observes that the in itial level of the tax appears 
to be very low; in 2009 and through the first ha lf of 2010, the tax on refractory-grade bauxite or 
fluorspar was set at 3 RMB per metric t on (approximately 0.45 USD per metric ton)699, or about 0.1% 
of refractory-grade bauxite or fluorspa r prices in China in the same period.700 As of 1 June 2010, for 
both refractory-grade bauxite and fluorspar701, the tax was raised to 1% of their respective prices.702  
7.445  China has not demonstrated that its 1% tax rate operates as an effective restriction on 
extraction. 
7.446  China also subjects the extraction of refractory-grade bauxite or fluorspar ores to a 
compensation fee, which was introduced by the Administration of Collection of the Mineral 
Resources Compensation Fees (as amended in 1997).703 The Compensation Fee is calculated as 
follows:  
Compensation Fee = sales income × compensation rate × coefficient of mining recovery rate. 
 
7.447  The compensation rate for refractory-grade bauxite  and fluorspar is set at 2%.  However, the 
coefficient of mining recovery rate, calculated as  the ratio of the approved mining recovery rate 
(specified in the mining licence issued by th e competent State department) over actual mining 
recovery rate (determined by the extraction effi ciency of the mining company), can be a number 
below or above 1.  For example, if the approved mining recovery rate is set at 0.9 and the actual 
mining recovery rate is 0.95, the coefficient of mining recovery rate is equal to  0.947. In this example, 
the incidence of the compensation fee (that is, the ra te at which sales income is taxed) is 1.894% 
(which results from the multiplication of the 2% compen sation rate by 0.947, the coefficient of mining 
recovery).704 In other words, mining companies may redu ce the incidence of the fee below the 2% 
compensation rate by increasing their actual mining recovery rate. The Panel understands that China 
did not set any range of values for the coefficient of  mining recovery rate. Therefore, the Panel is of 
                                                      
696 Exhibit CHN-89. 
697 Exhibit CHN-91. 
698 China's first written submissions, para. 172. 
699 Exhibit CHN-91, Appendix 1. 
700 In the first half of 2010, China's export price of fluorspar amounted to about 340 USD per metric 
tonne (Exhibit JE-180). The Panel does not have before it evidence on the 2009 domestic price of fluorspar, 
although it has the 2009 acid-grade fluorspar export price, which amounted to 460 USD per metric tonne 
(Exhibit JE-164, p. 39). In 2009 and in the first half of 2010, the domestic price of refractory grade bauxite 
ranged from 470 to 535 USD per metric tonne (Exhibits JE-165, p. 20 and JE-180, p.1). 
701 Exhibit CHN-90. 
702 The increased tax amounts to 20 RMB per metric tonne (about 3 USD per metric tonne), which in 
the second half of 2010 represents about 1% of China's price for fluorspar (amounting to about 360 USD per 
metric tonne) and about 1% of its price for refractory-grade bauxite, (ranging from 495 to 535 USD per metric 
tonne). See Exhibit JE-180 for prices of fluorspar and refractory-grade bauxite in 2010. 
703 Exhibit CHN-92. 
704 The Panel used the values considered by China in its response to Panel question No. 32 following 
the second substantive meeting. WT/DS394/R 
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  the view that potentially, the inci dence of the compensation fee may b ecome so low that it is unlikely 
to limit mineral production. In general, we beli eve that China has not demonstrated that the 
compensation fee operates as an effective restriction on extraction or production. 
7.448  In 2010, China introduced the following measures for refractory-grade bauxite: 
(a) 2010 Measures to Control the Extracti on and Production of Refractory-grade 
Bauxite and Fluorspar
705;  
(b) 2010 Public Notice on Refractory-Grade B auxite (High Alumina Bauxite) Industry 
Entrance Standards706;  
(c) 2010 Circular on Passing Down the 2010 Controlling Quota on Total Extraction 
Quantity of High-alumina B auxite Ores and Fluorspar Ores707;  
(d) 2010 Circular on Passing Down the Controlling Quota of the 2010 Total Production 
Quantity of High-Alumina Refrac tory-Grade Bauxite and Fluorspar708;  
(e) 2010 Catalogue of Goods Subject to Export Licensing Administration709, and Notice 
on Announcement of the 2010 Export Quota Amounts for Agricultural and Industrial 
Products .710 
7.449  China invokes the same 2010 measures with resp ect to fluorspar, except for the following 
changes: the 2010 Export Licensing Catalogue711 and the 2010 Export Quota Amounts712 are not 
invoked for fluorspar, for which instead the 2010 Tariff Implementation Plan713 is invoked. Moreover, 
in the case of fluorspar, the 2010 Public Notice on Refractory-Grade Bauxite Standards714 is replaced 
by the 2010 Public Notice on Fluorspar Standards .715 
7.450  The Panel has reviewed the 2010 measures and has concluded that they are not effective in 
restricting production or consumption of refract ory-grade bauxite or fluorspar. In fact, the 2010 Public 
Notice on Refractory-Grade Bauxite Standards716 (and its equivalent for fluorspar) sets forth entrance 
requirements but does not refer to restrictions of extrac tion or production of the raw materials at issue.   
7.451  The 2010 Measures to Control the Extraction and Production of Refractory-grade Bauxite 
and Fluorspar717 refers to extraction and production caps introduced on the raw and processed forms 
of both refractory-grade bauxite or fluorspar but does not appear to be effective in restricting 
production, as explained in the following paragraphs. 
                                                      
705 Exhibits CHN-87, JE-167. 
706 Exhibit CHN-96. 
707 Exhibits CHN-97, JE-168. 
708 Exhibits CHN-98, JE-169. 
709 Exhibit CHN-7. 
710 Exhibit CHN-8. 
711 Exhibit CHN-7. 
712 Exhibit CHN-8. 
713 Exhibit CHN-5. 
714 Exhibit CHN-275. 
715 Exhibit CHN-96. 
716 Exhibit CHN-275. 
717 Exhibits, CHN-87, JE-167.  WT/DS394/R 
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  7.452  The Panel observes that the extraction cap of  11 million metric tonnes of fluorspar ores 
imposed by the 2010 Quota on Extraction of High-alum ina Bauxite Ores and Fluorspar Ores
718 
exceeds the total 2009 extraction of 9.4 million metric tonnes of fluorspar ores.719 This mining cap is 
also well above the pre-2009 fluorspar extraction levels, which never exceeded 5.89 million metric 
tonnes.720 The Panel also takes note that China's 2010 extraction cap on high alumina clay of 4.5 
million metric tonnes is above the 2009 actual extraction of high alumina clay, amounting to 2.4 million metric tonnes.
721 
7.453  Similarly, the 2010 Quota of High-alumina refract ory-Grade Bauxite and Fluorspar722 set a 
production cap of 4.71 million metric tonnes for fluor spar blocks (metallurgical grade fluorspar) and 
2.44 million metric tonnes for fluorspar powder (aci d grade fluorspar). Data on fluorspar production 
for the years 2008 and 2009 suggest that these caps ar e not likely to limit production. In fact, in 2008 
and 2009 China produced 1.3 and 1.2 million metr ic tonnes of metallurgical grade fluorspar, 
respectively, and both figures are well below the 2010 cap of 4.71 million metric tonnes. Similarly, in 
2008 and 2009 China produced 1.9 a nd 1.8 million metric tonnes of acid grade fluorspar, respectively, 
both figures again well below the 2.44 million metric tonnes cap.723 The 2010 Circular cited above 
also sets a production cap for calcined high alumina clay amounting to 4 million metric tonnes. China 
did not provide data on actual 2009 pr oduction of this material. However, the United States calculated 
an approximate 2009 production amount, based on certa in data and assumptions, and concludes that 
the production caps are not effective in limiting production of calcined alumina clay.724 China did not 
contest the United States' figures.   
7.454  When challenged on the effectiveness of those 2010 restrictions, China argues that it was not 
China's intent to reduce the level of perm itted extraction with the 2010 target numbers.725 Rather, the 
"Ministry of Land and Resources decided to grant a transition period" and "[i]t is foreseen that the 
level of permitted extraction w ill be reduced year by year".726 Thus according to China, the 
"restrictions on domestic production" are not intended to effect restrictions currently, but only in the 
future.727  For the complainants, China's assertion that th e affect of its domestic restrictions will not 
occur now but only in the future is a clear indication that these are not measures taken "in conjunction" with the export quotas currently imposed by China on refractory-grade bauxite. 
                                                      
718 Exhibits CHN-97, JE-168. 
719 Exhibits CHN-86, JE-166. 
720 China's response to Panel question No. 20 followi ng the second substantive meeting, para. 71;  
United States' comments on China's response to Panel question No. 20 following the second substantive 
meeting, para. 68. 
721 Exhibits CHN-86, JE-166. 
722 Exhibits CHN-98, JE-169. 
723 Exhibits CHN-9 (figure 4) for 2008 data, and JE-164 (Table 7, p. 34) for 2009 data. See also the 
United States' response to Panel question No. 20 following the second substantive meeting, para 31. 
724 In particular, assuming that in 2009 2.4 million metric tonnes of alumina clay ores were actually 
mined in China (Exhibits CHN-86, JE-166) and that it takes between 2 and 1.5 metric tonnes of alumina clay 
ores to produce 1 metric tonne of calcined alumina clay (Exhibits JE-177 p.4 and CHN-10, pp.5-6), the United 
States estimates that China's 2009 actual production of calcined high alumina clay ranged from 1.2 to 1.6 
million metric tonnes, which is well below the 2010 pro duction cap of 4 million metric tonnes (United States' 
response to Panel question No. 20 following the second substantive meeting, paras. 32-34). 
725 As China states at paras. 245-246 of its opening or al statement at the second substantive meeting:  
"Mexico and the United States also allege that the extr action caps for fluorspar and refractory bauxite are 'not 
set with the intention of binding or limiting the amount of' production of fluorspar and refractory bauxite, based 
on a comparison of the level of the 2010 cap with the qua ntity extracted in 2009. This mischaracterizes China's 
intent." 
726 China's opening oral statement at the second substantive meeting, para. 246 (emphasis added). 
727 China's opening oral stat ement at the second substantive meeting, para. 247. WT/DS394/R 
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  7.455  As noted earlier, the Panel is of the view that Article XX(g) requires that domestic restrictions 
be operated concurrently with the trade measures at  issue (export duty or quota).  It is also necessary 
to ensure that export restrictions be primarily aimed at rendering effective these [domestic] 
restrictions.  To benefit from the justification permitted under paragraph (g), a Member cannot seek to 
rely on a future or potential domestic restricti on; nor will measures enacted concurrently but which 
only have effect or are foreseen to have effect only in the future respect the Article XX(g) criteria, for 
they must not only exist concurrently; they must operate concurrently.    
7.456  The Panel notes that China has maintained export restrictions on refractory-grade bauxite and 
fluorspar for many years.728 In 2009 the complainants initiated WTO dispute settlement proceedings 
against a number of China's export restrictions. In  the context of these proceedings, China sought to 
defend its export restrictions citing conservation objectives. During this period, China increased its 
export restrictions and at the same time introd uced caps on production, which provide domestic 
producers and consumers with a "transition period" be fore eventual measures are applied to effect 
restrictions in the future.  So, even if the Panel were to extend its review to include relevant 2010 
measures, the domestic restrictions set by those 2010 measures are still set above the actual 
production rates and are thus not effective in lim iting production or extraction. The Panel is not 
persuaded that these facts support Ch ina's claim that its export restrictions are part of a comprehensive 
conservation programme and is thereby entitled to jus tify its export restrictions under Article XX(g).   
7.457  The Panel recalls that China introduced "trans itional" caps on domestic production only in its 
2010 Measures to Control the Extraction and Production of Refractory-grade Bauxite and 
Fluorspa r.729 The Preamble of the State Council Circular: "In recent years, some enterprises have 
been over-exploiting, producing and processing refract ory-grade bauxite and fluorspar, leading to the 
rapid reduction in the reserve of resources and severe environmental pollution". Hence China had 
recognized the absence of control over its domest ic production "in the recent years". Yet China 
introduced domestic restrictions only in 2010, deciding "to offer […] mining enterprises, refractory 
materials industry and the related downstream industries an appropria te transitional period, and to 
ensure stable adjustment and transition of the downstream industries during this process".730 China 
also asserts that "the level of permitted extractions will be reduced year by year".731 The Panel 
understands that, as a result of the 2010 measures, China's domestic supply is not actually being 
restricted, but will only potentially be restricted in the future.732 It is difficult for the Panel to conclude 
on this basis that China's export policy at issue is primarily aimed at conservation . 
7.458  In the Panel's view, China has not demonstrated that its export restrictions on refractory-grade 
bauxite and fluorspar are made effective in conjunc tion with restrictions on domestic production or 
consumption because the restrictions in place on 21 December 2009 are not intended to be - nor are they - enforcing a reduction on domestic production or  consumption. The introduction in 2010 of caps 
on mining and production might in the future permit China's challenged measures to be justified under 
Article XX(g). For now, however, China has not sa tisfied its burden of proving that its export 
restrictions were made effective in conjunction  with restrictions on domestic production or 
consumption.    
                                                      
728 Exhibits JE-164 p.7 for fluorspar, and JE-165 p.14 for refractory-grade bauxite. 
729 Exhibits CHN-87, JE-167. 
730 Exhibits CHN-86, pp.3-4, JE-166. See also China's opening oral statement at the second substantive 
meeting, para 246. 
731 China's opening oral stat ement at the second substantive meeting, para. 246. 
732 United States' comments on China's response to Panel question No. 20 following the second 
substantive meeting, para. 75.  WT/DS394/R 
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  7.459  The Panel will nevertheless con tinue its examination of the ch allenged measures to determine 
whether those domestic restrictions are "even-ha nded" with export restrictions, as required by 
Article XX(g). 
Are the export restrictions even-handed? 
7.460  The complainants argue that even if one, or some, of the domestic measures that China has 
put in place could be considered to limit (at least  potentially) the amount of minerals produced, China 
would still not have demonstrated that it is en titled to justify its measures under Article XX(g) 
because the domestic measures are not "even-handed" with export restrictions. This is so, they argue, 
because the export quota on refractory-grade bauxite  and the export duty on fluorspar only affect 
users located outside of China, while the domest ic regulations and taxe s apply to domestic and 
foreigners. They argue that the export duties a nd export quotas are thus an added burden on the 
foreign users. Specifically, China imposes on forei gn producers a burden that is not even-handed 
because it is not imposed on Chinese domestic user s of refractory-grade bauxite or fluorspar.733 
7.461  China submits that "even-handed" does not mean "identical" and that paragraph (g) should be 
interpreted to allow China to pursue its goal of economic development. China also claims that 
"[w]ithout China's export restrictions, the burden of  China's supply limitations would be borne unduly 
by China's domestic users, which would undermine China's development".734  
7.462  The Panel recalls the Appellate Body's explanation in US – Gasoline  that "[t]he clause 
[Article XX(g)] is a requirement of even-handedness  in the imposition of restrictions, in the name of 
conservation, upon the production or consum ption of exhaustible natural resources".735 The Appellate 
Body did not address what relative treatment of dom estic and foreign interests was required in order 
to qualify as "even-handed".  But it did say that if  there is no restriction on domestic production or 
consumption, the export restrictions  cannot be said to be even-handed.736 
7.463  China submits, in particular, that its "expor t restrictions on refractory-grade bauxite and 
fluorspar, in conjunction with its production rest rictions, burden domestic consumption as well as 
foreign trade".737 China has not persuaded the Panel that th is is the case. Assuming that a production 
cap limits the production of fluorspar to 100 units annually, and there is an export quota of 40 units 
for that product, China asserts that the combinati on of these two policies limits the quantity that can 
be consumed domestically to 60 units annually.738 However, in order to understand whether a 
production restriction effectively limits domestic cons umption, we need to compare domestic demand 
with the available quantity of the product in the domestic economy. The availability of the raw 
material in the domestic economy depends on whethe r the export quota is fully used. The amount not 
used by the export quota will go to domestic consumption.   
7.464  Therefore, domestic consumption is limite d by a production cap only when the domestic 
demand is greater than the quantity available to th e domestic economy through the application of the 
production and the export caps. The Panel has no inform ation that the China's ca p system ensures that 
this is always the case. Therefore, the mere  existence of a production restriction does not 
automatically imply even-handedness between the export restriction and the domestic restriction.    
                                                      
733 See United States' second written submission, para s 146-162 and 258-275; Me xico's second written 
submission paras. 150-166 and 263- 280; European Unions' second writte n submission para s. 290-298 and 
326-341. 
734 China's first written submission, para. 188. 
735 Appellate Body Report, US – Gasoline , p. 21, DSR 1996:I, 3, at p. 19. 
736 Appellate Body Report, US – Gasoline , p. 21, DSR 1996:I, 3, at p. 19. 
737 China's second written submission, para. 200. 
738 China's second written submission, para. 202. WT/DS394/R 
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  7.465  Since a domestic restriction on production aff ects both domestic and foreign users of the 
resources, the Panel is of the view that China has not demonstrated that its regime for refractory-grade bauxite and fluorspar will not lead to an uneve n-handed imposition on foreigners. Although there is 
no textual basis requiring identical treatment under Article XX(g), it is difficult to see how - if no 
similar or parallel restrictions are imposed at all on domestic users or on domestic consumption and 
all limitations are placed upon the foreign consumers alone  - the export restrictions can be considered 
even-handed.
739 Nor would they appear to be primarily aimed at  or even substantially designed  for 
implementing conservationist goals; on the cont rary "the measure would simply be naked 
discrimination locally [interests]".740 In order to show even-handedness, China would need to show 
that the impact of the export duty or export quot a on foreign users is somehow balanced with some 
measure imposing restrictions on domestic users and consumers. In our view China has not met this 
burden. 
7.466  In sum, the Panel is of the view that China has not demonstrated that its 2009 export 
restrictions were made effective or have since been made effective in conjunction with domestic 
restrictions designed to limit produc tion or consumption in the present. Furthermore, the Panel is of 
the view that China has not demonstrated that its domestic measures aimed at restricting pr oduction or 
consumption impose at present an even-handed bur den on foreign and domestic  consumers. Finally, 
although our conclusions are with respect to the 2009 measures only, the Pa nel noted that the 2010 
measures establish a framework for the imposition of restrictions on domestic consumption or 
production.  However, they do not effectively c onstrain the current leve ls of consumption or 
production.  While it appears that substantive progre ss is being made with regard to the introduction 
of restrictions on domestic production or consumption, it is not yet sufficient to meet the requirements 
of Article XX(g). 
(c) Summary 
7.467  The Panel finds that China's export quota on re fractory-grade bauxite is inconsistent with 
Article XI of the GATT 1994 and China has not de monstrated that its export quota on refractory-
grade bauxite is justified pursuant to Article XX(g) of the GATT 1994. 
7.468  The Panel finds that China's export duties on fluor spar are inconsistent with Article 11.3 of 
China's Accession Protocol and cannot be justifie d by Article XX of the GATT 1994; the Panel finds 
arguendo  that even assuming that Article XX of the GA TT 1994 was available to justify export duties 
in violation of China's Accession Protocol, Chin a has not demonstrated that its export duties on 
fluorspar are justified pursuant to Article XX(g) of the GATT 1994. 
7.469  As we have now reviewed China's export r estrictions on refractory-grade bauxite and 
fluorspar and concluded that they cannot be jus tified under Article XX(g) of the GATT 1994, we do 
not need to examine whether their application is c onsistent with the provisions of the chapeau of 
Article XX of the GATT 1994. This is because when a measure does not meet the requirements of any 
sub-paragraph of Article XX, it cannot be jus tified pursuant to Article XX of the GATT 1994. 
                                                      
739 Appellate Body Report, US – Gasoline , p. 21, DSR 1996:I, 3, at p. 19. 
740 Appellate Body Report, US – Gasoline , p. 21, DSR 1996:I, 3, at p. 19.  WT/DS394/R 
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  3. Whether the export duties and export quota s applied to "scrap" products (magnesium 
scrap, manganese scrap and zinc scrap) and on EPRs (coke, magnesium metal, 
manganese metal and silicon carbide) are ju stified pursuant to Article XX(b) of the 
GATT 1994 
7.470  China invokes Article XX(b) of the GATT 1994 to justify certain export duties and export 
quotas it maintains on certain raw materials. China a sserts that these export restrictions are necessary 
to protect the health of its domestic population, since they reduce the pollution emitted when the raw 
materials are extracted or produced.
741 China divides the products for which it asserts an 
Article XX(b) defence into two categories and ar gues a separate defence under Article XX(b) for each 
category. In its first written submission, China be gins by defending its export duties on so-called 
"scrap" products (magnesium scrap, manganese scrap , and zinc scrap) – i.e., inputs for secondary 
production/recycled materials – pursuant to Article XX(b ). It then proceeds to justify its export duties 
on so-called "metals" or "energy-intensive, highly polluting, resource-based products" ("EPR 
products"), which for the purposes of this dispute are coke, magnesium metal, manganese metal -i.e., 
primary production. China deals finally with its  export quotas on other EPRs (coke and silicon 
carbide) and also defend them unde r Article XX(b) of the GATT 1994. 
7.471  In essence, China argues that the production of magnesium metal, manganese metal, and zinc 
from scrap (i.e., secondary production) is less envi ronmentally harmful than the production of the 
EPRs (i.e., primary production).  According to China, the export duties  on scrap products are 
necessary to ensure a steady supply of scrap products  to the recycling industry, thereby facilitating a 
shift from primary production (polluting) to  secondary production (much less polluting).742 As for the 
export duties  on EPR products, China contends that they will lead to a reduction in the production of 
these raw materials, thus reducing the pollution they cause. Finally, China defends its export quotas  
on silicon carbide and coke (also EPR s) under Article XX(b). Overall, China argues that all the export 
restrictions are part of a comprehensive environmental framework of measures put in place to reduce 
pollution to protect the health of the Chinese populat ion. According to China, Article XX(b) allows 
for the types of export duties and export quotas that it imposes in respect of these products.743 
7.472  In its second written submission, China reform ats the way it presents its defences and 
addresses its restrictions on EPRs first before deali ng with its restrictions on scrap products. In its 
argumentation, China groups together its responses  to claims against its export duties and export 
quotas insofar as they relate to EPR products: these include export duties  on coke, manganese metal, 
and magnesium metals and export quotas  on coke and silicon carbide.  Thereafter, China addresses its 
export restrictions on scrap products: these include  export duties on forms of zinc, manganese and 
magnesium, which China calls the "non-ferrous metal scrap products" (hereafter called "scrap 
products"). The Panel will consider China's defences under Article XX(b) in that order, recalling that 
it is only analysing arguendo China's defence with respect to its export duties on EPRs and on scrap 
products. 
7.473  The Panel will discuss first the legal interpretati on of Article XX(b). S econd, we will consider 
the export restrictions mentioned above and determine whether they are "necessary" to protect the health of the Chinese people. In that context, the Panel will assess the qualitative and quantitative 
argumentation and evidence put forward by China to justify its export restrictions on EPR and on 
scrap products, taking into account the complainants' claims and arguments.  
                                                      
741 China's first written submissi on, paras. 200, 285 and Chin a's second written submission, 
paras. 233.253. 
742 China's first written submission, paras. 316-17. 
743 China's first written submission, paras. 197-201. WT/DS394/R 
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  (a) Interpretation of Article XX(b) of the GATT 1994  
7.474  According to China, Article XX(b) enshrines th e inherent right of WTO Members to regulate  
for the purpose of protecting human, animal or plan t life or health. In particular, Article XX(b) 
requires that the respondent's measure be "necessary" to achieve the stated obj ective. China posits that 
assessing the "necessity" of a measure requires a panel to engage in a process of weighing and balancing a series of factors concerning, in particular:  (i) the (relative) importance of the interests or values at stake; (ii) the extent of the contribution of the measure to the achievement of its objective; 
and, (iii) the trade restrictiveness of the measure.
744 
7.475  For China, a measure can contribute to the stated objective in two different ways. The 
measure can: (i) bring about a material contribution to  the achievement of its objective; and, (ii) be apt 
to produce a material contribution to the objective pursued, even if the contribution is not "immediately observable". China cit es the Appellate Body Report in Brazil – Retreaded Tyres
745 
where the Appellate Body stated that a panel may consider that certain complex public health or 
environmental problems may be tackled only with  a comprehensive policy comprising a multiplicity 
of interacting measures.  With respect to such  complex problems, a "necessary" measure could 
contribute, in the short or long term, to one of th e objectives protected under Article XX(b) as part of 
a policy framework comprising different measures,  resulting in possible synergies between those 
measures.746  
7.476  According to the complainants, to establis h a defence under Article XX(b), China must 
demonstrate that the export duties at issue are "n ecessary to protect human, animal or plant life or 
health." To show that a measure is  for the "protection of" health, the responding party must show that 
(i) there is a risk to human, animal, or plant lif e or health; and (ii) the underlying objective of the 
measure is to reduce the risk.747 Furthermore, the complainants ar gue that in order to satisfy the 
meaning of "necessary" by showing that a measure is  "apt to produce a material contribution to the 
achievement of its objective," the responding Memb er must provide evidence of the relationship 
between the policy tool and the objective. 748  
7.477  The complainants add that it is not sufficient to simply assert that the measure at issue will 
bring about a particular result in the future.  In stead, there must be evid ence that the measure can 
bring about a material contribution to the Member's stated objective.749 A Panel should also assess 
whether or not the contribution that a measure makes, or that a measure is apt to make, is a "material" 
one. The Appellate Body has defined a material cont ribution as one which is "not merely marginal or 
insignificant".  This means that a measure needs to contribute in a significant (or non-marginal) way 
to the achievement of its objective, which in the case of Article XX(b) is the "protection of human, 
animal, or plant life or health".  Finally, the compla inants suggest that in line with the Appellate Body 
Report in Brazil – Retreaded Tyres, a panel should take into acc ount WTO-consistent, reasonably 
                                                      
744 China's first written submission, paras. 203 and 209. 
745 Appellate Body Report, Brazil – Retreaded Tyres , para. 151. 
746 China's first written submission, paras. 215 and 220. 
747 European Union's second written submission, pa ra. 344; United States second written submission, 
para. 45; Mexico's second written submission, para. 49. 
748 European Union's second written submission, paras. 353, and 354; United States' second written 
submission, para. 47; Mexico's second written submission, para. 51. 
749 European Union's second written submission para. 355; United States' second written submission, 
para. 47; Mexico's second written submission, para. 51.  WT/DS394/R 
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  available alternative measures in deciding whethe r Article XX(b) is available to justify a WTO-
inconsistent measure.
750 
(i) Whether the measure falls within the range of  policies designed to protect human, animal or 
plant life or health  
7.478  For a measure to be justified under Article XX( b), the measure must be "necessary to protect 
human, animal or plant life or health" and also mu st comply with the chapeau of Article XX.   
7.479  Thus a panel must, first, determine whether th e challenged measure falls within the range of 
policies designed to protect human, animal or plant life or health.751  Panels and the Appellate Body 
have examined both the design and structure of a challenged measure to decide whether its objective 
is the protection of life and health, generally s howing a degree of deference to Members' policies 
designed to "protect human, animal or plant life or  health". A broad range of policies have been 
recognized as protecting human, animal, and plant lif e or health, such as the reduction of air pollution 
resulting from the consumption of gasoline752; and the reduction of the risks arising from the 
accumulation of waste tyres.753  Panels and the Appellate Body ar e, however, not entitled to question a 
Members' chosen level  of protection.754  WTO Members enjoy "the right to determine the level of 
protection of health that they consid er appropriate in a given situation".755 
7.480  A panel must thereafter ensure that a meas ure is "necessary" to fulfil the invoked policy 
objective.  Article XX(b) requires that a Member's measure is "necessary" to achieve the objective it 
pursues. The degree of necessity envisioned was examined by the Appellate Body in Korea – Various 
Measures on Beef , where it concluded that a "necessary" measure is, in a continuum, located 
significantly closer to the pole of "indispensable" than to the opposite pole of simply "making a contribution to".
756  The Appellate Body further elaborated th at an assessment of necessity involves "a 
process of weighing and balancing a series of fact ors which prominently include the contribution 
made by the compliance measure to the enforcement of the law or regulation at issue, the importance 
of the common interests or values protected by that  law or regulation, and the accompanying impact 
of the law or regulation on imports or exports."757 
7.481  More recently in Brazil – Retreaded Tyres , the Appellate Body reitera ted its view that "[i]n 
order to determine whether a measure is 'necessar y' within the meaning of Article XX(b) of the 
GATT 1994, a panel must consider the relevant factors,  particularly the importance of the interests or 
                                                      
750 European Union's second written submission, para. 356  United States' second written submission, 
para. 46: Mexico's second written submission, para. 49. 
751 For instance the Panel in EC – Tariff Preferences  also clearly set out the requirements of Article XX 
(b) of the GATT. "Following this jurisprudence, the Pa nel considers that, in order to determine whether the 
Drug Arrangements are justified und er Article XX(b), the Panel needs to examine: (i) whether the policy 
reflected in the measure falls within the range of policies designed to achieve the objective of or, put differently, 
whether the policy objective is for the pu rpose of, 'protect[ing] human … life or health'. In other words, whether 
the measure is one designed to achieve that health policy objective;....".  Panel Report, EC – Tariff Preferences, 
para. 7.199. 
752 Panel Report, US – Gasoline , para. 6.21. 
753 Panel Report, Brazil – Retreaded Tyres , paras. 7.108 and 7.115. 
754 Appellate Body Report, EC – Asbestos , para. 168; Appellate Body Report, Brazil – Retreaded 
Tyres , para. 140.   
755 Appellate Body Report, Brazil – Retreaded Tyres , paras. 140 and  210; see  also  Appellate Body 
Report, EC – Asbestos , para. 168; Appellate Body Report, US – Gasoline , p. 30, DSR 1996:I, 3, at p. 28. 
756 Appellate Body Report, Korea – Various Measures on Beef, para. 161. 
757 Appellate Body Report, Korea – Various Measures on Beef , para. 164;  see also, e.g., Panel Report, 
EC – Tariff Preferences , paras. 7.209 and 7.213; Appellate Body Report, Brazil – Retreaded Tyre s, para. 141; 
Appellate Body Report, China – Publications and Audiovisual Products , para. 239. WT/DS394/R 
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  values at stake, the extent of the contribution to the achievement of the measure's objective, and its 
trade restrictiveness."
758  It concluded that a measure contributes to the achievement of the objective 
"when there is a genuine relationship of ends and means between the objective pursued and the 
measure at issue"759 and that a measure is necessary if it is "apt to make a material contribution to the 
achievement of its objective".760 
(ii) The importance of the interests or values at issue 
7.482  The Appellate Body recognized that "[t]he more  vital or important [the] common interests or 
values" behind the policies pursued, "the easier it would be to accept as 'necessary' a measure 
designed as an enforcement instrument".761  Applied to Article XX(b), the Appellate Body has stated 
that "few interests are more 'vital' and 'important' than protecting human beings from health risks, and 
that protecting the environment is no less important".762   
7.483  The Panel recalls that China invokes Article XX( b) in order to justify measures it says are 
necessary to protect the environment and the hea lth of the Chinese population. The complainants 
contest China's contention as to the objective of its ex port restrictions.  For the complainants, the real 
objectives of the measures, many of which have been in place for years, is economic: to provide inexpensive raw materials for its downstream industry. 
(iii) The contribution of the measure to the objective pursued 
7.484  The Appellate Body Report in Brazil – Retreaded Tyres  distinguished between two types of 
contributions: the measure that "brings about" a ma terial contribution to the achievement of its 
objective; and the measure that "is apt to produce"  a material contribution to the objective pursued.
763  
In China – Audiovisual Products, the Appellate Body emphasized again that "the greater the 
contribution a measure makes to the objective pursued , the more likely it is to be characterized as 
'necessary'".764   
7.485  It is also accepted that a measure could be c onsidered "necessary" even if the contribution of 
the measure "is not immediately observable".765 As noted above the Appellate Body observed that 
"certain complex public health or environmental problems may be tackled only with a comprehensive 
policy comprising a multiplicity of interacting measures".766  As noted by the Appellate Body, with 
respect to such complex problems, the Appellate  Body does not preclude the possibility that a 
"necessary" measure could contribute to one of the objectives protected under Article XX(b) as part of 
a policy framework comprising different measures,  resulting in possible synergies between those 
measures.767 The Appellate Body in Brazil – Retreaded Tyres  confirmed that "in the short-term, it 
may prove difficult to isolate the contribution to public health or environmental objectives of one 
                                                      
758 Appellate Body Report, Brazil – Retreaded Tyres , para 178 . 
759 Appellate Body Report, Brazil – Retreaded Tyres , para. 145. 
760 Appellate Body Report, Brazil – Retreated Tyres,  para 150, 151. 
761 Appellate Body Report, Korea – Various Measures on Beef , para. 162; Appellate Body Report, EC 
– Asbestos , para. 172. 
762 Appellate Body Report, Brazil – Retreaded Tyres , paras. 144 and 179. 
763 Appellate Body Report, Brazil – Retreated Tyres,  para. 151. 
764 Appellate Body Report, China – Publications and Audiovisual Products , para. 251; Appellate Body 
Report, Korea – Various Measures on Beef , para. 163. 
765 Appellate Body Report, Brazil – Retreaded Tyres , para. 151. 
766 Appellate Body Report, Brazil – Retreaded Tyres , para. 151. 
767 See Appellate Body Report, Brazil – Retreaded Tyres , para. 172.  WT/DS394/R 
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  specific measure from those attributable to the other measures that are part of the same comprehensive 
policy".
768 
7.486  Finally, it is important also to remember that the contribution of the measure can be 
demonstrated quantitatively and/or qualitatively: 
"Such a demonstration can of c ourse be made by resorting to evidence or data, 
pertaining to the past or the present , that establish that the import ban at issue makes 
a material contribution  to the protection of public h ealth or environmental objectives 
pursued. This is not, however, the only type  of demonstration that could establish 
such a contribution… …[A] demonstration could consist of quantitative projections 
in the future, or qualitative reasoning based on a set of hypotheses that are tested and 
supported by sufficient evidence."769 (emphasis added) 
(iv) The trade restrictiveness of the measure 
7.487  In examining the trade restrictiveness of a measure, the Appellate Body in Korea - Various 
Measures on Beef considered the measure's effect "on international commerce".770  Essentially, "[t]he 
less restrictive the effects of the measure, the more  likely it is to be characterized as 'necessary'".771  In 
the event of a very restrictive measure, th e respondent Member must demonstrate that: 
"[t]he measure is carefully designed so th at the other elements to be taken into 
account in weighing and balancing the fact ors relevant to an assessment of the 
"necessity" of the measure will "outweigh" such restrictive effect."772 
7.488  This is consistent with the understanding that an inquiry into the necessity of a measure is a 
holistic process. 
(v) Availability of WTO-consistent or less trade restrictive alternative measures  
7.489  Finally, if the analysis described above yields  a preliminary conclusion that the measure is 
necessary, this result must be confirmed by comparing the challenged measure with possible 
alternatives suggested by the complainants.773  T h e  US – Gambling  and Brazil – Retreaded Tyres  
reports established how the burden of proof would be allocated in establishing whether a reasonably 
available alternative exists.  As the Appellate Body indicated in US – Gambling774, while the 
responding Member must show that a measure is n ecessary, it does not have to "show, in the first 
instance, that there are  no reasonably available alternativ es to achieve its objectives."   
7.490  Alternative measures must be WTO-consistent while providing an equivalent contribution to 
the achievement of the objective pursued through the challenged measure.775 Nevertheless, the mere 
existence of an alternative measure is not suffici ent to prove that the disputed measure is not 
"necessary". Citing US – Gasoline , the Appellate Body in Brazil – Retreaded Tyres  confirmed that a 
proposed alternative must preserve "for the responding Member its right to achieve its desired level of 
                                                      
768 Appellate Body Report, Brazil – Retreaded Tyres , para. 151. 
769 Appellate Body Report, Brazil – Retreaded Tyres , para. 151. 
770 Appellate Body Report, Korea – Various Measures on Beef , para. 163, footnote 105. 
771 Appellate Body Report, China – Publications and Audiovisual Products , para. 310. 
772 Appellate Body Report, China – Publications and Audiovisual Products , para. 310. 
773 Appellate Body Reports, US – Gambling , para. 311. 
774 Appellate Body Reports, US – Gambling , para. 309 and Brazil – Retreaded Tyres , para. 156. 
775 Appellate Body Report, Brazil – Retreaded Tyres , para. 156; Appellate Body Report, US – 
Gambling , para. 307; Appellate Body Report, Korea – Various Measures  on Beef , para. 166. WT/DS394/R 
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  protection with respect to the objective pursued".
776  Moreover, such alternative cannot be "merely 
theoretical in nature, for instance, where the respondi ng Member is not capable of taking it, or where 
the measure imposes an undue burden on that Memb er, such as prohibitive costs or substantial 
technical difficulties".777 If the complaining Member has put fo rward a possible alternative measure, 
the responding Member may seek to show that the proposed measure does not allow it to achieve the 
level of protection it has chosen and, therefore, is not a genuine alternative that is, in fact, "reasonably 
available".778   
7.491  Also relevant in a panel's assessment of availa ble alternatives is the capacity of the challenged 
Member "to implement remedial measures that w ould be particularly costly, or would require 
advanced technologies".779 
7.492  In sum, we understand that a panel cannot rej ect an environmental protection measure, or a 
public health measure, by pointing to a WTO-consistent or less trade-restrictive alternative, unless 
that alternative is both practica lly and financially feasible for the Member seeking to justify a WTO-
inconsistent measure under Article XX(b) and provides an equivalent contribution to the achievement 
of the objective pursued.780 
7.493  Having reviewed the panel and Appellate  Body case law on the interpretation of 
Article XX(b), we now proceed to determine whet her China's export restrictions on EPRs can be 
justified pursuant to GATT Article XX(b). 
(b) Export restrictions on EPRs781 
7.494  As noted earlier, China divides the products for which it asserts an Article XX(b) defence into 
two categories and asserts separate but related defences for each category.782 China contends that its 
export duties and quotas on magnesium metal and ma nganese metal, coke and silicon carbide are 
justified under Article XX(b) on the grounds that production of these EPRs (i.e., primary production) 
is environmentally harmful. The export restrictions on these products, according to China, will lead to 
a reduction of production of these metals (because of the reduced demand for them outside China) and 
therefore a reduction of the pollution associated with their production.783 China also argues that its 
export duties on magnesium scrap, manganese scrap, and zinc scrap (used as inputs in secondary 
production/recycling) are justified under Article  XX(b) and that secondary production should be 
favoured over EPRs because it is more environmen tally friendly than the highly polluting production 
of EPRs. The export duties on scrap are necessary to  ensure a steady supply of scrap and thereby 
facilitate a shift from primary production to sec ondary production.784 According to China, its system 
will reduce the production of EPRs and stimulate the production of the more environmentally friendly 
products. 
                                                      
776 Appellate Body Report, US – Gambling, para. 308. 
777 Appellate Body Report, US – Gambling, para. 308. 
778 Appellate Body Reports, Brazil – Retreaded Tyres , para. 156 and US – Gambling , para. 311. 
779 Appellate Body Reports, Brazil – Retreaded Tyres , para. 171 citing, at the end of the quotation, US 
– Gambling , para. 308. 
780 Appellate Body Reports, Brazil – Retreaded Tyres , para. 156.  The Pane l notes that even the 
Appellate Body has referred to less-trade restrictive and WTO-consistent alternatives interchangeably in its 
discussions of the appropriate type of alternatives to be considered in th e context of an Article XX necessity 
test. 
781 Export duties on manganese metal, magnesium metal and coke and export quotas on coke and 
silicon carbide. 
782 China's first written submission, para. 197. 
783 China's first written submission, paras. 257-59. 
784 China's first written submission, paras. 316-17.  WT/DS394/R 
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  7.495  In undertaking our Article XX(b) analysis, we must, examine whether the policy reflected in 
the measures at issue falls within the range of po licies designed to achieve the objective of protecting 
human life or health, or, put differently, whet her the policy objective is for the purpose of 
"protect[ing] human … life or health." 
7.496  However, before the Panel examines the measure s imposing the export restrictions at issue, 
we wish to make two points. First, we note that China maintains several export restrictions for which 
it chose not to invoke any justification.
785 When the Panel asked China to explain why it was invoking 
the Article XX justification for some export restricti ons but not for other simila r restrictions on similar 
products, China responded it "offered justifications for its export quotas and export duties where it 
believes that its arguments and evidence demonstr ate that the measures satisfy the terms of the 
particular provisions". It added that  "China is not required to jus tify each measure alleged to be WTO-
inconsistent".786 China did not explain the relationship betw een the invocation of its broad societal 
environmental and health concerns and other export restrictions for wh ich it is not attempting to offer 
any (environmental-health) justification.   
7.497  The second point is that, although we have divided our findings along the argumentation 
followed by China in its second written submission- that  is, we deal with restrictions, first, on EPRs, 
and second, on scrap products - we note that several  of those restrictions (export duties or export 
quotas on different products) are found together in a single measure. We propose to review those 
"compound" measures only once and thereby avoid repe titive findings. Thus, in the following section 
we review all measures imposing export restricti ons on EPRs and on scrap products. We will follow a 
similar approach for our analysis of measures propo sed as alternatives to China's export restrictions. 
Indeed, given that China asserts that its measures on scrap and EPRs are part of a comprehensive environmental framework whose goal is to replace EPR s by an increased use of scrap alternatives, 
examining the measures together seems highly appropriate.  
(i) Whether the objectives of the me asures are the protection of health and the environment 
7.498  China claims that its export restrictions on EPRs are justified as they will reduce pollution 
caused by the production of the restricted exports and lead to better health for the Chinese population.  
China points to a number of laws and regulations as well as policy statements that it says provide 
evidence that those export restrictions are part of a comprehensive environmental protection framework whose objectives are pollution reduction for the protection of health of the Chinese 
population, energy conservation, and transfor mation into a "circular economy" or "recycle 
economy".
787  
7.499  The complainants challenge China's declared goa l; they submit that China's export restrictions 
are not designed to address the health risks associ ated with environmental pollution. Rather, they 
argue, China's invocation of environmenta l and health concerns is merely a post hoc rationalization 
developed solely for purposes of this dispute. For the complainants, China's export restrictions are 
designed to promote increased production of high va lue-added downstream products that use the raw 
materials at issue in this disput e as inputs. The export restrictions serve to lower the price for these 
inputs in China and thereby facilitate the production of downstream products. For them, this fact is 
confirmed by the dramatic growth in Ch ina's exports of steel and aluminium.788 They argue that China 
                                                      
785 See para. 7.237 above. 
786 China's response to the Panel question No. 12 following the second substantive meeting, para. 35. 
787 China's first written submission, paras. 224-227. 
788 United States' second written submission para. 36 . Mexico's second written submission, para. 39. WT/DS394/R 
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  cannot present any environmental justification fo r discriminating against industrial users located 
outside of China in favour of industrial users within China.
789 
7.500   The Panel recalls that when assessing a measur e pursuant to Article XX(b), its first enquiry 
should be whether China's export restrictions fall within the range of policies designed to protect 
human, animal or plant life or health. This determ ination should be done in light of the design and 
nature of the challenged measures. The Panel tu rns now to review the measures imposing the 
restrictions at issue, as well as all laws and regul ations submitted by China as evidence that the goal of 
those export restrictions is, and has always been, the reduction of pollution and the protection of the 
health of its population. 
7.501  The Panel observes, first, that the measures impos ing the export restrictions at issue in this 
dispute790 do not make any mention of environmental or health concerns.   
7.502  In its first written submission, China claims th at "[t]he export duties on the EPR products are 
an integral part of China's comprehensive envir onmental policy aimed at reducing the health risks 
related to the production of these products".791 It then states that they "are taken in implementation of 
the Eleventh Five-Year Plan for Environmental Protection (2006-2010).792  The Panel reviewed this 
Eleventh Five-Year Plan for Environmental Prot ection (2006-2010) and found no reference to the 
measures challenged in this dispute. There is no mention that export duties or export quotas on raw 
materials would or could have the objective of reducing pollution caused by their production with a 
view to improving the health of China's population.  Nor does the Plan refer to export restrictions 
more generally. The only passage that mentions  the objective of environmental protection and 
resources is the following: 
"Environmental protection requirements will be taken into account when introducing 
or reforming resource tax, consumption tax and import & export tax. China will 
explore the establishment of environmental taxation system and employ tax lever to 
facilitate the development of a resource saving and environment-friendly society". 793 
7.503  In our view, there appears to be no connec tion between the challenged measures and the 
Eleventh Five-Year Plan for Envi ronmental Protection (2006-2010) , and it is not clear from the 
evidence before us that they were ta ken "in implementation of" that Plan.  
7.504  In its second written submission, China adds refe rences to what it considers contemporaneous 
evidence (laws adopted between 2005 and 2010) s howing that China has always, and explicitly, 
linked its export restrictions to the objective of controlling pollution and of reducing the risk to 
human, animal, and plant life and health occurring  in connection with the production of the EPR 
products at issue.  It maintains that its expor t measures play a key role in its comprehensive 
environmental framework to reduce pollution.794  China refers the Panel to a Circular on the Measures 
to Control the Export of EPR products explaining th e environmental problems said to be created and 
exacerbated by the high level of exports of EPR products.795  The Circular states: 
                                                      
789 Complainants' joint opening oral statement at the first substantive meeting, paras. 11-13, 97-98. 
790 See para. 2.4 above. 
791 China's first written submission, para. 308. 
792 Eleventh Five-Year Plan fo r Environmental Protection  (2006-2010) (Exhibit CHN-123). China's 
first written submission, para. 312. 
793 Ibid . 
794 China's second written submission, para. 233. 
795 China's second written submission, para. 234.  WT/DS394/R 
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  "The massive export  of high-energy-consumption, high-pollution and resource based 
products overloaded upon the exterior conditi ons as energy, resources, environment, 
and transport, and had side effect upon the sound and steady operation of our 
national economy  ... [The] control of the export of high-energy-consumption, high-
pollution and resource-based products was utterly necessary for the […] reduction of 
environmental pollution, freeing the econom ic development from the limitation by 
resource and alleviating the tense rela tions among coal, electricity and oil".
796 
7.505  The Panel notes in this context the Circular on the Measures to Control the Export of EPR 
products .  In its first written submission China indicat es that export quotas on coke and silicon carbide 
were initially imposed in the context of anti-dum ping measures taken by the United States and the 
European Union on these two products.797 China does not contest this fact but contends that the 
continued application of export quotas on th e two products was deemed necessary as the 
environmental situation increasingly worsened.798 In the excerpts quoted above, reference is made to 
the environment, but it also refers to energy, tr ansport, the economy and economic development. In 
this sense, this evidence can be said to support th e complainants' position that the objective of the 
measures is economic development, not environmental and health prot ection. There is no reference to 
the need, or a plan, to put in place export quotas or export duties on any of the products concerned in 
this dispute.  Secondly, the Panel observes that Articles I and II of the Circular on the Measures to 
Control the Export of EPR products  state that the export of high-energy-consumption, high-pollution 
and resource-based products have bur dened the environment, but no explicit link is made between the 
export measures and the objective of reduc ing pollution resulting from the production  of EPR 
products.  China has not demonstrated through this Circular on the Measures to Control the Export of 
EPR products  that the export measures placed on EPR or scrap products relate to or otherwise form 
part of a plan whose objective is to contribute to the reduction of pollution caused by the production 
of these products. 
7.506  China further contends that an explicit link betw een the application of export restrictions and 
environmental objectives was made in the 2006 and 2007 announcements of the application of export 
tariffs to EPR products799, and reaffirmed in 2008 in the context of announcing the 2009 Further 
Adjust of Import and Export Tariffs .800 In these announcements, China clarifies that these export 
duties "are targeted at high energy-consump tion commodities, high-pollution commodities and 
resource-based commodities"801, without referring to the effect levying export duties will have in 
achieving a reduction in pollution during productio n of EPR products. For us, the link between 
applying export restrictions and achieving environm ental objectives is far from explicit.  Moreover, it 
is unclear how the measures at issue significantly li mit the production of EPR goods, and, therefore, 
achieve the environmental objective.  It is also unclear how the export measures at issue serve to 
conserve commodities. 
7.507  China also submits, as support for its contention that the export restrictions form part of a 
comprehensive environmental policy, both the Eleventh Five-Year Plan for Environmental Protection 
(2006-2010),  which states "environmental protection requirements will be taken into account when 
                                                      
796 Exhibit CHN-444: Circular on the Measures to C ontrol the Export of EPR products , Article I and II 
(emphasis added) and CHN-366 EU Anti-Dumping Orders.  
797 Exhibit CHN-366: EU  Anti-dumping Orders.  
798 China's second written submission, p.77, footnote 300. 
799 China's second written submission, paras 236-238, pp. 77-78. See, Exhibit CHN-452: 2006 Adjust of 
Interim Tariff Rates of Certain Import and Export Commodities.   
800 Exhibit CHN-100: 2009 Further Adjust of Import and Export Tariffs . 
801 China's second written submission,  para. 236, pp. 77-78. WT/DS394/R 
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  introducing or reforming… export tax,"
802 and the Guidelines of the Eleventh Five-Year Plan for 
National Economic and Social Development , mandating a "[strict] [execution]… [of] environmental 
protection standards and control [of] high-en ergy consumption, high pollution and resource 
products".803 This principle is further reaffirmed in the 2007 Plan for Energy Conservation and 
Pollutant Discharge Reduction804 and the 2008 and 2009  Work Arrangement for Energy Conservation 
and Pollutant Discharge Reduction.805 The Panel does not dispute that these statements, like other 
evidence discussed above reflect China's concern with regard to pollution caused by EPR products. 
However, the Panel still needs persuasive evidence of a connection between environmental protection 
standards and export restrictions. Nor is there evidence  that export restrictions are to be put in place as 
part of a comprehensive programme or at least a stated objective to ensure "environmental protection". 
7.508  China submits additional measures to seek to illust rate its claim that the export restrictions 
form part of a comprehensive environmenta l framework addressing the overall environmental 
objective of reducing pollution resulting from the production of EPR products  and the consequent 
risks to human, animal, and plant life and health.
806  China identifies the Energy Conservation Law 
and the 2007 Plan for Energy Conservation an d Pollutant Discharge Reduction  as two documents 
which outline the environmental purpose of Chin a's export measures. The Panel notes that the Energy 
Conservation Law  states that "the State uses tax and other policies to…control the export of highly 
energy-consuming and serious-pollution products".807  This does not shed light on any  environmental 
purpose of the measures in question; rather we learn that exports will be controlled.  The reference to 
serious pollution is descriptive of the products affected  by the restrictions, but there is no explanation 
of how such measures operate toge ther with export restriction policies on raw materials to reduce 
pollution caused by their production.   
7.509  China also submits a number of other measures, including the Law on the Prevention and 
Control of Water Pollution808, which the Panel does not find directly  related to its assessment of the 
contribution of the specific export measures at issue to the objective of reducing pollution and protecting the environment for the health of the Chinese population.
809 
                                                      
802 Exhibit CHN-123: Eleventh Five-Year Plan for Envi ronmental Protection (2006-2010) , Section 
V(IV), Article 2, paras. 1-2, pp. 19-20. 
803 Exhibit CHN-144:  Guidelines of the Eleventh Five-Year  Plan for National Economic and Social 
Development , Part 9, Chapter 35, Section I, p.41. 
804 Exhibit CHN-145: 2007 Plan for Energy Conservation and Pollutant Discharge Reduction . 
805 Exhibit: CHN-287: 2008 Arrangement for Energy Conservation and Pollutant Discharge Reduction 
and Exhibit CHN-288: 2009 Arrangement for Energy Conservation and Pollutant Discharge Reduction . 
806 China's second written submission, para. 242. 
807 Exhibit CHN-272: Energy Conservation Law, Article 36. 
808 Exhibit CHN-269. 
809 The Panel also notes Ch ina's argument that the Circular of the State Council on Approving and 
Forwarding Implementation Plans and Measures for Statistic, Monitoring and Examination on Energy 
Conservation and Pollutant Discharge Reduction "[includes] measures to improve enforcement of, and 
compliance with, environmental regulations…" (China's second written submission, para 245, p.80).  However, 
in the Panel's opinion this Circular does not explain the co ntribution of the export restrictions to the objective of 
protecting the environment. Energy-intensive industries can be monitored for the purpose of applying various 
other measures not limited to export restrictions. The Panel applies the same reasoning to the Circular of the 
Ministry of Environmental Protec tion on Further Strengthening the Checks on Clean Production of Key 
Enterprises which subjects polluting industries to compulsory clean production examinations by the 
government; and to the Law of the PRC on Environm ental Impact Assessments , the Circular of the Ministry of 
Environmental Protection on Furthe r Strengthening the Checks on Clea n Production of Key Enterprises and the 
Law of the PRC on Promoting Clean Production . These various laws can be applied independent of applying 
export restrictions.  WT/DS394/R 
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  7.510  The Panel also takes note of the revised Coking Industry Entrance Rules
810, the Law on the 
Promotion of Recycle Economy811, the Policies and Actions for Addressing Climate Change812, the 
2008 Arrangement for Energy Conservati on and Pollutant Discharge Reduction813, the Adjustment 
and Revitalization Plan for Non- Ferrous Industry814, the Guidance for Enhancing the Management of 
Raw Materials Industries815, the Law on Renewable Energies816, and the 2009 Arrangement for 
Energy Conservation and Pollutant Discharge Reduction817, all of which contain language stressing 
the importance of controlling the export of "highl y energy-consuming, highly polluting and resource-
intensive" products without indicating whether and how controlling the exports will contribute to a 
decrease in pollution as part of a comprehensive e nvironmental framework. China further submits the 
Announcement of Publishing the Catalogue of High- Energy Consumption Electromechanical 
Equipment818 and the Circular on Strengthening the Elimination of Outdated Capacity819 to encourage 
the reduction of pollution in energy-intensive industries.820 The first one, for example, provides that 
China will speed up elimination of outdated production capacity and outdated high-energy-
consumption equipment.   
7.511  In the Panel's view, all of these measures are evidence of China's considerable efforts to 
regulate in the interest of protecting the environment.  The breadth of China's measures touching on environmental (and other) matters is impressive.  However, commendable as China's efforts might be, 
we do not discern in this array of measures a comprehensive framework aimed at addressing environmental protection and health.  More importa ntly, we do not find evidence that the export 
measures at issue in this dispute form part of an y such framework. This is not to say that Members 
can only succeed in justifying their measures u nder Article XX(b) by producing one or more 
instruments stating explicitly that a challenged measure has been put in place because it is necessary 
to protect human, animal or plant life or health, or that such instrument details the manner in which its 
objective will be achieved.  However, in our view, a Member must do more than simply produce a list 
of measures referring, inter alia , to environmental protection and pollu ting products.  It must be able 
to show how these instruments fulfil the objective it claims to address. 
7.512   Thus the Panel concludes that neither the m easures implementing the export restrictions, nor 
the contemporaneous laws and regul ations, convey in their texts that the export restrictions are 
contributing to, or form part of, a comprehens ive programme for the fulfilment of its stated 
environmental objective. The documents submitted by Ch ina, either on their own or taken together do 
not sufficiently indicate that the export restri ctions seek to reduce pollution resulting from the 
production of EPR products.   
7.513  As we have mentioned, the Panel finds that numerous measures brought forth show the extent 
of China's concern for the need to promote energy  conservation.  The multiple measures submitted by 
                                                      
810 Exhibit CHN-192. 
811 Exhibit CHN-101. 
812 Exhibit CHN-420. 
813 Exhibit CHN-287. 
814 Exhibits JE-13, CHN-99. 
815 Exhibit JE-10. 
816 Exhibit CHN-273. 
817 Exhibit CHN-288. 
818 Exhibit CHN-478. 
819 Exhibit CHN-479. 
820 In this regard, the Panel also takes note of the Law on the Prevention and Control of Environmental 
Pollution by Solid Wastes (Exhibit CHN-270), the Regulations on the Administration of the Charging and Use 
of Pollutant Discharge Fee  (Exhibit CHN-279), the Measures for the Administration of the Rates for Pollutant 
Discharge Fees  (Exhibit CHN-278) , the Environmental Protection Law of the PRC, the Law of the PRC on the 
Prevention and Control of Atmospheric Pollution  (CHN-268)  and the Mineral Resources Law  (CHN-78) . WT/DS394/R 
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  China reaffirm China's insistence on using export restri ctions to limit the export of what it calls in this 
dispute the "EPR products". However, this collec tion of documents only seems to constitute a policy-
goal declaration, but does not set out how such environmental goals might be implemented. And 
finally, it makes no mention of specific domestic measures on production or conservation, and how 
these might figure in attaining the policy objectives.  
7.514   Some of the evidence submitted by the compla inants seems to indicate that, contrary to 
China's assertions, the export duties at issue bear a direct relationship to the economic goal of moving 
the products in question up the value chain.
821 For instance, in response to a Panel question, which 
asks why China prefers export restraints over produ ction restrictions for purposes of environmental 
protection, China states:  
"[T]he imposition of export restrictions w ill allow China to develop its economy in 
the future . . . The reason for this is that  export restraints encourage the domestic 
consumption of these basic materials in th e domestic economy.  Consumption of the 
basic materials at issue by downstream indus tries (such as the steel, aluminium, and 
chemical industries, and those industries further processing steel, aluminium and chemicals into), and the consequent add itional production and export of higher value-
added products, will help the entire Chinese economy grow faster and, in the longer 
run, move towards a more sophisticated production bundle, away from heavy reliance on natural resource, labor-intensive, highly polluting manufacturing.  This move 
towards higher-tech, low-polluting, high valu e-added industries, in turn, will increase 
growth opportunities for the Chinese econom y, generating positive spillovers beyond 
those to firms directly participating in these markets".
822 
7.515  The Panel wishes to note its concern at the syst emic implications of China's arguments under 
Article XX(b), as this provision could then be interpre ted to allow the use of export restrictions on any 
polluting products on the ground that export restri ctions reduce the production of these products and 
thus pollution.  Furthermore, Chin a's argument, if accepted, could then  be interpreted to allow such 
restrictions on any raw materials simply because they  help increase growth, and,  in turn, eventually 
reduce pollution. Hence, the requirement is cr ucial under Article XX that only those export 
restrictions that bring about a material contributi on to the environmental policy goal are accepted as 
WTO-consistent.   
7.516  The Panel finds, therefore, that China was unabl e to substantiate its claim that its export 
restrictions on EPRs or scrap products are part of a comprehensive programme maintained in order to 
reduce pollution resulting from the production of EPRs.   
7.517  The Panel will proceed now to examine whether th e imposition of export restrictions is apt to 
materially contribute to the reduction of pollution cau sed by the extraction of those raw materials and 
consequently the improvement of the health of  the Chinese population, within the meaning of 
Article XX(b).  
                                                      
821 Exhibit JE-158, p.5. The United States and Mexico also suggest that "The export duties serve to 
lower the price for these inputs in China and thereby facilitate the production of downstream products.  
Numerous statements in high-level Chinese documents and statements made in the course of this dispute 
confirm this fact.  This fact is also confirmed by the dr amatic growth in China's expo rts of steel and aluminium" 
and they refer to Magnesium Key Facts at Tables 20 and 21, p. 19-20 (Exhibit JE-152).  The complainants also 
argue that the term EPRs is not used in any of the do cuments submitted by China, suggesting that it was created 
for the purpose of this dispute, but was not consider ed in the context of China's environmental policies. 
822 China's comments on the complainants' response to the Panel's question No. 43 following the first 
substantive meeting  (Exhibit CHN-442), para. 19.  WT/DS394/R 
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  (ii) Whether the measures contribute ma terially to the goal of protec ting the health of the Chinese 
population 
7.518  The Panel's understanding of the Appellate Body's decision in Brazil – Retreaded Tyres is that 
whether or not the export restrictions on EPRs can  be considered necessary for the protection of the 
health of the Chinese people depends on whether such measures are apt to contribute materially  to the 
realization of China's declared objective of reducing pollution caused by the production of EPRs. China interprets the Appellate Body's ruling in Brazil – Retreaded Tyres  as suggesting that the 
"contribution" of trade restrictions for the purposes of Article XX(b) should be assessed both 
currently and in the future. 
7.519  China asserts that the export restrictions at issue are currently  making a material contribution 
to the objective of reducing the health risks associated with the pollution generated by the production 
of coke, magnesium metal, manganese metal a nd silicon carbide. This is because, under normal 
economic conditions, export restrictions reduce the demand for exports and, in turn, this decreases 
domestic production.  In suppor t of this claim, China adduces two empirical studies.
823 One study 
estimates the effect of an export duty on mangane se metal and magnesium metal and of an export 
quota on silicon carbide, using a simu lation model of demand and supply.824 The other study uses a 
regression analysis model to estimate the effects of the imposition by China of an export duty and a quota on coke.
825 The results of the simulations indicate that  the elimination of the export duty of 10% 
on magnesium metal would result in an average increase in domestic production by 1.65%; 
elimination of the export duty of 20% on mangane se metal would imply an increase in production by 
4.28%; and elimination of the export quota of 0. 216 million metric tonnes on silicon carbide would 
increase production by 3.55%.826 
7.520  The results of the regression analysis on coke  indicate that eliminating the 40% export duty 
on coke would increase domestic production of coke by 2.2%.827 China asserts that the export duty is 
the actual "biting" constraint on the exports of coke;828  in these circumstances, the effect of the export 
quota is to limit exports only in the event of a large increase in the foreign demand for coke.829 
                                                      
823 Exhibits CHN-124 and CHN-147. 
824 In Exhibit CHN-124, the impact of an export tax on quantities produced (consumed) is determined 
using the domestic supply (demand) price elasticities. The domestic supply (demand) elasticity is defined as the 
percentage change in production (consumption) associated with a 1% change in China's domestic prices (prices 
Chinese producers receive when they sell at home).  Therefore the percentage change in production 
(consumption) following the elimination of the duty is obtained by multiplying China's supply (demand) 
elasticity by the percentage change in the prices. To determine the impact of an export quota on the quantity 
produced (consumed) domestically, the 'export tax equivalent' of the quota (i.e., the tax that would result in the 
same level of exports as determined by the quota) is calculated as the price differential between domestic and 
export prices. Then, the impact of the export quota on the quantities produced (consumed) domestically is 
estimated using the simulation model just described for the tax. 
825 Exhibit CHN-147. Regression analysis is performed by associating (observational) data to a 
statistical relationship, which expresses a certain dependent variable as a function of other (independent) 
variables, plus an error term. This relationship can be specified in many different ways. We refer to different 
specifications with the expression "regression models".  The aim of estimating a regression model is to 
understand the effect of the change of a certain independent variable on the dependent one, while the other 
independent variables (included in the right hand side of the model) are held fixed. 
826 China's first written submission, para. 319 (f or magnesium metal and manganese metal) and 
para. 550 (for silicon carbide). 
827 Initially, China reported effects of 6.6% of dom estic production (Exhibit CHN-147). This estimate 
was subsequently corrected by China in Exhibit CHN-519, para. 106.    
828 As previously explained (see paras 7.226-7.228). China imposes both an export duty and an export 
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  7.521  China also asserts that export restrictions on EPR products are apt to contribute to its stated 
health objective in the medium and long term . In the medium term, China argues, export duties on 
EPRs will reinforce domestic environmental rules and regulations through their selection effect, that 
is, by forcing small-scale inefficient firms out of th e market to the advantage of large-scale, efficient 
and less-polluting producers.
830 In the long term, posits China, export restrictions will help the 
Chinese economy shift its production towards more  sophisticated, higher value added goods, and 
away from low-value added basic materials. This, in  turn, will lead to incr eased growth. Increased 
growth will lead to higher income per capita, whic h, in turn, will increase Chinese preferences for a 
cleaner environment and demand for higher environmen tal regulations. This will "creat[e] a virtuous 
circle of development and environmental protection".831  
7.522  However, the complainants claim that China's real goal for maintaining the export restrictions 
at issue is not the reduction of pollution caused by th e extraction of EPRs, but to ensure that domestic 
users have preferential access to the raw mate rials compared to their foreign counterparts.832 The 
complainants also contend that export duties ar e not an efficient policy response to achieve an 
environmental goal and there are less trade-distor ting measures that can be used as alternatives.833 
They further argue that China's estimates of the effects of export restrictions on EPR production are 
not reliable and that China's claimed short-, medium - and long-term positive effects of the measures at 
issue on the environment are not supported by evidence . Moreover, the complainants maintain that the 
various components of the architecture of Ch ina's (declared) policies on EPRs (and scrap) are 
inherently contradictory and incoherent, and, as such, have not and will not contribute to China's 
declared objective of reducing pollution resulting from the production of EPRs.834 Therefore, the 
complainants ask the Panel to determine that Chin a has not satisfied its burden to prove that export 
restrictions on EPR products contribute to China's stated environmental objective.   
7.523  The Panel recalls that China bears the burde n to prove that its export restrictions bring about  
or are apt to contribute to the realisation of the policy goal permitted by Article XX(b) and that 
"[t]his demonstration could consis t of quantitative projections in the future, or qualitative reasoning 
based on a set of hypotheses that are test ed and supported by sufficient evidence".835 China has put 
forward both a quantitative and qualitative argument ation to support its claim that its export 
restrictions (export duties and export quotas) are apt to contribute to its goal of reducing pollution resulting from the extraction of various raw material s with a view to improving the health of the 
Chinese population. We turn now to consider the qua litative and quantitative elements of the evidence 
submitted to the Panel. 
7.524  Although we will proceed to examine be low China's measures on EPRs, the Panel 
understands that China's measures on EPRs are not to be  considered in "isolation"; this is clear from 
China's qualitative and quantitative argumentation. Chin a claims to have a comprehensive policy that 
                                                                                                                                                                     
restriction will actually "bite", i.e. will be effectively activ e in limiting exports. Which of the two restrictions has 
an actual effect on production (consumption) is a purely empirical question. 
829 China estimates an impact of 5.07% from the export quota on the production of coke had the quota 
on coke been the effective limitation ("biting constrai nt") to coke production (Annex 1 Exhibit CHN-147). 
830 China's first written submission, paras. 329-336. See also China's response to Panel question No. 30 
following the second substa ntive meeting, para. 142. 
831 China's response to Panel question No 39 followi ng the second substantive meeting, para. 264 and 
China's second written submission, para 252. 
832 United States' first written submission, paras. 29-31;  Mexico's first written submission, paras. 29-34. 
Complainants' joint opening oral statement at th e first substantive meeting, paras.11-13, 97-98. 
833 Exhibit JE-158, pp.3-6. 
834 United States' second written subm ission, paras. 62-64; Mexico 's second written submission, 
paras. 65-67. See also Exhibit JE-158, pp. 7-9. 
835 Appellate Body Report, Brazil – Retreaded Tyres , para. 151 .  WT/DS394/R 
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  includes measures on EPRs and measures on scrap whic h operate together and at the same time.  
Indeed, in the context of its argumentation on EP Rs, China also refers to its measures on scrap 
products. China argues that the use of scrap products  (recycled) is much less energy-intensive and 
polluting than the use of EPRs. All parties also seem  to agree with this statement in principle (and 
indeed China cites European Commission documents on the benefits of the recycling industry
836), but 
the complainants, as discussed below, submit that, c ontrary to its allegation, China is not pursuing 
seriously enough the development of its recycling sectors. The complainants are of the view that China's measures are not fundamentally about the re duction of pollution and the protection of health; 
rather, their main purpose is to generate redu ced-price raw materials for its downstream steel 
industry.
837 
Whether China has discharged its burden of proof  that export restrictions on EPR products are 
currently making a material contribution to the stated objective 
7.525  China's defence under Article XX(b) is based on its contention that export restrictions on 
coke, manganese and magnesium metal, and silicon car bide are making a material contribution to a 
reduction in health risks associated with primar y production of these metals. They argue that export 
restrictions will result in decreased levels of pr oduction of these products. China submits that there is 
a serious health risk related to the production of EPRs, and that reducing their production would 
reduce pollution, which would lead to a reduction in the related health-risks.838 China argues that the 
export restrictions on EPRs will limit the production of such polluting EPRs.    
7.526  The Panel recognizes that China's qualitative argu ment relies on the standard economic theory 
of the effects of an export restriction: an export restriction on polluting raw materials, by reducing 
foreign demand for the good on which it is imposed, sh ifts supply of the good to the domestic market, 
thus putting downward pressure on the domestic price of the product. The re duction of the domestic 
price of the good will decrease production and this , in turn, will lower pollution. The Panel also 
observes that parties agree on the general principle th at when analysed in "isolation" (that is, for a 
single market and a single policy measure), standard economics predicts that an export restriction will 
reduce domestic production. However, as discussed belo w, the Panel has reservations on the validity 
of conducting an analysis of the effects of an e xport restriction on a product in a specific sector in 
"isolation". It is important to consider the export restrictions imposed on pr oducts in other related 
sectors at the same time.  
7.527  Moreover, the Panel has concerns regarding China's estimations of the size of the effects.  As 
noted earlier, China has used two alternative method ologies to assess the impact of export restrictions 
on EPR products on their production. Specifically, to de termine the impact of its  export restrictions on 
manganese metal, magnesium metal, and silicon carbide, China uses a simulation model, whereas for its export restrictions on coke, it uses an econom etric regression model.  The Panel understands that 
simulations provide estimates as to what the effects of the removal of a duty would be on the basis of 
a demand and supply model of the market at issue, whereas regressions measure what the effect of a 
trade policy measure (in place for a certain time period) has been. 
7.528  Although we are satisfied with the methodologies used by China in making its case, the Panel 
has a number of concerns with respect to the relia bility of the results of the studies put forward by 
China.     
                                                      
836 China's first written submission para. 250. 
837 United States' second written subm ission, paras. 82-83; Mexico 's second written submission, 
paras. 86-87; European Union's second written submission, paras. 398-408. 
838 China's first written submission, paras. 285, 316, and 317. WT/DS394/R 
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  7.529  First, the Panel is concerned about the quality of the data used for the analysis of the impact 
of export restrictions on manganese metal, magnesium  metal and silicon carbide. China's estimates of 
the effects of an export duty on manganese and ma gnesium metal and of an export quota on silicon 
carbide assume that the domestic supply and demand elasticities (that measure the degree of 
responsiveness of supply and demand to price chang es, respectively) for these products are the same 
as those it estimates for coke.
839 Logic suggests that demand elasticities usually would be different for 
different products.  Moreover, the Panel understa nds that standard economic theory provides that 
supply and demand elasticities are generally specifi c to the product at issue in that they are 
determined by production technologies and by the de gree of substitutability of the raw material for 
other inputs. China has not established that productio n technologies for the raw materials at issue and 
the degree with which firms in the downstream sect or can substitute these raw materials with other 
inputs are the same across products. For this reason, we are not persuaded that we can use estimates 
for coke also when considering the markets of other raw materials.    
7.530  The Panel is aware that China ju stifies the use of coke elasticities for the other materials by 
providing evidence that, when considering imports from all sources , average import demand 
elasticities for the raw materials at  issue in this dispute do not significantly differ across products.840  
However, the Panel notes that data on import demand elasticities for imports from China  appear to 
change significantly across products - ranging from -2.14 for magnesium metal to -6.19 for manganese metal and -10.01 for magnesium scrap.
841  In light of this evidence, the Panel questions the 
use of coke elasticities to proxy elasticities of other raw materials. 
7.531  The Panel understands that any quantitative estima tion of the comparative effects of an export 
restriction on the EPRs at issue is highly speculative given the lack of adequate data. Estimates based 
on incorrect data or incorrect estimation procedures are of course not reliable.   
7.532  Turning to the regression estimates of the impact  of export restrictions on coke, the Panel is 
struck here by a number of methodological issues. In particular, the Panel notes that China's results 
could be inaccurate because they are obtaine d estimating a regression model which includes 
inappropriate control variables.842 The Panel also observes that Ch ina's estimates are produced using 
periodic data. In order to be correctly estimat ed, a model using periodic data requires specific 
                                                      
839 Exhibit CHN-124. 
840 Using estimates from Kee, Nicita and Olarreag a (2008)'s study, China calcu lated the average import 
demand elasticities across all importers and averages across non-producing  countries (Exhibit CHN-519, 
Table 3.1). 
841 Exhibit CHN-519, table 3.2. 
842 In order to determine the impact that the export restrictions on coke have on domestic production, 
China uses the "Ordinary Least Square" technique, whereby production is explained by the level of the tax, the 
quota, and a "control variable". The importance of introducing a "control variable" in the regression is to avoid 
attributing to the export duty (or quota) effects that have been caused by changes in other variables (the effect 
this attribution would have is referred to by economists as the "omitted variable bias"). For a control variable to 
be apposite, it must be something that is independent of the matter being analysed – in this case the export 
restrictions. The variables China uses, though, could well be affected by the very export restraints being 
examined. Indeed, in the production equation China uses the following control variables: consumption in 
Exhibit CHN-147; and dummy variable s for each year as well as a vari able indicating the production of 
metallurgic coal in Exhibit CHN-519. Both consumption of coke and production of metallurgic coal (a key input 
in coke production) are likely to be affected by the export  restraints, and therefore, in  the view of the Panel, are 
not proper control variables.  WT/DS394/R 
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  methodologies, which, however, have not been considered by China.
843 The Panel has a further 
concern with regard to the specification of the estimated regression model.844      
7.533  Second, even assuming that the evidence submitted by China to support its statement that its 
export restrictions on EPR products are currently  making a material contribution was reliable, the 
Panel is unconvinced that China has satisfied its burde n of proof that the export restrictions in place 
make a "material" contribution because China's analysis does not account for important upstream-
downstream interactions. In particul ar, given the vertical structure of  the metals industries at issue, 
one would expect that China's analysis of the e ffects of export restrictions on pollution would account 
for the pollution that may be generated by additio nal production in the downstream sector (following 
the imposition of the export duties and quotas on the EPR products). It is the understanding of the Panel that economic analysis indicates that, under normal conditions, an export restriction imposed 
upstream acts as an incentive to downstream production. In  the case at issue, therefore, an export duty 
(or quota) on raw materials reduces the price of key inputs, and therefore should be expected to 
provide an incentive to production by the downstream sector. China's evidence does not take this into 
account.    
7.534  China asserts that it has not included in its  calculations additional downstream pollution 
because it believes that to be relatively minor compar ed to what is caused by upstream production of 
the raw materials.  China supports this claim with an expert statement that the upstream production of 
EPR goods is the most polluting stage of the pr oduction process and that the pollution generated by 
the downstream sector is minor.
845 China has also presented data on the level of pollution generated 
per metric tonne by the production of the raw mate rials at issue and by steel and iron production.846 
The evidence provided by China supports the claim that the pollution generated per metric tonne of 
the different materials is significantly higher for EP R products than for steel and iron. However, the 
information is not sufficiently helpful to us, becau se we do not know how many metric tonnes of iron 
or steel are produced using one metric tonne of a certain EPR product. The Panel notes that an export 
restriction not only reduces the production of EPR, but it also makes available additional units of EPR 
as consumption by the domestic downstream industry.  Therefore, in order to assess whether the export restrictions on EPRs reduce pollution, the Panel would need information not only on the 
reduction of pollution generated by the lower level of EPR production (which China provides in its 
first written submission), but also on the increased po llution generated by the amount of steel and iron 
that are produced using the additional units of EPR available as domestic consumption. However, the 
latter piece of information is not available to us.   
7.535  China also argues that increased domestic supply of manganese and magnesium metal will 
not increase the quantity , but merely change the quality  of the aluminium and steel that is produced 
                                                      
843 The data used for the analysis are monthly data . An issue frequently associated with using such 
periodic data is that the regression's errors are serially correlated, i.e. regression "error terms" from different 
time periods are correlated. If serial correlation is not taken into account in the estimation, results could be 
misleading. China's estimations do not correct for serial correlation of the error terms. 
844 When both an export quota and an export duty are imposed, it will be only one of the two that 
reduces exports and has an impact on domestic production (the duty will be the biting constraint when it is 
sufficiently restrictive in relation to the quota, so that the quota does not "bite"). In other words, a change in the 
duty has an impact on production only if the duty is the biting constraint. In depicting the effect of the duty or 
the quota, therefore, a function should be used which allows the restrictiv e effect of either the duty or the quota 
to go from a positive value to zero when the other instrument becomes biting. In Exhibit CHN-519, however, 
China does not use this approach. 
845 Exhibit CHN-481. 
846 China's response to the Panel question No. 26 following the second substantive meeting, 
paras. 120-126. WT/DS394/R 
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  from it. Therefore, one cannot assu me an increase in pollution gene rated by the downstream sector.
847 
However, China has not provided evidence in support of  this argument. China claims that, because of 
the increased availability of manganese and magnesium, producers of aluminium and steel will use 
relatively more manganese and magn esium than other inputs in the production of the alloy.  However, 
it seems to us that substitution across inputs does not ex clude the possibility of an increase in quantity.  
Indeed, it has to be expected that  when the price of one of the production inputs changes, firms (in 
downstream sectors) may substitute away from the relatively more expensive inputs toward the 
cheaper ones. By so doing, firms reduce their prod uction costs and may, in turn, increase production, 
leading to greater pollution.   
7.536  Proceeding with our analysis of  China's evidence on material c ontribution, the Panel believes 
that in industries where vertical linkages are important , such as the metals industries at issue, the test 
for material contribution to the stated objective must account for those policies that may offset the 
alleged effect of the policy in place.   In the absence of this requirement, it would be possible for the 
combination of two or several policies to nullify each other's effect on pollution, while serving only 
the achievement of other objectives (such as the development of the downstream sector).  In the specific case at issue, Ch ina does not contest it imposes export restrictions on manganese ore (used as 
input in the primary production of manganese metal).
848 In principle, such a measure reduces the 
domestic price of ores in China, and therefore repr esent an incentive to produce EPR metals. As such, 
the export restrictions on ores may potentially o ffset the production-reducing effects of export 
restrictions on metals (EPRs), and, consequently , their alleged positive effects on the environment. 
China acknowledges that its analysis omits this o ffset consideration. However, China argues to be 
mainly an importer, as opposed to an exporter, of or es. On the basis of this argument, China concludes 
that, as a practical matter, the price of ores is not affected by its export measures on ores, which 
means no offset will occur. However, we do not  find the evidence sufficient to support this 
conclusion.849   
7.537  China also argues that a quantification of the eff ects of an export restriction on a raw material 
that takes into account upstream and downstream linkages as well as policies adopted at the various 
stages of the production chain would make the analysis of such effects more complex.850  T h i s  i s  
probably true. However, if a government is concer ned with the reduction of pollution arising from an 
industry with an important vertical structure, it se ems to us that it would need to take downstream-
upstream linkages into account in order to evaluate the effectiveness of its policy.  Furthermore, the 
Panel recognizes that it may be impossible to take th e effects of all policies applied to each stage of 
production into account, but an analysis of the materi al contribution to a stated objective should take 
into account at least those policies whose effects ma y counter in some respects the stated objective 
(such as export duties on ores in the case at issue).    
7.538  In sum, the Panel is not persuaded by the evidence provided by China in support of its claim 
that its export restrictions on EPR products currently  make a material contribution to the objective 
pursued. The quality of the data used for the analys is and the shortcomings of the estimation methods, 
as we have explained, give us pause.  Furtherm ore, even assuming that th e quantitative analysis is 
reliable, the Panel is of the view that given the importance of the vertical structure of the metals 
industry, China's economic analysis should have take n into account the effects that export restrictions 
                                                      
847 China's second written submission, para. 298. 
848 China's response to Panel question No. 28 following the second substantive meeting, 
paras. 133-134. 
849 The data on the import to export ratio are not sufficie nt to prove that export restrictions do not affect 
the domestic price of ores. This is because the low volume of exports of  ore could be due to the export 
restrictions in place.   
850 China's second written submission, paras. 294-303.  WT/DS394/R 
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  have on pollution through the upstream and downstream  sectoral linkages, and the impact of measures 
that counter that of the export restrictions. It may be that it is possible to prove a material contribution 
with additional or different evidence, but what we  have before us does not provide enough for us to 
conclude that the export restrictions currently provide a material contribution. 
Whether China has discharged its burden of pr oving that export restrictions on EPRs are apt 
to make a material contribution to the stated objective in the future 
7.539  China argues that there are additional medium te rm gains due to the "selection effect".  The 
"selection effect" is said to occur in a situation wh ere lower prices reduce profit margins, thus forcing 
producers to make efforts to become more cost effi cient.  Since "more efficient producers are likely to 
be those producers that employ enviro nmentally friendlier production methods"851, such as energy-
saving technologies, China asserts that medium-ter m pollution, on average, will tend to decrease. In 
support of this claim, China submits empirical studi es that find a correlation between firms' efficiency 
and the intensity of pollution generation.852 
7.540  The Panel has not been persuaded by these arguments about alleged medium-term gains 
resulting from export restrictions on EPRs. A sta ndard economic assumption is that firms minimize 
costs at all levels of prices. In contrast, the "selection" argument relies on the existence of inefficiencies (so called x-inefficiencies). As pointed  out by the complainants, "the idea does not form 
part of the corpus of modern ec onomic thought about firm behaviour".
853 
7.541  China also argues that export r estrictions are apt to make a material contribution in the long 
run because export restrictions on EPR products "will he lp China, as a developing country, to reach its 
long-term environmental goals by facilitating Chin a's economic growth which, in turn, leads to 
substantial environmental protection".  China's lin e of argument is founde d on two interdependent 
assumptions: (i) export restrictions on upstream meta l products and raw materials will promote faster 
growth in China; and (ii) greater national income  will be associated with environmental gains.  
7.542  The Panel considers these arguments next. 
Whether export restrictions on raw materials necessarily promote higher growth 
7.543  China claims that there is a strong link betw een export restrictions and economic growth.  
China's line of argument is that its export restricti ons on raw materials help China to move away from 
an economy based on raw materials toward an economy based on higher value-added, more sophisticated sectors, and that this, in turn, will promote growth of the Chinese economy. China 
supports this claim on the basis of a study concludi ng in favour of the existence of so-called "export 
sophistication externalities".
854 This evidence suggests that "if count ries consume, rather than export, 
raw and basic materials and make efforts to pr oduce and export 'sophisticated' bundles of goods, they 
can achieve higher growth".855 
                                                      
851 China's first written submission, para 334. 
852 Exhibit CHN-442. 
853 United States' comments on China's response to Panel question No. 30 following the second 
substantive meeting (Exhibit JE-185, p. 3). 
854 Exhibit CHN-266: Hausmann, R., Hwang, J., and Rodrik, D. (2007). "What you export matters", 
Journal of Economic Growth 12: 1-25. 
855 China's comments on the complainants' response to Panel question No. 22 following the second 
substantive meeting, para 87.   WT/DS394/R 
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  7.544  According to China, its export restrictions on raw materials, together with its export 
restrictions on steel and aluminium (the immediate downstream sector), provide it with the means to 
exploit the externalities required to foster growth.
856      
7.545  Setting aside any consideration of whether th e findings of the study submitted as evidence by 
China actually reflect a causal link from "export sophistication"  to economic growth857, the Panel 
agrees with all parties that the correct policy impli cation of the considered study is that any policy 
should be designed so as to benefit entrepreneurs who engage in new activ ities and not to benefit 
followers.858 However, China's export restrictions on raw materials do not distinguish between 
innovators and emulators. Therefore, China's export restrictions do not conform to the type of good 
policies suggested by the study it submitted and thus cannot find support in that analysis. 
7.546  China defends the imposition of export restric tions as a "less burdensome alternative to 
'discovery' subsidies"859 on the grounds that: (i) it would be legally difficult to define the terms 
innovator and emulator; (ii) the costs related to di sbursements in connection with a discovery subsidy 
would be excessively high, especially for a developi ng country; (iii) it is politically easier to remove 
export restrictions than terminate a subsidy; and (iv) export restrictions allow countries to address 
simultaneously environmental and consumption exte rnalities. In this context, China argues that  
temporary  export restrictions may help target innova tors rather than emulators, as the export 
restrictions could be removed af ter innovators have entered the market. However, China's export 
measures do not appear to be set according to this approach.     
7.547  Moreover, we believe that even assuming that ex port restrictions could help generate the 
required discovery externalities and ge nerate growth in the metal industries, this does not prove that 
there is a link between export restrictions in raw materials and aggregate  growth in China, which is 
required according to China's theory to improve environmental protection.  While, as acknowledged 
by China860, the finding that "what you export matters" ma y not rise to the level of a general economic 
"principle", a generally accepted concept is that su pport to one sector shifts resources away from other 
sectors; whether this shift increases or reduces aggr egate growth depends on the growth potential of 
the various sectors.   
7.548  In any event, the argument that moving away from exporting unsophisticated products toward 
exporting high value-added products increases gr owth supports the provision of incentives to 
innovators generally, and not only to those in the EPR  sectors. Indeed, the fact that EPR products are 
important inputs in industries that are central  to the Chinese economy does not imply that the 
consumption of these goods necessarily generates pos itive side effects, nor that China's aggregate 
growth would necessarily increase by supporting these sectors.   
                                                      
856 Exhibit No. CHN-519, paras. 45-52. 
857 The Panel acknowledges that the complainants contest the validity of Hausmann et al.  (2007) 
conclusion that what you export matters and argue th at the authors of the study ascribe causation to a 
correlation. The complainants argue that the correlation may be spurious, as there might be other factors such as 
the quality of institutions that may affect simultaneously the composition of a country's export basket and its 
prospects for fast growth (Exhibit JE-178, p. 4). However,  the complainants do not provide evidence in support 
of this position. We observe that study submitted by Chin a is published in a peer reviewed journal and a number 
of subsequent studies have supported the causal interpretation of this study.    
858 Exhibit JE-178, p.5. 
859 China's comments on the complainants response to Panel question No. 22 following the second 
substantive meeting, para 97. 
860 China's comments on the complainants' response to Panel question No. 22 following the second 
substantive meeting, para. 91.  WT/DS394/R 
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  7.549  The Panel understands that, as a matter of  economic theory, export restrictions on EPR 
products will shift resources into the downstream industries that produce metal alloys and away from 
other sectors in China. China does not  address the well-recognized possibility
861 that the sectors from 
which resources are shifted away may be characteri zed by higher information spillovers and higher 
technology transfers than the metal industry, and may thereby contribute to aggregate growth more than would a larger metal industry. In this situ ation, an incentive for consumption of EPR products 
may actually slow down aggregate economic grow th, compared to a situation, absent any 
intervention, where relatively more resources fl ow to sectors with a higher growth potential. 
Furthermore, these other sectors may even be less polluting than the metal industry. 
7.550  Given the above, the Panel finds that China's claim that export restrictions on the EPRs at 
issue will necessarily foster China's economic growth is not substantiated by sufficient evidence.   
Whether the EKC holds for China and the products at issue 
7.551  We now turn to analyse the second step in Ch ina's argument about the long-term benefits of 
export restrictions on EPR products, namely that th ere is a strong link between higher growth and 
environmental benefits.  China argues that "[e] conomic growth, if supported by the adequate 
regulatory framework, can then be translated  into long-term environmental protection".
862 China 
argues that this relationship is supported by the empirical evidence of the so-called "Environmental 
Kuznets Curve" (EKC).863 This is an empirical correlation between income per capita and 
environmental degradation whereby, while at rela tively low levels of income pollution increases with 
income, beyond a certain income level, pollution declines. Reasons for this relationship are 
hypothesized to include income-driven chang es in: (i) the composition of production and/or 
consumption that moves away from natural resour ces goods; (ii) the prefer ence for environmental 
quality; (iii)  the development of institutions in troducing the proper regulatory measures to address 
environmental problems; and/or (iv) the arising economies of scale associated with pollution 
abatement technologies. 
7.552  Parties agree that in general the EKC does not imply a causal relationship from economic 
growth to environmental quality.864 A higher level of wealth can strengthen public demand for a 
cleaner environment, but unless the government re sponds with policies that enhance environmental 
protection, the improvements are unlikely to come.865 China argues that, even if this is not done 
automatically, higher levels of income ma ke the link between economic development and 
environmental protection more likely, and China cont ends that it has provided evidence of an EKC in 
China for some of the pollutant s at issue in this dispute.866    
7.553  For the Panel, even if growth makes environmen tal protection statistically more likely, this 
does not prove that export restrictions are necessar y for environmental gains. For example, to the 
extent that a higher income per capita generate s citizens' preferences for a better quality of 
                                                      
861 See Grossman, G.M. and Helpman (1991), Innovation and Growth in the Global Economy, MIT 
Press. 
862 China's comments on the complainants' response to Panel question No. 22 following the second 
substantive meeting,  para. 87. 
863 Exhibit CHN-442. 
864 Exhibit JE-158, and China's comments to the United States' response to the Panel question No. 22 
following the second substa ntive meeting, para. 62. 
865 Grossman, Gene M. and Kruger, A.K. (1995). "Economic Growth and the Environment", Quarterly 
Journal of Economics, pp. 353-377. 
866 China's comments on the complainants' response to Panel question No. question 22 following the 
second substantive meeting, paras. 62-66. WT/DS394/R 
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  environment, income redistribution policies may ser ve the environmental objective just as well as it is 
claimed that export restrictions do.   
7.554  Finally, the Panel is mindful of the poten tial systemic consequences of accepting China's 
argument about the long-term benefits of any export restrictions as instruments to promote 
sophisticated exports thereby favouring environmental protectio n. If accepted as justifying WTO-
inconsistent measures, this would support the use of export restrictions under Article XX(b) for any 
raw material. The Panel is not aware of any support for such an interpretation of Article XX(b).  
(iii) Trade restrictiveness of the measure 
7.555  Finally, in the balancing exercise that we  must perform to assess whether the challenged 
export restrictions are "necessary" under Article XX (b), we are called upon to take into account the 
restrictiveness of the challenged measure, keeping in mind that "[t]he less restrictive the effects of the 
measure, the more likely it is to be characterized as 'necessary'".
867   
7.556  The complainants assert that China's export me asures "severely distort the conditions of 
competition in the global market place".868   
7.557  China responds that the complainants do not provi de any evidence in support of their claim, 
except to rely on the assumption that Ch ina's actions affect the world price of the products at issue. In 
particular, China bases its defence on the following poin ts.  First, "the raw materials needed to make 
EPR products are some of the most abundant in the world"869 and this is inconsistent with the 
complainants' argument that China controls and manipulates world market supply and world prices 
for EPR products. Second, there are factors other th an the Chinese export restrictions that can explain 
the fall in Chinese exports of these products. Th ese include high anti-dumping duties imposed by the 
complainants on some of these products, the gene ral commodity price increase that the world has 
experienced in the period between 2005 and 2008 , and the stringent environmental regulations 
imposed by the United States and the European Union on the domestic production of the EPR 
products at issue. Third, the impact of China's expor t restrictions is much softer than a ban on such 
exports. Finally, even assuming, arguendo , that China's export restraints have an impact on prices, 
one should expect that, in the long run, the effect  on trade will vanish. This is because the higher 
world prices induced by China's export restric tions will lead worldwide investments into new 
production of EPR products. Eventually, as more play ers enter the market, world prices will go down. 
7.558  The Panel acknowledges that the measures in pl ace (export quotas and export duties) are less 
restrictive than full "bans" would be (except for zinc).  However, th e Panel is also of the view that 
China's arguments do not confirm that the measures are not restrictive.  First, the impact of an export 
restriction on the world market does not depend on th e global availability of the raw natural resources 
to manufacture EPR products, but on a country's e xport market share in th e EPR market. In this 
respect, the evidence before the Panel appears to show  that China's share of global exports in some of 
these products is quite significant (43.5% for coke, 74.2% for magnesium containing ≥99.8% by 
weight of magnesium, 57.9% for magnesium containing <99.8% by weight of magnesium, and 74.2% of manganese).
870 Thus China's export restrictions, even if  modest, can have an important impact 
worldwide.  
                                                      
867 Appellate Body Report, China – Publications and Audiovisual Products , para. 310. 
868 Complainants' opening or al statement, para 6. 
869 China's second written submission, para. 258. 
870 European Union's responses to Panel question No. 46 following the first substantive meeting, 
para. 51.  WT/DS394/R 
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  7.559  Second, China's argument that the impact of its export restrictions is much lower than the 
effect of the United States' and the European Union's anti-dumping duties on some of these products 
is based on a mere comparison between expor t tax rates and anti-dumping duty rates.  
7.560  The Panel understands that from an economic perspective this comparison does not provide 
much guidance on the actual effects on domestic prices and on trade of the respective measures. A static comparison of the effects of an import tax and an export quota under the standard assumption of 
perfect competition suggests the following. First, anti-dumping duties are firm-specific. Therefore, 
their effect depends on the amount of trade effected by the firms in question. Second, the impact of 
anti-dumping duties on domestic pr ices depends on whether the importing country is "small" or 
"large".
871 If it is a large importer, domestic prices will in crease by less than the duty rate. In contrast, 
the impact of an export restriction on global export prices depends on the size of the exporting  
country. Export restrictions will influence world ex port prices only if the country imposing them sells 
a large share of the world's exports of the material  on which the restrictions are imposed. Third, the 
impact of an import restriction on trade depe nds on the importing country's domestic demand and 
supply conditions. The impact of an export restri ction on trade depends on the exporting country's 
domestic demand and supply conditio ns. Thus a simple comparison of anti-dumping duty rates and 
export duty rates is not sufficient to guarantee that the measures in place are not highly restrictive.  
7.561  As far as the long-term effects of export restric tions are concerned, China's argument is that 
these measures are not too trade restrictive in the lo ng term because the high world market prices will 
provide an incentive to new producers to enter the market. As a consequence of this entry, China 
argues, world prices will return to their initial level.872  
7.562  Although this is theoretically possible, given that higher world prices could make it profitable 
to start EPR production, it is important to ta ke into account that long-term effects do not 
counterbalance short-term effects. In other words, the fact that in the long run the trade-restrictive 
effects of a measure may vanish does not imply that the short-term costs associated with the measure 
are not highly restrictive.  
7.563  The Panel recalls that, except for zinc, China does not maintain any full bans on exports. We 
also observe that, in absolute terms, the level of  the export duties is relatively low and the quotas are 
also relatively open (with some of them not having been filled in 2009).  But, as noted, the impact of 
an export restriction depends on the size of the exporting  country.  In that context, the Panel recalls 
that the assessment under Article XX(b) is a holistic one.873  This takes the Panel to the last step of the 
test under GATT Article XX(b). 
(iv) Availability of WTO-consistent or less trade-restrictive alternative measures   
7.564  Following the direction from the Appellate Body in Brazil – Retreaded Tyres , if an analysis 
under Article XX(b) yields a preliminary conclusion that the measures at i ssue are necessary, "this 
result must be confirmed by comparing the cha llenged measures with their possible alternatives, 
which may be less trade restrictive while providing an equivalent contribution to the achievement of 
the objective pursued".874 
                                                      
871 In economics a country is "small" in the market of a certain product if it cannot affect the world 
price of that product. It is "large", if it can. 
872 China's second written submission, paras. 269-276. 
873 Appellate Body Report Brazil – Retreaded Tyres , para. 182. 
874 Appellate Body Report, Brazil – Retreaded Tyr , para. 156. WT/DS394/R 
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  7.565  We have not yet reached a decision whether the export restrictions at issue are necessary 
within the meaning of Article XX(b).  Nevertheless, the Panel finds it useful to review the arguments and evidence submitted by the parties with regard to the availability of WTO-consistent alternatives; 
therefore we will proceed to examine the allegations arguendo.  The complainants put forward a list of 
possible WTO-consistent alterna tives to China's WTO-inconsistent export restrictions. China 
responded that all such alternatives are already in pl ace in China in the context of its comprehensive 
environmental framework.  The Panel will determin e whether those measures are available to China 
and whether they would allow China to maintain the same level of protection it argues its export 
restrictions provide.
875 
7.566  The complainants submit six types of altern ative measures which, they argue, are WTO-
consistent and more efficient to ensure the re duction of pollution as well as the protection of the 
health of the Chinese people.  The complainants poi nt to (i) investment in more environmentally 
friendly technologies; (ii) further encouragemen t and promotion of recycling of consumer goods876; 
(iii) increasing environmental standards877; (iv) investing in "infrastructure necessary to facilitate 
recycling scrap"878; (v) stimulating greater local demand for scrap material without discouraging local 
supply879; and (vi) introducing production restricti ons or pollution controls on primary production.880 
7.567  In response to the alternatives put forth by the complainants, China argues that all the 
alternative measures suggested  by the complainants are already in pl ace in China.  It contends that its 
export restrictions complement  a number of existing measures whic h form part of a comprehensive 
environmental framework aimed at minimizing environmental and health effects created in the 
production of EPR products and through the recycling of relevant scrap produc ts. In its Annex 39-1, 
China groups these non-export restriction related meas ures according to the six categories of less 
trade-restrictive alternatives proposed by the compla inants with a view to illustrating that it has 
already implemented these (alternative) measures.  China further submits Annex 39-2 outlining the 
manner through which it alleges a number of these measures contribute to controlling pollution 
generation related to the production of EPR products. It further subm its Annex 39-3, which it argues  
includes evidence of the implementation and effec tiveness of the various measures. Finally, China 
submits Annex 14-1 detailing a number of measures that  apply to steel and aluminium producers.    
7.568  The Panel notes, first, that if China argu es that alternative measures suggested by the 
complainants are already in place in  China, China would seem to have conceded that such alternatives 
are (already) "available".  In fact, what China s eems to argue is that if it maintains its export 
restrictions together with (alternative) domestic regul ations of the type suggested by the complainants 
(which according to China are already operati ng) China would achieve more environmental 
protection. The Panel will come back to this point after reviewing the parties' arguments on suggested 
alternatives.  Our order of analysis will follow the ap proach used by the parties, organised in terms of 
the six categories of proposed alternative measures.   As mentioned earlier, the Panel will address 
proposed alternative measures to both rest rictions on EPRs and on scrap products.   
                                                      
875 WTO Appellate Body Report, Brazil – Retreaded Tyres , para. 171 citing, at the end of the quotation, 
US – Gambling , para. 308. 
876 European Union's second written submission, para. 396. 
877 European Union's second written submission, para. 400. 
878 United States' second written submission, para. 68 . Mexico's second written submission, para. 71. 
879 Exhibit JE-158, p. 6. 
880 United States' second written submission, para. 37.Mexico's second written submission, para. 40.  WT/DS394/R 
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  Investment in more environmentally friendly technologies  
7.569  China submits a number of measures with a view to demonstrating that it has already put in 
place measures to encourage investment in enviro nmentally friendly technologies, and hence such 
measures could not serve as an alternative to restrictions on EPRs.881 The Panel has studied the 
measures submitted and concludes that they do not pr ovide proof that China has in fact implemented 
measures encouraging investment in environmentally friendly technologies.  The Law on the 
Prevention and Control of Atmospheric Pollution882 states in Article 8: "[the] State adopts economic 
and technological policies…", and in Article 26: "[the] State adopts economic and technical 
policies…".  Article 9 of the same measure stat es that "[the] State encourages and supports the 
scientific and technological research into the preven tion and control of atmospheric pollution…". The 
same language is reiterated in the Law on Promoting Clean Production883, the Law on the Prevention 
and Control of Environmental Pollution by Solid Wastes884, and the Law on the Prevention and 
Control of Water Pollution .885 While these measures include general statements about adopting 
general policies and encouraging research, we coul d not find, nor did China point to, how such 
measures would encourage or effect investment in environmentally friendly technologies. In addition, 
China does not provide any evidence that it is currently applyi ng domestic measures of this type. 
7.570  Moreover, it is not clear whether the domestic measures invoked by China are even 
obligatory. In the Law on Promoting Clean Production886, China identifies Article 33 as evidence that 
various activities relating to research, demonstrati on and training projects of clean production will be 
incorporated under special funds for technological progress. Nevertheless, according to Article 29, 
"...enterprises may…enter into agreements with the competent administrative departments ... for 
further saving resources and reducing the emission of pollutants."887 The language is clearly 
permissive and conveys no sense that there is an obligation to do anything in particular. The Law on 
the Prevention and Control of Envir onmental Pollution by Solid Wastes888 includes equally 
aspirational language such as, "Enterprises and public  institutions shall rationally select and use raw 
materials, energies and other resources, and adopt advanced production techniques and equipments, so 
as to reduce the discharge and harm of industrial solid wastes"889 and "[a] mining enterprise shall 
adopt scientific mining methods…".890  The same language is reiterated in the Law on the Promotion 
of Recycle Economy .891 China does not put forward any eviden ce of domestic measures that enforce 
recycling, nor does it suggest whether and wh y existing processes could not be improved or 
intensified to serve as an alternative to its export restrictions.  
7.571  China further submits Opinions of the State Council on Further Accelerating the Recycle 
Economy892 and the 2007 Plan for Energy Conservation and Pollutant Discharge Reduction893, which 
                                                      
881 The Panel notes a number of similar laws submitted by China: Law on the Prevention and Control 
of Atmospheric Pollution  (Exhibit CHN-268t) , the Law on Promoting Clean Production  (Exhibit CHN-271) , the 
Law on the Prevention and Control of En vironmental Pollutio n by Solid Wastes  (Exhibit CHN-270) , and 
Opinions of the State Council on Fu rther Accelerating the Recycle Economy  (CHN-523) . 
882 Exhibit CHN-268. 
883 Exhibit CHN-271, Arts. 6 and 14. 
884 Exhibit CHN-270,  Art. 6 
885 Exhibit CHN-269,  Art. 6. 
886 Exhibit CHN-271. 
887 Exhibit CHN-271, Art. 29. 
888 Exhibit  CHN-270. 
889 Exhibit CHN-270, Art. 31. 
890 Exhibit CHN-270, Art 36. 
891 Exhibit CHN-101, Arts. 42 and 44. 
892 Exhibit CHN-523. 
893 Exhibit CHN-145. WT/DS394/R 
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  outline a number of goals without specifying measures taken to implement them.  In the Opinions of 
the State Council on Further Accelerating the Recycle Economy  it is stated that,  "We shall make 
efforts to establish…"
894, while the 2007 Plan for Energy Conservation and Pollutant Discharge 
Reduction lists a number of goals including "Accelerate Research and Development of 
Technologies…"895 and "Accelerate Industrialization Demonstration…".896 Similar goals also form 
part of the 2008 Arrangement for Energy Conservati on and Pollutant Discharge Reduction897, which 
also lacks evidence of specific standa rds or policies to implement these goals. 
7.572  The Panel does not understand how the invocation of the measures referred to above confirms 
that China cannot implement, as an alternative to  its export restrictions, measures using improved 
technology to reduce the level of pollution caused by the extraction of EPRs.  On this evidence, China 
appears to be advocating broad policies and actions  in that regard, but with no specificities.  
Recycling of consumer goods 
7.573  China identifies a number of measures already in place that it claims target recycling of 
consumer goods.898  The Panel agrees that recycling polic ies and measures are in place in China and 
are thus "available".  As with the measures exam ined above, the Panel finds these measures equally 
vague with regard to specific policies having been implemented and applied as well as their impact in 
achieving their stated purpose.  Moreover, the Pane l has not been provided with evidence that China 
does not have additional recycling capacity, or that any unused recycling capacity could not be used in 
lieu of export restrictions. The 2007 Plan for Energy Conserva tion and Pollutant Discharge 
Reduction, similar to the previous measures, only lists goals without complementary binding policies. 
The 2007 Plan for Energy Conservation and Pollutant Discharge Reduction uses language such as 
"...organize to prepare circular economy promotion plans…"899; it also mandates cities to "establish 
and improve the garbage collection system…"900 without citing any mandatory provisions to require 
the establishment of these systems. The same language is also used in the 2008 Arrangement for 
Energy Conservation and Pollutant Discharge Reduction 901 which, like the 2007 Plan for Energy 
Conservation and Pollutant Discharge Reduction, does not indicate whether any of these plans have 
actually been enforced or applied. The 2009 Arrangement for Energy Conservation and Pollutant 
Discharge Reduction also contains unquantifiable language such as "Forcefully develop circular 
economy" and "Work well on implementation of  the Circular Economy Promotion Law…"902, 
without mentioning whether the Law is actually in force or operational.   China does not submit any 
evidence or argument as to why such regulatory potential could not be used instead of export 
restrictions. 
7.574  China also submits the Law on the Promotion of Recycle Economy , which sets out the 
procedures that must be followed in recycling w aste electric apparatuses and a variety of electronic 
products.903  We observe first that these products fall outs ide the scope of the dispute.  Moreover, for 
the Panel this proves that China h as expertise in areas of recycling that could be further utilised to 
replace the use of export restrictions.  
                                                      
894 Exhibit CHN-523,Art. 1(3). 
895 Exhibit CHN-145, Section V(17). 
896 Exhibit CHN-145, Section V(18). See also Section V (19) and (21). 
897 Exhibit CHN-287, Section VI. 
898 China's response to Panel question No. 19 following the second substantive meeting, Annex 19-1. 
899 Exhibit CHN-145, Section IV(12). 
900 Exhibit CHN-145, Section IV(15). See also Section IV(28). 
901 Exhibit CHN-287, Section VII. 
902 Exhibit CHN-288, Section VI. 
903 Exhibit CHN-101, Arts. 38-41.  WT/DS394/R 
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  Increasing environmental standards  
7.575  China submits that it has also already im plemented a number of measures to increase 
environmental standards. The Law on Environmental Impact Assessments sets out the procedural 
aspects of conducting impact assessments.904 However the environmental standards against which 
these assessments are conducted are not mentioned, nor whether producers of the EPR products have 
in fact been subject to any of these standards. The Circular on Strengthening and Regulating the 
Administration of New Projects905 provides requirements applicable to new projects, but otherwise 
does not include any environmental standards. Further, the Environmental Protection Law906  
indicates that "the environmental protection admi nistrative department of the State Council shall 
formulate national environment quality standards…"907, without providing evidence whether  these 
standards have in fact been formulated.908 
7.576  The Panel takes note of the Coking Industry Entrance Rules , which apply only to new coking 
facilities but do not address environmental standards in existing facilities.  Furthermore, no link is 
made between the application of the Entrance Rules and reducing the environmental impact of the 
EPR products in this dispute. China also submits the Law of the People's Republic of China on 
Promoting Clean Production  but does not provide any evidence or  arguments on whether the measure 
has been implemented.  China does not argue with r espect to any of the legal instruments cited above 
why their use could not be expande d or improved so as to reduce pollution caused by the extraction of 
EPRs, thereby obviating the need to c ontinue imposing export restrictions.  
7.577  China further submits a number of measur es through which it argues its environmental 
standards have been enforced, includi ng (i) charging pollutant discharge fees909; (ii) monitoring 
systems and on-site inspection powers of local governments910; (iii) implementing financial 
penalties911; (iv) ordering the suspension or shutting down of an operation912; and (v) sanctioning by 
                                                      
904 Exhibit CHN-276, Arts. 2, 17, 22 and 25-28. 
905 Exhibit CHN-469. 
906 Exhibit CHN-88. 
907 Exhibit CHN-88, Arts. 9 and 10. 
908 The same reasoning applies to the Law on the Prevention and Control of Atmospheric Pollution 
(Exhibit CHN-268, Arts. 7, 13, 15); the Law on the Prevention and Control of  Environmental Pollution by Solid 
Wastes (Exhibit CHN-270, Art.11); the Law on the Prevention and Control of Water Pollution (Exhibit CHN-
269, Arts. 11-13). 
909 Exhibit CHN-484, Pollutant Discharge Standards ; Exhibit CHN-279, Regulations for the 
Administration of the Pollutant Discharge Fees , Arts. 2, 6, 7; and Exhibit CHN-278, Measures for the 
Administration of the Rates for Pollutant Discharge Fees,  Art. 3 (1)-(3) and Appendix. 
910 Exhibit CHN-268, Law on the Prevention and Control of Atmospheric Pollution , Art. 21; Exhibit 
CHN-271, Law on Promoting Clean Production, Arts. 12 and 15; Exhibit CHN-467, Circular on 
Implementation Plans and Measures regarding Energy Conservation and Pollutant Discharge Reduction, Arts. 
1 and 8; Exhibit CHN – 269, Law on the Prevention and Cont rol of Water Pollution , Arts. 23 and 25-27; and 
Exhibit CHN-475 , Circular on Further Strengthening the Checks  on Clean Production of Key Enterprises , 
Arts.1 and 3. 
911 Exhibit CHN-268, Law on the Prevention and Control of Atmospheric Pollution , Arts. 47, 48 and 
52; Exhibit CHN-271, Law on Promoting Clean Production,  Art.40; Exhibit CHN-279, Regulations for the 
Administration of the Pollutant Discharge Fees , Art. 21; Exhibit CHN-270, Law on the Preven tion and Control 
of Environmental Pollution by Solid Wastes,  Arts. 68-70; Exhibit CHN-269 Law on the Prevention and Control 
of Water Pollution,  Arts. 70-74. 
912 Exhibit CHN-268, Law on the Prevention and Contro l of Atmospheric Pollution, Arts. 47 and 51; 
Exhibit CHN-279, Regulations for the Administration of the Pollutant Discharge Fees, Art. 21; and Exhibit 
CHN-467, Circular on Implementation Plans and Measures regarding Energy Conservation and Pollutant 
Discharge Reduction . WT/DS394/R 
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  public disclosure.
913 China submitted evidence of the impact of a number of its environmental 
regulations on the production of EPR products and associated pollution levels.914 The new articles 
presented as evidence, however, do not establish a c onclusive link between the enacted measures and 
the desired outcome, especially since the majority of these measures were only recently enacted. It is 
difficult for the Panel to assess the potential effectiv eness of a number of these measures in achieving 
the desired objectives, for the majority of them ar e so new as to remain untested. They do not include, 
for example, applicable standards, fee assessme nts, or enforcement procedures, evidence and 
consequences of inspections, or evidence of the establishment of the necessary environmental 
pollution control systems. The Panel also finds that a number of the measures have no relationship to 
the products at issue in this dispute. More impor tantly, as with other proposed alternative measures, 
China does not submit any explanation why its exis ting environmental standards could not be made 
more stringent or otherwise adapted to address adequately the pollution problem caused by the 
production of EPRs. 
Investing in infrastructure necessary to facilitate recycling of scrap  
7.578  China refers to a number of measures it claims are aimed at investing in infrastructure 
necessary to facilitate recycling of scrap.915 However, similar to other measures analysed above, there 
is no evidence before us confirming that these measur es have been applied or of the consequences of 
such application. Moreover, China does not subm it any evidence or argumentation as to whether its 
scrap recycling capacity is used to  its full potential or whether it c ould be further expanded so as to 
replace the use of EPRs. 
Stimulating greater local demand for scrap without discouraging local supply 
7.579  China submits one measure seeking to demonstr ate that it has stimulated local demand for 
scrap, namely the 2008 Law on the Promotion of Recycle Economy , which includes provisions 
indicating that "the State shall offer tax preference s to industrial activities promoting the development 
of recycle economy…"916 and that "…the State…shall bring the independent innovation research…of 
the key scientific and technological task force projec ts of recycle economy into the …scientific and 
technological development plans…and allocate financial resources to support implementation 
thereof…".917 First, the Panel notes that China does not submit any evidence that this measure has 
been implemented and if it has, with what results.  Second, the existence of this measure suggests that 
not only is this type of alternativ e available to China, but also that  China is putting in place incentives 
for industrial recycling that can replace the use of export restrictions.   
Introduction of production restrictions or pollution controls 
7.580  China further submits a number of measures seeki ng to demonstrate that it has already put in 
place measures to restrict production and control pollution.918  In addition to the Energy Conservation 
                                                      
913 Exhibit CHN-475 , Circular on Further Strengthening the Checks on Clean Production of Key 
Enterprises, Art. 5 (2). 
914 Annex 39-3. 
915 Exhibit CHN-101, Law on the Promotion of Recycle Economy , Art. 46; Exhibit CHN-525, Guiding 
Opinions on Strengthening the R ecycling for Regenerated Resources, Arts. I(I), I(II) II(II) and II(III); Exhibit 
CHN-526, Circular on Trial Works on the Construction of Recycling System for Regenerated Resources , Arts. 
III(II) and (III); Exhibit CHN-527, Circular of Second Batch of Trial Works on the Construction of Recycling 
System for Regenerated Resources,  Art. II; and Exhibit CHN-478, Announcement of Publishing the Catalogue 
of High- Energy Consumption Electromechanical Equipment , Arts. 1 and 2. 
916 Exhibit CHN-101, Law on the Promotion of Recycle Economy , Art. 44. 
917 Exhibit CHN-101, Law on the Promotion of Recycle Economy,  Art. 43. See also Art. 46. 
918 See Annex 14 to China's response to Panel question following the second substantive meeting.  WT/DS394/R 
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  Law 
919, which does not include any specifics on how the relevant provisions are implemented or 
enforced, China also subm its evidence of Energy Consumption caps on coke920, magnesium921, zinc 
smelting922, and ferro-alloys923, which also do not shed light on the direct impact of implementing 
these caps on the reduction of EPR-related pollution.   Moreover, China does not submit any evidence 
that such measures, or their improved versions, could not replace export restrictions in reducing 
pollution caused by EPRs. 
7.581  China also submits Annex 39-2 as evidence that  China's domestic environmental measures 
extend to the EPR products at issue.924 The Panel does not dispute that the scope of a number of these 
measures includes the products at issue in this di spute.  However, the Panel cannot discern how, as 
applied, these measures affect the pollution created  in relation to production of EPR products. We 
observe that a number of these measures are merely "guidelines" or "plans"; there is no evidence of 
specific mandatory policies. The lack of environmenta l standards coupled with the lack of evidence of 
implementation procedures and outcomes, creates an inco mplete picture of the extent of the impact of 
China's domestic environmental measures on the EP R products at issue.  Moreover, China does not 
submit any evidence as to why such environmental m easures could not be as effective as China claims 
its export restrictions are.  
7.582  China further submits Annex 14-1, which includ es an overview of a number of environmental 
measures that apply to the steel and aluminium industries.925 China argues that in connection with the 
                                                      
919 Exhibit CHN-272, Energy Conservation Law, Art. 16. 
920 Exhibit CHN-470, Energy Consumption Caps and Coke . 
921 Exhibit CHN-471, Energy Consumption Caps on Magnesium . 
922 Exhibit CHN-472, Energy Consumption Caps on Zinc-smelting.  
923 Exhibit CHN-473, Energy Consumption Caps on Ferro- alloys . 
924 China's response to Panel question No. 39 following the second substantive meeting.  Exhibit CHN-
268, Law on the Prevention and Cont rol of Atmospheric Pollution,  Arts. 1, 5, 6 and 13; Exhibit CHN-271, Law 
on Promoting Clean Production , Arts. 1 and 3; Exhibit CHN-276, Law on Environmental Impact Assessments,  
Arts. 1, 3 and 16; Exhibit CHN-278, Measures for the Administration of th e Rates for Pollutant Discharge Fees  
Art. 2, Exhibit CHN-279, Regulations for the Administration of the Pollutant Discharge Fees,  Art.2; Exhibit 
CHN-270, Law on the Prevention and Control of Environmental Pollution by Solid Wastes , Arts. 1, 5 and 11; 
Exhibit CHN-523, Opinions of the State Council on Fu rther Accelerating the Recycle Economy,  Arts. II.5 and 
II.6; Exhibit CHN-525 , Guiding Opinions on Strengthening the Recycling for Regenerated Resources , Art. I(I); 
Exhibit CHN-526, Circular on Trial Works on the Constructio n of Recycling System for Regenerated 
Resources,  Para.2 of Introduction and Arts. II. I and II.2; Exhibit CHN-145, 2007 Plan for Energy Conservation 
and Pollutant Discharge Reduction , Art. II (3); Exhibit CHN-272, Energy Conservation Law , Art.52; Exhibit 
CHN-467, Circular on Implementation Plans and Measures regarding Energy Conservation and Pollutant 
Discharge Reduction, Article I.2 of the Implementation Plan for Statistical Indicator System of Energy 
Consumption caps per Unit of GDP; Exhibit CHN-469, Circular on Strengthening and Regulating the 
Administration of New Projects ; Exhibit CHN-472, Energy Consumption Caps Zinc Smelting,  Arts. 4.1 and 4.2; 
Exhibits CHN-470/CHN-471/CHN-473, Energy Consumption Caps on Coke / Magnesium / Ferro-alloys CHN-
470, Arts. 4.1 and 4.2; CHN-471, Arts. 4.1 and 4.2; and CHN-472, Arts. 4.1 and 4.2; Exhibit CHN-101, Law on 
the Promotion of Recycle Economy , Arts. 29 to 41; Exhibit CHN-192, Coking Industry Entrance Rules , General 
Introduction; Exhibit CHN-269, Law on the Prevention and Control of Water Pollution,  Arts. 1, 2, 10, 12 and 
13; Exhibit CHN-287, 2008 Arrangement for Energy Conservation and Pollutant Discharge Reduction , Arts. II, 
III, V, VII and VIII; Exhibit CHN-475, Circular on Further Strengthening the Checks on Clean Production of 
Key Enterprises , para. 1.3; Exhibit CHN-484, Pollutant Discharge Standards ; Exhibit CHN-288, 2009 
Arrangement for Energy Conservation and Pollutant Discharge Reduction , Arts. IV, VI and VIII; Exhibit CHN-
527, Circular of Second Batch of Trial Works on th e Construction of Recycling System for Regenerated 
Resources,  Arts. I and II; Exhibit CHN-528, Circular on the Application fo r the Construction of Recycling 
System , Arts. I(I) and II(I); Exhibit CHN-446 , 2010 List of Enterprises Subject to Elimination of Outdated 
Capacity in Industry Sector and Exhibit CHN-479, Circular on Strengthening the Elimination of Outdated 
Capacity, Art. II.2.  
925 China's response to Panel question No. 19 following the second substantive meeting. WT/DS394/R 
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  four EPR products for which it invokes a defenc e under Article XX (b) (coke, unwrought magnesium, 
unwrought manganese, and silicon carbide), it has put  in place an array of environmental measures 
regulating the steel and aluminium industries with th e aim of setting emission levels; air, water and 
solid waste pollution standards; energy conservation measures, including energy quotas; measures to 
control the expansion of the steel and aluminium industries; policies to eliminate outdated capacities and production technologies; measur es to promote recycling and the development of a "recycling 
economy"; measures to promote green technologies and investment; as well as trade instruments.
926 
7.583  The Panel is impressed by the breadth and the depth of China's environmental actions and the 
regulatory potential in the light of the various stated  policy goals.  For the Panel, this confirms the 
complainants' contention that China has the regulatory framewo rk that puts in place high 
environmental standards (which, as noted by China at  the beginning of the dispute, the United States 
and the European Communities did a few years ago) th at could be used to obviate the need for export 
restrictions. The Panel is not informed of any specific operational standards that these measures927 put 
in place, nor of any specific procedural requirements and implementation processes. A number of the 
measures also do not concern or do not specifically me ntion the EPR or scrap products at issue in this 
dispute, while others only express the intention to ap ply export restrictions on certain products.  In the 
Panel's view, these are additional examples of me asures that have the potential to serve as an 
alternative to China's export restrictions on EPRs.  Finally, the Panel has before it a number of other 
                                                      
926 China's response to Panel question No. 14 following the second substantive meeting. 
927 Exhibit CHN-268, Law on the Prevention and Control of Atmospheric Pollution , Art.5; Exhibit 
CHN-271:  Law on Promoting Clean Production , Art.3; Exhibit CHN-276:  Law on Environmental Impact 
Assessments, Arts. 3 and 7-9; Exhibit CHN-278, Measures for the Administration of the Rates for Pollutant 
Discharge Fees, Art.2; Exhibit CHN-279: Regulations for the Administration of the Pollutant Discharge Fees , 
Art.2; Exhibit CHN-270, Law on the Prevention and Control of Environmental Pollution by Solid Wastes , Art.5; 
Exhibit CHN-444, Circular on the Measures to Cont rol the Export of EPR products , Arts. I, II(II), III(IV); 
Exhibit JE-18, Development Policies for th e Iron and Steel Industry , Art. 30, para.3; Exhibit CHN-523, 
Opinions of the State Council on Fu rther Accelerating the Recycle Economy , Art. II (6); Exhibit CHN-525, 
Guiding Opinions on Strengthening the Recycling for Regenerated Resources , Art. I(II); Exhibit CHN-123, 
Eleventh Five-Year Plan fo r Environmental Protection (2006-2010), Arts. III(I), para. 1; III(III), para.3; IV(II), 
para.2; V(II) and V(II), para.1; Exhibit CHN-144, Guidelines of the Eleventh Five-Year Plan for National 
Economic and Social Development , Chapter 13, Section 1; Chapter 19, Section 2; Chapter 22, Section 1 (special 
column 10); Section 5, Chapter 24; Section 2 and Chapter 22, Section 5 (special column 11); Exhibit CHN-452, 
2006 Adjust of Interim Tariff Rates of Certain Import and Export Commodities , para. 3; Exhibit CHN-526, 
Circular on Trial Works on the Construction of Recycling System for Regenerated Resources , Arts. II(2) and 
II(3); Exhibit CHN-145, 2007 Plan for Energy Conservation and Pollutant Discharge Reduction , Arts. I, 
para. 2; II, para.4; III, para.8; IV, para.12; V, para.18; VII para. 32 and Annex; Exhibit CHN-146, Further 
Adjust of Import and Export Tariffs of 2008 , para.3; Exhibit CHN-272, Energy Conservation Law , Arts. 7, 9, 30, 
52 and 66; Exhibit CHN-467, Circular on Implementation Plans and Measures regarding Energy Conservation 
and Pollutant Discharge Reduction , Arts. I.2 and II.2 of the Implementation Plan for Statistical Indicator 
System of Energy Consumption caps per Unit of GDP , pp. 2 and 4; Exhibit CHN-453, 2007 Adjust of Tariff 
Rates from June 1 to Control the Export of High-Energy Consumption Products , para.1; Exhibit CHN-469, 
Circular on Strengthening and Regulating the Administration of New Projects , Art. I; Exhibit CHN-100, 2009 
Further Adjust of Import and Export Tariffs , para.3; Exhibit CHN-101, Law on the Promotion of Recycle 
Economy , Art. 16; Exhibit CHN-192: Coking Industry Entrance Rules , Arts. I, para.2 and II, para.1; Exhibit 
CHN-269, Law on the Prevention and C ontrol of Water Pollution , Art. 10; Exhibit CHN-287, 2008 
Arrangement for Energy Conservation and Pollutant Discharge Reduction , Arts. III, V, VII, XI; Exhibit CHN-
420, Policies and Actions for Addressing Climate Change , Art. IV and pp. 8-10; Exhibit CHN-475, Circular on 
Further Strengthening the Checks on Clean Production of Key Enterprises , Art 1.3; Exhibit CHN-99, 
Adjustment and Revitalization Plan for Non- Ferrous Industry , Arts. 1, 2.3.3 and 3.2; Exhibit CHN-288, 2009 
Arrangement for Energy Conservation and Pollutant Discharge Reduction , Arts. III and VII; Exhibit JE-10, 
Guidance for Enhancing the Management of Raw Materials Industries , para.6; Exhibit CHN-446, 2010 List of 
Enterprises Subject to Elimination of Outdated Capacity in Industry Sector , and Exhibit CHN-479, Circular on 
Strengthening the Elimination of Outdated Capacity , Art. II.2.  WT/DS394/R 
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  documents that simply identify goals rather than specific standards and that do not provide evidence 
as to whether any policies were implemented to seek to achieve these goals. The Panel finds it 
difficult to assess to what extent these measures have  affected the steel and aluminium producers, and 
whether and how they have contributed to the reduc tion of EPR pollution.  Nor is there evidence why 
these standards could not be used to replace the use of export restrictions. 
7.584  China seems, therefore, to have a regulator y framework to put in place the alternative 
measures suggested by the complainants.  China clai ms, however, that export restrictions are "also" 
necessary, and seeks to justify its use of a combin ation of export restrictions and other domestic 
measures on the basis that export restrictions provide  additional benefits compared to those resulting 
from reliance on environmental regulations alone . In other words, according to China, export 
restraints complement the alternative measures identified by the complainants.
928 
7.585  China asserts that these additional benefits provide d by the combined use of export restraints 
and other domestic measures include short, medium, and long term positive effects.  Regarding the 
short term benefits, China claims  that its export restraints on EP Rs effect an immediate pollution 
reduction, and that this is important because the environmental measures in place cannot fully address 
the environmental damage caused by EPR production.929 In this regard, China points out that without 
export restrictions EPR export prices would be too low with respect to the social cost of production of 
EPRs (as they would not take into account the envi ronmental costs). Since e nvironmental regulations 
alone are not sufficient to fully eliminate the environmental damage from EPR production, export 
restrictions are necessary. Thus by increasing th e world price for EPRs, China encourages producers 
to internalize the environmental costs associated with EPR production.930  
7.586  The difficulty with China's contention is that export restrictions gene rally do not internalize 
the social environmental costs931 of EPRs' production in the domestic economy. This is because 
export restrictions reduce the domestic price of EPRs and therefore they stimulate, instead of 
reducing, further consumpti on of polluting EPR products.932 Indeed, the Panel understands that all 
parties agree that, in general, export restrictions are not an efficient policy to address environmental 
externalities when these derive from domestic producti on rather than exports or imports. This is 
because generally the pollution generated by the pr oduction of the goods cons umed domestically is 
not less than that of the goods consumed abroad. So  the issue is the production itself and not the fact 
that it is traded.933 
                                                      
928 China's response to Panel question No. 39, following the second substantive meeting, paras 43-62. 
929 With respect to the medium and long-term comple mentary effects of export restrictions invoked by 
China, the Panel notes that China made the same ar guments in the context of its demonstration of the 
contribution of its export restrictions to its environmental goals. The Panel refers to paras. 7.539-7.554 above.  
930 China's response to Panel question No. 39 following the second substantive meeting, para. 252. 
931 The social environmental costs are the costs of  polluting the environment while producing EPRs. 
932 See also United States' comments on China's res ponse to Panel questions No. 39 following the 
second substantive meeting, para. 144. 
933 China argues that there are positive spillovers associ ated with the consumption of EPRs, and that in 
the presence of such consumption spillovers, export restraints are " also part of the most efficient policy set". 
The Panel understands that this means that a policy-make r can decide to couple an  export restriction with 
another domestic policy tool (a production tax or a consumption subsidy) in order to achieve the optimal export, 
production and consumption quantities. The rationale for choosing this option, according to China, is that export 
measures are cost effective compared  to other policies (China's comments on the complainants' response to 
Panel question No. 22 following the second substantive meeting, para. 77). However, the Panel is of the view 
that China did not provide sufficient evidence that the adoption of policies that tax pollution at the source is too 
costly for China.    WT/DS394/R 
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  7.587  Finally, the Panel notes that China's overall argument seems to be that the use of WTO-
inconsistent export restrictions on EPRs (notwithstanding that several regulations of the type 
suggested by the complainants as alternatives are already operating in China) provides benefits 
additional to those which WTO-consiste nt alternatives alone can offer.  
7.588   In the Panel's view, China's interpreta tion of Article XX(b) would seem to expand 
substantially the scope of the exception provision , so as to allow quantitative export restrictions. 
However, the Panel is not asked to discuss the a ppropriateness of the WTO rules at issue in the 
present dispute. We are mandated to determine whether China has demonstrated that its WTO-
inconsistent export restrictions can be justified as an exceptional measure necessary for the reduction 
of pollution and for the protection of the health of the Chinese population. It will only be able to do so 
if it can establish that available WTO-consistent alternatives cannot provide the level of protection 
that it chooses to employ. This it has not done.  
7.589  Finally, the Panel returns to the complainants' suggestion that "[s]ince China's stated concerns 
with life and health relate to the pollution associat ed with primary production, […] [it could adopt] 
more stringent pollution controls on th e primary production of the metals".
934 China has declined to do 
so, arguing that "the presence of administrativ e, monitoring, and enforcement costs renders impossible  
[…] [the adoption of policies] that tax activities at the pollution source […]".935 In the Panel's view, 
this does not constitute an adequate explanation as to why WTO-consistent production caps or taxes 
are not reasonably available to China to replace the use of its WTO-inconsistent export restrictions.  
7.590  The Panel concludes that China has not been ab le to justify why less trade restrictive and 
WTO-consistent alternatives available, as identifie d by the complainants and acknowledged to exist 
by China, cannot be used in lieu of applying export restrictions. It is not a question of imposing more 
"onerous production-limiting environmental measures"936, but of enhancing and implementing 
existing environmental measures, as well as establi shing new ones where none exists, that have a 
direct impact on pollution relating to the production of EPR products. 
(v) Conclusions on the necessity of the measure for EPRs  
7.591  For the reasons discussed above, the Panel finds that China has not demonstrated that its 
export restrictions on EPRs, in particular its export duties on manganese metal, magnesium metal and 
coke, and its export quotas on coke  and on silicon carbide, are justified pursuant to Article XX(b). 
(c) Whether export duties applied to zinc scrap, magnesium scrap and manganese scrap are 
justified pursuant to Article XX(b) of the GATT 1994 
7.592  China seeks to justify its export restrictions on scrap on the basis of their alleged contribution 
to the objective of protecting human, animal or plant life or health. According to China, the 
production from crude ores (i.e. primary production) of magnesi um, manganese and zinc presents 
important health risks937 due to high levels of pollution and energy intensity connected with that 
production. In contrast, the production of these metals  using recycled scrap, or so-called "secondary 
production", is significantly less polluting and more ener gy efficient, thereby reducing risks related to 
non-ferrous metal production using crude ores.938 Export duties on scrap are necessary to bring about 
                                                      
934 European Union's second written submission, pa ra. 395. See also: United States' second written 
submission, para. 102; Mexico's second written submission, para. 106. 
935 China's comments on the complainants' response to Panel question No. 22, following the second 
substantive meeting, para. 83 (emphasis added). See also Exhibit CHN-519, paras. 34-40. 
936 China's response to Panel question No. 39, following the second substantive meeting, para. 265. 
937 Identified in Annex B of China's first written submission. 
938 China's first written submission, paras. 230, and 248.  WT/DS394/R 
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  a shift from primary production to secondary production, because they guarantee a stable supply of 
scrap which is necessary for the develo pment of the secondary industry.   
7.593  As with export restrictions on EPRs, the compla inants argue that China's goal is not health-
related but its economic development.  
7.594  As with the export restrictions on EPRs, the Pa nel needs to assess whether China has met its 
burden of proving that these export restrictions are "necessary" to protect the health of the Chinese 
people.  As discussed earlier, the necessity test calls for a balancing of the importance of (i) the value at issue, (ii) the choice of the measure and (iii) its  contribution to the realization of the policy goal 
versus the restrictiveness of such an export restric tion in the light of the availability of effective 
alternative measures. 
7.595  The Panel is of the view that it does not need  to review the stated goals of the export 
restrictions on scrap products; we have already review ed them in the context of our consideration of 
export restrictions on EPRs. Nor do we need to discuss the importance of the values invoked by China 
in order to seek to justify its WTO-inconsistent ex port restrictions.  As with export restrictions on 
EPRs, China invokes values of the highest importance:  the reduction of pollution and the protection of 
health. All parties agree that these values are import ant, but the complainants' fundamental point is 
that the real objective of China's export restricti ons on scrap is not the reduction of pollution caused 
by the use of EPRs, but rather the provision of low price raw material to its downstream industry to further stimulate its economic development.  As we sai d above, this is not a justification factored into 
Article XX(b). 
7.596  We examine, hereafter, China's argument th at its export restrictions on scrap products 
contribute to the realization of China's goal to  reduce pollution created by the use of EPRs. 
(i) Contribution of the measure  
7.597  China asserts that the non-ferrous metal scrap products currently make a material 
contribution, and are apt to contribute to the reduc tion of health risks rela ted to metal production by 
(i) in the short-term, reducing the level of polluti on and energy intensity involved in the production 
from crude ores of magnesium metal, manganese metal, and zinc; and, (ii) in the medium- to long-term, contributing to the development and use of r ecycling technologies, and thus, a more sustainable 
secondary production of non-ferrous metals.
939   
Whether China has discharged its burden of proof that export duties are currently  making a 
material contribution to the stated objective 
7.598  China's main premise is that an "X" level of export duties on scrap will lead to a "Y" level of 
pollution saved. This is because export restrictions  reduce the price for secondary production relative 
to primary production of the metal, thus fosteri ng the consumption of secondary production. Since 
according to China secondary production is less polluting than primary production, for a given 
amount of downstream production there will be a reduced level of pollution.940 
7.599  In support of its claim that export restrictions  on non-ferrous metal scrap currently make a 
material contribution to the reduction of pollution,  China submits the results of a simulation study 
based on a model of demand and supply. On the basis of this model, China first estimates the impact 
of an export restriction on the consumption of scrap .  In particular, China estimates that the export 
                                                      
939 China's first written submission, paras. 263- 282. 
940 China's first written submission, paras. 263- 282. WT/DS394/R 
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  duty of 10% on magnesium scrap increases domestic c onsumption of scrap by 1.92%; the export duty 
of 20% on manganese scrap increases its domestic c onsumption by 5.07%; and the 10% export duty 
on zinc scrap increases domestic consumption by 0.63%.
941 China estimates the impact of this 
increased availability of scrap on the reduction of pollution, relying on the following assumptions: (i) 
all scrap is recycled (that is, a 100% scrap recovery ra te, or equivalently 1 tonne of scrap of each scrap 
product produces roughly 1 tonne of the secondary metal); (ii) secondary production is a perfect 
substitute for primary production, so  that 1 tonne of secondary production can be used in place of 1 of 
tonne primary production; and that (iii) scrap cons umption in 2009 is 10% of  primary production (or 
equivalently that secondary producti on is 10% of primary production).942  
7.600  The Panel has not been convinced by the an alysis submitted by China for a number of 
reasons.  First, China's quantitative analysis of the current effect of export duties on scrap on their consumption suffers from a number of technical we aknesses.  The model used by China to estimate 
the effects of export restrictions on domestic consum ption of scrap is the same as the one China uses 
for estimating the impact of restrictions on the pr oduction of EPR products.  Therefore, many of the 
issues discussed above with respect to metals also apply to scrap. Most importantly, the Panel recalls 
its view that the quality of the data used for the analysis seriously undermines the reliability of the 
results. In this regard, the Panel recalls that th e sensitivity analysis submitted by the complainants 
(whose results are reported in Table A, Exhibit JE-185 ) shows that the estimated size of the effects of 
export restraints depends crucially on th e numerical values of the parameters.
943  
7.601  Second, the assumptions China made in calculating the pollution savings resulting from 
increased consumption of scrap (namely, 10% rate  of secondary production and 100% scrap recovery 
rate) are not supported by evidence. In particul ar, China presents no evidence on the magnitude of 
secondary production in China. In the case of manga nese, the evidence before the Panel supports the 
view that secondary production of manganese metal fr om manganese scrap is very limited at best (and 
thus the assumption that all scrap goes into secondary  production of the metal appears incorrect).  
Indeed as noted by China's expert, "manganese scrap is  almost always used and reused in alloy form; 
it is rarely recovered as manganese metal".944  Therefore, the Panel is unable to place much store in 
the results of these calculations.  
7.602  Third,  China addresses the issue of the pollution associated with the production of EPRs in 
isolation and does not take into account the pollu tion that would result from increased downstream 
production. The economic study put forward with a view to justifying export duties on scrap945 does 
not consider the upstream-downstream linkages a nd the interaction between export duties on scrap 
and on metals. To the extent that an export rest riction on scrap may foster the development of 
downstream sectors, China's estimations of polluti on reduction do not take into account the additional 
pollution generated by the downstream industries. Ch ina claims that the pollution generated by the 
downstream sector is minor compared to the redu ced pollution that will result from the substitution 
                                                      
941 China's first written submission, para. 269. 
942 Exhibits CHN-124 and CHN-147. 
943 This is particularly true for scraps where the share of domestic  production that is domestically 
consumed is based on data for primary metal rather than scraps. 
944 See Exhibit CHN-11, footnote 25, p.5.  The complainants provided argumentation and evidence 
aiming to show that secondary production of manganese metal is not feasible and did not occur in United States' 
opening oral statement at the first substantive meeting, para.106; United States' second written submission, 
para. 55; United States' opening oral statement at the second substantive meeting, paras. 55-56; United States 
comments on China's response to Panel question No 27 following the second substantive meeting. China 
provided argumentation and evidence aiming to rebut the United States' claim in Chin a's response to the Panel 
question No. 27 following the second substantive meeting, paras. 131 and 132; China's second written 
submission, paras. 340 and 341; Exhibit CHN-481 p.5; Exhibit CHN- 486. 
945 Exhibit CHN-124.  WT/DS394/R 
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  between primary and secondary production of the meta ls at issue. However, as discussed above for 
export restrictions on EPR products
946, the Panel finds that the ev idence submitted by China that 
shows the pollution by metric tonne of various pr oducts does not permit an evaluation of the pollution 
generated by the amount of downs tream production using the additional units of scrap available for 
domestic consumption as a result of the export du ties on these materials. Consequently, it is not 
possible to reach a determination on the net effects on pollution of export duties on scrap. 
7.603  Fourth, the Panel believes that the assessment of the contribution that a measure currently 
makes to the stated objective should not be done in isolation. We consider that the imposition of an 
export restriction on manganese ores, by providing an incentive to primary production, may 
potentially counterbalance the alleged effect of  export restrictions on secondary production (from 
scrap products), thus undermining China's objective.  The Panel is aware of China's claim that, in 
practice, export restrictions on manganese ores and zinc ores do not affect their domestic price because these products are largely imported, as opposed to exported, by China.
947  However, the Panel 
notes that on this basis one should also not expect any effect of export restrictions on two categories 
of zinc scrap (zinc waste and scrap, "7902.0000" an d zinc ash and residues "2620.1900"), as the data 
provided in Exhibit CHN-289 show with respect to these two products significantly higher figures for 
imports than for exports. Yet, Chin a claims that the domes tic price of these zinc scrap products has 
been affected by the imposition of export restrictions on those products. Furthermore, as discussed above, the low export to import ratio may simply be th e outcome of the export restrictions themselves.  
7.604  In light of the above, the Panel is of the vi ew that China has not proved that the export 
measures it has in place on scrap are currently  making a material contribution to the pollution 
reducing objective. Indeed China even asserts that  at present the effect of export duties on scrap 
products is at best modest.
948 Such contribution, if any, cannot be material, at least, in the present. 
Whether China has discharged its burden of proof that export duties are apt to  make a 
material contribution in the fu ture to the stated objective 
7.605  China argues that its export duties on metal scr ap products are "apt to" make a material 
contribution in the future to the objective r ecognized under Article XX(b) as these measures are 
necessary for the development of the recycling indust ry.  In particular, China asserts that "to achieve 
its objective of successful substitution of secondary production for primary production, it must control 
and manage its limited scrap resources".949 "The export duties will safeguard stable and predictable 
markets for scrap"950, thus allowing the development of China's recycling industry. 
7.606  To justify the use of export restrictions on scrap, China identifies high foreign demand for 
scrap and the unstable foreign supply thereof as two factors that frustrate China's long-term objective 
of substituting secondary for primary production.  Howe ver, there is no evidence before the Panel that 
supports China's claim that forei gn demand for scrap is a cause of the low level of development in 
China of the recycling industry for magnesium, ma nganese and zinc metals. Furthermore, China does 
not explain how, given its low level of exports of scrap, the imposition of an export restriction would 
help guarantee a critical mass of scrap resources and help develop the recycling industry.951      
                                                      
946 See para. 7.534 above. 
947 China's response to Panel question No. 49 following the first substantive meeting, para. 247. 
948 China's response to Panel question No. 36 following the second substantive meeting, para. 164. 
949 China's first written submission, para. 265. 
950 China's first written submission, para. 282. 
951 United States' comments on China's response to Panel question No. 36 following the second 
substantive meeting , paras.127-130. WT/DS394/R 
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  7.607  With respect to the supposed international suppl y constraints on the supply of scrap, the Panel 
also stresses the negative effect that a reduction of the domestic price for scrap may have on the 
incentive to collect scrap. China argues that various other measures that it has in place to foster the 
development of domestic scrap s upply channels "countervail any downward pressure on metal scrap 
prices".
952 However, China does not substantiate  this claim with any evidence.  
7.608  Another effect of export restrictions on scrap  is that by reducing the domestic price of 
secondary production they will help to develop the dow nstream sector. This has two implications for 
the case at issue. First, as discussed above953, China does not take into account the pollution generated 
by the downstream sector. Second, to the extent that export duties favour the expansion of the 
downstream sector, the demand for raw materials increases, including more polluting primary production. China's calculations of the effects of an export duty on scrap on pollution do not take 
these indirect effects into account.  
7.609  Given the above, the Panel considers that the ev idence provided by China is not sufficient to 
demonstrate that its export restrictions on scrap are apt to contribute to the stated objective.  
(ii) Availability of WTO-consistent or les trade restrictive alternative measures  
7.610  The Panel understands that there are a number  of measures that could promote more 
effectively the supply of scrap and the developm ent of secondary production. For example, China 
itself recognises the role that measures such as the introduction of a labelling requirement, incentive 
schemes, research grants, and low import tariffs fo r secondary inputs, have ha d in developed countries 
on the development of a secondary industry.
954 We have reviewed in pa ragraphs 7.564-7.590 above 
China's arguments and evidence regarding alternativ e measures suggested by the complainants, many 
of which concern the recycling industry and the ongoing change in China's economy towards a more 
recycle-friendly economy. Importantly, China recognizes that a major impediment to the development of the recycling sector in China is the lack of r ecycling infrastructure; but the recycling sector is 
expected to be transforming rapidly or at least China states that it has put in place measures aimed at 
promoting "the rapid growth of domestic  recycling and reprocessing industries".
955 From the evidence 
put forward and the arguments of the parties, the Panel is of the view that there are recycling 
infrastructure measures that China is  in the process of setting up to facilitate the development of scrap 
supply.956  
7.611  The Panel finds that China has not demonstr ated that its export duties on manganese, 
magnesium and zinc scrap products are justified pursuant to Article XX(b).     
(d) Conclusions on the necessity of the measure pursuant to Article XX(b) of the GATT 1994  
7.612  For the reasons mentioned above, the Panel finds that even assuming arguendo  that it could 
invoke Article XX(b) of the GATT 1994 to justify its export duties contrary to its Accession Protocol, 
China has not demonstrated that its export duti es on zinc scrap, magnesium scrap and manganese 
scrap are justified pursuant to Article XX(b). 
                                                      
952 China's response to Panel question No. 37 following the second  substantive meeting, para. 192. 
953 See para. 7.602 above. 
954 China's first written submission, para. 278. 
955 China's response to Panel question No. 36 following the second substantive meeting, para. 164. 
956 United States' second written submission, para 68;  Mexico's second written submission, para 71.  WT/DS394/R 
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  4. Summary of the Panel's findings on China's invocation of Articles XI:2(a), XX(b) and 
XX(g) of the GATT 1994 
7.613  The Panel recalls that China's export quota on bauxite  is inconsistent with Article XI:1 of the 
GATT 1994.  the Panel finds that China has not demonstrated that its export quota applicable to 
refractory-grade bauxite is temporarily applied within  the meaning of Article XI:2(a) to either prevent 
or relieve a critical shortage.  The Panel further fi nds that China has not demonstrated that its export 
quota applicable on refractory-grade bauxite relat es to the conservation of exhaustible natural 
resources and was made effective in conjunctio n with restrictions on domestic production or 
consumption pursuant to Article XX(g) of the GATT 1994. 
7.614  The Panel recalls that China's export duties on fl uorspar is inconsistent with Paragraph 11.3 
of China's Accession Protocol.  The Panel finds arguendo  that even assuming that Article XX(g) of 
the GATT 1994 were available to justify export dut ies in violation of China's Accession Protocol, 
China has not demonstrated that its export duties on fluorspar relate to the conservation of exhaustible 
natural resources and were made effective in conj unction with restrictions on domestic production or 
consumption pursuant to Article XX(g) of the GATT 1994. 
7.615  The Panel recalls that China's export quotas on coke, silicon carbide are inconsistent with 
Article XI:1 of the GATT 1994 and China has not de monstrated that they are necessary within the 
meaning of Article XX(b) of the GATT 1994. 
7.616  The Panel recalls that China's export duties on EPRs and scrap products are inconsistent with 
Paragraph 11.3 of China's Accession Protocol.  The Panel finds arguendo  that even assuming that 
Article XX(b) of the GATT 1994 were available to justify export duties in violation of China's 
Accession Protocol, China has not demonstrated that  its export duties on EPRs and scrap products are 
necessary within the meaning of Article XX(b) of the GATT 1994. 
7.617  In light of these findings under Articles XX(g) a nd XX(b), the Panel concludes that it is not 
necessary to examine whether the application of the export quotas and export duties is consistent with 
the provisions of the chapeau of Article XX. This  is because when a measure does not meet the 
requirements of any sub-paragraphs of Article XX  of the GATT 1994, it cannot be justified pursuant 
to Article XX of the GATT 1994. 
5. Whether China's export quotas on certain form s of bauxite, coke, fluorspar, silicon 
carbide and zinc are inconsistent with Par agraph 1.2 of China's Accession Protocol and 
Paragraphs 162 and 165 of China's Working Party Report 
7.618  The complainants argue that since China's export quotas on bauxite, coke, fluorspar, 
manganese, silicon carbide are inconsistent with  GATT Article XI, the same quotas are necessarily 
inconsistent with paragraph 1.2 of China's Accessi on Protocol and Paragraphs  162 and 165 of China's 
Working Party Report.  The complainants therefore request the Panel to find that China quotas are 
also inconsistent with China's ob ligations under its Accession Protocol. 
7.619  To the extent the Panel finds China's export quot as are inconsistent with Article XI:1, China 
requests that the Panel exercise judicial economy with respect to claims under Paragraphs 162 and 
165 of its Working Party Report.  China considers the complainants' claims under these provisions are 
duplicative to those under Article XI:1.  It theref ore requests the Panel to exercise judicial economy 
with respect to these claims.957 
                                                      
957 China's first written submission, para. 344. WT/DS394/R 
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  7.620  The Panel notes that Paragraph 1.2 of China's Accession Protocol provides: 
"The WTO Agreement to which China acced es shall be the WTO Agreement as 
rectified, amended or otherwise modified  by such legal instruments as may have 
entered into force before the date of accessi on.  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." 
7.621  Thus, China's Accession Protocol is an "integra l part of the WTO Agreement" and therefore 
contains enforceable commitments including those "com mitments referred to in paragraph 342 of the 
Working Party Report".
958  Therefore, China must comply w ith the commitments undertaken in the 
Working Party Report and listed in paragraph 342 of the Working Part y Report.  Paragraph 342 of the 
Working Party Report includes the "commitments gi ven by China in relation to certain specific 
matters which are reproduced" in paragraphs  162 and 165 of the Working Party Report. 
7.622  Paragraph 162 of the Working Party Report provides that:  
"...China confirmed that China would abide by WTO rules in respect of non-
automatic export licensing and export restri ctions.  The Foreign Trade Law would 
also be brought into conformity with  GATT requirements.  Moreover, export 
restrictions and licensing would only be app lied, after the date of accession, in those 
cases where this was justified by GATT provisions..." 
7.623  Paragraph 165 of the Working Party Report provides that: 
"...China confirmed that upon accession, remaining non-automatic restrictions on 
exports would be notified to the WTO annua lly and would be eliminated unless they 
could be justified under the WTO Agreement or the Draft Protocol..." 
7.624  The Panel concluded in paragraph 7.224 a bove that China's export quotas on bauxite, 
fluorspar, silicon carbide, coke and zinc are inconsistent with these commitments.  China did not offer 
any justification for its 2009 quotas on fluorspar and on zinc.  The Panel further concluded that export 
quotas on coke and silicon carbide are not justified pursuant to Article XX(b) of the GATT 1994, and 
the export quota on bauxite is not justified pursu ant to Article XI:2(a) or Article XX(g) of the 
GATT 1994.  In light of these findings, China has not eliminated the export quotas on those raw materials "upon accession" to the WTO.   
7.625  The Panel recalls that China requested the Panel to exercise judicial economy in respect of the 
complainants' additional claims under Paragraphs 162 and 165 of China's Working Party Report.  The 
Appellate Body has stated that panels are not oblig ed to address all legal claims raised by parties, 
explaining that "[n]othing in [Article 11 of the DSU]
959 or in previous GATT practice requires  a panel 
to examine all legal claims made by the complaining party."960  The Appellate Body later explained 
that "a panel has to address those claims on which a finding is necessary in order to enable the DSB to 
                                                      
958 China's Accession Protocol (Exhibit JE-2). 
959 Article 11 of the DSU provides, in relevant part: "...a panel should make an objective assessment of 
the matter before it, including an objective assessment of the facts of the case and the applicability of and 
conformity with the relevant covered agreements, and make such other findings as will assist the DSB in 
making the recommendations or in giving the rulings provided for in the covered agreements." 
960 Appellate Body Report, US – Wool Shirts and Blouses , p. 18, DSR 1997:I, 323, at p. 339;, DSR 
1997:I, at pages 339-340 citing inter alia, EEC – Import Restrictions , BISD 30S/129, para. 33;  Canada – FIRA , 
BISD 30S/140, para. 5.16; US – Sugar Quota , BISD 31S/67, paras. 4.5-4.6; Japan - Semi-Conductors , BISD 
35S/116, para. 122;  and US –MFN Footwear , BISD 39S/128, para. 6.18.  WT/DS394/R 
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  make sufficiently precise recommendations and rulings  so as to allow for prompt compliance by a 
Member with those recommendations and rulings "i n order to ensure effective resolution of the 
disputes to the benefits of Members."
961  
7.626  The Panel does not consider that making finding s in relation to this claim would assist the 
DSB in making recommendations.  Paragraph 162 pr ovides that China will abide by the WTO rules 
with respect to export restrictions and will only impose export restrictions when justified by 
GATT provisions.  Since the Panel reached the conc lusion above that the same export restrictions 
were inconsistent with GATT Ar ticle XI and not justified pursuant to GATT Article XI:2(a) or 
Article XX(b) or XX(g), the Panel considers that  further findings under China's Accession Protocol 
and Working Party Report on this matter would not be necessary to resolve the dispute.  Therefore, 
the Panel does not make findings in this regard. 
E. EXPORT QUOTA ALLOCATION AND ADMINISTRATION  
7.627  In addition to their claims concerning th e imposition of export quotas to bauxite, coke, 
fluorspar, silicon carbide and zinc962, the complainants further challenge particular aspects of China's 
allocation and administration of export quotas.   
7.628  The complainants submit that requirements to demonstrate prior export performance and fulfil 
a minimum capital requirement to obtain a quota a llocation for bauxite, coke, fluorspar and silicon 
carbide are inconsistent with China's Accession Prot ocol and China's Working Party Report in various 
respects.  The United States and Mexico argue that these requirements are inconsistent with 
Paragraphs 1.2 and 5.1 of China's Accession Protoc ol, in combination with Paragraphs 83 and 84 of 
China's Working Party Report.  The European Unio n argues that these requirements are inconsistent 
with Paragraphs 1.2 and 5.1 of China's Accession Pr otocol, read in combina tion with Paragraph 83(a), 
83(b), 83(d) and 84(a) of China's Working Party Repo rt.  Separately, the European Union argues that 
this prior export performance requirement "is more  likely to result in the exclusion of foreign 
enterprises and individuals from the right to export" a nd is therefore also inconsistent with paragraph 
5.2 of China's Accession Protocol, in combinatio n with Paragraphs 84(a) and 84(b) of China's 
Working Party Report.   
7.629  In addition, the complainants submit that Ch ina's administration of its export quotas is 
inconsistent with Article X:3(a) of the GATT 1994.  Under this provision, the United States and 
Mexico argue that China's administration of its  export quotas through the involvment of the CCCMC 
is inconsistent with Article X:3(a).  The Eur opean Union challenge China's allocation of quotas 
directly through the assessment of quota appli cants' operation/business management capacity. 
7.630  In addition, the European Union argues that China's failure to publish the total amount and 
procedure for the allocation of zinc export quotas in 2009 and 2010 is inconsistent with Article X:1 of 
the GATT 1994.   
7.631  Finally, the United States and Mexico argue that China's allocation of quotas on bauxite, 
fluorspar and silicon carbide based on the bid-winning pr ice is inconsistent with Article VIII:1(a) of 
the GATT 1994 and Paragraph 11.3 of China's Accession Protocol. 
7.632  Should the Panel find that the quota measures ar e inconsistent with the covered agreements, 
and not justified by Articles XX(g) or XX(b) of the GATT 1994, China requests the Panel to exercise 
                                                      
961 Appellate Body Report, Australia – Salmon , para. 223. 
962 The specific forms of the raw materials subject to complainants' claims are identified in Exhibit JE-
6 and in para. 2.2 of the Descriptive Part of these Reports. WT/DS394/R 
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  judicial economy with respect to claims regardi ng quota administration,. China submits that findings 
in these circumstances would serve no additional pur pose to find that the quota administration rules, 
including those relating to allocation through bidding, are WTO-inconsistent.
963   
7.633  In the event the Panel were to consider these cl aims, China requests the Panel to reject them.  
China argues that requirements to demonstrate prio r export performance and fulfil a minimum capital 
requirement are permitted under the GATT 1994 and do not improperly restrict the trading rights of 
enterprises, which would result in any inconsiste ncy in respect of its Accession Protocol or 
Paragraphs 83 or 84 of its Working Party Report.  In respect of the claim of the United States and 
Mexico under Article X:3(a), China argues that no conflict exists in the involvement of the CCCMC 
that would amount to partial administration of its export quotas.  In respect of the European Union's 
claim, China asserts that the Europ ean Union has failed to provide any evidence that the requirement 
to demonstrate operation/business management cap acity runs afoul of the requirements of 
Article X:3(a).  In respect of the European  Union's claim under GATT Article X:1, China 
acknowledges that it did not set a quota amount for zinc in 2009 and therefore asserts no need to have 
published a quota amount, in its defence. Moreover, China argues that it had complied with Article X:1 by publishing that "zinc could only be  exported if China decided to decided to open a 
quota amount".
964  Finally, China argues that the bid-winning price is not a fee or charge "on or in 
connection with exportation" within the meaning of Article VIII:1(a), nor is it a tax or charge "applied 
to exports" within the meaning of Paragr aph 11.3 of China's Accession Protocol.   
7.634  The Panel recalls that it determined above965 that China's export quotas imposed on bauxite, 
coke, fluorspar and silicon carbide, and a prohibition on the export of zinc in 2009 are inconsistent 
with Article XI:1 of the GATT 1994, and quotas on bauxite, fluorspar, silic on carbide and coke are 
not justified pursuant to Articles XX(b) or XX(g) of the GATT 1994. 
7.635  The Panel additionally recalls that panels are not obliged to address all legal claims raised by 
parties.966  As noted, the Appellate Body explained that  "a panel has to address those claims on which 
a finding is necessary in order to enable the DS B to make sufficiently precise recommendations and 
rulings so as to allow for prompt compliance by a Member with those recommendations and rulings 
"in order to ensure effective resolution of the disputes to the benefits of Members."967  
7.636  The Panel bears in mind its statement in para graph 7.664 that "the obligations relating to 
allocations of quotas (Article[] X ...) are distinct from and additional to those relating to Article XI 
and GATT possible justifications.  Even in situ ations where a quota is justified pursuant to 
Article XX, the allocation and administration of a quota must comply with Article[] X ... ".  
Consequently, the Panel considers that in the even t that China were in any instance to impose a quota 
that was justified pursuant to Article XX, it would be relevant for the parties to know whether the 
aspects of China's system of quota administration at issue in this dispute comply with the relevant 
provisions of GATT Article X. 
                                                      
963 China's first written submission, paras. 568-569. 
964 China's response to Panel questio n No. 8, following the first substantive meeting para. 37; China's 
opening oral statement at the second  substantive meeting, para. 298. 
965 See Sections VII.C and VII.D above. 
966 See para. 7.625 above; see also Appellate Body Report, US – Wool Shirts and Blouses , pp. 18-19, 
DSR 1997:I, 323, at pp. 339-340 citing inter alia , EEC – Import Restrictions , BISD 30S/129, para. 33;  Canada 
– FIRA , BISD 30S/140, para. 5.16;  US – Sugar Quota , BISD 31S/67, paras. 4.5-4.6;  Japan – Semi-Conductors , 
BISD 35S/116, para. 122;  and US – MFN Footwear , BISD 39S/128, para. 6.18. 
967 Appellate Body Report, Australia – Salmon , para. 223.  WT/DS394/R 
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  7.637  Accordingly, the Panel will consider the co mplainants' claims under China's Accession 
Protocol and Working Party Report, and under Artic les VIII:1(a), X:1 and X:3(a) of the GATT 1994 
below. 
1. Whether requirements to demonstrate pr ior export performance and a minimum 
capital requirement to obtain a quota allocati on contravenes Paragraphs 1.2, 5.1 and 5.2 
of China's Accession Protocol, read in combination with Paragraphs 83 and 84 of China's Working Party Report 
7.638  The complainants submit that requirements to demonstrate prior export performance and fulfil 
a minimum capital requirement to obtain a quota a llocation for bauxite, coke, fluorspar and silicon 
carbide are inconsistent with China's Accession Prot ocol and China's Working Party Report in various 
respects.  The complainants submit that Chin a expressly undertook in its Accession Protocol and 
Working Party Report to eliminate these specific requirements. 
7.639  The United States and Mexico argue that these re quirements as they pertain to bauxite, coke, 
fluorspar and silicon carbide are inconsistent with  Paragraphs 1.2 and 5.1 of China's Accession 
Protocol, in combination with Paragraphs 83 and 84 of China's Working Party Report.
968 
7.640  The European Union argues that China's prior ex port performance requirement is inconsistent 
with Paragraphs 1.2 and 5.1 of China's Accession Pr otocol, read in combination with Paragraph 83(a) 
and 83(d) of China's Working Party Report.  Separa tely, the European Union argues that this prior 
export performance requirement "is more likely to result in the exclusion of foreign enterprises and 
individuals from the right to export" and is therefor e also inconsistent with paragraph 5.2 of China's 
Accession Protocol, in combination with Paragra phs 84(a) and 84(b) of China's Working Party 
Report.  The European Union argues that China's ce rtain minimum capital requirement for the right to 
export coke, bauxite, silicon carbide and fluorspar is inconsistent w ith Paragraphs 1.2 and 5.1 of 
China's Accession Protocol, in combination with Paragraphs 83(b), 83(d) and 84(a) of China's 
Working Party Report.   
7.641  China requests the Panel to reject the compla inants' claims, including for failure by the 
complainants to "present the problem clearly" with respect to claims under China's Accession 
Protocol and Working Party Report.969  China also criticizes the Eu ropean Union's identification of 
the relevant measures at issue in respect of its claims.970 Lastly, China notes that measures identified 
by the complainants in respect of their clai ms have expired.  China submits that the 2009 Coke Export 
Quota Application Procedures  has been replaced by a 2010 version, which contains similar 
requirements.971  In addition, China submits that the 2001 Export Quota Bidding Measures972 and 
Export Quota Bidding Implementation Rules973 have now expired, and have been replaced by the 2010 
Second-Batch Bidding Qualifications and Review for Export Quotas .974  China submits that, the  2009 
Second Round Export Quota Bidding Announcement  975 was replaced by the 2010 First-Batch Bidding 
                                                      
968 United States' first written submission, paras. 283,  289; Mexico's first written submission paras. 286 
and 292. 
969 China's first written submission, para. 613. 
970 China's first written submission, paras. 614, 618. 
971 China's first written submission, paras. 615, 620. 
972 Exhibits JE-77, CHN-304. 
973 Exhibits JE-78, CHN-305. 
974 Exhibit CHN- 307; China's first written submission, para. 616. 
975 Exhibits CHN-310, JE-91. WT/DS394/R 
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  Qualifications for Export Q uotas of Industrial Products
976, which was in turn replaced by the 2010 
Second-Batch Bidding Qualifications and Review for Export Quotas .977  
7.642  The Panel recalls its finding from its 1 October 2010 ruling978 that the complainants' Panel 
Requests (in their "Section III") set out sufficient connections between the challenged measures and 
certain violations attributed to such measures.  Th e Panel believes that differences in the scope of the 
claims presented by the United States, Mexico and the European Union do not necessarily affect the 
connection between the identified measures and the clai med violations.  The Panel also recalls that in 
paragraph 7.33 above it decided – in light of the complainants' decision to narrow down their claim so 
as to exclude any challenge of any 2010 measure – that it would make findings only in respect of 
China's 2009 measures.  Finally, contrary to China' s claim, the Panel was able to identify measures 
referred to by the European Union in its first writte n submission, with respect to its trading rights 
claims.979   
7.643  Therefore, the Panel will consider the complainan ts' claims together below where relevant, or 
otherwise, separately.   The Panel begins with th e relevant provisions of Ch ina's Accession Protocol.  
(a) China's "trading rights" commitments 
7.644  Paragraph 5.1 of China's Accession Protocol provides: 
"Without prejudice to China's right to regulate trade in a manner consistent with the 
WTO Agreement…within three years after accession all enterprises in China shall 
have the right to trade in all goods…Such right to trade shall be the right to…export 
goods…" 
7.645  Paragraph 5.2 of China's Accession Protocol: 
"Except as otherwise provided for in the Protocol, all foreign individuals and 
enterprises, including those not invested or registered in China, shall be accorded 
treatment no less favourable than  that accorded to enterprises  in China with respect to 
the right to trade." 
7.646  Paragraph 1.2 of China's Accession Protocol provides: 
"The WTO Agreement to which China acced es shall be the WTO Agreement as 
rectified, amended or otherwise modified  by such legal instruments as may have 
entered into force before the date of accessi on.  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." 
7.647  Therefore, China must comply with the commitm ents undertaken in its Working Party Report 
and listed in paragraph 342 of its  Working Party Report.  Paragraph 342 of China's Working Party 
Report includes the "commitments given by China in  relation to certain specific matters which are 
reproduced" in paragraphs 83 and 84 of China's Working Party Report. 
7.648  Paragraph 83(a) of the Working Party Report provides: 
                                                      
976 Exhibit CHN-311. 
977 Exhibit CHN- 307. See: China's first written submission, para. 616. 
978 See paragraphs 1.10 to 1.13 above; Annex F to these Reports. 
979 See, in particular footnotes 224-228, 229-231 of the European Union's first written submission.  WT/DS394/R 
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  "… upon accession, China would eliminate for both Chinese and foreign-invested 
enterprises any export performance…and prio r experience requirements such as 
in…exporting, as criteria for obtaining or maintaining the right to … export." 
7.649  Paragraph 83(b) of the Working Party Report provides: 
"In order to accelerate this approval process and increase the availability of  trading 
rights,  the representative of China confir med that China would reduce the minimum 
registered capital requirement (which applied only to wholly Chinese-invested 
enterprises)  to obtain trading rights  to RMB 5,000,000  for year one, RMB 
3,000,000 for year two, RMB 1,000,000 for year three and would eliminate the 
examination and approval system at the end of the phase-in period for trading rights."  
7.650  Paragraph 83(d) of the Working Party Report provides: 
… within three years after accession, all en terprises in China would be granted the 
right to trade … 
7.651  Paragraph 84(a) of the Working Party Report provides: 
"… China would eliminate its system of examination and approval of trading rights 
within three years from accession.  At that time, China would permit all enterprises in 
China and foreign enterprises and individuals…of other WTO Members to export…all goods (except for the share of pr oducts listed in Annex 2a to the Draft 
Protocol reserved for importation and exportation by state trading enterprises) …" 
7.652  Paragraph 84(b) of the Working Party Report provides: 
"With respect to the grant of trading right s to foreign enterprises and individuals ... 
China confirmed that such rights would be granted in a non-discriminatory and non-discretionary way ... [A]ny requirements for obtaining trading rights would be for customs and fiscal purposes only and would not constitute a barrier to trade ..." 
7.653  In China – Publications and Audiovisual Products , the Appellate Body addressed the 
meaning of China's right to regulate trade under Article 5.1 of China's Accession Protocol.  The Appellate Body described the "right to regulate"  as "an inherent power enjoyed by a Member's 
government, rather than a right bestowed by in ternational treaties such as the WTO Agreement".
980  
The Appellate Body explained further that the phras e "right to regulate trade in a manner consistent 
with the WTO Agreement" referred both to "right s that the covered agreements affirmatively 
recognize as accruing to WTO Members, namely, the power of Members to take specific types of 
regulatory measures in respect of trade in goods  when those measures satisfy prescribed WTO 
disciplines and meet specified criteria", as well as "certain rights to take regulatory action that derogates from obligations under the WTO Agre ement—that is, to relevant exceptions".
981  Finally, 
the Appellate Body explained that the "obligations  assumed by China in respect of trading rights, 
which relate to traders" is "closely intertwined"  with "obligations imposed on all WTO Members in 
respect of their regulation of trade in goods", including those under Article XI of the GATT 1994.982 
                                                      
980 Appellate Body Report, China – Publications and  Audiovisual Products , para. 222. 
981 Appellate Body Report, China – Publications and  Audiovisual Products , para. 223. 
982 Appellate Body Report, China – Publications and  Audiovisual Products , para. 226. WT/DS394/R 
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  7.654  The Appellate Body in China – Publications and Audiovisual Products also took note of the 
Panel's findings in that dispute that paragraphs  83(d) and 84(a) of China's Working Party Report 
"confirm China's obligation to grant the right to tr ade", and paragraph 84(b) of China's Working Party 
Report "contains an obligation to grant in a nondiscr etionary manner the right to trade to foreign 
enterprises and individuals."
983 
7.655  Paragraphs 83(a) and 83(b) of China's Work ing Party Report provide additional specific 
restrictions on China's right to regulate trade.  In particular, Paragraph 83(a) directs China to eliminate 
prior import and export performance requirements for both Chinese and foreign-invested enterprises.  
Paragraph 83(b) directs China to eliminate any "e xamination and approval system" within three years 
of accession, including specifically the elimination of minimum registered capital requirements. 
7.656  Finally, the Panel notes that the transition period following China's accession ended on 11 
December 2004.  None of the raw ma terials at issue in this dispute are included in Annex 2A or 2B.984  
Thus, the commitments undertaken in these provisions ar e applicable to all materials in this dispute.  
The Panel will now consider the complainants' clai ms relating to coke, which China allocates quotas 
directly, and, bauxite, fluorspa r and silicon carbide, which China allocates quotas through a bidding 
system. 
(b) Whether China's prior export performance and minimum registered capital requirements are 
inconsistent with Paragraphs 1.2 and 5.1 of China's Accession Protocol, read in combination 
with Paragraphs 83 and 84 of China's Working Party Report. 
7.657  The complainants submit that China requires exporters to satisfy certain prior export 
performance and minimum registered capital criteria in order to receive an allocation of a quota for 
bauxite, coke, fluorspar and silicon carbi de in order to be able to expor t under the quota.  By virtue of 
the fact that enterprises that fail to meet th ese requirements are not permitted to export, the 
complainants claim that exporters are not granted th e trading right to export these raw materials, in 
contravention of commitments undertaken in China's Accession Protocol. 
7.658  The complainants submit that, under the 2009 Coke Export Quota Application Procedure  985, 
Chinese enterprises must demonstrate that they have exported the requisite amount ("certain level of 
volumes" or "export scale") of coke in the previous three-year period.986  In addition, the complainants 
submit that trading companies must have a registered capital of at least RMB 50 million under the 2009 Second Batch Coke Export Quota  
987 or be prohibited to export under the quota for that year.988  
The complainants submit that these requirements are also applicable to foreign-invested companies 
under the 2009 First Batch Coke Export Quotas for FIEs  989 and 2009 Second Batch Coke Export 
Quotas for FIEs  990, allocating the coke export quota to such companies.991 
                                                      
983 Appellate Body Report, China – Publications and  Audiovisual Products , para.167; see also Panel 
Report, China – Publications and Audiovisual Products , paras. 7.249-7.252, 7.260-7.266, 7.285-7.299, 7.313-
314, 7.318-324. 
984 China's Accession Protocol, WT/L/432, Annex 2A2, 2B, pp. 20, 30 (Exhibit JE-2). 
985 Exhibits CHN-308, JE-85. 
986 United States' first written submission, para. 279; European Union's first written submission, 
para. 222; Mexico's first written submission para. 282;  United States' second written submission, para. 346; 
Mexico's second written submission, para. 349. 
987 Exhibits CHN-338, JE-81. 
988 United States' first written submission, para. 279-280; European Union's first written submission, 
para. 236; Mexico's first written submission para. 282-283. 
989 Exhibit JE-82. 
990 Exhibit JE-83.  WT/DS394/R 
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  7.659  The complainants additionally submit that, through the Export Quota Bidding Measures  
992 
and Export Quota Bidding Implementation Rules993, China requires exporters of bauxite, fluorspar and 
silicon carbide to satisfy certain prior export perform ance and minimum registered capital in order to 
receive an allocation of a quota through bidding.994  They argue that foreign-invested companies are 
also subject to prior export "experience" requi rements and minimum capital requirements under the 
2009 First Round Export Quota Bidding Announcement  995 and 2009 Second Round Export Quota 
Bidding Announcement .996   
7.660  The European Union argues that the prior expor t performance requirement also has the effect 
of denying new applicants the possibility to export.997 
7.661  The United States and Mexico consider that China's prior export performance and minimum 
registered capital requirements are inconsistent with Paragraphs 1.2 and 5.1 of China's Accession 
Protocol, read in combination with Paragraphs 83 and 84 of China's Working Party Report.  The 
European Union considers China's prior export pe rformance requirements are inconsistent with 
Paragraph 5.1 of China's Accession Protocol, read in  combination with Paragraphs 83(a) and (d) of 
China's Working Party Report.998  The European Union considers China's minimum capital 
requirement is inconsistent with Paragraphs 5.1 and 1.2 of China's Accession Protocol and Paragraphs 
83(b), 83(d) and 84(a) of China's Working Party Report. 
7.662  China acknowledges that enterprises seeking to qua lify to receive a share of the coke quota, 
or participate in the allocation of the quota th rough bidding must satisfy minimum export performance 
and minimum capital requirements.999  However, it submits that these requirements do not improperly 
restrict the trading rights of enterprises.  Ch ina argues that Paragraph 5.1 of China's Accession 
Protocol and Paragraphs 83 and 84 of China's Working Party Report "confirm[] that 'China's 
obligation to grant the right to trade cannot impa ir China's power to impose WTO-consistent import 
licensing, TBT and SPS measures'"1000  It submits that these provisions "recognize China's inherent 
power to adopt measures to regulate trade in a WT O-consistent manner."  In other words, China 
argues that these provisions "recognize China's right to impose a WTO-consistent quota ... and to administer that quota consistently with the WTO covered agreements."
1001  
7.663  China contends that it has demonstrated its  quotas to be WTO-consistent.  China argues 
generally that quotas may be WTO-consistent so long as they are administered consistent with 
Articles X:3(a) and XIII of the GATT 1994.1002  China contends that a Member has authority to rely 
upon past trading performance in allocating export quot as, referring to Article 3.5(j) of the Import 
                                                                                                                                                                     
991 United States' first written submission, para. 281;  Mexico's first written submission, para. 284. 
992 Export Quota Bidding Measures ,  CHN-304, Exhibit JE-77. 
993 Articles 11, 6(I) (CHN-305, Exhibit JE-78). 
994 United States' first written submission, paras. 28 5-286; European Union's first written submission, 
para. 221; Mexico's first written submission, paras.  288-289; United States' second written submission, 
para. 347; Mexico's second written submission, para. 350. 
995 Article III(II)iii, III(II)v, III(II)vi (Exhibits JE-90, CHN-309). 
996 Article III.2(3), III.2(6) (Exhibits JE-91, CHN-310).United States' first written submission, 
para. 286; European Union's first written submission,  paras. 222, 236; Mexico's first written submission 
para. 289. 
997 European Union's first written submission, paras. 224-225. 
998 European Union's first written submission, paras. 226-227. 
999 China's first written submission, para. 622. 
1000 China's first written submission, para. 624. 
1001 China's first written submission, para. 625; see also China's second written submission, 
paras. 404-405. 
1002 China's first written submission, paras. 627-628. WT/DS394/R 
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  Licensing Agreement in support of this position.
1003  China submits that the export performance and 
minimum capital requirements under challenge are su ch "eligibility criteria" for the WTO-consistent 
allocation of export quotas.  Therefore, in China' s view, it has not acted inconsistently with its 
obligations under its Accession Protocol as informed by its Working Party Report.  To the extent the 
Panel finds that China's export quotas on bauxite , coke, fluorspar and silicon carbide are WTO-
consistent, China requests the Panel to reject the complainants' claims.   
7.664  The obligations relating to allocation and admi nistration of quotas (Articles X and XIII) are 
distinct from and additional to those relating to Artic le XI and GATT possible justifications.  Even in 
situations where a quota is justified pursuant to Article XX, the allocation and administration of a 
quota must comply with Articles X and XIII and, in the case of quotas on importation, with the WTO Import Licensing Agreement.  
7.665  Regardless, as explained above
1004, Paragraphs 83 and 84 of China's Working Party Report 
includes further commitments granted by China.  Pursuant to Paragraph 5.1 of China's Accession 
Protocol and Paragraphs 83 and 84 of China's Wo rking Party Report, all enterprises in China – 
Chinese and foreign enterprises alike – are to be granted the right to export almost all products1005 
from China, following a transition period that c oncluded on 11 December 2004.  Paragraph 1.2 also 
states that China's Accession Protocol, includi ng Paragraphs 83 and 84 of China's Working Party 
Report, shall be an "integral part of the WTO Ag reement."  In the Panel's view, the regulation of 
"rights that the covered agreements affirmativel y recognize as accruing to WTO Members" must be 
understood in light of the obligations as defined through China's Accession Protocol (and relevant 
provisions of its Working Party Report).  Ch ina expressly committed through these provisions to 
eliminate any "examination and approval system" fo llowing 11 December 2004, including eliminating 
"export performance" and "prior experience re quirements" and minimum registered capital 
requirements. 
7.666  Specifically, Paragraph 83(a) directs China to eliminate any "export performance" and "prior 
experience requirements".  Paragraph 83(b) direct s China to reduce the mi nimum registered capital 
requirements gradually, eliminating its "examinati on and approval system" at the end of 11 December 
2004.  Paragraph 83(d) confirms that enterpri ses would be granted the "right to trade".  
Paragraph 84(a) requires China to permit "all en terprises in China and foreign enterprises and 
individuals…of other WTO Members to export…all goods ".  In addition, Paragraph 84(b) "confirms" 
that these rights would be granted in a non-discriminatory and non-discretionary way. 
7.667  Therefore, the Panel is unable to agree with  China that the "prior  export performance" 
requirement and "minimum registered capital" requirements, challenged by the complainants, are automatically WTO-consistent in the case of Chin a's allocation of export quotas, because China's 
exports allegedly respect the provisions of GA TT Articles X:3(a), XIII of the GATT 1994 or any 
provision of the Import Licensing Agreement.  Such a conclusion would run contrary to the particular 
requirements set forth at the time of China's accession.   
7.668  As discussed in detail in paragraphs 7.182-7. 195 above, the relevant measures identified by 
the complainants, require on their face that expor ting companies (including either "production" or 
"trading" companies) for coke, bauxite, fluorspar  and silicon carbide, supp lied an amount for export 
                                                      
1003 China's first written submission, para. 630; China's second written submission, para. 406. 
1004 See paragraphs 7.653-7.655 above. 
1005 As noted above, goods in Annex 2a of China's Accession Protocol are exempted from the 
commitments of Paragraph 5.1.  However, none of the raw materials at issue in this dispute fall under Annex 2a.  WT/DS394/R 
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  or exported an average annual volume to qualify for a 2009 export quota.
1006  In addition, the relevant 
measures identified by the complainants impose particular minimum registered capital requirements on applicants to export.
1007  The Panel understands these require ments to amount to a form of 
examination and approval based on prior export performance and minimum registered capital 
requirements that China committed to eliminate in  Paragraphs 83(a), 83(b) and 83(d) of China's 
Working Party Report.  The elimination of these requirements are further required by Paragraphs 84(a) and 84(b).   
7.669  For the foregoing reasons, the Panel conclud es that China's prior export performance and 
minimum registered capital requirements imposed on coke pursuant to the 2009 Coke Export Quota 
Application Procedure  
1008, 2009 Second Batch Coke Export Quota  1009, 2009 First Batch Coke Export 
Quotas for FIEs  1010, and 2009 Second Batch Coke Export Quotas for FIEs  1011 are inconsistent with 
Paragraphs 1.2 and 5.1 of China's Accession Protoc ol, read in combination with Paragraphs 83(a), 
83(b) and 83(d); and Paragraphs 84(a) and 84(b) of China's Working Party Report. 
7.670  In addition, the Panel concludes that Ch ina's prior export performance and minimum 
registered capital requirements imposed on bauxite , fluorspar and silicon carbide pursuant to the 
Export Quota Bidding Measures1012, Export Quota Bidding Implementation Rules  2009  First Round 
Export Quota Bidding Announcement1013, and 2009  Second Round Export Quota Bidding 
Announcement  1014 are inconsistent with Para graphs 1.2 and 5.1 of China's Accession Protocol, read in 
combination with Paragraphs 83(a), 83(b) and 83( d); and Paragraphs 84(a) and 84(b) of China's 
Working Party Report. 
(c) Whether China's prior export performance requireme nt is inconsistent w ith paragraph 5.2 of 
China's Accession Protocol and Paragraphs 84(a)  and 84(b) of China's Working Party Report 
7.671  The European Union further argues that Ch ina's prior export performance requirement 
discussed in paragraph 7.640 above is inconsistent with paragraph 5.2 of China's Accession Protocol 
and Paragraphs 84(a) and 84(b) of  China's Working Party Report.  The European Union submits that 
this requirement is "more likely to result in the exclusion of foreign enterprises and individuals from 
the right to export the relevant raw materials ... b ecause foreign enterprises are more likely to be new 
applicants for export quotas than Chinese compani es producing, or traditionally exporting, the [r]aw 
                                                      
1006 2009 Coke Export Quota Application Procedure , Articles I(1)2 and I(2)2 (Exhibit JE-85, CHN-
308); 2009 Second Batch Coke Export Quota , p. 1 (Exhibit JE-81, CHN-338); 2009 First Batch Coke Export 
Quotas for FIEs  (Exhibit JE-82); 2009 Second Batch Coke Export Quotas for FIEs  (Exhibit JE-83); Export 
Quota Bidding Measures , Articles 12, 13 (Exhibits JE-77, CHN-304); Export Quota Bidding Implementation 
Rules , Articles 15-18 (Exhibits JE-78, CHN-305); 2009 First Round Export Quota Bidding Announcement , 
Articles III(II)iii, III(II)v, III(II)v i (Exhibits JE-90, CHN-309); 2009 S econd Round Export  Quota Bidding 
Announcement, Articles III.3, III.5, III.6 (Exhibits JE-91, CHN-310). 
1007 2009 Coke Export Quota Application Procedure , I(2)2 (Exhibits JE-85, CHN-308); Export Quota 
Bidding Measures , Articles 12, 13 (Exhibits JE-77, CHN-304); Export Quota Bidding Implementation Rules , 
Articles 15-18 (Exhibits JE-78, CHN-305); 2009 First Round Export Quota Bidding Announcement , Articles 
III(II)iii, III(II)v , III(II)vi (Exhibits JE-90, CHN-309); 2009 Second Round Export Quota Bidding 
Announcement , Articles III.3, III.5, III.6 (Exhibits JE-91, CHN-310). 
1008 Articles I(1)2 and I(2)2 (Exhibit JE-85, CHN-308). 
1009 Exhibits JE-81, CHN-338 p. 1. 
1010 Exhibit JE-82. 
1011 Exhibit JE-83. 
1012 Articles 12, 13 (Exhibits JE-77, CHN-304). 
1013 Articles III(II)iii, III(II)v, II I(II)vi (Exhibit JE-90, CHN-309). 
1014 Articles III.3, III.5, III.6 (Exhibit JE-91, CHN-310). WT/DS394/R 
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  [m]aterials."
1015  Because of this, the European Union argues that the prior export performance 
requirement "operates in a discretionary and pot entially discriminatory way" against foreign 
enterprises that is contrary to obligations in  Paragraph 5.2 of Chin a's Accession Protocol and 
Paragraphs 84(a) and 84(b) of China's Working Party Report. 
7.672  China argues that the European Union's h as not presented "any evidence supporting its 
allegation of discrimination" or "any explanation of how the ... measures connected to the claim made 
under the provisions at issue".1016 
7.673  The obligation in Paragraph 5.2 of China's Accession Protocol that "all foreign individuals 
and enterprises ... shall be accorded treatment no less favourable than that acco rded to enterprises in 
China with respect to the right to trade."  As explained above1017, Paragraph 84 of China's Working 
Party Report includes further commitments granted by China.  Paragraph 84(a) requires China to 
permit "all enterprises in China and foreign ente rprises and individuals…of other WTO Members to 
export…all goods", except for those listed in Annex 2A .  In addition, Paragraph 84(b) "confirms" that 
these rights would be granted in a non-di scriminatory and non-discretionary way. 
7.674  As discussed in detail in Section VII.C.2(a)(ii)  and VII.C.2(b)(i) above, the relevant measures 
identified by the European Union require on thei r face that exporting companies (including either 
"production" or "trading" companies) for coke, bauxite, fluorspar and silicon carbide, supplied an 
amount for export or exported an average annual volume to qualify for a 2009 export quota.1018   
7.675  In the Panel's view, the measures do not expressly "operate[] to the detr iment and exclusion of 
foreign enterprises from quota allocation."1019  Instead the past export performance requirement 
applies similarly to both Chinese enterprises and fore ign ones.  Accordingly, there is no basis on the 
face of the measures alone to operate in a discrimin atory way against foreigners.  In addition, the 
European Union asserts that the measures in practice operate in a discriminatory way to deny foreign 
enterprises participation in export quota allocation, stating that "foreign enterprises can never meet the 
conditions for participation to ex port quota allocation procedures."1020  However, as China notes, the 
European Union has not submitted evidence beyond mere assertion that foreign enterprises have not 
been allocated export quotas in the past.1021 
7.676  In the absence of evidence that foreign ente rprises have not been allocated export quotas in 
the past, and thus would be excluded from receiving export quotas in the future, the Panel concludes 
that it has not basis to find the measures operate in a discriminatory manner.  Under the measures, 
                                                      
1015 European Union's first written submission, para. 231; see also European Union's second written 
submission, para. 146. 
1016 China's first written submission, para. 634; China's second written submission, para. 409. 
1017 See paragraphs 7.646-7.647 above. 
1018 2009 Coke Export Quota Application Procedure , Articles I(1)2 and I(2)2 (Exhibits JE-85, 
CHN-308); 2009 Second Batch Coke Export Quota , at p. 1 (Exhibits JE-81, CHN-338); 2009 First Batch Coke 
Export Quotas for FIEs  (Exhibit JE-82); 2009 Second Batch Coke Export Quotas for FIEs  (Exhibit JE-83, No 
Chinese Exhibit); Export Quota Bidding Measures , Articles 12, 13 (Exhibit JE-77, CHN-304); Export Quota 
Bidding Implementation Rules , Articles 15-18 (Exhibit JE-78, CHN-305); 2009 First Round Export Quota 
Bidding Announcement,  Articles III(II)iii, III( II)v, III(II)vi (Exhibits JE-90, CHN-309); 2009 Second Round 
Export Quota Bidding Announcement , Articles III.3, III.5, III.6 (Exhibits JE-91, CHN-310). 
1019 European Union's second written submission, para. 146. 
1020 European Union's second written submission, para. 147. 
1021 In this respect, the European Union requests China to provide a "list with the foreign enterprises 
that have been allocated a raw material export quota, before the initiation of the current dispute settlement 
proceedings".  European Union's second written submission, para. 148.  WT/DS394/R 
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  both Chinese and foreign enterprises that did not export in prior years would appear to be treated the 
same.   
7.677  Accordingly, the Panel concludes that China' s prior export performance requirement imposed 
on coke pursuant to the 2009 Coke Export Quota Application Procedure
1022, 2009 Second Batch Coke 
Export Quota 1023 2009 First Batch Coke Export Quotas for FIEs  1024, and 2009 Second Batch Coke 
Export Quotas for FIEs  1025 is not necessarily discriminatory and t hus not inconsistent with paragraph 
5.2 of China's Accession Protocol and Paragraphs 84( a) and 84(b) of China's Working Party Report.   
Similarly, the Panel concludes that China's prior export performance requirement imposed on bauxite, 
fluorspar and silicon carbide pursuant to the Export Quota Bidding Measures  1026, Export Quota 
Bidding Implementation Rules1027, 2009 First Round Export Quota Bidding Announcement1028, and 
2009 Second Round Export Quota Bidding Announcement  1029 is not necessarily discriminatory and 
thus is not inconsistent with pa ragraph 5.2 of China's Accession Pr otocol and Paragraphs 84(a) and 
84(b) of China's Working Party Report. 
(d) Summary 
7.678  The Panel concluded above that China's prio r export performance and minimum registered 
capital requirements are inconsistent with Paragraphs  1.2 and 5.1 of China's Accession Protocol, read 
in combination with Paragraphs 83(a), 83(b) and 83 (d); and Paragraphs 84(a)  and 84(b) of China's 
Working Party Report.  The Panel concluded, however, that China's prior export performance 
requirement is not inconsistent w ith paragraph 5.2 of China's Accessi on Protocol, read in combination 
with Paragraphs 84(a) and 84(b) of China's Working Party Report. 
2. Whether China's administration of its expo rt quotas allocated directly through the 
assessment of quota applicants' operation/bus iness management capacity is inconsistent 
with Article X:3(a) of the GATT 1994  
7.679  According to the European Uni on, China's authorities have the power to refuse the grant of 
export quotas to enterprises which, in the Ch inese authorities' view, do not possess "business 
management capacity".  There is no definition of "business management capacity" in Chinese legislation.  The European Union submits that th is condition is vague and opaque and allows China's 
authorities discretion on whether to accept or refuse a pplications for export quotas.  The European 
Union considers that this allows China to admini ster its export quota allocation system in a manner 
that is non-uniform, partial and unreasonable a nd hence inconsistent with Article X:3(a). 
7.680  China states that the condition is properly translated as the "operation capacity" of the 
applicant and refers to the operational ability of the applicant to carry out the mechanics of an export 
transaction.  There is nothing non-uniform, partial,  or unreasonable about considering, among other 
objective factors, an applicant's ability  to execute exports before alloca ting it part of the quota.  Such a 
criterion ensures quota fill and avoids wasting the quota on applicants who cannot manage to export 
it.   
                                                      
1022 Articles I(1)2 and I(2)2 (Exhibits JE-85, CHN-308). 
1023 Exhibits JE-81, CHN-338 p. 1. 
1024 Exhibit JE-82 
1025 Exhibit JE-83. 
1026 Articles 12, 13 (Exhibits JE-77, CHN-304) 
1027 Articles 15-18 (Exhibits JE-78, CHN-305). 
1028 Articles III(II)iii, III(II)v, III(I I)vi (Exhibits JE-90, CHN-309) 
1029 Articles III.3, III.5, III.6 (Exhibits JE-91, CHN-310). WT/DS394/R 
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  7.681  China further submits that the European Union has failed to provide any evidence 
demonstrating that either the alleged absence of a definition of "operation capacity" or the criterion 
itself inherently leads to administration that is cont rary to Article X:3(a).  Asserting that a Member 
might take action that could potentially be WTO-in consistent, depending on the specific but as-yet-
unknown character of that action, is not sufficient to establish a violation. According to China, the 
Appellate Body in EC – Selected Customs Matters requires that a complainant challenging a measure 
under Article X:3(a) must demonstrate that the particular criterion will, if applied, " necessarily  lead 
to" WTO-inconsistent administration.  
7.682  In support of its position, the European  Union refers to the panel report on Argentina – Hides 
and Leather .  This panel found that what is required under Ar ticle X:3(a) is a showing that there is an 
inherent possibility, or an inherent danger that a certain prejudice to the interests of some category of traders, could result from the challenged measures.   The European Union also asserts that the 
Appellate Body in EC – Selected Customs Matters  does not require a complainant challenging a 
measure under Article X:3(a) to show that the elem ents of the defending party's "administration of 
laws" and regulations must " necessarily  lead to" an administration which is non-uniform, partial or 
unreasonable, in order to establish a violation of Article X:3(a). 
(a) The requirements of Article X:3(a) 
7.683  The Panel will first explain its interpretation of the terms of Ar ticle X:3(a) taking into account 
the relevant jurisprudence. 
7.684  Article X:3(a) states: 
"Each contracting party shall administer  in a uniform, impartial and reasonable 
manner all its laws, regulations, decisions  and rulings of the kind described in 
paragraph 1 of this Article."
1030 
7.685  The Appellate Body has stated that Article X:3 establishes certain minimum standards for 
transparency and procedural fairness in the administration of trade regulations.1031  The panel in 
Argentina – Hides and Leather noted that the obligations of uniformity, impartiality and 
reasonableness are legally independent and WTO Me mbers are obliged to comply with all three 
requirements.1032  We agree.  Consequently, should we find a violation of any of the three obligations, 
this would constitute a violation of th e obligations under Article X:3(a).  
7.686  The Panel will first consider the meaning of the term "administer" in the phrase "administer in 
a uniform, impartial and reasonable manner".  It is  important to define the scope of the term 
"administer" as this word is related to the t ype of claim that a complainant can bring under 
Article X:3(a) (for example whether a complainant ca n bring an "as applied" challenge concerning the 
application of laws, regulations, decisions and ruli ngs in a particular case). Interpreting the meaning 
of the term "administer" also clarifies whether, for example, a challenge can be made in respect of the 
system of administration itself or whether a challe nge can be made in respect of the substance of 
measures (an "as such"  challenge). 
                                                      
1030 Article X:1 states: "Laws, regulations, judicial decisions and administrative rulings of general 
application, made effective by any contr acting party, pertaining to the classification or the valuation of products 
for customs purposes, or to rates of duty, taxes or other charges, or to requirements, restrictions or prohibitions 
on imports or exports ..." 
1031 Appellate Body Report, US – Shrimp , para. 83. 
1032 Panel Report, Argentina – Hides and Leather , para. 11.86.  WT/DS394/R 
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  (i) The meaning of "administer" in Article X:3(a) 
7.687  Panels and the Appellate Body have establishe d that the obligations under Article X:3(a) 
apply to the administration  of the laws, regulations, decisions and rulings of the kind falling within the 
scope of Article X:1, but not to the substa ntive content of those laws and regulations.
1033   
7.688  Subsequently, in EC – Selected Customs Matters , the Appellate Body clarified that a 
government's act of administration that is subject to  the provisions of Article X:3(a) includes not only 
acts of administering the laws and regulations of the kind in Article X:1, but also legal instruments that regulate the application or implem entation of such laws and regulations.
1034  This confirms the 
earlier finding of the panel in Argentina – Hides and Leather  that "the relevant question [in 
challenging a measure under Article X] is whet her the substance of such a measure is administrative 
in nature or, instead, involves substantive issues more pr operly dealt with under other provisions of 
the GATT 1994".1035 
7.689  In EC – Selected Customs Matters , the Appellate Body agreed with  the panel in that case that 
"'administer' may include administrative processes", and that an administrative process could be 
viewed as "a series of steps, actions, or events that  are taken or occur in relation to the making of an 
administrative decision."  The Appellate Body c oncluded that as the term "administer" in 
Article X:3(a) refers to "putting into practical ef fect" or "applying" a legal instrument of the kind 
described in Article X:1, it is the application of a legal instrument of the kind described in Article X:1 
that is required to be uniform under Article X:3(a), but not the process leading to administrative 
decisions, or the tools that might be used in the exercise of administration." Notwithstanding the 
foregoing, the Appellate Body stated that the "feat ures of an administrative process" may nonetheless 
be relevant in the assessment of whether the legal in strument at issue has been uniformly applied or 
put into practical effect in a particular case. 1036    
7.690  In the light of this, the Panel considers that th e same can be said for an administrative process 
that consists of one step or one action or one event in relation to the taking of an administrative 
decision.  In other words, an administrativ e "process" is not necessarily confined to a series  of steps, 
actions or events.  We find support for this view in the dictionary definition of the word "process": 
"process, n:  gen.  The action or fact of going on or being carried on ... a course of action, a 
procedure".1037   
7.691  The Panel now turns to consider the meani ng of the terms "uniform", "impartial" and 
"reasonable" as they appear in Article X:3(a). 
                                                      
1033 Appellate Body Reports on EC – Bananas III , para. 200;  EC – Poultry , para. 115.   
1034 Appellate Body Report, EC – Selected Customs Matters , para. 200.  The Appellate Body states, 
"[u]nder Article X:3(a), a distinction must be made between the legal instrument being administered  and the 
legal instrument that regulates  the application or implementation of that instrument.  While the substantive 
content of the legal instrument being administered is not challengeable under Article X:3(a), we see no reason 
why a legal instrument that regulates the application or implementation of that instrument cannot be examined 
under Article X:3(a) if it is alleged to lead to a lack of  uniform, impartial, or reasonable administration of that 
legal instrument". 
1035 Panel Report, Argentina – Hides and Leather , para. 11.70 (emphasis added). 
1036 Appellate Body Report, EC – Selected Customs Matters , para. 224-225. 
1037 (Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 2354. WT/DS394/R 
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  (ii) The meaning of "uniform", "impartial" and "reasonable" 
7.692  In the context of defining the uniformity criterion, the panel in Argentina – Hides and Leather 
held that uniform treatment means that "every exporte r should be able to expect treatment of the same 
kind, in the same manner, both over time and in di fferent places and with respect to other persons… 
Uniform administration requires that Members ensure  that their laws are applied consistently and 
predictably".1038  
7.693  The Panel notes that, read in the context of Article X:3(a), the word "uniform" means "[o]f 
one unchanging form, character, or kind; that is or stays the same in different places or circumstances, 
or at different times ... of the same form, character or kind as another or others; conforming to one 
standard, rule or pattern; alike similar."1039  Applying this definition and the Hides and Leather 
approach to the facts at hand, exporter applicants shou ld be able to expect treatment of the same kind, 
in the same manner, both over time and in different places in terms of how the operation capacity criterion is applied.  
7.694  As concerns the impartiality requirement, read in the context of Article X:3(a), the word 
"impartial", means "not partial;  not favouring one  party or side more than another; unprejudiced, 
unbiased, fair".1040  Consequently, impartial  administration would appear to  mean the application or 
implementation of the relevant la ws and regulations in a fair, unbiased and unprejudiced manner.   
7.695  The impartiality requirement was also considered in Argentina – Hides and Leather.  The 
issue in dispute concerned the presence of a private party with conflicting commercial interests in the 
customs process.  The panel in that case considered that the requirement of impartial administration 
was not merely a matter of the presence of a private party with conflicting commercial interests;  rather, it was of the view that the consistency of the customs process with the impartiality requirement 
of Article X:3(a) would depend on what that private party is permitted to do.
1041  That panel found that 
the answer to this question was related directly to  the question of access to information as part of the 
product classification process.  The panel held that  whenever a party with a contrary commercial 
interest, but no relevant legal inter est, is allowed to participate in the customs process, there is an 
inherent danger that the customs laws, regulations and rules will be applied in a partial manner so as 
to permit persons with adverse commercial interests to obtain confidential information to which they 
have no right.1042  The panel nevertheless considered that th is situation could be remedied by adequate 
safeguards to prevent an inappropriate flow of one private person's confidential information to another 
as a result of the administration of th e implemented customs law at issue.1043 
7.696  The Panel considers that, read in the context of  Article X:3(a), the ordinary meaning of the 
word " reasonable ", can be defined as "not irrational or absurd", "proportionate", "sensible", and 
"within the limits of reason, not greatly less or more than might be thought likely or appropriate".1044 
Applying this definition to the facts, reasonabl e administration could be considered to be 
administration that is equitable, appropriate for the circumstances and based on rationality.  
                                                      
1038 Panel Report, Argentina – Hides and Leather , para. 11.83. 
1039 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 3444 (2002). 
1040 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 1, p. 1325. 
1041 Panel Report, Argentina – Hides and Leather , para. 11.99. 
1042 Panel Report, Argentina – Hides and Leather , para. 11.100. 
1043 Panel Report, Argentina – Hides and Leather , para. 11.101. 
1044 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 2482 (2002).  WT/DS394/R 
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  7.697  The Panel will proceed with its analysis of Article X:3(a) bearing in mind these definitions of 
the terms "uniform", "impartial" and "reasonable".   
(b) The meaning of Article X:3(a) 
7.698  The appropriate legal meaning that the Panel s hould ascribe to Article X:3(a) in the light of 
the relevant jurisprudence has been the subject of extensive discussion between the parties, in 
particular between China and the European Union.  The parties referred in particular to two dispute 
settlement reports in their submissions:  the panel report in Argentina – Hides and Leather  (which was 
not appealed) and the Appellate Body Report in EC – Selected Customs Matters . 
7.699  In Argentina – Hides and Leather , the panel concluded with re spect to the requirement of 
reasonable administration that "a process aimed at assuring the proper classification of products, but 
which inherently contains the possibility of re vealing confidential busin ess information, is .. 
unreasonable" and therefore incons istent with Article X.3(a).
1045 As stated at paragraph 7.695 above, 
the same panel held with regard to the impartiality  requirement that the involvement of parties with 
contrary commercial interests – in that case con cerning an export transaction – meant that there was 
an "inherent danger that the Customs laws, regulations  and rules will be applied in a partial manner so 
as to permit persons with adverse commercial inter ests to obtain confidential information to which 
they have no right".1046 
7.700  In EC – Selected Customs Matters , the Appellate Body found that the features of an 
administrative process may be relevant in the asse ssment of whether a legal instrument has been 
applied uniformly, but that a complainant "will have  to show how and why those features necessarily 
lead to a lack of uniform, impartial, or reasonable administration of a legal instrument of the kind described in Article X:1."
1047  The Appellate Body also cautioned that a simple recitation of the 
characteristics of an administrative pro cess would not suffice to sustain a claim. 1048 
7.701  Although the parties seem to consider that the two reports present differing approaches 
because one speaks of an "inherent danger" while th e other suggests a more definite requirement of 
"necessarily leads to", the Panel consider s that the approach of the panel in Argentina – Hides and 
Leather  and that of the Appellate Body in EC – Selected Customs Matters  are similar. One of the 
dictionary definitions of inherently  states "inherently: (adv) In an inherent manner; by inherence; in 
the way of, or in relation to, an inherent quality or attribute; intrinsically."  The definition of 
necessarily  in relevant part is as follows: "necessarily: Of necessity; in the nature of the case; 
intrinsically, inherently, inevitably."1049 As can be seen from these defi nitions, the difference in these 
two words is not significant; there is a certain cross- over between them, with one of the definitions of 
"necessarily" being "inherently".   
7.702  The Panel now turns to consider the issue of wh ether the challenged administration must lead 
to a particular result in order for a violation of one of the requirements of Article X:3(a) to be 
established. In Argentina – Hides and Leather, the challenged administration did not necessarily  
amount to a violation of Article X:3(a).1050  In that dispute the measure at issue provided that 
representatives of a private party could  be present at customs clearance, but this was not mandatory.  
Accordingly, the measure fell short of necessarily  leading to a violation of Article X:3(a).  The panel 
                                                      
1045 Panel Report, Argentina – Hides and Leather , para. 11.94. 
1046 Panel Report, Argentina – Hides and Leather , para. 11.100. 
1047 Appellate Body Report, EC – Selected Customs Matters , para. 226.   
1048 Appellate Body Report, EC – Selected Customs Matters , para. 225. 
1049 Oxford English Dictionary, accessed online, 23 December 2010. 
1050 China's response to Panel question No. 50, following the second substantive meeting, para. 301. WT/DS394/R 
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  considered that the existence of the right to be present along with certain corollary factors resulted in 
the inherent possibility , or an inherent danger , of administration inconsistent with Article X:3(a).   
7.703  The panel's finding in Argentina – Hides and Leather does not suggest that the complaining 
party must show that the disputed administration would certainly  cause prejudice to the complaining 
party. The Panel used the words "possibility" and "danger", which convey the notion that there is less 
than absolute certainty of a particular event occurring.   
7.704  The Panel also recalls the following statement of the panel in  Argentina – Hides and Leather : 
"Article X:3(a) requires an examination of the real effect that a measure might  have 
on traders operating in the commercial world.  This, of course, does not require a 
showing of trade damage, as that is generally not a requirement with respect to violations of the GATT 1994.  But it can invol ve an examination of whether there is a 
possible  impact on the competitive situ ation due to alleged partiality, 
unreasonableness or lack of uniformity in  the application of customs rules, 
regulations, decisions, etc. "
1051 (emphasis added) 
7.705  As noted above at paragraph 7.689 above, the Appellate Body found in EC – Selected 
Customs Matters  that the features or characteristics of  an administrative process may constitute 
evidence of inconsistent administration and opined that: 
"[W]e could conceive of cases where a panel might attach much weight to differences 
that exist at the level of the administ rative processes, because it considers these 
differences to be so significant that they have caused, or are likely  to cause, the non-
uniform application of the legal instrument at issue."1052 (emphasis added)   
7.706  The Appellate Body concluded in the paragraph th at followed that in order to substantiate a 
claim of violation based on an administrative process , "a complainant will also have to show how and 
why the features of an administrative process necessar ily lead to a lack of uniform, impartial or 
reasonable administration of a legal instrument of the kind described in Article X:1".1053   
7.707  This Panel agrees with the panel in Thailand – Cigarettes (Philippines) that while the 
Appellate Body's analysis regarding the features of an administrative process was made in the context 
of the uniformity requirement, the subsequent conc luding statement about what must be proved to 
substantiate a violation in respect of Article X: 3(a) more generally by the Appellate Body in 
paragraph 226 tends to support the vi ew that its analysis would also be applicable to the obligations of 
reasonableness and impartiality.1054   
7.708  In this light, the Panel conclud es that, in respect of a challenge  to an administrative process, 
the complaining party must show that the iden tified features of the challenged administration 
necessarily lead to an inconsistency with Article X:3( a) with respect to the administration of laws and 
regulations in a uniform, impartia l and reasonable manner. As we see it, if the complaining party 
shows that the features of an administrative process pose a very real risk  to the interests of the 
relevant parties, then it will have  met this burden.  In this context, we agree with the panel in EC – 
Selected Customs Matters  when it stated that the aim of Article X:3(a) is to ensure that traders are 
treated fairly and consistently when seeking to import from or export to a particular WTO 
                                                      
1051 Panel Report, Argentina – Hides and Leather , para. 11.77. 
1052 Appellate Body Report, EC – Selected Customs Matters , para. 225. 
1053 Appellate Body Report, EC – Selected Customs Matters , para. 226. 
1054 Panel Report, Thailand – Cigarettes (Philippines) , para. 7.872.  WT/DS394/R 
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  Member.
1055  The Panel considers that an interpretation of Article X:3(a) that requires a complainant 
to show that the features of the administrative pro cess pose a very real risk of non-uniform, partial and 
unreasonable administration best accords with the due process connotations of Article X.  
(c) The nature of the European Union's challenge 
7.709  The Panel concludes based on the submissions and responses to questions that the European 
Union is challenging as such  China's administration of its quota a llocation rules.  As for the specific 
type of as such challenge, the European Union states that it is challenging "the administration of the 
system and not the specific provisions of a legislative instrument."1056 Furthermore, in response to a 
question from the Panel, the European Union states  that it is not challenging the operation capacity 
criterion itself but its administration.1057   The Panel understands the European Union to be 
challenging the features of an administrative process th at govern the application of a legal instrument 
of the kind described in Article X:1.1058 Specifically, the European Union challenges how the 
operation capacity criterion is administered  by the Local Departments in charge of Foreign Trade. The 
European Union is claiming that China's aut horities' administration of this criterion will, as such , lead 
to inconsistency with Article X:3(a). 
7.710  The Panel observes that the European Union did not define precisely the nature of its claim 
under Article X:3(a).  More specific reference to  the language used by the Appellate Body in EC – 
Selected Customs Matters  would have been helpful in unders tanding the precise nature of the 
European Union's challenge.  The Panel also notes that from its first submission, China queried the 
nature of the European Uni on's claim in this regard.1059   
7.711  However, notwithstanding this lack of clarity on  the part of the European Union, the Panel 
does not consider that China's ability to defend itsel f was in any way affected or prejudiced by the 
European Union's lack of specificity.  In this resp ect, the Panel notes that China has in the course of 
its submissions referred to the administration  of the operation capacity criterion.  For example, China 
asserts: 
"The European Union has provided no evidence demonstrating that the 'operation 
capacity' criterion for participation in direct quota allocation has been administered in 
a WTO-inconsistent manner, or that it will 'necessarily lead to' WTO-inconsistent administration.  At most, the European Union has asserted that, if applied, the 
                                                      
1055 Panel Report, EC – Selected Customs Matters , para. 7.108. 
1056 European Union's second written submission, para. 162. 
1057 European Union's response to Panel question No. 46 following the second substantive meeting 
para 51. 
1058 The European Union has not directly referred to its challenge being in respect of an administrative 
process.  However the Panel has concluded that this is the nature of the European Union's challenge, given the 
arguments the European Union advanced in these proceedings as well as the fact that the European Union itself 
asserted that it was not challenging  the operation capacity criterion per se . 
1059 The European Union at times seems to have merg ed two of the available ways that inconsistent 
administration can be challenged under Article X:3(a).  In its opening oral statement at the second substantive 
meeting, the European Union asserts that "China has confused the Appellate Body's treatment of 'administrative 
processes' (i.e. the procedural structure) with the Appellate Body's treatment of a country's 'administration of 
laws and regulations' (i.e. the application of the laws an d regulations)."  In this statement, the European Union 
correctly draws a distinction between these two types of challenge. However, later in the same statement the 
European Union asserts that it "challenges China's 'administration'  of its export quota allocation system and 
export licensing system, i.e., the application  by China of the relevant laws and regulations". In this statement the 
European Union appears to co nflate an "as such" claim w ith an "as applied" claim.   However, the European 
Union provided no evidence on the WTO-inconsistent application  by China of the operation capacity criterion. WT/DS394/R 
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  'operation capacity' criterion might  be administered in a manner inconsistent with 
Article X:3(a)."1060  
7.712  Having established the type of Article X:3(a) challenge made by the European Union as well 
as what the complaining party must show to succeed in its claim, the Panel now turns to analyse the 
specific claim made by the European Union. 
(d) Whether the operation capacity criterion app lies to any of the products at issue 
7.713  The European Union argues that China administers the quotas allocated directly for coke and 
zinc1061 in a non-uniform, partial, and unreasonable way because the relevant Chinese authorities 
allocate export quotas based on the applicant' s alleged "business management capacity". 
7.714  China submits that the European Union's clai m is moot as the operation capacity requirement 
is not applied to any of the export quotas on the products at issue in these disputes.1062  China asserts 
that by virtue of Article 4(3) and the Appendix to the Export Quota Administration Measures , the 
direct allocation of the coke quota is not subject to these rules. Although China agrees that the quota 
for zinc is subject to direct allocation, it states th at this quota has not been authorized in 2010.  
Consequently, according to China, Article 19 of the Export Quota Administration Measures  does not 
apply.   
7.715  The European Union notes first that the underlying legislation on which China's 
administration is based, namely, the Export Quota Administration Measures , is still in place.  Second, 
it is very likely that China will again allocate export quotas for zinc, as it has done up to 2005 using 
the same criteria.  The European  Union also states that the list of raw materials for which export 
quotas are allocated directly has not been permanentl y defined. In that context, the European Union 
puts forward a scenario whereby,  in the event that China's bidding system were found to be 
incompatible with the covered agreements, Ch ina could move raw materials from the category 
allocated through bidding to the category allocated by  direct allocation.  In such a case, says the 
European Union, the only way to achieve a positive so lution to the dispute is for the Panel to make 
findings on whether China's administration of the sy stem for the direct allocation of export quotas is 
consistent with the covered agreements. 
7.716  In this context, China has in place a series of  measures operating collectively that govern the 
administration of export quotas. The Foreign Trade Law  confers the authority to restrict or prohibit 
the exportation of goods through export quotas1063 and subjects those goods to an export quota 
                                                      
1060 China's response to Panel question No. 50 following the second substantive meeting, para. 303. 
(Italics original, underlining added.).  The Panel also notes that in its closing oral statement at the second 
substantive meeting, China stated: "The European Union's Article X:3(a) claims against the 'operation capacity' 
criterion in the context of quota admini stration, ... are of necessity [an] example[ ] of the second type of 
challenge – for the simple reason that the European Union has offered no evidence concerning any instances in 
which the 'operation capacity' criterion ... ha[a] been ap plied." Finally, in its first written submission, China 
referred to the possibility of the Panel considering that the European Union's claim involved a claim against an 
administrative process; see China's first written submission, paras. 649-651 and 661. 
1061 The specific forms of the raw materials subject to the European Union's clai ms are identified by the 
complainants in Exhibit JE-6.  The particular form of zinc concerned by the complainant's claims under 
Article X:1 and X:3(a) is zinc ores and concentrates. 
1062 China's second written submission, para. 413. 
1063 Foreign Trade Law , Articles 2, 14, 16-17, 19 (Exhibits CHN-151, JE-72); Regulation on Import 
and Export Administration , Article 4 (Exhibit s CHN-152, JE-73).  WT/DS394/R 
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  administration.
1064 The Regulation on Import and Export Administration regulates the administration 
of the export of goods.1065 The Export Quota Administration Measures  are formulated in accordance 
with1066 the relevant provisions in these two measures. 
7.717  As noted earlier, China maintains two systems for the administration of its export quotas:  
direct allocation or through a quota bidding system.1067  The export quotas on coke and zinc are 
allocated "directly".1068  The export quotas on bauxite, fluorsp ar, and silicon carbide are allocated 
through a bidding system.1069  
7.718  The Export Quota Administration Measures  govern the direct allocation of quotas.  Article 19 
of these measures is the source of the "operation capacity" criterion.1070 This provision states: 
"When allocating the quotas, the MOFTEC a nd the Local Departments in charge of 
Foreign Trade shall take into full cons ideration the export performance, the quota 
utilization rate, the operation capacity, the production scale and the resources status, 
etc. of that commodity in relation to the applying enterprises or the applying regions 
in the past three (3) years." 
7.719  The first issue for the Panel to determine is  whether, as China alleges, the "operation 
capacity" requirement is not applied to any of  the export quotas on products at issue in these 
disputes.1071  While acknowledging that the quota for zinc is subject to direct allocation, China states 
that this quota has not been authorized in 2010.  The Panel notes first that the European Union has 
accepted that the direct allocation of coke is not subject to Article 19 of the Export Quota 
Administration Measures .1072  The Panel also notes that the quot a for zinc has not been authorized 
since 2006.  However, pursuant to Article I(i) of the 2009 Export Licensing Catalogue   (the measure 
that was in force at the time of the Panel's estab lishment on 21 December 2009) , exports of zinc are 
subject to a quota allocated directly.1073  The Panel also notes that pursuant to the same provision in 
the 2010 List, zinc is also subject to a quota allocated directly.1074   
7.720  The Panel disagrees with China that the allo cation of the zinc quota and the manner of its 
administration as provided in Article 19 of the Export Quota Administration Measures  is moot.  The 
2009 (and 2010) List clearly lists zinc as one of th e products for which an export licence is required.  
This fact suggests that China permits exports of zinc  in principle.  In addition, China has not given 
                                                      
1064 Regulation on Import and Export Administration , Article 36 (Exhibits CHN-152, JE-73); Export 
Quota Administration Measures , Article 1 (Exhibits CHN-312, JE-76). 
1065 Regulation on Import and Export Administration , Article 1. 
1066 Export Quota Administration Measures , Article 1, (Exhibit CHN-312, JE-76). 
1067 Regulation on Import and Export Administration , Article 39  (Exhibit JE-73, CHN-152). 
1068 2009 Export Licensing Catalogue, Article I(1) (E xhibit CHN-6, JE-22), see also Section VII.C.2(b) 
above. 
1069 Ibid., Article I(2), see also VII.C.2(a) above. 
1070 The European Union referred in its first written su bmission to 'business management capacity'.  In 
its first written submission, China asserted that a corr ect translation of this te rm was "operation capacity".1070  
Thereafter, in these proceedings, the European Union' s referred to the "operation capacity" criterion.  
Consequently, in its analysis, the Panel will also refer to the "operation  capacity" criterion.  The Panel wishes to 
make clear that its examination of the administration of this criterion would be the same irrespective of whether 
the term is translated as "business management" or "ope ration capacity".  This is because the Panel considers 
that the matter does not turn on the exact translation of the provision but rather on other issues raised by the 
European Union relevant to the administration of the criterion. 
1071 China's second written submission, para. 413. 
1072 European Union's second written submission, para. 150. 
1073 2009 Export Licensing Catalogue   (Exhibits CHN-6, JE-22). 
1074 2010 Export Licensing Catalogue  (CHN-7). WT/DS394/R 
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  any indication in the course of these proceedings that Article 19 will be administered in a manner 
different from how it is being administered now.  Consequently, the Panel agrees with the European 
Union that to secure a positive solu tion to the dispute, the Panel should make findings on whether 
Article 19 of the Export Quota Administration Measures  is consistent with Article X:3(a). 
7.721  The Panel concludes that, by virtue of the pl ain language of Article 19 set out above, the 
operation capacity criterion applies to the direct  allocation of the export quota for zinc.   
(i) Non-uniform, partial and unreasonable administra tion of the operation capacity criterion 
7.722  The Panel understands the basis of the Eur opean Union's claim to be that, given the 
"operation capacity" criterion set out in Article 19 of its Export Quota Administration Measures , 
China administers the system of direct allocation of  export quotas in a manner that is not consistent 
with Article X:3(a).
1075 Specifically, the European Union claims  that because the administration of 
China's export quota "direct" allocation system incl udes a vague and opaque eligibility criterion, it is 
non-uniform, partial, and unreasonable and is, th erefore, inconsistent with Article X:3(a).1076  
7.723  The European Union makes three claims in re lation to the operation capacity criterion. With 
regard to the requirement of uniformity, the Eu ropean Union asserts that no uniform rules exist 
(i) defining the notion of operation capacity;  (ii) setting the standard against which the operation 
capacity of a particular applicant should be compar ed;  or (iii) ensuring that this requirement is 
applied consistently in the same manner toward s all applicants, all raw materials, all export 
destinations and all periods of time.1077   
7.724  In relation to the requirement of impartia lity, the European Union argues that China 
administers the direct allocation of quotas in a manner that is partial due to a lack of safeguards 
preventing China's authorities from using this opera tion capacity criterion to administer the export 
quota allocation system to the disadvantage of certai n applicants, or export destinations, and to the 
advantage of others.1078   
7.725  The European Union argues with respect to the requirement of reasonable administration that 
it is not reasonable to impose a requirement that "a llows China's authorities to administer the export 
quota allocation system in an arbitrary, discretionary and potentially discriminatory manner".1079 
7.726  China defends the operation capacity criterion by  explaining that an applicant's "operation 
capacity" is its capacity to undertake commodity exports,  or in other words, it refers to the operational 
ability of the applicant to carry out the mechanics of  an export transaction.  According to China, there 
is nothing non-uniform, partial, or unreasonable a bout considering, among other objective factors, an 
applicant's ability to execute exports before allocating to it part of the quota.1080   
7.727  According to China, if a Member adopts a me asure that its authorities can administer in a 
WTO-consistent manner, a panel cannot simply assume that the Member's authorities will administer the measure in a WTO-inconsistent manner.  Thus, a measure does not violate Article X:3(a) simply 
because an authority has the discretion to interpret and/or apply the measure in a manner that might 
violate Article X:3(a).  China asserts that the me re possibility (or danger) that the measure might be 
                                                      
1075 Export Quota Administration Measures  (Exhibits CHN-312, JE-76). 
1076 European Union's first written submission, paras. 238 to 245. 
1077 European Union's first written submission, para. 242. 
1078 European Union's first written submission, para. 243. 
1079 European Union's first written submission, para. 244. 
1080 China's first written submission, para. 643; China' s opening oral statement at the second substantive 
meeting, para. 327.  WT/DS394/R 
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  administered in a manner that violates Article X:3( a) provides an insufficien t evidentiary basis to 
conclude that the content of the ad ministrative norm is WTO-inconsistent.
1081  China also asserts that 
it  "should be deemed to have acted in good faith  in the performance" of its obligations under 
Article X:3(a).1082 
7.728  China refers to the statement of the Appellate Body that a claim under Article X:3(a) "must be 
supported by solid evidence", which "should reflect th e gravity of the accusations inherent in [the] 
claims".1083 China submits that a claim of inconsiste nt administration requires solid evidence of 
inconsistent administration, or in the least, a showing that an element of the administration is 
inherently  inconsistent or necessarily  leads to inconsistent administration.1084   
7.729  China also asserts that th e European Union's focus on one of a series of criteria in Article 19 
used to determine whether to allo cate part of the quota to an enterprise is overly simplistic and does 
not offer a picture of China's overall administration of the eligibility criteria.1085   
7.730  To recall, Article X:3(a) states:  
"Each [Member] shall administer in a uni form, impartial and reasonable manner all 
its laws, regulations, decisions and rulings of the kind describ ed in paragraph 1 of this 
Article." 
7.731  The "laws, regulations, decisions and rulings" d escribed in paragraph 1 of Article X are as 
follows:  
"Laws, regulations, judicial decisions and administrative rulings of general 
application, made effective by any [Member], pertaining to the classification or the 
valuation of products for customs purposes, or to rates of duty, taxes or other charges, 
or to requirements, restricti ons or prohibitions on imports or  exports or on the transfer 
of payments therefor, or affecting their sale, distribution, transportation, insurance, warehousing inspection, exhibition, processing, mixing or other use." 
7.732  In order to rule on the European Union's claim under Article X:3(a), the Panel must 
determine:  (a) whether the operation capacity criterion in Article 19 of the Export Quota 
Administration Measures  falls within the "laws, regulations , decisions and rulings of general 
application" of the kind described in Article X:1 of  the GATT; and, if so, (b) whether China has not 
administered this provision in a unifo rm, impartial and reasonable manner. 
7.733  With reference to the term "general applicati on", as it appears in Article X:1, the panel in EC 
– Selected Customs Matters  found that:  
                                                      
1081 China's response to Panel question No. 50, following the second substantive meeting, para. 297. 
1082 China's first written submission, para. 663, referring to Panel Report, Canada – Continued 
Suspension (Hormones) , para. 7.317;  see  also  Appellate Body Report, US – Oil Country Tubular Goods Sunset 
Reviews , para. 173;  Appellate Body Report, US – Shrimp , para. 158;  Appellate Body Report, US – Section 211 
Appropriations Act , para. 259;  Appellate Body Report, EC – Sardines,  para. 278;  Appellate Body Report, US – 
Offset Act (B yrd Amendment) , paras. 298 and 299. 
1083 China's first written submission, para. 663, referring to  Appellate Body Report, US – OCTG Sunset 
Reviews , para. 217. 
1084 China's first written submission, paras. 650-652,  657, 658, 661-662, and 663; China's second 
written submission, paras. 417-419, 424-427; China's opening  oral statement at the second substantive meeting, 
para. 332 and China's response to Panel question No. 50 following the second substantive meeting, paras. 302-
304. 
1085 China's first written submission, para. 646. WT/DS394/R 
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  "'[L]aws, regulations, judicial decisions and administrative rulings of general 
application' described in Article X:1 of the GA TT 1994 are laws, regulations, judicial 
decisions and administrative rulings that appl y to a range of situations or cases, rather 
than being limited in their scope of application."
1086 
7.734  In US – Underwear , the Appellate Body upheld the Panel's interpretation that an 
administrative order was of "general application"  "to the extent that the restraint affects an 
unidentified number of economic operators, including domestic and foreign producers."1087 
7.735  Turning to the present case, Article 1 of the Export Quota Administration Measures  states that 
the measures regulate the administration of expo rt commodity quotas and that they have been 
formulated in accord ance with China's Foreign Trade Law  and China's Regulation on Import and 
Export Administration .  Furthermore, the Foreign Trade Law  delegates MOFCOM as the government 
agency responsible for the administration of China's export quotas.1088  Article 3 of the Export Quota 
Administration Measures  states that MOFTEC (currently MOFCOM) shall apply export quota 
administration to certain commodities subject to ex port restrictions, these commodities include zinc.  
Article 5 of the Measures provides that the measure s apply "to the export of commodities subject to 
quota administration under all modes of trade." 
7.736  The Panel concludes that the Export Quota Administration Measures  including Article 19 fall 
within the scope of  Article X:1.  These measures are (a) laws or regulations, (b) of general application 
(c) made effective by China, and, (d) pertain to requirements on exports.  
7.737  Article 19 of the Export Quota Administration Measures  (quoted at paragraph 7.718 above) 
governs the allocation of the zinc quota.  China has not denied that an applicant can be refused an 
allocation of the export quota for zinc solely on  the basis of the operation capacity criterion.  
Moreover, in its explanation of the "operation capac ity", China states that "i f an applicant does not 
have the operational ability to engage in export trade, which implicates sophisticated financing 
questions often not present in domestic trade, there is little point in allocating it part of the export 
quota".1089  As noted in paragraph 7.729 above, China cl aims that the European Union's focus on this 
one criterion is overly simplistic and observes that in EC – Selected Customs Matters , the Appellate 
Body criticised the panel in that case for havi ng examined the operation of institutions and 
mechanisms in isolation and for not having consider ed how they were involved in the administration 
of European Communities' customs law.  With that  in mind, the Panel will examine how the operation 
capacity criterion operates in China's overall administration of the eligibility criteria.  
7.738  China acknowledges that the inability of an app licant to comply with the operation capacity 
criterion can be a basis for that appli cant's failure to receive the zinc quota.1090  In other words, this 
criterion can trump all others. Therefore, this criteri on, in and of itself, can be determinative in the 
allocation of export quotas and therefore is of some  importance in China's system for the direct 
allocation of export quotas.  Also of note is that China has not denied that there is no official 
definition of the term "operation capacity" or th at there is no standard against which China's 
authorities will assess the operation capacity criterion. Certainly China has not chosen to proffer a 
definition; nor has it denied the lack of a sta ndard to assist the assessment of the criterion. 
                                                      
1086 Panel Report, EC- Selected Customs Matters , para. 7.116 (emphasis original). 
1087 Appellate Body Report, US - Underwear, p. 21, DSR 1997:I, 11, at p. 29, Panel Report,  US - 
Underwear, DSR 1997:I, 31, para. 7.65. 
1088 Foreign Trade Law , Article 18 (Exhibits CHN-151, JE-72). 
1089 China's first written submission, para. 643. 
1090 Ibid.  WT/DS394/R 
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  7.739  China claims that it is entitled to the presumption that it will fulfil its obligations in good 
faith.  We agree. Nonetheless, a WTO Member is free to challenge another Member's compliance with its WTO obligations without being taken to ca ll into question another Member's good faith.  This 
is reflected in Article 3.10 of the DSU which states that "the use of the dispute settlement procedures 
should not be intended or consider ed as contentious acts ...".  When a Member does raise a challenge, 
it bears the burden of proof.  Therefore, in this dispute, China's administration of Article 19 of the Export Quota Administration Measures  is presumed to be WTO consistent and the European Union 
bears the burden of proving that China is ac ting inconsistently with its obligations under 
Article X:3(a).
1091  
7.740  As a preliminary matter, the Panel notes that ordinarily it would address the requirements of 
"uniformity", "impartiality" and "reasonableness" in the order they appear in the text of the Article.  
However, as the Panel has already observed, the th ree requirements are legally independent in that 
China's laws regulations and rules must administered so as to satisfy each of the three standards.  In 
this case, the Panel considers that uniform admi nistration or otherwise of the operation capacity 
criterion flows from a consideration of whether this criterion is reasonably administered.  
Consequently, the Panel will examine first whet her China administers the quota for zinc in a 
reasonable manner.1092 
Reasonable administration 
7.741  As stated above1093, read in the context of Article X:3(a), the ordinary meaning of the word 
"reasonable", can be defined as "not irrational or ab surd", "proportionate", "sensible", and "within the 
limits of reason, not greatly less or more than might be thought likely or appropriate".1094 Applying 
this definition to the facts, reasonable administration of the operation capacity criterion by China's authorities could be considered to be administ ration that is equitable, appropriate for the 
circumstances and based on rationality. 
7.742  The issue here is whether in the absence of an y definition or standard, the operation capacity 
criterion will be implemented in a reasonabl e manner consistent with Article X:3(a). 
7.743  In response to a question from the Panel, China indicated that there are 32 Local Departments 
in charge of Foreign Trade.  According to Ar ticle 19, these 32 Local Departments administer the 
directly allocated zinc quota.  These Local De partments are not provided with any guidelines or 
standards to assist them in applying this operati on capacity criterion.  Thus each Local Department 
will necessarily have to interpret the operation capacity  criterion as it sees fit.  In the Panel's view, this 
manner of administration of a determinative criterion for receipt of the zinc quota does not meet the standard of reasonable administration of export quotas that are directly allocated.  It is not "fair", 
"equitable", "just", "legitimate" or "appropriate fo r the circumstances" that exporter applicants may 
well be subject to different interpretations of whet her or not they have sufficient operation capacity to 
qualify for the zinc quota depending on where they ar e located. The Panel believes there is a very real 
risk that in the absence of any definition or st andardization of an unders tanding of what "operation 
capacity" means that similar exporters in terms of size, experience, and other factors may be treated 
                                                      
1091 In US – Continued Suspension  (para. 380) the Appellate Body held that: "[t]he European 
Communities should be presumed to have acted in good faith when adopting the implementing measures;  
however, this did not mean that the taking of such measure in itself establishes that the measure achieves 
substantive compliance." 
1092 In this context, the Panel notes that the Panel in Argentina – Hides and Leather  also decided to 
examine the requirement of reasonableness befo re the other requirements, see para. 11.86. 
1093 See para. 7.696 above. 
1094 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 2482. WT/DS394/R 
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  differently depending on which of 32 dispersed local  office deals with their application.  Under such 
circumstances it could well be assumed that one expor ter could well find its a pplication rejected while 
another exporter of equal description would succeed. 
7.744  In the Panel's view, a system of quota allocation where an undefined and vaguely worded 
criterion can trump all other criteria, yet is to be applied by 32 different regional offices constitutes 
the type of evidence to which the Appellate Body in EC – Customs Matters was referring when it 
stated "the features of an administrative process that  govern the application of a legal instrument of 
the kind described in Article X:1 may constitute relevant evidence for establishing ... [unreasonable] 
administration of that legal instrument".
1095  In this case "the panel [has] attach[ed] much weight to 
differences that exist at the level of the ad ministrative processes, because it considers these 
differences to be so significant that they have caused, or are likely to cause, the [unreasonable] 
application" of Article 19 of the Export Quota Administration Measure .1096 
7.745  In sum, the Panel thus finds that the lack of any definition, guidelines or standards in how the 
32 Local Departments in charge of Foreign Trad e should apply the potentially critical operation 
capacity criterion constitutes relevant evidence in establishing unreasonable administration of the 
operation capacity criterion. Moreover, the Panel is  persuaded that the lack of any definition, 
guidelines or standards pose a very real risk that this criterion will be administered differently 
depending on which Local Departme nt handles the quota application. 
7.746  Consequently, the Panel concludes that the lack  of any definition, guidelines or standards to 
guide how the operation capacity crite rion should be applied poses a very real risk to the interests of 
relevant parties such that this necessarily leads to unreasonable administration inconsistently with 
Article X:3(a) of the GATT 1994. 
Uniform administration 
7.747  As noted above1097, read in the context of Article X:3(a), the ordinary meaning of the word 
"uniform" means "[o]f one unchanging form, character, or  kind; that is or stays the same in different 
places or circumstances, or at different times ... of the same form, character or kind as another or 
others; conforming to one standard, rule or pattern; alike similar."1098  Applying this definition to the 
facts at hand, exporter applicants should be able to  expect treatment of the same kind, in the same 
manner, both over time and in different places, in how the operation capacity criterion is applied to 
them.  This interpretation of uniform treatment  accords with that offered by the Panel in Argentina – 
Hides and Leather .1099 
7.748  The issue here is whether in the absence of an y definition or standard, the operation capacity 
criterion will be implemented in a uniform manner consistent with Article X:3(a). 
7.749  As discussed in paragraph 7.743 above, MOFC OM does not provide a definition, guidelines 
or standard to assist the 32 Local Departments in  charge of Foreign Trade to apply the operation 
capacity criterion.  Under these circumstances, it is likely that the criterion will be applied in many 
different ways across China.  It is clear that there is a very real risk that this criterion will not be 
                                                      
1095 Appellate Body Report, EC – Selected Customs Matters , para. 225. 
1096 Appellate Body Report, EC – Selected Customs Matters , para. 225. 
1097 See paras. 7.692-7.693 above. 
1098 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 3488. 
1099 See, for example, para. 11.83 in the Panel Report, Argentina – Hides and Leather .  WT/DS394/R 
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  applied consistently in the same manner, both over  time and in different places, in respect of all 
applicant exporters seeking the zinc quota. 
7.750  The Panel considers that these features of th e administrative process constitute evidence of 
administration that is not uniform.  As was menti oned above in connection of  its consideration of 
what is unreasonable administration, the Panel consider s that this is the type of evidence to which the 
Appellate Body in EC – Customs Matters was referring when it stated "the features of an 
administrative process that govern the application of a legal instrument of the kind described in Article X:1 may constitute relevant evidence for establishing ... non-uniform administration of that 
legal instrument".
1100  In these circumstances "the panel [has] attach[ed] much weight to differences 
that exist at the level of the administrative pr ocesses, because it considers th ese differences to be so 
significant that they have caused, or are likely to cause, the non-uniform application" of Article 19 of 
the Export Quota Administration Measure .1101 
7.751  The Panel thus finds that the lack of any definition, guidelines or standards in how the 
32 Local Departments in charge of Foreign Trad e should apply the potentially critical operation 
capacity criterion constitutes relevant evidence in  establishing non-uniform administration of the 
operation capacity criterion. Moreover, the Panel is  persuaded that the lack of any definition, 
guidelines or standards pose a very real risk that this criterion will be administered differently 
depending on which Local Departme nt handles the quota application. 
7.752  Consequently, the Panel concludes that the lack  of any definition, guidelines or standards in 
how the operation capacity criterion should be applie d poses a very real risk to the interests of 
relevant parties such that this necessarily leads to non-uniform administration inconsistently with 
Article X:3(a) of the GATT 1994.  
Impartial administration 
7.753  As mentioned at paragraph 7.695 above, read in  the context of Article X:3(a), the ordinary 
meaning of the word "impartial", means "not par tial;  not favouring one party or side more than 
another; unprejudiced, unbiased, fair".1102 
7.754  The issue here is whether in the absence of an y definition or standard, the operation capacity 
criterion will be applied in an impartial manner consistent with Article X:3(a). 
7.755  The Panel has not been convinced that the lack  of any definition, guidelines or standards in 
how the 32 Local Departments should interpret the te rm "operation capacity" will pose a very real risk 
such that partial administration will necessarily resu lt.  While the Panel has found that the lack of 
definition, guidelines or standards necessarily lead s to unreasonable and non-uniform administration, 
the Panel does not consider that this lack means th at the Local Departments will apply the operation 
capacity criterion to favour some exporter applicants  over others.  In other words the Panel does not 
consider that this particular feature of the admi nistrative process – the lack of definition of any 
guidelines, standards – "constitute[s] relevant evid ence for establishing ... [partial] administration"1103 
of the operation capacity criterion.  
                                                      
1100 Appellate Body Report, EC – Selected Customs Matters , para. 225. 
1101 Appellate Body Report, EC – Selected Customs Matters , para. 225. 
1102 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 1, p. 1325. 
1103 Appellate Body Report, EC – Selected Customs Matters , para. 225. WT/DS394/R 
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  (ii) Conclusion 
7.756  The Panel concludes that the lack of any de finition, guidelines or standards in how the 
operation capacity criterion should be applied poses a very real risk to the interests of relevant parties 
such that this necessarily will result in unreasonable and non-uniform administration of this criterion 
inconsistently with Article X:3(a) of the GATT 1994. 
3. Whether China's administration of its ex port quotas through the involvment of the 
CCCMC is inconsistent with Article X:3(a) of the GATT 1994  
(a) The nature of the United Stat es' and Mexico's challenges 
7.757  Turning to consider the claims brought by the United States and Mexico, the Panel notes that 
these complainants have categorized their Article X:3(a) claims as as such  challenges.
1104 The United 
States and Mexico assert that they challenge the administration of the export quotas.1105 The question 
is whether the United States and Mexico are challeng ing the substantive content of a legal instrument 
that regulates the administration of a legal instrument  of the kind described in Article X:1, or whether 
they are claiming a violation of Article X:3(a)  based on an administrative process.  In their 
submissions before the Panel, the United States a nd Mexico consistently challenged the involvement 
of the CCCMC in quota administration and its access to sensitive commercial information of the 
applicant enterprises. According to  these complainants, this goes beyond what is necessary to confirm 
an applicant enterprise's conformity with the quota qualification requirements.1106  
7.758  The Panel concludes that the United States and Mexico are raising a substantive challenge – 
an as such  challenge – in respect of the features of the administrative processes that pertain to the 
application of a legal instrument of the kind descr ibed in Article X:1. In other words, the United 
States and Mexico claim that the administration of the export quotas will, as such , lead to 
inconsistency with Article X:3(a). 
(b) Partial and unreasonable administration 
7.759  The United States and Mexico make two claims concerning the involvement of the CCCMC 
in quota administration.  First, according to these complainants, China empowers a private party – the 
CCCMC – to have direct involvement in the admi nistration of the export quota on coke, which is 
allocated directly.1107  Second, they allege that the CCCMC is  permitted direct involvement in the 
administration of the export quotas on bauxite, fluo rspar, and silicon carbide, which are allocated 
through the bidding system.   
7.760  As explained in Section VII.C.2 above, the CCCMC evaluates enterprises' applications to 
export under the quota and determines whether they satis fy the relevant eligibility criteria.  According 
to the United States and Mexico, in the course of that process, the CCCMC obtains access to sensitive 
and confidential commercial information about th e enterprises.  Moreover, the United States and 
Mexico state that the information an exporter is re quired to share with the CCCMC in its application 
                                                      
1104 United States' response to Panel question No. 50 following the second substantive meeting, 
para. 109;  Mexico refers to the United States' response. 
1105 United States' first written submission, paras.  278-290; Mexico's first written submission, 
paras. 281-293. 
1106 See, for example, United States' first written submission, para. 311;  Mexico's first written 
submission, para. 314. 
1107 United States' first written submission, paras.  292-303; Mexico's first written submission; 
paras. 295-306.  WT/DS394/R 
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  is not relevant to the stated objective fo r the CCCMC's involvement. According to these 
complainants, this amounts to unreasonable admini stration in contravention of Article X:3(a).
1108 
7.761  China requests the Panel to reject the United States' and Mexico's claims. First, China 
contends that it no longer subjects exports of fl uorspar to a quota under 2010 export quota measures.  
Accordingly, it requests the Panel not to reach findings on fluorspar.1109  Second, China alleges that 
the United States and Mexico have offered an impr oper legal characterization of the facts.  China 
states that MOFCOM delegates governmental author ity in the administrative process leading to quota 
allocation, whether allocated directly or through bidding, to the CCCMC Secretariat, and not to the 
CCCMC membership; consequently, the CCCMC S ecretariat, and not CCCMC members, are 
involved in the administrative process leading to quot a allocation.  China continues that no inherent 
conflict "averse to the interest of the exporter at  issue and foreign buyers" exists because competing 
exporters and potential customers are not grante d access to confidential commercial information.1110  
China asserts that each type of required information/ documentation is pertinent to the verification of 
whether the applicant satisfies the eligibility criteria.1111  China also submits that even if the Panel 
were to find that the involvement of the CCCMC Secret ariat presents an inherent risk of partial and 
unreasonable administration, effective safeguards in th e form of a confidentiality agreement as well as 
sanctions are in place to prevent or remedy risks of conflict of interest describ ed by the United States 
and Mexico.1112 
7.762  The United States and Mexico respond that the involvement of the CCCMC Secretariat does 
not cure the inherent conflict of interest presented in the CCCMC's involvement in quota 
administration because the CCCMC Secretariat conducts its work on behalf of an organization that represents the interests of the competitors and pot ential customers of exporters seeking an allotment 
under one of the export quotas at issue.  Moreover,  these complainants question the effectiveness of 
the confidentiality agreement that China claims serves as a safeguard to prevent the inappropriate 
flow of confidential and sensitive commercial info rmation from an exporter to an entity representing 
interests adverse to that exporter.   
7.763  As a preliminary matter, the Panel recalls its fi nding in paragraph 7.33 a bove that, in general, 
measures that were in force when  the Panel was established on 21 December 2009 form the basis of 
its terms of reference.
1113  At the request of the complainants, the Panel will only assess the WTO 
consistency of the 2009 measures while taking note  that the 2010 measures do not set a quota for 
fluorspar. 
7.764  The Panel notes that the formal status of the CCCMC under Chinese law is that of a "foreign 
trade and economic social organization".1114  The CCCMC was established by charter that, inter alia,  
describes the functions, membership, and organizati on of the CCCMC.  The relevant charter for the 
purposes of this dispute is the 2001 CCCMC Charter , as this was the charter in existence on 
21 December 2009, the date of the Panel's establishment.1115  The CCCMC's daily operations are 
                                                      
1108 United States' response to Panel question, para. 115 following the second substantive meeting, 
Mexico refers to the United States' response. 
1109 China's first written submission, para. 667. 
1110 China's first written submission, para. 712. 
1111 China's comments on the United States' and Mexi co's responses to Panel question No. 55 following 
the second substantive meeting, paras. 201-210. 
1112 China's first written submission, paras. 715-724. 
1113 The Panel observes, however, that its decision to assess the complainants' claims here does not 
foreclose the possibility of considering 2010 measures in other contexts. 
1114 Measures for Administration of Trade Social Entities , Articles 5 and 6 (Exhibits CHN-313, JE-
101). 
1115 On the issue of the relevant charter, see paragraph 7.1017. WT/DS394/R 
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  managed by a Secretariat, also called the Standing Administrative Organ of the CCCMC.
1116  There 
are over 4,000 members of the CCCMC comprising, among others, foreign trade companies, trade 
and manufacturing companies, joint venture compan ies, private enterprises and research institutes 
operating businesses in ferrous metals, non-ferrous  metals, non-metallic mi nerals and products. 
7.765  With regard to the direct allocation of th e coke quota, China's Ministry of Commerce 
delegates to the CCCMC and the China Coking Industry Association the examination of the 
applicants' compliance with the requisite conditions .  These conditions are set out in the 2009 Coke 
Export Application Procedures.1117 The CCCMC sends its recommendation on the complying 
enterprises to the Ministry of Commerce.  The Mi nistry of Commerce deci des which companies are 
qualified for coke export quotas and publishes the lis t of those companies, on the basis of the 
compliance recommendations given by the CCCMC. 
7.766  For the allocation of quotas through bidding, Article 6(6) of the 2001 CCCMC Charter  
provides the CCCMC with the authority to assist MOFCOM's Bidding Committee in the organization 
of the quota bidding process.  The Bidding Committee,  the main administrative authority responsible 
for organizing the bidding process1118, is assisted by the Bidding Office,  which in turn is responsible 
for implementing individual auctions organized by the Bidding Committee.1119 The Bidding Office 
consists of three persons:  the CCCMC Vice-C hairman, the CCCMC Director of the Bidding 
Department, and the Vice-Director of the Coordi nation and Consulting Department of the China 
Association of Foreign-Invested Enterprises.  Th e CCCMC Director of the Bidding Department is a 
member of the CCCMC Secretariat;  the CCCMC Vice-Chairman is part of the management 
personnel of CCCMC, and is selected from the administrative staff of the CCCMC Secretariat.1120   
7.767  In respect of the United States' and Mexico's  claims, there are two types of procedures 
relevant for the allocation of quotas:  direct allocation and allocation through bidding.  As the 
allegations of inconsistent administration by th e CCCMC are essentially the same for both types of 
procedure, the Panel will consider jointly the invol vement of the CCCMC in quota allocation, whether 
through bidding or by direct allocation.  
7.768  The Panel recalls that according to Article X:3(a), WTO Members are required to administer 
laws of the kind that fall under Article X:1 in  a uniform, impartial and reasonable manner.  
Consequently, in order to analyse the United Stat es and Mexico's claims under Article X:3(a), the 
Panel has to determine: (a) whether the measures establishing the export q uotas for coke, bauxite, 
fluorspar, and silicon carbide are part of the "law s, regulations, decisions and rulings" of the kind 
described in Article X:1 of the GATT; and, if so, (b) whether China has not administered these 
measures in an impartial and reasonable manner, contrary to Article X:3(a). 
7.769  We also recall our explanation of the term "g eneral application" discussed in paragraphs 
7.733-7.734 above, which we continue to bear in mind as we analyse the United States' and Mexico's 
claims.  
7.770  As relevant to these claims, MOFCOM and Customs identified coke as a product subject to 
export quotas that are allocated directly, and bauxite, fluorspar, and s ilicon carbide, as products 
                                                      
1116 In these Reports, for ease of use,  the Panel will refer to the Standing Administrative Organ of the 
CCCMC as the Secretariat.  The Panel also notes that  this was the term commonly used by the parties. 
1117 2009 Coke Export Quota Application Procedures  (Exhibits CHN-308, JE-85). 
1118 Export Quota Bidding Implementation Rules  (Exhibits CHN-305, JE-78), Articles 2 and 3.   
1119 Export Quota Bidding Measures , Article 9, second para (Exhibits JE-77, CHN-304); Export Quota 
Bidding Implementation Rules , Article 5(I), (Exhibits CHN-305, JE-78). 
1120 Regulations for Personnel Management of Chambers of Commerce  (Exhibit CHN-315, JE-102), 
Article 14;  2001 CCCMC Charter  Article 29, (Exhibits CHN-16, JE-87).  WT/DS394/R 
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  subject to export quotas allocated through a bidding system.
1121  China also maintains measures 
setting out the quota amounts, and the general c onditions governing the export quotas.  These 
measures took effect on 1 January 2009 and were s till in effect on 21 December 2009, the date of the 
Panel's establishment. 
7.771  The United States submitted that the relevant measures are the following:  Foreign Trade Law 
(Articles 2, 14-19, 34, 61, 63, 64); Regulation on Import and Export Administration  (Articles 4, 35-
41, 43, 44, 64-66); 2008 Export Licence Administration Me asures; 2009 Export Licensing Catalogue; 
2009 Graded Export Licensing Entities  Catalogue ; 2008 Export Licensing Working Rules; 2009 
Export Quota Amounts;  2009 Coke Export Quota Application Procedure; 2009 First Batch Coke 
Export Quotas;  2009 Second Batch Coke Export Quot a; 2009 First Batch Coke Export Quotas for 
FIEs; 2009 Second Batch Coke Export Quotas for FIEs; 2009 Coke Export Quota Application 
Procedure; 1994 Export Quota Bidding Measures ; Export Quota Bidding Implementation Rules; 
2009 First Round Export Quota Bidding Announcement ; 2009 Second Round Export Quota Bidding 
Announcement; 2009 First Round Fluorspar Bidding  Procedures; 2009 First Round Bauxite Bidding 
Procedures; 2009 First Round Silicon Carbide Bidding Procedures; 2009 Announcement of Second 
Bidding Round for Talc and Silicon Carbide; 2009 Second Round Silicon Carbide Bidding 
Procedures; 1994 CCCMC Charter; 2001 CCCMC Charter . 
7.772  These measures apply generally to the expor tation of goods subject to export quotas. 
Moreover, the measures affect a ll enterprises wishing to export c oke, bauxite, fluorspar, and silicon 
carbide under the quota.  None of the measures at i ssue is limited to the tr eatment of particular 
companies or particular shipments.  Furthermore,  the export quotas restrict the exportation of coke, 
bauxite, fluorspar, and silicon carbide.  
7.773  Thus, the Panel considers that these measur es allegedly establishing the coke, bauxite, 
fluorspar, and silicon carbide export quotas are covere d by the description contained in Article X:1.  
These measures are (a) laws or regulations, (b) of general application (c) made effective by China, 
and, (d) pertain to requirements on exports.  
(i) Impartial administration  
7.774  The Panel understands the basis of the United States ' and Mexico's claims to be that there is 
an inherent conflict of interest presented by the CCCMC's involvement in quota administration.  
According to these complainants, this derives fro m the requirement that an individual exporter 
applicant must share its confidential and sensitiv e commercial information with an entity that 
represents the interests of its competitors and pot ential customers.  The Panel takes note that the 
United States and Mexico do not question China's asser tion that quota administration is handled by a 
secretariat within the CCCMC, but they neverthel ess consider that that CCCMC Secretariat acts on 
behalf of the CCCMC itself. 
7.775  The United States and Mexico's claims are based on a challenge to "[t]he features of an 
administrative process that govern the application of a legal instrument of the kind described in Article X:1" as relevant evidence for establishi ng inconsistent administration of that legal 
instrument.
1122  The Panel recalls that in respect of a challenge to an administrative process, the 
complaining party must show that the identified f eatures of the challenged administration "necessarily 
lead" to an inconsistency with Article X:3(a) with respect to the administration of laws and 
regulations in a uniform, impartial and reasonable manner. The Panel recalls the Appellate Body's 
guidance in this respect: "a panel might attach much we ight to differences that exist at the level of the 
                                                      
1121 2009 Export Licensing Catalogue   (Exhibits CHN-6, JE-22). 
1122 Appellate Body Report, EC – Selected Customs Matters , para. 225. WT/DS394/R 
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  administrative processes, because it considers these di fferences to be so significant that they have 
caused, or are likely to cause, [inconsistent] app lication of the legal instrument at issue".
1123 If the 
complaining party shows that the features of an administrative process pose a  very real risk to the 
interests of the relevant parties, then it will have met its burden in proving a violation of 
Article X:3(a), that is non-uniform, unreasonable or partial administration.   
7.776  Consequently, the issue for the Panel is whethe r these complainants have demonstrated that 
the features relating to the involvement of the CCCMC in the administration of export quotas pose a 
very real risk to the interests of relevant par ties, such that this necessarily leads to partial 
administration of the export quotas inconsistently with Article X:3(a) of the GATT 1994.  
7.777  We agree with the panel in Argentina – Hides and Leather  that the question of whether or not 
an administrative process is partial or not is related,  inter alia , to the question of access to confidential 
information, as well as to what  the person who receives the confiden tial information is permitted to do 
with it.  Applying this to the facts at hand, if a staff member of the CCCMC Secretariat who receives 
an applicant exporter's confidential commercial inform ation is permitted to participate in, or in any 
way influence, the quota allocation process, partial administration may result, provided that person is 
also shown to have adverse commercial interests.  Th e Panel also bears in mind that even if it were to 
find that persons with adverse commercial interests we re allowed to participate in the quota allocation 
process, this might be remedied by adequate saf eguards preventing the inappropriate flow of one 
person's confidential information to another.  In the light of this, the Panel will first consider whether 
members of the CCCMC Secretariat do in fact partic ipate in deciding which applicant exporters are 
awarded a part of the export quota.  If the answer to this is in the affirmative, the Panel will then go on 
to consider whether the members of the CCCMC S ecretariat are persons with adverse commercial 
interests.  If that is so, the Panel will then c onsider whether adequate safeguards are in place to 
prevent the inappropriate flow of confidential information. 
7.778  China maintains that the involvement of the CCCMC Secretariat in quota administration is 
purely administrative.  For the coke quota allocation process, China confirms that by virtue of Article II of the 2010 Application Qualifica tions and Procedures for Export Quota of Coke, the 
CCCMC may be asked to assist MOFCOM's Foreign Trade Department in verifying whether export 
enterprises have submitted all required materials,  and, based thereon, in offering general 
recommendations on which enterprises submitted a ll materials and satisfy the qualification 
requirements.
1124  According to China, within the CCCM C Secretariat, the Minerals & Metals 
Department is the sole administrative divisi on charged with this verification competence.1125  
Applications for export quotas are provided solely  to CCCMC's Minerals & Metals Department and 
not to the membership of the CCCMC itself.1126   
7.779  According to China, once the review and reco mmendation process has been completed by the 
Minerals & Metals Department, it is MOFCOM th at conducts another final review, taking into 
account the recommendation from the Department, and decides how to allocate quota to the 
qualifying enterprises.1127  In response to a question posed by the Panel concerning the nature of the 
recommendation to MOFCOM, China asserted that the CCCMC Secretariat's recommendations 
                                                      
1123 Appellate Body Report, EC – Selected Customs Matters , para. 225. 
1124 2010 Application Qualifications and Procedures for Export Quota of Coke , Article II. 
(Exhibit CHN-317).  A similar requirement exists in the 2009 Coke Export Quota Application Procedures , 
Article II (Exhib it CHN-308, JE-85). 
1125 China's first written submission, para. 691. 
1126 China's first written submission, para. 693. 
1127 2010 Application Qualifications and Procedures for Export Quota of Coke  Article II 
(Exhibit CHN-317).  A similar requirement exists in the 2009 Coke Export Quota Application Procedures , 
Article II, (Exhibits CHN-308, JE-85).  WT/DS394/R 
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  include all companies that the CCCMC Secretariat has verified meet the criteria for participation in 
the coke quota.  China observed that the 2010 Application Qu alifications and Procedures for Export 
Quota of Coke  confirms this. The Panel observes th at the 2009  measure contains similar 
requirements.
1128 China also submitted a letter confirming that  the verification work is undertaken by 
the CCCMC Minerals & Metals Department.1129 
7.780  In the Panel's view, the evidence demonstrat es that the CCCMC Secretariat's Minerals & 
Metals Department is not involved in allocating the coke quota itsel f;  its involvement is limited to 
assisting MOFCOM in verifying whether applicant exporting enterprises comply with the qualifying 
criteria that have been defined in the relevant measures, and in verifying that enterprises have 
properly complied with application requirements. Th e evidence on the record demonstrates that the 
CCCMC Secretariat's Minerals & Metals Department's role is purely of an administrative nature.   
7.781  As regards the quotas awarded through a bi dding process, the Panel notes that the Export 
Quota Bidding Measures  provide  that the Bidding Office inter alia : (i) re-examines whether all 
bidding enterprises comply with the qualification requirements for a particular bid; (ii) prints and 
issues bid-winning certificates; (iii) verifies whether payment of the bid-winning deposit and the bid-
winning price has been received; (iv) publishes preliminary bid-winning results within a specific timeline; (v) reports to the Bidding Committee the pr eliminary bid-winning results; (vi) reports to the 
Bidding Committee the results of the collection of the bid-winning deposit within five working days of the end of the period for collection;  and (vii) monitors the use of quotas.
1130 
7.782  Furthermore, the Panel also observes that successful bidding enterprises are determined 
according to procedures set down in Article 19 of the Export Quota Bidding Measures1131 and the 
successful bid quantity is determined according to  the procedures set out in Article 20(II) of the 
Export Quota Bidding Measures.1132  As regards the determination of the successful bid price, 
Article 20(I) provides that in public bids, the successful bid price is the bidding price.1133 
7.783  The Panel recalls that the specific claims of the United States and Mexico are based on the 
assertion that an individual exporter applicant mu st share its confidential and sensitive business 
information with an entity that represents the in terests of its competitors and potential customers.1134  
However, the Panel does not consider that the featur es of the administrative process in this case "have 
caused, or are likely to cause" partial administration of the export quotas.1135  Consequently,  the 
complainants have not been able to demonstrate to th e Panel's satisfaction that there is a very real risk 
to the interests of relevant parties that the Bi dding Department, as a result of having access to an 
applicant exporter's confidential information, will ne cessarily act in a partial manner to favour certain 
applicants over others.  The mere sharing of c onfidential information will not necessarily result in 
partial administration.  This would be the case onl y if those persons who receive the confidential 
commercial information are able to use it in a manne r that is contrary to the interests of those 
providing the information. The Panel is mindful of  the involvement of certain personnel of the 
                                                      
1128 2009 Coke Export Quota Application Procedures , Article II, (Exhibits CHN-308, JE-85), third and 
fourth paras. 
1129 Letter from the CCCMC Secretariat, date d 10 November 2010 (Exhibit CHN-530). 
1130 Export Quota Bidding Measures  (Exhibits CHN-304, JE-77);  Export Quota Bidding 
Implementation Rules  Article 5(VIII) (Exh ibits CHN-305, JE-78). 
1131 Exhibits CHN-304, JE-77. 
1132 Exhibits CHN-304, JE-77. 
1133 The Panel recalls from its description of the quota allocation system that bauxite, fluorspar, and 
silicon carbide are subject to public bidding. 
1134 United States' second written submission, para. 359;  Mexico's second written submission, 
para. 363. 
1135 Appellate Body Report, EC – Selected Customs Matters , para. 225. WT/DS394/R 
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  CCCMC in the management of the Bidding Office.
1136 However, in the light of the foregoing 
description of the roles of the relevant department s of the CCCMC Secretariat in the administration of 
the quota allocation process, the Panel is of the vi ew that the United States and Mexico have not 
shown that there is a very real risk that either  the Metals & Minerals Department or the Bidding 
Department  can exercise any discretion, partiality or bias in the administration of the coke, bauxite, 
fluorspar and silicon carbide quotas in a way that would allow persons involved in quota 
administration to favour one exporting company over another. 
7.784  In fact the evidence shows that the discreti on, as well as the decision on how much a quota 
applicant receives, falls to MOFCOM in the case of the coke quota, the government authority charged 
with this task.  In the case of quotas allocated through a bidding process, successful enterprises, the 
successful bid quantities and the price are determin ed according to procedures set out in Articles 19 
and 20 of the Export Quota Bidding Measures.1137.  The United States and Mexico have not 
demonstrated that either the relevant departme nts of the CCCMC Secretariat, or the CCCMC itself, 
are involved in the actual allocation of the export quotas, or that, in the case of the CCCMC 
Secretariat, its role extends beyond the verification of  qualifying criteria or certain clerical tasks in the 
case of quotas allocated through bidding.   
7.785  As the Panel has concluded that members of the CCCMC Secretariat do not participate in 
deciding which applicant exporters are awarded a part  of the export quota, the Panel does not need to 
consider whether the members of the CCCMC Secr etariat are persons with adverse commercial 
interests or whether adequate safeguards are in place to prevent the inappropriate flow of confidential 
information. 
7.786  The Panel is of the view that the United Stat es and Mexico have not demonstrated that the 
features of the administrative process – namely th e involvement of the CCCMC in the administration 
of export quotas – pose a very real risk to the inter ests of relevant parties such that this necessarily 
results in partial administration of the export quotas contrary to Article X:3(a). 
7.787  Consequently, the Panel concludes that the ad ministration of export quotas by the CCCMC, 
whether allocated directly or by bidding, does not amount to partial administration in a manner inconsistent with Article X:3(a) of the GATT 1994. 
(ii) Reasonable administration 
7.788  The Panel understands the United St ates' and Mexico's claims to be that the information an 
exporter is required to share with the CCCMC in applyi ng to export under a q uota is not relevant to 
the stated objective for sharing this information, that is administering allocations of the relevant 
quotas.
1138 These complainants acknowledge that some of  the information requested may be relevant 
to determining whether the applicant enterprises have the requisite prior export experience and 
registered capital requirements demanded of exporter a pplicants in certain of the measures at issue.  
However, by virtue of obtaining access to document s containing this information, representatives of 
the CCCMC would also gain access to other confiden tial information that bears no relevance to the 
                                                      
1136 See para. 7.766 above. 
1137 Exhibits CHN-304, JE-77. 
1138 United States' second written submission, para. 360; Mexico's second written submission, 
para. 364.  WT/DS394/R 
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  administration of the application process for export quotas.
1139  Accordingly, having to provide this 
information to the CCCMC is unreasonable and resu lts in a contravention of Article X:3(a). 
7.789  Here too, the United States' and Mexico's clai ms are based on a challenge in relation to an 
administrative process.  Consequently, the issue for the Panel here is whether these complainants have 
demonstrated that the features relating to the in volvement of the CCCMC in the administration of 
export quotas pose a very real risk to the interests of relevant parties such that  this necessarily leads to 
unreasonable administration of the export quotas inconsistently with Article X:3(a) of the 
GATT 1994.  
7.790  We recall the panel's finding in Argentina – Hides and Leather  that "a process aimed at 
assuring the proper classification of products, but wh ich inherently contains the possibility of 
revealing confidential business information, is an unreasonable manner of administering the laws, 
regulations and rules identified in Article X:1 a nd therefore is inconsistent with Article X:3(a)."1140   
7.791  The United States' and Mexico's specific comp laints are that an exporter's past export 
invoices, balance sheet and income statement, info rmation about its registered capital, sales revenue, 
net profits, and past import and export data, mu st be shared with the CCCMC in order for the 
CCCMC to process the exporter's application or to  complete tasks related to maintaining the 
functioning of the export quota and export quota bidding regimes.1141  
7.792  Responding to each of these challenges, China e xplains with reference to its 2010 measure 
why the specific information is required and the lega l basis for the requirement.  However, the Panel 
recalls that the measures that were in for ce on 21 December 2009 (the date of the Panel's 
establishment) are the 2009 measures not the 2010 meas ures.  Consequently, the Panel will refer to 
the relevant 2009 measure in conducting its analysis .  China explains that (2010) requirement for an 
exporter to provide past export invoices, as s upporting documentation for the volume of export and 
supply for export of coke1142, allows verification of whether the exporter satisfies the minimum export 
performance requirement.1143 The Panel has verified that a similar requirement exists in the relevant 
measure at issue, the 2009  Application Qualifications and Application Procedures for Export Quota 
of Coke .1144 China asserts that the business licence must be submitted as supporting documentation1145, 
showing that the coke quota applicant is lawfu lly registered and satisfies the business qualification 
requirement.1146  The Panel has verified that a requirement  similar to the 2010 requirement exists in 
                                                      
1139 United States'  first written submission, paras. 29 8, 311, and 370  and United States' second written 
submission, para. 363;  Mexico's first written submissi on, para. 301, 314, and 373 and Mexico's second written 
submission, para. 367. 
1140 Panel Report, Argentina – Hides and Leather , para. 11.94. 
1141 United States' first written submission, para. 364;  Mexico's first written submission, para. 367. 
1142 2010 Application Qualifications and Procedures for Export Quota of Coke , Article I(I)3 and I(II)2. 
(Exhibit CHN-317). 
1143 2010 Application Qualifications and Procedures for Export Quota of Coke , Article III(IV), 
(Exhibit CHN-317). 
1144 2009 Coke Export Quota Application Procedures , Article I(1)3 and Article I(2)2 and  Article III(5), 
(Exhibits CHN-308, JE-85). 
1145 2010 Application Qualifications and Procedures for Export Quota of Coke , Article III(I) (Exhibit 
 CHN-317). 
1146 2010 Application Qualifications and Procedures for Export Quota of Coke , Articles I(1)1 and I(2)1 
and Article III(1), (Exhibit CHN-317). WT/DS394/R 
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  the relevant measure at issue, the 2009  Application Qualifications and Application Procedures for 
Export Quota of Coke .
1147 
7.793  China explains that an audited balance sheet  must be submitted as supporting documentation 
for the registered capital, paid-in capita l, and other capital-related information1148 that must be 
completed in the quota application form for baux ite and silicon carbide, allowing verification of 
whether the exporter satisfies the mini mum registered capital requirement.1149 The Panel has verified 
that a requirement similar to the 2010 requirement ex ists in the relevant measure at issue, the 2009 
Second Round Bidding Invitation .1150 
7.794  Lastly, an income statement must be submitted as supporting documentation for the 
information regarding the total value of exports to be completed in the application form for bauxite 
and silicon carbide.1151  Such information and documentation allows the authority to verify whether 
the exporter satisfies the minimum export performance requirement.1152 The Panel has verified that a 
requirement similar to the 2010 requirement exists  in the relevant measure at issue, the 2009 Second 
Round Bidding Invitation .1153 
7.795  In the light of these explanations by China, the Panel concludes that the required documents 
are relevant to the discharge of the task delegated to the CCCMC Secretariat to verify the eligibility of 
quota applicants.  The United States and Mexico have  not been able to rebut China's assertion that 
they are so required.  Moreover, China asserts th at it requires only information stipulated in the 
relevant measure. This suggests that other inform ation in the document could be redacted should the 
enterprise not wish to share it.  
7.796  Thus, the United States and Mexico have not demonstrated that the features relating to the 
involvement of the CCCMC in the administration of export quotas pose a very real risk to the interests of relevant parties such that this necessarily results in unreasonable administration of the export 
quotas inconsistently with Article X:3(a). Conseque ntly, the Panel finds that the administration of 
export quotas by the CCCMC, whether allocated directly or by bidding, does not amount to 
unreasonable administration in a manner inconsis tent with Article X:3(a) of the GATT 1994. 
                                                      
1147 2009 Coke Export Quota Application Procedure , Articles I(1)1 and I(2 )1, (Exhibits CHN-308, 
JE-85). 
1148 2010 Second-Batch Bidding Qualifications and Review for Export Quotas , Articles IV(I)3(1) (incl. 
Appendix 2) and IV(I)3(2)(A), (Exhibit CHN-307). 
1149 2010 Second-Batch Bidding Qualifications and Review for Export Quotas , Articles III(II)3 and 
III(II)4 (Exhibit CHN-307). 
1150 2009 Second Round Export Quota Bidding Announcement , Article IV(I)3, (including Appendix 2 
in Exhibit CHN-310, JE-91), read in conjunction with 2009 First Round Export Quota Bidding Announcement, 
Article III(II) (Exhibits CHN-309, JE-90). 
1151 2010 Second-Batch Bidding Qualifications and Review for Export Quotas , Articles IV(I)3(1) (incl. 
Appendix 2) and IV(I)3(2)A, (Exhibit CHN-307). 
1152 2010 Second-Batch Bidding Qualifications and Review for Export Quotas , Articles III(II)3 and 
III(II)4, (Exhibit CHN-307). 
1153 2009 Second Round Export Quota Bidding Announcement , Article (IV)(1)(3) , (Exhibits CHN-310, 
JE-91).  WT/DS394/R 
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  (iii) Conclusion 
7.797  In light of the above, the Panel finds that the administration of export quotas by the CCCMC, 
whether allocated directly or by bidding does not amount to partial or unreasonable administration in 
a manner inconsistent with Article X:3(a) of the GATT 1994. 
4. Whether China's failure to publish the total am ount and procedure for the allocation of 
zinc export quotas is inconsistent with Article X:1 of the GATT 1994  
7.798  The European Union claims th at China does not publish the total amount of export quota for 
zinc that it will allocate for a specific year.  It al so asserts that China does not publish any information 
regarding the conditions that interested enterprises s hould satisfy in order to be allocated a zinc export 
quota.  The European Union continues that China does not publish any invitation for applications for 
an export quota by interested enterprises, or a list  of the enterprises that ha ve been allocated a zinc 
export quota.  As a result, neither interested enterprises, nor other WTO Members, know how much 
zinc China will allow to be exported, when the a llocation of the export quotas will take place, how 
and to whom applications are to be submitted, or which cond itions applicants should satisfy.
1154 
7.799  China responds that pursuant to Article I(i) of the 2010 Export Licensing Catalogue , exports 
of zinc ores are subject to a quota allocated directly.1155  China explained that MOFCOM has not 
authorized a 2010 quota for zinc.1156  In other words, China says that in 2010, MOFCOM did not 
make effective the quota on zinc by setting a particular quota amount available for exports.  As a result, no zinc could be exported from China in 2010.  Finally, China states that it "does not assert any 
defence in connection with this failure to set th e quota amount for zinc ores in 2010". In 2009, there 
also appears to have been a prohib ition on the export of zinc from China.
1157   
7.800  We recall that Article X:1 states in relevant part: 
"Laws, regulations, judicial decisions and administrative rulings of general 
application, made effective by any contr acting party, pertaining to ... requirements, 
restrictions or prohibitions on ... exports sh all be published promptly in such manner 
as to enable governments and traders to become acquainted with them…" 
7.801  As set out above, WTO Members are required to publish promptly a ll laws, regulations, 
judicial decisions and administrative rulings in su ch a way as to enable governments and traders to 
become acquainted with them. The European Union is required to establish that China's failure to 
authorize a zinc quota for 2009 is a measure within  the terms of Article X:1 that had been made 
effective, thereby requiring prompt publication so  as to enable governments and traders to become 
acquainted with it.   
7.802  As the Appellate Body said in US – Corrosion-Resistant Steel Sunset Reviews , "any act or 
omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement".
1158 The Panel considers that the decision by MOFCOM not to publish the zinc quota is a 
                                                      
1154 European Union's first written submission, para. 213. 
1155 2010 Export Licensing Catalogue Article I(i), (Exhibit CHN-7). 
1156 Following the first substantive meeting, the European Union asked whether China could provide 
details of the legal instrument that announced that the zinc quota for 2009 and 2010 had been set at zero.  In its 
response to that question, China referred the European Un ion (and the Panel) to para. 37 of its responses to 
questions. In this paragraph, China acknowledged that it had failed to set the quota amount for zinc for 2010.  
The Panel deduces from this response that China also failed to set the quota amount for zinc in 2009. 
1157 China's response to Panel question No. 8 following the first substantive meeting para 37. 
1158 Appellate Body Report, US – Corrosion-Resistant Steel Sunset Reviews , para. 81. WT/DS394/R 
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  measure of China for the purposes of WTO dispute settlement. China's Foreign Trade Law  delegates 
MOFCOM as the government agency responsible fo r the administration of China's export quotas.  
Furthermore, MOFCOM is directed to determine the total amount of the annual export quota for each 
good subject to export quotas and to announce the total amount of the annual export quota for each 
product by 31 October of the preceding year.
1159 Thus, this determination by MOFCOM of the quota 
amounts, including determining the zinc quota, is an act or omission attributable to China. Moreover, 
it is clear that the measure pertains to "require ments, restrictions, or prohibitions" on exports.  
7.803  As to the requirement that it be a "law, regula tion, judicial decision [or] administrative ruling 
of general application", the Panel notes the broad sc ope of this phrase and considers that it includes a 
wide range of measures that have the potential to affect trade and traders.1160  Consequently, the Panel 
concludes that the failure to set an export quota for zinc is a "law, regulation, judicial decision [or] administrative ruling" falling within the ambit of Article X:1. 
7.804  The Panel considers further that MOFCOM's  failure to set a quota amount is a "law, 
regulation, judicial decision [or] administrative ru ling" of general application.  It affects any 
enterprise wishing to export the zinc quota;  hence it fulfils the "general application" criterion.   
7.805  On the question of whether a measure ha d been made effective, the panel in EC – IT Products 
held that "the term 'made effective' under Article  X:1 of the GATT 1994 also covers measures that 
were brought into effect, or made operative, in practice and is not limited to measures formally 
promulgated or that have formally 'entered into force'."
1161  The Panel considers that the failure to set a 
quota amount for zinc comes within the scope of this term.  It is "law, regulation, judicial decision 
[or] administrative ruling" that has been made opera tive in that there has been no export of zinc.   
7.806  Concerning the requirement to publish promptly  the relevant measures, in this case, the 
omission to set a quota for zinc, the Panel observes th at China has not denied that it has not published 
the quota, or lack thereof, for zinc.  Additionally the failure to publish the quota has had a practical 
result as interested exporters did not know that e ffectively, they were unable to export zinc.  The 
Panel considers that under its Artic le X:1 obligations, China should ha ve published its decision not to 
make "effective the quota on zinc by setting a partic ular quota amount available for exports" in such a 
manner as to enable governments and traders to become acquainted with that decision.1162 
7.807  Consequently, the Panel concludes that the fa ilure by China to publish promptly MOFCOM's 
decision not to authorize an export quota for zinc  in such manner as to enable governments and 
traders to become acquainted with it is inc onsistent with Article X:1 of the GATT 1994. 
5. Whether China's allocation of quotas on baux ite, fluorspar and silicon carbide based on 
the bid-winning price is inconsistent with Article VIII:1(a) of the GATT 1994 and Paragraph 11.3 of China's Accession Protocol 
7.808  The United States and Mexico submit that China allocates export quotas on bauxite, fluorspar 
and silicon carbide
1163 through a quota bidding process, under which enterprises seeking to export 
must pay a bid-winning price, equal to the bid price multiplied by the bid quantity, for the right to export under the quota.  The United States and Mexico claim that the bid-winning price paid in 
                                                      
1159 Regulation on Import and Export Administration , Article 38 (Exhibits CHN-152, JE-73); Export 
Quota Administration Measures , Articles 9-11 (Exhibits CHN-312, JE-76). 
1160 Panel Report, EC – IT Products , para. 7.1026. 
1161 Panel Report, EC – IT Products , para. 7.1048. 
1162 China's response to Panel question No. 8 following the first substantive meeting para 37. 
1163 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-6 and para. 2.2 of  the Descriptive Part to these Reports.  WT/DS394/R 
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  connection with such quota allocation constitutes a "f ee" or "charge" "imposed ... on or in connection 
with ... exportation" that is not "limited in amount to the approximate cost of services rendered" and 
as such is inconsistent with Article VIII:1(a) of the GATT 1994.
1164  In addition, the United States and 
Mexico submit that the bid-winning price constitutes a "tax[]" or "charge[] applied to exports" within 
the meaning of Paragraph 11.3 of China's Accession Protocol.  Because bauxite, fluorspar and silicon 
carbide are not listed in Annex 6 of China's Acce ssion Protocol, they submit that the bid-winning 
price is also inconsistent with Para graph 11.3 of China's Accession Protocol. 
7.809  China requests the Panel to reject the complain ants' claims concerning the bid-winning price. 
First, China contends that it no longer subjects exports of fluorspar to a quota under the 2010 Export 
Licensing List Notice .1165  Accordingly, it requests the Panel not  to reach findings on fluorspar.  
Second, China alleges in its second written submi ssion that the United States and Mexico have 
abandoned their claim under Paragraph 11.3 and Annex 6 of China's Accession Protocol by failing to 
list this claim in response to a request by the Panel to identify all measures for which they are seeking 
recommendations.1166   
7.810  Notwithstanding these issues, China argues that th e bid-winning price is not a fee or charge 
"on or in connection with exportation" within the meaning of Article VIII:1(a)1167, nor is it a tax or 
charge "applied to exports" within the meaning of  Paragraph 11.3 of China's Accession Protocol.  
China argues that the WTO covered agreements do not prohibit bidding, nor prescribe a particular 
methodology for quota allocation, but only require that a Member administer its quota allocation 
system consistently with Articles X and XIII.1168  China submits that the bid-winning price reflects 
what a bid winners is willing to pay for the right to export a particular quantity.1169  In addition, China 
submits that a bid-winning system is the least  trade-distorting means of quota allocation.1170 
7.811  As a preliminary matter, the Panel recalls its fi nding in paragraph 7.33 a bove that, in general, 
measures that were in force when  the Panel was established on 21 December 2009 form the basis of 
its terms of reference.1171  At the request of the complainants, the Panel will only assess the WTO 
consistency of the 2009 measures while taking note  that the 2010 measures do not set a quota for 
fluorspar. 
7.812  Second, as correctly pointed out by China, the United States and Mexico did not list their 
claim under Paragraph 11.3 of China's Accession Protocol as concerns quota allocation when 
responding to a request by the Panel to id entify measures for wh ich they are seeking 
recommendations.1172  The United States and Mexico did, however, continue to argue their claim in 
the context of their own rebuttal submissions, suggesti ng that the omission of this claim in response to 
                                                      
1164 United States' first written submission, paras.  315-330; Mexico's first written submission, 
paras. 318-333. 
1165 China's first written submission, para. 578. 
1166 China's second written submission, paras. 397-399. 
1167 China's first written submission, para. 577. 
1168 China's first written submission, paras. 577, 594.   
1169 China's first written submission, para. 598. 
1170 China's first written submission, paras. 599-601;  China's comments on the complainants' responses 
to Panel question No. 6 following the first substantive meeting, para. 54; WTO, Special Study Series, Market 
Access: Unifnished Business – Post Uruguay Round Inventory and Issues (Geneva, 2001), p. 55 (Exhibit CHN-
303); China's Statement on Export Quota Auctions as Optimal Allocation Mechanisms (July 2010) (Exhibit 
CHN-306); US Department of Agriculture Publication, Economic Analysis of TRQ Administrative Methods 
(TB-1893), p. iv (Exhibit CHN-462). 
1171 The Panel observes, however, that its decision to assess the complainants' claims here does not 
foreclose the possibility of considering 2010 measures in other contexts. 
1172 Complainants' responses to Panel question No. 2 following the first substantive meeting. WT/DS394/R 
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  a question from the Panel was an oversight.  More over, the United States and Mexico identified the 
relevant measures and provision in their Panel Requ ests, and subsequently confirmed that they had 
not abandoned their claim in this regard.
1173  The Panel considers that the United States and Mexico 
did not intend to abandon this particular  claim, and will therefore consider it. 
7.813  Accordingly, the Panel will first set out China's system of allocation for export quotas for 
bauxite, fluorspar and silicon carbide through a quot a bidding process, and subsequently will assess 
the complainants' claims under Article VIII:1(a)  of the GATT 1994 and Paragraph 11.3 of China's 
Accession Protocol. 
(a) The allocation of export quotas through a quota bidding process 
7.814  In 2009, China allocated quotas for fluorspar, bauxite and silicon carbide through a bidding 
system.1174  The Panel recalls its description in Sectio n VII.C.2(b) above of how China awards a 
portion of the export quota as part of the bidding process in order to export. 
(b) Whether China's allocation of quotas on bauxite , fluorspar and silicon carbide based on the 
bid-winning price is inconsistent with Article VIII:1(a) of the GATT 1994 
Article VIII:1(a) of the GATT 1994 provides: 
 
"All fees and charges of whatever characte r (other than import and export duties and 
other than taxes within the purview of Article III) imposed by contracting parties on or in connection with importation or expor tation shall be limited in amount to the 
approximate cost of services rendered and shall not represent an indirect protection to 
domestic products or a taxation of im ports or exports for fiscal purposes." 
7.815  Article VIII:1(a) thus prohibits "all fees and ch arges of whatever character" (other than  
import and export duties, and taxes within the purview of Article III) that are "imposed on or in connection with exportation" and that  are not "limited in amount to the approximate cost of that 
service rendered".
1175  The Panel will first consider generally the meaning of these terms before 
considering whether the bid-winning price collected by China constitutes a "fee" or "charge" within 
the meaning of Article VIII:1(a).   
7.816  Article 3.2 of the DSU directs panels to cl arify the existing provisions of the covered 
agreements "in accordance with customary rules of interpretation of pub lic international law". 
Articles 31, 32 and 33 of the Vienna Convention  codify these customary rules.1176  Article 31 of the 
Vienna Convention states in particular that "[a] tr eaty shall be interpreted in good faith in accordance 
with the ordinary meaning to be given to the terms of  the treaty in their context and in the light of its 
object and purpose."  The Panel is bound to "give mean ing and effect to all terms of a treaty" and is 
                                                      
1173 Complainants' responses to Panel question No. 2 following the second substantive meeting. 
1174 2009 First Round Fluorspar Bidding Procedures  (Exhibit JE-93); 2009 First Round Bauxite 
Bidding Procedures  (Exhibit JE-94); 2009 First Round Silicon Carbide Bidding Procedures  (Exhibit JE-95); 
Quota Bidding Measures , Article 14 (Exhibit JE-77). 
1175 See GATT Panel Report, US – Customs User Fee , para. 69. 
1176 Appellate Body Report, US – Gasoline , p. 17, DSR 1996:I, 3, at pp. 15-16; Appellate Body Report, 
India – Patents (US) , para. 45; and Appellate Body Report, US – Shrimp , para. 114.  WT/DS394/R 
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  not "free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to 
redundancy or inutility."
1177   
(i) The ordinary meaning of the terms "fees" or "charges" in Article VIII:1(a) 
7.817  The United States and Mexico submit that the scope of Article VIII:1(a) was "enlarged" 
during negotiations.1178  The United States and Mexico argue that the language "in connection with" 
supports the view that the notion of "fees" in Article VIII:1(a) is "broad".1179  They further submit that 
the meaning of "fees" is informed by Article VIII:4,  which refers to "fees, charges, formalities, and 
requirements imposed by governmental aut horities in connection with ... exportation".1180   
7.818  China argues that Article VIII:1(a) does not a pply a "residual general prohibition on all fees 
and charges".1181  China considers that the text, broader context, negotiating history and surrounding 
circumstances demonstrate that the provision relat es to fees and formalities in connection with the 
processing  of customs entries applied at the border.1182  China argues that the phrase "of whatever 
character" was added to clarify the distincti on between "fees and charges" and "duties".1183  C h i n a  
argues that Article VIII applies to "fees, charges, formalities and requirements" specifically related to 
those items enumerated in Article VIII:4 that are "customs activities which the draftsmen meant when 
they referred to 'services' rendered".1184  China argues that this interpretation is supported by the 
reference to customs-related activities in Article VIII:3.1185  China finds further support for this 
interpretation in more recent discussions on Article VIII.1186   
The meaning of the terms "fees" and "charges" 
7.819  The Appellate Body has indicated that dictionaries may provide a "useful starting point" for 
the analysis of the "ordinary meaning" of a treaty term, although they are not necessarily 
dispositive.1187   
7.820  The Panel observes that the term "fee" is defi ned as "a fixed charge" or "a sum paid or 
charged for a service"1188, or "[a] recompense for an official or professional service or a charge or 
                                                      
1177 Appellate Body Report, US – Gasoline , p. 23 DSR 1996:I, 3, at p. 21.  See also Appellate Body 
Reports:  Japan – Alcoholic Beverages II , p. 12, DSR 1996:I, 97, p. 106;  Canada – Dairy , para. 133;  and US – 
Upland Cotton , para. 549. 
1178 United States' response to Panel question No. 6 following the first substantive meeting, para. 12; 
Mexico's response to Panel question No. 6 following the first substantive meeting. 
1179 United States' response to Panel question No. 6 following the first substantive meeting, paras. 9-10; 
Mexico's response to Panel question No. 6 following the first substantive meeting. 
1180 United States' first written submission, para. 319;  Mexico's first written submission, para. 322. 
1181 China's first written submission, para. 579-580;  China's second written submission, para. 386. 
1182 China's first written submission , paras. 586-588, referring to International Convention Relating to 
the Simplification of Customs Formalities , LNTS Volume 30 (1925), p. 372, done at Geneva on 3 November 
1923, Preamble, (Exhibit CHN-291); Suggested Charter for an International Trade Organization of the United 
Nations , Department of State (September 1946), Article s 13.1 and 13.4, (Exhibit CHN-292); GATT Negotiating 
Group on Non-Tariff Measures, Fees, Duties and Other Import Charges – Background Note by the Secretariat  
MTN.GNG/NG2/W/28 (1 May 1989), para. 3 (Exhibit CHN-293).   
1183 China's second written submission, para. 386. 
1184 China's first written submission, paras. 581-582, referring to GATT Panel Report, US – Customs 
User Fee , para. 76. 
1185 China's first written submission, para. 583.   
1186 See China's first written submission, paras. 589-590 and fns. 877-879. 
1187 Appellate Body Report, EC – Chicken Cuts , para. 175; Appellate Body Report,  US – Softwood 
Lumber IV , para. 59; Appellate Body Report, US – Offset Act (Byrd Amendment) , para. 248;  Appellate Body 
Report, US – Gambling , para. 166. WT/DS394/R 
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  emolument or compensation for a particular act or service".
1189  Definitions of "charge" include 
"pecuniary burden, cost", "expense", or "[a] pri ce required or demanded for service rendered or goods 
supplied".1190  These definitions in isolation do not provide the precise meaning of the terms as they 
appear in Article VIII:1(a).  Accordingly, the Pa nel will proceed with its analysis following the 
approach codified in the Vienna Convention , considering the terms "fees" and "charges" in their 
broader context and the object and purpose of the WTO Agreement. 
The terms "fees" and "charges" in the context of other terms in Article VIII and the 
WTO Agreement 
7.821  The terms "fees" and "charges" are modified by  the word "[a]ll", the phrase "of whatever 
character (other than import and export duties and ot her than taxes within the purview of Article III)" 
and by the phrase "imposed on or in connection with importation or exportation".  It is clear that the 
terms "all" and "of whatever character" suggest a broad scope of coverage for the terms "fees" and 
"charges".  The term "all" is defined as "the en tire number of ... without exception" in conjunction 
with plural nouns.1191  The term "whatever" is defined as "[ a]nything that", and "[n]o matter what".1192  
The term "character" is defined as "a feature, trait, characteristic" or nature, sort, style".1193  T h e  
parenthetical specific exception referring to "other than import and export duties" further suggests that 
a broad scope should be attributed to "fees" and "c harges".  In sum, Article VIII:1(a) refers to all fees 
and charges of whatever  character except duties or internal taxes of the kind under Article III of the 
GATT 1994.   
7.822  We note that Article VIII is entitled "Fees a nd Formalities connected with Importation and 
Exportation."  We also observe that the phrase "i mposed on or in connection with importation or 
exportation" further informs the meaning of the term s "fees" and "charges".  The term "impose" is 
defined as "put, apply, or bestow", "lay or inflict (a tax, duty, charge, obligation, etc.) (on or upon), 
esp. forcibly; compel  compliance with".1194  The term "on" is defined as "[d]uring, or at some time 
during (a specified day or part of day); contemporane ously with (an occasion)", "in or at", "exactly at 
or just coming up to (a specified time), just before or after in time", "on the occasion of (an 
action)".1195  The term "connection" is defined inter alia  as "[a] causal or logical relationship or 
association"1196, and "connect" as a transitive verb is defi ned as "associate in occurrence or action".1197  
                                                                                                                                                                     
1188 Merriam-Webster Online Dictionary . 
1189 Black's Law Dictionary , (Special Deluxe Fifth Edition), p. 553. 
1190 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 1, p. 382. 
1191 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol 1, p. 54. 
1192 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 3618. 
1193 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol 1, p. 381. 
1194 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol 1, p. 1331. 
1195 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 1996. 
1196 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol 1, p. 489. 
1197 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol 1, p. 489.  WT/DS394/R 
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  7.823  These terms indicate that Article VIII:1 refers to those fees or charges that are applied at the 
moment in time of exportation, or in association with  exportation.  The parties appear to agree that a 
broad temporal view is supported by th e language "on or in connection with".
1198   
7.824  Beyond temporal connotations, the phrase "on or in connection with ... exportation" may also 
mean that fees or charges that are associated with exportation, or that are linked or logically related to 
exportation, would fall within the scope of Article  VIII.  China argues, however, that the "fee or 
charge" must be "imposed" by the government.1199 
7.825  The meaning of "imposed on or in connecti on with" or associated with importation or 
exportation is further informed by the remaining text of Article VIII:1(a).  In particular, 
Article VIII:1(a) provides that those fees or charges that fall within the scope of Article VIII:1(a) must 
be "limited in amount to the approximate cost of services rendered".   
7.826  The term "service" is defined as "the action of serving, helping, or benefiting another; 
behaviour conducive to the welfare or advantage of another", "assistance or benefit provided to 
someone by a person or thing" or "the organized syst em of providing labour, equipment, etc., to meet 
a public need such as health or communications."1200  In the Panel's view, the term "service" and the 
term "service rendered" do not in themselves provide  guidance on the interpretation to be given "fees" 
or "charges" as used in Article VIII:1(a). 
7.827  The Panel will therefore consider other availa ble interpretative elements to inform its 
interpretation.  In particular, we observe that th e surrounding provisions (or context) in Article VIII 
emphasize formal, documentary and procedural requi rements that may arise on or in connection with 
exportation.  In this respect, Article VIII:1(c) r eads: "[WTO Members] also  recognize the need for 
minimizing the incidence and complexity of im port and export formalities and for decreasing and 
simplifying import and export documentation requ irements."  Article VIII:3 reads: "No [WTO 
Member] shall impose substantial penalties for minor  breaches of customs regulations or procedural 
requirements. In particular, no penalty in r espect of any omission or mistake in customs 
documentation which is easily rectifiable and obvi ously made without fraudulent intent or gross 
negligence shall be greater than necessar y to serve merely as a warning."   
7.828  In addition, Article VIII:4 provides:  
"The provisions of this Article shall extend to fees, charges, formalities and 
requirements imposed by governmental aut horities in connection with importation 
and exportation, including those relating to: 
(a) consular transactions, such as consular invoices and 
certificates; 
                                                      
1198 For instance, referring to the Panel Report on China – Auto Parts , the complainants consider that 
the phrase "imposed on or in conn ection with" indicates a broader tempor al scope than the exact moment of 
border crossing (complainants' response to Panel question No. 6).  In discussing the distinction between an 
ordinary customs duty applied at the border and an internal charge, the panel in China – Auto Parts concluded 
that a "broad scope" was intended for the phrase "on or in connection with ...", arguing that otherwise, different 
GATT provisions would have only used the terms "on" or "on or in connection with ...", but not both phrases.  
(Panel Report, China – Auto Parts , para. 7.177).  The Appellate Body did not dispute this conclusion, 
explaining that "the moment at which a charge is collected or paid is not determinative of whether it is an 
ordinary customs duty or an internal charge." (Appellate Body Report, China – Auto Parts , para. 158). 
1199 China's closing oral statement at the second substantive meeting, para. 9. 
1200 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 2768. WT/DS394/R 
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  (b) quantitative restrictions; 
(c) licensing; (d) exchange control; 
(e) statistical services; 
(f) documents, documentation and certification; (g) analysis and inspection; and (h) quarantine, sanitation and fumigation." 
7.829  Many of the activities listed in Article VIII:4 refe r to customs-related activities that take place 
at the border, such as fulfilment of documentary requirements, certification and inspection services, as 
well as matters related to sanitary activities, statistical surveillance and exchange services. 
7.830  The complainants put emphasis on the reference in  Article VIII:4 to "quantitative restrictions" 
and "licensing" in making their point that all fees or  charges connected to export restraints or licence 
fees are prohibited.  We disagree.  In the Panel's view, meaning must be given to the language "in 
connection with ... exportation" and thus, not each and every fee, charge, formality and requirement 
associated with quantitative restrictions or export li censing fall within the scope of Article VIII.  By 
the very terms of Article VIII:4, only "fees, charges, formalities or requirements imposed ... in connection with ... exportation" are covered.  The Pa nel observes that such fees or charges must be 
collected in exchange for a "service rendered", and approximate the cost of that "service", to fall 
within the scope of Article VIII:1(a).  These conditi ons indicate that not all types of fees and charges 
are prohibited.  In particular, those fees or charges that are not imposed in connection with 
importation or exportation, and, if they are imposed  in connection with impor tation or exportation, 
those that approximate the cost of a service rendered would, not fall within the scope of 
Article VIII:1(a) regardless of their nature.  In other words, "fees, charges, formalities and 
requirements" that relate to quantitative restricti ons or licensing would not necessarily be prohibited.  
Accordingly, some, but not all, fees, charges, fo rmalities or requirements that relate to quantitative 
restrictions or licensing could fall within the scope of  Article VIII.  As such, the Panel considers that 
its analysis must focus on whether a fee or charge  is imposed on or in connection with exportation, 
and, if so, whether it approximates the cost of a service rendered. 
7.831  The Panel notes that a quantitative restriction (quota,  ban, licence requirement or other type of 
"restriction") may be WTO-inconsistent under Ar ticle XI:1 of the GATT 1994.  Thus it seems 
appropriate to construe Article VIII as regulati ng something different from that addressed by GATT 
Article XI:1.  The Panel understands Article VIII to address more narrowly those fees, charges, 
formalities and requirements – such as those rela ting to quantitative restrictions or licensing 
requirements – that are imposed on or in connection with importation or exportation. 
7.832  Therefore, based on an assessment of the terms in Article VIII:1(a) and the context of 
Article VIII:4, the Panel concludes preliminarily th at the meaning of "fees" or "charges" that fall 
within the scope of Article VIII is broad, includi ng "all" fees or charges "of whatever character".  
However, not all fees or charges are covered.  In the Panel's view, Article VIII, including both 
Article VIII:1(a) and Article VIII:4, is limited in a pplication to those types of fees or charges imposed 
"on or in connection with importation or exportation" .  These typically include specific fees, charges, 
formalities or requirements, associated with cu stoms-related documentation, certification and 
inspection, and statistical matters.  This conclusion is consistent with that reached by the GATT panel  WT/DS394/R 
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  on US – Customs User Fee , namely that the drafters intended the term "services" to refer to 
"government activities closely enough connect ed to the processes of customs entry".
1201 
7.833  The Panel recalls that the provisions of a treaty sh ould be interpreted in light of the object and 
purpose of the treaty being interpreted.  The Pane l noted above that Article XI:1 of the GATT 1994 
imposes express obligations on WTO Members pertaining to their use of quantitative restrictions or 
restrictive import or export licensing requirements.  In  light of this general approach in Article XI:1, 
and in the absence of any indication that Article  VIII should be construe d differently from the 
approach adopted by the Panel above , the Panel considers that its inte rpretation of Article VIII:1(a) is 
consistent with the object and purpose of the WTO Agreement.   
Other interpretative elements 
7.834  Article 31(2) of the Vienna Convention indicates that context for the purpose of treaty 
interpretation may include, in addition to the text of the treaty under interpretation, agreements or 
instruments made in connection with the conclusion of  the treaty.  By virtue of Article 31(3), a treaty 
interpreter may also consider any subsequent  agreement between the parties regarding the 
interpretation of the treaty, subsequent practice in  the application of the treaty, or any relevant 
applicable rules of international law applicable in  the relations between the parties.  Finally, under 
Article 32 of the Vienna Convention, a treaty inte rpreter may resort to supplementary means of 
interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, to 
confirm the meaning of the provision resulting from th e application of Article 31, or to determine the 
meaning of a provision when interpretation leaves th e meaning ambiguous or obscure or leads to an 
absurd or unreasonable result. 
7.835  The United States and Mexico submit that the la nguage of Article VIII was "enlarged" during 
negotiations, and that the Panel's interpreta tion should reflect this "enlarged" scope.1202   
7.836  China argues that certain documents precedi ng the conclusion of the GATT in 1947 confirm 
that Article VIII was intended to address only customs -related matters.  In particular, as did the Panel 
in US – Customs User Fee1203, China refers to the International Convention Relating to the 
Simplification of Customs Formalities1204 and the Suggested Charter for an International Trade 
Organization of the United Nations1205.  China submits that, during negotiations for the GATT 1947, 
the United States proposed to include a provision in  Article VIII:1(a) of the GATT 1994 referring to 
"fees, charges, formalities and requirements relating to all customs  matters".1206  In addition, China 
refers to a 1989 background note of the GATT Negotiating Group on Non-Tariff Measures1207 noting 
examples of charges for services rendered that are imposed in connection with imports, including port 
                                                      
1201 GATT Panel Report, US – Customs User Fee , para. 77 ("It must be presumed, therefore, that the 
drafters meant the term 'services' to be used in a more artful political sense, i.e., government activities closely 
enough connected to the processes of customs entry that they might, with no more than the customary artistic 
licence accorded to taxing authorities, be calle d a 'service' to the im porter in question."). 
1202 United States' response to Panel question No. 6 following the first substantive meeting, para. 12; 
Mexico's response to Panel question No. 6 following the first substantive meeting. 
1203 GATT Panel Report, US – Customs User Fee , paras. 71, 75. 
1204 International Convention Relating to the Simplification of Customs Formalities , LNTS Volume 30 
(1925), p. 372, done at Geneva on 3 November 1923, Preamble, (Exhibit CHN-291). 
1205 Suggested Charter for an International Trade Organization of the United Nations , Department of 
State (September 1946), Articles 13.1 and 13.4 (Exhibit CHN-292). 
1206 Suggested Charter for an International Trade Organization of the United Nations , Department of 
State (September 1946), Articles 13.1 and 13.4 (emphasis added) (Exhibit CHN-292). 
1207 GATT Negotiating Group on Non-Tariff Measures, Fees, Duties and Other Import Charges – 
Background Note by the Secretariat  MTN.GNG/NG2/W/28 (1 May 1989), para. 3 (Exhibit CHN-293). WT/DS394/R 
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  taxes, port improvement taxes, warehousing taxes,  sanitary and phytosanitary taxes, customs user 
fees, and statistical taxes. 
7.837  The Panel does not consider an Article 32 analys is is required in light of its conclusions 
above.  However, even if it were, the 1923 International Convention Relating to the Simplification of 
Customs Formalities had as one of its major purposes the reduction of the number and level of fees 
imposed in connection with importation or exportation, as well as the simplification of customs-related laws, regulations and formalities.
1208  No reference is made to systems or methods of quota or 
licensing allocation, other than that such allocation must be equitable.1209  As noted by China, the 
Suggested Charter for an International Trade Organization of the United Nations designates fees, 
charges, formalities and requirements "relating to all customs  matters".  The list of charges discussed 
in the Background Note of the GATT Negotiating Group on Non-Tariff Measures refers to customs 
user fees, but is not exhaustive.   
7.838  In sum, these documents lead to a view that is  consistent with the Panel's analysis above.  
These documents reflect that customs-related activ ities were a concern of participants in these 
discussions.  The Panel sees no contradiction betw een these documents and the conclusions reached 
through the preceding analysis under Article 31 of th e ordinary meaning of Article VIII:1(a), read in 
its context and in light of the object and purpose of the WTO Agreement.  Accordingly, the Panel 
confirms its preliminary conclusion set out above.  
Preliminary conclusions: The ordinary meaning of  "fees" and "charges" in Article VIII:1(a) of 
the GATT 1994 
7.839  In accordance with its interpretation set out above , the Panel concludes that Article VIII:1(a) 
applies to fees and charges imposed "on or in connection with importati on or exportation" and 
requires that such fees and charges are solely app lied in exchange for a "service rendered".  As such 
fees, charges, formalities or requirements that ar e typically imposed when providing customs-related 
documentation, certification and inspection, and statis tical matters are covered.  Having so concluded, 
the Panel will next assess whether the bid-winning price collected by China in connection with quota 
allocation constitutes a "fee or charge of whatever  character ... imposed ... in connection with ... 
exportation" within the meaning of Article VIII:1(a).   
(ii) Whether the bid-winning price constitutes a fee or charge within the meaning of 
Article VIII:1(a) of the GATT 1994 
7.840  The Panel must next evaluate whether the bid- winning price collected by China in connection 
with quota allocation constitutes a "fee or charge of  whatever character ... imposed ... in connection 
with ... exportation" within the meaning of Article VIII:1(a) as discussed above. 
7.841  The United States and Mexico argue that in light of the explicit reference to "fees and 
charges" relating to "quantitative restrictions" and "licensing" in Article VIII:4, the bid-winning price 
is such a fee, because China's export quotas restrict the quantity of exports of bauxite, fluorspar and 
silicon carbide, and because the payment of the bid-wi nning price is necessary in order to receive an 
export licence.1210   
                                                      
1208 See, e.g., International Convention Relating to the Simplification of Customs Formalities , LNTS 
Volume 30 (1925), p. 372, done at Geneva on 3 November 1923, Articles 10, 11(8) and 12 (Exhibit CHN-291). 
1209 Article 3(e). 
1210 United States' first written submission, para. 323;  Mexico's first written submission, para. 326.  WT/DS394/R 
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  7.842  China argues that the bid-winning price is not "imposed" "in connection with" exportation.  
First, it argues that the bid-winning price is also not a "fee or charge" "imposed" by the government.  
The price reflects the value that a bidder has chosen to attach to the right to export.
1211   In addition, 
China argues that the bidding process takes pla ce well before exporters have made binding 
commitments to export and has a different purpose: that of allocating the limited right to export.  Therefore, China argues that the bid-winning fee is  not connected with any of the customs-related 
activities that would fall within the scope of Artic le VIII:1(a).  Only after this bidding process, it 
argues, can successful applicants en ter sales contracts and make commitments to export and thereafter 
present goods at the border for exportation.  Chin a emphasizes that a winning bidder may ultimately 
decide not to export the product.
1212   
7.843  China additionally argues that auctions are one  of the least trade-distorting means of quota 
allocation, and do not affect the price of exports in the market.  In add ition, China submits that 
Article XIII:2 of the GATT 1994 "stipulates a principle regarding the distribution of the tariff quota in 
the least trade-distorting manner".1213  China therefore considers that Article VIII cannot be read in 
such a manner to prohibit the allocation of quotas thr ough bidding.  Finally, China contends that the 
United States both authorizes the use of quota allocation through auctions1214 and permits trading 
partners to allocate quotas through auctions.1215  
7.844  The Panel concluded above that the meaning of "fees" or "charges" that fall within the scope 
of Article VIII is broad.  Notwithstanding this vi ew, the Panel concluded further that only fees 
imposed "on or in connection with importation or  exportation" and collected in exchange for a 
"service rendered" may be considered as falling with in the scope of Article VIII:1(a).  The Panel 
noted that typically such fees or charges woul d include payments provided for customs-related 
documentary, certification and inspec tion, and statistical activities. 
7.845  In the Panel's view, the bid-winning price co llected by China in connection with quota 
allocation is not a fee or charge imposed on or in connection with exportation, or imposed in 
exchange for a service rendered.  Although payment of a bid-winning price is necessary to receive a quota allocation for products subject to a quota bidding regime in China, this fact alone does not mean 
that a bid-winning price is a fee or charge imposed in connection with exportatio n under Article VIII.   
7.846  As explained above, a quantitative restriction or a licensing requirement of the kind at issue in 
this case does not on its own amount to a fee or charge  within the meaning of Article VIII:1(a).  As 
noted above, quantitative restrictions and licensi ng requirements are regu lated generally under 
Article XI:1 of the GATT 1994.  Under Article V III, fees or charges imposed in connection with 
exportation must involve a service re ndered, and must be limited in am ount to the approximate cost of 
services rendered.  If one or more of these require ments are missing, Article VIII does not apply. 
7.847  As pointed out by China, under the measures discussed in paragraphs 7.188 to 7.198 above, 
the bid-winning price is initially a proposal submitted by an enterprise.  The actual price is determined 
and assigned to the applicant enterprise at a point well before the exporter enters into a binding 
commitment to export the good subject to a quota.  I ndeed, an enterprise that is awarded a portion of 
                                                      
1211 See, e.g., China's first written s ubmission, para. 591. China's closing oral statement at the second 
substantive meeting, para. 9. 
1212 China's first written submission, para. 591; China's closing oral statement at the second substantive 
meeting, para. 7. 
1213 China's closing oral statement at the second substantive meeting, para. 8, citing Appellate Body 
Report, EC – Bananas III (21.5 – US) , para. 338. 
1214 China's second written submission, paras. 388-394. 
1215 China's second written submission, para. 395. WT/DS394/R 
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  the quota may decide to export less or none of the allocated quota, if it desires.
1216  The precise 
moment when an enterprise will export under the assigne d quota allocation, or whether that enterprise 
will export at all, is not known or contemplated at  the time the bidding price is determined.  In the 
Panel's view, this type of arrangement does not amo unt to the imposition of a fee or charge on or in 
connection with exportation. 
7.848  In addition, the bidding process and collection of a bid-winning price is much different in 
nature from a customs-related service supplied in exch ange for a particular fee or charge.  The bid-
winning price reflects the value that a potential exporter attributes to the right to export the product at 
some point in the future.   
7.849  Thus, the bid-winning fee is a price offered in e xpectation of a future return.  This is also 
conceptually different from a tariff, fee, or char ge that affects the volume of trade or the export 
price.1217  In contrast to a tariff, fee or charge that may have distortive effects on the price of exported 
goods, a bid-winning price approach generally allows a more efficient allocation of quotas than would 
be possible through quota allocation based on re quest, or based on historical quota allocation 
proportions, or on some arbitrary basis.  Where quotas are allocated through bidding, the most efficient enterprises capable of earning a higher return  per unit sold – the difference between the price 
received from exporting the good and the cost to produce and export the good – are willing to pay a higher price for the ability to export.
1218  The bidding process described above determines the 
enterprises that will be permitted to export, but it doe s not affect the price ultimately received by the 
seller for the goods.  Rather it is the total volume permitted for export that generally will determine 
the export price in the market. 
7.850  Finally, it is clear that the assessed bid-winni ng price is not in any way related to the 
approximate cost of a service rendered.  This is  because enterprises that choose to participate in a 
particular bidding process have the right to submit  any bid price or bid quantity they wish when 
seeking to obtain an allocation of the export quot a for the raw materials under discussion.  Receiving 
the desired allocation does not depend directly on the bid price or quantity submitted; rather, it is 
dependent on the bid prices and amounts submitted by ot her applicant enterprises.  While a particular 
bidding enterprise generally would not be willing to pay more than the full amount of economic rent it 
is able to earn through exportation, it almost certai nly will be willing to pay less. In sum, the bid price 
necessarily will vary, depending on the particular  circumstances involved and therefore cannot be 
related to any particular service that may be rendere d.  By their very nature, prices submitted through 
bidding are variable, which would always violate the requirement in Article VIII:1(a) that fees must approximate the cost of a particular service rendered – in this case, the allocation of a quota.   
(iii) Conclusions on the complainants' Article VIII:1(a) claim 
7.851  For the foregoing reasons, the Panel concludes that the bid-winning price collected by China 
in connection with quota allocation does not constitu te a "fee or charge of whatever character ... 
imposed ... in connection with ... expor tation" within the meaning of Ar ticle VIII:1(a).  In particular, 
the Panel finds that the collection of the bid-winning prices does not amount to the imposition of a fee 
                                                      
1216 Implementation Rules on Export Quota Bidding of Industrial Products , Article 21 (Exhibit CHN-
305); Quota Bidding Implementation Rules , Article 23 (Exhibit JE-78). 
1217 See China's first written submission, paras. 600-601. 
1218 See China's Statement on Export Quota Auctions as Optimal Allocation Mechanisms (July 2010) 
(Exhibit CHN-306); see also USDA, Economic Analysis of TRQ Administrative Methods (TB-1893) (Exhibit 
CHN-463).  WT/DS394/R 
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  or charge on or in c onnection with exportation.
1219  Finally, we observe that  a finding otherwise would 
mean that all quota allocation through bidding or auctioning would be prohibited.     
(c) Whether China's allocation of quotas on bauxite , fluorspar and silicon carbide based on the 
bid-winning price is inconsistent with Para graph 11.3 and Annex 6 of China's Accession 
Protocol 
7.852  In addition to their claims under Article VIII: 1(a), the United States and Mexico argue that 
the bid-winning price is a tax or charge applied to e xports that is inconsistent  with Paragraph 11.3 and 
Annex 6 of China's Accession Protocol.  The Unite d States and Mexico submit that the bid-winning 
price is a government set price, the payment of which is required in order to obtain a certificate for a 
licence application.1220  They argue that none of the products subject to export quota bidding 
requirements is listed in Annex 6.  Moreover, they assert, as above, that the bid-winning price is not in 
conformity with Article VIII, thereby resulting in an express breach of the text of Paragraph 11.3.1221 
7.853  China argues that the United States and Mexico ha ve failed to demonstrate that a bid-winning 
price is a "tax" or "charge" that is "applied to e xports" within the meaning of Paragraph 11.3, namely 
an export duty based on an ad valorem  percentage.  In contrast to the United States and Mexico, 
China argues that the bid-winning price merely refl ects the bid-winning exporters' expectations about 
the value of exports of a particular quantity of goo ds.  In addition, China argues that the bid-winning 
price is not "applied to exports" because liability is not incurred at the time of border crossing.1222 
7.854  The scope and meaning of Paragraph 11.3 has been addressed above in VII.B.5 above in a 
different context.  Here, the Panel must consider  whether the bid-winning price requirement discussed 
above is inconsistent with Paragr aph 11.3, which explicitly allows Ch ina to maintain – independently 
to the disciplines imposed on export duties – "charges " applied consistently wi th Annex 6 of China's 
Accession Protocol and Article VIII of the GATT 1994. 
7.855  To recall, Part I, Section 11 of China's Accession Protocol contains China's binding 
commitments on taxes and charges levied on imports  and exports. Part I, Paragraph 11.3 states: 
"China shall eliminate all taxes and char ges applied to exports unless specifically 
provided for in Annex 6 of this Protocol or applied in conformity with the provisions 
of Article VIII of the GATT 1994."1223 
7.856  Annex 6 of China's Accession Protocol is a list of 84 products, each listed sequentially by HS 
number and accompanied by a description of the product and an export duty rate listed as an ad 
valorem  percentage.1224 
7.857  As discussed above, the Panel will interpret the m eaning of this provision in accordance with 
the customary rules of interpretation c odified in Articles 31 to 33 of the Vienna Convention .  We 
begin with the ordinary meaning to be given to the terms of the provision in their context and in the light of the object and purpose of the treaty.   
                                                      
1219 The Panel notes that this method of allocation is economically desirable and is not otherwise 
prohibited under the GATT 1994 or WTO Agreement. 
1220 United States' second written submission, para. 373; Mexico's second written submission, 
para. 378. 
1221 United State's first written submission, para. 330;  Mexico's first written submission, para. 333. 
1222 China's first written submission, paras. 603-605. 
1223 Exhibit JE-2. 
1224 Exhibit JE-2. WT/DS394/R 
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  7.858  The Panel recalls that from para graph 7.820 above, that definitions  of "charge" in isolation do 
not provide a precise indication of the terms as they appear in Article VIII:1(a).  As above, it is thus 
necessary to consider the meaning of "charges" in  its context and the object and purpose of the WTO 
Agreement.   
7.859  Despite differences in the text of Paragra ph 11.3 and Article VIII:1(a), the thrust of 
Paragraph 11.3 appears to be the same as that in Article VIII:1(a).  Specifically, Paragraph 11.3 
prohibits any "charges applie d to exports" unless they are expressly allowed under Annex 6 or 
otherwise in conformity with Article VIII of the GATT 1994.  A bid-winning price is clearly not an 
ad valorem  duty that is applied to exports, and therefore may not be justified on the basis of Annex 6.  
The Panel recalls its finding above that the collection of the bid-winning prices does not amount to the imposition of a fee or charge on or in connec tion with exportation within the meaning of 
Article VIII:1(a) of the GATT 1994.  For purp oses of its assessment here, the Panel sees no 
distinction that should be made be tween "charges applied to exports"  and "fees or charges imposed ... 
on or in connection with ... exportation".  Moreov er, the express reference to Article VIII ("in 
conformity with the provisions of Article VIII of  the GATT 1994") confirms that Members and China 
had in mind the type of charges referred to in Article VIII when drafting Paragraph 11.3.    
7.860  In light of the wording of Paragraph 11.3 and the express reference to Article VIII, and the 
Panel's findings on the bid-winning price in respect of the complainants' claim under Article VIII, the 
Panel concludes that the bid-winning price is not a "c harge[] applied to exports" that falls within the 
scope of Paragraph 11.3 of China's Accession Protocol. 
(d) Summary 
7.861  The Panel concludes that the bid-winning price collected by China in connection with quota 
allocation does not constitute a "fee or charge of wh atever character ... imposed ... in connection with 
... exportation" within the meaning of Article VIII:1( a) because the collection of the bid-winning price 
does not amount to the imposition of a fee or charge  on or in connection with exportation.  Nor does 
the bid-winning price approximate the cost of a servi ce rendered as required by Article VIII:1(a)  The 
Panel also concludes that a bid-winning price is not  a "charge[] applied to exports" that falls within 
the scope of Paragraph 11.3 of China's Accession Pr otocol.  Therefore, the Panel concludes that 
China's allocation of quotas on bauxite, fluorspar a nd silicon carbide based on the bid-winning price is 
not inconsistent with Article VIII:1(a) of th e GATT 1994 or Paragraph 11.3 of China's Accession 
Protocol. 
F. E
XPORT LICENSING  
7.862  The complainants have raised several cha llenges to China's export licensing framework 
through which China administers exports of forms of manganese and zinc and through which China 
administers exports quotas on forms of bauxite, coke , fluorspar, silicon carbide and certain forms of 
zinc.1225   
7.863  The complainants submit that China's export li censing requirement for these raw materials is 
"non-automatic" and amounts to a restriction on expor tation additional to the restriction effected by 
export quotas themselves.  That additional restriction, they argue, is inconsistent with Article XI:1 of 
the GATT 1994.   
                                                      
1225 The specific forms of the raw materials subject to the United States' and Mexico's claims are 
identified in Exhibit JE-6 and paragraph 2.2 of the Descriptive Part to these Reports.  WT/DS394/R 
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  7.864  The United States and Mexico submit that China restricts the exportation of the raw materials 
at issue through an export licensing system that is "non-automatic" in "nature".
1226  They submit that 
China has itself conceded that its export licensing system amounts to an export restriction under 
GATT Article XI:1.1227  The European Union submits that Chin a's export licensing system as set forth 
in relevant measures is "non-automatic by law"1228 and is therefore inconsistent with Article XI:1. 
7.865  The complainants submit that China's export licensing system is also inconsistent with 
Article XI:1 because it provides China's export licensing agencies with discretion to restrict 
exportation of the raw materials at issue.   
7.866  The United States and Mexico assert that Chin a's export licensing system "provides China 
with the authority, the ability and the discretion to  control and restrict the exportation of the subject 
products."1229  They argue that licensing agencies may exercise discretion to set the quantities of 
goods that can be exported, the price at which produc ts can be exported, and the qualifications that 
exporters must possess; moreover, they can impos e other conditions, such as requiring "undefined 
'documents of approval' and 'other materials to be submitted' as bas es for issuance of export 
licences".1230   
7.867  The European Union argues that China's export licensing system "allows China's authorities a 
very broad and unfettered discre tion on whether to grant or refuse export licences to applicants".1231  It 
submits that there is no limitation on the discretion on the part of the Ministry of Commerce to require 
undefined "other documents"1232 or "documents of approval"1233, which allows China's export licence 
agencies to restrict, or altogether ban, exportation by certain companies.1234 
7.868  In its first written submission, the European Union additionally argued that China's licence 
issuing authorities could restrict or prohibit the expo rtation of the raw materials at issue by exercising 
discretion to interpret undefined "managemen t qualifications" in a discriminatory fashion.1235  In 
response, China contested the Eur opean Union's translation of the term, arguing the term should be 
translated as "business qualifications".1236  In addition, China subm itted that its licence issuing 
authorities have no discretion whatsoever in interpre ting the meaning of this term and explained that 
applicants must simply submit one of the documen ts set out in Article 6 of the Working Rules on 
                                                      
1226 United States' first written submission, paras. 338-339, 342. 
1227 United States' second written su bmission, para. 378 and Mexico's second written submission, 
para. 383, referring to Committee on Market Access, Note by the Secretariat: No tifications of Quantitative 
Restrictions G/MA/NTM/QR/1Add.11 (11 April 2008) (Exhibit JE-171) and Catalogue of Products Subject to 
Export (Quota) License (2007 QRs of China final) (Exhibit JE-172). 
1228 European Union's first written submission, para. 317. 
1229 United States' oral statement at the second substa ntive meeting, para. 122;  see also United States' 
second written submission, para. 377; Mexico's second written submission, para. 382 (stating that "the licensing 
system provides China with the authority and the ability to control and restrict, i.e., impose limiting conditions, 
on products designated for export restriction"). 
1230 United States' first written submission, para. 34 0, fn. 415; Mexico's first written submission, 
para. 343, fn. 415. 
1231 European Union's first written submission, para. 319. 
1232 European Union's first written submission, para. 319; 2008 Export License Administration 
Measures , Article 11 (Exhibits CHN-342, JE-74); 2008 Export Licensing Working Rules (Exhibits CHN-344, 
JE-97). 
1233 European Union's first written submission, para. 321; 2008 Export License Administration 
Measures , Article 11 (Exhibits CHN-342, JE-74). 
1234 European Union's first written submission, paras. 319, 321. 
1235 European Union's first written submission, para. 320, referring to 2008 Export Licensing Working 
Rules , Article 8. 
1236 China's first written submission, para. 786. WT/DS394/R 
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  Issuing Export Licences once a year to show that the applicant is qualified and registered to do 
business in China.
1237  Following China's explanation, the Eur opean Union indicated that it "accepts" 
China's "official declaration" in Exhibit CHN-345 that the fulfilment of the "business qualifications" 
condition simply requires "submission of the appli cants' Business Licence and the certificate showing 
that the applicants are authorised to engage in import and export trade".1238  (The European Union 
maintains, however, that China h as acted inconsistently with GATT Article X:1 by failing to publish 
the "method of verification of the 'business qualifications' criteria"1239).  In light of further clarification 
by the European Union of its Article XI:1 claim, and in light of the Panel's determination that the 
European Union's Article X:1 claim in  respect of export licensing is out side its terms of reference, the 
Panel will not consider further the European Uni on's claim in connection with the requirement to 
demonstrate "business qualifications" in Article 8 of the Working Rules on Issuing Export Licences. 
7.869  In addition to their claims under GATT Artic le XI:1, the complainants submit that 
requirements imposed under this export licensing sy stem are inconsistent with paragraphs 162 and 
165 of China's Working Party Report.  They argue  that these paragraphs contain "enforceable 
commitments"1240 and prohibit China's imposition of "non- automatic export licensing and export 
restrictions" that are not justified.1241 
7.870  The European Union further contends that Ch ina's export licensing system is inconsistent 
with paragraphs 5.1 and 1.2 of China's Accession Protocol, read in  combination with paragraphs 83 
and 84 of China's Working Party Report.  The Eu ropean Union submits that, under these provisions, 
China is required to grant the right to export to a ll enterprises in China, incl uding foreign ones, and to 
eliminate its system of examination and approval of enterprises' rights to export.  The European Union 
submits that the discretion by China's licence issu ing authorities to refuse to grant export licences is 
tantamount to a system of examination and approval of trading rights.1242 
7.871  Finally, the European Union claims in the alte rnative that China failed to publish regulations 
and rulings connected with the administration of its export licensing system in contravention of 
GATT Article X:1, and that China administers its export licensing system in a manner inconsistent with GATT Article X:3(a).  The Panel determined , however, in Section VII.A.3 above, that the 
European Union's alternative claims under Articles X:1 and X:3(a) are not in the Panel's terms of 
reference.   
7.872  China requests the Panel to reject the complain ants' claims.  First, China argues that it no 
longer subjects exports of fluorsp ar to an export quota under the  2010 Export Licensing Catalogue; 
hence, it argues that the Panel should not consider the complainants' claims in respect of fluorspar.
1243   
7.873  China also contends the its export licensing ag encies may not exercise discretion to refuse an 
export licence application for forms of bauxite, coke, fluorspar, manganese, silicon carbide and zinc at 
issue, when the requisite application and documents  are submitted.  China argues that in all cases 
export licensing authorities "automatically" grant export licences within three days following 
                                                      
1237 China's first written submission, paras. 786-787. 
1238 European Union's second written submission, para. 87; European Union's response to the Panel 
question No. 59 following the second substantive meeting paras. 81-83. 
1239 European Union's response to the Panel question No. 59, following the second substantive meeting 
para 83. 
1240 United States' first written submission, para. 343;  Mexico's first written submission, para. 346. 
1241 United States' first written submission, paras. 34 5-346; European Union's first written submission, 
paras. 323-324; Mexico's first written submission, paras. 348-349. 
1242 European Union's first written submission, paras. 334-336. 
1243 China's first written submission, para. 67.  WT/DS394/R 
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  submission of a valid application and specified documents.
1244  Accordingly, China argues that its 
export licensing system does not restrict exportation in  a manner inconsistent with either Article XI:1 
of the GATT 1994 or any obligations in paragraphs 5.1 and 1.2 of Ch ina's Accession Protocol, or with 
paragraphs 83 and 84, or  162 and 165 of China's Working Party Report. 
7.874  If the Panel were to find China's export licence requirement inconsistent  with Article XI:1, 
China requests that the Panel exercise judicial econo my with respect to the complainants' remaining 
claims under its Accession Protocol and Working Part y Report.  China considers that these claims are 
"identical" to those under Article XI:1 and subm its that findings under these provisions "would add 
nothing to the resolution of this dispute, nor  would it aid in any potential implementation."1245   
7.875  In addition, China asserts that the United States and Mexico have abandoned their claims that 
China's export licence requirement is inconsistent with paragraphs 162 and 165 of its Working Party 
Report by failing to identify these pr ovisions when asked by the Panel to list "all measures relevant to 
this dispute for which they are se eking 'recommendations' from the Panel".1246   
7.876  As a preliminary matter, the Panel recalls its fi nding in paragraph 7.33 a bove that, in general, 
measures that were in force when  the Panel was established on 21 December 2009 form the basis of 
its terms of reference.1247  At the request of the complainants, the Panel will only assess the WTO 
consistency of the 2009 measures while taking note  that the 2010 measures do not set a quota for 
fluorspar. 
7.877  Before turning to an analysis of the parties' claims, the Panel wishes to address first China's 
contention that the United States and Mexico abandone d their claims with respect to paragraphs 162 
and 165 of China's Working Party Report, mentioned above.  The Panel observes that China is correct 
in that the United States and Mexico did not list their claims under paragraphs 162 and 165 of China's 
Working Party Report when identifying, in response to the Panel's request, the measures and claims 
for which they are seeking recommendations.1248  The United States and Mexico did, however, 
identify these provisions in their Panel Requests. Th ey also addressed these claims in their first 
written submissions.  In addition, the United States submitted Exhibit US-1 during the second substantive meeting of the parties, which refers to paragraphs 162 and 165 in  connection with export 
licensing.  In our view, the United States and Mexi co have governed themselves in the course of these 
proceedings as if these claims were very much active ones, and we do not consider them as abandoned.  The more appropriate conclusion is therefore, that the omission of these claims in 
response to a question from the Panel was merely an  oversight. The Panel accordingly concludes that 
the United States and Mexico did not intend to aband on their claims with respect to Paragraphs 162 
and 165 of China's Working Party Report, and accordingly will consider these claims below. 
7.878  The Panel will first set out its understanding of  the operation of China's export licensing 
systems for the raw materials at issu e  It will then analyze the claims of the parties.  Finally the Panel 
will address, as relevant, China's request that the Panel exercise judicial economy with respect to 
claims under China's Accession Protocol and Working Party Report. 
                                                      
1244 China's first written submission, paras. 771, 77 6; China's second written submission, para. 499. 
1245 China's first written submission, paras. 808, 881. 
1246 China's second written submission, paras. 477-478. 
1247 The Panel observes, however, that its decision to assess the complainants' claims here does not 
foreclose the possibility of considering 2010 measures in other contexts. 
1248 Complainants' responses to first set of Panel questions, question No. 2. WT/DS394/R 
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  1. The operation of China's export licensing system 
7.879  China's Import and Export Regulations define  "export licences" as "the various kinds of 
certificates and documents that are of export na ture as provided in laws and administrative 
regulations".
1249  The exportation of goods from China is unrestricted unless otherwise provided for 
by law or regulation.1250  China's Foreign Trade Law  distinguishes between goods that may be freely 
exported (Article 15) and goods that may be restrict ed (Article 19).  Goods that are freely exported 
pursuant to Article 15 may be subject to automatic licensing for monitoring purposes.1251  Goods that 
are subject to restriction pursuant to Article 19 may be subject to licensing as "goods subject to ... 
export restriction".1252   
7.880  For those goods subject to export restriction, an exporter may proceed to export only after 
obtaining an export licence for presentation to Ch ina's customs for declaration and examination.1253  
Export licences are generally valid for up to six mont hs and expire no later than 31 December each 
year.1254  The period of validity may be extended if an export licence is not fully used.1255  For those 
goods that are simultaneously subject to export quotas,  applications for licences must be made within 
the period of validity of the quota.1256   
7.881  China's MOFCOM, through its Bureau of Quota Li cence, is responsible for the application of 
export licensing rules and for coordinating export licence issuing agencies that are organized in local administrative authorities.
1257  MOFCOM is responsible for imposing penalties on enterprises that do 
not comply with exportation licence requirements.  Exportation of restricted goods without approval, 
or exportation in excess of a designated quota, is subj ect to investigation leading to potential criminal 
and administrative penalties.  Penalties include inva lidation of applicable licences and suspension or 
revocation of the right to engage in foreign trade for a period of up to three years.1258  MOFCOM also 
subjects licensing entities to penalties for issuing licences to exporters in excess of a quota, or in cases 
where no quota is set.  Penalties include warnings a nd suspension or termination of the right to issue 
licences.1259  Individuals working in licensing entities who issue licences without approval may also 
be subject to criminal and administrative pena lties, including removal from employment, warning, 
                                                      
1249 Regulation on Import and Export Administration , Article 43 (Exhibit JE-73). 
1250 Foreign Trade Law , Article 14 (Exhibit JE-72); Regulation on Import and Export Administration , 
Article 4 (Exhibit JE-73).   
1251 Foreign Trade Law , Articles 15, 16, 17  (Exhibit JE-72). 
1252 Foreign Trade Law , Article 19 (Exhibit JE-72) ;  Regulation on Import and Export Administration , 
Article 35 (Exhibit JE-73); 2008 Export Licence Administration Measures , Article 2 (Exhibits CHN-342, JE-
74). 
1253 Regulation on Import and Export Administration , Article 43 (Exhibit JE-73); 2008 Export Licence 
Administration Measures, Article 6 (Exhibits CHN-342, JE-74). 
1254 2008 Export Licence Administration Measures , Article 30 (Exhibits CHN-342, JE-74).  According 
to this provision, the Ministry of Commerce may adjust the period of validity for certain goods based on 
"specific circumstances." 
1255 2008 Export Licence Administration Measures , Article 31 (Exhibits CHN-342, JE-74); 2008 
Export Licensing Working Rules , Articles 17, 18, 19 (Exhibits CHN-344, JE-97). 
1256 2008 Export Licence Ad ministration Measures , Article 28 (Exhibits CHN-342, JE-74). 
1257 2008 Export Licence Administration Measures , Articles 4, 5 (Exhibits CHN-342, JE-74); Measures 
for Administration of Licensing Entities , Article 4 (Exhibits CHN-385,  JE-75). 
1258 Foreign Trade Law , Articles 61, 64 (Exhibit JE-72); Regulation on Import and Export 
Administration , Articles 64, 65 (Exhibit JE-73). 
1259 2008 Export Licence Administration Measures , Articles 21, 36, 38 (Exhibits CHN-342, JE-74); 
Measures for Administration of Licensing Entities , Articles 40 (Exhibits CHN-358, JE-75).  WT/DS394/R 
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  demotion, and dismissal.
1260  MOFCOM may also punish the forging, altering without approval, 
buying and selling of export licences.1261 
7.882  MOFCOM together with China's General Admi nistration of Customs publishes the Catalogue 
of Goods subject to the Administration of Export Licences,(Export Licensing Catalogue) which lists 
all goods subject to export restriction.1262  This catalogue is published annually at least 21 days before 
the list takes effect, which is on 1 January of each year.1263  MOFCOM approves exportation of goods 
listed in this catalogue.1264   
7.883  On 10 December 2008, MOFCOM published the 2009 Export Licensing Catalogue 
announcing the catalogue of export-restricted goods for 2009.  The list includes the specific forms of 
bauxite, coke, fluorspar, manganese, silicon carbide and zinc that have been identified by the 
complainants in Exhibit JE-6.1265   
7.884  Under China's Export Licence Administration Measures , enterprises seeking a licence to 
export materials listed in the 2009 Export Licensing Catalogue  are required to submit certain 
documents.  All applicants must submit an application form1266; relevant "export quota or other 
applicable approval documents"1267; and either of the Form for Archival Filing and Registration of a 
Foreign Trade Operator which has been sealed by  the archival filing and registration stamp, a 
Qualification Certificate of Import and Export Ente rprises of the People's Republic of China, or a 
Certificate of Approval for Enterprises with Foreign Investment.1268 
7.885  In addition, Under Article 11(1) of China's Export Licence Administration Measures , for the 
export of goods subject to the administration of quota licences, applicants must submit "quota-
granting documents issued by the Ministry of Comm erce or relevant depart ment, and a valid export 
contract of the applicant.  Under Article 11(2), fo r export goods subject to the administration of quota 
bidding, applicants must submit "the list of bid-winn ing Operators", "the bid-winning quantity"; either 
of the Certificate for the Application of an Export License of Goods subject to Quota Bidding, or the 
Certificate for Transfer of Goods Subject to Quot a Bidding issued by the Ministry of Commerce; and 
                                                      
1260 2008 Export Licence Administration Measures , Article 42 (Exhibits CHN-342, JE-74) Measures 
for Administration of Licensing Entities , Articles 40 and 41 (Exhibits CHN-358, JE-75). 
1261 Foreign Trade Law , Articles 34, 63 (Exhibit JE-72); Regulation on Import and Export 
Administration , Article 66 (Exhibit JE-73); 2008 Export Licence Administration Measures , Article 39 (Exhibits 
CHN-342, JE-74); Measures for Administration of Licensing Entities , Articles 40, 41, 42 (Exhibits CHN-358, 
JE-75). 
1262 Foreign Trade Law , Article 18 (Exhibit JE-72); Regulation on Import and Export Administration , 
Article 35 (Exhibit JE-73), 2008 Export Licence Administration Measures , Article 3 (Exhibits CHN-342, JE-
74). 
1263 Regulation on Import and Export Administration , Article 35 (Exhibit JE-73), 2008 Export Licence 
Administration Measures , Article 3 (Exhibits CHN-342, JE-74). 
1264 Foreign Trade Law , Article 19 (Exhibit JE-72). 
1265 2009 Export Licensing Catalogue  Notice (Exhibit JE-22); see United States' first written 
submission, para. 98; European Union's first written submission, para. 168.  MOFCOM published the 2010 
Export Licensing Catalogue  announcing the catalogue of export-restricted goods.  The list includes the specific 
forms of bauxite, coke, manganese, silicon carbide and zinc that have been identified by the complainants in 
Exhibit JE-6, but does not identify fluorspar as subject to export restriction: see 2010 Graded Export Licensing 
Entities Catalogue  (Exhibit CHN-343).  The Panel explained in paragraph 7.763 above that it considers the 
essence of the 2010 Export Licensing Catalogue Notice to be different from that of the 2009 Export Licensing 
Catalogue Notice with respect to fluorspar and, as a result, does not consider that this Notice falls within its 
terms of reference. 
1266 2008 Export Licence Ad ministration Measures , Article 8 (Exhibits CHN-342, JE-74). 
1267 2008 Export Licence Ad ministration Measures , Article 9 (Exhibits CHN-342, JE-74). 
1268 2008 Export Licence Ad ministration Measures , Article 10 (Exhibits CHN-342, JE-74). WT/DS394/R 
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  the export contract of the bid-winning Operator.  Under Article 11(7), for goods subject to export 
licensing administration only, applicants are dir ected to submit "approval documents from the 
Ministry of Commerce" and a valid export contract. 
7.886  Article 5 of 2008 Export Licensing Working Rules
 1269, additionally provides that applicants to 
export goods subject to export licensing administ ration only shall submit an application form; 
"approval documents on export issued by the competent authorities"; a valid export contract; an agency agreement, where the exporter and the consignor  are different; and "[o]ther materials that shall 
be submitted as stipulated by the Ministry of Commerce". 
7.887  Enterprises that are subject to export quotas must  first be allocated such quotas before they 
may apply for an export licence.
1270  Applicants that have been allo cated such a quota must submit to 
the appropriate export licence issuing agency the re levant quota allocation certificate issued by the 
Bidding Committee or Bidding Office, in addition to  the documents mentioned in paragraph 7.884 
above.1271 
7.888  In general, an export licence must be issued w ithin three working days from the receipt of a 
completed application.1272  China uses three types of export licences.1273  First, there is the "one 
licence for one customs house" export licence, which is used to export goods from a specific customs 
house.  Second there is the "one batch, one li cense" export licence, which is used for customs 
declaration only once within their period of validity.  Third, there is the "non-one batch, one license" 
export licence, which is used for customs declarat ion up to twelve times within their period of 
validity.  Customs houses are required to indicate the respective quantity of outbound cargo on the 
customs release form when presented with an expor t licence.  China issues "non-one batch, one 
license" types to foreign enterprises1274 as well as for goods in the Catalogue for Goods Subject to the 
Administration of Export Licenses.1275 
7.889  Article 8 of the 2008 Export Licensing Working Rules1276 instructs export licensing agencies 
to examine: (i) whether an operator has the "qualif ications" to operate the business; (ii) whether the 
"export approval documents submitted by the operator are complete and valid"; (iii) whether the 
applicant has submitted a complete and accurate "appli cation" that is "consistent with the relevant 
provisions of the administration of export goods and licenses, the contents of the export approval 
documents and the export contract"; and (iv) whethe r the "other materials that need to be submitted 
are consistent with relevant provisions".  The ex port licensing agency is  directed to issue the 
corresponding export licences if it is satisfied that these conditions are met.1277   
7.890  China has indicated that its Foreign Trade Law is a "legislative act that delegates (through the 
State Council) to MOFCOM, an executive br anch agency, implementing authority, inter alia  (1) to 
specify the products subject to export quota and ex port licensing requirements, and (2) to adopt 
implementing rules concerning the grant of export licenses".1278  The Appellate Body confirmed that 
"any act or omission attributable to a WTO Member can be a measure of that Member for purposes of 
                                                      
1269 Exhibits CHN-344, JE-97. 
1270 2008 Export Licence Ad ministration Measures , Article 21 (Exhibits CHN-342, JE-74). 
1271 2008 Export Licence Ad ministration Measures , Article 9 (Exhibits CHN-342, JE-74). 
1272 2008 Export Licence Administration Measures , Article 19 (Exhibits CHN-342, JE-74); 2008 
Export Licensing Working Rules , Article 10 (Exhibits CHN-344, JE-97). 
1273 2008 Export Licence Ad ministration Measures , Article 22 (Exhibits CHN-342, JE-74). 
1274 2009 Export Licensing Catalogue , Article VII (Exhibit JE-22). 
1275 2008 Export Licence Ad ministration Measures , Article 22 (Exhibits CHN-342, JE-74). 
1276 Exhibits CHN-344, JE-97. 
1277 2008 Export Licensing Working Rules , Article 9 (Exhibit CHN-344, JE-97). 
1278 China's response to question No. 2 from the European Union, para. 279.  WT/DS394/R 
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  dispute settlement proceedings."
1279  In light of China's explana tion, and in the absence of any 
assertion that the measures discussed above are not attri butable to China, the Panel will consider these 
measures to be measures of China for purposes of its analysis. 
2. Whether China's export licensing system on  certain forms of bauxite, coke, fluorspar, 
manganese, silicon carbide and zinc is incons istent with Article XI:1 of the GATT 1994 
7.891  The complainants allege that China's export licensing system, as applied to bauxite, coke, 
fluorspar, manganese, silicon carbide and zinc under the 2009 Export Licensing Catalogue , is both 
"non-automatic" and "discretionary" and, therefor e, is inconsistent with GATT Article XI:1.  
7.892  Article XI of the GATT 1994 provides: 
"No prohibitions or restrictions other than duties, taxes or other charges, whether 
made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product of 
the territory of any other contracting party or on the exportation or sale for export of 
any product destined for the territory of any other contracting party." 
7.893  Thus, Article XI:1 forbids import and export r estrictions or prohibitions, including those 
"made effective through ... export licences."   
7.894  The Appellate Body has not yet been required to  consider the meaning of "restrictions" in 
Article XI:1.  Some panels, however, have done so.  In Colombia – Ports of Entry , after reviewing 
several GATT and WTO cases, the panel concluded th at "restrictions" in the sense contemplated by 
Article XI:1 refers to measures that create uncertain ties and affect investment plans, restrict market 
access for imports, or make importation prohibitively costly.
1280  The panel in that dispute considered 
Article XI:1 in the context of measures that rest ricted access to ports of entry for goods being 
imported from Panama. 
7.895  In the context of import licensing, the panel in India – Quantitative Restrictions  concluded 
that the scope of the term "restriction" is "broad" a nd, in terms of its ordinary  meaning, is "a limitation 
on action, a limiting condition or regulation."1281  The panel thereafter concluded that "a discretionary 
or non-automatic import licensing requirement is  a restriction prohibited by Article XI:1."1282  The 
panel in India – Autos similarly endorsed a broad interpretation of the term "restriction", concluding 
that Article XI:1 applies to conditions that are "l imiting' or have a "limiting effect ... on importation 
itself".1283 
7.896  While these reports shed light on the meaning of "restriction", the Panel considers it useful to 
undertake a further review of Article XI:1 in or der to assess its applicability to export licensing, 
including export licensing requirements that may be considered "non-automatic" or "discretionary".  
Although the panel in India – Quantitative Restrictions  opined that a "discretionary or non-automatic 
import licensing requirement" is a restriction, the panel in India – Quantitative Restrictions  did not 
distinguish between "non-automatic" and "discr etionary" licensing systems or explain potential 
                                                      
1279 Appellate Body Report, US – Corrosion Resistant Steel  Sunset Reviews , para. 81. 
1280 Panel Report, Colombia – Ports of Entry , para. 7.240. 
1281 Panel Report, India – Quantitative Restrictions , para. 5.128. 
1282 Panel Report, India – Quantitative Restrictions , para. 5.129.   
1283 Panel Report, India – Autos , para. 7.270.  Several WTO panels have cited with approval this 
interpretation of the term "restrictions" in Article XI:1:  see Panel Report, Colombia – Ports of Entry , 
paras. 7.233-7.234; Panel Report, Brazil – Retreaded Tyres , para. 7.371; Panel Report, Dominican Republic – 
Import and Sale of Cigarettes , paras. 7.252 and 7.258. WT/DS394/R 
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  differences in the meanings of these terms.
1284  That panel ultimately found that the particular 
licensing requirement at issue was a "discretionary import licensing system" where "licences are not granted in all cases, but rather on unspecified merits".
1285  The Panel does not find in the reasoning 
articulated by that panel a specific explanation of why "non-automatic" licensing systems are 
prohibited under Article XI:1 th at would assist us here.   
7.897  The Panel will first consider this general i ssue and thereafter will consider China's export 
licensing system in light of its determin ation on the scope of GATT Article XI:1. 
(a) "Non-automatic" or "discretionary" export licensing under Article XI:1 of the GATT 1994 
7.898  The complainants submit that Article XI:1  prohibits "non-automatic" export licensing 
requirements.  In other words, the complainants  contend that export licensing requirements that 
accord licensing authorities "discretionary" authorit y in determining whether to grant an export 
licence to a particular applicant are prohibited under Article XI:1.  
7.899  The United States and Mexico point out that Ar ticle XI:1 expressly identifies export licences 
as a type of measure that can restrict exportation.1286  The United States adds as well that Article XI:1 
"qualifies its ban on restrictions" by explicitly excluding  from its scope duties, taxes or other charges.  
According to the United States, this demonstrates that the restrictions that fall within  the scope of 
Article XI:1 include other types of restrictions imposed on exportation.  It notes further that GATT 
and WTO panels have interpreted Ar ticle XI:1 to cover restrictions  other than just "quantitative" 
restrictions.1287  The United States and Mexico submit, in particular, that the panel in India – 
Quantitative Restrictions  concluded that a "discretionary or non-automatic import licensing 
requirement" is a "restriction" that is prohibited by Article XI:1.1288   
7.900  The European Union submits that "[i]t is gene rally accepted that an import or export licensing 
requirement falls within the scope of Article XI  when it is 'discretionary or non-automatic'".1289  I t  
argues that Article XI:1 has been found broadly to  protect trading and competitive opportunities for 
both Members and traders.1290  The European Union contends that a discretionary export licensing 
system "by its very nature limits such opportun ities because certain exports may not be permitted".1291   
7.901  China submits that Article XI:1 should not be  construed broadly to prohibit all forms of 
export licensing.  China argues that Article XI:1 does not prohibit Members from imposing any and 
all regulatory conditions on exportation; rather it prohibits the imposition of certain conditions, 
namely those that have a "limiting effect" on the quantity of exports.1292  China submits that a 
complainant must prove that although a measure su ch as a licensing requirement does not contain any 
express restriction on exportation, it functions to restrict exports.1293   
                                                      
1284 Panel Report, India – Quantitative Restrictions , para. 5.129, 5.137. 
1285 Panel Report, India – Quantitative Restrictions , para. 5.130. 
1286 United States' first written submission, paras.  332-333; Mexico's first written submission, 
paras. 334-335. 
1287 United States' opening oral statement at th e second substantive meeting, para. 124. 
1288 United States' first written submission, paras 341; Mexico's first written submission, paras 344, 
referring to Panel Report, India – Quantitative Restrictions , para. 5.129. 
1289 European Union's first written submission, para. 316. 
1290 European Union's second written submission, paras. 90 and 103. 
1291 European Union's second written submission, para. 90. 
1292 China's first written submission, paras. 748-752;  China's second written submission, paras. 482-
484. 
1293 China's first written submission, para. 752.  WT/DS394/R 
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  7.902  China submits that not all types of licences have a "limiting effect" on the quantity of imports 
or exports and therefore not all licences are incons istent with Article XI:1.  For instance, China 
contends that a licence that is issued "automatically" has no limiting effect and is therefore 
permissible.
1294  Relying on the ordinary meaning of "aut omatic" and the definition of "automatic" 
licensing in the Import Licensing Agreement, Chin a submits that licensing is "automatic" and 
consequently should not be prohibited if the ex port licence is issued in all cases, where pre-
established conditions are met.1295   
7.903  According to China, Article 1.1 of the Impor t Licensing Agreement confirms that the mere 
requirement to submit a valid and complete app lication or other documentation as a condition to 
receive a licence is not sufficient to render a licen sing requirement a restrict ion on the quantity of 
exports and hence inconsis tent with Article XI:1.1296 
7.904  China submits that criteria set out in Articl e 2 of the Import Licensing Agreement support the 
view that licensing may be "automatic" and thus permissible.  According to China, automatic 
licensing in this context includes situations where a licensing agency has no ri ght to refuse issuance of 
an export licence, upon submission of enumerated application documents; when licences are issued 
"regularly" upon receipt of the relevant and co mpleted application; when a licence application 
procedure is "accessible"; and when the time taken for issuance is not too long.1297  
7.905  China argues that even when a licence may not be considered "automatic" based on these 
factors, a licence should nevertheless not be presumed to restrict the quantity of exports per se in a 
way that would violate Article XI:1.  In this r espect, China submits that Article 3.2 of the Import 
Licensing Agreement clarifies that licences that are not  "automatic" within the meaning of Article 2 of 
the Import Licensing Agreement should not be prohibited, so long as they are not more "trade-restrictive" or "trade-distortive", or "burdensome"  than necessary to administer the measure.  These 
licences would be considered "non-automatic" but ar e nevertheless WTO-permissible, in its view.  
According to China, if a non-automa tic licence does not "limit the quantity of imports or exports", it is 
not WTO-inconsistent.
1298   
7.906  More broadly, China argues that where a measu re does not expressly or necessarily provide 
for WTO-inconsistent conduct, the discretion to a pply the rule in a WTO-inconsistent manner is 
insufficient to render the measure WTO-inconsistent.  China argues that it should be presumed to act 
in good faith with its obligations.1299  Thus, China argues, the absence of any explicit limitation on 
this discretion does not render an export licence non-automatic in such a way as to have a limiting 
effect on the quantity of exports. 
(i) Import and export licensing under Ar ticle XI:1 of the GATT 1994 
7.907  The Panel recalls, as set out above, that Article  XI:1 of the GATT 1994 forbids "import and 
export restrictions or prohibitions made effective through ... export licences".  Duties, taxes or other 
charges are explicitly excluded as types of "restrictions  or "prohibitions" that fall within the scope of 
Article XI:1.   
                                                      
1294 China's first written submission, para. 753. 
1295 China's first written submission, paras. 754, 755. 
1296 China's first written submission, paras. 75 8-759; China's second written submission, 
paras. 488-489. 
1297 China's first written submission, paras. 754, 756 referring to Import Licensing Agreement, 
Article 2.2(a). 
1298 China's second written submission, para. 487. 
1299 China's first written submission, paras. 803-804.   WT/DS394/R 
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  7.908  It is useful to bear in mind that import or e xport prohibitions or restrictions may be permitted 
or justified under other provisions, such as Artic les XI:2, XII, XVIII, XIX, XX and XXI of the 
GATT 1994. Restrictions permitted under these provi sions may be implemented through, e.g., a 
licensing regime. Article XIII of the GATT 1994 set s out rules for the administration of such 
restrictions. In the context of import licensing, the Import Licensing Agreement clarifies rules for 
import licensing procedures. 
7.909  China, as well as the Kingdom of Saudi Arabia
1300, as a Third Party, submit that the Import 
Licensing Agreement provides useful context to  inform which licensing requirements may be 
permitted under Article XI:1.1301  In China's view, the Import Licensing Agreement makes clear that 
licensing is permissible, regardless of a label assigned to it, "if the export license is issued in all cases, 
provided pre-established conditions are met".1302  Even if a licence falls into the residual category of 
"non-automatic" licensing set out in Article 3.2 of the Import Licensing Agreement, according to 
China, that license procedure is not WTO-inconsis tent, so long as it does not "limit the quantity of 
imports or exports".1303   
7.910  Saudi Arabia does not consider an export licen sing system to be "automatic" where its 
application requirements include or enforc e export conditions, such as an export quota.1304  
Nevertheless, it agrees with China that the pr esence of an application process does not necessarily 
render an export licensing system "non-automatic" or per se  WTO-inconsistent.   
7.911  We agree with China and Saudi Arabia that  the Import Licensing Agreement informs the 
meaning of the terms "automatic" and "non-auto matic" (as a residual ca tegory of "automatic" 
licenses) in the context of import licensing system s.  However, that Agreement does not address 
export  licensing systems.  Nor for that matte r does it set out in precise terms which import  licences 
would be WTO-inconsistent, although  it does provide that import licences should be in conformity 
with all "relevant" provisions of the GATT 1994 "as interpreted by [the Import Licensing 
Agreement]".1305  Hence, the Panel considers that the Import Licensing Agreement itself provides 
only limited assistance in the task of interpreting Article XI:1. 
7.912  The Appellate Body has indicated that the title of  a provision may be useful in defining its 
objective.1306  The Panel notes the title of Article XI:1 – "General Elimination of Quantitative 
Restrictions" suggests that the provision is intende d to govern elimination of quantitative restrictions 
generally.  While relevant, the Pa nel's interpretative task does not of course end with the title.  To 
determine the scope and meaning of Article XI:1, the Panel needs to consider the particular terms of 
the provision.   
7.913  Article XI:1 by its terms prohibits restrictions or prohibitions that are made effective through 
a variety of means not solely through a categor y of measures that may be considered formal 
quantitative restrictions, such as a quota.  Article XI :1 also prohibits restrictions effected through 
                                                      
1300 Third party written submission of Kingdom of Saudi Arabia, paras. 17-27. 
1301 See, e.g., China's response to Panel question No. 66 following the second substantive meeting, 
para. 337, fn. 392. 
1302 China's first written submission, para. 754. 
1303 China's second written submission, para. 487. 
1304 Third party written submission of Kingdom of Saudi Arabia, para. 18. 
1305 Article 1.2 of the Import Licensing Agreement provides: "Members shall ensure that the 
administrative procedures used to implement import licensing regimes are in conformity with the relevant 
provisions of GATT 1994 including its annexes and protocol s, as interpreted by this Agreement, with a view to 
preventing trade distortions that may arise from an inappropriate operation of those procedures". 
1306 Appellate Body Report, US – Softwood Lumber IV , para. 93; Appellate Body Report, US – Carbon 
Steel , para. 67.  WT/DS394/R 
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  export licenses, as well as an unqualified category of "o ther measures".  In the Panel's view, the fact 
that the title uses the term "quantitative restrictions" does not change the fact that a broad category of 
"other measures" falls within the scope of Article XI:1.   
7.914  The Panel's view is consistent with findings  of other GATT and WTO panels that types of 
measures "other" than quotas, import or export licences, duties, taxes or charges that have a "limiting effect" or impose a "limiting condition"  are prohibited under Article XI:1.
1307  Panels have assessed 
such measures by examining their design and structur e to determine whether they have a "limiting" or 
"restrictive" effect.1308   
7.915  The Panel will adopt a similar analytical approach.  The Panel sees no merit in seeking to 
determine whether or not a measure is permissible unde r Article XI:1 based solely on its label.  In 
other words, the Panel does not find useful for its an alysis here whether a measure is categorized as an 
"automatic" or "non-automatic" licence.  Indeed, th e obligation set forth in Article XI:1 does not 
distinguish between types of import or export licences  that would be prohibited, be they automatic, 
non-automatic or discretionary.  Ra ther, it concerns "prohibitions or restrictions" including those 
"made effective through ... import or export licenses" .  Hence, our analysis will examine the design 
and structure of the licence to determine if it has a "limiting" or "restrictive" effect. 
7.916  Setting aside the use of a particular label or nomenclature for a licence, the Panel considers 
that a licensing system that operates such that a licence to import or export is granted upon application to each and every applicant would not run afoul of Article XI:1.  This is because such a system does 
not imply any restriction or limiting effect on im portation or exportation in connection with the 
application and granting of the licence.  An example of  such a system is one that is designed to gather 
statistical information or for monitoring purposes, but presents no impediment to obtaining the licence 
as it is granted in every case.   
7.917  The Panel also considers that requiring an app licant to satisfy a certain  prerequisite before 
being granted an import or export licence would not necessarily offend Article XI:1.  The requirement 
to satisfy a prerequisite would be prohibited under Ar ticle XI:1 only if the prerequisite itself created a 
restriction or limiting effect on importation or exportation.  For ex ample, if a licensing system is 
maintained in order to administer an import quota that is authorized under the GATT 1994, requiring the applicant to submit a particular document attesti ng to an applicant's right to import quota in order 
to receive the licence is unlikely to constitute a violation of Article XI:1.  This is because the 
requirement to submit the document does not effect any restriction or impose a limiting effect on 
importation; the restriction on importation is the quo ta itself.  A different conclusion could obtain, 
however, if the prerequisite were of a different nature. 
7.918  Therefore, the Panel concludes that import and export licences, including those granted only 
upon meeting a certain prerequisite, may be, but are not necessarily, permissible under Article XI:1; 
the key is whether the licensing system is designed and operates such that by its nature it does not 
have a restrictive or limiting effect on importation or exportation.  If it meets this test, it will not 
offend Article XI:1 of the GATT 1994. 
(ii) Discretionary licensing requirements 
7.919  Before turning to examine China's export li censing system, we should address discretionary 
licensing requirements.   
                                                      
1307 See, e.g., discussion in paragraphs 7.205-7.206 above. 
1308 Panel Report, India – Autos , paras. 7.266-7.268; Panel Report, Colombia – Ports of Entry , 
para. 7.252. WT/DS394/R 
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  7.920  As noted above, the panel in India – Quantitative Restrictions  found that the particular 
licensing requirement at issue was a "discretionary import licensing system" where "licences are not granted in all cases, but rather on unspecified merits", and was therefore WTO-inconsistent.
1309  The 
panel in Turkey – Rice considered that whether a licensing prac tice is "discretionary" depends on the 
freedom of the administering authority to grant or reject an import licence.1310  The panel in China – 
Publications and Audiovisual Products similarly found that a measure was "discretionary" because 
the implementing authority had "the freedom to  choose, based essentially on its own preference, 
whether or not such rights are granted".1311   
7.921  It seems to the Panel that if a licensing syst em is designed such that a licensing agency has 
discretion to grant or deny a licence based on unspecified  criteria, this would not meet the test we set 
out above in order to be permissible under Article XI:1.  The possibility to deny the licence would be 
ever present; hence, the system by its very nature would always have a restrictive or limiting effect.  It makes no difference, in the Panel's view, that discreti on may be applied in a particular case such that a 
licence is authorized.  The system offers no certainty  that licences will be granted and hence it is not 
permissible. 
7.922  With this in mind, the Panel will next consid er whether China's export licensing system for 
the forms of bauxite, coke, fluorspar, manganese, silic on carbide and zinc at issue is inconsistent with 
Article XI:1.  In doing so, the Panel recalls Chin a's argument that, where a measure does not expressly 
provide for WTO-inconsistent conduct, the discretion to apply the rule in a WTO-inconsistent manner 
is insufficient to render the measure WTO-inconsistent.
1312  The Panel explained above that it will 
examine the design and structure of the measure at issue it making its assessment.  
(b) China's export licensing system for the forms of  bauxite, coke, fluorspar, manganese, silicon 
carbide and zinc 
7.923  The complainants allege that China's export licensing system, as applied to the forms of 
bauxite, coke, fluorspar, manganese, silicon carbide and zinc under the 2009  Export Licensing 
Catalogue , is inconsistent with Article XI:1 because  it is "non-automatic" and because it provides 
China's export licensing agencies with discretion to restrict exportation of these materials. 
7.924  The complainants argue that Article 19 of China's Foreign Trade Law  imposes a "non-
automatic" licence requirement for specified goods that are "subject to export restriction". They 
distinguish this alleged "non-autom atic" requirement from an "automa tic" licence requirement that is 
implemented for "freely exported g oods" under Article 15 of China's Foreign Trade Law  for 
"monitoring purposes". 
7.925  The United States and Mexico submit that re gulation of export licences under the provisions 
of Article 19 is "non-automatic" by its nature.1313  They argue that licen sing agencies may exercise 
discretion and impose conditions on the granting of li cences to set the quantiti es of goods that can be 
exported.  Conditions include requiri ng "undefined 'documents of approva l' and 'other materials to be 
submitted' as bases for issuance of export licenses".1314  The United States and Mexico submit that 
China has itself conceded that its export licensing system amounts to an export restriction under 
                                                      
1309 Panel Report, India – Quantitative Restrictions , para. 5.130. 
1310 Panel Report, Turkey – Rice , paras. 7.128, 7.134. 
1311 Panel Report, China – Publications and Audiovisual Products , para. 7.324. 
1312 China's first written submission, paras. 803-804.   
1313 United States' first written submission, paras. 338-339, 342. 
1314 United States' first written submission, para. 34 0, fn. 415; Mexico's first written submission, 
para. 343, fn. 415.  WT/DS394/R 
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  GATT Article XI:1 through its notification to  the WTO Committee on Market Access in 2006 and 
2007 that its licence requirements are a "quantitative r estriction" justified pursuant to Article XI and 
XX of the GATT 1994.
1315   
7.926  The European Union argues that a logical in terpretation of Articles 15 and 19 of China's 
Foreign Trade Law  leads to the conclusion that export licences imposed on goods subject to 
restriction under Article 19 are not  "automatic" by operation of law.1316  The European Union cites 
references in the Regulation on Import and Export Administration1317 to goods "prohibited from 
exportation" and goods "l imited in exportation"1318, including those goods that are "subject to the 
administration of licenses".1319  It submits that these goods are subject to non-automatic export 
licenses.1320  The European Union contends that  Articles 16, 17 and 18 of China's Foreign Trade Law , 
which set out conditions that must be met and pro cedures that must be followed in order for a good to 
be declared as "restricted or forbidden from expor t", confirm that China mandates its authorities to 
treat Article 19 export licences as non-automatic.1321   
7.927  The European Union also argues that the non-auto matic nature of the licences is made clear 
from the text of Notices that China publishes an nually announcing the "list of goods that are 
submitted to export license management".1322  In respect of goods subject to export licensing 
administration only, the European Union additionally contends that China's export licensing system is 
inconsistent with Article XI:1 because it "allows  China's authorities a very broad and unfettered 
discretion on whether to grant or refuse export licenses to applicants".1323  Specifically, the European 
Union argues that China's export licence agencies  may require, under Article 5(5) of China's 2008 
Export Licensing Working Rules , undefined "other documents" pr escribed by the Ministry of 
Commerce for some applicants but not others, or to require documents during certain times but not 
others.1324  The European Union argues that there is no proof of limitation of discretion to require 
documents.  If there were no discretion, it argues, the export licence would always be issued for the 
entire quantity requested based on the export contract.  In addition, the European Union submits that 
China's export licensing agencies, under  Article 11(7) of China's 2008 Export Licence Administration 
Measures , have discretion to require undefined "doc uments of approval of the Ministry of 
Commerce".1325  The European Union argues that the di scretion inherent in these criteria allows 
                                                      
1315 United States' second written su bmission, para. 378 and Mexico's second written submission, 
para. 383, referring to Committee on Market Access, Note by the Secretariat: No tifications of Quantitative 
Restrictions G/MA/NTM/QR/1Add.11 (11 April 2008) (Exhibit JE-171); Catalogue of Products Subject to 
Export (Quota) License (2007 QRs of China final)  (Exhibit JE-172)). 
1316 European Union's opening oral statement at the first substantive meeting, para. 9. 
1317 Regulation on Import and Export Administration  (Exhibit CHN-152, Exhibit JE-73). 
1318 Regulation on Import and Export Administration , Articles 33 and 35 (Exhibit CHN-152, Exhibit 
JE-73). 
1319 Regulation on Import and Export Administration , Article 43 (Exhibit CHN-152, Exhibit JE-73). 
1320 European Union's first written submission, para. 317. 
1321 European Union's second written submission, para. 64. 
1322 European Union's first written submission, para. 317, referring to Notice 100/2008 (Exhibit JE-22). 
1323 European Union's first written submission, para. 319. 
1324 European Union's first written submission, para. 319; European Union's second written submission, 
para. 69, referring to 2008 Export Licensing Working Rules , Article 5.5 (Exhibits CHN-344, JE-97).  China 
submits that the correct interpretation is "other materials th at shall be submitted as stipulated by the Ministry of 
Commerce." China's second written submission, para. 509. 
1325 European Union's first written submission, para. 321; Measures for Administration of Licensing 
Entities , Article 11.7 (Exhibits CHN-358, JE-75). WT/DS394/R 
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  China's export licence authorities to restrict, or alt ogether ban, exportation by certain companies or 
individuals.
1326   
7.928  China disputes the complainants' claims that its  export licence regime is  inconsistent with 
GATT Article XI:1 due to references to the term "rest riction" in provisions of its law.  It considers 
that the label applied to its export licence system  does not determine a violation of Article XI:1.1327  
China similarly rejects that e xport licence issuing agencies enjoy discretion in granting an export 
licence, including discretion to determine th e quantity that an applicant may export.1328  China submits 
that requiring documentation as a condition for rece ipt of a licence does not convert an otherwise 
valid licence requirement into a prohibited  restriction on the quantity of exports.1329   
7.929  Under applicable Chinese law, China cont ends that export licences for bauxite, coke, 
manganese, silicon carbide and zinc are automatically  granted in all cases, and within three days, 
provided that a valid and complete set of doc uments is submitted with the application.1330  I n  t w o  
official statements issued by the Quota & Licen se Administrative Bureau of MOFCOM, dated 20 July 
2010 and 11 November 2010 respectively (Exhibit CHN-345 and Exhibit CHN-529), China specifies 
which documents are required to re ceive an export licence in the case of: (i) goods subject to quotas 
directly allocated, (ii) goods subject to quota bidd ing, and (iii) manganese and unwrought zinc, which 
are not subject to quotas but are subject to export licensing requirements.1331  China argues that full 
details on the required documents a nd steps to acquire a licence appear in Articles 8 to 10 of its 2008 
Export Licence Administration Measures1332, and Article 9 of the 2008 Export Licensing Working 
Rules .1333  China submits that the 2008 Export Licensing Working Rules  do not implement the 
Measures for the Administration for the Export of Goods ; instead, they are an "internal guide for the 
personnel of the licence-issuing authorities on the applicable rules governing the issuance of export 
licences".1334 
7.930  Article 11(7) of the Measures for the Administration of Licenses for the Export of Goods  
applies to goods that are not subject to quotas but are subject to export licensing requirements.  For 
                                                      
1326 European Union's first written submission, para s. 319, 321; European Union's second written 
submission, para. 98. 
1327 China's first written submission, para. 762, referring to Appellate Body Report, US – Corrosion-
Resistant Steel Sunset Review , para. 87, fn. 87; China's second written submission, para. 497. 
1328 China's first written submission, para. 798. 
1329 China's first written submission, paras. 758-759, 800. 
1330 China's first written submission, paras. 771, 77 6; China's second written submission, para. 499. 
1331 China's first written submission, paras. 773-774.  For goods subject to quota licence administration, 
China submits that an applicant must submit: (a) an ap plication form; (b) the Form for Archival Filing and 
Registration of a Foreign Trade Operator or the Qualification Certificate of Import and Export Enterprises or the 
Certificate of Approval for Foreign-Invested Enterprises; (c) the "quo ta-granting documents issued by relevant 
authorities"; and (d) the export contract.  For goods subject to quota bidding, China submits that an applicant 
must submit: (a) an application form; (b) the Form for Archival Filing and Registration of a Foreign Trade 
Operator or the Qualification Certificate of Import and Export Enterprises or the Certificate of Approval for 
Foreign-Invested Enterprises; (c) the list of bid-winni ng operators and the bid-winning quantity announced; (d) 
the Certificate for the Application of an Export License of Goods subject to  Quota Bidding or the Certificate for 
Transfer of Goods Subject to Quota Bidding; and (e) the export contract of the bid-winning operator.  China 
submits that applicants wishing to export manganese and unwrought zinc must submit: (a) an application form; 
(b) Form for Archival Filing and Registration of a Forei gn Trade Operator or the Qualification Certificate of 
Import and Export Enterprises or the Certificate of Approva l for Foreign-Invested Enterprises; and (c) an export 
contract.  China argues this is confirmed under the 2010 Export Licensing Catalogue . 
1332 China's first written submission, para. 775. 
1333 China's first written submission, para. 777. 
1334 China's opening oral statement at the second substantive meeting, para. 355; see also China's 
response to Panel question Nos. 22 and 23 following the first substantive meeting paras 113-117.   WT/DS394/R 
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  those products at issue that are not subject to an export quota, unwrought zinc and manganese.  China 
submits that the 2010 Export Licensing Catalogue includes a notation in its Appendix 1 that export 
licences for these products will be "applied for and gr anted" upon presentation of an export contract in 
the 2010 Catalogue .  China argues that, as a matter of Chinese law, this constitutes an "approval" by 
MOFCOM within the meaning of Article 11.7.
1335  Finally, China submits that the European Union 
has not provided any examples in which an appli cant was required to provide documents other than 
those specified in the 2008 Export Licence Administration Measures .  Accordingly, it requests the 
Panel to reject the European Union's claim on these aspects.1336   
7.931  In respect of goods subject to export licensing administration only, the European Union 
submits that the Panel may wish to accept in good faith official statements  issued in 2010 by the 
Quota & License Administrative Bureau of MO FCOM (Exhibit CHN-345 and Exhibit CHN-529) that 
export licensing agencies do not exercise discretion to grant export licences.1337  It accepts that the 
Panel may incorporate these statements in its final Reports to the DSB and attribute legal importance 
to them to achieve a positive solution to the dispute.1338  If it were to do so , the European Union 
requests the Panel to state the consequen ce were China to repudiate these statements.1339  The 
European Union cautions as well that the Panel ca nnot accept such a statement where it would amount 
to "an administrative promise to disregard the defe nding Member's own binding internal legislation, 
i.e., by an administrative undertaking to act illegally".1340  
7.932  The European Union, however, disputes that Article 11 of the 2008 Export Licence 
Administration Measures determines the relevant documents, th ereby removing all discretion.  The 
European Union submits that Article 5 of the 2008 Working Rules on Export Licenses , as 
implementing measures of the 2008 Export Licence Administration Measures , refers to documents 
that are not mentioned in the 2008 Export Licence Administration Measures .1341  It submits that the 
2008 Export Licensing Working Rules include undefined terms.1342  The European Union also notes 
that Article 9 of the 2008 Export Licensing Working Rules comes into play only after the authorities 
have concluded that the "applica tions conform to the regulations".1343 
7.933  Finally, the European Union disputes the relevance of the note in the appendix of the 2010 
Export Licensing Catalogue and related official statement dated 11 November 2010 (Exhibit CHN-
529), which specifies that export licences are to be i ssued on the basis of export contracts alone for 
goods not subject to an export quota, notably manganese and unwrought zinc. The European Union 
submits that the 2010 Export Licensing Catalogue leaves MOFCOM with discretion to issue 
                                                      
1335 China's first written submission, para. 822, fo otnote 1166.  See also China's first written 
submission, para. 817, footnote 1160, para. 773, footnote 1106 and para. 796, footnote 1138, China's response to 
question No. 2 from the European Union following the first substantive meeting, para. 285; China's second 
written submission, para. 544, footnotes 734 and 737. 
1336 In its opening oral statement at  the second substantive meeting (paras. 362 and 363), China submits 
that the European Union additionally claims that China's power to amend the list of documents required to 
support an application is inconsistent with GATT Article XI:1.  The European Union indicated it was not 
making such a claim in response to Panel question No. 62 following the second substantive meeting paras. 85-
86.  Accordingly, the Panel does not consider further this argument by China. 
1337 European Union's second written submission, para. 55; European Union's opening oral statement at 
the first substantive meeting, para. 6. 
1338 European Union's opening oral statement at the first substantive meeting, para. 6; European Union's 
second written submission, para. 73. 
1339 European Union's second written submission, para. 73. 
1340 Panel Report, US – Section 301 Trade Act , para. 7.103. 
1341 European Union's second written submission, para. 76. 
1342 European Union's second written submission, para. 75. 
1343 European Union's second written submission, para. 85. WT/DS394/R 
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  documents of approval limiting the quantities of manganese and unwrought zinc that may be 
exported.  In addition, it argues that future versio ns of the annual Catalogue of Goods Subject to 
Export Licensing Administration may not permit the granting of a licence on the basis of export 
contracts alone.
1344  Absent modification or repeal of the Export Licensing Measures, the European 
Union argues that China has not removed the discretion enjoyed under this provision.1345 
7.934  The Panel first recalls its conclusion in para graph 7.918 above that export licences are not per 
se inconsistent with GATT Article XI:1.  In partic ular, the Panel found that licensing conditions may 
be imposed in licensing systems that are themselves justified pursuant to a provision of the WTO 
Agreement, such as GATT Articles XI:2, XII, XVIII, XIX, XX and XXI provided they do not by their 
nature have a restrictive or limiting effect.   
7.935  Under the provisions in China's law identified by the complainants, certain goods are subject 
to export restriction (under Article 19 of China's  Foreign Trade Law ), while other goods are not 
(under Article 15 of China's  Foreign Trade Law ).  In the Panel's view, the fact that goods subject to 
export restriction are in turn subject to a licensing re quirement is not sufficient to establish that such a 
requirement is impermissible under GATT Article XI:1.  As stated, prerequisites may be imposed in 
licensing systems that implement a permitted restricti on.  Hence, the inquiry as to whether or not a 
licence requirement is or is not permissible under Article XI:1 does not end at the text of the measure imposing the licensing requirement.  It is necessary to determine if there is a restrictive or limiting effect.   
7.936  It is possible that license requirements for certa in goods eligible for export under Article 19 of 
China's Foreign Trade Law may in fact be justified.  There is also no evidence before us indicating 
that the measures must necessarily be applied in su ch a way as to impose any restriction additional to 
that arising from the underlying restriction.  As explained in paragraph 7. 917 above, in the Panel's 
view, the mere requirement to submit an appli cation or documentation as a condition to obtain a 
licence to export does not on its own necessarily rise to the level of a restriction under Article XI:1. 
7.937  Articles 16, 17 and 18 of China's  Foreign Trade Law  do not on their face indicate that a 
particular licence requirement is to be imposed in  such a way as to impose any additional limiting or 
restrictive effect.  Articles 16 and 17 set out reasons for which China may restrict or ban the export of 
particular goods, including for numerous reasons similar to those set out in GATT Articles XX and XXI.  The measures do not indicate on their face, and the complainants have not submitted any 
evidence to prove,  that export licensing applied in conformity with the rationale in Articles 16 and 17 
of China's Foreign Trade Law  imposes additional rest rictions to that which may arise from the 
underlying measure.   
7.938  Accordingly, for the reasons set out above, th e Panel does not agree with the complainants 
that China's export licensing requirement imposed  on certain forms of bauxite, coke, fluorspar, 
manganese, silicon carbide and zinc is inconsiste nt with Article XI:1 simply because a licence 
requirement is applied to "goods subject to ... e xport restrictions".  In the Panel's view, GATT 
Article XI:1 does not support  such a conclusion.   
7.939  The Panel will next address the additional clai m that China's export licensing requirement is 
inconsistent with Article XI:1 because China' s export licensing agencies exercise discretion in 
deciding whether to grant export licences to applican ts to export bauxite, coke, fluorspar, manganese, 
silicon carbide and zinc. 
                                                      
1344 European Union's second written submission, para. 93. 
1345 European Union's second written submission, para. 95.  WT/DS394/R 
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  7.940  The Panel explained in paragraph 7.919 above th at an additional restriction sufficient to 
violate Article XI:1 could arise where a licensing ag ency exercises discretion in its decision to grant 
an export licence.   
7.941  The arguments of the parties turn on whether there is a exhaustive list of the particular 
documents that are required to receive an export licence.  As discussed in paragraph 7.929 above, 
China submits that there is an all- inclusive definitive list of material s that must be submitted, in the 
case of goods subject to quota licence administration, goods subject to quota bidd ing, and lastly, those 
goods subject to an export licensing requirement onl y, namely the forms of manganese and unwrought 
zinc at issue in this dispute.  China contends that for goods subject to quota licence administration, an 
applicant must submit: (i) an application form; ( ii) a form demonstrating that the applicant is 
registered and authorized to export
1346; (iii) evidence that the appli cant is one of the enterprises 
granted a quota share; and (iv) an export contract.   
7.942  For goods subject to quota bidding, an applicant must submit: (i) an application form; (ii) a 
form demonstrating that the applicant is registered and authorized to export1347; (iii) evidence that the 
applicant is one of the export quota bid winners; (i v) a Certificate for the Application of an Export 
License of Goods subject to Quota Bidding or a Certificate for Transfer of Goods Subject to Quota Bidding; and (v) an export contract of the bid-winning operator.   
7.943  In respect of manganese and unwrought zinc that are subject to export licensing 
administration only, under the 2010 Export Licensing Catalogue , applicants seeking to export must 
submit: (i) an application form; (ii) a form demo nstrating that the applicant is registered and 
authorized to export
1348; and (iii) an export contract.  Appendix 1 of the 2010 Export Licensing 
Catalogue indicates that an applicant is only required to  present an export contract to obtain an export 
licence.1349  Effectively, as clarified in statements by  the Quota & License Administrative Bureau of 
MOFCOM1350, China has suspended the requirement for an applicant to submit any other documents 
of approval in 2010 in order to obtain a licen ce to export either manganese or unwrought zinc. 
7.944  The Panel does not question China's position as confirmed in statements by the Quota & 
License Administrative Bureau of MOFCOM (Exhi bits CHN-345 and CHN-529 ) that China does not 
require materials in addition to these enumerated  documents.  However, the Panel observes that 
Article 11(7) of 2008 Export Licence Administration Measures  and Article 5(2) and 8(2) of China's 
Working Rules on Export Licenses  also refer to a requirement to submit undefined "other documents 
of approval".  In addition, Articles 5(5) and 8(4) of China's Working Rules on Export Licenses  refer to 
undefined "other materials" as required by the Ministry of Commerce.   
7.945  The Panel accepts that the reference to "other  documents of approval" in Article 9, and 
"documents of approval for export" in Article 12 of China's 2008 Export Licence Administration 
Measures  refer to the documents enumerated in the subparagraphs of Article 11 of the 2008 Export 
Licence Administration Measures .  Further, the Panel understands the reference to "documents of 
                                                      
1346 To satisfy this requirement, an applicant must submit either the Form for Archival Filing and 
Registration of a Foreign Trade Operator; the Qualification Certificate of Import and Export Enterprises; or the 
Certificate of Approv al for Foreign-Invested Enterprises. 
1347 To satisfy this requirement, an applicant must submit either the Form for Archival Filing and 
Registration of a Foreign Trade Operator; the Qualification Certificate of Import and Export Enterprises; or the 
Certificate of Approv al for Foreign-Invested Enterprises. 
1348 To satisfy this requirement, an applicant must submit either the Form for Archival Filing and 
Registration of a Foreign Trade Operator; the Qualification Certificate of Import and Export Enterprises; or the 
Certificate of Approv al for Foreign-Invested Enterprises. 
1349 China's first written submission, para. 796, fn 1138. 
1350 Exhibit CHN-345 and Exhibit CHN-529. WT/DS394/R 
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  approval" in Articles 5(2) and 8( 2) of China's Working Rules on E xport Licenses to refer to these 
same documents.   
7.946  However, the Panel does not understand the re ference to "documents of approval" in 
Article 11(7) of the 2008 Export Licence Administration Measures,  as applicable to goods subject to 
export licensing only, or the "other materials" in Articles 5(5) and 8(4) of the 2008 Export Licensing 
Working Rules , applicable generally, to refer to any enumerated documents.  As argued by the 
complainants, this unspecific language leaves ope n the possibility of expanding or modifying the 
documents or materials that may be required to r eceive an export licence.  Thus, it is unclear whether 
additional documents will be required from a particular  applicant in order to satisfy the requirement to 
submit a complete and accurate application in accordance with Article 12 of China's 2008 Export 
Licence Administration Measures , or Article 10 of China's Working Rules on Export Licenses .  In the 
Panel's view, these undefined requirements operate so as to leave Chinese License Authorities with 
open-ended discretion to restrict or prohibit the exportation of the subject raw materials.
1351   
7.947  China considers that, where a measure does not expressly or necessarily provide for WTO-
inconsistent conduct, any discretion to apply the rule  in a WTO-inconsistent manner is insufficient to 
render the measure WTO-inconsistent.1352 In view of that, China argues that the absence of any 
explicit limitation on this discretion in these measu res does not render an export licence a licence that 
restricts exportation and thus prohibited under Article XI:1. 
7.948  In the Panel's view, in the context of a licensing requirement, the open-ended discretion 
created by the unspecific and generalized require ment to submit an unqualified number of "other" 
documents of approval in Article 11(7), as applicable  to goods subject to export licensing only, or the 
"other materials" in Articles 5(5) and 8(4) of China's 2008 Export Licensing Working Rules , creates 
uncertainty as to an applicant's ability to obtain an export licence.  The authority to deny the licence is 
ever present because the conditions for granting it  are subject to the demands of the particular 
licensing authority. This uncertainty amounts to a r estriction on exportation that  is inconsistent with 
Article XI:1. 
7.949  The Panel reaches these conclusions in light of  the measures in its terms of reference, 
including the 2009 Export Licensing Catalogue .  In respect of  goods subject to export licensing only, 
China submits that Appendix 1 of the 2010 Export Licensing Catalogue removes any uncertainty by 
suspending the requirement for an applicant to submit any other documents of approval in 2010 in 
order to obtain a licence. 
7.950  Setting aside the issue of whether the 2010 Catalogue  falls within the Panel's mandate, the 
Panel observes that the reference in Appendix 1 of the 2010 Catalogue  does not modify or remove the 
documentation requirements in Article 11(7) of China's 2008 Export Licence Administration 
Measures or in China's 2008 Export Licensing Working Rules . Absent modification or repeal of 2008 
Export Licence Administration Measures , the Panel considers that Appendix 1 of the 2010 Catalogue  
does not remove the inconsistency of the probl ematic measures as pertains to manganese and 
unwrought zinc that are subject to export licensing administration only. 
                                                      
1351 The Panel foresees the possibility that other evid ence or documents may be desirable or necessary, 
in certain circumstances, to approve the authorization of an enterprise to export.  For instance, Article 11(5) of 
China's 2008 Export Licence Administration Measures  provides that the export ation of chemicals under 
supervision and control requires an applicant to submit documents of approval to the Office of State Leading 
Group for the Performance of the Convention on Prohibition of Chemical Weapons.  However, this would be a 
specific requirement and thus different from an undefined requirement. 
1352 China's first written submission, paras. 803-804.    WT/DS394/R 
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  7.951  The Panel lastly considers arguments of the United States and Mexico that China's export 
licensing regime for the raw materials at issue is inconsistent with Article XI:1 because it allows 
agencies discretion to determine th e quantities that can be exported
1353; impose minimum price 
conditions1354; or reduce quotas, stop issuing licences, or withdraw export rights under Article 21 of 
the CCCMC Coordination Measures .1355 
7.952  The measures identified by the complainants do not expressly state that licensing agencies 
may determine the quantities that can be exported.  The Panel concluded above that China's export 
licensing requirement is not inconsistent with Article XI:1 simply because a licence requirement is 
imposed with respect to "goods subject to ... export restrictions", in particular under Article 19 of 
China's  Foreign Trade Law .  The Panel explained that quantitati ve restrictions may be permitted on 
certain occasions, and accordingly, Article 19 was not on its face inconsistent with GATT 
Article XI:1.  The Panel also concluded that certain provisions at issue allow export licensing 
agencies a degree of discretion that may sometimes l ead to a decision not to grant an export licence.  
For these reasons, the Panel does not consider it n ecessary to address the United States' and Mexico's 
concern further. 
7.953  The United States and Mexico additionally refer to Article 40(3) of China's Measures for the 
Administration of Licensing Entities , which sets out the punishment that may be imposed on export 
licensing agencies that issue licen ces without following coordinated export prices.  The complainants 
have also identified this provision, and the use of penalties and punishment as prescribed in other 
provisions of Chinese law, in respect of their claim that China imposes a minimum export price 
requirement that is inconsistent with GATT Article XI :1.  The Panel considers this provision relates to 
the alleged restrictive effect of a minimum export price requirement.  The Panel will thus address the 
WTO-consistency of these aspects in Section VII.G of these Reports.   
7.954  Finally, Article 21 of the CCCMC Export Coordination Measures provides: "if more than half 
of the voting member companies of the coordi nation organization agree, CCCMC can request the 
competent authority to reduce [non-compliant companies'] quotas or stop issuing licences for the commodities or even withdraw part or all of their ex port rights".  China claims that this provision does 
not grant the CCCMC the authority to impose conditi ons on the issuance of licences, but provides "an 
internal framework for the CCCMC membership to vote on whether to request MOFCOM to take 
action to sanction non-compliant firms".
1356 
7.955  The Panel concluded above that licences may be used to implement an underlying restriction 
that is justified pursuant to another provision of the WTO Agreement; however, such a licence may 
not be applied in a manner that would impose an add itional limiting or restrictive effect.  In addition, 
the Panel explained that the discretion granted to ex port licensing agencies to refuse to grant an export 
licence may amount to an additional restriction that is inconsistent with GATT Article XI:1 if the 
refusal to grant such a licence does not relate to the underlying measure that is implemented through 
the licensing requirement. 
                                                      
1353 United States' first written submission, para. 340; Mexico's first written submission, para. 342; see  
2008 Export Licence Administration Measures , Article 6 (Exhibits CHN-342, JE-74); Export Quota Measures , 
Article 25 (Exhibit JE-76). 
1354 United States' first written submission, para. 340; United States' second written submission, 
para. 377, Mexico's first written submission, para. 342; Mexico's second written submission, para. 382; see 
Measures for the Administration of Licensing Entities , Article 40(3) (Exhibits CHN-358, JE-75), Bauxite 
Branch Coordination Measures , Article 7 (Exhibit JE-108). 
1355 United States' second written submission, para. 377; Mexico's second written submission, 
para. 382; see CCCMC Coordination Measures , Article 21 (Exhibit JE-107). 
1356 China's opening oral stat ement at the second substantive meeting, para. 368. WT/DS394/R 
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  7.956  On its face, Article 21 of the CCCMC Coordination Measures  allows the CCCMC to request 
a licensing agency to refuse issuance of licences solely on the basis that more than half of the voting 
member companies of the coordination organization re quest such action.  The Panel recalls from its 1 
October 2010 preliminary ruling its finding that the CCCMC Coordination Measures , among other 
measures, was outside the Panel's terms of reference.   Therefore, the Panel will not make findings on 
this measure. 
(c) Summary 
7.957  The Panel concludes above that licences that are granted without condition or those that 
implement an underlying measure that is jus tified pursuant to another provision of the WTO 
Agreement, such as GATT Article XI:2, XII, XVIII, XIX, XX or XXI, may be consistent with Article XI:1, so long as the licence does not by its nature have a limiting or restrictive effect.  
Conversely, a licence requirement that results in a restriction additional to that inherent in a 
permissible measure would be inconsistent with GA TT Article XI:1.  Such restriction may arise in 
cases where licensing agencies have unfettered or  undefined discretion to reject a licence application. 
7.958  The Panel finds that China's export licensing regime is not per se  inconsistent with 
Article XI:1 on the basis that it permits export licensing agencies to require a licence for "goods 
subject to ... export restrictions", as provided for in Article 19 of China's Foreign Trade Law .  The 
Panel finds, however, that the discretion that arises  from the undefined and gene ralized requirement to 
submit an unqualified number of "other" documents  of approval in Article 11(7) of China's 2008 
Export Licence Administration Measures , as applicable to goods subject to export licensing only, or 
the "other materials" in Articles 5(5) and 8(4) of China's Working Rules on Export Licenses , amounts 
to an additional restriction in consistent with Article XI:1. 
7.959  The Panel makes no findings as to whether the cl aims of the United States and Mexico that 
40(3) of China's Measures for the Administration of Licensing Entities  or Article 21 of the CCCMC 
Coordination Measures  are inconsistent with GATT Article XI:1, as these measures fall outside its 
terms of reference.  The Panel will consider in S ection VII.G below whether Article 40(3) of China's 
Measures for the Administration of Licensing Entities  is inconsistent with Article XI:1 of the 
GATT 1994. 
3. Whether China's export licensing system on  certain forms of bauxite, coke, fluorspar, 
manganese, silicon carbide and zinc is inconsistent with Paragraph 1.2 of China's 
Accession Protocol and Paragraphs 162 and 165 of China's Working Party Report 
7.960  In addition to their challenge under Article XI :1 of the GATT 1994, the complainants argue 
that China's export licensing system applied to bauxite, coke, fluorspar, manganese, silicon carbide 
and zinc is also inconsistent with China's obliga tions in Paragraph 1.2 of China's Accession Protocol 
read in combination with Paragraphs 162 and 165 of China's Working Party Report.
1357 The 
complainants argue that China committed to elim inate any non-automatic export licence requirements 
and to remove export restrictions  unless they could be justified. 
7.961  To the extent the Panel finds China's export licence requirement to be inconsistent with 
Article XI:1, China requests that the Panel exerci se judicial economy with respect to claims under 
Paragraphs 162 and 165 of its Work ing Party Report.  China consider s the complainants' claims under 
these provisions to be "identical" to those under Article XI:1, as assumed by all Members under 
Article XI:1.  It argues that making findings under these provisions "would add nothing to the 
                                                      
1357 United States' first written submission, paras. 34 3-347; European Union's first written submission, 
paras. 323-324; Mexico's first written submission, paras. 345-349.  WT/DS394/R 
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  resolution of this dispute, nor would it aid in any potential implementation."
1358  R e g a r d l e s s ,  a s  
discussed in the context of the complainants' Articl e XI:1 claim above, China submits that its export 
licence requirement is automatic and therefore places no restriction or limit on the quantity of exports 
of bauxite, coke, fluorspar, manganese, silicon carbide  and zinc.  China additionally considers that it 
has "taken steps ... to ensure that it ... abides by  WTO rules in respect of non-automatic licensing."1359  
For these reasons, China considers that it has not acted  inconsistently with Pa ragraphs 162 and 165 of 
its Working Party Report. 
7.962  The Panel recalls that Article 1.2 of China's Ac cession Protocol is an "integral part of the 
WTO Agreement" and therefore contains enforceab le commitments including those "commitments 
referred to in paragraph 342 of the Working Party Report"1360  Paragraph 342 of China's Working 
Party Report additionally refers to commitments  undertaken by China that are reproduced in 
paragraphs 162 and 165 of the Working Party Report. 
7.963  Paragraph 162 of China's Working Party Report provides: 
"...China confirmed that China would abide by WTO rules in respect of non-
automatic export licensing and export restri ctions.  The Foreign Trade Law would 
also be brought into conformity with  GATT requirements.  Moreover, export 
restrictions and licensing would only be app lied, after the date of accession, in those 
cases where this was justified by GATT provisions..." 
7.964  Paragraph 165 of China's Working Party Report provides: 
"...China confirmed that upon accession, remaining non-automatic restrictions on 
exports would be notified to the WTO annua lly and would be eliminated unless they 
could be justified under the WTO Agreement or the Draft Protocol..." 
7.965  Thus, Paragraph 162 requires that China's export licensing requirements, to the extent they are 
"non-automatic", would be brought into conform ity with the GATT. Under the second sentence of 
Paragraph 162, export licensing or restrictions may on ly be applied if justified under an provision of 
the GATT. 
7.966  The Panel concluded above that China's e xport licence system as imposed on bauxite, 
fluorspar, silicon carbide, coke and zinc is not in consistent with GATT Article XI:1 because of the 
mere fact that it applies to "goods subject to ... e xport restrictions".  The Panel found, however, that 
the discretion that arises from the undefined a nd generalized requirement to submit an unqualified 
number of "other" documents of approval in Artic le 11(7) of China's Export Licensing Measures, as 
applicable to goods subject to export licensing only, or  the "other materials" in Articles 5(5) and 8(4) 
of China's Working Rules on Export Licenses, amounts to an additional restriction inconsistent with Article XI:1.  China did not seek to justify an y aspect of its export licensing system under any 
provision of the GATT 1994.  
7.967  The Panel recalls that China requested the Panel to exercise judicial economy in respect of the 
complainants' additional claims under Paragraphs 162 and 165 of China's Working Party Report.  The 
Appellate Body has stated that panels are not oblig ed to address all legal claims raised by parties, 
                                                      
1358 China's first written submission, para . 808, referring to Panel Report, EC – Salmon , para. 7.636. 
1359 China's response to second set of Panel questions, question No. 66. 
1360 China's Accession Protocol (Exhibit JE-2); see paras. 7.620 to 7.621 above. WT/DS394/R 
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  explaining that "[n]othing in [Article 11 of the DSU]
1361 or in previous GATT practice requires  a 
panel to examine all legal claims made by the complaining party."1362  The Appellate Body later 
explained that "a panel has to address those claims on which a finding is necessary in order to enable 
the DSB to make sufficiently precise recommenda tions and rulings so as to allow for prompt 
compliance by a Member with those recommendati ons and rulings "in order to ensure effective 
resolution of the disputes to the benefits of Members."1363  
7.968  Paragraph 162 provides that export licensing may only be applied if justified under any 
provision of the GATT.  Paragraph 165 provides  that "non-automatic restrictions" would be 
eliminated unless they could be justified under the WTO Agreement or Draft Protocol.  In the latter 
respect, the term "non-automatic restrictions" is not defined, although Paragraph 162 notably refers to 
"restrictions" and "licensing" separately.   
7.969  It would seem that three outcomes may ari se in respect of China's export licensing 
requirements at issue.  First, the export licensing requirements at issue may be inconsistent with a 
provision of the WTO Agreement and may not be jus tified.  Second, the export licensing requirements 
may be inconsistent with a particular provision, su ch as Article XI:1 of the GATT but may be justified 
by a provision of the WTO Agreement.  Third, as explained above, the export licensing requirements 
may not be inconsistent with an y particular provision of the GATT.  Under each circumstance, the 
question arises whether the particular licensing requi rements would nevertheless  be inconsistent with 
China's Accession Protocol. 
7.970  The Panel does not consider that findings under Paragraph 162 or Pa ragraph 165 would be 
required to resolve the dispute in the first case,  discussed in the preceding paragraph, i.e., where 
export licensing requirements at issue may be inconsistent with a provision of the WTO Agreement and may not be justified.  The Panel recalls its conclusion that, if particular export requirements 
operate such that by their nature they have a restrictive or limiting effect on exportation beyond the 
restriction arising from the underlying permissible re striction itself, then such requirements would not 
be permissible under Article XI:1 of the GATT 1994.  In this dispute, for goods subject to export 
licensing administration only, the Panel conclude d that the requirements of Article 11(7) of 2008 
Export Licence Administration Measures  and Articles 5(5) and 8(4) of 2008 Export Licensing 
Working Rules  are inconsistent with Article XI:1 for this reason.  China has not sought to justify these 
requirements under any provision of the WTO Agreemen t.  In the Panel's view, no additional finding 
of violation under Paragraph 16 2 or Paragraph 165 would add to resolving the matter.   
7.971  The Panel further does not see how findings unde r Paragraph 162 or Pa ragraph 165 would be 
required to resolve the dispute where export licensi ng requirements may be inconsistent but may be 
justified by a provision of the WTO Agreement.  If particular export licensing requirements are 
inconsistent but somehow justified, then, by the terms of Paragraph 162 and Paragraph 165 of China's 
Working Party Report, those requirements may be app lied.  Again, no finding under Paragraph 162 or 
Paragraph 165 would aid or in fact is needed to resolve the matter. 
                                                      
1361 Article 11 of the DSU provides, in relevant part:"...a panel should make an objective assessment of 
the matter before it, including an objective assessment of the facts of the case and the applicability of and 
conformity with the relevant covered agreements, and make such other findings as will assist the DSB in 
making the recommendations or in giving the rulings provided for in the covered agreements." 
1362 Appellate Body Report, US – Wool Shirts and Blouses , p. 18, DSR 1997:I, 323, at p. 339; DSR 
1997:I, at p. 339-340 citing inter alia, EEC – Import Restrictions , BISD 30S/129, para. 33;  Canada –FIRA , 
BISD 30S/140, para. 5.16;  US –Sugar Quota , BISD 31S/67, paras. 4.5-4.6;  Japan – Semi-Conductors , BISD 
35S/116, para. 122;  and US –MFN Footwear , BISD 39S/128, para. 6.18. 
1363 Appellate Body Report, Australia – Salmon , para. 223.  WT/DS394/R 
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  7.972  Finally, the question arises whether findings in  respect of Paragraph 162 or Paragraph 165 
would be required to resolve the dispute wher e an export licensing requirement may not be 
inconsistent with any particular GATT provision .  The Panel concluded above that the export 
licensing requirement imposed under China's Foreign Trade Law  applied to "goods subject to ... 
export restrictions" is not per se  inconsistent with Article XI:1.  In this dispute, the complainants have 
not submitted evidence beyond the text of certain provisions of China's Foreign Trade Law  to 
demonstrate that export licensing applied to the raw materials at issue imposes  additional restrictions 
to those which may arise from the underlying export quota.  The Panel explained its view above that 
the inquiry whether or not a licence requirement is  or is not permissible under Article XI:1 does not 
end at the text of the measure imposing the licensi ng requirement.  In the absence of further evidence, 
the Panel considers that additional findings under Paragraphs 162 and 165 of China's Working Party 
Report would not aid in resolving the dispute.
1364  The Panel declines to consider the complainants' 
claim while bearing in mind its findings that the und erlying export quotas at issue are not justified 
pursuant to Article XI:2 or Article XX of the GATT 1994, and bearing in mind that China has not 
sought to justify its export licensing regime pur suant to any provision of the GATT or the WTO 
Agreement. 
7.973  For the foregoing reasons, the Panel declines to  make findings under Paragraphs 162 and 165 
of China's Working Party Report. 
4. Whether China's export licensing system on  certain forms of bauxite, coke, fluorspar, 
manganese, silicon carbide and zinc is inco nsistent with paragraph 1.2 and 5.1 of 
China's Accession Protocol and paragraphs 83 and 84 of China's Working Party Report 
7.974  In addition to its claims under Article XI:1 of the GATT 1994 and Paragraphs 162 and 165 of 
China's Working Party Report, the European Union argues that China's export licensing system is 
inconsistent with paragraphs 5.1 and 1.2 of China's Accession Protocol, in combination with 
paragraphs 83 and 84 of China's Working Party Re port.  The European Union argues that China's 
licensing system amounts to an "examination and approval of trading rights" system in violation of paragraph 84(a) of Chin a's Working Party Report.
1365  By allowing licence issuing agencies discretion 
to require undefined "other" documents, the European Union argues that China fails to grant to "all 
enterprises" in China the right to tr ade the raw materials at issue in violation of Paragraphs 83(d) and 
84(a) of China's Working Party Report.1366  Finally, by granting "broad and unfettered discretion" to 
export licensing agencies to either accept or refuse ap plications by foreign enterprises and individuals, 
the European Union argues that Ch ina fails to grant foreign enterprises and individuals the right to 
                                                      
1364 The Panel additionally takes note, as raised by China in its 18 March comments to the Panel, that 
the complainants have presented new argumentation, at a la te stage in the proceedings,  in arguing that  China's 
export licensing requirements are inconsistent with Paragraphs 162 and 165 of China's Working Party Report.  
See United States' response to Panel question Nos. 61 and 64 following the second substantive meeting; 
European Union's response to Panel question No. 61 following the second substantive meeting; Mexico's 
response to Panel question Nos. 61 and 64 following the second substantive meeting; United States' comments 
on China's response to Panel question Nos. 61 and 66 following the second substantive meeting; European 
Union's comments on China's response to Panel question Nos. 61 and 66 following the second substantive 
meeting; Mexico's comments on China's response to Panel question Nos. 61 and 66 following the second 
substantive meeting.  The European Union argues in particular that that Paragraph 162 "introduces a specific 
obligation for export licences in general, irrespective of  whether they are 'automatic' or 'non-automatic'" – 
namely, that such licenses "would only be applied ... where ... justified by GATT provisions".  European Union's 
comments on China's response to Panel question No. 66 following the second substantive meeting, paras. 85 and 
86.  China submits that this position fundamentally changes the nature of the European Union's claim and 
compromises due process. 
1365 European Union's first written submission, para. 334. 
1366 European Union's first written submission, para. 335. WT/DS394/R 
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  trade in a non-discriminatory manner, in violatio n of paragraph 84(b) of China's Working Party 
Report.
1367 
7.975  To the extent the Panel finds China's export licence requirements to be inconsistent with 
Article XI:1, China requests that the Panel also exercise judicial economy with respect to the 
complainants' claims.  China considers these claims are "identical" to those under Article XI:1, and 
that making findings under these provisions "'would add nothing to the resolution of this dispute, nor 
would it aid in any potential implementation.'"1368  Regardless, as discussed in the context of the 
complainants' Article XI:1 claim above, China submits that its licensing system does not restrict or 
limit on the quantity of exports of bauxite, coke, fluorspar, manganese, silicon carbide and zinc.  
Thus, China requests the Panel to rej ect the European Union's claims.   
7.976  The Panel recalls that Article 5.1 of China's Accession Protocol provides: 
"Without prejudice to China's right to regulate trade in a manner consistent with the 
WTO Agreement...within three years after accession, all enterprises in China shall 
have the right to trade in all goods...excep t for those goods listed in Annex 2A... Such 
right to trade shall be the right to im port and export goods...For those goods listed in 
Annex 2B, China shall phase out limitation on the grant of trading rights pursuant to the schedule in that Annex.  China shall complete all n ecessary legislative procedures 
to implement these provisions during the transition period." 
7.977  As noted, Article 1.2 of China's Accession Protocol is an "integral part of the 
WTO Agreement" and therefore contains enforceab le commitments including those "commitments 
referred to in paragraph 342 of the Working Party Report"
1369  Paragraph 342 of China's Working 
Party Report additionally refers to commitments  undertaken by China that are reproduced in 
paragraphs 83 and 84 of the Working Party Report. 
7.978  Paragraph 83(d) of China's Working Party Report provides: 
"...China also confirmed that within th ree years after accession, all enterprises in 
China would be granted the right to trade." 
7.979  Paragraph 84(a) of China's Working Party Report provides: 
"...China reconfirmed that China would eliminate its system of examination and 
approval of trading rights within three years after accession.  At that time, China would permit all enterprises in China a nd foreign enterprises and individuals...to 
export...all goods..." 
7.980  Paragraph 84(b) of China's Working Party Report provides: 
"With respect to the grant of trading right s to foreign enterprises and individuals... 
China confirmed that such rights would be granted in a non-discriminatory and non-discretionary way....[A]ny requirements for obtaining trading rights would be for 
customs and fiscal purposes only and would not constitute a barrier to trade..." 
                                                      
1367 European Union's first written submission, para. 336. 
1368 China's first written submission, para . 811, referring to Panel Report, EC – Salmon , para. 7.636. 
1369 China's Accession Protocol (Exhibit JE-2); see paras. 7.620 to 7.621 above.  WT/DS394/R 
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  7.981  As noted in paragraph 7.653 above, the Appellate Body in China – Audiovisual Products and 
Services , addressed the meaning of China's right to regulate trade under Article 5.1 of China's 
Accession Protocol.  Of particular relevance to these claims of the complainants, the Appellate Body 
explained that the "obligations assumed by China in r espect of trading rights, which relate to traders" 
is "closely intertwined" with "obligations imposed  on all WTO Members in respect of their regulation 
of trade in goods", including those under Article XI of the GATT 1994.
1370 
7.982  The Panel concluded in paragr aph 7.938 above that China's export license system as imposed 
on bauxite, fluorspar, silicon carbide , coke and zinc is not incons istent with GATT Article XI:1 
because of the mere fact that it applies to "goods subj ect to ... export restrictions".  The Panel found, 
however, that the discretion that arises from the unde fined and generalized requirement to submit an 
unqualified number of "other" documents of approv al in Article 11(7) of China's Export Licensing 
Measures, as applicable to goods subject to export lic ensing only, or the "other materials" in Articles 
5(5) and 8(4) of China's Working Rules on Export Licenses, amounts to an additional restriction 
inconsistent with Article XI:1.  China did not seek to justify any aspect of its export licensing system 
under any provision of the GATT 1994.  
7.983  The Panel fails to see how further findings in respect of Paragraphs 83 and 84 of China's 
Working Party Report would aid in resolving the disp ute.  The Panel recalls that China requested the 
Panel to exercise judicial economy in respect of the European Union's claims. As mentioned in 
paragraph 7.967 above, the Appellate Body has clarif ied that "a panel has the discretion to determine 
the claims it must address in order to resolve the dispute between the parties."1371  I n  l i g h t  o f  i t s  
finding that the requirements of Article 11(7) of China's Export Licensing Measures and Articles 5(5) and 8(4) of China's Working Rules on Export Licen ses are inconsistent with GATT Article XI:1, and 
are not justified, the Panel considers that furthe r findings on this matter would not be necessary to 
resolve the dispute.  Therefore, the Panel does not make findings in this regard. 
G. M
INIMUM EXPORT PRICES  
7.984  The complainants claim that China imposes a minimum export price (MEP) requirement for 
certain forms of bauxite coke, fluorspar, ma gnesium, silicon carbide, yellow phosphorus and zinc1372 
that constitutes a restriction on exportation that is inconsistent with Article XI:1 of the GATT 1994.  
They submit that coordination of export prices con tinued to be enforced through application of the 
Price Verification and Chop (PVC) export clearance pr ocess even after the apparent repeal of this 
procedure in 26 May 2008.1373 The complainants further claim that the manner in which China 
administers the MEP requirement through the involvement of the CCCMC in the PVC export 
clearance process is inconsistent with the obligati on to administer laws in a uniform, impartial and 
reasonable manner under Article X:3(a) of the GATT 1994.1374  Finally, the complainants claim that 
China failed to publish certain measures providing rules and details on how the CCCMC coordinates 
export prices in contravention of Article X:1 of the GATT 1994.1375 
                                                      
1370 Appellate Body Report, China – Publications and Audiovisual Products , para. 226. 
1371 Appellate Body Report, India – Patents (US), para. 87. 
1372 The specific forms of the raw materials subject to the United States' claims are identified in Exhibit 
JE-7 and paragraph 2.2 of the Descriptive Part to these Reports. 
1373 United States' first written submission, paras. 36 0-361; European Union's first written submission, 
paras. 364-365; Mexico's first written submission, paras. 363-364. 
1374 United States' first written submission, paras. 36 4-374; European Union's first written submission, 
paras. 368-378; Mexico's first written submission, paras. 367-377. 
1375 United States' first written submission, paras. 37 5-381; European Union's first written submission, 
paras. 379-385; Mexico's first written submission, paras. 378-384. WT/DS394/R 
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  7.985  China contends that it "abandoned" price coordination in 2008 before the Panel's 
establishment
1376, and therefore requests the Panel not to make findings on measures identified in 
connection with the complainants' MEP-related claims.  In addition, China asserts that the 
complainants have failed to establish that Ch ina continued to impose and enforce an MEP 
requirement after the repeal of export price coordination in 20081377, or that an alleged MEP-
requirement restricts export in a manne r inconsistent with Article XI:1.1378  Finally, China asserts that 
the Panel should not make findings on the complain ants' claims under Articles X:1 and X:3(a) of the 
GATT 1994. China submits that the Panel should not make findings on measures governing the 
administration of the PVC system because such sy stem was repealed and the measures no longer 
exist.1379  China further argues that the measures which are alleged not to have been published either 
no longer apply or have been formally repealed , and therefore require no publication pursuant to 
Article X:1 of the GATT 1994.1380 
7.986  The Panel will address the complainants' claims under Articles XI:1, X:1 and X:3(a) of the 
GATT 1994 separately below.  Before doing so, the Panel will address measures within its terms of 
reference.  The Panel will then address China's claim that it effectively abandoned export price 
coordination in 2008, prior to the Panel's estab lishment.  Thereafter, we will consider the 
complainants' assertion that China continued to en force export price coordination, even after the 
repeal of the PVC procedure by the 2008 PVC Noti ce.  In the event that China had in a place a 
minimum price requirement at the time of the Panel's establishment, we will address whether this 
requirement is inconsistent with  Articles XI:1, X:1 and X:3(a). 
1. MEP-related measures within the Panel's terms of reference 
7.987  The Panel recalls from its 1 October 2010 preliminary ruling its finding that only six 
measures referred to by the complainants in bot h their consultation requ ests and Panel Requests 
would form part of the Panel's terms of reference.1381  In its preliminary ruling request, China asked 
the Panel to find, inter alia , that the complainants' Panel Requests failed to comply with the 
requirements of Article 6.2 of the DSU because "Sec tion III" of the complainants' Panel Requests did 
not identify clearly and specifically the measur es under challenge, including those concerning its 
MEP-related claims, or provide a brief summary of  the legal basis sufficient to present the problem 
clearly.1382 
7.988  To recall, in their Panel Requests, the complain ants identified nine measures that related to 
their MEP-related claims.  Three of these measures were not listed in the complainants' consultation 
requests.  In the first phase of its preliminary ruling,  the Panel stated that it would reserve its decision 
on whether "Section III" of the complainants' Pane l Requests identify clearly and specifically the 
measures under challenge (including the complainan ts' MEP-related claims), and whether "Section 
III" of their requests provides a brief summary of the legal basis sufficient to present the problem 
clearly, until after it had received the complainants' first written submissions. 
7.989  In their first written submissions, the complain ants referred to six additional MEP-related 
measures that were not included in their consultatio n or Panel Requests.  The complainants did not 
                                                      
1376 China's first written submission, para. 838; China's response to Panel question No. 1, para. 20. 
1377 China's first written submission, paras. 842-853. 
1378 China's first written submission, paras. 854-865. 
1379 China's first written submission, para. 867. 
1380 China's first written submission, paras. 868-872. 
1381 See paragraphs 1.10 to 1.13 above; Annex F to these Reports. 
1382 The text of the complainants' Panel Requests is identical.  WT/DS394/R 
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  indicate any particular basis for mentioning these additional measures in their first written 
submissions. 
7.990  Following receipt of the complainants' and Chin a's first written submissions, the Panel asked 
the complainants to indicate which measures are properly before the Panel whether due to their 
inclusion in the consultation and/or Panel Request , or as an amendment, extension, replacement 
measure, renewal measure or implementing measure.
1383  The complainants indicated which measures 
that they considered to be in the Panel's terms of reference.1384 
7.991  On 1 October 2010, the Panel issued the second phase of its preliminary ruling.  The Panel 
concluded that the complainants' Panel Requests,  as clarified by their first submissions, provide 
sufficient connection between the measures listed in "Section III" and the listed claims of violations, 
with the exception of the European Union's publi cation claim concerning coke quotas.  In addition, 
the Panel concluded that alleged measures referred to  solely in the complainants' Panel Requests, but 
not in their consultation requests, and those alleged measures referred to by the complainants in their 
subsequent submissions, were not pr operly before the Panel as measures at issue.  On this basis, the 
Panel concluded that only six MEP-re lated measures remained in the Panel's terms of reference. These 
are: (1) Measures for Administration of Trade Social Organizations1385; (2) Regulations for Personnel 
Management of Chambers of Commerce1386; (3) 1994 CCCMC Charter1387; (4) 2001 CCCMC 
Charter1388; (5) Export Price Penalties Regulations1389; and (6) Measures for Administration of 
Licensing Entities.1390 
7.992  The complainants submit that the Panel's fi ndings in the second phase of its preliminary 
ruling that certain MEP-related measures are outside the Panel's terms of reference were not made in response to a preliminary ruling request and cannot be part of a ruling.  The United States argues that 
the findings pertaining to MEP-related measures in the second phase of the Panel's preliminary ruling were not made in response to a preliminary ruling under the Panel's Working Procedures.  Moreover, 
it argues that China's first written submission did not include a request for a preliminary ruling.  Even 
if China had made a second preliminary ruling requ est, the United States argues that the Panel did not 
determine a time prior to the first substantive m eeting for the complainants to respond to China's 
terms of reference arguments on the MEP-related measu res. Therefore, the complainants consider the 
aspects of the Panel's preliminary ruling regarding these measures to be invalid and request the Panel 
to re-examine de novo  its decision on these measures.
1391  The United States submits further that, 
under the DSU and Panel's Working Procedures, the co mplainants are permitted to make rebuttals – 
including on the status of excluded MEP-rela ted measures – until the second substantive meeting.1392 
7.993  The Panel considers that it was permitted to address whether the particular MEP-related 
measures that either were not listed in the complain ants' consultation requests, or were not included in 
their Panel Requests, were within its terms of refe rence.  The Appellate Body clarified that Panels 
may address "issues which go to the root  of their jurisdiction – that is, to their authority to deal with 
and dispose of matters ... if necessary, on their own motion – in order to satisfy themselves that they 
                                                      
1383 Panel question No. 1(a) and (b). 
1384 See complainants' response to Panel question No. 1 following the first substantive meeting; United 
States' Attachment – Chart A re Question 1(a) & (b). 
1385 Exhibits CHN-313, JE-101. 
1386 Exhibits CHN-315, JE-102. 
1387 Exhibit JE-86. 
1388 Exhibits CHN-16, JE-87. 
1389 Exhibits CHN-350, JE-113. 
1390 Exhibits CHN-358, JE-75. 
1391 United States' second written submission, paras. 408-414. 
1392 United States' second written submission, para. 416. WT/DS394/R 
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  have authority to proceed".
1393  The Panel sought to clarify the scope of its mandate concerning the 
complainants' MEP-related claims.  
7.994  With respect to three measures relating to the PVC procedure that were included in the Panel 
Requests but not the consultations requests1394, the Panel notes that all of the particular measures 
sought to be included in the Panel's terms of re ference existed well in advance of the time of 
consultations and the submission of the complainan ts' Panel Requests.  These additional instruments 
are not amendments to any of the measures listed in the consultation requests that came into existence 
between the time of consultations and submission of the Panel Request s.  The Panel fails to see any 
basis for the complainants not to have included th ese measures, due to the fact that these measures 
were available to the complainants. Moreover,  these measures as presented to the Panel do not 
identify any of the products at issue in this dispute.1395 
7.995  Similarly, with respect to measures that are not  included in either the consultation or Panel 
Requests, but are alleged to be "implementing" meas ures, the Panel again notes that all of the alleged 
additional "implementing measures" set out by th e complainants in their first written submissions1396 
existed well in advance of the time of consultati ons and the submission of the complainants' Panel 
Requests.  The Panel thus sees no reason why the co mplainants opted to delay or withhold identifying 
these measures. It is evident from the complainants' submissions th at these measures were identified 
in connection with statements made and eviden ce submitted in the context of various US court 
proceedings concerning allegations of price-fixi ng and other anticompetitive activities, dating as far 
back as 2006.1397  In addition, the complainants failed to offer any elaboration as to how these 
measures are "implementing measures" to basic fra mework laws until the conclusion of their second 
written submissions.1398 
                                                      
1393 Appellate Body Report, Mexico – Corn Syrup (Article 21.5 – US) , para. 36. 
1394 In particular, Notice of the Rules on Price Reviews of Export Products by the Customs (not 
submitted); CCCMC PVC Rules (Exhibit JE-127); and Online PVC Instructions (Exhibit JE-123). 
1395 The complainants consider that those instruments included in the Panel Requests but not the 
consultations requests should be considered as measures at issue in this dispute because the measures are "all 
part of the same PVC procedure of which the  2002 PVC Notice (Exhibit JE-122) and 2004 PVC Notice (Exhibit 
JE-121), which were consulted on, form a part", and because these additional instruments "relate to the same 
procedure and same product at issue under the 2002 PVC Notice and the 2004 PVC Notice".  The complainants 
argue that the inclusion of these m easures therefore does not "expand the scope of the dispute". (See, e.g., 
United States' second written submission, para. 440).  The complainants consider that the Appellate Body 
Report on US – Continued Zeroing is "apposite" to an assessment of whether the additional PVC measures 
should be included in the Panel's terms of reference.  We note, however, that the Appellate Body in that appeal 
found that the measures subject to the complainant's challenge "encompass[ed] the anti-dumping duties resulting 
from the proceedings identified in the consultations requ est" and "additional measures relate to the same duties 
identified in the consultations request, and the legal basi s of the claims raised is the same". (Appellate Body 
Report on US – Continued Zeroing , paras. 226, 228)  As noted, the complainants have not provided cogent 
reasons for the failure to raise these measures at th e time of consultations.  Moreover, the complainants' 
submitted versions of the 2002 and 2004 PVC Notices, which are alleged to form the basis for the later inclusion 
of the Notice of the Rules on Price Reviews of Export Products by the Customs (not submitted); CCCMC PVC 
Rules (Exhibit JE-127); and Online PVC Instructions (Exhibit JE-123) do not include reference to any of the 
raw materials at issue in this dispute.   
1396 In particular, CCCMC Export Coordination Measures (Exhibit JE-107); CCCMC Bauxite Branch 
Coordination Measures (Exhibit JE-108); Bauxite Branch Charter (Exhibit JE-112); and "system of self 
discipline" (see complainants' first written submission, paragraph 205). 
1397 See United States' first written submission, para s. 207-208, fns. 284, 285, 288, 289, 209; 
MOFCOM Statement in In re Vitamin C Antitrust Litigation , para. 3 (Exhibit JE-111). 
1398 The complainants argue in their second written submissions that measures may be included in a 
panel's terms of reference if the panel request refers to "implementing measures", and those measures can be  WT/DS394/R 
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  7.996  For the foregoing reasons, and in light of its  preliminary ruling, the Panel will limit any 
rulings on the complainants' MEP-related claims to the six measures that appear in the complainants' 
Panel Requests.  Notwithstanding this view, the Pa nel may consider other instruments and documents 
referred to by the complainants – though outside its te rms of reference –  in order to assess fully the 
legal situation and operation of  an MEP requirement in China.
1399  The Panel does not consider the 
fact that certain measures are outside the Panel' s terms of reference to mean that such laws, 
regulations or instruments did or do not exist, or should be completely excluded from the Panel's 
assessment.  The Panel will not, however, make  findings or recommendations on any laws, 
regulations or instruments that are excluded from its terms of reference.   
2. Whether China enforced a coordinated MEP req uirement on exporters of bauxite, coke, 
fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc at the time of the 
Panel's establishment 
7.997  The complainants argue that China imposes an MEP requirement for certain forms of bauxite 
coke, fluorspar, magnesium, silicon car bide, yellow phosphorus and zinc.1400  The complainants argue 
that China coordinates export prices for the products  at issue through a "system of self-discipline" 
based on informal statements and oral agreements  between traders and export regulators and where 
the CCCMC directs commodity-specific branches or coordination groups.1401  The complainants 
submit price data for bauxite and yellow phosphorus, in particular, to show that China set coordinated 
export prices for these two products.1402  The complainants also alle ge that China enforces these 
coordinated export prices through the applicati on of penalties imposed by MOFCOM against non-
conforming exporters as well as penalties imposed ag ainst licensing authorities that issue licences to 
non-conforming exporters.1403  Finally, the complainants alle ge that China enforces coordinated 
prices, at least on yellow phosphor us through the use of the PVC procedure which permits customs 
authorities to deny clearance to yellow phosphorus exports that do not conform to the minimum 
coordinated price. 1404  The complainants submit evidence of price data and screenshots of online web 
pages from 2008 and 2009 in arguing that the coordina tion of export prices continued to be enforced 
through application of the PVC export clearance pr ocess even after the apparent repeal of this 
procedure on 26 May 2008.1405   
                                                                                                                                                                     
considered to "implement" measures th at are specifically identified in the panel request.  See United States' 
second written submission, para 421, citing Panel Report, Japan – Film , para 10.8. 
1399 Appellate Body Report, EC – Selected Customs Matters , para. 188 (stating that "[a] panel is not 
precluded from assessing a piece of evidence for the me re reason that it pre dates or post-dates its 
establishment"). 
1400 The specific forms of the raw materials subject to the United States' claims are identified in Exhibit 
JE-7 and paragraph 2.2 of the Descriptive Part to these Reports. 
1401 United States' first written submission, para. 349-351; European Communities' first written 
submission, para. 353-355; Mexico's first written submission, para. 352-354; United States' comments on 
China's response to Panel question No. 10; CCCMC website pages, 5-7 (Exhibit JE-88). 
1402 See United States' first written submission, para. 226; European Union's first written submission, 
paras. 230; Mexico's first written submission, para. 229; United States' second written submission, para. 391; 
European Union's second written submission, para. 172; Mexico's first written submission, para. 394; Exhibit 
JE-126. 
1403 United States' first written submission, paras. 35 2-355; European Union's first written submission, 
para. 356-359; Mexico's first written submission, para. 355-358; Complainants' response to Panel question No. 
13. 
1404 United States' first written submission, paras.  356-359; European Communities' first written 
submission, paras. 360-363; Mexico's first written submi ssion, paras. 359-362; Complainants' response to Panel 
question No. 11. 
1405 United States' first written submission, paras. 357, 360; European Communities' first written 
submission, paras. 361, 364; Mexico's first written subm ission, paras. 360, 363; United States' second written WT/DS394/R 
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  7.998  China alleges that it abandoned price coordi nation in 2008 through measures submitted by 
MOFCOM
1406, and requests the Panel not make findings in  respect of the complainants' MEP-related 
claims.  Prior to 2008, China submits that it d esignated MOFCOM to coordinate export prices to 
minimize the possibility of injurious dumpi ng of Chinese exports by individual exporters.1407   China 
argues that it repealed a number of measures that  authorized the coordination of export prices, the 
sanction of exporter licensing entities, and use of the PVC procedure.1408  It considers that any 
outstanding measures that were not formally repealed became effectively "inapplicable".1409  C hi na  
considers that findings on these measures would ser ve no purpose because the measures do not have 
legal effect such that they could violate WT O obligations or nullify or impair benefits.1410  China 
further submits that the complainants have not pr ovided evidence – either through reference to events 
that occurred between 2001 and 20071411, screenshots taken from the CCCMC website after 20081412 
or price data on yellow phosphorus  and bauxite taken in May 20081413 – to support its allegations that 
enterprises were required to coordi nate export prices after 2008.   
7.999  The Panel will address the various allegations by  the complainants that China enforces an 
MEP requirement on exporters of cer tain raw materials.  The Panel explained above that it would not 
make rulings or recommendations on any laws, regul ations or instruments that are excluded from its 
terms of reference, but may consider them in asse ssing fully the legal situation and operation of an 
MEP requirement in China.   
7.1000  The Panel will first consider whether these measu res may form the basis of a WTO violation. 
Then, the Panel will assess the ope ration of these measures and whet her these measures remain in 
force or have been repealed as argued by China. Finally, the Panel will consider the complainants' 
allegation that China continued to coordinate and enforce an MEP requi rement even after the apparent 
repeal of this procedure on 26 May 2008. 
(a) Whether the measures at issue may be subject to WTO dispute settlement 
7.1001  A first issue facing the Panel is whether the measures presented by the complainants can be 
considered WTO measures under the DSU and WTO Dispute Settlement Mechanism for purposes of 
the complainants' claims.  The Panel recalls th at certain of the measures identified by the 
complainants are not formal legislation but are ch arters and regulations of non-governmental bodies, 
such as the CCCMC or CCCMC Bauxite Branch. 
7.1002  The complainants argue that China's Cham bers of Commerce, including the CCCMC, 
"function as entities under MOFCOM's direct and active supervision and, accordingly, play a central 
role in regulating the trade of China's industries".1414  Through its intervention in a 2006 US court 
                                                                                                                                                                     
submission, paras. 448, 450; European Union's second  written submission, para. 172; Mexico's first written 
submission, paras. 365, 368. 
1406 China's response to Panel question No. 1, para. 20. 
1407 China's first written submission, paras. 838-847;  China's second written submission, para. 565; 
Normal Export Price Provisions , Article 5 (Exhibit CHN-50). 
1408 China's first written submission, para. 838. 
1409 China's second written submission, paras. 567-570; Exhibit CHN-438. 
1410 China's first written submission, paras. 47, 52, 57-67. 
1411 China's first written submission, paras. 842. 
1412 China's first written submission, paras. 839, 843. 
1413 China's first written submission, para. 851,  Exhibits CHN-361, CHN-362, CHN-363. 
1414 United State's first written submission, para. 207, referring to Brief of Amicus Curiae: MOFCOM. 
In Re Vitamin C Antitrust Litigation (E.D. NY Jun. 26, 2006), at p. 5 (Exhibit JE-98).    WT/DS394/R 
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  proceeding
1415, the complainants submit that China referred to its authority over China's Chambers of 
Commerce, including the CCCMC, as established th rough various provisions of the Measures for 
Administration of Trade Social Organizations1416 and the Regulations for Personnel Management of 
Chambers of Commerce.1417  The complainants submit that Ch ina described its authority over these 
entities as "plenary" and described the Chamber of Commerce as "the instrumentality through which 
[MOFCOM] oversees and regulates the business of im porting and exporting [] products in China".1418  
On this basis, the complainants consider th at the CCCMC's export-price related functions and 
responsibilities are attributable to China.1419   
7.1003  China has asserted that certain measure s are not "sources of Chinese law".1420  China admits 
that MOFCOM and the GAC delegated certain impl ementing authority to the CCCMC to coordinate 
export prices1421, but it explains that with the repeal of the PVC system in 2008, implementation 
authority granted to CCCMC terminated.1422    
7.1004  Article 3.3 of the DSU allows WTO Members to resort to the dispute settlement system of the 
WTO in "situations in which a Member considers that  any benefits accruing to it directly or indirectly 
under the covered agreements are being impaired by measures taken by another Member".  In US – 
Corrosion Resistant Steel  Sunset Reviews , the Appellate Body explained that "[i]n principle, any act 
or omission attributable  to a WTO Member can be a measure of that Member for purposes of dispute 
settlement proceedings."1423  Thus, governmental actions may clearly be challenged under dispute 
settlement proceedings.  Private actions have also  been found to be "attributable" to a government, 
and thus subject to challenge, where there is "s ome governmental connection to or endorsement of 
                                                      
1415 United States' first written submission, para. 208.  In footnote 285, the United States notes the 
statement by the US presid ing judge in the Opinion In re Vitamin C Antitrust Litigation  that "The Chinese 
government's appearance as amicus curiae is unprecedented.  It has never … come before the United States as 
amicus to present its views" See In re Vitamin C Antitrust Litigation , 584 F. Supp. 2d 546 (E.D. NY Nov. 6, 
2008), at p. 546-55 (Exhibit JE-103). 
1416 Exhibit JE-101, Article 14. 
1417 Exhibit JE-102. 
1418 United States' first written submission, para. 208, citing Brief of Amicus Curiae: MOFCOM at p. 9 
(Exhibit JE-98); United States' response to Panel question 67 following the second substantive meeting 
para. 133; European Union's response to Panel question 67 following the second substantive meeting; Mexico's 
response to Panel question 67 following the second substantive meeting. 
1419 In addition, the complainants claim that China's MOFCOM itself considers the CCCMC as an 
"'instrumentality through which [MOFCOM] oversees and regulates the business of importing and exporting [] 
products in China.'" United States' first written submission, para. 208, fn. 290, citing Brief of Amicus Curiae: 
MOFCOM. In Re Vitamin C Antitrust Litigation (E.D. NY Jun. 26, 2006), at p. 9 (Exhibit JE-98); see also 
Memorandum in Support of Defendants' Joint Motion to Dismiss First Amended Complaint in Resco Products, 
Inc. v. Bosai Minerals Group and CMP Tiajin Co. (Oct. 7, 2008) at p. 9 (Exhibit JE-105), Memorandum in 
Support of Motion to Dismiss Plaintiffs' First Am ended Class Action Complaint by Defendants, China 
Minmetals Corp. and China National Minerals Co. in Animal Science Products, Inc. v. China National Metals 
and Minerals Import and Export Corp. (D. NJ Jun. 26, 2009) at p. 11 (Exhibit JE-106). 
1420 China's response to Panel question No. 1, para. 14 following the first substantive meeting. 
1421 China states that MOFCOM and the GAC, acting under the State Council, enjoy authority over the 
administration of customs-related matters, foreign trade,  investment, and economic cooperation in China.  See 
China's response to Panel question No. 1, para. 21 following the first substantive meeting. 
1422 China's response to Panel question No. 1 following the first substantive meeting, para. 21; China 
submits that the CCCMC affirmed that any document pertaining to the PVC system has not been applied since 
2008.  See Resolution of the Fifth Standing Committee of the CCCMC on Abolishing Certain Documents 
Including Measures of the CCCMC on the Coordination and Administration of Export Commodities (Exhibit 
CHN-4). 
1423 Appellate Body Report, US – Corrosion Resistant Steel  Sunset Reviews , para. 81 (emphasis added). WT/DS394/R 
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  those actions".
1424  For instance, the panel in Japan – Film  concluded, as the GATT panel on Japan-
Semi-conductors  before it, that "administrative guidance"  that "creates incentives or disincentives 
largely dependent upon governmental action for private parties to act in a particular manner" may 
constitute a governmental measure.1425   
7.1005  China acknowledges that through MOFCOM and the GAC it delegated certain implementing 
authority to the CCCMC to coordinate export prices.  Evidence presented by the complainants in the form of statements made by China's MOFCOM in th e context of US domestic court proceedings prior 
to this dispute appear to confirm this fact.  In th e Panel's view, this confirms that actions undertaken 
by the CCCMC with respect to minimum export pr ice requirements at issue in this dispute are 
attributable to China, and are thus "measures"  that can be challenged under the WTO dispute 
settlement proceedings.  In addition, China does not  dispute that it, through MOFCOM, regulates the 
administration of licence issuance and, throug h China's Customs, regulates customs clearance 
proceedings. 
7.1006  Accordingly, the Panel is satisfied that the measu res at issue in this dispute that have been 
identified by the complainants are measures "attributab le" to China.  The Panel will therefore consider 
whether these measures remained in force at the time of the Panel' s establishment, and whether the 
measures operate as a minimum export price requirement that is inconsistent with Article XI:1 of the 
GATT 1994, as alleged by the complainants. 
(b) Whether China requires exporters to coordinate  minimum export prices on exports of bauxite, 
coke, fluorspar, magnesium, silicon car bide, yellow phosphorus and zinc 
7.1007  The Panel will assess whether the measures identifie d by the complainants  remained in force 
at the time of the Panel's establishment, and wh ether these measures establish the existence of an 
MEP requirement. First, the Panel will asses whet her China through the various CCCMC measures 
directs exporters of the raw materials to coordi nate export prices.  Second,  the Panel will assess 
whether China requires exporters to adhere to c oordinated export prices through: (i) penalties imposed 
on exporters that fail to set prices in accordance with the coordinated export prices; (ii) penalties 
imposed on licensing entities that issue licences to non- complying exporters; and (iii) application of 
the PVC export clearance process.  The Panel will also assess the complainan ts' assertion that China 
otherwise enforced coordinated minimum export pr ices after the Panel's establishment despite the 
repeal of certain measures. 
(i) Whether China through the CCCMC coordinates export prices 
7.1008  The complainants argue that the (1) 1994 CCCMC Charter
1426; (2) 2001 CCCMC Charter1427; 
(3) CCCMC Export Coordination Measures1428; (4) CCCMC Brochure1429 and CCCMC website 
pages1430; (5) CCCMC Bauxite Branch C oordination Measures1431; and (6) CCCMC Bauxite Branch 
                                                      
1424 Panel Report, Japan – Film , para. 10.52. 
1425 Panel Report, Japan – Film , para. 10.45.  The GATT panel in Japan – Semi-conductors  held that, 
in cases where "sufficient in centives or disincentives existed for non-mandatory measures to take effect" and  
"the operation of measures ... was essentially dependent on [g]overnment action or intervention", then "the 
measures would be operating in a manner equivalent to mandatory requirements such that the difference 
between the measures and mandatory requirements was only one of form and not of substance ..."  GATT Panel 
Report, Japan – Semi-conductors , para. 109. 
1426 Articles 3, 6, 14 (Exhibit JE-86). 
1427 Articles 3, 6, 14 (Exhibits CHN-16, JE-87). 
1428 Article 2, 4(3) and 18, 19, 20, 21 (Exhibit JE-107). 
1429 Exhibit JE-89, p.14. 
1430 Exhibit JE-88 pages 3-5.  WT/DS394/R 
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  Charter
1432 establish that China, through the CCCMC coordinates export prices.  In particular, under 
the 1994  and 2001 CCCMC Charters , CCCMC Export Coordination Measures and CCCMC Bauxite 
Branch Charter , the complainants submit that the CCCMC directs commodity-specific branches or 
coordination groups to coor dinate export prices for the relevant commodities.1433  The complainants 
refer to official statements by China's MOFCOM1434 and documents submitted by exporters and 
members of the CCCMC to support their allegation that the CCCMC coordinates export prices.1435  
Finally, the complainants submit price data for ba uxite and yellow phosphorus, in particular, to show 
that China set coordinated export prices for these two products.1436  Only the 1994 and 2001 CCCMC 
Charters remain in the Panel's terms of reference. 
7.1009  Article 6 of the 1994 CCCMC Charter indicates that the CCCMC should "coordinate[e] ... the 
industry's import and export prices, markets and customers etc. in accordance with the National 
Authorities' opinions or on the basis of the join t requests and industry agreements between the 
member companies".  Article 14 indicates that th e CCCMC may impose sanctions against exporters 
that fail to comply with the Charter or coordination programs. 
7.1010  Article 3 of the 2001 CCCMC Charter specifies that the CCCMC is to "coordinate and direct 
import and export trade activities of Metals, Minera ls & Chemicals industries".  Article 6 of the 2001 
CCCMC Charter does not refer to export price coordination;  however, Article 6(3) provides that the 
CCCMC shall "promote the industry's self-disciplin e", including adopting "sanction measures against 
breaching companies.1437   
7.1011   Although the 1994 CCCMC Charter indicates that the CCCMC is responsible for 
coordinating industry export prices, the 2001 CCCMC Charter does not clearly indicate that the 
CCCMC retains such responsibilit y.  China argues that the 2001 CCCMC Charter fully replaced the 
1994 CCCMC Charter .  The complainants disagree, and suggest  there is evidence that exporters were 
required to follow industry export prices even after 2001.1438   
                                                                                                                                                                     
1431 Articles 1, 4, 7, 21 (Exhibit JE-108). 
1432 Articles 8, 20(3), 45 (Exhibit JE-112). 
1433 United States' first written submission, para. 350; European Union's first written submission, 
para. 354; Mexico's first written submission, para. 353 ; United States' comments on China's response to Panel 
question No. 10 following the first substantive meeting para 25; CCCMC website pages, 5-7 (Exhibit JE-88). 
1434 See, e.g., MOFTEC Assistant Minister Liu Xiangdong's Speech to the Third Congress of the 
CCCMC, paras. 10-11 (Exhibit JE-109); 1998 Price Coordination Circular , paras. 2 and 4 (Exhibit JE-110); 
CCCMC Website Pages, para. 3 (Exhibit JE-88); CCCMC Brochure, para. 4 (Exhibit JE-89).   
1435 United States' first written submission, para. 351; European Union's first written submission, 
para. 355; Mexico's first written s ubmission, para. 354; Un ited States' response to Panel question No. 10 
following the first substantive meeting, para 15; European Union's response to Panel question No. 10 following 
the first substantive meeting; Mexico's response to Panel question No. 10 following the first substantive 
meeting. 
1436 See United States' first written submission, para. 226; European Union's first written submission, 
paras. 230; Mexico's first written submission, para. 229; United States' second written submission, para. 391; 
European Union's second written submission, para. 172; Mexico's first written submission, para. 394; Exhibit 
JE-126. 
1437 Article 6 of the 2001 CCCMC Charter instead refers to the need to  "coordinate and direct import 
and export trade activities", "promote the industry's self -discipline", and "[o]rganize members in responding to 
allegations launched by foreign countries against China for dumping, subsidies and protective measures related 
to metal, mineral and chemical products" (Exhibit JE-87). 
1438 Evidence includes price data for bauxite and yellow phosphorus and screenshots of CCCMC 
website pages. See United States' first written submission,  para. 226; European Union's first written submission, 
paras. 230; Mexico's first written submission, para. 229; United States' second written submission, para. 391; 
European Union's second written submission, para. 172; Mexico's first written submission, para. 394; Exhibit WT/DS394/R 
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  7.1012  China argues that the 2010 CCCMC Charter formally replaces both the 1994  and 2001 
CCCMC Charters , and in no way authorizes the CCCMC to regulate industry price coordination.
1439   
7.1013  In addition, China argues that it effectivel y abandoned price coordination on 9 January 
20081440, which was later formalized on 26 May 2008 through issuance of the 2008 PVC Notice.1441  
Moreover, China argues that in a 2010 Resolution1442 it abolished all aspects of the export 
coordination system. 
7.1014  The 2010 CCCMC Charter and CCCMC Resolution on Abolition of Coordination and 
Administration of Export Commodities discussed above entered into force following the date of the 
Panel's establishment.  As explained in paragraph 7. 33 above, in general, only measures that were in 
force when the Panel was established on 21 D ecember 2009 form the basis of its terms of 
reference.1443  At the request of the complainants1444, the Panel will only assess the WTO consistency 
of the 2009 measures while taking note that the 2010 measures.1445  Accordingly, the Panel will not 
consider the 2010 CCCMC Charter or CCCMC Resolution on Abolition of Coordination and 
Administration of Export Commodities in its assessment. 
7.1015  A notice or resolution stating that China's Cu stoms authorities will no longer enforce the PVC 
procedure does not determine whether the CCCMC is  nevertheless authorized to coordinate export 
prices.  The PVC procedure is limited to enforcing a coordinated price at the border.  In addition, the 
PVC procedure was only employed for one of the products at issue – yellow phosphorus.  The Panel 
will therefore evaluate whether the measures at issue authorized the CCCMC to coordinate export 
prices, independently of whether the PVC procedure remained in operation.   
7.1016  There is no evidence on the face of the 2001 CCCMC Charter to indicate that it would 
replace in full the 1994 CCCMC Charter version.  Notwithstanding, it is plausible that a subsequent 
version of a Charter would replace or supersede a prior version in its entirety, unless a successive version were to plainly indicate that were not the case.  China submits that a resolution of 21 February 
2001 confirms that the 2001 Charter replaced the 1994 one.
1446  In addition, Article 16 of the 2001 
Charter indicates that the General Assembly of Member Representatives of the CCCMC may draw up 
or amend the Organization's Charter.  Each Ch arter is in its own right a complete document 
containing general provisions, description of th e CCCMC's functions, members, organization, 
branches, and finances.1447  The Panel considers that the two Charters did not remain in force 
                                                                                                                                                                     
JE-126l; CCCMC Export Coordination Measures , Articles 3, 5 (Exhibit JE-107); CCCMC Brochure, at 14 
(Exhibit JE-89); CCCMC Website Page s, at 3-5 (Exhibit JE-188). 
1439 China's second written submission, paras. 562, 574. 
1440 2008 Notice Ceasing the Work of PVC for Export Contract of 9 Types of Commodities  (Exhibit 
CHN-352). 
1441 2008 PVC Notice  (Exhibits CHN-2, JE-125). 
1442 CCCMC Resolution on Abolition of Coordination and Administration of Export Commodities  
(Exhibit CHN-4). 
1443 The Panel observes, however, that its decision to assess the complainants' claims here does not 
foreclose the possibility of considering 2010 measures in other contexts. 
1444 See United States' and Mexico's responses to Panel question No. 2 following the first substantive 
meeting and to Panel question No. 1 following the second substantive meeting. 
1445 In any event, the 2010 CCCMC Charter and CCCMC Resolution on Abolition of Coordination and 
Administration of Export Commodities appear to have a different "essence" than the 2001 CCCMC Charter that 
was in place at the time of the Panel's establishment be cause they appear to remove all authority from the 
CCCMC to coordinate export prices. 
1446 China's response to Panel question No. 69 following the second substantive meeting paras 341-343; 
See Letter by the China CCCMC, 3 December 2010. 
1447 Exhibit JE-86, JE-87.  WT/DS394/R 
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  simultaneously.  Accordingly, the Panel concludes that the 2001 CCCMC Charter alone was in force 
at the time of the Panel's establishment. 
7.1017  Despite no express reference to export price coordination in the 2001 CCCMC Charter , the 
reference to "coordinat[ion]" of "export trade activities" is broad enough to encompass price 
coordination.  In the Panel's view, evidence confirms that under the 2001 CCCMC Charter , the 
CCCMC was indeed authorized to coordinate export prices, at least until 2010 when China issued a 
Notice and MOFCOM orders to formally repeal the various elements of China's system of 
coordinating export prices.   
7.1018  Additional Chinese instruments identified by the complainants in their first written 
submissions confirm that the CCCMC was directed to coordinate export prices through a system of self-discipline.  These measures ar e not within the Panel's terms of  reference; however, the Panel 
explained that it may nevertheless consider these in struments as evidence in assessing the operation of 
China's alleged MEP requirement.   
7.1019  Article 2 of the CCCMC Export Coordination Measures identifies "self discipline" as an 
objective of "coordination".  Article 4(3) speci fically indicates that the CCCMC's "coordination 
content" shall include "export price".  Article 18 indicates that "[c]oordination programs examined, 
passed and recorded in democratic discussion are collective contracts, and all member companies 
must fully implement them". Article 19 provid es that member companies must provide business 
statistics or other materials in regard to their e xportation, in order "[t]o facilitate supervision and 
guidance with the implementation of coordination programs".  Article 20 states that "[c]oordination 
organizations for a particular commodity shall regul arly inspect the implementation of the Particular 
Commodity Coordination Management Measures and coordination programs mainly by self-checking". 
7.1020  Article 1 of the Bauxite Branch Coordination Measures states that "coordination" shall 
contribute to "self-discipline".  Article 4 specifies that the Branch "shall examine and determine the 
industry coordinated export prices for bauxite expor ts", including "once every semester" generally, or 
at other times "in case of relatively significant pri ce fluctuations on the international markets".  
Article 7 indicates that industry coordinated export prices should be, inter alia "sent to the license 
issuing bodies as a basis for license issuance".  Article  10 provides that the coordinated export price is 
"equivalent to a collective economic contract" and that "each and every company must implement it 
strictly". 
7.1021  Article 8 of the CCCMC Bauxite Branch Charter refers to the need to "promote the industry's 
self-discipline".  Article 20(3) provides for discip linary measures against members that "[f]ail to 
implement industry coordination".  Article 45 indica tes that the Bauxite Branch may levy fines to 
"supervise the implementation of the industry's self-disciplined coordination". 
7.1022  China indicates that the CCCMC Export Coordination Measures and CCCMC Bauxite 
Branch Coordination Measures were "declared inapplicable" through a 9 January 2008 Notice
1448, but 
states that these measures were repealed by resolution only on 28 July 2010.1449 
7.1023  The complainants do not provide evidence of  price coordination managed by other raw 
material-specific branches; however, the CCCMC Export Coordination Measures and the CCCMC 
                                                      
1448 2008 Notice Ceasing the Work of PVC for Export Contract of 9 Types of Commodities  (Exhibit 
CHN-352). 
1449 CCCMC Resolution on Abolition of Coordination and Administration of Export Commodities  
(Exhibit CHN-4). WT/DS394/R 
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  Brochure and identified CCCMC website pages confir m that commodity coordination branches exist 
for the raw materials at issue.
1450 
7.1024  In the Panel's view, the above CCCMC Export Coordination Measures  and CCCMC Bauxite 
Branch Coordination Measures , as well as CCCMC Brochure and identified CCCMC website, 
confirm that the CCCMC was authorized to direct and coordinate industry export prices, including 
during the period between 2001 until 2010.  Thus, the Panel concludes that the broad language in the 
2001 CCCMC Charter authorises such coordination for commodity branches overseen by the 
CCCMC. 
7.1025  In the Panel's view, China has not provided evid ence to convince the Pane l that the practice of 
coordinating industry prices was formally removed "from the books" in 2008 or any other time before 
the Panel's establishment on 21 December 2009.  Th e Panel notes in particular China's distinction 
between points in time in which measures were "dec lared inapplicable" in comparison to when those 
measures were formally "repealed".  The Panel notes however that China' s has only confirmed the 
formal repeal of measures authorizing the coordina tion of export prices in 2010, via the 28 July 2010 
Resolution discussed above.1451 
7.1026  Accordingly, the Panel finds that, at least until 28 July 2010, the 2001 CCCMC Charter , 
when interpreted in light of available evidence, directed the CCCMC to set and coordinate export 
prices for all branches under its authority, including fo r all the raw materials identified in connection 
with the complainants' claims, namely bauxite, coke, fluorspar, magnesium, silicon carbide, yellow 
phosphorus and zinc. In light of this finding, the Panel considers it unnecessary to consider price data 
for bauxite and yellow phosphorus, in  particular, to show that Chin a set coordinated export prices for 
these two products.1452   
(ii) Whether China enforces an MEP requirement th rough penalties imposed on exporters and 
licensing entities and the use of the PVC procedure 
7.1027  The complainants submit that China requires expor ters to adhere to c oordinated export prices 
through: (i) penalties  imposed on exporters that fa il to set prices in accordance with the coordinated 
export prices; (ii) penalties imposed on licensing  entities that issue licences to non-complying 
exporters; and (iii) application of the PVC export cl earance process.  The Panel considers these three 
aspects below. 
Penalties on exporters 
7.1028  The complainants argue that the (1) Export Price Penalties Regulations1453; (2) CCCMC 
Export Coordination Measures1454, (3) CCCMC Bauxite Branch Coordination Measures1455; and 
(4) statements by China's MOFCOM, including re ference to the existence of a "system of self-
                                                      
1450 See CCCMC Export Coordination Measures , Articles 3, 5 (Exhibit JE-107); CCCMC Brochure, 
p. 14 (Exhibit JE-89); CCCMC Website Pages 3-5 (Exhibit JE-188). 
1451 CCCMC Resolution on Abolition of Coordination and Administration of Export Commodities  
(Exhibit CHN-4). 
1452 See United States' first written submission, para. 226; European Union's first written submission, 
paras. 230; Mexico's first written submission, para. 229; United States' second written submission, para. 391; 
European Union's second written submission, para. 172; Mexico's first written submission, para. 394; Exhibit 
JE-126. 
1453 Articles 3, 4, 6 and 9 (Exhibit JE-113). 
1454 Article 4(3) (Exhibit JE-107). 
1455 Articles 7, 8 and 10 (Exhibit JE-108).  WT/DS394/R 
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  discipline"
1456 and the existence of a "collective contract"1457 establish that China imposes penalties on 
exporters that fail to set prices in accordance with  the coordinated export pr ices.  Alleged penalties 
imposed on exporters include warnings, suspensi on of membership or expulsion from the CCCMC, 
criticism, fines or revocation of exporting rights.1458  Only the Export Price Penalties Regulations are 
within the Panel's terms of reference. 
7.1029  Article 4 of the Export Price Penalties Regulations indicates that "all export enterprises shall 
... set export prices which are suitable in countries to which the goods are exported".  Article 3 indicates that MOFTEC may punish the enterprises that  export at "lower-than-normal price".  Finally, 
Article 6 identifies applicable penalties that include  notices of criticism, fines of more than 60% of 
income gained from lower-than-normal price expor ts, suspension or revocation of bidding or export 
rights for the enterprise, and full "economic respons ibility".  This measure was repealed by order on 
12 September 2010.
1459  Article 9 authorizes MOFCOM or the re levant authority to investigate export 
enterprises suspected of exporting at a lower-than-normal price. 
7.1030  As explained in paragraphs 7.33  above, in general, only measures that were in force when the 
Panel was established on 21 December 2009 form  the basis of its terms of reference.1460  A t  t h e  
request of the complainants1461, the Panel will only assess the WTO c onsistency of the 2009 measures 
while taking note of 2010 measures.1462  Thus, for purposes of its assessment of the complainants' 
claims, the Panel will assess the effect of the Export Price Penalties Regulations before its repeal by 
order on 12 September 2010. 
7.1031  The language of the Export Price Penalties Regulations is unequivocal in providing a legal 
basis to impose penalties against enterprises that do not conform to coordinated export prices.  China 
has not provided evidence to convince the Panel th at the practice of imposing penalties on exporters 
that fail to set prices in accordance with the coor dinated export prices was formally removed "from 
the books" before the Panel's establishment on 21 December 2009. China may in fact have ceased to 
impose such penalties on exporters on 28 May 2008, at the time it asserts that the PVC procedure was 
repealed.  However, China has only provided evidence of the formal repeal of this provision in 2010 
after the Panel's establishment.   
7.1032  Additional instruments identified by the comp lainants – though rule d outside the Panel's 
terms of reference – confirm that export enterp rises would be subject to penalties for failing to 
conform to coordinated export prices.  As explai ned, these instruments are not within the Panel's 
terms of reference; however, the Panel explained that it may nevertheless consider these instruments 
as evidence in assessing the operation of China's alleged MEP requirement.   
                                                      
1456 See, in particular, MOFCOM Statement In re Vitamin C Antitrust Litigation  (August 31, 2009), 
para. 3 (Exhibit JE-111). 
1457 See CCCMC Export Coordination Measures , Article 21 (Exhibit JE-107). 
1458 United States' first written submission, paras. 35 2-354; European Union's first written submission, 
para. 356-358; Mexico's first written submission, paras. 355-357. 
1459 Order No. 2 of 2010 of MOFCOM , 12 September 2010 (Exhibit CHN-448). 
1460 The Panel observes, however, that its decision to assess the complainants' claims here does not 
foreclose the possibility of considering 2010 measures in other contexts. 
1461 See United States' and Mexico's responses to Panel question No. 2 following the first substantive 
meeting and to Panel question No. 1 following the second substantive meeting. 
1462 In any event, the repeal by order on 12 September 2010 appears to have a different "essence" than 
the 1996 Export Price Penalties Regulati ons that was in place at the time of the Panel's establishment because it 
removes the authority to impose penalties on exporters that fail to set prices in accordance with the coordinated 
export prices. WT/DS394/R 
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  7.1033  Article 21 of the CCCMC Export Coordi nation Measures indicates that enterprises that 
follow "coordination programs" will be "honor[ed]" w ith requests to increase export quotas for that 
company.  In contrast, member companies that do not comply are to be "criticized, warned, ordered to 
suspend or withdraw their membership, and econom ically punished according to the damage they 
have caused", or have their quotas reduced, licence s declined, and export rights withdrawn.  As 
pertains to bauxite specifically, Article 8 of the CCCMC Bauxite Branch C oordination Measures 
addresses sanctions imposed on enterprises in breach , including fines and cancellation of foreign trade 
operating rights, bidding rights, tax refunds, and financial support.  Article 10 of the CCCMC Bauxite 
Branch Coordination Measures provides that coordination of prices is "equivalent to a collective 
economic contract", and enterprises are "not allowed to act on the basis of [their] individual initiative".   
7.1034  As noted in paragraph 7.1022, China has not pr ovided evidence to convince the Panel that the 
CCCMC Export Coordination Measures  were formally "repealed" before the Panel's establishment on 
21 December 2009.  While the complainants do not provide evidence of price coordination managed 
by other raw material-specific branches,  as discussed in paragraph 7.1023, the CCCMC Export 
Coordination Measures and the CCCMC Brochure and identif ied CCCMC website pages confirm 
that commodity coordination branches exis t for the raw materials at issue.   
7.1035  In addition to these measures, the complainants have also referred to statements made by 
China's MOFCOM in the context of an titrust litigation in the United States.
1463  These statements were 
made in connection with events taking place prior to 2008, but nevertheless refer to the existence of a 
"system of self-discipline" and reveal that further parties would be subject to penalties for failure to 
participate in price coordination. 
7.1036  For the foregoing reasons, the Panel concludes that, through the Export Price Penalties 
Regulations , China had in place a system of penalties impo sed on exporters that failed to set prices in 
accordance with the coordinated export prices at least until 12 September 2010. 
Penalties on export licence issuing authorities 
7.1037  The complainants argue that the Measures for Administration of Licensing Entities1464 and  
CCCMC Bauxite Branch Coordination Measures1465 establish that China imposes penalties on 
licensing entities that issue licences to non-complying exporters.  Alleged penalties against licensing 
entities include circulation of a notice of criticism,  suspension of the licence-issuing authority, or 
termination of this authority.1466  Only the Measures for Administration of Licensing Entities are 
within the Panel's terms of reference. 
7.1038  Article 40(3) of the Measures for Administration of Licensing Entities indicates that 
punishment shall be imposed on licensing authorities for "issuing licenses without following the coordinated export prices". U nder Article 41, punishment includes public condemnation, and 
suspension or cancellation of the right to issue licences.   
7.1039  China submits that this m easure was repealed by the 2004 Export Licence Administration 
Measures 
1467, which was in turn repealed by the 2008 Measures for the Administration of License for 
                                                      
1463 See, in particular, Exhibit JE-111. 
1464 Article 40(3), 41 (Exhibits CHN-358, JE-75). 
1465 Articles 7, 8 and 10 (Exhibit JE-108). 
1466 United States' first written submission, paras. 35 2-355; European Union's first written submission, 
para. 356-359; Mexico's first written submission, para. 355-358; Complainants' response to Panel question No. 
13 following the first substantive meeting. 
1467 Exhibit CHN-360.  WT/DS394/R 
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  the Export of Goods.
1468  China submits that these latter two measures set out general rules on the 
administration of export licences.  For purposes of legal certainty, China submits that Article 40(3) of the Measures for Administration of Licensing Entities was removed by a 12 September 2010 decision 
of the Ministry of Commerce.
1469 
7.1040  As explained in paragraphs 7.33  above, in general, only measures that were in force when the 
Panel was established on 21 December 2009 form  the basis of its terms of reference..1470  A t  t h e  
request of the complainants1471, the Panel will only assess the WTO c onsistency of the 2009 measures 
while taking note that the 2010 measures.1472  Thus, for purposes of its assessment of the 
complainants' claims, the Pane l will assess the effect of the Measures for Administration of Licensing 
Entities , or any potential superseding measures, that were effective at the date of the Panel's 
establishment on 21 December 2009, before the issu ance of the 2010 Ministry of Commerce decision. 
7.1041  In the Panel's assessment, the content of both the 2004 Export Licence Administration 
Measures and 2008 Export Licence Administration Measures is not identical to that of the Measures 
for Administration of Licensing Entities.1473  Notably, as the complainants point out1474, the 2004 and 
2008 measures address the "Administration of Licenses " and contain rules and requirements 
governing the issuance of export licences, wh ereas the 1999 measure at issue addresses the 
"Administration of the Organs  for Issuing the Licenses", concerning activities and conduct of China's 
import and export licensing entities.  It is thus  unclear whether these latter measures are full 
replacement measures for the 1999 measure at issue, th at is, whether they supersede all aspects of the 
1999 measure at issue.  Furthermore, there is no express reference on the face of the 2004 or 2008 
measures to indicate that they supersede or replace the Measures for Administration of Licensing 
Entities .  This stands in contrast to the 2008 Measu res for the Administration of License for the 
Export of Goods, which states that it amends the "M easures for the Administration of License for the 
Export of Goods", the same title given to the 2004 version of that measure.   
7.1042  Finally, China has stated that it "abandoned" price coordination on 26 May 2008.1475   In a 
2010 decision of the Ministry of Commerce, China removed specific language in Article 40(3) of the 
1999 Measures for Administration of Licensing Entities.   
7.1043  Accordingly, for the foregoing reasons, the Panel concludes that the 1999 Measures for 
Administration of Licensing Entities  were not replaced by either the 2004 Export Licence 
Administration Measures or 2008 Export Licence Administration Measures .  As a consequence, the 
Panel has no evidence that the Measures for Administration of Licensing Entities was not valid at the 
time of the Panel's establishment on 21 December 2009. 
                                                      
1468 Exhibit CHN-342. 
1469 2010 Amendment of Measures for Administration of Licensing Entities  (Exhibit CHN-449). 
1470 The Panel observes, however, that its decision to assess the complainants' claims here does not 
foreclose the possibility of considering 2010 measures in other contexts. 
1471 See United States' and Mexico's responses to Panel question No. 2 following the first substantive 
meeting and to Panel question No. 1 following the second substantive meeting. 
1472 In any event, the 2010 Ministry  of Commerce decision appears to have a different "essence" than 
the Measures for Administration of Licensing Entities that was in place at the time of the Panel's establishment 
because it removes the authority to impose penalties on licensing entities that issue licences to non-complying 
exporters. 
1473 It should be noted that the content of the 2004 Export Licence Administration Measures and 2008 
Export Licence Administration Measures is highly similar. 
1474 United States' second written submission, para. 463; European Union's second written submission, 
para. 172; Mexico's second written submission, para. 467. 
1475 China's first written submission, para. 838; Chin a's response to Panel question No. 1 following the 
first substantive meeting, para. 20. WT/DS394/R 
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  7.1044  The complainants have also identified the CCCMC Bauxite Branch Coordination Measures  
as relevant.  As discussed above, China indicates that the CCCMC Bauxite Branch Coordination 
Measures were repealed by resolution only on 28 July 2010.
1476  Prior to that date, China argues that 
this measure was declared inapplicable" through a 9 January 2008 Notice.1477  Accordingly, the Panel 
considers this measure was "on the books" at the date of the Panel's establishment.1478  As pertains to 
bauxite specifically, Article 7 of the CCCMC Bauxite Branch Coordination Measures provides that 
industry coordinated export prices shall be notifie d to licence issuing bodies "as a basis for license 
issuance".  Although this measure is outside the Panel' s terms of reference, this measure confirms that 
the granting of an export licence is conditioned on confor mity with industry coordinated export prices.     
7.1045  The complainants do not provide evidence of  price coordination managed by other raw 
material-specific branches; however, the CCCMC Export Coordination Measures and the CCCMC 
Brochure (discussed above) and identified CCCM C website pages confirm that commodity 
coordination branches exist for the raw materials at issue.   
7.1046  In light of the above, the Panel concludes that, at the time of establishment of the Panel on 
21 December 2009 and at least until 12 September 2010, China, through the Measures for 
Administration of Licensing Entities , had in place a system that imposed penalties on licensing entities 
that issue licences to exporters that did not follow the coordinated export prices. 
Application of the PVC export clearance process to exporters of yellow phosphorus 
7.1047  The complainants argue that (1) China's Customs Law1479; (2) the 2002 PVC Notice1480; (3) 
the 2004 PVC Notice1481; (4) the 2008 PVC Notice1482; (5) Online PVC Instructions 1483; (6) a 
screenshot of the CCCMC online PVC interface, dated 28 May 20081484; (7) the CCCMC PVC 
Rules1485; (8) Notice of the Rules on Price Reviews of Export Products by the Customs (Customs 
Export Price Review Rules )1486; (9) Rules for Coordination with Respect  to Customs Price Review of 
Export Products  (Customs Export Price Review Coordinating Rules )1487; and (10) Provisional Rules 
on Export Price Verification and Chop fo r Key Products Subject to Price Review   (Provisional Rules 
                                                      
1476 Resolution of the Fifth Standing Committee of the CCCMC on Abolishing Certain Documents 
Including Measures of the CCCMC on the Coordination and Administration of Export Commodities , 28 July 
2010 (Exhibit CHN-4). 
1477 2008 Notice Ceasing the Work of PVC for Export Contract of 9 Types of Commodities  (Exhibit 
CHN-352).   
1478 See the Panel's discussion in paragraphs 7.1022 to 7.1026 above. 
1479 Articles 2, 9 and 23 (Exhibit JE-68). 
1480 Exhibit JE-121, Article 4. 
1481 Paras. 2, 4 (Exhibits CHN-364, JE-122). 
1482 2008 PVC Notice  (Exhibits CHN-2 JE-125). 
1483 Exhibit JE-123, Sections 1, 4, 9(2). 
1484 Exhibit JE-124, at pages 1-2 and 3-4. 
1485 Exhibit JE-127, Annex 3. 
1486 This measure was not submitted to the Panel.  See United States' first written submission, 
para. 222.  China submits that the 1997 Customs Export Price Review Rules contains two annexes, which 
include additional measures referred to by the complainants: the Customs Export Price Review Coordinating 
Rules  and Provisional Rules on Export PVC .  China argues that 1997 Customs Export Price Review Rules  was 
superseded by the 2003 PVC Notice and formally repealed on 26 May 2008 when China "abandoned" export 
price verification.  See China's first written su bmission, para. 849.  China submits that the 2010 Abolition of 
Price Review of Export Commodities confirms this repeal.  See Exhibit CHN-434. 
1487 This measure was not submitted to the Panel.  See  United States' first written submission, 
para. 222.  WT/DS394/R 
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  on Export PVC )
1488 establish that China requires exporters to  conform to coordinated export prices 
through application of the PVC export clear ance process to exports of yellow phosphorus.1489 
7.1048  Based on the Customs  Export Price Review Rules , the Customs Export Price Review 
Coordinating Rules , and the Provisional Rules on Export PVC , and references in the 2002 PVC 
Notice and 2004 PVC Notice , the complainants submit that the exportation of yellow phosphorus is 
subject to price review by China's Customs as part of the export clearance process.   
7.1049  The CCCMC PVC Rules direct the CCCMC to verify the export price of an export contract 
and affix a PVC chop (seal or stamp) to a PVC form and the contract where the price complies with 
the coordinated export price.1490  The exporter must then declare the  export contract to Customs for 
clearance.1491  Customs may deny any contract that does not bear the CCCMC PVC chop.1492  
Penalties may also be imposed agains t exporters that forge PVC chops.1493  Exporters of yellow 
phosphorus may submit contract inform ation electronically for verification.1494  Online instructions 
indicate that a contract will only pass "price-review" if  "the contract price less the transportation fee is 
greater or equal to the coordinated price".1495 
7.1050  The complainants submit that the CCCMC PVC Rules , Online PVC Instructions , Customs 
Export Price Review Rules , the Customs Export Price R eview Coordinating Rules , and the 
Provisional Rules on Export PVC , in particular, continued to be available and effective after 26 May 
2008, and thereby maintained in pl ace the PVC export clearance process.1496  The complainants 
submit that price data and screenshots of online web pages from 2008 confirm that China continued to 
apply the PVC export clearance process to exporter s of yellow phosphorus, even after the apparent 
repeal of the PVC procedure on 26 May 2008.1497  The complainants submit that a computer screen 
snapshot for an exporter submitting contract in formation for CCCMC verification and chop dated 
2008 reveals an industry coordinated price of US$8000 per metric tonne FOB for yellow 
phosphorus.1498  The complainants contend that a note on th is form indicates that the contract will be 
approved in cases where the contract price is more  than or equivalent to the coordinated price.1499  In 
addition, the complainants argue that a 15 Oc tober 2009 screenshot shows that CCCMC measures 
implementing the PVC procedure, including the CCCMC PVC Rules , and Online Verifications and 
                                                      
1488 This measure was not submitted to the Panel.  See United States' first written submission, 
para. 222. 
1489 The complainants do not allege that the PVC procedure is applicable to any of the other raw 
materials identified by the complainants with respect to their MEP-related claims.   
1490 Exhibit JE-127, Annex 3. 
1491 2004 PVC Notice , para. 4 (Exhibit JE-122). 
1492 2004 PVC Notice , para. 2 (Exhibit JE-122). 
1493 2004 PVC Notice , para. 4 (Exhibit JE-122). 
1494 See Online PVC Instructions  (Exhibit JE-123), Sections 1, 4. 
1495 Online PVC Instructions (Exhibit JE-123), Section 9(2). 
1496 United States' first written submission, para. 361; European Union's first written submission, 
paras. 365; Mexico's first written submission, para. 364. 
1497 United States' first written submission, paras. 357,  360; European Union's first written submission, 
paras. 361, 364; Mexico's first written submission, para s. 360, 363; United States' second written submission, 
paras. 448, 450; European Union's second written submission, para. 172; Mexico's first written submission, 
paras. 365, 368; CCCMC PVC Online Input Screen Shot s (May 2008), at pages 1-4 (Exhibit JE-124); 
Screenshot capture, Exhibit JE-127. 
1498 CCCMC PVC Online Input Screen Shots (May 2008), at pages 1-4 (Exhibit JE-124). 
1499 United States' first written submission, para. 226; European Union's first written submission, 
paras. 230; Mexico's first written submission, para. 229. WT/DS394/R 
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  Certification Operating Steps, remained availabl e on the CCCMC website after the alleged repeal of 
the PVC procedure.
1500   
7.1051  China disputes that any measures were in effect  after 26 May 2008 that authorized application 
of the PVC export clearance.  Chin a considers the fact that the CCCMC PVC Rules and the CCCMC 
Online PVC Instructions  may have been found on the CCCM C website on 28 May 2008 or 15 
October 2009 does not establish that the PVC procedur e continued in use after the repeal of measures 
establishing the PVC system.1501  China argues that the lack of any requirement or reference to the 
PVC procedure in the 2008-2010 Customs Handbo ok confirms that the PVC procedure was 
discontinued.1502  Regardless, China argues that the PVC system in China was confirmed to be 
repealed in its entirety by a 2010 Circular.1503   
7.1052  Finally, China argues that price data submitte d by the complainants for yellow phosphorus 
does not demonstrate that prices were coordinated to prevent or restrict exportation.  Contrary to the 
complainants' assertions that a coordinated pr ice of US$8000 per metric tonne FOB for yellow 
phosphorus in May 2008, China submits that expor t prices were permitted below US$8000 per metric 
tonne FOB in May 2008.1504 
7.1053  The complainants dispute China's conclusion on price data for yellow phosphorus.  The 
complainants submit that the price of yellow phosph orus "uniformly surged" in the United States and 
Europe, and stayed above the level of US$8000 per metric tonne FOB "beginning soon after the end 
of May in June 2008" until November 2008.  The co mplainants add that prices of yellow phosphorus 
exports to the United States were "almost identical " to those to the European Union during that 
timeframe.1505  Thus, the complainants argue that China's presentation of data showing that the prices 
fell below US$8000 per metric tonne FOB in 2007 and early 2008, but not after May 2008, does not 
rebut their allegation that China imposed an MEP requirement for yellow phosphorus.  Moreover, they submit that exports of yellow phosphorus be low US$8000 per metric tonne in early May 2008 
accounted for 2.8% of exports for that month, and that overall, only 2.5% of yellow phosphorus 
exports throughout 2008 fell belo w US$8000 per metric tonne FOB.
1506 
7.1054  The Panel determined in its 1 October 2010 pr eliminary ruling that all of the measures 
identified in connection with the PVC procedure we re outside the Panel's terms of reference.  
Therefore the Panel will not reach findings on the se measures.  To the extent the Panel were to 
consider these measures in its analysis, those measures in place at the time of the Panel's 
establishment would be relevant.  As explained in  paragraphs XX above, in  general, only measures 
that were in force when the Panel was established on 21 December 2009 form the basis of its terms of 
reference.1507  T h e  2010 Circular1508 retroactively confirms the repeal of the PVC procedure in 26 
                                                      
1500 United States' first written submission, para. 227; European Union's first written submission, 
paras. 231; Mexico's first written submission, para. 230; Exhibit JE-127. 
1501 China's first written submission, para. 839. 
1502 China's first written submission, paras. 843. 
1503 2010 Circular of the Ministry of Commerce and the General Administration of Customs on 
Abolishing Two Documents Regarding Price Review of Export Commodities by Customs , 16 August 2010 
(Exhibit CHN-434). 
1504 China's first written submission, para . 851, Exhibits CHN-361, CHN-362. 
1505 United States' second written submission, para. 391; European Union's second written submission, 
para. 172; Mexico's first written submission, para. 394. 
1506 United States' second written submission, para. 394; European Union's second written submission, 
para. 172; Mexico's first written submission, para. 397. 
1507 The Panel observes, however, that its decision to assess the complainants' claims here does not 
foreclose the possibility of considering 2010 measures in other contexts. 
1508 2010 Abolition of Price Review of Export Commodities (Exhibit CHN-434).  WT/DS394/R 
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  May 2008.  However, the complainants have alle ged that China in fact imposed the PVC customs 
clearance procedure between 26 May 2008 and issuance of the 2010 Circular.   
7.1055  Articles 9 and 23 of China's Customs Law provide that all goods for exportation must be 
approved by China's customs author ities.  In this context, the 2002 PVC Notice  and 2004 PVC Notice  
confirm that 35 products, including yellow phosphorus are subject to the PVC procedure.  Its second 
and fourth paragraphs indicate that products ma y not be exported that do not bear the CCCMC "chop" 
or seal.  Appendix 2 of the 2004 PVC Notice confirms that exports will be rejected that do not 
conform to MOFCOM and GAC rules.  The CCCMC PVC Rules and Online  Verification and 
Certification Operating Steps  in its step 9, further confirm the designation of commodity branches and 
the use of coordinated export prices and a mineral and chemical commodity pre-verification and chop 
system for certain products, including yellow phosphorus. 
7.1056  The complainants acknowledge that the 2004 PVC Notice  superseded the 2002 PVC Notice , 
and that the 2008 PVC Notice repealed the 2004 PVC Notice  on 26 May 2008.
1509  However, the 
complainants allege that the Customs Export Price Review Rules , Customs Export Price Review 
Coordinating Rules and Provisional Rules on Export PVC continued to be effective after this date.1510   
7.1057  The 2008 PVC Notice unequivocally repeals the 2004 PVC Notice on 26 May 2008.1511  The 
Panel has no evidence that the Customs Export Price Review Rules , Customs Export Price Review 
Coordinating Rules and Provisional Rules on Export PVC continued to be in force after this date.  
Accordingly, the Panel has no basis to conclude th at the PVC procedure continued in effect, as the 
complainants allege, on the face of the Chinese instruments before the Panel. 
7.1058  The complainants refer in particular to a webpage screenshot of the CCCMC online PVC 
interface, dated 28 May 2008, and a screenshot of CCCMC PVC Rules and Online PVC instructions , 
dated 15 October 2009, in arguing that the PVC pro cedure continued to be employed by China's 
customs officials even after the apparent repeal of the PVC procedure on 26 May 2008. 
7.1059  The Panel notes that the screenshot of th e CCCMC online PVC interface was taken two days 
after the repeal of the 2004 PVC Notice.  In additi on, the Panel is hesitant to conclude that the PVC 
procedure continued in effect sole ly on the basis of screenshots of CCCMC PVC Rules and Online 
PVC instructions taken on 15 October 2009.  In the Panel's view, the failure to update a website, does 
not on its own provide evidence to make conclusi ons contrary to the e xpress language of the 2008 
PVC Notice that the PVC would no longer be applied to exports of subject goods, including yellow 
phosphorus. In addition, as noted by China, the co mplainants have not even submitted a screenshot of 
the CCCMC website closer to the date of the Panel's establishment on 21 December 2009 in support 
of their argument that the PVC was effective at th e time of the Panel's establishment despite the 
apparent formal repeal of the PVC procedure.1512   
7.1060  Finally, the complainants submit that an analysis of price data for exports of yellow 
phosphorus in May 2008 a nd beyond confirms that China had in place a coordinated price for yellow 
phosphorus after the alleged formal repeal of the PV C procedure, and enforced this price at the time 
of customs clearance through the PVC procedure.   Evidence provided by the complainants1513 and 
                                                      
1509 United States' first written submission, para. 360; Exhibit JE-125; Exhibit CHN-2. 
1510 United States' first written submission, para. 361; European Union's first written submission, 
para. 365; Mexico's first written submission, para. 364. 
1511 Exhibit CHN-125, stating "it is decided to repeal the MOFCOM and General Administration of 
Customs Communication No. 36 of the year 2003 [the 2004 PVC Notice ].  The present communications takes 
effect on the day it is published." 
1512 China's first written submission, para. 60. 
1513 Exhibit JE-173. WT/DS394/R 
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  China
1514 shows an increase in the export price of yellow phosphorus beginning in May 2008, for 
example, from prices below US$3 per kg during Ma y 2008 and prior months to prices above US$5 
per kg from June 2008 until November 2008.1515  This appears to be confirmed by Exhibit JE-173.   
7.1061  In the Panel's view, the mere submission of  price data for yellow phosphorus alone is 
insufficient to conclude the existence of a coordi nated price for yellow phosphorus, and by extension, 
that a coordinated price was enforced through application of the PVC procedure.  The Panel 
concluded above that the PVC procedure was forma lly repealed on 26 May 2008, upon publication of 
the 2008 PVC Notice .  Price increases or conformity of export prices to the United States, European 
Union and other destinations may result from a multit ude of market factors.  The Panel cannot draw 
the conclusion that an increase or trends in e xport prices alone support the conclusion that China 
enforced an MEP requirement for yellow phosphorus  through the PVC, in the face of evidence that 
this procedure was repealed. 
7.1062  Based on the foregoing reasons, it appears that  China did not formally have in place or 
otherwise maintain a PVC custom s clearance procedure on exporters of yellow phosphorus at the time 
of the Panel's establishment on 21 December 2009. 
(c) Conclusions on whether China imposes an MEP requirement on exporters  of bauxite coke, 
fluorspar, magnesium, silicon carbi de, yellow phosphorus and zinc 
7.1063  The Panel concludes above that the 2001 CCCMC Charter , interpreted in light of the 
CCCMC Export Coordination Measures , CCCMC Bauxite Branch Coordination Measures , CCCMC 
Brochure and identified CCCMC website pages, aut horized the CCCMC to set and coordinate export 
prices for all branches under its authority, including fo r all the raw materials identified in connection 
with the complainants' claims, namely bauxite, coke, fluorspar, magnesium, silicon carbide, yellow 
phosphorus and zinc. The Panel further concludes th at, at the time of the Panel's establishment on 
21 December 2009, China through the 1996 Export Price Penalties Regulations  imposed penalties on 
exporters that fail to set prices in accordance with  the coordinated export prices.  In addition, the 
Panel concludes that, under the Measures for Administration of Licensing Entities , China imposed 
penalties on licensing entities that issued licences to exporters that did not follow the coordinated 
export prices.   
7.1064  In light of these conclusions, the Panel additiona lly finds that the aut hority to coordinate 
export prices and enforce these prices through the imposition of penalties on exporting enterprises, or 
on export licensing entities that issue licences to expor ters that do not follow the coordinated export 
prices, amounts to a requirement to coordinate export prices for the raw materials at issue.  The requirement derives from the fact that failure to comply with the coordinated price will result in 
punishment that rises to a level to prevent an ente rprise from exporting altogeth er.  In addition, under 
the measures at issue, export licensing entities ma y be punished for failing to enforce a given 
coordinated price.  The measures do not permit exporting enterprises to deviate from coordinated 
export prices, or otherwise grant discretion to ex port licensing agencies to make exceptions.  Thus, 
coordinated export prices must be adhered to whenever set by the CCCMC. 
7.1065  Finally, the Panel concludes that the complainan ts failed to establish that China formally had 
in place or otherwise maintained a PVC custom s clearance procedure on exporters of yellow 
phosphorus at the time of the Panel's establis hment on 21 December 2009.  The Panel does not 
consider the absence of this final customs clear ance step sufficient to conclude that exporting 
                                                      
1514 Exhibits CHN-361 and CHN-362. 
1515 Exhibit CHN-362.  WT/DS394/R 
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  enterprises are not otherwise required to  adhere to coordinated export pr ices.  In addition, only one of 
the raw materials at issue – yellow phosphorus – w as subject to the PVC clearance procedure.  
7.1066  Accordingly, the Panel concludes that China, through the measures in the Panel's terms of 
reference, imposed an MEP require ment on exporters of bauxite, c oke, fluorspar, magnesium, silicon 
carbide, yellow phosphorus and zinc at the time of the Panel's establishment.  Coordinated export 
prices were enforced through the imposition of pe nalties on exporters and licensing entities that failed 
to conform to coordinated export prices.  The Panel finds that this system continued at least until the 
issuance of a resolution on 28 July 2010.
1516  Having concluded so, th e Panel will consider the 
complainants' claims under Article XI:1, X:1 and X:3(a) of the GATT 1994. 
3. Whether a requirement to export at a coor dinated minimum export price constitutes a 
restriction on exportation that is inconsis tent with Article XI:1 of the GATT 1994 
7.1067  The complainants argue that the requirement to  export at a coordinate d minimum export price 
amounts to a restriction that is inconsistent with Article XI:1 of the GATT 1994 because such a 
requirement prohibits exportation if the price of the export is lower than the floor established by the 
minimum export price.   In the complainants' view , this amounts to a "limiting condition" that is a 
restriction within the meaning of Article XI:1 of the GATT 1994.1517  They argue that China's system 
has an impact on prices and distorts world market conditions for the raw materials at issue because of 
China's alleged position as a leading producer of these materials.1518   
7.1068  China argues that Article XI:1 does not broadly prohibit regulation, or any condition imposed 
on exports or imports per se .  Rather, China argues that Article  XI:1 prohibits WTO Members from 
imposing a condition on exportation or importa tion that has a "limiting effect" on the quantity  of 
exports or imports.  China argues that in determin ing compliance of an MEP with Article XI:1, the 
relevant feature of an MEP requirement to consid er is the benchmark price used to determine the 
MEP and its relationship to the relevant world tradi ng price for a particular product.  Such analysis 
cannot assume that the MEP requirement is necessarily  higher than the market price, such that it 
would restrict exports; according to China, this must be proved.1519   
7.1069  The complainants request the Panel to conclude that a requirement to export at a coordinated 
minimum export price constitutes a restriction on exporta tion that is inconsistent with Article XI:1 of 
the GATT 1994.   
7.1070  The Panel concluded above that the operati on of the measures at issue amounts to a 
requirement to coordinate export prices.  In additi on, the Panel concluded that the measures at issue, 
including those that delegate aut hority to the CCCMC, are attributable to China and may be subject to 
WTO dispute settlement.  The Panel will consider  below whether requirement to export at a 
coordinated minimum export price constitutes a meas ure that may be challenged under Article XI:1. 
7.1071  Article XI of the GATT 1994 is entitled "General Elimination of Quantitative Restrictions".   
Article XI:1 provides: 
                                                      
1516 CCCMC Resolution on Abolition of Coordination and Administration of Export Commodities 
(Exhibit CHN-4). 
1517 United States' second written submission, para. 396; European Union's second written submission, 
para. 172; Mexico's first written submission, para. 399. 
1518 Complainants' joint opening oral statement at the first substantive meeting, para. 32. 
1519 China's first written submission, para. 860. WT/DS394/R 
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  "No prohibitions or restrictions other than duties, taxes or other charges, whether 
made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any contracting party on the importation of any product of 
the territory of any other contracting party or on the exportation or sale for export of 
any product destined for the territory of any other contracting party." 
7.1072  Thus, Article XI:1 requires the elimination of import and export restrictions or prohibitions 
made effective through quotas, import or export licences or other measures .   
7.1073  The GATT panel in Japan – Semi-Conductors  found that "Article XI:1, unlike other 
provisions of the General Agreement, did not refe r to laws or regulations but more broadly to 
'measures'.  This wording indicated clearly that any measure instituted or maintained by a contracting 
party which restricted the exportation or sale for e xport of products was covered by this provision, 
irrespective of the legal status of the measure."
1520  The panel in India – Quantitative Restrictions  
found that the text of Article XI:1 of the GATT 199 4 is "broad" in scope, providing for a general ban 
on import or export restrictions or prohibitions "other than duties, taxes or other charges".1521   
7.1074  In line with these views, the Panel concludes th at the requirement to export at a coordinated 
minimum export price, which is opera ted through a series of measures that are attributable to China, is 
a type of measure that may be challenged under Article XI:1.1522  Accordingly, the Panel will next 
consider whether the alleged MEP requirement is a "prohibition or restriction" on exportation under 
Article XI:1. 
7.1075  The applicability of Article XI:1 to minimu m price requirements has been previously 
addressed by two GATT panels.  In EEC - Minimum Import Prices , a GATT panel examined a 
requirement that importers of tomato concentrat es provide additional security to guarantee that the 
free-at-frontier price plus the customs duty payable would equal or exceed a determined minimum import price.  The security would be forfeited in proportion to any quantities imported at a price lower 
than the minimum price.  Subject  to an assessment of a possible exemption under Article XI:2(c)(i) 
                                                      
1520 GATT Panel Report, Japan – Semi-Conductors , para. 106. 
1521 The panel in India – Quantitative Restrictions found: 
"[T]he text of Article XI:1 is very broad in scope, providing for a general ban on import or 
export restrictions or prohibitions 'other than duties, taxes or other charges'. As was noted by the panel in Japan – Trade in Semi-conductors, the wording of Article XI:1 is comprehensive: 
it applies 'to all measures instituted or maintained by a [Member] prohibiting or restricting the 
importation, exportation, or sale for export of pr oducts other than measures that take the form 
of duties, taxes or other charges.' The scope of the term 'restriction' is also broad, as seen in its 
ordinary meaning, which is 'a limitation on action, a limiting condition or regulation'." 
(original footnotes omitted). Panel Report, India – Quantitative Restrictions , para. 5.128. See also Panel Report, EC – Poultry , 
para. 7.450; Panel Report, Colombia – Ports of Entry , para. 7.226. 
1522 The Panel considers its conclusion is consiste nt with the view taken by the GATT panel on Japan – 
Semi-Conductors .  The panel in that dispute concluded that a "complex of measures", comprising "an 
administrative structure" created by the Japanese government amounted to "a coherent system restricting the 
sale for export of monitored semi-conductors at prices  below specific company–specific costs to markets other 
than the United States, inconsistent with Article XI:1."  See GATT Panel Report on Japan – Semi-Conductors , 
paras. 106, 117.  The panel concluded that measures including repeated direct requests by the Japanese 
government, statutory requirements, and price monitoring, among others, op erated to "facilitate strong peer 
pressure to comply with requests by [the Japanese government]."  Even in the absence of what it described as 
"formal legally binding obligations", the panel concluded that the "complex of measures exhibited the rationale 
as well as the essential elements of a formal system of export control".  See para. 117.  WT/DS394/R 
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  and (ii), the panel found that the minimum import pric e system, as enforced by the additional security, 
was a restriction "other than duties, taxes or ot her charges" within the meaning of Article XI:1.
1523 
7.1076  In Japan – Semi-Conductors , a GATT panel examined whethe r measures applied to exports 
of semi-conductors at prices below company-specific costs constituted a restriction under Article XI:1 
of the GATT 1994.  The panel expressly referred to the rationale applied in EEC - Minimum Import 
Prices  in concluding that a regulation preventing exportation below a minimum price level was a 
restriction on exportation incons istent with Article XI:1.1524 
7.1077  The panel in India – Quantitative Restrictions  concluded that the scope of the term 
"restriction" is "broad", and, in terms of its or dinary meaning, is "a limitation on action, a limiting 
condition or regulation."1525  The panel in India – Autos also elaborated on the meaning of the term 
"restriction": 
"On a plain reading, it is clear that a 'restr iction' need not be a blanket prohibition or a 
precise numerical limit. Indeed, the term 'restriction' cannot mean merely 
'prohibitions' on importation, since Article XI :1 expressly covers both 'prohibition or 
restriction'. Furthermore, the Panel considers that the expression ' limiting condition ' 
used by the India – Quantitative Restrictions  panel to define the term 'restriction' and 
which this Panel endorses, is helpful in id entifying the scope of the notion in the 
context of the facts before it.  That phrase suggests the need to identify not merely a 
condition placed on importation, but a cond ition that is limiting, i.e., that has a 
limiting effect. In the context of Article XI, that limiting effect must be on 
importation itself." 1526 
7.1078  More recently, the panel in the Colombia – Ports of Entry , after reviewing several GATT and 
WTO cases, concluded that "restrictions" in the sense contemplated by Article XI:1 refers to measures 
that create uncertainties and affect investment plan s, restrict market access for imports or make 
importation prohibitively costly.1527  In making an assessment of whether a measure constitutes a 
restriction, the panel considered it important to l ook at the design of the measure and its potential to 
adversely affect importation.1528   
                                                      
1523 GATT Panel Report, EEC – Minimum Import Prices , para. 4.9. 
1524 GATT Panel Report, Japan – Semi-Conductors , para. 106.  The Panel concluded, that the "complex 
of measures" amounted to "a coherent system restricting the sale for export of monitored semi-conductors at 
prices below specific company–specifi c costs to markets other than the United States, inconsistent with 
Article XI:1."  GATT Panel Report, Japan – Semi-Conductors , para. 117. 
1525 Panel Report, India – Quantitative Restrictions , para. 5.128. 
1526 Panel Report, India – Autos , para. 7.270 (underlining and emphasis original).  Several WTO panels 
have cited with approval the interpretation that the term "restriction" in Article XI:1 refers to the imposition of a 
"limiting condition":  see Panel Report, Colombia – Ports of Entry , paras. 7.233-7.234; Panel Report, Brazil – 
Retreaded Tyres , para. 7.371; Panel Report, Dominican Republic – Import and Sale of Cigarettes , paras. 7.252 
and 7.258. 
1527 Panel Report, Colombia – Ports of Entry , para. 7.240.  The panel in Argentina – Hides and Leather  
recalled that "Article XI:1, like Articles I, II and III of the GATT 1994 , protects competitive opportunities of 
imported products not trade flows".  See Panel Report, Argentina – Hides and Leather , para. 11.20. 
1528 Panel Report, Colombia – Ports of Entry , para. 7.240, see also Panel Report, US – Poultry (China) , 
para. 7.454. WT/DS394/R 
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  7.1079  The term "restriction", as discussed by these three panels, aligns with the dictionary definition 
of the term "restriction", which is "a thing whic h restricts someone or something, a limitation on 
action, a limiting condition or regulation".
1529   
7.1080  The Panel concluded above that, through a ser ies of measures at i ssue, China requires 
exporting enterprises to export at set or coordi nated export prices or otherwise face penalties, 
including the possibility of having one's exporting rights revoked. 
7.1081  The Panel agrees with the approach set out in EEC - Minimum Import Prices  (taken in the 
case of importation) and followed in Japan – Semi-Conductors , that a measure preventing exportation 
below a minimum price level inherently constitut es a "restriction" that is inconsistent with 
Article XI:1.   In the Panel's view, the authority  to determine and require  exporters to follow a 
particular export price level and not deviate below it without facing what amounts to a strict penalty, 
including revocation of the right to export altogether , has the potential to restrict trade. The restriction 
or limitation on exportation arises from the possibility that  a price is set at such a level that exporters 
cannot find a potential buyer in order to sell their pr oduct.  Products that would have otherwise been 
exported would remain in the domestic mark et as a subsidiary effect of this.1530  The Panel consider 
the very potential to limit trade is sufficient to constitute a "restriction[] ... on the exportation or sale 
for export of any product" within the meaning of Article XI:1 of the GATT 1994.1531  The Panel 
considers this view is consistent with the conclusion by the panel on Colombia – Ports of Entry that 
any measure that creates uncertainty  as to the ability to import/export, and otherwise "compete" in the 
marketplace, violates Article XI:1.1532 
7.1082  At the time of the Panel's establishment, the Panel concludes that, under the measures at issue, 
China required exporting enterprises to export at set or coordinated export prices or otherwise face 
penalties, including the possibility of having one's exporting rights revoked.  The Panel concludes that 
this requirement constitutes a "restriction[] ... on the exportation or sale for export of any product" 
within the meaning of Article XI:1 of the GAT T 1994 because this requirement to export at a 
coordinated minimum export price by its very nature  has a limiting or restricting effect on trade. 
                                                      
1529 Shorter Oxford English Dictionary , 5th edn., L. Brown (ed.) (Oxford University Press, 2002), 
Vol. 2, p. 2554. 
1530 A requirement to set an export price above  the price that would otherwise prevail under free trade 
would have the effect of reducing export volumes. Unde r this scenario, exporters wo uld be unable to export the 
same volume of their product for sale at  that higher price.  Unsold export s would remain in the domestic market 
that otherwise would have been sold abroad.  The redu ction in exportatio n would amount to a limiting effect on 
exportation with the additional effect of driving down the domestic price of the particular product due to 
increased domestic supply.  Such an outcome would appear to result regardless of whether a particular exporting 
country has a relatively substantial shar e of production or a limited share.  The only difference to note is the 
following: if an exporting country controls a substantial or monopoly share of the world export market for a 
particular product (due to its position as a leading or sole producer of that product), the world price would 
increase as a result of the imposition of a minimum export price requirement that is set above the trading price 
that would prevail under free trade.  In this case, export volumes would decrease but would no t fall to zero.  If 
an exporting country were to control only a small share of  the world export market for a particular product, the 
world price would not be affected by the imposition of a minimum export requirement above the trading price 
that would prevail under free trade.  As a result, exports of that product would fall to zero. 
1531 In other contexts, panels and the Appellate Body have concluded that the potential to violate a 
provision was sufficient to result in inconsistency.  Under Article III, for instance, the GATT panel on EEC – 
Oilseeds I examined whether a purchase regulation which di d not necessarily discriminate against imported 
products in all cases but was capable  of doing so was inconsistent with Article III:4.  That panel concluded that 
the "exposure of a particular imported product to a risk of discrimination" constitutes a form of discrimination 
sufficient to violate Article III:4.  See GATT Panel Report, EEC – Oilseeds I , para. 141. 
1532 Panel Report, Colombia – Ports of Entry , para. 7.240.  WT/DS394/R 
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  4. Whether China's administration of the mini mum export price requirement through the 
PVC procedure as it applies to yellow pho sphorus is inconsistent with China's 
obligations under Article X:3(a) of the GATT 1994 
7.1083  The complainants additionally submit that China acts inconsistently with its obligations under 
Article X:3(a) of the GATT 1994 by authorizi ng the CCCMC to participate in the PVC customs 
clearance procedure in respect of yellow phosphorus .  The complainants allege that the CCCMC's 
involvement permits the flow of exporters' sens itive commercial information to representatives of 
parties with interests that are in conflict with those of the exporters.
1533  In their view, this contravenes 
China's obligation to administer its laws, regulations , decisions, and rulings pertaining to restrictions 
on exports in an impartial and reasonable manner under Article X:3(a) of the GATT 1994.1534    
7.1084  China submitted that it formally repealed  the PVC procedure in May 2008 when it 
"abandoned" price coordination, and therefore re quests the Panel to reject the complainants' 
claims.1535  China argues that the Panel cannot make r ecommendations regarding the administration of 
measures that have ceased to exist.1536   
7.1085  The Panel recalls from it 1 October 2010 pre liminary ruling its finding that all of the 
measures identified in connection with the PVC proce dure were outside the Panel's terms of reference 
because the complainants' Panel Requests did not id entify clearly and specifically the measures under 
challenge.1537  Accordingly, the Panel considers it is outside  of its mandate to rule on the complainants 
claims' that China's ad ministration of the minimum export price requirement through the PVC 
procedure as it applies to yellow phosphorus is  inconsistent with under Article X:3(a). 
7.1086  Even if the Panel were to have concluded ot herwise, the Panel recalls its conclusion in 
paragraph 7.1062 above that  "China did not formally have in place or otherwise maintain a PVC 
customs clearance procedure on exporters of yellow phosphorus at the time of the Panel's 
establishment on 21 December 2009".  Accordingly, for this further reason, the Panel considers it 
would be inappropriate to consider the complainants' claim. 
7.1087  Consequently, the Panel does not make findi ngs under Article X.3(a) of the GATT 1994 on 
whether China is in breach of its obligations in respect of China's administration of the minimum 
export price requirement through the PVC procedure as it applies to yellow phosphorus. 
5. Whether China's has failed to publish meas ures through which China administers its 
alleged minimum price requirement inconsis tently with China's obligations under 
Article X:1 of the GATT 1994 
7.1088  The complainants submit that China has breached  its obligations under Article X:1 by failing 
to publish promptly the: (i) 2001 CCCMC Charter ; (ii) CCCMC Branch-Specific Coordination 
Measures ; (iii) Rules for Coordination with Respect to Customs Price Review of Export Products ; 
(iv) Notice of the Rules on Price Reviews of Export Products by the Customs ; and (v) Provisional 
Rules on Export PVC .  
                                                      
1533 The PVC procedure requires exporters of yellow phosphorus to submit their export contracts and 
special PVC forms to the CCCMC for verification. 
1534 United States' first written submission, para. 364, European Union's first written submission, 
para. 368;  Mexico's first written submission para. 367. 
1535 China's first written submission, para. 867. 
1536 China's first written submission, para. 867. 
1537 See paragraphs 1.10 to 1.13 above; Annex F to these Reports. WT/DS394/R 
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  7.1089  The Panel recalls from it 1 October 2010 prelimin ary ruling its finding that only six measures 
referred to by the complainants in both their consultation requests and Panel Requests would form 
part of the Panel's terms of reference.
1538  Of the five measures identifie d in the preceding paragraph, 
only the 2001 CCCMC Charter  falls within the Panel's terms of reference.  Accordingly, the Panel 
will consider the complainants' claim in respect of this measure only. 
7.1090  The complainants submit that the CCCMC Charter is the CCCMC's constitution setting forth 
the mission, functions, authority, and rules and regulations of the CCCMC.  In addition, the 
complainants submit that China has described the Chamber of Co mmerce as "the instrumentality 
through which [MOFCOM] oversees and regulat es the business of importing and exporting [] 
products in China".1539  They argue that the 2001 CCCMC Charter  is therefore a law or regulation of 
general application made effective by a WTO Member  pertaining to restrictions on exports, and is 
subject to the obligations of Article X:1 of the GATT 1994.1540   
7.1091  China submits that the complainants have not  adduced argument and evidence showing that, 
in terms of Article X:1, the Charter is a "law[], regulation[], judicial decision[] and administration 
ruling[] of general application", within the meaning of Article X:1.1541  China asserts that such a 
determination "must be based primarily on the c ontent and substance of the instrument, and not 
merely on its form or nomenclature".1542  China argues that the 2001 CCCMC Charter  does not 
contain either imperative or authoritative rules of  conduct that would bring it within the scope of 
Article X:1.1543  Even assuming Article X:1 would apply, China argues that the 2001 CCCMC Charter 
was formally replaced by the 2010 CCCMC Charter .  China argues that obliging it to publish an 
expired measure serves no purpose.1544  
7.1092  As noted in footnote 1445, the 2010 CCCMC Charter  has a different "essence" than the 2001 
Charter  that was in place at the time of the Panel' s establishment because it appears to remove all 
authority from the CCCMC to coordinate export prices.  Many of the provisions of the 2010 CCCMC 
Charter  are similar to those in the 2001 CCCMC Charter , and in some cases identical.  However, in 
view of the at least one significant difference just noted between the two charters, with regard to the 
role of the CCCMC, publication of the 2010 CCCMC Charter  cannot constitute publication of the 
former.  Moreover, at the request of the compla inants, the Panel will only assess the WTO consistency 
of the measures in existence on 21 December 2009, in this case the 2001 CCCMC Charter , while 
taking note that the 2010 CCCMC Charter  no longer provides for the CCCMC to coordinate export 
prices. Accordingly, the Panel will not consider the 2010 CCCMC Charter  in addressing whether 
China failed to publish the 2001 CCCMC Charter  inconsistently with  its obligations under 
Article X:1 of the GATT 1994. 
7.1093  Article X:1 of the GATT 1994 provides in relevant part: 
                                                      
1538 See paragraphs 1.10 to 1.13 above; Annex F to these Reports. 
1539 United States' first written submission, para. 208 , citing Brief of Amicus Curiae: MOFCOM p. 9 
(Exhibit JE-98); United States' response to Panel question No. 67 following the second substantive meeting, 
para 133; The European Union and Mexico refer to the United States' response to Panel question No. 67 
following the second substantive meeting. 
1540 Complainants' response to Panel question No. 68 following the second substantive meeting, 
para. 134. 
1541 China's second written submission, para. 580. 
1542 China's comments on the complainants' responses to Panel question No. 68 following the second 
substantive meeting, referring to Panel Report, EC – IT Products , para. 7.1023. 
1543 China's comments on the complainants' responses to Panel question No. 68 following the second 
substantive meeting, referring to Panel Report, EC – IT Products , para. 7.1027. 
1544 China's second written submission, para. 582.  WT/DS394/R 
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  "Laws, regulations, judicial decisions and administrative rulings of general 
application, made effective by any contracti ng party, pertaining to … restrictions or 
prohibitions on … exports … shall be published promptly in such a manner as to 
enable governments and traders to become acquainted with them. …" 
7.1094  The complainants in this dispute must thus estab lish that the relevant measure falls within the 
scope of "laws, regulations, judicial decisions and administrative rulings of general application made 
effective by" China that pertains to restrictions or  prohibitions on exports; if so, China must promptly 
publish the minimum export price requirement in such  a manner as to enable governments and traders 
to become acquainted with it. 
7.1095  The panel on EC – Selected Customs Matters  found that "laws, regulations, judicial decisions 
and administrative rulings of general application"  described in Article X:1 of the GATT 1994 are  
those "laws, regulations, judicial decisions and administrative rulings that apply to a range of 
situations or cases, rather than being limited in their scope of application".
1545 The Panel on EC – IT 
Products concluded that the phrase "laws, regulations, j udicial decisions and administrative rulings" 
"reflects an intention on the part of the drafters to include a wide range of measures that have the 
potential to affect trade and traders."1546  I n  US – Underwear , the Panel explained that an 
administrative order was of "general application"  "to the extent that the restraint affects an 
unidentified number of economic operators, including domestic and foreign producers."1547 The term 
"made effective" in the context of Article X:1 has so far only been addressed by the panel on EC – IT 
Products.  This panel held that the term "made effec tive" covers measures that were brought into 
effect, or made operative, in practice and is not lim ited to measures formally promulgated or that have 
formally entered into force.1548 
7.1096  The Panel recalls its earlier conclusi on at paragraph 7.1006 above that the 2001 CCCMC 
Charter  is a measure attributable to China and thus  is a measure that can be challenged under the 
WTO dispute settlement proceedings.  In reachi ng this conclusion, the Panel noted China's 
acknowledgement that it delegate d certain implementing authority to the CCCMC to coordinate 
export prices.  This is reflected in statements made by China's MOFCOM in the context of US 
domestic court proceedings prior to this dispute.  For this reason, the Panel considered that actions 
undertaken by the CCCMC with respect to minimum e xport price requirements at issue in this dispute 
are attributable to China. 
7.1097  Thus, the 2001 CCCMC Charter  grants authority to the CCCMC and sets out the functions, 
structure and operation of the CCCMC.  In par ticular it directs the CCCMC to "provide[] 
coordination, guidance and consu ltation services", including to "[d]isseminate and implement[] the 
state's foreign trade laws, regulations, guidelines, and policies" and "coordinate and direct import and 
export trade activities by business within the industries".1549  The scope of authority is further 
indicated in the description of the Charter's overall objectives, which include to "coordinate and direct 
import and export trade activities of Meta ls, Minerals & Chemicals Industries".1550    
7.1098  In the Panel's view, China's statement of the authority vested in the CCCMC, and the cited 
provisions of the 2001 CCCMC Charter  make clear that the 2001 CCCMC Charter  is a measure that 
has the potential to affect trade and traders, incl uding a wide array of domestic and foreign economic 
                                                      
1545 Panel Report, EC – Selected Customs Matters , para. 7.116. 
1546 Panel Report, EC – IT Products , para. 7.1026. 
1547 Panel Report, US – Underwear , para. 7.65. 
1548 Panel Report, EC – IT Products , para. 7.1047. 
1549 2001 CCCMC Charter , Article 6(1) (Exhibit JE-87). 
1550 2001 CCCMC Charter , Article 3 (Exhibit JE-87). WT/DS394/R 
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  operators, in particular, the "trade activities" of  business within the broad metals, minerals and 
chemicals industries.  Accordingly, in line with the Appellate Body's view on "measures of general 
application" and previous panels' views on the scope of Article X:1, we conclude that the 2001 
CCCMC Charter  is a law, regulation, judicial decision or  administrative ruling of general application 
within the meaning of Article X:1. 
7.1099  China submits that a resolution of 21 February 2001 confirms that the 2001 CCCMC Charter  
replaced the 1994 CCCMC Charter .
1551  Thus, from this statement it appears that the 2001 CCCMC 
Charter  became effective at a point in 2001. 
7.1100  The Panel further recalls its finding in para graph 7.1017 above that the reference to 
"coordinat[ion]" of "export trade activities" in Article 3 of the 2001 CCCMC Charter  is broad enough 
to encompass price coordination, and that the CCC MC was indeed authorized to coordinate export 
prices under the 2001 CCCMC Charter .1552  The Panel concluded that the requirement to export at a 
coordinated minimum export price by its very nature has a limiting or restricting effect on trade, and 
therefore constitutes a restriction within the meaning of Article XI:1.  Accordingly, for purposes of its 
Article X:1 assessment, the Panel further concludes that the 2001 CCCMC Charter  pertains to 
restrictions or prohibitions on exports within the meaning of Article X:1. 
7.1101  Finally, the complainants assert that the 2001 CCCMC Charter  was not published on the 
CCCMC website until well into 2009, after the request for consultations in this dispute had been 
made, and therefore was not "published promptly" in  a manner consistent with the requirements of 
Article X:1.  The concept of "prompt" is not a ddressed in Article X:1 or elsewhere in the WTO 
Agreement.  In the Panel's view, an analysis of  whether a measure was published promptly requires a 
reference point, some act or thing to act as a point of comparison so as to determine whether publication was prompt.
1553  It would seem an appropriate reference point in this instance should 
approximate the date when the 2001 CCCMC Charter  became effective.  The Panel noted China's 
confirmation that that the 2001 CCCMC Charter  replaced the preceding Charter on 21 February 2001.  
Due to its publication in 2009, it therefore appears that 2001 CCCMC Charter  was only published on 
the CCCMC website eight years after the date that it had been made effective.   
7.1102  Consequently, for the foregoing reasons, the Pane l finds that China failed to publish promptly 
the 2001 CCCMC Charter  in such a manner as to enable governments and traders to become 
acquainted as is required under Article X:1 of the GATT 1994.  Accordingly, the Panel concludes that 
China has acted inconsistently with Article X:1. 
6. Summary 
7.1103  At the time of the Panel's establishment, the Panel concludes that, under the measures at issue, 
China required exporting enterprises to export at set or coordinated export prices or otherwise face 
penalties, including the possibility of having one's exporting rights revoked.  The Panel concludes that 
this requirement, which was formally in force in China at the time of the Panel's establishment, 
constitutes a "restriction[] ... on the exportation or sal e for export of any prod uct" within the meaning 
of Article XI:1 of the GATT 1994 because this re quirement to export at a coordinated minimum 
                                                      
1551 China's response to Panel question No. 69 followi ng the second substantive meeting, paras 341-
343; See Letter by the China CCCMC, 3 December 2010 (Exhibit CHN-541). 
1552 The Panel recalls that Article 3 of the 2001 CCCMC Charter  specifies that the CCCMC is to 
"coordinate and direct import and export trade activities of Metals, Minerals & Chemicals industries".  
Article 6(3) provides that the CCCMC shall "promote the industry's self-discipline", including adopting 
"sanction measures against breaching companies. 
1553 The panel in EC – IT Products stated that "the meaning of prompt is not an absolute concept, i.e. a 
pre-set period of time applicable in all cases": see Panel report, EC – IT Products , para. 7.1074.  WT/DS394/R 
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  export price by its very nature has a limiting or rest ricting effect on trade.  The Panel also concludes 
that China failed to publish promptly the 2001 CCCMC Charter  in such manner as to enable 
governments and traders to become acquainted as is  required under Article X:1 of the GATT 1994.  
The Panel does not make findings under Article X: 3(a) of the GATT 1994 on whether China is in 
breach of its obligations in respect of China's administration of the minimum export price requirement through the PVC procedure as it applies to yellow phosphorus. 
VIII.  CONCLUSIONS AND RECOMMENDATIONS 
8.1 The Panel issues its findings in the form of a single document containing three separate 
Reports with common sections on the Panel's findings and separate sections on the Panel's 
conclusions and recommendations for each complaini ng party.  The Panel's findings incorporate the 
conclusions of its preliminary rulings, attached to these Reports as Annex F. 
 WT/DS394/R 
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  A. C
OMPLAINT BY THE UNITED STATES (DS394) 
1. Conclusions 
8.2 In respect of claims concerning export duties:1554 
(a) The Panel finds that the application of export duties to certain forms of bauxite, coke, 
fluorspar, magnesium, manganese, silicon metal and zinc, by virtue of the series of 
measures at issue1555, is inconsistent with Paragr aph 11.3 of China's Accession 
Protocol; 
(b) The Panel finds that China may not seek to justify the application of export duties to 
forms of fluorspar pursuant to Article XX(g) of the GATT 1994.  Even assuming arguendo  that China could seek to justify the ap plication of export duties, the Panel 
finds that China has not demonstrated that th e application of export duties to forms of 
fluorspar is justified pursuant to Article XX(g) of the GATT 1994; 
(c) The Panel finds that China may not seek to justify the application of export duties to 
forms of magnesium, manganese and zinc pursuant to Article XX(b) of the GATT 1994.  Even assuming arguendo  that China could seek to justify the 
application of export duties, the Panel finds that China has not demonstrated that the 
application of export duties to forms of magnesium, manganese and zinc is justified pursuant to Article XX(b) of the GATT 1994; and 
(d) The Panel concludes that the Adjustment of Export Tariffs Circular removed the 
WTO-inconsistent special duty applicable to yellow phosphorus before the Panel's 
establishment on 21 December 2009.  Therefore, the Panel makes no findings on the 
2009 Tariff Implementation Program  that applied a special duty rate to yellow 
phosphorus prior to 1 July 2009. 
8.3 In respect of claims concerning export quotas:
1556 
(a) The Panel finds that the application of expor t quotas to certain forms of bauxite, coke, 
fluorspar and silicon carbide, by virtue of the series of measures at issue1557, is 
inconsistent with Article XI:1 of the GATT 1994; 
(b) The Panel finds that the application of an  export ban on certain forms of zinc, by 
virtue of the series measures at issue1558, is inconsistent with Article XI:1 of the 
GATT 1994;   
(c) The Panel finds that China has not demonstr ated that the application of an export 
quota to refractory-grade bauxite, classifiable under HS No. 2508.3000, is justified 
pursuant to Articles XI:2(a) or XX(g) of the GATT 1994; 
(d) The Panel finds that China has not demonstr ated that the application of export quotas 
to coke and silicon carbide is justified pu rsuant to Article XX(b) of the GATT 1994; 
and 
                                                      
1554 The specific forms of the raw materials subject to the United States' cl aims are identified in 
Exhibit JE-5 and paragraph 2.2 of the Descriptive Part to these Reports. 
1555 See discussion in Section VII.B.2 above. 
1556 The specific forms of the raw materials subject to the United States' cl aims are identified in 
Exhibit JE-6 and paragraph 2.2 of the Descriptive Part to these Reports.   
1557 See discussion in Section VII.C.3 above. 
1558 See discussion in Section VII.C.3 above.  WT/DS394/R 
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  (e) The Panel exercises judicial economy in r espect of whether the application of export 
quotas to bauxite, coke, fluorspar and silicon carbide, or the application of an export 
prohibition to zinc, are inconsistent with Paragraph 1.2 of China's Accession Protocol 
and Paragraphs 162 and 165 of China's Working Party Report. 
8.4 In respect of claims concerning export quota administration and allocation:1559 
(a) The Panel finds that China's prior export experience or export performance 
requirement, and minimum registered capital requirement, imposed on coke by virtue 
of the measures at issue1560, are inconsistent with Paragraphs 1.2 and 5.1 of China's 
Accession Protocol, read in combination w ith Paragraphs 83(a), 83(b) and 83(d); and 
Paragraphs 84(a) and 84(b) of China's Working Party Report; 
(b) The Panel finds that China's prior export experience or export performance 
requirements, and minimum registered capital requirement, imposed on bauxite, 
fluorspar and silicon carbide by virtue of the measures at issue1561, are inconsistent 
with Paragraphs 1.2 and 5.1 of China's A ccession Protocol, read in combination with 
Paragraphs 83(a), 83(b) and 83(d); and read  in combination with Paragraphs 84(a) 
and 84(b) of China's Working Party Report; 
(c) The Panel finds that China's administration of its coke export quota through the 
involvement of the CCCMC is not inconsistent with Article X:3(a) of the GATT 1994; 
(d) The Panel finds that China's administration of its export quota bidding system for 
bauxite, fluorspar and silicon carbide through the involvement of the CCCMC is not 
inconsistent with Article X:3(a) of the GATT 1994; and 
(e) The Panel finds that the requirement for an exporter applicant to pay a bid-winning 
price for the right to export bauxite, fluorspa r and silicon carbide is not inconsistent 
with Article VIII:1(a) of the GATT 1994 or  Paragraph 11.3 of China's Accession 
Protocol. 
8.5 In respect of claims concerning export licensing requirements:
1562 
(a) The Panel finds that China's export licensing regime is not per se  inconsistent with 
Article XI:1 of the GATT 1994 solely on the basis that it permits export licensing agencies to require a licence for goods  subject to export restrictions; 
(b) The Panel finds that Article 11(7) of 2008 Export License Administration Measures , 
and Articles 5(5) and 8(4) of  the Working Rules on Export Licenses , as applicable to 
export licences granted to applicants to export bauxite, coke, fluorspar, manganese, 
silicon carbide and zinc, are inconsistent  with Article XI:1 of the GATT 1994; 
(c) The Panel does not make findings that Article 21 of the CCCMC Coordination 
Measures  is inconsistent with GATT Article XI:1 in respect of the United States' 
claims concerning China's export licensing requirements because it is outside the 
Panel's terms of reference; 
                                                      
1559 The specific forms of the raw materials subject to the United States' claims are identified in Exhibit 
JE-6 and paragraph 2.2 of the Descriptive Part to these Reports. 
1560 See discussion in Section VII.E.1 above. 
1561 See discussion in Section VII.E.1 above. 
1562 The specific forms of the raw materials subject to the United States' claims are identified in Exhibit 
JE-6 and paragraph 2.2 of the Descriptive Part to these Reports. WT/DS394/R 
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  (d) The Panel does not make findings that Article 40(3) of China's  Measures for the 
Administration of Licensing Entities  is inconsistent with GATT Article XI:1 in 
respect of the United States' claims con cerning China's export licensing requirements; 
and 
(e) The Panel exercises judicial economy in r espect of whether China's export licensing 
regime is inconsistent with  Paragraph 1.2 of China's Accession Protocol, read in 
combination with Paragraphs 162 and 1 65 of China's Working Party Report. 
8.6 In respect of claims concerning a minimum export price requirement:
1563  
(a) The Panel finds that China, through the 2001 CCCMC Charter , Export Price 
Penalties Regulations , and Measures for Administration of Licensing Entities , 
imposed a minimum export price require ment on exporters of bauxite, coke, 
fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc, that is inconsistent with Article XI:1 of the GATT 1994; 
(b) The Panel finds that China failed to publish promptly the 2001 CCCMC Charter  in 
such manner that is consistent w ith Article X:1 of the GATT 1994; and 
(c) The Panel does not make findings on whether the administration of the price 
verification and chop procedure to yellow  phosphorus by the CCCMC is inconsistent 
with Article X:3(a) of the GATT 1994 because it is outside the Panel's terms of reference. 
2. Nullification and impairment 
8.7 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed 
under a covered agreement, the action is considered prima facie  to constitute a case of nullification or 
impairment of benefits under that agreement. Acco rdingly, we conclude that where China has acted 
inconsistently with Articles X:1, X:3(a), XI:1 of the GATT 1994; Paragraphs 1.2, 5.1 and 11.3 of 
China's Accession Protocol; and Paragraphs 83 an d 84 of China's Working Party Report, it has 
nullified or impaired benefits accruing to the United States under the WTO Agreement.  
3. Recommendations 
8.8 Pursuant to Article 19.1 of the DSU, having fo und that China has acted inconsistently with 
Articles X:1, X:3(a) and XI:1 of the GATT 1994; Paragraphs 1.2, 5.1 and 11.3 of China's Accession 
Protocol; and Paragraphs 83 and 84 of China's Wo rking Party Report, the Panel recommends that the 
Dispute Settlement Body requests China to bring the existing measures at issue into conformity with 
its obligations under the GATT 1994, China's Accessi on Protocol and China's Working Party Report.  
The Panel makes no recommendation on expired measures, namely the 2009 measures at issue and 
pre-2009 MEP-related measures. In respect of fi ndings concerning export duties and export quotas, 
the Panel found that the series of measures operati ng collectively has resulted in the imposition of 
export duties or export quotas that are inconsiste nt with China's WTO obligations.  The Panel, 
therefore, recommends that the Dispute Settlement Body requests China to bring its measures into 
conformity with its WTO obligations such that th e "series of measures" does not operate to bring 
about a WTO-inconsistent result.  
                                                      
1563 The specific forms of the raw materials subject to the United States' claims are identified in Exhibit 
JE-7 and paragraph 2.2 of the Descriptive Part to these Reports.  WT/DS395/R 
 Page 275 
 
 
  B. COMPLAINT BY THE EUROPEAN UNION (DS395) 
1. Conclusions 
8.9 In respect of claims concerning export duties:1564 
(a) The Panel finds that the application of export duties to certain forms of bauxite, coke, 
fluorspar, magnesium, manganese, silicon metal and zinc, by virtue of the series of 
measures at issue1565, is inconsistent with Paragr aph 11.3 of China's Accession 
Protocol; 
(b) The Panel finds that China may not seek to justify the application of export duties to 
forms of fluorspar pursuant to Article XX(g) of the GATT 1994.  Even assuming arguendo  that China could seek to justify the ap plication of export duties, the Panel 
finds that China has not demonstrated that th e application of export duties to forms of 
fluorspar is justified pursuant to Article XX(g) of the GATT 1994; 
(c) The Panel finds that China may not seek to justify the application of export duties to 
forms of magnesium, manganese and zinc pursuant to Article XX(b) of the GATT 1994.  Even assuming arguendo  that China could seek to justify the 
application of export duties, the Panel finds that China has not demonstrated that the 
application of export duties to forms of magnesium, manganese and zinc is justified pursuant to Article XX(b) of the GATT 1994; and 
(d) The Panel concludes that the Adjustment of Export Tariffs Circular removed the 
WTO-inconsistent special duty applicable to yellow phosphorus before the Panel's 
establishment on 21 December 2009.  Therefore, the Panel makes no findings on the 
2009 Tariff Implementation Program  that applied a special duty rate to yellow 
phosphorus prior to 1 July 2009.  
8.10 In respect of claims concerning export quotas:
1566 
(a) The Panel finds that the application of expor t quotas to certain forms of bauxite, coke, 
fluorspar and silicon carbide, by virtue of the series of measures at issue1567, is 
inconsistent with Article XI:1 of the GATT 1994; 
(b) The Panel finds that the application of an  export ban on certain forms of zinc, by 
virtue of the series measures at issue1568, is inconsistent with Article XI:1 of the 
GATT 1994;   
(c) The Panel finds that China has not demonstr ated that the application of an export 
quota to refractory-grade bauxite, classifiable under HS No. 2508.3000, is justified 
pursuant to Articles XI:2(a) or XX(g) of the GATT 1994; 
(d) The Panel finds that China has not demonstr ated that the application of export quotas 
to coke and silicon carbide is justified pu rsuant to Article XX(b) of the GATT 1994; 
and 
                                                      
1564 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-5 and paragraph 2.2 of the Descriptive Part to these Reports. 
1565 See discussion in Section VII.B.2 above. 
1566 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-6 and paragraph 2.2 of the Descriptive Part to these Reports.   
1567 See discussion in Section VII.C.3 above. 
1568 See discussion in Section VII.C.3 above. WT/DS395/R 
Page 276  
 
  (e) The Panel exercises judicial economy in r espect of whether the application of export 
quotas to bauxite, coke, fluorspar and silicon carbide, or the application of an export 
prohibition to zinc, are inconsistent with Paragraph 1.2 of China's Accession Protocol 
and Paragraphs 162 and 165 of China's Working Party Report. 
8.11 In respect of claims concerning export quota administration and allocation:
1569 
(a) The Panel finds that China's prior export experience or export performance 
requirement, and minimum registered capital requirement, imposed on coke by virtue 
of the measures at issue1570, are inconsistent with Paragraphs 1.2 and 5.1 of China's 
Accession Protocol, read in combination w ith Paragraphs 83(a), 83(b) and 83(d); and 
Paragraphs 84(a) and 84(b) of China's Working Party Report; 
(b) The Panel finds that China's prior export experience or export performance 
requirement, imposed on coke is not incons istent with Paragraph 5.2 of China's 
Accession Protocol read in combination with  Paragraphs 84(a) and 84(b) of China's 
Working Party Report;  
(c) The Panel finds that China's prior export experience or export performance 
requirements, and minimum registered capital requirement, imposed on bauxite, 
fluorspar and silicon carbide by virtue the measures at issue1571, are inconsistent with 
Paragraphs 1.2 and 5.1 of China's Accessi on Protocol, read in combination with 
Paragraphs 83(a), 83(b) and 83(d); and read  in combination with Paragraphs 84(a) 
and 84(b) of China's Working Party Report; 
(d) The Panel finds that China's prior export experience or export performance 
requirement imposed on bauxite, fluorspar and silicon carbide is not inconsistent with 
Paragraph 5.2 of China's Accession Protocol  read in combination with Paragraphs 
84(a) and 84(b) of China's Working Party Report; 
(e) The Panel finds that China's allocation of directly allocated export quotas through the 
use of the operation capacity criterion, by virtue of the measures at issue1572, is 
inconsistent with Article X:3(a) of the GATT 1994; 
(f) The Panel finds that China's did not publish promptly the total amount and procedure 
for the allocation of a zinc export quota and thus acted in a manner inconsistent with 
Article X:1 of the GATT 1994; and 
(g) The Panel does not make findings that China did not publish promptly the total 
amount of the coke export quota in such a manner that is inconsistent with 
Article X:1 of the GATT 1994 because this claim is outside the Panel's  terms of 
reference. 
8.12 In respect of claims concerning export licensing requirements:1573 
                                                      
1569 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-6 and paragraph 2.2 of the Descriptive Part to these Reports. 
1570 See discussion in Section VII.E.1 above. 
1571 See discussion in Section VII.E.1 above. 
1572 See discussion in Section VII.E.2 above. 
1573 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-6 and paragraph 2.2 of the Descriptive Part to these Reports.  WT/DS395/R 
 Page 277 
 
 
  (a) The Panel finds that China's export licensing regime is not per se  inconsistent with 
Article XI:1 of the GATT 1994 solely on the basis that it permits export licensing agencies to require a licence for goods  subject to export restrictions; 
(b) The Panel finds that Article 11(7) of 2008 Export License Administration Measures , 
and Articles 5(5) and 8(4) of  the Working Rules on Export Licenses , as applicable to 
export licences granted to applicants to export bauxite, coke, fluorspar, manganese, 
silicon carbide and zinc, are inconsistent  with Article XI:1 of the GATT 1994; 
(c) The Panel finds that the European Union's claims under Articles X:1 and X:3(a) 
concerning export licensing are outside  the Panel's terms of reference; 
(d) The Panel exercises judicial economy in r espect of whether China's export licensing 
regime is inconsistent with  Paragraph 1.2 of China's Accession Protocol, read in 
combination with Paragraphs 162 and 165 of China's Working Party Report; and 
(e) The Panel exercises judicial economy in r espect of whether China's export licensing 
regime is inconsistent with  Paragraphs 1.2 and 5.1 of China's Accession Protocol, 
read in combination with Paragraphs 83 and 84 of China's Working Party Report. 
8.13 In respect of claims concerning a minimum export price requirement:
1574  
(a) The Panel finds that China, through the 2001 CCCMC Charter , Export Price 
Penalties Regulations , and Measures for Administration of Licensing Entities , 
imposed a minimum export price require ment on exporters of bauxite, coke, 
fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc, that is inconsistent with Article XI:1 of the GATT 1994; 
(b) The Panel finds that China failed to publish promptly the 2001 CCCMC Charter  in 
such manner that is consistent w ith Article X:1 of the GATT 1994; and 
(c) The Panel does not make findings on whether the administration of the price 
verification and chop procedure to yellow  phosphorus by the CCCMC is inconsistent 
with Article X:3(a) of the GATT 1994 because it is outside the Panel's terms of 
reference. 
2. Nullification and impairment 
8.14 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed 
under a covered agreement, the action is considered prima facie  to constitute a case of nullification or 
impairment of benefits under that agreement. Acco rdingly, we conclude that where China has acted 
inconsistently with Articles X:1, X:3(a), XI:1 of the GATT 1994; Paragraphs 1.2, 5.1 and 11.3 of 
China's Accession Protocol; and Paragraphs 83 an d 84 of China's Working Party Report, it has 
nullified or impaired benefits accruing to th e European Union under the WTO Agreement.  
3. Recommendations 
8.15 Pursuant to Article 19.1 of the DSU, having fo und that China has acted inconsistently with 
Articles X:1, X:3(a) and XI:1 of the GATT 1994; Paragraphs 1.2, 5.1 and 11.3 of China's Accession 
Protocol; and Paragraphs 83 and 84 of China's Wo rking Party Report, the Panel recommends that the 
Dispute Settlement Body requests China to bring the existing measures at issue into conformity with 
                                                      
1574 The specific forms of the raw materials subject to  the European Union's cl aims are identified in 
Exhibit JE-7 and paragraph 2.2 of the Descriptive Part to these Reports. WT/DS395/R 
Page 278  
 
  its obligations under the GATT 1994, China's Accessi on Protocol and China's Working Party Report.  
The Panel makes no recommendation on expired measures, namely the 2009 measures at issue and pre-2009 MEP-related measures. In respect of fi ndings concerning export duties and export quotas, 
the Panel found that the series of measures operati ng collectively has resulted in the imposition of 
export duties or export quotas that are inconsiste nt with China's WTO obligations.  The Panel, 
therefore, recommends that the Dispute Settlement Body requests China to bring its measures into 
conformity with its WTO obligations such that th e "series of measures" does not operate to bring 
about a WTO-inconsistent result.  
  WT/DS398/R 
 Page 279 
 
 
  C. COMPLAINT BY MEXICO (DS398) 
1. Conclusions 
8.16 In respect of claims concerning export duties:1575 
(a) The Panel finds that the application of export duties to certain forms of bauxite, coke, 
fluorspar, magnesium, manganese, silicon metal and zinc, by virtue of the series of 
measures at issue1576, is inconsistent with Paragr aph 11.3 of China's Accession 
Protocol; 
(b) The Panel finds that China may not seek to justify the application of export duties to 
forms of fluorspar pursuant to Article XX(g) of the GATT 1994.  Even assuming arguendo  that China could seek to justify the ap plication of export duties, the Panel 
finds that China has not demonstrated that th e application of export duties to forms of 
fluorspar is justified pursuant to Article XX(g) of the GATT 1994; 
(c) The Panel finds that China may not seek to justify the application of export duties to 
forms of magnesium, manganese and zinc pursuant to Article XX(b) of the GATT 1994.  Even assuming arguendo  that China could seek to justify the 
application of export duties, the Panel finds that China has not demonstrated that the 
application of export duties to forms of magnesium, manganese and zinc is justified pursuant to Article XX(b) of the GATT 1994; and 
(d) The Panel concludes that the Adjustment of Export Tariffs Circular removed the 
WTO-inconsistent special duty applicable to yellow phosphorus before the Panel's 
establishment on 21 December 2009.  Therefore, the Panel makes no findings on the 
2009 Tariff Implementation Program  that applied a special duty rate to yellow 
phosphorus prior to 1 July 2009.  
8.17 In respect of claims concerning export quotas:
1577 
(a) The Panel finds that the application of expor t quotas to certain forms of bauxite, coke, 
fluorspar and silicon carbide, by virtue of the series of measures at issue1578, is 
inconsistent with Article XI:1 of the GATT 1994; 
(b) The Panel finds that the application of an  export ban on certain forms of zinc, by 
virtue of the series measures at issue1579, is inconsistent with Article XI:1 of the 
GATT 1994;   
(c) The Panel finds that China has not demonstr ated that the application of an export 
quota to refractory-grade bauxite, classifiable under HS No. 2508.3000, is justified 
pursuant to Articles XI:2(a) or XX(g) of the GATT 1994; 
(d) The Panel finds that China has not demonstrated that the application of export quotas 
to coke and silicon carbide is justified pu rsuant to Article XX(b) of the GATT 1994; 
and 
                                                      
1575 The specific forms of the raw materials subject to  Mexico's claims are identified in Exhibit JE-5 
and paragraph 2.2 of the Descriptive Part to these Reports. 
1576 See discussion in Section VII.B.2 above. 
1577 The specific forms of the raw materials subject to  Mexico's claims are identified in Exhibit JE-6 
and paragraph 2.2 of the Descriptive Part to these Reports.   
1578 See discussion in Section VII.C.3 above. 
1579 See discussion in Section VII.C.3 above. WT/DS398/R 
Page 280  
 
  (e) The Panel exercises judicial economy in r espect of whether the application of export 
quotas to bauxite, coke, fluorspar and silicon carbide, or the application of an export 
prohibition to zinc, are inconsistent with Paragraph 1.2 of China's Accession Protocol 
and Paragraphs 162 and 165 of China's Working Party Report. 
8.18 In respect of claims concerning export quota administration and allocation:
1580 
(a) The Panel finds that China's prior export experience or export performance 
requirement, and minimum registered capital requirement, imposed on coke by virtue 
of the measures at issue1581, are inconsistent with Paragraphs 1.2 and 5.1 of China's 
Accession Protocol, read in combination w ith Paragraphs 83(a), 83(b) and 83(d); and 
Paragraphs 84(a) and 84(b) of China's Working Party Report; 
(b) The Panel finds that China's prior export experience or export performance 
requirements, and minimum registered capital requirement, imposed on bauxite, 
fluorspar and silicon carbide by virtue the measures at issue1582, are inconsistent with 
Paragraphs 1.2 and 5.1 of China's Accessi on Protocol, read in combination with 
Paragraphs 83(a), 83(b) and 83(d); and read  in combination with Paragraphs 84(a) 
and 84(b) of China's Working Party Report; 
(c) The Panel finds that China's administration of its coke export quota through the 
involvement of the CCCMC is not inconsistent with Article X:3(a) of the GATT 1994; 
(d) The Panel finds that China's administration of its export quota bidding system for 
bauxite, fluorspar and silicon carbide through the involvement of the CCCMC is not 
inconsistent with Article X:3(a) of the GATT 1994; and 
(e) The Panel finds that the requirement for an exporter applicant to pay a bid-winning 
price for the right to export bauxite, fluorspa r and silicon carbide is not inconsistent 
with Article VIII:1(a) of the GATT 1994 or  Paragraph 11.3 of China's Accession 
Protocol. 
8.19 In respect of claims concerning export licensing requirements:
1583 
(a) The Panel finds that China's export licensing regime is not per se  inconsistent with 
Article XI:1 of the GATT 1994 solely on the basis that it permits export licensing agencies to require a licence for goods  subject to export restrictions; 
(b) The Panel finds that Article 11(7) of 2008 Export License Administration Measures , 
and Articles 5(5) and 8(4) of  the Working Rules on Export Licenses , as applicable to 
export licences granted to applicants to export bauxite, coke, fluorspar, manganese, 
silicon carbide and zinc, are inconsistent  with Article XI:1 of the GATT 1994; 
(c) The Panel does not make findings that Article 21 of the CCCMC Coordination 
Measures  or Article 40(3) of China's  Measures for the Administration of Licensing 
Entities  is inconsistent with GATT Article XI:1 in respect of Mexico's claims 
concerning China's export licensing requirements; 
                                                      
1580 The specific forms of the raw materials subject to  Mexico's claims are identified in Exhibit JE-6 
and paragraph 2.2 of the Descriptive Part to these Reports. 
1581 See discussion in Section VII.E.1 above. 
1582 See discussion in Section VII.E.1 above. 
1583 The specific forms of the raw materials subject to  Mexico's claims are identified in Exhibit JE-6 
and paragraph 2.2 of the Descriptive Part to these Reports.  WT/DS398/R 
 Page 281 
 
 
  (d) The Panel exercises judicial economy in r espect of whether China's export licensing 
regime is inconsistent with  Paragraph 1.2 of China's Accession Protocol, read in 
combination with Paragraphs 162 and 1 65 of China's Working Party Report. 
8.20 In respect of claims concerning a minimum export price requirement:1584  
(a) The Panel finds that China, through the 2001 CCCMC Charter , Export Price 
Penalties Regulations , and Measures for Administration of Licensing Entities , 
imposed a minimum export price require ment on exporters of bauxite, coke, 
fluorspar, magnesium, silicon carbide, yellow phosphorus and zinc, that is inconsistent with Article XI:1 of the GATT 1994; 
(b) The Panel finds that China failed to publish promptly the 2001 CCCMC Charter  in 
such manner that is consistent w ith Article X:1 of the GATT 1994; and 
(c) The Panel does not make findings on whether the administration of the price 
verification and chop procedure to yellow  phosphorus by the CCCMC is inconsistent 
with Article X:3(a) of the GATT 1994 because it is outside the Panel's terms of reference. 
2. Nullification and impairment 
8.21 Under Article 3.8 of the DSU, in cases where there is infringement of the obligations assumed 
under a covered agreement, the action is considered prima facie  to constitute a case of nullification or 
impairment of benefits under that agreement. Acco rdingly, we conclude that where China has acted 
inconsistently with Articles X:1, X:3(a), XI:1 of the GATT 1994; Paragraphs 1.2, 5.1 and 11.3 of 
China's Accession Protocol; and Paragraphs 83 an d 84 of China's Working Party Report, it has 
nullified or impaired benefits accruing to  Mexico under the WTO Agreement.  
3. Recommendations 
8.22 Pursuant to Article 19.1 of the DSU, having fo und that China has acted inconsistently with 
Articles X:1, X:3(a) and XI:1 of the GATT 1994; Paragraphs 1.2, 5.1 and 11.3 of China's Accession 
Protocol; and Paragraphs 83 and 84 of China's Wo rking Party Report, the Panel recommends that the 
Dispute Settlement Body requests China to bring the existing measures at issue into conformity with 
its obligations under the GATT 1994, China's Accessi on Protocol and China's Working Party Report.  
The Panel makes no recommendation on expired measures, namely the 2009 measures at issue and pre-2009 MEP-related measures. In respect of fi ndings concerning export duties and export quotas, 
the Panel found that the series of measures operati ng collectively has resulted in the imposition of 
export duties or export quotas that are inconsiste nt with China's WTO obligations.  The Panel, 
therefore, recommends that the Dispute Settlement Body requests China to bring its measures into 
conformity with its WTO obligations such that th e "series of measures" does not operate to bring 
about a WTO-inconsistent result.  
__________ 
                                                      
1584 The specific forms of the raw materials subject to the Mexico's claims are identified in Exhibit JE-7 
and paragraph 2.2 of the Descriptive Part to these Reports.